1
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 liquidation
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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 Bylaws. 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 Bylaws 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. 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, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason
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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. 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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IN WITNESS WHEREOF, the undersigned have executed and subscribed this
Second Amended and Restated Certificate of Incorporation, and hereby affirm the
foregoing as true under the penalties of perjury, as of this _____ day of
May, 1998.
---------------------------------
Name: Norman C. Harbert
Title: Chairman of the Board
Attest:
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Name: Byron S. Krantz
Title: Secretary
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FORM
OF
CERTIFICATE OF DESIGNATION
OF
THE SERIES D PREFERRED STOCK
OF
HAWK CORPORATION
PURSUANT TO SECTION 151 OF THE DELAWARE GENERAL CORPORATION LAW
Norman C. Harbert and Byron S. Krantz, being the 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 Delaware General
Corporation Law, the Board of Directors, at a telephonic meeting held on
November 13, 1997, duly adopted a resolution creating a new series of
Serial Preferred Stock, par value $0.01 per share, of the Corporation,
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 new series of Serial Preferred Stock of the
Corporation is hereby created, of which the powers,
designations, preferences and relative, participating, optional
or other rights, and qualifications and restrictions, shall be
as follows:
Section 1. Effective Date. The provisions of this Certificate of
Designation shall become effective only upon the effective date of the initial
public offering of shares of Common Stock described in the Corporation's
Registration Statement on Form S-1 (Reg. No.333-40535), as originally filed with
the Securities and Exchange Commission on November 19, 1997, as amended from
time to time (the "Effective Date").
Section 2. Designation and Amount. There shall be a series of the
Serial Preferred Stock of the Corporation that shall be designated as the
"Series D Preferred Stock," par value $0.01 per share, and the number of shares
constituting such series shall be 1,530. Subject to Section 5 hereof, such
number of shares may be increased or decreased by resolution of the Board of
Directors; provided that no decrease shall reduce the number of shares of Series
D Preferred Stock to a number less than that of the shares of Series D Preferred
Stock then outstanding. Any capitalized terms used herein without definition
shall have the meanings assigned to them in the Certificate of Incorporation of
the Corporation.
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Section 3. Dividends and Distributions.
(a) The holders of Series D Preferred Stock shall be entitled
to receive, out of funds legally available for that purpose, cash dividends at
the rate of nine and four-fifths percent (9.8%) of the Series D Liquidation
Preference (as defined in Section 4 hereof) per annum. Such dividends shall be
cumulative from the Effective Date and shall be payable quarterly in arrears,
when and as declared by the Board of Directors, on the last business day in
March, June, September and December of each year that such Series D Preferred
Stock is outstanding to holders of record on such date, commencing on the
Effective Date and prorated from the Effective Date through March 31, 1998.
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.
(b) If full cash dividends have been declared and are not paid
or made available to the holders of all outstanding shares of Series D 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, then the entire amount legally available for payment of cash dividends
shall be distributed among the holders of the Series D 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 D
Preferred Stock shall cumulate as provided in Section 3(c) hereof.
(c) If on any dividend payment date, the holders of the Series
D Preferred Stock have not received the full dividends provided for in Section
3(a) hereof 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.
(d) So long as any shares of Series D Preferred Stock are
outstanding, the Corporation shall not declare or pay on any Common Stock any
dividend whatsoever, whether in cash, stock, property or otherwise, nor shall
the Corporation make any distribution on any Common Stock, nor shall any 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
Common Stock, unless all dividends to which the holders of the Series D
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.
Section 4. 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
Common Stock, the holders of each share of Series D Preferred Stock shall be
entitled to receive an amount of cash equal to $1,000 per share (the "Series D
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 D Preferred Stock, the
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remaining assets of the Corporation shall be available for distribution among
the holders of Common Stock according to their respective rights and priorities.
If the assets or surplus funds to be distributed to the holders of the Series D
Preferred Stock are insufficient to permit the payment to such holders of the
full preferential amounts to which they are entitled, then the assets and
surplus fluids legally available for distribution shall be distributed ratably
among the holders of the Series D Preferred Stock ratably in proportion to the
full preferential amount each such holder is otherwise entitled to receive.
Section 5. Voting Rights.
