ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION
OF
EAGLE PACIFIC INDUSTRIES, INC.
Pursuant to the provisions of Minnesota Statutes Section 302A.139, the
following Amendment of the Articles of Incorporation of Eagle Pacific
Industries, Inc. was adopted on April 27, 2000, by the majority vote of the
shares entitled to vote at the Annual Meeting of Shareholders:
1. Article 1 of the Articles is amended in its entirety to read
as follows:
"ARTICLE 1 -- NAME
1.1) The name of the corporation is PW Eagle, Inc."
I swear that the foregoing is true and accurate and that I have the
authority to sign this document on behalf of the corporation.
Dobson West, Secretary
ARTICLES OF INCORPORATION
OF
EAGLE PACIFIC INDUSTRIES, INC.
(As Amended Through June 30, 1997)
Statement of Designation of Shares
of
Eagle Pacific Industries, Inc.
The undersigned hereby certifies that the resolutions set forth on
Exhibit A attached hereto were adopted by unanimous written action of the Board
of Directors of Eagle Pacific Industries, Inc., effective as of May 8, 1997.
I certify that I am authorized to execute this Statement and I further
certify that I understand that by signing this Statement I am subject to the
penalties of perjury as set forth in Minnesota Statutes, Section 609.48 as if I
had signed this Amendment under oath.
/s/ William H. Spell
William H. Spell, Chief Executive Officer
WHEREAS, Article 3.1 of the Articles of Incorporation of this
Corporation authorizes issuance of up to 20,000,000 shares of undesignated
stock.
WHEREAS, the Board of Directors of the Corporation is authorized to
establish from the undesignated shares by resolution adopted and filed in the
manner provided by law, one or more classes or series of shares, to designate
each such class or series (which may include, but is not limited to, designation
as additional common shares), and to fix the relative rights and preferences of
each such class or series.
Designation of Class B Common Stock
NOW, THEREFORE, BE IT HEREBY AND IT IS RESOLVED, that 3,500,000 shares
of the Corporation's undesignated shares shall be established as a class of
common stock designated as the "Class B Common Stock" of the Corporation.
FURTHER RESOLVED, that the Class B Common Stock shall be identical in
all respects to all other Common Stock of the Corporation except for certain
voting rights as set forth in this resolution. As used in this Designation of
Class B Common Stock, the term "Common Stock" shall mean the Corporation's
presently authorized shares of common stock, $.01 par value.
FURTHER RESOLVED, that the designation, the number of shares, the
powers, the relative, participating, optional and other special rights, and the
qualifications, limitations and restrictions, of the Class B Common Stock shall
be as follows:
(a) Designation and Number. The class of common stock
established hereby shall be designated as Class B Common Stock (herein
called the "Class B Common Stock") which shall have a par value of $.01
per share and the authorized number of the shares of such class shall
be 3,500,000, which authorized number shall not be subject to increase.
Except as otherwise provided by law and except as stated below, all
shares of Class B Common Stock shall be identical in all respects and
have equal rights and privileges including without limitation the right
to share ratably, together with all other shares of Common Stock, on a
per share basis (i) in such cash, stock, or other dividends and
distributions as from time to time may be declared by the Board of
Directors of the Corporation and (ii) in all distributions in assets or
funds of the Corporation upon the voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation.
(b) Voting Rights. Except as otherwise required by law, the
holders of Class B Common Stock shall not be entitled to vote on any
matter submitted to stockholders for a vote.
(c) Conversion. Each holder of Class B Common Stock shall have
the right at any time and from time to time to convert any or all
shares of Class B Common Stock registered in the name of such holder
into an equal number of shares of Common Stock.
(d) Mergers, Consolidations, Sales. In the case of any
consolidation or merger of the Corporation with another entity, or any
reorganization or reclassification of the Common Stock or other equity
securities of the Corporation, then, as a condition of such
consolidation, merger, reorganization or reclassification, lawful and
adequate provision shall be made whereby the holders of the Class B
Common Stock shall thereafter have the right to receive upon the basis
and upon the terms and conditions specified herein and in lieu of the
shares of Common Stock immediately theretofore receivable hereunder,
such shares of stock, securities or assets as may (by virtue of such
consolidation, merger, sale, reorganization or reclassification) be
issued or payable with respect to or in exchange for a number of
outstanding shares of Common Stock equal to the number of shares of
Common Stock immediately theretofore so receivable hereunder had such
consolidation, merger, sale, reorganization or reclassification not
taken place, and in any such case appropriate provisions shall be made
with respect to the rights and interests of the holders of the Class B
Common Stock to the end that the provisions hereof shall thereafter be
applicable as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon conversion of such
Class B Common Stock.
Designation of Class of Preferred Stock
NOW, THEREFORE, BE IT HEREBY AND IT IS RESOLVED, that 10,000 shares of
the Corporation's undesignated shares shall be established as a class of
preferred stock designated as the "8% Convertible Preferred Stock" of the
Corporation.
FURTHER RESOLVED, that the designation, the number of shares, the
powers, the relative, participating, optional and other special rights, and the
qualifications, limitations and restrictions, of the 8% Convertible Preferred
Stock shall be as follows:
(a) Designation and Number. The class of Preferred Stock
established hereby shall be designated as the 8% Convertible Preferred
Stock (herein called the "8% Preferred Stock") which shall have a par
value of $.01 per share and the authorized number of the shares of such
class shall be 10,000, which authorized number shall not be subject to
increase.
(b) Dividends. Except in the case of distributions in
liquidation, dissolution or winding up of the affairs of the
Corporation provided for in paragraph (c) below, the holders of the 8%
Preferred Stock shall be entitled to receive cumulative cash dividends
at the rate of 8% of the Liquidation Preference provided in
subparagraph (c) hereof per annum (computed on the basis of a 360-day
year of twelve 30-day months) per share, such dividends to be payable
quarterly on each March 30, June 30, September 30 and December 30 in
each year commencing June 30, 1997 (each such quarterly dividend period
being hereinafter referred to as a "Quarterly Dividend Period" and each
such dividend payment date being hereinafter referred to as a
"Quarterly Dividend Payment Date") and shall accrue on a daily basis
whether or not they have been declared and whether or not there are
profits, surplus or other funds of the Corporation legally available
for the payment of dividends. If on any Quarterly Dividend Payment
Date, the Corporation shall fail to pay such dividend in cash on the
Quarterly Dividend Payment Date, dividends on the 8% Preferred Stock
for each Quarterly Dividend Period thereafter shall be paid at the rate
of 12% of the Liquidation Preference provided in subparagraph (c)
hereof per annum per share (the "Adjusted Quarterly Dividend") for each
Quarterly Dividend Period until all accrued dividends on the 8%
Preferred Stock have been paid in full, in cash. If the Corporation
shall fail to pay in cash the accrued dividends payable on any
Quarterly Dividend Payment Date, to the extent permitted by applicable
law, an additional amount shall thereafter accrue on such accrued but
unpaid dividends which shall be computed at the rate of 12% per annum
on the amount of such accrued but unpaid dividends from the Quarterly
Dividend Payment Date on which the Corporation shall have failed to pay
such accrued dividends to the date on which such accrued dividends
shall be paid in full in cash. In addition, the holders of the 8%
Preferred Stock shall be entitled to receive cash dividends in the
amount per share determined by multiplying the amount per share at any
time distributed in cash on shares of Common Stock by the number of
shares of Common Stock at the time issuable upon conversion of a share
of 8% Preferred Stock (such distribution being hereinafter referred to
as the "Common Equivalent Dividend"), payable on the date that
distributions shall be paid or set apart for any shares of Common
Stock. In no event shall any dividend be paid or declared, nor shall
any distribution be made on the Corporation's Common Stock or preferred
stock of any other class unless (i) all dividends on the 8% Preferred
Stock for all past periods shall have been paid or declared and a sum
sufficient for the payment thereof set apart for payment, and (ii)
Common Equivalent Dividends as set forth above are declared and paid on
the 8% Preferred Stock at or prior to such time. In addition, upon any
conversion of shares of 8% Preferred Stock in accordance with the
provisions of paragraph (g), all accrued dividends and other amounts,
if any, payable on the 8% Preferred Stock shall be paid in cash,
including dividends for the portion of any Quarterly Dividend Period in
which such conversion shall have occurred. The Corporation covenants
and agrees that dividends on the 8% Preferred Stock shall be declared
at the annual rate of 8% of the Liquidation Value per share and shall
be paid in cash on each Quarterly Dividend Payment Date unless the
Corporation is prevented by operation of law from the declaration or
payment of such dividend.
(c) Liquidation Preference. In the event of any liquidation,
dissolution or winding up of the Corporation, either voluntary or
involuntary, the holders of 8% Preferred Stock shall be entitled to be
paid out of the assets of the Corporation available for distribution to
its stockholders, before any payment or declaration and setting apart
for payment of any amount shall be made in respect of the Common Stock
or stock of any other class or series (including the Series A 7%
Convertible Preferred Stock of the Corporation, hereinafter referred to
as the "Series A Preferred Stock"), an amount equal to $1,000.00 per
share of 8% Preferred Stock (as adjusted to reflect stock splits,
dividends, combinations, and reclassifications) (the "Liquidation
Preference") plus an amount equal to any accrued but unpaid dividends
on such share of 8% Preferred Stock and other amounts, if any, payable
thereon. Thereafter, the assets shall be distributed first, ratably
among the holders of Series A Preferred Stock, and second, ratably
among the holders of Common Stock and 8% Preferred Stock, all in
proportion to the number of shares of Common Stock owned by each such
holder and, in the case of the 8% Preferred Stock, to which such holder
would then be entitled upon conversion of such stock owned by such
holder.
