EXHIBIT 3(i).1
RESTATED ARTICLES OF INCORPORATION
OF
SI DIAMOND TECHNOLOGY, INC.
Pursuant to the provisions of Article 4.07 (B) of the Texas Business
Corporation Act (the "TBCA"), SI Diamond Technology, Inc. (the "Corporation")
adopts the following Restated Articles of Incorporation (the "Restated
Articles"). The Restated Articles accurately copy the Amended and Restated
Articles of Incorporation of the Corporation currently in effect, and all
amendments thereto that are in effect to date, and contain no change in any
provision thereof.
ARTICLE ONE
The name of the corporation is SI Diamond Technology, Inc.
ARTICLE TWO
The period of its duration is perpetual.
ARTICLE THREE
The objects and purposes for which the Corporation is organized, the
nature of the business to be conducted by the Corporation, and the powers which
may be exercised by the Corporation are stated and declared to be as follows:
(a) To enter into and engage in any business activities that lawfully may
be conducted by a Corporation organized and existing under the Texas
Business Corporation Act (the "TBCA") either directly, or through
affiliated or subsidiary companies which may be formed under the laws
of any State or foreign nation where the conduct of such activities is
lawful;
(b) To enter into and engage in business activities either for its own
account, or for the account of others, as agent, and either as agent
or principal, to enter upon or engage in any kind of business of any
nature whatsoever, in which corporations organized under the TBCA may
engage; and to the extent not prohibited thereby to enter upon and
engage in any kind of business of any nature whatsoever in any other
state of the United States of America, any foreign nation, and any
territory of any country to the extent permitted by the laws of such
other state, nation or territory;
(c) To acquire, organize and create subsidiary and affiliated companies
under the laws of any state or foreign nation;
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(d) To engage in any other lawful act or activity for which a Corporation
may be organized under the TBCA; and
(e) Nothing in this Article shall be construed as authorizing the
Corporation to transact any business in the State of Texas prohibited
by any law of the State of Texas, or to engage in any activity in the
State of Texas which lawfully cannot be engaged in without first
obtaining a license under the laws of the State of Texas and such
license cannot be granted to a corporation, or to transact any of the
business referred to in Section (B)(3)(a) or Section (B)(4) of Article
2.01 of the TBCA.
ARTICLE FOUR
The Corporation is hereby authorized to issue a total of 122,000,000
shares of capital stock which shall be subdivided into classes as follows:
DIVISION A - COMMON STOCK
One Hundred Twenty Million (120,000,000) shares of the Corporation's capital
stock shall be denominated as Common Stock, have a par value of $0.001 per
share, and have the rights, powers and preferences set forth in this paragraph.
(i) The holders of Common Stock shall share ratably, with all other classes
of common equity, in any dividends that may, from time to time, be
declared by the Board of Directors;
(ii) No dividends may be paid with respect to the Corporation's Common
Stock, however, until dividend distributions to the holders of
Preferred Stock, if any, have been paid in accordance with the
certificate or certificates of designation relating to such Preferred
Stock;
(iii) The holders of Common Stock shall share ratably, with all other classes
of common equity, in any assets of the Corporation that are available
for distribution to the holders of common equity securities of the
Corporation upon the dissolution or liquidation of the Corporation;
(iv) The holders of Common Stock shall be entitled to cast one vote per
share on all matters that are submitted for a vote of the shareholders;
(v) There are no redemption or sinking fund provisions that are applicable
to the Common Stock of the Corporation; and
(vi) Subject only to the requirements of the TBCA and the foregoing
limitations, the Board of Directors is expressly authorized to issue
shares of Common Stock without stockholder approval, at any time and
from time to time, to such persons and for such consideration as the
Board of Directors shall deem appropriate under the circumstances.
