Certificate of Incorporation - Vermont Teddy Bear Co. Inc.
RESTATED CERTIFICATE OF INCORPORATION
OF
THE VERMONT TEDDY BEAR CO., INC.
UNDER
SECTION 807 OF THE BUSINESS CORPORATION LAW
Pursuant to Section 807 of the Business Corporation Law, the undersigned,
being the Chairman of the Board, Chief Executive Officer and Secretary of The
Vermont Teddy Bear Co., Inc. (the "Corporation"), hereby certify that:
1. The name of the Corporation is The Vermont Teddy Bear Co., Inc.
2. The Certificate of Incorporation was filed by the Department of State on
January 27, 1984, and Certificates of Amendment of the Certificate of
Incorporation were filed by the Department of State on May 7, 1993,
August 2, 1993, a Restated Certificate of Incorporation was filed with
the Department of State on September 24, 1993, and Certificate of
Amendment of the Restated Certificate of Incorporation was filed with the
Department of State on March 11, 1996.
3. The Certificate of Incorporation, as previously amended, is further
amended by amending Section 4 to provide for the authorization of Three
Hundred Seventy-Five Thousand (375,000) shares of Series B Convertible
Preferred Stock and to amend the liquidation preference of the Series A
Preferred Stock, as follows:
A. Series A Preferred Stock. Ninety (90) shares of preferred stock
having a par value of $.05 per share, designated Series A Preferred Stock
and having the following preferences and limitations:
1. Dividends. Holders of Series A Preferred Stock shall be
entitled to receive out of the surplus or net profits of the
Corporation dividends at the rate of eight percent (8%) per annum
payable quarterly on the first days of January, April, July and
October. Dividends on the Series A Preferred Stock shall be
payable before any dividends shall be paid upon, or set apart for,
the common stock. Further, dividends on Series A Preferred Stock
shall be cumulative, so that if in any quarterly dividend period
the dividends shall not have been paid or set apart, the deficiency
shall be fully paid, or set apart for payment, before any dividends
shall be set apart for or paid upon the common stock.
Accumulations of dividends on Series A Preferred Stock shall not
bear interest.
2. Voting Rights. Except as required by law, Holders of Series
A Preferred Stock shall have no voting power whatsoever and
shall not be entitled to notice of any meeting of the
stockholders of the Corporation.
3. Liquidation. In the event of any liquidation, voluntary or
involuntary, the holders of Series A Preferred Stock shall be
entitled to be paid the consideration they paid for their shares
and the unpaid cumulative dividends accrued thereon on a pari
passu basis with the Series B Convertible Preferred Stock before
any amount shall be paid to the holders of the common stock.
4. Redemption. The Corporation may, at the option of its Board
of Directors, redeem all or any part of Series A Preferred Stock
outstanding on any dividend payment date after the issuance
thereof, by paying the holders thereof the consideration they
paid for their shares, together with all unpaid cumulative
dividends accrued thereon (the "Redemption Price"). Notice of
the Corporation's intention to redeem shares of the outstanding
preferred, and the date and place thereof, shall be sent by
first class mail at least thirty (30) days prior to the proposed
redemption date to the holders of the shares to be redeemed.
From and after the date fixed in any such notice as the date of
redemption, all dividends upon Series A Preferred Stock so
called for redemption shall cease to accrue, and all rights of
the holders of Series A Preferred Stock, except the right to
receive the Redemption Price upon surrender of the certificate
representing Series A Preferred Stock called for redemption,
shall cease and determine.
5. Conversion Rights. The holders of Series A Preferred Stock
shall not have any right to convert their shares into, or
exchange them for, common stock.
B. Series B Convertible Preferred Stock. Three Hundred Seventy-Five
Thousand (375,000) shares of preferred stock having a par value of
$.05 per share, designated Series B Convertible Preferred Stock and
having the following preferences and limitations:
1. Dividends. Holders of Series B Convertible Preferred Stock
shall not be entitled to any dividends.
2. Voting Rights. Except as required by law, Holders of Series
B Convertible Preferred Stock shall have no voting power
whatsoever and shall not be entitled to notice of any meeting of
the stockholders of the Corporation.
