FOURTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
OUTSOURCING SOLUTIONS INC.
Outsourcing Solutions Inc., a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is Outsourcing Solutions Inc. (the
"Corporation"). The Corporation was originally incorporated as OSI Holdings
Corp. in the State of Delaware on the 21st day of September, 1995 pursuant to a
Certificate of Incorporation filed with the Secretary of State of the State of
Delaware on that date.
2. This Fourth Amended and Restated Certificate of Incorporation amends and
restates the Third Amended and Restated Certificate of Incorporation of the
Corporation filed with the Secretary of State of the State of Delaware on
January 13, 1999, as amended on November 29, 1999. This Fourth Amended and
Restated Certificate of Incorporation has been adopted by the Corporation and by
its stockholders pursuant to Sections 242 and 245 of the General Corporation Law
of the State of Delaware.
3. On December 3, 1999, Directors of the Corporation duly adopted
resolutions authorizing the following amendment and restatement of the
Certificate of Incorporation of the Corporation, declaring such amendment and
restatement to be advisable and in the best interests of the Corporation and its
stockholders and authorizing the appropriate officers to solicit written
consents of the stockholders of the Corporation in accordance with the
provisions of Section 228 of the General Corporation Law of the State of
Delaware. Thereafter, pursuant to resolutions of the Board of Directors, in lieu
of a meeting and vote of holders of the Corporation's common stock and preferred
stock, stockholders holding a majority of the issued and outstanding shares of
common stock of the Corporation and holders of a majority of the issued and
outstanding shares of each of the (i) preferred stock, (ii) Class A Non-Voting
Common Stock, (iii) Class B Non-Voting Common Stock and (iv) Class C Non-Voting
Common Stock of the Corporation adopted the following amendment and restatement
of the Certificate of Incorporation of the Corporation.
4. The text of Certificate of Incorporation, is hereby restated and amended
to read in its entirety as follows:
FIRST: The name of the Corporation is Outsourcing Solutions Inc.
SECOND: The registered office of the Corporation in the State of Delaware
is 1013 Centre Road, Wilmington, Delaware 19805, County of New Castle.
The name of its registered agent in the State of Delaware at such address
is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage, directly or indirectly,
in any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware as from time to time in effect.
FOURTH: The total number of shares which the Corporation shall have the
authority to issue is 17,300,000 shares of capital stock as follows: 300,000
shares of Preferred Stock, no par value (the "Preferred Stock"), 15,000,000
shares of Voting Common Stock, par value $.01 per share (the "Voting Common
Stock") and 2,000,000 shares of Non-Voting Stock, par value $.01 per share (the
"Non-Voting Common Stock", and together with the Voting Common Stock, the
"Common Stock"). Each share of Preferred Stock is hereafter referred to as a
"Preferred Share" and collectively as "Preferred Shares." Each share of Voting
Common Stock is hereafter referred to as a "Voting Common Share" and
collectively as "Voting Common Shares". Each share of Non-Voting Common Stock is
hereafter referred to as a "Non-Voting Common Share" and collectively as
"Non-Voting Common Shares". The Voting Common Shares and Non-Voting Common
Shares are hereafter collectively referred to as "Common Shares".
A. Preferred Stock.
Authorized but unissued shares of Preferred Stock may be issued from time
to time in one or more series or classes. The Board of Directors is hereby
authorized to determine and fix by resolution all rights, preferences, and
privileges and qualifications, limitations and restrictions (including, without
limitation, voting rights, dividend rights, redemption features, conversion
rights or protective features, and the limitation and exclusion thereof)
applicable to any such series or class of Preferred Stock and the number of
shares constituting any such series or class and the designation thereof, and,
subject to the terms of any such series or class, to increase or decrease (but
not below the number of shares of such series or class then outstanding) the
number of shares of any series or class subsequent to the issue of shares of
that series or class then outstanding. In the event that the number of shares of
any series or class is so decreased, the shares constituting such reduction
shall resume the status which such shares had prior to the adoption of the
resolution originally fixing the number of such series or class.
B. Common Stock.
The voting powers, designations, preferences and relative participating,
optional or other special rights, and qualifications, or restrictions thereof,
of the Common Stock are as follows:
1. Dividend Rights. Subject to the preferential rights of the Preferred
Shares, the Board of Directors of the Corporation may, in its discretion, out of
funds legally available for the payment of dividends and at such times and in
such manner as determined by the Board of Directors, declare and pay dividends
on the Common Shares of the Corporation.
No dividend (other than a dividend in capital stock ranking on a parity
with the Common Shares or cash in lieu of fractional shares with respect to such
stock dividend) shall be declared or paid on any share or shares of any class of
stock or series thereof ranking on a parity with the Common Shares in respect of
payment of dividends for any dividend period unless there shall have been
declared, for the same dividend period, like proportionate dividends on all
shares of Common Shares then outstanding.
