EXHIBIT 99.1
H.E.R.C. PRODUCTS INCORPORATED
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND OTHER RIGHTS AND QUALIFICATIONS OF
CLASS A PREFERRED STOCK
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Pursuant to Section 151 of the
Delaware General Corporation Law
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H.E.R.C. PRODUCTS INCORPORATED, a corporation organized and existing under
the Business Corporation Law of the State of Delaware ("Corporation") ,
DOES HEREBY CERTIFY:
FIRST: That, pursuant to authority conferred upon the Board of
Directors of the Corporation ("Board") by the amended Certificate of
Incorporation of said Corporation, and pursuant to the provisions of Section 151
of the Delaware General Corporation Law, said Board duly determined that 150,000
shares of Preferred Stock, $.01 par value per share, shall be designated "Class
A Preferred Stock," and to that end the Board adopted a resolution providing for
the designation, preferences and relative, participating, optional or other
rights, and the qualifications, limitations and restrictions, of the Class A
Preferred Stock, which resolution is as follows:
RESOLVED, that the Board, pursuant to the authority vested in
it by the provisions of the Certificate of Incorporation of the
Corporation, as amended, hereby creates a series of Preferred Stock of
the corporation, par value $.01 per share, to be designated as "Class A
Preferred Stock" and to consist of an aggregate of 150,000 shares. The
Class A Preferred Stock shall have such designations, preferences and
relative, participating, optional or other rights, and the
qualifications, limitations and restrictions as follows:
1. Designations and Amount. 150,000 shares of the Preferred Stock of the
Corporation, par value $ .01 per share, shall constitute a class of Preferred
Stock designated as "Class A Preferred Stock" ("Class A Preferred Stock"). The
Class A Preferred Stock shall have a stated value of $10.00 per share ("Stated
Value").
2. Redemption Rights. The Class A Preferred Stock shall not be subject to
any right of redemption by the Corporation or by the holder thereof.
3. Dividends. The holders of shares of Class A Preferred Stock shall be
entitled to receive dividends at the rate of 10% per annum of Stated Value (or
$1.00 per share) of the Class A Preferred Stock ("Preferred Dividend") from the
date of issuance through the Conversion Date (as defined below), payable solely
in shares of Common Stock of the Company on the next business day after the
Conversion Date, such number of shares of Common Stock to be calculated in
accordance with paragraph 6(b) hereof.
4. Rights on Liquidation, Dissolution or Winding Up, Etc. In the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, as a result of which the assets of the Corporation, whether from
capital, surplus or earnings, shall be distributed to the stockholders of the
Company, such assets shall be distributed simultaneously to both the holders of
the Common Stock and the holders of the Class A Preferred Stock,
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calculated as if the Class A Preferred Stock (together with Preferred Dividends
through the record date for such distribution) was fully converted immediately
prior to such distribution.
5. Voting Rights. The holders of Class A Preferred Stock shall not be
entitled to vote on any matter, except as may be required by law.
6. Conversion of Class A Preferred Stock.
(a) The holders of Class A Preferred Stock shall have the
right, at such holders' option, at any time or from time to time, to convert
each share of Class A Preferred Stock, together with the accrued Preferred
Dividends thereon through the Conversion Date, into the number of shares of
Common Stock calculated in accordance with paragraph 6(b) below.
(b) The number of shares of Common Stock to be issued upon
conversion of the Class A Preferred Stock and payment of the Preferred Dividend
will be determined by dividing the Stated Value of the Class A Preferred Stock
being converted, plus the Preferred Dividends thereon through the Conversion
Date, by the greater of (i) 75% of the average Closing Bid Price (as hereinafter
defined) of the Common Stock for the five consecutive trading days ending
immediately prior to the date of the Written Notice (as hereinafter defined) or
(ii) $.10. Notwithstanding the foregoing, if the Common Stock issuable by the
Corporation upon conversion of the Class A Preferred Stock and payment of the
Preferred Dividend is not registered with the Securities and Exchange Commission
for resale by the holder thereof on or before the close of business on April 15,
1997, the aforementioned rate of 75% shall be reduced to 72.5%. The "Closing Bid
Price" shall mean the closing bid price for the Corporation's Common Stock, as
reported by The Nasdaq Stock Market if the Common Stock is quoted on the Nasdaq
National Market or Nasdaq SmallCap Market, or the last sales price of the Common
Stock if the Common Stock is listed on a national securities exchange, whichever
is the principal trading market for the Common Stock. If the Common Stock is not
listed on a national securities exchange or quoted on the Nasdaq National Market
or Nasdaq SmallCap Market, but is traded in the over-the-counter market, the
Closing Bid Price shall mean the closing bid price for the Common Stock, as
reported by the OTC Bulletin Board or the National Quotation Bureau,
Incorporated, or similar publisher of such quotations. If the Closing Bid Price
cannot be determined pursuant to the above, the Closing Bid Price shall be such
price as the Board of Directors of the Company shall determine in good faith.
