EXHIBIT 3(i)
SECOND RESTATED ARTICLES OF INCORPORATION
OF PRAB, INC., AS AMENDED
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ARTICLE I
The name of the corporation is Prab, Inc.
ARTICLE II
The purpose or purposes for which the corporation is organized is to
engage in any activity within the purposes for which corporations may be
organized under the Business Corporation Act of Michigan.
ARTICLE III
The total number of capital shares of all classes which the Corporation
shall have authority to issue is 9,600,000 shares which shall be divided as
follows:
(i) 7,000,000 Common Shares, $0.10 par value (the
"Common Stock");
(ii) 2,000,000 Convertible Preferred Shares, $0.75 par
value (the "Convertible Preferred Stock"); and
(iii) 600,000 Non-Convertible Preferred Shares, $0.50 par value
(the "Non-Convertible Preferred Stock").
The preferences, qualifications, limitations, restrictions, and the
special or relative rights thereof are as follows:
A. COMMON STOCK
1. Voting Rights. Except as otherwise required by law, each share of
Common Stock shall entitle the holder thereof to one vote on each matter
submitted to a vote of the shareholders of the Corporation.
2. Dividend Rights. Subject to provisions of law and preferences of any
outstanding shares of Convertible Preferred Stock and Non-Convertible
Preferred Stock and except as otherwise provided herein, the holders of the
Common Stock shall be entitled to receive dividends at such times and in such
amounts as may be determined by the Board of Directors of the Corporation.
B. CONVERTIBLE PREFERRED STOCK
1. Limited Voting Rights. Except as otherwise required by law, the
holders of Convertible Preferred Stock shall not be entitled to vote on any
matters submitted to a vote of the shareholders of the Corporation; provided,
however, the holders of the Convertible Preferred Stock, voting together as a
class, shall have the right to nominate and elect one member of the Board of
Directors. In the event the holders of the Convertible Preferred Shares fail
to elect such member of the Board of Directors to which they are entitled,
such director shall be elected by the holders of the Common Stock.
2. Dividends. The holders of Convertible Preferred Stock shall be
entitled to receive, out of any assets at the time legally available therefor,
on and after November 1, 1995 a per annum dividend, based on the par value of
such stock, payable on a quarterly basis (with the first such dividend payable
for the fiscal quarter beginning November 1, 1995), pursuant to the following
schedule:
ANNUAL
PERIOD DIVIDEND
November 1, 1995 to October 31, 1996 5% per annum
November 1, 1996 to October 31, 1997 6% per annum
November 1, 1997 to October 31, 1998 7% per annum
November 1, 1998 and thereafter 8% per annum
The dividend shall be mandatory and shall be payable at the option of
the Corporation in either (i) cash to the extent that the Corporation has
assets legally available therefor, or (ii) in shares of Common Stock provided
that (a) the value of the Common Stock for the purposes of computing the
dividends shall be the average of the bid and ask price of such stock for the
consecutive sixty (60) day trading period ending ten (10) business days prior
to the last day of such quarter and (b) such Common Stock, when issued, shall
be fully paid and nonassessable. The dividend for each quarter shall be due
and payable on the last day of each fiscal quarter.
Such dividends are prior and in preference to any declaration or payment
of any dividend or distribution on the Common Stock, but shall be junior and
subordinate to the declaration or payment of any dividend or distribution on
the Non-Convertible Preferred Stock. Such dividends shall accrue on each share
of Convertible Preferred Stock from day to day from November 1, 1995 and
continuing thereafter, whether or not earned or declared so that if such
dividends with respect to any previous dividend period at the rate provided
for above have not been paid on, or set apart for all shares of Convertible
Preferred Stock at the time outstanding, the deficiency shall be fully paid
on, or declared and set apart for, such shares before any distribution shall
be paid on, or declared and set apart for the Common Stock.
3. Conversion Rights. On or after November 1, 1994, at any time and from
time to time thereafter, any holder of Convertible Preferred Stock shall have
the right to convert all or any number of such shares into a number of shares
of Common Stock. Each share of Convertible Preferred Stock shall be
convertible into one share of Common Stock (the "Conversion Ratio"), subject
to adjustment from time to time as hereinafter provided. Prior to November 1,
1994, no holder of Convertible Preferred Stock shall have any right to convert
any of such shares into Common Stock.