3. Liquidation. In the event of any liquidation, voluntary or
involuntary, the holders of Series B Convertible Preferred Stock
shall be entitled to be paid the consideration they paid for
their shares on a pari passu basis with the Series A Preferred
Stock before any amount shall be paid to the holders of the
common stock.
4. Conversion Rights. The holders of Series B Convertible
Preferred Stock shall have the right to convert their shares
into shares of the Corporation's Common Stock, par value $0.05,
as follows:
(a) Right to Convert. Each share of the Series B
Convertible Preferred Stock shall be convertible, at the
option of the holder thereof, at any time after the date
that is one (1) year from the date of the issuance of the
Series B Convertible Preferred Stock (the "Purchase
Date"), at the office of the Company or the Company's
transfer agent, into such number of fully paid and non-
assessable shares of Common Stock as is determined by
dividing the original Series B Convertible Preferred Stock
issue price by the Conversion Price applicable to such
share, determined as provided below, in effect on the date
the certificate of the Series B Convertible Preferred
Stock is surrendered for conversion. The initial
Conversion Price for the Series B Convertible Preferred
Stock shall be as set forth in subsection 4(c), below.
(b) Mechanics of Conversion. Before any holder of shares
of Series B Convertible Preferred Stock shall be entitled
to convert the same into shares of Common Stock, he shall
surrender the certificate or certificates representing the
Series B Convertible Preferred Stock, duly endorsed, by
delivering the certificate or certificates to the
Company's principal office or the Company's transfer agent
for the Series B Convertible Preferred Stock, and shall
give written notice to the Company's Investor Relations
Department at its principal office, of the election to
convert the Series B Convertible Preferred Stock and shall
state therein the name or names in which the certificate
or certificates for shares of Common Stock are to be
issued. The Company shall, as soon as practicable
thereafter, issue and deliver to such holder, or to the
nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to
which such holder shall be entitled as described above.
Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of
such surrender of the shares of Series B Convertible
Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable
upon conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock as
of such date. If the conversion is in connection with an
underwritten offering of securities registered pursuant to
the Securities Act of 1933, as amended (the "1933 Act"),
the conversion may, at the option of any holder
surrendering shares of Series B Convertible Preferred
Stock for conversion, be conditioned upon the closing with
the underwriters of the sale of securities pursuant to
such offering, in which event the person or persons
entitled to receive the Common Stock upon conversion of
the Series B Convertible Preferred Stock shall not be
deemed to have converted such Series B Convertible
Preferred Stock until immediately prior to the closing of
such sale of securities.
(c) Conversion Price Adjustments of Series B Convertible
Preferred Stock for Certain Dilutive Issuances Splits and
Combinations. The Conversion Price of the Series B
Convertible Preferred Stock shall initially equal the
issuance price per share of the Series B Convertible
Preferred Stock, and shall be subject to adjustment from
time to time as follows:
(i) (A) If the Company shall issue, after the
Purchase Date, any Additional Stock (as
defined below) without consideration or for a
consideration per share less than the
Conversion Price in effect immediately prior
to the issuance of such Additional Stock, the
Conversion Price shall be adjusted to a price
equal to the price paid per share for such
Additional Stock.
(B) In the case of the issuance of Common
Stock for cash, the consideration shall be
deemed to be the amount of cash paid therefor
before deducting any reasonable discounts,
commissions or other expenses allowed, paid or
incurred by the Company for any underwriting
or otherwise in connection with the issuance
and sale thereof.
(C) In the case of the issuance of the Common
Stock for a consideration in whole or in part
other than cash, the consideration other than
cash shall be deemed to be the fair value
thereof as determined by the Board of
Directors of the Company irrespective of any
accounting treatment.
