EXHIBIT 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
CHIPPAC, INC.
Tony Lin certifies that:
ONE: He is the duly elected and acting Vice President and Secretary of
ChipPAC, Inc., a California corporation (the "Corporation").
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TWO: The Articles of Incorporation of the Corporation shall be amended and
restated to read in full as follows:
I
NAME
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The name of the Corporation is ChipPAC, Inc.
II
PURPOSE
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The purpose of the Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
California other than the banking business, the trust company business or the
practice of a profession permitted to be incorporated by the California
Corporations Code.
III
CAPITAL STOCK
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Part A. Authorized Shares. The total number of shares of capital stock
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which the Corporation has authority to issue is 380,115,000 shares, consisting
of:
1. 10,000 shares of Class A Convertible Preferred Stock, par value $.01
per share ("Class A Preferred");
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2. 105,000 shares of Class B Preferred Stock, par value $.01 per share
("Senior Preferred Stock");
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3. 20,000,000 shares of Class L Common Stock, par value $.01 per share
("Class L Common");
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4. 180,000,000 shares of Class A Common Stock, par value $.01 per share
("Class A Common"); and
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5. 180,000,000 shares of Class B Common Stock, par value $.01 per share
("Class B Common").
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The Class L Common, the Class A Common and the Class B Common, and any
other common stock issued hereafter are referred to collectively as the "Common
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Stock." The Class A Preferred shall be junior to the Senior Preferred Stock and
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senior to the Common Stock as to dividends and liquidation rights and
liquidation preferences and shall have the other rights, preferences and
limitations set forth in Part D hereto. The Senior Preferred Stock and the
Common Stock shall have the rights, preferences and limitations set forth below.
Capitalized terms used but not otherwise defined in Part A or Part B of this
Article III are defined in Part C.
Part B. Senior Preferred Stock and Common Stock.
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Except as otherwise provided in this Part B or as otherwise required by
applicable law and subject to the rights, preferences and limitations of the
Class A Preferred specified in Part D hereto, all shares of Senior Preferred
Stock, Class L Common, Class A Common and Class B Common shall be identical in
all respects and shall entitle the holders thereof to the same rights and
privileges, subject to the same qualifications, limitations and restrictions.
1. Voting Rights. Except as otherwise provided in this Part B or as
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otherwise required by applicable law, the holders of Class A Common shall be
entitled to one vote per share on all matters to be voted on by the
Corporation's stockholders, and the holders of Senior Preferred Stock, the
holders of Class L Common and the holders of the Class B Common shall have no
right to vote on any matters to be voted on by the stockholders of the
Corporation. Each holder of Class A Common shall be entitled at all elections
of directors to as many votes as shall equal one vote per share held by such
holder multiplied by the number of directors to be elected, and such holder may
cast all of such votes for a single director or may distribute them among the
number to be voted for, or for any two or more of them as such holder may see
fit, and to one vote for each share upon all other matters.
2. Dividends.
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(a) General Obligation. When and as declared by the
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Corporation's Board of Directors and to the extent permitted under the General
Corporation Law of California, the
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Corporation shall pay preferential dividends to the holders of the Senior
Preferred Stock as provided in this Section 2. Dividends on each share of the
Senior Preferred Stock (a "Share") shall accrue on a daily basis at the rate of
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12.5% per annum of the sum of the Stated Value thereof plus all accumulated and
unpaid dividends thereon from and including the date of issuance of such Share
to and including the first to occur of (i) the date on which the Stated Value of
such Share (plus all accrued and unpaid dividends thereon) is paid to the holder
thereof in connection with the liquidation of the Corporation or the redemption
of such Share by the Corporation or (ii) the date on which such Share is
otherwise acquired by the Corporation. Such dividends shall accrue whether or
not they have been declared and whether or not there are profits, surplus or
other funds of the Corporation legally available for the payment of dividends.
The date on which the Corporation initially issues any Share shall be deemed to
be its "date of issuance" regardless of the number of times transfer of such
Share is made on the stock records maintained by or for the Corporation and
regardless of the number of certificates which may be issued to evidence such
Share.
(b) Accumulation of Dividends; Dividend Payment Dates. All
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dividends which have accrued on each Share of Senior Preferred Stock outstanding
during each six-month period ending February 1 and August 1, commencing February
1, 2000 and on or prior to August 1, 2004 will not be paid in cash, but will be
capitalized as accumulated and unpaid dividends on the Senior Preferred Stock
with respect to each Share until paid to the holder thereof. All dividends
accruing on each Share of Senior Preferred Stock from and after August 1, 2004,
shall be paid in cash, semi-annually on February 1 and August 1, beginning
February 1, 2005.
(c) Distribution of Partial Dividend Payments. Except as
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otherwise provided herein, if at any time the Corporation pays less than the
total amount of dividends then accrued with respect to the Senior Preferred
Stock, such payment shall be distributed pro rata among the holders thereof
based upon the aggregate accrued but unpaid dividends on the Shares held by each
such holder.
(d) In Event of Default. In the event the Corporation fails,
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either in whole or in part, to pay, when due, any dividend or other amount
required by these Articles to be paid with respect to the Senior Preferred Stock
(an "Event of Default"), then from and after the due date of such dividend or
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other payment until such dividend or other payment has been paid in full: (i)
the dividend rate on the Senior Preferred Stock shall increase immediately by an
increment of two and one-half percent (2.5%) per annum (the "Default Rate") and
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(ii) the holders of a majority of the Senior Preferred Stock then outstanding
shall have the sole and exclusive right to nominate, and the holders of the
Senior Preferred Stock voting as a separate class will have the sole and
exclusive right to elect, one member of the Corporation's Board of Directors,
which right shall be in addition to any other rights of the holders of the
Senior Preferred Stock in any other capacity to nominate, elect or vote with
respect to the election of the directors of the Corporation pursuant to these
Articles or any agreement with the Corporation and/or its shareholders.
Dividends shall accrue at the Default Rate, and the director so nominated and
elected by the holders of the Senior Preferred Stock shall serve, until such
time as there is no longer any Event of Default in existence, at which time the
special right of the holders of the Senior Preferred Stock to nominate and elect
one member of the Corporation's
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Board of Directors shall terminate subject to revesting upon the occurrence and
continuation of any Event of Default which gives rise to such special right
hereunder.
3. Liquidating Distributions. At the time of each Liquidating
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Distribution, such Liquidating Distribution shall be made to the holders of the
Senior Preferred Stock, Class L Common, Class A Common and Class B Common in the
following priority:
(a) The holders of the Senior Preferred Stock shall be entitled
to receive all or a portion of such Liquidating Distribution (ratably among such
holders based upon the number of Shares of Senior Preferred Stock held by each
such holder as of the time of such Liquidating Distribution) equal to the
aggregate Liquidation Preference on the outstanding Shares of Senior Preferred
Stock as of the time of such Liquidating Distribution, and no Liquidating
Distribution or any portion thereof shall be made under paragraphs 3(b), (c) or
(d) below until the entire amount of the Liquidation Preference on the
outstanding Shares of Senior Preferred Stock as of the time of such Liquidating
Distribution has been paid in full. The Liquidating Distributions made pursuant
to this paragraph 3(a) to the holders of the Senior Preferred Stock shall
constitute a payment of Liquidation Preference on Senior Preferred Stock.
(b) After the required amount of a Liquidating Distribution has
been made in full pursuant to paragraph 3(a) above, the holders of Class L
Common shall be entitled to receive all or a portion of such Liquidating
Distribution (ratably among such holders based upon the number of shares of
Class L Common held by each such holder as of the time of such Distribution)
equal to the aggregate Unpaid Yield on the outstanding shares of Class L Common
as of the time of such Liquidating Distribution, and no Liquidating Distribution
or any portion thereof shall be made under paragraphs 3(c) or (d) below until
the entire amount of the Unpaid Yield on the outstanding shares of Class L
Common as of the time of such Liquidating Distribution has been paid in full.
