SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
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ALLTRISTA CORPORATION
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ALLTRISTRA CORPORATION
555 Theodore Fremd Avenue, Suite B302
Rye, New York 10580
Dear Shareholder:
You are cordially invited to attend a special meeting of the shareholders of
Alltrista Corporation (the "Corporation") to be held on December 18, 2001, at
9:30 a.m. (EST) at 555 Theodore Fremd Avenue, Executive Conference Room A, Rye,
New York 10580.
At the special meeting, you will be asked to consider and vote upon the
following proposals: (i) to reincorporate the Corporation in the State of
Delaware, (ii) to increase the number of shares of Common Stock authorized for
issuance, (iii) to amend the certificate of incorporation to include a
provision eliminating liability for directors under certain circumstances, (iv)
to amend the Corporation's 1998 Long-Term Equity Incentive Plan and (v) to
adopt the Corporation's 2001 Stock Option Plan.
The Board of Directors believes that reincorporation of the Corporation in the
State of Delaware will provide added flexibility for both the management and
business of the Corporation as described further in the proxy statement and
that the increase in the number of shares of Common Stock will be beneficial to
the Corporation by providing it with flexibility to respond to future business
opportunities and needs as they arise. The purpose of the provision eliminating
liability for directors other than as required under Delaware law is to give
the directors substantially the same protections they have under Indiana law,
assuming shareholders approve the reincorporation of the Corporation in the
State of Delaware. The purpose of the amendments to the 1998 Long-Term Equity
Incentive Plan and the adoption of the 2001 Stock Option Plan is to better
enable the Corporation to attract and retain the best available personnel, to
encourage key personnel to make substantial contributions to the Corporation's
future success, and to ensure the Corporation can provide competitive
compensation opportunities to its personnel.
The Board of Directors, in a meeting held on November 8, 2001, unanimously
approved each of the aforementioned proposals and unanimously recommends that
shareholders vote FOR each of the proposals described in the Proxy Statement.
This proxy statement and the accompanying proxy are first being mailed to
shareholders on or about November 26, 2001. Your prompt submission of a proxy
card will be greatly appreciated.
Sincerely,
/s/ Martin E. Franklin
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Martin E. Franklin
Chairman and Chief Executive Officer
Rye, New York
November 26, 2001
ALLTRISTA CORPORATION
555 Theodore Fremd Avenue, Suite B302
Rye, New York 10580
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
to be held on December 18, 2001
To Our Shareholders:
You are cordially invited to attend a special meeting of shareholders (the
"Special Meeting") of Alltrista Corporation, an Indiana corporation (the
"Corporation"), which will be held at 555 Theodore Fremd Avenue, Executive
Conference Room A, Rye, New York 10580, on December 18, 2001 at 9:30 a.m.,
(EST), for the following purposes:
1. To consider and approve the reincorporation of the Corporation in the
State of Delaware;
2. To consider and approve an increase in the number of shares of Common
Stock authorized for issuance;
3. To consider and approve the inclusion of a provision in the certificate
of incorporation of the new Delaware corporation eliminating liability
for directors other than as required under Delaware law, subject to
approval by the shareholders of the proposal to reincorporate the
Corporation in the State of Delaware.
4. To consider and approve an amendment and restatement of the 1998
Long-Term Equity Incentive Plan to increase the number of shares of
Common Stock that may be issued thereunder by 350,000 shares and to
eliminate the annual automatic share increase currently provided for in
the Plan; and
5. To consider and approve the adoption of the Corporation's 2001 Stock
Option Plan.
Only holders of shares of Common Stock, no par value, of the Corporation
of record at the close of business on November 19, 2001, will be entitled to
notice of, and to vote at, the Special Meeting or any adjournment or
postponement thereof.
By Order of the Board of
Directors,
/s/ Ian G.H. Ashken
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IAN G.H. ASHKEN
Company Secretary
November 26, 2001
Rye, New York
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN YOUR PROXY IN THE ENCLOSED
ENVELOPE.
ALLTRISTA CORPORATION
555 THEODORE FREMD AVENUE, SUITE B302
RYE, NEW YORK 10580
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PROXY STATEMENT
November 26, 2001
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You are cordially invited to attend the Special Meeting of Shareholders
(the "Special Meeting") of Alltrista Corporation, an Indiana corporation
("Alltrista" or the "Corporation"), which will be held at 555 Theodore Fremd
Avenue, Executive Conference Room A, Rye, New York 10580, on December 18, 2001
at 9:30 a.m. (EST), and any adjournment or postponement thereof. This Proxy
Statement and accompanying proxy are first being mailed to shareholders on or
about November 26, 2001. This Proxy Statement and the accompanying proxy card
are furnished in connection with the solicitation of proxies by the Board of
Directors of the Corporation (the "Board") for use at the Special Meeting, or
at any adjournment or postponement thereof, for the purposes set forth in the
accompanying notice of Special Meeting.
PURPOSE OF THE SPECIAL MEETING; VOTING RIGHTS
At the Special Meeting, action will be taken on the following proposals:
o Proposal 1 -- To consider and approve the reincorporation of the
Corporation in the State of Delaware (the "Reincorporation Proposal").
Proposal 1 requires the affirmative vote of a majority of the outstanding
shares of Common Stock.
o Proposal 2 -- To consider and approve an increase in the number of
shares of Common Stock authorized for issuance. If Proposal 2 is
approved, the increase in the number of shares of Common Stock authorized
for issuance would be adopted regardless of whether the Reincorporation
Proposal is approved. If the Reincorporation Proposal is approved,
Proposal 2 will require the affirmative vote of a majority of the
outstanding shares of Common Stock. If the Reincorporation Proposal is
not approved, Proposal 2 will require the affirmative vote of a majority
of votes cast, provided a quorum (50% of the outstanding shares of Common
Stock) is present as is required under Indiana law.
o Proposal 3 -- To consider and approve the inclusion in the certificate
of incorporation of the new Delaware corporation of a provision
eliminating liability for directors other than as required under Delaware
law, subject to shareholder approval of the Reincorporation Proposal.
Proposal 3 requires the affirmative vote of a majority of the outstanding
shares of Common Stock.
o Proposal 4 -- To consider and approve an amendment and restatement of
the Corporation's 1998 Long-Term Incentive Plan to increase the number of
shares of Common Stock that may be issued thereunder by 350,000 shares
and to eliminate the annual automatic share increase currently provided
for in the Plan. Proposal 4 requires the affirmative vote of a majority
of the votes cast, provided that the total number of votes cast both for
and against such proposal represents a majority of the shares of Common
Stock outstanding.
o Proposal 5 -- To consider and approve the adoption of the Corporation's
2001 Stock Option Plan. Proposal 5 requires the affirmative vote of a
majority of the votes cast, provided that the total number of votes cast
both for and against such proposal represents a majority of the shares of
Common Stock outstanding.
1
SUMMARY OF THE REINCORPORATION PROPOSAL
Your Board proposes, in Proposal 1 below, to reincorporate Alltrista in
the State of Delaware. Currently, Alltrista is an Indiana corporation.
This summary highlights selected information about the reincorporation
proposal and may not contain all of the information that is important to you.
To better understand the reincorporation proposal and for a complete
description of the legal terms of the reincorporation, you should read this
entire proxy statement carefully, as well as those additional documents to
which we have referred you. Questions or requests for assistance may be
directed to Ian G.H. Ashken at 914-967-9400.
PRINCIPAL TERMS
o In order to reincorporate as a Delaware corporation, Alltrista will
organize a Delaware corporation and will own all of its stock. Alltrista
will then merge into its new Delaware subsidiary, and the Delaware
corporation will be the corporation that survives the merger. The
surviving corporation will be renamed "Alltrista Corporation."
o The new Delaware corporation will succeed to all of the rights,
properties and assets and assume all of the liabilities of Alltrista,
which will cease to exist as a result of the merger. The principal
offices, business, management and capitalization of the new Delaware
corporation will remain the same as those of Alltrista.
o Upon the effectiveness of the merger, each share of Common Stock of
Alltrista will automatically be converted into a share of common stock in
the new Delaware corporation. The existing stock certificates of
Alltrista (the Indiana corporation) will serve as valid stock
certificates for the new Delaware corporation (which will be renamed
"Alltrista Corporation").
o When Alltrista is reincorporated in Delaware, Alltrista will become
subject to the corporate laws of the State of Delaware and will no longer
be subject to the corporate laws of the State of Indiana. We have
highlighted below many of the differences in the corporate laws of the
State of Indiana and the laws of the State of Delaware. See Proposal 1 --
Reincorporation in the State of Delaware -- Delaware and Indiana
Corporate Laws.
o Although your rights as a stockholder will be governed by the laws of
the State of Delaware, the certificate of incorporation and bylaws of the
new Delaware corporation will be substantially the same as the current
articles of incorporation and bylaws of Alltrista. The only material
change in the certificate of incorporation of the new Delaware
corporation from the current articles of incorporation of Alltrista is an
increase in the number of authorized shares of Common Stock from
25,000,000 to 50,000,000. In addition, as described further in Proposal 3
-- Elimination of Director Liability, the liability for directors will be
eliminated in the new Delaware corporation certificate of incorporation
other than as required under Delaware law. We believe that the addition
of the provision eliminating director liability is not a material change
because a substantially similar provision exists under Indiana law. See
Proposal 2 -- Increase in Authorized Number of Shares of Common Stock and
Proposal 3 -- Elimination of Director Liability.
RECOMMENDATION OF ALLTRISTA'S BOARD
o Your board of directors has unanimously approved the merger, the merger
agreement and the proposed reincorporation of Alltrista in the State of
Delaware and has determined that the terms of each are in the best
interests of Alltrista. Your board of directors unanimously recommends
that you vote FOR the reincorporation proposal.
2
VOTE REQUIRED/CONDITIONS
o The approval of a majority of the outstanding shares of Common Stock of
Alltrista is required to approve the merger, the merger agreement and the
reincorporation proposal. However, before the reincorporation becomes
effective, your board of directors may decide not to cause the
reincorporation to occur if, for any reason, the board of directors
determines that the reincorporation is no longer in the best interests of
the Corporation.
FINANCIAL CONDITION OF THE NEW DELAWARE CORPORATION
o Prior to the reincorporation merger with Alltrista, the new Delaware
corporation will have no material assets and no business operations and
will be formed solely as a shell corporation for the purpose of the
reincorporation.
o Upon consummation of the reincorporation merger, the new Delaware
corporation will succeed to the rights, properties and assets and assume
the liabilities of Alltrista, and its financial statements will be
substantially identical to Alltrista's financial statements, the only
difference being those appropriate to reflect Alltrista's new corporate
identity.
HOW TO VOTE
o Shares held directly in your name as the "Shareholder Of Record" may be
voted in person at the Special Meeting. If you choose to do so, please
bring the enclosed proxy card or proof of identification. Even if you
currently plan to attend the Special Meeting, we recommend that you also
submit your proxy as described below so that your vote will be counted if
you later decide not to attend the meeting. Shares held in street name
may be voted in person by you only if you obtain a signed proxy from the
record holder giving you the right to vote the shares.
o Whether you hold shares directly as the shareholder of record or
beneficially in street name, you may direct your vote without attending
the meeting. You may vote by granting a proxy or, for shares held in
street name, by submitting voting instructions to your broker or nominee.
Please refer to the instructions included on your proxy card or, for
shares held in street name, the voting instruction card included by your
broker or nominee.
REVOKING YOUR PROXY
o You may revoke your proxy at any time before it is voted by any one of
the following actions:
(1) executing and returning a proxy bearing a later date to the company
secretary at Alltrista's principal offices;
(2) giving notice of such revocation to the company secretary; or
(3) by attending the meeting and voting in person.
SHARE CERTIFICATES
o You will not have to exchange your existing stock certificates for stock
certificates of the new Delaware corporation. See Proposal
1-Reincorporation in the State of Delaware -- The Merger.
APPRAISAL RIGHTS NOT AVAILABLE
o Appraisal rights will not be available to shareholders who dissent from
the reincorporation merger.
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PROXY INFORMATION
Your vote is important. Shareholders may sign, date and mail their proxies
in the postage-paid envelope provided. A shareholder of the Corporation who has
submitted a proxy may revoke it at any time before it is voted, but only by
executing and returning to the Company Secretary at 555 Theodore Fremd Avenue,
Suite B302, Rye, New York 10580, a proxy bearing a later date, by giving notice
of revocation to the Company Secretary, or by attending the meeting and voting
in person. Attendance at the meeting does not, by itself, revoke a proxy.
The Corporation may send only one copy of the Proxy Statement to multiple
shareholders that share the same address. Upon written or oral request, the
Corporation will promptly supply such shareholders additional copies of the
Proxy Statement. Such requests should be made by contacting the Corporation's
offices at 555 Theodore Fremd Avenue, Suite B302, Rye, New York 10580 or by
telephone at 914-967-9400, Attention: Investor Relations. If shareholders
sharing the same address are receiving multiple copies of annual reports or
proxy statements, such shareholders can request delivery in the future of only
a single copy of the annual reports or proxy statements by contacting the
Corporation at the above address.
SHAREHOLDERS ENTITLED TO VOTE, OUTSTANDING SHARES AND QUORUM
Holders of record of the Common Stock at the close of business on November
19, 2001 (the "Record Date") are entitled to notice of and to vote at the
Special Meeting. On September 30, 2001, there were 6,381,483 shares of Common
Stock outstanding. Each share of Common Stock is entitled to one vote on each
matter brought before the Special Meeting. The presence in person or by proxy
of holders of a majority of the issued and outstanding Common Stock will
constitute a quorum at the Special Meeting. If a quorum should not be present,
the Special Meeting may be adjourned from time to time until a quorum is
obtained.
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PROPOSAL 1 -- REINCORPORATION OF THE CORPORATION IN THE STATE
OF DELAWARE
The Board has unanimously approved the Reincorporation Proposal and
recommends that the shareholders approve and adopt the related Merger and
Merger Agreement (as hereinafter defined). The Reincorporation Proposal will be
effected by merging (the "Merger") the Corporation with and into a wholly-owned
subsidiary incorporated in the State of Delaware ("Alltrista Delaware")
pursuant to an Agreement and Plan of Merger (the "Merger Agreement") to be
entered into between the Corporation and Alltrista Delaware (the
"Reincorporation"). The form of Merger Agreement is included as Exhibit A to
this Proxy Statement.
Alltrista Delaware will be newly incorporated in Delaware solely for the
purpose of effecting the Reincorporation, and the Corporation will be its sole
stockholder. Alltrista Delaware will have no material assets and no business
operations prior to the Merger. In the Reincorporation, the Corporation will
merge with and into Alltrista Delaware, and Alltrista Delaware will be the
corporation surviving the Merger and will be renamed "Alltrista Corporation."
The address of the principal executive offices of the surviving corporation
will be the same as the current principal executive offices of the Corporation.
REASONS FOR THE REINCORPORATION
The Board believes that the Reincorporation will provide added flexibility
for both the management and business of the Corporation. Delaware is recognized
both domestically and internationally as a favorable legal and regulatory
environment within which to operate. Such an environment should enhance the
Corporation's operations and its ability to effect acquisitions and other
transactions. For many years, Delaware has followed a policy of encouraging
incorporation in that state and, in furtherance of that policy, has adopted
comprehensive, modern and flexible corporate laws which are periodically
updated and revised to meet changing business needs. In addition, the Delaware
courts have developed considerable expertise in dealing with corporate issues,
and a substantial body of case law has developed in the construction of
Delaware law, resulting in greater predictability with respect to corporate
legal affairs. As such, various major companies have either incorporated or
have subsequently reincorporated in Delaware.
THE MERGER
The Reincorporation will be effected through the Merger. As a result of
the Merger, the Corporation will be reincorporated as a new Delaware
corporation that will succeed to all of the rights, properties, assets and
liabilities of the Corporation. The terms and conditions of the Merger are set
forth in the Merger Agreement, and the summary of the terms and conditions of
the Merger set forth below is qualified by reference to the full text of the
Merger Agreement included as Exhibit A to this Proxy Statement.
Following the Reincorporation, the composition of the Board of Directors
of the Corporation will remain the same, and the rights of stockholders and the
Corporation's corporate affairs will be governed by the Delaware General
Corporation Law (the "DGCL") and the certificate of incorporation and bylaws of
Alltrista Delaware rather than by the Indiana Business Corporation Law (the
"IBCL") and the articles of incorporation and bylaws of the Corporation (the
"Company Articles" and the "Company Bylaws", respectively). Set forth below,
under the heading "Delaware and Indiana Corporate Laws," is a comparison of the
material rights of shareholders and matters of corporate governance before and
after the Reincorporation.
The forms of certificate of incorporation (the "Delaware Certificate") and
bylaws (the "Delaware Bylaws") of Alltrista Delaware are included as Exhibit B
and Exhibit C to this Proxy Statement, respectively. The summary of the
Delaware Certificate and the Delaware Bylaws set forth below is qualified by
reference to the full text of the Delaware Certificate and Delaware Bylaws. The
Company Articles and Company Bylaws and the Delaware Certificate and the
Delaware Bylaws are available for inspection by stockholders of the Corporation
at the principal offices of the Corporation located at 555 Theodore Fremd
Avenue, Suite B302, Rye, New York 10580.
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Upon the effectiveness of the Merger, and without any action on the part
of the Corporation or the holder of any securities of the Corporation, each
outstanding share of Common Stock will be automatically converted into one
share of common stock, no par value, of Alltrista Delaware. Each outstanding
certificate representing shares of Common Stock will continue to represent the
same number of shares of Common Stock, and such certificates will be deemed for
all corporate purposes to evidence ownership of shares of Common Stock of the
Corporation.
IT WILL NOT BE NECESSARY FOR THE CORPORATION'S SHAREHOLDERS TO EXCHANGE
THEIR EXISTING STOCK CERTIFICATES FOR STOCK CERTIFICATES UPON CONSUMMATION OF
THE REINCORPORATION.
The Common Stock will, subject to acceptance by the New York Stock
Exchange ("NYSE") of the supplemental listing application, continue to be
listed on the NYSE, without interruption, and NYSE will consider the delivery
of existing stock certificates of the Corporation as constituting "good
delivery" of stock certificates representing shares of Common Stock in stock
transactions effected after the Merger.
There are no state or federal regulatory requirements or approvals
necessary to consummate the Merger.
Following the Merger, the 2001 Stock Option Plan and the amended and
restated 1998 Long-Term Equity Incentive Plan, if approved by the shareholders
at the Special Meeting, and the other stock option and stock incentive plans
under which the Corporation has granted options will be continued, and the
options granted pursuant to such plans will automatically be converted into
options to purchase the same number of shares of Common Stock at the same
exercise price and upon the same terms and conditions as set forth in the
options. The Corporation's other employee benefit plans and arrangements will
also be continued upon the same terms and conditions existing before the
Merger.
Consummation of the Merger is subject to the approval of the Corporation's
shareholders. The affirmative vote of the holders of a majority of the
outstanding shares of Common Stock, whether or not present at the Special
Meeting, who are entitled to vote at the Special Meeting are required for the
approval and adoption of the Reincorporation Proposal. The Merger is expected
to become effective as soon as practicable after shareholder approval is
obtained and all other conditions to the Merger have been satisfied, including
the receipt of all consents, orders and approvals necessary for consummation of
the Merger and the continued listing of the shares of the Common Stock on the
NYSE. Prior to its effectiveness, however, the Merger may be abandoned by the
Board if, for any reason, the Board determines that consummation of the Merger
is no longer advisable.
