SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K12G3
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report October 1, 1999
(Date of earliest event reported) (September 30, 1999)
CTC COMMUNICATIONS GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-3469590
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
220 Bear Hill Rd., Waltham, Massachusetts 02451
(Address of principal executive offices) (Zip Code)
(781) 466-8080
(Registrant's telephone number including area code)
(Former name or former address if changed since last
report)
<PAGE>
Item 5. Other Events
Effective on September 30, 1999, CTC Communications Corp, a Massachusetts
corporation ("CTC Communications"), reorganized into a holding company form
of organizational structure, whereby CTC Communications Group, Inc., a
Delaware corporation ("CTC Group" or the "Registrant") became the holding
company. The new organizational structure will allow CTC Group to manage its
organization more effectively and broadens the alternatives for future
financing.
The holding company organizational structure, which moved the jurisdiction of
the enterprise to Delaware from Massachusetts, was effected by a merger
conducted pursuant to Section 252 of the Delaware General Corporation Law and
Section 79 of Chapter 156B of the Massachusetts General Corporation Law (the
"Merger"), with over 2/3 of the stockholders of CTC Communications approving
the Merger at its Annual Meeting of Stockholders. In the Merger, CTC-Newco,
Inc., a Delaware corporation organized for the purpose of the Merger and a
subsidiary of CTC Group, merged with and into CTC Communications, the
surviving corporation. As a result of the Merger, the existence of CTC-
Newco, Inc. ceased and CTC Group became the sole shareholder of CTC
Communications. In the Merger, each share of Common Stock, $.01 par value,
and each share of Series A Convertible Preferred Stock, $1.00 par value, of
CTC Communications was converted into one share of Common Stock, $.01 par
value and one share of Series A Convertible Preferred Stock, $1.00 par value,
of CTC Group. CTC Group is authorized to issue up to 100 million shares of
common stock and 10 million shares of preferred stock.
The conversion of shares of CTC Communications' stock in the Merger occurred
without an exchange of certificates. Accordingly, certificates formerly
representing shares of outstanding stock of CTC Communications are deemed to
represent the same number of shares of stock of CTC Group until such
certificates are submitted to CTC Group's transfer agent for transfer. The
change to the holding company structure was tax free for federal income tax
purposes for stockholders.
The common stock of CTC Group is listed on the Nasdaq National Market under
the same symbol as its predecessor, "CPTL", with a new Cusip number of
126419100.
Pursuant to Section 12g-3(f) of the Securities Exchange Act of 1934, as
amended, the shares of common stock, par value $.01 per share, of CTC
Communications Group, Inc., a Delaware corporation, as successor issuer to
CTC Communications Corp., a Massachusetts corporation, are deemed registered
under Section 12(g) of the Exchange Act pursuant to Section 12g-3(a).
A copy of the press release issued by CTC Communications describing the
transaction is attached hereto as Exhibit 99.1.
The Registrant hereby incorporates by reference the Amended and Restated
Agreement and Plan of Reorganization dated as of March 1, 1999 among the
Registrant, CTC Communications Corp. and CTC-Newco, Inc. (filed as an Exhibit
to CTC Communications Corp. Registration Statement on Form S-1 (File No. 333-
77709)) and the press release attached hereto as Exhibit 99.1, each made a
part hereof, into this Item 5.
Item 7c. Exhibits.
Exhibit 2.1** Amended and Restated Agreement and Plan of
Reorganization dated as of March 1, 1999 among the
Registrant, CTC Communications Corp. and CTC-Newco,
Inc.
Exhibit 3.1 Restated Certificate of Incorporation of CTC
Communications Group, Inc.
Exhibit 99.1 Press Release issued by CTC Communications Corp. on
October 1, 1999.
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** Incorporated by reference to an Exhibit filed as part of CTC
Communications Corp. Registration Statement on Form S-1 (File No. 333-77709).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CTC COMMUNICATIONS GROUP, INC.
By: /s/ John D. Pittenger
John D. Pittenger,
Executive Vice President, Finance and Administration
Dated: October 1, 1999
EXHIBIT INDEX
Exhibit 3.1 Restated Certificate of Incorporation of CTC
Communications Group, Inc.
Exhibit 99.1 Press Release issued by CTC Communications Corp. on
October 1, 1999.
Exhibit 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
CTC COMMUNICATIONS GROUP, INC.
The undersigned, being the President and Secretary, respectively,
of CTC COMMUNICATIONS GROUP, INC., (the "Corporation"), pursuant to Section
245 of the Delaware General Corporation Law, does hereby certify the
following:
1. The name of the Corporation is CTC Communications Group, Inc.
2. The Certificate of Incorporation of the Corporation was filed
with the Secretary of State on October 21, 1998 under the name
"CTC Telecom Corp." and an Amendment to the Certificate of the
Corporation was filed with the Secretary of State on January 8,
1999 changing the name of the Corporation to "CTC Communications
Group, Inc."
3. The following resolutions establishing a new series of Preferred
Shares were adopted by the Board of Directors in accordance with
Section 151 of the General Corporation Laws of the State of
Delaware:
RESOLVED, that 666,666 Preferred shares, with a par value of
$1.00 per share, are to be designated Series A Convertible
Preferred Stock; and be it further
RESOLVED, that the relative rights, privileges, preferences,
restrictions and/or limitations or those shares designated Series
A are as set forth in Article FOURTH of this Certificate of
Incorporation.
4. The Certificate of Incorporation is hereby amended by changing
the designation of the registered and principal office of this
Corporation in Article SECOND to read as follows:
SECOND: The address of the registered and principal office of
this Corporation in this state is c/o The Corporation Trust
Company, Corporation Trust Center, 1209 Orange St., in the City
of Wilmington, County of New Castle, State of Delaware 19801 and
the name of the registered agent at said address is The
Corporation Trust Company.