The Liquidating Distributions made pursuant to this paragraph 3(b) to holders of
Class L Common shall constitute a payment of Yield on Class L Common.
(c) After the required amount of a Liquidating Distribution has
been made in full pursuant to paragraph 3(b) above, the holders of Class L
Common shall be entitled to receive all or a portion of such Liquidating
Distribution (ratably among such holders based upon the number of shares of
Class L Common held by each such holder as of the time of such Liquidating
Distribution) equal to the aggregate Unreturned Original Cost of the outstanding
shares of Class L Common as of the time of such Liquidating Distribution, and no
Liquidating Distribution or any portion thereof shall be made under paragraph
3(d) below until the entire amount of the Unreturned Original Cost of the
outstanding shares of Class L Common as of the time of such Liquidating
Distribution has been paid in full. The Liquidating Distributions made pursuant
to this paragraph 3(c) to holders of Class L Common shall constitute a return of
Original Cost of Class L Common.
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(d) After the required amount of a Liquidating Distribution has
been made pursuant to paragraphs 3(a), (b) and (c) above, the holders of Common
Stock as a group, shall be entitled to receive the remaining portion of such
Liquidating Distribution (ratably among such holders based upon the number of
shares of Common Stock held by each such holder as of the time of such
Liquidating Distribution).
4. Non-Liquidating Distributions. At the time of each Non-
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Liquidating Distribution, such Non-Liquidating Distribution shall be made to the
holders of the Senior Preferred Stock, Class L Common, Class A Common and Class
B Common in the following priority:
(a) The holders of the Senior Preferred Stock shall be entitled
to receive all or a portion of such Non-Liquidating Distribution (ratably among
such holders based upon the number of Shares of Senior Preferred Stock held by
each such holder as of the time of such Non-Liquidating Distribution) equal to
the aggregate amount of accrued but unpaid cash dividends required to be paid
pursuant to the last sentence of paragraph 2(b) of this Part B of this Article
III on the outstanding Shares of Senior Preferred Stock as of the time of such
Non-Liquidating Distribution, and no Non-Liquidating Distribution or any portion
thereof shall be made under paragraph 4(b) below until the entire amount of the
accrued but unpaid cash dividends required to be paid pursuant to the last
sentence of paragraph 2(b) of this Part B of this Article III on the outstanding
Shares of Senior Preferred Stock as of the time of such Non-Liquidating
Distribution have been paid in full. The Non-Liquidating Distributions made
pursuant to this paragraph 4(a) to the holders of the Senior Preferred Stock
shall constitute a payment of dividends on Senior Preferred Stock.
(b) After the required amount of a Non-Liquidating Distribution
has been made in full pursuant to paragraph 4(a) above, the holders of Common
Stock shall be entitled to receive all or a portion of such Non-Liquidating
Distribution in the manner and in the priority set forth in paragraphs 3(b), (c)
and (d) hereof.
(c) Notwithstanding any other provision in these Articles of
Incorporation to the contrary, prior to the date on which the Stated Value of
each Share of Senior Preferred Stock, plus all accrued and unpaid dividends
thereon, is paid in full to the holder thereof in connection with the redemption
of such Share or otherwise or such Share is otherwise acquired by the
Corporation, the Corporation shall not make Non-Liquidating Distributions which
would result in cash, property or securities of the Corporation in excess of $25
million being distributed to the holders of the Common Stock.
5. Redemption.
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(a) Optional Redemption. The Corporation shall have the right
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to redeem all or any portion of the Shares of Senior Preferred Stock then
outstanding from the holders thereof by notice to such holders at a redemption
price per Share, to be paid in cash, equal to the Liquidation Preference.
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(b) Mandatory Redemption. On August 1, 2010 (the "Mandatory
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Redemption Date"), the Corporation shall redeem all of the Senior Preferred
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Stock then outstanding from the holders thereof, at a redemption price per
Share, to be paid in cash, equal to the Liquidation Preference.
(c) Redemption Procedures. In the event of a redemption
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pursuant to Subsection (a) or Subsection (b) of this Section 5, the Corporation
shall deliver notice of such redemption to each holder of record of the Senior
Preferred Stock to be redeemed (determined as of the close of business on the
business day next preceding the day on which such notice is given), at the
address shown on the records of the Corporation for such holder or given by such
holder to this Corporation for notice purposes, or if no such address appears or
is given, at the address of the Corporation's principal executive offices. Such
notice (i) shall notify such holder of the redemption to be effected, specify
the number of Shares to be redeemed from such holder, the date of the redemption
(which date shall be not less than thirty (30) nor more than sixty (60) days
after the date the notice is given) (the "Redemption Date"), and the manner in
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which payment may be obtained, and (ii) shall call upon such holder to surrender
to the Corporation, at the Corporation's principal executive offices, in the
manner designated, the certificate or certificates representing the Shares of
Senior Preferred Stock to be redeemed (the "Redemption Notice"). On or after the
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Redemption Date, (x) each holder of Senior Preferred Stock to be redeemed shall
surrender to the Corporation the certificate or certificates representing such
Shares in the manner and at the place designated in the Redemption Notice, (y)
the applicable redemption price shall forthwith be paid to the order of the
person whose name appears on such certificate or certificates as the owner
thereof, either by wire transfer of immediately available funds to such account
as the holder may direct or by delivery of a check (drawn on the New York City
or San Francisco, California branch of a bank chartered under the laws of the
United States of America or any state thereof) to the holder in the manner
prescribed for notices in this Article III and (z) each certificate so
surrendered shall be canceled. In the event that fewer than all of the Shares
represented by any certificate surrendered pursuant to clause (x) of this
Section 5(c) are redeemed, a new certificate representing the unredeemed Shares
shall forthwith be issued and delivered to the holder in the manner prescribed
for notices in this Article III.
(d) Insufficient Funds. If the funds of the Corporation legally
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available for redemption of the Senior Preferred Stock on the Mandatory
Redemption Date are insufficient to redeem the total number of Shares of Senior
Preferred Stock to be redeemed on such date, those funds which are legally
available will be used to redeem the maximum possible number of such Shares
ratably among the holders of such Shares to be redeemed. The Shares of Senior
Preferred Stock not redeemed shall remain outstanding and shall be entitled to
dividends at the Default Rate and shall otherwise be entitled to all the rights
and preferences provided in these Articles. At any time thereafter when
additional funds of the Corporation are legally available for the redemption of
the previously unredeemed Shares of Senior Preferred Stock, such funds will
immediately be used to redeem the balance of the Shares which the Corporation
has become obligated to redeem on the Mandatory Redemption Date but which it has
not redeemed. For purposes of Section 2(d) of Part B of Article III, the
failure to redeem all of the Shares of Senior Preferred Stock to be redeemed at
the Mandatory Redemption Date and to pay in full the Liquidation Preference for
such Shares of
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Senior Preferred Stock on such date shall be treated as an Event of Default
entitling the holders of the Senior Preferred Stock to the rights set forth
therein until such Shares have been redeemed, and the Liquidation Preference has
been paid in full.
(e) Status of Redeemed Stock. In the event that any Shares of
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Senior Preferred Stock are redeemed pursuant to this Section 5, the Shares so
redeemed shall be canceled. No Share of Senior Preferred Stock is entitled to
any Distributions accruing after the date on which the Liquidation Preference is
paid to the holder thereof. On such date all rights of the holder of such Share
of Senior Preferred Stock shall cease, and such Share of Senior Preferred Stock
shall not be deemed to be outstanding.
