EXHIBIT 4.1
STRATEGIC DIAGNOSTICS INC.
CERTIFICATE OF THE POWERS, DESIGNATIONS,
PREFERENCES AND RIGHTS OF THE
SERIES B CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.01 PER SHARE
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The following resolution was duly adopted by the Board of
Directors of Strategic Diagnostics Inc., a Delaware corporation (the
"Corporation"), pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, on February 19, 1999, at a meeting of
the Board of Directors:
WHEREAS, the Board of Directors is authorized, within the
limitations and restrictions stated in the Certificate of Incorporation of the
Corporation, to provide by resolution or resolutions for the issuance of shares
of Preferred Stock, par value $.01 per share, of the Corporation, in one or more
series with such voting powers, full or limited, or without voting powers, and
such designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions as shall be
stated and expressed in the resolution or resolutions providing for the issuance
thereof adopted by the Board of Directors, and as are not stated and expressed
in the Certificate of Incorporation, or any amendment thereto, including (but
without limiting the generality of the foregoing) such provisions as may be
desired concerning voting, redemption, dividends, dissolution or the
distribution of assets and such other subjects or matters as may be fixed by
resolution or resolutions of the Board of Directors under the General
Corporation Law of the State of Delaware; and
WHEREAS, it is the desire of the Board of Directors, pursuant
to its authority as aforesaid, to authorize and fix the terms of a series of
preferred stock and the number of shares constituting such series.
Unless otherwise defined in this Certificate of Designations,
capitalized terms used in this Certificate of Designations shall have the
respective meanings ascribed to them in the Certificate of Incorporation.
NOW, THEREFORE, BE IT RESOLVED:
1. Number of Shares. The series of Preferred Stock designated
and known as "Series B Convertible Preferred Stock" shall consist of 556,286
shares.
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2. Rank. The Series B Convertible Preferred Stock shall, with
respect to distributions of assets and rights upon the liquidation, dissolution
or winding up of the Corporation (a "Liquidation"), rank (a) junior to the
Series A Convertible Preferred Stock and (b) senior to the Common Stock and to
all other series of Preferred Stock (other than the Series A Convertible
Preferred Stock).
3. Voting. Except as otherwise may be provided in these terms
of the Series B Convertible Preferred Stock or by law, the Series B Convertible
Preferred Stock and all other classes and series of stock of the Corporation
otherwise entitled to vote shall vote together as a single class on all actions
to be taken by the stockholders of the Corporation. Each share of Series B
Convertible Preferred Stock shall entitle the holder thereof to such number of
votes per share on each such action as shall equal the nearest whole number of
shares of Common Stock into which each share of Series B Convertible Preferred
Stock is then convertible.
4. Dividends. The holders of Series B Convertible Preferred
Stock shall be entitled to cumulative dividends of $0.175 per share per annum
(adjustable in accordance with subparagrahs 6D and 6E) and no more, payable out
of the earned surplus of the Corporation on the first days of February, April,
August and November in each year before any dividends shall paid or set apart
upon the Common Stock.
5. Liquidation. Upon any liquidation, dissolution or winding
up of the Corporation (other than in connection with a reorganization of the
Corporation in which the rights and preferences of the Series B Convertible
Preferred Stock are not adversely affected), whether voluntary or involuntary,
the holders of Series B Convertible Preferred Stock shall be entitled, before
any distribution or payment is made upon any stock ranking on liquidation junior
to the Series B Convertible Preferred Stock, to be paid an amount equal to $3.50
per share of Series B Convertible Preferred Stock (in the aggregate, the
"Liquidation Preference") (such amount payable with respect to one share of
Series B Convertible Preferred Stock sometimes shall be referred to as the
"Liquidation Payment"). Upon any such liquidation, dissolution or winding up of
the Corporation, after the holders of Series B Convertible Preferred Stock shall
have been paid the full Liquidation Preference, the remaining net assets of the
Corporation may be distributed to the holders of stock ranking on liquidation
junior to the Series B Convertible Preferred Stock. Written notice of such
liquidation, dissolution or winding up, stating a payment date, the amount of
the Liquidation Payment and the place where said Liquidation Payment shall be
payable, shall be given by mail, postage prepaid, or by telex to non-U.S.
residents, not less than 20 days prior to the payment date stated therein, to
the holders of record of Series B Convertible Preferred Stock, such notice to be
addressed to each such holder at its address as shown by the records of the
Corporation.
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6. Conversions. The holders of shares of Series B Convertible
Preferred Stock shall have the following conversion rights:
6A. Right to Convert. Subject to the terms and conditions
of this paragraph 6, the holder of any share or shares of Series B Convertible
Preferred Stock shall have the right, at its option at any time, to convert any
such shares of Series B Convertible Preferred Stock (except that upon any
liquidation of the Corporation the right of conversion shall terminate at the
close of business on the business day fixed for payment of the Liquidation
Payment) into an equal number of fully paid and nonassessable shares of Common
Stock, subject to adjustment as provided in subparagraphs 6D and 6E. Such rights
of conversion shall be exercised by the holder thereof by giving written notice
that the holder elects to convert a stated number of shares of Series B
Convertible Preferred Stock into Common Stock and by surrender of a certificate
or certificates for the shares so to be converted to the Corporation at its
principal office (or such other office or agency of the Corporation as the
Corporation may designate by notice in writing to the holders of the Series B
Convertible Preferred Stock) at any time during its usual business hours on the
date set forth in such notice, together with a statement of the name or names
(with address) in which the certificate or certificates for shares of Common
Stock shall be issued.
