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Exhibit 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
DRAGON SYSTEMS, INC.
(PURSUANT TO SECTIONS 242 & 245)
Dragon Systems, Inc., a corporation (the "Corporation") organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware (the "GCL"), hereby certifies as follows:
FIRST: The name of the corporation is dragon Systems, Inc.
SECOND: The date on which the initial Certificate of
Incorporation of the Corporation was filed with the secretary of State of the
State of Delaware is June 24, 1982, under the name Dragon Systems, Inc.
THIRD: The Board of Directors of the Corporation, pursuant to
the GCL, adopted resolutions amending, integrating and restating the Certificate
of Incorporation to read in full as set forth in the Restated Certificate of
Incorporation attached hereto as Exhibit A.
FOURTH: Pursuant to resolutions of the Board of Directors, the
Restated Certificate of Incorporation was thereafter submitted to the
stockholders of the Corporation for their approval, which approval was given by
written consent of the stockholders pursuant to Section 228 of the GCL.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed and attested by its duly authorized officers, this 6th day of July, 1994.
DRAGON SYSTEMS, INC.
/s/ Janet M. Baker
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Janet M. Baker,
President
ATTEST:
/s/ Robert Goldberg
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By: Robert Goldberg
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Title: Assistant Secretary
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RESTATED CERTIFICATE OF
INCORPORATION OF
DRAGON SYSTEMS, INC.
Article I
The name of the Corporation is Dragon Systems, Inc.
Article II
The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, Corporation Trust Center, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
Article III
The nature of the business or purposes to be conducted or promoted is
as follows:
To develop, manufacture, market, sell, lease and otherwise dispose of,
and trade or deal in and with, speech processing equipment, systems and services
of every type and description.
To conduct or engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of Delaware.
Article IV
The Corporation is authorized to issue two classes of stock, designated
"Common Stock" and "Preferred Stock." The total number of shares which the
Corporation is authorized to issue is 15,000,000. The number of shares of Common
Stock which the Corporation is authorized to issue is 10,000,000, par value $.04
per share. The number of shares of Preferred Stock which the Corporation is
authorized to issue is 4,000,000, par value $.04 per share.
The Corporation shall from time to time in accordance with the laws of
the State of Delaware increase the authorized amount of its Common Stock if at
any time the number of shares of Common Stock remaining unissued and available
for issuance shall not be sufficient to permit conversion of the Preferred
Stock.
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The relative rights, preferences, privileges and restrictions granted
to or imposed upon the Preferred Stock and the Common Stock or the holders
thereof are as follows:
Section 1. Dividends. The holders of the Preferred Stock shall be
entitled to receive, when and as declared by the Board of Directors, dividends
at the rate of $1.60 per share per annum, payable quarterly as the Board of
Directors may from time to time determine out of funds legally available
therefor. No dividends (other than those payable solely in the Common Stock of
the corporation) shall be paid on any Common Stock of the Corporation during any
fiscal year of the Corporation until dividends in the total amount of $1.60 per
share on the Preferred Stock shall have been paid or declared and set apart
during that fiscal year. The right to such dividend on shares of Preferred Stock
shall not be cumulative, and no right shall accrue to holders of Preferred Stock
by reason of the fact that dividends on said shares are not declared in any
prior year.
After payment of such dividends any additional dividends declared shall
be distributed among all the holders of Preferred Stock and all holders of
Common Stock in proportion to the number of shares of Common Stock which would
be held by each such holder if all shares of Preferred Stock were converted into
Common Stock at the then effective Conversion Price (as defined in Section 4
below).
Section 2. Liquidation Preference. In the event of any liquidation,
dissolution, or winding up of the Corporation, either voluntary or involuntary,
distributions to the shareholders of the Corporation shall be made in the
following manner:
(a) The holders of the Preferred Stock shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Corporation to the holders of the Common Stock by reason of
their ownership of such stock, the amount equal to the sum of (i) $20.00 per
share for each share of Preferred Stock then held by them, and (ii) an amount
equal to all declared but unpaid dividends on the Preferred Stock. If the assets
and funds thus distributed among the holders of the Preferred Stock pursuant to
this Section 2(a) shall be insufficient to permit the payment to such holders of
the full aforesaid preferential amount, then the entire assets and funds of the
Corporation legally available for distribution shall be distributed ratably
among the holders of the Preferred Stock in proportion to the preferential
amount that each such holder is otherwise entitled to receive.