(d) Mandatory Redemption. (i) On the seventh anniversary of
the original issuance of the 8% Preferred Stock (such date the
"Redemption Date"), the Corporation shall set apart out of its funds
lawfully available for such purpose (or to the extent that the same are
lawfully available therefor) for the redemption of the 8% Preferred
Stock on the Redemption Date that sum in cash which shall be sufficient
to redeem, and shall redeem on the Redemption Date, the shares of 8%
Preferred Stock then outstanding at a price equal to the Liquidation
Preference of such shares of 8% Preferred Stock set forth in paragraph
(c) above plus an amount equal to any accrued but unpaid dividends
thereon and other amounts payable thereon. If the full number of shares
required to be redeemed as aforesaid shall not be so redeemed, the
deficiency shall be made good thereafter as soon as funds shall become
lawfully available therefor.
(ii) If a Change in Ownership has occurred or the
Corporation obtains knowledge that a Change in Ownership is to
occur, the Corporation shall give prompt written notice of
such Change in Ownership describing in reasonable detail the
definitive terms and date of consummation thereof to each
holder of 8% Preferred Stock, but in any event such notice
shall not be given later than five business days after the
occurrence of such Change in Ownership. The holder or holders
of a majority of the 8% Preferred Stock then outstanding may
require the Corporation to redeem all or any portion of the
Convertible Preferred Stock owned by such holder or holders at
a price per share equal to the Liquidation Preference thereof
(plus all accrued and unpaid dividends thereon and other
amounts, if any, payable thereon) by giving written notice to
the Corporation of such election prior to the later of (A) 21
days after receipt of the Corporation's notice and (B) five
business days prior to the consummation of the Change in
Ownership (the "Expiration Date"). The Corporation shall give
prompt written notice of any such election to all other
holders of 8% Preferred Stock with respect to which an
election under this subparagraph (ii) has been made within
five days after the receipt of notice thereof, and each such
holder shall have until the later of (1) the Expiration Date
or (2) ten days after receipt of such second notice to request
redemption (by giving written notice to the Corporation) of
all or any portion of the shares of 8% Preferred Stock owned
by such holder. Upon receipt of such election(s), the
Corporation shall be obligated to redeem the aggregate number
of shares of 8% Preferred Stock specified therein on the later
of (I) the occurrence of the Change in Ownership or (II) five
days after the Corporation's receipt of such election(s). If
in any case a proposed Change in Ownership does not occur, all
requests for redemption in connection therewith shall be
automatically rescinded. The term "Change in Ownership" means
(x) any sale or series of sales of Common Stock by a member of
the Spell Group which results in the Spell Group owning
beneficially and of record less than 358,024 shares of Common
Stock of the Corporation, provided that shares of Common Stock
sold in an Exempt Sale shall be excluded from any
determination of a Change in Ownership, (y) any event which
results in an Acceptable Officer ceasing to continue to serve
as either the Chief Executive Officer or President of the
Corporation, or (z) any sale or issuance or series of sales
and/or issuances of shares of the Corporation's capital stock
by the Corporation or any holder thereof which results in any
person or group of affiliated persons (other than the Spell
Group) owning capital stock of the Corporation possessing the
voting power (under ordinary circumstances) to elect a
majority of the Corporation's Board of Directors. The term
"Acceptable Officer" shall mean William H. Spell or such other
person as shall be acceptable to the holders of at least a
majority of the shares of 8% Preferred Stock at the time
outstanding. The term "Exempt Sale" shall mean the sale of
Common Stock by the estate of any person included in the Spell
Group following the death of such person.
(iii) If a Fundamental Change is proposed to occur,
the Corporation shall give written notice of such Fundamental
Change describing in reasonable detail the definitive terms
and date of consummation thereof to each holder of 8%
Preferred Stock not more than 45 days nor less than 20 days
prior to the consummation thereof. The holder or holders of a
majority of the 8% Preferred Stock then outstanding may
require the Corporation to redeem all or any portion of the
shares of 8% Preferred Stock owned by each such holder or
holders at a price per share equal to the Liquidation
Preference (plus all accrued and unpaid dividends thereon and
other amounts, if any, payable thereon) by giving written
notice to the Corporation of such election prior to the later
of (A) ten days prior to the consummation of the Fundamental
Change or (B) ten days after receipt of notice from the
Corporation. The Corporation shall give prompt written notice
of such election to all other holders of 8% Preferred Stock
with respect to which an election under this subparagraph
(iii) has been made (but in any event within five business
days prior to the consummation of the Fundamental Change), and
each such holder shall have until two days after the receipt
of such notice to request redemption (by written notice given
to the Corporation) of all or any portion of the shares of 8%
Preferred Stock owned by such holder. Upon receipt of such
election(s), the Corporation shall be obligated to redeem the
aggregate number of shares specified therein upon the
consummation of such Fundamental Change. If any proposed
Fundamental Change does not occur, all requests for redemption
in connection therewith shall be automatically rescinded. The
term "Fundamental Change" means (x) a sale or transfer of more
than 50% of the assets of the Corporation and its subsidiaries
on a consolidated basis (measured by either book value in
accordance with generally accepted accounting principles
consistently applied or fair market value determined in the
reasonable good faith judgment of the Corporation's Board of
Directors) in any transaction or series of transactions (other
than sales in the ordinary course of business) and (y) any
merger or consolidation to which the Corporation is a party,
except for a merger in which the Corporation is the surviving
corporation and, after giving effect to such merger, no person
or group of affiliated persons (other than the Spell Group)
owns capital stock of the Corporation possessing the voting
power (under ordinary circumstances) to elect a majority of
the Corporation's Board of Directors.
(iv) If the Corporation shall fail to discharge its
obligation to redeem shares of 8% Preferred Stock pursuant to
this paragraph (d) (the "Mandatory Redemption Obligation"),
the Mandatory Redemption Obligation shall be discharged as
soon as the Corporation is permitted by law or by its
applicable contracts, agreements, indentures, bonds, notes,
debentures or similar instruments to discharge such Mandatory
Redemption Obligation. If and so long as the Mandatory
Redemption Obligation shall not fully be discharged, the
Corporation shall not, directly or indirectly, declare or pay
any dividend or make any distributions on, or purchase, redeem
or retire, or satisfy any mandatory or optional redemption,
sinking fund or other similar obligation in respect of, any
other series or class of its stock.
(v) Nothing contained in this paragraph (d) shall
prevent or otherwise impair the exercise by any holder of
shares of the 8% Preferred Stock of the conversion rights
existing under paragraph (g) below at any time prior to the
actual redemption of such shares pursuant to this paragraph
(d).
(vi) All shares of 8% Preferred Stock which shall
have been redeemed, purchased or otherwise acquired by the
Corporation shall be canceled and shall not be reissued as
shares of 8% Preferred Stock.
(e) Voting Rights. (i) Except as otherwise
required by law and as set forth in this paragraph (e) and
paragraph (f) below, the holders of the 8% Preferred Stock
shall not be entitled to vote on any matter submitted to
stockholders for a vote.
(ii) If the Corporation shall fail to redeem the 8%
Preferred Stock in accordance with the requirements of
paragraph (d) above, the number of directors constituting the
Corporation's Board of Directors will, at the request of
holders of two-thirds of the shares of the 8% Preferred Stock
then outstanding, be increased by one member, and the holders
of the 8% Preferred Stock will have the special right, voting
separately as a single class (with each share being entitled
to one vote) and to the exclusion of all other classes of the
Corporation's stock, to elect an individual to fill such newly
created directorship, to fill any vacancy of such directorship
and to remove any individual elected to such directorship. The
newly created directorship will constitute a separate class of
directors, and the director elected by the holders of the 8%
Preferred Stock will be entitled to cast one vote on each
matter considered by the Board of Directors (including for
purposes of determining the existence of a quorum). The
special right of the holders of 8% Preferred Stock to elect
members of the Board of Directors may be exercised at the
special meeting called pursuant to this subparagraph (ii), at
any annual or other special meeting of stockholders and, to
the extent and in the manner permitted by applicable law,
pursuant to a written consent in lieu of a stockholders
meeting. Such special right shall continue until such time as
all shares of 8% Preferred Stock shall have been redeemed in
accordance with the requirements of paragraph (d) above
together with accrued and unpaid dividends thereon, at which
time such special right shall terminate.
