1
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
HOTELWORKS.COM, INC.
Under Section 402 of the Business Corporation Law
1. The name of the corporation is HOTELWORKS.COM, INC.
(hereinafter referred to as the "Corporation").
2. The purpose or purposes for which the Corporation is formed are as
follows; to wit,
To engage in any lawful act or activity for which corporations may be formed
under the Business Corporation Law. The Corporation is not formed to engage in
any act or activity requiring the consent or approval of any state official,
department, board, agency or other body without such consent or approval first
being obtained.
To own, operate, manage, acquire and deal in property, real and personal, which
may be necessary to the conduct of the business.
The Corporation shall have all of the powers enumerated in Section 202 of the
Business Corporation Law, subject to any limitations provided in the Business
Corporation Law or any other statute in the State of New York.
3. The personal liability of the directors of the Corporation is hereby
eliminated to the fullest extent permitted by the provisions of paragraph (b) of
Section 402 of the Business Corporation Law of the State of New York, as the
same may be amended and supplemented. Any repeal or modification of this Article
by the shareholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing hereunder with respect to
any act or omission occurring prior to such repeal or modification.
4. The county in which the office of the corporation is to
be located in the State of New York is: Nassau
5. The aggregate number of shares of stock that the Corporation shall
have authority to issue is (i) twenty million
2
(20,000,000) shares of Common Stock, $0.01 par value per share ("Common Stock"),
and (ii) three million (3,000,000) shares of Preferred Stock, $0.01 par value
per share ("Preferred Stock"). The Board of Directors is hereby authorized to
fix or alter the rights, preferences, privileges and restrictions granted to or
imposed upon any series of Preferred Stock, and the number of shares
constituting any such series and the designation thereof, or of any of them.
I. DESIGNATIONS AND AMOUNT. 200,000 shares of the Preferred Stock of
the Corporation, stated value of $25 (the "Stated Value") per share, shall
constitute a class of Preferred Stock designated as "Redeemable Convertible
Preferred Stock" (the "Preferred Stock").
II. RANK. The Preferred Stock shall rank senior to all classes and
series of common stock of the Corporation now or hereafter authorized, issued or
outstanding, including, without limitation, the Common Stock, par value $.01 per
share ("Common Stock") of the Corporation, and any other classes and series of
capital stock of the Corporation now or hereafter authorized, issued or
outstanding and specifically designated as being junior to the Preferred Stock
(collectively, the "Junior Securities"). Unless authorized by a vote of the
holders of a majority of the Preferred Stock then outstanding, no other capital
stock of the Corporation shall rank senior to the Preferred Stock.
III. DIVIDENDS.
(a) The holders of shares of Preferred Stock shall be entitled to
receive, out of assets of the Corporation legally available for payment, cash
dividends at the rate of six percent (6%) (or $1.50) per annum per share of
Preferred Stock (the "Preferred Dividend"), payable annually and in arrears on
the ninetieth day following the end of the fiscal year of The Leonard Parker
Company, a Florida corporation ("LPC") in each year, commencing March 31, 1998
(each a "dividend payment date"); PROVIDED, HOWEVER, that if on any such day
banks in the City of New York are authorized or required to close, a Preferred
Dividend otherwise payable on such day will be payable on the next day that
banks in the City of New York are not authorized or required to close. Such
Preferred Dividend shall accrue from the date of issuance and be cumulative from
the later of the date of initial issuance of such shares of Preferred Stock or
the most recent dividend payment date on which dividends have been paid on the
Preferred Stock by the Corporation. The party that holds the Preferred Stock on
an applicable record date, as shall be fixed by the Board, for any Preferred
Dividend will be entitled to receive such Preferred Dividend, without regard to
whether the Preferred Stock is outstanding subsequent to the applicable record
date but prior to the applicable dividend payment date. If the Corporation is
legally capable of paying the Preferred
2
3
Dividend and elects to accrue such amount, such accrued dividends shall bear
interest at the rate of 13 1/2% per annum until paid.
(b) So long as any Preferred Stock shall remain outstanding, the
holders of the Preferred Stock shall be entitled to receive, and Parker Reorder
Corporation, a Florida corporation ("Parker Reorder"), shall pay, out of the
cumulative net profits (the "Cumulative Net Profits") of Parker Reorder, a cash
payment (the "Participating Dividend") equal to twenty percent (20%) of (i) the
Cumulative Net Profits of Parker Reorder, less (ii) all Participating Dividends
previously made to the holders of the Preferred Stock hereunder, such
Participating Dividend to be payable annually to the holders of the Preferred
Stock ninety (90) days following the end of each fiscal year of Parker Reorder.
