1
Exhibit 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
PROTECTION ONE, INC.
-------------------------------------------
Pursuant to Section 245 of the General
Corporation Law of the State of Delaware
-------------------------------------------
Protection One, Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
hereby certifies as follows:
1. The name of the Corporation is Protection One, Inc.
The name under which the Corporation originally was incorporated was P1
Acquisition Corporation.
2. The original Certificate of Incorporation of the
Corporation was filed with the Secretary of State of the State of Delaware on
June 21, 1991. The Certificate of Incorporation was amended and a Restated
Certificate of Incorporation was filed with the Secretary of State of the State
of Delaware on September 13, 1991. Such Restated Certificate of Incorporation
was amended and a second Restated Certificate of Incorporation was filed with
the Secretary of State of the State of Delaware on December 31, 1992. Such
Restated Certificate of Incorporation was amended and a third Restated
Certificate of Incorporation was filed with the Secretary of State of the State
of Delaware on October 20, 1993. Such Restated Certificate of Incorporation
was amended on November 18, 1992, and such Restated Certificate of
Incorporation as so amended was further amended and a fourth Restated
Certificate of Incorporation was filed with the Secretary of State of the State
of Delaware on November 1, 1993. Such Restated Certificate of Incorporation
was amended pursuant to (i) an Amendment to Restated Certificate of
Incorporation filed with the Secretary of State of the State of Delaware on
June 30, 1994; and (ii) an Amendment to Restated Certificate of Incorporation
filed with the Secretary of State of the State of Delaware on August 23, 1994.
3. The text of the Restated Certificate of Incorporation
of the Corporation is hereby further restated and amended to read in full as
set forth in the Fifth Restated Certificate of Incorporation that is attached
hereto as Attachment A and made a part hereof (the "Fifth Restated Certificate
of Incorporation").
4. The Fifth Restated Certificate of Incorporation was
proposed by the Board of Directors of the Corporation and was duly adopted by
its stockholders in the manner and by the vote prescribed by Section 242 of the
General Corporation Law of the State of Delaware.
5. The Fifth Restated Certificate of Incorporation was
duly adopted in accordance with the provisions of Section 245 of the General
Corporation Law of the State of Delaware.
2
IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be affixed hereto and this certificate to be signed by James M.
Mackenzie, Jr., its President and Chief Executive Officer and attested to by
John W. Hesse, its Secretary on this 23rd day of September, 1994.
PROTECTION ONE, INC.
By: JAMES M. MACKENZIE, JR.
-----------------------------------------
James M. Mackenzie, Jr., President
and Chief Executive Officer
Attest:
By: JOHN W. HESSE
------------------------------------
John W. Hesse, Secretary
3
ATTACHMENT A
------------
FIFTH RESTATED CERTIFICATE OF INCORPORATION
OF
PROTECTION ONE, INC.
-------------------------------------------
Pursuant to Section 245 of the General
Corporation Law of the State of Delaware
-------------------------------------------
FIRST: The name of the corporation is Protection One, Inc. (the
"Corporation").
SECOND: The address, including street, number, city and
county, of the registered office of the Corporation in the State of Delaware is
1209 Orange Street, City of Wilmington, County of New Castle 19801. The name
of the registered agent of the Corporation in the State of Delaware at such
address is The Corporation Trust Company.
THIRD: The purpose for which the Corporation is formed is to
engage in any lawful act or activity for which a corporation may be organized
under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of all classes of stock
that the Corporation shall have the authority to issue is 29,000,000, of which
24,000,000 shall be voting common stock, par value One Cent ($0.01) per share
("Common Stock"), and 5,000,0000 shall be preferred stock, par value Ten Cents
($.10) per share ("Preferred Stock").
The shares of Preferred Stock may be issued from time to time
in one or more series. The Board of Directors of the Corporation is hereby
authorized from time to time to designate each series, to establish the number
of shares to be included in such series, and to determine the rights,
preferences and privileges of the shares of each such series and the
qualifications, limitations or restrictions thereof, including but not limited
to the determination or alteration of the dividend rights, dividend rate,
conversion rights, voting powers and rights, rights and terms of redemption,
redemption price or prices, and the liquidation preference of any wholly
unissued series of shares of Preferred Stock, or any of them; and to increase
or decrease the number of shares of any series either prior to or subsequent to
the issue of the shares of such series, but not below the number of shares of
such series then outstanding. In case the number of shares of any series
should be so decreased, the shares constituting such decrease shall resume the
status which they had prior to the adoption of the resolution originally fixing
the number of shares of such series.
Section 1. Designation of Series F Stock.
There is hereby authorized and created a series of the
Preferred Stock, which shall be designated as the Series F Non-Voting
Cumulative Preferred Stock (the "Series F Stock")
4
and which shall consist of 9,670 shares and shall have the rights, preferences,
privileges and restrictions set forth in this Article FOURTH.
Section 2. Definitions.
For the purposes of the provisions hereof setting forth the
rights, preferences and privileges of the Series F Stock and the
qualifications, limitations or restrictions thereof, the following terms shall
have the respective meanings indicated below or as set forth in the indicated
section:
Accumulated Dividends - As to a particular date, all unpaid
dividends for all previous fiscal years of the Corporation, at the annual
amount set forth in Subsection 3(a), plus an amount equal to such annual
dividend amount multiplied by a fraction, the numerator of which is the number
of days elapsed in the Corporation's fiscal year to the particular date and the
denominator of which is 365.
Approved Transferee - Subsection 8(e).
Credit Agreement - shall mean that certain Credit Agreement
dated as of November 3, 1993 among the Corporation, Protection One Alarm
Monitoring, Inc., Protection One Alarm Services, Inc., the Lenders named
therein and Heller Financial, Inc., as Agent, as amended by that certain First
Amendment to Credit Agreement among the Corporation, Protection One Alarm
Monitoring, Inc., Protection One Alarm Services, Inc., Heller Financial, Inc.,
Continental Bank and Kansallis-Osake-Pankki, dated as of June 30, 1994, and as
further amended from time to time; and any credit agreement with respect to a
renewal, refunding or replacement thereof.
Current Series F Holder - shall mean PacifiCorp Financial
Services, Inc., or PacifiCorp Holdings, Inc. (or any successor to such
corporation by merger or any wholly owned first-tier subsidiary of such
corporation).
Direct or Indirect Significant Subsidiaries - shall mean any
direct or indirect subsidiary having 15% or more of the assets, sales or
earnings of the Corporation on a consolidated basis.
Independent Directors - Subsection 8(e)
Issue Date - The earliest date on which shares of Series F
Stock were issued.
Issue Price - For Series F Stock, $1,000 per share.
Junior Stock - Common Stock and shares of any other class or
series of capital stock ranking junior to the applicable series of Preferred
Stock with respect to both the payment of dividends and the distribution of
assets upon the liquidation, dissolution or winding up of the Corporation.
Mandatory Redemption Date - Subsection 5(b)
Mandatory Redemption Notice - Subsection 5(b)
2
5
Mandatory Redemption Price - Subsection 5(a)
Optional Redemption Date - Subsection 6(c)
Optional Redemption Notice - Subsection 6(c)
Optional Redemption Price - Subsection 6(a)
Parity Preferred Stock - Subsection 8(b)
Series F Default - Subsection 8(e)
Set Apart For Payment - The Corporation shall have deposited
with a bank or trust company located within the United States and having
capital and surplus of at least $200 million, in trust for the exclusive
benefit of the holders of Series F Stock, funds sufficient to pay the
Corporation's obligation as of the applicable time.