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DIVISION B - PREFERRED STOCK
Two Million (2,000,000) shares of the Corporation's authorized capital stock
shall be denominated as Preferred Stock, par value of $1.00 per share. Shares of
Preferred Stock may be issued from time to time in one or more series as the
Board of Directors, by resolution or resolutions, may from time to time
determine, each of said series to be distinctively designated. The voting
powers, preferences and relative, participating, optional and other special
rights, and the qualifications, limitations or restrictions thereof, if any, of
each such series of Preferred Stock may differ from those of any and all other
series of Preferred Stock at any time outstanding, and the Board of Directors is
hereby expressly granted authority to fix or alter, by resolution or
resolutions, the designation, number, voting powers, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions thereof, of each such series of Preferred Stock,
including, but without limiting the generality of the foregoing, the following:
(i) The distinctive designation of, and the number of shares of Preferred
Stock that shall constitute, each series of Preferred Stock, which
number (except as otherwise provided by the Board of Directors in the
resolution establishing such series) may be increased or decreased (but
not below the number of shares of such series then outstanding) from
time to time by the Board of Directors without prior approval of the
holders of such series;
(ii) The rights in respect of dividends, if any, of such series of Preferred
Stock, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes or any
other series of the same or other class or classes of capital stock of
the Corporation, and whether such dividends shall be cumulative or
noncumulative;
(iii) The right, if any, of the holders of such series of Preferred Stock to
convert the same into, or exchange the same for, shares of any other
class or classes or of any other series of the same or any other class
or classes of capital stock of the Corporation and the terms and
conditions of such conversion or exchange, including, without
limitation, whether or not the number of shares of such other class or
series into which shares of such series may be converted or exchanged
shall be adjusted in the event of any stock split, stock dividend,
subdivision, combination, reclassification or other transaction or
series of transactions affecting the class or series into which such
series of Preferred Stock may be converted or exchanged;
(iv) Whether or not shares of such series of Preferred Stock shall be
subject to redemption, and the redemption price or prices and the time
or times at which, and the terms and conditions on which, shares of
such series of Preferred Stock may be redeemed;
(v) The rights, if any, of the holder of such series of Preferred Stock
upon the voluntary or involuntary liquidation, dissolution or winding
up of the Corporation or in the event of any merger or consolidation of
or sale of assets by the Corporation;
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(vi) The terms of any sinking fund or redemption or repurchase amount, if
any, to be provided for shares of such series of Preferred Stock;
(vii) The voting owners, if any, of the holders of any series of Preferred
Stock generally or with respect to any particular matter, which may be
less than, equal to or greater than one vote per share, and which may,
without limiting the generality of the foregoing, include the right,
voting as a series by itself or together with the holders of any other
series of Preferred Stock or all series of Preferred Stock as a class,
to elect one or more Directors of the Corporation (which, without
limiting the generality of the foregoing, may include a specified
number or portion of the then-existing number of authorized
Directorships of the Corporation, or a specified number or portion of
Directorships in addition to the then existing number of authorized
Directorships of the Corporation), generally or under such specific
circumstances and on such conditions, as shall be provided in the
resolution or resolutions of the Board of Directors adopted pursuant
hereto; and
(viii) Such other powers, preferences and relative, participating, optional
and other special rights, and the qualifications, limitations and
restrictions thereof, as the Board of Directors shall determine.
Notwithstanding the foregoing, and with the sole exception of shares issued
pursuant to the duly adopted stock option plans of the Corporation, no shares of
Preferred Stock shall be issued or sold to any officer or director of the
Corporation, or any shareholder who directly or indirectly owns more than 5 % of
the issued and outstanding voting stock of the Corporation, or any affiliate of
such person, without the affirmative vote of a majority in interest of the
disinterested shareholders of the Corporation. Upon the creation of any new
class or series of Preferred Stock of the Corporation, the Board of Directors
shall prepare and file with the records of the Corporation a certificate setting
forth the rights and preferences of such class or series of Preferred Stock,
which certificate shall be deemed an amendment to these Restated Articles and
shall not require the consent of any shareholder.
DIVISION C - SERIES OF PREFERRED STOCK
SERIES G PREFERRED STOCK
The designations, preferences, limitations and relative rights of the
three thousand (3,000) authorized shares of Series G Preferred Stock of the
Corporation, are as follows:
A. Par Value, Stated Value, Accretion Rate, Purchase Price and
Certificates.
1. Each share of Series G Preferred Stock
shall have a par value of $1.00, and a stated value (face amount) of One
Thousand Dollars ($1,000) (the "Stated Value"), with an accretion rate of ten
percent (10%) per annum on the Stated Value as set forth herein.
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2. The Series G Preferred Stock shall be
offered at a purchase price of One Thousand Dollars ($1,000) per share.
3. Certificates representing the shares of
Series G Preferred Stock purchased shall be issued by the Corporation to the
purchasers immediately upon acceptance of the subscriptions to purchase such
shares.
B. Dividends.
The Series G Preferred Stock will bear no dividends,
and the holders of the Series G Preferred Stock shall not be entitled to the
receipt of dividends on the Series G Preferred Stock.
C. Liquidation Preference.
1. In the event of any liquidation,
dissolution or winding-up of the Corporation, either voluntary or involuntary (a
"Liquidation"), the holders of shares of the Series G Preferred Stock then
issued and outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its shareholders, whether from
capital, surplus or earnings, before any payment shall be made to the holders of
shares of the Common Stock an amount per share equal to the sum of (i) the
Stated Value and (ii) an amount equal to ten percent (10%) of the Stated Value
multiplied by the fraction N/365, where N equals the number of days elapsed
since the issue date of the Series G Preferred Stock. If, upon any Liquidation
of the Corporation, the assets of the Corporation available for distribution to
its shareholders shall be insufficient to pay the holders of shares of the
Series G Preferred Stock and the holders of any other series of Preferred Stock
with a liquidation preference equal to the liquidation preference of the Series
G Preferred Stock the full amounts to which they shall respectively be entitled,
the holders of shares of the Series G Preferred Stock and the holders of any
other series of Preferred Stock with liquidation preference equal to the
liquidation preference of the Series G Preferred Stock shall receive all of the
assets of the Corporation available for distribution and each such holder of
shares of the Series G Preferred Stock and the holders of any other series of
Preferred Stock with a liquidation preference equal to the liquidation
preference of the Series G Preferred Stock shall share ratably in any
distribution in accordance with the amounts due such shareholders. After payment
shall have been made to the holders of shares of the Series G Preferred Stock of
the full amount to which they shall be entitled, as aforesaid, the holders of
shares of the Series G Preferred Stock shall be entitled to no further
distributions thereon and the holders of shares of the Common Stock and of
shares of any other series of stock of the Corporation shall be entitled to
share, according to their respective rights and preferences, in all remaining
assets of the Corporation available for distribution to its shareholders.
