EXHIBIT 3.2
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
BURKE INDUSTRIES, INC.
Article One: The name of this corporation is:
BURKE INDUSTRIES, INC.
Article Two: The purpose of this corporation is to engage in
any lawful act or activity for which a corporation may be organized under the
General Corporation Law of California other than the banking business, the trust
company business or the practice of a profession permitted to be incorporated by
the California Corporations Code.
Article Three:
3(A) AUTHORIZED CAPITAL STOCK. The corporation is authorized
to issue two classes of capital stock, to be designated Preferred Stock, without
par value, and Common Stock, without par value. The corporation is authorized to
issue 50,000 shares of Preferred Stock and 20,000,000 shares of Common Stock.
3(B) RIGHT, PREFERENCES, PRIVILEGES AND RESTRICTIONS OF
PREFERRED STOCK. The Preferred Stock may be issued in any number of series, as
determined from time to time by the Board of Directors of the Corporation. The
Board of Directors may by resolution fix the designation of, and the rights,
preferences, privileges and restrictions granted to or imposed upon and the
number of shares of any such series of Preferred Stock. The Board of Directors
may thereafter in the same manner increase or decrease the number of shares of
any such series of Preferred Stock (but not below the number of shares of such
series of Preferred Stock then outstanding).
3(C) SERIES A 11.5% CUMULATIVE REDEEMABLE PREFERRED STOCK. The
Board of Directors has designated a series of Preferred Stock and the number of
shares constituting such series and fixes the rights, preferences, privileges
and restrictions relating to such series as follows:
1. DESIGNATION AND AMOUNT. The shares of such series
of Preferred Stock shall be designated as "Series A 11.5% Cumulative
Redeemable Preferred Stock" (the "Series A Preferred Stock"), and the number
of shares constituting such series shall be 30,000. The initial liquidation
preference of the Series A Preferred Stock shall be $1,000 per share (the
"Stated Liquidation Value").
2. RANK. The Series A Preferred Stock shall, with
respect to dividend rights and rights on liquidation, winding up and
dissolution, rank (i) senior to the Corporation's common stock, without par
value (the "Common Stock"), and to all classes and series of stock of the
Corporation now or hereafter authorized, issued or outstanding which by their
terms expressly provide that they are junior to the Series A Preferred Stock
or which do not specify their rank (collectively with the Common Stock, the
"Junior Securities"), (ii) on a parity with the Series B 11.5% Cumulative
Redeemable Preferred Stock, without par value (the "Series B Preferred
Stock") and with each other class of capital stock or series of Preferred
Stock issued by the Corporation after the date hereof the terms of which
specifically provide that such class or series will rank on a parity with the
Series A Preferred Stock as to dividend distributions and distributions upon
the liquidation, winding up and dissolution of the Corporation (collectively
referred to as "Parity Securities") and (iii) junior to each other class of
capital stock or other series of Preferred Stock issued by the Corporation
after the date hereof the terms of which have been approved by the requisite
number of holders of Series A Preferred Stock as provided in Section 3(C)8(b)
hereof and which specifically provide that such class or series will rank
senior to the Series A Preferred Stock as to dividend distributions or
distributions upon the liquidation, winding up and dissolution of the
Corporation (collectively referred to as "Senior Securities").
3. DIVIDENDS.
(a) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors, out of
funds legally available therefor, dividends payable quarterly in arrears on
January 15, April 15, July 15 and October 15 of each year (each such date, a
"Dividend Payment Date"), except that if any Dividend Payment Date is not a
Business Day, then such quarterly dividend shall be payable on the next
succeeding Business Day and such next succeeding Business Day will be the
Dividend Payment Date. Dividends shall be payable to holders of Series A
Preferred Stock at the annual rate of 11.5% times the sum of (i) the Stated
Liquidation Value and (ii) accrued but unpaid dividends as of the immediately
preceding Dividend Payment Date. Dividends shall be payable (A) at the annual
rate of .115 shares of Series A Preferred Stock per share of Series A Preferred
Stock from the Issue Date through the July 15, 2000 Dividend Payment Date and
(B) in cash after the July 15, 2000 Dividend Payment Date, with the first such
cash dividend payable to the holders of Series A Preferred Stock on October 15,
2000. Dividends shall be payable only to holders of record at the close of
business on the date specified by the Board of Directors at the time such
dividend is declared (the "Record Date"), in preference to dividends on the
Junior Securities, commencing on the Dividend Payment Date next succeeding the
Issue Date. Any such Record Date shall be not less than 10 days and not more
than 60 days prior to the relevant Dividend Payment Date. All dividends paid
with respect to shares of Series A Preferred Stock shall be paid PRO RATA to the
holders entitled thereto. Dividends on the Series A Preferred Stock shall accrue
and be cumulative on a quarterly basis (whether or not declared and whether or
not funds are legally available for the payment thereof) from the Issue Date.
(b) Dividends payable on the Series A Preferred Stock for any
period less than a full quarterly dividend period shall be computed on the basis
of a 360-day year of twelve 30-day months.
(c) Fractional shares of Series A Preferred Stock shall be
issued to the extent necessary to make dividend payments in shares of Series A
Preferred Stock. Each fractional share of Series A Preferred Stock outstanding
shall be entitled to a ratably proportionate amount of all dividends accruing
with respect to each outstanding share of Series A Preferred Stock and all of
such dividends with respect to such outstanding fractional shares shall be fully
cumulative and shall accrue (whether or not declared) and shall be payable in
the same manner and at such times as provided for in Section 3(C)3(a) above with
respect to dividends on each outstanding share of Series A Preferred Stock.
(d) Until the earlier of (i) the date upon which no shares of
Series A Preferred Stock are outstanding and (ii) July 16, 2000, the Corporation
shall reserve and keep available out of its authorized or unissued Series A
Preferred Stock solely for the purpose of paying dividends thereon as provided
for herein, such number of shares of Series A Preferred Stock as shall from time
to time be sufficient for such purpose. The Board of Directors of the
Corporation shall, from time to time, if necessary, propose to the shareholders
of the Corporation amendments to the Corporation's Articles of Incorporation to
increase its authorized capital stock and take such other actions as may be
necessary to permit the issuance from time to time of shares of Series A
Preferred Stock upon the declaration of any dividend payable in additional
shares of Series A Preferred Stock.
