SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Metris Companies Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 41-1849591
(State of Incorporation or Organization) (I.R.S. Employer
Identification no.)
600 South Highway 169
Suite 1800
St. Louis Park, Minnesota 55426
(Address of Principal Executive Offices) (Zip Code)
If this form relates to the If this form relates to the
registration of a class of securities registration of a class of securities
pursuant to Section 12(b) of the pursuant to Section 12(g) of the
Exchange Act and is effective Exchange Act and is effective
pursuant to General Instruction pursuant to General Instruction
A.(c), please check the following A.(d), please check the following
box: X box:
Securities Act registration statement file number to which this
form relates:
(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
Common Stock,
par value $.01 per share New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Registrant's Securities to be Registered.
A description of the Common Stock, par value $.01 of Metris Companies
Inc., a Delaware corporation (the "Registrant") is as follows:
Dividend Rights
Subject to the rights of any other class or series of stock, including
preferred stock then outstanding having a preference as to dividends over the
Common Stock, holders of Common Stock are entitled to receive dividends out of
funds legally available therefor when, and if, declared by the Board of
Directors.
Voting Rights
Except for directors elected pursuant to any series of preferred stock,
the Board of Directors of the Registrant is classified into three classes. One
class is elected each year for a three-year term. This classification has no
impact on voting rights, as there is no cumulative voting. Holders of the Common
Stock are entitled to one vote for each share of Common Stock held on each
matter submitted to a vote of shareholders, including the election of directors.
Except for certain mergers, consolidations, sales, issuances (the
foregoing being called "Change of Control Events"), and liquidations as set
forth in Section 2 of Article VII of the Registrant's Amended and Restated
Certificate of Incorporation, as amended (the "Certificate"), the vote of a
majority of the shares outstanding may decide any matter brought before the
stockholders. Liquidations and dissolutions require (1) the affirmative vote of
the holders of at least 80% of the combined voting power of the then outstanding
shares of all classes and series of voting stock and (2) the affirmative vote of
a majority of Disinterested Stockholders (as defined herein), in each case
voting together as a single class. Reclassifications of securities (including
any reverse stock split) which have the effect of increasing the proportionate
share of the outstanding securities of any Interested Stockholder (as defined
herein) or any of its affiliates require the same vote as that for liquidations.
Change of Control Events which have not received the approval of a majority of
disinterested directors or met certain other conditions require the same
affirmative vote as for a liquidation.
A "Disinterested Stockholder" is any stockholder who is not an
"Interested Stockholder." An "Interested Stockholder" is any person who (a) is
the beneficial owner of 20% or more of the combined voting power of the then
outstanding shares of voting stock, (b) is an affiliate of the Registrant
(except for subsidiaries) and any time within two years prior to the date in
question held beneficial ownership of 20% of the combined voting power of the
then outstanding voting stock of the Registrant, or (c) is an assignee or has
succeeded to beneficial ownership of voting stock of the Registrant which was
held within two years immediately prior to the date in question by any
Interested Stockholder if such assignment or succession did not result from a
public distribution as set forth in the Certificate. An employee benefit plan of
the Registrant is not an Interested Stockholder notwithstanding that such plan
otherwise meets the definition.
Preemption Rights
Holders of the Common Stock have no preemptive rights to subscribe for
additional shares of Common Stock.
Liquidation Rights
Subject to the prior rights of creditors and holders of any series of
stock then outstanding having preference over the holders of Common Stock,
holders of Common Stock are entitled to share pro rata in the distribution of
any remaining assets in the event of liquidation, dissolution or winding up of
the Registrant.
Redemption
Subject to provisions creating any series of Preferred Stock, any class
of stock of the Registrant shall always be subject to redemption by the
Registrant by action of the Board of Directors if in its judgment such action
should be taken to prevent the loss or secure the restatement of any license or
franchise from any governmental agency, which license or franchise is
conditional upon some or all holders meeting certain prescribed qualifications.
Redemption would be at the Fair Market Value as defined in the Certificate.
Limitations as a Result of Preferred Stock
The Certificate authorizes the Registrant's Board of Directors to issue
up to an aggregate of 10,000,000 shares of Preferred Stock in one or more series
with such voting rights, liquidation preferences, dividend rights, repurchase
rights, conversion rights, redemption rights and terms and certain other rights
and preferences as shall be determined by the Board of Directors.
Series B Preferred Stock
One series of Preferred Stock is currently outstanding -- the Series B
Perpetual Preferred Stock (the "Series B Preferred Stock"). The Series B
Preferred Stock currently receives a preferential 15% pay-in-kind dividend. In
the event of a liquidation or dissolution, the holders of Series B Preferred
Stock are entitled to receive a preferential payment per share in an amount
equal to the greater of (1) $372.50 plus accrued but unpaid dividends and (2)
the amount the holder would have received if each share of Series B Preferred
Stock could have been converted into ten shares of Common Stock, subject to
adjustment in certain cases (the "Series B Preferential Payment").
The holders of Series B Preferred Stock have no voting rights except
those required by law. However, so long as the Series B Preferred Stock remains
outstanding, the Registrant must obtain the consent of a majority of the shares
of Series B Preferred Stock to do any of the following (each a "Restricted
Action"):
- authorize, create or issue any class or series, or any shares of any
class or series, of stock having any preference or priority over the
Series B Preferred Stock with respect to voting, dividends or upon
liquidation, dissolution or winding up of the Registrant ("Senior
Stock");
- authorize, create or issue any class or series, or any shares of any
class or series, of stock ranking equally with the Series B Preferred
Stock with respect to voting, dividends or upon redemption,
liquidation, dissolution or winding up of the Registrant ("Parity
Stock");
- reclassify any shares of capital stock of the Registrant into shares of
Senior Stock or Parity Stock;
- authorize the issuance of any security exchangeable for, convertible
into or evidencing the right to purchase any shares of Senior Stock or
Parity Stock;
- alter or change the rights, preferences or privileges of the Series B
Preferred Stock;
- increase or decrease the authorized number of shares of Series B
Preferred Stock or issue shares of Series B Preferred Stock other than
to holders of Series B Preferred Stock pursuant to its terms; or
- amend or waive a provision of the Registrant's Certificate in a manner
adverse in any material respect to the holders of the Series B
Preferred Stock.
Series C Preferred Stock
At a special meeting of stockholders held on March 12, 1999,
stockholders of the Registrant approved an exchange of the Series B Preferred
Stock for Series C Perpetual Convertible Preferred Stock (the "Series C
Preferred Stock"). This exchange will occur if the Registrant is notified by the
Office of the Comptroller of the Currency prior to June 30, 1999 that it does
not object to the exchange. The Series C Preferred Stock, if issued, will
receive a 9% pay-in-kind dividend. If issued, holders of the Series C Preferred
Stock will have a liquidation preference (the "Series C Preferential Payment")
equal to the greater of (1) the Conversion Value and (2) for a date prior to
December 9, 2005, the amount a holder would receive if all of his Owned Shares
and Dividend Shares had converted into Common Stock immediately prior to such
liquidation, and after December 9, 2005, an amount such holder would have
received if his Owned Shares had converted into Common Stock immediately prior
to liquidation. "Conversion Value" means $372.50 a share plus accrued and unpaid
dividends plus a premium amount designed to guarantee the holder a benefit of
seven years' worth of dividends at the 9% annual rate. "Owned Shares" are shares
of Series C Preferred Stock then owned by the holder. "Dividend Shares" are
shares of Series C Preferred Stock the holder would have received from the date
of liquidation through December 9, 2005.
