Exhibit 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
SHARED TECHNOLOGIES INC.
INTRODUCTION. SHARED TECHNOLOGIES INC. was originally
incorporated under the name of Balcon, Inc. by Certificate of
Incorporation filed on September 23, 1987. By a Plan and
Agreement of Merger dated March 8, 1988, Balcon, Inc. merged with
Shared Technologies Inc., survived the merger, and changed its
name to Shared Technologies Inc. This restatement only restates
and integrates, and does not further amend, the provisions of the
Corporation's Restated Certificate of Incorporation as heretofore
amended or supplemented, and there is no discrepancy between the
provisions thereof and of this Restated Certificate of
Incorporation. This Restated Certificate of Incorporation was
duly adopted pursuant to Section 245 of the Delaware General
Corporation Law by the Board of Directors.
FIRST. The name of this corporation shall be:
SHARED TECHNOLOGIES INC.
SECOND. Its registered office in the State of Delaware is
to be located at 1013 Centre Road, in the City of Wilmington,
County of New Castle 19805, and its registered agent at such
address is CORPORATION SERVICE COMPANY.
THIRD. The purpose of the corporation shall be:
To engage in any lawful act or activity for which
corporations may be organized under the Delaware General
Corporation Law.
FOURTH. The total number of shares of all classes of stock
which the Corporation shall have authority to issue is (i)
20,000,000 shares of Common Stock, $.004 par value per share
("Common Stock"), and (ii) 10,000,000 shares of Preferred Stock,
$.01 par value per share.
A. Common Stock. Shares of Common Stock shall have the
following voting powers, rights and preferences:
1. Voting Rights. Except as otherwise required by Statute
or as otherwise provided in this Restated Certificate of
Incorporation, the holders of shares of Common Stock shall be
entitled to vote on all matters at all meetings of the
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stockholders of the Corporation, and shall be entitled to one
vote for each share of Common Stock entitled to vote at such
meeting, voting together, as one class, with the holders of any
shares of Preferred Stock who are entitled to vote, except to the
extent that a class vote for any class or series of stock is
required by statute.
2. Dividends. Subject to any preferential dividend rights
applicable to shares of Preferred Stock, the holders of shares of
Common Stock shall be entitled to receive such dividends as may
be declared by the Board of Directors.
3. Liquidation. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation, after distribution in full of the preferential
amounts to be distributed to the holders of shares of Preferred
Stock, the holders of shares of Common Stock shall be entitled to
receive all of the remaining assets of the Corporation available
for distribution to the holders of Common Stock, ratably in
proportion to the number of shares of Common Stock held by them.
B. Preferred Stock. Shares of Preferred Stock shall have
the following voting powers, rights and preferences.
Preferred Stock may be issued from time to time in one or
more series, each of such series to have such terms as stated or
expressed herein and in the resolution or resolutions providing
for the issue of such series adopted by the Board of Directors of
the Corporation as hereinafter provided. Any shares of any
series of Preferred Stock which may be redeemed, purchased or
acquired by the Corporation may be reissued as shares of the same
series or as shares of one or more other series of Preferred
Stock except as otherwise provided by law. Different series of
Preferred Stock shall not be construed to constitute different
classes of shares for the purpose of voting by classes unless
expressly provided.
Authority is hereby expressly granted to the Board of
Directors from time to time to issue the Preferred Stock in one
or more series, and in connection with the creation of any such
series, by resolution or resolutions providing for the issue of
the shares thereof, to determine and fix such voting powers, full
or limited, or no voting powers, and such designations,
preferences and relative participating, optional or other special
rights, and qualifications, limitations or restrictions thereof,
including without limitation dividend rights, conversion rights,
redemption privileges and liquidation preferences, as shall be
stated and expressed in such resolutions, all to the full extent
now or hereafter permitted by the Delaware General Corporation
Law. Without limiting the generality of the foregoing, the
resolutions providing for issuance of any series of Preferred
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Stock may provide that such series shall be superior or rank
equally or be junior to the Preferred Stock of any other series
to the extent permitted by law.
Designation of Series C Preferred Stock
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1. Designation; Rank. The series of Preferred Stock
designated and known as "Series C Preferred Stock" shall consist
of 5,000,000 shares, par value $.01 per share. Shares of the
Series C Preferred Stock shall, with respect to dividend rights
and rights on liquidation, winding up and dissolution, rank
senior and prior to the Common Stock, par value $.004 per share
(the "Common Stock") of the Corporation and to any other class or
series of capital stock of the Corporation hereafter issued (all
of such equity securities of the Corporation to which the Series
C Preferred Stock ranks prior, including all classes of Common
Stock, are at times collectively referred to herein as the
"Junior Securities").
2. Dividends.
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(a) The holders of the Series C Preferred Stock shall be
entitled to receive, out of any funds legally available therefor,
dividends in cash at the annual rate of $.32 per share (subject
to appropriate adjustment for stock splits, stock dividends,
combinations or other similar recapitalizations affecting such
shares), and no more, in equal quarterly payments in arrears on
March 31, June 30, September 30 and December 31 in each year
(each such date is referred to as a "Dividend Payment Date")
commencing on September 30, 1992, payable in preference and
priority to any payment of any cash dividend on Common Stock or
any other shares of capital stock of this Corporation. Such
dividends shall be paid to the holders of record at the close of
business on the date specified by the Board of Directors of the
Corporation at the time such dividend is declared. If the
Dividend Payment Date is not a business day, the Dividend Payment
Date shall be the next succeeding business day.
(b) Each of such quarterly dividends shall be fully
cumulative and shall accrue, whether or not earned or declared,
without interest, from the first day of the quarter in which such
dividend may be payable as herein provided, except that with
respect to the first quarterly dividend, such dividend shall
accrue from September 15, 1992.
(c) No dividends shall be declared or paid or set apart for
payment on the Junior Securities, or on the Preferred Stock of
any series ranking, as to dividends, junior to the Series C
Preferred Stock, for any period unless full cumulative dividends
have been or contemporaneously are declared and paid (or declared
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and a sum sufficient for the payment thereof set apart for such
payment) on the Series C Preferred Stock for all dividend payment
periods ending on or prior to the date of payment of such full
cumulative dividends. Unless full cumulative dividends on the
Series C Preferred Stock have been paid, no other distribution
shall be made upon the Junior Securities or upon any other such
series of Preferred Stock.
(d) In the event that the Corporation shall have
cumulative, accrued and unpaid dividends outstanding immediately
prior to, and in the event of a conversion of any shares of
Series C Preferred Stock as provided in Section 5 hereof, the
Corporation shall, at the option of the holder of such shares,
pay in cash to such holder the full amount of any such dividends
or allow such dividends to be converted into Common Stock in
accordance with, and pursuant to the terms specified in, Section
5 hereof, except that the Conversion Price (as that term is
defined in Section 5(a)) for such purpose shall be the then fair
market value of the Common Stock as determined by the Board of
Directors of the Corporation.
3. Liquidation, Dissolution or Winding Up.
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(a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the
holders of shares of Series C Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders, after and subject
to the payment in full of all amounts required to be distributed
to the holders of any other class or series of stock of the
Corporation ranking on liquidation prior and in preference to the
Series C Preferred Stock (collectively referred to as "Senior
Preferred Stock"), but before any payment shall be made to the
holders of any Junior Securities by reason of their ownership
thereof, an amount equal to $4 per share (subject to appropriate
adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting such
shares). If upon any such liquidation, dissolution or winding up
of the Corporation the remaining assets of the Corporation
available for distribution to its stockholders shall be
insufficient to pay the holders of shares of Series C Preferred
Stock the full amount to which they shall be entitled, the
holders of Series C Preferred Stock shall share ratably in any
distribution of the remaining assets and funds of the Corporation
in proportion to the respective amounts which would otherwise be
payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to such
shares were paid in full.
(b) After the payment of all preferential amounts required
to be paid to the holders of Senior Preferred Stock and Series C
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Preferred Stock upon the dissolution, liquidation or winding up
of the Corporation, the holders of shares of Junior Securities
then outstanding shall be entitled to receive the remaining
assets and funds of the Corporation available for distribution to
its stockholders.
(c) Written notice of such liquidation, dissolution or
winding up, stating a payment date and the place where said
payments shall be made, shall be given by mail, postage prepaid,
or by telex to non-U.S. residents, not less than 20 days prior to
the payment date stated therein, to the holders of record of the
Series C Preferred Stock, such notice to be addressed to each
such holder at its address as shown by the records of the
Corporation.
(d) Whenever the distribution provided for in this Section
3 shall be payable 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.
(e) For the purposes of this Section 3, neither the
voluntary sale, conveyance, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Corporation
nor the consolidation or merger of the Corporation with one or
more other corporations shall be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, unless such
voluntary sale, conveyance, exchange or transfer shall be in
connection with a plan of liquidation, dissolution or winding up
of the business of the Corporation.
4. Voting
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(a) Except as may be otherwise provided in these terms of
the Series C Preferred Stock or by law, the Series C Preferred
Stock shall not be entitled to vote.
(b) The Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Series C
Preferred Stock so as to affect adversely the Series C Preferred
Stock, without the written consent or affirmative vote of the
holders of a majority of the then outstanding shares of Series C
Preferred Stock, given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a class.
For this purpose, without limiting the generality of the
foregoing, the authorization or issuance of any series of Series
Preferred Stock with preference or priority over the Series C
Preferred Stock as to the right to receive either dividends or
amounts distributable upon liquidation, dissolution or winding up
of the Corporation shall be deemed to affect adversely the Series
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C Preferred Stock, and the authorization or issuance of any
series of Series Preferred Stock on a parity with Series C
Preferred Stock as to the right to receive either dividends or
amounts distributable upon liquidation, dissolution or winding up
of the Corporation shall not be deemed to affect adversely the
Series C Preferred Stock. The number of authorized shares of
Series C Preferred Stock may be increased or decreased (but not
below the number of shares then outstanding) by the affirmative
vote of the holders of a majority of the then outstanding shares
of the Common Stock, Series C Preferred Stock and all other
classes or series of stock of the Corporation entitled to vote
thereon, voting as a single class.
5. Optional Conversion. The holders of the Series C
Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):
(a) Right to Convert. Each share of Series C Preferred
Stock shall be convertible, at the option of the holder thereof,
at any time and from time to time, into such number of fully paid
and nonassessable shares of Common Stock as is determined by
dividing $4.00 by the Conversion Price (as defined below) in
effect at the time of conversion. The conversion price at which
shares of Common Stock shall be deliverable upon conversion of
Series C Preferred Stock without the payment of additional
consideration by the holder thereof (the "Conversion Price")
shall initially be $8.00. Such initial Conversion Price, and the
rate at which shares of Series C Preferred Stock may be converted
into shares of Common Stock, shall be subject to adjustment as
provided below.
In the event of a notice of redemption of any shares of
Series C Preferred Stock pursuant to Section 6 hereof, the
Conversion Rights of the shares designated for redemption shall
terminate at the close of business on the fifth full day
preceding the date fixed for redemption, unless the redemption
price is not paid when due, in which case the Conversion Rights
for such shares shall continue until such price is paid in full.
In the event of a liquidation of the Corporation, the Conversion
Rights shall terminate at the close of business on the first full
day preceding the date fixed for the payment of any amounts
distributable on liquidation to the holders of Series C Preferred
Stock.
(b) Fractional Shares. No fractional shares of Common
Stock shall be issued upon conversion of the Series C Preferred
Stock. In lieu of any fractional shares to which the holder
would otherwise be entitled, the Corporation shall pay cash equal
to such fraction multiplied by the then effective Conversion
Price.
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(c) Mechanics of Conversion.
(i) In order for a holder of Series C Preferred Stock
to convert shares of Series C Preferred Stock into shares of
Common Stock, such holder shall surrender the certificate or
certificates for such shares of Series C Preferred Stock at
the office of the transfer agent for the Series C Preferred
Stock (or at the principal office of the Corporation if the
Corporation serves as its own transfer agent), together with
written notice that such holder elects to convert all or any
number of the shares of the Series C Preferred Stock
represented by such certificate or certificates. Such
notice shall state such holder's name or the names of the
nominees in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued. If
required by the Corporation, certificates surrendered for
conversion shall be endorsed or accompanied by a written
instrument or instruments of transfer, in a form
satisfactory to the Corporation, duly executed by the
registered holder or his or its attorney duly authorized in
writing. The date of receipt of such certificates and
notice by the transfer agent (or by the Corporation if the
Corporation serves as its own transfer agent) shall be the
conversion date ("Conversion Date"). The Corporation shall,
as soon as practicable after the Conversion Date, issue and
deliver at such office to such holder of Series C Preferred
Stock, or to his or its nominees, a certificate or
certificates for the number of shares of Common Stock to
which such holder shall be entitled, together with cash in
lieu of any fraction of a share.
(ii) The Corporation shall at all times when the
Series C Preferred Stock shall be outstanding, reserve and
keep available out of its authorized but unissued stock, for
the purpose of effecting the conversion of the Series C
Preferred Stock, such number of its duly authorized shares
of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding Series C Preferred
Stock. Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par
value of the shares of Common Stock issuable upon conversion
of the Series C Preferred Stock, the Corporation will take
any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and nonassessable
shares of Common Stock at such adjusted Conversion Price.
(iii) Upon any such conversion, no adjustment to the
Conversion Price shall be made for any accrued and unpaid
dividends on the Series C Preferred Stock surrendered for
conversion or on the Common Stock delivered upon conversion.
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(iv) All shares of Series C Preferred Stock which
shall have been surrendered for conversion as herein
provided shall no longer be deemed to be outstanding and all
rights with respect to such shares, including the rights, if
any, to receive notices and to vote, shall immediately cease
and terminate on the Conversion Date, except only the right
of the holders thereof to receive shares of Common Stock in
exchange therefor and payment of any accrued and unpaid
dividends thereon. Any shares of Series C Preferred Stock
so converted shall be retired and canceled and shall not be
reissued, and the Corporation may from time to time take
such appropriate action as may be necessary to reduce the
authorized Series C Preferred Stock accordingly.
(d) Adjustments to Conversion Price for Diluting Issues:
(i) Special Definitions. For purposes of this
Subsection 5(d), the following definitions shall apply:
(A) "Option" shall mean rights, options or
warrants to subscribe for, purchase or otherwise acquire
Common Stock or Convertible Securities, excluding options
granted to employees or consultants of the Corporation
pursuant to an option plan adopted by the Board of Directors
(subject to appropriate adjustment for any stock dividend,
stock split, combination or other similar recapitalization
affecting such shares).
(B) "Original Issue Date" shall mean the date on
which a share of Series C Preferred Stock was first issued.