At any time when such special right has vested in the
holders of 8% Preferred Stock, a proper officer of the
Corporation shall, upon the written request of the holder of
at least 10% of the 8% Preferred Stock then outstanding,
addressed to the secretary of the Corporation, call a special
meeting of the holders of 8% Preferred Stock for the purpose
of electing a director pursuant to this paragraph (iii). Such
meeting shall be held at the earliest legally permissible date
at the principal office of the Corporation, or at such other
place designated by the holders of at least 10% of the 8%
Preferred Stock then outstanding. If such meeting has not been
called by a proper officer of the Corporation within 10 days
after personal service of such written request upon the
secretary of the Corporation or within 20 days after mailing
the same to the secretary of the Corporation at its principal
office, then the holders of at least 10% of the 8% Preferred
Stock then outstanding may designate in writing one of their
number to call such meeting at the expense of the Corporation,
and such meeting may be called by such person so designated
upon the notice required for annual meetings of stockholders
and shall be held at the Corporation's principal office, or at
such other place designated by the holders of at least 10% of
the 8% Preferred Stock then outstanding.
At any meeting or at any adjournment thereof at which
the holders of 8% Preferred Stock have the special right to
elect a director, the presence, in person or by proxy, of the
holders of two-thirds of the 8% Preferred Stock then
outstanding shall be required to constitute a quorum for the
election or removal of any director by the holders of the 8%
Preferred Stock exercising such special right. The vote of a
majority of such quorum shall be required to elect or remove
any such director.
Any director so elected by the holders of 8%
Preferred Stock shall continue to serve as a director until
the redemption of the shares of 8% Preferred Stock in
accordance with the requirements of paragraph (d) above. After
the redemption of the 8% Preferred Stock in accordance with
the requirements of paragraph (d) above, the director elected
by the holders of the 8% Preferred Stock shall cease to be a
director and the number of directors constituting the Board of
Directors of the Corporation shall decrease to such number as
constituted the whole Board of Directors of the Corporation
immediately prior to the occurrence of the event giving rise
to the special right to elect directors.
(f) Restrictions on Corporate Action. So long as any
shares of the 8% Preferred Stock shall be outstanding and, in
addition to any other approvals or consents required by law,
without the consent of the holders of at least two-thirds of
the shares of 8% Preferred Stock at the time outstanding as of
a record date fixed by the Board of Directors, given either by
their affirmative vote at a special meeting called for that
purpose, or, if permitted by law, in writing, without a
meeting, the Corporation shall not:
(i) Amend any provision of the Articles
of Incorporation or the Bylaws of the Corporation; or
(ii) Declare, pay or obligate itself to pay
a dividend or make any other distributions (including
payments upon redemption or repurchase) relative to
any shares of its Common Stock or any other class or
series of its capital stock other than the 8%
Preferred Stock unless:
(A) such dividend or distribution is
payable out of earnings or surplus (other
than revaluation surplus or paid-in surplus)
or payable in shares of Common Stock
referred to in subparagraph (iii)(A) of
paragraph (g) or payable in warrants, rights
or Convertible Securities referred to in
subparagraph (iii)(C) of paragraph (g); and
(B) such dividend or other
distribution is made in compliance with
paragraph (b); or
(iii) Create any new class or series of
shares having preferences over or on parity with the
8% Preferred Stock as to dividend, liquidation,
redemption, sinking fund, or assets including,
without limitation, any class or series of stock
that:
(A) could be redeemed in whole or in part at
a price per share greater than the consideration per
share received by the Corporation therefor plus any
accrued and unpaid dividends thereon or would be
entitled to payment of any redemption price prior to
or concurrently with the holders of the 8% Preferred
Stock;
(B) would be entitled upon liquidation to
receive any amount per share in excess of the sum of
the consideration per share received by the
Corporation therefor plus any accrued and unpaid
dividends thereon or would be entitled to receive any
liquidating distribution prior to or concurrently
with the holders of the 8% Preferred Stock;
(C) would be entitled to payment of any
dividend or distribution prior to or concurrently
with the holders of the 8% Preferred Stock; or
(D) would be convertible into or
exchangeable for or carry any option or right to
acquire a class or series of stock described in
clauses (A), (B) or (C) above; or
(iv) Issue any evidence of indebtedness which is
convertible into or exchangeable for shares of any class or
series of capital stock of the Corporation; or
(v) (A) Directly or indirectly, or through any
subsidiary, purchase, redeem or retire any shares of its
capital stock or any warrant, rights or options to purchase or
acquire any shares of its capital stock (any such purchase,
redemption or retirement being herein collectively called
"Restricted Payments") if either (x) the Corporation shall
have failed to pay dividends or any other amount which shall
have accrued on the shares of 8% Preferred Stock then
outstanding, or (y) the aggregate amount of Restricted
Payments made during the period from and after January 1, 1997
to and including the date of the making of the Restricted
Payment in question would exceed 8.9% of EBITDA for such
period, computed on a cumulative basis for said entire period;
or
(B) For purposes of this subparagraph (v), "EBITDA"
for any period shall mean the sum of net income from
continuing operations of the Corporation during such period,
plus (to the extent deducted in determining net income from
continuing operations of the Corporation) (1) interest expense
on indebtedness for borrowed money (including non cash
amortized interest expense on deferred finance costs, original
issue discount, prepaid interest, and amortized costs relating
to warrants) of the Corporation during such period, (2) all
provisions for any federal, state or other income taxes made
by the Corporation during such period and (3) depreciation and
amortization expense of the Corporation during such period,
all determined in accordance with generally accepted
accounting principles at the time in the United States except
as otherwise set forth herein; or
(vi) Alter or change the specific rights,
preferences, or privileges of any class or series of its
Preferred Stock so as to have an adverse effect on the 8%
Preferred Stock or change any rights or priorities of the 8%
Preferred Stock (including the rights of the holders of the 8%
Preferred Stock under this paragraph (f)); or
(vii) Issue any Additional Shares of Common Stock or
any options warrants or other rights to subscribe for or
purchase Additional Shares of Common Stock at a price per
share which is less than the Conversion Price.
(g) Conversion. (i) (A) Optional Conversion. Each share of the
8% Preferred Stock shall be convertible, at the option of the holder
thereof, at any time after the date of issuance of such share, at the
office of the Corporation or any transfer agent for the 8% Preferred
Stock, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing the Liquidation Preference of
such share by the Conversion Price then in effect. The Conversion Price
at which shares of Common Stock shall be delivered upon conversion of
each share of 8% Preferred Stock without the payment of any additional
consideration by the holder thereof shall initially be $4.26 per share
(the "Conversion Price"). Such initial Conversion Price shall be
subject to adjustment as set forth in subparagraph (iii) of this
paragraph (g).
(B) Mandatory Conversion. (1) Subject to the provisions of
subparagraph (2) below, if at any time after the second anniversary of
the initial issuance of the 8% Preferred Stock, the Current Market
Price per share of Common Stock shall exceed 175% of the Conversion
Price then in effect, all (but not less than all) of the shares of 8%
Preferred Stock shall be converted into shares of Common Stock at the
election of the Corporation as evidenced by a resolution adopted by the
Board of Directors of the Corporation. Such resolution shall set forth
the date upon which the conversion shall occur which shall be not less
than 5 nor more than 15 days after the date upon which such resolution
is adopted. Written notice of such conversion together with a copy of
the resolution of the Board of Directors relating to such conversion
shall be given to each holder of the 8% Preferred Stock promptly
following its adoption. Each holder of 8% Preferred Stock so converted
will be entitled to receive the number of shares of Common Stock into
which such 8% Preferred Stock held by such holder would have been
converted if such holder had exercised such holder's conversion rights
on the conversion date specified in the resolution adopted by the Board
of Directors.
(2) Upon the occurrence of an event specified in subparagraph
(i)(B) of this paragraph (g), the outstanding shares of the 8%
Preferred Stock to be converted shall be converted without any further
action by the holders of such shares and whether or not the
certificates representing such shares are surrendered to the
Corporation or its transfer agent; provided, however, (I) that such
conversion will not violate any legal requirements (such as compliance
with the Hart-Scott-Rodino Antitrust Improvement Act of 1976) and (II)
that the Corporation shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon such conversion
unless certificates evidencing such shares of the 8% Preferred Stock
being converted are delivered to either the Corporation or any transfer
agent, as hereinafter provided, or the holder notifies the Corporation
or any transfer agent, as hereinafter provided, that such certificates
have been lost, stolen, or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation from any
loss incurred by it in connection therewith. Upon the mandatory
conversion of the 8% Preferred Stock, the holders of such 8% Preferred
Stock shall surrender the certificates representing such shares at the
office of the Corporation or of any transfer agent for the Common
Stock. Thereupon, there shall be issued and delivered to such holder,
promptly at such office and in his name as shown on such surrendered
certificate or certificates, a certificate or certificates for the
number of shares of Common Stock into which the shares of the 8%
Preferred Stock surrendered were convertible on the date on which such
mandatory conversion occurred.
