Exhibit 3.1
COMPOSITE CERTIFICATE OF INCORPORATION
OF PHILIPP BROTHERS CHEMICALS, INC.
RESTATED
CERTIFICATE OF INCORPORATION
OF PHILIPP BROTHERS CHEMICALS, INC.
(Under Section 807 of the Business Corporation Law)
WE THE UNDERSIGNED, the President and Secretary of PHILIPP BROTHERS
CHEMICALS, INC., hereby certify:
FIRST: The name of the corporation is
PHILIPP BROTHERS CHEMICALS INC.
SECOND: The certificate of incorporation of the corporation was filed by
the Department of State on May 11, 1946.
THIRD: The amendment and restatement of the certificate of incorporation
of the corporation herein provided for was authorized by the written consent of
the holders of all of the outstanding shares of the corporation entitled to vote
thereon pursuant to Section 615 of the Business Corporation Law.
FOURTH: The certificate of incorporation as heretofore amended is hereby
amended or changed to effect one or more of the amendments or changes authorized
by Section 801 of the Business Corporation Law, namely:
A. To amend Article THIRD of the certificate of incorporation by (i)
eliminating as separate classes the Special Preferred Shares, First Preferred
Shares, Second Preferred Shares and Class D Capital Stock heretofore authorized,
no shares of which are issued or outstanding, (ii) changing the designation of
the Third Preferred shares heretofore authorized to Series A Preferred shares,
and reducing the number of authorized Series A Preferred shares from 60,000 to
5,207 shares, (iii) providing for the creation of a class of 155,750 shares of
authorized preferred shares, and vest in the Board of Directors authority to fix
the designations, relative rights, preference and limitations of shares of each
series, (iv) changing the designation of the Class A Capital Stock heretofore
authorized to Class A Common shares and increasing the number of authorized
Class A Common shares from 8,100 to 16,200 shares and increasing the per share
dividend rate of the Class A Common shares from $.01 to $.055, so that the
holder thereof, after exchanging Class C Capital Stock, having a dividend rate
of $.10 per share, shall be entitled to receive the same aggregate dividend as
payable in respect of the former Class A Capital Stock and Class C Capital
Stock, (v) changing the designation of the Class B Capital Stock heretofore
authorized to Class B Common shares and increasing the authorized number of
Class B Common shares from 8,100 to 14,100 shares, (vi) eliminating as separate
classes the Class C Capital Stock and Class E Capital Stock and changing all
authorized and issued shares thereof into authorized and issued Class A Common
shares and Class B Common shares, respectively, (vii) deleting the statement as
to the amount, in dollars, of the capital stock of 2 the
corporation, and (viii) in connection therewith, changing the headings for the
paragraphs of Article THIRD;
B. To amend Article THIRD of the certificate of incorporation corporation
by decreasing the total number of shares which the corporation is authorized to
issue by 8,100 shares, an amount equal to the number of authorized shares of the
former Class D Capital Stock, from 194,150 to 186,050 shares;
C. To delete Article SEVENTH, relating to the names and addresses of the
initial directors of the Corporation;
D. To delete Article EIGHTH, relating to the names and addresses of the
subscribers of the original certificate of incorporation of the corporation;
E. To delete Article NINTH, relating to certain additional information
concerning such subscribers;
F. To combine Articles TENTH and FOURTH, relating to the designation of
the Secretary of State as agent of the corporation and the address to which the
Secretary of State shall mail a copy of process, respectively, into a new
Article FIFTH;
G. To delete Article SIXTH, relating to the size of the Board of Directors
of the corporation;
H. To add Articles SEVENTH and EIGHTH, relating to the indemnification of
directors and officers, and deleting parts of Article EIGHTH inconsistent
therewith; and
I. To re-number certain Articles.
FIFTH: The text of the certificate of incorporation of the corporation as
heretofore amended and as amended or changed hereby, is hereby restated to read
in full as follows:
CERTIFICATE OF INCORPORATION
OF
PHILIPP BROTHERS CHEMICALS, INC.
(Under Section 807 of the Business Corporation Law)
----------
FIRST: The name of the corporation is:
PHILIPP BROTHERS CHEMICALS, INC.
SECOND: The purpose for which the corporation is formed are to engage in
any lawful act or activity for which corporations may be organized under the
Business Corporation Law; provided, however, that the corporation shall not
engage in any act or activity requiring the
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consent or approval of any state official, department, board, agency or other
body without such consent or approval first being obtained.
THIRD: The aggregate number of shares which the corporation shall have
authority to issue is One Hundred Eighty- Six Thousand Fifty (186,050), which
are divided into One Hundred Fifty-Five Thousand Seven Hundred Fifty (155,750)
Preferred shares (hereinafter sometimes called the "Preferred Shares") of a par
value of $100 each, of which a series of Five Thousand Two Hundred Seven (5,207)
Series A Preferred shares (hereinafter sometimes called the "Series A Preferred
Shares") of a par value of $100 each has been established, Sixteen Thousand Two
Hundred (16,200) Class A Common shares (hereinafter sometimes called the "Class
A Common Shares") of a par value of $.10 each and Fourteen Thousand One Hundred
(14,100) Class B Common shares (hereinafter sometimes called the "Class B Common
Shares") of a par value of $.10 each (such classes of common shares are also
hereinafter sometimes referred to collectively as the "Common Shares").
A. Preferred Shares.
The statement of the relative rights, preferences and limitations of the
shares of each class is as follows:
(a) General. Preferred Shares may be issued from time to time in one
or more series, each of such series to have such designations, relative rights,
preferences and limitations as are stated and expressed herein and/or in the
resolution or resolutions providing for the issue of such series adopted by the
Board of Directors as hereinafter provided. Authority is hereby expressly
granted to the Board of Directors, subject to the provisions set forth herein,
to establish and designate one or more series of Preferred Shares and to fix the
variations in the relative rights, preferences and limitations of each series,
including without limitation:
1. The number of shares to constitute such series and the
distinctive designations thereof;
2. The dividend rate or rates to which such shares shall be
entitled and the restrictions, limitations and conditions upon the payment of
such dividends, whether dividends shall be cumulative, non-cumulative,
participating, or non- participating, the date or dates from which dividends (if
cumulative) shall accumulate and the dates on which dividends (if declared)
shall be payable and the form of payment of dividends;
3. Whether or not the shares of such series shall be
redeemable and, if so, the terms, limitations and restrictions with respect to
such redemption, including without limitation the manner of selecting shares for
redemption if less than all shares are to be redeemed, and the amount, if any,
in addition to any accrued dividends thereon, which the holders of shares of
such series shall be entitled to receive upon the redemption thereof, which
amount may vary at different redemption dates and may be different with respect
to shares redeemed through the operation of any purchase, retirement or sinking
fund and with respect to shares otherwise redeemed;
4. The amount in addition to any accrued dividends thereon
which the holders of shares of such series shall be entitled to receive upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, which amount may vary at
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different dates and may vary depending on whether such liquidation, dissolution
or winding up is voluntary or involuntary;
5. Whether or not the shares of such series shall be subject
to the operation of a purchase, retirement or sinking fund and, if so, the
terms, limitations and restrictions with respect thereto, including without
limitation whether such purchase, retirement or sinking fund shall be cumulative
or non-cumulative, the extent to and the manner in which such fund shall be
applied to the purchase, retirement or redemption of the shares of such series
for retirement or to other corporate purposes and the terms and provisions
relative to the operation thereof;
6. Whether or not the shares of such series shall have
conversion privileges and, if so, prices or rates of conversion and the method,
if any, of adjusting the same;
7. The voting powers, if any, of such series; and
8. Any other relative rights, preferences and limitations
pertaining to such series.
(b) Series A Preferred Shares.
