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EXHIBIT 3.1
SIXTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
EDISON SCHOOLS INC.
EDISON SCHOOLS INC., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify as follows:
1. The Corporation, originally known as The Edison Project Inc., filed
its original Certificate of Incorporation with the Secretary of State of the
State of Delaware on October 31, 1996. The Certificate of Incorporation was
amended and restated on November 18, 1996 and on December 30, 1997, amended on
May 27, 1998, amended and restated on June 4, 1999 and on July 2, 1999, amended
on July 29, 1999 to change the name of the Corporation to Edison Schools Inc.,
and amended and restated on October 27, 1999.
2. By action of directors in lieu of a meeting, a resolution of the
Board of Directors of the Corporation was duly adopted, pursuant to Sections
141(f), 242 and 245 of the General Corporation Law of the State of Delaware,
setting forth an Amended and Restated Certificate of Incorporation and declaring
said Amended and Restated Certificate of Incorporation advisable. The
stockholders of the Corporation duly approved said proposed Amended and Restated
Certificate of Incorporation by written consent in accordance with Sections 228,
242 and 245 of the General Corporation Law of the State of Delaware and written
notice of such consent has been given to all stockholders who have not consented
in writing to said restatement. The resolution setting forth the Amended and
Restated Certificate of Incorporation is as follows:
RESOLVED: That the Amended and Restated Certificate of Incorporation of
the Corporation, as amended, be and hereby is amended and
restated in its entirety so that the same shall read as
follows:
FIRST. The name of the Corporation is:
Edison Schools Inc.
SECOND. The name of the Corporation's registered agent in the State of
Delaware is Vanguard Corporate Services, Ltd. The address of its registered
office at such address is 15 East North Street, City of Dover, County of Kent,
19901.
THIRD. The nature of the business or purposes to be conducted or
promoted by the Corporation is as follows:
To engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
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FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 160,000,000 shares, consisting of
(i) 150,000,000 shares of Class A Common Stock, $.01 par value per share ("Class
A Common Stock"), (ii) 5,000,000 shares of Class B Common Stock, $.01 par value
per share ("Class B Common Stock" and, together with the Class A Common Stock,
the "Common Stock"), and (iii) 5,000,000 shares of Preferred Stock, $.01 par
value per share ("Preferred Stock").
The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or restrictions
thereof in respect of each class of capital stock of the Corporation.
A. COMMON STOCK.
1. Identical Rights. Except as otherwise set forth in this Section A,
the rights and privileges of the Common Stock shall be identical; provided that
the dividend and liquidation rights of the holders of the Common Stock are
subject to and qualified by the rights of the holders of the Preferred Stock of
any series as may be designated by the Board of Directors upon any issuance of
the Preferred Stock of any series.
2. Voting.
(a) General. Except as otherwise set forth in this Section A.2
and in Article ELEVENTH, the holders of the Common Stock shall vote as a single
class on all matters submitted to a vote of the stockholders to which the
holders of Common Stock are entitled to vote, except as may be required by
Delaware law or as otherwise expressly specified in this Certificate of
Incorporation. Each share of Class A Common Stock shall be entitled to one vote
and each share of Class B Common Stock shall be entitled to ten votes.
(b) Election of Directors. With regard to the election of
directors and beginning with the election of directors at the first Annual
Meeting of Stockholders of the Corporation to be held after the consummation of
the initial public offering of securities of the Corporation pursuant to a
registration statement filed with and declared effective by Securities and
Exchange Commission (the "Annual Meeting"), (i) holders of Class A Common Stock
shall be entitled, voting separately as a class, to elect seven of the
Corporation's 11 directors and (ii) holders of Class B Common Stock shall be
entitled, voting separately as a class, to elect four of the Corporation's 11
directors. If the number of directors of the Corporation is increased or
decreased at any time this Section A.2(b) is in effect in accordance with
Article ELEVENTH, thereafter the holders of Class B Common Stock shall be
entitled, voting as a separate class, to elect the minimum number of directors
as shall constitute at least the same percentage of the total number of
directors of the Corporation as is equal to the percentage determined by
dividing four by 11, with the holders of Class A Common Stock, voting as
separate class, electing the balance. In the event of any increase or decrease
in the authorized number of directors, each director then serving as such shall
nevertheless continue as a director until the expiration of his current term, or
his earlier resignation, removal from office or death. If at any time there
shall not be any Class B Common Stock outstanding, then this Section A.2(b)
shall cease to be of any effect.
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(c) Cumulative Voting. The holders of Common Stock shall be
entitled at all elections of directors to as many votes as shall equal the
number of votes which (except for this provision as to cumulative voting) such
holder would be entitled to cast for the election of directors with respect to
such holder's shares of stock multiplied by the number of directors to be
elected, and such holder may cast all of such votes for a single director or may
distribute them among the number to be voted for, or for any two or more of
them, as such holder may see fit.
