EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
MEDICAL ACTION INDUSTRIES INC.
1. The name of the Corporation is MEDICAL ACTION INDUSTRIES INC.
2. The address of the registered office of the Corporation in Delaware is
1209 Orange Street, City of Wilmington, County of New Castle, Delaware
19801. The name of its registered agent is The Corporation Trust
Company.
3. 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.
4. The aggregate number of shares of stock that this Corporation shall
have authority to issue is (i) 15,000,000 shares of Common Stock, $.001
par value per share ("Common Stock") and (ii) 5,000,000 shares of
Preferred Stock, $.001 par value per share ("Preferred Stock").
A. COMMON STOCK. The holders of Common Stock shall be entitled to one
vote for each share held; the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors; and in the event of the voluntary
or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of the Common Stock shall be entitled to
receive all the remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of
Common Stock held by them, respectively.
B. PREFERRED STOCK. Authority is hereby expressly granted to the
Board of Directors from time to time to issue the Preferred Stock
in one or more series, and in connection with the creation of any
such series, by resolution or resolutions providing for the issue
of the shares thereof, to determine and fix such voting powers,
full or limited, or not voting powers, and such designations,
preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions thereof,
including without limitation thereof, dividend rights, conversion
rights, redemption privileges and liquidation preferences, as
shall be stated and
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and expressed in such resolutions, all to the full extent now or
hereafter permitted by the General Corporation Law of Delaware.
Without limiting the generality of the foregoing, the resolutions
providing for issuance of any series of Preferred Stock may
provide that such series shall be superior or rank equally or be
junior to the Preferred Stock of any other series to the extent
permitted by law. Except as expressly provided elsewhere in this
Article FOURTH, no vote of holders of the Preferred Stock or
Common Stock shall be required in connection with the designation
or the issuance of any shares of any series of any Preferred Stock
authorized by and complying with the conditions herein, the right
to have such vote being expressly waived by all present and future
holders of the capital stock of the Corporation."
5. The affairs, business and property of the Corporation shall be managed
and controlled by the Board of Directors. The number of Directors of
the Corporation shall not be less than three nor more than eleven,
shall be initially fixed at five and may thereafter be changed from
time to time by action of not less than a majority of the members of
the Board then in office.
The Board of Directors shall be divided into three classes, as nearly
equal in number as possible, with the term of office for one class
expiring each year. The initial Board of Directors shall consist of two
directors of the first class to be elected to hold office for a term
expiring at the first annual meeting of stockholders, one for a term
expiring at the second annual meeting of stockholders, and two
directors of the third class to be elected to hold office for a term
expiring at the third annual meeting of stockholders. At each annual
meeting of stockholders, the successors to the class of directors whose
term shall then expire shall be elected to hold office for a term
expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason and any newly
created directorships resulting from any increase in the number of
directors shall be filled by the Board of Directors, acting by not less
than a majority of the directors then in office, although less than a
quorum. Any directors so chosen shall hold office until the next
election of the class for which such directors shall have been chosen
and until their successors shall be elected and qualified. No decrease
in the number of directors shall shorten the term of any incumbent
director.
Notwithstanding any other provision of this Certificate of
Incorporation or the Bylaws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this
Certificate of Incorporation or the Bylaws of the Corporation), any
director or the entire Board of Directors may be removed only with
cause and only by the affirmative vote
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of the holders of a majority of the outstanding shares of capital stock
of the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class).
As used in this Certificate of Incorporation, the term (1) "other
entity" shall include any individual, corporation, partnership, person
or entity and any other entity with which it or its "affiliate" or
"associate", as those terms are defined in Rule 12b-2 (or any successor
rule) of the General Rules and Regulations under the Securities
Exchange Act of 1934, together with the successors and assigns of such
persons in any transaction or series of transactions not involving a
public offering of the Corporation's stock within the meaning of the
Securities Act of 1933; and (2) the term "continuing director" shall
mean a member of the initial Board of Directors of the Corporation, or
a member of the Board of Directors of the Corporation who was elected
by the public stockholders prior to the time that such other entity
acquired shares of stock of the Corporation entitling such other entity
to exercise in excess of ten (10%) percent of the total voting power of
all classes of stock of the Corporation entitled to vote in the
election of directors, or a member of the Board of Directors of the
Corporation who was elected or nominated for election by a majority of
continuing directors.
6. Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations other than by the Board of Directors shall
be made by notice in writing, delivered or mailed by first class United
States mail, postage prepaid, to the Secretary of the Corporation not
less than ninety (90) days prior to the first anniversary of the date
of the last meeting of stockholders of the Corporation called for the
election of directors.