(a) Exercise of Conversion Rights. A holder of the Convertible
Preferred Stock shall surrender the certificate to the Corporation at its
principal office, accompanied by written notice electing to convert a
specified portion or all of such shares. Convertible Preferred Stock shall be
deemed to have been converted immediately prior to the close of business on
the day of surrender of the certificate for conversion, and at such time the
rights of the holder of such Convertible Preferred Stock, as such holder,
shall cease and such holder shall be treated for all purposes as the record
holder of the Common Stock issuable upon conversion. Within ten days of the
conversion date, the Corporation shall issue and mail or deliver to such
holder a certificate or certificates for the number of shares of Common Stock
issuable upon conversion and a certificate or certificates for the balance of
the Convertible Preferred Stock surrendered, if any, not so converted into
Common Stock. No fractional shares of Common Stock shall be issued upon
conversion. In lieu of any fractional shares to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to such fraction
multiplied by the then fair market value of the Common Stock as determined in
good faith by the Board of Directors of the Corporation.
(b) Adjustment of Conversion Ratio. The Conversion Ratio as
hereinabove provided shall be subject to adjustment as follows:
(i) In case the Corporation shall (a) pay a dividend in shares of
its Common Stock, (b) subdivide its outstanding shares of Common Stock
into a greater number of shares, (c) combine its outstanding shares of
Common Stock into a smaller number of shares, or (d) issue by
reclassification of its shares of Common Stock any shares of its capital
stock, the Conversion Ratio in effect immediately prior thereto shall be
adjusted so that the holder of a share of Convertible Preferred Stock
surrendered for conversion after the record date fixing shareholders to
be affected by such event shall be entitled to receive, upon conversion,
the number of shares of Common Stock which such holder would have owned
or have been entitled to receive after the happening of such event had
such share of Convertible Preferred Stock been converted immediately
prior to the record date in the case of any such subdivision,
combination or reclassification. An adjustment made pursuant to this
subparagraph (i) shall be made whenever any of such events shall happen,
but shall become effective retroactively after such record date or such
effective date, as the case may be, as to shares of Convertible
Preferred Stock converted between such record date or effective date and
the date of happening of any such event.
(ii) In case the Corporation shall issue rights or warrants to all
holders of its Common Stock entitling them to subscribe for or purchase
shares of Common Stock at a price per share, which, when added to the
amount of consideration received or receivable by the Corporation for
such right or warrant, is less than the current market price (as
hereinafter defined) per share of Common Stock at the record date
mentioned below, the Conversion Ratio shall be adjusted so that
thereafter, until further adjusted, each share of Convertible Preferred
Stock shall be convertible into that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock into
which such share of Convertible Preferred Stock was theretofore
convertible by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding on the date of issuance of such
rights or warrants plus the number of additional shares of Common Stock
issuable upon the exercise of such rights or warrants, and the
denominator of which shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the
number of shares which an amount equal to the sum of (a) the aggregate
exercise price of the total number of shares of Common Stock issuable
upon the exercise of such rights or warrants, plus (b) the aggregate
amount of consideration, if any, received, or receivable by the
Corporation for any such rights or warrants, would purchase at such
current market price. Such adjustment shall be made whenever such rights
or warrants are issued, but shall also be effective retroactively as to
shares of Convertible Preferred Stock converted between the record date
for the determination of stockholders entitled to receive such rights or
warrants and the date such rights or warrants are exercised.
