1
Exhibit 3.1
FORM OF RESTATED CHARTER OF PEN HOLDINGS, INC., AS AMENDED
Pursuant to the provisions of Section 48-20-107 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following
restated charter:
1) The name of the corporation is Pen Holdings, Inc.
2) The corporation is authorized to issue:
a. Ten Thousand (10,000) shares of Convertible Preferred stock;
b. Seven Million Eight Hundred Thousand (7,800,000) shares of
Class I Common stock; and,
c. Two Hundred Thousand (200,000) shares of Class II Common
stock.
3) The street address and zip code of the corporation's initial
registered office, the county in which the office is located, and
the name of its initial registered agent at that office is:
David G. Gray
Vice President & General Counsel
3rd Floor - Center Court Bldg.
5110 Maryland Way
Brentwood, Tennessee 37027
County of Williamson
4) The address of the principal office of the corporation is:
3rd Floor - Center Court Bldg.
5110 Maryland Way
Brentwood, Tennessee 37027
5) The number and classification of the shares the corporation is
authorized to issue and the powers, designations, preferences,
and other rights of such shares shall be as follows:
a. Convertible Preferred Stock. The Convertible Preferred stock
shall have the following powers, designations, preferences,
and other rights:
i. Unless earlier converted into Class I Common stock as
provided herein, Convertible Preferred stock shall be
redeemed in whole and not in part by the corporation on
January 3, 2006.
2
ii. Upon any redemption of the Convertible Preferred stock,
the corporation shall pay to the holders of such
Convertible Preferred stock an amount equal to the
Stated Value of such shares, Thirteen Million Six
Hundred Fifty Thousand Dollars ($13,650,000), reduced,
but not below Zero (-0-), in accordance with paragraph
(c) (such amount referred to herein as the "Redemption
Price") of such shares by delivering to each of such
holders One (1) or more promissory notes executed by
the corporation having an aggregate original principal
balance equal to the Redemption Price. Such note or
notes shall bear interest until paid at a rate equal to
Two and Twenty-five One Hundredths percent (2.25%)
above the rate payable on Five (5) year U.S. Treasury
obligations as of the date of such redemption and shall
be payable in Forty (40) substantially equal
quarter-annual installments of principal plus accrued
but unpaid interest. In the event of the redemption of
Convertible Preferred stock before the final settlement
of all of the corporation's income tax liability for
all tax periods beginning before the Closing, such
promissory notes shall be and remain subject to
reduction as determined under paragraph (c). The term
"final settlement" of the corporation's income tax
liability with respect to any taxing authority for any
tax period shall include a final unappealable judgment
by a court of competent jurisdiction, as well as an
agreement between the corporation and such taxing
authority, fixing such tax liability for such period.
iii. Holders of Convertible Preferred stock shall have
preference upon the liquidation, dissolution, or
winding up of the corporation, whether voluntary or
involuntary, over the holders of all other classes of
stock issued by the corporation until holders of
Convertible Preferred stock shall have received
distribution in the aggregate equal to the sum of (i)
all accrued but unpaid dividends on such shares and
(ii) their Redemption Price, sometimes referred to as
the Convertible Preferred stock "Liquidation
Preference". No distributions shall be made upon the
liquidation, dissolution, or winding up of the
corporation, whether voluntary or involuntary, to the
holders of any other class of capital stock, unless and
until the holders of Convertible Preferred stock shall
have first received an amount equal to the Liquidation
Preference of such shares. All distributions on such
Convertible Preferred Stock shall be allocated among
the holders thereof based upon the number of such
shares held by each such holder.
2
3
iv. The consolidation or merger of the corporation into or
with any other entity or entities that results in the
exchange or conversion of outstanding shares of the
corporation for securities or other consideration
issued or paid or caused to be issued or paid by any
such entity or affiliate thereof, other than a merger
to reincorporate the corporation in a different
jurisdiction, and the sale, lease, assignment,
abandonment, transfer, or other disposition by the
corporation of all or substantially all of its assets,
shall, unless the Convertible Preferred stock shall
have been converted into Class I Common stock, be
deemed to be a liquidation, dissolution, or winding up
of the corporation within the meaning of the provisions
of this paragraph (a) and shall entitle the holders of
the convertible Preferred stock to receive at the
closing of such event cash, securities, or other
consideration to be delivered thereat in an amount
equal to the Liquidation Preference, provided that the
Liquidation Preference shall be paid in cash to the
extent any cash is delivered at the closing.
v. Dividends shall not accrue on Convertible Preferred
stock from the date such shares are issued through
January 3, 2001; dividends shall accrue on Convertible
Preferred stock from and after that date at the rate of
Twenty-five and Twenty-five One Hundredths percent
(25.25%) per annum, based in the aggregate upon their
initial Stated Value of Thirteen Million Six Hundred
Fifty Thousand Dollars ($13,650,000), reduced, but not
below Zero (0), as determined under paragraph (c).