(e) So long as any shares of the Series A Preferred Stock are
outstanding, the Corporation shall not, without the prior consent of the holders
of at least two-thirds of the shares of outstanding Series A Preferred Stock and
Series B Preferred Stock, voting together as a single series, (i) make any
payment on account of, or set apart for payment money for a sinking or other
similar fund for, the purchase, redemption or retirement of, any Junior
Securities (other than dividends or distributions payable in additional shares
of Junior Securities to holders of Junior Securities); (ii) permit any
corporation or other entity directly or indirectly controlled by the Corporation
to purchase or redeem any Junior Securities; (iii) declare, pay or set apart for
payment, or permit any corporation or other entity directly or indirectly
controlled by the Corporation to declare, pay or set apart for payment, any
dividend or make any distribution or payment on any Junior Securities or Parity
Securities, whether directly or indirectly and whether in cash, obligations or
shares of the Corporation or other property (other than dividends or
distributions payable in additional shares of Junior Securities to holders of
Junior Securities); or (iv) make any payment on account of, or set apart for
payment money for a sinking or other similar fund for, the purchase, redemption
or retirement of, any Parity Securities, whether directly or indirectly, and
whether in cash, obligations, shares of the Corporation or other property (other
than payments solely of Junior Securities), and shall not permit any corporation
or other entity directly or indirectly controlled by the Corporation to purchase
or redeem any Parity Securities, unless prior to or at the time of such payment
or setting apart for payment, the Corporation shall have repurchased, redeemed
or retired shares of Series A Preferred Stock on a PRO RATA basis, in proportion
to the respective Liquidation Preferences (as defined in these Amended and
Restated Articles of Incorporation or in the applicable Certificate of
Determination) of the Series A Preferred Stock and the Parity Securities as to
which such sinking fund or similar fund payment, or such purchase, redemption or
retirement, is being effected.
(f) Whenever dividends on the Series A Preferred Stock are in
arrears, the Corporation shall not declare dividends on or make any other
distribution in respect of any Parity Securities, except dividends paid on a PRO
RATA basis on the Series A Preferred Stock and all other capital stock ranking
on a parity as to dividends and on which dividends are payable in arrears, in
proportion to the respective amounts of dividends in arrears upon all such
outstanding shares of Series A Preferred Stock and such other series of capital
stock.
(g) If at any time after October 15, 2000 any cash dividends
payable on the Series A Preferred Stock shall have been in arrears and unpaid
for four (4) or more successive Dividend Payment Dates, then until the date on
which all such dividends in arrears are paid in full, dividends shall accrue and
be payable to the holders of Series A Preferred Stock at the annual rate of
13.5% times the sum of (i) the Stated Liquidation Value and (ii) accrued but
unpaid dividends thereon. Upon payment in full of all such dividends in arrears,
cash dividends will thereafter be payable as set forth in Section 3(C)3(a)
above.
4. LIQUIDATION PREFERENCE.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holders of
shares of Series A Preferred Stock then outstanding shall be entitled to be paid
out of the assets of the Corporation available for distribution to its
shareholders an amount in cash equal to 100% of the Stated Liquidation Value for
each share outstanding, plus an amount in cash equal to all accrued but unpaid
dividends thereon, without interest, to the date of liquidation, dissolution or
winding up (such amount the "Liquidation Preference"), before any payment shall
be made or any assets distributed to the holders of any of the Junior
Securities. If the assets of the Corporation are not sufficient to pay in full
the Liquidation Preference payable to the holders of outstanding shares of the
Series A Preferred Stock and any Parity Securities, then the holders of all such
shares shall share ratably in such distribution of assets in accordance with the
amount which would be payable on such distribution if the amounts to which the
holders of outstanding shares of Series A Preferred Stock and the holders of
outstanding shares of such Parity Securities are entitled were paid in full.
(b) For the purposes of this Section 3(C)4, neither the
voluntary sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation nor the consolidation or merger of the Corporation
with any one or more other corporations shall be deemed to be a voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, unless
such voluntary sale, conveyance, exchange or transfer shall be in connection
with a plan of liquidation, dissolution or winding up of the Corporation.
5. REDEMPTION.
(a) OPTIONAL REDEMPTION. The Corporation may, at its option,
redeem at any time, out of funds legally available therefor, in the manner
provided in Section 3(C)6 hereof, all or any portion of the shares of the Series
A Preferred Stock, at a redemption price per share equal to 100% of the
Liquidation Preference thereof on the date of redemption; PROVIDED, HOWEVER,
that any such optional redemption by the Corporation shall be on a PRO
RATA basis and for whole shares of Series A Preferred Stock and Series B
Preferred Stock; PROVIDED, FURTHER, HOWEVER, that the Corporation may redeem
fractional shares of Series A Preferred Stock pursuant to this Section
3(C)5(a) in the event that after such redemption a holder of Series A
Preferred Stock would be left with less than one full share of Series A
Preferred Stock.
(b) MANDATORY REDEMPTION. On February 20, 2008, the
Corporation shall redeem any and all outstanding shares of Series A Preferred
Stock, out of funds legally available therefor, at a redemption price per share
equal to 100% of the Liquidation Preference thereof on such date.
(c) REDEMPTION UPON CHANGE OF CONTROL. Upon the occurrence of
a Change of Control, the Series A Preferred Stock shall be redeemable at the
option of the holders thereof, in whole or in part, at a redemption price per
share equal to 100% of the Liquidation Preference on the date of redemption;
PROVIDED, HOWEVER, that the Corporation will not be obligated to redeem, and
will not redeem or call for redemption, any Series A Preferred Stock upon a
Change of Control until it has repurchased or redeemed such of the $110,000,000
original principal amount of 10% Senior Notes Due 2007 of the Corporation (the
"Notes") then outstanding as it is required to repurchase or has called for
redemption in connection with such Change of Control pursuant to the terms of
the Indenture among the Corporation, certain of its subsidiaries and U.S. Trust
Company of New York, N.A. relating to the Notes. Subject to the foregoing
proviso, the Corporation shall redeem, out of funds legally available therefor,
the number of shares specified in the holders' notices of election to redeem
pursuant to Section 3(C)6(b) hereof on the date fixed for redemption.
