pre14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant þ
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Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
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Definitive Additional Materials
Soliciting Material Pursuant to §240.14a-12 |
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offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
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NOTICE OF 2010 ANNUAL MEETING OF SHAREHOLDERS
February 28, 2011
To the Shareholders of Astrotech Corporation:
You are cordially invited to attend the Annual Meeting of Shareholders for Astrotech Corporation
(the Company or Astrotech) to be held at 401 Congress Ave, Suite 1650, Austin, TX 78701 on
April 20, 2011, at 9:00 a.m. (Central time). Information about the meeting, the nominees for
directors, and the proposals to be considered are presented in this Notice of Annual Meeting and
the proxy statement on the following pages. At the meeting, you will be asked to consider and vote
on the following matters:
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to elect six directors to the Companys Board of Directors; |
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to ratify the appointment of Ernst & Young as independent auditors for the Company; |
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to approve the Astrotech Corporation 2011 Stock Incentive Plan; |
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to approve reincorporation from Washington state to Delaware; and |
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to transact any other business properly brought before the meeting. |
The Board of Directors has approved these proposals and the Company urges you to vote in favor of
these proposals and such other matters as may be submitted to you for a vote at the meeting. The
Board of Directors has fixed the close of business on February 22, 2011 as the record date for
determining shareholders entitled to notice of, and to vote at, the Annual Meeting.
This proxy statement and accompanying proxy card are being mailed to our shareholders along with
the Companys Annual Report on Form 10-K. Voting can be completed by returning the proxy card,
through the telephone at 1-866-390-5376 or online at www.proxypush.com/ASTC. Further detail can be
found on the proxy card and in the Voting of Proxies section included below. Please refer to the
Companys Form 10-K filed on August 30, 2010, which has been incorporated herein by reference, for
the Companys officer and director compensation information, including the Companys compensation
discussion and analysis.
Important notice regarding the availability of proxy materials of the shareholder meeting to be
held on April 20, 2011: the proxy statement and Form 10-K are available at www.proxydocs.com/ASTC.
Thank you for your assistance in voting your shares promptly.
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By Order of the Board of Directors,
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John M. Porter |
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Senior Vice President
Chief Financial Officer
and Secretary |
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YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE
MEETING, PLEASE MARK, SIGN, AND DATE THE ENCLOSED PROXY AND RETURN IT IN
THE ENCLOSED ENVELOPE TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT
THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH
TO DO SO, EVEN IF YOU HAVE PREVIOUSLY SUBMITTED YOUR PROXY.
PROXY STATEMENT
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation by the Board of
Directors of Astrotech Corporation, (the Company or Astrotech) a Washington corporation, of
proxies to be voted at the Annual Meeting of Shareholders to be held on April 20, 2011 at 9:00 a.m.
(Central time) at 401 Congress Ave, Suite 1650, Austin, Texas 78701 (the Annual Meeting). This
proxy statement, the accompanying proxy card, and the 2010 Form 10-K are being distributed to
shareholders on or about March 10, 2011.
At the meeting you will be asked to consider and vote on the following matters:
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to elect six directors to the Companys Board of Directors; |
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to ratify the appointment of Ernst & Young as independent auditors for the Company; |
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to approve the Astrotech Corporation 2011 Stock Incentive Plan; |
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to approve reincorporation from Washington state to Delaware; and |
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to transact any other business properly brought before the meeting. |
Internet Availability of Proxy Materials
In addition to mailing paper copies of the Companys proxy statement and annual report on Form
10-K, Astrotech is making these materials available to its shareholders via the Internet. The
proxy statement and annual report on Form 10-K are available free of charge for viewing or printing
at www.proxydocs.com/ASTC.
Record Date and Voting Securities
The Board of Directors has fixed the close of business on February 22, 2011 as the record
date for the determination of shareholders entitled to notice of, and to vote at, the Annual
Meeting. As of the record date, there were 19,346,138 outstanding shares of Astrotechs common stock, no par
value per share. Holders of common stock and restricted stock with voting rights, totaling 19,346,138
shares, are entitled to notice of the Annual Meeting and to one vote per share of common stock owned
and restricted stock with voting rights granted as of the record date at the Annual Meeting. No
shareholder shall be allowed to cumulate votes.
Proxies
The Board of Directors is soliciting a proxy in the form accompanying this proxy statement for use
at the Annual Meeting and will not vote the proxy at any other meeting. Mr. Thomas B. Pickens III,
is the person named as proxy on the proxy card accompanying this proxy statement, and is who the
Board of Directors has selected to serve in such capacity. Mr. Pickens is Chairman of the Board of
Directors and Chief Executive Officer.
Revocation of Proxies
Each shareholder giving a proxy has the power to revoke it at any time before the shares
represented by that proxy are voted. Revocation of a proxy is effective when the Secretary of the
Company receives either (i) an instrument revoking the proxy or (ii) a duly executed proxy bearing
a later date. Additionally, a shareholder may change or revoke a previously executed proxy by
voting in person at the Annual Meeting.
Voting of Proxies
Because many Astrotech shareholders are unable to attend the Annual Meeting, the Board of Directors
solicits proxies to give each shareholder an opportunity to vote on all matters scheduled to come
before the meeting as set forth in this proxy statement. Shareholders are urged to read carefully
the material in this proxy statement and vote through one of the following methods:
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Fully completing, signing, dating and timely mailing the proxy card; |
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Calling 1-866-390-5376 and following the instructions provided on the phone line; or |
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Accessing the internet voting site at www.proxypush.com/ASTC and following the
instructions provided on the website. |
Please
keep your proxy card with you when voting via the telephone or
internet. All proxies voted by internet or telephone must
be submitted by 5:00 p.m. (Eastern Time) on April 19, 2011 in order to be counted. Each proxy card
that is (a) properly executed, (b) timely received by the Company before or at the Annual Meeting,
and (c) not properly revoked by the shareholder pursuant to the instructions above, will be voted
in accordance with the directions specified on the proxy and otherwise in accordance with the
judgment of the persons designated therein as proxies. If no choice is specified and the proxy is
properly signed and returned, the shares will be voted by the Board appointed proxy in accordance
with the recommendations of the Board of Directors.
Dissenters Rights of Appraisal
Under the Washington Business Corporation Act (the RCW), shareholders of the Company are or may
be entitled to assert dissenters rights as a result of the proposed Reincorporation. Shareholders
who oppose the Reincorporation are or may be entitled to assert the right to receive payment for
the value of their shares as set forth in Chapter 23B.13 of the RCW. A copy of this section is
attached hereto as Appendix A to this Proxy Statement. These provisions are very technical in
nature and should be carefully reviewed by any shareholder wishing to assert such rights.
Shareholders of the Company are or may be entitled to assert appraisal rights under the RCW as a
result of the proposed Reincorporation. Shareholders who oppose the Reincorporation (Dissenting
Shareholders) are or may be entitled to assert the right to receive payment for the value of their
shares as set forth in Chapter 23B.13 of the RCW (the RCW Dissent Provisions).
A copy of Chapter 23B.13 is attached as Appendix A to this Proxy Statement.
These provisions are very technical in nature and should be carefully reviewed by any shareholder
wishing to assert such rights. Dissenting Shareholders who hold certificated shares of Common Stock
must send their share stock certificates to the Company at Astrotech Corporation, 401 Congress
Ave., Suite 1650, Austin, Texas 78701 (Telephone: (512) 485-9530, Fax: (512) 485-9531), Attention:
Thomas B. Pickens III, Chairman and CEO.
Dissenting Shareholders who hold uncertificated shares of Common Stock should fax (Fax: (512)
485-9531) the form attached hereto as Appendix F to this Proxy Statement to the Company and have
the shares deposited in the Companys brokerage account. Uncertificated shares will not be able to
transfer their shares after the payment demand is received by the Company.
Attached as Appendix F to this Proxy Statement is the form for demanding payment and must be sent
to the Company whether you hold certificated or uncertificated shares of Common Stock of the
Company. The form must be received by the Company by 5:00 pm (Central Time) on April 19, 2011.
If the Company does not effect the proposed corporate action within sixty days after the date set
for demanding payment and depositing share certificates, the Company shall return the deposited
certificates and release any transfer restrictions imposed on uncertificated shares.
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.
Vote Required for Quorum
The holders of at least a majority of all issued and outstanding shares of common stock entitled to
vote at the Annual Meeting, whether present in person or represented by proxy, will constitute a
quorum.
Vote Required for Director Elections
The election of the six directors requires the vote of a plurality of the shares of common stock
represented at the meeting. Abstentions will have no effect on the election of directors since
only votes For or Against a nominee will be counted.
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Vote Required for Auditor Ratification and the 2011 Stock Plan
The vote of the majority of the outstanding shares of common stock, present (in person or by proxy)
and entitled to vote at the meeting, is required to ratify the appointment of Ernst & Young as
independent registered public accountants for the Company (Proposal 2) and to approve the 2011
Stock Incentive Plan (Proposal 3). Abstentions will be the equivalent of an Against vote for
Proposals 2 and 3.
Vote Required for Delaware Reincorporation
The vote of sixty-six and two-thirds of the outstanding shares of common stock and entitled to vote
is required to allow reincorporation of Astrotech from Washington state to Delaware. Abstentions
will be the equivalent of an Against vote for Proposal 4.
Method of Tabulation and Broker Voting
One or more inspectors of election appointed for the meeting will tabulate the votes cast in person
or by proxy at the Annual Meeting, and will determine whether or not a quorum is present. The
inspectors of election will treat abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum, and for purposes of determining the approval of
any matter submitted to the shareholders for a vote.
Many of the Companys shares of common stock are held in street name, meaning that a depository,
broker-dealer or other financial institution holds the shares in its name, but such shares are
beneficially owned by another person. Generally, a street name holder must receive direction from
the beneficial owner of the shares to vote on issues other than routine shareholder matters such as
the ratification of auditors. If a broker indicates on a proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter, those shares will not be considered
present and entitled to vote at the Annual Meeting for such matter. For Proposal 1, only votes
For or Against a nominee will be counted, so broker non-votes will have no effect on
determinations of plurality for that proposal. Proposal 2 is considered a routine matter, so
brokers will be able to vote uninstructed shares on that proposal. For Proposal 3, non-voted shares
will not be considered present and entitled to vote and therefore will have the practical effect of
reducing the number of affirmative votes required to achieve a majority vote by reducing the total
number of shares from which a majority is calculated. For Proposal 4, broker non-votes will have
the same practical effect as votes against the proposal, because the vote of sixty-six and
two-thirds of all outstanding shares of common stock is required for that proposal to pass.
Form 10-K
Shareholders may obtain, without charge, a copy of the Companys 2010 Annual Report on Form 10-K
for the fiscal year ended June 30, 2010 as filed with the Securities and Exchange Commission
(SEC) on August 30, 2010. For copies, please contact Investor Relations at the address of the
Companys principal executive office: Astrotech Corporation, 401 Congress Ave, Suite 1650, Austin,
Texas 78701. The Form 10-K is also available through the SECs website at www.sec.gov, through the
Companys website at www.astrotechcorp.com and at www.proxydocs.com/ASTC.
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GOVERNANCE OF ASTROTECH
The Companys business affairs are managed under the direction of our Board of Directors in
accordance with the Washington Business Corporation Act and the Amended and Restated Articles of
Incorporation and Bylaws of the Company. The role of the Board of Directors is to effectively
govern the affairs of the Company for the benefit of the Companys shareholders and other
constituencies and to ensure that Astrotechs activities are conducted in a responsible and ethical
manner. The Board of Directors strives to ensure the success of the Company through the election
and appointment of qualified management, which regularly keeps members of the Board of Directors
informed regarding the Companys business and industry. The Board of Directors is committed to the
maintenance of sound corporate governance principles.
The Company operates under corporate governance principles and practices that are reflected in a
set of written Corporate Governance Policies which are available on the Companys website at
www.astrotechcorp.com, For Investors. These include the following:
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Code of Ethics and Business Conduct |
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Code of Ethics for Senior Financial Officers |
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Shareholder Communications with Directors Policy |
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Complaint and Reporting Procedures for Accounting and Auditing Matters |
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Audit Committee Charter |
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Compensation Committee Charter |
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Corporate Governance and Nominating Committee Charter |
Code of Ethics and Business Conduct
The Companys Code of Ethics and Business Conduct applies to all directors, officers, and employees
of Astrotech. The key principles of this code include acting legally and ethically, speaking up,
getting advice, and dealing fairly with the Companys shareholders. The Code of Ethics and Business
Conduct is available on the Companys website at www.astrotechcorp.com and is available to the
Companys shareholders upon request. The Code of Ethics and Business Conduct meets the requirements
for a Code of Conduct under NASDAQ rules.
Code of Ethics for Senior Financial Officers
The Companys Code of Ethics for Senior Financial Officers applies to the Companys Chief Executive
Officer, Chief Financial Officer, Chief Accounting Officer, and other designated senior financial
professionals. The key principles of this Code include acting legally and ethically, promoting
honest business conduct, and providing timely and meaningful financial disclosures to the Companys
shareholders. The Code of Ethics for Senior Financial Professionals is available on the Companys
website at www.astrotechcorp.com and is available to the Companys shareholders upon request. The
Code of Ethics for Senior Financial Professionals meets the requirements of a Code of Ethics
under SEC rules.
Shareholder Communications with Directors Policy
The Companys Shareholder Communications with Directors Policy provides a medium for shareholders
to communicate with the Board of Directors. Under this policy, shareholders may communicate with
the Board of Directors or specific Board members by sending a letter to Astrotech Corporation,
Shareholder Communications with the Board of Directors, Attn: Secretary, 401 Congress Ave, Suite
1650, Austin, Texas 78701. Such communications should specify the intended recipient or recipients.
All such communications, other than unsolicited commercial solicitations, will be forwarded to the
appropriate director, or directors, for review.
Complaint and Reporting Procedures for Accounting and Auditing Matters
The Companys Complaint and Reporting Procedures for Accounting and Auditing Matters provide for
the (i) receipt, retention, and treatment of complaints, reports, and concerns regarding
accounting, internal accounting controls, or auditing matters and (ii) the confidential, anonymous
submission of complaints, reports, and concerns by employees regarding questionable accounting or
auditing matters. Complaints may be made to a toll-free independent Integrity Helpline telephone
number and to a dedicated e-mail address. Complaints received are logged by the Companys external
legal console, communicated to the Companys Audit Committee, and
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investigated under the direction of the Companys Audit Committee. In accordance with Section 806
of the Sarbanes-Oxley Act of 2002, these procedures prohibit the Company from taking adverse action
against any person submitting a good faith complaint, report, or concern.
The Board of Directors Role in Risk Oversight
The Board of Directors strives to balance the risk and return ratio for all Astrotech stakeholders.
In doing so, management maintains regular communication with the Board of Directors, both on a
formal and informal basis. This includes conversations on the state of the business, the industry
and the overall economic environment with Astrotech management during formal Board of Directors
meetings, formal Committee meetings and in more frequent informal conversations. Additionally, the
Board of Directors utilizes its Committees to consider specific topics which require further focus,
skill sets and/or independence, such as the Audit Committee and the Compensation Committee.
Committees of the Board of Directors
During fiscal year 2010, the Board of Directors had three standing committees: an Audit Committee,
a Compensation Committee and a Corporate Governance and Nominating Committee. Each such committee
currently consists of three persons and each member of the Audit, Compensation and Corporate
Governance and Nominating Committees is required at the minimum to meet the independence
requirements of the Nasdaqs Listing Rules. Additionally, the Board of Directors created an
Executive Committee in July 2009, which consists of five current Board members.
The Corporate Governance and Nominating Committee, the Audit Committee and the Compensation
Committee have adopted a charter that governs its authority, responsibilities and operation. The
Company periodically reviews, both internally and with the Board of Directors, the provisions of
the Sarbanes-Oxley Act of 2002, and the rules of the SEC and NASDAQ regarding corporate governance
policies, processes and listing standards. In conformity with the requirement of such rules and
listing standards, we have adopted a written Audit Committee Charter, a Compensation Committee
Charter, and a Corporate Governance and Nominating Committee Charter, each of which may be found on
the Companys web site at www.astrotechcorp.com under For Investors or by writing to Astrotech
Corporation, 401 Congress Avenue, Suite 1650, Austin, Texas 78701, Attention Investor Relations
and requesting copies.
The Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee was created by the Board of Directors. The
Corporate Governance and Nominating Committee is comprised solely of independent directors that
meet the requirements of NASDAQ and SEC rules and operates under a written charter adopted by the
Corporate Governance and Nominating Committee and approved by the Board of Directors. The charter
is available in the For Investors section of the
Companys web site at www.astrotechcorp.com.
The primary purpose of the Corporate Governance and Nominating Committee is to provide oversight on
the broad range of issues surrounding the composition and operation of the Board of Directors,
including identifying individuals qualified to become Board of Directors members and recommending
director nominees for the next Annual Meeting of Shareholders. As of the end of fiscal year 2010
the Corporate Governance and Nominating Committee consisted of Mr. Adams (Chairman), Ms. Manning
and Mr. Oliva. During fiscal year 2010, the Corporate Governance and Nominating Committee met once.
Director Nomination Process
Astrotechs six director nominees were approved by the Board of Directors in February 2011 after
considering the recommendation of the Corporate Governance and Nominating Committee. The Companys
Articles of Incorporation provide that, with respect to any vacancies or newly created
directorships, the Board of Directors will nominate individuals who receive a majority vote of the
then sitting directors.
Regarding nominations for directors, the Corporate Governance and Nominating Committee identifies
nominees in various ways. The Corporate Governance and Nominating Committee considers the current
directors that have expressed interest in, and that continue to satisfy, the criteria for serving
on the Board of Directors. Other nominees may be proposed by current directors, members of
management, or by shareholders. From time to time, the Corporate Governance and Nominating
Committee may engage a professional firm to identify and evaluate potential director nominees.
Regarding the skills of the director candidate, the Corporate Governance and Nominating Committee
considers individuals with industry and professional experience that complements the Companys
goals
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and strategic direction. The Corporate Governance and Nominating Committee has established certain
criteria it considers as guidelines in considering nominations for the Board of Directors. The
criteria include:
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the candidates independence; |
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the candidates depth of business experience; |
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the candidates availability to serve; |
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the candidates integrity and personal and professional ethics; |
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the diversity of experience and background relative to the Board of Directors as a
whole; and |
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the need for specific expertise on the Board of Directors. |
The above criteria are not exhaustive and the Corporate Governance and Nominating Committee may
consider other qualifications and attributes which they believe are appropriate in evaluating the
ability of an individual to serve as a member of the Board of Directors. In order to ensure that
the Board of Directors consists of members with a variety of perspectives and skills, the Corporate
Governance and Nominating Committee has not set any minimum qualifications and also considers
candidates with appropriate non-business backgrounds. Other than ensuring that at least one member
of the Board of Directors is a financial expert and a majority of the Board of Directors meet all
applicable independence requirements, the Corporate Governance and Nominating Committee looks for
how the candidate can adequately address his or her fiduciary requirement and contribute to
building shareholder value. With regards to diversity, the Company does not have a formal policy
for the consideration of diversity in Board of Director candidates, but Company practice has
historically considered this in director nominees and the Company expects to continue to in future
nomination and review processes.
Five of the six director nominees set forth in this Proxy Statement are current directors standing
for re-election. Mr. Lance W. Lord resigned from the Board of Directors of Astrotech and as the
Chief Executive Officer of Astrotech Space Operations in June 2010 and is not standing for
re-election at the 2010 Annual Meeting. Daniel T. Russler, Jr. has been nominated to fill the
vacancy created by Lance W. Lords resignation.
For purposes of the 2011 Annual Meeting, the Governance and Nominating Committee will consider any
nominations received by the Secretary from a shareholder of record on or before December 23, 2011
(the 120th calendar day before the one-year anniversary date of the release of these proxy
materials to shareholders). Any such nomination must be made in writing, must be accompanied by all
nominee information that is required under the federal securities laws and must include the
nominees written consent to be named in the Proxy Statement. The nominee must be willing to allow
the Company to complete a background check. The nominating shareholder must submit their name and
address, as well as that of the beneficial owner, if applicable, and the class and number of shares
of Astrotech common stock that are owned beneficially and of record by such shareholder and such
beneficial owner. Finally, the nominating shareholder must discuss the nominees qualifications to
serve as a director.
The Audit Committee
The Audit Committee is composed solely of independent directors that meet the requirements of
NASDAQ and SEC rules and operates under a written charter adopted by the Audit Committee and
approved by the Board of Directors. The charter is available on the Companys web site which is
www.astrotechcorp.com. The Audit Committee is responsible for appointing and compensating a firm of
independent registered public accountants to audit the Companys financial statements, as well as
oversight of the performance and review of the scope of the audit performed by the Companys
independent registered public accountants. The Audit Committee also reviews audit plans and
procedures, changes in accounting policies, and the use of the independent registered public
accountants for non-audit services. As of the end of fiscal year 2010, the Audit Committee
consisted of Mr. Oliva (Chairman), Mr. Adams, and Ms. Manning. During fiscal year 2010, the Audit
Committee met six times. The Board of Directors has determined that John A. Oliva and Mark Adams
met the qualification guidelines as an audit committee financial expert as such term is defined
in Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC.
Audit Committee Pre-Approval Policy and Procedures
The Audit Committee is responsible for appointing, setting compensation for, and overseeing the
work of Ernst & Young, the Companys independent registered public accountants. Audit Committee
policy requires the pre-approval of all audit and permissible non-audit services to be provided by
independent registered public accountants in order to assure that the provision of such services
does not impair the auditors independence. The policy, as amended, provides for the general
pre-approval of specific types of services and gives detailed guidance to management as to the
specific audit, audit-related, and tax services that are eligible for general pre-approval. For
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both audit and non-audit pre-approvals, the Audit Committee will consider whether such services are
consistent with applicable law and SEC rules and regulations concerning auditor independence.
The policy delegates to the Chairman of the Audit Committee the authority to grant certain specific
pre-approvals; provided, however, that the Chairman of the Audit Committee is required to report
the granting of any pre-approvals to the Audit Committee at its next regularly scheduled meeting.
The policy prohibits the Audit Committee from delegating to management the Audit Committees
responsibility to pre-approve services performed by the independent registered public accountants.
Requests for pre-approval of services must be detailed as to the particular services proposed to be
provided and are to be submitted by the CFO. Each request generally must include a detailed
description of the type and scope of services, a proposed staffing plan, a budget of the proposed
fees for such services, and a general timetable for the performance of such services.
The Report of the Audit Committee can be found in this proxy statement following the Proposal 2
description.
The Compensation Committee
The Compensation Committee is composed solely of independent directors that meet the requirements
of NASDAQ and SEC rules and operates under a written charter adopted by the Compensation Committee
and approved by the Board of Directors in May 2004, and amended in May 2005. The charter is
available on the Companys web site, which is
www.astrotechcorp.com. The Compensation Committee is
responsible for determining the compensation and benefits of all executive officers of the Company
and establishing general policies relating to compensation and benefits of employees of the
Company. The Compensation Committee also administers the Companys 2008 Stock Incentive Plan, the
1994 Stock Incentive Plan, and the 1995 Directors Stock Option Plan in accordance with the terms
and conditions set forth in those plans. As of the end of fiscal year 2010, the Compensation
Committee consisted of Mr. Adams (Chairman), Mr. Readdy, and Mr. Oliva. During fiscal year 2010,
the Compensation Committee met three times.
The report of the Compensation Committee is set forth in the Form 10-K filed with the SEC on August
30, 2010.
The Executive Committee
In July 2009, the Board of Directors created an Executive Committee comprised of current Astrotech
Directors. The Executive Committee is responsible for facilitating general corporate decisions,
including the review of strategic alternatives. The Executive Committee includes Mr. Pickens
(Chairman), Mr. Oliva, Mr. Adams, Mr. Readdy and Ms. Manning. Following its formation in July 2009,
the Executive Committee met twice.
Director Attendance at Annual Shareholders Meeting
The Board of Directors members are expected to attend the Annual Shareholders Meeting. All of the
members of the Board of Directors who are standing for election attended last years Annual Meeting
of Shareholders held on March 5, 2010.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Companys directors and executive
officers and persons who beneficially own more than 10% of the Companys common stock to file
reports of ownership and changes in ownership with the SEC. Such directors, executive officers, and
greater than 10% shareholders are required by SEC regulation to furnish to the Company copies of
all Section 16(a) forms they file. Due dates for the reports are specified by those laws, and the
Company is required to disclose in this document any failure in the past fiscal year to file by the
required dates. Based solely on written representations of the Companys directors and executive
officers and on copies of the reports that they have filed with the SEC, the Companys belief is
that all of Astrotechs directors and executive officers complied with all filing requirements
applicable to them with respect to transactions in the Companys equity securities during fiscal
year 2010.
7
PROPOSAL 1 ELECTION OF DIRECTORS
Upon the recommendation of the Corporate Governance and Nominating Committee, which is
comprised entirely of independent directors, the Board of Directors has nominated Thomas B. Pickens
III, Mark Adams, John A. Oliva, William F. Readdy, Sha-Chelle Manning and Daniel T. Russler, Jr. to
the Board of Directors to serve as directors until the 2011 Annual Meeting of Shareholders. Each
nominee has agreed to serve if elected.
All members of the Board of Directors are expected to be elected at the Annual Meeting. All
directors shall hold office until the next Annual Meeting of Shareholders and until their
successors are duly elected and qualified, or their earlier removal or resignation from office. The
Companys articles of incorporation authorize the Board of Directors from time to time to determine
the number of its members. Vacancies in unexpired terms and any additional director positions
created by Board action may be filled by action of the existing Board of Directors at that time,
and any director who is appointed in this fashion will serve until the next Annual Meeting of
Shareholders and until a successor is duly elected and qualified, or their earlier removal or
resignation from office.
The Board of Directors has determined that five of the six director nominees (indicated by asterisk
in the following Table of Information About Directors, Nominees and Executive Officers) have no
relationship that, in the opinion of the Board of Directors, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director and are independent
directors as defined by Rule 5605(a)(2) of the NASDAQs Listing Rules.
Not less than annually, the Board of Directors undertakes the review and approval of all
related-party transactions. Related-party transactions include transactions valued at greater than
$120,000 between the Company and any of the Companys executive officers, directors, nominees for
director, holders of greater than 5% of Astrotechs shares and any of such parties immediate
family members. The purpose of this review is to ensure that such transactions, if any, were
approved in accordance with our Code of Ethics and Business Conduct and for the purpose of
determining whether any of such transactions impacted the independence of such directors. There
were no such transactions in fiscal year 2010. The Board has affirmatively determined that none of
the independent directors is an officer or employee of the Company or any of Astrotechs
subsidiaries and none of such persons have any relationships which, in the opinion of the Board,
would interfere with the exercise of independent judgment in carrying out the responsibilities of a
director. Ownership of a significant amount of our stock, by itself, does not constitute a material
relationship.
The Board of Directors held twelve meetings during fiscal year ended June 30, 2010 and all
directors attended at least 75% of the meetings of the Board of Directors and of the various
committees on which they served during such period. The members of each committee and the chair of
each committee are appointed annually by the Board of Directors.
Information about the number of shares of common stock beneficially owned by each director appears
later in this proxy statement under the heading Security Ownership of Directors, Executive
Officers and Principal Shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF THE
FOLLOWING NOMINEES:
|
|
|
Thomas B. Pickens III
|
|
Sha-Chelle Manning |
William F. Readdy
|
|
Mark Adams |
John A. Oliva
|
|
Daniel T. Russler, Jr. |
8
INFORMATION ABOUT DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table shows information as of January 1, 2011 regarding members of and nominees for
the Companys Board of Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
Current & Nominee |
|
|
|
Age as of |
|
Director |
Directors |
|
Principal Occupation |
|
January 1, 2011 |
|
Since |
Thomas B. Pickens III |
Chairman and Chief Executive Officer of
Astrotech Corporation |
|
|
53 |
|
|
|
2004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Adams* |
Founder, President and CEO, Advocate MD
Financial Group, Inc. |
|
|
50 |
|
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John A. Oliva* |
Managing Principal, Capital City Advisors, Inc. |
|
|
54 |
|
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William F. Readdy* |
Founder, Discovery Partners, International LLC |
|
|
58 |
|
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sha-Chelle Manning* |
Managing Director, Nanoholdings LLC |
|
|
43 |
|
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel T. Russler, Jr. |
Principal, Family Asset Management LLC |
|
|
47 |
|
|
|
(1 |
) |
|
|
|
* |
|
Indicates an independent director |
|
(1) |
|
Current nominee for election at the 2010 Annual Meeting |
Current Directors Nominated for Re-election
Thomas B. Pickens III
Mr. Pickens was named Astrotechs Chief Executive Officer in January 2007 and Chairman in February
2008. In 1985, Mr. Pickens founded T.B. Pickens & Co., a company that provides consulting services
to corporations, public institutions, and start-up organizations. Additionally, Mr. Pickens is the
Managing Partner and Founder of Tactic Advisors, Inc., a company specializing in corporate
turnarounds on behalf of creditors and investors that have aggregated to over $20 billion in value.
Since 1985, Mr. Pickens has served as President of T.B. Pickens & Co. From 1991 to 2002, Mr.
Pickens was the Founder and Chairman of U.S. Utilities, Inc., a company which operated 114 water
and sewer utilities on behalf of various companies affiliated with Mr. Pickens. From 1995 to 1999,
Mr. Pickens directed over 20 direct investments in various venture capital investments and was
Founder and Chairman of the Code Corporation. From 1988 to 1993, Mr. Pickens was the Chairman of
Catalyst Energy Corporation and was Chairman of United Thermal Corporation (NYSE). Mr. Pickens was
also the President of Golden Bear Corporation, Slate Creek Corporation, Eury Dam Corporation,
Century Power Corporation, and Vidilia Hydroelectric Corporation. From 1982 to 1988, Mr. Pickens
founded Beta Computer Systems, Inc., and Sumpter Partners, and was the General Partner of Grace
Pickens Acquisition L.P.
Mr. Pickens has served as a director since 2004 and became CEO in 2007. He brings a historical
understanding of Astrotech and serves a key leadership role on the Board of Directors, providing
the Board of Directors with in-depth knowledge on Astrotechs and the industrys challenges and
opportunities. Mr. Pickens was intimately involved with the transformation of the Company from the
legacy SPACEHAB business to the current core business of Astrotech Space Operations, including the
conversion of over $50 million in debt to equity positions. Currently, Mr. Pickens communicates
managements perspectives on company strategy, operations and financial results to the Board of
Directors. Mr. Pickens has extensive senior management experience, as well as experience as a
member of multiple corporate boards. Mr. Pickens also serves as Chairman of the Executive
Committee.
Mr. Pickens previously served on the Board of Directors of Advocate MD Financial Group until his
resignation in November 2009. Mark Adams, who is a director of Astrotech and a member of its
Compensation Committee, is the founder and CEO of that company.
9
Mark Adams
Mr. Adams founded Advocate, MD Financial Group, Inc., a leading Texas-based medical liability
insurance holding company, in July 2003. Since July 2003, Mr. Adams has served as its Chairman,
President, and Chief Executive Officer. He is also a founding partner in several other companies
including the Endowment Development Group, a Houston-based life insurance company specializing in
placing large multimillion dollar life insurance policies throughout the U.S. market. Mr. Adams
founded Murphy Adams Restaurant Group in 2007 which owns and operates Mama Fus Asian House
restaurants throughout the southeast United States. In 2008, Mr. Adams founded Small Business
United, LLC, a non-profit organization that supports small businesses. Also in 2008, Mr. Adams
co-founded ETMG (Employers Trust Management Group), LLC. Additionally in 2008, Mr. Adams founded
Sozo Global, LLC, a rapidly expanding, international network marketing functional beverage and
nutritional products company. Mr. Adams is the winner of the 2008 Prestigious Ernst and Young
Entrepreneur of the Year Award for Central Texas. After his career with global public companies
such as Xerox and Johnson & Johnson (1985-1988), beginning in 1988, Mr. Adams then spent the next
12 years at Bostik Adhesives where he served in senior management, sales and strategic business
management roles for their worldwide markets in North America, Latin America, Asia, and Europe. In
1997, Mr. Adams then served as Global Sales Director for Bostik and General Manager of Bostiks
J.V. Company Nitta-Findley based in Osaka, Japan and later purchased a minority interest in Ward
Adhesives, Inc. and served as General Manager, and Vice President of Sales and Marketing. Mr.
Adams is also an advisory board member for the McCoy College of Business at Texas State University.
Additionally, Mr. Adams has served as a director of Murphy Adams Restaurant Group, LLC, Ex-Pel,
Inc., KLD Energy Technologies, Inc., Powerstations, LLC and Sundance, LLC. He has also served as
chief executive officer of ETMG (Employers Test Management Group), LLC, Sozo Global, LLC, Viva
Chocolate, LLC.
Mr. Adams brings to our Board a wide range of experience in business, with a particular focus on
entrepreneurism. He has brought his diversity of thought to the Board of Directors since 2007,
which positions him as the longest tenured director other than Mr. Pickens. As stated above, Mr.
Adams serves as a director for several public and private companies, including Astrotech, providing
the Board with expertise in management and corporate governance. Mr. Adams serves as the Chairman
of the Corporate Governance and Nominating Committee and the Compensation Committee and serves on
the Audit Committee and Executive Committee. The Board of Directors has determined that Mr. Adams
met the qualification guidelines as an audit committee financial expert as defined by the SEC
rules.
John A. Oliva
John A. Oliva has 30 years of experience in the private equity, investment banking, capital
markets, branch management, and asset management sectors. Since 2002, Mr. Oliva has been the
Managing Principal of Southeastern Capital Partners BD Inc., a FINRA registered broker/dealer and
independent investment banking and advisory firm. Since 2002, Southeast Capital Partners has
provided financial advisory services, including mergers/acquisitions, underwriting and raising
expansion capital to select mid-tier companies. In addition, Mr. Oliva is the Managing Partner of
Capital City Advisors Inc., which provides private merchant banking services to clients in Europe
and Asia.
Mr. Oliva various FINRA licenses including the Managing Principal and Financial Principal licenses.
Prior to the formation of CCA and Southeastern Capital Partners, Mr. Oliva worked for Morgan
Stanley & Co and served as an advisor to their Private Wealth Management group, developing,
reviewing and implementing solutions for the firms investment banking clients, he was also a group
manager. Mr. Oliva was nationally recognized for achievements at Morgan Stanley & Co and
Shearson/Lehman Brothers in the asset management and investment banking sector. Mr. Oliva performed
similar roles at Interstate/Johnson Lane and The Robinson Humphrey Company. Mr. Oliva also worked
on the floor of the New York Stock Exchange.
Mr. Oliva has served on the Board of Directors since 2008 and provides expert advice to the Board
of Directors on financial issues. Mr. Oliva plays a crucial role in risk management, providing
advice and direction to management on a number of issues ranging from SEC filings, debt
transactions and auditor independence. The Board of Directors has determined that Mr. Oliva met the
qualification guidelines as an audit committee financial
expert as defined by the SEC rules. Mr. Oliva is Chairman of the Audit Committee and serves on the Compensation Committee and the
Governance and Nominating Committee.
William F. Readdy
From 1974 to 2005, Mr. Readdy served the United States as a naval aviator, pilot astronaut,
military officer, and
10
civil service executive. Retiring from the National Aeronautics and Space Administration (NASA)
in September 2005, Mr. Readdy established Discovery Partners International LLC, a consulting firm
providing strategic thinking and planning, risk management, safety and emerging technology
solutions and decision support to aerospace and high-technology industries. Since its formation,
Mr. Readdy has served as Managing Partner.
In addition, Mr. Readdy currently serves on the board of directors of American Pacific Corporation,
a company that manufactures active pharmaceutical ingredients and registered intermediates,
energetic products used primarily in space flight and defense systems, clean fire- extinguishing
agents and water treatment equipment. Mr. Readdy is also chairman of GeoMetWatch, Inc., a startup
company offering commercial satellite weather products.
In the late 1970s and early 1980s he served as a naval test pilot. Mr. Readdy joined NASA in 1986
and in 1987 became a member of the astronaut corps, but continued his military service in the Naval
Reserve, attaining the rank of captain in 2000. Mr. Readdy logged more than 672 hours in space on
three shuttle missions. In 1996 he commanded the space shuttle Atlantis on a docking mission to
the Russian Mir space station.
In 2001, Mr. Readdy was appointed NASAs Associate Administrator for Space Operations responsible
for NASAs major programs, several field centers and an annual budget approaching $7 billion.
Following the loss of space shuttle Columbia in February 2003, Mr. Readdy chaired NASAs Space
Flight Leadership Council, and oversaw the agencys recovery from the accident and the shuttles
successful return to flight in July 2005. Mr. Readdy was honored as a Presidential Meritorious Rank
Executive in 2003 and in 2005 was awarded NASAs highest honor, the Distinguished Service Medal for
the second time. In addition to the Distinguished Flying Cross he is the recipient of numerous
national and international aviation and space awards, and has been recognized for his contributions
to aerospace safety.
Mr. Readdy brings to the Company tremendous background and experience with NASA, the U.S.
Department of Defense and with the aerospace industry in general, which are primary focuses of the
Company. He also brings to the Company an extensive knowledge of public policy, program management
and contracting matters involving military, civil and commercial space programs.
Sha-Chelle Manning
Sha-Chelle Manning is a founding partner of Manti Technologies, a privately held advanced
technology investment group.
From September 1, 2008 to April 30, 2010, Sha-Chelle Manning has been Managing Director for
Nanoholdings LLC, a company that commercializes scientific breakthroughs in nanotechnology. From
January 2007 to December 31, 2008, Ms. Manning was Vice President at Authentix, a Carlyle company
that is the leader in authentication solutions for Fortune 500 companies and governments around the
world for brand protection, excise tax recovery, and authentication of security documents and
pharmaceutical drugs. From September 2005 to April 2007, Ms. Manning was a consultant to the Office
of the Governor of Texas, Rick Perry, where she led the development of the Texas nanotechnology
strategic plan.
Prior to these assignments, Ms. Manning was Director of Alliances at Zyvex Corporation from August
2002 to September 2005, where she was responsible for the commercialization of nanotechnology
products introduced and sold into the marketplace in partnership with key government agencies and
industry. Ms. Manning also served as Vice President for Winstar Communications New Media.
Ms. Manning brings to our Board a wide range of experience in management and executive strategic
consulting positions for companies focusing on high-technology solutions or services.
Additionally, her interaction with local, state and federal governments throughout her career
provides significant experience with government affairs, particularly in the State of Texas. Ms.
Manning serves on the Corporate Governance and Nominating Committee, the Audit Committee and the
Executive Committee.
Current Nominee for Election as Director
Daniel T. Russler, Jr.
Daniel Russler has more than 20 years of capital markets, development, and entrepreneurial
experiences, including an extensive background in sales and trading of a broad variety of equity,
fixed income and private placement securities. Since 2003, Mr. Russler has been the Principal
Partner of Family Asset Management, LLC, a multi-family office providing high net worth individuals
and families with financial services. Mr. Russler has held portfolio and risk management positions
at First Union Securities, Inc., J.C. Bradford & Co, William R. Hough &
11
Co, New Japan Securities International and Bankers Trust Company. His background also includes
experience in project and structured finance at U.S. Generating Company.
Mr. Russler received a masters in business administration from the Owen Graduate School of
Management at Vanderbilt University and a bachelors degree in english and political science from
the University of North Carolina. He currently serves as the Senior Warden Emeritus at St. Philips
Church and on its finance committee. Dan is also active in Charlestons youth sports programs.
Mr. Russler is the newest proposed addition to the Board of Directors and has extensive knowledge
of finance, entrepreneurship, investment allocation and capital raising matters that the Board
of Directors feels will add value to the shareholders. If elected, Mr. Russlers qualifications and
background were deemed to meet the Companys requirements of an independent director by the Board of
Directors in February 2011.
Director Independence and Financial Experts
The Corporate Governance and Nominating Committee, the Audit Committee and the Compensation
Committee charters require that each member meet: (1) all applicable criteria defining
independence that may be prescribed from time to time under Nasdaq Listing Rule 5605(a)(2), Rule
10A-(3) under the Securities Exchange Act of 1934, and other related rules and listing standards,
(2) the criteria for a non-employee director within the meaning of Rule 16b-3 promulgated by the
SEC under the Securities Exchange Act of 1934, and (3) the criteria for an outside director
within the meaning of Section 162(m)(4)(C) of the Internal Revenue Code.
The Companys Board of Directors also annually makes an affirmative determination that all such
independence standards have been and continue to be met by the independent directors and members
of each of the three committees, that each director qualifying as independent is neither an officer
nor an employee of Astrotech or any of its subsidiaries nor an individual that has any relationship
with Astrotech or any of its subsidiaries, or with management (either directly or as a partner,
shareholder or officer of an entity that has such a relationship) which, in the Board of Directors
opinion, would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. In addition, a director is presumptively considered not
independent if:
|
|
|
The director, at any time within the past three years, was employed by Astrotech or any
of its subsidiaries; |
|
|
|
|
The director or a family member received payments from Astrotech or any of its
subsidiaries in excess of $120,000 during any period of twelve consecutive months within
the preceding three years (other than for Board or Committee service, form investments in
the Companys securities or from certain other qualifying exceptions); |
|
|
|
|
The director is, or has a family member who is a partner in, an executive officer or
controlling shareholder of any entity to which Astrotech made to or received from payments
for property or services in the current or in any of the prior three years that exceed 5%
of the recipients consolidated gross revenues for that year, or $200,000, whichever is
more (other than, with other minor exceptions, payments arising solely from investments in
the Companys securities); |
|
|
|
|
The director is a family member of a person who is, or at any time during the three
prior years was employed as an executive officer by Astrotech or any of its subsidiaries; |
|
|
|
|
The director is, or has a family member who is employed as an executive officer of
another entity where at any time within the prior three years any of Astrotechs officers
served on the compensation committee of the other entity; or |
|
|
|
|
The director is, or has a family member who is a current partner of Astrotech
Corporations independent auditing firm, or was a partner or employee of that firm who
worked on the Companys audit at any time during the prior three years. |
The Board of Directors has determined each of the following directors and director nominees to be
an independent director as such term is defined by Rule 5605(a)(2) of the NASDAQ Listing Rules:
Mark Adams; John A. Oliva; William F. Readdy; Sha-Chelle Manning and Daniel T. Russler, Jr. The
Board of Directors has also determined that each member of the Audit Committee, the Compensation
Committee, and the Corporate Governance and Nominating Committee during the past fiscal year and
the proposed nominees for the upcoming fiscal year meets the independence requirements applicable
to those Committees prescribed by NASDAQ and SEC rules.
