Exhibit 3.2.1
CERTIFICATE OF INCORPORATION
OF
DAHX, INC.
FIRST: The name of the corporation (the "Corporation") shall be DAHX,
Inc.
SECOND: The address of the Corporation's registered office in the State
of Delaware is 15 East North Street, Dover, Delaware 19901, County of Kent.
The name of its registered agent at such address is Paracorp, Incorporated.
THIRD: The nature of the business or the purpose to be conducted or
promoted by the Corporation is to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: The aggregate number of shares of all classes of which the
Corporation shall have authority to issue is as follows:
(i) 35,000,000 shares of Common Stock, with par value of $0.01 per share
(the "Common Shares");
(ii) 167,702 shares of Series A Convertible Preferred Stock, with par
value of $0.01 per share (the "Series A Preferred Shares"), 1,646,316 shares
of Series B Convertible Preferred Stock, with par value of $0.01 per share
(the "Series B Preferred Shares"), 3,000,000 shares of Series C Convertible
Preferred Stock, with par value of $0.01 per share (the "Series C Preferred
Shares"), 2,000,000 shares of Series D Convertible Preferred Stock, with par
value of $0.01 per share (the "Series D Preferred Shares"), and 1,500,000
shares of Series E Convertible Preferred Stock, with par value of $0.01 per
share (the "Series E Preferred Stock," and, collectively, with all of the
shares described in this clause (h), the "Convertible Preferred Shares");
PROVIDED, HOWEVER, that the number of authorized Convertible Preferred Shares
of each series shall be reduced by the number of such Convertible Preferred
Shares converted to Common Shares from time to time or otherwise acquired by
the Corporation, and the Corporation shall not be authorized to issue
Convertible Preferred Shares in replacement of or substitution for any such
converted or acquired Convertible Preferred Shares; and
(iii) 10,000,000 shares of Preferred Stock, with par value of $0.01 per
share (the "Undesignated Preferred Shares" and together with the Convertible
Preferred Shares, the "Preferred Shares"). The Undesignated Preferred Shares
may be issued in one or more series. The Board of Directors is hereby
authorized pursuant to the General Corporation Law of Delaware to fix or
alter from time to time the designations, powers, preferences and rights and
the qualifications, limitations or restrictions of the shares of each such
series of Undesignated Preferred Stock, and to establish from time to time
the number of shares constituting any such series or any of them; and to
increase or decrease the number of shares of any series, but not below the
number of shares of such
series then outstanding. In case the number of shares of any series shall be
decreased to accordance with the foregoing sentence, the shares constituting
such decrease shall resume the status that they had prior to the adoption of
the resolution originally fixing the number of shares of such series.
FIFTH: The following is a statement of the designations, powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, in respect of the Convertible Preferred Shares:
1. Except to the extent prohibited by law and subject to the
restrictions contained in that certain Credit Agreement dated November 2,
1994 among DeCrane Aircraft Holdings, Inc., an Ohio corporation ("DAH Ohio"),
Internationale Nederlanden (U.S.) Capital Corporation, a Delaware corporation
("ING"), certain affiliates of DAH, Ohio and certain other parties, as such
agreement may be amended from time to time (the "Credit Agreement"), which
will be adopted by the Corporation following the merger of DAH Ohio with and
into the Corporation, and in that certain Securities Purchase Agreement dated
November 2, 1994 among DAH Ohio, Electra Investment Trust P.L.C., a
corporation organized under the laws of the United Kingdom ("EIT"), and
Electra Associates, Inc., a Delaware corporation ("Electra Associates" and
collectively, with EIT "Electra"), and certain affiliates of DAH Ohio, as
such agreement may be amended from time to time (the "Purchase Agreement"),
which will be adopted by the Corporation following the merger of DAH Ohio
with and into the Corporation, the holders of Series A Preferred Shares,
Series B Preferred Shares, Series C Preferred Shares, Series D Preferred
Shares and Series E Preferred Shares shall be entitled to receive, pari
passu, when, as and if declared by the Board of Directors of the Corporation,
cash dividends out of funds legally available for such purpose. Cash
dividends at the annual rate of $.10 per Series A Preferred Shares, $.1263
per Series B Preferred Share, $.15 per Series C Preferred Share, $.325 per
Series D. Preferred Share and $.40 per Series E Preferred Share, whether or
not they are declared, shall cumulate from July 1, 1993 for the Series A
Preferred Shares and Series B Preferred Shares, from July 1, 1994 for the
Series C Preferred Shares, from February 15, 1996 for the Series D Preferred
Shares and from September 18, 1996 for the Series E Preferred Shares, and,
except to the extent prohibited by law and subject to the restrictions
contained in the Credit Agreement and the Purchase Agreement, such dividends
shall be payable quarterly, commencing July 1, 1993 for the Series A
Preferred Shares and the Series B Preferred Shares commencing July 1, 1994
for the Series C Preferred Shares, commencing February 15, 1996 for the
Series D Shares and commencing September 18, 1996 for the Series E Shares. In
the event that on or prior to May 5, 1997, the Corporation shall consummate
an underwritten public offering of Common Shares at a price to the public of
at least $4.50 per share (as adjusted for splits, stock dividends,
combinations and other events) with gross proceeds to the Corporation (before
deduction of underwriting discounts) of at least $10,000,000.00, all accrued
dividends on the Convertible Preferred Stock for the period ending on the
date of consummation of such offering shall be cancelled and eliminated. In
no event, so long as any Convertible Preferred Shares shall be outstanding,
shall any dividend whatsoever be declared or paid
- 2 -
upon, nor shall any distribution made upon any Common Shares, whether in cash
or other property (excluding, however, dividends or distributions payable
solely in Common Shares) unless a dividend is paid or a distribution is made
simultaneously to holders of Convertible Preferred Shares immediately prior
to the record date for such dividend or distribution on the Common Shares.
2. Upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary:
(a) The holders of the Series D Preferred Shares and the Series
E Preferred Shares, before any distribution or payment is made upon any
Series A Preferred Shares, Series B Preferred Shares and Series C Preferred
Shares and Common Shares shall be entitled to be paid, pari passu, an amount
equal to (1) first, $3.25 per Series D Preferred Share and $4.00 per Series E
Preferred Share and (11) then an amount equal to any dividends thereon
declared but unpaid, and the holders of Series D Preferred Shares and Series
E Preferred Shares shall not be entitled to any further payment, such amounts
being sometimes referred to as the "Senior Liquidation Payments." If upon
such liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the assets to be distributed among the holders of
Series D Preferred Shares and Series E Preferred Shares shall be insufficient
to permit payment to such holders of the Senior Liquidation Payments, then
the entire assets of the Corporation to be so distributed shall be
distributed among each such series of Convertible Preferred Shares and among
the holders thereof (r) first, until all payments referred to in clause (i)
above have been made, pari passu, to the holders of the Series D Preferred
Shares and Series E Preferred Shares is the proportions set forth in clause
(l) above, and (y) then, to the extent that assets remain, to the payments
referred to in clause (ll) above pro rata to all holders of such series of
Preferred Shares in relative proportion to the amounts of accrued and unpaid
dividends with respect to each such Convertible Preferred Share. Upon any
such liquidation, dissolution or winding up of the Corporation, after the
holders of Series D Preferred Shares and Series E Preferred Shares shall have
been paid in full the amounts to which they shall be entitled, the remaining
net assets of the Corporation may be distributed to the holders of the Series
A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares
in the manner set forth in subparagraph 2(b).
(b) The holders of the Series A Preferred Shares, Series B
Preferred Shares and Series C Preferred Shares, before any distribution or
payment is made upon any Common Shares, shall be entitled to be paid, pari
passu, an amount equal to (i) first, $1.00 per Series A Preferred Share,
$1.263 per Series B Preferred Share and $1.50 per Series C Preferred Share,
and (11) then an amount equal to any dividends thereon declared but unpaid,
and the holders of Series A Preferred Shares. Series B Preferred Shares and
Series C Preferred Shares shall not be entitled to any further payment, such
amounts being sometimes referred to as the "Senior Subordinated Liquidation
Payments." If upon such liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the assets to be distributed
among the holders of
- 3 -
Series A Preferred Shares, Series B Preferred Shares and Series C Preferred
Shares after the Senior Liquidation Payments have been distributed shall be
insufficient to permit payments to such holders of the Senior Subordinated
Liquidation Payments, then the entire assets of the Corporation to be so
distributed shall be distributed ratably among each such series of
Convertible Preferred Shares and among the holders thereof (x) first, until
all payments referred to in clause (i) above have been made, pari passu, to
the holders of the Series A Preferred Shares, Series B Preferred Shares and
Series C Preferred Shares, in the proportion set forth in clause (i) above,
and (y) then, to the extent that assets remain, to the payments referred to
in clause (ii) above, pro rata to all holders of such series of Convertible
Preferred Shares in relative proportion to the amounts of accrued and unpaid
dividends with respect to each such Convertible Preferred Share.
(c) Upon any such liquidation, dissolution or winding up of the
Corporation, after the holders of Series D Preferred Shares and Series E
Preferred Shares, and the holders of Series A Preferred Shares, Series B
Preferred Shares and Series C Preferred Shares shall have been paid in full
the amounts to which they shall be entitled, the remaining net assets of the
Corporation may be distributed to the holders of Common Shares.
(d) Written notice of such liquidation, dissolution or winding up,
stating a payment date, the amount of the Senior Liquidation Payments and
Senior Subordinated Liquidation Payments as the case may be, and the place
where said Senior Liquidation Payments and Senior Subordinated Liquidation
Payments, as the case may be, shall be payable, shall be given by mail,
postage prepaid, not less than 30 days prior to the payment date stated
therein, to the holders of record of Series D Preferred Shares and Series E
Preferred Shares and to the holders of record of Series A Preferred Shares,
Series B Preferred Shares and Series C Preferred Shares, as the case may be,
such notice to be addressed to each such holder at his post office address as
shown by the records of the Corporation.
(e) For purposes of this paragraph 2 of Article FIFTH only, the
sale or transfer by the Corporation of all or substantially all its assets
shall be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of the provisions of this paragraph 2. Such a
sale or transfer by the Corporation shall not be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of any other
Article of this Certificate of Incorporation.