5. The Certificate of Incorporation is hereby further amended by
adding the following Section 16 of Article FOURTH, and by adding
the following Articles NINTH and TENTH:
FOURTH:
16. Preemptive Rights. The Purchasers who are parties to
the Purchase Agreement have certain preemptive rights set forth
in the Purchase Agreement entitling them, in certain
circumstances, to acquire securities to be issued by the
Corporation.
NINTH: Except as otherwise provided in the
provisions establishing a class of stock, the number of
authorized shares of any class or series of 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 voting power of the corporation entitled to
vote irrespective of the provisions of Section 242(b)(2) of the
General Corporation Law of the State of Delaware.
TENTH: If at any time this corporation shall have a
class of stock registered pursuant to the provisions of the
Securities Exchange Act of 1934, for so long as such class is so
registered, any action by the stockholders of such class must be
taken at an annual or special meeting of stockholders and may not
be taken by written consent.
6. The Restated Certificate of Incorporation was duly adopted
pursuant to Section 245 of the Delaware General Corporation Law
by the Corporation's board of directors and by written consent of
the sole stockholder of the Corporation, in accordance with
Sections 242 and 228(a) of the Delaware General Corporation Law.
7. The exact text of the Restated Certificate of Incorporation is as
follows:
FIRST: The name of the corporation is CTC COMMUNICATIONS
GROUP, INC.
SECOND: The address of the registered and principal office of
this Corporation in this state is c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange St., in the City of Wilmington, County
of Kent, State of Delaware 19801 and the name of the registered agent at said
address is The Corporation Trust Company.
THIRD: The purpose of the corporation is to engage in any
lawful act or activity for which corporations may be organized under the
corporation laws of the State of Delaware.
FOURTH: (a) The corporation shall be authorized to issue
two classes of stock to be designated respectively Common Stock and Preferred
Stock. The total number of shares of all classes of stock which the
Corporation has authority to issue is One-Hundred Ten Million (110,000,000),
consisting of One-Hundred Million (100,000,000) shares of Common Stock, $0.01
par value (the "Common Stock"), and Ten Million (10,000,000) shares of
Preferred Stock, $1.00 par value (the "Preferred Stock"). Of the authorized
shares of Preferred Stock, Six Thousand Six Hundred Sixty-Six (666,666)
shares shall be designated "Series A Convertible Preferred Stock."
The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby authorized, subject to limitations
prescribed by law or set forth in this Certificate of Incorporation, to fix
by resolution or resolutions the designations, powers, preferences and
rights, and the qualifications, limitations or restrictions thereof, of each
such series of Preferred Stock, including without limitation authority to fix
by resolution or resolutions, the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption (including sinking fund
provisions), redemption price or prices, and liquidation preferences of any
wholly unissued series of Preferred Stock, and the number of shares
constituting any such series and the designation thereof, or any of the
foregoing.
Subject to the limitations set forth in this Certificate of
Incorporation, the Board of Directors is further authorized to increase (but
not above the total number of authorized shares of the class) or decrease
(but not below the number of shares of any such series then outstanding) the
number of shares of any series, the number of which was fixed by it,
subsequent to the issue of shares of such series then outstanding, subject to
the powers, preferences and rights, and the qualifications, limitations and
restrictions thereof stated in the resolution of the Board of Directors
originally fixing the number of shares of such series. If the number of
shares of any series is so decreased, then the shares constituting such
decrease shall resume the status which they had prior to the adoption of the
resolution originally fixing the number of shares of such series.
(b) The relative and other rights, preferences, privileges, and
restrictions of the Series A Convertible Preferred Stock and the holders
thereof (collectively, the "Stockholders") are as follows:
1. Designation. The number of shares of the series designated "Series A
Convertible Preferred Stock" (hereinafter referred to as the "Series A
Preferred Stock"), shall be 666,666, which number may be decreased (but not
increased) by the Board of Directors without a vote of stockholders;
provided, however, that such number may not be decreased below the number of
then currently outstanding shares of Series A Preferred Stock. All
capitalized terms used in this Certificate of Incorporation and not otherwise
defined shall have the meaning given to such terms in Paragraph 14 of this
Section (b) of Article FOURTH.
2. Dividends. The holders of Series A Preferred Stock shall be entitled to
participate in all dividends that are declared and paid on Common Stock on
the same basis as if all of the Series A Preferred Stock had been converted
to Common Stock in accordance with Paragraph 7 of this Section (b) of Article
FOURTH.
3. Liquidation Preference. (a) In the event of any liquidation, dissolution
or winding up of the affairs of the Corporation, either voluntarily or
involuntarily, each holder of Series A Preferred Stock shall be entitled,
after provision for the payment of the Corporation's debts and other
liabilities, to be paid in cash in full, before any distribution is made on
any Junior Securities, an amount in cash (the "Liquidation Amount") equal to
the greater of (i) the Series A Preference Amount, or (ii) the Minimum
Preference Amount, provided, however, if the amount each such holder of
Series A Preferred Stock would have received had such holder converted all
Series A Preferred Stock held by such holder into Common Stock immediately
prior to such liquidation, dissolution or winding up of the Corporation would
be equal to or greater than the Liquidation Amount, the Series A Preferred
Stock shall be automatically converted into Common Stock in accordance with
the terms herein, effective immediately prior to such liquidation,
dissolution or winding up of the Corporation. If, upon any such liquidation,
dissolution or other winding up of the affairs of the Corporation, the net
assets of the Corporation distributable among the holders of all outstanding
Senior Preferred Stock shall be insufficient to permit the payment to such
holders of the full preferential amount to which they are entitled with
respect to their Senior Preferred Stock, then the entire net assets of the
Corporation remaining after the provision for the payment of the
Corporation's debts and other liabilities shall be distributed among the
holders of the Senior Preferred Stock ratably in proportion to the full
preferential amounts to which they would otherwise be respectively entitled
on account of their Senior Preferred Stock. Upon any such liquidation,
dissolution or winding up of the Corporation, after the holders of Senior
Preferred Stock shall have been paid in full the preferential amounts to
which they shall be entitled to receive on account of their Senior Preferred
Stock, the remaining net assets of the Corporation shall be distributed to
the other stockholders of the Corporation as their respective interests may
appear.