(c) Before any holder of Class A Preferred Stock shall be
entitled to convert the same into shares of Common Stock, such holder shall give
written notice ("Written Notice") 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 Written Notice must be delivered via telecopier prior to 3:00
p.m. EST on any day and shall be deemed to be received by the Corporation upon
receipt by it or by its general counsel. The Corporation shall, as soon as
practicable, but not later than one business day thereafter, issue and deliver
to a location in New York City designated by such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled as aforesaid. Simultaneously with such delivery, such holder shall
surrender the certificate or certificates for the Class A Preferred Stock duly
endorsed for transfer. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date which the Written Notice
is received by the Corporation in accordance herewith ("Conversion Date"), and
the person or persons 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 Conversion Date.
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(d) The Corporation shall not be required to issue fractions
of shares of Common Stock upon conversion of the Class A Preferred Stock or
payment of the Preferred Dividend. If any fractions of a share would, but for
this Section, be issuable upon any conversion of Class A Preferred Stock or
payment of the Preferred Stock, in lieu of such fractional share the Company
shall round up or down to the nearest whole number of shares.
(e) The Corporation shall reserve and shall at all times have
reserved out of its authorized but unissued shares of Common Stock sufficient
shares of Common Stock to permit the conversion of the then outstanding shares
of the Class A Preferred Stock and payment of the Preferred Dividend pursuant to
this Section 6. All shares of Common Stock which may be issued upon conversion
of shares of the Class A Preferred Stock and payment of the Preferred Dividend
pursuant to this Section 6 shall be validly issued, fully paid and
nonassessable. In order that the Corporation may issue shares of Common Stock
upon conversion of shares of the Class A Preferred Stock and payment of the
Preferred Dividend, the Corporation will endeavor to comply with all applicable
Federal and state securities laws and will endeavor to list such shares of
Common Stock to be issued upon conversion on each securities exchange on which
Common Stock is listed and endeavor to maintain such listing for such period of
time as either the Class A Preferred Stock or Common Stock underlying such Class
A Preferred Stock remains outstanding.
(f) If any of the following shall occur: (i) any
reclassification or change of outstanding shares of Common Stock issuable upon
conversion of shares of the Class A Preferred Stock (other than a change in par
value, or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination), or (ii) any consolidation or
merger to which the Corporation is a party other than a merger in which the
Corporation is the continuing corporation and which does not result in any
reclassification of, or change in, outstanding shares of Common Stock, then in
addition to all of the rights granted to the holders of the Class A Preferred
Stock as designated herein, the Corporation, or such successor or purchasing
corporation, as the case may be, shall, as a condition precedent to such
reclassification, change, consolidation or merger ("Corporate Change"), provide
in its certificate of incorporation or other charter document that each share of
the Class A Preferred Stock shall be convertible into the kind and amount of
shares of capital stock and other securities and property (including cash)
receivable upon such Corporate Change by a holder of the number of shares of
Common Stock deliverable upon conversion of such share of the Class A Preferred
Stock and the payment of the Preferred Dividend thereon immediately prior to the
Corporate Change. If, in the case of any such Corporate Change, the stock or
other securities and property (including cash) receivable thereupon by a holder
of Common Stock includes shares of capital stock or other securities and
property of a corporation other than the corporation which is the successor of
the Corporation in such Corporate Change, then the certificate of incorporation
or other charter document of such other corporation shall contain such
additional provisions to protect the interests of the holders of shares of the
Class A Preferred Stock as the Board of Directors shall reasonably consider
necessary by reason of the foregoing. The provision of this Section 6(f) shall
similarly apply to successive reclassifications, changes, consolidations or
mergers.
