SCHEDULE 14C
(RULE 14C-101)
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES
EXCHANGE ACT OF 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement
HIBSHMAN OPTICAL CORP.
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(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the Appropriate Box):
[X] No fee required
[ ] $125.00 per Exchange Act Rule 0-11(c)(1)(ii) or 14c-5(g) and 0-11
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11
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4. Proposed maximum aggregate value of transaction
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5. Total fee paid
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Hibshman Optical Corp.
266 Cedar Street
Cedar Grove, New Jersey 07009
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INFORMATION STATEMENT
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NOTICE OF ACTION TAKEN BY
WRITTEN CONSENT OF MAJORITY SHAREHOLDERS
General
We are providing this Information Statement to you to inform you that
shareholders holding a majority in interest of the common stock of Hibshman
Optical Corp. (referred to herein as "we," "us," the "Company," or "Hibshman")
have adopted resolutions by written consent that:
Action No. 1: Adopt and approve an Agreement and Plan of Merger
pursuant to which we will reincorporate and reorganize ourselves from the State
of New Jersey into the State of Delaware as more fully described below.
We have established September 23, 2005 as the record date related to
the foregoing. Therefore, we are mailing this Information Statement to our
shareholders of record as of the close of business on September 23, 2005. We
intend to mail this Information Statement to our security holders no later than
October 15, 2005.
This Information Statement is being mailed to you for information
purposes only. No action is requested or required on your part.
Shareholders Entitled to Vote
Holders of our common stock at the close of business on September 23,
2005 were entitled to vote on the action set forth above. On September 23, 2005,
we had approximately 41,588,235 shares of common stock issued and outstanding.
Each shareholder was entitled to one vote for each share of common stock held by
such shareholder.
Results of the Vote
On the record date, holders of a majority of our outstanding common
stock executed a written consent in favor of the actions described above. Each
of the foregoing actions was approved by 31,500,000 shares, or 75% of all shares
entitled to vote thereon. This consent satisfies the shareholder approval
requirement for the proposed actions.
No action is required by you. The accompanying Information Statement is
furnished only to inform you of the corporate actions described above before
they take effect in accordance with Rule 14c-2 promulgated under the Securities
Act of 1934, as amended (the "Exchange Act"). Pursuant to Rule 14c-2, the
foregoing actions will not take effect until a date that is at least 20 days
after the date on which this Information Statement has been mailed to you.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
October 11, 2005
ACTION NO. 1: THE REINCORPORATION
Purpose of the Reincorporation
At this time, our purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in a business opportunity presented
to us by persons or firms that desire to seek the perceived advantages of an
Exchange Act registered corporation. In order to facilitate a strategic
transaction as contemplated by our current business plan, our Board of Directors
has determined that it is in the best interests of the Company and our
shareholders to reincorporate and reorganize in the State of Delaware.
The State of Delaware is recognized for adopting comprehensive modern
and flexible corporate laws, which are periodically revised to respond to the
changing legal and business needs of corporations. For this reason, many major
corporations have initially incorporated in Delaware or have changed their
corporate domiciles to Delaware in a manner similar to that adopted by our Board
and a majority of our shareholders. Consequently, the Delaware judiciary has
become particularly familiar with corporate law matters and a substantial body
of court decisions has developed construing Delaware law. Delaware corporate
law, accordingly, has been, and is likely to continue to be, interpreted in many
significant judicial decisions, a fact which may provide greater clarity and
predictability with respect to our corporate legal affairs and the activities of
our directors. Therefore, we believe reincorporating into the State of Delaware
will facilitate our ability to enter into a strategic transaction with a third
party.
Mechanics of the Reincorporation
The Reincorporation will be accomplished as follows: (i) we will form a
new Delaware corporation, which will be a wholly-owned subsidiary of ours
(sometimes referred to herein as "Delaware NewCo"), (ii) we will merge with and
into Delaware NewCo pursuant to an Agreement and Plan of Merger (the
"Reincorporation Agreement"), and (iii) following the merger, Delaware NewCo
will be the surviving entity and our successor issuer under the Exchange Act.
The Exchange Ratio and Fractional Shares
Pursuant to the Reincorporation Agreement attached hereto at Appendix
A, at the effective time of the merger with Delaware NewCo, each outstanding
share of our common stock (the "Old Common Stock") will automatically convert
into .01305340 shares of common stock of Delaware NewCo (the "New Common Stock")
upon the effective time of the Reincorporation. However, we will not be issuing
fractional shares; rather, any registered holder of Old Common Stock as set
forth in the records of our transfer agent will receive fifty (50) shares of New
Common Stock in lieu of the fractional share resulting from the application of
the foregoing exchange ratio. For example, if you are the registered holder of a
stock certificate representing 100,000 shares of Old Common Stock before the
Reincorporation, you will own 1,355 shares of Delaware NewCo common stock after
the Reincorporation (100,000 x .01305340 = 1,305.34, less the fractional share,
plus fifty (50) additional shares in lieu of such fractional share = 1,355).
Given that the value of any fractional share will likely be small, we believe
that this method is preferable to paying cash in lieu of issuing fractional
shares. Also, paying cash in lieu of fractional shares would have the effect of
cashing out and eliminating any holder of fewer than 77 shares of Old Common
Stock.
Please note that this rounding convention applies solely to the shares
represented by outstanding stock certificates held by shareholders of record
(including street name holders) as set forth in the records of our tranfer
agent. If you hold shares beneficially through a broker/dealer you may not
receive the benefit of such rounding.
IT WILL NOT BE NECESSARY FOR SHAREHOLDERS TO EXCHANGE THEIR EXISTING
OLD COMMON STOCK CERTIFICATES FOR NEW COMMON STOCK CERTIFICATES
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Shareholders may, however, exchange their certificates through our
transfer agent, Olde Monmouth Stock Transfer Co., Inc., 200 Memorial Parkway,
Atlantic Highlands, NJ (732) 872-2727, if they so choose.
Consequences of the Reincorporation
The Reincorporation will result in a change in our legal domicile from
New Jersey to Delaware and certain other changes described in this Information
Statement. The Reincorporation by itself will not result in any change in our
business, management, fiscal year, assets or liabilities. However, subsequent to
the closing of the Reincorporation, we currently contemplate entering into a
strategic transaction with Somanta Incorporated (the "Somanta Merger
Transaction") as described below under the heading, "Somanta Merger
Transaction." The following discussion provides an overview of how the
Reincorporation, by itself, will affect certain matters.
Company Name
We currently contemplate that at the effective time of the
Reincorporation, the name of our Company will change from "Hibshman Optical
Corp." to "Somanta Pharmaceuticals, Inc."
Authorized Capital Stock
Effective upon the Reincorporation, Somanta Pharmaceuticals, Inc. will
have 120,000,000 authorized shares of capital stock, 100,000,000 of which will
be common stock and 20,000,000 of which will be "blank check" preferred stock.
Exchange Ratio
As described above under the heading, "The Exchange Ratio and
Fractional Shares," at the effective time of the Reincorporation, each share of
Old Common Stock will be exchanged for .01305340 shares of New Common Stock,
with each holder of a fractional share resulting therefrom being issued fifty
(50) additional shares of New Common Stock in lieu of such fractional share.
Please note that this rounding convention applies solely to the shares
represented by outstanding stock certificates held by shareholders of record
(including street name holders) as set forth in the records of our transfer
agent. If you hold shares beneficially through a broker/dealer you may not
receive the benefit of such rounding.
Board of Directors
Following the Reincorporation, our Board of Directors will continue to
consist of the directors holding office prior to the Reincorporation, subject to
the completion of the Somanta Merger Transaction described below under the
heading "Somanta Merger Transaction."
Shareholder Rights
Following the Reincorporation, the rights of our shareholders will be
governed by the Certificate of Incorporation of Delaware NewCo, a copy of which
is attached hereto as Appendix B, the Bylaws of Delaware NewCo, a copy of which
is attached hereto as Appendix C, and the Delaware General Corporation Law (the
"DGCL"). These changes will result in certain differences in the rights of our
shareholders after the Reincorporation is complete. Please see the section of
this Information Statement entitled "Differences in Shareholder Rights" for a
discussion of some of these differences.
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U.S. Federal Income Tax Consequences
The Reincorporation is intended to be tax free to the Company and our
shareholders under the Internal Revenue Code of 1986, as amended (the "Code").
Accordingly, it is expected that no gain or loss will be recognized by you
solely as a result of the Reincorporation, and no gain or loss will be
recognized by us or Delaware NewCo. Each former holder of shares of our Old
Common Stock will have the same tax basis in Delaware NewCo's New Common Stock
received by such holder pursuant to the Reincorporation Agreement as such holder
has in the shares of such Old Common Stock held by such holder at the effective
time of the Reincorporation. Each stockholder's holding period with respect to
the New Common Stock will include the period during which such holder held the
shares of our common stock, so long as the latter were held by such holder as a
capital asset at the effective time of the Reincorporation. We have not
obtained, and do not intend to obtain, a ruling from the Internal Revenue
Service with respect to the tax consequences of the Reincorporation.
Accounting Consequences
There will be no material accounting consequences for us resulting from
the Reincorporation.
Differences in Shareholder Rights
Our existing Articles of Incorporation and Bylaws are available from us
free of charge upon request. Delaware NewCo's Certificate of Incorporation and
Bylaws will be substantially in the forms attached to this Information Statement
as Appendix A and Appendix B, respectively. The following discussion is only a
summary of certain provisions and differences in shareholder rights resulting
from the Reincorporation and does not purport to be a complete description of
such similarities and differences. The discussion is qualified in its entirety
by reference to the respective corporation laws of New Jersey and Delaware and
the full text of the corporate charters and bylaws of each of the constituent
entities.
Certificate of Incorporation
In general, the Certificate of Incorporation of Delaware NewCo differs
from our existing Articles of Incorporation in the following manner. Our
existing Articles of Incorporation authorize the issuance of 100,000,000 shares
of common stock, par value $.001 per share. The newly formed Delaware entity's
Certificate of Incorporation authorizes the issuance of 120,000,000 shares of
capital stock total, par value $.001 per share, of which 100,000,000 shares are
common stock and 20,000,000 shares of which are "blank check" preferred stock.
We currently intend to issue at least approximately 13,697,834 of such common
stock in the Somanta Merger Transaction (described below). In addition, we
intend to reserve 8,000,000 shares of such common stock for issuance upon
exercise of options granted pursuant to the Somanta 2005 Equity Incentive Plan
we intend to assume in connection with the Somanta Merger Transaction.
In addition, our Board of Directors will be authorized to issue our
preferred stock in one or more series, having the rights, preferences and
privileges as designated by our Board of Directors with no further stockholder
approval.
Shares of the preferred stock could be issued that would have rights
with respect to voting, dividends and liquidation that would be superior to
those of the New Common Stock. The Board could approve the issuance of preferred
stock to discourage attempts by others to obtain control of Delaware NewCo by
merger, tender offer, proxy contest or otherwise by making such attempts more
costly to achieve.
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We believe that it is desirable to have a sufficient number of shares
of preferred stock available, as the occasion may arise, for possible financings
and acquisition transactions and other proper corporate purposes. Having a
sufficient number of shares of preferred stock available for issuance in the
future would give us greater flexibility by allowing shares of preferred stock
to be issued without incurring the delay and expense of a special stockholders'
meeting. We are not conducting any negotiations and have no present plans,
agreements, or understandings, written or oral, regarding acquisitions or
financings involving the issuance of preferred stock.
The shares of preferred stock generally would be available for issuance
without any requirement for further stockholder approval, unless stockholder
action is required by applicable law, our governing documents or by the rules of
the National Association of Securities Dealers, Inc. or any stock trading medium
on which our securities may then be quoted.
Although the Board will authorize the issuance of shares of preferred
stock only when it considers doing so to be in the best interests of
stockholders, the issuance of shares of preferred stock may, among other things,
have a dilutive effect on the earnings and equity per share of New Common Stock
and on the voting rights of holders of shares of New Common Stock. The
authorization of preferred stock also could be viewed as having anti-takeover
effects. Although we have no current plans to do so, shares of preferred stock
could be issued in various transactions that would make a change in control of
the Company more difficult or dilute the stock ownership of a person seeking to
obtain control. We are not aware of any effort to accumulate shares of New
Common Stock or obtain control of the Company by a tender offer, proxy contest,
or otherwise, and the Company has no present intention to use the shares of
authorized preferred stock for anti-takeover purposes.
The rights, preferences and privileges of the common stock of Delaware
NewCo are substantially similar to the rights, preferences and privileges of our
common stock, subject to the differences between the New Jersey Business
Corporation Act ("NJBCA") and the DGCL described below and the potential
issuance of the preferred stock.
Significant Differences Between the Corporation Law of New Jersey and
Delaware
In addition to the matters discussed above, Delaware law differs in
many respects from New Jersey law. Certain differences that could materially
affect the rights of shareholders are discussed below. The following is not an
exhaustive description of all differences between the two states' laws and is
qualified in its entirety by reference to the respective corporation laws of New
Jersey and Delaware.
Stockholder Approval of Certain Business Combinations. In the last
several years, a number of states have adopted special laws designed to make
certain kinds of "unfriendly" corporate takeovers, or other transactions
involving a corporation and one or more of its significant shareholders, more
difficult.
Delaware. Under Section 203 of the Delaware General
Corporation Law, a Delaware corporation is prohibited from engaging in a
"business combination" with an "interested stockholder" for three years
following the date such person or entity becomes an interested stockholder. With
certain exceptions, an interested stockholder is a person or entity who or that
owns, individually or with or through any of its affiliates or associates, 15%
or more of the corporation's outstanding voting stock (including any rights to
acquire stock pursuant to an option, warrant, agreement, arrangement or
understanding, or upon the exercise of conversion or exchange rights, and stock
with respect to which the person has voting rights only). The three-year
moratorium imposed by Section 203 on business combinations does not apply if (a)
prior to the date on which such stockholder became an interested stockholder the
board of directors of the subject corporation approved either the business
combination or the transaction that resulted in the person or entity becoming an
interested stockholder; (b) upon consummation of the transaction that made the
person an interested stockholder, the interested stockholder owned at least 85%
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of the corporation's voting stock outstanding at the time the transaction
commenced (excluding from the 85% calculation shares owned by directors who are
also officers of the subject corporation and shares held by employee stock plans
that do not give employee participants the right to decide confidentially
whether the shares held subject to the plan will be tendered in a tender or
exchange offer); or (c) at or subsequent to the date such person or entity
became an interested stockholder, the board approved the business combination
and it is authorized at the Company's annual or special stockholder meeting by
two-thirds of the outstanding voting stock not owned by the interested
stockholder. A Delaware corporation may elect not to be governed Section 203.
The Certificate of Incorporation of Delaware NewCo does not contain such an
election.
New Jersey. Under Chapter 10A of the New Jersey Business
Corporation Act, a New Jersey corporation is prohibited from engaging in a
"business combination" with an "interested shareholder" for five years following
the date such person or entity becomes an interested shareholder. With certain
exceptions, an interested shareholder is a person or entity who or that owns,
individually or with or through any of its affiliates or associates, 10% or more
of the corporation's outstanding voting stock (including any rights to acquire
stock pursuant to an option, warrant, agreement, arrangement or understanding,
or upon the exercise of conversion or exchange rights, and stock with respect to
which the person has voting rights only). The five-year moratorium imposed by
Chapter 10A on business combinations does not apply if (a) the board of
directors approves the business combination prior to the stock acquisition date
of the interested shareholder: (b) the holders of two-thirds of the voting stock
of the corporation not beneficially owned by the interested shareholder approve
the business combination by affirmative vote at a meeting called for that
purpose or (c) (i) in connection with the business combination, the shareholders
of the corporation receive the higher of (1) the highest price paid for any
shares of common stock of the corporation paid by the interested shareholder
during the five years preceding the announcement date or the date the interested
shareholder became such, whichever is higher, or (2) the market value of the
resident domestic corporation's common stock on the announcement date or the
interested shareholder's stock acquisition date, whichever yields a higher
price, plus, in either case, interest compounded annually, (ii) the holders of
stock other than common stock receive a similarly determined price, taking into
account the highest preferential amount per share to which the holders of such
shares are entitled if there is a liquidation, dissolution or winding up of the
corporation, plus any preferential dividends to which they will be entitled that
are not included in the preferential amount, (iii) the consideration to the
shareholders is paid in cash or in the same form that the interested shareholder
used to acquire the largest block of stock that he acquired, (iv) the holders of
all outstanding stock not owned by the interested shareholder received the
consideration required by the preceding paragraphs in the business combination,
and (v) the interested shareholder did not, subject to certain exceptions,
become the beneficial owner of any additional shares of stock of the corporation
between his stock acquisition date and the date of consummation of the business
combination.
Classified Board of Directors. A classified board is one on which a
certain number, but not all, of the directors are elected on a rotating basis
each year. Both New Jersey and Delaware law permit, but do not require, a
classified board of directors, pursuant to which the directors can be divided
into as many as three classes with staggered terms of office, with only one
class of directors standing for election each year. Neither the Company's
Articles of Incorporation or Bylaws nor the Delaware NewCo Certificate of
Incorporation or Bylaws provide for a classified board. The adoption of a
classified board of directors in the future by Delaware NewCo will require
stockholder approval.
Removal of Directors
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Delaware. Under Delaware law, any director or the entire board
of directors of a corporation may be removed with or without cause with the
approval of a majority of the outstanding shares entitled to vote at an election
of directors.
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New Jersey. Under New Jersey law, directors may be removed,
subject to certain qualifications, for cause or, unless otherwise provided in
the certificate of incorporation, without cause by an affirmative vote of
stockholders entitled to vote for the election of directors.