(D) In the case of the issuance (whether
before, on or after the applicable Purchase
Date) of options to purchase or rights to
subscribe for Common Stock, securities by
their terms convertible into or exchangeable
for Common Stock or options to purchase or
rights to subscribe for such convertible or
exchangeable securities, the following
provisions shall apply for all purposes of
this subsection 4(c)(i) and subsection
4(c)(ii):
(1) The aggregate maximum number of
shares of Common Stock deliverable upon
exercise (assuming the satisfaction of
any conditions to exercisability,
including without limitation, the
passage of time, but without taking into
account potential antidilution
adjustments) of such options
to purchase or rights to subscribe for
Common Stock shall be deemed to have
been issued at the time such Options or
rights were issued and for a
consideration equal to the consideration
(determined in the manner provided in
subsections 4(c)(i)(B) and (c)(i)(C)),
if any, received by the corporation upon
the issuance of such options or rights
plus the minimum exercise price provided
in such options or rights (without
taking into account potential
antidilution adjustments) for
the Common Stock covered thereby.
(2) The aggregate maximum number of
shares of Common Stock deliverable upon
conversion of or in exchange (assuming
the satisfaction of any conditions to
convertibility or exchangeability,
including, without limitation, the
passage of time, but without taking into
account potential antidilution
adjustments) for any such convertible or
exchangeable securities or upon the
exercise of options to purchase or
rights to subscribe for such convertible
or exchangeable securities and
subsequent conversion or exchange
thereof shall be deemed to have
been issued at the time such securities
were issued or such options or rights
were issued and for a consideration
equal to the consideration, if any,
received by the corporation for any such
securities and related options or rights
(excluding any cash received on account
of accrued interest or accrued
dividends), plus the minimum additional
consideration, if any, to be received by
the corporation (without taking into
account potential antidilution
adjustments) upon the conversion or
exchange of such securities or the
exercise of any related options or
rights (the consideration in each case
to be determined in the manner provided
in subsections 4(c)(i)(B) and (c)(i)(C))
(3) In the event of any change in the
number of shares of Common Stock
deliverable or in the consideration
payable to this corporation upon
exercise of such options or rights or
upon conversion of or in exchange for
such convertible or exchangeable
securities, including, but not limited
to, a change resulting from the
antidilution provisions thereof, the
Conversion Price of the Series B
Convertible Preferred Stock, to
the extent in any way affected by or
computed using such options, rights or
securities, shall be recomputed to
reflect such change, but no further
adjustment shall be made for the actual
issuance of Common Stock or any payment
of such consideration upon the exercise
of any such options or rights or the
conversion or exchange of such
securities.
(4) Upon the expiration of any such
options or rights, the termination of
any such rights to convert or exchange
or the expiration of any options or
rights related to such convertible or
exchangeable securities, the Conversion
Price of the Series B Convertible
Preferred Stock, to the extent in any
way affected by or computed using such
options, rights or securities or options
or rights related to such securities,
shall be recomputed to reflect the
issuance of only the number of shares of
Common Stock (and convertible or
exchangeable securities which remain in
effect) actually issued upon the
exercise of such options or rights, upon
the conversion or exchange of such
securities or upon the exercise of the
options or rights related to such
securities.
(5) The number of shares of Common
Stock deemed issued and the
consideration deemed paid therefor
pursuant to subsections 4(c)(i)(D)(1)
and (2) shall be appropriately adjusted
to reflect any change, termination or
expiration of the type described in
either subsection 4(c)(i)(D)(3) or (4).
(ii) "Additional Stock" shall mean any shares of
Common Stock issued (or deemed to have been issued
pursuant to subsection 4(c)(i)(D)) by this
corporation after the Purchase Date other than
(A) Common Stock issued pursuant to a
transaction described in subsection 4(c)(iii)
hereof,
(B) shares of Common Stock issuable or issued
to employees, officers, consultants, directors
or vendors (if in transactions with primarily
nonfinancing purposes) of this corporation
directly or pursuant to a stock option plan or
restricted stock plan approved by the
shareholders and Board of Directors of this
corporation
(iii) In the event the corporation should at any
time or from time to time after the Purchase Date
fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common
Stock or the determination of holders of Common
Stock entitled to receive a dividend or other
distribution payable in additional shares of Common
Stock or other securities or rights convertible
into, or entitling the holder thereof to receive
directly or indirectly, additional shares of Common
Stock (hereinafter referred to as "Common Stock
Equivalents") without payment of any consideration
by such holder for the additional shares of Common
Stock or the Common Stock Equivalents (including the
additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such
record date (or the date of such dividend
distribution, split or subdivision if no
record date is fixed), the Conversion Price of the
Series B Convertible Preferred Stock shall be
appropriately decreased so that the number of shares
of Common Stock issuable on conversion of each share
of such series shall be increased in proportion to
such increase of the aggregate of shares of Common
Stock outstanding and those issuable with respect to
such Common Stock Equivalents with the number of
shares issuable with respect to Common Stock
Equivalents determined from time to time in the
manner provided for deemed issuances in subsection
4(c)(i)(D).
