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Sample Business ContractsHome: Sample Business Contracts:
RESTATED
CERTIFICATE OF INCORPORATION
OF
CMG INFORMATION SERVICES, INC.
CMG INFORMATION SERVICES, INC. (the "Corporation"), a corporation organized
and existing under and by virtue of the Delaware General Corporation Law, does
hereby certify that the Board of Directors of the Corporation, by a resolution
adopted at a meeting of the Board of Directors on November 8, 1993, and by a
written consent of the stockholders of the Corporation dated November 8,1993,
approved and adopted, pursuant to Section 242 of the Delaware General
Corporation Law, this Restated Certificate of Incorporation, which restates,
integrates and amends the Certificate of Incorporation of the Corporation in its
entirety pursuant to Section 245 of the Delaware General Corporation Law.
Written notice of the adoption of this Restated Certificate of Incorporation has
been given as provided by Section 228 of the General Corporation Law of the
State of Delaware to every stockholder entitled to such notice. The Certificate
of Incorporation of the Corporation was originally filed with the Secretary of
State of Delaware on May 5, 1986, under the name CMG Holdings, Inc. The full
text of the Restated Certificate of Incorporation is set forth below:
FIRST: The name of the Corporation is CMG Information Services, Inc.
SECOND: The registered office of the Corporation in the State of Delaware
is located at 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of its registered agent at such address is The Corporation
Trust Company.
THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
FOURTH: The aggregate number of shares of all classes of stock which the
Corporation is authorized to issue is fifteen million (15,000,000) shares of
which five million (5,000,000) shall be shares of Preferred Stock, par value
$.01 per share, (the "Preferred Stock") and ten million (10,000,000) shall be
shares of Common Stock, par value $.01 per share (the "Common Stock").
On the effective date of this Restated Certificate of Incorporation, each issued
share of the Corporation's Series A Convertible Preferred Stock, par value $1.00
per share, outstanding as of said effective date, shall without any action on
the part of the holders thereof, be reclassified and changed into one fully paid
and nonassessable share of the Corporation's Preferred Stock, par value $.01 per
share, subject to all powers, designations, preferences and relative,
participating, optional or other special rights of such Preferred Stock as set
forth in Section 3 hereof.
Any and all such shares issued for which the full consideration has been
paid or delivered, shall be deemed fully paid stock and the holder of such
shares shall not be liable for any further call or assessment or any other
payment thereon.
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No holder of any of the shares of any class of stock of the Corporation,
whether now or hereafter authorized or issued, shall be entitled as of right to
purchase or subscribe for (i) any unissued stock of any class whatsoever of
stock of the Corporation, or (ii) any new or additional share of any class
whatsoever of stock of the Corporation to be issued by reason of any increase of
the authorized stock of the Corporation, or of any class of such stock, or (iii)
bonds, certificates of indebtedness, debentures or other securities convertible
into stock of any class of the Corporation or carrying any right to purchase
stock of any class of the Corporation, but any such unissued stock, or
additionally authorized issue of any stock, or other securities convertible into
stock of the Corporation may be issued and disposed of pursuant to a resolution
or resolutions of the Board of Directors to such persons, firms, corporations,
associations or other entities and upon such terms as may be deemed advisable by
the Board of Directors in the exercise of its sole discretion.
SECTION 1. COMMON STOCK.
------------
The powers, preferences, rights, qualifications, limitations and
restrictions relating to the Common Stock are as follows:
(a) The Common Stock is junior to the Preferred Stock and is subject to all
the powers, rights, privileges, preferences and priorities of the Preferred
Stock designated herein or in any resolution or resolutions adopted by the Board
of Directors pursuant to authority expressly vested in it by the provisions of
Section 2 of this Article FOURTH.
(b) The Common Stock shall have voting rights for the election of directors
and for all other purposes (subject to the powers, rights, privileges,
preferences and priorities of the Preferred Stock as provided above), each
holder of Common Stock being entitled to one vote for each share thereof held by
such holder, except as otherwise required by law.
SECTION 2. PREFERRED STOCK.
---------------
The Board of Directors is expressly authorized to provide for the issuance
of all or any part of the shares of the Preferred Stock in one or more classes
or series, and to fix for each such class or series such voting powers, full or
limited or fractional or no voting powers, and such distinctive designations,
preferences and relative, participating, optional or other special rights, and
such qualifications, limitations or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions adopted by the Board of Directors in
its sole discretion providing for the issuance of such class or series and as
may be permitted by the Delaware General Corporation Law including, without
limitation, the authority to determine with respect to the shares of any such
class or series (i) whether such shares shall be redeemable, and, if so, the
terms and conditions of such redemption, whether for cash, property or rights,
including securities of any other corporation, and whether at the option of
either the Corporation or the holder or both, including the date or dates or the
event or events upon or after which they shall be redeemable, and the amount per
share payable in case of redemption, which amount may vary under different
conditions and at different redemption dates; (ii) whether such shares shall be
entitled to receive dividends (which may be cumulative or noncumulative) at such
rates, on such conditions, and at such times, and payable in preference to, or
in such relation to, the dividends payable on any other class or classes or an
other series; (iii) the rights of such shares in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, and the
relative rights of priority, if any, of payment of such shares, (iv) whether
such shares shall be convertible into, or
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exchangeable for, shares of any other class or classes of stock, or of any other
series of the same or any other class or classes of stock whether at the option
of either the Corporation or the holder or both, 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; (v)
whether the class or series shall have a sinking fund for the redemption or
purchase of such shares, and, if so, the terms and amount of such sinking fund,
or (vi) provisions as to any other voting, optional, and/or special or relative
rights, preferences, limitations, or restrictions; and (vii) the number of
shares and designation of such class or series.
SECTION 3. SERIES A CONVERTIBLE PREFERRED STOCK.
------------------------------------
CMG INFORMATION SERVICES, INC., a Delaware corporation (the "Corporation"
or the "Company"), pursuant to authority conferred on the Board of Directors of
the Corporation by the Certificate of Incorporation and in accordance with the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, certifies that the Board of Directors of the Corporation, by unanimous
consent dated May 5, 1986, has duly adopted the following resolution providing
for the establishment and issuance of a series of Preferred Stock to be
designated "Series A Convertible Preferred Stock" and to consist of 250 shares
as follows:
RESOLVED: that, pursuant to the authority expressly granted and vested in the
- -------- Board of Directors of this Corporation in accordance with the
provisions of its Certificate of Incorporation, a series of Preferred
Stock of the Corporation hereby is established, consisting of 250
shares, to be designated "Series A Convertible Preferred Stock"
(hereinafter "Series A Preferred Stock"); the Board of Directors be
and hereby is authorized to issue such shares of Series A Preferred
Stock from time to time and for such consideration and on such terms
as the Board of Directors shall determine, and subject to the
limitations provided by law and by the Certificate of Incorporation,
the powers, designations, preferences and relative, participating,
optional or other special rights of, and the qualifications,
limitations or restrictions upon, the Series A Preferred Stock shall
be as follows:
1. DESIGNATION. This series of Preferred Stock, $.01 par value per share,
-----------
shall be designated the "Series A Convertible Preferred Stock" (hereinafter
"Series A Preferred Stock").
2. DIVIDENDS. When, as and if declared by the Board of Directors, the
---------
holders of the outstanding shares of Series A Preferred Stock shall be entitled
to receive out of funds legally available therefor dividends payable at the
discretion of the Board of Directors. Notwithstanding the foregoing, dividends
shall be declared and set aside for any shares of the Series A Preferred Stock
in the event that the Board of Directors of the Company shall declare a dividend
payable upon the then outstanding shares of the Common Stock, $.01 par value
(the "Common Stock"), of the Company in which event the holders of the Series A
Preferred Stock shall be entitled to the amount of dividends per share of Series
A Preferred Stock as would be declared payable on the largest number of whole
shares of Common Stock into which each share of Series A Preferred Stock held by
each holder thereof could be converted pursuant to the provisions of Section 5
hereof, such number determined as of the record date for the determination of
holders of Common Stock entitled to received such dividend.
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3. LIQUIDATION, DISSOLUTION OR WINDING UP.
--------------------------------------
(a) In the event of any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, holders of each share of Series A
Preferred Stock shall be entitled to be paid first out of the assets of the
Company available for distribution to holders of the Company's capital stock of
all classes, whether such assets are capital, surplus, or earnings, before any
sums shall be paid or any assets distributed among the holders of shares of
Common Stock, an amount equal to the greater of (i) $1,000 per share of Series A
Preferred Stock plus all accrued and unpaid dividends thereon, whether or not
earned or declared, up to and including the date full payment, shall be tendered
to the holders of the Series A Preferred Stock with respect to such liquidation,
dissolution or winding up, or (ii) such amount per share of Series A Preferred
Stock as would have been payable had each such share plus all accrued and unpaid
dividends thereon, whether or not earned or declared, up to and including the
date of full payment, been converted to Common Stock immediately prior to such
event of liquidation, dissolution or winding up pursuant to the provisions of
Section 5 hereof; before any sums shall be paid or any assets distributed among
the holders of the shares of Common Stock. If the assets of the Company shall
be insufficient to permit the payment in full to the holders of the Series A
Preferred Stock of the amount thus distributable, then the entire assets of the
Company available for such distribution shall be distributed ratably among the
holders of the Series A Preferred Stock. After such payment shall have been
made in full to the holders of the Series A Preferred Stock or funds necessary
for such payment shall have been set aside by the Company in trust for the
account of holders of the Series A Preferred Stock so as to be available for
such payment, holders of the Series A Preferred Stock shall be entitled to no
further participation in the distribution of the assets of the Company and shall
have no further rights of conversion, and the remaining assets available for
distribution shall be distributed ratably among the holders of the Common Stock.
(b) A consolidation or merger of the Company or a sale of all or
substantially all of the assets of the Company shall be regarded as a
liquidation, dissolution or winding up of the affairs of the Company within the
meaning of this Section 3; provided however, that each holder of Series A
-------- -------
Preferred Stock shall have the right to elect the benefits of the provisions of
Section 5(h) hereof in lieu of receiving payment in liquidation, dissolution or
winding up of the Company pursuant to this Section 3. Each holder of Series A
Preferred Stock shall notify the Company in advance of its election to obtain
the benefits of this Section 3(b) or of Section 5(h), which notification shall
be given not later than a date specified in writing to each holder by the
Company to be three (3) days or fewer prior to the effective date of such
consolidation, merger or sale. If a holder fails to make any election, he shall
be deemed to have elected the benefits of this Section 3(b).
(c) Whenever the distribution provided for herein shall be paid in
property other than cash, the value of such distribution shall be the fair
market value of such property as determined in good faith by the Board of
Directors of the Company.
4. VOTING POWER. Except as otherwise expressly provided in Section 8
------------
hereof, or as required by law, each holder of Series A Preferred Stock shall be
entitled to vote on all matters and shall be entitled to that number of votes
equal to the largest number of whole shares of Common Stock into which such
holder's shares of Series A Preferred Stock could be converted, pursuant to the
provisions of Section 5 hereof (taking into account all accrued and unpaid
dividends, if any, and interest with respect to such Series A Preferred Stock),
at the record date
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for the determination of shareholders entitled to vote on such matter or, if no
such record date is established, at the date such vote is taken or any written
consent of shareholders is solicited. Except as otherwise expressly provided
herein or as required by law, the holders of shares of Series A Preferred Stock
and Common Stock shall be entitled to vote together as a class on all matters.