Indemnification and Limitation of Liability. New Jersey and Delaware
have similar laws respecting indemnification by a corporation of its officers,
directors, employees and other agents. The laws of both states also permit
corporations to adopt a provision in their charters eliminating the liability of
a director to the corporation or its shareholders for monetary damages for
breach of the director's fiduciary duty of care. There are nonetheless certain
differences between the laws of the two states respecting indemnification and
limitation of liability. In general, Delaware law is somewhat broader in
allowing corporations to indemnify and limit the liability of corporate agents,
which, among other things, support Delaware corporations in attracting and
retaining directors.
Delaware. Delaware Law permits a corporation to include a
provision in its certificate of incorporation that limits or eliminates the
personal liability of a director for monetary damages arising from breaches of
his fiduciary duty to the corporation or its stockholders, subject to certain
exceptions. The Delaware NewCo certificate of incorporation will eliminate the
liability of directors to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director to the fullest extent
permissible under Delaware law, as such law exists currently and as it may be
amended in the future to the extent such amendment permits broader
indemnification. Under Delaware law, such provision may not eliminate or limit
director monetary liability for: (a) breaches of the director's duty of loyalty
to the corporation or its stockholders; (b) acts or omissions not in good faith
or involving intentional misconduct or knowing violations of law; (c) the
payment of unlawful dividends or unlawful stock repurchases or redemptions; or
(d) transactions in which the director received an improper personal benefit.
Such limitation of liability provisions also may not limit a director's
liability for violation of, or otherwise relieve Delaware NewCo or its directors
from the necessity of complying with federal or state securities laws, or affect
the availability of non-monetary remedies such as injunctive relief or
rescission.
In effect, under Delaware law, a director of Delaware NewCo
could not be held liable for monetary damages to Delaware NewCo or its
stockholders for gross negligence or lack of due care in carrying out his or her
fiduciary duties as a director so long as such gross negligence or lack of due
care does not involve bad faith or a breach of his or her duty of loyalty to
Delaware NewCo.
New Jersey. New Jersey law permits a New Jersey corporation to
include a provision in its certificate of incorporation which eliminates or
limits the personal liability of a director or officer to the company or its
shareholders for monetary damages for breach of fiduciary duties as a director
or officer. However, no such provision may eliminate or limit the liability of a
director or officer for any breach of duty based upon an act or omission (a) in
breach of the director's or officer's duty of loyalty to the corporation or its
stockholders; (b) not in good faith or involving a knowing violation of law; or
(c) resulting in receipt by such person of an improper personal benefit. Under
New Jersey law, corporations are also permitted to indemnify directors in
certain circumstances and required to indemnify directors under certain
circumstances. Under New Jersey law, a director, officer, employee or agent may,
in general, be indemnified by the Company if he has acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interest of
the corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. In addition, under New
Jersey law, corporations must indemnify a director to the extent the director
had been successful on the merits or otherwise. The Company's existing Articles
of Incorporation require the Company, to the extent permitted by law, to defend,
indemnify and hold harmless its directors and officers.
Inspection of Shareholder List. Both New Jersey and Delaware law allow
any shareholder to inspect the shareholder list for a purpose reasonably related
to such person's interest as a shareholder.
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Dividends and Repurchases of Shares.
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Delaware. Delaware law permits a corporation to declare and
pay dividends out of surplus or, if there is no surplus, out of net profits for
the fiscal year in which the dividend is declared and/or for the preceding
fiscal year as long as the amount of capital of the corporation following the
declaration and payment of the dividend is not less than the aggregate amount of
the capital represented by the issued and outstanding stock of all classes
having a preference upon the distribution of assets. In addition, Delaware law
generally provides that a corporation may redeem or repurchase its shares only
if the capital of the corporation is not impaired and such redemption or
repurchase will not impair the capital of the corporation.
New Jersey. New Jersey law prohibits a corporation from paying
a dividend to its shareholders if, after giving effect to such dividend, the
corporation will be unable to pay its debts as they become due in the usual
course of business or the corporation's total assets will be less than its total
liabilities. New Jersey law prohibits a corporation from repurchasing or
redeeming its shares if: (a) after giving effect to the repurchase or
redemption, the corporation will be unable to pay its debts as they become due
in the usual course of business or the corporation's total assets will be less
than its total liabilities; (b) after giving effect to the repurchase or
redemption, the corporation will have no equity outstanding; (c) the redemption
or repurchase price exceeded that specified in the securities acquired; or (d)
the repurchase or redemption is contrary to any restrictions contained in the
corporation's certificate of incorporation.
To date, the Company has not paid any cash dividends on its
outstanding common stock, and the Company does not anticipate doing so in the
foreseeable future.
Shareholder Voting. In the context of a proposed acquisition, both
Delaware and New Jersey law generally require that a majority of the
shareholders of both the acquiring and the target corporation approve a
statutory merger. In addition, both Delaware and New Jersey law require that a
sale of all or substantially all of the assets of a corporation be approved by a
majority of the outstanding voting shares of the corporation transferring such
assets.
Delaware. Delaware law does not require a stockholder vote of
the surviving corporation in a merger (unless the corporation provides otherwise
in its certificate of incorporation) if: (a) the merger agreement does not amend
the existing certificate of incorporation; (b) each share of stock of the
surviving corporation outstanding immediately before the effective date of the
merger is an identical outstanding share after the merger; and (c) either no
shares of common stock of the surviving corporation and no shares, securities or
obligations convertible into such stock are to be issued or delivered under the
plan of merger, or the authorized unissued shares or shares of common stock of
the surviving corporation to be issued or delivered under the plan of merger
plus those initially issuable upon conversion of any other shares, securities or
obligations to be issued or delivered under such plan do not exceed 20% of the
shares of common stock of such constituent corporation outstanding immediately
prior to the effective date of the merger.
New Jersey. New Jersey law does not require a shareholder vote
of the surviving corporation in a merger (unless the corporation provides
otherwise in its certificate of incorporation) if: (a) the merger agreement does
not amend the existing certificate of incorporation; (b) each share of stock of
the surviving corporation outstanding immediately before the effective date of
the merger is an identical outstanding share after the merger; (c) the number of
"voting shares" outstanding immediately after the merger, plus the number of
voting shares issuable on conversion of other securities or on exercise of
rights and warrants issued pursuant to the merger, will not exceed by more than
40% the total number of voting shares of the surviving corporation outstanding
immediately before the merger; and (d) the number of "participating shares"
outstanding immediately after the merger, plus the number of participating
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shares issuable on conversion of other securities or on exercise of rights and
warrants issued pursuant to the merger, will not exceed by more than 40% the
total number of participating shares of the surviving corporation outstanding
immediately before the merger.
Appraisal Rights. Under both New Jersey and Delaware law, a shareholder
of a corporation participating in certain major corporate transactions may,
under varying circumstances, be entitled to appraisal rights pursuant to which
such shareholder may receive cash in the amount of the fair market value of his
or her shares in lieu of the consideration he or she will otherwise receive in
the transaction.
Delaware. Under Delaware law, such fair market value is
determined exclusive of any element of value arising from the accomplishment or
expectation of the merger or consolidation, and appraisal rights are not
available: (a) with respect to the sale, lease or exchange of all or
substantially all of the assets of a corporation; (b) with respect to a merger
or consolidation by a corporation the shares of which are either listed on a
national securities exchange or are held of record by more than 2,000 holders if
such stockholders receive only shares of the surviving corporation or shares of
any other corporation that are either listed on a national securities exchange
or held of record by more than 2,000 holders, plus cash in lieu of fractional
shares of such corporations; or (c) to stockholders of a corporation surviving a
merger if no vote of the stockholders of the surviving corporation is required
to approve the merger under Delaware law.
New Jersey. Under New Jersey law, dissenting shareholders who
comply with certain procedures are entitled to appraisal rights in a merger,
consolidation or sale, lease, exchange or other disposition of all or
substantially all of the assets of a corporation not in the usual or regular
course of business. However, appraisal rights are not provided, unless the
certificate of incorporation provides otherwise, when (a) the shares to vote on
such transaction are listed on a national securities exchange or held of record
by not less than 1,000 holders (or stockholders receive in such transaction cash
and/or securities which are listed on a national securities exchange or held of
record by not less than 1,000 shareholders or (b) no vote of the corporation's
shareholders is required for the proposed transaction.
Dissolution.
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Delaware. Under Delaware law, unless the board of directors
approves the proposal to dissolve, the dissolution must be unanimously approved
by all the stockholders entitled to vote thereon. Only if the dissolution is
initially approved by the board of directors may the dissolution be approved by
a simple majority of the outstanding shares of the corporation's stock entitled
to vote. In the event of such a board-initiated dissolution, Delaware law allows
a Delaware corporation to include in its certificate of incorporation a
supermajority (greater than a simple majority) voting requirement in connection
with dissolutions. Delaware NewCo's certificate of incorporation does not
contain a supermajority voting requirement.
New Jersey. Under New Jersey law, a corporation may be
dissolved voluntarily by (a) the written consent of all its shareholders or (b)
the adoption by the corporation's board of directors of a resolution
recommending that the corporation be dissolved and submission of the resolution
to a meeting of stockholders at which meeting the resolution is adopted by a
majority of the outstanding shares of the corporation's stock entitled to vote.
Interested Director Transactions. Under both New Jersey and Delaware
law, certain contracts or transactions in which one or more of a corporation's
directors has an interest are not void or voidable because of such interest,
provided that certain conditions, such as obtaining the required approval and
fulfilling the requirements of good faith and full disclosure, are met. With
certain minor exceptions, the conditions are similar under New Jersey and
Delaware law.
9
Shareholder Derivative Suits. Under both New Jersey and Delaware law, a
shareholder may bring a derivative action on behalf of the corporation only if
the shareholder was a shareholder of the corporation at the time of the
transaction in question or if such shareholder's stock thereafter devolved upon
such shareholder by operation of law from a person who was a holder at such
time. New Jersey law also provides that the corporation or the defendant in a
derivative suit may make a motion to the court for an order requiring a
plaintiff shareholder who does not satisfy certain requirements to furnish
security. Delaware does not have a similar security requirement.
Appraisal Rights
You may be entitled to dissenters' rights of appraisal with respect to
the Reincorporation. For further information and a description of the procedures
to be followed in order to demand appraisal, refer to the Section in this
Information Statement entitled "Appraisal Rights and Procedures" below.
SOMANTA MERGER TRANSACTION
As indicated above, our purpose at this time is to seek, investigate
and, if such investigation warrants, acquire an interest in a business
opportunity presented to us by persons or firms that desire to seek the
perceived advantages of an Exchange Act registered corporation. To that end, we
are negotiating a possible Agreement and Plan of Merger (the "Somanta Merger
Agreement") by and among the Company, Somanta Incorporated ("Somanta"), Delaware
NewCo and Somanta Merger Sub, Inc. ("Merger Sub"). The merger contemplated by
the Somanta Merger Agreement is subject to a variety of conditions, including,
without limitation, the completion of Somanta's due diligence review of the
Company, the completion of the Reincorporation, and the affirmative vote of the
holders of at least ninety percent (90%) of the outstanding voting stock of
Somanta approving the Somanta Merger Transaction. The following is a summary of
the business of Somanta and certain proposed terms of the Somanta Merger
Transaction and the Somanta Merger Agreement. However, these terms are still
being negotiated by the parties and remain subject to such further negotiation
and the respective definitive agreements ultimately entered into with the
respect to the Somanta Merger Transaction, if any.
Summary of Proposed Somanta Merger Transaction
The following is a summary only of terms tentatively agreed upon by us
and Somanta. It is qualified in its entirely by reference to the more detailed
discussion in this Information Statement.
o We will consummate the Reincorporation after which we will be
a Delaware corporation with 570,518 shares of Common Stock
outstanding;
o Our name will change to Somanta Pharmaceuticals, Inc.
o We will issue to the shareholders and optionholders of Somanta
15,730,000 shares of common stock or options to purchase our
common stock equal to 96.5% of our total outstanding common
stock on a fully diluted basis;
o We will assume the Somanta 2005 Equity Incentive Plan and
reserve 8,000,000 shares of common stock for issuance under
such plan;
o We will be authorized to issue an additional 78,302,166 shares
of common stock and 20,000,000 shares of preferred stock;
o Our business will become the business of Somanta;
10
o Our financial statements will become the financial statements
of Somanta;
o Our management will resign and the existing Somanta management
and Board will become the management and Board of Somanta; and
o Following the closing of the Somanta Merger Transaction, we
intend to issue an indeterminate number of additional shares
of our common stock to investors in connection with a
subsequent financing with gross proceeds to us of
approximately $10,000,000 to $20,000,000, which will further
dilute our existing shareholders.
Somanta Incorporated
Somanta is a biopharmaceutical company engaged in the development of
drugs for the treatment of cancer. Somanta's principal place of business is
located at 19200 Von Karmen Avenue, Suite 400, Irvine, CA 92612. Somanta's
telephone number is 949-477-8090. Somanta has in-licensed five drug development
candidates from academic and research institutions in the United States and
Europe designed for use in anti-cancer therapy in order to advance them along
the regulatory and clinical pathways toward commercial approval. Somanta intends
to obtain approval from the United States Food and Drug Administration ("FDA")
and from the European Medicines Evaluation Agency ("EMEA") for each of its
products.
Somanta has two product candidates in the clinical stage of
development:
o Phoenix ("Phoenix") is a radiolabeled humanized monoclonal
antibody, targeting the antigen tumor marker known as PEM
(polymorphic epithelial mucin) encoded by a gene known as
MUC-1. Phoenix is designed to be administered with
chemotherapy and to deliver targeted pure high-energy beta
radiation with local tissue penetration (5 to 10 mm) and exert
a cytotoxic effect.
o Sodium Phenylbutyrate ("PB") is small molecule
chemopotentiator, previously approved for a rare genetic
disorder, hyperuremia, which acts as an inhibitor of histidine
deacetylase and is non-cytotoxic. PB is designed to be
administered in conjunction with radiation and chemotherapy.
Somanta also has three therapeutic cancer product candidates in the
pre-clinical stage of development. These include:
o Alchemix ("Alchemix"), a cytotoxic small molecule compound,
which interrupts all phases of the cell cycle by selective
binding to DNA and inhibiting many DNA processing enzymes to
overcome drug resistance tumors.
o Prodrax ("Prodrax"), is a cytotoxic small molecule compound,
which is non-toxic in normally oxygenated tissue but becomes
highly toxic in low oxygen (hypoxic) tumors by binding to the
DNA in tumor cells and interrupting their cell cycle.
o Angiolix ("Angiolix") is a humanized monoclonal antibody Mab,
targeting the protein known as Lactadherin which is stimulator
of angiogenesis by promoting Vascular Endothelial Growth
Factor ("VEGF") -dependent vascularization by inducing
programmed cell death (apoptosis) in blood vessels supporting
tumors.
11
Somanta's Current Product Pipeline:
- --------------------------------------------------------------------------------------------------------------------
Candidate Indication Status Territorial
rights
- --------------------------------------------------------------------------------------------------------------------
Phoenix Recurrent breast, Investigator Somanta
prostate and ovarian Sponsored Phase II worldwide
(huBrE-3 MAb tiuxetan MXDTPA labeled with 111-Indium cancer in U.S.
for imaging and 90-Yttrium for radiation therapy)
- --------------------------------------------------------------------------------------------------------------------
Sodium Phenylbutyrate Recurrent Glioblastoma Multiple Virium (US
and prostate cancer Investigator and Canada)
Sponsored Phase II Somanta
in U. S. elsewhere
- --------------------------------------------------------------------------------------------------------------------
Alchemix Recurrent CNS, colon, Development Somanta
ovarian and renal worldwide
(chloroethylaminoanthraquinone) cancer
- --------------------------------------------------------------------------------------------------------------------
Prodrax Recurrent Lung, Development Somanta
breast, ovarian, worldwide
(di-N-oxides of chloroethylaminoanthraquinone as pancreatic and
bioreductive prodrugs that are metabolized to esophageal cancer
potent cytotoxins in hypoxic tumors)
- --------------------------------------------------------------------------------------------------------------------
Angiolix Relapsed colorectal Development Somanta
and breast cancer worldwide
(HuMc-3 MAb)
- --------------------------------------------------------------------------------------------------------------------
Phoenix Clinical Development
Since 1993 Phoenix has been investigated in five Investigator sponsored
Phase I/II clinical trials conducted by the Cancer Research Fund of Contra
Costa, now known as the Cancer Research Institute of Contra Costa ("CRICC"), at
the University of Colorado at Denver and at New York University School of
Medicine/Bellevue Hospital. The initial three completed studies used a murine
(mouse) antibody in one 15 patient imaging study and two 15 patient therapeutic
studies. In 1997 the murine antibody was developed into a fully humanized
antibody using a patented method licensed from the U. S. National Institutes of
Health. Since then two Phase II studies have been completed including a 7
patient imaging study and a 17 patient therapy study.
Based on the results of these studies, Somanta is facilitating a Phase
II open label, dose escalation, Investigator sponsored clinical trial which has
been initiated at New York University Medical Center/Bellevue Hospital This
study is to treat breast cancer in patients who are PEM positive and who have
relapsed from two prior treatments. The study will evaluate Phoenix in
combination with a chemotherapy drug, capecitabine, (Xeloda (R) Roche), a drug
used commonly in relapsed breast cancer. The Phase I/II study will establish the
maximum tolerated dose, establish the pharmacokinetics of the combination
therapy and assess the response rate for this therapy.
PB Clinical Development
PB is an approved drug which has many years of clinical use in the
treatment of hyperuremia. It has been demonstrated to be safe and
well-tolerated. Since the early-1990's, it has been studied by the Armed Forces
University Medical School and the National Cancer Institute ("NCI") for its
anti-cancer activities. Fourteen Phase I studies with a total of 370 patients
have been completed. Four Investigator sponsored Phase II studies, supported by
NCI, are ongoing at Johns Hopkins, Mt. Sinai, Mayo Clinic and Emory.
