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Exhibit 3.1
FORM OF
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
HAWK CORPORATION
ARTICLE I
NAME
The name of the corporation is Hawk Corporation (the "Corporation").
ARTICLE II
REGISTERED OFFICE IN DELAWARE
The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle.
The name of its registered agent at such address is The Corporation Trust
Company.
ARTICLE III
PURPOSE
The Corporation is formed for the purpose of engaging in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware as it presently exists or may be
amended in the future (the "Delaware General Corporation Law").
ARTICLE IV
CAPITAL STRUCTURE
4.1 Authorized Capital Stock. The aggregate number of shares
of all classes of stock that the Corporation is authorized to issue is
85,500,000 shares, consisting of:
(a) 75,000,000 shares of Class A Common Stock, par value
$0.01 per share (the "Class A Common Stock");
(b) 10,000,000 shares of Class B Non-Voting Common Stock,
par value $0.01 per share (the "Class B Common Stock" and, together with the
Class A Common Stock, the "Common Stock"); and
(c) 500,000 shares of Serial Preferred Stock, par value
$0.01 per share (the "Preferred Stock").
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4.2 Class A Common Stock and Class B Common Stock.
(a) Powers, Preferences and Rights. Except as may
otherwise be provided by this Second Amended and Restated Certificate of
Incorporation, as may be amended from time to time by resolutions of the Board
of Directors designating a class or series of Preferred Stock pursuant to
Section 4.4 hereof (this "Certificate of Incorporation"), or by the Delaware
General Corporation Law, the powers, preferences and rights of the Class A
Common Stock and the Class B Common Stock, and the qualifications, limitations
or restrictions thereof, shall be in all respects identical.
(b) Voting Rights. Except as may otherwise be provided
by this Certificate of Incorporation or by the Delaware General Corporation Law,
(i) all rights to vote and all voting power shall be vested exclusively in the
holders of the Class A Common Stock and (ii) each holder of Class A Common Stock
shall be entitled to one vote for each share held of record on the applicable
record date on all matters presented for a vote of the stockholders of the
Corporation, including, without limitation, the election of directors. Except as
otherwise required by the Delaware General Corporation Law, the holders of Class
B Common Stock shall not be entitled to vote on any matters to be voted on by
the stockholders of the Corporation.
(c) Dividends; Recapitalizations. Except as may
otherwise be provided by this Certificate of Incorporation or by the Delaware
General Corporation Law, if, as and when dividends on the Class A Common Stock
and the Class B Common Stock are declared payable from time to time by the Board
of Directors as provided in this Section 4.2(c), whether payable in cash,
property, stock or other securities, the holders of Class A Common Stock and the
holders of Class B Common Stock shall be entitled to share equally, on a per
share basis, in such dividends; provided, however, that (i) if dividends are
declared that are payable in shares of Class A Common Stock, or in shares of
Class B Common Stock, dividends shall be declared that are payable at the same
rate on both classes of stock and the dividends payable in shares of Class A
Common Stock shall be payable only to holders of Class A Common Stock and
dividends payable in shares of Class B Common Stock shall be payable only to
holders of Class B Common Stock, and (ii) if the dividends consist of other
voting securities of the Corporation, the Corporation shall make available to
each holder of Class B Common Stock, at such holder's written request, dividends
consisting of non-voting securities (except as otherwise required by the
Delaware General Corporation Law) of the Corporation which non-voting securities
are otherwise identical to such voting securities and are convertible into such
voting securities on the same terms as the Class B Common Stock is convertible
into the Class A Common Stock. If the Corporation shall in any manner split,
subdivide, combine or reclassify the outstanding shares of Class A Common Stock
or Class B Common Stock, the outstanding shares of the other such class of
common stock shall be proportionally split, subdivided, combined or reclassified
in the same manner and on the same basis as the outstanding shares of Class A
Common Stock or Class B Common Stock, as the case may be, have been subdivided
or combined or reclassified.
(d) Mergers and Consolidations. In case of any merger
or consolidation of the Corporation with any other entity as a result of which
the holders of Class A Common Stock shall
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be entitled to receive cash, property, stock or other securities with respect to
or in exchange for Class A Common Stock, or in case of any sale or conveyance of
all or substantially all of the assets of the Corporation, a holder of one share
of Class B Common Stock shall have the right thereafter, so long as the
conversion rights set forth in Section 4.2(e) hereof shall exist, to convert
such share of Class B Common Stock into the kind and amount of cash, property,
stock or other securities receivable upon such consolidation, merger, sale or
conveyance by a holder of one share of Class A Common Stock, and shall have no
other conversion rights with regard to such share of Class B Common Stock. The
provisions of this Section 4.2(d) shall similarly apply to successive mergers,
consolidations, sales or conveyances.
(e) Conversion of Class B Common Stock.
(i) Conversion at Qualified Public Offering. Each
share of Class B Common Stock sold in an underwritten public offering
pursuant to an effective registration statement under the Securities
Act of 1933, as amended (a "Public Offering"), shall automatically be
converted into an equal number of shares of Class A Common Stock
immediately upon the closing of such sale.
(ii) Conversion Upon Certain Transfers. Each share of
Class B Common Stock shall be converted into an equal number of shares
of Class A Common Stock upon the written request (the "Conversion
Request") of any third party transferee ("Transferee") acquiring such
shares of Class B Common Stock from any holder of Class B Common Stock
so long as such Transferee (A) is not an affiliate of the transferor of
such Class B Common Stock and (B) makes such Conversion Request within
fifteen days of the date such Class B Common Stock is transferred by
such transferor to such Transferee.
Other than as set forth in Section 4.2(d) and in this
Section 4.2(e), a holder of Class B Common Stock shall have no conversion rights
with respect to such Class B Common Stock.
