ARTICLES OF AMENDMENT
Relating to
SERIES A 8% CONVERTIBLE REDEEMABLE PREFERRED STOCK
of
EFFECTIVE MANAGEMENT SYSTEMS, INC.
Pursuant to Sections 180.0602 and
180.1002 of the Wisconsin Business Corporation Law
I, Michael D. Dunham, President of Effective Management Systems, Inc., a
corporation organized and existing under the Wisconsin Business Corporation Law
(the "Corporation"), in accordance with the provisions of Sections 180.0602 and
180.1002 thereof, DO HEREBY CERTIFY:
1. That, pursuant to the authority conferred upon the Board of
Directors by the Restated Articles of Incorporation of the Corporation and
in accordance with Sections 180.0602 and 180.1002 of the Wisconsin Business
Corporation Law, the Board of Directors of the Corporation adopted a
resolution creating a series of shares of preferred stock, $.01 par value,
of the Corporation, designated as Series A 8% Convertible Redeemable
Preferred Stock.
2. That said resolution of the Board of Directors of the Corporation
creating the series designated as Series A 8% Convertible Redeemable
Preferred Stock, provides that said series shall have such designation and
number of shares and such relative rights, preferences and limitations as
are set forth below, which shall constitute Paragraph (5) of Section A of
Article 4 of the Corporation's Restated Articles of Incorporation:
(5) Series A 8% Convertible Redeemable Preferred Stock
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(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, 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.
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(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 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
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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 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 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
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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 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
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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.
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(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 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.
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(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 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
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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 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
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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.
(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,
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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, 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
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$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 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
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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.
* * *
3. That none of the shares of Series A 8% Convertible Redeemable
Preferred Stock have been issued.
4. That the amendment creating the Series A 8% Convertible Redeemable
Preferred Stock was adopted by the Board of Directors of the Corporation in
accordance with Section 180.1002 of the Wisconsin Business Corporation Law,
and shareholder action was not required.
IN WITNESS WHEREOF, I have executed and subscribed these Articles of
Amendment on behalf of the Corporation and do affirm the foregoing as true this
24th day of August, 1998.
By: /s/ Michael D. Dunham
Michael D. Dunham
President and Chief Executive Officer
This instrument was drafted by, and should be returned to, Jay O.
Rothman of the firm of Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202.