Special Redemption Date - Subsection 5(c)
Triggering Event - Subsection 4(g)
Section 3. Dividends and Distributions.
(a) Series F Stock Dividends. The holders of the then
outstanding shares of Series F Stock shall be entitled to receive on each
January 1, April 1, July 1, and October 1 commencing on April 1, 1993 (each, a
"Dividend Payment Date"), out of any funds legally available therefor, cash
dividends at the annual rate of $90 per share; provided, however, that (i) if
at any time the Corporation fails to pay a quarterly dividend on the applicable
Dividend Payment Date therefor, the annual dividend rate shall increase to $110
per share and dividends shall begin to accumulate on each share of Series F
Stock at such increased rate from the first day of the calendar quarter after
the Dividend Payment Date on which the failure to make such dividend payment
occurred until the date all unpaid dividend payments are paid in full, (ii) if
at any time the Corporation has a total of five unpaid quarterly dividend
payments outstanding, whether or not consecutive, the annual dividend rate
shall increase to $130 per share and dividends shall begin to accumulate on
each share of Series F Stock at such increased rate from the first day of the
calendar quarter after the Dividend Payment Date on which the fifth dividend is
missed until the Corporation has reduced the total number of past due quarterly
dividends below five, at which point the annual dividend rate will be reduced
to $110 or until the Corporation has paid all past due quarterly dividend
payments, at which point the annual dividend rate will be reduced to $90; (iii)
if at any time the Corporation has a total of seven unpaid quarterly dividends
outstanding, whether consecutive or not, the annual dividend rate shall
increase to $160 per share and dividends shall begin to accumulate on each such
share of Series F Stock at such increased rate from the first day of the
calendar quarter after the Dividend Payment Date on which the seventh dividend
is missed until the Corporation has reduced the total number of past due
quarterly dividend payments below seven, at which point the annual dividend
rate will be reduced to $130, or until the Corporation has reduced the total
number of past due quarterly dividend payments below five, at which point the
annual dividend rate will be reduced to $110, or until the Corporation has paid
all past due quarterly dividend payments, at which point the annual dividend
rate will be reduced to $90. Notwithstanding the foregoing, if the Corporation
3
6
fails to pay a quarterly dividend for any reason other than that the funds are
not legally available or that the payment would violate a restrictive covenant
or result in a default under the Credit Agreement, then the annual dividend
rate shall increase to $160 per share and dividends shall begin to accumulate
on each share of Series F Stock on the first day of the calendar quarter after
the Dividend Payment Date on which the failure to make such dividend payment
occurred and shall continue until all unpaid dividends are paid in full, at
which point the annual dividend rate shall be reduced to $90. If the
Corporation fails to redeem any shares of Series F Stock on any Mandatory
Redemption Date pursuant to Subsection 5(a) and (b) hereof or Special
Redemption Date pursuant to Subsection 5(d) hereof, then the annual dividend
rate shall increase to $160 per share and dividends shall begin to accumulate
on each share of Series F Stock at such increased rate from the 22nd calendar
day after such failure to redeem until the redemption payment is made in full.
Dividends on Series F Stock shall be cumulative and shall begin to accumulate
beginning on the Issue Date for Series F Stock whether or not earned or paid.
No dividends or other distributions (other than pro rata dividends or
distributions payable solely in Common Stock) shall be paid with respect to
shares of Junior Stock during any fiscal year of the Corporation until the full
amount of all Accumulated Dividends on all outstanding shares of Series F Stock
shall have been declared and Set Apart For Payment during that fiscal year.
(b) Restrictions on Distributions. No dividends or other
distributions (other than pro rata dividends or distributions payable solely in
Common Stock) shall be paid with respect to Junior Stock until all shares of
Series F Stock are fully redeemed pursuant to Sections 5 or 6 unless (i) an
amount equal to the Mandatory Redemption Price for all outstanding shares of
Series F Stock is first Set Apart For Payment, or (ii) the Corporation receives
the written consent of the holders of at least a majority of the then
outstanding shares of Series F Stock.
(c) Exclusions from Restrictions. The restrictions in
this Section 3 on distributions to Junior Stock shall not apply to repurchases
of up to 2,000,000 shares of Common Stock issued to the Corporation's officers,
provided that such repurchases are made upon termination of employment pursuant
to and at prices provided in agreements approved by the Corporation's Board of
Directors and entered into with such officers.
(d) Junior Stock. Subject to the limitations in
Subsections 3(a), 3(b), and 3(c) above, when and as dividends are declared
thereon, whether payable in cash, property or securities, the holders of Common
Stock will be entitled to share, ratably according to the number of shares of
Common Stock held by them, in such dividends.
(e) 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 give to each
holder of Series F Stock, at least 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. In no event shall the notice period
specified in this Subsection 3(e) be deemed to apply in the event of a taking
by the Corporation of a record of the holders of any class of securities for
the purposes of determining the holders thereof who are entitled to vote on any
matter.
4
7
Section 4. Liquidation Preference.
(a) Series F Stock. In the event of any liquidation,
dissolution or winding up of the Corporation, either voluntary or involuntary,
the holders of each share of Series F Stock shall be entitled to be paid out of
the assets of the Corporation available for distribution to its shareholders,
before any declaration and payment or Setting Apart For Payment of any amount
shall be made in respect of Junior Stock, an amount equal to the Issue Price
for each share of Series F Stock plus an amount equal to any Accumulated
Dividends on each such share of Series F Stock, whether or not declared. If,
upon liquidation, dissolution or winding up of the Corporation, the assets of
the Corporation available for distribution to its shareholders shall be
insufficient to pay the holders of Series F Stock the full preference to which
they are entitled as set forth above, then the holders of Series F Stock shall
share ratably in any distribution of assets.
(b) Junior Stock. After the payments or distributions
described in Subsection 4(a) above have been made, the remaining assets of the
Corporation available for distribution to its shareholders shall be distributed
among the holders of Junior Stock pro rata based upon the number of shares then
held by each of them.
(c) Merger, Etc., Not a Liquidation. A consolidation or
merger of the Corporation or any of its Direct or Indirect Significant
Subsidiaries with or into any other corporation (other than a wholly owned
subsidiary of the Corporation) or other entity or person in which the
Corporation or such subsidiary shall not survive, or a sale, conveyance or
disposition of all or substantially all of the assets of the Corporation or any
of its Direct or Indirect Significant Subsidiaries (other than such a sale to a
wholly owned subsidiary of the Corporation) or the effectuation of any
reorganization or any other transaction or series of related transactions in
which 50 percent or more of the voting power of the Corporation or any of its
Direct or Indirect Significant Subsidiaries is disposed of (each such event, a
"Triggering Event") shall not be deemed to be a liquidation, dissolution or
winding up within the meaning of this Section 4 and no such Triggering Event
shall impair the rights and preferences of the shares of Series F Stock.
Section 5. Mandatory Redemption.
(a) General Right. At any time after February 29, 2004,
any holder of shares of Series F Stock may require the Corporation to redeem
all of the outstanding shares of Series F Stock held by such holder. The
redemption price shall be 100% of the Issue Price plus Accumulated Dividends
for such series, whether or not earned or declared (the "Mandatory Redemption
Price").
