Exhibit 1
CERTIFICATE OF INCORPORATION OF
VIRCO MFG. CORPORATION
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FIRST:
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The name of the Corporation is
Virco Mfg. Corporation
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SECOND: The address of the registered office of the Corporation in the State of Delaware is
100 West Tenth Street, in the City of Wilmington, County of New Castle, and the name of its
registered agent at that 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 General Corporation Law of Delaware.
FOURTH: The Corporation shall be authorized to issue two classes of stock to be designated,
respectively, Common Stock and Preferred Stock; the total number of shares which the Corporation
shall have authority to issue is thirteen million (13,000,000); the total number of shares of
Common Stock shall be ten million (10,000,000) and each such share shall have a par value of one
cent ($.01); and the total number of shares of Preferred Stock shall be three million (3,000,000)
and each such share shall have a par value of one cent ($.01).
Shares of Preferred Stock may be issued from time to time in one or more series. The Board of
Directors is hereby authorized to fix the voting rights, designations, powers, preferences and the
relative, participating, optional or other rights, if any, and the qualifications, limitations or
restrictions thereof, of any wholly unissued series of Preferred Stock, and to fix the number of
shares constituting such series, and to increase or decrease the number of shares of any such
series (but not below the number of shares thereof then outstanding).
FIFTH: In furtherance and not in limitation of the powers conferred by statute, the Board of
Directors is expressly authorized to make, repeal, alter, amend and rescind the bylaws of the
Corporation.
SIXTH: Bylaws shall not be made, repealed, altered, amended or rescinded by the stockholders
of the Corporation except by the vote of the holders of not less than seventy-five percent (75%) of
the total voting power of all outstanding shares of voting stock of the Corporation.
SEVENTH: The number of directors of the Corporation shall be fixed from time to time by a
bylaw or amendment thereof duly adopted by the Board of Directors, or by the stockholders acting in
accordance with Article SIXTH hereof.
EIGHTH: The Board of Directors shall be and is divided into three classes, Class I, Class II
and Class III. Such classes shall be as nearly equal in number of directors as possible. Each
director shall serve for a term ending on the date of the third annual meeting following the annual
meeting at which such director was elected; provided, however, that the directors first elected to
Class I shall serve for a term ending on the date of the annual meeting next following
the end of the calendar year 1984, the directors first elected to Class II shall serve for a
term ending on the date of the second annual meeting next following the end of the calendar year
1984, and the directors first elected to Class III shall serve for a term ending on the date of the
third annual meeting next following the end of the calendar year 1984. The foregoing
notwithstanding, each director shall serve until his successor shall have been duly elected and
qualified, unless he shall resign, become disqualified, disabled or shall otherwise be removed.
At each annual election, the directors chosen to succeed those whose terms then expire shall
be of the same class as the directors they succeed, unless, by reason of any intervening changes in
the authorized number of directors, the Board shall designate one or more directorships whose term
then expires as directorships of another class in order more nearly to achieve equality of number
of directors among the classes.
Notwithstanding the rule that the three classes shall be as nearly equal in number of
directors as possible, in the event of any change in the authorized number of directors each
director then continuing to serve as such shall nevertheless continue as a director of the class of
which he is a member until the expiration of his current term, or his prior death, resignation or
removal. If any newly created directorship may, consistently with the rule that the three classes
shall be as nearly equal in number of directors as possible, be allocated to one of two or more
classes, the Board shall allocate it to that of the available classes whose term of office is due
to expire at the earliest date following such allocation.
NINTH: During any period when the holders of any Preferred Stock or any one or more series
thereof, voting as a class, shall be entitled to elect a specified number of directors, by reason
of dividend arrearages or other provisions giving them the right to do so, then and during such
time as such right continues (1) the then otherwise authorized number of directors shall be
increased by such specified number of directors, and the holders of such Preferred Stock or such
series thereof, voting as a class, shall be entitled to elect the additional directors so provided
for, pursuant to the provisions of such Preferred Stock or series; (2) each such additional
director shall serve for such term, and have such voting powers, as shall be stated in the
provisions pertaining to such Preferred Stock or series; and (3) whenever the holders of any such
Preferred Stock or series thereof are divested of such rights to elect a specified number of
directors, voting as a class, pursuant to the provisions of such Preferred Stock or series, the
terms of office of all directors elected by the holders of such Preferred Stock or series, voting
as a class pursuant to such provisions, or elected to fill any vacancies resulting from the death,
resignation or removal of directors so elected by the holders of such Preferred Stock or series,
shall forthwith terminate and the authorized number of directors shall be reduced accordingly.
