EX 3.1
TURBOCHEF TECHNOLOGIES, INC.
----------
CERTIFICATE OF DESIGNATION
OF
SERIES C CONVERTIBLE
PREFERRED STOCK
(Pursuant to Section 151 of the Delaware General
Corporation Law)
----------
The undersigned, the authorized officer of TurboChef Technologies, Inc., a
Delaware corporation (the "Corporation"), in accordance with the provisions of
Section 103 of the Delaware General Corporation Law (the "DGCL") does hereby
certify that, in accordance with Section 141 of the DGCL, the following
resolution was duly adopted by the Board of Directors of the Corporation on
April 20, 2001:
RESOLVED, that the Board of Directors, pursuant to authority expressly
vested in it by the provisions of the Certificate of Incorporation of the
Corporation, hereby authorizes the issuance of a series of Preferred Stock, par
value $1.00 per share, of the Corporation, and hereby fixes the designation,
preferences, rights and the qualifications, limitations and restrictions
thereof, in addition to those set forth in the Certificate of Incorporation of
the Corporation, as follows:
SERIES C CONVERTIBLE
PREFERRED STOCK
Section 1. Designation and Amount: Stated Capital. The shares of such
--------------------------------------
series shall be designated as "Series C Convertible Preferred Stock" (the
"Series C Convertible Preferred Stock"), the par value thereof shall be $1.00
per share and the number of shares constituting the Series C Convertible
Preferred Stock shall be 10,000. The amount to be represented in stated capital
at all times for each share of Series C Convertible Preferred Stock shall be
$1.00.
Section 2. Rank. With respect to dividend rights and rights on liquidation,
----
winding-up and dissolution, the Series C Convertible Preferred Stock will rank:
(i) senior to: (A) the common stock, par value $.01 per share (the "Common
Stock") of the Corporation; (B) all other classes of common stock of the
Corporation; (C) the Series A convertible preferred stock, par value $1.00 per
share (the "Series A Preferred Stock), and (D) each other class or series of
preferred stock of the Corporation now or hereafter established by the Board of
Directors (the "Board of Directors" or the "Board") of the Corporation, the
terms of which do not expressly
provide that it ranks senior to, or on a parity with, the Series C Convertible
Preferred Stock as to dividend and redemption rights and rights on liquidation,
winding-up and dissolution of the Corporation (collectively referred to as
"Junior Stock"); (ii) on a parity with the Series B Convertible Preferred Stock
of the Corporation and each other class or series of preferred stock of the
Corporation established hereafter by the Board of Directors, the terms of which
expressly provide that such class or series will rank on a parity with the
Series C Convertible Preferred Stock as to dividend and redemption rights and
rights on liquidation, winding-up and dissolution (collectively referred to as
"Parity Stock"); and (iii) junior to each class or series of preferred stock of
the Corporation established hereafter by the Board, the terms of which class or
series expressly provide that such class or series will rank senior to the
Series C Convertible Preferred Stock as to dividend and redemption rights or
rights on liquidation, winding-up and dissolution of the Corporation
(collectively referred to as "Senior Stock").
Section 3. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series C Convertible Preferred Stock shall be
entitled to receive dividends at the rate of $8.00 per share of the Series C
Convertible Preferred Stock per annum, and no more, payable, at the option of
the Company, in cash or shares of Common Stock.
(b) Dividends shall accrue and be payable semi-annually, in arrears, on the
20th day of April and October in each year, beginning October 2001 (each, a
"Dividend Payment Date") with the first dividend payment to be prorated to take
into account the actual date of issuance (August 8, 2001)of the Series C
Convertible Preferred Stock. The Board of Directors may fix a record date for
the determination of holders of shares of Series C Convertible Preferred Stock
entitled to receive a payment of a dividend declared thereon, which record date
shall be no more than sixty days prior to the date fixed for the payment
thereof.