2. A merger or consolidation of the
Corporation with or into any other corporation, or a sale, lease, exchange, or
transfer of all or any part of the assets of the Corporation
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which shall not in fact result in the Liquidation (in whole or in part) of the
Corporation and the distribution of its assets to its shareholders shall not be
deemed to be a voluntary or involuntary Liquidation (in whole or in part) of the
Corporation.
D. Conversion of Series G Preferred Stock.
The holders of Series G Preferred Stock shall have the following conversion
rights:
1. Right to Convert. Each share of Series G
Preferred Stock shall be convertible, on the Conversion Dates and at the
Conversion Prices set forth below, into fully paid and nonassessable shares of
Common Stock (sometimes referred to herein as "Conversion Shares").
2. Mechanics of Conversion. Each holder of
Series G Preferred Stock who desires to convert the same into shares of Common
Stock shall provide notice ("Conversion Notice") via telecopy (facsimile) on a
business day, during business hours in Austin, Texas, to the Corporation, and a
facsimile of the Conversion Notice shall be transmitted to the Corporation's
Transfer Agent at the same time as transmission is made to the Corporation. On
the same day the original Conversion Notice shall be delivered to the
Corporation the certificate or certificates representing the Series G Preferred
Stock for which conversion is elected, shall be delivered to the Transfer Agent
by international courier, duly endorsed. The later of the date upon which the
Corporation receives the original Conversion Notice or the date the Transfer
Agent receives the Certificates representing the Series G Preferred Stock for
which conversion is elected, shall be a "Notice Date."
Upon receipt by the Corporation of a Conversion Notice, as
provided above, the Corporation shall immediately send to the holder, via
telecopy (facsimile), a confirmation of receipt of the Conversion Notice which
shall specify that the Conversion Notice has been received and the name and
telephone number of a contact person at the Corporation whom the holder should
contact regarding information related to the conversion. The Corporation shall
use all reasonable efforts to issue and deliver within three (3) business days
after the Notice Date, to such holder of Series G Preferred Stock at the address
of the holder on the stock books of the Corporation, a certificate or
certificates for the number of shares of Common Stock to which the holder shall
be entitled as aforesaid; provided that the original shares of Series G
Preferred Stock to be converted are received by the transfer agent or the
Corporation within three (3) business days after the receipt of the original
Conversion Notice and the person or persons entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder or holders of such shares of Common Stock on the Notice Date.
If the original certificate(s) representing the shares of Series G Preferred
Stock to be converted are not received by the transfer agent or the Corporation
within three (3) business days after the receipt of the original Conversion
Notice, the Conversion Notice shall become null and void.
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3. Lost or Stolen Certificates. Upon receipt
by the Corporation of evidence reasonably satisfactory to it of the loss,
destruction, theft or mutilation of any Series G Preferred Stock certificates
(the "Certificates") and (in the case of loss, theft or destruction) of
indemnity or security reasonably satisfactory to the Corporation, and upon
surrender and cancellation of the Certificates, if mutilated, the Corporation
shall execute and deliver new Series G Preferred Stock Certificates of like
tenor and date. However, the Corporation shall not be obligated to re-issue such
lost or stolen Series G Preferred Stock Certificates if the holder thereof
contemporaneously requests the Corporation to convert such Series G Preferred
Stock into Common Stock, in which event the Corporation shall be entitled to
rely on an affidavit of loss, destruction or theft of the Series G Preferred
Stock Certificate (and the receipt of indemnity or security reasonably
satisfactory to the Corporation) or, in the case of mutilation, tender of the
mutilated certificate, and shall issue the Conversion Shares.
4. Conversion Dates. The shares of Series G
Preferred Stock shall become convertible into shares of Common Stock at any time
commencing after the earlier of (i) the effective date of a registration
statement covering the Conversion Shares; or (ii) thirty (30) days after the
date of issuance of the shares of Preferred Stock. The date on which a
Conversion Notice is transmitted by facsimile to the Corporation shall be
referred to as a "Conversion Date".
5. Conversion Formula/Conversion Price. Each
share of Series G Preferred Stock shall be convertible into the number of shares
of Common Stock in accordance with the following formula (the "Conversion
Formula"):
[(.10) x (N/365) x ($1,000)] + $1,000
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Conversion Price
where,
N = the number of days between (i) the issue date of
the Series G Preferred Stock being converted , and
(ii) the Notice Date; and
Conversion Price = $1.00
6. Automatic Conversion. Each share of Series
G Preferred Stock outstanding on June 10, 2002 automatically shall be converted
into Common Stock on such date in accordance with the Conversion Formula and the
Conversion Price then in effect, and June 10, 2002 shall be deemed to be the
Notice Date and Conversion Date with respect to such conversion.