TENTH: Elections of directors need not be by written ballot unless the bylaws of the
Corporation shall so provide.
ELEVENTH: No action shall be taken by the stockholders except at an annual or special meeting
of stockholders.
TWELFTH: At all elections of directors of the Corporation, a holder of any class or series of
stock then entitled to vote in such election shall be entitled to as many votes as shall equal the
number of votes which (except for this Article as to cumulative voting) such holder
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would be entitled to cast for the election of directors with respect to such holders shares
of stock multiplied by the number of directors to be elected in the election in which such holders
class or series of stock is entitled to vote, and each stockholder may cast all of such votes for a
single nominee for director or may distribute them among the number to be voted for, or for any two
or more of them as such holder may see fit.
THIRTEENTH: Special meetings of the stockholders of the Corporation for any purpose or
purposes may be called at any time by the Board of Directors or by a committee of the Board of
Directors which has been duly designated by the Board of Directors and whose powers and authority,
as provided in a resolution of the Board of Directors or in the bylaws of the Corporation, include
the power to call such meetings, but such special meetings may not be called by any other person or
persons; provided, however, that if and to the extent that any special meeting of stockholders may
be called by any other person or persons specified in any provisions of the Certificate of
Incorporation or any amendment thereto or any certificate filed under Section 151(g) of the
Delaware General Corporation Law (or its successor statute as in effect from time to time
hereunder), then such special meeting may also be called by the person or persons, in the manner,
at the times and for the purposes so specified.
FOURTEENTH: The affirmative vote of the holders of not less than seventy-five percent (75%) of
the total voting power of all outstanding shares of voting stock of the Corporation shall be
required for the approval of any proposal that (1) the Corporation merge or consolidate with any
other corporation or any affiliate of such other corporation if such other corporation and its
affiliates singly or in the aggregate are directly or indirectly the beneficial owners of five
percent (5%) or more of the outstanding shares of the Common Stock of the Corporation (such other
corporation and any affiliate thereof being herein referred to as a Related Corporation), or that
(2) the Corporation sell or exchange all or substantially all of its assets or business to or with
such Related Corporation, or that (3) the Corporation issue or deliver any stock or other
securities of its issue in exchange or payment for any properties or assets of such Related
Corporation or securities issued by such Related Corporation, or in a merger of any affiliate of
the Corporation with or into such Related Corporation or any of its affiliates, and to effect such
transaction, the approval of stockholders of the Corporation is required by law or by any agreement
between the Corporation and any national securities exchange; provided, however, that the foregoing
shall not apply to any such merger, consolidation, sale or exchange, or issuance or delivery of
stock or other securities which was approved by resolution of the Board of Directors of the
Corporation prior to the acquisition of the beneficial ownership of five percent (5%) or more of
the outstanding Common Stock of the Corporation by such Related Corporation and its affiliates, nor
shall it apply to any such transaction solely between the Corporation and another corporation,
fifty percent (50%) or more of the voting stock of which is owned by the Corporation. For the
purposes hereof, an affiliate is any person (including a corporation, partnership, trust, estate
or individual) who directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person specified; control means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a person, whether through the ownership of voting securities, by contract, or
otherwise; and in computing the percentage of outstanding Common Stock beneficially owned by any
person, the shares outstanding and the shares owned shall be determined as of the record date fixed
to determine the stockholders entitled to vote or express consent with respect to such proposal.
The stockholder
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vote, if any, required for mergers, consolidations, sales or exchanges of assets or issuances
of stock or other securities not expressly provided for in this Article, shall be such as may be
required by applicable law.
