RESTATED
ARTICLES OF INCORPORATION
OF
EFFECTIVE MANAGEMENT SYSTEMS, INC.
Pursuant to Section 180.1007 of the Wisconsin Business Corporation Law,
these Restated Articles of Incorporation shall supersede and take the place of
the corporation's heretofore existing Articles of Incorporation and all
amendments thereto.
ARTICLE 1
The name of the corporation is Effective Management Systems, Inc.
ARTICLE 2
The period of existence of the corporation shall be perpetual.
ARTICLE 3
The purpose of the corporation is to engage in any lawful business or
purpose whatever for which corporations may be organized under the Wisconsin
Business Corporation Law.
ARTICLE 4
The aggregate number of shares which the corporation shall have the
authority to issue shall be 23,000,000 shares, consisting of: (i) 20,000,000
shares of a class designated as "Common Stock," with a par value of $.01 per
share; and (ii) 3,000,000 shares of a class designated as "Preferred Stock,"
with a par value of $.01 per share. Upon the effectiveness of these Restated
Articles of Incorporation, each issued and outstanding share of Common Stock,
$.20 par value per share, of the corporation held of record by each shareholder
of the corporation immediately prior to such effectiveness and each share held
in the corporation's treasury shall automatically and without need of any
further action on the part of any shareholder be reclassified into thirty-five
(35) shares of Common Stock, with a par value of $.01 per share.
The designation, relative rights, preferences and limitations of the shares
of each class and the authority of the Board of Directors of the corporation to
establish and to designate series of Preferred Stock and to fix variations in
the relative rights, preferences and limitations as between such series, shall
be as set forth herein.
A. Preferred Stock.
(1) Series and Variations Between Series. The Board of Directors of the
corporation is authorized, to the full extent permitted under the Wisconsin
Business Corporation Law and the provisions of this Section A, to provide for
the issuance of
the Preferred Stock in series, each of such series to be distinctively
designated, and to have such redemption rights, dividend rights, rights on
dissolution or distribution of assets, conversion or exchange rights, voting
powers, designations, preferences and relative participating, optional or other
special rights, if any, and such qualifications, limitations or restrictions
thereof as shall be provided by the Board of Directors of the corporation
consistent with the provisions of this Article 4.
(2) Dividends. Before any dividends shall be paid or set apart for payment
upon shares of Common Stock, the holders of each series of Preferred Stock shall
be entitled to receive dividends at the rate (which may be fixed or variable)
and at such times as specified in the particular series. The holders of shares
of Preferred Stock shall have no rights to participate with the holders of
shares of Common Stock in any distribution of dividends in excess of the
preferential dividends, if any, fixed for such Preferred Stock.
(3) Liquidation Rights. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the corporation, the holders of shares
of each series of Preferred Stock shall be entitled to receive out of the assets
of the corporation in money or money's worth the preferential amount, if any,
specified in the particular series for each share at the time outstanding
together with all accrued but unpaid dividends thereon, before any of such
assets shall be paid or distributed to holders of Common Stock. The holders of
Preferred Stock shall have no rights to participate with the holders of Common
Stock in the assets of the corporation available for distribution to
shareholders in excess of the preferential amount, if any, fixed for such
Preferred Stock.
(4) Voting Rights. The holders of Preferred Stock shall have only such
voting rights as are fixed for shares of each series by the Board of Directors
pursuant to this Section A or are provided, to the extent applicable, by the
Wisconsin Business Corporation Law.
(5) Series A 8% Convertible Redeemable Preferred Stock
(i) Designation and Amount. There is hereby created a series of
Preferred Stock which shall be designated as the "Series A 8% Convertible
Redeemable Preferred Stock" (hereinafter referred to as the "Series A"); the
number of shares constituting such series shall be 7,000. Such number of shares
may be increased or decreased by resolution of the Board of Directors; provided,
however, that no decrease shall reduce the number of shares of Series A to a
number less than the number of shares then outstanding.
(ii) Dividends.
