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Exhibit 3.1a
ARTICLES OF AMENDMENT
OF NATIONS EXPRESS, INC.
The undersigned corporation hereby submits these Articles of Amendment for
the purpose of amending its Articles of Incorporation:
1. The name of the corporation is NATIONS EXPRESS, INC.
2. The Articles of Incorporation of the corporation are hereby amended as
follows:
Article V is hereby deleted and replaced with the following Article V:
See attached Exhibit A
3. The foregoing amendment was adopted on the 1st day of March 1999 by the
directors of the corporation in accordance with N.C.G.S. 55-6-02.
Dated this 1st day of March, 1999.
Nations Express, Inc.
By: /s/ Allen D. Watson
Allen D. Watson, President
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ARTICLE V
5.1. Issuance of Common and Preferred Stock in Series
Common Stock and Preferred Stock may be issued from time to time in one or
more series, the shares of each series to have such voting powers, full or
limited, and such designations, preferences and relative, participating,
optional or other special rights and qualifications, limitations or
restrictions thereof as are stated and expressed herein or in the resolution or
resolutions providing for the issue of such series adopted by the board of
directors.
5.1.1. Dividends
Subject to any preferential rights granted for any series of Preferred
Stock, the holders of shares of the Common Stock shall be entitled to receive
dividends out of the funds of the corporation legally available therefor at the
rate and at the time or times, whether cumulative or noncumulative, as may be
provided by the board of directors. The holders of shares of the Preferred
Stock shall be entitled to receive dividends to the extent provided herein or
by the board of directors in designating the particular series of Preferred
Stock. The holders of shares of the Common Stock shall not be entitled to
receive any dividends thereon other than the dividends referred to in this
section.
5.1.2. Voting
To the extent provided herein or by resolution or resolutions of the board
of directors providing for the issue of a class or series of Common Stock or
Preferred Stock, the holders of each such class or series shall have the right
to vote for the election of members of the board of directors of the
corporation and the right to vote on all other matters, except those matters as
to which North Carolina law or these Articles provide for a separate vote.
5.1.3. Issuance of Shares
The corporation may from time to time issue any authorized and unissued
shares of Common Stock or Preferred Stock for such consideration as may be
fixed from time to time by the board of directors, without action by the
shareholders. The board of directors may provide for payment therefor to be
received by the corporation in cash, property, services or such other
consideration as is approved by the board of directors. Any and all such shares
of Common Stock or Preferred Stock, the issuance of which has been so
authorized, and for which consideration so fixed by the board of directors has
been paid or delivered, shall be deemed fully paid stock and shall not be
liable to any further call or assessment thereon.
5.2 Designation of Common Stock
5.2.1. Designation
The Common Stock shall consist of up to 25,000,000 shares, no par value. The
powers, preferences, rights and qualifications, limitations and restrictions of
the Common Stock are as follows:
5.2.2. Dividends
Dividends shall be declared and set aside for any shares of the Common Stock
only upon resolution of the Board of Directors.
5.2.3. Liquidation Rights
Upon the voluntary or involuntary dissolution, liquidation or winding up of
the corporation, the assets available for distribution to the holders of Common
Stock shall be distributed. in the order and amounts described in Section
5.3.7.
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5.2.4. Voting Power
Each holder of Common Stock shall be entitled to one vote for each share of
Common Stock held at the record date for the determination of Common
Stockholders entitled to vote on such matter or, if no such record date is
established, at the date on which notice of the meeting of shareholders at
which the vote is to be taken is marked, or the date any written consent of
shareholders is solicited if the vote is not to be taken at a meeting.
5.3. Designation of Preferred Stock
The Preferred Stock shall consist of 1,000,000 no par value. The powers,
preferences, rights and qualifications, limitations and restrictions of the
Preferred Stock are as established in these Articles from time to time.
5.4. Designation of Series A Convertible Preferred Stock
5.4.1. Designations
The Series A Convertible Preferred Stock, consisting of up to 170,000
shares, authorized herein, shall be designated herein as the "Series A Stock."