So long as the initial purchasers of the Series C Preferred Stock or
their affiliates own at least 25% of the Series C Preferred Stock (or any Common
Stock issued upon conversion thereof), the holders of a majority of the shares
of Series C Preferred Stock will be entitled to elect four directors to the
Board of Directors, which Board will then consist of eleven directors. So long
as the initial purchasers or any of their affiliates own at least 10% but less
than 25% of the Series C Preferred Stock (or any Common Stock issued upon
conversion thereof), the holders of a majority of the Series C Preferred Stock
may elect one director to the Board of Directors. Directors elected by holders
of the Series C Preferred Stock will serve one year terms. With respect to a
vote on any other matter, each share of Series C Preferred Stock will entitle
its holder to cast the same number of votes he or she would have been able to
cast if such share was converted into Common Stock on the record date. In
addition, so long as any shares of Series C Preferred Stock remain outstanding,
the vote of holders of a majority of the outstanding shares of Series C
Preferred Stock would be necessary to take any Restricted Action, as outlined
above, for the Series B Preferred Stock (as if the words "Series C Preferred
Stock" were substituted for the words "Series B Preferred Stock"). In addition,
in the event of a default on any agreement or instrument governing more than
$20,000,000 of indebtedness remaining uncured for a period of sixty days, which
entitles the holder of such indebtedness to accelerate such indebtedness,
holders of a majority of the Series C Preferred Stock will be entitled to elect
the majority of the Board of Directors.
Series D Preferred Stock
The Registrant's Board of Directors has authorized 100,000 shares of
the Series D Junior Participating Convertible Preferred Stock (the "Series D
Preferred Stock"). There are currently no shares of such series issued. This
series is entitled to receive the same dividend as holders of Common Stock,
except in the case where holders of Common Stock receive voting securities. In
such case, holders shall receive a non-voting equivalent. Holders of Series D
Preferred Stock have no voting rights except as required by law. The series
provides for a liquidation preference of $.01 per share.
Change of Control
The super-majority vote requirements of the Registrant's Certificate,
as described above under Voting, could have an anti-takeover effect. These
provisions are designed to discourage an unsolicited takeover of the Registrant
if the Board of Directors determines that such takeover is not in the best
interests of the Registrant and its subsidiaries.
In addition, the terms of both the Series B Preferred Stock and the
Series C Preferred Stock could have an anti-takeover effect. Pursuant to the
terms of the Series B Preferred Stock, if there is a change of control of the
Registrant, the Registrant may redeem the Series B Preferred Stock at a price
equal to 101% of the Series B Preferential Payment. If the Registrant does not
do so, holders of the Series B Preferred Stock will receive additional shares of
such stock such that the number of shares equals the Series B Preferential
Payment divided by $372.50. At such time, all dividends must be paid in cash and
the Registrant will have to comply with certain additional covenants. Failure to
comply with such covenants will cause the dividend rate to increase to 18%.
If the Series B Preferred Stock is exchanged for the Series C Preferred
Stock, the terms of the Series C Preferred Stock could have an anti-takeover
effect as follows. At the time of the change of control, if the Registrant does
not redeem the shares of Series C Preferred Stock, then the dividend rate will
increase from 9% to 11.5%. All dividends become payable in cash. Certain
covenants will also be imposed which, if violated, will result in an increase in
the dividend rate to 13.5%. To redeem, the Registrant must pay the greater of
(1) the Series C Preferential Payment and (2) the amount the holders of Series C
Preferred Stock would have received had they converted all of their Owned Shares
into Common Stock and received the amount paid per share of Common Stock by the
acquiring person in the change of control.
The terms for both the Series B Preferred Stock and the Series C
Preferred Stock provide that after a Change of Control, holders of shares of
such stock may put such stock at the redemption prices set forth above to the
Registrant at any time after holders of senior notes under the Registrant's
Indenture dated November 7, 1997 have been paid in full.
The above discussion is a brief outline of the Common Stock and the
impact of other series of the Registrant's capital stock upon the rights of
holders of Common Stock. The discussion is qualified in its entirety by
reference to the Certificate, including the Certificate as amended by the
Certificate of Designation of the Series B Perpetual Preferred Stock and the
Certificate of Designation of the Series C Perpetual Convertible Preferred
Stock.
Item 2. Exhibits.
3.1 Amended and Restated Certificate of Incorporation of
the Corporation, as amended.
3.2 Amended and Restated Bylaws of the Company
(incorporated by reference to Exhibit 3.2 of the
Corporation's Annual Report on Form 10-K for the year
ended December 31, 1998 (File No. 1-12351)).
4.1 Certificate of Designation of Series B Perpetual
Preferred Stock (incorporated by reference to Exhibit
4.1 of the Corporation's Current Report on Form 8-K
dated December 22, 1998 (File No. 1-12351)).
4.2 Certificate of Designation of Series C Perpetual
Preferred Stock (incorporated by reference to Exhibit
4.2 of the Corporation's Current Report on Form 8-K
dated December 22, 1998 (File No. 1-12351)).
4.3 Certificate of Designation of Series D Participating
Convertible Preferred Stock (incorporated by
reference to Exhibit 4.3 of the Corporation's Current
Report on Form 8-K dated December 22, 1998 (File No.
1-12351)).
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
METRIS COMPANIES INC.
(Registrant)
By: /s/ David D. Wesselink
David D. Wesselink, Executive Vice
President and Chief Financial Officer
Dated: April 23, 1999
<PAGE>
EXHIBIT LIST
3.1 Amended and Restated Certificate of Incorporation of the Corporation,
as amended.
3.2 Amended and Restated Bylaws of the Company (incorporated by reference
to Exhibit 3.2 of the Corporation's Annual Report on
Form 10-K for the year ended December 31, 1998 (File No. 1-12351)).
4.1 Certificate of Designation of Series B Perpetual Preferred Stock
(incorporated by reference to Exhibit 4.1 of the Corporation's Current
Report on Form 8-K dated December 22, 1998 (File No. 1-12351)).
4.2 Certificate of Designation of Series C Perpetual Preferred Stock
(incorporated by reference to Exhibit 4.2 of the Corporation's Current
Report on Form 8-K dated December 22, 1998 (File No. 1-12351)).
4.3 Certificate of Designation of Series D Participating Convertible
Preferred Stock (incorporated by reference to Exhibit 4.3 of the
Corporation's Current Report on Form 8-K dated December 22, 1998
(File No. 1-12351)).
