ARTICLES OF INCORPORATION
OF
KINAM MERGER CORP.
[TO BE CHANGED TO KINAM GOLD INC.
ON COMPLETION OF CHANGE OF DOMICILE MERGER]
I, the undersigned natural person of the age of 21 or more, acting as
incorporator of a corporation under the Revised Statutes of Nevada (the
"Statutes"), adopt the following articles of incorporation for such corporation:
ARTICLE 1
The name of the corporation is Kinam Merger Corp. (hereinafter, the
"Corporation").
ARTICLE 2
The address of the Corporation's initial resident office is 6100 Neil
Road, Suite 500, Reno, Nevada 89511. The name of its initial resident agent at
such address is The Corporation Trust Company of Nevada.
ARTICLE 3
The nature of the business or purposes 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 Statutes.
ARTICLE 4
The total number of shares of all classes of stock which the Corporation
shall have authority to issue is two hundred ten million (210,000,000), of which
ten million (10,000,000) shares shall be shares of Preferred Stock (hereinafter
referred to as the "Preferred Stock"), par value of one dollar ($1.00) per
share, and two hundred million (200,000,000) shares shall be shares of Common
Stock (hereinafter referred to as the "Common Stock"), par value of one cent
($0.01) per share.
A statement of the designations of the authorized classes of Preferred
Stock or of any series thereof, and the powers, preferences, and relative,
participating, optional, or other special rights, and qualifications,
limitations, or restrictions thereof, or of the authority of the Board of
Directors to fix by resolution or resolutions such designations and other terms
not fixed by these Articles of Incorporation, is as follows:
A. Preferred Stock.
---------------
(1) The Preferred Stock may be issued in one or more series, from
time to time, with each such series to have such designation, powers,
preferences, and relative, participating, optional, or other special
rights, and qualifications, limitations, or restrictions thereof, as shall
be stated and expressed in the resolution or resolutions providing for the
issue of such series adopted by the Board of Directors of the Corporation,
subject to the limitations prescribed by law and in accordance with the
provisions hereof, the Board of Directors being hereby expressly vested
with
authority to adopt any such resolution or resolutions. The authority of
the Board of Directors with respect to each such series shall include, but
not be limited to, the determination or fixing of the following:
(a) The distinctive designation and number of shares
comprising such series, which number may (except where otherwise
provided by the Board of Directors in creating such series) be
increased or decreased (but not below the number of shares then
outstanding) from time to time by like action of the Board of
Directors;
(b) The dividend rate of such series (which may be a floating
or fixed rate or rates and which may be determined by formula or
formulas), the conditions and times upon which such dividends shall
be payable, the relation which such dividends shall bear to the
dividends payable on any other class or classes of stock or series
thereof, or any other series of the same class, and whether
dividends shall be cumulative or non-cumulative;
(c) The conditions upon which the shares of such series shall
be subject to redemption by the Corporation and the times, prices,
and other terms and provision upon which the shares of the series
may be redeemed;
(d) Whether or not the shares of the series shall be subject
to the operation of a retirement or sinking fund to be applied to
the purchase or redemption of such shares and, if such retirement or
sinking fund be established, the annual amount thereof and the terms
and provisions relative to the operation thereof;
(e) Whether or not the shares of the series shall be
convertible into or exchangeable for shares of any other class or
classes, with or without par value, or of any other series of the
same class, and, if provision is made for conversion or exchange,
the times, prices, rates, adjustments, and other terms and
conditions of such conversion or exchange;
(f) Whether or not the shares of the series shall have voting
rights, in addition to the voting rights provided by law, and, if
so, the terms of such voting rights;
(g) The rights of the shares of the series in the event of
voluntary or involuntary liquidation, dissolution, or upon the
distribution of assets of the Corporation; and
(h) Any other powers, preferences, and relative,
participating, optional, or other special rights, and
qualifications, limitations, or restrictions thereof, of the shares
of such series, as the Board of Directors may deem advisable and as
shall not be inconsistent with the provisions of these Articles of
Incorporation.
(2) The holders of shares of the Preferred Stock of each series
shall be entitled to receive, when and as declared by the Board of
Directors, out of funds legally available for the payment of dividends,
dividends at the rate or rates fixed by the Board of Directors for such
series, or determined in the manner prescribed in the resolution or
resolutions by the Board of Directors creating such series, and no more,
before any dividends, other than dividends payable in Common Stock, shall
be declared and paid, or set apart for payment, on the Common Stock with
respect to the same dividend period.
2
(3) Whenever, at any time, dividends on the then outstanding
Preferred Stock as may be required with respect to any series outstanding
shall have been paid or declared and set apart for payment on the then
outstanding Preferred Stock, and after complying with respect to any
retirement or sinking fund or funds for any series of Preferred Stock, the
Board of Directors may, subject to the provisions of the resolution or
resolutions creating any series of Preferred Stock, declare and pay
dividends on the Common Stock, and the holders of shares of the Preferred
Stock shall not be entitled to share therein.
(4) The holders of shares of the Preferred Stock of each series
shall be entitled upon liquidation or dissolution or upon the distribution
of the assets of the Corporation to such preferences as provided in the
resolution or resolutions creating such series of Preferred Stock, and no
more, before any distribution of the assets of the Corporation shall be
made to the holders of shares of the Common Stock. Whenever the holders of
shares of the Preferred Stock shall have been paid in full amounts to
which they shall be entitled, the holders of shares of the Common Stock
shall be entitled to share ratably in all assets of the Corporation then
remaining.
B. Common Stock.
------------
(1) At all meetings of the stockholders of the Corporation, the
holders of shares of the Common Stock shall be entitled to one vote for
each share of Common Stock held by them. Except as otherwise provided by a
resolution or resolutions of the Board of Directors creating any series of
Preferred Stock or by the Statutes, the holders of shares of the Common
Stock issued and outstanding shall have and possess the exclusive right to
notice of stockholders' meeting and the exclusive power to vote.