The powers, preferences and rights and the qualifications, limitations and
restrictions of the Series A Stock are as follows:
5.4.2 Dividends
Dividends shall be declared and set aside for any shares of the Series A
Stock only upon resolution of the board of directors; provided, that:
a. Dividend Amount. The holders of record of outstanding shares of the Series A
Stock shall be entitled to receive dividends, which shall be cumulative, out
of any funds of the corporation legally available therefor, prior and in
preference to any declaration or payment of any dividend (payable other than
in Common Stock of the corporation) on the Common Stock of the corporation
during any fiscal year, at the rate of $.25 per share ( 10% of the $2.50
price per share, appropriately adjusted for any stock dividend, split or
combination of such Series A Stock) during such fiscal year payable when, as
and if declared by the board of directors. Dividends on the Series A Stock
shall be paid quarterly in arrears no later than the 10th day immediately
following the dividend due date. After payment of such dividends to the
holders of the Series A Stock (and of any other class or series of Preferred
Stock having preferential rights as to dividends) in any fiscal year, the
corporation may in the same fiscal year declare and pay a dividend on the
Common Stock, provided the corporation shall simultaneously declare and pay
a dividend on each outstanding share of Series A Stock. No dividends, other
than those payable in the Common Stock of the corporation, shall be paid on
any Common Stock of the corporation during any fiscal year of the
corporation until dividends in the total amount of $0.25 per share, as
adjusted for any stock dividends, combinations or splits with respect to
such shares, on the Series A Stock, shall have been paid or declared and set
apart during said fiscal year and any other prior year in which dividends
accumulated but remain unpaid.
b. Limitation on Common Stock Distribution. No dividend, redemption or similar
distribution may be declared or paid on shares of the Common Stock or on any
other shares of capital stock of the corporation ranking below the Series A
Stock with respect to the payment of dividends if the net assets of the
corporation after such event would be insufficient to make the liquidation
payment for the Series A Stock, or any liquidation payment on the shares, if
any, of any other series of Preferred Stock of the corporation having a
preferential right to liquidation payments superior to the Common Stock
(whether or not such payment actually is to be paid).
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5.4.3 Voting Power
Each holder of Series A Stock shall be entitled to vote on all matters and
shall be entitled to that number of votes equal to the largest number of whole
shares of Common Stock into which such holder's shares of Series A Stock could
be converted at the record date for the determination of shareholders entitled
to vote on such matter or, if no such record date is established, at the date
on which notice of the meeting of shareholders at which the vote is to be taken
is mailed, or the date any written consent of shareholders is solicited if the
vote is not to be taken at a meeting. Except as otherwise expressly provided by
the North Carolina Business Corporation Act, the holders of shares of Series A
Stock, any other series of Preferred Stock, and Common Stock shall vote
together as a single class on all matters.
5.4.4 Conversion Rights
The holders of the Series A Stock shall have the following rights with
respect to the conversion of Series A Stock into shares of Common Stock:
a. General.
(i) Voluntary Conversion. Shares of the Series A Stock may, at the option of
the holder, be converted at any time into such number of fully paid and
nonassessable shares of Common Stock as are equal to the product obtained
by multiplying the Series A Conversion Rate determined under Section 5.4.4b
by the number of shares of Series A Stock being converted.
(ii) Mandatory Conversion. Each share of Series A Stock shall be converted
automatically, without any further action by the holders of such shares
and whether or not the certificates representing such shares are
surrendered to the corporation or its transfer agent for the Common Stock,
into the number of shares of Common Stock into which such Series A Stock
is convertible immediately prior to the closing of a firm underwritten,
public offering by the corporation of its Common Stock, registered under
the Securities Act of 1933, as amended, for an aggregate amount of
$5,000,000 or greater, at a price per share of no less than $5.00.
b. Conversion Rate. The conversion rate for Series A Stock in effect at any
time (the "Series A Conversion Rate") shall equal $2.50 divided by the
Series A Conversion Price, calculated as provided in Section 5.4.4c.
c. Conversion Price. The conversion price for Series A Stock shall initially be
$2.50 (the "Series A Conversion Price"). The Series A Conversion Price shall
be adjusted to $3.00 six months after the issuance of the Series A Stock and
to $3.50 twelve months after the issuance of the Series A Stock and,
additionally, from time to time in accordance with Section 5.4.4d.
d. Adjustments to Applicable Conversion Price.
