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Exhibit 3.1
SECOND AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
CONLEY, CANITANO & ASSOCIATES, INC.
ARTICLE I
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The name of the corporation is Conley, Canitano & Associates, Inc. (the
"Corporation").
ARTICLE II
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The place in the State of Ohio where the Corporation's principal office
is located is the City of Mayfield Heights, Cuyahoga County.
ARTICLE III
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The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be formed under Sections 1701.01 to 1701.98,
inclusive, of the Ohio Revised Code.
ARTICLE IV
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The total number of shares of capital stock which the Corporation shall
have authority to issue is 55,500,800, of which (a) 500,800 shares shall be
preferred stock, par value $.01 per share, (b) 5,000,000 shares shall be
non-voting preferred stock, no par value, (c) 5,000,000 shares shall be voting
preferred stock, no par value (Sections (a), (b) and (c) collectively referred
to herein as "Preferred Stock"), and (d) 45,000,000 shares shall be common
stock, no par value.
Except as otherwise restricted by these Second Amended and Restated
Articles of Incorporation, the Corporation is authorized to issue, from time to
time, all or any portion of the capital stock of the Corporation which may have
been authorized but not issued, to such person or persons and for such lawful
consideration as it may deem appropriate, and generally in its absolute
discretion to determine the terms and manner of any disposition of such
authorized but unissued capital stock.
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Any and all such shares issued for which the full consideration has
been paid or delivered shall be deemed fully paid shares of capital stock, and
the holder of such shares shall not be liable for any further call or assessment
or any other payment thereon.
The voting powers, designations, preferences, privileges and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions of each class of capital stock of the Corporation,
shall be as provided in this Article IV.
The Corporation shall not, by amendment of these Second Amended and
Restated Articles of Incorporation or through any Extraordinary Transaction (as
defined in Section A.5(a)(ii)) or other reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, knowingly or purposefully avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation but shall at all times in good faith assist in the
carrying out of all the provisions hereof and in the taking of all such action
as may be necessary or appropriate in order to protect the conversion rights, if
any, and other rights of the holders of the Preferred Stock against impairment.
A. CONVERTIBLE PREFERRED STOCK
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1. DESIGNATION. A total of 250,400 shares of the Corporation's
Preferred Stock shall be designated as a series known as Convertible Preferred
Stock, par value $.01 per share (the "Convertible Stock").
2. ELECTION OF DIRECTORS; VOTING.
(a) ELECTION OF DIRECTORS. The holders of outstanding shares
of Convertible Stock shall, voting together as a separate class, be
entitled to elect three (3) Directors of the Corporation. Such
Directors shall be the candidates receiving the greatest number of
affirmative votes (with each holder of Convertible Stock entitled to
cast one vote for or against each candidate with respect to each share
of Convertible Stock held by such holder) of the outstanding shares of
Convertible Stock (the "Convertible Stock Director Designees"), with
votes cast against such candidates and votes withheld having no legal
effect. The election of the Convertible Stock Director Designees by the
holders of the Convertible Stock shall occur (i) at the annual meeting
of holders of capital stock, (ii) at any special meeting of holders of
capital stock, (iii) at any special meeting of holders of Convertible
Stock called by holders of a majority of the outstanding shares of
Convertible Stock or (iv) by the unanimous written consent of holders
of the outstanding shares of Convertible Stock. If at any time when any
share of Convertible Stock is outstanding any Convertible Stock
Director Designee should cease to be a Director for any reason, the
vacancy shall only be filled by the vote or written consent of the
holders of the outstanding shares of Convertible Stock, voting together
as a separate class, in the manner and on the basis specified above.
The holders of outstanding shares of Convertible Stock shall also be
entitled to vote for all other Directors of the Corporation together
with holders of all other shares of the Corporation's outstanding
capital stock entitled to vote thereon, voting as a single class, with
each outstanding share entitled to the same number of votes specified
in Section A.2(b). The holders of outstanding
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shares of Convertible Stock, may, in their sole discretion, determine
to elect only one or two Convertible Stock Director Designees from time
to time, and during any such period the Board of Directors nonetheless
shall be deemed duly constituted.
(b) VOTING GENERALLY. The holder of each share of Convertible
Stock shall be entitled to the number of votes equal to the largest
number of full shares of Common Stock (as defined in Section C of this
Article IV) into which each share of Convertible Stock could be
converted pursuant to Section A.6 hereof (other than by means of
Section A.6(b)) on the record date for the vote or for written consent
of shareholders, if applicable, multiplied by the number of shares of
Convertible Stock held of record on such date. The holder of each share
of Convertible Stock shall be entitled to notice of any shareholders'
meeting in accordance with the Code of Regulations of the Corporation
and shall vote with holders of the Common Stock, voting together as
single class, upon all matters submitted to a vote of shareholders,
excluding those matters required to be submitted to a class or series
vote pursuant to the terms hereof (including without limitation Section
A.8) or by law. Fractional votes shall not, however, be permitted and
any fractional voting rights resulting from the above formula (after
aggregating all shares of Common Stock into which shares of Convertible
Stock held by each holder could be converted) shall be rounded to the
nearest whole number (with any fraction equal or greater than one-half
rounded upward to one).
3. DIVIDENDS. The holders of Convertible Stock shall be entitled to
receive dividends out of funds legally available therefor at such times and in
such amounts as the Board of Directors may determine in its sole discretion;
PROVIDED, HOWEVER, that no such dividend may be declared or paid on any shares
of Convertible Stock unless at the same time a dividend is declared or paid on
all outstanding shares of Common Stock and vice versa, with holders of
Convertible Stock and Common Stock sharing in any such dividends as if they
constituted a single class of stock and with each holder of a share of
Convertible Stock entitled to receive such dividends based on the number of
shares of Common Stock into which such share of Convertible Stock is then
convertible hereunder. The right to dividends on shares of Convertible Stock
shall not be cumulative, and no right shall accrue to holders of Convertible
Stock by reason of the fact that dividends on said shares are not declared in
any prior period.
4. LIQUIDATION.
(a) LIQUIDATION PREFERENCE. Upon any liquidation, dissolution
or winding up of the Corporation and its subsidiaries, whether
voluntary or involuntary (a "A Liquidation Event"), each holder of
outstanding shares of Convertible Stock shall be entitled to be paid
out of the assets of the Corporation available for distribution to
shareholders, whether such assets are capital, surplus or earnings, and
before any amount shall be paid or distributed to the holders of Common
Stock or of any other stock ranking on liquidation junior to the
Convertible Stock, an amount in cash equal to (i) $69.89 per share of
Convertible Stock held by such holder (adjusted appropriately for stock
splits, stock dividends, recapitalizations and the like with respect to
the Convertible Stock), plus (ii) any declared but unpaid dividends to
which such holder of outstanding shares of Convertible Stock is then
entitled pursuant to Sections A.3 and A.5(f) hereof (the sum of clauses
(i) and (ii) being referred to herein as the
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("Convertible Base Liquidation Amount"), plus (iii) any interest
accrued pursuant to Section A.5(e) hereof to which such holder of
Convertible Stock is entitled, if any (the sum of clauses (i), (ii) and
(iii) being referred to herein as the "Convertible Liquidation
Preference Amount"); PROVIDED, HOWEVER, that if, upon any Liquidation
Event, the amounts payable with respect to the Convertible Liquidation
Preference Amount are not paid in full, the holders of the Convertible
Stock shall share ratably in any distribution of assets in proportion
to the full respective preferential amounts to which they are entitled;
and PROVIDED FURTHER, HOWEVER, that if upon any Liquidation Event the
holders of the outstanding shares of Convertible Stock would receive
more than the Convertible Liquidation Preference Amount in the event
their shares were converted into Series A Redeemable Preferred Stock
(as defined in Section B.1 of this Article IV) and Common Stock
immediately prior to the record date for distributions in connection
with such Liquidation Event, then each holder of an outstanding share
of Convertible Stock shall receive an amount equal to such holder's
Series A Redeemable Liquidation Preference Amount (as defined in
Section B.4) under Section B.4 before any amount shall be paid or
distributed to the holders of Common Stock or of any other stock
ranking on liquidation junior to the Convertible Stock, and thereafter
shall share ratably with the holders of Common Stock in the assets
available for distribution, with such distributions to be made in cash
and as if each share of Convertible Stock had been converted into the
number of shares of Series A Redeemable Preferred Stock and Common
Stock issuable upon the conversion of such holder's shares of
Convertible Stock immediately prior to any such Liquidation Event. The
provisions of this Section A.4 shall not in any way limit the right of
the holders of Convertible Stock to elect to convert their shares of
Convertible Stock into Series A Redeemable Preferred Stock and Common
Stock pursuant to Section A.6 prior to or in connection with any
Liquidation Event.
(b) NOTICE. Prior to the occurrence of any Liquidation Event,
the Corporation will furnish each holder of Convertible Stock notice in
accordance with Section A.9 hereof, together with a certificate
prepared by the chief financial officer of the Corporation describing
in detail the facts of such Liquidation Event, stating in detail the
amount(s) per share of Convertible Stock each holder of Convertible
Stock would receive pursuant to the provisions of Section A.4(a) hereof
(both with respect to the amount a holder would receive pursuant to
clauses (i) and (ii) of Section A.4(a) and the amount a holder would
receive pursuant to the second proviso of Section A.4(a)) and stating
in detail the facts upon which such amounts were determined.
5. REDEMPTION.
(a) REDEMPTION EVENTS.
(i) ON OR AFTER OCTOBER 15, 2001.
(A) At any time after October 15, 2001, on
any one occasion any holder of Convertible Stock may
require the Corporation to redeem up to 50% of the
outstanding shares of Convertible Stock held by such
holder at such time.
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(B) At any time after October 15, 2002, on
any one occasion any holder of Convertible Stock may
require the Corporation to redeem up to all of the
outstanding shares of Convertible Stock held by such
holder at such time.