Dissenters' rights are not available to shareholders of the Corporation
with respect to the proposed Merger.
ACCOUNTING TREATMENT OF THE REORGANIZATION
The Reincorporation will have no accounting implications on the historical
financial statements of the Corporation.
FEDERAL INCOME TAX CONSEQUENCES OF THE REINCORPORATION
A holder of the Common Stock will not recognize gain or loss in respect of
his Common Stock as a result of the Reincorporation. The basis in a share of
Common Stock after the Reincorporation will be the same as the basis in the
corresponding share of the Corporation held immediately prior to the
Reincorporation. A shareholder's holding period in a share of Common Stock will
include the period during which such shareholder held the corresponding share
of Common Stock prior to the Reincorporation, provided such shareholder held
the corresponding share as a capital asset at the time of the Reincorporation.
In addition, the Corporation will not, prior to or after the Reincorporation,
recognize gain or loss as a result of the Reincorporation, and the tax
attributes of the Corporation will remain the same after the Reincorporation.
The foregoing summary of federal income tax consequences is included for
general information only and does not address all income tax consequences to
all of the Corporation's shareholders. The
6
Corporation's shareholders are urged to consult their own tax advisors as to
the specific tax consequences of the Reincorporation, including the application
and effect of state, local and foreign income and other tax laws.
DELAWARE AND INDIANA CORPORATE LAWS
The following discussion includes a summary of the material differences
between the rights of the Corporation's shareholders before and after the
Reincorporation. In most cases, the rights of shareholders before and after the
Reincorporation are substantially similar, with changes having been made to the
corporate charter documents to maintain this substantial similarity. In other
cases, there are differences that might be considered material, and these
differences may be understood from the following comparison.
Board of Directors
Alltrista. Article IX of the Company Articles provides that the number of
directors (never less than two or more than nine) will be fixed from time to
time or in the manner provided in the Company Bylaws. The Company Bylaws state
that the number of directors will be nine. The Company Articles provide for a
classified board of directors with directors divided into three classes with
three-year terms of office which expire at different times. Each director is
entitled to serve for the longer of the term for which he was elected or until
his successor is elected and qualified. Directors may be removed for cause by a
vote of three-fourths of the shareholders entitled to vote at a shareholder
meeting called for that purpose. In addition, Article IX, Section E of the
Company Articles mandates that an affirmative vote of three-fourths of the
voting power of all the then outstanding capital stock of the Corporation
entitled to vote is required to alter, amend or repeal any provision of Article
IX.
Alltrista Delaware. The Delaware Certificate and the Delaware Bylaws will
provide for the same number of directors and a classified board with three year
terms as is provided for in the Company Articles and Company Bylaws. The
Delaware Bylaws will provide that the number of directors will be not less than
two and not more than nine. The Delaware Certificate will provide for a
classified board of directors with directors divided into three classes of
directors having staggered three-year terms of office. Directors may only be
removed for cause by a vote of three-fourths of the stockholders entitled to
vote at a stockholder meeting called for that purpose. In addition, the
Delaware Certificate will mandate, as does the Company Articles, that an
affirmative vote of three-fourths of the voting power of all the then
outstanding capital stock of the Corporation entitled to vote is required to
alter, amend or repeal any provision with respect to the number and terms of
directors and the required percentage of votes to remove such directors.
If the shareholders approve and adopt the Reincorporation Proposal, all
members of the Board immediately prior to the merger continue as members of the
Board. The Class III Directors' (Messrs. Huemme, Rooney and Wood) terms will
expire at the 2002 Annual Meeting; the Class I Directors' (Messrs. Swift and
Franklin) terms will expire at the 2003 Annual Meeting; and the Class II
directors' (Messrs. Molen and Ashken and Ms. Popwell) terms will expire at the
2004 Annual Meeting.
Authorized Shares
Alltrista. The Company Articles currently authorize 30,000,000 shares of
capital stock, consisting of 25,000,000 shares of Common Stock and 5,000,000
shares of Preferred Stock. As of September 30, 2001, there were 6,381,483
shares of Common Stock outstanding and 1,298,795 shares reserved for issuance
under options. There are currently 15,737,854 authorized and unissued shares of
Common Stock available for future issuance that are not otherwise reserved for
specific use.
Alltrista Delaware. Subject to shareholder approval of Proposal 2 --
Increase in the Authorized Number of Shares of Common Stock, the Delaware
Certificate will increase the authorized number of shares of capital stock from
30,000,000 to 55,000,000 and the number of authorized shares of Common Stock
from 25,000,000 to 50,000,000. See Proposal 2 -- Increase in the Authorized
Number of Shares of Common Stock for a complete description of the effects of
increasing the authorized number of shares of Common Stock.
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Limitation Of Director Liability
Alltrista. The Company Articles and the Company Bylaws do not contain a
specific exculpatory provision regarding director liability. Under Section
23-1-35-1 of the IBCL, directors are required to discharge their duties: (i) in
good faith; (ii) with the care an ordinarily prudent person in a like position
would exercise under similar circumstances; and (iii) in a manner the directors
reasonably believe to be in the best interests of the corporation. However,
this section also provides that a director is not liable for any action taken
as a director, or any failure to act, unless the director has breached or
failed to perform the duties of the director's office in compliance with that
section and the breach or failure to perform constitutes willful misconduct or
recklessness.
Alltrista Delaware. Subject to shareholder approval of Proposal 3 --
Elimination of Director Liability, the Delaware Certificate will provide that
directors of Alltrista Delaware will not be liable personally to Alltrista
Delaware or Alltrista Delaware stockholders for monetary damages for breach of
fiduciary duty as a director except for liability arising out of (a) any breach
of the director's duty of loyalty to Alltrista Delaware or the stockholders,
(b) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (c) payment of a dividend or approval of a stock
redemption or repurchase in violation of Section 174 of the DGCL, or (d) any
transaction from which the director derived an improper personal benefit. This
provision, which is substantially similar to Section 23-1-35-1 of the IBCL that
is currently applicable to Alltrista, protects Alltrista Delaware directors
against personal liability for monetary damages from breaches of their duty of
care. Under Delaware law, absent adoption of the aforementioned provision in
the Delaware Certificate, directors can be held liable for gross negligence in
connection with decisions made on behalf of the corporation in the performance
of their duty of care, but may not be liable for simple negligence. See
Proposal 3 -- Elimination of Director Liability for a complete description of
the proposal to eliminate the liability of directors under Delaware law.
Indemnification
Alltrista. Under Sections 23-1-37-1, et seq., of the IBCL and as mandated
by Article XI of the Company Articles and Article VII of the Company Bylaws,
directors, officers and other employees and individuals shall be indemnified
against expenses, judgments, fines and actions, suits or proceedings, whether
civil, criminal, administrative or investigative, if they (i) acted in good
faith and (ii) in the case of conduct in their official capacity with the
Corporation, they reasonably believed their conduct was in the best interests
of the Corporation or, in the other cases, if they reasonably believed their
conduct was at least not opposed to the best interest of the Corporation, and
(iii) regarding any criminal action or proceeding, if they had no reasonable
cause to believe their conduct was unlawful or if they had reasonable cause to
believe their conduct was lawful. To the extent that an officer or director
otherwise eligible to be indemnified is wholly successful, on the merits of any
claim or otherwise, in the defense of any proceeding, indemnification for
expenses actually and reasonably incurred is mandated by the IBCL, unless
limited by articles of incorporation. A claim, action, suit or proceeding
includes any claim, action, suit or proceeding that a person is threatened to
be made a party to, or is involved in, because he is or was a director, officer
or employee of the Corporation or of any subsidiary of the Corporation (or was
serving at the request of the Corporation as a director, officer, trustee,
employee or agent of another entity) while serving in such capacity. In
addition, the Company Bylaws provide for advancement of expenses to any person
indemnified pursuant to the Company Bylaws.
Alltrista Delaware. Under Section 145 of the DGCL, directors, officers,
employees and other individuals may be indemnified against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement in connection
with specified actions, suits or proceedings, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation, including derivative actions -- a "Corporation Action") if they
acted in good faith and in a manner they reasonably believed to be in, or not
opposed to, the best interests of the corporation, and, regarding any criminal
action or proceeding, had no reasonable cause to believe their conduct was
unlawful. A similar standard is applicable in the case of Corporation Actions,
except that indemnification only extends to expenses (including attorneys'
fees) incurred in connection with the defense or settlement of such actions.
The
8
DGCL further requires court approval before there can be any indemnification
where the person seeking indemnification has been found liable to the
corporation. To the extent that a director or officer is otherwise eligible to
be indemnified is successful on the merits of any claim or defense described
above, indemnification for expenses (including attorneys' fees) actually and
reasonably incurred is mandated by the DGCL.
The provisions regarding indemnification in the Delaware Certificate and
Delaware Bylaws will be substantially similar to the Company Articles and
Company Bylaws. The Delaware Certificate and Delaware Bylaws will also provide
that Alltrista Delaware will indemnify, to the fullest extent authorized by the
DGCL, each person who was or is made party to, is threatened to be made a party
to, or is involved in, any action, suit or proceeding because he is or was a
director or officer of Alltrista Delaware, or of any subsidiary of Alltrista
Delaware, while serving in such capacity, against all expenses, liabilities or
loss incurred by such person in connection therewith. The right to
indemnification is not exclusive of any other right which any person may have
or acquire under any statute, any provision of the Delaware Certificate or the
Delaware Bylaws, or otherwise.
Anti-takeover Statutes/Provisions
Alltrista. Chapter 43 of the IBCL prohibits any business combination, such
as a merger or consolidation, between an Indiana corporation with 100 or more
shareholders with shares of its stock registered under the federal securities
laws or which makes an election under the IBCL, and an "interested shareholder"
(which is defined generally as any owner of 10% or more of the corporation's
outstanding voting stock) for five years after the date on which such
shareholder became an interested shareholder unless the business combination or
the stock acquisition which caused the person to become an interested
shareholder was approved in advance by the corporation's board of directors.
This provision of the IBCL is effective even if all parties should subsequently
decide that they wish to engage in the business combination. Following the
five-year moratorium period, the Indiana corporation may engage in certain
business combinations with an interested shareholder only if, among other
things, (a) the business combination is approved by the affirmative vote of the
holders of a majority of the outstanding voting shares not beneficially owned
by the interested shareholder proposing the business combination or (b) the
business combination meets certain criteria designed to ensure that the
remaining shareholders receive fair consideration for their shares.
Chapter 42 of the IBCL contains a "control share acquisition" provision
which effectively denies voting rights to shares of an "issuing public
corporation" acquired in control share acquisitions unless the grant of such
voting rights is approved by a majority vote of disinterested shareholders. The
Company Bylaws provide that IBCL 23-1-42 does not apply to control share
acquisitions of shares of the Corporation.
The Company Articles include the Anti-Takeover Provision, which is
described under Delaware and Indiana Corporate Laws -- Authorized Shares and
which serves a function substantially similar to that of Chapter 43 of the
IBCL. The Delaware Certificate will contain an identical provision.
Alltrista Delaware. Section 203 of the DGCL ("Section 203") is similar,
but not identical, to Chapter 43 of the IBCL. Section 203, which applies to
Alltrista Delaware, regulates transactions with major stockholders after they
become major stockholders. Section 203 prohibits a Delaware corporation from
engaging in mergers, dispositions of 10% or more of its assets, certain
issuances of stock and other transactions ("business combinations") with a
person or group that owns 15% or more of the voting stock of the corporation
(an "interested stockholder") for a period of three years after the interested
stockholder crosses the 15% threshold. These restrictions on transactions
involving an interested stockholder do not apply if (a) before the interested
stockholder owned 15% or more of the voting stock, the board of directors
approved the business combination or the transaction that resulted in the
person or group becoming an interested stockholder, (b) in the transaction that
resulted in the person or group becoming an interested stockholder, the person
or group acquired at least 85% of the voting stock other than stock owned by
directors who are also officers and certain employee stock plans, or (c) after
the person or group became an interested stockholder, the board of directors
and at least two-thirds of the voting stock other than stock owned by the
interested stockholder approves the business combination at
9
a meeting. The restrictions contained in Section 203 do not apply to Alltrista
Delaware in connection with the Merger because, under Section 203(b)(4), such
restrictions generally do not apply where a corporation does not have a class
of voting stock that is (i) listed on a national securities exchange; (ii)
authorized for quotation on the Nasdaq Stock Market; or (iii) held of record by
more than 2,000 stockholders. The Delaware Certificate will contain the
Anti-Takeover Proposal currently contained in the Company Articles.
The DGCL does not have a statute that is similar to the Indiana control
share acquisitions statute that Alltrista has opted out of.
Preferred Stock
Alltrista. The Company Articles authorize the Board to determine the
preferences, limitations and relative rights of any class or series of
Corporation preferred stock prior to issuance. Each class or series must be
designated with a distinguishing designation prior to issuance. The preferred
shares will have preferences, limitations and relative rights identical with
those of other shares of the same series. See Proposal 2 -- Increase in the
Authorized Number of Shares of Common Stock for a discussion of the
anti-takeover effects of issuance of Preferred Stock.
Alltrista Delaware. The Delaware Certificate will also authorize the Board
to determine the preferences, limitations and relative rights of any class or
series of Corporation preferred stock prior to issuance. See Proposal 2 --
Increase in the Authorized Number of Shares of Common Stock for a discussion of
the anti-takeover effects of issuance of Preferred Stock.
Cumulative Voting
Section 23-1-30-9 of the IBCL and Section 214 of the DGCL provide that
cumulative voting rights, in respect of the election of directors, will only
exist if provided for in the corporation's articles/certificate of
incorporation. Neither the Company Articles nor the Delaware Certificate
provide for cumulative voting rights in the election of directors.
Action Without a Meeting
Alltrista. Under Section 23-1-29-4 of the IBCL, any action required or
permitted to be taken at a shareholders' meeting may be taken without a meeting
only by the unanimous written consent signed by all of the shareholders
entitled to vote on such action.
Alltrista Delaware. Section 228 of the DGCL permits any action required or
permitted to be taken at a stockholders' meeting to be taken by written consent
signed by the holders of the number of shares that would have been required to
effect the action at an actual meeting of the stockholders at which all shares
were present and voted. Section 228 of the DGCL will govern stockholders rights
in Alltrista Delaware.
Special Meetings
Alltrista. Section 23-1-29-2 of the IBCL requires a corporation with more
than 50 shareholders to hold a special meeting on call of its board of
directors or the person or persons (including, but not limited to, shareholders
or officers) specifically authorized to do so by the articles of incorporation
or bylaws. The Company Bylaws provide that a special meeting may be called by
the president, the Board or as otherwise may be required by law.
Alltrista Delaware. Section 211(d) of the DGCL authorizes the board of
directors or those persons authorized by the corporation's certificate of
incorporation or by-laws to call a special meeting of the corporation's
stockholders. The Delaware Bylaws will provide that a special meeting may be
called by the president, the Board or as otherwise may be required by law.
Voting, Appraisal Rights and Corporate Reorganizations
Alltrista. The IBCL requires a majority vote of shareholders to approve a
plan of merger or share exchange unless the articles of incorporation or board
requires a greater vote. Section 23-1-44-8 of the
10
IBCL does not provide for dissenters' rights for a merger or plan of share
exchange by a corporation the shares of which are (a) registered on a United
States securities exchange registered under the Exchange Act, or (b) traded on
NASDAQ or a similar market.
Alltrista Delaware. The DGCL generally requires a majority vote of
stockholders to approve a merger, sale of assets or similar reorganization
transaction. Section 262 of the DGCL does not provide for dissenters' rights of
appraisal for (a) the sale, lease or exchange of all or substantially all of
the assets of a corporation, (b) a merger by a corporation, the shares of which
are either listed on a national securities exchange or held by more than 2,000
stockholders if such stockholders receive shares of the surviving corporation
or of a listed or widely held corporation, or (c) certain mergers not requiring
stockholder approval.
Amendment to Certificate/Articles of Incorporation
Alltrista. Except as otherwise provided in the IBCL, an amendment to the
articles of incorporation must be approved by (i) a majority of the
shareholders with dissenter's rights on such amendment and (ii) a majority of
the votes cast when a quorum is present. The Company Articles currently require
the affirmative vote of three-fourths of the voting power of all the then
outstanding capital stock of the Corporation entitled to alter, amend or repeal
(i) any provision of Article IX of the Company Articles which governs the
number and term of directors and (ii) the Anti-Takeover Provision. See Delaware
and Indiana Corporate Laws -- Board of Directors and Anti-takeover
Statutes/Provisions.
Alltrista Delaware. The DGCL provides that an amendment to the certificate
of incorporation becomes effective upon the approval of a majority of the
outstanding stock entitled to vote. The Delaware Certificate will require the
affirmative vote of three-fourths of the voting power of all of the then
outstanding capital stock of the Corporation to amend (i) the provisions
governing the number and term of directors and (ii) the Anti-Takeover Provision
as is currently required by the Company Articles. For all other matters, the
Delaware Certificate will require approval of a majority of the outstanding
stock entitled to vote in order to approve an amendment to the Delaware
Certificate.
Amendment to Bylaws
Alltrista. Article VI of the Company Bylaws provides that the Board may
make, alter, amend or repeal the Company Bylaws by a majority vote. IBCL
Section 23-1-39-1 provides that only the Board may amend or repeal bylaws
unless a corporation's articles of incorporation provide otherwise.
Alltrista Delaware. Section 109 of the DGCL places the power to adopt,
amend or repeal bylaws in the corporation's stockholders, but permits the
corporation, in its certificate of incorporation, also to vest such power in
the board of directors. Although the Board will be vested with such authority
pursuant to the Delaware Certificate, the stockholders' power to adopt, amend
or repeal by-laws will remain unrestricted.
Preemptive Rights
Alltrista. IBCL Section 23-1-27-1 provides that the shareholders of a
corporation do not have a preemptive right to acquire a corporation's unissued
shares except to the extent the articles of incorporation so provide. Article
VI, Section (C) of the Company Articles provides that the Corporation's
shareholders will have no preemptive rights.
Alltrista Delaware. Under Section 102 of the DGCL, no statutory preemptive
rights will exist, unless a corporation's certificate of incorporation
specifies otherwise. The Delaware Certificate will not provide for any such
preemptive rights.
Dividend Rights
Alltrista. The IBCL does not permit dividend distributions if, after
giving effect to the proposed dividend, (a) the corporation would be unable to
pay its debts as they become due in the usual course of business, or (b) the
corporation's total assets would be less than the sum of its total liabilities
plus (unless
11
the articles of incorporation permit otherwise) the amount that would be
needed, if the corporation were to be dissolved at the time of distribution, to
satisfy the preferential rights (if any) of shareholders whose preferential
rights are superior to those of shareholders receiving the distribution.
Alltrista Delaware. Delaware corporations may pay dividends out of the
excess of the net assets of the corporation (the "Surplus") less the
consideration received by the corporation for any shares of its capital stock
(the "Capital") or, if there is no Surplus, out of net profits for the fiscal
year in which declared and/or the preceding fiscal year. Section 170 of the
DGCL also provides that dividends may not be paid out of net profits if, after
the payment of the dividend, Capital is less than the Capital represented by
the outstanding stock of all classes having a preference upon the distribution
of assets.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
REINCORPORATION PROPOSAL.
