EXHIBIT 3.2
CERTIFICATE OF DESIGNATION
of
SERIES A PARTICIPATING PREFERRED STOCK
of
GEOLOGISTICS CORPORATION
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
GeoLogistics Corporation, a Delaware corporation (the "CORPORATION"),
certifies that pursuant to the authority contained in its Amended and Restated
Certificate of Incorporation and in accordance with the provisions of
Section 151 of the General Corporation Law of the State of Delaware, the
Executive Committee of its Board of Directors has adopted the following
resolution creating a series of preferred stock, par value $0.001 per share,
designated as Series A Participating Preferred Stock:
RESOLVED, that a series of the class of authorized Preferred Stock, par
value $0.001 per share, of the Corporation be hereby created, and that the
designation and amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as follows:
1. DESIGNATION AND AMOUNTS. The shares of such series shall be
designated as the "Series A Participating Preferred Stock" (the "PREFERRED
STOCK") and the number of shares initially constituting such series shall be
fifteen thousand (15,000), which number may be increased to the extent required
to satisfy the provisions of Section 5 of the Fourth Amended and Restated
Stockholders Agreement, dated as of July 10, 1998, by and among the Corporation
and the stockholders listed therein, or decreased by the board of directors or
any committee thereof authorized to act on behalf of the board of directors of
the Corporation ("BOARD OF DIRECTORS") without a vote of the stockholders;
PROVIDED, HOWEVER, that such number may not be decreased below the number of
then currently outstanding shares of Preferred Stock. The Preferred Stock shall
rank senior to the Common Stock, $0.001 par value (the "COMMON STOCK"), of the
Corporation and any other series of capital stock of the Corporation ranking
junior as to dividends and as to liquidation rights to the Preferred Stock
("JUNIOR STOCK") with respect to both the payment of dividends and the
distribution of assets upon liquidation, dissolution or winding up.
2. DIVIDENDS; RESTRICTED PAYMENTS.
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(a) The holders of shares of the Preferred Stock will be
entitled to the payment of dividends in respect of such shares (each, a
"PREFERRED STOCK DIVIDEND") when, as and if declared by the Board of Directors
out of funds legally available therefor, at the quarterly rate of Thirty Dollars
($30.00) per share, if declared by the Board of Directors on or prior to the
applicable Dividend Payment Date (as defined below) and paid in cash on such
Dividend Payment Date, or at an accrued quarterly rate of Thirty Five Dollars
($35.00) per share if not so declared by the Board of Directors or if paid in
cash after the Dividend Payment Date to which such dividend related and interest
shall accrue on said Thirty Five Dollars ($35.00) per share at a rate of
fourteen percent (14%) per annum (unless a Trigger Event (as defined below) has
occurred, at which time interest thereon shall accrue at a rate of eighteen
percent (18%) per annum) from the Dividend Payment Date to which such dividend
related; PROVIDED, HOWEVER, that in the event that a Trigger Event has occurred
but all of the issued and outstanding shares of the Preferred Stock have not yet
been redeemed in full pursuant to SECTION 4 below, the Preferred Stock Dividend
shall increase to Forty Dollars ($40.00) per share, if declared by the Board of
Directors on or prior to the applicable Dividend Payment Date and paid in cash
on the applicable Dividend Payment Date, or at an accrued quarterly rate of
Forty Five Dollars ($45.00) per share if (x) not declared by the Board of
Directors on or prior to the applicable Dividend Payment Date or paid in cash
after the applicable Dividend Payment Date or (y) the Company is prohibited by
the Limiting Factors (as defined below) from effectuating a redemption upon the
occurrence of a Trigger Event and, in each case, interest on said Forty Five
Dollars ($45.00) per share shall accrue at a rate of eighteen percent (18%) per
annum from the Dividend Payment Date to which such dividend related. Dividends
and interest accrued thereon, if declared by the Board of Directors, shall be
payable quarterly in arrears on January 15, April 15, July 15 and October 15 of
each year (each a "DIVIDEND PAYMENT DATE"), commencing October 15, 1998 (except
that if any such date is not a Business Day (as defined below), then such
dividend and interest shall be payable on the next succeeding day that is a
Business Day), to holders of record of Preferred Stock as they appear on the
stock transfer books of the Corporation on such record dates as are fixed by the
Board of Directors, which record dates shall not more be than 60 nor less than
10 days preceding the payment dates for such dividends. Any amounts of cash
paid by the Corporation to the holders of the Preferred Stock pursuant to this
SECTION 2(a) shall first be credited to accrued and unpaid Preferred Stock
Dividends, if any, of Forty Five Dollars ($45.00) in cash per share and interest
on said Forty Five Dollars ($45.00) per share accruing at a rate of eighteen
percent (18%) per annum, then to accrued and unpaid Preferred Stock Dividends,
if any, of Forty Dollars ($40.00) in cash per share, then to accrued and unpaid
Preferred Stock Dividends, if any, of Thirty Five Dollars ($35.00) in cash per
share and interest on said Thirty Five Dollars ($35.00) per share accruing at a
rate of eighteen percent (18%) per annum, then to accrued and unpaid Preferred
Stock Dividends, if any, of Thirty Five Dollars ($35.00) in cash per share and