6. Stock Splits and Stock Dividends. The Corporation shall not in
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any manner subdivide (by stock split, stock dividend or otherwise) or combine
(by stock split, stock dividend or otherwise) the outstanding shares of Common
Stock of one class unless the outstanding shares of Common Stock of the other
classes shall be proportionately subdivided or combined. All such subdivisions
and combinations shall be payable only in shares of Class L Common to the
holders of Class L Common, in shares of Class A Common to the holders of Class A
Common and in shares of Class B Common to the holders of Class B Common. In no
event shall a stock split or stock dividend constitute a payment of Yield or a
return of Original Cost.
7. Conversion Right. Each record holder of Class A Common will be
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entitled to convert any or all of such holder's Class A Common into the same
number of shares of Class B Common and each record holder of Class B Common will
be entitled to convert any or all of the shares of such holder's Class B Common
into the same number of shares of Class A Common; provided, however, that at the
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time of conversion of shares of Class B Common into shares of Class A Common
such holder would be permitted, pursuant to applicable law, to hold the total
number of shares of Class A Common which such holder would hold after giving
effect to such conversion; and provided, further, that the determination of a
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holder of Class B Common that such holder is permitted pursuant to applicable
law to convert Class B Common into Class A Common pursuant to this Section 7
shall be final and binding upon the Corporation.
Each conversion of shares of one class of Common Stock into shares of
another class of Common Stock will be effected by the surrender of the
certificate or certificates representing the shares to be converted at the
principal executive office of the Corporation at any time during normal business
hours, together with a written notice by the holder of such shares stating the
number of shares that any such holder desires to convert into the other class of
Common Stock. Such conversion will be deemed to have been effected as of the
close of business on the date on which such certificate or certificates have
been surrendered and such notice has been received by the Corporation, and at
such time the rights of any such holder with respect to the converted class of
Common Stock will cease and the person or persons in whose name or names the
certificate or certificates for shares of the other class of Common Stock are to
be issued upon such conversion will be deemed to have become the holder or
holders of record of the shares of such other class of Common Stock represented
thereby.
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So long as any shares of any class of Common Stock are outstanding,
the Corporation will at all times reserve and keep available out of its
authorized but unissued shares of Class A Common and Class B Common (or any
shares of Class A Common or Class B Common which are held as treasury shares),
the number of shares sufficient for issuance upon conversion.
8. Protective Provisions. As long as any Shares of Senior Preferred
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Stock are outstanding, the Corporation shall not without first obtaining the
written consent of the holders of at least a majority of the then outstanding
Shares of Senior Preferred Stock:
(a) alter or change the rights, preferences or privileges of any
shares of Senior Preferred Stock;
(b) except as may be required pursuant to Section 2.5 of that
certain Recapitalization Agreement dated as of March 13, 1999, as the same be
amended from time to time, by and among the Corporation, Hyundai Electronics
Industries Co., Ltd., Hyundai Electronics America and ChipPAC Merger Corp.,
increase the total number of authorized shares of Senior Preferred Stock or
issue or authorize the issuance of any additional Shares of Senior Preferred
Stock; or
(c) authorize or issue, or obligate itself to issue, any other
equity security (including any other security convertible into or exercisable
for any equity security) having a preference over or being on a parity with the
Senior Preferred Stock with respect to dividends or liquidation rights or
liquidation preferences.
9. No Impairment. The Corporation shall not, by amendment of its
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Articles of Incorporation or Bylaws or through any reorganization,
recapitalization, transfer of assets, consolidation, merger or other business
combination transaction, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed under Part B of this Article III by the
Corporation, but will at all times in good faith assist in the carrying out of
all provisions of Part B of Article III and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the holders of
the Senior Preferred Stock under these Articles against impairment.
10. Registration of Transfer. The Corporation shall keep at its
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principal office (or such other place as the Corporation reasonably designates)
a register for the registration of the Senior Preferred Stock and the Common
Stock. Upon the surrender of any certificate representing shares of Senior
Preferred Stock or any class of Common Stock at such place, the Corporation
shall, at the request of the registered holder of such certificate, execute and
deliver a new certificate or certificates in exchange therefor (either of the
same class, or as directed by the holder in connection with a conversion from
one class to another) representing in the aggregate the number of shares of such
class represented by the surrendered certificate and the Corporation forthwith
shall cancel such surrendered certificate. Each such new certificate will be
registered in such name and will represent such number of shares of such class
as is requested by the holder of the surrendered certificate and
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shall be substantially identical in form to the surrendered certificate. The
issuance of new certificates shall be made without charge to the holders of the
surrendered certificates for any issuance tax in respect thereof or other cost
incurred by the Corporation in connection with such issuance. The Corporation
will not close its books against the transfer of any share of Common Stock, or
of any share of Common Stock issued or issuable upon conversion of shares of
another class of Common Stock, in any manner that would interfere with the
timely conversion of such shares of Common Stock.
11. Replacement. Upon receipt of evidence reasonably satisfactory to
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the Corporation (an affidavit of the registered holder will be satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any certificate
evidencing one or more shares of any class of Senior Preferred Stock or Common
Stock, and in the case of any such loss, theft or destruction, upon receipt of
indemnity reasonably satisfactory to the Corporation, or, in the case of any
such mutilation upon surrender of such certificate, the Corporation shall (at
its expense) execute and deliver in lieu of such certificate a new certificate
of like kind representing the number of shares of such class represented by such
lost, stolen, destroyed or mutilated certificate and dated the date of such
lost, stolen, destroyed or mutilated certificate.
12. Notices. All notices referred to herein shall be in writing,
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shall be delivered personally or by first class mail, postage prepaid, and shall
be deemed to have been given when so delivered or mailed to the Corporation at
its principal executive offices and to any stockholder at such holder's address
as it appears in the stock records of the Corporation (unless otherwise
specified in a written notice to the Corporation by such holder).
13. Amendment and Waiver. No amendment or waiver of any provision of
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this Article III shall be effective without the prior written consent of the
holders of not less than a majority of the then outstanding Class A Common,
voting as a single class; provided that no amendment as to any terms or
provisions of, or for the benefit of, the Senior Preferred Stock or any class of
Common Stock that adversely affects the powers, preferences or special rights of
the Senior Preferred Stock or such class of Common Stock shall be effective
without the prior consent of the holders of a majority of the then outstanding
shares of such affected class of Common Stock or the affected shares of Senior
Preferred Stock, as the case may be, voting as a single class.
Part C. Definitions.
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"Distribution" means each distribution made by the Corporation to holders
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of capital stock, whether in cash, property, or securities of the Corporation
and whether by dividend, liquidating distributions or otherwise; provided that
none of the following shall be a Distribution: (a) any redemption or repurchase
by the Corporation of any capital stock held by an employee, director or former
employee or director of the Corporation or any of its subsidiaries or (b) any
recapitalization or exchange of any capital stock, or any subdivision (by stock
split, stock dividend or otherwise) or any combination (by stock split, stock
dividend or otherwise) of any outstanding shares of capital stock.
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"Hyundai Group" means Hyundai Electronics Industries Co., Ltd., Hyundai
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Electronics America and their respective affiliates.
"Liquidating Distribution" mean any Distribution made upon a Liquidation
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Event.
"Liquidation Event" means (i) any liquidation, dissolution or winding up of
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the Corporation, whether voluntary or involuntary, (ii) any sale or transfer by
the Corporation of all or substantially all (as defined in the Revised Model
Business Corporation Act) of its assets on a consolidated basis, (iii) any
consolidation, merger or reorganization of the Corporation with or into any
other entity or entities as a result of which the holders of the Corporation's
outstanding capital stock possessing the voting power (under ordinary
circumstances) to elect a majority of the Corporation's Board of Directors
immediately prior to such consolidation, merger or reorganization cease to own
the outstanding capital stock of the surviving corporation possessing the voting
power (under ordinary circumstances) to elect a majority of the surviving
corporation's board of directors or (iv) any sale or transfer to any third party
of shares of the Corporation's capital stock by the holders thereof as a result
of which the holders of the Corporation's outstanding capital stock possessing
the voting power (under ordinary circumstances) to elect a majority of the
Corporation's Board of Directors immediately prior to such sale or transfer
cease to own the outstanding capital stock of the Corporation possessing the
voting power (under ordinary circumstances) to elect a majority of the
Corporation's board of directors.
