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EXHIBIT 3.1
CERTIFICATE OF DETERMINATION OF
PREFERENCES OF
SERIES B PREFERRED STOCK
OF
OPHTHALMIC IMAGING SYSTEMS
(Pursuant to Section 401 of the California General Corporation Law)
The undersigned, Steven R. Verdooner and Steven C. Lagorio, do hereby
certify that (1) they are the duly elected and acting Chief Executive Officer
and Secretary, respectively, of Ophthalmic Imaging Systems, a corporation
organized and existing under the General Corporation Law of the State of
California (hereinafter called the "Corporation"), (2) the Corporation has
authorized that 2,000 shares of the Company's preferred stock be designated as
Series B Preferred Stock, (3) none of the Series B Preferred Stock has been
issued as of the date hereof, and (4) under authority given by the Corporation's
Articles of Incorporation, the Corporation's Board of Directors has duly adopted
the following recitals and resolutions:
"WHEREAS, the Articles of Incorporation, as amended, provides
for a class of shares known as the Preferred Stock, issuable from time
to time in one or more series;
WHEREAS, the Board of Directors of the Corporation is
authorized, within the limitations and restrictions stated in the
Articles of Incorporation, to designate or alter the rights,
preferences, privileges, and restrictions granted to or imposed upon
each wholly unissued series of Preferred Stock, to fix the number of
shares constituting each such series, and to determine the designation
thereof; and
WHEREAS, the Board of Directors of the Corporation desires,
pursuant to its authority, to designate a series of the Preferred Stock
as "Series B Preferred Stock" and to designate the number of shares
constituting such series and to fix the rights, preferences, privileges
and restrictions of such series;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors of
the Corporation hereby designates such new series of the Preferred Stock
and the number of shares constituting such series and fixes the rights,
preferences, privileges and restrictions relating to such series as
follows:
SECTION 1. DESIGNATION AND AMOUNT. The Corporation shall have a
series of Preferred Stock designated as "Series B Preferred Stock,"
$0.01 par value (the "Series B Preferred" or the "Series B Preferred
Stock") and the number of shares constituting the Series B Preferred
Stock shall be 2,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series B Preferred Stock
to a number less than the number of shares of Series B Preferred Stock
then-outstanding plus the number of such shares reserved for issuance
upon the exercise of outstanding options, rights or warrants or upon
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the conversion of any outstanding securities issued by the Corporation
into Series B Preferred Stock.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS. In the event any
dividend or other distribution payable in cash or other property is
declared on the Common Stock of the Corporation (excluding any dividend
or other distribution for which adjustment to the Conversion Price as
provided by Section 6 hereof), each holder of shares of Series B
Preferred Stock on the record date for such dividend or distribution
shall be entitled to receive on the date of payment or distribution of
such dividend or other distribution the same cash or other property
which such holder would have received if on such record date such holder
was the holder of record of one share of Common Stock for every share of
Series B Preferred Stock then held by such holder. The right to such
dividends on the Series B Preferred shall not be cumulative. No
dividends shall be paid on any share of Common Stock or Series A
Preferred Stock unless and until all declared dividends to which holders
of Series B Preferred Stock are entitled under this Section 2 have been
paid in full.
SECTION 3. VOTING RIGHTS. Except as otherwise required by law or
as set forth herein, the holder of each share of Common Stock issued and
outstanding shall have one vote for each share of Common Stock held by
such holder, and the holder of each share of Series B Preferred Stock
shall be entitled to 1,000 votes for each share of Series B Preferred
Stock held by such holder, such votes to be counted together with all
other shares of stock of the Corporation having general voting power and
not counted separately as a class, except as specifically set forth in
this Certificate of Determination. Holders of Common Stock and Series B
Preferred Stock shall be entitled to notice of any stockholders' meeting
in accordance with the Bylaws of the Corporation. If, at any time after
the effective date of this Certificate of Determination, Premier Laser
Systems, Inc., a California corporation ("Premier"), sells or otherwise
disposes of any Common Stock of the Corporation owned by Premier on the
effective date of this Certificate of Determination, then for any and
all votes taken thereafter, the Series B Preferred Stock shall be
entitled to one vote per share.