6. PROCEDURE FOR REDEMPTION.
(a) In the event that the Corporation shall redeem shares of
Series A Preferred Stock pursuant to Sections 3(C)5(a) or 3(C)5(b) hereof,
notice of such redemption shall be mailed by first-class mail, postage prepaid,
and mailed not less than 30 days nor more than 60 days prior to the redemption
date to the holders of record of the shares to be redeemed at their respective
addresses as they shall appear in the records of the Corporation; PROVIDED,
HOWEVER, that failure to give such notice or any defect therein or in the
mailing thereof shall not affect the validity of the proceeding for the
redemption of any shares so to be redeemed except as to the holder to whom the
Corporation has failed to give such notice or except as to the holder to whom
notice was defective. Each such notice shall state: (i) the redemption date;
(ii) the number of shares of Series A Preferred Stock to be redeemed and, if
less than all the shares held by such holders are to be redeemed, the number of
such shares to be redeemed from such holders; (iii) the redemption price and
form of consideration; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date. Any redemption of less than all the shares of Series A Preferred Stock
pursuant to Section 3(C)5(a) shall be made on a PRO RATA basis to all holders of
Series A Preferred Stock.
(b) If a Change of Control should occur, then, subject to
Section 3(C)5(c) above, within 30 days of the occurrence of such Change of
Control, the Corporation shall
give written notice by first-class mail, postage prepaid, to each holder of
Series A Preferred Stock at its address as it appears in the records of the
Corporation, which notice shall set forth (in addition to the information
required by the next succeeding paragraph): (i) each holder's right to
require the Corporation to redeem shares of Series A Preferred Stock held by
such holder as a result of such Change of Control; (ii) the redemption price;
(iii) the redemption date (which date shall be no earlier than 30 days and no
later than 60 days from the date the notice in respect of such Change of
Control is mailed); (iv) the procedures to be followed by such holder in
exercising its right of redemption, including the place or places where
certificates for such shares are to be surrendered for payment of the
redemption price; and (v) that dividends on the shares to be redeemed will
cease to accrue on the redemption date. In the event a holder of shares of
Series A Preferred Stock shall elect to require the Corporation to redeem any
or all of such shares of Series A Preferred Stock, such holder shall deliver,
within 20 days of the mailing to it of the Corporation's notice described in
this Section 3(C)6(b), a written notice stating such holder's election and
specifying the number of shares to be redeemed pursuant to Section 3(C)5(c)
hereof.
(c) Notice by the Corporation having been mailed as provided
in Section 3(C)6(a) hereof, or notice of election having been mailed by the
holders as provided in Section 3(C)6(b) hereof, and provided that on or before
the applicable redemption date funds necessary for such redemption shall have
been set aside by the Corporation, separate and apart from its other funds, in
trust for the PRO RATA benefit of the holders of the shares of Series A
Preferred Stock and Series B Preferred Stock so called for or entitled to
redemption, so as to be and to continue to be available therefor, then, from and
after the redemption date, dividends on the shares of Series A Preferred Stock
so called for or entitled to redemption shall cease to accrue, and said shares
shall no longer be deemed to be outstanding and shall not have the status of
shares of Series A Preferred Stock, and all rights of the holders thereof as
shareholders of the Corporation (except the right to receive the applicable
redemption price and any accrued and unpaid dividends from the Corporation to
the date of redemption) shall cease, unless the Corporation defaults in the
payment of the redemption price, in which case all rights of the holders of
Series A Preferred Stock shall continue until the redemption price is paid. Upon
surrender of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and a notice by the Corporation shall so state), such shares shall be
redeemed by the Corporation at the applicable redemption price as aforesaid. In
case fewer than all the shares represented by any such certificate are redeemed,
a new certificate or certificates shall be issued representing the unredeemed
shares without cost to the holder thereof. Any funds set aside in trust for the
holders of Series A Preferred Stock pursuant to this Section 3(C)6(c) which
remain unclaimed on the second anniversary of the applicable redemption date
shall be released or repaid to the Company, after which the holders of shares
called for redemption shall be entitled to receive payment of the redemption
price only from the Corporation.
7. REACQUIRED SHARES. Shares of Series A Preferred Stock that
have been issued and reacquired in any manner, including shares reacquired by
purchase or redemption, shall (upon compliance with any applicable provisions of
the laws of the State of California) have the status of authorized and unissued
shares of the class of Preferred Stock undesignated as to series and, subject to
the approval of the holders of the Series A Preferred
Stock as provided in Section 3(C)8(b) hereof, may be redesignated and
reissued as part of any series of Preferred Stock other than the Series A
Preferred Stock.
8. VOTING RIGHTS.
In addition to any voting rights provided by law, the holders
of Series A Preferred Stock shall have the following voting rights:
(a) VOTING UPON AMENDMENT TO ARTICLES OF INCORPORATION. The
Articles of Incorporation of the Corporation shall not be amended in any manner
that would adversely alter or change the powers, preferences, special rights or
economics of the Series A Preferred Stock as set forth herein without the
affirmative vote of the holders of at least two-thirds of the outstanding shares
of Series A Preferred Stock and of Series B Preferred Stock, voting together as
a single series.
(b) OTHER VOTING RIGHTS. Without the affirmative vote or
consent of the holders of at least two-thirds of the outstanding shares of
Series A Preferred Shares and Series B Preferred Stock, voting together as a
single series, the Corporation shall not after the Issue Date (i) create,
authorize or issue any Senior Securities or Parity Securities or (ii) create,
authorize or issue any Junior Securities, unless such Junior Securities are
expressly subordinate in right of payment (of liquidation preference and
dividends) to the Series A Preferred Stock, the Series B Preferred Stock and
such Junior Securities have no additional rights (directly or indirectly) upon
the Corporation's failure to redeem such Junior Securities or to pay or declare
a dividend or make a distribution with respect thereto.