CERTIFICATE OF AMENDMENT
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
METRIS COMPANIES INC.
Pursuant to Section 242
of the General Corporation Law
of the State of Delaware
Pursuant to Section 242 of the General Corporation Law of the
State of Delaware, Metris Companies Inc., a Delaware corporation (the
"Corporation"), DOES HEREBY CERTIFY:
1. That Sections 1 and 2 of Article III of the Corporation's
Amended and Restated Certificate of Incorporation (the "Certificate") are hereby
deleted and Article III is hereby amended to read in its entirety as follows:
The purpose of the Corporation is to engage in any lawful act
or activity and to exercise any powers permitted to corporations under
the General Corporation Law of Delaware.
2. That Article XIII of the Certificate is hereby deleted in
its entirety.
3. That, in accordance with Section 242(b) of the General
Corporation Law of the State of Delaware, the Board of Directors of the
Corporation has duly adopted a resolution approving the foregoing amendment to
the Certificate (the "Amendment") and directing that the Amendment be submitted
to the holders of the outstanding capital stock of the Corporation entitled to
vote thereon for its consideration and approval.
4. That, in accordance with Section 242(b) of the General
Corporation Law of the State of Delaware, the Amendment has been duly approved
by the affirmative vote of the holders of a majority of the outstanding capital
stock of the Corporation entitled to vote thereon.
IN WITNESS WHEREOF, the Corporation has caused this
Certificate of Amendment to be duly executed and acknowledged this 24th day of
March, 1999.
METRIS COMPANIES INC.
By: /s/Z. Jill Barclift
Z. Jill Barclift
Secretary
<PAGE>
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
METRIS COMPANIES INC.
(adopted in accordance with Sections 245 and 242
of the General Corporation Law of the State of Delaware)
ARTICLE I
Name
The name of the Corporation is Metris Companies Inc.
ARTICLE II
Registered Office and Registered Agent
The address of the Corporation's registered office in the State of
Delaware is 1013 Centre Road, in the City of Wilmington, New Castle County. The
name of its registered agent at such address is The Prentice-Hall Corporation
System, Inc.
ARTICLE III
Purpose
SECTION 1. Permitted Activities. The purpose of the
Corporation is to engage in any business, and in any activity and to exercise
any powers permitted to corporations under the General Corporation Law of the
State of Delaware except as set forth in this Section 1 of Article III. At any
time prior to the date immediately following the third annual meeting of
stockholders to be held after FCI no longer beneficially owns in the aggregate
50% or more of the combined Voting Power of the then outstanding shares of
Voting Stock, the Corporation shall not, without the consent of FCI, directly or
indirectly (through a Subsidiary of the Corporation or any other person
controlled by the Corporation or its Subsidiaries or controlled persons by
contract, lease or other arrangement) for its own account or that of another,
engage in managing, selling, distributing, marketing, administering, leasing or
otherwise providing products or services other than the financial products and
services listed in the following paragraphs (a) through (l):
(a) general purpose payment cards including without
limitation bank credit cards, secured bank credit cards, prepaid cards,
debit cards, co-branded cards, and affinity bank credit cards;
(b) extended service plans and warranties;
(c) credit card registration;
(d) car buying services, shopping club memberships and dining
club memberships;
(e) insurance products; provided, however, that the
Corporation shall not offer any insurance product within the Fingerhut
Corporation closed-end installment loan coupon book or any credit
insurance that is directly tied to a revolving credit balance owed
directly to Fingerhut Corporation, its wholly owned subsidiaries or the
wholly owned subsidiaries of Fingerhut Companies, Inc., other than the
Corporation;
(f) mailing lists and other lists of prospects for
solicitation;
(g) advertising on or accompanying monthly billing statements
sent to customers of the Corporation;
(h) tax preparation services;
(i) investment products and services including without
limitation deposit products, certificates of deposit, annuities, and
mutual funds;
(j) investment and other brokerage services;
(k) consumer loans and leases including without limitation
mobile home financing, automobile lending and leasing, equity loans and
mortgages, and student loans; provided, however, that the Corporation
shall not offer any closed end installment or revolving credit loans to
Fingerhut Corporation customers for the exclusive purchase of Fingerhut
Corporation merchandise; and
(l) mail-grams, travelers checks, money orders, and travel
services.
SECTION 2. Other Activities Authorized by Shareholders. In
addition to the activities permitted under Section 1 of this Article [III], the
Corporation may engage in any business or activity authorized by the affirmative
vote of a majority of the combined Voting Power of the then outstanding shares
of all classes and series of Voting Stock voting together as a single class. No
person shall be liable for breach of any fiduciary duty, as a stockholder of the
Corporation or controlling person of a stockholder or otherwise, by reason of
such person authorizing, or not authorizing, the Corporation to engage in any
business or activity.
ARTICLE IV
Authorized Shares
SECTION 1. Number of Shares. The total number of shares of all
classes of stock which the Corporation shall have authority to issue is
110,000,000 shares, consisting of 100,000,000 shares of Common Stock with par
value $.01 per share ("Common Stock"), and 10,000,000 shares of Preferred Stock
with par value $.01 per share ("Preferred Stock").
SECTION 2. Dividends. Subject to the provisions of law and the
rights of the Preferred Stock and any other class or series of stock then
outstanding having a preference as to dividends over the Common Stock, dividends
may be paid on the Common Stock at such times and in such amounts as the Board
of Directors shall determine.
SECTION 3. Relative Rights of Shareholders. Upon the
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, after any preferential amounts to be distributed to the holders of
the Preferred Stock and any other class or series of stock then outstanding
having a preference over the Common Stock have been paid or declared and set
apart for payment, the holders of the Common Stock shall be entitled to receive
all of the remaining assets of the Corporation available for distribution to its
stockholders.
SECTION 4. Rights and Terms of Preferred Stock. The Board of
Directors is hereby authorized to provide, out of the unissued shares of
Preferred Stock, for one or more series of Preferred Stock. Before any shares of
any such series are issued, the Board of Directors shall fix, and hereby is
expressly empowered to fix, by the adoption and filing in accordance with the
Delaware General Corporation Law of an amendment or amendments to this
Certificate of Incorporation, the terms of such Preferred Stock or series of
Preferred Stock, including the following terms:
(a) the designation of such series, the number of shares to
constitute such series and the stated value thereof if different from
the par value thereof;
(b) whether the shares of such series shall have voting
rights, in addition to any voting rights provided by law, and, if so,
the terms of such voting rights, which may be special, conditional or
limited or no voting rights except as required by law;
(c) the dividends, if any, payable on such series, whether any
such dividends shall be cumulative, and, if so, from what dates, the
conditions and dates upon which such dividends shall be payable, the
preference or relation which such dividends shall bear to the dividends
payable on any shares of stock of any other class or any other series
of Preferred Stock;
(d) whether the shares of such series shall be subject to
redemption by the Corporation and, if so, the times, prices and other
conditions of such redemption;.
