SCHEDULE 14C
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934 (Amendment No. )
Check Appropriate Box:
[ X ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14c-5(d)(2)
[ ] Definitive Information Statement
THE TODD-AO CORPORATION
(Name of Registrant as Specified In Charter)
Payment of Filing Fee:
[ X ] $125 per Exchange Act Rule 0-11(c)(11)(ii), or 14c-5(g)
[ ] Fee computed on table below per Exchange Act Rules
14c-5(g) and 0-11.
1. Title of each class of securities to which transaction
applies:
2. Aggregate number of securities to which transaction
applies:
3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined):
4. Proposed maximum aggregate value of transaction: N/A
5. Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11()a)(2) and identify the
filing for which the offsetting fee was paid
previously. Identify the previous filing by
registration statement number, or the Form or Schedule
and the date of its filing.
1. Amount Previously Paid: N/A
2. Form, Schedule or Registration Statement No.: N/A
3. Filing Party: N/A
4. Dated Filed: N/A
Page 1
THE TODD-AO CORPORATION
172 Golden Gate Avenue
San Francisco, CA 94102
INFORMATION STATEMENT
FOR
ACTION BY CONSENT OF STOCKHOLDERS
WE ARE NOT ASKING FOR A PROXY
AND YOU ARE NOT REQUESTED TO
SEND US A PROXY
This Information Statement is furnished in connection with
the adoption of a Restated Certificate of Incorporation (the
"Restated Certificate") by the written consent of a majority of the
Class A and Class B Stockholders (the "Majority Consent") of
The Todd-AO Corporation (the "Company"), to be effective on
or about May 17, 1996.
This Information Statement is not to be regarded as proxy
solicitation material. The approximate date on which this
Information Statement is first sent to Stockholders is April 22,
1996.
Table of Contents
Section Page
Voting Rights, 2
Action to be Taken
and Principal Shareholders
Adoption of Restated 2
Certificate of Incorporation
Beneficial Ownership 4
Of Certain Persons
Beneficial Ownership of Management 6
Stockholder Proposals 8
General 8
Action by Majority Consent 9
of Stockholders
Restated Certificate 13
of Incorporation
Page 2
VOTING RIGHTS, ACTION TO BE TAKEN
AND PRINCIPAL SHAREHOLDERS
In accordance with Delaware law and the Company's Bylaws,
stockholder action may be taken without a meeting by means of a
written consent setting forth the action so taken, signed by the
holders of a majority of all outstanding shares entitled to vote
thereon.
The adoption of the Restated Certificate of Incorporation
requires a vote of a majority of the Class A Shares and a majority
of the outstanding Class B Shares. This vote is already assured
and we are not asking you for a proxy or to take any other action.
At the close of business on March 29, 1996, there were
outstanding 6,442,877 shares of Class A Common Stock and
1,747,178 shares of Class B Common Stock, held of record by
approximately 1,400 and 7 stockholders, respectively.
As of March 29, 1996, 3,499,507 outstanding shares of Class A
Common Stock and 1,703,636 outstanding shares of Class B Common
Stock were owned by the Naify Interests and by officers and directors of
the Company. Individuals in this group holding in the aggregate a majority
of the Class A Shares and the Class B Shares have executed or have indicated
that they will execute the Majority Consent, which will insure approval
by the Stockholders.
ADOPTION OF RESTATED
CERTIFICATE OF INCORPORATION
The sole purpose of the Majority Consent is to adopt the Restated
Certificate in the form attached as Exhibit A to the Majority Consent.
Such adoption was authorized by the Board of Directors on March 27, 1996.
Background
The Company's Certificate of Incorporation as presently in effect
(the "Present Certificate") dates back to 1952 and includes over 100
pages of amendments and various documents relating to predecessor
corporations. The purpose for the Majority Consent is to modernize
the Certificate of Incorporation and to eliminate obsolete provisions.
The Restated Certificate increases the number of authorized Class A
and Class B Shares but does not make any other material changes to
the Present Certificate.
The following is a summary of the provisions of the Restated
Certificate as compared to the Present Certificate:
Page 3
Articles 1-3
Articles 1, 2, and 3 of the Restated Certificate set forth, respectively,
the Company's name, the location of its registered office in Delaware and
its authority to engage in any lawful corporate activity. The Present
Certificate is to the same effect except that it recites a lengthy list of
specific corporate activities.
Article 4
Article 4 of the Restated Certificate sets forth the Company's authorized
capitalization. The most recent amendment to Article Fourth in the Present
Certificate was approved by the stockholders in 1986. The Restated
Certificate repeats the 1986 amendment on a substantially verbatim basis,
with the following exceptions:
(1) The number of authorized shares of Class A Stock is increased from
10,000,000 to 20,000,000 and the number of authorized shares of Class B Stock
is increased from 2,000,000 to 4,000,000, which is consistent with the
authorized amounts shown on the Company's balance sheets since 1992, when
the Company effected a two for one stock split in the form of a 100% stock
dividend. The 1992 stock dividend did not increase the authorized shares.
The additional Class A and Class B Shares authorized by the Restated
Certificate will be available for issuance from time to time as determined
by the Board of Directors without further stockholder action. Consistent
with the Present Certificate, the Restated Certificate authorizes the
issuance of 1,000,000 shares of Preferred Stock by Board of Directors
action.
(2) The statement of par value for the Class A Stock ($0.25 in the Present
Certificate) has been eliminated from Article 4 in the Restated Certificate,
such that the Class A Stock will hereafter have no par value.
