Exhibit 3.1
FORM OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
COSI, INC.
ARTICLE I
NAME
The name of the Corporation is Cosi, Inc.
ARTICLE II
ADDRESS OF REGISTERED OFFICE;
NAME OF REGISTERED AGENT
The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle, 19801. The name of its registered agent at
that address in the State of Delaware is The Corporation Trust Company. The
registered office and/or registered agent of the Corporation may be changed from
time to time by action of the Board of Directors.
ARTICLE III
PURPOSE AND POWERS
The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may now or hereafter be organized under the
Delaware General Corporation Law ("Delaware Law"). It shall have all powers that
may now or hereafter be lawful for a corporation to exercise under Delaware Law.
ARTICLE IV
CAPITAL STOCK
Section 4.1. TOTAL NUMBER OF SHARES OF STOCK. The total number
of shares of capital stock of all classes that the Corporation shall have
authority to issue is 140,000,000 (One Hundred and Forty Million) shares. The
authorized capital stock is divided into 40,000,000 (Forty Million) shares of
preferred stock, of the par value of $.01 each (the "Preferred Stock"), and
100,000,000 (One Hundred Million) shares of common stock, of the par value of
$.01 each (the "Common Stock"). For the purposes of this article IV, references
to the "Board of Directors" shall refer to the Board of Directors of the
Corporation as established in accordance with Article V of the Certificate of
Incorporation and references to "The Certificate of Incorporation" shall refer
to this Restated Certificate of Incorporation as the same may be amended from
time to time.
Section 4.2. PREFERRED STOCK. (a) The shares of Preferred
Stock of the Corporation may be issued from time to time in one or more series
thereof, the shares of each series to have such voting powers, full or limited,
or no voting powers, and such designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof, as are stated and expressed herein or in the resolution
or resolutions providing for the issue of such series, adopted by the board of
directors of the Corporation (the "Board of Directors") as hereinafter provided.
(b) Except as provided by Section 4.3 with respect to the
Series D Preferred Stock (as hereinafter defined), authority is hereby expressly
granted to the Board of Directors, subject to the provisions of this Article IV
and to the limitations prescribed by Delaware Law, to authorize the issue of one
or more series of Preferred Stock and with respect to each such series
-2-
to fix by resolution or resolutions providing for the issue of each series the
voting powers, full or limited, if any, of the shares of such Series and the
designations, preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof. The authority
of the Board of Directors with respect to each series shall include, but not be
limited to, the determination or fixing of the following:
(i) the maximum number of shares to constitute such series
(which may subsequently be increased or decreased by resolutions of the
Board of Directors unless otherwise provided in the resolution
providing for the issue of such series), the distinctive designation
thereof and the stated value thereof if different than the par value
thereof;
(ii) the dividend rate of such series, the conditions and
dates upon which such dividends shall be payable, the relation that
such dividends shall bear to the dividends payable on any other class
or classes of stock or any other series of any class of stock of the
Corporation, and whether such dividends shall be cumulative or
noncumulative;
(iii) whether the shares of such series shall be subject to
redemption, in whole or in part, and if made subject to such redemption
the times, prices and other terms and conditions of such redemption,
including whether or not such redemption may occur at the option of the
Corporation or at the option of the holder or holders thereof or upon
the happening of a specified event;
(iv) the terms and amount of any sinking fund established for
the purchase or redemption of the shares of such series;
-3-
(v) whether or not the shares of such series shall be
convertible into or exchangeable for shares of any other class or
classes of any stock or any other series of any class of stock of the
Corporation, and, if provision is made for conversion or exchange, the
times, prices, rates, adjustments, and other terms and conditions of
such conversion or exchange;
(vi) the extent, if any, to which the holders of shares of
such series shall be entitled to vote with respect to the election of
directors or otherwise;
(vii) the restrictions, if any, on the issue or reissue of any
additional Preferred Stock;
(viii) the rights of the holders of the shares of such series
upon the dissolution of, or upon the subsequent distribution of assets
of, the Corporation; and
(ix) the manner in which any facts ascertainable outside the
resolution or resolutions providing for the issue of such series shall
operate upon the voting powers, designations, preferences, rights and
qualifications, limitations or restrictions of such series.
4.2.2. SERIES D PREFERRED STOCK. There is hereby created a series of
Preferred Stock, designated Series D Preferred Stock having the terms, rights
and privileges set forth in Exhibit A, attached hereto.
4.2.3. COMMON STOCK. The shares of Common Stock of the Corporation
shall be of one and the same class. The holders of Common Stock shall have one
vote per share of Common Stock on all matters on which holders of Common Stock
are entitled to vote.
-4-
ARTICLE V
BOARD OF DIRECTORS
Section 5.1. POWERS OF BOARD OF DIRECTORS. The business and affairs of
the Corporation shall be managed by or under the direction of its Board of
Directors, which shall consist of not fewer than three nor more than fifteen
members. In furtherance, and not in limitation, of the powers conferred by
Delaware Law, the Board of Directors is expressly authorized to:
(a) adopt, amend, alter, change or repeal the By-Laws of the
Corporation; provided, however, that no By-Laws hereafter adopted shall
invalidate any prior act of the directors that would have been valid if such new
By-Laws had not been adopted;
(b) determine the rights, powers, duties, rules and procedures that
affect the power of the Board of Directors to manage and direct the business and
affairs of the Corporation, including the power to designate and empower
committees of the Board of Directors, to elect, appoint and empower the officers
and other agents of the Corporation, and to determine the time and place of, and
the notice requirements for, Board meetings, as well as the quorum and voting
requirements for, and the manner of taking, Board action; and
(c) exercise all such powers and do all such acts as may be exercised
or done by the Corporation, subject to the provisions of Delaware Law, this
Certificate of Incorporation, and the By-Laws of the Corporation.