5. CONVERSION RIGHTS. The holders of the Series A Preferred Stock shall
-----------------
have the following conversion rights:
(a) GENERAL.
-------
(i) Subject to and in compliance with the provisions of this
Section 5, any shares of the Series A Preferred Stock and, at the option of the
holder, all accrued and unpaid dividends thereon, whether or not earned or
declared, up to and including the date of conversion, may, at the option of the
holder, be converted at any time or from time to time into fully-paid and
nonassessable shares (calculated as to each conversion to the largest whole
share) of Common Stock. The number of shares of Common Stock to which a holder
of Series A Preferred Stock shall be entitled upon conversion shall be the
product obtained by multiplying the Applicable Conversion Rate (determined as
provided in Section 5(c)) by the number of shares of Series A Preferred Stock
being converted.
(ii) Notwithstanding the foregoing, the holders of Series A
Preferred Stock shall have the right to convert all or any portion of any
accrued but unpaid dividends hereunder into shares of Common Stock at any time
upon written notice to the Company. The number of shares of Common Stock
issuable upon any such conversion shall be the number of shares equal to the
amount of the accrued but unpaid dividends and interest being so converted
divided by the Applicable Conversion Value then in effect, determined in
accordance with Section 5 hereof. Upon receipt of any such notice, the Company
shall promptly issue a certificate in the name of the holder of Series A
Preferred Stock for the number of shares of Common Stock so issuable, together
with a check representing cash in lieu of any fractional share.
(b) CONVERSION FOLLOWING UNDERWRITTEN PUBLIC OFFERING.
-------------------------------------------------
(i) All outstanding shares of Series A Preferred Stock and, at
the option of the holder, all accrued and unpaid dividends thereon, whether or
nor earned or declared, up to and including the date of conversion, shall, at
the option of the Company and upon the closing of an underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offering and sale of Common Stock for the
account of the Company in which the Common Stock is sold at a price to the
public of not less than $3.85 per share as of the date of this Restated
Certificate of Incorporation (such amount to be equitably adjusted whenever
there shall occur a stock split, combination, reclassification or other similar
event affecting the Common Stock) and in which the aggregate gross proceeds to
the Company exceed $7,000,000, be converted automatically into the number of
shares of Common Stock to which a holder of Series A Preferred Stock shall be
entitled upon conversion pursuant to Section 5(a) hereof without any further
action by such holders and whether or not the certificates representing such
shares are surrendered to the Company or its transfer agent for the Common
Stock.
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<PAGE>
(ii) Upon the occurrence of the conversion specified in Section
5(b)(i), the holders of such Series A Preferred Stock shall surrender the
certificates representing such shares at the office of the Company or of its
transfer agent for the Common Stock. Thereupon, there shall be issued and
delivered to such holder a certificate or certificates for the number of shares
of Common Stock into which the shares of the Series A Preferred Stock
surrendered were convertible on the date on which such conversion occurred. The
Company shall not be obligated to issue certificates evidencing the shares of
Common Stock issuable upon such conversion unless certificates evidencing such
shares of the Series A Preferred Stock being converted are either delivered to
the Company or any such transfer agent or the holder notifies the Company or any
such transfer agent that such certificates have been lost, stolen or destroyed
and executes an agreement satisfactory to the Company to indemnify the Company
from any loss incurred by it in connection therewith. In addition, the Company
may, if the Board of Directors deems it reasonably necessary, require the holder
to post a bond in connection with such indemnity agreement.
(c) APPLICABLE CONVERSION RATE. The conversion rate in effect at any
--------------------------
time (the "Applicable Conversion Rate") shall be the quotient obtained by
dividing the sum of (i) $1,000 and (ii) at the election of the holder, an amount
equal to the amount of accrued and unpaid dividends per share of Series A
Preferred Stock, whether or not earned or declared, as well as all accrued and
unpaid interest thereon, by the Applicable Conversion Value, calculated as
provided in Section 5(d).
(d) APPLICABLE CONVERSION VALUE. The Applicable Conversion Value in
---------------------------
effect from time to time, except as adjusted in accordance with Section 5(e)
hereof, shall be $0.389423 as of the date of this Restated Certificate of
Incorporation.
(e) ADJUSTMENTS TO APPLICABLE CONVERSION VALUE.
------------------------------------------
(i) UPON SALES OF COMMON STOCK. If the Company shall while
--------------------------
there are any shares of Series A Preferred Stock outstanding, issue or sell
shares of its Common Stock without consideration or at a price per share less
than the Applicable Conversion Value in effect immediately prior to such
issuance or sale, then in each such case such Applicable Conversion Value upon
each such issuance or sale, except as hereinafter provided, shall be adjusted to
an amount determined by multiplying the Applicable Conversion Value by a
fraction:
(A) the numerator of which shall be (a) the number of shares
of Common Stock outstanding immediately prior to the issuance of
such additional shares of Common Stock, plus (b) the number of
shares of Common Stock which the net aggregate consideration
received by the Corporation for the total number of such
additional shares of Common Stock so issued would purchase at the
Applicable Conversion Value, and
(B) the denominator of which shall be (a) the number of
shares of Common Stock outstanding immediately prior to the
issuance of such additional shares of Common Stock, plus (b) the
number of such additional shares of Common Stock so issued.
The Corporation's issuance of up to an aggregate of 569,933 shares of Common
Stock (as adjusted as of the date of this Restated Certificate of
Incorporation), or options exercisable therefor, pursuant to any stock purchase
or stock option plan or other employee incentive
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<PAGE>
program approved by the Board of Directors to the corporation's employees,
directors, officers or consultants shall not be deemed an issuance of additional
shares of Common Stock and shall have no effect on the calculations contemplated
by this Section 5(e).
For the purposes of this Section 5(e), the issuance of any warrants, options,
subscriptions or purchase rights with respect to shares of Common Stock and the
issuance of any securities convertible into or exchangeable for shares of Common
Stock (or the issuance of any warrants, options or any rights with respect to
such convertible or exchangeable securities) shall be deemed an issuance at such
time of such Common Stock if the Net Consideration Per Share (as hereinafter
determined) which may be received by the Company for such Common Stock shall be
less than the Applicable Conversion Value at the time of such issuance. Any
obligation, agreement or understanding to issue warrants, options, subscriptions
or purchase rights at any time in the future shall be deemed to be an issuance
at any time such obligation, agreement or undertaking is made or arises. No
adjustment of the Applicable Conversion Value shall be made under this Section
5(e) upon the issuance of any shares of Common Stock which are issued pursuant
to the exercise of any warrants, options, subscriptions or purchase rights or
pursuant to the exercise of any conversion or exchange rights in any convertible
securities if any adjustment shall previously have been made upon the issuance
of any such warrants, options or subscriptions or purchase rights or upon the
issuance of any convertible securities (or upon the issuance of any warrants,
options or any rights therefor) as above provided. Any adjustment of the
Applicable Conversion Value with respect to this paragraph which relates to
warrants, options, subscriptions or purchase rights with respect to shares of
Common Stock shall be disregarded if, as, and when all of such warrants,
options, subscriptions or purchase rights expire or are canceled without being
exercised, so that the Applicable Conversion Value effective immediately upon
such cancellation or expiration shall be equal to the Applicable Conversion
Value in effect at the time of the issuance of the expired or canceled warrants,
options, subscriptions or purchase rights, with such additional adjustments as
would have been made to that Applicable Conversion Value had the expired or
canceled warrants, options, subscriptions or purchase rights not been issued.
For purposes of this paragraph, the "Net Consideration Per Share" which may be
received by the Company shall be determined as follows:
(A) The "Net Consideration Per Share" shall mean the amount
equal to the total amount of consideration, if any, received by
the Company for the issuance of such warrants, options,
subscriptions or other purchase rights or convertible or
exchangeable securities, plus the minimum amount of
consideration, if any, payable to the Company upon exercise or
conversion thereof, divided by the aggregate number of shares of
Common Stock that would be issued if all such warrants, options,
subscriptions or other purchase rights or convertible or
exchangeable securities were exercised, exchanged or converted.
(B) The "Net Consideration Per Share" which may be received
by the Company shall be determined in each instance as of the
date of issuance of warrants, options, subscriptions or other
purchase rights or convertible or exchangeable securities without
giving effect to any possible future price adjustments or rate
adjustments which may be applicable with respect to such
warrants, options, subscriptions or other purchase rights or
convertible or exchangeable securities.
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For purposes of this Section 5(e), if a part or all of the consideration
received by the Company in connection with the issuance of shares of the Common
Stock or the issuance of any of the securities described in this Section 5(e)
consists of property other than cash, the Company at its expense will promptly
cause independent public accountants of recognized standing selected by the
Company to value such property, whereupon such value shall be given to such
consideration and shall be recorded on the books of the Company with respect to
receipt of such property.
This Section 5(e) shall not apply under any of the circumstances which
would constitute an Extraordinary Common Stock Event (as hereinafter defined in
Section 5(e)(ii)).
(ii) Upon the happening of an Extraordinary Common Stock Event (as
hereinafter defined), the Applicable Conversion Value (and all other conversion
values set forth in paragraph (e)(i) above) shall, simultaneously with the
happening of such Extraordinary Common Stock Event, be adjusted by multiplying
the then effective Applicable Conversion Value by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such Extraordinary Common Stock Event and the denominator of which
shall be the number of shares of Common Stock outstanding immediately after such
Extraordinary Common Stock event, and the product so obtained shall thereafter
be the Applicable Conversion Value. The Applicable Conversion Value, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive Extraordinary Common Stock Event or Events.
"Extraordinary Common Stock Event" shall mean (i) the issue of additional
shares of the Common Stock as a dividend or other distribution on outstanding
Common Stock, (ii) subdivision of outstanding shares of Common Stock into a
greater number of shares of the Common Stock, or (iii) combination of
outstanding shares of the Common Stock into a smaller number of shares of the
Common Stock.
(f) DIVIDENDS. In the event the Company shall make or issue, or fix a
---------
record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in securities of the Company
other than shares of Common Stock or in assets (excluding cash dividends or
distributions), then and in each such event provisions shall be made so that the
holders of Series A Preferred Stock shall receive upon conversion thereof in
addition to the number of shares of Common Stock receivable thereupon, the
number of securities or such other assets of the Company which they would have
received had their Series A Preferred Stock been converted into Common Stock on
the date of such event and had they thereafter, during the period from the daze
of such event to and including the Conversion Date (as that term is hereafter
defined in Section 5(j)), retained such securities or such other assets
receivable by them us aforesaid during such period, giving application to all
adjustments called for during such period under this Section 5 with respect to
the rights of the holders of the Series A Preferred Stock.
