Exhibit 3.2
FORM OF SECOND RESTATED ARTICLES OF INCORPORATION
OF
TELEGROUP, INC.
TO THE SECRETARY OF STATE OF IOWA:
Pursuant to Section 1007 of the Iowa Business Corporation Act, the
undersigned corporation adopts the following Second Restated Articles of
Incorporation:
1. The name of the corporation is Telegroup, Inc.
2. The Second Restated Articles of Incorporation of Telegroup, Inc.
attached hereto as Exhibit A amend the Restated Articles of Incorporation in a
manner requiring shareholder approval. The Second Restated Articles of
Incorporation were approved by the shareholders of Telegroup, Inc. The
designation, number of outstanding shares, number of votes entitled to be cast
by each voting group entitled to vote separately on the Second Restated
Articles of Incorporation, and the number of votes of each voting group
represented at the meeting are as follows:
Votes Entited
To Be Cast On Votes
Designation Shares Second Restated Represented
of Group Outstanding Articles At Meeting
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Class A Common
Class B Commmon
3. The total number of votes cast for and against the Second Restated
Articles of Incorporation by each voting group entitled to vote separately on
the Second Restated Articles of Incorporation:
Voting Group Votes For Votes Against
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The number of votes cast for the Second Restated Articles of
Incorporation by each voting group was sufficient for approval by that voting
group.
4. The Second Restated Articles of Incorporation so adopted read in
full as set forth in Exhibit A attached hereto and is hereby incorporated by
reference.
5. The duly adopted Second Restated Articles of Incorporation
supersede the Restated Articles of Incorporation and all amendments thereto.
Date: ______________________
TELEGROUP, INC.
By:
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Name:
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Title:
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EXHIBIT A
SECOND RESTATED ARTICLES OF INCORPORATION
OF
TELEGROUP, INC.
I
The name of the corporation is TELEGROUP, INC. (the "Corporation"). The
address of the Corporation's registered office in the State of Iowa is 2222
Grand Avenue, Des Moines, Iowa 50312, the County of Polk. The name of the
Corporation's registered agent at such address is The Corporation System.
II
The Corporation is organized for the purpose of engaging in any lawful
business for which corporations may be organized under the Iowa Business
Corporation Act.
III
Capitalization. The total number of shares of stock of all classes which
the Corporation shall have authority to issue is 160,000,000 shares, of which
10,000,000 shares shall be preferred stock, no par value per share
(hereinafter called "Preferred Stock"), and 150,000,000 shares of which shall
be common stock, no par value per share (hereinafter called "Common Stock").
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of the shares of each
class are as follows:
1. The Preferred Stock may be issued from time to time in one or more
series, the shares of each series of Preferred Stock to have the voting
powers, full or limited, and the designations, preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions thereof as are stated and expressed herein or in
the resolution or resolutions providing for the issuance of the series of
Preferred Stock, adopted by the board of directors as hereinafter provided.
2. Authority is hereby expressly granted to the board of directors of
the Corporation, subject to the provisions of this Article III and to the
limitations prescribed by law, to authorize the issuance of one or more series
of Preferred Stock and with respect to each series of Preferred Stock to fix
by resolution or resolutions providing for the issuance of the series of
Preferred Stock the voting powers, full or limited, if any, of the shares of
the
series of Preferred Stock and the designations, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof. Each series of Preferred Stock shall
consist of such number of shares as shall be stated and expressed in the
resolution or resolutions providing for the issuance of the stock of the
series of Preferred Stock together with such additional number
of shares as the board of directors by resolution or resolutions may from time
to time determine to issue as a part of the series of Preferred Stock. The
board of directors may from time to time decrease the number of shares of any
series of Preferred Stock (but not below the number thereof then outstanding)
by providing that any unissued shares previously assigned to the series of
Preferred Stock shall no longer constitute part thereof and may assign the
unissued shares to an existing or newly created series of Preferred Stock.
