ADVANCED AERODYNAMICS & STRUCTURES, INC.
CORPORATE RECORDS
DELAWARE
1996
CERTIFICATE OF INCORPORATION
OF
ADVANCED AERODYNAMICS & STRUCTURES, INC.
* * * * *
1. The name of the corporation is:
ADVANCED AERODYNAMICS & STRUCTURES, INC.
2. The address of its registered office in the State of Delaware is 9
East Loockerman St., Ste. 214, Dover, Delaware 19901. The name of its
registered agent at such address is National Corporate Research, Ltd.
3. The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation shall have
authority to issue is 68,000,000 consisting of 45,000,000 shares of Class A
Common Stock, par value $0.0001 per share (the "Class A Common Stock"),
10,000,000 shares of Class B Common Stock, par value $0.0001 per share (the
"Class B Common Stock"), 4,000,000 shares of Class E-1 Common Stock, par value
$0.0001 per share (the "Class E-1 Common Stock"), 4,000,000 shares of Class E-2
Common Stock, par value $0.0001 per share (the "Class E-2 Common Stock," and,
with the Class
E-1 Common Stock, the "Class E Common Stock"), and 5,000,000 shares of Preferred
Stock, par value $0.0001 per share (the "Preferred Stock").
The Board of Directors is hereby empowered to authorize by resolution or
resolutions from time to time the issuance of one or more classes or series of
Preferred Stock and to fix the voting powers, designations, powers, preferences
and/or restrictions thereof, if any, with respect to each such class or series
of Preferred Stock and the number of shares constituting each such class or
series, and to increase or decrease the number of shares of any such class or
series to the extent permitted by Delaware law.
The rights, preferences, privileges and restrictions granted to or imposed
upon the respective classes of Class A Common Stock, Class B Common Stock, Class
E-1 Common Stock and Class E-2 Common Stock, shall be equal and identical in all
respects, except as follows:
(A) Class A Common Stock
The holders of Class A Common Stock shall be entitled to one vote
for each share of Class A Common Stock held of record by said
holders; and the holders of Class B Common Stock and Class E
Common Stock shall be entitled to five votes for each share of
Class B Common Stock or Class E Common Stock held of record by
said holders, on all matters with respect to which holders of
such classes of stock are entitled to vote.
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(B) Class B Common Stock
(1) Subject to the limitations of subparagraph (6) below, all
outstanding shares of Class B Common Stock, at the election of
the holder thereof, shall be convertible into an equal number of
fully paid and nonassessable shares of Class A Common Stock by
delivery of written notice by the holder of such shares of Class
B Common Stock to this corporation, or its transfer agent, of his
or her election together with the certificate(s) representing the
shares to be converted (and shall reflect any previously declared
stock splits, dividends or recapitalizations of Class A Common
Stock). Thereupon, the corporation, or its transfer agent, as
the case may be, shall exchange such certificate(s) for a
certificate or certificates representing an equal number of
shares of Class A Common Stock. Shares of Class B Common Stock
shall be deemed to have been converted immediately prior to the
close of business on the day upon which the corporation, or its
transfer agent, receives the certificate for such shares for
conversion. The person entitled to receive the Class A Common
Stock issuable upon such conversion shall be treated for all
purposes as the record holder of such Class A Common Stock at
such time.
(2) Except as provided in subparagraph (3) below, upon the sale,
assignment, transfer, conveyance, or other disposition, whether
voluntary, by
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operation of law or otherwise (a "Transfer"), of shares of Class
B Common Stock, other than a transfer to another holder of Class
B Common Stock, the shares so transferred shall, by virtue of
such Transfer, automatically be converted into an equal number of
fully paid and nonassessable shares of Class A Common Stock.
(3) Upon the death of any holder of Class B Common Stock, the
shares of Class B Common Stock so held as of the date of death of
the deceased stockholder shall be automatically converted into an
equal number of fully paid and nonassessable shares of Class A
Common Stock unless and to the extent that any of such shares are
purchased by another holder of Class B Common Stock on or prior
to 90 days from a date that a legal representative is duly
appointed by a court of competent jurisdiction, or 120 days from
such date if within such 90-day period another holder of Class B
Common Stock has exercised any right to purchase shares of Class
B Common Stock held by such legal representative. If there
should be only one holder of Class B Common Stock, effective
immediately upon his death, the shares of Class B Common Stock so
held as of the date of death shall be automatically converted
into an equal number of fully paid and nonassessable shares of
Class A Common Stock.