3A. Subject to the terms and conditions of this paragraph 3, each holder
of Series A Preferred Shares, Series B Preferred Shares, Series C Preferred
Shares, Series D Preferred Shares or Series E Preferred Shares shall have the
right, at its option at any time, to convert any such Series A Preferred
Shares, Series B Preferred Shares, Series C Preferred Shares, Series D
Preferred Shares or Series E Preferred Shares (except that upon any
liquidation of the Corporation the right of conversion shall terminate at the
close of business on the last full business day next preceding the date fixed
for payment
-4-
of the amount distributable on the Series D Preferred Shares, the Series E
Preferred Shares, and the Series A Preferred Shares, the Series B Preferred
Shares and Series C Preferred Shares) into such number of fully paid and
nonassessable whole Common Shares as is obtained by, (i) in the case of
conversion of Series A Preferred Shares, multiplying the number of Series A
Preferred Shares so to be converted by $1.00 and dividing the result by the
conversion price of $1.00 per share or by the applicable conversion price as
last adjusted and in effect at the date any share or shares of such series of
Series A Preferred Shares are surrendered for conversion (such price, or such
price as last adjusted, being referred to herein as the "Series A Conversion
Price"), (ii) in the case of conversion of Series B Preferred Shares,
multiplying the number of Series B Preferred Shares so to be converted by
$1.263 and dividing the result by the conversion price of $1,263 per share or
by the applicable conversion price as last adjusted and in effect at the date
any share or shares of such series of Series B Preferred Shares are
surrendered for conversion (such price, or such price as last adjusted, being
referred to herein as the "Series B Conversion Price"), (iii) in the case of
conversion of Series C Preferred Shares, multiplying the number of Series C
Preferred Shares so to be converted by $1.50 and dividing the result by the
conversion price of $1.50 per share or by the applicable conversion price as
last adjusted and in effect at the date any share or shares of such series of
Series C Preferred Shares are surrendered for conversion (such price, or such
price as last adjusted, being referred to herein as the "Series C Conversion
Price"), (iv) in the case of conversion of Series D Preferred Shares,
multiplying the number of Series D Preferred Shares so to be converted by
$3.25 and dividing the result by the conversion price of $3.25 per share or
by the applicable conversion price as last adjusted and in effect at the date
any share or shares of such series of Series D Preferred Shares are
surrendered for conversion (such price, or such price as last adjusted, being
referred to herein as the "Series D Conversion Price"), and, (v) in the case
of conversion of Series E, Preferred Shares, multiplying the number of Series
E Preferred Shares so to be converted by $4.00 and dividing the result by the
conversion price of $4.00 per share or by the applicable conversion price as
last adjusted and in effect at the date any share or shares of such series of
Series E Preferred Shares are surrendered for conversion (such price, or such
price as last adjusted, being referred to herein as the "Series E Conversion
Price") and together with the Series A Conversion Price, the Series B
Conversion Price, the Series C Conversion Price and the Series D Conversion
Price, as the "Conversion Prices"). Such rights of conversion shall be
exercised by the holder thereof by giving written notice that the holder
elects to convert a stated number of Convertible Preferred Shares into Common
Shares and by surrender of a certificate or certificates for the shares so to
be converted to the Corporation at its principal office (or such other office
or agency of the Corporation as the Corporation may designate by notice in
writing to the holder or holders of Convertible Preferred Shares at any time
during its usual business hours on the date set forth in such notice,
together with a statement of the name or names (with address) in which the
certificate or certificates for shares of Common Shares shall be issued.
3B. Promptly after the receipt of the written notice referred to in
subparagraph 3A and surrender of the certificate or certificates for the
Convertible
-5-
Preferred Shares to be converted, the Corporation shall issue and deliver, or
cause to be issued and delivered, to the holder, registered in such name or
names as such holder may direct a certificate or certificates for the number
of whole Common Shares issuable upon the conversion of such Convertible
Preferred Shares. To the extent permitted by law, such conversion shall be
deemed to have been effected and any one or more of the Conversion Prices, as
required, shall be determined as of the close of business on which such
written notice shall have been received by the Corporation and the
certificate or certificates for such share or shares shall have been
surrendered as aforesaid, and at such time the rights of the holder of such
Convertible Preferred Shares shall cease, and the person or persons in whose
name or names any certificate or certificates for Common Shares shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby.
3C. No fractional shares shall be issued upon conversion of the
Convertible Preferred Shares into Common Shares and no payment or adjustment
shall be made upon any conversion on account of any cash dividends on the
Common Shares issued upon such conversion. Except to the extent prohibited by
law and subject to the restrictions contained in the Credit Agreement and the
Purchase Agreement, at the time of each conversion, the Corporation shall pay
in cash an amount equal to all dividends accrued and unpaid on the shares
surrendered for conversion to the date upon which such conversion is deemed
to take place as provided in subparagraph 3B. In case the number of
Convertible Preferred Shares represented by the certificate or certificates
surrendered pursuant to subparagraph 3A exceeds the number of shares
converted, the Corporation shall, upon such conversion, execute and deliver
to the holder thereof, at the expense of the Corporation, a new certificate
or certificates for the number of Convertible Preferred Shares represented by
the certificate or certificates surrendered which are not to be converted. If
any fractional interest in a Common Share would, except for the provisions of
the first sentence of this subparagraph 3C, be deliverable upon any such
conversion, the Corporation, in lieu of delivering the fractional share
thereof, shall pay to the holder surrendering the Convertible Preferred
Shares for conversion an amount in cash equal to the current market price of
such fractional interest as determined in good faith by the Board of
Directors of the Corporation.
