EXHIBIT 3(a)
ARTICLES OF INCORPORATION
OF
HAWAIIAN AIRLINES, INC.
ARTICLE I
NAME
The name of the Corporation shall be:
HAWAIIAN AIRLINES, INC.
ARTICLE II
OFFICES
The location of the principal office of the Corporation shall be in the City of
Honolulu, Island of Oahu, State of Hawaii, and the mailing address of the
principal office of the Corporation shall be 3375 Koapaka Street, Suite G-350,
Honolulu, Hawaii 96819, or such other mailing address as shall be specified by
an amendment to the Bylaws of the Corporation. The Corporation may have such
other offices within and without the State of Hawaii as its business may from
time to time require.
ARTICLE III
PURPOSES AND POWERS
The purpose of the Corporation is to engage in commercial air transportation and
any lawful act or activity for which corporations may be organized under the law
of Hawaii.
ARTICLE IV
CAPITAL STOCK
A. The Corporation is authorized to issue two classes of shares of capital
stock, which shall be designated Common Stock and Preferred Stock, respectively.
The total number of shares of capital stock which the Corporation is authorized
to issue is sixty-two million (62,000,000) shares.
B. (i) The total number of shares of Common Stock which the Corporation
shall have authority to issue is sixty million (60,000,000) shares, and all such
shares shall have a par value of $.01 per share.
(ii) The Common Stock shall have all the voting rights provided under
the Hawaii Business Corporation Act for voting common stock except as otherwise
provided in these Amended Articles of Incorporation.
(iii) The ownership or control of more than twenty-five percent (25%) of
the issued and outstanding voting capital stock of the Corporation by persons
who are not "citizens of the United States" as defined in Section 102(a)(15) of
the Transportation Act (49 U.S.C. Section 4101, ET SEQ., the "Act") is
prohibited; provided, however, that such percentage shall be deemed to be
automatically increased or decreased from time to time to that percentage of
ownership which is then permissible by persons who are not "citizens of the
United States" under the Act or under any successor or other law of the United
States of America which provides for the regulation of, or is otherwise
applicable to, the Corporation or its subsidiaries in their business activities.
As used in the preceding sentence, capital stock of the Corporation means the
Common Stock and any shares of Preferred Stock of the Corporation entitled to
vote on matters generally referred to the shareholders for a vote.
(iv) All shares of Common Stock shall rank equally in the event of
liquidation of the Corporation and shall be entitled to any assets of the
Corporation available for distribution to shareholders after payment in full of
any preferential amount to which holders of Preferred Stock may be entitled.
(v) Any certificates that represent shares of Class A Common Stock and
any documents that refer to shares of Class A Common Stock shall for all
purposes be deemed to represent and refer to shares of Common Stock of the
Company.
C. The total number of shares of Preferred Stock which this Corporation is
authorized to issue is two million (2,000,000) shares having a par value of $.01
each and which may be issued from time to time in one or more series. The two
million (2,000,000) shares is divided into 1,979,993 Preferred Stock, 20,000
Series A Junior Participating Cumulative Preferred Stock, 4 Series B Special
Preferred Stock, 1 Series C Special Preferred Stock, 1 Series D Special
Preferred Stock and 1 Series E Special Preferred Stock. Prior to or
simultaneously with the creation and/or issuance of any such series, the Board
of Directors is hereby authorized to fix the voting powers, designations,
preferences and participating, optional, relative or other special rights, and
qualifications, limitations or restrictions thereof to the full extent permitted
by the laws of the State of Hawaii, unless such voting powers, designations,
preferences, rights and qualifications, limitations or restrictions thereof are
otherwise established by these Amended Articles of Incorporation; provided that,
in no event shall any shares, except shares of the Series A Junior Participating
Cumulative Preferred Stock, par value $.01 per share, be entitled to more than
one vote per share on any matters for which shareholder approval is required.
Unless otherwise provided in the resolution creating a series, all shares of
that series redeemed, repurchased or otherwise reacquired, as well as shares of
a series authorized but not yet issued, shall thereupon, without further action
by the Board of Directors, be or become authorized but unissued shares subject
to all of the authority of the Board of Directors in this Article IV provided.
D. No holder of the shares of any class of capital stock or other securities
of the Corporation shall have any preemptive or preferential right of
subscription for or to purchase any shares of any class of stock or other
securities of the Corporation, whether now or hereafter authorized, other than
such right or rights, if any, and upon such terms and at such prices as the
Board of Directors, in its discretion, from time to
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time may determine. The Board of Directors may issue shares of capital stock or
other securities without offering the same in whole or part to the holders of
the capital stock or any other securities of the Corporation.
E. Sections 415-171 and 415-172 of the Hawaii Revised Statutes, as amended,
relating to control share acquisitions, shall not apply to any acquisition of
shares of capital stock of the Corporation.