(f) Conversion Procedures. Any holder of shares of Class
B Common Stock desiring to convert such shares, or any such holder whose shares
shall have been automatically converted, into shares of Class A Common Stock
shall surrender the certificate or certificates representing the Class B Common
Stock being converted, or so converted, duly assigned or endorsed for transfer
to the Corporation (or accompanied by duly executed stock powers relating
thereto), at the principal executive office of the Corporation, or at such
office of a transfer agent for the Class B Common Stock or office in the
continental United States of an agent for conversion as may from time to time be
designated by notice to the holders of the Class B Common Stock by the
Corporation, accompanied by written notice of conversion. Such notice of
conversion shall specify (i) the number of shares of Class B Common Stock that
are the subject of such conversion, (ii) the name or names in which such holder
wishes the certificate or certificates for Class A Common Stock and for any
Class B Common Stock not to be so converted to be issued, (iii) the address to
which such holder wishes delivery to be made of such new certificates to be
issued upon such conversion, (iv) the date upon which the person giving such
notice acquired the Class B Common Stock that is
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the subject of such notice of conversion and (v) that the conversion of such
Class B Common Stock is required pursuant to Section 4.2(e)(i) above or
permitted pursuant to Section 4.2(e)(ii) above. Upon surrender of a certificate
representing Class B Common Stock for conversion, the Corporation shall issue
and send by hand delivery, by courier or by overnight or first class mail
(postage prepaid) to the holder thereof or to such holder's designee, at the
address designated by such holder, a certificate or certificates for the number
of shares of Class A Common Stock to which such holder shall be entitled upon
conversion. In the event that there shall have been surrendered a certificate or
certificates representing Class B Common Stock, only part of which are to be
converted, the Corporation shall issue and send to such holder or such holder's
designee, in the manner set forth in the preceding sentence, a new certificate
or certificates representing the number of Class B Common Stock that shall not
have been converted. The issuance of certificates representing shares of Class A
Common Stock issuable upon the conversion of shares of Class B Common Stock by
the registered holder thereof pursuant to the provisions of this Certificate of
Incorporation shall be made without charge to the converting holder for any tax
imposed on the Corporation in respect of the issue thereof; provided that the
Corporation shall not be required to pay any tax that may be payable with
respect to any transfer involved in the issue and delivery of any certificate in
a name other than that of the registered holder of the shares of Class B Common
Stock being converted, and the Corporation shall not be required to issue or
deliver any such certificate unless and until the person requesting the issue
thereof shall have paid the amount of such tax or shall have established to the
satisfaction of the Corporation that such tax has been paid. Shares of the Class
B Common Stock converted into Class A Common Stock as provided in this Section
4.2(f) shall resume the status of authorized but unissued shares of Class B
Common Stock.
(g) Effective Date of Conversion. The issuance by the
Corporation of shares of Class A Common Stock upon a conversion of Class B
Common Stock into Class A Common Stock pursuant to Section 4.2(e)(i) above shall
be deemed to be effective upon the consummation or closing of the sale pursuant
to the Public Offering covering such Class B Common Stock. The issuance by the
Corporation of shares of Class A Common Stock upon conversion of Class B Common
Stock into Class A Common Stock pursuant to Section 4.2(e)(ii) above shall not
be deemed to be effective until receipt of a timely and complete Conversion
Request from the Transferee, reasonably satisfactory in form and substance to
the Corporation. The person or persons entitled to receive the Class A Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Class A Common Stock as of the
effective date of conversion.
(h) Liquidating Distributions. Upon any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
or upon any sale or conveyance of all or substantially all of the assets of the
Corporation, after payment or provision for payment of all the liabilities of
the Corporation and the expenses of liquidation, and after the holders of the
Preferred Stock shall have been paid in full the amounts, if any, to which they
are entitled or a sum sufficient for such payment in full shall have been set
aside, the remaining assets of the Corporation available for distribution shall
be distributed ratably to the holders of the Class A Common Stock and Class B
Common Stock in accordance with their respective rights and interests. For the
purpose of this Section 4.2(h), a merger, consolidation, sale or conveyance
shall not be deemed to be a
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liquidation or winding up of the Corporation unless the transaction provides for
the cessation of the business of the Corporation.
(i) Reservation of Class A Common Stock. The Corporation
shall at all times reserve and keep available out of its authorized and unissued
Class A Common Stock, solely for issuance upon the conversion of Class B Common
Stock as herein provided, free from any preemptive rights or other obligations,
such number of shares of Class A Common Stock as shall from time to time be
issuable upon the conversion of all the Class B Common stock then outstanding;
provided that, except as provided in this Certificate of Incorporation, the
shares of Class A Common Stock so reserved shall not be reduced or affected in
any manner whatsoever so long as any shares of Class B Common Stock are
outstanding.
4.3 Amendment and Waiver. No amendment, modification or waiver of any
provisions of Sections 4.1 or 4.2 hereof or of this Section 4.3 that adversely
affects the rights, preferences or privileges of the Class A Common Stock or
Class B Common Stock shall be effective without the affirmative vote of the
holders of at least 51% of the outstanding shares of such class of Common Stock
entitled to vote at a meeting of the holders of such class of Common Stock
duly called for such purpose.
4.4 Preferred Stock.
(a) Designations by Board of Directors. The Preferred Stock
may be issued from time to time in one or more classes or series with such
voting rights, full or limited, or without voting rights, and with such
designations, preferences and relative, participating, optional or special
rights, and qualifications, limitations or restrictions as are stated herein and
as shall be stated and expressed in the resolution or resolutions providing for
the issue of such stock adopted by the Board of Directors as hereinafter
prescribed.
(b) Terms of the Preferred Stock. Subject to the rights of the
holders of the Class A Common Stock and Class B Common Stock, authority is
hereby expressly granted to and vested in the Board of Directors or any
designated committee thereof to authorize the issuance of the Preferred Stock
from time to time in one or more classes or series, to determine and take
necessary proceedings to fully effectuate the issuance and redemption of any
such Preferred Stock and, with respect to each class or series of Preferred
Stock, to fix and state from time to time, by resolution or resolutions
providing for the issuance thereof, the following:
(i) the number of shares to constitute the class or series
and the designations thereof;
(ii) whether the class or series is to have voting rights,
full or limited, or to be without voting rights;
(iii) the preferences and relative, participating, optional
or special rights, if any, and qualifications, limitations or
restrictions thereof, if any, of the class or series;
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(iv) whether the shares of the class or series will be
redeemable and, if redeemable, the redemption price or prices and the
time or times at which, and the terms and conditions upon which, such
shares will be redeemable and the manner of redemption;
(v) whether the shares of the class or series will be
subject to the operation of retirement or sinking funds to be applied
to the purchase or redemption of such shares for retirement and, if
such retirement or sinking funds are to be established, the annual
amount thereof and the terms and conditions relative to the operation
thereof;
(vi) the dividend rate, whether dividends are payable
in cash, stock or otherwise, the conditions upon which and the times
when such dividends are payable, the preference or relation to the
payment of dividends on any other class or series of stock, whether or
not such dividends will be cumulative or noncumulative and, if
cumulative, the date or dates from which such dividends will
accumulate;
(vii) the preferences, if any, and the amounts thereof that
the holders of the class or series will be entitled to receive upon the
voluntary or involuntary dissolution, liquidation or winding up of, or
upon any distribution of the assets of, the Corporation;
(viii) whether the shares of the class or series will be
convertible into, or exchangeable for, the shares of any other class or
classes, or of any other series of the same or any other class or
classes, of stock of the Corporation and the conversion price or
prices, or ratio or ratios, or rate or rates, at which such conversion
or exchange may be made, with such adjustments, if any, as shall be
expressed or provided for in such resolution or resolutions; and
(ix) such other special rights and protective provisions
with respect to the class or series as the Board of Directors or any
designated committee thereof may deem advisable.