12
Executive Officers and Key Employees of the Company who are Not Nominees
Set forth below is a summary of the background and business experience of the executive officers of
the Company who are not nominees of the Board of Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Age as |
|
With |
|
|
|
|
|
|
of Jan 1, |
|
Company |
Name |
|
Position(s) |
|
2011 |
|
Since |
John M. Porter |
|
Senior Vice
President, Chief
Financial Officer
and Secretary |
|
|
38 |
|
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Don M. White |
|
Senior Vice
President, GM of
Astrotech Space
Operations |
|
|
47 |
|
|
|
2005 |
|
John M. Porter
Mr. Porter joined Astrotech in October 2008 and serves as the Companys Senior Vice President,
Chief Financial Officer and Secretary. He is responsible for overall strategic planning, corporate
development and finance. His primary areas of focus are utilizing financial management to support
the core spacecraft payload processing business while efficiently advancing the Companys
biotechnology initiatives in microgravity processing and commercializing advanced technologies that
have been developed in and around the space industry.
Prior to joining the Company, Mr. Porter co-founded Arabella Securities, an investment banking firm
that specialized in providing trading services and equity research on small-cap companies to
institutional investors. He headed the Equity Research department, and published research on small
companies in the Healthcare Technology sector. Arabella Securities subsequently merged with another
broker/dealer in 2006 where Mr. Porter continued to lead the firms Healthcare investment banking
practice. Mr. Porter previously served as Director of Business Development for Luminex Corporation
(NASDAQ: LMNX), a leading developer of biological testing technologies for the Diagnostic and life
sciences industries. While at Luminex, Mr. Porter was responsible for the development, negotiation
and management of Luminexs strategic partnership program. During his tenure at Luminex, over 40
new strategic licensing partnerships were formed with companies around the globe including Hitachi
Software (Japan), Qiagen (Germany), Tepnel (UK), Invitrogen (formerly Biosource, US), Inverness
Medical (US), Millipore Corporation (formerly Upstate Biotech, US), and many other world class
companies. Mr. Porter performed additional duties including strategic planning, product
development, marketing management, and investor relations. Mr. Porter also served in multiple
capacities during the preparation, and execution of Luminexs initial public offering (IPO) in
March 2000, where the company successfully raised approximately $100M.
Mr. Porter has a Bachelor of Science in Chemistry from Hampden-Sydney College in Virginia. In
addition, Mr. Porter earned a Master of Business Administration from the A.B. Freeman School of
Business at Tulane University and holds a Master of Science in Physical Chemistry & Material
Science from Tulane University in New Orleans.
Don M. White
Don M. White has been instrumental in leading Astrotechs satellite processing operations since
2005. As Senior Vice President and General Manager of Astrotech Space Operations, Mr. White
oversees a rigorous satellite payload processing schedule. He is also responsible for expanding
business services, improving profitability, and managing current contracts. Additionally, Mr. White
maintains ongoing negotiations with all customers, pledging that every mission contract process is
streamlined with the utmost efficacy and safety.
Prior to joining the Astrotech team, Mr. White was employed at Lockheed Martin as their
Payloads/Ordnance Chief Engineer. He was then promoted to Mission Support Manager, leading various
aspects of the Atlas V Development Program. Mr. Whites extensive aerospace experience also
includes providing leadership to the Titan and Shuttle External Tank programs while at Martin
Marietta Corporation.
13
SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL
SHAREHOLDERS
The following table sets forth as of February 15, 2011, certain information regarding the
beneficial ownership of the Companys outstanding common stock held by (i) each person known by the
Company to be a beneficial owner of more than five percent of any outstanding class of the
Companys capital stock, (ii) each of the Companys directors, (iii) the Companys Chief Executive
Officer and four most highly compensated executive officers at the end of the Companys last
completed fiscal year, and (iv) all directors and executive officers of the Company as a group.
Unless otherwise described below, each of the persons listed in the table below has sole voting and
investment power with respect to the shares indicated as beneficially owned by such party.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature |
|
Shares |
|
|
|
|
|
|
Name and Address of Beneficial |
|
of Beneficial |
|
Subject to |
|
|
|
|
|
Percentage of |
Owners |
|
Ownership # |
|
Options ($) |
|
Total($) |
|
Class(1) |
|
Certain Beneficial Owners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SMH Capital Advisors, Inc.(2) |
|
|
2,600,745 |
|
|
|
|
|
|
|
2,600,745 |
|
|
|
13.4 |
% |
Bruce & Co., Inc.(3) |
|
|
1,070,073 |
|
|
|
|
|
|
|
1,070,073 |
|
|
|
5.5 |
% |
Astrium GmbH (4) |
|
|
1,099,245 |
|
|
|
|
|
|
|
1,099,245 |
|
|
|
5.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Employee Directors: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Adams(5) |
|
|
685,000 |
|
|
|
25,500 |
|
|
|
708,500 |
|
|
|
3.7 |
% |
John A. Oliva(6) |
|
|
170,000 |
|
|
|
22,500 |
|
|
|
192,500 |
|
|
|
1.0 |
% |
William F. Readdy(7) |
|
|
150,000 |
|
|
|
22,500 |
|
|
|
172,500 |
|
|
|
* |
|
Sha-Chelle Devlin Manning(8) |
|
|
135,000 |
|
|
|
|
|
|
|
135,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officers: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas B. Pickens III(9) |
|
|
1,950,000 |
|
|
|
2,000 |
|
|
|
1,952,000 |
|
|
|
10.1 |
% |
John M. Porter(10) |
|
|
300,000 |
|
|
|
100,000 |
|
|
|
400,000 |
|
|
|
2.1 |
% |
Don M. White(11) |
|
|
85,900 |
|
|
|
26,200 |
|
|
|
112,100 |
|
|
|
* |
|
|
|
|
All Directors and Named Executive
Officers as a Group (7 persons) |
|
|
3,667,000 |
|
|
|
358,200 |
|
|
|
4,025,200 |
|
|
|
21.1 |
% |
|
|
|
* |
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Indicates beneficial ownership of less than 1% of the outstanding shares of common stock. |
|
# |
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Includes unvested restricted stock grants. |
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(1) |
|
Calculated pursuant to Rule 13d-3(d) of the Securities Exchange Act of 1934. Under Rule
13d-3(d), shares not outstanding which are subject to options, warrants, rights or conversion
privileges exercisable within 60 days are deemed outstanding for the purpose of calculating
the number and percentage owned by a person, but not deemed outstanding for the purpose of
calculating the number and percentage owned by any other person listed. As of February 15,
2011, we had 19,337,388 shares of common stock outstanding. |
|
(2) |
|
Held by SMH Capital Advisors, Inc. in discretionary accounts for the benefit of its clients.
This holders address is 4800 Overton Plaza, Suite 300, Ft. Worth, Texas 76109. Includes
information from Form 13D filed by SMH Capital Advisors, Inc. on February 1, 2010. |
|
(3) |
|
Bruce & Co., Inc., is the investment manager for Bruce Fund, Inc., a Maryland registered
investment company with its principle business conducted at 20 North Wacker Dr., Suite 2414,
Chicago, IL 60606. |
|
(4) |
|
Astrium GmbHs address is Hünefeldstraße 1-5, Postfach 105909, D-28361 Bremen, Germany. |
|
(5) |
|
Includes 106,666 shares of unvested restricted stock. |
|
(6) |
|
Includes 96,666 shares of unvested restricted stock. |
|
(7) |
|
Includes 73,333 shares of unvested restricted stock. |
|
(8) |
|
Includes 73,333 shares of unvested restricted stock. |
|
(9) |
|
Includes 500,000 shares of unvested restricted stock. Also includes 1,000,000 shares of commons stock pledged as collateral in connection with a
personal loan. |
|
|
(10) |
|
Includes 200,000 shares of unvested restricted stock. Also
includes 100,000 shares of common stock pledged as collateral in
connection with a personal loan. |
|
(11) |
|
Includes 50,000 shares of unvested restricted stock. |
14
PROPOSAL
2 APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
On November 18, 2010, the Astrotech Audit Committee engaged Ernst & Young, LLP as independent
public accountant for the fiscal year ending June 30, 2011 and dismissed the prior auditor, PMB
Helin Donovan, LLP. The dismissal of PMB Helin Donovan, LLP was not the result of disagreements
with the Company. More information on this transition can be found on our SEC Form 8-K filed on
November 22, 2010, including a letter from PMB Helin Donovan, LLP to the SEC stating that it
concurs with the statements made by the Company with respect to PMB Helin Donovan, LLP in the above
mentioned 8-K.
With regards to this proposal, the Board of Directors is requesting the shareholders to ratify the
appointment of Ernst & Young, LLP as independent accountant for the fiscal year ending June 30,
2011. Ratification requires the affirmative vote of a majority of the shares of common stock
present at the Annual Meeting in person or by proxy and entitled to vote on the matter.
Ratification Requirements and Governance
There is no requirement that the Company submit the appointment of independent registered public
accountants to shareholders for ratification or for the appointed auditors to be terminated if the
ratification fails, but Astrotech believes that it is sound corporate governance to submit the
matter to shareholder vote. The Sarbanes-Oxley Act of 2002 states the Audit Committee is solely
responsible for the appointment, compensation and oversight of the independent auditor. As such,
the Audit Committee may consider the appointment of other independent registered public accountants
if the shareholders choose not to ratify the appointment of Ernst & Young, LLP. Additionally, the
Audit Committee may terminate the appointment of Ernst & Young, LLP as the Companys independent
registered public accountants without the approval of the shareholders whenever the Audit Committee
deems such termination appropriate.
Independence
In making its recommendation to ratify the appointment of Ernst & Young, LLP as the Companys
independent registered public accountants for the fiscal year ending June 30, 2011, the Audit
Committee has considered whether the provision of non-audit services by Ernst & Young, LLP is
compatible with maintaining the independence of Ernst & Young, LLP. During fiscal year 2010, Ernst
& Young, LLP did not provide any non-audit services to Astrotech.
Annual Meeting Representation
Representatives of Ernst & Young, LLP are expected to be present at the Annual Meeting and will
have the opportunity to make a statement if they desire to do so. They are also expected to be
available to respond to appropriate questions from the shareholders present.
Audit Committee Pre-Approval Policy
It is the practice of the Audit Committee to pre-approve services, audit and non-audit, to be
performed by the Companys current and former auditors. The Audit Committee will consider the
scope and reasoning of the potential engagement, the amount of fees to be earned and whether they
consider the engagement to be a possible impairment to independence.
Audit Fees
The Company did not pay audit fees to Ernst & Young, LLP during 2010 or 2009. The aggregate fees
billed for each of the last two fiscal years for professional services rendered by PMB Helin
Donovan, LLP, the prior auditors, for the audit of the Companys annual financials and review of
financials contained in the Companys quarterly reports were $169,000 for fiscal year ended June
30, 2010 and $161,000 for fiscal year ended June 30, 2009.
Audit-Related Fees
There were no audit-related fees billed by or to be billed by Ernst & Young, LLP or PMB Helin
Donvan, LLP for fiscal years ended June 30, 2010 or 2009.
15
Tax Fees
Neither Ernst & Young, LLP nor PMB Helin Donovan, LLP provided tax related services to the Company
during fiscal years 2010 and 2009.
All Other Fees
There were no other fees paid to Ernst & Young, LLP during fiscal years 2010 or 2009. The Company
paid PMB Helin Donovan, LLP $9,000 for audit of the Astrotech 401k plan, $18,000 for completing
additional auditing procedures during the review of strategic alternatives and $4,000 for
transitional support during fiscal year 2010.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG, LLP AS INDEPENDENT REGISTERED PUBLIC
ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING JUNE 30, 2011
16
Report of the Audit Committee
The Board of Directors has established an Audit Committee of independent directors which operates
under a written charter adopted by the Board of Directors. The charter was amended and restated in
May 2004. Astrotechs management is responsible for establishing a system of internal controls and
for preparing the Companys consolidated financial statements in accordance with generally accepted
accounting principles. Astrotechs independent accountants are responsible for auditing the
Companys consolidated financial statements in accordance with standards of the Public Company
Accounting Oversight Board (United States) and issuing their report based on that audit. Under the
Audit Committees charter, the primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities as to (i) the integrity of the Companys
financial statements, (ii) the Companys compliance with legal and regulatory requirements and the
Companys Code of Business Conduct and Ethics, (iii) the independent registered public accountants
qualifications and independence, and (iv) the performance of the independent registered public
accountants. The Audit Committee is also directly responsible for selecting and evaluating the
independent registered public accountants; reviewing, with the independent registered public
accountants, the plans and scope of the audit engagement; and reviewing with the independent
registered public accountants their objectivity and independence.
The members of the Audit Committee are not professional accountants or auditors and, in performing
their oversight role, rely without independent verification on the information and representations
provided to them by management and Astrotechs independent accountants. Accordingly, the Audit
Committees oversight does not provide an independent basis to certify that the audit of the
Companys financial statements has been carried out in accordance with generally accepted auditing
standards, that the financial statements are presented in accordance with accounting principles
generally accepted in the United States, or that Astrotechs independent accountants are in fact
independent for fiscal year 2010. The Board of Directors has determined that for fiscal year
2010, Mr. John A. Oliva and Mr. Mark Adams were audit committee financial experts and such persons
are independent as defined under the federal securities laws.
In connection with the preparation of the audited financial statements included in Astrotechs
Annual Report on Form 10-K for the year ended June 30, 2010:
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The Audit Committee reviewed and discussed the audited financial statements with the
independent registered public accountants and management. |
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The Audit Committee discussed with the independent registered public accountants the
matters required to be discussed by Statement on Auditing Standards No. 61,
Communications with Audit Committees, as amended. In general, these auditing standards
require the auditors to communicate to the Audit Committee certain matters that are
incidental to the audit, such as any initiation of, or changes to, significant
accounting policies, management judgments, accounting estimates, and audit adjustments;
disagreements with management; and the auditors judgment about the quality of the
Companys accounting principles. |
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|
The Audit Committee received from the independent registered public accountants
written disclosures and the letter regarding their independence required by
Independence Standards Board Standard No. 1 Independence Discussions with Audit
Committees as adopted by the Public Company Accounting Oversight Board in Rule 3600T,
and discussed with the auditors their independence. In general, Independence Standards
Board Standard No. 1 requires the auditors to disclose to the Audit Committee any
relationship between the auditors and its related entities and Astrotech that in the
auditors professional judgment may reasonably be thought to bear on independence. The
Audit Committee also considered whether the independent registered public accountants
provision of non-audit services to Astrotech was compatible with maintaining their
independence. |
Based on the review and discussions noted above, the Audit Committee recommended to the Board of
Directors that the audited consolidated financial statements for the year ended June 30, 2010 be
included in Astrotechs Annual Report on Form 10-K filed with the SEC.
This report is submitted by the members of the Audit Committee of the Board of Directors:
John A. Oliva (Chairman)
Mark Adams
Sha-Chelle Manning
August 26, 2010
The foregoing Audit Committee Report shall not be deemed to be incorporated by reference in any
previous or future documents filed by the Company with the Securities and Exchange Commission under
the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the
Company specifically incorporates the report by reference in any such document.
17
PROPOSAL 3 APPROVAL OF THE ASTROTECH CORPORATION 2011 STOCK
INCENTIVE PLAN
The Board of Directors, the Compensation Committee and Astrotech management believe that the
use of stock based compensation aligns the long-term interests of management and shareholders by
providing incentives to employees who foster the innovation and entrepreneurial spirit which drives
our business strategy and our execution.
The 2011 Plan, and all other Company stock based compensation plans, are designed to increase
shareholder value by compensating employees over the long term. The plans are used to promote
long-term financial success and execution of our business strategy. It is the goal of the Company
to attract and retain highly skilled leaders and technical employees, and the use of stock based
compensation by the Board of Directors is a critical tool for attracting, motivating and retaining
such key employees and directors. As such, the Board of Directors approved the Companys 2011
Stock Incentive Plan (the 2011 Plan) in February 2011. The shareholders are being asked to
approve and ratify the adoption of the 2011 Plan, which would result in the following benefits for
Astrotech:
|
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Allow the Board of Directors to compensate employees with awards that do not require use of
Company cash; |
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Attract, motivate and retain top talent to manage the Company; and |
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Allow the Company to continue to make awards which are deductible under Section 162(m) of
the Internal Revenue Code. |
Upon approval, the Compensation Committee will be given the right to award grants at any time
following the plan effective date of April 20, 2011 without further approval from the shareholders,
including the granting of incentive stock options, non-statutory stock options, stock appreciation
rights, restricted stock, restricted stock units, performance awards payable in cash or common
stock, and other incentive awards, some of which may require the satisfaction of performance-based
criteria. The Board of Directors expects the 2011 Plan to be used over the next three to five
years. The Company has not granted Astrotech stock based compensation to employees since November
2009.
The 2011 Plan is in addition to the Companys existing stock option plans. See the Companys For
10-K filed with the SEC on August 30, 2010 for additional information.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ASTROTECH
CORPORATION 2011 STOCK INCENTIVE PLAN
18
DESCRIPTION OF THE 2011 ASTROTECH CORPORATION STOCK INCENTIVE PLAN
This section summarizes the material terms of the 2011 Plan. For additional details regarding
the 2011 Plan you should refer to the full text of the 2011 Plan, a copy of which is attached to
this proxy statement as Appendix B. This summary is qualified in its entirety by reference to the
2011 Plan.
Administration. The 2011 Plan is administered by the Compensation Committee of the Board of
Directors (Committee). Members of the Committee must qualify as outside directors under
Section 162(m) of the Internal Revenue Code of 1986 and as non-employee directors under Rule
16b-3 promulgated under the Securities Exchange Act of 1934. Subject to the terms of the 2011
Plan, the Committee has the power to select the persons eligible to receive awards under the 2011
Plan, the type and amount of incentive awards to be awarded, and the terms and conditions of such
awards. The Committee may delegate its authority under the 2011 Plan described in the preceding
sentence to officers of the Company, but may not delegate its authority to grant awards under the
2011 Plan or take any action in contravention of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 or the performance-based compensation exception under Section 162(m) of the
Internal Revenue Code. The Committee also has the authority to interpret the 2011 Plan, and to
establish, amend or waive rules necessary or appropriate for the administration of the 2011 Plan.
Eligibility. Any employee or consultant of the Company (or its subsidiary) or a director of the
Company who, in the opinion of the Committee, is in a position to contribute to the growth,
development or financial success of the Company, is eligible to participate in the 2011 Plan. In
any calendar year, no covered employee described in Section 162(m) of the Internal Revenue Code may
be granted (in the case of stock options and stock appreciation rights), or have vest (in the case
of restricted stock or other stock-based awards), awards relating to more than 800,000 shares of
common stock, and the maximum aggregate cash payout with respect to incentive awards paid in cash
to such covered employees may not exceed $5,000,000. Astrotech has not granted stock based
compensation to employees, directors or NEOs since November 2009. As of the date of this proxy,
no allocations of future awards have been made or considered by the Compensation Committee.
Shares Subject to the 2011 Plan. The maximum number of shares of the Companys common stock, no
par value, that may be delivered pursuant to awards granted under the 2011 Plan is 1,750,000 shares
of common stock. Any shares subject to an award under the 2011 Plan that are forfeited or
terminated, expire unexercised, lapse or are otherwise cancelled in a manner such that the shares
of common stock covered by such award are not issued may again be used for awards under the 2011
Plan. A maximum of 875,000 shares of common stock may be issued upon exercise of incentive stock
options. The maximum number of shares deliverable pursuant to awards granted under the 2011 Plan
is subject to adjustment by the Committee in the event of certain dilutive changes in the number of
outstanding shares. Under the 2011 Plan, the Company may issue authorized but unissued shares,
treasury shares, or shares purchased by the Company on the open market or otherwise. In addition,
the number of shares of common stock available for future awards is reduced by the net number of
shares issued pursuant to an award.
Limited Transferability of Awards. Awards granted under the 2011 Plan may not be sold,
transferred, pledged or assigned, except by will or the laws of descent and distribution or a
qualified domestic relations order. However, the Committee may, in its discretion, authorize in
the applicable award agreement the transfer, without consideration, of all or a portion of a
nonstatutory stock option for the benefit of immediate family members.
Amendment of the 2011 Plan. The Board of Directors has the power and authority to terminate or
amend the 2011 Plan at any time; provided, however, the Board may not, without the approval of
shareholders:
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other than as a result of a dilutive event, increase the
maximum number of shares which may be issued under the 2011 Plan; |
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amend the requirements as to the class of employees eligible
to receive common stock under the 2011 Plan; |
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extend the term of the 2011 Plan; |
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increase the maximum limits on awards to covered employees as
set for compliance with Section 162(m) of the Internal Revenue Code; or |
19
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decrease the authority granted to the Committee under the 2011
Plan in contravention of Rule 16b-3 under the Securities Exchange Act of 1934. |
In addition, to the extent that the Committee determines that the listing requirements of any
national securities exchange or quotation system on which the Companys common stock is then listed
or quoted, or the Internal Revenue Code or regulations promulgated thereunder, require Shareholder
approval in order to maintain compliance with such listing requirements or to maintain any
favorable tax advantages, the 2011 Plan will not be amended without approval of the Companys
Shareholders. No amendment to the 2011 Plan may adversely affect, in any material way, any rights
of a holder of an outstanding award under the 2011 Plan without such holders consent.
Change in Control. Unless provided otherwise in the applicable award agreement, in the event of a
change in control, all outstanding awards shall become 100% vested, free of all restrictions,
immediately and fully exercisable, and deemed earned in full and payable as of the day immediately
preceding the change in control. A change in control generally means the occurrence of any one
or more of the following events:
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The acquisition by any individual, entity or group of
beneficial ownership of 50% or more of the Companys common stock or combined voting power; |
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Individuals who constitute the Board of Directors of the
Company as of the effective date of the 2011 Plan, or successors to such members approved
by the then Board of Directors, cease for any reason to constitute at least a majority of
the Board of Directors; |
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Approval by the Shareholders of the Company of a merger or the
sale or other disposition of all or substantially all of the assets of the Company; or |
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The adoption of any plan or proposal for the liquidation or
dissolution of the Company. |
Award Agreements and Term. All awards under the 2011 Plan will be authorized by the Committee and
evidenced by an award agreement setting forth the type of incentive being granted, the vesting
schedule, and other terms and conditions of exercisability. No stock options may be exercisable
for more than ten years from the date of grant, or, in the case of an incentive stock option
granted to an employee who owns or is deemed to own more than ten percent of the Companys common
stock, five years from the date of grant. In no event may awards be granted after the expiration
of ten years from the effective date of the 2011 Plan.
Stock Options. A grant of a stock option entitles a participant to purchase from the Company a
specified number of shares of common stock at a specified price per share. In the discretion of
the Committee, stock options may be granted as non-statutory stock options or incentive stock
options, but incentive stock options may only be granted to employees. The exercise price of each
stock option is set by the Committee, but all stock options granted under the 2011 Plan must have
an exercise price that is equal to or greater than 100% of the market value as of the grant date of
the shares covered by the option (except as described in this paragraph). The 2011 Plan does not
allow discounted stock options. Thus, an individual would be able to profit from an option only
if the fair market value of the Companys common stock increases after the option is granted and
vests. An exception may be made only for options that the Company grants to substitute for options
held by employees of companies that the Company acquires, in which case the exercise price
preserves the economic value of the employees cancelled stock option from his or her former
employer.
An option cannot be exercised until it vests. The Committee establishes the vesting schedule at
the time the option is granted. Vesting typically requires continued employment or service by the
participant for a period of years. A vested option may be exercised only before it expires. In
general, options expire ten years after grant date.
The aggregate fair market value of the common stock with respect to which incentive stock options
become first exercisable by any participant during any calendar year cannot exceed $100,000. The
purchase price per share of common stock which may be purchased under an incentive stock option
must be at least equal to the fair market value of the Companys common stock as of the grant date
or, if the incentive stock option is granted to an employee who owns or is deemed to own more than
10% of the Companys common stock, 110% of the fair market value of the common stock on the grant
date.
The exercise price for shares of common stock acquired on exercise of a stock option must be made
in full at the time of the exercise. Payment may be paid in cash, or, if approved by the
Committee, delivery of shares of the
20
Companys common stock that have been held by the optionee
with a fair market value equal to the exercise price of the stock option, the withholding of shares
that would otherwise be issuable upon exercise, participation in a broker-assisted cashless
exercise arrangement, or payment of any other form of consideration acceptable to the Committee.
Stock Appreciation Rights (SARs). SARs are awards that are subject to vesting and payment of an
exercise price, which provide a participant the right to receive an amount of money equal to (1)
the number of shares exercised, (2) times the amount by which the then-current value of the
Companys common stock exceeds the exercise price. The exercise price cannot be less than 100% of
the fair market value of the common stock on the grant date. Thus, an individual would be able to
profit from an SAR only if the fair market value of the Companys common stock increases after the
SAR is granted and vests. Each SAR is subject to a vesting schedule established by the Committee
and expires under the same rules that apply to options.
Restricted Stock. A grant of restricted stock is an award of shares of the Companys common stock
subject to restrictions or limitations set forth in the 2011 Plan and in the related award
agreement. The award agreement for restricted stock will specify the time period during which such
award may be subject to forfeiture and any performance goals that must be met to remove any
restrictions on such award. Except for limitations on transfer or other limitations set forth in
the award agreement, holders of restricted stock have all of the rights of a Shareholder of the
Company, including the right to vote the shares, and, if provided in the award agreement, the right
to receive any dividends.
Other Awards. The Committee may grant to any participant other forms of awards payable in shares
of the Companys common stock or cash. The terms and conditions of such other form of award will
be specified in the award agreement. Such awards may be granted for no cash consideration other
than services already rendered, or for such other consideration as may be specified by the award
agreement.
Performance-Based Awards. Awards may be granted under the 2011 Plan that are subject to the
attainment of pre-established performance goals over a specified performance period.
Performance-based awards may be payable in stock or cash. Performance criteria include (but are
not limited to) such measurements as profits, cash flows, and operating efficiency goals.
Performance shares (also referred to as restricted stock units or stock awards) and performance
units result in a payment to the participant in shares or cash, as determined by the Committee, if
the performance goals and/or other vesting criteria (for example, continued service with the
Company) set by the Committee are satisfied. The award agreement for a performance-based award
will specify the performance period, the performance goals to be achieved during the performance
period, and the maximum or minimum settlement values. Performance shares and performance units
that are settled in shares are very similar to awards of restricted stock, except that in the case
of performance shares and performance units, any vested shares are not issued until the payment
date specified in the award. In the case of an award of restricted stock, the shares are issued
promptly after the grant date but are subject to a vesting schedule.
Termination of Employment, Death, Disability and Retirement. Unless otherwise provided in an award
agreement, upon the termination of a participants employment the non-vested portions of all
outstanding awards will terminate immediately. Subject to different provisions which may be
specified in any particular award agreement, the period during which vested awards may be exercised
following a termination of employment are described below. If a participants employment is
terminated for any reason other than as a result of death, disability, retirement or for cause, the
vested portion of such award is exercisable for the lesser of the expiration date set forth in the
applicable award agreement or 90 days after the date of termination of employment. In the event of
the termination of participants employment for cause, all vested awards immediately expire. Upon
a participants retirement, any vested award will expire on the earlier of the expiration date set
forth in the award agreement for such award or six months after the date of retirement (three
months in the case of incentive stock options). Upon the death or disability of a participant, any
vested award will expire on the earlier of the expiration date set forth in the award agreement or
the one year anniversary date of the participants death or disability.
U.S.
Federal Income Tax Consequences of 2011 Plan
The following is a general summary, as of the date of this proxy statement, of the United States
federal income tax consequences associated with the grant of awards under the 2011 Plan. The
federal tax laws may change and the federal, state and local tax consequences for any participant
will depend upon his or her individual circumstances,
21
thus the tax consequences for any particular
individual may be different. Also, this information may not be applicable to any employees of
foreign subsidiaries or to participants who are not residents of the United States.
Nonstatutory Stock Options and Stock Appreciation Rights (SARs). A participant receiving a
nonstatutory stock option, or SAR that has been issued with an exercise price not less than the
fair market value of the Companys common stock on the grant date, will not recognize income and
the Company will not be allowed a deduction at the time such an option is granted. When a
participant exercises a nonstatutory stock option or SAR, the difference between the exercise price
and any higher market value of the stock on the date of exercise will be ordinary income to the
participant and will be claimed as a deduction for federal income tax purposes by the Company.
When a participant disposes of shares acquired by the exercise of the option or SAR, any additional
gain or loss will be a capital gain or loss.
Incentive Stock Options. Incentive stock options granted under the 2011 Plan are intended to meet
the requirements of Section 422 of the Internal Revenue Code. A participant receiving a grant of
incentive stock options will not recognize taxable income and the Company will not be allowed a
deduction at the time such an option is granted. When a participant exercises an incentive stock
option while employed by the Company (or its subsidiary) or within the three-month (one year for
disability) period after termination of employment, no ordinary income will be recognized by the
participant at that time (and no deduction will be allowed to the Company) but the excess of the
fair market value of the shares acquired by such exercise over the exercise price will be taken
into account in determining the participants alternative minimum taxable income for purposes of
the federal alternative minimum tax applicable to individuals. If the shares acquired upon
exercise are not disposed of until more than two years after the grant date and one year after the
date of transfer of the shares to the participant (i.e., the statutory holding periods), the excess
of the sale proceeds over the aggregate option price of such shares will be long-term capital gain,
and the Company will not be entitled to any federal income tax deduction. Except in the event of
death, if the shares are disposed of prior to the expiration of the statutory holding periods
(i.e., a Disqualifying Disposition), the excess of the fair market value of such shares at the
time of exercise over the exercise price (but not more than the gain on the disposition if it is a
transaction on which a loss, if sustained, would be recognized) will be ordinary income at the time
of such Disqualifying Disposition (and the Company will be entitled to a federal tax deduction in a
like amount), and the balance of any gain will be capital gain. To the extent that the aggregate
fair market value of stock (determined on the grant date) with respect to which incentive stock
options become exercisable for the first time during any calendar year exceeds $100,000, such
excess options will be treated as nonstatutory stock options.
Payment Using Shares. If a participant pays the exercise price of a nonstatutory or incentive
stock option with previously-owned shares of the Companys common stock, and the transaction is not
a Disqualifying Disposition of an incentive stock option, the shares received equal to the number
of shares surrendered are treated as having been received in a tax-free exchange. The shares
received in excess of the number surrendered will not be taxable if an incentive stock option is
being exercised, but will be taxable as ordinary income to the extent of their fair market value if
a nonstatutory stock option is being exercised. The participant does not recognize income and the
Company receives no deduction as a result of the tax-free portion of the exchange transaction.
Restricted Stock, Performance Units and Performance Shares. A recipient of restricted stock,
performance units or performance shares will not have taxable income upon grant. Instead, he or
she will have ordinary income at the time of vesting equal to the fair market value on the vesting
date of the shares (or cash) received minus any amount paid for the shares. For restricted stock
only, a recipient may instead elect to be taxed at the time of grant by making an election under
Section 83(b) of the Internal Revenue Code. When an award vests or otherwise ceases to be subject
to a substantial risk of forfeiture, the excess of the fair market value of the award on the
vesting date or the cessation of the substantial risk of forfeiture over the amount paid, if any,
by the participant for the award will be ordinary income to the participant and deductible for
federal income tax purposes by the Company. Upon disposition of the shares received, the gain or
loss recognized by the participant will be treated as capital gain or loss.
Certain Limitations on Deductibility of Executive Compensation. With certain exceptions, Section
162(m) of the Internal Revenue Code denies a deduction to a publicly held corporation for
compensation paid to certain executive officers in excess of $1 million per executive per taxable
year (including any deduction with respect to the exercise of a nonstatutory stock option or stock
appreciation right, or the disqualifying disposition of stock purchased pursuant to an incentive
stock option). One such exception applies to certain performance-based compensation as
22
described in Section 162(m), provided that such compensation has been approved by Shareholders and certain
other requirements are met. If approved by our Shareholders, we believe that the nonstatutory
stock options and other performance-based awards granted under the 2011 Plan should qualify for the
performance-based compensation exception to Section 162(m).
Section 409A. Section 409A of the Internal Revenue Code provides certain new requirements for
non-qualified deferred compensation arrangements. These include new requirements with respect to
an individuals election to defer compensation and the individuals selection of the timing and
form of distribution of the deferred compensation. Section 409A also generally provides that
distributions must be made on or after the occurrence of certain events (e.g., the individuals
separation from service, a predetermined date, or the individuals death). Section 409A imposes
restrictions on an individuals ability to change his or her distribution timing or form of
distribution after the compensation has been deferred. For certain individuals who are officers,
Section 409A requires that such individuals distribution commence no earlier than six months after
such officers separation from service.
Awards granted under the 2011 Plan with a deferral feature will be subject to the requirements of
Section 409A. If an award is subject to and fails to satisfy the requirements of Section 409A, the
recipient of that award may recognize ordinary income on the amounts deferred under the award, to
the extent vested, which may be prior to when the compensation is actually or constructively
received. Also, if an award that is subject to Section 409A fails to comply with Section 409As
provisions, Section 409A imposes an additional 20% federal income tax on compensation recognized as
ordinary income, as well as interest on such deferred compensation.
ERISA
The Company believes that the 2011 Plan is not subject to any provisions of the Employee Retirement
Income Security Act of 1974 (ERISA). The 2011 Plan is not a qualified plan under Section 401(a) of
the Internal Revenue Code.
Awards Granted under the 2011 Plan
As of February 15, 2011, the Company estimates that approximately 75 officers, employees,
consultants and directors were eligible to participate in the 2011
Plan. Because the Compensation Committee does not have
the discretion to grant awards under the 2011 Plan, it is not possible as of the date of this proxy
statement to determine future awards that will be received by executive officers, employees,
consultants and directors under the 2011 Plan.
Securities Authorized for Issuance under Equity Compensation Plans
As of February 15, 2011, the Company had the following securities issuable pursuant to outstanding
option award agreements, weighted-average option exercise price, and remaining shares reserved for
future issuance under the Companys existing Stock Incentive Plans:
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|
|
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|
|
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|
|
|
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|
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Number of securities |
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|
|
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|
|
|
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remaining available for |
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|
|
|
|
|
|
|
|
|
|
future issuance under |
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|
|
Number of securities to |
|
|
Weighted-average |
|
|
equity compensation |
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|
|
be issued upon exercise |
|
|
exercise price of |
|
|
plans (excluding |
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|
|
of outstanding options, |
|
|
outstanding options, |
|
|
securities reflected in |
|
Plan Category |
|
warrants and rights |
|
|
warrants and rights |
|
|
the first column) |
|
Equity compensation
plans approved by
security holders |
|
|
268,600 |
|
|
|
1.66 |
|
|
|
447,480 |
|
Equity compensation
plans not approved
by security holders |
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|
0 |
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|
N/A |
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|
|
0 |
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Total |
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268,600 |
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|
|
1.66 |
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|
|
447,480 |
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23
PROPOSAL 4 APPROVAL TO REINCORPORATE ASTROTECH FROM
WASHINGTON STATE TO DELAWARE
The Board of Directors believes that the Company can improve its corporate governance and
reduce administrative costs by reincorporating from Washington State to Delaware (the
Reincorporation). The Board of Directors believes that shareholder approval of the
Reincorporation provides the following advantages to Astrotech:
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Does not impact our customers, our daily business operations or require relocation of
offices |
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Delaware corporate law is highly developed and predictable |
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Access to the specialized courts for corporate law (Court of Chancery) |
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Enables recruitment of future board members and other leaders |
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Improves the ability to raise outside capital |
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Opportunity to reduce legal fees and administrative burden |
No Impact on Operations or Business Locations
The process of Reincorporation will not impact daily operations, will not affect the commitment to
our customers, will not result in Astrotech moving headquarters from Texas and will not require
relocating the physical location of any of its offices due to solely to this reincorporation. The
directors and officers of the Company immediately prior to the Reincorporation will serve as the
directors and officers of Astrotech following the Reincorporation. This is a legal transaction
designed to achieve the benefits highlighted above and described in further detail below.
Highly Developed and Predictable Corporate Law
Our Board of Directors believes Delaware has one of the most modern statutory corporation laws,
which is revised regularly to meet changing legal and business needs of corporations. The Delaware
legislature is responsive to developments in modern corporate law and Delaware has proven sensitive
to changing needs of corporations and their shareholders. The Delaware Secretary of State is
particularly flexible and responsive in its administration of the filings required for mergers,
acquisitions and other corporate transactions. Delaware has become a preferred domicile for most
major U.S. corporations and the Delaware General Corporations Law (the DGCL) and administrative
practices have become comparatively well-known and widely understood. As a result of these factors,
it is anticipated that the DGCL will provide greater efficiency, predictability and flexibility in
our legal affairs than is presently available under the Washington Business Corporation Act (the
RCW).
Access to Specialized Courts
Delaware has a specialized Court of Chancery that hears corporate law cases. As the leading state
of incorporation for both private and public companies, Delaware has developed a vast body of
corporate law that helps to promote greater consistency and predictability in judicial rulings. In
addition, Court of Chancery actions and appeals from Court of Chancery rulings proceed
expeditiously. In contrast, Washington does not have a similar specialized court established to
hear only corporate law cases. Rather, disputes involving questions of Washington corporate law are
either heard by the Washington Superior Court, the general trial court in Washington that hears all
types of cases, or, if federal jurisdiction exists, a federal district court.
Enable Recruitment of Future Board Members and Other Leaders
The Company is in competitive industries and competes for talented individuals to serve on our
management team and on its Board of Directors. The Company believes that the better understood and
comparatively stable corporate environment afforded by Delaware will enable us to compete more
effectively with other public and private companies, many of which are incorporated in Delaware, in
the recruitment, from time to time, of talented and experienced directors and officers.
Additionally, the parameters of director and officer liability are more extensively addressed in
Delaware court decisions and are therefore better defined and better understood than under the RCW.
The Board of Directors believes that reincorporation in Delaware will enhance Astrotechs ability
to recruit and retain directors and officers in the future, while providing appropriate protection
for shareholders from possible abuses by directors and officers.
24
In this regard, it should be noted that directors personal liability is not, and cannot be,
eliminated under the DGCL for intentional misconduct, bad faith conduct or any transaction from
which the director derives an improper personal benefit.
Ability to Raise Capital
In the opinion of the Board of Directors, underwriters and other members of the financial services
industry may be more willing and better able to assist in capital-raising programs for corporations
having the greater flexibility afforded by the DGCL. Based on publicly available data, over half of
publicly-traded corporations in the United States and more than 63% of the Fortune 500 companies
are incorporated in Delaware.
Opportunity to Reduce Legal Fees and Administrative Burden
As a smaller reporting company, Astrotech regularly looks for ways to reduce administrative burden
and reduce costs. The Company expects the familiarity and proliferation of Delaware law to assist
in the reduction of administrative burden. The Company also retains separate counsel in Washington
state, which we expect to eliminate following the reincorporation.
Reincorporation Process
If the Companys shareholders approve the Reincorporation, the Company will merge into a newly
formed, wholly owned Delaware subsidiary of the Company, named Astrotech Corporation (Newco). The
address and phone number of Newcos principal office are the same as those of the Company. Prior to
the Reincorporation merger, Newco will have no material assets or liabilities and will not have
carried on any business. After the Reincorporation, the Company, will cease to exist, and Newco,
the Companys wholly owned subsidiary that the Company has established solely for the purpose of
the merger and Reincorporation, will be the surviving corporation. Newco will succeed to all of the
operations, own all of the assets and assume all of the obligations of the Company. All of the
Companys employee benefit plans will be continued by Newco following the Reincorporation.
A copy of the form of merger agreement approved by the Companys Board of Directors and by Newco
(the Merger Agreement) is attached as Appendix C. The Merger Agreement assumes shareholder
approval of this Proposal 4.
When the merger becomes effective, each outstanding share of the Companys common stock will be
automatically converted into one share of the common stock of Newco. At the same time, each
outstanding option, right or warrant to acquire shares of the Companys common stock will be
converted into an option, right or warrant to acquire an equal number of shares of Newco common
stock under the same terms and conditions as the original options, rights or warrants. Furthermore,
when the merger becomes effective, the surviving entity in the merger, Newco, will be governed by
the Certificate of Incorporation of Newco (the Delaware Charter) attached as Appendix D and by
the Bylaws of Newco (the Delaware Bylaws) attached as Appendix E. The surviving entity will be
governed by the DGCL instead of the RCW. The Companys current Articles of Incorporation (the
Washington Charter) and Bylaws (the Washington Bylaws) will not be applicable to Newco upon
completion of the Reincorporation.
Effect of Not Obtaining the Required Vote for Approval
If the Reincorporation proposal fails to obtain the requisite vote for approval, the
Reincorporation merger will not be consummated and the Company will continue to be incorporated in
Washington.
Comparison of Shareholder Rights Before and After the Reincorporation
Because of differences between the RCW and the DGCL, as well as differences between the Companys
charter and bylaws before and after the Reincorporation, the Reincorporation will effect some
changes in the rights of the Companys shareholders. Summarized below are the most significant
differences between the rights of the shareholders of the Company before and after the
Reincorporation, as a result of the differences among the RCW and the DGCL, the Washington Charter
and the Delaware Charter, and the Washington Bylaws and the Delaware Bylaws.
25
The summary below is not intended to be relied upon as an exhaustive list of all differences or a
complete description of the differences between the DGCL and the Delaware Charter and the Delaware
Bylaws, on the one hand, and the RCW and the Washington Charter and Bylaws on the other hand. The
summary below is qualified in its entirety by reference to the RCW, the Washington Charter, the
Washington Bylaws, the DGCL, the Delaware Charter and the Delaware Bylaws.
Authorized Capital Stock
Delaware Provisions
Newcos authorized capital stock will consist of 30,000,000 authorized shares of common stock,
$0.01 par value, and 1,000,000 authorized shares of preferred stock, $0.01 par value. All of the
shares of Newco common stock issued in connection with the Reincorporation will be validly issued,
fully paid and non-assessable.
The holders of Newco common stock will be entitled to one vote for each share on all matters voted
on by shareholders, including the election of directors. The holders of Newco common stock will not
have any cumulative voting, conversion, redemption or preemptive rights. The holders of Newco
common stock will be entitled to such dividends as may be declared from time to time by the Newco
Board of Directors from funds available therefor, and upon liquidation will be entitled to receive
pro rata all assets of Newco available for distribution to such holders.