The authority of the board of directors with respect to each series of
Preferred Stock shall include, but not be limited to, the determination or
fixing of the following:
(a) The designation of the series of Preferred Stock.
(b) The dividend rate of the series of Preferred Stock, the conditions
and dates upon which dividends shall be payable, the relation which the
dividends shall bear to the dividends payable on any other class or classes of
stock, and whether the dividends shall be cumulative or non-cumulative.
(c) Whether the shares of the series of Preferred Stock shall be subject
to redemption by the Corporation and, if made subject to redemption, the
times, prices and other terms and conditions of the redemption.
(d) The rights of the holders of the shares of the series of Preferred
Stock upon the dissolution of, or upon the distribution of assets of, the
Corporation, and the amount payable on the shares in the event of voluntary or
involuntary liquidation.
(e) The terms and amount of any sinking fund provided for the purchase
or redemption of the shares of the series of Preferred Stock.
(f) Whether or not the shares of the series of Preferred Stock shall be
convertible into or exchangeable for shares of any other classes or of any
other series of Preferred Stock of any class or classes of stock of the
Corporation and, if provision be made for conversion or exchange, the times,
prices, rates, adjustments, and other terms and conditions of the conversion
or exchange.
(g) The extent, if any, to which the holders of the shares of the series
of Preferred Stock shall be entitled to vote with respect to the election of
directors or otherwise.
3. The holders of shares of each series of Preferred Stock shall be
entitled to receive, when and as declared by the board of directors, out of
funds legally available for the payment of dividends, dividends at the rates
fixed by the board of directors for such series of Preferred Stock, and no
more, before any dividends, other than dividends payable in Common Stock,
shall be declared and paid, or set apart for payment, on the Common Stock with
respect to the same dividend period.
4. Whenever, at any time, dividends on the then outstanding Preferred
Stock as may be required with respect to any series of Preferred Stock
outstanding shall have been paid or declared and set apart for payment and
after complying with respect to any retirement or sinking fund or funds for
any series of Preferred Stock, the board of directors may, subject to the
provisions of the resolution or resolutions creating any series of Preferred
Stock, declare and pay dividends on the Common Stock, and the holders of
shares of Preferred Stock shall not be entitled to share therein.
5. The holders of shares of each series of Preferred Stock shall be
entitled upon liquidation or dissolution or upon the distribution of the
assets of the Corporation to such preferences as provided in the resolution or
resolutions creating the series of Preferred Stock, and no more, before any
distribution of the assets of the Corporation shall be made to the holders of
shares of Common Stock. Whenever the holders of shares of Preferred Stock
shall have been paid the full amounts to which they shall be entitled, the
holders of shares of the Common Stock shall be entitled to share ratably in
all the remaining assets of the Corporation.
6. At all meetings of the shareholders of the Corporation, the holders
of shares of the Common Stock shall be entitled to one vote for each share of
Common Stock held by them. Except as otherwise required by law and except for
such voting powers with respect to the election of directors or other matters
as may be stated in the resolution or resolutions of the board of directors
providing for the issuance of any series of Preferred Stock, the holders of
the series of Preferred Stock shall have no voting power whatsoever.
7. No holder of any share of any class of stock of the Corporation shall
have any preemptive right to subscribe for or acquire additional shares of
stock of any class of the Corporation or warrants or options to purchase, or
securities convertible into, shares of any class of stock of the Corporation.