(b) Notice and Procedure. At least 30 but not more than
60 days prior to the requested redemption date (the "Mandatory Redemption
Date"), written notice (the "Mandatory Redemption Notice") shall be given by
the holders of Series F Stock requesting redemption to the Corporation,
specifying the number of shares to be redeemed and the Mandatory Redemption
Date. If the funds of the Corporation legally available for redemption of
shares of Series F Stock on any Mandatory Redemption Date are insufficient to
redeem the total number of outstanding shares of such series of Series F Stock
requested to be redeemed, the holders of Series F Stock shall share ratably in
any funds legally available for redemption of such shares. At any time
thereafter when additional funds of the Corporation are legally available for
the
5
8
redemption of Series F Stock requested to be redeemed, such funds will be used,
at the end of the next succeeding fiscal quarter, to redeem the balance of such
shares, or such portion thereof for which funds are then legally available, on
the basis set forth above.
(c) Special Right. In addition to the redemption right
specified in Subsection 5(a) hereof, (i) if a Triggering Event occurs at any
time, any holder of shares of Series F Stock may require the Corporation to
redeem all of the outstanding shares of Series F Stock held by such holder at
the Mandatory Redemption Price provided, that if the holders of at least 75% of
the shares of Series F Stock then outstanding consent in writing, the
Corporation shall not be required to give written notice of any Triggering
Event required in Subsection 5(d) below and no holder of shares of Series F
stock shall have the right to require the Corporation to redeem his shares
pursuant to this subsection.
(d) Notice of Triggering Event and Procedure. The
Corporation shall not, directly or indirectly, consummate any Triggering Event
unless the Corporation shall have given not less than 20 nor more than 40 days'
written notice, prior to the date fixed for such Triggering Event, to each
holder of any shares of Series F Stock entitled to be redeemed pursuant to
Subsection 5(c) hereof, which notice shall set forth the terms and conditions
of such Triggering Event, the rights of such holder to require the Corporation
to redeem Series F Stock, and the applicable redemption date (the "Special
Redemption Date"), which shall be a date established by the Corporation and
shall be not less than 20 nor more than 40 days after the date of giving such
notice and, in any event, shall be on or prior to the date fixed for such
Triggering Event. During the 15-day period following the giving of such
notice, each holder of Series F Stock who wishes to have redeemed by the
Corporation all of the Series F Stock then held by such holder shall give
written notice to the Corporation setting forth the number of shares of Series
F Stock to be redeemed on the Special Redemption Date. The Corporation shall
redeem on the Special Redemption Date the shares of Series F Stock of each
holder electing such redemption in the number so elected at the Mandatory
Redemption Price.
(e) Limitations. In the event the Corporation does not
have funds legally available to effect fully any redemption required to be made
on the Special Redemption Date (or to deposit funds as contemplated by
Subsection 5(f) below with respect to any such redemption), the Corporation
shall not effect such Triggering Event without the advance written consent of
the holders of at least 75% of the then outstanding shares of Series F Stock.
(f) Deposit of Funds. On or prior to any Mandatory
Redemption Date or Special Redemption Date, the Corporation shall irrevocably
deposit with any bank or trust company with capital and surplus of at least
$200,000,000 and located in the United States the aggregate Mandatory
Redemption Price (or portion thereof not already paid), payable to the order of
the holders of Series F Stock to be redeemed, on surrender of their
certificates.
Section 6. Optional Redemption.
(a) Series F Stock. The Corporation, at the option of
the Board of Directors, may redeem all of the outstanding shares of Series F
Stock, or any portion thereof having an aggregate Issue Price of at least
$500,000 or any increment thereof, at any time when it may lawfully do so, by
paying in cash for each redeemed share the amount of 100% of the Issue Price
for each share of Series F Stock then outstanding plus Accumulated Dividends on
each such share, whether or not earned or declared (the "Optional Redemption
Price").
6
9
(b) Notice and Procedure. Notice of redemption pursuant
to this Section 6 shall be given to the holders of record of the shares of
Series F Stock to be redeemed at their respective addresses appearing on the
books of the Corporation. Such notice (the "Optional Redemption Notice") shall
be given not less than 15 nor more than 30 days in advance of the date fixed
for redemption (the "Optional Redemption Date") and shall specify the Optional
Redemption Price and the place at which payment may be obtained as to such
shares and calling upon such holder to surrender to the Corporation, in the
manner and at the place designated, his certificate(s) representing the shares
to be redeemed. At any time on or after the Optional Redemption Date, the
holders of record of shares of Series F Stock to be redeemed shall be entitled
to receive the Optional Redemption Price, upon actual delivery to the
Corporation or its agent of the certificates representing the shares to be
redeemed.
(c) Deposit of Funds. If an Optional Redemption Notice
is duly given and if on or before the Optional Redemption Date the funds
necessary for redemption (taking into account any conversions) have been
deposited by the Corporation with a bank or trust company located in the United
States and having capital and surplus of at least $200,000,000, in trust for
the pro rata benefit of the holders of the shares of Series F Stock called for
redemption, then, notwithstanding that any certificate for shares of Series F
Stock called for redemption shall not have been surrendered for cancellation,
from and after the Optional Redemption Date (unless there shall have been a
default in payment of the Optional Redemption Price) all shares of Series F
Stock so called for redemption shall no longer be deemed to be outstanding and
all rights with respect to such shares shall forthwith cease and terminate,
except only the right of the holders thereof to receive the funds so deposited,
without interest, from such bank or trust company upon surrender of their
certificate or certificates at any time after the time of such deposit. The
balance of any funds so deposited and unclaimed at the end of two years from
the Optional Redemption Date shall be released to the Corporation, after which
the holders of the shares called for redemption shall be entitled, upon proof
of their ownership of such shares and any bond requested by the Corporation, to
receive such funds from the Corporation.
Section 7. Reacquired Shares.
Any shares of Series F Stock redeemed, purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof.
Section 8. Voting Rights.
(a) General. The holders of the shares of Series F Stock
shall have no voting rights except as expressly provided herein or as may
otherwise be required by law from time to time. Except as set forth in this
Section 8 or as required under applicable law, there shall be no other special
voting or class voting requirements.
(b) No Adverse Effect. Without the affirmative vote or
consent of the holders of at least 67% of the outstanding shares of Series F
Stock, the Corporation may not amend, alter or repeal any provisions of the
Corporation's certificate of incorporation so as to affect adversely the
preferences, special rights or powers of the shares of Series F Stock. Any
increase in the authorized number of shares of Series F Stock or of any class
or series of capital stock ranking on a parity with (but not prior to) such
Series F Stock with respect to the payment of
7
10
dividends or the distribution of assets, redemption rights or conversion price
adjustments ("Parity Preferred Stock"), or any creation, authorization or
issuance of any securities convertible into, or warrants, options or similar
rights to purchase, acquire or receive, or any reclassification of any
authorized capital stock of the Corporation into, any shares of Parity
Preferred Stock shall be deemed to affect adversely the preferences, special
rights or powers of the shares of Series F Stock, and may not be effected
without any vote or consent of the holders of Series F Stock.
(c) No Superior Stock. Without the affirmative vote or
consent of the holders of at least 67% of the outstanding shares of Series F
Stock, the Corporation may not create, authorize or issue shares of any class
or series of capital stock ranking senior to the Series F Stock with respect to
the payment of dividends, the distribution of assets or redemption rights, or
conversion price adjustments or create, authorize or issue any securities
convertible into, or warrants, options or similar rights to purchase, acquire
or receive, or reclassify any authorized capital stock of the Corporation into,
any shares of capital stock ranking senior to the Series F Stock with respect
to the payment of dividends or the distribution of assets or redemption rights
or conversion price adjustments.
