1
STATEMENT OF DESIGNATION OF SHARES
OF
SURMODICS, INC.
I hereby certify that the following resolutions were duly adopted by
the Board of Directors of SurModics, Inc. on November 13, 2000:
"Designation of Additional Series A Preferred Stock
WHEREAS, the Company's current authorized capitalization
consists of 45,000,000 authorized shares of Common Stock, 150,000
authorized shares of Series A Preferred Stock and 4,850,000 authorized
but undesignated shares; and
WHEREAS, pursuant to Section 3.1 of the Articles of
Incorporation, the Board of Directors has authority to designate, from
the 4,850,000 authorized but undesignated shares, additional shares of
Common Stock or Series A Preferred Stock; and
WHEREAS, the directors deem it advisable to designate, from
the undesignated shares, 300,000 additional shares as Series A
Preferred Stock;
NOW, THEREFORE, RESOLVED, that of the 4,850,000 presently
authorized but undesignated shares, 300,000 are hereby designated as
additional Series A Preferred Stock.
FURTHER RESOLVED, that the Chairman and Chief Executive
Officer, the President or any Vice President of the Company be and
hereby is authorized and directed to file all necessary documentation
with the Secretary of State to effect such designation."
I certify that I am authorized to execute this Statement and I further
certify that I understand that by signing this Statement I am subject to the
penalties of perjury as set forth in Section 609.48 as if I had signed this
Statement under oath.
Dated: November 13, 2000.
/s/ Dale R. Olseth
--------------------------------------
Dale R. Olseth, Chairman and Chief
Executive Officer
2
ARTICLES OF AMENDMENT OF ARTICLES OF INCORPORATION
OF
SURMODICS, INC.
Pursuant to the provisions of Minnesota Statutes, Section 302A.135, the
following amendments to the Articles of Incorporation of SurModics, Inc., were
adopted on January 24, 2000, by the shareholders of the corporation:
Section 3.1 of Article 3 is amended to read as follows:
3.1) Authorized Shares. The aggregate number of shares which the
corporation shall have the authority to issue shall be 50.0 million, 45.0
million of which shall be designated Common Stock, $.05 Par Value; 4.85 million
of which shall be undesignated shares and 150,000 of which shall be designated
Series A Preferred Stock, $.05 Par Value (hereinafter referred to as the "Series
A Preferred Stock"). (The Common Stock, any shares issued from the undesignated
shares, and the Series A Preferred Stock are hereinafter referred to
collectively as the "Capital Stock.") The Board of Directors of the corporation
is authorized to establish from the undesignated shares, by resolution adopted
and filed in the manner provided by law, one or more classes or series of
shares, to designate each such class or series (which may include but is not
limited to designation as additional shares of Common Stock or Series A
Preferred Stock), and to fix the relative rights and preferences of each such
class or series.
Section 4.1 of Article 4 is amended to read as follows:
4.1) Voting Privileges. Unless otherwise provided in these Articles of
Incorporation, each holder of Common Stock shall have one vote on all matters
submitted to the shareholders for each share of Common Stock standing in the
name of such holder on the books of the corporation.
Section 4.4 of Article 4 is amended to read as follows:
4.4) Distributions. Except as otherwise provided in these Articles of
Incorporation, on the liquidation, dissolution or winding up of the corporation,
shares of Capital Stock shall share ratably in any dividends or distributions of
the corporation, whether paid in cash, property or stock.
Section 4.5 of Article 4, entitled "Series A Convertible Preferred Stock," is
deleted in its entirety.
Section 6.1 of Article 6 is amended to read as follows:
6.1) Any provision contained in these Articles of Incorporation may be
amended, altered, changed or repealed by the affirmative vote of the holders of
at least majority of the voting power of the shares present and entitled to vote
at a duly held meeting or such greater percentage as may be otherwise prescribed
by the laws of the State of Minnesota.
Article 7, entitled "Incorporators," is deleted in its entirety.
The undersigned swears that the foregoing is true and accurate and that
the undersigned has the authority to sign this document on behalf of the
corporation.
Dated: February 9, 2000.
/s/ David R. Busch
------------------------------------------
David R. Busch, Its Corporate Secretary
2
3
STATEMENT OF DESIGNATION
OF
SERIES A PREFERRED STOCK
OF
SURMODICS, INC.