Such Participating Dividend shall be paid in only such amounts as shall be
authenticated by a certificate executed by two officers of the Corporation.
"Cumulative Net Profits" shall mean net profits of Parker Reorder computed in
accordance with generally accepted accounting principles based on the audited
financial statements of Parker Reorder, assuming that taxes and other charges
are assessed as if it were a standalone company, cumulative from January 1,
1997. For purposes of calculating Cumulative Net Profits, expenses allocated to
Parker Reorder for goods or services provided by any affiliate of the Company
shall not exceed the sum Parker Reorder would have paid for such goods or
services to an unaffiliated third party. In the event that the Preferred Stock
ceases to be outstanding at a time prior to the end of a fiscal year of Parker
Reorder, Cumulative Net Profits and, consequently, the Participating Dividend,
shall be computed as of the end of the most recently completed fiscal quarter of
Parker Reorder and shall be paid within ninety (90) days after the Preferred
Stock ceases to be outstanding.
(c) So long as any Preferred Stock shall remain outstanding,
neither the Corporation nor any subsidiary thereof shall pay or declare any
dividend or make any distribution upon, nor shall any distribution be made in
respect of, any Junior Securities, unless all accrued and unpaid Preferred
Dividends on the Preferred Stock for all prior and applicable dividend periods
have been or contemporaneously are declared and paid and the Preferred Dividends
on the Preferred Stock for the current and applicable dividend period, if
accrued, have been or contemporaneously are declared and set apart for payment.
IV. RIGHTS ON LIQUIDATION, DISSOLUTION OR WINDING UP, ETC.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation
available for distribution to the stockholders of the Corporation, whether from
capital, surplus or earnings, shall be distributed in the following order of
priority:
3
4
(i) The holders of shares of Preferred Stock shall be
entitled to receive, in cash, prior and in preference to any distribution to the
holders of any Junior Securities an amount equal to the Stated Value for each
share of the Preferred Stock then outstanding, plus an amount equal to all
accrued and unpaid Preferred Dividends and interest thereon, if any, on such
shares of Preferred Stock as of the date such payment is made to the holders of
shares of Preferred Stock; and
(ii) If there is a distribution pursuant to Section IV(a)(i)
hereof, the remaining assets of the Corporation available for distribution, if
any, to the stockholders of the Corporation shall be distributed pro rata to the
holders of issued and outstanding shares of Common Stock.
(b) If upon any liquidation, dissolution or winding up of the
Corporation, the assets distributable among the holders of shares of Preferred
Stock are insufficient to permit the payment in full to the holders of all such
shares of all preferential amounts payable to all such holders, then the entire
assets of the Corporation thus distributable shall be distributed ratably among
the holders of the shares of Preferred Stock in proportion to the respective
amounts that would be payable per share if such assets were sufficient to permit
payment in full.
(c) For purposes of this Section IV, a distribution of assets in
any liquidation, dissolution or winding up shall not include (i) any
consolidation or merger of the Corporation with or into any other corporation,
(ii) any liquidation, dissolution, winding up or reorganization of the
Corporation immediately followed by reincorporation of another corporation or
(iii) a sale or other disposition of all or substantially all of the
Corporation's assets to another corporation; PROVIDED, HOWEVER, that, in each
case, effective provision is made in the certificate of incorporation of the
resulting and surviving corporation or otherwise for the protection of the
rights of the holders of shares of Preferred Stock and that the holders of a
majority of the Preferred Stock then outstanding, voting as a class, shall have
given their approval.
(d) After the payment of the full preferential amounts provided
for herein to the holders of shares of Preferred Stock, such holders shall be
entitled to no other or further participation in the distribution of the assets
of the Corporation.
V. REDEMPTION OF PREFERRED STOCK.
(a) OPTIONAL REDEMPTION. At any time and from time to time after
the third anniversary of the closing of the purchase by the Corporation of all
of the common stock of LPC
4
5
(the "Closing"), the Corporation shall have the option, on a pro rata basis, to
(unless otherwise prevented by law) redeem all, or any portion of, the Preferred
Stock in accordance with Section V(c) and upon 30 days prior written notice of
the Corporation's intention to exercise the redemption option to the holders of
shares of Preferred Stock, at a redemption price equal to the Stated Value for
each such share of the Preferred Stock then outstanding, plus an amount equal to
all accrued and unpaid Preferred Dividends and interest thereon, if any, on such
shares of Preferred Stock as of the date such redemption is exercised.