IV
The number of directors of the Corporation shall be fixed from time to
time in the manner provided in the bylaws but shall not be fewer than three
nor more than twelve. The directors shall be divided into three classes:
Class I, Class II, and Class III. Each class shall consist, as nearly as may
be possible, of one-third of the total number of directors. At each annual
meeting of shareholders, successors to the class of directors whose term
expires at that annual meeting shall be elected for a three-year term. The
initial expiration dates for the terms of the Class I, Class II and Class III
directors shall coincide with the dates of the annual meetings of shareholders
to be held in 1998, 1999 and 2000, respectively. If the number of directors
is changed, any increase or decrease shall be apportioned among the classes so
as to maintain the number of directors in each class as nearly equal as
possible, and any additional director of any class shall hold office for a
term that shall coincide with the remaining term of that class, but in no case
will a decrease in the number of directors shorten the term of any incumbent
director. A director shall hold office until the annual meeting for the year
in which his or her term expires and until a successor shall be elected and
qualified, subject, however, to prior death, resignation, retirement,
disqualification or removal from office. Any vacancy occurring on the board of
directors may be filled by a majority of the directors in office, although
less than a quorum, or by a sole remaining director, and any vacancy on the
board of directors that results from an increase in the number of directors
may be filled by a majority of the board of directors in office. Any director
elected to fill a vacancy shall have the same remaining term as that of his or
her predecessor.
A director may be removed only for (i) cause or (ii) by the affirmative
vote of the holders of not less than eighty percent (80%) of the outstanding
shares of Voting Stock (as hereinafter defined) at a meeting of shareholders
duly called for the consideration of such removal. Cause shall mean
conviction of a felony or adjudication of liability for negligence or
misconduct in the performance of a director's duty to the Corporation.
The affirmative vote of the holders of not less than eighty percent (80%)
of the outstanding shares of Voting Stock is required to amend the provisions
of this Article IV.
V
Notwithstanding any other provisions of these Second Restated Articles of
Incorporation or bylaws (and notwithstanding the fact that some lesser
percentage may be specified by law), any amendment of these Second Restated
Articles of Incorporation which would permit the holders of stock of the
Corporation to amend, alter, change or repeal the bylaws or any part thereof,
shall require the affirmative vote of holders of not less than eighty percent
(80%) of the outstanding shares of Voting Stock of the Corporation.
VI
The affirmative vote of the holders of not less than eighty percent (80%)
of the outstanding shares of Voting Stock of the Corporation shall be
required for the approval or authorization of any "Business Combination" (as
hereinafter defined) of the Corporation with any "Substantial Shareholder" (as
hereinafter defined); provided, however, that the eighty percent (80%) voting
requirement shall not be applicable if:
1. The "Continuing Directors" of the Corporation (as hereinafter
defined) by a two-thirds (2/3) vote (a) have expressly approved in advance the
acquisition of outstanding shares of Voting Stock of the Corporation that
caused the Substantial Shareholder to become a Substantial Shareholder or (b)
have approved the Business Combination prior to the Substantial Shareholder
involved in the Business Combination having become a Substantial Shareholder;
2. The Business Combination is solely between the Corporation and
another corporation, one-hundred percent (100%) of the Voting Stock of which
is owned directly or indirectly by the Corporation; or
3. The Business Combination is a merger or consolidation and the cash or
fair market value of the property, securities or "Other Consideration to be
Received" (as hereinafter defined) per share by holders of Common Stock of the
Corporation in the Business Combination is not less than the "Fair Price" (as
hereinafter defined) of the Common Stock.
For the purposes of these Articles:
1. The term "Business Combination" shall mean (a) any merger or
consolidation of the Corporation or a subsidiary with or into a Substantial
Shareholder, (b) any sale, lease, exchange, transfer or other disposition,
including without limitation a mortgage or any other security device, of all
or any "Substantial Part" (as hereinafter defined) of the assets either of the
Corporation (including without limitation any voting securities of a
subsidiary) or of a subsidiary, to the Substantial Shareholder, (c) any merger
or consolidation of a Substantial Shareholder with or into the Corporation or
a subsidiary of the Corporation, (d) any sale, lease, exchange, transfer or
other disposition of all or any Substantial Part of the assets of the
Substantial Shareholder to the Corporation or a subsidiary of the Corporation
for consideration aggregating $5,000,000 or more, (e) the issuance of any
securities of the Corporation or a subsidiary of the Corporation to a
Substantial Shareholder, (f) any reclassification or recapitalization
(including any reverse stock split) of the Corporation or any of its
subsidiaries or a reorganization, in any case having the effect, directly or
indirectly, of increasing the percentage interest of a Substantial Shareholder
in any class of equity securities of the Corporation or such subsidiary, and
(g) any agreement, contract or other arrangement providing for any of the
transactions described in this definition of Business Combination.