3D. Except (x) as provided in subparagraph 3F hereof or (y) in the
event of a dividend or distribution payable in equity securities of the
Corporation, if and whether the Corporation shall issue or sell, or is, in
accordance with subparagraphs 3D(1) through 3D(5), deemed to have issued or
sold, any of its Common Shares or securities convertible into or exercisable
for Common Shares, for a consideration per share (on a fully-diluted Common
Share basis) less than any one or more of the Conversion Prices in effect
immediately prior to the time of such issue or sale, then, forthwith upon
such issue or sale, each such Conversion Price which exceeds such per share
consideration shall be reduced to the price (calculated to the nearest cent)
equal to the product determined by multiplying the Conversion Price in effect
immediately prior thereto by a fraction, of which the numerator shall be
(i)(A) the total number of Common Shares outstanding immediately prior to the
time of such issue or sale, plus (B) the number of
-6-
additional Common Shares which the aggregate offering price of the total
number of Common Shares so issued or sold would purchase at the Conversion
Price in effect immediately prior to such issuance or sale, and (ii) of which
the denominator shall be (A) the total number of Common Shares outstanding
immediately prior to such issuance or sale, plus (B) the number of Common
Shares so issued or sold. For purposes of the foregoing sentence, the total
number of Common Shares outstanding shall be deemed to include the number of
Common Shares which would be outstanding if all outstanding securities
exercisable for or convertible into Common Shares (except options (other than
warrants (to purchase Common Shares) were so exercised or converted, and all
securities exercisable for or convertible into Common Shares (except options
(other than warrants (to purchase Common Shares) were so exercised or
converted, as applicable, and then converted or exercised, as applicable.
For purposes of this subparagraph 3D, the following subparagraphs 3D(1)
to 3D(5), shall also be applicable:
3D(1). In case at any time the Corporation shall in any manner
grant (whether directly or by assumption in a merger or otherwise) any rights
to subscribe for or to purchase, or any options for the purchase of, Common
Shares or any stock or securities convertible into or exchangeable for Common
Shares (such rights or options being herein called "Options" and such
convertible or exchangeable stock or securities being herein called
"Convertible Securities") whether or not such Options or the right to convert
or exchange any such Convertible Securities are immediately exercisable, and
the price per share for which Common Shares are issuable upon the exercise of
such Options or upon conversion or exchange of such Convertible Securities
(determined by dividing (i) the total amount, if any, received or receivable
by the Corporation as consideration for the granting of such Options, plus
the minimum aggregate amount of additional consideration payable to the
Corporation upon the exercise of all such Options, plus, in the case of such
Options which relate to Convertible Securities, the minimum aggregate amount
of additional consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange thereof, by (ii)
the total maximum number of Common Shares issuable upon the exercise of such
Options or upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options) shall be less than any one or
more of the conversion Prices in effect immediately prior to the time of the
granting of such Options, then the total maximum number of shares of Common
Shares issuable upon the exercise of such Options shall be deemed to have
been issued for such price per share as of the date of granting of such
Options and thereafter shall be deemed to be outstanding. Except as otherwise
provided in subparagraph 3D(3), no adjustment of any of the Conversion Prices
shall be made upon the actual issue of such Common Shares or of such
Convertible Securities upon exercise of such Options or upon the actual issue
of such Common Shares upon conversion or exchange of such Convertible
Securities.
3D(2). In case the Corporation shall in any manner issue (whether
directly or by assumption in a merger or otherwise) or sell any Convertible
Securities,
-7-
whether or not the rights to exchange or convert thereunder are immediately
exercisable, and the price per share for which Common Shares are issuable
upon such conversion or exchange (determined by dividing (i) the total amount
received or receivable by the Corporation as consideration for the issue or
sale of such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Corporation upon the
conversion or exchange thereof, by (ii) the total maximum number of Common
Shares issuable upon the conversion or exchange of all such Convertible
Securities) shall be less than any one or more of the Conversion Prices in
effect immediately prior to the time of such issue or sale, then the total
maximum number of Common Shares issuable upon conversion or exchange of all
such Convertible Securities shall be deemed to have been issued for such
price per share as of the date of the issue or sale of such Convertible
Securities and thereafter shall be deemed to be outstanding, provided that
(a) except as otherwise provided in subparagraph 3D(3) below, no adjustment
of any of the Conversion Prices shall be made upon the actual issue of such
Common Shares upon conversion or exchange of such Convertible Securities, and
(b) if any such issue or sale of such Convertible Securities is made upon
exercise of any Option to purchase any such Convertible Securities for which
adjustments of any one or more of the Conversion Prices have been or are to
be made pursuant to other provisions of this subparagraph 3D, no further
adjustment of any such Conversion Price shall be made by reason of such issue
or sale.
3D(3). Upon the happening of any of the following events, namely,
if the purchase price provided for in any Option referred to in subparagraph
3D(1), the additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities referred to in subparagraph 3D(1) or
3D(2), or the rate at which any Convertible Securities referred to in
subparagraph 3D(1) or 3D(2) are convertible into or exchangeable for Common
Shares shall change at any time (other than under or by reason of provisions
designed to protect against dilution), each of the Conversion Prices in
effect at the time of such event shall forthwith be readjusted to such
Conversion Price which would have been in effect at such time had such
Options or Convertible Securities still outstanding provided for such changed
purchase price, additional consideration or conversion rate, as the case may
be, at the time initially granted, issued or sold; and on the expiration of
any such Option or the termination of any such right to convert or exchange
such Conversion Securities, each of the Conversion Prices then in effect
hereunder shall, as required, forthwith be increased to the respective such
Conversion Price which would have been in effect at the time of such
expiration or termination had such Option or Convertible Securities, to the
extent outstanding immediately prior to such expiration or termination, never
been issued, and the Common Shares issuable thereunder shall no longer be
deemed to be outstanding. If the purchase price provided for in any such Option
referred to in subparagraph 3D(1) or the rate at which any Convertible
Securities referred to in subparagraph 3D(1) or 3D(2) are convertible into or
exchangeable for Common Shares shall be reduced at any time under or by
reason of provisions with respect thereto designed to protect against
dilution, then, in case of the delivery of Common Shares upon the exercise of
any such Option, or upon conversion or exchange of any such Convertible
Securities, each of the
-8-
Conversion Prices then in effect hereunder shall forthwith be adjusted to
such respective amount as would have been obtained had such Option or
Convertible Securities never been issued as to such Common Shares and had
adjustments been made upon the issuance of the Common Shares delivered as
aforesaid, but only if as a result of such adjustment any such Conversion
Price then in effect hereunder is hereby reduced.