Section 5.2. NUMBER OF DIRECTORS. Except as may be provided in a
resolution or resolutions providing for any series of Preferred Stock pursuant
to Article IV hereof with respect to any directors elected by the holders of
such series, and subject to Section 5.1 of this
-5-
Certificate of Incorporation, the number of directors constituting the Board of
Directors shall be determined from time to time exclusively by a vote of a
majority of the Board of Directors in office at the time of such vote.
Section 5.3. CLASSIFIED BOARD OF DIRECTORS. The directors, other than
those who may be elected solely by the holders of shares of any class or series
of stock having a preference over the Common Stock of the Corporation as to
dividends or to distributions upon liquidation or dissolution and winding-up of
the Corporation pursuant to the terms of Article IV of the Certificate of
Incorporation of the Corporation, shall be divided into three classes, Class I,
Class II and Class III, with each class to be as nearly equal in number as
reasonably possible, and with the initial term of office of the Class I
directors to expire at the 2003 annual meeting of stockholders, the initial term
of office of the Class II directors to expire at the 2004 annual meeting of
stockholders and the initial term of office of the Class III directors to expire
at the 2005 annual meeting of stockholders, in each case upon the election and
qualification of their successors. Subject to the rights of the holders of any
class or series of stock having a preference over the Common Stock of the
Corporation as to dividends or to distributions upon liquidation or dissolution
and winding-up of the Corporation, commencing with the 2003 annual meeting of
stockholders, directors elected to succeed those directors whose terms have
thereupon expired shall be elected to a term of office to expire at the third
succeeding annual meeting of stockholders after their election, and upon the
election and qualification of their successors. Notwithstanding the foregoing,
for any director who is an employee of the Corporation or any of its affiliates
at the time of his or her election to the Board, it is a qualification for
service as a director that such director remain so employed, so that the term of
such director will automatically terminate upon termination of such director's
employment with the Corporation or such affiliate, for any reason, unless the
Board, by majority of the members of the Board of
-6-
Directors, otherwise determines. If the number of directors is changed, any
increase or decrease shall be apportioned among the classes in such manner as
the Board of Directors of the Corporation shall determine, but in no case will a
decrease in the number of directors shorten the term of any incumbent director.
Section 5.4. VACANCIES. Except as may be provided in a resolution or
resolutions providing for any series of Preferred Stock pursuant to Article IV
hereof with respect to any directors elected by the holders of such series, any
vacancies in the Board of Directors for any reason and any newly created
directorship resulting by reason of any increase in the number of directors may
be filled only by the Board of Directors (and not by the Stockholders), acting
by a majority of the remaining directors then in office, although less than a
quorum, or by a sole remaining director, and any directors so appointed shall
hold office until the next election of the class of which such directors have
been chosen and until their successors are elected and qualified.
Section 5.5. REMOVAL OF DIRECTORS. Except as may be provided in a
resolution or resolutions providing for any series of Preferred Stock pursuant
to Article IV hereof with respect to any directors elected by the holders of
such series, any director, or the entire Board of Directors, may be removed from
office at any time, but only for cause, and only by the affirmative vote of the
holders of at least 66 2/3% of the voting power of all of the shares of capital
stock of the Corporation then entitled to vote generally in the election of
directors, voting together as a single class. For the purposes of this Section
5.5, "cause" shall mean the wilful and continuous failure of a director to
substantially perform such director's duties to the Corporation (other than any
such failure resulting from incapacity due to physical or mental illness) or the
wilful engaging by a director in gross misconduct materially and demonstrably
injurious to the Corporation.
-7-
ARTICLE VI
STOCKHOLDER ACTIONS AND MEETINGS OF STOCKHOLDERS
Except as may be provided in a resolution or resolutions
providing for any class or series of Preferred Stock pursuant to Article IV
hereof, any action required or permitted to be taken by the stockholders of the
Corporation must be effected at a duly called annual or special meeting of such
holders and may not be effected by any written consent in lieu of a meeting by
such holders. Subject to the rights of the holders of any series of Preferred
Stock, special meetings of stockholders of the Corporation may be called only by
the Chairman of the Board or by the Secretary upon direction of the Board of
Directors pursuant to a resolution adopted by a majority of the members of the
Board of Directors then in office. Elections of directors need not be by written
ballot, unless otherwise provided in the By-Laws. For purposes of all meetings
of stockholders, a quorum shall consist of a majority of the shares entitled to
vote at such meeting of stockholders, unless otherwise required by law.
ARTICLE VII
LIMITATION ON LIABILITY OF DIRECTORS
No person shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
including without limitation directors serving on committees of the Board of
Directors; provided, however, that the foregoing shall not eliminate or limit
the liability of a director (i) for any breach of the director's duty of loyalty
to the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware Law, or (iv) for any transaction from
which the director derived an improper personal benefit. If Delaware Law is
amended hereafter to authorize corporate action further eliminating
-8-
or limited the personal liability of directors, then the liability of a director
of the Corporation shall be eliminated or limited to the fullest extent
permitted by Delaware Law, as so amended. Any amendment, repeal or modification
of this Article VII shall not adversely affect any right or protection of a
director of the Corporation existing hereunder with respect to any act or
omission occurring prior to such amendment, repeal or modification.