SECTION 4. LIQUIDATION PREFERENCE. In the event of any
liquidation, dissolution or winding up of the Corporation, either
voluntary or involuntary, distributions to the stockholders of the
Corporation shall be made in the following manner:
(A) The holders of the Series B Preferred Stock shall be
entitled to receive, prior and in preference to any distribution of any
of the assets or surplus funds of the Corporation to the holders of the
Common Stock and prior to and in preference to any distribution of any
assets or surplus funds of the Corporation to the holders of the Series
A Preferred Stock of the Corporation, by reason of their ownership of
such stock, the amount equal to twenty-five dollars ($25.00), plus an
amount equal to all declared and unpaid dividends on the Series B
Preferred Stock (collectively, the "Liquidation Preference"). If upon
the occurrence of a liquidation, dissolution or winding up of the
Corporation the assets and funds thus distributed among the holders of
the Series B
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Preferred Stock shall be insufficient to permit the payment to such
holders of the full preferential amount, then the entire assets and
funds of the Corporation legally available for distribution shall be
distributed ratably among the holders of the Series B Preferred Stock in
proportion to the preferential amount each such holder is otherwise
entitled to receive.
(B) After setting apart or paying in full the preferential
amounts due pursuant to Section 4(A), above, the remaining assets of the
Corporation available for distribution to stockholders, if any, shall be
distributed to the holders of Series A Preferred Stock and the Common
Stock as provided by the Corporation's Articles of Incorporation.
(C) A consolidation or merger of this Corporation with or
into any other corporation or corporations, or a sale, conveyance or
disposition of all or substantially all of the assets of this
Corporation, or the effectuation by the Corporation of a transaction or
series of related transactions in which more than 50% of the voting
power of the Corporation is disposed of, shall not be deemed to be a
liquidation, dissolution or winding up within the meaning of this
Section 4.
(D) In the event the Corporation proposes to distribute
assets other than cash in connection with any liquidation, dissolution
or winding up of the Corporation, the value of the assets to be
distributed to the holders of shares of Series B Preferred Stock and
Common Stock shall be determined in good faith by the Board of Directors
(the "Board"). Any securities not subject to investment letter or
similar restrictions on free marketability shall be valued as follows:
(i) If traded on a securities exchange, the value
shall be deemed to be the average of the security's closing prices on
such exchange over the thirty (30) day period ending one (1) day prior
to the distribution;
(ii) If actively traded over-the-counter, the value
shall be deemed to be the average of the closing bid prices over the
thirty (30) day period ending three (3) days prior to the distribution;
and
(iii) If there is no active public market, the value
shall be the fair market value thereof as determined in good faith by
the Board.
The method of valuation of securities subject to investment
letter or other restrictions on free marketability shall be adjusted to
make an appropriate discount from the market value determined as above
in clauses (i), (ii) or (iii) to reflect the fair market value thereof
as determined in good faith by the Board. The holders of at least a
majority of the outstanding Series B Preferred Stock shall have the
right to challenge any determination by the Board of fair market value
pursuant to this Section 4(D), in which case the determination of fair
market value shall be made by an independent appraiser selected jointly
by the Board and the challenging parties, the cost of such appraisal to
be borne equally by the Corporation and the challenging parties.
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SECTION 5. CONVERSION. The holders of the Series B Preferred
Stock have conversion rights as follows (the "Conversion Rights"):
(A) Each share of Series B Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the
date of issuance of such share at the office of the Corporation or any
transfer agent for the Series B Preferred, into such number of fully
paid and non-assessable shares of Common Stock as is determined by
dividing $25.00 by the Series B Conversion Price, determined as
hereinafter provided, in effect at the time of the conversion. The price
at which shares of Common Stock shall be deliverable upon conversion of
the Series B Preferred Stock (the "Series B Conversion Price") shall
initially be $25.00 per share of Common Stock. The Series B Conversion
Price shall be subject to adjustment as hereinafter provided.