(c) In the event that the Corporation elects to make a dividend payment in
shares of Common Stock, the number of shares of Common Stock issuable as payment
of such dividend shall be determined by dividing the total amount of dividends
due by the "Fair Market Value" of the Common Stock. For purposes of this Section
3 (c) "Fair Market Value" shall mean the average of the closing sales price (or
closing bid price if no sales prices are reported on any given day) of the
Common Stock as reported on Nasdaq (or such other exchange or quotation medium
on which the Common Stock is then traded) for the ten (10) day trading period
immediately preceding the record date for such dividend, or the Dividend Payment
Date if no record date shall have been established. If the Common Stock is not
quoted on Nasdaq, an exchange or other quotation medium, Fair Market Value shall
be determined by the Board of Directors of the Corporation. In the event of
payment of interest in shares of Common stock no fractional shares shall be
issued but cash shall be paid in lieu of the issuance of the fractional share
based upon the Fair Market Value of such fractional shares.
Section 4. Liquidation Preference. In the event of a liquidation,
----------------------
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of Series C Convertible Preferred Stock shall be entitled to receive
out of the assets of the Corporation,
-2-
whether such assets constitute stated capital or surplus of any nature, a sum in
cash equal to $100.00 per share (the "Liquidation Preference"), together with an
amount equal to the dividends accrued and unpaid thereon (whether or not
declared) to the date of final distribution to such holders, without interest,
and no more, before any payment shall be made or any assets distributed to the
holders of any Junior Stock; provided, however, that such rights shall accrue to
the holders of Series C Convertible Preferred Stock only if the Corporation's
payments with respect to the liquidation preference of the holders of Senior
Stock are fully met. After the liquidation preferences of the Senior Stock are
fully met, the entire assets of the Corporation available, for distribution
shall be distributed ratably among the holders of the Series C Convertible
Preferred Stock and any Parity Stock in proportion to the respective
preferential amounts to which each is entitled (but only to the extent of such
preferential amounts). After payment in full of the accrued and unpaid dividends
and the Liquidation Preference of the shares of Series C Convertible Preferred
Stock as provided in this Section 4, the holders of such shares shall not be
entitled to any further participation in any distribution of assets by the
Corporation. Neither a consolidation or merger of the Corporation with another
corporation nor a sale or transfer of all or part of the Corporation's assets
for cash, securities or other property will be considered a liquidation,
dissolution or winding up of the Corporation.
Section 5. No Sinking Fund.
---------------
The shares of Series C Convertible Preferred Stock shall not be subject to
the operation of a purchase, retirement or sinking fund.
Section 6. Conversion.
----------
(a) Each holder of the Series C Convertible Preferred Stock shall have the
right to convert the Series C Convertible Preferred Stock, at any time, from
time to time, in whole or in part into shares of Common Stock in accordance with
this Section 6. Each share of Series C Convertible Preferred Stock shall be
convertible at the Corporation's office into that number of fully paid and
nonassessable shares of Common Stock (calculated as to each conversion to the
nearest 1/100th of a share) as shall be equal to the Conversion Rate (as
hereinafter defined), in effect at the time of conversion. The "Conversion Rate"
shall be equal to a fraction, (i) the numerator of which is equal to the
Liquidation Preference plus accrued and unpaid dividends through the Conversion
Date and (ii) the denominator is $1.26.
(b) The right of the holders of Series C Convertible Preferred Stock to
convert their shares shall be exercised by surrendering for such purposes to the
Corporation or its agent, as provided above, certificates representing the
shares of Series C Convertible Preferred Stock to be converted, duly endorsed in
blank or accompanied by proper instruments of transfer and a notice of
conversion. The Corporation shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery
upon conversion of shares of Common Stock or other securities or property in a
name other than that of the holder of the shares of the Series C Convertible
Preferred Stock being converted, and the Corporation shall not be required to
issue or deliver any such shares or other securities or property unless and
until the person or persons requesting the issuance thereof shall have paid to
the Corporation the amount
-3-
of any such tax or shall have established to the satisfaction of the Corporation
that such tax has been paid.
