Exhibit 3.3
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF
SERIES A CUMULATIVE PREFERRED STOCK
OF
NBI, INC.
A DELAWARE CORPORATION
(Pursuant to Section 151 of the General Corporation
Law of the State of Delaware)
NBI, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), hereby certifies
that, pursuant to the authority contained in Article Fourth of its Certificate
of Incorporation, and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware, its Board of Directors has
adopted the following resolution creating a series of its Preferred Stock
designated as Series A Cumulative Preferred Stock:
RESOLVED, that a series of the class of authorized Preferred Stock of the
Corporation be, and hereby is, 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:
BE IT RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation by the Certificate of Incorporation, the Board
of Directors does hereby provide for the issue of a series of Preferred
Stock, $.01 par value per share, of the Corporation, to be designated
"Series A Cumulative Preferred Stock" (hereinafter referred to as the
"Series A Preferred Stock"), consisting of 2,000,000 shares, and to the
extent that the voting powers, designations, preferences, limitations,
restrictions and relative rights of the Series A Preferred Stock are not
stated and expressed in the Certificate of Incorporation, does hereby fix
and herein state and express such voting powers, designations, preferences,
limitations, restrictions and relative rights as follows (all terms used
herein which are defined in the Certificate of Incorporation shall be
deemed to have the meanings provided therein):
1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Cumulative Preferred Stock" and the number of
shares constituting such series shall be 2,000,000. Such number of shares
may be decreased by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares of Series A Preferred Stock then
outstanding or reserved for issuance.
2. DIVIDENDS.
(a) PAYMENT OF DIVIDENDS. The holders of Series A Preferred
Stock shall be entitled to receive, out of the assets of the
Corporation legally available for distribution to holders of the
Corporation's Series A Preferred Stock, whether such assets are
capital, surplus, or earnings (hereinafter called the "Available
Funds"), cumulative dividends from the date of original issue, accruing
semi-annually, commencing June 30, 1999, and each December 31 and June
30 thereafter, at the annual rate per share of either (a) $1.00 in
cash, or (b) .11 shares of Series A Preferred Stock. The method of
payment of dividends shall be selected by the holder of each share of
Series A Preferred Stock, and may be changed annually by the holder
thereof in accordance with the provisions of Section 2(c) hereof.
Dividends will be paid when and as declared by the Board of Directors.
The Corporation will not issue any fractional shares of Series A
Preferred Stock in payment of dividends, but will register the amount
of fractional shares that each holder is entitled to receive until the
aggregate value of such fractional interests equals one whole share,
which will be issued with the next payment of dividends. Any
fractional share interests held on the date of liquidation of the
Corporation or redemption of Series A Preferred Stock by the
Corporation will be paid in cash by the Corporation to the holders
thereof pro rata at the same rate as the redemption price or
liquidation preference for whole shares. To the extent that
insufficient funds are available to pay all dividends accrued as of
each accrual date, dividends will be paid first pro rata to all holders
who have elected to receive dividends payable in additional shares of
Series A Preferred Stock until all such dividends accrued have been
paid, and then pro rata to all holders who have elected to receive
dividends payable in cash. If all shares of Series A Preferred Stock
have not been redeemed by December 31, 2004, the dividend rate will
thereafter increase to an annual rate per share of either (a) $1.10 in
cash, or (b) .12 additional shares of Preferred Stock, with the method
of payment selected at the option of the holder.
(b) RESTRICTIONS ON DIVIDENDS. Notwithstanding anything to the
contrary contained in Section 2(a) of this Certificate of Designation, so
long as any shares of Series A Preferred Stock shall be outstanding, the
Corporation shall not, without the prior approval of the holders of at
least fifty (50%) of the outstanding shares of Series A Preferred Stock,
(i) declare or pay a dividend on, (ii) make any distribution to the holders
of, or (iii) repurchase, redeem or make provisions for the purchase or
redemption (whether directly or through a subsidiary) of any class or
series of stock of the Corporation ranking junior to the Series A Preferred
Stock.
(c) ELECTION OF DIVIDEND PAYMENT METHOD. In order to exercise
the holder's option to receive either cash or stock in payment of dividends
on the Series A Preferred Stock, each holder of Series A Preferred Stock
will receive a form for election of method of payment, together with a copy
of the Corporation's most recent Annual Report on Form 10-KSB, as filed
with the Securities and Exchange
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Commission, and any other information that the Corporation determines
material in connection with the holder's election. In order to make a
change in the holder's payment status, the holder will be required to
execute and return the election form to the Corporation within 30 days
after the date the election form is sent by the Corporation to the
holder. If the holder does not return the form requesting a change in
payment status, the holder will be deemed to elect to retain the same
payment method last chosen by the holder until the next date that the
payment status may be changed. In the event that the Corporation is
unable to issue additional shares of Series A Preferred Stock because
it has not kept the registration statement for such shares effective
under the Securities Act of 1933, as amended, or because it has not
obtained or maintained the registration or qualification of shares of
Series A Preferred Stock in one or more of the states in which such
shares are to be issued, the Corporation will be required to accrue
dividends in cash on the Series A Preferred Stock affected thereby.
3. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) LIQUIDATION PREFERENCE. In the event of any liquidation,
dissolution or winding up of the Corporation, or the sale, conveyance,
lease, exchange or transfer of all or substantially all the property or
assets of the Corporation, whether voluntary or involuntary
("Liquidation"), the holders of each share of Series A Preferred Stock
shall be entitled to receive out of the Available Funds, before any sums
shall be paid or any assets distributed among the holders of shares of
Common Stock and any other class of stock of the Corporation ranking junior
to the Series A Preferred Stock, an amount or value (such amount or value
as described immediately below is hereinafter called the "Series A
Preference Price") equal to $10 per share plus all accrued and unpaid
dividends through the date of distribution. IF the Available Funds shall
be insufficient to permit the payment in full to all holders of the Series
A Preferred Stock the full amounts to which they shall be entitled by
reason of such Liquidation of the Corporation, then there shall be paid to
the holders of the Series A Preferred Stock in connection with such
Liquidation of the Corporation, an amount equal to the product derived by
multiplying the amount of Available Funds times a fraction, the numerator
of which shall be the full amount to which the holders of the Series A
Preferred Stock shall be entitled by reason of such Liquidation of the
Corporation and the denominator of which shall be the total amount which
would have been distributed by reason of such Liquidation of the
Corporation with respect to the Series A Preferred Stock then outstanding
had the Corporation possessed sufficient assets to pay the maximum amount
which the holders of all such stock would be entitled to receive in
connection with such Liquidation of the Corporation.
The holder of any shares of Series A Preferred Stock shall
not be entitled to receive any payment of the full balance owed for such
shares under this Section 3 until such holder shall cause to be delivered
to the Corporation (i) the
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certificate(s) representing such shares of Series A Preferred Stock (or
an affidavit of lost certificate and such other documentation or
assurances as are required by applicable law, in a form reasonably
acceptable to the Corporation) and (ii) transfer instrument(s)
satisfactory to the Corporation and sufficient to transfer such shares
of Series A Preferred Stock to the Corporation free of any adverse
interest. No interest shall accrue on any payment upon Liquidation
after the due date thereof.
After the Series A Preference Price shall have been paid in
full to the holders of the Series A Preferred Stock, or funds necessary for
such payment shall have been set aside by the Corporation in trust for the
account of holders of the Series A Preferred Stock and available for such
payment, the remaining assets of the Corporation available for distribution
to stockholders shall be distributed among the holders of Common Stock and
any other class of stock of the Corporation ranking junior to the Series A
Preferred Stock, and the holders of shares of the Series A Preferred Stock
shall not be entitled to any further participation in any distribution of
assets by the Corporation.
(b) PROPERTY. Whenever the distribution provided for in this
Section 3 shall be paid in property other than cash, the value of such
distribution shall be the fair market value of such property as determined
in good faith by the Board of Directors of the Corporation.
4. REDEMPTION.
(a) OPTIONAL REDEMPTION. The Corporation may at any time after
issuance, redeem any or all shares of the Series A Preferred Stock, pro
rata among the holders of the Series A Preferred Stock, by giving notice to
such holders of the date set for redemption (the "Redemption Date").
(b) REDEMPTION PRICE. The redemption price for the Series A
Preferred Stock shall be the amount determined by reference to the
following schedule, plus any dividends in arrears on the Series A Preferred
Stock to be redeemed (the "Redemption Price"): if redeemed during the 12
month period beginning January 1 and ending December 31:
Year Redemption Price
---- ----------------
1999 $11.00
2000 10.80
2001 10.60
2002 10.40
2003 10.20
2004 and thereafter 10.00
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(c) PARTIAL REDEMPTION. Any partial redemption shall be
selected by lot or pro rata among the holders of the Series A Preferred
Stock according to their respective ownership of Series A Preferred Stock,
or in some other equitable manner determined by the Board of Directors of
the Corporation in its sole discretion.
(d) TERMINATION OF DIVIDEND RIGHTS. From and after the close of
business on any Redemption Date, unless there shall have been a default in
payment of the applicable Redemption Price, all rights of the holders of
the shares to be redeemed on such date as holders of such shares (except
the right to receive the applicable Redemption Price plus accrued dividends
without interest upon surrender of their certificate or certificates) shall
cease with respect to such shares and such shares shall not thereafter be
transferred on the books of the Corporation or be deemed to be outstanding
for any purpose whatsoever.