ARTICLE VIII
INDEMNIFICATION
The Corporation shall indemnify any director or officer and
may indemnify any employee or agent to the fullest extent authorized or
permitted by Section 145 of the Delaware General Corporation Law, as now or
hereafter in effect.
ARTICLE IX
CERTAIN BUSINESS COMBINATIONS
Section 9.1. VOTE REQUIRED FOR CERTAIN BUSINESS COMBINATIONS. Except as
otherwise expressly provided in Section 9.2, in addition to any affirmative vote
required by law or by any other provision of the Certificate of Incorporation of
the Corporation, the affirmative vote of the holders of not less than 80% of the
outstanding shares of "Voting Stock" (as hereinafter defined) of the Corporation
voting together as a single class shall be required for the approval or
authorization of any "Business Combination" (as hereinafter defined) of the
Corporation with any "Related Person" (as hereinafter defined). For the purpose
of this Article:
(A) The term "Business Combination" shall mean (1) any merger
or consolidation of the Corporation or a "Subsidiary" (as hereinafter
defined) of the Corporation with or into a Related Person or of a
Related Person with or into the Corporation or a Subsidiary
-9-
of the Corporation; (2) any sale, lease, exchange, transfer, or other
disposition, including, without limitation, a mortgage or any other
hypothecation or transfer as collateral, of all or any "Substantial
Part" (as hereinafter defined) of the assets either of the Corporation
(including, without limitation, any voting securities of a Subsidiary)
or of a Subsidiary of the Corporation to a Related Person; (3) the
issuance of any securities (other than by way of a distribution to
stockholders made pro rata to all holders of the class of stock to
receive the distribution) of the Corporation or a Subsidiary of the
Corporation to a Related Person; (4) the acquisition by the Corporation
or a Subsidiary of the Corporation of any securities of a Related
Person; (5) any recapitalization that would have the effect, directly
or indirectly, of increasing the voting power of a Related Person; (6)
any merger of the Corporation into a Subsidiary of the Corporation; or
(7) any agreement, contract, or other arrangement providing for any of
the transactions described in this definition of "Business
Combination."
(B) The term "Related Person" shall mean and include any
individual, corporation, partnership, or other person or entity which,
together with its "Affiliates" and "Associates," "Beneficially Owns"
(as hereinafter defined), in the aggregate ten percent (10%) or more of
the outstanding Voting Stock of the Corporation, and any Affiliate or
Associate of any such individual, corporation, partnership, or other
person or entity.
(C) The term "Substantial Part" shall mean more than 80% of
the book value of the total consolidated assets of the Corporation as
reported in the consolidated financial statements of the Corporation
and its subsidiaries as of the end of its most recent fiscal year
ending prior to the time as of which a "Substantial Part" is to be
determined.
-10-
(D) The term "Voting Stock" shall mean all outstanding shares
of capital stock of the Corporation entitled to vote generally in the
election of directors of the Corporation and each reference to a
percentage of shares of Voting Stock shall refer to such percentage of
the votes entitled to be cast by such shares.
(E) The terms "Affiliate" and "Associate" shall have the
meanings set forth in Rule 12b-2 under the Securities Exchange Act of
1934, as amended.
(F) The term "Beneficially Owns" shall have the meaning set
forth in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, provided, however, that, any shares of Voting Stock of the
Corporation that any Related Person has the right to acquire pursuant
to any agreement, or upon exercise of conversion rights, warrants or
options, or otherwise, shall be deemed Beneficially Owned by the
Related Person whether immediately exercisable or exercisable within
ten years of the date as of which Beneficial Ownership is to be
determined.
(G) The term "Subsidiary" with respect to the Corporation
shall mean any corporation, partnership, limited liability company,
business trust or similar entity of which a majority of any class of
any equity security is owned directly or indirectly by the Corporation.