interest on said Thirty Five Dollars ($35.00) per share accruing at a rate of
fourteen percent (14%) per annum, and then to accrued and unpaid Preferred Stock
Dividends of Thirty Dollars ($30.00) in cash per share. Dividends on each share
of Preferred Stock shall accrue and be fully cumulative (whether or not
declared) from the date of issuance of such shares and interest shall be
compounded annually and shall be calculated on the basis of a 360-day year
consisting of twelve 30-day months. References herein to interest accruals are
not intended to create any obligation to pay dividends except as and if declared
by
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the Board of Directors and such references are used for convenience to calculate
the increase in accrued dividends upon the occurrence of events described
herein. Each share of Preferred Stock shall be entitled to share ratably with
each other share of Preferred Stock in such dividends as may be paid at such
time and in such amounts as the Board of Directors may from time to time
determine. The amount of dividends payable for the initial dividend period and
any period shorter than a full quarterly dividend period shall be computed on
the basis of a 360-day year of twelve 30-day months. In addition to the full
cumulative dividend on such Preferred Stock, the holders of Preferred Stock
shall be entitled to participate PARI PASSU in all dividends declared on and
distributions made with respect to the Common Stock, whether such Common Stock
dividends or distributions are payable in cash, assets, property or stock, such
that each holder of Preferred Stock shall receive with respect to each share of
Preferred Stock held by such holder an amount of cash or distributions equal to
dividends, assets, property or stock that such holder would have received with
respect to ten (10) shares of Common Stock (adjusted on a PRO RATA basis for any
recapitalization of the Common Stock, including stock splits, reverse stock
splits, subdivisions, combinations, reclassifications or issuances of rights or
warrants to holders of the Common Stock entitling them to purchase shares of the
Common Stock at less than the current market value ("RECAPITALIZATION")) if such
shares of Common Stock were issued and outstanding and held by such holder on
the record date with respect to such Common Stock dividend or distribution. All
such dividends and distributions with respect to Preferred Stock shall be made
in the same form as dividends on or distributions with respect to Common Stock,
whether cash, assets, stock or property. As used herein, the term "TRIGGER
EVENT" shall mean the occurrence of any of the following events: (i) the sale
of all or substantially all of the assets of the Corporation, (ii) any merger or
consolidation of the Corporation with or into another person, corporation,
limited liability company, general partnership, limited partnership,
proprietorship, trust or other business organization ("PERSON") or any merger of
another Person with or into the Corporation in which the stockholders of the
Corporation immediately prior to such merger or consolidation do not hold a
majority of the equity interests of the Person after such merger or
consolidation, (iii) the closing of an underwritten public offering pursuant to
an effective registration statement filed under the Securities Act of 1933, as
amended, registering the offer and sale of Common Stock for the account of the
Corporation resulting in gross cash proceeds to the Corporation of at least
Thirty Million Dollars ($30,000,000), (iv) any breach by the Corporation of any
of the terms and conditions set forth in this Certificate of Designation, the
Amended and Restated Certificate of Incorporation or Bylaws of the Corporation
relating to the Preferred Stock, or the representations, warranties or covenants
contained in the Preferred Stock Purchase Agreement, dated as of July 13, 1998,
by and among the Corporation and the initial holders of the Preferred Stock,
(v) the Corporation files a voluntary petition in bankruptcy or has an
involuntary petition filed against it which is not discharged within sixty (60)
days after the date of the filing, or is insolvent or in receivership, or (vi)
the Corporation is, as of any Dividend Payment Date, permitted under (A) all
applicable laws, statutes, rules, regulations, orders or other pronouncements,
including judicial interpretations thereof, (B) the terms and conditions of the
Indenture, dated October 29, 1997, by and among the Corporation, certain
guarantors and First Trust National Association, as trustee, as may be amended
or supplemented from time to time (the "INDENTURE"), and (C) the terms and
conditions of any agreement to which the Corporation is a party (the items
listed in clauses (A), (B) and (C) are collectively referred to
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as the "LIMITING FACTORS"), to pay some or all of the dividends on the Preferred
Stock in cash on the Dividend Payment Date for such payment (or to redeem for
cash some or all of the shares of the issued and outstanding Preferred Stock),
but for any reason whatsoever fails to pay such dividends in cash (or redeem for
cash such shares of the issued and outstanding Preferred Stock) to the maximum
extent permitted by the most restrictive of any of the Limiting Factors. As
used herein, the term "BUSINESS DAY" shall mean any day which is not a Saturday
or a Sunday or a public holiday or a day on which banks are required or
permitted to close under the laws of the State of New York or Colorado.