(a) Cumulative Dividends. From and after the date of issuance of
any shares of Series A, the holders of the Series A shall be entitled to receive
in cash, cumulative preferential dividends at the rate of eight (8%) percent per
annum, payable quarterly on January 2, April 1, July 1, and October 1 of each
year to holders of record of Series A as of the fifteenth (15th) day of the
month immediately preceding the month in which a quarterly dividend is due (each
a "Dividend Record Date"). Notwithstanding the foregoing,
-2-
the first dividend payment date with respect to the Series A shall be January 2,
1999, which dividend shall be paid on a pro rata basis for the period such
shares of Series A are outstanding. In the event that the corporation cannot, as
determined by the corporation's Board of Directors in its sole discretion, pay
dividends in cash on any dividend payment date, the corporation shall pay
dividends in shares of Series A valued at eighty (80%) percent of the lesser of:
(i) $1,000 and (ii) the Market Price (as defined below) of the Common Stock (as
defined below) on the relevant Dividend Record Date multiplied by the quotient
of (a) $1,000 and (b) the Conversion Price (as defined below). Commencing with
the quarterly period beginning January 2, 2002, the annual dividend rate will
increase each quarterly period by 2% up to a maximum annual dividend rate of 18%
(e.g., the annual dividend rate for the quarterly period commencing January 2,
2002 will be 10% and the annual dividend rate for the quarterly period
commencing April 1, 2002 will be 12%).
(b) Preference of Dividends. In the event that dividends shall
not have been fully paid, or declared and set apart for payment on all shares of
Series A, the amount of the deficiency (without interest) shall be fully paid
before any dividends shall be declared or paid on any shares of the
corporation's Common Stock, $.01 par value per share (the "Common Stock"), or
any other equity security which is junior to the Series A. If any dividends are
paid on any of the Series A at any time in an aggregate amount less than the
total dividends then accumulated and payable on all shares of Series A entitled
to dividends then outstanding, the amount to be distributed shall be paid on
each share of Series A entitled to dividends in the proportion that the
dividends then accumulated and payable on each such share bears to the total
dividends accumulated and payable on all outstanding shares of Series A entitled
to dividends.
(c) Date of Payment. In any case where the due date for the
payment of dividends on the Series A shall be on a day on which banking
institutions in the United States are authorized or obligated by law to close,
the payment of dividends need not be made on such date, but may be made on the
next succeeding day which is not a day on which banking institutions are
authorized or obligated by law to close, with the same force and effect as if
made on the date of such payment, and dividends shall accrue and be paid for the
period through and including the date of payment.
(iii) Priority. All shares of the Series A shall rank on a parity with
each other and shall be preferred to the Common Stock and, except as expressly
provided below in this Section (iii), any other class of stock of the
corporation, as to the payment of dividends and the distribution of assets upon
the liquidation, dissolution or winding up of the corporation. The corporation
shall have the right to create other classes of Preferred Stock which shall rank
below the Series A without the consent of the holders of the Series A. The
holders of the Series A shall be entitled to vote as a separate class on the
issuance of any class of equity securities which ranks equal to or senior to the
Series A; provided, however, that should the corporation issue and sell prior to
September 30, 1998 at least 1,000 shares of Series A and, at any time thereafter
through September 30, 1998, subject to the right of the corporation and its
placement agent to extend such date by up to an additional thirty (30) days, the
corporation and its placement agent agree in writing to sell equity securities
for an aggregate sale price equal to or less than the difference between $5
million
-3-
and the aggregate purchase price for the number of shares of Series A
sold, with different terms than the Series A (the "Other Securities"), the
corporation shall have the right, without the approval of the holders of the
Series A, to sell the Other Securities and to have such Other Securities rank
equal in priority to the Series A.
(iv) Voluntary Conversion Rights.
(a) Voluntary Conversion. Each holder of Series A shall have the
right, at any time and from time to time, at the holder's option, to convert all
or any portion of such holder's shares of Series A into fully paid and
non-assessable (except as otherwise provided by the Wisconsin Business
Corporation Law) shares of Common Stock at the Conversion Price in effect at the
time of conversion, each share of the Series A being taken at $1,000 per share
for the purposes of such conversion. The initial Conversion Price is $3.50 per
share of Common Stock ("Initial Conversion Price"). The Initial Conversion Price
shall be adjusted as provided for below in Section (vi) (the Initial Conversion
Price and the Initial Conversion Price as thereafter then adjusted shall be
referred to as the "Conversion Price"). Upon each adjustment of the Conversion
Price, the holders of the Series A shall thereafter be entitled to receive upon
conversion, at the Conversion Price, the number of shares of Common Stock
obtained by multiplying $1,000 times the number of shares of Series A being
converted and dividing such product by the Conversion Price.