(b) Consolidation, Merger, etc. A consolidation or merger of the
Corporation with or into any other corporation or corporations (a "merger")
other than a merger in which the holders of the Corporation's Common Stock
own a majority of the voting power of the surviving corporation, or a Sale of
the Corporation, or the effectuation by the Corporation or its stockholders
of a transaction or a series of related transactions in which more than fifty
percent (50%) of the voting power of the Corporation is disposed of (a
"reorganization") shall be deemed to constitute a liquidation, dissolution or
winding up of the Corporation within the meaning of this Paragraph 3,
provided, however, the transfer of all or substantially all of the
Corporation's assets to one or more wholly owned subsidiaries of the
Corporation shall not be deemed a liquidation, dissolution or winding up of
the Corporation within the meaning of this Paragraph 3. Any reorganization
of the Corporation required by any court or administrative body in order to
comply with any provision of law shall be deemed to be an involuntary
liquidation, dissolution or winding up of the Corporation unless the
preferences, qualifications, limitations, restrictions and special or
relative rights granted to or imposed upon the holders of Series A Preferred
Stock are not adversely affected by such reorganization. Notwithstanding the
foregoing, a consolidation, merger, Sale of the Corporation or reorganization
shall not be deemed a liquidation, dissolution or winding up of the
Corporation for the purposes of this Paragraph 3 if (i) the holders of the
Requisite Percentage of the Series A Preferred Stock waive in writing the
provisions of the preceding two sentences, as applicable and (ii) the Board
of Directors of the Corporation consents to such waiver.
(c) Holders of Series A Preferred Stock shall not be entitled to any
additional distribution in the event of any liquidation, dissolution or
winding up of the affairs of the Corporation in excess of the amounts set
forth in this Paragraph 3.
4. Voting.
(a) Rights of Series A Preferred Stock. Except as otherwise required
by law or as provided herein and subject to the rights of any class or series
of capital stock of the Corporation that hereafter may be issued in
compliance with the terms of these Articles of Incorporation, the shares of
the Series A Preferred Stock shall vote together with the shares of the
Corporation's Common Stock and any other shares of the Corporation's stock
which, by its terms, is entitled to vote together with the Series A Preferred
Stock and the Common Stock as a single class at any annual or special meeting
of stockholders of the Corporation, or may act by written consent in the same
manner as the Corporation's Common Stock, upon the following basis: each
holder of shares of Series A Preferred Stock shall be entitled to such number
of votes for the Series A Preferred Stock held by such holder on the record
date fixed for such meeting, or on the effective date of such written
consent, as shall be equal to the lesser of (i) the whole number of shares of
the Corporation's Common Stock issuable upon conversion and exercise of all
shares of Series A Preferred Stock and Warrants held by such holder
immediately after the close of business on the record date fixed for such
meeting or the effective date of such written consent and (ii) the number of
shares of Series A Preferred Stock held by such holder multiplied by 2.476.
5. Special Approval Rights.
(a) Restricted Actions. So long as any shares of Series A Preferred
Stock are outstanding, the affirmative vote of the holders of the Requisite
Percentage of Series A Preferred Stock, acting by written consent or voting
separately as a single class in person or by proxy, at a special or annual
meeting of holders of Series A Preferred Stock called for the purpose, shall
be necessary to authorize the Corporation to take any of the following
actions (herein, each a "Restricted Action"):
(A) authorize, or increase or permit any Subsidiary to authorize or
increase, the authorized number of shares of, or issue additional shares
of Series A Preferred Stock or any class or series of the Corporation's or
any Subsidiary's capital stock or options, warrants or other rights to
acquire any such capital stock ranking with respect to liquidation
preference, dividends or voting rights, senior in right to, or on a parity
with, the Series A Preferred Stock or entitling the holders thereof to
receive any dividends or distributions (other than stock dividends) at any
time when any shares of Series A Preferred Stock are outstanding; provided
however, that nothing contained in this Paragraph 5 shall restrict the
Company from authorizing or issuing (i) Common Stock or warrants or
options to acquire Common Stock or (ii) Straight Preferred Stock;
(B) amend, repeal or change, directly or indirectly, any of the
provisions of the Certificate of Incorporation of the Corporation or the
By-laws of the Corporation in any manner that would alter or change the
powers, preferences or special rights of the shares of Series A Preferred
Stock so as to affect them adversely;
(C) at any time when the outstanding shares of Series A Preferred
Stock and Preferred Stock Derivatives represent at least four and 55/100
percent (4.55%) of the Corporation's Common Stock Deemed Outstanding,
authorize or effect the declaration or payment of dividends or other
distributions (other than stock dividends) upon, or the redemption or
repurchase of, any equity securities of the Corporation other than
repurchase of Common Stock from departing employees that has been approved
by the Compensation Committee and the Board of Directors; or
(D) at any time when the outstanding shares of Series A Preferred
Stock and Preferred Stock Derivatives represent at least four and 55/100
percent (4.55%) of the Corporation's Common Stock Deemed Outstanding,
permit the Board of Directors of the Corporation to consist of more than
eleven (11) members.