7. No Fractional Shares. If any conversion of
the Series G Preferred Stock would create a fractional share of Common Stock or
a right to acquire a fractional share of Common Stock, no fractional shares
shall be issued and an equivalent of the fractional share shall
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be paid in cash.
8. Reservation of Stock Issuable Upon
Conversion. The Corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series G Preferred Stock, such
number of its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all then outstanding shares of the Series G Preferred
Stock; and if at any time the number of authorized but unissued shares of Common
Stock shall not be sufficient to effect the conversion of all then outstanding
shares of the Series G Preferred Stock, the Corporation will take such corporate
action as may be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
9. Adjustment to Conversion Price.
(a) If, prior to the conversion of all
shares of Series G Preferred Stock, the number of outstanding shares of Common
Stock is increased by a stock split, stock dividend, or other similar event, the
Conversion Price shall be proportionately reduced, or if the number of
outstanding shares of Common Stock is decreased by a combination or
reclassification of shares, or other similar event, the Conversion Price shall
be proportionately increased.
(b) If, prior to the conversion of all
shares of Series G Preferred Stock, there shall be any merger, consolidation,
exchange of shares, recapitalization, reorganization, or other similar event, as
a result of which shares of Common Stock of the Corporation shall be changed
into the same or a different number of shares of the same or another class or
classes of stock or securities of the Corporation or another entity, then the
holders of Series G Preferred Stock shall thereafter have the right to purchase
and receive upon conversion of shares of Series G Preferred Stock, upon the
basis and upon the terms and conditions specified herein and in lieu of the
shares of Common Stock immediately theretofore issuable upon conversion, such
shares of stock and/or securities as may be issued or payable with respect to or
in exchange for the number of shares of Common Stock immediately theretofore
purchasable and receivable upon the conversion of shares of Series G Preferred
Stock held by such holders had such merger, consolidation, exchange of shares,
recapitalization or reorganization not taken place, and in any such case
appropriate provisions shall be made with respect to the rights and interests of
the holders of the Series G Preferred Stock to the end that the provisions
hereof (including, without limitation, provisions for adjustment of the
Conversion Price and of the number of shares issuable upon conversion of the
Series G Preferred Stock) shall thereafter be applicable, as nearly as may be
practicable in relation to any shares of stock or securities thereafter
deliverable upon the exercise hereof. The Corporation shall not effect any
transaction described in this subsection unless the resulting successor or
acquiring entity (if not the Corporation) assumes by written instrument the
obligation to deliver to the holders of the Series G Preferred Stock such shares
of stock and/or securities as, in accordance with the foregoing provisions, the
holders of the Series G
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Preferred Stock may be entitled to purchase.
(c) If any adjustment under this
subsection would create a fractional share of Common Stock or a right to acquire
a fractional share of Common Stock, no fractional shares shall be issued upon
conversion and an equivalent of the fractional share shall be paid in cash.
E. Voting. Except as otherwise provided by the TBCA, the
holders of the Series G Preferred Stock shall be entitled to a number of votes
equal to the number of shares of Common Stock into which their respective shares
of Series G Preferred Stock are then convertible using the record date for the
taking of such vote of shareholders as the date as of which the Conversion Price
is calculated. Holders of the Series G Preferred Stock shall be entitled to
notice of all shareholder meetings or written consents with respect to which
they would be entitled to vote, which notice would be provided pursuant to the
Company's by-laws and applicable statutes.
F. Protective Provisions. So long as shares of Series G
Preferred Stock are outstanding, the Corporation shall not, without first
obtaining the approval (by vote or written consent, as provided by law) of the
Holders of at least seventy-five percent (75%) of the then outstanding shares of
Series G Preferred Stock:
(a) alter or change the rights, preferences or
privileges of the Series G Preferred Stock so as to affect adversely the Series
G Preferred Stock;
(b) create any new class or series of stock or
issue any capital stock senior to or having a preference over or parity with the
Series G Preferred Stock with respect to payments upon Liquidation or increase
the number of authorized shares of Series G Preferred Stock or change the Stated
Value thereof; or
(c) do any act or thing not authorized or
contemplated by this Resolution which would result in taxation of the holders of
shares of the Series G Preferred Stock under Section 305 of the Internal Revenue
Code of 1986, as amended (or any comparable provision of the Internal Revenue
Code as hereafter from time to time amended).
G. Status of Converted Stock. In the event any shares of
Series G Preferred Stock shall be converted as contemplated by this Statement,
the shares so converted shall be canceled, shall return to the status of
authorized but unissued Preferred Stock of no designated class or series, and
shall not be issuable by the Corporation as Series G Preferred Stock.
H. Taxes. All shares of Common Stock issued upon conversion of
Series G Preferred Stock will be validly issued, fully paid and nonassessable.
