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EXHIBIT 3.1
ARTICLES OF AMENDMENT
OF
ENVOY CORPORATION
To the Secretary of State of the State of Tennessee:
Pursuant to the provisions of Section 48-16-102 of the Tennessee Business
Corporation Act and the powers expressly delegated to the Board of Directors by
Article 5 of the undersigned corporation's Amended and Restated Charter, as
amended (the "Charter"), the undersigned corporation submits these Articles of
Amendment to its Charter for the purposes of establishing and designating a
series of shares out of the 12,000,000 authorized shares of Preferred Stock, no
par value (the "Preferred Stock"), and fixing and determining the relative
rights and preferences thereof.
FIRST. The name of the corporation is Envoy Corporation (the
"Corporation").
SECOND. Article 5 of the Charter is hereby amended by deleting the first
paragraph of such Article in its entirety, and replacing it with the paragraph
set forth below, by designating current Paragraph 2 of Article 5, Section A as
Paragraph 3 and by adding the new Paragraph 2 of Article 5, Section A, which
shall read in its entirety as set forth below:
"5. The Corporation is authorized to issue two classes of stock in the
following number of shares: (i) 48,000,000 shares of Common Stock, no par value
(the "Common Stock") and (ii) 12,000,00 shares of Preferred Stock, no par value
(the "Preferred Stock") of which 4,800,000 shares are designated as Series A
Preferred Stock and 3,730,233 shares are designated as Series B Convertible
Preferred Stock.
***
A. Preferred Stock
***
2. Series B Preferred Stock.
(a) Designation. There shall be a series of Preferred Stock to be known and
designated as Series B Convertible Preferred Stock (the "Series B Convertible
Preferred Stock") and the number of shares constituting such series shall be
3,730,233.
(b) Voting Rights.
(i) Each share of Series B Convertible Preferred Stock shall entitle the
holder thereof to (x) vote together with the holders of the shares of Common
Stock of the
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Corporation on all matters submitted to a vote of the holders of the shares of
Common Stock of the Corporation and (y) have the number of votes per share as
such holder would have upon conversion of the Series B Convertible Preferred
Stock to Common Stock as provided in paragraph (A)(2)(e)(iv) hereof.
(ii) The Corporation shall not, without the affirmative vote or consent of
the holders of at least a majority of the number of shares of Series B
Convertible Preferred Stock at the time outstanding, voting or consenting (as
the case may be) separately as a class, given in person or by proxy:
(x) create, issue or authorize the creation or issuance of any additional
class or series of stock ranking senior to or on parity with the Series B
Convertible Preferred Stock as to the distribution of assets on the liquidation,
dissolution or winding up of the Corporation, or increase the authorized amount
of Series B Convertible Preferred Stock or the authorized amount of any
additional class or series of shares of stock unless the same ranks junior to
the Series B Preferred Stock as to the distribution of assets on the
liquidation, dissolution or winding up on the Corporation, or create, issue or
authorize the creation or issuance of any obligation or security convertible
into shares of Series B Convertible Preferred Stock or into shares of any other
class or series of stock unless the same ranks junior to the Series B Preferred
Stock as to the distribution of assets on the liquidation, dissolution or
winding up of the Corporation, whether any such creation, issuance,
authorization or increase shall be by means of amendment to the Corporation's
Amended and Restated Charter or by merger, consolidation or otherwise; or
(y) alter or change any of the provisions hereof so as adversely to affect
the preferences, special rights or powers given to the Series B Convertible
Preferred Stock.