As and when dividends are declared or paid thereon, whether in cash,
property or securities of the Corporation, the holders of the Voting Common
Shares and of the Non-Voting Common Shares will be entitled to share ratably, on
a share for share basis, in such dividends, provided, that (i) if dividends are
declared which are payable in Voting Common Shares or Non-Voting Common Shares,
dividends will be declared which are payable at the same rate on both classes of
stock and the dividends payable in Voting Common Shares will be payable to
holders of such shares and the dividends payable in Non-Voting Common Shares
will be payable to holders of such shares and (ii) if the dividends consist of
other voting securities of the Corporation, (a) the Corporation will make
available to each holder of Non-Voting Common Shares, at such holder's request,
dividends consisting of non-voting securities of the Corporation which are
otherwise identical to the voting securities and which are convertible into or
exchangeable for such voting securities on the same terms as the Non-Voting
Common Shares are convertible into Voting Common Shares.
2. Rights on Liquidation. In the event of any liquidation, dissolution,
distribution of assets or winding up of the Corporation, whether voluntary or
involuntary (collectively, a "Liquidation"), after payment or provision for
payment of the debts and other liabilities of the Corporation and the setting
aside for payment of any preferential amount due to the holders of any other
class or series of stock (including, without limitation, the holders of
Preferred Shares), the holders of Common Shares (including, without limitation,
the Voting Common Shares and the Non-Voting Common Shares) and any other class
of stock or series thereof ranking on a parity with the Common Shares in respect
of distributions on Liquidation shall be entitled to receive ratably on a share
for share basis, any or all assets remaining to be paid or distributed.
3. Voting Rights. Except as may be otherwise required by law, all voting
rights shall be vested in the Voting Common Shares and each holder of Voting
Common Shares shall have one vote in respect of each Voting Common Share held by
such holder on all matters to be voted upon by the stockholders of the
Corporation. The holders of the Non-Voting Shares will have no right to vote on
any matters to be voted on by the stockholders of the Corporation; provided,
that the holders of the Non-Voting Common Shares shall have the right to vote as
a separate class on any matter on which the Non-Voting Common Shares are
required to vote as a class pursuant to the General Corporation Law of the State
of Delaware.
4. Conversion.
A. Conversion of Non-Voting Common Shares.
Any holder of Non-Voting Common Shares shall have the right, at its option,
at any time and from time to time, to convert, subject to the terms and
provisions of this Section 4A, any or all of such holder's Non-Voting Common
Shares into an equal number of shares of fully paid and non-assessable shares of
Voting Common Shares as provided below; provided, however, if the holder in any
such conversion is subject to the Bank Holding Company Act of 1956, as amended
(12 U.S.C. ss.1841, et. seq.) and the regulations promulgated thereunder
(collectively and including any successor provisions, the "BHCA Act"), such
conversion may be made only if:
(i) the BHCA Act would not prohibit such holder from holding such
shares of Voting Common Shares; and
(ii) such shares of Voting Common Shares to be received upon such
conversion will be (A) distributed or sold in connection with any public equity
offering registered under the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder (the "1933 Act"), (B) distributed or sold
in a "broker's transaction" (as defined in Rule 144(g) under the 1933 Act)
pursuant to Rule 144 under the 1933 Act or any similar rule then in force, (C)
distributed or sold to a person or group (within the meaning of the Securities
Exchange Act of 1934, as amended (the "1934 Act")) of persons if, after such
distribution or sale, such person or group of persons would not, in the
aggregate, own, control or have the right to acquire more than 2% of the
outstanding securities of the Corporation entitled to vote on the election of
directors of the Corporation, (D) distributed or sold to a person or group
(within the meaning of the 1934 Act) of persons if, prior to such sale, such
person or group of persons had control of the Corporation, (E) distributed,
sold, or held in any other manner permitted under the BHCA, including after
giving effect to the amendment of the BHCA by the Gramm-Leach-Bliley Financial
Services Act;
provided, further, that if the holder converts any Non-Voting Common Shares as
provided in clauses (i) and (ii) above and any distribution or sale of the
Non-Voting Common Shares fails to occur for any reason or such holder is not
otherwise permitted to hold the Voting Common Shares into which such shares were
converted, such holder may convert the Voting Common Shares into the Non-Voting
Common Shares converted in anticipation of such distribution or sale or other
permitted holding.
B. Conversion Procedure.
(i) Unless otherwise provided herein, each conversion of shares of
Non-Voting Common Stock into shares of Voting Common Stock will be effected by
the surrender of the certificate or certificates representing the Non-Voting
Common Shares to be converted at the principal office of the Corporation at any
time during normal business hours, together with a written notice by the holder
of such Non-Voting Common Shares stating that such holder desires to convert
such Non-Voting Common Shares, or a stated number of such Non-Voting Common
Shares, represented by such certificate(s) into shares of Voting Common Shares.