C. $3.75 SERIES B CONVERTIBLE PREFERRED STOCK. A series of the Preferred
Stock, par value $1.00 per share, of the Corporation is hereby created,
consisting of 1,840,000 shares, with the designations, powers, preferences, and
relative, participating, optional, or other special rights, and qualifications,
limitations, or restrictions thereof, of the shares of such series as follows:
(1) DESIGNATION, NUMBER OF SHARES, AND RANK. The designation of such
series shall be "$3.75 Series B Convertible Preferred Stock" (hereinafter
referred to as the "Series B Convertible Preferred Stock"). Each share of
Series B Convertible Preferred Stock shall be identical in all respects
with the other shares of Series B Convertible Preferred Stock.
All shares of Series B Convertible Preferred Stock shall rank prior,
both as to payment of dividends and as to distributions of assets upon
liquidation, dissolution, or winding up of the Corporation, whether
voluntary or involuntary, to all of the Corporation's now or hereafter
issued Common Stock.
(2) DIVIDENDS. The holders of shares of Series B Convertible
Preferred Stock shall be entitled to receive, when, as, and if declared by
the Board of Directors of the Corporation, but only out of funds legally
available therefore, dividends at the annual rate of $3.75 per share, and
no more, which shall be fully cumulative, shall accrue without interest
from the date of first issuance, and shall be payable in cash in equal
quarterly installments on August 15, November 15, February 15, and May 15
of each year (except that if any such date is not a business day, then
such dividend shall be payable on the next succeeding business day) (each,
a "Dividend Payment Date"), to stockholders of record as they appear on
the stock transfer books of the Corporation on such record dates, not more
than 60 nor less than 10 days preceding such Dividend Payment Date, as are
fixed by the Board of Directors of the Corporation. For the purposes
hereof, the term "business day" shall mean each Monday, Tuesday,
Wednesday, Thursday, or Friday which is not
3
a day on which banking institutions are authorized or obligated by law or
executive order to close in New York, New York. Dividends shall initially
accrue on the Series B Convertible Preferred Stock beginning with the
quarterly payment due August 15, 2000. Subject to the next paragraph of
this Section 2, dividends on account of arrears for any past dividend
periods may be declared and paid at any time, without reference to any
Dividend Payment Date, to holders of record on such date, not exceeding 45
days preceding the payment date thereof, as may be fixed by the Board of
Directors of the Corporation. The amount of dividends payable per share of
Series B Convertible Preferred Stock for each quarterly dividend period
shall be computed by dividing the annual amount by four. The amount of
dividends payable on the Series B Convertible Preferred Stock for any
period less than a full quarterly dividend period shall be computed on the
basis of a 360-day year consisting of twelve 30-day months. Holders of
shares of Series B Convertible Preferred Stock shall not be entitled to
any dividend whether payable in cash, property, or stock, in excess of the
full cumulative dividends on such shares of Series B Convertible Preferred
Stock.
On each Dividend Payment Date, all dividends which shall have
accrued on each share of Series B Convertible Preferred Stock outstanding
on such Dividend Payment Date shall accumulate and be deemed to become
"due" whether or not declared and whether or not there shall be funds
legally available for the payment thereof. Any dividend which shall not be
paid on the Dividend Payment Date on which it shall become due shall be
deemed to be "past due" until such dividend shall be paid or until the
share of Series B Convertible Preferred Stock with respect to which such
dividend became due shall no longer be outstanding, whichever is the
earlier to occur. No interest or sum of money or other property or
securities in lieu of interest shall be payable in respect to any dividend
payment or payments which are past due. Dividends paid on shares of Series
B Convertible Preferred Stock in an amount less than the total amount of
such dividends at the time accumulated and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the
time outstanding.
No dividends or other distributions, other than dividends payable
solely in shares of Common Stock, shall be paid, or declared and set apart
for payment in respect of, and no purchase, redemption, or other
acquisition for any consideration shall be made by the Corporation of and
no sinking fund or other analogous fund payments shall be made in respect
of any shares of Common Stock or other capital stock of the Corporation
ranking junior as to dividends or as to liquidation rights to the Series B
Convertible Preferred Stock (the "Junior Dividend Stock") unless and until
all accrued and unpaid dividends on the Series B Convertible Preferred
Stock, including the full dividend for the then current dividend period,
shall have been paid or declared and set apart for payment and the
Corporation is not in default in respect of the optional redemption of any
shares of Series B Convertible Preferred Stock.
No dividends or other distributions shall be paid or declared and
set apart for payment and no purchase, redemption, or other acquisition
for any consideration shall be made by the Corporation of, and no sinking
fund or other analogous fund payments shall be made in respect of, any
class or series of the Corporation's capital stock ranking, as to
dividends, on a parity with the Series B Convertible Preferred Stock (the
"Parity Dividend Stock"), for any period unless full cumulative dividends
have been, or contemporaneously are, paid or declared and set apart for
such payment on the Series B Convertible Preferred Stock for all dividend
payment periods terminating on or prior to the date of payment of such
full cumulative dividends. No dividends shall be paid or declared and set
apart for payment on the Series B Convertible Preferred Stock for any
period unless full cumulative dividends have been, or contemporaneously
are, paid or declared and set apart for payment on the Parity Dividend
Stock for all dividend periods terminating on or prior to the date of
payment of such full cumulative dividends. When dividends are not paid in
full upon the Series B Convertible Preferred Stock and the Parity Dividend
Stock,
4
all dividends paid or declared and set apart for payment upon shares of
Series B Convertible Preferred Stock and the Parity Dividend Stock shall
be paid or declared and set apart for payment pro rata so that the amount
of dividends paid or declared and set apart for payment per share on the
Series B Convertible Preferred Stock and the Parity Dividend Stock shall
in all cases bear to each other the same ratio that accrued and unpaid
dividends per share on the shares of Series B Convertible Preferred Stock
and the Parity Dividend Stock bear to each other.