(d) Election of Directors. For so long as, and only so
long as, shares of Series F Stock are issued and outstanding, the holders
thereof shall have the right, notwithstanding anything to the contrary in this
Fifth Restated Certificate of Incorporation or the By- Laws of the Corporation,
to elect one director to the Board of Directors.
(e) Defaults Relating to Series F Stock. If at any time
(i) that the Corporation shall fail to redeem Series F Stock on any Mandatory
Redemption Date or Special Redemption Date and does not cure such failure
within 30 days; or (ii) there shall be four quarterly dividend payments unpaid
(whether or not consecutive) on Series F Stock; or (iii) the Corporation shall
have failed to pay a quarterly dividend under circumstances in which funds were
legally available and payment of the dividend would not have violated a
restrictive covenant or resulted in an event of default under the Credit
Agreement (each a "Series F Default"), then at any annual or special meeting of
stockholders (which special meeting shall be held not more than 20 days after
written request of the holders of at least 10 percent of Series F Stock), the
holders of Series F Stock shall have the right, notwithstanding anything to the
contrary in this Restated Certificate of Incorporation or the Bylaws of the
Corporation, to have the Board of Directors of the Corporation consist of seven
members elected as follows:
(A) three members designated by the Current
Series F Holder or an Approved Transferee;
(B) three members designated or elected by the
holders of the Common Stock (the "Independent Directors"); and
(C) one member designated by the Current Series F
Holder or an Approved Transferee (which member must be an executive
officer of the Corporation), unless the Current Series F Holder and a
majority of the Independent Directors agree on another designee who is
not an executive officer of the Corporation.
In addition, in the event of a Series F Default the executive committee of the
Board of Directors shall be comprised of:
8
11
(1) one member designated by the Current Series F
Holder or an Approved Transferee;
(2) one member designated by a majority of the
Independent Directors; and
(3) the member designated pursuant to clause (C)
above.
Such right of the holders of Series F Stock shall continue until no Series F
Default exists, at which time such right shall terminate, except as required by
law, subject to revesting in the event of each and every subsequent Series F
Default. Upon termination of the right to elect directors as provided in this
Subsection 8(e), any of (i) the Current Series F Holder, (ii) an Approved
Transferee, or (iii) such other persons who pursuant to the Bylaws of the
Corporation are granted the right to call a special meeting of stockholders of
the Corporation shall have the right to call a special meeting of stockholders
for the purpose of electing directors. The rights upon a Series F Default set
forth in this Subsection 8(e) may be exercised only by the Current Series F
Holder; provided, however, that the rights shall be transferable to a
transferee of Series F Stock if a majority of the directors (excluding
therefrom directors who are officers or employees of the Company or its
subsidiaries and the director elected by the holder of the Series F Stock
pursuant to Subsection 8(d) consent to such transfer (an "Approved
Transferee")).
(f) Certain Voting Procedures. At any meeting at which
the holders of Series F Stock shall have the right to elect one or more
directors as provided in Subsections 8(d) and 8(e), the presence in person or
by proxy of the holders of at least two-thirds of the then outstanding shares
of Series F Stock shall be required and be sufficient to constitute a quorum,
and the favorable vote of the holders of two- thirds of the shares of Series F
Stock represented at such meeting shall be sufficient to approve any such
action. Any vacancy in the office of any director elected pursuant to
Subsection 8(d) may be filled by the person appointed by an instrument in
writing signed by the holders of Series F Stock then outstanding.
(g) Non-Exclusivity. The rights of the holders of Series
F Stock under Sections 3 and 8 with respect to any default by the Corporation
shall not be deemed to be exclusive. If any default shall exist, the holders
of shares of Series F Stock shall have all other rights which such holders
shall have been granted under any contract or agreement at any time, and all
other rights which such holders shall have under any law. Any person having
any rights under any provision in this Section 8 shall be entitled to enforce
such person's rights specifically, to recover damages by reason of any
non-compliance with any provision in this Section 8, and to exercise all other
rights granted by law.
FIFTH: The Board of Directors is authorized to adopt, amend
or repeal the By-Laws of the Corporation.
SIXTH: Meetings of stockholders shall be held at such place,
within or without the State of Delaware, as may be designated by or in the
manner provided in the By-Laws, or, if not so designated or provided, at the
registered office of the Corporation in the state of Delaware. Elections of
directors need not be by written ballot unless and to the extent that the
By-Laws so provide.
SEVENTH: No director of the Corporation shall be personally
liable to the Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director;
9
12
provided, however, that the foregoing clause shall not apply to any liability
of a director to the extent provided by applicable law (i) for any breach of
the director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the General Corporation
Law of the State of Delaware or (iv) for any transaction from which the
director derived an improper personal benefit. Neither the amendment nor
repeal of this Article SEVENTH, nor the adoption of any provision of this Fifth
Restated Certificate of Incorporation inconsistent with this Article SEVENTH,
shall be effective with respect to any cause of action, suit, claim or other
matter that, but for this Article SEVENTH, would accrue or arise prior to such
amendment, repeal or adoption of an inconsistent provision.
EIGHTH: Whenever a compromise or arrangement is proposed
between the Corporation and its creditors or any class of them and/or between
the Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in
a summary way of the Corporation or of any creditor or stockholder thereof or
on the application of any receiver or receivers appointed for the Corporation
under the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for the Corporation under the provisions of Section 279 of Title 8 of
the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or all the
stockholders or class of stockholders, of the Corporation, as the case may be,
and also on the Corporation.
NINTH: The Corporation reserves the right to amend, alter or
repeal any provision contained in this Fifth Restated Certificate of
Incorporation in the manner now or hereafter prescribed by statute, and all
rights of stockholders herein are subject to this reservation.
10
13
CERTIFICATE OF DESIGNATION OF THE VOTING POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS, AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS
OF THE
11% SERIES H CUMULATIVE REDEEMABLE CONVERTIBLE PREFERRED STOCK
-------------------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
-------------------------------------------
Protection One, Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
does hereby certify that, pursuant to authority conferred on the Board of
Directors of the Corporation by its Fifth Restated Certificate of
Incorporation, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, said Board of Directors adopted the
following resolution, which resolution remains in full force and effect on the
date hereof:
RESOLVED, that pursuant to the authority conferred upon the
Board of Directors by Article FOURTH of the Fifth Restated Certificate of
Incorporation of the Corporation there is hereby established and created a
series of the authorized preferred stock of the Corporation having a par value
of Ten Cents ($.10) per share, which shall be designated as "11% Series H
Cumulative Redeemable Convertible Preferred Stock" (the "Series H Stock"), and
which shall consist of 6,127 shares having the designations, preferences,
relative, participating, optional or other special rights and qualifications,
limitations and restrictions that are set forth in this resolution, as follows:
Section 1. Definitions.
For the purposes of this resolution, the following terms shall
have the respective meanings indicated below or as set forth in the indicated
section of this resolution:
Accumulated Dividends - As to a particular date, all unpaid
dividends for all previous fiscal years of the Corporation, at the annual
amount set forth in Subsection 2(a), plus an amount equal to such annual
dividend amount multiplied by a fraction, the numerator of which is the number
of days elapsed in the Corporation's fiscal year to the particular date and the
denominator of which is 365.