(i) Extraordinary Common Stock Event. Upon the happening of an Extraordinary
Common Stock Event (as defined below) after the date of the initial
issuance of any shares of Series A Stock, the Series A Conversion Price
shall, simultaneously with the happening of such Extraordinary Common Stock
Event, be adjusted by multiplying the then effective Series A Conversion
Price by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to such Extraordinary Common
Stock Event and the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such Extraordinary Common Stock
Event, and the product so obtained shall thereafter be the Series A
Conversion Price. The Series A Conversion Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive
Extraordinary Common Stock Event or Events.
"Extraordinary Common Stock Event" shall mean (i) the issuance of additional
shares of Common Stock as a dividend or other distribution on outstanding
Common Stock of the corporation, (ii) a subdivision of outstanding shares of
Common Stock into a greater number of shares of Common Stock, or (iii) a
combination of outstanding shares of Common Stock illto a smaller number of
shares of Common Stock.
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(ii) Sale of Shares Below Applicable Conversion Price.
(A) If the corporation shall issue any Additional Stock (as defined below)
without consideration or for a consideration per share less than the Series
A Conversion Price in effect immediately prior to the issuance of such
Additional Stock, the Series A Conversion Price in effect upon such
issuance (except as otherwise provided in this Section 5.4.4d(ii) shall be
adjusted to a price equal to the quotient obtained by dividing the total
computed under clause (x) below by the total computed under clause (y)
below as follows:
(x) an amount equal to the sum of (1) the result obtained by multiplying the
number of shares of Common Stock deemed outstanding immediately prior to
such issuance (which shall include the actual number of shares outstanding
plus all shares issuable upon the conversion or exercise of all outstanding
convertible securities, warrants and options) by the Series A Conversion
Price then in effect, and (2) the aggregate consideration, if any, received
by the corporation upon the issuance of such Additional Stock;
(y) the number of shares of Common Stock of the corporation outstanding
immediately after such issuance (including the shares deemed outstanding as
provided above).
(B) No adjustment of the Series A Conversion Price shall be made in an amount
less than $.0001 share, provided, that any adjustments which are not
required to be made by reason of this sentence shall be carried forward and
shall be taken into account in any subsequent adjustment made to the Series
A Conversion Price. Except as provided in Sections 5.4.4d(ii)(E)(3) and (4)
below, no adjustment of the Series A Conversion Price shall have the effect
of increasing the Series A Conversion Price above the Series A Conversion
Price in effect immediately prior to such adjustment.
(C) In the case of the issuance of Common Stock for cash, the consideration
shall be deemed to be the amount of cash paid therefor before deducting any
discounts, commissions or other expenses allowed, paid or incurred by the
corporation for any underwriting or otherwise in connection with the
issuance and sale thereof.
(D) In the case of the issuance of Common Stock for a consideration in whole or
in part other than cash, the consideration other than cash shall be deemed
to be the fair value thereof as determined in good faith by the board of
directors irrespective of any accounting treatment.