The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of capital
stock of the Corporation or any Parity Dividend Stock unless the
Corporation could, under this Section 2, purchase or otherwise acquire
such shares at such time and in such manner. Any reference to
"distribution" contained in this Section 2 shall not be deemed to include
any distribution made in connection with any liquidation, dissolution, or
winding up of the Corporation, whether voluntary or involuntary.
(3) LIQUIDATION PREFERENCE. In the event of any liquidation,
dissolution, or winding up of the Corporation, whether voluntary or
involuntary, the holders of shares of Series B Convertible Preferred Stock
shall be entitled to receive out of the assets of the Corporation, whether
such assets are stated capital or surplus of any nature, an amount equal
to the dividends accrued and unpaid thereon to the date of final
distribution to such holders, whether or not declared, without interest,
and a sum equal to $50.00 per share, and no more, before any payment shall
be made or any assets distributed to the holders of Common Stock or any
other class or series of the Corporation's capital stock ranking junior as
to liquidation rights to the Series B Convertible Preferred Stock (the
"Junior Liquidation Stock"). In the event the assets of the Corporation
available for distribution to stockholders upon any liquidation,
dissolution, or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full the amounts payable with
respect to the Series B Convertible Preferred Stock and any other class or
series of the Corporation's capital stock which has been or may hereafter
be created ranking on a parity as to liquidation rights with the Series B
Convertible Preferred Stock (the "Parity Liquidation Stock"), the holders
of the Series B Convertible Preferred Stock and the holders of the Parity
Liquidation Stock shall share ratably in any distribution of assets of the
Corporation in proportion to the full respective preferential amounts to
which they are entitled (but only to the extent of such preferential
amounts). After payment in full of the liquidation preferences of the
shares of Series B Convertible Preferred Stock, the holders of such shares
shall not be entitled to any further participation in any distribution of
assets by the Corporation. Neither a consolidation, merger, or other
business combination of the Corporation with or into another corporation
or other entity nor a sale or transfer of all or part of the Corporation's
assets for cash, securities, or other property shall be considered a
liquidation, dissolution, or winding up of the Corporation for purposes of
this Section 3 (unless in connection therewith the liquidation of the
Corporation is specifically approved).
The holder of any shares of Series B Convertible Preferred Stock
shall not be entitled to receive any payment owed for such shares under
this Section 3 until such holder shall cause to be delivered to the
Corporation: (i) the certificate(s) representing such shares of Series B
Convertible Preferred Stock, and (ii) transfer instrument(s) satisfactory
to the Corporation and sufficient to transfer such shares of Series B
Convertible Preferred Stock to the Corporation free of any liens or
encumbrances thereon or rights of third parties thereto. As in the case of
the Redemption Price referred to below, no interest shall accrue on any
payment upon liquidation after the due date thereof.
5
(4) Redemption At the Option of the Corporation.
-------------------------------------------
(a) RIGHT OF REDEMPTION. Subject to and upon compliance with
the provisions of this Section 4, the Corporation, at its option,
may at any time redeem the Series B Convertible Preferred Stock, in
whole or from time to time in part, on any date on or after
_______________, 2001, set by the Board of Directors of the
Corporation, at the following redemption prices per share, if
redeemed during the 12-month period commencing on August 15, of the
year indicated:
Years Price Per Share
---------------------- ---------------------
2000 $51.500
2001 $51.125
2002 $50.750
2003 $50.375
2004 and thereafter $50.000
plus in each case accrued and unpaid dividends to, but excluding,
the date of redemption.
In case of the redemption of less than all of the then
outstanding Series B Convertible Preferred Stock, the shares of
Series B Convertible Preferred Stock to be redeemed shall be
redeemed pro rata or by lot or in such other equitable manner as the
Board of Directors of the Corporation reasonably may determine.
Notwithstanding the foregoing, the Corporation shall not redeem less
than all of the Series B Convertible Preferred Stock at any time
outstanding until all dividends accrued and in arrears upon all
Series B Convertible Preferred Stock and Parity Dividend Stock then
outstanding shall have been paid for all past dividend periods.
(b) MANNER OF EXERCISE OF REDEMPTION OPTION. In order to
exercise its redemption option, the Corporation must give written
notice in person or by first class mail, postage prepaid, of such
redemption to each holder of record of the shares of Series B
Convertible Preferred Stock to be redeemed, at such holder's address
as it shall appear upon the stock transfer books of the Corporation
not more than 60 days nor less than 30 days prior to the redemption
date. Each such notice of redemption shall state, as appropriate:
(1) the date fixed for redemption; (2) the number of shares of
Series B Convertible Preferred Stock to be redeemed and, if fewer
than all of the shares held by such holder are to be redeemed, the
number of such shares to be redeemed from such holder; (3) the
Redemption Price per share of Series B Convertible Preferred Stock;
(4) the place or places of payment that payment of the Redemption
Price will be made upon presentation and surrender of the
certificate or certificates evidencing the shares of Series B
Convertible Preferred Stock to be redeemed; (5) that on and after
the redemption date, dividends will cease to accrue on such shares;
and (6) the then effective Conversion Price pursuant to Section 5
and that the right of holders to convert shall terminate at the
close of business on the redemption date (unless the Corporation
defaults in the payment of the Redemption Price).