(iv) If the number of shares of Common Stock
outstanding at any time after the Purchase Date is
decreased by a combination of the outstanding shares
of Common Stock, then, following the record date of
such combination, the Conversion Price for the
Series B Convertible Preferred Stock shall be
appropriately increased so that the number of shares
of Common Stock issuable on conversion of each share
of such series shall be decreased in proportion to
such decrease in outstanding shares.
(d) Notice. In case at any time the Company shall
propose:
(i) to pay any dividend or make any distribution on
shares of Common Stock in shares of Common Stock or
make any other distribution (other than regularly
scheduled cash dividends which are not in a greater
amount per share than the most recent such cash
dividend) to all holders of Common Stock; or
(ii) to issue any rights, warrants, or other
securities to all holders of Common Stock entitling
them to purchase any additional shares of Common
Stock or any other rights, warrants, or other
securities; or
(iii) to effect any reclassification or change of
outstanding shares of Common Stock, or any
consolidation, merger, sale, lease, or conveyance of
property; or
(iv) to effect any liquidation, dissolution, or
winding-up of the Company; or
(v) to take any other action which would cause an
adjustment to the Conversion Price; then, and in any
one or more of such cases, the Company shall give
written notice thereof, by registered mail, postage
prepaid, to the Holder at his then-current address,
mailed at least 15 days prior to (i) the date as of
which the holders of record of shares of Common
Stock to be entitled to receive any such dividend,
distribution, rights, warrants, or other securities
are to be determined, (ii) the date on which any
such reclassification, change of outstanding shares
of Common Stock, consolidation, merger, sale, lease,
conveyance of property, liquidation, dissolution, or
winding-up is expected to become effective, and the
date as of which it is expected that holders of
record of shares of Common Stock shall be entitled
to exchange their shares for securities or other
property, if any, deliverable upon such
reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of
property, liquidation, dissolution, or winding-up,
or (iii) the date of such action which would require
an adjustment to the Conversion Price.
C. Undesignated Preferred Stock. Six Hundred Twenty-Four
Thousand Nine Hundred Ten (624,910) shares of preferred
stock having a par value of $.05 per share and having such
preferences, limitations and relative rights as determined
from time to time by the Board of Directors. The Board of
Directors is hereby expressly granted authority to divide
these shares of preferred stock into series and to fix and
determine before the issuance thereof the number of shares
and the relative rights and preferences of any series so
established.
D. Common Stock. Twenty million (20,000,000) shares of
common stock having a par value of $.05 per share.
4. The amendment related to the authorization of the Series B Convertible
Preferred Stock was authorized by the Corporation's Board of Directors
as of June 27, 1996, pursuant to Section 502 of the Business
Corporation Law and by the unanimous written consent of the
shareholders of the Series A Preferred Stock, dated June 27, 1996,
pursuant to Section 615 of the Business Corporation Law.
5. The text of the Certificate of Incorporation and all prior amendments
thereto are hereby restated as further amended above to read herein
set forth in full:
ARTICLE I
NAME
The name of the corporation is The Vermont Teddy Bear Co., Inc.
ARTICLE II
PURPOSES
The purpose or purposes for which this corporation is formed are as
follows, to wit: to engage in any lawful act or activity for which
corporations may be organized under the Business Corporation Law, provided
that it is not formed to engage in any act or activity requiring the consent
or approval of any state official, department, board, agency or other body,
without first obtaining such consent or approval.