ARTICLE V
BOARD OF DIRECTORS
If the Corporation has only one stockholder, the Board of Directors shall have
one or more directors. If the Corporation has two stockholders, the Board of
Directors shall have two or more directors. If the Corporation has three or
more stockholders, the Board of Directors shall have a minimum of three
directors. Not less than one member of the Board of Directors shall be a
resident of the State of Hawaii, and in the absence of such one member, the
Board of Directors shall not function. The number of directors shall be fixed
by, and the members of the Board of Directors shall be elected or appointed at
such times, in such manner and for such terms as may be prescribed by the Bylaws
which also may provide for the removal of directors and filling of vacancies and
may provide that the remaining members of the Board of Directors, although less
than a majority thereof, may by the affirmative vote of the majority of such
remaining members fill vacancies in the Board of Directors. The directors need
not be stockholders of the Corporation. The Board of Directors shall have full
power to control and direct the business and affairs of the Corporation,
subject, however, to any limitations which may be set forth in the Hawaii
Business Corporation Act, in these Articles or in the Bylaws. The Board of
Directors, without the approval of the stockholders of the Corporation, or of
any percentage thereof, may authorize the borrowing of money or the incurring of
debts even though, as a result thereof, the amount of the Corporation's
indebtedness may exceed its capital stock.
ARTICLE VI
OFFICERS
The officers of the Corporation shall consist of such officers and assistant
officers and agents as may be prescribed by the Bylaws. The officers shall be
elected or appointed, hold office and may be removed, and shall have such
qualifications, as may be prescribed by the Bylaws. Any two or more offices may
be held by the same person, provided, however, that not less than two (2)
persons shall be officers.
All officers and agents of the Corporation, as between themselves and the
Corporation, shall have such authority and perform such duties in the management
of the Corporation as may be prescribed by the Bylaws, or as may be determined
by resolution of the Board of Directors not inconsistent with the Bylaws.
ARTICLE VII
INDEMNITY AND LIMIT ON LIABILITY
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A. The Corporation shall indemnify each person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that such person is or was a director or officer of the Corporation, or is
or was serving at the request of the Corporation as a director or officer of
another Corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
this Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the conduct of the person was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement,
conviction, or upon a plea or nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which such person reasonably believed to be in or not opposed to the best
interests of this Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that such conduct was unlawful.
B. The Corporation shall indemnify each person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that such person is or was a director or officer of the
Corporation or any subsidiary of the Corporation, or is or was serving at the
request of the Corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, including any subsidiary
of the Corporation against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of this
Corporation and, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of such person's duty to
this Corporation unless and only to the extent that the court in which such
action or suit was brought or in any other court having jurisdiction in the
premises shall determine upon application that, despite the adjudication of
liability but in view of all of the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper.
C. To the extent that a director or officer of the Corporation or a person
serving at the request of the Corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (A) or paragraph (B) of this Article VII, or
in defense of any claim, issue or matter therein, such person shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection therewith.
D. Any indemnification under paragraph A or paragraph B of this Article VII
shall be made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of conduct set forth in
paragraph A or paragraph B. Such determination shall be made (1) by the Board
of Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding,
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or (2) if such a quorum is not obtainable by independent legal counsel in a
written opinion to the Corporation, or (3) by a majority vote of the
stockholders, or (4) by the court in which the proceeding is or was pending upon
application made by the Corporation or such person or the attorney or other
person rendering services in connection with the defense, whether or not the
application by such person, attorney, or other person is opposed by the
Corporation.
E. Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final disposition of
such action, suit or proceeding as authorized by the Board of Directors in a
particular case upon receipt of an undertaking by or on behalf of the director
or officer to repay such amount unless it shall ultimately be determined that he
is entitled to be indemnified by the Corporation as authorized in this Article
VII.
F. Any indemnification pursuant to this Article VII shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any Bylaw, argument or otherwise and shall continue as to a
person who has ceased to be a director or officer and shall inure to the benefit
of the heirs, executors and administrators of such a person.
G. The Corporation shall have the power to purchase and maintain insurance on
behalf of any person who is or was a director or officer of the Corporation, or
is or was serving at the request of the Corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the
provisions of this Article VII.
H. To the fullest extent permitted by the Hawaii Business Corporation Act as
the same exists or may hereafter be amended, a director of the Corporation shall
not be liable to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director. If the Hawaii Business Corporation Act
is amended after the date of the filing of these Articles of Incorporation to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Hawaii
Business Corporation Act, as so amended from time to time. No repeal or
modification of this Article VII by the stockholders shall adversely affect any
right or protection of a director of the Corporation existing by virtue of this
Article VII at the time of such repeal or modification.
ARTICLE VIII
LIMITED LIABILITY
No stockholder of the Corporation shall be liable for any debt of the
Corporation beyond any amount which may be due and unpaid upon the par value of
the share or shares held by such stockholder.