(d) Authorized Shares. The number of authorized shares of
Common Stock may be increased or decreased (but not below the number of shares
thereof then outstanding) by the affirmative vote of the holders of a majority
of the stock of the Corporation entitled to vote, irrespective of the provisions
of Section 242(b)(2) of the General Corporation Law of Delaware.
3. Dividends and Distributions. Dividends and other distributions may
be declared and paid on the Common Stock from funds lawfully available therefor
as and when determined by the Board of Directors and subject to any preferential
dividend rights of any then outstanding Preferred Stock. The Corporation may not
make any dividend or distribution with respect to any class of Common Stock
unless at the same time the Corporation makes a ratable dividend or distribution
with respect to each outstanding share of Common Stock, regardless of class. In
the case of dividends or distributions payable in shares of a class of Common
Stock, including distributions pursuant to stock splits or divisions of Class A
Common Stock or Class B Common Stock, only shares of Class A Common Stock may be
distributed with respect to Class A Common Stock and only shares of Class B
Common Stock may be distributed with respect to Class B Common Stock, and the
number of shares of Common Stock payable per share will be equal for each class.
Whenever a dividend or distribution, including distributions pursuant to stock
splits or divisions of the Common Stock, is payable in shares of Class A Common
Stock or Class B Common Stock, the number of shares of each class of Common
Stock payable per share of such class of Common Stock shall be equal in number.
In the case of dividends or other distributions consisting of other voting
securities of the Corporation or of voting securities of any corporation that is
a wholly owned subsidiary of the Corporation, the Corporation shall declare and
pay such dividends in two separate classes of such voting securities, identical
in all respects, except that (i) the voting rights of each such security paid to
the holders of Class A Common Stock shall be one-tenth of the voting rights of
each such security paid to the holders of Class B Common Stock, (ii) such
security paid to the holders of Class B Common stock shall convert into the
security paid to the holders of Class A Common Stock upon the same terms and
conditions applicable to the conversion of Class B Common Stock into Class A
Common Stock, and (iii) with respect only to dividends or other distributions of
voting securities of any corporation that is a wholly owned subsidiary of the
Company, the respective voting rights of each such security paid to holders of
Class A Common Stock and Class B Common Stock with respect to the election of
directors shall otherwise be as comparable as is practicable to those of the
Class A Common Stock and Class B Common Stock, respectively. In the case of
dividends or other distributions consisting of securities convertible into, or
exchangeable for, voting securities of the Corporation or voting securities of
another corporation that is a wholly owned subsidiary of the Corporation, the
Corporation shall provide that such convertible or exchangeable securities and
the underlying securities be identical in all respects (including, without
limitation, the conversion or exchange rate), except that (i) the voting rights
of each security underlying the convertible or exchangeable security paid to the
holders of Class A Common Stock shall be one-tenth of the voting rights of each
security underlying the convertible
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or exchangeable security paid to the holders of the Class B Common Stock, and
(ii) such underlying securities paid to the holders of Class B Common Stock
shall convert into the underlying securities paid to the holders of Class A
Common Stock upon the same terms and conditions applicable to the conversion of
Class B Common Stock into Class A Common Stock and shall have the same
restrictions on transfer and ownership applicable to the transfer and ownership
of the Class B Common Stock.
4. Reclassifications. Neither the shares of Class A Common Stock nor
the shares of Class B Common Stock may be subdivided, consolidated, reclassified
or otherwise changed unless concurrently the shares of the other class of Common
Stock are subdivided, consolidated, reclassified or otherwise changed in the
same proportion and the same manner.
5. Liquidation. Upon the dissolution or liquidation of the Corporation,
whether voluntary or involuntary, holders of Common Stock will be entitled to
receive all assets of the Corporation available for distribution to its
stockholders, subject to any preferential rights of any then outstanding
Preferred Stock.
6. Conversion Rights.
(a) Voluntary Conversion. Each share of Class B Common Stock
is convertible into one share of Class A Common Stock at any time at the option
of the holder. Such right shall be exercised by the surrender of the certificate
or certificates representing the shares of Class B Common Stock to be converted
to the Corporation at any time during normal business hours at the principal
executive offices of the Corporation or at the offices of the Corporation's
transfer agent (the "Transfer Agent"), accompanied by a written notice from the
holder of such shares stating that such holder desires to convert such shares,
or a stated number of the shares represented by such certificate of
certificates, into an equal number of shares of Class A Common Stock, and, if so
required by the Corporation or the Transfer Agent, by instruments of transfer in
form satisfactory to the Corporation and the Transfer Agent, duly executed by
such holder or such holder's duly authorized attorney, and transfer tax stamps
or funds therefor, if required.