(ii) Mechanics of Conversion. The shares of Common Stock
issued to the holders of 8% Preferred Stock pursuant to this paragraph
(g) will be shares of Class B Common Stock; except that any holder of
8% Preferred Stock may request by written notice to the Corporation
that shares of Voting Common Stock be issued upon conversion of the 8%
Preferred Stock of such holder. Before any holder of 8% Preferred Stock
shall be entitled to convert the same into shares of Common Stock
pursuant to subparagraph (i)(A) of this paragraph (g), he or she shall
surrender the certificate or certificates therefor, duly endorsed, at
the office of the Corporation or of any transfer agent for the 8%
Preferred Stock, and shall give written notice by mail, postage
prepaid, to the Corporation at its principal corporate office of the
election to convert the same and shall state therein the name or names
in which the certificate or certificates for shares of Common Stock are
to be issued. The Corporation shall as soon as practicable thereafter,
issue and deliver at such office to such holder of 8% Preferred Stock,
or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such
holder shall be entitled as aforesaid. Such conversion shall be deemed
to have been made immediately prior to the close of business on the
date of such surrender of the shares of 8% Preferred Stock to be
converted, and the person or person entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock
as of such date. If the conversion is in connection with an
underwritten offer of securities registered pursuant to the Securities
Act of 1933, the conversion may, at the option of any holder tendering
the 8% Preferred Stock for conversion, be conditioned upon the closing
with the underwriter of the sale of securities pursuant to such
offering, in which event the person(s) entitled to receive the Common
Stock issuable upon such conversion of the 8% Preferred Stock shall not
be deemed to have converted such 8% Preferred Stock until immediately
prior to the closing of such sale of securities.
(iii) Conversion Price Adjustments of 8% Preferred Stock. The
Conversion Price shall be subject to adjustment from time to time as
follows:
(A) Stock Dividends, Subdivisions and
Combinations. In case after April 30, 1997 the Corporation
shall
(1) take a record of the holders of its
Common Stock for the purpose of entitling them to
receive a dividend payable in, or other distribution
of, Common Stock, or
(2) subdivide its outstanding shares of
Common Stock into a larger number of shares of
Common Stock, or
(3) combine its outstanding shares of
Common Stock into a smaller number of shares of
Common Stock,
then the Conversion Price shall be adjusted to that
rate determined by multiplying the Conversion Price
in effect immediately prior to such event by a
fraction (I) the numerator of which shall be the
total number of outstanding shares of Common Stock of
the Corporation immediately prior to such event, and
(II) the denominator of which shall be the total
number of outstanding shares of Common Stock of the
Corporation immediately after such event. In the
event that the dividend or distribution referenced in
subparagraph (iii)(A)(1) above is lawfully abandoned,
the Conversion Price shall be appropriately
readjusted.
(B) Issuance of Additional Shares of Common Stock. In
case after April 30, 1997 the Corporation shall (except as
hereinafter provided) issue any Additional Shares of Common
Stock for a consideration which is less than the Current
Market Price per share, then the per share Conversion Price
upon each such issuance shall be adjusted to that price
determined by multiplying the per share Conversion Price in
effect immediately prior to such event by a fraction:
(x) the numerator of which shall be
the number of shares of Common Stock
outstanding immediately prior to the
issuance of such Additional Shares of Common
Stock plus the number of full shares of
Common Stock which the aggregate
consideration for the total number of such
Additional Shares of Common Stock so issued
would purchase at the Current Market Price
per share, and
(y) the denominator of which shall
be the number of shares of Common Stock
outstanding immediately prior to the
issuance of such Additional Shares of Common
Stock plus the number of such Additional
Shares of Common Stock so issued.
The provisions of this subparagraph (iii)(B) shall not apply
to any Additional Shares of Common Stock that are distributed
to holders of Common Stock as a stock dividend or subdivision,
for which an adjustment is provided for under subparagraph
(iii)(A) above. No adjustment of the per share Conversion
Price shall be made under this subparagraph (iii)(B) upon the
issuance of any Additional Shares of Common Stock that are
issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of
any conversion or exchange rights in any Convertible
Securities, if any such adjustment shall previously have been
made upon the issuance of such warrants or other rights or
upon the issuance of such Convertible Securities (or upon the
issuance of any warrants or other rights therefor) pursuant to
subparagraph (iii)(C) below.
(C) Issuance of Warrants, Other Rights or Convertible
Securities. In case the Corporation shall issue any options,
warrants or other rights to subscribe for or purchase any
Additional Shares of Common Stock or issue Convertible
Securities and the consideration per share for which
Additional Shares of Common Stock may at any time thereafter
be issuable pursuant to such options, warrants or other rights
or pursuant to the terms of such Convertible Securities shall
be less than the Current Market Price, then the per share
Conversion Price shall be adjusted as provided in subparagraph
(iii)(B) above.
For purposes of adjustments in the Conversion Price pursuant
to this subparagraph (iii)(C), the number of shares of Common
Stock outstanding shall be deemed to include the maximum
number of Additional Shares of Common Stock issuable pursuant
to all outstanding options, warrants or other rights or
necessary to effect the conversion or exchange of all such
outstanding Convertible Securities of the Corporation. All
such options, warrants, other rights or Convertible Securities
shall be deemed to have been issued as of, and the date as of
which the Current Market Price per share of Common Stock shall
be computed shall be, the earlier of (1) the date on which the
Corporation shall enter a firm contract or commitment for the
issuance of such options, warrants, other rights or
Convertible Securities or (2) the date of actual issuance of
such options, warrants, other rights or Convertible
Securities.
No adjustment of the per share Conversion Price shall be made
under this subparagraph (iii)(C) upon the issuance of any
Convertible Securities that are issued pursuant to the
exercise of any options, warrants or other subscription or
purchase rights therefor if any such adjustment shall
previously have been made upon the issuance of such options,
warrants or other rights pursuant to said paragraph.
(D) Other Provisions Applicable to Adjustments Under
This Subparagraph. The following provisions shall be
applicable to the making of adjustments to the Conversion
Price hereinbefore provided in this subparagraph (iii):
(1) Computation of Consideration. To the
extent that any Additional Shares of Common Stock or
any Convertible Securities or any options, warrants
or other rights to subscribe for or purchase any
Additional Shares of Common Stock or any Convertible
Securities shall be issued for a cash consideration,
the consideration received by the Corporation
therefor shall be deemed to be the amount of the cash
received by the Corporation therefor, or, if such
Additional Shares of Common Stock or Convertible
Securities or options, warrants or other rights are
offered by the Corporation for subscription, the
subscription price, or, if such Additional Shares of
Common Stock or Convertible Securities or options,
warrants or other rights are sold to underwriters or
dealers for public offering without a subscription
offering, the initial public offering price, in any
such case excluding any amounts paid or receivable
for accrued interest or accrued dividends and without
deduction of any compensation, discounts or expenses
paid or incurred by the Corporation for and in the
underwriting thereof, or otherwise in connection with
the issue thereof. To the extent that such issuance
shall be for a consideration other than cash, then,
except as herein otherwise expressly provided, the
amount of such consideration shall be deemed to be
the fair value of such consideration at the time of
such issuance as determined in good faith by the
Board of Directors of the Corporation. The
consideration for any Additional Shares of Common
Stock issuable pursuant to any options, warrants or
other rights to subscribe for or purchase the same
shall be the consideration received by the
Corporation for issuing such options, warrants or
other rights, plus the additional consideration
payable to the Corporation upon the exercise of such
options, warrants or other rights. The consideration
for any Additional Shares of Common Stock issuable
pursuant to the terms of any Convertible Securities
shall be the consideration received by the
Corporation for issuing any options, warrants or
other rights to subscribe for or purchase such
Convertible Securities plus the consideration paid or
payable to the Corporation in respect of the
subscription for or purchase of such Convertible
Securities, plus the additional consideration, if
any, payable to the Corporation upon the exercise of
the right of conversion or exchange in such
Convertible Securities. In case of the issuance at
any time of any Additional Shares of Common Stock or
Convertible Securities in payment or satisfaction of
any dividend upon any class of equity securities
other than Common stock, the Corporation shall be
deemed to have received for such Additional Shares of
Common Stock or Convertible Securities a
consideration equal to the amount of such dividend so
paid or satisfied.
(2) Readjustment of Conversion Price. Upon
expiration of the right of conversion or exchange of
any Convertible Securities, or upon the expiration of
any rights, options or warrants, or upon any increase
in the minimum consideration receivable by the
Corporation for the issuance of Additional Shares of
Common Stock pursuant to such Convertible Securities,
rights, options or warrants, if any such Convertible
Securities shall not have been converted or
exchanged, or if any such rights, options or warrants
shall not have been exercised, the number of shares
of Common Stock deemed to be issued and outstanding
by reason of the fact that they were issuable upon
conversion or exchange of any such Convertible
Securities or upon exercise of any such rights,
options or warrants shall no longer be computed as
set forth above, and the Conversion Price shall
forthwith be readjusted and thereafter be the rate
which it would have been (but reflecting any other
adjustments in the Conversion Price made pursuant to
the provisions of this paragraph (g) after the
issuance of such Convertible Securities, rights,
options or warrants) had the adjustment of the
Conversion Price made upon the issuance or sale of
such Convertible Securities or the issuance of such
rights, options or warrants been made on the basis of
the issuance only of the number of Additional Shares
of Common Stock actually issued upon conversion or
exchange of such Convertible Securities or upon the
exercise of such rights, options or warrants, or upon
the basis of such increased minimum consideration, as
the case may be, and thereupon only the number of
Additional Shares of Common Stock actually so issued
or the number thereof issuable upon the basis of such
increased minimum consideration shall be deemed to
have been issued and only the consideration actually
received or such increased minimum consideration
receivable by the Corporation (computed as in
subparagraph (iii)(D)(1) of this paragraph (g)) shall
be deemed to have been received by the Corporation.