(b) MANDATORY REDEMPTION. At any time after the fifth anniversary
of the Closing, at the request of the holders of all of the Preferred Stock, the
Corporation must redeem, within 90 days after such notice is received, all of
the Preferred Stock in accordance with Section V(d), at a redemption price equal
to the Stated Value for each such share of the Preferred Stock then outstanding,
plus an amount equal to all accrued and unpaid Preferred Dividends and interest
thereon, if any, on such shares of Preferred Stock as of the date such
redemption is exercised. If the Corporation does not redeem all of the Preferred
Stock as provided in this Section V(b) within 90 days of notice duly served upon
the Corporation in accordance with Section V(d) by holders of a majority in
interest of the Preferred Stock, then the holders of the Preferred Stock, voting
together as a class, shall be entitled to elect such number of directors of the
Corporation as shall equal the minimum number required to equal a majority of
such Board of Directors. In order to effect such election, the Corporation will,
to the extent necessary, expand its Board of Directors to allow for such
additional members and will take all such additional actions as may be
reasonably necessary. Upon payment of the redemption price of the Preferred
Stock, the class vote as described herein shall expire and the holders of the
Preferred Stock shall cause the directors so elected to resign. The obligation
of the Corporation to redeem the Preferred Stock pursuant to this Section V(b)
shall be secured by a pledge of all of the capital stock of LPC, as evidenced by
that certain Pledge Agreement, dated January 9, 1997.
(c) OPTIONAL REDEMPTION PROCEDURE. Notice of any Preferred Stock
redemption date pursuant to Section V(a) hereof shall be sent by the Corporation
by first-class certified mail, return receipt requested, postage prepaid, to the
holders of record of shares of Preferred Stock at their respective addresses as
the same shall appear on the books of the Corporation at its principal corporate
office. At any time on or after any Preferred Stock redemption date, the holders
of record of shares of Preferred Stock to be redeemed on such Preferred Stock
redemption date in accordance with this Section V shall be entitled to receive
the applicable redemption price upon actual delivery to the
5
6
Corporation or its agents of the certificates representing the shares to be
redeemed or delivery of an affidavit, in form reasonably acceptable to the
Corporation, that such certificates have been lost or destroyed.
(d) MANDATORY REDEMPTION PROCEDURE. If the Corporation receives an
election from the holders of the Preferred Stock pursuant to Section V(b)
hereof, notice of the Preferred Stock redemption date (which shall be on or
before the date 90 days after notice to the Corporation) shall be sent by the
Corporation by first-class certified mail, return receipt requested, postage
prepaid, to the holders of record of shares of Preferred Stock at their
respective addresses as the same shall appear on the books of the Corporation.
At any time on or after any Preferred Stock redemption date, the holders of
record of shares of Preferred Stock to be redeemed on such Preferred Stock
redemption date in accordance with this Section V shall be entitled to receive
the applicable redemption price upon actual delivery to the Corporation or its
agents of the certificates representing the shares to be redeemed.
VI. VOTING RIGHTS.
(a) Except as hereinafter set forth, the holders of Preferred
Stock shall be entitled to vote together with the holders of the Common Stock on
all matters submitted to the holders of the Common Stock. Each share of
Preferred Stock shall be entitled to 4.17 votes.
(b) The holders of record of the Preferred Stock, voting as a
class, shall be entitled to elect two (2) directors of the Corporation's Board
of Directors at any time that any of the Preferred Stock is outstanding.
(c) The holders of the Preferred Stock shall be entitled to vote
as a class with respect to any action of the Corporation adversely affecting the
Preferred Stock, its rights and preferences.
VII. CONVERSION OF PREFERRED STOCK.
(a) Any holder of the Preferred Stock shall have the right at such
holders' option, at any one time during the period beginning immediately after
the first anniversary of the Closing and ending on the third anniversary of the
Closing, to convert all of such holder's shares of Preferred Stock into (i) such
whole number of shares of Common Stock equal to the product of the Stated Value
and the number of such holder's shares of Preferred Stock, divided by the
average closing sale price (determined as provided in Section VII(e)) for the
Common Stock for the 20 trading days immediately prior to the date written
notice of the holder's intention to exercise the conversion option is given (the
"Conversion
6
7
Rate"); PROVIDED, HOWEVER, that in no case shall the number of shares of Common
Stock into which each share of Preferred Stock may be converted be less than
five or greater than 25 or (ii) such whole number of shares of common stock, par
value $1.00 per share, of Parker Reorder (the "Parker Common Stock") equal to
9.80% of the outstanding shares of Parker Common Stock as calculated immediately
after such conversion.