2. The term "Substantial Shareholder" shall mean and include any
individual, corporation, partnership or other person or entity which, together
with its "affiliates" and "associates" (as defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended, in effect on _____________ (the
"Exchange Act"), "beneficially owns" (as defined in Rule 13d-3 under the
Exchange Act) in the aggregate twenty percent (20%) or more of the outstanding
Voting Stock of the Corporation, and any affiliate or associate of any such
individual, corporation, partnership or other person or entity.
3. The term "Substantial Part" shall mean assets having a "Fair Value"
(as hereinafter defined) in excess of ten percent (10%) of the fair market
value of the total consolidated assets of the Corporation in question as of
the end of its most recent fiscal year ending prior to the time the
determination is being made.
4. Without limitation, any shares of Common Stock of the Corporation
that any Substantial Shareholder has the right to acquire pursuant to any
agreement, or upon exercise of conversion rights, warrants or options, or
otherwise, shall be deemed beneficially owned by the Substantial Shareholder.
5. The term "Other Consideration to be Received" shall include, without
limitation, Common Stock of the Corporation retained by its existing public
shareholders in the event of a Business Combination in which the Corporation
is the surviving corporation.
6. The term "Voting Stock" shall mean all outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
directors and each reference to a proportion of shares of Voting Stock shall
refer to such proportion of the votes entitled to be cast by such shares.
7. The term "Continuing Director" shall mean any director of the Company
who has served as a director since May 1997, or one elected or appointed prior
to the time the Substantial Shareholder in question acquired such status, or
one designated as a Continuing Director (prior to his or her initial election
or appointment) by a majority of the whole board, but only if a majority of
the whole board shall then consist of Continuing Directors, or if a majority
of the whole board does not then consist of Continuing Directors, by a
majority of the then Continuing Directors.
8. The term "Fair Price" shall mean not less than the greater of (a) the
highest per share price paid by the Substantial Shareholder in acquiring any
of its shares of stock of the Corporation or (b) an amount which bears the
same or greater percentage relationship to the market price of the Common
Stock of the Corporation immediately prior to the announcement of the Business
Combination equal to the highest percentage relationship that any per share
price theretofore paid by the Substantial Shareholder for any of its holdings
of Common Stock of the Corporation bore to the market price of the Common
Stock of the Corporation immediately prior to commencement of the acquisition
of the Corporation's Common Stock by the Substantial Shareholder.
9. The term "Fair Value" shall mean the fair market value thereof at any
time 90 days prior to the date of the consummation of any transaction, which
value and time shall be determined by a majority of the Continuing Directors
who may, if they wish, be advised on such value by an investment banking firm
selected by them. The fees of any such investment banking firm shall be paid
by the Corporation.
The provisions set forth at this Article VI herein may not be repealed or
amended in any respect, unless such action is approved by the affirmative vote
of the holders of not less than eighty percent (80%) of the outstanding shares
of Voting Stock of the Corporation; provided, however, that this eighty
percent (80%) vote requirement shall not apply if an amendment is recommended
to shareholders by two-thirds (2/3) of the whole board of directors when a
majority of the members of the board of directors acting upon such matters are
Continuing Directors.
VII
A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its shareholders, (ii) for acts or
omissions not in good faith or which involve the intentional misconduct or a
knowing violation of the law, (iii) for any transaction from which the
director derives an improper personal benefit, or (iv) under Section 490.833
of the Iowa Business Corporation Act.
Any repeal or modification of this Article VII shall not adversely affect
any right or protection of a director of the Corporation existing at the time
of such repeal or modification.
Date:
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TELEGROUP, INC.
By:
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Name:
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Its:
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ATTEST:
By:
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Name:
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Title:
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