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EXHIBIT 4.1
FORM
OF
RESTATED ARTICLES OF INCORPORATION
OF
MICROSOFT CORPORATION
Pursuant to RCW 23B.10.070, the following Restated Articles of
Incorporation are hereby submitted for filing:
ARTICLE I
NAME
The name of the corporation is Microsoft Corporation.
ARTICLE II
REGISTERED OFFICE AND AGENT
The address of the registered office of the "Corporation" is 5000
Columbia Center, 701 Fifth Avenue, Seattle, Washington 98104-7078, and the name
of the registered agent at such address is PTSGE Corp.
ARTICLE III
PURPOSE
The Corporation is organized for the purposes of transacting any and
all lawful business for which a corporation may be incorporated under the
Washington Business Corporation Act, Title 23B of the Revised Code of
Washington, now or hereafter in force (the "Act").
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ARTICLE IV
CAPITAL SHARES
4.1 AUTHORIZED SHARES. The total number of shares of stock which the
Corporation shall have authority to issue is 4,100,000,000 shares, which shall
consist of 4,000,000,000 shares of common stock, $.000025 par value per share
("Common Shares") and 100,000,000 shares of preferred stock , $.01 par value per
share ("Preferred Shares"). Except as otherwise provided in accordance with
these Articles of Incorporation, the Common Shares shall have the unlimited
voting rights, with each share being entitled to one vote, and the rights to
receive the net assets of the Corporation upon dissolution, with each share
participating on a prorata basis.
4.2 ISSUANCE OF PREFERRED SHARES. The Board of Directors is hereby
authorized from time to time, without shareholder action, to provide for the
issuance of Preferred Shares in one or more series not exceeding in the
aggregate the number of Preferred Shares authorized by these Articles of
Incorporation, as amended from time to time; and to determine with respect to
each such series the voting powers, if any (which voting powers, if granted, may
be full or limited), designations, preferences, and relative, participating,
option, or other special rights, and the qualifications, limitations, or
restrictions relating thereto, including without limiting the generality of the
foregoing, the voting rights relating to Preferred Shares of any series (which
may be one or more votes per share or a fraction of a vote per share, which may
vary over time, and which may be applicable generally or only upon the happening
and continuance of stated events or conditions), the rate of dividend to which
holders of Preferred Shares of any series may be entitled (which may be
cumulative or noncumulative), the rights of holders of Preferred Shares of any
series in the event of liquidation, dissolution, or winding up of the affairs of
the Corporation, the rights, if any, of holders of Preferred Shares of any
series to convert or exchange such Preferred Shares of such series for shares of
any other class or series of capital stock or for any other securities,
property, or assets of the Corporation or any subsidiary (including the
determination of the price or prices or the rate or rates applicable to such
rights to convert or exchange and the adjustment thereof, the time or times
during which the right to convert or exchange shall be applicable, and the time
or times during which a particular price or rate shall be applicable), whether
or not the shares of that series shall be redeemable, and if so, the terms and
conditions of such redemption, including the date or dates upon or after which
they shall be redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions and at different
redemption dates, and whether any shares of that series shall be redeemed
pursuant to a retirement or sinking fund or otherwise and the terms and
conditions of such obligation.
4.3 FILINGS AND EFFECTIVENESS. Before the Corporation shall issue any
Preferred Shares of any series, Articles of Amendment or Restated Articles of
Incorporation, fixing the voting powers, designations, preferences, the
relative, participating, option, or other rights, if any, and the
qualifications, limitations, and restrictions, if any, relating to the Preferred
Shares of such
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series, and the number of Preferred Shares of such series authorized by the
Board of Directors to be issued shall be filed with the secretary of state in
accordance with the Washington Business Corporation Act ("WBCA") and shall
become effective without any shareholder action. The Board of Directors is
further authorized to increase or decrease (but not below the number of such
shares of such series then outstanding) the number of shares of any series
subsequent to the issuance of shares of that series.
4.4 TERMS OF % CONVERTIBLE EXCHANGEABLE PRINCIPAL-PROTECTED
PREFERRED SHARES.
4.4.1 Designation and Amount. The shares of such series shall
be designated " % Convertible Exchangeable Principal-Protected Preferred
Shares, Series A," and the number of shares constituting such series shall
initially be a maximum of . The shares of such series shall have a stated par
value of $.01 per share. Such series is herein sometimes referred to as the
"Series A Preferred Shares."
4.4.2 Preferred Dividends. (a) The holders of Series A
Preferred Shares shall be entitled to receive, when, as and if declared by the
Board of Directors, out of funds of the Corporation legally available therefor,
cash dividends ("Preferred Dividends") at the annual rate of $ per share,
payable quarterly in arrears on each , , and in each
year (each a "Dividend Payment Date"), commencing , 199 (and, in
the case of any accrued but unpaid dividends, at such additional times and for
such interim periods, if any, as determined by the Corporation's Board of
Directors). In the event that any Dividend Payment Date shall fall on any day
other than a Business Day (as defined in paragraph (b) of Section 4.4.3), the
Preferred Dividend due on such Dividend Payment Date shall be paid on the
Business Day immediately following such Dividend Payment Date. Preferred
Dividends shall begin to accrue from the date of initial issuance of the Series
A Preferred Shares. Preferred Dividends will cease to accrue on Series A
Preferred Shares on the Conversion Date (as defined in Section 4.4.3) or on the
date of their earlier exchange for Convertible Notes (as defined in Section
4.4.7). Preferred Dividends shall accrue on a daily basis whether or not in any
such quarterly period there shall be funds of the Corporation legally available
therefor and whether or not such Preferred Dividends are declared, but Preferred
Dividends accrued for any period less than a full quarterly period between
Dividend Payment Dates (or, in the case of the first Preferred Dividend, from
the date of initial issuance of the Series A Preferred Shares through the first
Dividend Payment Date) shall be computed on the basis of a 360-day year
consisting of twelve 30-day months. Accrued but unpaid Preferred Dividends shall
cumulate as of the Dividend Payment Date on which they first become payable, but
no interest shall accrue on accumulated but unpaid Preferred Dividends.
