ARTICLES OF AMENDMENT
OF
MENTOR GRAPHICS CORPORATION
Pursuant to ORS 60.134, Mentor Graphics Corporation has amended its 1987
Restated Articles of Incorporation.
1. The name of the corporation is Mentor Graphics Corporation.
2. The 1987 Restated Articles of Incorporation have been amended to add a
new Section D of Article III which is attached as Exhibit A.
3. The amendment to the 1987 Restated Articles of Incorporation was adopted
on February 10, 1999.
4. The amendment to the 1987 Restated Articles of Incorporation was duly
adopted by the Board of Directors of the corporation and did not require
shareholder approval because the amendment involves the designation of a series
of Incentive Stock of the corporation as authorized by Section B of Article III
of the 1987 Restated Articles of Incorporation.
Dated: February 19, 1999.
MENTOR GRAPHICS CORPORATION
By: DEAN FREED
-------------------------------------
Dean Freed
Vice President, General Counsel
EXHIBIT A
AMENDMENT
of
1987 RESTATED ARTICLES OF INCORPORATION
of
MENTOR GRAPHICS CORPORATION
-----------------------------
The following Section D is added to Article III of the 1987 Restated
Articles of Incorporation of Mentor Graphics Corporation (the "Corporation"):
D. This Article III.D sets forth the designation, preferences, limitations
and relative rights of a series of Incentive Stock of the Corporation as
determined by the Board of Directors of the Corporation (the "Board of
Directors" or the "Board") pursuant to its authority under ORS 60.134 and
Article III.B of these Articles of Incorporation.
1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Incentive Stock" (the "Series A
Incentive Stock") and the number of shares constituting the Series A Incentive
Stock shall be 1,000,000.
2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any class or series of stock of this Corporation ranking prior and
superior to the Series A Incentive Stock with respect to dividends, the holders
of shares of Series A Incentive Stock, in preference to the holders of Common
Stock, no par value (the "Common Stock"), of the Corporation, and of any other
stock ranking junior to the Series A Incentive Stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first day
of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Incentive Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Incentive Stock. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification
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or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Incentive Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Incentive Stock as provided in paragraph (A) of this Section 2
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Incentive Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Incentive Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Incentive Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Incentive Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Incentive
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
3. Voting Rights. Except as otherwise provided by law, the holders of
shares of Series A Incentive Stock shall not be entitled to vote on any matter
submitted to the vote of stockholders.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Incentive Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on
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shares of Series A Incentive Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Incentive Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Incentive Stock, except dividends paid ratably on the Series A Incentive
Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Incentive
Stock, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for shares of
any stock of the Corporation ranking junior (both as to dividends and upon
dissolution, liquidation or winding up) to the Series A Incentive Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Incentive Stock, or any shares of
stock ranking on a parity with the Series A Incentive Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon
such terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
5. Reacquired Shares. Any shares of Series A Incentive Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
restored to the status of authorized but unissued shares after the acquisition
thereof. All such shares shall upon any such restoration become authorized but
unissued shares of Incentive Stock and may be reissued as part of a new series
of Incentive Stock subject to the conditions and restrictions on issuance set
forth herein, in the Restated Articles of Incorporation, or in any amendment
thereto creating a series of Incentive Stock or any similar stock or as
otherwise required by law.
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6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding up of the
Corporation, voluntary or otherwise no distribution shall be made (1) to the
holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Incentive Stock unless,
prior thereto, the holders of shares of Series A Incentive Stock shall have
received an amount per share (the "Series A Liquidation Preference") equal to
$100 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Incentive Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Incentive Stock,
except distributions made ratably on the Series A Incentive Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Incentive
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that are outstanding immediately prior to such
event.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other classes and series of stock of the
Corporation, if any, that rank on a parity with the Series A Incentive Stock in
respect thereof, then the assets available for such distribution shall be
distributed ratably to the holders of the Series A Incentive Stock and the
holders of such parity shares in proportion to their respective liquidation
preferences.
(C) Neither the merger or consolidation of the Corporation into
or with another corporation nor the merger or consolidation of any other
corporation into or with the Corporation shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this Section
6.
7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Incentive Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for
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adjustment hereinafter set forth, equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Incentive Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
8. No Redemption. The shares of Series A Incentive Stock shall not be
redeemable by the Company.
9. Rank. The Series A Incentive Stock shall rank, with respect to the
payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up, junior to all series of any other class of the
Corporation's Incentive Stock, except to the extent that any such other series
specifically provides that it shall rank on a parity with or junior to the
Series A Incentive Stock.
10. Amendment. The Articles of Incorporation of the Corporation shall
not be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Incentive Stock so as to affect
them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Incentive Stock, voting
separately as a single class.
11. Fractional Shares. Series A Incentive Stock may be issued in
fractions of a share that shall entitle the holder, in proportion to such
holder's fractional shares, to receive dividends, participate in distributions
and to have the benefit of all other rights of holders of Series A Incentive
Stock.
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