(3) The language in Article Fourth of the Present Certificate concerning
conversion to Class A Stock of all outstanding Common Stock has been deleted
from the restated Article 4 since the conversion was completed in 1987.
(4) The cumulative dividend rate for the Class A Shares (Section 3(a) of
Article 4) has been adjusted from $.10 per share to $.045 per share to
reflect a 100% stock dividend paid during 1992 and a 10% stock dividend
paid during 1995. The Company presently pays annual cash dividends of
$.06 per Class A Share.
Articles 5-6
Articles 5 and 6 of the Restated Certificate provide, respectively, that
the Company's Common Stock is nonassessable and that its existence shall be
perpetual. There are provisions to the same effect in the Present
Certificate.
Page 4
Articles 7-8
Article 7 of the Restated Certificate allows the number of authorized
directors to be designated in the Bylaws and Article 8 authorizes the Board
of Directors to amend the Bylaws. These provisions do not appear in the
Present Certificate but are contained in Sections 2.1 and 8 of the Company's
Bylaws, approved by the stockholders in 1990.
Articles 9-10
Articles 9 and 10 of the Restated Certificate limit the liability of
directors for breaches of fiduciary duty and eliminate cumulative voting at
any election of directors, respectively. Similar provisions were approved
by the stockholders in 1986.
Articles 11-12
Article 12 provides that stockholder meetings may be held within
or without the State of Delaware, that election of directors need not be
by written ballot absent a stockholder demand or a contrary provision in the
Bylaws, and that the corporate books may be kept outside of Delaware.
Article 13 reserves the Company's right to amend the Certificate of
Incorporation. Similar provisions appear in the Present Certificate.
Other Provisions
The Present Certificate provides for minimum capital, recites the names
of the Company's original incorporators, lists various powers of the Board
of Directors and sets forth procedures for meetings in the case of
creditors' arrangements. These provisions have been eliminated in the
Restated Certificate.
BENEFICIAL OWNERSHIP OF CERTAIN PERSONS
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Class A and Class B Stock by each
person who is known to the Company to own beneficially more than 5% of the
outstanding shares, based on share amounts furnished by the respective
persons:
Page 5
Class A and B Stock Beneficially Owned:
Number of Shares(1) Percent(1)
Name and Address Class A Class B Class A Class B
Heine Securities (2) 652,442 -- 9.30% --
Corporation
51 JFK Parkway
Short Hills, NJ 07078
Salah M. Hassanein 517,443 -- 7.38% --
514 Via de la Valle
Suite 300A
Solana Beach, CA 92075
Naify Interests (3) 3,062,871 1,703,636 43.77% 97.51%
172 Golden Gate Avenue
San Francisco, CA 94102
</TABLE.>
Notes:
(1) All share and percentage amounts assume the issuance of 569,110 Class A
Shares underlying stock options exercisable within 60 days which are deemed
beneficially owned by the optionees. The share ownership of Heine
Securities Corporation is shown as of February 1, 1996. All other amounts
are as of March 29, 1996.
(2) Schedule 13G filed on February 1, 1996 by Heine Securities Corporation
and Michael F. Price indicates that Heine Securities Corporation has sole
investment discretion and voting authority with respect to the Class A
shares, which are legally owned by one or more of its investment advisory
clients.
(3) The Naify Interests (consisting of Marshall Naify, Robert A. Naify,
various members of their families and trusts for the benefit of such members)
may be deemed to constitute a "group" for purposes of Section 13(d) of the
Securities Exchange Act of 1934. Additional information concerning the
beneficial ownership of Marshall Naify and Robert Naify is set forth in the
table contained in the next section.
Page 6
BENEFICIAL OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 29, 1996, information with
respect to the stock ownership by each director, by each executive officer
whose employee compensation from the Company in fiscal 1995 exceeded
$100,000 and by all directors and executive officers as a group. Unless
otherwise indicated, each of such Stockholders has sole voting and
investment power with respect to the shares beneficially owned.
Class A and B Stock Beneficially Owned
as of March 29, 1996:
Name of Number of Shares Percent
Stockholder Company Position Class A Class B Class A Class B
A.C. Director of the Company. 41,087 -- .59% --
Childhouse
Clay M. Vice President Engineering 20,900(1) -- .30% --
Davis of Todd-AO Studios.
J. R. DeLang Executive Vice President of the 52,800(1) -- .75% --
Company's Todd-AO Studios
division and Director.
Richard C. Executive Vice President of 15,400(1) -- .22% --
Hassanein the Company's Todd-AO Studios
West subsidiary and Director.
Salah M. President and Chief Operating 517,443(1) -- 7.38% --
Hassanein Officer of the Company and Director.
Herbert L. Director of the Company. 22,110 -- .32% --
Hutner
Christopher President of Todd-AO Studios 59,400(1) -- .85% --
D. Jenkins and a Director.
Robert I. Consultant to the Company. 72,789(1) -- 1.04% --
Knudson and a Director.
Page 7
Class A and B Stock Beneficially Owned
as of March 29, 1996:
Name of Number of Shares Percent
Stockholder Company Position Class A Class B Class A Class B
Marshall Co-Chairman and Co-CEO of the 1,040,302 678,839 14.84% 38.85%
Naify Company and a Director (1)(2) (2)
Michael S. Director of the Company. 210,963(4) -- 3.01% --
Naify
Robert A. Co-Chairman and Co-CEO of the 1,065,914 906,290 15.21% 51.87%
Naify Company. (1)(3)
Robert J. Director of the Company. 100,053(4) -- 1.43% --
Naify
Zelbie Director of the Company. 4,400 -- .06% --
Trogden
All Directors
and Executive
Officers as a
Group
(16 Persons) 3,245,061 1,585,129 46.28% 90.72%
Notes on Stock Ownership:
(1) Includes stock options exercisable within 60 days by Messrs. Davis,
DeLang, R. Hassanein, S. M. Hassanein, Jenkins, Knudson, Marshall Naify,
R. A. Naify, Trogden and other executive officers as a group to purchase,
respectively, 20,900 52,800, 14,300, 110,000, 59,400, 40,700, 50,050,
50,050, 4,400 and 12,100 Class A Shares. The optionees do not have voting
or investment power with respect to unexercised stock options.