The shares of each class or series of Preferred Stock may
vary from the shares of any other class or series thereof in any or all of the
foregoing respects. The Board of Directors or any designated committee thereof
may from time to time increase the number of shares of Preferred Stock
designated for any existing class or series by a resolution adding to such class
or series authorized but unissued shares of Preferred Stock not designated for
any other class or series thereof. The Board of Directors or any designated
committee thereof may from time to time decrease the number of shares of
Preferred Stock designated for any existing class or series by a resolution
subtracting from such class or series any unissued shares of Preferred Stock
designated for such class or series, and the shares so subtracted shall become
authorized, unissued and undesignated shares of Preferred Stock.
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ARTICLE V
BOARD OF DIRECTORS
5.1 Number and Term of Directors. The Board of Directors shall
consist of not less than three nor more than fifteen members, with the exact
number to be fixed from time to time by resolution of the Board of Directors. No
decrease in the number of directors shall have the effect of shortening the term
of any incumbent director. The directors shall serve until their respective
successors are duly elected and qualified or until their earlier resignation,
death or removal from office. Except as may otherwise be provided by this
Certificate of Incorporation, the stockholders may remove a director from office
prior to the expiration of his or her term by an affirmative vote of two-thirds
of the outstanding shares of all capital stock entitled to vote at a
stockholders' meeting duly called for such purpose.
5.2 Director Vacancies. Except as may otherwise be provided by
this Certificate of Incorporation, (i) whenever any vacancy on the Board of
Directors occurs because of death, resignation, retirement, disqualification,
removal, increase in the number of directors or otherwise, a majority of the
directors then in office, although less than a majority of the entire Board of
Directors, may fill the vacancy or vacancies for the balance of the unexpired
term or terms, at which time a successor or successors shall be duly elected by
the stockholders and qualified, and (ii) only the remaining directors of the
Corporation shall have the authority, in accordance with the foregoing
procedure, to fill any vacancy that exists on the Board of Directors.
5.3 Elimination of Ballot for the Election of Directors.
The directors of the Corporation need not be elected by written ballot.
5.4 Amendment of By-laws. In furtherance and not in limitation of
the power conferred upon the Board of Directors by the Delaware General
Corporation Law, the Board of Directors shall have the power to make, adopt,
alter, amend and repeal from time to time the By-laws of the Corporation without
any action on the part of the stockholders except as otherwise specifically
provided in the By-laws of the Corporation.
5.5 Amendment. Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, this Article V shall not be
altered, amended or repealed except by an affirmative vote of at least
two-thirds of the outstanding shares of all capital stock entitled to vote at a
stockholders' meeting duly called for such purpose.
ARTICLE VI
INDEMNIFICATION RIGHTS AND LIMITATION OF DIRECTOR LIABILITY
6.1 Indemnification Rights.
(a) To the maximum extent permitted under the Delaware
General Corporation Law, the Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
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administrative or investigative (other than an action by or in the right of the
Corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding.
(b) To the maximum extent permitted under the Delaware
General Corporation Law, the Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit.
6.2 Advancement of Expenses.
(a) To the maximum extent permitted under the Delaware
General Corporation Law, the Corporation shall pay all expenses (including
attorneys' fees) actually and reasonably incurred by any person by reason of the
fact that such person is or was a director of the Corporation in defending any
civil, criminal, administrative or investigative action, suit or proceeding in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such person to repay such amount if it is
ultimately determined that he is not entitled to be indemnified by the
Corporation as authorized by the Delaware General Corporation Law.
(b) To the maximum extent permitted under the Delaware
General Corporation Law, the Corporation shall pay all expenses (including
attorneys' fees) actually and reasonably incurred by any person by reason of the
fact that such person is or was an officer of the Corporation in defending any
civil, criminal, administrative or investigative action, suit or proceeding
(other than an action by the Corporation on its own behalf, it being understood
that such an action does not include any derivative suit instituted by a
stockholder of the Corporation) in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
such person to repay such amount if it is ultimately determined that he is not
entitled to be indemnified by the Corporation as authorized by the Delaware
General Corporation Law.
6.3 Limitation on Liability of Directors. To the maximum extent
permitted under the Delaware General Corporation Law, a director of the
Corporation shall not be liable to the Corporation or its stockholders for
monetary damages for the breach of his or her fiduciary duty as a director.
6.4 Nonexclusivity and Benefit. The indemnification rights granted
pursuant to this Article VI shall not be exclusive of other indemnification
rights, if any, granted to such person and shall inure to the benefit of the
heirs and legal representatives of such person.
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6.5 Effect of Repeal, Amendment or Termination. To the maximum
extent permitted under the Delaware General Corporation Law, no repeal of or
restrictive amendment of this Article VI and no repeal, restrictive amendment or
termination of effectiveness of any law authorizing this Article VI shall apply
to or affect adversely any right or protection of any director, officer,
employee or agent of the Corporation, for or with respect to any acts or
omissions of such person occurring prior to such repeal, amendment or
termination of effectiveness.
6.6 Retroactive Effect. To the maximum extent permitted under the
Delaware General Corporation Law, the indemnification and advancement of
expenses provided by this Article VI shall apply with respect to acts or
omissions occurring prior to the adoption of this Article VI.
ARTICLE VII
STOCKHOLDERS
7.1 Elimination of Right of Stockholders to Act by Consent. No
action required to be taken or that may be taken at any annual or special
meeting of holders of the Common Stock may be taken without a vote at a meeting
duly called and held for such purpose, and the right of such holders to consent
in writing, without a meeting, to the taking of any action is specifically
denied.
7.2 Special Meetings. Except as otherwise required by the Delaware
General Corporation Law, special meetings of holders of the Common Stock may be
called only by (i) the Board of Directors pursuant to a resolution approved by a
majority of the entire Board of Directors, (ii) the Chairman of the Board, (iii)
the Vice-Chairman of the Board or (iv) the holders of at least 25% of the
outstanding shares of Common Stock entitled to vote at the special meeting. The
business transacted at any special meeting shall be limited to the purposes
stated in the notice of such meeting.
7.3 Amendment. Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, this Article VII shall not be
altered, amended or repealed except by an affirmative vote of at least
two-thirds of the outstanding shares of all capital stock entitled to vote at a
stockholders' meeting duly called for such purpose.
ARTICLE VIII
BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS
The Corporation hereby elects to be governed by Section 203 of the
Delaware General Corporation Law; provided that this Article VIII shall not
apply to restrict a "business combination," as such term is defined in Section
203 of the Delaware General Corporation Law, between the Corporation and an
"interested stockholder," as such term is defined in Section 203 of the Delaware
General Corporation Law, if the interested stockholder became such prior to the
effective date of this Certificate of Incorporation.
*
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CERTIFICATE OF DESIGNATION
OF SERIES A AND SERIES B PREFERRED STOCK OF
THE HAWK GROUP OF COMPANIES, INC.
PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
Ronald E. Weinberg and Byron S. Krantz, being the Vice-Chairman and
Secretary, respectively, of The Hawk Group of Companies, Inc., a Delaware
corporation (the "Corporation"), hereby certify that:
A. SERIES A PREFERRED STOCK. Pursuant to authority conferred upon the
Board of Directors of the Corporation by the Certificate of Incorporation of the
Corporation, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the Board of Directors, at a
telephonic board meeting held on June 26, 1995, duly adopted a resolution
creating a series of 2,625 shares of Serial Preferred Stock, par value $0.01 per
share, as follows:
RESOLVED, that pursuant to the authority expressly vested in the
Board of Directors of the Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the Corporation is
hereby created, consisting of 2,625 shares of Serial Preferred Stock, par value
$0.01 per share (the "Series A Preferred Stock"), of which the powers,
designations, preferences and relative, participating, optional or other rights,
and qualifications and restrictions, shall be as follows:
1. Series A Preferred Stock.
(a) Dividends.
(i) The holders of Series A Preferred Stock shall be
entitled to receive, out of funds legally available for that purpose, cash
dividends at the rate of 10% of the Series A Liquidation Preference (as
defined in Section 1(b) below) per annum. Such dividends shall be
cumulative as of the day on which the Series A Preferred Stock is first
issued (the "Series A Issue Date") and shall be payable in arrears, when
and as declared by the Board, on the last business day in April, July,
October and January of each year such Series A Preferred Stock is
outstanding to holders of record on such date, commencing in October
following the Series A Issue Date and prorated from the Series A Issue
Date until October 31, 1995. Dividends on account of arrearages for any
past due dividends may be declared and paid on any date to holders of
record on such payment date. Arrearages must be paid prior to the payment
of current dividends and shall be deemed to be paid first on account of
the longest outstanding arrearage.
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(ii) If full cash dividends have been declared and
are not paid or made available to holders of all outstanding shares of
Series A Preferred Stock and funds legally available are insufficient to
permit payment in full in cash to all such holders of the preferential
amounts to which they are then entitled, the entire amount legally
available for payment of cash dividends shall be distributed among the
holders of the Series A Preferred Stock ratably in proportion to the full
amount to which they would otherwise be respectively entitled, and any
remainder not paid in cash to the holders of the Series A Preferred Stock
shall cumulate as provided in Section 1(a)(iii).
(iii) If, on any dividend payment date, the holders of
the Series A Preferred Stock have not received the full dividends provided
for in Section 1(a)(i), then such dividends shall cumulate, whether or not
declared, with additional dividends thereon for each succeeding full
dividend period during which such dividends shall remain unpaid. Unpaid
dividends for any period less than a full dividend period shall cumulate
on a day-to-day basis and shall be computed on the basis of a 365-day
year.
(iv) So long as any shares of Series A Preferred
Stock are outstanding, the Corporation shall not declare or pay on any
Class A Common Stock or Class B Common Stock (as defined in the
Certificate of Incorporation of the Corporation) any dividend whatsoever,
whether in cash, property or otherwise, nor shall the Corporation make any
distribution on any Class A Common Stock or Class B Common Stock, nor
shall any Class A Common Stock or Class B Common Stock be purchased or
redeemed by the Corporation, nor shall any monies be paid or made
available for a sinking fund for the purchase or redemption of any Class A
Common Stock or Class B Common Stock, unless all dividends to which the
holders of the Preferred Stock are entitled to for all previous dividend
periods have been paid or declared and a sum of money sufficient for the
payment thereof set apart.
(b) Liquidation Rights. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, before any payment or distribution shall be made to the
holders of Class A Common Stock or Class B Common Stock, the holders of
each share of Series A Preferred Stock shall be entitled to receive an
amount equal to $1,000 per share (the "Series A Liquidation Preference")
plus any accrued or unpaid dividends thereon to such date. After the
payment or the setting apart for payment of amounts so payable to the
holders of the Series A Preferred Stock, the remaining assets of the
Corporation shall be available for distribution among the holders of Class
A Common Stock and Class B Common Stock according to their respective
rights and priorities. If the assets or surplus funds to be distributed to
the holders of the Series A Preferred Stock are insufficient to permit the
payment to such holders of the full preferential amounts to which they are
entitled, the assets and surplus funds legally available for distribution
shall be distributed ratably among the holders of the Series A Preferred
Stock in proportion to the full preferential amount each such holder is
otherwise entitled to receive.
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(c) Voting Rights.
(i) The holders of the issued and outstanding shares
of Series A Preferred Stock shall have no voting rights except as set
forth in this Section 1(c) and as required by the Delaware General
Corporation Law.
(ii) Subject to Section 1(c)(i), if and whenever the
Corporation fails to declare and pay in cash the full amount of dividends
payable on the Series A Preferred Stock on any six consecutive quarters,
then the holders of the Series A Preferred Stock, voting separately as a
class, shall be entitled at the next annual meeting of the stockholders of
the Corporation, or at any special meeting, to elect one director;
provided, however, that if the holders of the Series A Preferred Stock
previously have elected an additional director and the right to elect such
director has not terminated, the holders of the Series A Preferred Stock
shall not be entitled to elect an additional director under this Section
1(c)(ii) until such time as the holders of the Series A Preferred Stock
are no longer entitled to elect an additional director, subject, however,
to the right of the holders of the Series A Preferred Stock to vote for
the election of a successor director should the director previously
elected by the holders of the Series A Preferred Stock resign from the
Board, die or be removed by the holders of the Series A Preferred Stock.
Upon the effective date of such election, such
director shall become an additional director of the Corporation, and the
authorized number of directors of the Corporation thereupon automatically
shall be increased by one director. The holders of the Series A Preferred
Stock may exercise the right to elect a director until all dividends in
default on the Series A Preferred Stock have been paid in full, and
dividends for the current dividend period declared and funds therefor set
apart, and when so paid and set apart, the right of the holders of the
Series A Preferred Stock to elect a director pursuant to this Section
1(c)(ii) shall cease upon the day prior to the next annual meeting of the
stockholders of the Corporation, the term of such director shall thereupon
terminate, and the authorized number of directors of the Corporation shall
return to the number of authorized directors otherwise in effect, but
subject always to the same provisions for the vesting of such special
voting rights in the case of any such future dividend default or defaults.
At any time when special voting rights have been
vested in the holders of the Series A Preferred Stock pursuant to this
Section 1(c)(ii), the Secretary of the Corporation may, and upon the
written request of the holders of 10% or more of the number of shares of
the Series A Preferred Stock then outstanding addressed to such Secretary
at the principal office of the Corporation shall, call a special meeting
of the holders of the Series A Preferred Stock for the election of the
director to be elected by them as provided above, to be held in the case
of such written request within forty days after delivery of such request,
and in either case to be held at a place and upon the notice provided by
the Delaware General Corporation Law and in the By-Laws of the
Corporation.
(iii) If any amendment to the Certificate of
Incorporation of the Corporation is proposed that would change the
preferences herein provided or cause the
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13
issuance of preferred shares with attributes that are senior to the Series
A Preferred Stock or increase the number of shares of Class A Common Stock
or Class B Common Stock (except upon a public offering of the Class A
Common Stock or Class B Common Stock of the Corporation), then the holders
of the Series A Preferred Stock, voting separately as a class, shall be
entitled at a meeting of stockholders to vote on such amendment and such
amendment shall not be effected and no Series A Preferred Stock prohibited
hereby shall be issued absent the affirmative vote of the holders of 75%
of the issued and outstanding Series A Preferred Stock.