Preferred Dividends shall be payable to holders of record as they appear on the
stock transfer records of the Corporation on such record dates, which shall be
not more than 60 days nor less than 10 days preceding the payment dates, as
shall be fixed by the Board of Directors.
(b) So long as any Series A Preferred Shares are outstanding,
the Corporation may not (i) declare or pay any dividends (other than dividends
payable in Common Shares or other shares of the Corporation ranking junior to
the Series A Preferred Shares) to holders of Common Shares or shares of the
Corporation of any other class ranking on a parity with or junior
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to the Series A Preferred Shares, or (ii) make any distributions of assets
(directly or indirectly, by purchase, redemption or otherwise) to the holders of
Common Shares or shares of the Corporation of any other class ranking on a
parity with or junior to the Series A Preferred Shares, unless all accrued and
unpaid Preferred Dividends, including the full dividends for the then quarterly
dividend period, shall have been paid or declared and funds sufficient for
payment thereof set apart.
(c) No dividends may be paid upon or declared or set apart for
any Preferred Shares ranking on a parity with the Series A Preferred Shares for
any quarterly dividend period, unless at the same time a like proportionate
dividend for the same quarterly dividend period, ratably in proportion to the
respective annual dividend rates fixed therefor, shall be paid upon or declared
or set apart for the Series A Preferred Shares.
4.4.3 Conversion of Series A Preferred Shares.
(a) Automatic Conversion on Conversion Date. On , 1999
(the "Conversion Date"), unless previously exchanged for Convertible Notes, as
described in Section 4.4.5 below, each outstanding Series A Preferred Share
shall automatically convert into that number of Common Shares of the Corporation
determined by multiplying each Series A Preferred Share by the Exchange Rate.
However, in lieu of delivering Common Shares on the Conversion Date, the
Corporation may, at its option, convert each Series A Preferred Share into an
amount of cash (a "Cash Settlement") determined by multiplying the Current
Market Price of the Common Shares by the Exchange Rate. In either event, each
holder of Series A Preferred Shares will receive in cash any unpaid dividends
which have accrued to the Conversion Date. The Exchange Rate is equal to (i) if
the Current Market Price of the Common Shares is greater than or equal to $
per share (the "Threshold Price"), a ratio equal to the Threshold Price divided
by the Current Market Price, (ii) if the Current Market Price is less than the
Threshold Price but greater than the Initial Price, a ratio of 1.0, and (iii) if
the Current Market Price is less than or equal to the Initial Price, a ratio
equal to the Initial Price divided by the Current Market Price, subject in each
case to adjustments in certain events.
(b) Definitions. As used in this Article:
"Business Day" means any day other than a Saturday,
Sunday or a day on which banking institutions in the state of New York
are authorized or obligated by law or executive order to close.
"Closing Price" of a Common Share on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of such share as reported by
The Nasdaq National Market on such date, or, if it is not so reported,
as reported in the composite transactions for the principal United
States securities exchange on which the Common Shares are so listed,
or, if it is not so listed on a United States national or regional
securities exchange, the last quoted bid price of the
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Common Shares in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or, if such bid
price is not available, the market value of a Common Share on such date
as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Corporation.
"Current Market Prices" except as used in Section
4.4.3(d)(ii) and (iii), means the average Closing Price per Common
Share of the Corporation on the 20 Trading Days beginning on the
twenty-second Trading Day immediately prior to, but not including, the
Conversion Date and ending on the second Trading Day immediately prior
to, but not including, the Conversion Date.
"Initial Price" means $________ per Common Share.
"Trading Day" means a day on which the Common Shares
(i) are not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the
close of business and (ii) has traded at least once on the national or
regional securities exchange or association or over-the-counter market
that is the primary market for the trading of such security.
(c) Notice of Election to Settle in Cash; No Fractional
Shares. The Corporation shall mail written notice of its election to settle the
conversion of the Series A Preferred Shares in cash to each holder of record of
Series A Preferred Shares not less than 30 Trading Days nor more than 45 Trading
Days prior to the Conversion Date. Upon surrender of certificates for Series A
Preferred Shares to be converted, as required herein (except in the case of a
Cash Settlement), the Corporation shall issue the number of full Common Shares
issuable upon conversion thereof. No fractional Common Shares will be issued
upon conversion, but in lieu thereof, in the sole discretion of the Board of
Directors, either such fractional interest shall be rounded up to the next whole
share or an amount will be paid in cash by the Corporation for such fractional
interest based upon the Current Market Price.
(d) Exchange Rate Adjustments. The Exchange Rate shall be
subject to adjustment from time to time as provided below in this paragraph (d).
All adjustments to the Exchange Rate shall be calculated to the nearest
1/10,000th of a Common Share.