(ii) EXTRAORDINARY TRANSACTIONS. Upon the election of
the holder or holders of not less than sixty-six and
two-thirds percent in voting power of the outstanding
Convertible Stock in connection with (A) a merger or
consolidation of the Corporation with or into another
corporation (with respect to which less than a majority of the
outstanding voting power of such surviving corporation is held
by shareholders of the Corporation immediately prior to such
event), (B) the sale or transfer of all or substantially all
of the properties and assets of the Corporation and its
subsidiaries, (C) any purchase by any party of shares of
capital stock of the Corporation (either through a negotiated
stock purchase or a tender for such shares), the effect of
which is that such party that did not beneficially own a
majority of the voting power of the outstanding shares of
capital stock of the Corporation immediately prior to such
purchase beneficially owns at least a majority of such voting
power immediately after such purchase, or (D) the redemption
or repurchase of shares representing a majority of the voting
power of the outstanding shares of capital stock of the
Corporation (each an "Extraordinary Transaction"), then, as a
part of and as a condition to the effectiveness of such
Extraordinary Transaction, UNLESS the holders of Convertible
Stock shall have elected to convert their shares of
Convertible Stock into Series A Redeemable Preferred Stock and
Common Stock in accordance with the voluntary conversion
provisions of Section A.6 prior to the effective date of such
Extraordinary Transaction, the Corporation shall, on the
effective date of such Extraordinary Transaction, redeem all
(but not less than all) of the outstanding shares of
Convertible Stock for an amount equal to the Convertible
Liquidation Preference Amount, such amount to be payable in
cash or, at the election of holders of not less than sixty-six
and two-thirds percent in voting power of the outstanding
Convertible Stock, in the same form of consideration as is
paid to the holders of Common Stock in such Extraordinary
Transaction; PROVIDED, HOWEVER, that if upon any Extraordinary
Transaction the holders of the outstanding shares of
Convertible Stock would receive more than the Convertible
Liquidation Preference Amount in the event their shares were
converted into Series A Redeemable Preferred Stock and Common
Stock immediately prior to such Extraordinary Transaction,
then each holder of Convertible Stock shall receive with
respect to each outstanding share of Convertible Stock held by
such holder an amount equal to the per share liquidation
preference for a share of Series A Redeemable Preferred Stock
under Section B.4 before any amount shall be paid or
distributed to the holders of Common Stock or of any other
stock ranking on liquidation junior to the Convertible Stock,
payable in cash, and thereafter shall share ratably with the
holders of the Common Stock in the proceeds of such
Extraordinary Transaction or, as applicable, shall receive
from the Corporation an amount equal to the amount per share
that would be paid if the shares of Common Stock receivable
upon conversion of the Convertible Stock were being acquired
in the Extraordinary Transaction at the same price per share
as is paid for Common Stock, which amount
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shall be paid in the same form of consideration as is paid to
holders of Common Stock, as if each share of Convertible Stock
had been converted into the number of shares of Series A
Redeemable Preferred Stock and Common Stock issuable upon the
conversion of such share of Convertible Stock immediately
prior to such Extraordinary Transaction. The foregoing
election shall be made by such holders giving the Corporation
and each other holder of Convertible Stock not less than five
(5) business days prior written notice, which notice shall set
forth the date for such redemption. The provisions of this
Section A.5 shall not in any way limit the right of the
holders of Convertible Stock to elect to convert their shares
into shares of Series A Redeemable Preferred Stock and Common
Stock pursuant to Section A.6 prior to or in connection with
any Extraordinary Transaction.
(b) VALUATION OF DISTRIBUTION SECURITIES. Any securities or
other consideration to be delivered to the holders of the Convertible
Stock upon any Extraordinary Transaction in accordance with the terms
hereof shall be valued as follows:
(i) If traded on a nationally recognized securities
exchange or inter-dealer quotation system, the value shall be
deemed to be the average of the closing prices of the
securities on such exchange or system over the 30-day period
ending three (3) business days prior to the closing;
(ii) If traded over-the-counter, the value shall be
deemed to be the average of the closing bid prices over the
30-day period ending three (3) business days prior to the
closing; and
(iii) If there is no active public market, the value
shall be the fair market value thereof, as mutually determined
by the Corporation and the holders of not less than sixty-six
and two-thirds percent in voting power of the outstanding
shares of Convertible Stock, provided that if the Corporation
and the holders of sixty-six and two-thirds percent in voting
power of the outstanding shares of Convertible Stock are
unable to reach agreement, then by independent appraisal by a
mutually agreed to investment banker, the fees of which shall
be paid by the Corporation.
(c) NOTICE BY CORPORATION. Prior to the occurrence of any
Extraordinary Transaction, the Corporation will furnish each holder of
Convertible Stock notice in accordance with Section A.9 hereof,
together with a certificate prepared by the chief financial officer of
the Corporation describing in detail all material terms of such
Extraordinary Transaction, including without limitation the
consideration to be delivered in connection with such Extraordinary
Transaction and the identities of the parties to the Extraordinary
Transaction.
(d) REDEMPTION DATE; REDEMPTION PRICE. Any holder of
Convertible Stock may exercise such holder's right of redemption
pursuant to Section A.5(a)(i) by such holder giving the Corporation not
less than five (5) business days prior written notice, which notice
shall set forth the date for such redemption. Upon the election of the
holders of not less than sixty-
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six and two-thirds percent of the voting power of the outstanding
Convertible Stock to cause the Corporation to redeem the Convertible
Stock pursuant to Section A.5(a)(ii), all holders of Convertible Stock
shall be deemed to have elected to cause the Convertible Stock to be so
redeemed. Any date upon which a redemption shall actually occur in
accordance with Section A.5(a) shall be referred to as a "Convertible
Redemption Date." The redemption price for each share of Convertible
Stock redeemed pursuant to this Section A.5 shall be the per share
Convertible Liquidation Preference Amount or such greater per share
amount as may be payable pursuant to the proviso to Section A.5(a)(ii),
if applicable (the "Convertible Redemption Price"). The aggregate
Convertible Redemption Price shall be payable in cash in immediately
available funds to the respective holders of the Convertible Stock on
the fifteenth (15th) day (or if such day is not a business day, the
next business day after the 15th day) after the day on which the
Corporation receives the redemption election pursuant to this Section
A.5(d) (subject to Section A.5(e)) except to the extent contemplated by
the proviso to Section A.5(a)(ii); provided, however, that such date
may be postponed for up to an additional sixty (60) calendar days to
permit the appraisal process under Section A.5(b)(iii). Until the
aggregate Convertible Redemption Price has been paid for all shares of
Convertible Stock being redeemed: (A) no dividend whatsoever shall be
paid or declared, and no distribution shall be made, on any capital
stock of the Corporation; and (B) except as permitted by Sections
A.8(d)(i), (ii) and (iii), no shares of capital stock of the
Corporation (other than the Convertible Stock in accordance with this
Section A.5) shall be purchased, redeemed or acquired by the
Corporation and no monies shall be paid into or set aside or made
available for a sinking fund for the purchase, redemption or
acquisition thereof.
(e) REDEMPTION PROHIBITED. If, at a Convertible Redemption
Date, the Corporation is prohibited under Section 1701.35 of the Ohio
Revised Code ("Section 1701.35") from redeeming all shares of
Convertible Stock for which redemption is required hereunder, then it
shall redeem such shares on a pro-rata basis among the holders of
Convertible Stock in proportion to the full respective redemption
amounts to which they are entitled hereunder to the extent possible and
shall redeem the remaining shares to be redeemed as soon as the
Corporation is not prohibited from redeeming some or all of such shares
under Section 1701.35, subject to the last paragraph of Section A.8.
The shares of Convertible Stock not redeemed shall remain outstanding
and entitled to all of the rights and preferences provided in this
Article IV. In the event that the Corporation fails for any reason to
redeem shares for which redemption is required pursuant to this Section
A.5, including without limitation due to a prohibition of such
redemption under Section 1701.35, then during the period from the
applicable Convertible Redemption Date through the date on which such
shares are redeemed, the applicable Convertible Base Liquidation Amount
of such shares shall bear interest at the rate of 15% per annum, with
such interest to accrue daily in arrears and to be compounded annually;
PROVIDED, HOWEVER, that in no event shall such interest exceed the
maximum permitted rate of interest under applicable law (the "Maximum
Permitted Rate"). In the event that fulfillment of any provision hereof
results in such rate of interest being in excess of the Maximum
Permitted Rate, the obligation to be fulfilled shall automatically be
reduced to eliminate such excess; PROVIDED, HOWEVER, that any
subsequent increase in the Maximum Permitted Rate shall be
retroactively effective to the applicable Redemption Date.
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(f) DIVIDEND AFTER CONVERTIBLE REDEMPTION DATE. From and after
a Convertible Redemption Date, no shares of Convertible Stock subject
to redemption shall be entitled to dividends, if any, as contemplated
by Section A.3; PROVIDED, HOWEVER, that in the event that shares of
Convertible Stock are unable to be redeemed and continue to be
outstanding in accordance with Section A.5(e), such shares shall
continue to be entitled to dividends and interest thereon as provided
in Sections A.3 and A.5(e) until the date on which such shares are
actually redeemed by the Corporation.