(b) Approval. The approval rights of the holders of shares of Series
A Preferred Stock to authorize the Corporation to take any of the Restricted
Actions as provided in this Paragraph 5 may be exercised at any annual
meeting of stockholders, at a special meeting of the holders of Series A
Preferred Stock held for such purpose or by written consent. At each meeting
of stockholders at which the holders of shares of Series A Preferred Stock
shall have the right, voting separately as a single class, to authorize the
Corporation to take any Restricted Action as provided in this Paragraph 5,
the presence in person or by proxy of the holders of the Requisite Percentage
of Series A Preferred Stock entitled to vote on the matter shall be necessary
and sufficient to constitute a quorum. At any such meeting or at any
adjournment thereof, in the absence of a quorum of the holders of shares of
Series A Preferred Stock, a majority of the holders of such shares present in
person or by proxy shall have the power to adjourn the meeting as to the
actions to be taken by the holders of shares of Series A Preferred Stock from
time to time and place to place without notice other than announcement at the
meeting until a quorum shall be present.
6. Compensation Committee. Unless otherwise consented to by the holders of
the Requisite Percentage of outstanding Series A Preferred Stock, so long as
any shares of Series A Preferred Stock are outstanding and so long as the
outstanding shares of Series A Preferred Stock and Preferred Stock
Derivatives represent at least four and 55/100 percent (4.55%) of the
Corporation's Common Stock Deemed Outstanding, the Board of Directors shall
elect a Compensation Committee of the Board of Directors consisting of three
(3) individuals, one of whom shall be a director designated in writing by the
holders of a majority of the Series A Preferred Stock, and the other two of
which shall consist of independent directors who are not employed by the
Corporation and are not Affiliates of those stockholders who are Affiliates
of the Corporation ("Independent Directors"), which Compensation Committee
shall be increased by one (1) member, which member shall be the member added
pursuant to Section 7.6 of the Purchase Agreement or another member
satisfactory to the holders of the Requisite Percentage of outstanding Series
A Preferred Stock and the Corporation's chief executive officer. So long as
any shares of Series A Preferred Stock are outstanding and so long as the
outstanding shares of Series A Preferred Stock and Preferred Stock
Derivatives represent at least four and 55/100 percent (4.55%) of the
Corporation's Common Stock Deemed Outstanding, decisions of the Compensation
Committee must be made by the affirmative vote of at least three (3) members.
The Compensation Committee shall approve all recommendations to the Board of
Directors as to the following, and the Board of Directors shall not have the
power to approve any of the following without such recommendation, so long as
any shares of Series A Preferred Stock are outstanding and so long as the
outstanding shares of Series A Preferred Stock and Preferred Stock
Derivatives represent at least four and 55/100 percent (4.55%) of the
Corporation's Common Stock Deemed Outstanding, provided however, that nothing
contained herein shall restrict the Corporation from honoring its contractual
obligations existing on April 10, 1998 and disclosed in the Purchase
Agreement:
(i) the terms of employment, including compensation, of all new
senior management employees;
(ii) any increases in the compensation or benefits of any senior
management employee;
(iii) the terms of, and allocations of awards to senior management
employees under, any bonus, profit-sharing, or similar incentive plan
arrangements;
(iv) the award of any other incentive or bonus compensation to senior
management employees;
(v) the issuance of capital stock or Convertible Securities to any
employees or directors of the Corporation or its Subsidiaries other than
upon exercise of options or conversion of Convertible Securities not
issued in violation of this Paragraph 6 or in violation of the Articles of
Organization of CTC Communications Corp., a Massachusetts corporation; and
(vi) the issuance of capital stock or Convertible Securities to
consultants to the Corporation or its Subsidiaries other than Common
Stock, warrants and options to purchase Common Stock representing not more
than 40,000 shares of Common Stock in the aggregate on a fully diluted
basis with respect to all such issuances during any fiscal year other than
upon exercise of options or conversion of Convertible Securities not
issued in violation of this Paragraph 6 or of the Articles of Organization
of CTC Communications Corp., a Massachusetts corporation.
7. Conversion Rights.
(a) Conversion Procedure.
(i) At any time and from time to time, any holder of Series A Preferred
Stock shall have the right, at its option, to convert all or any portion
of each share of Series A Preferred Stock (including any fraction of a
share) held by such holder into a number of shares of fully paid and
nonassessable Common Stock computed by dividing the Series A Preference
Amount by the Conversion Price in effect on the Conversion Date; provided,
however, that in the event of the conversion of Series A Preference Stock
pursuant to Paragraph 3(a) or Paragraph 7(g) of this Section (b) of
Article FOURTH, the number of shares of fully paid and nonassessable
Common Stock into which each Share of Series A Preferred Stock shall
convert shall be computed by dividing the greater of the Series A
Preference Amount or $21.39 by the Conversion Price in effect on the
Conversion Date.
Notwithstanding any other provision hereof, if a conversion of Series A
Preferred Stock is to be made in connection with a Sale of the
Corporation, such conversion may, at the election of any holder tendering
Series A Preferred Stock for conversion, be conditioned upon the
consummation of the Sale of the Corporation, in which case such conversion
shall not be deemed to be effective until immediately prior to the
consummation of such Sale of the Corporation.