1. Dividends. Subject to the rights of any other series of
Preferred shares that from time to time may come into existence, each issued and
outstanding Series A Preferred Share shall entitle the holder of record thereof
to receive, out of funds legally available therefor, when and as declared by the
Board of Directors of the corporation, dividends in cash and/or property at the
rate of six per centum (6%) of the par value thereof, which shall be payable
quarterly on such date or dates in each fiscal year as the Board of Directors
shall deem advisable, and which shall be declared and set apart or paid before
dividends of any kind may be declared upon the issued and outstanding Common
Shares. The right as aforesaid to quarterly dividends upon the issued and
outstanding Series A Preferred Shares shall be non-cumulative and shall not be
deemed to accrue, whether dividends are earned or whether there be funds legally
available therefor, unless and until said dividends have been declared by the
Board of Directors. Whenever full dividends upon the issued and outstanding
Series A Preferred Shares for the then current fiscal year shall have been
declared and either paid or a sum sufficient for the payment thereof set aside
in full, without interest, the Board of Directors may declare, set aside, or pay
additional cash dividends, and/or may make share distributions of the authorized
but unissued Common Shares of the corporation and/or its treasury Common Shares,
if any, and/or may make distributions of bonds or property of the corporation,
including the shares or bonds of other corporations, including the shares or
bonds of other corporations. The holders of record of the issued and outstanding
Common Shares shall be entitled in respect of said Common Shares exclusively to
receive any such additional cash dividends which may be declared and/or any such
distributions which made be made, as hereinafter provided. Any reference to
"distributions" in this paragraph contained shall not be deemed to include any
distributions made in connection with any liquidation, dissolution, or winding
up of the corporation, whether voluntary or involuntary; nor shall any such
reference to "distributions" in relation to issued and outstanding shares be
deemed to limit, curtail, or divest the authority of the Board of Directors to
make any proper distributions, including distributions of authorized but
unissued Common Shares, in relation to its treasury Common Shares, if any.
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2. Redemption. The corporation may, through its Board of
Directors and in conformity with the provisions of the Business Corporation Law,
at any time and from time to time, redeem all or any part of the issued and
outstanding Series A Preferred Shares by paying the holders of record thereof,
out of funds legally available therefor, the par value for each such share to be
redeemed plus an amount equivalent to all dividends, if any, which have been
declared but not paid, to the date fixed for redemption. In the event of such
redemption, a notice fixing the time and place of redemption shall be mailed not
less than thirty days prior to the date so fixed to each holder of record of the
Series A Preferred Shares to be redeemed at his address as it appears on the
record of shareholders. In the event that less than all of the issued and
outstanding Series A Preferred Shares are to be redeemed, the shares to be
redeemed shall be chosen by lot, pro rata, or by such equitable method as the
Board of Directors may determine. On and after the date fixed for such
redemption, the holders of the shares so called for redemption shall not be
entitled to any dividends and shall not have any rights or interests as holders
of said shares except to receive the payment or payments herein designated,
without interest thereon, upon presentation and surrender of their certificate
therefor.
3. Liquidation. Subject to the rights of any other series of
Preferred shares that may from time to time come into existence, in the event of
any liquidation, dissolution, or winding up of the affairs of the corporation,
whether voluntary or involuntary, each issued and outstanding Series A Preferred
Share shall entitle the holder of record thereof to payment at the rate of the
par value thereof, plus an amount equal to all dividends, if any, which have
been declared but not paid, without interest, before any payment or distribution
of the net assets of the corporation (whether stated capital or surplus) shall
be made to or set apart for the holders of record of the issued and outstanding
Common Shares in respect of said Common Shares. After setting apart or paying in
full the preferential amounts aforesaid to the holders of record of the issued
and outstanding Series A Preferred Shares, the remaining net assets (whether
stated capital or surplus), if any, shall be distributed exclusively to the
holders of record of the issued and outstanding Common Shares, as hereinafter
provided. If the net assets of the corporation shall be insufficient to pay in
full the preferential amounts among the holders of the Series A Preferred Shares
as aforesaid, then each issued and outstanding Series A Preferred Share shall
entitle the holder of record thereof to an equal proportion of said net assets,
and the holders of the Common Shares shall in no event be entitled to
participate in the distribution of said net assets in respect of their Common
Shares. Without excluding any other proceeding which does not in fact effect a
liquidation, dissolution, or winding up of the corporation, a merger or
consolidation of the corporation into or with any other corporation, a merger of
any other corporation into the corporation, or a sale, lease, mortgage, pledge,
exchange, transfer, or other disposition by the corporation of all or
substantially all of its assets shall not be deemed, for the purposes of this
paragraph, to be a liquidation, dissolution, or winding up of the corporation.
4. Voting. Each issued and outstanding Common Share shall
entitle the holder thereof to full voting power, as hereinafter provided. Except
as any 8 provision of law may otherwise require, no Series A Preferred Share
shall entitle the holder thereof to any voting power, to participate in any
meeting of shareholders, or to have notice of any meeting of shareholders.
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B. Common Shares.
The statement of the relative rights, preferences, and limitations of the
shares of each class of Common Shares is as follows:
1. Dividends. After payment in full of all dividends to which
the holders of Preferred Shares shall be entitled as set forth above, each
issued and outstanding Class A Common Share shall entitle the holder of record
thereof to receive, out of funds legally available therefor, when and as
declared by the Board of Directors of the corporation, dividends in cash and/or
property at the rate of five and one-half per centum (5 1/2%) of the par value
thereof, which shall be payable quarterly on such date or dates in each fiscal
year as the Board of Directors shall deem advisable, and which shall be declared
and set apart or paid before dividends of any kind may be declared upon the
Class B Common Shares of the corporation and before distribution of any kind may
be made upon the issues and outstanding Class B Common Shares. The right as
aforesaid to quarterly dividends upon the issued and outstanding Class A Common
Shares shall be non-cumulative and shall not be deemed to accrue, whether
dividends are earned or whether there be funds legally available therefor unless
and until said dividends shall have been declared by the Board of Directors.
2. Liquidation. (a) After payment in full of the preferential
amount of the Preferred Shares as set forth above, then, before any payment or
distribution of the remaining assets of the corporation (whether stated capital
or surplus), if any, shall be made to or set apart for the holders of shares of
Class B Common Shares as provided in subparagraph (b) below, the holders of
shares of Class A Common Shares shall be entitled to receive out of the
remaining assets of the corporation (whether stated capital or surplus), if any,
payment of an amount equal to the value thereof, plus an amount equal to all
dividends, if any, which have been declared but not paid, without interest, but
they shall be entitled to no further payment with respect to such Class A Common
Shares. If, upon any liquidation, distribution of assets, dissolution or
winding-up of the corporation, the assets of the corporation, or proceeds
thereof, distributable among the holders of shares of Class A Common Shares,
shall be insufficient to pay in full the respective preferential amounts of such
Class A Common Shares, then such assets, or the proceeds thereof, shall be
distributed among such holders ratably in accordance with the respective
liquidation amounts which would be payable on such shares if all amounts payable
were paid in full.
(b) After paying in full the preferential amount set
forth in the preceding paragraph of this paragraph B(2), the remaining assets
(whether stated capital or surplus), if any, shall be distributed exclusively to
the holders of record of the issued and outstanding Class B Common Shares, each
issued and outstanding Class B Common Share entitling the holder of record
thereof to receive an equal portion of said remaining net assets.
3. Voting. Except as any provision of law or except as any
provision herein or elsewhere of the certificate of incorporation may otherwise
provide, each Common Share of the corporation without distinction as to class
shall have the same rights, privileges, interests, and attributes, and shall be
subject to the same limitations, as every other Common Share of the corporation.
The Class A Common shares of the corporation shall at all times entitle the
holders of record of the issued and outstanding shares thereof, exclusively and
as a class, by plurality vote, to elect all but one (1) of the directors of the
corporation, to exercise
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any right of removal of any of said directors, and to fill all vacancies and all
newly created directorships in said directors except those vacancies and newly
created directorship which may be filled, under a duly adopted by-law, by the
existing directors or director elected by those holders of said class of shares.
The Class B Common shares of the corporation shall at all times entitle the
holders of record of the issued and outstanding shares thereof, exclusively and
as a class, by plurality vote, to elect one (1) director of the corporation, to
exercise any right of removal of said director, and to fill all vacancies and
all newly created directorships in said director except those vacancies and
newly created directorships which may be filled, under a duly adopted by-law, by
the existing director elected by those holders of said class of shares. In all
matters other than in the election and removal of directors, each issued and
outstanding Class A Common share 10 shall entitle the holder of record thereof
to full voting power, and voting shall not be by class unless otherwise required
by law. Except as any provision of law may otherwise require and except as
hereinabove provided with respect to the election or removal of one (1)
director, no Class B Common Share shall entitle the holder thereof to any voting
power, to any right to participate in any meeting of shareholders, or to have
any notice of any meeting of shareholders.
FOURTH: The county within the State of New York within which the
office of the corporation is located is New York County.
FIFTH: The Secretary of State of the State of New York is designated
as the agent of the corporation upon whom process against the corporation may be
served. The post office address within or without the State of New York to which
the Secretary of State shall mail a copy of any process against the corporation
served upon him is: c/o Golenbock, Eiseman, Assor & Bell, 437 Madison Avenue,
New York, New York 10022.