(a) Subject to Sections 5(b), 5(c) and 5(d) hereof, and
notwithstanding any provisions of the Certificate of Incorporation to the
contrary, the holders of the shares of Series D Preferred Stock issued and
outstanding from time to time shall have the right, acting as a separate class,
to:
(i) Elect a majority of the directors to the Board of
Directors (the directors elected by the holders of the Series D
Preferred Stock being hereinafter referred to as the "Series D
Preferred Directors").
(ii) Fill any vacancy or vacancies on the Board of
Directors caused by the death, resignation, retirement,
disqualification or removal of any of the Series D Preferred Directors.
(iii) Remove a Series D Preferred Director from the Board
of Directors prior to the expiration of his or her term, with or
without cause, by an affirmative vote of at least a majority of the
outstanding shares of Series D Preferred Stock entitled to vote. Only
the holders of shares of Series D Preferred Stock may remove a Series D
Preferred Director from the Board of Directors.
(iv) Vote on any proposal submitted to the stockholders of
the Corporation for approval that would: (A) amend, alter or repeal any
of the provisions of the Certificate of Incorporation so as to
adversely affect any right, preference, privilege or voting power of
the Series D Preferred Stock or the holders thereof including, without
limitation, any proposal to change the method of electing the members
of the Board of Directors; (B) provide for the consolidation or merger
of the Corporation with one or more other corporations or entities or
the sale, lease, exchange, transfer or other disposition of all or
substantially all of the Corporation's assets, provided, however, that
the purchase for cash, stock or otherwise by the Corporation of all or
any part of the assets, stock or other securities of another
corporation or entity shall not be deemed to be such a consolidation or
merger; or (C) create or authorize, or increase the authorized or
issued amount of any class or series of capital stock ranking senior to
the Series D Preferred Stock with respect to payment of dividends or
the distribution of assets upon liquidation, dissolution or winding up,
or reclassify any authorized capital stock of the Corporation into any
such shares, or create, authorize or issue any obligation or security
convertible into or evidencing the right to
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purchase any such shares. No such proposal shall be adopted or effected
absent the affirmative vote or written consent of the holders of at
least a majority of the outstanding shares of Series D Preferred Stock
entitled to vote.
(b) The holders of all shares of Series D Preferred Stock
shall permanently cease to have any of the voting rights specified in Section
5(a) hereof from and after the earlier to occur of:
(i) the date that the last of each of the Harbert Family
Group (as defined in Section 5(e) hereof) and the Weinberg Family Group
(as defined in Section 5(e) hereof) shall Transfer (as defined in
Section 5(e) hereof) a portion of its Class A Common Stock so as to
reduce its Aggregate Equity Interest (as defined in Section 5(e)
hereof) in the Corporation to less than fifty percent (50%) of its
Initial Aggregate Equity Interest (as defined in Section 5(e) hereof)
in the Corporation; and
(ii) the death of the last to die of Norman C. Harbert,
Carl J. Harbert II, Ronald E. Weinberg, Sr. or Ronald E. Weinberg, Jr.
(c) A Family Group (as defined in Section 5(e) hereof) shall
permanently cease to have any of the voting rights specified in Section 5(a)
hereof with respect to all of its shares of Series D Preferred Stock from and
after the earlier to occur of:
(i) the date that such Family Group shall Transfer a
portion of its Class A Common Stock so as to reduce its Aggregate
Equity Interest in the Corporation to less than fifty percent (50%) of
its Initial Aggregate Equity Interest in the Corporation; and
(ii) the date that any member of such Family Group shall
Transfer any shares of Series D Preferred Stock, or shall grant or
assign (or agree to grant or assign) any right to vote or proxy with
respect to any such shares, in contravention of the restrictions set
forth in Section 6 hereof.
(d) No Person to whom any shares of Series D Preferred Stock
are Transferred, or to whom any right to vote or proxy with respect any shares
of Series D Preferred Stock is granted or assigned, in contravention of the
restrictions set forth in Section 6 hereof shall have any of the voting rights
specified in Section 5(a) hereof. In the event that any Person that is not an
individual and that is a member of a Family Group ceases to be controlled by or
maintained principally for the benefit of a member of any Family Group, such
Person shall cease to have any of the voting rights specified in Section 5(a)
hereof.