(c) The Corporation (and any successor corporation) shall take all action
necessary so that a number of shares of the authorized but unissued Common Stock
(or common stock in the case of any successor corporation) sufficient to provide
for the conversion of the Series C Convertible Preferred Stock outstanding upon
the basis hereinbefore provided are at all times reserved by the Corporation (or
any successor corporation), free from preemptive rights, for such conversion,
subject to the provisions of Section 6(d). If the Corporation shall issue any
securities or make any change in its capital structure which would change the
number of shares of Common Stock into which each share of the Series C
Convertible Preferred Stock shall be convertible as herein provided, the
Corporation shall at the same time also make proper provision so that thereafter
there shall be a sufficient number of shares of Common Stock authorized and
reserved, free from preemptive rights, for conversion of the outstanding Series
C Convertible Preferred Stock on the new basis.
(d) In case of any consolidation or merger of the Corporation with any
other corporation or in case of any sale or transfer of all or substantially all
of the assets of the Corporation, or in the case of any share exchange, in each
case pursuant to which all of the outstanding shares of Common Stock are
converted into other securities, cash or other property, the Corporation shall
make appropriate provision or cause appropriate provision to be made so that
each holder of shares of Series C Convertible Preferred Stock then outstanding
shall have the right thereafter (in lieu of the right to convert into Common
Stock, which right shall cease) to convert such shares of Series C Convertible
Preferred Stock into the kind and amount of securities, cash or other property
receivable upon such consolidation, merger, sale, transfer or share exchange by
a holder of the number of shares of Common Stock into which such shares of
Series C Convertible Preferred Stock could have been converted immediately prior
to the effective date of such consolidation, merger, sale, transfer or share
exchange. If, in connection with any such consolidation, merger, sale, transfer
or share exchange, each holder of shares of Common Stock is entitled to elect to
receive either securities, cash or other property upon completion of such
transaction, the Corporation shall provide or cause to be provided each holder
of Series C Convertible Preferred Stock the right to elect the securities, cash
(other than by the exercise of appraisal rights) or other property into which
the Series C Convertible Preferred Stock held by such holder shall be
convertible after completion of any such transaction on the same terms and
subject to the same conditions applicable to holders of the Common Stock
(including, without limitation, notice of the right to elect, limitations on the
period in which such election shall be made and the effect of failing to
exercise the election). The Corporation shall not effect any such transaction
unless the provisions of this Section 6(d) have been complied with. The above
provisions shall similarly apply to successive consolidations, mergers, sales,
transfers or share exchanges.
(e) Upon the surrender of certificates representing shares of Series C
Convertible Preferred Stock, the person converting shall be deemed to be the
holder of record of the Common Stock issuable upon such conversion, and all
rights with respect to the shares
-4-
surrendered shall forthwith terminate except the right to receive the Common
Stock or other securities, cash or other property as herein provided.
(f) No fractional shares of Common Stock shall be issued upon conversion of
Series C Convertible Preferred Stock but, in lieu of any fraction of a share of
Common Stock which would otherwise be issuable in respect of the aggregate
number of such shares surrendered for conversion at one time by the same holder,
the Corporation shall pay in cash an amount equal to the product of (i) the Fair
Market Value and (ii) such fraction of a share.
(g) The Conversion Rate shall be adjusted from time to time under certain
circumstances in case the Corporation shall (i) pay a dividend or make a
distribution on its Common Stock in shares of its capital stock, (ii) subdivide
its outstanding Common Stock into a greater number of shares, (iii) combine the
shares of its outstanding Common Stock into a smaller number of shares, or (iv)
issue by reclassification of its Common Stock any shares of its capital stock,
then in each such case the Conversion Rate in effect immediately prior thereto
shall be proportionately adjusted so that the holder of any Series C Convertible
Preferred Stock there-after surrendered for conversion shall be entitled to
receive, to the extent permitted by applicable law, the number and kind of
shares of capital stock of the Corporation which it would have owned or have
been entitled to receive after the happening of such event had such Series C
Convertible Preferred Stock been converted immediately prior to the record date
for such event (or if no record date has been established in connection with
such event, the effective date for such action). An adjustment pursuant to this
Section 6(g) shall become effective immediately after the record date in the
case of a stock dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination, or
reclassification. All calculations hereunder shall be made to the nearest cent
or to the nearest 1/100 of a share, as the case may be.