(iv) Any holder of Series A Preferred Stock entitled
to vote on any matter pursuant to this Section 1(c) may assign such voting
rights, revocably or irrevocably, to any other holder of Series A
Preferred Stock.
(d) Redemption.
(i) The Corporation may, at any time and from time
to time as may be determined by the Board, redeem all but not less than
all, of the Series A Preferred Stock, provided the Corporation is not in
default in the payment of any dividends on the Series A Preferred Stock
then outstanding, for an amount equal to the Series A Liquidation
Preference plus all accrued dividends to the date of redemption.
(ii) The redemption provided for in Section 1(d)(i)
may be for cash or for a debt instrument with an interest rate of 10%
payable quarterly for no more than five years (except that the debt will
accelerate in the event of a sale of more than 50% of the aggregate issued
and outstanding shares of Class A Common Stock and Class B Common Stock or
a sale of substantially all of the assets of the Corporation) and a
principal amount equal to the Series A Liquidation Preference of any and
all accrued but unpaid dividends on the Series A Preferred Stock, a
subordinated position with regard to creditors (but not less than the same
position of the Series A Preferred Stock) and other rights comparable to
the Series A Preferred Stock, including the right to elect one director of
the Corporation as and to the extent provided below.
The debt instrument shall require that if the
Corporation fails to pay in cash the full amount of interest payable on
the debt for six consecutive quarters, then the holders of the debt,
voting in accordance with the principal amount of the debt and with each
$1,000 of debt constituting one vote, shall be entitled at the next annual
meeting of the stockholders of the Corporation, or at any special meeting,
to elect one director; provided, however, that if the holders of the debt
previously have elected an additional director and the right to elect such
director has not terminated, the holders of the debt shall not be entitled
to elect an additional director, subject, however, to the right of the
holders of the debt to vote for the election of a successor director
should the director previously elected by the holders of the debt resign
from the Board, die or be removed by the holders of the debt. This right
to elect a director shall be set forth in an agreement in form and
substance satisfactory to counsel for the Corporation as a condition
precedent to the redemption of the Series A Preferred Stock with a debt
instrument.
-4-
14
(iii) The Corporation shall provide notice of any
redemption pursuant to this Section 1(d) specifying the time and place of
redemption, by first class or certified mail, postage prepaid, to each
holder of shares of Series A Preferred Stock at the address for such
holder last shown on the records of the Corporation or its transfer agent,
not more than sixty nor less than thirty days before the applicable
redemption date. Upon mailing of any such notice of redemption, the
Corporation shall become obligated to redeem Series A Preferred Stock
specified in such notice herein for cash or debt as provided in Section
1(d)(ii).
(iv) No redeemed shares of Series A Preferred Stock
shall be entitled to any dividends declared after the redemption date, and
on such date all rights of the holder of such shares as a stockholder of
the Corporation by reason of the ownership of such shares shall cease,
except the right to receive the price of or debt issued for such shares
without interest, upon presentation and surrender of the certificate
representing such shares, and such shares will not after such redemption
date be deemed to be outstanding.
(v) On or before the redemption date, if the shares
of Series A Preferred Stock are to be redeemed for cash, an amount equal
to the Series A Liquidation Preference, plus all accrued dividends to the
redemption date shall be deposited with a bank or trust company in a trust
fund for the benefit of the respective holders of the shares designated
for redemption with instructions and authority to the bank or trust
company to pay such price for such shares to the respective holders, after
the redemption date upon receipt of notification from the Corporation that
such holder has surrendered its share certificate to the Corporation. The
balance of any monies deposited by the Corporation remaining unclaimed at
the expiration of sixty days following the redemption date shall
thereafter be returned to the Corporation upon its request.
(e) Series. Except as set forth in this Certificate of
Designation, the Series A Preferred Stock shall have the same powers,
designations, preferences and relative, participating, optional or other
rights, and qualifications and restrictions, as the Series B Preferred
Stock.
B. SERIES B PREFERRED STOCK. Pursuant to authority conferred upon the
Board of Directors of the Corporation by the Certificate of Incorporation of the
Corporation, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the Board of Directors, at a
telephonic board meeting held on June 26, 1995, duly adopted a resolution
creating a series of 702 shares of Serial Preferred Stock, par value $0.01 per
share, as follows:
RESOLVED, that pursuant to the authority expressly vested in the Board
of Directors of the Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the Corporation is
hereby created, consisting of 702 shares of Serial Preferred Stock, par value
$0.01 per share (the "Series B Preferred Stock"), of which the powers,
designations, preferences and relative, participating, optional or other rights,
and qualifications and restrictions, shall be as follows:
-5-
15
2. Series B Preferred Stock.
(a) Dividends.
(i) The holders of Series B Preferred Stock shall
be entitled to receive, out of funds legally available for that
purpose, cash dividends at the rate of 9% of the Series B Liquidation
Preference (as defined in Section 2(b) below) per annum. Such dividends
shall be cumulative from the day on which the Series B Preferred Stock
is first issued (the "Series B Issue Date") and shall be payable in
arrears, when and as declared by the Board, on the first business day
in April, July, October and January of each year such Series B
Preferred Stock is outstanding to holders of record on such date,
commencing in October following the Series B Issue Date and prorated
from the Series B Issue Date until October 2, 1995. Dividends on
account of arrearages for any past due dividends may be declared and
paid on any date to holders of record on such payment date. Arrearages
must be paid prior to the payment of current dividends and shall be
deemed to be paid first on account of the longest outstanding
arrearage.
(ii) If full cash dividends have been declared and
are not paid or made available to holders of all outstanding shares of
Series B Preferred Stock and funds legally available are insufficient
to permit payment in full in cash to all such holders of the
preferential amounts to which they are then entitled, the entire amount
legally available for payment of cash dividends shall be distributed
among the holders of the Series B Preferred Stock ratably in proportion
to the full amount to which they would otherwise be respectively
entitled, and any remainder not paid in cash to the holders of the
Series B Preferred Stock shall cumulate as provided in Section
2(a)(iii).
(iii) If, on any dividend payment date, the holders
of the Series B Preferred Stock have not received the full dividends
provided for in Section 2(a)(i), then such dividends shall cumulate,
whether or not declared, with additional dividends thereon for each
succeeding full dividend period during which such dividends shall
remain unpaid. Unpaid dividends for any period less than a full
dividend period shall cumulate on a day-to-day basis and shall be
computed on the basis of a 365-day year.
