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EXHIBIT 4
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF SERIES D MANDATORILY CONVERTIBLE PREFERRED STOCK
OF U.S. TECHNOLOGIES INC.
U.S. Technologies Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "CORPORATION"), by its
Co-Chief Executive Officer,
DOES HEREBY CERTIFY:
FIRST: That pursuant to authority expressly vested in the Board of
Directors of the Corporation by the provisions of its Restated Certificate of
Incorporation (the "CHARTER"), the Corporation's Board of Directors, duly
adopted by unanimous written consent on December 26th, 2000, the following
resolution providing for the designations and issuance of up to 2,000 shares of
Series D Mandatorily Convertible Preferred Stock, par value $0.02 per share:
RESOLVED, that this Board of Directors, pursuant to the authority
expressly vested in it by the provisions of the Corporation's Restated
Certificate of Incorporation and the General Corporation Law of the
State of Delaware, hereby authorizes the issuance from time to time of
a series of preferred stock, par value $0.02 per share, of the
Corporation and hereby fixes the designation, voting powers,
preferences and relative, participating , optional and other rights and
the qualifications, limitations or restrictions thereof, in addition to
those set forth in said Restated Certificate of Incorporation.
1. DESIGNATION AND AMOUNT.
This series of preferred stock shall be designated as "Series D
Mandatorily Convertible Preferred Stock" and shall have a par value of $0.02 per
share (the "Series D Preferred"). The number of authorized shares constituting
the Series D Preferred shall be 2,000 shares. Shares of the Series D Preferred
shall have a stated value of $1,000 per share (the "STATED VALUE"). The
Corporation may issue fractional shares of the Series D Preferred.
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2. LIQUIDATION.
In the event of any bankruptcy, liquidation, dissolution or winding up
of the Corporation, either voluntary or involuntary (a "LIQUIDATION"), each
holder of the Series D Preferred (the "PREFERRED D HOLDER") at the time thereof
shall be entitled to receive in exchange for each share of Series D Preferred
held by such holder the amount to be paid or distributed per share of the
Corporation's common stock, par value $0.02 per share (the "COMMON STOCK"),
multiplied by the number of shares of Common Stock into which each share of
Series D Preferred is then convertible pursuant to Section 4(b) hereof.
3. VOTING RIGHTS.
Except as otherwise required by law, each Preferred D Holder shall be
entitled to vote on all matters together with the holders of shares of the
Common Stock (including, for purposes of this Section 3, any other securities of
the Corporation that are entitled to vote with the holders of shares of Common
Stock) and not as a separate class, at any annual or special meeting of
stockholders of the Corporation, and may act by written consent in the same
manner as the Common Stock, in either case upon the following basis: each
Preferred D Holder shall be entitled to such number of votes as shall be equal
to the whole number of shares of Common Stock into which such holder's aggregate
number of shares of Series D Preferred are convertible (pursuant to Section 4
hereof) immediately after the close of business on the record date fixed for
such meeting or the effective date of such written consent. Notwithstanding the
foregoing, the Preferred D Holders will not be entitled to vote or take action
on the approval by the holders of Common Stock of an amendment to the
Corporation's Charter ("CHARTER AMENDMENT") to increase the number of shares of
Common Stock the Corporation is authorized to issue to an amount sufficient to
permit the conversion to Common Stock of all of the Corporation's
then-outstanding shares of all of its authorized and designated series of
convertible preferred stock, which includes the Series D Preferred, and any
other then-outstanding securities and options or similar rights issued by the
Corporation, which are convertible into or otherwise permit the holder thereof
to purchase or otherwise receive shares of Common Stock.
4. MANDATORY CONVERSION.
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(A) MANDATORY CONVERSION. By virtue of the filing with and
acceptance of the Charter Amendment by the Secretary of State of the State of
Delaware and without any action on the part of the Preferred D Holders, as of
the date the Charter Amendment is filed with and accepted by the Secretary of
State of the State of Delaware (the "CONVERSION DATE"), all of the issued and
outstanding shares of the Series D Preferred shall be converted into fully-paid
and nonassessable shares of Common Stock. The number of shares of Common Stock
that each Preferred D Holder shall receive on the Conversion Date shall equal
the product obtained by multiplying the Conversion Rate then in effect
(determined as provided in Section 4(b)) by the number of shares of Series D
Preferred held by each Preferred D Holder.
(B) CONVERSION RATE. The conversion rate for conversion of each
share of the Series D Preferred (the "CONVERSION RATE") shall be the quotient
obtained by dividing the Stated Value by $1.00 (the "CONVERSION PRICE").
(C) PROCEDURES FOR MANDATORY CONVERSION.