The Corporation shall pay any and all documentary stamp or similar issue or
transfer taxes that may be payable in respect of any issue or delivery of shares
of Common Stock on conversion of Series G Preferred Stock pursuant hereto. The
Corporation shall not, however, be required to pay any tax which may be
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payable in respect of any transfer involved in the issue and delivery of shares
of Common Stock in a name other than that in which the Series G Preferred Stock
so converted were registered, and no such issue or delivery shall be made unless
and until the person requesting such transfer has paid to the Corporation the
amount of any such tax or has established to the satisfaction of the Corporation
that such tax has been paid or that no such tax is payable.
SERIES H JUNIOR PARTICIPATING PREFERRED STOCK
The designations, preferences, limitations and relative rights of the
Series H Junior Participating Preferred Stock of the Corporation are as follows:
1. Designation and Amount. There shall be a series of shares of
preferred stock that shall be designated as "Series H Junior Participating
Preferred Stock," and the number of shares constituting such series shall be Six
Hundred Thousand (600,000).
2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of shares of preferred stock ranking prior and superior to
the Series H Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series H Junior Participating Preferred Stock, in
preference to the holders of shares of any class or series of shares of the
Corporation ranking prior to the Series H Junior Participating Preferred Stock,
shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable in
cash on the 15th day of January, April, July and October in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series H Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, the Adjustment Number (as defined below) times the aggregate per share
amount of all cash dividends, and the Adjustment Number times the aggregate per
share amount (payable in kind) of all non-cash dividends or other distributions
other than a dividend payable in shares of common stock or a subdivision of the
outstanding shares of common stock (by reclassification or otherwise), declared
on the shares of common stock of the Corporation (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series H Junior Participating Preferred Stock. The
"Adjustment Number" shall initially be 100. In the event the Corporation shall
at any time after June 18, 1998 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in Common Stock, (ii) subdivide the outstanding
Common Stock or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the Adjustment Number in effect immediately
prior to such event shall be adjusted by multiplying such Adjustment Number by a
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fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) The Corporation shall declare a dividend or distribution on the
Series H Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series H
Junior Participating Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
Series H Junior Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such Series H Junior
Participating Preferred Stock, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of Series H Junior
Participating Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the Series H Junior Participating Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share by share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of Series H Junior Participating Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 30 days prior to the date fixed for the
payment thereof.
3. Voting Rights. The holders of Series H Junior Participating
Preferred Stock shall have the following voting rights:
(A) Each share of Series H Junior Participating Preferred Stock shall
entitle the holder thereof to a number of votes equal to the Adjustment Number
on all matters submitted to a vote of the shareholders of the Corporation.
(B) Except as otherwise provided herein or by law, the holders of
Series H Junior Participating Preferred Stock and the holders of the Common
Stock shall vote together as one class on all matters submitted to a vote of
shareholders of the Corporation.
(C) (i) If at any time dividends on any Series H Junior Participating
Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of
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such contingency shall mark the beginning of a period (herein called a "default
period") which shall extend until such time when all accrued and unpaid
dividends for all previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Series H Junior Participating
Preferred Stock then outstanding shall have been declared and paid or set apart
for payment. During each default period, all holders of Preferred Stock
(including holders of the Series H Junior Participating Preferred Stock) with
dividends in arrears in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to elect two (2)
Directors.
(ii) During any default period, such voting right of the
holders of Series H Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that such voting right shall not be exercised
unless the holders of ten percent (10%) in number of shares of Preferred Stock
outstanding shall be present in person or by proxy. The absence of a quorum of
the holders of Common Stock shall not affect the exercise by the holders of
Preferred Stock of such voting right. At any meeting at which the holders of
Preferred Stock shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to elect Directors
to fill such vacancies, if any, in the Board of Directors as may then exist up
to two (2) Directors or, if such right is exercised at an annual meeting, to
elect two (2) Directors. If the number which may be so elected at any special
meeting does not amount to the required number, the holders of Preferred Stock
shall have the right to make such increase in the number of Directors as shall
be necessary to permit the election by them of the required number. After the
holders of the Preferred Stock shall have exercised their right to elect
Directors in any default period and during the continuance of such period, the
number of Directors in any default period and during the continuance of such
period, the number of Directors shall not be increased or decreased except by
vote of the holders of the Preferred Stock as herein provided or pursuant to the
rights of any equity securities ranking senior to or pari passu with the
Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding, irrespective of series, may request, the
calling of special meeting of the holders of Preferred Stock, which meeting
shall thereupon be called by the President, a Vice President or the Secretary of
the Corporation. Notice of such meeting and of any annual meeting at which
holders of Preferred Stock are entitled to vote pursuant to this Paragraph
(C)(iii) shall be given to each holder of record of Preferred Stock by mailing a
copy of such notice to him or her at his or her last address as the same appears
on the books of the Corporation. Such meeting shall be called for a time not
earlier than 10 days and not later than 50 days after such order or request or
in default of the calling of such meeting within 50 days after such order or
request, such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of
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shares of Preferred Stock outstanding. Notwithstanding the provisions of this
Paragraph (C)(iii), no such special meeting shall be called during the period
within 50 days immediately preceding the date fixed for the next annual meeting
of the stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Preferred
Stock shall have exercised their right to elect two (2) Directors voting as a
class, after the exercise of which right (x) the Directors so elected by the
holders of Preferred Stock shall continue in office until their successors shall
have been elected by such holders or until the expiration of the default period,
and (y) any vacancy in the Board of Directors may (except as provided in
Paragraph (C)(ii) of this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of stock
which elected the Director whose office shall have become vacant. References in
this Paragraph (C) to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Preferred Stock
as a class shall terminate, and (z) the number of Directors shall be such number
as may be provided for in the certificate of incorporation or bylaws
irrespective of any increase made pursuant to the provisions of Paragraph
(C)(ii) of this Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the certificate of incorporation
or bylaws). Any vacancies in the Board of Directors effected by the provisions
of clauses (y) and (z) in the preceding sentence may be filled by a majority of
the remaining Directors.