(e) NOTICE AND MANNER OF REDEMPTION.
(1) At least thirty (30) but no more than sixty (60) days
prior to the date for any redemption of Series A Preferred Stock, written
notice shall be mailed, postage prepaid, to each holder of record (at the
close of business on the business day next preceding the day on which
notice is given) of the Series A Preferred Stock, at the address last shown
on the records of the Corporation for such holder or given by the holder to
the Corporation for the purpose of notice, notifying such holder of the
redemption to be effected, specifying the Redemption Date, the Redemption
Price and the place at which payment may be obtained, and calling upon such
holder to surrender to the Corporation, in the manner and at the place
designated, his or her certificate or certificates representing the shares
to be redeemed (a "Redemption Notice"). On or after each Redemption Date,
each holder of Series A Preferred Stock to be redeemed shall surrender to
the Corporation the certificate or certificates representing such shares,
in the manner and at the place designated in the Redemption Notice, and
thereupon the Redemption Price of such shares shall be payable to the order
of the person whose name appears on such certificate or certificates as the
owner thereof and each surrendered certificate shall be cancelled.
(2) On or prior to any Redemption Date, the Corporation
shall deposit the applicable Redemption Price for all outstanding shares of
Series A Preferred Stock to be redeemed with a bank or trust company having
aggregate capital and surplus in excess of $50,000,000 as a trust fund for
the benefit of the respective holders of such shares. Simultaneously, the
Corporation shall deposit irrevocable instruction and authority to such
bank or trust company to pay, on and after the Redemption Date, the
Redemption Price to the holders of the Series A Preferred Stock to be
redeemed upon surrender of their certificates therefor. The balance of any
monies deposited by the Corporation pursuant to this paragraph remaining
unclaimed at the expiration of one year following the applicable Redemption
Date shall thereafter be returned to the Corporation, provided that the
stockholder to whom
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such monies would be payable hereunder shall be entitled, upon proof of
its ownership of the stock to be redeemed and payment of any bond
requested by the Corporation, to receive such monies but without
interest from the Redemption Date.
5. CANCELLATION AND RE-DESIGNATION OF PREFERRED STOCK ON REDEMPTION.
(a) Upon redemption of the Series A Preferred Stock pursuant to
the terms of Section 4 hereof, all certificates of Series A Preferred Stock
surrendered for redemption shall be appropriately cancelled on the books of
the Corporation, and all of the shares so redeemed represented by all
certificates of the Series A Preferred Stock shall be deemed to be
cancelled.
(b) Upon such redemption, the existing designation, rights and
preferences of the Series A Preferred Stock so redeemed shall terminate and
such shares shall become undesignated Preferred Stock.
6. SERIES A PREFERRED STOCK VOTING RIGHTS. Except as otherwise
provided in this Certificate of Designation or as required by law, the
shares of Series A Preferred Stock shall be non-voting shares.
7. REISSUANCE OF THE SERIES A PREFERRED STOCK. Any shares of the
Series A Preferred Stock acquired by the Corporation by reason of
redemption, purchase, conversion or otherwise may be reissued at any time
by the Corporation in its discretion.
8. COMMON STOCK. All rights accruing to the outstanding shares of
the Corporation not expressly provided for to the contrary herein shall be
vested in the Common Stock. No share or shares of the Series A Preferred
Stock shall be convertible into Common Stock.
9. NO IMPAIRMENT. The Corporation shall not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue, or sale of securities or
any other voluntary action, avoid or seek to avoid the observance of
performance of any of the terms in this Certificate of Designation to be
observed or performed by the Corporation.
10. AMENDMENTS AND CHANGES. As long as any of the Series A Preferred
Stock shall be issued and outstanding, the Corporation shall not, without
first obtaining the approval (by vote or written consent, as provided by
law) of the holders of greater than 50% of the shares of Series A Preferred
Stock then outstanding, amend or repeal any provision of, or add any
provision to the Corporation's Certificate of Incorporation (including this
Certificate of Designation) or Bylaws which would alter or change the
preferences, rights, privileges, or powers of, or the restrictions provided
for the benefit of, the Series A Preferred Stock.
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IN WITNESS WHEREOF, the undersigned has caused this Certificate of
Designation, Preferences and Rights of Series A Cumulative Preferred Stock to be
duly executed by its President and attested to by its Secretary on this ______
day of October, 1998.
NBI, Inc.
By:
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Jay H. Lustig, President
ATTEST:
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Marjorie A. Cogan, Secretary
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