SIXTH: No director shall be disqualified from voting or acting on
behalf of the corporation, in contracting with any other corporation in which he
is or may be an officer, a director or a stockholder, and no contract or other
transaction between this corporation and any other corporation shall be affected
by the fact that the directors of this corporation are interested in or are
directors or officers of such other corporation and any director individually
may be a party to or may be interested in any contract or transaction of this
corporation and no contract or transaction of this corporation with any person
or persons, firm or association, shall be affected by the fact that any director
of this corporation is a party thereto or is connected with such person or
persons, firm or association, provided that the interest in any such contract or
other transaction of any such director shall be fully disclosed; and, subject to
the foregoing provision, each and every person who may become a director or
officer of this corporation is hereby relieved from any liability that might
otherwise exist through contracting or dealing with this corporation for the
benefit of himself or any firm, association or corporation in which he is or may
be in any manner interested. Each director and officer shall be indemnified by
the corporation against expenses reasonably incurred by him in connection with
any action, suit or proceeding to which he may be made a party by reason of his
being or having been a director or officer of the corporation to the fullest
extent permitted by New York law, and the foregoing right of indemnification
shall not be exclusive of other rights to which he may be entitled as a matter
of law.
SEVENTH: No provision of this certificate of incorporation is
intended by the corporation to be construed as limiting, prohibiting, denying,
or abrogating any of the general or
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specific powers or rights conferred under the Business Corporation Law upon the
corporation with respect to the power of the corporation to furnish
indemnification and to advance expenses to directors and officers in the
capacities defined and prescribed by the Business Corporation Law and the
defined and prescribed rights of said persons to indemnification and advancement
of expenses as the same are conferred by the Business Corporation Law. The
indemnification and advancement of expenses granted pursuant to, or provided by,
the Business Corporation Law shall not be deemed exclusive of any other rights
to which a director or officer seeking indemnification or advancement of
expenses may be entitled, whether contained in this certificate of incorporation
or the by-laws or (i) a resolution of shareholders, (ii) a resolution of
directors, or (iii) an agreement providing for such indemnification, except as
expressly prohibited by the Business Corporation Law.
EIGHTH: To the fullest extent permitted by the Business Corporation
Law of the State of New York, as the same exists or may hereafter be amended,
the personal liability of directors of the corporation to the corporation or its
shareholders for damages for any breach of duty in such capacity is hereby
eliminated. Neither the amendment nor repeal of this Article EIGHTH, nor the
adoption of any provision of this Certificate of Incorporation or of the By-Laws
of the corporation or of any statute inconsistent with this Article EIGHTH shall
eliminate or limit the effect of this Article EIGHTH in respect of any acts or
omissions occurring prior to such amendment, repeal or adoption of such an
inconsistent provision.
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IN WITNESS WHEREOF, we, the President and Secretary of the
corporation, have subscribed this document on the ____ day of September, 1998,
and do hereby affirm, under the penalties of perjury, that the statements
contained herein have been examined by us and are true and correct.
/s/ Jack C. Bendheim
--------------------------------
Jack C. Bendheim, President
/s/ Joseph Katzenstein
--------------------------------
Joseph M. Katzenstein, Secretary
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PHILIPP BROTHERS CHEMICALS, INC.
(Under Section 805 of the Business Corporation Law)
The undersigned, being respectively the President and Secretary of the
below-named corporation, hereby certify as follows:
FIRST: The name of the Corporation is Philipp Brothers Chemicals, Inc.
(the "Corporation").
SECOND: The original certificate of incorporation of the Corporation was
filed by the Department of State on May 11, 1946 (such certificate of
incorporation, as amended and in effect thereafter, the "Certificate of
Incorporation").
THIRD: The Certificate of Incorporation is hereby amended to provide that
25,000 shares of the Corporation's authorized and unissued Preferred Shares (as
defined in the Certificate of Incorporation) shall be designated as Series B
Redeemable Participating Preferred Shares (hereinafter referred to as the
"Series B Preferred Shares"), which shall have the following relative rights,
preferences and limitations, as fixed by the Corporation's Board of Directors
pursuant to authority granted to it under the Certificate of Incorporation and
as permitted by Section 502 of the Business Corporation Law:
1. Rank. (a) For purposes of this Certificate of Amendment, the following
capitalized terms shall have the following meanings.
(i) "Senior Securities" shall mean, with respect to a class or
series of Preferred Stock, all equity securities issued by the Corporation the
terms of which specifically provide that such equity securities rank senior in
preference or priority to such class or series of Preferred Stock with respect
to dividend rights or rights upon liquidation, dissolution or winding up of the
affairs of the Corporation.
(ii) "Parity Securities" shall mean, with respect to a class
or series of Preferred Stock, all equity securities issued by the Corporation
the terms of which specifically provide that such equity securities rank on a
parity, without preference or priority, with such class or series of Preferred
Stock with respect to dividend rights or rights upon liquidation, dissolution or
winding up of the affairs of the Corporation, whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share or sinking
fund provision, if any, of such equity securities be different from those of
such class or series of Preferred Stock.
(iii) "Junior Securities" shall mean, with respect to a class
or series of Preferred Stock, all equity securities issued by the Corporation
ranking junior in preference or priority to such class or series of Preferred
Stock with respect to dividend rights or
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rights upon liquidation, dissolution or winding up of the affairs of the
Corporation, including but not limited to all Common Shares (as defined in the
Certificate of Incorporation) of the Corporation.
(b) The Series B Preferred Shares shall rank senior to all Junior
Securities, on a parity with all Parity Securities, and junior to all Senior
Securities, in each case with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the affairs of the Corporation;
provided that (i) the Series B Preferred Shares shall rank senior to the Series
A Preferred Shares (as defined in the Certificate of Incorporation) with respect
to dividend rights and on a parity with the Series A Preferred Shares with
respect to rights upon liquidation, dissolution or winding up of the Corporation
and (ii) the Series B Preferred Shares shall rank on a parity with the Series C
Preferred Shares with respect to dividend rights and rights upon liquidation,
dissolution or winding up of the Corporation.
2. Dividends. (a) The holders of issued and outstanding Series B Preferred
Shares shall be entitled to receive, when, as and if declared by the Board of
Directors, cash dividends at an annual rate equal to 15% of the Series B
Liquidation Preference (as defined below) (the "Series B Base Dividend"). In
addition, the holders of issued and outstanding Series B Preferred Shares shall
be entitled to participate with the Class A Common Shares (as defined in the
Certificate of Incorporation) and to receive, before any dividends (whether in
cash or in kind) are paid upon or set aside for the Class A Common Shares, the
same dividends (whether in cash or in kind), as are distributed in respect of
each Class A Common Share (the "Series B Participating Dividend"). One Series B
Preferred Share shall be treated for purposes of such participation as being
equal to 0.5 (the "Series B Participation Number") shares of Class A Common
Shares. Holders of Series B Preferred Shares shall not be entitled to any
dividend, whether payable in cash or in kind, in excess of full cumulative
Series B Base Dividends and Series B Participating Dividends, as specifically
provided in this Article THIRD. Series B Participation Dividends shall be paid
at the same time as and when dividends on the Class A Common Shares are paid to
holders of Class A Common Shares.
(b) Series B Base Dividends shall accrue on a daily basis,
cumulative from the date of issuance, and shall be payable semi-annually in
arrears on the last day of each June and December, or, if such date is not a
business day, the succeeding business day (each, a "Series B Base Dividend
Payment Date"). Series B Base Dividends shall be computed on the basis of a
360-day year consisting of twelve 30-day months. Series B Base Dividends shall
accrue and cumulate whether or not the Corporation has earnings or profits,
whether or not there are funds legally available for the payment of dividends
and whether or not dividends are declared. Series B Base Dividends shall be paid
to the holders of record of Series B Preferred Shares as they appear on the
records of the Corporation at the close of business on the 15th day of the
calendar month in which the applicable Series B Base Dividend Payment Date falls
or on such other date designated by the Board of Directors for the payment of
Series B Base Dividends that is not more than 30 nor less than 10 days prior to
such Series B Dividend Payment Date. Any payment of a Series B Base Dividend
shall first be credited against the earliest accumulated but unpaid Series B
Base Dividend due with respect to such share that remains payable.
(c) So long as any Series B Preferred Share is outstanding, no
dividend (other than a dividend in Common Shares of the Corporation) shall be
declared or paid or set aside for payment or other distribution declared or made
upon any Junior Securities of any
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kind, nor shall any Junior Securities of any kind be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such
securities) by the Corporation (except by conversion into or exchange for other
Junior Securities), unless, in each case, full cumulative dividends on all the
Series B Preferred Shares have been or are contemporaneously declared and paid
or are declared and a sum sufficient for the payment thereof is set apart for
such payment for all past dividend periods and the then current dividend period.