(b) Method of Conversion. In order to convert shares of the
Series A into Common Stock, the holder thereof shall surrender the certificates
representing the Series A to be converted, duly endorsed in blank, at the
principal office of the corporation or its transfer agent, if any, or at such
other office or offices, located in the United States as the Board of Directors
may designate by written notice to all holders of Series A shares, and give
written notice to the corporation at said office that the holder elects to
convert said shares of Series A. Shares of the Series A shall be deemed to have
been converted as of the date (hereinafter called the "Conversion Date") of
receipt by the corporation of the surrendered shares of Series A for conversion
as provided above, and the person or persons entitled to receive the Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such Common Stock on such date. As soon as
practicable on or after the Conversion Date but in no event more than five (5)
business days thereafter, the corporation will deliver by Federal Express or
other nationally recognized overnight delivery service to the address of the
holder who submitted the Series A for conversion, a certificate or certificates
for the number of full shares of Common Stock issuable upon such conversion,
together with cash in lieu of any fraction of a share, as hereinafter provided,
to the person or persons entitled to receive the same and a check representing
all accrued and unpaid dividends on the Series A so converted through the
Conversion Date.
(v) Forced Conversion. The corporation shall have the right to force
conversion of all, but not less than all, of the Series A into shares of Common
Stock; provided, however, that on the day that notice of forced conversion is
given (the "Forced Conversion Notice Date") and on the Forced Conversion Date
(as defined below) the following conditions are satisfied: (a) the Common Stock
issued and/or issuable upon conversion of the Series A has been registered for
resale pursuant to the Securities Act of
-4-
1933, as amended (the "Act"), and such registration is then currently effective;
and (b) the average of the closing bid price of the Common Stock as listed on
the National Association of Securities Dealers Automated Quotation System, the
New York Stock Exchange, the American Stock Exchange or wherever the Common
Stock then trades (hereinafter, the "Market"), is at least 175% of the
Conversion Price for twenty (20) trading days within any thirty (30) consecutive
trading day period ending no more than ten (10) days prior to the Forced
Conversion Notice Date. Any notice of forced conversion must be given to all
holders no less than thirty (30) days nor more than forty-five (45) days prior
to the date set forth for conversion (the "Forced Conversion Date"). On the
Forced Conversion Date, the corporation shall pay to all registered holders of
the Series A all accrued and unpaid dividends through and including the Forced
Conversion Date. In the event that the Board of Directors of the corporation
approves a transaction whereby the holders of the Common Stock would be paid a
per share price equal to or in excess of 175% of the Conversion Price (the "Sale
Event") and the Forced Conversion Notice Date and on the Forced Conversion Date
the condition set forth in Section (v)(a) above has been satisfied, the
corporation can require all holders of the Series A to convert their shares of
Series A into shares of Common Stock immediately prior to the closing of the
Sale Event. Notwithstanding anything to the contrary, holders of Series A shall
not have the right to vote together with the holders of Common Stock, or as a
separate class, on whether to approve the Sale Event (although a holder of
Series A that voluntarily converts shares of Series A into Common Stock prior to
the record date for the shareholders' meeting to vote on the Sale Event would be
entitled to vote such shares of Common Stock) during the 150-day period
following the Forced Conversion Notice Date because it shall be deemed for all
purposes relating to the approval of the Sale Event, including for purposes of
the Wisconsin Business Corporation Law, that the Series A is no longer
outstanding during such period and that the only rights of the Series A shall be
to receive shares of Common Stock upon consummation of the forced conversion. In
the event that the foregoing sentence is determined not to eliminate the voting
rights of the Series A (either class voting rights or the right to vote with the
Common Stock) with respect to a Sale Event, the holders of the Series A shall be
deemed to have granted the President and the Secretary of the corporation (and
each of them individually) an irrevocable proxy for such 150-day period to vote
the Series A held by each such holder for the approval of the Sale Event. In the
event that the Sale Event would result in the holders of the Series A receiving
securities, it is a condition to the corporation's right to force conversion
resulting from a Sale Event that the securities to be received by the holders of
the Series A are registered under the Act and are freely transferable.
(vi) Adjustments to Conversion Price. The Conversion Price shall be
adjusted as follows:
(a) Amendment to the Restated Articles of Incorporation. In the
case of any amendment to the Restated Articles of Incorporation of the
corporation to change the designation of the Common Stock or the rights,
privileges, restrictions or conditions in respect to the Common Stock or to
provide for a division of the Common Stock, the Series A shall be adjusted so as
to provide that upon conversion thereof the holder shall receive, in lieu of
shares of Common Stock theretofore issuable upon such conversion, the kind and
amount of shares, other securities, money and property receivable upon such
designation, change or division by such holder issuable upon such conversion had
the
-5-
conversion occurred immediately prior to such designation, change or division.