(iv) So long as any shares of Series B Preferred
Stock are outstanding, the Corporation shall not declare or pay on any
Class A Common Stock or Class B Common Stock any dividend whatsoever,
whether in cash, property or otherwise, nor shall the Corporation make
any distribution on any Class A Common Stock or Class B Common Stock,
nor shall any Class A Common Stock or Class B Common Stock be purchased
or redeemed by the Corporation, nor shall any monies be paid or made
available for a sinking fund for the purchase or redemption of any
Class A Common Stock or Class B Common Stock, unless all dividends to
which the holders of the Series B Preferred Stock are entitled to for
all previous dividend periods have been paid or declared and a sum of
money sufficient for the payment thereof set apart.
-6-
16
(b) Liquidation Rights. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, before any payment or distribution shall be made
to the holders of Class A Common Stock or Class B Common Stock, the
holders of each share of Series B Preferred Stock shall be entitled to
receive an amount equal to $1,000 per share (the "Series B Liquidation
Preference") plus any accrued or unpaid dividends thereon to such
date. After the payment or the setting apart for payment of amounts so
payable to the holders of the Series B Preferred Stock, the remaining
assets of the Corporation shall be available for distribution among
the holders of Class A Common Stock and Class B Common Stock according
to their respective rights and priorities. If the assets or surplus
funds to be distributed to the holders of the Series B Preferred Stock
are insufficient to permit the payment to such holders of the full
preferential amounts to which they are entitled, the assets and
surplus funds legally available for distribution shall be distributed
ratably among the holders of the Series B Preferred Stock in
proportion to the full preferential amount each such holder is
otherwise entitled to receive.
(c) Voting Rights.
(i) The holders of the issued and outstanding
shares of Series B Preferred Stock shall have no voting rights except
as set forth in this Section 2(c) and as required by the Delaware
General Corporation Law.
(ii) Subject to Section 2(c)(i), if and
whenever the Corporation fails to declare and pay in cash the full
amount of dividends payable on the Series B Preferred Stock on any six
consecutive quarters, then the holders of the Series B Preferred Stock,
voting separately as a class, shall be entitled at the next annual
meeting of the stockholders of the Corporation, or at any special
meeting, to elect one director; provided, however, that if the holders
of the Series B Preferred Stock previously have elected an additional
director and the right to elect such director has not terminated, the
holders of the Series B Preferred Stock shall not be entitled to elect
an additional director under this Section 2(c)(ii) until such time as
the holders of the Series B Preferred Stock are no longer entitled to
elect an additional director, subject, however, to the right of the
holders of the Series B Preferred Stock to vote for the election of a
successor director should the director previously elected by the
holders of the Series B Preferred Stock resign from the Board, die or
be removed by the holders of the Series B Preferred Stock.
Upon the effective date of such election,
such director shall become an additional director of the Corporation,
and the authorized number of directors of the Corporation thereupon
automatically shall be increased by one director. The holders of the
Series B Preferred Stock may exercise the right to elect a director
until all dividends in default on the Series B Preferred Stock have
been paid in full, and dividends for the current dividend period
declared and funds therefor set apart, and when so paid and set apart,
the right of the holders of the Series B Preferred Stock to elect a
director pursuant to this Section 2(c)(ii) shall cease upon the day
prior to the next annual meeting of the stockholders of the
Corporation, the term of such director shall thereupon terminate, and
the authorized number of directors of the Corporation shall return to
the number of authorized directors
- 6 -
17
otherwise in effect, but subject always to the same provisions for the
vesting of such special voting rights in the case of any such future
dividend default or defaults.
At any time when special voting rights have
been vested in the holders of the Series B Preferred Stock pursuant to
this Section 2(c)(ii), the Secretary of the Corporation may, and upon
the written request of the holders of 10% or more of the number of
shares of the Series B Preferred Stock then outstanding addressed to
such Secretary at the principal office of the Corporation shall, call a
special meeting of the holders of the Series B Preferred Stock for the
election of the director to be elected by them as provided above, to be
held in the case of such written request within forty days after
delivery of such request, and in either case to be held at a place and
upon the notice provided by the Delaware General Corporation Law and in
the By-Laws of the Corporation.
(iii) If any amendment to the Certificate of
Incorporation of the Corporation is proposed that would change the
preferences herein provided or cause the issuance of preferred shares
with attributes that are senior to the Series B Preferred Stock or
increase the number of shares of Class A Common Stock or Class B Common
Stock (except upon a public offering of the Class A Common Stock or
Class B Common Stock of the Corporation), then the holders of the
Series B Preferred Stock, voting separately as a class, shall be
entitled at a meeting of stockholders to vote on such amendment and
such amendment shall not be effected and no Series B Preferred Stock
prohibited hereby shall be issued absent the affirmative vote of the
holders of 75% of the issued and outstanding Series B Preferred Stock.
(iv) Any holder of Series B Preferred Stock
entitled to vote on any matter pursuant to this Section 2(c) may assign
such voting rights, revocably or irrevocably, to any other holder of
Series B Preferred Stock.
(d) Redemption.
(i) The Corporation may, at any time and from
time to time as may be determined by the Board, redeem all but not less
than all, of the Series B Preferred Stock, provided the Corporation is
not in default in the payment of any dividends on the Series B
Preferred Stock then outstanding, for an amount equal to the Series B
Liquidation Preference plus all accrued dividends to the date of
redemption.
(ii) The redemption provided for in Section
2(d)(i) may be for cash or for a debt instrument with an interest rate
of 9% payable quarterly for no more than seven years (except that the
debt will accelerate in the event of a sale of more than 50% of the
aggregate issued and outstanding shares of Class A Common Stock and
Class B Common Stock or a sale of substantially all of the assets of
the Corporation or of Helsel) and a principal amount equal to the
Series B Liquidation Preference of any and all accrued but unpaid
dividends on the Series B Preferred Stock, a subordinated position with
regard to creditors (but not less than the same position of the Series
B Preferred Stock) and other rights
-8-
18
comparable to the Series B Preferred Stock, including the right to
elect one director of the Corporation as and to the extent provided
below.
The debt instrument shall require that if the
Corporation fails to pay in cash the full amount of interest payable on
the debt for six consecutive quarters, then the holders of the debt,
voting in accordance with the principal amount of the debt and with
each $1,000 of debt constituting one vote, shall be entitled at the
next annual meeting of the stockholders of the Corporation, or at any
special meeting, to elect one director; provided, however, that if the
holders of the debt previously have elected an additional director and
the right to elect such director has not terminated, the holders of the
debt shall not be entitled to elect an additional director, subject,
however, to the right of the holders of the debt to vote for the
election of a successor director should the director previously elected
by the holders of the debt resign from the Board, die or be removed by
the holders of the debt. This right to elect a director shall be set
forth in an agreement in form and substance satisfactory to counsel for
the Corporation as a condition precedent to the redemption of the
Series B Preferred Stock with a debt instrument.
(iii) The Corporation shall provide notice of any
redemption pursuant to this Section 2(d) specifying the time and place
of redemption, by first class or certified mail, postage prepaid, to
each holder of shares of Series B Preferred Stock at the address for
such holder last shown on the records of the Corporation or its
transfer agent, not more than sixty nor less than thirty days before
the applicable redemption date. Upon mailing of any such notice of
redemption, the Corporation shall become obligated to redeem Series B
Preferred Stock specified in such notice herein for cash or debt as
provided in Section 2(d)(ii).