(b) Automatic Conversion.
(i) In addition to and notwithstanding the foregoing,
upon any Transfer of shares of Class B Common Stock, such
shares shall be converted automatically into a like number of
shares of Class A Common Stock. Immediately upon the
occurrence of a Transfer, and without any action on the part
of any stockholder whose shares are subject to automatic
conversion hereunder, the Corporation or any other person or
entity, the relevant shares of Class B Common Stock shall be
deemed converted into the same number of shares of Class A
Common Stock. From and after the time of the Transfer, any
such certificates for Class B Common Stock shall no longer
represent shares of Class B Common Stock but instead shall
represent the sum of the number of shares of Class A Common
Stock and the right to have registered in the name of the
transferee of such stock the shares of Class A Common Stock
issuable to such transferee as a result of such conversion.
The Class A Common Stock issuable
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upon any such conversion shall be so registered and the
certificates with respect to such stock shall be issued by the
Corporation upon the surrender of the certificates that
represent the Class B Common Stock immediately prior to the
Transfer, duly endorsed to the Corporation or in blank or
accompanied by proper instruments of transfer to the
Corporation or in blank (such endorsements or instruments of
transfer to be in form satisfactory to the Corporation). As
used in this section A.6(b), the following terms have the
following meanings:
(1) "Affiliate" shall mean and be limited to the
following Persons: (A) with respect to any
natural person, (i) that natural person's
spouse, siblings, children (including
adopted children), grandchildren or parents
or parents, (ii) a trust of which such
natural person is the trustee for the
benefit of his spouse, siblings, children
(including adopted children), grandchildren
or parents or parents, or (iii) the heirs,
executors, administrators, guardians or
conservators of such natural person; (B)
with respect to any limited partnership, (i)
any Person that, at the Original Issuance
Time, was the general partner of such
limited partnership, or (ii) another limited
partnership which has a general partner, the
control of which general partner is held,
directly or indirectly, by five or fewer
natural persons, provided such natural
persons had control of the general partner
of the subject limited partnership at the
Original Issue Time; (C) with respect to any
corporation or limited liability company,
(i) any Person that is a limited partnership
or limited liability company and that has as
a general partner or a managing member, as
the case may be, such corporation or limited
liability company and (ii) any Person that
is a corporation and that is controlled by,
controls or is under common control with
such corporation or limited liability
company; and (D) with respect to any
Original Shareholder, any Person that is
controlled by, controls or is under common
control with the Original Shareholder.
(2) "Control" of a Person shall mean ownership
of more than 50% of the voting power of the
Person on all matters.
(3) "Original Shareholder" shall mean each
Person to whom the Corporation originally
issued shares of Class B Common Stock at the
Original Issuance Time.
(4) "Original Issuance Time" means the time at
which the Corporation first issued Class B
Common Stock.
(5) "Person" shall mean an individual, a
partnership, a limited liability company, a
corporation, an association, a joint stock
company, a trust, a joint venture, an
unincorporated organization or a
governmental entity or any department,
agency or political subdivision thereof.
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(6) "Transfer" shall mean the sale, assignment,
transfer, gift, pledge or hypothecation or
other disposition, whether voluntary or
involuntary, of Class B Common Stock to any
Person other than an Affiliate of the
Original Shareholder that initially held the
shares being transferred. Notwithstanding
the foregoing, the following shall not
constitute a "Transfer": (i) a transfer to
the acquiror in the case of a merger or
similar transaction by the Corporation in
which all the outstanding shares of Common
Stock of the Corporation regardless of class
are purchased by the acquiror, (ii) the
sale, assignment, transfer, gift, pledge or
hypothecation or other disposition, whether
voluntary or involuntary, of any options or
warrants to purchase shares of Class B
Common Stock, (iii) the sale, transfer,
pledge or hypothecation or other disposition
in a bona fide financing transaction of any
derivative instrument that derives its value
from underlying shares of Class B Common
Stock or options or warrants to purchase
shares of Class B Common Stock, (iv) a
transfer to a Person that is Controlled by
H. Christopher Whittle or his Affiliates and
(v) any pledge of shares of Class B Common
Stock pursuant to the grant of a bona fide
pledge of or security interest in such
shares as collateral security for
indebtedness due to the pledgee, provided
that such pledge expressly provides that the
pledged shares remain subject to the
provisions of this Section A.6(b)(i) and
further provided that the subsequent
foreclosure by the pledgee on such shares or
similar action taken by the pledgee with
respect to the pledged shares shall be a
"Transfer" and such pledged shares of Class
B Common Stock shall thereupon be converted
automatically into shares of Class A Common
Stock as provided in this Section A.6(b)(i),
except that, if within five business days
after such foreclosure or similar event such
converted shares are returned to the
pledgor, such shares shall be converted
automatically back into shares of Class B
Common Stock.