(D) Except as set forth herein or as provided by law, holders of Series
H Junior Participating Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of the Common Shares as set forth herein) for taking any
corporate action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series H Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on Series H Junior Participating
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any shares
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series H Junior Participating Preferred Stock;
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(ii) declare or pay dividends on or make any other
distributions on any shares ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series H Junior Participating
Preferred Stock, except dividends paid ratably on the Series H Junior
Participating Preferred Stockand all such parity shares on which dividends are
payable or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration any shares ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series H Junior Participating
Preferred Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire any such parity shares in exchange for any shares of the
Corporation ranking junior (both as to dividends and upon dissolution,
liquidation or winding up) to the Series H Junior Participating Preferred Stock;
or
(iv) purchase or otherwise acquire for consideration any
shares of Series H Junior Participating Preferred Stock, or any shares ranking
on a parity with the Series H Junior Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of the Corporation
unless the Corporation could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
5. Reacquired Shares. Any Series H Junior Participating Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of shares of
Preferred Stock.
6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares ranking junior (either as to dividends or upon liquidation or winding up)
to the Series H Junior Participating Preferred Stock, unless, prior thereto, the
holders of Series H Junior Participating Preferred Stock shall have received
$1.00 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment (the
"Series H Liquidation Preference"). Following the payment of the full amount of
the Series H Liquidation Preference, no additional distributions shall be made
to the holders of Series H Junior Participating Shares
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unless, prior thereto, the holders of Common Stock shall have received an amount
per share (the "Common Adjustment") equal to the quotient obtained by dividing
(i) the Series H Liquidation Preference by (ii) the Adjustment Number. Following
the payment of the full amount of the Series H Liquidation Preference and the
Common Adjustment in respect of all outstanding shares of Series H Junior
Participating Preferred Stock and the Common Stock, respectively, holders of
Series H Junior Participating Preferred Stock and holders of the Common Stock
shall receive their ratable and proportionate share of the remaining assets to
be distributed in the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and the Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets to
permit payment in full of the Series H Liquidation Preference and the
liquidation preferences of all other series of shares of preferred stock, if
any, that rank on a parity with the Series H Junior Participating Preferred
Stock, then such remaining assets shall be distributed ratably to the holders of
such parity shares in proportion to their respective liquidation preferences. In
the event, however, that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of the Common Stock.
7. Consolidation, Merger, etc. In case the Corporation shall enter into
any consolidation, merger, or other transaction in which the Common Stock are
exchanged for or changed into other shares or securities, cash and/or other
property, then in any such case, the Series H Junior Participating Preferred
Stock shall at the same time be similarly exchanged or changed in an amount per
share equal to the Adjustment Number times the aggregate amount of shares,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each Common Share is changed or exchanged.
8. No Redemption. The Series H Junior Participating Stocks shall not be
redeemable. Notwithstanding the foregoing sentence of this Section, the
Corporation may acquire Series H Junior Participating Preferred Stock in any
other manner permitted by law.
9. Ranking. The Series H Junior Participating Preferred Stock shall
rank junior to all other series of the Corporation's preferred stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
10. Amendment. At any time that any Series H Junior Participating
Preferred Stock are outstanding, these Restated Articles shall not be amended in
any manner which would materially alter or change the powers, preferences or
special rights of the Series H Junior Participating Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of a majority
or more of the outstanding Series H Junior Participating Preferred Stock, voting
separately as a class.
11. Fractional Shares. Series H Junior Participating Preferred Stock
may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to
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exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series H Junior Participating
Preferred Stock.
DIVISION D - PROVISIONS APPLICABLE TO ALL CLASSES OF STOCK
(a) No holder of any stock of the Corporation shall be entitled as of
right to purchase or subscribe for any part of any unissued or
treasury stock of the Corporation, or of any additional stock of any
class, to be issued by reason of any increase of the authorized
capital stock of the Corporation, or to be issued from any unissued or
additionally authorized stock, or of bonds, certificates of
indebtedness, debentures or other securities convertible into stock of
the Corporation, but any such unissued or treasury stock, or any such
additional authorized issue of new stock or securities convertible
into stock, may be issued and disposed of by the Board of Directors to
such persons, firms, corporations or associations, and upon such terms
as the Board of Directors may, in its discretion, determine, without
offering to the shareholders then of record, or any class of
shareholders, any thereof, on the same terms or any terms.