(iii) In case the Corporation shall distribute to all holders of
its Common Stock any one or more of the following: (a) evidence of its
indebtedness, (b) assets (excluding cash dividends, distributions made
out of current or retained earnings, and distributions of the stock of
any subsidiary), or (c) rights or warrants to subscribe for or purchase
securities issued by, or property of, the Corporation (excluding those
referred to in subparagraph (ii) above), then in each such case the
Conversion Ratio shall be adjusted as provided below so that thereafter,
until further adjusted, the number of shares of Common Stock into which
each share of Convertible Preferred Stock shall be convertible shall be
determined by multiplying the number of shares of Common Stock into
which such share of Convertible Preferred Stock was theretofore
convertible by a fraction, the numerator of which shall be the current
market price per share of Common Stock on the date of such distribution,
and the denominator of which shall be such current market price per
share of the Common Stock, less the then fair market value (as
determined by the Board of Directors of the Corporation, whose
determinations shall be conclusive) of the portion of the assets or
evidence of indebtedness so distributed or of such rights or warrants
applicable to one share of the Common Stock. Such adjustment shall be
made whenever any such distribution is made, but shall also be effective
retroactively as to shares of Convertible Preferred Stock converted
between the record date for the determination of stockholders entitled
to receive such distribution and the date such distribution is made.
(iv) For the purpose of any computation under subparagraphs (ii)
and (iii) above, the current market price per share of Common Stock at
any date shall be the average of the bid and ask price of such stock for
the consecutive sixty (60) day trading period prior to such conversion
date.
(c) Transactions Not Requiring Adjustment. No adjustment of the
Conversion Ratio shall be made in any of the following cases:
(i) upon the grant or exercise of stock options pursuant
to any employee stock option plan now or hereafter authorized;
(ii) shares of Common Stock issued upon the conversion of
Convertible Preferred Stock;
(iii) shares issued by way of dividend or other distribution on
Common Stock excluded from the calculation of the adjustment under this
subparagraph (c) or on the Common Stock resulting from any subdivision
or combination of Common Stock so excluded; or
(iv) shares issued pursuant to all stock options and warrants
outstanding on the date of the filing of these Articles III.
(d) Payment of Dividends on Converted Shares. Upon conversion of
any shares of Convertible Preferred Stock, the holders of the shares of
Convertible Preferred Stock so converted shall be entitled to receive
dividends with respect to such shares of Convertible Preferred Stock up to and
including the date of the conversion. No payment or adjustment shall be made
on account of dividends declared and payable to holders of Common Stock of
record on a date prior to the date of conversion.
(e) Fractional Shares. No fractional shares or script representing
fractional shares shall be issued upon the conversion of any shares of
Convertible Preferred Stock. If more than one share of Convertible Preferred
Stock shall be surrendered for conversion at one time by the same holder, the
number of full shares issuable upon conversion thereof shall be computed on
the basis of the aggregate number of such shares so surrendered. If the
conversion of any share of Preferred Stock results in a fraction, an amount
equal to such fraction multiplied by the current market price (determined as
provided in subparagraph (b)(iv) above) of the Common Stock on the day of
conversion shall be paid to such holder in cash by the Corporation.
(f) Reservation of Common Stock. The Corporation shall at all
times reserve and keep available out of its authorized Common Stock, for the
purpose of effecting the conversion of the issued and outstanding Convertible
Preferred Stock, the full number of shares of Common Stock then deliverable in
the event and upon the conversion of all of the Convertible Preferred Stock
then issued and outstanding.
4. Redemption. Subject to Section 4(d), the Corporation may redeem the
Convertible Preferred Stock at its option at any time and from time to time,
in whole or in part, from funds legally available therefor, at the redemption
price hereinafter specified, together, in each case, with any accrued and
unpaid dividends to the redemption date. The redemption price per share of
Convertible Preferred Stock shall be $0.75, plus the amount of any accrued but
unpaid dividends.
(a) Notice. The Corporation shall effect each redemption of
Convertible Preferred Stock under this Section by giving at least 60 days but
not more than 90 days written notice to the holders of record of the
Convertible Preferred Stock to be redeemed and containing the date fixed for
redemption and the place of surrender and payment. On or after the date fixed
for redemption, each holder of Convertible Preferred Stock called for
redemption shall surrender the certificates evidencing such shares to be
redeemed to the Corporation at the place designated in such notice and shall
thereupon be entitled to receive payment of the redemption price for the
shares redeemed.
(b) Conversion Prior to Redemption. For a period of 60 days after
the date of the redemption notice, the holders of Convertible Preferred Stock
shall have the option to convert such shares to Common Stock to the extent
such a right exists under Section 3 above.