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ARTICLE IX
BYLAWS
In furtherance and not in limitation of the powers conferred by statute, the
power to alter, amend or repeal the Bylaws or adopt new Bylaws, subject to
repeal or change by action of the stockholders, shall be vested in the Board of
Directors.
ARTICLE X
SERVICE OF PROCESS
Service of process may be made upon any officer of the Corporation.
ARTICLE XI
AMENDMENT
These Articles may be amended by the affirmative vote of the holders of not less
than two-thirds (2/3) of all the stock of the Corporation issued and outstanding
and having voting power, at a meeting duly called for such purpose, hereafter
prescribed by statute, and all rights conferred on stockholders herein are
granted subject to this reservation.
ARTICLE XII
DURATION
The Corporation shall exist in Perpetuity.
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DESIGNATION OF PREFERRED STOCK
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series
shall be designated as Series A Junior Participating Cumulative Preferred Stock,
par value $.01 per share (the "Series A Preferred Stock"), and the number of
shares constituting such series shall be 20,000 (twenty thousand).
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(a) The holders of shares of Series A Preferred Stock, in preference
to the holders of shares of Common Stock, par value $.01 per share, of the
Corporation (the "Common Stock") and of any other junior stock of the
Corporation that may be outstanding, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the [tenth day of January,
April, July and October] in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a share
of Series A Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (i) $.25 per share ($1.00 per annum), or (ii)
subject to the provision for adjustment hereinafter set forth, 1000 times the
aggregate per share amount of all cash dividends, and 1000 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock, or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event that the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then and in each such event, the amount
to which the holder of each share of Series A Preferred Stock was entitled
immediately prior to such event under clause (ii) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event, and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (a) of this Section 2
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided, however,
that in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $.25 per
share ($1.00 per annum) on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date
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of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which cases such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
cumulate but shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Each share of Series A Preferred Stock shall entitle the holder
thereof to 1000 votes (and each one one-thousandth of a share of Series A
Preferred Stock shall entitle the holder thereof to one vote) on all matters
submitted to a vote of the shareholders of the Corporation. In the event that
the Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then and in each such event,
the number of votes per share to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event, and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided in the Amended Articles of
Incorporation of the Corporation or herein or by law, the holders of shares of
Series A Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of shareholders of the
Corporation.
(c) In addition, the holders of shares of Series A Preferred Stock
shall have the following special voting rights:
(i) In the event that at any time dividends on Series A
Preferred Stock, whenever accrued and whether or not consecutive, shall not have
been paid or declared and a sum sufficient for the payment thereof set aside, in
an amount equivalent to six quarterly dividends on all shares of Series A
Preferred Stock at the time outstanding, then and in each such event, the
holders of shares of Series A Preferred Stock and each other series of preferred
stock now or hereafter issued that shall be accorded such class voting right by
the Board of Directors and that shall have the right to elect one director (or,
in the event any such other series is entitled to a greater number of directors,
such number of directors, which shall be cumulative with
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and not in addition to the director provided for herein, such director or
directors being hereinafter referred to as "Special Directors") as the result of
a prior or subsequent default in payment of dividends on such series (each such
other series being hereinafter called "Other Series of Preferred Stock"), voting
separately as a class without regard to series, shall be entitled to elect the
Special Director at the next annual meeting of shareholders of the Corporation,
in addition to the directors to be elected by the holders of all shares of the
Corporation entitled to vote for the election of directors, and the holders of
all shares (including the Series A Preferred Stock) otherwise entitled to vote
for directors, voting separately as a class, shall be entitled to elect the
remaining members of the Board of Directors, provided that the Series A
Preferred Stock and each Other Series of Preferred Stock, voting as a class,
shall not have the right to elect more than one Special Director (in addition to
any Special Director to which the holders of any Other Series of Preferred Stock
are then entitled). Such special voting right of the holders of shares of
Series A Preferred Stock may be exercised until all dividends in default on the
Series A Preferred Stock shall have been paid in full or declared and funds
sufficient therefor set aside, and when so paid or provided for, such special
voting right of the holders of shares of Series A Preferred Stock shall cease,
but subject always to the same provisions for the vesting of such special voting
rights in the event of any such future dividend default or defaults.