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PROPOSAL 2 -- INCREASE IN THE AUTHORIZED NUMBER OF SHARES OF
COMMON STOCK
GENERAL
On November 8, 2001, the Board of Directors unanimously adopted a
resolution, subject to shareholder approval, to increase the authorized number
of shares of capital stock from 30,000,000 to 55,000,000 and the number of
authorized shares of Common Stock from 25,000,000 to 50,000,000.
If the shareholders approve the Reincorporation Proposal, the increase in
authorized shares of Common Stock will be effected through the filing of a
Certificate of Ownership and Merger in the State of Delaware, which
incorporates the Certificate of Incorporation of Alltrista Delaware attached
hereto as Exhibit B. If the Reincorporation Proposal is not approved by
shareholders, the Corporation plans to file a certificate of Amendment to the
Articles of Incorporation, amending Articles V and VI as described above, as
soon as practicable following the Special Meeting, to be effective upon such
filing.
The Company Articles currently authorize 30,000,000 shares of capital
stock, consisting of 25,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock. As of September 30, 2001, there were 6,381,483 shares of
Common Stock outstanding and 1,298,795 shares reserved for issuance under
options. There are currently 15,737,854 authorized and unissued shares of
Common Stock available for future issuance that are not otherwise reserved for
specific use.
REASONS FOR INCREASING THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
The additional shares of Common Stock authorized upon adoption of this
proposal will be available for issuance from time to time as determined by the
Board, without further action by the stockholders and without first offering
the shares to the stockholders. The proposed increase will ensure that a
sufficient number of shares will be available, if needed, for issuance in
connection with any possible future actions approved by the Board, including,
among others, stock splits, stock dividends, acquisitions, financings, rights
offerings, employee benefit programs or other corporate purposes, or upon
exercise of stock options or warrants. The Board believes that the availability
of the additional shares for such purposes without delay or necessity for a
special stockholder's meeting (except as may be required by applicable law or
regulatory authorities or by the rules of any stock exchange on which the
Corporation's securities may be listed) will be beneficial to the Corporation
by providing it with the flexibility required to respond to future business
opportunities and needs as they arise. Currently, the NYSE requires a
stockholder vote prior to the issuance of more than 20% of the voting stock of
the Corporation to any party. The availability of additional authorized Common
Stock will also enable the Corporation to act promptly when the Board
determines that the issuance of additional shares of Common Stock is advisable.
Assuming the approval by shareholders of this proposal, there will be
40,737,854 authorized and unissued shares of Common Stock that are not reserved
for any specific use and are available for future issuance.
ANTI-TAKEOVER EFFECT
An increase in the number of shares of Common Stock that the Corporation
is authorized to issue could have a potential anti-takeover effect with respect
to the Corporation, although the Corporation's management has not proposed the
increase for that reason and does not presently anticipate using the additional
authorized shares for such a purpose. The potential anti-takeover effect of the
proposed amendment arises because the Corporation could issue additional shares
of Common Stock, up to the total authorized number, thereby diluting the
stockholdings and related voting rights of then existing stockholders in
proportion to the number of any additional shares issued.
The Company Articles and the Delaware Certificate also could have the
effect of deterring or delaying a change of control in the Corporation. The
Company Articles establish a classified board of directors, which makes it more
difficult for shareholders to change a majority of the directors. The Delaware
Certificate also establishes a classified board. In addition, the Company
Articles currently prevent any holder of 10% of the voting power of the
Corporation from (i) merging or consolidating with the Corporation, (ii)
entering into any sale or exchange with the Corporation having a fair market
value
13
of greater than $10,000,000 or (iii) being issued any securities having a value
greater than $10,000,000 without the approval of three-fourths of the then
outstanding shares of capital stock of the Corporation entitled to vote in the
election of directors unless the transaction (A) is approved by a majority of
disinterested directors of the Corporation or (B) the consideration received in
the transaction meets certain requirements as set forth in the Company Articles
(the "Anti-Takeover Provision"). The Delaware Certificate will contain an
identical provision.
In addition, the power of the Board, under both the Company Articles and
the Delaware Certificate, to issue Preferred Stock with voting or other powers,
preferences and rights may be used to impede or discourage a takeover attempt.
Generally, the issuance of Preferred Stock could (a) result in a class of
securities outstanding which will have certain preferences regarding
distributions in a liquidation over the Common Stock and might provide for
certain rights (whether general, special, conditional or limited) that could
dilute the voting rights of Common Stock and (b) result in dilution of the net
income per share and net book value per share relating to Common Stock.
Further, the issuance of any additional shares of Common Stock, pursuant to any
conversion rights granted holders of any Preferred Stock, may also result in
dilution of the voting rights, net income per share and net book value of
Common Stock.
VOTES REQUIRED
If Proposal 2 is approved, the increase in the number of shares of Common
Stock authorized for issuance would be adopted regardless of whether the
Reincorporation Proposal is approved. If the Reincorporation Proposal is
approved, Proposal 2 will require the affirmative vote of a majority of the
outstanding shares of Common Stock. If the Reincorporation Proposal is not
approved, Proposal 2 will require the affirmative vote of a majority of votes
cast, provided a quorum (50% of the outstanding shares of Common Stock) is
present as is required under Indiana law.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
INCREASE IN THE AUTHORIZED AMOUNT OF COMMON STOCK.
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PROPOSAL 3 -- ELIMINATION OF DIRECTOR LIABILITY
GENERAL
On November 8, 2001, the Board of Directors unanimously adopted a
resolution, subject to shareholder approval, to include in the Alltrista
Certificate a provision eliminating the personal liability of directors other
than as required under Delaware law.
REASONS FOR THE ELIMINATION OF LIABILITY
Under the IBCL, which governs Alltrista today, directors are not liable
for any action taken as a director unless the director has breached his or her
duties and such breach constitutes willful misconduct or recklessness. There is
no requirement under Indiana law that the Alltrista Articles or Alltrista
Bylaws contain any provision regarding such elimination; rather, directors are
granted such rights as a matter of Indiana law.
However, if the shareholders approve the Reincorporation Proposal, and the
Corporation is reincorporated in the State of Delaware, the directors are not
automatically given the same type of protection with respect to liability as a
matter of Delaware law. The DGCL requires the Delaware Certificate to include a
provision eliminating directors' liability in order to achieve that result. The
Board believes that if the Reincorporation Proposal is approved, the rights of
directors with respect to liability under Indiana law should remain
substantially similar under Delaware law after the Reincorporation. In order to
maintain directors' rights under Delaware law, the Delaware Certificate must
include a provision eliminating personal liability for directors. The Board
believes that the elimination of the personal liability of directors in
accordance with Delaware law will also ensure that the Corporation continues to
be able to attract and retain the best directors.
CURRENT RIGHTS OF DIRECTORS UNDER INDIANA LAW
Under Section 23-1-35-1 of the IBCL, directors are required to discharge
their duties: (i) in good faith; (ii) with the care an ordinarily prudent
person in a like position would exercise under similar circumstances; and (iii)
in a manner the directors reasonably believe to be in the best interests of the
corporation. However, this section also provides that a director is not liable
for any action taken as a director, or any failure to act, unless the director
has breached or failed to perform the duties of the director's office in
compliance with that section and the breach or failure to perform constitutes
willful misconduct or recklessness.
DIFFERENCES IN RIGHTS OF DIRECTORS UNDER DELAWARE AND INDIANA LAW
Under Delaware law, absent adoption of a provision eliminating liability
for directors, directors can be held liable for gross negligence in connection
with decisions made on behalf of a corporation in the performance of their duty
of care. Under Indiana law, only directors whose acts rise to the standard of
willful misconduct or recklessness can be held liable for their acts. Subject
to shareholder approval of this proposal, the Delaware Certificate will provide
that directors of Alltrista Delaware will not be liable personally to Alltrista
Delaware or Alltrista Delaware stockholders for monetary damages for breach of
fiduciary duty as a director except for liability arising out of (a) any breach
of the director's duty of loyalty to Alltrista Delaware or the stockholders,
(b) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (c) payment of a dividend or approval of a stock
redemption or repurchase in violation of Section 174 of the DGCL, or (d) any
transaction from which the director derived an improper personal benefit. This
provision protects Alltrista Delaware directors against liability for monetary
damages from breaches of their duty of care in substantially the same way as
directors under Indiana law are protected. Although the Delaware Certificate
will provide Alltrista Delaware directors with protection from certain awards
of monetary damages for breaches of their duty of care, it does not eliminate
the director's duty of care. Accordingly, such provision has no effect on the
availability of certain equitable remedies, such as an injunction, based upon a
director's breach of his duty of care. This provision does not apply to
officers of Alltrista Delaware who are not directors of Alltrista Delaware.
15
VOTES REQUIRED
The affirmative vote of a majority of the outstanding stock entitled to
vote is required to approve the elimination of liability for directors other
than as required under Delaware law.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
ELIMINATION OF LIABILITY FOR DIRECTORS OTHER THAN AS REQUIRED UNDER DELAWARE
LAW.
16
PROPOSAL 4 -- APPROVAL OF THE AMENDMENT TO THE ALLTRISTA CORPORATION 1998
LONG-TERM EQUITY INCENTIVE PLAN
The 1998 Long-Term Equity Incentive Plan (the "1998 Plan") was adopted by
the Board and approved by our shareholders in 1998. The 1998 Plan was
originally designed with a provision that automatically increases the number of
shares available for issuance pursuant to equity awards granted thereunder by
1% of the outstanding shares of Common Stock each year, capping the total
number of shares available each year at 1.5% of the outstanding (the "Evergreen
Provision"). The Board has amended and restated the 1998 Plan to eliminate the
Evergreen Provision in lieu of a fixed maximum number of shares available under
the 1998 Plan.
There are currently 87,040 shares of Common Stock available for issuance
under the 1998 Plan pursuant to the Evergreen Provision. The Board believes
that the current share allowance is insufficient to achieve the purposes of the
1998 Plan in the near-term. As part of the amendment and restatement of the
1998 Plan to eliminate the Evergreen Provision, the Board has increased the
number of shares available for issuance thereunder by 350,000 for a plan
maximum of 437,040 shares when added to the existing share allowance. The Board
believes that the increase in share allowance is necessary to continue to
attract and retain top management and Board talent and to further align the
interests of the Corporation's management and directors with those of the
shareholders.
The amendment and restatement of the 1998 Plan is subject to shareholder
approval. We are seeking shareholder approval of the amendment and restatement
in order to comply with the requirements of Sections 422 and 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), and the requirements of
the New York Stock Exchange, Inc. (the "NYSE"). The following summary of the
amended and restated 1998 Plan is qualified in its entirety by reference to the
text of the amended and restated 1998 Plan, a copy of which has been filed with
the Securities and Exchange Commission.
TERMS OF THE ALLTRISTA CORPORATION 1998 LONG-TERM EQUITY INCENTIVE PLAN
(AS AMENDED AND RESTATED)
PURPOSE
The purpose of the 1998 Plan is to promote the Corporation's success by
providing performance incentives for certain officers, employees, and
individuals who provide services to us, and to enable these individuals to
acquire or increase proprietary interest in our success.
ADMINISTRATION
The 1998 Plan is administered by a committee of Directors appointed by and
serving at the pleasure of the Board. Currently, the 1998 Plan is administered
by the Compensation Committee (the entity administering the 1998 Plan from time
to time will be referred to herein as the "Committee"). The Committee has
authority, subject to the terms of the 1998 Plan, to (i) select individuals who
will receive awards under the 1998 Plan; (ii) grant awards and determine the
types and sizes of awards (except non-employee Director options which are
granted pursuant to a formula or by the board of directors); (iii) determine
the terms and conditions of the awards granted under the 1998 Plan (other than
non-employee Director options); (iv) adopt, alter and repeal administrative
rules governing the 1998 Plan; (v) interpret the terms and conditions of the
1998 Plan and the awards granted thereunder; and (vi) otherwise administer and
supervise the 1998 Plan.
ELIGIBILITY
Any employee of the Corporation or a subsidiary who serves in a key
executive, administrative, professional, or technical capacity or other
individual who serves the Corporation will be eligible to receive discretionary
awards under the 1998 Plan. In addition, the 1998 Plan includes an annual stock
option grant for non-employee Directors. The total number of individuals
eligible to participate in the 1998 Plan is approximately fifty (50)
individuals, which includes the Named Executive Officers.
17
COMMON STOCK AVAILABLE
As noted above, if the amendment and restatement of the 1998 Plan is
approved by shareholders, the maximum number of shares authorized for issuance
under the 1998 Plan will be 437,040, which includes the 87,040 shares currently
available under the 1998 Plan and the additional 350,000 shares for which
approval is being sought. No employee may receive options or stock appreciation
rights covering more than 400,000 shares in any calendar year. The price per
share of Common Stock on the NYSE at the close of trading on November 12, 2001
was $15.40.
TYPES OF AWARDS
The Committee has broad discretion to establish stock-based incentive
awards designed to attract and retain key individuals and to motivate those
individuals to maximize shareholder value by aligning their interests with
those of the shareholders. The awards may consist of incentive stock options,
nonqualified stock options, restricted stock, stock equivalent units, stock
appreciation rights, and other stock-related forms of incentive compensation.
The Committee has the authority, subject to the terms of the 1998 Plan, to
select the individuals who will receive awards and determine the terms and
conditions applicable to the awards. Awards may be paid in cash, shares of
Common Stock, or a combination thereof. Pursuant to the 1998 Plan, non-employee
Directors will only be eligible to receive nonqualified stock options under a
formula program. Subject to certain limitations, the 1998 Plan grants each
non-employee Director an annual option to purchase 1,000 shares of Common Stock
with an exercise price equal to the fair market value of the shares on the date
of grant.
PAYMENT OF EXERCISE PRICE AND TAX WITHHOLDING OBLIGATIONS
In general, the Committee may permit a participant to pay the exercise
price for an option or other award and/or the participant's tax withholding
obligations in cash, by the transfer of shares of Common Stock, by the
surrender of all or part of an award, or by a combination of these methods.
CHANGE IN CONTROL
In general, (i) all outstanding stock options, stock appreciation rights,
and other stock rights will become fully exercisable, and (ii) all restrictions
and conditions applicable to restricted stock and other awards exercisable for
shares of Common Stock will be deemed to have been satisfied upon a Change In
Control (as defined in the 1998 Plan).
AMENDMENT, EFFECTIVE DATE, AND TERMINATION OF PLAN
The Board may amend, suspend, or terminate the 1998 Plan at any time.
Shareholder approval of an amendment will be required only to the extent
necessary to satisfy applicable federal and State law and stock exchange rules.
FEDERAL TAX CONSEQUENCES
Set forth below is a brief description of the federal income tax
consequences applicable to Options granted under the 1998 Plan.
Incentive Stock Options
No taxable income is realized by the optionee upon the grant or exercise
of an incentive stock option ("ISO"), within the meaning of Section 422 of the
Code. If Common Stock is issued to an optionee pursuant to the exercise of an
ISO, and if no disqualifying disposition of such shares is made by such
optionee within two years after the date of grant or within one year after the
transfer of such shares to such optionee, then (1) upon sale of such shares,
any amount realized in excess of the option price will be taxed to such
optionee as a long-term capital gain and any loss sustained will be a long-term
capital loss, and (2) no deduction will be allowed to the optionee's employer
for federal income tax purposes.
18
If the Common Stock acquired upon the exercise of an ISO is disposed of
prior to the expiration of either holding period described above, generally (1)
the optionee will realize ordinary income in the year of disposition in an
amount equal to the excess (if any) of the fair market value of such shares at
exercise (or, if less, the amount realized on the disposition of such shares)
over the option price paid for such shares, and (2) the optionee's employer
will be entitled to deduct such amount for federal income tax purposes if the
amount represents an ordinary and necessary business expense. Any further gain
(or loss) realized by the optionee will be taxed as short-term or long-term
capital gain (or loss), as the case may be, and will not result in any
deduction by the employer.
Subject to certain exceptions for disability or death, if an ISO is
exercised more than three months following termination of employment, the
exercise of the option will generally be taxed as the exercise of a
non-qualified stock option.
For purposes of determining whether an optionee is subject to any
alternative minimum tax liability, an optionee who exercises an ISO generally
would be required to increase his alternative minimum taxable income, and
compute the tax basis in the stock so acquired, in the same manner as if the
optionee had exercised a non-qualified stock option. Each optionee is
potentially subject to the alternative minimum tax. In substance, a taxpayer is
required to pay the higher of his alternative minimum tax liability or his
"regular" income tax liability. As a result, a taxpayer has to determine his
potential liability under the alternative minimum tax.
Non-Qualified Stock Options
With respect to nonqualified stock options: (1) no income is realized by
the optionee at the time the option is granted; (2) generally, at exercise,
ordinary income is realized by the optionee in an amount equal to the positive
difference between the option price paid for the shares and the fair market
value of the shares, if unrestricted, on the date of exercise, and the
optionee's employer is generally entitled to a tax deduction in the same amount
subject to applicable tax withholding requirements; and (3) at sale,
appreciation (or depreciation) after the date of exercise is treated as either
short-term or long-term capital gain (or loss) depending on how long the shares
have been held.
Special Rules Applicable to Corporate Insiders
Pursuant to Section 83 of the Code and the rules under Section 16(b) of
the Exchange Act ("Section 16(b)"), and depending upon the particular exemption
from the provisions of Section 16(b) utilized, officers and directors of the
Company and persons owning more than 10 percent of the outstanding shares of
stock of the Company ("Insiders") may not receive the same tax treatment as set
forth above with respect to the grant and/or exercise of options. Generally,
Insiders will not be subject to taxation until the expiration of any period
during which they are subject to the liability provisions of Section 16(b) with
respect to any particular option.
NEW PLAN BENEFITS
The following table sets forth the non-qualified stock options to be
granted to the non-employee Directors under the automatic formula grant
provision of the amended 1998 Plan at the next Annual Meeting of Shareholders.
NAME AND POSITION DOLLAR VALUE NUMBER OF UNITS
- ------------------------- -------------- ----------------
Non-Executive
Director Group ......... N/A 6,000
As noted above, each non-employee Director will automatically be granted a
non-qualified stock option to purchase 1,000 shares of Common Stock at each
Annual Meeting of Shareholders. Except for the automatic formula grant of
non-qualified stock options to non-employee Directors, the grant of awards
under the amended 1998 Plan is entirely within the discretion of the Committee.
19
VOTE REQUIRED TO APPROVE THE AMENDMENT TO THE 1998 PLAN
Adoption of the amendment and restatement of the 1998 Plan requires the
affirmative vote of a majority of the votes cast, provided that the total
number of votes cast both for and against such proposal represents a majority
of the shares of Common Stock outstanding.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL OF
THE AMENDMENT AND RESTATEMENT OF THE ALLTRISTA CORPORATION 1998 PLAN.
20
PROPOSAL 5 -- APPROVAL OF THE ALLTRISTA CORPORATION 2001 STOCK
OPTION PLAN
The Board unanimously approved the 2001 Stock Option Plan (the "2001
Plan"), on September 24, 2001. The 2001 Plan provides for the grant of options
to purchase shares of Common Stock to each of the non-employee directors of the
Corporation and to Mr. Franklin and Mr. Ashken as of September 24, 2001. These
option grants and the 2001 Plan are subject to shareholder approval. We are
seeking shareholder approval of the 2001 Plan and the option grants thereunder
in order to comply with the requirements of Section 162(m) of the Code and the
requirements of the NYSE. The following summary of the 2001 Plan is qualified
in its entirety by reference to the text of the 2001 Plan, which has been filed
with the Securities and Exchange Commission.