(B) Each share of Series B Preferred shall automatically be
converted into shares of Common Stock at the then effective Series B
Conversion Price upon the sale or other transfer by Premier of one or
more shares of Series B Preferred Stock to any person other than
Premier.
(C) No fractional shares of Common Stock shall be issued
upon conversion of the Series B Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
effective respective Conversion Price. Before any holder of Series B
Preferred Stock shall be entitled to convert the same into full shares
of Common Stock and to receive certificates therefor, he shall surrender
the certificate or certificates therefor, duly endorsed, at the office
of the Corporation or of any transfer agent for the Series B Preferred
Stock and shall give written notice to the Corporation at such office
that he elects to convert the same. The Corporation shall, as soon as
practicable thereafter, issue and deliver at such office to such holder
of Series B Preferred Stock a certificate or certificates for the number
of shares of Common Stock to which he shall be entitled as aforesaid and
a check payable to the holder in the amount of any cash amounts payable
as the result of a conversion into fractional shares of Common Stock.
Such conversion shall be deemed to have been made immediately prior to
the close of business on the date of such surrender of the shares of
Series B Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on such date.
(D) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock
solely for the purpose of effecting the conversion of the shares of the
Series B Preferred Stock such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series B Preferred Stock, and if at any time
the number of authorized but unissued shares of Common Stock shall not
be sufficient to effect the conversion of all then outstanding shares of
the Series B Preferred Stock, in addition to such other remedies as
shall be available to the holder of such Series B Preferred Stock,
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the Corporation will take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient
for such purposes.
SECTION 6. ANTI-DILUTION PROTECTIONS.
(A) In the event the outstanding shares of Common Stock
shall be subdivided (by stock dividend, stock split or otherwise), into
a greater number of shares of Common Stock, the Series B Conversion
Price then in effect shall, concurrently with the effectiveness of such
subdivision, be proportionately decreased. In the event the outstanding
shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common
Stock, the Series B Conversion Price then in effect shall, concurrently
with the effectiveness of such combination or consolidation, be
proportionately increased.
(B) If the Common Stock issuable upon conversion of the
Series B Preferred Stock shall be changed into the same or a different
number of shares of any other class or classes of stock, whether by
capital reorganization, reclassification or otherwise (other than a
subdivision or combination of shares provided for above), then and in
each such event the holder of each share of Series B Preferred Stock
shall have the right thereafter to convert such share into the kind and
amount of shares of stock and other securities and property receivable
upon such reorganization or reclassification or other change by holders
of the number of shares of Common Stock that would have been subject to
receipt by the holders upon conversion of the Series B Preferred Stock
immediately before that change, all subject to further adjustment as
provided herein.
SECTION 7. REDEMPTION.
(A) Subject to the provisions regarding partial redemption
in subsection (B) of this Section 7 below, the Corporation may, at the
option of the Board and at any time after or from time to time after
October 14, 2001, redeem the Series B Preferred Stock in whole or in
part, subject to the legal availability of funds therefor. The
redemption price for each share of Series B Preferred Stock shall be the
Series B Preferred Stock Liquidation Preference.
(B) No redemption shall be made under this Section 7 of only
part of the then outstanding Series B Preferred Stock, unless the
Corporation shall effect such redemption pro rata among all holders of
then outstanding Series B Preferred Stock according to the number of
shares held by each holder on the applicable Redemption Date.