(e) the amount or amounts payable upon shares of such series
upon, and the rights of the holders of such series in, the voluntary or
involuntary liquidation, dissolution or winding up, or upon any
distribution of the assets, of the Corporation;
(f) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and
manner in which any such retirement or sinking fund shall be applied to
the purchase or redemption of the shares of such series for retirement
or other corporate purposes and the terms and provisions relative to
the operation thereof;
(g) whether the shares of such series shall be convertible
into, or exchangeable for, shares of stock of any other class or any
other series of Preferred Stock or any other securities (whether or not
issued by the Corporation) or other property and, if so, the price or
prices or the rate or rates of conversion or exchange and the method,
if any, of adjusting the same, and any other terms and conditions of
conversion or exchange;
(h) the limitations and restrictions, if any, to be effective
while any shares of such series are outstanding upon the payment of
dividends or the making of other distributions on, and upon the
purchase, redemption or other acquisition by the Corporation of, the
Common Stock or shares of stock of any other class or any other series
of Preferred Stock;
(i) the conditions or restrictions, if any, upon the creation
of indebtedness of the Corporation or upon the issuance of any
additional stock, including additional shares of such series or of any
other series of Preferred Stock or of any other class of stock; and
(j) any other powers, preferences and relative participating,
optional and other special rights, and any qualifications, limitations
and restrictions thereof.
Except to the extent otherwise expressly required by law, (i) no share of
Preferred Stock shall have any voting rights other than those which shall be
fixed by the Board of Directors pursuant to this Section 4 and (ii) no share of
Common Stock shall have any voting rights with respect to an amendment to the
terms of any series of Preferred Stock; provided, however, that in the case of
this clause (ii) the terms of such series of Preferred Stock, as so amended,
could have been established without any vote of any shares of Common Stock.
SECTION 5. Redemption Related to License or Franchise.
Notwithstanding any other provision of these Restated Articles of Incorporation
to the contrary, but subject to the provisions of an amendment or amendments
adopted pursuant to this Article IV creating any series of Preferred Stock or
any other class or series of stock having a preference over the Common Stock as
to dividends or upon liquidation, outstanding shares of Common Stock, Preferred
Stock or any other class or series of stock of the Corporation shall always be
subject to redemption by the Corporation, by action of the Board of Directors,
if in the judgment of the Board of Directors such action should be taken,
pursuant to any applicable provision of law, to the extent necessary to prevent
the loss or secure the reinstatement of any license or franchise from any
governmental agency held by the Corporation or such Subsidiary to conduct any
portion of the business of the Corporation or such Subsidiary (as defined
herein), which license or franchise is conditional upon some or all of the
holders of the Corporation's stock of any class or series possessing prescribed
qualifications. The terms and conditions of such redemption shall be as follows:
(a) the redemption price of the shares to be redeemed pursuant
to this Section 5 shall be equal to the Fair Market Value (as defined
herein) of such shares;
(b) the redemption price of such shares may be paid in cash,
Redemption Securities (as defined herein) or any combination thereof;
(c) if less than all the shares held by Disqualified Holders
(as defined herein) are to be redeemed, the shares to be redeemed shall
be selected in such manner as shall be determined by the Board of
Directors, which may include selection first of the most recently
purchased shares thereof, selection by lot or selection in any other
manner determined by the Board of Directors;
(d) at least 30 days' written notice of the Redemption Date
shall be given to the record holders of the shares selected to be
redeemed (unless waived in writing by such holder), provided that the
Redemption Date may be the date on which written notice shall be given
to record holders if the cash or Redemption Securities necessary to
effect the redemption shall have been deposited in trust for the
benefit of such record holders and subject to immediate withdrawal by
them upon surrender of the stock certificates for their shares to be
redeemed;
(e) from and after the Redemption Date, any and all rights of
whatever nature, which may be held by the owners of shares selected for
redemption (including without limitation any rights to vote or
participate in dividends declared on stock of the same class or series
as such shares), shall cease and terminate and they shall henceforth be
entitled only to receive the cash or Redemption Securities payable upon
redemption; and
(f) such other terms and conditions as the Board shall
determine.
For purposes of this Section 5:
(i) "Disqualified Holder" shall mean any holder of shares of
stock of the Corporation of any class or series whose holding of such
stock may result in the loss of any license or franchise from any
governmental agency held by the Corporation or any Subsidiary to
conduct any portion of the business of the Corporation or any
Subsidiary.
(ii) "Redemption Date" shall mean the date fixed by the Board
of Directors for the redemption of any shares of stock of the
Corporation pursuant to this Section 5.
(iii) "Redemption Securities" shall mean any debt or equity
securities of the Corporation, any Subsidiary or any other corporation,
or any combination thereof, having such terms and conditions as shall
be approved by the Board of Directors and which, together with any cash
to be paid as part of the redemption price, in the opinion of any
nationally recognized investment banking firm selected by the Board of
Directors (which may be a firm which provides other investment banking,
brokerage or other services to the Corporation), has a value, at the
time notice of redemption is given pursuant to paragraph (d) of this
Section 5, at least equal to the Fair Market Value of the shares to be
redeemed pursuant to this Section 5 (assuming, in the case of
Redemption Securities to be publicly traded, such Redemption Securities
were fully distributed and subject only to normal trading activity).
SECTION 6. Assessability. Upon receipt by the Corporation of
the consideration for which the Board of Directors authorized the issuance of
stock, the stock issued therefor shall be fully paid and nonassessable.
SECTION 7. Subscription Rights. No holder of stock of the
Corporation shall, as such holder, have any right to purchase or subscribe for
any shares of stock of the corporation of any class, now or hereafter
authorized, or any obligations or instruments which the corporation may issue or
sell that shall be convertible into or exchangeable for or entitle the holders
thereof to subscribe for or purchase any shares of stock of the Corporation of
any class, now or hereafter authorized, other than such rights, if any, as the
Board of Directors, in its sole discretion, may determine.
ARTICLE V
Term of Directors and Vacancy on Board
SECTION 1. Term of Director. Except as otherwise provided by
the terms of any series of Preferred Stock or any other securities of the
Corporation, the number of directors of the Corporation shall be fixed from time
to time by or pursuant to the By-laws of the Corporation. Prior to the Threshold
Time (as defined in Article VII), the term of each director of the Corporation
shall expire at the next annual meeting of stockholders following such
director's election and until such director's successor shall have been elected
and qualified. The election of directors need not be by written ballot.
SECTION 2. Vacancy. Except as otherwise provided by the terms
of any series of Preferred Stock or any other securities of the Corporation,
newly created directorships resulting from any increase in the number of
directors may be filled by the Board of Directors, or as otherwise provided in
the By-laws, and any vacancies on the Board of Directors resulting from death,
resignation, removal or other cause shall only be filled by the affirmative vote
of a majority of the remaining directors then in office, even though less than a
quorum of the Board of Directors, or by a sole remaining director, or as
otherwise provided in the By-laws.