Any notice that is delivered or mailed as herein provided
shall be conclusively presumed to have been duly given, whether or
not the holder of the Series B Convertible Preferred Stock receives
such notice; and failure to give such notice, or any defect in such
notice, to the holders of any shares designated for redemption shall
not affect the validity
6
of the proceedings of the redemption of any other shares of Series B
Convertible Preferred Stock. On or after the date fixed for
redemption as stated in such notice, each holder of the shares of
Series B Convertible Preferred Stock called for redemption shall
surrender the certificate or certificates evidencing such shares to
the Corporation at the place designated in such notice and shall
thereupon be entitled to receive payment of the Redemption Price as
herein provided. If less than all the shares represented by any such
surrendered certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares. If, on the date fixed for
redemption, cash necessary for the redemption shall be available for
such purpose and irrevocably shall have been deposited or set apart,
then, notwithstanding that the certificates evidencing any shares so
called for redemption shall not have been surrendered, the dividend
with respect to the shares so called shall cease to accrue after the
date fixed for redemption, the shares no longer shall be deemed
outstanding, the holders thereof shall cease to be holders of Series
B Convertible Preferred Stock, and all rights whatsoever with
respect to the shares so called for redemption (except the right of
the holders to receive payment of the Redemption Price as herein
provided, without interest, upon surrender of their certificates
therefore) shall terminate. Any cash necessary for the redemption of
shares of Series B Convertible Preferred Stock shall be deemed to be
available therefore for purposes of the preceding sentence and for
purposes of Section 7, if, on or before the date fixed for
redemption, the Company shall deposit with a bank or trust company
that has an office in the Borough of Manhattan, City of New York,
and that has, or is an affiliate of a bank that has, a capital
surplus of at least $50,000,000, the cash necessary for such
redemption, in trust, with irrevocable instructions that such cash
be applied to the redemption of the shares of the Series B
Convertible Preferred Stock and any Parity Dividend Stock so called
for redemption. No interest shall accrue for the benefit of the
holders of shares of Series B Convertible Preferred Stock to be
redeemed on any cash so set apart by the Corporation. Subject to
applicable escheat laws, any such cash unclaimed at the end of six
years from the redemption date shall revert to the general funds of
the Corporation, after which reversion the holders of such shares so
called for redemption shall look only to the general funds of the
Corporation for the payment of such cash.
The holder of any shares of Series B Convertible Preferred
Stock redeemed upon any exercise of the Corporation's redemption
right shall not be entitled to receive payment of the Redemption
Price for such shares until such holder shall cause to be delivered
to the place specified in the notice given with respect to such
redemption (i) the certificate or certificates representing such
shares of Series B Convertible Preferred Stock redeemed and (ii)
transfer instruments satisfactory to the Corporation and sufficient
to transfer such shares of Series B Convertible Preferred Stock to
the Corporation free of any adverse interest. No interest shall
accrue on the Redemption Price of any share of Series B Convertible
Preferred Stock after its redemption date.
In the event that any shares of Series B Convertible Preferred
Stock shall be converted into shares of the Common Stock (the
"Kinross Stock") of Kinross Gold Corporation, a Canadian corporation
("Kinross"), pursuant to Section 5, then (i) the Corporation shall
not have the right to redeem such shares and (ii) any funds which
shall have been deposited for the payment of the Redemption Price
for such shares of Series B Convertible Preferred Stock shall be
returned to the Corporation immediately after such conversion
(subject to declared dividends payable to holders of shares of
Series B Convertible Preferred Stock on the record date for such
dividends, to the extent set forth in Section 5 hereof, regardless
of whether such shares are converted subsequent to such record date
and prior to the related Dividend Payment Date).
7
(c) CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional
shares of Series B Convertible Preferred Stock shall be issued upon
any redemption of Series B Convertible Preferred Stock, but, in lieu
thereof, the Corporation shall pay to the holder of such shares an
appropriate amount in cash (computed to the nearest cent) based on
the value of the shares of Series B Convertible Preferred Stock as
determined in good faith by the Corporation's Board of Directors.
(5) Conversion.
----------
(a) RIGHT OF CONVERSION. Subject to and upon compliance with
the provisions of this Section 5, each share of Series B Convertible
Preferred Stock shall, at the option of the holder thereof, be
convertible at any time (unless such share is called for redemption,
then to and including but not after 5:00 p.m. (New York City time)
on the date fixed for such redemption, unless the Corporation shall
default in payment due upon redemption thereof), into that number of
fully paid and nonassessable shares of Kinross Stock (calculated as
to each conversion to the nearest 1/100th of a share) obtained by
dividing $50.00 by the Conversion Price (as defined in Section 5(d))
in effect at such time and multiplying the result by .8004. The
certificate representing such share so to be converted must be
surrendered in the manner provided in Section 5(b).
(b) MANNER OF EXERCISE OF CONVERSION PRIVILEGE. In order to
exercise the conversion privilege, the holder of one or more shares
of Series B Convertible Preferred Stock to be converted shall
surrender such shares at any of the offices or agencies to be
maintained for such purpose by the Corporation accompanied by the
funds, if any, required by the last paragraph of this Section 5(b)
and shall give written notice of conversion in the form provided on
such shares of Series B Convertible Preferred Stock (or such other
notice as is reasonably acceptable to the Corporation) to the
Corporation at such office or agency that the holder elects to
convert the shares of Series B Convertible Preferred Stock specified
in said notice. Such notice shall also state the name or names,
together with address or addresses, in which the certificate or
certificates for shares of Kinross Stock which shall be issuable on
such conversion shall be issued. Each share of Series B Convertible
Preferred Stock surrendered for conversion, unless the shares
issuable on conversion are to be issued in the same name as the name
in which such share of Series B Convertible Preferred stock is
registered, shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney. As promptly as practicable after
the surrender of such shares of Series B Convertible Preferred Stock
and the receipt of such notice, instruments of transfer and funds,
if any, as aforesaid, the Corporation shall issue and shall deliver
at such office or agency to such holder, or on his written order, a
certificate or certificates for the number of full shares of Kinross
Stock issuable upon the conversion of such shares of Series B
Convertible Preferred Stock in accordance with the provisions of
this Section 5 and a check or cash in respect of any fractional
interest in a share of Kinross Stock arising upon such conversion,
as provided in Section 5(c).
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the business day
following the date on which such shares of Series B Convertible
Preferred Stock shall have been surrendered and such notice (and any
applicable instruments of transfer and any required taxes) received
by the Corporation as aforesaid, and the person or persons in whose
name or names any certificate or certificates for shares of Kinross
Stock shall be issuable upon such conversion shall be
8
deemed to have become the holder or holders of record of the shares
represented thereby at such time on such date, and such conversion
shall be at the Conversion Price in effect at such time on such
date, unless the stock transfer books of the Corporation shall be
closed on that date, in which event such person or persons shall be
deemed to have become such holder or holders of record at the close
of business on the next succeeding day on which such stock transfer
books are open, and such conversion shall be at the Conversion Price
in effect on the close of business on such next succeeding business
day upon which such shares of Series B Convertible Preferred Stock
shall have been surrendered and such notice received by the
Corporation.