Section 9.2. WHEN HIGHER VOTE IS NOT REQUIRED. The provisions
of Section 9.1 shall not be applicable to any particular Business Combination
and such Business Combination shall require only such affirmative vote as may be
required by law or by any other provision of the Certificate of Incorporation of
the Corporation, if all of the conditions specified in either of the following
paragraphs (A) or (B) are met:
(A) the Business Combination shall have been approved by a
vote of not less than two-thirds of the Directors, or
-11-
(B) all of the following conditions shall have been met:
(1) the aggregate amount of cash and the Fair Market
Value (as hereinafter defined) as of the date of the
consummation of the Business Combination of the consideration,
other than cash, to be received per share by holders of Common
Stock in such Business Combination shall be at least equal to
the highest of the following:
(a) if applicable, the highest price per
share (including any brokerage commissions, transfer
taxes, and soliciting dealers' fees) paid by the
Related Person for any shares of Common Stock
acquired by it (i) within the two year period
immediately prior to the first public announcement of
the proposal of the Business Combination (the
"Announcement Date") or (ii) in the transaction in
which it became a Related Person; or
(b) the Fair Market Value per share of
Common Stock on the Announcement Date or on the date
on which the Related Person became a Related Person
(such latter date is referred to in this Article as
the "Determination Date"), whichever is higher; and
(2) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the
Business Combination of the consideration, other than cash, to
be received per share by holders of shares of any class or
series of outstanding Voting Stock, other than Common Stock,
shall be at least equal to the highest of the following (it
being intended that the requirements of this subparagraph
(B)(2) shall be
-12-
required to be met with respect to every class or series of
outstanding capital stock of the Corporation other than Common
Stock, whether or not the Related Person has previously
acquired any shares of such class or series of Voting Stock):
(a) if applicable, the highest per share
price (including any brokerage commission, transfer
taxes, and soliciting dealers' fees) paid by the
Related Person for any shares of such class or series
of Voting Stock acquired by it (i) within the two
year period immediately prior to the Announcement
Date or (ii) in the transaction in which it became a
Related Person, whichever is higher; or
(b) if applicable, the Redemption Price (as
hereinafter defined) of the shares of such class or
series, or if such shares have no Redemption Price,
the highest amount per share which such class or
series would be entitled to receive upon liquidation
of the Corporation on the Announcement Date or the
Determination Date, whichever is higher; or
(c) the Fair Market Value per share of such
class or series of Voting Stock on the Announcement
Date or on the Determination Date, whichever is
higher; and
(3) the consideration to be received in such Business
Combination by holders of each class or series of outstanding
Voting
-13-
Stock (including Common Stock) shall be in cash or in the same
form as the Related Person has previously paid for shares of
such class or series of Voting Stock; provided, however, that
if the Related Person has paid for shares of any class or
series of Voting Stock with varying forms of consideration,
the form of consideration for such class or series of Voting
Stock shall be either cash or the form used to acquire the
largest number of shares of such class or series of Voting
Stock previously acquired by it; and
(4) a proxy statement responsive to the requirements
of the Securities Exchange Act of 1934, as amended, shall have
been mailed to public stockholders of the Corporation for the
purpose of soliciting stockholder approval of the Business
Combination and shall have contained at the front thereof, in
a prominent place, any recommendations as to the advisability
(or inadvisability) of the Business Combination that the
Directors, or any of them, may choose to state and, if deemed
advisable by a majority of the Directors, an opinion of a
reputable investment banking firm as to the fairness (or not)
of the terms of the Business Combination, from the point of
view of the remaining public stockholders of the Corporation
(such investment banking firm to be selected by a majority of
the Directors and to be paid a reasonable fee for their
services by the Corporation upon receipt of the opinion).
Section 9.3. CERTAIN DEFINITIONS AND ADDITIONAL PROVISIONS.
For the purposes of this Article:
(A) "Fair Market Value" shall mean:
-14-
(1) in the case of stock, the highest closing sale
price during the 30-day period immediately preceding the date
in question of a share of such stock on the Composite Tape for
New York Stock Exchange Listed Stocks, or, if such stock is
not quoted on the Composite Tape, on the New York Stock
Exchange, or, if such stock is not listed on such Exchange, on
the principal United States securities exchange registered
under the Securities Exchange Act of 1934, as amended, on
which such stock is listed, or, if such stock is not listed on
any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period
preceding the date in question on the Nasdaq Stock Market or
any quotations system then generally in use, or, if no such
quotations are available, the Fair Market Value on the date in
question of a share of such stock as determined by the
Directors in good faith, which determination shall be final;
and
(2) in the case of property other than cash or stock,
the Fair Market Value of such property on the date in question
as determined by the Directors in good faith, which
determination shall be final.
(B) The Board of Directors, with the approval of a majority of
the total number of Directors, shall have the power and duty to determine, on
the basis of information known to it after reasonable inquiry, all facts
necessary to determine compliance with this Article, including, without
limitation, (i) whether a person is a Related Person, (ii) the number of shares
of Voting Stock Beneficially Owned by any person, (iii) whether a person is an
Affiliate or Associate of another person, (iv) whether the applicable conditions
set forth in paragraph (B) of Section 2
-15-
have been met with respect to any Business Combination, and (v) whether the
proposed transaction is a Business Combination. Any such determinations shall be
final.
Section 9.4. AMENDMENT OF THIS ARTICLE. This Article may be
amended, altered, changed, or repealed only by the affirmative vote of the
holders of at least 80% of the outstanding shares of Voting Stock voting
together as a single class unless the proposed amendment, alteration, change, or
repeal has been recommended to the stockholders by the Board of Directors with
the approval of at least two-thirds of the Directors, in which event the
proposed amendment, alteration, change, or repeal shall require for approval the
affirmative vote of the holders of at least 66 2/3% of the outstanding shares of
Voting Stock, voting as a single class.
ARTICLE X
AMENDMENT OF BY-LAWS
The Board of Directors shall have the power to adopt, amend,
alter, change or repeal any By-Laws of the Corporation. In addition, the
stockholders of the Corporation may adopt, amend, alter, change or repeal any
By-Laws of the Corporation by the affirmative vote of the holders of at least 66
2/3% of the voting power of all of the shares of capital stock of the
Corporation then entitled to vote generally in the election of directors, voting
together as a single class (notwithstanding the fact that a lesser percentage
may be specified by Delaware Law).