(c) CONSENT WITH RESPECT TO CERTAIN AGREEMENTS. Without the
affirmative vote or consent of the holders of at least two-thirds of the
outstanding shares of Series A Preferred Stock, the Corporation shall not after
the Issue Date enter into any agreement which will limit or otherwise adversely
affect the Corporation's ability to comply with its redemption obligations under
Section 3(C)5(b) hereof, including, without limitation, any such agreement or
plan entered into with respect to (i) the sale of all or substantially all of
the assets of the Corporation, (ii) the voluntary liquidation, dissolution or
winding up of the Corporation or (iii) the consolidation or merger of the
Corporation with any one or more other corporations, other than a consolidation
or merger in which the shareholders of the Corporation immediately prior to such
transaction will hold more than 50% of the equity securities of the surviving
entity immediately after the consummation of such transaction.
(d) VOTING SHIFT UPON CERTAIN EVENTS:
(i) CASH DIVIDENDS IN ARREARS. If at any time after
October 15, 2000 any cash dividends payable on the Series A Preferred
Stock shall have been in arrears and unpaid for four (4) or more
successive Dividend Payment Dates, then the holders of the outstanding
shares of Series A Preferred Stock, voting separately as a class and to
the exclusion of the holders of all other classes and series of stock
of the Corporation, shall have the right, in addition to any other
rights to elect directors which the holders of Series A Preferred Stock
may have, to elect the smallest number of directors constituting
one-third of the authorized number of directors, and the
holders of the shares of Common Stock shall have the right
to elect the remaining directors.
(ii) DEFAULT IN MANDATORY REDEMPTION. If the
Corporation shall fail to redeem shares of Series A Preferred Stock in
accordance with the mandatory redemption provisions of Section 3(C)5(b)
hereof, then the holders of the outstanding shares of Series A
Preferred Stock, voting separately as a class and to the exclusion of
the holders of all other classes and series of stock of the
Corporation, shall have the right, in addition to any other rights to
elect directors which the holders of Series A Preferred Stock may have,
to elect the smallest number of directors constituting a majority of
the authorized number of directors, and the holders of the shares of
Common Stock shall have the right to elect the remaining directors.
(iii) TERMINATION OF RIGHT OF SERIES A PREFERRED
STOCK TO ELECT DIRECTORS. The right of the holders of Series A
Preferred Stock to elected directors of the Corporation shall continue
until, (A) in the case of a voting right arising pursuant to Section
3(C)8(d)(i), until the date on which all such dividends in arrears are
paid in full, and (B) in the case of a voting right arising pursuant to
Section 3(C)8(d)(ii), such time as the Liquidation Preference owing to
holders of Series A Preferred Stock shall have been paid in full, at
which time such special voting right of the holders of Series A
Preferred Stock shall terminate, subject to revesting (with respect to
the voting right set forth in Section 3(C)8(d)(i)) in the event of each
and every recurrence of any event triggering such shift in voting
rights.
(iv) MECHANICS FOR ELECTION OF DIRECTORS; NOTICE.
Whenever such voting right set forth in Section 3(C)8(d)(i) or
3(C)8(d)(ii) shall have vested as aforesaid, such right may be
exercised initially either at a special meeting of the holders of
Series A Preferred Stock, at any annual meeting of shareholders held
for the purpose of electing directors or by the written consent of the
holders of Series A Preferred Stock without a meeting, and thereafter
at such annual meeting or by written consent. At any time after such
voting power referred to in this Section 3(C)8(d)(i) or 3(C)8(d)(ii)
shall have been so vested in shares of Series A Preferred Stock and
such right shall not already have been exercised by written consent as
aforesaid, the Secretary of the Corporation may, and upon the written
request of the holders of record of at least 10% of the outstanding
shares of Series A Preferred Stock entitled to vote thereon (addressed
to the Secretary of the Corporation at the principal office of the
Corporation) shall, call a special meeting of the shareholders of the
Corporation for the purpose of electing all of the members of the board
of directors. Such call shall be made by notice to each holder by
first-class mail, postage prepaid at its address as it appears in the
records of the Corporation, and such notice shall be mailed at least 10
days but no more than 20 days before the date of the special meeting,
or as required by law. Such meeting shall be held at the earliest
practicable date upon the notice required for special meetings of
shareholders at the place designated by the Secretary of the
Corporation. If such meeting shall not be called by a proper officer of
the Corporation within 15 days after receipt of such written request by
the Secretary of the Corporation, then the holders of record of at
least 10% of the shares of Series A Preferred Stock then outstanding
and entitled to
vote thereon may call such meeting at the expense of the
Corporation, and such meeting may be called by such holders upon the
notice required for special meetings of shareholders and shall be
held at the place designated in such notice.
(v) QUORUM. At any meeting held for the purpose of
electing directors at which the holders of Series A Preferred Stock
shall have the right to elect directors as provided in this Section
3(C)8(d), the presence in person or by proxy of the holders of a
majority of the then outstanding shares of Series A Preferred Stock
entitled to vote thereon shall be required and be sufficient to
constitute a quorum of such series for the election of directors by
such series. At any such meeting or adjournment thereof, (A) the
absence of a quorum of the holders of Series A Preferred Stock shall
not prevent the election of directors other than the directors to be
elected by the holders of Series A Preferred Stock, and the absence of
a quorum or quorums of the holders of capital stock entitled to elect
such other directors shall not prevent the election of the directors to
be elected by the holders of Series A Preferred Stock, and (B) in the
absence of a quorum of the holders of Series A Preferred Stock, a
majority of the holders of Series A Preferred Stock present in person
or by proxy shall have the power to adjourn the meeting for the
election of directors which such holders are entitled to elect, from
time to time, without notice (except as required by law) other than
announcement at the meeting, until a quorum shall be present.