Any shares of Series B Convertible Preferred Stock surrendered
by conversion during the period from the close of business on the
record date for any dividend payment to the opening of business on
the related Dividend Payment Date (unless such shares of Series B
Convertible Preferred Stock shall have been called for redemption on
a date in such period) shall be accompanied by payment, in funds
acceptable to the Corporation, of an amount equal to the dividend
otherwise payable on such Dividend Payment Date. Except as provided
for above in this Section, no adjustment shall be made for dividends
accrued on any shares of Series B Convertible Preferred Stock
converted or for dividends on any shares issued upon the conversion
of such shares as provided in this Section.
(c) CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional
shares or scrip representing fractions of shares of Kinross Stock
shall be issued upon conversion of Series B Convertible Preferred
Stock. If more than one share of Series B Convertible Preferred
Stock shall be surrendered for conversion at one time by the same
holder, the number of full shares of Kinross Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate
of $50.00 for each such share so surrendered. In lieu of any
fractional interest in a share of Kinross Stock which would
otherwise be deliverable upon the conversion of any share of Series
B Convertible Preferred Stock, the Corporation shall pay to the
holder of such shares an amount in cash (computed to the nearest
cent) equal to the average Closing Price per share of Kinross Stock
as calculated for the ten day trading period ending on the fifth
trading day prior to the day of conversion multiplied by the
fractional interests in a share of Kinross Stock that otherwise
would have been deliverable upon conversion of such share.
(d) ADJUSTMENT OF CONVERSION PRice. The "Conversion Price"
shall mean and be $8.25, subject to adjustment from time to time by
the Corporation as follows:
(i) In case Kinross shall (A) pay a dividend or make a
distribution on the Kinross Stock in shares of Kinross Stock
(other than pursuant to a dividend reinvestment or similar
plan), (B) subdivide the outstanding shares of Kinross Stock
into a greater number of shares, (C) combine the outstanding
shares of Kinross Stock into a smaller number of shares, or
(D) issue by reclassification of the Kinross Stock any shares
of capital stock of Kinross, then in each such case the
Conversion Price in effect immediately prior to such action
shall be adjusted so that the holder of any share of Series B
Convertible Preferred Stock thereafter surrendered for
conversion shall be entitled to receive the number of shares
of Kinross Stock which he would have owned or been entitled to
receive immediately following such action had such share been
converted immediately prior to the occurrence of such event.
An adjustment made pursuant to this subsection (i) shall
become effective immediately after the record date, in
9
the case of a dividend or distribution, or immediately after
the effective date, in the case of a subdivision, combination,
or reclassification.
(ii) In case Kinross shall issue rights, options, or
warrants to all holders of the outstanding shares of Kinross
Stock entitling them to subscribe for or purchase shares of
Kinross Stock at a price per share less than the current
market price per share (as determined pursuant to subsection
(iv) of this Section 5(d)) of the Kinross Stock (other than
pursuant to any stock option, restricted stock, or other
incentive or benefit plan or stock ownership or purchase plan
for the benefit of employees, directors, or officers or any
dividend reinvestment plan of Kinross in effect at the time
hereof or any other similar plan adopted or implemented
hereafter), then with respect to any conversion prior to the
expiration of such rights, options, or warrants, the
Conversion Price in effect immediately prior thereto shall be
adjusted so that it shall equal the price determined by
multiplying the Conversion Price in effect immediately prior
to the date of issuance of such rights, options, or warrants
by a fraction of which the numerator shall be the number of
shares of Kinross Stock outstanding on the date of issuance of
such rights, options, or warrants (immediately prior to such
issuance) plus the number of shares which the aggregate
offering price of the total number of shares so offered would
purchase at such current market price, and of which the
denominator shall be the number of shares of Kinross Stock
outstanding on the date of issuance of such rights, options,
or warrants (immediately prior to such issuance) plus the
number of additional shares of Kinross Stock offered for
subscription or purchase. Such adjustment shall be made
successively whenever any rights, options, or warrants are
issued, and shall become effective immediately after the
record date for the determination of stockholders entitled to
receive such rights, options, or warrants; PROVIDED, HOWEVER,
in the event that all the shares of Kinross Stock offered for
subscription or purchase are not delivered upon the exercise
of such rights, options, or warrants, upon the expiration of
such rights, options, or warrants the Conversion Price shall
be readjusted to the Conversion Price which would have been in
effect had the numerator and the denominator of the foregoing
fraction and the resulting adjustment been made based upon the
number of shares of Kinross Stock actually delivered upon the
exercise of such rights, options, or warrants rather than upon
the number of shares of Kinross Stock offered for subscription
or purchase. In determining whether any rights, options, or
warrants entitled the holders to subscribe for or purchase
shares of Kinross Stock at less than such current market
price, and in determining the aggregate offering price of such
shares of Kinross Stock, there shall be taken into account any
consideration received by Kinross for such rights, options, or
warrants, the value of such consideration, if other than cash,
to be determined by the Audit Committee of the Board of
Directors of Kinross (whose reasonable determination shall be
conclusive, except for arithmetic errors, and shall be
described in a statement filed by Kinross with its stock
transfer agent).