Approved Transferee - Subsection 8(e)
Conversion Price - Subsection 6(a)(i)
Credit Agreement - shall mean that certain Credit Agreement
dated as of November 3, 1993 among the Corporation, Protection One Alarm
Monitoring, Inc., Protection One Alarm Services, Inc., the Lenders named
therein and Heller Financial, Inc., as Agent, as amended by that certain First
Amendment to Credit Agreement among the Corporation, Protection One Alarm
Monitoring, Inc., Protection One Alarm Services, Inc., Heller Financial, Inc.,
Continental
14
Bank and Kansallis-Osake-Pankki, dated as of June 30, 1994, and as further
amended from time to time; and any credit agreement with respect to a renewal,
refunding or replacement thereof.
Current Series H Holder - shall mean PacifiCorp Financial
Services, Inc., or PacifiCorp Holdings, Inc. (or any successor to such
corporation by merger or any wholly owned first-tier subsidiary of such
corporation).
Direct or Indirect Significant Subsidiaries - shall mean any
direct or indirect subsidiary having 15% or more of the assets, sales or
earnings of the Corporation on a consolidated basis.
Independent Directors - Subsection 8(e)
Initial Conversion Price - Subsection 6(a)(i)
Issue Date - The earliest date on which shares of Series H
Stock are issued.
Issue Price - For Series H Stock, $1,000 per share.
Junior Stock - Common Stock and shares of any other class or
series of capital stock ranking junior to the applicable series of Preferred
Stock with respect to both the payment of dividends and the distribution of
assets upon the liquidation, dissolution or winding up of the Corporation.
Mandatory Redemption Date - Subsection 4(b)
Mandatory Redemption Notice - Subsection 4(b)
Mandatory Redemption Price - Subsection 4(a)
Optional Redemption Date - Subsection 5(c)
Optional Redemption Notice - Subsection 5(c)
Optional Redemption Price - Subsection 5(a)
Parity Preferred Stock - Subsection 8(b)
Redemption Date - An Optional Redemption Date, a Mandatory
Redemption Date or a Special Redemption Date, as applicable.
Redemption Notice - An Optional Redemption Notice or a
Mandatory Redemption Notice, as applicable.
Series H Default - Subsection 8(e)
Set Apart For Payment - The Corporation shall have deposited
with a bank or trust company located within the United States and having
capital and surplus of at least $200 million, in trust for the exclusive
benefit of the holders of Series H Stock, funds sufficient to pay the
Corporation's obligation as of the applicable time.
2
15
Special Redemption Date - Subsection 4(c)
Triggering Event - Subsection 3(c)
Section 2. Dividends and Distributions.
(a) Series H Stock Dividends. The holders of the then
outstanding shares of Series H Stock shall be entitled to receive on each
January 1, April 1, July 1, and October 1 commencing on the first such date
after the Issue Date (each, a "Dividend Payment Date"), out of any funds
legally available therefor, cash dividends at the annual rate of $110 per
share; provided, however, that (i) if at any time the Corporation fails to pay
a quarterly dividend on the applic-able Dividend Payment Date therefor, the
annual dividend rate shall increase to $130 per share and dividends shall begin
to accumulate on each share of Series H Stock at such increased rate from the
first day of the calendar quarter after the Dividend Payment Date on which the
failure to make such dividend payment occurred until the date all unpaid
dividend payments are paid in full, (ii) if at any time the Corporation has a
total of five unpaid quarterly dividend payments outstanding, whether or not
consecutive, the annual dividend rate shall increase to $150 per share and
dividends shall begin to accumulate on each share of Series H Stock at such
increased rate from the first day of the calendar quarter after the Dividend
Payment Date on which the fifth dividend is missed until the Corporation has
reduced the total number of past due quarterly dividends below five, at which
point the annual dividend rate will be reduced to $130 or until the Corporation
has paid all past due quarterly dividend payments, at which point the annual
dividend rate will be reduced to $110; (iii) if at any time the Corporation has
a total of seven unpaid quarterly dividends outstanding, whether consecutive or
not, the annual dividend rate shall increase to $180 per share and dividends
shall begin to accumulate on each such share of Series H Stock at such
increased rate from the first day of the calendar quarter after the Dividend
Payment Date on which the seventh dividend is missed until the Corporation has
reduced the total number of past due quarterly dividend payments below seven,
at which point the annual dividend rate will be reduced to $150, or until the
Corporation has reduced the total number of past due quarterly dividend
payments below five, at which point the annual dividend rate will be reduced to
$130, or until the Corporation has paid all past due quarterly dividend
payments, at which point the annual dividend rate will be reduced to $110.
Notwithstanding the foregoing, if the Corporation fails to pay a quarterly
dividend for any reason other than that the funds are not legally available or
that the payment would violate a restrictive covenant or result in a default
under the Credit Agreement, then the annual dividend rate shall increase to
$180 per share and dividends shall begin to accumulate on each share of Series
H Stock on the first day of the calendar quarter after the Dividend Payment
Date on which the failure to make such dividend payment occurred and shall
continue until all unpaid dividends are paid in full, at which point the annual
dividend rate shall be reduced to $110. If the Corporation fails to redeem any
shares of Series H Stock on any Mandatory Redemption Date pursuant to
Subsection 4(a) and (b) hereof or Special Redemption Date pursuant to
Subsection 4(d) hereof, then the annual dividend rate shall increase to $180
per share and dividends shall begin to accumulate on each share of Series H
Stock at such increased rate from the 22nd calendar day after such failure to
redeem until the redemption payment is made in full. Dividends on Series H
Stock shall be cumulative and shall begin to accumulate beginning on the Issue
Date for Series H Stock whether or not earned or paid. No dividends or other
distributions (other than pro rata dividends or distributions payable solely in
Common Stock) shall be paid with respect to shares of Junior Stock during any
fiscal year of the Corporation until the
3
16
full amount of all Accumulated Dividends on all outstanding shares of Series H
Stock shall have been declared and Set Apart For Payment during that fiscal
year.
(b) Restrictions on Distributions. No dividends or other
distributions (other than pro rata dividends or distributions payable solely in
Common Stock) shall be paid with respect to Junior Stock until all shares of
Series H Stock are fully redeemed pursuant to Sections 4 or 5 unless (i) an
amount equal to the Mandatory Redemption Price for all outstanding shares of
Series H Stock is first Set Apart For Payment, or (ii) the Corporation receives
the written consent of the holders of at least a majority of the then
outstanding shares of Series H Stock.
(c) Exclusions from Restrictions. The restrictions in
this Section 2 on distributions to Junior Stock shall not apply to repurchases
of up to 2,000,000 shares of Common Stock issued to the Corporation's officers,
provided that such repurchases are made upon termination of employment pursuant
to and at prices provided in agreements approved by the Corporation's Board of
Directors and entered into with such officers.
(d) Junior Stock. Subject to the limitations in
Subsections 2(a), 2(b), and 2(c) above, when and as dividends are declared
thereon, whether payable in cash, property or securities, the holders of Common
Stock will be entitled to share, ratably according to the number of shares of
Common Stock held by them, in such dividends.
(e) 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 give to each
holder of Series H Stock, at least 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. In no event shall the notice period
specified in this Subsection 2(e) be deemed to apply in the event of a taking
by the Corporation of a record of the holders of any class of securities for
the purposes of determining the holders thereof who are entitled to vote on any
matter.
Section 3. Liquidation Preference.
