Exhibit 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
DOVER SADDLERY, INC.
The undersigned, being the sole incorporator of Dover Saddlery, Inc. (the
"Corporation"), a corporation organized and existing under the General
Corporation Laws of the State of Delaware, hereby certifies that the Corporation
has not received any payment for any of its capital stock, and hereby duly
adopts this Amended and Restated Certificate of Incorporation pursuant to the
provisions of Sections 241 and 245 of the General Corporation Law of the State
of Delaware, and that the Corporation hereby amends and restates its
Certificate, of Incorporation filed with the Delaware Secretary of State on July
31, 1998 as follows:
FIRST: The name of this Corporation is Dover Saddlery, Inc.
SECOND: The address of the Corporation's Registered Office in the State of
Delaware is c/o Corporation Trust Center, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801. The Registered Agent in
charge thereof is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The Corporation shall have authority to issue Six Million Five Hundred
Thousand (6,500,000) shares of capital stock, consisting of Five Million
Four Hundred Thousand (5,400,000) shares of common stock, par value
$0.0001 per share ("Common Stock"), of which Four Million Three Hundred
Thousand (4,300,000) shares shall be designated as Class A Common Stock
("Class A Common Stock") and One Million One Hundred Thousand
(1,100,000) shares shall be designated Class B Common Stock ("Class B
Common Stock"), and One Million One Hundred Thousand (1,100,000) shares
of preferred stock, par value $0.0001 per share (the "Preferred Stock").
FIFTH: The terms of the various classes of common stock are as follows:
(a) Each holder of shares of Class A Common Stock shall be
entitled to one vote for each share thereof held. The holders of Class
B Common Stock shall
have no voting rights with respect thereto except as otherwise
expressly provided in this Amended and Restated Certificate of
Incorporation or as required by law.
(b) Each share of Class B Common Stock is convertible, at any
time, into one share of Class A Common Stock, at the option of the
holder thereof upon written notice to such effect to the Corporation.
Promptly following receipt of a request for any such conversion, the
Corporation shall issue and deliver to the holder of any Class B
Common Stock (or to the nominee or nominees of such holder) a
certificate or certificates for the number of Class A Common Stock to
which such holder shall be entitled upon such conversion as soon as
practicable after the appropriate certificates for the shares of Class
B Common Stock being converted are surrendered for conversion, duly
endorsed, at the office of the Corporation or of any transfer agent.
(c) The Corporation shall not declare any dividend on or make any
distribution in respect of either class of Common Stock or subdivide
either class of Common Stock or combine either class of Common Stock
without effecting an identical dividend, distribution, subdivision or
combination with respect to the other class of Common Stock, provided
that any stock dividend shall be payable in shares of the same class
as the class of stock on which such dividend is paid.
SIXTH: The Preferred Stock shall have the following powers, preferences, rights
and qualifications, limitations and/or restrictions:
1. Authorized Number of Shares.
The maximum authorized number of shares of Preferred Stock shall be
1,100,000.
2. Dividends.
2.1. Computation of Cumulative Dividends, etc.
(a) The holders of the outstanding shares of Preferred Stock shall be
entitled to receive, out of any funds legally available therefor, when, as and
if declared by the board of directors of the Corporation, cumulative dividends
in cash at the annual rate of $.15763 per share on the Preferred Stock (which
amount shall be subject to equitable adjustment in the event of any stock
dividend, stock split, combination, reorganization, recapitalization,
reclassification or other similar event involving a change in the Preferred
Stock) (hereinafter "Equitable Adjustment").
(b) Such dividends shall accrue from day to day on each share of Preferred
Stock from the date of original issuance of such share, in each case whether or
not earned or declared.
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(c) If at any time the aggregate amount to be paid as a dividend to the
holders of the Preferred Stock shall be insufficient to pay the holders of the
Preferred Stock the full amount of accrued and unpaid dividends to which such
holders are entitled at such time, the holders of Preferred Stock shall share
ratably in the aggregate amount to be paid as a dividend at such time to the
holders of Preferred Stock in proportion to the respective amounts which would
otherwise be payable in respect of the Preferred Stock if all amounts payable on
or with respect to such shares were paid in full.
(d) Dividends on the Preferred Stock shall be cumulative so that if there
shall be any accrued and unpaid dividends thereon, the deficiency shall first be
paid in full in cash before any dividend or other distribution (in cash or any
other property and for the purpose of redemption, repurchase, Liquidation or
otherwise) shall be paid or declared and set apart for (i) the Common Stock of
the Corporation or (ii) any other class or series of capital stock of the
Corporation which is junior to or on a parity with the Preferred Stock
(collectively, "Junior Stock").
(e) The Corporation shall provide each holder of Preferred Stock at least
30 days advance written notice of any dividend or distribution to be declared or
paid on the Preferred Stock or on any other shares of capital stock of the
Corporation.
2.2. Restrictions on Distributions on Junior Stock. So long as any
Preferred Stock is outstanding, the Corporation shall not at any time directly
or indirectly declare, order, pay, make or set apart any sum or property for any
dividend or distribution (in cash or any other property and for the purpose of
redemption, repurchase, Liquidation or otherwise) on any Junior Stock, unless in
each case, (a) all accrued dividends on each share of the Preferred Stock shall
have been paid in full in cash and (b) all other payments due in respect of the
Preferred Stock, including without limitation payments required to be made under
section 4, shall have been paid in full in cash.
3. Liquidation, Dissolution or Winding Up.
3.1. Treatment at Liquidation, Dissolution or Winding Up.
(a) In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, or any distribution of all or substantially
all of its capital or any bankruptcy, insolvency or other similar proceeding of
the Corporation (hereinafter, and as modified in section 3.2, a "Liquidation"),
before any distribution or payment of assets of the Corporation is made to or
set apart for the holders of any Junior Stock, the holders of each share of
Preferred Stock shall be entitled to be paid first, out of assets of the
Corporation available therefor, an amount in cash equal to $1.97 per share of
Preferred Stock (which amount shall be subject to Equitable Adjustment) plus all
accrued and unpaid dividends thereon, whether or not earned or declared, up to
and including the date full payment shall be tendered to the holders thereof
with respect to the Liquidation (the "Liquidation Preference").
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(b) If upon any Liquidation the assets of the Corporation available for
distribution to its stockholders shall be insufficient to pay the holders of
the Preferred Stock the full amount of the Liquidation Preference, the holders
of Preferred Stock shall share ratably in any distribution of assets in
proportion to the respective amounts which would otherwise be payable in respect
of the Liquidation Preference if all amounts payable on or with respect to said
shares were paid in full.
(c) The Corporation shall provide each holder of Preferred Stock at least
30 days advance written notice of any Liquidation.