Each notice shall set forth (i) the name, age and address of the
stockholder who intends to make the nomination and of the person or
persons to be nominated; (ii) a representation that the stockholder is
a holder of record of the corporation entitled to vote at the meeting
and intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice; (iii) the name, age,
business address and, if known, residence address of each nominee
proposed in such notice; (iv) the principal occupation or employment of
each such nominee; (v) a description of all arrangements or
understandings between the stockholder and each such nominee and any
other person or persons (naming such person or persons) pursuant to
which the nomination or nominations are to be made by the stockholder;
(vi) such other information regarding each such nominee as would have
been required to be included in a proxy statement filed pursuant to the
proxy rules of the Securities and Exchange Commission had each nominee
been nominated, or intended to be nominated, by the Board of Directors
of the Corporation; and (vii) the
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consent of each such nominee to serve as a director of the Corporation
if so elected.
The Chairman of any meeting of stockholders may, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he or she should so
determine, the Chairman shall declare to the meeting and the defective
nomination shall be disregarded
Except as required in the Bylaws no election need be by written ballot.
7. The vote of stockholders of the Corporation required to approve any
Business Combination shall be as set forth in this Article 7. The term
"Business Combination" shall have the meaning ascribed to it in (a)(B)
of this Article; each other capitalized term used in this Article shall
have the meaning ascribed to it in (c) of this Article.
(a)(A) In addition to any affirmative vote required by law or this
Certificate of Incorporation and except as otherwise expressly provided
in (b) of this Article 7:
(1) any merger or consolidation of the Corporation or any Subsidiary
with (i) any Interested Stockholder or (ii) any other corporation
or entity (whether or not itself is an Interested Stockholder)
which is, or after each merger or consolidation would be, an
Affiliate of an Interested Stockholder; or
(2) any sale, lease, exchange, mortgage, pledge, transfer, or other
disposition (in one transaction or a series of transactions) to or
with any Interested Stockholder or any Affiliate of any Interested
Stockholder of assets of the Corporation or any Subsidiary having
an aggregate Fair Market Value of $5,000,000 or more; or
(3) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of
any Affiliate or any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate Fair Market Value of $5,000,000 or more, other than the
issuance of securities upon the conversion of convertible
securities of the Corporation or any Subsidiary which were not
acquired by such Interested Stockholder (or such Affiliate) from
the Corporation or a Subsidiary; or
(4) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an
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Interested Stockholder or any Affiliate of any Interested
Stockholder; or
(5) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation with any of its
Subsidiaries or any other transaction (whether or not with or into
or otherwise involving an Interested Stockholder) which in any
such case has the effect, directly or indirectly, of increasing
the proportionate share of the outstanding shares of any class or
series of stock or securities convertible into the stock of the
Corporation or any Subsidiary which is directly or indirectly
beneficially owned by any Interested Stockholder or any affiliate
of any Interested Stockholder;
shall not be consummated without the affirmative vote of the holders of at least
80 percent of the combined voting power of the then outstanding shares of stock
of all classes and series of the Corporation entitled to vote generally in the
election of directors ("Voting Stock"), in each case voting together as a single
class. Such affirmative vote shall be required notwithstanding the fact that no
vote may be required, or that a lesser percentage may be specified, by law or by
this Certificate of Incorporation or in any agreement with any national
securities exchange or otherwise.
(B) The term "Business Combination" as used in this Article 7
shall mean any transaction that is referred to in any one or more clauses (1)
through (5) of (a)(A) of this Article 7.
(b) The provisions of (a) of this Article 7 shall not be applicable to
any Business Combination in respect of which all of the conditions specified in
either of the following paragraphs (A) and (B) are met, and such Business
Combination shall require only such affirmative vote as is required by law and
any other provision of the Certificate of Incorporation.