(a) Series H Stock. In the event of any liquidation,
dissolution or winding up of the Corporation, either voluntary or involuntary,
the holders of each share of Series H Stock shall be entitled to be paid out of
the assets of the Corporation available for distribution to its shareholders,
before any declaration and payment or Setting Apart For Payment of any amount
shall be made in respect of Junior Stock, an amount equal to the Issue Price
for each share of Series H Stock plus an amount equal to any Accumulated
Dividends on each such share of Series H Stock, whether or not declared. If,
upon liquidation, dissolution or winding up of the Corporation, the assets of
the Corporation available for distribution to its shareholders shall be
insufficient to pay the holders of Series H Stock the full preference to which
they are entitled as set forth above, then the holders of Series H Stock shall
share ratably in any distribution of assets.
(b) Junior Stock. After the payments or distributions
described in Subsection 3(a) above have been made, the remaining assets of the
Corporation available for distribution to
4
17
its shareholders shall be distributed among the holders of Junior Stock pro
rata based upon the number of shares then held by each of them.
(c) Merger, Etc., Not a Liquidation. A consolidation or
merger of the Corporation or any of its Direct or Indirect Significant
Subsidiaries with or into any other corporation (other than a wholly owned
subsidiary of the Corporation) or other entity or person in which the
Corporation or such subsidiary shall not survive, or a sale, conveyance or
disposition of all or substantially all of the assets of the Corporation or any
of its Direct or Indirect Significant Subsidiaries (other than such a sale to a
wholly owned subsidiary of the Corporation) or the effectuation of any
reorganization or any other transaction or series of related transactions in
which 50 percent or more of the voting power of the Corporation or any of its
Direct or Indirect Significant Subsidiaries is disposed of (each such event, a
"Triggering Event") shall not be deemed to be a liquidation, dissolution or
winding up within the meaning of this Section 3 and no such Triggering Event
shall impair the rights and preferences of the shares of Series H Stock.
Section 4. Mandatory Redemption.
(a) General Right. At any time after December 31, 2005,
any holder of shares of Series H Stock may require the Corporation to redeem
all of the outstanding shares of Series H Stock held by such holder. The
redemption price shall be 100% of the Issue Price plus Accumulated Dividends
for such series, whether or not earned or declared (the "Mandatory Redemption
Price").
(b) Notice and Procedure. At least 30 but not more than
60 days prior to the requested redemption date (the "Mandatory Redemption
Date"), written notice (the "Mandatory Redemption Notice") shall be given by
the holders of Series H Stock requesting redemption to the Corporation,
specifying the number of shares to be redeemed and the Mandatory Redemption
Date. If the funds of the Corporation legally available for redemption of
shares of Series H Stock on any Mandatory Redemption Date are insufficient to
redeem the total number of outstanding shares of such series of Series H Stock
requested to be redeemed, the holders of Series H Stock shall share ratably in
any funds legally available for redemption of such shares. At any time
thereafter when additional funds of the Corporation are legally available for
the redemption of Series H Stock requested to be redeemed, such funds will be
used, at the end of the next succeeding fiscal quarter, to redeem the balance
of such shares, or such portion thereof for which funds are then legally
available, on the basis set forth above.
(c) Special Right. In addition to the redemption right
specified in Subsection 4(a) hereof, (i) if a Triggering Event occurs at any
time, any holder of shares of Series H Stock may require the Corporation to
redeem all of the outstanding shares of Series H Stock held by such holder at
the Mandatory Redemption Price provided, that if the holders of at least 75% of
the shares of Series H Stock then outstanding consent in writing, the
Corporation shall not be required to give written notice of any Triggering
Event required in Subsection 4(d) below and no holder of shares of Series H
stock shall have the right to require the Corporation to redeem his shares
pursuant to this subsection.
(d) Notice of Triggering Event and Procedure. The
Corporation shall not, directly or indirectly, consummate any Triggering Event
unless the Corporation shall have given not less than 20 nor more than 40 days'
written notice, prior to the date fixed for such Trigger-
5
18
ing Event, to each holder of any shares of Series H Stock entitled to be
redeemed pursuant to Subsection 4(c) hereof, which notice shall set forth the
terms and conditions of such Triggering Event, the rights of such holder to
require the Corporation to redeem Series H Stock, and the applicable redemption
date (the "Special Redemption Date"), which shall be a date established by the
Corporation and shall be not less than 20 nor more than 40 days after the date
of giving such notice and, in any event, shall be on or prior to the date fixed
for such Triggering Event. During the 15-day period following the giving of
such notice, each holder of Series H Stock who wishes to have redeemed by the
Corporation all of the Series H Stock then held by such holder shall give
written notice to the Corporation setting forth the number of shares of Series
H Stock to be redeemed on the Special Redemption Date. The Corporation shall
redeem on the Special Redemption Date the shares of Series H Stock of each
holder electing such redemption in the number so elected at the Mandatory
Redemption Price.
(e) Limitations. In the event the Corporation does not
have funds legally available to effect fully any redemption required to be made
on the Special Redemption Date (or to deposit funds as contemplated by
Subsection 4(f) below with respect to any such redemption), the Corporation
shall not effect such Triggering Event without the advance written consent of
the holders of at least 75% of the then outstanding shares of Series H Stock.
(f) Deposit of Funds. On or prior to any Mandatory
Redemption Date or Special Redemption Date, the Corporation shall irrevocably
deposit with any bank or trust company with capital and surplus of at least
$200,000,000 and located in the United States the aggregate Mandatory
Redemption Price (or portion thereof not already paid), payable to the order of
the holders of Series H Stock to be redeemed, on surrender of their
certificates.
Section 5. Optional Redemption.
(a) Series H Stock. The Corporation, at the option of
the Board of Directors, may redeem all of the outstanding shares of Series H
Stock, or any portion thereof having an aggregate Issue Price of at least
$500,000 or any increment thereof (or such lesser amount as may then be
outstanding), at any time when it may lawfully do so, by paying in cash for
each redeemed share the amount of 100% of the Issue Price for each share of
Series H Stock then outstanding plus Accumulated Dividends on each such share,
whether or not earned or declared (the "Optional Redemption Price").
(b) Notice and Procedure. Notice of redemption pursuant
to this Section 5 shall be given to the holders of record of the shares of
Series H Stock to be redeemed at their respective addresses appearing on the
books of the Corporation. Such notice (the "Optional Redemption Notice") shall
be given not less than 15 nor more than 30 days in advance of the date fixed
for redemption (the "Optional Redemption Date") and shall specify the Optional
Redemption Price and the place at which payment may be obtained as to such
shares and calling upon such holder to surrender to the Corporation, in the
manner and at the place designated, his certificate(s) representing the shares
to be redeemed. At any time on or after the Optional Redemption Date, the
holders of record of shares of Series H Stock to be redeemed shall be entitled
to receive the Optional Redemption Price, upon actual delivery to the
Corporation or its agent of the certificates representing the shares to be
redeemed.