If dividends are not paid in full or a sum sufficient for such full payment is
not so set apart upon the Series B Preferred Shares, all dividends declared upon
the Series B Preferred Shares and any series of Parity Securities with respect
to dividends shall be declared pro rata so that the amount of dividends declared
per share of the Series B Preferred Shares and such series of Parity Securities
with respect to dividends shall in all cases bear to each other the same ratio
that accrued and unpaid dividends per share on the Series B Preferred Shares and
such series of Parity Securities with respect to dividends bear to each other.
Notwithstanding anything to the contrary in this Section 2(c), Common Stock of
the Corporation may be repurchased by the Corporation as required by the
Shareholders Agreement dated December 29, 1987, by and between the Corporation,
Charles H. Bendheim, Jack C. Bendheim and Marvin S. Sussman (the "Sussman
Shareholders Agreement"), as amended and in effect on the date of original
issuance of the Series B Preferred Shares, and as thereafter amended, except for
any amendment subsequent to the date of original issuance of the Series B
Preferred Shares which causes the terms of such agreement to be less favorable
in any respect to the Corporation or the holders of the Series B Preferred
Shares.
(d) If the Corporation subdivides or splits the outstanding Class A
Common Shares into a greater number of shares or combines the outstanding Class
A Common Shares into a smaller number of shares, then the Series B Participation
Number shall be adjusted, effective immediately after the relevant effective
date, so as to represent the number of Class A Common Shares of the Corporation
which would be represented by the then applicable Series B Participation Number
upon the effective date of the subdivision, split or combination. As soon as
practicable, the Corporation shall deliver by first class mail, postage prepaid,
to each holder of Series B Preferred Shares a notice, certified as true and
correct by an authorized person of the Corporation, stating the Series B
Participation Number after such adjustment, a brief statement of the facts
requiring such adjustment and the effective date of such adjusted Series B
Participation Number; provided that the failure of the Corporation to give such
notice shall not invalidate any corporate action by the Corporation.
3. Redemption.
(a) Optional Redemption. (i) During the period beginning 90 days
before and ending 90 days after each anniversary of the date of original
issuance of the Series B Preferred Shares (the "Series B Anniversary Period"),
but only once per Series B Anniversary Period, the Corporation may redeem all or
part of the issued and outstanding Series B Preferred Shares by payment in cash
for each share of Series B Preferred Share redeemed in an amount equal to the
Series B Liquidation Preference; provided, however, that if all Series C
Preferred Shares are not redeemed concurrently with the Series B Preferred
Shares during a Series B Anniversary Period, then, in lieu of the foregoing, the
amount to be paid in cash by the Corporation in this Section 3(a)(i) in respect
of Series B Preferred Shares to be redeemed shall be an amount equal to (A) the
Series B Liquidation Preference, plus (B) an amount so that, combined with all
other payments made on the Series B Preferred Shares to be redeemed, a
3
holder of Series B Preferred Shares will have received an internal rate of
return of 20% on the purchase price of the Series B Preferred Shares from the
date of issuance to the date fixed for redemption. Notwithstanding anything to
the contrary, the Series B Preferred Shares may be redeemed in part during a
Series B Anniversary Period only if the number of shares of Series B Preferred
Shares to be redeemed during such Series B Anniversary Period is equal to or
greater than 50% of the number of shares of Series B Preferred Shares issued and
outstanding on the first day of the first Series B Anniversary Period, as
adjusted for stock dividends, subdivisions, splits, combinations or similar
transactions thereof.
(ii) During each period that is not a Series B Anniversary
Period (a "Non-Series B Anniversary Period"), but only once per Non-Series B
Anniversary Period, the Corporation may redeem all or part of the issued and
outstanding Series B Preferred Shares by payment in cash for each share of
Series B Preferred Share redeemed in an amount equal to (A) the Series B
Liquidation Preference, plus (B) an amount equal to the dividends that would
have accrued after such redemption if such Series B Preferred Share was redeemed
on the anniversary of the date of original issuance of the Series B Preferred
Shares occurring in the Series B Anniversary Period immediately following such
Non-Series B Anniversary Period; provided, however, that if all Series C
Preferred Shares are not redeemed concurrently with the Series B Preferred
Shares during a Non-Series B Anniversary Period, then, in lieu of the foregoing,
the amount to be paid in cash by the Corporation in this Section 3(a)(ii) in
respect of Series B Preferred Shares to be redeemed shall be an amount equal to
(A) the Series B Liquidation Preference, plus (B) an amount equal to the
dividends that would have accrued after such redemption if such Series B
Preferred Share was redeemed on the anniversary of the date of original issuance
of the Series B Preferred Shares occurring in the Series B Anniversary Period
immediately following such Non-Series B Anniversary Period, plus (C) an amount
so that, combined with all other payments made on the Series B Preferred Shares
to be redeemed, a holder of Series B Preferred Shares will have received an
internal rate of return of 20% on the purchase price of the Series B Preferred
Shares from the date of issuance to the anniversary of the date of original
issuance of the Series B Preferred Shares occurring in the Series B Anniversary
Period immediately following such Non-Series B Anniversary Period.
Notwithstanding anything to the contrary, the Series B Preferred Shares may be
redeemed in part during a Non-Series B Anniversary Period only if the number of
shares of Series B Preferred Shares to be redeemed during such Non-Series B
Anniversary Period is equal to or greater than 50% of the number of shares of
Series B Preferred Shares issued and outstanding on the first day of the first
Series B Anniversary Period, as adjusted for stock dividends, subdivisions,
splits, combinations or similar transactions thereof.
(iii) The Board of Directors shall fix a record date for the
determination of the Series B Preferred Shares to be redeemed, and such record
date shall not be more than 30 days nor less than 10 days prior to the date of
redemption. The Corporation shall deliver by first class mail, postage prepaid,
a notice of redemption not less than 10 nor more than 30 days prior to the date
of redemption, addressed to the holders of record of the Series B Preferred
Shares as they appear in the records of the Corporation. No failure to give such
notice or any defect therein or in the mailing thereof shall affect the validity
of the proceedings for the redemption of any Series B Preferred Shares except as
to the holder to whom notice was defective or not given. Each notice shall state
the following: (A) the record date and date of redemption; (B) the redemption
price; (C) the number of shares of Series B Preferred Stock to be redeemed; (D)
the place where the Series B Preferred Shares are to be surrendered for payment
4
of the redemption price; and (E) that dividends on the shares to be redeemed
will cease to accrue on such redemption date. If less than all of the Series B
Preferred Shares held by any holder is to be redeemed, the notice mailed to such
holder shall also specify the number of shares of Series B Preferred Shares held
by such holder to be redeemed.
(b) Mandatory Redemption. (i) On and at any time after the Mandatory
Redemption Right Date (as defined below), the Series B Preferred Shares shall be
subject to mandatory redemption by the Corporation at the option and election of
the holder thereof at a price, payable in cash, for each share of Series B
Preferred Share redeemed in an amount equal to the Series B Liquidation
Preference. All shares of Series B Preferred Shares held by such holder electing
for redemption under this clause (b) shall be redeemed. The "Mandatory
Redemption Right Date" means the earlier to occur of (x) the stated maturity or
the earlier redemption in full of the Corporation's Series A and Series B 9 7/8%
Senior Subordinated Notes due 2008 (the "Notes") or (y) a Change of Control (as
defined in Article FIFTH hereto, which definition is the same as that contained
in the Indenture, dated as of June 11, 1998, among Philipp Brothers Chemicals,
Inc., Chase Manhattan Bank, as Trustee, and the guarantors named therein with
respect to the Notes (the "Indenture")).
(ii) The Corporation shall give notice to the holders of
record of Series B Preferred Shares of this mandatory redemption right as soon
as practicable after the Mandatory Redemption Right Date, by first class mail,
postage prepaid, at their addresses as shown on the records of the Corporation.
Each such notice shall state: (A) that, on and after such Mandatory Redemption
Right Date, such holder has the right to require the Corporation to repurchase
for cash all of such holder's Series B Preferred Shares; (B) the redemption
price as of the Mandatory Redemption Right Date (it being understood that the
actual redemption price will be determined as of the date on which the
redemption occurs); (C) the place where the Series B Preferred Shares are to be
surrendered for payment of the redemption price; and (D) that dividends on the
shares to be redeemed will cease to accrue as of the date such shares are
redeemed.
