EXHIBIT 3.2
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
THE A CONSULTING TEAM, INC.
(Pursuant to Section 805 of the Business Corporation Law)
1. The name of the corporation is The A Consulting Team, Inc. (the
"Corporation"). The name under which the Corporation was originally
formed was Software Ben-Tov, Inc.
2. The certificate of incorporation of Software Ben-Tov, Inc. was filed
by the Department of State of the State of New York on February 16,
1983, amended on April 26, 1983, restated on August 4, 1997 and
further restated on June 18, 2002 (the "Restated Certificate of
Incorporation").
3. The Certificate of Incorporation is hereby amended by the addition of
the following provision stating the number, designation, relative
rights, preferences and limitations of the shares of Series A
Preferred Stock of the Corporation, as fixed by the Board of Directors
of the Corporation:
ARTICLE FOURTH
(c) Series A Preferred Stock.
(1) Number of Designated Shares of Series A Preferred Stock. Of the
total authorized number of 2,000,000 shares of Preferred Stock of the
Corporation, there shall be designated a series of 530,304 shares which shall
be issued in and constitute a single series to be known as "Series A Preferred
Stock" (hereinafter called the "Series A Preferred Stock"). The par value per
share of such Series A Preferred Stock shall be $0.01.
(2) Dividends. The holders of Series A Preferred Stock shall be
entitled to (i) receive dividends, out of any assets legally available
therefore, prior and in preference to any declaration or payment of any
dividend (payable other than in Common Stock or other securities or rights
convertible into or entitling the holder thereof to receive, directly or
indirectly, additional shares of Common Stock) on the Common Stock, at the rate
of $.0462 per annum per share of Series A Preferred Stock (subject to
appropriate adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting such shares), and (ii)
share in any dividends, if any, declared and paid upon or set aside for the
Common Stock, pro rata in accordance with the number of shares of Common Stock
into which such shares of Series A Preferred Stock are then convertible
pursuant to Section 5. The dividends set forth in (i) above shall be
cumulative.
(3) Rights on Liquidation, Dissolution or Winding-Up. In the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of Series A Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the Corporation available for
distribution to its shareholders by reason of their ownership thereof, (A)
before any payment shall be made to the holders of Common Stock or any other
class or series of stock ranking on liquidation junior to the Series A
Preferred Stock, and (B) after any payment shall be made to the holders of any
class or series of preferred stock, whether now existing or hereafter created
or designated, ranking by its terms senior in respect of liquidation,
dissolution or winding up to the Series A Preferred Stock ("Senior Stock"), an
amount equal to $0.66 per share (the "Series A Original Issuance Price")
(subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization affecting such shares),
plus any dividends unpaid on such shares (the "Series A Preference Amount"). If
upon any such liquidation, dissolution or winding up of the Corporation, and
after payment of any amounts payable to Senior Stock, the remaining assets of
the Corporation available for distribution to its stockholders shall be
insufficient to pay the holders of shares of Series A Preferred Stock the full
amount to which they each shall be entitled, the holders of shares of Series A
Preferred Stock shall share ratably in any distribution of the remaining assets
and funds of the Corporation in proportion to the respective amounts which
would otherwise be payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to such shares were paid
in full.
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After distribution to the holders of Senior Stock and to holders of
Series A Preferred Stock of the Series A Preference Amount, the remaining
assets of the Corporation available for distribution, if any, to the
shareholders of the Corporation shall be distributed exclusively to the holders
of shares of Common Stock. A consolidation or merger of the Corporation into or
with any other corporation or entity or the sale or transfer by the Corporation
of all or substantially all of its assets (including any liquidation,
dissolution or winding up associated therewith) shall not be deemed to be a
liquidation within the meaning of this Section.
(4) Voting. In addition to any other rights provided by law or in the
By-laws of the Corporation, each share of Series A Preferred Stock shall
entitle the holder thereof to such number of votes per share as shall equal the
number of shares of Common Stock (rounded down to the nearest whole number
based on the aggregate number of shares of Series A Preferred Stock held by
such shareholder) into which such share of Series A Preferred Stock is then
convertible as provided in Section 5 hereof, entitled to vote, in the same
manner and with the same effect as such holders of Common Stock, voting
together with the holders of Common Stock and any other class or series of
preferred stock, whether now existing or hereafter created or designated
(except and to the extent otherwise expressly provided in any such series or
class of preferred stock), as one class.
(5) Optional Conversion.