(Pursuant to Chapter 302A of the
Minnesota Business Corporation Act)
-----------------
SurModics, Inc., a corporation organized and existing under the
Minnesota Business Corporation Act (hereinafter called the "Company"), hereby
certifies that the following resolution was adopted by the Board of Directors of
the Company at a meeting duly called and held on March 22, 1999:
RESOLVED, that, pursuant to the authority granted to and vested in the
Board of Directors of the Company (hereinafter called the "Board of Directors"
or the "Board") in accordance with the provisions of Section 3.1 of the Articles
of Incorporation, as amended to date (hereinafter called the "Articles of
Incorporation"), the Board of Directors hereby creates a series of Preferred
Stock, par value $.05 per share (the "Preferred Stock"), of the Company and
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:
Series A Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Preferred Stock" (the "Series A Preferred Stock"), and
the number of shares constituting the Series A Preferred Stock shall be One
Hundred Fifty Thousand (150,000). Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that, no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Company
convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock, par value $.05 per share (the "Preferred Stock"), of the
Company or Preferred Stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to
3
4
dividends, the holders of shares of Series A Preferred Stock, in preference to
the holders of Common Stock, par value $.05 per share (the "Common Stock"), of
the Company, and of any other junior stock, shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the first day of March,
June, September and December in each year (each such date being referred to
herein as 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 A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times (as adjusted, the "Dividend
Multiple") the aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common Stock or
a subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock 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 A Preferred Stock. In the event the Company shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise) into a greater or lesser
number of shares of Common Stock, then in each such case the Dividend Multiple
shall be adjusted by multiplying such amount 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.
(B) The Company shall declare a dividend or distribution on the Series
A Preferred Stock as provided in paragraph (A) of this Section immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided, that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A 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. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred
4
5
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than sixty (60) days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes (as adjusted, the "Vote Multiple") on all matters
submitted to a vote of the stockholders of the Company. In the event
the Company shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the Vote Multiple shall
be adjusted by multiplying such number 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.
(B) Except as otherwise provided in Section 10 hereof, in
any other Statement of Designation creating a series of Preferred Stock
or any similar stock, or by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock and any other
capital stock of the Company having general voting rights shall vote
together as one class on all matters submitted to a vote of
stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A Preferred Stock shall have no 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 taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the
Company shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except dividends
paid ratably on the Series A Preferred Stock and all such parity
stock on which
5
6
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Company may at any
time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the Company
ranking junior (as to dividends and upon dissolution,
liquidation and winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board) to all
holders of such shares upon such terms as the Board, 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.
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock
of the Company unless the Company could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and
in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set forth herein, in the Articles of
Incorporation, or in any other Statement of Designation creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (A) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received the greater of (i) $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, or (ii) subject to the provision
for adjustment hereinafter set forth, 100 times (as adjusted, the "Liquidation
Preference Multiple") the aggregate amount to be distributed per share to
holders of shares of Common Stock, or (B) to the holders of shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except distributions made ratably
on the Series A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled
6
7
upon such liquidation, dissolution or winding up. In the event the Company shall
at any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
Liquidation Preference Multiple shall be adjusted by multiplying such amount 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.
Section 7. Consolidation, Merger, Etc. In case the Company shall enter
into any consolidation, merger, statutory exchange 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 share of Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times (as adjusted, the "Exchange
Multiple") the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Company shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
Exchange Multiple shall be adjusted by multiplying such amount 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.
Section 8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all series
of any other class of Preferred Stock hereafter issued that specifically provide
that they shall rank senior to the Series A Preferred Stock.
Section 10. Amendment. If any proposed amendment to the Articles of
Incorporation or this Statement of Designation would alter or change the
preferences, special rights or powers given to the Series A Preferred Stock so
as to affect the Series A Preferred Stock adversely, or would authorize the
issuance of a class or classes of stock having preferences or rights with
respect to dividends or dissolutions or the distribution of assets that would be
superior to the preferences or rights of the Series A Preferred Stock, then the
holders of the Series A Preferred Stock shall be entitled to vote as a series
upon such amendment, and the affirmative vote of two-thirds of the outstanding
shares of Series A Preferred Stock shall be necessary to the adoption thereof,
in addition to such other vote as may be required by the Minnesota Business
Corporation Act.