(c) Effect of Redemption. From and after the redemption date
(unless default shall be made by the Corporation in duly paying the redemption
price in which case all of the rights of the holders of such shares shall
continue) the holders of the shares of the Convertible Preferred Stock called
for redemption shall cease to have any rights as shareholders of the
Corporation except the right to receive, without interest, the redemption
price, thereof upon surrender of the certificates representing the shares of
Convertible Preferred Stock, and such shares shall not thereafter be
transferred (except with the consent of the Corporation) on the books of the
Corporation and shall not be deemed outstanding for any purposes whatsoever.
(d) Limitation on Redemption. The Corporation shall not be
permitted to redeem any shares of Convertible Preferred Stock or Common Stock
unless and until it has redeemed all outstanding shares of Non-Convertible
Preferred Stock from the holders thereof.
C. NON-CONVERTIBLE PREFERRED STOCK
1. Limited Voting Rights. Except as otherwise required by law, the
holders of the Non-Convertible Preferred Stock shall not be entitled to vote
on any matters submitted to a vote of the shareholders of the Corporation;
provided, however, in the event that the dividend provided for in Section 2
below is not paid within thirty (30) days of its due date, the holders of the
Non-Convertible Preferred Stock shall have the right to nominate and elect, by
a majority of such holders (by written consent or at any regular or special
meeting of shareholders), two members to the Board of Directors in addition to
those members then on the Board, and such directors shall continue in office
until all dividends in arrears have been paid in full and, for two successive
quarters thereafter, all dividends on the Non-Convertible Preferred Stock have
been paid in a timely manner. When the right of the holders of the Non-
Convertible Preferred Shares to vote as provided herein has ceased, the term
of office of the persons elected by them as directors shall terminate and the
vacancies shall remain unfilled. In the event the holders of the
Non-Convertible Preferred Stock fail to elect such members of the Board of
Directors to which they are entitled, such position shall remain unfilled.
2. Dividend. The holders of Non-Convertible Preferred Stock shall be
entitled to receive, out of any assets at the time legally available therefor,
on and after the dates such stock is issued, a per annum dividend, based on
the par value of such stock, payable on a quarterly basis (with the first such
dividend payable for the fiscal quarter beginning November 1, 1992), pursuant
to the following schedule:
ANNUAL
PERIOD DIVIDEND
Date of issuance to October 31, 1997 7% per annum
November 1, 1997 to October 31, 1998 8% per annum
November 1, 1998 and thereafter 9% per annum
The dividend shall be mandatory, and shall be payable in cash on the last day
of each fiscal quarter.
Such dividends are prior and in preference to any declaration or payment
of any dividend or distribution on the Convertible Preferred Stock or the
Common Stock. Such dividends shall accrue on each share of Non-Convertible
Preferred Stock from day to day from the date of issuance and continuing
thereafter, whether or not earned or declared so that if such dividends with
respect to any previous dividend period at the right provided for above have
not been paid on, or declared and set apart for all shares of Non-Convertible
Preferred Stock at the time outstanding, the deficiency shall be fully paid
on, or declared and set apart for such shares before any distribution shall be
paid on or declared and set apart for the Convertible Preferred Stock or the
Common Stock.
3. Redemption. The Corporation may redeem the Non-Convertible Preferred
Stock at its option at any time and from time to time, in whole or in part,
from funds legally available therefor, at the redemption price hereinafter
specified, together, in each case, with any accrued and unpaid dividends to
the redemption date. The redemption price per share of Non-Convertible
Preferred Stock shall be: (i) $0.50 if the redemption occurs at any time prior
to November 15, 1994, plus the amount of any accrued but unpaid dividends; and
(ii) $0.60 if the redemption occurs at any time on or after November 15, 1994,
plus the amount of any accrued but unpaid dividends.
(a) Notice. The Corporation shall effect each redemption of Non-
Convertible Preferred Stock under this Section by giving at least 60 days but
not more than 90 days written notice to the holders of record of the
Non-Convertible Preferred Stock to be redeemed, and containing the date fixed
for redemption and the place of surrender and payment. On or after the date
fixed for redemption, each holder of Non-Convertible Preferred Stock called
for redemption shall surrender the certificates evidencing such shares to be
redeemed to the Corporation at the place designated in such notice and shall
thereupon be entitled to receive payment of the redemption price for the
shares redeemed.