(ii) At any time after such special voting rights shall have so
vested in the holders of shares of Series A Preferred Stock, the Secretary of
the Corporation may, and upon the written request of the holders of record of
10% or more in number of the shares of Series A Preferred Stock and each Other
Series of Preferred Stock then outstanding addressed to the Secretary at the
principal executive office of the Corporation shall, call a special meeting of
the holders of shares of Preferred Stock so entitled to vote, for the election
of the Special Directors to be elected by them as herein provided, to be held
within 60 days after such call and at the place and upon the notice provided by
law and in the Bylaws for the holding of meetings of shareholders; provided,
however, that the Secretary shall not be required to call such special meeting
in the case of any such request received less than 90 days before the date fixed
for any annual meeting of shareholders, and if in such case such special meeting
is not called or held, the holders of shares of Preferred Stock so entitled to
vote shall be entitled to exercise the special voting rights provided in this
paragraph at such annual meeting. If any such special meeting required to be
called as above provided shall not be called by the Secretary within 30 days
after receipt of any such request, then the holders of record of 10% or more in
number of the shares of Series A Preferred Stock and each Other Series of
Preferred Stock then outstanding may designate in writing one of their number to
call such meeting, and the person so designated may, at the expense of the
Corporation, call such meeting to be held at the place and upon the notice given
by such person, and for that sole purpose shall have access to the stock books
of the Corporation. No such special meeting and no adjournment thereof shall be
held on a date later than 60 days before the annual meeting of shareholders.
If, at any meeting so called or at any annual meeting held while the holders of
shares of Series A Preerred Stock have the special voting rights provided for in
this paragraph, the holders of not less than 40% of the aggregate voting power
of Series A Preferred Stock and each Other Series of Preferred Stock then
outstanding are present in person or by proxy, which percentage shall be
sufficient to constitute a quorum for the election of additional directors as
herein provided, the then authorized number of directors of the Corporation
shall be increased by the number of Special Directors to be elected, as of the
time of such special meeting or the time of the first such annual meeting held
while
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such holders have special voting rights and such quorum is present, and the
holders of shares of Series A Preferred Stock and each Other Series of Preferred
Stock, voting as a class, shall be entitled to elect the Special Director or
Directors so provided for. If the directors of the Corporation are then divided
into classes under provisions of the Amended Articles of Incorporation of the
Corporation or the Bylaws, the Special Director or Directors shall belong to
each class of directors in which a vacancy is created as a result of such
increase in the authorized number of directors. If the foregoing expansion of
the size of the Board of Directors shall not be valid under applicable law, then
the holders of shares of Series A Preferred Stock and of each Other Series of
Preferred Stock, voting as a class, shall be entitled, at the meeting of
shareholders at which they would otherwise have voted, to elect a Special
Director or Directors to fill any then existing vacancies on the Board of
Directors, and shall additionally be entitled, at such meeting and each
subsequent meeting of shareholders at which directors are elected, to elect all
of the directors then being elected until by such class vote the appropriate
number of Special Directors has been so elected.
(iii) Upon the election at such meeting by the holders of shares
of Series A Preferred Stock and each Other Series of Preferred Stock, voting as
a class, of the Special Director or Directors they are entitled so to elect, the
persons so elected, together with such persons as may be directors or as may
have been elected as directors by the holders of all shares (including Series A
Preferred Stock) otherwise entitled to vote for directors, shall constitute the
duly elected directors of the Corporation. Each Special Director so elected by
holders of shares of Series A Preferred Stock and each Other Series of Preferred
Stock, voting as a class, shall serve until the next annual meeting or until
their respective successors shall be elected and qualified, or if any such
Special Director is a member of a class of directors under provisions dividing
the directors into classes, each such Special Director shall serve until the
annual meeting at which the term of office of such Special Director's class
shall expire or until such Special Director's successor shall be elected and
shall qualify, and at each subsequent meeting of shareholders at which the
directorship of any Special Director is up for election, said special class
voting rights shall apply in the reelection of such Special Director or in the
election of such Special Director's successor; provided, however, that whenever
the holders of shares of Series A Preferred Stock and each Other Series of
Preferred Stock shall be divested of the special rights to elect one or more
Special Directors as above provided, the terms of office of all persons elected
as Special Directors, or elected to fill any vacancies resulting from the death,
resignation, or removal of Special Directors shall forthwith terminate (and the
number of directors shall be reduced accordingly).