(g) SURRENDER OF CERTIFICATES. Upon receipt of the applicable
Convertible Preferred Redemption Price by certified check or wire
transfer, each holder of shares of Convertible Stock to be redeemed
shall surrender the certificate or certificates representing such
shares to the Corporation, duly assigned or endorsed for transfer (or
accompanied by duly executed stock powers relating thereto), or, in the
event the certificate or certificates are lost, stolen or missing,
shall deliver an affidavit or agreement satisfactory to the Corporation
to indemnify the Corporation from any loss incurred by it in connection
therewith (an "Affidavit of Loss") with respect to such certificates at
the principal executive office of the Corporation or the office of the
transfer agent for the Convertible Stock or such office or offices in
the continental United States of an agent for redemption as may from
time to time be designated by notice to the holders of Convertible
Stock, and each surrendered certificate shall be canceled and retired;
PROVIDED, HOWEVER, that if the holder has exercised its redemption
right pursuant to Section A.5(a)(i)(A) or the Corporation is prohibited
from redeeming all shares of Convertible Stock as provided in Section
A.5(e), the holder shall not be required to surrender said
certificate(s) to the Corporation until said holder has received a new
stock certificate for those shares of Convertible Stock not so
redeemed.
6. CONVERSION. The holders of the Convertible Stock shall have the
following conversion rights:
(a) AUTOMATIC CONVERSION UPON ELECTION OF HOLDERS. The holders
of shares of Convertible Stock shall be entitled, upon the written
election of the holder or holders of not less than sixty-six and
two-thirds percent in voting power of the outstanding shares of
Convertible Stock, without the payment of any additional consideration,
(i) immediately prior to and subject to the closing or happening of a
Liquidation Event or an Extraordinary Transaction and (ii) at any time
after October 15, 1999, to cause each (but not less than all) of the
outstanding shares of Convertible Stock to be automatically converted
into (i) the number of fully paid and nonassessable shares of Common
Stock which results from dividing the Conversion Price (as defined in
this Section A.6(a)) per share in effect for the Convertible Stock at
the time of conversion into the per share Conversion Value (as defined
in this Section A.6(a)) of the Convertible Stock (together with any
other shares of Common Stock held by the holders of Convertible Stock
(regardless of whether such holders continue to hold Convertible
Stock), the "Conversion Shares") and (ii) one (1) fully paid and
nonassessable share of Series A Redeemable Preferred Stock. Upon the
election to so convert in the manner and on the basis specified in the
preceding sentence, all holders of the Convertible Stock shall be
deemed to have elected to voluntarily convert all outstanding shares of
Convertible Stock pursuant to this Section A.6. Upon the filing of
these Second Amended and Restated Articles
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of Incorporation with the Ohio Secretary of State's office, the
"Conversion Price" per share of Convertible Stock shall be $6.99, and
the per share "Conversion Value" of Convertible Stock shall be $69.89.
The Conversion Price per share of Convertible Stock and the Common
Stock Conversion Rate (as defined in this Section A.6(a)) shall be
subject to adjustment from time to time as provided in Section A.7
hereof. The number of shares of Common Stock into which a share of a
Convertible Stock is convertible is hereinafter referred to as the
"Common Stock Conversion Rate." The number of shares of Series A
Redeemable Preferred Stock into which a share of Convertible Stock is
convertible is hereinafter referred to as the "Series A Redeemable
Conversion Rate." If the holders of shares of Convertible Stock elect
to convert the outstanding shares of Convertible Stock at a time when
there are any declared but unpaid dividends or other amounts due on or
in respect of such shares, such dividends and other amounts shall be
paid in full in cash by the Corporation in connection with such
conversion.
(b) AUTOMATIC CONVERSION UPON QPO. Each share of Convertible
Stock shall automatically be converted, without the payment of any
additional consideration, into shares of Common Stock and Series A
Redeemable Preferred Stock as of, and in all cases subject to, the
closing of the Corporation's first underwritten offering to the public
pursuant to an effective registration statement under the Securities
Act of 1933, as amended, provided that (i) such registration statement
covers the offer and sale of Common Stock of which the aggregate net
proceeds attributable to sales for the account of the Corporation
exceed $35,000,000, at a price per share equal to at least $11.00 (as
appropriately adjusted for any stock split, combination,
reorganization, recapitalization, stock dividend, or similar event),
(ii) such Common Stock is listed for trading on either the New York
Stock Exchange or the Nasdaq National Market and (iii) if a redemption
election is made pursuant to Section B.5(a)(i) or (a)(ii), either (A)
all outstanding shares of Series A Redeemable Preferred Stock which are
outstanding or issuable upon such automatic conversion are redeemed
immediately upon and as of the closing of such offering, (B)
contemporaneously with such offering cash in an amount sufficient to
redeem all outstanding shares of Series A Redeemable Preferred Stock is
segregated and irrevocably held by the Corporation for payment to
holders of Series A Redeemable Preferred Stock or (C) all outstanding
shares of Series A Redeemable Preferred Stock are exchanged for Series
A Notes (as defined in Section B.5(a)(i)) (a "QPO" or a "Qualified
Public Offering"); PROVIDED that if a closing of a QPO occurs, all
outstanding shares of Convertible Stock shall be deemed to have been
converted into shares of Common Stock and Series A Redeemable Preferred
Stock immediately prior to such closing. Any such conversion shall be
at the Common Stock Conversion Rate and Series A Redeemable Conversion
Rate in effect upon the closing of a QPO, as applicable.
If the holders of shares of Convertible Stock are required to convert
the outstanding shares of Convertible Stock pursuant to this Section
A.6(b) at a time when there are any declared but unpaid dividends or
any amounts due on or in respect of such shares pursuant to Section
A.5(e) hereof, such dividends and other amounts shall be paid in full
in cash by the Corporation in connection with such conversion.
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(c) PROCEDURE FOR VOLUNTARY CONVERSION. Upon election to
convert pursuant to Section A.6(a), each holder of Convertible Stock
shall surrender the certificate or certificates representing its
Convertible Stock, 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 the
offices of the transfer agent for the Convertible Stock or such office
or offices 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
Convertible Stock by the Corporation, or shall deliver an Affidavit of
Loss with respect to such certificates. Upon surrender of a certificate
representing Convertible Stock for conversion, or delivery of an
Affidavit of Loss, the Corporation shall issue and send by hand
delivery, by courier or by first class mail (postage prepaid) to the
holder thereof or to such holder's designee, at the address designated
by such holder, certificates for the number of shares of Common Stock
and Series A Redeemable Preferred Stock to which such holder shall be
entitled upon conversion. The issuance of certificates for Common Stock
and Series A Redeemable Preferred Stock upon conversion of Convertible
Stock will be made without charge to the holders of such shares for any
issuance tax in respect thereof or other costs incurred by the
Corporation in connection with such conversion and the related issuance
of such stock. If a Liquidation Event or conversion of Convertible
Stock upon an Extraordinary Transaction or public offering not
constituting a QPO occurs, all outstanding shares of Convertible Stock
shall be deemed to have been converted into shares of Common Stock and
Series A Redeemable Preferred Stock immediately prior thereto, provided
that the Corporation shall make appropriate provisions (x) for the
Common Stock issued upon such conversion to be treated on the same
basis as all other Common Stock in such Liquidation Event,
Extraordinary Transaction or public offering not constituting a QPO and
(y) for the payment of the Series A Redeemable Liquidation Preference
Amount in connection with any Liquidation Event or the redemption of
the Series A Redeemable Preferred Stock (issued upon such conversion)
upon election of such redemption in connection with any Extraordinary
Transaction or public offering not constituting a QPO, if applicable,
as provided herein. In the event of any public offering constituting a
QPO, the provisions of Section A.5(d) shall apply.
(d) PROCEDURE FOR AUTOMATIC CONVERSION. As of, and in all
cases subject to, the closing of a QPO (the "Automatic Conversion
Date"), all outstanding shares of Convertible Stock shall be converted
automatically into shares of Common Stock and Series A Redeemable
Preferred Stock at the applicable conversion rates specified in Section
A.6(a) and without any further action by the holders of such shares and
whether or not the certificates representing such shares of Convertible
Stock are surrendered to the Corporation or its transfer agent;
PROVIDED, HOWEVER, that all holders of Convertible Stock shall be given
prior written notice of the occurrence of a QPO in accordance with
Section A.9 hereof. The Corporation shall not be obligated to issue
certificates evidencing the shares of Series A Redeemable Preferred
Stock or Common Stock issuable on the Automatic Conversion Date (or the
cash payment or issuance of the Series A Notes for the shares of Series
A Redeemable Preferred Stock which are redeemed immediately after such
automatic conversion as provided below and in Section B.5(a)(i) or
B.5(a)(ii)) unless certificates evidencing such shares of the
Convertible Stock being converted, or an Affidavit of Loss with respect
to such certificates, are delivered to the Corporation or its transfer
agent. On the Automatic Conversion Date,
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all rights with respect to the Convertible Stock so converted shall
terminate, except any of the rights of the holders thereof upon
surrender of their certificate or certificates therefor or delivery of
an Affidavit of Loss thereof to receive certificates for the number of
shares of Common Stock and Series A Redeemable Preferred Stock into
which such Convertible Stock has been converted (or the cash payment or
Series A Notes to which such holder is entitled as provided below and
in Section B.5(a)(i) or (a)(ii)). If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or
accompanied by written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered holder
or by his, her or its attorney duly authorized in writing. Upon
surrender of such certificates or Affidavit of Loss the Corporation
shall issue and deliver to such holder, promptly (and in any event in
such time as is sufficient to enable such holder to participate in such
QPO) at such office and in its name as shown on such surrendered
certificate or certificates, a certificate or certificates for the
number of shares of Common Stock and number of shares of Series A
Redeemable Preferred Stock or the Series A Notes into which the shares
of the Convertible Stock surrendered were convertible on the Automatic
Conversion Date. Notwithstanding anything to the contrary set forth in
this Section A.6(d), the Corporation may deliver, in lieu of
certificates for Series A Redeemable Preferred Stock, cash in an amount
determined pursuant to Section B.5(b) hereof on account of the
redemption of such Series A Redeemable Preferred Stock, and upon
payment of such cash the Series A Redeemable Preferred Stock into which
such Convertible Stock would have been converted shall be deemed to
have been issued and redeemed by the Corporation.