FIFTEENTH: To the maximum extent permissible under Section 262 of the Delaware General
Corporation Law, the stockholders of the Corporation shall be entitled to the statutory appraisal
rights provided therein, notwithstanding any exception otherwise provided therein, with respect to
any business combination involving the Corporation and any Related Corporation which requires the
affirmative vote of the holders of not less than seventy-five percent (75%) of the total voting
power of all outstanding shares of voting stock of the Corporation pursuant to the provisions of
Article FOURTEENTH.
SIXTEENTH: The provisions set forth in this Article SIXTEENTH and in Articles SIXTH (dealing
with the alteration of bylaws by stockholders), EIGHTH (dealing with the classified board),
ELEVENTH (dealing with the prohibition against stockholder action without meetings), TWELFTH
(dealing with cumulative voting), FOURTEENTH (dealing with the seventy-five percent (75%) vote of
stockholders required for certain mergers and other transactions) and FIFTEENTH (dealing with
appraisal rights of stockholders) may not be repealed or amended in any respect unless such repeal
or amendment is approved by the affirmative vote of the holders of not less than seventy-five
percent (75%) of the total voting power of all outstanding shares of voting stock of the
Corporation.
SEVENTEENTH: The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed
by statute, and all rights conferred on stockholders herein are granted subject to this
reservation. Notwithstanding the foregoing, the provisions set forth in Articles SIXTH, EIGHTH,
ELEVENTH, TWELFTH, FOURTEENTH, FIFTEENTH and SIXTEENTH may not be repealed or amended in any
respect unless such repeal or amendment is approved as specified in Article SIXTEENTH of this
Certificate of Incorporation.
EIGHTEENTH: The name and mailing address of the incorporator of the Corporation is:
James R. Braam
Virco Mfg. Corporation
15134 South Vermont Avenue
Los Angeles, California
THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a
corporation to do business both within and without the State of Delaware, and in pursuance of the
Delaware General Corporation Law, does make and file this Certificate.
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/s/ James R. Braam
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James R. Braam
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VIRCO MFG. CORPORATION
VIRCO MFG. CORPORATION, a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a duly called meeting of the Board of Directors of VIRCO MFG. CORPORATION a
resolution was duly adopted setting forth a proposed amendment to the Certificate of Incorporation
of said corporation, declaring said amendment to be advisable and calling a meeting of the
stockholders of said corporation for consideration thereof. The resolution setting forth the
proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation be amended to add
thereto Article NINETEENTH, which shall read, in full, as follows:
NINETEENTH: To the fullest extent permitted by
the Delaware General Corporation Law as the same
exists or may hereafter be amended, a director of the
Corporation shall not be liable to the Corporation or
its stockholders for monetary damages for breach of
fiduciary duty as director. No repeal or
modification of the foregoing Article NINETEENTH by
the stockholders shall adversely affect any right or
protection of a director of the Corporation existing
by virtue of this Article NINETEENTH at the time of
such repeal or modification.
SECOND: That thereafter, pursuant to a resolution of its Board of Directors, an Annual Meeting
of the Stockholders of said corporation was duly called and held, upon notice in accordance with
Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary
number of shares as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said VIRCO MFG. CORPORATION has caused this Certificate to be signed by
Robert A. Virtue, its President, and attested by James R. Braam, its Secretary, this 8th day of
June, 1993.
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VIRCO MFG. CORPORATION
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By:
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/s/ Robert A. Virtue
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Robert A. Virtue, President
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ATTEST:
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By:
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/s/ James R. Braam
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James R. Braam, Secretary
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VIRCO MFG. CORPORATION
Virco Mfg. Corporation (the Corporation), a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, does hereby certify that:
FIRST: The Board of Directors of the Corporation adopted a resolution setting forth and
declaring a proposed amendment to the Certificate of Incorporation of the Corporation to be
advisable and calling for consideration thereof by the stockholders of the Corporation. The
resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of the Corporation be amended by changing
Paragraph FOURTH thereof so that, as amended, said Paragraph shall be and read as follows:
FOURTH: The Corporation shall be authorized to issue two classes of
stock to be designated, respectively, Common Stock and Preferred Stock; the
total number of shares which the Corporation shall have authority to issue
is twenty-eight million (28,000,000); the total number of shares of Common
Stock shall be twenty-five million (25,000,000) and each such share shall
have a par value of one cent ($.01); and the total number of shares of
Preferred Stock shall be three million (3,000,000) and each such share shall
have a par value of one cent ($.01).