(e) For purposes hereof the following capitalized terms have
the meanings specified below:
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(i) "Aggregate Equity Interest" shall mean the aggregate
equity interest in the Corporation of a particular Family Group
represented by the total number of shares of Class A Common Stock held
thereby.
(ii) "Family Group" shall mean any of the Harbert Family
Group, the Weinberg Family Group or the Krantz Family Group.
(iii) "Harbert Family Group" shall mean Norman C. Harbert,
members of the immediate family of the foregoing, any other lineal
descendants of the foregoing, any estate of any of the foregoing, any
trusts established principally for the benefit of any of the foregoing,
and any other entity controlled by any of the foregoing (including,
without limitation, the Harbert Family Limited Partnership), but shall
not include any entity that ceases to be controlled by or maintained
principally for the benefit of a member of the Harbert Family Group.
(iv) "Initial Aggregate Equity Interest" shall mean the
Aggregate Equity Interest of a Family Group on the Effective Date, as
appropriately adjusted to reflect any subsequent subdivision or
combination of the outstanding shares of Class A Common Stock into a
greater or lesser number of shares of Class A Common Stock, whether as
a result of a merger, consolidation, stock split, stock dividend,
reclassification or otherwise.
(v) "Krantz Family Group" shall mean Byron S. Krantz,
members of the immediate family of the foregoing, any other lineal
descendants of the foregoing, any estate of any of the foregoing, any
trusts established principally for the benefit of any of the foregoing,
and any other entity controlled by any of the foregoing (including,
without limitation, the Krantz Family Limited Partnership), but shall
not include any entity that ceases to be controlled by or maintained
principally for the benefit of a member of the Krantz Family Group.
(vi) "Person" shall mean any individual, corporation,
partnership, limited liability company, estate, trust, association,
private foundation, joint stock company or other entity, and shall also
mean a "group" as the term is used for purposes of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended.
(vii) "Transfer" shall mean any sale, transfer, gift,
hypothecation, pledge, assignment, devise or other disposition of
shares of Class A Common Stock or Series D Preferred Stock (including
the granting of any option to purchase, or the execution and delivery
of any agreement for the sale, transfer or other disposition of such
shares), whether voluntary, involuntary or by operation of law, and
whether of record, constructively, beneficially or otherwise. The terms
"Transfers" and "Transferred" shall have correlative meanings.
(viii) "Weinberg Family Group" shall mean Ronald E.
Weinberg, Sr., members of the immediate family of the foregoing, any
other lineal descendants of the
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foregoing, any estate of any of the foregoing, any trusts established
principally for the benefit of any of the foregoing, and any other
entity controlled by any of the foregoing (including, without
limitation, the Weinberg Family Limited Partnership), but shall not
include any entity that ceases to be controlled by or maintained
principally for the benefit of a member of the Weinberg Family Group.
Section 6. Restrictions on Transfer.
(a) Until the Restrictions Termination Date (as defined in
Section 6(d) hereof) or until the holders of all outstanding shares of Series D
Preferred Stock agree otherwise in writing:
(i) Shares of Series D Preferred Stock may be Transferred
only among the Family Groups and among the members of such Family
Groups. Any Transfer of shares of Series D Preferred Stock in
contravention of such restriction shall have the consequences set forth
in Sections 5(c)(ii) and 5(d) hereof. In the event that any Person that
is not an individual and that is a member of a Family Group ceases to
be controlled by or maintained principally for the benefit of a member
of any Family Group, such event shall constitute a constructive
Transfer in contravention of this Section 6(a).
(ii) A holder of Series D Preferred Stock having the
voting rights set forth in Section 5(a) hereof may only grant or assign
such voting rights, revocably or irrevocably, to one or more Family
Groups or members of a Family Group.
(iii) Each certificate for shares of Series D Preferred
Stock issued by the Corporation shall bear the following legend:
The shares of Series D Preferred Stock represented by this
certificate are subject to certain restrictions set forth in
the Certificate of Designation of the Series D Preferred
Stock, which is incorporated by operation of law in the
Certificate of Incorporation of the Corporation. Any transfer
of the shares of Series D Preferred Stock represented by this
certificate in contravention of such restrictions shall result
in the loss of all voting rights applicable to such shares,
except as otherwise required by the Delaware General
Corporation Law. The Corporation will mail without charge to
any requesting stockholder a copy of the Certificate of
Incorporation, including the express terms of each class and
series of the authorized capital Stock of the Corporation,
within five days after receipt of a written request therefor.