The Series A shall be deemed thereafter to provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments provided for in
this Section (vi). The provisions of this Section (vi)(a) shall apply in the
same manner to successive reclassifications, changes, consolidations and
mergers.
(b) Stock Splits; Stock Dividends. If the corporation shall at
any time subdivide its outstanding shares of Common Stock into a greater number
of shares of Common Stock, or declare a dividend or make any other distribution
upon the Common Stock payable in shares of Common Stock, the Conversion Price in
effect immediately prior to such subdivision or dividend or other distribution
shall be proportionately reduced, and conversely, in case the outstanding shares
of Common Stock shall be combined into a smaller number of shares of Common
Stock, the Conversion Price in effect immediately prior to such combination
shall be proportionately increased.
(c) Issuance of Additional Securities. In case the corporation
shall, through either a private placement or a public offering (but other than
pursuant to options granted under the corporation's directors' and employee
stock option and stock purchase plans or shares or options issued in an
acquisition or shares issuable pursuant to the exercise of warrants outstanding
on August 19, 1998), issues shares of Common Stock, or options to purchase
Common Stock or rights to subscribe for Common Stock or securities convertible
into or exchangeable for Common Stock at a price (such consideration, if other
than cash, as determined by the Board of Directors) less than the then Market
Price (as defined below) on the date of sale, the Conversion Price then in
effect shall automatically be reduced by multiplying the then Conversion Price
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such issuance, sale or distribution plus
the number of shares of Common Stock which the aggregate consideration received
or to be received by the corporation for such issuance, sale or distribution
would purchase at the Market Price per share, and the denominator of which shall
be the number of shares of Common Stock outstanding immediately after giving
effect to such issuance, sale or distribution. The term "Market Price" shall
mean the average closing bid price on the Market for the ten (10) consecutive
trading days immediately prior to the date in question. Notwithstanding the
foregoing, in no event shall the Conversion Price ever be increased as a result
of this Section (vi)(c).
(d) Reorganization or Reclassification. If any capital
reorganization or reclassification of the capital stock of the corporation, or
any consolidation or merger of the corporation with another corporation or other
entity, or the sale of all or substantially all of the corporation's assets to
another corporation or other entity shall be effected in such a way that holders
of shares of Common Stock shall be entitled to receive stock, securities, other
evidence of equity ownership or assets with respect to or in exchange for shares
of Common Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale (except as otherwise provided below in this
Section (vi)(d)), lawful and adequate provisions shall be made whereby the
holders of Series A shall thereafter have the right to receive upon the basis
and upon the terms and conditions specified herein, such shares of stock,
securities, other evidence of equity ownership or assets as may be issued
-6-
or payable with respect to or in exchange for a number of outstanding shares of
such Common Stock equal to the number of shares of Common Stock immediately
theretofore purchasable and receivable upon the conversion of Series A had such
reorganization, reclassification, consolidation, merger or sale not taken place,
and in any such case appropriate provisions shall be made with respect to the
rights and interests of the holders to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Conversion
Price and the number of shares of Common Stock receivable upon the conversion of
Series A) shall thereafter be applicable, as nearly as may be, in relation to
any shares of stock, securities, other evidence of equity ownership or assets
thereafter deliverable upon the exercise hereof (including an immediate
adjustment, by reason of such consolidation or merger, of the Conversion Price
to the value for the Common Stock reflected by the terms of such consolidation
or merger if the value so reflected is less than the Conversion Price in effect
immediately prior to such consolidation or merger; provided, however, that the
Conversion Price shall not be reduced under this Section (vi)(d) by more than
thirty (30%) percent). Subject to the terms of the Series A, in the event of a
merger or consolidation of the corporation with or into another corporation or
other entity as a result of which the number of shares of common stock of the
surviving corporation or other entity issuable to holders of Common Stock is
greater or lesser than the number of shares of Common Stock of the corporation
outstanding immediately prior to such merger or consolidation, then the
Conversion Price in effect immediately prior to such merger or consolidation
shall be adjusted in the same manner as though there were a subdivision or
combination of the outstanding shares of Common Stock. The corporation shall not
effect any such consolidation, merger or sale, unless prior to the consummation
thereof, the successor corporation or other entity (if other than the
corporation) resulting from such consolidation or merger or the corporation or
other entity purchasing such assets shall assume by written instrument executed
and mailed or delivered to the holders, the obligation to deliver to such
holders such shares of stock, securities, other evidence of equity ownership or
assets as, in accordance with the foregoing provisions, such holders may be
entitled to receive or otherwise acquire. If a purchase tender or exchange offer
is made to and accepted by the holders of more than fifty (50%) percent of the
outstanding shares of Common Stock, the corporation shall not effect any
consolidation, merger or sale with the person having made such offer or with any
affiliate of such person, unless prior to the consummation of such
consolidation, merger or sale the holders of Series A shall have been given a
reasonable opportunity to then elect to receive upon the conversion of Series A,
the amount of stock, securities, other evidence of equity ownership or assets
then issuable with respect to the number of shares of Common Stock of the
corporation in accordance with such offer.