(i) If the Corporation shall either:
(1) pay a dividend or make a distribution
with respect to Common Shares in Common Shares,
(2) subdivide or split its outstanding
Common Shares,
(3) combine its outstanding Common Shares
into a smaller number of shares, or
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(4) issue by reclassification of its Common
Shares any capital shares of the Corporation,
then, in any such event, the Exchange Rate in effect immediately prior
to the record date for any such dividend or distribution or the
effective date of any such subdivision, split, combination or
reclassification, as the case may be, shall be adjusted so that the
holder of a Series A Preferred Share shall be entitled to receive on
the conversion of such Series A Preferred Share, the number of Common
Shares of the Corporation which such holder would have owned or been
entitled to receive upon the happening of any of the events described
above had such Series A Preferred Share been converted at the Exchange
Rate in effect at the time of the record date for any such dividend or
distribution or of the effective date of any such subdivision, split,
combination or reclassification, as the case may be. Such adjustment
shall become effective at the opening of business on the Business Day
next following the record date for such dividend or distribution in the
case of a dividend or distribution, and shall become effective
immediately after the effective date in the case of a subdivision,
split, combination, or reclassification; and any Common Shares issuable
in payment of a dividend shall be deemed to have been issued
immediately prior to the close of business on the record date for such
dividend for purposes of calculating the number of outstanding Common
Shares under clauses (ii) and (iii) below.
(ii) If the Corporation shall, after the date hereof,
issue rights or warrants to all holders of its Common Shares entitling
them (for a period not exceeding 45 days from the date of such
issuance) to subscribe for or purchase Common Shares at a price per
share less than the Current Market Price of the Common Shares
(determined pursuant to paragraph (d)(v) of this Section 4.4.3) on the
record date for the determination of Shareholders entitled to receive
such rights or warrants, then in each case the Exchange Rate shall be
adjusted by multiplying the Exchange Rate in effect on such record date
by a fraction of which the numerator shall be the number of Common
Shares outstanding on the date of issuance of such rights or warrants,
immediately prior to such issuance, plus the number of additional
Common Shares offered for subscription or purchase, and of which the
denominator shall be the number of Common Shares outstanding on the
date of issuance of such rights or warrants, immediately prior to such
issuance, plus the number of Common Shares which the aggregate offering
price of the total number of Common Shares so offered for subscription
or purchase would purchase at such Current Market Price (determined by
multiplying such total number of shares by the exercise price of such
rights or warrants and dividing the product so obtained by such Current
Market Price). Common Shares owned by the Corporation or by another
company of which a majority of the shares entitled to vote in the
election of directors are held, directly or indirectly, by the
Corporation shall not be deemed to be outstanding for purposes of such
computation. Such adjustment shall become effective at the opening of
business on the Business Day next following the record date for such
rights or warrants. To the extent that Common Shares are not delivered
after the expiration of such rights or warrants, the Exchange Rate
shall be readjusted to the Exchange Rate which would then be in effect
had the adjustment made upon the issuance of such rights or warrants
been made upon the basis of the
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issuance of rights or warrants in respect of only the number of Common
Shares actually delivered.
(iii) If the Corporation shall pay a dividend or make
a distribution to all holders of its Common Shares consisting of
evidences of its indebtedness or other assets (including capital shares
of the Corporation other than Common Shares but excluding any cash
dividends or any distributions and dividends referred to in clause (i)
above), or shall issue to all holders of its Common Shares rights or
warrants to subscribe for or purchase any of its securities (other than
those referred to in clause (ii) above), then in each such case the
Exchange Rate shall be adjusted by multiplying the Exchange Rate in
effect on the record date for such dividend or distribution or the
determination of shareholders entitled to receive such rights or
warrants, as the case may be, by a fraction, of which the numerator
shall be the Current Market Price of the Common Shares (determined
pursuant to paragraph (d)(v) of this Section 4.4.3) on such record
date, and of which the denominator shall be such Current Market Price
per Common Share less the fair market value (as determined by the Board
of Directors of the Corporation, whose determination shall be
conclusive) as of such record date of the portion of the assets or
evidences of indebtedness so distributed, or of such subscription
rights or warrants, applicable to one Common Share. Such adjustment
shall become effective on the opening of business on the Business Day
next following the record date for such dividend or distribution or the
determination of shareholders entitled to receive such rights or
warrants, as the case may be.
(iv) Anything in this paragraph (d) notwithstanding,
the Corporation shall be entitled to make such upward adjustments in
the Exchange Rate, in addition to those required by this paragraph (d),
as the Corporation in its sole discretion shall determine to be
advisable, in order that any share dividends, subdivision of shares,
distribution of rights to purchase shares or securities, or
distribution of securities convertible into or exchangeable for shares
(or any transaction which could be treated as any of the foregoing
transactions pursuant to Section 305 of the Internal Revenue Code of
1986, as amended) hereafter made by the Corporation to its shareholders
shall not be taxable.
(v) As used in this paragraph (d), the "Current
Market Price" of the Common Shares on any date shall be the average
Closing Price per Common Share of the Corporation on the 20 Trading
Days immediately prior to, but not including, the date of
determination.
(vi) In any case in which this paragraph (d) shall
require that an adjustment as a result of any event become effective at
the opening of business on the Business Day next following a record
date and the date fixed for conversion pursuant to paragraph (a) of
this Section 4.4.3 occurs after such record date, but before the
occurrence of such event, the Corporation may in its sole discretion
elect to defer the following until after the occurrence of such event:
(A) issuing to the holder of any Series A Preferred Shares surrendered
for conversion the additional Common Shares issuable upon conversion
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before giving effect to such adjustment; and (B) paying to such holder
any amount in cash in lieu of a fractional Common Share pursuant to
paragraph (c) of this Section 4.4.3.