(C) At least twenty (20) but no more than sixty (60) days
prior to the date fixed for any redemption of Series B Preferred Stock
(the "Redemption Date"), written notice shall be mailed by the Company,
postage prepaid, to each holder of record of the Series B Preferred
Stock to be redeemed, at the address last shown on the record of the
Company for such holder or given by the holder to the Company for the
purpose of notice or, if no such address appears or is given, at the
place where the principal executive office
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of the Corporation is located, notifying such holder of the redemption
to be effected, specifying the subsection hereof under which such
redemption is being effected, the Redemption Date, the applicable
redemption price, the number of such holder's shares of Series B
Preferred Stock to be redeemed and the place at which payment may be
obtained, and calling upon such holder to surrender to the Corporation,
in the manner and at the place designated, the certificate or
certificates representing the shares to be redeemed (the "Redemption
Notice").
(D) On or before each designated Redemption Date, each
holder of Series B Preferred Stock to be redeemed shall surrender the
certificate or certificates representing such shares of Series B
Preferred Stock to be redeemed to the Company, in the manner and at the
place designated in the Redemption Notice, if applicable, and thereupon
the redemption price for such shares shall be payable to the order of
the person whose name appears on such certificate or certificates as the
owner thereof, and each such certificate shall be canceled and retired.
If less than all of the shares represented by such certificate are
redeemed, then the Company shall promptly issue a new certificate
representing the unredeemed shares.
(E) If the Redemption Notice shall have been duly given, and
if the redemption price is either paid or made available for payment
through the deposit arrangements specified in subsection (F) of this
Section 7 below, then notwithstanding that the certificate or
certificates evidencing any of the shares of Series B Preferred Stock so
called for redemption shall not have been surrendered, all dividends
with respect to such shares shall cease to accrue after the Redemption
Date, such shares shall not thereafter be transferred on the
Corporation's books and all of the rights of such shares with respect to
such shares shall terminate after the Redemption Date, except only the
right of the holders to receive the redemption price, without interest,
upon surrender of their certificate or certificates therefor.
(F) On or prior to the Redemption Date, the Corporation may,
at its option, deposit with a bank or trust company having a capital and
surplus of at least $100,000,000, as a trust fund, a sum equal to the
aggregate redemption price for all shares of Series B Preferred Stock
called for redemption and not yet redeemed, with irrevocable
instructions and authority to the bank or trust company to pay, on or
after the Redemption Date, the redemption price to the respective
holders upon the surrender of their share certificates. From and after
the Redemption Date, the shares so called for redemption shall be
redeemed. The deposit shall constitute full payment of the redemption
price of the shares, the shares shall be deemed to be no longer
outstanding, all dividends with respect to such shares shall cease to
accrue and the holders thereof shall cease to be shareholders with
respect to such shares and shall have no rights with respect thereto
except the right to receive from the bank or trust company payment of
the redemption price of the shares, without interest, upon surrender of
their certificates therefor. Any funds so deposited and unclaimed at the
end of one (1) year from the Redemption Date shall be released or repaid
to the Company, after which time the holders of shares called
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for redemption who have not yet claimed such funds shall be entitled to
receive payment of the redemption price only from the Company.
SECTION 8. PROTECTIVE PROVISIONS. So long as a majority of the
aggregate issuances of shares of Series B Preferred Stock remain
outstanding, the Corporation shall not, without first obtaining the
approval of the holders of more than fifty percent (50%) of the
then-outstanding shares of Series B Preferred, take any action that:
(A) adversely alters or changes the rights, preferences or
privileges of the Series B Preferred Stock; or
(B) increases the authorized number of shares of the Series
B Preferred Stock."
We further declare under penalty of perjury under the laws of the State
of California that the matters set forth in the foregoing Certificate of
Determination are true and correct of our knowledge.
Executed at Sacramento, California on October 18, 1999.
By: /s/ STEVEN R. VERDOONER
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Name: Steven R. Verdooner
Title: Chief Executive Officer
By: /s/ STEVEN C. LAGORIO
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Name: Steven C. Lagorio
Title: Secretary
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