7
8
Section 11. Fractional Shares. Series A Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
I certify that I am authorized to execute this Statement of
Designation, and I further certify that I understand that by signing this
Statement of Designation I am subject to the penalties of perjury as set forth
in Minnesota Statutes, Section 609.48, as if I had signed this Statement of
Designation under oath.
Dated: April 5, 1999
/s/ Dale R. Olseth
--------------------------------------------
Dale R. Olseth, Chief Executive Officer
8
9
STATEMENT OF CANCELLATION OF PREFERRED SHARES
OF
SURMODICS, INC. (f/k/a BSI CORPORATION)
SurModics, Inc. (f/k/a BSI Corporation) hereby cancels 376,828 shares
of its authorized Series A Convertible Preferred Stock, $0.05 par value. After
giving effect to the cancellation, the aggregate number of shares which the
corporation shall have the authority to issue shall be 20,000,000, 15.0 million
of which shall be designated Voting Common Stock, $.05 Par Value, and 5.0
million of which shall be undesignated.
This statement is pursuant to Section 302A.553 Subdivision 2. of the
Minnesota Business Corporation Act.
The undersigned swears that the foregoing is true and accurate and that
the undersigned has the authority to sign this document on behalf of the
corporation.
Dated: April 16, 1998
/s/ David R. Busch
------------------------------------------
David R. Busch, Its Corporate Secretary
9
10
ARTICLES OF AMENDMENT OF ARTICLES OF INCORPORATION
OF
SURMODICS, INC. (f/k/a BSI CORPORATION)
Pursuant to the provisions of Minnesota Statutes, Section 302A.135, the
following amendments of Section 3.1 of Article 3 and Section 4.5 of Article 4 of
the Articles of Incorporation of SurModics, Inc. (f/k/a BSI Corporation) were
adopted on January 26, 1998, by the shareholders of the corporation:
Section 3.1 of Article 3 is amended in its entirety to read as follows:
"3.1 Authorized Shares. The aggregate number of
shares which the corporation shall have the authority to issue
shall be 20,376,828, 15.0 million of which shall be designated
Voting Common Stock, $.05 Par Value; 5.0 million of which
shall be undesignated shares and 376,828 of which shall be
designated Series A Convertible Preferred Stock, $.05 Par
Value (hereinafter referred to as the "Preferred Stock"). (The
Voting Common Stock, any shares issued from the undesignated
shares, and the Preferred Stock are hereinafter referred to
collectively as the "Capital Stock".) The Board of Directors
of the corporation is authorized to establish from the
undesignated shares, by resolution adopted and filed in the
manner provided by law, one or more classes or series of
shares, to designate each such class or series (which may
include but is not limited to designation as additional common
shares), and to fix the relative rights and preferences of
each such class or series."
Section 4.5 of Article 4 is amended to add the following to the end of
such section:
"(d) If and when all outstanding shares of
Preferred Stock have been converted pursuant to this
Section 4.5, such shares shall be deemed canceled and
shall not be reissuable by the corporation, this
Section 4.5 shall be null and void and any
restatement of these Articles of Incorporation may
exclude this Section 4.5 and the reference to Series
A Convertible Preferred Stock contained in Section
3.1 of Article 3."
The undersigned swears that the foregoing is true and accurate and that
the undersigned has the authority to sign this document on behalf of the
corporation.
Dated: January 26, 1998.
/s/ David R. Busch
-----------------------------------------
David R. Busch, Its Corporate Secretary
10
11
ARTICLES OF AMENDMENT OF ARTICLES OF INCORPORATION
OF
BSI CORPORATION
Pursuant to the provisions of Minnesota Statutes, Section 302A.135, the
following amendment of Section 1.1 of Article 1 of the Articles of Incorporation
of BSI Corporation was adopted on June 4, 1997, by the shareholders of the
corporation:
Section 1.1 of Article 1 is amended in its entirety to read as follows:
"1.1 The name of the corporation shall be
SurModics, Inc."
The undersigned swears that the foregoing is true and accurate and that
the undersigned has the authority to sign this document on behalf of the
corporation.
Dated: June 4, 1997.
/s/ David R. Busch
---------------------------------------------
David R. Busch, Its Corporate Secretary
11
12
ARTICLES OF AMENDMENT OF ARTICLES OF INCORPORATION
OF
BSI CORPORATION (f/k/a BIO-METRIC SYSTEMS, INC.)