(ii) All of the Class B Common Stock held by a stockholder and
its Affiliates shall automatically convert into shares of Class A Common Stock
on a one-for-one basis immediately following any Transfer by such stockholder
after which the stockholder and its Affiliates together have Transferred a
number of shares of Common Stock representing more than 50% of the aggregate
number of shares of Common Stock held by such stockholder and its Affiliates on
October 1, 1999 (excluding for this purpose shares issuable upon the exercise of
options and warrants to purchase shares of Common Stock held on October 1, 1999
and assuming all outstanding shares of the Corporation's preferred stock
converted into Common Stock on October 1, 1999). Immediately upon the occurrence
of a Transfer described in the preceding sentence, and without any action on the
part of any stockholder whose shares are subject to automatic conversion
hereunder, the Corporation or any other person or entity, the relevant shares of
Class B Common Stock shall be deemed converted into the same number of shares of
Class A Common Stock. From and after the time of the Transfer, any such
certificates for Class B Common Stock shall no longer represent shares of Class
B Common Stock but
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instead shall represent the sum of the number of shares of Class A Common Stock
and the right to have registered in the name of the registered holder of such
stock the shares of Class A Common Stock issuable to such holder as a result of
such conversion. The Class A Common Stock issuable upon any such conversion
shall be so registered and the certificates with respect to such stock shall be
issued by the Corporation upon the surrender of the certificates that represent
the Class B Common Stock immediately prior to the conversion.
(iii) On the earlier to occur of (A) the twelfth anniversary
of the date of the Original Issuance Time, or (B) a record date for any meeting
of stockholders of the Corporation upon which the number of shares of
outstanding Class B Common Stock in the aggregate is less than 90,025 shares
(adjusted for stock splits, stock dividends, classifications, recapitalizations
and reverse stock splits and similar transactions), each share of Class B Common
Stock then issued or outstanding shall thereupon be converted automatically as
of such date into one fully paid and non-assessable share of Class A Common
Stock. Upon the occurrence of either such event, notice of such automatic
conversion shall be given by the Corporation by means of a press release and
written notice to all holders of Class B Common Stock, and shall be given as
soon as practicable, and the Secretary of the Corporation shall be instructed
to, and shall, promptly request from each holder of Class B Common Stock that
each such holder promptly deliver, and each such holder shall promptly deliver,
the certificate representing each such share of Class B Common Stock to the
Corporation for exchange hereunder. Immediately upon the occurrence of an event
described in clause (A) or (B) of the first sentence of this paragraph, and
without any action on the part of any stockholder, the Corporation or any other
person or entity, all shares of Class B Common Stock shall be deemed converted
into the same number of shares of Class A Common Stock. From and after such
time, any certificates for Class B Common Stock shall no longer represent shares
of Class B Common Stock but instead shall represent the sum of the number of
shares of Class A Common Stock and the right to have registered in the name of
the registered holder of such stock the shares of Class A Common Stock issuable
to such holder as a result of such conversion. The Class A Common Stock issuable
upon any such conversion shall be so registered and the certificates with
respect to such stock shall be issued by the Corporation upon the surrender of
the certificates that represent the Class B Common Stock immediately prior to
the conversion.
7. Unconverted Shares. If less than all of the shares of Class B Common
Stock evidenced by a certificate surrendered to the Corporation (in accordance
with such procedures as the Board of Directors may determine) are converted, the
Corporation shall execute and deliver to or upon the written order of the holder
of such certificate a new certificate evidencing the number of shares of Class B
Common Stock which are not converted without charge to the holder.
8. Reservation. The Corporation hereby reserves, and shall at all times
reserve and keep available, out of its authorized and unissued shares of Class A
Common Stock, for the purposes of effecting conversions, such number of duly
authorized shares of Class A Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of Class B Common
Stock. The Corporation covenants that all the shares of Class A Common Stock so
issuable shall, when so issued, be duly and validly issued, fully paid and
nonassessable. The Corporation shall take all such action as may be necessary to
assure that all such shares of Class A Common Stock may be so issued without
violation of any applicable law or regulation.
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The Corporation shall not take any action that results in any adjustment of the
conversion ratio if the total number of shares of Class A Common Stock issued
and issuable after such action upon conversion of the shares of Class B Common
Stock would exceed the total number of shares of Class A Common Stock then
authorized by the Corporation's Certificate of Incorporation.