(e) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
Corporation shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock and Series A Redeemable
Preferred Stock solely for the purpose of effecting the conversion of
the shares of Convertible Stock such number of its shares of Common
Stock and Series A Redeemable Preferred Stock as shall from time to
time be sufficient to effect the conversion of all outstanding shares
of Convertible Stock; and if at any time the number of authorized but
unissued shares of Common Stock and Series A Redeemable Preferred Stock
shall not be sufficient to effect the conversion of all then
outstanding shares of Convertible Stock, the Corporation will take such
corporate action as may be necessary to increase its authorized but
unissued shares of Common Stock and Series A Redeemable Preferred Stock
to such number of shares as shall be sufficient for such purpose.
(f) NO CLOSING OF TRANSFER BOOKS. The Corporation shall not
close its books against the transfer of shares of Convertible Stock in
any manner which would interfere with the timely conversion of any
shares of Convertible Stock.
7. ADJUSTMENTS. The Conversion Price in effect from time to time shall
be subject to adjustment from and after October 10, 1997 and regardless of
whether any shares of Convertible Stock are then issued and outstanding as
follows:
(a) STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. Upon the
issuance of additional shares of Common Stock as a dividend or other
distribution on outstanding Common Stock, the subdivision of
outstanding shares of Common Stock into a greater
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12
number of shares of Common Stock, or the combination of outstanding
shares of Common Stock into a smaller number of shares of Common Stock,
the Conversion Price shall, simultaneously with the happening of such
dividend, subdivision or split be adjusted by multiplying the then
effective Conversion Price by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding immediately prior
to such event and the denominator of which shall be the number of
shares of Common Stock outstanding immediately after such event. An
adjustment made pursuant to this Section A.7(a) shall be given effect,
upon payment of such a dividend or distribution, as of the record date
for the determination of shareholders entitled to receive such dividend
or distribution (on a retroactive basis) and in the case of a
subdivision or combination shall become effective immediately as of the
effective date thereof.
(b) SALE OF COMMON STOCK. In the event the Corporation shall
at any time, or from time to time, issue, sell or exchange any shares
of Common Stock (including shares held in the Corporation's treasury
but excluding up to 1,420,000 shares of Common Stock (as appropriately
adjusted for stock splits, stock dividends and the like) issued to
officers, directors or employees of the Corporation or upon the
exercise of options or other rights issued to such officers, directors
or employees pursuant to the stock option plans (the "Excluded
Shares"), for a consideration per share less than the Conversion Price
in effect immediately prior to the issuance, sale or exchange of such
shares, then, and thereafter successively upon each such issuance, sale
or exchange, the Conversion Price in effect immediately prior to the
issuance, sale or exchange of such shares shall forthwith be reduced to
an amount determined by multiplying such Conversion Price by a
fraction:
(i) the numerator of which shall be (X) the number of
shares of Common Stock of all classes outstanding immediately
prior to the issuance of such additional shares of Common
Stock (excluding treasury shares but including all shares of
Common Stock issuable upon conversion or exercise of any
outstanding Convertible Stock, options, warrants, rights or
convertible securities), plus (Y) the number of shares of
Common Stock which the net aggregate consideration received by
the Corporation for the total number of such additional shares
of Common Stock so issued would purchase at the Conversion
Price (prior to adjustment), and
(ii) the denominator of which shall be (X) the number
of shares of Common Stock of all classes outstanding
immediately prior to the issuance of such additional shares of
Common Stock (excluding treasury shares but including all
shares of Common Stock issuable upon conversion or exercise of
any outstanding Convertible Stock, options, warrants, rights
or convertible securities), plus (Y) the number of such
additional shares of Common Stock so issued.
(c) SALE OF OPTIONS, RIGHTS OR CONVERTIBLE SECURITIES. In the
event the Corporation shall at any time or from time to time, issue
options, warrants or rights to subscribe for shares of Common Stock, or
issue any securities convertible into or exchangeable for shares of
Common Stock (other than any options or warrants for Excluded Shares),
for a consideration per share (determined by dividing the Net Aggregate
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13
Consideration (as determined below) by the aggregate number of shares
of Common Stock that would be issued if all such options, warrants,
rights or convertible securities were exercised or converted to the
fullest extent permitted by their terms) less than the Conversion Price
in effect immediately prior to the issuance of such options or rights
or convertible or exchangeable securities, the Conversion Price in
effect immediately prior to the issuance of such options, warrants or
rights or securities shall be reduced to an amount determined by
multiplying such Conversion Price by a fraction:
(i) the numerator of which shall be (X) the number of
shares of Common Stock of all classes outstanding immediately
prior to the issuance of such options, rights or convertible
securities (excluding treasury shares but including all shares
of Common Stock issuable upon conversion or exercise of any
outstanding Convertible Stock, options, warrants, rights or
convertible securities), plus (Y) the number of shares of
Common Stock which the total amount of consideration received
by the Corporation for the issuance of such options, warrants,
rights or convertible securities plus the minimum amount set
forth in the terms of such security as payable to the
Corporation upon the exercise or conversion thereof (the "Net
Aggregate Consideration") would purchase at the Conversion
Price prior to adjustment, and
(ii) the denominator of which shall be (X) the number
of shares of Common Stock of all classes outstanding
immediately prior to the issuance of such options, warrants,
rights or convertible securities (excluding treasury shares
but including all shares of Common Stock issuable upon
conversion or exercise of any outstanding Convertible Stock,
options, warrants, rights or convertible securities), plus (Y)
the aggregate number of shares of Common Stock that would be
issued if all such options, warrants, rights or convertible
securities were exercised or converted.
(d) EXPIRATION OR CHANGE IN PRICE. If the consideration per
share provided for in any options or rights to subscribe for shares of
Common Stock or any securities exchangeable for or convertible into
shares of Common Stock, changes at any time, the Conversion Price in
effect at the time of such change shall be readjusted to the Conversion
Price which would have been in effect at such time had such options or
convertible securities provided for such changed consideration per
share (determined as provided in Section A.7(c) hereof), at the time
initially granted, issued or sold; PROVIDED, that such adjustment of
the Conversion Price will be made only as and to the extent that the
Conversion Price effective upon such adjustment remains less than or
equal to the Conversion Price that would be in effect if such options,
rights or securities had not been issued. No adjustment of the
Conversion Price shall be made under this Section A.7 upon the issuance
of any additional shares of Common Stock which are issued pursuant to
the exercise of any warrants, options or other subscription or purchase
rights or pursuant to the exercise of any conversion or exchange rights
in any convertible securities if an adjustment shall previously have
been made upon the issuance of such warrants, options or other rights.
Any adjustment of the Conversion Price shall be disregarded if, as, and
when the rights to acquire shares of Common Stock upon exercise or
conversion of the warrants, options, rights or convertible securities
which gave rise to such adjustment expire or are canceled without
having been exercised, so that the Conversion Price
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14
effective immediately upon such cancellation or expiration shall be
equal to the Conversion Price in effect at the time of the issuance of
the expired or canceled warrants, options, rights or convertible
securities, with such additional adjustments as would have been made to
that Conversion Price had the expired or canceled warrants, options,
rights or convertible securities not been issued.
(e) OTHER ADJUSTMENTS. In the event the Corporation shall make
or issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Corporation other than shares of Common
Stock, then and in each such event lawful and adequate provision shall
be made so that the holders of Convertible Stock shall receive upon
conversion thereof in addition to the number of shares of Common Stock
receivable thereupon, the number of securities of the Corporation which
they would have received had their Convertible Stock been converted
into Common Stock and Series A Redeemable Preferred Stock on the date
of such event and had they thereafter, during the period from the date
of such event to and including the date of conversion, retained such
securities receivable by them as aforesaid during such period, giving
application to all adjustments called for during such period under this
Section A.7 as applied to such distributed securities.
If the Common Stock issuable upon the conversion of the
Convertible Stock shall be changed into the same or different number of
shares of any class or classes of stock, whether by reclassification or
otherwise (other than a subdivision or combination of shares or stock
dividend provided for above, or a reorganization, merger, consolidation
or sale of assets provided for elsewhere in this Section A.7), then and
in each such event the holder of each share of Convertible Stock shall
have the right thereafter to convert such share into the kind and
amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification or other change, by holders
of the number of shares of Common Stock into which such shares of
Convertible Stock might have been converted immediately prior to such
reorganization, reclassification or change, all subject to further
adjustment as provided herein.
(f) MERGERS AND OTHER REORGANIZATIONS. If at any time or from
time to time there shall be a capital reorganization of the Common
Stock (other than a subdivision, combination, reclassification or
exchange of shares provided for elsewhere in this Section A.7) or a
merger or consolidation of the Corporation with or into another
Corporation or the sale of all or substantially all of the
Corporation's properties and assets to any other person, then, as a
part of and as a condition to the effectiveness of such reorganization,
merger, consolidation or sale, lawful and adequate provision shall be
made so that the holders of the Convertible Stock shall thereafter be
entitled to receive upon conversion of the Convertible Stock the number
of shares of stock or other securities or property of the Corporation
or of the successor Corporation resulting from such merger or
consolidation or sale, to which a holder of Common Stock deliverable
upon conversion would have been entitled on such capital
reorganization, merger, consolidation, or sale. In any such case,
appropriate provisions shall be made with respect to the rights of the
holders of the Convertible Stock after the reorganization, merger,
consolidation or sale to the end that the provisions of this Section
A.7
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15
(including without limitation provisions for adjustment of the
Conversion Price and the number of shares purchasable upon conversion
of the Convertible Stock) shall thereafter be applicable, as nearly as
may be, with respect to any shares of stock, securities or assets to be
deliverable thereafter upon the conversion of the Convertible Stock.