ARTICLE FIVE
The Corporation will not commence business until it has received for
the issuance of its shares consideration of the value of not less than $1000.00
consisting of money paid, labor done, or property actually received.
ARTICLE SIX
The address of the registered office and the name of its registered
agent is as follows:
C T Corporation
811 Dallas Avenue
Houston, Texas 77002
ARTICLE SEVEN
(a) The business and affairs of the Corporation shall be conducted and
managed by, or under the direction of, the Board of Directors. Except
as otherwise provided for or fixed pursuant to the provisions of
Article 4 of these Restated Articles relating to the rights of the
holders of any series of Preferred Stock to elect additional
directors, the total number of directors constituting the entire Board
of Directors shall be not less than three (3) nor more than nine (9),
with the then-authorized number of directors being fixed from time to
time solely by or
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pursuant to a resolution passed by the Board of Directors.
(b) The Board of Directors shall have the power to make, adopt, alter,
amend and repeal from time to time the By-Laws of this Corporation,
subject to the right of the shareholders entitled to vote with respect
thereto to adopt, alter, amend and repeal the By-Laws; provided,
however, that By-Laws shall not be adopted, altered, amended or
repealed by the stockholders of the Corporation except by the vote of
the holders of not less than sixty percent (60%) of the outstanding
shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, considered for this purpose as
one class.
(c) No director of the Corporation shall be liable to the Corporation or
its shareholders for monetary damages for an act or omission (or an
alleged act or omission) in a director's capacity as director, except
that this Article Seven (c) does not eliminate or limit the liability
of a director to the extent the director is found liable for:
(1) a breach of a director's duty of loyalty to the Corporation or its
shareholders;
(2) an act or omission not in good faith which constitutes a breach of
duty of the director to the Corporation, or an act or omission which
involves intentional misconduct or a knowing violation of-the law;
(3) a transaction from which a director received an improper benefit,
whether or not the benefit resulted from an action taken within the
scope of the director's office;
(4) an act or omission for which the liability of a director is
expressly provided for by an applicable statute; or
(5) an act related to an unlawful stock repurchase or payment of a
dividend.
If the Texas Miscellaneous Corporation Laws Act or the TBCA or any other
applicable law is amended or adopted to authorize action further eliminating or
limiting the personal liability of directors, then the liability of a director
of the Corporation shall be eliminated or limited to the fullest extent
permitted by such law(s), as so amended or adopted. Any repeal or modification
of the foregoing paragraph shall not adversely affect any right of protection of
a director of the Corporation existing at the time of such repeal or
modification.
(d) The Board of Directors shall be divided into three classes, designated
as Class I, Class II, and Class III. Each class shall consist, as
nearly as may be possible, of one-third of the total number of
directors constituting the entire Board of Directors. Initially, Class
I directors shall be elected for a one-year term, Class II directors
for a two year term and Class III directors for a three-year term. At
the annual meeting of shareholders beginning in 1993, successors to
the class of directors whose term expires at that annual meeting shall
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be elected for a three-year term. If the number of directors is
changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of directors in each class as
nearly as possible, and any additional director of that class elected
to fill a vacancy resulting from an increase in such class shall hold
office for a term that shall coincide with the remaining term of that
class, but in no case shall a decrease in the number of directors
shorten the term of any incumbent director. A director shall hold
office until the annual meeting for the year in which his term expires
and until his successor shall be elected and shall qualify, subject,
however, to prior death, resignation, retirement, disqualification or
removal from office. Any vacancy on the Board of Directors that results
from an increase in the number of directors may be filled only by
action of majority of the Board of Directors then in office, provided
that a quorum is present; any other vacancy occurring in the Board of
Directors may be filled only by action of a majority of the directors
then in office, even if less than a quorum, or by a sole remaining
director. Any director elected to fill a vacancy not resulting from an
increase in the number of directors shall have the same remaining term
as that of his predecessor.
(e) Notwithstanding the foregoing, whenever, pursuant to the provisions of
Article 4 of these Restated Articles, the holders of any one or more
series of Preferred Stock shall have the right, voting separately as a
series or together with holders of other such series, to elect
directors at an annual or special meeting of shareholders, the
election, term of office, filling of vacancies and other features of
such directorships shall be governed by the terms of these Restated
Articles and such directors so elected shall not be divided into
classes pursuant to this Article 7 (e) unless expressly provided by
such terms.
(f) Directors must be at least 21 years of age and need not be
shareholders. There shall be no qualifications for directors of the
Corporation other than as set forth in these Amended and Restated
Articles.
(g) The number of directors presently constituting the Board of Directors
of the Corporation is seven (7), and the names, addresses and class of
the persons now serving as directors are are as follows:
Name Address Class
Ronald J. Berman Jupiter, Florida III
Marc W. Eller Fort Worth, Texas III
Nicholas Martin Detroit, Michigan II
Philip C. Shaffer Houston, Texas II
David R. Sincox Houston, Texas I
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Dr. Zvi Yaniv Austin, Texas I
Charles C. Bailey Austin, Texas I
ARTICLE EIGHT
[Deleted pursuant to Article 4.07 (B) of the TBCA, as amended.]