(b) For purposes hereof the term "Restrictions Termination
Date" shall mean the date that all holders of Series D Preferred Stock
permanently cease to have any of the voting rights specified in Section 5(a)
hereof in accordance with the provisions of Section 5(b) or 5(c) hereof.
Section 7. Special Meetings. The Secretary of the Corporation may, and
upon the written request of the holders of at least ten percent (10%) of the
number of shares of the Series D
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Preferred Stock then outstanding addressed to the Secretary at the principal
office of the Corporation shall, call a special meeting of the holders of the
Series D Preferred Stock for the purpose of exercising any of the voting rights
described in Section 5(a) hereof to be held in the case of such written request
within thirty 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.
Section 8. Redemption.
(a) The Corporation may, at any time and from time to time as
may be determined by the Board of Directors, redeem all but not less than all,
of the Series D Preferred Stock for an amount equal to the Series D Liquidation
Preference plus all accrued dividends to the date of redemption, provided that
(i) the Corporation is not in default in the payment of any dividends on the
Series D Preferred Stock then outstanding, and (ii) the Corporation has obtained
the consent of any and all holders of Series D Preferred Stock that then have
any of the voting rights set forth in Section 5(a) hereof.
(b) The Corporation shall provide notice of any redemption
pursuant to this Section 8 specifying the time and place of redemption, by first
class or certified mail, postage prepaid, to each holder of shares of Series D
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 D Preferred
Stock specified in such notice.
(c) No redeemed shares of Series D 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 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.
(d) On or before the redemption date, the Corporation shall
deposit an amount equal to the Series D Liquidation Preference, plus all accrued
dividends to the redemption date, for all outstanding shares of Series D
Preferred Stock with a bank or trust company in a trust fund for the benefit of
the respective holders of the shares designated for redemption together 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 all of the
certificates representing such holder's shares of Series D Preferred Stock to
the Corporation. The Corporation shall have the right to request the return of
the balance of any monies deposited by the Corporation remaining unclaimed at
the expiration of sixty days following the redemption date.
Section 9. Reacquired Shares. Any shares of Series D Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled
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promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Serial Preferred Stock and
may be reissued as part of a new series of Serial Preferred Stock to be created
by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
Section 10. Ranking. Subject to Section 5(a)(iv)(C) hereof the Series D
Preferred Stock shall rank on a parity with all other series of the Serial
Preferred Stock as to the payment of dividends and the distribution of assets.
Section 11. Severability. In the event any term, provision, sentence or
paragraph of this Certificate of Designation is declared by a court of competent
jurisdiction to be invalid or unenforceable, such term, provision, sentence or
paragraph shall be deemed severed from the remainder of this Certificate of
Designation, and the balance of this Certificate of Designation shall remain in
effect and be enforced to the fullest extent permitted by law and shall be
construed to preserve the intent and purposes of this Certificate of
Designation. Any such invalidity or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such term, provision, sentence or
paragraph of this Certificate of Designation in any other jurisdiction.
IN WITNESS WHEREOF, the undersigned have executed and subscribed this
Certificate of Designation, and hereby affirm the foregoing as true under the
penalties of perjury, as of this _____ day of May, 1998.
------------------------------
Name: Norman C. Harbert
Title: Chairman of the Board
Attest:
- -----------------------------------
Name: Byron S. Krantz
Title: Secretary
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FORM
OF
CERTIFICATE OF DESIGNATION
OF
THE SERIES E PREFERRED STOCK
OF
HAWK CORPORATION
PURSUANT TO SECTION 151 OF THE DELAWARE GENERAL CORPORATION LAW
Norman C. Harbert and Byron S. Krantz, being the 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 Delaware General
Corporation Law, the Board of Directors, at a telephonic meeting held
on November 13, 1997, duly adopted a resolution creating a new series
of Serial Preferred Stock, par value $0.01 per share, of the
Corporation, 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 new series of Serial Preferred Stock of the
Corporation is hereby created (the "Series E Preferred
Stock"), of which the powers, designations, preferences and
relative, participating, optional or other rights, and
qualifications and restrictions, shall be as follows:
Section 1. Designation and Amount. There shall be a series of the
Serial Preferred Stock of the Corporation that shall be designated as the
"Series E Preferred Stock," par value $0.01 per share, and the number of shares
constituting such series shall be 100,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided that no
decrease shall reduce the number of shares of Series E Preferred Stock to a
number less than that of the shares then outstanding plus the number of shares
issuable upon exercise of outstanding rights, options or warrants or upon
conversion of outstanding securities issued by the Corporation.