12
Virium Pharmaceuticals, Inc. ("Virium") has entered into an exclusive
Patent Licensing Agreement with the United States Public Health Service ("PHS")
for the use of PB in the treatment of cancer, anemia and AIDS.
Somanta has entered into an exclusive co-development and sublicense
agreement with Virium relating to PB for use outside the U.S. and Canada. We
understand that Virium intends to initiate a Phase IIb clinical trial in
recurrent Glioblastoma, a malignant tumor of the brain, in combination with
radiation.
The Somanta Merger Agreement
The Somanta Merger Agreement will provide for the merger of Somanta
with Merger Sub, a wholly-owned subsidiary of Delaware NewCo. As a result of the
Somanta Merger Transaction, Somanta will become a wholly-owned subsidiary of
Delaware NewCo. We currently expect to issue approximately 13,697,834 shares of
Delaware NewCo common stock to the holders of Somanta capital stock and assume
all of the outstanding options to purchase Somanta common stock along with the
existing Somanta equity incentive plan. Therefore, immediately following the
closing of the Somanta Merger Transaction, our shareholders will own
approximately 3.5% of the outstanding capital stock of Delaware NewCo
(calculated on a fully diluted basis) and the stockholders of Somanta will own
approximately 96.5% of the outstanding shares of capital stock of Delaware NewCo
(calculated on a fully diluted basis).
The Somanta Merger Agreement will also provide that effective as of the
closing of the Somanta Merger Transaction, our current Board of Directors will
resign and that the existing board of directors of Somanta shall be appointed by
our outgoing Board of Directors to fill the vacancies left on the Delaware NewCo
Board of Directors by virtue of such resignations.
Further, it is expected that the closing of the Somanta Merger
Transaction will also be subject to certain conditions, including, without
limitation, the following:
(i) the representations and warranties of each of the parties
shall be true and correct as of the closing date;
(ii) the parties shall have performed each of their respective
covenants and agreements under the Somanta Merger Agreement prior to the closing
date;
(iii) Somanta shall have completed its due diligence review to its
satisfaction;
(iv) the Reincorporation shall have been duly completed;
(v) Somanta shall have provided audited financial statements
related to its business and operations;
(vi) the Somanta Merger Transaction and the Somanta Merger
Agreement shall have been duly approved by holders representing at least 90% of
the outstanding capital stock of Somanta; and
(vii) the stockholders of Somanta shall have received certain
opinions from our legal counsel.
In addition, it is expected that the Somanta Merger Agreement may be
terminated:
(a) by the mutual written consent of the parties to the Somanta
Merger Agreement;
13
(b) by either Somanta or us if the closing has not taken place
prior to December 31, 2005;
(c) by either Somanta or us if any court of competent jurisdiction
has issued an order, judgment or decree restraining or enjoining the Somanta
Merger Transaction;
(d) by Somanta if we breach any representation, warranty or
covenant in the Somanta Merger Agreement or if Somanta is not satisfied with its
due diligence review; or
(e) by us if Somanta breaches any representation, warranty or
covenant in the Somanta Merger Agreement.
Be advised that if the Somanta Merger Transaction is completed it will
result in a change in control of the Company and substantial dilution of our
existing shareholders.
The Subsequent Financing
Subsequent to the closing of the Somanta Merger Transaction, we intend
to issue an indeterminate number of shares of our common stock to new investors
for aggregate gross proceeds to us expected to be between $10,000,000 and
$20,000,000. We expect that our current shareholders will be further diluted in
a substantial manner if we complete such a financing. However, we cannot assure
you that we will be able to complete such a financing on these terms, if at all.
Regulatory Approvals Required
There are no federal or state regulatory requirements that we must
comply with or approvals that we must obtain in connection with either the
Reincorporation or the Somanta Merger Transaction.
14
FORWARD-LOOKING STATEMENTS
This Information Statement may contain forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act. Forward-looking statements are identified by words such
as "believe," "anticipate," "expect," "intend," "plan," "will," "may," and other
similar expressions. In addition, any statements that refer to expectations,
projections or other characterizations of future events or circumstances are
forward-looking statements.
We wish to caution readers that these forward-looking statements are
only predictions and that our business is subject to significant risks. The
factors discussed herein, and other important factors, in some cases have
affected, and in the future could affect, our actual results and could cause our
actual results to differ materially from those expressed in any forward-looking
statements made by us or on our behalf. These risks include, but are not limited
to:
o our inability to implement our business strategy;
o our inability to consummate the Reincorporation; and
o our inability to identify new investors.
You should read this Information Statement completely and with the
understanding that our actual future results may be materially different from
what we expect. We qualify all of the forward-looking statements in this
Information Statement by these cautionary statements.
15
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of the Record Date, we had a total of 41,588,235 shares of common
stock issued and outstanding. The following table sets forth, as of the Record
Date, the stock ownership of each executive officer and director of Hibshman, of
all executive officers and directors as a group, and of each person known by
Hibshman to be a beneficial owner of 5% or more of our Common Stock. Unless
otherwise noted, each person listed below is the sole beneficial owner of the
shares and has sole investment and voting power as such shares.
Name and address of Beneficial Owner (1) Shares Beneficially Owned Percentage Beneficially Owned
---------------------------------------- ------------------------- -----------------------------
Pasquale Catizone
286 Cedar Street
Cedar Grove, NJ 07009 10,000,000 24%
Barbara Catizone
266 Cedar Street 5,250,000 12.6%
Cedar Grove, NJ 07009
Carmine Catizone
10 1/2 Walker Avenue 16,250,000 39%
Morristown, NJ 07960
All directors and executive officers as a group (2 persons) 26,250,000 63.1%
(1) We believe that all persons have full voting and investment power with
respect to the shares. Under the rules of the Securities and Exchange
Commission, a person (or group of persons) is deemed to be a "beneficial owner"
of a security if he or she, directly or indirectly, has or shares the power to
vote or to direct the voting of such security, or the power to dispose of or to
direct the disposition of such security. Accordingly, more than one person may
be deemed to be a beneficial owner of the same security. A person is also deemed
to be a beneficial owner of any security, which that person has the right to
acquire within sixty (60) days, such as warrants or options to purchase shares
of our Common Stock.
SECURITY OWNERSHIP OF CERTAIN FUTURE BENEFICIAL OWNERS AND MANAGEMENT FOLLOWING
THE SOMANTA MERGER TRANSACTION
The following table sets forth, as of the date of completion of closing
of the proposed Somanta Merger Transaction, the number of shares of common stock
of Delaware NewCo expected to be owned of record and beneficially by persons who
are expected to be appointed as directors and executive officers of Delaware
NewCo, by persons who are expected to then hold 5% or more of the outstanding
common stock of Delaware NewCo and all expected future officers and directors as
a group.
Name and address of Beneficial Owner (1) Shares Beneficially Owned Percentage Beneficially Owned
---------------------------------------- ------------------------- -----------------------------
SCO Capital Partners LLC, 1285 Avenue of the Americas, 6,016,725 (2) 42.2%
35th Floor, New York, NY
Agamemnon A. Epenetos 3,869,152 (3) 27.1%
Michael Ashton -- --
Terrance J. Bruggeman -- --
John Gibson 98,554 *
David Kramer -- --
Kathleen Van Sleen -- --
Jeffrey Davis 786,500(4) 5.5%
All directors and executive officers 4,754,206 33.3%
as a group (7 persons)
*Less than one percent
16
(1) The person listed is currently an officer or director of Somanta and is
expected to become an officer or director of Delaware NewCo following completion
of the Somanta Merger Transaction. Under the rules of the Securities and
Exchange Commission, a person (or group of persons) is deemed to be a
"beneficial owner" of a security if he or she, directly or indirectly, has or
shares the power to vote or to direct the voting of such security, or the power
to dispose of or to direct the disposition of such security. Accordingly, more
than one person may be deemed to be a beneficial owner of the same security. A
person is also deemed to be a beneficial owner of any security, which that
person has the right to acquire within sixty (60) days, such as warrants or
options to purchase shares of our Common Stock.
(2) Jeffrey Davis, one of our directors, is a principal of SCO Capital Partners
LLC. Mr. Davis disclaims beneficial ownership of all shares held in the name of
SCO Capital Partners LLC.
(3) Consists of 3,869,152 held in the name of Walbrook Trustees (Jersey Ltd.
REK33), PO Box 248, Lord Coutanche House, 66-68 Esplanade St. Helier, Jersey JE4
5PS, Channel Islands, of which Mr. Epenetos is the trustee.
(4) Consists of 786,500 shares held by Lake End Capital, LLC, of which Jeffrey
Davis, one of our directors, is a principal.
COMPENSATION OF CURRENT OFFICERS AND DIRECTORS
No officer or director has received any remuneration or compensation
from Hibshman. We currently have no stock option, retirement, pension, or
profit-sharing programs for the benefit of directors, officers or other
employees. However, in connection with the Somanta Merger Transaction, it is
expected that Delaware NewCo will adopt and assume Somanta's 2005 Equity
Incentive Plan and each outstanding option granted pursuant thereto.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to incorporate by
reference the information that we file with it. This means that we can disclose
information to you by referring you to other documents. The documents that have
been incorporated by reference into this Information Statement are an important
part of this Information Statement, and you should review that information in
order to understand the nature of the matters that have been acted upon.
Information contained in this Information Statement automatically updates and
supersedes previously filed information. We are incorporating by reference the
documents listed below.
o our annual report on Form 10-KSB for the fiscal year ended
December 31, 2004
o our quarterly report on Form 10-QSB for the quarter ended
March 31, 2005
o our quarterly report on form 10-QSB for the quarter ended June
30, 2005
If you would like a copy of any of these documents, at no cost, please
write or call us at:
Hibshman Optical Corp.
266 Cedar Street
Cedar Grove, NJ 07009
Attn: Corporate Secretary
Telephone: (973) 857-2414
You should only rely upon the information included in or with, or
incorporated by reference into, this Information Statement. We have not
authorized anyone to provide you with additional or different information. You
should not assume that the information included in or with, or incorporated by
reference into, this Information Statement is accurate as of any date later than
the date on the front of the Information Statement.
17
ADDITIONAL INFORMATION
We will furnish without charge to any shareholder, upon written or oral
request, any documents filed by us pursuant to the Exchange Act. Requests for
such documents should be address to Hibshman Optical Corp., 266 Cedar Street,
Cedar Grove, New Jersey 07009. Documents filed by us pursuant to the Exchange
Act may be reviewed and/or obtained through the Securities and Exchange
Commission's Electronic Data Gathering Analysis and Retrieval System, which is
publicly available through the Securities and Exchange Commission's website at
http://www.sec.gov. or at the SEC's Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330.
18
APPRAISAL RIGHTS AND PROCEDURES
Our shareholders have a right to dissent as to the Merger and have the
right to be paid the fair value of their shares. However, given that we have
only nominal assets and over 40 million shares outstanding, our belief is that
the fair value of each share is de minimis. If you would, nevertheless, like to
dissent, you must provide a written notice of such dissent to us, at our New
Jersey address, within twenty (20) days after the mailing of this Information
Statement. Along with such written notice of dissent, you may include a written
demand for the payment of the fair value of your shares. Within twenty (20) days
after you make such a demand for payment, you must deliver to us the certificate
or certificates representing the shares with respect to which you are dissenting
or other evidence of ownership so that we may make notation thereon that such
demand has been made. Please refer to the New Jersey Business Corporation Act,
Section 14A:11-7 and -8 for procedures to be followed in the event the Company
and the dissenting shareholder cannot agree on the fair value of the dissenting
shares. For your convenience, New Jersey Business Corporation Act, Sections
14A:11-1 through 11-11, relating to your right to dissent, have been attached
hereto as Appendix D.
HIBSHMAN HAS RETAINED THE RIGHT TO ELECT NOT TO PROCEED WITH THE
REINCORPORATION IF GREATER THAN 1% OF THE SHAREHOLDERS ENTITLED TO VOTE PROPERLY
EXERCISE THEIR DISSENTERS' RIGHTS. IF YOU WISH TO SEEK DISSENTERS' RIGHTS, YOU
ARE URGED TO REVIEW THE APPLICABLE NEW JERSEY STATUTES ATTACHED TO THIS DOCUMENT
AS APPENDIX C.
IF YOU FAIL TO COMPLY STRICTLY WITH THE PROCEDURES DESCRIBED ABOVE, YOU
WILL LOSE YOUR APPRAISAL RIGHTS. CONSEQUENTLY, IF YOU WISH TO EXERCISE YOUR
APPRAISAL RIGHTS, WE STRONGLY URGE YOU TO CONSULT A LEGAL ADVISOR BEFORE
ATTEMPTING TO EXERCISE YOUR APPRAISAL RIGHTS.
19
APPENDIX A
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of September 27, 2005 (the
"Agreement), is made by and between Hibshman Optical Corp., a New Jersey
corporation ("Hibshman"), and Somanta Pharmaceuticals, Inc., a Delaware
corporation ("Somanta"). Hibshman and Somanta are sometimes referred to herein
as the "Constituent Corporations."
RECITALS
A. Somanta is a corporation duly organized and existing under the
laws of the State of Delaware and has an authorized capital of 120,000,000
shares, 100,000,000 shares of which are Common Stock, $0.001 par value per
share, and 20,000,000 shares of which are Preferred Stock, $0.001 par value per
share. As of the date hereof, 100 shares of Common Stock of Somanta were issued
and outstanding, all of which were held by Hibshman, and no shares of Preferred
Stock were issued and outstanding.
B. Hibshman is a corporation duly organized and existing under
the laws of the State of New Jersey and has an authorized capital of 100,000,000
shares of Common Stock, $.001. As of the date hereof, 41,588,235 shares of
Common Stock of Hibshman were issued and outstanding (the "Hibshman Common
Stock").
C. The Board of Directors of Hibshman has determined that, for
the purpose of effecting the reincorporation of Hibshman in the State of
Delaware, it is advisable and in the best interests of Hibshman and its
shareholders that Hibshman merge with and into Somanta upon the terms and
conditions herein provided.
D. The respective Boards of Directors of Somanta and Hibshman
have approved this Agreement and have directed that this Agreement be submitted
to a vote of their respective stockholders and shareholders and executed by the
undersigned officers.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, Somanta and Hibshman hereby agree, subject to the terms and
conditions hereinafter set forth, as follows:
ARTICLE I
MERGER
1. Merger. In accordance with the provisions of this Agreement,
the Delaware General Corporation Law and the New Jersey Business Corporation
Act, Hibshman shall be merged with and into Somanta (the "Merger"), the separate
existence of Hibshman shall cease and Somanta shall survive the Merger and shall
continue to be governed by the laws of the State of Delaware. Somanta shall be,
and is herein sometimes referred to as, the "Surviving Corporation." The name of
the Surviving Corporation shall be "Somanta Pharmaceuticals, Inc."
Appendix A - Page 1
a. Filing and Effectiveness. The Merger shall become
effective when the following actions shall have been completed: (i) this
Agreement and the Merger shall have been adopted and approved by the
stockholders of each Constituent Corporation in accordance with the requirements
of the Delaware General Corporation Law and the New Jersey Business Corporation
Act; (ii) all of the conditions precedent to the consummation of the Merger
specified in this Agreement shall have been satisfied or duly waived by the
party entitled to satisfaction thereof; (iii) an executed Certificate of Merger
or an executed counterpart of this Agreement meeting the requirements of the
Delaware General Corporation Law shall have been filed with the Secretary of
State of the State of Delaware; and (iv) an executed Certificate of Merger or an
executed counterpart of this Agreement meeting the requirements of the New
Jersey Business Corporation Act shall have been filed with the Secretary of
State of the State of New Jersey. The date and time when the Merger shall become
effective, as aforesaid, is herein called the "Effective Date of the Merger."
b. Effect of Merger. Upon the Effective Date of the
Merger, the separate existence of Hibshman shall cease and Somanta, as the
Surviving Corporation, (i) shall continue to possess all of its assets, rights,
powers and property as constituted immediately prior to the Effective Date of
the Merger, (ii) shall be subject to all actions previously taken by its and
Hibshman's Board of Directors, (iii) shall succeed, without other transfer, to
all of the assets, rights, powers and property of Hibshman in the manner more
fully set forth in Section 259 of the Delaware General Corporation Law, (iv)
shall continue to be subject to all of the debts, liabilities and obligations of
Hibshman as constituted immediately prior to the Effective Date of the Merger,
and (v) shall succeed, without other transfer, to all of the debts, liabilities
and obligations of Hibshman in the same manner as if Somanta had itself incurred
them, all as more fully provided under the applicable provisions of the Delaware
General Corporation Law and the New Jersey Business Corporation Act.
ARTICLE II
CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
1. Certificate of Incorporation. The Certificate of Incorporation
of Somanta as in effect immediately prior to the Effective Date of the Merger, a
copy of which is attached hereto as Exhibit A, shall continue in full force and
effect as the Certificate of Incorporation of the Surviving Corporation until
duly amended in accordance with the provisions thereof and applicable law.
2. Bylaws. The Bylaws of Somanta as in effect immediately prior
to the Effective Date of the Merger, a copy of which is attached hereto as
Exhibit B, shall continue in full force and effect as the Bylaws of the
Surviving Corporation until duly amended in accordance with the provisions
thereof and applicable law.
3. Directors and Officers. The directors and officers of Hibshman
immediately prior to the Effective Date of the Merger shall be the directors and
officers of the Surviving Corporation until their successors shall have been
duly elected and qualified or until as otherwise provided by law, or the
Certificate of Incorporation of the Surviving Corporation or the Bylaws of the
Surviving Corporation.