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(4) With respect to any shares of Class B Common Stock converted
into Class A Common Stock pursuant to subparagraphs (2) and (3)
above, until surrender as hereinafter provided, each outstanding
certificate, which prior to such conversion represented shares of
Class B Common Stock, shall be deemed for all purposes to
evidence ownership of the number of shares of Class A Common
Stock into which the shares of Class B Common Stock shall have
been converted. Upon surrender to this corporation, or its
transfer agent, for cancellation of the certificate or
certificates representing such shares, the holder thereof shall
be entitled to receive a certificate or certificates representing
the number of shares of Class A Common Stock to which such holder
is entitled.
(5) With respect to any shares of Class B Common Stock converted
into Class A Common Stock pursuant to subparagraphs (1), (2) or
(3) above, such converted shares of Class B Common Stock shall,
after the date of conversion, have the status of authorized but
unissued shares of Class B Common Stock, but may not be reissued.
(6) Holders of Class B Common Stock shall be prohibited, without
prior written consent of this corporation, from selling,
assigning, transferring, conveying, converting pursuant to
subparagraph (1) above, or otherwise disposing of their shares of
Class B Common Stock for thirteen (13) months
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following the effective date (the "Effective Date") of a
registration statement (the "Registration Statement") covering
shares of Class A Common Stock, filed with the United States
Securities and Exchange Commission, provided such Registration
Statement is declared effective on or before January 31, 1997.
(C) Class E Common Stock
(1) Outstanding shares of Class E-1 Common Stock shall be
converted into shares of Class B Common Stock upon this
corporation attaining any one of the earnings levels set forth in
paragraphs (a) through (f) below or the market price of this
corporation's Class A Common Stock reaching any one of the target
levels ("Targets") set forth in paragraphs (g) and (h) below,
defined as follows:
(a) this corporation's net income before provision for
income taxes and exclusive of any extraordinary earnings or
charges including, but not limited to, any charge to income
resulting from the conversion of Class E Common Stock (all
as audited and determined by the corporation's independent
public accountants) (the "Minimum Pretax Income") amounts to
at least $17,500,000 for the fiscal year ending December 31,
1998; or
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(b) the Minimum Pretax Income amounts to at least
$22,500,000 for the fiscal year ending December 31, 1999; or
(c) the Minimum Pretax Income amounts to at least
$28,500,000 for the fiscal year ending December 31, 2000; or
(d) the Minimum Pretax Income amounts to at least
$36,000,000 for the fiscal year ending December 31, 2001; or
(e) the Minimum Pretax Income amounts to at least
$45,000,000 for the fiscal year ending December 31, 2002; or
(f) the Minimum Pretax Income amounts to at least
$56,000,000 for the fiscal year ending December 31, 2003; or
(g) the Bid Price (as defined herein) of the corporation's
Class A Common Stock shall average in excess of $14.00 per
share for 30 consecutive business days at any time during
the 18-month period commencing on the Effective Date; or
(h) the Bid Price of the corporation's Class A Common Stock
shall average in excess of $18.50 per share for 30
consecutive business days
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at any time during the 18-month period commencing 18 months
from the Effective Date and ending 36 months after the
Effective Date.