(g) All calculations under this Section A.7 shall be made to
the nearest cent or to the nearest one hundredth (1/100) of a share, as
the case may be.
(h) Upon the occurrence of each adjustment or readjustment
pursuant to this Section A.7, the Corporation at its expense shall
promptly compute such adjustment or readjustment in accordance with the
terms hereof and prepare and furnish to each holder of Convertible
Stock a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment
is based. The Corporation shall, upon written request at any time of
any holder of Convertible Stock, furnish or cause to be furnished to
such holder a like certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Prices before and after such
adjustment or readjustment, and (iii) the number of shares of Common
Stock and Series A Redeemable Preferred Stock and the amount, if any,
of other property which at the time would be received upon the
conversion of such holder's shares of Convertible Stock.
8. COVENANTS. So long as any shares of Convertible Preferred Stock (or
Series A Redeemable Preferred Stock, as applicable) shall be outstanding, the
Corporation shall not, without first having provided written notice of such
proposed action to each holder of outstanding shares of Convertible Preferred
Stock (or Series A Redeemable Preferred Stock, as applicable) and having
obtained the affirmative vote or written consent of the holders of not less than
sixty-six and two-thirds percent in voting power of the outstanding shares of
Convertible Preferred Stock (or Series A Redeemable Preferred Stock, as
applicable), voting as a single class, with each share of Convertible Preferred
Stock (or Series A Redeemable Preferred Stock, as applicable) entitling the
holder thereof to one vote per share of Convertible Preferred Stock (or Series A
Redeemable Preferred Stock, as applicable) held by such holder:
(a) sell, lease or otherwise dispose of (whether in one
transaction or a series of related transactions) all or a substantial
portion of its assets or business,
(b) merge with or into or consolidate with another entity or
enter into or engage in any other transaction or series of related
transactions, in any such case in connection with or as a result of
which the Corporation is not the surviving entity or the owners of the
Corporation's outstanding equity securities prior to the transaction or
series of related transactions do not own at least a majority of the
outstanding equity securities of the surviving, resulting or
consolidated entity,
(c) dissolve, liquidate or wind up its operations, (d)
directly or indirectly redeem, purchase, or otherwise acquire for
consideration any shares of its Common Stock (as defined in Section
C.1) or any other class of its capital
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16
stock except (i) for the redemption of Convertible Preferred Stock,
Series A Redeemable Preferred Stock or Conversion Shares pursuant to
and as provided in these Second Amended and Restated Articles of
Incorporation, (ii) for the exchange of Series A Redeemable Preferred
Stock for Series A Notes as contemplated by Section B.5(a)(i), (iii) as
contemplated by Sections 1.2 and 4.5 of the Stock Purchase and
Shareholders Agreement dated as of October 15 by and among the
Corporation and the shareholders of the Corporation (the "Purchase
Agreement"), or (iv) for the repurchase of shares of Common Stock from
employees and consultants pursuant to agreements entered into in
connection with the issuance of options and/or restricted stock,
pursuant to the Corporation's 1997 Equity and Performance Incentive
Plan,
(e) propose or adopt any amendment to this Article IV of these
Second Amended and Restated Articles of Incorporation, or any other
amendment to these Second Amended and Restated Articles of
Incorporation or the Corporation's regulations that eliminates, amends
or restricts or otherwise adversely affects the rights and preferences
of the Convertible Preferred Stock or the Series A Redeemable Preferred
Stock, or increases the authorized shares of Convertible Preferred
Stock or Series A Redeemable Preferred Stock,
(f) declare or make dividend payments on any shares of its
Common Stock or any other class of its capital stock,
(g) create, or obligate itself to create, any class or series
of shares having preference over or being on a parity with the
Convertible Preferred Stock or the Series A Redeemable Preferred Stock,
(h) increase the size of the Board of Directors to more than
seven (7) members, or
(i) enter into or be a party to any transaction or agreement,
including without limitation any lease (other than the lease in effect
as of the date of filing these Second Amended and Restated Articles of
Incorporation with respect to the Company's new offices located in
Mayfield Heights, Ohio as set forth in the agreement by and between the
Corporation and American National Development, Ltd., dated May, 1996)
or other rental or purchase agreement providing for loans or extensions
of credit by or to the Company with or for the benefit of any person or
entity which is a shareholder, officer or director of the Company, a
relative by blood or marriage of, a trust or estate for the benefit of,
or a person or entity which directly or indirectly controls, is
controlled by, or is under common control with, any such person or
entity, except (i) for normal compensation paid to employees of the
Company in the ordinary course of business and (ii) transactions
expressly disclosed in or contemplated by the Agreement and the
exhibits thereto.
Further, the Corporation shall not, by amendment of these Second
Amended and Restated Articles of Incorporation or through any Extraordinary
Transaction or other reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action,
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17
knowingly or purposefully avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed hereunder by the Corporation and
each subsidiary of the Corporation but shall at all times in good faith assist
in the carrying out of all the provisions of this Article IV and in the taking
of all such action as may be necessary or appropriate in order to protect the
rights of the holders of the Convertible Preferred Stock and the Series A
Redeemable Preferred Stock set forth in this Certificate against impairment. Any
successor to the Corporation or any subsidiary of the Corporation shall agree,
as a condition to such succession, to carry out and observe the obligations of
the Corporation hereunder with respect to the Convertible Preferred Stock and
the Series A Redeemable Preferred Stock.
9. NOTICE
(a) LIQUIDATION EVENTS, EXTRAORDINARY TRANSACTIONS, ETC. In
the event (i) the Corporation establishes a record date to determine
the holders of any class of securities who are entitled to receive any
dividend or other distribution or who are entitled to vote at a meeting
(or by written consent) in connection with any of the transactions
identified in clause (ii) hereof, or (ii) any Liquidation Event (as
defined in Section A.4), any Extraordinary Transaction (as defined in
Section A.5), any QPO (as defined in Section A.6) or any other public
offering becomes reasonably likely to occur, the Corporation shall mail
or cause to be mailed by first class mail (postage prepaid) to each
holder of Convertible Stock (or each holder of Series A Redeemable
Preferred Stock, as applicable) at least fifteen (15) days prior to
such record date specified therein or the expected effective date of
any such transaction, whichever is earlier, a notice specifying (A) the
date of such record date for the purpose of such dividend or
distribution or meeting or consent and a description of such dividend
or distribution or the action to be taken at such meeting or by such
consent, (B) the date on which any such Liquidation Event,
Extraordinary Transaction, QPO or other public offering is expected to
become effective, and (C) the date on which the books of the
Corporation shall close or a record shall be taken with respect to any
such event.
(b) WAIVER OF NOTICE. The holder or holders of not less than
sixty-six and two-thirds percent in voting power of the outstanding
shares of Convertible Stock (or Series A Redeemable Preferred Stock, as
applicable) may, at any time upon written notice to the Corporation,
waive any notice provisions specified herein for the benefit of such
holders, and any such waiver shall be binding upon all holders of such
securities.
(c) GENERAL. In the event that the Corporation provides any
notice, report or statement to any holder of Common Stock, the
Corporation shall at the same time provide a copy of any such notice,
report or statement to each holder of outstanding shares of Convertible
Stock (or Series A Redeemable Preferred Stock, as applicable).
10. NO REISSUANCE OF CONVERTIBLE STOCK. No share or shares of
Convertible Stock acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares shall be
canceled, retired and eliminated from the shares which the Corporation shall be
authorized to issue.
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18
11. CONTRACTUAL RIGHTS OF HOLDERS. The various provisions set forth
herein for the benefit of the holders of the Convertible Stock and Series A
Redeemable Preferred Stock shall be deemed contract rights enforceable by them,
including without limitation, one or more actions for specific performance.
B. SERIES A REDEEMABLE PREFERRED STOCK
1. DESIGNATION. A total of 250,400 shares of the Corporation's
Preferred Stock shall be designated as a series known as Series A Redeemable
Preferred Stock, par value $.01 per share (the "Series A Redeemable Preferred
Stock").
2. ELECTION OF DIRECTORS; VOTING.
(a) ELECTION OF DIRECTORS. The holders of outstanding shares
of Series A Redeemable Preferred Stock shall, voting together as a
separate class, be entitled to elect one (1) Director. Such Director
shall be the candidate receiving the greatest number of affirmative
votes (with each holder of Series A Redeemable Preferred Stock entitled
to cast one vote for or against each candidate with respect to each
share of Series A Redeemable Preferred Stock held by such holder) of
the outstanding shares of Series A Redeemable Preferred Stock (the
"Series A Redeemable Preferred Stock Director Designee"), with votes
cast against such candidates and votes withheld having no legal
effect). The election of the Series A Redeemable Preferred Stock
Director Designee by the holders of the Series A Redeemable Preferred
Stock shall occur (i) at the annual meeting of holders of capital
stock, (ii) at any special meeting of holders of capital stock, (iii)
at any special meeting of holders of Series A Redeemable Preferred
Stock called by holders of a majority of the outstanding shares of
Series A Redeemable Preferred Stock or (iv) by the unanimous written
consent of holders of the outstanding shares of Series A Redeemable
Preferred Stock. Upon conversion of the Convertible Stock, the holder
or holders of not less than a majority in voting power of the
outstanding Series A Redeemable Preferred Stock shall designate one of
the Convertible Stock Director Designees then serving on the
Corporation's board of directors to continue in such capacity as the
Series A Redeemable Preferred Stock Designee. If at any time when any
share of Series A Redeemable Preferred Stock is outstanding the Series
A Redeemable Preferred Stock Director Designee should cease to be a
Director for any reason, the vacancy shall only be filled by the vote
or written consent of holders of the outstanding shares of Series A
Redeemable Preferred Stock, voting together as a separate class, in the
manner and on the basis specified above.