3D(4). In case any Common Shares, Options or Convertible Securities
shall be issued or sold for cash, the consideration received therefor shall
be deemed to be the amount received by the Corporation therefor, without
deduction therefrom of any expenses incurred or any underwriting commissions
paid or allowed by the Corporation in connection therewith. In case any
Common Shares, Options or Convertible Securities shall be issued or sold for
a consideration other than cash, the amount of the consideration other than
cash received by the Corporation shall be deemed to be the fair market value
of such consideration as determined in good faith by the Board of Directors
of the Corporation, without deduction of any expenses incurred or any
underwriting commissions or concessions paid or allowed by the Corporation in
connection therewith. The amount of consideration deemed to be received by
the Corporation pursuant to the foregoing provisions of this subparagraph
3D(4) upon any issuance and/or sale of Common Shares, Options or Convertible
Securities pursuant to an established compensation plan of the Corporation,
to directors, officers or employees of the Corporation in connection with
their employment shall be increased by the amount of any tax benefit realized
by the Corporation as a result of such issuance and/or sale, the amount of
such tax benefit being the amount by which the federal and/or state income or
other tax liability of the Corporation shall be reduced by reason of any
deduction or credit in respect of such issuance and/or sale. In case any
Options shall be issued in connection with the issue and sale of other
securities of the Corporation, together comprising one integral transaction
in which no specific consideration is allocated to such Options by the
parties thereto, the consideration deemed to have been received by the
Corporation for such Options shall be an amount (i) agreed to by the
Corporation, the holders of a majority of the Convertible Preferred Shares
then outstanding and the holders of a majority of the Common Shares then
outstanding or, (ii) in the absence of such agreement, by an independent firm
of investment bankers, appraisers or accountants selected by the Corporation
(and approved by the holders of a majority of the Common Shares then
outstanding and the holders of a majority of the Convertible Preferred Shares
then outstanding) or, (iii) in the absence of agreement as to the identity of
such independent firm, by three independent firms of investment bankers,
appraisers or accountants, (A) one of which shall be selected by the
Corporation (and approved by the holders of a majority of the Common Shares
then outstanding), (B) one by the holders of a majority of the Convertible
Preferred Shares then outstanding and (C) the third selected by the
investment bankers, appraisers or accountants selected by the Corporation and
such holders of a majority of the outstanding Convertible Preferred Shares
pursuant to parts (A) and (B) of this clause (iii), or (iv) in such other
manner as may be agreed between the Corporation and the holders of a majority
of the Convertible Preferred Shares outstanding (and approved by the holders
of a majority of the Common Shares then outstanding). The Corporation
-9-
shall bear the costs associated with compensating the investment bankers,
appraisers and accountants described in the preceding sentence if the
determination of the value of the consideration deemed to have been received
by the Corporation for the Options is made pursuant to clause (ii) of the
preceding sentence, but if such determination is made pursuant to clause
(iii) of the preceding sentence, (x) the Corporation shall bear the costs
associated with compensating the investment bankers, appraisers or
accountants appointed pursuant to part (A) of such clause (iii), (y) the
holders of the then outstanding Convertible Preferred Shares (pro rata in
proportion to the number of Convertible Preferred Shares held by each such
holder) shall bear the costs associated with compensating the investment
bankers, appraisers or accountants appointed pursuant to part (B) of such
clause (iii), and (z) the Corporation shall bear one-half of the costs
associated with compensating the investment bankers, appraisers and
accountants appointed pursuant to part (C) of such clause (iii), and the
holders of the then outstanding Convertible Preferred Shares (pro rata in
proportion to the number of Preferred Shares held by each such holder) shall
bear the remaining one-half of such costs. For purposes of the foregoing
provisions of this subparagraph 3D(4), (i) holders of Common Shares
outstanding shall be deemed to include the holders of securities (except
Convertible Preferred Shares, securities exchangeable for or exercisable
into Convertible Preferred Shares, and options (other than warrants) to
purchase Common Shares) Convertible into or exercisable for Common Shares
("Common Convertible Securities"), (ii) the number of Common Shares deemed to
be held by the holders referred to in the immediately preceding clause (i) shall
be deemed to be equal to the number of Common Shares into which such Common
Convertible Securities could then be converted or for which such Common
Convertible Securities could then be exercised, (iii) the holders of
Convertible Preferred Shares outstanding shall be deemed to include the
holders of securities Convertible into or exercisable for Convertible
Preferred Shares ("Preferred Convertible Securities"), and (iv) the number of
Convertible Preferred Shares deemed to be held by the holders referred to in
the immediately preceding clause (iii) shall be deemed to be equal to the
number of Convertible Preferred Shares into which such Convertible Preferred
Convertible Securities could then be converted or for which such Preferred
Convertible Securities could then be exercised.
3D(5). The number of Common Shares outstanding at any given time
shall not include shares owned or held by or for the account of the
Corporation, and the disposition of any such shares shall be considered an
issue or sale of Common Shares for the purposes of this subparagraph 3D.