(iii) The Corporation shall redeem each Series B Preferred
Share requested to be redeemed by the holder thereof within 30 days of receipt
by the Corporation of a notice from such holder requesting such redemption. If
the Corporation fails for any reason to so redeem any one or more of the Series
B Preferred Shares so requested to be redeemed, then, immediately upon the
expiration of such 30-day period and for so long as the Corporation has not
redeemed all of such Series B Preferred Shares requested to be redeemed, each
Series B Preferred Share shall entitle the holder thereof to the same voting
rights to which each Class A Common Share of the Corporation (and each share of
any other capital stock of the Corporation) entitles the holder thereof;
provided, however, no Series B Preferred Share shall entitle the holder thereof
to any voting rights with respect to the election and removal of directors. The
holders of Series B Preferred Shares shall vote together with the Class A Common
Shares (and with the shares of any other capital stock of the Corporation).
(c) On and after the date of a redemption pursuant to Sections 3(a)
or (b), the Corporation shall pay the applicable redemption price of a Series B
Preferred Share to the holder thereof in cash upon surrender of the certificates
therefor (properly endorsed or assigned for transfer, if the Board of Directors
shall so require and the notice shall so state); provided that if such
certificates are lost, stolen or destroyed, the Board of Directors may require
5
such holder to indemnify the Corporation, in a reasonable amount and in a
reasonable manner, prior to paying such redemption price. From and after the
applicable redemption date (unless default shall be made by the Corporation in
providing money for the full payment of the redemption price), dividends on the
Series B Preferred Shares to be redeemed on such redemption date shall cease to
accrue, and said shares shall no longer be deemed to be outstanding, and all
rights of the holders thereof as shareholders of the Corporation (except the
right to receive from the Corporation the redemption price) shall cease. In case
fewer than all the shares represented by any such certificate are to be
redeemed, a new certificate shall be issued representing the unredeemed shares
without cost to the holder thereof. Any Series B Preferred Shares which shall at
any time have been redeemed shall, after such redemption, have the status of
authorized but unissued Preferred Shares, without designation as to series until
such shares are once more designated as part of a particular series by the Board
of Directors.
(d) Notwithstanding the foregoing, unless full cumulative dividends
on all Series B Preferred Shares shall have been or contemporaneously are
declared and paid or are declared and a sum sufficient for the payment thereof
is set apart for payment for all past dividend periods and the then current
dividend period, (i) no Series B Preferred Shares may be redeemed unless all
outstanding Series B Preferred Shares are simultaneously redeemed in accordance
with this Section 3 and (ii) the Corporation shall not purchase or otherwise
acquire directly or indirectly any Series B Preferred Shares; provided, however,
that the foregoing shall not prevent the redemption on a pro rata basis of
Series B Preferred Shares in accordance with this Section 3 or the purchase or
acquisition of Series B Preferred Shares pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding Series B Preferred
Shares.
(e) If fewer than all of the outstanding Series B Preferred Shares
are to be redeemed, the Series B Preferred Shares to be redeemed shall be
selected pro rata (as nearly as may be practicable without creating fractional
shares) or by any other equitable method determined by the Corporation.
4. Liquidation Rights. (a) Upon the voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation, each Series B Preferred Share
shall entitle the holder thereof to receive and to be paid out of the assets of
the Corporation available for distribution to its shareholders, before any
payment or distribution shall be made on any Junior Securities with respect to
the liquidation, dissolution, or winding up of the Corporation, a stated value
in the amount of $1,000, plus an amount equal to all accrued and unpaid
dividends to the date fixed for payment thereof (collectively, the "Series B
Liquidation Preference").
(b) After the payment to the holders of Series B Preferred Shares of
the full amount of the liquidation distribution to which they are entitled
pursuant to Section 4(a), the holders of Series B Preferred Shares as such shall
have no right or claim to any of the remaining assets of the Corporation.
(c) If, upon any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the amounts payable with respect to the Series
B Preferred Shares and any other Parity Securities with respect to the
liquidation, dissolution or winding up of the Corporation are not paid in full,
the holders of the Series B Preferred Shares and of such other
6
Parity Securities will share ratably in any such distribution of assets of the
Corporation in proportion to the full respective values to which they are
entitled.
(d) Neither the sale of all or substantially all of the property or
business of the Corporation, nor the merger or consolidation of the Corporation
into or with any other corporation or entity or the merger or consolidation of
any other corporation or entity into or with the Corporation, shall necessarily
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section 4.
5. Voting Rights. (a) Holders of Series B Preferred Shares will have no
voting rights, except as set forth below or as otherwise required by law from
time to time.
(b) So long as any Series B Preferred Shares are outstanding, the
Corporation shall not take any of the following actions, without the prior
consent or affirmative vote of the holders of at least two-thirds of all Series
B Preferred Shares then issued and outstanding, given in person or by proxy,
either in writing or at a meeting called therefor (such holders of Series B
Preferred Shares voting separately as a class):
(i) any amendment, alteration or change to the rights,
preferences, privileges or powers of any Series B Preferred Share in any manner
(whether by merger, consolidation, reclassification or otherwise) that adversely
affects any shares thereof or present or future holders thereof;
(ii) any authorization, creation (by way of merger,
consolidation, reclassification or otherwise) or issuance of any Senior
Securities or Parity Securities of any kind;
(iii) any amendment, repeal or alteration of this Certificate
of Amendment, the Certificate of Incorporation or Bylaws in any manner (by way
of merger, consolidation, reclassification or otherwise) that adversely affects
the present or future holders of the Series B Preferred Shares; or
(iv) any understanding, agreement or contract to do any of the
foregoing.
FOURTH: The Certificate of Incorporation is hereby further amended to
provide that 20,000 shares of the Corporation's authorized and unissued
Preferred Shares shall be designated as Series C Redeemable Participating
Preferred Shares (hereinafter referred to as the "Series C Preferred Shares"),
which shall have the following relative rights, preferences and limitations, as
fixed by the Corporation's Board of Directors pursuant to authority granted to
it under the Certificate of Incorporation and as permitted by Section 502 of the
Business Corporation Law:
1. Rank. (a) The terms "Senior Securities," "Parity Securities" and
"Junior Securities" shall have the meanings given to them in Section 1(a) of
Article THIRD hereinabove.
(b) The Series C Preferred Shares shall rank senior to all Junior
Securities, on a parity with all Parity Securities, and junior to all Senior
Securities, in each case with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the affairs
7
of the Corporation; provided that (i) the Series C Preferred Shares shall rank
senior to the Series A Preferred Shares with respect to dividend rights and on a
parity with the Series A Preferred Shares with respect to rights upon
liquidation, dissolution or winding up of the Corporation and (ii) the Series C
Preferred Shares shall rank on a parity with the Series B Preferred Shares with
respect to dividend rights and rights upon liquidation, dissolution or winding
up of the Corporation.
2. Dividends. (a) The holders of issued and outstanding Series C Preferred
Shares shall be entitled to receive, when, as and if declared by the Board of
Directors, cash dividends at an annual rate equal to 15% of the Series C
Liquidation Preference (as defined below) (the "Series C Base Dividend"). In
addition, the holders of issued and outstanding Series C Preferred Shares shall
be entitled to participate with the Class A Common Shares and to receive, before
any dividends (whether in cash or in kind) are paid upon or set aside for the
Class A Common Shares, the same dividends (whether in cash or in kind) as are
distributed in respect of each Class A Common Share (the "Series C Participating
Dividend"). One Series C Preferred Share shall be treated for purposes of such
participation as being equal to 0.5 (the "Series C Participation Number") shares
of Class A Common Shares. Holders of Series C Preferred Shares shall not be
entitled to any dividend, whether payable in cash or in kind, in excess of full
cumulative Series C Base Dividends and Series C Participating Dividends, as
specifically provided in this Article FOURTH. Series C Participation Dividends
shall be paid at the same time as and when dividends on Class A Common Shares
are paid to holders of Class A Common Shares.
(b) Series C Base Dividends shall accrue on a daily basis,
cumulative from the date of issuance, and shall be payable semi-annually in
arrears on the last day of each June and December, or, if such date is not a
business day, the succeeding business day (each, a "Series C Base Dividend
Payment Date"). Series C Base Dividends shall be computed on the basis of a
360-day year consisting of twelve 30-day months. Series C Base Dividends shall
accrue and cumulate whether or not the Corporation has earnings or profits,
whether or not there are funds legally available for the payment of dividends
and whether or not dividends are declared. Series C Base Dividends shall be paid
to the holders of record of Series C Preferred Shares as they appear on the
records of the Corporation at the close of business on the 15th day of the
calendar month in which the applicable Series C Base Dividend Payment Date falls
or on such other date designated by the Board of Directors for the payment of
Series C Base Dividends that is not more than 30 nor less than 10 days prior to
such Series C Dividend Payment Date. Any payment of a Series C Base Dividend
shall first be credited against the earliest accumulated but unpaid Series C
Base Dividend due with respect to such share that remains payable.