PURPOSE
The purpose of the 2001 Plan is to enable the Corporation to provide
incentives to its executive officers and non-employee directors, to encourage
them to make substantial contributions to the Corporation's future success, to
align their compensation with the performance of the Corporation's Common Stock
and to ensure that the Corporation can provide competitive compensation
opportunities to such personnel. Unlike awards under the 1998 Plan, vesting of
stock options granted under the 2001 Plan is intended to be tied to primarily
to the increase in share value.
ADMINISTRATION
The 2001 Plan is administered by a committee of Directors appointed by and
serving at the pleasure of the Board. Currently, the 2001 Plan is administered
by the Compensation Committee (the entity administering the 2001 Plan from time
to time will be referred to herein as the "Committee"). The Committee may
establish and adopt resolutions, rules and regulations for the administration
of the 2001 Plan and may take such other action with regard to the 2001 Plan
and the options granted thereunder as it deems appropriate, including the
selection of additional executive officers to receive options.
AWARDS
Options granted under the 2001 Plan will be nonqualified stock options
("NQSOs"); and not "incentive stock options" within the meaning of Section 422
of the Code.
Under the terms of the 2001 Plan, on September 24, 2001, Mr. Franklin was
granted Options with respect to 300,000 shares of Common Stock and Mr. Ashken
was granted Options with respect to 150,000 shares of Common Stock. In
addition, on September 24, 2001, each of the non-employee Directors of the
Corporation was granted Options with respect to 20,000 shares of Common Stock.
All Options granted under the 2001 Plan have a per-share exercise price equal
to the Fair Market Value (defined as the most recent closing price of a share
of Common Stock on the New York Stock Exchange) of one share of Common Stock as
of the date of grant. The per-share exercise price of the Options granted above
is $10.95 which represents the Fair Market Value of a share of Common Stock as
of close of business on September 21, 2001.
As noted above, the 2001 Plan and these Option grants are subject to
shareholder approval and if not approved, the plan and the Options will be
void. The Committee has discretion to grant additional Options with respect to
an additional 80,000 shares of Common Stock to any executive officer of the
Corporation and its subsidiaries. Approximately 14 individuals, including
Messrs. Franklin and Ashken and the non-employee Directors, are currently
eligible to participate in the 2001 Plan. The option exercise price may be paid
(i) in cash, by check, (ii) in shares of Common Stock (with the consent of the
Committee) or (iii) by any other means approved by the Committee.
Options granted under the 2001 Plan will vest and become exercisable on
the earlier of (i) the first date after the grant date on which the Fair Market
Value of a Common Share equals or exceeds seventeen dollars ($17.00) or (ii)
the seventh anniversary of the date of grant. All vesting with respect to
Options held by a particular Optionee shall cease upon such Optionee's
termination of employment or service with
21
the Company. Options granted to individuals other than Messrs. Franklin and
Ashken will expire on the earlier of (i) the tenth anniversary of the date of
grant or (ii) the date that is one year after the Optionee terminates his or
her employment or directorship with the Company. One-half of Mr. Franklin's and
Mr. Ashken's Options, respectively, will expire immediately on the earlier of
(i) their voluntary resignation from service with the Company, respectively, if
such resignation occurs on or before March 31, 2002, (ii) the first anniversary
of the date of their death or (iii) the tenth anniversary of the date of grant.
The remainder of Messrs. Franklin's and Ashken's Options will expire on the
earlier of (i) the first anniversary of the date of their death or (ii) the
tenth anniversary of the date of grant.
The total number of shares of Common Stock which may be issued under the
2001 Plan including those subject to the Options granted to Messrs. Franklin
and Ashken and to the non-employee Directors noted above is limited to 650,000.
No employee may receive Options covering more than 400,000 shares of Common
Stock in any calendar year.
Unless otherwise determined by the Committee, either at the date of grant
or some later date, all Options under the 2001 Plan are nontransferable and may
be exercised only by the grantee or the grantee's heirs, legatees or personal
representatives.
The Committee also has discretion to make adjustments to the 2001 Plan and
outstanding Options in the event of certain adjustments in capitalization of
the Corporation and other corporate events, including adjusting the number of
shares subject to the 2001 Plan and each Option and the exercise price and
value determinations applicable to Options as appropriate to preserve the
economic terms of the Options.
The Committee may amend or terminate the 2001 Plan at any time, in its
sole discretion, provided that any such termination or amendment may not
adversely affect any outstanding Option without the consent of the optionee.
MARKET VALUE
The price per share of Common Stock on the NYSE at the close of trading on
November 12, 2001 was $15.40.
FEDERAL TAX CONSEQUENCES
Set forth below is a brief description of the federal income tax
consequences applicable to Options granted under the 2001 Plan.
(1) No income is realized by the optionee at the time the Option is
granted; (2) generally, at exercise, ordinary income is realized by the
optionee in an amount equal to the positive difference between the option price
paid for the shares and the fair market value of the shares, if unrestricted,
on the date of exercise, and the optionee's employer is generally entitled to a
tax deduction in the same amount subject to applicable tax withholding
requirements; and (3) at sale, appreciation (or depreciation) after the date of
exercise is treated as either short-term or long-term capital gain (or loss)
depending on how long the shares have been held.
Special Rules Applicable to Corporate Insiders
Pursuant to Section 83 of the Code and the rules under Section 16(b) of
the Exchange Act ("Section 16(b)"), and depending upon the particular exemption
from the provisions of Section 16(b) utilized, officers and directors of the
Corporation and persons owning more than 10 percent of the outstanding shares
of stock of the Corporation ("Insiders") may not receive the same tax treatment
as set forth above with respect to the grant and/or exercise of Options.
Generally, Insiders will not be subject to taxation until the expiration of any
period during which they are subject to the liability provisions of Section
16(b) with respect to any particular Option.
ACCOUNTING IMPACT
Because the Options granted to Messrs. Franklin and Ashken and the
non-employee Directors are subject to the approval of the shareholders which
cannot occur until the Special Meeting, the Options will
22
result in a one time charge to income if the fair market value of the Common
Stock at the time of shareholder approval exceeds the $10.95 exercise price of
the Options (the "Spread"). The accounting charge, if any, will be equal to the
number of shares of Common Stock underlying the Options multiplied by the
Spread.
NEW PLAN BENEFITS
The following table sets forth the Options to be granted to Messrs.
Franklin, Ashken and the non-employee Directors under the 2001 Plan.
NAME AND POSITION DOLLAR VALUE NUMBER OF UNITS
- ------------------------------------------ -------------- ----------------
Martin E. Franklin ....................... N/A 300,000
Chairman and Chief Executive Officer
Ian G. H. Ashken ......................... N/A 150,000
Vice Chairman and Chief Financial Officer
Mr. Richard L. Molen ..................... N/A 20,000
Director
Mr. Lynda W. Popwell ..................... N/A 20,000
Director
Mr. Douglas W. Huemme .................... N/A 20,000
Director
Mr. Patrick W. Rooney .................... N/A 20,000
Director
Mr. Robert L. Wood ....................... N/A 20,000
Director
Mr. David L. Swift ....................... N/A 20,000
Director
In addition to the grants set forth above, the Committee may grant Options
with respect to an additional 80,000 shares of Common Stock under the 2001 Plan
to other executive officers of the Corporation. Because future Option grants
under the 2001 Plan are entirely within the discretion of the Committee, the
Corporation cannot forecast the extent of awards that will be granted in the
future.
VOTE REQUIRED TO APPROVE THE 2001 STOCK OPTION PLAN
Approval of the 2001 Plan Proposal requires the affirmative vote of a
majority of the votes cast, provided that the total number of votes cast both
for and against such proposal represents a majority of the shares of Common
Stock outstanding.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE 2001
STOCK OPTION PLAN.
23
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
So far as is known to the Board, the following table indicates the only
beneficial owners of more than five percent of the Corporation's outstanding
Common Stock as of November 12, 2001. The information shown below is derived
from the latest reports provided to the Corporation by the entities named
below. Unless otherwise noted, the Corporation believes that the persons named
in this table have sole voting and dispositive power with respect to the shares
listed.
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED PERCENT OF CLASS (6)
- ---------------------------------------- --------------------------- ---------------------
AXA Financial, Inc. .................... 756,730(1) 11.86%
1290 Avenue of the Americas, 11th Floor
New York, NY 10104
Marlin Partners II, L.P. ............... 647,100 10.14
555 Theodore Fremd Avenue, Suite B-302
Rye, NY 10580
First Manhattan Co. .................... 605,459(2) 9.49
437 Madison Avenue
New York, NY 10022-7002
Steel Partners II, L.P. ................ 626,000(3) 9.8
150 East 52nd Street, 21st Floor
New York, NY 10022
Wachovia Corporation and Wachovia Bank,
National Association .................. 364,700(4) 5.71
100 North Main Street
Winston-Salem, NC 27104
- ----------
(1) Based solely on a Schedule 13G filed as amended and filed February 12,
2001, with the Securities and Exchange Commission ("SEC") by a group
(collectively referred to hereinafter as the "AXA Group") and their
subsidiaries. The AXA Group includes AXA Financial, Inc.; AXA, the
majority shareholder of AXA Financial, Inc.; and four French mutual
insurance companies which, as a group, control AXA: AXA Assurances
I.A.R.D Mutuelle, AXA Assurances Vie Mutuelle, AXA Conseil Vie Assurances
Mutuelle and AXA Courtage Assurances Mutuelle. The address of AXA is 25,
avenue Matignon, 75008 Paris, France. The address for AXA Assurances
I.A.R.D Mutuelle, AXA Assurances Vie Mutuelle and AXA Conseil Vie
Assurances Mutuelle is 370, rue Saint Honore, 75001 Paris, France. The
address for AXA Courtage Assurances Mutuelle is 26, rue Louis le Grand,
75002 Paris, France. The AXA Group has sole voting power over 627,875 of
these shares and shared voting power over 7,305 of these shares.
(2) Based solely on a Schedule 13G as amended and filed February 7, 2001,
with the SEC by First Manhattan Co. The Schedule 13G further reports that
First Manhattan Co. has sole dispositive power and power to vote 17,550
of these shares, shared power to vote 581,099 of these shares, and shared
dispositive power of 587,909 of these shares. First Manhattan Co.
disclaims dispositive power as to 1,000 of such shares and beneficial
ownership as to 91,300 of such shares.
(3) Based solely on a Schedule 13D filed August 28, 2001, with the SEC by
Steel Partners II, L.P.
(4) Based solely on a Schedule 13G as amended and filed February 14, 2001,
with the SEC by Wachovia Corporation and Wachovia Bank, National
Association. The Schedule 13G further reports that Wachovia Corporation
and Wachovia Bank, National Association has sole dispositive power and
power to vote 364,550 of these shares, shared dispositive power and power
to vote 150 of these shares.
(5) Percent of Class is based upon the common shares outstanding and entitled
to vote as of September 30, 2001. There were 6,381,483 shares outstanding
and entitled to vote as of September 30, 2001.
24
SECURITY OWNERSHIP BY MANAGEMENT AND DIRECTORS
The following table lists the beneficial ownership Common Stock of the
Corporation, as of the close of business as of November 12, 2001, held by
director nominees, continuing directors, each of the non-director executive
officers named in the Summary Compensation Table, and all directors and
executive officers as a group. Unless otherwise noted, the beneficial owner has
sole voting and investment power.
SHARES BENEFICIAL
NAME OF BENEFICIAL OWNER OWNERSHIP(1) PERCENT OF CLASS(3)
- ---------------------------------------------------- ------------------ --------------------
Martin E. Franklin ................................. 647,100(2) 10.14%
Ian G. H. Ashken ................................... 647,100(2) 10.14%
Douglas W. Huemme .................................. 2,675 *
Angela K. Knowlton ................................. 4,763 *
Richard L. Molen ................................... 6,400 *
Lynda W. Popwell ................................... 4,425 *
Patrick W. Rooney .................................. 6,500 *
David L. Swift ..................................... 7,100 *
J. David Tolbert ................................... 6,562 *
Robert L. Wood ..................................... 2,000 *
All of the above and present executive Officers as a
group (10 persons) ................................ 687,525 10.67%
- ----------
* Less than 1%
(1) The shares shown include the following shares that may be purchased
pursuant to stock options that are exercisable within 60 days of November
12, 2001: Mr. Huemme, 1,000 shares; Ms. Knowlton, 3,500 shares; Mr.
Molen, 5,050 shares; Ms. Popwell, 3,000 shares; Mr. Rooney, 4,700 shares;
Mr. Swift, 5,400 shares; Mr. Tolbert, 4,500 shares; and Mr. Wood, 1,000
shares.
(2) The 300,000 options to purchase Common Stock granted to Martin E.
Franklin and the 150,000 options to purchase Common Stock granted to Ian
G.H. Ashken pursuant to the 2001 Stock Option Plan are not included
because such option grants are subject to shareholder approval.
(3) Percent of Class is based upon the common shares outstanding and entitled
to vote as of September 30, 2001. There were 6,381,483 shares outstanding
and entitled to vote as of September 30, 2001.
25
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the annual and long-term
compensation of the Chief Executive Officer and the four other most highly
compensated executive officers (the "Named Executive Officers") of the
Corporation for the year ended December 31, 2000 for services in all capacities
to the Corporation. Kevin D. Bower and Thomas B. Clark resigned from the
Corporation as of September 25, 2001 and Jerry T. McDowell resigned from the
Corporation on August 17, 2001. Martin E. Franklin was appointed Chairman and
Chief Executive Officer and Ian G. H. Ashken was appointed Vice Chairman, Chief
Financial Officer and Secretary on September 25, 2001.
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------- ---------------------------
AWARD PAYOUT
------------- -------------
SECURITIES
UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITIONS (1) YEAR SALARY BONUS (2) OPTIONS (#) PAYOUTS (3) COMPENSATION (4)
- ---------------------------------- ------ ----------- ----------- ------------- ------------- -----------------
Thomas B. Clark (5) ............. 2000 $331,923 $ 0 15,000 $ 0 $65,856
Chairman, President and 1999 309,461 402,300 0 3,226 48,152
Chief Executive Officer 1998 281,134 248,523 0 4,839 36,597
Kevin D. Bower (6) .............. 2000 174,615 0 10,000 0 13,805
Senior Vice President and 1999 157,692 157,692 0 860 12,400
Chief Financial Officer 1998 149,038 101,346 0 1,290 11,218
Angela K. Knowlton(7) ........... 2000 123,461 0 7,500 0 8,344
Vice President, Finance and
Treasurer
Jerry T. McDowell ............... 2000 216,407 0 10,000 0 52,217
Group Vice President, 1999 201,638 201,638 0 22,630 57,097
Metal Products 1998 209,192 104,596 0 11,315 41,780
J. David Tolbert ................ 2000 134,653 0 7,500 0 10,119
Vice President, Human Resources 1999 129,615 77,769 0 0 9,887
and Administration 1998 117,692 48,018 0 0 8,680
- ----------
(1) Martin E. Franklin was appointed Chairman and Chief Executive Officer on
September 25, 2001. Ian G. H. Ashken was appointed Vice Chairman, Chief
Financial Officer and Secretary on September 25, 2001. Messrs. Franklin
and Ashken will each be paid an initial salary of $200,000. In connection
with such employment, the Corporation granted 300,000 options to purchase
Common Stock, subject to shareholder approval of the 2001 Stock Option
Plan to Mr. Franklin and 150,000 options to purchase Common Stock,
subject to shareholder approval of the 2001 Stock Option Plan to Mr.
Ashken.
(2) The Named Executive Officers did not receive a payment from the
EVA/Growth Plan for 2000.
(3) Represents amounts paid from the "bank" under the Corporation's
EVA/Growth Plan for prior performance (See "Report of The Executive
Compensation Committee, Cash Compensation"). For the year 2000, the
following negative performance amounts were applied against the positive
bank balances carried over from prior year's performance, thus reducing
the balances that otherwise would have been distributed in future years:
Mr. Clark, ($58,252); Mr. Bower, ($23,573); Ms. Knowlton, ($10,000); Mr.
McDowell, ($30,297) and Mr. Tolbert, ($10,906).
26
(4) The amounts shown in the All Other Compensation column for 2000 are
comprised as follows: Mr. Clark--above-market interest on deferred
compensation account, $11,825; life insurance premiums, $828; long-term
disability premiums, $6,741; the Corporation's match on the employee's
401(k) contribution, $6,800; the Corporation's additional contribution to
the employee's 401(k), $7,650; the Corporation's contribution to the
excess savings and retirement account for 2000, $32,012. Mr. Bower--life
insurance premiums, $828; long-term disability premiums, $995; the
Corporation's match on the employee's 401(k) contribution, $6,800; the
Corporation's additional contribution to the employee's 401(k), $2,550;
the Corporation's contribution to the excess savings and retirement
account for 2000, $2,632. Ms. Knowlton--life insurance premiums, $690;
long-term disability premiums, $609; the Corporation's match on the
employee's 401(k) contribution, $4,938; the Corporation's additional
contribution to the employee's 401(k), $1,700; the Corporation's
contribution to Employee Stock Purchase Plan, $260; the Corporation's
contribution to the excess savings and retirement account for 2000, $147.
Mr. McDowell--above-market interest on deferred compensation account,
$21,670; life insurance premiums, $828; long-term disability premium,
$1,233; the Corporation's match on the employee's 401(k) contribution,
$6,800; the Corporation's additional contribution to the employee's
401(k), $7,650; the Corporation's contribution to the excess savings and
retirement account for 2000, $14,036. Mr. Tolbert--life insurance
premiums, $744; long-term disability premiums, $665; the Corporation's
match on the employee's 401(k) contribution, $5,386; the Corporation's
additional contribution to the employee's 401(k), $1,700; the
Corporation's contribution to Employee Stock Purchase Plan, $1,200; the
Corporation's contribution to the excess savings and retirement account
for 2000, $424.
(5) Mr. Clark resigned as Chairman, President and Chief Executive Officer on
September 25, 2001.
(6) Mr. Bower resigned as Senior Vice President and Chief Financial Officer
on September 25, 2001.
(7) Information regarding annual and long-term compensation for Ms. Knowlton
for 1999 and 1998 has not been included as she was not a Named Executive
Officer for those years.
27
LONG-TERM INCENTIVE PLAN
AWARDS IN LAST FISCAL YEAR
The following table summarizes the performance share grants of stock
equivalent units in 2000 for the Named Executives Officers.