(g) RECAPITALIZATION OR RECLASSIFICATION. If the Common Stock
------------------------------------
issuable upon the conversion of the Series A Preferred Stock shall be changed
into the same or different number of shares of any class or classes of stock of
the Corporation, whether by recapitalization, reclassification or otherwise
(other than a subdivision or combination of shares or stock dividend provided
for elsewhere in this Section 5, or a reorganization, merger, consolidation or
sale of assets provided for elsewhere in this Section 5), then and in each such
event the holder of each
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share of Series A Preferred Stock shall have the right thereafter to convert
such share into the kind and amount of shares of stock and other securities and
property receivable upon such reorganization, reclassification or other change
by holders of the number of shares of Common Stock into which such share of
Series A Preferred Stock might have been converted (taking into account all
accrued and unpaid dividends and interest with respect to such Series A
Preferred Stock) immediately prior to such reorganization, reclassification or
change, all subject to further adjustment as provided herein.
(h) CAPITAL REORGANIZATION, MERGER OR SALE OF ASSETS. If at any time
------------------------------------------------
or from time to time there shall be a capital reorganization of the Common Stock
(other than a subdivision, combination, reclassification or exchange of shares
provided for elsewhere in this Section 5) or a merger or consolidation of the
Company with or into another corporation, or the sale of all or substantially
all of the Company's properties and assets to any other person, then, as a part
of such reorganization, merger, consolidation or sale, provision shall be made
so that the holders of the Series A Preferred Stock shall thereafter be entitled
to receive upon conversion of the Series A Preferred Stock, the number of shares
of stock or other securities or property of the Company, or of the successor
corporation resulting from such merger, consolidation or sale, to which a holder
of Common Stock issuable upon conversion would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 5 with respect to the rights of the holders of the Series A
Preferred Stock after the reorganization, merger, consolidation or sale to the
end that the provisions of this Section 5 (including adjustment of the
Applicable Conversion Value then in effect and the number of shares purchasable
upon conversion of the Series A Preferred Stock) shall be applicable after that
event in as nearly equivalent a manner as may be practicable.
Each holder of Series A Preferred Stock upon the occurrence of a capital
reorganization, merger or consolidation of the Company, or the sale of all or
substantially all its assets and properties as such events are more fully set
forth in the first paragraph of this Section 5(h), shall have the option of
electing treatment of his shares of Series A Preferred Stock under either this
Section 5(h) or Section 3(b) hereof, notice of which election shall be submitted
in writing to the Company at its principal offices no later than five (5) days
before the effective date of such event.
(i) ACCOUNTANT'S CERTIFICATE AS TO ADJUSTMENTS. In each case of an
------------------------------------------
adjustment or readjustment of the Applicable Conversion Rate, the Company will
furnish each holder of Series A Preferred Stock with a certificate, prepared by
its chief financial officer showing such adjustment or readjustment, and stating
in detail the acts upon which such adjustment or readjustment is based. Upon
the request of any holder, the Company will cause its independent public
accountants to confirm the accuracy of such adjustment or readjustment.
(j) EXERCISE OF CONVERSION PRIVILEGE. To exercise his conversion
--------------------------------
privilege, a holder of Series A Preferred Stock shall surrender the certificate
or certificates representing the shares being converted to the Company at its
principal office, and shall give written notice to the Company at that office
that such holder elects to convert such shares. Such notice shall also state
the name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock issuable upon such conversion shall be
issued. The certificate or certificates for shares of Series A Preferred Stock
surrendered for conversion shall be accompanied by proper assignment thereof to
the Company or in blank. The date when such written notice is
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received by the Company, together with the certificate or certificates
representing the shares of Series A Preferred Stock being converted, shall be
the "Conversion Date". As promptly as practicable after the Conversion Date, the
Company shall issue and shall deliver to the holder of the shares of Series A
Preferred Stock being converted, or on its written order, such certificate or
certificates as it may request for the number of whole shares of Common Stock
issuable upon the conversion of such shares of Series A Preferred Stock in
accordance with the provisions of this Section 5, cash in the amount of all
accrued and unpaid dividends on such shares of Series A Preferred Stock, whether
or not earned or declared, up to and including the Conversion Date, and cash, as
provided in Section 5(k), in respect of any fraction of a share of Common Stock
issuable upon such conversion. Such conversion shall be deemed to have been
effected immediately prior to the close of business on the Conversion Dare, and
at such time the rights of the holder as holder of the converted shares of
Series A Preferred Stock shall cease and the person or persons in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby.
(k) CASH IN LIEU OF FRACTIONAL SHARES. No fractional shares of Common
---------------------------------
Stock or scrip representing fractional shares shall be issued upon the
conversion of shares of Series A Preferred Stock. Instead of any fractional
shares of Common Stock which would otherwise be issuable upon conversion of
Series A Preferred Stock, the Company shall pay to the holder of the shares of
Series A Preferred Stock which were converted a cash adjustment in respect of
such fractional shares in an amount equal to the same fraction of the market
price per share of the Common Stock (as determined in a reasonable manner
prescribed by the Board of Directors) at the close of business on the Conversion
Date. The determination as to whether or not any fractional shares are issuable
shall be based upon the total number of shares of Series A Preferred Stock being
converted at any one time by any holder thereof; not upon each share of Series A
Preferred Stock being converted.
(l) PARTIAL CONVERSION. In the event some but not all of the shares
------------------
of Series A Preferred Stock represented by a certificate or certificates
surrendered by a holder are converted, the Company shall execute and deliver to
or on the order of the holder, at the expense of the Company, a new certificate
representing the number of shares of Series A Preferred Stock which were not
converted.
(m) RESERVATION OF COMMON STOCK. The Company shall at all times
---------------------------
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of the shares of the
Series A Preferred Stock, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all outstanding
shares of the Series A Preferred Stock, and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of the Series A Preferred Stock,
the Company shall take such corporate action as may be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purpose.
6. MANDATORY REDEMPTION.
--------------------
(a) Beginning on April 30, 1992 and on the 30th day of April in each
year thereafter (the "Redemption Date"), the Company shall redeem twenty-five
percent (25%) of all of the shares of Series A Preferred Stock outstanding on
May 7,1986 (or such later date as shall
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be the date of original issuance of the Series A Preferred Stock); provided,
however, that the Company's redemption obligation shall be reduced by the number
of shares of Series A Preferred Stock that have been converted prior to any such
Redemption Date, and such reduction shall apply first to the Redemption Date
immediately following such conversion and thereafter any balance shall apply to
any Subsequent Redemption Dates. The redemption price for each share of Series A
Preferred Stock redeemed pursuant to this Section 6 shall be $1,000 per share of
Series A Preferred Stock plus all accrued and unpaid dividends on such share,
whether or not earned or declared as well as all accrued and unpaid interest
thereon, up to and including the date fixed for redemption (the "Redemption
Price"). Each redemption of Series A Preferred Stock shall be made so that the
number of shares of Series A Preferred Stock held by each registered owner shall
be reduced in an amount which shall bear the same ratio to the total number of
shares of Series A Preferred Stock then held by such registered owner bears to
the aggregate number of shares of Series A Preferred Stock then outstanding.
(b) The Redemption Price set forth in this Section 6 shall be subject
to equitable adjustment whenever there shall occur a stock split, combination,
reclassification or other similar event involving the Series A Preferred Stock.
(c) At least 45 days before any Redemption Date pursuant to Section
6(a), written notice (hereinafter referred to as the "Redemption Notice") shall
be mailed, postage prepaid, to each holder of record of the Series A Preferred
Stock which is to be redeemed, at its address shown on the records of the
Company, provided, however, that the giving of such Redemption Notice shall not
affect the conversion rights of such holder pursuant to Section 5 hereof;
provided, further, that the Company's failure to give such Redemption Notice
shall in no way affect its obligation to redeem the shares of Series A Preferred
Stock as provided in Sections 6(a) or 6(b) hereof. The Redemption Notice shall
contain the following information:
(i) The number of shares of Series A Preferred Stock held by the
holder which shall be redeemed by the Company and the total number of shares of
Series A Preferred Stock held by all holders to be so redeemed,
(ii) The Redemption Date and the applicable Redemption Price, and
(iii) That the holder is to surrender to the Company, at the
place designated therein, its certificate or certificates representing the
shares of Series A Preferred Stock to be redeemed.
(d) Each holder of shares of Series A Preferred Stock to be redeemed
shall surrender the certificate or certificates representing such shares to the
Company at the place designated in the Redemption Notice, and thereupon the
applicable Redemption Price for such shares as set forth in this Section 6 shall
be paid to the order of the person whose name appears on such certificate or
certificates and each surrendered certificate shall be canceled and retired.
(e) If any shares of Series A Preferred Stock are not redeemed solely
because a holder fails to surrender the certificate or certificates representing
such shares pursuant to Section 6(e) hereof then, from and after the Redemption
Date, such shares of Series A Preferred Stock thereupon subject to redemption
shall not be entitled to any further accrual of any dividends pursuant to
Section 2 hereof or to the conversion provisions set forth in Section 5 hereof.
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7. NO REISSUANCE OF SERIES A PREFERRED STOCK. No share or shares of
-----------------------------------------
Series A Preferred Stock acquired by the Company by reason of redemption,
purchase, conversion or otherwise shall be reissued, and all such shares shall
be canceled, retired and eliminated from the shares which the Company shall be
authorized to issue. The Company may from time to time take such appropriate
corporate action as may be necessary to reduce the authorized number of shares
of the Series A Preferred Stock accordingly.
8. RESTRICTIONS AND LIMITATIONS.
----------------------------
(a) Except as expressly provided herein or as required by law, so long
as any shares of the Series A Preferred Stock remain outstanding, the Company
shall not, and shall not permit any subsidiary (which shall mean any corporation
or trust of which the Company directly or indirectly owns at the time all of the
outstanding shares of every class of such corporation or trust other than
directors' qualifying shares) to, without the vote or written consent by the
holders of at least a majority of the then outstanding shares of the Series A
Preferred Stock, each share of Series A Preferred Stock to be entitled to one
vote in each instance:
(i) Redeem, purchase or otherwise acquire for value (or pay in)
to or set aside for a sinking fund for such purpose), any share or shares of
Series A Preferred Stock;
(ii) Authorize or issue, or obligate itself to authorize or
issue, any other equity security senior to or on a parity with the Series A
Preferred Stock as to liquidation preferences, conversion rights, voting rights
or otherwise; or
(iii) Effect any sale, lease, assignment, transfer or other
conveyance of all or substantially all of the assets of the Company or any
subsidiary thereof, or any consolidation or merger involving the Company or any
subsidiary thereof or any reclassification or other change of stock, or any
recapitalization or any dissolution, liquidation or winding up of the Company.