(C) "Convertible Securities" shall mean any
evidences of indebtedness, shares or other securities
directly or indirectly convertible into or exchangeable for
Common Stock.
(D) "Additional Shares of Common Stock" shall
mean all shares of Common Stock issued (or, pursuant to
Subsection 5(d)(iii) below, deemed to be issued) by the
Corporation after the Original Issue Date, other than shares
of Common Stock issued or issuable:
(I) upon conversion of shares of Series C
Preferred Stock outstanding on the Original Issue Date;
(II) as a dividend or distribution on Series
C Preferred Stock;
(III) by reason of a dividend, stock split,
split-up or other distribution on shares of Common
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Stock excluded from the definition of Additional Shares
of Common Stock by the foregoing clauses (I) and (II)
or this clause (III); or
(IV) upon the exercise of options excluded
from the definition of "Option" in Subsection
5(d)(i)(A).
(ii) No Adjustment of Conversion Price. No adjustment
in the number of shares of Common Stock into which the
Series C Preferred Stock is convertible shall be made by
adjustment in the applicable Conversion Price thereof: (a)
unless the consideration per share (determined pursuant to
Subsection 5(d)(v)) for an Additional Share of Common Stock
issued or deemed to be issued by the Corporation is less
than the applicable Conversion Price in effect on the date
of, and immediately prior to, the issue of such Additional
Shares, or (b) if prior to such issuance, the Corporation
receives written notice from the holders of at least a
majority of the then outstanding shares of Series C
Preferred Stock agreeing that no such adjustment shall be
made as the result of the issuance of Additional Shares of
Common Stock.
(iii) Issue of Securities Deemed Issue of Additional
Shares of Common Stock. If the Corporation at any time or
from time to time after the Original Issue Date shall issue
any Options or Convertible Securities or shall fix a record
date for the determination of holders of any class of
securities entitled to receive any such Options or
Convertible Securities, then the maximum number of shares of
Common Stock (as set forth in the instrument relating
thereto without regard to any provision contained therein
for a subsequent adjustment of such number) issuable upon
the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange
of such Convertible Securities, shall be deemed to be
Additional Shares of Common Stock issued as of the time of
such issue or, in case such a record date shall have been
fixed, as of the close of business on such record date,
provided that Additional Shares of Common Stock shall not be
deemed to have been issued unless the consideration per
share (determined pursuant to Subsection 5(d)(v) hereof) of
such Additional Shares of Common Stock would be less than
the applicable Conversion Price in effect on the date of and
immediately prior to such issue, or such record date, as the
case may be, and provided further that in any such case in
which Additional Shares of Common Stock are deemed to be
issued:
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(A) no further adjustment in the Conversion Price
shall be made upon the subsequent issue of Convertible
Securities or shares of Common Stock upon the exercise of
such Options or conversion or exchange of such Convertible
Securities;
(B) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise,
for any increase in the consideration payable to the
Corporation, or decrease in the number of shares of Common
Stock issuable, upon the exercise, conversion or exchange
thereof, the Conversion Price computed upon the original
issue thereof (or upon the occurrence of a record date with
respect thereto), and any subsequent adjustments based
thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or
decrease insofar as it affects such Options or the rights of
conversion or exchange under such Convertible Securities;
(C) no radjustment pursuant to clause (B) above
shall have the effect of increasing the Conversion Price to
an amount which exceeds the lower of (i) the Conversion
Price on the original adjustment date, or (ii) the
Conversion Price that would have resulted from any issuance
of Additional Shares of Common Stock between the original
adjustment date and such readjustment date;
(D) upon the expiration or termination of any
unexercised Option, the Conversion Price shall not be
readjusted, but the Additional Shares of Common Stock deemed
issued as the result of the original issue of such Option
shall not be deemed issued for the purposes of any
subsequent adjustment of the Conversion Price; and
(E) in the event of any change in the number of
shares of Common Stock issuable upon the exercise,
conversion or exchange of any Option or Convertible
Security, including, but not limited to, a change resulting
from the antidilution provisions thereof, the Conversion
Price then in effect shall forthwith be readjusted to such
Conversion Price as would have been obtained had the
adjustment which was made upon the issuance of such Option
or Convertible Security not exercised or converted prior to
such change been made upon the basis of such change, but no
further adjustment shall be made for the actual issuance of
Common Stock upon the exercise or conversion of any such
Option or Convertible Security.
(iv) Adjustment of Conversion Price Upon Issuance of
Additional Shares of Common Stock. In the event the
Corporation shall at any time after the Original Issue Date
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issue Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued
pursuant to Subsection 5(d)(iii), but excluding shares
issued as a dividend or distribution as provided in
Subsection 5(f) or upon a stock split or combination as
provided in Subsection 5(e)), without consideration or for a
consideration per share less than the applicable Conversion
Price in effect on the date of and immediately prior to such
issue, then, and in such event, such Conversion Price shall
be reduced, concurrently with such issue, to a price
(calculated to the nearest cent) determined by multiplying
such Conversion Price by a fraction, (A) the numerator of
which shall be (1) the number of shares of Common Stock
outstanding immediately prior to such issue plus (2) the
number of shares of Common Stock which the aggregate
consideration received by the Corporation for the total
number of Additional Shares of Common Stock so issued would
purchase at such Conversion Price; and (B) the denominator
of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number
of such Additional Shares of Common Stock so issued;
provided that, for the purpose of this Subsection 5(d)(iv),
all shares of Common Stock issuable upon conversion of
shares of Series C Preferred Stock outstanding immediately
prior to such issue shall be deemed to be outstanding, and
immediately after any Additional Shares of Common Stock are
deemed issued pursuant to Subsection 5(d)(iii) (other than
shares excluded from the definition of "Additional Shares of
Common Stock" by virtue of clause (IV) of Subsection
5(d)(i)(D)), such Additional Shares of Common Stock shall be
deemed to be outstanding.
Notwithstanding the foregoing, the applicable
Conversion Price shall not be so reduced at such time if the
amount of such reduction would be an amount less than $.05,
but any such amount shall be carried forward and reduction
with respect thereto made at the time of and together with
any subsequent reduction which, together with such amount
and any other amount or amounts so carried forward, shall
aggregate $.05 or more.
(v) Determination of Consideration. For purposes of
this Subsection 5(d), the consideration received by the
Corporation for the issue of any Additional Shares of Common
Stock shall be computed as follows:
(A) Cash and Property: Such consideration shall:
(I) insofar as it consists of cash, be
computed at the aggregate of cash received by the
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Corporation, excluding amounts paid or payable for
accrued interest or accrued dividends;
(II) insofar as it consists of property other
than cash, be computed at the fair market value thereof
at the time of such issue, as determined in good faith
by the Board of Directors; and
(III) in the event Additional Shares of
Common Stock are issued together with other shares or
securities or other assets of the Corporation for
consideration which covers both, be the proportion of
such consideration so received, computed as provided in
clauses (I) and (II) above, as determined in good faith
by the Board of Directors.
(B) Options and Convertible Securities. The
consideration per share received by the Corporation for
Additional Shares of Common Stock deemed to have been issued
pursuant to Subsection 5(d)(iii) relating to Options and
Convertible Securities shall be determined by dividing (x)
the total amount, if any, received or receivable by the
Corporation as consideration for the issue of such Options
or Convertible Securities, plus the minimum aggregate amount
of additional consideration (as set forth in the instruments
relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such consideration)
payable to the Corporation upon the exercise of such Options
or the conversion or exchange of such Convertible
Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such
Convertible Securities, by (y) the maximum number of shares
of Common Stock (as set forth in the instruments relating
thereto, without regard to any provision contained therein
for a subsequent adjustment of such number) issuable upon
the exercise of such Options or the conversion or exchange
of such Convertible Securities.
(e) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the
Original Issue Date for a series of Preferred Stock effect a
subdivision of the outstanding Common Stock, the Conversion Price
then in effect immediately before that subdivision shall be
proportionately decreased. If the Corporation shall at any time
or from time to time after the Original Issue Date for a series
of the Preferred Stock combine the outstanding shares of Common
Stock, the Conversion Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment
under this paragraph shall become effective at the close of
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business on the date the subdivision or combination becomes
effective.
(f) Adjustment for Certain Dividends and Distributions. In
the event the Corporation at any time, or from time to time after
the Original Issue Date for a series of Preferred Stock shall
make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other
distribution payable in additional shares of Common Stock, then
and in each such event the Conversion Price for such series of
Preferred Stock then in effect shall be decreased as of the time
of such issuance or, in the event such a record date shall have
been fixed, as of the close of business on such record date, by
multiplying the Conversion Price for such series of Preferred
Stock then in effect by a fraction:
(i) the numerator of which shall be the total number
of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business
on such record date, and
(ii) the denominator of which shall be the total number
of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business
on such record date plus the number of shares of Common
Stock issuable in payment of such dividend or distribution;
provided however, if such record date shall have been fixed
and such dividend is not fully paid or if such distribution
is not fully made on the date fixed therefor, the Conversion
Price for such series of Preferred Stock shall be recomputed
accordingly as of the close of business on such record date
and thereafter the Conversion Price for such series of
Preferred Stock shall be adjusted pursuant to this paragraph
as of the time of actual payment of such dividends or
distributions.
(g) Adjustments for Other Dividends and Distributions. In
the event the Corporation at any time or from time to time after
the Original Issue Date for a series of Preferred Stock shall
make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other
distribution payable in securities of the Corporation other than
shares of Common Stock, then and in each such event provision
shall be made so that the holders of such series of Preferred
Stock shall receive upon conversion thereof in addition to the
number of shares of Common Stock receivable thereupon, the amount
of securities of the Corporation that they would have received
had their Preferred Stock been converted into Common Stock on the
date of such event and had thereafter, during the period from the
date of such event to and including the conversion date, retained
such securities receivable by them as aforesaid during such
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period giving application to all adjustments called for during
such period, under this paragraph with respect to the rights of
the holders of the Preferred Stock.
(h) Adjustment for Reclassification, Exchange or
Substitution. If the Common Stock issuable upon the conversion
of the Preferred Stock shall be changed into the same or a
different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification, or otherwise
(other than a subdivision or combination of shares or stock
dividend provided for above, or a reorganization, merger,
consolidation, or sale of assets provided for below), then and in
each such event the holder of each such share of Preferred Stock
shall have the right thereafter to convert such share into the
kind and amount of shares of stock and other securities and
property receivable upon such reorganization, reclassification,
or other change, by holders of the number of shares of Common
Stock into which such shares of Preferred Stock might have been
converted immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as
provided herein.
(i) Adjustment for Merger or Reorganization, etc. In case
of any consolidation or merger of the Corporation with or into
another corporation or the sale of all or substantially all of
the assets of the Corporation to another corporation (other than
a consolidation, merger or sale which is treated as a liquidation
pursuant to Subsection 3(a)), each share of Series C Preferred
Stock shall thereafter be convertible into the kind and amount of
shares of stock or other securities or property to which a holder
of the number of shares of Common Stock of the Corporation
deliverable upon conversion of such Series C Preferred Stock
would have been entitled upon such consolidation, merger or sale;
and, in such case, appropriate adjustment (as determined in good
faith by the Board of Directors) shall be made in the application
of the provisions in this Section 5 set forth with respect to the
rights and interest thereafter of the holders of the Series C
Preferred Stock, to the end that the provisions set forth in this
Section 5 (including provisions with respect to changes in and
other adjustments of the Conversion Price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property thereafter deliverable upon the
conversion of the Series C Preferred Stock.
(j) No Impairment. The Corporation will not, by amendment
of its Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the
42
carrying out of all the provisions of this Section 5 and in the
taking of all such action as may be necessary or appropriate in
order to protect the Conversion Rights of the holders of the
Series C Preferred Stock against impairment.
(k) Certificate as to Adjustments. Upon the occurrence of
each adjustment or readjustment of the Conversion Price pursuant
to this Section 5, the Corporation, at its expense, shall
promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each holder of Series C
Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon
the written request at any time of any holder of Series C
Preferred Stock, furnish or cause to be furnished to such holder
a similar certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price then in effect, and
(iii) the number of shares of Common Stock and the amount, if
any, of other property which then would be received upon the
conversion of Series C Preferred Stock.
(1) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend (or any
other distribution) on its Common Stock payable in Common
Stock or other securities of the Corporation;
(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock
of the Corporation (other than a subdivision or combination
of its outstanding shares of Common Stock or a stock
dividend or stock distribution thereon), or of any
consolidation or merger of the Corporation into or with
another corporation, or of the sale of all or substantially
all of the assets of the Corporation; or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed at its principal
office or at the office of the transfer agent of the Series C
Preferred Stock, and shall cause to be mailed to the holders of
the Series C Preferred Stock at their last addresses as shown on
the records of the Corporation or such transfer agent, at least
ten days prior to the record date specified in (A) below or
twenty days before the date specified in (B) below, a notice
stating
43
(A) the record date of such dividend,
distribution, subdivision or combination, or, if a record is
not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend,
distribution, subdivision or combination are to be
determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution, liquidation or
winding up is expected to become effective, and the date as
of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution
or winding up.
6. Optional Redemption.
(a) At any time and from time to time after June 30, 1993,
the Corporation may, at the option of its Board of Directors,
redeem the Series C Preferred Stock, in whole or in part, by
paying $6 per share (subject to appropriate adjustment for stock
splits, stock dividends, combinations or other similar
recapitalization affecting such shares) in cash for each share of
Series C Preferred Stock then redeemed (hereinafter referred to
as the "Redemption Price").
(b) In the event of any redemption of only a part of the
then outstanding Series C Preferred Stock, the Corporation shall
effect such redemption pro rata among the holders thereof based
on the number of shares of Series C Preferred Stock held by such
holders on the date of the Redemption Notice (as defined below).
(c) `At least 30 days prior to the date fixed for any
redemption of Series C Preferred Stock (hereinafter referred to
as the "Redemption Date"), written notice shall be mailed, by
first class or registered mail, postage prepaid, to each holder
of record of Series C Preferred Stock to be redeemed, at his or
its address last shown on the records of the transfer agent of
the Series C Preferred Stock (or the records of the Corporation,
if it serves as its own transfer agent), notifying such holder of
the election of the Corporation to redeem such shares, specifying
the Redemption Date and the date on which such holder's
Conversion Rights (pursuant to Section 5 hereof) as to such
shares terminate and calling upon such holder to surrender to the
Corporation, in the manner and at the place designated, his, her
or its certificate or certificates representing the shares to be
redeemed (such notice is hereinafter referred to as the
"Redemption Notice"). On or prior to the Redemption Date, each
holder of Series C Preferred Stock to be redeemed shall surrender
his, her or its certificate or certificates representing such
44
shares to the Corporation, 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 canceled.