(h) If at any time as a result of an adjustment made pursuant to Section
6(g), the holder of any Series C Convertible Preferred Stock thereafter
surrendered for conversion shall become entitled to receive securities, cash, or
assets other than Common Stock, the number or amount of such securities or
property so receivable upon conversion shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in Section 6(g) above.
(i) Except as otherwise provided above in this Section 6, no adjustment in
the Conversion Rate shall be made in respect of any conversion for share
distributions or dividends theretofore declared and paid or payable on the
Common Stock.
(j) Whenever the Conversion Rate is adjusted, the Corporation will give
notice by mail to the holders of record of Series C Convertible Preferred Stock,
which notice shall be made within 45 days after the effective date of such
adjustment and shall state the adjustment and the Conversion Rate.
Notwithstanding the foregoing notice provisions, failure by the Corporation to
give such notice or a defect in such notice shall not affect the binding nature
of such corporate action of the Corporation.
-5-
(k) Whenever the Corporation shall propose to take any of the actions
specified in Section 6(d) or in Section 6(g) which would result in any
adjustment in the Conversion Rate under this Section 6, the Corporation shall
use its best efforts to cause a notice to be mailed at least 10 days prior to
the date on which the books of the Corporation will close or on which a record
will be taken for such action, to the holders of record of the outstanding
Series C Convertible Preferred Stock on the date of such notice. Such notice
shall specify the action proposed to be taken by the Corporation and the date as
of which holders of record of the Common Stock shall participate in any such
actions or be entitled to exchange their Common Stock for securities or other
property, as the case may be. Failure by the Corporation to mail the notice or
any defect in such notice shall not affect the validity of the transaction.
Section 7. Voting Rights.
-------------
(a) The holders of Series C Convertible Preferred Stock will not have any
voting rights except as set forth in this Section 7 or as otherwise from time to
time required by law.
(b) The affirmative vote or consent of the holders of at least a majority
of the outstanding shares of the Series C Convertible Preferred Stock, voting
separately as a class, will be required for any amendment, alteration or repeal
of this Certificate of Designation, if such amendment, alteration or repeal
materially and adversely affects the rights, preferences or privileges of the
Series C Convertible Preferred Stock. The creation, authorization or issuance of
any series or shares of any Senior Stock, Parity Stock or Junior Stock or the
increase or decrease in the amount of authorized capital stock of any class,
including preferred stock, shall not require the consent of holders of the
Series C Convertible Preferred Stock and shall not be deemed to affect adversely
the rights, preference or privileges of shares of Series C Convertible Preferred
Stock. Such right of the holders of Series C Convertible Preferred Stock to vote
as hereinabove provided may be exercised at any annual meeting or at any special
meeting called for such purpose as hereinafter provided or at any adjournment
thereof.
(c) In any case in which the holders of Series C Convertible Preferred
Stock shall be entitled to vote pursuant to this Section 7 or pursuant to
Delaware law, each holder of Series C Convertible Preferred Stock entitled to
vote with respect to such matters shall be entitled to one vote for each share
of Series C Convertible Preferred Stock held.
Section 8. Residual Rights. All rights accruing to the outstanding shares
---------------
of the Corporation not expressly provided for to the contrary herein shall be
vested in the Common Stock.
Section 9. Preemptive Rights. The holders of the Series C Preferred Stock
-----------------
are not entitled to any preemptive rights.
Section 10. Outstanding Shares. All shares of Series C Convertible
------------------
Preferred Stock shall be deemed outstanding except: (i) from the date of
surrender of certificates representing shares of Series C Convertible Preferred
Stock for conversion into Common Stock,
-6-
all shares of Series C Convertible Preferred Stock converted into Common Stock;
and (ii) from the date of registration of transfer, all shares of Series C
Convertible Preferred Stock held of record by the Corporation or any subsidiary
of the Corporation.
IN WITNESS WHEREOF, TurboChef Technologies, Inc. has caused this
certificate to be signed by John C. Shortley, its Treasurer this 7th day of
August 2001.
TURBOCHEF TECHNOLOGIES, INC.
By: /s/ John C. Shortley
------------------------
John C. Shortley
Treasurer
-7-