Washington Provisions
The holders of the Companys common stock are entitled to one vote for each share on all matters
voted on by shareholders, including the election of directors. The Companys authorized capital
stock consists of (i) 75,000,000 authorized shares of common stock, no par value, and (ii)
2,500,000 authorized shares of preferred stock, no par value. The holders of the Companys common
stock do not have any cumulative voting, conversion, redemption or preemptive rights.
Number of Directors; Election; Removal; Filling Vacancies; Independent Directors
Delaware Provisions
The Delaware Charter and Delaware Bylaws will provide that the number of directors will be fixed
from time to time by action of the Board of Directors. The Delaware Bylaws will provide that there
shall be at least one director and no more than seven and that the number of directors may be
increased or decreased at any time by a vote of a majority of the directors present at a meeting at
which a quorum is present. Delaware law permits corporations to classify their board of directors
so that less than all of the directors are elected each year to overlapping terms. The Delaware
Charter will provide for a classified board consisting of three classes, elected to three-year
terms. As a
result of the Reincorporation, two directors will serve until the annual meeting in fiscal year
2011, two will serve until the annual meeting in fiscal year 2012, and two will serve until the
annual meeting in fiscal year 2013. At the expiration of each directors term, a successor will be
elected to a three-year term. In addition, any increase in the size of the board of directors will
be allocated among the classes so that they are as nearly equal as possible. The implementation of
the classified board of directors may make it more difficult for the shareholders to replace the
entire board of directors because only one-third of the board is elected each year which will
protect against potentially abusive takeover tactics and efforts to acquire control of the Company
at a price or on terms that are not in the best interests of all shareholders. The classified board
structure will help ensure that the incumbent board of directors will be given the time and
opportunity to evaluate any proposals for acquisition of control of the Company and assess and
develop alternatives in a manner consistent with their responsibility to the Companys
shareholders, without the pressure created by the threat of imminent loss of control.
Under Delaware law, members of a classified board of directors may only be removed for cause.
Removal requires the vote of a majority of the outstanding shares entitled to vote for the election
of directors. Any vacancy created as a result of the removal of a director or a vacancy resulting
from an enlargement of the Board of Directors may be
26
filled only by the vote of a majority of the remaining directors then in office. A director elected
to fill a vacancy shall hold office until the next annual meeting of shareholders.
Washington Provisions
The Washington Charter provides that the number of directors shall not be less than one nor more
than fifteen. Under the Washington Charter, the specific number of directors must be set by a
resolution of the Board of Directors. The directors are elected by the shareholders at the annual
meeting and all directors hold office until their successors are elected and qualified, or until
their earlier death, resignation or removal. The Washington Charter does not divide the Board of
Directors into classes and each director will serve for a term ending on the date of the subsequent
annual meeting following the annual meeting at which such director was elected.
The Washington Charter provides that the shareholders may remove one or more directors for cause at
a special meeting called for the purpose of removing the director, or at an annual meeting, upon
the affirmative vote of the holders of a majority of the votes entitled to vote for the election of
directors. The Washington Bylaws provide that the shareholders may remove one or more directors
with or without cause at a special meeting called for the purpose of removing the director, or at
an annual meeting, upon the affirmative vote of the holders of a majority of the votes entitled to
vote for the election of directors. A vacancy on the Board of Directors, whether created as a
result of the removal of a director or resulting from an enlargement of the Board of Directors, may
only be filled by the directors then in office.
Under the RCW, shareholders may remove one or more directors with or without cause unless the
articles of incorporation provide that directors may be removed only for cause. A director may be
removed by the shareholders only at a special meeting called for that purpose. If a vacancy occurs
on the Board of Directors either the shareholders or the directors shall fill the vacancy.
Cumulative Voting for Directors
Delaware Provisions
Delaware law permits cumulative voting if provided in the certificate of incorporation. The
Delaware Charter expressly prohibits cumulative voting.
Washington Provisions
Under Washington law, unless the articles of incorporation provide otherwise, shareholders are
entitled to use cumulative voting in the election of directors. The Washington Charter expressly
prohibits cumulative voting.
Business Combinations; Interested Transactions
Delaware Provisions
Section 203 of the DGCL provides that, subject to certain exceptions specified therein, a
corporation shall not engage in any business combination with any interested shareholder for a
three-year period following the date that such shareholder becomes an interested shareholder unless
(i) prior to such date, the board of directors of the corporation approved either the business
combination or the transaction which resulted in the shareholder becoming an interested
shareholder, (ii) upon consummation of the transaction which resulted in the shareholder becoming
an interested shareholder, the interested shareholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced (excluding shares held by directors
who are also officers and employee stock purchase plans in which employee participants do not have
the right to determine confidentially whether plan shares will be tendered in a tender or exchange
offer), or (iii) on or subsequent to such date, the business combination is approved by the board
of directors of the corporation and by the affirmative vote at an annual or special meeting, and
not by written consent, of at least 66 2/3% of the outstanding voting stock which is not owned by
the interested shareholder. Except as specified in Section 203 of the DGCL, an interested
shareholder is defined to include (a) any person that is the owner of 15% or more of the
outstanding voting stock of the
27
corporation or is an affiliate or associate of the corporation and was the owner of 15% or more of
the outstanding voting stock of the corporation, at any time within three years immediately prior
to the relevant date, and (b) the affiliates and associates of any such person.
Under certain circumstances, Section 203 of the DGCL may make it more difficult for a person who
would be an interested shareholder to effect various business combinations with a corporation for
a three-year period, although the corporations certificate of incorporation or shareholders may
elect to exclude a corporation from the restrictions imposed thereunder. The Delaware Charter does
not exclude Newco from the restrictions imposed under Section 203 of the DGCL. It is anticipated
that the provisions of Section 203 of the DGCL may encourage companies interested in acquiring
Newco to negotiate in advance with the Newcos Board of Directors, since the shareholder approval
requirement would be avoided if a majority of the directors then in office approve either the
business combination or the transaction which results in the shareholder becoming an interested
shareholder.
Washington Provisions
Section 23B.19.040 of the RCW provides that a Washington public company may not, for a period of
five years following the date on which a shareholder becomes the beneficial owner of ten percent or
more of the corporations outstanding shares, without the prior approval of the corporations board
of directors of the transaction or of the acquisition by the shareholder resulting in the
shareholders ownership of ten percent or more of the corporations outstanding shares, engage in
(i) a merger, share exchange, or consolidation with such shareholder or an affiliate of such
shareholder, (ii) a sale or other disposition to such shareholder of assets with a value equal to
five percent or more of the aggregate market value of all the corporations assets, or having an
aggregate value equal to five percent or more of the aggregate market value of all the outstanding
shares of the corporation, or representing five percent or more of the earning power of the
corporation, (iii) a termination, as a result of such shareholders acquisition of ten percent or
more of the shares of the corporation, of five percent or more of the employees of the corporation
employed in Washington whether at one time or over the five-year period following the date that the
shareholder acquires ten percent of the corporations voting securities, (iv) an issuance, transfer
or redemption by the corporation of shares, options or warrants to such shareholder, (v) a
liquidation or dissolution proposed by or pursuant to an agreement with such shareholder, (vi) a
reclassification of securities, including any share splits, share dividend or other distribution of
shares in respect of stock, proposed by or pursuant to any agreement with such shareholder that has
the effect of increasing the proportionate share of the outstanding shares of a class of shares
owned by such shareholder, or (vii) a transaction with such shareholder in which the corporation
makes any loans or advances to such shareholder or provides other financial assistance or tax
credits or other tax advantages to such shareholder through the target corporation.
The Company is not aware of any specific effort by any party to assume control of the Company.
Because the RCW includes provisions affecting acquisitions and business combinations, the
possibility that Section 203 of the DGCL may impede the accomplishment of mergers with, or the
assumption of control of, the Company is not among the principal reasons for the Reincorporation.
Limitation of Liability of Directors
Delaware Provisions
The DGCL permits a corporation to include a provision in its certificate of incorporation
eliminating or limiting the personal liability of a director to the corporation or its shareholders
for damages for certain breaches of the directors fiduciary duty. However, no such provision may
eliminate or limit the liability of a director: (i) for any breach of the directors duty of
loyalty to the corporation or its shareholders; (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (iii) for declaration of
unlawful dividends or illegal redemptions or stock repurchases; or (iv) for any transaction from
which the director derived an improper personal benefit.
The Delaware Charter provides that a director will not be personally liable to the corporation or
its shareholders for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the directors duty of loyalty to the corporation or its
shareholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the DGCL, which concerns
28
unlawful payments of dividends, stock purchases or redemptions, or (iv) for any transaction from
which the director derived an improper personal benefit. While these provisions provide directors
with protection from awards for monetary damages for breaches of their duty of care, they do not
eliminate such duty. Accordingly, these provisions will have no effect on the availability of
equitable remedies such as an injunction or rescission based on a directors breach of his or her
duty of care.
Washington Provisions
The RCW permits a corporation to include in its articles of incorporation provisions that eliminate
or limit the personal liability of a director to the corporation or its shareholders for monetary
damages for conduct as a director, provided that such provisions may not eliminate or limit the
liability of a director for acts or omissions that involve (i) intentional misconduct by the
director or a knowing violation of law by a director, (ii) liability for unlawful distributions, or
(iii) for any transaction from which the director will personally receive a benefit in money,
property or services to which the director is not legally entitled.
The Washington Charter provides that a director of the Company will not be liable to the
corporation or its shareholders for monetary damages for any conduct as a director to the fullest
extent permitted by the RCW. The Washington Charter also provides that a director of the Company
shall have no personal liability to the Company or its shareholders for monetary damages for breach
of conduct as a director; provided that a director will remain liable for acts or omissions that
involve intentional misconduct by a director or a knowing violation of law by a director, for
voting or assenting to an unlawful distribution, or for any transaction from which the director
will personally receive a benefit in money, property, or services to which the director is not
legally entitled. This provision does not affect the availability of equitable remedies such as an
injunction or rescission based upon a directors breach of his duty of care.
Indemnification of Officers and Directors
Both the RCW and the DGCL permit a corporation to indemnify officers, directors, employees and
agents for actions taken in good faith and in a manner they reasonably believed to be in, or not
opposed to, the best interests of the corporation, and with respect to any criminal action, which
they had no reasonable cause to believe was unlawful. Both states laws provide that a corporation
may advance expenses of defense (upon receipt of a written undertaking to reimburse the corporation
if indemnification is not appropriate), and both states permit a corporation to purchase and
maintain liability insurance for its directors and officers.
Delaware Provisions
The DGCL provides that indemnification may not be made for any matter as to which a person has been
adjudged by a court of competent jurisdiction to be liable to the corporation, unless and only to
the extent a court determines that the person is entitled to indemnity for such expenses as the
court deems proper.
The Delaware Bylaws provide that Newco shall indemnify each person whom it may indemnify to the
extent permitted by the DGCL and that Newco may purchase and maintain insurance on behalf of any
person who is or was serving as a director, officer, employee or agent of the company, or of
another entity at the request of the company. The Delaware Charter provides that Newco shall
indemnify its present and former directors and officers to the maximum extent permitted by the DGCL
and that such indemnification shall not be exclusive of any other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of shareholders or disinterested
directors or otherwise.
Washington Provisions
The RCW provides that a corporation may not indemnify a director in connection with a proceeding in
which the director was adjudged liable to the corporation or in connection with any other
proceeding charging improper personal benefit to the director in which the director was adjudged
liable on the basis that personal benefit was improperly received by the director.
29
The Washington Bylaws provide that to the full extent permitted by the RCW, the Company shall
indemnify any person made or threatened to be made a party to any proceeding (whether brought by or
in the right of the corporation or otherwise) by reason of the fact that he or she is or was a
director or officer of the Company, or is or was serving at the request of the Company as a
director or officer of another corporation, against judgments, penalties, fines, settlements and
reasonable expenses (including attorneys fees) actually incurred by him or her in connection with
such proceeding; and the Company may, at any time, approve indemnification of any other person
which the Company has the power to indemnify under the RCW and that such indemnification shall not
be exclusive of any other rights to which such person may be entitled as a matter of law or by
contract or by vote of the Board of Directors or the shareholders. The Washington Charter provides
that the Company may not provide indemnification in respect of any claim, issue or matter as to
which such person shall have been finally adjudged to be liable for (i) negligence or misconduct in
the performance of his duty to the Company unless and only to the extent that the court in which
such action or suit was brought, or any other court of competent jurisdiction, shall determine upon
application that, despite the adjudication of liability, but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such expenses as such
court shall deem proper or (ii) violating any of the terms or provisions of Section 16 of the
Securities Exchange Act of 1934, as amended, or any of the rules or regulations promulgated
thereunder.
Special Meetings of Shareholders
Delaware Provisions
Under the DGCL, a special meeting of shareholders may be called by the corporations board of
directors or by such persons as may be authorized by the corporations certificate of incorporation
or bylaws. The Delaware Bylaws provide that a special meeting may be called at any time by (i) the
Newco Chief Executive Officer, (ii) the Newco President, (iii) the Board of Directors, or (iv) by
shareholders holding at least a majority of the outstanding shares of Newco.
Washington Provisions
Under the RCW, a corporation must hold a special meeting of shareholders upon request by the board
of directors or by such persons authorized to do so by the articles of incorporation or bylaws. A
corporation must also hold a special meeting of shareholders if the holders of at least ten percent
of all votes entitled to be cast at a special meeting deliver to the corporation a demand for a
special meeting. However, a corporation that is a public company may in its articles of
incorporation limit or deny the right of shareholders to call a special meeting. A corporation
other than a public company may require that shareholders who hold a greater amount than ten
percent of the outstanding shares may call a special meeting of shareholders provided that the
amount is not greater than twenty-five percent.
The Washington Charter provides that special meetings of shareholders may be called by the Board of
Directors, the Chairman of the Board of Directors, or the president of the Company but not by any
other person. The Washington Bylaws allow the holders of not less than one-tenth of all the
outstanding shares of the corporation entitled to vote at the meeting to call a special meeting of
the shareholders.
Amendment or Repeal of the Certificate of Incorporation
Delaware Provisions
Under the DGCL, unless the certificate of incorporation otherwise provides, amendments to the
certificate of incorporation generally require the approval of the holders of a majority of the
outstanding stock entitled to vote thereon, and if the amendment would increase or decrease the
number of authorized shares of any class or series or the par value of such shares, or would
adversely affect the rights, powers or preferences of such class or series, a majority of the
outstanding stock of such class or series also would have to approve the amendment. The Delaware
Charter provides that Newco reserves the right to amend, alter, change or repeal any provision
contained in the Delaware Charter, in the manner prescribed by statute and in the charter, and that
all rights conferred upon shareholders in the charter are granted subject to this reservation.
30
Washington Provisions
Under the RCW, the board of directors may amend the Companys articles of incorporation without
shareholder approval (i) to change any provisions with respect to the par value of any class of
shares, (ii) to delete the names and addresses of the initial directors, (iii) to delete the name
and address of the initial registered agent or registered officer, (iv) if the corporation has only
one class of shares outstanding, solely to effect a forward or reverse stock split, or (v) to
change the corporate name. Other amendments to the articles of incorporation must be approved, in
the case of a public company, by a majority of the votes entitled to be cast on the proposed
amendment. The Washington Charter provides that the Company reserves the right to amend or repeal
any provision contained in the articles of incorporation in any manner permitted by the RCW.
Amendment to Bylaws
Delaware Provisions
Under the DGCL, directors may amend the bylaws of a corporation only if such right is expressly
conferred upon the directors in its certificate of incorporation. The Delaware Charter and Delaware
Bylaws provide that the Board of Directors and the shareholders will have the power to adopt,
amend, alter or repeal the Delaware Bylaws.
Washington Provisions
The RCW provides that the board of directors may amend or repeal the corporations bylaws unless
the articles of incorporation reserve this power exclusively to the shareholders or the
shareholders, in amending or repealing a particular bylaw, provide expressly that the board of
directors may not amend or repeal that bylaw. The shareholders may also amend or repeal the
corporations bylaws, or adopt new bylaws, even though the bylaws may also be amended or repealed
by the board of directors. The Washington Bylaws provide that the Board of Directors has the power
to adopt, amend or repeal the bylaws of the Company, subject to the power of the shareholders to
amend or repeal the bylaws, and that the shareholders also have the power to amend or repeal the
bylaws and to adopt new bylaws.
Merger with Subsidiary
Delaware Provisions
The DGCL provides that a parent corporation may merge into a subsidiary and a subsidiary may merge
into its parent, without shareholder approval, where such parent corporation owns at least 90% of
the outstanding shares of each class of capital stock of its subsidiary.
Washington Provisions
The RCW provides that a parent corporation may merge a subsidiary into itself without shareholder
approval if the parent corporation owns at least 90% of the outstanding shares of each class of
capital stock of its subsidiary.
Committees of the Board of Directors
Delaware Provisions
The DGCL provides that the board of directors may delegate certain of its duties to one or more
committees elected by a majority of the board of directors. A Delaware corporation can delegate to
a committee of the board of directors, among other things, the responsibility of nominating
candidates for election to the office of director, to fill vacancies on the board of directors, to
reduce earned or capital surplus, and to authorize the acquisition of the corporations own stock.
Moreover, if the corporations certificate of incorporation or bylaws, or the resolution of the
board of directors creating the committee so permits, a committee of the board of directors may
declare dividends and authorize the issuance of stock.
31
Washington Provisions
The RCW also provides that the board of directors may delegate certain of its duties to one or more
committees elected by a majority of the board of directors. Under the RCW, each committee may
exercise such powers of the board of directors specified by the board of directors; however, a
committee may not (i) authorize or approve a distribution except in accordance with a general
formula or method prescribed by the board of directors, (ii) approve or propose to shareholders any
action that the RCW requires be approved by shareholders, (iii) fill vacancies on the board of
directors or on any of its committees, (iv) amend the articles of incorporation, (v) adopt, amend
or repeal bylaws, (vi) approve a plan of merger not requiring shareholder approval, or (vii)
approve the issuance or sale of shares or determine the designation and relative rights,
preferences and limitations of a class or series of shares.
Mergers, Acquisitions and Transactions with Controlling Shareholder
Delaware Provisions
Under the DGCL, a merger, consolidation, sale of all or substantially all of a corporations assets
other than in the regular course of business or dissolution of a corporation must be approved by a
majority of the outstanding shares entitled to vote. No vote of shareholders of a constituent
corporation surviving a merger, however, is required (unless the corporation provides otherwise in
its certificate of incorporation) if (i) the merger agreement does not amend the certificate of
incorporation of the surviving corporation; (ii) each share of stock of the surviving corporation
outstanding before the merger is an identical outstanding or treasury share after the merger; and
(iii) the number of shares to be issued by the surviving corporation in the merger does not exceed
twenty (20%) of the shares outstanding immediately prior to the merger. The certificate of
incorporation of Newco does not make any provision with respect to such mergers.
Washington Provisions
Under the RCW, a merger, share exchange, consolidation, sale of substantially all of a
corporations assets other than in the regular course of business, or dissolution of a public
corporation must be approved by the affirmative vote of a majority of directors when a quorum is
present, and by two-thirds of all votes entitled to be cast by each voting group entitled to vote
as a separate group, unless a higher or lower proportion is specified in the articles of
incorporation.
The RCW also provides that certain mergers need not be approved by the shareholders of the
surviving corporation if (i) the articles of incorporation will not change in the merger, except
for specified permitted amendments; (ii) no change occurs in the number, designations, preferences,
limitations and relative rights of shares held by those shareholders who were shareholders prior to
the merger; (iii) the number of voting shares outstanding immediately after the merger, plus the
voting shares issuable as a result of the merger, will not exceed the authorized voting shares
specified in the surviving corporations articles of incorporation immediately prior to the merger;
and (iv) the number of participating shares outstanding immediately after the merger, plus the
number of participating shares issuable as a result of the merger, will not exceed the authorized
participating shares specified in the corporations articles of incorporation immediately prior to
the merger.
Class Voting
Delaware Provisions
The DGCL requires voting by separate classes only with respect to amendments to the certificate of
incorporation that adversely affect the holders of those classes or that increase or decrease the
aggregate number of authorized shares or the par value of the shares of any of those classes.
Washington Provisions
Under the RCW, a corporations articles of incorporation may authorize one or more classes of
shares that have special, conditional or limited voting rights, including the right to vote on
certain matters as a group. Under the
32
RCW, a corporations articles of incorporation may not limit the rights of holders of a class to
vote as a group with respect to certain amendments to the articles of incorporation and certain
mergers that adversely affect the rights of holders of that class.
Preemptive Rights
Delaware Provisions
Under Delaware law, a shareholder does not have preemptive rights unless such rights are
specifically granted in the certificate of incorporation. The Delaware Charter states that
shareholders do not have any preemptive rights.
Washington Provisions
Under Washington law, a shareholder has preemptive rights unless such rights are specifically
denied in the articles of incorporation. The Washington Charter states that shareholders do not
have any preemptive rights.
Transactions with Officers and Directors
Delaware Provisions
The DGCL provides that contracts or transactions between a corporation and one or more of its
officers or directors or an entity in which they have an interest is not void or voidable solely
because of such interest or the participation of the director or officer in a meeting of the board
of directors or a committee which authorizes the contract or transaction if (i) the material facts
as to the relationship or interest and as to the contract or transaction are disclosed or are known
to the board of directors or the committee, and the board of directors or committee in good faith
authorizes the contract or transaction by the affirmative votes of a majority of disinterested
directors, even though the disinterested directors are less than a quorum; (ii) the material facts
as to the relationship or interest and as to the contract or transaction are disclosed or are known
to the shareholders entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the shareholders; or (iii) the contract or transaction is fair as
to the corporation as of the time it is authorized, approved or ratified by the board of directors,
a committee thereof or the shareholders.
Washington Provisions
The RCW sets forth a safe harbor for transactions between a corporation and one or more of its
directors. A conflicting interest transaction may not be enjoined, set aside or give rise to
damages if (i) it is approved by a majority of the qualified directors on the board of directors or
an authorized committee, but in either case no fewer than two qualified directors; (ii) it is
approved by a majority of all qualified shares; or (iii) at the time of commitment, the transaction
was fair to the corporation. For purposes of this provision, qualified director is one who does
not have (a) a conflicting interest respecting the transaction; or (b) a familial, financial,
professional or employment relationship with a non-qualified director which relationship would
reasonably be expected to exert an influence on the qualified directors judgment when voting on
the transaction. Qualified shares are defined generally as shares other than those beneficially
owned, or the voting of which is controlled, by a director who has a conflicting interest
respecting the transaction.
Stock Redemptions and Repurchases
Delaware Provisions
Under the DGCL, a Delaware corporation may purchase or redeem its own shares of capital stock,
except when the capital of the corporation is impaired or when such purchase or redemption would
cause any impairment of the capital of the corporation.
Washington Provisions
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A Washington corporation may acquire its own shares.
Proxies
Delaware Provisions
Under the DGCL, a proxy executed by a shareholder will remain valid for a period of three years
unless the proxy provides for a longer period.
Washington Provisions
Under the RCW, a proxy executed by a shareholder will remain valid for eleven months unless a
longer period is expressly provided in the appointment.
Consideration for Stock
Delaware Provisions
Under the DGCL, a corporation may accept as consideration for its stock a combination of cash,
property or past services in an amount not less than the par value of the shares being issued, and
a secured promissory note or other binding obligation executed by the subscriber for any balance,
the total of which must equal at least the par value of the issued stock, as determined by the
board of directors.
Washington Provisions
Under the RCW, a corporation may issue its capital stock in return for consideration consisting of
any tangible or intangible property or benefit to the corporation, including cash, promissory
notes, services performed, contracts for services to be performed, or other securities of the
corporation.
Shareholders Rights to Examine Books and Records
Delaware Provisions
The DGCL provides that any shareholder of record may demand to examine the corporations books and
records for any proper purpose. If management of the corporation refuses, the shareholder can
compel release of the books by court order.
Washington Provisions
The RCW provides that upon five business days notice to the corporation a shareholder is entitled
to inspect and copy, during regular business hours at the corporations principal office, the
corporations articles of incorporation, bylaws, minutes of all shareholders meetings for the past
three years, certain financial statements for the past three years, communications to shareholders
within the past three years, list of the names and business addresses of the current directors and
officers and the corporations most recent annual report delivered to the secretary of state. Upon
five business days notice, so long as the shareholders demand is made in good faith and for a
proper purpose, the shareholder describes with reasonable particularity the shareholders purpose
and the records the shareholder desires to inspect, and the records are directly connected with the
shareholders purpose, a shareholder may inspect and copy excerpts from minutes of any meeting of
the board of directors or other records of actions of the board of directors, accounting records of
the corporation and the record of shareholders.
Appraisal and Dissenters Rights
Under the DGCL and the RCW, shareholders have appraisal or dissenters rights, respectively, in the
event of certain corporate actions such as a merger. These rights include the right to dissent from
voting to approve such corporate action, and demand fair value for the shares of the dissenting
shareholder. If a proposed corporate action
34
creating dissenters rights is submitted to a vote at a shareholders meeting, a shareholder who
wishes to assert dissenters rights must (i) deliver to the corporation, before the vote is taken,
written notice of his intent to demand payment for his shares if the proposed action is effected,
and (ii) not vote his shares in favor of the proposed action. If fair value is unsettled, the DGCL
and the RCW provide for the dissenter and the company to petition the Court of Chancery or a
superior court of the county in Washington where a corporations principal office or registered
office is located, respectively. Although appraisal or dissenters rights are substantially similar
in Delaware and Washington, this discussion is qualified in its entirety by reference to the DGCL
and the RCW, which provide more specific provisions and requirements for dissenting shareholders.
Dividends
Delaware Provisions
The DGCL provides that the corporation may pay dividends out of surplus, out of the corporations
net profits for the preceding fiscal year, or both, provided that there remains in the stated
capital account an amount equal to the par value represented by all shares of the corporations
stock having a distribution preference.
Washington Provisions
The RCW provides that shares may be issued pro rata and without consideration to the corporations
shareholders as a share dividend. The board of directors may authorize distributions to its
shareholders provided that no distribution may be made if after giving it effect, the corporation
would not be able to pay its liabilities as they become due in the usual course of business or the
corporations total assets would be less than the sum of its total liabilities plus the amount that
would be needed if the corporation were to be dissolved at the time of the distribution, to satisfy
the preferential rights upon dissolution of shareholders whose preferential rights are superior to
those receiving the distribution.
Corporate Action Without a Shareholder Meeting
Delaware Provisions
The DGCL permits corporate action without a meeting of shareholders upon the written consent of the
holders of that number of shares necessary to authorize the proposed corporate action being taken,
unless the certificate of incorporation or articles of incorporation expressly provide otherwise.
In the event such proposed corporate action is taken without a meeting by less than the unanimous
written consent of shareholders, the DGCL requires that prompt notice of the taking of such action
be sent to those shareholders who have not consented in writing.
Washington Provisions
If the corporation is a public company, the RCW only permits action by shareholders without a
meeting if the action is taken by all shareholders entitled to vote on the action.
Effective Time
If the Reincorporation is approved, the Reincorporation will become effective upon the filing of,
or at the later date and time specified in (as applicable), each of the articles of merger to be
filed with the Secretary of State of Washington in accordance with the RCW and the Certificate of
Merger to be filed with the Secretary of State of Delaware in accordance with the DGCL. If the
Reincorporation is approved, it is anticipated that the Board of Directors will cause the
Reincorporation to be effected as promptly as reasonably possible following such approval. However,
the Reincorporation may be delayed or terminated and abandoned by action of the Board of Directors
at any time prior to the effective time, whether before or after the approval by the Companys
shareholders, if the Board of Directors determines for any reason, in its sole judgment and
discretion, that the consummation of the Reincorporation should be delayed or would be inadvisable
or not in the best interests of the Company and its shareholders, as the case may be.
35
Effect on Common Stock
Assuming the proposal to effect the Reincorporation is approved, after the effective date of the
Reincorporation, the common stock will have a new CUSIP number, which is a number used to identify
a companys equity securities, and stock certificates with the old CUSIP number will need to be
exchanged for stock certificates with the new CUSIP number by following the procedures described in
Effect on Registered Certificated Shares below.
After the effective date of the Reincorporation, the Company will continue to be subject to
periodic reporting and other requirements of the Securities Exchange Act of 1934, as amended. The
common stock will continue to be reported on the NASDAQ Stock Market under the symbol ASTC. After
the effective date of the Reincorporation, outstanding shares of common stock will remain fully
paid and non-assessable. The Company will make all necessary filings with NASDAQ as required by SEC
Rule 10b-17.
Effect of Not Obtaining the Required Vote for Approval
If the Reincorporation proposal fails to obtain the requisite vote for approval, the
Reincorporation will not be consummated and the Company will continue to be incorporated in
Washington.
Effect on Registered Certificated Shares
Some of the Companys registered shareholders hold all their shares in certificate form. If any of
your shares are held in certificate form, you will receive a transmittal letter from the Companys
transfer agent, American Stock Transfer & Trust Company (the Transfer Agent), after the effective
date of the Reincorporation. The letter of transmittal will contain instructions on how to
surrender your certificate(s) representing your shares of the common stock (Old Certificates) to
the Transfer Agent in exchange for certificates representing the appropriate number of whole shares
of common stock of the Delaware-incorporated Company as a result of the Reincorporation (New
Certificates). No New Certificates will be issued to a shareholder until such shareholder has
surrendered all Old Certificates, together with a properly completed and executed letter of
transmittal, to the Transfer Agent. Consequently, you will need to surrender your Old
Certificate(s) before you will be able to sell or transfer your stock.
Shareholders will then receive a New Certificate or certificates representing the number of whole
shares of the Companys common stock into which their shares of common stock have been converted as
a result of the Reincorporation. Until surrendered, the Company will deem outstanding Old
Certificates held by shareholders to be canceled and only to represent the number of whole shares
of the Companys common stock to which these shareholders are entitled.
Any Old Certificates submitted for exchange, whether because of a sale, transfer or other
disposition of stock, will automatically be exchanged for certificates evidencing shares of the
Companys common stock. If an Old Certificate has a restrictive legend on the back of the Old
Certificate, a New Certificate evidencing shares of the Companys common stock will be issued with
the same restrictive legends, if any, that are on back of the Old Certificate(s). All expenses of
the exchange will be borne by the Company.
Shareholders should not destroy any stock certificate(s). You should not send your old certificates
to the Transfer Agent until you have received the letter of transmittal.
Accounting Treatment of the Reincorporation
If the proposal to approve the Reincorporation is approved at the Annual Meeting and the
Reincorporation is effected, all previously reported per share amounts will be restated to reflect
the effect of the Reincorporation as though it had occurred at the beginning of the earliest period
presented in the consolidated financial statements. In addition, the amounts reported on the
consolidated balance sheets as common stock and additional paid in capital will also be restated to
reflect the Reincorporation.
Interested Parties
Except as described above with regard to potential benefits to be received by the officers and
directors of the Company arising from the liability limitation and indemnification provisions under
the DGCL, no director or executive officer of the Company has any interest, direct or indirect, in
the Reincorporation other than any interest arising from the ownership of common stock.
36
U.S. Federal
Income Tax Consequences of Reincorporation
The following description of federal income tax consequences is based on the Internal Revenue Code
(the Code) and applicable treasury regulations promulgated thereunder, judicial authority and
current administrative rulings and practices as in effect on the date of this proxy statement. This
discussion should not be considered tax or investment advice, and the tax consequences of the
Reincorporation may not be the same for all shareholders. In particular, this discussion does not
address the tax treatment of special classes of shareholders, such as banks, insurance companies,
tax-exempt entities and foreign persons.
Shareholders desiring to know their individual federal, state, local and foreign tax consequences
should consult their own tax advisors.
The Reincorporation is intended to qualify as a tax-free reorganization under Section 368(a)(1)(F)
or 368(a)(1)(A) of the Code. Assuming such tax treatment, the following U.S. federal income tax
consequences will generally result:
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No taxable income, gain, or loss will be recognized by the Company or the
Companys shareholders as a result of the exchange of shares of the Companys common stock for
shares of Newco common stock pursuant to the Reincorporation. |
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The aggregate tax basis of the Newco common stock received by each Company
shareholder in the Reincorporation will be equal to the aggregate tax basis of the Companys common
stock surrendered in exchange therefore. |
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The holding period of the Newco common stock received by each Company shareholder
in the Reincorporation will include the period for which such shareholder held the Company common
stock surrendered in exchange therefor, provided that such Company common stock was held by such
shareholder as a capital asset at the time of the Reincorporation. |
The Company has not requested a ruling from the Internal Revenue Service (the IRS) or an opinion
of counsel with respect to the federal income tax consequences of the Reincorporation under
applicable tax laws. The Company believes that such a ruling and opinion are unnecessary and would
add unneeded cost and delay because it knows of no reason why the IRS should challenge the
described income tax consequences of the Reincorporation. However, a successful IRS challenge to
the reorganization status of the Reincorporation would result in material adverse tax consequences
to the Company, and in a shareholder recognizing gain or loss with respect to each share of Company
common stock exchanged in the Reincorporation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR REINCORPORATING
ASTROTECH FROM WASHINGTON STATE TO DELAWARE
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ADDITIONAL INFORMATION
Proxy Solicitation Expense
For the 2010 Annual Meeting, Astrotech has retained Morrow & Co., LLC 470 West Ave., Stamford, CT
0690, to assist in soliciting proxies. The Company has agreed to pay a fee of $15,000 plus
out-of-pocket expenses for this service. In addition to solicitation by mail, directors, officers,
and employees of the Company, without receiving any additional compensation, may solicit proxies
personally or by telephone or facsimile. The Company has retained Mediant Communications to request
brokerage houses, banks, and other custodians or nominees holding stock in their names for others
to forward proxy materials to their customers or principals who are the beneficial owners of shares
and will reimburse them for their expenses in doing so. The Company does not anticipate that the
costs and expenses incurred in connection with this proxy solicitation will exceed those normally
expended for a proxy solicitation for those matters to be voted on in the Annual Meeting.
Deadline for Submission of Shareholder Proposals for Next Years Annual Meeting
The proxy rules adopted by the SEC provide that certain shareholder proposals must be included in
the Proxy Statement for the Companys 2011 Annual Meeting. For a proposal to be considered for
inclusion in the Companys proxy materials for the Companys 2011 Annual Meeting of Shareholders,
it must be received in writing by the Company on or before December 23, 2011 at its principal
office, 401 Congress Ave, Suite 1650, Austin, Texas, 78701, Attention: Secretary. If the Company
receives notice of a shareholders intent to present a proposal at the Companys 2011 Annual
Meeting after December 23, 2011, the Company will have the right to exercise discretionary voting
authority with respect to such proposal, if presented at the meeting, without including information
regarding such proposal in the Companys proxy materials. Shareholders who wish to submit a
proposal at next years Annual Meeting must submit notice of the proposal, in writing, to the
Company at the address set forth above. Notwithstanding the foregoing, in the event that the
Company changes the 2011 Annual Meeting more than 30 days from the date of this years Annual
Meeting, the Company will provide the deadline for submissions of shareholder proposals in an
annual, quarterly or current report, so as to provide notice of such submission deadline to
shareholders, which shall be a reasonable time before the Company begins to print and send its
proxy materials.
Additionally, the Delaware Bylaws, if adopted, would establish advance notice requirements with regard to shareholder
proposals.
Generally, under the Delaware Bylaws, stockholders may submit proposals appropriate for stockholder action
at the next Annual Meeting of Shareholders consistent with the rules and regulations of the SEC. For a proposal to be
considered for inclusion in the Companys proxy materials for the Companys 2011 Annual Meeting of Shareholders, it must
be received in writing by the Company on or before December 23, 2011 at its principal offices shown above.
The Delaware Bylaws will also establish advance notice requirements with regard to stockholder proposals
not included in the Companys proxy materials to be brought before an Annual Meeting of Shareholders. Generally,
our corporate secretary must receive notice of any such proposal not less than 90 days nor more than
120 days prior to the anniversary date of the immediately preceding Annual Meeting of Shareholders
(in case of the 2011 Annual Meeting of Shareholders, not before December 23, 2011 and not later than January 22, 2012)
at our principal offices shown above. Such notice must include the information specified in Section 2.3 or 2.9, as the
case may be, of the Delaware Bylaws.
Discretionary Voting of Proxies on Other Matters
The Board of Directors for the Company knows of no matters to be presented at the Annual Meeting
other than those described in this Proxy Statement. In the event that other business properly comes
before the meeting, the persons named as proxies will have discretionary authority to vote the
shares represented by the accompanying proxy in accordance with their own judgment.
Incorporation by Reference
The Companys director and officer compensation information required pursuant to Item 8 of the
SECs proxy rules is incorporated herein by reference to the
Companys Form 10-K filed with the SEC
on August 30, 2010. The information that is incorporated by reference is available to the public
over the Internet at the SECs web site at http://www.sec.gov.
38
OTHER MATTERS
We do not intend to bring any other matters before the Annual Meeting, nor are we aware of any
other matters that are to be properly presented to the Annual Meeting by others. In the event that
other matters do properly come before the Annual Meeting or any adjournments thereof, it is the
intention of the persons named in the Proxy to vote such Proxy in accordance with their best
judgment on such matters.
The Companys Annual Report on Form 10-K, including the Companys audited financial statements for
the year ended June 30, 2010 is being distributed to all shareholders of record as of the record
date.
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By Order of the Board of Directors,
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John M. Porter |
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Senior Vice President and
Chief Financial Officer and
Secretary
Austin, Texas |
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39
APPENDIX A
Washington Business Corporation Act
Chapter 23B.13 Dissenters Rights
23B.13.010
Definitions.
As used in this chapter:
(1) Corporation means the issuer of the shares held by a dissenter before the corporate action,
or the surviving or acquiring corporation by merger or share exchange of that issuer.
(2) Dissenter means a shareholder who is entitled to dissent from corporate action under RCW
23B.13.020 and who exercises that right when and in the manner required by RCW 23B.13.200 through
23B.13.280.
(3) Fair value, with respect to a dissenters shares, means the value of the shares immediately
before the effective date of the corporate action to which the dissenter objects, excluding any
appreciation or depreciation in anticipation of the corporate action unless exclusion would be
inequitable.
(4) Interest means interest from the effective date of the corporate action until the date of
payment, at the average rate currently paid by the corporation on its principal bank loans or, if
none, at a rate that is fair and equitable under all the circumstances.
(5) Record shareholder means the person in whose name shares are registered in the records of a
corporation or the beneficial owner of shares to the extent of the rights granted by a nominee
certificate on file with a corporation.
(6) Beneficial shareholder means the person who is a beneficial owner of shares held in a voting
trust or by a nominee as the record shareholder.
(7) Shareholder means the record shareholder or the beneficial shareholder.
[1989 c 165 § 140.]
23B.13.020
Right to dissent.
(1) A shareholder is entitled to dissent from, and obtain payment of the fair value of the
shareholders shares in the event of, any of the following corporate actions:
(a) A plan of merger, which has become effective, to which the corporation is a party (i) if
shareholder approval was required for the merger by RCW 23B.11.030, 23B.11.080, or the articles of
incorporation, and the shareholder was entitled to vote on the merger, or (ii) if the corporation
was a subsidiary that has been merged with its parent under RCW 23B.11.040;
(b) A plan of share exchange, which has become effective, to which the corporation is a party as
the corporation whose shares have been acquired, if the shareholder was entitled to vote on the
plan;
(c) A sale or exchange, which has become effective, of all, or substantially all, of the property
of the corporation other than in the usual and regular course of business, if the shareholder was
entitled to vote on the sale or exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which all or substantially all
of the net proceeds of the sale will be distributed to the shareholders within one year after the
date of sale;
1
(d) An amendment of the articles of incorporation, whether or not the shareholder was entitled to
vote on the amendment, if the amendment effects a redemption or cancellation of all of the
shareholders shares in exchange for cash or other consideration other than shares of the
corporation; or
(e) Any corporate action approved pursuant to a shareholder vote to the extent the articles of
incorporation, bylaws, or a
resolution of the board of directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
(2) A shareholder entitled to dissent and obtain payment for the shareholders shares under this
chapter may not challenge the corporate action creating the shareholders entitlement unless the
action fails to comply with the procedural requirements imposed by this title, RCW 25.10.831
through 25.10.886, the articles of incorporation, or the bylaws, or is fraudulent with respect to
the shareholder or the corporation.
(3) The right of a dissenting shareholder to obtain payment of the fair value of the shareholders
shares shall terminate upon the occurrence of any one of the following events:
(a) The proposed corporate action is abandoned or rescinded;
(b) A court having jurisdiction permanently enjoins or sets aside the corporate action; or
(c) The shareholders demand for payment is withdrawn with the written consent of the corporation.
[2009 c 189 § 41; 2009 c 188 § 1404; 2003 c 35 § 9; 1991 c 269 § 37; 1989 c 165 § 141.]
Notes:
Revisers note: This section was amended by 2009 c 188 § 1404 and by 2009 c 189 § 41, each without
reference to the other. Both amendments are incorporated in the publication of this section under
RCW 1.12.025(2). For rule of construction, see RCW 1.12.025(1). Effective date 2009 c 188: See
note following RCW 23B.11.080.
23B.13.030
Dissent by nominees and beneficial owners.
(1) A record shareholder may assert dissenters rights as to fewer than all the shares registered
in the shareholders name only if the shareholder dissents with respect to all shares beneficially
owned by any one person and delivers to the corporation a notice of the name and address of each
person on whose behalf the shareholder asserts dissenters rights. The rights of a partial
dissenter under this subsection are determined as if the shares as to which the dissenter dissents
and the dissenters other shares were registered in the names of different shareholders.
(2) A beneficial shareholder may assert dissenters rights as to shares held on the beneficial
shareholders behalf only if:
(a) The beneficial shareholder submits to the corporation the record shareholders consent to the
dissent not later than the time the beneficial shareholder asserts dissenters rights, which
consent shall be set forth either (i) in a record or (ii) if the corporation has designated an
address, location, or system to which the consent may be electronically transmitted and the consent
is electronically transmitted to the designated address, location, or system, in an electronically
transmitted record; and
(b) The beneficial shareholder does so with respect to all shares of which such shareholder is the
beneficial shareholder or over which such shareholder has power to direct the vote.
[2002 c 297 § 35; 1989 c 165 § 142.]
2
23B.13.200
Notice of dissenters rights.
(1) If proposed corporate action creating dissenters rights under RCW 23B.13.020 is submitted for
approval by a vote at a shareholders meeting, the meeting notice must state that shareholders are
or may be entitled to assert dissenters rights under this chapter and be accompanied by a copy of
this chapter.
(2) If corporate action creating dissenters rights under RCW 23B.13.020 is submitted for approval
without a vote of shareholders in accordance with RCW 23B.07.040, the shareholder consent described
in RCW 23B.07.040(1)(b) and the notice described in RCW 23B.07.040(3)(a) must include a statement
that shareholders are or may be entitled to assert dissenters rights under this chapter and be
accompanied by a copy of this chapter.