3E. In case the Corporation shall at any time subdivide its outstanding
Common Shares into a greater number of shares or make a dividend or
distribution payable in Common Shares, the Conversion Prices in effect
immediately prior to such subdivision shall be proportionately reduced, and
conversely, in case the outstanding Common Shares of the Corporation shall be
combined into a smaller number of shares, the Conversion Prices in effect
immediately prior to such combination shall be proportionately increased.
-10-
3F. Anything herein to the contrary notwithstanding, the Corporation
shall not be required to make any adjustment of any of the Conversion Prices
in the case of the issuance of:
(i) up to an aggregate of 867,000 Common Shares, or options to
purchase the same, pursuant to stock options or purchase plans adopted
by the Corporation;
(ii) up to an aggregate of 205,000 Common Shares, or options to
purchase the same, for key employees of businesses acquired by the
Corporation;
(iii) the Common Shares or Preferred Shares upon exercise of any
presently outstanding warrant (or any Common Shares upon conversion of
Preferred Shares issued upon exercise of any presently outstanding
warrant), not including the warrants referred to in subparagraph (iv) of
this Section 3F, Common Shares upon conversion of presently outstanding
Preferred Shares;
(iv) warrants for Common Shares, and the Common Shares issued
upon exercise of such warrants, to ING, Electra, Nassau Capital
Partners L.P. and NAS Partners I, L.L.C.;
(v) up to an aggregate of 41,000 Common Shares, or options to
purchase the same, to directors of the Corporation; or
(vi) up to an aggregate of 820,000 Common Shares, or options to
purchase the same, in connection with any merger or acquisition to which
the Corporation or any subsidiary is a party.
3G. If any capital reorganization or reclassification of the capital
stock of the Corporation shall be effected in such a way that holders of
Common Shares shall be entitled to receive shares, securities or assets with
respect to or in exchange for Common Shares, then, as a condition of such
reorganization or reclassification, lawful and adequate provisions (in form
satisfactory to the holders of at least 66-2/3% of the outstanding
Convertible Preferred Shares voting together as a class) shall be made
whereby each holder of Convertible Preferred Shares shall thereafter have the
right to receive, upon the basis and upon the terms and conditions specified
herein and in lieu of the Common Shares of the Corporation immediately
theretofore receivable upon the conversion of Convertible Preferred Shares,
such shares, securities or assets as may be issued or payable with respect to
or in exchange for a number of outstanding Common Shares equal to the number
of such shares immediately theretofore so receivable upon such conversion,
and in any such case appropriate provision shall be made with respect to the
rights and interests of such holder to the end that the provisions hereof
(including without limitation provisions for adjustments of the Conversion
Prices) shall thereafter be applicable, as nearly as may be in relation to
any shares, securities or assets thereafter deliverable upon the exercise of
such conversion rights (including, as required, an
-11-
immediate adjustment, by reason of such reorganization or reclassification,
of any one or more, of the Conversion Prices to the value for the Common
Shares reflected by the terms of such reorganization or reclassification if
the value so reflected is less than any Conversion Price in effect
immediately prior to such reorganization or reclassification). In the event
of a merger or consolidation of the Corporation as a result of which a
greater or lesser number of Common Shares of the surviving corporation are
issuable to holders of Common Shares of the Corporation outstanding
immediately prior to such merger or consolidation, each of the Conversion
Prices in effect immediately prior to such merger or consolidation shall, as
required, be adjusted in the same manner as though there were subdivision or
combination of the outstanding Common Shares of the Corporation. The
Corporation will not effect any such consolidation, merger or sale, unless
prior to the consummation thereof the successor corporation (other than the
Corporation) resulting from such consolidation or merger or if the
corporation purchasing such assets shall assume by written instrument (in
form reasonably satisfactory to the holders of at least 66-2/3% of the
Convertible Preferred Shares at the time outstanding voting together as a
class) executed and mailed or delivered to each holder of Convertible
Preferred Shares at the last address of such holder appearing on the books of
the Corporation, the obligation to deliver to such holder such shares,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to receive.
3H. Upon any adjustment of any one or more of the Conversion Prices,
then and in each such case the Corporation shall give written notice thereof,
by first class mail, postage prepaid, addressed to each holder of Convertible
Preferred Shares at the address of such holder as shown on the books of the
Corporation, which notice shall state the Conversion Price resulting from
such adjustment, setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based.
3I. In case at any time:
(1) the Corporation shall declare any dividend upon its Common
Shares payable in cash or shares or make any other distribution to the
holder of its Common Shares;
(2) the Corporation shall offer for subscription PRO RATA to the
holders of its Common Shares any additional shares of any class or other
rights;
(3) there shall be any capital reorganization or reclassification
or merger of the Corporation with, or a sale of all or substantially all
of its assets to, another corporation; or
(4) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
-12-
then, in any one or more of said cases, the Corporation shall give, by first
class mail, postage prepaid, addressed to each holder of any Convertible
Preferred Shares at the address of such holder as shown on the books of the
Corporation, at least 20 days' prior written notice of the date (a) on which
the books of the Corporation shall close or a record shall be taken for the
purpose of determining the holders entitled to receive such dividend,
distribution or subscription rights or (b) for determining rights to vote in
respect of any reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up shall take place. Such notice in
accordance with the foregoing clause (a) shall also specify, in the case of
any such dividend, distribution or subscription rights, the date on which the
holders of Common Shares shall be entitled thereto, and such notice in
accordance with the foregoing clause (b) shall also specify the date on which
the holders of Common Shares shall be entitled to exchange their Common
Shares for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be.