(2) Includes 30,166 Class A Shares held by a trust for which Mr. Naify is
both a trustee and a beneficiary. Excludes 106,092 Class A Shares held by
an independent trustee for the benefit of three of Mr. Naify's children. Mr.
Naify disclaims ownership of the shares held by the independent trustee.
Page 8
(3) Excludes 461,212 Class A Shares held of record or beneficially by Mr.
Naify's adult children and grandchildren as to which he disclaims beneficial
ownership.
(4) Includes 40,062 and 21,439 Class A Shares held by trusts of which
Michael S. Naify and Robert J. Naify are the respective beneficiaries.
Additional information concerning the beneficial ownership of Marshall
Naify and Robert A. Naify and their families is set forth in the Majority
Consent. By reason of their stock ownership and their positions with the
Company, Robert A. Naify and Marshall Naify may be deemed to be "control
persons" of the Company within the meaning of the rules and regulations
of the Securities and Exchange Commission.
STOCKHOLDER PROPOSALS
Proposals submitted by a Stockholder of the Company for action at
the 1997 annual meeting of the Company's stockholders must have been
received by the Company, either at its principal executive offices at 172
Golden Gate Avenue, San Francisco, CA 94102 or at 900 N. Seward Street,
Los Angeles, CA 90038 no later than December 29, 1996, in order to be
included in the Company's proxy materials relating to that meeting.
GENERAL
As of the date of this statement, the Company has no
knowledge of any business which will be presented for approval of the
Stockholders other than as described in the Majority Consent.
The Company will pay the costs of preparing, assembling and mailing
this Information Statement and the material enclosed herewith.
In addition, the Company will reimburse banks and brokers for their
reasonable out-of-pocket expenses incurred in connection with the
distribution of the Information Statement.
By Order of the Board of
Directors
/s/ Dan Malstrom
Dan Malstrom, Secretary
April , 1996
Page 9
THE TODD-AO CORPORATION
ACTION BY MAJORITY CONSENT
OF STOCKHOLDERS
The undersigned, representing more than a majority of the issued
and outstanding Class A Shares and Class B Shares of The Todd-AO
Corporation, a Delaware corporation (the "Corporation" or the "Company"),
acting without a meeting in accordance with Section 228 of the Delaware
General Corporation Law, do hereby consent to the adoption of the following
resolutions:
RESOLVED, that this Corporation adopt a Restated Certificate
of Incorporation, in substantially the form attached hereto as
Exhibit A, together with such modifications as shall be deemed
necessary or appropriate by the Board of Directors of this Corporation.
RESOLVED FURTHER, that notice of this action be given to
the stockholders of this Corporation in accordance with applicable law;
RESOLVED FURTHER, that after notice is given to the stockholders
the Restated Certificate of Incorporation shall be filed with the
Delaware Secretary of State;
RESOLVED FURTHER, that either of the Co-Chairmen, the President,
any Vice President, and the Secretary or any Assistant Secretary of this
Corporation, acting alone except where otherwise required by law,
be and hereby are empowered in the name of and on behalf of this
Corporation to execute such documents and perform such acts
as such officer(s) deem necessary or appropriate in furtherance
of the foregoing resolutions.
Dated as of March 29, 1996.
Class A Shares:
The undersigned shareholders hereby certify that they have the
authority to vote the number of Class A Shares set forth underneath their
respective names:
/s/ Arnold Childhouse
Leslie Andrade Arnold C. Childhouse
No. of Shares: 78,614 No. Shares: 41,087
Page 10
/s/ Silas R. Cross /s/ Richard Hassanein
Silas R. Cross Richard Hassanein
No. of Shares: 5,000 No. of Shares: 1,100
/s/ Salah M. Hassanein /s/ Herbert L. Hunter
Salah M. Hassanein Herbert L. Hutner
No. of Shares: 407,443 No. of Shares: 22,110
/s/ Robert I. Knudson /s/ Dan Malstrom
Robert I. Knudson, Dan Malstrom
as Trustee of the
Knudson Living Trust
No. of Shares: 32,089 No. of Shares: 4,400
/s/ Christina E. Naify
Christie Naify Christina E. Naify
No. of Shares: 78,614 No. of Shares: 60,746
/s/ James C. Naify /s/ Josephine Naify
James C. Naify Josephine Naify
No. of Shares: 7,515 No. of Shares: 49,717
/s/ Marshall Naify
Mark S. Naify Marshall Naify
No. of Shares: 3,300 Individually as to 960,086 Shares
As Trustee and
Beneficiary under
the Will of
Michael A. Naify 30,166 Shares
/s/ Michael S. Naify As Trustee for
Michael S. Naify Michael Naify 98,067 Shares
No. of Shares: 72,834 Total: 1,088,319 Shares
Page 11
/s/ R. A. Naify
Mark S. Naify Robert A. Naify
No. of Shares: 3,300 Individually as to 1,015,864 Shares
As Trustee for
Georgette N. Rosekrans
under the Will of
Michael A. Naify 30,166 Shares
/s/ Richard R. Naify As Trustee for
Richard R. Naify Acela Cortese 2,750 Shares
No. of Shares: 63,646 Total: 1,048,780 Shares