(iii) In case Kinross shall, by dividend or otherwise,
distribute to all holders of the outstanding Kinross Stock,
evidences of its indebtedness or assets (including securities
and cash, but excluding any cash dividend of Kinross paid out
of retained earnings and dividends or distributions payable in
stock pursuant to a dividend reinvestment or similar plan or
for which adjustment is made pursuant to subsection (i) of
this Section 5(d)) or rights, options, or warrants to
10
subscribe for or purchase securities of Kinross (excluding
those referred to in subsection (ii) of this Section 5(d)),
then in each such case, the Conversion Price shall be adjusted
so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior
to the record date of such distribution by a fraction of which
the numerator shall be the current market price per share of
the Kinross Stock as determined pursuant to subsection (iv) of
this Section 5(d) less the fair market value on such record
date (as determined by the Audit Committee of the Board of
Directors of Kinross, whose reasonable determination shall be
conclusive, except for arithmetic errors, and shall be
described in a statement filed by Kinross with its stock
transfer agent) of the portion of the capital stock or assets
or the evidences of indebtedness or assets so distributed to
the holder of one share of Kinross Stock or of such
subscription rights, options, or warrants applicable to one
share of Kinross Stock, and of which the denominator shall be
such current market price per share of Kinross Stock. Such
adjustment shall become effective immediately after the record
date for the determination of stockholders entitled to receive
such distribution.
(iv) For the purpose of any computation under
subsections (ii) and (iii) of this Section 5(d), the current
market price per share of Kinross Stock on any date shall be
deemed to be the average of the Closing Price for the shorter
of (a) 30 consecutive trading days ending on the last full
trading day prior to the Time of Determination or (b) the
period commencing on the date next succeeding the first public
announcement of the issuance of such rights, options, or
warrants or such distribution through such last full trading
day prior to the Time of Determination. For purposes of the
foregoing, the term "Time of Determination" shall mean the
time and date of the earlier of (I) the record date for
determining stockholders entitled to receive the rights,
options, warrants, or distributions referred to in Section
5(d)(ii) and (iii) or (II) the commencement of "ex-dividend"
trading on the New York Stock Exchange or such other United
States exchange or market on which the Kinross Stock is then
listed or admitted for trading.
(v) In any case in which this Section 5(d) shall require
that any adjustment be made immediately following a record
date or an effective date, the Corporation may elect to defer
(but only until the filing by Kinross with its stock transfer
agent of the certificate required by subsection (vii) of this
Section 5(d)) issuing to the holder of any share of Series B
Convertible Preferred Stock converted after such record date
or effective date the shares of Kinross Stock issuable upon
such conversion over and above the shares of Kinross Stock
issuable upon such conversion on the basis of the Conversion
Price prior to adjustment, and paying to such holder any
amount of cash in lieu of a fractional share.
(vi) No adjustment in the Conversion Price shall be
required to be made unless such adjustment would require an
increase or decrease of at least 1% of such price; provided,
however, that any adjustments which by reason of this
subsection (vi) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Section 5(d) shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case
may be. Anything in this Section 5(d) to the contrary
notwithstanding, the Corporation shall be entitled to make
such reduction in the Conversion Price, in addition to those
required by this Section 5(d), as it in its discretion shall
11
determine to be advisable in order that any stock dividend,
subdivision of shares, distribution or rights to purchase
stock or securities, or distribution of securities convertible
into or exchangeable for stock hereafter made by the
Corporation to its stockholders shall not be taxable to the
recipients. Except as set forth in subsections (i), (ii), and
(iii) above, the Conversion Price shall not be adjusted for
any such event, including, without limitation, the issuance of
Kinross Stock, or any securities convertible into or
exchangeable for Kinross Stock or carrying the right to
purchase any of the foregoing, in exchange for cash, property,
or services.
(vii) Whenever the Conversion Price is adjusted as
herein provided, (A) the Corporation promptly shall file with
its stock transfer agent a certificate setting forth the
Conversion Price after such adjustment and a brief statement
of the facts requiring such adjustment and the manner of
computing the same, which certificate shall be conclusive
evidence of the correctness of such adjustment, except for
arithmetic errors, and (B) the Corporation also shall deliver
or mail, or cause to be delivered or mailed by first class
mail, postage prepaid, as soon as practicable to each holder
of record of shares of Series B Convertible Preferred Stock a
notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price. The stock
transfer agent shall not be under any duty or responsibility
with respect to the certificate required by this subsection
(vii) except to exhibit the same to any holder of shares of
Series B Convertible Preferred Stock who requests to inspect
it.
(viii) In the event that at any time, as a result of an
adjustment made pursuant to subsection (i) of this Section
5(d), the holder of any share of Series B Convertible
Preferred Stock thereafter surrendered for conversion shall
become entitled to receive any shares other than shares of
Kinross Stock, thereafter the Conversion Price of such other
shares so receivable upon conversion of any share of Series B
Convertible Preferred Stock shall be subject to adjustment
from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to
Kinross Stock contained in this Section.
(ix) The Corporation from time to time may decrease the
Conversion Price by any amount for any period of time if the
period is at least 20 days and if the decrease is irrevocable
during the period. Whenever the Conversion Price is so
decreased, the Corporation shall deliver or mail to holders of
record of shares of Series B Convertible Preferred Stock a
notice of the decrease at least 15 days before the date the
decreased Conversion Price takes effect, and such notice shall
state the decreased Conversion Price and the period it will be
in effect.
(e) Notice to Holders Prior to Certain Corporate Actions. In case:
----------------------------------------------------
(i) the Corporation shall take any action which would
require an adjustment in the Conversion Price pursuant to
Section 5(d)(iii); or
(ii) Kinross shall authorize the granting to the holders
of the Kinross Stock generally of rights, options, or warrants
to subscribe for or purchase any shares of stock of any class
or of any other rights; or
12
(iii) there shall be any reorganization or
reclassification of the Kinross Stock (other than a
subdivision or combination of the outstanding Kinross Stock
and other than a change in the par value of the Kinross
Stock), or any consolidation or merger to which Kinross is a
party or any statutory exchange of securities with another
corporation and for which approval of any stockholders of
Kinross is required, or any sale, lease, or transfer of all or
substantially all of the assets of Kinross; or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation, or winding up of the Corporation;
then in each such case, the Corporation shall cause to be delivered
or mailed by first class mail, postage prepaid, to the holders of
shares of Series B Convertible Preferred Stock and its stock
transfer agent, as promptly as possible, but in any event at least
20 days prior to the applicable date hereinafter specified, a
written notice stating (i) the date on which a record is to be taken
for the purpose of such action or granting of rights, options, or
warrants, or, if a record is not to be taken, the date as of which
the holders of Kinross Stock of record to be entitled to such
distribution, rights, options, or warrants are to be determined, or
(ii) the date on which such reorganization, reclassification,
consolidation, merger, statutory exchange, sale, lease, transfer,
dissolution, liquidation, or winding up is expected to become
effective or occur, and the date as of which it is expected that
holders of Kinross Stock of record shall be entitled to exchange
their shares of Kinross Stock for securities, cash, or other
property deliverable upon such reorganization, reclassification,
consolidation, merger, statutory exchange, sale, lease, transfer,
dissolution, liquidation, or winding up. Failure to give such notice
or any defect therein shall not affect the legality or validity or
the proceedings described in subsection (i), (ii), (iii), or (iv) of
this Section 5(e).