(e) Notice of Adjustments. Whenever the Exchange Rate is
adjusted as provided in paragraph (d) hereof, the Corporation will file with the
transfer agent for the Series A Preferred Shares a certificate with respect to
such adjustment, make a prompt public announcement thereof and mail a notice to
holders of the Series A Preferred Shares setting forth the adjusted Exchange
Rate, the method of calculation thereof in reasonable detail and the facts
requiring such adjustment and upon which such adjustment is based.
(f) Reservation of Common Shares. The Corporation shall
reserve and at all times keep available, free from preemptive rights, out of its
authorized but unissued Shares, for the purpose of effecting the conversion of
the Series A Preferred Shares, such number of shares of its duly authorized
Common Shares as will from time to time be sufficient to effect the conversion
of all outstanding Series A Preferred Shares; provided, however, that the
Corporation shall not be obligated to keep such shares available with respect to
any Series A Preferred Shares during any time that the conversion of such Series
A Preferred Shares is prohibited under a contract or other agreement between the
holder of such Series A Preferred Shares and the Corporation.
(g) Payment of Taxes. The Corporation will pay any and all
documentary, stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of Common Shares on the conversion of Series A Preferred
Shares pursuant to this Section 4.4.3; provided, however, that the Corporation
shall not be required to pay any tax which may be payable in respect of any
registration of transfer involved in the issue or delivery of Common Shares in a
name other than that of the registered holder of Series A Preferred Shares
redeemed or converted or to be redeemed or converted, and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid.
4.4.4 Adjustment For Certain Consolidations or Mergers. In
case of any consolidation or merger to which the Corporation is a party (other
than a merger or consolidation in which the Corporation is the continuing
corporation and in which the Common Shares outstanding immediately prior to the
merger or consolidation remain unchanged), or in case of any sale or transfer to
another entity of the property of the Corporation as an entirety or
substantially as an entirety, or in case of any statutory share exchange with
another entity (other than in connection with an acquisition in which the Common
Shares outstanding immediately prior to the share exchange remain unchanged),
each Series A Preferred Share shall, after consummation of such transaction, be
subject to (i) conversion at the option of the holder into the kind and amount
of securities, cash, or other property receivable upon consummation of such
transaction by a holder of the number of
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Common Shares into which such Series A Preferred Shares might have been
converted immediately prior to consummation of such transaction and (ii)
conversion on the Conversion Date into the kind and amount of securities, cash,
or other property receivable upon consummation of such transaction by a holder
of the number of Common Shares into which such Series A Preferred Shares would
have been converted if the conversion on the Conversion Date had occurred
immediately prior to the date of consummation of such transaction assuming in
each case that such holder of Common Shares failed to exercise rights of
election, if any, as to the kind or amount of securities, cash, or other
property receivable upon consummation of such transaction (provided that if the
kind or amount of securities, cash, or other property receivable upon
consummation of such transaction is not the same for each nonelecting share,
then the kind and amount of securities, cash, or other property receivable upon
consummation of such transaction for each nonelecting share shall be deemed to
be the kind and amount so receivable per share by a plurality of the nonelecting
shares). The kind and amount of securities into which the Series A Preferred
Shares shall be convertible after consummation of such transaction shall be
subject to adjustment as described above under paragraph (d) of Section 4.4.3
following the date of consummation of such transaction. The Corporation may not
become a party to any such transaction unless the terms thereof are consistent
with the foregoing.
4.4.5 Exchangeability. (a) The Series A Preferred Shares are
exchangeable in whole, or in part, at the option of the Corporation, for the
Corporation's ___% Convertible Subordinated Notes Due 1999 (the "Convertible
Notes") on any dividend payment date beginning on __________, 199__ at the rate
of $[initial price] principal amount of Convertible Notes for each Series A
Preferred Share outstanding at the time of exchange. The Corporation may effect
such exchange only if accrued and unpaid dividends on the Series A Preferred
Shares have been paid in full. An exchange of less than all of the outstanding
Series A Preferred Shares is permitted only if, immediately after giving effect
to such exchange, (i) the aggregate outstanding principal amount of the
Convertible Notes is not less than $250,000,000, (ii) accrued and unpaid
interest on the outstanding Convertible Notes has been paid in full and certain
other requirements as specified in the related indenture for the Convertible
Notes have been satisfied, and (iii) the aggregate liquidating distribution
amount for the outstanding Series A Preferred Shares is not less than
$250,000,000. The Corporation will mail written notice of its intention to
exchange to each holder of record of the Series A Preferred Shares not less than
30 Trading Days or more than 45 Trading Days prior to the date fixed for
exchange.
(b) Upon the date fixed for exchange of Series A Preferred
Shares for Convertible Notes (the "Exchange Date"), if the Corporation has taken
all action required to authorize the issuance of the Convertible Notes in
exchange for Series A Preferred Shares, Series A Preferred Shares so exchanged
will no longer be deemed outstanding and all rights relating to such shares will
terminate, except only the right to receive dividends accrued and unpaid to and
including the Exchange Date and the right to receive the Convertible Notes upon
surrender of certificates representing the Series A Preferred Shares.
(c) In the event that Series A Preferred Shares have been
exchanged for Convertible Notes pursuant to this Section 4.4.5, the provisions
set forth under paragraphs (d), (f) and (g) of Section 4.4.3 hereof shall apply
with respect to the Convertible Notes to the same extent and to the same effect
as they would have applied to the Series A Preferred Shares.