Shares of Preferred Stock may be issued from time to time in one or
more series. The Board of Directors is hereby authorized to fix the voting
rights, designations, powers, preferences and the relative, participating,
optional or other rights, if any, and the qualifications, limitations or
restrictions thereof, of any wholly unissued series of Preferred Stock, and
to fix the number of shares constituting such series, and to increase or
decrease the number of shares of any such series (but not below the number
of shares thereof then outstanding).
SECOND: The stockholders of the Corporation, at a special meeting held on June 23, 1998 in
Torrance, California, considered and voted in favor of the amendment.
THIRD: Said amendment was duly adopted in accordance with the provisions of Section 242 of
the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by
Robert A. Virtue, as its Chairman of the Board and Chief Executive Officer, and attested by James
R. Braam, as its Secretary on this 22nd day of July, 1998.
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VIRCO MFG. CORPORATION
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By:
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/s/ Robert A. Virtue
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Robert A. Virtue
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Chairman of the Board and
Chief Executive Officer
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ATTEST:
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/s/ James R. Braam
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James R. Braam
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Secretary
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Exhibit 2
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING
CUMULATIVE PREFERRED STOCK
$.01 Par Value
of
VIRCO MFG. CORPORATION
Pursuant to Section 151 of the
General Corporation
Law of the State of Delaware
Vireo Mfg. Corporation (the Corporation), a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, does hereby certify:
That pursuant to the authority conferred upon the Board of Directors by the Certificate of
Incorporation of the Corporation, the Board of Directors on October 15, 1996, adopted the following
resolution creating a series of 200,000 (two hundred thousand) shares of Preferred Stock, par value
$0.01 per share, designated as Series A Junior Participating Cumulative Preferred Stock;
RESOLVED, that pursuant to the authority 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 be, and it hereby is, created, and that the designation and amount thereof and
the voting powers, preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions thereof, are as
follows:
Section 1.
Designation and Amount
. The shares of such series shall be designated as
Series A Junior Participating Cumulative Preferred Stock, par value $0.01 per share (the Series A
Preferred Stock), and the number of shares constituting such series shall be 200,000 (two hundred
thousand).
Section 2.
Dividends and Distributions
.
(a) The holders of shares of Series A Preferred Stock, in preference to the holders of shares
of Common Stock, par value $.01 per share, of the Corporation (the Common Stock) and of any other
junior stock of the Corporation that may be outstanding, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the tenth day of January, April, July and October in each year (each
such date being referred to herein as a Quarterly Dividend Payment Date), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (i) $.25 per share ($1.00 per annum), or (ii) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock, or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event that the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise) into
a greater or lesser number of shares of Common Stock, then and in each such event, the amount to
which the holder of each share of Series A Preferred Stock was entitled immediately prior to such
event under clause (ii) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock outstanding immediately
after such event, and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock
as provided in paragraph (a) of this Section 2 immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in shares of Compton Stock);
provided, however, that in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $.25 per share ($1.00 per annum) on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such
shares of Series A Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which cases such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall cumulate
but shall not bear interest. Dividends paid on the shares of Series A Preferred
Stock in an amount less than the total amount of such dividends at the time accrued and
payable on such
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shares shall be allocated pro rata on a share-by-share basis among all such shares
at the tine outstanding. The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
Section 3.
Voting Rights
. The holders of shares of Series A Preferred Stock shall
have the following voting rights:
(a) Each share of Series A Preferred Stock shall entitle the holder thereof to 100 votes (and
each one one-hundredth of a share of Series A Preferred Stock shall entitle the holder thereof to
one vote) on all matters submitted to a vote of the stockholders of the Corporation. In the event
that the Corporation shall at any time declare or pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock, then and in each such
event, the number of votes per share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of Common Stock outstanding immediately
after such event, and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided in the Certificate of Incorporation of the Corporation or
herein or by law, the holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of
the Corporation.