(A) such Business Combination shall have been approved by a
majority of the Disinterested Directors, or
(B) each of the six conditions specified in the following clauses
(1) through (6) shall have been met:
(1) the aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the Business Combination
(the "Consummation Date") of any consideration other than cash to be
received by holders of Common Stock in such Business Combination shall
be at least equal to the higher of the following:
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(i) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of Common Stock beneficially owned
by the Interested Stockholder which were acquired beneficially by such
Interested Stockholder (x) within the two year period immediately prior
to the Announcement Date or (y) in the transaction in which it became
an Interested Stockholder, whichever is higher; or
(ii) the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested Stockholder
became an Interested Stockholder (the Determination Date), whichever is
higher; and
(2) the aggregate amount of the cash and the Fair Market
Value as of the Consummation Date of any consideration other than cash
to be received per share by holders of shares of any other class or
series of Voting Stock shall be at least equal to the highest of the
following (it being intended that the requirements of this clause
(B)(2) shall be required to be met with respect to each class and
series of such outstanding Voting Stock, whether or not the Interested
Stockholder beneficially owns any shares of a particular class or
series of Voting Stock):
(i) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of such class or series of voting
stock beneficially owned by the Interested Stockholder, which were
acquired beneficially by such Interested Stockholder (x) within the two
year period immediately prior to the Announcement Date or (y) in the
transaction in which it became an Interested Stockholder, whichever is
higher;
(ii) (if applicable) the highest preferential amount per share to
which the holders of shares of such class or series of Voting Stock are
entitled in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation; and
(iii) the Fair Market Value per share of such class or series of
Voting Stock on the Announcement Date or the Determination Date,
whichever is higher; and
(3) the consideration to be received by holders of a
particular class or series of outstanding Voting Stock (including
Common Stock) shall be in cash or in the same form as were previously
paid in order to acquire beneficially shares of such class or series of
Voting Stock that are beneficially owned by the Interested Stockholder
and, if the Interested Stockholder beneficially owns shares of any
class or series of Voting Stock that were acquired with varying forms
of consideration, the
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form of consideration to be received by holders of such class or series
of Voting Stock shall be either cash or the form used to acquire
beneficially the largest number of shares of such class or series of
Voting Stock beneficially acquired prior to the Announcement Date; and
(4) after such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such Business
Combination:
(i) except as approved by a majority of the Disinterested
Directors, there shall have been no failure to declare and pay at the
regular dates therefor the full amount of any dividends (whether or not
cumulative) payable on any class or series of stock having a preference
over the Common Stock as to dividends or upon liquidation.
(ii) there shall have been (x) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved by a majority of
the Disinterested Directors and (y) an increase in such annual rate of
dividends (as necessary to prevent any such reduction) in the event of
any reclassification (including any reverse stock split)
recapitalization, reorganization or any similar transaction which has
the effect of reducing the number of outstanding shares of the Common
Stock, unless the failure so to increase such annual rate was approved
by a majority of the Disinterested Directors; and
(iii) such Interested Stockholder shall not have become the
beneficial owner of any additional shares of Voting Stock except as
part of the transaction in which it became an Interested Stockholder;
and
(5) after such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not have
received the benefit, directly or indirectly (except proportionately as
a stockholder), of any loans, advances, guarantees, pledges or other
financial assistance or tax credits or other tax advantages provided by
the Corporation, whether in anticipation of or in connection with such
Business Combination or otherwise; and
(6) a proxy or information statement describing the proposed
Business Combination and complying with the requirements of the
Securities Exchange Act of 1934 and the rules and regulations
thereunder (or any subsequent provisions replacing such Act, rules or
regulations) shall be mailed to public stockholders of the Corporation
at least 30 days prior to the consummation of such Business Combination
(whether or not such proxy or information statement is required to be
mailed pursuant to such Act or subsequent provisions).
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(c) For purposes of this Article 7:
(A) A "person" shall mean any individual, firm or corporation or
other entity.
(B) "Interested Stockholder" shall mean any person (other than the
Corporation or any Subsidiary) who or which:
(1) is the beneficial owner, directly or indirectly, of more
than 10 percent of the combined voting power of the then outstanding
shares of Voting Stock; or
(2) is an Affiliate of the Interested Stockholder and at any
time within the two year period immediately prior to the date in
question was the beneficial owner, directly or indirectly, of 10
percent or more of the combined voting power of the then outstanding
shares of Voting Stock; or
(3) is an assignee of or has otherwise succeeded to the
beneficial ownership of any shares of Voting Stock that were at any
time within the two year period immediately prior to the date in
question beneficially owned by an Interested Stockholder, if such
assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering
within the meaning of the Securities Act of 1933.
(C) A person shall be a "beneficial owner" of any Voting Stock:
(1) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(2) which such person or any of its Affiliates or Associates
has (a) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise,
or (b) the right to vote or direct the vote pursuant to any agreement,
arrangement or understanding; or
(3) which are beneficially owned, directly or indirectly, by
any other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares, of
Voting Stock.
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(D) For the purposes of determining whether a person is an
Interested Stockholder pursuant to (c)(B) of this Article 7, the number of
shares of Voting Stock deemed to be outstanding shall include shares owned
through application of (c)(C) of this Article but shall not include any other
shares of Voting Stock that may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion rights, warrants or
options, or otherwise.
(E) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on September 1, 1985.
(F) "Subsidiary" means any corporation more than 50 percent of
whose outstanding stock having ordinary voting power in the election of
directors is owned, directly or indirectly, by the Corporation or by a
Subsidiary or by the Corporation and one or more Subsidiaries, provided,
however, that for the purposes of the definition of Interested Stockholder set
forth (c)(B) of this Article 7 the term "Subsidiary" shall mean only a
corporation of which a majority of each class or equity security is owned,
directly or indirectly, by the Corporation.