(E) Common Equivalent Dividends. In case the
Corporation shall declare, to the extent otherwise permitted
herein, a dividend upon its Common Stock (except a dividend
payable in shares of Common Stock referred to in subparagraph
(iii)(A) of this paragraph (g)) or a dividend payable in
warrants, rights or Convertible Securities referred to in
subparagraph (iii)(C) of this paragraph (g) payable otherwise
than out of earnings or surplus (other than revaluation
surplus or paid-in surplus), the Corporation shall
simultaneously declare a dividend, in cash, upon the 8%
Preferred Stock equal to, in the case of a cash dividend, the
amount of the per share dividend declared upon the Common
Stock times the number of shares of Common Stock to be
received by the holders of the 8% Preferred Stock upon
conversion at the Conversion Price then in effect and, in the
case of a dividend payable other than in cash, the fair value
of such dividend declared upon the Common Stock as determined
by the Board of Directors of the Corporation. For the purposes
of the foregoing, a dividend payable other than in cash shall
be considered payable out of earnings or surplus (other than
revaluation surplus or paid-in surplus) only to the extent
that such earnings or surplus are charged an amount equal to
the fair value of such dividend as determined by the Board of
Directors of the Corporation.
(F) Minimum Adjustment. Except as hereinafter
provided, no adjustment of the Conversion Price hereunder
shall be made if such adjustment results in a change of the
Conversion Price then in effect of less than one cent ($.01).
Any adjustment of less than one cent ($.01) of any Conversion
Price shall be carried forward and shall be made at the time
of and together with any subsequent adjustment that, together
with adjustment or adjustments so carried forward, amounts to
one cent ($.01) of the Conversion Price then in effect or
more. However, upon the conversion of any share of the 8%
Preferred Stock, the Corporation shall make all necessary
adjustments not theretofore made to the Conversion Price up to
and including the date upon which the conversion is exercised.
(G) Notice of Adjustments. Whenever the Conversion
Price shall be adjusted pursuant to this subparagraph (iii),
the Corporation shall promptly make a certificate signed by
the President or a Vice President and by the Treasurer or an
Assistant Treasurer setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment,
the adjusted Conversion Price, the method by which such
adjustment was calculated (including a description of the
basis on which the Board of Directors of the Corporation made
any determination hereunder), and shall promptly cause copies
of such certificate to be mailed (by first class mail postage
prepaid) to each of the holders of the 8% Preferred Stock.
(iv) Mergers, Consolidations, Sales. In the case of any
consolidation or merger of the Corporation with another entity, or any
reorganization or reclassification of the Common Stock or other equity
securities of the Corporation (except a split-up or combination,
provision for which is made in subparagraph (iii)(A) of this paragraph
(g)), then, as a condition of such consolidation, merger,
reorganization or reclassification, lawful and adequate provision shall
be made whereby the holders of the 8% Preferred Stock shall thereafter
have the right to receive upon the basis and upon the terms and
conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore receivable hereunder, such shares of stock,
securities or assets as may (by virtue of such consolidation, merger,
sale, reorganization or reclassification) be issued or payable with
respect to or in exchange for a number of outstanding shares of Common
Stock equal to the number of shares of Common Stock immediately
theretofore so receivable hereunder had such consolidation, merger,
sale, reorganization or reclassification not taken place, and in any
such case appropriate provisions shall be made with respect to the
rights and interests of the holders of the 8% Preferred Stock to the
end that the provisions hereof (including, without limitation,
provisions for adjustment of the Conversion Price) shall thereafter be
applicable as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon conversion of such 8%
Preferred Stock.
(v) Dissolution or Liquidation. In the event of any proposed
distribution of the assets of the Corporation in dissolution or
liquidation (except under circumstances when the foregoing subparagraph
(iv) of this paragraph (g) shall be applicable) the Corporation shall
mail notice thereof to the holders of the 8% Preferred Stock and shall
make no distribution to shareholders until the expiration of 30 days
from the date of mailing of the aforesaid notice, and in any such case,
the holders of the 8% Preferred Stock may exercise the conversion
rights with respect to the 8% Preferred Stock within 30 days from the
date of mailing such notice and all rights herein granted not so
exercised within such 30-day period shall thereafter become null and
void.
(vi) No Impairment. The Corporation will not, by amendment of
its Articles of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Corporation, but
will at all times in good faith assist in the carrying out of all of
the provisions of this paragraph (g) and in the taking of all such
action as may be necessary or appropriate in order to protect the
conversion rights of the holders of the 8% Preferred Stock against
impairment.
(vii) Fully Paid Stock; Taxes. The shares of stock represented
by each and every certificate for its Common Stock to be delivered on
the exercise of the conversion rights herein provided for shall, at the
time of such delivery, be validly issued and outstanding and be fully
paid and nonassessable. The Corporation shall pay when due and payable
any and all federal and state taxes (other than income taxes) which may
be payable in respect of the 8% Preferred Stock or any Common Stock or
certificates therefor upon the exercise of the conversion rights herein
provided for pursuant to the provisions hereof. The Corporation shall
not, however, be required to pay any tax which may be payable in
respect of any transfer involved in the transfer and delivery of stock
certificates in the name other than that of the holder of the 8%
Preferred Stock converted, and any such tax shall be paid by such
holder at the time of presentation.
(viii) Closing of Transfer Books. The right to convert any of
the 8% Preferred Stock shall not be suspended during any period while
the stock transfer books of the Corporation for its Common Stock may be
closed. The Corporation shall not be required, however, to deliver
certificates of its Common Stock upon such exercise while such books
are duly closed for any purpose, but the Corporation may postpone the
delivery of the certificate for such Common Stock until the opening of
such books, and they shall, in such case, be delivered forthwith upon
the opening thereof, or as soon as practicable thereafter.
(ix) Reservation of Common Stock. The Corporation will at all
times reserve and keep available such number of authorized shares of
its Voting Common Stock and Class B Common Stock, solely for the
purpose of issue upon the conversion of the 8% Preferred Stock as
herein provided for, as shall then be issuable upon the conversion of
all outstanding shares of 8% Preferred Stock and such shares of Common
Stock shall at no time have a par value which is in excess of the
Conversion Price then in effect.
(h) Preemptive Rights. If at any time after the date of
initial issuance of the 8% Preferred Stock, the Corporation grants,
issues or sells any Additional Shares of Common Stock, or issues or
sells any options, Convertible Securities or any warrants or other
rights to subscribe for or purchase Additional Shares of Common Stock,
then each holder of the 8% Preferred Stock shall be entitled to
acquire, upon the same terms provided in any such grant, or applicable
to any such issuance or sale of such additional securities, such number
of additional securities so as to cause the percentage of outstanding
shares of Common Stock to which such holder would be entitled upon
conversion of the 8% Preferred Stock (determined as of the date of
issuance of such additional securities) to remain unchanged.
(i) Definitions. In addition to the terms defined elsewhere in
this Designation of Class of Preferred Stock, the following terms have
the following respective meanings:
The term "Additional Shares of Common Stock" shall mean all shares of
Common Stock issued by the Corporation on and after April 30, 1997,
except:
(A) Common Stock issued upon conversion of the Series
A Preferred Stock or the 8% Preferred Stock; and
(B) 2,512,466 shares of Common Stock which may be
issued pursuant to stock option plans, warrants and
contractual commitments in effect on April 30, 1997.
The term "Class B Common Stock" shall mean the Corporation's
Class B Common Stock, $.01 par value, authorized on the date of
issuance of the 8% Preferred Stock.
The term "Common Stock" shall mean (i) the Voting Common
Stock, (ii) the Class B Common Stock, and (iii) any other class of
capital stock of the Corporation hereafter authorized which is not
limited to a fixed amount or percentage in respect of the rights of the
holders thereof to participate in dividends or in the distribution of
assets upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation; provided that the shares to be received
by the holders of the 8% Preferred Stock upon conversion shall be
either the Voting Common Stock or the Class B Common Stock authorized
on the date of issuance of the 8% Preferred Stock.
The term "Convertible Securities" shall mean evidences of
indebtedness, shares of stock or other securities that are convertible
into or exchangeable for Additional Shares of Common Stock, either
immediately or upon the arrival of a specified date or the happening of
a specified event.