[2009 c 189 § 42; 2002 c 297 § 36; 1989 c 165 § 143.]
23B.13.210
Notice of intent to demand payment.
(1) If proposed corporate action creating dissenters rights under RCW 23B.13.020 is submitted to a
vote at a shareholders meeting, a shareholder who wishes to assert dissenters rights must (a)
deliver to the corporation before the vote is taken notice of the shareholders intent to demand
payment for the shareholders shares if the proposed corporate action is effected, and (b) not vote
such shares in favor of the proposed corporate action.
(2) If proposed corporate action creating dissenters rights under RCW 23B.13.020 is submitted for
approval without a vote of shareholders in accordance with RCW 23B.07.040, a shareholder who wishes
to assert dissenters rights must not execute the consent or otherwise vote such shares in favor of
the proposed corporate action.
(3) A shareholder who does not satisfy the requirements of subsection (1) or (2) of this section is
not entitled to payment for the shareholders shares under this chapter.
[2009 c 189 § 43; 2002 c 297 § 37; 1989 c 165 § 144.]
23B.13.220
Dissenters rights Notice.
(1) If proposed corporate action creating dissenters rights under RCW 23B.13.020 is approved at a
shareholders meeting, the corporation shall within ten days after the effective date of the
corporate action deliver to all shareholders who satisfied the requirements of RCW 23B.13.210(1) a
notice in compliance with subsection (3) of this section.
(2) If proposed corporate action creating dissenters rights under RCW 23B.13.020 is approved
without a vote of shareholders in accordance with RCW 23B.07.040, the notice delivered pursuant to
RCW 23B.07.040(3)(b) to shareholders who satisfied the requirements of RCW 23B.13.210(2) shall
comply with subsection (3) of this section.
(3) Any notice under subsection (1) or (2) of this section must:
(a) State where the payment demand must be sent and where and when certificates for certificated
shares must be deposited;
(b) Inform holders of uncertificated shares to what extent transfer of the shares will be
restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of the first announcement to news
media or to shareholders of the terms of the proposed corporate action and requires that the person
asserting dissenters rights certify whether or not the person acquired beneficial ownership of the
shares before that date;
(d) Set a date by which the corporation must receive the payment demand, which date may not be
fewer than thirty nor more than sixty days after the date the notice in subsection (1) or (2) of
this section is delivered; and
(e) Be accompanied by a copy of this chapter.
[2009 c 189 § 44; 2002 c 297 § 38; 1989 c 165 § 145.]
3
23B.13.230
Duty to demand payment.
(1) A shareholder sent a notice described in RCW 23B.13.220 must demand payment, certify whether
the shareholder acquired beneficial ownership of the shares before the date required to be set
forth in the notice pursuant to *RCW 23B.13.220(2)(c), and deposit the shareholders certificates,
all in accordance with the terms of the notice.
(2) The shareholder who demands payment and deposits the shareholders share certificates under
subsection (1) of this section retains all other rights of a shareholder until the proposed
corporate action is effected.
(3) A shareholder who does not demand payment or deposit the shareholders share certificates where
required, each by the date set in the notice, is not entitled to payment for the shareholders
shares under this chapter.
[2002 c 297 § 39; 1989 c 165 § 146.]
Notes:
*Revisers note: RCW 23B.13.220 was amended by 2009 c 189 § 44, changing subsection (2)(c) to
subsection (3)(c).
23B.13.240
Share restrictions.
(1) The corporation may restrict the transfer of uncertificated shares from the date the demand for
payment under RCW 23B.13.230 is received until the proposed corporate action is effected or the restriction is
released under RCW 23B.13.260.
(2) The person for whom dissenters rights are asserted as to uncertificated shares retains all
other rights of a shareholder until the effective date of the proposed corporate action.
[2009 c 189 § 45; 1989 c 165 § 147.]
23B.13.250
Payment.
(1) Except as provided in RCW 23B.13.270, within thirty days of the later of the effective date of
the proposed corporate action, or the date the payment demand is received, the corporation shall
pay each dissenter who complied with RCW 23B.13.230 the amount the corporation estimates to be the
fair value of the shareholders shares, plus accrued interest.
(2) The payment must be accompanied by:
(a) The corporations balance sheet as of the end of a fiscal year ending not more than sixteen
months before the date of
payment, an income statement for that year, a statement of changes in shareholders equity for that
year, and the latest available interim financial statements, if any;
(b) An explanation of how the corporation estimated the fair value of the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenters right to demand payment under RCW 23B.13.280; and
(e) A copy of this chapter.
[1989 c 165 § 148.]
4
23B.13.260
Failure to take corporate action.
(1) If the corporation does not effect the proposed corporate action within sixty days after the
date set for demanding payment and depositing share certificates, the corporation shall return the
deposited certificates and release any transfer restrictions imposed on uncertificated shares.
(2) If after returning deposited certificates and releasing transfer restrictions, the corporation
wishes to effect the proposed corporate action, it must send a new dissenters notice under RCW
23B.13.220 and repeat the payment demand procedure.
[2009 c 189 § 46; 1989 c 165 § 149.]
23B.13.270
After-acquired shares.
(1) A corporation may elect to withhold payment required by RCW 23B.13.250 from a dissenter unless
the dissenter was the beneficial owner of the shares before the date set forth in the dissenters
notice as the date of the first announcement to news media or to shareholders of the terms of the
proposed corporate action.
(2) To the extent the corporation elects to withhold payment under subsection (1) of this section,
after the effective date of the proposed corporate action, it shall estimate the fair value of the
shares, plus accrued interest, and shall pay this amount to each dissenter who agrees to accept it
in full satisfaction of the dissenters demand. The corporation shall send with its offer an
explanation of how it estimated the fair value of the shares, an explanation of how the interest
was calculated, and a statement of the dissenters right to demand payment under RCW 23B.13.280.
[2009 c 189 § 47; 1989 c 165 § 150.]
23B.13.280
Procedure if shareholder dissatisfied with payment or offer.
(1) A dissenter may deliver a notice to the corporation informing the corporation of the
dissenters own estimate of the fair value of the dissenters shares and amount of interest due,
and demand payment of the dissenters estimate, less any payment under RCW 23B.13.250, or reject
the corporations offer under RCW 23B.13.270 and demand payment of the dissenters estimate of the
fair value of the dissenters shares and interest due, if:
(a) The dissenter believes that the amount paid under RCW 23B.13.250 or offered under RCW
23B.13.270 is less than the fair value of the dissenters shares or that the interest due is
incorrectly calculated;
(b) The corporation fails to make payment under RCW 23B.13.250 within sixty days after the date set
for demanding payment; or
(c) The corporation does not effect the proposed corporate action and does not return the deposited
certificates or release the transfer restrictions imposed on uncertificated shares within sixty
days after the date set for demanding payment.
(2) A dissenter waives the right to demand payment under this section unless the dissenter notifies
the corporation of the
dissenters demand under subsection (1) of this section within thirty days after the corporation
made or offered payment for the dissenters shares.
[2009 c 189 § 48; 2002 c 297 § 40; 1989 c 165 § 151.]
5
23B.13.300
Court action.
(1) If a demand for payment under RCW 23B.13.280 remains unsettled, the corporation shall commence
a proceeding within sixty days after receiving the payment demand and petition the court to
determine the fair value of the shares and accrued interest. If the corporation does not commence
the proceeding within the sixty-day period, it shall pay each dissenter whose demand remains
unsettled the amount demanded.
(2) The corporation shall commence the proceeding in the superior court of the county where a
corporations principal office, or, if none in this state, its registered office, is located. If
the corporation is a foreign corporation without a registered office in this state, it shall
commence the proceeding in the county in this state where the registered office of the domestic
corporation merged with or whose shares were acquired by the foreign corporation was located.
(3) The corporation shall make all dissenters, whether or not residents of this state, whose
demands remain unsettled, parties to the proceeding as in an action against their shares and all
parties must be served with a copy of the petition. Nonresidents may be served by registered or
certified mail or by publication as provided by law.
(4) The corporation may join as a party to the proceeding any shareholder who claims to be a
dissenter but who has not, in the opinion of the corporation, complied with the provisions of this
chapter. If the court determines that such shareholder has not complied with the provisions of this
chapter, the shareholder shall be dismissed as a party.
(5) The jurisdiction of the court in which the proceeding is commenced under subsection (2) of this
section is plenary and exclusive. The court may appoint one or more persons as appraisers to
receive evidence and recommend decision on the question of fair value. The appraisers have the
powers described in the order appointing them, or in any amendment to it. The dissenters are
entitled to the same discovery rights as parties in other civil proceedings.
(6) Each dissenter made a party to the proceeding is entitled to judgment (a) for the amount, if
any, by which the court finds the fair value of the dissenters shares, plus interest, exceeds the
amount paid by the corporation, or (b) for the fair value, plus accrued interest, of the
dissenters after-acquired shares for which the corporation elected to withhold payment under RCW
23B.13.270.
[1989 c 165 § 152.]
23B.13.310
Court costs and counsel fees.
(1) The court in a proceeding commenced under RCW 23B.13.300 shall determine all costs of the
proceeding, including the reasonable compensation and expenses of appraisers appointed by the
court. The court shall assess the costs against the corporation, except that the court may assess
the costs against all or some of the dissenters, in amounts the court finds equitable, to the
extent the court finds the dissenters acted arbitrarily, vexatiously, or not in good faith in
demanding payment under RCW 23B.13.280.
(2) The court may also assess the fees and expenses of counsel and experts for the respective
parties, in amounts the court finds equitable:
(a) Against the corporation and in favor of any or all dissenters if the court finds the
corporation did not substantially comply with the requirements of RCW 23B.13.200 through
23B.13.280; or
(b) Against either the corporation or a dissenter, in favor of any other party, if the court finds
that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously, or
not in good faith with respect to the rights provided by chapter 23B.13 RCW.
(3) If the court finds that the services of counsel for any dissenter were of substantial benefit
to other dissenters similarly situated, and that the fees for those services should not be assessed
against the corporation, the court may award to these counsel reasonable fees to be paid out of the
amounts awarded the dissenters who were benefited.
[1989 c 165 § 153.]
6
APPENDIX
B
ASTROTECH CORPORATION
2011 STOCK INCENTIVE PLAN
(As Effective April 20, 2011)
TABLE
OF CONTENTS
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Page |
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Section 1. GENERAL PROVISIONS RELATING TO PLAN GOVERNANCE, COVERAGE AND BENEFITS |
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1 |
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1.1 |
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Background and Purpose |
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1 |
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1.2 |
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Definitions |
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1 |
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(a) |
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Authorized Officer |
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1 |
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(b) |
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Board |
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1 |
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(c) |
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Cause |
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1 |
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(d) |
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CEO |
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2 |
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(e) |
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Change in Control |
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2 |
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(f) |
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Code |
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2 |
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(g) |
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Committee |
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2 |
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(h) |
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Common Stock |
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3 |
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(i) |
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Company |
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3 |
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(j) |
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Consultant |
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3 |
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(k) |
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Covered Employee |
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3 |
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(l) |
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Disability |
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3 |
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(m) |
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Employee |
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3 |
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(n) |
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Employment |
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3 |
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(o) |
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Exchange Act |
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4 |
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(p) |
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Fair Market Value |
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4 |
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(q) |
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Grantee |
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4 |
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(r) |
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Immediate Family |
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4 |
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(s) |
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Incentive Agreement |
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5 |
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(t) |
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Incentive Award |
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5 |
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(u) |
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Incentive Stock Option or ISO |
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5 |
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(v) |
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Insider |
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5 |
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(w) |
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Nonstatutory Stock Option |
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5 |
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(x) |
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Option Price |
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5 |
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(y) |
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Other Stock - Based Award |
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5 |
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(z) |
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Outside Director |
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5 |
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(aa) |
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Parent |
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5 |
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(bb) |
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Performance-Based Award |
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5 |
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(cc) |
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Performance-Based Exception |
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5 |
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(dd) |
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Performance Criteria |
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5 |
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(ee) |
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Performance Period |
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6 |
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(ff) |
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Plan |
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6 |
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(gg) |
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Plan Year |
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6 |
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(hh) |
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Publicly Held Corporation |
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6 |
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(ii) |
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Restricted Stock |
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6 |
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(jj) |
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Restricted Stock Award |
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6 |
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(kk) |
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Restricted Stock Unit |
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6 |
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(ll) |
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Restriction Period |
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6 |
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i
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Page |
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(mm) |
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Retirement |
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6 |
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(nn) |
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Share |
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6 |
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(oo) |
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Share Pool |
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6 |
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(pp) |
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Spread |
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6 |
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(qq) |
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Stock Appreciation Right or SAR |
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6 |
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(rr) |
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Stock Option or Option |
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7 |
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(ss) |
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Subsidiary |
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7 |
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(tt) |
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Supplemental Payment |
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7 |
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1.3 |
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Plan Administration |
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7 |
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(a) |
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Authority of the Committee |
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7 |
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(b) |
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Meetings |
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7 |
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(c) |
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Decisions Binding |
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7 |
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(d) |
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Modification of Outstanding Incentive Awards |
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8 |
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(e) |
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Delegation of Authority |
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8 |
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(f) |
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Expenses of Committee |
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8 |
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(g) |
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Surrender of Previous Incentive Awards |
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8 |
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(h) |
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Indemnification |
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9 |
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1.4 |
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Shares of Common Stock Available for Incentive Awards |
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9 |
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1.5 |
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Share Pool Adjustments for Awards and Payouts |
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10 |
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1.6 |
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Common Stock Available |
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11 |
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1.7 |
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Participation |
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11 |
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(a) |
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Eligibility |
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11 |
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(b) |
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Incentive Stock Option Eligibility |
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11 |
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1.8 |
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Types of Incentive Awards |
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11 |
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SECTION 2. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS |
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12 |
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2.1 |
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Grant of Stock Options |
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12 |
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2.2 |
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Stock Option Terms |
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12 |
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(a) |
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Written Agreement |
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12 |
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(b) |
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Number of Shares |
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12 |
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(c) |
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Exercise Price |
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12 |
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(d) |
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Term |
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12 |
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(e) |
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Exercise |
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12 |
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(f) |
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$100,000 Annual Limit on Incentive Stock Options |
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13 |
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2.3 |
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Stock Option Exercises |
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13 |
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(a) |
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Method of Exercise and Payment |
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13 |
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(b) |
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Restrictions on Share Transferability |
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14 |
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(c) |
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Notification of Disqualifying
Disposition of Shares from Incentive Stock Options |
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14 |
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(d) |
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Proceeds of Option Exercise |
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15 |
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2.4 |
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Supplemental Payment on Exercise of Nonstatutory Stock Options |
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15 |
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2.5 |
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Stock Appreciation Rights |
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15 |
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(a) |
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Grant |
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15 |
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(b) |
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General Provisions |
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15 |
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(c) |
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Exercise |
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15 |
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(d) |
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Settlement |
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15 |
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ii
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Page |
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SECTION 3. RESTRICTED STOCK |
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16 |
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3.1 |
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Award of Restricted Stock |
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16 |
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(a) |
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Grant |
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16 |
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(b) |
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Immediate Transfer Without Immediate Delivery of Restricted Stock |
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16 |
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3.2 |
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Restrictions |
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17 |
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(a) |
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Forfeiture of Restricted Stock |
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17 |
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(b) |
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Issuance of Certificates |
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17 |
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(c) |
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Removal of Restrictions |
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17 |
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3.3 |
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Delivery of Shares of Common Stock |
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18 |
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3.4 |
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Supplemental Payment on Vesting of Restricted Stock |
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18 |
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SECTION 4. OTHER STOCK-BASED AWARDS |
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18 |
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4.1 |
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Grant of Other Stock-Based Awards |
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18 |
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4.2 |
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Other Stock-Based Award Terms |
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19 |
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(a) |
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Written Agreement |
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19 |
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(b) |
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Purchase Price |
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19 |
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(c) |
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Performance Criteria and Other Terms |
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19 |
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4.3 |
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Supplemental Payment on Other Stock-Based Awards |
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19 |
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SECTION 5. PERFORMANCE-BASED AWARDS AND PERFORMANCE CRITERIA |
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19 |
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SECTION 6. PROVISIONS RELATING TO PLAN PARTICIPATION |
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21 |
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6.1 |
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Incentive Agreement |
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21 |
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6.2 |
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No Right to Employment |
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22 |
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6.3 |
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Securities Requirements |
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22 |
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6.4 |
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Transferability |
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23 |
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6.5 |
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Rights as a Shareholder |
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23 |
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(a) |
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No Shareholder Rights |
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23 |
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(b) |
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Representation of Ownership |
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24 |
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6.6 |
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Change in Stock and Adjustments |
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24 |
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(a) |
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Changes in Law or Circumstances |
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24 |
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(b) |
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Exercise of Corporate Powers |
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24 |
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(c) |
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Recapitalization of the Company |
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24 |
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(d) |
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Issue of Common Stock by the Company |
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25 |
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(e) |
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Assumption under the Plan of Outstanding Stock Options |
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25 |
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(f) |
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Assumption of Incentive Awards by a Successor |
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25 |
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6.7 |
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Termination of Employment, Death, Disability and Retirement |
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27 |
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(a) |
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Termination of Employment |
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27 |
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(b) |
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Termination of Employment for Cause |
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27 |
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(c) |
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Retirement |
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27 |
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(d) |
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Disability or Death |
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27 |
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(e) |
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Continuation |
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28 |
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6.8 |
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Change in Control |
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28 |
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6.9 |
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Exchange of Incentive Awards |
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30 |
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SECTION 7. GENERAL |
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30 |
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iii
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Page |
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7.1 |
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Effective Date and Grant Period |
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30 |
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7.2 |
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Funding and Liability of Company |
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31 |
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7.3 |
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Withholding Taxes |
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31 |
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(a) |
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Tax Withholding |
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31 |
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(b) |
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Share Withholding |
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31 |
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(c) |
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Incentive Stock Options |
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31 |
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7.4 |
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No Guarantee of Tax Consequences |
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32 |
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7.5 |
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Designation of Beneficiary by Participant |
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32 |
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7.6 |
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Deferrals |
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32 |
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7.7 |
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Amendment and Termination |
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32 |
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7.8 |
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Requirements of Law |
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33 |
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(a) |
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Governmental Entities and Securities Exchanges |
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33 |
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(b) |
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Securities Act Rule 701 |
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34 |
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7.9 |
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Rule 16b-3 Securities Law Compliance for Insiders |
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34 |
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7.10 |
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Compliance with Code Section 162(m) for Publicly Held Corporation |
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34 |
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7.11 |
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Compliance with Code Section 409A |
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35 |
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7.12 |
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Notices |
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35 |
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(a) |
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Notice From Insiders to Secretary of Change in Beneficial Ownership |
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35 |
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(b) |
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Notice to Insiders and Securities and Exchange Commission |
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35 |
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7.13 |
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Pre-Clearance Agreement with Brokers |
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35 |
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7.14 |
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Successors to Company |
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35 |
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7.15 |
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Miscellaneous Provisions |
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36 |
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7.16 |
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Severability |
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36 |
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7.17 |
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Gender, Tense and Headings |
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36 |
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7.18 |
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Governing Law |
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36 |
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iv
ASTROTECH CORPORATION
2011 STOCK INCENTIVE PLAN
SECTION 1.
GENERAL PROVISIONS RELATING TO
PLAN GOVERNANCE, COVERAGE AND BENEFITS
1.1 Background and Purpose
Astrotech Corporation., a Washington corporation (the Company), has adopted this plan
document, entitled Astrotech Corporation 2011 Stock Incentive Plan (the Plan), effective as of
March 5, 2011 (the Effective Date).
The purpose of the Plan is to foster and promote the long-term financial success of the
Company and to increase stockholder value by: (a) encouraging the commitment of selected key
Employees, Consultants and Outside Directors, (b) motivating superior performance of key Employees,
Consultants and Outside Directors by means of long-term performance related incentives, (c)
encouraging and providing key Employees, Consultants and Outside Directors with a program for
obtaining ownership interests in the Company which link and align their personal interests to those
of the Companys stockholders, (d) attracting and retaining key Employees, Consultants and Outside
Directors by providing competitive compensation opportunities, and (e) enabling key Employees,
Consultants and Outside Directors to share in the long-term growth and success of the Company.
The Plan provides for payment of various forms of compensation. It is not intended to be a
plan that is subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA).
The Plan will be interpreted, construed and administered consistent with its status as a plan that
is not subject to ERISA.
The Plan will remain in effect, subject to the right of the Board to amend or terminate the
Plan at any time pursuant to Section 7.7, until all Shares subject to the Plan have been
purchased or acquired according to its provisions. However, in no event may an Incentive Award be
granted under the Plan after the expiration of ten (10) years from the Effective Date.
1.2 Definitions
The following terms shall have the meanings set forth below:
(a) Authorized Officer. The Chairman of the Board, the CEO or any other senior officer
of the Company to whom either of them delegate the authority to execute any Incentive
Agreement for and on behalf of the Company. No officer or director shall be an Authorized
Officer with respect to any Incentive Agreement for himself.
(b) Board. The then-current Board of Directors of the Company.
(c) Cause. When used in connection with the termination of a Grantees Employment,
shall mean the termination of the Grantees Employment by the Company
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or any Subsidiary by reason of (i) the conviction of the Grantee by a court of
competent jurisdiction as to which no further appeal can be taken of a crime involving moral
turpitude or a felony; (ii) the commission by the Grantee of a material act of fraud upon
the Company or any Subsidiary, or any customer or supplier thereof; (iii) the
misappropriation of any funds or property of the Company or any Subsidiary, or any customer
or supplier thereof; (iv) the willful and continued failure by the Grantee to perform the
material duties assigned to him that is not cured to the reasonable satisfaction of the
Company within 30 days after written notice of such failure is provided to Grantee by the
Board or CEO (or by another officer of the Company or a Subsidiary who has been designated
by the Board or CEO for such purpose); (v) the engagement by the Grantee in any direct and
material conflict of interest with the Company or any Subsidiary without compliance with the
Companys or Subsidiarys conflict of interest policy, if any, then in effect; or (vi) the
engagement by the Grantee, without the written approval of the Board or CEO, in any material
activity which competes with the business of the Company or any Subsidiary or which would
result in a material injury to the business, reputation or goodwill of the Company or any
Subsidiary.
(d) CEO. The then-current Chief Executive Officer of the Company.
(e) Change in Control. Any of the events described in and subject to Section
6.8.
(f) Code. The Internal Revenue Code of 1986, as amended, and the regulations and other
authority promulgated thereunder by the appropriate governmental authority. References
herein to any provision of the Code shall refer to any successor provision thereto.
(g) Committee. The committee appointed by the Board to administer the Plan. If the
Company is a Publicly Held Corporation, the Plan shall be administered by the Committee
appointed by the Board consisting of not less than two directors who fulfill the
nonemployee director requirements of Rule 16b-3 under the Exchange Act and the outside
director requirements of Code Section 162(m). In either case, the Committee may be the
Compensation Committee of the Board, or any subcommittee of the Compensation Committee,
provided that the members of the Committee satisfy the requirements of the previous
provisions of this paragraph.
The Board shall have the power to fill vacancies on the Committee arising by
resignation, death, removal or otherwise. The Board, in its sole discretion, may bifurcate
the powers and duties of the Committee among one or more separate committees, or retain all
powers and duties of the Committee in a single Committee. The members of the Committee shall
serve at the discretion of the Board.
Notwithstanding the preceding paragraphs of this Section 1.2(g), the term
Committee as used in the Plan with respect to any Incentive Award for an Outside Director
shall refer to the entire Board. In the case of an Incentive Award for an Outside Director,
the Board shall have all the powers and responsibilities of the Committee hereunder as to
such Incentive Award, and any actions as to such Incentive Award may
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be acted upon only by the Board (unless it otherwise designates in its discretion).
When the Board exercises its authority to act in the capacity as the Committee hereunder
with respect to an Incentive Award for an Outside Director, it shall so designate with
respect to any action that it undertakes in its capacity as the Committee.
(h) Common Stock. The common stock of the Company, no par value, and any class of
common stock into which such common shares may hereafter be converted, reclassified or
recapitalized.
(i) Company. Astrotech Corporation, a corporation organized under the laws of the
State of Washington, and any successor in interest thereto.
(j) Consultant. An independent agent, consultant, attorney, an individual who has
agreed to become an Employee within the next six months, or any other individual who is not
an Outside Director or an Employee and who, in the opinion of the Committee, is (i) in a
position to contribute to the growth or financial success of the Company (or any Parent or
Subsidiary), (ii) is a natural person and (iii) provides bona fide services to the Company
(or any Parent or Subsidiary), which services are not in connection with the offer or sale
of securities in a capital raising transaction, and do not directly or indirectly promote or
maintain a market for the Companys securities.
(k) Covered Employee. A named executive officer who is one of the group of covered
employees, as defined in Code Section 162(m) and Treasury Regulation Section 1.162-27(c) (or
its successor), during any period that the Company is a Publicly Held Corporation.
(l) Disability. As determined by the Committee in its discretion exercised in good
faith, a physical or mental condition of the Grantee that would entitle him to payment of
disability income payments under the Companys long term disability insurance policy or plan
for employees, as then effective, if any; or in the event that the Grantee is not covered,
for whatever reason, under the Companys long-term disability insurance policy or plan,
Disability means a permanent and total disability as defined in Code Section 22(e)(3). A
determination of Disability may be made by a physician selected or approved by the Committee
and, in this respect, the Grantee shall submit to any reasonable examination(s) required in
the opinion of such physician.
(m) Employee. Any employee of the Company (or any Parent or Subsidiary) within the
meaning of Code Section 3401(c) including, without limitation, officers who are members of
the Board.
(n) Employment. Employment means that the individual is employed as an Employee, or
engaged as a Consultant or Outside Director, by the Company (or any Parent or Subsidiary),
or by any corporation issuing or assuming an Incentive Award in any transaction described in
Code Section 424(a), or by a parent corporation or a subsidiary corporation of such
corporation issuing or assuming such Incentive Award, as the parent-subsidiary relationship
shall be determined at the time of the corporate action described in Code Section 424(a). In
this regard, neither the transfer of a Grantee from
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Employment by the Company to Employment by any Parent or Subsidiary, nor the transfer
of a Grantee from Employment by any Parent or Subsidiary to Employment by the Company, shall
be deemed to be a termination of Employment of the Grantee. Moreover, the Employment of a
Grantee shall not be deemed to have been terminated because of an approved leave of absence
from active Employment on account of temporary illness, authorized vacation or granted for
reasons of professional advancement, education, or health, or during any period required to
be treated as a leave of absence by virtue of any applicable statute, Company personnel
policy or written agreement.
The term Employment for purposes of the Plan shall include (i) active performance of
agreed services by a Consultant for the Company (or any Parent or Subsidiary) or (ii)
current membership on the Board by an Outside Director.
All determinations hereunder regarding Employment, and termination of Employment, shall
be made by the Committee in its discretion.
(o) Exchange Act. The Securities Exchange Act of 1934, as amended.
(p) Fair Market Value. If the Company is a Publicly Held Corporation, the Fair Market
Value of one Share on the date in question shall be (i) the closing sales price on such day
for a Share as quoted on the National Association of Securities Dealers Automated Quotation
System (NASDAQ) or the national securities exchange on which Shares are then principally
listed or admitted to trading, or (ii) if not quoted on NASDAQ or other national securities
exchange, the average of the closing bid and asked prices for a Share as quoted by the
National Quotation Bureaus Pink Sheets or the National Association of Securities Dealers
OTC Bulletin Board System. If there was no public trade of Common Stock on the date in
question, Fair Market Value shall be determined by reference to the last preceding date on
which such a trade was so reported.
If the Company is not a Publicly Held Corporation at the time a determination of the
Fair Market Value of the Common Stock is required to be made hereunder, the determination of
Fair Market Value for purposes of the Plan shall be made by the Committee in its discretion.
In this respect, the Committee may rely on such financial data, appraisals, valuations,
experts, and other sources as, in its sole and absolute discretion, it deems advisable under
the circumstances. With respect to Stock Options, SARs, and other Incentive Awards subject
to Code Section 409A, such Fair Market Value shall be determined by the Committee consistent
with the requirements of Section 409A in order to satisfy the exception under Section 409A
for stock rights.
(q) Grantee. Any Employee, Consultant or Outside Director who is granted an Incentive
Award under the Plan.
(r) Immediate Family. With respect to a Grantee, the Grantees child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships.
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(s) Incentive Agreement. The written agreement entered into between the Company and
the Grantee setting forth the terms and conditions pursuant to which an Incentive Award is
granted under the Plan, as such agreement is further defined in Section 6.1.
(t) Incentive Award. A grant of an award under the Plan to a Grantee, including any
Nonstatutory Stock Option, Incentive Stock Option (ISO), Stock Appreciation Right (SAR),
Restricted Stock Award, Restricted Stock Unit or Other Stock-Based Award, as well as any
Supplemental Payment with respect thereto.
(u) Incentive Stock Option or ISO. A Stock Option granted by the Committee to an
Employee under Section 2 which is designated by the Committee as an Incentive Stock
Option and intended to qualify as an Incentive Stock Option under Code Section 422.
(v) Insider. If the Company is a Publicly Held Corporation, an individual who is, on
the relevant date, an officer, director or ten percent (10%) beneficial owner of any class
of the Companys equity securities that is registered pursuant to Section 12 of the Exchange
Act, all as defined under Section 16 of the Exchange Act.
(w) Nonstatutory Stock Option. A Stock Option granted by the Committee to a Grantee
under Section 2 that is not designated by the Committee as an Incentive Stock
Option.
(x) Option Price. The exercise price at which a Share may be purchased by the Grantee
of a Stock Option.
(y) Other Stock-Based Award. An award granted by the Committee to a Grantee under
Section 4.1 that is valued in whole or in part by reference to, or is otherwise
based upon, Common Stock.
(z) Outside Director. A member of the Board who is not, at the time of grant of an Incentive
Award, an employee of the Company or any Parent or Subsidiary.
(aa) Parent. Any corporation (whether now or hereafter existing) which constitutes a
parent of the Company, as defined in Code Section 424(e).
(bb) Performance-Based Award. A grant of an Incentive Award under the Plan pursuant to
Section 5 that is intended to satisfy the Performance-Based Exception.
(cc) Performance-Based Exception. The performance-based exception from the tax
deductibility limitations of Code Section 162(m), as prescribed in Code Section 162(m) and
Treasury Regulation Section 1.162-27(e) (or its successor), which is applicable during such
period that the Company is a Publicly Held Corporation.
(dd) Performance Criteria. The business criteria that are specified by the Committee
pursuant to Section 5 for an Incentive Award that is intended to qualify for the
Performance-Based Exception; the satisfaction of such business criteria during the
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Performance Period being required for the grant and/or vesting of the particular
Incentive Award to occur, as specified in the particular Incentive Agreement.
(ee) Performance Period. A period of time determined by the Committee over which
performance is measured for the purpose of determining a Grantees right to, and the payment
value of, any Incentive Award that is intended to qualify for the Performance-Based
Exception.
(ff) Plan. Astrotech Corporation 2011 Stock Incentive Plan, as effective on the
Effective Date, which is set forth herein and as it may be amended from time to time.
(gg) Plan Year. The calendar year.
(hh) Publicly Held Corporation. A corporation issuing any class of common equity
securities required to be registered under Section 12 of the Exchange Act.
(ii) Restricted Stock. Common Stock that is issued or transferred to a Grantee
pursuant to Section 3.
(jj) Restricted Stock Award. An authorization by the Committee to issue or transfer
Restricted Stock to a Grantee pursuant to Section 3.
(kk) Restricted Stock Unit. A unit granted to a Grantee pursuant to Section
4.1 which entitles him to receive a Share or cash on the vesting date, as specified in
the Incentive Agreement.
(ll) Restriction Period. The period of time determined by the Committee and set forth
in the Incentive Agreement during which the transfer of Restricted Stock by the Grantee is
restricted.
(mm) Retirement. The voluntary termination of Employment from the Company or any
Parent or Subsidiary constituting retirement for age on any date after the Employee attains
the normal retirement age of 65 years, or such other age as may be designated by the
Committee in the Employees Incentive Agreement.
(nn) Share. A share of the Common Stock of the Company.
(oo) Share Pool. The number of shares authorized for issuance under Section
1.4, as adjusted for (i) awards and payouts under Section 1.5 and (ii) changes
and adjustments as described in Section 6.6.
(pp) Spread. The difference between the exercise price per Share specified in a SAR
grant and the Fair Market Value of a Share on the date of exercise of the SAR.
(qq) Stock Appreciation Right or SAR. A Stock Appreciation Right as described in
Section 2.5.
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(rr) Stock Option or Option. Pursuant to Section 2, (i) an Incentive Stock
Option granted to an Employee, or (ii) a Nonstatutory Stock Option granted to an Employee,
Consultant or Outside Director, whereunder such option the Grantee has the right to purchase
Shares of Common Stock. In accordance with Code Section 422, only an Employee may be granted
an Incentive Stock Option.
(ss) Subsidiary. Any company (whether a corporation, partnership, joint venture or
other form of entity) in which the Company or a corporation in which the Company owns a
majority of the shares of capital stock, directly or indirectly, owns a greater than 50%
equity interest except that, with respect to the issuance of Incentive Stock Options, the
term Subsidiary shall have the same meaning as the term subsidiary corporation as
defined in Code Section 424(f) as required by Code Section 422.
(tt) Supplemental Payment. Any amount, as described in Sections 2.4, 3.4 and/or
4.3, that is dedicated to payment of income taxes which are payable by the Grantee
resulting from an Incentive Award.
1.3 Plan Administration
(a) Authority of the Committee. Except as may be limited by law and subject to the
provisions herein, the Committee shall have the complete power and authority to (i) select
Grantees who shall participate in the Plan; (ii) determine the sizes, duration and types of
Incentive Awards; (iii) determine the terms and conditions of Incentive Awards and Incentive
Agreements; (iv) determine whether any Shares subject to Incentive Awards will be subject to
any restrictions on transfer; (v) construe and interpret the Plan and any Incentive
Agreement or other agreement entered into under the Plan; and (vi) establish, amend, or
waive rules for the Plans administration. Further, the Committee shall make all other
determinations which may be necessary or advisable for the administration of the Plan.
(b) Meetings. The Committee shall designate a chairman from among its members who
shall preside at its meetings, and shall designate a secretary, without regard to whether
that person is a member of the Committee, who shall keep the minutes of the proceedings and
all records, documents, and data pertaining to its administration of the Plan. Meetings
shall be held at such times and places as shall be determined by the Committee and the
Committee may hold telephonic meetings. The Committee may take any action otherwise proper
under the Plan by the affirmative vote, taken with or without a meeting, of a majority of
its members. The Committee may authorize any one or more of its members or any officer of
the Company to execute and deliver documents on behalf of the Committee.
(c) Decisions Binding. All determinations and decisions of the Committee shall be made
in its discretion pursuant to the provisions of the Plan, and shall be final, conclusive and
binding on all persons including the Company, its shareholders, Employees, Grantees, and
their estates and beneficiaries. The Committees decisions and determinations with respect
to any Incentive Award need not be uniform and may be
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made selectively among Incentive Awards and Grantees, whether or not such Incentive
Awards are similar or such Grantees are similarly situated.
(d) Modification of Outstanding Incentive Awards. Subject to the shareholder approval
requirements of Section 7.7 if applicable, the Committee may, in its discretion,
provide for the extension of the exercisability of an Incentive Award, accelerate the
vesting or exercisability of an Incentive Award, eliminate or make less restrictive any
restrictions contained in an Incentive Award, waive any restriction or other provisions of
an Incentive Award, or otherwise amend or modify an Incentive Award in any manner that (i)
is not adverse to the Grantee to whom such Incentive Award was granted, (ii) is consented to
by such Grantee, (iii) does not cause the Incentive Award to provide for the deferral of
compensation in a manner that does not comply with Code Section 409A or is not exempt from
Section 409A (unless otherwise determined by the Committee), or (iv) does not contravene the
requirements of the Performance-Based Exception under Code Section 162(m), if applicable.
With respect to an Incentive Award that is an ISO, no adjustment thereto shall be made to
the extent constituting a modification within the meaning of Code Section 424(h)(3) unless
otherwise agreed to by the Grantee in writing. Notwithstanding the above provisions of this
subsection, no amendment or modification of an Incentive Award shall be made to the extent
such modification results in any Stock Option with an exercise price less than 100% of the
Fair Market Value per Share on the date of grant (110% for Grantees of ISOs who are 10% or
greater shareholders pursuant to Section 1.7(b)).
(e) Delegation of Authority. The Committee may delegate to designated officers or
other employees of the Company any of its duties and authority under the Plan pursuant to
such conditions or limitations as the Committee may establish from time to time, including,
without limitation, the authority to recommend Grantees and the forms and terms of their
Incentive Awards; provided, however, the Committee may not delegate to any person the
authority (i) to grant Incentive Awards or (ii) if the Company is a Publicly Held
Corporation, to take any action which would contravene the requirements of Rule 16b-3 under
the Exchange Act, the Performance-Based Exception under Code Section 162(m), or the
Sarbanes-Oxley Act of 2002.
(f) Expenses of Committee. The Committee may employ legal counsel, including, without
limitation, independent legal counsel and counsel regularly employed by the Company, and
other agents as the Committee may deem appropriate for the administration of the Plan. The
Committee may rely upon any opinion or computation received from any such counsel or agent.
All expenses incurred by the Committee in interpreting and administering the Plan,
including, without limitation, meeting expenses and professional fees, shall be paid by the
Company.
(g) Surrender of Previous Incentive Awards. The Committee may, in its discretion,
grant Incentive Awards to Grantees on the condition that such Grantees surrender to the
Committee for cancellation such other Incentive Awards (including, without limitation,
Incentive Awards with higher exercise prices) as the Committee directs. Incentive Awards
granted on the condition precedent of surrender of outstanding Incentive Awards shall not
count against the limits set forth in Section 1.4 until such time
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as such previous Incentive Awards are surrendered and cancelled. No surrender of
Incentive Awards shall be made under this Section 1.3(g) if such surrender causes
any Incentive Award to provide for the deferral of compensation in a manner that is subject
to taxation under Code Section 409A (unless otherwise determined by the Committee).
(h) Indemnification. Each person who is or was a member of the Committee shall be
indemnified by the Company against and from any damage, loss, liability, cost and expense
that may be imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be a party or in which he may be
involved by reason of any action taken or failure to act under the Plan, except for any such
act or omission constituting willful misconduct or gross negligence. Each such person shall
be indemnified by the Company for all amounts paid by him in settlement thereof, with the
Companys approval, or paid by him in satisfaction of any judgment in any such action, suit,
or proceeding against him, provided he shall give the Company an opportunity, at its own
expense, to handle and defend the same before he undertakes to handle and defend it on his
own behalf. The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled (i) under the Companys
Articles or Certificate of Incorporation or Bylaws, (ii) pursuant to any separate
indemnification or hold harmless agreement with the Company, (iii) as a matter of law,
contract or otherwise, or (iv) any power that the Company may have to indemnify them or hold
them harmless.
1.4 Shares of Common Stock Available for Incentive Awards
Subject to adjustment under Section 6.6, there shall be available for Incentive Awards
that are granted wholly or partly in Common Stock (including rights or Stock Options that may be
exercised for or settled in Common Stock) One Million and Seven Hundred and Fifty Thousand
(1,750,000) Shares of Common Stock. Pursuant to Section 1.5, the number of Shares that are
the subject of Incentive Awards under this Plan, which are forfeited or terminated, expire
unexercised, are settled in cash in lieu of Common Stock or in a manner such that all or some of
the Shares covered by an Incentive Award are not issued to a Grantee or are exchanged for Incentive
Awards that do not involve Common Stock, shall again immediately become available for Incentive
Awards hereunder. The aggregate number of Shares which may be issued upon exercise of ISOs shall
be Eight Hundred and Seventy-Five Thousand (875,000) of the Shares reserved pursuant to the first
sentence of this paragraph. For purposes of counting Shares against the ISO maximum number of
reserved Shares, the net number of Shares issued pursuant to the exercise of an ISO shall be
counted. The Committee may from time to time adopt and observe such procedures concerning the
counting of Shares against the Plan maximum as it may deem appropriate.
During any period that the Company is a Publicly Held Corporation, then unless the Committee
determines that a particular Incentive Award granted to a Covered Employee is not intended to
comply with the Performance-Based Exception, the following rules shall apply to grants of Incentive
Awards to Covered Employees:
|
(a) |
|
Subject to adjustment as provided in Section 6.6, the maximum aggregate
number of Shares of Common Stock attributable to Incentive Awards paid out in Shares |
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|
|
that may be granted (in the case of Stock Options and SARs) or that may vest (in the
case of Restricted Stock, Restricted Stock Units or Other Stock-Based Awards), as
applicable, in any calendar year pursuant to any Incentive Award held by any individual
Covered Employee shall be Eight Hundred Thousand (800,000) Shares. |
(b) The maximum aggregate cash payout (with respect to any Incentive Awards paid out in
cash) in any calendar year which may be made to any Covered Employee shall be Five Million
dollars ($5,000,000).
(c) With respect to any Stock Option or SAR granted to a Covered Employee that is
canceled or repriced, the number of Shares subject to such Stock Option or SAR shall
continue to count against the maximum number of Shares that may be the subject of Stock
Options or SARs granted to such Covered Employee hereunder and, in this regard, such maximum
number shall be determined in accordance with Code Section 162(m).
(d) The limitations of subsections (a), (b) and (c) above shall be construed and
administered so as to comply with the Performance-Based Exception.
1.5 Share Pool Adjustments for Awards and Payouts
The following Incentive Awards shall reduce, on a one Share for one Share basis, the number of
Shares authorized for issuance under the Share Pool:
(a) Stock Option;
(b) SAR;
(c) Restricted Stock Award; and
(d) A Restricted Stock Unit or Other Stock-Based Award in Shares.
The following transactions shall restore, on a one Share for one Share basis, the number of
Shares authorized for issuance under the Share Pool:
(e) A payout of a Restricted Stock Award, Restricted Stock Unit, SAR, or Other
Stock-Based Award in the form of cash and not Shares (but not the cashless exercise of a
Stock Option with a broker, as provided in Section 2.3(a));
(f) A cancellation, termination, expiration, forfeiture, or lapse for any reason of any
Shares subject to an Incentive Award; and
(g) Payment of an Option Price by withholding Shares which otherwise would be acquired
on exercise (i.e., the Share Pool shall be increased by the number of Shares withheld in
payment of the Option Price).
