EXHIBIT 3.3
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF
SERIES A CUMULATIVE PREFERRED STOCK
OF
NBI, INC.
A DELAWARE CORPORATION
(Pursuant to Section 151 of the General Corporation
Law of the State of Delaware)
NBI, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), hereby certifies
that, pursuant to the authority contained in Article Fourth of its Certificate
of Incorporation, and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware, its Board of Directors has
adopted the following resolution creating a series of its Preferred Stock
designated as Series A Cumulative Preferred Stock:
RESOLVED, that a series of the class of authorized Preferred Stock of the
Corporation be, and 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:
BE IT RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation by the Certificate of Incorporation, the Board of
Directors does hereby provide for the issue of a series of Preferred Stock,
$.01 par value per share, of the Corporation, to be designated "Series A
Cumulative Preferred Stock" (hereinafter referred to as the "Series A
Preferred Stock"), consisting of 2,000,000 shares, and to the extent that the
voting powers, designations, preferences, limitations, restrictions and
relative rights of the Series A Preferred Stock are not stated and expressed
in the Certificate of Incorporation, does hereby fix and herein state and
express such voting powers, designations, preferences, limitations,
restrictions and relative rights as follows (all terms used herein which are
defined in the Certificate of Incorporation shall be deemed to have the
meanings provided therein):
1. DESIGNATION AND AMOUNT. THE SHARES OF SUCH SERIES SHALL BE
DESIGNATED AS "SERIES A CUMULATIVE PREFERRED STOCK" AND THE NUMBER OF SHARES
CONSTITUTING SUCH SERIES SHALL BE 2,000,000. SUCH NUMBER OF SHARES MAY BE
DECREASED BY RESOLUTION OF THE BOARD OF DIRECTORS; PROVIDED, THAT NO DECREASE
SHALL REDUCE THE NUMBER OF SHARES OF SERIES A PREFERRED STOCK TO A NUMBER LESS
THAN THE NUMBER OF SHARES OF SERIES A PREFERRED STOCK THEN OUTSTANDING OR
RESERVED FOR ISSUANCE.
2. DIVIDENDS.
(a) Payment of Dividends. The holders of Series A Preferred Stock
shall be entitled to receive, out of the assets of the Corporation legally
available for distribution to holders of the Corporation's Series A Preferred
Stock, whether such assets are capital, surplus, or earnings (hereinafter
called the "Available Funds"), cumulative dividends from the date of original
issue, accruing semi-annually, commencing June 30, 1999, and each December 31
and June 30 thereafter, at the annual rate per share of either (a) $1.00 in
cash, or (b) .11 shares of Series A Preferred Stock. The method of payment of
dividends shall be selected by the holder of each share of Series A Preferred
Stock, and may be changed annually by the holder thereof in accordance with
the provisions of Section 2(c) hereof. Dividends will be paid when and as
declared by the Board of Directors. The Corporation will not issue any
fractional shares of Series A Preferred Stock in payment of dividends, but
will register the amount of fractional shares that each holder is entitled to
receive until the aggregate value of such fractional interests equals one
whole share, which will be issued with the next payment of dividends. Any
fractional share interests held on the date of liquidation of the Corporation
or redemption of Series A Preferred Stock by the Corporation will be paid in
cash by the Corporation to the holders thereof pro rata at the same rate as
the redemption price or liquidation preference for whole shares. To the
extent that insufficient funds are available to pay all dividends accrued as
of each accrual date, dividends will be paid first pro rata to all holders who
have elected to receive dividends payable in additional shares of Series A
Preferred Stock until all such dividends accrued have been paid, and then pro
rata to all holders who have elected to receive dividends payable in cash. If
all shares of Series A Preferred Stock have not been redeemed by December 31,
2004, the dividend rate will thereafter increase to an annual rate per share
of either (a) $1.10 in cash, or (b) .12 additional shares of Preferred Stock,
with the method of payment selected at the option of the holder.
(b) Restrictions on Dividends. Notwithstanding anything to the
contrary contained in Section 2(a) of this Certificate of Designation, so long
as any shares of Series A Preferred Stock shall be outstanding, the
Corporation shall not, without the prior approval of the holders of at least
fifty (50%) of the outstanding shares of Series A Preferred Stock, (i) declare
or pay a dividend on, (ii) make any distribution to the holders of, or (iii)
repurchase, redeem or make provisions for the purchase or redemption (whether
directly or through a subsidiary) of any class or series of stock of the
Corporation ranking junior to the Series A Preferred Stock. In addition, so
long as there exists any accrued and unpaid dividends on any shares of Series
A Preferred Stock, the Corporation shall not declare or pay any dividends to
the holders of Common Stock of the Corporation.