The term "Current Market Price" per share of Common Stock for
the purposes of any provision of paragraph (g) means the average of the
closing prices of such security's sales on all securities exchanges on
which such security may at the time be listed, or, if there has been no
sales on any such exchange on any day, the average of the highest bid
and lowest asked prices on all such exchanges at the end of such day,
or, if on any day such security is not so listed, the average of the
representative bid and asked prices quoted in the Nasdaq Stock Market
as of 4:00 P.M., New York time, or, if on any day such security is not
quoted in the Nasdaq Stock Market, the average of the highest bid and
lowest asked prices on such day in the domestic over-the-counter market
as reported by the National Quotation Bureau, Incorporated, or any
similar successor organization, in each such case averaged over a
period of 31 days consisting of the day as of which "Market Price" is
being determined and the 30 consecutive business days prior to such
day. For purposes of determination pursuant to subparagraph (i)(B) of
paragraph (g), if at any time the Common Stock of the Company is not
listed on any national securities exchange or quoted in the Nasdaq
Stock Market, the "Market Price" shall be deemed to be 0. For purposes
of determination pursuant to subparagraph (iii) of paragraph (g), if at
any time the Common Stock of the Company is not listed on any
securities exchange or quoted in the Nasdaq Stock Market or the
over-the-counter market, the "Market Price" shall be the fair value
thereof determined by resolution of the Board of Directors of the
Corporation in good faith; provided that if such valuation by the Board
of Directors is contested by a majority of the holders of the 8%
Preferred Stock within 20 days after receipt of written notice of the
adoption of such resolution, then as determined by any member of the
National Association of Securities Dealers, Inc. selected by the
Corporation.
The term "Family Trust" means, in respect of any person, any
trust for the exclusive benefit of such individual, his/her spouse and
lineal descendants, so long as such individual has the exclusive right
to control such trust.
The term "Related Party" means, with respect to any person (i)
a spouse or child of such person, (ii) a Family Trust, or (iii) a
corporation, partnership or limited liability company in which such
person owns or holds a 51% or more controlling interest.
The term "Spell Group" shall mean any one or more of Harry W.
Spell, William H. Spell, Richard Perkins and Bruce Richard and their
respective Related Parties; provided that the Spell Group shall at
all times include either Harry W. Spell or William H. Spell.
The term "Voting Common Stock" shall mean the Corporation's
voting Common Stock, $.01 par value, authorized pursuant to the
Articles of Incorporation as in effect on the date of issuance of the
8% Preferred Stock.
AMENDMENT OF ARTICLES OF INCORPORATION
OF
BLACK HAWK HOLDINGS, INC.
Article 1 of the Articles of Incorporation of the above corporation has
been amended to read as follows:
"ARTICLE 1 - NAME
1.1) The name of the corporation shall be Eagle Pacific Industries,
Inc."
The foregoing amendment has been approved pursuant to Chapter 302A,
Minnesota Statutes.
I certify that I am authorized to execute this Amendment and I further
certify that I understand that by signing this Amendment I am subject to the
penalties of perjury as set forth in Minnesota Statutes, Section 609.48, as if I
had signed this Amendment under oath.
/s/ William H. Spell, President
STATEMENT OF DESIGNATION OF SHARES
OF
BLACK HAWK HOLDINGS, INC.
The undersigned hereby certifies that the resolutions set forth on
Exhibit A attached hereto were adopted by unanimous written action of the Board
of Directors of Black Hawk Holdings, Inc. effective as of September 23, 1993.
I certify that I am authorized to execute this Statement and I further
certify that I understand that by signing this Statement I am subject to the
penalties of perjury as set forth in Minnesota Statutes, Section 609.48 as if I
had signed this Amendment under oath.
/s/ William H. Spell, President
WRITTEN ACTION IN LIEU OF MEETING OF BOARD OF DIRECTORS
OF
BLACK HAWK HOLDINGS, INC.
The undersigned, being all the members of the Board of Directors of
Black Hawk Holdings, Inc., a Minnesota corporation, acting pursuant to the
provisions of Minnesota Statutes, Section 302A.239, does hereby consent to the
adoption of and does hereby adopt the following resolutions, as of September 23,
1993:
Designation of Class of Preferred Stock
WHEREAS, Article 3.1 of the Articles of Incorporation of this
corporation authorizes issuance of 20,000,000 shares of undesignated stock.
WHEREAS, the Board of Directors of the corporation is authorized to
establish from the undesignated shares by resolution adopted and filed in the
manner provided by law, one or more classes or series of shares, to designate
each such class or series (which may include, but is not limited to, designation
as additional common shares), and to fix the relative rights and preferences of
each such class or series.
NOW, THEREFORE, RESOLVED, that 2,000,000 shares of the corporation's
undesignated shares shall be designated as Series A 7% Convertible Preferred
Stock.
FURTHER RESOLVED, that the rights and preferences of the Series A 7%
Convertible Preferred Stock (the "Series A Shares") shall be as follows:
(a) Dividends. The holders of the Series A Shares shall be
entitled to receive out of any funds at any time legally available for
the declaration of dividends, when and as declared by the Board of
Directors, cash dividends at the rate of 7% of the liquidation payment
provided in subparagraph (c) hereof per annum per share, such dividends
to be payable quarterly each March 31, June 30, September 30 and
December 31, provided that the first dividend shall not be payable
until March 31, 1994. Dividends on shares of the Series A Shares shall
on the date they are issued be cumulative, whether or not earned. In no
event shall any dividend be paid or declared, nor shall any
distribution be made on the corporation's Common Stock, nor shall any
Common Stock be purchased, redeemed or otherwise acquired by the
corporation for value, unless all dividends on the Series A Shares for
all past periods shall have been paid or declared and a sum sufficient
for the payment thereof set apart for payment.
(b) Voting. Each holder of Series A Shares will have the right
to vote for all shareholder purposes the number of votes that is equal
to the number of shares of Common Stock into which such holder's Series
A Shares are then convertible, as hereinafter provided. Except as
otherwise required by law, the holders of Series A Shares shall vote
together with the holders of Common Stock as though the Series A Shares
and Common Stock were a single class.
(c) Liquidation. In the event of any liquidation, dissolution
or winding-up of the corporation, whether voluntary or involuntary,
before any other distribution or payment is made to the holders of the
Common Stock, the holders of Series A Shares will be entitled to
receive, out of the assets of the corporation legally available
therefor, a liquidation payment in cash per Series A Shares equal to
$2.00 (subject to equitable adjustment in the event of any stock
dividend, split, distribution or combination with respect to Series A
Shares). In addition to such amount, a further amount equal to the
dividends accumulated and unpaid thereon to the date of such
liquidation payment will also be paid. At any time prior to the making
of a liquidation payment, a holder of the Series A Shares may convert,
at the holder's option, the holder's Series A shares into shares of
Common Stock in accordance with the provisions set forth below. If upon
any liquidation or dissolution of the corporation, the assets available
for distribution are insufficient to pay the holders of all outstanding
Series A Shares such amount per Series A Share, the holders of Series A
Shares will share pro rata in any such distribution of assets.
(d) Redemption. Neither the holders of Series A Shares nor the
corporation will have the right to require the redemption of all or any
part of the outstanding Series A Shares.
(e) Conversion Right. At the option of the holder thereof,
each Series A Share will be convertible into a number of fully paid and
nonassessable shares (calculated as to each conversion to the nearest
1/100th of a share) of Common Stock of the corporation equal to the
number obtained by dividing $2.00 by the Conversion Price (determined
as hereinafter provided) in effect at the time of conversion. The
initial price at which shares of Common Stock will be delivered upon
conversion of a Series A Share (the "Conversion Price") will be $2.00
per share of Common Stock and, accordingly, the initial conversion rate
shall be one share of Common Stock for each Series A Share. The initial
Conversion Price will be subject to adjustment from time to time in
certain instances as hereinafter provided. The following provisions
will govern such right of conversion:
(1) Certificates. In order to convert Series A Shares
into shares of Common Stock of the Corporation, the holder
thereof will surrender at the office of the corporation (or at
such other office or offices, if any, as the Board of
Directors may designate), the certificate or certificates
therefor, duly endorsed to the corporation or in blank.
Further, the holder will give written notice to the
corporation at such office that such holder elects to convert
such shares. Series A Shares will be deemed to have been
converted immediately prior to the close of business on the
day of the surrender of such shares for conversion as herein
provided. The person entitled to receive the shares of Common
Stock of the corporation issuable upon such conversion will be
treated for all purposes as the record holder of such shares
of Common Stock at such time. As promptly as practicable on or
after the conversion date, the corporation will issue and
deliver, or cause to be issued and delivered, at such office a
certificate or certificates for the number of shares of Common
Stock of the corporation issuable upon such conversion.
(2) Adjustment to Conversion Price. The Conversion
Price will be subject to adjustment from time to time as
hereinafter provided. Upon each adjustment of the Conversion
Price each holder of Series A Shares will thereafter be
entitled to receive the number of shares of Common Stock of
the corporation obtained by dividing $2.00 by the Conversion
Price after the adjustment.
(3) Subdivision of Shares. In case the corporation at
any time subdivides its outstanding shares of Common Stock
into a greater number of shares, whether by stock split, stock
dividend or otherwise, the Conversion Price in effect
immediately prior to such Subdivision will be proportionately
reduced. Conversely, in case the outstanding shares of Common
Stock of the corporation are combined into a smaller number of
shares, whether by reverse stock split or otherwise, the
Conversion Price in effect immediately prior to such
combination will be proportionately increased.