Unless otherwise provided herein, each conversion will be deemed to have been
effected as of the close of business on the date on which such certificate(s)
have been surrendered and such notice has been received, and at such time the
rights of the holder of the converted Non-Voting Common Shares, as such holder,
will cease and the person or persons in whose name or names the certificate(s)
for Voting Common Shares are to be issued upon such conversion will be deemed to
have become the holder or holders of record of the Voting Common Shares
represented thereby.
(ii) Promptly after the surrender of certificates and the receipt of
written notice, the Corporation will issue and deliver in accordance with the
surrendering holder's instructions (a) the certificate(s) for the Voting Common
Shares issuable upon such conversion and (b) a certificate representing any
Non-Voting Common Shares that was represented by the certificate(s) delivered to
the Corporation in connection with such conversion but that was not converted.
(iii) The issuance of certificates for Voting Common Shares upon
conversion of Non-Voting Common Shares will be made without charge to the
holders of such shares for any issuance tax in respect thereof (other than any
tax in connection with the issuance of shares in a different name) or other cost
incurred by the Corporation in connection with such conversion and the related
issuance of Voting Common Shares.
(iv) The Corporation will at all times reserve and keep available out
of its authorized but unissued Voting Common Shares, solely for the purpose of
issuance upon the conversion of the Non-Voting Common Shares such number of
Voting Common Shares as are issuable upon the conversion of all outstanding
Non-Voting Common Shares. All Common Shares which are so issuable will, when
issued, be duly and validly issued, fully paid and nonassessable. The
Corporation will take all such actions as may be necessary to assure that all
such Common Shares may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which Common Shares may be listed (except for official notices of issuance
which will be immediately transmitted by the Corporation upon issuance).
(v) The Corporation will not close its books against the transfer of
Common Shares in any manner which would interfere with the timely conversion of
any Non-Voting Common Shares.
5. Stock Splits. If the Corporation in any manner subdivides or combines
the outstanding shares of one class of Common Shares, the outstanding shares of
the other class of Common Shares will be proportionately subdivided or combined
in a similar manner.
6. Notices. All notices referred to in this Article FOURTH shall be in
writing, shall be delivered personally, by facsimile or by first class mail,
postage prepaid, and shall be deemed to have been given when so delivered or
mailed to the Corporation at its principal office and to any stockholder at such
holder's address as it appears in the stock records of the Corporation.
7. Amendment and Waiver. No amendment or waiver of any provision of
paragraph 4 of this Article FOURTH or of this paragraph 7 shall be effective
without the prior approval of both the holders of a majority of the Voting
Common Shares then outstanding, voting as a separate class, and the holders of a
majority of the Non-Voting Common Shares then outstanding, voting as a separate
class.
FIFTH: The business of the Corporation shall be managed under the direction
of the Board of Directors except as otherwise provided by law. The number of
Directors of the Corporation shall be fixed from time to time by, or in the
manner provided in, the By-Laws. Election of Directors need not be by written
ballot unless the By-Laws of the Corporation shall so provide.
SIXTH: The Board of Directors may make, alter or repeal the By-Laws of the
Corporation except as otherwise provided in the By-Laws adopted by the
Corporation's stockholders.
SEVENTH: The Directors of the Corporation shall be protected from personal
liability, through indemnification or otherwise, to the fullest extent permitted
under the General Corporation Law of the State of Delaware as from time to time
in effect.
1. A Director of the Corporation shall under no circumstances have any
personal liability to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a Director except for those breaches and acts or
omissions with respect to which the General Corporation Law of the State of
Delaware, as from time to time amended, expressly provides that this provision
shall not eliminate or limit such personal liability of Directors. Neither the
modification or repeal of this paragraph 1 of Article SEVENTH nor any amendment
to said General Corporation Law that does not have retroactive application shall
limit the right of Directors hereunder to exculpation from personal liability
for any act or omission occurring prior to such amendment, modification or
repeal.
2. The Corporation shall indemnify each Director and Officer of the
Corporation to the fullest extent permitted by applicable law, except as may be
otherwise provided in the Corporation's By-Laws, and in furtherance hereof the
Board of Directors is expressly authorized to amend the Corporation's By-Laws
from time to time to give full effect hereto, notwithstanding possible self
interest of the Directors in the action being taken. Neither the modification or
repeal of this paragraph 2 of Article SEVENTH nor any amendment to the General
Corporation Law of the State of Delaware that does not have retroactive
application shall limit the right of Directors and Officers to indemnification
hereunder with respect to any act or omission occurring prior to such
modification, amendment or repeal.
EIGHTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, said Outsourcing Solutions Inc. has caused this Amended
and Restated Certificate of Incorporation of Outsourcing Solutions Inc. to be
executed by its officer thereunto duly authorized this 7th day of December,
1999.
OUTSOURCING SOLUTIONS INC.
By: /s/ Eric R. Fencl
----------------------
Name: Eric R. Fencl
Title: Vice President &
General Counsel
CERTIFICATE OF AMENDMENT
TO THE
FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
OUTSOURCING SOLUTIONS INC.