(ii) Subject to the provisions of Paragraph 7(a)(i), each conversion of
Series A Preferred Stock shall be deemed to have been effected as of the
close of business on the effective date of such conversion specified in a
written notice (the "Conversion Date"); provided, however, that the
Conversion Date shall not be a date earlier than the date such notice is
so given, and if such notice does not specify a conversion date, the
Conversion Date shall be deemed to be the date such notice is given to the
Corporation. On the Conversion Date, the rights of the holder of such
Series A Preferred Stock as such holder (including the right to receive
dividends) shall cease and the Person or Persons in whose name or names
any certificate or certificates for shares of Common Stock are to be
issued upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby.
(iii) As soon as practicable after the Conversion Date, but in any event
within ten (10) business days after the holder has delivered the
certificates (or affidavits of loss in form and substance reasonably
satisfactory to the Company) evidencing the shares of Series A Preferred
Stock converted into shares of Common Stock in accordance herewith, the
Corporation shall deliver to the converting holder:
(x) a certificate or certificates representing, in the
aggregate, the number of shares of Common Stock issued upon such
conversion, in the same name or names as the certificates representing
the converted shares and in such denomination or denominations as the
converting holder shall specify and a check for cash with respect to
any fractional interest in a share of Common Stock as provided in
clause (vii) of this Paragraph 7(a); and
(y) a certificate representing any shares that were represented
by the certificate or certificates delivered to the Corporation in
connection with such conversion but that were not converted.
(iv) The issuance of certificates for shares of Common Stock upon
conversion of Series A Preferred Stock shall be made without charge to the
holders of such Series A Preferred Stock for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
conversion and the related issuance of shares of Common Stock. Upon
conversion of any shares of Series A Preferred Stock, the Corporation
shall take all such actions as are necessary in order to insure that the
Common Stock so issued upon such conversion shall be validly issued, fully
paid and nonassessable.
(v) The Corporation shall not close its books against the transfer of
Series A Preferred Stock or of Common Stock issued or issuable upon
conversion of Series A Preferred Stock in any manner that interferes with
the timely conversion of Series A Preferred Stock. The Corporation shall
assist and cooperate with any holder of shares of Series A Preferred Stock
required to make any governmental filings or obtain any governmental
approval prior to or in connection with any conversion of shares of Series
A Preferred Stock hereunder (including, without limitation, making any
filings required to be made by the Corporation).
(vi) 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 issuance upon the conversion of the Series A Preferred Stock, such
number of shares of Common Stock as are issuable upon the conversion of
all outstanding Series A Preferred Stock. All shares of Common Stock that
are so issuable shall, when issued, be duly and validly issued, fully paid
and nonassessable. The Corporation shall take all such actions as may be
necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or governmental regulation
applicable to the Corporation or any requirements of any domestic
securities exchange upon which shares of Common Stock may be listed
(except for official notice of issuance which shall be immediately
delivered by the Corporation upon each such issuance).
(vii) No fractional shares of Common Stock or script shall be issued upon
conversion of shares of the Series A Preferred Stock. If more than one
share of Series A Preferred Stock shall be surrendered for conversion at
any one time by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of Series A Preferred Stock so surrendered.
Instead of any fractional shares of Common Stock which would otherwise be
issuable upon conversion of any shares of Series A Preferred Stock, the
Corporation shall pay a cash adjustment in respect of such fractional
interest equal to the fair market value of such fractional interest as
determined by the Corporation's Board of Directors.
(b) Conversion Price. The initial conversion price shall be nine dollars
($9.00), which may be adjusted from time to time hereafter (as so adjusted,
the "Conversion Price") . If and whenever on or after the original date of
issuance of the Series A Preferred Stock the Corporation issues or sells, or
in accordance with Paragraph 7(c) is deemed to have issued or sold, any
shares of its Common Stock or Convertible Securities for a consideration per
share less than the Conversion Price in effect immediately prior to the time
of such issue or sale, then upon such issue or sale, the Conversion Price
shall be reduced to an amount determined by dividing (a) the sum of (1) the
product derived by multiplying (i) the Conversion Price in effect immediately
prior to such issue or sale times (ii) the number of shares of Common Stock
Deemed Outstanding immediately prior to such issue or sale, plus (2) the
consideration, if any, received (or deemed received pursuant to Paragraph
7(c)(ii) below) by the Corporation upon such issue or sale, by (b) the number
of shares of Common Stock Deemed Outstanding immediately after such issue or
sale.
(c) Effect on Conversion Price of Certain Events. For purposes of
determining the adjusted Conversion Price under Paragraph 7, the following
shall be applicable:
(i) Issuance of Convertible Securities. If the Corporation in any manner
issues or sells any Convertible Securities, whether or not the rights to
exchange or convert any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable
upon such conversion or exchange is less than the Conversion Price in
effect immediately prior to the time of such issue or sale, then the
maximum number of shares of Common Stock issuable upon conversion or
exchange of such Convertible Securities shall be deemed to be outstanding
and to have been issued and sold by the Corporation at the time of the
issuance or sale of such Convertible Securities for such price per share.
For the purposes of this paragraph, the "price per share for which Common
Stock is issuable" shall be determined by dividing (a) the total amount
received or receivable by the Corporation as consideration for the issue
or sale of such Convertible Securities, plus the cumulative minimum
aggregate amount of additional consideration, if any, payable to the
Corporation upon the exercise, conversion or exchange thereof and, if
applicable, the exercise, conversion and exchange of any other Convertible
Securities that such Convertible Securities may be converted into or
exchanged for, by (b) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible
Securities. No further adjustment of the Conversion Price shall be made
when Common Stock and, if applicable, any other Convertible Securities,
are actually issued upon the exercise, conversion or exchange of such
Convertible Securities.