"Liquidation Preference" means an amount per Share of Senior Preferred
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Stock equal to the sum of (A) the Stated Value plus (B) the amount of all
accrued but unpaid dividends on such Share of Senior Preferred Stock as provided
in Section 2 of Part B of Article III.
"Non-Liquidating Distribution" means each Distribution other than a
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Liquidating Distribution.
"Original Cost" of each share of Class L Common shall be equal to $9.00 (as
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proportionally adjusted for all stock splits, stock dividends and other
recapitalizations affecting the Class L Common).
"Person" means an individual, a partnership, a corporation, a limited
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liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a government or any branch,
department, agency, political subdivision or official thereof.
"Stated Value" of each share of Senior Preferred Stock shall be equal to
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$1,000 (as proportionally adjusted for all stock splits, stock dividends and
other recapitalizations affecting the Senior Preferred Stock).
"Unpaid Yield" of any share of Class L Common means an amount equal to the
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excess, if any, of (a) the aggregate Yield accrued on such share, over (b) the
aggregate amount of Distributions made by the Corporation that constitute
payment of Yield on such share.
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"Unreturned Original Cost" of any share of Class L Common means an amount
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equal to the excess, if any, of (a) the Original Cost of such share, over (b)
the aggregate amount of Distributions made by the Corporation that constitute a
return of Original Cost of such share.
"Yield" means, with respect to each share of Class L Common for each
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calendar quarter, the amount accruing on such share each day during such quarter
at the rate of 12.0% per annum of the sum of (a) such share's Unreturned
Original Cost, plus (b) Unpaid Yield thereon for all prior quarters. In
calculating the amount of any Distribution to be made during a calendar quarter,
the portion of a Class L Common share's Yield for such portion of such quarter
elapsing before such Distribution is made shall be taken into account.
Part D. Class A Preferred Stock Terms.
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10,000 shares of the Corporation's Preferred Stock shall be designated
as Class A Convertible Preferred Stock, par value $.01 per share (the "Class A
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Preferred").
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The Class A Preferred shall have the following rights, preferences and
privileges, subject to the following restrictions, limitations and
qualifications.
Section 1. Dividends.
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1A. General Obligation. When and as declared by the Corporation's
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Board of Directors (the "Board") and to the extent permitted under the General
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Corporation Law of California, the Corporation shall pay preferential dividends
in cash to the holders of the Class A Preferred as provided in this Section 1.
Dividends on each share of the Class A Preferred (a "Share") shall accrue on a
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daily basis at the rate of 10% per annum of the sum of the Liquidation Value
thereof plus all accumulated and unpaid dividends thereon from and including the
date of issuance of such Share to and including the first to occur of (i) the
date on which the Liquidation Value of such Share (plus all accrued and unpaid
dividends thereon) is paid to the holder thereof in connection with the
liquidation of the Corporation or the redemption of such Share is effected by
the Corporation, (ii) the date on which such Share is converted into shares of
Conversion Stock hereunder or (iii) the date on which such Share is otherwise
acquired by the Corporation. Such dividends shall accrue whether or not they
have been declared and whether or not there are profits, surplus or other funds
of the Corporation legally available for the payment of dividends, and such
dividends shall be cumulative. The date on which the Corporation initially
issues any Share shall be deemed to be its "date of issuance" regardless of the
number of times transfer of such Share is made on the stock records maintained
by or for the Corporation and regardless of the number of certificates which may
be issued to evidence such Share.
1B. Dividend Reference Dates. To the extent not paid on August 1 of
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each year, beginning August 1, 2000 (the "Dividend Reference Date"), all
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dividends which have accrued on each Share outstanding during the twelve-month
period (or other period in the case of the initial
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Dividend Reference Date) ending upon each such Dividend Reference Date shall be
accumulated and shall remain accumulated dividends with respect to such Share
until paid to the holder thereof.
1C. Distribution of Partial Dividend Payments. Except as otherwise
-----------------------------------------
provided herein, if at any time the Corporation pays less than the total amount
of dividends then accrued with respect to the Class A Preferred, such payment
shall be distributed pro rata among the holders thereof based upon the aggregate
accrued but unpaid dividends on the Shares held by each such holder.
1D. Participation in Non-Cash Dividends. In addition to the
-----------------------------------
dividends accruing on the Class A Preferred under paragraph 1A above, if the
Corporation declares or pays any dividends upon the Common Stock other than cash
dividends or dividends payable solely in shares of Common Stock, the Corporation
shall also declare and pay to the holders of the Class A Preferred at the same
time that it declares and pays such dividends to the holders of the Common
Stock, the dividends which would have been declared and paid with respect to the
Common Stock issuable upon conversion of the Class A Preferred had all of the
outstanding Class A Preferred been converted immediately prior to the record
date for such dividend, or if no record date is fixed, the date as of which the
record holders of Common Stock entitled to such dividends are to be determined.
Section 2. Liquidation.
-----------
Upon any liquidation, dissolution or winding up of the Corporation
(whether voluntary or involuntary), each holder of Class A Preferred shall be
entitled to be paid, before any distribution or payment is made upon any Junior
Securities, an amount in cash equal to the aggregate Liquidation Value of all
Shares held by such holder (plus all accrued and unpaid dividends thereon), and
the holders of Class A Preferred shall not be entitled to any further payment.
If upon any such liquidation, dissolution or winding up of the Corporation the
Corporation's assets to be distributed among the holders of the Class A
Preferred hereunder are insufficient to permit payment to such holders of the
aggregate amount which they are entitled to be paid upon any liquidation,
dissolution or winding up of the Corporation, then the entire assets available
to be distributed to the Corporation's stockholders shall be distributed pro
rata among such holders based upon the aggregate Liquidation Value (plus all
accrued and unpaid dividends) of the Class A Preferred held by each such holder.
Prior to the liquidation, dissolution or winding up of the Corporation, the
Corporation shall declare for payment all accrued and unpaid dividends with
respect to the Class A Preferred, but only to the extent of funds of the
Corporation legally available for the payment of dividends. Not less than 30
days prior to the payment date stated therein, the Corporation shall mail
written notice of any such liquidation, dissolution or winding up to each record
holder of Class A Preferred, setting forth in reasonable detail the amount of
proceeds to be paid with respect to each Share and each share of Common Stock in
connection with such liquidation, dissolution or winding up. Any (i) sale or
transfer by the Corporation of all or substantially all (as defined in the
Revised Model Business Corporation Act) of its assets on a consolidated basis,
(ii) consolidation, merger or reorganization of the Corporation with or into any
other entity or entities as a result of which the holders of the Corporation's
outstanding capital stock possessing the voting power (under ordinary
circumstances)
-12-
to elect a majority of the Board immediately prior to such consolidation, merger
or reorganization cease to own the outstanding capital stock of the surviving
corporation possessing the voting power (under ordinary circumstances) to elect
a majority of the surviving corporation's board of directors (any such
transaction described in clause (i) or (ii), a "Fundamental Change") or (iii)
------------------
issuance by the Corporation or sale or transfer to any third party of shares the
Corporation's capital stock by the holders thereof as a result of which the
holders of the Corporation's outstanding capital stock possessing the voting
power (under ordinary circumstances) to elect a majority of the Board
immediately prior to such sale or transfer cease to own the outstanding capital
stock of the Corporation possessing the voting power (under ordinary
circumstances) to elect a majority of the Board (any such transaction in this
clause (iii), a "Change in Control") shall be deemed to be a liquidation,
-----------------
dissolution or winding up of the Corporation within the meaning of this Section
2, and the holders of the Class A Preferred shall be entitled to receive payment
from the Corporation of the amounts payable with respect to the Class A
Preferred upon a liquidation, dissolution or winding up of the Corporation under
this Section 2 in cancellation of their Shares upon the consummation of any such
transaction.