(f) TRANSFER TAXES, ETC. The Corporation shall pay any and all
documentary stamp, issue, or transfer taxes, and any other similar taxes
payable in respect of the issue or delivery of shares of Kinross Stock
upon conversion of shares of Series B Convertible Preferred Stock pursuant
hereto; provided, however, that the Corporation shall not be required to
pay any tax that may be payable in respect of any transfer involved in the
issue or delivery of shares of Kinross Stock in a name other than that of
the holder of the shares of Series B Convertible Preferred Stock to be
converted and no such issue or delivery shall be made unless and until the
person requesting such issue or delivery 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.
(g) CONSOLIDATION OR MERGER OR SALE OF ASSETS. Notwithstanding any
other provision herein to the contrary, in case of any consolidation or
merger to which Kinross is a party (other than a merger or consolidation
in which Kinross is the continuing corporation), or in case of any sale,
lease, or transfer to another corporation of the property of Kinross as an
entirety or substantially as an entirety, then lawful provision shall be
made by the corporation formed by such consolidation or the corporation
whose securities, cash, or other property immediately after the merger or
consolidation will be owned, by virtue of the merger of consolidation, by
the holders of Common Stock immediately prior to the merger or
consolidation, or the corporation which shall have acquired such assets or
securities of the Corporation (collectively the "Formed, Surviving, or
Acquiring Corporation"), as the case may be, providing that the holder of
each share of Series B Convertible Preferred Stock then outstanding shall
have the right thereafter to convert such share into the kind and amount
of securities, cash, or other property receivable upon such consolidation,
merger, sale, lease, or transfer by a holder of the number of shares of
Kinross
13
Stock into which such share of Series B Convertible Preferred Stock might
have been converted immediately prior to such consolidation, merger, sale,
lease, or transfer assuming such holder of Kinross Stock did not exercise
his rights of election, if any, as to the kind or amount of securities,
cash, or other property receivable upon such consolidation, merger, sale,
lease, or transfer (provided that, if the kind or amount of securities,
cash, or other property receivable upon such consolidation, merger, sale,
lease, or transfer is not the same for each share of Kinross Stock in
respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purposes of this Section 5(g), the
kind and amount of securities, cash, or other property receivable upon
such consolidation, merger, sale, lease, or transfer for each non-electing
share shall be deemed to be the kind and amount so receivable per share by
a plurality of the non-electing shares). The Formed, Surviving, or
Acquiring Corporation, as the case may be, shall make provision in its
certificate or articles of incorporation or other constituent documents to
the end that the provisions set forth in this Section 5(g) shall
thereafter correspondingly be made applicable, as nearly as may reasonably
be, in relation to any shares of stock or other securities or property
thereafter deliverable on the conversion of the Series B Convertible
Preferred Stock.
The above provisions of this Section 5(g) shall similarly apply to
successive consolidations, mergers, sales, leases, or transfers.
(h) COVENANT AS TO KINROSS STOCK. The Corporation covenants that all
shares of Kinross Stock which may be delivered upon conversions of shares
of Series B Convertible Preferred Stock will upon delivery be duly and
validly issued and fully paid and nonassessable, free of all liens and
charges and not subject to any preemptive rights.
(6) Voting Rights.
-------------
(a) GENERAL. The holders of Series B Convertible Preferred Stock
shall be entitled to 1.4 votes for each share of Series B Convertible
Preferred Stock held of record on each matter on which holders of the
Common Stock or stockholders generally are entitled to vote. Except as
otherwise provided herein or by applicable law, the holders of shares of
Series B Convertible Preferred Stock and the holders of shares of Common
Stock shall vote together as one class for the election of directors of
the Corporation and on all other matters submitted to a vote of
stockholders of the Corporation.
(b) ADDITIONAL VOTING RIGHTS. Whenever dividends on the Series B
Convertible Preferred Stock shall be in arrears in an amount equal to at
least six quarterly dividend payments (whether or not consecutive), (i)
the number of members of the Board of Directors of the Corporation shall
be increased by two, effective as of the time of election of such
directors as hereinafter provided, and (ii) the holders of the Series B
Convertible Preferred Stock (voting as a class together with all other
affected classes or series of the Parity Dividend Stock upon which like
voting rights have been conferred and are exercisable) will have the
exclusive right to vote for and elect such two additional directors of the
Corporation at any meeting of stockholders of the Corporation at which
directors are to be elected held during the period such dividends remain
in arrears. The right of the holders of the Series B Convertible Preferred
Stock to vote for such two additional directors shall terminate when all
accrued and unpaid dividends on the Series B Convertible Preferred Stock
have been declared and paid or set apart for payment. The term of office
of all directors so elected shall terminate immediately upon the
termination of the right of the holders of the Series B Convertible
Preferred Stock and such Parity Dividend stock to vote for such two
additional directors.
14
The foregoing right of the holders of the Series B Convertible
Preferred Stock with respect to the election of two directors may be
exercised at any annual meeting of stockholders or at any special meeting
of stockholders held for such purpose. If the right to elect directors
shall have accrued to the holders of the Series B Convertible Preferred
Stock more than 90 days preceding the date established for the next annual
meeting of stockholders, the President of the Corporation shall, within 20
days after the delivery to the Corporation at its principal office of a
written request for a special meeting signed by the holders of at least
ten percent (10%) of the Series B Convertible Preferred Stock then
outstanding, call a special meeting of the holders of the Series B
Convertible Preferred Stock to be held within 60 days after the delivery
of such request for the purpose of electing such additional directors.