ARTICLE VI
Provisions of By-Laws
The Board of Directors of the Corporation shall have the
power, without the assent or vote of the stockholders, to adopt, repeal, alter
or amend the By-laws of the Corporation pursuant to a resolution adopted by the
vote of a majority of the entire Board of Directors including, without
limitation, provisions governing the conduct of, and the matters which may
properly be brought before, meetings of the stockholders and provisions
specifying the manner and extent to which prior notice shall be given of the
submission of proposals to be submitted at any meeting of stockholders or of
nominations or elections of directors to be held at any such meeting.
ARTICLE VII
Provisions Relating to Threshold Time
SECTION 1. Threshold Time. The provisions of Sections 2, 3, 4
and 5 of this Article VII shall become effective at such time, but only from and
after such time (the "Threshold Time"), as the Permitted Stockholder and
Permitted Transferees, taken together, shall no longer beneficially own in the
aggregate 51% or more of the combined Voting Power (as defined herein) of the
then outstanding shares of Voting Stock (as defined herein) and shall continue
to be effective from and after the Threshold Time. The term "Permitted
Stockholder" shall mean FCI or any subsidiary of FCI. The term "Permitted
Transferee"shall mean each of the following:
(a) a trust or trustee, guardian, custodian or similar entity
established or acting for the benefit of the Permitted Stockholder;
(b) any corporation or other entity 100% of the voting stock
(or equivalent interests) of which is owned, directly or indirectly, by
the Permitted Stockholder and/or any other person or entity referred to
in clause (a); and
(c) a trust or trustee, guardian, custodian or similar entity
established or acting for the benefit of any person or entity referred
to in clause (b).
SECTION 2. Change in Control. (a) In addition to any
affirmative vote required by law or by this Amended and Restated Certificate of
Incorporation or the terms of any series of Preferred Stock or any other
securities of the Corporation, and except as otherwise expressly provided in
subsection (c) of this Section 2:
(i) any merger or consolidation of the Corporation with (1)
any Interested Stockholder or (2) any other corporation (whether or not
it is itself an Interested Stockholder) which is, or after such merger
or consolidation would be, an Affiliate or Associate (as defined
herein) of an Interested Stockholder (as defined herein); or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to
or with any Interested Stockholder or any Affiliate or Associate of any
Interested Stockholders of (1) all or substantially all the assets of
the Corporation or (2) assets of the Corporation or any of its
Subsidiaries representing in the aggregate more than 75% of the total
value of the assets of the Corporation and its consolidated
Subsidiaries as reflected on the most recent consolidated balance sheet
of the Corporation and its consolidated Subsidiaries prepared in
accordance with generally accepted accounting principles then in
effect; or
(iii) (1) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of
transactions) to or with any Interested Stockholder or any Affiliate or
Associate of any Interested Stockholder of any assets of the
Corporation or of any Subsidiary of the Corporation having an aggregate
Fair Market Value of $10,000,000 or more, but less than the amount
referred to in clause (2) of paragraph (ii) of this subsection (a), or
(2) any merger or consolidation of any Subsidiary of the Corporation
having assets with an aggregate Fair Market Value of $10,000,000 or
more in a transaction not covered by paragraph (ii) of this subsection
(a) with (x) any Interested Stockholder or (y) any other corporation
(whether or not it is itself an Interested Stockholder) which is, or
after such merger or consolidation would be, an Affiliate or Associate
of an Interested Stockholder; or
(iv) the issuance or transfer by the Corporation or any
Subsidiary of the Corporation (in one transaction or a series of
transactions) to any Interested Stockholder or any Affiliate or
Associate of any Interested Stockholder of any securities of the
Corporation or any Subsidiary of the Corporation in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate Fair Market Value of $10,000,000 or more, other than the
issuance of securities upon the conversion of convertible securities of
the Corporation or any Subsidiary of the Corporation which were not
acquired by such Interested Stockholder (or such Affiliate or
Associate) from the Corporation or a Subsidiary of the Corporation; or
(v) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation proposed by or on behalf of any
Interested Stockholder or any Affiliate or Associate of any Interested
Stockholder; or
(vi) any reclassification of securities (including any reverse
stock split) or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries, or any
other transaction (whether or not with or into or otherwise involving
any Interested Stockholder), which in any such case has the effect,
directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class or series of stock or securities
convertible into stock of the Corporation or any Subsidiary of the
Corporation which is directly or indirectly beneficially owned by any
Interested Stockholder or any Affiliate or Associate of any Interested
Stockholder;
shall not be consummated without (1) the affirmative vote of the holders of at
least 80% of the combined Voting Power of the then outstanding shares of all
classes and series of Voting Stock and (2) the affirmative vote of a majority of
the combined Voting Power of the then outstanding shares of all classes and
series of Voting Stock held by Disinterested Stockholders (as defined herein),
in each case voting together as a single class. Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law or by this Certificate of Incorporation or
the terms of any series of Preferred Stock or any other securities of the
Corporation or in any agreement with any national securities exchange or
otherwise.
(b) The term "Business Combination" as used in this Section 2
shall mean any transaction which is referred to in any one or more of paragraphs
(i) through (vi) of subsection (a) of this Section 2.