Pursuant to the provisions of Minnesota Statutes, Section 302A.135, the
following amendment of Section 3.1 of Article 3 of the Articles of Incorporation
of BSI Corporation (f/k/a Bio-Metric Systems, Inc.) was adopted on January 27,
1997, by the shareholders of the corporation:
Section 3.1 of Article 3 is amended in its entirety to read as follows:
"3.1 Authorized Shares. The aggregate number of
shares which the corporation shall have the authority to issue
shall be 20,450,000, 15.0 million of which shall be designated
Voting Common Stock, $.05 Par Value; 5.0 million of which
shall be undesignated shares and 450,000 of which shall be
designated Series A Convertible Preferred Stock, $.05 Par
Value (hereinafter referred to as the "Preferred Stock"). (The
Voting Common Stock, any shares issued from the undesignated
shares, and the Preferred Stock are hereinafter referred to
collectively as the "Capital Stock".) The Board of Directors
of the corporation is authorized to establish from the
undesignated shares, by resolution adopted and filed in the
manner provided by law, one or more classes or series of
shares, to designate each such class or series (which may
include but is not limited to designation as additional common
shares), and to fix the relative rights and preferences of
each such class or series."
The undersigned swears that the foregoing is true and accurate and that
the undersigned has the authority to sign this document on behalf of the
corporation.
Dated: January 29, 1997.
/s/ David R. Busch
-----------------------------------------
David R. Busch, Its Corporate Secretary
12
13
ARTICLES OF AMENDMENT OF ARTICLES OF INCORPORATION
OF
BIO-METRIC SYSTEMS, INC.
Pursuant to the provisions of Minnesota Statutes, Section 302A.135, the
following amendments of Section 1.1 of Article 1 and Section 2.1 of Article 2 of
the Articles of Incorporation of Bio-Metric Systems, Inc. were adopted on
January 17, 1994, by the shareholders of the corporation:
"ARTICLE 1 - NAME
1.1) The name of the corporation shall be BSI Corporation.
ARTICLE 2 - REGISTERED OFFICE
2.1) The registered office of the corporation is located at
9924 West 74th Street, Eden Prairie, Minnesota 55344."
The undersigned swears that the foregoing is true and accurate and that
the undersigned has the authority to sign this document on behalf of the
corporation.
Dated: January 17, 1994.
/s/ David R. Busch
----------------------------------------------
David R. Busch, Its Corporate Secretary
13
14
RESTATED ARTICLES OF INCORPORATION
OF
BIO-METRIC SYSTEMS, INC.
We, the undersigned, DALE R. OLSETH and DAVID R. BUSCH, the
Chairman/President/Chief Executive officer and Secretary, respectively, of
Bio-Metric Systems, Inc., a Minnesota corporation, do hereby certify that at a
special meeting of the shareholders of Bio-Metric Systems, Inc. held on April
10, 1989, notice of such meeting having been mailed to each shareholder entitled
to vote thereon at least ten (10) days prior to such meeting, the shareholders,
by at least a majority of the voting power of the shares of Voting Common Stock,
present in person or by proxy, adopted resolutions to restate the Articles of
Incorporation of Bio-Metric Systems, Inc. as set forth below.
ARTICLE 1 - NAME
1.1) The name of the corporation shall be BIO-METRIC SYSTEMS, INC.
ARTICLE 2 - REGISTERED OFFICE
2.1) The registered office of the corporation is located at 9942 West
74th Street, Eden Prairie, Minnesota 55344.
ARTICLE 3 - CAPITAL STOCK
3.1) Authorized Shares; Establishment of Classes and Series. The
aggregate number of shares which the corporation shall have the authority to
issue shall be 5,500,000 shares, 5,000,000 of which shall be designated Voting
Common Stock, $.05 par value; 50,000 of which shall be designated Nonvoting
Common Stock, $.05 par value; and 450,000 of which shall be designated Series A
Convertible Preferred Stock, $.05 par value, (hereinafter referred to as the
"Preferred Stock"). The Common Stock and Preferred Stock are hereinafter
referred to collectively as the "Capital Stock".
3.2) Issuance of Shares. The Board of Directors of the corporation is
authorized from time to time to accept subscriptions for, issue, sell and
deliver shares of Capital Stock of the corporation to such persons, at such
times and upon such terms and conditions as the Board shall determine, valuing
all nonmonetary consideration and establishing a price in money or other
consideration, or a minimum price, or a general formula or method by which the
price will be determined.