(ii) Change in Exercise Price or Conversion Rate. If the additional
consideration payable to the Corporation upon the exercise, conversion or
exchange of any Convertible Securities, or the rate at which any
Convertible Securities are convertible into or exchangeable for Common
Stock should change at any time, the Conversion Price in effect at the
time of such change shall be readjusted to the Conversion Price that would
have been in effect at such time had such Convertible Securities that are
still outstanding provided for such changed additional consideration or
changed conversion rate, as the case may be, at the time such Convertible
Securities were initially granted, issued or sold; and on the termination
date of any right to exercise, convert or exchange such Convertible
Securities without such right having been duly exercised, the Conversion
Price then in effect hereunder shall be increased to the Conversion Price
that would have been in effect at the time of such termination had such
Convertible Securities, to the extent outstanding immediately prior to
such termination, never been issued.
(iii) Exceptions for Excluded Securities. Notwithstanding the foregoing,
no adjustments shall be made under this Paragraph 7(c) with respect to the
issuance of any Excluded Securities.
(iv) Valuation of Non-Cash Consideration. In the event that Convertible
Securities are issued for consideration other than cash, the value of such
consideration shall be made by a good faith determination by the Board.
(d) Subdivision or Combination of Common Stock. If the Corporation at any
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to such combination
shall be proportionately reduced, and conversely, in the event the
outstanding shares of Common Stock shall be combined (by reverse stock split
or otherwise) into a smaller number of shares, the Conversion Price in effect
immediately prior to such combination shall be proportionately increased. In
any such event all numbers, percentages, computations and the like in this
Section (b) of Article FOURTH shall be deemed modified as necessary to give
appropriate effect to such subdivision or combination.
(e) Certain Events. If an event not specified in this Paragraph 7 occurs
that has substantially the same economic effect on the Series A Preferred
Stock as those specifically enumerated, then this Paragraph 7 shall be
construed liberally, mutatis mutandis, in order to give the Series A
Preferred Stock the intended benefit of the protections provided under this
Paragraph 7. In such event, the Corporation's Board of Directors shall make
an appropriate adjustment in the Conversion Price so as to protect the rights
of the holders of Series A Preferred Stock; provided that no such adjustment
shall increase the Conversion Price as otherwise determined pursuant to this
Paragraph 7 or decrease the number of shares of Common Stock issuable upon
conversion of each share of Series A Preferred Stock.
(f) Notices.
(i) Immediately upon any adjustment of the Conversion Price, the
Corporation shall give written notice thereof to all holders of Series A
Preferred Stock, setting forth in reasonable detail and certifying the
calculation of such adjustment.
(ii) The Corporation shall give written notice to all holders of Series A
Preferred Stock at least twenty (20) days prior to the date on which the
Corporation closes its books or takes a record (a) with respect to any
dividend or distribution upon Common Stock, (b) with respect to any pro
rata subscription offer to holders of Common Stock or (c) for determining
rights to vote with respect to any dissolution or liquidation.
(g) Mandatory Conversion. Each share of Series A Preferred Stock shall
automatically be converted into fully paid and nonassessable shares of Common
Stock of the Corporation on the basis set forth in Paragraph 7(a) upon not
less than 10 days prior written notice of conversion (the "Conversion
Notice") from the Corporation, which Conversion Notice and mandatory
conversion shall not be effective unless (i) the average closing bid price
(or closing sales price, as applicable) per share for the Corporation's
Common Stock on the Nasdaq Stock Market (or such national stock exchange upon
which the Corporation's Common Stock is then listed), for the period of
thirty (30) consecutive trading days ending on the last trading day prior to
the giving of the Conversion Notice, is (aa) in the case of a Conversion
Notice given prior to April 10, 2002, at least three hundred percent (300%)
of the highest Conversion Price in effect during any portion of such thirty
(30) trading day period or (bb) in the case of a Conversion Notice given on
or after April 10, 2002, at least one hundred percent (100%) of the highest
Conversion Price in effect during any portion of such thirty (30) trading day
period, and (ii) a "Shelf Registration" pursuant to the Registration Rights
Agreement with respect to the "Registrable Securities" (including those
issuable upon such conversion) shall be effective as of the time the Series A
Preferred Stock converts into Common Stock. Holders of shares of Series A
Preferred Stock so converted may deliver to the Corporation at its principal
office (or such other office or agency of the Corporation as the Corporation
may designate by notice in writing to such holders) during its usual business
hours, the certificate or certificates for the shares so converted. At such
time as at least 500,000 shares of Series A Preferred Stock shall have been
converted into Common Stock pursuant to this Paragraph 7, all other then
outstanding shares of Series A Preferred Stock shall thereupon automatically
be converted into fully paid and nonassessable shares of Common Stock of the
Corporation in the basis set forth in Paragraph 7(a). As promptly as
practicable after such conversion, the Corporation shall issue and deliver to
such holder a certificate or certificates for the number of whole shares of
Common Stock to which such holder is entitled, together with any cash
dividends and payment in lieu of fractional shares to which such holder may
be entitled pursuant to this Paragraph 7. Until such time as a holder of
shares of Series A Preferred Stock shall surrender its certificate or
certificates therefor as provided above, such certificates shall be deemed to
represent the shares of Common Stock to which such holder shall be entitled
upon the surrender thereof.