(iv) If, at any time after a special meeting of shareholders or
an annual meeting of shareholders at which the holders of shares of Series A
Preferred Stock and each Other Series of Preferred Stock, voting as a class,
have elected one or more Special Directors as provided above, and while the
holders of shares of Series A Preferred Stock and each Other Series of Preferred
Stock shall be entitled so to elect one or more Special Directors, the number of
Special Directors who have been so elected (or who by reason of one or more
resignations, deaths or removals have succeeded any Special Directors so
elected) shall by reason of resignation, death or removal be reduced the vacancy
in the Special Directors may be filled by any one or more remaining Special
Director or Special Directors. In the event that such election shall not occur
within 30 days after such vacancy arises, or in the event that there shall not
be incumbent at least one Special Director, the Secretary of the Corporation
may,
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and upon the written request of the holders of record of 10% or more in number
of the shares of Series A Preferred Stock and each Other Series of Preferred
Stock then outstanding addressed to the Secretary at the principal office of the
Corporation shall, call a special meeting of the holders of shares of Series A
Preferred Stock and each Other Series of Preferred Stock so entitled to vote,
for an election to fill such vacancy or vacancies, to be held within 60 days
after such call and at the place and upon the notice provided by law and in the
Bylaws for the holding of meetings of shareholders; provided, however, that the
Secretary shall not be required to call such special meeting in the case of any
such request received less than 90 days before the date fixed for any annual
meeting of shareholders, and if in such case such special meeting is not called,
the holders of shares of Preferred Stock so entitled to vote shall be entitled
to fill such vacancy or vacancies at such annual meeting. If any such special
meeting required to be alled as above provided shall not be called by the
Secretary within 30 days after receipt of any such request, then the holders of
record of 10% or more in number of the shares of Series A Preferred Stock and
each Other Series of Preferred Stock then outstanding may designate in writing
one of their number to call such meeting, and the person so designated may, at
the expense of the Corporation, call such meeting to be held at the place and
upon the notice above provided, and for that purpose shall have access to the
stock books of the Corporation; no such special meeting and no adjournment
thereof shall be held on a date later than 60 days before the annual meeting of
shareholders.
(d) Nothing herein shall prevent the directors or shareholders from
taking any action to increase the number of authorized shares of Series A
Preferred Stock, or increasing the number of authorized shares of Preferred
Stock of the same class as the Series A Preferred Stock or the number of
authorized shares of Common Stock, or changing the par value of the Common Stock
or Preferred Stock, or issuing options, warrants or rights to any class of stock
of the Corporation as authorized by the Amended Articles of Incorporation of the
Corporation, as it may hereafter be amended.
(e) Except as set forth herein, holders of shares of Series A
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote as set forth in the
Amended Articles of Incorporation of the Corporation or herein or by law) for
taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(a) Whenever any dividends or other distributions payable on the
Series A Preferred Stock as provided in Section 2 hereof are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not, directly or indirectly:
(i) declare or pay dividends on, or make any other
distributions with respect to, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions with respect to, any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
A Preferred Stock, except dividends paid ratably on shares of the Series A
Preferred Stock and all such parity
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stock on which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or winding up)
to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of stock ranking on a parity with the
Series A Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration, directly or
indirectly, any shares of stock of the Corporation unless the Corporation could,
under paragraph (a) of this Section 4, purchase or otherwise acquire such shares
at such time and in such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock, without designation as to series, and may be reissued as part
of any series of preferred stock created by resolution or resolutions of the
Board of Directors (including Series A Preferred Stock), subject to the
conditions and restrictions on issuance set forth herein.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made to:
(a) the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received the greater of (i) $1.00 per share ($.001
per one one-thousandth of a share), plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, or (ii) an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 1000 times the aggregate amount
to be distributed per share to holders of shares of Common Stock; or
(b) the holders of shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up.
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In the event that the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then and in each such event, the aggregate amount to
which the holder of each share of Series A Preferred Stock was entitled
immediately prior to such event under the proviso in clause (a) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event, and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
SECTION 7. CONSOLIDATION, MERGER, ETC. In the event that the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, or otherwise
changed, then and in each such event, the shares of Series A Preferred Stock
shall at the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 1000
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event that the Corporation shall
at any time declare or pay any dividend on Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then and in each such event,
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event, and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
SECTION 8. NO REDEMPTION. The shares of Series A Preferred Stock
shall not be redeemable. Notwithstanding the foregoing, the Corporation may
acquire shares of Series A Preferred Stock in any other manner permitted by law,
the Amended Articles of Incorporation of the Corporation or herein.
SECTION 9. RANK. Unless otherwise provided in the Amended Articles
of Incorporation of the Corporation, including any amendment relating to a
subsequent series of preferred stock of the Corporation, the Series A Preferred
Stock shall rank junior to all other series of the Corporation's preferred stock
as to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding up, and senior to the Common Stock of the Corporation.
SECTION 10. AMENDMENT. The Amended Articles of Incorporation of the
Corporation shall not be amended in any manner that would materially and
adversely alter or change the powers, preferences or special rights of the
Series A Preferred Stock without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single series.
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SECTION 11. FRACTIONAL SHARES. Series A Preferred Stock may be
issued in fractions of a share (in one one-thousandths (1/1000) of a share and
integral multiples thereof) that shall entitle the holder thereof, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and have the benefit of all other rights
of holders of shares of Series A Preferred Stock.
SECTION 12. PREEMPTIVE RIGHTS. No holder of shares of Series A
Preferred Stock shall have any preemptive or preferential rights of subscription
for or to purchase any shares of any class of stock or other securities of the
Corporation, whether now or hereafter authorized, other than such right or
rights, if any, and upon such terms and at such prices as the Board of
Directors, in its discretion, from time to time may determine. The Board of
Directors may issue shares of any class of stock or other securities without
offering the same in whole or in part to the stockholders of the Corporation.