Section 3. Priority of Class A Preferred on Dividends and
----------------------------------------------
Redemptions.
- -----------
So long as any Class A Preferred remains outstanding, without the
prior written consent of the holders of at least a majority of the outstanding
Shares, the Corporation shall not, nor shall it permit any Subsidiary to,
redeem, purchase or otherwise acquire directly or indirectly any Junior
Securities, nor shall the Corporation directly or indirectly pay or declare any
dividend or make any distribution upon any Junior Securities, if at the time of
or immediately after any such redemption, purchase, acquisition, dividend or
distribution the Corporation has failed to pay the full amount of dividends
accrued on the Class A Preferred or the Corporation has failed to make any
redemption of the Class A Preferred required hereunder; provided that (i) the
Corporation may redeem or repurchase any capital stock held by an employee,
director or former employee or director of the Corporation or any of its
Subsidiaries, (ii) any recapitalization or exchange of any capital stock, or any
subdivision (by stock split, stock dividend or otherwise) or any combination (by
stock split, stock dividend or otherwise) of any outstanding shares of the
Corporation's capital stock shall not be deemed a redemption, purchase,
acquisition, dividend or distribution within the meaning of this Section 3 and
(iii) the Corporation may redeem, purchase or otherwise acquire Common Stock for
cash or pay or declare dividends or distributions on the Common Stock in cash in
an aggregate amount not to exceed $25 million (provided that the aggregate
amount of such redemptions, purchases, acquisitions, dividends or distributions
paid or payable in any one calendar year shall not exceed the amount of
dividends paid on the Class A Preferred in such year multiplied by a fraction,
----------
the numerator of which shall be equal to the total number of shares of Common
Stock then outstanding immediately prior to any such redemption, purchase,
acquisition, dividend or distribution and the denominator of which shall be
equal to the total number of shares of Common Stock issuable upon conversion of
all of the Shares of Class A Preferred immediately prior to any such redemption,
purchase, acquisition, dividend or distribution).
-13-
Section 4. Redemptions.
-----------
4A. Optional Redemptions. The Corporation may at any time and from
--------------------
time to time after August 1, 2005 redeem all or any portion of the Shares of
Class A Preferred then outstanding. Upon any such redemption, the Corporation
shall pay a price per Share equal to the greater of (i) the Market Price thereof
and (ii) the Liquidation Value thereof (plus all accrued and unpaid dividends
thereon) and a premium equal to the following percentage of the Liquidation
Value:
Redemption
Occurs On or After But Prior to % Premium
------------------ ------------ ---------
August 1, 2005 August 1, 2006 10%
August 1, 2006 August 1, 2007 8%
August 1, 2007 August 1, 2008 6%
August 1, 2008 August 1, 2009 4%
August 1, 2009 August 1, 2010 2%
August 1, 2010 0%
4B. Redemption upon Request. If the Corporation does not consummate
-----------------------
a Qualifying IPO on or prior to August 1, 2001, the holders of not less than a
majority of the then outstanding Class A Preferred may request redemption of all
of their Shares of Class A Preferred by delivering written notice of such
request to the Corporation. Within five days after receipt of such request, the
Corporation shall give written notice of such request to all other holders of
Class A Preferred, and such other holders may request redemption of their Shares
of Class A Preferred by delivering written notice to the Corporation within ten
days after receipt of the Corporation's notice. The Corporation shall be
required to redeem all Shares with respect to which such redemption requests
have been made at a price per Share equal to the Liquidation Value thereof (plus
all accrued and unpaid dividends thereon) within 30 days after receipt of the
initial redemption request. The provisions of this paragraph 4B shall terminate
automatically and be of no further force and effect upon the consummation of a
Qualifying IPO.
4C. Redemption Payments. For each Share which is to be redeemed
-------------------
hereunder, the Corporation shall be obligated on the Redemption Date to pay to
the holder thereof (upon surrender by such holder at the Corporation's principal
office of the certificate representing such Share) an amount in cash determined
in accordance with paragraph 4A or paragraph 4B, as the case may be.
Notwithstanding anything to the contrary contained herein, all redemptions
pursuant to this Section 4 will be subject to applicable restrictions contained
in the General Corporation Law of California and in the Corporation's and its
Subsidiaries' debt and equity financing agreements. If, due to any of the
aforementioned restrictions, the funds of the Corporation available for
redemption of Shares on any Redemption Date are insufficient to redeem the total
number of Shares to be redeemed on such date, those funds which are available
free of such restrictions shall be used to redeem the maximum possible number of
Shares pro rata among the holders of the Shares to be
-14-
redeemed based upon the aggregate Liquidation Value of such Shares held by each
such holder (plus all accrued and unpaid dividends thereon). At any time
thereafter when additional funds of the Corporation are available free of such
restrictions for the redemption of Shares, such funds shall immediately be used
to redeem the balance of the Shares which the Corporation has become obli gated
to redeem on any Redemption Date but which it has not redeemed. Prior to any
redemption of Class A Preferred, the Corporation shall declare for payment all
accrued and unpaid dividends with respect to the Shares which are to be
redeemed, but only to the extent of funds of the Corporation available free of
such restrictions for the payment of dividends.
4D. Notice of Redemption. Except as otherwise provided herein, the
--------------------
Corporation shall mail written notice of each redemption of any Class A
Preferred (other than a redemption at the request of a holder or holders of
Class A Preferred) to each record holder thereof not more than 60 nor less than
30 days prior to the date on which such redemption is to be made. In case fewer
than the total number of Shares represented by any certificate are redeemed, a
new certificate representing the number of unredeemed Shares shall be issued to
the holder thereof without cost to such holder within five business days after
surrender of the certificate representing the redeemed Shares.
4E. Determination of the Number of Each Holder's Shares to be
---------------------------------------------------------
Redeemed. Except as otherwise provided herein, the number of Shares of Class A
- --------
Preferred to be redeemed from each holder thereof in redemptions hereunder shall
be the number of Shares determined by multiplying the total number of Shares to
be redeemed times a fraction, the numerator of which shall be the total number
of Shares then held by such holder and the denominator of which shall be the
total number of Shares then outstanding.
4F. Dividends After Redemption Date. No Share shall be entitled to
-------------------------------
any dividends accruing after the date on which the Liquidation Value of such
Share (plus all accrued and unpaid dividends thereon) is paid to the holder of
such Share. On such date, all rights of the holder of such Share shall cease,
and such Share shall no longer be deemed to be issued and outstanding.
Section 5. Voting Rights.
-------------
The holders of the Class A Preferred shall be entitled to notice of
all stockholders meetings in accordance with the Corporation's bylaws, and the
holders of the Class A Preferred shall be entitled to vote on all matters
submitted to the stockholders for a vote together with the holders of the Class
A Common voting together as a single class, with each share of Class A Common
entitled to one vote per share and each Share of Class A Preferred entitled to
one vote for each share of Class A Common issuable upon conversion of the Class
A Preferred as of the record date for such vote or, if no record date is
specified, as of the date of such vote.
-15-
Section 6. Conversion.
----------
6A. Conversion Procedure.