(vi) TERM; TERMINATION. Upon any termination of the
aforesaid voting rights in accordance with Section 3(C)8(d)(iii)
hereof, provided such right shall not already have been exercised by
written consent, the Secretary of the Corporation may, and upon the
written request of the holders of record of at least 10% of the
outstanding shares of capital stock of the Corporation entitled to vote
thereon (addressed to the Secretary of the Corporation at the principal
office of the Corporation) shall, call a special meeting of the
shareholders of the Corporation for the purpose of electing all of the
members of the board of directors. Such call shall be made by notice to
each holder by first-class mail, postage prepaid at its address as it
appears in the records of the Corporation, and such notice shall be
mailed at least 10 days but no more than 20 days before the date of the
special meeting, or as required by law. Such meeting shall be held at
the earliest practicable date upon the notice required for special
meetings of shareholders at the place designated by the Secretary of
the Corporation. If such meeting shall not be called by a proper
officer of the Corporation within 15 days after receipt of such written
request by the Secretary of the Corporation, then the holders of record
of at least 10% of the shares of capital stock then outstanding and
entitled to vote thereon may call such meeting at the expense of the
Corporation, and such meeting may be called by such holders upon the
notice required for special meetings of shareholders and shall be held
at the place designated in such notice.
(vii) VACANCY. In case of a vacancy occurring in the
office of any director so elected pursuant to Section 3(C)8(d)(i) or
3(C)8(d)(ii) hereof, the holders of a majority of the Series A
Preferred Stock then outstanding and entitled to vote may, at a special
meeting of the holders or by written consent as provided above, elect a
successor to hold office for the unexpired term of such director.
Except as set forth herein, holders of shares of Series A Preferred Stock shall
have no special voting rights and their consent shall not be required (except to
the extent they are otherwise entitled to vote as set forth in these Amended and
Restated Articles of Incorporation or by law) for taking any corporate action.
To extent permissible under applicable law, each vote of the holders of Series A
Preferred Stock shall be a vote of the holders of Series A Preferred Stock and
Series B Preferred Stock, voting together as a single series, if and to the
extent that the holders of Series B Preferred Stock are permitted to so vote.
9. REMEDIES. Any holder of Series A Preferred Stock may
proceed to protect and enforce its rights and the rights of other holders by any
available remedy by proceeding at law or in equity to protect and enforce any
such rights, whether for the specific enforcement of any provision in these
Amended and Restated Articles of Incorporation or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
10. DEFINITIONS. For the purposes of this Section 3(C) of
these Amended and Restated Articles of Incorporation, the following terms shall
have the meanings indicated:
"Affiliate" shall mean, with respect to any specified person,
(a) any other person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified person or (b) any
other person that owns, directly or indirectly, 10% or more of such specified
person's capital stock or any executive officer or director of any such
specified person or other person or, with respect to any natural person, any
person having a relationship with such person by blood, marriage or adoption not
more remote than first cousin. For the purposes of this definition, "control,"
when used with respect to any specified person, means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Beneficial Owner" shall have the meaning ascribed to such
term or the term "beneficial ownership" in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that a person shall be deemed have "beneficial ownership"
of all securities that such person has the right to acquire, whether such right
is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Change of Control" shall mean such time after the Issue Date
as either:
(i) prior to the initial public offering by the
Corporation of any class of its common stock, the consummation
of any transaction the result of which is that the Principals
and their Related Parties become the Beneficial Owners, in the
aggregate, of less than 50% of the Common Stock of the
Corporation;
(ii) after the initial public offering by the
Corporation of any class of its common stock, any "person" (as
such term is used in Section 13(d)(3) of the Exchange Act),
other than the Principals and their Related Parties, becomes,
directly or indirectly, the Beneficial Owner, by way of
merger, consolidation or otherwise, of 35% or more of the
Common Stock of the Corporation and such person is or becomes,
directly or indirectly, the Beneficial Owner of a greater
percentage of the voting power of the Common Stock of the
Corporation, calculated on a fully diluted basis, than the
percentage Beneficially Owned by the Principals and their
Related Parties; or
(iii) the Corporation effects the sale, lease or
transfer of all or substantially all of the assets of the
Corporation to any person or group.
"Issue Date" shall mean the first date on which shares of
Series A Preferred Stock are issued.
"Junior Securities" shall have the meaning set forth in
Section 3(C)2 hereof.
"Liquidation Preference" shall have the meaning set forth in
Section 3(C)4 hereof.
"Parity Securities" shall have the meaning set forth in
Section 3(C)2 hereof.
"Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
"Principals" shall mean (i) J.F. Lehman & Company ("Lehman"),
(ii) each Affiliate of Lehman as of the Issue Date, (iii) J.F. Lehman Equity
Investors I, L.P. and (iv) each officer or employee (including their respective
immediate family members) of Lehman as of the Issue Date.
"Related Party" shall mean with respect to any Principal (A)
any controlling shareholder or 80% (or more) owned subsidiary of such Principal
or (B) any trust, corporation, partnership or other entity, the beneficiaries,
shareholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of such Principal and/or such other
Persons referred to in the immediately preceding clause (A).
3(D) SERIES B 11.5% CUMULATIVE REDEEMABLE PREFERRED STOCK. The
Board of Directors has designated a series of Preferred Stock and the number of
shares constituting such series and fixes the rights, preferences, privileges
and restrictions relating to such series as follows:
1. DESIGNATION AND AMOUNT. The shares of such series
of Preferred Stock shall be designated as "Series B 11.5% Cumulative
Redeemable Preferred Stock" (the "Series B Preferred Stock"), and the number
of shares constituting such series shall be 5,000. The initial liquidation
preference of the Series B Preferred Stock shall be $1,000 per share (the
"Stated Liquidation Value").