(b) After payment has been made to the holders of the
Preferred Stock of the full amounts to which they shall be entitled as set forth
in the first sentence of this Section 2(a), then the holders of the Common Stock
shall be entitled to receive the amount equal to the sum of (i) $6.78 per share
for each share of Common Stock held by them, and (ii) an amount equal to all
declared but unpaid
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dividends on the Common Stock. If the assets and funds thus distributed among
the holders of the Common Stock pursuant to this Section 2(b) shall be
insufficient to permit the payment to such holders of the full aforesaid
preferential amount, then the entire assets and funds of the Corporation legally
available for distribution pursuant to this Section 2(b) shall be distributed
ratably among the holders of the Common Stock in proportion to the preferential
amount that each such holder is otherwise entitled to receive.
(c) After payment has been made to the holders of the
Preferred Stock of the full amounts to which they shall be entitled as set forth
in Section 2(a) above and after payment has been made to the holders of the
Common Stock of the full amounts to which they shall be entitled as set forth in
Section 2(b) above, then the entire remaining assets and funds of the
Corporation legally available for distribution, if any, shall be distributed on
a pro rata basis on the outstanding Common Stock and Preferred Stock (with the
outstanding Preferred Stock sharing in such distribution on an as-converted into
Common Stock basis).
(d) For purposes of this Section 2, a merger or consolidation
of the Corporation with or into any other corporation or corporations, or the
merger of any other corporation or corporations into the Corporation (other than
any merger or consolidation in which shareholders of the Corporation immediately
prior to such merger or consolidation beneficially own a majority of the voting
shares of the surviving corporation immediately following such merger or
consolidation), or a sale of all o substantially all of the assets of the
Corporation, shall be treated as a liquidation, dissolution or winding up of the
Corporation.
(e) Any securities to be delivered to the holders of the
Preferred Stock and Common Stock upon merger, reorganization or sale of
substantially all of the assets of the Corporation shall be valued as follows:
(1) if traded on a securities exchange or on the
NASDAQ National Market System, the value shall be deemed to be the average of
the closing prices of the securities on such exchange over the ten business day
period ending three (3) business days prior to the closing;
(2) if actively traded over-the-counter, the value
shall be deemed to be the average of the closing bid prices over the ten
business day period ending three (3) business days prior to the closing; and
(3) if there is no active public market, the value
shall be the fair market value thereof as mutually determined by the Corporation
and the holders of not less than a majority of the outstanding shares of
Preferred Stock voting as a single class, provided that if the Corporation and
the holders of a majority of the outstanding shares of Preferred Stock are
unable to reach agreement, then by
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independent appraisal by an investment banker hired and paid by the Corporation,
but acceptable to the holders of a majority of the outstanding shares of
Preferred Stock voting as a single class.
Section 3. Consent for Certain Repurchases of Common Stock Deemed to be
Distributions. Each holder of an outstanding share of Preferred Stock shall be
deemed to have consented, for purposes of Section 228 of the Delaware General
Corporation Law, to distributions made by the Corporation in connection with the
repurchase of shares of Common Stock at cost issued to or held by officers,
directors, employees or consultants upon termination of their employment or
services pursuant to agreements approved by the Board of Directors of the
Corporation.
Section 4. Conversion. The holders of the Preferred Stock shall have
conversion rights as follows (the "Conversion Rights").
(a) Right to Convert. Each share of Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the Corporation or any transfer agent,
into such number of fully paid and nonassessable shares of Common Stock, as is
determined by dividing $20.00 by the Conversion Price, determined as hereinafter
provided, in effect at the time of conversion. The price at which shares of
Common Stock for each share of Preferred Stock. Such initial Conversion Price
shall be subject to adjustment as hereinafter provided.
Upon conversion, all declared and unpaid dividends on the Preferred
Stock shall be paid either in cash or in shares of Common Stock of the
Corporation, at the election of the Company. For purposes of such payments,
shares of Common Stock shall be valued at the fair market value at the time of
such conversion, as determined by the Board of Directors of the Corporation.
(b) Automatic Conversion. Each share of Preferred Stock shall
automatically be converted into shares of Common Stock, at the then effective
Conversion Price upon the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement on Form S-1 or any
successor form under the Securities Act of 1933, as amended, covering the offer
and sale of Common Stock for the account of the Corporation to the public at a
price which results in aggregate net cash proceeds to the Company in excess of
$10,000,000. In the event of the automatic conversion of the Preferred Stock
upon a public offering as set forth herein, the person(s) entitled to receive
the Common Stock issuable upon such conversion of Preferred Stock shall not be
deemed to have converted such Preferred Stock until immediately prior to the
closing of such sale of securities.