ARTICLE III
OFFICE
The office of the corporation is to be located in the City of Albany,
County of Albany, State of New York.
ARTICLE IV
CAPITAL STOCK
The aggregate number of shares which the corporation shall have
authority to issue is twenty one million (21,000,000) shares, divided as
follows:
A. Series A Preferred Stock. Ninety (90) shares of preferred stock
having a par value of $.05 per share, designated Series A Preferred
Stock and having the following preferences and limitations:
1. Dividends. Holders of Series A Preferred Stock shall be
entitled to receive out of the surplus or net profits of the
Corporation dividends at the rate of eight percent (8%) per
annum payable quarterly on the first days of January, April,
July and October. Dividends on the Series A Preferred Stock
shall be payable before any dividends shall be paid upon, or set
apart for, the common stock. Further, dividends on Series A
Preferred Stock shall be cumulative, so that if in any quarterly
dividend period the dividends shall not have been paid or set
apart, the deficiency shall be fully paid, or set apart for
payment, before any dividends shall be set apart for or paid
upon the common stock. Accumulations of dividends on Series A
Preferred Stock shall not bear interest.
2. Voting Rights. Except as required by law, Holders of Series
A Preferred Stock shall have no voting power whatsoever and
shall not be entitled to notice of any meeting of the
stockholders of the Corporation.
3. Liquidation. In the event of any liquidation, voluntary or
involuntary, the holders of Series A Preferred Stock shall be
entitled to be paid the consideration they paid for their shares
and the unpaid cumulative dividends accrued thereon on a pari
passu basis with the Series B Convertible Preferred Stock before
any amount shall be paid to the holders of the common stock.
4. Redemption. The Corporation may, at the option of its Board
of Directors, redeem all or any part of Series A Preferred Stock
outstanding on any dividend payment date after the issuance
thereof, by paying the holders thereof the consideration they
paid for their shares, together with all unpaid cumulative
dividends accrued thereon (the "Redemption Price"). Notice of
the Corporation's intention to redeem shares of the outstanding
preferred, and the date and place thereof, shall be sent by
first class mail at least thirty (30) days prior to the proposed
redemption date to the holders of the shares to be redeemed.
From and after the date fixed in any such notice as the date of
redemption, all dividends upon Series A Preferred Stock so
called for redemption shall cease to accrue, and all rights of
the holders of Series A Preferred Stock, except the right to
receive the Redemption Price upon surrender of the certificate
representing Series A Preferred Stock called for redemption,
shall cease and determine.
5. Conversion Rights. The holders of Series A Preferred Stock
shall not have any right to convert their shares into, or
exchange them for, common stock.
B. Series B Convertible Preferred Stock. Three Hundred Seventy-Five
Thousand (375,000) shares of preferred stock having a par value of
$.05 per share, designated Series B Convertible Preferred Stock and
having the following preferences and limitations:
1. Dividends. Holders of Series B Convertible Preferred Stock
shall not be entitled to any dividends.
2. Voting Rights. Except as required by law, Holders of Series
B Convertible Preferred Stock shall have no voting power
whatsoever and shall not be entitled to notice of any meeting of
the stockholders of the Corporation.
3. Liquidation. In the event of any liquidation, voluntary or
involuntary, the holders of Series B Convertible Preferred Stock
shall be entitled to be paid the consideration they paid for
their shares on a pari passu basis with the Series A Preferred
Stock before any amount shall be paid to the holders of the
common stock.
4. Conversion Rights. The holders of Series B Convertible
Preferred Stock shall have the right to convert their shares
into shares of the Corporation's Common Stock, par value $0.05,
as follows:
(a) Right to Convert. Each share of the Series B
Convertible Preferred Stock shall be convertible, at the
option of the holder thereof, at any time after the date
that is one (1) year from the date of the issuance of the
Series B Convertible Preferred Stock (the "Purchase
Date"), at the office of the Company or the Company's
transfer agent, into such number of fully paid and non-
assessable shares of Common Stock as is determined by
dividing the original Series B Convertible Preferred Stock
issue price by the Conversion Price applicable to such
share, determined as provided below, in effect on the date
the certificate of the Series B Convertible Preferred
Stock is surrendered for conversion. The initial
Conversion Price for the Series B Convertible Preferred
Stock shall be as set forth in subsection 4(c), below.