OUTSOURCING SOLUTIONS INC., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware (hereinafter
the "Corporation"), DOES HEREBY CERTIFY THAT:
1. The Corporation's Fourth Amended and Restated Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware on
December 10, 1999.
2. On March 30, 2001, the Board of Directors of the Corporation, duly
adopted resolutions setting forth proposed amendments to the Fourth Amended and
Restated Certificate of Incorporation, declaring said amendments to be advisable
and in the best interests of the Corporation and its stockholders and
authorizing the appropriate officers to solicit written consents of the
stockholders of the Corporation in accordance with Section 228 of the General
Corporation Law of the State of Delaware. The resolutions setting forth the
proposed amendments are attached hereto as Exhibit A and incorporated herein by
reference.
3. Thereafter, pursuant to the resolutions of the Board of Directors, in
lieu of a meeting and vote of holders of the Corporation's common and preferred
stock, stockholders holding a majority of the issued and outstanding shares of
common stock of the Corporation adopted the amendments set forth in Exhibit A.
4. Said amendments were duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Outsourcing Solutions Inc. has caused this Certificate
of Amendment to be signed and attested by its duly authorized officer, this 16th
day of April, 2001.
OUTSOURCING SOLUTIONS INC.
By: /s/ Eric R. Fencl
----------------------
Name: Eric R. Fencl
Title: Secretary
EXHIBIT A
RESOLUTIONS OF THE BOARD OF DIRECTORS
OF OUTSOURCING SOLUTIONS INC.
1. RESOLVED, that the Preamble of ARTICLE FOURTH to the Corporation's
Fourth Amended and Restated Certificate of Incorporation be amended and restated
to read as follows:
"FOURTH: The total number of shares which the Corporation shall have the
authority to issue is 23,200,000 shares of capital stock as follows: 300,000
shares of Preferred Stock, no par value (the "Preferred Stock"), 900,000 shares
of Senior Common Stock, par value $.01 per share (the "Senior Common Stock"),
20,000,000 shares of Voting Common Stock, par value $.01 per share (the "Voting
Common Stock") and 2,000,000 shares of Non-Voting Stock, par value $.01 per
share (the "Non-Voting Common Stock", and together with the Voting Common Stock,
the "Common Stock"). Each share of Preferred Stock is hereafter referred to as a
"Preferred Share" and collectively as "Preferred Shares." Each share of Senior
Common Stock is hereafter referred to as a "Senior Common Share" and
collectively as "Senior Common Shares." Each Senior Common Share and each share
of Voting Common Stock is hereafter referred to as a "Voting Common Share" and
collectively as "Voting Common Shares." Each share of Non-Voting Common Stock is
hereafter referred to as a "Non-Voting Common Share" and collectively as
"Non-Voting Common Shares." The Voting Common Shares and Non-Voting Common
Shares are hereafter collectively referred to as "Common Shares "."
2. RESOLVED, that ARTICLE FOURTH, Paragraph B to the Corporation's Fourth
Amended and Restated Certificate of Incorporation be amended and restated to
read as follows:
"B. Senior Common Stock and Common Stock.
Except as otherwise provided in this paragraph B or as otherwise required
by applicable law, all shares of Senior Common Stock, Voting Common Stock and
Non-Voting Common Stock shall be identical in all respects and shall entitle the
holders thereof to the same voting powers, designations, preferences and
relative participating, optional or other special rights, and qualifications, or
restrictions thereof, as set forth herein:
3. Dividend Rights. Subject to the preferential rights of the Preferred
Shares, the Board of Directors of the Corporation may, in its discretion, out of
funds legally available for the payment of dividends and at such times and in
such manner as determined by the Board of Directors, declare and pay dividends
on the Common Shares of the Corporation. No dividend (other than a dividend in
capital stock ranking on a parity with the Common Shares and or cash in lieu of
fractional shares with respect to such stock dividend) shall be declared or paid
on any share or shares of any class of stock or series thereof ranking on a
parity with the Common Shares in respect of payment of dividends for any
dividend period unless there shall have been declared, for the same dividend
period, like proportionate dividends on all shares of Senior Common Stock,
Voting Common Stock and Non-Voting Common Stock then outstanding.
As and when dividends are declared or paid thereon, whether in cash,
property or securities of the Corporation, the holders of the Common Shares will
be entitled to share ratably, on a share for share basis, in such dividends,
provided, that (i) if dividends are declared which are payable in shares of
Senior Common Stock, Voting Common Stock or Non-Voting Common Stock, dividends
will be declared which are payable at the same rate on all three classes of
stock and the dividends payable in shares of Senior Common Stock will be payable
to holders of such shares, the dividends payable in shares of Voting Common
Stock will be payable to holders of such shares and the dividends payable in
shares of Non-Voting Common Stock will be payable to holders of such shares and
(ii) if the dividends consist of other voting securities of the Corporation, the
Corporation will make available to each holder of shares of Non-Voting Common
Stock, at such holder's request, dividends consisting of non-voting securities
of the Corporation which are otherwise identical to the voting securities and
which are convertible into or exchangeable for such voting securities on the
same terms as the shares of Non-Voting Common Stock are convertible into shares
of Voting Common Stock.