(b) So long as any shares of Preferred Stock shall be
outstanding, the Corporation shall not, (i) without the prior approval of the
holders at least eighty percent (80%) of the issued and outstanding shares of
the Preferred Stock, voting as a separate class, and of the Board of Directors,
and (ii) unless full payment for all accrued but unpaid dividends with respect
to the Preferred Stock shall have been made in cash, (A) declare or pay or set
apart for payment any dividend or other distribution upon any Common Stock or
Junior Stock, or (B) purchase, redeem or otherwise acquire any Junior Stock for
any consideration (or make any payment to or available for a sinking fund for
the redemption or other redemption or repurchase of any shares of such stock)
other than, as permitted under the terms and conditions of the Indenture and any
other agreement to which the Corporation is a party, purchases, redemptions or
other acquisitions of Junior Stock from directors, officers or employees of the
Corporation or its subsidiaries pursuant to the terms of any employee benefit
plan or employment or other agreement. The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation could, under this
SECTION 2(b), purchase or otherwise acquire such shares at such time and in such
manner.
(c) Any reference to "DISTRIBUTION" contained in this SECTION 2
shall not be deemed to include any distribution made in connection with any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary.
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3. LIQUIDATION PREFERENCE. In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of Preferred Stock shall be entitled to receive for each share of
Preferred Stock out of the assets of the Corporation following distributions to
any series of preferred stock that is entitled pursuant to the terms thereof to
receive distributions upon liquidation, dissolution or winding up of the
Corporation prior to distributions to be made to the Preferred Stock pursuant to
the terms hereof, whether such assets are stated capital or surplus of any
nature, the sum of (a) the product of (i) the sum of (A) an amount equal to One
Thousand Dollars ($1,000.00) per share of Preferred Stock (the "LIQUIDATION
PREFERENCE"), PLUS (B) an amount in cash, or, if applicable, other assets,
property or stock, equal to the dividends accrued and unpaid thereon to the date
of final distribution to such holders, whether or not declared, with interest
accrued thereon pursuant to SECTION 2(a) above, and (ii) the following
liquidation premium based on a liquidation, dissolution or winding up of the
Corporation during the twelve (12) month period commencing on July 16 of the
period set forth below, PLUS (b) either, at the option of the Corporation, (i)
ten (10) shares of Common Stock (adjusted on a PRO RATA basis for any
Recapitalization) or (ii) the amount of the Fair Market Value (as defined in
SECTION 4(c) below) of ten (10) shares of Common Stock (calculated as of the day
prior to such liquidation, dissolution or winding up of the Corporation and
before any adjustment to the Fair Market Value because of this clause (b), but
adjusted on a PRO RATA basis for any Recapitalization) as of the date of such
distribution, before any payment shall be made or any assets distributed to the
holders of any Junior Stock:
Period Liquidation Premium
------ -------------------
1998 100%
1999 100%
2000 110%
2001 108%
2002 106%
2003 104%
2004 102%
2005 and thereafter 100%
In the event the assets of the Corporation available for distribution to
stockholders upon any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, shall be insufficient to pay in full the
amounts payable with respect to the Preferred Stock, the holders of the
Preferred Stock shall receive a distribution of assets of the Corporation in
proportion to the full respective preferential amounts to which they are
entitled (but only to the extent of such preferential amounts). Neither a
merger, consolidation, or other business combination of the Corporation with or
into another corporation or other entity nor a sale or transfer of all or part
of the Corporation's assets for cash, securities or other property shall be
considered a liquidation, dissolution or winding up of the Corporation for
purposes of this SECTION 3 (unless in connection therewith the liquidation of
the Corporation is specifically approved). No interest shall accrue on any
payment upon liquidation after the date thereof.