(b) Mechanics of Conversion. Before any holder of shares
of Series B Convertible Preferred Stock shall be entitled
to convert the same into shares of Common Stock, he shall
surrender the certificate or certificates representing the
Series B Convertible Preferred Stock, duly endorsed, by
delivering the certificate or certificates to the
Company's principal office or the Company's transfer agent
for the Series B Convertible Preferred Stock, and shall
give written notice to the Company's Investor Relations
Department at its principal office, of the election to
convert the Series B Convertible Preferred Stock and shall
state therein the name or names in which the certificate
or certificates for shares of Common Stock are to be
issued. The Company shall, as soon as practicable
thereafter, issue and deliver to such holder, or to the
nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to
which such holder shall be entitled as described above.
Such conversion shall be deemed to have been made
immediately prior to the close of business on the
date of such surrender of the shares of Series B
Convertible Preferred Stock to be converted, and the
person or persons entitled to receive the shares of Common
Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such shares of
Common Stock as of such date. If the conversion is in
connection with an underwritten offering of securities
registered pursuant to the Securities Act of 1933, as
amended (the "1933 Act"), the conversion may, at the
option of any holder surrendering shares of Series B
Convertible Preferred Stock for conversion, be conditioned
upon the closing with the underwriters of the sale of
securities pursuant to such offering, in which event the
person or persons entitled to receive the Common Stock
upon conversion of the Series B Convertible Preferred
Stock shall not be deemed to have converted such Series B
Convertible Preferred Stock until immediately prior to the
closing of such sale of securities.
(c) Conversion Price Adjustments of Series B Convertible
Preferred Stock for Certain Dilutive Issuances Splits and
Combinations. The Conversion Price of the Series B
Convertible Preferred Stock shall initially equal the
issuance price per share of the Series B Convertible
Preferred Stock, and shall be subject to adjustment from
time to time as follows:
(i) (A) If the Company shall issue, after the
Purchase Date, any Additional Stock (as
defined below) without consideration or for a
consideration per share less than the
Conversion Price in effect immediately prior
to the issuance of such Additional Stock, the
Conversion Price shall be adjusted to a price
equal to the price paid per share for such
Additional Stock.
(B) In the case of the issuance of Common
Stock for cash, the consideration shall be
deemed to be the amount of cash paid therefor
before deducting any reasonable discounts,
commissions or other expenses allowed, paid or
incurred by the Company for any underwriting
or otherwise in connection with the issuance
and sale thereof.
(C) In the case of the issuance of the Common
Stock for a consideration in whole or in part
other than cash, the consideration other than
cash shall be deemed to be the fair value
thereof as determined by the Board of
Directors of the Company irrespective of any
accounting treatment.
(D) In the case of the issuance (whether
before, on or after the applicable Purchase
Date) of options to purchase or rights to
subscribe for Common Stock, securities by
their terms convertible into or exchangeable
for Common Stock or options to purchase or
rights to subscribe for such convertible or
exchangeable securities, the following
provisions shall apply for all purposes of
this subsection 4(c)(i) and subsection
4(c)(ii):
(1) The aggregate maximum number of
shares of Common Stock deliverable upon
exercise (assuming the satisfaction of
any conditions to exercisability,
including without limitation, the
passage of time, but without taking into
account potential antidilution
adjustments) of such options
to purchase or rights to subscribe for
Common Stock shall be deemed to have
been issued at the time such Options or
rights were issued and for a
consideration equal to the consideration
(determined in the manner provided in
subsections 4(c)(i)(B) and (c)(i)(C)),
if any, received by the corporation upon
the issuance of such options or rights
plus the minimum exercise price provided
in such options or rights (without
taking into account potential
antidilution adjustments) for the Common
Stock covered thereby.