3.2. Treatment of Reorganizations, Consolidations, Mergers, and Sales of
Assets. If the Corporation enters into a reorganization of the capital stock of
the Corporation or a consolidation or merger of the Corporation and such
reorganization, consolidation or merger effects a Change of Control, or if there
is a sale of all or substantially all or a majority of the capital stock or
assets of the Corporation, in one transaction or a series of transactions, any
of such transactions shall be regarded as a Liquidation, within the meaning of
this section 3, unless the holder or holders of 51% or more of the outstanding
shares of Preferred Stock (the "Required Holders"), voting separately as a
class, determine that such reorganization, consolidation, merger or sale shall
not constitute a Liquidation for purposes of this section 3.
3.3. Distributions Other than Cash. If, in connection with any Liquidation,
there is property (other than cash) available for distribution, the value of
such property shall be the fair market value of such property as determined in
good faith by the board of directors of the Corporation and as agreed to by the
Required Holders. In the event of any dispute between the Required Holders and
the Corporation regarding the determination of fair market value of such
property, at the request of the Required Holders, the Corporation shall engage
an independent qualified appraiser, reasonably acceptable to the Required
Holders, to prepare an appraisal of the fair market value of such property. The
expenses of any appraisal shall be borne by the Corporation.
4. Redemptions, etc.
4.1 Redemption on September 10, 2005.
(a) On September 10, 2005, the Corporation shall redeem all then
outstanding shares of the Preferred Stock, upon the payment in cash of $1.97 per
share (which amount shall be subject to Equitable Adjustment), together with an
amount in cash equal to all accrued but unpaid dividends thereon, whether or not
earned or declared, up to and including the date of redemption, provided that
the Corporation shall not redeem any share of the Preferred Stock pursuant to
this section 4.1(a) if, prior to the close of business on the last full
business day next preceding September 10, 2005, the holder thereof shall elect
to convert the same in accordance with section 5 hereof.
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(b) Any payment not made on the date required under this section 4.1 shall
bear interest, payable in cash on demand, from the date such payment was due at
a per annum rate of 10%, until such payment is paid in full in cash.
(c) If on any redemption of the Preferred Stock required hereunder the
assets of the Corporation available for such redemption shall be insufficient to
pay the holders of the Preferred Stock the full amount to which they are
entitled upon such redemption, the holders of Preferred Stock shall share
ratably in any distribution of assets for such redemption in proportion to the
respective amounts which would otherwise be payable upon such redemption if all
amounts payable on or with respect to such shares were paid in full.
4.2 Notice of Redemptions. The Corporation shall give written notice of
redemption pursuant to section 4.1 to each holder of the Preferred Stock not
less than 30 nor more than 60 days prior to September 10, 2005. Such notice
shall specify the date of redemption, the aggregate number of shares of the
Preferred Stock to be redeemed on such date, and the number of shares of
Preferred Stock held by such holder to be redeemed on such date, and shall
specifically notify each holder that its right to convert its shares of
Preferred Stock will terminate at the close of business on the last full
business day next preceding such date. Such notice shall be given by delivering
or mailing the same to each such holder at the address of such holder as it
appears on the Corporation's stock register.
4.3 Effect of Redemption. Upon the date fixed for redemption of the
Preferred Stock pursuant to section 4.1, and upon payment by the Corporation of
the amounts payable in respect thereof as provided herein, all shares of the
Preferred Stock redeemed shall be deemed to be no longer outstanding for any
purpose, whether or not the certificates for such shares shall have been
surrendered for cancellation, and all rights with respect to such shares shall
thereupon cease, except only the right of the holders of such shares to receive
the amounts payable upon the redemption thereof. All shares of the Preferred
Stock redeemed by the Corporation shall be retired and canceled and shall not be
reissued.
5. Conversion Rights.
5.1 Conversion Privilege at Election of Holders of Preferred Stock. The
shares of the Preferred Stock may, at the election of the holder or holders
thereof, at any time, or from time to time, be converted in whole or in part, at
the conversion price per share of Common Stock of $1.97 as adjusted and
readjusted from time to time in accordance with section 5.5 hereof (such
conversion price, as so adjusted and readjusted and in effect at any time, being
herein called the "Conversion Price"), into the number of fully paid and
non-assessable shares of Common Stock determined by dividing (a) the product of
(i) $1.97 (which amount shall be subject to Equitable Adjustment) multiplied by
(ii) the number of shares of the Preferred Stock to be so converted, by (b) the
Conversion Price in effect at the time of such conversion (the number of shares
of Common Stock into which each share of Preferred Stock may be converted is
hereinafter referred to as the "Conversion Rate"). Each holder of Preferred
Stock may elect to convert its shares of Preferred
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Stock into Class A Common Stock, provided that absent such election, the
Preferred Stock shall convert into Class B Common Stock.
5.2 Automatic Conversion. Each share of the Preferred Stock shall
automatically be converted into shares of Common Stock at the then effective
Conversion Rate for such share immediately upon the consummation of an
underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, covering the offer and sale of
Common Stock, provided that the aggregate net proceeds to the Corporation from
such offering are not less than $15,000,000 (a "Qualifying Public Offering"). In
the event of such an automatic conversion, each holder of the Preferred Stock
may elect to convert its shares of Preferred Stock, at any time prior to
effectiveness of such conversion, into Class A Common Stock; provided that
absent such election, the Preferred Stock shall convert into Class B Common
Stock. The Corporation shall provide each holder of Preferred Stock at least 30
days advance written notice of the consummation of a Qualifying Public Offering.
5.3 Manner of Conversion, etc. The certificate or certificates for any
shares of the Preferred Stock to be converted pursuant to section 5.1 or
converted pursuant to section 5.2 shall be surrendered by the holders thereof at
the principal executive office of the Corporation, duly endorsed, or
accompanied by proper instruments of transfer, to the Corporation or in blank,
and, in the case of conversion pursuant to section 5.1, accompanied by written
notice to the Corporation of the holder's election to make such conversion and,
in all cases accompanied by written notice to the Corporation of the name or
names in which the certificate or certificates for shares of Common Stock are to
be issued and the class or classes of the shares of Common Stock to be so
issued. The right to convert pursuant to section 5.1 any shares of the Preferred
Stock called for redemption pursuant to section 4 shall terminate at the close
of business on the last full business day next preceding the date fixed for such
redemption. Upon conversion of any shares of the Preferred Stock, the
Corporation shall pay to the holder thereof in cash a sum equal to all accrued
but unpaid dividends thereon to the date of conversion or, at the election of
such holder made at any time prior to the effectiveness of such conversion, the
Corporation shall apply such sum to the purchase of shares of Common Stock (of
either class) which the Corporation shall issue to such holder at the time of
such conversion at the effective purchase price per share paid upon such
conversion of the Preferred Stock by such holder. Each conversion pursuant to
section 5.1 shall be deemed to have been effected as of the close of business on
the date on which such certificate or certificates shall have been so
surrendered to such office, and at such time the rights of the holder of
Preferred Stock as such shall, to the extent of the number of shares thereof
converted, cease, and the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
thereof. The conversion of the Preferred Stock pursuant to section 5.2 shall be
deemed to have been effected as of the close of business on the date upon which
the Qualifying Public Offering is consummated, without any further action by the
holders of such shares and whether or not the certificates representing such
shares are surrendered to the Corporation or its transfer agent, and at such
time the rights of the holders of the Preferred Stock as such shall cease, and
the Person or Persons in whose name or names any certificate or
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certificates of the Preferred Stock are registered shall be deemed to have
become the holder or holders of record of shares of the Common Stock issuable
upon such conversion.