(c) Election of Dividend Payment Method. In order to exercise the
holder's option to receive either cash or stock in payment of dividends on the
Series
A Preferred Stock, each holder of Series A Preferred Stock will receive
a form for election of method of payment, together with a copy of the
Corporation's most recent Annual Report on Form 10-KSB, as filed with the
Securities and Exchange Commission, and any other infor-ma-tion that the
Corporation determines material in connection with the holder's election. In
order to make a change in the holder's payment status, the holder will be
required to execute and return the election form to the Corporation within 30
days after the date the election form is sent by the Corporation to the
holder. If the holder does not return the form requesting a change in payment
status, the holder will be deemed to elect to retain the same payment method
last chosen by the holder until the next date that the payment status may be
changed. In the event that the Corporation is unable to issue additional
shares of Series A Preferred Stock because it has not kept the registration
statement for such shares effective under the Securities Act of 1933, as
amended, or because it has not obtained or maintained the registration or
qualification of shares of Series A Preferred Stock in one or more of the
states in which such shares are to be issued, the Corporation will be required
to accrue dividends in cash on the Series A Preferred Stock affected thereby.
(d) Right to Vote Upon Default in Payment of Dividends. Upon a
default in payment of dividends by the Corporation for eight quarterly
dividends, whether consecutive or not, the holders of shares of Series A
Preferred Stock shall have the right to vote upon and elect two directors of
the Corporation. For this purpose, each share of Series A Preferred Stock
will have one vote per share, and the candidates for election by the holders
of the Series A Preferred Stock who receive the highest number of votes of
Series A Preferred Stock will be elected.
3. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) Liquidation Preference. In the event of any liquidation,
dissolution or winding up of the Corporation, or the sale, conveyance, lease,
exchange or transfer of all or substantially all the property or assets of the
Corporation, whether voluntary or involuntary ("Liquidation"), the holders of
each share of Series A Preferred Stock shall be entitled to receive out of the
Available Funds, before any sums shall be paid or any assets distributed among
the holders of shares of Common Stock and any other class of stock of the
Corporation ranking junior to the Series A Preferred Stock, an amount or value
(such amount or value as described immediately below is hereinafter called the
"Series A Preference Price") equal to $10 per share plus all accrued and
unpaid dividends through the date of distribution. IF the Available Funds
shall be insufficient to permit the payment in full to all holders of the
Series A Preferred Stock the full amounts to which they shall be entitled by
reason of such Liquidation of the Corporation, then there shall be paid to the
holders of the Series A Preferred Stock in connection with such Liquidation of
the Corporation, an amount equal to the product derived by multiplying the
amount of Available Funds times a fraction, the numerator of which shall be
the full amount to
which the holders of the Series A Preferred Stock shall be
entitled by reason of such Liquidation of the Corporation and the denominator
of which shall be the total amount which would have been distributed by reason
of such Liquidation of the Corporation with respect to the Series A Preferred
Stock then outstanding had the Corporation possessed sufficient assets to pay
the maximum amount which the holders of all such stock would be entitled to
receive in connection with such Liquidation of the Corporation.
The holder of any shares of Series A Preferred Stock shall not
be entitled to receive any payment of the full balance owed for such shares
under this Section 3 until such holder shall cause to be delivered to the
Corporation (i) the certificate(s) representing such shares of Series A
Preferred Stock (or an affidavit of lost certificate and such other
documentation or assurances as are required by applicable law, in a form
reasonably acceptable to the Corporation) and (ii) transfer instrument(s)
satisfactory to the Corporation and sufficient to transfer such shares of
Series A Preferred Stock to the Corporation free of any adverse interest. No
interest shall accrue on any payment upon Liquidation after the due date
thereof.
After the Series A Preference Price shall have been paid in
full to the holders of the Series A Preferred Stock, or funds necessary for
such payment shall have been set aside by the Corporation in trust for the
account of holders of the Series A Preferred Stock and available for such
payment, the remaining assets of the Corporation available for distribution to
stockholders shall be distributed among the holders of Common Stock and any
other class of stock of the Corporation ranking junior to the Series A
Preferred Stock, and the holders of shares of the Series A Preferred Stock
shall not be entitled to any further participation in any distribution of
assets by the Corporation.
(b) Property. Whenever the distribution provided for in this
Section 3 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 Corporation.