John M. Sherwood, John M. Sherwood,
as Trustee: as Trustee:
For Drew Andrade 6,507 For Marsha J. Naify 25,968
(1986 Trust) (1990 Trust)
For Drew Andrade 11,085
(1988 Trust)
For Leslie Andrade 21,439 For Robert J. Naify 21,439
(1981 Trust) (1981 Trust)
For Sean Andrade 11,085 For Robert J. Naify 78,614
(1988 Trust) (1994 Trust)
For Acela Cortese 16,273 For Tina Naify 7,937
(1983 Trust) (1985 Trust)
For Christina Cortese 7,937 For Tina Naify 11,085
(1983 Trust) (1988 Trust)
For Adam Dierker 11,085 For Todd Anthony Naify 11,085
(1988 Trust) (1990 Trust)
For Christian Dierker 5,500
(1992 Trust) For Matthew Stadnik 11,085
For Hannah Dierker 11,085 (1988 Trust)
For Christie Naify 21,439 For Francesca
(1981 Trust) Vasquez-Vegas 11,085
(1991 Trust)
For Michael S. Naify 40,062 For Patrick
(1981 Trust) Vasquez-Vegas 11,085
(1989 Trust)
Total: 163,497 Total: 189,383
Page 12
Class B Shares:
The undersigned shareholders hereby certify that they have the
authority to vote the number of Class B Shares set forth underneath
their respective names:
/s/ James C. Naify /s/ Josephine Naify
James C. Naify Josephine Naify
No. of Shares: 2,675 No. of Shares: 44,492
/s/ Marshall Naify /s/ R. A. Naify
Marshall Naify Robert A. Naify
No. of Shares: 678,838 No. of Shares: 906,290
/s/ Richard R. Naify
Richard R. Naify
No. of Shares: 71,341
Page 13
Exhibit A
RESTATED CERTIFICATE OF INCORPORATION
OF
THE TODD-AO CORPORATION
THE TODD-AO CORPORATION, a corporation organized and
existing under the laws of the State of Delaware, hereby certifies as follows:
(a) The name of the Corporation is The Todd-AO Corporation. The
original Certificate of Incorporation of the Corporation was filed on
November 28, 1952. The name under which the Corporation was originally
incorporated is MAOT Corporation.
(b) This Restated Certificate of Incorporation restates and amends the
Certificate of Incorporation of the Corporation.
(c) Pursuant to Sections 242 and 245 of the General Corporation
Law of the State of Delaware, the text of the Certificate of Incorporation
is hereby restated to read in its entirety as follows:
Article 1
The name of the Corporation is The Todd-AO Corporation (the
"Corporation").
Article 2
The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, zip code 19801. The name of its
registered agent at such address is The Corporation Trust Company.
Article 3
The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
Article 4
1. Authorized Stock. This Corporation is authorized to issue
three classes of shares of stock designated respectively, "Class A Stock,"
"Class B Stock" and "Preferred Stock." The total number of shares
which the Corporation has authority to issue is twenty five million
(25,000,000) shares, no par value, divided into twenty million
(20,000,000) shares of Class A Stock, four million (4,000,000) shares
of Class B Stock and one million (1,000,000) shares of Preferred Stock.
Page 14
2. Preferred Stock. The shares of Preferred Stock may be issued
from time to time in one or more series. The Board of Directors is hereby
authorized to fix or alter the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption (including sinking
fund provisions), the redemption price or prices and the liquidation
preference of any wholly unissued series of Preferred Stock,
and the number of such shares constituting any such series
and the designation thereof, or any of them; and to increase
or decrease the number of shares of any series subsequent
to the issue of shares of that series, but not below the number
of shares of such series then outstanding. In case the number
of shares of any series shall be so decreased, the shares
constituting such decrease shall resume the status which
they had prior to the adoption of the resolution originally
fixing the number of shares of such series.
3. Class A Stock and Class B Stock -- Dividends, etc.
(a) Subject to the rights of the holders of Preferred Stock, holders
of Class A Stock shall be entitled to receive out of funds legally available
therefor, cumulative cash dividends at an annual rate of $.045 per share
per year (subject to adjustment for stock splits and stock dividends)
payable quarterly at dates fixed by the Board of Directors, before any
cash dividend may be declared or paid on the Class B Stock. Dividends
on the Class A Stock shall cumulate from such date, not later than
December 31, 1987, as shall be determined by the Board of Directors.
Accumulations of dividends shall not bear interest. In the event that
cash dividends are paid on the Class A Stock in excess of the minimum
dividend specified in the first sentence of this paragraph (a), the excess
of all such dividends (computed with respect to dividends paid after the
date on which dividends begin to accumulate as hereinabove provided)
over such minimum rate shall be applied to future periods to reduce the
amount of any dividend which must be paid in such future period on the
Class A Stock before cash dividends can be declared or paid on the Class
B Stock.