2. RANK. The Series B Preferred Stock shall, with
respect to dividend rights and rights on liquidation, winding up and
dissolution, rank (i) senior to the Corporation's common stock, without par
value (the "Common Stock"), and to all classes and series of stock of the
Corporation now or hereafter authorized, issued or outstanding which by their
terms expressly provide that they are junior to the Series B Preferred Stock
or which do not specify their rank (collectively with the Common Stock, the
"Junior Securities"), (ii) on a parity with the Series A Preferred Stock and
with each other class of capital stock or series of Preferred Stock issued by
the Corporation after the date hereof the terms of which specifically provide
that such class or series will rank on a parity with the Series B Preferred
Stock as to dividend distributions and distributions upon the liquidation,
winding up and dissolution of the Corporation (collectively referred to as
"Parity Securities") and (iii) junior to each other class of capital stock or
other series of Preferred Stock issued by the Corporation after the date
hereof the terms of which have been approved by the requisite number of
holders of Series B Preferred Stock as provided in Section 3(D)8(b) hereof
and which specifically provide that such class or series will rank senior to
the Series B Preferred Stock as to dividend distributions or distributions
upon the liquidation, winding up and dissolution of the Corporation
(collectively referred to as "Senior Securities").
3. DIVIDENDS.
(a) The holders of shares of Series B Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors, out of
funds legally available therefor, dividends payable quarterly in arrears on
January 15, April 15, July 15 and October 15 of each year (each such date, a
"Dividend Payment Date"), except that if any Dividend Payment Date is not a
Business Day, then such quarterly dividend shall be payable on the next
succeeding Business Day and such next succeeding Business Day will be the
Dividend Payment Date. Dividends shall be payable to holders of Series B
Preferred Stock at the annual rate of 11.5% times the sum of (i) the Stated
Liquidation Value and (ii) accrued but unpaid dividends as of the immediately
preceding Dividend Payment Date. Dividends shall be payable (A) at the annual
rate of .115 shares of Series B Preferred Stock per share of Series B Preferred
Stock from the Issue Date through the July 15, 2000 Dividend Payment Date and
(B) in cash after the July 15, 2000 Dividend Payment Date, with the first such
cash dividend payable to the holders of Series B Preferred Stock on October 15,
2000. Dividends shall be payable only to holders of record at the close of
business on the date specified by the Board of Directors at the time such
dividend is declared (the "Record Date"), in preference to dividends on the
Junior Securities, commencing on the Dividend Payment Date next succeeding the
Issue Date. Any such Record Date shall be not less than 10 days and not more
than 60 days prior to the relevant Dividend Payment Date. All dividends paid
with respect to shares of Series B Preferred Stock shall be paid PRO RATA to the
holders entitled thereto. Dividends on the Series B Preferred Stock shall accrue
and be cumulative on a quarterly basis (whether or not declared and whether or
not funds are legally available for the payment thereof) from the Issue Date.
(b) Dividends payable on the Series B Preferred Stock for any
period less than a full quarterly dividend period shall be computed on the basis
of a 360-day year of twelve 30-day months.
(c) Fractional shares of Series B Preferred Stock shall be
issued to the extent necessary to make dividend payments in shares of Series B
Preferred Stock. Each fractional share of Series B Preferred Stock outstanding
shall be entitled to a ratably proportionate amount of all dividends accruing
with respect to each outstanding share of Series B Preferred Stock and all of
such dividends with respect to such outstanding fractional shares shall be fully
cumulative and shall accrue (whether or not declared) and shall be payable in
the same manner and at such times as provided for in Section 3(D)3(a) above with
respect to dividends on each outstanding share of Series B Preferred Stock.
(d) Until the earlier of (i) the date upon which no shares of
Series B Preferred Stock are outstanding and (ii) July 16, 2000, the Corporation
shall reserve and keep available out of its authorized or unissued Series B
Preferred Stock solely for the purpose of paying dividends thereon as provided
for herein, such number of shares of Series B Preferred Stock as shall from time
to time be sufficient for such purpose. The Board of Directors of the
Corporation shall, from time to time, if necessary, propose to the shareholders
of the Corporation amendments to the Corporation's Articles of Incorporation to
increase its authorized capital stock and take such other actions as may be
necessary to permit the issuance from time to time of shares of Series B
Preferred Stock upon the declaration of any dividend payable in additional
shares of Series B Preferred Stock.
(e) So long as any shares of the Series B Preferred Stock are
outstanding, the Corporation shall not, without the prior consent of the holders
of at least two-thirds of the shares of outstanding Series A Preferred Stock and
the Series B Preferred Stock, voting together as a single series, (i) make any
payment on account of, or set apart for payment money for a sinking or other
similar fund for, the purchase, redemption or retirement of, any Junior
Securities (other than dividends or distributions payable in additional shares
of Junior Securities to holders of Junior Securities); (ii) permit any
corporation or other entity directly or indirectly controlled by the Corporation
to purchase or redeem any Junior Securities; (iii) declare, pay or set apart for
payment, or permit any corporation or other entity directly or indirectly
controlled by the Corporation to declare, pay or set apart for payment, any
dividend or make any distribution or payment on any Junior Securities or Parity
Securities, whether directly or indirectly and whether in cash, obligations or
shares of the Corporation or other property (other than dividends or
distributions payable in additional shares of Junior Securities to holders of
Junior Securities); or (iv) make any payment on account of, or set apart for
payment money for a sinking or other similar fund for, the purchase, redemption
or retirement of, any Parity Securities, whether directly or indirectly, and
whether in cash, obligations, shares of the Corporation or other property (other
than payments solely of Junior Securities), and shall not permit any corporation
or other entity directly or indirectly controlled by the Corporation to purchase
or redeem any Parity Securities, unless prior to or at the time of such payment
or setting apart for payment, the Corporation shall have repurchased, redeemed
or retired shares of Series B Preferred Stock on a PRO RATA basis, in proportion
to the respective Liquidation Preferences (as defined in these Amended and
Restated Articles of Incorporation or in the applicable Certificate of
Determination) of the Series B Preferred Stock and the Parity Securities as to
which such sinking fund or similar fund payment, or such purchase, redemption or
retirement, is being effected.