Appendix A - Page 2
ARTICLE III
MANNER OF CONVERSION OF STOCK
1. Hibshman Common Stock. Upon the Effective Date of the Merger,
each share of Hibshman Common Stock issued and outstanding immediately prior
thereto shall, by virtue of the Merger and without any action by the Constituent
Corporations, the holder of such shares or any other person, be converted into
and exchanged for .01305340 shares of fully paid and non-assessable shares of
common stock, $0.001 par value per share, of the Surviving Corporation, provided
that no fractional shares shall be issued as a result of such conversion and
exchange, but in lieu of such issuance of a fractional share, each record holder
of a certificate representing Hibshman Common Stock on the Effective Date of the
Merger shall be issued fifty (50) additional shares of common stock of the
Surviving Corporation; provided, further however, that the fractional share
interest of each such record holder shall be aggregated such that no holder of a
certificate or certificates representing Hibshman Common Stock shall receive
more than fifty (50) shares of common stock of the Surviving Corporation with
respect to any interest in fractional shares.
2. Somanta Common Stock. Upon the Effective Date of the Merger,
each share of Somanta Common Stock issued and outstanding immediately prior
thereto shall, by virtue of the Merger and without any action by Somanta, the
holder of such shares or any other person, be cancelled and returned to the
status of authorized but unissued shares.
3. Exchange of Certificates. After the Effective Date of the
Merger, each holder of an outstanding certificate representing shares of
Hibshman Common Stock may, at such shareholder's option, surrender the same for
cancellation to Olde Monmouth Stock Transfer Co., Inc., as exchange agent (the
"Exchange Agent"), and each such holder shall be entitled to receive in exchange
therefor a certificate or certificates representing the number of shares of the
Surviving Corporation's common stock into which the surrendered shares were
converted as set forth in Article III Section 1 above. Unless and until so
surrendered, each outstanding certificate theretofore representing shares of
Hibshman Common Stock shall be deemed for all purposes to represent the number
of shares of the Surviving Corporation's Common Stock into which such shares of
Hibshman Common Stock were converted in the Merger as set forth in Article III
Section 1 above. The registered owner on the books and records of the Surviving
Corporation or the Exchange Agent of any shares of stock represented by such
outstanding certificate shall, until such certificate shall have been
surrendered for transfer or conversion or otherwise accounted for to the
Surviving Corporation or the Exchange Agent, have and be entitled to exercise
any voting and other rights with respect to and to receive dividends and other
distributions upon the shares of common stock of the Surviving Corporation
represented by such outstanding certificate as provided above. Each certificate
representing common stock of the Surviving Corporation so issued in the Merger
shall bear the same legends, if any, with respect to the restrictions on
transferability as the certificates of Hibshman so converted and given in
exchange therefore, unless otherwise determined by the Board of Directors of the
Surviving Corporation in compliance with applicable laws, or other such
Appendix A - Page 3
additional legends as agreed upon by the holder and the Surviving Corporation.
If any certificate for shares of Surviving Corporation common stock is to be
issued in a name other than that in which the certificate surrendered in
exchange therefor is registered, it shall be a condition of issuance thereof
that the certificate so surrendered shall be properly endorsed and otherwise in
proper form for transfer, that such transfer otherwise be proper and comply with
applicable securities laws and that the person requesting such transfer pay to
Somanta or the Exchange Agent any transfer or other taxes payable by reason of
issuance of such new certificate in a name other than that of the registered
holder of the certificate surrendered or established to the satisfaction of
Somanta that such tax has been paid or is not payable.
ARTICLE IV
GENERAL
1. Covenants of Somanta. Somanta covenants and agrees that it
will, on or before the Effective Date of the Merger: (a) file any and all
documents with the State of New Jersey necessary for the assumption by Somanta
of all of the franchise tax liabilities of Hibshman; and (b) take such other
actions as may be required by the New Jersey Business Corporation Act.
2. Further Assurances. From time to time, as and when required by
Somanta or by its successors or assigns, there shall be executed and delivered
on behalf of Hibshman such deeds and other instruments, and there shall be taken
or caused to be taken by Somanta and Hibshman such further and other actions as
shall be appropriate or necessary in order to vest or perfect in or conform of
record or otherwise by Somanta the title to and possession of all the property,
interests, assets, rights, privileges, immunities, powers, franchises and
authority of Hibshman and otherwise to carry out the purposes of this Agreement,
and the officers and directors of Somanta are fully authorized in the name and
on behalf of Hibshman or otherwise to take any and all such action and to
execute and deliver any and all such deeds and other instruments.
3. Abandonment. At any time before the Effective Date of the
Merger, this Agreement may be terminated and the Merger may be abandoned for any
reason whatsoever by the Board of Directors of either Hibshman or of Somanta, or
of both, notwithstanding the approval of this Agreement by the shareholders of
Hibshman or the sole stockholder of Somanta, or both.
4. Amendment. The Boards of Directors of the Constituent
Corporations may amend this Agreement at any time prior to the filing of this
Agreement (or certificate in lieu thereof) with the Secretaries of State of the
States of Delaware and New Jersey, provided that an amendment made subsequent to
the adoption of this Agreement by the shareholders of either Constituent
Corporation shall not: (a) alter or change the amount or kind of shares,
securities, cash, property and/or rights to be received in exchange for or on
conversion of all or any of the shares of any class or series thereof of such
Constituent Corporation; (b) alter or change any term of the Certificate of
Incorporation of the Surviving Corporation to be effected by the Merger; or (c)
allow or change any of the terms and conditions of this Agreement if such
alteration or change would adversely affect the holders of any class or series
of capital stock of any Constituent Corporation.
Appendix A - Page 4
5. Agreement. Executed copies of this Agreement will be on file
at the principal place of business of the Surviving Corporation at 266 Cedar
Street, Cedar Grove, New Jersey 07009.
6. Governing Law. This Agreement shall in all respects be
construed, interpreted and enforced in accordance with and governed by the laws
of the State of Delaware and, so far as applicable, the merger provisions of the
New Jersey Business Corporation Act.
7. Counterparts. In order to facilitate the filing and recording
of this Agreement, the same may be executed in two counterparts, by facsimile,
or both, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
Appendix A - Page 5
IN WITNESS WHEREOF, the parties hereto executed this Agreement as of
the day and year first written above.
HIBSHMAN OPTICAL CORP.
By: /s/ PASQUALE CATIZONE
-------------------------------------
Print Name: Pasquale Catizone
-----------------------------
Title: President
----------------------------------
SOMANTA PHARMACEUTICALS, INC.
By: /s/ PASQUALE CATIZONE
-------------------------------------
Print Name: Pasquale Catizone
-----------------------------
Title: President
----------------------------------
Appendix A - Page 6
APPENDIX B
DELAWARE NEWCO CERTIFICATE OF INCORPORATION
CERTIFICATE OF INCORPORATION
OF
SOMANTA PHARMACEUTICALS, INC.
The undersigned, a natural person (the "Sole Incorporator") for the
purpose of organizing a corporation to conduct the business and promote the
purposes hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware hereby certifies that:
ARTICLE I
The name of this corporation is Somanta Pharmaceuticals, Inc. (the
"Corporation").
ARTICLE II
The address of the registered office of this Corporation in the State of
Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County
of New Castle, and the name of the registered agent of the Corporation in the
State of Delaware is Corporation Service Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the Delaware General Corporation
Law ("DGCL").
ARTICLE IV
(A) Classes of Stock. The Corporation is authorized to issue two classes
of stock to be designated, respectively, "Common Stock" and "Preferred Stock."
The total number of shares which the Corporation is authorized to issue is One
Hundred Twenty Million (120,000,000) shares, each with a par value of $0.001 per
share. One Hundred Million (100,000,000) shares shall be Common Stock and Twenty
Million (20,000,000) shares shall be Preferred Stock.
(B) Rights, Preferences and Restrictions of Preferred Stock. The
Preferred Stock authorized by this Certificate of Incorporation may be issued in
one or more series. The Board of Directors of the Corporation (the "Board of
Directors") is authorized to determine, alter or eliminate any or all of the
rights, preferences, privileges and restrictions granted to or imposed upon any
series of Preferred Stock, and to fix, alter, or reduce the number of shares
comprising any such series (but not below the number of such shares then
outstanding) and the designation thereof, or any of them, and to provide for
rights and terms of redemption or conversion of the shares of any such series in
accordance with the DGCL.
(C) Rights, Preferences and Restrictions of Common Stock. The rights,
preferences, privileges, and restrictions granted to and imposed on the Common
Stock are as set forth below in this Article IV(C).
1. Dividend Rights. Subject to the prior rights of holders of all
classes of stock at the time outstanding having prior rights as to dividends,
the holders of the Common Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of any assets of the Corporation legally
available therefor, such dividends as may be declared from time to time by the
Board of Directors.
Appendix B - Page 1
2. Redemption. The Common Stock is not redeemable.
3. Voting Rights. Each holder of Common Stock shall have the
right to one vote per share of Common Stock.
ARTICLE V
(A) Amendment of Bylaws. The Board of Directors is expressly empowered
to adopt, amend or repeal the Bylaws. Any adoption, amendment or repeal of the
Bylaws by the Board of Directors shall require the approval of a majority of the
total number of authorized directors (whether or not there exist any vacancies
in previously authorized directorships at the time any resolution providing for
adoption, amendment or repeal is present to the Board of Directors). The
stockholders shall also have power to adopt, amend or repeal the Bylaws. Any
adoption, amendment or repeal of bylaws by the stockholders shall require, in
addition to any vote of the holders of any class or series of stock of the
Corporation required by law or by this Certificate of Incorporation, the
affirmative vote of the holders of at least sixty-six and two-thirds percent (66
2/3%) of the voting power of all of the then outstanding shares of the capital
stock of the Corporation entitled to vote generally in election of directors,
voting together as a single class.
(B) Special Meetings. Subject to applicable law, Special Meetings of
stockholders of the Corporation may be called only by the Board or Directors
pursuant to a resolution adopted by a majority of the total number of authorized
directors (whether or not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the Board of
Directors for adoption), and shall be held at such place, on such date, and at
such time as the Board of Directors shall fix.
ARTICLE VI
The number of directors constituting the entire Board of Directors shall
be as set forth in or determined pursuant to the Bylaws of the Corporation.
Subject to the rights of the holders of any series of Preferred Stock then
outstanding and applicable law, newly created directorships resulting from any
increase in the authorized number of directors or any vacancies in the Board of
Directors resulting from death, resignation or other cause (other than removal
from office by a vote of the stockholders) may be filled only by a majority vote
of the directors then in office, though less than a quorum, and directors so
chosen shall hold office for a term expiring at the next annual meeting of
stockholders at which the term of office of the class to which they have been
elected expires, and until their respective successors are elected, except in
the case of the death, resignation, or removal of any director. No decrease in
the number of directors constituting the Board of Directors shall shorten the
term of any incumbent director.
ARTICLE VII
Whenever a compromise or arrangement is proposed between this Corporation
and its creditors or any class of them and/or between this Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of this
Corporation or any creditor or stockholder thereof or on the application of any
receiver or receivers appointed for this Corporation under the provisions of
section 291 of Title 8 if the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this Corporation under
the provisions of section 279 of Title 8 of the Delaware Code, order a meeting
of creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in such a
Appendix B - Page 2
manner as such Court directs. If a majority in number representing three-fourths
in value of the creditors or class of creditors, and/or of the stockholders or
class of stockholders of this Corporation, as the case may be, agree to any
compromise or arrangement and to any reorganization of this Corporation as a
consequence of such compromise or arrangement, such compromise or arrangement
and such reorganization shall, if sanctioned by the Court to which such
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of this
Corporation, as the case may be, and also on this Corporation.
ARTICLE VIII
(A) Indemnification. To the fullest extent permitted by law, the
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative by reason
of the fact that he or she is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), liability, loss, judgment, fines and amounts paid in settlement actually
and reasonably incurred by him or her in connection with such action, suit or
proceeding if he or she acted in good faith and in manner reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceedings, had no reasonable cause to believe his or
her conduct was unlawful. The termination of any action, upon a plea of nolo
contendere or equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect of any criminal action or proceeding, had reasonable cause to
believe that his or her conduct was unlawful.
(B) Undertaking. Such indemnity shall inure to the benefit of the heirs,
executors and administrators of any such person so indemnified pursuant to this
Article. The right to indemnification under this Article shall be a contract
right and shall include, with respect to directors and officers, the right to be
paid by the Corporation the expenses incurred in defending any such proceeding
in advance of its disposition; provided however, that, if the DGCL requires, the
payment of such expenses incurred by a director or officer in advance of the
final disposition of a proceeding shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such director or officer, to
repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Article or
otherwise. The Corporation may, by action of its Board of Directors, pay such
expenses incurred by employees and agents of the Corporation upon such terms as
the Board of Directors deems appropriate. Such indemnification and advancement
of expenses shall be in addition to any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any law,
Bylaw, agreement, vote of stockholders, or otherwise.
(C) Insurance. The Corporation may, to the fullest extent permitted by
applicable law, at any time without further stockholder approval, purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation or is or was serving at the request of the
Corporation as director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred by such person in any such capacity,
or arising out of such person's status as such, whether or not the Corporation
would have the power to indemnify such person against such liability under
applicable law.
(D) Prospective Repeal or Amendment. Any repeal or amendment of this
Article by the stockholders of the Corporation or by changes in applicable law
shall, to the extent permitted by applicable law, be prospective only, and shall
not adversely affect any right to indemnification or advancement of expenses of
Appendix B - Page 3
a director or officer of the Corporation existing at the time of such repeal or
amendment. In addition to the foregoing, the right to indemnification and
advancement of expenses shall be to the fullest extent permitted by the DGCL or
any other applicable law and all amendments to such laws as hereafter enacted
from time to time.
ARTICLE IX
No director of the Corporation shall have any personal liability to the
Corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that this provision eliminating
such personal liability of a director shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
ss.174 of the DGCL, or (iv) for any transaction from which the director derived
an improper personal benefit. If the DGCL is amended to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of a director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the DGCL as so amended.
ARTICLE X
All of the powers of this Corporation, insofar as the same may be lawfully
vested by this Certificate of Incorporation in the Board of Directors, are
hereby conferred upon the Board of Directors of this Corporation.
ARTICLE XI
The election of directors need not be by written ballot.
ARTICLE XII
The Corporation reserves the right to amend or repeal any provision
contained in this Certificate of Incorporation in the manner prescribed by the
laws of the State of Delaware and all rights conferred upon stockholders are
granted subject to this reservation; provided, however, that, not withstanding
any other provisions of this Certificate of Incorporation or any provision of
law which might otherwise permit a lesser vote or no vote, but in addition to
any vote of the holders of any class or series of the stock of this Corporation
required by law or by this Certificate of Incorporation, the affirmative vote of
the holders of at least 66 2/3% of the voting power of all of the then
outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, shall
be required to amend or repeal this Article XII, Article V, Article VI, Article
VIII or Article IX.
ARTICLE XIII
The name and address of the Sole Incorporator is as follows:
Adam Lenain
402 West Broadway, Suite 2300
San Diego, CA 92101
[Remainder of Page Intentionally Left Blank]
Appendix B - Page 4
In Witness Whereof, this Certificate has been subscribed this 27th day of
September, 2005 by the undersigned who affirms that the statements made herein
are true and correct.
-------------------------------------
Adam Lenain
Sole Incorporator
Appendix B - Page 5
EXHIBIT C
DELAWARE NEWCO BYLAWS
BYLAWS
OF
SOMANTA PHARMACEUTICALS, INC.
__________________________________________________
(A DELAWARE CORPORATION)
TABLE OF CONTENTS
Page
ARTICLE I OFFICES..............................................................1
Section 1. Registered Office...................................1
Section 2. Other Offices.......................................1
ARTICLE II CORPORATE SEAL......................................................1
Section 3. Corporate Seal......................................1
ARTICLE III STOCKHOLDERS' MEETINGS.............................................1
Section 4. Place of Meetings...................................1
Section 5. Annual Meeting......................................1
Section 6. Special Meetings....................................3
Section 7. Notice of Meetings..................................4
Section 8. Quorum..............................................4
Section 9. Adjournment and Notice of Adjourned Meetings........5
Section 10. Voting Rights.......................................5
Section 11. Joint Owners of Stock...............................6
Section 12. List of Stockholders................................6
Section 13. Action Without Meeting..............................6
Section 14. Organization........................................7
ARTICLE IV DIRECTORS...........................................................8
Section 15. Number and Term of Office...........................8
Section 16. Powers..............................................8
Section 17. Term of Directors...................................8
Section 18. Vacancies..........................................10
Section 19. Resignation........................................10
Section 20. Removal............................................10
Section 21. Meetings...........................................11
(a) Regular Meetings...................................11
(b) Special Meetings...................................11
(c) Meetings by Electronic Communications Equipment....11
(d) Notice of Special Meetings.........................11
(e) Waiver of Notice...................................12
Section 22. Quorum and Voting..................................12
Section 23. Action Without Meeting.............................12
Section 24. Fees and Compensation..............................12
Section 25. Committees.........................................13
(a) Executive Committee................................13
(b) Other Committees...................................13
(c) Term...............................................13
(d) Meetings...........................................13
Section 26. Organization.......................................14
i
ARTICLE V OFFICERS............................................................14
Section 27. Officers Designated................................14
Section 28. Tenure and Duties of Officers......................14
(a) General............................................15
(b) Duties of Chairman of the Board of Directors.......15
(c) Duties of President................................15
(d) Duties of Vice Presidents..........................15
(e) Duties of Secretary................................15
(f) Duties of Chief Financial Officer..................16
Section 29. Delegation of Authority............................16
Section 30. Resignations.......................................16
Section 31. Removal............................................16
ARTICLE VI EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES OWNED
BY THE CORPORATION...................................................16
Section 32. Execution of Corporate Instruments.................17
Section 33. Voting of Securities Owned by the Corporation......17
ARTICLE VII SHARES OF STOCK...................................................17
Section 34. Form and Execution of Certificates.................17
Section 35. Lost Certificates..................................18
Section 36. Transfers..........................................18
Section 37. Fixing Record Dates................................18
Section 38. Registered Stockholders............................19
ARTICLE VIII OTHER SECURITIES OF THE CORPORATION..............................19
Section 39. Execution of Other Securities......................19
ARTICLE IX DIVIDENDS..........................................................20
Section 40. Declaration of Dividends...........................20
Section 41. Dividend Reserve...................................20
ARTICLE X FISCAL YEAR.........................................................20
Section 42. Fiscal Year........................................20
ARTICLE XI INDEMNIFICATION....................................................21
Section 43. Indemnification of Directors, Officers, Employees
and Other Agents...................................21
(a) Directors and Officers.............................21
(b) Employees and Other Agents.........................21
(c) Expenses...........................................21
(d) Enforcement........................................22
(e) Non-Exclusivity of Rights..........................22
(f) Survival of Rights.................................23
(g) Insurance..........................................23
(h) Amendments.........................................23
(i) Saving Clause......................................23
ii
(j) Certain Definitions................................23
ARTICLE XII NOTICES...........................................................24
Section 44. Notices............................................24
(a) Notice to Stockholders.............................24
(b) Notice to Directors................................24
(c) Affidavit of Mailing...............................25
(d) Methods of Notice..................................25
(e) Notice to Person with Whom Communication Is
Unlawful...........................................25
ARTICLE XIII AMENDMENTS.......................................................25
Section 45. Amendments.........................................25
ARTICLE XIV MISCELLANEOUS.....................................................25
Section 46. Annual Report......................................25
iii
BYLAWS
OF
SOMANTA PHARMACEUTICALS, INC.