8. Redemption.
(a) The Series A Preferred Stock may be redeemed (in whole or in part) at
the option of the holders of the Requisite Percentage of Series A Preferred
Stock on or after the Maturity Date (an "Optional Redemption"). In any such
case, the holders of the Requisite Percentage of Series A Preferred Stock
shall notify the Corporation in writing of its or their intent to exercise
the rights afforded by this Paragraph 8(a) and specify a date not less than
90 nor more than 180 days from the date of such notice on which the Series A
Preferred Stock shall be redeemed (the "Optional Redemption Date"). Upon
receipt of such notice, the Corporation shall promptly notify the remaining
holders of the Series A Preferred Stock of the Optional Redemption Date. The
remaining holders have the right to participate in such redemption if they so
elect by giving the Corporation written notice to such effect within 20 days
of having received such notice. The Corporation shall redeem on the Optional
Redemption Date all shares of Series A Preferred Stock being redeemed in cash
by wire transfer of immediately available funds in an amount equal to the
greater of the Series A Preference Amount of such shares or the Minimum
Preference Amount of such shares to the extent funds are legally available
for such redemption.
(b) If the funds of the Corporation legally available for redemption of
shares of Series A Preferred Stock on an Optional Redemption Date are
insufficient to redeem the total number of outstanding shares of Series A
Preferred Stock entitled to redemption, the holders of shares of Series A
Preferred Stock entitled to redemption shall share ratably in any funds
legally available for redemption of such shares according to the respective
amounts that would be payable with respect to the full number of shares owned
by them if all such outstanding shares were redeemed in full. At any time
thereafter when additional funds of the Corporation are legally available for
the redemption of such shares of Series A Preferred Stock, such funds will be
used at the earliest permissible time, to redeem the balance of such shares,
or such portion thereof for which funds are then legally available. From and
after the Corporation's receipt of an Optional Redemption notice pursuant to
Paragraph 8(a), the Corporation shall be obligated to use its best efforts to
take such actions as may be necessary (including, without limitation, the
issuance of additional equity securities, the revaluation or recapitalization
of the Corporation or the consummation of a merger or sale of assets) in
order to permit the full and timely redemption of the shares of Series A
Preferred Stock entitled to redemption.
(c) If, for any reason, the Corporation fails to redeem all shares of Series
A Preferred Stock entitled to redemption on an Optional Redemption Date (i)
the unredeemed shares shall remain outstanding and shall continue to have all
rights and preferences (including, without limitation, dividend and voting
rights) provided for herein, and (ii) the holders of such unredeemed shares
shall have the ongoing right to be redeemed in accordance with this Paragraph
8, together with such rights and remedies as may be available under
applicable law.
(d) The notices provided for in this Paragraph 8 shall be sent, if by or on
behalf of the Corporation, to the holders of the Series A Preferred Stock at
their respective addresses as shall then appear on the records of the
Corporation, or if by any holder of Series A Preferred Stock to the
Corporation at its principal executive office as set forth in the Purchase
Agreement, by first class mail, postage prepaid, (i) notifying such recipient
of the redemption, the date of such redemption, the number of shares of
Series A Preferred Stock to be redeemed, and the redemption price therefor
and (ii) in the case of any notice by or on behalf of the Corporation,
stating the place or places at which the shares called for redemption shall,
upon presentation and surrender of such certificates representing such
shares, be redeemed.
9. Status of Reacquired Shares. Any shares of Series A Preferred
Stock redeemed pursuant to Paragraph 8 or otherwise acquired by the
Corporation in any manner whatsoever shall be canceled and shall not
under any circumstances be reissued; and the Corporation may from time
to time take such appropriate corporate action as may be necessary to
reduce accordingly the number of authorized shares of Series A Preferred
Stock.
10. Rank. The Series A Preferred Stock shall rank senior in right as
to dividends and upon liquidation, dissolution or winding up to all
Junior Securities, whenever issued.
11. Identical Rights. Each share of the Series A Preferred Stock
shall have the same relative rights and preferences as, and shall be
identical in all respects with, all other shares of the Series A
Preferred Stock.
12. Certificates. So long as any shares of the Series A Preferred Stock are
outstanding, there shall be set forth on the face or back of each stock
certificate issued by the Corporation a statement as required by Section
151(f) of the General Corporation Law of the State of Delaware.
13. Amendments. Any provision of these terms of the Series A Preferred
Stock may be amended, modified or waived if and only if the holder of the
Requisite Percentage of Series A Preferred Stock has consented in writing or
by an affirmative vote to such amendment, modification or waiver of any such
provision of this Section (b) of Article FOURTH.
14. Definitions.
"Affiliate or Affiliates" shall mean with respect to any Person, any other
Person that would be considered to be an affiliate of such Person under
Rule 144(a) under the Securities Act of 1933, as amended, as in effect on
April 10, 1998, if such Person were issuing securities.
"Certificate of Incorporation" shall mean this Certificate of
Incorporation, as amended from time to time.
"Common Stock" shall mean the Corporation's Common Stock, $.01 par value.
"Common Stock Deemed Outstanding" shall mean, at any given time, the
number of shares of Common Stock actually outstanding at such time, plus
the number of shares of Common Stock issuable upon conversion of the
Series A Preferred Stock, plus the number of shares of Common Stock
issuable upon the exercise in full of all Convertible Securities whether
or not the Convertible Securities are convertible into, exercisable or
exchangeable for Common Stock at such time.
"Conversion Price" shall have the meaning set forth in Paragraph 7(b)
hereof.
"Convertible Securities" shall mean securities or obligations that are
exercisable for, convertible into or exchangeable for shares of Common
Stock. The term includes options, warrants or other rights to subscribe
for or purchase Common Stock or to subscribe for or purchase other
securities that are convertible into or exchanged for Common Stock.