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1.6 Common Stock Available
The Common Stock available for issuance or transfer under the Plan shall be made available
from Shares now or hereafter (a) held in the treasury of the Company, (b) authorized but unissued
shares, or (c) Shares to be purchased or acquired by the Company. No fractional shares shall be
issued under the Plan; payment for fractional shares shall be made in cash.
1.7 Participation
(a) Eligibility. The Committee shall from time to time designate those Employees,
Consultants and/or Outside Directors, if any, to be granted Incentive Awards under the Plan,
the type of Incentive Awards granted, the number of Shares, Stock Options, rights or units,
as the case may be, which shall be granted to each such person, and any other terms or
conditions relating to the Incentive Awards as it may deem appropriate to the extent
consistent with the provisions of the Plan. A Grantee who has been granted an Incentive
Award may, if otherwise eligible, be granted additional Incentive Awards at any time.
(b) Incentive Stock Option Eligibility. No Consultant or Outside Director shall be
eligible for the grant of any Incentive Stock Option. In addition, no Employee shall be
eligible for the grant of any Incentive Stock Option who owns or would own immediately
before the grant of such Incentive Stock Option, directly or indirectly, stock possessing
more than ten percent (10%) of the total combined voting power of all classes of stock of
the Company, or any Parent or Subsidiary. This restriction does not apply if, at the time
such Incentive Stock Option is granted, the Incentive Stock Option exercise price is at
least one hundred and ten percent (110%) of the Fair Market Value on the date of grant and
the Incentive Stock Option by its terms is not exercisable after the expiration of five (5)
years from the date of grant. For the purpose of the immediately preceding sentence, the
attribution rules of Code Section 424(d) shall apply for the purpose of determining an
Employees percentage ownership in the Company or any Parent or Subsidiary. This paragraph
shall be construed consistent with the requirements of Code Section 422.
1.8 Types of Incentive Awards
The types of Incentive Awards under the Plan are Stock Options, Stock Appreciation Rights and
Supplemental Payments as described in Section 2, Restricted Stock Awards and Supplemental
Payments as described in Section 3, Restricted Stock Units and Other Stock-Based Awards and
Supplemental Payments as described in Section 4, or any combination of the foregoing.
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SECTION 2.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
2.1 Grant of Stock Options
The Committee is authorized to grant (a) Nonstatutory Stock Options to Employees, Consultants
and/or Outside Directors and (b) Incentive Stock Options to Employees only, in accordance with the
terms and conditions of the Plan, and with such additional terms and conditions, not inconsistent
with the Plan, as the Committee shall determine in its discretion. Successive grants may be made to
the same Grantee regardless whether any Stock Option previously granted to such person remains
unexercised.
2.2 Stock Option Terms
(a) Written Agreement. Each grant of a Stock Option shall be evidenced by a written
Incentive Agreement. Among its other provisions, each Incentive Agreement shall set forth
the extent to which the Grantee shall have the right to exercise the Stock Option following
termination of the Grantees Employment. Such provisions shall be determined in the
discretion of the Committee, shall be included in the Grantees Incentive Agreement, and
need not be uniform among all Stock Options issued pursuant to the Plan.
(b) Number of Shares. Each Stock Option shall specify the number of Shares of Common
Stock to which it pertains.
(c) Exercise Price. The exercise price per Share of Common Stock under each Stock
Option shall be (i) not less than 100% of the Fair Market Value per Share on the date the
Stock Option is granted and (ii) specified in the Incentive Agreement; provided, however, if
the Grantee of an ISO is a 10% or greater shareholder pursuant to Section 1.7(b)),
the exercise price for the ISO shall not be less than 110% of the Fair Market Value on the
date of grant. Each Stock Option shall specify the method of exercise which shall be
consistent with Section 2.3(a).
(d) Term. In the Incentive Agreement, the Committee shall fix the term of each Stock
Option which shall not be more than (i) ten (10) years from the date of grant, or (ii) five
(5) years from the date of grant for an ISO granted to 10% or greater shareholder pursuant
to Section 1.7(b)).
(e) Exercise. The Committee shall determine the time or times at which a Stock Option
may be exercised, in whole or in part. Each Stock Option may specify the required period of
continuous Employment and/or the Performance Criteria to be achieved before the Stock Option
or portion thereof will become exercisable. Each Stock Option, the exercise of which, or the
timing of the exercise of which, is dependent, in whole or in part, on the achievement of
designated Performance Criteria, may specify a minimum level of achievement in respect of
the specified Performance Criteria below which no Stock Options will be exercisable and a
method for determining the number of Stock Options that will be exercisable if performance
is at or above such minimum but
12
short of full achievement of the Performance Criteria. All such terms and conditions
shall be set forth in the Incentive Agreement.
(f) $100,000 Annual Limit on Incentive Stock Options. Notwithstanding any contrary
provision in the Plan, a Stock Option designated as an ISO shall be an ISO only to the
extent that the aggregate Fair Market Value (determined as of the time the ISO is granted)
of the Shares of Common Stock with respect to which ISOs are exercisable for the first time
by the Grantee during any single calendar year (under the Plan and any other stock option
plans of the Company and its Subsidiaries or Parent) does not exceed $100,000. This
limitation shall be applied by taking ISOs into account in the order in which they were
granted and shall be construed in accordance with Section 422(d) of the Code. To the extent
that a Stock Option intended to constitute an ISO exceeds the $100,000 limitation (or any
other limitation under Code Section 422), the portion of the Stock Option that exceeds the
$100,000 limitation (or violates any other limitation under Code Section 422) shall be
deemed a Nonstatutory Stock Option. In such event, all other terms and provisions of such
Stock Option grant shall remain unchanged.
2.3 Stock Option Exercises
(a) Method of Exercise and Payment. Stock Options shall be exercised by the delivery
of a signed written notice of exercise to the Company, which must be received as of a date
set by the Company in advance of the effective date of the proposed exercise. The notice
shall set forth the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
The Option Price upon exercise of any Stock Option shall be payable to the Company in
full either: (i) in cash or its equivalent; or (ii) subject to prior approval by the
Committee in its discretion, by tendering previously acquired Shares having an aggregate
Fair Market Value at the time of exercise equal to the Option Price, (iii) subject to prior
approval by the Committee in its discretion, by withholding Shares which otherwise would be
acquired on exercise having an aggregate Fair Market Value at the time of exercise equal to
the total Option Price; or (iv) subject to prior approval by the Committee in its
discretion, by a combination of (i), (ii), and (iii) above.
Any payment in Shares shall be effected by the surrender of such Shares to the Company
in good form for transfer and shall be valued at their Fair Market Value on the date when
the Stock Option is exercised. Unless otherwise permitted by the Committee in its
discretion, the Grantee shall not surrender, or attest to the ownership of, Shares in
payment of the Option Price if such action would cause the Company to recognize compensation
expense (or additional compensation expense) with respect to the Stock Option for financial
accounting reporting purposes.
The Committee, in its discretion, also may allow the Option Price to be paid with such
other consideration as shall constitute lawful consideration for the issuance of Shares
(including, without limitation, effecting a cashless exercise with a broker of the
Option), subject to applicable securities law restrictions and tax withholdings, or by any
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other means which the Committee determines to be consistent with the Plans purpose and
applicable law. At the direction of the Grantee, the broker will either (i) sell all of the
Shares received when the Option is exercised and pay the Grantee the proceeds of the sale
(minus the Option Price, withholding taxes and any fees due to the broker); or (ii) sell
enough of the Shares received upon exercise of the Option to cover the Option Price,
withholding taxes and any fees due the broker and deliver to the Grantee (either directly or
through the Company) a stock certificate for the remaining Shares. Dispositions to a broker
effecting a cashless exercise are not exempt under Section 16 of the Exchange Act if the
Company is a Publicly Held Corporation. Moreover, in no event will the Committee allow the
Option Price to be paid with a form of consideration, including a loan or a cashless
exercise, if such form of consideration would violate the Sarbanes-Oxley Act of 2002 as
determined by the Committee.
As soon as practicable after receipt of a written notification of exercise and full
payment, the Company shall deliver, or cause to be delivered, to or on behalf of the
Grantee, in the name of the Grantee or other appropriate recipient, evidence of ownership
for the number of Shares purchased under the Stock Option.
Subject to Section 6.4, during the lifetime of a Grantee, each Option granted
to the Grantee shall be exercisable only by the Grantee (or his legal guardian in the event
of his Disability) or by a broker-dealer acting on his behalf pursuant to a cashless
exercise under the foregoing provisions of this Section 2.3(a).
(b) Restrictions on Share Transferability. The Committee may impose such restrictions
on any grant of Stock Options or on any Shares acquired pursuant to the exercise of a Stock
Option as it may deem advisable, including, without limitation, restrictions under (i) any
shareholders agreement, buy/sell agreement, right of first refusal, non-competition, and
any other agreement between the Company and any of its securities holders or employees; (ii)
any applicable federal securities laws; (iii) the requirements of any stock exchange or
market upon which such Shares are then listed and/or traded; or (iv) any blue sky or state
securities law applicable to such Shares. Any certificate issued to evidence Shares issued
upon the exercise of an Incentive Award may bear such legends and statements as the
Committee shall deem advisable to assure compliance with applicable federal and state laws
and regulations.
Any Grantee or other person exercising an Incentive Award shall be required, if
requested by the Committee, to give a written representation that the Incentive Award and
the Shares subject to the Incentive Award will be acquired for investment and not with a
view to public distribution; provided, however, that the Committee, in its discretion, may
release any person receiving an Incentive Award from any such representations either prior
to or subsequent to the exercise of the Incentive Award.
(c) Notification of Disqualifying Disposition of Shares from Incentive Stock Options.
Notwithstanding any other provision of the Plan, a Grantee who disposes of Shares of Common
Stock acquired upon the exercise of an Incentive Stock Option by a sale or exchange either
(i) within two (2) years after the date of the grant of the Incentive Stock Option under
which the Shares were acquired or (ii) within one (1) year after the
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transfer of such Shares to him pursuant to exercise, shall promptly notify the Company
of such disposition, the amount realized and his adjusted basis in such Shares.
(d) Proceeds of Option Exercise. The proceeds received by the Company from the sale of
Shares pursuant to Stock Options exercised under the Plan shall be used for general
corporate purposes.
2.4 Supplemental Payment on Exercise of Nonstatutory Stock Options
The Committee, either at the time of grant or exercise of any Nonstatutory Stock Option, may
provide in the Incentive Agreement for a Supplemental Payment by the Company to the Grantee with
respect to the exercise of any Nonstatutory Stock Option. The Supplemental Payment shall be in the
amount specified by the Committee, which amount shall not exceed the amount necessary to pay the
federal and state income tax payable with respect to both the exercise of the Nonstatutory Stock
Option and the receipt of the Supplemental Payment, assuming the holder is taxed at either the
maximum effective income tax rate applicable thereto or at a lower tax rate as deemed appropriate
by the Committee in its discretion. No Supplemental Payments will be made with respect to any SARs
or ISOs.
2.5 Stock Appreciation Rights
(a) Grant. The Committee may grant Stock Appreciation Rights to any Employee,
Consultant or Outside Director. Any SARs granted under the Plan are intended to satisfy the
requirements under Code Section 409A to the effect that such SARs do not provide for the
deferral of compensation that is subject to taxation under Code Section 409A.
(b) General Provisions. The terms and conditions of each SAR shall be evidenced by an
Incentive Agreement. The exercise price per Share shall not be less than one hundred percent
(100%) of the Fair Market Value of a Share on the grant date of the SAR. The term of the SAR
shall be determined by the Committee but shall not be greater than ten (10) years from the
date of grant. The Committee cannot include any feature for the deferral of compensation
other than the deferral of recognition of income until exercise of the SAR.
(c) Exercise. SARs shall be exercisable subject to such terms and conditions as the
Committee shall specify in the Incentive Agreement for the SAR grant. No SAR granted to an
Insider may be exercised prior to six (6) months from the date of grant, except in the event
of his death or Disability which occurs prior to the expiration of such six-month period if
so permitted under the Incentive Agreement.
(d) Settlement. Upon exercise of the SAR, the Grantee shall receive an amount equal to the Spread.
The Spread, less applicable withholdings, shall be payable only in cash or in Shares, or a
combination of both, as specified in the Incentive Agreement, within 30 calendar days of the
exercise date. In addition, the Incentive Agreement under which such SARs are awarded, or any
other agreements or arrangements, shall not provide that the Company will purchase any Shares
delivered to the Grantee as a result of the exercise or vesting of a SAR.
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SECTION 3.
RESTRICTED STOCK
3.1 Award of Restricted Stock
(a) Grant. With respect to a Grantee who is an Employee, Consultant or Outside
Director, Shares of Restricted Stock, which may be designated as a Performance-Based Award
in the discretion of the Committee, may be awarded by the Committee with such restrictions
during the Restriction Period as the Committee shall designate in its discretion. Any such
restrictions may differ with respect to a particular Grantee. Restricted Stock shall be
awarded for no additional consideration or such additional consideration as the Committee
may determine, which consideration may be less than, equal to or more than the Fair Market
Value of the shares of Restricted Stock on the grant date. The terms and conditions of each
grant of Restricted Stock shall be evidenced by an Incentive Agreement and, during the
Restriction Period, such Shares of Restricted Stock must remain subject to a substantial
risk of forfeiture within the meaning given to such term under Code Section 83. Any
Restricted Stock Award may, at the time of grant, be designated by the Committee as a
Performance-Based Award that is intended to qualify for the Performance-Based Exception.
(b) Immediate Transfer Without Immediate Delivery of Restricted Stock. Unless
otherwise specified in the Grantees Incentive Agreement, each Restricted Stock Award shall
constitute an immediate transfer of the record and beneficial ownership of the Shares of
Restricted Stock to the Grantee in consideration of the performance of services as an
Employee, Consultant or Outside Director, as applicable, entitling such Grantee to all
voting and other ownership rights in such Shares.
As specified in the Incentive Agreement, a Restricted Stock Award may limit the
Grantees dividend rights during the Restriction Period in which the shares of Restricted
Stock are subject to a substantial risk of forfeiture (within the meaning given to such
term under Code Section 83) and restrictions on transfer. In the Incentive Agreement, the
Committee may apply any restrictions to the dividends that the Committee deems appropriate.
Without limiting the generality of the preceding sentence, if the grant or vesting of Shares
of a Restricted Stock Award granted to a Covered Employee, is designed to comply with the
requirements of the Performance-Based Exception, the Committee may apply any restrictions it
deems appropriate to the payment of dividends declared with respect to such Shares of
Restricted Stock, such that the dividends and/or the Shares of Restricted Stock maintain
eligibility for the Performance-Based Exception. In the event that any dividend constitutes
a derivative security or an equity security pursuant to the rules under Section 16 of the
Exchange Act, if applicable, such dividend shall be subject to a vesting period equal to the
remaining vesting period of the Shares of Restricted Stock with respect to which the
dividend is paid.
Shares awarded pursuant to a grant of Restricted Stock, whether or not under a
Performance-Based Award, may be issued in the name of the Grantee and held, together with a
stock power endorsed in blank, by the Committee or Company (or their delegates)
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or in trust or in escrow pursuant to an agreement satisfactory to the Committee, as determined by the
Committee, until such time as the restrictions on transfer have expired. All such terms and
conditions shall be set forth in the particular Grantees Incentive Agreement. The Company
or Committee (or their delegates) shall issue to the Grantee a receipt evidencing the
certificates held by it which are registered in the name of the Grantee.
3.2 Restrictions
(a) Forfeiture of Restricted Stock. Restricted Stock awarded to a Grantee may be
subject to the following restrictions until the expiration of the Restriction Period: (i) a
restriction that constitutes a substantial risk of forfeiture (as defined in Code Section
83), and a restriction on transferability; (ii) unless otherwise specified by the Committee
in the Incentive Agreement, the Restricted Stock that is subject to restrictions which are
not satisfied shall be forfeited and all rights of the Grantee to such Shares shall
terminate; and (iii) any other restrictions that the Committee determines in advance are
appropriate, including, without limitation, rights of repurchase or first refusal in the
Company or provisions subjecting the Restricted Stock to a continuing substantial risk of
forfeiture in the hands of any transferee. Any such restrictions shall be set forth in the
particular Grantees Incentive Agreement.
(b) Issuance of Certificates. Reasonably promptly after the date of grant with respect
to Shares of Restricted Stock, the Company shall cause to be issued a stock certificate,
registered in the name of the Grantee to whom such Shares of Restricted Stock were granted,
evidencing such Shares; provided, however, that the Company shall not cause to be issued
such a stock certificate unless it has received a stock power duly endorsed in blank with
respect to such Shares. Each such stock certificate shall bear the following legend or any
other legend approved by the Company:
The transferability of this certificate and the shares of stock represented
hereby are subject to the restrictions, terms and conditions (including
forfeiture and restrictions against transfer) contained in the Astrotech
Corporation 2011 Stock Incentive Plan and an Incentive Agreement entered
into between the registered owner of such shares and Astrotech Corporation.
A copy of the Plan and Incentive Agreement are on file in the main corporate
office of Astrotech Corporation.
Such legend shall not be removed from the certificate evidencing such Shares of Restricted
Stock unless and until such Shares vest pursuant to the terms of the Incentive Agreement.
(c) Removal of Restrictions. The Committee, in its discretion, shall have the
authority to remove any or all of the restrictions on the Restricted Stock if it determines
that, by reason of a change in applicable law or another change in circumstance arising
after the grant date of the Restricted Stock, such action is necessary or appropriate.
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3.3 Delivery of Shares of Common Stock
Subject to withholding taxes under Section 7.3 and to the terms of the Incentive
Agreement, a stock certificate evidencing the Shares of Restricted Stock with respect to which the
restrictions in the Incentive Agreement have been satisfied shall be delivered to the Grantee or
other appropriate recipient free of restrictions.
3.4 Supplemental Payment on Vesting of Restricted Stock
The Committee, either at the time of grant or vesting of Restricted Stock, may provide for a
Supplemental Payment by the Company to the holder in an amount specified by the Committee, which
amount shall not exceed the amount necessary to pay the federal and state income tax payable with
respect to both the vesting of the Restricted Stock and receipt of the Supplemental Payment,
assuming the Grantee is taxed at either the maximum effective income tax rate applicable thereto or
at a lower tax rate as deemed appropriate by the Committee in its discretion.
SECTION 4.
OTHER STOCK-BASED AWARDS
4.1 Grant of Other Stock-Based Awards
Other Stock-Based Awards may be awarded by the Committee to Grantees that are payable in
Shares or in cash, as determined in the discretion of the Committee to be consistent with the goals
of the Company. Other types of Stock-Based Awards that are payable in Shares include, without
limitation, purchase rights, Shares awarded that are not subject to any restrictions or conditions,
Shares awarded subject to the satisfaction of specified Performance Criteria, convertible or
exchangeable debentures, other rights convertible into Shares, Incentive Awards valued by reference
to the performance of a specified Subsidiary, division or department of the Company, and settlement
in cancellation of rights of any person with a vested interest in any other plan, fund, program or
arrangement that is or was sponsored, maintained or participated in by the Company (or any Parent
or Subsidiary). As is the case with other types of Incentive Awards, Other Stock-Based Awards may
be awarded either alone or in addition to or in conjunction with any other Incentive Awards. Other
Stock-Based Awards that are payable in Shares are not intended to be deferred compensation subject
to taxation under Code Section 409A, unless otherwise determined by the Committee at the time of
grant.
In addition to Other Stock-Based Awards that are payable in Shares, the Committee may award
Restricted Stock Units to a Grantee that are payable in Shares or cash, or in a combination
thereof. Restricted Stock Units are not intended to be deferred compensation that is subject to
Code Section 409A. During the period beginning on the date such Incentive Award is granted and
ending on the payment date specified in the Incentive Agreement, the Grantees right to payment
under the Incentive Agreement must remain subject to a substantial risk of forfeiture within the
meaning of such term under Code Section 409A. In addition, payment to the Grantee
under the Incentive Agreement shall be made within two and one-half months (21/2) months
18
following the end of the calendar year in which the substantial risk of forfeiture lapses unless an
earlier payment date is specified in the Incentive Agreement.
4.2 Other Stock-Based Award Terms
(a) Written Agreement. The terms and conditions of each grant of an Other Stock-Based
Award shall be evidenced by an Incentive Agreement.
(b) Purchase Price. Except to the extent that an Other Stock-Based Award is granted in
substitution for an outstanding Incentive Award or is delivered upon exercise of a Stock
Option, the amount of consideration required to be received by the Company shall be either
(i) no consideration other than services rendered (in the case of authorized and unissued shares), or to be rendered, by the Grantee, or (ii) as otherwise specified in the Incentive
Agreement.
(c) Performance Criteria and Other Terms. The Committee may specify Performance
Criteria for (i) vesting in Other Stock-Based Awards and (ii) payment thereof to the
Grantee, as it may determine in its discretion. The extent to which any such Performance
Criteria have been met shall be determined and certified by the Committee in accordance with
the requirements to qualify for the Performance-Based Exception under Code Section 162(m).
All terms and conditions of Other Stock-Based Awards shall be determined by the Committee
and set forth in the Incentive Agreement.
4.3 Supplemental Payment on Other Stock-Based Awards
The Committee, either at the time of grant or vesting of an Other Stock-Based Award, may
provide for a Supplemental Payment by the Company to the holder in an amount specified by the
Committee, which amount shall not exceed the amount necessary to pay the federal and state income
tax payable with respect to both the vesting of the Other Stock-Based Award and receipt of the
Supplemental Payment, assuming the Grantee is taxed at either the maximum effective income tax rate
applicable thereto or at a lower tax rate as deemed appropriate by the Committee in its discretion.
SECTION 5.
PERFORMANCE-BASED AWARDS AND PERFORMANCE CRITERIA
As determined by the Committee at the time of grant, Performance-Based Awards may be granted
subject to performance objectives relating to one or more of the following within the meaning of
Code Section 162(m) (the Performance Criteria) in order to qualify for the Performance-Based
Exception:
(a) profits (including, but not limited to, profit growth, net operating profit or
economic profit);
(b) profit-related return ratios;
19
(c) return measures (including, but not limited to, return on assets, capital, equity,
investment or sales);
(d) cash flow (including, but not limited to, operating cash flow, free cash flow or
cash flow return on capital or investments);
(e) earnings (including but not limited to, total shareholder return, earnings per
share or earnings before or after taxes);
(f) net sales growth;
(g) net earnings or income (before or after taxes, interest, depreciation and/or
amortization);
(h) gross, operating or net profit margins;
(i) productivity ratios;
(j) share price (including, but not limited to, growth measures and total shareholder
return);
(k) turnover of assets, capital, or inventory;
(l) expense targets;
(m) margins;
(n) measures of health, safety or environment;
(o) operating efficiency;
(p) customer service or satisfaction;
(q) market share;
(r) credit quality;
(s) debt ratios (e.g., debt to equity and debt to total capital); and
(t) working capital targets.
Performance Criteria may be stated in absolute terms or relative to comparison companies or
indices to be achieved during a Performance Period. In the Incentive Agreement, the Committee
shall establish one or more Performance Criteria for each Incentive Award that is intended to
qualify for the Performance-Based Exception on its grant date.
In establishing the Performance Criteria for each applicable Incentive Award, the Committee
may provide that the effect of specified extraordinary or unusual events will be included or
excluded (including, but not limited to, items of gain, loss or expense determined to
20
be extraordinary or unusual in nature or infrequent in occurrence, or related to the disposal
of a segment of business or a change in accounting principle, each as determined in accordance with
the standards under Opinion No. 30 of the Accounting Principles Board (APB Opinion 30) or any
successor or other authoritative financial accounting standards, as determined by the Committee).
The terms of the stated Performance Criteria for each applicable Incentive Award, whether for a
Performance Period of one (1) year or multiple years, must preclude the Committees discretion to
increase the amount payable to any Grantee that would otherwise be due upon attainment of the
Performance Criteria, but may permit the Committee to reduce the amount otherwise payable to the
Grantee in the Committees discretion.
The Performance Criteria specified in any Incentive Agreement need not be applicable to all
Incentive Awards, and may be particular to an individual Grantees function or business unit. The
Committee may establish the Performance Criteria of the Company (or any entity which is affiliated
by common ownership with the Company) as determined and designated by the Committee, in its
discretion, in the Incentive Agreement.
Performance-Based Awards will be granted in the discretion of the Committee and will be (a)
sufficiently objective so that an independent person or entity having knowledge of the relevant
facts could determine the amount payable to Grantee, if applicable, and whether the pre-determined
goals have been achieved with respect to the Incentive Award, (b) established at a time when the
performance outcome is substantially uncertain, (c) established in writing no later than ninety
(90) days after the commencement of the Performance Period to which they apply, and (d) based on
operating earnings, performance against peers, earnings criteria or such other criteria as provided
in this Section 5.
SECTION 6.
PROVISIONS RELATING TO PLAN PARTICIPATION
6.1 Incentive Agreement
Each Grantee to whom an Incentive Award is granted shall be required to enter into an
Incentive Agreement with the Company, in such a form as is provided by the Committee. The Incentive
Agreement shall contain specific terms as determined by the Committee, in its discretion, with
respect to the Grantees particular Incentive Award. Such terms need not be uniform among all
Grantees or any similarly situated Grantees. The Incentive Agreement may include, without
limitation, vesting, forfeiture and other provisions particular to the particular Grantees
Incentive Award, as well as, for example, provisions to the effect that the Grantee (a) shall not
disclose any confidential information acquired during Employment with the Company, (b) shall abide
by all the terms and conditions of the Plan and such other terms and conditions as may be imposed
by the Committee, (c) shall not interfere with the employment or other service of any employee, (d)
shall not compete with the Company or become involved in a conflict of interest with the interests
of the Company, (e) shall forfeit an Incentive Award if terminated for Cause, (f) shall not be
permitted to make an election under Code Section 83(b) when applicable, and (g) shall be subject to
any other agreement between the Grantee and the Company regarding Shares that may be acquired under
an Incentive Award including, without limitation, a shareholders agreement, buy-sell agreement, or
other agreement restricting the
21
transferability of Shares by Grantee. An Incentive Agreement shall include such terms and conditions as are
determined by the Committee, in its discretion, to be appropriate with respect to any individual
Grantee. The Incentive Agreement shall be signed by the Grantee to whom the Incentive Award is made
and by an Authorized Officer.
6.2 No Right to Employment
Nothing in the Plan or any instrument executed pursuant to the Plan shall create any
Employment rights (including without limitation, rights to continued Employment) in any Grantee or
affect the right of the Company to terminate the Employment of any Grantee at any time without
regard to the existence of the Plan.
6.3 Securities Requirements
The Company shall be under no obligation to effect the registration of any Shares to be issued
hereunder pursuant to the Securities Act of 1933 or to effect similar compliance under any state
securities laws. Notwithstanding anything herein to the contrary, the Company shall not be
obligated to cause to be issued or delivered any certificates evidencing Shares pursuant to the
Plan unless and until the Company is advised by its counsel that the issuance and delivery of such
certificates is in compliance with all applicable laws, regulations of governmental authorities,
and the requirements of any securities exchange on which Shares are traded. The Committee may
require, as a condition of the issuance and delivery of certificates evidencing Shares pursuant to
the terms hereof, that the recipient of such Shares make such covenants, agreements and
representations, and that such certificates bear such legends, as the Committee, in its discretion,
deems necessary or desirable.
The Committee may, in its discretion, defer the effectiveness of any exercise of an Incentive
Award in order to allow the issuance of Shares to be made pursuant to registration or an exemption
from registration or other methods for compliance available under federal or state securities laws.
The Committee shall inform the Grantee in writing of its decision to defer the effectiveness of the
exercise of an Incentive Award. During the period that the effectiveness of the exercise of an
Incentive Award has been deferred, the Grantee may, by written notice to the Committee, withdraw
such exercise and obtain the refund of any amount paid with respect thereto.
If the Shares issuable on exercise of an Incentive Award are not registered under the
Securities Act of 1933, the Company may imprint on the certificate for such Shares the following
legend or any other legend which counsel for the Company considers necessary or advisable to comply
with the Securities Act of 1933:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (ACT), OR THE SECURITIES LAWS OF ANY STATE. THE
SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO ANY
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
22
OF SUCH ACT AND SUCH LAWS OR PURSUANT TO A WRITTEN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
6.4 Transferability
Incentive Awards granted under the Plan shall not be transferable or assignable other than:
(a) by will or the laws of descent and distribution or (b) pursuant to a qualified domestic
relations order (as defined under Code Section 414(p)); provided, however, only with respect to
Incentive Awards consisting of Nonstatutory Stock Options, the Committee may, in its discretion,
authorize all or a portion of the Nonstatutory Stock Options to be granted on terms which permit
transfer by the Grantee to (i) the members of the Grantees Immediate Family, (ii) a trust or
trusts for the exclusive benefit of Immediate Family members, (iii) a partnership in which such
Immediate Family members are the only partners, or (iv) any other entity owned solely by Immediate
Family members; provided that (A) there may be no consideration for any such transfer, (B) the
Incentive Agreement pursuant to which such Nonstatutory Stock Options are granted must be approved
by the Committee, and must expressly provide for transferability in a manner consistent with this
Section 6.4, (C) subsequent transfers of transferred Nonstatutory Stock Options shall be
prohibited except in accordance with clauses (a) and (b) (above) of this sentence, and (D) there
may be no transfer of any Incentive Award in a listed transaction as described in IRS Notice
2003-47. Following any permitted transfer, the Nonstatutory Stock Option shall continue to be
subject to the same terms and conditions as were applicable immediately prior to transfer, provided
that the term Grantee shall be deemed to refer to the transferee. The events of termination of
employment, as set out in Section 6.7 and in the Incentive Agreement, shall continue to be
applied with respect to the original Grantee, and the Incentive Award shall be exercisable by the
transferee only to the extent, and for the periods, specified in the Incentive Agreement.
Except as may otherwise be permitted under the Code, in the event of a permitted transfer of a
Nonstatutory Stock Option hereunder, the original Grantee shall remain subject to withholding taxes
upon exercise. In addition, the Company and the Committee shall have no obligation to provide any
notices to any Grantee or transferee thereof, including, for example, notice of the expiration of
an Incentive Award following the original Grantees termination of employment.
The designation by a Grantee of a beneficiary of an Incentive Award shall not constitute
transfer of the Incentive Award. No transfer by will or by the laws of descent and distribution
shall be effective to bind the Company unless the Committee has been furnished with a copy of the
deceased Grantees enforceable will or such other evidence as the Committee deems necessary to
establish the validity of the transfer. Any attempted transfer in violation of this Section
6.4 shall be void and ineffective. All determinations under this Section 6.4 shall be
made by the Committee in its discretion.
6.5 Rights as a Shareholder
(a) No Shareholder Rights. Except as otherwise provided in Section 3.1(b) for
grants of Restricted Stock, a Grantee of an Incentive Award (or a permitted transferee
23
of such Grantee) shall have no rights as a shareholder with respect to any Shares of
Common Stock until the issuance of a stock certificate or other record of ownership for such
Shares.
(b) Representation of Ownership. In the case of the exercise of an Incentive Award by
a person or estate acquiring the right to exercise such Incentive Award by reason of the
death or Disability of a Grantee, the Committee may require reasonable evidence as to the
ownership of such Incentive Award or the authority of such person. The Committee may also
require such consents and releases of taxing authorities as it deems advisable.
6.6 Change in Stock and Adjustments
(a) Changes in Law or Circumstances. Subject to Section 6.8 (which only
applies in the event of a Change in Control), in the event of any change in applicable law
or any change in circumstances which results in or would result in any dilution of the
rights granted under the Plan, or which otherwise warrants an equitable adjustment because
it interferes with the intended operation of the Plan, then, if the Board or Committee
should so determine, in its absolute discretion, that such change equitably requires an
adjustment in the number or kind of shares of stock or other securities or property
theretofore subject, or which may become subject, to issuance or transfer under the Plan or
in the terms and conditions of outstanding Incentive Awards, such adjustment shall be made
in accordance with such determination. Such adjustments may include changes with respect to
(i) the aggregate number of Shares that may be issued under the Plan, (ii) the number of
Shares subject to Incentive Awards, and (iii) the Option Price or other price per Share for
outstanding Incentive Awards, but shall not result in the grant of any Stock Option with an
exercise price less than 100% of the Fair Market Value per Share on the date of grant. The
Board or Committee shall give notice to each applicable Grantee of such adjustment which
shall be effective and binding.
(b) Exercise of Corporate Powers. The existence of the Plan or outstanding Incentive
Awards hereunder shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalization, reorganization
or other changes in the Companys capital structure or its business or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or prior
preference stocks ahead of or affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding whether of a similar character
or otherwise.
(c) Recapitalization of the Company. Subject to Section 6.8 (which only
applies in the event of a Change in Control), if while there are Incentive Awards
outstanding, the Company shall effect any subdivision or consolidation of Shares of Common
Stock or other capital readjustment, the payment of a stock dividend, stock split,
combination of Shares, recapitalization or other increase or reduction in the number of
Shares outstanding, without receiving compensation therefor in money, services or property,
then the number of Shares available under the Plan and the number of Incentive
24
Awards which may thereafter be exercised shall (i) in the event of an increase in the
number of Shares outstanding, be proportionately increased and the Option Price or Fair
Market Value of the Incentive Awards awarded shall be proportionately reduced; and (ii) in
the event of a reduction in the number of Shares outstanding, be proportionately reduced,
and the Option Price or Fair Market Value of the Incentive Awards awarded shall be
proportionately increased. The Board or Committee shall take such action and whatever other
action it deems appropriate, in its discretion, so that the value of each outstanding
Incentive Award to the Grantee shall not be adversely affected by a corporate event
described in this Section 6.6(c).
(d) Issue of Common Stock by the Company. Except as hereinabove expressly provided in
this Section 6.6 and subject to Section 6.8 in the event of a Change in
Control, the issue by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, for cash or property, or for labor or services, either
upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon
any conversion of shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number of, or Option Price or Fair Market Value of, any Incentive Awards then
outstanding under previously granted Incentive Awards; provided, however, in such event,
outstanding Shares of Restricted Stock shall be treated the same as outstanding unrestricted
Shares of Common Stock.
(e) Assumption under the Plan of Outstanding Stock Options. Notwithstanding any other
provision of the Plan, the Board or Committee, in its discretion, may authorize the
assumption and continuation under the Plan of outstanding and unexercised stock options or
other types of stock-based incentive awards that were granted under a stock option plan (or
other type of stock incentive plan or agreement) that is or was maintained by a corporation
or other entity that was merged into, consolidated with, or whose stock or assets were
acquired by, the Company as the surviving corporation. Any such action shall be upon such
terms and conditions as the Board or Committee, in its discretion, may deem appropriate,
including provisions to preserve the holders rights under the previously granted and
unexercised stock option or other stock-based incentive award; such as, for example,
retaining an existing exercise price under an outstanding stock option. Any such assumption
and continuation of any such previously granted and unexercised incentive award shall be
treated as an outstanding Incentive Award under the Plan and shall thus count against the
number of Shares reserved for issuance pursuant to Section 1.4. In addition, any
Shares issued by the Company through the assumption or substitution of outstanding grants
from an acquired company shall reduce the Shares available for grants under Section
1.4.
(f) Assumption of Incentive Awards by a Successor. Subject to the accelerated vesting
and other provisions of Section 6.8 that apply in the event of a Change in Control,
in the event of a Corporate Event (defined below), each Grantee shall be entitled to
receive, in lieu of the number of Shares subject to Incentive Awards, such shares of capital
stock or other securities or property as may be issuable or payable with respect to or in
exchange for the number of Shares which Grantee would have received had he exercised the
Incentive Award immediately prior to such Corporate Event,
25
together with any adjustments (including, without limitation, adjustments to the Option
Price and the number of Shares issuable on exercise of outstanding Stock Options). For this
purpose, Shares of Restricted Stock shall be treated the same as unrestricted outstanding
Shares of Common Stock. A Corporate Event means any of the following: (i) a dissolution or
liquidation of the Company, (ii) a sale of all or substantially all of the Companys assets,
or (iii) a merger, consolidation or combination involving the Company (other than a merger,
consolidation or combination (A) in which the Company is the continuing or surviving
corporation and (B) which does not result in the outstanding Shares being converted into or
exchanged for different securities, cash or other property, or any combination thereof). The
Board or Committee shall take whatever other action it deems appropriate to preserve the
rights of Grantees holding outstanding Incentive Awards.
Notwithstanding the previous paragraph of this Section 6.6(f), but subject to
the accelerated vesting and other provisions of Section 6.8 that apply in the event
of a Change in Control, in the event of a Corporate Event (described in the previous
paragraph), the Board or Committee, in its discretion, shall have the right and power to:
|
(i) |
|
cancel, effective immediately prior to the
occurrence of the Corporate Event, each outstanding Incentive Award
(whether or not then exercisable) and, in full consideration of such
cancellation, pay to the Grantee an amount in cash equal to the excess
of (A) the value, as determined by the Board or Committee, of the
property (including cash) received by the holders of Common Stock as a
result of such Corporate Event over (B) the exercise price of such
Incentive Award, if any (for the avoidance of doubt, with respect to an
Option, if the value of the amount in clause (A) is less than the
Option Price, the Option may be canceled for no consideration);
provided, however, this subsection (i) shall be inapplicable to an
Incentive Award granted within six (6) months before the occurrence of
the Corporate Event if the Grantee is an Insider and such disposition
is not exempt under Rule 16b-3 (or other rules preventing liability of
the Insider under Section 16(b) of the Exchange Act) and, in that
event, the provisions hereof shall be applicable to such Incentive
Award after the expiration of six (6) months from the date of grant; or |
|
(ii) |
|
provide for the exchange or substitution of
each Incentive Award outstanding immediately prior to such Corporate
Event (whether or not then exercisable) for another award with respect
to the Common Stock or other property for which such Incentive Award is
exchangeable and, incident thereto, make an equitable adjustment as
determined by the Board or Committee, in its discretion, in the Option
Price or exercise price of the Incentive Award, if any, or in the
number of Shares or amount of property (including cash) subject to the
Incentive Award; or |
26
|
(iii) |
|
provide for assumption of the Plan and such
outstanding Incentive Awards by the surviving entity or its parent. |
The Board or Committee, in its discretion, shall have the authority to take whatever action it
deems to be necessary or appropriate to effectuate the provisions of this Section 6.6(f).
6.7 Termination of Employment, Death, Disability and Retirement
(a) Termination of Employment. Unless otherwise expressly provided in the Grantees
Incentive Agreement or the Plan, if the Grantees Employment is terminated for any reason
other than due to his death, Disability, Retirement or for Cause, any non-vested portion of
any Stock Option or other Incentive Award at the time of such termination shall
automatically expire and terminate and no further vesting shall occur after the termination
date. In such event, except as otherwise expressly provided in his Incentive Agreement, the
Grantee shall be entitled to exercise his rights only with respect to the portion of the
Incentive Award that was vested as of his termination of Employment date for a period that
shall end on the earlier of (i) the expiration date set forth in the Incentive Agreement or
(ii) ninety (90) days after the date of his termination of Employment.
(b) Termination of Employment for Cause. Unless otherwise expressly provided in the
Grantees Incentive Agreement or the Plan, in the event of the termination of a Grantees
Employment for Cause, all vested and non-vested Stock Options and other Incentive Awards
granted to such Grantee shall immediately expire, and shall not be exercisable to any
extent, as of 12:01 a.m. (CST) on the date of such termination of Employment.
(c) Retirement. Unless otherwise expressly provided in the Grantees Incentive
Agreement or the Plan, upon the termination of Employment due to the Grantees Retirement:
|
(i) |
|
any non-vested portion of any outstanding
Option or other Incentive Award shall immediately terminate and no
further vesting shall occur; and |
|
|
(ii) |
|
any vested Option or other Incentive Award
shall expire on the earlier of (A) the expiration date set forth in the
Incentive Agreement for such Incentive Award; or (B) the expiration of
(1) six (6) months after the date of his termination of Employment due
to Retirement in the case of any Incentive Award other than an
Incentive Stock Option or (2) three months after his termination date
in the case of an Incentive Stock Option. |
(d) Disability or Death. Unless otherwise expressly provided in the Grantees
Incentive Agreement or the Plan, upon termination of Employment as a result of the Grantees
Disability or death:
27
|
(i) |
|
any non-vested portion of any outstanding
Option or other Incentive Award shall immediately terminate upon
termination of Employment and no further vesting shall occur; and |
|
|
(ii) |
|
any vested Incentive Award shall expire on the
earlier of either (A) the expiration date set forth in the Incentive
Agreement or (B) the one year anniversary date of the Grantees
termination of Employment date. |
In the case of any vested Incentive Stock Option held by an Employee following
termination of Employment, notwithstanding the definition of Disability in Section
1.2, whether the Employee has incurred a Disability for purposes of determining the
length of the Option exercise period following termination of Employment under this
Section 6.7(d) shall be determined by reference to Code Section 22(e)(3) to the
extent required by Code Section 422(c)(6). The Committee shall determine whether a
Disability for purposes of this Section 6.7(d) has occurred.
(e) Continuation. Subject to the conditions and limitations of the Plan and applicable
law and regulation in the event that a Grantee ceases to be an Employee, Outside Director or
Consultant, as applicable, for whatever reason, the Committee and Grantee may mutually agree
with respect to any outstanding Option or other Incentive Award then held by the Grantee (i)
for an acceleration or other adjustment in any vesting schedule applicable to the Incentive
Award; (ii) for a continuation of the exercise period following termination for a longer
period than is otherwise provided under such Incentive Award; or (iii) to any other change
in the terms and conditions of the Incentive Award. In the event of any such change to an
outstanding Incentive Award, a written amendment to the Grantees Incentive Agreement shall
be required. No amendment to a Grantees Incentive Award shall be made to the extent
compensation payable pursuant thereto as a result of such amendment would be considered
deferred compensation subject to taxation under Code Section 409A, unless otherwise
determined by the Committee.
6.8 Change in Control
Notwithstanding any contrary provision in the Plan, in the event of a Change in Control (as
defined below), the following actions shall automatically occur as of the day immediately preceding
the Change in Control date unless expressly provided otherwise in the individual Grantees
Incentive Agreement:
(a) all of the Stock Options and Stock Appreciation Rights then outstanding shall
become 100% vested and immediately and fully exercisable;
(b) all of the restrictions and conditions of any Restricted Stock Awards, Restricted
Stock Units and any Other Stock-Based Awards then outstanding shall be deemed satisfied, and
the Restriction Period with respect thereto shall be deemed to have expired, and thus each
such Incentive Award shall become free of all restrictions and fully vested; and
28
(c) all of the Performance-Based Awards shall become fully vested, deemed earned in
full, and promptly paid within thirty (30) days to the affected Grantees without regard to
payment schedules and notwithstanding that the applicable performance cycle, retention cycle
or other restrictions and conditions have not been completed or satisfied.