(c) The provisions of subsection (a) of this Section 2 shall
not be applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required by law and
any other provision of this Certificate of Incorporation and the terms of any
series of Preferred Stock or any other securities of the Corporation, if all the
conditions specified in any of the following paragraphs (i), (ii),(iii) or (iv)
are met:
(i) (1) such Business Combination shall have been approved by
a majority of the Disinterested Directors (as defined herein) and (2)
the Interested Stockholder involved in such Business Combination has
(x) acquired such status as an Interested Stockholder in a manner
substantially consistent with an agreement or memorandum of
understanding approved by the Board of Directors prior to the time such
Interested Stockholder became an Interested Stockholder and (y)
complied with all requirements imposed by such agreement or memorandum
of understanding; or
(ii) in the case of any Business Combination described in
paragraph (i) of subsection (a) of this Section 2, (1) such Business
Combination shall have been approved by a majority of the Disinterested
Directors, (2) such Business Combination shall not have resulted,
directly or indirectly, in an increase of more than 10% in the total
amount of shares of any class or series of stock or securities
convertible into stock of the Corporation or any Subsidiary which was
directly or indirectly beneficially owned by any Interested Stockholder
and all Affiliates and Associates of such Interested Stockholder at the
time of the approval of such Business Combination by a majority of the
Disinterested Directors, and (3) such Business Combination shall not
have been consummated within a period of two years after the
consummation of any other Business Combination described in paragraph
(i), (ii), (iii), (iv), (v) or (vi) of subsection (a) of this Section 2
(whether or not such other Business Combination shall have been
approved by a majority of the Disinterested Directors) which had the
effect, directly or indirectly, of increasing the proportionate share
of the outstanding shares of any class or series of stock or securities
convertible into stock of the Corporation or any Subsidiary of the
Corporation which was directly or indirectly beneficially owned by such
Interested Stockholder or any Affiliate or Associate of such Interested
Stockholder; or
(iii) in the case of any Business Combination described in
paragraph (iii), (iv) or (vi) of subsection (a) of this Section 2, such
Business Combination shall have been approved by a majority of the
Disinterested Directors; or
(iv) all of the six conditions specified in the following
clauses (1) through (6) shall have been met:
(1) the transaction constituting the Business
Combination shall provide for a consideration to be received
by holders of each then existing class of Common Stock in
exchange for all their shares of each class of Common Stock,
and the aggregate amount of the cash and the Fair Market Value
as of the date of the consummation of the Business Combination
of any consideration other than cash to be received per share
by holders of each class of Common Stock in such Business
Combination shall be at least equal to the highest of the
following:
(A) (if applicable) the highest per share
price (including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid in order to
acquire any shares of the particular class of Common
Stock in question beneficially owned by the
Interested Stockholder which were acquired (i) within
the two-year period immediately prior to the
Announcement Date or (ii) in the transaction in which
it became an Interested Stockholder, whichever is
higher; and
(B) the Fair Market Value per share of the
class of Common Stock in question on the Announcement
Date (as defined herein) or on the Determination Date
(as defined herein), whichever is higher; and
(2) if the transaction constituting the Business
Combination shall provide for a consideration to be received
by holders of any class or series of outstanding Voting Stock
other than Common Stock, the aggregate amount of the cash and
the Fair Market Value as of the date of the consummation of
the Business Combination of any consideration other than cash
to be received per share by holders of shares of such Voting
Stock shall be at least equal to the highest of the following
(the requirements of this clause (iv) (2) must be met with
respect to every class and series of such outstanding Voting
Stock, whether or not the Interested Stockholder beneficially
owns any shares of a particular class or series of Voting
Stock):
(A) (if applicable) the highest per share
price (including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid in order to
acquire any shares of such class or series of Voting
Stock beneficially owned by the Interested
Stockholder which were acquired (i) within the
two-year period immediately prior to the Announcement
Date or (ii) in the transaction in which it became an
Interested Stockholder, whichever is higher;
(B) (if applicable) the highest preferential
amount per share to which the holders of shares of
such class or series of Voting Stock are entitled in
the event of any voluntary or involuntary
liquidation, dissolution or winding up of the
Corporation; and
(C) the Fair Market Value per share of such
class or series of Voting Stock on the Announcement
Date or on the Determination Date, whichever is
higher; and
(3) the consideration to be received by holders of a
particular class or series of outstanding Voting Stock
(including any class of Common Stock) shall be in cash or in
the same form as was previously paid in order to acquire
shares of such class or series of Voting Stock which are
beneficially owned by the Interested Stockholder and, if the
Interested Stockholder beneficially owns shares of any class
or series of Voting Stock which were acquired with varying
forms of consideration, the form of consideration to be
received by holders of such class or series of Voting Stock
shall be either cash or the form used to acquire the largest
number of shares of such class or series of Voting Stock
beneficially owned by it; the prices determined in accordance
with clauses (1) and (2) of this paragraph (iv) shall be
appropriately adjusted in the event of any stock dividend,
stock split or subdivision or combination of shares or any
similar event; and
(4) after such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such
business Combination:
(A) except as approved by a majority of the
Disinterested Directors, there shall have been no
failure to declare and pay at the regular dates
therefor the full amount of any dividends (whether or
not cumulative) payable on the Preferred Stock or any
class or series of stock having a preference over the
Common Stock as to dividends or upon liquidation;
(B) there shall have been (x) no reduction
in the annual rate of dividends paid on any class of
Common Stock (except as necessary to reflect any
subdivision of such class of Common Stock), except as
approved by a majority of the Disinterested
Directors, and (y) an increase in such annual rate of
dividends (as necessary to prevent any such
reduction) in the event of any reclassification
(including any reverse stock split),
recapitalization, reorganization or any similar
transaction which has the effect of reducing the
number of outstanding shares of the Common Stock,
unless the failure so to increase such annual rate is
approved by a majority of the Disinterested
Directors; and
(C) such Interested Stockholder shall not
have become the beneficial owner of any additional
shares of Voting Stock except as part of the
transaction in which it became an Interested
Stockholder; and
(5) after such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not
have received the benefit, directly or indirectly (except
proportionately as a stockholder) of any loan, advance,
guarantee, pledge or other arrangement provided by the
Corporation or any Subsidiary, whether in anticipation of or
in connection with such Business Combination or otherwise; and
(6) a proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934 (the
"Exchange Act") and the rules and regulations thereunder (or
any subsequent provisions replacing such Act, rules or
regulations) shall be mailed to public stockholders of the
Corporation at least 30 days prior to the consummation of such
Business Combination (whether or not such proxy or information
statement is required to be mailed pursuant to such Act or
subsequent provisions).
(d) A majority of the Disinterested Directors of the
Corporation shall have the power and duty to determine, on the basis of
information known to them after reasonable inquiry, all facts necessary to
determine compliance with this Section 2, including, without limitation, (i)
whether a person is an Interested Stockholder, (ii) the number of shares of each
class or series of Voting Stock beneficially owned by any person, (iii) whether
a person is an Affiliate or Associate of another person, (iv) whether the
requirements of subsection (c) of this Section 2 have been met with respect to
any Business Combination and (v) whether the assets which are the subject of any
Business Combination have, or the consideration to be received for the issuance
or transfer of securities by the Corporation or any Subsidiary of the
Corporation in any Business Combination has, an aggregate Fair Market Value of
$10,000,000 or more or whether such assets or consideration, as the case may be,
represent in the aggregate more than 75% of the total value of the assets of the
Corporation and its consolidated Subsidiaries as reflected on the most recent
consolidated balance sheet of the Corporation and its consolidated Subsidiaries
prepared in accordance with generally accepted accounting principles then in
effect; and the good faith determination of a majority of the Disinterested
Directors on such matters shall be conclusive and binding for all purposes of
this Section 2.
(e) Nothing contained in this Section 2 shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by law.
SECTION 3. Staggered Board. (a) The directors of the
Corporation, other than those who may be elected pursuant to the terms of any
series of Preferred Stock or any other securities of the Corporation, shall be
classified, with respect to the time for which they severally hold office, into
three classes, as nearly equal in number as possible, as shall be provided in
the By-laws of the Corporation, one class whose term expires at the first annual
meeting of stockholders to be held after the Threshold Time, another class whose
term expires at the second annual meeting of stockholders to be held after the
Threshold Time, and another class whose term expires at the third annual meeting
of stockholders to be held after the Threshold Time, with each class to hold
office until its successors are elected and qualified. The classes shall be
initially comprised of directors serving on the Board of Directors at the
Threshold Time, and the membership of each class shall be initially determined
by the Board of Directors at such time. At each annual meeting of the
stockholders of the Corporation, the date of which shall be fixed by or pursuant
to the By-laws of the Corporation, the successors of the class of directors
whose term expires at that meeting shall be elected to hold office for a term
expiring at the annual meeting of stockholders held in the third year following
the year of their election. No decrease in the number of directors constituting
the Board of Directors shall shorten the term of any incumbent director. Any
director elected to fill a newly created directorship or any vacancy on the
Board of Directors resulting from any death, resignation, removal or other cause
shall hold office for the remainder of the full term of the class of directors
in which the new directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified.