3J. The Corporation will at all times reserve and keep available out
of its authorized Common Shares or its treasury shares, solely for the
purpose of issuance upon conversion of Convertible Preferred Shares as herein
provided, such number of Common Shares as shall then be issuable upon the
conversion of all outstanding Convertible Preferred Shares (including shares
issuable in respect of any cumulated but unpaid dividends on the convertible
Preferred Shares). The Corporation covenants that all Common Shares which
shall be so issued shall be duly and validly issued and fully paid and
nonassessable and free from all liens and charges with respect to the issue
thereof. The Corporation will not take any action which results in any
adjustment of any of the Conversion Prices if the total number of Common
Shares issued and issuable after such action upon conversion of the
Convertible Preferred Shares would exceed the total number of Common Shares
then authorized by this Certificate of Incorporation.
3K. The issuance of certificates for shares of Common Shares upon
conversion of the Convertible Preferred Shares shall be made without charge
to the holders thereof for any issuance tax in respect thereof, 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 the holder of the Convertible
Preferred Shares which is being converted.
3L. The Corporation will at no time close its transfer books against
the transfer of any Convertible Preferred Shares or any shares of Common
Shares issued or issuable upon the conversion of any shares of Convertible
Preferred Shares in any manner which interfere with the timely conversion of
such Convertible Preferred Shares.
3M. The adjustments to the Conversion Prices which are referred to
above in this paragraph 3 shall be effective as to all Convertible Preferred
Shares, whether or not such Convertible Preferred Shares are issued and
outstanding at the time of occurrence of the events which trigger the
adjustment in the Conversion Prices.
- 13 -
3. Except as otherwise provided by law and this Certificate of
Incorporation, the holders of Common Shares and Convertible Preferred Shares
shall vote together as a class (together with holders of Convertible
Preferred Shares or any other series entitled to vote) on all matters to be
voted on by the shareholders of the Corporation on the basis that each holder
of Convertible Preferred Shares shall be entitled to vote for each share of
Common Shares which would be issuable to such holder upon the conversion of
all the Convertible Preferred Shares so held on the record date for the
determination of shareholders entitled to vote.
4. Subject to the provisions contained in that certain Fourth Amended
and Restated Shareholders Agreement dated as of September 18, 1996 among DAH
Ohio and the other parties named therein, as it may be amended from time to
time, which will be adopted by the Corporation, at any time when shares of
Convertible Preferred Shares are outstanding, except where the vote of the
holders of a greater number of shares of the Corporation is required by law
or by the Certificate of Incorporation and in addition to any other vote
required by law.
5A. The Corporation will not create or authorize the creation of any
additional class of shares unless the same ranks junior to the Series D
Preferred Shares and the Series E Preferred Shares as to the distribution of
assets on the liquidation, dissolution or winding up of the Corporation, or
increase the authorized amount of the Series D Preferred Shares or the Series
E Preferred Shares or increase the authorized amount of any additional class
of shares of stock unless the same ranks junior to the Series D Preferred
Shares and the Series E Preferred Shares as to the distribution of assets on
the liquidation, dissolution or winding up of the Corporation, or create or
authorize any obligation or security convertible into Series D Preferred
Shares or Series E Preferred Shares or into shares of any other class of
shares unless the same ranks junior to the Series D Preferred Shares and the
Series E Preferred Shares as to the distribution of assets on the
liquidation, dissolution or winding up of the Corporation, whether any such
creation of authorization or increase shall be by means of amendment of this
Certificate of Incorporation or by merger, consolidation or otherwise,
without the prior consent of the holders of a majority of the outstanding
Series D Preferred Shares, voting as a class, and the holders of a majority
of the outstanding Series E Preferred Shares, voting as a class, given in
person or by proxy at an annual or special meeting called for that purpose,
at which meeting the holders of the shares of Series D Preferred Shares,
Series E Preferred Shares shall vote together as a separate class.
5B. The Corporation will not create or authorize the creation of any
additional class of shares unless the same ranks junior to the Series A
Preferred Shares, Series B Preferred Shares and Series C Preferred Shares as
to the distribution of assets on the liquidation, dissolution or winding up
of the Corporation, or increase the authorized amount of the Series A
Preferred Shares, Series B Preferred Shares or Series C Preferred Shares or
increase the authorized amount of any additional class of shares of stock
unless the same ranks junior to the Series A Preferred Shares, Series B
Preferred
- 14 -
Shares and Series C Preferred Shares as to the distribution of assets of the
liquidation, dissolution or winding up of the Corporation, or create or
authorize any obligation or security convertible into Series A Preferred
Shares, Series B Preferred Shares, Series C Preferred Shares or into any
other class of shares unless the same ranks junior to the Series A Preferred
Shares, Series B Preferred Shares and Series C Preferred Shares as to the
distribution of assets on the liquidation, dissolution or winding up of the
Corporation, whether any such creation or authorization or increase shall be
by means of amendment of the Certificate of Incorporation or by merger,
consolidation or otherwise, without the prior consent of the holders of a
majority of the outstanding Series A Preferred Shares, Series B Preferred
Shares and Series C Preferred Shares, voting as a class, given in person or
proxy, at an annual or special meeting called for that purpose, at which
meeting the holders of the shares of Series A Preferred Shares, Series B
Preferred Shares and Series C Preferred Shares shall vote together as a
separate class.