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4. REDEMPTIONS.
(a) OPTIONAL REDEMPTION OF PREFERRED STOCK. The Corporation shall
have the right to redeem the Preferred Stock, in whole or in part on a PRO RATA
basis from the holders of such Preferred Stock, at the option of the
Corporation, at any time by the payment of the Redemption Price (as defined in
SECTION 4(b)) in cash.
(b) REDEMPTION PRICE. For each share of Preferred Stock which is
to be redeemed by the Corporation at any time and for any reason in a redemption
pursuant to this SECTION 4, the Corporation shall become obligated to the holder
of such share of Preferred Stock on the Redemption Date (as defined below) to
pay to such holder the Redemption Price. The "REDEMPTION PRICE" shall mean that
in the event that the Corporation elects to redeem the Preferred Stock during
the twelve (12) month period commencing on July 16, of the year set forth below,
the Corporation shall pay the holders of such shares an amount in cash equal to
the Liquidation Preference (together with any accrued but unpaid dividends
(collectively, the "CLAIM AMOUNT")) MULTIPLIED by the following redemption
premium (expressed as a percentage of the Claim Amount) PLUS either, at the
Corporation's option, (i) ten (10) shares of the Common Stock (adjusted on a PRO
RATA basis for any Recapitalization) or (ii) the amount of cash equal to ten
(10) shares of the Common Stock (calculated as of the day prior to such
redemption and before any adjustment to the Fair Market Value because of these
clauses (i) and (ii), but adjusted on a PRO RATA basis for any Recapitalization)
valued at Fair Market Value as of the date of such redemption:
Period Redemption Premium
------ ------------------
1998 100%
1999 100%
2000 110%
2001 108%
2002 106%
2003 104%
2004 102%
2005 and thereafter 100%
The term "FAIR MARKET VALUE" shall mean (a) if the Common Stock is not listed
and regularly traded on a national exchange or automated quotation system, the
value of the Common Stock as determined in good faith by the Board of Directors,
or (b) if the Common Stock is listed and regularly trades on a national exchange
or automated quotation system, the last reported sale price for the immediately
preceding trading day.
(c) REDEEMED OR OTHERWISE ACQUIRED SHARES NOT TO BE REISSUED. Any
Preferred Stock redeemed pursuant to this SECTION 4 or otherwise acquired by the
Corporation in any manner whatsoever shall not under any circumstances be
reissued, sold or transferred by the Corporation.
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(d) NOTICE OF REDEMPTION. Notice of any redemption of the
Preferred Stock (the "NOTICE OF REDEMPTION") specifying the date of redemption
(the "REDEMPTION DATE"), the time and place of redemption and the redemption
price shall be mailed by certified or registered mail, return receipt requested,
at the address for such holder shown on the Corporation's records on or before
the date on which such redemption is to be made, with respect to the Preferred
Stock; PROVIDED, HOWEVER, that in no event shall any redemption of Preferred
Stock occur later than ten (10) Business Days following the date of the Notice
of Redemption. Upon mailing any Notice of Redemption, the Corporation shall
become obligated to redeem at the time of redemption specified therein all
Preferred Stock therein specified and all funds necessary for such redemption
shall be set aside by the Corporation, separate and apart from its other funds,
in trust for the account of the holders of shares of Preferred Stock to be so
redeemed.
(e) DEPOSIT OF REDEMPTION PRICE. On or before any Redemption Date
with respect to the Preferred Stock, the Corporation shall deposit the amount of
the Redemption Price thereof with a bank or trust company having an office in
the City of New York, designated in such Notice of Redemption, irrevocably in
trust for the benefit of the holder of such share of Preferred Stock and
thereafter such share shall be deemed to have been redeemed on the Redemption
Date so specified, whether or not the certificate for such share of Preferred
Stock shall be surrendered for redemption and canceled. Upon surrender to the
Corporation by the holder of such share of Preferred Stock of the certificate
representing such Preferred Stock, the Corporation shall immediately pay the
Redemption Price to such holder.