4. Rights on Liquidation.
1. Senior Common Stock. In the event of the liquidation, dissolution
or winding-up of the Corporation, whether voluntary or involuntary (each a
"Liquidation"), each holder of a Senior Common Share shall be entitled to
receive with respect to such Senior Common Share, before any distribution is
made to or set aside for the holders of Common Stock (or any other shares of
capital stock of the Corporation, other than the Preferred Shares), payable in
cash or, if the amount of cash available to the Corporation is insufficient, out
of the other assets of the Corporation, whether such assets are stated capital
or surplus of any nature, an amount equal to the Original Purchase Price (as
defined below) per Senior Common Share (the "Liquidation Preference"). If the
assets of the Corporation available for distribution to holders of Senior Common
Stock shall be insufficient to permit the payment in full of the amount due such
holders pursuant to this paragraph B(2)(A), all assets of the Corporation
available for distribution to such holders shall be distributed pro rata among
such holders. The fair market value of any assets of the Corporation and the
proportion of cash and other assets distributed by the Corporation to the
holders of Senior Common Stock shall be reasonably determined in good faith by a
vote of the Board of Directors of the Corporation. Except as provided in this
paragraph, the holders of Senior Common Shares shall not be entitled to any
distribution in the event of a Liquidation. For the purposes of this paragraph,
the consolidation or merger of the Corporation into or with another corporation,
or the sale of all or substantially all of the assets of the Corporation
(determined on a consolidated basis) to another corporation or any other entity
shall be deemed a liquidation, dissolution or winding-up of the affairs of the
Corporation; provided, however, that the foregoing provision shall not apply to
any merger in which (i) the Corporation is the surviving entity, (ii) the
holders of the Corporation's outstanding capital stock possessing the voting
power to elect a majority of the Corporation's board of directors immediately
prior to the merger continue to own the Corporation's outstanding capital stock
possessing the voting power to elect a majority of the Corporation's board of
directors immediately after the merger and (iii) the surviving entity expressly
acknowledges and agrees that it shall assume the obligations of the Corporation
under this Certificate of Amendment. Notwithstanding anything herein to the
contrary, the Senior Common Stock ranks junior in all respects to the Preferred
Shares, and no dividend distributions or distributions upon Liquidation shall be
made with respect to the Senior Common Stock unless and until all dividend
distributions and distributions upon Liquidation with respect to the Preferred
Shares, have been made in full. The Senior Common Stock will, however, rank
senior to all other capital stock of the Corporation other than the Preferred
Shares.
For purposes of this paragraph B(2)(A) and paragraph B(4) below, "Original
Purchase Price" means $49.00 per share or $51.00 per share, as the case may be,
of Senior Common Stock paid by the purchasers pursuant to that certain Stock
Subscription Agreement, dated April 3, 2001, by and among the Corporation,
Gryphon Partners II, L.P., Gryphon Partners II-A, L.P. and the additional
purchasers named therein (as adjusted for any stock dividends, combinations,
stock splits, recapitalizations, or the like with respect to such shares).
2. Common Stock. In the event of any Liquidation, after payment or
provision for payment of the debts and other liabilities of the Corporation and
the setting aside for payment of any preferential amount due to the holders of
any other class or series of stock (including, without limitation, the holders
of Preferred Shares and Senior Common Shares), the holders of Common Stock
(including, without limitation, the Voting Common Stock and the Non-Voting
Common Stock) and any other class of stock or series thereof ranking on a parity
with the Common Stock in respect of distributions on Liquidation shall be
entitled to receive ratably on a share for share basis, any or all assets
remaining to be paid or distributed.
5. Voting Rights. Except as may be otherwise required by law, all voting
rights shall be vested in the Voting Common Shares and each holder of Voting
Common Shares shall have one vote in respect of each Voting Common Share held by
such holder on all matters to be voted upon by the stockholders of the
Corporation. The holders of the Non-Voting Shares will have no right to vote on
any matters to be voted on by the stockholders of the Corporation; provided,
that the holders of the Non-Voting Common Shares shall have the right to vote as
a separate class on any matter on which the Non-Voting Common Shares are
required to vote as a class pursuant to the General Corporation Law of the State
of Delaware.
6. Conversion of Senior Common Stock.
1. Conversion Rights.
(1) Optional Conversion. Each holder of Senior Common Shares
shall have the right, at any time and at the option of the such holder, to
convert any of such holder's Senior Common Shares into a number of shares of
Voting Common Stock (the "Conversion Stock") equal to (a) the number of Senior
Common Shares to be converted multiplied by the Original Purchase Price
applicable for such Senior Common Shares, divided by (b) the Conversion Price
(as defined below).