(b) Before any holder of shares of Preferred Stock shall be
entitled to convert the same into shares of Common Stock, such holder shall give
(a) 10 days written notice in the case of exercising the conversion rights set
forth in Section VII(a)(i) (which notice shall not be given later than 10 days
prior to the end of the third anniversary of the Closing) or (b) 30 days written
notice in the case of exercising the conversion rights set forth in Section
VII(a)(ii) to the Corporation at its principal corporate office of the election
to convert the same and shall state therein the name or names in which the
certificates for shares of Common Stock are to be issued. After the expiration
of the applicable notice period, the holder of shares of Preferred Stock shall
surrender the certificates therefor, duly endorsed, at the office of the
Corporation or of any transfer agent for the Preferred Stock. The Corporation
shall, as soon as practicable thereafter, issue and deliver at such office to
such holder of Preferred Stock, or to the nominee or nominees of such holder,
certificates for the number of shares of Common Stock or Parker Common Stock to
which such holders shall be entitled as aforesaid. 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 Stock to be converted, and the
person or persons entitled to receive the shares of Common Stock or Parker
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder or holders of such shares of Common Stock or Parker Common
Stock as of such date.
(c) The Corporation shall not be required to issue fractions of
shares of Common Stock upon conversion of the Preferred Stock. If any fractions
of a share would, but for this Section, be issuable upon any conversion of
Preferred Stock, in lieu of such fractional share, the Company shall pay to the
holder, in cash, an amount equal to the same fraction of the price per share of
Common Stock as determined in Section VII(a)(i). Notwithstanding the foregoing,
Parker Reorder may issue fractions of shares of Parker Common Stock upon
conversion of the Preferred Stock.
(d) The Corporation and Parker Reorder shall reserve and shall at
all times have reserved out of each of their respective authorized but unissued
shares of Common Stock sufficient shares of Common Stock to permit the
conversion
7
8
of the then outstanding shares of the Preferred Stock pursuant to this Section
VII. All shares of Common Stock or shares of Parker Common Stock which may be
issued upon conversion of shares of the Preferred Stock pursuant to this Section
VII shall be validly issued, fully paid and nonassessable.
(e) The closing price for each day shall be the last reported sale
price or, in case no such reported sale takes place on such date, the average of
the reported closing bid prices for ten consecutive trading days ending the last
trading day before the day in question, on the principal national securities
exchange on which the Common Stock is listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, the closing
sale price of Common Stock, or in case no reported sale takes place, the average
of the daily closing bid and asked prices, for ten consecutive trading days
ending the last trading day before the day in question, on the Nasdaq SmallCap
Market ("NASDAQ"), or if Common Stock is not quoted on NASDAQ, the OTC
Electronic Bulletin Board or any comparable system, the closing sale price or,
in case no reported sale takes place, the average of the closing bid and asked
prices, as furnished by any two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Corporation for that
purpose. If Common Stock is not quoted on NASDAQ, the OTC Electronic Bulletin
Board or any comparable system, the Board of Directors shall in good faith
determine the current market price on such reasonable basis as it reasonably
considers appropriate.
(f) If any of the following shall occur: (i) any reclassification,
stock split or change of outstanding shares of Common Stock issuable upon
conversion of shares of Preferred Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), or (ii) any consolidation or merger to
which the Corporation is a party other than a merger in which the Corporation is
the continuing corporation and which does not result in any reclassification or
stock split of, or change (other than a change in name, or par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination) in, outstanding shares of Common Stock, then in
addition to all of the rights granted to the holders of Preferred Stock as
designated herein, the Corporation, or such successor or purchasing corporation,
as the case may be, shall, as a condition precedent to such reclassification,
stock split, change, consolidation or merger, provide in its certificate of
incorporation or other charter document that each share of Preferred Stock shall
have rights which shall be as nearly equivalent as may be practicable to the
rights provided for in this Section VII. If, in the case of any such
8
9
reclassification, stock split, change, consolidation merger, the stock or other
securities and property (including cash) receivable thereupon by a holder of
Common Stock includes shares of capital stock or other securities and property
of a corporation other than the successor purchasing corporation, as the case
may be, in such reclassification, stock split, change, consolidation or merger,
then the certificate of incorporation or other charter document of such other
corporation shall contain such additional provisions to protect the interests of
the holders of shares of the Preferred Stock as the Board of Directors shall
reasonably consider necessary by reason of the foregoing. The provision of this
Section VII(f) shall similarly apply to successive consolidations, mergers,
sales or conveyances.