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE-BASED PLANS (4) (5)
------------------------------------------------
PERFORMANCE
NUMBER OF PERIOD UNTIL THRESHOLD TARGET MAXIMUM
NAME UNITS MATURATION (# OF SHARES) (# OF SHARES) (# OF SHARES)
- ---------------------------- -------------- -------------- --------------- --------------- --------------
Thomas B. Clark ............ 2,333(1) 1998-2000 0 2,333 3,499
2,759(2) 1999-2001 0 2,759 4,138
2,992(3) 2000-2002 0 2,992 4,488
Kevin D. Bower ............. 705(1) 1998-2000 0 705 1,058
833(2) 1999-2001 0 833 1,249
904(3) 2000-2002 0 904 1,356
Angela K. Knowlton ......... 411(1) 1998-2000 0 411 617
486(2) 1999-2001 0 486 729
527(3) 2000-2002 0 527 791
Jerry T. McDowell .......... 705(1) 1998-2000 0 705 1,058
833(2) 1999-2001 0 833 1,249
904(3) 2000-2002 0 904 1,356
J. David Tolbert ........... 411(1) 1998-2000 0 411 617
486(2) 1999-2001 0 486 729
527(3) 2000-2002 0 527 791
- ----------
(1) The third grant of Stock Equivalent Units ("Units") for the performance
period of three consecutive calendar years beginning January 1, 1998
under the 1998 Long-Term Equity Incentive Plan. The three-year program
1998-2000 ended December 31, 2000 and as a result of the actual levels of
performance during the three-year period there was no payout for this
Plan.
(2) The second grant of stock Units for the performance period of three
consecutive calendar years beginning January 1, 1999, under the 1998
Long-Term Equity Incentive Plan.
(3) The first grant of stock Units for the performance period of three
consecutive calendar years beginning January 1, 2000, under the 1998
Long-Term Equity Incentive Plan.
(4) Units will be convertible into shares of Common Stock following the end
of the three-year performance period based on the Corporation's actual
performance compared to threshold, target and maximum performance levels
established by the Committee. If the threshold level of performance is
not exceeded, the Units will be forfeited and no shares of Common Stock
will be issued. If the target level of performance is achieved, then
Units will be convertible into shares of Common Stock equal in number to
the target number of shares of Common Stock. If the maximum level of
performance is achieved or exceeded, then Units will be convertible into
shares of Common Stock equal in number to 150% of the target number of
shares. The number of shares into which Units are convertible for levels
of performance between threshold and target and between target and
maximum will be based on interpolation. If a recipient of Units
terminates employment prior to the end of the three-year performance
period for any reason other than retirement, disability or death, the
recipient forfeits all rights with respect to the Units.
(5) The Estimated Future Payout for Target and Maximum are as of the grant
date for each performance period. The three-year program 1998-2000 ended
December 31, 2000 and as a result of the actual levels of performance
during the three-year period there was no payout for this Plan.
28
OPTION GRANTS IN 2000
The following table summarizes the grants of stock options awarded during
2000 under the Corporation's Stock Option Plan to the Named Executive Officers.
INDIVIDUAL GRANTS
--------------------------------------------
POTENTIAL REALIZABLE
VALUE
AT ASSUMED RATES OF
STOCK
PERCENTAGE OF TOTAL PRICE APPRECIATION FOR
NUMBER OF SECURITIES OPTIONS GRANTED TO OPTION TERM (3)
UNDERLYING OPTIONS EMPLOYEES IN FISCAL EXERCISE EXPIRATION -----------------------
NAME GRANTED (1) 2000 PRICE ($/SH.) DATE (2) 5% 10%
- ---------------------------- ---------------------- --------------------- --------------- ------------ ----------- -----------
Thomas B. Clark ............ 15,000 20.5% $ 12.50 12/21/2010 $117,917 $298,826
Kevin D. Bower ............. 10,000 13.7% 12.50 12/21/2010 78,611 199,217
Angela K. Knowlton ......... 7,500 10.3% 12.50 12/21/2010 58,958 149,413
Jerry T. McDowell .......... 10,000 13.7% 12.50 12/21/2010 78,611 199,217
J. David Tolbert ........... 7,500 10.3% 12.50 12/21/2010 58,958 149,413
- ----------
(1) Options were granted to the Named Executive Officers on December 21,
2000, and are exercisable in four equal annual installments beginning one
year from the date of grant.
(2) Subject to earlier expiration if the executive officer ceases to be an
employee of the Corporation.
(3) The dollar amounts under these columns are the result of calculation at
the 5% and 10% rates set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if
any, in the market value of the Corporation's Common Stock.
AGGREGATED OPTION EXERCISES IN 2000
AND FISCAL YEAR-END OPTION VALUES
The following table summarizes the stock options exercised during 2000 and
the stock options outstanding on December 31, 2000, for the Named Executive
Officers.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 2000 DECEMBER 31, 2000(1)
----------------------------- ----------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ----------------- ---------- ------------- --------------- ------------- --------------
Thomas B. Clark ......... 0 $ 0.00 31,750 16,750 $1,875 $15,000
Kevin D. Bower .......... 0 0.00 10,834 10,625 364 10,000
Angela K. Knowlton ...... 0 0.00 3,125 7,875 0 7,500
Jerry T. McDowell ....... 0 0.00 26,502 11,250 3,403 10,000
J. David Tolbert ........ 0 0.00 7,875 1,000 250 7,500
- ----------
(1) Before taxes. The dollar value reported is based on the difference
between the exercise price of the option outstanding and the market price
of Alltrista Common Stock at the close of trading on December 31, 2000.
The closing market price on that date was $13.50 per share.
29
DIRECTORS' COMPENSATION
Directors who are not employees of the Corporation receive as compensation
an annual retainer of $12,000 and an annual fee of $1,500 if he or she serves
as chairman of a Board committee. In addition, non-employee directors will be
paid a fee of $750 for attendance at each Board meeting, $600 per day for
attendance at one or more committee meetings, $625 for participation in a
telephonic Board meeting, and $500 for participation in a telephonic committee
meeting. If a non-employee director were to serve as Chairman of the Board, he
would receive as compensation an annual retainer of $36,000, plus meeting fees
at the same rate as those for other non-employee directors. Directors who are
also employees of the Corporation receive no additional compensation for their
service on the Board or on any Board committee.
Pursuant to the Alltrista Corporation 1997 Deferred Compensation Plan for
Directors, non-employee directors may elect to receive in cash all or any part
of the director compensation payable, with the remaining portion deferred under
various deferred compensation options selected by the participant. The
participant may elect to have the deferrals paid at a future date, either in a
lump sum or in up to fifteen substantially equal annual installments. The
Corporation's 1998 Plan authorizes the grant of an option to acquire 1,000
shares of the Corporation's Common Stock on April 30 of each year to each
non-employee director. Ms. Popwell and Messrs. Huemme, Molen, Rooney, Swift and
Wood each were granted an option to acquire 1,000 shares of common stock in
2000. The exercise price for each share of the Corporation's Common Stock
subject to the option granted to such director will be equal to the fair market
value of a share of the Corporation's Common Stock as of the date such option
is granted. The option will be a non-qualified option and will expire ten years
after the date it is granted. The option will become exercisable at the earlier
of one year subsequent to the date the option was granted or upon the
optionee's death, disability or attainment by the optionee of age 70.
OTHER MATTERS
The Corporation knows of no other business to be acted upon at the Special
Meeting. However, if any business is properly presented at the Special Meeting,
it is intended that the persons named in the enclosed Proxy, or their
substitutes, will vote such Proxy in accordance with their judgment on such
matters.
SHAREHOLDERS PROPOSALS
Proposals of shareholders intended to be presented at the 2002 Annual
Meeting and included in the Corporation's 2002 Proxy Statement must be in
writing and received by the Company Secretary at the Corporation's principal
executive offices, 555 Theodore Fremd Avenue, Suite B302, Rye, New York 10580,
by December 3, 2001. In order to be considered timely under the Corporation's
Bylaws, as amended, shareholder proposals and shareholder nominations of
candidates for election to the Board of Directors intended to be presented at
the 2002 Annual Meeting, but not included in the Corporation's 2002 Proxy
Statement, must be in writing and received by the Company Secretary at the
address set forth in the immediately preceding sentence not later than March 3,
2002 and not earlier than February 1, 2002.
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED IF YOU DO NOT PLAN TO ATTEND
THE SPECIAL MEETING, PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY. IN THE
EVENT YOU ARE ABLE TO ATTEND, WE WILL, IF YOU REQUEST, CANCEL THE PROXY.
30
SOLICITATION AND OTHER MATTERS
The cost of soliciting proxies will be paid by the Corporation. In
addition to solicitations by mail, some directors, officers and regular
employees of the Corporation, without extra remuneration, may conduct
solicitations by telephone, facsimile and personal interview. The Corporation
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy material to the
beneficial owners of Common Stock. In addition, the Corporation has engaged
Mackenzie Partners, Inc. to assist it in the solicitation of proxies, for a fee
of approximately $6,000, plus out-of-pocket expenses. As of the date of this
Proxy Statement, the Board of the Corporation has no knowledge of any matters
to be presented for consideration at the meeting other than those referred to
above. However, persons named in the accompanying form of proxy will have the
authority to vote such proxy as to any other matters which do properly come
before the meeting and as to matters incidental to the conduct of the meeting,
according to their discretion.
By Order of the Board of Directors
Ian G.H. Ashken
Company Secretary
November 26, 2001
Rye, New York
31
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
OF
ALLTRISTA CORPORATION
AND
ALLTRISTA REINCORPORATION MERGERSUB, INC.
AGREEMENT AND PLAN OF MERGER (the "Merger Agreement"), dated as of ,
2001, between Alltrista Reincorporation MergerSub, Inc. ("Alltrista Delaware"),
and Alltrista Corporation, an Indiana corporation ("Alltrista Indiana"),
pursuant to Section 253 of the Delaware General Corporation Law (the "DGCL")
and Section 23-1-40-7 of the Indiana Business Corporation Law (the "IBCL").
W I T N E S S E T H:
WHEREAS, Alltrista Delaware is a corporation duly organized and in good
standing under the laws of the State of Delaware;
WHEREAS, Alltrista Indiana is a corporation duly organized and in good
standing under the laws of the State of Indiana;
WHEREAS, the Board of Directors of Alltrista Delaware and the Board of
Directors of Alltrista Indiana have determined that it is advisable and in the
best interests of each of them that Alltrista Indiana merge with and into
Alltrista Delaware upon the terms and subject to the conditions herein
provided;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, the parties hereto agree as follows:
ARTICLE 1: Merger. Upon the filing of a Certificate of Ownership and
Merger with the Secretary of State of the State of Delaware and the Articles of
Merger with the Secretary of the State of Indiana (the "Effective Time"),
Alltrista Indiana shall be merged (the "Merger") with and into Alltrista
Delaware, and Alltrista Delaware shall be the corporation surviving the Merger
(hereinafter referred to as the "Surviving Corporation").
ARTICLE 2: Directors, Officers and Governing Documents. The directors of
the Surviving Corporation from and after the Effective Time shall be the
directors of Alltrista Indiana immediately prior to the Effective Time. The
officers of the Surviving Corporation immediately after the Effective Time
shall be the officers of Alltrista Indiana immediately prior to the Effective
Time. These officers and directors shall hold office in accordance with the
Certificate of Incorporation and Bylaws of the Surviving Corporation. At the
Effective Time the Certificate of Incorporation of the Surviving Corporation
shall be amended and restated as attached hereto as Annex A. The bylaws of the
Surviving Corporation as in force and effect at the effective time and date of
the Merger will be the bylaws of said Surviving Corporation and will continue
in full force and effect until changed, altered, or amended as therein provided
and in the manner prescribed by the provisions of the laws of the State of
Delaware of said Surviving Corporation.
ARTICLE 3: Name. The name of the Surviving Corporation shall be: Alltrista
Corporation.
ARTICLE 4: Effect of Merger on Shares of Stock of Alltrista Indiana. At
the Effective Time, each share of common stock, no par value, of Alltrista
Indiana outstanding immediately prior to the Effective Time shall be converted
into and become one share of common stock, no par value, of the Surviving
Corporation. At the Effective Time, each issued and outstanding share of stock
of Alltrista Delaware shall be canceled, without the payment of consideration
therefor.
ARTICLE 5: Effect of the Merger. The Merger shall have the effect set
forth in Section 259 of the DGCL.
A-1
ARTICLE 6: Approval. The Plan of Merger herein made and approved shall be
submitted to the shareholders of Alltrista Indiana for their approval or
rejection in the manner prescribed by the provisions of the IBCL and shall be
approved in the manner prescribed by the GCL.
ARTICLE 7: Authorization. The Board of Directors and the proper officers
of Alltrista Indiana and of the Surviving Corporation, respectively, are hereby
authorized, empowered, and directed to do any and all acts and things, and to
make, execute, deliver, file, and/or record any and all instruments, papers,
and documents which shall be or become necessary, proper, or convenient to
carry out or put into effect any of the provisions of this Agreement and Plan
of Merger or of the merger herein provided for.
ARTICLE 8: Further Assurances. From time to time, as and when required by
the Surviving Corporation or by its successors and assigns, there shall be
executed and delivered on behalf of Alltrista Indiana such deeds and other
instruments, and there shall be taken or caused to be taken by the Surviving
Corporation all such further and other actions, as shall be appropriate or
necessary in order to vest, perfect or confirm in the Surviving Corporation the
title to and possession of all property, interests, assets, rights, privileges,
immunities, powers and authority of Alltrista Indiana, and otherwise to carry
out the purposes of this Merger Agreement. The officers and directors of the
Surviving Corporation are fully authorized, on behalf of the Surviving
Corporation or Alltrista Indiana, to take any and all such actions and to
execute and deliver any and all such deeds, documents and other instruments.
[The remainder of this page intentionally left blank.]
A-2
IN WITNESS WHEREOF, the undersigned have executed this Merger Agreement as
of the date first above written.
ALLTRISTA CORPORATION, an Indiana
Corporation
By:
-----------------------------------
Name:
Title:
ALLTRISTA REINCORPORATION
MERGERSUB, a Delaware corporation
By:
-----------------------------------
Name:
Title:
* * * * *
A-3
EXHIBIT B
RESTATED CERTIFICATE OF INCORPORATION
OF
ALLTRISTA CORPORATION
ARTICLE I. NAME OF CORPORATION
The name of the Corporation is Alltrista Corporation, (hereinafter, the
"Corporation"). The Corporation's original Certificate of Incorporation was
filed on December , 2001 under the name Alltrista Reincorporation Sub, Inc.
This Restated Certificate of Incorporation was duly adopted in accordance with
Section 245 of the General Corporation Law of the State of Delaware (the
"GCL").
ARTICLE II. REGISTERED OFFICE REGISTERED AGENT
The address of the registered office of the Corporation in the State of
Delaware is 1013 Centre Road, in the City of Wilmington, County of New Castle.
The name of its registered agent at that address is Corporation Service
Company.
ARTICLE III. PURPOSE; TERM OF EXISTENCE
The purpose of the Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
the State of Delaware as set forth in Title 8 of the GCL.
The period during which the Corporation shall continue is perpetual.
ARTICLE IV. CAPITAL STOCK
SECTION A. NUMBER OF SHARES OF CAPITAL STOCK AND DESIGNATION OF CLASSES.
(1) The amount of total authorized capital stock of this Corporation shall
be [55,000,000] shares, divided as follows: (i) [50,000,000] shares of Common
Stock, without par value (the "Common Stock"), and (ii) 5,000,000 shares of
Preferred Stock, without par value, of which 250,000 shall be designated as
"Series A Junior Participating Preferred Stock".
(2) The Preferred Stock may be issued from time to time as herein provided
in one or more series. The Board of Directors shall have the authority to
determine and state the designations and the relative rights (including, if
any, conversion rights, participation rights, voting rights, dividend rights,
and stated, redemption and liquidation values), ranking preferences,
limitations and restrictions of each such series by the adoption of resolutions
prior to the issuance of each such series authorizing the issuance of such
series. All shares of Preferred Stock of the same series shall be identical
with each other in all respects.
(3) Two hundred fifty thousand (250,000) shares of Preferred Stock shall
be designated as "Series A Junior Participating Preferred Stock" and shall have
the preferences, limitations, and relative voting and other rights as follows:
(A) Dividends and Distributions.
(1) Subject to the prior and superior rights of the holders of any shares
of any series of Preferred Stock ranking prior and superior to the shares
of Series A Junior Participating Preferred Stock with respect to dividends,
the holders of shares of Series A Junior Participating Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the last day of March, June, September and
December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Junior Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $5.00 or
(b) subject to the provision for
B-1
adjustment hereinafter set forth, 100 times the aggregate per share amount
of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all noncash dividends or other distributions other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock, since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share
of Series A Junior Participating Preferred Stock. In the event the
Corporation shall at any time after [ ] (the "Rights Declaration Date")
(a) declare any dividend on Common Stock payable in shares of Common Stock,
(b) subdivide the outstanding Common Stock, or (c) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the
amount to which holders of shares of Series A Junior Participating
Preferred Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(2) The Corporation shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in paragraph (1)
above immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $5.00 per share on the Series A Junior Participating
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(3) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of
Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which event such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Junior Participating Preferred
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of holders
of shares of Series A Junior Participating Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which
record date shall be no more than 30 days prior to the date fixed for the
payment thereof.
(B) Voting Rights. The holders of shares of Series A Junior Participating
Preferred Stock shall have the following voting rights:
(1) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Junior Participating Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
shareholders of the Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date (a) declare any dividend on Common
Stock payable in shares of Common Stock, (b) subdivide the outstanding
Common Stock, or (c) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the number of votes per share to
which holders of shares of Series A Junior Participating Preferred Stock
were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
B-2
(2) Except as otherwise provided herein or by law, the holders of shares
of Series A Junior Participating Preferred Stock and the holders of shares
of Common Stock shall vote together as one class on all matters submitted
to a vote of shareholders of the Corporation.
(3) (a) If at any time dividends on any Series A Junior Participating
Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly period on all
shares of Series A Junior Participating Preferred Stock then outstanding
shall have been declared and paid or set apart for payment. During each
default period, all holders of Preferred Stock (including holders of the
Series A Junior Participating Preferred Stock) with dividends in arrears in
an amount equal to six (6) quarterly dividends thereon, voting as a class,
irrespective of series, shall have the right to elect two (2) directors.
(b) During any default period, such voting right of the holders of
Series A Junior Participating Preferred Stock may be exercised initially
at a special meeting called pursuant to subparagraph (3)(c) of this
Section (B) or at any annual meeting of shareholders, and thereafter at
annual meetings of shareholders, provided that neither such voting right
nor the right of the holders of any other series of Preferred Stock, if
any, to increase, in certain cases, the authorized number of directors
shall be exercised unless the holders of ten percent (10%) in number of
shares of Preferred Stock outstanding shall be present in person or by
proxy. The absence of a quorum of the holders of Common Stock shall not
affect the exercise by the holders of Preferred Stock of such voting
right. At any meeting at which the holders of Preferred Stock shall
exercise such voting right initially during an existing default period,
they shall have the right, voting as a class, to elect directors to fill
such vacancies, if any, in the Board of Directors as may then exist up
to two (2) directors or, if such right is exercised at an annual
meeting, to elect two (2) directors. If the number which may be so
elected at any special meeting does not amount to the required number,
the holders of the Preferred Stock shall have the right to make such
increase in the number of directors as shall be necessary to permit the
election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect directors in
any default period and during the continuance of such period, the number
of directors shall not be increased or decreased except by vote of the
holders of Preferred Stock as herein provided or pursuant to the rights
of any equity securities ranking senior to or pari passu with the Series
A Junior Participating Preferred Stock.