9. Merger. Upon the merger or consolidation of the Corporation (whether
or not the Corporation is the surviving entity), holders of each class of Common
Stock will be entitled to receive equal per share payments or distributions,
except that in any transaction in which shares of capital stock are distributed
to holders of Common Stock, the shares of capital stock distributed to holders
of Class A Common Stock and Class B Common Stock may differ as to voting and
conversion rights, but only to the extent that the voting and conversion rights
of the Class A Common Stock and the Class B Common Stock differ in this
Certificate of Incorporation.
10. Issuance of Class A Common Stock. Following the Original Issuance
Time, the Corporation shall not issue or sell any shares of Class B Common Stock
or any securities (including, without limitation, any rights, options, warrants
or other securities) convertible, exchangeable or exercisable into shares of
Class B Common Stock to any person. Notwithstanding the foregoing, the Company
may issue and sell shares of Class B Common Stock (1) upon the exercise of any
stock option, warrant or similar right to acquire Class B Common Stock existing
at the Original Issuance Time and (2) in respect of stock splits, stock
dividends, subdivisions, reclassifications or similar transactions with respect
the Class B Common Stock.
11. Amendments to Section. Notwithstanding any other provisions of law,
this Amended and Restated Certificate of Incorporation or the By-Laws of the
Corporation, and notwithstanding the fact that a lesser percentage may be
specified by law, the affirmative vote of the holders of at least 80% of the
outstanding shares of Class A Common Stock, voting separately as a single class,
and the affirmative vote of the holders of at least 80% of the outstanding
shares of Class B Common Stock, voting separately as a single class, shall be
required to amend or repeal, or to adopt any provision inconsistent with, this
Section A of this Article FOURTH.
B. PREFERRED STOCK.
Preferred Stock may be issued from time to time in one or more series,
each of such series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such series adopted by the
Board of Directors of the Corporation as hereinafter provided. Any shares of
Preferred Stock which may be redeemed, purchased or acquired by the Corporation
may be reissued except as otherwise provided by law. Different series of
Preferred Stock shall not be construed to constitute different classes of shares
for the purposes of voting by classes unless expressly provided.
Authority is hereby expressly granted to the Board of Directors from
time to time to issue the Preferred Stock in one or more series, and in
connection with the creation of any such series, by resolution or resolutions
providing for the issue of the shares thereof, to determine and fix such voting
powers, full or limited, or no voting powers, and such designations, preferences
and
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relative participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, including without limitation thereof,
dividend rights, conversion rights, redemption privileges and liquidation
preferences, as shall be stated and expressed in such resolutions, all to the
full extent now or hereafter permitted by the General Corporation Law of
Delaware. Without limiting the generality of the foregoing, the resolutions
providing for issuance of any series of Preferred Stock may provide that such
series shall be superior or rank equally or be junior to the Preferred Stock of
any other series to the extent permitted by law. Except as otherwise provided in
this Certificate of Incorporation, no vote of the holders of the Preferred Stock
or Common Stock shall be a prerequisite to the designation or issuance of any
shares of any series of the Preferred Stock authorized by and complying with the
conditions of this Certificate of Incorporation, the right to have such vote
being expressly waived by all present and future holders of the capital stock of
the Corporation.
FIFTH. The Corporation shall have a perpetual existence.
SIXTH. In furtherance of and not in limitation of powers conferred by
statute, it is further provided:
1. Election of directors need not be by written ballot except
as and to the extent provided in the By-Laws of the Corporation.
2. Subject to the provisions of this Amended and Restated
Certificate of Incorporation and the By-Laws of the Corporation, the Board of
Directors is expressly authorized to adopt, amend or repeal the By-Laws of the
Corporation.
SEVENTH. 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 the
provisions of 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 the provisions of 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 consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the 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.
EIGHTH. Except to the extent that the General Corporation Law of
Delaware prohibits the elimination or limitation of liability of directors for
breaches of fiduciary duty, no director of the Corporation shall be personally
liable to the Corporation or its stockholders for monetary damages for any
breach of fiduciary duty as a director, notwithstanding any provision of law
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imposing such liability. No amendment to or repeal of this provision 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.
NINTH. 1. Actions, Suits and Proceedings Other than by or in the Right
of the Corporation. The Corporation shall indemnify each person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation), by
reason of the fact that he is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to serve, at the
request of the Corporation, as a director, officer or trustee of, or in a
similar capacity with, another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan) (all such persons being
referred to hereafter as an "Indemnitee"), or by reason of any action alleged to
have been taken or omitted in such capacity, against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such action, suit
or proceeding and any appeal therefrom, if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful. Notwithstanding
anything to the contrary in this Article, except as set forth in Section 7
below, the Corporation shall not indemnify an Indemnitee seeking indemnification
in connection with a proceeding (or part thereof) initiated by the Indemnitee
unless the initiation thereof was approved by the Board of Directors of the
Corporation. Notwithstanding anything to the contrary in this Article, the
Corporation shall not indemnify an Indemnitee to the extent such Indemnitee is
reimbursed from the proceeds of insurance, and in the event the Corporation
makes any indemnification payments to an Indemnitee and such Indemnitee is
subsequently reimbursed from the proceeds of insurance, such Indemnitee shall
promptly refund such indemnification payments to the Corporation to the extent
of such insurance reimbursement.