5. VOTING RIGHTS. Except as may be otherwise provided by law, no holder
of Preferred Stock shall have any voting rights nor shall such holder be
entitled to notice of any meeting of stockholders of the Common Stock.
6. RESTRICTIONS. So long as any Preferred Stock shall remain issued and
outstanding, the Corporation shall not, without the prior written approval of
the holders of at least eighty percent (80%) of the issued and outstanding
shares of Preferred Stock or the prior written approval of the Board of
Directors as authorized by the holders of at least eighty percent (80%) of the
issued and outstanding shares of Preferred Stock, create any other class or type
of capital stock of the Corporation ranking equal or senior to the Preferred
Stock as to dividends, liquidation rights or any other rights or preferences.
7. NONASSESSABLE SHARES. The Preferred Stock shall be nonassessable.
8. REGISTRATION; TRANSFER TAXES. The Corporation shall keep at its
principal office (or such other place as the Corporation reasonably designates)
a register for the registration of Preferred Stock. Upon the surrender of any
certificate representing Preferred Stock at such place, the Corporation shall,
at the request of the registered holder of such certificate, execute and deliver
a new certificate or certificates in exchange therefor representing in the
aggregate the number of Preferred Stock represented by the surrendered
certificate (and the Corporation forthwith shall cancel such surrendered
certificate), subject to the requirements of applicable
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securities laws and the restrictions set forth in any applicable stockholders
agreement. Each such new certificate shall be registered in such name and shall
represent such number of Preferred Stock as shall be requested by the holder of
the surrendered certificate and shall be substantially identical in form to the
surrendered certificate. The issuance of new certificates shall be made without
charge to the holders of the surrendered certificates for any issuance tax in
respect thereof or other cost incurred by the Corporation in connection with
such issuance, provided that the Corporation shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of (i) the holder of the
surrendered certificate or (ii) any institutional affiliate of such holder.
9. REPLACEMENT. Upon receipt of evidence reasonably satisfactory to the
Corporation of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing one or more shares of Preferred Stock and, in the
case of loss, theft or destruction, upon receipt of indemnity reasonably
satisfactory to the Corporation (provided that if the registered holder is a
financial institution, its own agreement of indemnity shall be satisfactory),
or, in the case of mutilation, upon surrender of such certificate, the
Corporation shall (at its expense) execute and deliver in lieu of such
certificate a new certificate of like kind representing the number of shares of
Preferred Stock represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.
10. AMENDMENT AND WAIVER. The Corporation shall not amend, alter, change,
modify, repeal or waive any provision in this Certificate of Designation or the
Amended and Restated Certificate of Incorporation or Bylaws of the Corporation
to the extent that such amendment, alteration, modification, change, repeal or
waiver of the Amended and Restated Certificate of Incorporation or Bylaws of the
Corporation shall in any way adversely affect any of the Preferred Stock or any
of the legal rights and privileges of the holders of the Preferred Stock without
the prior written approval of the holders of Preferred Stock representing at
least eighty percent (80%) of the issued and outstanding shares of Preferred
Stock or the prior written approval of the Board of Directors as authorized by
the holders of eighty percent (80%) of the Preferred Stock. No amendment,
modification or waiver of any provision hereof shall extend to or affect any
obligation not expressly amended, modified or waived or impair any right
consequent thereon. No course of dealing, and no failure to exercise or delay
in exercising any right, remedy, power or privilege hereunder, shall operate as
a waiver, amendment or modification of any provision of this Certificate of
Designation.
11. NOTICES. The Corporation shall distribute to the holders of shares of
Preferred Stock copies of all notices, materials, annual and quarterly reports,
proxy statements, information statements and any other documents distributed
generally to the holders of shares of the Common Stock, at such times and by
such method as such documents are distributed to such holders of shares of the
Common Stock.
12. ATTORNEYS' FEES. Any holder of Preferred Stock shall be entitled to
recover from the Corporation the reasonable attorneys' fees and expenses
incurred by such holder in connection with enforcement by such holder of any
obligation of the Corporation hereunder.
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IN WITNESS HEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Certificate of Designation to be executed as of this
10th day of July, 1998.
GEOLOGISTICS CORPORATION,
a Delaware corporation
By: /s/ Gary S. Holter
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Name: Gary S. Holter
Title: Vice President and Chief Financial
Officer