(c) Deposit of Funds. If an Optional Redemption Notice
is duly given and if on or before the Optional Redemption Date the funds
necessary for redemption (taking into
6
19
account any conversions) have been deposited by the Corporation with a bank or
trust company located in the United States and having capital and surplus of at
least $200,000,000, in trust for the pro rata benefit of the holders of the
shares of Series H Stock called for redemption, then, notwithstanding that any
certificate for shares of Series H Stock called for redemption shall not have
been surrendered for cancellation, from and after the Optional Redemption Date
(unless there shall have been a default in payment of the Optional Redemption
Price) all shares of Series H Stock so called for redemption shall no longer be
deemed to be outstanding and all rights with respect to such shares shall
forthwith cease and terminate, except only the right of the holders thereof to
receive the funds so deposited, without interest, from such bank or trust
company upon surrender of their certificate or certificates at any time after
the time of such deposit. The balance of any funds so deposited and unclaimed
at the end of two years from the Optional Redemption Date shall be released to
the Corporation, after which the holders of the shares called for redemption
shall be entitled, upon proof of their ownership of such shares and any bond
requested by the Corporation, to receive such funds from the Corporation.
Section 6.7. Conversion Right.
(a) Conversion Right and Conversion Events.
(i) Each holder of shares of Series H Stock may,
at his option, at any time after October 1, 1995 and, if applicable, prior to
the close of business on the day before any Redemption Date as may have been
fixed in any Redemption Notice with respect to such shares, convert all or any
part of such shares from time to time held by him into the number of shares of
Common Stock as is determined by dividing the Issue Price by the Conversion
Price then in effect. The Conversion Price shall initially be $9.00 per share
(the "Initial Conversion Price"). The Initial Conversion Price shall be
subject to adjustment as set forth in Subsection 6(c). For purposes of this
Section 6, all calculations shall be carried out to four decimal places.
(ii) In the event of a call for redemption of any
shares of Series H Stock pursuant to Section 5 hereof, the conversion rights
applicable to such series of Preferred Stock shall terminate as to the shares
designated for redemption at the close of business on the day before the
Redemption Date, unless default is made in payment of the Redemption Price.
(iii) Upon conversion of the Series H Stock into
shares of Common Stock, the Common Stock so issued shall be duly and validly
issued, fully paid and nonassessable shares of the Corporation.
(b) Mechanics of Conversion. Before any holder of Series
H Stock shall be entitled to exercise his rights to convert the same into
shares of Common Stock, he shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or of any transfer
agent for the Common Stock and shall give written notice to the Corporation of
the election to convert the same and shall state therein the name or names in
which the certificate or certificates for shares of Common Stock are to be
issued. The Corporation shall, as soon as practicable thereafter, issue and
deliver at such office to such holder or to the nominee or nominees of such
holder, a certificate or certificates for the number of shares of Common Stock
to which such holder shall be entitled as aforesaid and pay to such holder in
cash all Accumulated Dividends, whether or not earned or declared, with respect
to the shares of Series H Stock so converted. 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 to be converted, and the
7
20
person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock as of such date. If the conversion is
in connection with an underwritten offer of securities registered pursuant to
the Securities Act of 1933, the conversion may, at the option of any holder
tendering for conversion, be conditioned upon the closing with the underwriter
of the sale of securities pursuant to such offering of Common Stock, in which
event the person(s) entitled to receive the Common Stock issuable upon such
conversion shall not be deemed to have converted such shares until immediately
prior to the closing of such sale of securities.
(c) Adjustments. The Conversion Price provided in
Section 6(a)(i) shall be subject to adjustment to the extent below provided:
In the event the Corporation shall (i) pay a dividend
of Common Stock, or of any capital stock convertible into Common Stock, on its
outstanding Common Stock, (ii) subdivide its outstanding Common Stock into a
larger number of shares of Common Stock by reclassification or otherwise, or
(iii) combine its outstanding Common Stock into a smaller number of shares of
Common Stock by reclassification or otherwise, the Conversion Price in effect
immediately prior thereto shall be proportionately adjusted so that the holder
of any Series H Stock thereafter surrendered for conversion shall be entitled
to receive the number of shares of Common Stock (and, in the case of a dividend
payable in capital stock convertible into Common Stock, the number of shares of
such capital stock) which he would have owned or have been entitled to receive
after the happening of any of the events described above had such Series H
Stock been converted immediately prior to the happening of such event. Such
adjustment shall be made whenever any of the events described above shall
occur. An adjustment made pursuant to this Section 6(c) shall in case of a
dividend be made as of the record date therefor and in the case of a
subdivision or combination be made as of the effective date thereof.
(d) Other Distributions. If the Corporation declares a
distribution payable to holders of its Common Stock in securities of other
another person, evidences of indebtedness issued by the Corporation or other
persons, assets (excluding cash dividends) or options or rights, then, in each
such case for the purpose of this Subsection 6(d), the holders of the Series H
Stock shall be entitled to a proportionate share of any such distribution as
though they were the holders of the number of shares of Common Stock of the
Corporation equal to the number of shares of Common Stock into which their
shares of Series H Stock are convertible as of the record date fixed for the
determination of the holders of Common Stock of the Corporation entitled to
receive such distribution.
(e) Recapitalizations. If at any time or from time to
time there shall be a recapitalization of the Common Stock (other than a
subdivision, combination or distribution provided for elsewhere in this Section
6), provision shall be made so that the holders of the Series H Stock shall
thereafter be entitled to receive upon conversion of the Series H Stock the
number of shares of stock or other securities or property of this Corporation
or otherwise, to which a holder of Common Stock deliverable upon conversion
would have been entitled on such recapitalization. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 6 with respect to the rights of the holders of the Series H Stock
after the recapitalization to the end that the provisions of this Section 6
(including adjustment of the Conversion Prices of the Series H Stock then in
effect and the number of shares into which each share of Series H Stock is then
convertible) shall be applicable after that event as nearly equivalent as may
be practicable.
8
21
(f) No Impairment. The Corporation will not, by
amendment of its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation , merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 6 and in the
taking of all such action as may be necessary or appropriate in order to
protect the conversion rights set forth in this Section 6 against impairment.
(g) No Fractional Shares; Certificates as to Adjustments.
(i) No fractional shares shall be issued upon
conversion of the Series H Stock, and the number of shares of Common Stock to
be issued shall be rounded to the nearest whole share. Whether fractional
shares would otherwise be issuable upon conversion shall be determined on the
basis of the total number of shares of such series the holder is at the time
converting into Common Stock and the number of shares of Common Stock issuable
upon such aggregate conversion.
(ii) Upon the occurrence of each adjustment or
readjustment of the Conversion Prices of the Series H Stock pursuant to this
Section 6, the Corporation, at its expense, shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
give to each holder of Series H Stock written notice that includes a
certificate setting forth such adjustment or readjustment, including a
statement setting forth (A) the Conversion Price then in effect for such series
of Preferred Stock, and (B) the number of shares of Common Stock and the
amount, if any, of other property which at the time would be received upon the
conversion of shares of such series of Preferred Stock.
(h) Reservation of Stock Issuable upon Conversion. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock and solely for the purpose of effecting the
conversion of the shares of Series H Stock convertible pursuant to this Section
6 into shares of Common Stock, as the case may be, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of such Preferred Stock so convertible; and if at any
time the number of authorized but unissued shares of Common Stock shall be
sufficient to effect the conversion of all then outstanding shares of such
Preferred Stock so convertible, in addition to such other remedies as shall be
available to the holders of such Preferred Stock so convertible, the
Corporation will take such corporate action as may be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient to such purposes.
(i) Taxes. The Corporation shall pay all taxes and other
governmental charges that may be imposed in respect of the issue or delivery of
shares of Common Stock upon conversion of shares of Series H Stock (other than
income taxes imposed upon the holder thereof).
9
22
Section 7. Reacquired Shares.
Any shares of Series H Stock redeemed, purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof.