--------------------
(i) At any time and from time to time, any holder of Class A
Preferred may convert all or any portion of the Class A Preferred held by such
holder into a number of shares of Conversion Stock computed by multiplying the
number of Shares to be converted by $1,000.00 and dividing the result by the
Conversion Price then in effect.
(ii) Except as otherwise provided herein, each conversion of
Class A Preferred shall be deemed to have been effected as of the close of
business on the date on which the certificate or certificates representing the
Class A Preferred to be converted have been surrendered for conversion at the
principal office of the Corporation. At the time any such conversion has been
effected, the rights of the holder of the Shares converted as a holder of Class
A Preferred shall cease and the Person or Persons in whose name or names any
certificate or certificates for shares of Conversion Stock are to be issued upon
such conversion shall be deemed to have become the holder or holders of record
of the shares of Conversion Stock represented thereby.
(iii) The conversion rights of any Share subject to redemption
hereunder shall terminate on the Redemption Date for such Share unless the
Corporation has failed to pay to the holder thereof all amounts due to such
holder in connection with any such redemption.
(iv) Notwithstanding any other provision hereof, if a
conversion of Class A Preferred is to be made in connection with an Initial
Public Offering or other transaction affecting the Corporation, the conversion
of any Shares of Class A Preferred may, at the election of the holder thereof,
be conditioned upon the consummation of such transaction, in which case such
conversion shall not be deemed to be effective until such transaction has been
consummated.
(v) As soon as possible after a conversion has been effected
(but in any event within five business days in the case of subparagraph (a)
below), the Corporation shall deliver to the converting holder:
(a) a certificate or certificates representing the number of
shares of Conversion Stock issuable by reason of such conversion in such
name or names and such denomination or denominations as the converting
holder has specified;
(b) payment in an amount equal to all accrued dividends with
respect to each Share converted which have not been paid prior thereto,
plus the amount payable under subparagraph (x) below with respect to such
conversion; and
(c) a certificate representing any Shares of Class A Preferred
which were represented by the certificate or certificates delivered to the
Corporation in connection with such conversion but which were not
converted.
-16-
(vi) The Corporation shall declare the payment of all dividends
payable under subparagraph (v)(b) above. If the Corporation is not permitted
under applicable law or any restriction contained in the Corporation's and its
Subsidiaries' debt and equity financing agreements to pay any portion of the
accrued and unpaid dividends on the Class A Preferred being converted, the
Corporation shall pay such dividends to the converting holder as soon thereafter
as funds of the Corporation are available free of any such restrictions or
prohibition of applicable law for such payment.
(vii) The issuance of certificates for shares of Conversion
Stock upon conversion of Class A Preferred shall be made without charge to the
holders of such Class A Preferred for any issuance tax in respect thereof or
other cost incurred by the Corporation in connection with such conversion and
the related issuance of shares of Conversion Stock. Upon conversion of each
Share of Class A Preferred, the Corporation shall take all such actions as are
necessary in order to insure that the Conversion Stock issuable with respect to
such conversion shall be validly issued, fully paid and nonassessable, free and
clear of all taxes, liens, charges and encumbrances with respect to the issuance
thereof.
(viii) The Corporation shall not close its books against the
transfer of Class A Preferred or of Conversion Stock issued or issuable upon
conversion of Class A Preferred in any manner which interferes with the timely
conversion of Class A Preferred.
(ix) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Conversion Stock, solely
for the purpose of issuance upon the conversion of the Class A Preferred, such
number of shares of Conversion Stock issuable upon the conversion of all
outstanding Class A Preferred. All shares of Conversion Stock which are so
issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation shall
not take any action which would cause the number of authorized but unissued
shares of Conversion Stock to be less than the number of such shares required to
be reserved hereunder for issuance upon conversion of the Class A Preferred.
(x) If any fractional interest in a share of Conversion Stock
would, except for the provisions of this subparagraph, be delivered upon any
conversion of the Class A Preferred, the Corporation, in lieu of delivering the
fractional share therefor, shall pay an amount to the holder thereof equal to
the Market Price of such fractional interest as of the date of conversion.
(xi) If the shares of Conversion Stock issuable by reason of
conversion of Class A Preferred are convertible into or exchangeable for any
other stock or securities of the Corporation, the Corporation shall, at the
converting holder's option, upon surrender of the Shares to be converted by such
holder as provided herein together with any notice, statement or payment
required to effect such conversion or exchange of Conversion Stock, deliver to
such holder or as otherwise specified by such holder a certificate or
certificates representing the stock or securities into which the shares of
Conversion Stock issuable by reason of such conversion are so convertible or
-17-
exchangeable, registered in such name or names and in such denomination or
denominations as such holder has specified.
6B. Conversion Price.
----------------
(i) The initial Conversion Price shall be $1.50, which is 150%
of the weighted average price per share of Class L Common and Class A Common
paid by Bain and CVC in connection with the Recapitalization Agreement, of which
90% is attributable to the shares of Class L Common and 10% is attributable to
the shares of Class A Common. Ninety percent (90%) of the initial and any
subsequent Conversion Price shall be deemed attributable to the shares of Class
L Common and ten percent (10%) of the initial and any subsequent Conversion
Price shall be deemed attributable to the shares of Class A Common. In order to
prevent dilution of the conversion rights granted under this Section 6, the
Conversion Price shall be subject to adjustment from time to time pursuant to
this paragraph 6B.
(ii) If and whenever on or after the original date of issuance
of the Class A Preferred the Corporation issues or sells, or in accordance with
paragraph 6C is deemed to have issued or sold, any shares of its Common Stock
for a consideration per share less than the portion of the Conversion Price
attributable to such class of Common Stock (as set forth in Section 6B(i)) in
effect immediately prior to the time of such issue or sale, then immediately
upon such issue or sale or deemed issue or sale the Conversion Price shall be
reduced to the Conversion Price determined (in accordance with Section 6B(i)) by
dividing (a) the sum of (1) the product derived by multiplying the Conversion
Price in effect immediately prior to such issue or sale by the number of shares
of Common Stock Deemed Outstanding immediately prior to such issue or sale, plus
(2) the consideration, if any, received by the Corporation upon such issue or
sale, by (b) the number of shares of Common Stock Deemed Outstanding immediately
after such issue or sale.
(iii) Notwithstanding the foregoing, there shall be no
adjustment in the Conversion Price as a result of any issue or sale (or deemed
issue or sale) of any shares of Common Stock to (A) employees, officers or
directors of the Corporation and its Subsidiaries pursuant to stock option
plans, stock ownership plans or agreements or other incentive stock arrangements
approved by the Board or (B) unaffiliated third party financing sources, so long
as such issuances or sales (or deemed issuances or sales) to unaffiliated third
party financing sources for a consideration per share less than the portion of
the Conversion Price attributable to such class of Common Stock (as set forth in
Section 6B(i)) does not exceed 10% of the Corporation's Common Stock.
6C. Effect on Conversion Price of Certain Events. For purposes of
--------------------------------------------
determining the adjusted Conversion Price under paragraph 6B, the following
shall be applicable:
(i) Issuance of Rights or Options. If the Corporation in any
-----------------------------
manner grants or sells any Options and the price per share for which Common
Stock is issuable upon the exercise of such Options, or upon conversion or
exchange of any Convertible Securities issuable upon
-18-
exercise of such Options, is less than the portion of the Conversion Price
attributable to such class of Common Stock (as set forth in Section 6B(i)) in
effect immediately prior to the time of the granting or sale of such Options,
then the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the total maximum
amount of such Convertible Securities issuable upon the exercise of such Options
shall be deemed to be outstanding and to have been issued and sold by the
Corporation at the time of the granting or sale of such Options for such price
per share. For purposes of this paragraph, the "price per share for which Common
Stock is issuable" shall be determined by dividing (A) the total amount, if any,
received or receivable by the Corporation as consideration for the granting or
sale of such Options, plus the minimum aggregate amount of additional
consideration payable to the Corporation upon exercise of all such Options, plus
in the case of such Options which relate to Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable to the Corporation
upon the issuance or sale of such Convertible Securities and the conversion or
exchange thereof, by (B) the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon the conversion or exchange of
all such Convertible Securities issuable upon the exercise of such Options. No
further adjustment of the Conversion Price shall be made when Convertible
Securities are actually issued upon the exercise of such Options or when Common
Stock is actually issued upon the exercise of such Options or the conversion or
exchange of such Convertible Securities.