For all purposes of this Plan, a Change in Control of the Company means the occurrence of
any one or more of the following events:
(d) The acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act (a Person)) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of
either (i) the then outstanding shares of common stock of the Company (the Outstanding
Company Stock) or (ii) the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors (the Outstanding
Company Voting Securities); provided, however, that the following acquisitions shall not
constitute a Change in Control: (i) any acquisition directly from the Company or any
Subsidiary, (ii) any acquisition by the Company or any Subsidiary or by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (iii)
any acquisition by any corporation pursuant to a reorganization, merger, consolidation or
similar business combination involving the Company (a Merger), if, following such Merger,
the conditions described in Section 6.8(c) (below) are satisfied;
(e) Individuals who, as of the Effective Date, constitute the Board of Directors of the
Company (the Incumbent Board) cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director subsequent to the
Effective Date whose election, or nomination for election by the Companys shareholders, was
approved by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
(f) Approval by the shareholders of the Company of a Merger, unless immediately
following such Merger, (i) substantially all of the holders of the Outstanding Company
Voting Securities immediately prior to Merger beneficially own, directly or indirectly, more
than fifty percent (50%) of the common stock of the corporation resulting from such Merger
(or its parent corporation) in substantially the same proportions as their ownership of
Outstanding Company Voting Securities immediately prior to such Merger and (ii) at least a
majority of the members of the board of directors of the corporation resulting from such
Merger (or its parent corporation) were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such Merger;
29
(g) The sale or other disposition of all or substantially all of the assets of the
Company, unless immediately following such sale or other disposition, (i) substantially all
of the holders of the Outstanding Company Voting Securities immediately prior to the
consummation of such sale or other disposition beneficially own, directly or indirectly,
more than fifty percent (50%) of the common stock of the corporation acquiring such assets
in substantially the same proportions as their ownership of Outstanding Company Voting
Securities immediately prior to the consummation of such sale or disposition, and (ii) at
least a majority of the members of the board of directors of such corporation (or its parent
corporation) were members of the Incumbent Board at the time of execution of the initial
agreement or action of the Board providing for such sale or other disposition of assets of
the Company; or
(h) The adoption of any plan or proposal for the liquidation or dissolution of the
Company.
Notwithstanding the foregoing provisions of this Section 6.8, to the extent that any
payment (or acceleration of payment) hereunder is considered to be deferred compensation that is
subject to, and not exempt under, Code Section 409A, then the term Change in Control hereunder
shall be construed to have the meaning as set forth in Code Section 409A with respect to the
payment (or acceleration of payment) of such deferred compensation, but only to the extent
inconsistent with the foregoing provisions of the Change in Control definition (above) as
determined by the Incumbent Board.
6.9 Exchange of Incentive Awards
The Committee may, in its discretion, permit any Grantee to surrender outstanding Incentive
Awards in order to exercise or realize his rights under other Incentive Awards or in exchange for
the grant of new Incentive Awards, or require holders of Incentive Awards to surrender outstanding
Incentive Awards (or comparable rights under other plans or arrangements) as a condition precedent
to the grant of new Incentive Awards. No exchange of Incentive Awards shall be made under this
Section 6.9 if such surrender causes any Incentive Award to provide for the deferral of
compensation in a manner that is subject to taxation under Code Section 409A unless otherwise
determined by the Committee.
SECTION 7.
GENERAL
7.1 Effective Date and Grant Period
The Plan shall be subject to the approval of the shareholders of the Company within twelve
(12) months after the Effective Date. Incentive Awards may be granted under the Plan at any time
prior to receipt of such shareholder approval; provided, however, if the requisite shareholder
approval is not obtained within such 12-month period, any Incentive Awards granted hereunder shall
automatically become null and void and of no force or effect. Notwithstanding the foregoing, any
Incentive Award that is intended to satisfy the Performance-Based Exception
30
shall not be granted until the terms of the Plan are disclosed to, and approved by,
shareholders of the Company in accordance with the requirements of the Performance-Based Exception.
7.2 Funding and Liability of Company
No provision of the Plan shall require the Company, for the purpose of satisfying any
obligations under the Plan, to purchase assets or place any assets in a trust or other entity to
which contributions are made, or otherwise to segregate any assets. In addition, the Company shall
not be required to maintain separate bank accounts, books, records or other evidence of the
existence of a segregated or separately maintained or administered fund for purposes of the Plan.
Although bookkeeping accounts may be established with respect to Grantees who are entitled to cash,
Common Stock or rights thereto under the Plan, any such accounts shall be used merely as a
bookkeeping convenience. The Company shall not be required to segregate any assets that may at any
time be represented by cash, Common Stock or rights thereto. The Plan shall not be construed as
providing for such segregation, nor shall the Company, the Board or the Committee be deemed to be a
trustee of any cash, Common Stock or rights thereto. Any liability or obligation of the Company to
any Grantee with respect to an Incentive Award shall be based solely upon any contractual
obligations that may be created by this Plan and any Incentive Agreement, and no such liability or
obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. The Company, Board, and Committee shall not be required to give any
security or bond for the performance of any obligation that may be created by the Plan.
7.3 Withholding Taxes
(a) Tax Withholding. The Company shall have the power and the right to deduct or
withhold, or require a Grantee to remit to the Company, an amount sufficient to satisfy
federal, state, and local taxes, domestic or foreign, required by law or regulation to be
withheld with respect to any taxable event arising as a result of the Plan or an Incentive
Award hereunder. Upon the lapse of restrictions on Restricted Stock, the Committee, in its
discretion, may elect to satisfy the tax withholding requirement, in whole or in part, by
having the Company withhold Shares having a Fair Market Value on the date the tax is to be
determined equal to the minimum withholding taxes which could be imposed on the transaction
as determined by the Committee.
(b) Share Withholding. With respect to tax withholding required upon the exercise of
Stock Options or SARs, upon the lapse of restrictions on Restricted Stock, or upon any other
taxable event arising as a result of any Incentive Awards, Grantees may elect, subject to
the approval of the Committee in its discretion, to satisfy the withholding requirement, in
whole or in part, by having the Company withhold Shares having a Fair Market Value on the
date the tax is to be determined equal to the minimum withholding taxes which could be
imposed on the transaction as determined by the Committee. All such elections shall be made
in writing, signed by the Grantee, and shall be subject to any restrictions or limitations
that the Committee, in its discretion, deems appropriate.
(c) Incentive Stock Options. With respect to Shares received by a Grantee pursuant to
the exercise of an Incentive Stock Option, if such Grantee disposes of any
31
such Shares within (i) two years from the date of grant of such Option or (ii) one year
after the transfer of such shares to the Grantee, the Company shall have the right to
withhold from any salary, wages or other compensation payable by the Company to the Grantee
an amount sufficient to satisfy the minimum withholding taxes which could be imposed with
respect to such disqualifying disposition.
7.4 No Guarantee of Tax Consequences
The Company, Board and the Committee do not make any commitment or guarantee that any federal,
state, local or foreign tax treatment will apply or be available to any person participating or
eligible to participate hereunder.
7.5 Designation of Beneficiary by Participant
Each Grantee may, from time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid in case of his death
before he receives any or all of such benefit. Each such designation shall revoke all prior
designations by the same Grantee, shall be in a form prescribed by the Committee, and will be
effective only when filed by the Grantee in writing with the Committee (or its delegate), and
received and accepted during the Grantees lifetime. In the absence of any such designation,
benefits remaining unpaid at the Grantees death shall be paid to the Grantees estate.
7.6 Deferrals
Subject to the requirements for compliance with, or exemption under, Code Section 409A, if
applicable, the Committee shall not permit a Grantee to defer such Grantees receipt of the payment
of cash or the delivery of Shares under the terms of his Incentive Agreement that would otherwise
be due and payable by virtue of the lapse or waiver of restrictions with respect to Restricted
Stock or another form of Incentive Award, or the satisfaction of any requirements or goals with
respect to any Incentive Awards.
7.7 Amendment and Termination
The Board shall have the power and authority to terminate or amend the Plan at any time in its
discretion; provided, however, the Board shall not, without the approval of the shareholders of the
Company within the time period required by applicable law:
(a) except as provided in Section 6.6, increase the maximum number of Shares
that may be issued under the Plan pursuant to Section 1.4;
(b) amend the requirements as to the class of Employees eligible to purchase Common
Stock under the Plan;
(c) extend the term of the Plan; or,
(d) if the Company is a Publicly Held Corporation (i) increase the maximum limits on
Incentive Awards to Covered Employees as set for compliance with the Performance-Based
Exception or (ii) decrease the authority granted to the Committee
32
under the Plan in contravention of Rule 16b-3 under the Exchange Act to the extent
Section 16 of the Exchange Act is applicable to the Company.
No termination, amendment, or modification of the Plan shall adversely affect in any material
way any outstanding Incentive Award previously granted to a Grantee under the Plan, without the
written consent of such Grantee or other designated holder of such Incentive Award.
In addition, to the extent that the Committee determines that (a) the listing for
qualification requirements of any national securities exchange or quotation system on which the
Companys Common Stock is then listed or quoted, if applicable, or (b) the Code (or regulations
promulgated thereunder), require shareholder approval in order to maintain compliance with such
listing requirements or to maintain any favorable tax advantages or qualifications, then the Plan
shall not be amended in such respect without approval of the Companys shareholders.
7.8 Requirements of Law
(a) Governmental Entities and Securities Exchanges. The granting of Incentive Awards
and the issuance of Shares under the Plan shall be subject to all applicable laws, rules,
and regulations, and to such approvals by any governmental agencies or national securities
exchanges as may be required. Certificates evidencing Shares delivered under the Plan (to
the extent that such shares are so evidenced) may be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the rules and regulations
of the Securities and Exchange Commission, any securities exchange or transaction reporting
system upon which the Common Stock is then listed or to which it is admitted for quotation,
and any applicable federal or state securities law or regulation. The Committee may cause a
legend or legends to be placed upon such certificates (if any) to make appropriate reference
to such restrictions.
The Company shall not be required to sell or issue any Shares under any Incentive Award
if the sale or issuance of such Shares would constitute a violation by the Grantee or any
other individual exercising the Incentive Award, or the Company, of any provision of any law
or regulation of any governmental authority, including without limitation, any federal or
state securities law or regulation. If at any time the Company shall determine, in its
discretion, that the listing, registration or qualification of any Shares subject to an
Incentive Award upon any securities exchange or under any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the issuance or purchase of
Shares hereunder, no Shares may be issued or sold to the Grantee or any other individual
pursuant to an Incentive Award unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not acceptable to the
Company, and any delay caused thereby shall in no way affect the date of termination of the
Incentive Award. The Company shall not be obligated to take any affirmative action in order
to cause the exercise of an Incentive Award or the issuance of Shares pursuant to the Plan
to comply with any law or regulation of any governmental authority. As to any jurisdiction
that expressly imposes the requirement that an Incentive Award shall not be exercisable
until the Shares covered thereby are registered or are exempt from registration, the
exercise of such Incentive Award (under circumstances in which the laws of such jurisdiction
apply) shall be
33
deemed conditioned upon the effectiveness of such registration or the availability of
such an exemption.
(b) Securities Act Rule 701. If no class of the Companys securities is registered
under Section 12 of the Exchange Act, then unless otherwise determined by the Committee,
grants of Incentive Awards to Rule 701 Grantees (as defined below) and issuances of the
underlying shares of Common Stock, if any, on the exercise or conversion of such Incentive
Awards are intended to comply with all applicable conditions of Securities Act Rule 701
(Rule 701), including, without limitation, the restrictions as to the amount of securities
that may be offered and sold in reliance on Rule 701, so as to qualify for an exemption from
the registration requirements of the Securities Act. Any ambiguities or inconsistencies in
the construction of an Incentive Award or the Plan shall be interpreted to give effect to
such intention. In accordance with Rule 701, each Grantee shall receive a copy of the Plan
on or before the date an Incentive Award is granted to him, as well as the additional
disclosure required by Rule 701 (e) if the aggregate sales price or amount of securities
sold during any consecutive 12-month period exceeds $5,000,000 as determined under Rule
701(e). If Rule 701 (or any successor provision) is amended to eliminate or otherwise modify
any of the requirements specified in Rule 701, then the provisions of this Section
7.8(b) shall be interpreted and construed in accordance with Rule 701 as so amended. For
purposes of this Section 7.8(b), as determined in accordance with Rule 701, Rule
701 Grantees shall mean any Grantee other than a director of the Company, the Companys
chairman, CEO, president, chief financial officer, controller and any vice president of the
Company, and any other key employee of the Company who generally has access to financial and
other business related information and possesses sufficient sophistication to understand and
evaluate such information.
7.9 Rule 16b-3 Securities Law Compliance for Insiders
If the Company is a Publicly Held Corporation, transactions under the Plan with respect to
Insiders are intended to comply with all applicable conditions of Rule 16b-3 under the Exchange Act
to the extent Section 16 of the Exchange Act is applicable to the Company. Any ambiguities or
inconsistencies in the construction of an Incentive Award or the Plan shall be interpreted to give
effect to such intention, and to the extent any provision of the Plan or action by the Committee
fails to so comply, it shall be deemed null and void to the extent permitted by law and deemed
advisable by the Committee in its discretion.
7.10 Compliance with Code Section 162(m) for Publicly Held Corporation
If the Company is a Publicly Held Corporation, unless otherwise determined by the Committee
with respect to any particular Incentive Award, it is intended that the Plan shall comply fully
with the applicable requirements so that any Incentive Awards subject to Section 162(m) that are
granted to Covered Employees shall qualify for the Performance-Based Exception. If any provision of
the Plan or an Incentive Agreement would disqualify the Plan or would not otherwise permit the Plan
or Incentive Award to comply with the Performance-Based Exception as so intended, such provision
shall be construed or deemed to be amended to conform to the requirements of the Performance-Based
Exception to the extent permitted by applicable
34
law and deemed advisable by the Committee; provided, however, no such construction or
amendment shall have an adverse effect on the prior grant of an Incentive Award or the economic
value to a Grantee of any outstanding Incentive Award.
7.11 Compliance with Code Section 409A
It is intended that Incentive Awards granted under the Plan shall be exempt from, or if not so
exempt, in compliance with, Code Section 409A, unless otherwise determined by the Committee at the
time of grant. In that respect, the Company, by action of its Board, reserves the right to amend
the Plan, and the Board and the Committee each reserve the right to amend any outstanding Incentive
Agreement, to the extent deemed necessary or appropriate either to exempt such Incentive Award from
taxation under Section 409A or to comply with the requirements of Section 409A to avoid additional
taxation thereunder. Further, Grantees who are Specified Employees (as defined under Section
409A), shall be required to delay payment of an Incentive Award for six (6) months after separation
from service (as defined under Section 409A), but only to the extent such Incentive Award is
subject to taxation under Section 409A and such delay is required thereunder.
7.12 Notices
(a) Notice From Insiders to Secretary of Change in Beneficial Ownership. To the extent
Section 16 of the Exchange Act is applicable to the Company, within two business days after
the date of a change in beneficial ownership of the Common Stock issued or delivered
pursuant to this Plan, an Insider should report to the Secretary of the Company any such
change to the beneficial ownership of Common Stock that is required to be reported with
respect to such Insider under Rule 16(a)-3 promulgated pursuant to the Exchange Act.
Whenever reasonably feasible, Insiders will provide the Committee with advance notification
of such change in beneficial ownership.
(b) Notice to Insiders and Securities and Exchange Commission. To the extent
applicable, the Company shall provide notice to any Insider, as well as to the Securities
and Exchange Commission, of any blackout period, as defined in Section 306(a)(4) of the
Sarbanes-Oxley Act of 2002, in any case in which Insider is subject to the requirements of
Section 304 of said Act in connection with such blackout period.
7.13 Pre-Clearance Agreement with Brokers
Notwithstanding anything in the Plan to the contrary, no Shares issued pursuant to the Plan
will be delivered to a broker or dealer that receives such Shares for the account of an Insider
unless and until the broker or dealer enters into a written agreement with the Company whereby such
broker or dealer agrees to report immediately to the Secretary of the Company (or other designated
person) a change in the beneficial ownership of such Shares.
7.14 Successors to Company
All obligations of the Company under the Plan with respect to Incentive Awards granted
hereunder shall be binding on any successor to the Company, whether the existence of such
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successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise,
of all or substantially all of the business and/or assets of the Company.
7.15 Miscellaneous Provisions
(a) No Employee, Consultant, Outside Director, or other person shall have any claim or
right to be granted an Incentive Award under the Plan. Neither the Plan, nor any action
taken hereunder, shall be construed as giving any Employee, Consultant, or Outside Director
any right to be retained in the Employment or other service of the Company or any Parent or
Subsidiary.
(b) The expenses of the Plan shall be borne by the Company.
(c) By accepting any Incentive Award, each Grantee and each person claiming by or
through him shall be deemed to have indicated his acceptance of the Plan.
(d) The proceeds received from the sale of Common Stock pursuant to the Plan shall be
used for general corporate purposes of the Company.
7.16 Severability
In the event that any provision of this Plan shall be held illegal, invalid or unenforceable
for any reason, such provision shall be fully severable, but shall not affect the remaining
provisions of the Plan, and the Plan shall be construed and enforced as if the illegal, invalid, or
unenforceable provision was not included herein.
7.17 Gender, Tense and Headings
Whenever the context so requires, words of the masculine gender used herein shall include the
feminine and neuter, and words used in the singular shall include the plural. Section headings as
used herein are inserted solely for convenience and reference and constitute no part of the
interpretation or construction of the Plan.
7.18 Governing Law
The Plan shall be interpreted, construed and constructed in accordance with the laws of the
State of Texas without regard to its conflicts of law provisions, except as may be superseded by
applicable laws of the United States.
[Signature page follows.]
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IN WITNESS WHEREOF, the Company has caused this Plan to be duly executed in its name and on
its behalf by its duly authorized officer, on this ____ day of ____________, 2011, to be effective
as of the Effective Date.
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APPENDIX
C
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the Merger Agreement), dated this [__] day of
[__________], 2011, between ASTROTECH CORPORATION, a Washington corporation (the Company) and
ASTROTECH CORPORATION, a Delaware corporation (the
Surviving Company).
WITNESSETH:
WHEREAS, the Company is a corporation duly organized and existing under the laws of the State
of Washington and is authorized to issue (i) 75,000,000 shares of common stock, no par value per
share (the Common Stock of the Company), and (ii) 2,500,000 shares of preferred stock, no par
value per share (the Preferred Stock of the Company);
WHEREAS, the Surviving Company is a corporation duly organized and existing under the laws of
the State of Delaware, is a wholly owned subsidiary of the Company and is authorized to issue (i)
30,000,000 shares of common stock, $0.01 par value per share (the Common Stock of the Surviving
Company), of which 1,000 shares are issued to the Company and outstanding as of the date hereof,
and (ii) 1,000,000 shares of preferred stock, $0.01 par value per share (the Preferred Stock of
the Surviving Company);
WHEREAS, the Company desires to merge itself into the Surviving Company;
WHEREAS, the Surviving Company desires that the Company be merged into itself;
WHEREAS, the respective Boards of Directors of the Company and the Surviving Company have
determined that it is advisable and in the best interests of each such corporation that the Company
merge with and into the Surviving Company upon the terms and subject to the conditions of this
Merger Agreement for the purpose of effecting the re-incorporation of the Company in the State of
Delaware, and the respective Boards of Directors of the Company and the Surviving Company have, by
resolutions duly approved and adopted this Merger Agreement;
WHEREAS, the Board of Directors of the Company furnished a proxy statement in connection with
the solicitation of proxies to be voted at an annual meeting of the Companys stockholders on April
20, 2011 at 9:00 a.m., held at 401 Congress Ave., Suite 1650, Austin, Texas 78701 (the Annual
Meeting).
NOW, THEREFORE, in consideration of the foregoing premises and the undertakings herein
contained and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Merger. The Company shall be merged into the Surviving Company pursuant to Section 252 of
the General Corporation Law of the State of Delaware (the DGCL) and Section 23B.11.070 of the
Washington Business Corporation Act (the Merger). The Surviving Company shall survive the Merger
herein contemplated and shall continue to be governed by the
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laws of the State of Delaware. The separate corporate existence of the Company shall cease
upon the Effective Date (as defined below).
2. Effective Date. The Merger shall be effective upon the filing of a Certificate of Merger
with the Secretary of State of the State of Delaware and the filing of Articles of Merger with the
Secretary of State of the State of Washington, which filings shall be made as soon as practicable
after all required stockholder approvals have been obtained (the Effective Date).
3. Common Stock of the Company. On the Effective Date, by virtue of the Merger and without any
action on the part of the holders thereof, each share of Common Stock of the Company issued and
outstanding immediately prior thereto shall cease to exist and shall be changed and converted into
one fully paid and non-assessable share of the Common Stock of the Surviving Company.
4. Preferred Stock of the Company. On the Effective Date, by virtue of the Merger and without
any action on the part of the holders thereof, each outstanding share of Preferred Stock of the
Company which prior to that time represented Preferred Stock of the Company shall cease to exist
and shall be deemed for all purposes to evidence ownership of and to represent Preferred Stock of
the Surviving Company and shall be so registered on the books and records of the Surviving Company
or its transfer agents.
5. Warrants of the Company. On the Effective Date, by virtue of the Merger and without any
action on the part of the holders thereof, each outstanding warrant (the Warrants or Warrant)
which prior to that time represented Warrants of the Company shall cease to exist and shall be
deemed for all purposes to evidence ownership of and to represent Warrants of the Surviving Company
and shall be so registered on the books and records of the Surviving Company or its transfer
agents.
6. Options of the Company. On the Effective Date, by virtue of the Merger and without any
action on the part of the holders thereof, the Surviving Company will assume and continue any and
all of the Companys employee benefit plans and stock incentive plans in effect on the Effective
Date with respect to which employee, director, or officer options, rights or accrued benefits (the
Options or Option) are outstanding and unexercised as of such date. On the Effective Date, by
virtue of the Merger and without any action on the part of the holders thereof, each outstanding
Option which prior to that time represented Options of the Company will automatically be converted
into equal Options of the Surviving Company, and shall continue to reserve that number of shares of
Common Stock of the Surviving Company with respect to each such Option as was reserved by the
Company prior to the Effective Date with no other changes in the terms and conditions of such
Options, and each Option of the Company issued and outstanding immediately prior thereto shall
cease to exist and shall be so registered on the books and records of the Surviving Company or its
transfer agents.
7. Common Stock of the Surviving Company. On the Effective Date, by virtue of the Merger and
without any action on the part of the holder thereof, each share of Common Stock of the Surviving
Company issued and outstanding immediately prior thereto shall be canceled and returned to the
status of authorized but unissued shares.
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8. Stock Certificates. On and after the Effective Date, all of the outstanding certificates
which immediately prior thereto represented shares of common stock or preferred stock or options,
warrants, convertible debentures or other securities of the Company shall be deemed for all
purposes to evidence ownership of and to represent shares of common stock or preferred stock or
options, warrants, convertible debentures or other securities of the Surviving Company, as the case
may be, into which the shares of common stock or preferred stock or options, warrants, convertible
debentures or other securities of the Surviving Company represented by such certificates have been
converted as herein provided and shall be so registered on the books and records of the Surviving
Company or its transfer agent. Each holder of record of a stock certificate of the Company shall
surrender such certificate or certificates to the Surviving Company or its transfer agent and, upon
such surrender, receive in exchange therefor a new certificate or certificates evidencing and
representing the number of shares of common stock or preferred stock of the Surviving Company to
which such holder is entitled. Notwithstanding the foregoing, the registered owner of any such
outstanding certificate shall, until such certificate has been surrendered for transfer or
otherwise exchanged, have and be entitled to exercise any voting and other rights with respect to,
and to receive any dividends and other distributions upon, the shares of common stock or preferred
stock or options, warrants, purchase rights or other securities of the Company, if any, as the case
may be, evidenced by such outstanding certificate, as above provided.
9. Succession. On the Effective Date, the Surviving Company shall succeed to all of the
rights, privileges, debts, liabilities, powers and property of the Company in the manner of and as
more fully set forth in Section 259 of the DGCL Without limiting the foregoing, upon the Effective
Date, all property, rights, privileges, franchises, patents, trademarks, licenses, registrations,
and other assets of every kind and description of the Company shall be transferred to, vested in
and devolved upon the Surviving Company without further act or deed and all property, rights, and
every other interest of the Company and the Surviving Company shall be as effectively the property
of the Surviving Company as they were of the Company and the Surviving Company, respectively. All
rights of creditors of the Company and all liens upon any property of the Company shall be
preserved unimpaired, and all debts, liabilities and duties of the Company, including, without
limitation, all liabilities and duties of the Company under any employee stock purchase plans or
stock incentive plans shall attach to the Surviving Company and may be enforced against it to the
same extent as if said debts, liabilities and duties had been incurred or contracted by it.
10. Certificate of Incorporation and By-Laws. The Certificate of Incorporation of the
Surviving Company in effect on the Effective Date shall continue to be the Certificate of
Incorporation of the Surviving Company until further amended in accordance with the provisions
thereof and applicable law. The Bylaws of the Surviving Company in effect on the Effective Date
shall continue to be the Bylaws of the Surviving Company until amended in accordance with the
provisions thereof and applicable law.
11. Directors and Officers. The members of the Board of Directors and the officers of the
Surviving Company on the Effective Date shall continue in office until the expiration of their
respective terms of office and until their successors have been elected and qualified.
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12. Further Assurances. From time to time, as and when required by the Surviving Company or by
its successors and assigns, there shall be executed and delivered on behalf of the Company such
deeds and other instruments, and there shall be taken or caused to be taken by it such further and
other action, as shall be appropriate or necessary in order to vest or perfect in or to confirm of
record or otherwise in the Surviving Company the title to and possession of all the property,
interests, assets, rights, privileges, immunities, powers, franchises and authority of the Company,
and otherwise to carry out the purposes of this Merger Agreement, and the officers and directors of
the Company are fully authorized in the name and on behalf of the Company or otherwise to take any
and all such action and to execute and deliver any and all such deeds and other instruments.
13. Amendment. This Merger Agreement may be amended by the Boards of Directors of the Company
and the Surviving Company at any time prior to the Effective Date, provided that an amendment made
subsequent to the approval of this Merger Agreement by the stockholders of either the Company or
the Surviving Company shall not (1) 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 corporation, (2) alter or change any term of the Certificate
of Incorporation of the Surviving Company to be effected by the Merger or (3) alter or change any
of the terms and conditions of this Merger Agreement if such alteration or change would adversely
affect the holders of any class or series of the stock of such corporation.
14. Abandonment or Deferral. At any time before the Effective Time, this Merger Agreement may
be terminated and the Merger may be abandoned by the Board of Directors of either the Company or
the Surviving Company or both, notwithstanding the approval of this Merger Agreement by the
shareholders of the Company or the Surviving Company or the prior filing of this Merger Agreement
with the Secretary of State of the State of Delaware, or the consummation of the Merger may be
deferred for a reasonable period of time if, in the opinion of the Boards of Directors of the
Company and the Surviving Company, such action would be in the best interest of such corporations.
In the event of termination of this Merger Agreement, this Merger Agreement shall become void and
of no effect and there shall be no liability on the part of either corporation or its Board of
Directors or shareholders with respect thereto, except that the Company shall pay all expenses
incurred in connection with the Merger or in respect of this Merger Agreement or relating thereto.
15. Tax-Free Reorganization. The Company and the Surviving Company intend that the Merger
shall qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of
1986, as amended (the Code). This Merger Agreement shall constitute a plan of reorganization
within the meaning of Section 368(a) of the Code.
16. Governing Law. This Merger Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
17. Counterparts. This Merger Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original.
[The remainder of this page was intentionally left blank; Signature page follows]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Merger Agreement to be executed
and attested on its behalf by its officers thereunto duly authorized, as of the date first above
written.
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ASTROTECH CORPORATION,
A Washington Corporation
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ASTROTECH CORPORATION,
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APPENDIX
D
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
ASTROTECH CORPORATION
ARTICLE I
Corporate Name
The name of the Corporation is Astrotech Corporation (the Corporation).
ARTICLE II
Registered Address and Agent
The address of the registered office of the Corporation in the State of Delaware is 1209 N.
Orange Street, City of Wilmington, County of New Castle. The name and address of its registered
agent at such address is The Corporation Trust Company.
ARTICLE III
Purpose
The purpose of the Corporation is to engage in any lawful act or activity for which a
corporation may be organized under the General Corporation Law of the State of Delaware (the
DGCL).
ARTICLE IV
Authorized Capital Stock
The total number of shares of capital stock which the Corporation shall have authority to
issue is 31,000,000, which shall consist of (i) 30,000,000 shares of common stock, $0.01 par value
per share (the Common Stock), and (ii) 1,000,000 shares of preferred stock, $0.01 par value per
share (the Preferred Stock).
(a) Common Stock. The following is a statement of the designations and the powers,
preferences and rights, and the qualifications, limitations or restrictions with respect to the
Common Stock of the Corporation:
(1) Dividends. To the extent permitted under the DGCL, and subject to any
preferential rights of outstanding Preferred Stock, the Board of Directors of the
Corporation (the Board of Directors) may cause dividends to be paid to the holders
of shares of Common Stock out of funds legally available for the payment of dividends
by declaring an amount per share as a dividend. When dividends are declared, whether
payable in cash, in property or in shares of stock or other securities of the
Corporation, the holders of Common Stock shall be entitled to
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share ratably according to the number of shares of Common Stock held by them, in such dividends.
(2) Liquidation Rights. Subject to the prior rights of holders of all
classes of stock at the time outstanding having prior rights as to distributions in
the event of liquidation, dissolution or winding up of the affairs of the
Corporation, in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, the holders of Common Stock shall be
entitled to share ratably, according to the number of shares of Common Stock held by
them, in all remaining assets of the Corporation available for distribution to its
stockholders.
(3) Voting Rights. Except as otherwise provided in this Certificate of
Incorporation (the Certificate of Incorporation) or by applicable law, the holders
of Common Stock shall be entitled to vote on each matter on which the stockholders of
the Corporation shall be entitled to vote, and each holder of Common Stock shall be
entitled to one vote for each share of such stock held by him; provided, however,
that, except as otherwise required by law, holders of Common Stock shall not be
entitled to vote on any amendment to this Certificate of Incorporation (including any
certificate of designation with respect to a series of Preferred Stock) that relates
solely to the terms of one or more outstanding series of Preferred Stock if the
holders of such affected series are entitled, either separately or together as a
class with the holders of one or more other such series, to vote thereon by law or
pursuant to this Certificate of Incorporation (including any such certificate of
designation). Except as otherwise provided in this Article IV or required by law and
subject to the rights of the holders of any series of Preferred Stock, (i) holders of
Common Stock shall be entitled to elect directors of the Corporation; and (ii)
holders of Common Stock shall be entitled to vote on all other matters properly
submitted to a vote of stockholders of the Corporation. Cumulative voting of shares
of Common Stock is prohibited.
(4) Pre-Emptive or Preferential Rights. No holder of Common Stock shall
have a preemptive or preferential right to acquire or subscribe for any shares or
securities of any class, whether now or hereafter authorized, which may at any time
be issued, sold or offered for sale by the Corporation. Common Stock is not
convertible, redeemable or assessable, or entitled to the benefits of any sinking
fund.
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(b) Preferred Stock. The relative rights and preferences of the Preferred Stock of
each series shall be such as shall be stated in any resolution or resolutions adopted by the
Board of Directors setting forth the designation of the series and fixing and determining the
relative rights and preferences thereof, any such resolution or resolutions being herein called
a Directors Resolution. The authority of the Board of Directors with respect to each series
of Preferred Stock shall include, but not be limited to, determination of the following::
(1) The number of shares constituting the series and the distinctive designation
of the series;
(2) The dividend rate (or the method of calculation of dividends) on the shares
of the series, whether dividends will be cumulative, and if so, from which date or
dates, and the relative rights of priority, if any, of payment of dividends on shares
of the series;
(3) Whether the series shall have voting rights, in addition to the voting
rights provided by law, and if so, the terms of such voting rights;
(4) Whether the series shall have conversion privileges, and, if so, the terms
and conditions of such conversion, including provision for adjustment of the
conversion rate in such events as the Board of Directors shall determine;
(5) Whether the shares of that series shall be redeemable or exchangeable, and, if
so, the terms and conditions of such redemption or exchange, as the case may be,
including the date or dates upon or after which they shall be redeemable or
exchangeable, as the case may be, and the amount per share payable in case of
redemption, which amount may vary under different conditions and at different
redemption dates;
(6) Whether the series shall have a sinking fund for the redemption or purchase
of shares of that series, and if so, the terms and amount of such sinking fund;
(7) The rights of the shares of the series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation and the
relative rights or priority, if any, of payment of shares of the series; and
(8) Any other relative rights, preferences and limitations of that series.
Except for any difference so provided by the Board of Directors, the shares of Preferred
Stock will rank on parity with respect to the payment of dividends and to the distribution
of assets upon liquidation. Shares of any series of Preferred Stock which have been
redeemed (whether through the operation of a sinking find or otherwise) or which, if
convertible or exchangeable, have been converted into or exchanged for shares of stock of
any other class or classes shall have the status of authorized and unissued shares of
Preferred Stock and may be reissued as shares of the same or any other series of Preferred
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Stock. The Common Stock shall be subject to the express terms of any series of Preferred
Stock.
ARTICLE V
Board of Directors
(a) General. The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors. In addition to the authority and powers
conferred upon the Board of Directors by the DGCL or by the other provisions of this Certificate
of Incorporation, the Board of Directors is hereby authorized and empowered to exercise all such
powers and do all such acts and things as may be exercised or done by the Corporation, subject
to the provisions of the DGCL, this Certificate of Incorporation and the Bylaws of the
Corporation (the Bylaws).
(b) Number of Directors. The Board of Directors shall consist of one (1) or more
members, each of whom shall be a natural person. The number of directors of the Corporation
shall be fixed by, or in the manner provided in, the Bylaws of the Corporation.
(c) Classified Board of Directors. Effective upon the filing of this Certificate
of Incorporation with the Secretary of State of the State of Delaware (such date hereinafter
referred to as the Trigger Date), the directors, other than those who may be elected by the
holders of any series of Preferred Stock, shall be divided into three classes: Class I, Class II
and Class III. Such classes shall be as nearly equal in number of directors as possible. Each
such director shall serve for a term ending on the third annual meeting of stockholders
following the annual meeting of stockholders at which that director was elected; provided,
however, that the directors first designated as Class I directors shall serve for a term
expiring at the annual meeting of stockholders next following the date of their designation as
Class I directors, the directors first designated as Class II directors shall serve for a term
expiring at the second annual meeting of stockholders next following the date of their
designation as Class II directors and the directors first designated as Class III directors
shall serve for a term expiring at the third annual meeting of stockholders next following the
date of their designation as Class III directors. Upon the Trigger Date, if then permitted by
applicable law, the Board of Directors shall have the authority to designate the members of the
Board of Directors then in office as Class I directors, Class II directors and Class III
directors, respectively. Each director shall hold office until the annual meeting of
stockholders at which that directors term expires and, the foregoing notwithstanding, shall
serve until his successor shall have been duly elected and qualified or until his earlier death,
resignation, retirement, disqualification or removal. At each annual election, the directors
chosen to succeed those whose terms then expired shall be of the same class as the directors
they succeed, unless, by reason of any intervening changes in the authorized number of
directors, the Board of Directors shall have designated one or more directorships whose term
then expires as directorships of another class in order to more nearly achieve equality of
number of directors among the classes. In the event of any change in the authorized number of
directors, each director then continuing to serve as such shall nevertheless continue as a
director of the class of which he is a member until the expiration of his current term, or his
prior death,
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resignation, retirement, disqualification or removal. The Board of Directors shall
specify the class to which a newly created directorship shall be allocated.
(d) Quorum; Vacancies. Subject to the Bylaws, a majority of the entire Board of
Directors shall constitute a quorum for the transaction of business. Any vacancies and newly
created directorships resulting from an increase in the number of directors shall be filled by a
majority of the Board of Directors then in office, even if less than a quorum, and shall
hold office until the next stockholders meeting at which directors are elected and his successor
is elected and qualified or until his earlier death, resignation, retirement, disqualification
or removal from office.
(e) Removal. Any director may be removed with or without cause upon the affirmative
vote of the holders of a majority of the votes which could be cast by the holders of all
outstanding shares of capital stock entitled to vote for the election of directors, voting
together as a class, given at a duly called annual or special meeting of stockholders for which
notice, stating the purpose, or purposes, of the meeting is the removal of the director, is
given. In the event the Corporation has a classified Board of Directors, any such director may
only be removed for cause.
(f) No Written Ballot. Election of directors need not be by written ballot, unless
the Bylaws provide otherwise.
(g) Preferred Stock Directors. Notwithstanding the foregoing, whenever the holders
of one or more classes or series of Preferred Stock shall have the right, voting separately as a
class or series, to elect directors, the election, term of office, filling of vacancies, removal
and other features of such directorships shall be governed by the terms of the resolution or
resolutions adopted by the Board of Directors pursuant to ARTICLE IV applicable thereto, and
each director so elected shall not be subject to the provisions of this ARTICLE V unless
otherwise provided therein.
ARTICLE VI
Bylaws
(a) Board of Directors Power. The Board of Directors shall have the power 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 Board of Directors.
(b) Stockholders Power. The stockholders shall also have the power to adopt,
amend or repeal the Bylaws at any meeting before which such matter has been properly brought in
accordance with the Bylaws by the affirmative vote of the holders of a majority of the voting
power of the then issued and outstanding shares of the capital stock of the Corporation entitled
to vote generally in the election of directors, voting together as a single class.
(c) Prior Acts. No Bylaws hereafter adopted, or any amendments thereto, shall
invalidate any prior act of the Board of Directors that was valid at the time it was taken.
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ARTICLE VII
Creditors
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 of 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 of the DGCL 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
DGCL, order a meeting of the 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 manner as the said
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 consequence of such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said 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
Stockholders Meetings; Stockholders Action
At all meetings of stockholders, each stockholder shall be entitled to vote, in person or by
proxy, each share of voting stock owned by such stockholder of record on the record date for the
meeting. At each meeting of the stockholders, except where otherwise provided by this Certificate
of Incorporation, the Bylaws, or required by law, the holders of at least one-third of the issued
and outstanding shares of stock of the Corporation entitled to vote at such meeting, present in
person or represented by proxy, shall constitute a quorum for the transaction of business. When a
quorum is present or represented at any meeting, the affirmative vote of the holders of a majority
of the stock having voting power present in person or represented by proxy shall decide any
question, matter or proposal brought before such meeting unless the question is one upon which, by
express provision of law, this Certificate of Incorporation, the Bylaws or, with respect to a class
or series of Preferred Stock, the terms of the relevant Directors Resolutions, a different vote is
required, in which case such express provision shall govern and control the decision of such
question. Abstentions are to be treated as shares present in person or represented by proxy for
purposes of determining whether a quorum is present, but are to be treated as votes against such
question, matter or proposal.
ARTICLE IX
Corporate Existence
The Corporation is to have perpetual existence.
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ARTICLE X
Limitation of Liability
No director of the Corporation shall be liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for liability (i) for any
breach of the directors duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing violation of law,
(iii) under 174 of the DGCL, or (iv) for any transaction from which the director derived an
improper personal benefit. If the DGCL hereafter is amended to authorize the further elimination or
limitation of the liability of directors, then the liability of a director of the Corporation, in
addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the amended
DGCL. Any repeal or modification of this ARTICLE X by the stockholders of the Corporation shall be
prospective only and shall not adversely affect any limitation on the personal liability of a
director of the Corporation existing at the time of such repeal or modification.
ARTICLE XI
Indemnification
The Corporation shall indemnify its present or former directors, officers, employees and
agents or any person who served or is serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other
enterprise to the maximum extent permitted by the DGCL. The indemnification provided for herein
shall not be deemed exclusive of any other rights to which those seeking indemnification may be
entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Neither the amendment, change, alteration nor repeal of this ARTICLE XI, nor the adoption of any
provision of these Articles, the Bylaws of the Corporation, nor, to the fullest extent permitted by
Delaware Law, any modification of law, shall eliminate or reduce the effect of this ARTICLE XI or
the rights or any protections afforded under this ARTICLE XI in respect of any acts or omissions
occurring prior to such amendment, repeal, adoption or modification.
ARTICLE XII
Amendment
The Corporation reserves the right to amend, alter, change or repeal any provision contained
in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this reservation.
7
APPENDIX E
Bylaws of Astrotech Corporation (Delaware)
ASTROTECH CORPORATION
Incorporated under the laws
of the State of Delaware
BYLAWS
1
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ARTICLE 1 OFFICES |
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5 |
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Section 1.1.
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Registered Office
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5 |
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Section 1.2.
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Other Offices
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5 |
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ARTICLE 2 MEETINGS OF STOCKHOLDERS |
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5 |
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Section 2.1.
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Time and Place of Meetings
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5 |
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Section 2.2.
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Annual Meetings
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5 |
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Section 2.3.
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Nomination of Directors
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5 |
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Section 2.4.
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Special Meetings
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10 |
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Section 2.5.
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Notice of Annual or Special Meeting
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10 |
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Section 2.6.
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Adjournment
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Section 2.7.
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Quorum of Stockholders
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11 |
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Section 2.8.
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Conduct of the Stockholders Meeting
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Section 2.9.
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Stockholder Proposals (Other than Director Nominations)
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Section 2.10.
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Act of Stockholders
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Section 2.11.
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Shares
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15 |
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Section 2.12.
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Proxies
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Section 2.13.
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Voting List
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Section 2.14.
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Record Date
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Section 2.15.
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Action by Written Consent Without a Meeting
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Section 2.16.
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Dates of Consents to Action
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ARTICLE 3 BOARD OF DIRECTORS |
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17 |
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Section 3.1.
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Powers
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Section 3.2.
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Number of Directors
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17 |
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Section 3.3.
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Election and Term
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Section 3.4.
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Vacancies
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18 |
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Section 3.5.
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Resignation and Removal
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Section 3.6.
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Compensation of Directors
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Section 3.7.
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Interested Directors
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Section 3.8.
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Committees
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Section 3.9.
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Ratification
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ARTICLE 4 MEETINGS OF THE BOARD |
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20 |
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Section 4.1.
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General
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Section 4.2.
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First Meeting
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Section 4.3.
