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PROPOSAL 2: <br />PROPOSAL TO AMEND THE COMPANY'S <br />CERTIFICATION OF INCORPORATION <br />TO AUTHORIZE ADDITIONAL COMMON STOCK <br />On February 9, 1987, the Board of Directors of the Company adopted a resolution recommending that <br />the stockholders approve an amendment to the Company's Certificate of Incorporation to increase the number <br />of shares of Common Stock, par value ~.Ol per share, which the Company is authorized to issue from <br />15,000,000 shares to 20.000,000 shares. The form of amendment is attached hereto as Appendix B. The Board <br />of Directors views this amendment as necessary to provide financial flexibility to the Company through the <br />availability of additional shares of Common Stock for possible issuance in connection with future acquisitions <br />of properties or businesses, future financing needs, future employee and director stock incentives and general <br />corporate purposes. The Company has not entered into any agreement, arrangement, undertaking or <br />understanding, written or oral, for the issuance of any of the additional shares to be authorized. The <br />Company's current plans regarding the issuance of additional Common Stock have been described previously <br />in this Proxy Statement. (See Section 1 of Proposal I above.) Stockholders have no preemptive rights to <br />purchase any additional shares. <br />If approved by the stockholders, such additional authorized shares would be available for issuance at the <br />discretion of the Board of Directors (subject to applicable legal requirements) without the delay and expense <br />incident to the holding of a stockholders' meeting to consider any specific issuance. <br />The Company currently has 8,258,365 authorized but unissued shares of Common Stock and 10,000,000 <br />shares of authorized but unissued Preferred Stock. These unissued shares, together with the 5,000,000 <br />additional authorized shares of Common Stock that are the subject of this proposal, might be considered as <br />having the effect of discouraging an attempt by another person or entity to acquire control of the Company <br />through acquisition of shares, with a view to imposing a merger, sale of all or any part of the Company's assets <br />or a similar transaction that may not be in the best interest o(all of the stockholders because the issuance of <br />new shares could be used to dilute the stock ownership of a person or entity seeking to obtain control of the <br />Company. The authorization of additional shares of Common Stock, together with the authorized but <br />unissued Common Stock and Preferred Stock, could have the effect of extending the tenure of current <br />management because the Board of Directors could cause such shares to be issued w persons deemed favorable <br />to management. This proposal is not being made in response to any specific effort to accumulate the <br />Company's securities or to obtain control of the Company by means of a merger, tender offer, solicitation and <br />opposition to management or otherwise. As stated above, the purpose of the amendment is to provide financial <br />flexibility to the Company. Other than the provision for election of a portion of the Board of Directors in any <br />year (a "staggered board") and the possible anti-takeover effects of the Preferred Stock described above, <br />neither the Company's Certificate of Incorporation nor By-Laws contains provisions having a specific anti- <br />takeover effect. This proposal is not part o(a plan by management to adopt a series of such amendments. <br />Management has no plans at this time to adopt any such amendments to the Certificate of Incorporation or to <br />propose anti-takeover measures in future proxy solicitations. <br />It is not possible to state the actual effect of the proposed amendment upon the rights of existing <br />stockholders unless and until the Board of Directors determines to issue all or part of such shares. However, <br />such effects might include (a) dilution of the per share equity interest of stockholders, (b) dilution of the per <br />share voting power of stockholders or (c) a reduction in sharing in the assets of the Company in liquidation. <br />VOTE REQUIRED FOR APPROVAL AND RECOMMENDATION <br />The affirmative vote of a majority of the outstanding shares of Common Stock is required to adopt the <br />proposed amendment to the Certificate of Incorporation. The Board of Directors of the Company <br />unanimously recommends :t vote for the proposal to increase the authorized Common Stock. <br />22 <br />