5.4 Delivery of Stock Certificates; Fractional Shares. As promptly as
practicable after the conversion of any shares of Preferred Stock, and in any
event within 20 days thereafter, the Corporation at its expense (including the
payment by it of any applicable issue taxes) will issue and deliver to the
holder of such shares of Preferred Stock, or as such holder (upon payment by
such holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of full shares of Common Stock of the appropriate
class or classes issuable upon such conversion, plus, in lieu of any fractional
share to which such holder would otherwise be entitled, cash equal to such
fraction multiplied by the Conversion Price of one full share of Common Stock as
of the date of conversion; provided that the Corporation shall not be obligated
to issue certificates evidencing the shares of Common Stock issuable upon an
automatic conversion of the Preferred Stock pursuant to section 5.2 unless
either the certificates evidencing such shares of Preferred Stock are delivered
to the Corporation or its transfer agent, or the holder notifies the
Corporation that such certificates have been lost, stolen or destroyed and
executes an agreement reasonably satisfactory to the Corporation to indemnify
the Corporation from any loss incurred by it in connection with such
certificates.
5.5. Adjustment of Conversion Price. In addition to any adjustment required
under section 5.5(o) below, and except as otherwise provided in section 5.5(n)
below, the Conversion Price shall be subject to adjustment from time to time as
set forth in this section 5.5.
(a) Stock Dividends, Subdivisions and Combinations. If and whenever the
Corporation subsequent to the Original Issue Date:
(i) declares a dividend upon, or makes any distribution in respect of,
any of its capital stock, payable in shares of Common Stock, Convertible
Securities or Stock Purchase Rights, or
(ii) subdivides its outstanding shares of Common Stock into a larger
number of shares of Common Stock, or
(iii) combines its outstanding shares of Common Stock into a smaller
number of shares of Common Stock,
then the Conversion Price shall be adjusted to that price determined by
multiplying the Conversion Price in effect immediately prior to such event by a
fraction (A) the numerator of which shall be the total number of outstanding
shares of Common Stock immediately prior to such event, and (B) the denominator
of which shall be the total number of outstanding shares of Common Stock
immediately after such event, treating as outstanding all shares of Common Stock
issuable upon conversions or exchanges of such Convertible Securities and
exercises of such Stock Purchase Rights.
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(b) Issuance of Additional Shares of Common Stock. If and whenever the
Corporation subsequent to the Original Issue Date shall issue or sell any shares
of Common Stock (except as otherwise provided in the last paragraph of this
section 5.5(b)), for a consideration per share less than the greater of (x) the
Fair Value per share of Common Stock and (y) the Conversion Price then in effect
(determined, in each case, as of the date specified in the next succeeding
paragraph), the Conversion Price upon each such issuance or sale shall be
adjusted as of the date specified in the next succeeding paragraph to the lower
of the prices calculated pursuant to the following clauses (i) and (ii) of this
section 5.5(b) and shall be determined by:
(i) multiplying the Conversion Price in effect as of the date
specified in the next succeeding paragraph by a fraction the numerator of
which is (A) the sum of (1) the number of shares of Common Stock
outstanding immediately prior to such issue or sale multiplied by the Fair
Value per share of Common Stock immediately prior to such issue or sale
plus (2) the aggregate consideration, if any, received by the Corporation
upon such issue or sale, divided by (B) the total number of shares of
Common Stock outstanding immediately after such issue or sale, and the
denominator of which is the Fair Value per share of Common Stock
immediately prior to such issue or sale; and
(ii) dividing (A) the sum of (1) the number of shares of Common Stock
outstanding immediately prior to such issue or sale multiplied by the
Conversion Price in effect immediately prior to such issue or sale plus (2)
the aggregate consideration, if any, received by the Corporation upon such
issue or sale, by (B) the total number of shares of Common Stock
outstanding immediately after such issue or sale.
For purposes of this section 5.5(b), the date as of which the Conversion
Price shall be adjusted and the date as of which the Fair Value and the
Conversion Price then if effect shall be determined shall be the earlier of (i)
the date on which the Corporation shall enter into a firm contract for the
issuance of such shares of Common Stock and (ii) immediately prior to the date
of actual issuance of such shares of Common Stock.
No adjustment of the Conversion Price shall be made under this section
5.5(b) upon the issuance of any shares of Common Stock which are (i) distributed
to holders of shares of Common Stock pursuant to a stock dividend or subdivision
for which an adjustment shall previously have been made under section 5.5(a) or
(ii) issued pursuant to the exercise of any Stock Purchase Rights or pursuant to
the conversion or exchange of any Convertible Securities to the extent that an
adjustment shall previously have been made upon the issuance of such Stock
Purchase Rights or Convertible Securities pursuant to sections 5.5(a), (c) or
(d).
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(c) Issuance of Stock Purchase Rights. If and whenever the Corporation
subsequent to the Original Issue Date shall issue or sell any Stock
Purchase Rights (except as otherwise provided in the last paragraph of this
section 5.5(c)) and the consideration per share for which shares of Common Stock
may at any time thereafter be issuable upon exercise thereof (or, in the case of
Stock Purchase Rights exercisable for the purchase of Convertible Securities,
upon the subsequent conversion or exchange of such Convertible Securities) shall
be less than the greater of (x) the Fair Value per share of Common Stock and (y)
the Conversion Price then in effect (determined, in each case, as of the date
specified in the next succeeding paragraph), the Conversion Price upon each such
issuance or sale shall be adjusted as provided in section 5.5(b) as of the date
specified in the next succeeding paragraph on the basis that the maximum number
of shares of Common Stock ever issuable upon exercise of such Stock Purchase
Rights (or upon conversion or exchange of such Convertible Securities following
such exercise) shall be deemed to have been issued as of the date of the
determination of the Fair Value and Conversion Price then in effect specified in
the next succeeding paragraph.
For the purposes of this section 5.5(c), the date as of which the
Conversion Price shall be adjusted and the date as of which the Fair Value and
the Conversion Price then in effect shall be determined shall be the earlier of
(i) the date on which the Corporation shall enter into a firm contract for the
issuance of such Stock Purchase Rights and (ii) immediately prior to the date of
actual issuance of such Stock Purchase Rights.