2. Actions or Suits by or in the Right of the Corporation. The
Corporation shall indemnify any Indemnitee who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to serve, at the
request of the Corporation, as a director, officer or trustee of, or in a
similar capacity with, another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan), or by reason of any
action alleged to have been taken or omitted in such capacity, against all
expenses (including attorneys' fees) and, to the extent permitted by law,
amounts paid in settlement actually and reasonably incurred by him or on his
behalf in connection with such action, suit or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person
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shall have been adjudged to be liable to the Corporation unless and only to the
extent that the Court of Chancery of Delaware shall determine upon application
that, despite the adjudication of such liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses (including attorneys' fees) which the Court of
Chancery of Delaware shall deem proper.
3. Indemnification for Expenses of Successful Party. Notwithstanding
the other provisions of this Article, to the extent that an Indemnitee has been
successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Sections 1 and 2 of this Article, or in defense of any
claim, issue or matter therein, or on appeal from any such action, suit or
proceeding, he shall be indemnified against all expenses (including attorneys'
fees) actually and reasonably incurred by him or on his behalf in connection
therewith. Without limiting the foregoing, if any action, suit or proceeding is
disposed of, on the merits or otherwise (including a disposition without
prejudice), without (i) the disposition being adverse to the Indemnitee, (ii) an
adjudication that the Indemnitee was liable to the Corporation, (iii) a plea of
guilty or nolo contendere by the Indemnitee, (iv) an adjudication that the
Indemnitee did not act in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation and (v) with
respect to any criminal proceeding, an adjudication that the Indemnitee had
reasonable cause to believe his conduct was unlawful, the Indemnitee shall be
considered for the purposes hereof to have been wholly successful with respect
thereto.
4. Notification and Defense of Claim. As a condition precedent to his
right to be indemnified, the Indemnitee must notify the Corporation in writing
as soon as practicable of any action, suit, proceeding or investigation
involving him for which indemnity will or could be sought. With respect to any
action, suit, proceeding or investigation of which the Corporation is so
notified, the Corporation will be entitled to participate therein at its own
expense and/or to assume the defense thereof at its own expense, with legal
counsel reasonably acceptable to the Indemnitee. After notice from the
Corporation to the Indemnitee of its election so to assume such defense, the
Corporation shall not be liable to the Indemnitee for any legal or other
expenses subsequently incurred by the Indemnitee in connection with such claim,
other than as provided below in this Section 4. The Indemnitee shall have the
right to employ his own counsel in connection with such claim, but the fees and
expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded
that there may be a conflict of interest or position on any significant issue
between the Corporation and the Indemnitee in the conduct of the defense of such
action or (iii) the Corporation shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees and expenses
of counsel for the Indemnitee shall be at the expense of the Corporation, except
as otherwise expressly provided by this Article. The Corporation shall not be
entitled, without the consent of the Indemnitee, to assume the defense of any
claim brought by or in the right of the Corporation or as to which counsel for
the Indemnitee shall have reasonably made the conclusion provided for in clause
(ii) above.
5. Advance of Expenses. Subject to the provisions of Section 6 below,
in the event that the Corporation does not assume the defense pursuant to
Section 4 of this Article of any action, suit, proceeding or investigation of
which the Corporation receives notice under this
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Article, any expenses (including attorneys' fees) incurred by an Indemnitee in
defending a civil or criminal action, suit, proceeding or investigation or any
appeal therefrom shall be paid by the Corporation in advance of the final
disposition of such matter; provided, however, that the payment of such expenses
incurred by an Indemnitee in advance of the final disposition of such matter
shall be made only upon receipt of an undertaking by or on behalf of the
Indemnitee to repay all amounts so advanced in the event that it shall
ultimately be determined that the Indemnitee is not entitled to be indemnified
by the Corporation as authorized in this Article. Such undertaking shall be
accepted without reference to the financial ability of the Indemnitee to make
such repayment.