DESIGNATION OF SPECIAL PREFERRED STOCK
SECTION 1. DESIGNATION AND AMOUNT. The designation of the four
series so created shall be (a) Series B Special Preferred Stock, par value $.01
per share (the "Series B Special Preferred Stock"), (b) Series C Special
Preferred Stock, par value $.01 per share (the "Series C Special Preferred
Stock"), (c) Series D Special Preferred Stock, par value $.01 per share (the
"Series D Special Preferred Stock") and (d) Series E Special Preferred Stock,
par value $.01 per share (the "Series E Special Preferred Stock") (collectively,
the "Special Preferred Stock"). The Series B Special Preferred Stock shall
consist of four (4) shares. The Series C Special Preferred Stock shall consist
of one (1) share. The Series D Special Preferred Stock shall consist of one (1)
share. The Series E Special Preferred Stock shall consist of one (1) share.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS. At any time that a
dividend or distribution is declared and paid with respect to Common Stock, a
dividend shall be paid on the Special Preferred Stock in an amount per share
equal to twice the dividend per share paid on the Common Stock, and, except as
provided in Sections 6 and 7 hereof, the Special Preferred Stock shall not be
entitled to receive any other dividends or distributions thereon.
SECTION 3. VOTING RIGHTS.
(a) VOTING RIGHTS OF THE SPECIAL PREFERRED STOCK. The Special
Preferred Stock shall have the right to vote: (i) as required by the Hawaii
Business Corporation Act and (ii) together with Class A Common Stock as a single
class with respect to any matters submitted to the shareholders of the Class A
Common Stock of the Corporation. The holder of each share of Special Preferred
Stock shall be entitled to vote each share of the Special Preferred Stock of the
Corporation which shall have been held by such holder and registered in the name
of such holder on the books of the Corporation.
(b) NOTICE. So long as any shares of the Special Preferred Stock
remain outstanding, the Corporation will provide the holders of the Special
Preferred Stock with notice of each annual and special meeting of stockholders,
including without limitation any meeting at which matters on which the Special
Preferred Stock is entitled to vote, to the same extent as the holders of the
Common Stock.
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(c) CONDITIONAL RIGHT TO ELECT DIRECTORS TO FILL VACANCIES.
(i) SERIES B SPECIAL PREFERRED STOCK. In the event of a vacancy
or vacancies on the Board of Directors of the Corporation caused by the removal,
resignation or death of one or more directors whom the holders of Series B
Special Preferred Stock are entitled to identify to the Board of Directors for
nomination to the Board of Directors pursuant to the Bylaws of the Corporation,
and unless such vacancy is filled by the Board of Directors in accordance with
the Bylaws within 30 days, such vacancy or vacancies may be filled by the
affirmative vote of a majority of the holders of the Series B Special Preferred
Stock at a special meeting of holders of Series B Special Preferred Stock called
for such purpose, or by the unanimous written consent in lieu of meeting of all
holders of Series B Special Preferred Stock, such director or directors to hold
office until the next election of directors.
(ii) SERIES C SPECIAL PREFERRED STOCK. In the event of a vacancy
on the Board of Directors of the Corporation caused by the removal, resignation
or death of a director whom the holders of Series C Special Preferred Stock are
entitled to identify to the Board of Directors for nomination pursuant to the
Bylaws of the Corporation, and unless such vacancy is filled by the Board of
Directors in accordance with the Bylaws within 30 days, such vacancy may be
filled by the affirmative vote of a majority of the holders of the Series C
Special Preferred Stock at a special meeting of holders of the Series C Special
Preferred Stock called for such purpose, or by the unanimous written consent in
lieu of meeting of all holders of Series C Special Preferred Stock, such
director to hold office until the next election of directors.
(iii) SERIES D SPECIAL PREFERRED STOCK. In the event of a
vacancy on the Board of Directors of the Corporation caused by the removal,
resignation or death of a director whom the holders of Series D Special
Preferred Stock are entitled to identify to the Board of Directors for
nomination pursuant to the Bylaws of the Corporation, unless such vacancy is
filled by the Board of Directors in accordance with the Bylaws within 30 days,
such vacancy may be filled by the affirmative vote of a majority of the holders
of the Series D Special Preferred Stock at a special meeting of holders of
Series D Special Preferred Stock called for such purpose, or by the unanimous
written consent in lieu of meeting of all holders of Series D Special Preferred
Stock, such director to hold office until the next election of directors.
