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EXHIBIT 3.1
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES A PREFERRED STOCK
OF
AMERICAN XTAL TECHNOLOGY, INC.
American Xtal Technology, Inc., (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware, does hereby certify that, pursuant to authority conferred upon the
Board of Directors of the Corporation by the Certificate of Incorporation, as
amended, of the Corporation, and pursuant to Section 151 of the General
Corporation Law of the State of Delaware, the Board of Directors of the
Corporation at a meeting duly held adopted resolutions (i) authorizing a series
of the Corporation's previously authorized preferred stock, par value $0.001 per
share, and (ii) providing for the designations, preferences and relative,
participating, optional or other rights, and the qualifications, limitations or
restrictions thereof, of one million (1,000,000) shares of Series A Preferred
Stock of the Corporation, as follows:
RESOLVED, that pursuant to the authority vested in the Board of
Directors by the Certificate of Incorporation of the Corporation, as
amended, a new series of preferred stock, $0.001 par value, be and
hereby is established and designated as Series A Preferred Stock,
consisting of 1,000,000 shares, the powers, preferences and relative,
participating, optional or other special rights of which, and the
qualifications, limitations or restrictions of which, in addition to any
set forth in the Corporation's Certificate of Incorporation, shall be as
follows:
SERIES A PREFERRED STOCK
(1) DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Preferred Stock", par value $0.001 per share, and the
number of shares constituting the Series A Preferred Stock shall be one million
(1,000,000) and shall not be subject to increase.
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(2) RANK. All Series A Preferred Stock shall rank (i) prior to the
Corporation's common stock, par value $0.001 per share, ("Common Stock"); (ii)
prior to any class or series of capital stock of the Corporation hereafter
created (unless such class or series of capital stock specifically by its terms,
ranks senior or pari passu with the Series A Preferred Stock) (collectively with
the Common Stock, "Junior Securities"); (iii) pari passu with any class or
series of capital stock of the Corporation hereinafter created specifically
ranking, by its terms, on parity with the Series A Preferred Stock (such class
or series the "Pari Passu Securities"); and (iv) junior to any class or series
of capital stock of the Corporation hereafter created, specifically ranking by
its terms, senior to the Series A Preferred Stock ("Senior Securities"), in each
case as to distribution of assets upon liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary.
(3) DIVIDENDS AND DISTRIBUTIONS.
(a) The holders of the Series A Preferred Stock shall be entitled
to receive, out of any funds legally available therefor, dividends in cash in an
amount equal to $0.20 per annum for each share of Series A Preferred Stock held
by them, in each case as adjusted for stock splits, recapitalizations and the
like. Dividends shall accrue quarterly on the Series A Preferred Stock and shall
be payable as and when declared by the Board of Directors. Dividends that have
accrued but not been paid shall cumulate. Dividends shall be payable on the
Series A Preferred Stock in preference and priority to any payment of any
dividend on Common Stock when and as declared by the Board. No dividend may be
paid on the Series A Preferred Stock, Senior Securities or Pari Passu Securities
unless the same percentage of the respective dividend preference is also paid on
each Series A Preferred Stock, Senior Securities or Pari Passu Securities in
preference and priority to any payment of dividends on the Common Stock. Except
as provided above or elsewhere herein, the Series A Preferred Stock shall not be
entitled to dividends.
(b) If at any time the Corporation pays less than the total
amount of dividends then accrued with respect to the Series A Preferred Stock,
such payment shall be distributed pro rata among the holders thereof based upon
the aggregate accrued but unpaid dividends on the Series A Preferred Stock held
by each such holder.
(c) Unless the Corporation shall have paid all dividends
theretofore accrued on the Series A Preferred Stock at the time outstanding, so
long as any shares of Series A Preferred Stock are outstanding, the Corporation
shall not pay or declare any dividend or distribution of any nature on shares of
Common Stock or Junior Stock.
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(d) So long as any shares of Series A Preferred Stock are
outstanding, neither the Corporation nor any subsidiary of the Corporation shall
redeem, repurchase or otherwise acquire any shares of Common Stock or Junior
Stock, unless (x) all accrued dividends on the Series A Preferred Stock have
been paid, and (y) after giving effect to such redemption, repurchase or
acquisition, the net worth of the Corporation as determined in accordance with
generally accepted accounting principles shall equal or exceed the aggregate
liquidation preference on all shares of Series A Convertible Preferred Stock and
Series A Preferred Stock then outstanding; provided, however, that this
limitation shall not apply to repurchase of shares of Common Stock held by
employees, directors or consultants upon termination of their employment or
services pursuant to agreements providing for such repurchase, and provided
further, that the foregoing shall not restrict the retirement of shares without
payment of consideration therefor.
(4) LIQUIDATION PREFERENCE.
(a) In the event of a liquidation, dissolution, or winding up of
the Corporation, whether voluntary or involuntary, after the Corporation's debts
have been paid or amounts are set aside for such payment and the liquidation
preference of any Senior Securities, the holders of Series A Preferred Stock
shall be entitled to receive out of the assets of the Corporation an amount per
share of Series A Preferred Stock equal to $4.00 (as adjusted for any stock
splits, stock dividends, recapitalizations or the like with respect to such
shares) (collectively, the "Liquidation Preference"), plus any dividends that
have accrued but not been paid, and no more, before any payment shall be made or
any assets distributed to the holders of Common Stock or any other Junior
Securities by reason of their ownership thereof. If the assets remaining after
the Corporation's debts have been paid or amounts set aside for such payment are
insufficient to pay to the holders of Series A Preferred Stock the full amount
to which they are entitled under this Paragraph 6(a), then the entire assets of
the Corporation available for distribution shall be distributed ratably among
the holders of the Series A Preferred Stock.
(b) After payment in full of the Liquidation Preference plus
accrued but unpaid dividends of the shares of the Series A Preferred Stock, no
further participation in any distribution of as sets by the Corporation shall be
allowed in respect of such shares.
(c) After the payment or distribution to the holders of the
Series A Preferred Stock of the full Liquidation Preference, the holders of the
Common Stock and any Junior Securities shall be entitled to receive all
remaining assets of the Corporation to be distributed.
(5) VOTING RIGHTS. Except as otherwise required by law or expressly
provided herein, shares of Series A Preferred Stock shall not be entitled to
vote on any matter to be voted on by the stockholders of the Corporation.
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(6) AMENDMENT. So long as any shares of Series A Preferred Stock are
outstanding, the Corporation shall not, without first obtaining the approval by
vote or written consent, in the manner provided by law, of the holders of at
least a majority of the total number of shares of the Series A Preferred Stock
outstanding, alter, amend or modify the powers, preferences, privileges or
rights of the Series A Preferred Stock or amend the provisions of this Section
6.
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IN WITNESS WHEREOF, we have hereunto set our hands and seals as
President and Secretary, respectively, of this Corporation on this ____ day of
May, 1999, and we hereby affirm that the foregoing Certificate is our act and
deed and the act and deed of the Corporation and that the facts stated therein
are true.
/s/ Morris S. Young
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Morris S. Young, President
Attest:
/s/ Guy Atwood
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Guy D. Atwood, Secretary
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