(f) Whenever dividends on the Series B Preferred Stock are in
arrears, the Corporation shall not declare dividends on or make any other
distribution in respect of any Parity Securities, except dividends paid on a PRO
RATA basis on the Series B Preferred Stock and all other capital stock ranking
on a parity as to dividends and on which dividends are payable in arrears, in
proportion to the respective amounts of dividends in arrears upon all such
outstanding shares of Series B Preferred Stock and such other series of capital
stock.
(g) If at any time after October 15, 2000 any cash dividends
payable on the Series B Preferred Stock shall have been in arrears and unpaid
for four (4) or more successive Dividend Payment Dates, then until the date on
which all such dividends in arrears are paid in full, dividends shall accrue and
be payable to the holders of Series B Preferred Stock at the annual rate of
13.5% times the sum of (i) the Stated Liquidation Value and (ii) accrued but
unpaid dividends thereon. Upon payment in full of all such dividends in arrears,
cash dividends will thereafter be payable as set forth in Section 3(D)3(a)
above.
4. LIQUIDATION PREFERENCE.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holders of
shares of Series B Preferred Stock then outstanding shall be entitled to be paid
out of the assets of the Corporation available for distribution to its
shareholders an amount in cash equal to 100% of the Stated Liquidation Value for
each share outstanding, plus an amount in cash equal to all accrued but unpaid
dividends thereon, without interest, to the date of liquidation, dissolution or
winding up (such amount the "Liquidation Preference"), before any payment shall
be made or any assets distributed to the holders of any of the Junior
Securities. If the assets of the Corporation are not sufficient to pay in full
the Liquidation Preference payable to the holders of outstanding shares of the
Series B Preferred Stock and any Parity Securities, then the holders of all such
shares shall share ratably in such distribution of assets in accordance with the
amount which would be payable on such distribution if the amounts to which the
holders of outstanding shares of Series B Preferred Stock and the holders of
outstanding shares of such Parity Securities are entitled were paid in full.
(b) For the purposes of this Section 3(D)4, neither the
voluntary sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation nor the consolidation or merger of the Corporation
with any one or more other corporations shall be deemed to be a voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, unless
such voluntary sale, conveyance, exchange or transfer shall be in connection
with a plan of liquidation, dissolution or winding up of the Corporation.
5. REDEMPTION.
(a) OPTIONAL REDEMPTION. The Corporation may, at its option,
redeem at any time, out of funds legally available therefor, in the manner
provided in Section 3(D)6 hereof, all or any portion of the shares of the Series
B Preferred Stock, at a redemption price per share equal to 100% of the
Liquidation Preference thereof on the date of redemption; PROVIDED, HOWEVER,
that any such optional redemption by the Corporation shall be on a PRO
RATA basis and for whole shares of Series A Preferred Stock and Series B
Preferred Stock; PROVIDED, FURTHER, HOWEVER, that the Corporation may redeem
fractional shares of Series B Preferred Stock pursuant to this Section
3(D)5(a) in the event that after such redemption a holder of Series B
Preferred Stock would be left with less than one full share of Series B
Preferred Stock.
(b) MANDATORY REDEMPTION. On February 20, 2008, the
Corporation shall redeem any and all outstanding shares of Series B Preferred
Stock, out of funds legally available therefor, at a redemption price per share
equal to 100% of the Liquidation Preference thereof on such date.
(c) REDEMPTION UPON CHANGE OF CONTROL. Upon the occurrence of
a Change of Control, the Series B Preferred Stock shall be redeemable at the
option of the holders thereof, in whole or in part, at a redemption price per
share equal to 100% of the Liquidation Preference on the date of redemption;
PROVIDED, HOWEVER, that the Corporation will not be obligated to redeem, and
will not redeem or call for redemption, any Series B Preferred Stock upon a
Change of Control until it has repurchased or redeemed such of the $110,000,000
original principal amount of 10% Senior Notes Due 2007 of the Corporation (the
"Notes") then outstanding as it is required to repurchase or has called for
redemption in connection with such Change of Control pursuant to the terms of
the Indenture among the Corporation, certain of its subsidiaries and U.S. Trust
Company of New York, N.A. relating to the Notes. Subject to the foregoing
proviso, the Corporation shall redeem, out of funds legally available therefor,
the number of shares specified in the holders' notices of election to redeem
pursuant to Section 3(D)6(b) hereof on the date fixed for redemption.
6. PROCEDURE FOR REDEMPTION.
(a) In the event that the Corporation shall redeem shares of
Series B Preferred Stock pursuant to Sections 3(D)5(a) or 3(D)5(b) hereof,
notice of such redemption shall be mailed by first-class mail, postage prepaid,
and mailed not less than 30 days nor more than 60 days prior to the redemption
date to the holders of record of the shares to be redeemed at their respective
addresses as they shall appear in the records of the Corporation; PROVIDED,
HOWEVER, that failure to give such notice or any defect therein or in the
mailing thereof shall not affect the validity of the proceeding for the
redemption of any shares so to be redeemed except as to the holder to whom the
Corporation has failed to give such notice or except as to the holder to whom
notice was defective. Each such notice shall state: (i) the redemption date;
(ii) the number of shares of Series B Preferred Stock to be redeemed and, if
less than all the shares held by such holders are to be redeemed, the number of
such shares to be redeemed from such holders; (iii) the redemption price and
form of consideration; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date. Any redemption of less than all the shares of Series B Preferred Stock
pursuant to Section 3(D)5(a) shall be made on a PRO RATA basis to all holders of
Series B Preferred Stock.
(b) If a Change of Control should occur, then, subject to
Section 3(D)5(c) above, within 30 days of the occurrence of such Change of
Control, the Corporation shall
give written notice by first-class mail, postage prepaid, to each holder of
Series B Preferred Stock at its address as it appears in the records of the
Corporation, which notice shall set forth (in addition to the information
required by the next succeeding paragraph): (i) each holder's right to
require the Corporation to redeem shares of Series B Preferred Stock held by
such holder as a result of such Change of Control; (ii) the redemption price;
(iii) the redemption date (which date shall be no earlier than 30 days and no
later than 60 days from the date the notice in respect of such Change of
Control is mailed); (iv) the procedures to be followed by such holder in
exercising its right of redemption, including the place or places where
certificates for such shares are to be surrendered for payment of the
redemption price; and (v) that dividends on the shares to be redeemed will
cease to accrue on the redemption date. In the event a holder of shares of
Series B Preferred Stock shall elect to require the Corporation to redeem any
or all of such shares of Series B Preferred Stock, such holder shall deliver,
within 20 days of the mailing to it of the Corporation's notice described in
this Section 3(D)6(b), a written notice stating such holder's election and
specifying the number of shares to be redeemed pursuant to Section 3(D)5(c)
hereof.