(2) Mandatory Conversion. Upon consummation of the initial
underwritten public offering, registered under the Securities Act of 1933, of
Common Stock of the Corporation having an aggregate offering value of at least
$50 million (the "Initial Public Offering"), each Senior Common Share shall
automatically convert into a number of shares of Conversion Stock equal to (a)
the number of Senior Common Shares to be converted multiplied by the Original
Purchase Price applicable for such Senior Common Shares, divided by (b) the
Conversion Price. Except as otherwise provided herein, the conversion of Senior
Common Stock shall be deemed to have been effected at the time of consummation
of the Initial Public Offering.
2. Conversion Price.
(1) The initial conversion price shall be the Original Purchase
Price applicable for such Senior Common Shares (the "Conversion Price"). In
order to prevent dilution of the conversion rights granted under paragraph
B(4)(A), the Conversion Price shall be subject to adjustment from time to time
until on or before April 3, 2004 pursuant to this paragraph B(4)(B) and shall be
subject to adjustment for any stock dividends, combinations, stock splits,
recapitalizations, or the like with respect to the Senior Common Shares.
(2) If and whenever on April 3,2001 or during the period between
such date and April 3, 2004, the Corporation issues or sells, or in accordance
with paragraph B(4)(C) is deemed to have issued or sold, Common Stock, in a
transaction involving the issuance of Common Stock or a Convertible Security (as
defined below) (a "Common Stock Financing Transaction"), for no consideration or
for a consideration per share less than the Conversion Price in effect
immediately prior to such time, then forthwith upon such issue or sale the
Conversion Price shall be reduced to the lowest net price per share at which any
such share of Common Stock has been issued or sold or is deemed to have been
issued or sold; provided, however, that notwithstanding anything herein to the
contrary, under no event or circumstance shall the Conversion Price be reduced
hereunder to a per share price less than $37.47 (as adjusted for any stock
dividends, combinations, stock splits, recapitalizations, or the like).
3. Effect on Conversion Price of Certain Events. For purposes of
determining the adjusted Conversion Price under paragraph B(4)(B), the following
shall be applicable:
(1) Issuance of Convertible Securities. If the Corporation in any
manner issues or sells any stock or other securities convertible into or
exchangeable for Common Stock (such convertible or exchangeable stock or
securities being herein called "Convertible Securities") in a Common Stock
Financing Transaction and the price per share for which any one share of Common
Stock is issuable upon conversion or exchange thereof is less than the
Conversion Price in effect immediately prior to the time of such issue or sale,
then such share of Common Stock shall be deemed to have been issued and sold by
the Corporation at the time of the issuance or sale of such Convertible
Securities for such price per share. No further adjustment of the Conversion
Price shall be made upon the actual issue of such Common Stock upon conversion
or exchange of any Convertible Security.
(2) Change in Conversion Rate. If the additional consideration
(if any) payable upon the issue, conversion or exchange of any Convertible
Security, or the rate at which any Convertible Security is convertible into or
exchangeable for 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 Convertible Security
originally provided for such changed purchase price, additional consideration or
changed conversion rate, as the case may be, at the time initially granted,
issued or sold; provided that if such adjustment would result in an increase of
the Conversion Price then in effect, such adjustment shall not increase the
Conversion Price higher than the Conversion Price in effect immediately prior to
the issuance of such Convertible Security.
(3) Treatment of Unexercised Convertible Securities. Upon the
termination of any right to convert or exchange any Convertible Security without
the exercise of any such right, the Conversion Price then in effect hereunder
shall be adjusted to the Conversion Price which would have been in effect at the
time of such termination had such Convertible Security, to the extent
outstanding immediately prior to such expiration or termination, never been
issued.
(4) Calculation of Consideration Received. If any Common Stock or
Convertible Security is issued or sold or deemed to have been issued or sold for
cash, the consideration received therefor shall be deemed to be the net amount
received by the Corporation therefor plus, in the case of Convertible
Securities, the minimum amount to be paid to the Corporation upon the conversion
or exercise thereof. In case any Common Stock or Convertible Securities are
issued or sold for a consideration other than cash, the amount of the
consideration other than cash received by the Corporation shall be the fair
value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the
Corporation shall be the fair value of the securities as determined by the
Corporation's board of directors in its reasonable good faith judgment as of the
date of receipt. If any Common Stock or Convertible Security is issued to the
owners of the non-surviving entity in connection with any merger in which the
Corporation is the surviving corporation, the amount of consideration therefor
shall be deemed to be the fair value of such portion of the net assets and
business of the non-surviving entity as is attributable to such Common Stock or
Convertible Securities, as the case may be. The fair value of any consideration
other than cash and securities shall be determined jointly by the Corporation
and the holders of a majority of the outstanding Senior Common Stock. If such
parties are unable to reach agreement within a reasonable period of time, the
fair value of such consideration shall be determined by the Corporation's board
of directors in its reasonable good faith judgment.
(5) Treasury Shares. The number of shares of Common Stock
outstanding at any given time does not include shares owned or held by or for
the account of the Corporation or any of its subsidiaries, and the disposition
of any shares so owned or held shall be considered an issue or sale of Common
Stock.