(b) Except as otherwise provided by the terms of any series of
Preferred Stock or any other securities of the Corporation, any director of the
Corporation may be removed from office only for cause and only by the
affirmative vote of the holders of a majority of the combined Voting Power of
the then outstanding shares of Voting Stock, voting together as a single class.
For purposes of this subsection (b), "cause" shall mean the willful and
continuous failure of a director to substantially perform such director's duties
to the Corporation (other than any such failure resulting from incapacity due to
physical or mental illness) or the willful engaging by a director in gross
misconduct materially and demonstrably injurious to the Corporation.
SECTION 4. Special Meetings. Subject to the terms of any
series of Preferred Stock or any other securities of the Corporation, special
meetings of stockholders of the Corporation may be called only by the Board of
Directors pursuant to a resolution approved by a majority of the entire Board of
Directors or as otherwise provided in the By-laws of the Corporation.
SECTION 5. Amendments of Certificate. In addition to any
requirements of law and any other provisions of this Certificate of
Incorporation or the terms of any series of Preferred Stock or any other
securities of the Corporation (and notwithstanding the fact that a lesser
percentage may be specified by law, this Certificate of Incorporation or the
terms of any series of Preferred Stock or any other securities of the
Corporation), the affirmative vote of (i) the holders of 80% or more of the
combined Voting Power of the then outstanding shares of Voting Stock and (ii) a
majority of the combined Voting Power of the then outstanding shares of Voting
Stock held by the Disinterested Stockholders, in each case voting together as a
single class, shall be required to amend, alter or repeal, or adopt any
provision inconsistent with, this Article VII or Article VIII insofar as the
definitions set forth in Article VIII relate to this Article VII.
ARTICLE VIII
Certain Definitions
For purposes of this Certificate of Incorporation:
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date this Certificate of Incorporation are
filed.
"Announcement Date" shall mean the date of first public
announcement of the proposed Business Combination.
A person shall be a "beneficial owner" of any Voting Stock or
other security or interest:
(a) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(b) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise,
or (ii) the right to vote or to direct the vote pursuant to any
agreement, arrangement or understanding; or
(c) which are beneficially owned, directly or indirectly, by
any other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares of
Voting Stock or such other security or interest.
"Determination Date" means the date on which the Interested
Stockholder became an Interested Stockholder.
"Disinterested Director" means any member of the Board of
Directors of the Corporation who is unaffiliated with, and not a nominee of, an
Interested Stockholder or any Affiliate or Associate of such Interested
Stockholder and was a member of the Board of Directors prior to the time that
such Interested Stockholder became an Interested Stockholder, and any successor
of a Disinterested Director who is unaffiliated with, and not a nominee of, an
Interested Stockholder or any Affiliate or Associate of such Interested
Stockholder and who is recommended for election or elected to succeed a
Disinterested Director by a majority of Disinterested Directors then on the
Board of Directors.
"Disinterested Stockholder" shall mean a stockholder of the
Corporation who is not an Interested Stockholder or an Affiliate or an Associate
of an Interested Stockholder.
"Equity Interest" shall mean (i) in the case of a corporation,
capital stock, beneficially owned directly or indirectly, representing any
portion of, or, where a specified percentage of Equity Interest is referred to,
the specified percentage of, either (x) the total common equity of such
corporation or (y) the total outstanding Voting Power in respect of the election
of directors and (ii) in the case of a partnership or other person, partnership
or other ownership interests, beneficially owned directly or indirectly,
representing any portion of, or, where a specified percentage of Equity Interest
is referred to, the specified percentage of, either (x) the total partnership or
other ownership interests in such partnership or other person or (y) the total
outstanding Voting Power in respect of any matter submitted to a vote of all
partners or other owners.
"Fair Market Value" means: (a) in the case of stock, the
highest closing sale price during the 30-day period immediately preceding the
date in question of a share of such stock as reported in the consolidated
transaction reporting system for the principal United States securities exchange
registered under the Exchange Act on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing sales price or bid
quotation with respect to a share of such stock during the 30-day period
preceding the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then in use, or, if no
such quotations are available, the fair market value on the date in question of
a share of such stock as determined by a majority of the Disinterested Directors
in good faith; and (b) in the case of stock of any class or series which is not
traded on any securities exchange or in the over-the-counter market or in the
case of property other than cash or stock, the fair market value of such stock
or property, as the case may be, on the date in question as determined by a
majority of the Disinterested Directors in good faith.
"Interested Stockholder" shall mean any person who or which:
(a) is the beneficial owner, directly or indirectly, of 20% or
more of the combined Voting Power of the then outstanding shares of
Voting Stock; or
(b) is an Affiliate of the Corporation and at any time within
the two-year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of 20% or more of the
combined Voting Power of the then outstanding shares of Voting Stock;
or
(c) is an assignee of or has otherwise succeeded to the
beneficial ownership of any shares of Voting Stock which were at any
time within the two-year period immediately prior to the date in
question beneficially owned by any Interested Stockholder, if such
assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering
within the meaning of the Securities Act of 1933 or other public
distribution regardless of whether registered under such Act.
Notwithstanding the foregoing, "Interested Stockholder" shall
not include:
(a) the Corporation or any Subsidiary of the Corporation;
(b) any employee benefit plan of the Corporation or of any
Subsidiary of the Corporation or any person holding any class or series
of Voting Stock for or pursuant to the terms of any such employee
benefit plan;
(c) the Permitted Stockholder or any Permitted Transferee; or
(d) any transferee of the Permitted Stockholder or a Permitted
Transferee that would not absent such transfer be an Interested
Stockholder.
For the purposes of determining whether a person is an
Interested Stockholder, the number of shares of Voting Stock deemed to be
outstanding shall include shares of which such person is the beneficial owner as
defined in this Article VIII but shall not include any other shares of Voting
Stock which may be issuable to other persons pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion rights, exchange
rights, warrants or options, or otherwise.
A "person" shall mean any individual, firm, corporation,
partnership, trust or other entity.
"Subsidiary" shall mean a person, a majority of the total
outstanding Voting Power of which is owned, directly or indirectly, by another
person or by one or more other Subsidiaries of such other person or by such
person and one or more other Subsidiaries of such other person; provided,
however, that for the purposes of the definition of Interested Stockholder set
forth in this Article VIII, the term "Subsidiary" shall mean only a person, a
majority the total outstanding Voting Power of which is owned by the
Corporation, by a Subsidiary of the Corporation or by the Corporation and one or
more of its Subsidiaries.