No adjustment of the Conversion Price shall be made under this section
5.5(c) upon the issuance of any Stock Purchase Rights to the extent that an
adjustment shall previously have been made upon the issuance of such Stock
Purchase Rights pursuant to section 5.5(a).
(d) Issuance of Convertible Securities. If and whenever the Corporation
subsequent to the Original Issue Date shall issue or sell any Convertible
Securities (except as otherwise provided in the last paragraph of this section
5.5(d)) and the consideration per share for which shares of Common Stock may at
any time thereafter be issuable pursuant to the terms of such Convertible
Securities shall be less than the greater of (x) the Fair Value per share of
Common Stock and (y) the Conversion Price then in effect (determined, in each
case, as of the date specified in the next succeeding paragraph), the Conversion
Price upon each such issuance or sale shall be adjusted as provided in section
5.5(b) as of the date specified in the next succeeding paragraph on the basis
that the maximum number of shares of Common Stock ever necessary to effect the
conversion or exchange of all such Convertible Securities shall be deemed to
have been issued as of the date of the determination of the Fair Value and
Conversion Price then in effect specified in the next succeeding paragraph.
For the purposes of this section 5.5(d), the date as of which the
Conversion Price shall be adjusted and the date as of which the Fair Value and
the Conversion Price then in
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effect shall be determined shall be the earlier of (i) the date on which the
Corporation shall enter into a firm contract for the issuance of such
Convertible Securities and (ii) immediately prior to the date of actual issuance
of such Convertible Securities.
No adjustment of the Conversion Price shall be made under this section
5.5(d) upon the issuance of any Convertible Securities which are (i) distributed
to holders of shares of Common Stock pursuant to a stock dividend to the extent
that an adjustment shall previously have been made pursuant to section 5.5(a) or
(ii) issued pursuant to the exercise of any Stock Purchase Rights to the extent
that an adjustment shall previously have been made upon the issuance of such
Stock Purchase Rights pursuant to section 5.5(a) or (c).
(e) Minimum Adjustment. If any adjustment of the Conversion Price pursuant
to this section 5.5 shall result in an adjustment of less than $.0001, no such
adjustment shall be made, but any such lesser adjustment shall be carried
forward and shall be made at the time and together with the next subsequent
adjustment which, together with any adjustments so carried forward, shall amount
to $.0001; provided that upon any adjustment of the Conversion Price resulting
from (i) the declaration of a dividend upon, or the making of any distribution
in respect of, any stock of the Corporation payable in shares of Common Stock,
Stock Purchase Rights or Convertible Securities or (ii) the reclassification by
subdivision, combination or otherwise, of the shares of Common Stock into a
greater or smaller number of shares, the foregoing figure of $.0001 per share
(or such figure as last adjusted) shall be proportionately adjusted, and
provided, further, that upon the conversion of any shares of Preferred Stock,
the Corporation shall make all necessary adjustments (to the nearest .0001 of a
cent) not theretofore made to the Conversion Price up to and including the date
upon which such shares are being so converted.
(f) Readjustment of Conversion Price. Upon each change in (i) the
consideration, if any, payable for any Stock Purchase Rights or Convertible
Securities referred to in section 5.5(a), (c) or (d), (ii) the consideration, if
any, payable upon exercise of such Stock Purchase Rights or upon the conversion
or exchange of such Convertible Securities or (iii) the number of shares of
Common Stock issuable upon the exercise of such Stock Purchase Rights or the
rate at which such Convertible Securities are convertible into or exchangeable
for shares of Common Stock, the Conversion Price in effect at the time of such
event shall forthwith be readjusted to the Conversion Price which would have
been in effect at such time had such Stock Purchase Rights or Convertible
Securities provided for such changed consideration, number of shares of Common
Stock so issuable or conversion rate, as the case may be, at the time initially
granted, issued or sold. On the expiration of any Stock Purchase Rights not
exercised or of any right to convert or exchange under any Convertible
Securities not exercised, the Conversion Price then in effect shall forthwith be
increased to the Conversion Price which would have been in effect at the time of
such expiration had such Stock Purchase Rights or Convertible Securities never
been issued. No readjustment of the Conversion Price pursuant to this section
5.5(f) shall (i) increase the Conversion Price by an amount in excess of the
adjustment originally
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made to the Conversion Price in respect of the issue, sale or grant of the
applicable Stock Purchase Rights or Convertible Securities or (ii) require any
adjustment to the number of shares of Common Stock received by any holder of
Preferred Stock upon any conversion of the shares of Preferred Stock prior to
the date upon which such readjustment to the Conversion Price shall occur.
(g) Reorganization, Reclassification or Recapitalization of the
Corporation. If and whenever subsequent to the Original Issue Date the
Corporation shall effect (i) any reorganization or reclassification or
recapitalization of the capital stock of the Corporation (other than in the
cases referred to in section 5.5(a)), (ii) any consolidation or merger of the
Corporation with or into another Person, (iii) the sale, transfer or other
disposition of the property, assets or business of the Corporation as an
entirely or substantially as an entirety or (iv) any other transaction (or any
other event shall occur) as a result of which holders of shares of Common Stock
become entitled to receive any shares of stock or other securities and/or
property (including, without limitation, cash and/or shares of any Subsidiary of
the Corporation (and including, without limitation, any dividend payable out of
earnings or any surplus legally available for distribution under the laws of the
state of the Corporation's jurisdiction)) with respect to or in exchange for the
shares of Common Stock (the transactions referred to in the foregoing clauses
(i), (ii), (iii) and (iv) being each hereinafter referred to as a "Special
Distribution"), then at the same time each holder of each share of Preferred
Stock shall receive (in addition to the shares of Common Stock deliverable upon
conversion thereof) the same number of shares of stock or other securities
and/or the same property (including, without limitation, cash and/or shares of
any Subsidiary of the Corporation) which such holder would have received if such
share of Preferred Stock had been converted immediately prior to such Special
Distribution (or the applicable record date therefor).
Prior to and as a condition of the consummation of any Special
Distribution, the Corporation shall make equitable, written adjustments
reasonably satisfactory to the Required Holders in the application of the
provisions set forth herein and in the other documents executed in connection
with the issuance of the Preferred Stock so that such provisions shall
thereafter be applicable, as nearly as possible, in relation to any shares of
stock or other securities or other property delivered to the holders of the
Preferred Stock pursuant to this section 5.5(g). Any such adjustment shall be
made by and set forth in a supplemental agreement of the Corporation and/or the
successor entity, as applicable, in form and substance acceptable to the
Required Holders, which agreement shall bind the Corporation and/or the
successor entity, as applicable, and all holders of Preferred Stock then
outstanding and, upon the request of the Required Holders, shall be accompanied
by a favorable opinion of the regular outside counsel to the Corporation or the
successor entity, as applicable (or such other firm as is reasonably acceptable
to the Required Holders), as to the enforceability of such agreement and as to
such other matters as the Required Holders may reasonably request.