(e) Change of Control. In case the corporation shall, at any time
prior to conversion of the shares of Series A, consolidate or merge with any
other corporation or other entity (where the corporation is not the surviving
entity) or transfer all or substantially all of its assets to any other
corporation or other entity, then the corporation shall, as a condition
precedent to such transaction, cause effective provision to be made so that the
holders of the Series A upon the conversion of the Series A after the effective
date of such transaction shall be entitled to receive the kind and amount of
shares, evidences of indebtedness and/or other securities or property receivable
on such transaction by a holder of the number of shares of Common Stock as to
which each share of Series A was convertible
-7-
immediately prior to such transaction (without giving effect to any restriction
upon such conversion); and, in any such case, appropriate provision shall be
made with respect to the rights and interest of the holders of Series A to the
end that the provisions of the Series A shall thereafter be applicable (as
nearly as may be practicable) with respect to any shares, evidences of
indebtedness or other securities or assets thereafter deliverable upon
conversion of the Series A. Upon the occurrence of any event described in this
Section (vi)(e), the holders of the Series A shall have the right to (i) convert
into shares of Common Stock immediately prior to such event at a Conversion
Price equal to the lesser of (1) the then Conversion Price or (2) the price per
share of Common Stock paid in such event; provided, however, that the Conversion
Price shall not be reduced under this Section (vi)(e)(2) by more than thirty
(30%) percent, or (ii) retain ownership of the shares of Series A, in which
event, appropriate provisions shall be made so that the shares of Series A shall
be convertible at the holder's option into shares of stock, securities or other
equity ownership of the surviving or acquiring entity.
(f) Record of Conversion Price. Whenever the shares of Common
Stock or other types of securities or assets receivable upon conversion of the
Series A shall be adjusted as provided in this Section (vi), the corporation
shall forthwith obtain and file with its corporate records a certificate or
letter from a firm of independent public accountants of recognized standing
setting forth the computation and the adjusted number of shares of Common Stock
or other securities or assets resulting from such adjustments, and a copy of
such certificate or letter shall be mailed to the holders of the Series A. Any
such certificate or letter shall be conclusive evidence as to the correctness of
the adjustment or adjustments referred to therein and shall be available for
inspection by any holders of the Series A on any day during normal business
hours.
(g) Notice. In case:
i. the corporation shall declare a dividend (or any other
distribution) on its Common Stock payable in Common
Stock; or
ii. the corporation shall declare a dividend (or any other
distribution) on its Common Stock payable in cash; or
iii. any reclassification of Common Stock or any
consolidation, merger, conveyance of the property of the
corporation as an entirety, or substantially as an
entirety, dissolution, liquidation or winding up shall
be effected by the corporation;
then the corporation shall mail, or cause to be mailed by the corporation's
transfer agent, if any, for the Series A to the holders of record of the
outstanding shares of the Series A, at least thirty (30) days, but not more than
sixty (60) days, prior to the applicable record date hereinafter specified, a
notice stating (A) the date on which a record is to be taken
-8-
for the purpose of such dividend, distribution or rights, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or right are to be determined, or (B)
the date on which such reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange the certificates representing their shares of Common Stock
for securities or other property deliverable upon such reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding up.
(vii) Reservation of Shares of Common Stock.
(a) Reservation of Shares. The corporation shall at all times
reserve and keep available out of its authorized but unissued Common Stock, for
the purpose of effecting the conversion of the shares of the Series A, the full
number of shares of Common Stock then deliverable upon the conversion of all
shares of the Series A then outstanding. If shares of the Common Stock of the
corporation are listed on any securities exchange, the corporation shall make
application for the listing thereon, on notice of issuance, of the shares of
Common Stock deliverable upon the conversion of the outstanding shares of the
Series A and shall use its best efforts to effect such listing.