(iv) SERIES E SPECIAL PREFERRED STOCK. In the event of a vacancy
on the Board of Directors of the Corporation caused by the removal, resignation
or death of a director whom the holders of Series E Special Preferred Stock are
entitled to identify to the Board of Directors for nomination pursuant to the
Bylaws of the Corporation, unless such vacancy is filled by the Board of
Directors in accordance with the Bylaws within 30 days, such vacancy may be
filled by the affirmative vote of a majority of the holders of the Series E
Special Preferred Stock at a special meeting of holders of Series E Special
Preferred Stock called for such purpose, or by the unanimous written consent in
lieu of meeting of all holders of Series E Special Preferred Stock, such
director to hold office until the next election of directors.
(d) Except as otherwise expressly provided herein or otherwise
expressly required by law, the Special Preferred Stock shall not have any other
voting rights with respect to the affairs of the Corporation.
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SECTION 4. CONVERSION.
(a) CONVERTIBLE INTO CLASS A COMMON STOCK.
(i) SERIES B SPECIAL PREFERRED STOCK.
a) TRANSFER. A share of Series B Special Preferred Stock
shall be converted into one share of Class A Common Stock automatically upon
transfer of such share to any person (a "Transferee") who is not an "affiliate"
of the initial holder of such share of Series B Special Preferred Stock.
"Affiliate" shall mean any corporation, partnership, limited liability company,
trust or other entity or an individual, which is, or is at least 50% owned,
directly or indirectly, by, one or more of the stockholders of the general
partners and/or the stockholders of the limited partners of the holder of the
Series B Special Preferred Stock as of the date of issuance thereof.
b) LESS THAN 5%. Each share of Series B Special Preferred
Stock shall be converted into one share of Class A Common Stock automatically if
the holder of Series B Special Preferred Stock is the holder of record of less
than 5% of the "outstanding common equity interest" of the stock of the
Corporation for a period of 365 consecutive days. "Outstanding common equity
interest" shall mean outstanding Class A Common Stock, outstanding Class B
Common Stock, Class A Common Stock to be issued upon exercise, conversion or
exchange of outstanding warrants, stock options, or convertible stock, or other
securities exerciseable, convertible or exchangeable into Class A Common Stock
(without taking into effect any anti-dilution provisions in such securities).
(ii) SERIES C SPECIAL PREFERRED STOCK. A share of Series C
Special Preferred Stock shall be converted into one share of Class A Common
Stock automatically upon transfer of such share to any Transferee. In addition
to the foregoing, each share of the Series C Special Preferred Stock shall be
converted into one share of Class A Common Stock automatically if the collective
bargaining agreement by and between the holders of such share and the
Corporation is amended through collective bargaining pursuant to the Railway
Labor Act, 45 U.S.C. Section 156, so that the collective bargaining agreement
no longer entitles such holders to nominate a representative on the Board of
Directors.
(iii) SERIES D SPECIAL PREFERRED STOCK. A share of Series D
Special Preferred Stock shall be converted into one share of Class A Common
Stock automatically upon transfer of such share to any Transferee. In addition
to the foregoing, each share of the Series D Special Preferred Stock shall be
converted into one share of Class A Common Stock automatically if the collective
bargaining agreement by and between the holders of such share and the
Corporation is amended through collective bargaining pursuant to the Railway
Labor Act, 45 U.S.C. Section 156, so that the collective bargaining agreement
no longer entitles such holders to nominate a representative on the Board of
Directors.
(iv) SERIES E SPECIAL PREFERRED STOCK. A share of Series E
Special Preferred Stock shall be converted into one share of Class A Common
Stock automatically upon transfer of such share to any Transferee. In addition
to the foregoing, each share of the Series E Special Preferred Stock shall be
converted into one share of Class A Common Stock automatically if the collective
bargaining agreement by and between the holders of such share and the
Corporation is amended
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through collective bargaining pursuant to the Railway Labor Act, 45 U.S.C.
Section 156, so that the collective bargaining agreement no longer entitles
such holders to nominate a representative on the Board of Directors.
(b) TIME OF CONVERSION AND SURRENDER OF SHARES. Conversion shall be
deemed to have been effected on the date that, as the case may be, (i) the share
of Special Preferred Stock is transferred to the Transferee, (ii) is the 365th
consecutive day after the holder of Series B Special Preferred Stock is the
holder of record of less than 5% of the outstanding common equity interest of
the stock of the Corporation, and (iii) the related collective bargaining
agreement is amended, and each such date is referred to herein as the
"Conversion Date." The Transferee or the other holder of the converted Special
Preferred Stock shall be deemed to have become a stockholder of record of the
Class A Common Stock on the applicable Conversion Date. On the applicable
Conversion Date or as soon as practicable thereafter, any holder of a converted
share of Special Preferred Stock must deliver the certificate representing such
share to the Corporation during regular business hours at the principal office
of the Corporation or at such other place as may be designated in writing
delivered to the holder of such certificate by the Corporation, duly endorsed
for transfer to the Corporation (if required by it), accompanied by written
notice identifying the Transferee or other holder, as the case may be. As
promptly as practicable thereafter, the Corporation shall issue and deliver at
such office to such Transferee or other holder a certificate for the shares of
Class A Common Stock issuable upon conversion.