(b) The Company shall not amend its Certificate of Incorporation
without the approval by vote or written consent by the holders of at least a
majority of the then outstanding shares of Series A Preferred Stock, each share
of Series A Preferred Stock to be entitled to one vote in each instance, if such
amendment would change any of the rights, preferences, privileges of or
limitations provided for herein for the benefit of any shares of Series A
Preferred Stock. Without limiting the generality of the next preceding
sentence, the Company will not amend its Certificate of Incorporation without
the approval by the holders of at least a majority of the then outstanding
shares of Series A Preferred Stock if such amendment would:
(i) Change the relative seniority rights of the holders of
Series A Preferred Stock as to the payment of dividends in relation to the
holders of any other capital stock of the Company; or
(ii) Reduce the amount payable to the holders of Series A
Preferred Stock upon the voluntary or involuntary liquidation, dissolution or
winding up of the Company, or change the relative seniority of the liquidation
preferences of the holders of Series A Preferred Stock to the rights upon
liquidation of the holders of any other capital stock of the Company or change
the dividend rights of the holders of Series A Preferred Stock; or
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<PAGE>
(iii) Cancel or modify the conversion rights of the holders of
Series A Preferred Stock provided for in Section 5 herein
9. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
-------------------------
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Series A Preferred Stock set forth herein, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holders of the Series A Preferred Stock against dilution or
other impairment. Without limiting the generality of the foregoing, the Company
(a) will not increase the par value of any shares of stock receivable on the
conversion of the Series A Preferred Stock above the amount payable therefor on
such conversion, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of stock on the conversion of all Series A Preferred
Stock from time to time outstanding, (c) will not issue any capital stock of any
class which is preferred as to dividends or as to the distribution of assets
upon voluntary or involuntary dissolution, liquidation or winding up of the
Company, unless the rights of the holders thereof shall be limited to a fixed
sum or percentage of par value in respect of participation in dividends and in
any such distribution of assets, and (d) will not transfer all or substantially
all of its properties and assets to any other person (corporate or otherwise),
or consolidate with or merge into any other person or permit any such person to
consolidate with or merge into the Company (if the Company is not the surviving
person), unless such other person shall expressly assume in writing and will be
bound by all the terms of the Series A Preferred Stock set forth herein.
10. NOTICES OF RECORD DATE. In the event of
----------------------
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company, any merger or
consolidation of the Company; or any transfer of all or substantially all of the
assets of the Company to any other corporation, or any other entity or person,
or
(c) any voluntary or involuntary dissolution, liquidation or winding
up of the Company,
then and in each such event the Company shall mail or cause to be mailed to each
holder of Series A Preferred Stock a notice specifying (i) the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right and a description of such dividend, distribution or right, (ii) the date
on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding up is expected to
become effective, (iii) the time, if any, that is to be fixed, as to when the
holders of record of Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other securities) for securities or
other property deliverable upon such reorganization, reclassification.,
recapitalization, transfer, consolidation, merger, dissolution,
13
<PAGE>
liquidation or winding up. Such notice shall be mailed at least 30 days prior to
the date specified in such notice on which such action is to be taken.
SECTION 4. SHARES ENTITLES TO MORE OR LESS THAN ONE VOTE.
---------------------------------------------
If any class or series of the Corporation's capital stock shall be entitled
to more or less than one vote per share, on any matter, every reference in this
Restated Certificate of Incorporation or in any resolution or resolutions
adopted by the Board of Directors pursuant to authority expressly vested in it
by the provisions of Section 2 of this Article FOURTH with respect to the
Preferred Stock or in any relevant provision of law or in any rule or
regulation, to a majority or other proportion of stock shall be deemed to refer
to such majority or other proportion of the votes of such stock.
SECTION 5. AMENDMENT.
---------
Notwithstanding anything contained in this Restated Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
75 percent of the Voting Stock, voting together as a single class, shall be
required to amend, repeal or adopt any provision inconsistent with, Section 2 of
this Article FOURTH. For the purposes of this Restated Certificate of
Incorporation, "Voting Stock" shall mean the outstanding shares or capital stock
of the Corporation entitled to vote generally in the election of directors.
FIFTH: In furtherance of, and not in limitation of, the powers conferred
by statute, the Board of Directors is expressly authorized and empowered:
(a) to manage, or direct the management of, the business and affairs
of the Corporation and to exercise all such powers and do all such acts and
things as may be exercised or done by the Corporation, subject, nevertheless, to
the provisions of the Delaware General Corporation Law, this Restated
Certificate of Incorporation and the By-Laws of the Corporation; and
(b) from time to time to determine to what extent, and at what times
and places, and under what conditions and regulations, the accounts and books of
the Corporation, or any of them, shall be open to inspection by stockholders;
and no stockholder shall have any right to inspect any account, book or document
of the Corporation except as conferred by applicable law.
The Corporation may in its By-Laws confer powers upon the Board of
Directors in addition to the foregoing and in addition to the powers and
authorities expressly conferred upon the Board of Directors by applicable law.
Notwithstanding anything contained in this Restated Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
75 percent of the Voting Stock, voting together as a single class, shall be
required to amend, repeal or adopt any provision inconsistent with, this Article
FIFTH.
SIXTH: Subject to the rights of the holders of any class or series of
stock having a preference expressly vested in it by the provisions of Section 2
of Article FOURTH with respect to the Preferred Stock:
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<PAGE>
(a) any action required or permitted to be taken by the stockholders
of the Corporation must be effected only at a duly called annual or special
meeting of stockholders of the Corporation and may not, after the effective date
of this Restated Certificate of Incorporation, be effected by any consent in
writing of such stockholders;
(b) special meetings of the stockholders of the Corporation may be
called only (i) by the Chairman of the Board of Directors, (ii) pursuant to a
resolution approved by a majority of the Whole Board (as hereinafter defined),
or (iii) pursuant to a written request of the holders of 20% of the Voting
Stock; and
(c) the business permitted to be conducted at any special meeting of
the stockholders is limited to the business brought before the meeting (i) by
the Chairman of the Board of Directors, or (ii) at the request of a majority of
the Whole Board, or (iii) as specified in the written request of the holders of
20% of the Voting Stock.
Advance notice of the business to be brought by stockholders before an
annual meeting shall be given by such stockholders in the manner provided in the
By-Laws of the Corporation.
Notwithstanding anything contained in this Restated Certificate of
Incorporation to the contrary, the affirmative vote of at least 75 percent of
the Voting Stock, voting together as a single class, shall be required to amend,
repeal, or adopt any provision inconsistent with, this Article SIXTH. For the
purposes of this Restated Certificate of Incorporation, "Whole Board" shall mean
the total number of Directors which the Corporation would have if there were no
vacancies.
SEVENTH: SECTION 1. NUMBER, ELECTION AND TERMS OF DIRECTORS.
---------------------------------------
Subject to the rights of the holders of any class or series of stock having
a preference expressly vested in it by the provisions of Section 2 of Article
FOURTH with respect to the Preferred Stock, the number of Directors of the
Corporation shall be fixed by the By-Laws of the Corporation and may be
increased or decreased from time to time in such a manner as may be prescribed
by the By-Laws, but in no case shall the number be less than three nor more than
fifteen.
The Directors shall be divided into three classes, as nearly equal in
number as possible. One class of Directors (`Class I") has been initially
elected for a term expiring at the annual meeting of stockholders to be held in
1994, another class ("Class II") has been initially elected for a term expiring
at the annual meeting of stockholders to be held in 1995, and another class
("Class III") has been initially elected for a term expiring at the annual
meeting of stockholders to be held in 1996 with members of each class to hold
office until their successors are elected and qualified. At each succeeding
annual meeting of the stockholders of the Corporation, the successors of the
class of Directors whose term expires at that meeting shall be elected by
plurality vote of all votes cast at such meeting to hold office for a term
expiring at the annual meeting of stockholders held in the third year following
the year of their election.
SECTION 2. STOCKHOLDER NOMINATION OF DIRECTOR CANDIDATES.
---------------------------------------------
Advance notice of stockholder nominations for the election of Directors
shall be given by such stockholders in the manner provided in the By-Laws of the
Corporation.
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<PAGE>
SECTION 3. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
-----------------------------------------
Subject to the rights of the holders of any class or series of stock having
a preference expressly vested in it by the provisions of Section 2 of Article
FOURTH with respect to the Preferred Stock, newly created directorships
resulting from any increase in the number of directors and any vacancy on the
Board of Directors resulting from death, resignation, disqualification, removal
or other cause shall be filled solely by the affirmative vote of a majority of
the remaining Directors then in office, even though less than a quorum of the
Board of Directors, or by a sole remaining Director. Any Director elected in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the class of Directors in which the new directorship was
created or the vacancy occurred and until such Director's successor shall have
been elected and qualified. No decrease in the number of Directors constituting
the Board of Directors shall shorten the term of an incumbent Director.
SECTION 4. REMOVAL OF DIRECTORS.
--------------------
Subject to the rights of the holders of any class or series of stock having
a preference expressly vested in it by the provisions of Section 2 of Article
FOURTH with respect to the Preferred Stock, any Director may be removed from
office only by the stockholders in the manner provided in this Section 4 of
Article SEVENTH. At any annual meeting of the stockholders of the Corporation
or at any special meeting of the stockholders of the Corporation, the notice of
which shall state that the removal of a Director or Directors is among the
purpose of the meeting, the affirmative vote of the holders of at least 75
percent of the Voting Stock, voting together as a single class, may remove such
Director or Directors. In any vote required by or provided for in this Article
SEVENTH, each share of Voting Stock shall have the number of votes granted to it
generally in the election of Directors.
SECTION 5. AMENDMENT.
---------
Notwithstanding anything contained in this Restated Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
75 percent of the Voting Stock, voting together as a single class, shall be
required to amend, repeal or adopt any provision inconsistent with, this Article
SEVENTH.
EIGHTH: No Director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director; provided, however, that a Director of the Corporation shall
be liable (i) for breach of the Director's duty of loyalty to the Corporation or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law, (iii) to the extent provided
under Section 174 of the Delaware General Corporation Law, relating to
prohibited dividends or distributions or the repurchase or redemption of stock,
or (iv) for any transaction from which the Director derives an improper personal
benefit. If the Delaware General Corporation Law is hereafter amended to permit
further limitation on or elimination of the personal liability of the
Corporation's Directors for breach of fiduciary duty, then a Director of the
Corporation shall be exempt from such liability for any such breach to the
fullest extent permitted by the Delaware General Corporation Law as so amended
from time to time. Any repeal or modification of the foregoing provisions of
this Article EIGHTH, or the adoption of any provision inconsistent herewith,
shall not adversely affect any right or protection of a Director of the
Corporation
16
<PAGE>
hereunder in respect of any act or omission of such Director occurring prior to
such repeal, modification or adoption of an inconsistent provision.
Notwithstanding anything contained in this Restated Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
75 percent of the Voting Stock, voting together as a single class, shall be
required to amend, repeal or adopt any provision inconsistent with, this Article
EIGHTH.
NINTH: The Corporation shall indemnify, defend and hold harmless any
person who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or other, including appeals, by reason
of the fact that he or she is or was a Director or officer of the Corporation,
or is or was serving at the express written request of the Corporation as a
Director, trustee, partner, officer, employee or agent of any corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, to the fullest extent authorized by Section
145 of the Delaware General Corporation Law, as amended from time to time,
against all expenses, liabilities and losses (including attorneys' fees,
judgments, fines. ERISA excise taxes and penalties, and amounts paid or to be
paid in settlement) reasonably incurred or suffered by such person in connection
therewith; provided, however, that, except with respect to proceedings seeking
to enforce the rights to indemnification granted herein, the Corporation shall
indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if the proceeding (or
part thereof) was specifically authorized by the Board of Directors of the
Corporation. Without limiting the generality or the effect of the foregoing,
the Corporation may enter into one or more agreements with any person which
provide for indemnification on greater or different than that provided in this
Article NINTH. Any repeal or modification of the provisions of this Article
NINTH, or the adoption of any provision inconsistent herewith, shall not
adversely affect any right or protection existing hereunder immediately prior to
such repeal, modification or adoption of an inconsistent provision.