(iii) If General Atlantic Partners 25, L.P., GAP Coinvestment Partners,
L.P. and any affiliate (as defined in Rule 12b-2 under the Securities Exchange
Act of 1934) thereof own in the aggregate (a) at least a majority of the
outstanding shares of Series B Convertible Preferred Stock and (b) shares of
Common Stock and/or Series B Convertible Preferred Stock or other securities of
the Company convertible into or exchangeable for shares of voting capital stock
of the Company that represent (after giving effect to any adjustments) at least
5% of the total number of shares of Common Stock outstanding on an as converted
basis, the holders of the Series B Convertible Preferred Stock, voting as a
separate series, shall be entitled to elect one director of the Corporation,
which directorship shall be apportioned among the classes of board of directors
by the Board of Directors of the Corporation. The Series B Convertible Preferred
Stock shall vote together with all other classes and series of stock of the
Corporation as a single class with respect to the election of all of the other
directors of the Corporation; provided, however, that if the conditions
specified in the first sentence of this
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paragraph (A)(2)(b)(iii) necessary for the holders of the Series B Convertible
Preferred Stock to have a separate series vote for one director are not
satisfied, the Series B Convertible Preferred Stock shall vote together with all
other classes and series of stock of the Corporation as a single class with
respect to the election of all of the directors of the Corporation. At any
meeting (or in a written consent in lieu thereof) held for the purpose of
electing directors, the presence in person or by proxy (or the written consent)
of the holders of a majority of the shares of Series B Convertible Preferred
Stock then outstanding shall constitute a quorum of the Series B Convertible
Preferred Stock for the election of the director to be elected solely by the
holders of the Series B Convertible Preferred Stock. A vacancy in the
directorship elected by the holders of the Series B Convertible Preferred Stock
shall be filled only by vote or written consent of the holders of the Series B
Convertible Preferred Stock.
(c) Dividends. The holders of Series B Convertible Preferred Stock shall be
entitled to receive cash dividends out of funds legally available therefor, if,
when and as cash dividends are declared by the Board of Directors and paid out
of funds legally available therefor with respect to the Common Stock, equal to
an amount per share that would be received per share of Common Stock, as if the
shares of the Series B Convertible Preferred Stock held by the holder were
converted to Common Stock as provided in paragraph (A)(2)(e)(iv) hereof, on the
record date for such dividend.
(d) Liquidation.
(i) In the event of the voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, before any distribution or payment is made to
the holders of stock ranking on liquidation junior to the Series B Convertible
Preferred Stock, and after payment in full of all amounts due and owing to
creditors and holders of superior rights of any series or class of preferred
stock, if any, the holders of Series B Convertible Preferred Stock shall first
be entitled, before any distribution is made upon any shares of Common Stock of
the Corporation, to receive a preferential payment from the assets of the
Corporation of cash of property to the extent of funds legally available
therefor) equal to $10.75 per share (the "Series B Preference Amount") of Series
B Convertible Preferred Stock plus, in the case of each share, an amount equal
to any dividends declared but unpaid thereon (such amount payable with respect
to one share of Series B Convertible Preferred Stock being sometimes referred to
as the "Series B Liquidation Payment" and with respect to all shares of Series B
Convertible Preferred Stock being sometimes referred to as the "Series B
Liquidation Payments"). If upon such liquidation, dissolution or winding-up of
the Corporation, whether voluntary or involuntary, the assets to be distributed
among the holders of Series B Convertible Preferred Stock shall be insufficient
to permit payment to the holders of Series B Convertible Preferred Stock of the
Series B Liquidation Payments, then the entire assets of the Corporation to be
so distributed shall be distributed ratably among the holders of Series B
Convertible Preferred Stock.
(ii) Upon any such liquidation, dissolution or winding-up of the
Corporation, after the holders of Series B Convertible Preferred Stock shall
have been paid the
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Series B Liquidation Payments in full and the payment of any other distribution
that may be required with respect to any series of Preferred Stock that may from
time to time come into existence ranking on a parity with or senior to the
Series B Convertible Preferred Stock, the remaining net assets of the
Corporation shall be distributed to the holders of stock ranking on liquidation
junior to the Series B Convertible Preferred Stock. For purposes hereof, the
Common Stock shall rank on liquidation junior to the Series B Convertible
Preferred Stock. Written notice of such liquidation, dissolution or winding-up,
stating a payment date and, to the extent known, the amount of the Series B
Liquidation Payments and the place where said Series B Liquidation Payments
shall be payable, shall be given by first class mail (postage prepaid), by
telecopy, by overnight courier, or by telex, not less than ten (10) calendar
days prior to the payment date stated therein, to the holders of record of the
Series B Convertible Preferred Stock, such notice to be addressed to each such
holder at the address shown on the stock transfer records of the Corporation.