In the event less than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares. From and after the
Redemption Date, unless there shall has been a default in payment
of the Redemption Price, all rights of the holders of the Series
C Preferred Stock designated for redemption in the Redemption
Notice as holders of Series C Preferred Stock of the Corporation
(except the right to receive the Redemption Price 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.
(d) Subject to the provisions hereof, the Board of
Directors of the Corporation shall have authority to prescribe
the manner in which Series C Preferred Stock shall be redeemed
from time to time. Any shares of Series C Preferred Stock so
redeemed shall permanently be retired, shall no longer be deemed
outstanding and shall not under any circumstances be reissued,
and the Corporation may from time to time take such appropriate
action as may be necessary to reduce the authorized Series C
Preferred Stock accordingly. Nothing herein contained shall
prevent or restrict the purchase by the Corporation, from time to
time either at public or private sale, of the whole or any part
of the Series C Preferred Stock at such price or prices as the
Corporation may determine, subject to the provisions of
applicable law.
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45
Designation of Series D Preferred Stock
---------------------------------------
1. Designation; Rank. The series of Preferred Stock
designated and known as "Series D Preferred Stock" shall consist
of 1,000,000 shares, par value $.01 per share. Shares of the
Series D Preferred Stock shall, with respect to dividend rights
and rights on liquidation, winding up and dissolution, rank
senior and prior to the Common Stock, par value $.004 per share
(the "Common Stock") of the Corporation and junior to the Series
C Preferred Stock.
2. Dividends.
---------
(a) The holders of the Series D Preferred Stock shall be
entitled to receive, when declared by the Directors out of any
funds legally available therefor, dividends in cash at the annual
rate of $0.2375 per share (subject to appropriate adjustment for
stock splits, stock dividends, combinations or other similar
recapitalizations affecting such shares), and no more, in equal
quarterly payments in arrears on March 31, June 30, September 30
and December 31 in each year (each such date is referred to as a
"Dividend Payment Date") commencing on March 31, 1994, payable in
preference and priority to any payment of any cash dividend on
Common Stock and junior in preference and priority to any payment
of any cash dividend to the holders of Series C Preferred Stock.
Such dividends shall be paid to the holders of record at the
close of business on the date specified by the Board of Directors
of the Corporation at the time such dividend is declared;
provided, however, that the amount payable to shareholders for
the first such dividend due on March 31, 1994, shall be pro-rated
on a daily basis from the date of issue. If the Dividend Payment
Date is not a business day, the Dividend Payment Date shall be
the next succeeding business day.
(b) Each of such quarterly dividends shall be fully
cumulative and shall accrue, whether or not earned or declared,
without interest, from the date of issue of the Series D
Preferred Stock.
(c) No dividends shall be declared or paid or set apart for
payment on the Common Stock, or on the Preferred Stock of any
series ranking, as to dividends, junior to the Series D Preferred
Stock, for any period unless full cumulative dividends have been
or contemporaneously are declared and paid (or declared and a sum
sufficient for the payment thereof set apart for such payment) on
the Series D Preferred Stock for all dividend payment periods
ending on or prior to the date of payment of such full cumulative
dividends. (The Common Stock and any such series of Preferred
Stock are referred to hereinafter as "Junior Securities".)
Unless full cumulative dividends on the Series D Preferred Stock
46
have been paid, no other distribution shall be made upon or in
respect of the Junior Securities.
(d) In the event that the Corporation shall have cumulative,
accrued and unpaid dividends outstanding immediately prior to,
and in the event of a conversion of any shares of Series D
Preferred Stock as provided in Section 5 hereof, the Corporation
shall, at its option, pay in cash to such holder the full amount
of any such dividends or allow such dividends to be converted
into Common Stock and the conversion price for such purpose shall
be the then fair market value of the Common Stock as determined
by the Board of Directors of the Corporation.
3. Liquidation, Dissolution or Winding Up.
(a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the
holders of shares of Series D Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders, after and subject
to the payment in full of all amounts required to be distributed
to the holders of any other class or series of stock of the
Corporation ranking on liquidation prior and in preference to the
Series D Preferred Stock, (collectively referred to as "Senior
Preferred Stock") but before any payment shall be made to the
holders of any Junior Securities by reason of their ownership
thereof, an amount equal to $4.75 per share (subject to
appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization affecting
such shares). If upon any such liquidation, dissolution or
winding up of the Corporation the remaining assets of the
Corporation available for distribution to its stockholders shall
be insufficient to pay the holders of shares of Series D
Preferred Stock the full amount to which they shall be entitled,
the holders of Series D Preferred Stock shall share ratably in
any distribution of the remaining assets and funds of the
Corporation in proportion to the respective amounts which would
otherwise be payable in respect of the shares held by them upon
such distribution if all amounts payable on or with respect to
such shares were paid in full.
(b) After the payment of all preferential amounts required
to be paid to the holders of Senior Preferred Stock and Series D
Preferred Stock upon the dissolution, liquidation or winding up
of the Corporation, the holders of shares of Junior Securities
then outstanding shall be entitled to receive the remaining
assets and funds of the Corporation available for distribution to
its stockholders.
(c) Written notice of such liquidation, dissolution or
winding up, stating a payment date and the place where said
47
payments shall be made, shall be given by mail, postage prepaid,
or by telecopier to non-U.S. residents, not less than 20 days
prior to the payment date stated therein, to the holders of
record of the Series D Preferred Stock, such notice to be
addressed to each such holder at its address as shown by the
records of the Corporation.
(d) Whenever the distribution provided for in this Section 3
shall be payable 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.
(e) For the purposes of this Section 3, neither the
voluntary sale, conveyance, exchange or transfer (for case,
shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Corporation
nor the consolidation or merger of the Corporation with one or
more other corporations shall be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, unless such
voluntary sale, conveyance, exchange or transfer shall be in
connection with a plan of liquidation, dissolution or winding up
of the business of the Corporation.
4. Voting.
(a) Except as may be otherwise provided in these terms of
the Series D Preferred Stock or by law, the Series D Preferred
Stock shall not be entitled to vote.
(b) The Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Series D
Preferred Stock so as to affect adversely the Series D Preferred
Stock, without the written consent or affirmative vote of the
holders of a majority of the then outstanding shares of Series D
Preferred Stock, given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a class.
For this purpose, without limiting the generality of the
foregoing, the authorization or issuance of any series of
Preferred Stock with preference or priority over the Series D
Preferred Stock as to the right to receive either dividends or
amounts distributable upon liquidation, dissolution or winding up
of the Corporation shall be deemed to affect adversely the Series
D Preferred Stock, and the authorization or issuance of any
series of Preferred Stock on a parity with Series D Preferred
Stock as to the right to receive either dividends or amounts
distributable upon liquidation, dissolution or winding up of the
Corporation shall be deemed not to affect adversely the Series D
Preferred Stock. The number of authorized shares of Series D
Preferred Stock may be increased or decreased (but not below the
number of shares then outstanding) by the affirmative vote of the
48
holders of a majority of the then outstanding shares of the
Common Stock, Series D Preferred Stock and all other classes or
series of stock of the Corporation entitled to vote thereon,
voting as a single class.
5. Optional Conversion. The holders of the Series D
Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):
(a) Right to Convert. Each share of Series D Preferred
Stock shall be convertible, at the option of the holder thereof,
at any time, into one share of fully paid and nonassessable
Common Stock (subject to appropriate adjustment in the event of
any stock dividend, stock split, combination or other similar
recapitalization affecting such shares).
In the event of a notice of redemption of any shares of
Series D Preferred Stock pursuant to Section 6 hereof, the
Conversion Rights of the shares designated for redemption shall
terminate at the close of business on the fifth full day
preceding the date fixed for redemption, unless the redemption
price is not paid when due, in which case the Conversion Rights
for such shares shall continue until such price is paid in full.
In the event of a liquidation of the Corporation, the Conversion
Rights shall terminate at the close of business on the first full
day preceding the date fixed for the payment of any amounts
distributable on liquidation to the holders of Series D Preferred
Stock.
(b) Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of the Series D Preferred Stock.
In lieu of any fractional shares to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to
such fraction multiplied by the then effective Conversion Price.
(c) Mechanics of Conversion.
----------------------
(i) In order for a holder of Series D Preferred Stock
to convert shares of Series D Preferred Stock into shares of
Common Stock, such holder shall surrender the certificate or
certificates for such shares of Series D Preferred Stock at
the office of the transfer agent for the Series D Preferred
Stock (or at the principal office of the Corporation if the
Corporation serves as its own transfer agent), together with
written notice that such holder elects to convert all or any
number of the shares of the Series D Preferred Stock
represented by such certificate or certificates for shares
of Common stock to be issued, provided however, that the
holder shall pay any transfer taxes arising from the
issuance of the Common Stock to any person or entity other
than the holder. If required by the Corporation,
49
certificates surrendered for conversion shall be endorsed or
accompanied by a written instrument or instruments of
transfer, in a form satisfactory to the Corporation, duly
executed by the registered holder or his or its attorney
duly authorized in writing. The date of receipt of such
certificates and notice by the transfer agent (or by the
Corporation if the Corporation serves as its own transfer
agent) shall be the conversion date ("Conversion Date").
The Corporation shall, as soon as practicable after the
Conversion Date, issue and deliver at such office to such
holder of Series D Preferred Stock, or to his or its
nominees, a certificate or certificates for the number of
shares of Common Stock to which such holder shall be
entitled, together with cash in lieu of any fraction of a
share.
(ii) The Corporation shall at all times when the Series
D Preferred Stock shall be outstanding, reserve and keep
available out of is authorized but unissued stock, for the
purpose of effecting the conversion of the Series D
Preferred Stock, such number of its duly authorized shares
of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding Series D Preferred
Stock.
(iii) All shares of Series D Preferred Stock which
shall have been surrendered for conversion as herein
provided shall no longer be deemed to be outstanding and all
rights with respect to such shares, including the rights, if
any, to receive notices and to vote, shall immediately cease
and terminate on the Conversion Date, except only the right
of the holders thereof to receive shares of Common Stock in
exchange therefor and payment of any accrued and unpaid
dividends thereon. Any shares of Series D Preferred Stock
so converted shall be retired and canceled and shall not be
reissued, and the Corporation may from time to time take
such appropriate action as may be necessary to reduce the
authorized Series D Preferred Stock accordingly.
(d) Adjustment for Reclassification, Exchange, or
Substitution. If the Common Stock issuable upon the conversion
of the Series D Preferred Stock shall be changed into the same or
a different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification, or otherwise
(other than a subdivision or combination of shares or stock
dividend provided for above in section 5(a) hereof, or a
reorganization, merger, consolidation, or sale of assets provided
for below in Section 5(e) hereof), then and in each event the
holder of each such share of Series D Preferred Stock shall have
the right thereafter to convert such share of Series D Preferred
Stock into the kind and amount of shares of stock and other
50
securities receivable upon such reorganization, reclassification,
or other change by a holder of the number of shares of Common
Stock into which such shares of Series D Preferred Stock might
have been converted immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as
provided herein.
(e) Adjustment for Merger or Reorganization, etc. In case
of any consolidation or merger of the Corporation with or into
another corporation or the sale of all or substantially all of
the assets of the Corporation to another corporation (other than
a consolidation, merger or sale which is treated as a liquidation
pursuant to Subsection 3(a)), each share of Series D Preferred
Stock shall thereafter be convertible into the kind and amount of
shares of stock or other securities or property to which a holder
of the number of shares of Common Stock of the Corporation
deliverable upon conversion of such Series D Preferred Stock
would have been entitled upon such consolidation, merger or sale;
and, in such case, appropriate adjustment (as determined in good
faith by the Board of Directors) shall be made in the application
of the provisions in this Section 5 with respect to the rights
and interest thereafter of the holders of the Series D Preferred
Stock, to the end that the provisions set forth in this Section 5
shall thereafter be applicable, as nearly as reasonably may be,
in relation to any shares of stock or other property thereafter
deliverable upon the conversion of the Series D Preferred Stock.
(f) No Impairment. The Corporation will not, by amendment
of its Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this section 5 and in the
taking of all such action as may be necessary or appropriate in
order to protect the Conversion Rights of the holders of the
Series D Preferred Stock against impairment.
(g) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend (or any
other distribution) on its Common Stock payable in Common
Stock or other securities of the Corporation;
(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock of
the Corporation (other than a subdivision or combination of
its outstanding shares of Common Stock or a stock dividend
51
or stock distribution thereon), or of any consolidation or
merger of the Corporation into or with another corporation,
or of the sale of all or substantially all of the assets of
the Corporation; or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed at its principal
office or at the office of the transfer agent of the Series D
Preferred Stock, and shall cause to be mailed to the holders of
the Series D Preferred Stock at their last addresses as shown on
the records of the Corporation or such transfer agent, at least
ten days prior to the record date specified in (A) below or
twenty days before the date specified in (B) below, a notice
stating
(A) the record date of such dividend,
distribution, subdivision or combination, or, if a record is
not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend,
distribution, subdivision or combination are to be
determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution, liquidation or
winding up is expected to become effective, and the date as
of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution
or winding up.
6. Optional Redemption.
(a) At any time and from time to time, the Corporation may,
at the option of its Board of Directors, redeem the Series D
Preferred Stock, in whole or in part, by paying $7 per share
(subject to appropriate adjustment for stock splits, stock
dividends, combinations or other similar recapitalizations
affecting such shares) in cash for each share of Series D
Preferred Stock then redeemed (hereinafter referred to as the
"Redemption Price").
(b) In the event of any redemption of only a part of the
then outstanding Series D Preferred Stock, the Corporation shall
effect such redemption pro rata among the holders thereof based
on the number of shares of Series D Preferred Stock held of
record by such holders on the date of the Redemption Notice (as
defined below).
52
(c) At least 30 days prior to the date fixed for any
redemption of Series D Preferred Stock (hereinafter referred to
as the "Redemption Date"), written notice shall be mailed, by
first class mail, postage prepaid, to each holder of record of
Series D Preferred Stock to be redeemed, at his or its address
last shown on the records of the transfer agent of the Series D
Preferred Stock (or the records of the Corporation, if it serves
as its own transfer agent), notifying such holder of the election
of the Corporation to redeem such shares specifying the
Redemption Date and the date on which such holder's Conversion
Rights (pursuant to Section 5 hereof) as to such shares terminate
and calling upon such holder to surrender to the Corporation, in
the manner and at the place designated, his, her or its
certificate or certificates representing the shares to be
redeemed (such notice is hereinafter referred to as the
"Redemption Notice"). On or prior to the Redemption Date, each
holder of Series D Preferred Stock to be redeemed shall surrender
his, her or its certificate or certificates representing such
shares to the Corporation, 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 canceled.