(iv) No redeemed shares of Series B Preferred
Stock shall be entitled to any dividends declared after the redemption
date, and on such date all rights of the holder of such shares as a
stockholder of the Corporation by reason of the ownership of such
shares shall cease, except the right to receive the price of or debt
issued for such shares without interest, upon presentation and
surrender of the certificate representing such shares, and such shares
will not after such redemption date be deemed to be outstanding.
(v) On or before the redemption date, if the
shares of Series B Preferred Stock are to be redeemed for cash, an
amount equal to the Series B Liquidation Preference, plus all accrued
dividends to the redemption date shall be deposited with a bank or
trust company in a trust fund for the benefit of the respective holders
of the shares designated for redemption with instructions and authority
to the bank or trust company to pay such price for such shares to the
respective holders, after the redemption date upon receipt of
notification from the Corporation that such holder has surrendered its
share certificate to the Corporation. The balance of any monies
deposited by the Corporation remaining unclaimed at the expiration of
sixty days following the redemption date shall thereafter be returned
to the Corporation upon its request.
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19
(e) Series. Except as set forth in this Certificate
of Designation, the Series B Preferred Stock shall have the same
powers, designations, preferences and relative, participating, optional
or other rights, and qualifications and restrictions, as the Series A
Preferred Stock.
IN WITNESS WHEREOF, the undersigned have signed this Certificate of
Designation as of this 30th day of June, 1995.
/s/ Ronald E. Weinberg
--------------------------------------
RONALD E. WEINBERG, Vice-Chairman
Attested by:
/s/ Byron S. Krantz
--------------------------------------
BYRON S. KRANTZ, Secretary
-10-
20
CERTIFICATE OF DESIGNATION
OF
THE SERIES C PREFERRED STOCK
OF
HAWK CORPORATION
PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
Ronald E. Weinberg and Byron S. Krantz, being the Vice-Chairman of the
Board and Secretary, respectively, of Hawk Corporation, a Delaware corporation
(the "Corporation"), hereby certify that:
Pursuant to authority conferred upon the Board of Directors of the
Corporation by the Certificate of Incorporation of the Corporation, and pursuant
to the provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors, at a telephonic board meeting held on November
16, 1996, duly adopted a resolution creating a new series of 1,189 shares of
Serial Preferred Stock, par value $0.01 per share, as follows:
RESOLVED, that pursuant to the authority expressly vested in the Board
of Directors of the Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the Corporation is
hereby created, consisting of 1,189 shares of Serial Preferred Stock, par value
$0.01 per share (the "Series C Preferred Stock"), of which the powers,
designations, preferences and relative, participating, optional or other rights,
and qualifications and restrictions, shall be as follows:
3. Series C Preferred Stock.
(a) Dividends.
(i) The holders of Series C Preferred Stock
shall be entitled to receive, out of funds legally available for that
purpose, cash dividends at the rate of 10% of the Series C Liquidation
Preference (as defined in Section 3(b) below) per annum. Such dividends shall be
cumulative as of the day on which the Series C Preferred Stock is first issued
(the "Series C Issue Date") and shall be payable in arrears, when and as
declared by the Board (as defined in the Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") of the Corporation), on the
last business day in April, July, October and January of each year such Series C
Preferred Stock is outstanding to holders of record on such date, commencing in
October following the Series C Issue Date and prorated from the Series C Issue
Date until January 31, 1997. Dividends on account of arrearages for any past due
dividends may be declared and paid on any date to holders of record on such
payment date. Arrearages must be paid prior to the payment of current dividends
and shall be deemed to be paid first on account of the longest outstanding
arrearage.
21
(ii) If full cash dividends have been declared
and are not paid or made available to holders of all outstanding shares of
Series C Preferred Stock and funds legally available are insufficient to permit
payment in full in cash to all such holders of the preferential amounts to which
they are then entitled, the entire amount legally available for payment of cash
dividends shall be distributed among the holders of the Series C Preferred Stock
ratably in proportion to the full amount to which they would otherwise be
respectively entitled, and any remainder not paid in cash to the holders of the
Series C Preferred Stock shall cumulate as provided in Section 3(a)(iii).
(iii) If, on any dividend payment date, the
holders of the Series C Preferred Stock have not received the full dividends
provided for in Section 3(a)(i), then such dividends shall cumulate, whether or
not declared, with additional dividends thereon for each succeeding full
dividend period during which such dividends shall remain unpaid. Unpaid
dividends for any period less than a full dividend period shall cumulate on a
day-to-day basis and shall be computed on the basis of a 365-day year.
(iv) So long as any shares of Series C Preferred
Stock are outstanding, the Corporation shall not declare or pay on any Class A
Common Stock or Class B Common Stock (as defined in the Certificate of
Incorporation of the Corporation) any dividend whatsoever, whether in cash,
property or otherwise, nor shall the Corporation make any distribution on any
Class A Common Stock or Class B Common Stock, nor shall any Class A Common Stock
or Class B Common Stock be purchased or redeemed by the Corporation, nor shall
any monies be paid or made available for a sinking fund for the purchase or
redemption of any Class A Common Stock or Class B Common Stock, unless all
dividends to which the holders of the Preferred Stock (as defined in the
Certificate of Incorporation of the Corporation) are entitled to for all
previous dividend periods have been paid or declared and a sum of money
sufficient for the payment thereof set apart.
(b) Liquidation Rights. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, before any payment or distribution shall be made to the holders of
Class A Common Stock or Class B Common Stock, the holders of each share of
Series C Preferred Stock shall be entitled to receive an amount equal to $1,000
per share (the "Series C Liquidation Preference") plus any accrued or unpaid
dividends thereon to such date. After the payment or the setting apart for
payment of amounts so payable to the holders of the Series C Preferred Stock,
the remaining assets of the Corporation shall be available for distribution
among the holders of Class A Common Stock and Class B Common Stock according to
their respective rights and priorities. If the assets or surplus funds to be
distributed to the holders of the Series C Preferred Stock are insufficient to
permit the payment to such holders of the full preferential amounts to which
they are entitled, the assets and surplus funds legally available for
distribution shall be distributed ratably among the holders of the Series C
Preferred Stock in proportion to the full preferential amount each such holder
is otherwise entitled to receive.
(c) Voting Rights.
(i) The holders of the issued and outstanding
shares of Series C Preferred Stock shall have no voting rights except as set
forth in this Section 3(c) and as otherwise required
-2-
22
by the Delaware General Corporation Law (as defined in the Certificate of
Incorporation of the Corporation).