Notwithstanding the foregoing, all indemnification provided for in this Article
NINTH shall not be deemed exclusive of any other rights to which those entitled
to receive indemnification or reimbursement hereunder may be entitled under any
By-Law of the Corporation agreement, vote of stockholders or Directors or
otherwise.
Notwithstanding anything contained in this Restated Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
75 percent of the Voting Stock, voting together as a single class, shall be
required to amend, repeal or adopt any provision inconsistent with, this Article
NINTH.
TENTH: The Board of Directors of the Corporation, in determining whether
the interests of the Corporation, its subsidiaries and its stockholders will be
served by any offer of another person to (i) make a tender or exchange offer for
any equity security of the Corporation or any subsidiary of the Corporation,
(ii) merge or consolidate the Corporation or any of its subsidiaries with or
into another corporation, or (iii) purchase or otherwise acquire all or
substantially all of the properties and assets of the Corporation or any of its
subsidiaries, may take into account factors in addition to potential economic
benefits to stockholders. Such factors may include, without limitation, (a)
comparison of the proposed consideration to be received by stockholders, in
relation to the then current market price of the capital stock, to the estimated
current value of the Corporation or any of its subsidiaries in a freely
negotiated transaction, and to the estimated future value of the Corporation or
any of its subsidiaries as an independent entity; (b) the impact of such a
transaction on the customers and employees of the Corporation or
17
<PAGE>
any of its subsidiaries, and its effect on the communities in which the
Corporation or any of its subsidiaries operates; and (c) the ability of the
Corporation or any of its subsidiaries to fulfill its objectives and obligations
under applicable statutes and regulations.
The terms "offer" as used in this Article TENTH includes every offer to buy
or acquire, solicitation of an offer to sell, tender offer for, or request or
invitation for tender of, a security or interest in a security for value.
Notwithstanding anything contained in this Restated Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
75 percent of the Voting Stock, voting together as a single class, shall be
required to amend, repeal or adopt any provision inconsistent with, this Article
TENTH.
ELEVENTH: The Corporation may not purchase any shares of its stock from
any person, entity or group that beneficially owns 5% or more of the Voting
Stock at a price exceeding the average closing price for the twenty trading
business days prior to the purchase date, unless a majority of the Corporation's
Disinterested Stockholders (as hereinafter defined) approve the transaction.
The restrictions on purchases by the Corporation set forth in this Article
ELEVENTH do not apply (i) to any offer to purchase shares of a class of the
Corporation's stock which is made on the same terms and conditions to all
holders of that class of stock, or (ii) to any purchase of stock owned by such a
5% stockholder occurring more than two years after such stockholder's last
acquisition of the Corporation's stock, or (iii) to any purchase of the
Corporation's stock in accordance with the terms of any stock option or employee
benefit plan, or (iv) to any purchase at prevailing market prices pursuant to a
stock purchase program.
For purposes of this Article ELEVENTH, the term "Disinterested
Stockholders" means those holders each of whom owns less than 5% of the Voting
Stock.
Notwithstanding anything contained in this Restated Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
75 percent of the Voting Stock voting together as a single class, shall be
required to amend, repeal or adopt any provision inconsistent with, this Article
ELEVENTH.
TWELFTH: Any vote or votes authorizing liquidation of the Corporation or
proceedings for its dissolution may provide, subject to the rights of creditors
and the rights expressly provided for particular classes or series of stock for
the distribution pro rata among the stockholders of the Corporation of the
assets of the Corporation, wholly or in part in kind, whether such assets be in
cash or other property,, and may authorize the Board of Directors of the
Corporation to determine the valuation of the different assets of the
Corporation for the purpose of such liquidation and may divide or authorize the
Board of Directors to divide such assets or any part thereof among the
stockholders of the Corporation, in such manner that every stockholder will
receive a proportionate amount in value (determined as aforesaid) of cash or
property of the Corporation upon such liquidation or dissolution even though
each stockholder may not receive a strictly proportionate part of each such
asset.
THIRTEENTH: 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, officers or partners, or have a
financial interest, shall be void or voidable solely for this reason,
18
<PAGE>
or solely because the Director or officer is present at or participates in the
meeting of the Board of Directors, or Committee thereof, which authorizes the
contract or transaction, or solely because his, her or their votes are counted
for such purpose, if:
(a) the material facts as to his, her or their interest and as to the
contract or transaction are disclosed or are known to the Board of Directors or
the Committee thereof, and the Board of Directors or Committee thereof, in good
faith authorizes the contract or transaction by a vote sufficient for such
purpose without counting the vote of the interested Director or Directors, even
though the disinterested Directors be less than a quorum, or
(b) the material facts as to his, her or their 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
(c) 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.
Interested Directors shall be counted in determining the presence of a
quorum at a meeting of the Board of Directors, or of a Committee thereof which
authorizes such contract or transaction. No Director or officer shall be liable
to account to the Corporation for any profit realized by him or her from or
through such contract or transaction solely by reason of the fact that he or she
or any other corporation, partnership, association, or other organization in
which he or she is a director or officer, or has a financial interest, was
interested in such contract or transaction.
FOURTEENTH: BUSINESS COMBINATIONS.
---------------------
Section 1. HIGHER VOTE FOR BUSINESS COMBINATIONS.
-------------------------------------
In addition to any affirmative vote required by law or by this Restated
Certificate of Incorporation, unless a Business Combination (as defined below)
shall have been approved by the affirmative vote of not less than a majority of
the Whole Board, any Business Combination shall require the affirmative vote of
the holders of record of outstanding shares representing at least seventy-five
percent (75%) of the Voting Stock, voting together as a single class. Such
affirmative vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise.
SECTION 2. NO EFFECT ON FIDUCIARY OBLIGATIONS.
----------------------------------
Nothing contained in this provision shall be construed to relieve the
members of the Board of Directors from any fiduciary obligations imposed by law.
SECTION 3. DEFINITION.
----------
For purposes of this Article FOURTEENTH "Business Combination" means:
(a) any merger or consolidation of the Corporation or any subsidiary;
or
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(b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) of all or more than
ten percent (10%) of the total assets of the Corporation or any subsidiary, as
of the end of such corporation's recent fiscal year ending prior to the time the
determination is made; or
(c) the issuance or transfer by the Corporation or any subsidiary (in
one transaction or a series of transactions) of any securities of the
Corporation or any subsidiary; or
(d) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or any spin-off or split-up of any kind of the
Corporation or any subsidiary; or
(e) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any subsidiary or any other transaction which has the
effect, directly or indirectly, of increasing the percentage of the outstanding
shares of (i) any class of equity securities of the Corporation or any
subsidiary, or (ii) any class of securities of the Corporation or any subsidiary
convertible into equity securities of the Corporation or any subsidiary; or
(f) any agreement, contract or other arrangement providing for any one
or more of the actions specified in clauses (a) through (e) of Section 3 of this
Article FOURTEENTH.
SECTION 4. SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW.
---------------------------------------------------
Nothing in this Article FOURTEENTH or elsewhere in this Restated
Certificate of Incorporation shall be construed as a waiver of any rights of the
Corporation to the provisions of Section 203 of the Delaware General Corporation
Law dealing with business combinations with interested stockholders; and the
Corporation hereby claims the full benefit of all such provisions or any other
similar provisions heretofore or hereafter enacted as part of the Delaware
General Corporation Law to the fullest extent in addition to the provisions of
this Article FOURTEENTH.
Section 5. AMENDMENT.
---------
Notwithstanding anything contained in this Restated Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
75 percent of the Voting Stock, voting together as a single class, shall be
required to amend, repeal or adopt any provision inconsistent with, this Article
FOURTEENTH.
FIFTEENTH: The By-Laws of the Corporation may be amended, altered, changed
or repealed, and a provision or provisions inconsistent with the provisions of
the By-Laws as they exist from time to time may be adopted, only by the majority
vote of the Whole Board or by the affirmative vote of the holders of at least 75
percent of the Voting Stock, voting together as a single class.
Notwithstanding anything contained in this Restated Certificate of
incorporation to the contrary, the affirmative vote of the holders of at least
75 percent of the Voting Stock, voting together as a single class, shall be
required to amend, repeal or adopt any provision inconsistent with, this Article
FIFTEENTH.
20
<PAGE>
SIXTEENTH: The provisions of Section 2 of Article FOURTH and the provisions
of Articles FIFTH, SIXTH, SEVENTH, EIGHTH, NINTH, TENTH, ELEVENTH, FOURTEENTH,
FIFTEENTH and this Article SIXTEENTH, shall not be amended, altered, changed or
repealed, and no provision inconsistent with any of them shall be adopted,
except by the affirmative vote of the holders of at least seventy-five percent
(75%) of the Voting Stock, voting together as a single class. The Corporation
reserves the right to amend, alter, change or repeal any other provision
contained in this Restated Certificate of Incorporation in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders are
granted subject to this reservation.
This Restated Certificate of Incorporation was duly adopted in accordance
with the applicable provisions of Sections 242, 245 and 228 of the Delaware
General Corporation Law.
IN WITNESS WHEREOF, CMG Information Services, Inc. has caused its
corporation seal to be affixed hereto and this Certificate to be signed by David
S. Wetherell, its President, and attested by William Willams, II, its Assistant
Secretary this 8th day of November, 1993.
CMG INFORMATION SERVICES, INC.
By: /s/ David S. Wetherell
-----------------------
David S. Wetherell, President
ATTEST:
By: /s/ William Williams II
------------------------
William Williams II, Assistant Secretary
[Corporate Seal]
21
<PAGE>
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
CMG INFORMATION SERVICES, INC.
CMG INFORMATION SERVICES, INC. a corporation organized and existing under the
laws of the State of Delaware, does hereby certify as follows:
FIRST: That the Board of Directors of said Corporation by unanimous vote
pursuant to Section 141 of the General Corporation Law of Delaware adopted a
resolution proposing and declaring advisable the following amendment to the
Restated Certificate of Incorporation of the Corporation and directing that said
amendment be submitted to the stockholders for their review and consent:
VOTED: That the Board of Directors of CMG Information Services,
Inc. hereby approves and declares advisable an amendment to
the Restated Certificate of Incorporation of this
Corporation as follows:
That ARTICLE FOURTH (a) of the Restated Certificate of
Incorporation of this Corporation be and it is hereby
amended to increase the number of authorized shares of
capital stock of the Corporation from 15,000,000 to
45,000,000 so that said ARTICLE FOURTH (a) shall be and read
as follows:
FOURTH. (a) The total number of shares of capital stock which the
Corporation is authorized to issue is 45,000,000, of which 40,000,000 shares
shall be common stock, par value $.01 per share ("Common Stock") and 5,000,000
shares shall be preferred stock, par value $.01 per share ("Preferred Stock").
and further,
VOTED: That the foregoing amendment to the Restated Certificate
of Incorporation of this Corporation be submitted to the
stockholders of this Corporation for their approval at the
1996 Special Meeting of Stockholders.
SECOND: That thereafter, pursuant to the resolution of the Board of
Directors, the 1996 Special Meeting of the Stockholders of the Corporation was
duly called and held, upon notice in accordance with Section 222 of the General
Corporation Law of Delaware, at which meeting the necessary number of shares as
required by statute were voted in favor of the amendment.