(b) Fractional Shares. No fractional shares of Common Stock are
to be issued upon conversion. The corporation shall pay a cash adjustment in
respect to any fraction of a share which would otherwise be issuable, in an
amount equal to the fair market value of the Common Stock which shall be the
same fraction of the closing bid price per share at which the Common Stock was
sold on the Market prior to the opening of business on the Conversion Date, or
if no sale of such stock takes place on such day on the Market, the average of
the closing bid and asked prices on such day as officially quoted on the Market.
If the Common Stock is not then publicly traded, fair market value shall be
determined in good faith by the corporation's Board of Directors.
(c) Transfer Taxes. The corporation will pay any and all transfer
taxes that may be payable in respect of the issue or delivery of shares of
Common Stock on conversion of shares of the Series A pursuant hereto. The
corporation shall not, however, be required to pay any tax which may be payable
in respect of transfer involved in the issue and delivery of shares of Common
Stock in a name other than that in which the shares of the Series A so converted
were registered, and no such issue or delivery shall be made unless and until
the person requesting such issue has paid to the corporation the amount of any
such tax, or has established, to the satisfaction of the corporation, that such
tax has been paid.
(d) Common Stock. For the purpose of this Section (vii), the term
"Common Stock" shall include any stock of any class of the corporation which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
corporation, and which is not subject to redemption by the corporation. Shares
of Common Stock shall be only such shares which have no preference in respect of
dividends or of amounts payable in the event of any voluntary
-9-
or involuntary liquidation, dissolution, or winding up of the corporation and
which are not subject to redemption by the corporation.
(e) Status of Common Stock. All Common Stock that may be issued
upon conversion of the Series A will, upon issuance, be duly issued, fully paid
and non-assessable (except as otherwise provided by the Wisconsin Business
Corporation Law) and free from all taxes, liens and charges with respect to the
issuance thereof (except to the extent resulting from the holder's own
circumstances, actions or omissions).
(viii) Voting.
(a) Voting. The holders of the Series A shall be entitled to
vote, on all matters in which holders of Common Stock are entitled to vote,
voting together with the Common Stock and the Other Securities, if any, without
regard to class. The holders of the Series A shall have the number of votes that
they would have had assuming conversion of the Series A into Common Stock as of
the record date for the meeting of the holders of Common Stock with fractional
shares being disregarded. The holders of the Series A shall be entitled to
receive all communications sent by the corporation to the holders of Common
Stock. Except as provided in Section (viii)(c) below or by the Wisconsin
Business Corporation Law, holders of shares of the Series A shall not be
entitled to vote as a separate class.
(b) No Cumulative Voting. The holders of shares of the Series A
shall not have the right of cumulative voting in an election of directors.
(c) Voting as a Separate Class. The corporation shall not,
without the consent (given by vote at a meeting called for that purpose or by
written consent) of the holders of a majority of the shares of the Series A and
the Other Securities, if any, then outstanding, voting together as a separate
class:
i. create, authorize or issue any stock or other
equity security ranking equal to or senior to the
Series A and the Other Securities as to dividends
or distributions, or any obligation or security
convertible into shares of any such senior stock,
except as set forth in Section (ii) above; or
ii. amend, alter, change, or repeal any of the express
terms of the Series A or the Other Securities.
(ix) Redemption.
(a) Redemption. Commencing three (3) years following the last
issuance of the shares of Series A, the corporation may redeem the Series A in
whole at any time at the option of the corporation by resolution of its Board of
Directors, at a redemption price of $1,000 per share, plus accrued and unpaid
dividends, if any, to the date fixed for redemption.
-10-
(b) Notice of Redemption. Notice of redemption of the shares of
the Series A shall be given by certified mail, return receipt requested, postage
prepaid, not less than thirty (30) nor more than forty-five (45) days prior to
the date fixed for redemption, to each holder of the Series A, at each holder's
last address appearing on the books of the corporation; but no failure to
receive such a notice by any holder, so long as mailed in accordance with the
provisions herein, shall affect the validity of the proceedings for the
redemption of any shares of the Series A so to be redeemed. Each notice of
redemption of shares of the Series A shall state:
i. the redemption date,
ii. the redemption price,
iii. the Conversion Price on the date of the
notice,
iv. that on the redemption date the
redemption price will become due and
payable upon each share of the Series A
to be redeemed and the right to convert
each such share shall cease as of the
close of business on the redemption
date, unless default shall be made in
the payment of the redemption price, and
v. the place or places where certificates
for such shares of the Series A to be
redeemed are to be surrendered for
conversion or for payment of the
redemption price.
(c) Conversion Prior to the Redemption. At any time prior to the
redemption date, each holder of the Series A shall be entitled to convert all or
any portion of such holder's Series A into Common Stock based on the Conversion
Price.