(c) Mechanics of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of the Preferred Stock. In lieu of any
fractional share
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to which the holder would otherwise be entitled, the Conversion shall (after
aggregating all shares into which shares of Preferred Stock held by each holder
could be converted) pay cash equal to such fraction multiplied by the then
effective Conversion Price. Before any holder or Preferred Stock shall be
entitled to convert the same into full shares of Common Stock and to receive
certificates therefor, the holder shall surrender the certificate of
certificates therefor, duly endorsed, at the office of the Corporation or of any
transfer agent, and shall give written notice to the Corporation at such office
that the holder elects to convert the same; provided, however, that in the event
of an automatic conversion pursuant to Section 3(b), the outstanding shares of
Preferred Stock shall be converted automatically 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 provided
further, that the Corporation shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon such automatic conversion
unless the certificates evidencing such shares of Preferred Stock are either
delivered to the Corporation or its transfer agent as provided above, or the
holder notifies the Corporation or its transfer agent that such certificates
have been lost, stolen or destroyed and executes an agreement satisfactory to
the Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates. The Corporation shall, as soon as practicable
after such delivery, or such agreement and indemnification in the case of a lost
certificate, issue and deliver at such office to such holder of Preferred stock,
a certificate or certificates for the number of shares of Common Stock to which
the holder shall be entitled as aforesaid and a check payable to the holder in
the amount of any cash amounts payable as the result of a conversion into a
fractional share of Common Stock. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of such surrender of
the shares of Preferred to be converted, or in the case of automatic conversion
on the date of closing of the offering or the effective date of such written
consent, and the person or persons entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock on such date.
(d) Adjustment of Conversion Price of Preferred Stock. The
Conversion Price shall be subject to adjustment from time to time as follows:
(1) Adjustments for Subdivisions, Combinations or
Consolidation of Common Stock. Following the date this Restated Certificate of
Incorporation is filed with the Secretary of State of the State of Delaware, in
the event the outstanding shares of Common Stock shall be subdivided by stock
split, stock dividends or otherwise, into a greater number of shares of Common
Stock, the Conversion Price then in effect shall, concurrently with the
effectiveness of such subdivision, be proportionately decreased. In the event
the outstanding shares of Common stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
the conversion Price then in effect
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shall, concurrently with the effectiveness of such combination of consolidation,
be proportionately increased.
(2) Adjustments for Stock Dividends and Other
Distributions. In the event the Corporation at any time or from time to time
makes, or fixes a record date for the determination of holders of Common stock
entitled to receive any distribution (excluding any repurchases of securities by
the Corporation not made on a pro rata basis from all holders of any class of
the Corporation's securities) payable in property or in securities of the
Corporation other than shares of Common Stock, and other than as otherwise
adjusted in this Section 4 or as provided in Section 1, then and in each such
event the holders of Preferred Stock shall receive at the time of such
distribution, the amount of property or the number of securities of the
Corporation that they would have received had their Preferred Stock been
converted into Common Stock on the date of such event.
(3) Adjustments for Reclassification, Exchange and
Substitution. Except as provided in Section 2 upon any liquidation, dissolution
or winding up of the Corporation, if the Common Stock issuable upon conversion
of the Preferred Stock shall be changed into the same or a different number of
shares of any other class or classes of stock, whether by capital
reorganization, reclassification or otherwise (other than a subdivision or
combination of shares provided for above), each share of property to which a
holder of the number of shares of Common Stock of the Corporation deliverable
upon conversion of such share of Preferred Stock shall have been entitled upon
such reorganization or reclassification.
(e) No Impairment. The Corporation will not, by amendment of
its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, 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 hereunder by the Corporation but
will at all times in good faith assist in the carrying out of all the provisions
of this Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Preferred Stock against impairment.
(f) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 4,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Preferred Stock a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The Corporation shall, upon the written request at any time of any holder of
Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Price at the time in effect, and
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(iii) the number of shares of Common Stock and the amount, if any, of other
property which at the time would be received upon the conversion of Preferred
Stock.
(g) Notices of Record Date. In the event that the Corporation
shall propose at any time:
(i) to declare any dividend or distribution upon its
Common Stock, whether in cash, property, stock or other securities, whether or
not a regular cash dividend and whether or not out of earnings or earned
surplus;
(ii) to offer for subscription pro rata to the holder
of any class or series of its stock any additional shares of stock of any class
or series or other rights;
(iii) to effect any reclassification or
recapitalization of its Common Stock outstanding involving a change in the
Common Stock; or
(iv) to merge or consolidate with or into any other
corporation, or sell, lease or convey all or substantially all its property or
business, or to liquidate, dissolve or wind up;
then, in connection with each such event,
the Corporation shall send to the holders of the Preferred Stock:
(1) at least 20 days' prior written notice
of the date on which a record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders of Common
Stock shall be entitled thereto) or for determining rights to vote in respect of
the matters referred to in (iii) and (iv) above; and
(2) in the case of the matters referred to
in (iii) and (iv) above, at least 20 days' prior written notice of the date when
the same shall take place (and specifying the date on which the holders of
Common Stock shall be entitled to exchange their Common Stock for securities or
other property deliverable upon the occurrence of such event).
Each such written notice shall be delivered personally or given by
first class mail, postage prepaid, addressed to the holder of Preferred Stock at
the address for each such holder as shown on the books of the Corporation.