(iii) For the purposes of this paragraph (A)(2)9d), (x) the voluntary sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Corporation or (y)(A) the merger or consolidation of the Corporation into or
with any other corporation or (B) the merger of any other corporation into or
with the Corporation, in each case if the stockholders of the Corporation prior
to such merger or consolidation do not retain at least a majority of the voting
power of the surviving corporation, shall be deemed to be a liquidation,
dissolution or winding- up, voluntary or involuntary, of the affairs of the
Corporation. The Corporation will give not less than thirty (30) days' prior
written notice of the expected effective date of any such sale, conveyance,
exchange, transfer, merger or consolidation to the holders of Series B
Convertible Preferred Stock.
(iv) In case outstanding shares of Series B Convertible Preferred Stock
shall be subdivided (by stock split, stock dividend or otherwise) into a greater
number of shares of Series B Convertible Preferred Stock, the relevant Series B
Preferred Stock, the relevant Series B Preference Amount in effect immediately
prior to each such combination, shall, simultaneously with the effectiveness of
such combination, be proportionately increased.
(v) Whenever the distribution provided for in this Paragraph (d) shall be
payable in property other than cash, the value of such distribution shall be the
fair market value of such property as determined in good faith by the Board of
Directors of the Corporation.
(e) Conversion.
(i) At any time from the date of issuance of the shares of Series B
Convertible Preferred Stock (the "Initial Issuance Date"), shares of Series B
Convertible Preferred Stock may be converted, at the option of the holder
thereof, into shares of fully paid and nonassessable Common Stock at the
Conversion Rate (as hereinafter defined). The option to convert shares of the
Series B Convertible Preferred Stock may be exercised by surrendering to
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the Corporation or any transfer agent for the Series B Convertible Preferred
Stock the certificate or certificates for the shares of the Series B Convertible
Preferred Stock so to be converted, with the notice of conversion on such
certificate duly completed and executed. Shares of Series B Convertible
Preferred Stock shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such shares in the manner herein
prescribed for conversion and the person entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder of such Common Stock as of such date.
(ii) Upon the transfer by an original holder of the Series B Convertible
Preferred Stock to any person other than an affiliate thereof, such shares of
Series B convertible Preferred Stock shall be converted automatically into the
number of fully paid and nonassessable shares of Common Stock into which such
shares of Series B Convertible Preferred Stock are then convertible pursuant to
paragraph (A)(2)(e)(iv) on the date of such transfer without any further action
by the holder or transferee of such shares of Series B Convertible Preferred
Stock and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent for the Series B
Convertible Preferred Stock. In order to receive a Common Stock certificate, the
transferee of the shares of Series B Convertible Stock shall surrender to the
Corporation or its transfer agent for the Series B Convertible Preferred Stock
the certificate or certificates representing such shares properly endorsed or
accompanied by proper instruments of assignment, duly executed by or on behalf
of the record holder of such certificate or certificates. Certificates
representing the shares of Common Stock into which such shares of Series B
Convertible Preferred Stock were so converted will be issued promptly after the
surrender of such certificate or certificates.
(iii) To the extent permitted by law, when shares of Series B Preferred
Stock are converted, all dividends declared and unpaid on the shares of Series B
Preferred Stock so converted to the date of conversion shall be immediately due
and payable and must accompany the shares of Common Stock issued upon such
conversion.
(iv) At any time from the Initial Issuance Date, any shares (or fractions
thereof) of Series B Convertible Preferred Stock may be converted at the option
of the holder thereof into such number of fully paid and nonassessable shares of
Common Stock as is equal to the product of the number of shares of Series B
Convertible Preferred Stock being so converted multiplied by the quotient of (x)
the Series B Preference Amount divided by (y) the conversion price of $10.75 per
share, subject to adjustment as provided in this paragraph (A)(2)(e) (the
"Conversion Rate"). However, if the Corporation shall at any time after the
issuance of the Series B Convertible Preferred Stock subdivide or combine the
outstanding shares of Common Stock or pay a dividend or distribution on the
outstanding shares of Common Stock payable in equity securities of the
Corporation, the Conversion Rule in effect immediately prior to the subdivision,
combination or record date for such dividend shall forthwith be proportionately
increased, in the case of combination, or proportionately decreased, in the case
of a subdivision or dividend payable in equity securities of the Corporation, so
that the holder of any share of Series B Convertible Preferred Stock thereafter
surrendered for conversion shall be entitled to
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receive the number of shares of Common Stock or other securities of the
Corporation that such holder would have owned or would have been entitled to
receive upon or by reason of any of the events described above, had such share
of Series B Convertible Preferred Stock been converted immediately prior to the
occurrence of such event.