(c) Unless the holders of Preferred Stock shall, during an existing
default period, have previously exercised their right to elect
directors, the Board of Directors may order, or any shareholder or
shareholders owning in the aggregate not less than ten percent (10%) of
the total number of shares of Preferred Stock outstanding, irrespective
of series, may request, the calling of a special meeting of the holders
of Preferred Stock, which meeting shall thereupon be called by the
President, a Vice President or the Corporate Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which
holders of Preferred Stock are entitled to vote pursuant to this
subparagraph (3)(c) shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to him at his last address as the
same appears on the books of the Corporation. Such meeting shall be
called for a time not earlier than 20 days and not later than 60 days
after such order or request or in default of the calling of such meeting
within 60 days after such order or request, such meeting may be called
on similar notice by any shareholder or shareholders owning in the
aggregate not less than ten percent (10%) of the total number of shares
of Preferred Stock outstanding. Notwithstanding the provisions of this
subparagraph (3)(c), no such special meeting shall be called during the
period within 60 days immediately preceding the date fixed for the next
annual meeting of shareholders.
B-3
(d) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of directors until the holders of
Preferred Stock shall have exercised their right to elect two (2)
directors voting as a class, after the exercise of which right (x) the
directors so elected by the holders of Preferred Stock shall continue in
office until their successors shall have been elected by such holders or
until the expiration of the default period, and (y) any vacancy in the
Board of Directors may, except as provided in subparagraph (3)(b) of
this Section (B), be filled by vote of a majority of the remaining
directors theretofore elected by the holders of the class of stock which
elected the director whose office shall have become vacant. References
in this paragraph (3) to directors elected by the holders of a
particular class of stock shall include directors elected by such
directors to fill vacancies as provided in clause (y) of the foregoing
sentence.
(e) Immediately upon the expiration of a default period, (x) the right
of the holders of Preferred Stock as a class to elect directors shall
cease, (y) the term of any directors elected by the holders of Preferred
Stock as a class shall terminate, and (z) the number of directors shall
be such number as may be provided for in these Amended Articles or the
Bylaws irrespective of any increase made pursuant to the provisions of
subparagraph (3)(b) of this Section (B) (such number being subject,
however, to change thereafter in any manner provided by law or in these
Amended Articles or the Bylaws). Any vacancies in the Board of Directors
effected by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining directors.
(4) Except as set forth herein, holders of Series A Junior Participating
Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any corporate
action.
(C) Certain Restrictions.
(1) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section (A) are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of Series A
Junior Participating Preferred Stock outstanding shall have been paid in
full, the Corporation shall not:
(a) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating
Preferred Stock;
(b) declare or pay dividends on or make any other distributions on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, except dividends paid ratably on the
Series A Junior Participating Preferred Stock and all such parity stock
on which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(c) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Junior Participating Preferred Stock;
(d) purchase or otherwise acquire for consideration any shares of
Series A Junior Participating Preferred Stock, or any shares of stock
ranking on a parity with the Series A Junior Participating Preferred
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of
such shares upon such
B-4
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series of classes.
(2) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (1) of this
Section (C), purchase or otherwise acquire such shares at such time and in
such manner.
(D) Reacquired Shares. Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
(E) Liquidation, Dissolution or Winding Up.
(1) Upon any liquidation (voluntary or otherwise), dissolution or winding
up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Series A Junior
Participating Preferred Stock shall have received $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series A
Liquidation Preference"). Following the payment of the full amount of the
Series A Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (a) the Series A Liquidation Preference by
(b) 100 (as appropriately adjusted as set forth in subparagraph (3) below
to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause
(c), the "Adjustment Number"). Following the payment of the full amount of
the Series A Liquidation Preference and Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred Stock and
Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed
in the ratio of the Adjustment Number to 1 with respect to such Preferred
Stock and Common Stock, on a per share basis, respectively.
(2) In the event, however, that there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series A Junior Participating Preferred
Stock, then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common
Stock.
(3) In the event the Corporation shall at any time after the Rights
Declaration Date (a) declare any dividend on Common Stock payable in shares
of Common Stock, (b) subdivide the outstanding Common Stock, or (c) combine
the outstanding Common Stock into a smaller number of shares, then in each
such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(F) Consolidation Merger, etc. In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case the shares of Series A
B-5
Junior Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (a) declare any dividend on Common Stock payable in shares of
Common Stock, (b) subdivide the outstanding Common Stock, or (c) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Junior Participating Preferred Stock
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(G) Redemption. The shares of Series A Junior Participating Preferred
Stock shall be redeemable at a price equal to the product of (a) the current
market price of the Common Stock and (b) the Adjustment Number.
(H) Ranking. The Series A Junior Participating Stock shall rank junior to
all other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
(I) Amendment. These Amended Articles shall not be amended in any manner
which would materially alter or change the powers, preferences or special
rights of the Series A Junior Participating Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of a majority or
more of the outstanding shares of Series A Junior Participating Preferred
Stock, voting separately as a class.
(J) Fractional Shares. Series A Junior Participating Preferred Stock may
be issued in fractions of a share which shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Junior Participating Preferred Stock.
SECTION B. ISSUE AND CONSIDERATION FOR CAPITAL STOCK
(1) The Board of Directors shall have the authority to authorize and
direct the issuance by the Corporation of shares of Common Stock and Preferred
Stock at such times, in such amounts, to such persons, for such consideration,
and upon such terms and conditions as it may determine, subject to the
restrictions, limitations, conditions and requirements imposed by the
provisions of this Restated Certificate of Incorporation, by the provisions of
the resolutions authorizing the issuance of any series of shares of Preferred
Stock adopted by the Board of Directors, or by the provisions of the GCL.
(2) When payment of the consideration for which any share or shares of
stock so authorized to be issued shall have been received by the Corporation,
such share or shares of stock so authorized to be issued shall have been
received by the Corporation, such share or shares shall be declared and be
taken to be fully paid and not liable to any further call or assessment, and
the holder or holders thereof shall not be liable for any further payments
thereon.
SECTION C. NO PREEMPTIVE RIGHTS
The shareholders have no preemptive rights to subscribe to or purchase any
additional issues of shares of capital stock of the Corporation purchased or
acquired by the Corporation and not canceled but held as treasury stock.
SECTION D. AMENDMENT
Notwithstanding anything contained in this Restated Certificate of
Incorporation to the contrary, the affirmative vote of at least three-fourths
of the combined voting power of the outstanding shares entitled to vote
generally in the election of directors, voting together as a single class,
shall be required to alter amend or adopt any provision inconsistent with the
first sentence of Section A, paragraph 2, of this Article IV.
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ARTICLE V. VOTING
SECTION A. COMMON STOCK
Each owner of record (as of the record date fixed by the By Laws or the
Board of Directors for any such determination of shareholders) of shares of
Common Stock shall have one (1) vote per share of Common Stock standing in his,
her or its name on the books of the Corporation with respect to each matter to
be voted on, including the election of directors and on matters referred to
shareholders.
SECTION B. PREFERRED STOCK
Subject to the requirements of the GCL or applicable regulations of any
exchange on which the Corporation's capital stock may be listed, holders of
Preferred Stock shall have such voting rights as may be determined and
designated by the Board of Directors in accordance with Article IV hereof.
SECTION C. NO CUMULATIVE VOTING
No holders of shares of Common Stock shall have any right to cumulative
voting.
ARTICLE VI. DIRECTORS
SECTION A. NUMBER AND TERM
The maximum number of directors shall be nine and the minimum number shall
be two. The exact number may from time to time be specified by the Bylaws of
the Corporation at not less than two nor more than nine. If the number of
directors is not specified by the Bylaws, the number shall be six. Subject to
the rights, if any, of the holders of shares of any class or series of
Preferred Stock then outstanding to elect directors under specified
circumstances as may be required by the GCL or applicable regulations of any
exchange on which the Corporation's capital stock may be listed, the directors
shall be classified, with respect to the time for which they severally hold
office, into three (3) classes, as nearly equal in number as possible, as shall
be specified by the Bylaws, one (1) class to be originally elected for a term
expiring at the Annual Meeting of Shareholders to be held in 2002, another
class to be originally elected for a term expiring at the Annual Meeting of
Shareholders to be held in 2003, and another class to be originally elected for
a term expiring at the Annual Meeting of Shareholders to be held in 2004, with
each director to hold office until his successor is elected and qualified. At
each Annual Meeting of Shareholders of the Corporation, the successor of each
director whose term expires at that Annual Meeting shall be elected to hold
office for a term expiring at the Annual Meeting of Shareholders held in the
third year following the year of his election, or until his successor is
elected and qualified.
SECTION B. QUALIFICATIONS
Directors need not be shareholders of the Corporation. A majority of the
directors at any time shall be citizens of the United States.
SECTION C. VACANCIES
Subject to the rights, if any, of the holders of shares of any class or
series of Preferred Stock then outstanding to elect directors under specified
circumstances as may be required by the GCL or applicable regulations of any
exchange on which the Corporation's capital stock may be listed, newly created
directorships resulting from any increase in the number of directors and any
vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled by the affirmative
vote of a majority of the remaining directors then in office, even though less
than a quorum of the Board of Directors. Any director elected in accordance
with the preceding sentence shall hold office for the remainder of the full
director's successor shall have been elected and qualified. No decrease in the
number of directors constituting the Board of Directors shall shorten the term
of any incumbent director.
SECTION D. REMOVAL
Subject to the rights, if any, of the holders of any class or series of
Preferred Stock then outstanding to elect directors under specified
circumstances as may be required by the GCL or applicable regulations of any
exchange on which the Corporation's capital stock may be listed, any director
may be removed
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from office, but only for cause and only by the affirmative vote of the holders
of at least three-fourths of the combined voting power of the outstanding
shares of stock entitled to vote generally in the election of directors, voting
together as a single class.
SECTION E. AMENDMENT
Notwithstanding anything contained in this Restated Certificate to the
contrary, the affirmative vote of the holders of at least three-fourths of the
combined voting power of the outstanding shares of stock entitled to vote
generally in the election of directors, voting together as a single class,
shall be required to alter, amend or adopt any provision inconsistent with or
to repeal this Article VI.
SECTION F. BYLAWS.
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to make, alter, amend, change,
add to or repeal the Bylaws of the Corporation.
SECTION G. EXCULPATION OF LIABILITY.
No director shall be personally liable to the Corporation or any of its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) pursuant to Section 174 of the GCL, or (iv) for any transaction from
which the director derived an improper personal benefit. Any repeal or
modification of this Article VI by the stockholders of the Corporation shall
not adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification with respect to acts or
omissions occurring prior to such repeal or modification.
ARTICLE VII. PROVISIONS FOR REGULATIONS OF BUSINESS AND CONDUCT OF AFFAIRS OF
THE CORPORATION
SECTION A. MEETINGS
Meetings of the stockholders and the directors of this Corporation may be
held either within or without the State of Delaware, and at such place as the
Bylaws shall provide or, in default of such provisions, at such place as the
Board of Directors shall designate.
SECTION B. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Indemnification of directors, officers and employees shall be as follows:
(1) The Corporation shall indemnify each person who is or was a director,
officer or employee of the Corporation, or of any other corporation,
partnership, joint venture, trust or other enterprise which he is serving or
served in any capacity at the request of the Corporation, against any and all
liability and reasonable expense that may be incurred by him in connection with
or resulting from any claim, actions, suit or proceeding (whether actual or
threatened, brought by or in the right of the corporation of such other
corporation, partnership, joint venture, trust or other enterprise, or
otherwise, civil, criminal, administrative, investigative, or in connection
with an appeal relating thereto), in which he may become involved, as a party
or otherwise, by reason of his being or having been a director, officer or
employee of the Corporation or of such other corporation, partnership, joint
venture, trust or other enterprise or by reason of any past or future action
taken or not taken in his capacity as such director, officer or employee,
whether or not he continues to be such at the time such liability or expense is
incurred, provided that a determination is made by the Corporation in
accordance with Delaware law that such person acted in good faith and in a
manner he reasonably believed to be in the best interests of the Corporation or
at least not opposed to the best interests of such other corporation,
partnership, joint venture, trust or other enterprise, as the case may be, and,
in addition, in any criminal action or proceedings, had reasonable cause to
believe his conduct was lawful or no reasonable cause to believe that his
conduct was unlawful. The termination of a proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent is
not, of itself, determinative that the person did not meet the standard of
conduct described in the previous sentence. Notwithstanding the foregoing,
there shall be no indemnification (a) as to amounts paid or payable to the
Corporation or such other corporation, partnership, joint
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venture, trust or other enterprise, as the case may be, for or based upon the
director, officer or employee having gained in fact any personal profit or
advantage to which he was not legally entitled; (b) as to amounts paid or
payable to the Corporation for an accounting of profits in fact made from the
purchase or sale of securities of the corporation within the meaning of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any state statutory law; or (c) with respect to matters as to
which indemnification would be in contravention of the laws of the State of
Delaware or of the United States of America whether as a matter of public
policy or pursuant to statutory provisions.
(2) Any such director, officer or employee who has been wholly successful,
on the merits or otherwise, with respect to any claim, action, suit or
proceeding of the character described herein shall be entitled to
indemnification as of right, except to the extent he has otherwise been
indemnified. Except as provided in the preceding sentence, any indemnification
hereunder shall be granted by the Corporation, but only if (a) the Board of
Directors, acting by a quorum consisting of directors who are not partners to
or who have been wholly successful with respect to such claim, action, suit or
proceeding, shall find that the director, officer or employee has met the
applicable standards of conduct set forth in paragraph 1 of this Section B of
Article VII; or (b) outside legal counsel engaged by the Corporation (who may
be regular counsel of the Corporation) shall deliver to the corporation its
written opinion that such director, officer or employee has met such applicable
standards of conduct; or (c) a court of competent jurisdiction has determined
that such director, officer or employee has met such standards, in an action
brought either by the Corporation, or by the director, officer or employee
seeking indemnification, applying de novo such applicable standards of conduct.
The termination of any claim, action, suit or proceeding, civil or criminal, by
judgment, settlement (whether with or without court approval) or conviction or
upon a plea of guilty or of nolo contendere, or its equivalent, shall not
create a presumption that a director, officer or employee did not meet the
applicable standards of conduct set forth in paragraph 1 of this Section B of
Article VII.
(3) As used in this Section B of Article VII, the term "liability" shall
mean amounts paid in settlement or in satisfaction of judgments of fines or
penalties, and the term "expense" shall include, but not be limited to,
attorneys' fees and disbursements, incurred in connection with the claim,
action, suit or proceeding. The Corporation may advance expenses to, or where
appropriate may at its option and expense undertake the defense of, any such
director, officer or employee upon receipt of an undertaking by or on behalf of
such person to repay such expenses if it should ultimately be determined that
the person is not entitled to indemnification under this Section B of Article
VII.
(4) The provisions of this Section B of Article VII shall be applicable to
claims, actions, suits or proceedings made or commenced after the adoption
hereof, whether arising from acts or omissions to act occurring before or after
the adoption hereof. If several claims, issues or matters of action are
involved, any such director, officer or employee may be entitled to
indemnification as to some matters even though he is not so entitled as to
others. The rights of indemnification provided hereunder shall be in addition
to any rights to which any director, officer or employee concerned may
otherwise be entitled by contract or as a matter of law, and shall inure to the
benefit of the heirs, executors and administrators of any such director,
officer or employee. Any repeal or modification of the provisions of this
Section B of Article VII by the stockholders of the Corporation shall not
adversely affect any rights to indemnification and advancement of expenses
existing pursuant to this Section B of Article VII with respect to any acts or
omissions occurring prior to such repeal or modification.
ARTICLE VIII. FAIR PRICE, FORM OF CONSIDERATION AND PROCEDURAL SAFEGUARDS FOR
CERTAIN RELATED PARTY BUSINESS COMBINATIONS
SECTION A. HIGHER VOTE REQUIRED FOR CERTAIN RELATED PARTY BUSINESS
COMBINATIONS
(1) In addition to any affirmative vote required by law or under these
Amended Articles, and except as otherwise expressly provided in Section B of
this Article VIII, any Related Party Business Combination (as hereinafter
defined) shall require the affirmative vote of the holders of at least
three-fourths of the Voting Stock (as hereinafter defined), voting together as
a single class. For purposes of this Article VIII, each share of Voting Stock
shall have the number of votes granted to it pursuant to this Restated
Certificate of Incorporation.
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(2) Such affirmative votes shall be required notwithstanding the fact that
no vote may be required, or that a lesser percentage or separate class vote may
be specified, by law or in any agreement with any national securities exchange
or otherwise.
SECTION B. WHEN HIGHER VOTE NOT REQUIRED
The provisions of Section A of this Article VIII shall not be applicable
to any particular Related Party Business Combination, and such Related Party
Business Combination shall require only such affirmative vote as is required by
law or any other provision of this Restated Certificate of Incorporation or the
Bylaws of the Corporation, or any agreement with any national securities
exchange, if all of the conditions specified in either of the following
subparagraphs 1 or 2 are met:
(1) Approval of Disinterested Directors. The Related Party Business
Combination shall have been expressly approved by a majority (whether such
approval is made prior to or subsequent to the acquisition of beneficial
ownership of the Voting Stock that caused the Related Party, as hereinafter
defined, to become a Related Party) of the Disinterested Directors (as
hereinafter defined); or
(2) Fair Price, Form of Consideration and Procedural Requirements. All of
the following conditions shall have been met:
(A) The aggregate amount of the cash and the Fair Market Value (as
hereinafter defined) as of the date of the consummation of the Related
Party Business Combination (the "Consummation Date") of consideration other
than cash to be received per share by holders of shares of any class or
series of Capital Stock (as hereinafter defined) in such Related Party
Business Combination shall be at least equal to the highest of the
following (it being intended that the requirements of this subparagraph (2)
(A) shall be required to be met with respect to every class or series of
outstanding Capital Stock, whether or not the Related Party has previously
acquired beneficial ownership of any shares of a particular class or series
of Capital Stock):
(1) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid
by or on behalf of the Related Party for any shares of such class or
series of Capital Stock acquired by or on behalf of the Related Party
(a) within the two-year period immediately prior to the first public
announcement of the proposal of the Related Party Business Combination
(the "Announcement Date") or (b) in the transaction in which it became a
Related Party, whichever is higher;
(2) the Fair Market Value per share of such class or series of Capital
Stock on the Announcement Date or on the date on which the Related Party
became a Related Party (the "Determination Date"), whichever is higher;
(3) (if applicable) the price per share equal to the Fair Market Value
per share of such class or series of Capital Stock determined pursuant
to the immediately preceding clause (2), multiplied by the ratio
calculated by dividing (a) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid
by or on behalf of the Related Party for any share of such class or
series of Capital Stock in connection with the acquisition by the
Related Party of beneficial ownership of shares of such class or series
of Capital Stock within the two-year period immediately prior to the
Announcement Date by (b) the Fair Market Value per share of such class
or series of Capital Stock on the first day in such two-year period on
which Related Party acquired beneficial ownership of any share of such
class or series of Capital Stock;
(4) in the case of Common Stock, the Corporation's net income per
share of Common Stock for the four full consecutive fiscal quarters
immediately preceding the Announcement Date, multiplied by the higher of
the then price/earnings multiple (if any) of such Related Party or the
highest price/earnings multiple of the Corporation within the two-year
period immediately preceding the Announcement Date (such price/earnings
multiples being determined as customarily computed and reported in the
financial community); or
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(5) in the case of any class or series of Capital Stock other than
Common Stock, the highest preferential amount per share to which the
holders of shares of such class or series of Capital Stock are entitled
in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation.
All per share prices shall be adjusted for any intervening stock splits,
stock dividends and reverse stock splits.