(d) Rights Following Redemption. If notice of redemption shall
have been duly given as provided in Section (ix)(b), and if, on the redemption
date, funds necessary for such redemption have been deposited in trust with a
bank or trust company, or have been set aside, in trust, by the corporation, for
the purpose of redeeming shares of the Series A, the shares of the Series A
called for redemption shall, as of the close of business on the redemption date,
no longer be transferable on the books of the corporation and shall no longer be
deemed to be outstanding, the right to receive dividends thereon shall cease to
accrue, and all rights with respect to such shares so called for redemption
shall terminate, except only the right of the holders thereof to receive the
redemption price, without interest thereon, upon surrender of the certificates
for such shares.
(e) Cancellation of Shares. Shares of the Series A redeemed
pursuant to this Section (ix) or otherwise reacquired by the corporation shall
be deemed cancelled and thereafter shall constitute authorized and unissued
shares of Preferred Stock,
-11-
undesignated as to series, subject to reissuance by the corporation as shares of
any series of Preferred Stock.
(x) Liquidation.
(a) Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the corporation
(hereinafter collectively called "liquidation"), before any amount shall be paid
to or set aside for, or any assets shall be distributed among, the holders of
shares of Common Stock or of any other equity security of the corporation other
than the Other Securities, each holder of a share of the Series A shall be
entitled to receive out of the assets of the corporation or the proceeds
thereof, a preferential payment in an amount equal to $1,000 per share, plus the
amount of accrued and unpaid dividends on such share, if any, and no more.
(b) Proportional Rights. In the event the amount available for
distribution as liquidation preference payments to holders of the Series A and
any other stock ranking on a parity therewith (including the Other Securities,
if any) is insufficient to pay the full amount of their respective preferences,
such amount shall be divided among and paid to such holders ratably in
proportion to the respective amounts which would be payable to such holders if
their respective liquidation preferences were to be paid in full.
(c) Insufficient Funds. In the event any liquidation preference
payment to be made on the shares of the Series A shall amount in the aggregate
to less than $1,000 per share plus accrued and unpaid dividends, the corporation
in its discretion may require the surrender of certificates for shares of the
Series A and issue a replacement certificate or certificates, or it may require
the certificates evidencing the shares in respect of which such payments are to
be made to be presented to the corporation, or its agent, for notation thereon
of the amounts of the liquidation preference payments made in respect of such
shares. In the event a certificate for shares of the Series A on which payment
of one or more partial liquidation preferences has been made is presented for
exchange or transfer, such new certificate shall bear an appropriate notation as
to the aggregate amount of liquidation preference payments theretofore made in
respect thereof.
(d) Merger or Sale. Neither the consolidation or merger of the
corporation with or into any other corporation or other entity, nor the sale or
transfer by the corporation of all or any part of its assets, shall be deemed to
be a liquidation of the corporation for the purposes of this Section (x).
(xi) Replacement Certificates.
(a) Mutilated Certificate. If any mutilated certificate of Series
A is surrendered to the corporation, the corporation shall execute and deliver
in exchange therefor a new certificate for Series A of like tenor and principal
amount, bearing a number not contemporaneously outstanding.
(b) Destroyed, Lost or Stolen Certificate. If there is delivered
to the corporation (i) evidence to its reasonable satisfaction of the
destruction, loss or
-12-
theft of any certificate of Series A and (ii) such reasonable security or
indemnity as may be required by it to save it harmless, then, in the absence of
notice to the corporation that such certificate of Series A has been acquired by
a bona fide purchaser, the corporation shall execute and deliver in lieu of any
such destroyed, lost or stolen certificate of Series A, a new certificate of
Series A of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
(c) Status of New Certificate. Upon the issuance of any new
certificate of Series A under this Section (xi), the corporation may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses connected therewith.
Every new certificate of Series A issued pursuant to this Section (xi), in lieu
of any destroyed, lost or stolen certificate of Series A, shall constitute an
original additional contractual obligation of the corporation, whether or not
the destroyed, lost or stolen certificate of Series A shall be at any time
enforceable by anyone. Any new certificate for Series A delivered pursuant to
this Section (xi), shall be so dated that neither gain nor loss in interest
shall result from such exchange. The provisions of this Section (xi) are
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen certificates of Series A.
B. Common Stock.
(1) Dividends. Subject to the provisions of this Article 4, the Board
of Directors of the corporation may, in its sole discretion, out of funds
legally available for the payment of dividends and at such times and in such
manner as determined by the Board of Directors, declare and pay dividends on the
Common Stock.