(c) So long as any Series C Preferred Share is outstanding, no
dividend (other than a dividend in Common Shares of the Corporation) shall be
declared or paid or set aside for payment or other distribution declared or made
upon any Junior Securities of any kind, nor shall any Junior Securities of any
kind be redeemed, purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of any
shares of any such securities) by the Corporation (except by conversion into or
exchange for other Junior Securities), unless, in each case, full cumulative
dividends on all the Series C Preferred Shares have been or are
contemporaneously declared and paid or are declared and a sum sufficient for the
payment thereof is set apart for such payment for all past dividend periods and
the then current dividend period. If dividends are not paid in full or a sum
sufficient
8
for such full payment is not so set apart upon the Series C Preferred Shares,
all dividends declared upon the Series C Preferred Shares and any series of
Parity Securities with respect to dividends shall be declared pro rata so that
the amount of dividends declared per share of the Series C Preferred Shares and
such series of Parity Securities with respect to dividends shall in all cases
bear to each other the same ratio that accrued and unpaid dividends per share on
the Series C Preferred Shares and such series of Parity Securities with respect
to dividends bear to each other. Notwithstanding anything to the contrary in
this Section 2(c), Common Stock of the Corporation may be repurchased by the
Corporation as required by the Sussman Shareholders Agreement (as defined in
Article THIRD), as amended and in effect on the date of original issuance of the
Series C Preferred Shares, and as thereafter amended, except for any amendment
subsequent to the date of original issuance of the Series C Preferred Shares
which causes the terms of such agreement to be less favorable in any respect to
the Corporation or the holders of the Series C Preferred Shares.
(d) If the Corporation subdivides or splits the outstanding Class A
Common Shares into a greater number of shares or combines the outstanding Class
A Common Shares into a smaller number of shares, then the Series C Participation
Number shall be adjusted, effective immediately after the relevant effective
date, so as to represent the number of Class A Common Shares of the Corporation
which would be represented by the then applicable Series C Participation Number
upon the effective date of the subdivision, split or combination. As soon as
practicable, the Corporation shall deliver by first class mail, postage prepaid,
to each holder of Series C Preferred Shares a notice, certified as true and
correct by an authorized person of the Corporation, stating the Series C
Participation Number after such adjustment, a brief statement of the facts
requiring such adjustment and the effective date of such adjusted Series C
Participation Number; provided that the failure of the Corporation to give such
notice shall not invalidate any corporate action by the Corporation.
3. Redemption.
(a) Optional Redemption. (i) During the period beginning 90 days
before and ending 90 days after the third anniversary, and each anniversary
thereafter, of the date of original issuance of the Series C Preferred Shares
(the "Series C Anniversary Period"), but only once per Series C Anniversary
Period, the Corporation may redeem all, but not less than all, of the issued and
outstanding Series C Preferred Shares by payment in cash for each share of
Series C Preferred Share redeemed in an amount equal to (A) the Series C
Liquidation Preference, plus (B) a pro rata amount equal to the product of the
Equity Value (as defined below) multiplied by the Applicable Percentage (as
defined below) as of the record date for such redemption (the "Equity Value
Amount").
(ii) During each period that is after the first Series C
Anniversary Period but is not a Series C Anniversary Period (a "Non-Series C
Anniversary Period"), but only once per Non-Series C Anniversary Period, the
Corporation may redeem all, but not less than all, of the issued and outstanding
Series C Preferred Shares by payment in cash for each share of Series C
Preferred Share redeemed in an amount equal to (A) the Series C Liquidation
Preference, plus (B) an amount equal to the dividends that would have accrued
after such redemption if such Series C Preferred Share was redeemed on the
anniversary of the date of original issuance of the Series C Preferred Shares
occurring in the Series C Anniversary Period
9
immediately following such Non-Series C Anniversary Period, plus (C) the Equity
Value Amount.
(iii) "Equity Value" shall mean an amount equal to (A) the sum
of (x) the product obtained by multiplying 7.5 by the greater of either the
Corporation's trailing EBITDA (as defined below) for the most recent four full
fiscal quarters (such period, the "Last Period") or the average of the
Corporation's trailing EBITDA for the Last Period and the Corporation's EBITDA
for the four full fiscal quarters immediately preceding the Last Period plus (y)
the Corporation's cash and marketable securities, and minus (B) all outstanding
indebtedness, minority interests, preferred stock, accrued environmental
reserves, accrued currency reserves, accrued indebtedness for the Net Revenues
Payment (as defined in Article FIFTH hereto, which definition is the same as
that contained in Section 2.6(b) of the Asset Purchase Agreement, among Pfizer,
Inc., a Delaware corporation, the other Asset Selling Corporations (as defined
therein), and the Corporation, dated as of September 28, 2000 (the "Pfizer
Agreement"))), and accrued indebtedness for Gross Profit Excluding Virginiamycin
(as defined in Article FIFTH hereto, which definition is the same as that
contained in Section 1.1 of the Pfizer Agreement). For each relevant fiscal
quarter, the calculation of Equity Value and all of its components (including
but not limited to the components of EBITDA) shall be based on figures that are
reflected in (and only to the extent reflected in) the consolidated balance
sheet and consolidated statements of income and cash flows of the Corporation as
of and for such fiscal quarter, all of which must be prepared in accordance with
generally accepted accounting principles consistently applied and audited by
nationally recognized independent public accountants.
"EBITDA" shall mean, for any period, (x) the sum of income, all
depreciation expenses, all amortization expenses, and any other non-cash
expenses but excluding (y) all extraordinary losses, all interest expenses (net
of interest income), all charges against income for federal, state and local
taxes, all non-recurring expenses or charges, and extraordinary non-recurring
gains, in each case based upon (and only to the extent reflected in) the audited
financial statements of the Corporation used in calculating "Equity Value" in
the immediately preceding paragraph; provided that, unless otherwise agreed to
by a majority the holders of Series C Preferred Shares, payments for all earnout
and royalty payments and all management fees shall be excluded from EBITDA.
"Applicable Percentage" shall mean, with respect to a redemption pursuant
to Section 3(a) during a Series C Anniversary Period or a Non-Series C
Anniversary Period or with respect to the calculation of Capital Stock
Transaction Amount (as defined herein), the percentage listed below opposite the
period in which the redemption occurs or in which the consummation of the
Capital Stock Transaction occurs, respectively:
Period Percentage
------ ----------
September 1, 2003 to February 28, 2004 14.00%
February 29, 2004 to February 28, 2005 18.00%
March 1, 2005 to February 28, 2006 22.00%
March 1, 2006 to February 28, 2007 25.00%
March 1, 2007 to February 28, 2008 27.50%
February 29, 2008 and thereafter 30.00%
10
(iv) The Board of Directors shall fix a record date for the
determination of the Series C Preferred Shares to be redeemed, and such record
date shall not be more than 30 days nor less than 10 days prior to the date of
redemption. The Corporation shall deliver by first class mail, postage prepaid,
a notice of redemption not less than 10 nor more than 30 days prior to the date
of redemption, addressed to the holders of record of the Series C Preferred
Shares as they appear in the records of the Corporation. No failure to give such
notice or any defect therein or in the mailing thereof shall affect the validity
of the proceedings for the redemption of any Series C Preferred Shares except as
to the holder to whom notice was defective or not given. Each notice shall state
the following: (A) the record date and date of redemption; (B) the redemption
price; (C) the number of shares of Series C Preferred Stock to be redeemed; (D)
the place where the Series C Preferred Shares are to be surrendered for payment
of the redemption price; and (E) that dividends on the shares to be redeemed
will cease to accrue on such redemption date.
(v) The Corporation may not redeem any share of Series C
Preferred Shares pursuant to this Section 3(a) if any share of Series B
Preferred Shares is outstanding, unless all outstanding shares of Series B
Preferred Shares are redeemed concurrently with such redemption of Series C
Preferred Shares.
(b) Mandatory Redemption. (i) On and at any time after the Mandatory
Redemption Right Date (as defined in Article THIRD), the Series C Preferred
Shares shall be subject to mandatory redemption by the Corporation at the option
and election of the holder thereof at a price, payable in cash, for each share
of Series C Preferred Share redeemed in an amount equal to (A) the Series C
Liquidation Preference, plus (B) the Equity Value Amount. All shares of Series C
Preferred Shares held by such holder electing for redemption under this clause
(b) shall be redeemed.