6B. Issuance of Certificates; Time Conversion Effected.
Promptly after the receipt of the written notice referred to in subparagraph 6A
and surrender of the certificate or certificates for the share or shares of
Series B Convertible Preferred Stock to be converted, the Corporation shall
issue and deliver, or cause to be issued and delivered, to the holder,
registered in such name or names as such holder may direct, a certificate or
certificates for the number of whole shares of Common Stock issuable upon the
conversion of such share or shares of Series B Convertible Preferred Stock. To
the extent permitted by law, such conversion shall be deemed to have been
effected as of the close of business on the date on which such written notice
shall have been received by the Corporation and the certificate or certificates
for such share or shares shall have been surrendered as aforesaid, and at such
time the rights of the holder of such share or shares of Series B Convertible
Preferred Stock shall cease, and the person or persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such conversion shall be deemed to have become the holder or holders of
record of the shares represented thereby.
6C. Fractional Shares; Dividends; Partial Conversion. No
fractional shares shall be issued upon conversion of Series B Convertible
Preferred Stock into Common Stock and no payment or adjustment shall be made
upon any conversion on account of any cash dividends on the Common Stock issued
upon such conversion. At the time of each conversion, the Corporation shall pay
in cash an amount equal to all dividends accrued and unpaid on the shares of
Series B Convertible Preferred Stock surrendered for conversion to the date upon
which such conversion is deemed to take
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place as provided in subparagraph 6B. In case the number of shares of Series B
Convertible Preferred Stock represented by the certificate or certificates
surrendered pursuant to subparagraph 6A exceeds the number of shares converted,
the Corporation shall, upon such conversion, execute and deliver to the holder,
at the expense of the Corporation, a new certificate or certificates for the
number of shares of Series B Convertible Preferred Stock represented by the
certificate or certificates surrendered which are not to be converted. If any
fractional share of Common Stock would, except for the provisions of the first
sentence of this subparagraph 6C, be delivered upon such conversion, the
Corporation, in lieu of delivering such fractional share, shall pay to the
holder surrendering the Series B Convertible Preferred Stock for conversion an
amount in cash equal to the current market price of such fractional share as
determined in good faith by the Board of Directors of the Corporation.
6D. Subdivision or Combination of Common Stock. In case the
Corporation shall at any time subdivide (by any stock split, stock dividend or
otherwise) its outstanding shares of Common Stock into a greater number of
shares, the number of shares of Common Stock issuable upon conversion of each
share of Series B Convertible Preferred Stock shall be increased in proportion
to such increase in outstanding shares, and, conversely, in case the outstanding
shares of Common Stock shall be combined into a smaller number of shares, the
number of shares of Common Stock issuable upon conversion of each share of
Series B Convertible Preferred Stock shall be decreased in proportion to such
decrease in outstanding shares.
6E. Reorganization or Reclassification. If any capital
reorganization or reclassification of the capital stock of the Corporation shall
be effected in such a way that holders of Common Stock shall be entitled to
receive stock, securities or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization or reclassification, lawful
and adequate provisions shall be made whereby each holder of a share or shares
of Series B Convertible Preferred Stock shall thereupon have the right to
receive, upon the basis and upon the terms and conditions specified herein and
in lieu of the shares of Common Stock immediately theretofore receivable upon
the conversion of such share or shares of Series B Convertible Preferred Stock,
such shares of stock, securities or assets as may be issued or payable with
respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such Common Stock immediately theretofore
receivable upon such conversion had such reorganization or reclassification not
taken place, and in any such case appropriate provisions shall be made with
respect to the rights and interests of such holder to the end that the
provisions hereof shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise of such conversion rights.
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6F. Certain Notices. In case at any time:
(i) the Corporation shall declare any dividend upon its
Common Stock payable in cash or stock or make any other distribution to the
holders of its Common Stock;
(ii) the Corporation shall offer for subscription pro
rata to the holders of its Common Stock any additional shares of stock of any
class or other rights;
(iii) there shall be any capital reorganization or
reclassification of the capital stock of the Corporation, or a consolidation or
merger of the Corporation with or into, or a sale of all or substantially all
its assets to, another entity or entities; or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Corporation;
then, in any one or more of said cases, the Corporation shall give, by first
class mail, postage prepaid, or by telex to non U.S. residents, addressed to
each holder of any shares of Series B Convertible Preferred Stock at the address
of such holder as shown on the books of the corporation, (a) at least 20 days'
prior written notice of the date on which the books of the Corporation shall
close or a record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at least 20
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause (a) shall also specify, in the
case of any such dividend, distribution or subscription rights, the date on
which the holders of Common Stock shall be entitled thereto and such notice in
accordance with the foregoing clause (b) shall also specify the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be.