(E) In the case of the issuance of options to purchase or rights to subscribe
for Common Stock, securities by their terms convertible into or
exchangeable for Common Stock, or options to purchase or rights to
subscribe for such convertible or exchangeable securities (which options,
rights, convertible or exchangeable securities are not excluded from the
definition of Additional Stock except as provided in Section
5.4.4d(iii)(B), the following provisions shall apply:
(1) the aggregate maximum number of shares of Common Stock deliverable upon
exercise of such options to purchase or rights to subscribe for Common
Stock shall be deemed to have been issued at the time such options or
rights were issued for a consideration equal to the consideration
(determined in the manner provided in Sections 5.4.4d (iii)(C) and (D)
above) received by the corporation upon the issuance of such options or
rights plus the purchase price provided in such options or rights for the
Common Stock covered thereby, but no further adjustment to the Series A
Conversion Price shall be made for the actual issuance of Common Stock upon
the exercise of such options or rights in accordance with their terms;
(2) the aggregate maximum number of shares of Common Stock deliverable upon
conversion of or in exchange for any such convertible or exchangeable
securities or upon the exercise of options to purchase or rights to
subscribe for such convertible or exchangeable securities and subsequent
conversion or exchange thereof shall be deemed to have been issued at the
time such securities were issued or such options or rights were issued for
a consideration equal to the consideration received by the corporation for
any such securities and related options or rights, plus the additional
consideration, if any, to be received by the corporation upon the
conversion or exchange of such securities or the exercise of any related
options or rights but no further adjustment to the Series A Conversion
Price shall be made for the actual issuance of Common Stock upon the
conversion or exchange of such securities in accordance with their terms;
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(3) if such options, rights or convertible or exchangeable securities by their
terms provide, with the passage of time or otherwise, for any increase in
the consideration payable to the corporation or any decrease in the number
of shares of Common Stock issuable upon the exercise, conversion or
exchange thereof, the Series A Conversion Price computed upon the original
issue thereof, and any subsequent adjustments based thereon, shall, upon
such increase or decrease becoming effective, be re-computed to reflect
such increase or decrease with respect to such options, rights and
securities not already exercised, converted or exchanged, prior to such
increase or decrease becoming effective, but no further adjustment to the
Series A Conversion Price shall be made for the actual issuance of Common
Stock upon the exercise of any such options or rights or the conversion or
exchange of such securities in accordance with their terms;
(4) upon the expiration of any such options or rights, the termination of any
such rights to convert or exchange or the expiration of any options or
rights related to such convertible or exchangeable securities, the Series A
Conversion Price shall forthwith be readjusted to such Series A Conversion
Price as would have been obtained had the adjustment which was made upon
the issuance of such options, rights or securities or options or rights
related to such securities been made upon the basis of the issuance of only
the number of shares of Common Stock actually issued upon the exercise of
such options or rights, upon the conversion or exchange of such securities
or upon the exercise of the options or rights related to such securities;
and
(5) if any such options or rights shall be issued in connection with the issue
and sale of other securities of the corporation, together compromising one
integral transaction in which no specific consideration is allocated to
such options or rights by the parties thereto, such options or rights shall
be deemed to have been issued for such consideration as determined in good
faith by the board of directors.
(iii) "Additional Stock" shall mean any shares of Common Stock or securities
convertible into or exchangeable or exercisable for shares of Common
Stock issued, or deemed to have been issued pursuant to Section
5.4.4d(iii)(E), by the corporation after the date of initial issuance of
any Series A Stock other than:
(A) Common Stock issued pursuant to a transaction described in Section
5.4.4d(i);
(B) Shares of Common Stock issued or issuable to employees, consultants or
directors of the corporation directly or pursuant to the corporation's
Stock Incentive Plan, as amended from time to time, or other restricted
stock plan to the extent such issuances are approved by the board of
directors of the corporation;
(C) Common Stock issued or issuable upon conversion of Series A Stock; and
(D) Common Stock issued or issuable upon conversion or exercise of any
securities convertible into or exchangeable or exercisable for shares of
Common Stock, other than Common Stock issued or issuable upon conversion of
Series A stock, provided, that such securities are designated as excluded
from the definition of Additional Stock by the vote or written consent of
holders of a majority of the Series A Stock.
(e) Capital Reorganization or Reclassification. If the Common Stock issuable
upon the conversion of the Series A Stock shall be changed into the same or
different number of shares of any class or classes of stock of the
corporation, whether by capital reorganization, reclassification or
otherwise (other than an Extraordinary Common Stock Event provided for in
Section 5.4.4d (i), then and in each such event the holders of each share
of Series A Stock shall have the right thereafter to convert such shares
into the kind and amount of shares of stock and other securities and
property receivable upon such reorganization, reclassification or other
change by holders of the number of shares of Common Stock into which such
share of Series A Stock have been converted immediately prior to such
reorganization, reclassification or change, all subject to adjustment as
provided herein.