Section 5. Voting Rights. Except as otherwise required by law or by
Section 6 or by Article V hereof, the holder of each share of Common stock
issued and outstanding shall have one vote with respect to such share and the
holder of each share of Preferred Stock shall be entitled with respect to such
share to a number of
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votes equal to the number of shares of Common Stock into which such share of
Preferred Stock could be converted at the record date for determination of the
shareholders entitled to vote on such matters, or, if no such record date is
established, at the dates such vote is taken or any written consent of
shareholders is solicited, such votes to be counted together with all other
shares of stock of the Company having general voting power and not separately as
a class (except as required by Section 2 or Section 6 or by the General
Corporation Law of Delaware). Holders of Common Stock and Preferred Stock shall
be entitled to notice of any stockholders' meeting in accordance with the Bylaws
of the Corporation. Fractional votes by the holders of Preferred Stock shall
not, however, be permitted and any fractional voting rights shall (after
aggregating all shares into which shares of Preferred Stock held by each holder
could be converted) be rounded to the nearest whole number.
Section 6. Covenants. In addition to any other rights provided by law,
so long as any Preferred Stock shall be outstanding, the Corporation shall not,
without first obtaining the affirmative vote or written consent of the holders
of not less than seventy-five and one-tenth percent (75.1%) of the then
outstanding shares of the Preferred Stock create any new class of shares which
has rights, preferences or privileges superior to the Preferred Stock.
Section 7. Residual Rights. All rights accruing to the outstanding
shares of the Corporation not expressly provided for to the contrary herein
shall be vested in the Common Stock.
Article V
In furtherance and not in limitation of powers conferred by statute, it
is further provided:
(a) Election of directors need not be by written ballot.
(b) The Board of Directors is expressly authorized to adopt, amend or
repeal the By-Laws of the Corporation.
Article VI
Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 o Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or
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receivers appointed for the Corporation under the provisions of Section 279 of
Title 8 of the Delaware Code order a meeting of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing stockholders of the Corporation,
as the case may be, agree to any compromise or arrangement and to any
reorganization of the Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the Corporation, as the case may be,
and also on the Corporation.
Article VII
To the fullest extent permitted by the Delaware General Corporation Law
as the same exists or as may hereafter be amended, a director of the corporation
shall not be personally liable to the Corporation or its stockholders for
monetary damages for breach fiduciary duty as a director.
The corporation may indemnify to the fullest extent permitted by law
any person (including the representative of such person's estate and such
person's successors and assigns) made or threatened to be made a party to an
action or proceeding, whether criminal, civil, administrative or investigative,
by reason of the fact that he is or was a director, office or employee of the
corporation or served at any other enterprise as a director, officer or employee
at the request of the corporation.
Neither any amendment not repeal of this Article VII nor the adoption
of any provision of this corporation's Certificate of Incorporation inconsistent
with this Article VII shall eliminate or reduce the effect of this Article VII
in respect of any matter occurring, or any action or proceeding accruing or
arising or that, but for this Article VII, would accrue or arise, prior to such
amendment, repeal or adoption of an inconsistent provision.
Article VIII
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
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CERTIFICATE OF AMENDMENT OF
RESTATED CERTIFICATE OF INCORPORATION OF
DRAGON SYSTEMS, INC.
Pursuant to Section 242 of the General Corporation Law of the State of Delaware
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DRAGON SYSTEMS, INC. (hereinafter called the "Corporation"), organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, does hereby certify as follows:
By written action of the Board of Directors of the corporation resolutions
were duly adopted, pursuant to Sections 141 and 242 of the General Corporation
Law of the State of Delaware, setting forth an amendment to the Certificate of
Incorporation of the Corporation and declaring said amendment to be advisable.
The stockholders of the Corporation duly approved said proposed amendment by
written consent in accordance with Sections 228 and 242 of the General
Corporation Law of the State of Delaware, and written notice of such consent has
been or will be given to all stockholders who have not consented in writing to
said amendment. The resolution setting forth the amendment is as follows:
RESOLVED: That Article FOURTH of the Restated Certificate of Incorporation
of the Corporation be and hereby is amended by deleting the first
paragraph of Article FOURTH and by inserting the following in
lieu thereof:
"The Corporation is authorized to issue two classes of stock,
designated "Common Stock" and "Preferred Stock." The total number
of shares which the Corporation is authorized to issue is
50,000,000. The number of shares of Common Stock which the
Corporation is authorized to issue is 45,000,000, par value $.04
per share. The number of shares of Preferred Stock which
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the Corporation is authorized to issue is 5,000,000, par value
$.04 per share."
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Certificate of Amendment to be signed by its President
as of the 16th day of November, 1998.
/s/ Janet M. Baker
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Janet M. Baker, President
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