(c) ISSUANCE OF CLASS A COMMON STOCK. All shares of Class A Common
Stock that may be issued upon conversion of the Special Preferred Stock shall be
issued for consideration that the Board of Directors hereby determines to be
adequate, and upon issuance, such shares of Class A Common Stock will be validly
issued, fully paid and nonassessable. The Corporation will pay any and all
documentary and other taxes that may be payable in respect of any issue or
delivery of shares of Class A Common Stock on conversion of the Special
Preferred Stock pursuant hereto. The Corporation shall not, however, be
required to pay any tax that may be payable in respect of any transfer involved
in the issue and delivery of shares of Class A Common Stock in a name other than
that in which the shares of the Special Preferred Stock so converted were
registered, and no such issue or delivery shall be made unless and until the
person requesting such transfer has paid to the Corporation the amount of any
such tax or has established to the satisfaction of the Corporation that such tax
has been paid.
(d) ADJUSTMENTS. The number of shares of Class A Common Stock
issuable upon the conversion of each share of the Special Preferred Stock shall
not be subject to adjustment.
SECTION 5. REACQUIRED SHARES. Any shares of Special Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever (including upon conversion into Class A Common Stock) shall be
retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of preferred
stock, without designation as to series, and may be reissued as part of any
series of preferred stock subsequently created by resolution or resolutions of
the Board of Directors.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. In the event of
the liquidation, dissolution or winding up of the Corporation, whether voluntary
or
17
involuntary, the holders of the Special Preferred Stock shall be entitled to
receive, out of the assets of the Corporation, whether such assets are capital
or surplus of any nature, $.01 per share of Special Preferred Stock before any
payment shall be made or any assets distributed to the holders of the Common
Stock or the holders of any other class of stock junior in respect of
liquidation rights to the Special Preferred Stock; and the holders of the
Special Preferred Stock shall not be entitled to any further payments. If upon
such liquidation, dissolution or winding up, whether voluntary or involuntary,
the assets of the Corporation or proceeds thereof shall be insufficient to make
the full liquidating payment of $.01 per share of the Special Preferred Stock
and the full liquidating payment due to any holder of Preferred Stock of any
series ranking pari passu with the Special Preferred Stock, then such assets and
proceeds shall be distributed among the holders of the Special Preferred Stock,
ratably on a share for share basis in accordance with the respective amounts
which would be payable on all such series of Preferred Stock, if all remaining
liquidating amounts payable were paid in full and nothing shall be paid to the
holders of any other class of stock junior to the Special Preferred Stock.
Neither a consolidation nor merger of the Corporation with or into one or more
corporations, nor a sale of all or a substantial part of the assets of the
Corporation, shall be deemed to be a liquidation, dissolution or winding up
within the meaning of this Section 6 unless such consolidation, merger or sale
shall be in connection with a plan of liquidation, dissolution or winding up of
the business of the Corporation.
SECTION 7. CONSOLIDATION, MERGER, ETC. In the event that the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, or otherwise
changed, then and in each such event, all shares of Special Preferred Stock
shall at the same time be similarly exchanged or changed in an amount per share
equal to the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged.
SECTION 8. NO REDEMPTION. The shares of Special Preferred Stock
shall not be redeemable. Notwithstanding the foregoing, the Corporation may
acquire shares of Special Preferred Stock in any other manner permitted by law,
the Amended Articles of Incorporation of the Corporation or herein.
SECTION 9. RANK. With regard to rights to receive distributions
upon liquidation, dissolution or winding up of the Corporation, the Special
Preferred Stock shall rank (i) senior to the Common Stock of the Corporation,
(ii) senior to any series of Preferred Stock of the Corporation the terms of
which specifically provide that such series shall rank junior to the Special
Preferred Stock, (iii) junior to any series of Preferred Stock of the
Corporation the terms of which specifically provide that such series shall rank
senior to the Special Preferred Stock, and (iv) pari passu with each other and
with any series of Preferred Stock of the Corporation the terms of which do not
specifically provide that such series shall rank junior or senior to the Special
Preferred Stock.
SECTION 10. PREEMPTIVE RIGHTS. No holder of the shares of Special
Preferred Stock shall have any preemptive or preferential rights of subscription
for or to purchase any shares of any class of stock or other securities of the
Corporation, whether now or hereafter authorized, other than such right or
rights, if any, and upon such terms and at such prices as the Board of
Directors, in its discretion from time to
18
time may determine. The Board of Directors may issue shares of Special
Preferred Stock or other securities without offering the same in whole or in
part to the stockholders of the Corporation.
19