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Regular Meetings
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Section 4.4.
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Special Meetings
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Section 4.5.
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Business at Meeting
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Section 4.6.
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Quorum of Directors
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Section 4.7.
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Act of Directors Meeting
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Section 4.8.
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Action by Written Consent Without a Meeting
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Section 4.9.
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Conduct of Meetings of the Board of Directors
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ARTICLE 5 NOTICE |
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Section 5.1.
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Giving of Notice
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21 |
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Section 5.2.
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Waiver of Notice
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ARTICLE 6 TELEPHONE MEETINGS |
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21 |
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ARTICLE 7 OFFICERS |
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2
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Section 7.1.
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Executive Officers
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22 |
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Section 7.2.
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Election and Qualification
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22 |
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Section 7.3.
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Other Officers and Agents
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22 |
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Section 7.4.
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Salaries
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Section 7.5.
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Term, Removal, and Vacancies
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22 |
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Section 7.6.
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Chairman of the Board
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Section 7.7.
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Chief Executive Officer
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Section 7.8.
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Vice Presidents
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Section 7.9.
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Secretary
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Section 7.10.
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Assistant Secretaries
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Section 7.11.
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Treasurer
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Section 7.12.
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Assistant Treasurers
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Section 7.13.
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Officers Bond
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Section 7.14.
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Action with Respect to Securities of Other Corporations
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ARTICLE 8 INDEMNIFICATION OF OFFICERS AND DIRECTORS |
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24 |
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Section 8.1.
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General
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Section 8.2.
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Request for Indemnification
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Section 8.3.
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Determination
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Section 8.4.
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Determination of Entitlement; No Change in Control
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Section 8.5.
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Determination of Entitlement; Change of Control
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Section 8.6.
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Reimbursement in Advance
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Section 8.7.
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Procedures for Independent Counsel
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Section 8.8.
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Independent Counsel Expenses
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Section 8.9.
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Adjudication
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Section 8.10.
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Not Exclusive
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28 |
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Section 8.11.
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Insurance; Subrogation
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Section 8.12.
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Indemnification of Others
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Section 8.13.
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Severability
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Section 8.14.
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Definitions
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Section 8.15.
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Certain Action Where Indemnification Is Not Provided
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Section 8.16.
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Notices
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Section 8.17.
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Contractual Rights
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32 |
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Section 8.18.
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Successors and Assigns
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ARTICLE 9 CAPITAL STOCK |
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Section 9.1.
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Issuance and Consideration
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Section 9.2.
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Certificates Representing Shares
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Section 9.3.
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Lost, Stolen, or Destroyed Certificates
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33 |
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Section 9.4.
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Transfer of Shares
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Section 9.5.
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Registered Stockholders
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34 |
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Section 9.6.
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Dividends
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34 |
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ARTICLE 10 VOTING TRUSTS AND VOTING AGREEMENTS |
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34 |
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Section 10.1.
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Voting Trusts
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34 |
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Section 10.2.
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Voting Agreements
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34 |
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ARTICLE 11 GENERAL PROVISIONS |
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34 |
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Section 11.1.
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Distribution
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Section 11.2.
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Reserves
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35 |
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3
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Section 11.3.
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Checks
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35 |
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Section 11.4.
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Fiscal Year
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35 |
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Section 11.5.
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Seal
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35 |
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Section 11.6.
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Books and Records
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35 |
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Section 11.7.
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Reliance upon Books, Reports and Records
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35 |
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Section 11.8.
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Pronouns
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36 |
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Section 11.9.
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Facsimile Signatures
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36 |
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Section 11.10.
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Resignations
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36 |
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ARTICLE 12 AMENDMENTS |
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36 |
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CERTIFICATE BY SECRETARY |
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37 |
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4
BYLAWS
OF
ASTROTECH CORPORATION
(hereinafter called the Corporation)
ARTICLE 1
OFFICES
Section 1.1. Registered Office. The registered office of the Corporation required by
the General Corporation Law of the State of Delaware or any successor statute (the DGCL) to be
maintained in the State of Delaware shall be the registered office named in the Certificate of
Incorporation of the Corporation, as it may be amended or restated in accordance with the DGCL from
time to time (the Certificate of Incorporation), or such other office as may be designated from
time to time by the Board of Directors of the Corporation (the Board of Directors). Should the
Corporation maintain a principal office within the State of Delaware, such registered office need
not be identical to such principal office of the Corporation.
Section 1.2. Other Offices. The Corporation may also have offices at such other
places both within and without the State of Delaware as the Board of Directors may determine from
time to time or as the business of the Corporation may require.
ARTICLE 2
MEETINGS OF STOCKHOLDERS
Section 2.1. Time and Place of Meetings. Meetings of stockholders for any purpose may
be at such time and place within or without the State of Delaware as shall be stated in the notice
of the meeting or in a duly executed waiver of notice thereof. Subject to applicable law, the
Board of Directors may elect to postpone any previously scheduled meeting of stockholders.
Section 2.2. Annual Meetings. Annual meetings of stockholders for the election of
Directors and such other business as may properly be brought before the meeting shall be held at
such place within or without the State of Delaware and at such date and time as shall be designated
by the Board of Directors.
Section 2.3. Nomination of Directors
(a) Subject to such rights of holders of shares of one or more outstanding series of
preferred stock of the Corporation to elect one or more directors of the Corporation under
circumstances as shall be provided by or pursuant to the Certificate of Incorporation, only
persons who are nominated in accordance with the procedures set forth in this Section 2.3 shall
be eligible for election as, and to serve as, directors of the Corporation. Nominations of
persons for election to the Board of Directors may be made only at a meeting of the stockholders
of the Corporation at which directors of the Corporation are to be elected
5
(i) by or at the direction of the Board of Directors or (ii) (if, but only if, the Board of
Directors has determined that directors shall be elected at such meeting) by any stockholder of
the Corporation who is a stockholder of record at the time of the giving of such stockholders
notice provided for in this Section 2.3 and on the record date for the determination of
stockholders entitled to vote at such meeting, who shall be entitled to vote at such meeting in
the election of directors of the Corporation and who complies with the requirements of this
Section 2.3. Clause (ii) of the immediately preceding sentence shall be the exclusive means for
a stockholder to make any nomination of a person or persons for election as a director of the
Corporation at an annual meeting or special meeting (other than nominations properly brought
under Rule 14a-11 under the Exchange Act and included in the notice relating to the meeting (or
any supplement thereto) given by or at the direction of the Board of Directors in accordance
with Section 2.5 hereof). Any such nomination by a stockholder of the Corporation shall be
preceded by timely advance notice in writing to the Secretary of the Corporation.
(i) To be timely with respect to an annual meeting, such stockholders notice must
be delivered to, or mailed and received at, the principal executive offices of the
Corporation not earlier than the close of business on the one hundred twentieth (120th)
day and not later than the close of business on the ninetieth (90th) day prior to the
first anniversary of the annual meeting date of the immediately preceding annual
meeting; provided, however, that (1) if the scheduled annual meeting is called for a
date that is not within thirty (30) days before or after such anniversary date, notice
by such stockholder, to be timely, must be so delivered or received not earlier than the
close of business on the one hundred twentieth (120th) day and not later than the close
of business on the later of the 90th day prior to the date of such annual meeting or, if
less than one hundred (100) days prior notice or public disclosure of the scheduled
meeting date is given or made, the tenth (10th) day following the earlier of the day on
which the notice of such meeting was mailed to stockholders of the Corporation or the
day on which such public disclosure was made; and (2) if the number of directors to be
elected to the Board of Directors at such annual meeting is increased and there is no
prior notice or public disclosure by the Corporation naming all of the nominees for
director or specifying the size of the increased Board of Directors at least one hundred
(100) days prior to such anniversary date, a stockholders notice required by this
Section 2.3(a)(i) 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 principal
executive offices of the Corporation not later than the close of business on the tenth
(10th) day following the earlier of the day on which the notice of such meeting was
mailed to stockholders of the Corporation or the day on which such public disclosure was
made. To be timely with respect to a special meeting, such stockholders notice must be
delivered to, or mailed and received at, the principal executive offices of the
Corporation not earlier than the close of business on the one hundred twentieth (120th)
day and not later than the close of business on the ninetieth (90th) day prior to the
scheduled special meeting date; provided, however, that if less than one hundred (100)
days prior notice or public disclosure of the scheduled meeting date is given or made,
notice by such stockholder, to be timely, must be so delivered or received not later
than the close of business on the tenth (10th) day following the earlier of the day on
which the notice
6
of such meeting was mailed to stockholders of the Corporation or the day on which
such public disclosure was made. In no event shall any adjournment, postponement or
deferral of an annual meeting or special meeting or the announcement thereof commence a
new time period for the giving of a stockholders notice as described above.
(ii) Any such stockholders notice to the Secretary of the Corporation shall set
forth (i) as to each person whom such stockholder proposes to nominate for election or
re-election as a director of the Corporation, (A) the name, age, business address and
residence address of such person, (B) the principal occupation or employment of such
person, (C) any other information relating to such person that would be required to be
disclosed in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors of the Corporation in a contested
election, or would otherwise be required, in each case pursuant to Section 14 of the
Exchange Act and the rules and regulations promulgated thereunder (including, without
limitation, the written consent of such person to having such persons name placed in
nomination at the meeting and to serve as a director of the Corporation if elected), and
(D) a description of all direct and indirect compensation and other material monetary
agreements, arrangements and understandings during the past three years, and any other
material relationships, between or among such stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination is made, and their respective
affiliates and associates, or others acting in concert therewith, on the one hand, and
each proposed nominee, and his or her respective affiliates and associates, or others
acting in concert therewith, on the other hand, including, without limitation, all
information that would be required to be disclosed pursuant to Rule 404 promulgated
under Regulation S-K if such stockholder and such beneficial owner, or any affiliate or
associate thereof or person acting in concert therewith, were the registrant for
purposes of such rule and the nominee were a director or executive officer of such
registrant; and (ii) as to such stockholder giving the notice, the beneficial owner, if
any, on whose behalf the nomination is made and the proposed nominee, (A) the name and
address of such stockholder, as they appear on the Corporations books, and of such
beneficial owner, if any, and the name and address of any other stockholders known by
such stockholder to be supporting such nomination, (B) (1) the class or series and
number of shares of capital stock of the Corporation which are, directly or indirectly,
owned beneficially and of record by such stockholder, such beneficial owner and such
nominee, (2) any Derivative Instrument directly or indirectly owned beneficially by such
stockholder, such beneficial owner and such nominee and any other direct or indirect
opportunity to profit or share in any profit derived from any increase or decrease in
the value of shares of capital stock of the Corporation, (3) any proxy, contract,
arrangement, understanding or relationship the effect or intent of which is to increase
or decrease the voting power of such stockholder, beneficial owner or nominee with
respect to any shares of any security of the Corporation, (4) any pledge by such
stockholder, beneficial owner or nominee of any security of the Corporation or any short
interest of such stockholder, beneficial owner or nominee in any security of the
Corporation, (5) any rights to dividends on the shares of capital stock of the
Corporation owned beneficially by such stockholder, beneficial owner and nominee
7
that are separated or separable from the underlying shares of capital stock of the
Corporation, (6) any proportionate interest in shares of capital stock of the
Corporation or Derivative Instruments held, directly or indirectly, by a general or
limited partnership in which such stockholder, beneficial owner or nominee is a general
partner or, directly or indirectly, beneficially owns an interest in a general partner
and (7) any performance-related fees (other than an asset-based fee) that such
stockholder, beneficial owner or nominee is entitled to based on any increase or
decrease in the value of shares of capital stock of the Corporation or Derivative
Instruments, if any, as of the date of such notice, including, without limitation, for
purposes of clauses (B)(1) through (B)(7) above, any of the foregoing held by members of
such stockholders, beneficial owners or nominees immediate family sharing the same
household (which information shall be supplemented by such stockholder, beneficial
owner, if any, and nominee not later than 10 days after the record date for the meeting
to disclose such ownership as of the record date), (C) a representation that such
stockholder intends to appear in person or by proxy at the meeting to nominate the
persons named in its notice and (D) a description of all agreements, arrangements and
understandings between such stockholder and beneficial owner, if any, and each proposed
nominee and any other person or persons (including their names) pursuant to which the
nomination(s) are to be made by such stockholder, (E) any other information relating to
such stockholder, beneficial owner, if any, and nominee that would be required to be
disclosed in a proxy statement or other filing required to be made in connection with
solicitations of proxies for election of directors of the Corporation in a contested
election, or would otherwise be required, in each case pursuant to Section 14 of the
Exchange Act and the rules and regulations promulgated thereunder. Any such
stockholders notice to the Secretary of the Corporation shall also include or be
accompanied by, with respect to each nominee for election or reelection to the Board of
Directors, a completed and signed questionnaire, representation and agreement required
by Section 2.3(b). The Corporation may require any proposed nominee to furnish such
other information as may reasonably be required by the Corporation to determine the
eligibility of such proposed nominee to serve as an independent director of the
Corporation or that could be material to a reasonable stockholders understanding of the
independence, or lack thereof, of such nominee.
(iii) A stockholder providing notice of any nomination proposed to be made at a
meeting shall further update and supplement such notice, if necessary, so that the
information provided or required to be provided in such notice pursuant to this Section
2.3(a) shall be true and correct as of the record date for the meeting and as of the
date that is ten business days prior to the meeting or any adjournment or postponement
thereof, and such update and supplement shall be delivered to, or mailed and received
at, the principal executive offices of the Corporation not later than five (5) business
days after the record date for the meeting (in the case of the update and supplement
required to be made as of the record date), and not later than eight (8) business days
prior to the date for the meeting, if practicable (or, if not practicable, on the first
practicable date prior to the date for the meeting) or any adjournment or postponement
thereof (in the case of the update and supplement required to be made as of ten business
days prior to the meeting or any adjournment
8
or postponement thereof). In addition, a stockholder providing notice of any
nomination proposed to be made at a meeting shall update and supplement such notice, and
deliver such update and supplement to the principal executive offices of the
Corporation, promptly following the occurrence of any event that materially changes the
information provided or required to be provided in such notice pursuant to this Section
2.3(a).
(b) Nothing in this Section 2.3 shall be deemed to affect any rights (i) of stockholders to
request inclusion of nominees in the Corporations proxy statement pursuant to Rule 14a-11 under
the Exchange Act or (ii) of the holders of any series of preferred stock if and to the extent
provided for under law, the Certificate of Incorporation or these Bylaws.
(i) To be eligible to be a nominee for election or reelection as a director of the
Corporation (or, in the case of a nomination brought under Rule 14a-11 of the Exchange
Act, to serve as a director of the Corporation), a person must deliver (in accordance
with the time periods prescribed for delivery of notice under Section 2.3(a) or, in the
case of a nomination brought under Rule 14a-11 of the Exchange Act, prior to the time
such person is to begin service as a director) to the Secretary at the principal
executive offices of the Corporation a written questionnaire with respect to the
background and qualification of such person and the background of any other person or
entity on whose behalf the nomination is being made (which questionnaire shall be in the
form provided by the Secretary upon written request) and a written representation and
agreement (in the form provided by the Secretary upon written request) that such person
(A) is not and will not become a party to (1) any agreement, arrangement or
understanding with, and has not given any commitment or assurance to, any person or
entity as to how such person, if elected as a director of the Corporation, will act or
vote on any issue or question (a Voting Commitment) that has not been disclosed to the
Corporation or (2) any Voting Commitment that could limit or interfere with such
persons ability to comply, if elected as a director of the Corporation, with such
persons fiduciary duties under applicable law, (B) is not and will not become a party
to any agreement, arrangement or understanding with any person or entity other than the
Corporation with respect to any direct or indirect compensation, reimbursement or
indemnification in connection with service or action as a director that has not been
disclosed therein and (C) in such persons individual capacity and on behalf of any
person or entity on whose behalf the nomination is being made, would be in compliance,
if elected as a director of the Corporation, and will comply with all applicable
publicly disclosed corporate governance, conflict of interest, confidentiality and stock
ownership and trading policies and guidelines of the Corporation.
(ii) The Chairman of the Board or, if he is not presiding, the presiding officer of
the meeting of stockholders of the Corporation shall determine whether the requirements
of this Section 2.3 have been met with respect to any nomination or intended nomination.
If the Chairman of the Board or the presiding officer determines that any nomination
was not made in accordance with the requirements of this Section 2.3, he shall so
declare at the meeting and the defective nomination shall be disregarded. In addition
to the foregoing provisions of this Section 2.3, a
9
stockholder of the Corporation shall also comply with all applicable requirements
of the Exchange Act and the rules and regulations thereunder with respect to the matters
set forth in this Section 2.3. Nothing in this Section 2.3 shall be deemed to affect
any rights of stockholders to request inclusion of proposals in the Corporations proxy
statement pursuant to Rule 14a-8 under the Exchange Act.
Section 2.4. Special Meetings.
(a) Except as otherwise required by law, or by or pursuant to the Certificate of
Incorporation, special meetings of the stockholders for any purpose or purposes may be called by
the Chief Executive Officer, the Board of Directors or by the holders of not less than a
majority of all of the outstanding shares entitled to vote. A request for a special meeting
shall state the purpose or purposes of the proposed meeting, and business transacted at any
special meeting of the stockholders shall be limited to the purposes stated in the notice.
(b) Nominations of persons for election to the Board of Directors may be made at a special
meeting of stockholders at which directors are to be elected pursuant to the Corporations
notice of meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder
of record of the Corporation who is a stockholder of record at the time of giving of notice
provided for in this paragraph, who shall be entitled to vote at the meeting and who complies
with the notice procedures set forth in Section 2.3. Nominations by stockholders of persons for
election to the Board of Directors may be made at such a special meeting of stockholders if the
stockholders notice required by Section 2.3(a)(i) shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the close of business on the later
of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the
day on which public announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting.
(c) Notwithstanding the foregoing provisions of this Section 2.4, a stockholder shall also
comply with all applicable requirements of the Exchange Act and the rules and regulations
thereunder with respect to matters set forth in this Section 2.4. Nothing in this Section 2.4
shall be deemed to affect any rights of stockholders to request inclusion of proposals in the
Corporations proxy statement pursuant to Rule 14a-8 under the Exchange Act.
Section 2.5. Notice of Annual or Special Meeting. Except as otherwise provided by
law, notice of each meeting of stockholders, whether annual or special, shall be given not less
than ten (10) or more than sixty (60) days before the date of the meeting to each stockholder
entitled to vote at such meeting. Without limiting the manner by which notice otherwise may be
given to stockholders, any notice shall be effective if given by a form of electronic transmission
consented to (in a manner consistent with the DGCL) by the stockholder to whom the notice is given.
The notices of all meetings shall state the place, date and time 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 such meeting. The notice of a special meeting shall state, in addition, the
purpose or purposes for which the meeting is called. If notice is given by
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mail, such notice shall be deemed given when deposited in the United States mail, postage
prepaid, directed to the stockholder at such stockholders address as it appears on the records of
the Corporation. If notice is given by electronic transmission, such notice shall be deemed given
at the time specified in Section 232 of the DGCL. However, no notice need be given to a
stockholder if (i) notice of two consecutive annual meetings and all notices of meetings or of the
taking of action by written consent without a meeting to such person during the period between such
two consecutive annual meetings, if any, or (ii) all (but in no event less than two) payments (if
sent by first class mail) of distributions or interest on securities during a twelve (12) month
period have been mailed to that person, addressed at his address as shown on the records of the
Corporation, and have been returned undeliverable. Any action or meeting taken or held without
notice to such person shall have the same force and effect as if the notice had been duly given
and, if the action taken by the Corporation is reflected in any certificate or document filed with
the Secretary of State, that certificate or document may state that notice was duly given to all
persons to whom notice was required to be given. If such a person delivers to the Corporation a
written notice setting forth his then current address, the requirement that notice be given to that
person shall be reinstated.
Section 2.6. Adjournment. When a meeting is adjourned to another time or place, it
shall not be necessary to give any notice of the adjourned meeting if the time and place to which
the meeting is adjourned is announced at the meeting at which the adjournment is taken. If, after
adjournment, the Board of Directors fixes a new record date for the adjourned meeting or if the
adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to
each stockholder who is entitled to vote at such adjourned meeting. At any adjourned meeting, any
business may be transacted that might have been transacted on the original date of the meeting.
Section 2.7. Quorum of Stockholders. Unless provided in the Certificate of
Incorporation or by law, the holders of a majority of the shares entitled to vote, represented in
person or by proxy, shall constitute a quorum at all meetings of the stockholders. Unless
otherwise provided in the Certificate of Incorporation, once a quorum is present at a meeting of
stockholders, the stockholders represented in person or by proxy at the meeting may conduct such
business as may be properly brought before the meeting until it is adjourned, and the subsequent
withdrawal from the meeting of any stockholder or the refusal of any stockholder represented in
person or by proxy to vote shall not affect the presence of a quorum at the meeting. Where a
separate vote by a class or classes or series is required, a majority of the voting power of the
shares of such class or classes or series present in person or represented by proxy shall
constitute a quorum entitled to take action with respect to that vote on that matter. Unless
otherwise provided in the Certificate of Incorporation, the stockholders represented in person or
by proxy at a meeting of stockholders at which a quorum is not present may adjourn the meeting
until such time and to such place as may be determined by a vote of the holders of a majority of
the shares represented in person or by proxy at that meeting. Broker non-votes shall be
considered present at the meeting with respect to the determination of a quorum but shall not be
considered as votes cast with respect to matters as to which no authority is granted.
Section 2.8. Conduct of the Stockholders Meeting. At every meeting of the
stockholders, the Chairman of the Board, if there is a person holding such position, or if not or
in his absence, the Chief Executive Officer of the Corporation, or in his absence, a Vice President
11
'
designated by the Chief Executive Officer, or, in the absence of the Chief Executive Officer
and Vice President, a chairman chosen by the majority of the voting shares represented in person or
by proxy shall act as chairman. The Secretary of the Corporation or a person designated by the
chairman of the meeting shall act as secretary of the meeting.
Section 2.9. Stockholder Proposals (Other than Director Nominations).
(a) At an annual meeting of stockholders of the Corporation, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been properly brought
before such annual meeting. To be properly brought before an annual meeting, business or
proposals (other than any nomination of directors of the Corporation, which is governed by
Section 2.3 hereof) must (i) be specified in the notice relating to the meeting (or any
supplement thereto) given by or at the direction of the Board of Directors in accordance with
Section 2.5 hereof, (ii) otherwise be properly brought before the annual meeting by or at the
direction of the Board of Directors or (iii) be properly brought before the meeting by a
stockholder of the Corporation who (A) is a stockholder of record at the time of the giving of
such stockholders notice provided for in this Section 2.9 and on the record date for the
determination of stockholders entitled to vote at such annual meeting, (B) shall be entitled to
vote at the annual meeting and (C) complies with the requirements of this Section 2.9, and
otherwise be proper subjects for stockholder action and be properly introduced at the annual
meeting. Clause (iii) of the immediately preceding sentence shall be the exclusive means for a
stockholder to submit business or proposals (other than matters properly brought under Rule
14a-8 or Rule 14a-11 under the Exchange Act and included in the notice relating to the meeting
(or any supplement thereto) given by or at the direction of the Board of Directors in accordance
with Section 2.5 hereof) for consideration at an annual meeting of stockholders of the
Corporation.
(b) For a proposal to be properly brought before an annual meeting by a stockholder of the
Corporation pursuant to these provisions, in addition to any other applicable requirements, such
stockholder must have given timely advance notice thereof in writing to the Secretary of the
Corporation. To be timely, such stockholders notice must be delivered to, or mailed and
received at, the principal executive offices of the Corporation not earlier than the close of
business on the one hundred twentieth (120th) day and not later than the close of business on
the ninetieth (90th) day prior to the first anniversary of the annual meeting date of the
immediately preceding annual meeting; provided, however, that if the scheduled annual meeting
date is called for a date that is not within thirty (30) days before or after such anniversary
date, notice by such stockholder, to be timely, must be so delivered or received not earlier
than the close of business on the one hundred twentieth (120th) day and not later than the close
of business on the later of the ninetieth (90th) day prior to the date of such annual meeting
or, if less than one hundred (100) days prior notice or public disclosure of the scheduled
meeting date is given or made, the 10th day following the earlier of the day on which the notice
of such meeting was mailed to stockholders of the Corporation or the day on which such public
disclosure was made. In no event shall any adjournment, postponement or deferral of an annual
meeting or the announcement thereof commence a new time period for the giving of a timely notice
as described above.
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(c) Any such stockholders notice to the Secretary of the Corporation shall set forth as to
each matter such stockholder proposes to bring before the annual meeting (i) a description of
the proposal desired to be brought before the annual meeting and the reasons for conducting such
business at the annual meeting, together with the text of the proposal or business (including
the text of any resolutions proposed for consideration), (ii) as to such stockholder proposing
such business and the beneficial owner, if any, on whose behalf the proposal is made, (A) the
name and address of such stockholder, as they appear on the Corporations books, and of such
beneficial owner, if any, and the name and address of any other stockholders known by such
stockholder to be supporting such business or proposal, (B)(1) the class or series and number of
shares of capital stock of the Corporation which are, directly or indirectly, owned beneficially
and of record by such stockholder and such beneficial owner, (2) any option, warrant,
convertible security, stock appreciation right or similar right with an exercise or conversion
privilege or a settlement payment or mechanism at a price related to any class or series of
shares of capital stock of the Corporation or with a value derived in whole or in part from the
price, value or volatility of any class or series of shares of capital stock of the Corporation
or any derivative or synthetic arrangement having characteristics of a long position in any
class or series of shares of capital stock of the Corporation, whether or not such instrument or
right shall be subject to settlement in the underlying class or series of capital stock of the
Corporation or otherwise (a Derivative Instrument) directly or indirectly owned beneficially
by such stockholder and by such beneficial owner and any other direct or indirect opportunity to
profit or share in any profit derived from any increase or decrease in the value of shares of
capital stock of the Corporation, (3) any proxy, contract, arrangement, understanding or
relationship the effect or intent of which is to increase or decrease the voting power of such
stockholder or beneficial owner with respect to any shares of any security of the Corporation,
(4) any pledge by such stockholder or beneficial owner of any security of the Corporation or any
short interest of such stockholder or beneficial owner in any security of the Corporation (for
purposes of this Section 2.9 and Section 2.3, a person shall be deemed to have a short interest
in a security if such person directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has the opportunity to profit or share in any profit
derived from any decrease in the value of the subject security), (5) any rights to dividends on
the shares of capital stock of the Corporation owned beneficially by such stockholder and by
such beneficial owner that are separated or separable from the underlying shares of capital
stock of the Corporation, (6) any proportionate interest in shares of capital stock of the
Corporation or Derivative Instruments held, directly or indirectly, by a general or limited
partnership in which such stockholder or beneficial owner is a general partner or, directly or
indirectly, beneficially owns an interest in a general partner and (7) any performance-related
fees (other than an asset-based fee) that such stockholder or beneficial owner is entitled to
based on any increase or decrease in the value of shares of capital stock of the Corporation or
Derivative Instruments, if any, as of the date of such notice, including, without limitation,
for purposes of clauses (B)(1) through (B)(7) above, any of the foregoing held by members of
such stockholders or beneficial owners immediate family sharing the same household (which
information shall be supplemented by such stockholder and beneficial owner, if any, not later
than 10 days after the record date for the meeting to disclose such ownership as of the record
date), and (C) any other information relating to such stockholder and beneficial owner, if any,
that would be required to be disclosed in a proxy statement or other filing required to be
13
made in connection with solicitations of proxies for the proposal, or would otherwise be
required, in each case pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder; (iii) any material interest of such stockholder and beneficial owner, if
any, in such business or proposal, (iv) a representation that such stockholder intends to appear
in person or by proxy at the annual meeting to bring such business before the meeting and (v) a
description of all agreements, arrangements and understandings between such stockholder and
beneficial owner, if any, and any other person or persons (including their names) in connection
with such business or proposal by such stockholder.
(d) A stockholder providing notice of business proposed to be brought before an annual
meeting shall further update and supplement such notice, if necessary, so that the information
provided or required to be provided in such notice pursuant to this Section 2.9 shall be true
and correct as of the record date for the meeting and as of the date that is ten business days
prior to the meeting or any adjournment or postponement thereof, and such update and supplement
shall be delivered to, or mailed and received at, the principal executive offices of the
Corporation not later than five business days after the record date for the meeting (in the case
of the update and supplement required to be made as of the record date), and not later than
eight business days prior to the date for the meeting, if practicable (or, if not practicable,
on the first practicable date prior to the date for the meeting) or any adjournment or
postponement thereof (in the case of the update and supplement required to be made as of ten
business days prior to the meeting or any adjournment or postponement thereof). In addition, a
stockholder providing notice of business proposed to be brought before an annual meeting shall
update and supplement such notice, and deliver such update and supplement to the principal
executive offices of the Corporation, promptly following the occurrence of any event that
materially changes the information provided or required to be provided in such notice pursuant
to this Section 2.9.
(e) The Chairman of the Board or, if he is not presiding, the presiding officer of the
meeting of stockholders of the Corporation shall determine whether the requirements of this
Section 2.9 have been met with respect to any stockholder proposal. If the Chairman of the
Board or the presiding officer determines that any stockholder proposal was not made in
accordance with the terms of this Section 2.9, he shall so declare at the meeting and any such
proposal shall not be acted upon at the meeting.
(f) For purposes of this Section 2.9 and Section 2.3, public disclosure shall mean
disclosure in a press release issued by the Corporation or in a document publicly filed or
furnished by the Corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.
(g) At a special meeting of stockholders of the Corporation, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been properly brought
before such special meeting. To be properly brought before such a special meeting, business or
proposals (other than any nomination of directors of the Corporation, which is governed by
Section 2.3 hereof) must (i) be specified in the notice relating to the meeting (or any
supplement thereto) given by or at the direction of the Board of Directors in
14
accordance with Section 2.5 hereof or (ii) constitute matters incident to the conduct of
the meeting as the Chairman of the Board or the presiding officer of the meeting shall determine
to be appropriate. Stockholders shall not be permitted to propose business to be brought before
a special meeting of the stockholders.
(h) This Section 2.9 is expressly intended to apply to any business proposed to be brought
before an annual or special meeting of stockholders. In addition to the foregoing provisions of
this Section 2.9, a stockholder of the Corporation shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Section 2.9. Nothing in this Section 2.9 shall be deemed to affect
any rights (i) of stockholders to request inclusion of proposals in the Corporations proxy
statement pursuant to Rule 14a-8 under the Exchange Act, (ii) of stockholders to request
inclusion of nominees in the Corporations proxy statement pursuant to Rule 14a-11 under the
Exchange Act or (iii) of the holders of any series of preferred stock if and to the extent
provided for under law, the Certificate of Incorporation or these Bylaws.
Section 2.10. Act of Stockholders. With respect to any matter other than the election
of directors, the affirmative vote of the holders of a majority of the shares entitled to vote on
the matter and present in person or represented by proxy at a meeting of stockholders at which a
quorum is present shall be the act of the stockholders, unless the vote of a greater number is
required by law or by the Certificate of Incorporation. Directors shall be elected by a plurality
of the votes cast by the holders of shares entitled to vote in the election of directors at a
meeting of stockholders at which a quorum is present, unless the vote of a greater number is
required by the Certificate of Incorporation or the DGCL.
Section 2.11. Shares. Each outstanding share, regardless of class, shall be entitled
to one vote on each matter submitted to a vote at a meeting of stockholders, except to the extent
that the Certificate of Incorporation provides for more or less than one vote per share or limits
or denies voting rights to the holders of the shares of any class or series, or as otherwise
provided by law. At each election for directors every stockholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of shares owned by him or
as many persons as there are directors to be elected and for whose election he has the right to
vote. The vote on any other matter before the meeting shall be by ballot only if so ordered by the
person presiding at the meeting or if so requested by any stockholder present, in person or by
proxy, at the meeting and entitled to vote on such matter.
Section 2.12. Proxies. At any meeting of the stockholders, each stockholder having
the right to vote shall be entitled to vote either in person or by proxy executed in writing by the
stockholder. Any copy, facsimile telecommunication or other reliable reproduction of the writing
or transmission created pursuant to this paragraph may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original writing or
transmission could be used, provided that such copy, facsimile telecommunication or other
reproduction shall be a complete reproduction of the entire original writing or transmission. No
proxy shall be valid after three (3) years from the date of its execution unless otherwise provided
in the proxy. Each proxy shall be revocable unless the proxy form conspicuously states that the
proxy is irrevocable and the proxy is coupled with an interest or unless otherwise made irrevocable
by law.
15
Section 2.13. Voting List. The officer or agent having charge of the stock ledger for
shares of the Corporation shall make, at least ten (10) days before each meeting of stockholders, a
complete list of the stockholders entitled to vote at such meeting or any adjournment thereof,
arranged in alphabetical order, with the address of and the number of shares held by each
stockholder, which list, for a period of ten (10) days prior to such meeting, shall be held open
for examination by any stockholder in the manner provided by law. Such list shall also be produced
and kept open at the time and place of the meeting and shall be subject to the inspection of any
stockholder during the whole time of the meeting. The original stock ledger shall be the only
evidence as to who are the stockholders entitled to examine such list or stock ledger or to vote in
person or by proxy at any such meeting of stockholders.
Section 2.14. Record Date. For the purpose of determining stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof, or 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 to any change, conversion, or exchange of
stock, or in order to make a determination of stockholders for any other proper purpose (other than
determining stockholders entitled to consent to action by stockholders proposed to be taken without
a meeting of stockholders), the Board of Directors may fix in advance a date as the record date for
any such determination of stockholders, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, such date in any case to be
not more than sixty (60) days and, in case of a meeting of stockholders, not less than ten (10)
days, prior to the date on which the particular action requiring such determination of stockholders
is to be taken. If no record date is fixed for the determination of stockholders entitled to
notice of or to vote at a meeting of stockholders, the record date 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. Except as
otherwise provided in these Bylaws, 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. If no
record date is fixed for the determination of 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 in order to make a
determination of stockholders for any other proper purpose (other than determining stockholders
entitled to consent to action by stockholders proposed to be taken without a meeting of
stockholders), the record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the Board of Directors adopts the resolution relating
thereto.
Section 2.15. Action by Written Consent Without a Meeting. Any action required by
the DGCL to be taken at any annual or special meeting of stockholders, or any action which may be
taken at any annual or special meeting of stockholders, may be taken without a meeting, without
prior notice, and without a vote, if a consent or consents in writing, setting forth the action so
taken, shall have been signed by the holder or holders of shares having not less than the minimum
number of votes that would be necessary to authorize or take such action at a meeting at which the
holders of all shares entitled to vote on the action were present and voted and 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
16
in which proceeds of meetings of stockholders are recorded. Every written consent shall bear
the date of signature of each stockholder who signs the consent. No written consent shall be
effective to take the action that is the subject of the consent unless, within sixty (60) days
after the date of the earliest dated consent delivered to the Corporation in the manner required by
this section, a consent or consents signed by the holder or holders of shares having not less than
the minimum number of votes that would be necessary to take the action that is the subject of the
consent 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 books in which proceedings of meetings of stockholders are recorded. Delivery shall be by
hand or certified or registered mail, return receipt requested. Delivery to the Corporations
principal place of business shall be addressed to the Chief Executive Officer of the Corporation.
A telegram, telex, cablegram, or other electronic transmission by a stockholder, or a photographic,
photostatic, facsimile, or similar reproduction of a writing signed by a stockholder, shall be
regarded as signed by the stockholder for purposes of this section. Prompt notice of the taking of
any action by stockholders without a meeting by less than unanimous written consent shall be given
to those stockholders who did not consent in writing to the action.
Section 2.16. Dates of Consents to Action. Whenever action by stockholders is
proposed to be taken by consent in writing without a meeting of stockholders, the Board of
Directors may fix a record date for the purpose of determining stockholders entitled to consent to
that action, which record date shall not precede, and 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. If
no record date has been fixed by the Board of Directors and no prior action of the Board of
Directors is required by law, the record date for determining stockholders entitled to consent to
action in writing without a meeting 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, its principal place of business, or an officer or agent of the
Corporation having custody of the books in which proceedings of meetings of stockholders are
recorded. Delivery shall be by hand or by certified or registered mail, return receipt requested.
Delivery to the Corporations principal place of business shall be addressed to the Chief Executive
Officer of the Corporation. If no record date shall have been fixed by the Board of Directors and
prior action of the Board of Directors is required by law, the record date for determining
stockholders entitled to consent to action in writing without a meeting shall be at the close of
business on the day on which the Board of Directors adopts a resolution taking such prior action.
ARTICLE 3
BOARD OF DIRECTORS
Section 3.1. Powers. The powers of the Corporation shall be exercised by or under the
authority of, and the business and affairs of the Corporation shall be managed under the direction
of, the Board of Directors, which may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by law, the Certificate of Incorporation, or these Bylaws
directed or required to be exercised and done by the stockholders.
Section 3.2. Number of Directors. The number of directors of the Corporation
constituting the Board of Directors shall be at least one (1) and no more than seven (7) and shall
17
otherwise be fixed from time to time by resolution of the Board of Directors. No decrease
shall have the effect of shortening the term of any incumbent director.
Section 3.3. Election and Term. Unless removed in accordance with the provisions of
these Bylaws and the Certificate of Incorporation, the initial Board of Directors shall hold office
until the first annual meeting of stockholders and until their successors shall have been elected
and qualified. At the first annual meeting of stockholders and at each annual meeting thereafter,
the holders of shares entitled to vote in the election of directors as herein provided shall elect
directors to hold office until the next succeeding annual meeting, except in case of the
classification of directors, in which case the directors would hold office until the end of their
respective terms as set forth in the Certificate of Incorporation. Unless removed in accordance
with the provisions of these Bylaws and the Certificate of Incorporation, each director shall hold
office for the term for which he is elected and until his successor shall have been elected and
qualified. Directors need not be resident of the State of Delaware or stockholders of the
Corporation.
Section 3.4. Vacancies. Any vacancy occurring in the Board of Directors and any newly
created directorships resulting from any increase in the authorized number of directors shall be
filled as provided in the Certificate of Incorporation.
Section 3.5. Resignation and Removal.
(a) Any director may resign at any time upon giving written notice to the Corporation.
Unless otherwise provided in the Certificate of Incorporation, 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 as provided in these Bylaws in the
filling of other vacancies.
(b) At any meeting of stockholders called expressly for the purpose of removing a director
or directors, any director or the entire Board of Directors may be removed for cause by a vote
of the holders of a majority of the shares then entitled to vote at an election of directors,
subject to any further restrictions on removal that may be contained in these Bylaws. If the
holders of any class or series of shares are entitled to elect one or more directors by the
provisions of the Certificate of Incorporation, only the holders of shares of that class or
series shall be entitled to vote for or against the removal of any director elected by the
holders of shares of that class or series.
Section 3.6. Compensation of Directors. As specifically prescribed from time to time
by resolution of the Board of Directors, the directors of the Corporation may be paid their
expenses of attendance at each meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary in their capacity as
directors. This provision shall not preclude any director from serving the Corporation in any
other capacity and receiving compensation therefore. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
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Section 3.7. Interested Directors. No contract or transaction between the Corporation
and one or more of its directors or officers or between the Corporation and any other corporation,
partnership, association, or other organization in which one or more of its directors or officers
are directors or officers or have a financial interest shall be void or voidable solely for this
reason, or solely because the director or officer is present at or participates in the meeting of
the Board of Directors or a committee thereof, which authorize the contract or transaction, or
solely because his or their votes are counted for such purpose, if: (i) the material facts as to
his relationship or interest and as to the contract or transaction are disclosed or are known to
the Board of Directors or such committee, and the Board of Directors or such committee in good
faith authorizes the contract or transaction by the affirmative vote of a majority of the
disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the
material facts as to his relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders; or (iii) the
contract or transaction is fair as to the Corporation as of the time it is authorized, approved, or
ratified by the Board of Directors, a committee thereof, or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee thereof which authorizes the contract or transaction.
Section 3.8. Committees.
(a) The Board of Directors may from time to time designate committees of the Board of
Directors, with such lawfully delegable powers and duties as it thereby confers, to serve at the
pleasure of the Board of Directors and shall, for those committees and any others provided for
herein, have the power at any time to change the membership of any such committee and to fill
vacancies in it. In the absence or disqualification of any member of any committee and any
alternate member in his or her place, the member or members of the committee present at the
meeting and not disqualified from voting, whether or not he or she or they constitute a quorum,
may by unanimous vote appoint another member of the Board of Directors to act at the meeting in
the place of the absent or disqualified member.
(b) Each committee may determine the procedural rules for meeting and conducting its
business and shall act in accordance therewith, except as otherwise provided herein or required
by law. Adequate provision shall be made for notice to members of all meetings; a majority of
the members shall constitute a quorum unless the committee shall consist of one (1) or two (2)
members, in which event one (1) member shall constitute a quorum; and all matters shall be
determined by a majority vote of the members present. Action may be taken by any committee
without a meeting if all members thereof consent thereto in writing or by electronic
transmission, and the writing or writings or electronic transmission or transmissions are filed
with the minutes of the proceedings of such 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.
Section 3.9. Ratification. Any transaction questioned in any stockholders derivative
proceeding on the ground of lack of authority, defective or irregular execution, adverse interest
of director, officer or stockholder, non-disclosure, miscomputation, or the application of improper
principles or practices of accounting may be ratified before or after judgment by the
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Board of Directors or, if less than a quorum of directors is qualified, by a committee of
qualified directors or by the stockholders; and, if so ratified, shall have the same force and
effect as if the questioned transaction had been originally duly authorized, and said ratification
shall be binding upon the Corporation and its stockholders and shall constitute a bar to any claim
or execution of any judgment in respect of such questioned transaction.
ARTICLE 4
MEETINGS OF THE BOARD
Section 4.1. General. Meetings of the Board of Directors, regular or special, may be
held either within or without the State of Delaware.
Section 4.2. First Meeting. The first meeting of each newly elected Board of
Directors shall be held at such time and place as shall be fixed by the vote of the stockholders at
the annual meeting and no notice of such meeting shall be necessary to the newly elected directors
in order legally to constitute the meeting; provided that a quorum shall be present. In the event
that the stockholders fail to fix the time and place of such first meeting, it shall be held
without notice immediately following the annual meeting of stockholders, and at the same place,
unless by the unanimous consent of the directors then elected and serving such time or place shall
be changed.
Section 4.3. Regular Meetings. Regular meetings of the Board of Directors may be held
upon such notice, or without notice, and at such time and at such place as shall from time to time
be determined by the Board of Directors.