(b) Effect of Redemption. From and after the redemption date
(unless default shall be made by the Corporation in duly paying the redemption
price in which case all of the rights of the holders of such shares shall
continue) the holders of the shares of the Non-Convertible Preferred Stock
called for redemption shall cease to have any rights as shareholders of the
Corporation except the right to receive, without interest, the redemption
price, thereof upon surrender of the certificates representing the shares of
Non-Convertible Preferred Stock, and such shares shall not thereafter be
transferred (except with the consent of the Corporation) on the books of the
Corporation and shall not be deemed outstanding for any purposes whatsoever.
(c) Limitation on Redemption. The Corporation shall be required to
redeem all of the shares of Non-Convertible Preferred Stock issued and
outstanding before it shall be permitted to redeem any shares of Convertible
Preferred Stock or Common Stock.
D. GENERAL TERMS
1. Liquidation Preference. In the event of any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, after
payment or provision for payments of the debts and other liabilities of the
Corporation, the remaining assets of the Corporation shall be distributed to
the holders of outstanding shares of capital stock of the Corporation in the
following priority:
(i) the holders of the Non-Convertible Preferred Stock then
outstanding shall first be entitled to receive an amount equal to $0.50
per share plus the amount of any accrued but unpaid dividends to which
such holder is entitled;
(ii) then the holders of the Convertible Preferred Stock shall be
entitled to receive an amount equal to $0.75 per share plus the amount
of any accrued but unpaid dividends to which such holder is entitled;
and
(iii) then the remainder shall be allocated pro rata among the
holders of the shares of Common Stock.
If upon any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the assets to be distributed to the holders of
either the Non-Convertible Preferred Stock or the Convertible Preferred Stock
shall be insufficient to permit the payment to such holders of the full
preferential amounts provided for above, then all the assets of the
Corporation to be distributed to such class of either the Non-Convertible
Preferred Stock or Convertible Preferred Stock shall be distributed ratably to
the holders thereof. A consolidation or merger of the Corporation, share
exchange, sale, lease, exchange, or transfer of all or substantially all of
the assets as an entirety, or any purchase or redemption of stock of the
Corporation of any class, shall not be regarded as a "liquidation,
dissolution, or winding up of the affairs of the Corporation" within the
meaning of this Section 1. Whenever the distribution provided for herein shall
be paid in property other than cash, the value of such distribution shall be
the fair market value of such property as determined in good faith by the
Board of Directors.
2. Anti-Dilution. In case the Corporation shall at any time subdivide
the outstanding shares of Convertible Preferred Stock or Non-Convertible
Preferred Stock, or shall issue a stock dividend on its outstanding
Convertible Preferred Stock or Non-Convertible Preferred Stock payable in such
same class of stock, the dividend or redemption price payable with respect
thereto prior to such subdivision or the issuance of such stock dividend shall
be proportionately decreased, and in case the Corporation shall at any time
combine the outstanding shares of Convertible Preferred Stock and
Non-Convertible Preferred Stock, the dividend or redemption price with respect
thereto immediately prior to such combination shall be proportionately
increased, effective at the close of business on the day of such subdivision,
stock dividend or combination, as the case may be.
3. Notices. All notices required or permitted to be given by the
Corporation with respect to the capital stock shall be in writing, and if
delivered by first class United States mail, postage prepaid, to the holders
of such capital stock at their last addresses as they shall appear upon the
books of the Corporation, shall be conclusively presumed to have been duly
given, whether or not the stockholder actually receives such notice.
ARTICLE IV
The address of the current registered office is:
444 West Michigan Avenue, Kalamazoo, Michigan 49007
The name of the current resident agent at the registered office is Eric
V. Brown, Sr.
ARTICLE V
The duration of the corporation is perpetual.
ARTICLE VI
Any action required or permitted by law, these Articles of Incorporation
or the Bylaws of the corporation to be taken at an annual or special meeting
of shareholders may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken, is
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take the action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action shall be given to
shareholders who have not consented in writing.