(A DELAWARE CORPORATION)
ARTICLE I
OFFICES
Section 1. Registered Office The registered office of the
corporation in the State of Delaware shall be in the City of Wilmington, County
of New Castle. (Del. Code Ann., tit. 8, ss. 131)
Section 2. Other Offices The corporation shall also have and
maintain an office or principal place of business at such place as may be fixed
by the Board of Directors, and may also have offices at such other places, both
within and without the State of Delaware, as the Board of Directors may from
time to time determine or the business of the corporation may require. (Del.
Code Ann., tit. 8, ss. 122(8))
ARTICLE II
CORPORATE SEAL
Section 3. Corporate Seal The Board of Directors may adopt a
corporate seal. The corporate seal shall consist of a die bearing the name of
the corporation and the inscription, "Corporate Seal-Delaware." Said seal may be
used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise. (Del. Code Ann., tit. 8, ss. 122(3))
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 4. Place of Meetings Meetings of the stockholders of the
corporation may be held at such place, either within or without the State of
Delaware, as may be determined from time to time by the Board of Directors. The
Board of Directors may, in its sole discretion, determine that the meeting shall
not be held at any place, but may instead be held solely by means of remote
communication as provided under the Delaware General Corporation Law ("DGCL").
(Del. Code Ann., tit. 8, ss. 211(a))
Section 5. Annual Meeting
(a) The annual meeting of the stockholders of the
corporation, for the purpose of election of directors and for such other
business as may lawfully come before it, shall be held on such date and at such
time as may be designated from time to time by the Board of Directors.
Nominations of persons for election to the Board of Directors of the corporation
and the proposal of business to be considered by the stockholders may be made at
an annual meeting of stockholders: (i) pursuant to the corporation's notice of
meeting of stockholders; (ii) by or at the direction of the Board of Directors;
or (iii) by any stockholder of the corporation who was a stockholder of record
at the time of giving of notice provided for in the following paragraph, who is
Appendix C - Page 1
entitled to vote at the meeting and who complied with the notice procedures set
forth in Section 5. (Del. Code Ann., tit. 8, ss. 211(b)).
(b) At an annual meeting of the stockholders, only such
business shall be conducted as shall have been properly brought before the
meeting. For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (iii) of Section 5(a) of
these Bylaws, (i) the stockholder must have given timely notice thereof in
writing to the Secretary of the corporation, (ii) such other business must be a
proper matter for stockholder action under the DGCL, (iii) if the stockholder,
or the beneficial owner on whose behalf any such proposal or nomination is made,
has provided the corporation with a Solicitation Notice (as defined in this
Section 5(b)), such stockholder or beneficial owner must, in the case of a
proposal, have delivered a proxy statement and form of proxy to holders of at
least the percentage of the corporation's voting shares required under
applicable law to carry any such proposal, or, in the case of a nomination or
nominations, have delivered a proxy statement and form of proxy to holders of a
percentage of the corporation's voting shares reasonably believed by such
stockholder or beneficial owner to be sufficient to elect the nominee or
nominees proposed to be nominated by such stockholder, and must, in either case,
have included in such materials the Solicitation Notice, and (iv) if no
Solicitation Notice relating thereto has been timely provided pursuant to this
section, the stockholder or beneficial owner proposing such business or
nomination must not have solicited a number of proxies sufficient to have
required the delivery of such a Solicitation Notice under this Section 5. To be
timely, a stockholder's notice shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the close of
business on the ninetieth (90th) day nor earlier than the close of business on
the one hundred twentieth (120th) day prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event that the
date of the annual meeting is advanced more than thirty (30) days prior to or
delayed by more than thirty (30) days after the anniversary of the preceding
year's annual meeting, notice by the stockholder to be timely must be so
delivered not earlier than the close of business on the one hundred twentieth
(120th) day prior to such annual meeting and not later than the close of
business on the later of the ninetieth (90th) day prior to such annual meeting
or the tenth (10th) day following the day on which public announcement of the
date of such meeting is first made. In no event shall the public announcement of
an adjournment of an annual meeting commence a new time period for the giving of
a stockholder's notice as described above. Such stockholder's notice shall set
forth: (A) as to each person whom the stockholder proposed to nominate for
election or reelection as a director all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
directors in an election contest, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(the "1934 Act") and Rule 14a-4(d) thereunder (including such person's written
consent to being named in the proxy statement as a nominee and to serving as a
director if elected); (B) as to any other business that the stockholder proposes
to bring before the meeting, a brief description of the business desired to be
brought before the meeting, the reasons for conducting such business at the
meeting and any material interest in such business of such stockholder and the
beneficial owner, if any, on whose behalf the proposal is made; and (C) as to
the stockholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (i) the name and address of such
stockholder, as they appear on the corporation's books, and of such beneficial
owner, (ii) the class and number of shares of the corporation which are owned
beneficially and of record by such stockholder and such beneficial owner, and
(iii) whether either such stockholder or beneficial owner intends to deliver a
proxy statement and form of proxy to holders of, in the case of the proposal, at
Appendix C - Page 2
least the percentage of the corporation's voting shares required under
applicable law to carry the proposal or, in the case of a nomination or
nominations, a sufficient number of holders of the corporation's voting shares
to elect such nominee or nominees (an affirmative statement of such intent, a
"Solicitation Notice").
(c) Notwithstanding anything in the second sentence of
Section 5(b) of these Bylaws to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the Corporation is
increased and there is no public announcement naming all of the nominees for
director or specifying the size of the increased Board of Directors made by the
corporation at least one hundred (100) days prior to the first anniversary of
the preceding year's annual meeting, a stockholder's notice required by this
Section 5 shall also be considered timely, but only with respect to nominees for
any new positions created by such increase, if it shall be delivered to the
Secretary at the principal executive offices of the corporation not later than
the close of business on the tenth (10th) day following the day on which such
public announcement is first made by the corporation.
(d) Only such persons who are nominated in accordance with
the procedures set forth in this Section 5 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of stockholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 5. Except as otherwise provided by law, the Chairman
of the meeting shall have the power and duty to determine whether a nomination
or any business proposed to be brought before the meeting was made, or proposed,
as the case may be, in accordance with the procedures set forth in these Bylaws
and, if any proposed nomination or business is not in compliance with these
Bylaws, to declare that such defective proposal or nomination shall not be
presented for stockholder action at the meeting and shall be disregarded.
(e) Notwithstanding the foregoing provisions of this Section
5, in order to include information with respect to a stockholder proposal in the
proxy statement and form of proxy for a stockholders' meeting, stockholders must
provide notice as required by the regulations promulgated under the 1934 Act.
Nothing in these Bylaws shall be deemed to affect any rights of stockholders to
request inclusion of proposals in the corporation proxy statement pursuant to
Rule 14a-8 under the 1934 Act.
(f) For purposes of this Section 5, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the 1934 Act.
Section 6. Special Meetings
(a) Special meetings of the stockholders of the corporation
may be called, for any purpose or purposes, by the Board of Directors pursuant
to a resolution adopted by a majority of the total number of authorized
directors (whether or not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the Board of
Directors for adoption) and shall be held at such place, on such date, and at
such time as the Board of Directors shall fix.
Appendix C - Page 3
(b) If a special meeting is properly called by any person or
persons other than the Board of Directors, the request shall be in writing,
specifying the general nature of the business proposed to be transacted, and
shall be delivered personally or sent by certified or registered mail, return
receipt requested, or by telegraphic or other facsimile transmission to the
Chairman of the Board of Directors, the Chief Executive Officer, or the
Secretary of the corporation. No business may be transacted at such special
meeting otherwise than specified in such notice. The Board of Directors shall
determine the time and place of such special meeting, which shall be held not
less than thirty-five (35) nor more than one hundred twenty (120) days after the
date of the receipt of the request. Upon determination of the time and place of
the meeting, the officer receiving the request shall cause notice to be given to
the stockholders entitled to vote, in accordance with the provisions of Section
7 of these Bylaws. Nothing contained in this paragraph (b) shall be construed as
limiting, fixing, or affecting the time when a meeting of stockholders called by
action of the Board of Directors may be held.
Section 7. Notice of Meetings Except as otherwise provided by law,
notice, given in writing or by electronic transmission, of each meeting of
stockholders shall be given not less than ten (10) nor more than sixty (60) days
before the date of the meeting to each stockholder entitled to vote at such
meeting, such notice to specify the place, if any, date and hour, in the case of
special meetings, the purpose or purposes of the meeting, and the means of
remote communications, if any, by which stockholders and proxyholders may be
deemed to be present in person and vote at any such meeting. If mailed, notice
is given when deposited in the United States mail, postage prepaid, directed to
the stockholder at such stockholder's address as it appears on the records of
the corporation. Notice of the time, place, if any, and purpose of any meeting
of stockholders may be waived in writing, signed by the person entitled to
notice thereof or by electronic transmission by such person, either before or
after such meeting, and will be waived by any stockholder by his attendance
thereat in person, by remote communication, if applicable, or by proxy, except
when the stockholder attends a meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Any stockholder so waiving notice of
such meeting shall be bound by the proceedings of any such meeting in all
respects as if due notice thereof had been given. (Del. Code Ann., tit. 8,
ss.ss. 222, 229, 232)
Section 8. Quorum At all meetings of stockholders, except where
otherwise provided by statute or by the Certificate of Incorporation, or by
these Bylaws, the presence, in person, by remote communication, if applicable,
or by proxy duly authorized, of the holders of a majority of the outstanding
shares of stock entitled to vote shall constitute a quorum for the transaction
of business. In the absence of a quorum, any meeting of stockholders may be
adjourned, from time to time, either by the chairman of the meeting or by vote
of the holders of a majority of the shares represented thereat, but no other
business shall be transacted at such meeting. The stockholders present at a duly
called or convened meeting, at which a quorum is present, may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum. Except as otherwise provided by
statute, or by the Certificate of Incorporation or these Bylaws, in all matters
other than the election of directors, the affirmative vote of a majority of
shares present in person, by remote communication, if applicable, or represented
by proxy duly authorized at the meeting and entitled to vote generally on the
subject matter shall be the act of the stockholders. Except as otherwise
provided by statute, the Certificate of Incorporation or these Bylaws, directors
Appendix C - Page 4
shall be elected by a plurality of the votes of the shares present in person, by
remote communication, if applicable, or represented by proxy duly authorized at
the meeting and entitled to vote generally on the election of directors. Where a
separate vote by a class or classes or series is required, except where
otherwise provided by the statute or by the Certificate of Incorporation or
these Bylaws, a majority of the outstanding shares of such class or classes or
series, present in person, by remote communication, if applicable, or
represented by proxy duly authorized, shall constitute a quorum entitled to take
action with respect to that vote on that matter. Except where otherwise provided
by statute or by the Certificate of Incorporation or these Bylaws, the
affirmative vote of the majority (plurality, in the case of the election of
directors) of shares of such class or classes or series present in person, by
remote communication, if applicable, or represented by proxy at the meeting
shall be the act of such class or classes or series. (Del. Code Ann., tit. 8,
ss. 216)
Section 9. Adjournment and Notice of Adjourned Meetings Any meeting
of stockholders, whether annual or special, may be adjourned from time to time
either by the chairman of the meeting or by the vote of a majority of the shares
present in person, by remote communication, if applicable, or represented by
proxy. When a meeting is adjourned to another time or place, if any, notice need
not be given of the adjourned meeting if the time and place, if any, thereof are
announced at the meeting at which the adjournment is taken. At the adjourned
meeting, the corporation may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than thirty
(30) days or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting. (Del. Code Ann., tit. 8,
ss. 222(c))
Section 10. Voting Rights For the purpose of determining those
stockholders entitled to vote at any meeting of the stockholders, except as
otherwise provided by law, only persons in whose names shares stand on the stock
records of the corporation on the record date, as provided in Section 12 of
these Bylaws, shall be entitled to vote at any meeting of stockholders. Every
person entitled to vote or execute consents shall have the right to do so either
in person, by remote communication, if applicable, or by an agent or agents
authorized by a proxy granted in accordance with Delaware law. An agent so
appointed need not be a stockholder. No proxy shall be voted after three (3)
years from its date of creation unless the proxy provides for a longer period.
(Del. Code Ann., tit. 8, ss.ss. 211(e), 212(b))
Section 11. Joint Owners of Stock If shares or other securities
having voting power stand of record in the names of two (2) or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
tenants by the entirety, or otherwise, or if two (2) or more persons have the
same fiduciary relationship respecting the same shares, unless the Secretary is
given written notice to the contrary and is furnished with a copy of the
instrument or order appointing them or creating the relationship wherein it is
so provided, their acts with respect to voting shall have the following effect:
(a) if only one (1) votes, his act binds all; (b) if more than one (1) votes,
the act of the majority so voting binds all; (c) if more than one (1) votes, but
the vote is evenly split on any particular matter, each faction may vote the
securities in question proportionally, or may apply to the Delaware Court of
Chancery for relief as provided in the DGCL, Section 217(b). If the instrument
Appendix C - Page 5
filed with the Secretary shows that any such tenancy is held in unequal
interests, a majority or even-split for the purpose of subsection (c) shall be a
majority or even-split in interest. (Del. Code Ann., tit. 8, ss. 217(b))
Section 12. List of Stockholders The Secretary shall prepare and
make, at least ten (10) days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at said meeting, arranged in
alphabetical order, showing the address of each stockholder and the number of
shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting, on a
reasonably accessible electronic network, provided that the information required
to gain access to such list is provided with the notice of the meeting, or
during ordinary business hours, at the principal place of business of the
corporation. In the event that the corporation determines to make the list
available on an electronic network, the corporation may take reasonable steps to
ensure that such information is available only to stockholders of the
corporation. The list shall be open to examination of any stockholder during the
time of the meeting as provided by law. (Del. Code Ann., tit. 8, ss. 219)
Section 13. Action Without Meeting
(a) Unless otherwise provided in the Certificate of
Incorporation, any action required by statute to be taken at any annual or
special meeting of the stockholders, or any action which may be taken at any
annual or special meeting of the stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, or by
electronic transmission setting forth the action so taken, shall be signed by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. (Del. Code
Ann., tit. 8, ss. 228)
(b) Every written consent or electronic transmission shall
bear the date of signature of each stockholder who signs the consent, and no
written consent or electronic transmission shall be effective to take the
corporate action referred to therein unless, within sixty (60) days of the
earliest dated consent delivered to the corporation in the manner herein
required, written consents or electronic transmissions signed by a sufficient
number of stockholders to take action are delivered to the corporation by
delivery to its registered office in the State of Delaware, its principal place
of business or an officer or agent of the corporation having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery made to
a corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. (Del. Code Ann., tit. 8, ss. 228)
(c) Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing or by electronic transmission and
who, if the action had been taken at a meeting, would have been entitled to
notice of the meeting if the record date for such meeting had been the date that
written consents signed by a sufficient number of stockholders to take action
were delivered to the corporation as provided in Section 228(c) of the DGCL. If
the action which is consented to is such as would have required the filing of a
certificate under any section of the DGCL if such action had been voted on by
stockholders at a meeting thereof, then the certificate filed under such section
Appendix C - Page 6
shall state, in lieu of any statement required by such section concerning any
vote of stockholders, that written consent has been given in accordance with
Section 228 of the DGCL.