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(h) Other Dilutive Events. If any other transaction or event (other than
those explicitly referred to in this section 5), including, without limitation,
any issuance, repurchase, redemption, or other distribution in respect of any
shares of stock or securities of the Corporation (other than the Preferred
Stock) or of any other Person, including any Person referred to in section
5.5(g), shall occur as to which the other provisions of this section 5 are not
strictly applicable but the failure to make any adjustment to the Conversion
Price or to any of the other terms of the Preferred Stock would not fairly
protect the conversion rights and other rights of the Preferred Stock set forth
herein in accordance with the essential intent and principles hereof, then, and
as a condition to the consummation of any such transaction or event, and in each
such case, the Corporation shall appoint a firm of independent public
accountants of recognized national standing (which may be the regular auditors
of the Corporation), which shall give its opinion as to the adjustment, if any,
on a basis consistent with the essential intent and principles established in
this section 5, necessary to preserve, without dilution, the rights of the
Preferred Stock. The certificate of any such firm of accountants shall be
conclusive evidence of the correctness of any computation made under this
section 5. The Corporation shall pay the fees and expenses of such firm of
accountants in connection with any such opinion. Upon receipt of such opinion,
the Corporation will promptly deliver a copy thereof to the holders of the
Preferred Stock and shall make the adjustments described therein.
(i) Determination of Consideration. For purposes of this section 5, the
consideration received or receivable by the Corporation for the issuance, sale
or grant of shares of Common Stock, Stock Purchase Rights or Convertible
Securities, irrespective of the accounting treatment of such consideration,
shall be valued and determined as follows:
(i) Cash Payment. In the case of cash, the gross amount paid by the
purchasers without deduction of any accrued interest or dividends, any
reasonable expenses paid or incurred and any reasonable underwriting
commissions or concessions paid or allowed by the Corporation in connection
with such issue or sale.
(ii) Non-Cash Payment. In the case of consideration other than cash,
the Fair Value thereof (in any case as of the date immediately preceding
the issuance, sale or grant in question).
(iii) Certain Allocations. If shares of Common Stock, Stock Purchase
Rights and/or Convertible Securities are issued or sold together with other
securities or other assets of the Corporation for a consideration which
covers more than one of the foregoing categories of securities and assets,
the consideration received or receivable (computed as provided in clauses
(i) and (ii) of this section 5.5(i)) shall be allocable to such shares of
Common Stock, Stock Purchase Rights
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and/or Convertible Securities as reasonably determined in good faith by the
board of directors of the Corporation (provided such allocation is set
forth in a written resolution and a certified copy thereof is furnished to
the holders of the Preferred Stock promptly (but in any event within 10
days) following its adoption).
(iv) Dividends in Securities. If the Corporation shall declare a
dividend or make any other distribution upon any stock of the Corporation
payable in shares of Common Stock, Convertible Securities or Stock Purchase
Rights, such shares of Common Stock, Convertible Securities or Stock
Purchase Rights, as the case may be, issuable in payment of such dividend
or distribution shall be deemed to have been issued or sold without
consideration.
(v) Stock Purchase Rights and Convertible Securities. The
consideration for which each share of Common Stock shall be deemed to be
issued upon the issuance or sale of any Stock Purchase Rights or
Convertible Securities shall be determined by dividing (A) the total
consideration, if any, received by the Corporation as consideration for the
Stock Purchase Rights or the Convertible Securities, as the case may be,
plus the minimum aggregate amount of additional consideration, if any, ever
payable to the Corporation upon the exercise of such Stock Purchase Rights
and/or upon the conversion or exchange of such Convertible Securities, as
the case may be, but without deduction of any accrued interest or
dividends, any reasonable expenses paid or incurred and any reasonable
underwriting commissions or concessions paid or allowed by the Corporation
in connection with such issue or sale; by (B) the maximum number of shares
of Common Stock ever issuable upon the exercise of such Stock Purchase
Rights or upon the conversion or exchange of such Convertible Securities.
(vi) Merger, Consolidation or Sale of Assets. If any shares of Common
Stock, Convertible Securities or Stock Purchase Rights are issued in
connection with any merger or consolidation of 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 assets and business of
the non-surviving corporation as shall be attributable to such shares of
Common Stock, Convertible Securities or Stock Purchase Rights, as the case
may be. In the event of (A) any merger or consolidation of which the
Corporation is not the surviving corporation or (B) the sale, transfer or
other disposition of the property, assets or business of the Corporation as
an entirety or substantially as an entirety for stock or other securities
of any other Person, the Corporation shall be deemed to have issued the
number of shares of Common Stock for stock or securities of the surviving
corporation or such other Person computed on the basis of the actual
exchange ratio on which the transaction was predicated and for a
consideration equal to the Fair Value on the date of such transaction of
such stock or securities of the surviving corporation or such other Person,
and if any such calculation results in adjustment
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of the Conversion Price, the determination of the number of shares of
Common Stock issuable upon conversion of the Preferred Stock immediately
prior to such merger, consolidation or sale, for the purposes of section
5.5(g), shall be made after giving effect to such adjustment of the
Conversion Price.
(j) Record Date. If the Corporation shall take a record of the holders of
the shares of Common Stock for the purpose of entitling them (i) to receive a
dividend or other distribution payable in shares of Common Stock, Convertible
Securities or Stock Purchase Rights or (ii) to subscribe for or purchase shares
of Common Stock, Convertible Securities or Stock Purchase Rights, then all
references in this section 5 to 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 the making of such other distribution or the date of the granting of
such right of subscription or purchase, as the case may be, shall be deemed to
be references to such record date.
(k) Shares Outstanding. The number of shares of Common Stock deemed to be
outstanding at any given time shall not include shares of Common Stock held by
the Corporation or any Subsidiary of the Corporation.
(l) Maximum Conversion Price. At no time shall the Conversion Price exceed
$1.97 except as a result of an adjustment thereto pursuant to section
5.5(a)(iii) or 5.5(g).
(m) Application. All subdivisions of this section 5.5 are intended to
operate independently of one another. If a transaction or an event occurs that
requires the application of more than one subdivision, all applicable
subdivisions shall be given independent effect.
(n) No Adjustments under Certain Circumstances. Anything herein to the
contrary notwithstanding, no adjustment to the Conversion Price shall be made in
the case of:
(i) any issuance of shares of Common Stock (or Other Securities) upon
the conversion, in whole or in part, of the shares of Preferred Stock or
upon the issuance of any shares of Preferred Stock;
(ii) the granting by the Corporation to any officers, directors or
employees of the Corporation or any of its Subsidiaries of options to
purchase shares of Common Stock pursuant to a stock option plan or
arrangement adopted by the board of directors of the Corporation and the
issuance of shares of Common Stock upon the exercise of such options,
provided the aggregate number of shares of Common Stock so issued and
issuable pursuant to such options shall not exceed at any time 11.2% of the
Common Stock issued and outstanding on a fully-diluted basis on the
Original Issue Date; or
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(iii) any issuance of shares of Class A Common Stock upon the
conversion of an equal number of shares of Class B Common Stock.