vi. Dividends on Convertible Preferred stock not paid shall
accumulate, but unpaid dividends shall not bear
interest. Any dividends of Convertible Preferred stock
accumulated but unpaid at the time of the redemption of
such Convertible Preferred stock shall thereafter bear
interest until paid at a rate equal to Two and
Twenty-five One Hundredths percent (2.25%) above the
rate payable on Five (5) year U.S. Treasury obligations
as of the date of such redemption and shall be paid in
Forty (40) substantially equal quarter annual
installments of principal plus accrued interest with
the first of such payments being due Three (3) months
following the redemption. The aggregate amount of
accumulated but unpaid dividends shall be reduced as
provided under paragraph (c). Distributions of
dividends on Convertible Preferred stock shall be
allocated among the holders of such stock based upon
their relative ownership of such shares.
3
4
vii. for so long as any shares of Convertible Preferred
stock are issued and outstanding no cash, stock, or
other dividends or distributions shall be declared or
made with respect to any shares of capital stock other
than the Convertible Preferred stock and the
corporation shall not purchase, redeem or otherwise
acquire, any shares of capital stock of the corporation
other than the Convertible Preferred stock and any
Class I common stock issued to and held by a financial
institution (or an affiliate or nominee thereof( that
has loaned money to the corporation in good faith and
in the ordinary course of such institution's business.
viii. Except as provided by this Charter or otherwise
required by law, the holders of Convertible Preferred
stock shall not be entitled to notice of meetings of
the corporation's shareholders and shall not be
entitled to vote in the election of the corporation's
directors or on any other matter or question.
ix. At any time (y) when shares of Convertible Preferred
Stock are issued and outstanding, except where the vote
or written consent of the holders of a greater number
of shares of the corporation is required by law or by
this charter, and in addition to any other vote
required by law or this Charter, without the approval
of the holders of at least a majority of the then
outstanding shares of Convertible Preferred Stock,
given in writing or by vote at a meeting, consenting or
voting (as the case may be) separately as a class, or
(z) following a conversion of Convertible Preferred
stock, without the approval of the holders of at least
Seventy-five percent (75%) of the outstanding Common
stock, the corporation will not:
A. Consent to any liquidation, dissolution, or
winding up of the corporation; or
B. Amend, alter, or repeal this Charter (including an
amendment to authorize additional shares of
capital stock).
x. At the option of the holders of the corporation's
Convertible Preferred stock, all, but not less than
all, of the Ten Thousand (10,000) shares of Convertible
Preferred stock, may be converted into Two Million Nine
Hundred Fifty Thousand (2,950,000) shares of the
corporation's Class I Common stock. The option to
convert such shares shall be exercisable, at the
earlier of (A) the period beginning
4
5
January 4, 2001 and ending January 3, 2002 or (B)
immediately prior to a merger, consolidation, or share
exchange involving the corporation, or the sale, lease,
or conveyance of all or substantially all of the
corporation's assets. Such right of conversion shall be
exercised, if at all, by written notice to the
corporation, signed by each and all of the holders of
such Convertible Preferred stock. Notice of the
exercise of such option shall be accompanied by
certificates representing, in the aggregate, Ten
Thousand (10,000) shares of the corporation's
Convertible Preferred stock. All such certificates
shall be duly endorsed in blank or delivered with
appropriate stock powers executed in blank. Upon
receipt by the corporation of such notice and
certificates in proper form within the proper period,
the corporation shall issue certificates representing
in the aggregate Two Million Nine Hundred Fifty
Thousand (2,950,000) shares of the corporation's Class
I Common stock; such shares shall be issued to the
converting holders of such Convertible Preferred stock,
proportionately among them based upon their relative
ownership of such shares. Upon any such conversion, the
Convertible Preferred stock shall be cancelled and the
corporation's obligation to pay any accumulated and
accrued but unpaid dividends on Convertible Preferred
stock shall lapse.
xi. Cumulative distributions on Convertible Preferred stock
shall not in any event exceed the Liquidation
Preference of such shares.
xii. The corporation shall at all times reserve and keep
available out of its authorized but unissued shares of
Class I Common stock, solely for the purpose of
effecting the conversion of the shares of the
Convertible Preferred stock, such number of its shares
of Class I Common stock, as shall from time to time be
sufficient to effect the conversion of all outstanding
shares of the Convertible Preferred stock.
xiii. If the corporation shall propose at any time to merge,
consolidate, or enter into a share exchange with or
into any other corporation, or sell, lease, or convey
all of substantially all of its assets, or to
liquidate, dissolve, or wind up, then, in connection
with each such event, the corporation shall send to the
holders of the Convertible Preferred stock at least
Sixty (60) days' prior written notice of the date when
such event shall take place.