(B) The consideration to be received by holders of a particular class or
series of Capital Stock shall be in cash or in the same form as the Related
Party has previously paid for shares of such particular stock. If the
Related Party has paid for shares of any class or series of Capital Stock
with varying forms of consideration, the form of consideration for such
particular stock shall be either cash or the form used to acquire the
largest number of shares of such particular stock previously acquired by
it.
(C) After such Related Party has become a Related Party and prior to the
Consummation Date:
(1) there shall have been (a) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary to reflect any
subdivision of Common Stock), except as approved by a majority of the
Disinterested Directors, and (b) an increase in such annual rate of
dividends as necessary to reflect any reclassification (including any
reverse stock split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of outstanding
shares of the Common Stock, unless the failure so to increase such
annual rate is approved by a majority of the Disinterested Directors;
(2) there shall have been no failure to declare and pay at the regular
date therefor any full quarterly dividends (whether or not cumulative)
payable in accordance with the terms of any other outstanding class or
series of Capital Stock, except as approved by a majority of the
Disinterested Directors; and
(3) such Related Party shall have not become the beneficial owner of
any additional shares of Capital Stock, except as part of the
transaction which results in such Related Party becoming a Related
Party.
(D) After such Related Party has become a Related Party, such Related
Party shall not have received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances, guaranties,
pledges or other financial assistance or any tax credits or other tax
advantages provided by the Corporation, whether in anticipation of or in
connection with such Related Party Business Combination, or otherwise.
(E) A proxy or information statement describing the proposed Related
Party Business Combination and complying with the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (or any subsequent provisions replacing such Act, rules or
regulations) shall be mailed to public stockholders of the Corporation at
least 30 calendar days prior to the consummation of such Related Party
Business Combination (whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent provisions). The
proxy or information statement shall contain on the first page thereof, in
a prominent place, any statement as to the advisability (or inadvisability)
of the Related Party Business Combination that the Disinterested Directors,
or any of them, may choose to make and, if deemed advisable by a majority
of the Disinterested Directors, the opinion of an investment banking firm
selected by a majority of the Disinterested Directors as to the fairness
(or not) of the terms of the Related Party Business Combination from a
financial point of view to the holders of the shares of any class or series
of Capital Stock other than the Related Party and its Affiliates or
Associates (as hereinafter defined), such investment banking firm to be
paid a reasonable fee for its services by this Corporation.
(F) Such Related Party shall not have made any major change in the
Corporation's business or equity capital structure without the approval of
a majority of the Disinterested Directors.
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SECTION C. DEFINITIONS FOR ARTICLE VIII
For the purposes of this Article VIII:
(1) The term "Related Party Business Combination" shall mean any
transaction referred to in one or more of the following:
(A) any merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with (1) any Related Party or (2) any other
corporation (whether or not itself a Related Party) which is, or after such
merger or consolidation would be, an Affiliate or Associate (as hereinafter
defined) of any Related Party; or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Related Party or any Affiliate or Associate of any Related Party of any
assets of the Corporation or any subsidiary having an aggregate Fair Market
Value of Ten Million Dollars ($10,000,000) or more; or
(C) the issuance or transfer by the Corporation or any Subsidiary (in one
transaction or a series of transactions) of any securities having an
aggregate Fair Market Value of Ten Million Dollars ($10,000,000) or more of
the Corporation or any subsidiary to any Related Party or any Affiliate or
Associate of any Related Party in exchange for cash, securities or other
property (or combination thereof); or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of any Related
Party or any Affiliate or Associate of any Related Party; or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving a Related
Party or any Affiliate or Associate of any Related Party) which has the
effect, directly or indirectly, of increasing the proportionate share of
the outstanding shares of any class of equity or convertible securities of
the Corporation or any Subsidiary which is directly or indirectly owned by
any Related Party or any Affiliate or Associate of any Related Party; or
(F) any agreement, contract or other arrangement providing for any one or
more of the actions specified in the foregoing clauses (A) through (E).
(2) The term "Related Party" shall mean any person (other than the
Corporation or any Subsidiary, and other than any profit-sharing, employee
stock ownership or other employee benefit plan of the Corporation or any
Subsidiary or any trustee of or fiduciary with respect to any such plan when
acting in such capacity) who or which:
(A) is the beneficial owner (as hereinafter defined) of more than 10
percent of the voting power of the outstanding Voting Stock; or
(B) is an Affiliate or Associate of the Corporation and at any time
within the two-year period immediately prior to the date in question was
the beneficial owner, directly or indirectly, of 10 percent or more of the
voting power of the then outstanding Voting Stock; or
(C) is an assignee of or has otherwise succeeded to any shares of Voting
Stock which were at any time within the two-year period immediately prior
to the date in question beneficially owned by any Related Party, if such
assignment or succession shall have occurred in the course of a transaction
or series of transactions not involving a public offering within the
meaning of the Securities Act of 1933, as amended.
For purposes of determining whether a person is a Related Party, the
number of shares of Voting Stock deemed to be outstanding shall include shares
deemed owned through application of Section C (4), hereof, but shall not
include any other shares of Voting Stock which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of conversion rights,
warrants or options, or otherwise.
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(3) The term "person" shall mean any individual, firm, partnership, trust,
corporation or other entity and shall include any group comprised of any person
and any other person with whom such person or any Affiliate or Associate of
such person has any agreement, arrangement or understanding, directly or
indirectly, for the purpose of acquiring, holding, voting or disposing of
Voting Stock.
(4) A person shall be a "beneficial owner" of any Voting Stock:
(A) which such person or any of its Affiliates or Associates beneficially
owns, directly or indirectly; or
(B) which such person or any of its Affiliates or Associates has (1) the
right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement,
understanding or relationship or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise; or (2) the right to
vote pursuant to any agreement, arrangement, understanding or relationship;
or (3) the right to invest, including the power to dispose or to direct the
disposition of, pursuant to any agreement, arrangement, understanding or
relationship; or
(C) which is beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates has
any agreement, arrangement, understanding or relationship for the purpose
of acquiring, holding, voting or disposing of any shares of Voting Stock.
(5) The term "Affiliate," used to indicate a relationship with a specified
person, shall mean a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the person specified.
(6) The term "Associate," used to indicate a relationship with a specified
person, shall mean:
(A) any corporation or organization (other than the Corporation or a
Subsidiary) of which such person is an officer or partner or is, directly
or indirectly, the beneficial owner of 10 percent or more of any class of
equity securities; or
(B) any trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in a
similar fiduciary capacity; or
(C) any relative or spouse of such person, or any relative of such
spouse, who has the same home as such person; or
(D) any person who is a director or officer of such specified person or
any of its parents or subsidiaries (other than the Corporation or a
Subsidiary).
(7) The term "Subsidiary" shall mean any corporation of which a majority
of any class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition of
Related Party set forth in Section C (2), hereof, the term "Subsidiary" shall
mean only a corporation of which a majority of each class of equity security is
owned, directly or indirectly, by the Corporation.
(8) The term "Disinterested Director" shall mean:
(A) any member of the Board of Directors of the Corporation who is
unaffiliated with the Related Party and was a member of the Board of
Directors prior to the time that the Related Party became a Related Party;
or
(B) any successor of a Disinterested Director who is unaffiliated with
the Related Party and is recommended to succeed a Disinterested Director by
a majority of Disinterested Directors then on the Board of Directors.
(9) The term "Fair Market Value" shall mean:
(A) in the case of stock, the highest closing sale price during the
30-calendar-day period immediately preceding the date in question of a
share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the Composite
Tape, on the
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New York Stock Exchange, Inc., or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered
under the Securities Exchange Act of 1934, as amended, on which such stock
is listed or, if such stock is not listed on any such exchange, the highest
closing bid quotation with respect to a share of such stock during the
30-calendar-day period preceding the date in question on the National
Association of Securities Dealers, Inc., Automated Quotations System or any
system then in use, or if no such quotation is available, the Fair Market
Value on the date in question of a share of such stock as determined by a
majority of the Disinterested Directors in good faith; and
(B) in the case of property other than cash or stock, the Fair Market
Value of such property on the date in question as determined by a majority
of the Disinterested Directors in good faith.
(10) The term "Capital Stock" shall mean all Capital Stock of the
Corporation authorized to be issued from time to time under Article V of these
Amended Articles, and the term "Voting Stock" shall mean the then outstanding
shares of Capital Stock of the Corporation entitled to vote generally in the
election of directors.
(11) In the event of any Related Party Business Combination in which the
Corporation survives, the phrase "other consideration to be received" as used
in Sections B (2) (A) and B (2) (B) of this Article VIII shall include the
shares of Common Stock and/or the shares of any other class or series of
Capital Stock retained by the holders of such shares.
SECTION D. DETERMINATION BY THE DISINTERESTED DIRECTORS
A majority of the Disinterested Directors or, if there should be no
Disinterested Directors, a majority of the directors, shall have the power and
duty to determine for the purposes of this Article VIII, on the basis of
information known to them after reasonable inquiry:
(1) Whether a person is a Related Party;
(2) The number of shares of Voting Stock beneficially owned by any person;
(3) Whether a person is an Affiliate or Associate of another;
(4) Whether the assets which are the subject of any Related Party Business
Combination have, or the consideration to be received for the issuance or
transfer of securities by the Corporation or any Subsidiary in any Related
Party Business Combination has, an aggregate Fair Market Value of Ten Million
Dollars ($10,000,000) or more; and
(5) Such other matters with respect to which a determination is required
under this Article VIII.
A majority of the Disinterested Directors or, if there should be no
Disinterested Directors, a majority of the directors shall have the further
power to interpret all of the terms and provisions of this Article VIII.
SECTION E. EFFECT ON FIDUCIARY OBLIGATIONS
(1) Nothing contained in this Article VIII shall be construed to relieve
any Related Party from any fiduciary obligation imposed by law.
(2) The fact that any Related Party Business Combination complies with the
provisions of Section B. of this Article VIII shall not be construed to impose
any fiduciary duty, obligation or responsibility on the Board of Directors, or
any member thereof, to approve such Related Party Business Combination or
recommend its adoption or approval to the stockholders of the Corporation, nor
shall such compliance limit, prohibit or otherwise restrict in any manner the
Board of Directors, or any member thereof, with respect to evaluations of or
actions and responses taken with respect to such Related Party Business
Combination.
SECTION F. AMENDMENT
Notwithstanding any other provision of law, this Restated Certificate of
Incorporation or the Bylaws of the Corporation, and notwithstanding the fact
that a lesser vote may be specified by law, this Restated
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Certificate of Incorporation or the Bylaws of the Corporation, and in addition
to any affirmative vote of holders of any class or series of Capital Stock of
the Corporation then outstanding which is required by law or by or pursuant to
this Restated Certificate of Incorporation, the affirmative vote of the holders
of at least three-fourths of the combined voting power of the shares of the
outstanding Voting Stock, voting together as a single class, shall be required
to amend or repeal, or adopt any provisions inconsistent with, this Article
VIII; provided, however, that this Section F. shall not apply to, and such
three-fourths vote shall not be required for, any amendment, repeal or adoption
unanimously recommended by the Board of Directors if all such directors are
persons who would be eligible to serve as Disinterested Directors within the
meaning of this Article VIII.
IN WITNESS WHEREOF, Alltrista Corporation has caused this Restated
Certificate of Incorporation to be duly executed by its duly authorized officer
this day of 2001.
---------------------
Ian G.H. Ashken
Secretary
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EXHIBIT C
BYLAWS
OF
ALLTRISTA CORPORATION
Article One
Capital Stock
Section A. Classes of Stock. The capital stock of the corporation shall
consist of shares of such kinds and classes, with such designations and such
relative rights, preferences, qualifications, limitations and restrictions,
including voting rights, and for such consideration as shall be stated in or
determined in accordance with the Restated Certificate of Incorporation and any
amendment or amendments thereof, or the Delaware General Corporation Law (the
"DGCL"). Consistent with the DGCL, capital stock of the corporation owned by
the corporation may be referred to and accounted for as treasury stock.
Section B. Certificates for Shares. All share certificates shall be
consecutively numbered as issued and shall be signed by the president or a vice
president and the corporate secretary or any assistant secretary of the
corporation.
Section C. Transfer of Shares. The shares of the capital stock of the
corporation shall be transferred only on the books of the corporation by the
holder thereof, or by his attorney, upon the surrender and cancellation of the
stock certificate, whereupon a new certificate shall be issued to the
transferee. The transfer and assignment of such shares of stock shall be
subject to the laws of the State of Delaware. The board of directors shall have
the right to appoint and employ one or more stock registrars and/or transfer
agents in the State of Delaware or in any other state.
Article Two
Stockholders
Section A. Annual Meetings. The regular annual meeting of the stockholders
of the corporation shall be held on the fourth Wednesday in April of each year,
or on such other date within a reasonable interval after the close of the
corporation's last fiscal year as may be designated from time to time by the
board of directors, for the election of the directors of the corporation, and
for the transaction of such other business as is authorized or required to be
transacted by the stockholders.
Section B. Special Meetings. Special meetings of the stockholders may be
called by the president or by the board of directors or as otherwise may be
required by law.
Section C. Time and Place of Meetings. All meetings of the stockholders
shall be held at the principal office of the corporation or at such other place
within or without the State of Delaware and at such time as may be designated
from time to time by the board of directors.
Section D. Notice of Business. No business may be transacted at an Annual
Meeting of Stockholders, other than business that is either (a) specified in
the notice of meeting (or any supplement thereto) given by or at the direction
of the board of directors (or any duly authorized committee thereof), (b)
otherwise properly brought before the Annual Meeting by or at the direction of
the board of directors (or any duly authorized committee thereof) or (c)
otherwise properly brought before the Annual Meeting by any stockholder of the
corporation (i) who is a stockholder of record on the date of the giving of the
notice provided for in this Section D of this Article Two and on the record
date for the determination of stockholders entitled to vote at such annual
meeting and (ii) who complied with the notice procedures set forth in this
Section D of this Article Two.
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In addition to any other applicable requirements, for business to be
properly brought before an Annual Meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the secretary
of the corporation.
To be timely, a stockholder's notice to the secretary must be delivered to
or mailed and received at the principal executive offices of the corporation
not less than ninety (90) days nor more than one hundred and twenty (120) days
prior to the anniversary date of the immediately preceding Annual Meeting of
stockholders; provided, however, that in the event that the Annual Meeting is
called for a date that is not within thirty (30) days before or after such
anniversary date, notice by the stockholder in order to be timely must be so
received not later than the close of business on the tenth (10th) day following
the day on which such notice of the date of the Annual Meeting was made,
whichever first occurs. 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.
To be in proper written form, a stockholder's notice to the secretary must
set forth as to each matter such stockholder proposes to bring before the
Annual Meeting (i) a brief description of the business desired to be brought
before the Annual Meeting and the reasons for conducting such business at the
Annual Meeting, (ii) the name and record address of such stockholder, (iii) the
class or series and number of shares of capital stock of the corporation which
are owned beneficially or of record by such stockholders, (iv) a description of
all arrangements or understandings between such stockholder and any other
person or persons (including their names) in connection with the proposal, and
(v) a representation that such stockholder intends to appear in person or by
proxy at the Annual Meeting to bring such business before the meeting.
No business shall be conducted at the Annual Meeting of Stockholders
except business brought before the Annual Meeting in accordance with the
procedure set forth in this Section D of this Article Two, provided, however,
that, once business has been properly brought before the Annual Meeting in
accordance with such procedures, nothing in this Section D of this Article Two
shall be deemed to preclude discussion by any stockholder of any such business.
If the chairman of an Annual Meeting determines that business was not properly
brought before the Annual Meeting in accordance with the foregoing procedures,
the chairman shall declare to the meeting that the business was not properly
brought before the meeting and such business shall not be transacted.
Article Three
Directors
Section A. Number and Terms of Office. The business of the corporation
shall be controlled and managed in accordance with the DGCL by a board of nine
directors, divided into classes as provided in the Restated Certificate of
Incorporation.
Section B. Nomination of Directors. Only persons who are nominated in
accordance with the following procedures shall be eligible for election as
directors of the corporation, except as may be otherwise provided in the
Restated Certificate of Incorporation including the right of holders of
preferred stock of the corporation to nominate and elect a specified number of
directors in certain circumstances. Nominations of persons for election to the
board of directors may be made at any Annual Meeting of Stockholders, or at any
Special Meeting of Stockholders called for the purpose of electing directors,
(a) by or at the direction of the board of directors (or any duly authorized
committee thereof), or (b) by any stockholder of the corporation (i) who is a
stockholder of record on the date of the giving of the notice provided for in
this Section B of this Article Three and on the record date for the
determination of stockholders entitled to vote at such meeting and (ii) who
complies with the notice procedures set forth in this Section B of this Article
Three.
In addition to any other applicable requirements, for a nomination to be
made by a stockholder, such stockholder must have given timely notice thereof
in proper written form to the secretary of the corporation.
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To be timely, a stockholder's notice to the secretary must be delivered to
or mailed and received at the principal executive offices of the corporation
(a) in the case of an Annual Meeting, not less than ninety (90) days nor more
than one hundred and twenty (120) days prior to the anniversary date of the
immediately preceding Annual Meeting of Stockholders; provided, however, that
in the event that the Annual Meeting is called for a date that is not within
thirty (30) days before or after such anniversary date, notice by the
stockholder in order to be timely must be so received not later than the close
of business on the tenth (10th) day following the day on which such notice of
the date of the Annual Meeting was mailed or such public disclosure of the date
of the Annual Meeting was made, whichever first occurs; and (b) in the case of
a Special Meeting of Stockholders called for the purpose of electing directors,
not later than the close of business on the tenth (10th) day following the day
on which notice of the date of the Special Meeting was mailed or public
disclosure of the date of the Special Meeting was made, whichever first occurs.
In no event shall the public announcement of an adjournment of an Annual
Meeting or Special Meeting commence a new time period for the giving of a
stockholder's notice as described above.
To be in proper written form, a stockholder's notice to the secretary must
set forth (a) as to each person whom the stockholder proposes to nominate for
election as a director (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of shares of capital stock of the
corporation which are owned beneficially or of record by the person and (iv)
any other information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder; and (b) as to the
stockholder giving the notice (i) the name and record address of such
stockholder, (ii) the class or series and number of shares of capital stock of
the corporation which are owned beneficially or of record by such stockholder,
(iii) a description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or persons
(including their names) pursuant to which the nomination(s) are to be made by
such stockholder, (iv) a representation that such stockholder intends to appear
in person or by proxy at the meeting to nominate the persons named in its
notice and (v) any other information relating to such stockholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written consent of
each proposed nominee to being named as a nominee and to serve as a director if
elected.
No person shall be eligible for election as a director of the Corporation
unless nominated in accordance with the procedures set forth in this Section B
of this Article Three, except as may be otherwise provided in the Restated
Certificate of Incorporation of the Corporation. If the chairman of the meeting
determines that a nomination was not made in accordance with the foregoing
procedures, the chairman shall declare to the meeting that the nomination was
defective and such defective nomination shall be disregarded.
Section C. Eligibility. No person shall be eligible for election or
reelection as a director after having attained the age of seventy prior to or
on the day of election or reelection. A director who attains the age of seventy
during his term of office shall be eligible to serve only until the annual
meeting of stockholders of the corporation next following such director's
seventieth birthday.