In the event less than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares. From and after the
Redemption Date, unless there shall have been a default in
payment of the Redemption Price, all rights of the holders of the
Series D Preferred Stock designated for redemption in the
Redemption Notice as holders of Series D Preferred Stock of the
Corporation (except the right to receive the Redemption Price
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.
(d) Subject to the provisions hereof, the Board of Directors
of the Corporation shall have authority to prescribe the manner
in which Series D Preferred Stock shall be redeemed from time to
time. Any shares of Series D Preferred Stock so redeemed shall
permanently be retired, shall no longer be deemed outstanding and
shall not under any circumstances be reissued, and the
Corporation may from time to time take such appropriate action as
may be necessary to reduce the authorized Series D Preferred
Stock accordingly. Nothing herein contained shall prevent or
restrict the purchase by the Corporation, from time to time
either at public or private sale, of the whole or any part of the
Series D Preferred Stock at such price or prices as the
Corporation may determine, subject to the provisions of
applicable law.
53
Designation of Series E Preferred Stock
1. Designation; Rank. The series of Preferred Stock
designated and known as "Series E Preferred Stock" shall consist
of 400,000 shares, par value $.01 per share. Shares of the
Series E Preferred Stock shall, with respect to dividend rights
and rights on liquidation, winding up and dissolution, rank
senior and prior to the Common Stock, par value $.004 per share
(the "Common Stock") of the Corporation, junior to the Series C
Preferred Stock and on a parity with the Series D Preferred Stock
and Series F Preferred Stock.
2. Dividends.
----------
(a) The holders of the Series E Preferred Stock shall be
entitled to receive, when declared by the Directors out of any
funds legally available therefor, dividends in cash or, at the
Corporation's option, in Common Stock, at the annual rate of
$0.30 per share (subject to appropriate adjustment for stock
splits, stock dividends, combinations or other similar
recapitalizations affecting such shares), and no more, on the
earlier to occur of (i) the Conversion Date (as hereinafter
defined) and (ii) the Redemption Date (as hereinafter defined)
(the "Dividend Payment Date"), payable in preference and priority
to any payment of any cash dividend on Common Stock, junior in
preference and priority to any dividend payment to the holders of
Series C Preferred Stock and on a parity with any dividend
payment to the holders of Series D Preferred Stock and Series F
Preferred Stock. Such dividends shall be paid to the holders of
record at the close of business on the Dividend Payment Date. If
the Dividend Payment Date is not a business day, the Dividend
Payment Date shall be the next succeeding business day. If the
Corporation elects to pay such dividends in Common Stock, the
conversion price per share (the "Conversion Price") shall be the
lesser of (i) $3.75 and (ii) the closing price per share of the
Common Stock on the principal national securities exchange on
which the Common Stock is then listed or admitted to trading or,
if not then listed or admitted to trading on any such exchange,
on the NASDAQ National Market System, or if not then listed or
traded on any such exchange or system, the bid price per share on
the NASDAQ Small-Cap Market, averaged over the 30 trading days
immediately preceding the Conversion Date (subject to appropriate
adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting such
shares).
(b) Dividends shall be fully cumulative and shall accrue,
whether or not earned or declared, without interest, from the
date of issue of the Series E Preferred Stock.
54
(c) No dividends shall be declared or paid or set apart for
payment on the Common Stock, or on the Preferred Stock of any
series ranking, as to dividends, junior to or on a parity with
the Series E Preferred Stock, for any period unless full
cumulative dividends have been or contemporaneously are declared
and paid (or declared and a sum sufficient for the payment
thereof set apart for such payment) on the Series E Preferred
Stock for all dividend payment periods ending on or prior to the
date of payment of such full cumulative dividends. (The Common
Stock and any such series of Preferred Stock are referred to
hereinafter as "Junior Securities".) Unless full cumulative
dividends on the Series E Preferred Stock have been paid, no
other distribution shall be made upon or in respect of the Junior
Securities.
3. Liquidation, Dissolution or Winding Up.
(a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the
holders of shares of Series E Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders, after and subject
to the payment in full of all amounts required to be distributed
to the holders of any other class or series of stock of the
Corporation ranking on liquidation prior and in preference to the
Series E Preferred Stock, (collectively referred to as "Senior
Preferred Stock") but before any payment shall be made to the
holders of any Junior Securities by reason of their ownership
thereof, and on a parity with any dividend payment to the holders
of Series D Preferred Stock and Series F Preferred Stock, an
amount equal to $3.75 per share (subject to appropriate
adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting such
shares). If upon any such liquidation, dissolution or winding up
of the Corporation the remaining assets of the Corporation
available for distribution to its stockholders shall be
insufficient to pay the holders of shares of Series E Preferred
Stock the full amount to which they shall be entitled, the
holders of Series E Preferred Stock shall share ratably in any
distribution of the remaining assets and funds of the Corporation
in proportion to the respective amounts which would otherwise be
payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to such
shares were paid in full.
(b) After the payment of all preferential amounts required
to be paid to the holders of Senior Preferred Stock and Series E
Preferred Stock upon the dissolution, liquidation or winding up
of the Corporation, the holders of shares of Junior Securities
then outstanding shall be entitled to receive the remaining
55
assets and funds of the Corporation available for distribution to
its stockholders.
(c) Written notice of such liquidation, dissolution or
winding up, stating a payment date and the place where said
payments shall be made, shall be given by mail, postage prepaid,
or by telecopier to non-U.S. residents, not less than 20 days
prior to the payment date stated therein, to the holders of
record of the Series E Preferred Stock, such notice to be
addressed to each such holder at its address as shown by the
records of the Corporation.
(d) Whenever the distribution provided for in this Section 3
shall be payable 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.
(e) For the purposes of this Section 3, neither the
voluntary sale, conveyance, exchange or transfer (for case,
shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Corporation
nor the consolidation or merger of the Corporation with one or
more other corporations shall be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, unless such
voluntary sale, conveyance, exchange or transfer shall be in
connection with a plan of liquidation, dissolution or winding up
of the business of the Corporation.
4. Voting.
-------
(a) Except as may be otherwise provided in these terms of
the Series E Preferred Stock or by law, the Series E Preferred
Stock shall not be entitled to vote.
(b) The Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Series E
Preferred Stock so as to affect adversely the Series E Preferred
Stock, without the written consent or affirmative vote of the
holders of a majority of the then outstanding shares of Series E
Preferred Stock, given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a class.
For this purpose, without limiting the generality of the
foregoing, the authorization or issuance of any series of
Preferred Stock with preference or priority over the Series E
Preferred Stock as to the right to receive either dividends or
amounts distributable upon liquidation, dissolution or winding up
of the Corporation shall be deemed to affect adversely the Series
E Preferred Stock, and the authorization or issuance of any
series of Preferred Stock on a parity with Series E Preferred
Stock as to the right to receive either dividends or amounts
56
distributable upon liquidation, dissolution or winding up of the
Corporation shall be deemed not to affect adversely the Series E
Preferred Stock. The number of authorized shares of Series E
Preferred Stock may be increased or decreased (but not below the
number of shares then outstanding) by the affirmative vote of the
holders of a majority of the then outstanding shares of the
Common Stock, Series E Preferred Stock and all other classes or
series of stock of the Corporation entitled to vote thereon,
voting as a single class.
5. Conversion.
-----------
(a) Mandatory Conversion. On January 1, 1995 (the
"Conversion Date"), each share of Series E Preferred Stock shall
automatically and without further action on the part of any
holder of Series E Preferred Stock be converted into the number
of shares of fully paid and nonassessable Common Stock derived by
dividing $3.75 by the Conversion Price. Upon such conversion,
each share of Series E Preferred Stock shall be canceled and not
subject to reissuance. On or before September 30, 1994, the
Corporation shall provide written notice (the "Conversion
Notice") to the holders hereof of the Corporation's intention not
to exercise the redemption option provided for in Section 6
hereof and to allow the Series E Preferred Stock to automatically
convert pursuant to this Section 5(a). The immediately preceding
sentence notwithstanding, the Corporation shall not be deemed to
have waived its right to redeem the Series E Preferred Stock
pursuant to Section 6 hereof by virtue of the issuance of the
Conversion Notice."
(b) Delivery of Stock Certificates. The holder of any
shares of Series E Preferred Stock converted pursuant to Section
5(a) hereof, shall deliver to the Corporation during regular
business hours at the office of the transfer agent of the
Corporation for the Series E Preferred Stock, or at such other
place as may be designated by the Corporation, the certificate or
certificates for the shares so converted, duly endorsed or
assigned in blank to the Corporation. As promptly as practicable
thereafter, the Corporation shall issue and deliver to such
holder, at the place designated by such holder, a certificate or
certificates for the number of shares of Common Stock to which
such holder is entitled. The person in whose name the
certificate for such Common Stock is to be issued shall be deemed
to have become a stockholder of record on the Conversion Date
unless the transfer books of the Corporation are closed on that
date, in which event he shall be deemed to have become a
stockholder of record on the next succeeding date on which the
transfer books are open.
(c) Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of the Series E Preferred Stock.
57
In lieu of any fractional shares to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to
such fraction multiplied by the Conversion Price.
(d) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the date
on which a share of Series E Preferred Stock was first issued
("Original Issue Date") effect a subdivision of the outstanding
Common Stock, the Conversion Price then in effect immediately
before that subdivision shall be proportionately decreased. If
the Corporation shall at any time or from time to time after the
Original Issue Date combine the outstanding shares of Common
Stock, the Conversion Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment
under this paragraph shall become effective at the close of
business on the date the subdivision or combination becomes
effective.
(e) Adjustment for Certain Dividends and Distributions. In
the event the Corporation at any time, or from time to time after
the Original Issue Date shall make or issue, or fix a record date
for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the
Conversion Price for the Series E Preferred Stock then in effect
shall be decreased as of the time of such issuance or, in the
event such a record date shall have been fixed, as of the close
of business on such record date, by multiplying the Conversion
Price for the Series E Preferred Stock then in effect by a
fraction:
(i) the numerator of which shall be the total number
of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business
on such record date, and
(ii) the denominator of which shall be the total number
of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business
on such record date plus the number of shares of Common
Stock issuable in payment of such dividend or distribution;
provided, however, if such record date shall have been fixed
and such dividend is not fully paid or if such distribution
is not fully made on the date fixed therefor, the Conversion
Price for the Series E Preferred Stock shall be recomputed
accordingly as of the close of business on such record date
and thereafter the Conversion Price for the Series E
Preferred Stock shall be adjusted pursuant to this paragraph
as of the time of actual payment of such dividends or
distributions.
58
(f) Adjustments for Other Dividends and Distributions. In
the event the Corporation at any time or from time to time after
the Original Issue Date shall make or issue, or fix a record date
for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in securities
of the Corporation other than shares of Common Stock, then and in
each such event provision shall be made so that the holders of
the Series E Preferred Stock shall receive upon conversion
thereof in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities of the Corporation
that they would have received had their Preferred Stock been
converted into Common Stock on the date of such event and had
thereafter, during the period from the date of such event to and
including the conversion date, retained such securities
receivable by them as aforesaid during such period giving
application to all adjustments called for during such period,
under this paragraph with respect to the rights of the holders of
the Preferred Stock.
(g) Adjustment for Reclassification, Exchange, or
Substitution. If the Common Stock issuable upon the conversion
of the Series E Preferred Stock shall be changed into the same or
a different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification, or otherwise
(other than a subdivision or combination of shares or stock
dividend provided for in Sections 5(d), (e) and (f) hereof, or a
reorganization, merger, consolidation, or sale of assets provided
for in Section 5(h) hereof), then and in each event the holder of
each such share of Series E Preferred Stock shall have the right
thereafter to convert such share of Series E Preferred Stock into
the kind and amount of shares of stock and other securities
receivable upon such reorganization, reclassification, or other
change by a holder of the number of shares of Common Stock into
which such shares of Series E Preferred Stock might have been
converted immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as
provided herein.
(h) Adjustment for Merger or Reorganization, etc. In case
of any consolidation or merger of the Corporation with or into
another corporation or the sale of all or substantially all of
the assets of the Corporation to another corporation (other than
a consolidation, merger or sale which is treated as a liquidation
pursuant to Subsection 3(a)), each share of Series E Preferred
Stock shall thereafter be convertible into the kind and amount of
shares of stock or other securities or property to which a holder
of the number of shares of Common Stock of the Corporation
deliverable upon conversion of such Series E Preferred Stock
would have been entitled upon such consolidation, merger or sale;
and, in such case, appropriate adjustment (as determined in good
faith by the Board of Directors) shall be made in the application
59
of the provisions in this Section 5 with respect to the rights
and interest thereafter of the holders of the Series E Preferred
Stock, to the end that the provisions set forth in this Section 5
shall thereafter be applicable, as nearly as reasonably may be,
in relation to any shares of stock or other property thereafter
deliverable upon the conversion of the Series E Preferred Stock.
(i) No Impairment. The Corporation will not, by amendment
of its Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 5 and in the
taking of all such action as may be necessary or appropriate in
order to protect the holders of the Series E Preferred Stock
against impairment of their conversion rights.
(j) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend (or any
other distribution) on its Common Stock payable in Common
Stock or other securities of the Corporation;
(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock of
the Corporation (other than a subdivision or combination of
its outstanding shares of Common Stock or a stock dividend
or stock distribution thereon), or of any consolidation or
merger of the Corporation into or with another corporation,
or of the sale of all or substantially all of the assets of
the Corporation; or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed at its principal
office or at the office of the transfer agent of the Series E
Preferred Stock, and shall cause to be mailed to the holders of
the Series E Preferred Stock at their last addresses as shown on
the records of the Corporation or such transfer agent, at least
ten (10) days prior to the record date specified in (A) below or
twenty (20) days before the date specified in (B) below, a notice
stating
(A) the record date of such dividend,
distribution, subdivision or combination, or, if a record is
not to be taken, the date as of which the holders of Common
60
Stock of record to be entitled to such dividend,
distribution, subdivision or combination are to be
determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution, liquidation or
winding up is expected to become effective, and the date as
of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution
or winding up.
(k) Optional Conversion. Except as set forth in
Section 5(a) hereof, the holders of the Series E Preferred Stock
shall not have the right to convert their shares of Series E
Preferred Stock into Common Stock.