(b) Subject to the rights of the holders of Preferred Stock,
holders of Class A Stock and Class B Stock shall be entitled to receive
such dividends and other distributions in cash, stock or property of the
Corporation as may be declared thereon by the Board of Directors from
time to time out of assets or funds of the Corporation legally available
therefor, provided that if at any time a cash dividend is paid on the
Class A Stock (including dividends on the Class A Stock at the minimum
rate specified in paragraph (a) of this Section 3), a cash dividend will
also be paid on the Class B Stock equal to 90% of the amount of the
dividend paid on each share of Class A Stock (rounded down to the
nearest one-hundredth of a cent); provided, however, that this provision
Page 15
shall not require that any dividend be paid on the Class B Stock where
the payment of such dividend would be contrary to the provisions of
paragraph (a) of this Section 3, in which case the dividend which would
otherwise have been required to be paid on the Class B Stock shall be
suspended until the arrearage on the Class A Stock shall have been
corrected; and provided, further, that in the case of dividends or other
distributions payable in stock of the corporation other than Preferred
Stock, including distributions pursuant to stock splits or divisions of
stock of the Corporation other than Preferred Stock, which occur after
the initial issuance of shares of Class B Stock by the Corporation, only
shares of Class A Stock shall be distributed with respect to Class A
Stock and only shares of Class B Stock in an amount per share equal
to the amount per share paid with respect to the Class A Stock shall be
distributed with respect to Class B Stock, and that, in the case of any
combination or reclassification of the Class A Stock, the shares of
Class B Stock shall also be combined or reclassified so that the
number of shares of Class B Stock outstanding immediately following
such combination or reclassification shall bear the same relationship to
the number of shares outstanding immediately prior to such combination
or reclassification as the number of shares of Class A Stock outstanding
immediately prior to such combination or reclassification bears to the
number of shares of Class A Stock outstanding immediately prior to
such combination or reclassification.
4. Class A and Class B Stock -- Voting -- General
(a) At every meeting of the stockholders every holder of Class A
Stock shall be entitled to one (1) vote in person or by proxy for each share
of Class A Stock standing in his name on the transfer books of the
Corporation, and every holder of Class B Stock shall be entitled to ten
(10) votes in person or by proxy for each share of Class B Stock standing
in his name on the transfer books of the Corporation.
(b) The provisions of this Article of the Certificate of Incorporation
shall not be modified, revised, altered or amended, repealed or rescinded in
whole or in part, without (i) such stockholder vote as may be required by
applicable law or the provisions of any Preferred Stock then outstanding,
and (ii) the affirmative vote of the holders of a majority of the shares of
the Class A Stock and of a majority of the shares of the Class B Stock,
each voting separately as a class.
(c) The Corporation may not effect or consummate: (i) any merger
or consolidation with or into any other corporation in which the
Corporation is not the resulting or surviving corporation; (ii) any
sale, lease, exchange or other disposition of all or substantially all
of the assets of the Corporation to or with any other person; or (iii) any
dissolution of the Corporation; unless and until such transaction is
authorized by the vote, if any, required by applicable law and the
Page 16
provisions of any Preferred Stock then outstanding; and unless and until
such transaction is authorized by a majority of the shares voting of Class A
Stock and of Class B Stock, each voting separately as a class, unless a
greater vote is required by Delaware law, but the foregoing shall not
apply to any merger or other transaction described in the preceding
subparagraphs (i) and (ii) if the other party to the merger or other
transaction is a Subsidiary of the Corporation.
For purposes of this paragraph (c) a Subsidiary is any corporation
more than 50% of the voting securities of which are owned directly or
indirectly by the Corporation; and a "person" is an individual, partnership
corporation or entity.
(d) Following the initial issuance of shares of Class B Stock, the
Corporation may not effect the issuance of any additional shares of Class B
Stock (except in connection with stock splits and stock dividends) unless and
until such issuance is authorized by the holders of a majority of the
outstanding shares of the Class B Stock.
(e) Except as may be otherwise required by law or by this Article 4
the holders of Class A Stock and Class B Stock shall vote together as a
single class, subject to any voting rights which may be granted to holders
of Preferred Stock.
5. Class A and Class B Stock -- Voting -- Special.
(a) If and whenever dividends accrued and unpaid on the outstanding
Class A Stock equal or exceed an amount equal to eight (8) full quarterly
dividends on all shares of Class A Stock then outstanding, then, until all
dividends in default on the Class A Stock shall have been paid, or declared
and set aside, the holders of the Class A Stock, voting together as one
class, shall be entitled to elect two directors, and the remaining members
of the Board of Directors shall be elected by the holders of the Class A Stock
and the Class B Stock voting together, as a single class, subject to any
voting rights which may be granted to the holders of Preferred Stock.
(b) If and when all dividends theretofore in default on the Class A
Stock shall be paid, or declared and set aside, the holders of Class A Stock
shall thereupon be divested of such special right to elect two members
of the Board of Directors, but subject to the same provisions for the
vesting of such rights in case of a future default or defaults.
(c) Whenever, under the provisions hereof, a change in the voting powers
of the holders of the Class A Stock shall have occurred, a meeting of the
holders of the Class A Stock and the Class B Stock shall be held upon
notice promptly given, as provided in the Bylaws of the Corporation for
a special meeting of stockholders, by the President or the Secretary of the
Page 17
Corporation. If within fifteen (15) days after the accrual or termination
of such special right of the holders of the Class A Stock with respect to
the election of directors, the President and the Secretary of the Corporation
shall fail to call such meeting, (to be held on a date not more than thirty
(30) days after the mailing of the notice therefor), then such meeting shall
be held upon notice as provided in the Bylaws for a special meeting of
stockholders given by the holders of not less than one thousand (1,000)
shares of Class A or Class B Stock after filing with the Corporation a
notice of their intention to do so.
(d) Forthwith upon the election of directors of the Corporation
pursuant to the foregoing provisions hereof, the terms of office of all
persons who were directors of the Corporation immediately prior to such
election shall terminate.