(2) Outstanding shares of Class E-2 Common Stock shall be
converted into shares of Class B Common Stock upon this
corporation attaining any one of the earning levels set forth in
paragraphs (a) through (f) below or the market price of this
corporation's Class A Common Stock reaching any one of the
Targets set forth in paragraphs (g) and (h) below:
(a) the Minimum Pretax Income amounts to at least
$21,875,000 for the fiscal year ending December 31, 1998; or
(b) the Minimum Pretax Income amounts to at least
$28,125,000 for the fiscal year ending December 31, 1999; or
(c) the Minimum Pretax Income amounts to at least
$35,625,000 for the fiscal year ending December 31, 2000; or
(d) the Minimum Pretax Income amounts to at least
$45,000,000 for the fiscal year ending December 31, 2001; or
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(e) the Minimum Pretax Income amounts to at least
$56,250,000 for the fiscal year ending December 31, 2002; or
(f) the Minimum Pretax Income amounts to at least
$69,500,000 for the fiscal year ending December 31, 2003; or
(g) the Bid Price of the corporation's Class A Common Stock
shall average in excess of $18.00 per share for 30
consecutive business days at any time during the 18-month
period commencing on the Effective Date; or
(h) the Bid Price of the corporation's Class A Common Stock
shall average in excess of $23.00 per share for 30
consecutive business days at any time during the 18-month
period commencing 18 months from the Effective Date and
ending 36 months from the Effective Date.
(3) As used herein, the term "Bid Price" (which shall be subject
to adjustment in the event of any stock split, dividend or
distribution, reverse stock split or other similar event) shall
mean:
(a) if the principal market for the Class A Common Stock is
a national securities exchange or the Nasdaq National
Market, the
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closing sales price of the Class A Common Stock as reported
by such exchange or market, or on a consolidated tape
reflecting transactions on such exchange or market; or
(b) if the principal market for the Class A Common Stock is
not a national securities exchange or the Nasdaq National
Market and the Class A Common Stock is quoted on the Nasdaq
SmallCap Market, the closing bid price of the Class A Common
Stock as quoted on the Nasdaq SmallCap Market; or
(c) if the principal market for the Class A Common Stock is
not a national securities exchange or the Nasdaq National
Market and the Class A Common Stock is not quoted on the
Nasdaq SmallCap Market, the closing bid price for the Class
A Common Stock as reported by the National Quotation Bureau,
Inc. ("NQB") or at least two market makers in the Class A
Common Stock if quotations are not available from NQB but
are available from market makers.
(4) Such Class E Common Stock shall be converted into an equal
number of fully paid and nonassessable shares of Class B Common
Stock (and shall reflect any previously declared stock splits,
dividends or recapitalizations of Class B Common Stock) by
written notice by this corporation to the holder
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of such shares of Class E Common Stock that a Target has been
attained, together with instructions of how to exchange Class E
Common Stock certificates for Class B Common Stock certificates.
The corporation, or its transfer agent, as the case may be, shall
exchange such certificate(s) for a certificate or certificates
representing an equal number of shares of Class B Common Stock.
Shares of Class E Common Stock shall be deemed to have been
converted immediately prior to the close of business on the day
upon which the corporation declares that the Targets have been
met. The person entitled to receive the Class B Common Stock
issuable upon such conversion shall be treated for all purposes
as the record holder of such Class B Common Stock at such time.
(5) Class E Common Stock may not be sold, assigned, transferred,
conveyed, or otherwise disposed of, whether voluntary or
otherwise (a "Transfer"), other than a Transfer upon death, by
operation of law, to family members or to any trust for the
benefit of the holder thereof or members of his or her family,
provided that such transferee agrees to be bound by the
restrictions stated in this Certificate of Incorporation.
(6) With respect to any shares of Class E Common Stock converted
into Class B Common Stock pursuant to subparagraphs (1) or (2)
above, until surrender as hereinafter provided, each outstanding
certificate, which prior to
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such conversion represented shares of Class E Common Stock, shall
be deemed for all purposes to evidence ownership of the number of
shares of Class B Common Stock into which the shares of Class E
Common Stock shall have been converted. Upon surrender to the
corporation, or its transfer agent, for cancellation of the
certificate or certificates representing such shares, the holder
thereof shall be entitled to receive a certificate or
certificates representing the number of shares of Class B Common
Stock to which such holder is entitled.
(7) With respect to any shares of Class E Common Stock converted
into Class B Common Stock pursuant to subparagraphs (1) or (2)
above, such converted shares of Class E Common Stock shall, after
the date of conversion, have the status of authorized but
unissued shares of Class E Common Stock, but may not be reissued.