(2) Liquidation Rights. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the corporation, after there shall
have been paid to or set aside for the holders of Preferred Stock the full
preferential amounts, if any, to which they are entitled, the holders of
outstanding shares of Common Stock shall be entitled to receive pro rata,
according to the number of shares held by each, the remaining assets of the
corporation available for distribution.
(3) Voting Rights. Except as otherwise provided by the Wisconsin
Business Corporation Law, and except as may be determined by the Board of
Directors with respect to Preferred Stock pursuant to Section A of this Article
4, only the holders of Common Stock shall be entitled to vote for the election
of directors of the corporation and for all other corporate purposes. Upon any
such vote the holders of Common Stock shall, except as otherwise provided by
law, be entitled to one vote for each share of Common Stock held by them
respectively.
ARTICLE 5
A. General Powers, Number, Classification and Tenure of Directors. The
general powers, number, classification and tenure of the directors of the
corporation shall be as set forth in Section 3.01 of Article III of the By-laws
of the corporation (and as such
-13-
Section shall exist from time to time). Such Section 3.01 of the By-laws, or any
provision thereof, may only be amended, altered, changed or repealed by the
affirmative vote of shareholders holding at least sixty-six and two-thirds
percent (66-2/3%) of the voting power of the then outstanding shares of all
classes of capital stock of the corporation generally possessing voting rights
in the election of directors, considered for this purpose as a single class;
provided, however, that the Board of Directors, by resolution adopted by the
Requisite Vote (as hereinafter defined), may amend, alter, change or repeal
Section 3.01 of the By-laws, or any provision thereof, without a vote of the
shareholders. As used herein, the term "Requisite Vote" shall mean the
affirmative vote of at least two-thirds of the directors then in office plus one
director.
B. Removal of Directors. Any director may be removed from office with
or without cause, but only by the affirmative vote of holders of at least
sixty-six and two-thirds percent (66-2/3%) of the voting power of the then
outstanding shares of stock of the voting group of shareholders that elected the
director to be removed; provided, however, that if the Board of Directors by
resolution adopted by the Requisite Vote shall have recommended removal of a
director, then the shareholders may remove such director from office with or
without cause by a majority vote of such outstanding shares.
C. Vacancies. Any vacancy occurring in the Board of Directors,
including a vacancy created by the removal of a director or an increase in the
number of directors, shall be filled by the affirmative vote of a majority of
the directors then in office, although less than a quorum of the Board of
Directors; provided, however, that if the vacant office was held by a director
elected by a voting group of shareholders, only the remaining directors elected
by that voting group shall fill the vacancy. For purposes of this Article 5, a
director elected by directors to fill a vacant office pursuant to this Section C
shall be deemed to be a director elected by the same voting group of
shareholders that elected the director(s) who voted to fill the vacancy. Any
director elected pursuant to this Section C shall serve until the next election
of the class for which such director shall have been chosen and until his
successor shall be elected and qualified.
D. Amendments.
(1) Notwithstanding any other provision of these Restated
Articles of Incorporation, the provisions of this Article 5 may be amended,
altered, changed or repealed only by the affirmative vote of shareholders
holding at least sixty-six and two-thirds percent (66-2/3%) of the voting power
of the then outstanding shares of all classes of capital stock of the
corporation generally possessing voting rights in the election of directors,
considered for this purpose as a single class.
(2) Notwithstanding the foregoing and any provisions in the
By-laws of the corporation, whenever the holders of any one or more series of
Preferred Stock issued by the corporation pursuant to Article 4 hereof shall
have the right, voting separately as a class or by series, to elect directors at
an annual or special meeting of shareholders, the election, term of office,
filing of vacancies and other features of such directorships shall be governed
by
-14-
the terms of the series of Preferred Stock applicable thereto, and such
directors so elected shall not be divided into classes unless expressly provided
by the terms of the applicable series.
ARTICLE 6
The address of the registered office of the corporation shall be 12000
West Park Place, Milwaukee, Wisconsin 53224.
ARTICLE 7
The name of the registered agent of the corporation at such address
shall be Michael D. Dunham.
ARTICLE 8
No holder of shares of any class of capital stock of the corporation
shall have a preemptive right to acquire unissued shares or securities
convertible into unissued shares or conveying a right to subscribe for or
acquire shares, unless otherwise determined by the Board of Directors.
ARTICLE 9
These Restated Articles of Incorporation may be amended solely as
authorized herein and by law at the time of amendment.