6. Class A and Class B Stock -- Transfer.
(a) No person holding shares of Class B Stock of record (hereinafter
called a "Class B Holder") may transfer, and the Corporation shall not
register the transfer of, such shares of Class B Stock, whether by sale,
assignment, gift, bequest, appointment or otherwise, except to a permitted
Transferee. A permitted Transferee shall mean, with respect to each person
from time to time shown as the record holder of shares of Class B Stock:
(i) In the case of a Class B Holder who is a natural person:
(A) The spouse of such Class B Holder, any lineal descendant
of a grandparent of such Class B Holder, and any spouse of such lineal
descendant (which lineal descendants, their spouses, the Class B Holder, and
his or her spouse are herein collectively referred to as "Class B Holder's
Family Members");
(B) The trustee of a trust (including a voting trust)
principally for the benefit of such Class B Holder and/or one or more of
his or her permitted Transferees described in each subclause of this clause
(i) other than this subclause (B), provided that such trust may also grant a
general or special power of appointment to one or more of such Class B
Holder's Family Members and may permit trust assets to be used to pay
taxes, legacies and other obligations of the trust or of the estates of one
or more of such Class B Holder's Family Members payable by reason of the
death of any such Family Members;
(C) Any organization contributions to which are
deductible for federal income, estate or gift tax purposes or any
split-interest trust described in Section 4947 of the Internal Revenue Code,
as it may from time to time be amended (hereinafter called a "Charitable
Organization");
Page 18
(D) A corporation, a majority of the beneficial
ownership of outstanding capital stock of which entitled to vote for the
election of directors is owned by, or a partnership, a majority of the
beneficial ownership of the partnership interests of which entitled to
participate in the management of the partnership are held by, the Class B
Holder or his or her permitted Transferees determined under this clause
(i), provided that if by reason of any change in the ownership of such stock
or partnership interests, such corporation or partnership would no longer
qualify as a permitted Transferee, all shares of Class B Stock then held by
such corporation or partnership shall, upon the election of the Corporation
given by written notice to such corporation or partnership, without further
action on anyone's part, be converted into shares of Class A Stock effective
upon the date of the giving of such notice, and stock certificates formerly
representing such shares of Class B shall thereupon and thereafter be deemed
to represent the like number of shares of Class A Stock; and
(E) The estate of such Class B holder.
(ii) In the case of a Class B Holder holding the shares of Class B Stock
in question as trustee pursuant to a trust (other than a Charitable
organization or a trust described in clause (iii) below), "permitted
Transferee" means (A) any person transferring Class B Stock to
such trust and (3) any permitted Transferee of any such transferor
determined pursuant to clause (i) above.
(iii) In the case of a Class. B Holder holding the shares of Class B
Stock in question as trustee pursuant to an irrevocable trust (other than a
Charitable organization), "Permitted Transferee" means (A) any person to
whom or for whose benefit principal may be distributed either during or at
the end of the term of such trust whether by power of appointment or
otherwise and (3) any permitted Transferee of such person determined
pursuant to clause (i) above.
(iv) In the case of a Class B Holder which is a Charitable organization
holding record and beneficial ownership of the shares of Class B Stock in
question, "permitted Transferee" means any Class B Holder.
(v) in the case of a Class B Holder which is a corporation or partnership
(other than a Charitable organization) acquiring record and beneficial
ownership of the shares of Class B Stock in question upon its initial
issuance by the Corporation, "permitted Transferee" means (A) any partner
of such partnership, or stockholder of such corporation at the date of such
initial issuance; (B) any person transferring such shares of Class B Stock
to such corporation or partnership; and (C) any permitted Transferee of
any such person, partner, or stockholder referred to in subclauses (A) and
(B) of this clause (v), determined under clause (i) above.
Page 19
(vi) In the case of a Class B Holder which is a corporation or
partnership (other than a Charitable Organization or a corporation or
partnership described in clause (v) above) holding record and beneficial
ownership of the shares of Class B Stock to such corporation or partnership
and (3) any permitted Transferee of any such transfer or determined under
clause (i) above.
(vii) In the case of a Class B Holder which is the estate of a
deceased Class B Holder, or which is the estate of a bankrupt or insolvent
Class B Holder, which holds record and beneficial ownership of the shares
of Class B Stock in question, "Permitted Transferee" means a permitted
Transferee of such deceased, bankrupt or insolvent Class B Holder as
determined pursuant to clause (i), (ii), (iii), (iv), (v) or (vi) above, as
the case may be.
(b) Notwithstanding anything to the contrary, set forth
herein, any Class B Holder may pledge such Holder's shares of Class B
Stock to a pledgee pursuant to a bona fide pledge of such shares as
collateral security for indebtedness due to the pledgee, provided that such
shares shall remain subject to the provisions of this Section 6. In the event
of foreclosure or other similar action by the pledgee, such pledged shares
of Class B Stock may only be transferred to a Permitted Transferee of the
pledgor or converted into shares of Class A Stock, as the pledgee may elect.
(c) For purposes of this Section 6:
(i) The relationship of any person that is derived by or through
legal adoption shall be considered a natural one.
(ii) Each joint owner of shares of Class B Stock shall be
considered a "Class B Holder" of such shares.
(iii) A minor for whom shares of Class B Stock are held pursuant
to a Uniform Gifts to Minors Act or similar law shall be considered a Class
B Holder of such shares.
(iv) Unless otherwise specified, the term "person" means both
natural persons and legal entities.