(2) The aggregate maximum number of
shares of Common Stock deliverable upon
conversion of or in exchange (assuming
the satisfaction of any conditions to
convertibility or exchangeability,
including, without limitation, the
passage of time, but without taking into
account potential antidilution
adjustments) for any such convertible or
exchangeable securities or upon the
exercise of options to purchase or
rights to subscribe for such convertible
or exchangeable securities and
subsequent conversion or exchange
thereof shall be deemed to have
been issued at the time such securities
were issued or such options or rights
were issued and for a consideration
equal to the consideration, if any,
received by the corporation for any such
securities and related options or rights
(excluding any cash received on account
of accrued interest or accrued
dividends), plus the minimum additional
consideration, if any, to be received by
the corporation (without taking into
account potential antidilution
adjustments) upon the conversion or
exchange of such securities or the
exercise of any related options or
rights (the consideration in each case
to be determined in the manner provided
in subsections 4(c)(i)(B) and (c)(i)(C))
(3) In the event of any change in the
number of shares of Common Stock
deliverable or in the consideration
payable to this corporation upon
exercise of such options or rights or
upon conversion of or in exchange for
such convertible or exchangeable
securities, including, but not limited
to, a change resulting from the
antidilution provisions thereof, the
Conversion Price of the Series B
Convertible Preferred Stock, to
the extent in any way affected by or
computed using such options, rights or
securities, shall be recomputed to
reflect such change, but no further
adjustment shall be made for the actual
issuance of Common Stock or any payment
of such consideration upon the exercise
of any such options or rights or the
conversion or exchange of such
securities.
(4) Upon the expiration of any such
options or rights, the termination of
any such rights to convert or exchange
or the expiration of any options or
rights related to such convertible or
exchangeable securities, the Conversion
Price of the Series B Convertible
Preferred Stock, to the extent in any
way affected by or computed using such
options, rights or securities or options
or rights related to such securities,
shall be recomputed to reflect the
issuance of only the number of shares of
Common Stock (and convertible or
exchangeable securities which remain in
effect) actually issued upon the
exercise of such options or rights, upon
the conversion or exchange of such
securities or upon the exercise of the
options or rights related to such
securities.
(5) The number of shares of Common
Stock deemed issued and the
consideration deemed paid therefor
pursuant to subsections 4(c)(i)(D)(1)
and (2) shall be appropriately adjusted
to reflect any change, termination or
expiration of the type described in
either subsection 4(c)(i)(D)(3) or (4).
(ii) "Additional Stock" shall mean any shares of
Common Stock issued (or deemed to have been issued
pursuant to subsection 4(c)(i)(D)) by this
corporation after the Purchase Date other than
(A) Common Stock issued pursuant to a
transaction described in subsection 4(c)(iii)
hereof,
(B) shares of Common Stock issuable or issued
to employees, officers, consultants, directors
or vendors (if in transactions with primarily
nonfinancing purposes) of this corporation
directly or pursuant to a stock option plan or
restricted stock plan approved by the
shareholders and Board of Directors of this
corporation
(iii) In the event the corporation should at any
time or from time to time after the Purchase Date
fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common
Stock or the determination of holders of Common
Stock entitled to receive a dividend or other
distribution payable in additional shares of Common
Stock or other securities or rights convertible
into, or entitling the holder thereof to receive
directly or indirectly, additional shares of Common
Stock (hereinafter referred to as "Common Stock
Equivalents") without payment of any consideration
by such holder for the additional shares of Common
Stock or the Common Stock Equivalents (including the
additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such
record date (or the date of such dividend
distribution, split or subdivision if no
record date is fixed), the Conversion Price of the
Series B Convertible Preferred Stock shall be
appropriately decreased so that the number of shares
of Common Stock issuable on conversion of each share
of such series shall be increased in proportion to
such increase of the aggregate of shares of Common
Stock outstanding and those issuable with respect to
such Common Stock Equivalents with the number of
shares issuable with respect to Common Stock
Equivalents determined from time to time in the
manner provided for deemed issuances in subsection
4(c)(i)(D).