f. Accountant's Certificate as to Adjustments; Notice by The Corporation. In
each case of all adjustment or readjustment of the Series A Conversion Rate,
the corporation at its expense will furnish each holder of Series A Stock
with a certificate, prepared by independent public accountants of recognized
standing if so
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required by such holder, showing such adjustment or readjustment and stating
in detail the facts upon which such adjustment or readjustment is based.
g. Exercise of Conversion Privilege. To exercise its conversion privilege, each
holder of Series A Stock shall surrender the certificate or certificates
representing the shares being converted to the corporation at its principal
office, and shall give written notice to the corporation at that office that
such holder elects to convert such shares. Such notice shall also state the
name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock issuable upon such conversion shall
be issued. The certificate or certificates for shares of Series A Stock
surrendered for conversion shall be accompanied by proper assignment thereof
to the corporation or in blank. The date when such written notice is
received by the corporation, together with the certificate or certificates
representing the shares of Series A Stock being converted, shall be the
"Series A Conversion Date." As promptly as practicable after the Series A
Conversion Date, the corporation shall issue and shall deliver to the holder
of the shares of Series A Stock being converted, or on its written order
such certificate or certificates as it may request for the number of whole
shares of Common Stock issuable upon the conversion of such shares of Series
A Stock in accordance with the provisions of this Section 5.4.4, cash in the
amount of all declared and unpaid dividends on such shares of Series A Stock
up to and including the Series A Conversion Date, and cash, as provided in
Section 5.4.4h, in respect of any fraction of a share of Common Stock
issuable upon such conversion. Such conversion shall be deemed to have been
effected immediately prior to the close of business on the Series A
Conversion Date, and at such time the rights of the holder as holder of the
converted shares of Series A Stock shall cease and the person or persons in
whose name or names any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become
the holder or holders of record of the shares of Common Stock represented
thereby.
h. Cash in Lieu of Fractional Shares. No fractional shares of Common Stock or
scrip representing fractional shares shall be issued upon the conversion of
shares of Series A Stock, but the corporation shall pay to the holder of
such shares a cash adjustment in respect of such fractional shares in an
amount equal to the same fraction of the market price per share of the
Common Stock (as determined in a reasonable manner prescribed by the board
of directors) at the close of business on the Series A Conversion Date. The
determination as to whether or not any fractional shares are issuable shall
be based upon the total number of shares of Series A Stock being converted
at any one time by any holder thereof, not upon each share of Series A Stock
being converted.
i. Partial Conversion. In the event some but not all of the shares of Series A
Stock represented by a certificate or certificates surrendered by a holder
are converted, the corporation shall execute and deliver to or on the order
of the holder, at the expense of the corporation, a new certificate
representing the shares of Series A Stock that were not converted.
j. Reservation of Common Stock. 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 A Stock, such number of its shares of Common Stock as shall from time
to time be sufficient to effect the conversion of all outstanding shares of
the Series A 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 A Stock, the corporation shall
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.
k. No Impairment. The corporation will not, by amendment of its certificate of
incorporation or through any reorganization, transfer of assets
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the corporation,
but will at all times in good faith assist in the carrying out of
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all the provisions of this Section 5.3 and in the taking of all such action
as may be necessary or appropriate in order to protect the conversion rights
of the holders of the Series A Stock against impairment.
5.4.5 Reissuance of Stock
No share or shares of Series A Stock converted, purchased or otherwise
acquired by the corporation shall be reissued, and all such shares shall be
canceled, retired and eliminated from the shares which the corporation shall be
authorized to issue. The corporation may from time to time take such
appropriate corporate action as may be necessary to reduce the authorized
number of shares of the Series A Stock accordingly.
5.4.6 Redemption
The corporation shall not have the right to call for redemption of all or
any part of the Series A Stock. However, the corporation shall have the right
to purchase shares of Series A Stock pursuant to agreements within the holders
thereof when such purchases are approved by the board of directors.
5.4.7 Liquidation Rights
Upon the voluntary or involuntary dissolution, liquidation or winding up of
the corporation, the assets of the corporation available for distribution to
its shareholders shall be distributed in the following order and amounts:
a. General.