22
<PAGE>
THIRD: That the aforesaid amendment was duly adopted in accordance with the
applicable provisions of Section 242 of the General Corporation law of Delaware.
FOURTH: That the capital of the Corporation shall not be reduced under or by
reason of the aforesaid amendment.
IN WITNESS WHEREOF, CMG INFORMATION SERVICES, INC. has caused this Certificate
to be signed by David S. Wetherell, its President, and William Williams II, its
Assistant Secretary, this 22nd day of March, 1996.
(SEAL) CMG INFORMATION SERVICES, INC.
By: /s/ David S. Wetherell
-----------------------
David S. Wetherell, President
ATTEST: /s/ William Williams II
------------------------
William Williams II, Assistant Secretary
23
<PAGE>
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
CMG INFORMATION SERVICES, INC.
CMG INFORMATION SERVICES, INC., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), does hereby certify as
follows:
FIRST: That the Board of Directors of said Corporation by unanimous vote
pursuant to Section 141 of the General Corporation Law of Delaware adopted
resolutions proposing and declaring advisable the following amendments to the
Restated Certificate of Incorporation of the Corporation and directing that said
amendments be submitted to the stockholders of the Corporation for their review
and consent:
VOTED: That the Board of Directors of CMG Information Services, Inc.
hereby approves and declares advisable an amendment to the
Restated Certificate of Incorporation of this Corporation as
follows:
That ARTICLE FIRST of the Restated Certificate of Incorporation
of this Corporation be and it is hereby amended to change the
name of the Corporation from CMG Information Services, Inc. to
CMGI, Inc. so that said ARTICLE FIRST shall be and read as
follows:
FIRST: The name of the Corporation is CMGI, Inc.
and further,
VOTED: That the Board of Directors of CMG Information Services, Inc.
hereby approves and declares advisable an amendment to the
Restated Certificate of Incorporation of this Corporation as
follows:
That ARTICLE FOURTH (a) of the Restated Certificate of
Incorporation of this Corporation be and it is hereby amended to
increase the authorized shares of capital stock of the
Corporation from 45,000,000 to 105,000,000 so that said ARTICLE
FOURTH (a) shall be and read as follows:
FOURTH: (a) The total number of shares of capital stock which the
Corporation is authorized to issue is one hundred and five million (105,000,000)
shares of which one hundred million (100,000,000) shares shall be common stock,
par value $0.01 per share ("Common Stock") and 5,000,000 shares shall be
preferred stock, par value $0.01 per share ("Preferred Stock").
24
<PAGE>
and further,
VOTED: That the foregoing amendments to the Restated Certificate of
Incorporation of this Corporation are advisable and in the best
interest of the Corporation and that they be submitted to the
stockholders of this Corporation for their consideration and
approval at the 1998 Annual Meeting of Stockholders.
SECOND: That thereafter, pursuant to the resolution of the Board of
Directors, the 1998 Annual Meeting of Stockholders of the Corporation was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of Delaware, at which meeting the necessary number of shares as
required by statute were voted in favor of the amendments.
THIRD: That the aforesaid amendments were duly adopted in accordance with
the applicable provisions of Section 242 of the General Corporation Law of
Delaware.
FOURTH: That the capital of the Corporation shall not be reduced under or
by reason of the aforesaid amendments.
[The remainder of this page intentionally left blank.]
25
<PAGE>
IN WITNESS WHEREOF, CMG INFORMATION SERVICES, INC. has caused this
Certificate to be signed by David S. Wetherell, its President, and William
Williams II, its Assistant Secretary, this 17th day of December, 1998.
CMG INFORMATION SERVICES, INC.
By: /s/ David S. Wetherell
-----------------------
David S. Wetherell, President
ATTEST: /s/ William Williams II
------------------------
William Williams II,
Assistant Secretary
26
<PAGE>
CERTIFICATE OF
DESIGNATIONS, PREFERENCES, AND RIGHTS
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
CMGI, INC.
(Pursuant to Section 151 of the
Delaware Corporation Law)
CMGI, INC., a corporation organized and existing under the Delaware General
Corporation Law (the "CORPORATION"), hereby certifies that the following
resolutions were adopted by the Board of Directors of the Corporation on
December 17, 1998 pursuant to authority of the Board of Directors as required by
Section 151(g) of the Delaware Corporation Law:
RESOLVED, that pursuant to the authority granted to and vested in the Board of
Directors of this Corporation (the "BOARD OF DIRECTORS" or the "BOARD") in
accordance with the provisions of its Articles of Incorporation, the Board of
Directors hereby authorizes a series of the Corporation's previously authorized
Preferred Stock, par value $.01 per share (the "PREFERRED STOCK"), and hereby
states the designation and number of shares, and fixes the relative rights,
preferences, privileges, powers and restrictions thereof as follows:
Series B Convertible Preferred Stock:
27
<PAGE>
I. DESIGNATION AND AMOUNT
----------------------
The designation of this series, which consists of 50,000 shares of Preferred
Stock, is Series B Convertible Preferred Stock (the "SERIES B PREFERRED STOCK")
and the stated value shall be One Thousand Dollars ($1,000) per share (the
"STATED VALUE").
II. RANK
----
The Series B Preferred Stock shall rank (i) prior to the Corporation's common
stock, par value $.01 per share (the "COMMON STOCK"); (ii) prior to any class or
series of capital stock of the Corporation hereafter created (unless, with the
consent of the holders of Series B Preferred Stock obtained in accordance with
Article X hereof, such class or series of capital stock specifically, by its
terms, ranks senior to or pari passu with the Series B Preferred Stock)
---- -----
(collectively, with the Common Stock, "JUNIOR SECURITIES"); (iii) pari passu
---- -----
with any class or series of capital stock of the Corporation hereafter created
(with the consent of the holders of Series B Preferred Stock obtained in
accordance with Article X hereof) specifically ranking, by its terms, on parity
with the Series B Preferred Stock ("PARI PASSU SECURITIES"); and (iv) junior to
---- -----
any class or series of capital stock of the Corporation hereafter created (with
the consent of the holders of Series B Preferred Stock obtained in accordance
with Article X hereof) specifically ranking, by its terms, senior to the Series
B Preferred Stock ("SENIOR SECURITIES"), in each case as to distribution of
assets upon liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary.
III. DIVIDENDS
---------
The Series B Preferred Stock shall not bear any dividends. Except as provided
below, in no event, so long as any Series B Preferred Stock shall remain
outstanding, shall any dividend whatsoever be declared or paid upon, nor shall
any distribution be made upon, any Junior Securities, nor shall any shares of
Junior Securities be purchased or redeemed by the Corporation nor shall any
moneys be paid to or made available for a sinking fund for the purchase or
redemption of any Junior Securities (other than a distribution of Junior
Securities), without, in each such case, the written consent of the holders of a
majority of the outstanding shares of Series B Preferred Stock, voting together
as a class. Notwithstanding the foregoing, the Corporation may (i) declare or
pay upon any Junior Securities any dividend payable in equity interests of a
subsidiary of the Corporation; provided that, the holders of the Series B
--------
Preferred Stock then outstanding shall have first received, or simultaneously
received, a like distribution on each outstanding share of Series B Preferred
Stock, based on the number of shares of Common Stock into which each share of
Series B Preferred Stock is convertible on the record date for such distribution
(without regard to any limitations on conversion and based upon the then
prevailing Conversion Price (as defined below) using the record date as the
Conversion Date (as defined below)) or (ii) redeem shares of Common Stock which
had been issued as restricted stock pursuant to a stock option plan approved by
the stockholders of the Corporation.
28
<PAGE>
IV. LIQUIDATION PREFERENCE
----------------------
A. LIQUIDATION EVENT. If the Corporation shall commence a voluntary case
-----------------
under the Federal bankruptcy laws or any other applicable Federal or State
bankruptcy, insolvency or similar law, or consent to the entry of an order for
relief in an involuntary case under any law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of the Corporation or of any substantial part of its property, or make
an assignment for the benefit of its creditors, or admit in writing its
inability to pay its debts generally as they become due, or if a decree or order
for relief in respect of the Corporation shall be entered by a court having
jurisdiction in the premises in an involuntary case under the Federal bankruptcy
laws or any other applicable Federal or state bankruptcy, insolvency or similar
law resulting in the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of the Corporation or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and any such decree or order shall be unstayed and in effect for a
period of thirty (30) consecutive days and, on account of any such event, the
Corporation shall liquidate, dissolve or wind up, or if the Corporation shall
otherwise liquidate, dissolve or wind up (each such event being considered a
"LIQUIDATION EVENT"), no distribution shall be made to the holders of any shares
of capital stock of the Corporation (other than Senior Securities) upon
liquidation, dissolution or winding up unless prior thereto, the holders of
shares of Series B Preferred Stock, subject to Article VI, shall have received
the Liquidation Preference (as defined in Article IV.C) with respect to each
share. If upon the occurrence of a Liquidation Event, the assets and funds
available for distribution among the holders of the Series B Preferred Stock and
holders of Pari Passu Securities (including any dividends or distribution paid
---- -----
on any Pari Passu Securities after the date of filing of this Certificate of
---- -----
Designation) shall be insufficient to permit the payment to such holders of the
preferential amounts payable thereon, then the entire assets and funds of the
Corporation legally available for distribution to the Series B Preferred Stock
and the Pari Passu Securities shall be distributed ratably among such shares in
---- -----
proportion to the ratio that the Liquidation Preference payable on each such
share bears to the aggregate liquidation preference payable on all such shares.
Any prior dividends or distribution made after the date of filing of this
Certificate of Designation shall offset, dollar for dollar, the amount payable
to the class or series to which such distribution was made.
B. CERTAIN ACTS DEEMED LIQUIDATION EVENT. At the option of the holders of a
-------------------------------------
majority-in-interest of the then outstanding shares of Series B Preferred Stock,
the sale, conveyance or disposition of all or substantially all of the assets of
the Corporation, the effectuation by the Corporation of a transaction or series
of related transactions in which more than 50% of the voting power of the
Corporation is disposed of, or the consolidation, merger or other business
combination of the Corporation with or into any other Person (as defined below)
or Persons when the Corporation is not the survivor shall either: (i) be deemed
to be a liquidation, dissolution or winding up of the Corporation pursuant to
which the Corporation shall be required to distribute upon consummation of and
as a condition to such transaction an amount equal to the sum of (a)118% of the
Stated Value plus (b) four percent (4%) per annum of such Stated Value for the
period beginning on the date of issuance of the Series B Preferred Stock (the
"ISSUE DATE") and ending on the date of final distribution to the holder thereof
(prorated for any portion of such period) with respect to each outstanding share
of Series B Preferred Stock or (ii) be treated pursuant to Article VI.C(b)
hereof. "PERSON" shall mean any individual, corporation, limited liability
company, partnership, association, trust or other entity or organization.