(d) A telegram, cablegram or other electronic transmission
consenting to an action to be taken and transmitted by a stockholder or
proxyholder, shall be deemed to be written, signed and dated for the purposes of
this section, provided that any such telegram, cablegram or other electronic
transmission sets forth or is delivered with information from which the
corporation can determine (i) that the telegram, cablegram or other electronic
transmission was transmitted by the stockholder or proxyholder or by a person or
persons authorized to act for the stockholder and (ii) the date on which such
stockholder or proxyholder or authorized person or persons transmitted such
telegram, cablegram or electronic transmission. The date on which such telegram,
cablegram or electronic transmission is transmitted shall be deemed to be the
date on which such consent was signed. No consent given by telegram, cablegram
or other electronic transmission shall be deemed to have been delivered until
such consent is reproduced in paper form and until such paper form shall be
delivered to the corporation by delivery to its registered office in the state
of Delaware, its principal place of business or an officer or agent of the
corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to a corporation's registered office
shall be made by hand or by certified or registered mail, return receipt
requested. Notwithstanding the foregoing limitations on delivery, consents given
by telegram, cablegram or other electronic transmission may be otherwise
delivered to the principal place of business of the corporation or to an officer
or agent of the corporation having custody of the book in which proceedings of
meetings of stockholders are recorded if, to the extent and in the manner
provided by resolution of the board of directors of the corporation. Any copy,
facsimile or other reliable reproduction of a consent in writing may be
substituted or used in lieu of the original writing for any and all purposes for
which the original writing could be used, provided that such copy, facsimile or
other reproduction shall be a complete reproduction of the entire original
writing. (Del. Code Ann., tit. 8 ss. 228(d))
Section 14. Organization
(a) At every meeting of stockholders, the Chairman of the
Board of Directors, or, if a Chairman has not been appointed or is absent, the
President, or, if the President is absent, a chairman of the meeting chosen by a
majority in interest of the stockholders entitled to vote, present in person or
by proxy, shall act as chairman. The Secretary, or, in his absence, an Assistant
Secretary directed to do so by the President, shall act as secretary of the
meeting.
(b) The Board of Directors of the corporation shall be
entitled to make such rules or regulations for the conduct of meetings of
stockholders as it shall deem necessary, appropriate or convenient. Subject to
such rules and regulations of the Board of Directors, if any, the chairman of
the meeting shall have the right and authority to prescribe such rules,
regulations and procedures and to do all such acts as, in the judgment of such
chairman, are necessary, appropriate or convenient for the proper conduct of the
meeting, including, without limitation, establishing an agenda or order of
business for the meeting, rules and procedures for maintaining order at the
meeting and the safety of those present, limitations on participation in such
meeting to stockholders of record of the corporation and their duly authorized
and constituted proxies and such other persons as the chairman shall permit,
restrictions on entry to the meeting after the time fixed for the commencement
thereof, limitations on the time allotted to questions or comments by
Appendix C - Page 7
participants and regulation of the opening and closing of the polls for
balloting on matters which are to be voted on by ballot. The date and time of
the opening and closing of the polls for each matter upon which the stockholders
will vote at the meeting shall be announced at the meeting. Unless and to the
extent determined by the Board of Directors or the chairman of the meeting,
meetings of stockholders shall not be required to be held in accordance with
rules of parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. Number and Term of Office The authorized number of
directors of the corporation shall be fixed by the Board of Directors from time
to time. Directors need not be stockholders unless so required by the
Certificate of Incorporation. If for any cause, the directors shall not have
been elected at an annual meeting, they may be elected as soon thereafter as
convenient. (Del. Code Ann., tit. 8, ss.ss. 141(b), 211(b), (c))
Section 16. Powers The powers of the corporation shall be exercised,
its business conducted and its property controlled by the Board of Directors,
except as may be otherwise provided by statute or by the Certificate of
Incorporation. (Del. Code Ann., tit. 8, ss. 141(a))
Section 17. Term of Directors
(a) Subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specified circumstances,
directors shall be elected at each annual meeting of stockholders for a term of
one year. Each director shall serve until his successor is duly elected and
qualified or until his death, resignation or removal. No decrease in the number
of directors constituting the Board of Directors shall shorten the term of any
incumbent director.
(b) No person entitled to vote at an election for directors
may cumulate votes to which such person is entitled, unless, at the time of such
election, the corporation is subject to Section 2115(b) of the CGCL. During such
time or times that the corporation is subject to Section 2115(b) of the CGCL,
every stockholder entitled to vote at an election for directors may cumulate
such stockholder's votes and give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of votes to which
such stockholder's shares are otherwise entitled, or distribute the
stockholder's votes on the same principle among as many candidates as such
stockholder thinks fit. No stockholder, however, shall be entitled to so
cumulate such stockholder's votes unless (i) the names of such candidate or
candidates have been placed in nomination prior to the voting and (ii) the
stockholder has given notice at the meeting, prior to the voting, of such
stockholder's intention to cumulate such stockholder's votes. If any stockholder
has given proper notice to cumulate votes, all stockholders may cumulate their
votes for any candidates who have been properly placed in nomination. Under
cumulative voting, the candidates receiving the highest number of votes, up to
the number of directors to be elected, are elected.
Appendix C - Page 8
Section 18. Vacancies
(a) Unless otherwise provided in the Certificate of
Incorporation, and subject to the rights of the holders of any series of
Preferred Stock, any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other causes and any newly created
directorships resulting from any increase in the number of directors shall,
unless the Board of Directors determines by resolution that any such vacancies
or newly created directorships shall be filled by stockholders, be filled only
by the affirmative vote of a majority of the 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 term of the director for which the vacancy was created or occurred and
until such director's successor shall have been elected and qualified. A vacancy
in the Board of Directors shall be deemed to exist under this Bylaw in the case
of the death, removal or resignation of any director. (Del. Code Ann., tit. 8,
ss. 223(a), (b)).
(b) At any time or times that the corporation is subject to
ss.2115(b) of the CGCL, if, after the filling of any vacancy, the directors then
in office who have been elected by stockholders shall constitute less than a
majority of the directors then in office, then:
(c) any holder or holders of an aggregate of five percent
(5%) or more of the total number of shares at the time outstanding having the
right to vote for those directors may call a special meeting of stockholders; or
(d) the Superior Court of the proper county shall, upon
application of such stockholder or stockholders, summarily order a special
meeting of the stockholders, to be held to elect the entire board, all in
accordance with Section 305(c) of the CGCL, the term of office of any director
shall terminate upon that election of a successor. (CGCL ss.305(c).
Section 19. Resignation Any director may resign at any time by
delivering his or her notice in writing or by electronic transmission to the
Secretary, such resignation to specify whether it will be effective at a
particular time, upon receipt by the Secretary or at the pleasure of the Board
of Directors. If no such specification is made, it shall be deemed effective at
the pleasure of the Board of Directors. When one or more directors shall resign
from the Board of Directors, effective at a future date, a majority of the
directors then in office, including those who have so resigned, shall have power
to fill such vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective, and each Director so chosen
shall hold office for the unexpired portion of the term of the Director whose
place shall be vacated and until his successor shall have been duly elected and
qualified. (Del. Code Ann., tit. 8, ss.ss. 141(b), 223(d))
Section 20. Removal
(a) Subject to any limitations imposed by applicable law
(and assuming the corporation is not subject to Section 2115 of the CGCL), the
Board of Directors or any director may be removed from office at any time (i)
with cause by the affirmative vote of the holders of a majority of the voting
power of all then-outstanding shares of capital stock of the corporation
entitled to vote generally at an election of directors or (ii) without cause by
Appendix C - Page 9
the affirmative vote of the holders of a majority of the voting power of all
then-outstanding shares of capital stock of the corporation, entitled to vote
generally at an election of directors.
(b) During such time or times that the corporation is
subject to Section 2115(b) of the CGCL, the Board of Directors or any individual
director may be removed from office at any time without cause by the affirmative
vote of the holders of at least a majority of the outstanding shares entitled to
vote on such removal; provided, however, that unless the entire Board is
removed, no individual director may be removed when the votes cast against such
director's removal, or not consenting in writing to such removal, would be
sufficient to elect that director if voted cumulatively at an election which the
same total number of votes were cast (or, if such action is taken by written
consent, all shares entitled to vote were voted) and the entire number of
directors authorized at the time of such director's most recent election were
then being elected.
Section 21. Meetings
(a) Regular Meetings Unless otherwise restricted by the
Certificate of Incorporation, regular meetings of the Board of Directors may be
held at any time or date and at any place within or without the State of
Delaware which has been designated by the Board of Directors and publicized
among all directors, either orally or in writing, including a voice-messaging
system or other system designated to record and communicate messages, facsimile,
telegraph or telex, or by electronic mail or other electronic means. No further
notice shall be required for a regular meeting of the Board of Directors. (Del.
Code Ann., tit. 8, ss. 141(g))
(b) Special Meetings Unless otherwise restricted by the
Certificate of Incorporation, special meetings of the Board of Directors may be
held at any time and place within or without the State of Delaware whenever
called by the Chairman of the Board, Chief Executive Officer or any director.
(Del. Code Ann., tit. 8, ss. 141(g))
(c) Meetings by Electronic Communications Equipment Any
member of the Board of Directors, or of any committee thereof, may participate
in a meeting by means of conference telephone or other communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting by such means shall constitute presence in person
at such meeting. (Del. Code Ann., tit. 8, ss. 141(i))
(d) Notice of Special Meetings Notice of the time and place
of all special meetings of the Board of Directors shall be orally or in writing,
by telephone, including a voice messaging system or other system or technology
designed to record and communicate messages, facsimile, telegraph or telex, or
by electronic mail or other electronic means, during normal business hours, at
least twenty-four (24) hours before the date and time of the meeting. If notice
is sent by US mail, it shall be sent by first class mail, postage prepaid at
least three (3) days before the date of the meeting. Notice of any meeting may
be waived in writing or by electronic transmission at any time before or after
the meeting and will be waived by any director by attendance thereat, except
when the director attends the meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. (Del. Code Ann., tit. 8, ss. 229)
Appendix C - Page 10
(e) Waiver of Notice The transaction of all business at any
meeting of the Board of Directors, or any committee thereof, however called or
noticed, or wherever held, shall be as valid as though had at a meeting duly
held after regular call and notice, if a quorum be present and if, either before
or after the meeting, each of the directors not present who did not receive
notice shall sign a written waiver of notice or shall waive notice by electronic
transmission. All such waivers shall be filed with the corporate records or made
a part of the minutes of the meeting. (Del. Code Ann., tit. 8, ss. 229)
Section 22. Quorum and Voting
(a) Unless the Certificate of Incorporation requires a
greater number, a quorum of the Board of Directors shall consist of a majority
of the exact number of directors fixed from time to time by the Board of
Directors in accordance with the Certificate of Incorporation; provided,
however, at any meeting, whether a quorum be present or otherwise, a majority of
the directors present may adjourn from time to time until the time fixed for the
next regular meeting of the Board of Directors, without notice other than by
announcement at the meeting. (Del. Code Ann., tit. 8, ss. 141(b))
(b) At each meeting of the Board of Directors at which a
quorum is present, all questions and business shall be determined by the
affirmative vote of a majority of the directors present, unless a different vote
be required by law, the Certificate of Incorporation or these Bylaws. (Del. Code
Ann., tit. 8, ss. 141(b))
Section 23. Action Without Meeting Unless otherwise restricted by
the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all members of the Board of
Directors or committee, as the case may be, consent thereto in writing or by
electronic transmission, and such writing or writings or transmission or
transmissions are filed with the minutes of proceedings of the Board of
Directors or committee. Such filing shall be in paper form if the minutes are
maintained in paper form and shall be in electronic form if the minutes are
maintained in electronic form. (Del. Code Ann., tit. 8, ss. 141(f))
Section 24. Fees and Compensation Directors shall be entitled to
such compensation for their services as may be approved by the Board of
Directors, including, if so approved, by resolution of the Board of Directors, a
fixed sum and expenses of attendance, if any, for attendance at each regular or
special meeting of the Board of Directors and at any meeting of a committee of
the Board of Directors. Nothing herein contained shall be construed to preclude
any director from serving the corporation in any other capacity as an officer,
agent, employee, or otherwise and receiving compensation therefor. (Del. Code
Ann., tit. 8, ss. 141(h))
Section 25. Committees
(a) Executive Committee The Board of Directors may appoint
an Executive Committee to consist of one (1) or more members of the Board of
Directors. The Executive Committee, to the extent permitted by law and provided
in the resolution of the Board of Directors shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the corporation, and may authorize the seal of the corporation to
Appendix C - Page 11
be affixed to all papers which may require it; but no such committee shall have
the power or authority in reference to (i) approving or adopting, or
recommending to the stockholders, any action or matter expressly required by the
DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or
repealing any bylaw of the corporation. (Del. Code Ann., tit. 8, ss. 141(c))
(b) Other Committees The Board of Directors may, from time
to time, appoint such other committees as may be permitted by law. Such other
committees appointed by the Board of Directors shall consist of one (1) or more
members of the Board of Directors and shall have such powers and perform such
duties as may be prescribed by the resolution or resolutions creating such
committees, but in no event shall any such committee have the powers denied to
the Executive Committee in these Bylaws. (Del. Code Ann., tit. 8, ss. 141(c))
(c) Term The Board of Directors, subject to any requirements
of any outstanding series of Preferred Stock and the provisions of subsections
(a) or (b) of this Bylaw may at any time increase or decrease the number of
members of a committee or terminate the existence of a committee. The membership
of a committee member shall terminate on the date of his death or voluntary
resignation from the committee or from the Board of Directors. The Board of
Directors may at any time for any reason remove any individual committee member
and the Board of Directors may fill any committee vacancy created by death,
resignation, removal or increase in the number of members of the committee. The
Board of Directors may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting
of the committee, and, in addition, in the absence or disqualification of any
member of a committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. (Del. Code Ann.,
tit. 8, ss.141(c))
(d) Meetings Unless the Board of Directors shall otherwise
provide, regular meetings of the Executive Committee or any other committee
appointed pursuant to this Section 25 shall be held at such times and places as
are determined by the Board of Directors, or by any such committee, and when
notice thereof has been given to each member of such committee, no further
notice of such regular meetings need be given thereafter. Special meetings of
any such committee may be held at any place which has been determined from time
to time by such committee, and may be called by any director who is a member of
such committee, upon notice to the members of such committee of the time and
place of such special meeting given in the manner provided for the giving of
notice to members of the Board of Directors of the time and place of special
meetings of the Board of Directors. Notice of any special meeting of any
committee may be waived in writing at any time before or after the meeting and
will be waived by any director by attendance thereat, except when the director
attends such special meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Unless otherwise provided by the Board of
Directors in the resolutions authorizing the creation of the committee, a
majority of the authorized number of members of any such committee shall
constitute a quorum for the transaction of business, and the act of a majority
of those present at any meeting at which a quorum is present shall be the act of
such committee. (Del. Code Ann., tit. 8, ss.ss. 141(c), 229)
Appendix C - Page 12
Section 26. Organization At every meeting of the directors, the
Chairman of the Board of Directors, or, if a Chairman has not been appointed or
is absent, the President, or if the President is absent, the most senior Vice
President, (if a director) or, in the absence of any such person, a chairman of
the meeting chosen by a majority of the directors present, shall preside over
the meeting. The Secretary, or in his absence, any Assistant Secretary directed
to do so by the President, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
Section 27. Officers Designated The officers of the corporation
shall include, if and when designated by the Board of Directors, the Chairman of
the Board of Directors, the Chief Executive Officer, the President, one or more
Vice Presidents, the Secretary, the Chief Financial Officer, the Treasurer and
the Controller, all of whom shall be elected at the annual organizational
meeting of the Board of Directors. The Board of Directors may also appoint one
or more Assistant Secretaries, Assistant Treasurers, Assistant Controllers and
such other officers and agents with such powers and duties as it shall deem
necessary. The Board of Directors may assign such additional titles to one or
more of the officers as it shall deem appropriate. Any one person may hold any
number of offices of the corporation at any one time unless specifically
prohibited therefrom by law. The salaries and other compensation of the officers
of the corporation shall be fixed by or in the manner designated by the Board of
Directors. (Del. Code Ann., tit. 8, ss.ss. 122(5), 142(a), (b))
Section 28. Tenure and Duties of Officers
(a) General All officers shall hold office at the pleasure
of the Board of Directors and until their successors shall have been duly
elected and qualified, unless sooner removed. Any officer elected or appointed
by the Board of Directors may be removed at any time by the Board of Directors.
If the office of any officer becomes vacant for any reason, the vacancy may be
filled by the Board of Directors. (Del. Code Ann., tit. 8, ss. 141(b), (e))
(b) Duties of Chairman of the Board of Directors The
Chairman of the Board of Directors, when present, shall preside at all meetings
of the stockholders and the Board of Directors. The Chairman of the Board of
Directors shall perform other duties commonly incident to the office and shall
also perform such other duties and have such other powers as the Board of
Directors shall designate from time to time. If there is no President, then the
Chairman of the Board of Directors shall also serve as the Chief Executive
Officer of the corporation and shall have the powers and duties prescribed in
paragraph (c) of this Section 28. (Del. Code Ann., tit. 8, ss. 142(a))
(c) Duties of President The President shall preside at all
meetings of the stockholders and at all meetings of the Board of Directors,
unless the Chairman of the Board of Directors has been appointed and is present.
Unless some other officer has been elected Chief Executive Officer of the
corporation, the President shall be the chief executive officer of the
corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and officers of the
corporation. The President shall perform other duties commonly incident to the
Appendix C - Page 13
office and shall also perform such other duties and have such other powers as
the Board of Directors shall designate from time to time. (Del. Code Ann., tit.
8, ss. 142(a))
(d) Duties of Vice Presidents The Vice Presidents may assume
and perform the duties of the President in the absence or disability of the
President or whenever the office of President is vacant. The Vice Presidents
shall perform other duties commonly incident to their office and shall also
perform such other duties and have such other powers as the Board of Directors
or the President shall designate from time to time. (Del. Code Ann., tit. 8, ss.