(b) VOTING GENERALLY. Except as set forth above with respect
to the election of the Series A Redeemable Preferred Stock Director
Designee, the holders of Series A Redeemable Preferred Stock shall not
be entitled to vote on any matters except to the extent otherwise
required under the Ohio Revised Code.
3. DIVIDENDS. The holders of outstanding shares of Series A Redeemable
Preferred Stock shall be entitled to receive, out of any funds legally available
therefor, cumulative (non-compounding) dividends on the Series A Redeemable
Preferred Stock in cash, at the per share rate per annum of
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19
seven percent (7%) of $62.90 (adjusted appropriately for stock splits, stock
dividends, recapitalizations and the like with respect to the Series A
Redeemable Preferred Stock) (a "Series A Redeemable Cumulative Dividend"). Such
dividends will accrue quarterly in arrears commencing as of the date of issuance
of the Series A Redeemable Preferred Stock and be cumulative, to the extent
unpaid, whether or not they have been declared and whether or not there are
profits, surplus or other funds of the Corporation legally available for the
payment of dividends. Series A Redeemable Cumulative Dividends shall become due
and payable with respect to any share of Series A Redeemable Preferred Stock as
provided in Section B.4 and Section B.5. So long as any shares of Series A
Redeemable Preferred Stock are outstanding and the Series A Redeemable
Cumulative Dividends have not been paid in full in cash: (A) no dividend
whatsoever shall be paid or declared, and no distribution shall be made, on any
Common Stock or other capital stock of the Corporation ranking junior to the
Series A Redeemable Preferred Stock; and (B) except as provided in Sections
A.8(d)(i), (ii) and (iii), no shares of capital stock of the Corporation ranking
junior to the Series A Redeemable Preferred Stock shall be purchased, redeemed
or acquired by the Corporation and no monies shall be paid into or set aside or
made available for a sinking fund for the purchase, redemption or acquisition
thereof. All numbers relating to the calculation of dividends pursuant to this
Section B.3 shall be subject to equitable adjustment in the event of any stock
split, combination, reorganization, recapitalization, reclassification or other
similar event involving a change in the Series A Redeemable Preferred Stock.
Nothing herein contained shall in any way or under any circumstances be
construed or deemed to required the Board to declare, or the Corporation to pay
or set apart for payment, any cash dividends of the Series A Redeemable
Preferred Stock. Dividends payable on the Series A Redeemable Preferred Stock
for any period less than a year shall be computed on the basis of a 365 day (366
day if applicable) year and the actual number of days elapsed.
4. LIQUIDATION. Upon any Liquidation Event, each holder of outstanding
shares of Series A Redeemable Preferred Stock shall be entitled to be paid out
of the assets of the Corporation available for distribution to shareholders,
whether such assets are capital, surplus, or earnings, and before any amount
shall be paid or distributed to the holders of Common Stock or of any other
stock ranking on liquidation junior to the Series A Redeemable Preferred Stock,
an amount in cash equal to the sum of (a) $62.90 per share of Series A
Redeemable Preferred Stock held by such holder (adjusted appropriately for stock
splits, stock dividends, recapitalizations and the like with respect to the
Series A Redeemable Preferred Stock), plus (b) any unpaid dividends to which
such holder of outstanding shares of Series A Redeemable Preferred Stock is
entitled pursuant to Sections B.3 and B.5(d) hereof (the sum of clauses (a) and
(b) being referred to herein as the"Series A Redeemable Base Liquidation
Amount"), plus (c) any interest accrued pursuant to Section B.5(c) to which such
holder of outstanding shares of Series A Redeemable Preferred Stock is entitled,
if any (the sum of clauses (a), (b) and (c) being referred to herein as the
"Series A Redeemable Liquidation Preference Amount"); PROVIDED, HOWEVER, that
if, upon any Liquidation Event, the amounts payable with respect to the Series A
Redeemable Liquidation Preference Amount are not paid in full, the holders of
the Series A Redeemable Preferred Stock shall share ratably in any distribution
of assets in proportion to the full respective preferential amounts to which
they are entitled.
5. REDEMPTION.
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20
(a) REDEMPTION EVENTS.
(i) UPON ELECTION OF HOLDERS UPON A QPO. Upon the election of
the holder or holders of not less than sixty-six and two-thirds percent
of the outstanding Convertible Stock, the Corporation shall redeem all
(and not less than all, except as set forth in the third sentence of
this Section B.5(a)) of the outstanding shares of Series A Redeemable
Preferred Stock upon the closing of a QPO. The foregoing election shall
be made by such holders giving the Corporation and each other holder of
Series A Redeemable Preferred Stock (or Convertible Stock, as
applicable) written notice not less than five (5) days prior to the
closing of a QPO. In the event that the principal underwriter for a QPO
shall reasonably and in good faith request in writing, or cause the
Company to so request in writing, that the holders of Series A
Redeemable Preferred Stock waive the holders' right to elect to have
such holder's shares of Series A Redeemable Preferred Stock redeemed
pursuant to this Section B.5(a)(i) and the holders of sixty-six and
two-thirds percent in voting power of the outstanding shares of the
Series A Redeemable Preferred Stock agree to so waive such redemption
election, then all outstanding shares of Series A Redeemable Preferred
Stock shall be exchanged, without the payment of additional
consideration, for notes of the Company ("Series A Notes") in an
aggregate principal amount equal to the aggregate Series A Redemption
Price (as defined in Section B.5(b) below), which Series A Notes shall
(i) mature on the second anniversary of the effective date of such QPO
and (ii) bear interest on the outstanding principal balance thereof at
the rate of fifteen percent (15%) per annum, which interest shall
accrue daily in arrears and be paid on the last day of each month,
commencing on the last day of the first month following the effective
date of such QPO.
(ii) UPON ELECTION OF CORPORATION UPON A QPO. The Corporation
may elect to redeem all (but not less than all, other than pursuant to
Section B.5(c) below) of the outstanding shares of Series A Redeemable
Preferred Stock at any time upon the closing of a QPO. The foregoing
election shall be made by the Corporation giving each holder of Series
A Redeemable Preferred Stock written notice not less than five (5) days
prior to the closing of a QPO.
(iii) LAPSE OF TIME.
(A) At any time after the later of the first
anniversary of the date of the conversion of the Convertible
Preferred Stock as set forth in Section A.6 (other than in
connection with an Extraordinary Transaction) and October 15,
2001, on any one occasion any holder of Series A Redeemable
Preferred Stock may require the Corporation to redeem up to
50% of the outstanding shares of Series A Redeemable Preferred
Stock held by such holder at such time.
(B) At any time after the later of the second
anniversary of the date of the conversion of the Convertible
Preferred Stock as set forth in Section
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21
A.6 (other than in connection with an Extraordinary
Transaction) and October 15, 2002, on any one occasion any
holder of Series A Redeemable Preferred Stock may require the
Corporation to redeem up to all of the outstanding shares of
Series A Redeemable Preferred Stock held by such holder at
such time.
(iv) UPON EXTRAORDINARY TRANSACTIONS. Upon the election of the
holder or holders of not less than sixty-six and two-thirds percent in
voting power of the outstanding Series A Redeemable Preferred Stock (or
Convertible Stock, as applicable, proposing to convert the same in
order to effect a redemption of the Series A Redeemable Preferred Stock
received upon such conversion hereunder), the Corporation shall redeem
all (and not less than all, other than pursuant to Section B.5(c)
below) of the outstanding shares of Series A Redeemable Preferred Stock
upon the occurrence of an Extraordinary Transaction (as defined in
Section A.5) or public offering not constituting a QPO. The foregoing
election shall be made by such holders giving the Corporation and each
other holder of Series A Redeemable Preferred Stock (or Convertible
Stock, as applicable) not less than five (5) days prior written notice,
which notice shall set forth the date for such redemption.
(v) UPON ELECTION OF CORPORATION.
(A) At any time after the later of the first
anniversary of the date of the conversion of the Convertible
Preferred Stock as set forth in Section A.6 and October 15,
2001, the Corporation may redeem 50% (but not less than 50%)
of the outstanding shares of Series A Redeemable Preferred
Stock. The foregoing election shall be made by the Corporation
giving each holder of Series A Redeemable Preferred Stock
written notice not less than five (5) days prior to the date
for such redemption.
(B) At any time after the later of the second
anniversary of the date of the conversion of the Convertible
Preferred Stock as set forth in Section A.6 and October 15,
2002, the Corporation may redeem all (but not less than all)
of the outstanding shares of Series A Redeemable Preferred
Stock. The foregoing election shall be made by the Corporation
giving each holder of Series A Redeemable Preferred Stock
written notice not less than five (5) days prior to such
redemption.
(b) REDEMPTION DATE; REDEMPTION PRICE. Any holder of Series A
Redeemable Preferred Stock may exercise such holder's right of
redemption pursuant to Section B.5(a)(iii) by such holder giving the
Corporation not less than ten (10) days prior written notice, which
notice shall set forth the date for such redemption. Upon the election
of the holders of not less than sixty-six and two-thirds percent in
voting power of the outstanding Series A Redeemable Preferred Stock to
cause the Corporation to redeem the Series A Redeemable Preferred Stock
pursuant to Section B.5(a)(i) or (a)(iv), all holders of Series A
Redeemable Preferred Stock shall be deemed to have elected to cause the
Series A
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Redeemable Preferred Stock to be so redeemed. Any date upon which a
redemption shall actually occur in accordance with Section B.5(a) shall
be referred to as a "Series A Redemption Date." The redemption price
for each share of Series A Redeemable Preferred Stock redeemed pursuant
to this Section B.5 shall be the per share Series A Redeemable
Liquidation Preference Amount (the "Series A Redemption Price"). The
aggregate Series A Redemption Price shall be payable in cash in
immediately available funds on the Series A Redemption Date. Until the
aggregate Series A Redemption Price, including any interest thereon,
has been paid in cash for all shares of Series A Redeemable Preferred
Stock redeemed as of the applicable Series A Redemption Date or Series
A Notes have been issued pursuant to Section B.5(a)(i): (A) no dividend
whatsoever shall be paid or declared, and no distribution shall be
made, on any capital stock of the Corporation; and (B) except as
provided in Sections A.8(d)(i), (ii) and (iii), no shares of capital
stock of the Corporation (other than the Series A Redeemable Preferred
Stock in accordance with this Section B.5) shall be purchased, redeemed
or acquired by the Corporation and no monies shall be paid into or set
aside or made available for a sinking fund for the purchase, redemption
or acquisition thereof.