6. Optional Redemption.
(a) At any time and from time to time on or before December
31, 1994, the Corporation may, at the option of its Board of
Directors, redeem the Series E Preferred Stock, in whole or in
part, by paying $3.75 per share (subject to appropriate
adjustment for stock splits, stock dividends, combinations or
other similar recapitalizations affecting such shares) in cash
for each share of Series E Preferred Stock then redeemed
(hereinafter referred to as the "Redemption Price").
(b) In the event of any redemption of only a part of the
then outstanding Series E Preferred Stock, the Corporation shall
effect such redemption pro rata among the holders thereof based
on the number of shares of Series E Preferred Stock held of
record by such holders on the date of the Redemption Notice (as
defined below).
(c) At least ten (10) days prior to the date fixed for any
redemption of Series E Preferred Stock (hereinafter referred to
as the "Redemption Date"), written notice shall be mailed, by
first class mail, postage prepaid, to each holder of record of
Series E Preferred Stock to be redeemed, at his or its address
last shown on the records of the transfer agent of the Series E
Preferred Stock (or the records of the Corporation, if it serves
as its own transfer agent), notifying such holder of the election
of the Corporation to redeem such shares specifying the
Redemption Date and calling upon such holder to surrender to the
Corporation, in the manner and at the place designated, his, her
or its certificate or certificates representing the shares to be
redeemed (such notice is hereinafter referred to as the
"Redemption Notice"). On or prior to the Redemption Date, each
holder of Series E Preferred Stock to be redeemed shall surrender
61
his, her or its certificate or certificates representing such
shares to the Corporation, 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 canceled.
In the event less than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares. From and after the
Redemption Date, unless there shall have been a default in
payment of the Redemption Price, all rights of the holders of the
Series E Preferred Stock designated for redemption in the
Redemption Notice as holders of Series E Preferred Stock of the
Corporation (except the right to receive the Redemption Price
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.
(d) Subject to the provisions hereof, the Board of Directors
of the Corporation shall have authority to prescribe the manner
in which Series E Preferred Stock shall be redeemed from time to
time. Any shares of Series E Preferred Stock so redeemed shall
permanently be retired, shall no longer be deemed outstanding and
shall not under any circumstances be reissued, and the
Corporation may from time to time take such appropriate action as
may be necessary to reduce the authorized Series E Preferred
Stock accordingly. Nothing herein contained shall prevent or
restrict the purchase by the Corporation, from time to time
either at public or private sale, of the whole or any part of the
Series E Preferred Stock at such price or prices as the
Corporation may determine, subject to the provisions of
applicable law.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
62
Designation of Series F Preferred Stock
1. Designation; Rank. The series of Preferred Stock
designated and known as "Series F Preferred Stock" shall consist
of 700,000 shares, par value $.01 per share. Shares of the
Series F Preferred Stock shall, with respect to dividend rights
and rights on liquidation, winding up and dissolution, rank
senior and prior to the Common Stock, par value $.004 per share
(the "Common Stock") of the Corporation, junior to the Series C
Preferred Stock and on a parity with the Series D Preferred Stock
and Series E Preferred Stock.
2. Dividends. The holders of the Series F Preferred Stock
shall not be entitled to receive dividends.
3. Liquidation, Dissolution or Winding Up.
(a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the
holders of shares of Series F Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders, after and subject
to the payment in full of all amounts required to be distributed
to the holders of any other class or series of stock of the
Corporation ranking on liquidation prior and in preference to the
Series F Preferred Stock, (collectively referred to as "Senior
Preferred Stock") but before any payment shall be made to the
holders of Common Stock and any series of Preferred Stock ranking
on liquidation junior to the Series F Preferred Stock ("Junior
Securities") by reason of their ownership thereof, and on a
parity with any dividend payment to the holders of Series D
Preferred Stock and Series E Preferred Stock, an amount equal to
$5.00 per share (subject to appropriate adjustment in the event
of any stock dividend, stock split, combination or other similar
recapitalization affecting such shares). If upon any such
liquidation, dissolution or winding up of the Corporation the
remaining assets of the Corporation available for distribution to
its stockholders shall be insufficient to pay the holders of
shares of Series F Preferred Stock the full amount to which they
shall be entitled, the holders of Series F Preferred Stock shall
share ratably in any distribution of the remaining assets and
funds of the Corporation in proportion to the respective amounts
which would otherwise be payable in respect of the shares held by
them upon such distribution if all amounts payable on or with
respect to such shares were paid in full.
(b) After the payment of all preferential amounts required
to be paid to the holders of Senior Preferred Stock and Series F
Preferred Stock upon the dissolution, liquidation or winding up
of the Corporation, the holders of shares of Junior Securities
63
then outstanding shall be entitled to receive the remaining
assets and funds of the Corporation available for distribution to
its stockholders.
(c) Written notice of such liquidation, dissolution or
winding up, stating a payment date and the place where said
payments shall be made, shall be given by mail, postage prepaid,
or by telecopier to non-U.S. residents, not less than 20 days
prior to the payment date stated therein, to the holders of
record of the Series F Preferred Stock, such notice to be
addressed to each such holder at its address as shown by the
records of the Corporation.
(d) Whenever the distribution provided for in this Section 3
shall be payable 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.
(e) For the purposes of this Section 3, neither the
voluntary sale, conveyance, exchange or transfer (for case,
shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Corporation
nor the consolidation or merger of the Corporation with one or
more other corporations shall be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, unless such
voluntary sale, conveyance, exchange or transfer shall be in
connection with a plan of liquidation, dissolution or winding up
of the business of the Corporation.
4. Voting.
(a) Except as may be otherwise provided in these terms of
the Series F Preferred Stock or by law, the Series F Preferred
Stock shall not be entitled to vote.
(b) The Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Series F
Preferred Stock so as to affect adversely the Series F Preferred
Stock, without the written consent or affirmative vote of the
holders of a majority of the then outstanding shares of Series F
Preferred Stock, given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a class.
For this purpose, without limiting the generality of the
foregoing, the authorization or issuance of any series of
Preferred Stock with preference or priority over the Series F
Preferred Stock as to the right to receive either dividends or
amounts distributable upon liquidation, dissolution or winding up
of the Corporation shall be deemed to affect adversely the Series
F Preferred Stock, and the authorization or issuance of any
series of Preferred Stock on a parity with Series F Preferred
64
Stock as to the right to receive either dividends or amounts
distributable upon liquidation, dissolution or winding up of the
Corporation shall be deemed not to affect adversely the Series F
Preferred Stock. The number of authorized shares of Series F
Preferred Stock may be increased or decreased (but not below the
number of shares then outstanding) by the affirmative vote of the
holders of a majority of the then outstanding shares of the
Common Stock, Series F Preferred Stock and all other classes or
series of stock of the Corporation entitled to vote thereon,
voting as a single class.
5. Conversion.
(a) Mandatory Conversion. On July 1, 1995 (the "Conversion
Date"), each share of Series F Preferred Stock shall
automatically and without further action on the part of any
holder of Series F Preferred Stock be converted into the number
of shares of fully paid and nonassessable Common Stock derived by
dividing the number 1 by a fraction, the denominator of which is
$5.00 and the numerator of which is ninety percent (90%) of the
closing price per share of the Common Stock on the principal
national securities exchange on which the Common Stock is then
listed or admitted to trading or, if not then listed or admitted
to trading on any such exchange, on the NASDAQ National Market
System, or if not then listed or traded on any such exchange or
system, the bid price per share on the NASDAQ Small-Cap Market,
averaged over the 30 trading days immediately preceding the
Conversion Date. Upon such conversion, each share of Series F
Preferred Stock shall be canceled and not subject to reissuance."
(b) Delivery of Stock Certificates. The holder of any
shares of Series F Preferred Stock converted pursuant to Section
5(a) hereof, shall deliver to the Corporation during regular
business hours at the office of the transfer agent of the
Corporation for the Series F Preferred Stock, or at such other
place as may be designated by the Corporation, the certificate or
certificates for the shares so converted, duly endorsed or
assigned in blank to the Corporation. As promptly as practicable
thereafter, the Corporation shall issue and deliver to such
holder, at the place designated by such holder, a certificate or
certificates for the number of shares of Common Stock to which
such holder is entitled. The person in whose name the
certificate for such Common Stock is to be issued shall be deemed
to have become a stockholder of record on the Conversion Date
unless the transfer books of the Corporation are closed on that
date, in which event he shall be deemed to have become a
stockholder of record on the next succeeding date on which the
transfer books are open.
(c) Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of the Series F Preferred Stock.
65
In lieu of any fractional shares to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to
such fraction multiplied by $5.00.
(d) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the date
on which a share of Series F Preferred Stock was first issued
("Original Issue Date") effect a subdivision of the outstanding
Common Stock, the Conversion Price then in effect immediately
before that subdivision shall be proportionately decreased. If
the Corporation shall at any time or from time to time after the
Original Issue Date combine the outstanding shares of Common
Stock, the Conversion Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment
under this paragraph shall become effective at the close of
business on the date the subdivision or combination becomes
effective.
(e) Adjustment for Certain Dividends and Distributions. In
the event the Corporation at any time, or from time to time after
the Original Issue Date shall make or issue, or fix a record date
for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the
Conversion Price for the Series F Preferred Stock then in effect
shall be decreased as of the time of such issuance or, in the
event such a record date shall have been fixed, as of the close
of business on such record date, by multiplying the Conversion
Price for the Series F Preferred Stock then in effect by a
fraction:
(i) the numerator of which shall be the total number
of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business
on such record date, and
(ii) the denominator of which shall be the total number
of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business
on such record date plus the number of shares of Common
Stock issuable in payment of such dividend or distribution;
provided, however, if such record date shall have been fixed
and such dividend is not fully paid or if such distribution
is not fully made on the date fixed therefor, the Conversion
Price for the Series F Preferred Stock shall be recomputed
accordingly as of the close of business on such record date
and thereafter the Conversion Price for the Series F
Preferred Stock shall be adjusted pursuant to this paragraph
as of the time of actual payment of such dividends or
distributions.
66
(f) Adjustments for Other Dividends and Distributions. In
the event the Corporation at any time or from time to time after
the Original Issue Date shall make or issue, or fix a record date
for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in securities
of the Corporation other than shares of Common Stock, then and in
each such event provision shall be made so that the holders of
the Series F Preferred Stock shall receive upon conversion
thereof in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities of the Corporation
that they would have received had their Preferred Stock been
converted into Common Stock on the date of such event and had
thereafter, during the period from the date of such event to and
including the conversion date, retained such securities
receivable by them as aforesaid during such period giving
application to all adjustments called for during such period,
under this paragraph with respect to the rights of the holders of
the Preferred Stock.
(g) Adjustment for Reclassification, Exchange, or
Substitution. If the Common Stock issuable upon the conversion
of the Series F Preferred Stock shall be changed into the same or
a different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification, or otherwise
(other than a subdivision or combination of shares or stock
dividend provided for in Sections 5(d), (e) and (f) hereof, or a
reorganization, merger, consolidation, or sale of assets provided
for in Section 5(h) hereof), then and in each event the holder of
each such share of Series F Preferred Stock shall have the right
thereafter to convert such share of Series F Preferred Stock into
the kind and amount of shares of stock and other securities
receivable upon such reorganization, reclassification, or other
change by a holder of the number of shares of Common Stock into
which such shares of Series F Preferred Stock might have been
converted immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as
provided herein.
(h) Adjustment for Merger or Reorganization, etc. In case
of any consolidation or merger of the Corporation with or into
another corporation or the sale of all or substantially all of
the assets of the Corporation to another corporation (other than
a consolidation, merger or sale which is treated as a liquidation
pursuant to Subsection 3(a)), each share of Series F Preferred
Stock shall thereafter be convertible into the kind and amount of
shares of stock or other securities or property to which a holder
of the number of shares of Common Stock of the Corporation
deliverable upon conversion of such Series F Preferred Stock
would have been entitled upon such consolidation, merger or sale;
and, in such case, appropriate adjustment (as determined in good
faith by the Board of Directors) shall be made in the application
67
of the provisions in this Section 5 with respect to the rights
and interest thereafter of the holders of the Series F Preferred
Stock, to the end that the provisions set forth in this Section 5
shall thereafter be applicable, as nearly as reasonably may be,
in relation to any shares of stock or other property thereafter
deliverable upon the conversion of the Series F Preferred Stock.
(i) No Impairment. The Corporation will not, by amendment
of its Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 5 and in the
taking of all such action as may be necessary or appropriate in
order to protect the holders of the Series F Preferred Stock
against impairment of their conversion rights.
(j) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend (or any
other distribution) on its Common Stock payable in Common
Stock or other securities of the Corporation;
(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock of
the Corporation (other than a subdivision or combination of
its outstanding shares of Common Stock or a stock dividend
or stock distribution thereon), or of any consolidation or
merger of the Corporation into or with another corporation,
or of the sale of all or substantially all of the assets of
the Corporation; or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed at its principal
office or at the office of the transfer agent of the Series F
Preferred Stock, and shall cause to be mailed to the holders of
the Series F Preferred Stock at their last addresses as shown on
the records of the Corporation or such transfer agent, at least
ten (10) days prior to the record date specified in (A) below or
twenty (20) days before the date specified in (B) below, a notice
stating
(A) the record date of such dividend,
distribution, subdivision or combination, or, if a record is
not to be taken, the date as of which the holders of Common
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Stock of record to be entitled to such dividend,
distribution, subdivision or combination are to be
determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution, liquidation or
winding up is expected to become effective, and the date as
of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution
or winding up.
(k) Optional Conversion. Except as set forth in
Section 5(a) hereof, the holders of the Series F Preferred Stock
shall not have the right to convert their shares of Series F
Preferred Stock into Common Stock.
6. Redemption. The Corporation shall not have any right
to redeem the Series F Preferred Stock.
FIFTH. The Board of Directors shall have the power to
adopt, amend or repeal the by-laws.
SIXTH. No director shall be personally liable to the
Corporation or its stockholders for monetary damages for any
breach of fiduciary duty by such director as a director.
Notwithstanding the foregoing sentence, a director shall be
liable to the extent provided by applicable law, (i) for breach
of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the
director derived an improper personal benefit. No amendment to
or repeal of this Article Sixth shall apply to or have any effect
on the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment.
SEVENTH. The number of directors constituting the entire
Board of Directors shall be as set forth in or pursuant to the
by-laws of the Corporation. The Board of Directors shall be
divided into three classes, designated Classes I, II and III,
which shall be as nearly equal in number as possible. Initially,
directors of Class I shall be elected to hold office for a term
expiring at the annual meeting of stockholders in 1995, directors
of Class II shall be elected to hold office for a term expiring
at the annual meeting of stockholders in 1996 and directors of
Class III shall be elected to hold office for a term expiring at
the annual meeting of stockholders in 1997. At each annual
69
meeting of stockholders following such initial classification and
election, the respective successors of each class shall be
elected for three-year terms.
IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be affixed hereto and this Restated Certificate of
Incorporation to be signed by its President and attested by its
Secretary this day of June, 1994.
SHARED TECHNOLOGIES INC.
ATTEST
By: _ _ _ _ _ _ _ _ _ _ _ _ By:_ _ _ _ _ _ _ _ _ _ _ _
Kenneth M. Dorros, Secretary Anthony D. Autorino
President
[Corporate Seal]
70
<EX-3.2>
Exhibit 3.2
AMENDED AND RESTATED BYLAWS
OF
SHARED TECHNOLOGIES INC.
(Effective as of June 15, 1994)
ARTICLE I
Identification
---------------
Section 1. Name. The name of the corporation is SHARED
TECHNOLOGIES INC. (the "Corporation").
Section 2. Principal Office and Place of Business. The
principal office of the Corporation shall be located at such
location, within or without the State of Delaware, as the board
of directors shall designate from time to time. The board of
directors shall have the power and authority to establish and
maintain branch or subordinate offices at any other locations
within or without the State of Delaware. The registered office
of the Corporation shall be 1013 Centre Road in Wilmington,
Delaware. The registered agent in Delaware shall be the
Corporation Service Company.
ARTICLE II
Shareholders
-------------
Section 1. Place of Meetings. Annual and special meetings
shall be held at the principal office of the Corporation or at
such other place within or without the State of Delaware, as may
be determined by the board of directors and designated in the
notice of the meeting. A waiver of notice signed by all
shareholders entitled to vote at a meeting may designate any
other place as the place for holding such meeting.
Section 2. Annual Meeting. The annual meeting for the
election of directors, and for the transaction of such other
business of the shareholders as may properly be brought before
the meeting, shall be held on the third Tuesday in May at such
place and at such time as may be designated by the board of
directors. If the annual meeting of the shareholders is not
held as herein prescribed, the existing slate of directors shall
remain in office and the election of directors may be held at
any meeting thereafter called pursuant to these bylaws or
otherwise lawfully held.
71
Section 3. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by law, may be called at any time by the Chairman of
the board of directors. The Chairman shall call a special
meeting of the shareholders upon written request of the
shareholders entitled to cast not less than ten percent (10%) of
all the issued and outstanding shares of the Corporation
entitled to vote for the purposes specified in such request. If
the Chairman does not within fifteen (15) days after the receipt
of such shareholders request call such meeting, the shareholders
may call the same. The general purpose or purposes for which a
special meeting is called shall be stated in the notice thereof
and no other business shall be transacted at the meeting, unless
all shareholders entitled to vote are present and consent
thereto.
Section 4. Notice of Meeting. Written or printed notice
stating the place, day, and hour of any shareholders' meeting
and, in case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than
ten (10) nor more than sixty (60) days before the date of the
meeting, unless a greater period of notice is required by law in
a particular case, either personally or by mail, to each
shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the
shareholder at his address as it appears on the stock transfer
books of the Corporation, with postage thereon prepaid;
provided, however, that in the case of shareholders who are
employees of the Corporation delivery at the office address of
such employee shall be sufficient. Any matter relating to the
affairs of the Corporation may be brought up for action at the
annual meeting of shareholders, whether or not stated in the
notice of the meeting; provided, however, that unless stated in
the notice of the meeting, no bylaw may be brought up for
adoption, amendment or repeal and no matter, other than the
election of directors, may be brought up which expressly
requires the vote of shareholders.
Section 5. Waiver of Notice. Notice of any shareholders'
meeting may be waived in writing by any shareholder either
before or after the time stated therein and, if any person
present at a shareholders' meeting does not protest, prior to or
at the commencement of the meeting, the lack of proper notice,
such person shall be deemed to have waived notice of such
meeting.
Section 6. Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of
shareholders, or any adjournment thereof, or shareholders
72
entitled to receive payment of any dividend, or in order to make
a determination of such shareholders for any other proper
purpose, the directors of the Corporation shall fix in advance a
date as the record date for any such determination of
shareholders, which date shall not be more than sixty (60) nor
less than ten (10) days before the date of such meeting of
shareholders, nor more than sixty (60) days prior to any other
action. If no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a
distribution, the date on which notice of the meeting is mailed
or the date on which the resolution of the directors declaring
such distribution is adopted, shall be the record date for such
determination of shareholders. The record date is effective as
of the close of business on such date. When a determination of
shareholders entitled to vote at any meeting of shareholders has
been made as provided in this section, such determination shall
apply to any adjournment thereof which is thirty (30) days or
less.
Section 7. Voting Lists and Inspection. The officer of the
Corporation having responsibility for the share transfer books
shall make, or cause to be made, at least ten (10) days before
each meeting of shareholders, a complete list or other
equivalent record of the shareholders entitled to vote at such
meeting, arranged in alphabetical order, with the address of,
and the number and class of shares held by, each. Such list or
other equivalent record shall, for a period of ten (10) days
prior to such meeting, be kept on file at the principal office
of the Corporation and shall be subject to inspection by any
shareholders during usual business hours for any proper purpose
in the interest of the shareholder or of the Corporation. Such
list or equivalent record shall also be produced and kept open
to such inspection during the whole time of the meeting. The
original share transfer book shall be prima facie evidence as to
the shareholders entitled to inspect such list or other
equivalent record.
Section 8. Quorum and Adjournment of Shareholders'
Meetings. At any meeting of shareholders at least one-third of
the outstanding shares of the Corporation entitled to vote at
such meeting, and represented in person or by proxy, shall
constitute a quorum of the shareholders, unless the
representation of a larger number shall be required by law, and,
in that case, the representation of the number so required shall
constitute a quorum. If a larger number shall be required by
law and less than said number of the outstanding shares are
represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without
further notice until a quorum is present or represented, at
which time any business may be transacted which might have been
73
transacted at the meeting as originally notified; provided,
however, that the adjournment does not exceed thirty (30) days.
The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding
the withdrawal of any shareholders, unless the absence of a
quorum is specifically noted, by the chairman of the meeting.
Section 9. Voting. At each meeting of the shareholders,
every shareholder entitled to vote shall have one vote for each
share of stock registered in his or her name as of the record
date for said meeting. Upon the demand of any shareholder, the
vote upon any question before the meeting shall be by written
ballot; provided, however, that the election of the board of
directors shall not be by written ballot. All questions shall
be decided by majority vote except as otherwise provided by
these bylaws, the certificate of incorporation, or laws of the
State of Delaware.
Section 10. Proxies. Each shareholder entitled to vote at
a meeting of shareholders may authorize another person or
persons to act for him by proxy. All proxies shall be in
writing and shall be filed with the Secretary of the Corporation
before being voted. A proxy shall not be voted or acted upon
after three (3) years from its date of execution unless it
specifies a longer length of time for which it is to continue in
force or limits its use to a particular meeting not yet held.
A duly executed proxy shall be irrevocable if it states that
it is irrevocable and if, and only as long as, it is coupled
with an interest sufficient in law to support an irrevocable
power. A proxy may be irrevocable regardless of whether the
interest with which it is coupled is an interest in the stock
itself or an interest in the Corporation generally.
Section 11. Shareholders' Action Without Meeting. Any
action which is required or permitted to be taken at any meeting
of shareholders may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting
forth the action so taken is signed by the holders of
outstanding stock having not less than the minimum number of
votes that would be necessary to take such action at a meeting
at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of corporate action without
a meeting by less than unanimous written consent shall be given
to those shareholders who have not consented in writing to such
action.
The Secretary of the Corporation shall file such consent or
consents, or certify the tabulations of such consents and file
such certificate with the minutes of the shareholders.
74
Section 12. Irregular Shareholders' Meetings. Actions taken at
any meeting of shareholders, however called and with whatever
notice, if any, are as valid as though taken at a meeting duly
called and held with notice if:
(a) all shareholders entitled to vote were present in
person or by proxy and no objection to holding the meeting was
made by any shareholder; or
(b) a quorum was present, either in person or by proxy,
and no objection to holding the meeting was made by any
shareholder entitled to vote and not present, and if, either
before or after the meeting, each of the persons entitled to
vote, not present in person or by proxy, signs a written waiver
of notice, or a consent to the holding of the meeting, or an
approval of the action taken as shown by the minutes thereof.
All such waivers, consents or approval shall be filed with the
corporate records or be made a part of the minutes. The absence
from the minutes of any indication that a shareholder objected
to holding the meeting shall prima facie establish that no such
objection was made.
Section 13. Order of Business. The order of business at
the annual meeting of the shareholders and, insofar as
practical, at all other meetings of shareholders, shall be
established by the Chairman.
ARTICLE III
Board of Directors
------------------
Section 1. General Powers. The business and affairs of the
Corporation shall be managed by the board of directors. The
board of directors shall be divided into three classes,
designated Classes I, II and III, which shall be as nearly equal
in number as possible. The initial directors of Class I shall be
elected to hold office for a term expiring at the annual meeting
of stockholders in 1995, the initial directors of Class II shall
be elected to hold office for a term expiring at the annual
meeting of stockholders in 1996, and the initial directors of
Class III shall be elected to hold office for a term expiring at
the annual meeting of stockholders in 1997. At each annual
meeting of stockholders following such initial classification and
election, the respective successors of each class shall be
elected for three-year terms.
Section 2. Number, Election and Term of Office. The number
of directors shall be fixed from time to time by resolution of
the board of directors, but shall not be less than three (3) nor
more than eleven (11). In case of any increase in the number of
75
directors in advance of an annual meeting of stockholders, each
additional director shall be elected by the directors then in
office, although less than a quorum, to hold office until the
next election of the class for which such director shall have
been chosen, and until his successor shall have been duly elected
and qualified (subject to Section 3 of this Article III). No
decrease in the number of directors shall shorten the term of any
incumbent director. Any newly-created or eliminated
directorships resulting from an increase or decrease shall be
apportioned by the board of directors among the three classes of
directors so as to maintain such classes as nearly equal as
possible. It shall not be a qualification of office that the
directors be residents of the State of Delaware or stockholders
of the Corporation.
Section 3. Vacancies. In case of any vacancy in the board
of directors through death, resignation, retirement, removal,
disqualification or other cause, the remaining directors, by vote
of a majority thereof, shall elect a successor to hold office for
the unexpired portion of the term of office of the class for
which such vacancy occurs, and until the election of his
successor. Any director elected by the remaining board of
directors to fill a vacancy created by any of the foregoing
reasons or by an increase in the number of directors constituting
the entire board of directors must subsequently be approved or
confirmed by the holders of a majority of the shares of common
stock of the Corporation present in person, or represented by
proxy, and entitled to vote at the next annual meeting of
stockholders. If the director elected to fill such vacancy by
the board of directors is not subsequently approved by the
stockholders, and if another candidate is not elected at the
annual meeting of stockholders in accordance with federal
securities laws and these bylaws, then the number of directors
constituting the entire board of directors will automatically be
reduced and, if necessary, the number of directors serving in
each class will be reapportioned so that the number of directors
serving in each class will be as nearly equal as possible.
Section 4. Meetings. The board of directors shall meet
each year following the annual meeting of the shareholders and
shall hold regular meetings on the third Tuesday of January,
March, May, July, September and November. Meetings of the board
of directors, regular or special, may be held either within or
without the State of Delaware. Regular meetings may be held
with or without notice. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting need be
specified in the notice or waiver of notice, unless otherwise
provided by law, the certificate of incorporation or these
bylaws.
76
One or more directors, or a member of a committee of the
board of directors, may participate in a meeting of the board of
directors or such committee by means of a conference telephone
or similar communications equipment enabling all directors
participating in the meeting to hear one another, and such
participation in a meeting shall constitute presence in person
at such meeting.
Section 5. Special Meetings. Special meetings of the board
of directors may be called by or at the request of the Chairman
or any three (3) directors. At least two (2) days' written or
oral notice of special meetings of the directors shall be given
to each director.
Section 6. Notice and Waiver. The attendance of a director
at a meeting shall constitute a waiver of notice of such
meeting, except when a director attends a meeting for the
express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
Section 7. Quorum and Voting. A majority of the authorized
number of directors shall constitute a quorum for the
transaction of business. If, at any meeting of the board of
directors, less than a quorum is present, a majority of those
directors present may adjourn the meeting from time to time
without further notice. The act of a majority of the directors
present at a duly called meeting at which a quorum is present at
the time of the act shall be the act of the board of directors.
The affirmative vote of the directors holding a majority of the
directorships shall be required for action by the board of
directors on any matter whatsoever.
Section 8. Action Without Meeting. Any action which is
required or permitted to be taken at any meeting of the board of
directors, or a committee thereof, may be taken without such a
meeting; provided, however, that all of the directors or all of
the members of a committee thereof, as the case may be,
severally or collectively consent in writing to such action
before or after the time such action is taken. The Secretary of
the Corporation shall file such consents with the minutes of the
meeting of the board of directors.
Section 9. Presumption of Assent. A director of the
Corporation who is present at a meeting of the directors at
which action on any corporate matter is taken shall be presumed
to have assented to the action taken unless a dissent shall be
entered in the minutes of the meeting or unless he shall file a
written dissent to such action with the person acting as the
clerk of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the Secretary of the
Corporation within five days after the adjournment of the
77
meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
Section 10. Executive Committee. The board of directors
shall designate three (3) directors to constitute an executive
committee. The executive committee shall have and may exercise
all of the authority of the board of directors subject, however,
to any limitations the board of directors may place on such
authority from time to time by resolution.
Section 11. Audit Committee. The board of directors shall
designate three (3) directors to constitute an audit committee.
The audit committee shall have and may exercise such authority
and perform such acts as the board of directors may from time to
time direct by resolution and/or as required by applicable law.
Section 12. Compensation Committee. The board of directors
shall designate four (4) directors to constitute a compensation
committee. The compensation committee shall set the
compensation of the President and review, from time to time, the
compensation policies and procedures of the Corporation. The
compensation committee shall have and may exercise such other
authority and perform such other acts as the board of directors
may, from time to time, direct by resolution.
Section 13. Ad Hoc Committees. The board of directors may
designate one (1) or more directors to constitute such ad hoc
committees as the board of directors shall deem necessary or
appropriate. Each such committee shall have and may exercise
all such authority of the board of directors as shall be
provided in the resolution establishing such committee, subject
to the provisions of the certificate of incorporation.