(g) If any Class A Preferred Stock is issued and outstanding
on November __, 1999, such Class A Preferred Stock and the Preferred Dividend
thereon shall, without any action on the part of the holder thereof, be
automatically converted into Common Stock on that date on the above terms.
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(h) In the event any shares of Class A Preferred Stock shall
be converted pursuant to Section 6 hereof, the shares of Class A Preferred Stock
so converted shall be canceled.
(i) The Corporation will not, by amendment of its Certificate
of Incorporation or through any reorganization, 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 the provisions of this
Section 6 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
Class A Preferred Stock against impairment.
Such resolution was signed by the President and Assistant Secretary of
the Corporation.
IN WITNESS WHEREOF, we have executed this Certificate of Designation
this 21st day of November, 1996.
H.E.R.C. PRODUCTS INCORPORATED
By: /s/ Gary S. Glatter
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Gary S. Glatter, President
By: /s/ Kristi A. Cordray
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Kristi A. Cordray, Assistant Secretary
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H.E.R.C. PRODUCTS INCORPORATED
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND OTHER RIGHTS AND QUALIFICATIONS OF
CLASS A PREFERRED STOCK
----------------------------------
Pursuant to Section 151 of the
Delaware General Corporation Law
----------------------------------
H.E.R.C. PRODUCTS INCORPORATED, a corporation organized and existing under
the General Corporation Law of the State of Delaware ("Corporation"),
DOES HEREBY CERTIFY:
FIRST: That, pursuant to authority conferred upon the Board of
Directors of the Corporation ("Board") by the amended Certificate of
Incorporation of said Corporation, and pursuant to the provisions of Section 151
of the Delaware General Corporation Law, said Board duly determined that the
number of shares of Preferred Stock, $.01 par value per share, shall be
increased from 150,000 shares to 185,000 shares, and to that end the Board
adopted a resolution, which resolution is as follows:
RESOLVED, that the Board, pursuant to the authority vested in
it by the provisions of the Certificate of Incorporation of the
Corporation, as amended, hereby increases the number of shares of Class
A Preferred Stock of the Corporation, par value $.01 per share,
designated as Class A Preferred Stock from 150,000 shares to 185,000
shares.
Such resolution was signed by the President and Assistant Secretary of
the Corporation.
IN WITNESS WHEREOF, we have executed this Certificate of Designation
this 6th day of December, 1996.
H.E.R.C. PRODUCTS INCORPORATED
By: /s/ Gary S. Glatter
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Gary S. Glatter, President
By: /s/ Kristi A. Cordray
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Kristi A. Cordray, Assistant Secretary
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H.E.R.C. PRODUCTS INCORPORATED
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND OTHER RIGHTS AND QUALIFICATIONS OF
CLASS A PREFERRED STOCK
----------------------------------
Pursuant to Section 151 of the
Delaware General Corporation Law
----------------------------------
H.E.R.C. PRODUCTS INCORPORATED, a corporation organized and existing under
the General Corporation Law of the State of Delaware ("Corporation"),
DOES HEREBY CERTIFY:
FIRST: That, pursuant to authority conferred upon the Board of
Directors of the Corporation ("Board") by the amended Certificate of
Incorporation of said Corporation, and pursuant to the provisions of Section 151
of the Delaware General Corporation Law, said Board duly determined that the
mandatory conversion date of the Class A Preferred Stock, $.01 par value per
share, specified in Section 6(g) of the Certificate of Designations, Preferences
and Other Rights and Qualifications of the Class A Preferred Stock shall be
December 17, 1999, and to that end the Board adopted a resolution, which
resolution is as follows:
RESOLVED, that the Board, pursuant to the authority vested in
it by the provisions of the Certificate of Incorporation of the
Corporation, as amended, hereby designates that the mandatory
conversion date of the Class A Preferred Stock, par value $.01 per
share, specified in Section 6(g) of the Certificate of Designations,
Preferences and Other Rights and Qualifications of the Class A
Preferred Stock shall be the third anniversary of the Final Closing
Date.
Such resolution was signed by the President and Assistant Secretary of
the Corporation.
IN WITNESS WHEREOF, we have executed this Certificate of Designation
this 17th day of December, 1996.
H.E.R.C. PRODUCTS INCORPORATED
By: /s/ Gary S. Glatter
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Gary S. Glatter, President
By: /s/ Kristi A. Cordray
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Kristi A. Cordray, Assistant Secretary
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