(ii) Issuance of Convertible Securities. If the Corporation in
----------------------------------
any manner issues or sells any Convertible Securities and the price per share
for which Common Stock is issuable upon conversion or exchange thereof is less
than the portion of the Conversion Price attributable to such class of Common
Stock (as set forth in Section 6B(i)) in effect immediately prior to the time of
such issue or sale, then the maximum number of shares of Common Stock issuable
upon conversion or exchange of such Convertible Securities shall be deemed to be
outstanding and to have been issued and sold by the Corporation at the time of
the issuance or sale of such Convertible Securities for such price per share.
For the purposes of this paragraph, the "price per share for which Common Stock
is issuable" shall be determined by dividing (A) the total amount received or
receivable by the Corporation as consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the conversion or
exchange thereof, by (B) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment of the Conversion Price shall be made when Common Stock is
actually issued upon the conversion or exchange of such Convertible Securities,
and if any such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustments of the Conversion Price had been
or are to be made pursuant to other provisions of this Section 6, no further
adjustment of the Conversion Price shall be made by reason of such issue or
sale.
(iii) Change in Option Price or Conversion Rate. If the
-----------------------------------------
purchase price provided for in any Options, the additional consideration, if
any, payable upon the conversion or exchange of any Convertible Securities or
the rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock changes at any time, the Conversion Price in
-19-
effect at the time of such change shall be immediately adjusted to the
Conversion Price which would have been in effect at such time had such Options
or Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case may be, at the
time initially
granted, issued or sold. For purposes of paragraph 6C, if the
terms of any Option or Convertible Security which was outstanding as of the date
of issuance of the Class A Preferred are changed in the manner described in the
immediately preceding sentence, then such Option or Convertible Security and the
Common Stock deemed issuable upon exercise, conversion or exchange thereof shall
be deemed to have been issued as of the date of such change.
(iv) Treatment of Expired Options and Unexercised Convertible
--------------------------------------------------------
Securities. Upon the expiration of any Option or the termination of any right to
- ----------
convert or exchange any Convertible Security without the exercise of any such
Option or right, the Conversion Price then in effect hereunder shall be adjusted
immediately to the Conversion Price which would have been in effect at the time
of such expiration or termination had such Option or Convertible Security, to
the extent outstanding immediately prior to such expiration or termination,
never been issued. For purposes of paragraph 6C, the expiration or termination
of any Option or Convertible Security which was outstanding as of the date of
issuance of the Class A Preferred shall not cause the conversion Price hereunder
to be adjusted unless, and only to the extent that, a change in the terms of
such Option or Convertible Security caused it to be deemed to have been issued
after the date of issuance of the Class A Preferred.
(v) Calculation of Consideration Received. If any Common
-------------------------------------
Stock, Option or Convertible Security is issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor shall be deemed to
be the amount received by the Corporation therefor (net of discounts,
commissions and related expenses). If any Common Stock, Option or Convertible
Security is issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Corporation shall be the fair
value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the
Corporation shall be the Market Price thereof as of the date of receipt. If any
Common Stock, Option or Convertible Security is issued to the owners of the non-
surviving entity in connection with any merger in which the Corporation is the
surviving corporation, the amount of consideration therefor shall be deemed to
be the fair value of such portion of the net assets and business of the non-
surviving entity as is attributable to such Common Stock, Option or Convertible
Security, as the case may be. The fair value of any consideration other than
cash and securities shall be determined by the Board in its reasonable good
faith judgment.
(vi) Integrated Transactions. In case any Option is issued in
-----------------------
connection with the issue or sale of other securities of the Corporation,
together comprising one integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the Option
shall be deemed to have been issued for a consideration of $.01.
(vii) Treasury Shares. The number of shares of Common Stock
---------------
outstanding at any given time shall not include shares owned or held by or for
the account of the Corporation or
-20-
any Subsidiary, and the disposition of any shares so owned or held shall be
considered an issue or sale of Common Stock.
(viii) Record Date. If the Corporation takes a record of the
-----------
holders of Common Stock for the purpose of entitling them (a) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (b) to subscribe for or purchase Common Stock, Options
or Convertible Securities, then such record date shall be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or upon the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
6D. Subdivision or Combination of Common Stock. If the Corporation
------------------------------------------
at any time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Conversion Price in effect immediately prior to
such subdivision shall be proportionately reduced (in accordance with Section
6B(i)), and if the Corporation at any time combines (by reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Conversion Price in effect immediately prior to
such combination shall be proportionately increased (in accordance with Section
6B(i)).
6E. Notices. Immediately upon any adjustment of the Conversion
-------
Price, the Corporation shall give written notice thereof to all holders of Class
A Preferred, setting forth in reasonable detail and certifying the calculation
of such adjustment.
6F. Mandatory Conversion. Upon the consummation of a Qualifying
--------------------
IPO, all of the then outstanding Shares of Class A Preferred shall be
automatically converted into Conversion Stock at the then effective Conversion
Price. Any such automatic conversion shall only be effected at the time of and
subject to the closing of such Qualifying IPO and upon written notice of such
automatic conversion delivered to all holders of Class A Preferred at least
seven days prior to such closing.
Section 7. Protective Provisions.
---------------------
As long as any Shares of Class A Preferred are outstanding, the
Corporation shall not without first obtaining the written consent of the holders
of at least 662/3% of the then outstanding Shares of Class A Preferred:
(a) amend or change the rights, preferences, privileges or powers of,
or the restrictions provided for the benefit of, the Class A Preferred;
(b) authorize, create or issue any new shares of any class of capital
stock or any security convertible into or exercisable for any such class of
capital stock having a preference superior to the Class A Preferred with respect
to dividends or liquidation rights or liquidation
-21-
preferences, other than the issuance of any shares of the Corporation's Class B
Preferred Stock, par value $.01 per share; or
(c) reclassify any outstanding shares of capital stock into any class
of capital stock or any security convertible into or exercisable for any such
class of capital stock having a preference superior to the Class A Preferred
with respect to dividends or liquidation rights or liquidation preferences.
Section 8. Registration of Transfer.
------------------------
The Corporation shall keep at its principal office a register for the
registration of Class A Preferred. Upon the surrender of any certificate
representing Class A Preferred at such place, the Corporation shall, at the
request of the record holder of such certificate, execute and deliver (at the
Corporation's expense) a new certificate or certificates in exchange therefor
representing in the aggregate the number of Shares represented by the
surrendered certificate. Each such new certificate shall be registered in such
name and shall represent such number of Shares as is requested by the holder of
the surrendered certificate and shall be substantially identical in form to the
surrendered certificate, and dividends shall accrue on the Class A Preferred
represented by such new certificate from the date to which dividends have been
fully paid on such Class A Preferred represented by the surrendered certificate.
Section 9. Replacement.
-----------
Upon receipt of evidence reasonably satisfactory to the Corporation
(an affidavit of the registered holder shall be satisfactory) of the ownership
and the loss, theft, destruction or mutilation of any certificate evidencing
Shares of Class A Preferred, and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation, or, in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
Shares of such class represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate, and dividends shall accrue on the Class A Preferred represented by
such new certificate from the date to which dividends have been fully paid on
such lost, stolen, destroyed or mutilated certificate.