(a) The holder of any shares of Series A Preferred Stock shall have
the right, at such holder's option, at any time or from time to time to convert
any of such shares into such whole number of fully paid and nonassessable
shares of Common Stock as is equal to the quotient obtained by dividing (A) the
Series A Original Issuance Price multiplied by the number of shares of the
Series A Preferred Stock being converted by (B) the Series A Preferred
Conversion Price (as hereinafter defined), as last adjusted and then in effect,
for the shares of the Series A Preferred Stock being converted, by surrender of
the certificates representing the shares of Series A Preferred Stock so to be
converted in the manner provided in Section 5(b) hereof. The conversion price
per share at which shares of Common Stock shall be issuable upon conversion of
shares of Series A Preferred Stock (the "Series A Preferred Conversion Price")
shall initially be the Series A Original Issuance Price; provided, however,
that such Series A Preferred Conversion Price shall be subject to adjustment as
set forth in Section 5(d) hereof.
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(b) The holder of any shares of Series A Preferred Stock may exercise
the conversion right pursuant to Section 5(a) hereof as to one or more shares
thereof by delivering to the Corporation during regular business hours, at the
office of the Corporation or any transfer agent of the Corporation for the
Series A Preferred Stock as may be designated by the Corporation, the
certificate or certificates for the shares to be converted, duly endorsed or
assigned in blank or to the Corporation (if required by it), accompanied by
written notice stating that the holder elects to convert such shares and
stating the name or names (with address) in which the certificate or
certificates for the shares of Common Stock are to be issued. Conversion shall
be deemed to have been effected on the date when the aforesaid delivery is made
(the "Conversion Date"). As promptly as practicable thereafter, the Corporation
shall issue and deliver to or upon the written order of such holder, to the
place designated by such holder, a certificate to which such holder is entitled
and a check or cash in respect of any fractional interest in a share of Common
Stock as provided in Section 5(c) hereof. The person in whose name the
certificate or certificates for Common Stock are to be issued shall be deemed
to have become a Common Stock holder of record on the applicable Conversion
Date unless the transfer books of the Corporation are closed on that date, in
which event such person shall be deemed to have become a Common Stock holder of
record on the next succeeding date on which the transfer books are open, but
the Series A Preferred Conversion Price shall be that in effect on the
Conversion Date. Upon conversion of only a portion of the number of shares
covered by a certificate representing shares of Series A Preferred Stock
surrendered for conversion, the Corporation shall issue and deliver to or upon
the written order of the holder of the certificate so surrendered for
conversion, at the expense of the Corporation, a new certificate covering the
number of shares of the series of Series A Preferred Stock representing the
unconverted portion of the certificate so surrendered, which new certificate
shall entitle the holder thereof to dividends on the shares of Series A
Preferred Stock represented thereby to the same extent as if the portion of the
certificate theretofore covering such unconverted shares had not been
surrendered for conversion.
(c) No fractional shares of Common Stock or scrip shall be issued upon
conversion of shares of Series A Preferred Stock. If more than one share of
Series A Preferred Stock shall be surrendered for conversion at any one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of such Series A Preferred Stock so surrendered. Instead of any
fractional shares of Common Stock which would otherwise be issuable upon
conversion of any shares of Series A Preferred Stock, the Corporation shall pay
a cash adjustment in respect of such fractional interest in an amount equal to
the then fair market value, as determined in good faith by the Board of
Directors of the Corporation, of a share of Common Stock multiplied by such
fractional interest. Fractional interests shall not be entitled to dividends,
and the holders of fractional interests shall not be entitled to any rights as
stockholders of the Corporation in respect of such fractional interest.
(d) For purposes of any adjustment of the Series A Preferred Conversion
Price pursuant to this Section 5, the following provisions shall apply:
(i) If, at any time after the Original Issuance Date, the number
of shares of Common Stock outstanding is increased by a stock
dividend payable in shares of Common Stock or by a
subdivision or split-up of shares of Common Stock, then,
following the record date fixed for the determination of
holders of Common Stock entitled to receive such stock
dividend, subdivision or split-up, the Series A Preferred
Conversion Price shall be appropriately decreased so that the
number of shares of Common Stock issuable on conversion of
each share of Series A Preferred Stock shall be increased in
proportion to such increase in outstanding shares. "Original
Issuance Date" shall mean the date of original issuance of
the first share of Series A Preferred Stock.
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(ii) If, at any time after the Original Issuance Date, the number
of shares of Common Stock outstanding is decreased by a
combination or reverse stock split of the outstanding shares
of Common Stock, then, following the record date for such
combination, the Series A Preferred Conversion Price for such
series shall be appropriately increased so that the number of
shares of Common Stock issuable on conversion of each share
of Series A Preferred Stock shall be decreased in proportion
to such decrease in outstanding shares.