6. Procedure for Indemnification. In order to obtain indemnification or
advancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article, the
Indemnitee shall submit to the Corporation a written request, including in such
request such documentation and information as is reasonably available to the
Indemnitee and is reasonably necessary to determine whether and to what extent
the Indemnitee is entitled to indemnification or advancement of expenses. Any
such indemnification or advancement of expenses shall be made promptly, and in
any event within 60 days after receipt by the Corporation of the written request
of the Indemnitee, unless with respect to requests under Section 1, 2 or 5 the
Corporation determines within such 60-day period that the Indemnitee did not
meet the applicable standard of conduct set forth in Section 1 or 2, as the case
may be. Such determination shall be made in each instance by (a) a majority vote
of the directors of the Corporation consisting of persons who are not at that
time parties to the action, suit or proceeding in question ("disinterested
directors"), whether or not a quorum, (b) a majority vote of a committee of
disinterested directors designated by majority vote of disinterested directors,
whether or not a quorum, (c) a majority vote of a quorum of the outstanding
shares of stock of all classes entitled to vote for directors, voting as a
single class, which quorum shall consist of stockholders who are not at that
time parties to the action, suit or proceeding in question, (d) independent
legal counsel (who may, to the extent permitted by law, be regular legal counsel
to the Corporation) or (e) a court of competent jurisdiction.
7. Remedies. The right to indemnification or advances as granted by
this Article shall be enforceable by the Indemnitee in any court of competent
jurisdiction if the Corporation denies such request, in whole or in part, or if
no disposition thereof is made within the 60-day period referred to above in
Section 6. Unless otherwise required by law, the burden of proving that the
Indemnitee is not entitled to indemnification or advancement of expenses under
this Article shall be on the Corporation. Neither the failure of the Corporation
to have made a determination prior to the commencement of such action that
indemnification is proper in the circumstances because the Indemnitee has met
the applicable standard of conduct, nor an actual determination by the
Corporation pursuant to Section 6 that the Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the Indemnitee has not met the applicable standard of conduct.
The Indemnitee's expenses (including attorneys' fees) incurred in connection
with successfully establishing his right to indemnification, in whole or in
part, in any such proceeding shall also be indemnified by the Corporation.
8. Subsequent Amendment. No amendment, termination or repeal of this
Article or of the relevant provisions of the General Corporation Law of Delaware
or any other applicable
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laws shall affect or diminish in any way the rights of any Indemnitee to
indemnification under the provisions hereof with respect to any action, suit,
proceeding or investigation arising out of or relating to any actions,
transactions or facts occurring prior to the final adoption of such amendment,
termination or repeal.
9. Other Rights. The indemnification and advancement of expenses
provided by this Article shall not be deemed exclusive of any other rights to
which an Indemnitee seeking indemnification or advancement of expenses may be
entitled under any law (common or statutory), agreement or vote of stockholders
or disinterested directors or otherwise, both as to action in his official
capacity and as to action in any other capacity while holding office for the
Corporation, and shall continue as to an Indemnitee who has ceased to be a
director or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of the Indemnitee. Nothing contained in this
Article shall be deemed to prohibit, and the Corporation is specifically
authorized to enter into, agreements with officers and directors providing
indemnification rights and procedures different from those set forth in this
Article. In addition, the Corporation may, to the extent authorized from time to
time by its Board of Directors, grant indemnification rights to other employees
or agents of the Corporation or other persons serving the Corporation and such
rights may be equivalent to, or greater or less than, those set forth in this
Article.
10. Partial Indemnification. If an Indemnitee is entitled under any
provision of this Article to indemnification by the Corporation for some or a
portion of the expenses (including attorneys' fees), judgments, fines or amounts
paid in settlement actually and reasonably incurred by him or on his behalf in
connection with any action, suit, proceeding or investigation and any appeal
therefrom but not, however, for the total amount thereof, the Corporation shall
nevertheless indemnify the Indemnitee for the portion of such expenses
(including attorneys' fees), judgments, fines or amounts paid in settlement to
which the Indemnitee is entitled.
11. Insurance. The Corporation may purchase and maintain insurance, at
its expense, to protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan) against any expense,
liability or loss incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to indemnify
such person against such expense, liability or loss under the General
Corporation Law of Delaware.
12. Merger or Consolidation. If the Corporation is merged into or
consolidated with another corporation and the Corporation is not the surviving
corporation, the surviving corporation shall assume the obligations of the
Corporation under this Article with respect to any action, suit, proceeding or
investigation arising out of or relating to any actions, transactions or facts
occurring prior to the date of such merger or consolidation.
13. Savings Clause. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with any action, suit, proceeding or investigation, whether civil,
criminal or administrative, including an action by or in the right of the
Corporation, to the fullest extent permitted by any applicable portion of this
Article that shall not have been invalidated and to the fullest extent permitted
by applicable law.
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14. Definitions. Terms used herein and defined in Section 145(h) and
Section 145(i) of the General Corporation Law of Delaware shall have the
respective meanings assigned to such terms in such Section 145(h) and Section
145(i).