(v) Without derogating from the election conferred upon the
Corporation pursuant to subclause (D) of clause (i) of subsection (a) above,
each reference to a corporation, shall include any successor corporation
resulting from merger or consolidation; and each reference to a partnership
shall include any successor partnership resulting from the death or
withdrawal of a partner.
Page 20
(d) Any transfer of shares of Class B Stock not permitted
hereunder shall result in the conversion of the transferee's shares of Class
B Stock into shares of Class A Stock, effective the date on which
certificates representing such shares are presented for transfer on the books
of the Corporation. The Corporation may, in connection with preparing a
list of stockholders entitled to vote at any meeting of stockholders, or as
a condition to the transfer or the registration of shares of Class B Stock
on the Corporation's books, require the furnishing of such affidavits or
other proof at it deems necessary to establish that any person is the
beneficial owner of shares of Class B Stock or is a permitted Transferee.
At any time when the number of outstanding shares of Class B
Stock as reflected on the stock transfer books of the Corporation falls
below 10% of the aggregate number of the issued and outstanding shares of
the Class A Stock and Class B Stock of the Corporation, or the Board of
Directors and the holders of a majority of the outstanding shares of Class B
Stock approve the conversion of all of the Class B Stock into Class A
Stock, then, immediately upon the occurrence of either such event, the
outstanding shares of Class B Stock shall be converted into shares of Class
A Stock. In the event of such a conversion, certificates formerly
representing outstanding shares of Class B Stock shall thereupon and
thereafter be deemed to represent the like number of shares of Class A
Stock.
(f) Shares of Class B Stock shall be registered in the names of the
beneficial owners thereof and not in "street" or "nominee" name, except
that trusts and pledgees may register shares of Class B Stock in "street" or
"nominee" name. For this purpose a "beneficial owner" of any shares of
Class B Stock shall mean a person who, or an entity which, possesses the
power, either singly or jointly, to direct the voting or disposition of such
shares. The Corporation shall note on the certificates of shares of Class B
Stock the restrictions on transfer and registration of transfer imposed by
this Section 6.
7. Class A and Class B Stock -- Conversion Rights.
(a) Notwithstanding anything else herein contained, the Class B
Stock may not be converted into Class- A Stock prior to July 1, 1988.
Subject to the terms and conditions of this Section 7, each share of Class B
Stock shall be convertible on July 1, 1988 or from time to time thereafter,
at the option of the respective holder thereof, at the office of any transfer
agent for Class B Stock, and at such other place or places, if any, as the
Board of Directors may designate, or, if the Board of Directors shall fail to
designate, at the principal office of the Corporation (attention of the
Secretary of the Corporation ), into one (1) fully paid and nonassessable
share of Class A Stock. Upon conversion, the Corporation shall make no
Page 21
payment or adjustment on account of dividends accrued or in arrears on
Class B Stock surrendered for conversion or on account of any dividends
on the Class A Stock issuable on such conversion. Before any holder of
Class B Stock shall be entitled to convert the same into Class A Stock, he
shall surrender the certificate or certificates for such Class B Stock at the
office of said transfer agent (or other place as provided above), which
certificates or certificates, if the Corporation shall so request, shall be
duly endorsed to the Corporation or in blank or accompanied by proper
instruments of transfer to the Corporation or in blank (such endorsements
or instruments of transfer to be in form satisfactory to the Corporation),
and shall give written notice to the Corporation at said office that he
elects so to convert said Class B Stock in accordance with the terms of this
Section 7, and shall state in writing therein the name or names in which he
wishes the certificate or certificates for Class A Stock to be issued. Every
such notice of election to convert shall constitute a contract between the
holder of such Class B Stock and the Corporation, whereby the holder of
such Class B Stock shall be deemed to subscribe for the amount of Class A
Stock which he shall be entitled to receive upon such conversion, and, in
satisfaction of such subscription to deposit the Class B Stock to be
converted and to release the Corporation from all liability thereunder and
thereby the Corporation shall be deemed to agree that the surrender of the
certificate or certificates therefor and the extinguishment of liability
thereon shall constitute full payment of such subscription for Class A Stock
to be issued upon such conversion. The Corporation will as soon as
practicable after such deposit of a certificate or certificates of Class B
Stock, accompanied by the written notice and the statement above
prescribed, issue and deliver at the office of said transfer agent (or other
place as provided above) to the person for whose account such Class B
Stock was so surrendered, or to his nominee or nominees, a certificate or
certificates for the number of full shares of Class A Stock to which he shall
be entitled as aforesaid. Subject to the provisions of subsection (c) of this
Section 7, such conversion shall be deemed to have been made as of the
date of such surrender of the Class B Stock to be converted; and the person
or persons entitled to receive the Class A Stock issuable upon conversion of
such Class B Stock shall be treated for all purposes as the record holder or
holders of such Class A Stock on such date.
(b) The issuance of certificates for shares of Class A Stock upon
conversion of shares of Class B Stock shall be made without charge for any
stamp or other similar tax in respect of such issuance. However, if any
such certificate is to be issued in a name other than that of the holder of
the share or shares of Class B Stock converted, the person or persons
requesting the issuance thereof shall pay to the Corporation the amount of
any tax which may be payable in respect of any transfer involved in such
issuance or shall establish to the satisfaction of the Corporation that such
tax has been paid.
Page 22
(c) The Corporation shall not be required to convert Class B Stock
and no surrender of Class B Stock shall be effective for that purpose, while
the stock transfer books of the Corporation are closed for any purpose; but
the surrender of Class B Stock for conversion during any period while such
books are so closed shall become effective for conversion immediately
upon the reopening of such books, as if the conversion had been made on
the date such Class B Stock was surrendered.