(ii) Subject to Section 3(c)(i), if and whenever
the Corporation fails to declare and pay in cash the full amount of
dividends payable on the Series C Preferred Stock on any six consecutive
quarters, then the holders of the Series C Preferred Stock, voting separately as
a class, shall be entitled at the next annual meeting of the stockholders of the
Corporation, or at any special meeting, to elect one director; provided,
however, that if the holders of the Series C Preferred Stock previously have
elected an additional director and the right to elect such director has not
terminated, the holders of the Series C Preferred Stock shall not be entitled to
elect an additional director under this Section 3(c)(ii) until such time as the
holders of the Series C Preferred Stock are no longer entitled to elect an
additional director, subject, however, to the right of the holders of the Series
C Preferred Stock to vote for the election of a successor director should the
director previously elected by the holders of the Series C Preferred Stock
resign from the Board, die or be removed by the holders of the Series C
Preferred Stock.
Upon the effective date of such election,
such director shall become an additional director of the Corporation, and the
authorized number of directors of the Corporation thereupon automatically shall
be increased by one director. The holders of the Series C Preferred Stock may
exercise the right to elect a director until all dividends in default on the
Series C Preferred Stock have been paid in full, and dividends for the current
dividend period declared and funds therefor set apart, and when so paid and set
apart, the right of the holders of the Series C Preferred Stock to elect a
director pursuant to this Section 1(c)(ii) shall cease upon the day prior to the
next annual meeting of the stockholders of the Corporation, the term of such
director shall thereupon terminate, and the authorized number of directors of
the Corporation shall return to the number of authorized directors otherwise in
effect, but subject always to the same provisions for the vesting of such
special voting rights in the case of any such future dividend default or
defaults.
At any time when special voting rights have
been vested in the holders of the Series C Preferred Stock pursuant to this
Section 3(c)(ii), the Secretary of the Corporation may, and upon the written
request of the holders of 10% or more of the number of shares of the Series C
Preferred Stock then outstanding addressed to such Secretary at the principal
office of the Corporation shall, call a special meeting of the holders of the
Series C Preferred Stock for the election of the director to be elected by them
as provided above, to be held in the case of such written request within forty
days after delivery of such request, and in either case to be held at a place
and upon the notice provided by the Delaware General Corporation Law and in the
By-Laws of the Corporation.
(iii) If any amendment to the Certificate of
Incorporation of the Corporation is proposed that would change the preferences
herein provided or cause the issuance of preferred shares with attributes that
are senior to the Series C Preferred Stock or increase the number of shares of
Class A Common Stock or Class B Common Stock (except upon a public offering of
the Class A Common Stock or Class B Common Stock of the Corporation), then the
holders of the Series C Preferred Stock, voting separately as a class, shall be
entitled at a meeting of stockholders to vote on such amendment and such
amendment shall not be effected and no Series C Preferred
-3-
23
Stock prohibited hereby shall be issued absent the affirmative vote of the
holders of 75% of the issued and outstanding Series C Preferred Stock.
(iv) Any holder of Series C Preferred Stock
entitled to vote on any matter pursuant to this Section 3(c) may assign such
voting rights, revocably or irrevocably, to any other holder of Series C
Preferred Stock.
(d) Redemption.
(i) The Corporation may, at any time and from
time to time as may be determined by the Board, redeem all but not less than
all, of the Series C Preferred Stock, provided the Corporation is not in default
in the payment of any dividends on the Series C Preferred Stock then
outstanding, for an amount equal to the Series C Liquidation Preference plus all
accrued dividends to the date of redemption.
(ii) The redemption provided for in Section
3(d)(i) may be for cash or for a debt instrument with an interest rate of 10%
payable quarterly for no more than five years (except that the debt will
accelerate in the event of a sale of more than 50% of the aggregate issued and
outstanding shares of Class A Common Stock and Class B Common Stock or a sale of
substantially all of the assets of the Corporation) and a principal amount equal
to the Series C Liquidation Preference of any and all accrued but unpaid
dividends on the Series C Preferred Stock, a subordinated position with regard
to creditors (but not less than the same position of the Series C Preferred
Stock) and other rights comparable to the Series C Preferred Stock, including
the right to elect one director of the Corporation as and to the extent provided
below.
The debt instrument shall require that if
the Corporation fails to pay in cash the full amount of interest payable on the
debt for six consecutive quarters, then the holders of the debt, voting in
accordance with the principal amount of the debt and with each $1,000 of debt
constituting one vote, shall be entitled at the next annual meeting of the
stockholders of the Corporation, or at any special meeting, to elect one
director; provided, however, that if the holders of the debt previously have
elected an additional director and the right to elect such director has not
terminated, the holders of the debt shall not be entitled to elect an additional
director, subject, however, to the right of the holders of the debt to vote for
the election of a successor director should the director previously elected by
the holders of the debt resign from the Board, die or be removed by the holders
of the debt. This right to elect a director shall be set forth in an agreement
in form and substance satisfactory to counsel for the Corporation as a condition
precedent to the redemption of the Series C Preferred Stock with a debt
instrument.
(iii) The Corporation shall provide notice of any
redemption pursuant to this Section 3(d) specifying the time and place of
redemption, by first class or certified mail, postage prepaid, to each holder of
shares of Series C Preferred Stock at the address for such holder last shown on
the records of the Corporation or its transfer agent, not more than sixty nor
less than thirty days before the applicable redemption date. Upon mailing of any
such notice of redemption, the Corporation shall become obligated to redeem
Series C Preferred Stock specified in such notice herein for cash or debt as
provided in Section 3(d)(ii).
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(iv) No redeemed shares of Series C Preferred
Stock shall be entitled to any dividends declared after the redemption date, and
on such date all rights of the holder of such shares as a stockholder of the
Corporation by reason of the ownership of such shares shall cease, except the
right to receive the price of or debt issued for such shares without interest,
upon presentation and surrender of the certificate representing such shares, and
such shares will not after such redemption date be deemed to be outstanding.
(v) On or before the redemption date, if the
shares of Series C Preferred Stock are to be redeemed for cash, an amount
equal to the Series C Liquidation Preference, plus all accrued dividends to the
redemption date shall be deposited with a bank or trust company in a trust fund
for the benefit of the respective holders of the shares designated for
redemption with instructions and authority to the bank or trust company to pay
such price for such shares to the respective holders, after the redemption date
upon receipt of notification from the Corporation that such holder has
surrendered its share certificate to the Corporation. The balance of any monies
deposited by the Corporation remaining unclaimed at the expiration of sixty days
following the redemption date shall thereafter be returned to the Corporation
upon its request.
(e) Series. Except as set forth in this Certificate of
Designation, the Series C Preferred Stock shall have the same powers,
designations, preferences and relative, participating, optional or other rights,
and qualifications and restrictions, as the Series A and Series B Preferred
Stock (as defined in the Certificate of Incorporation of the Corporation).
IN WITNESS WHEREOF, the undersigned have signed this Certificate of
Designation as of this 27th day of November, 1996.
/s/ Ronald E. Weinberg
-----------------------------------
RONALD E. WEINBERG, Vice-Chairman
Attested by:
/s/ Byron S. Krantz
-----------------------------------
BYRON S. KRANTZ, Secretary
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