(ii) The Corporation shall give notice to the holders of
record of Series C Preferred Shares of this mandatory redemption right as soon
as practicable after the Mandatory Redemption Right Date, by first class mail,
postage prepaid, at their addresses as shown on the records of the Corporation.
Each such notice shall state: (A) that, on and after such Mandatory Redemption
Right Date, such holder has the right to require the Corporation to repurchase
for cash all of such holder's Series C Preferred Shares; (B) the redemption
price as of the Mandatory Redemption Right Date (it being understood that the
actual redemption price will be determined as of the date on which the
redemption occurs); (C) the place where the Series C Preferred Shares are to be
surrendered for payment of the redemption price; and (D) that dividends on the
shares to be redeemed will cease to accrue as of the date such shares are
redeemed.
(iii) The Corporation shall redeem each Series C Preferred
Share requested to be redeemed by the holder thereof within 30 days of receipt
by the Corporation of a notice from such holder requesting such redemption. If
the Corporation fails for any reason to so redeem any one or more of the Series
C Preferred Shares so requested to be redeemed, then, immediately upon the
expiration of such 30-day period and for so long as the Corporation has not
redeemed all of such Series C Preferred Shares requested to be redeemed, each
Series C Preferred Share shall entitle the holder thereof to the same voting
rights to which each Class A Common Share of the Corporation (and each share of
any other capital stock of the
11
Corporation) entitles the holder thereof; provided, however, no Series C
Preferred Share shall entitle the holder thereof to any voting rights with
respect to the election and removal of directors. The holders of Series C
Preferred Shares shall vote together with the Class A Common Shares (and with
the shares of any other capital stock of the Corporation).
(c) Capital Stock Transaction Adjustment. (i) The Corporation may
not effect (A) any recapitalization of the Corporation or reclassification of
any capital stock of the Corporation, (B) any consolidation, merger or
combination of the Corporation with or into another corporation or entity, (C)
any sale or conveyance of all or substantially all of the assets of the
Corporation to any person or entity as a result of which holders of any capital
stock of the Corporation shall be entitled to receive cash, stock, securities or
other property with respect to or in exchange for such capital stock, (D) any
initial public offering of any capital stock of the Corporation, or (E) any
redemption, acquisition or other purchase of any Junior Securities or Parity
Securities (other than Series B Preferred Shares or Series C Preferred Shares)
of the Corporation (collectively, a "Capital Stock Transaction"), unless (x) the
amount of the Series C Liquidation Preference is increased by the Capital Stock
Transaction Amount (as defined below), if any, with respect to all outstanding
Series C Preferred Shares as of the date of the consummation of the Capital
Stock Transaction, and (y) if such Capital Stock Transaction occurs during the
one-year period following the redemption of any Series C Preferred Shares, then
immediately prior to or concurrently with the consummation of the Capital Stock
Transaction, the Corporation pays in cash the Capital Stock Transaction Amount,
if any, to each person or entity that was the last holder of record of a Series
C Preferred Share that was redeemed during the 360-day period preceding the date
of the consummation of such Capital Stock Transaction. "Capital Stock
Transaction Amount" means a pro rata amount equal to the excess, if any, of (1)
the aggregate value of the outstanding shares, fully diluted, of all classes of
Common Stock of the Corporation based on, but immediately prior to the
consummation of, the Capital Stock Transaction multiplied by the Applicable
Percentage as of the date of the consummation of the Capital Stock Transaction
over (2) the Equity Value Amount immediately prior to the consummation of the
Capital Stock Transaction.
(ii) The Corporation shall deliver by first class mail,
postage prepaid, a notice of entering into a Capital Stock Transaction as soon
as practicable and in any event not less than 20 days prior to the date of
consummation thereof, addressed to the holders of record of the Series C
Preferred Shares and, if clause (y) of subsection (i) is applicable, such former
holders of record of the Series C Preferred Shares, as they appear in the
records of the Corporation. Each notice shall state the following: (A) a brief
description of the Capital Stock Transaction and (B), if applicable, the Capital
Stock Transaction Amount and the method of calculation therefor.
(d) On and after the date of a redemption pursuant to Sections 3(a)
or (b), the Corporation shall pay the applicable redemption price of a Series C
Preferred Share to the holder thereof in cash upon surrender of the certificates
therefor (properly endorsed or assigned for transfer, if the Board of Directors
shall so require and the notice shall so state); provided that if such
certificates are lost, stolen or destroyed, the Board of Directors may require
such holder to indemnify the Corporation, in a reasonable amount and in a
reasonable manner, prior to paying such redemption price. From and after the
applicable redemption date (unless default shall be made by the Corporation in
providing money for the full payment of the redemption price), dividends on the
Series C Preferred Shares to be redeemed on such
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redemption date shall cease to accrue, and said shares shall no longer be deemed
to be outstanding, and all rights of the holders thereof as shareholders of the
Corporation (except the right to receive from the Corporation the redemption
price and any Capital Stock Transaction Amount) shall cease. In case fewer than
all the shares represented by any such certificate are to be redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof. Any Series C Preferred Shares which shall at any time have
been redeemed shall, after such redemption, have the status of authorized but
unissued Preferred Shares, without designation as to series until such shares
are once more designated as part of a particular series by the Board of
Directors.
(e) Notwithstanding the foregoing, unless full cumulative dividends
on all Series C Preferred Shares shall have been or contemporaneously are
declared and paid or are declared and a sum sufficient for the payment thereof
is set apart for payment for all past dividend periods and the then current
dividend period, (i) no Series C Preferred Shares may be redeemed unless all
outstanding Series C Preferred Shares are simultaneously redeemed in accordance
with this Section 3 and (ii) the Corporation shall not purchase or otherwise
acquire directly or indirectly any Series C Preferred Shares; provided, however,
that the foregoing shall not prevent the purchase or acquisition of Series C
Preferred Shares pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding Series C Preferred Shares.
4. Liquidation Rights. (a) Upon the voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation, each Series C Preferred Share
shall entitle the holder thereof to receive and to be paid out of the assets of
the Corporation available for distribution to its shareholders, before any
payment or distribution shall be made on any Junior Securities with respect to
the liquidation, dissolution, or winding up of the Corporation, (i) a stated
value in the amount of $1,000 (as adjusted by the Capital Stock Transaction
Amount, if any), plus an amount equal to all accrued and unpaid dividends to the
date fixed for payment thereof (collectively, the "Series C Liquidation
Preference"), plus (ii) the Equity Value Amount.
(b) After the payment to the holders of Series C Preferred Shares of
the full amount of the liquidation distribution to which they are entitled
pursuant to Section 4(a), the holders of Series C Preferred Shares as such shall
have no right or claim to any of the remaining assets of the Corporation.
(c) If, upon any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the amounts payable with respect to the Series
C Preferred Shares and any other Parity Securities with respect to the
liquidation, dissolution or winding up of the Corporation are not paid in full,
the holders of the Series C Preferred Shares and of such other Parity Securities
will share ratably in any such distribution of assets of the Corporation in
proportion to the full respective values to which they are entitled.
(d) Neither the sale of all or substantially all of the property or
business of the Corporation, nor the merger or consolidation of the Corporation
into or with any other corporation or entity or the merger or consolidation of
any other corporation or entity into or with the Corporation, shall necessarily
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section 4.
5. Voting Rights. (a) Holders of Series C Preferred Shares will have no
voting rights, except as set forth below or as otherwise required by law from
time to time.
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(b) So long as any Series C Preferred Shares are outstanding, the
Corporation shall not take any of the following actions, without the prior
consent or affirmative vote of the holders of at least two-thirds of all Series
C Preferred Shares then issued and outstanding, given in person or by proxy,
either in writing or at a meeting called therefor (such holders of Series C
Preferred Shares voting separately as a class):
(i) any amendment, alteration or change to the rights,
preferences, privileges or powers of any Series C Preferred Share in any manner
(whether by merger, consolidation, reclassification or otherwise) that adversely
affects any shares thereof or present or future holders thereof;
(ii) any authorization, creation (by way of merger,
consolidation, reclassification or otherwise) or issuance of any Senior
Securities or Parity Securities of any kind;
(iii) any amendment, repeal or alteration of this Certificate
of Amendment, the Certificate of Incorporation or Bylaws of the Corporation in
any manner (by way of merger, consolidation, reclassification or otherwise) that
adversely affects the present or future holders of the Series C Preferred
Shares; or
(iv) any understanding, agreement or contract to do any of the
foregoing.
FIFTH: The following terms, as used in this Certificate of Amendment,
shall have the definitions set forth below.