Section 14. Committee Minutes. Each committee shall keep
minutes of its proceedings, copies of which shall be provided to
each and every member of the board of directors.
Section 15. Alternate Committee Members. The board of
directors may designate one (1) or more directors to serve as
alternate members of any committee. An alternate may replace
any disqualified or absent member of the committee with respect
to which he was designated to serve as an alternate member;
provided, however, that in the event of the death or resignation
of any permanent committee member the board of directors must
designate a replacement and the alternate may not act in such
member's place.
Section 16. Compensation of Directors. The board of
directors shall determine the compensation, if any, to be paid
to the directors for their services as directors, including
reasonable allowance for expenses actually incurred in
78
connection with their duties. Nothing herein contained shall be
construed to preclude any director from serving the Corporation
in any other capacity and receiving compensation thereof when
properly authorized.
Section 17. [Intentionally Omitted.]
Section 18. Resignation. A director may resign at any time
by giving written notice to the board of directors, the
Chairman, or the Secretary of the Corporation. Unless otherwise
specified in the notice, the resignation shall be effective
immediately upon receipt thereof by the Corporation, and the
acceptance of the resignation shall not be necessary to make it
effective.
Section 19. Interested Directors. A contract or other
transaction between the Corporation and a director or a member
of his immediate family or between the Corporation and any other
corporation, firm, association or entity in which a director of
the Corporation and members of his immediate family have an
interest shall not be either void or voidable and such director
shall not incur any liability, merely because such director is a
party thereto or because of such family relationship or interest
if: (i) such family relationship or such interest, if it is a
substantial interest, is fully disclosed and the contract or
transaction is not unfair as to the Corporation and is
authorized by (a) directors or other persons who have no
substantial interest in such contract or transaction in such
manner as to be effective without the vote, assent or presence
of the director concerned or (b) the written consent of all the
directors who have no substantial interest in such contract or
transaction, whether or not such directors constitute a quorum
of the Board of directors; or (ii) such family relationship or
such interest, if it is a substantial interest, is fully
disclosed and the contract or transaction is approved by the
affirmative vote of the holders of a majority of the voting
power of the shares entitled to vote; or (iii) the contract or
transaction is not with the director or a member of his
immediate family and any such interest is not substantial or
(iv) the contract or transaction is fair as to the Corporation.
A contract or other transaction between a director or a member
of his immediate family with a third party which might otherwise
have been entered into by the Corporation and such third party
shall be deemed authorized if effected in compliance with this
section.
In the absence of fraud (without giving effect to the
meaning of that term under the applicable Federal or state
securities law), no director engaging in a transaction
authorized under the provisions hereof shall be liable to the
Corporation or to any shareholder or creditor thereof, or to any
79
other person for any loss incurred by it under or by reason of
such contract or transaction, nor shall any such director be
accountable for any gains or profits realized therefrom.
Section 20. Determination of Terms and Conditions of
Additional Classes of Stock. The board of directors is
authorized to fix and determine terms, limitations and relative
rights and preferences of any preferred or special class of
shares.
ARTICLE IV
Officers
---------
Section 1. Officers. The Board of Directors shall appoint
as officers of the Corporation a President, a Secretary, a
Treasurer and any number of Vice Presidents. The board of
directors may elect a Chairman of the board of directors and
may, in its discretion, appoint such other officers and
assistant officers as the business of the Corporation may
require. Any individual may hold more than one office;
provided, however, that no one individual may hold the offices
of President and Secretary.
Section 2. Election and Term of Office. The officers of
the Corporation shall be appointed or elected by the board of
directors in such manner as they may prescribe. Each officer
shall hold office for a term of one (1) year and until a
successor is elected and qualified, or until the death,
resignation or removal of such officer.
Section 3. Removal. Any officer or agent may be removed by
the board of directors at any time, with or without cause and
with or without notice or hearing. Such removal shall be
without prejudice to the contract rights, if any, of the person
so removed.
Section 4. Vacancies. A vacancy in any office because of
death, resignation, removal or otherwise, may be filled by the
board of directors for the unexpired portion of the term.
Section 5. Chairman. The Chairman shall preside at all
meetings of shareholders and directors and shall have such
powers as may be conferred from time to time by the board of
directors. He shall be a member of all committees of the board
of directors.
Section 6. President. The President shall be the chief
executive officer of the Corporation; he shall have general and
active management of the business of the Corporation, shall see
80
that all orders and resolutions of the board of directors are
carried into effect, subject, however, to the right of the board
of directors to delegate any specific powers, except as may be
exclusively conferred on the President by law, to the Chairman
or any other officer of the Corporation. He shall execute
bonds, mortgages and other contracts requiring a seal under the
seal of the Corporation. He shall be an EX-OFFICIO member of
all committees of the Board of Directors except when the office
of Chairman and President are held by the same individual, and
shall have the general power and duties of supervision and
management usually vested in the office of President of a
corporation.
Section 7. Vice Presidents. In the absence of the
President or in the event of the inability or refusal to act of
the President, the Vice-President, if one is appointed, or if
there shall be more than one Vice-President, the Vice Presidents
in the order designated by the directors (or if there be no such
designation, then in the order of their election) shall perform
the duties of the President, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the
President. The Vice Presidents shall perform such other duties
and have such other powers as the board of directors may from
time to time prescribe.
Section 8. Secretary. The Secretary shall attend all
meetings of the board of directors and all meetings of the
shareholders and act as clerk thereof, and record all votes of
the directors and shareholders and the minutes of all
proceedings of the directors and shareholders in a book to be
kept for that purpose and shall perform like duties for the
committees of the board of directors when required. The
Secretary shall give, or cause to be given, all notices required
by law or these bylaws, and shall perform such other duties as
may be prescribed by the board of directors or President, under
whose supervision he shall be. The Secretary shall have custody
of the corporate seal of the Corporation and he, or an Assistant
Secretary, shall have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested
by his signature or by the signature of an Assistant Secretary.
The board of directors may give general authority to any other
officer to affix the corporate seal of the Corporation and to
attest to the affixing by his signature.
Section 9. Assistant Secretary. The Assistant Secretary,
if one shall be appointed, or if there be more than one, the
Assistant Secretaries in the order determined by the board of
directors (or if there be no such determination, then in the
order of their election) shall, in the absence of the Secretary
or in the event of his inability or refusal to act, perform the
duties and exercise the powers of the Secretary and shall
81
perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
Section 10. Treasurer. The Treasurer shall have charge and
custody of and be responsible for all funds and securities of
the Corporation, keep full and accurate accounts of receipts and
disbursements and other customary financial records of the
Corporation, deposit all monies and valuable effects in the name
and to the credit of the Corporation in depositories designated
by the board of directors, disburse the funds of the Corporation
as may be ordered by the board of directors or the President,
taking proper vouchers for such disbursements, render to the
board of directors or the President whenever they request an
accounting of all of his transactions as Treasurer or of the
financial condition of the Corporation and, in general, perform
such other duties as may from time to time be assigned to him by
the board of directors or by the President or as are incident to
the office of Treasurer.
Section 11. Assistant Treasurer. The Assistant Treasurer,
if one shall be appointed, or if there shall be more than one,
the Assistant Treasurers in the order determined by the board of
directors (or if there be no such determination, then in the
order of their election) shall, in the absence of the Treasurer
or in the event of his inability or refusal to act, perform the
duties and exercise the powers of the Treasurer and shall
perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
Section 12. Absence or Disability of Officers. In the case
of the absence or disability of any officer of the Corporation
and of any person hereby authorized to act in his place during
his absence or disability, the board of directors may by
resolution delegate the powers and duties of such officer to any
other officer, or to any director, or to any other person whom
it may select.
ARTICLE V
Issue and Transfer of Stock
---------------------------
Section 1. Certificate for Shares. Certificates
representing shares of the Corporation shall be in such form as
shall be determined by the board of directors. Such
certificates shall be signed by the President and by the
Secretary or by such other officers authorized by law and by the
board of directors. All certificates for shares of each class
shall be consecutively numbered or otherwise identified and
sealed with the seal of the Corporation. The names and
addresses of the shareholders, the number of shares, and dates
82
of issue shall be entered on the stock transfer books of the
Corporation.
If the Corporation shall be authorized to issue more than
one class of stock or more than one series of any class, the
powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or
series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set
forth in full or summarized on the face or back of the
certificate which the Corporation shall issue to represent such
class or series of stock; provided, however, that, except as
otherwise provided in Section 202 of the General Corporation Law
of Delaware, in lieu of the foregoing requirements, there may be
set forth on the face or back of the certificate which the
Corporation shall issue to represent such class or series of
stock, a statement that the Corporation will furnish without
charge to each shareholder who so requests the powers,
designations, preferences and relative participating, optional
or other special rights of each class of stock or series thereof
and the qualifications, limitations or restrictions of such
preferences and/or rights.
Within a reasonable time after the issuance or transfer of
uncertificated stock, the Corporation shall send to the
registered owner thereof a written notice containing the
information required to be set forth or stated on certificates
pursuant to Sections 151, 156, 202(a) or 218(a) of the General
Corporation Law of Delaware or a statement that the corporation
will furnish without charge to each shareholder who so requests
the powers, designations, preferences and relative
participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights.
Any or all of the signatures on a certificate may be
facsimile. In case any officer, transfer agent or registrar who
has signed or whose facsimile signature has been placed upon a
certificate shall cease to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by
the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
Section 2. Subscriptions for Stock. Unless otherwise
provided for in the subscription agreement, subscriptions for
shares shall be paid in full at such time, or in such
installments and at such times as shall be determined by the
board of directors. Any call made by the board of directors for
payment on subscriptions shall be uniform as to all shares of
the same class or as to all shares of the same series. In case
of default in the payment of any installment or call when such
83
payment is due, the Corporation may proceed to collect the
amount due in the same manner as any debt due the Corporation;
provided, however, that such subscription is in writing and
signed by the subscriber.
Section 3. Issuance of Stock. The board of directors is
hereby authorized and empowered to issue from time to time all
or any part of the shares of its unissued authorized capital
stock, as then constituted, for such consideration, in money or
other property, as the board of directors may deem advisable;
and all shares of the capital stock of this Corporation when
issued shall be deemed fully paid and nonassessable and the
holders of such shares shall not be liable thereunder to this
Corporation or its creditors.
Section 4. Transfer of Shares.
--------------------
a. Upon surrender to the Corporation or the transfer
agent(s) of the Corporation, if any, of a certificate for shares
duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, it shall be the duty of the
Corporation or the transfer agent(s) of the Corporation, if any,
to issue a new certificate to the person entitled thereto, and
cancel the old certificate; every such transfer shall be entered
on the transfer book of the Corporation which shall be kept at
its principal office or the office of its transfer agent.
b. All certificates surrendered to the Corporation for
transfer shall be canceled and no new certificate shall be
issued until the former certificate for a like number of shares
shall have been surrendered and canceled.
c. The Corporation shall be entitled to treat the holder
of record of any share as the holder in fact thereof and,
accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such share on the part of any
other person whether or not it shall have express or other
notice thereof, except as expressly provided by law.
Section 5. Lost, Destroyed and Stolen Certificates. Unless
otherwise restricted by law, the Corporation may refuse to issue
a certificate in place of any certificate alleged to have been
lost, destroyed, stolen, or mutilated except on production of
such terms and indemnification to the Corporation as the
directors may prescribe.
ARTICLE VI
Fiscal Year
------------
84
The fiscal year of the Corporation shall be designated by
the board of directors.
ARTICLE VII
Seal
----
The corporate seal of this Corporation shall be a circular
seal and shall have inscribed thereon the Corporation's name and
state of incorporation.
ARTICLE VIII
Amendments
-----------
Section 1. By Directors or Shareholders. The bylaws of the
Corporation may be altered, amended or repealed at any validly
called and convened meeting of the shareholders by the
affirmative vote of the holders of a majority of the voting
power of shares entitled to vote thereon represented at such
meeting in person or by proxy and at any validly called and
convened meeting of the board of directors by the affirmative
vote of a majority of the directors; provided, however, that the
notice of such meeting shall state that such alteration,
amendment or repeal will be proposed.
Section 2. Record of Changes. Whenever a bylaw is amended
or repealed or a new bylaw is adopted, such action and the date
on which it was taken shall be noted on the original bylaws in
the appropriate place or a new set of bylaws shall be prepared
incorporating such changes.
Section 3. Inconsistencies with Certificate of
Incorporation. If any provisions of these bylaws shall be found
to be inconsistent with any provisions of the certificate of
incorporation, as presently existing, or as from time to time
amended, the latter shall constitute the controlling authority.
ARTICLE IX
Miscellaneous
-------------
Section 1. Inspection of Corporate Records. The
Corporation shall keep correct and complete books and records of
account and shall also keep minutes of all meetings of
shareholders and directors. Additionally, a record shall be
kept at the principal executive office of the Corporation,
giving the names and addresses of all shareholders, and the
85
number and class or classes of shares held by each. The
original or a copy of the certificate of incorporation and
bylaws of the Corporation, as amended, or otherwise altered to
date, and certified by the Secretary of the Corporation, shall
at all times be kept at the principal office of the Corporation
and shall be open to inspection by all shareholders of record or
holders of voting trust certificates at all reasonable times
during the business hours of the Corporation.
At intervals of not more than twelve (12) months, the
Corporation shall prepare a balance sheet showing the financial
condition of the Corporation as of a date not more than four (4)
months prior thereto and a profit and loss statements respecting
its operation for the twelve months preceding such date. The
balance sheet and a profit and loss statement shall be deposited
at the principal office of the Corporation and kept for at least
ten years from such date.
Any shareholder of record shall, upon written request under
oath to the Corporation stating the purpose thereof, have the
right to conduct an examination in person, or by agent or
attorney, at any reasonable time, for a specified, reasonable
and proper purpose, of the Corporation's stock transfer books, a
list of its shareholders and the board of directors, these
bylaws, its minutes of the meetings of shareholders and the
board of directors, and its other books and records, and to make
copies and extracts thereof. A specified, reasonable and proper
purpose shall mean a purpose reasonably related to such person's
interest as a shareholder. In every instance, where an attorney
or other agent shall be the person who seeks the right to
inspection, the demand under oath shall be accompanied by a
power of attorney or such other writing which authorizes the
attorney or other agent to so act on behalf of the shareholder.
Section 2. Notices. Whenever, under the provisions of
applicable law, the certificate of incorporation or these
bylaws, notice is required to be given to any director or
shareholder, it shall not be construed to mean personal notice,
but such notice may be given in writing, by mail, addressed to
such director or shareholder, at his address as it appears on
the records of the Corporation, with postage thereon prepaid,
and such notice shall be deemed to be given at the time when the
same shall be deposited in the United States mail; provided,
however, that in the case of shareholders which are employees of
the Corporation delivery at the office address of such employee
shall be sufficient. Notice to directors may also be given by
telegram, and, where specifically provided for herein, orally.