3.3) Issuance of Rights to Purchase Shares. The Board of Directors is
further authorized from time to time to grant and issue rights to subscribe for,
purchase, exchange securities for, or convert securities into, shares of Capital
Stock, and to fix the terms, provisions and conditions of such rights, including
the exchange or conversion basis or the price at which such shares may be
purchased or subscribed for.
14
15
3.4) Issuance of Shares to Holders of Another Class or Series. The
Board is further authorized to issue shares of one class or series of Capital
Stock to holders of that class or series of Capital Stock or to holders of
another class or series of Capital Stock to effect share dividends or splits.
ARTICLE 4 - RIGHTS AND PRIVILEGES OF SHARES AND OF SHAREHOLDERS
The rights, preferences, privileges and restrictions granted to or
imposed upon the Capital Stock or the holders thereof are set forth below.
4.1) Voting Privileges. Each holder of Voting Common Stock shall have
one vote on all matters submitted to the shareholders for each share of Voting
Common Stock standing in the name of such holder on the books of the
corporation. Each holder of Preferred Stock shall have one vote on all matters
submitted to the shareholders for each share of Voting Common Stock which such
holder of Preferred Stock would be entitled to receive upon the conversion of
his Preferred Stock as provided in subsection 4.5(c). In addition, each holder
of Preferred Stock shall have the special voting rights which are described in
subsection 4.5(b). Except as may be required by the Minnesota Business
Corporation Act, the holders of Nonvoting Common Stock shall have no voting
rights with respect to any matter submitted to a vote of the shareholders of the
corporation.
4.2) Preemptive Rights. No holder of shares of any class or series of
Capital Stock shall be entitled as such, as a matter of right, to subscribe for
or purchase additional shares of that class or series or any other class or
series of Capital Stock of the corporation now or hereafter authorized or
issued.
4.3) No Cumulative Voting. There shall be no cumulative voting by the
shareholders of the corporation.
4.4) Distributions. Except as provided in subsection 4.5(a) on the
liquidation, dissolution or winding up of the corporation, shares of Capital
Stock shall share ratably in any dividends or distributions of the corporation,
whether paid in cash, property or stock.
4.5) Series A Convertible Preferred Stock.
(a) Liquidation Preference. In the event of the liquidation,
dissolution or winding up of the corporation, whether voluntary or
involuntary, the holders of the Preferred Stock shall be entitled to
receive out of assets of the corporation, an amount equal to $13.50
(hereinafter referred to as the "Liquidation Preference") for each
outstanding share of Preferred Stock before any payment shall be made
or any assets distributed to the holders of Voting Common Stock or
Nonvoting Common Stock or any other class of stock of this corporation
ranking junior to the Preferred Stock upon liquidation or dissolution
of the corporation. If, upon any liquidation, dissolution, or winding
up of the corporation, the assets of the corporation are insufficient
to pay the Liquidation Preference for each outstanding share of
Preferred Stock, the holders of Preferred Stock shall share pro rata in
any such distribution in proportion to the full
15
16
amounts to which they would otherwise be entitled. If, upon any
liquidation, dissolution or winding up of the corporation, the holders
of Preferred Stock would be entitled to receive in excess of the
Liquidation Preference for each outstanding share of Preferred Stock in
any such distribution if all such shares of Preferred Stock had been
converted to shares of Voting Common Stock pursuant to subsection
4.5(c), instead of receiving the Liquidation Preference, each holder of
Preferred Stock shall receive an amount equal to the distribution such
holder would receive if all his outstanding shares of Preferred Stock
had been converted to shares of Voting Common Stock pursuant to
subsection 4.5(c) on the day preceding the date of such liquidation,
dissolution or winding up. The Liquidation Preference shall be
appropriately adjusted to reflect stock splits and reverse stock splits
of the Preferred Stock or dividends or distributions payable in shares
of Preferred Stock. Nothing hereinabove set forth shall affect in any
way the right or obligation of each holder of shares of Preferred Stock
to convert such shares into shares of Voting Common Stock, at any time
and from time to time, in accordance with subsection 4.5(c) below.