(i) On the Conversion Date, the Corporation will mail to
each Preferred D Holder (A) a letter of transmittal, which shall specify the
Conversion Date and notify such holder that his, her or its shares of Series D
Preferred have been converted to Common Stock (the "CONVERSION NOTICE") and (B)
instructions, which shall specify the procedures for surrender of such holder's
certificates representing ownership of Series D Preferred ("PREFERRED
CERTIFICATES") in exchange for certificates representing ownership of Common
Stock ("COMMON STOCK CERTIFICATES"). Promptly after receipt of the Conversion
Notice, each Preferred D Holder shall surrender such holder's Preferred
Certificates, duly endorsed for transfer, at any time during normal business
hours, to the Corporation at its principal office or at such other office or
agency then maintained by it for such purpose and designated in the Conversion
Notice, accompanied by any instrument of transfer in form reasonably
satisfactory to the Corporation and to any conversion agent, duly executed by
the registered Preferred D Holder or by such holder's duly authorized attorney.
As promptly as practicable after the surrender for conversion of any Preferred
Certificates in the manner provided in the preceding sentence but in any event
within five (5) business days after receipt of the Preferred Certificates, the
Corporation will deliver or cause its transfer agent to deliver
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to the holder of such Preferred Certificates, Common Stock Certificates
representing the aggregate number of shares of Common Stock issuable upon such
conversion, issued in such name or names as such holder may direct. Such
conversion shall be deemed to have been made as of the Conversion Date, and all
rights of the Preferred D Holder, with respect to such holder's shares of Series
D Preferred, shall cease at such time and the person or persons in whose name or
names the Preferred Certificates are registered, or after delivery of the
Preferred Certificates for conversion pursuant hereto the person or persons in
whose name or names the Common Stock Certificates are to be issued, shall be
treated for all purposes as having become the record holder or holders thereof
at such time.
(ii) The Corporation shall not be required to issue
fractional shares of Common Stock upon conversion of shares of Series D
Preferred. At the Corporation's discretion, in the event the Corporation
determines not to issue fractional shares, then in lieu of any fractional shares
to which the Preferred D Holder would otherwise be entitled, the Corporation
shall pay cash equal to such fraction multiplied by the Current Market Price (as
defined below).
(iii) The issuance of Common Stock Certificates upon
conversion shall be made without charge for any issue, stamp or other similar
tax in respect of such issuance. However, if any such Common Stock Certificate
is to be issued in a name other than that of the holder of record of the shares
converted, the person or persons requesting the issuance thereof shall pay to
the Corporation the amount of any such tax which may be payable in respect of
any transfer involved in such issuance or shall establish, to the satisfaction
of the Corporation, that such tax has been paid or is not payable.
(iv) "CURRENT MARKET PRICE" means the average of the daily
Closing Prices per share of Common Stock for the fifteen (15) consecutive
trading days immediately prior to such date. The "Closing Price" per share of
Common Stock for each day shall be the last sale price, regular way, before 5:00
p.m., or in case no such sale takes place on such day, the average closing bid
and asked prices, regular way, in either case, as reported on the NASD OTC
Bulletin Board or any successor stock exchange or quotation system on which the
Common Stock is then primarily listed or traded. If on any such trading day or
days such
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securities are not quoted by any such organization, such trading day or days
shall be replaced for purposes of the foregoing calculation by the requisite
trading day or days preceding the commencement of such fifteen (15) day trading
day period on which such securities are so quoted.
(D) RESERVATION OF STOCK ISSUABLE UPON MANDATORY
CONVERSION. Until the Conversion Date, the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the conversion to
Common Stock of all of the outstanding shares of the Corporation's authorized
and designated series of convertible preferred stock, including the Series D
Preferred, and the other outstanding securities and options or similar rights
issued by the Corporation, which are convertible into or otherwise permit the
holder thereof to purchase or otherwise receive shares of Common Stock. The
Corporation shall take any such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose,
including, without limitation, approving the Charter Amendment and taking other
appropriate board action, submitting the Charter Amendment to the Corporation's
stockholders for their approval, recommending the Charter Amendment and any
other such increase to the Corporation's stockholders, holding shareholders
meetings, and soliciting votes and proxies in favor of the Charter Amendment and
any other such increase to obtain the requisite shareholder approval.
SECOND: That such determination of the designations, preferences and
the relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, relating to the Series D Preferred, was
duly made by the Corporation's Board of Directors pursuant to the provisions of
the Corporation's Charter, and in accordance with the provisions of Section 151
of the General Corporation Law of the State of Delaware, as amended.
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IN WITNESS WHEREOF, U.S. Technologies Inc. has caused this Certificate
of Designations to be executed this 26th day of December, 2000.
U.S. TECHNOLOGIES INC.
By: /s/ C. Gregory Earls
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C. Gregory Earls
Co-Chief Executive Officer
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