(c) In addition, the holders of shares of Series A Preferred Stock shall have the following
special voting rights.
(i) In the event that at any time dividends on Series A Preferred Stock, whenever
accrued and whether or not consecutive, shall not have been paid or declared and a sum
sufficient for the payment thereof set aside, in an amount equivalent to six quarterly
dividends on all shares of Series A Preferred Stock at the time outstanding, then and in
each such event, the holders of shares of Series A Preferred Stock and each other series of
preferred stock now or hereafter issued that shall be accorded such class voting right by
the Board of Directors and that shall have the right to elect one director (or, in the event
any such other series is entitled to a greater number of directors, such number of
directors, which shall be cumulative with and not in addition to the director provided for
herein, such director or directors which the holders of Series A Preferred Stock and any
such other series of preferred stock are entitled to elect being hereinafter referred to as
Special Directors) as the result of a prior or subsequent default in payment of dividends
on such series (each such other series being hereinafter called Other Series of Preferred
Stock), voting separately as a class without regard to series, shall be entitled to elect
the Special Director at the next annual meeting of stockholders of the Corporation, in
addition to the directors to be elected by the holders of all shares of the Corporation
entitled to vote for the election of directors, and the holder of all shares (including the Series A
Preferred
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Stock) otherwise entitled to vote for directors, voting separately as a class,
shall be entitled to elect the remaining members of the Board of Directors, provided that
the Series A Preferred Stock and each Other Series of Preferred Stock, voting as a class,
shall not have the right to elect more than one Special Director (in addition to any Special
Director to which the holders of any Other Series of Preferred Stock are then entitled).
Such special voting right of the holders of shares of Series A Preferred Stock may be
exercised until all dividends in default on the Series A Preferred Stock shall have been
paid in full or declared and funds sufficient therefor set aside, and when so paid or
provided for, such special voting right of the holders of shares of Series A Preferred Stock
shall cease, but subject always to the same provisions for the vesting of such special
voting rights in the event of any such future dividend default or defaults.
(ii) At any time after such special voting rights shall have so vested in the holders
of shares of Series A Preferred Stock, the Secretary of the Corporation may, and upon the
written request of the holders of record of 10% or more in number of the shares of Series A
Preferred Stock and each Other Series of Preferred Stock then outstanding addressed to the
Secretary at the principal executive office of the Corporation shall, call a special meeting
of the holders of shares of Preferred Stock so entitled to vote, for the election of the
Special Directors to be elected by them as herein provided, to be held within 60 days after
such call and at the place and upon the notice provided by law and in the Bylaws for the
holding of meetings of stockholders; provided, however, that the Secretary shall not be
required to call such special meeting in the case of any such request received less than 90
days before the date fixed for any annual meeting of stockholders, and if in such case such
special meeting is not called or held, the holders of shares of Preferred Stock so entitled
to vote shall be entitled to exercise the special voting rights provided in this paragraph
at such annual meeting. If any such special meeting required to be called as above provided
shall not be called by the Secretary within 30 days after receipt of any such request, then
the holders of record of 10% or more in number of the shares of Series A Preferred Stock and
each Other Series of Preferred Stock then outstanding may designate in writing one of their
number to call such meeting, and the person so designated may, at the expense of the
Corporation, call such meeting to be held at the place and upon the notice given by such
person, and for that sole purpose shall have access to the stock books of the Corporation.