(8) Subject to the provisions of the General Corporation Law of
the State of Delaware and to any other applicable restrictions on
the right of a corporation to redeem its own shares, any or all
of the unconverted outstanding Class E Common Stock may be
redeemed by the corporation at any time after March 31, 2004, for
$.01 per share of Class E Common Stock (the "Redemption Price").
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(a) At least 45 days prior to the date fixed for
redemption, the corporation shall mail notice of the
redemption to the holders of record of the Class E
Common Stock shares to be redeemed as of the date of
mailing or as of a record date lawfully fixed by the
corporation. The notice shall be mailed by first-class
mail, postage prepaid to the address of each holder
appearing on the books of the corporation or given by
that holder to the corporation for the purpose of
notice, or if no such address appears or is so given,
at the place where the principal office of the
corporation is located. The notice shall state the
date for redemption and the Redemption Price and shall
require the holder to surrender to the corporation, on
the date fixed and at the place designated in the
notice, the holder's certificate or certificates
representing the shares to be redeemed if those shares
are certificated.
(b) On or after the date fixed for redemption, each holder
of shares of Class E Common Stock called for redemption
shall, if those shares are certificated, surrender the
certificate evidencing the shares to the corporation at
the place designated in the redemption notice and shall
at that time be entitled to receive payment of the
Redemption Price. If less
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than all shares represented by any surrendered
certificate are redeemed, a new certificate for the
unredeemed shares shall be issued. If the redemption
notice is duly given and if sufficient funds are
available on the date fixed for redemption to pay the
Redemption Price, then, whether or not the certificates
evidencing the shares of Class E Common Stock to be
redeemed are surrendered, all rights with respect to
those shares so called for redemption shall cease and
terminate as of the date fixed for redemption, except
the right of the holders to receive the Redemption
Price, without interest, on surrender of their
certificates, if those shares are certificated.
(9) The "Minimum Pretax Income" amounts set forth above assume
the the conversion into Class B Common Stock of all of the
shares of Class E Common Stock and the conversion into Class A
Common Stock of any outstanding shares of Class B Common Stock
and any other securities which are convertible into Class A
Common Stock solely upon surrender of such convertible securities
without the payment of any additional consideration, but shall be
increased proportionally to reflect the issuance of any other
additional shares, including any shares that may be issued upon
the exercise of any warrants or options presently outstanding or
hereafter granted, provided, however, that, with respect to any
shares of Class A Common Stock issued
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upon exercise of warrants initially subject to the Registration
Statement, so long as any portion of the net proceeds received by
the corporation upon such exercise is not utilized by the
Company, but such proceeds (the "Invested Proceeds") are instead
invested in short-term, high grade interest bearing securities or
accounts or securities issued or guaranteed by the United States
government, then the adjustment to the Minimum Pretax Income
amounts set forth above with respect to that number of warrants
which generated such Invested Proceeds shall be equal to 8% per
annum multiplied by such amount of Invested Proceeds. The
Minimum Pretax Income shall be calculated exclusive of any
extraordinary earnings or extraordinary charges, including, but
not limited to, any charge to income resulting from the
conversion of shares of Class E Common Stock (all as audited and
determined by the corporation's independent public accountants).
5. The board of directors is authorized to make, alter or repeal the
bylaws of the corporation. Election of directors need not be by written ballot.
6. The provisions set forth in this Article 6 and in Article 4(B) and
4(C) of this Certificate of Incorporation may not be repealed or amended in any
respect unless such action is approved by the affirmative vote of the holders of
all of the outstanding shares of the Common Stock of the corporation.
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7. The name and mailing address of the incorporator is:
Cheryl Dearden
Luce, Forward, Hamilton & Scripps LLP
601 West Broadway, Suite 2600
San Diego, California 92101
8. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit.
9. The corporation shall indemnify its officers, directors, employees and
agents to the extent permitted by the General Corporation Law of Delaware.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of
Delaware, do make this certificate, hereby declaring and certifying that this is
my act and deed and the facts
herein stated are true, and accordingly have hereunto set my hand this 10th day
of July 1996.
/s/ Cheryl C. Dearden
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Cheryl C. Dearden, Incorporator
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