29
<PAGE>
C. LIQUIDATION PREFERENCE. For purposes hereof, the "LIQUIDATION PREFERENCE"
----------------------
with respect to a share of the Series B Preferred Stock shall mean an amount
equal to the sum of (i) the Stated Value thereof plus (ii) and amount equal to
four percent (4%) per annum of such Stated Value for the period beginning on the
Issue Date and ending on the date of final distribution to the holder thereof
(prorated for any portion of such period). The liquidation preference with
respect to any Pari Passu Securities shall be as set forth in the Certificate of
---- -----
Designation filed in respect thereof.
V. REDEMPTION
----------
A. MANDATORY REDEMPTION. If any of the following events (each, a "MANDATORY
--------------------
REDEMPTION EVENT") shall occur:
(i) The Corporation fails to issue shares of Common Stock to
the holders of Series B Preferred Stock upon exercise by the holders of their
conversion rights in accordance with the terms of this Certificate of
Designation (for a period of at least sixty (60) days if such failure is solely
as a result of the circumstances governed by the second paragraph of Article
VI.E below and the Corporation is using its best efforts to authorize a
sufficient number of shares of Common Stock as soon as practicable), fails to
transfer or to cause its transfer agent to transfer (electronically or in
certificated form) any certificate for shares of Common Stock issued to the
holders upon conversion of the Series B Preferred Stock as and when required by
this Certificate of Designation or the Registration Rights Agreement, dated as
of December 21, 1998, by and among the Corporation and the other signatories
thereto (the "REGISTRATION RIGHTS AGREEMENT"), fails to remove any restrictive
legend (or to withdraw any stop transfer instructions in respect thereof) on any
certificate or any shares of Common Stock issued to the holders of Series B
Preferred Stock upon conversion of the Series B Preferred Stock as and when
required by this Certificate of Designation, the Securities Purchase Agreement
dated as of December 21, 1998, by and between the Corporation and the other
signatories thereto (the "PURCHASE AGREEMENT") or the Registration Rights
Agreement, or fails to fulfill its obligations pursuant to Sections 4(c), 4(e),
4(h), 4(i), 4(j) or 5 of the Purchase Agreement (or makes any announcement,
statement or threat that it does not intend to honor the obligations described
in this paragraph) and any such failure shall continue uncured (or any
announcement, statement or threat not to honor its obligations shall not be
rescinded in writing) for ten (10) business days after the Corporation shall
have been notified thereof in writing by any holder of Series B Preferred Stock;
(ii) The Corporation fails to obtain effectiveness with the
Securities and Exchange Commission (the "SEC") prior to May 22, 1999 of the
Registration Statement (as defined in the Registration Rights Agreement)
required to be filed pursuant to Section 2(a) of the Registration Rights
Agreement, or fails to obtain the effectiveness of any additional Registration
Statement (required pursuant to Section 3(b) of the Registration Rights
Agreement) within one hundred fifty (150) days after the date the Corporation
reasonably first determined (or reasonably should have determined) the need
therefor, or any such Registration Statement, after its initial effectiveness,
lapses in effect or sales of all of the Registrable Securities (as defined in
the Registration Rights Agreement) otherwise cannot be made thereunder (whether
by reason of the Corporation's failure to amend or supplement the prospectus
included therein in accordance with
30
<PAGE>
the Registration Rights Agreement, the Corporation's failure to file and obtain
effectiveness with the SEC of an additional Registration Statement required
pursuant to Section 3(b) of the Registration Rights Agreement or otherwise) for
more than thirty (30) consecutive days or more than sixty (60) days in any
twelve (12) month period after such Registration Statement becomes effective;
(iii) The Corporation or any "significant subsidiary" as such
term is defined in Rule 1-02(w) of Regulation S-X promulgated under the
Securities Act of 1933, as amended (a "SIGNIFICANT SUBSIDIARY") of the
Corporation shall make an assignment for the benefit of creditors, or apply for
or consent to the appointment of a receiver or trustee for it or for all or
substantially all of its property or business; or such a receiver or trustee
shall otherwise be appointed;
(iv) Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Corporation or
any Significant Subsidiary of the Corporation;
(v) The Corporation shall fail to maintain the listing of the
Common Stock on the Nasdaq National Market ("NASDAQ"), the Nasdaq SmallCap
Market ("NASDAQ SMALLCAP"), the New York Stock Exchange ("NYSE") or the American
Stock Exchange ("AMEX"); or
(vi) The Corporation (a) files a notification of registration
under the Investment Company Act of 1940 (the "40 ACT"); (b) files a
registration statement relating to its shares of Common Stock (or any other
equity security) on Forms N-1A or N-2 or any other form prescribed for use by
investment companies under regulations promulgated by the SEC; (c) is informed
by the staff of the SEC's Division of Investment Management that (1) the staff
will not support the Corporation's application for an order of exemption filed
pursuant to Section 3(b)(2) under the 40 Act, or (2) the staff will not agree to
recommend to the SEC that it extend the period of time under the statute during
which the Corporation is exempted from the 40 Act; provided that the Corporation
--------
has failed, within forty-five (45) days of such event, to reduce the amount of
its "investment securities" (as defined in Section 3(a)(2) of the 40 Act) to
less than 40% of its total assets or to have such staff position withdrawn or
does not, at the time of such event, qualify for the exception provided by Rule
3a-2 promulgated under the 40 Act; (d) is named in a complaint, filed by the
SEC, seeking to compel the Corporation to register under the 40 Act; provided
--------
such complaint remains undismissed for a period of forty-five (45) days; or (e)
is named in a complaint filed by or on behalf of the Corporation or any
shareholder or group of shareholders thereof, where any one count thereof avers
or alleges that the Corporation is an Investment Company required to register
under the 40 Act; provided such complaint remains undismissed for a period of
--------
forty-five (45) days,
then, upon the occurrence and during the continuation of any Mandatory
Redemption Event specified in subparagraphs (i), (ii), (v) or (vi), at the
option of the holders of at least 50% of the then outstanding shares of Series B
Preferred Stock by written notice (the "MANDATORY REDEMPTION NOTICE") to the
Corporation of such Mandatory Redemption Event, or upon the occurrence of any
Mandatory Redemption Event specified in subparagraphs (iii) or (iv), the
Corporation shall purchase each holder's shares of Series B Preferred Stock for
an amount per
31
<PAGE>
share equal to the greater of (1) the sum of (a) Mandatory Redemption Percentage
(as defined below) multiplied by the Stated Value of the shares to be redeemed
plus (b) an amount equal to four percent (4%) per annum of such Stated Value for
the period beginning on the Issue Date and ending on the date of payment of the
Mandatory Redemption Amount (the "MANDATORY REDEMPTION DATE"), and (2) the
"PARITY VALUE" of the shares to be redeemed, where parity value means the
product of (a) the highest number of shares of Common Stock issuable upon
conversion of such shares in accordance with Article VI below (without giving
any effect to any limitations on conversions of shares contained herein, and
treating the Trading Day (as defined in Article VI.B) immediately preceding the
Mandatory Redemption Date as the "CONVERSION DATE" (as defined in Article
VI.B(a)) for purposes of determining the lowest applicable Conversion Price,
unless the Mandatory Redemption Event arises as a result of a breach in respect
of a specific Conversion Date in which case such Conversion Date shall be the
Conversion Date), multiplied by (b) the highest Closing Price (as defined below)
for the Common Stock during the period beginning on the date of first occurrence
of the Mandatory Redemption Event and ending one day prior to the Mandatory
Redemption Date (the greater of such amounts being referred to as the "MANDATORY
REDEMPTION AMOUNT"). "MANDATORY REDEMPTION PERCENTAGE" means 115% for purposes
of subparagraphs (iii) and (iv) above, 118% for purposes of subparagraphs (ii)
and (v) above and 120% for all other purposes. "CLOSING PRICE," as of any date,
means the last sale price of the Common Stock on Nasdaq as reported by Bloomberg
Financial Markets or an equivalent reliable reporting service mutually
acceptable to and hereafter designated by the holders of a majority in interest
of the shares of Series B Preferred Stock and the Corporation ("BLOOMBERG") or,
if Nasdaq is not the principal trading market for such security, the last sale
price of such security on the principal securities exchange or trading market
where such security is listed or traded as reported by Bloomberg, or if the
foregoing do not apply, the last sale price of such security in the over-the-
counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no last sale price of such security is available in the over-
the-counter market on the electronic bulletin board for such security or in any
of the foregoing manners, the average of the bid prices of any market makers for
such security that are listed in the "pink sheets" by the National Quotation
Bureau, Inc. If the Closing Price cannot be calculated for such security on such
date in the manner provided above, the Closing Price shall be the fair market
value as mutually determined by the Corporation and the holders of a majority in
interest of shares of Series B Preferred Stock being converted for which the
calculation of the Closing Price is required in order to determine the
Conversion Price of such Series B Preferred Stock.
B. TRADING MARKET REDEMPTION. If the Series B Preferred Stock ceases to be
-------------------------
convertible by any holder as a result of the limitations described in Article
VI.A(c) below (a "TRADING MARKET REDEMPTION EVENT"), and the Corporation has not
prior to, or within forty-five (45) days of, the date that such Trading Market
Redemption Event arises, (i) obtained the Stockholder Approval (as defined in
Article VI.A(c)) or (ii) eliminated any prohibitions under applicable law or
the rules or regulations of any stock exchange, interdealer quotation system or
other self-regulatory organization with jurisdiction over the Corporation or any
of its securities on the Corporation's ability to issue shares of Common Stock
in excess of the Maximum Share Amount (as defined in Article VI.A(c)), then the
Corporation shall be obligated to redeem immediately all of the then outstanding
Series B Preferred Stock, in accordance with this Article V.B. An irrevocable
redemption notice (the "TRADING MARKET REDEMPTION NOTICE") shall be delivered
promptly to the holders of Series B Preferred Stock at their registered address
32
<PAGE>
appearing on the records of the Corporation and shall state (i) that the Maximum
Share Amount (as defined in Article VI.A) has been issued upon exercise of the
Series B Preferred Stock, (ii) that the Corporation is obligated to redeem all
of the outstanding Series B Preferred Stock and (iii) the Mandatory Redemption
Date, which shall be a date within five (5) business days of the earlier of (a)
the date of the Redemption Notice or (b) the date on which the holders of the
Series B Preferred Stock notify the Corporation of the occurrence of a Trading
Market Redemption Event. On the Mandatory Redemption Date, the Corporation
shall make payment of the Mandatory Redemption Amount (as defined in Article V.A
above) in cash.