ARTICLE XI
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation hereby reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of Incorporation in
any manner permitted by Delaware
-16-
Law and all rights and powers conferred upon stockholders, directors, and
officers herein are granted subject to this reservation. Except as may be
provided in a resolution or resolutions providing for any series of Preferred
Stock pursuant to Article IV hereof and that relate to such series of Preferred
Stock, any such amendment, alteration, change or repeal shall require the
affirmative vote of both (a) a majority of the members of the Board of Directors
then in office and (b) a majority of the voting power of all of the shares of
capital stock of the Corporation entitled to vote generally in the election of
directors, voting together as a single class; except that any proposal to amend,
alter, change or repeal the provisions of Sections 5.3 and 5.5 of Article V,
Article VI, Article X and this Article XI shall require the affirmative vote of
66 2/3% of the voting power of all of the shares of capital stock entitled to
vote generally in the election of directors, voting together as a single class;
and except that any proposal to amend, alter, change or repeal the provisions of
Article IX shall require the affirmative vote set forth therein.
ARTICLE XII
SEVERABILITY
In the event that any provision of this Certificate of
Incorporation (including any provision within a single Section, paragraph or
sentence) is held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, the remaining provisions are severable and shall remain
enforceable to the full extent permitted by law.
THE UNDERSIGNED, being the[Insert signatory's position], for
the purpose of amending and restating the Certificate of Incorporation of the
Corporation pursuant to Delaware Law, does make this Certificate, hereby
declaring and certifying that this is the act and deed of the Corporation and
that the facts herein stated are true, and accordingly have hereunto set my hand
as of .
-17-
------------------------------
Name:
Title:
-18-
EXHIBIT A
TO AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
COSI, INC.
SERIES D PREFERRED STOCK
One million (1,000,000) shares of the Corporation's Preferred Stock
shall be designated as "Series D Preferred Stock", One Cent ($01) par value per
share (the "Series D Preferred Stock") and the number of shares constituting
such series shall be 1,000,000.
SECTION 1. DIVIDENDS AND DISTRIBUTIONS.
1A. Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Series D Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, (i) cash dividends in an amount per share (rounded to
the nearest cent) equal to 100 times the aggregate per share amount of all cash
dividends declared or paid on the common stock of the Corporation, $0.01 par
value per share, of the Corporation (collectively, the "Common Stock") and (ii)
a preferential cash dividend (the "Preferential Dividends"), if any, in
preference to the holders of Common Stock, on the first day of February, May,
August and November of each year (each a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series D Preferred Stock, payable in an
amount (except in the case of the first Quarterly Dividend Payment if the date
of the first issuance of Series D Preferred Stock is a date other than a
Quarterly Dividend Payment date, in which case such payment shall be a prorated
amount of such amount) equal to $0.10 per share of Series D Preferred Stock less
the per share amount of all cash dividends declared on the Series D Preferred
Stock pursuant to clause (i) of this sentence since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series D Preferred Stock. In the event the Corporation shall, at any time after
the issuance of any share or fraction of a share of Series D Preferred Stock,
make any distribution on the shares of Common Stock of the Corporation, whether
by way of a dividend or a reclassification of stock, a recapitalization,
reorganization or partial liquidation of the Corporation or otherwise, which is
payable in cash or any debt security, debt instrument, real or personal property
or any other property (other than cash dividends subject to the immediately
preceding sentence, a distribution of shares of Common Stock or other capital
stock of the Corporation or a distribution of rights or warrants to acquire any
such share, including any debt security convertible into or exchangeable for any
such share, at a price less than the Fair Market Value (as hereinafter defined)
of such share), then, and in each such event, the Corporation shall
simultaneously pay (and not be permitted to accrue) on each then outstanding
share of Series D Preferred Stock of the Corporation a distribution, in like
kind, of 100 times such distribution paid on a share of Common Stock (subject to
the provisions for adjustment hereinafter set forth). The dividends and
distributions on the Series D Preferred Stock to which holders thereof are
entitled pursuant to clause (i) of the first sentence of this paragraph and
pursuant to the second sentence of this paragraph are hereinafter referred to as
"Dividends" and the multiple of such cash and
non-cash dividends on the Common Stock applicable to the determination of the
Dividends, which shall be 100 initially but shall be adjusted from time to time
as hereinafter provided, is hereinafter referred to as the "Dividend Multiple."
In the event the Corporation shall at any time after [[_________]] (the "Rights
Declaration Date")(1), (i) declare or pay any dividend or make any distribution
on Common Stock payable in shares of Common Stock, (ii) effect a subdivision or
split or a combination, consolidation or reverse split of the outstanding shares
of Common Stock into a greater or lesser number of shares of Common Stock, or
(iii) issue any shares of its capital stock in a reclassification of the Common
Stock (including any such reclassification in connection with a consolidation or
merger in which the Corporation is the continuing or surviving Corporation),
then in each such case the Dividend Multiple thereafter applicable to the
determination of the amount of Dividends which holders of shares of Series D
Preferred Stock shall be entitled to receive shall be the Dividend Multiple
applicable immediately prior to such event multiplied by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
1B. The Corporation shall declare each Dividend at the same time it
declares any cash or non-cash dividend or distribution on the Common Stock in
respect of which a Dividend is required to be paid. No cash or non-cash dividend
or distribution on the Common Stock in respect of which a Dividend is required
to be paid shall be paid or set aside for payment on the Common Stock unless a
Dividend in respect of such dividend or distribution on the Common Stock shall
be simultaneously paid, or set aside for payment, on the Series D Preferred
Stock.
1C. Preferential Dividends shall begin to accrue on outstanding shares
of Series D Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issuance of any shares of Series D Preferred Stock.
Accrued but unpaid Preferential Dividends shall cumulate but shall not bear
interest. Preferential Dividends paid on the shares of Series D Preferred Stock
in an amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.