5
6
b. Common Stock. The powers and rights of the corporation's
Common stock shall be as follows:
i. Class I and Class II Common stock shall have unlimited
voting rights and, except as otherwise required by law,
Class I and Class II Common stock shall vote together
as a single class and not separately on matters coming
before the corporation's shareholders.
ii. Class I and Class II Common stock shall have the right,
together as a single class and not separately, to
receive the net assets of the corporation remaining
upon its dissolution or liquidation after satisfaction
of the Liquidation Preference on all classes and series
of the corporation's preferred shares.
iii. Shares of Class I and Class II Common stock shall have
a par value of $0.001 each.
c. Reduction of Liquidation Preference Amounts . The
Liquidation Preference of the Convertible Preferred stock
shall be reduced by the sum of (i) all federal, state, and
other income taxes, however denominated, penalties, and
interest paid or payable by the corporation for all tax
periods beginning before the Closing which arise as a result
of or in connection with any change or adjustment made or
asserted by any taxing authority to the amount of tax as
reflected on a return filed by the corporation and which
have not been paid at or prior to Closing and (ii) all
amounts paid by the corporation on such preferred stock in
excess of dividends accrued on such stock. Provided,
however, that the amount of any such reduction arising out
of the resolution of any such tax matter which is solely an
issue of timing among tax years shall be limited to the
present value of the cost of such timing difference to the
corporation. The amount of all such reductions shall be
applied to reduce the Convertible Preferred stock
Liquidation Preference and shall be allocated first to
reduce the amount of any accumulated but unpaid dividends on
such stock and then to reduce the Stated Value of such
shares. The effective date of such reduction shall be the
date or dates of payment by the corporation of such tax
amounts. The amount of the reduction shall be allocated
proportionately among the holders of such class of preferred
stock based upon their relative ownership of such shares. In
the event any Convertible Preferred stock shall have been
redeemed but any portion of the redemption price thereof or
any accumulated but unpaid dividends thereon remains due and
owing by the corporation at the time of any such payment of
tax,
6
7
penalty, or interest, whether such amount is evidenced by a
note or otherwise, then the amount of any such payment shall
be applied to reduce the amount so due and owing, the amount
being first applied to reduce any accrued but unpaid
interest, then to reduce any accumulated but unpaid
dividends, and then to reduce the principal amount of such
obligation.
6) The corporation is for profit.
7) The purpose or purposes for which the corporation is organized
are: To purchase, own, and hold the stock of other corporations
and to do every act and thing covered generally by the
denomination "Holding Corporation" and to direct the operations
of other corporations through the ownership of stock therein: To
Purchase, hold, sell, exchange, assign, create security interest
in, pledge, or otherwise dispose of shares of capital stock or
any prints, notes, securities or evidence of indebtedness created
by any other corporation or corporations organized under the laws
of this state or any other state or district: To exercise all the
rights, powers, and privileges of owner, including the right to
vote any shares of stock so owned: To perform the functions of a
headquarters company for the corporation so owned, including, but
without limitation, the provision of facilities, office space,
furniture and fixtures, automobiles, and equipment, or any other
thing necessary or useful in the transaction of the subsidiaries'
affairs: To provide financial service to the subsidiary
companies, including, without limitation, the loan of monies and
the guarantee of bonds, notes, evidences of indebtedness,
contracts, or other obligations of the subsidiary companies, and
to provide accounting services and financial consultation and
advice of all types: To provide managerial and administrative
services, without limitation, and to engage in such other lawful
activities as the stockholders elect.
8) There shall be no preemptive rights with respect to the issuance
of stock of any class of capital stock of the corporation.
9) To the fullest extent permitted by the Tennessee Business
Corporation Act, a Director of the Company shall not be liable to
the company or its shareholders for monetary damages for breach
of fiduciary duty as a Director. If the Tennessee Business
Corporation Act is amended after approval by the shareholders of
this provision to authorize corporate action, further eliminating
or limiting the personal liability of Directors, then the
liability of a Director of the company shall be eliminated or
limited to the fullest extent permitted by the Tennessee Business
Corporation Act as so amended from time to time.
10) The corporation shall, to the maximum extent permitted by the
Tennessee Business Corporation Act, have power to indemnify each
of its Agents against expenses, judgments, fines, settlements and
other amounts
7
8
actually and reasonably incurred in connection with any
proceeding arising by reason of the fact that any such person is
or was an agent of the corporation and shall have power to
advance to each such agent expenses incurred in defending any
such proceeding to the maximum extent permitted by that law. For
the purposes of this section an "Agent" of the corporation
includes any person who is or was a Director, Officer, Employee
or other Agent of the Corporation, or is or was serving at the
request of the Corporation as a Director, Officer, Employee or
Agent of another corporation, partnership, joint venture, trust
or other enterprise, or was a Director, Officer, Employee or
Agent of a corporation which was a predecessor corporation of the
Corporation or of another enterprise serving at the request of
such predecessor corporation.
8