(b) Special Voting Rights. Without the affirmative vote
of the holders (acting together as a class) of at least a majority of
the Preferred Stock at the time outstanding given in person or by proxy
at any annual meeting, or at such special meeting called for that
purpose, or, if permitted by law, in writing without a meeting, the
corporation shall not:
(1) authorize or issue any shares of stock having
priority over the Preferred Stock as to the payment of
dividends or the payment or distribution of assets upon the
liquidation or dissolution, voluntary or involuntary, of the
corporation; or
(2) amend the Articles of Incorporation of the
corporation so as to alter this Article 4 in any respect.
(c) Conversion Rights; Mandatory Conversion.
(1) At the option of the holder thereof, each share
of Preferred Stock shall be convertible, at the offices of the
corporation (or at such other office or offices, if any, as
the Board of Directors may designate), into one (1) share of
Voting Common Stock of the corporation, subject to adjustment
as provided in subsection 4.5(c)(2) below. In order to convert
shares of Preferred Stock into shares of Voting Common Stock,
the holder thereof, shall surrender at the principal executive
offices of the corporation the certificate or certificates
therefor, duly endorsed to the corporation or in blank, and
give written notice to the corporation at such office that
such holder elects to convert a specified portion or all of
such shares of Preferred Stock into shares of Voting Common
Stock. Shares of Preferred Stock shall be deemed to have been
converted on the day of surrender of the certificate
representing such shares for conversion in accordance with the
foregoing provisions (the "Conversion Date"), and the person
entitled to receive the shares of Voting Common Stock of the
corporation issuable upon such conversion shall be treated for
all purposes as the record holder of such shares of
16
17
Voting Common Stock at that time. As promptly as practicable
on or after the Conversion Date, the corporation shall issue
and mail or deliver or cause to be issued and mailed or
delivered to such holder a certificate or certificates for the
number of shares of Voting Common Stock issuable upon
conversion and a certificate or certificates for the balance
of the Preferred Stock surrendered, if any, not so converted
into shares of Voting Common Stock.
(2) The number of shares of Voting Common Stock
issuable in exchange for shares of Preferred Stock upon the
exercise of these conversion rights (the "Conversion Ratio"),
which shall initially be one share of Voting Common Stock for
one share of Preferred Stock, shall be subject to adjustment
from time to time as hereinafter provided:
(i) In case the corporation shall at any
time subdivide or split its outstanding Common Stock
into a greater number of shares, the Conversion Ratio
in effect immediately prior to such subdivision or
split shall be proportionately increased; and,
conversely, in case the outstanding Common Stock of
the corporation shall be combined into a smaller
number of shares the Conversion Ratio in effect
immediately prior to such combination shall be
proportionately reduced.
(ii) If any capital reorganization or
reclassification of the Capital Stock of the
corporation or consolidation or merger of the
corporation with another corporation or the sale of
all or substantially all of its assets to another
corporation shall be affected 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, reclassification, consolidation,
merger or sale, lawful and adequate provision shall
be made whereby the holders of Preferred Stock shall
thereafter have the right to receive, in lieu of the
Voting Common Stock of the corporation immediately
theretofore receivable upon the conversion of any
such 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 Voting Common Stock equal to the number of
shares of Voting Common Stock immediately theretofore
receivable upon the conversion of such Preferred
Stock had such reorganization, reclassification,
consolidation, merger or sale not taken place; and,
in any such case, appropriate provision shall be made
with respect to the rights and interests of the
holders of the Preferred Stock to the end that the
provisions hereof (including without limitation
provisions for adjustments of the Conversion Ratio
and of the number of shares receivable upon the
conversion of such Preferred Stock) shall thereafter
be applicable as nearly as may be, in relation to any
shares of stock, securities or assets hereafter
receivable upon the conversion of such Preferred
Stock. The corporation shall not effect any such
consolidation, merger or sale, unless prior to the
consummation thereof the surviving
17
18
corporation (if other than the corporation), the
corporation resulting from such consolidation or the
corporation purchasing such assets shall assume by
written instrument executed and mailed to the
registered holders of the Preferred Stock at the last
address of such holders appearing on the books of the
corporation, the obligation to deliver to such
holders such shares of stock, securities or assets
as, in accordance with the foregoing provisions, such
holders may be entitled to receive.