(G) "Disinterested Director" means any member of the Board of
Directors of the Corporation who is unaffiliated with, and not a nominee of, the
Interested Stockholder and was a member of the Board prior to the time that the
Interested Stockholder became an Interested Stockholder, any successor of a
Disinterested Director who is unaffiliated with, and not a nominee of, the
Interested Stockholder and who is recommended to succeed a Disinterested
Director by a majority of Disinterested Directors then on the Board of
Directors.
(H) "Fair Market Value" means: (1) in the case of stock, the
highest closing sale price during the 30 day period immediately preceding the
date in question of a share of such stock in the Composite Tape for New York
Stock Exchange Listed Stocks, or, if such stock is not quoted on the Composite
Tape on the New York Stock Exchange, or, if such stock is not listed on any such
exchange, the highest closing sales price or bid quotation with respect to a
share of such stock during the 30 day period preceding the date in question on
the National Association of Securities Dealers, Inc. Automated Quotations System
or any system then in use, or if no such quotations are available, the fair
market value on the date in question of a share of stock as determined by a
majority of the Disinterested Directors in good faith; and (2) in the case of
stock of any class or series which is not traded on any United States registered
securities exchange nor in the over-the-counter market or in the case of
property other than cash or stock, the fair market value of such property on the
date in question as determined by a majority of the Disinterested Directors in
good faith.
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(I) In the event of any Business Combination in which the
Corporation survives, the phrase "other consideration to be received" as used in
(b)(B)(1) and (2) of this Article 7 shall include the shares of Common Stock
and/or the shares of any other class of outstanding Voting Stock retained by the
holders of such shares.
(J) "Announcement Date" means the date of first public
announcement of the proposed Business Combination.
(K) "Determination Date" means the date on which the Interested
Stockholder became an Interested Stockholder.
(d) A majority of the Disinterested Directors of the Corporation shall
have the power and duty to determine, on the basis of information known to them
after reasonable inquiry, all facts necessary to determine compliance with this
Article 7, including, without limitation (A) whether a person is an Interested
Stockholder, (B) the number of shares of Voting Stock beneficially owned by any
person, (C) whether a person is an Affiliate or Associate of another person, (D)
whether the requirements of (b) of this Article 7 have been met with respect to
any Business Combination, and (E) whether the assets which are the subject of
any Business Combination have, or the consideration to be received for the
issuance or transfer of securities by the Corporation or any Subsidiary or
Business Combination has, an aggregate Fair Market Value of $5,000,000 or more.
The good faith determination of a majority of the Disinterested Directors on
such matters shall be conclusive and binding for al purposes of this Article 7.
(e) Nothing contained in this Article 7 shall be construed to relieve
any Interested Stockholder from any fiduciary obligation imposed by law.
(f) Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
80% of the voting power of the Voting Stock, voting together as a single class,
shall be required to alter, amend, or repeal this Article 7 or to adopt any
provision inconsistent therewith.
8. Special meetings of the stockholders may be called only by the Board of
Directors and the power of stockholders to call a special meeting for
any and all purposes whatsoever is specifically denied.
9. Notwithstanding any other provision of this Certificate of
Incorporation (and notwithstanding the fact that some lesser percentage
may be specified by law, this Certificate of Incorporation or the
Bylaws of the corporation), the affirmative vote of the holders of not
less than two-thirds of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter, change or repeal Article 5, 6,
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8 and 9 of the Certificate of Incorporation; provided, further that the
provisions of this Article 9 shall not apply to, and only such vote as
shall be required by statute shall be required for, any amendment,
alteration, change or repeal recommended to the stockholders by
two-thirds of the whole Board of Directors of the Corporation, provided
that and so long as majority of the members of the Board of Directors
acting upon such matter shall be continuing directors (as defined in
Article 5 of this Certificate of Corporation).
10. The Board of Directors shall have the power to make, alter or repeal
Bylaws subject to the power of the stockholders to alter or repeal the
Bylaws made or altered by the Board of Directors.
11. No person who is or was at any time a director of the corporation shall
be personally liable to the corporation or its stockholders for
monetary damages for any breach of fiduciary duty by such person as a
director; provided, however, that unless and except to the extent
otherwise permitted from time to time by applicable law, the provisions
of this Article shall not eliminate or limit the liability of a
director (i) for breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for any act or omission by the
director which is not in good faith or which involves intentional
misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware law, (iv) for any transaction from which the director
derived an improper personal benefit or (v) for any act or omission
occurring prior to the date the Liability Amendment becomes effective.
No amendment to or repeal of this Article 11 shall apply to or have any
effect on the liability or alleged liability of any director of the
corporation for or with respect to any act or omission of such director
occurring prior to such amendment or repeal.
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