(iv) If the number of shares of Common Stock
outstanding at any time after the Purchase Date is
decreased by a combination of the outstanding shares
of Common Stock, then, following the record date of
such combination, the Conversion Price for the
Series B Convertible Preferred Stock shall be
appropriately increased so that the number of shares
of Common Stock issuable on conversion of each share
of such series shall be decreased in proportion to
such decrease in outstanding shares.
(d) Notice. In case at any time the Company shall
propose:
(i) to pay any dividend or make any distribution on
shares of Common Stock in shares of Common Stock or
make any other distribution (other than regularly
scheduled cash dividends which are not in a greater
amount per share than the most recent such cash
dividend) to all holders of Common Stock; or
(ii) to issue any rights, warrants, or other
securities to all holders of Common Stock entitling
them to purchase any additional shares of Common
Stock or any other rights, warrants, or other
securities; or
(iii) to effect any reclassification or change of
outstanding shares of Common Stock, or any
consolidation, merger, sale, lease, or conveyance of
property; or
(iv) to effect any liquidation, dissolution, or
winding-up of the Company; or
(v) to take any other action which would cause an
adjustment to the Conversion Price; then, and in any
one or more of such cases, the Company shall give
written notice thereof, by registered mail, postage
prepaid, to the Holder at his then-current address,
mailed at least 15 days prior to (i) the date as of
which the holders of record of shares of Common
Stock to be entitled to receive any such dividend,
distribution, rights, warrants, or other securities
are to be determined, (ii) the date on which any
such reclassification, change of outstanding shares
of Common Stock, consolidation, merger, sale, lease,
conveyance of property, liquidation, dissolution, or
winding-up is expected to become effective, and the
date as of which it is expected that holders of
record of shares of Common Stock shall be entitled
to exchange their shares for securities or other
property, if any, deliverable upon such
reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of
property, liquidation, dissolution, or winding-up,
or (iii) the date of such action which would require
an adjustment to the Conversion Price.
C. Undesignated Preferred Stock. Six Hundred Twenty-Four Thousand
Nine Hundred Ten (624,910) shares of preferred stock having a par value of
$.05 per share and having such preferences, limitations and relative rights
as determined from time to time by the Board of Directors. The Board of
Directors is hereby expressly granted authority to divide these shares of
preferred stock into series and to fix and determine before the issuance
thereof the number of shares and the relative rights and preferences of any
series so established.
D. Common Stock. Twenty million (20,000,000) shares of common stock
having a par value of $.05 per share.
ARTICLE V
PROCESS AGENT
The Secretary of State is designated as agent of the corporation upon
whom process against it may be served. The post office address to which the
Secretary of State shall mail a copy of any process against the corporation
served upon him is 2236 Shelburne Road, P.O. Box 965, Shelburne, Vermont
05482.
ARTICLE VI
DIRECTOR LIABILITY AND INDEMNIFICATION
No director of the corporation shall be personally liable to the
corporation or its shareholders for damages for any breach of duty in such
capacity; provided, however, that this provision shall not eliminate or
limit the liability of any director:
(a) For acts or omissions in bad faith or which involved intentional
misconduct or a knowing violation of law, as established by a judgment
or other final adjudication;
(b) For any transaction from which the director derived in fact a
financial profit or other advantage to which he or she was not legally
entitled, as established by a judgment or other final adjudication;
(c) For any violation of Section 719 of the Business Corporation Law,
as established by a judgment or other final adjudication; or
(d) For any act or omission occurring prior to the corporation's
adoption of this provision.
6. This restatement of the Certificate of Incorporation as previously
amended and as amended above was authorized by the Corporation's Board
of Directors, as of June 27, 1996, pursuant to Section 807 of the
Business Corporation Law.
IN WITNESS WHEREOF the undersigned, being the Chairman of the Board,
Chief Executive Officer and Secretary of the Corporation, affirm that the
statements made herein are true under the penalties of perjury.
/s/ FRED MARKS
-----------------------------------------
Fred Marks, Chairman of the Board
/s/ R. PATRICK BURNS
-----------------------------------------
R. Patrick Burns, Chief Executive Officer
/s/ SPENCER C. PUTNAM
-----------------------------------------
Spencer C. Putnam, Secretary