4. REDEMPTION.
(a) Optional Redemption. The Corporation may at any time after
issuance, redeem any or all shares of the Series A Preferred Stock, pro rata
among the holders of the Series A Preferred Stock, by giving notice to such
holders of the date set for redemption (the "Redemption Date").
(b) Redemption Price. The redemption price for the Series A
Preferred Stock shall be the amount determined by reference to the following
schedule, plus any dividends in arrears on the Series A Preferred Stock to be
redeemed (the "Redemption Price"): if redeemed during the 12 month period
beginning January 1 and ending December 31:
Year Redemption Price
1999 $11.00
2000 10.80
2001 10.60
2002 10.40
2003 10.20
2004 and thereafter 10.00
(c) Partial Redemption. Any partial redemption shall be selected
by lot or pro rata among the holders of the Series A Preferred Stock according
to their respective ownership of Series A Preferred Stock, or in some other
equitable manner determined by the Board of Directors of the Corporation in
its sole discretion.
(d) Termination of Dividend Rights. From and after the close of
business on any Redemption Date, unless there shall have been a default in
payment of the applicable Redemption Price, all rights of the holders of the
shares to be redeemed on such date as holders of such shares (except the right
to receive the applicable Redemption Price plus accrued dividends without
interest upon surrender of their certificate or certificates) shall cease with
respect to such shares and such shares shall not thereafter be transferred on
the books of the Corporation or be deemed to be outstanding for any purpose
whatsoever.
(e) Notice and Manner of Redemption.
(1) AT LEAST THIRTY (30) BUT NO MORE THAN SIXTY (60) DAYS
PRIOR TO THE DATE FOR ANY REDEMPTION OF SERIES A PREFERRED STOCK, WRITTEN
NOTICE SHALL BE MAILED, POSTAGE PREPAID, TO EACH HOLDER OF RECORD (AT THE
CLOSE OF BUSINESS ON THE BUSINESS DAY NEXT PRECEDING THE DAY ON WHICH NOTICE
IS GIVEN) OF THE SERIES A PREFERRED STOCK, AT THE ADDRESS LAST SHOWN ON THE
RECORDS OF THE CORPORATION FOR SUCH HOLDER OR GIVEN BY THE HOLDER TO THE
CORPORATION FOR THE PURPOSE OF NOTICE, NOTIFYING SUCH HOLDER OF THE REDEMPTION
TO BE EFFECTED, SPECIFYING THE REDEMPTION DATE, THE REDEMPTION PRICE AND THE
PLACE AT WHICH PAYMENT MAY BE OBTAINED, AND CALLING UPON SUCH HOLDER TO
SURRENDER TO THE CORPORATION, IN THE MANNER AND AT THE PLACE DESIGNATED, HIS
OR HER CERTIFICATE OR CERTIFICATES REPRESENTING THE SHARES TO BE REDEEMED (A
"REDEMPTION NOTICE"). ON OR AFTER EACH REDEMPTION DATE, EACH HOLDER OF SERIES
A PREFERRED STOCK TO BE REDEEMED SHALL SURRENDER TO THE CORPORATION THE
CERTIFICATE OR CERTIFICATES REPRESENTING SUCH SHARES, IN THE MANNER AND AT THE
PLACE DESIGNATED IN THE REDEMPTION NOTICE, AND THEREUPON THE REDEMPTION PRICE
OF SUCH SHARES SHALL BE
PAYABLE TO THE ORDER OF THE PERSON WHOSE NAME APPEARS
ON SUCH CERTIFICATE OR CERTIFICATES AS THE OWNER THEREOF AND EACH SURRENDERED
CERTIFICATE SHALL BE CANCELLED.
(2) ON OR PRIOR TO ANY REDEMPTION DATE, THE CORPORATION SHALL
DEPOSIT THE APPLICABLE REDEMPTION PRICE FOR ALL OUTSTANDING SHARES OF SERIES A
PREFERRED STOCK TO BE REDEEMED WITH A BANK OR TRUST COMPANY HAVING AGGREGATE
CAPITAL AND SURPLUS IN EXCESS OF $50,000,000 AS A TRUST FUND FOR THE BENEFIT
OF THE RESPECTIVE HOLDERS OF SUCH SHARES. SIMULTANEOUSLY, THE CORPORATION
SHALL DEPOSIT IRREVOCABLE INSTRUCTION AND AUTHORITY TO SUCH BANK OR TRUST
COMPANY TO PAY, ON AND AFTER THE REDEMPTION DATE, THE REDEMPTION PRICE TO THE
HOLDERS OF THE SERIES A PREFERRED STOCK TO BE REDEEMED UPON SURRENDER OF THEIR
CERTIFICATES THEREFOR. THE BALANCE OF ANY MONIES DEPOSITED BY THE CORPORATION
PURSUANT TO THIS PARAGRAPH REMAINING UNCLAIMED AT THE EXPIRATION OF ONE YEAR
FOLLOWING THE APPLICABLE REDEMPTION DATE SHALL THEREAFTER BE RETURNED TO THE
CORPORATION, PROVIDED THAT THE STOCKHOLDER TO WHOM SUCH MONIES WOULD BE
PAYABLE HEREUNDER SHALL BE ENTITLED, UPON PROOF OF ITS OWNERSHIP OF THE STOCK
TO BE REDEEMED AND PAYMENT OF ANY BOND REQUESTED BY THE CORPORATION, TO
RECEIVE SUCH MONIES BUT WITHOUT INTEREST FROM THE REDEMPTION DATE.