C. OPTIONAL REDEMPTION. Notwithstanding anything to the contrary contained
-------------------
in this Article V, so long as (i) no Mandatory Redemption Event or Trading
Market Redemption Event shall have occurred and be continuing, (ii) any
Registration Statement required to be filed and be effective pursuant to the
Registration Rights Agreement is then in effect and has been in effect and sales
of all of the Registrable Securities (as defined in the Registration Rights
Agreement) can be made thereunder for at least twenty (20) days prior to the
Optional Redemption Date (as defined below) and (iii) the Corporation has a
sufficient number of authorized shares of Common Stock reserved for issuance
upon full conversion of the Series B Preferred Stock, then at any time after
December 21, 1999, on any day on which, and for a period of ten (10) consecutive
Trading Days prior thereto, the Closing Bid Price (as defined in Article
VI.B(a)) is less than $73.00 (as adjusted for stock splits, stock dividends and
similar events, the "REDEMPTION THRESHOLD"), the Corporation shall have the
right, exercisable on not less than fifteen (15) Trading Days prior written
notice to the holders of Series B Preferred Stock (which notice may not be sent
to the holders of the Series B Preferred Stock until the Corporation is
permitted to redeem the Series B Preferred Stock pursuant to this Article V.C),
to redeem all of the outstanding shares of Series B Preferred Stock in
accordance with this Article V. Any notice of redemption hereunder (an
"OPTIONAL REDEMPTION") shall be delivered to the holders of Series B Preferred
Stock at their registered addresses appearing on the books and records of the
Corporation and shall state (1) that the Corporation is exercising its right to
redeem all of the outstanding shares of Series B Preferred Stock and (2) the
date of redemption (the "OPTIONAL REDEMPTION NOTICE"). On the date fixed for
redemption (the "OPTIONAL REDEMPTION DATE"), the Corporation shall make payment
of the Optional Redemption Amount (as defined below) to or upon the order of the
holders as specified by the holders in writing to the Corporation at least one
(1) business day prior to the Optional Redemption Date. If the Corporation
exercises its right to redeem the Series B Preferred Stock, the Corporation
shall make payment to the holders of an amount in cash (the "OPTIONAL REDEMPTION
AMOUNT") equal to the sum of (i) 115% multiplied by the Stated Value of the
shares of Series B Preferred Stock to be redeemed and (ii) an amount equal to
four percent (4%) per annum of such Stated Value for the period beginning on the
Issue Date and ending on the Optional Redemption Date, for each share of Series
B Preferred Stock then held. Notwithstanding notice of an Optional Redemption,
the holders shall at all times prior to the Optional Redemption Date maintain
the right to convert all or any shares of Series B Preferred Stock in accordance
with Article VI and any shares of Series B Preferred Stock so converted after
receipt of an Optional Redemption Notice and prior to the Optional Redemption
Date set forth in such notice and payment of the aggregate Optional Redemption
Amount shall be deducted from the shares of Series B Preferred Stock which are
otherwise subject to redemption pursuant to such notice. If the Corporation
delivers an Optional Redemption Notice and fails to pay the Optional Redemption
Amount due to the holders of the Series B Preferred Stock within two (2)
business days following the Optional Redemption Date,
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the Corporation shall forever forfeit its right to redeem the Series B Preferred
Stock pursuant to this Article V.C. On the Optional Redemption Date, against
delivery of the Optional Redemption Amount, the holders of such redeemed shares
of Series B Preferred Stock shall surrender the certificates representing such
shares of Series B Preferred Stock in escrow to counsel designated by such
holders with such shares to be released to the Corporation by such counsel upon
receipt of the Optional Redemption Amount by such holders.
D. REDEMPTION IN LIEU OF AUTOMATIC CONVERSION. Notwithstanding anything to
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the contrary contained in this Article V and subject to the terms of this
Article V.D, if on the Automatic Conversion Date (as defined in Article VIII)
the Corporation is unable to issue shares of Common Stock upon conversion of the
Series B Preferred Stock as a result of the Cap Amount being issued, the
Corporation shall, in lieu of issuing shares of Common Stock to the holders upon
Automatic Conversion in accordance with the terms of Article VIII below, redeem
all of such shares of Series B Preferred Stock which the Corporation is unable
to convert as a result of the Cap Amount being issued for an amount in cash
equal to the sum of (i) the Stated Value of the shares of Series B Preferred
Stock to be redeemed and (ii) an amount equal to four (4%) per annum of such
Stated Value beginning on the Issue Date and ending on the Automated Conversion
Date, for each share of Series B Preferred Stock being redeemed (the "REDEMPTION
IN LIEU OF AUTOMATIC CONVERSION AMOUNT"). The Corporation shall effect a
redemption pursuant to this Article V.D. by sending written notice to the
holders of the Series B Preferred Stock at least fifteen (15) Trading Days prior
to the Automatic Conversion Date of its election to redeem the shares of Series
B Preferred Stock eligible for redemption pursuant to this Article V.D. (the
"REDEMPTION IN LIEU OF AUTOMATIC CONVERSION NOTICE").
E. QUALIFIED PUBLIC OFFERING REDEMPTION. Notwithstanding anything to the
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contrary contained in this Article V, so long as (i) no Mandatory Redemption
Event or Trading Market Redemption Event shall have occurred and be continuing,
(ii) any Registration Statement required to be filed and to be effective
pursuant to the Registration Rights Agreement is then in effect and has been in
effect and sales of all of the Registrable Securities (as defined in the
Registration Rights Agreement) can be made thereunder for at least twenty (20)
days prior to the date the Qualified Public Offering Redemption Notice (as
defined below) is sent and at all times through and including the Qualified
Public Offering Redemption Date (as defined below) and (iii) the Corporation has
a sufficient number of authorized shares of Common Stock reserved for issuance
upon full conversion of the Series B Preferred Stock, then at any time after the
Issue Date, if the underwriters in such Qualified Public Offering (as defined in
the Registration Rights Agreement) so request, the Corporation shall have the
right, exercisable on not less than fifteen (15) Trading Days prior written
notice to the holders of Series B Preferred Stock, to redeem all of the
outstanding shares of Series B Preferred Stock in accordance with this Article
V. Any notice of redemption hereunder (a "QUALIFIED PUBLIC OFFERING
REDEMPTION") shall be delivered to the holders of Series B Preferred Stock at
their registered addresses appearing on the books and records of the Corporation
and shall state (1) that the Corporation is exercising its right to redeem all
of the outstanding shares of Series B Preferred Stock and (2) the date of
redemption which shall be the date of the consummation of the Qualified Public
Offering (the "QUALIFIED PUBLIC OFFERING REDEMPTION NOTICE"). On the date of
consummation of the Qualified Public Offering (the "QUALIFIED PUBLIC OFFERING
REDEMPTION DATE"), the Corporation shall make payment of the Qualified Public
Offering Redemption Amount (as defined below) to or upon the order of the
holders as specified by the holders in writing to the Corporation at least one
(1)
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business day prior to the Qualified Public Offering Redemption Date. If the
Corporation exercises its right to redeem the Series B Preferred Stock, the
Corporation shall make payment to the holders of an amount in cash (the
"QUALIFIED PUBLIC OFFERING REDEMPTION AMOUNT") equal to the sum of (i) 118%
multiplied by the Stated Value of the shares of Series B Preferred Stock to be
redeemed and (ii) an amount equal to four percent (4%) per annum of such Stated
Value for the period beginning on the Issue Date and ending on the Qualified
Public Offering Redemption Date, for each share of Series B Preferred Stock then
held. Notwithstanding notice of an Qualified Public Offering Redemption, the
holders shall at all times prior to the Qualified Public Offering Redemption
Date maintain the right to convert all or any shares of Series B Preferred Stock
in accordance with Article VI and any shares of Series B Preferred Stock so
converted after receipt of an Qualified Public Offering Redemption Notice and
prior to the Qualified Public Offering Redemption Date set forth in such notice
and payment of the aggregate Qualified Public Offering Redemption Amount shall
be deducted from the shares of Series B Preferred Stock which are otherwise
subject to redemption pursuant to such notice. If the Corporation delivers an
Qualified Public Offering Redemption Notice and fails to pay the Qualified
Public Offering Redemption Amount due to the holders of the Series B Preferred
Stock within two (2) business days following the Qualified Public Offering
Redemption Date, the Corporation shall forever forfeit its right to redeem the
Series B Preferred Stock pursuant to this Article V.E. On the Qualified Public
Offering Redemption Date, against delivery of the Qualified Public Offering
Redemption Amount, the holders of such redeemed shares of Series B Preferred
Stock shall surrender the certificates representing such shares of Series B
Preferred Stock in escrow to counsel designated by such holders with such
shares to be released to the Corporation by such counsel upon receipt of the
Qualified Public Offering Redemption Amount by such holders.
F. FAILURE TO PAY REDEMPTION AMOUNTS. In the case of a Mandatory Redemption
---------------------------------
Event or the delivery of an Optional Redemption Notice, Redemption In Lieu of
Automatic Conversion Notice or a Qualified Public Offering Redemption Notice, if
the Corporation fails to pay the Mandatory Redemption Amount, Optional
Redemption Amount, Redemption In Lieu of Automatic Conversion Amount or
Qualified Public Offering Redemption Amount, as applicable, within five (5)
business days of written notice that such amount is due and payable, then
(assuming there are sufficient authorized shares) in addition to all other
available remedies, each holder of Series B Preferred Stock shall have the right
at any time, so long as the Mandatory Redemption Event continues, or at any time
after delivery of an Optional Redemption Notice, Redemption In Lieu of Automatic
Conversion Notice or a Qualified Public Offering Redemption Notice, to require
the Corporation, upon written notice, to immediately issue (in accordance with
and subject to the terms of Article VI below), in lieu of the Mandatory
Redemption Amount, Optional Redemption Amount, Redemption In Lieu of Automatic
Conversion Amount or Qualified Public Offering Redemption Amount, as applicable,
the number of shares of Common Stock of the Corporation equal to such applicable
redemption amount divided by any Conversion Price, as chosen in the sole
discretion of the holder of Series B Preferred Stock, in effect from the date of
the Mandatory Redemption Event (or the date of delivery of an Optional
Redemption Notice, Redemption In Lieu of Automatic Conversion Notice or a
Qualified Public Offering Redemption Notice) until the date such holder elects
to exercise its rights pursuant to this Article V.E.
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VI. CONVERSION AT THE OPTION OF THE HOLDER
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A. OPTIONAL CONVERSION
-------------------
(a) CONVERSION AMOUNT. Each holder of shares of Series B Preferred
-----------------
Stock may, at its option at any time and from time to time, upon surrender of
the certificates therefor, convert any or all of its shares of Series B
Preferred Stock into Common Stock as set forth below (an "OPTIONAL CONVERSION").
Each share of Series B Preferred Stock shall be convertible into such number of
fully paid and nonassessable shares of Common Stock as such Common Stock exists
on the Issue Date, or any other shares of capital stock or other securities of
the Corporation into which such Common Stock is thereafter changed or
reclassified, as is determined by dividing (1) the sum of (a) the Stated Value
thereof plus (b) the Premium Amount (as defined below), by (2) the then
effective Conversion Price (as defined below); provided, however, that in no
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event (other than pursuant to the Automatic Conversion (as defined in Article
VII)) shall a holder of shares of Series B Preferred Stock be entitled to
convert any such shares in excess of that number of shares upon conversion of
which the sum of (x) the number of shares of Common Stock beneficially owned by
the holder and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unconverted portion of
the shares of Series B Preferred Stock or the unexercised or unconverted portion
of any other securities of the Corporation subject to a limitation on conversion
or exercise analogous to the limitations contained herein) and (y) the number of
shares of Common Stock issuable upon the conversion of the shares of Series B
Preferred Stock with respect to which the determination of this proviso is being
made, would result in beneficial ownership by a holder and such holder's
affiliates of more than 4.9% of the outstanding shares of Common Stock. For
purposes of the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of t |