(o) Adjustments for Changes in Certain Data. The Corporation hereby agrees
that the initial aggregate number of shares of Common Stock issuable upon
conversion in full of the Preferred Stock issued on the Original Issue Date to
the initial holders thereof was 1,015,000 which was intended to constitute at
least 29% of the shares of Common Stock outstanding immediately following the
closing of the sale of Preferred Stock on the Original Issue Date (calculated on
a fully-diluted basis assuming the conversion, exercise and exchange of all
outstanding securities convertible into or exercisable or exchangeable for
shares of Common Stock, including, without limitation, the Preferred Stock, and
the issuance of 390,000 shares of Common Stock pursuant to employee and director
stock option plans). If for any reason the shares of Common Stock issuable upon
the conversion of the Preferred Stock issued on the Original Issue Date did not
constitute at least 29% of the shares of Common Stock (as so calculated), then
the Conversion Price of the Preferred Stock shall be automatically adjusted to
the extent necessary so that the shares of Common Stock so issuable do
constitute at least that percentage amount based on the capital stock
outstanding on the Original Issue Date, and the Corporation shall send to the
holders of the Preferred Stock an Officer's Certificate setting forth in
reasonable detail the computation of such adjustments, and all such adjustments
shall be satisfactory to the Required Holders.
5.6. Rights Offering. If the Corporation shall effect an offering of
securities pro rata among the holders of its Common Stock, each holder of
Preferred Stock shall be entitled, at its option, to elect to participate in
each and every such offering as if such holder's shares of Preferred Stock had
been converted and such holder were, at the time of any such rights offering,
then a holder of that number of shares of Common Stock to which such holder is
then entitled on the conversion thereof.
5.7. Certificates and Notices.
(a) Adjustments to Conversion Price. As promptly as practicable (but in any
event not later than five days) after the occurrence of any event requiring any
adjustment under section 5 to the Conversion Price (or to the number or kind of
securities or other property deliverable upon the conversion of any shares of
Preferred Stock), the Corporation shall, at its expense, deliver to each holder
of shares of Preferred Stock either (i) an Officer's Certificate or (ii) a
certificate signed by a firm of independent public accountants of recognized
national standing (which may be the regular auditors of the Corporation),
setting forth in reasonable detail the events requiring the adjustment and the
method by which such adjustment was calculated and specifying the adjusted
Conversion Price after giving effect to such adjustment. The certificate of any
such firm of accountants shall be conclusive evidence of the correctness of any
computation made under section 5.
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(b) Extraordinary Corporate Events. If and whenever the Corporation
subsequent to the Original Issue Date shall propose to (i) pay any dividend to
the holders of shares of Common Stock or to make any other distribution to the
holders of shares of Common Stock (including, without limitation, any cash
dividend), (ii) offer to the holders of shares of Common Stock rights to
subscribe for or purchase any additional shares of any class of stock or any
other rights or options, (iii) effect any reclassification of the shares of
Common Stock (other than a reclassification involving merely the subdivision or
combination of outstanding shares of Common Stock), (iv) engage in any
reorganization or recapitalization or any consolidation or merger (other than a
merger in which no distribution of securities or other property is to be made to
holders of shares of Common Stock), (v) consummate any sale, transfer or other
disposition of its property, assets and business as an entirety or substantially
as an entirety, (vi) effect any other transaction which might require an
adjustment to the Conversion Price (or to the number or kind of securities or
other property deliverable upon the conversion of the Preferred Stock),
including, without limitation, any transaction of the kind described in section
5.5(g) or (vii) commence or effect the Liquidation of the Corporation, then, in
each such case, the Corporation shall deliver to each holder of shares of
Preferred Stock an Officer's Certificate giving notice of such proposed action,
specifying (A) the date on which the stock transfer books of the Corporation
shall close, or a record shall be taken, for determining the holders of shares
of Common Stock entitled to receive such dividend or other distribution or such
rights or options, or the date on which such reclassification, reorganization,
recapitalization, consolidation, merger, sale, transfer, other disposition,
transaction, liquidation, dissolution or winding up shall take place or
commence, as the case may be, and (B) the date as of which it is expected that
holders of shares of Common Stock of record shall be entitled to receive
securities or other property deliverable upon such action, if any such date is
to be fixed. Such Officer's Certificate shall be delivered in the case of any
action covered by clause (i) or (ii) above, at least 30 days prior to the record
date for determining holders of shares of Common Stock for purposes of receiving
such payment or offer, and, in any other case, at least 30 days prior to the
date upon which such action takes place and 20 days prior to any record date to
determine holders of shares of Common Stock entitled to receive such securities
or other property.
(c) Effect of Failure. Failure to give any certificate or notice, or any
defect in any certificate or notice required under this section 5.7 shall not
affect the legality or validity of the adjustment of the Conversion Price.
(d) Partial Conversion. In the event some but not all of the shares of
Preferred Stock represented by certificates surrendered by a holder are
converted, the Corporation shall execute and deliver to or on the order of the
holder, at the expense of the Corporation, not later than 30 days following the
applicable Conversion Date, a new certificate representing the number of shares
of Preferred Stock which were not converted and dated so as not to result in any
loss of dividends.
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5.8 Shares to be Fully Paid: Reservation of Shares. The Corporation
covenants and agrees that all shares which may be issued upon conversion of the
Preferred Stock will, upon issuance, be fully paid and non-assessable and free
from all taxes, liens and charges with respect to the issue thereof; and
without limiting the generality of the foregoing, the Corporation covenants and
agrees that it will from time to time take all such action as may be requisite
to assure that the par value per share of the Common Stock (of each class) is at
all times equal to or less than the then effective purchase price per share of
the Common Stock issuable upon conversion of the Preferred Stock. The
Corporation further covenants and agrees that the Corporation will at all times
have authorized, and reserved for the purpose of issue or transfer upon the
conversion of the Preferred Stock, a sufficient number of shares of its Common
Stock (of each class) to provide for the conversion of the Preferred Stock.
5.9 Listing on Securities Exchanges, etc. At all times following the
conversion of any shares of Preferred Stock, the Corporation will maintain the
listing of all shares of Common Stock (or Other Securities) issued upon
conversion of the Preferred Stock on each securities exchange or market or
trading system on which the Common Stock (or Other Securities) are then or at
any time thereafter listed or traded, if any. This section 5.9 does not create
or impose any obligation upon the Corporation to register the Common Stock
received upon conversion of the Preferred Stock.