(iii) If and whenever the corporation shall
issue or sell any Common Stock for a consideration
per share less than the Liquidation Preference
(except for the issuance or sale of up to 50,000
shares of Nonvoting Common Stock pursuant to the
corporation's 1984 Stock Option Plan, up to 200,000
shares of Voting Common Stock pursuant to the
corporation's 1987 Stock Option Plan and up to 50,000
shares of Voting Common Stock to Simplot Development
Corporation (hereinafter referred to as the "Excluded
Stock Issuances")) or shall issue any options,
warrants or other rights for the purchase of shares
of Common Stock at a consideration per share of less
than the Liquidation Preference, forthwith upon such
issuance or sale of such shares, options, warrants or
other rights for purchase, the Conversion Ratio in
effect immediately prior to such issuance or sale for
the Preferred Stock shall be adjusted so that each
share of Preferred Stock shall thereafter be
convertible into that number of shares of Voting
Common Stock as is equal to the number determined by
multiplying the Conversion Ratio by a fraction, the
numerator of which shall be the amount determined by
multiplying (aa) the number of shares of Common Stock
outstanding immediately after such issuance or sale
plus the number of shares of Common Stock issuable
upon the exercise of any purchase rights thus issued,
by (bb) the Liquidation Preference, and the
denominator of which shall be an amount equal to the
sum of (aa) the number of shares of Common Stock
outstanding immediately prior to such issuance or
sale multiplied by the Liquidation Preference, and
(bb) the total consideration payable to the
corporation upon such issuance or sale of such shares
and such purchase rights and upon the exercise of
such purchase rights. If any options or purchase
rights taken into account in any such adjustment of
the Conversion Ratio subsequently expire without
exercise, the Conversion Ratio shall be recomputed by
deleting such options or purchase rights. For
purposes of this subsection 4.5(c)(2), the number of
shares of Voting Common Stock or Nonvoting Common
Stock which may be issued as Excluded Stock Issuances
shall be appropriately adjusted to reflect stock
splits, stock dividends, reorganizations,
consolidations and similar changes.
(iv) The anti-dilution provisions of this
subsection 4.5(c)(2) may be waived by the affirmative
vote of the holders (acting together as a class) of
at least a majority of the then outstanding shares of
Preferred Stock.
18
19
(3) Upon receipt of a written notice to the
corporation from a holder of shares of Preferred Stock
delivered to the corporation's principal executive offices
requesting a computation of the then current Conversion Ratio,
the corporation shall promptly give written notice by
first-class mail, postage prepaid, addressed to the holder of
the Preferred Stock making such request at the address of such
holder as shown on the books of the corporation which notice
shall state the then current Conversion Ratio, setting forth
in reasonable detail the method of calculation and the facts
upon which such calculation is based.
(4) In case any time:
(i) the corporation shall pay any dividend
payable in stock upon its Common Stock or make any
distribution (other than regular cash dividends) to
the holders of its Common Stock; or
(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; or
(iii) there shall be any capital
reorganization, reclassification of the Capital Stock
of the corporation or consolidation or merger of the
corporation with or sale of all or substantially all
of its assets to another corporation; 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 written notice, by
first-class mail, postage prepaid, addressed to the
holders of the Preferred Stock at the addresses of
such holders as shown on the books of this
corporation, of the date on which (aa) the books of
the corporation shall close or a record shall be
taken for such dividend, distribution or subscription
rights or (bb) such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation
or winding up shall take place, as the case may be.
Such notice shall also specify the date as of which
the holders of Common Stock of record shall
participate in such dividend, distribution or
subscription rights or 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. Such written notice shall be given at least
20 days prior to the action in question and not less
than 20 days prior to the record date or the date on
which this corporation's transfer books are closed in
respect thereto.
(5) As used in this subsection 4.5(c), the term
Common Stock shall mean and include the corporation's
presently authorized Voting Common Stock
19
20
and Nonvoting Common Stock and shall also include any capital
stock of any class of the corporation hereafter authorized
which shall have the right to vote on all matters submitted to
the shareholders of the corporation and shall not be limited
to a fixed sum or percentage in respect of the rights of the
holders thereof to participate in dividends or in the
distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of the corporation;
provided that the shares receivable pursuant to conversion of
the Preferred Stock shall include shares designated as Voting
Common Stock of the corporation as of the date of issuance of
such Preferred Stock or, in the case of any reclassification
of the outstanding shares thereof, the stock, securities or
assets provided for in subsection 4.5(c)(2)(ii) above.