(4) Reorganizations; Mergers; Etc. If any capital
reorganization or reclassification of the capital stock of the
corporation, or consolidation or merger of the corporation
with another corporation, or the sale of all or substantially
all of its assets to another corporation is effected in such a
way that holders of Common Stock are entitled to receive
stock, securities or assets with respect to or in exchange for
Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and
adequate provision will be made whereby the holders of Series
A Shares will thereafter have the right to receive (upon the
basis and the terms and conditions specified herein) upon the
conversion of Series A Shares, such shares of stock,
securities 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 such stock
immediately theretofore receivable upon the conversion of the
Series A Shares had such reorganization, reclassification,
consolidation, merger or sale not taken place. In any such
case, appropriate provisions will be made with respect to the
rights and interests of the holders of Series A Shares to the
end that the provisions hereof (including, without limitation,
provisions for adjustment of the Conversion Price and of the
number of shares receivable upon the conversion of Series A
Shares) are thereafter applicable, as nearly as may be in
relation to any shares of stock, securities or assets
thereafter receivable upon the conversion of Series A Shares.
The corporation will not effect any such consolidation, merger
or sale, unless prior to the consummation thereof the
successor corporation (if other than the corporation)
resulting from such consolidation or merger, or the
corporation purchasing such assets, assumes by written
instrument executed and mailed to the holders of Series A
Shares, at the last addresses of such holders appearing on the
books of the corporation, the obligation to deliver to such
holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such holder may be
entitled to receive.
(5) Adjustment Notices. Upon any adjustment of the
Conversion Price, then and in each case the corporation will
give written notice thereof, by first class mail, postage
prepaid, addressed to the holders of Series A Shares at the
addresses of such holders as shown on the books of the
corporation. Such notice will state the Conversion Price
resulting from such adjustment and the increase or decrease,
if any, in the number of shares receivable at such price upon
the conversion of Series A Shares. Such notice will set forth
in reasonable detail the method of calculation and the facts
upon which such calculation is based.
(6) Prior Notices of Certain Events. In case at
any time:
(A) the corporation shall pay any dividends
payable in stock upon its shares of Common Stock, or
makes any distribution other than cash distributions
to the holders of its shares of Common Stock;
(B) the corporation offers for subscription
pro rata to the holders of its Common Stock any
additional shares of stock of any class or other
rights;
(C) there if any capital reorganization, or
reclassification of the capital stock of the
corporation, or consolidation or merger of the
corporation with, or sale of all or substantially all
of its assets to, another corporation; or
(D) there is a voluntary or involuntary
dissolution, liquidation, or winding up of the
corporation;
then, in any one or more of such cases, the corporation will
give written notice, by first class mail, postage prepaid,
addressed to the holders of Series A Shares at the addresses
of such holders as shown on the books of the corporation, of
the date on which (i) the books of the corporation will close
or a record will be taken for such dividend, distribution or
subscription rights, or (ii) such reorganization,
reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up will take place, as the case may be.
Such notice will also specify the date as of which the holders
of Common Stock of record will participate in such dividend,
distribution or subscription rights, or will be entitled to
exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, or
winding up, as the case may be. Such written notice will be
given at least 20 days prior to the action in question and not
less than 20 days prior to the record date or the date on
which the corporation's transfer books are closed in respect
thereto. At any time prior to such date the holders of the
Series A Shares, at their option, may convert their Series A
Shares into shares of Common Stock in accordance with the
terms hereof.
(7) Common Stock. As used in this Section 3.4(e), the
term "Common Stock" means and includes the corporation's
presently authorized shares of Common Stock. The term "Common
Stock" also includes any capital stock of any class of the
corporation hereafter authorized which is not limited to a
fixed amount or percentage in respect of the rights of the
holders thereof to participate in dividends or in the
distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of the corporation;
provided that the shares receivable pursuant to conversion of
Series A Shares will include shares designated as Common Stock
of the corporation as of the date of issuance of such Series A
Shares.
(8) Fractional Shares. The corporation shall not be
required to issue fractional shares of Common Stock upon
conversion of the Series A Shares. If the corporation does not
issue fractional shares, the corporation will pay a cash
adjustment in respect of such fraction that would otherwise be
issuable in an amount equal to the same fraction of the Market
Price per share of Common Stock as of the close of business on
the day of conversion. As used in this Section (e), "Market
Price" means the average of the high and low prices of the
Common Stock sales on all exchanges on which the Common Stock
may at the time be listed. If there will have been no sales on
any such exchange on any such day, the Market Price means the
average of the bid and asked prices at the end of such day. If
the Common Stock is not so listed, the Market Price means the
average of the bid and asked prices at the end of the day in
the over-the-counter market, in each case averaged over a
period of 20 consecutive business days prior to the date as of
which Market Price is being determined. If at any time the
Common Stock is not listed on any exchange or quoted in the
over-the-counter market, the Market Price will be deemed to be
the higher of (i) the book value thereof as determined by any
firm of independent public accountants of recognized standing,
selected by the Board of Directors of the corporation as of
the last day of any month ending within 60 days preceding the
date as of which the determination is to be made; or (ii) the
fair value thereof determined in good faith by the Board of
Directors of the corporation as of a date which is within 15
days of the date as of which the determination is to be made.
(f) Mandatory Conversion. The Series A Shares may be converted
into shares of Common Stock of the corporation upon five days notice by
the Board of Directors of the corporation to the holders of the Series
A Shares at any time after the Common Stock of the corporation trades
in a public market for 20 consecutive trading days at an average of the
bid and asked prices greater than $4.00 per share. Each holder of the
former Series A Shares so converted will be entitled to receive the
full number of shares of Common Stock into which such Series A Shares
held by such holder would have been converted if such holder had
exercised such holder's conversion prior to the conversion and the
corporation shall forthwith issue and deliver to such holder the
certificate(s) therefor. Upon such conversion, each holder of Series A
Shares shall forthwith surrender such holder's certificate(s) for such
former Series A Shares.
ARTICLES OF MERGER
OF
BLACK HAWK HOLDINGS, INC.
(an Iowa corporation)
and
LIBERTY CAPITAL CORPORATION
(an Iowa corporation)
into
BHH, INC.
(a Minnesota corporation)
Pursuant to the provisions of Sections 302A.601-302A.651, Minnesota
Statutes, and Sections 496A.68-496A.74 of the Iowa Business Corporation Act, the
following Articles of Merger are executed on the date hereinafter set forth:
FIRST: The names of the corporations which are parties to the merger
are Black Hawk Holdings, Inc., an Iowa corporation ("Black Hawk"), Liberty
Capital Corp., an Iowa corporation ("LCC"), and BHH, Inc., a Minnesota
corporation and the surviving corporation ("BHH").
SECOND: Black Hawk has 8,543,095 outstanding common shares, 5,959,550
of which were voted in favor of the Plan of Merger attached hereto as Exhibit A
(the "Plan of Merger") and 7,470 of which were voted against the Plan of Merger.
THIRD: LCC has 4,000 outstanding Class A common shares, all of which
were voted in favor of the Plan of Merger; and LCC has 888.4 outstanding Class B
common shares, 804.7 of which were voted in favor of the Plan of Merger and none
of which were voted against the Plan of Merger.
FOURTH: BHH has 100 outstanding common shares, all of which were voted
in favor of the Plan of Merger.
FIFTH: The merger shall be effective at the time at which these
Articles of Merger are filed with the Secretary of State of the State of
Minnesota.
The undersigned swear that the foregoing is true and accurate and that
they have the authority to sign these Articles of Merger on behalf of Black
Hawk, LCC and BHH.
Dated: October 6, 1989.
BLACK HAWK HOLDINGS, INC.
By: /s/ Dobson West, President
And: /s/ David L. Schinke, Secretary
LIBERTY CAPITAL CORP.
By: /s/ Dobson West, President
And: /s/ David L. Schinke, Secretary
BHH, INC.
By: /s/ Dobson West, President and
Secretary
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
On this 6th day of October, 1989, before me, a Notary Public,
personally appeared Dobson West and David L. Schinke, known to me to be the
President and Secretary, respectively, of Black Hawk Holdings, Inc., an Iowa
corporation, and acknowledged to me that they executed the same on behalf of
said corporation.
(Notarial Seal) /s/ Robert K. Ranum
Notary Public
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
On this 6th day of October, 1989, before me, a Notary Public,
personally appeared Dobson West and David L. Schinke, known to me to be the
President and Secretary, respectively, of Liberty Capital Corp., an Iowa
corporation, and acknowledged to me that they executed the same on behalf of
said corporation.
(Notarial Seal) /s/ Robert K. Ranum
Notary Public
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
On this 6th day of October, 1989, before me, a Notary Public,
personally appeared Dobson West, known to me to be the President and Secretary
of BHH, Inc., a Minnesota corporation, and acknowledged to me that he executed
the same on behalf of said corporation.
(Notarial Seal) /s/ Robert K. Ranum
Notary Public
EXHIBIT A
PLAN OF MERGER
OF
BLACK HAWK HOLDINGS, INC.
(an Iowa corporation)
AND
LIBERTY CAPITAL CORP.
(an Iowa corporation)
INTO
BHH, INC.