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4.4.6 Liquidation Rights. In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of Series A Preferred Shares are entitled to receive out of the
assets of the Corporation, whether such assets are stated capital or surplus of
any nature, before any payment is made or any assets are distributed to holders
of Common Shares and of any other class of shares of the Corporation ranking
junior to the Series A Preferred Shares, liquidating distributions in the amount
of $ per Series A Preferred Share plus accrued and unpaid dividends, whether or
not declared, without interest. If upon any liquidation, dissolution or winding
up of the Corporation, the amounts payable with respect to the Series A
Preferred Shares and any other preferred shares ranking as to any such
distribution on a parity with the Series A Preferred Shares are not paid in
full, the holders of the Series A Preferred Shares and of such other preferred
shares shall share ratably in any such distribution of assets in proportion to
the full respective preferential amounts to which they are entitled. After
payment of the full amount of the liquidating distribution to which they are
entitled, the holders of Series A Preferred Shares shall not be entitled to any
further participation in any distribution of assets by the Corporation. Neither
a consolidation nor merger of the Corporation with another corporation nor a
sale or transfer of all or part of the Corporation's assets for cash, securities
or other property shall be considered a liquidation, dissolution or winding up
of the Corporation for these purposes.
4.4.7 Voting Rights. Except as indicated below or otherwise
required by law, holders of Series A Preferred Shares will have no voting
rights. If (i) at any time the equivalent of six quarterly dividends payable on
the Series A Preferred Shares are accrued and unpaid or (ii) the Corporation
fails to make any payment upon mandatory redemption of the Series A Preferred
Shares, the number of directors of the Corporation shall be increased by two and
the holders of all outstanding Series A Preferred Shares, voting separately as a
class, shall be entitled to elect the additional two directors to serve until
all dividends accrued and unpaid have been paid or declared and funds set aside
to provide for payment in full or the Corporation fulfills its mandatory
redemption obligation, as the case may be.
In addition, without the vote or consent of the holders of at
least two-thirds of the Series A Preferred Shares then outstanding, the
Corporation may not (a) create or issue or increase the authorized number of
shares of any class or series of shares ranking prior to the Series A Preferred
Shares either as to dividends or upon liquidation, dissolution or winding up, or
any security convertible into or exercisable or exchangeable for such Shares,
(b) purchase or redeem less than all of the Series A Preferred Shares then
outstanding when any dividends on the Series A Preferred Shares are in arrears,
or (c) amend, alter or repeal any of the provisions of the Articles of
Incorporation so as to affect any right, preference, privilege or voting power
of the Series A Preferred Shares or the holders thereof; provided, however, that
any increase in the amount of authorized Preferred Shares or the creation and
issuance of any other class of Preferred Shares, or any increase in the amount
of authorized shares of such class or of any other class of Preferred Shares, in
each case ranking on a parity with or junior to the Series A Preferred Shares
with respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to affect such
rights, preferences or voting powers.
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ARTICLE V
NO PREEMPTIVE RIGHT'S
Shareholders of the Corporation have no preemptive rights to acquire
additional shares of stock or securities convertible into shares of stock issued
by the Corporation.
ARTICLE VI
DIRECTORS
6.1 NUMBER. The number of directors of the Corporation shall be fixed
in the manner specified by the bylaws of the Corporation.
6.2 VACANCIES. Vacancies and newly created directorships resulting from
any increase in the authorized number of directors shall be filled only by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director, unless for any reason there are no directors in office
in which case they shall be filled by a special election by shareholders.
ARTICLE VII
ELECTION OF DIRECTORS
Shareholders of the Corporation shall not have the right to cumulate
votes in the election of directors.
ARTICLE VIII
SPECIAL SHAREHOLDER MEETINGS
Special meetings of the shareholders of the Corporation for any purpose
or purposes may be called at any time by the Board of Directors, or by a
committee of the Board of Directors which has been duly designated by the Board
of Directors and whose powers and authority, as provided in a resolution of the
Board of Directors or in the bylaws of the Corporation, include the power to
call such meetings, but such special meetings may not be called by any other
person or persons.
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ARTICLE IX
AMENDMENT OF BYLAWS
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, adopt, repeal,
alter, amend, and rescind the bylaws of the Corporation by a resolution adopted
by a majority of the directors.
ARTICLE X
LIMITATION OF DIRECTOR LIABILITY
A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for conduct as a director,
except for:
(a) Acts or omissions involving intentional misconduct by the
director or a knowing violation of law by the director;
(b) Conduct violating Section 23B.08.310 of the Act (which
involves distributions by the Corporation);
(c) Any transaction from which the director will personally
receive a benefit in money, property, or services to which the
director is not legally entitled.
If the Washington Business Corporation Act is amended to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of a director of the Corporation shall be eliminated or limited to
the fullest extent not prohibited by the Washington Business Corporation Act, as
so amended. The provisions of this Article shall be deemed to be a contract with
each Director of the Corporation who serves as such at any time while such
provisions are in effect, and each such Directors shall be deemed to be serving
as such in reliance on the provisions of this Article. Any repeal or
modification of the foregoing paragraph by the shareholders of the Corporation
shall not adversely affect any right or protection of a director of the
Corporation with respect to any acts or omissions of such director occurring
prior to such repeal or modification.
ARTICLE XI
MERGERS, SHARE EXCHANGES, AND OTHER TRANSACTIONS
A merger, share exchange, sale of substantially all of the
Corporation's assets, or dissolution must be approved by the affirmative vote of
a majority of the Corporation's outstanding shares entitled to vote, or if
separate voting by voting groups is required then by not less than a majority of
all the votes entitled to be cast by that voting group.