(iii) In case, at any time after the Original Issuance Date, of any
capital reorganization, or any reclassification of the stock
of the Corporation (other than a change in par value or from
par value to no par value or from no par value to par value
or as a result of a stock dividend or subdivision, split-up
or combination of shares), or the consolidation or merger of
the Corporation with or into another person (other than a
consolidation or merger in which the Corporation is the
continuing corporation and which does not result in any
change in the Common Stock) or of the sale or other
disposition of all or substantially all the properties and
assets of the Corporation as an entirety to any other person,
each share of Series A Preferred Stock shall after such
reorganization, reclassification, consolidation, merger, sale
or other disposition be convertible into the kind and number
of shares of stock or other securities or property of the
Corporation or of the corporation resulting from such
consolidation or surviving such merger or to which such
properties and assets shall have been sold or otherwise
disposed to which the holder of the number of shares of
Common Stock deliverable (immediately prior to the time of
such reorganization, reclassification, consolidation, merger,
sale or other disposition) upon conversion of such Series A
Preferred Stock would have been entitled upon such
reorganization, reclassification, consolidation, merger, sale
or other disposition. The provisions of this Section 5 shall
similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales or other
dispositions.
(iv) All calculations under Sections 5(d)(i), 5(d)(ii) and
5(d)(iii) shall be made to the nearest one tenth (1/10) of a
cent or to the nearest one tenth (1/10) of a share, as the
case may be, and in any case in which the provisions of this
Section 5 shall require that an adjustment shall become
effective immediately after a record date for an event, the
Corporation may defer until the occurrence of such event (A)
issuing to the holder of any share of Series A Preferred Stock
converted after such record date and before the occurrence of
such event the additional shares of capital stock issuable
upon such conversion by reason of the adjustment required by
such event over and above the shares of capital stock issuable
upon such conversion before giving effect to such adjustment
and (B) paying to such holder any amount in cash in lieu of a
fractional share of capital stock pursuant to Section 5(c);
provided, however, that the Corporation shall deliver to such
holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares, and
such cash, upon the occurrence of the event requiring such
adjustment.
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(e) Whenever the Series A Preferred Conversion Price shall be adjusted
as provided in this Section 5, the Corporation shall forthwith file, at the
office of the Corporation or of any transfer agent designated by the Corporation
for the Series A Preferred Stock, a statement, signed by its chief financial
officer, showing in detail the facts requiring such adjustment and the Series A
Preferred Conversion Price then in effect. The Corporation shall also cause a
copy of such statement to be sent by first-class certified mail, return receipt
requested, postage prepaid, to each holder of shares of Series A Preferred Stock
at his or its address appearing on the Corporation's records. Where appropriate,
such copy may be given in advance and may be included as part of a notice
required to be mailed under the provisions of Section 5.
(f) In the event the Corporation shall propose to take any action of
the types described in Section 5(d), the Corporation shall give notice to each
holder of shares of Series A Preferred Stock in the manner set forth in Section
5(e), which notice shall specify the record date, if any, with respect to any
such action and the date on which such action is to take place. Such notice
shall also set forth such facts with respect thereto as shall be reasonably
necessary to indicate the effect of such action (to the extent such effect may
be known at the date of such notice) on the Series A Preferred Conversion Price
and the number, kind or class of shares or other securities or property which
shall be deliverable or purchasable upon the occurrence of such action or
deliverable upon conversion of shares of Series A Preferred Stock.
(g) The Corporation shall pay all documentary, stamp or other
transactional taxes attributable to the issuance or delivery of shares of
capital stock of the Corporation upon conversion of any shares of Series A
Preferred Stock.
(h) The Corporation shall reserve, free from preemptive rights, out of
its authorized but unissued shares of Common Stock solely for the purpose of
effecting the conversion of the shares of Series A Preferred Stock sufficient
shares to provide for the conversion of all outstanding shares of Series A
Preferred Stock.
(i) All shares of Common Stock which may be issued in connection with
the conversion provisions set forth herein will, upon issuance by the
Corporation, be validly issued, fully paid and nonassessable.
(6) Automatic Conversion. All shares of Series A Preferred Stock then
outstanding shall, by virtue of, and simultaneously with, the affirmative vote
of holders of a majority of the shares of Series A Preferred Stock then
outstanding, and without any additional action on the part of the holders
thereof, be deemed automatically converted into that number of fully paid and
nonassessable shares of Common Stock into which such shares would have been
convertible in the event of optional conversion at such time pursuant to Section
5 hereof. The provisions of Section 5 shall apply to any such automatic
conversion.
(7) Redemption. The shares of Series A Preferred Stock are not
redeemable.
IN WITNESS WHEREOF, this Certificate of Amendment to the Certificate of
Incorporation of the Corporation has been signed by the Chief Financial Officer
of the Corporation, this 8th day of August, 2002.
THE A CONSULTING TEAM, INC.
By: /s/ Richard D. Falcone
----------------------------
Name: Richard D. Falcone
Title: Chief Financial Officer
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