(v) If there shall occur any merger, consolidation, capital reorganization
or any reclassification of the capital stock of the Corporation (other than a
merger or consolidation which is deemed to be a liquidation, dissolution or
winding up of the Corporation pursuant to paragraph (A)(2)(d)(iii)), then, as a
condition of such reorganization or reclassification, each holder of Series B
Convertible Preferred Stock shall thereafter have the right to receive upon
conversion, in lieu of the shares of Common Stock immediately heretofore
receivable upon the conversion of Series B Convertible Preferred Stock, the
number of shares of stock, other securities or assets as may be issued or
payable with respect to or in exchange for the number of shares of Common Stock
immediately theretofore receivable upon the conversion of Series B Convertible
Preferred Stock had such reorganization or reclassification not taken place;
and, in any such case, appropriate adjustment (as determined by the Board of
Directors) shall be made in the application of the provisions herein set forth
with respect to the rights and interest thereafter of the holders of the Series
B Convertible Preferred Stock, to the extent that the provisions set forth
herein (including provisions with respect to changes in and other adjustments of
the Conversion Rate) shall thereafter be applicable, as nearly as reasonably may
be, in relation to any stock, other securities or assets thereafter issuable or
payable upon the conversion of the Series B Convertible Preferred Stock.
(vi) No fractional shares of Common Stock are to be issued upon a
conversion of Series B Convertible Preferred Stock into shares of Common Stock,
but in lieu of delivering a fractional share, the Corporation shall pay to the
holder surrendering the Series B Preferred Stock for conversion a cash
adjustment in respect of any fraction of a share which would otherwise be
issuable in an amount equal to the same fraction of the per share market price
of the Common Stock on the date of exercise as determined in good faith by the
Corporation. If the number of shares of Series B Convertible Preferred Stock
represented by the certificate or certificates surrendered pursuant to paragraph
(A)(2)(e)(i) hereof exceeds the number of shares converted, the Corporation
shall, upon such conversion, execute and deliver to the holder, at the expense
of the Corporation, a new certificate or certificates for the number of shares
(or fraction thereof) of Series B Convertible Preferred Stock represented by the
certificate or certificates surrendered which are not to be converted.
(vii) The Corporation shall at all times reserve and keep available out of
its authorized Common Stock, solely for the purpose of issuance upon conversion
of the Series B Convertible Preferred Stock as herein provided, such number of
shares of Common Stock as shall then be issuable upon the conversion of all
outstanding Series B Convertible Preferred Stock, and shall take all action
required to increase the authorized number of shares of Common Stock if at any
time there shall be insufficient authorized but unissued shares of Common Stock
to permit such reservation or to permit conversion of all outstanding shares of
Series B
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Convertible Preferred Stock. All shares of Common Stock which shall be so
issuable shall be duly authorized and, when issued upon conversion of the Series
B Convertible Preferred Stock, shall be validly issued, fully paid and
nonassessable.
(viii) The issuance of certificates for shares of Common Stock upon the
conversion of any shares of the Series B Convertible Preferred Stock shall be
made without charge to the converting holder of the Series B Convertible
Preferred Stock for any issuance tax in respect thereof, and such certificates
shall be issued in the name of, or in such names as may be directed by, the
holder of the Series B Convertible Preferred Stock; provided, however, that the
Corporation shall not be required to pay any taxes or other governmental charges
which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate in a name other than that of the record holder
of the Series B Convertible Preferred Stock, and the Corporation shall not be
required to issue or deliver such certificates unless or until the person or
persons requesting the issuance thereof shall have paid to the Corporation the
amount of such tax or other governmental charge or shall have established to the
satisfaction of the Corporation that such tax or other governmental charge has
been paid or provided for.