SECTION 2. VOTING RIGHTS. The holders of shares of Series D Preferred Stock
shall have the following voting rights:
2A. Subject to the provisions for adjustment hereinafter set forth,
each share of Series D Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the holders of the Common Stock. The
number of votes which a holder of Series D Preferred Stock is entitled to cast,
as the same may be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Vote Multiple." In the event the Corporation
shall at any time after the Rights Declaration Date, (i) declare or pay any
dividend on Common Stock payable in shares of Common Stock, (ii) effect a
subdivision or split or a combination, consolidation or reverse split of the
outstanding shares of Common Stock into a greater or lesser number of shares of
Common Stock, or (iii) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger
- ----------
(1) Date of the Rights Agreement
-2-
in which the Corporation is the continuing or surviving Corporation), then in
each such case the Vote Multiple thereafter applicable to the determination of
the number of votes per share to which holders of shares of Series D Preferred
Stock shall be entitled after such event shall be the Vote Multiple immediately
prior to such event multiplied by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
2B. Except as otherwise provided herein, in the Amended and Restated
Certificate of Incorporation or By-laws, the holders of shares of Series D
Preferred Stock and the holders of shares of Common Stock shall vote together as
one class on all matters submitted to a vote of shareholders of the Corporation.
2C. In the event that the Preferred Dividends accrued on the Series D
Preferred Stock for four or more quarterly dividend periods, whether consecutive
or not, shall not have been declared and paid or irrevocably set aside for
payment, the holders of record of Junior Preferred Stock of the Corporation of
all series (including the Series D Preferred Stock), other than any series in
respect of which such right is expressly withheld by the Amended and Restated
Certificate of Incorporation or the authorizing resolutions included in any
Certificate of Designations therefor, shall have the right, at the next meeting
of shareholders called for the election of directors, to elect two members to
the Board of Directors, which directors shall be in addition to the number
required by the By-laws prior to such event, to serve until the next Annual
Meeting and until their successors are elected and qualified or their earlier
resignation, removal or incapacity or until such earlier time as all accrued and
unpaid Preferential Dividends upon the outstanding shares of Series D Preferred
Stock shall have been paid (or irrevocably set aside for payment) in full. The
holders of shares of Series D Preferred Stock shall continue to have the right
to elect directors as provided by the immediately preceding sentence until all
accrued and unpaid Preferential Dividends upon the outstanding shares of Series
D Preferred Stock shall have been paid (or irrevocably set aside for payment) in
full. Such directors may be removed and replaced by such shareholders, and
vacancies in such directorships may be filled only by such shareholders (or by
the remaining director elected by such shareholders, if there be one) in the
manner permitted by law; provided, however, that any such action by shareholders
shall be taken at a meeting of shareholders and shall not be taken by written
consent thereto.
2C. Except as otherwise required by the Amended and Restated
Certificate of Incorporation or By-laws or set forth herein, holders of Series D
Preferred Stock shall have no other special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for the taking of any corporate
action.
SECTION 3. CERTAIN RESTRICTIONS.
3A. Whenever Preferential Dividends or Dividends are in arrears or the
Corporation shall be in default of payment thereof, thereafter and until all
accrued and unpaid Preferential Dividends and Dividends, whether or not
declared, on shares of Series D Preferred Stock outstanding shall have been paid
or set irrevocably aside for payment in full, and in addition to
-3-
any and all other rights which any holder of shares of Series D Preferred Stock
may have in such circumstances, the Corporation shall not
i. declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration,
any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series D
Preferred Stock;
ii. declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity as to dividends with
the Series D Preferred Stock, unless dividends are paid
ratably on the Series D Preferred Stock and all such parity
stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all
such shares are then entitled if the full dividends accrued
thereon were to be paid;
iii. except as permitted by subparagraph (iv) of this paragraph
3A., redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with
the Series D Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (both as to dividends and
upon liquidation, dissolution or winding up) to the Series D
Preferred Stock; or
iv. purchase or otherwise acquire for consideration any shares of
Series D Preferred Stock, or any shares of stock ranking on a
parity with the Series D Preferred Stock (either as to
dividends or upon liquidation, dissolution or winding up),
except in accordance with a purchase offer made to all holders
of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates
and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series or
classes.
3B. The Corporation shall not permit any Subsidiary (as hereinafter
defined) of the Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 3, purchase or otherwise acquire such shares at
such time and in such manner. A "Subsidiary" of the Corporation shall mean any
Corporation or other entity of which securities or other ownership interests
having ordinary voting power sufficient to elect a majority of the board of
directors of such Corporation or other entity or other persons performing
similar functions are beneficially owned, directly or indirectly, by the
Corporation or by any Corporation or other entity that is otherwise controlled
by the Corporation.
3C. The Corporation shall not issue any shares of Series D Preferred
Stock except upon exercise of Rights issued pursuant to that certain Rights
Agreement dated as of [[_______, 2002]], between the Corporation and
[[_______]], as Rights Agent, a copy of which is on file with the Secretary of
the Corporation at its principal executive office and shall be made available
-4-
to shareholders of record without charge upon written request therefor addressed
to said Secretary. Notwithstanding the foregoing sentence, nothing contained in
the provisions shall prohibit or restrict the Corporation from issuing for any
purpose any series of Preferred Stock with rights and privileges similar to,
different from, or greater than, those of the Series D Preferred Stock.