No such special meeting and no adjournment thereof shall be held on a date later than 60
days before the annual meeting of stockholders. If, at any meeting so called or at any
annual meeting held while the holders of shares of Series A Preferred Stock have the special
voting rights provided for in this paragraph, the holders of not less than 40% of the
aggregate voting power of Series A Preferred Stock and each Other Series of Preferred Stock
then outstanding are present in person or by proxy, which percentage shall be sufficient to
constitute a quorum for the election of additional directors as herein provided, the then
authorized number of directors of the Corporation shall be increased by the number of
Special Directors to be elected, as of the time of such special meeting or the time of the
first such annual meeting held while such holders have special voting rights and such quorum
is present, and the holders of shares of Series A Preferred Stock and each Other Series of
Preferred Stock, voting as a class, shall be entitled to elect the Special Director or
Directors so provided for. If the directors of the Corporation are then divided into classes under provisions of the
Certificate of Incorporation of the Corporation or the Bylaws, the Special Director or
Directors shall belong to each class of
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directors in which a vacancy is created as a result
of such increase in the authorized number of directors. If the foregoing expansion of the
size of the Board of Directors shall not be valid under applicable law, then the holders of
shares of Series A Preferred Stock and of each Other Series of Preferred Stock, voting as a
class, shall be entitled, at the meeting of stockholders at which they would otherwise have
voted, to elect a Special Director or Directors to fill any then existing vacancies on the
Board of Directors, and shall additionally be entitled, at such meeting and each subsequent
meeting of stockholders at which directors are elected, to elect all of the directors then
being elected until by such class vote the appropriate number of Special Directors has been
so elected.
(iii) Upon the election at such meeting by the holders of shares of Series A Preferred
Stock and each Other Series of Preferred Stock, voting as a class, of the Special Director
or Directors they are entitled so to elect, the persons so elected, together with such
persons as may be directors or as may have been elected as directors by the holders of all
shares (including Series A Preferred Stock) otherwise entitled to vote for directors, shall
constitute the duly elected directors of the Corporation. Each Special Director so elected
by holders of shares of Series A Preferred Stock and each Other Series of Preferred Stock,
voting as a class, shall serve until the next annual meeting or until their respective
successors shall be elected and qualified, or if any such Special Director is a member of a
class of directors under provisions dividing the directors into classes, each such Special
Director shall serve until the annual meeting at which the term of office of such Special
Directors class shall expire or until such Special Directors successor shall be elected
and shall qualify, and at each subsequent meeting of stockholders at which the directorship
of any Special Director is up for election, said special class voting rights shall apply in
the reelection of such Special Director or in the election of such Special Directors
successor; provided, however, that whenever the holders of shares of Series A Preferred
Stock and each Other Series of Preferred Stock shall be divested of the special rights to
elect one or more Special Directors as above provided, the terms of office of all persons
elected as Special Directors, or elected to fill any vacancies resulting from the death,
resignation, or removal of Special Directors shall forthwith terminate (and the number of
directors shall be reduced accordingly).
(iv) If, at any time after a special meeting of stockholders or an annual meeting of
stockholders at which the holders of shares of Series A Preferred Stock and each Other
Series of Preferred Stock, voting as a class, have elected one or more Special Directors as
provided above, and while the holders of shares of Series A Preferred Stock and each Other
Series of Preferred Stock shall be entitled so to elect one or more Special Directors, the
number of Special Directors who have been so elected (or who by reason of one or more
resignations, deaths or removals have succeeded any Special Directors so elected) shall by
reason of resignation, death or removal be reduced the vacancy in the Special Directors may
be filled by any one or more remaining Special Director or Special Directors. In the event
that such election shall not occur within 30 days after such vacancy arises, or in the event
that there shall not be incumbent at least one
Special Director, the Secretary of the Corporation may, and upon the written request of
the holders of record of 10% or more in number of the shares of Series A Preferred Stock and
each Other Series of Preferred Stock then outstanding addressed to the Secretary at the
principal office of the Corporation shall, call a special meeting of the holders of shares of
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Series A Preferred Stock and each Other Series of Preferred Stock so entitled to vote,
for an election to fill such vacancy or vacancies, to be held within 60 days after such call
and at the place and upon the notice provided by law and in the Bylaws for the holding of
meetings of stockholders; provided, however, that the Secretary shall not be required to
call such special meeting in the case of any such request received less than 90 days before
the date fixed for any annual meeting of stockholders, and if in such case such special
meeting is not called, the holders of shares of Preferred Stock so entitled to vote shall be
entitled to fill such vacancy or vacancies at such annual meeting. If any such special
meeting required to be called as above provided shall not be called by the Secretary within
30 days after receipt of any such request, then the holders of record of 10% or more in
number of the shares of Series A Preferred Stock and each Other Series of Preferred Stock
then outstanding may designate in writing one of their number to call such meeting, and the
person so designated may, at the expense of the Corporation, call such meeting to be held at
the place and upon the notice above provided, and for that purpose shall have access to the
stock books of the Corporation; no such special meeting and no adjournment thereof shall be
held on a date later than 60 days before the annual meeting of stockholders.