ARTICLE NINE
(a) At an annual meeting of the shareholders, only such business shall be
conducted as shall have been properly brought before the meeting. To
be properly brought before an annual meeting, business must be
otherwise properly brought before the meeting by a shareholder (i)
specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Board of Directors, (ii) otherwise
properly brought before the meeting by or at the direction of the
Board of Directors, or (iii) otherwise properly brought before the
meeting by a shareholder. For business to be properly brought before
an annual meeting by a shareholder, the shareholder must have given
timely notice thereof in writing to the Secretary of the Corporation.
To be timely, a shareholder's notice must be delivered to or mailed
and received at the principal executive offices of the Corporation not
less than 60 days nor more than 90 days prior to the meeting;
provided, however, that in the event that less than 70 days' notice or
prior to public disclosure of the date of the meeting is given or made
to shareholders, notice by the shareholder to be timely must be so
received not later than the close of business on the 10th day
following the day on which such notice of the date of the annual
meeting was mailed or such public disclosure was made. A shareholder's
notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and address, as they appear on the
Corporation's books, of the shareholder proposing such business, (iii)
the class and number of shares of the Corporation which are
beneficially owned by the shareholder, and (iv) any material interest
of the shareholder in such business. The Chairman of the annual
meeting shall, if the facts warrant, determine and declare to the
meeting that business was not properly brought before the meeting in
accordance with the provisions of this Article 9(a), and if he should
so determine, he shall so declare to the meeting and any such business
not properly brought before the meeting shall not be transacted.
(b) Only persons who are nominated in accordance with the procedures set
forth in this Article 9(b) shall be eligible for elections as
Directors. Nominations of persons for election to the Board of
Directors of the Corporation may be made at a meeting of shareholders
by or at the direction of the Board of Directors or by any shareholder
of the Corporation entitled to vote for the election of Directors at
the meeting who complies with the notice procedures
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set forth in this Article 9(b). Such nominations, other than those made
by or at the direction of the Board of Directors, shall be made
pursuant to timely notice in writing to the Secretary of the
Corporation. To be timely, a shareholder's notice shall be delivered to
or mailed and received at the principal executive offices of the
Corporation not less than 60 days nor more than 90 days prior to the
meeting; provided, however, that in the event that less than 70 days'
notice or prior public disclosure of the date of the meeting is given
or made to shareholders, notice by the shareholder to be timely must be
so received not later than the close of business on the 10th day
following the date on which such notice of the date of the meeting was
mailed or such public disclosure was made. Such shareholder's notice
shall set forth (i) as to each person whom the shareholder proposes to
nominate for election or re-election as a Director, (A) the name, age,
business address and residence address of such person, (B) the
principal occupation or employment of such person, (C) the class and
number of shares of the Corporation which are beneficially owned by
such person, and (D) any other information relating to such person that
is required to be disclosed in solicitations of proxies for election of
Directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended
(including without limitation such person's written consent to being
named in the proxy statement as a nominee and to serving as a Director
if elected); and (ii) as to the shareholder giving the notice, (1) the
name and address, as they appear on the Corporation's books, of such
shareholder and (2) the class and number of shares of the Corporation
which are beneficially owned by such shareholder. No person shall be
eligible for election as a Director of the Corporation unless nominated
in accordance with the procedures set forth in this Article 9(b). The
Chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance
with the procedures prescribed herein, and if he should so determine,
he shall so declare to the meeting and the defective nomination shall
be disregarded.
ARTICLE TEN
No shareholder of the corporation shall have the right of cumulative
voting at any election of directors or upon any other matter.
ARTICLE ELEVEN
(a) With respect to any matter for which the affirmative vote of the
holders of a specified portion of the shares entitled to vote is
required by the TBCA, including, but not limited to, the amendment of
these Restated Articles pursuant to Article 4.02 of the TBCA, the
approval of any action or plan of merger or exchange pursuant to
Article 5.03 of the TBCA or the disposition of assets requiring
special authorization of shareholders pursuant to Article 5.10 of the
TBCA, the approval of those matters shall be the affirmative vote of
the majority of the shares entitled to vote on those matters, rather
than the affirmative vote otherwise required by the TBCA.
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(b) With respect to any matter for which the affirmative vote of the
holders of a specified portion of the shares of any class or series is
required by the TBCA, including, but not limited to, those matters
identified in paragraph (a) of this Article Eleven, the approval of
those matters shall be the affirmative vote of the holders of a
majority of the shares of that class or series, rather than the
affirmative vote of that class or series otherwise required by the
TBCA.
(c) If the TBCA or any other applicable law is amended or adopted with
respect to a matter requiring the affirmative vote of the holders of a
specified portion of the shares entitled to vote on that matter, then
this Article Eleven shall also require a vote of a majority of the
holders of the shares entitled to vote on that matter, rather than the
affirmative vote otherwise required.
IN WITNESS WHEREOF, the undersigned has executed these Restated
Articles as of November___, 1999.
SI DIAMOND TECHNOLOGY, INC.
/s/ Douglas P. Baker
---------------------------
Douglas P. Baker
Vice President and Chief Financial Officer
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