(g) The Corporation will not, by amendment of its Certificate of
Incorporation, as amended, or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, 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 VII
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.
VIII. NOTICES OF RECORD DATE. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, the Corporation shall mail to each
holder of Preferred Stock, at least twenty (20) days prior to the date specified
therein, a notice specifying the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right.
IX. RESTRICTION OF TRANSFERABILITY. The shares of Preferred Stock may
not be sold, assigned or transferred except in accordance with the provisions of
Sections V and VII.
X. OTHER. The Corporation and its affiliates may not purchase shares of
Preferred Stock except ratably from all holders thereof.
9
10
PREFERENCE STOCK:
Section 1. Designation, Amount and Par Value. The series of Preference
Stock shall be designated as "Series A Preference Stock" (the "Series A
Preference Stock"), and the number of shares so designated shall be 100,000. The
par value of each share of Preference Stock shall be $.01. Such number of shares
may be increased or decreased by resolution of the Board of Directors; provided,
that no decrease shall reduce the number of shares of Series A Preference Stock
to a number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preference Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preference Stock (or any similar stock) ranking prior and superior to
the Series A Preference Stock with respect to dividends, the holders of shares
of Series A Preference Stock, in preference to the holders of Common Stock, par
value $.01 per share (the "Common Stock"), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A
Preference Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preference Stock. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to which
holders of shares of Series A Preference Stock were entitled immediately prior
to such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
10
11
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Preference Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Preference Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preference Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preference Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preference Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preference
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preference
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preference Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or
11
12
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series A Preference
Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate
of Designations creating a series of Preference Stock or any similar stock, or
by law, the holders of shares of Series A Preference Stock and the holders of
shares of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) Except as set forth in the Certificate of Incorporation or
herein, or as otherwise provided by law, holders of Series A Preference Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
Section 4. Reacquired Shares. Any shares of Series A Preference Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preference Stock and may be reissued as part of a new series of Preference Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preference Stock or any similar stock or as otherwise
required by law.
Section 5. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preference Stock unless, prior thereto, the holders of shares of Series A
Preference Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preference Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or
12
13
(2) to the holders of shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preference Stock, except distributions made ratably on the Series A Preference
Stock and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Series A
Preference Stock were entitled immediately prior to such event under the proviso
in clause (1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 6. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preference Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preference Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. No Redemption. The shares of Series A Preference Stock shall
not be redeemable.
13
14
Section 8. Rank. The Series A Preference Stock shall be of equal rank
in respect of the preference as to dividends and to payments upon the
liquidation, dissolution or winding up, whether voluntary or involuntary, of the
Corporation, with all shares of Preference Stock of all series.
Section 9. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preference
Stock so as to affect them adversely without the affirmative vote of the holders
of at least two-thirds of the outstanding shares of Series A Preference Stock,
voting together as a single class.
6. The Secretary of State is designated as agent of the corporation
upon whom process against it may be served. The post office address to which the
Secretary of State shall mail a copy of any process against the corporation
served upon him is:
The Corporation
218 Rockaway Turnpike, Suite 707
Cedarhurst, New York 11516
7. The directors shall be divided into three clases, each with, as
nearly as possible, one-third of the members of the Board of Directors, and
designated as Class I, Class II and Class III. Class I directors shall be
initially elected at the 1998 Annual Meeting of Shareholders for a term expiring
at the 1999 Annual Meeting of Shareholders; Class II directors shall be
initially elected at the 1998 Annual Meeting of Shareholders for a term expiring
at the 2000 Annual Meeting of Shareholders; Class III directors shall be
initially elected at the 1998 Annual Meeting of Shareholders for a term expiring
at the 2001 Annual Meeting of Shareholders. At each succeeding annual meeting of
shareholders of the Corporation, the successors of the class of directors whose
term expires at that meeting shall be elected for a term expiring at the annual
meeting of shareholders held in the third year following the year of their
election, and until their successors are elected and qualified. Notwithstanding
the foregoing, in the event that the Board of Directors does not nominate a
director for election by the shareholders at an annual meeting of shareholders,
the Board of Directors shall be entitled to appoint a director after such annual
meeting for a term that expires at the next succeeding annual meeting of
shareholders and until such director's successor is elected and qualified. At
such succeeding annual meeting, the shareholders shall elect a director for a
two-year term that expires at the annual meeting of shareholders held in the
second year following the year of such director's election by the shareholders,
and until such director's successor is elected and qualified. Thereafter, the
directors shall continue to be elected in accordance with the election schedule
set forth above.
14