1. Definition of Change of Control. "Change of Control" means the
occurrence of any of the following events after the date of filing this
Certificate of Amendment: (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) (other than one or more Permitted
Holders) is or becomes (including by merger, consolidation or otherwise) the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have beneficial ownership of all shares
that such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 50%
or more of the voting power of the total outstanding Voting Stock of the
Corporation; (ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Corporation (together with any new directors whose election to such Board of
Directors, or whose nomination for election by the stockholders of the
Corporation, was approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of such Board of Directors of the Corporation
then in office; (iii) the approval by the holders of Capital Stock of the
Corporation of any plan or proposal for the liquidation or dissolution of the
Corporation as a whole and not any Restricted Subsidiary or Guarantor (whether
or not otherwise in compliance with the terms of the Indenture); or (iv) the
sale or other disposition (other than by way of merger or consolidation) of all
or substantially all of the Capital Stock or assets of the Corporation and its
Restricted Subsidiaries taken as a whole to any person or group (as defined in
Rule 13d-5 of the Exchange Act) (other than to one or more of the Permitted
Holders) as an entirely or substantially as an entirety in one transaction or a
series or related transactions, unless the "beneficial owners" of the Voting
Stock of such Person
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immediately prior to such transaction own, directly or indirectly, more than 50%
of the total voting power of such Person immediately after such transaction.
As used in the above definition of "Change of Control" and in the
definitions that follow, the following terms have the meanings set forth below:
"Affiliates" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with") of any Person means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including partnership interests, whether general or limited, of
such Person, including any Preferred Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Securities and Exchange Commission promulgated
thereunder.
"Guarantor" means (i) the domestic Subsidiaries of the Corporation on the
Issue Date, (ii) each of the Corporation's Restricted Subsidiaries which become
Restricted Subsidiaries after the Issue Date and which are organized in the
United States, and (iii) each of the Corporation's Restricted Subsidiaries that
in the future executes a supplemental indenture in which such Restricted
Subsidiary agrees to be bound by the terms of the Indenture as a Guarantor.
"Issue Date" means the date on which the Notes are first issued under this
Indenture.
"Permitted Holders" means (i) Jack Bendheim; (ii) each of his spouse,
siblings, ancestors, descendants (whether by blood, marriage or adoption, and
including stepchildren) and the spouses, siblings, ancestors and descendants
(whether by blood, marriage or adoption, and including stepchildren) of such
natural persons, the beneficiaries, estates and legal representatives of any of
the foregoing, the trustee of any bona fide trust of which any of the foregoing,
individually or in the aggregate, are the majority in interest beneficiaries or
grantors, and any corporation, partnership, limited liability company or other
Person in which any of the foregoing, individually or in the aggregate, own or
control a majority in interest; and (iii) all Affiliates controlled by the
individual named in clause (i) above.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Preferred Stock" as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of
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dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over Capital
Stock of any other class of such Person.
"Restricted Subsidiary" means each direct or indirect Subsidiary of the
Corporation other than an Unrestricted Subsidiary.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding voting power of the Voting Stock of which is owned or controlled,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person, or by such Person and one or more other Subsidiaries thereof, or
(ii) any limited partnership of which such Person or any Subsidiary of such
person is a general partner, or (iii) any other person (other than a corporation
or limited partnership) in which such Person or one or more other Subsidiaries
of such Person, or such Person and one or more other Subsidiaries thereof,
directly or indirectly, have more than 50% of the outstanding partnership or
similar interests or have the power, by contract or otherwise, to direct or
cause the direction of the policies, management and affairs thereof.
"Unrestricted Subsidiary" means any Subsidiary of the Corporation
designated as such pursuant to and in compliance with Section 4.14 of the
Indenture and not redesignated a Restricted Subsidiary in compliance with such
Section.
"Voting Stock" of a Person means Capital Stock of such Person of the class
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the board of directors,
managers or trustees of such Person (irrespective of whether or not at the time
stock of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
2. Definition of Net Revenues Payment. "Net Revenues Payment" means Net
Virginiamycin Revenues for the most recently completed Measurement Period.
In the above definition of "Net Revenues Payment" and in the definitions
that follow, the following terms have the meanings set forth below:
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, such
Person at any time during the period for which the determination of affiliation
is being made.
"Closing Date" means the date on which the closing of the transactions
contemplated by the Pfizer Agreement occurs.
"Measurement Period" means the three (3)-month period commencing on the
first day of the month following the month in which the Closing Date occurs and
ending on the last day of the month that is three (3) months after the month in
which the Closing Date occurs, and each of the nineteen (19) successive three
(3)-month periods thereafter commencing on the first day of the month following
the most recently completed Measurement Period and ending on the last day of the
month in which the fifth anniversary of the Closing Date occurs.
"Net Virginiamycin Revenues" means the gross invoice value of all sales of
Virginiamycin by the Corporation and/or its Affiliates to third parties, net of
(regardless of the
16
period to which any such items apply) (i) all applicable bona fide trade and
volume discounts and rebates and allowances to customers accrued on such sales
and (ii) credits, allowances, refunds, returns and adjustments actually granted
to customers on account of spoiled, damaged, outdated or returned goods;
provided that in the event sales of Virginiamycin are bundled with other
products of the Corporation, the portion of the gross invoice value derived from
the sale of the bundled products attributable to Virginiamycin for purposes
hereof shall be in proportion to the most recent published sales price for
Virginiamycin as compared to the most recent published sales price for the other
bundled products. Net Virginiamycin Revenues also shall include net royalty
payments, fees and other payments relating to Virginiamycin received by the
Corporation and/or its Affiliates from licensees or distributors of
Virginiamycin and other third parties appointed by the Corporation serving a
similar function. Notwithstanding the foregoing, there shall not be included in
"Net Virginiamycin Revenues" sales of Virginiamycin by the Corporation and/or
its Affiliates to Pfizer, Inc. and/or its Affiliates pursuant to the
arrangements relating to Egypt, Algeria and India entered into by the parties
pursuant to the terms of the Pfizer Agreement.
"Person" means an individual, a corporation, a partnership, an
association, a trust or other entity or organization.
"Products" means certain feed additive products listed on Schedule 1 of
the Pfizer Agreement.
"Virginiamycin" means any of the Products which contain as their active
ingredient the composite virginiamycin antibiotic.
3. Definition of Gross Profit Excluding Virginiamycin. "Gross Profit
Excluding Virginiamycin" means net sales (gross sales less returns and
allowances) by the Corporation and/or its Affiliates to third parties less its
and/or their actual cost of sales (standard cost plus manufacturing variances
and the impact of inventory revaluations) for all Products, excluding
Virginiamycin, and any extensions, improvements, substitutes or replacements
therefor, in each case that contain the same active ingredients as are used in
the Products, excluding Virginiamycin; provided, however, that gross profit in
respect of any products acquired by the Corporation or its Affiliates after the
Closing Date containing the same active ingredients as are used in the Products
(excluding Virginiamycin) shall not be included in such calculation if the
acquired products are sold under a trademark or brand name other than those
included in the Trademark Rights acquired by the Corporation hereunder. Gross
Profit Excluding Virginiamycin also shall include net royalty payments, fees and
other payments relating to the foregoing Products (including the aforementioned
extensions, improvements, substitutes or replacements) received by the
Corporation and/or its Affiliates from licensees and distributors of the
foregoing Products and other third parties appointed by the Corporation serving
a similar function. For purposes of determining cost of sales, the manufacturing
variances and the impact of inventory revaluations shall be appropriately
allocated between Virginiamycin and the other Products based on specific
identification, if feasible, or any other reasonable method that results in a
fair and equitable allocation.
In the above definition of "Gross Profit Excluding Virginiamycin," the
term "Trademark Rights" means registered and unregistered trademarks, service
marks, brand names and certification marks set forth on Schedule 5.12 of the
Pfizer Agreement, and the goodwill
17
associated with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing, including any
extension, modification or renewal of any such registration or application.
Other capitalized terms contained in this Section 3 of Article FIFTH not
otherwise defined in this Section 3 of Article FIFTH shall have the meanings
ascribed thereto in Section 2 of Article FIFTH.
SIXTH: These amendments to the Certificate of Incorporation were
authorized and approved by the Board of Directors of the Corporation at a
meeting duly held therefor.
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IN WITNESS WHEREOF, the undersigned are authorized to act on behalf of the
Corporation and have signed and executed this Certificate of Amendment, in their
respective capacities as indicated below, on November 30, 2000.
/s/ JACK C. BENDHEIM
-------------------------------
Jack C. Bendheim, President
/s/ JOSEPH M. KATZENSTEIN
-------------------------------
Joseph M. Katzenstein, Secretary
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