(i) Series A Stock. First, the holders of shares of Series A Stock shall be
entitled to receive $2.50 (appropriately adjusted for any stock dividend,
split or combination of such Series A Stock) for each outstanding share of
Series A Stock held by them plus any declared but unpaid dividends per
share on such outstanding shares of Series A Stock (the "Series A
Liquidation Amount"). If upon the occurrence of such event the assets of
the corporation shall be insufficient to permit the payment of the full
Series A Liquidation Amount, then the assets of the corporation available
for distribution shall be distributed ratably among the holders of the
Series A Stock in the same proportions as the aggregate of the Series A
Liquidation Amount each such holder would otherwise be entitled to receive
bears to the total Series A Liquidation Amount that would otherwise be
payable to all such holders, and no distribution to other shareholders of
the corporation shall be made. Upon the completion of the distribution of
the full Series A Liquidation Amount, if assets remain in the corporation,
such remaining assets shall be distributed as set forth in Sections
5.4.7a(ii) and 5.4.7a(iii) below.
(ii) Common Stock. Second, subject to payment in full of the Series A
Liquidation Amount, the holders of shares of Common Stock shall be
entitled to receive $2.00 appropriately adjusted for any stock dividend,
split or combination of such Common Stock) for each outstanding share of
Common Stock held by them (the "Common Stock Liquidation Amount"). If upon
the occurrence of such event, the assets of the corporation shall be
insufficient to permit the payment of the full Common Stock Liquidation
Amount, then the assets of the corporation available for distribution
shall be distributed ratably among the holders of the Common Stock in the
same proportions as the aggregate of the Common Stock Liquidation Amount
each such holder would otherwise be entitled to receive bears to the total
Common Stock Liquidation Amount that would otherwise be payable to all
such holders, and no further distribution to other shareholders of the
corporation shall be made. Upon the completion of the preferential rights
granted for any subsequent series of Preferred Stock and the full Common
Stock Liquidation Amount, if assets remain in the corporation, such
remaining assets shall be distributed as set forth in Section 5.4.7a(iii).
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(iii) Participation. Finally, subject to payment in full of the Series A
Liquidation Amount, any other preferred rights granted for any subsequent
series of Preferred Stock, and the payment in full or the Common Stock
Liquidation Amount as provided in Section 5.4.7a(iii), if assets remain
in the corporation, such remaining assets shall be distributed to the
holders of shares of Series A Stock, and to the holders of shares of
Common Stock together, who shall each be entitled to receive their Pro
Rata Amount; provided, that the rights of the holders of shares of Common
Stock are subject to any preferential rights granted for any subsequent
series of Preferred Stock. "Pro Rata Amount" means that portion of
remaining assets to which a group would be entitled based on its
percentage of the number of shares of Common Stock outstanding and the
number of shares of Common Stock into which the outstanding shares of
Series A Stock could then be converted.
b. Treatment of Sales of Assets or Acquisitions. The sale of all or
substantially all of the assets of the corporation or the acquisition of the
corporation by another entity by means of merger, consolidation or
otherwise, resulting in the exchange of the outstanding shares of the
corporation for securities of or consideration issued, or caused to be
issued, by the acquiring entity or any of its affiliates, shall be regarded
as a liquidation within the meaning of this Section 5.4.7; provided,
however, that each holder of Series A Stock or other shares of convertible
preferred stock of the corporation shall have the right to elect the
benefits of the provisions of Section 5.4.7 or other applicable conversion
provisions; and provided, further, that this provision shall not apply if
(i) the shareholders of the corporation immediately prior to such
consolidation, merger or sale of assets will own a majority of the
outstanding share of the surviving corporation, or (ii) the consent or vote
by holders of at least 66-2/3% of Series A Stock then outstanding that such
consolidation, merger or sale shall not be regarded as a liquidation within
the meaning of this Section 5.4.7.
c. Distributions Other Than Cash. Whenever the distribution provided for in
this Section 5.4.7 shall be payable in property other than cash, the value
of such distribution shall be the fair market value of such property as
determined in good faith by the board of directors.
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