(c) REDEMPTION PROHIBITED. If, at a Series A Redemption Date,
the Corporation is prohibited under Section 1701.35 from redeeming all
shares of Series A Redeemable Preferred Stock for which redemption is
required hereunder, then it shall redeem such shares on a pro-rata
basis among the holders of Series A Redeemable Preferred Stock in
proportion to the full respective redemption amounts to which they are
entitled hereunder to the extent possible and shall redeem the
remaining shares to be redeemed as soon as the Corporation is not
prohibited from redeeming some or all of such shares under Section
1701.35, subject to the last paragraph of Section A.8. The shares of
Series A Redeemable Preferred Stock not redeemed shall remain
outstanding and entitled to all of the rights and preferences provided
in this Article III. In the event that the Corporation fails for any
reason to redeem shares for which redemption is triggered pursuant to
Section B.5 (other than pursuant to the third sentence of Section
B.5(a)(i)), including without limitation due to a prohibition of such
redemption under Section 1701.35, then during the period from the
applicable Series A Redemption Date through the date on which such
shares are redeemed, the applicable Series A Redeemable Base
Liquidation Amount of such shares shall bear interest at the rate of
15% per annum, with such interest to accrue daily in arrears and to be
compounded annually.
(d) DIVIDEND AFTER REDEMPTION DATE. From and after the closing
of a QPO or an Extraordinary Transaction or an public offering not
constituting a QPO (in the case of a redemption pursuant to Section
B.5(a)(i) or (iv)) or the date specified for redemption in the election
notice as set forth in Section B.5(a)(ii) or (v) or Section B.5(b), no
shares of Series A Redeemable Preferred Stock subject to redemption
shall be entitled to any further dividends pursuant to Section B.3
hereof; PROVIDED, HOWEVER, that in the event that shares of Series A
Redeemable Preferred Stock are unable to be redeemed and continue to be
outstanding in accordance with Section B.5(c), such shares shall
continue to be entitled to dividends and interest thereon as provided
in Sections B.3 and B.5(c) until the date on which such shares are
actually redeemed by the Corporation.
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23
(e) SURRENDER OF CERTIFICATES. Upon receipt of the applicable
Series A Redemption Price by certified check or wire transfer or
receipt of the Series A Notes pursuant to the third sentence of Section
b.5(a)(i), each holder of shares of Series A Redeemable Preferred Stock
to be redeemed shall surrender the certificate or certificates
representing such shares to the Corporation, duly assigned or endorsed
for transfer (or accompanied by duly executed stock powers relating
thereto), or shall deliver an Affidavit of Loss with respect to such
certificates at the principal executive office of the Corporation or
the office of the transfer agent for the Series A Redeemable Preferred
Stock or such office or offices in the continental United States of an
agent for redemption as may from time to time be designated by notice
to the holders of Series A Redeemable Preferred Stock (or the holders
of Convertible Stock, as applicable), and each surrendered certificate
shall be canceled and retired; PROVIDED, HOWEVER, that if the holder
has exercised its redemption right pursuant to Section B.5(a)(iii)(A),
the holder shall not be required to surrender said certificate(s) to
the Corporation until said holder has received a new stock certificate
for those shares of Series A Redeemable Preferred Stock not so
redeemed.
6. NOTICE. In the event that the Corporation provides or is required to
provide notice to any holder of Convertible Stock or Common Stock in accordance
with the provisions of these Second Amended and Restated Articles of
Incorporation (including the provisions of Sections A.5(c) and A.9) and/or the
Corporation's regulations, the Corporation shall at the same time provide a copy
of any such notice to each holder of outstanding shares of Series A Redeemable
Preferred Stock.
7. NO REISSUANCE OF SERIES A REDEEMABLE PREFERRED STOCK. No share or
shares of Series A Redeemable Preferred Stock acquired by the Corporation by
reason of redemption, purchase, conversion, exchange or otherwise shall be
reissued, and all such shares shall be canceled, retired and eliminated from the
shares which the Corporation shall be authorized to issue.
8. COVENANTS. So long as any shares of Series A Redeemable Preferred
Stock shall be outstanding the provisions of Section A.8 shall apply to all
shares of Series A Redeemable Preferred Stock as if such shares were shares of
Convertible Preferred Stock.
C. COMMON STOCK
1. DESIGNATION. A total of 45,000,000 shares of the Corporation's
common stock shall be designated as Common Stock, no par value (the "Common
Stock").
2. VOTING.
(a) ELECTION OF DIRECTORS. The holders of Common Stock voting
together with the holders of outstanding Convertible Stock as a single
class shall be entitled to elect all of the Directors of the
Corporation (other than the Directors who are subject to election by
the holders of Convertible Stock or Series A Redeemable Preferred Stock
as a separate class) for so long as any shares of Convertible Stock or
Series A Redeemable Preferred Stock remain outstanding and thereafter
shall be entitled to elect all of the Directors of the Corporation.
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24
Such Directors shall be the candidates receiving the greatest number of
affirmative votes entitled to be cast (with each holder entitled to
cast one vote for or against each candidate with respect to each share
held by such holder), with votes cast against such candidates and votes
withheld having no legal effect. The election of such Directors shall
occur at the annual meeting of holders of capital stock or at any
special meeting called and held in accordance with the regulations of
the Corporation. If a person elected in accordance with the foregoing
provisions should cease to be a Director for any reason, the vacancy
shall only be filled by the vote of the outstanding shares entitled to
vote for such Directors, in the manner and on the basis specified
above.
(b) OTHER VOTING. The holder of each share of Common Stock
shall be entitled to one vote for each such share as determined on the
record date for the vote or consent of shareholders and shall vote
together with the holders of the Convertible Stock as a single class
upon any items submitted to a vote of shareholders, except as otherwise
provided herein.
3. DIVIDENDS. Subject to the payment in full of all preferential
dividends to which the holders of the Redeemable Preferred Stock are entitled
hereunder, the holders of Common Stock shall be entitled to receive dividends
out of funds legally available therefor at such times and in such amounts as the
Board of Directors may determine in its sole discretion, with holders of
Convertible Stock and Common Stock sharing PARI PASSU in such dividends as
contemplated by Section A.3.
4. LIQUIDATION. Upon any Liquidation Event, after the payment or
provision for payment of all debts and liabilities of the Corporation and all
preferential amounts to which the holders of Convertible Stock or Series A
Redeemable Preferred Stock, as applicable, are entitled with respect to the
distribution of assets in liquidation, the holders of Common Stock (and to the
extent applicable under Section A.4(a) Convertible Stock) shall be entitled to
share ratably in the remaining assets of the Corporation available for
distribution.
5. REDEMPTION OF CONVERSION SHARES.
(a) REDEMPTION EVENT. Upon the written election of the holder
or holders of not less than sixty-six and two-thirds percent in voting
power of the Conversion Shares at any time after October 15, 2003, the
Corporation shall redeem all of the outstanding Conversion Shares.
(b) REDEMPTION DATE; REDEMPTION PRICE. Any holder or holders
of not less than sixty-six and two-thirds percent in voting power of
the Conversion Shares may exercise such right of redemption pursuant to
Section C.5(a) by such holder giving the Corporation not less than
twenty (20) days prior written notice, which notice shall set forth the
date for such redemption. Any date upon which a redemption shall
actually occur in accordance with Section C.5(a) shall be referred to
as a "Conversion Share Redemption Date." The redemption price for each
Conversion Share redeemed pursuant to this Section C.5 shall be the sum
of (x) the greater of (i) the $.4541 (adjusted appropriately for stock
splits, stock dividends, recapitalizations and the like with respect to
the Common Stock) and (ii) the Fair Market Value (as defined in Section
C.5(b)(i) below) of each Conversion Share, plus (y) any
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25
unpaid dividends accumulated with respect to such Conversion Shares
under Section C.3 and Section C.5(d) hereof (the sum of clauses (x) and
(y) being referred to herein as the "Conversion Share Base Redemption
Price"), plus (z) any interest accrued pursuant to Section C.5(c) with
respect to such Conversion Share (the sum of clauses (x), (y) and (z)
being referred to herein as the "Conversion Share Redemption Price").
The aggregate Conversion Share Redemption Price shall be payable in
cash in immediately available funds on the Conversion Share Redemption
Date. Until the aggregate Conversion Share Redemption Price, including
any interest thereon, has been paid in cash for all Conversion Shares
redeemed as of the applicable Conversion Share Redemption Date: (A) no
dividend whatsoever shall be paid or declared, and no distribution
shall be made, on any capital stock of the Corporation; and (B) except
as provided in Sections A.8(d)(i), (ii) and (iii), no shares of capital
stock of the Corporation shall be purchased, redeemed or acquired by
the Corporation and no monies shall be paid into or set aside or made
available for a sinking fund for the purchase, redemption or
acquisition thereof.
(i) The Fair Market Value of the Conversion Shares shall be
determined according to the following procedure:
(A) The Board of Directors of the Corporation and
holders of at least a majority of the Conversion Shares (the
"Conversion Share Majority") shall negotiate in good faith in
an effort to reach an agreement upon the Fair Market Value of
the Conversion Shares for a period of ten (10) days beginning
April 15, 2003.