5.10 Issue Tax. The issuance of certificates for shares of Common Stock
upon the conversion of Preferred Stock shall be made without charge to the
holders of such Preferred Stock for any issuance tax in respect thereof,
provided that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of the Preferred Stock converted, or
in the nature of an income or gains tax on such shares.
5.11 Closing of Books. The Corporation will at no time close its stock
transfer books against the transfer of any shares of Common Stock issued or
issuable upon the conversion of the Preferred Stock in any manner which
interferes with the timely exercise of the conversion rights of the holders of
the Preferred Stock.
5.12 No Reissuance of Preferred Stock. No shares of Preferred Stock
acquired by the Corporation by reason of conversion shall be reissued, and all
such shares shall be canceled, retired and eliminated from the shares which the
Corporation shall be authorized to issue.
6. Voting Rights: Restrictions on Corporate Action.
6.1 Voting Rights. Except as otherwise provided in this Certificate of
Incorporation or as required by law, the holders of Preferred Stock shall have
no right as such to be represented at or to receive notice of meetings of the
stockholders and shall have
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no right to vote for the election of directors or for any other purpose or on
any other subject.
6.2 Restrictions on Corporate Action. Without the consent of the Required
Holders, given in writing without a meeting or by vote at a meeting called for
the purpose, at which the holders of the Preferred Stock shall vote separately
as a single class, the Corporation shall not:
(a) authorize or issue (including, without limitation, by reclassification
of any Common Stock or any other stock) any shares of capital stock having any
right or preference as to dividends or assets (upon redemption, repurchase,
Liquidation or otherwise) senior or equal in any respect to any right or
preference of the Preferred Stock, or any shares of stock, obligations,
warrants, rights or other securities convertible into, exchangeable for or
evidencing rights to purchase any capital stock senior or equal in any respect
to any right or preference of the Preferred Stock;
(b) authorize or effect any amendment or change to this Certificate of
Incorporation or to its by-laws which would (i) increase or decrease (other than
for decreases resulting from the conversion of the Preferred Stock) the number
of authorized shares of Preferred Stock or (ii) adversely affect or be
inconsistent with or change any of the rights or preferences of the Preferred
Stock or otherwise be prejudicial to the interests of the holders of the
Preferred Stock;
(c) issue any previously unissued shares of Preferred Stock to any Person
other than the Persons who purchased shares of Preferred Stock on the Original
Issue Date;
(d) take any action looking towards a Liquidation (including any
reorganization, consolidation, merger or sale referred to in Section 3.2, but
not including the filing of a bankruptcy petition);
(e) enter into any agreement or understanding which in any way restricts
the Corporation's right or ability to declare and pay dividends on, or to make
any other distribution with respect to, or to redeem, the Preferred Stock;
(f) acquire, form or organize any Subsidiary (other than Dover Saddlery,
Inc., a Massachusetts corporation, or in connection with a "Permitted
Acquisition" as defined in the purchase agreements pursuant to which the
Preferred Stock was originally issued, or any wholly-owned subsidiary or any
partially-owned subsidiary if the outside equity interests are not held by the
shareholders of the Corporation or their affiliates); or
(g) agree to do any of the foregoing.
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7. No Dilution or Impairment. The Corporation shall not by any action
including, without limitation, amending this Certificate of Incorporation, any
reorganization, recapitalization, transfer of capital stock or assets,
consolidation, merger, liquidation, 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 of the Preferred Stock set forth herein, but will at all
times in good faith assist in the carrying out of all such terms 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 Preferred Stock against dilution or other
impairment. Without limiting the generality of the foregoing, the Corporation
(a) will take all such action as may be necessary or appropriate in order that
the Corporation may validly and legally issue fully-paid and non-assessable
shares of Common Stock (or Other Securities) on the conversion of all Preferred
Stock from time to time outstanding, and (b) will obtain and maintain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction as may be necessary to enable the Corporation to perform its
obligations hereunder.
8. Definitions: Accounting Terms and Principles.
8.1. Definitions of Capitalized Terms. As used herein, the following terms
have the following respective meanings:
"Affiliate" of any Person shall mean any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
first-mentioned Person, or any individual, in the case of a Person who is an
individual, who has a relationship by blood, marriage or adoption to such
first-mentioned Person not more remote than first cousin, and, without limiting
the generality of the foregoing, shall include (a) any Person beneficially
owning, holding or controlling, directly or indirectly, 10% or more of any class
of Voting Stock of such first-mentioned Person, (b) any Person of which such
first-mentioned Person owns, holds or controls, directly or indirectly, 10% or
more of any class of Voting Stock or (c) any director or officer of such
first-mentioned Person (other than any director designated by holders of the
Preferred Stock); provided that, in the absence of actual control, the term
Affiliate shall in no event include any financial institution which would
otherwise be an Affiliate solely by virtue of owning, holding or controlling,
directly or indirectly, Voting Stock of the Corporation or having a designee on
the board of directors of the Corporation. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of Voting Stock or by contract or otherwise; provided that in no event
shall the fact that a Person is a holder of Indebtedness of such Person be
considered sufficient by itself to enable such Person to direct or cause the
direction of the management and policies of such Person.
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"Change in Control" shall mean any event or transaction or series of events
or transactions (occurring for whatever reason) following which:
(a) Stephen L. Day shall not be the president and chief executive
officer of the Corporation or of any successor to the Corporation
(including parent entity having beneficial ownership of the Corporation's
assets) or shall not devote substantially all of his business time and
efforts to the business and affairs of the Corporation and its
subsidiaries;
(b) Stephen L. Day shall own beneficially and of record and control
less than 14.848% of the Corporation's outstanding Common Stock (calculated
on a fully-diluted basis); or
(c) the Corporation shall own beneficially and of record and control
less than 100% of the equity interests in Dover Saddlery, Inc., a
Massachusetts corporation (or any successor thereto).
"Class A Common Stock" shall mean the Class A Common Stock, no par value,
of the Corporation as constituted on the Original Issue Date and any shares into
which such Class A Common Stock shall have been changed or any shares resulting
from any reclassification of such Class A Common Stock.
"Class B Common Stock" shall mean the Class B Common Stock, no par value,
of the Corporation as constituted on the Original Issue Date and any shares into
which such Class B Common Stock shall have been changed or any shares resulting
from any reclassification of such Class B Common Stock.
"Common Stock" shall mean the Class A Common Stock and the Class B Common
Stock.
"Conversion Price" and "Conversion Rate" shall have the respective meanings
specified in section 5.1.
"Convertible Securities" shall mean evidences of indebtedness, shares
(including, without limitation, shares of Preferred Stock) of stock or other
securities which are convertible into or exchangeable or exercisable for with
or without payment of additional consideration, shares of Common Stock, either
immediately or upon the arrival of a specified date or the happening of a
specified event.