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ARTICLE XII
INDEMNIFICATION
12.1 DEFINITIONS. As used in this Article:
a. "Agent" means an individual who is or was an agent of the
Corporation or an individual who, while an agent of the Corporation, is
or was serving at the Corporation's request as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise. "Agent" includes, unless the context requires
otherwise, the spouse, heirs, estate and personal representative of an
agent.
b. "Corporation" means the Corporation, and any domestic or
foreign predecessor entity which, in a merger or other transaction,
ceased to exist.
c. "Director" means an individual who is or was a director of
the Corporation or an individual who, while a director of the
Corporation, is or was serving at the Corporation's request as a
director officer, partner, trustee, employee, or agent of another
foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise. "Director" includes, unless
the context requires otherwise, the spouse, heirs, estate and personal
representative of a director.
d. "Employee" means an individual who is or was an employee of
the Corporation or an individual, while an employee of the Corporation,
is or was serving at the Corporation's request as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise- "Employee" includes, unless the context requires
otherwise, the spouse, heirs, estate and personal representative of an
employee.
e. "Expenses" include counsel fees.
f. "Indemnitee" means an individual made a party to a
proceeding because the individual is or was a Director, Officer,
Employee, or Agent of the Corporation, and who possesses
indemnification rights pursuant to these Articles or other corporate
action. "Indemnitee" includes, unless the context requires otherwise,
the spouse, heirs, estate, and personal representative of such
individuals.
g. "Liability" means the obligation to pay a judgment,
settlement penalty, fine, including an excise tax with respect to an
employee benefit plan, or reasonable Expenses incurred with respect to
a proceeding.
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h. "Officer" means an individual who is or was an officer of
the Corporation (regardless of whether or not such individual was also
a Director) or an individual who, while an officer of the Corporation,
is or was serving at the Corporation's request as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise. "Officer" includes, unless the context requires
otherwise, the spouse, heirs, estate and personal representative of an
officer.
i. "Party" includes an individual who was, is, or is
threatened to be named a defendant, respondent or witness in a
proceeding.
j. "Proceeding" means any threatened, pending, or completed
action, suit, or proceeding, whether civil, derivative, criminal,
administrative, or investigative, and whether formal or informal.
12.2 INDEMNIFICATION RIGHTS OF DIRECTORS AND OFFICERS. The Corporation
shall indemnify its Directors and Officers to the full extent not prohibited by
applicable law now or hereafter in force against liability arising out of a
Proceeding to which such individual was made a Party because the individual is
or was a Director or an Officer. However, such indemnity shall not apply on
account of:
(a) Acts or omissions of a Director or Officer finally adjudged to
be intentional misconduct or a knowing violation of law;
(b) Conduct of a Director or Officer finally adjudged to be in
violation of Section 23B.08.310 of the Act relating to
distributions by the Corporation; or
(c) Any transaction with respect to which it was finally adjudged
that such Director or Officer personally received a benefit in
money, property, or services to which the Director or Officer
was not legally entitled.
Subject to the foregoing, it is specifically intended that Proceedings covered
by indemnification shall include Proceedings brought by the Corporation
(including derivative actions) Proceedings by government entities and
governmental officials or other third party actions.
12.3 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION. The
Corporation may, by action of its Board of Directors from time to time, provide
indemnification and pay Expenses in advance of the final disposition of a
Proceeding to Employees and Agents of the Corporation who are not also
Directors, in each case to the same extent as to a Director with respect to the
indemnification and advancement of Expenses pursuant to rights granted under, or
provided by, the Act or otherwise.
12.4 PARTIAL INDEMNIFICATION. If an Indemnitee is entitled to
indemnification by the Corporation for some or a portion of Expenses,
liabilities, or losses actually and reasonably
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incurred by Indemnitee in an investigation, defense, appeal or settlement but
not, however, for the total amount thereof, the Corporation shall nevertheless
indemnify Indemnitee for the portion of such Expenses, liabilities or losses to
which Indemnitee is entitled.
12.5 PROCEDURE FOR SEEKING INDEMNIFICATION AND/OR ADVANCEMENT OF
EXPENSES. The following procedures shall apply in the absence of (or at the
option of the Indemnitee, in lieu thereof), specific procedures otherwise
applicable to an Indemnitee pursuant to a contract, trust agreement, or general
or specific action of the Board of Directors:
12.5.1 Notification and Defense of Claim. Indemnitee shall
promptly notify the Corporation in writing of any proceeding for which
indemnification could be sought under this Article. In addition,
Indemnitee shall give the Corporation such information and cooperation
as it may reasonably require and as shall be within Indemnitee's power.
With respect to any such proceeding as to which Indemnitee has notified
the Corporation:
(a) The Corporation will be entitled to participate
therein at its own expense; and
(b) Except as otherwise provided below, to the extent
that it may wish, the Corporation, jointly with any
other indemnifying party similarly notified, will be
entitled to assume the defense thereof, with counsel
satisfactory to Indemnitee. Indemnitee's consent to
such counsel may not be unreasonably withheld.
After notice from the Corporation to Indemnitee of its
election to assume the defense, the Corporation will not be liable to
Indemnitee under this Article for any legal or other Expenses
subsequently incurred by Indemnitee in connection with such defense.
However, Indemnitee shall continue to have the right to employ its
counsel in such proceeding, at Indemnitee's expense; and if:
(i) The employment of counsel by Indemnitee has
been authorized by the Corporation;
(ii) Indemnitee shall have reasonably concluded
that there may be a conflict of interest
between the Corporation and Indemnitee in
the conduct of such defense; or
(iii) The Corporation shall not in fact have
employed counsel to assume the defense of
such proceeding,
the fees and Expenses of Indemnitee's counsel shall be at the expense
of the Corporation.