142(a))
(e) Duties of Secretary The Secretary shall attend all
meetings of the stockholders and of the Board of Directors and shall record all
acts and proceedings thereof in the minute book of the corporation. The
Secretary shall give notice in conformity with these Bylaws of all meetings of
the stockholders and of all meetings of the Board of Directors and any committee
thereof requiring notice. The Secretary shall perform all other duties provided
for in these Bylaws and other duties commonly incident to the office and shall
also perform such other duties and have such other powers as the Board of
Directors shall designate from time to time. The President may direct any
Assistant Secretary to assume and perform the duties of the Secretary in the
absence or disability of the Secretary, and each Assistant Secretary shall
perform other duties commonly incident to the office and shall also perform such
other duties and have such other powers as the Board of Directors or the
President shall designate from time to time. (Del. Code Ann., tit. 8, ss.
142(a))
(f) Duties of Chief Financial Officer The Chief Financial
Officer shall keep or cause to be kept the books of account of the corporation
in a thorough and proper manner and shall render statements of the financial
affairs of the corporation in such form and as often as required by the Board of
Directors or the President. The Chief Financial Officer, subject to the order of
the Board of Directors, shall have the custody of all funds and securities of
the corporation. The Chief Financial Officer shall perform other duties commonly
incident to his office and shall also perform such other duties and have such
other powers as the Board of Directors or the President shall designate from
time to time. The President may direct the Treasurer or any Assistant Treasurer,
or the Controller or any Assistant Controller to assume and perform the duties
of the Chief Financial Officer in the absence or disability of the Chief
Financial Officer, and each Treasurer and Assistant Treasurer and each
Controller and Assistant Controller shall perform other duties commonly incident
to the office and shall also perform such other duties and have such other
powers as the Board of Directors or the President shall designate from time to
time. (Del. Code Ann., tit. 8, ss. 142(a))
Section 29. Delegation of Authority The Board of Directors may from
time to time delegate the powers or duties of any officer to any other officer
or agent, notwithstanding any provision hereof.
Section 30. Resignations Any officer may resign at any time by
giving notice in writing or by electronic transmission notice to the Board of
Directors or to the President or to the Secretary. Any such resignation shall be
effective when received by the person or persons to whom such notice is given,
unless a later time is specified therein, in which event the resignation shall
become effective at such later time. Unless otherwise specified in such notice,
the acceptance of any such resignation shall not be necessary to make it
effective. Any resignation shall be without prejudice to the rights, if any, of
Appendix C - Page 14
the corporation under any contract with the resigning officer. (Del. Code Ann.,
tit. 8, ss. 142(b))
Section 31. Removal Any officer may be removed from office at any
time, either with or without cause, by the affirmative vote of a majority of the
directors in office at the time, or by the unanimous written consent of the
directors in office at the time, or by any committee or superior officers upon
whom such power of removal may have been conferred by the Board of Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 32. Execution of Corporate Instruments
(a) The Board of Directors may, in its discretion, determine
the method and designate the signatory officer or officers, or other person or
persons, to execute on behalf of the corporation any corporate instrument or
document, or to sign on behalf of the corporation the corporate name without
limitation, or to enter into contracts on behalf of the corporation, except
where otherwise provided by law or these Bylaws, and such execution or signature
shall be binding upon the corporation. (Del. Code Ann., tit. 8, ss.ss. 103(a),
142(a), 158)
(b) All checks and drafts drawn on banks or other
depositaries on funds to the credit of the corporation or in special accounts of
the corporation shall be signed by such person or persons as the Board of
Directors shall authorize so to do.
(c) Unless authorized or ratified by the Board of Directors
or within the agency power of an officer, no officer, agent or employee shall
have any power or authority to bind the corporation by any contract or
engagement or to pledge its credit or to render it liable for any purpose or for
any amount. (Del. Code Ann., tit. 8, ss.ss. 103(a), 142(a), 158).
Section 33. Voting of Securities Owned by the Corporation All stock
and other securities of other corporations owned or held by the corporation for
itself, or for other parties in any capacity, shall be voted, and all proxies
with respect thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such authorization,
by the Chairman of the Board of Directors, the Chief Executive Officer, the
President, or any Vice President. (Del. Code Ann., tit. 8, ss. 123)
ARTICLE VII
SHARES OF STOCK
Section 34. Form and Execution of Certificates Certificates for the
shares of stock of the corporation shall be in such form as is consistent with
the Certificate of Incorporation and applicable law. Every holder of stock in
the corporation shall be entitled to have a certificate signed by or in the name
of the corporation by the Chairman of the Board of Directors, or the President
or any Vice President and by the Treasurer or Assistant Treasurer or the
Secretary or Assistant Secretary, certifying the number of shares owned by him
in the corporation. Any or all of the signatures on the certificate may be
Appendix C - Page 15
facsimiles. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent, or registrar before such certificate is
issued, it may be issued with the same effect as if he were such officer,
transfer agent, or registrar at the date of issue. Each certificate shall state
upon the face or back thereof, in full or in summary, all of the powers,
designations, preferences, and rights, and the limitations or restrictions of
the shares authorized to be issued or shall, except as otherwise required by
law, set forth on the face or back a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, designations,
preferences and relative, participating, optional, or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Within a reasonable time after
the issuance or transfer of uncertificated stock, the corporation shall send to
the registered owner thereof a written notice containing the information
required to be set forth or stated on certificates pursuant to this section or
otherwise required by law or with respect to this section a statement that the
corporation will furnish without charge to each stockholder who so requests the
powers, designations, preferences and relative participating, optional or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights. (Del. Code Ann.,
tit. 8, ss. 158)
Section 35. Lost Certificates A new certificate or certificates
shall be issued in place of any certificate or certificates theretofore issued
by the corporation alleged to have been lost, stolen, or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen, or destroyed. The corporation may require, as a
condition precedent to the issuance of a new certificate or certificates, the
owner of such lost, stolen, or destroyed certificate or certificates, or the
owner's legal representative, to agree to indemnify the corporation in such
manner as it shall require or to give the corporation a surety bond in such form
and amount as it may direct as indemnity against any claim that may be made
against the corporation with respect to the certificate alleged to have been
lost, stolen, or destroyed. (Del. Code Ann., tit. 8, ss. 167)
Section 36. Transfers
(a) Transfers of record of shares of stock of the
corporation shall be made only upon its books by the holders thereof, in person
or by attorney duly authorized, and upon the surrender of a properly endorsed
certificate or certificates for a like number of shares. (Del. Code Ann., tit.
8, ss. 201, tit. 6, ss. 8- 401(1))
(b) The corporation shall have power to enter into and
perform any agreement with any number of stockholders of any one or more classes
of stock of the corporation to restrict the transfer of shares of stock of the
corporation of any one or more classes owned by such stockholders in any manner
not prohibited by the DGCL. (Del. Code Ann., tit. 8, ss. 160 (a))
Section 37. Fixing Record Dates
(a) In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the Board of Directors may fix, in advance, a record
date, which record date shall not precede the date upon which the resolution
Appendix C - Page 16
fixing the record date is adopted by the Board of Directors, and which record
date shall, subject to applicable law, not be more than sixty (60) nor less than
ten (10) days before the date of such meeting. If no record date is fixed by the
Board of Directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
(b) In order that the corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the Board of Directors, and which date shall not be more than ten (10) days
after the date upon which the resolution fixing the record date is adopted by
the Board of Directors. Any stockholder of record seeking to have the
stockholders authorize or take corporate action by written consent shall, by
written notice to the Secretary, request the Board of Directors to fix a record
date. The Board of Directors shall promptly, but in all events within ten (10)
days after the date on which such a request is received, adopt a resolution
fixing the record date. If no record date has been fixed by the Board of
Directors within ten (10) days of the date on which such a request is received,
the record date for determining stockholders entitled to consent to corporate
action in writing without a meeting, when no prior action by the Board of
Directors is required by applicable law, shall be the first date on which a
signed written consent setting forth the action taken or proposed to be taken is
delivered to the corporation by delivery to its registered office in the State
of Delaware, its principal place of business or an officer or agent of the
corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the Board of Directors and prior action by
the Board of Directors is required by law, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the day on which the Board of
Directors adopts the resolution taking such prior action.
(c) In order that the corporation may determine the
stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights or the stockholders entitled to exercise any rights
in respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted, and which record date shall be not more than
sixty (60) days prior to such action. If no record date is fixed, the record
date for determining stockholders for any such purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto. (Del. Code Ann., tit. 8, ss. 213)
Section 38. Registered Stockholders The corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person whether or not it shall have
Appendix C - Page 17
express or other notice thereof, except as otherwise provided by the laws of
Delaware. (Del. Code Ann., tit. 8, ss.ss. 213(a), 219)
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 39. Execution of Other Securities All bonds, debentures and
other corporate securities of the corporation, other than stock certificates
(covered in Section 34), may be signed by the Chairman of the Board of
Directors, the President or any Vice President, or such other person as may be
authorized by the Board of Directors, and the corporate seal impressed thereon
or a facsimile of such seal imprinted thereon and attested by the signature of
the Secretary or an Assistant Secretary, or the Chief Financial Officer or
Treasurer or an Assistant Treasurer; provided, however, that where any such
bond, debenture or other corporate security shall be authenticated by the manual
signature, or where permissible facsimile signature, of a trustee under an
indenture pursuant to which such bond, debenture or other corporate security
shall be issued, the signatures of the persons signing and attesting the
corporate seal on such bond, debenture or other corporate security may be the
imprinted facsimile of the signatures of such persons. Interest coupons
appertaining to any such bond, debenture or other corporate security,
authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an
Assistant Treasurer of the corporation or such other person as may be authorized
by the Board of Directors, or bear imprinted thereon the facsimile signature of
such person. In case any officer who shall have signed or attested any bond,
debenture or other corporate security, or whose facsimile signature shall appear
thereon or on any such interest coupon, shall have ceased to be such officer
before the bond, debenture or other corporate security so signed or attested
shall have been delivered, such bond, debenture or other corporate security
nevertheless may be adopted by the corporation and issued and delivered as
though the person who signed the same or whose facsimile signature shall have
been used thereon had not ceased to be such officer of the corporation.
ARTICLE IX
DIVIDENDS
Section 40. Declaration of Dividends Dividends upon the capital
stock of the corporation, subject to the provisions of the Certificate of
Incorporation and applicable law, if any, may be declared by the Board of
Directors pursuant to law at any regular or special meeting. Dividends may be
paid in cash, in property, or in shares of the capital stock, subject to the
provisions of the Certificate of Incorporation and applicable law. (Del. Code
Ann., tit. 8, ss.ss. 170, 173)
Section 41. Dividend Reserve Before payment of any dividend, there
may be set aside out of any funds of the corporation available for dividends
such sum or sums as the Board of Directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the Board of Directors shall think
conducive to the interests of the corporation, and the Board of Directors may
modify or abolish any such reserve in the manner in which it was created. (Del.
Code Ann., tit. 8, ss. 171)
Appendix C - Page 18
ARTICLE X
FISCAL YEAR
Section 42. Fiscal Year The fiscal year of the corporation shall be
fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION
Section 43. Indemnification of Directors, Officers, Employees and
Other Agents.
(a) Directors and Officers The corporation shall indemnify
its directors and officers to the fullest extent not prohibited by the DGCL or
any other applicable law; provided, however, that the corporation may modify the
extent of such indemnification by individual contracts with its directors and
officers; and, provided, further, that the corporation shall not be required to
indemnify any director or officer in connection with any proceeding (or part
thereof) initiated by such person unless (i) such indemnification is expressly
required to be made by law, (ii) the proceeding was authorized by the Board of
Directors of the corporation, (iii) such indemnification is provided by the
corporation, in its sole discretion, pursuant to the powers vested in the
corporation under the Delaware General Corporation Law or any other applicable
law or (iv) such indemnification is required to be made under subsection (d).
(b) Employees and Other Agents The corporation shall have
power to indemnify its employees and other agents as set forth in the DGCL or
any other applicable law. The Board of Directors shall have the power to
delegate the determination of whether indemnification shall be given to any such
person to such officers or other persons as the Board of Directors shall
determine.
(c) Expenses The corporation shall advance to any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he is or was a director or officer,
of the corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, prior to the final disposition of the proceeding, promptly
following request therefor, all expenses incurred by any director or officer in
connection with such proceeding, provided, however, that, if the DGCL requires,
an advancement of expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to the
corporation of an undertaking, by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal that such indemnitee is
not entitled to be indemnified for such expenses under this Section 43 or
otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant
to paragraph (e) of this Bylaw, no advance shall be made by the corporation to
an officer of the corporation (except by reason of the fact that such officer is
or was a director of the corporation, in which event this paragraph shall not
apply) in any action, suit or proceeding, whether civil, criminal,
Appendix C - Page 19
administrative or investigative, if a determination is reasonably and promptly
made (i) by a majority vote of a quorum consisting of directors who were not
parties to the proceeding, even if not a quorum, or (ii) by a committee of such
directors designated by a majority of such directors, even though less than a
quorum, or (iii) if there are no such directors, or such directors so direct, by
independent legal counsel in a written opinion, that the facts known to the
decision-making party at the time such determination is made demonstrate clearly
and convincingly that such person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of the
corporation.
(d) Enforcement Without the necessity of entering into an
express contract, all rights to indemnification and advances to directors and
officers under this Bylaw shall be deemed to be contractual rights and be
effective to the same extent and as if provided for in a contract between the
corporation and the director or officer. Any right to indemnification or
advances granted by this Bylaw to a director or officer shall be enforceable by
or on behalf of the person holding such right in any court of competent
jurisdiction if (i) the claim for indemnification or advances is denied, in
whole or in part, or (ii) no disposition of such claim is made within ninety
(90) days of request therefor. The claimant in such enforcement action, if
successful in whole or in part, shall be entitled to be paid also the expense of
prosecuting the claim. In connection with any claim for indemnification, the
corporation shall be entitled to raise as a defense to any such action that the
claimant has not met the standards of conduct that make it permissible under the
DGCL or any other applicable law for the corporation to indemnify the claimant
for the amount claimed. In connection with any claim by an officer of the
corporation (except in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such officer is or
was a director of the corporation) for advances, the corporation shall be
entitled to raise a defense as to any such action clear and convincing evidence
that such person acted in bad faith or in a manner that such person did not
believe to be in or not opposed to the best interests of the corporation, or
with respect to any criminal action or proceeding that such person acted without
reasonable cause to believe that his conduct was lawful. Neither the failure of
the corporation (including its Board of Directors, independent legal counsel or
its stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in the DGCL or
any other applicable law, nor an actual determination by the corporation
(including its Board of Directors, independent legal counsel or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that claimant has not
met the applicable standard of conduct. In any suit brought by a director or
officer to enforce a right to indemnification or to an advancement of expenses
hereunder, the burden of proving that the director or officer is not entitled to
be indemnified, or to such advancement of expenses, under this Article XI or
otherwise shall be on the corporation.
(e) Non-Exclusivity of Rights The rights conferred on any
person by this Bylaw shall not be exclusive of any other right which such person
may have or hereafter acquire under any applicable statute, provision of the
Certificate of Incorporation, Bylaws, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding office. The corporation is
specifically authorized to enter into individual contracts with any or all of
its directors, officers, employees or agents respecting indemnification and
Appendix C - Page 20
advances, to the fullest extent not prohibited by the DGCL or any other
applicable law.
(f) Survival of Rights The rights conferred on any person by
this Bylaw shall continue as to a person who has ceased to be a director,
officer, employee or other agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(g) Insurance To the fullest extent permitted by the DGCL,
or any other applicable law, the corporation, upon approval by the Board of
Directors, may purchase insurance on behalf of any person required or permitted
to be indemnified pursuant to this Bylaw.
(h) Amendments Any repeal or modification of this Bylaw
shall only be prospective and shall not affect the rights under this Bylaw in
effect at the time of the alleged occurrence of any action or omission to act
that is the cause of any proceeding against any agent of the corporation.
(i) Saving Clause If this Bylaw or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify each director and officer to the full
extent not prohibited by any applicable portion of this Bylaw that shall not
have been invalidated, or by any other applicable law. If this Section 43 shall
be invalid due to the application of the indemnification provisions of another
jurisdiction, then the corporation shall indemnify each director and officer to
the full extent under applicable law.
(j) Certain Definitions For the purposes of this Bylaw, the
following definitions shall apply:
(i) The term "proceeding" shall be broadly
construed and shall include, without limitation, the investigation, preparation,
prosecution, defense, settlement, arbitration and appeal of, and the giving of
testimony in, any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative.
(ii) The term "expenses" shall be broadly
construed and shall include, without limitation, court costs, attorneys' fees,
witness fees, fines, amounts paid in settlement or judgment and any other costs
and expenses of any nature or kind incurred in connection with any proceeding.
(iii) The term the "corporation" shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any person
who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
the provisions of this Bylaw with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
Appendix C - Page 21
(iv) References to a "director," "executive
officer," "officer," "employee," or "agent" of the corporation shall include,
without limitation, situations where such person is serving at the request of
the corporation as, respectively, a director, executive officer, officer,
employee, trustee or agent of another corporation, partnership, joint venture,
trust or other enterprise.
(v) References to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this Bylaw.
ARTICLE XII
NOTICES
Section 44. Notices
(a) Notice to Stockholders Written notice to stockholders of
stockholder meetings shall be given as provided in Section 7 herein. Without
limiting the manner by which notice may otherwise be given effectively to
stockholders under any agreement or contract with such stockholder, and except
as otherwise required by law, written notice to stockholders for purposes other
than stockholder meetings may be sent by United States mail or nationally
recognized overnight courier, or by facsimile, telegraph or telex or by
electronic mail or other electronic means. (Del. Code Ann., tit. 8, ss.ss. 222,
232)
(b) Notice to Directors Any notice required to be given to
any director may be given by the method stated in subsection (a), or as provided
for in Section 21 of these Bylaws. If such notice is not delivered personally,
it shall be sent to such address as such director shall have filed in writing
with the Secretary, or, in the absence of such filing, to the last known post
office address of such director.