(ix) Shares of Series B Convertible Preferred Stock which are converted
into shares of Common Stock as provided herein shall be retired and canceled
promptly after the acquisition thereof. All such shares shall, upon their
cancellation, become authorized but unissued shares of Preferred Stock and may
be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
(x) Upon any adjustment of the Conversion Rate, the Corporation shall
deliver to each registered holder of Series B Convertible Preferred Stock at
least ten days prior to effecting such adjustment a certificate, signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Corporation, setting forth the
event requiring such adjustment, the method upon which such adjustment was
calculated and the increased or decreased Conversion Rate then in effect
following such adjustment. Any notice pursuant to this paragraph (A)(2)(e)(x)
shall be given by personal delivery, overnight mail, certified or registered
mail, return receipt requested, or telecopier, addressed to each holder of
shares of Series B Convertible Preferred Stock at the address of such holder as
shown on the books of the Corporation.
(xi) In case at any time or from time to time:
(w) the Corporation shall declare a dividend (or any other distribution) on
its shares of Common Stock payable in cash or securities;
(x) the Corporation shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any shares of
stock of any class or of any other rights or warrants;
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(y) there shall be any capital reorganization or reclassification of the
capital stock of the Corporation, or any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of the
Corporation is required, or any sale or other disposition of all or
substantially all of the assets of the Corporation; or
(z) there shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Corporation;
then, in each case, the Corporation shall mail to each holder of shares of
Series B Convertible Preferred Stock at such holder's address as it appears on
the transfer books of the Corporation, as promptly as possible but in any event
at least ten (10) days prior to the applicable date hereinafter specified, a
notice stating (A) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights or warrants or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (B) the date
on which such capital reorganization, reclassification, consolidation, merger,
sale, conveyance, dissolution, liquidation or winding up is expected to become
effective. Such notice also shall specify the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
Common Stock for shares of stock, other securities, assets, or cash deliverable
upon such reorganization, reclassification, consolidation, merger, sale,
conveyance, dissolution, liquidation or winding up, as the case may be.
(f) Redemption The shares of Series B Convertible Preferred Stock shall not
be redeemable by the Corporation or otherwise prior to January 1, 1999.
Thereafter, upon thirty (30) days' prior written notice to the holder(s) of
Series B Convertible Preferred Stock, if the average of the closing or the
average of the closing prices and asked price of the Common Stock as reported on
The Nasdaq National Market or such other exchange or market on which the
Corporation's Common Stock is then traded for the sixty (60) consecutive trading
days immediately preceding the date upon which such written notice is give to
the holder(s) of the Series B Convertible Preferred Stock is not less than
$21.50 per share (as appropriately adjusted to reflect the occurrence of any
event specified in paragraph (A)(2)(e)(iv)), the Corporation shall have the
option to call the shares of Series B Convertible Preferred Stock and the
holders thereof shall be obligated to sell the shares to the Corporation upon
the exercise of such call option at a price per share of Series B Convertible
Preferred Stock equal to $10.75; provided, however, that notwithstanding the
foregoing, the holders of the Series B Convertible Preferred Stock shall, prior
to the expiration of the fifth day before termination of the 30-day notice
period, have the right to covert the Series B Convertible Preferred Stock
pursuant to paragraph (e) hereof.
(g) Stock Purchase Rights. If any stock purchase rights have been or are
hereafter issued to the holders of shares of Common Stock pursuant to the
stockholders rights agreement, dated June 1, 1995, of the Corporation, or any
successor plan, the holders of record of shares of Series B Convertible
Preferred Stock shall be entitled to receive such stock purchase rights as if
the shares of Series B Convertible Preferred Stock held by the holder thereof
had been
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converted (subject to any adjustments provided in paragraph (A)(2)(e)(iv)) into
Common Stock as provided in paragraph (A)(2)(e)(iv) hereof, and the Corporation
shall promptly amend or supplement such rights agreement so that such rights
agreement applies to the Series B Convertible Preferred Stock as required by the
preceding sentence.
THIRD. This amendment was duly adopted on November 30, 1995 by the Board of
Directors without shareholder approval as such was not required.
FOURTH. This amendment, which will constitute an amendment to the Charter,
is to be effective when filed with the Secretary of State.
Dated: March 6, 1996.
ENVOY CORPORATION
By: /s/ Jim D. Kever
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Title: President and Co-Chief Executive Officer
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