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The Corporation shall not be entitled to assume the defense of
any proceeding brought by or on behalf of the Corporation or as to
which Indemnitee shall reasonably have made the conclusion that a
conflict of interest may exist between the Corporation and the
Indemnitee in the conduct of the defense.
12.5.2 Information to be Submitted and Method of Determination
and Authorization of Indemnification. For the purpose of pursuing
rights to indemnification under this Article, the Indemnitee shall
submit to the Board a sworn statement requesting indemnification and
reasonable evidence of all amounts for which such indemnification is
requested (together, the sworn statement and the evidence constitute an
"Indemnification Statement").
Submission of an Indemnification Statement to the Board shall
create a presumption that the Indemnitee is entitled to indemnification
hereunder, and the Corporation shall, within sixty (60) calendar days
thereafter, make the payments requested in the Indemnification
Statement to or for the benefit of the Indemnitee, unless: (1) within
such sixty (60) calendar day period it shall be determined by the
Corporation that the Indemnitee is not entitled to indemnification
under this Article; (2) such determination shall be based upon clear
and convincing evidence (sufficient to rebut the foregoing
presumption); and (3) the Indemnitee shall receive notice in writing of
such determination, which notice shall disclose with particularity the
evidence upon which the determination is based.
The foregoing determination may be made: (1) by the Board of
Directors by majority vote of a quorum of Directors who are not at the
time parties to the proceedings; (2) if a quorum cannot be obtained, by
majority vote of a committee duly designated by the Board of Directors
(in which designation Directors who are parties may participate)
consisting solely of two (2) or more Directors not at the time parties
to the proceeding; (3) by special legal counsel; or (4) by the
shareholders as provided by Section 23B.08.550 of the Act.
Any determination that the Indemnitee is not entitled to
indemnification, and any failure to make the payments requested in the
Indemnification Statement, shall be subject to judicial review by any
court of competent jurisdiction.
12.5.3 Special Procedure Regarding Advance for Expenses. An
Indemnitee seeking payment of Expenses in advance of a final
disposition of the proceeding must furnish the Corporation, as part of
the Indemnification Statement:
(a) A written affirmation of the Indemnitee's
good faith belief that the Indemnitee has
met the standard of conduct required to be
eligible for indemnification; and
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(b) A written undertaking, constituting an
unlimited general obligation of the
Indemnitee, to repay the advance if it is
ultimately determined that the Indemnitee
did not meet the required standard of
conduct.
Upon satisfaction of the foregoing the Indemnitee shall have a
contractual right to the payment of such Expenses.
12.5.4 Settlement. The Corporation is not liable to indemnify
Indemnitee for any amounts paid in settlement of any proceeding without
the Corporation's written consent. The Corporation shall not settle any
proceeding in any manner which would impose any penalty or limitation
on Indemnitee without Indemnitee's written consent. Neither the
Corporation nor Indemnitee may unreasonably withhold its consent to a
proposed settlement.
12.6. CONTRACT AND RELATED RIGHTS.
12.6.1 Contract Rights. The right of an Indemnitee to
indemnification and advancement of Expenses is a contract right upon
which the Indemnitee shall be presumed to have relied in determining to
serve or to continue to serve in his or her capacity with the
Corporation. Such right shall continue as long as the Indemnitee shall
be subject to any possible proceeding. Any amendment to or repeal of
this Article shall not adversely affect any right or protection of an
Indemnitee with respect to any acts or omissions of such Indemnitee
occurring prior to such amendment or repeal.
12.6.2 Optional Insurance, Contracts, and Funding. The
Corporation may:
(a) Maintain insurance, at its expense, to
protect itself and any Indemnitee against
any liability, whether or not the
Corporation would have power to indemnify
the individual against the same liability
under Section 23B.08.5 10 or .520 of the
Act;
(b) Enter into contracts with any Indemnitee in
furtherance of this Article and consistent
with the Act; and
(c) Create a trust fund, grant a security
interest, or use other means (including
without limitation a letter of credit) to
ensure the payment of such amounts as may be
necessary to effect indemnification as
provided in this Article.
12.6.3 Severability. If any provision or application of this
Article shall be invalid or unenforceable, the remainder of this
Article and its remaining applications shall not be affected thereby,
and shall continue in full force and effect.
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12.6.4 Right of Indemnitee to Bring Suit. If (1) a claim under
this Article for indemnification is not paid in full by the Corporation
within sixty (60) days after a written claim has been received by the
Corporation; or (2) a claim under this Article for advancement of
Expenses is not paid in full by the Corporation within twenty (20) days
after a written claim has been received by the Corporation, then the
Indemnitee may, but need not, at any time thereafter bring suit against
the Corporation to recover the unpaid amount of the claim. To the
extent successful in whole or in part, the Indemnitee shall be entitled
to also be paid the expense (to be proportionately prorated if the
Indemnitee is only partially successful) of prosecuting such claim.
Neither (1) the failure of the Corporation (including its Board of
Directors, its shareholders, or independent legal counsel) to have made
a determination prior to the commencement of such proceeding that
indemnification or reimbursement or advancement of Expenses to the
Indemnitee is proper in the circumstances; nor (2) an actual
determination by the Corporation (including its Board of Directors, its
shareholders, or independent legal counsel that the Indemnitee is not
entitled to indemnification or to the reimbursement or advancement of
Expenses, shall be a defense to the proceeding or create a presumption
that the Indemnitee is not so entitled.