(6) Record Date.If the Corporation takes a record of the holders
of Common Stock for the purpose of entitling them (a) to receive a dividend or
other distribution payable in Common Stock or in Convertible Securities or (b)
to subscribe for or purchase Common Stock or Convertible Securities, then such
record date shall be deemed to be the date of the issue or sale of the shares of
Common Stock deemed to have been issued or sold upon the declaration of such
dividend or upon the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be.
(7) Certain Issuances. Notwithstanding the foregoing, there shall
be no adjustment to the Conversion Price under paragraph B(4) with respect to
(a) the issuance of Common Stock (or options to purchase Common Stock) to the
Corporation's or its affiliates' current or former employees, officers,
directors or consultants pursuant to compensatory options or purchase rights
which have been granted or are granted in the future, (b) warrants issued to
underwriters in connection with a public offering registered under the
Securities Act of 1933, (c) the issuance of Common Stock (or warrants
exercisable into Common Stock) to financial institutions or lessors in
connection with the bona fide incurrence of indebtedness, equipment financings
or similar transactions, (d) the issuance of Common Stock to strategic investors
or in connection with acquisitions or corporate partnering transactions, (e) the
issuance of Common Stock as a dividend or distribution on Preferred Shares or
Senior Common Shares, (f) the issuance of shares of Common Stock upon conversion
of the Preferred Shares, Senior Common Shares and Non-Voting Common Shares in
accordance with their respective terms, (g) the issuance of shares of Common
Stock or other shares of the Corporation's capital stock upon conversion or
exercise of any outstanding warrants, options or other convertible instruments
or (h) the issuance of shares of Senior Common Stock, Voting Common Stock or
Non-Voting Common Stock issued in connection with a stock split or stock
dividend effected in accordance with this Article Fourth, paragraphs B(1) and
B(6).
4. Conversion Terms.
(1) At the time any such conversion has been effected pursuant to
paragraph B(4)(A), the rights of the holder of the Senior Common Shares
converted shall cease and the person or persons in whose name or names any
certificate or certificates for shares of Conversion Stock are to be issued upon
such conversion shall be deemed to have become the holder or holders of record
of the shares of Conversion Stock represented thereby.
(2) As soon as possible after a conversion has been effected
pursuant to paragraph B(4)(A), the Corporation shall deliver to the converting
holder, or in accordance with such holder's written instructions, a certificate
or certificates representing the number of shares of Conversion Stock issuable
by reason of such conversion in such name or names and such denomination or
denominations as the converting holder has specified. The Corporation may, at
its option, pay cash in lieu of issuing fractional shares of Voting Common Stock
in connection with a conversion effected hereunder provided that no other
fractional shares of Common Stock are outstanding at the time of such
conversion.
(3) The issuance of certificates for shares of Conversion Stock
upon conversion of Senior Common Stock shall be made without charge to the
holders of such Senior Common Stock for any issuance tax (other than in
connection with a transfer into a different name) in respect thereof or other
cost incurred by the Corporation in connection with such conversion and the
related issuance of shares of Conversion Stock. Upon conversion of each Senior
Common Share, the Corporation shall take all such actions as are necessary in
order to insure that the Conversion Stock issuable with respect to such
conversion shall be validly issued, fully paid and nonassessable.
(4) The Corporation shall not close its books against the
transfer of Senior Common Stock or of Conversion Stock issued or issuable upon
conversion of Senior Common Stock in any manner which interferes with the timely
conversion of Senior Common Stock.
(5) The Corporation will at all times reserve and keep available
out of its authorized but unissued Conversion Stock, solely for the purpose of
issuance upon the conversion of the Senior Common Shares such number of shares
of Conversion Stock as are issuable upon the conversion of all outstanding
Senior Common Shares. All shares of Conversion Stock which are so issuable will,
when issued, be duly and validly issued, fully paid and nonassessable. The
Corporation will take all such actions as may be necessary to assure that all
such shares of Conversion Stock may be so issued without violation of any
applicable law or governmental regulation or any requirements of any domestic
securities exchange upon which shares of Conversion Stock may be listed (except
for official notices of issuance which will be immediately transmitted by the
Corporation upon issuance).