15. Subsequent Legislation. If the General Corporation Law of Delaware
is amended after adoption of this Article to expand further the indemnification
permitted to Indemnitees, then the Corporation shall indemnify such persons to
the fullest extent permitted by the General Corporation Law of Delaware, as so
amended.
TENTH. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute and this
Amended and Restated Certificate of Incorporation, and all rights conferred upon
stockholders herein are granted subject to this reservation.
ELEVENTH. This Article is inserted for the management of the business
and for the conduct of the affairs of the Corporation.
1. Number of Directors. Prior to the Annual Meeting, the number of
directors of the Corporation shall be determined by the Board of Directors.
Thereafter, so long as any shares of Class B Common Stock are outstanding, the
number of directors of the Corporation shall be fixed at eleven or at such other
number as shall be determined by the affirmative vote both of the holders of at
least 80% of the shares of Class A Common Stock issued and outstanding and
entitled to vote and of the holders of at least 80% of the shares of Class B
Common Stock issued and outstanding and entitled to vote. At such time as no
shares of Class B Common Stock shall be outstanding, the number of directors
shall be determined as provided in the By-Laws of the Corporation.
2. Removal. Directors of the Corporation elected by the holders of
Class A Common Stock, voting separately as a class, may be removed only for
cause and only by the affirmative vote of the holders of at least 80% of the
outstanding shares of Class A Common Stock, voting separately as a class.
Directors of the Corporation elected by the holders of Class B Common Stock,
voting separately as a class, may be removed only for cause and only by the
affirmative vote of the holders of at least 80% of the outstanding shares of
Class B Common Stock, voting separately as a class. Notwithstanding the
foregoing, at such time as no shares of Class B Common Stock are outstanding,
Directors of the Corporation may be removed only for cause and only by the
affirmative vote of the holders of at least 80% of the outstanding shares
entitled to vote.
3. Vacancies. A vacancy in any directorship filled by the holders of
Class A Common Stock, voting separately as a class, or a vacancy resulting from
an enlargement of the board which the holders of Class A Common Stock are
entitled to elect as contemplated by Section A.2(b), shall be filled only by a
majority vote of any remaining director or directors elected by the holders of
Class A Common Stock, voting separately as a class. A vacancy in any
directorship filled by the holders of Class B Common stock, voting separately as
a class, or a vacancy resulting from an enlargement of the board which the
holders of Class B Common Stock are entitled to elect as contemplated by Section
A.2(b), shall be filled only by vote of the holders
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of Class B Common Stock, voting separately as a class, or by a majority vote of
any remaining director or directors elected by the holders of Class B Common
Stock, voting separately as a class. Notwithstanding the foregoing, at such time
as no shares of Class B Common Stock are outstanding, any vacancy in the Board
of Directors, however occurring, including a vacancy resulting from an
enlargement of the board, shall be filled only by a vote of a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. A director elected to fill a vacancy shall be elected to hold office
until the next election of the class for which such director shall have been
chosen, subject to the election and qualification of his successor and to his
earlier death, resignation or removal.
4. Stockholder Nominations and Introduction of Business, Etc. Advance
notice of stockholder nominations for election of directors and other business
to be brought by stockholders before a meeting of stockholders shall be given in
the manner provided by the By-Laws of the Corporation.
5. Amendments to Articles of Incorporation. Notwithstanding any other
provisions of law, this Amended and Restated Certificate of Incorporation or the
By-Laws of the Corporation, and notwithstanding the fact that a lesser
percentage may be specified by law, the affirmative vote of the holders of at
least 80% of the issued and outstanding Class A Common Stock, voting separately
as class, and the affirmative vote of the holders of at least 80% of the issued
and outstanding Class B Common Stock, voting separately as class, shall be
required to amend, repeal, or to adopt any provision inconsistent with, Section
A of Article FOURTH, this Article ELEVENTH, Article THIRTEENTH or Article
FOURTEENTH.
TWELFTH. The holders of the capital stock of the Corporation shall have
no preemptive rights to subscribe for any shares of any class of stock of the
Corporation whether now or hereafter authorized.
THIRTEENTH. Special meetings of stockholders may be called at any time
by only the Chairman of the Board of Directors, the President or the Board of
Directors. Business transacted at any special meeting of stockholders shall be
limited to matters relating to the purpose or purposes stated in the notice of
meeting.
FOURTEENTH. The holders of Class A Common Stock may not take any action
by written consent in lieu of a meeting.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Sixth Amended and Restated Certificate of Incorporation
to be signed by its Secretary this 17th day of November, 1999.
EDISON SCHOOLS INC.
By: /s/ Laura Eshbaugh
-------------------------------
Laura Eshbaugh
Secretary
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