(a Minnesota corporation)
ARTICLE I
NAMES OF CONSTITUENT CORPORATIONS
AND SURVIVING CORPORATION
The names of the corporations involved in this merger are Black Hawk
Holdings, Inc., an Iowa corporation ("Black Hawk"), Liberty Capital Corp., an
Iowa corporation ("LCC") and BHH, Inc., a Minnesota corporation ("BHH"). Black
Hawk, LCC and BHH together may be referred to herein as the "Constituent
Corporations." The Constituent Corporations shall be combined by the merger of
Black Hawk and LCC into BHH, as the Surviving Corporation, pursuant to the
provisions of Minnesota Statutes, Sections 302A.601-302A.651 and Iowa Statutes,
Sections 496A.68-496A.74. The Surviving Corporation shall continue under the
name Black Hawk Holdings, Inc.
ARTICLE II
TERMS AND CONDITIONS
1. The merger shall be effective on the filing of Articles of Merger
with the Secretary of State of the State of Minnesota (the "Effective Time"). At
the Effective Time, the separate existence of Black Hawk and LCC shall cease and
BHH shall alone continue in existence as the Surviving Corporation. All
transactions on and after the Effective Time shall be deemed transactions of and
for the account of BHH as the Surviving Corporation.
2. As of the Effective Time, BHH, as the Surviving Corporation, shall
succeed to and possess all the rights, privileges, powers, immunities,
franchises, concessions, certificates and authority, of a public as well as a
private nature, of each of the Constituent Corporations; and all property, real,
personal and mixed, and every interest therein, and all other choses in action
of or belonging to any of the Constituent Corporations on whatever account shall
be vested in BHH, as the Surviving Corporation, without any further act or deed;
and all property, assets, rights, privileges, powers, immunities, franchises,
concessions, certificates and authority shall be thereafter as effectively the
property of BHH, as the Surviving Corporation, as they were or would be of the
Constituent Corporations or any of them; and title to any real estate or any
interest therein vested by deed or otherwise in any of the Constituent
Corporations shall not revert or be in any way impaired by reason of this
merger.
3. BHH, as the Surviving Corporation, shall be responsible and liable
for all the debts, liabilities, duties and obligations of each of the
Constituent Corporations, and as of the Effective Time all such debts,
liabilities, duties and obligations shall attach to BHH, as the Surviving
Corporation, and may be enforced against it to the same extent as if such debts,
liabilities, duties and obligations had been originally incurred or contracted
by it; and any claim existing or action or proceeding pending by or against any
of the Constituent Corporations may be prosecuted to judgment as if the merger
had not taken place; or BHH, as the Surviving Corporation, may be substituted in
its place; and neither the rights of creditors nor any liens upon property of
any of the Constituent Corporations shall be impaired by the merger.
4. If at any time after the Effective Time the Surviving Corporation
shall consider or be advised that any instruments of further assurance are
desirable in order to evidence the vesting in it of the title of any of the
Constituent Corporations to any of the property rights of the Constituent
Corporations, the appropriate officers or directors of Black Haw, LCC or BHH are
hereby authorized to execute, acknowledge and deliver all such instruments of
further assurance and to do all acts or things, in the name of Black Hawk, LCC
or BHH, as may be requisite or desirable to carry out the provisions of this
Plan of Merger.
5. The Board of Directors of the Surviving Corporation shall consist of
the persons serving as directors of Black Hawk immediately prior to the
Effective Time. Such directors shall hold office, subject to the applicable
provisions of the Bylaws of the Surviving Corporation, until the expiration of
the term for which such director was elected and until such director's successor
shall have been duly elected and qualified.
6. The officers of Black Hawk immediately prior to the Effective Time
shall be the officers of the Surviving Corporation until their respective
successors shall have been duly elected and qualified.
7. The Articles of Incorporation and Bylaws of BHH in effect at the
Effective Time shall constitute the Articles of Incorporation and Bylaws of the
Surviving Corporation, except that Section 1.1 shall be amended in its entirety
to read as follows:
"1.1) The name of the corporation shall be Black Hawk Holdings, Inc."
ARTICLE III
MANNER AND BASIS OF CONVERTING STOCK
1. Each share of Common Stock of Black Hawk outstanding immediately
prior to the Effective Time shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into One (1) share of
Common Stock of BHH.
2. Each share of Class A Common Stock of LCC outstanding immediately
prior to the Effective Time (other than shares owned of record by Black Hawk)
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into One Hundred Fifty (150) shares of Common Stock of
BHH. The shares of Class A Common Stock of LCC outstanding immediately prior to
the Effective Time which are owned of record by Black Hawk shall not be
converted into shares of BHH but shall, as of the Effective Time, be cancelled,
extinguished and cease to exist without the payment of any cash or the delivery
of any other consideration.
3. Each share of Class B Common Stock of LCC outstanding immediately
prior to the Effective Time shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into One Hundred Fifty
(150) shares of Common Stock of BHH.
4. The shares of Common Stock of BHH outstanding immediately prior to
the Effective Time shall, as of the Effective Time, be cancelled, extinguished
and cease to exist and the holder of such shares shall receive One Hundred
Dollars ($100) for such shares.
ARTICLES OF INCORPORATION
OF
BHH, INC.
The undersigned individual, being of full age, for the purpose of
forming a corporation under and pursuant to Chapter 302A of the Minnesota
Statutes, as amended, hereby adopts the following Articles of Incorporation.
ARTICLE 1 - NAME
1.1) The name of the corporation shall be BHH, Inc.
ARTICLE 2 - REGISTERED OFFICE
2.1) The registered office of the corporation is located at 1010 First
Bank Place West, 120 South Sixth Street, Minneapolis, Minnesota 55402.
ARTICLE 3 - CAPITAL STOCK
3.1) Authorized Shares; Establishment of Classes and Series. The
aggregate number of shares the corporation has authority to issue shall be
50,000,000 shares, which shall have a par value of $.01 per share solely for the
purpose of a statute or regulation imposing a tax or fee based upon the
capitalization of the corporation, and which shall consist of 30,000,000 common
shares and 20,000,000 undesignated shares. The Board of Directors of the
corporation is authorized to establish from the undesignated shares, by
resolution adopted and filed in the manner provided by law, one or more classes
or series of shares, to designate each such class or series (which may include
but is not limited to designation as additional common shares), and to fix the
relative rights and preferences of each such class or series.
3.2) Issuance of Shares. The Board of Directors of the corporation is
authorized from time to time to accept subscriptions for, issue, sell and
deliver shares of any class or series of the corporation to such persons, at
such times and upon such terms and conditions as the Board shall determine,
valuing all nonmonetary consideration and establishing a price in money or other
consideration, or a minimum price, or a general formula or method by which the
price will be determined.
3.3) Issuance of Rights to Purchase Shares. The Board of Directors is
further authorized from time to time to grant and issue rights to subscribe for,
purchase, exchange securities for, or convert securities into, shares of the
corporation of any class or series, and to fix the terms, provisions and
conditions of such rights, including the exchange or conversion basis or the
price at which such shares may be purchased or subscribed for.
3.4) Issuance of Shares to Holders of Another Class or Series. The
Board is further authorized to issue shares of one class or series to holders of
that class or series or to holders of another class or series to effectuate
share dividends or splits.
ARTICLE 4 - RIGHTS OF SHAREHOLDERS
4.1) No Preemptive Rights. No shares of any class or series of the
corporation shall entitle the holders to any preemptive rights to subscribe for
or purchase additional shares of that class or series or any other class or
series of the corporation now or hereafter authorized or issued.
4.2) No Cumulative Voting Rights. There shall be no cumulative voting
by the shareholders of the corporation.
ARTICLE 5 - DIRECTORS
5.1) Written Action by Directors. Any action required or permitted to
be taken at a Board meeting may be taken by written action signed by all of the
directors.
ARTICLE 6 - MERGER, EXCHANGE, SALE OF ASSETS AND DISSOLUTION
6.1) Where approval of shareholders is required by law, the affirmative
vote of the holders of at least a majority of the voting power of all shares
entitled to vote shall be required to authorize the corporation (i) to merge
into or with one or more other corporations, (ii) to exchange its shares for
shares of one or more other corporations, (iii) to sell, lease, transfer or
otherwise dispose of all or substantially all of its property and assets,
including its good will, or (iv) to commence voluntary dissolution.
ARTICLE 7 - AMENDMENT OF ARTICLES OF INCORPORATION
7.1) After the issuance of shares by the corporation, any provision
contained in these Articles of Incorporation may be amended, altered, changed or
repealed by the affirmative vote of the holders of at least a majority of the
voting power of the shares present and entitled to vote at a duly held meeting
or such greater percentage as may be otherwise prescribed by the laws of the
State of Minnesota.
ARTICLE 8 - LIMITATION OF DIRECTOR LIABILITY
8.1) To the fullest extent permitted by Chapter 302A, Minnesota
Statutes, as the same exists or may hereafter be amended, a director of this
corporation shall not be personally liable to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director.
ARTICLE 9 - INCORPORATOR
9.1) The name and mailing address of the incorporator are as follows:
Dobson West
1100 International Centre
900 Second Avenue South
Minneapolis, Minnesota 55042
IN WITNESS WHEREOF, the undersigned incorporator has hereunto set his
hand this 23rd day of June, 1989.
/s/ Dobson West