(B) If the Board of Directors and Conversion Share
Majority are unable to reach agreement under the foregoing
subsection (A), the Fair Market Value of the Conversion Shares
shall be determined by appraisal. Within thirty (30) days
after the expiration of the ten-day period in subsection (A)
above, the Board of Directors and holders of the Conversion
Shares to be redeemed shall each elect as an appraiser
(collectively, the "Selected Appraisers") a senior member of
the American Society of Appraisers experienced in the
appraisal of software services companies or an investment
banker who is an NASD member and is experienced in the
appraisal of software services companies. The Selected
Appraisers shall establish the value of the Corporation as if
100% of the Corporation were sold for cash on a going concern
basis in an orderly, negotiated transaction between an
informed and willing seller under no compulsion to sell and an
informed and willing buyer, net of reasonably expected
transaction expenses. Each Selected Appraiser shall render its
appraisal within thirty (30) days of its appointment
hereunder. In the event that either Selected Appraiser fails
to render an appraisal within such thirty-day period, the
first appraisal rendered shall be conclusive. In the event
that the values determined by the Selected Appraisers differ
by less than ten percent (10%) of the higher value, the value
of the Corporation shall be the average of the appraisals made
by each of the Selected Appraisers. In the event that the
values differ by ten percent (10%)
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or more of the higher value, the Selected Appraisers shall
within ten (10) days select a third appraiser (the "Neutral
Appraiser") to conduct an appraisal under the standards set
forth herein. The Neutral Appraiser shall render an appraisal
within thirty (30) days of its appointment hereunder. The
value of the Corporation shall be equal to the appraisal made
by the Neutral Appraiser if such appraisal is between the two
appraisals made by the Selected Appraisers or, if such
appraisal by the Neutral Appraiser is not between the two
appraisals made by the Selected Appraisers, then the value of
the Corporation shall be that one of the two appraisals made
by the Selected Appraisers that is closer to the appraisal
made by the Neutral Appraiser. All appraisals delivered
pursuant to this subsection (ii) shall be in writing and
signed by the appraiser. The fees, costs and expenses of the
Selected Appraisers and Neutral Appraiser will be borne by the
Corporation. The Fair Market Value of the Conversion Shares
shall be an amount equal to the amount of net proceeds that
the holders of the Conversion Shares would have received for
their shares of Common Stock immediately prior to a sale of
the Corporation as provided above.
(C) Such Fair Market Value of the Conversion Shares
shall be calculated in such a manner as to make the holders of
the Conversion Shares neither better off nor worse off than
would have been the case if 100% of the Corporation had been
sold for cash at the appraised value of the Corporation in
accordance with the procedures set forth above (i.e., there is
no discount for minority interests or lack of marketability
thereof).
(c) REDEMPTION PROHIBITED. If, at a Conversion Share
Redemption Date, the Corporation is prohibited under Section 1701.35
from redeeming all Conversion Shares for which redemption is required
hereunder, then it shall redeem such shares on a pro-rata basis among
the holders of Conversion Shares in proportion to the full respective
redemption amounts to which they are entitled hereunder to the extent
possible and shall redeem the remaining shares to be redeemed as soon
as the Corporation is not prohibited from redeeming some or all of such
shares under Section 1701.35, subject to the last paragraph of Section
A.8. The Conversion Shares not redeemed shall remain outstanding and
entitled to all of the rights and preferences provided in this Article
IV. In the event that the Corporation fails for any reason to redeem
shares for which redemption is required pursuant to Section C.5,
including without limitation due to a prohibition of such redemption
under Section 1701.35, then during the period from the applicable
Conversion Share Redemption Date through the date on which such shares
are redeemed, the applicable Conversion Share Base Redemption Price of
such shares shall bear interest at the rate of 15% per annum, with such
interest to accrue daily in arrears and to be compounded annually.
(d) DIVIDEND AFTER REDEMPTION DATE. From and after a
Conversion Share Redemption Date, no Conversion Shares subject to
redemption at such Conversion Share Redemption shall be entitled to any
further dividends pursuant to Section C.3 hereof; PROVIDED, HOWEVER,
that in the event that Conversion Shares are unable to be redeemed and
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continue to be outstanding in accordance with Section C.5(c), such
shares shall continue to be entitled to dividends and interest thereon
as provided in Sections C.3 and C.5(c) until the date on which such
shares are actually redeemed by the Corporation.
(e) SURRENDER OF CERTIFICATES. Upon receipt of the applicable
Conversion Share Redemption Price by certified check or wire transfer,
each holder of Conversion Shares to be redeemed shall surrender the
certificate or certificates representing such shares to the
Corporation, duly assigned or endorsed for transfer (or accompanied by
duly executed stock powers relating thereto), or shall deliver an
Affidavit of Loss with respect to such certificates at the principal
executive office of the Corporation or the office of the transfer agent
for the Conversion Shares or such office or offices in the continental
United States of an agent for redemption as may from time to time be
designated by notice to the holders of Conversion Shares, and each
surrendered certificate shall be canceled and retired, PROVIDED,
HOWEVER, that if the holder has not exercised its redemption right with
respect to all of its Conversion Shares, the holder shall not be
required to surrender said certificate(s) to the Corporation until said
holder has received a new stock certificate for those Conversion Shares
not so surrendered. Upon receipt of the certificate or certificates, as
the case may be, or an Affidavit of Loss, the Corporation shall pay the
applicable Conversion Share Redemption Price by certified check or wire
transfer.
6. FRACTIONAL SHARES; UNCERTIFICATED SHARES. The Corporation may issue
fractional shares (up to five decimal places) of Common Stock and Preferred
Stock. Fractional shares shall be entitled to dividends (on a pro rata basis),
and the holders of fractional shares shall be entitled to all rights as
shareholders of the Corporation to the extent provided herein and under
applicable law in respect of such fractional shares. Shares of Common Stock and
Preferred Stock, or fractions thereof, may, but need not be, represented by
share certificates. Such shares, or fractions thereof, not represented by share
certificates ("Uncertificated Shares") shall be registered in the stock records
book of the Corporation. The Corporation at any time at its sole option may
deliver to any registered holder of such shares share certificates to represent
Uncertificated Shares previously issued (or deemed issued) to such holder.
ARTICLE V
---------
The Board of Directors shall be authorized hereby to exercise all
powers now or hereafter permitted by law providing rights to the Board of
Directors to adopt amendments to these Second Amended and Restated Articles of
Incorporation (i) to fix or change the express terms of any unissued or treasury
shares of any class, including, without limiting the generality of the
foregoing: division of such shares into series and the designation and
authorized number of shares of each series; voting rights of such shares (to the
extent now or hereafter permitted by law); dividend or distribution rate; dates
of payment of dividends or distributions and the dates from which they are
cumulative; liquidation price; redemption rights and price; sinking fund
requirements; conversion rights; and restrictions on the issuance of shares of
the same series or any other class or series; all as may be established by
resolution of the Board of Directors from time to time (collectively with the
terms of the Preferred Stock, a "Preferred Stock Designation"), and (ii) to
include within these Second Amended and Restated Articles of Incorporation such
additional provisions, or amendments to any existing provisions, as may
hereafter be authorized by law.
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ARTICLE VI
----------
Except as may be provided in any Preferred Stock Designation, holders
of shares of capital stock of the Corporation shall not be entitled to
cumulative voting rights in the election of directors.
ARTICLE VII
-----------
Except as may be provided in any Preferred Stock Designation, no
holder of any shares of capital stock of the Corporation shall have any
preemptive right to acquire any shares of unissued capital stock of any class or
series, now or hereafter authorized, or any treasury shares or securities
convertible into such shares or carrying a right to subscribe to or acquire such
shares of capital stock.
ARTICLE VIII
------------
The Corporation may from time to time, pursuant to authorization by
the Board of Directors and without action by the shareholders, purchase or
otherwise acquire capital stock of the Corporation of any class or classes in
such manner, upon such terms and in such amounts as the Board of Directors shall
determine; subject, however, to such limitation or restriction, if any, as is
contained in any Preferred Stock Designation at the time of such purchase or
acquisition.
ARTICLE IX
----------
Notwithstanding anything to the contrary contained in these Second
Amended and Restated Articles of Incorporation, the affirmative vote of the
holders of at least 80% of the voting power of the Corporation, voting together
as a single class, shall be required to amend or repeal, or adopt any provision
inconsistent with, Article V, Article VI, Article VII, Article VIII or this
Article IX; provided, however, that this Article IX shall not alter the voting
entitlement of shares that, by virtue of any Preferred Stock Designation, are
expressly entitled to vote on any amendment to these Second Amended and Restated
Articles of Incorporation. For purposes of these Second Amended and Restated
Articles of Incorporation, "voting power of the Corporation" means the aggregate
voting power of (1) all the outstanding shares of Common Stock of the
Corporation and (2) all the outstanding shares of any class or series of capital
stock of the Corporation that has (i) rights to distributions senior to those of
the Common Stock including, without limitation, any relative, participating,
optional, or other special rights and privileges of, and any qualifications,
limitations or restrictions on, such shares and (ii) voting rights entitling
such shares to vote generally in the election of directors.
ARTICLE X
---------
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Any and every statute of the State of Ohio hereafter enacted, whereby
the rights, powers or privileges of corporations or of the shareholders of
corporations organized under the laws of the State of Ohio are increased or
diminished or in any way affected, or whereby effect is given to the action
taken by any number, less than all, of the shareholders of any such corporation,
shall apply to the Corporation and shall be binding not only upon the
Corporation but upon every shareholder of the Corporation to the same extent as
if such statute had been in force at the date of filing these Second Amended and
Restated Articles of Incorporation in the office of the Secretary of State of
Ohio.
ARTICLE XI
----------
These Second Amended and Restated Articles of Incorporation supersede
the existing Amended and Restated Articles of Incorporation of the Corporation.
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