Section 3. Waiver of Notice. Unless otherwise provided by
law, whenever any notice is required to be given to any
shareholder or director of the Corporation under the provisions
86
of these bylaws or under the provisions of the certificate of
incorporation, a waiver thereof in writing, signed by the person
or persons entitled to such notice shall be deemed equivalent to
the giving of such notice. Attendance in person at any meeting
shall constitute waiver of notice unless such attendance is for
the purpose of contesting proper notice of the meeting.
ARTICLE X
Certification
---------------
These amended and restated bylaws have been prepared
pursuant to a resolution duly adopted by the board of directors
and the stockholders dated June 8, 1994, and are the true and
correct bylaws of the Corporation as of the effective date.
In Witness Whereof, the undersigned, Kenneth M. Dorros,
Secretary of the Corporation has set his hand and seal of the
Corporation as of the 15th day of June, 1994.
-------------------------------
Kenneth M. Dorros
Secretary
87
<EX-10.16>
Exhibit 10.16
AGREEMENT
AGREEMENT dated as of January 10, 1994 between Shared
Technologies Inc., (the "Company") and Vertical Financial Holding
("Vertical").
W I T N E S S E T H:
WHEREAS, the Company desires to receive advisory services in
connection with (a) structuring equipment leases for potential
customers, (b) marketing the Company's products outside the
United States, (c) arranging additional financing, including debt
facility arrangements with prospective banks to enhance the
Company's working capital, and (d) structuring and negotiating
the prospective acquisition of Access Telecommunication Group,
LP. ("Access") as well as arranging and/or assisting the Company
in obtaining financing for such acquisition, in each case for the
further growth of the Company's business, collectively, the
"Objectives"); and
WHEREAS, Vertical has established its expertise in, among
other things, assisting companies in marketing their products
internationally, structuring leasing transactions and assisting
companies in their mergers & acquisitions activities, including
but not limited to, structuring such transactions, as well as
providing the financing for such transactions.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements, and upon the terms and subject to the conditions
hereinafter set forth, the parties do hereby covenant and agree
as follows:
VERTICAL ENGAGEMENT. THE COMPANY ENGAGES VERTICAL, AND
VERTICAL ACCEPTS SUCH ENGAGEMENT, SUBJECT TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT.
SERVICES. (A) AT SUCH TIMES AS ARE MUTUALLY CONVENIENT
TO VERTICAL AND THE COMPANY DURING THE TERM (AS DEFINED BELOW),
VERTICAL SHALL USE ITS BEST EFFORTS TO ASSIST THE COMPANY IN
CONNECTION WITH EACH OF THE OBJECTIVES, INCLUDING THE
PRESENTATION OF A PROPOSAL FOR THE FORMATION OF A POSSIBLE JOINT
VENTURE BETWEEN THE PARTIES FOR THE PURPOSES OF MARKETING ITS
PRODUCTS INTERNATIONALLY.
88
IN CONNECTION WITH ANY PROPOSAL
MADE BY VERTICAL PURSUANT TO THIS AGREEMENT, THE
COMPANY SHALL EXERCISE ITS GOOD FAITH IN CONSIDERING
SUCH PROPOSAL BUT SHALL NOT BE OBLIGATED TO ACCEPT SUCH
PROPOSAL.
(c) Vertical shall exercise its obligations under the
Agreement in a highly prompt manner, particularly with respect to
the financing of the prospective acquisition of Access.
COMPENSATION. FOR SERVICES RENDERED BY VERTICAL PURSUANT
TO THIS AGREEMENT, THE COMPANY SHALL:
PAY VERTICAL $150,000, WHICH SHALL
BE PAID IN FULL WITHIN FOUR MONTHS OF THE CONSUMMATION
OF THE PROSPECTIVE ACQUISITION OF ACCESS, PROVIDED
HOWEVER, THAT IN THE EVENT THAT THE RATIO (THE "RATIO")
OF THE COMPANY'S CURRENT ASSETS AND CURRENT LIABILITIES
EXCEEDS 1:1, SUCH PAYMENT SHALL BE DEFERRED UNTIL SUCH
TIME AS THE COMPANY ACHIEVES THIS RATIO AS OF THE END
OF ANY CALENDAR MONTH.
ISSUE TO VERTICAL (I) A THREE-YEAR
WARRANT TO PURCHASE 300,000 SHARES OF COMMON STOCK OF
THE COMPANY AT A PURCHASE PRICE OF $5.75 PER SHARE, AND
A FIVE-YEAR WARRANT (II) TO PURCHASE 250,000 SHARES OF
COMMON STOCK OF THE COMPANY AT A PURCHASE PRICE OF
$7.00 PER SHARE (COLLECTIVELY, THE "WARRANTS"). THE
WARRANTS SHALL CONTAIN STANDARD ANTI-DILUTION
PROVISIONS AND ONE DEMAND AND UNLIMITED PIGGYBACK
REGISTRATION RIGHTS, SUBJECT TO CUSTOMARY PROVISIONS
(AT THE COMPANY'S EXPENSE, EXCEPT FOR UNDERWRITING
COMMISSIONS).
DURING THE TERM, PAY VERTICAL A
RETAINER OF $3,000 PER MONTH FOR SERVICES RENDERED
HEREUNDER.
UPON EXECUTION OF THIS AGREEMENT,
PAY VERTICAL $30,000, WHICH FEE SHALL BE IN ADDITION TO
ALL FEES RECEIVED PURSUANT TO SECTIONS 3(A) AND 3(C)
HEREOF.
Section 4. Subscription of Stock. The parties agree that
Vertical, through its affiliate, General Capital Holdings, Ltd.,
shall have the right to acquire from the Company shares of Common
89
Stock of Shared Technologies Cellular, Inc. ("STC") held by the
Company, equal to approximately 1.5% of STC total outstanding
stock at a price equal to $54.06 per share.
Section 5. Expenses. The Company shall pay Vertical, on a
monthly basis, all reasonable costs and out-of-pocket expenses
incurred by Vertical in connection with its obligations and
duties under this Agreement; provided, however, that Vertical
shall obtain the prior written consent of the Company for any
single item of expense in excess of $1,000. The Company's
consent hereunder shall not be unreasonably withheld or delayed.
Vertical shall furnish receipts for all such expenses.
Section 6. Non-Competition. Vertical acknowledges that in
the course of its engagement it will become familiar with trade
secrets and other confidential information ("Confidential
Information") concerning the Company and that its services will
be special, unique and extraordinary to the Company. Subject to
the limitations set forth herein, Vertical agrees that during the
Term (as defined below) and for a period of two years thereafter,
it shall not directly or indirectly, through its affiliates,
including Jacob Agam and companies which are controlled by Mr.
Agam (the "Vertical Group"), or otherwise, own, manage, control,
participate in, consult with, render services to, or in any
manner engage in any business competitive with the business of
the Company as such business exists within any geographical area
in which the Company then conducts business. In addition, the
Vertical Group shall not solicit, interfere with or conduct
business with any vendors, customers or employees of the Company
during the Term of this Agreement and for a period of two years
thereafter. In the event the Company breaches its duties or
obligations under this Agreement (including Sections 3 and 4
hereof), the Company agrees that the Vertical Group shall not be
bound by the provisions of this Section 5, except for the
provisions of the immediately following sentence. The Vertical
Group agrees that it shall not disclose to any third party any
Confidential Information and shall not use any Confidential
Information for any purpose other than the performance of
Vertical's duties under this Agreement. Vertical acknowledges
that the violation of this agreement may cause irreparable harm
to the Company, its subsidiaries or affiliates, and monetary
damages will not be an adequate remedy in the event of a breach
and accordingly, the Company will be entitled to seek appropriate
injunctive and other equitable relief.
Section 7. Term. This Agreement shall be for a term
commencing on the date hereof and ending on November 10, 1996
(the "Term").
Section 8. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the internal laws of the
90
State of New York. Any dispute between the parties hereto
arising from or relating to the terms of this Agreement shall be
submitted to arbitration in New York, New York under the auspices
of the American Arbitration Association.
Section 9. Entire Agreement; Amendments. This Agreement
contains the entire agreement and understanding between the
parties and supersedes and preempts any prior understandings or
agreements, whether written or oral. The provisions of this
Agreement may be amended or waived only with the prior written
consent of the Company and Vertical.
Section 10. Successors and Assigns. This Agreement shall
be binding upon, inure to the benefit of, and shall be
enforceable by Vertical and the Company and their respective
successors and assigns; provided, however, that the rights and
obligations of Vertical under this Agreement (with the exception
of those rights in Section 3 hereof) shall not be assignable.
Section 11. Indemnification. The Company hereby expressly
agrees to indemnify and hold harmless Vertical, its officers and
employees against and from any and all loss, liability, suits,
claims, costs, damages and expenses (including attorneys' fees)
arising from their performance hereunder, except as a result of
their negligence or misconduct.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
SHARED TECHNOLOGIES INC.
By:-----------------------------
Name:
Title:
VERTICAL FINANCIAL HOLDING
By:------------------------------
Name:
91
Title:
92
<EX-11>
EXHIBIT 11
Page 1 of 3
SHARED TECHNOLOGIES INC.
Computation of Earnings Per Share and
Weighted Average Number of Shares Outstanding
For the Period Ended December 31, 1992
Percentage
Shares of Year Weighted
Date Issued Issued Outstanding Average
--------------- --------------------------------------
January 1, 1992.....3,740,732 100.00% 3,740,732
------------
3,740,732
April 8, 1992....... 19,014 73.22 13,922
------------
3,759,745
May 22, 1992....... 471 61.20 288
------------
3,760,217
September, 22, 1992. 80,000 27.60 22,077
------------
3,840,217
September 23, 1992.. 466,250 27.32 127,391
------------
4,306,467
September 24, 1992.. 306,750 27.05 82,973
------------
4,613,217
September 25, 1992.. 100,000 26.78 26,776
-------------
4,713,217
September 30, 1992.. 151,850 25.41 38,585
-------------
4,865,067
October 1, 1992.... 1,313 25.14 330
-------------
4,866,379
October 15, 1992.... 2,625 21.31 559
-------------
4,869,004
November 25, 1992.. 28,042 10.11 2,835
-------------
4,897,046
November 30, 1992... 12,554 8.74 1,098
-------------
4,909,600
December 14, 1992.. 100,000 4.92 4,918
-------------
4,009,600
December 31, 1992... 82,596 0.27 226
-------------
5,092,197
93
Weighted Average Common Shares Outstanding 4,062,710
Net Income Per Common Share:
Net Income Applicable to Common Stock
For the Year Ended
December 31, 1992 $2,389,821
---------- = $.59
Weighted Average Number of Shares Outstanding 4,062,710
The above shares reflect the September 1992 one-for-four reverse
stock split.
94
EXHIBIT 11
Page 2 of 3
SHARED TECHNOLOGIES INC.
Computation of Earnings Per Share and
Weighted Average Number of Shares Outstanding
For the Period Ended December 31, 1993
Percentage
Shares of Year Weighted
Date Issued Issued Outstanding Average
---------------- --------------------------------------
January 1, 1993.... 5,092,197 100.00% 5,092,197
----------
5,092,197
January 15, 1993 .. 5,000 96.16 4,808
----------
5,097,197
April 22, 1993...... 10,000 69.59 6,959
----------
5,107,197
June 18, 1993...... 34,152 53.97 18,432
----------
5,141,349
September 15, 1993.. 9,467 29.59 2,801
----------
5,150,816
October 5, 1993..... 13,793 24.11 3,325
----------
5,164,609
October 29, 1993.... 20,000 17.53 3,507
----------
5,184,609
December 15, 1993... 5,728 4.66 267
---------- --------
5,190,337 5,132,296
Net Income Per Common Share:
Net Loss For the Period Ended
December 31, 1993 $ (204,476)
----------- = $(.04)
Weighted Average Number of
Shares Outstanding 5,132,296
95
EXHIBIT 11
Page 3 of 3
SHARED TECHNOLOGIES INC.
Computation of Earnings Per Share and
Weighted Average Number of Shares Outstanding
For the Period Ended December 31, 1994
Percentage
Shares of Year Weighted
Date Issued Issued Outstanding Average
--------------- --------------------------------------
January 1, 1994.... 5,666,699 100.00% 5,666,699
---------
5,666,699
February 7, 1994... 1,061 89.86 953
----------
5,667,760
May 27, 1994... 307,139 60.00 184,283
----------
5,974,899
June 13, 1994...... 11,354 55.34 6,284
---------
5,986,253
June 27, 1994..... 1,762,033 51.51 907,568
---------
7,748,286
August 1, 1994..... 8,215 41.92 3,444
----------
7,756,501
August 15, 1994.... 25,000 38.08 9,521
-----------
7,781,501
September 28, 1994. 51,589 26.03 3,427
-----------
7,833,090
December 29, 1994.. 11,992 .82 99
-----------
7,845,082 6,792,277
========== =========
Net Income (Loss) Per Common Share:
Net Loss Applicable to Common Stock
For the Year Ended
December 31, 1994 1,807,826
--------- = $.27
Weighted Average Number of
Shares Outstanding 6,792,277
96
The above shares have been restated to reflect the September 1992
one-for-four reverse stock split.
97
<EX-21>
Exhibit 21
The following table indicates the subsidiaries and
partnerships owned by the Company.
Shared Technologies Cellular, Inc.+......................a
Delaware corporation
Multi-Tenant Services, Inc. ++...........................a
Delaware corporation
SafeCall, Inc.+..........................................a
Delaware corporation
Financial Place Communications Company*.........an Illinois
general partnership
Boston Telecommunications Group, Inc. ++
d/b/a Boston Telecommunications Company........a
Massachusetts corporation
STI Cellular Franchise Corp.**...........................a
Delaware corporation
Access Communication Group, L.P. +++................a Texas
limited partnership
Access Telemanagement, Inc. ++..............................a
Texas corporation
Access Network Services, Inc. ***...........................a
Texas corporation
_ _ _ _ _ _ _ _ _ _ _
+ a majority-owned subsidiary of Shared Technologies Inc.
++ a wholly-owned subsidiary of Shared Technologies Inc.
* 99% owned by the Company
** a wholly-owned subsidiary of Shared Technologies Cellular,
Inc.
+++ 99% owned by the Company and 1% owned Access Telemanagement,
Inc.
*** a wholly-owned subsidiary of Access Communication Group, L.P.
98