Section 2. Dividends and Distributions. The holders of shares of Series
E Preferred Stock shall be entitled to receive, out of any funds legally
available and when and as declared by the Board of Directors, dividends and
other distributions of the same kind but at the rate of 1,000 times the
aggregate amount per share of the dividends or other distributions received by
the holders of shares of Common Stock, par value $0.01 per share, of the
Corporation (the "Common Stock"). Dividends and other distributions shall be
declared and paid to the holders of shares of Series E
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Preferred Stock of record, on such dates respectively preceding the payment
thereof as may be fixed by the Board of Directors in declaring any such
dividends, at the same time that dividends or other distributions are declared
and paid to holders of shares of Common Stock. Such dividends shall not accrue
or be cumulative. In the event the Corporation shall, at any time after the
January 16, 1998 (the "Effective Date"), (i) declare any dividend on the Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares
of Common Stock or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, then in each such case the number of votes per share
to which holders of shares of Series E Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of shares of Common Stock that were outstanding immediately prior to such
event.
Section 3. Voting Rights. The holders of shares of Series E Preferred
Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each share of Series E Preferred Stock shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote of the holders of shares of
Class A Common Stock of the Corporation (the "Class A Common Stock"). In the
event the Corporation shall, at any time after the Effective Date, (i) declare
any dividend on shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, then in each
such case the number of votes per share to which holders of shares of Series E
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders
of shares of Series E Preferred Stock and the holders of shares of Class A
Common Stock shall vote together as one class on all matters submitted to a vote
of the holders of the Class A Common Stock.
(c) Except as set forth herein, holders of shares of Series E
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
shares of Class A Common Stock as set forth herein) for taking any corporate
action.
Section 4. Reacquired Shares. Any shares of Series E Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Serial Preferred Stock and may be reissued as part of a new series of Serial
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
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Section 5. Liquidation, Dissolution or Winding Up. The holders of shares
of Series E Preferred Stock shall, in case of liquidation, dissolution, or
winding up of the affairs of the Corporation, be entitled to receive in full,
out of the assets of the Corporation, including its capital, an amount equal to
1,000 times the aggregate amount to be distributed per share to holders of
Common Stock, subject to the provision for adjustment hereinafter set forth. In
the event the Corporation shall at any time (i) declare any dividend on shares
of Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, then in each such case the
aggregate amount to which holders of shares of Series E Preferred Stock were
entitled immediately prior to such event under the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. Except as set forth above, the
holders of shares of Series E Preferred Stock shall have the same rights and
shall be treated in the same manner with respect to any liquidation, dissolution
or winding up as holders of shares of Common Stock.
Section 6. Consolidation, Merger, Etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the holders of
shares of Series E Preferred Stock shall at the same time be similarly exchanged
or changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Effective Date (i)
declare any dividend on the Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series E Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that are outstanding immediately prior to such
event.
Section 8. Redemption. The Series E Preferred Stock shall not be
redeemable.
Section 9. Ranking. The Series E Preferred Stock shall rank junior to
all other series of the Serial Preferred Stock as to the payment of dividends
and the distribution of assets, unless the terms of any such series shall
specifically provide otherwise.
Section 10. Amendment. The Second Amended and Restated Certificate of
Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special rights
of the shares of Series E Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of at least two-thirds (66 2/3%) of the
outstanding shares of Series E Preferred Stock, voting separately as a class.
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Section 11. Fractional Shares. Shares of Series E Preferred Stock may be
issued in fractions of a share that are one one-thousandths or integral
multiples of one one-thousandths of a share, which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of the holders of Series E Preferred Stock.
IN WITNESS WHEREOF, the undersigned have executed and subscribed this
Certificate of Designation, and hereby affirm the foregoing as true under the
penalties of perjury, as of this _____ day of May, 1998.
-------------------------------------
Name: Norman C. Harbert
Title: Chairman of the Board
Attest:
- -------------------------------------------
Name: Byron S. Krantz
Title: Secretary
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