12.6.5 Nonexclusivity of Rights. The right to indemnification
and the payment of Expenses incurred in defending a Proceeding in
advance of its final disposition granted in this Article shall not be
exclusive of any other right which any Indemnitee may have or hereafter
acquire under any statute, provision of this Article or the Bylaws,
agreement, vote of shareholders or disinterested directors, or
otherwise. The Corporation shall have the express right to grant
additional indemnity without seeking further approval or satisfaction
by the shareholders. All applicable indemnity provisions and any
applicable law shall be interpreted and applied so as to provide an
Indemnitee with the broadest but nonduplicative indemnity to which he
or she is entitled.
12.7 CONTRIBUTION. If the indemnification provided in Section 12.2 of
this Article is not available to be paid to Indemnitee for any reason other than
those set forth in subparagraphs 12.2(a), 12.2(b), and 12.2(c) of Section 12.2
of this Article (for example, because indemnification is held to be against
public policy even though otherwise permitted under Section 12.2) then in
respect of any proceeding in which the Corporation is jointly liable with
Indemnitee (or would be if joined in such proceeding), the Corporation shall
contribute to the amount of loss paid or payable by Indemnitee in such
proportion as is appropriate to reflect:
The relative benefits received by the Corporation on
the one hand and the Indemnitee on the other hand
from the transaction from which such proceeding
arose, and
The relative fault of the Corporation on the one hand
and the Indemnitee on the other hand in connection
with the events which resulted in such loss, as well
as any other relevant equitable consideration.
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The relative benefits received by and fault of the Corporation on the
one hand and the Indemnitee on the other shall be determined by a court of
appropriate jurisdiction (which may be the same court in which the proceeding
took place) with reference to, among other things, the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent the
circumstances resulting in such loss. The Corporation agrees that it would not
be just and equitable if a contribution pursuant to this Article was determined
by pro rata allocation or any other method of allocation which does not take
account of the foregoing equitable considerations.
12.8 EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Corporation shall not be obligated pursuant to the terms of
these Articles to indemnify or advance Expenses to Indemnitee with respect to
any proceeding.
12.8.1 Claims Initiated by Indemnitee. Initiated or brought
voluntarily by Indemnitee and not by way of defense, but such
indemnification or advancement of Expenses may be provided by the
Corporation in specific cases if the Board of Directors finds it to be
appropriate. Notwithstanding the foregoing, the Corporation shall
provide indemnification including the advancement of Expenses with
respect to Proceedings brought to establish or enforce a right to
indemnification under these Articles or any other statute or law or as
otherwise required under the statute.
12.8.2 Lack of Good Faith. Instituted by Indemnitee to enforce
or interpret this Article, if a court of competent jurisdiction
determines that each of the material assertions made by Indemnitee in
such proceeding was not made in good faith or was frivolous.
12.8.3 Insured Claims. For which any of the Expenses or
liabilities for indemnification is being sought have been paid directly
to Indemnitee by an insurance carrier under a policy of officers' and
directors' liability insurance maintained by the Corporation.
12.8.4 Prohibited by Law. If the Corporation is prohibited by
the Act or other applicable law as then in effect from paying such
indemnification and/or advancement of Expenses. For example, the
Corporation and Indemnitee acknowledge that the Securities and Exchange
Commission ("SEC") has taken the position that indemnification is not
possible for liabilities arising under certain federal securities laws.
Indemnitee understands and acknowledges that the Corporation has
undertaken or may be required in the future to undertake with the SEC
to submit the question of indemnification to a court in certain
circumstances for a determination of the Corporation's right to
indemnify Indemnitee.
12.9 SUCCESSORS AND ASSIGNS. All obligations of the Corporation to
indemnify any Director or Officer shall be binding upon all successors and
assigns of the Corporation (including any transferee of all or substantially all
of its assets and any successor by merger or other-wise by operation of law).
The Corporation shall not effect any sale of substantially all of its assets,
merger, consolidation, or other reorganization, in which it is not the surviving
entity, unless the surviving entity agrees in writing to assume all such
obligations of the Corporation.
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ARTICLE XIII
CORPORATION'S ACQUISITION OF ITS OWN SHARES
The Corporation may purchase, redeem, receive, take or otherwise
acquire, own and hold, sell, lend, exchange, transfer or otherwise dispose of,
pledge, use and otherwise deal with and in its own shares. As a specific
modification of Section 23B.06.310 of the Act, pursuant to the authority in
Section 23B.02.020(5)(c) of the Act, to include provisions related to the
management of the business and the regulation of the affairs of the Corporation,
shares of the Corporation's stock acquired by it pursuant to this Article shall
be considered "Treasury Stock" and so held by the Corporation. The shares so
acquired by the Corporation shall not be considered as authorized and unissued
but rather as authorized, issued, and held by the Corporation. The shares, so
acquired shall not be regarded as cancelled or as a reduction to the authorized
capital of the Corporation unless specifically so designated by the Board of
Directors in an amendment to these Articles of Incorporation. The provisions of
this Article do not alter or effect the status of the Corporation's acquisition
of its shares as a "distribution" by the Corporation as defined in Section
23B.01.400(6) of the Act, nor alter or effect the limitations on distributions
by the Corporation as set forth in Section 23B.06.400 of the Act. Any shares so
acquired by the Corporation, unless otherwise specifically designated by the
Board of Directors, at the time of acquisition, shall be considered on
subsequent disposition, as transferred rather than reissued. Nothing in this
Article limits or restricts the right of the Corporation to resell or otherwise
dispose of any of its shares previously acquired for such consideration and
according to such procedures as established by the Board of Directors.
The undersigned has signed these Restated Articles of Incorporation as
of December __, 1996.
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Robert A. Eshelman
Assistant Secretary
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