5C. The Corporation will not merge or consolidate with or into any
other corporation or sell (except in the ordinary course of business) assets
representing more than 10% of the Corporation's total assets, excluding
inventory, without the prior consent of the holders of a majority of the
outstanding Convertible Preferred Shares voting as a class, given in person
or by proxy, at a special meeting called for that purpose, at which meeting
the holders of Convertible Preferred Shares shall vote together as a separate
class; provided, however, that notwithstanding any provision of this
paragraph 5C, to the contrary, the provisions of this paragraph 5C shall not
apply with respect to the exercise (i) by ING, of its rights under any of the
Security Documents (as defined in the Credit Agreement, as it may be amended
from time to time), or (ii) by Electra of its rights under the Purchase
Agreement or any of the Related Agreements (as defined in the Purchase
Agreement).
5D. The Corporation will not amend, alter or repeal its Certificate of
Incorporation or By-Laws in any manner so as to adversely affect the
respective relative rights and preferences of the Convertible Preferred
Shares or the holders thereof, without the prior consent of the holders of a
majority of the outstanding shares of the Series of Convertible Preferred
Shares whose rights or preferences would be adversely affected thereby, given
in person or by proxy, at an annual or special meeting called for that
purpose, at which meeting the holders of the shares of the Series of
Convertible Preferred Shares whose rights or preferences would be adversely
affected thereby voting together as a separate class.
5. All cross-references in each subdivision of this Article FIFTH
shall refer to other subdivisions of this Article FIFTH.
- 15 -
SIXTH: The following is a statement of the designations, powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, in respect of the Common Shares:
1. The holders of Common Shares shall be entitled to receive such
dividends as from time to time may be declared by the Board of Directors of
the Corporation subject to the provisions of subdivision 1 of Article FIFTH
with respect to the rights of holders of the Convertible Preferred Shares.
2. In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, after payment shall have been
made to holders of the Convertible Preferred Shares of the full amounts to
which they shall respectively be entitled as stated and expressed herein or
as may be stated and expressed pursuant thereto, the holders of Common Shares
shall be entitled to the exclusion of the holders of the Convertible
Preferred Shares to share ratably according to the number of Common Shares
held by them in all remaining assets of the Corporation available for
distribution to its stockholders.
3. All of the Common Shares shall be identical with each other in every
respect. Each Common Share shall entitled the holder thereof to one vote for
each share upon all matters upon which shareholders have the right to vote.
The Corporation may issue from time to time warrants to acquire Common Shares
which permit the holders thereof to vote together with the holders of Common
Shares a number of votes equal to the number of shares of Common Shares which
may be acquired upon exercise of such warrants.
SEVENTH: The name and mailing address of the incorporator is as follows:
NAME MAILING ADDRESS
Linda Criblez 2121 Avenue of the Stars
18th Floor
Los Angeles, CA 90067
EIGHTH:
1. The directors of the Corporation shall have no personal liability
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except (i) for any breach of a director's duty
of loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General Corporation Law of
Delaware, or (iv) for any transaction from which a director derived any
improper personal benefit. If the General Corporation Law of Delaware is so
amended after the filing of this Certificate of Incorporation to further
eliminate or limit the personal liability of directors, then the personal
liability of the directors shall be
- 16 -
eliminated or limited to the fullest extent permitted by the General
Corporation Law of Delaware as so amended.
2. The Corporation shall indemnify, to accordance with and to the
fullest extent now or hereafter permitted by law, any 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, including without limitation, an action by or in the right
of the Corporation, by reason of his acting as a director or executive
officer (within the meaning of Rule 3b-7 promulgated under the Securities
Exchange Act of 1934, as amended) of the Corporation (and the Corporation, in
the discretion of the Board of Directors, may so indemnify a person by reason
of the fact that he is or was an other officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation in any
other capacity for or on behalf of the Corporation) against any liability or
expense actually and reasonably incurred by each person in respect thereof;
provided, however, the Corporation shall be required to indemnify an officer
or director in connection with an action, suit or proceeding if such action,
suit or proceeding was authorized by the Board of Directors of the
Corporation. Such indemnification is not exclusive of any other right to
indemnification provided by law or otherwise. The right to indemnification
conferred by this Section 2 shall be deemed to be a contract between the
Corporation and each person referred to herein.
3. No amendment to or repeal of those provisions shall apply to or have
any effect on the liability or alleged liability of any person for or with
respect to any acts or omissions of such person occurring prior to such
amendments.
NINTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make adopt, alter,
amend or repeal the By-laws of the Corporation. Subject to any provisions in
the By-laws providing indemnification to officers and directors of the
Corporation, the By-laws of the Corporation may be altered or amended or new
By-laws adopted by the affirmative vote of the holders of at least 66 1/3% of
the outstanding shares of capital stock of the Corporation (including any
warrants with voting rights) entitled to vote (voting together as a single
class).
TENTH: [Deleted by the Agreement and Plan of Merger dated as of June 17,
1998 between the Corporation and DeCrane Acquisition Co.]
- 17 -
ELEVENTH: The affirmative vote of at least 66-2/3% of the outstanding
shares of capital stock of the Corporation entitled to vote (including any
warrants with voting rights) shall be required to amend or repeal any
provision of Articles EIGHTH, NINTH, TENTH and ELEVENTH hereof or to adopt any
provision inconsistent therewith.
TWELFTH: The Corporation reserves the rights to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
-18-
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a Corporation pursuant to the General Corporation Law of
the State of Delaware, do make this certificate, hereby declaring and
certifying that this is my act and deed and the facts herein stated
are true, and accordingly have hereunto set my hand as of January 8, 1997.
/s/ Linda Criblez
-------------------------------
Linda Criblez
-19-