(d) Nothing herein shall prevent the directors or stockholders from taking any action to
increase the number of authorized shares of Series A Preferred Stock, or increasing the number of
authorized shares of Preferred Stock of the same class as the Series A Preferred Stock or the
number of authorized shares of Common Stock, or changing the par value of the Common Stock or
Preferred Stock, or issuing options, warrants or rights to any class of stock of the Corporation as
authorized by the Certificate of Incorporation of the Corporation, as it may hereafter be amended.
(e) Except as set forth herein, holders of shares of Series A Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the extent they are
entitled to vote as set forth in the Certificate of Incorporation of the Corporation or herein or
by law) for taking any corporate action.
Section 4.
Certain Restrictions
.
(a) Whenever any dividends or other distributions payable on the Series A Preferred Stock as
provided in Section 2 hereof are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall
have been paid in full, the Corporation shall not, directly or indirectly:
(i) declare or pay dividends on, or make any other distributions with respect to, any
shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on, or make any other distributions with respect to, any
shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series A Preferred Stock, except dividends paid ratably on shares of
the Series A Preferred Stock and all such parity stock on which
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dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of any stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of Series A Preferred
Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except
in accordance with a purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration, directly or indirectly, any shares of stock of the Corporation
unless the Corporation could, under paragraph (a) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
Section 5.
Reacquired Shares
. Any shares of Series A Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of preferred stock, without designation as to series, and may be
reissued as part of any series of preferred stock created by resolution or resolutions of the Board
of Directors (including Series A Preferred Stock), subject to the conditions and restrictions on
issuance set forth herein.
Section 6.
Liquidation, Dissolution or Winding Up
. Upon any liquidation, dissolution
or winding up of the Corporation, no distribution shall be made to:
(a) the holders of shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of
shares of Series A Preferred Stock shall have received the greater of (i) $1.00 per share ($.001
per one one-hundredth of a share), plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment, or (ii) an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times
the aggregate amount to be distributed per share to holders of shares of Common Stock; or
(b) the holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions
made ratably on the Series A Preferred Stock and all other such parity stock in proportion to the
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total amounts to which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up.
In the event that the Corporation shall at any time declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise) into greater or lesser
number of shares of Common Stock, then and in each such event, the aggregate amount to which the
holder of each share of Series A Preferred Stock was entitled immediately prior to such event under
the proviso in clause (a) of the preceding sentence shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately
after such event, and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7.
Consolidation, Merger, etc.
In the event that the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or securities, cash and/or any other property,
or otherwise changed, then and in each such event, the shares of Series A Preferred Stock shall at
the same time be similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities,
cash and/or any other property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event that the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of Common Stock, then and
in each such event, the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock outstanding immediately
after such event, and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8.
No Redemption
. The shares of Series A Preferred Stock shall not be
redeemable. Notwithstanding the foregoing, the Corporation may acquire shares of Series A
Preferred Stock in any other manner permitted by law, the Certificate of Incorporation of the
Corporation or herein.
Section 9.
Rank
. Unless otherwise provided in the Certificate of Incorporation of the
Corporation or a Certificate of Designations relating to a subsequent series of preferred stock of
the Corporation, the Series A Preferred Stock shall rank junior to all other series of the
Corporations preferred stock as to the payment of dividends and the distribution of assets on
liquidation, dissolution or winding up, and senior to the Common Stock of the Corporation.
Section 10.
Amendment
. The Certificate of Incorporation of the Corporation shall not
be amended in any manner that would materially and adversely alter or change the powers,
preferences or special rights of the Series A Preferred Stock without the affirmative vote
of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single series.
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