6G. Stock to be Reserved. The Corporation will at all times
reserve and keep available out of its authorized Common Stock, solely for the
purpose of issuance upon the conversion of Series B Convertible Preferred Stock
as herein provided, such number of shares of Common Stock as shall then be
issuable upon the conversion of all outstanding shares of Series B Convertible
Preferred Stock. The Corporation covenants that, assuming the receipt by the
Corporation of the consideration therefor, all
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shares of Common Stock which shall be so issued shall be duly and validly issued
and fully paid and nonassessable.
6H. No Reissuance of Series B Convertible Preferred Stock.
Shares of Series B Convertible Preferred Stock which are converted into shares
of Common Stock as provided herein shall be canceled and shall not be reissued.
6I. Closing of Books. The Corporation will at no time close
its transfer books against the transfer of any Series B Convertible Preferred
Stock or of any shares of Common Stock issued or issuable upon the conversion of
any shares of Series B Convertible Preferred Stock in any manner which
interferes with the timely conversion of such Series B Convertible Preferred
Stock, except as may otherwise be required to comply with applicable securities
laws.
6J. Mandatory Conversion. If the closing share price of
Common Stock listed on the NASDAQ National Market System equals or exceeds $3.50
per share for a period of ten (10) consecutive business days (as determined by
the closing trading price for such ten (10) day period), all outstanding shares
of Series B Convertible Preferred Stock shall automatically convert to shares of
Common Stock.
7. Redemption. The shares of Series B Convertible Preferred
Stock shall be redeemed as follows:
7A. Redemption at Corporation's Option. Upon at least sixty
(60) days' prior written notice, the Corporation may redeem effective at any
time on or after June 23, 2001, from each holder of shares of Series B
Convertible Preferred Stock all of the shares of Series B Convertible Preferred
Stock held by such holder.
7B. Redemption Price and Payment. The Series B Convertible
Preferred Stock to be redeemed pursuant to Subparagraph 7B shall be redeemed by
paying for each share in cash an amount equal to the Liquidation Payment, such
amount also being referred to as the "Redemption Price". Such payment shall be
made in full to the holders entitled thereto.
7C. Redemption Mechanics. At least 20 but not more than 30
days prior to the date of any redemption (the "Redemption Date"), written notice
(the "Redemption Notice") shall be given by the Corporation by mail, postage
prepaid, or by telex to non-U.S. residents for which telex instructions shall
have been provided to the Corporation for such purpose, to each holder of record
(at the close of business on the business day next preceding the day on which
the Redemption Notice is given) of shares of Series B Convertible Preferred
Stock notifying such holder of the redemption and
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specifying the Redemption Price, the Redemption Date and the place where said
Redemption Price shall be payable. The Redemption Notice shall be addressed to
each holder at his address as shown by the records of the Corporation. The
holder shall continue to have the conversion rights set forth in paragraph 6A
prior to the Redemption Date. From and after the close of business on the
Redemption Date, unless there shall have been a default in the payment of the
Redemption Price, all rights of holders of shares of Series B Convertible
Preferred Stock (except the right to receive the Redemption Price) shall cease
with respect to such shares, and such shares shall not thereafter be transferred
on the books of the Corporation or be deemed to be outstanding for any purpose
whatsoever. If the funds of the Corporation legally available for redemption of
shares of Series B Convertible Preferred Stock on the Redemption Date are
insufficient to redeem the total number of outstanding shares of Series B
Convertible Preferred Stock, the holders of shares of Series B Convertible
Preferred Stock shall share ratably in any funds legally available for
redemption of such shares according to the respective amounts which would be
payable with respect to the full number of shares owned by them if all such
outstanding shares were redeemed in full. The shares of Series B Convertible
Preferred Stock not redeemed shall remain outstanding and entitled to all rights
and preferences provided herein for the Series B Convertible Preferred Stock,
including the right to receive cumulative dividends and the conversion right. At
any time thereafter when additional funds of the Corporation are legally
available for the redemption of such shares of Series B Convertible Preferred
Stock, such funds will be used, at the end of the next succeeding fiscal
quarter, to redeem the balance of such shares, or such portion thereof for which
funds are then legally available, on the basis set forth above.
7D. Redeemed or Otherwise Acquired Shares to be Retired.
Any shares of Series B Convertible Preferred Stock redeemed pursuant to this
paragraph 7 or otherwise acquired by the Corporation in any manner whatsoever
shall be canceled and shall not under any circumstances be reissued; and the
Corporation may from time to time take such appropriate corporate action as may
be necessary to reduce accordingly the number of authorized shares of Series B
Convertible Preferred Stock.
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IN WITNESS WHEREOF, Strategic Diagnostics Inc. has caused this
certificate to be duly executed this 25th day of February, 1999.
STRATEGIC DIAGNOSTICS INC.
By: /s/ Richard C. Birkmeyer
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Print Name: Richard C. Birkmeyer
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Title: President/CEO
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