SECTION 4. REACQUIRED SHARES. Any shares of Series D Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
upon their retirement and cancellation shall become authorized but unissued
shares of Preferred Stock, without designation as to series, and such shares may
be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors.
SECTION 5. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (i) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series D Preferred Stock unless the holders of shares of Series D Preferred
Stock shall have received, subject to adjustment as hereinafter provided, (A)
$100 per one one-hundredth (1/100) share plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment or, (B) if greater than the amount specified in clause (i)(A) of
this sentence, an amount equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, as the same may be adjusted as
hereinafter provided and (ii) to the holders of stock ranking on a parity upon
liquidation, dissolution or winding up with the Series D Preferred Stock, unless
simultaneously therewith distributions are made ratably on the Series D
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of shares of Series D Preferred Stock are
entitled under clause (i)(A) of this sentence and to which the holders of such
parity shares are entitled, in each case upon such liquidation, dissolution or
winding up. The amount to which holders of Series D Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the Corporation pursuant
to clause (i)(B) of the foregoing sentence is hereinafter referred to as the
"Participating Liquidation Amount" and the multiple of the amount to be
distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the Corporation applicable pursuant to said clause
to the determination of the Participating Liquidation Amount, as said multiple
may be adjusted from time to time as hereinafter provided, is hereinafter
referred to as the "Liquidation Multiple." In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare or pay any dividend on
Common Stock payable in shares of Common Stock, (ii) effect a subdivision or
split or a combination, consolidation or reverse split of the outstanding shares
of Common Stock into a greater or lesser number of shares of Common Stock, or
(iii) issue any shares of its capital stock in a reclassification of the Common
Stock (including any such reclassification in connection with a consolidation or
merger in which the Corporation is continuing or surviving Corporation), then,
in each such case, the Liquidation Multiple thereafter applicable to the
determination of the Participating Liquidation Amount to which holders of Series
D Preferred Stock shall be entitled after such event shall be the Liquidation
Multiple applicable immediately prior to such event multiplied by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
-5-
SECTION 6. CERTAIN RECLASSIFICATION AND OTHER EVENTS.
6A. In the event that holders of shares of Common Stock of the
Corporation receive after the Rights Declaration Date, in respect of their
shares of Common Stock any share of capital stock of the Corporation (other than
any share of Common Stock of the Corporation), whether by way of
reclassification, recapitalization, reorganization, dividend or other
distribution or otherwise (a "Transaction"), then, and in each such event, the
dividend rights, voting rights and rights upon the liquidation, dissolution or
winding up of the Corporation of the shares of Series D Preferred Stock shall be
adjusted so that after such event the holders of Series D Preferred Stock shall
be entitled, in respect of each share of Series D Preferred Stock held, in
addition to such rights in respect thereof to which such holder was entitled
immediately prior to such adjustment, to (i) such additional dividends as equal
the Dividend Multiple in effect immediately prior to such Transaction multiplied
by the additional dividends which the holder of a share of Common Stock shall be
entitled to receive by virtue of the receipt in the Transaction of such capital
stock, (ii) such additional voting rights as equal the Vote Multiple in effect
immediately prior to such Transaction multiplied by the additional voting rights
which the holder of a share of Common Stock shall be entitled to receive by
virtue of the receipt in the Transaction of such capital stock and (iii) such
additional distributions upon liquidation, dissolution or winding up of the
Corporation as equal the Liquidation Multiple in effect immediately prior to
such Transaction multiplied by the additional amount which the holder of a share
of Common Stock shall be entitled to receive upon liquidation, dissolution or
winding up of the Corporation by virtue of the receipt in the Transaction of
such capital stock, as the case may be, all as provided by the terms of such
capital stock.
6B. In the event that holders of shares of Common Stock of the
Corporation receive after the Rights Declaration Date, in respect of their
shares of Common Stock any right or warrant to purchase Common Stock (including
as such a right, for all purposes of this paragraph, any security convertible
into or exchangeable for Common Stock) at a purchase price per share less than
the Fair Market Value of a share of Common Stock on the date of issuance of such
right or warrant, then and in each such event the dividend rights, voting rights
and rights upon the liquidation, dissolution or winding up of the Corporation of
the shares of Series D Preferred Stock shall each be adjusted so that after such
event the Dividend Multiple, the Vote Multiple and the Liquidation Multiple
shall each be the product of the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple, as the case may be, in effect immediately prior to such
event multiplied by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock which could be
acquired upon exercise in full of all such rights or warrants and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number of shares
of Common Stock which could be purchased, at the Fair Market Value of the Common
Stock at the time of such issuance, by the maximum aggregate consideration
payable upon exercise in full of all such rights or warrants.