An employee director, other than the chief executive officer, shall resign
from the board of directors at the time of any reduction in responsibility or
upon termination of employment for whatever reason.
A director who was chief executive officer of the corporation and whose
employment was terminated for whatever reason, other than retirement, shall
resign from the board of directors upon such termination. A director who is a
past chief executive officer of the corporation shall resign from the board of
directors if another director who is the then current chief executive officer
ceases to be such officer but continues as a director. The board of directors
may, at its option, accept or reject such resignations.
A non-employee director shall advise the board of directors on a timely
basis of any reduction in responsibility with the director's then current
employer, except for retirement, or change in employer for
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which such director was engaged when most recently appointed, elected or
reelected as a director and shall resign from the board of directors. The board
of directors may, at its option, accept or reject such resignation.
Section D. Chairman of the Board. The chairman of the board shall be
chosen from among the directors and shall preside at all meetings of the board
of directors and stockholders. He shall confer from time to time with members
of the board and the officers of the corporation and shall perform such other
duties as may be assigned to him by the board. Except where by law the
signature of the president is required, the chairman of the board shall possess
the same power as the president to sign all certificates, contracts, and other
instruments of the corporation which may be authorized by the board of
directors.
Section E. Regular Meetings. The regular annual meeting of the board of
directors shall be held immediately after the adjournment of each annual
meeting of the stockholders. Regular quarterly meetings of the board of
directors shall be held on the third Thursday of January, April, July and
October of each year, or on such date as may be designated from time to time by
the board of directors.
Section F. Special Meetings. Special meetings of the board of directors
may be called at any time by the chairman of the board or by the board, by
giving to each director an oral or written notice setting the time, place and
purpose of holding such meetings.
Section G. Time and Place of Meetings. All meetings of the board of
directors shall be held at the principal office of the corporation, or at such
other place within or without the State of Delaware and at such time as may be
designated from time to time by the board of directors.
Section H. Notices. Any notice, of meetings or otherwise, which is given
or is required to be given to any director may be in the form of oral notice.
Section I. Committees. The board of directors is expressly authorized to
create committees and appoint members of the board of directors to serve on
them, as follows:
(1) Temporary and standing committees, including an executive committee,
and the respective chairmen thereof, may be appointed by the board of
directors, from time to time. The board of directors may invest such committees
with such powers and limit the authority of such committees as it may see fit,
subject to conditions as it may prescribe. The executive committee shall
consist of three or more members of the board. All other committees shall
consist of one or more members of the board. All committees so appointed shall
keep regular minutes of the transactions of their meetings, shall cause them to
be recorded in books kept for that purpose in the office of the corporation,
and shall report the same to the board of directors at its next meeting. Within
its area of responsibility, each committee shall have and exercise all of the
authority of the board of directors, except as limited by the board of
directors or by law, and shall have the power to authorize the execution of an
affixation of the seal of the corporation to all papers or documents which may
require it.
(2) Neither the designation of any of the foregoing committees or the
delegation thereto of authority shall operate to relieve the board of
directors, or any member thereof, of any responsibility imposed by law.
Section J. Loans to Directors. Except as consistent with the DGCL, the
corporation shall not lend money to or guarantee the obligation of any director
of the corporation.
Article Four
Officers
Section A. Election and Term of Office. The officers of the corporation
shall be elected by the board of directors at the regular annual meeting of the
board, unless the board shall otherwise determine, and shall consist of a
president, one or more vice presidents (any one or more of whom may be
designated "corporate," "executive," "senior," "group" or other functionally
described vice president), a corporate secretary, a treasurer and, if so
elected by the board, may include a vice-chairman of the board of directors
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and one or more assistant secretaries and assistant treasurers. The board of
directors shall, from time to time, designate the president or, if elected, the
vice chairman of the board of directors, as the chief executive officer of the
corporation, who shall have general supervision of the affairs of the
corporation. The board of directors may, from time to time, designate a chief
operating officer and a chief financial officer from among the officers of the
corporation. Each officer shall continue in office until his successor shall
have been duly elected and qualified or until removed in the manner hereinafter
provided. Vacancies occasioned by any cause in any one or more of such offices
may be filled for the unexpired portion of the term by the board of directors
at any regular or special meeting of the board.
Section B. Vice-Chairman of the Board. The vice-chairman of the board, if
elected, shall be chosen from among the board of directors and shall, in the
absence of the chairman of the board, preside at all meetings of the
stockholders and directors. He shall have and exercise the powers and duties of
the chairman of the board in the event of the chairman's absence or inability
to act or during a vacancy in the office of chairman of the board. He shall
possess the same power as the chairman to sign all certificates, contracts, and
other instruments of the corporation which may be authorized by the board of
directors. He shall also have such other duties and responsibilities as shall
be assigned to him by the board of directors or chairman of the board. During
the absence or disability of the president, if the president has been
designated chief executive officer, the vice chairman of the board shall act as
the chief executive officer of the Corporation and shall exercise all the
powers and discharge all the duties of the president.
Section C. The President. The president and his duties shall be subject to
the control of the board of directors and, if the chairman of the board has
been designated chief executive officer, to the control of the chairman of the
board. The president shall have the power to sign and execute all deeds,
mortgages, bonds, contracts and other instruments of the corporation as
authorized by the board of directors, except in cases where the signing and
execution thereof shall be expressly designated by the board of directors or by
these bylaws to some other officer, official or agent of the corporation. The
president shall perform all duties incident to the office of president and such
other duties as are properly required of him by the bylaws. During the absence
or disability of the chairman of the board and the vice-chairman of the board,
the president shall exercise all the powers and discharge all the duties of the
chairman of the board.
Section D. The Vice Presidents. The vice presidents shall possess the same
power as the president to sign all certificates, contracts and other
instruments of the corporation which may be authorized by the board of
directors, except where by law the signature of the president is required. All
vice presidents shall perform such duties as may from time to time be assigned
to them by the board of directors, the chairman of the board and the president.
In the event of the absence or disability of the president, and at the request
of the chairman of the board, or in his absence or disability, at the request
of the vice-chairman of the board, or in his absence or disability at the
request of the board of directors, the vice presidents in the order designated
by the chairman of the board, or in his absence or disability by the
vice-chairman of the board, or in his absence or disability by the board of
directors, shall perform all of the duties of the president, and when so acting
they shall have all of the powers of and be subject to the restrictions upon
the president and shall act as a member of, or as a chairman of, any standing
or special committee of which the president is a member or chairman by
designation or ex officio.
Section E. The Corporate Secretary. The corporate secretary of the
corporation shall:
(1) Keep the minutes of the meetings of the stockholders and the board of
directors in books provided for that purpose.
(2) See that all notices are duly given in accordance with the provisions
of these bylaws and as required by law.
(3) Be custodian of the records and of the seal of the corporation and see
that the seal is affixed to all documents, the execution of which on behalf of
the corporation under its seal is duly authorized in accordance with the
provisions of these bylaws.
(4) Keep a register of the post office address of each stockholder, which
shall be furnished to the corporate secretary at his request by such
stockholder, and make all proper changes in such register, retaining and filing
his authority for all such entries.
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(5) See that the books, reports, statements, certificates and all other
documents and records required by law are properly kept, filed and
authenticated.
(6) In general, perform all duties incident to the office of corporate
secretary and such other duties as may from time to time be assigned to him by
the board of directors.
(7) In case of absence or disability of the corporate secretary, the
assistant secretaries, in the order designated by the chief executive officer,
shall perform the duties of corporate secretary.
Section F. The Treasurer. The treasurer of the corporation shall:
(1) Give bond for the faithful discharge of his duties if required by the
board of directors.
(2) Have the charge and custody of, and be responsible for, all funds and
securities of the corporation, and deposit all such funds in the name of the
corporation in such banks, trust companies or other depositories as shall be
selected in accordance with the provisions of these bylaws.
(3) At all reasonable times, exhibit his books of account and records, and
cause to be exhibited the books of account and records of any corporation a
majority of whose stock is owned by the corporation, to any of the directors of
the corporation upon application during business hours at the office of this
corporation or such other corporation where such books and records are kept.
(4) Render a statement of the conditions of the finances of the
corporation at all regular meetings of the board of directors, and a full
financial report at the annual meeting of the stockholders, if called upon so
to do.
(5) Receive and give receipts for monies due and payable to the
corporation from any source whatsoever.
(6) In general, perform all of the duties incident to the office of
treasurer and such other duties as may from time to time be assigned to him by
the board of directors.
(7) In case of absence or disability of the treasurer, the assistant
treasurers, in the order designated by the chief executive officer, shall
perform the duties of treasurer.
Article Five
Corporate Seal
The corporate seal of the corporation shall be a round, metal disc with
the words "Alltrista Corporation" around the outer margin thereof, and the
words "Incorporated- , 2001", in the center thereof, so mounted that it
may be used to impress words in raised letters upon paper.
Article Six
Amendment
These bylaws may be altered, added to, amended or repealed by the board of
directors of the corporation at any regular or special meeting thereof.
Article Seven
Indemnification
Section A. Indemnification. The corporation shall indemnify each person
who is or was a director, officer or employee of the corporation, or of any
other corporation, partnership, joint venture, trust or other enterprise which
he is serving or served in any capacity at the request of the corporation,
against
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any and all liability and reasonable expense that may be incurred by him in
connection with or resulting from any claim, actions, suit or proceeding
(whether actual or threatened, brought by or in the right of the corporation or
such other corporation, partnership, joint venture, trust or other enterprise,
or otherwise, civil, criminal, administrative, investigative, or in connection
with an appeal relating thereto), in which he may become involved, as a party
or otherwise, by reason of his being or having been a director, officer or
employee of the corporation or of such other corporation, partnership, joint
venture, trust or other enterprise or by reason of any past or future action
taken or not taken in his capacity as such director, officer or employee,
whether or not he continues to be such at the time such liability or expense is
incurred, to the fullest extent permitted by the DGCL as the same now exists or
may hereafter be amended (but in the case of any such amendment only to the
extent that such amendment permits the corporation to provide broader
indemnification rights than the DGCL permitted the corporation to provide prior
to such amendment).
Any indemnification pursuant to this Article Seven shall be (unless
ordered by a court) paid by the corporation within sixty (60) days of such
request unless the corporation shall have determined by (a) the board of
directors, acting by a quorum consisting of directors who are not parties to or
who have been wholly successful with respect to such claim, action, suit or
proceeding, (b) outside legal counsel engaged by the corporation (who may be
regular counsel of the corporation) and who delivers to the corporation its
written opinion, or (c) a court of competent jurisdiction, that indemnification
is not proper under the circumstances because such person has not met the
necessary standard of conduct in accordance with DGCL; provided, however, that
following a Change in Control of the Corporation, with respect to all matters
thereafter arising out of acts, omissions or events prior to the Change in
Control of the Corporation concerning the rights of any person seeking
indemnification hereunder, such determination shall be made by special
independent counsel selected by such person and approved by the corporation
(which approval shall not be unreasonably withheld), which counsel has not
otherwise performed services (other than in connection with similar matters)
within the five years preceding its engagement to render such opinion for such
person or for the corporation or any affiliates (as such term is defined in
Rule 405 under the Securities Act of 1933, as amended) of the corporation
(whether or not they were affiliates when services were so performed)
("Independent Counsel"). Unless such person has theretofore selected
Independent Counsel pursuant to this Article Seven, Section A and such
Independent Counsel has been approved by the corporation, legal counsel
approved by a resolution or resolutions of the board of directors prior to a
Change in Control of the Corporation shall be deemed to have been approved by
the Corporation as required. Such Independent Counsel shall determine as
promptly as practicable whether and to what extent such person would be
permitted to be indemnified under applicable law and shall render its written
opinion to the Corporation and such person to such effect; provided that such
independent counsel shall find that the standard for indemnification has been
met by such person unless indemnification is clearly precluded under these
Bylaws or the DGCL. The corporation agrees to pay the reasonable fees of the
Independent Counsel referred to above and to fully indemnify such Independent
Counsel against any and all expenses, claims, liabilities and damages arising
out of or relating to this Article Seven or its engagement pursuant hereto.
For purposes of this Article Seven, a "Change in Control of the
Corporation" shall be deemed to have occurred upon the first to occur of the
following events:
(i) any "person," as such term is used in Sections 13 (d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") (other
than the corporation, any trustee or other fiduciary holding securities
under an employee benefit plan of the corporation or any subsidiary of the
corporation, or any corporation owned, directly or indirectly, by the
stockholders of the corporation in substantially the same proportions as
their ownership of stock of the corporation), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the corporation representing 30 percent or
more of the combined voting power of the corporation's then outstanding
securities;
(ii) at any time during any period of two consecutive years, individuals,
who at the beginning of such period constitute the board of directors, and
any new director (other than a director designated by a person who has
entered into an agreement with the corporation to effect a
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transaction described in subsection (i), (iii) or (iv) of this Section 7.4)
whose election by the board of directors or nomination for election by the
corporation's stockholders was approved by a vote of at least two-thirds
(2/3) of the directors at the beginning of the period or whose election or
nomination for election was previously so approved cease for any reason to
constitute at least a majority thereof;
(iii) the stockholders of the corporation approve a merger or
consolidation of the corporation with any other corporation, other than (1)
a merger or consolidation which would result in the voting securities of
the corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50 percent of the
combined voting power of the voting securities of the corporation or such
surviving entity outstanding immediately after such merger or consolidation
or (2) a merger or consolidation effected to implement a recapitalization
of the corporation (or similar transaction) in which no person acquires 50
percent or more of the combined voting power of the corporation's then
outstanding securities; or
(iv) the stockholders of the corporation approve a plan of complete
liquidation of the corporation or an agreement for the sale or disposition
by the corporation of all or substantially all of the corporation's assets.
Section B. Expenses. Expenses, including attorneys' fees, incurred by a
person referred to in Section A of this Article Seven in defending or otherwise
being involved in a proceeding shall be paid by the corporation in advance of
the final disposition of such proceeding, including any appeal therefrom, upon
receipt of an undertaking (the "Undertaking") by or on behalf of such person to
repay such amount if it shall ultimately be determined that he or she is not
entitled to be indemnified by the corporation.
Section C. Right of Claimant to Bring Suit. If a claim for indemnification
is not paid in full by the corporation within sixty (60) days after a written
claim has been received by the corporation or if expenses pursuant to Section B
hereof have not been advanced within ten (10) days after a written request for
such advancement accompanied by the Undertaking has been received by the
corporation, the claimant may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim or the advancement of
expenses. (If the claimant is successful, in whole or in part, in such suit or
any other suit to enforce a right for expenses or indemnification against the
corporation or any other party under any other agreement, such claimant shall
also be entitled to be paid the reasonable expense of prosecuting such claim.)
It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in defending any proceeding in advance of
its final disposition where the required Undertaking has been tendered to the
corporation) that the claimant has not met the standards of conduct which make
it permissible under the DGCL for the corporation to indemnify the claimant for
the amount claimed. After a Change in Control, the burden of proving such
defense shall be on the corporation, and any determination by the corporation
(including its board of directors, independent legal counsel or its
stockholders) that the claimant had not met the applicable standard of conduct
required under the DGCL shall not be a defense to the action nor create a
presumption that claimant had not met such applicable standard of conduct.
Section D. Non-Exclusivity of Rights. The rights conferred on any person
by this Article shall not be exclusive of any other right which such person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, Bylaws, agreement vote of stockholders or disinterested
directors or otherwise. The board of directors shall have the authority, by
resolution, to provide for such other indemnification of directors, officers,
employees or agents as it shall deem appropriate.
Section E. Insurance. The corporation may purchase and maintain insurance
to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expenses, liabilities or losses, whether or not the
corporation would have the power to indemnify such person against such
expenses, liabilities or losses under the DGCL.
Section F. Enforceability. The provisions of this Article Seven shall be
applicable to all proceedings commenced after its adoption, whether such arise
out of events, acts, omissions or circumstances
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which occurred or existed prior or subsequent to such adoption, and shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of the heirs, executors and administrators of such person.
This Article Seven shall be deemed to grant each person who, at any time that
this Article Seven is in effect, serves or agrees to serve in any capacity
which entitles him to indemnification hereunder rights against the corporation
to enforce the provisions of this Article Seven, and any repeal or other
modification of this Article or any repeal or modification of the DGCL or any
other applicable law shall not limit any rights of indemnification then
existing or arising out of events, acts, omissions, circumstances occurring or
existing prior to such repeal or modification, including, without limitation,
the right to indemnification for proceedings commenced after such repeal or
modification to enforce this Article with regard to acts, omissions, events or
circumstances occurring or existing prior to such repeal or modification.
Section G. Severability. If this Article Seven or any portion hereof shall
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify each director and officer of the
corporation as to costs, charges and expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement with respect to any proceeding,
whether civil, criminal, administrative or investigative, including an action
by or in the right of the corporation, to the full extent permitted by any
applicable portion of this Article Seven that shall not have been invalidated
and to the full extent permitted by applicable law.
C-9
PLEASE MARK YOUR
[X] VOTES AS IN
THIS EXAMPLE.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder(s). If no direction is made, this proxy
will be voted FOR the proposals 1, 2, 3, 4 and 5.
FOR AGAINST ABSTAIN
1. Proposal to approve the reincorporation of the
Corporation in the State of Delaware.
[ ] [ ] [ ]
2. Proposal to increase the number of shares of
Common Stock authorized for issuance.
[ ] [ ] [ ]
3. Proposal to include in the certificate of
incorporation of the new Delaware corporation
a provision eliminating directors liability
other than as required under Delaware law,
subject to shareholder approval of the
proposal to reincorporate the Corporation in
Delaware. [ ] [ ] [ ]
4. Proposal to amend the Corporation's 1998
Long-Term Stock Incentive Plan to increase the
number of shares of Common Stock that may be
issued thereunder by 350,000 shares and to
eliminate the annual automatic share increase
currently provided for in the Plan.
[ ] [ ] [ ]
5. Proposal to approve the Corporation's 2001
Stock Option Plan. [ ] [ ] [ ]
Please sign exactly as name appears at left. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Note: Please sign name exactly as your name appears on the Stock Certificate.
When signing as attorney, executor, administrator, trustee, or guardian, please
give full title. If more than one trustee, all should sign. All joint owners
must sign.
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Signature (if held jointly) Date
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/\ FOLD AND DETACH HERE /\
The Board of Directors recommends a vote
FOR
proposals 1, 2, 3, 4 and 5 above.
ALLTRISTA CORPORATION PROXY/VOTING INSTRUCTION CARD
555 Theodore Fremd Avenue, Suite B302, Rye, New York 10580
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE SPECIAL
MEETING ON December 18, 2001.
The undersigned hereby appoints Martin E. Franklin and Ian G. H. Ashken, and
each or any of them as Proxies, with full power of substitution, to vote all
shares of Alltrista Corporation Common Stock entitled to be voted by the
undersigned for Proposal 1, 2, 3, 4 and 5 referred to on the reverse side of
this Proxy Card and described in the Proxy Statement, and on any other business
as properly may come before the Special Meeting of Shareholders on December 18,
2001, or any adjournment thereof.
This proxy will be voted as directed. If no direction is given, this proxy will
be voted FOR Items 1, 2, 3, 4 and 5.
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED
ENVELOPE.
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SEE REVERSE SIDE
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/\ FOLD AND DETACH HERE /\
YOUR VOTE IS IMPORTANT
Please sign, date and return your proxy
in the enclosed envelope.