Section 8. Voting Rights.
(a) General. The holders of the shares of Series H Stock
shall have no voting rights except as expressly provided herein or as may
otherwise be required by law from time to time. Except as set forth in this
Section 8 or as required under applicable law, there shall be no other special
voting or class voting requirements.
(b) No Adverse Effect. Without the affirmative vote or
consent of the holders of at least 67% of the outstanding shares of Series H
Stock, the Corporation may not amend, alter or repeal any provisions of the
Corporation's certificate of incorporation so as to affect adversely the
preferences, special rights or powers of the shares of Series H Stock. Any
increase in the authorized number of shares of Series H Stock or of any class
or series of capital stock ranking on a parity with (but not prior to) such
Series H Stock with respect to the payment of dividends or the distribution of
assets, redemption rights or conversion price adjustments ("Parity Preferred
Stock"), or any creation, authorization or issuance of any securities
convertible into, or warrants, options or similar rights to purchase, acquire
or receive, or any reclassification of any authorized capital stock of the
Corporation into, any shares of Parity Preferred Stock shall be deemed to
affect adversely the preferences, special rights or powers of the shares of
Series H Stock, and may not be effected without any vote or consent of the
holders of Series H Stock.
(c) No Superior Stock. Without the affirmative vote or
consent of the holders of at least 67% of the outstanding shares of Series H
Stock, the Corporation may not create, authorize or issue shares of any class
or series of capital stock ranking senior to the Series H Stock with respect to
the payment of dividends, the distribution of assets or redemption rights, or
conversion price adjustments or create, authorize or issue any securities
convertible into, or warrants, options or similar rights to purchase, acquire
or receive, or reclassify any authorized capital stock of the Corporation into,
any shares of capital stock ranking senior to the Series H Stock with respect
to the payment of dividends or the distribution of assets or redemption rights
or conversion price adjustments.
(d) Election of Directors. For so long as, and only so
long as, shares of Series H Stock are issued and outstanding, the holders
thereof shall have the right, notwithstanding anything to the contrary in this
Fifth Restated Certificate of Incorporation or the Bylaws of the Corporation,
to elect one director to the Board of Directors.
(e) Defaults Relating to Series H Stock. If at any time
(i) that the Corporation shall fail to redeem Series H Stock on any Mandatory
Redemption Date or Special Redemption Date and does not cure such failure
within 30 days; or (ii) there shall be four quarterly dividend payments unpaid
(whether or not consecutive) on Series H Stock; or (iii) the Corporation shall
have failed to pay a quarterly dividend under circumstances in which funds were
legally available and payment of the dividend would not have violated a
restrictive covenant or resulted in an event of default under the Credit
Agreement (each a "Series H Default"), then at any annual or special meeting of
stockholders (which special meeting shall be held not more than 20 days
10
23
after written request of the holders of at least 10 percent of Series H Stock),
the holders of Series H Stock shall have the right, notwithstanding anything to
the contrary in this Restated Certificate of Incorporation or the Bylaws of the
Corporation, to have the Board of Directors of the Corporation consist of seven
members elected as follows:
(A) three members designated by the Current
Series H Holder or an Approved Transferee;
(B) three members designated or elected by the
holders of the Common Stock (the "Independent Directors"); and
(C) one member designated by the Current Series H
Holder or an Approved Transferee (which member must be an executive
officer of the Corporation), unless the Current Series H Holder and a
majority of the Independent Directors agree on another designee who is
not an executive officer of the Corporation.
In addition, in the event of a Series H Default the executive committee of the
Board of Directors shall be comprised of:
(1) one member designated by the Current Series H
Holder or an Approved Transferee;
(2) one member designated by a majority of the
Independent Directors; and
(3) the member designated pursuant to clause (C)
above.
Such right of the holders of Series H Stock shall continue until no Series H
Default exists, at which time such right shall terminate, except as required by
law, subject to revesting in the event of each and every subsequent Series H
Default. Upon termination of the right to elect directors as provided in this
Subsection 8(e), any of (i) the Current Series H Holder, (ii) an Approved
Transferee, or (iii) such other persons who pursuant to the Bylaws of the
Corporation are granted the right to call a special meeting of stockholders of
the Corporation shall have the right to call a special meeting of stockholders
for the purpose of electing directors. The rights upon a Series H Default set
forth in this Subsection 8(e) may be exercised only by the Current Series H
Holder; provided, however, that the rights shall be transferable to a
transferee of Series H Stock if a majority of the directors (excluding
therefrom directors who are officers or employees of the Company or its
subsidiaries and the director elected by the holder of the Series H Stock
pursuant to Subsection 8(d) consent to such transfer (an "Approved
Transferee")).
(f) Certain Voting Procedures. At any meeting at which
the holders of Series H Stock shall have the right to elect one or more
directors as provided in Subsections 8(d) and 9(e), the presence in person or
by proxy of the holders of at least two-thirds of the then outstanding shares
of Series H Stock shall be required and be sufficient to constitute a quorum,
and the favorable vote of the holders of two- thirds of the shares of Series H
Stock represented at such meeting shall be sufficient to approve any such
action. Any vacancy in the office of any director elected pursuant to
Subsection 8(d) may be filled by the person appointed by an instrument in
writing signed by the holders of Series H Stock then outstanding.
11
24
(g) Non-Exclusivity. The rights of the holders of Series
H Stock under Sections 2 and 8 with respect to any default by the Corporation
shall not be deemed to be exclusive. If any default shall exist, the holders
of shares of Series H Stock shall have all other rights which such holders
shall have been granted under any contract or agreement at any time, and all
other rights which such holders shall have under any law. Any person having
any rights under any provision in this Section 8 shall be entitled to enforce
such person's rights specifically, to recover damages by reason of any
non-compliance with any provision in this Section 8, and to exercise all other
rights granted by law.
IN WITNESS WHEREOF, Protection One, Inc. has caused this
Certificate to be executed by its President and attested by its Secretary this
5th day of May, 1995.
By: JAMES M. MACKENZIE, JR.
-------------------------------------
James M. Mackenzie, Jr., President
Attest:
JOHN W. HESSE
- -------------------------------------
John W. Hesse, Secretary
12
25
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
Protection One, Inc., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Protection One,
Inc. held on November 19, 1996, resolutions were duly adopted setting forth a
proposed amendment of the certificate of incorporation of said corporation,
declaring said amendment to be advisable and directing that said amendment be
considered at the next annual meeting of the stockholders of said corporation.
The resolution setting forth the proposed amendment is as follows:
NOW, THEREFORE, BE IT RESOLVED that the first
paragraph of Article FOURTH of the Fifth Restated Certificate of
Incorporation of Protection One, Inc. be amended and restated to read
in full as follows:
"The total number of shares of all classes of
stock that the Corporation shall have the authority to issue
is 45,000,000, of which 40,000,000 shall be voting common
stock, par value One Cent ($0.01) per share ("Common Stock"),
and 5,000,000 shall be preferred stock, par value Ten Cents
($.10) per share ("Preferred Stock")."
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, an annual meeting of the stockholders of said corporation was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the state of Delaware, at which meeting the necessary number
of shares as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said Protection One, Inc. has caused this
certificate to be signed by John E. Mack, III, its authorized officer, this 5th
day of February, 1997.
PROTECTION ONE, INC.
By: JOHN E. MACK, III
------------------------------------
John E. Mack, III
Executive Vice President -
Business Development