5. CANCELLATION AND RE-DESIGNATION OF PREFERRED STOCK ON
REDEMPTION.
(a) Upon redemption of the Series A Preferred Stock pursuant to the
terms of Section 4 hereof, all certificates of Series A Preferred Stock
surrendered for redemption shall be appropriately cancelled on the books of
the Corporation, and all of the shares so redeemed represented by all
certificates of the Series A Preferred Stock shall be deemed to be cancelled.
(b) Upon such redemption, the existing designation, rights and
preferences of the Series A Preferred Stock so redeemed shall terminate and
such shares shall become undesignated Preferred Stock.
6. SERIES A PREFERRED STOCK VOTING RIGHTS. EXCEPT AS OTHERWISE
PROVIDED IN SECTIONS 2(D) AND 10 OF THIS CERTIFICATE OF DESIGNATION OR AS
REQUIRED BY LAW, THE SHARES OF SERIES A PREFERRED STOCK SHALL BE NON-VOTING
SHARES.
7. REISSUANCE OF THE SERIES A PREFERRED STOCK. ANY SHARES OF THE
SERIES A PREFERRED STOCK ACQUIRED BY THE CORPORATION BY REASON OF REDEMPTION,
PURCHASE, CONVER-SION OR OTHERWISE MAY BE REISSUED AT ANY TIME BY THE
CORPORATION IN ITS DISCRETION.
8. COMMON STOCK. ALL RIGHTS ACCRUING TO THE OUT-STANDING SHARES
OF THE CORPORATION NOT EXPRESSLY PROVIDED FOR TO THE CONTRARY HEREIN SHALL BE
VESTED IN THE COMMON STOCK. NO SHARE OR SHARES OF THE SERIES A PREFERRED
STOCK SHALL BE CONVERTIBLE INTO COMMON STOCK.
9. NO IMPAIRMENT. THE CORPORATION SHALL 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 OF
PERFORMANCE OF ANY OF THE TERMS IN THIS CERTIFICATE OF DESIGNATION TO BE
OBSERVED OR PERFORMED BY THE CORPORATION.
10. AMENDMENTS AND CHANGES. AS LONG AS ANY OF THE SERIES A PREFERRED
STOCK SHALL BE ISSUED AND OUTSTANDING, THE CORPORATION SHALL NOT, WITHOUT
FIRST OBTAINING THE APPROVAL (BY VOTE OR WRITTEN CONSENT, AS PROVIDED BY LAW)
OF THE HOLDERS OF GREATER THAN 50% OF THE SHARES OF SERIES A PREFERRED STOCK
THEN OUTSTANDING, AMEND OR REPEAL ANY PROVISION OF, OR ADD ANY PROVISION TO
THE CORPORATION'S CERTIFICATE OF INCORPORATION (INCLUDING THIS CERTIFICATE OF
DESIGNATION) OR BYLAWS WHICH WOULD ALTER OR CHANGE THE PREFERENCES, RIGHTS,
PRIVILEGES, OR POWERS OF, OR THE RESTRICTIONS PROVIDED FOR THE BENEFIT OF, THE
SERIES A PREFERRED STOCK, OR WHICH WOULD AUTHORIZE THE ISSUANCE OF ANY CLASS
OF SHARES HAVING SENIORITY OVER THE SERIES A PREFERRED STOCK.
IN WITNESS WHEREOF, the undersigned has caused this Certificate of
Designation, Preferences and Rights of Series A Cumulative Preferred Stock to
be duly executed by its President and attested to by its Secretary on this
______ day of October, 1998.
NBI, Inc.
By:_________________________________
Jay H. Lustig, President
ATTEST:
__________________________
Marjorie A. Cogan, Secretary