6C. In the event that holders of shares of Common Stock of the
Corporation receive after the Rights Declaration Date in respect of their shares
of Common Stock any right or warrant to purchase capital stock of the
Corporation (other than shares of Common Stock), including as such a right, for
all purposes of this paragraph, any security convertible into or
-6-
exchangeable for capital stock of the Corporation (other than Common Stock), at
a purchase price per share less than the Fair Market Value of such shares of
capital stock on the date of issuance of such right or warrant, then and in each
such event the dividend rights, voting rights and rights upon liquidation,
dissolution or winding up of the Corporation of the shares of Series D Preferred
Stock shall each be adjusted so that after such event each holder of a share of
Series D Preferred Stock shall be entitled, in respect of each share of Series D
Preferred Stock held, in addition to such rights in respect thereof to which
such holder was entitled immediately prior to such event, to receive (i) such
additional dividends as equal the Dividend Multiple in effect immediately prior
to such event multiplied, first, by the additional dividends to which the holder
of a share of Common Stock shall be entitled upon exercise of such right or
warrant by virtue of the capital stock which could be acquired upon such
exercise and multiplied again by the Discount Fraction (as hereinafter defined)
and (ii) such additional voting rights as equal the Vote Multiple in effect
immediately prior to such event multiplied, first, by the additional voting
rights to which the holder of a share of Common Stock shall be entitled upon
exercise of such right or warrant by virtue of the capital stock which could be
acquired upon such exercise and multiplied again by the Discount Fraction and
(iii) such additional distributions upon liquidation, dissolution or winding up
of the Corporation as equal the Liquidation Multiple in effect immediately prior
to such event multiplied, first, by the additional amount which the holder of a
share of Common Stock shall be entitled to receive upon liquidation, dissolution
or winding up of the Corporation upon exercise of such right or warrant by
virtue of the capital stock which could be acquired upon such exercise and
multiplied again by the Discount Fraction. For purposes of this paragraph, the
"Discount Fraction" shall be a fraction the numerator of which shall be the
difference between the Fair Market Value of a share of the capital stock subject
to a right or warrant distributed to holders of shares of Common Stock of the
Corporation as contemplated by this paragraph immediately after the distribution
thereof and the purchase price per share for such share of capital stock
pursuant to such right or warrant and the denominator of which shall be the Fair
Market Value of a share of such capital stock immediately after the distribution
of such right or warrant.
6D. For purposes of this Attachment IV, the "Fair Market Value" of a
share of capital stock of the Corporation (including a share of Common Stock) on
any date shall be deemed to be the average of the daily closing price per share
thereof over the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that, in the event
that such Fair Market Value of any such share of capital stock is determined
during a period which includes any date that is within 30 Trading Days after (i)
the ex-dividend date for a dividend or distribution on stock payable in shares
of such stock or securities convertible into shares of such stock, or (ii) the
effective date of any subdivision, split, combination, consolidation, reverse
stock split or reclassification of such stock, then, and in each such case, the
Fair Market Value shall be appropriately adjusted by the Board of Directors of
the Corporation to take into account ex-dividend or post-effective date trading.
The closing price for any day shall be the last sale price, regular way, or, in
case, no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, as reported in the applicable transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the shares are listed or admitted to trading or, if the shares
are not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
-7-
or such other system then in use, or if on any such date the shares are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the shares
selected by the Board of Directors of the Corporation. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the shares are listed or admitted to trading is open for the transaction of
business or, if the shares are not listed or admitted to trading on any national
securities exchange, on which the New York Stock Exchange or such other national
securities exchange as may be selected by the Board of Directors of the
Corporation is open. If the shares are not publicly held or not so listed or
traded on any day within the period of 30 Trading Days applicable to the
determination of Fair Market Value thereof as aforesaid, "Fair Market Value"
shall mean the fair market value thereof per share as determined in good faith
by the Board of Directors of the Corporation. In either case referred to in the
foregoing sentence, the determination of Fair Market Value shall be described in
a statement filed with the Secretary of the Corporation.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each outstanding share of
Series D Preferred Stock shall at the same time be similarly exchanged for or
changed into the aggregate amount of stock, securities, cash and/or other
property (payable in like kind), as the case may be, for which or into which
each share of Common Stock is changed or exchanged multiplied by the highest of
the Vote Multiple, the Dividend Multiple or the Liquidation Multiple in effect
immediately prior to such event.
SECTION 8. EFFECTIVE TIME OF ADJUSTMENTS.
a. Adjustments to the Series D Preferred Stock required by the provisions shall
be effective as of the time at which the event requiring such adjustments
occurs.
b. The Corporation shall give prompt written notice to each holder of a share of
Series D Preferred Stock of the effect of any adjustment to the voting rights,
dividend rights or rights upon liquidation, dissolution or winding up of the
Corporation of such shares required by the provisions. Notwithstanding the
foregoing sentence, the failure of the Corporation to give such notice shall not
affect the validity of or the force or effect of or the requirement for such
adjustment.
SECTION 9. NO REDEMPTION. The shares of Series D Preferred Stock shall not be
redeemable at the option of the Corporation or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Corporation may
acquire shares of Series D Preferred Stock in any other manner permitted by law,
the provisions and the Amended and Restated Certificate of Incorporation of the
Corporation.
SECTION 10. RANKING. Unless otherwise provided in the Amended and Restated
Certificate of Incorporation of the Corporation or a Certificate of Designations
relating to a subsequent series of preferred stock of the Corporation, the
Series D Preferred Stock shall rank junior to all other series of the
Corporation's preferred stock as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up and senior to
the Common Stock.
-8-
SECTION 11. AMENDMENT. The hereof and the Amended and Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner which would
adversely affect the rights, privileges or powers of the Series D Preferred
Stock without, in addition to any other vote of shareholders required by law,
the affirmative vote of the holders of 67% or more of the outstanding shares of
Series D Preferred Stock, voting together as a single class. This Section 11
shall not be amended in any manner without the affirmative vote of the holders
of 67% or more of the outstanding shares of Series D Preferred Stock, voting
together a size class.
-9-