The holders of the Series B Convertible Preferred Stock and any such
Parity Dividend Stock referred to above voting together shall have the
right to remove without cause at any time and replace any directors such
holders have elected pursuant to this Section 6.
(c) CLASS VOTING RIGHTS. So long as the Series B Convertible
Preferred Stock is outstanding, the Corporation shall not, without the
affirmative vote or consent of the holders of at least 66-2/3 percent of
all outstanding shares of Series B Convertible Preferred stock (unless the
vote or consent of a greater percentage is required by applicable law or
these Articles of Incorporation, as amended, of the Corporation), voting
separately as a class, (i) amend, alter, or repeal (by merger,
consolidation, or otherwise) any provision of these Articles of
Incorporation, as amended, or the Bylaws of the Corporation, as amended,
so as to affect adversely the relative rights, preferences,
qualifications, limitations, or restrictions of the Series B Convertible
Preferred Stock, (ii) authorize or issue, or increase the authorized
amount of, any additional class or series of stock, or any security
convertible into stock of such class or series, ranking prior to the
Series B Convertible Preferred Stock in respect of the payment of
dividends or upon liquidation, dissolution, or winding up of the
Corporation or (iii) effect any reclassification of the Series B
Convertible Preferred Stock. A class vote on the part of the Series B
Convertible Preferred Stock, without limitation, specifically shall not be
deemed to be required (except as otherwise required by law or resolution
of the Board of Directors of the Corporation) in connection with: (a) the
authorization, issuance, or increase in the authorized amount of any
shares of any other class or series of stock that ranks junior to, or on a
parity with, the Series B Convertible Preferred Stock in respect of the
payment of dividends and upon liquidation, dissolution, or winding up of
the Corporation; or (b) the authorization, issuance, or increase in the
amount of any notes, bonds, mortgages, debentures, or other obligations of
the Corporation not convertible into or exchangeable, directly or
indirectly, for stock ranking prior to the Series B Convertible Preferred
stock in respect of the payment of dividends or upon liquidation,
dissolution, or winding up of the Corporation.
(7) OUTSTANDING SHARES. For purposes of these Articles of Incorporation,
all shares of Series B Convertible Preferred Stock shall be deemed outstanding
except (i) from the date fixed for redemption pursuant to Section 4, all shares
of Series B Convertible Preferred Stock that have been so called for redemption
under Section 4 if the cash necessary for payment of the Redemption Price
irrevocably has been set aside; (ii) from the date of surrender of certificates
representing shares of Series B Convertible Preferred Stock, all shares of
Series B Convertible Preferred Stock converted into Kinross Stock; and (iii)
from the date of registration of transfer, all shares of Series B Convertible
Preferred Stock held of record by the Corporation or any subsidiary of the
Corporation.
(8) NO OTHER RIGHTS AND POWERS. The shares of Series B Convertible
Preferred Stock shall not have any relative, participating, optional, or other
special rights and powers other than as set forth herein.
15
(9) PREEMPTIVE RIGHTS. The Series B Convertible Preferred Stock is not
entitled to any preemptive or subscription rights in respect of any securities
of the Corporation.
(10) SEVERABILITY OF PROVISIONS. Whenever possible, each provision hereof
shall be interpreted in a manner as to be effective and valid under applicable
law, but if any provision hereof is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or otherwise adversely affecting
the remaining provisions hereof. If a court of competent jurisdiction should
determine that a provision hereof would be valid or enforceable if a period of
time were extended or shortened or a particular percentage were increased or
decreased, then such court may make such changes as shall be necessary to render
the provision in question effective and valid under applicable law.
ARTICLE 5
The governing board of this Corporation shall be known as directors. The
number of directors constituting the initial Board of Directors is one (1);
thereafter, the number of directors shall be determined by the Bylaws. The name
and address of the initial director who is to serve as such until the first
annual meeting of shareholders, or until his successor is elected and has
qualified, subject, however, to prior death, resignation, retirement,
disqualification, or removal from office is:
Arthur H. Ditto
52nd Floor, Scotia Plaza
40 King Street West
Toronto, Ontario M3H 3Y2
Canada
ARTICLE 6
The Board of Directors of the Corporation is expressly authorized to
adopt, amend, or repeal the Bylaws of the Corporation.
ARTICLE 7
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, except to the extent such exemption from liability or limitation
thereof is not permitted under the Statutes as currently in effect or as the
same may hereafter be amended.
No amendment, modification, or repeal of this Article 7 shall adversely
affect any right or protection of a director that exists at the time of such
amendment, modification, or repeal.
ARTICLE 8
The Corporation reserves the right at any time and from time to time to
amend, alter, change, or repeal any provision contained in these Articles of
Incorporation in the manner now or hereafter prescribed by law; and all rights,
preferences, and privileges of whatsoever nature conferred upon stockholders,
directors, or any other persons whomsoever by and pursuant to these Articles of
Incorporation in their present form or as hereafter amended are granted subject
to the rights reserved in this Article 8.
16
ARTICLE 9
The Corporation elects not to be governed by Sections 78.411 to 78.444 of
the Nevada Revised Statutes.
ARTICLE 10
The name and address of the incorporator signing these Articles of
Incorporation is as follows:
Shelley M. Riley
52nd Floor, Scotia Plaza
40 King Street West
Toronto, Ontario M3H 3Y2
Canada
/s/ Shelley M. Riley
------------------------
Shelley M. Riley, Incorporator
17
CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT
The Corporation Trust Company of Nevada hereby accepts appointment as
Resident Agent for Kinam Merger Corp.
The Corporation Trust Company of Nevada
By: /s/ Heidi M. Liesch
--------------------
Date: 5-14-01
-------
18