Section 4.4. Special Meetings. Special meetings of the Board of Directors may be
called by the Chairman of the Board or the Chief Executive Officer and shall be called by the Chief
Executive Officer or Secretary on the written request of at least two (2) members of the Board of
Directors. Notice of each special meeting of the Board of Directors shall be given to each
director in accordance with Section 5.1.
Section 4.5. Business at Meeting. Except as may be otherwise provide by law or by the
Certificate of Incorporation or by the bylaws, neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
Section 4.6. Quorum of Directors. A majority of the number of directors fixed by, or
in the manner provided in, the Certificate of Incorporation or these Bylaws shall constitute a
quorum for the transaction of business unless a greater number is required by law, the Certificate
of Incorporation, or these Bylaws. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present.
Section 4.7. Act of Directors Meeting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board of Directors unless
the act of a greater number is required by law, the Certificate of Incorporation, or these Bylaws.
Section 4.8. Action by Written Consent Without a Meeting. Any action required or
permitted by law, the Certificate of Incorporation, or these Bylaws to be taken at a meeting of the
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Board of Directors or any committee thereof may be taken without a meeting if a consent in
writing, setting forth the action so taken, is signed by all of the members of the Board of
Directors or committee, as the case may be, and the written consent or consents are filed with the
minutes of proceedings of the Board of Directors or such committee. Such consent shall have the
same force and effect as a unanimous vote at a meeting.
Section 4.9. Conduct of Meetings of the Board of Directors. The Chairman of the Board
or, in such persons absence, a chairman chosen by the Board of Directors at the meeting shall call
to order any meeting of the Board of Directors and act as chairman of the meeting. The Secretary
shall act as secretary of the meeting, but, in such persons absence, the chairman of the meeting
may appoint any person to act as secretary of the meeting.
ARTICLE 5
NOTICE
Section 5.1. Giving of Notice. Notice of any special meeting of directors shall be
given to each director by the Secretary or by the officer or one of the directors calling the
meeting. Notice shall be duly given to each director (a) in person, by telephone or by electronic
mail at least twenty four (24) hours in advance of the meeting, (b) by sending written notice via
reputable overnight courier or telecopy, or delivering written notice by hand, to such directors
last known business or home address at least forty eight (48) hours in advance of the meeting, or
(c) by sending written notice via first-class mail to such directors last known business or home
address at least seventy two (72) hours in advance of the meeting. A notice or waiver of notice of
a meeting of the Board of Directors need not specify the purposes of the meeting.
Section 5.2. Waiver of Notice. Whenever notice is required to be given by law, by the
Certificate of Incorporation or by these Bylaws, a written waiver signed by the person entitled to
notice, or a waiver by electronic transmission by the person entitled to notice, whether before, at
or after the time stated in such notice, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except when the person
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.
ARTICLE 6
TELEPHONE MEETINGS
Unless otherwise restricted by the Certificate of Incorporation, members of the Board of
Directors or members of any committee designated by the Board of Directors may participate in and
hold a meeting of the Board of Directors or such committee by means of conference telephone or
similar communications equipment by means of which all persons participating in the meeting can
hear each other. Participation in a meeting conducted pursuant to this Article 6 shall constitute
presence in person at such meeting, except where a person participates in the meeting for the
express purpose of objecting, at the beginning of the meeting, to the transaction of any business
on the ground that the meeting is not lawfully called or convened.
ARTICLE 7
OFFICERS
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Section 7.1. Executive Officers. The officers of the Corporation shall consist of a
Chief Executive Officer and a Secretary, each of whom shall be elected by the Board of Directors as
provided in Section 7.2. Such other officers, including assistant officers, and agents as may be
deemed necessary may be elected or appointed by the Board of Directors or chosen in such other
manner as may be permitted by these Bylaws. Two or more offices may be held by the same person.
Section 7.2. Election and Qualification. The Board of Directors, at its first meeting
after each annual meeting of stockholders, shall elect a Chief Executive Officer and a Secretary
and may elect one or more other officers, none of whom need be a member of the Board of Directors.
The Board of Directors may also appoint a Chairman of the Board from among its members. The Board
of Directors shall have the power to enter into contracts for the employment and compensation of
officers for such terms as the Board of Directors deems advisable.
Section 7.3. Other Officers and Agents. The Board of Directors may appoint such other
officers and assistant officers and agents as it shall deem necessary, who shall hold their offices
for such terms and shall have such authority and exercise such powers and perform such duties as
shall be determined from time to time by the Board of Directors by resolution not inconsistent with
these Bylaws.
Section 7.4. Salaries. The salaries of all officers and agents of the Corporation
shall be fixed by the Board of Directors.
Section 7.5. Term, Removal, and Vacancies. The officers of the Corporation shall hold
office until their successors are elected or appointed and qualify, or until their death or until
their resignation or removal from office. Any officer, agent, or member of a committee elected or
appointed by the Board of Directors may be removed at any time by the board, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed. Election or
appointment of an officer, agent, or member of a committee shall not of itself create contract
rights. Any vacancy occurring in any office of the Corporation by death, resignation, removal, or
otherwise shall be filled by the Board of Directors.
Section 7.6. Chairman of the Board. The Chairman of the Board, if one be elected,
shall preside at all meetings of the Board of Directors and shall have such other powers and duties
as may from time to time be prescribed by the Board of Directors, upon written directions given to
him pursuant to resolutions duly adopted by the Board of Directors.
Section 7.7. Chief Executive Officer. The Chief Executive Officer, if one be elected,
shall report to the Board of Directors and shall be responsible for the day-to-day management and
business operations of the Corporation and such other duties as the Board of Directors may from
time to time prescribe. In the absence of the Chairman of the Board, the Chief Executive Officer
shall preside at all meetings of the Board of Directors and stockholders.
Section 7.8. Vice Presidents. The Vice Presidents in the order of their seniority,
unless otherwise determined by the Board of Directors, shall, in the absence or disability of the
Chief Executive Officer, perform the duties and have the authority and exercise the powers of the
Chief
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Executive Officer. They shall perform such other duties and have such other authority and
powers as the Board of Directors may from time to time prescribe or as the Chief Executive Officer
may from time to time delegate.
Section 7.9. Secretary. The Secretary shall attend all meetings of stockholders and
record all of the proceedings of the meetings of the stockholders in a minute book to be kept for
that purpose and shall perform like duties for the Board of Directors and the standing committees
when required. He shall give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors or Chief Executive Officer, under whose supervision he shall
be. He shall keep in safe custody the seal of the Corporation and, when authorized by the Board of
Directors, shall affix the same to any instrument requiring it and, when so affixed, it shall be
attested by his signature or by the signature of an Assistant Secretary or of the Treasurer.
Section 7.10. Assistant Secretaries. The Assistant Secretaries shall, in the absence
or disability of the Secretary, perform the duties and exercise the powers of the Secretary. They
shall perform such other duties and have such other powers as the Board of Directors may from time
to time prescribe or as the Chief Executive Officer may from time to time delegate.
Section 7.11. Treasurer. The Treasurer shall have custody of the corporate funds and
securities and shall keep full and accurate accounts and records of receipts, disbursements, and
other transactions in books belonging to the Corporation, and shall deposit all moneys and other
valuable effects in the name and to the credit of the Corporation in such depositories as may be
designated by the Board of Directors. He shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render
to the Chief Executive Officer and the Board of Directors, at its regular meetings, or when the
Chief Executive Officer or Board of Directors so requires, an account of all his transactions as
Treasurer and of the financial condition of the Corporation.
Section 7.12. Assistant Treasurers. The Assistant Treasurers shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They
shall perform such other duties and have such other powers as the Board of Directors may from time
to time prescribe or the Chief Executive Officer may from time to time delegate.
Section 7.13. Officers Bond. If required by the Board of Directors, any officer so
required shall give the Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the duties of his office and
for the restoration to the Corporation, in case of his death, resignation, retirement, or removal
from office, of any and all books, papers, vouchers, money, and other property of whatever kind in
his possession or under his control belonging to the Corporation.
Section 7.14. Action with Respect to Securities of Other Corporations. Unless
otherwise directed by the Board of Directors, the Chief Executive Officer or any officer of the
Corporation authorized by the Chief Executive Officer shall have power to vote and otherwise act on
behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect
to any action of stockholders of any other Corporation in which this Corporation may
23
hold securities and otherwise to exercise any and all rights and powers which this Corporation
may possess by reason of its ownership of securities in such other Corporation.
ARTICLE 8
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 8.1. General.
(a) The Corporation shall indemnify its present or former directors, officers, employees
and agents or any person who served or is serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust
or other enterprise to the maximum extent permitted by the DGCL. Subject to the foregoing, 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 Proceeding (other than an action by or in the right of
the Corporation), 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, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him in connection with such Proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not act in good faith
and in a manner which he 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 reasonable cause to
believe that his conduct was unlawful.
(b) 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 Proceeding by or in the right of the
Corporation to procure a judgment in its favor 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, officer, employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise, against expenses (including attorneys fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or suit if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation and except that no indemnification shall be made in respect of any
claim, issue, or matter as to which such person shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Court or Chancery or the court in which such
action or suit was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such other court shall
deem proper.
(c) To the extent that a director or officer of the Corporation has been successful on the
merits or otherwise in defense of any action, suit, or proceeding referred to in subsections (a)
and (b), or in defense of any claim, issue, or matter therein, he shall be
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indemnified against expenses (including attorneys fees) actually and reasonably incurred
by him in connection therewith.
Section 8.2. Request for Indemnification. To obtain indemnification, Indemnitee shall
submit to the Secretary of the Corporation a written claim or request. Such written claim or
request shall contain sufficient information to reasonably inform the Corporation about the nature
and extent of the indemnification or advance sought by Indemnitee. The Secretary of the
Corporation shall promptly advise the Board of Directors of such request.
Section 8.3. Determination. The indemnification contained in Section 8.1 (unless
ordered by a Court) shall be made by the Corporation only as authorized by the specific case upon a
determination that indemnification of the director or officer is proper in the circumstances
because he has met the applicable standard of conduct set forth in Section 8.1. Such determination
shall be made:
(a) by a majority vote of a quorum consisting of directors who at the time of the vote are
not parties to the Proceeding;
(b) if such a quorum cannot be obtained, or, even if obtainable a quorum of disinterested
directors so directs, by Independent Counsel in a written opinion; or
(c) by the stockholders.
Section 8.4. Determination of Entitlement; No Change in Control. If there has been no
Change of Control at the time the request for indemnification is submitted, Indemnitees
entitlement to indemnification shall be determined in accordance with Section 145(d) of the DGCL.
If entitlement to indemnification is to be determined by Independent Counsel, the Corporation shall
furnish notice to Indemnitee within ten days after receipt of the request for indemnification
notice specifying the identity and address of Independent Counsel. The Indemnitee may, within
fourteen (14) days after receipt of such written notice, deliver to the Corporation a written
objection to such selection. Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of Independent Counsel and the
objection shall set forth with particularity the factual basis for such assertion. If there is an
objection to the selection of Independent Counsel, either the Corporation or Indemnitee may
petition the Court for a determination that the objection is without a reasonable basis or for the
appointment of Independent Counsel selected by the Court.
Section 8.5. Determination of Entitlement; Change of Control. If there has been a
Change of Control at the time the request for indemnification is submitted, Indemnitees
entitlement to indemnification shall be determined in a written opinion by Independent Counsel
selected by Indemnitee. Indemnitee shall give the Corporation written notice advising of the
identity and address of the Independent Counsel so selected. The Corporation may, within fourteen
(14) days after receipt of such written notice of selection, deliver to the Indemnitee a written
objection to such selection. Indemnitee may, within fourteen (14) days after the receipt of such
objection from the Corporation, submit the name of another Independent Counsel and the Corporation
may, within seven (7) days after receipt of such written notice, deliver to the Indemnitee a
written objection to such selection. Any objections referred to in this Section 8.5
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may be asserted only on the ground that the Independent Counsel so selected does not meet the
requirements of Independent Counsel and such objection shall set forth with particularity the
factual basis for such assertion. Indemnitee may petition the Court for a determination that the
Corporations objection to the first or second selection of Independent Counsel is without a
reasonable basis or for the appointment as Independent Counsel selected by the Court.
Section 8.6. Reimbursement in Advance. Expenses (including attorneys fees) incurred
by a director or officer in defending any Proceeding may be paid or reimbursed by the Corporation
in advance of the final disposition of such Proceeding upon receipt of a written undertaking by or
on behalf of the director or officer to repay the amount paid or reimbursed if it is ultimately
determined that he is not entitled to be indemnified by the Corporation as authorized in this
Article 8.
Section 8.7. Procedures for Independent Counsel.
(a) If a Change of Control shall have occurred before the request for indemnification is
sent by Indemnitee, Indemnitee shall be presumed (except as otherwise expressly provided in this
Article 8) to be entitled to indemnification upon submission of a request for indemnification in
accordance with Section 8.2 hereof, and thereafter the Corporation shall have the burden of
proof to overcome the presumption in reaching a determination contrary to the presumption. The
presumption shall be used by Independent Counsel as a basis for a determination of entitlement
to indemnification unless the Corporation provides information sufficient to overcome such
presumption by clear and convincing evidence or the investigation, review and analysis of
Independent Counsel convinces him by clear and convincing evidence that the presumption should
not apply.
(b) Except in the event that the determination of entitlement to indemnification is to be
made by Independent Counsel, if the person or persons empowered under Section 8.4 or 8.5 hereof
to determine entitlement to indemnification shall not have made and furnished to Indemnitee in
writing a determination within sixty (60) days after receipt by the Corporation of the request
therefor, the requisite determination of entitlement to indemnification shall be deemed to have
been made and Indemnitee shall be entitled to such indemnification unless Indemnitee knowingly
misrepresented a material fact in connection with the request for indemnification or such
indemnification is prohibited by applicable law. The termination of any Proceeding or of any
Matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere
or its equivalent, shall not (except as otherwise expressly provided in this Article 8) of
itself adversely affect the right of Indemnitee to indemnification or create a presumption that
Indemnitee did not act in good faith and in a manner that he reasonably believed to be in or not
opposed to the best interests of the Corporation, or with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful. 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 of the Corporation shall be deemed to
have acted in a manner not opposed to the best interests of the Corporation.
(c) For purposes of any determination hereunder, a person shall be deemed to have acted in
good faith and in a manner he reasonably believed to be in or not opposed to
26
the best interests of the Corporation, or, with respect to any criminal Proceeding, to have
had no reasonable cause to believe his conduct was unlawful, if his action is based on the
records or books of account of the Corporation or another enterprise or on information,
opinions, reports or statements presented to him or to the Corporation by any of the
Corporations officers, employees or directors, or by any other person as to matters the person
reasonably believes are in such other persons professional or expert competence and who has
been selected with reasonable care by or on behalf of the Corporation or another enterprise in
the course of their duties or on the advice of legal counsel for the Corporation or another
enterprise or on information or records given or reports made to the Corporation or another
enterprise by an independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Corporation or another enterprise. The term another
enterprise as used in this Section 8.7 shall mean any other corporation or any partnership,
limited liability company, association, joint venture, trust, employee benefit plan or other
enterprise for which such person is or was serving at the request of the Corporation as a
director, officer, employee or agent. The provisions of this paragraph shall not be deemed to
be exclusive or to limit in any way the circumstances in which an Indemnitee may be deemed to
have met the applicable standards of conduct for determining entitlement to rights under this
Article 8.
Section 8.8. Independent Counsel Expenses. The Corporation shall pay any and all
reasonable fees and expenses of Independent Counsel incurred acting pursuant to this Article 8 and
in any Proceeding to which it is a party or witness in respect of its investigation and written
report and shall pay all reasonable fees and expenses incident to the procedures in which such
Independent Counsel was selected or appointed. No Independent Counsel may serve if a timely
objection has been made to his selection until a court has determined that such objection is
without a reasonable basis.
Section 8.9. Adjudication.
(a) In the event that (i) a determination is made pursuant to Section 8.4 or 8.5 hereof
that Indemnitee is not entitled to indemnification under this Article 8; (ii) advancement of
Expenses is not timely made pursuant to Section 8.6 hereof; (iii) Independent Counsel has not
made and delivered a written opinion determining the request for indemnification (a) within
ninety (90) days after being appointed by the Court, (b) within ninety (90) days after
objections to his selection have been overruled by the Court or (c) within ninety (90) days
after the time for the Corporation or Indemnitee to object to his selection; or (iv) payment of
indemnification is not made within five days after a determination of entitlement to
indemnification has been made or is deemed to have been made pursuant to Section 8.3, 8.4 or 8.5
hereof, Indemnitee shall be entitled to an adjudication by the Court of his entitlement to such
indemnification or advancement of Expenses. In the event that a determination shall have been
made that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration
commenced pursuant to this Section 8.9 shall be conducted in all respects as a de novo trial on
the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. If a
Change of Control shall have occurred, in any judicial proceeding commenced pursuant to this
Section 8.9, the Corporation shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be. If a determination shall
27
have been made or is deemed to have been made that Indemnitee is entitled to
indemnification, the Corporation shall be bound by such determination in any judicial proceeding
commenced pursuant to this Section 8.9, or otherwise, unless Indemnitee knowingly misrepresented
a material fact in connection with the request for indemnification, or such indemnification is
prohibited by law.
(b) The Corporation shall be precluded from asserting in any judicial proceeding commenced
pursuant to this Section 8.9 that the procedures and presumptions of this Article 8 are not
valid, binding and enforceable. If Indemnitee, pursuant to this Section 8.9, seeks a judicial
adjudication to enforce his rights under, or to recover damages for breach of, this Article 8,
and if he prevails therein, then Indemnitee shall be entitled to recover from the Corporation,
and shall be indemnified by the Corporation against, any and all Expenses actually and
reasonably incurred by him in such judicial adjudication. If it shall be determined in such
judicial adjudication that Indemnitee is entitled to receive part but not all of the
indemnification or advancement of Expenses sought, then the Expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall be prorated.
(c) With respect to any Proceeding: (a) the Corporation will be entitled to participate
therein at its own expense; (b) except as otherwise provided below, to the extent that it may
wish, the Corporation (jointly with any other indemnifying party similarly notified) will be
entitled to assume the defense thereof, with counsel reasonably satisfactory to Indemnitee; and
(c) the Corporation shall not be liable to indemnify Indemnitee under this Article 8 for any
amounts paid in settlement of any action or claim effected without its written consent, which
consent shall not be unreasonably withheld. After receipt of notice from the Corporation to
Indemnitee of the Corporations election to assume the defense thereof, the Corporation will not
be liable to Indemnitee under this Article 8 for any legal or other expenses subsequently
incurred by Indemnitee in connection with the defense thereof other than as otherwise provided
below. Indemnitee shall have the right to employ his own counsel in such action, suit,
proceeding or investigation but the fees and expenses of such counsel incurred after notice from
the Corporation of its assumption of the defense thereof shall be at the expense of Indemnitee
unless the employment of counsel by Indemnitee has been authorized by the Corporation, or
Indemnitee shall have reasonably concluded that there is a conflict of interest between the
Corporation and Indemnitee in the conduct of the defense of such action, or the Corporation
shall not in fact have employed counsel to assume the defense of such action, in each of which
cases the fees and expenses of counsel employed by Indemnitee shall be subject to
indemnification pursuant to the terms of this Article 8. The Corporation shall not be entitled
to assume the defense of any Proceeding brought in the name of or on behalf of the Corporation
or as to which Indemnitee shall have reasonably concluded that there is a conflict of interest
between the Corporation and Indemnitee in the conduct of the defense of such action. The
Corporation shall not settle any action or claim in any manner which would impose any limitation
or un-indemnified penalty on Indemnitee without Indemnitees written consent, which consent
shall not be unreasonably withheld
Section 8.10. Not Exclusive. The indemnification and advancement of expenses provided
by, or granted pursuant to the other sections of this Article 8 shall not be deemed exclusive of
any other rights to which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, agreement, vote of stockholders or disinterested director, or
28
otherwise, both as to action in his official capacity and as to action in another capacity
while holding such office.
Section 8.11. Insurance; Subrogation.
(a) The Corporation may purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee, or agent of the Corporation or who 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 any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as such, whether or
not the Corporation would have the power to indemnify him against such liability under this
Article 8.
(b) The Corporation shall not be liable under this Article 8 to make any payment of amounts
otherwise indemnifiable hereunder if, but only to the extent that, Indemnitee has otherwise
actually received such payment under any insurance policy, contract, agreement or otherwise.
(c) In the event of any payment hereunder, the Corporation shall be subrogated to the
extent of such payment to all the rights of recovery of Indemnitee, who shall execute all papers
required and take all action reasonably requested by the Corporation to secure such rights,
including execution of such documents as are necessary to enable the Corporation to bring suit
to enforce such rights.
Section 8.12. Indemnification of Others. The Corporation may indemnify to the extent
of the provisions set forth herein, any person, other than an officer or director, who was or is a
party or is threatened to be made a party to any threatened, pending, or completed Proceeding, by
reason of the fact that he is or was an 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. Any such employee or agent
desiring indemnification shall make written application for such indemnification to the Board of
Directors of the Corporation. A special meeting of the directors shall be called within ten (10)
days after receipt of such application to determine if the person so applying shall be indemnified,
and if so, to what extent.
Section 8.13. Severability. If any provision or provisions of this Article 8 shall be
held to be invalid, illegal or unenforceable for any reason whatsoever, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby;
and, to the fullest extent possible, the provisions of this Article 8 shall be construed so as to
give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
Section 8.14. Definitions. For purposes of this Article 8, references to
(a) Change of Control shall mean a change in control of the Corporation after the date
Indemnitee acquired his Corporate Status, which shall be deemed to have occurred in any one of
the following circumstances occurring after such date: (i) there shall have occurred an event
that is or would be required to be reported with respect to the Corporation in response to Item
6(e) of Schedule 14A of Regulation 14A (or in response to
29
any similar item on any similar schedule or form) promulgated under the Exchange Act, if
the Corporation is or were subject to such reporting requirement; (ii) any person (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) shall have become the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the Corporation representing forty percent (40%) or more of the combined voting power of the
Corporations then outstanding voting securities without prior approval of at least two-thirds
of the members of the Board of Directors in office immediately prior to such persons attaining
such percentage interest; (iii) the Corporation is a party to a merger, consolidation, sale of
assets or other reorganization, or a proxy contest, as a consequence of which members of the
Board of Directors in office immediately prior to such transaction or event constitute less than
a majority of the Board of Directors thereafter; or (iv) during any period of two (2)
consecutive years, individuals who at the beginning of such period constituted the Board of
Directors (including, for this purpose, any new director whose election or nomination for
election by the Corporations stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such period) cease for any
reason to constitute at least a majority of the Board of Directors.
(b) Corporate Status describe the status of an individual as a present or former director
or officer of the Corporation, or as a director, officer or other designated legal
representative of any other corporation, partnership, limited liability company, association,
joint venture, trust, employee benefit plan or other enterprise for which an individual is or
was serving as a director, officer or other designated legal representative at the request of
the Corporation.
(c) 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, employees, and 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 Article 8 with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its separate
existence had continued.
(d) Court shall include the Court of Chancery of the State of Delaware or any other court
of competent jurisdiction.
(e) Expenses shall include all reasonable attorneys fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing
and binding costs, telephone charges, postage, delivery service fees, and all other
disbursements or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or being or preparing to be a
witness in a Proceeding.
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(f) Fines shall include any excise taxes assessed on a person with respect to an employee
benefit plan.
(g) Indemnitee includes any person who is, or is threatened to be made, a witness in or a
party to any Proceeding by reason of his Corporate Status.
(h) Independent Counsel means a law firm, or a member of a law firm, that is experienced
in matters of corporate law and neither presently is, nor in the five years previous to his
selection or appointment has been, retained to represent: (i) the Corporation or Indemnitee in
any matter material to either such party or (ii) any other party to the Proceeding giving rise
to a claim for indemnification hereunder.
(i) Matter is a claim, a material issue or a substantial request for relief.
(j) other enterprises shall include employee benefit plans.
(k) Proceeding includes any action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or any other proceeding, whether civil,
criminal, administrative or investigative, except one initiated by an Indemnitee pursuant to
Section 8.9 hereof to enforce his rights under this Article 8.
(l) 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 Article 8.
Section 8.15. Certain Action Where Indemnification Is Not Provided. Notwithstanding
any other provision of this Article 8, no person shall be entitled to indemnification or
advancement of Expenses under this Article 8 with respect to any Proceeding, or any Matter therein,
brought or made by such person against the Corporation.
Section 8.16. Notices. Promptly after receipt by Indemnitee of notice of the
commencement of any Proceeding, Indemnitee shall, if he anticipates or contemplates making a claim
for indemnification or advancement of Expenses pursuant to the terms of this Article 8, notify the
Corporation of the commencement of such Proceeding; provided, however, that any delay in so
notifying the Corporation shall not constitute a waiver or release by Indemnitee of rights
hereunder and that any omission by Indemnitee to so notify the Corporation shall not relieve the
Corporation from any liability that it may have to Indemnitee otherwise than under this Article 8.
Any communication required or permitted to the Corporation shall be addressed to the Secretary of
the Corporation and any such communication to Indemnitee shall be addressed to Indemnitees address
as shown on the Corporations records unless he specifies otherwise and shall be personally
delivered, delivered by U.S. Mail, or delivered by commercial express overnight delivery service.
Any such notice shall be effective upon receipt.
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Section 8.17. Contractual Rights. The right to be indemnified or to the advancement
or reimbursement of Expenses (i) is a contract right based upon good and valuable consideration,
pursuant to which Indemnitee may sue as if these provisions were set forth in a separate written
contract between Indemnitee and the Corporation, (ii) is and is intended to be retroactive and
shall be available as to events occurring prior to the adoption of these provisions and (iii) shall
continue after any rescission or restrictive modification of such provisions as to events occurring
prior thereto.
Section 8.18. Successors and Assigns. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article 8 shall be binding upon the Corporation, its
successors and assigns, and, unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a director, officer, employee, or agent and shall inure to the
benefit of the heirs, executors, and administrators of such a person.
ARTICLE 9
CAPITAL STOCK
Section 9.1. Issuance and Consideration. Subject to any applicable requirements of
law, the Certificate of Incorporation or these Bylaws, the Board of Directors may direct the
Corporation to issue the number of shares of each class or series of stock authorized by the
Certificate of Incorporation. The Board of Directors may authorize shares to be issued for any
valid consideration. Before the Corporation issues shares, the Board of Directors shall determine
that the consideration received or to be received for shares to be issued is adequate. That
determination by the Board of Directors is conclusive insofar as the adequacy of consideration for
the issuance of shares relates to whether the shares are validly issued, fully paid, and
nonassessable. Subject to any applicable requirements of law, the Certificate of Incorporation or
these Bylaws, the Board of Directors, or any committee authorized by the Board of Directors, shall
determine the terms upon which the rights, options, or warrants for the purchase of shares or other
securities of the Corporation are issued by the Corporation and the terms, including the
consideration, for which the shares or other securities are to be issued.
Section 9.2. Certificates Representing Shares. Shares of capital stock of the
Corporation may be certificated or uncertificated under the DGCL. If shares are certificated, the
Corporation shall deliver certificates representing all shares to which stockholders are entitled.
Such certificates shall be numbered and shall be entered in the stock ledger of the Corporation as
they are issued, and shall be signed by the Chief Executive Officer or a Vice President and the
Secretary or an Assistant Secretary of the Corporation, and may be sealed with the seal of the
Corporation or a facsimile thereof. The signatures of the Chief Executive Officer or a Vice
President and the Secretary or an Assistant Secretary of the Corporation, may be sealed with the
seal of the Corporation or a facsimile thereof. The signatures of the Chief Executive Officer or a
Vice President and the Secretary or an Assistant Secretary upon a certificate may be facsimiles.
In case any officer who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is issued, it may be
issued by the Corporation with the same effect as if he were such officer at the date of its
issuance. If the Corporation is authorized to issue shares of more than one class or more than one
series of
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any class, each certificate representing shares issued by such corporation (1) shall
conspicuously set forth on the face or back of the certificate a full or summary statement of all
of the designations, preferences, limitations, and relative rights of the shares of each class or
series thereof authorized to be issued, or (2) shall conspicuously state on the face or back of the
certificate that the Corporation will furnish the powers, designations, preferences, and relative,
participating, optional, or other special rights thereof and the qualifications, limitations, or
restrictions of such preferences and rights to the record holder of the certificate without charge
on written request to the Corporation at its principal place of business or registered office.
Within a reasonable time after the issuance of uncertificated stock, the Corporation will send to
the registered owner thereof a written notice containing the information required to be set forth
or stated on certificates under Sections 151, 156, 202(a) or 218(a) of the DGCL (or such successor
provisions) or a statement that the Corporation will furnish without charge, to each stockholder
who so requests, the powers, designations, preferences and relative participationing, 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. Each certificate representing shares shall
state upon the face thereof that the Corporation is organized under the laws of the State of
Delaware, the name of the person to whom issued, the number and class of shares and the designation
of the series, if any, which such certificate represents, and the par value of each share
represented by such certificate or a statement that the shares are without par value.
Notwithstanding the foregoing, each holder of uncertificated shares shall be entitled, upon
request, to a certificate representing such shares. Except as otherwise provided by law, the
rights and obligations of holders of uncertificated shares and the rights and obligations of the
holders of certificated shares of the same class and series shall be identical. The Board of
Directors shall have the power and authority to provide that, if the shares are certificated,
certificates representing shares of stock shall bear such legends, including, without limitation,
such legends as the Board of Directors deems appropriate to assure that the Corporation does not
become liable for violations of federal or state securities laws or other applicable law.
Section 9.3. Lost, Stolen, or Destroyed Certificates. The Board of Directors may
direct a new certificate or certificates to be issued or direct uncertificated shares to be
registered 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 the fact by the
person claiming the certificate or certificates to be lost, stolen, or destroyed. The Board of
Directors, in its discretion and as a condition precedent to the issuance or registration thereof,
may prescribe such terms and conditions as it deems expedient and may require such indemnities as
it deems adequate to protect the Corporation from any claim that may be made against it with
respect to any such certificate or certificates alleged to have been lost, stolen, or destroyed.
Section 9.4. Transfer of Shares. Transfers of shares of stock shall be made only upon
the transfer books of the Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. If such shares are certificated,
except where a certificate is issued in accordance with Section 9.3 of these Bylaws, an outstanding
certificate for the number of shares involved shall be surrendered for cancellation before a new
certificate is issued or uncertificated shares are registered therefor. Upon the receipt of proper
transfer instructions of uncertificated shares by the holder thereof in person or by his duly
authorized attorney, such uncertificated shares shall be cancelled, issuance of new
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equivalent certificated or registration of uncertificated shares shall be made to the
stockholder entitled thereto. The transaction shall be recorded upon the books of the Corporation.
Section 9.5. 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 to hold liable for calls and assessments a person registered on its
books as the owner of shares and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of Delaware.
Section 9.6. Dividends. Dividends upon the capital stock of the Corporation, subject
to the provisions of the Certificate of Incorporation, may be declared by the Board of Directors at
any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, in
shares of the capital stock of the Corporation or out of any other assets of the Corporation
legally available therefor, subject to the provisions of the Certificate of Incorporation and
applicable law. 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 its absolute discretion, deem 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 purposes as the Board of Directors shall think conducive to the interest of the Corporation,
and the Board of Directors may modify or abolish any such reserve in the manner in which it was
created.
ARTICLE 10
VOTING TRUSTS AND VOTING AGREEMENTS
Section 10.1. Voting Trusts. Any number of stockholders of the Corporation may enter
into a written voting trust agreement for the purpose of conferring upon a trustee or trustees the
right to vote or otherwise represent shares of the Corporation. The shares that are to be subject
to the agreement shall be transferred to the trustee or trustees for the purposes of the agreement,
and a counterpart of the agreement shall be deposited with the Corporation at its registered office
in the State of Delaware. The counterpart of the voting trust agreement so deposited with the
Corporation shall be subject to the same right of examination by a stockholder of the Corporation,
in person or by agent or attorney, as are the books and records of the Corporation, and shall be
subject to examination by any holder of a beneficial interest in the voting trust, either in person
or by agent or attorney, at any reasonable time for any proper purpose.
Section 10.2. Voting Agreements. Any number of stockholders of the Corporation, or
any number of stockholders of the Corporation and the Corporation itself, may enter into a written
voting agreement for the purpose of providing that shares of the Corporation shall be voted in the
manner prescribed in the agreement. A counterpart of the agreement shall be deposited with the
Corporation at its registered office in the State of Delaware and shall be subject to the same
right of examination by a stockholder of the Corporation, in person or by agent or attorney, as are
the books and records of the Corporation.
ARTICLE 11
GENERAL PROVISIONS
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Section 11.1. Distribution. The Board of Directors from time to time may authorize
and the Corporation may make distributions in cash, in property, or in its own shares as the Board
of Directors may determine, except when the authorization or payment thereof would be contrary to
any restrictions contained in the Certificate of Incorporation. Such distributions may be declared
at any regular or special meeting of the Board of Directors, and the authorization and payment
shall be subject to all applicable provisions of law, the Certificate of Incorporation, and these
Bylaws.
Section 11.2. Reserves. 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 directors from time to
time, in their absolute discretion, deem proper as a reserve fund for meeting contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such
other purpose as the director shall deem conducive to the interest of the Corporation, and the
directors may modify or abolish any such reserve in the manner in which it was created.
Section 11.3. Checks. All checks or demands for money and notes of the Corporation
shall be signed by such officer or officers or such other person or persons as the Board of
Directors may from time to time designate.
Section 11.4. Fiscal Year. The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.
Section 11.5. Seal. The corporate seal shall be in such form as may be prescribed by
the Board of Directors. The seal may be used by causing it or a facsimile thereof to be impressed
or affixed or in any manner reproduced upon instruments of any nature required to be executed by
its proper officers.
Section 11.6. Books and Records. The Corporation shall keep books and records of
account and shall keep minutes of the proceedings of its stockholders, its Board of Directors, and
each committee of its Board of Directors. The Corporation shall keep at its registered office or
principal place of business, or at the office of its transfer agent or registrar, a record of the
original issuance of shares issued by the Corporation and a record of each transfer of those shares
that have been presented to the Corporation for registration of transfer. Such records shall
contain the names and addresses of all past and current stockholders of the Corporation and the
number and class of shares issued by the Corporation held by each of them. Any books, records,
minutes, and stock ledgers may be in written form or in any other form capable of being converted
into written form within a reasonable time. Any stockholder, upon written demand under oath
stating the purpose thereof, shall have the right to examine, in person or by agent, accountant, or
attorney, at any reasonable time or times, for any proper purpose, the Corporations relevant books
and records of account, minutes, and stock ledgers, and to make extracts therefrom.
Section 11.7. Reliance upon Books, Reports and Records. Each director, each member of
any committee designated by the Board of Directors, and each officer of the Corporation shall, in
the performance of his or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinions, reports or
statements presented to the Corporation by any of its officers or employees, or committees of the
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Board of Directors so designated, or by any other person as to matters which such director or
committee member reasonably believes are within such other persons professional or expert
competence and who has been selected with reasonable care by or on behalf of the Corporation.
Section 11.8. Pronouns. All pronouns used in these Bylaws shall be deemed to refer to
the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may
require.
Section 11.9. Facsimile Signatures. In addition to the provisions for the use of
facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of the
Chairman of the Board, any other director, or any officer or officers of the Corporation may be
used whenever and as authorized by the Board of Directors.
Section 11.10. Resignations. Any director or officer may resign at any time. Such
resignation shall be made in writing and shall take effect at the time specified therein, or, if no
time be specified, at the time of its receipt by the Chief Executive Officer or the Secretary of
the Corporation. The acceptance of a resignation shall not be necessary to make it effective,
unless expressly so provided in the resignation.
ARTICLE 12
AMENDMENTS
The initial Bylaws of the Corporation shall be adopted by its Board of Directors. Unless the
Certificate of Incorporation or a bylaw adopted by the stockholders provides otherwise as to all or
some other portion or portions of the Corporations bylaws, these Bylaws may be altered, amended,
or repealed, and new bylaws may be adopted, by a majority of the Board of Directors or by
affirmative vote of a majority of the shares entitled to vote at any regular or special, meeting of
the stockholders at which a quorum is present and represented in person or by proxy subject to
repeal or change by action of the stockholders. The bylaws may contain any provisions for the
regulation and management of the affairs of the Corporation not inconsistent with law or the
Certificate of Incorporation.
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CERTIFICATE BY SECRETARY
The undersigned, being the secretary of the Corporation, hereby certifies that the foregoing Bylaws
were duly adopted by the Board of Directors of the Corporation effective on
[_______ __], 2011.
IN WITNESS WHEREOF, I have signed this certification as of the [__] day of [___________], 2011.
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APPENDIX F
Form for Demanding Payment by Dissenting Shareholder
The form must be received by the Company by 5:00 pm (Central Time) on the close of business on
April 19, 2011. The undersigned, a Dissenting Shareholder of the proposed Reincorporation by
virtue of Astrotech Corporation, a Washington corporation (the Company), merging into Astrotech
Corporation, a Delaware corporation and wholly-owned subsidiary of the Company (Merger Sub),
hereby demands payment for his/her shares of Common Stock of the Company and represents and
certifies as to the following:
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He/She acquired his/her shares of Common Stock of the Company
before February 22, 2011. |
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He/She has received and read the Companys Proxy Statement, dated February 28, 2011
(the Proxy Statement), pertaining to the Reincorporation. |
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He /She has received and read the section in the Proxy
Statement, including Appendix A thereto,
pertaining to his/her rights of appraisal. |
In Witness Hereof, the undersigned Dissenting Stockholder has executed this Form as of the
date written below his/her signature.
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DISSENTING SHAREHOLDER |
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Print Name: _______________________________ |
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Signature: ________________________________ |
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Date: ____________________________________ |
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Social Security Number/EIN: ___________________ |
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Number of Shares Held: _______________________ |
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If Shares are Held Jointly: |
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Print Name: _________________________________ |
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Signature: __________________________________ |
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Date: ______________________________________ |
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Social Security Number/EIN: ____________________ |
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Number of Shares Held: ________________________ |
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Number of Shares to Which Shareholder is asserting Dissenting
Rights: |
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Address to which Payment/Remaining Shares shall be
mailed: |
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Telephone: __________________________ |
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Email: ______________________________ |
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Do you wish to receive email notices from the Company? |
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o Yes o No |
ANNUAL MEETING OF ASTROTECH CORPORATION
Date: April 20, 2011
Time: 9:00 A.M. (Central Time)
Place: 401 Congress Ave, Suite 1650, Austin, TX 78701
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: THE NOTICE OF MEETING, PROXY STATEMENT AND PROXY
CARD ARE AVAILABLE AT WWW.PROXYDOCS.COM/ASTC
Please make your marks like this: Use dark black pencil or pen only
Board of Directors recommends a vote FOR proposals 1, 2, 3 and 4.
1: Election of Directors
01 Thomas B. Pickens III 04 Sha-Chelle Manning 02 Mark Adams 05 William F. Readdy 03 John A. Oliva
06 Daniel T. Russler, Jr.
Vote For Withhold Vote *Vote For All Nominees From All Nominees All Except
*INSTRUCTIONS: To withhold authority to vote for any nominee, mark the Exception box and write
the number(s) in the space provided to the right.
Directors Recommend
For Against Abstain
2: Ratify Ernst & Young, LLP as theFor independent auditor.
3:Adoption of the 2011 Stock Incentive Plan.For
4: Reincorporation from Washington state to For Delaware.
To consider and act upon any other matters which may properly come before the meeting or any adjournment thereof.
To attend the meeting and vote your shares in person, please mark this box.
Authorized Signatures This section must be completed for your Instructions to be executed.
Please Sign Here Please Date Above
Please Sign Here Please Date Above
Please sign exactly as your name(s) appears on your stock certificate. If held in joint tenancy,
all persons should sign. Trustees, administrators, etc., should include title and authority.
Corporations should provide full name of corporation and title of authorized officer signing the proxy.
Please separate carefully at the perforation and return just this portion in the envelope provided.
Annual Meeting of Astrotech Corporation to be held on Wednesday, April 20, 2011 for Holders as of
February 22, 2011
This proxy is being solicitied on behalf of the Board of Directors
VOTED BY:
INTERNET TELEPHONE
Go To 866-390-5376 www.proxypush.com/astc
Use any touch-tone telephone.
Cast your vote online. OR
Have your Proxy Card ready.
View Meeting Documents.
MAIL Follow the simple recorded instructions. OR Mark, sign and date your Proxy Card.
Detach your Proxy Card.
Return your Proxy Card in the postage-paid envelope provided.
The undersigned hereby appoints, Thomas B. Pickens lll as the true and lawful attorney of the
undersigned, with full power of substitution and revocation, and authorizes him, to vote all the
shares of capital stock of Astrotech Corporation which the undersigned is entitled to vote at said
meeting and any adjournment thereof upon the matters specified and upon such other matters as may
be properly brought before the meeting or any postponement or adjournment thereof, conferring
authority upon such true and lawful attorney to vote in his discretion on such other matters as may
properly come before the meeting and revoking any proxy heretofore given.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED, IF NO DIRECTION IS GIVEN, SHARES
WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS IN ITEM 1 AND FOR THE PROPOSALS IN ITEMS 2, 3, and 4.
All votes must be received by 5:00 P.M., Eastern Time, April 19, 2011.
PROXY TABULATOR FOR ASTROTECH CORPORATION P.O. BOX 8016 CARY, NC 27512-9903
EVENT #
CLIENT # |
Revocable Proxy Astrotech Corporation
Annual Meeting of Shareholders April 20, 2011, 9:00 A.M. (Central Time)
This Proxy is Solicited on Behalf of the Board of directors
The undersigned appoints Thomas B. Pickens III, with full power of substitution, to act as proxy
for the undersigned, and to vote all shares of common stock of Astrotech Corporation that the
undersigned is entitled to vote at the Annual Meeting of Shareholders on Wednesday, April 20, 2011
at 9:00 A.M. (Central) at the offices of Astrotech Corporation, 401 Congress Avenue, Suite 1650,
Austin, Texas 78701, and any and all postponements or adjournments thereof, as set forth below.
This proxy is revocable and will be voted as directed, at the discretion of the proxy holder, on
any other matters that may come before the Annual Meeting or any and all postponements or
adjournments thereof, but if no instructions are specified, this proxy will be voted:
FOR the nominees for directors specified;
FOR the ratification of Ernst & Young, LLP Plan; AND as independent auditor
FOR the approval of the 2011 Stock Incentive
FOR the reincorporation from washington state to delaware.
Please separate carefully at the perforation and return just this portion in the envelope provided.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE) |