Section 10. Definitions.
-----------
"Bain" means Bain Capital, Inc. and its affiliates.
----
"Class A Common" means the Corporation's Class A Common Stock, par
--------------
value $.01 per share and the Corporation's Class B Common Stock, par value $.01
per share.
"Class L Common" means the Corporation's Class L Common Stock, par
--------------
value $.01 per share.
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"Common Stock" means, collectively, the Corporation's Class A Common,
------------
Class L Common and any capital stock of any class of the Corporation hereafter
authorized which is not limited to a fixed sum or percentage of par or stated
value in respect to the rights of the holders thereof to participate in
dividends or in the distribution of assets upon any liquidation, dissolution or
winding up of the Corporation.
"Common Stock Deemed Outstanding" means, at any given time, the number
-------------------------------
of shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock issuable upon the exercise or conversion of any Options
or Convertible Securities, including, without limitation, the Class A Preferred
(whether or not, in the case of any Options or Convertible Securities, any such
Options or Convertible Securities are actually exercisable at such time).
"Conversion Stock" means the total number of shares of the
----------------
Corporation's Common Stock issuable upon conversion of the Class A Preferred,
such issuance to be effected in strips, such that for each share of Class L
Common to be issued upon any conversion, nine (9) shares of Class A Common shall
be issued; provided that if there is a change such that such securities issuable
upon conversion of the Class A Preferred are issued by an entity other than the
Corporation or there is a change in the type or class of securities so issuable,
then the term "Conversion Stock" shall mean a number of shares of the securities
to which the aforementioned shares of Common Stock are convertible.
"Convertible Securities" means any stock or securities directly or
----------------------
indirectly convertible into or exchangeable for Common Stock.
"CVC" means Citicorp Venture Capital, Ltd. and its affiliates.
---
"Initial Public Offering" means a public offering and sale of the
-----------------------
Common Stock pursuant to an effective registration statement under the
Securities Act of 1933, if immediately thereafter the Corporation has publicly
held Common Stock listed on a national securities exchange or the NASD automated
quotation system.
"Junior Securities" means any capital stock or other equity securities
-----------------
of the Corporation, except for the Class A Preferred and the Corporation's Class
B Preferred Stock, par value $.01 per share (together, in each case, with all
accumulated dividends thereon).
"Liquidation Value" of any Share as of any particular date shall be
-----------------
equal to $1,000.00 (as proportionately adjusted for all stock splits, stock
dividends and other recapitalizations affecting such Share).
"Market Price" of any security means the average of the closing prices
------------
of such security's sales on all securities exchanges on which such security may
at the time be listed, or, if there has been no sales on any such exchange on
any day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such security is not so
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listed, the average of the representative bid and asked prices quoted in the
NASDAQ System as of 4:00 P.M., New York time, or, if on any day such security is
not quoted in the NASDAQ System, the average of the highest bid and lowest
asked prices on such day in the domestic over-the-counter market as reported by
the National Quotation Bureau, Incorporated, or any similar successor
organization, in each such case averaged over a period of 21 days consisting of
the day as of which "Market Price" is being determined and the 20 consecutive
business days prior to such day. If at any time such security is not listed on
any securities exchange or quoted in the NASDAQ System or the over-the-counter
market, the "Market Price" shall be the fair value thereof determined by the
Board and the holders of not less than a majority of the Class A Preferred, each
in the exercise of their good faith judgment; provided that if the Board and
such holders cannot agree on such value, such value shall be determined by an
independent valuation firm experienced in valuing businesses such as the
Corporation and jointly selected by the Board and such holders. The fees and
expenses of the valuation firm shall be borne by the Corporation and the holders
of the Class A Preferred.
"Options" means any rights, warrants or options to subscribe for or
-------
purchase Common Stock or Convertible Securities.
"Person" means an individual, a partnership, a corporation, a limited
------
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Qualifying IPO" means an Initial Public Offering in which the gross
--------------
proceeds to the Corporation exceed $50 million.
"Recapitalization Agreement" means that certain Agreement and Plan of
--------------------------
Recapitalization and Merger, dated as of March 13, 1999, as amended, by and
among Hyundai Electronics Industries Co., Ltd., Hyundai Electronics America, the
Corporation and ChipPAC Merger Corp.
"Redemption Date" as to any Share means the date specified in the
---------------
notice of any redemption at the Corporation's option or the applicable date
specified herein in the case of any other redemption; provided that no such date
shall be a Redemption Date unless the redemption payment required to be made
pursuant to Section 4 of this Part D is actually paid in full on such date, and
if not so paid in full, the Redemption Date shall be the date on which such
amount is fully paid.
"Subsidiary" means any corporation of which the shares of outstanding
----------
capital stock possessing the voting power (under ordinary circumstances) in
electing the board of directors are, at the time as of which any determination
is being made, owned by the Corporation either directly or indirectly through
Subsidiaries.
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Section 11. Amendment and Waiver.
--------------------
No amendment, modification or waiver shall be binding or effective
with respect to any provision of this Part D to Article III hereof without the
prior written consent of the holders of at least 662/3% of the Class A Preferred
outstanding at the time such action is taken.
Section 12. Notices.
-------
Except as otherwise expressly provided hereunder, all notices referred
to herein shall be in writing and shall be delivered by registered or certified
mail, return receipt requested and postage prepaid, or by reputable overnight
courier service, charges prepaid, and shall be deemed to have been given when so
mailed or sent (i) to the Corporation, at its principal executive offices and
(ii) to any stockholder, at such holder's address as it appears in the stock
records of the Corporation (unless otherwise indicated by any such holder).
IV
DIRECTORS' LIABILITY AND INDEMNIFICATION OF AGENTS
--------------------------------------------------
1. The liability of the directors of the Corporation for monetary
damage shall be eliminated to the fullest extent permitted by California law.
2. The Corporation is authorized to provide indemnification of
agents (as defined in Section 317 of the California Corporations Code) through
bylaw provisions, agreements with agents, vote of shareholders or disinterested
directors, or otherwise, in excess of that otherwise permitted by Section 317 of
the California Corporations Code, subject only to the limits set forth in
Section 204 of the California Corporations Code with respect to actions for
breach of duty to the Corporation or it shareholders.
3. Any amendment, repeal or modification of the foregoing provisions
of this Article IV by the shareholders of the Corporation shall not adversely
affect any right or protection of an agent or director of this Corporation
existing at the time of such amendment, repeal or modification.
* * * * *
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THREE: The foregoing Amended and Restated Articles of Incorporation have
been duly approved by the Board of Directors.
FOURTH: The foregoing Amended and Restated Articles of Incorporation have
been duly approved by the required vote of the shareholders of this Corporation
in accordance with Sections 603 and 903 of the California General Corporation
Law. The total number of outstanding shares of this Corporation entitled to
vote with respect to the foregoing Amended and Restated Articles was 90,000,000
shares of Class A Common Stock, par value $.01 per share, 10,00,000 shares of
Class L Common Stock, par value $.01 per share and 70,000 shares of Class B
Preferred Stock, par value $.01 per share. The number of shares voting in favor
of the amendment equaled or exceeded the vote required, such required vote being
a majority of the total number of outstanding shares of Class A Common Stock,
par value $.01 per share, Class L Common Stock, par value $.01 per share and
Class B Preferred Stock, par value $.01 per share.
The undersigned certifies under penalty of perjury that he has read the
foregoing Amended and Restated Articles of Incorporation and knows the contents
thereof, and that the statements therein are true.
/s/ Tony Lin
Executed at Santa Clara, ____________________________________
California, on August 5, 1999. Tony Lin, Vice President
/s/ Tony Lin
____________________________________
Tony Lin, Secretary
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