"Corporation" shall mean Dover Saddlery, Inc., a Delaware corporation, and
any successor corporation.
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"Current Market Price" of any security as of any date herein specified
shall mean the average of the daily closing prices for the 30 consecutive
trading days commencing 45 trading days before the day in question (or in the
event that a security has been traded for less than 45 days, each of the trading
days on which such security has been traded). The closing price for each day
shall be (a) if such security is listed or admitted for trading on any national
securities exchange, the last sale price of such security, regular way, or the
average of the closing bid and asked prices thereof if no such sale occurred, in
each case as officially reported on the principal securities exchange on which
such security is listed, or (b) if not reported as described in clause (a), the
average of the closing bid and asked prices of such security in the
over-the-counter market as shown by the National Association of Securities
Dealers, Inc. Automated Quotation System, or any similar system of automated
dissemination of quotations of securities prices then in common use, if so
quoted, as reported by any member firm of the New York Stock Exchange selected
by the Corporation, or (c) if not quoted as described in clause (b), the average
of the closing bid and asked prices for such security as reported by the
National Quotation Bureau Incorporated or any similar successor organization, as
reported by any member firm of the New York Stock Exchange selected by the
Corporation, If such security is quoted on a national securities or central
market system in lieu of a market or quotation system described above, the
closing price shall be determined in the manner set forth in clause (a) of the
preceding sentence if actual transactions are reported and in the manner set
forth in clause (b) of the preceding sentence if bid and asked prices are
reported but actual transactions are not.
"Equitable Adjustment" shall have the meaning specified in section 2.1.
"Preferred Stock" shall have the meaning specified in section 1.
"Fair Value" shall mean the fair value of the appropriate security
(including, without limitation, any share of Common Stock), property, assets,
business or entity as determined by the board of directors of the Corporation,
provided that if, within 20 days following receipt of the writing setting forth
any such determination of fair value by the board of directors of the
Corporation, the Required Holders shall notify the Corporation of their
disagreement with such determination, then fair value shall be determined by an
independent appraiser of recognized national standing (selected by the
Corporation and reasonably satisfactory to the Required Holders). Each
determination of fair value shall be in accordance with generally accepted
financial practice and shall be set forth in writing, and the Corporation shall,
immediately following such determination, deliver a copy thereof to each holder
of Preferred Stock then outstanding. The determination of any such independent
appraiser shall be conclusive and binding on the Corporation and on the holder
or holders of the Preferred Stock. The Corporation shall pay all of the expenses
incurred in connection with any such determination, including, without
limitation, the expenses of the independent appraiser engaged to make such
determination. If the Corporation shall not have selected such appraiser within
ten days after the occurrence of the event giving
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rise to the need therefor, then the Required Holders may select such appraiser.
Notwithstanding the foregoing, in the case of any security, if clauses (a), (b)
or (c) of the definition of Current Market Price are applicable to such
security, then the Fair Value of such security shall be the Current Market Price
of such security.
"Junior Stock" shall have the meaning specified in section 2.1.
"Liquidation" shall have the meaning specified in section 3.1.
"Liquidation Preference" shall have the meaning specified in section 3.1.
"Officer's Certificate" shall mean a certificate signed on behalf of the
Corporation by its chief executive officer or its chief financial officer.
"Original Issue Date" shall mean September 10, 1998.
"Other Securities" shall mean with reference to the conversion of any
shares of the Preferred Stock, any shares (other than shares of Common Stock)
and any other securities of the Corporation (including, without limitation,
shares of Preferred Stock) or of any other Person which the holders of the
Preferred Stock at any time shall be entitled to receive, or shall have
received, upon the conversion of any shares of Preferred Stock of such holders,
in lieu of or in addition to shares of Common Stock, or which at any time shall
be issuable or shall have been issued in exchange for or in replacement of
shares of Common Stock (or Other Securities) pursuant to the terms of this
Certificate of Incorporation or otherwise.
"Person" shall mean an individual, a corporation, an association, a
joint-stock company, a business trust or other similar organization, a
partnership, a limited liability company, a joint venture, a trust, an
unincorporated organization or a government or any agency, instrumentality or
political subdivision thereof.
"Qualifying Public Offering" shall have the meaning specified in section
5.2.
"Required Holders" shall have the meaning specified in section 3.2.
"Special Distribution" shall have the meaning specified in section 5.5(g).
"Stock Purchase Rights" shall mean any warrants, options or other rights to
subscribe for, purchase or otherwise acquire any shares of Common Stock or any
Convertible Securities, either immediately or upon the arrival of a specified
date or the happening of a specified event.
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"Subsidiary" of any Person at any date shall mean (a) any other Person a
majority (by number of votes) of the Voting Stock of which is owned by such
first-mentioned Person and/or by one or more other Subsidiaries of such
first-mentioned Person and (b) any other Person with respect to which such
first-mentioned Person and/or any one or more other Subsidiaries of such
first-mentioned Person (i) is entitled to more than 50% of such Person's profits
or losses or more than 50% of such Person's assets on liquidation or (ii) holds
an equity interest in such Person of more than 50%. As used herein, unless the
context clearly required otherwise, the term "Subsidiary" refers to a Subsidiary
of the Corporation.
"Voting Stock", when used with reference to any Person, shall mean shares
(however designated) of such Person having ordinary voting power for the
election of a majority of the members of the board of directors (or other
governing body) of such Person, other than shares having such power only by
reason of the happening of a contingency.
8.2. Other Definitions. The terms defined in this section 15.2, whenever
used in the Agreement, shall, unless the context otherwise requires, have the
respective meanings hereinafter specified.
"shares" of any Person shall include any and all shares of capital stock of
such Person of any class or other shares, interests, participations or other
equivalents (however designated) in the capital of such Person.
8.3. Accounting Terms and Principles. All accounting terms used herein
which are not expressly defined herein shall have the respective meanings given
to them in accordance with generally accepted accounting principles as in effect
in the United States from time to time, all computations made pursuant hereto
shall be made in accordance with generally accepted accounting principles as in
effect in the United States from time to time, consistently applied, and all
financial statements shall be prepared in accordance with generally accepted
accounting principles as in effect in the United States from time to time,
consistently applied.
9. Use of term "sections". The use of the term "section" or "sections" in
this Article SIXTH shall refer solely to any section or sections of this Article
SIXTH, and not to any other Article contained in this Certificate of
Incorporation.
SEVENTH: The board of directors of the Corporation is authorized to make, alter
or repeal the bylaws of the Corporation. Election of officers need not
be by written ballot.
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IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated
Certificate of Incorporation to be signed by its incorporator as permitted by
Section 241 of the General Corporation Law of the State of Delaware.
/s/ Isaiah D. Cooper
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Isaiah D. Cooper, Sole Incorporator
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