7. Conversion of Non-Voting Common Shares.
1. Conversion of Rights.
Any holder of Non-Voting Common Shares shall have the right, at its
option, at any time and from time to time, to convert, subject to the terms and
provisions of this paragraph 5(A), any or all of such holder's Non-Voting Common
Shares into an equal number of shares of fully paid and non-assessable shares of
Voting Common Stock as provided below; provided, however, if the holder in any
such conversion is subject to the Bank Holding Company Act of 1956, as amended
(12 U.S.C. ss.1841, et. seq.) and the regulations promulgated thereunder
(collectively and including any successor provisions, the "BHCA Act"), such
conversion may be made only if:
(1) the BHCA Act would not prohibit such holder from holding such
shares of Voting Common Stock; and
(2) such shares of Voting Common Stock to be received upon such
conversion will be (A) distributed or sold in connection with any public equity
offering registered under the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder (the "1933 Act"), (B) distributed or sold
in a "broker's transaction" (as defined in Rule 144(g) under the 1933 Act)
pursuant to Rule 144 under the 1933 Act or any similar rule then in force, (C)
distributed or sold to a person or group (within the meaning of the Securities
Exchange Act of 1934, as amended (the "1934 Act")) of persons if, after such
distribution or sale, such person or group of persons would not, in the
aggregate, own, control or have the right to acquire more than 2% of the
outstanding securities of the Corporation entitled to vote on the election of
directors of the Corporation, (D) distributed or sold to a person or group
(within the meaning of the 1934 Act) of persons if, prior to such sale, such
person or group of persons had control of the Corporation, (E) distributed,
sold, or held in any other manner permitted under the BHCA, ___ including after
giving effect to the amendment of the BHCA by the Gramm-Leach-Bliley Financial
Services Act; provided, further, that if the holder converts any Non-Voting
Common Shares as provided in clauses (i) and (ii) above and any distribution or
sale of the Non-Voting Common Shares fails to occur for any reason or such
holder is not otherwise permitted to hold the Voting Common Stock into which
such shares were converted, such holder may convert the Voting Common Stock into
the Non-Voting Common Shares converted in anticipation of such distribution or
sale or other permitted holding.
2. Conversion Procedure.
(1) Unless otherwise provided herein, each conversion of shares
of Non-Voting Common Stock into shares of Voting Common Stock will be effected
by the surrender of the certificate or certificates representing the Non-Voting
Common Shares to be converted at the principal office of the Corporation at any
time during normal business hours, together with a written notice by the holder
of such Non-Voting Common Shares stating that such holder desires to convert
such Non-Voting Common Shares, or a stated number of such Non-Voting Common
Shares, represented by such certificate(s) into shares of Voting Common Stock.
Unless otherwise provided herein, each conversion will be deemed to have been
effected as of the close of business on the date on which such certificate(s)
have been surrendered and such notice has been received, and at such time the
rights of the holder of the converted Non-Voting Common Shares, as such holder,
will cease and the person or persons in whose name or names the certificate(s)
for Voting Common Stock are to be issued upon such conversion will be deemed to
have become the holder or holders of record of the Voting Common Stock
represented thereby.
(2) Promptly after the surrender of certificates and the receipt
of written notice, the Corporation will issue and deliver in accordance with the
surrendering holder's instructions (a) the certificate(s) for the Voting Common
Stock issuable upon such conversion and (b) a certificate representing any
Non-Voting Common Shares that was represented by the certificate(s) delivered to
the Corporation in connection with such conversion but that was not converted.
(3) The issuance of certificates for Voting Common Stock upon
conversion of Non-Voting Common Shares will be made without charge to the
holders of such shares for any issuance tax in respect thereof (other than any
tax in connection with the issuance of shares in a different name) or other cost
incurred by the Corporation in connection with such conversion and the related
issuance of Voting Common Stock.
(4) The Corporation will at all times reserve and keep available
out of its authorized but unissued Voting Common Stock, solely for the purpose
of issuance upon the conversion of the Non-Voting Common Shares such number of
Voting Common Stock as are issuable upon the conversion of all outstanding
Non-Voting Common Shares. All Common Shares which are so issuable will, when
issued, be duly and validly issued, fully paid and nonassessable. The
Corporation will take all such actions as may be necessary to assure that all
such Common Shares may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which Common Shares may be listed (except for official notices of issuance
which will be immediately transmitted by the Corporation upon issuance).
(5) The Corporation will not close its books against the transfer
of Common Shares in any manner which would interfere with the timely conversion
of any Non-Voting Common Shares.
8. Stock Splits, Etc. If the Corporation in any manner subdivides or
combines the outstanding shares of one class of Common Shares, the outstanding
shares of the other class of Common Shares will be proportionately subdivided or
combined in a similar manner.
9. Notices. All notices referred to in this Article FOURTH shall be in
writing, shall be delivered personally, by facsimile or by first class mail,
postage prepaid, and shall be deemed to have been given when so delivered or
mailed to the Corporation at its principal office and to any stockholder at such
holder's address as it appears in the stock records of the Corporation.
10. Amendment and Waiver. No amendment, waiver or change to or with respect
to any of the rights, privileges, preferences or powers of the Senior Common
Stock shall be effective without the prior approval of the holders of a majority
of the Senior Common Shares then outstanding, voting as a separate class. No
amendment or waiver of any provision of paragraph B(5) of this Article FOURTH or
of this paragraph B(8)(ii) shall be effective without the prior approval of the
holders of a majority of the shares of Voting Common Stock then outstanding,
voting as a separate class, and the holders of a majority of the shares of
Non-Voting Common Stock then outstanding, voting as a separate class."