(c) Notice by the Corporation having been mailed as provided
in Section 3(D)6(a) hereof, or notice of election having been mailed by the
holders as provided in Section 3(D)6(b) hereof, and provided that on or before
the applicable redemption date funds necessary for such redemption shall have
been set aside by the Corporation, separate and apart from its other funds, in
trust for the PRO RATA benefit of the holders of the shares of Series B
Preferred Stock and Series B Preferred Stock so called for or entitled to
redemption, so as to be and to continue to be available therefor, then, from and
after the redemption date, dividends on the shares of Series B Preferred Stock
so called for or entitled to redemption shall cease to accrue, and said shares
shall no longer be deemed to be outstanding and shall not have the status of
shares of Series B Preferred Stock, and all rights of the holders thereof as
shareholders of the Corporation (except the right to receive the applicable
redemption price and any accrued and unpaid dividends from the Corporation to
the date of redemption) shall cease, unless the Corporation defaults in the
payment of the redemption price, in which case all rights of the holders of
Series B Preferred Stock shall continue until the redemption price is paid. Upon
surrender of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and a notice by the Corporation shall so state), such shares shall be
redeemed by the Corporation at the applicable redemption price as aforesaid. In
case fewer than all the shares represented by any such certificate are redeemed,
a new certificate or certificates shall be issued representing the unredeemed
shares without cost to the holder thereof. Any funds set aside in trust for the
holders of Series B Preferred Stock pursuant to this Section 3(D)6(c) which
remain unclaimed on the second anniversary of the applicable redemption date
shall be released or repaid to the Corporation, after which the holders of
shares called for redemption shall be entitled to receive payment of the
redemption price only from the Corporation.
7. REACQUIRED SHARES. Shares of Series B Preferred
Stock that have been issued and reacquired in any manner, including shares
reacquired by purchase or redemption, shall (upon compliance with any
applicable provisions of the laws of the State of California) have the status
of authorized and unissued shares of the class of Preferred Stock
undesignated as to series and, subject to the approval of the holders of the
Series B Preferred
Stock as provided in Section 3(D)8(b) hereof, may be redesignated and
reissued as part of any series of Preferred Stock other than the Series B
Preferred Stock.
8. VOTING RIGHTS.
In addition to any voting rights provided by law, the holders
of Series B Preferred Stock shall have the following voting rights:
(a) VOTING UPON AMENDMENT TO ARTICLES OF INCORPORATION. The
Articles of Incorporation of the Corporation shall not be amended in any manner
that would adversely alter or change the powers, preferences, special rights or
economics of the Series B Preferred Stock as set forth herein without the
affirmative vote of the holders of at least two-thirds of the outstanding shares
of Series A Preferred Stock and of Series B Preferred Stock, voting together as
a single series.
(b) OTHER VOTING RIGHTS. Without the affirmative vote or
consent of the holders of at least two-thirds of the outstanding shares of
Series A Preferred Shares and Series B Preferred Stock, voting together as a
single series, the Corporation shall not after the Issue Date (i) create,
authorize or issue any Senior Securities or Parity Securities or (ii) create,
authorize or issue any Junior Securities, unless such Junior Securities are
expressly subordinate in right of payment (of liquidation preference and
dividends) to the Series A Preferred Stock, the Series B Preferred Stock and
such Junior Securities have no additional rights (directly or indirectly) upon
the Corporation's failure to redeem such Junior Securities or to pay or declare
a dividend or make a distribution with respect thereto.
Except as set forth herein, holders of shares of Series B Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are otherwise entitled to vote as set forth in
these Amended and Restated Articles of Incorporation or by law) for taking
any corporate action. To the extent permissible under applicable law, each
vote of the holders of Series B Preferred Stock shall be a vote of the
holders of Series A Preferred Stock and Series B Preferred Stock, voting
together as a single series.
9. REMEDIES. Any holder of Series B Preferred Stock
may proceed to protect and enforce its rights and the rights of other holders
by any available remedy by proceeding at law or in equity to protect and
enforce any such rights, whether for the specific enforcement of any
provision in these Amended and Restated Articles of Incorporation or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
10. DEFINITIONS. For the purposes of this Section 3(D)
of these Amended and Restated Articles of Incorporation, the following terms
shall have the meanings indicated:
"Affiliate" shall have the meaning ascribed to such term in
Section 3(C)10.
"Beneficial Owner" shall have the meaning ascribed to such
term or the term "beneficial ownership" in Section 3(C)10.
"Business Day" shall have the meaning ascribed to such term in
Section 3(C)10.
"Change of Control" shall have the meaning ascribed to such
term in Section 3(C)10.
"Issue Date" shall mean the first date on which shares of
Series B Preferred Stock are issued.
"Junior Securities" shall have the meaning set forth in
Section 3(D)2 hereof.
"Liquidation Preference" shall have the meaning set forth in
Section 3(D)4 hereof.
"Parity Securities" shall have the meaning set forth in
Section 3(C)2 hereof.
"Person" shall have the meaning ascribed to such term in
Section 3(C)10.
"Principals" shall have the meaning ascribed to such term in
Section 3(C)10.
"Related Party" shall have the meaning ascribed to such term
in Section 3(C)10.
Article Four: The liability of the directors of the
corporation for monetary damages shall be eliminated to the fullest extent
permissible under California law.
Article Five: The corporation is authorized to provide
indemnification of its agents (as such term is defined in Section 317 of the
California General Corporation Law) to the fullest extent permissible under
California law.