(c) Affidavit of Mailing An affidavit of mailing, executed
by a duly authorized and competent employee of the corporation or its transfer
agent appointed with respect to the class of stock affected or other agent,
specifying the name and address or the names and addresses of the stockholder or
stockholders, or director or directors, to whom any such notice or notices was
or were given, and the time and method of giving the same, shall in the absence
of fraud, be prima facie evidence of the facts therein contained. (Del. Code
Ann., tit. 8, ss. 222)
(d) Methods of Notice It shall not be necessary that the
same method of giving notice be employed in respect of all recipients of notice,
but one permissible method may be employed in respect of any one or more, and
any other permissible method or methods may be employed in respect of any other
or others.
Appendix C - Page 22
(e) Notice to Person with Whom Communication Is Unlawful
Whenever notice is required to be given, under any provision of law or of the
Certificate of Incorporation or Bylaws of the corporation, to any person with
whom communication is unlawful, the giving of such notice to such person shall
not be required and there shall be no duty to apply to any governmental
authority or agency for a license or permit to give such notice to such person.
Any action or meeting which shall be taken or held without notice to any such
person with whom communication is unlawful shall have the same force and effect
as if such notice had been duly given. In the event that the action taken by the
corporation is such as to require the filing of a certificate under any
provision of the DGCL, the certificate shall state, if such is the fact and if
notice is required, that notice was given to all persons entitled to receive
notice except such persons with whom communication is unlawful.
ARTICLE XIII
AMENDMENTS
Section 45. Amendments The Board of Directors is expressly empowered
to adopt, amend or repeal Bylaws of the corporation. The stockholders shall also
have power to adopt, amend or repeal the Bylaws of the corporation; provided,
however, that, in addition to any vote of the holders of any class or series of
stock of the corporation required by law or by the Certificate of Incorporation,
the affirmative vote of the holders of at least a majority of the voting power
of all of the then-outstanding shares of the capital stock of the corporation
entitled to vote generally in the election of directors, voting together as a
single class, shall be required to adopt, amend or repeal any provision of the
Bylaws of the corporation.
ARTICLE XIV
MISCELLANEOUS
Section 46. Annual Report
(a) Subject to the provisions of paragraph (b) of this
Bylaw, the Board of Directors shall cause an annual report to be sent to each
stockholder of the corporation not later than one hundred twenty (120) days
after the close of the corporation's fiscal year. Such report shall include a
balance sheet as of the end of such fiscal year and an income statement and
statement of changes in financial position for such fiscal year, accompanied by
any report thereon of independent accounts or, if there is no such report, the
certificate of an authorized officer of the corporation that such statements
were prepared without audit from the books and records of the corporation. When
there are more than 100 stockholders of record of the corporation's shares, as
determined by Section 605 of the CGCL, additional information as required by
Section 1501(b) of the CGCL shall also be contained in such report, provided
that if the corporation has a class of securities registered under Section 12 of
the 1934 Act, the 1934 Act shall take precedence. Such report shall be sent to
stockholders at least fifteen (15) days prior to the next annual meeting of
stockholders after the end of the fiscal year to which it relates.
(b) If and so long as there are fewer than 100 holders of
record of the corporation's shares, the requirement of sending of an annual
report to the stockholders of the corporation is hereby expressly waived.
Appendix C - Page 23
APPENDIX D
14A: 11-1. Right of shareholders to dissent.
(1) Any shareholder of a domestic corporation shall have the right to
dissent from any of the following corporate actions
(a) Any plan of merger or consolidation to which the corporation is a
party, provided that, unless the certificate of incorporation otherwise provides
(i) a shareholder shall not have the right to dissent from any plan of
merger or consolidation with respect to shares
(A) of a class or series which is listed on a national securities exchange
or is held of record by not less than 1,000 holders on the record date fixed to
determine the shareholders entitled to vote upon the plan of merger or
consolidation; or
(B) for which, pursuant to the plan of merger or consolidation, he will
receive (x) cash, (y) shares, obligations or other securities which, upon
consummation of the merger or consolidation, will either be listed on a national
securities exchange or held of record by not less than 1,000 holders, or (z)
cash and such securities;
(ii) a shareholder of a surviving corporation shall not have the right to
dissent from a plan of merger, if the merger did not require for its approval
the vote of such shareholders as provided in section 14A:10-5.1 or in subsection
14A:10-3(4), 14A:10-7(2) or 14A:10-7(4);
(iii) a shareholder of a corporation shall not have the right to dissent from
a plan of merger, if the merger did not require, for its approval, the vote of
the shareholders as provided in subsection (6) of N.J.S.14A:10-3; or
(b) Any sale, lease, exchange or other disposition of all or substantially
all of the assets of a corporation not in the usual or regular course of
business as conducted by such corporation, other than a transfer pursuant to
subsection (4) of N.J.S.14A:10-11, provided that, unless the certificate of
incorporation otherwise provides, the shareholder shall not have the right to
dissent
(i) with respect to shares of a class or series which, at the record date
fixed to determine the shareholders entitled to vote upon such transaction, is
listed on a national securities exchange or is held of record by not less than
1,000 holders; or
(ii) from a transaction pursuant to a plan of dissolution of the corporation
which provides for distribution of substantially all of its net assets to
shareholders in accordance with their respective interests within one year after
the date of such transaction, where such transaction is wholly for
(A) cash; or
(B) shares, obligations or other securities which, upon consummation of the
plan of dissolution will either be listed on a national securities exchange or
held of record by not less than 1,000 holders; or
(C) cash and such securities; or
Appendix D - Page 1
(iii) from a sale pursuant to an order of a court having jurisdiction.
(2) Any shareholder of a domestic corporation shall have the right to
dissent with respect to any shares owned by him which are to be acquired
pursuant to section 14A:10-9.
(3) A shareholder may not dissent as to less than all of the shares owned
beneficially by him and with respect to which a right of dissent exists. A
nominee or fiduciary may not dissent on behalf of any beneficial owner as to
less than all of the shares of such owner with respect to which the right of
dissent exists.
(4) A corporation may provide in its certificate of incorporation that
holders of all its shares, or of a particular class or series thereof, shall
have the right to dissent from specified corporate actions in addition to those
enumerated in subsection 14A:11-1 (1), in which case the exercise of such right
of dissent shall be governed by the provisions of this Chapter.
Amended 1973, c.366, s.60; 1988, c.94, s.64; 1995, c.279, s.21; 2001, c.193,
s.3.
14A:11-2. Notice of dissent; demand for payment; endorsement of certificates
(1) Whenever a vote is to be taken, either at a meeting of shareholders or
upon written consents in lieu of a meeting pursuant to section 14A:5-6, upon a
proposed corporate action from which a shareholder may dissent under section
14A:11-1, any shareholder electing to dissent from such action shall file with
the corporation before the taking of the vote of the shareholders on such
corporate action, or within the time specified in paragraph 14A:5-6(2)(b) or
14A:5-6(2)(c), as the case may be, if no meeting of shareholders is to be held,
a written notice of such dissent stating that he intends to demand payment for
his shares if the action is taken.
(2) Within 10 days after the date on which such corporate action takes
effect, the corporation, or, in the case of a merger or consolidation, the
surviving or new corporation, shall give written notice of the effective date of
such corporate action, by certified mail to each shareholder who filed written
notice of dissent pursuant to subsection 14A:11-2(1), except any who voted for
or consented in writing to the proposed action.
(3) Within 20 days after the mailing of such notice, any shareholder to
whom the corporation was required to give such notice and who has filed a
written notice of dissent pursuant to this section may make written demand on
the corporation, or, in the case of a merger or consolidation, on the surviving
or new corporation, for the payment of the fair value of his shares.
(4) Whenever a corporation is to be merged pursuant to section 14A:10-5.1
or subsection 14A:10-7(4) and shareholder approval is not required under
subsections 14A:10-5.1(5) and 14A:10-5.1(6), a shareholder who has the right to
dissent pursuant to section 14A: 11-1 may, not later than 20 days after a copy
or summary of the plan of such merger and the statement required by subsection
14A:10-5.1(2) is mailed to such shareholder, make written demand on the
corporation or on the surviving corporation, for the payment of the fair value
of his shares.
(5) Whenever all the shares, or all the shares of a class or series, are to
be acquired by another corporation pursuant to section 14A:10-9, a shareholder
of the corporation whose shares are to be acquired may, not later than 20 days
after the mailing of notice by the acquiring corporation pursuant to paragraph
14A:10-9(3)(b), make written demand on the acquiring corporation for the payment
of the fair value of his shares.
Appendix D - Page 2
(6) Not later than 20 days after demanding payment for his shares pursuant
to this section, the shareholder shall submit the certificate or certificates
representing his shares to the corporation upon which such demand has been made
for notation thereon that such demand has been made, whereupon such certificate
or certificates shall be returned to him. If shares represented by a certificate
on which notation has been made shall be transferred, each new certificate
issued therefor shall bear similar notation, together with the name of the
original dissenting holder of such shares, and a transferee of such shares shall
acquire by such transfer no rights in the corporation other than those which the
original dissenting shareholder had after making a demand for payment of the
fair value thereof.
(7) Every notice or other communication required to be given or made by a
corporation to any shareholder pursuant to this Chapter shall inform such
shareholder of all dates prior to which action must be taken by such shareholder
in order to perfect his rights as a dissenting shareholder under this Chapter.
Amended 1973,c.366,s.61; 1988,c.94,s.65.
14A:11-3. "Dissenting shareholder" defined; date for determination of fair value
(1) A shareholder who has made demand for the payment of his shares in the
manner prescribed by subsection 14A:11-2(3), 14A:11-2(4) or 14A:11-2(5) is
hereafter in this Chapter referred to as a "dissenting shareholder."
(2) Upon making such demand, the dissenting shareholder shall cease to have
any of the rights of a shareholder except the right to be paid the fair value of
his shares and any other rights of a dissenting shareholder under this Chapter.
(3) "Fair value" as used in this Chapter shall be determined
(a) As of the day prior to the day of the meeting of shareholders at which
the proposed action was approved or as of the day prior to the day specified by
the corporation for the tabulation of consents to such action if no meeting of
shareholders was held; or
(b) In the case of a merger pursuant to section 14A:10-5.1 or subsection
14A:10-7(4) in which shareholder approval is not required, as of the day prior
to the day on which the board of directors approved the plan of merger; or
(c) In the case of an acquisition of all the shares or all the shares of a
class or series by another corporation pursuant to section 14A:10-9, as of the
day prior to the day on which the board of directors of the acquiring
corporation authorized the acquisition, or, if a shareholder vote was taken
pursuant to section 14A:10-12, as of the day provided in paragraph
14A:11-3(3)(a).
In all cases, "fair value" shall exclude any appreciation or depreciation
resulting from the proposed action.
Amended 1973,c.366,s.62; 1988,c.94,s.66.
14A:11-4. Termination of right of shareholder to be paid the fair value of his
shares
(1) The right of a dissenting shareholder to be paid the fair value of his
shares under this Chapter shall cease if
(a) he has failed to present his certificates for notation as provided by
subsection 14A:11-2(6), unless a court having jurisdiction, for good and
sufficient cause shown, shall otherwise direct;
Appendix D - Page 3
(b) his demand for payment is withdrawn with the written consent of the
corporation;
(c) the fair value of the shares is not agreed upon as provided in this
Chapter and no action for the determination of fair value by the Superior Court
is commenced within the time provided in this Chapter;
(d) the Superior Court determines that the shareholder is not entitled to
payment for his shares;
(e) the proposed corporate action is abandoned or rescinded; or
(f) a court having jurisdiction permanently enjoins or sets aside the
corporate action.
(2) In any case provided for in subsection 14A:11-4(1), the rights of the
dissenting shareholder as a shareholder shall be reinstated as of the date of
the making of a demand for payment pursuant to subsections 14A:11-2(3),
14A:11-2(4) or 14A:11-2(5) without prejudice to any corporate action which has
taken place during the interim period. In such event, he shall be entitled to
any intervening preemptive rights and the right to payment of any intervening
dividend or other distribution, or, if any such rights have expired or any such
dividend or distribution other than in cash has been completed, in lieu thereof,
at the election of the board, the fair value thereof in cash as of the time of
such expiration or completion.
14A:11-5. Rights of dissenting shareholder
(1) A dissenting shareholder may not withdraw his demand for payment of the
fair value of his shares without the written consent of the corporation.
(2) The enforcement by a dissenting shareholder of his right to receive
payment for his shares shall exclude the enforcement by such dissenting
shareholder of any other right to which he might otherwise be entitled by virtue
of share ownership, except as provided in subsection 14A:11-4(2) and except that
this subsection shall not exclude the right of such dissenting shareholder to
bring or maintain an appropriate action to obtain relief on the ground that such
corporate action will be or is ultra vires, unlawful or fraudulent as to such
dissenting shareholder.
14A:11-6. Determination of fair value by agreement
(1) Not later than 10 days after the expiration of the period within which
shareholders may make written demand to be paid the fair value of their shares,
the corporation upon which such demand has been made pursuant to subsections
14A:11-2(3), 14A:11-2(4) or 14A:11-2(5) shall mail to each dissenting
shareholder the balance sheet and the surplus statement of the corporation whose
shares he holds, as of the latest available date which shall not be earlier than
12 months prior to the making of such offer and a profit and loss statement or
statements for not less than a 12-month period ended on the date of such balance
sheet or, if the corporation was not in existence for such 12-month period, for
the portion thereof during which it was in existence. The corporation may
accompany such mailing with a written offer to pay each dissenting shareholder
for his shares at a specified price deemed by such corporation to be the fair
value thereof. Such offer shall be made at the same price per share to all
dissenting shareholders of the same class, or, if divided into series, of the
same series.
(2) If, not later than 30 days after the expiration of the 10-day period
limited by subsection 14A:11-6(1), the fair value of the shares is agreed upon
between any dissenting shareholder and the corporation, payment therefor shall
be made upon surrender of the certificate or certificates representing such
shares.
Amended by L.1973, c. 366, s. 63, eff. May 1, 1974.
Appendix D - Page 4
14A:11-7. Procedure on failure to agree upon fair value; commencement of action
to determine fair value
(1) If the fair value of the shares is not agreed upon within the 30-day
period limited by subsection 14A:11-6(2), the dissenting shareholder may serve
upon the corporation upon which such demand has been made pursuant to
subsections 14A:11-2(3), 14A:11-2(4) or 14A:11-2(5) a written demand that it
commence an action in the Superior Court for the determination of the fair value
of the shares. Such demand shall be served not later than 30 days after the
expiration of the 30-day period so limited and such action shall be commenced by
the corporation not later than 30 days after receipt by the corporation of such
demand, but nothing herein shall prevent the corporation from commencing such
action at any earlier time.
(2) If a corporation fails to commence the action as provided in subsection
14A:11-7(1), a dissenting shareholder may do so in the name of the corporation,
not later than 60 days after the expiration of the time limited by subsection
14A:11-7(1) in which the corporation may commence such an action.
14A:11-8. Action to determine fair value; jurisdiction of court; appointment of
appraiser
In any action to determine the fair value of shares pursuant to this Chapter:
(a) The Superior Court shall have jurisdiction and may proceed in the
action in a summary manner or otherwise;
(b) All dissenting shareholders, wherever residing, except those who have
agreed with the corporation upon the price to be paid for their shares, shall be
made parties thereto as an action against their shares quasi in rem;
(c) The court in its discretion may appoint an appraiser to receive
evidence and report to the court on the question of fair value, who shall have
such power and authority as shall be specified in the order of his appointment;
and
(d) The court shall render judgment against the corporation and in favor of
each shareholder who is a party to the action for the amount of the fair value
of his shares.
14A:11-9. Judgment in action to determine fair value
(1) A judgment for the payment of the fair value of shares shall be payable
upon surrender to the corporation of the certificate or certificates
representing such shares.
(2) The judgment shall include an allowance for interest at such rate as
the court finds to be equitable, from the date of the dissenting shareholder's
demand for payment under subsections 14A:11-2(3), 14A:11-2(4) or 14A:11-2(5) to
the day of payment. If the court finds that the refusal of any dissenting
shareholder to accept any offer of payment, made by the corporation under
section 14A:11-6, was arbitrary, vexatious or otherwise not in good faith, no
interest shall be allowed to him.
14A:11-10. Costs and expenses of action
The costs and expenses of bringing an action pursuant to section
14A:11-8 shall be determined by the court and shall be apportioned and assessed
as the court may find equitable upon the parties or any of them. Such expenses
shall include reasonable compensation for and reasonable expenses of the
appraiser, if any, but shall exclude the fees and expenses of counsel for and
experts employed by any party; but if the court finds that the offer of payment
Appendix D - Page 5
made by the corporation under section 14A:11-6 was not made in good faith, or if
no such offer was made, the court in its discretion may award to any dissenting
shareholder who is a party to the action reasonable fees and expenses of his
counsel and of any experts employed by the dissenting shareholder.
14A:11-11. Disposition of shares acquired by corporation
(1) The shares of a dissenting shareholder in a transaction described in
subsection 14A: 11-1 (1) shall become reacquired by the corporation which issued
them or by the surviving corporation, as the case may be, upon the payment of
the fair value of shares.
(2) (Deleted by amendment, P.L.1995, c.279.)
(3) In an acquisition of shares pursuant to section 14A:10-9 or section
14A:10-13, the shares of a dissenting shareholder shall become the property of
the acquiring corporation upon the payment by the acquiring corporation of the
fair value of such shares. Such payment may be made, with the consent of the
acquiring corporation, by the corporation which issued the shares, in which case
the shares so paid for shall become reacquired by the corporation which issued
them and shall be cancelled.
Amended 1995,c.279,s.17.
Appendix D - Page 6