"Voting Power", when used with reference to the capital stock
of, or units of equity interests in, any person, shall mean the power under
ordinary circumstances (and not merely as a result of the occurrence of a
contingency) to vote in the election of directors of such person (if such person
is a corporation) or to participate in the management and control of such person
(if such person is not a corporation).
"Voting Stock" means capital stock of the Corporation of all
classes and series entitled to vote generally in the election of directors of
the Corporation.
ARTICLE IX
Amendments
Subject to the provisions of this Certificate of Incorporation
(including Section 5 of Article VII, Section 3 of Article X, and Section 2 of
Article XII) the Corporation reserves the right to amend, alter or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by the laws of Delaware, and all rights and powers
conferred on directors and stockholders herein are granted subject to this
reservation.
ARTICLE X
Director Liability and Indemnification
SECTION 1. No Liability. To the fullest extent that the
Delaware General Corporation Law as it exists on the date hereof or as it may
hereafter be amended permits the limitation or elimination of the liability of
directors, no director of the Corporation shall be liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director. No amendment to this Certificate of Incorporation, directly or
indirectly by merger, consolidation or otherwise, having the effect of amending,
altering, changing or repealing any of the provisions of this Section 1 shall
apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment or repeal, unless such amendment
shall have the effect of further limiting or eliminating such liability.
SECTION 2. Indemnification. (a) The Corporation shall, to the
fullest extent permitted by applicable law as then in effect, indemnify any
person (the "indemnitee") who was or is involved in any manner (including,
without limitation, as a party or a witness) or was or is threatened to be made
so involved in any threatened, pending or completed investigation, claim,
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including, without limitation, any action, suit or proceeding by
or in the right of the Corporation to procure a judgment in its favor) (a
"proceeding") by reason of the fact that he is or was a director or officer of
the Corporation, or is or was serving at the request of the Corporation as a
director or officer of another corporation, or of a partnership, joint venture,
trust or other enterprise (including, without limitation, service with respect
to any employee benefit plan), whether the basis of any such proceeding is
alleged action in an official capacity as a director or officer or in any other
capacity while serving as a director or officer, against all expenses,
liabilities and loss (including, without limitation, attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) actually and reasonably incurred by him in connection with such
proceeding. Such indemnification shall continue as to a person who has ceased to
be a director or officer and shall inure to the benefit of his heirs and legal
representatives. The right to indemnification conferred in this Article X shall
include the right to receive payment in advance of any expenses incurred by the
indemnitee in connection with such proceeding, consistent with applicable law as
then in effect, and shall be a contract right. The Corporation may, by action of
its Board of Directors, provide indemnification for employees, agents, attorneys
and representatives of the Corporation with up to the same scope and extent as
herein above provided for officers and directors. No amendment to this
Certificate of Incorporation having the effect of amending, altering, changing
or repealing any of the provisions of this Section 2 shall remove, abridge or
adversely affect any right to indemnification or other benefits under this
Section 2 with respect to any acts or omissions occurring prior to such
amendment or repeal.
(b) The right of indemnification, including the right to
receive payment in advance of expenses, conferred in this Article X shall not be
exclusive of any other rights to which any person seeking indemnification may
otherwise be entitled under any provisions of the Certificate of Incorporation,
By-laws, agreement, or otherwise.
(c) In any action or proceeding relating to the right to
indemnification conferred in this Article X, the Corporation shall have the
burden of proof that the indemnitee has not met any standard of conduct or
belief which may be required by applicable law to be applied in connection with
a determination of whether the indemnitee is entitled to indemnity, or otherwise
is not entitled to indemnity, and neither a failure to make such determination
nor an adverse determination of entitlement to indemnity shall be a defense of
the Corporation in such an action or proceeding or create any presumption that
the indemnitee has not met any such standard of conduct or belief or is
otherwise not entitled to indemnity. If successful in whole or in part in such
an action or proceeding, the indemnitee shall be entitled to be indemnified by
the Corporation for the expenses actually and reasonably incurred by him in
connection with such action or proceeding.
SECTION 3. Amendments of Certificate. No amendment to this
Certificate of Incorporation, directly or indirectly by merger, consolidation or
otherwise, shall amend, alter, change or repeal any of the provisions of this
Article X, unless the amendment effecting such amendment, alteration, change or
repeal shall receive the affirmative vote of the holders of at least 80% of the
outstanding shares of stock of the Corporation entitled to vote in elections of
directors, provided that this Section 3 shall not apply to any such amendment if
such amendment is submitted to the stockholders for adoption with the unanimous
recommendation of the entire Board of Directors.
ARTICLE XI
Compromise or Arrangement
Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation under
Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which said application has
been made, be binding on all the creditors or class of creditors, and/or on all
the stockholders or class of stockholders, of the Corporation, as the case may
be, and also on the Corporation.
ARTICLE XII
Meetings of Stockholders
SECTION 1. Meetings Required. No action required to be taken
or which may be taken at any annual or special meeting of stockholders of the
Corporation may be taken without a meeting, except on written consent, setting
forth the action so taken, signed by the holders of record of at least 80% of
the outstanding shares entitled to vote thereon.
SECTION 2. Amendments of Certificate. No amendment to this
Certificate of Incorporation, directly or indirectly by merger, consolidation or
otherwise, shall amend, alter, change or repeal any of the provisions of this
Article XII, unless the amendment effecting such amendment, alteration, change
or repeal shall receive the affirmative vote of the holders of at least 80% of
the outstanding shares of stock of the Corporation entitled to vote in elections
of directors; provided that this Section 2 shall not apply to any such amendment
if such amendment is submitted to the stockholders for adoption with the
unanimous recommendation of the entire Board of Directors.
ARTICLE XIII
Corporate Opportunities
No opportunity, transaction, agreement or other arrangement to
which Fingerhut Companies, Inc. (FCI), or any other person in which FCI has or
acquires a financial interest, is or shall become a party, shall be the property
or a corporate opportunity of the Corporation, unless (a) such opportunity,
transaction, agreement or other arrangement is offered to the Corporation for
its benefit before it is offered to FCI or such other person, and (b) either (i)
the Corporation has an enforceable contractual interest in such opportunity,
transaction, agreement or other arrangement or (ii) the subject matter of such
opportunity, transaction, agreement or other arrangement is a constituent
element of an activity in which the Corporation is then actively engaged.
In the event an opportunity, transaction, agreement or other
arrangement shall be offered to (a) FCI or any other person in which FCI has or
acquires a financial interest or (b) an officer or director of the Corporation,
after it has been offered to the Corporation, the existence or presence of one
or more of the conditions set forth in clauses (b) (i) and (ii) in the
immediately preceding paragraph shall not be deemed to conclusively entitle the
Corporation to the benefit of such opportunity, transaction, agreement or other
arrangement.