(6) The number of shares of Voting Common Stock
issuable upon conversion of shares of Preferred Stock shall be
computed to the nearest one hundredth of a full share;
however, no fractional shares of Voting Common Stock shall be
issued upon conversion. The corporation shall pay a cash
adjustment in respect of any fraction of a share in an
amount-equal to the same fraction of the market price per
share of Voting Common Stock as of the close of business on
the day of conversion. "Market price" shall mean the average
of the high and low prices of the Voting Common Stock sales on
all exchanges on which the Voting Common Stock may at the time
be listed or as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System National
Market System ("NASDAQ-NMS"), or, if there shall have been no
sales on any such exchange or as reported by NASDAQ-NMS on any
such day, the average of the bid and asked prices at the end
of such day, or, if the Voting Common Stock shall not be so
listed or transactions so reported, the average of the bid and
asked prices at the end of the day in the over-the-counter
market, in each case averaged over a period of 20 consecutive
business days prior to the date as of which I, market price"
is being determined. If at any time the Voting Common Stock is
not listed on any exchange, reported by NASDAQ-NMS or quote in
the over-the-counter market, the "market price" shall be
deemed to be the higher of (a) the book value thereof as
determined by any firm of independent public accountants of
recognized standing selected by the Board of Directors of the
Corporation as of the last day of any month ending within 60
days preceding the date as of which the determination is to be
made, or (b) the fair value thereof determined in good faith
by the Board of Directors of the Corporation as of a date
which is within 15 days of the date as of which the
determination is to be made.
(7) Notwithstanding the foregoing right to
convert at the option of the holder, each share of Preferred
Stock shall automatically be converted into the appropriate
number of shares of Voting Common Stock of the corporation in
the manner and upon the terms set forth herein, without any
act by the corporation or the holders of Preferred Stock,
concurrently with the closing of:
(i) the sale by the corporation of shares
of Voting Common Stock in a public offering which was
registered under the Securities Act of
20
21
1933, as amended, was underwritten by an investment
banking firm on a firm commitment basis and results
in the Voting Common Stock being of the corporation
being quoted on the National Association of
Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or listed on the New York Stock Exchange,
American Stock Exchange or other national stock
exchange; or
(ii) a merger of the corporation with or
the acquisition of the corporation by another entity
in which the surviving entity is a corporation with a
class of securities which are quoted on NASDAQ or
listed on the New York Stock Exchange, the American
Stock Exchange or other national stock exchange.
ARTICLE 5 - MERGER, EXCHANGE, SALE OF ASSETS AND DISSOLUTION
5.1) Where approval of shareholders is required by law, the affirmative
vote of the holders of at least a majority of the voting power of all shares
entitled to vote shall be required to authorize the corporation (i) to merge
into or with one or more other corporations, (ii) to exchange its shares for
shares of one or more other corporations, (iii) to sell, lease, transfer or
otherwise dispose of all or substantially all of its property and assets,
including its goodwill, or (iv) to commence voluntary dissolution.
ARTICLE 6 - AMENDMENT OF ARTICLES OF INCORPORATION
6.1) Subject to the special voting rights of the holders of Preferred
Stock set forth in subsection 4.5(b), any provision contained in these Articles
of Incorporation may be amended, altered, changed or repealed by the affirmative
vote of the holders of at least majority of the voting power of the shares
present and entitled to vote at a duly held meeting or such greater percentage
as may be otherwise prescribed by the laws of the State of Minnesota.
ARTICLE 7 - INCORPORATORS
7.1) The name and mailing address of the original incorporator was as
follows: Stephen A. A. Goddard 1645 Hennepin Avenue South Suite 212 Minneapolis,
Minnesota 55403.
ARTICLE 8 - DIRECTOR LIABILITY
8.1) Limitation on Director Liability. To the fullest extent permitted
by the Minnesota Business Corporation Act, as the same exists or may hereafter
be amended, a director of this corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director.
IN WITNESS WHEREOF, we have hereunto set our hands this 10th day of
April, 1989.
/s/ Dale R. Olseth
----------------------------------------
21
22
Dale R. Olseth, Chairman, President, and
Chief Executive Officer
/s/ David R. Busch
----------------------------------------
David R. Busch, Secretary
STATE OF MINNESOTA )
)ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this 10th day of
April, 1989, by Dale R. Olseth and David R. Busch, Chairman/President/Chief
Executive Officer and Secretary, respectively, of Bio-Metric Systems, Inc., a
Minnesota corporation, on behalf of the corporation.
/s/ Walter H. Diers
----------------------------------------
Notary Public
22