(d) The Corporation covenants that it will at all times reserve and
keep available, solely for the purpose of issue upon conversion of the
outstanding shares of Class B Stock, such number of shares of Class A
Stock as shall be issuable upon the conversion of all such outstanding
shares, provided that nothing contained herein shall be construed to
preclude the Corporation from satisfying its obligations in respect of the
conversion of the outstanding shares of Class B Stock by delivery of shares
of Class A Stock which are held in the treasury of the Corporation. The
Corporation covenants that if any shares of Class A Stock, required to be
reserved for purposes of conversion hereunder, require registration with or
approval of any governmental authority under any federal or state law
before such shares of Class A Stock may be issued upon conversion, the
Corporation will use its best efforts to cause such shares to be duly
registered or approved, as the case may be. The Corporation will endeavor
to list the shares of Class A Stock required to be delivered upon conversion
prior to such delivery upon each national securities exchange, if any, upon
which the outstanding Class A Stock is listed at the time of such delivery.
The Corporation covenants that all shares of Class A Stock which shall be
issued, upon the conversion of the shares of Class B Stock will, upon issue,
be fully paid and nonassessable and not entitled to any preemptive rights.
8. Liquidation Rights. In the event of any dissolution, liquidation
or winding up of the affairs of the Corporation , whether voluntary or
involuntary, after payment or provision for payment of the debts and other
liabilities of the Corporation, the holders of each series of Preferred Stock
shall be entitled to receive, out of the net assets of the Corporation, an
amount for each share equal to the amount fixed and determined by the
Board of Directors in any resolution or resolutions providing for the
issuance of any particular series of Preferred Stock, plus an amount equal
to all dividends accrued and unpaid on shares of such series to the date
fixed for distribution, and no more, before any of the assets of the
Corporation shall be distributed or paid over to the holders of Class A
Stock and Class B Stock. After payment in full of said amounts to the
holders of Preferred Stock, the remaining assets and funds of the
Corporation shall be divided among and paid ratably to the holders of Class
A Stock and Class B Stock, that is, an equal amount of net assets for each
share of Class A Stock and Class B Stock. A merger or consolidation of
the Corporation with or into any other corporation or a sale or conveyance
of all or any part of the assets of the Corporation (which shall not in fact
result in the liquidation of the Corporation and the distribution of assets
to stockholders) shall not be deemed to be a voluntary or involuntary
liquidation or dissolution or winding up of the Corporation within the
meaning of this Section 8.
Page 23
9. Purchases. Subject to any limitations provided for in
connection with any sinking fund for any class of the Preferred Stock or
with any other terms of such class, the Corporation may at any time or from
time to time purchase shares of its capital stock in any manner now or
hereafter permitted by law, publicly or privately, or pursuant to any
agreement.
10. No Preemptive Rights. No holder of stock, or of rights or
options to purchase stock, of the Corporation of any class, as such, shall
have any preemptive or preferential right of subscription to any shares of
stock, of the Corporation (including any notes, bonds or other evidences of
indebtedness to which are attached or with which are issued warrants or
other rights to purchase any stock of the Corporation) issued or sold, or any
right of subscription to any thereof other than such, if any, as the Board of
Directors in its discretion may from time to time fix pursuant to the
authority conferred by this Certificate of Incorporation. Shares of stock,
rights or options to purchase stock, or obligations convertible into stock or
into rights or options to purchase stock, of the Corporation may from time
to time be issued and sold to such parties, whether stockholders or others,
as the Board of Directors in its sole discretion may determine.
Article 5
The capital stock of this Corporation shall not be assessable. It
shall be issued as fully paid, and the private property of the stockholders
shall not be liable for the debts, obligations or liabilities of this
Corporation. This Certificate shall not be subject to amendment in this
respect.
Article 6
The Corporation is to have perpetual existence.
Article 7
The number of directors which constitute the whole Board of
Directors of the Corporation shall be designated in the Bylaws of the
Corporation.
Article 8
In furtherance and not in limitation of the powers conferred by the
laws of the State of Delaware, the Board of Directors is expressly
authorized to adopt, alter, amend or repeal the Bylaws of the Corporation.
Article 9
To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or may hereafter be amended, no
Page 24
director of the Corporation shall be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director. Neither any amendment nor repeal of this Article, nor the
adoption of any provision of this Certificate of Incorporation inconsistent
with this Article, shall eliminate or reduce the effect of this Article in
respect of any matter occurring, or any cause of action, suit or claim that,
but for this Article, would accrue or arise, prior to such amendment, repeal
or adoption of an inconsistent provision.
Article 10
No stockholder will be permitted to cumulate votes at any election
of directors.
Article 11
Meetings of stockholders may be held within or without the State
of Delaware, as the Bylaws may provide. The election of directors need not
be by written ballot unless a stockholder demands election by written
ballot at a meeting of stockholders and before voting begins or unless the
Bylaws of the Corporation shall so provide. The books of the Corporation
may be kept (subject to any provision contained in the laws of the State of
Delaware) outside of the State of Delaware at such place or places as may
be designated from time to time by the Board of Directors or in the Bylaws
of the Corporation.
Article 12
The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by the laws of the State of Delaware,
and all rights conferred herein are granted subject to this reservation.
IN WITNESS WHEREOF, the undersigned has signed this Restated
Certificate of Incorporation this th day of , 1996.
The Todd-AO Corporation
By
Salah M. Hassanein
Title: President
ATTEST:
By:
Dan Malstrom
Title: Secretary