"Excluded Securities" shall mean any (a) Common Stock or Convertible
Securities issued in exchange for, or any Common Stock issued upon
exercise or conversion of Convertible Securities that are, Excluded
Securities (for this purpose only, as such term is defined in the Articles
of Organization of CTC Communications Corp., a Massachusetts corporation,
as in effect immediately before the Reorganization) in connection with the
Reorganization, (b) Common Stock issuable upon the exercise, conversion or
exchange of Convertible Securities described in clause (a), or (c) Common
Stock or warrants or options to acquire Common Stock issued after the
consummation of the Reorganization to (i) employees, directors or
consultants to the Corporation or its subsidiaries with the approval of
the Compensation Committee to the extent such approval is required under
Paragraph 5(c) hereof, (ii) lenders who are not Affiliates of the
Corporation as partial consideration for senior debt financing to the
Corporation, (iii) equipment lessors who are not Affiliates of the
Corporation as partial consideration for equipment lease financing to the
Corporation, (iv) licensors who are not Affiliates of the Corporation as
partial consideration for license agreements with the Corporation, (v)
bond and Straight Preferred Stock purchasers as partial consideration for
issuances of debt securities or Straight Preferred Stock pursuant to
underwritten public offerings of such debt securities or Straight
Preferred Stock under the Securities Act of 1933, as amended, (vi) bond
and Straight Preferred Stock purchasers as partial consideration for
issuance of such debt securities or Straight Preferred Stock pursuant to
offerings under Rule 144A yielding the Corporation, with respect to each
such offering, proceeds of at least $75,000,000 (net of any interest or
dividend escrows or similar arrangements), (vii) bond and Straight
Preferred Stock purchasers as partial consideration for issuances of such
debt securities or Straight Preferred Stock pursuant to offerings under
Rule 144A yielding the Corporation with respect to each such offering,
proceeds of at least $40,000,000 (net of any interest or dividend escrows
or similar arrangements) sold to at least five purchasers, who are not
Affiliates of one another, (viii) any Persons (including the stockholders
or owners of Persons) as all or part of the consideration paid for the
acquisition of ownership interests in, or assets of, such Person unless
(aa) such Person is an Affiliate of the Corporation (other than a
Subsidiary) or (bb) Affiliates of the Corporation collectively own more
than ten percent (10%) of the ownership interests in such Person or (ix)
to Comm-Tract Corp. and Comm-Tract Corp. of New York or their owners in
consideration for the acquisition of said companies by the Corporation
involving the issuance of Common Stock at a price which is not less than
$9.00 per share. For purposes of clause (viii) above, the value of
consideration other than cash received by the Corporation in return for
the issuance of Common Stock shall be determined in good faith by the
Board.
"Independent Directors" shall have the meaning set forth in Paragraph 6
hereof.
"Junior Securities" shall mean any of the Corporation's Common Stock and
all other equity securities of the Corporation other than (i) the Series A
Preferred Stock and (ii) any other shares of the Corporation's preferred
stock (a) which by their terms, state that they are not Junior Securities
or provide the holders thereof with rights pari passu with or senior to
those of the holders of Series A Preferred Stock and (b) are issued in
compliance with this Section (b) of Article FOURTH.
"Maturity Date" shall mean April 9, 2003.
"Minimum Preference Amount" shall mean $25.41 per share of Series A
Preferred Stock.
"Person" shall mean an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization and any government,
governmental department or agency or political subdivision thereof.
"Preferred Stock" shall mean the Series A Preferred Stock.
"Preferred Stock Derivatives" shall mean any Common Stock or Convertible
Securities issued to holders of Series A Preferred Stock in exchange
therefor, as a stock dividend thereon, in respect thereof in connection
with a stock split or recapitalization or in connection with the exercise
of preemptive rights pertaining thereto pursuant to the Purchase
Agreement.
"Purchase Agreement" shall mean that certain Securities Purchase Agreement
dated as of April 10, 1998 among the Purchasers named therein and CTC
Communications Corp., as it may be amended from time to time.
"Purchase Price" of any share of Series A Preferred Stock shall be $18.00.
"Registration Rights Agreement" shall mean that certain Registration
Rights Agreement between CTC Communications Corp. and the holder(s) of the
Series A Preferred Stock, as it may be amended from time to time.
"Reorganization" shall mean the consummation of the transactions by
which CTC Communications Corp. becomes a subsidiary of this Corporation
pursuant to the Amended and Restated Agreement and Plan of
Reorganization between CTC Communications Group, Inc. A Delaware
Corporation, CTC-Newco, Inc. a Delaware corporation and CTC
Communications Corp., a Massachusetts corporation dated as of March 1,
1999.
"Required Consent" shall have the meaning set forth in Paragraph 5.
"Requisite Percentage" shall mean a majority.
"Restricted Action" shall have the meaning set forth in Paragraph 5.
"Sale of the Corporation" shall mean a single transaction or a series of
transactions pursuant to which a Person or Persons acquire (i) capital
stock of the Corporation possessing the voting power to elect a majority
of the Corporation's board of directors (whether by merger, consolidation
or sale or transfer of the Corporation's capital stock); or (ii) all or
substantially all of the Corporation's assets determined on a consolidated
basis.
"Senior Preferred Stock" shall mean the Series A Preferred Stock and any
other preferred stock of the Corporation designated by the Corporation in
accordance with this Section (b) of Article FOURTH, the terms of which
preferred stock provide for it to be treated as Senior Preferred Stock for
purposes of the particular sections herein in which the term "Senior
Preferred Stock" is used.
"Series A Preference Amount" shall mean, as of any date, an amount per
share of Series A Preferred Stock equal to the Purchase Price increasing
from April 10, 1998 through the date in question at a rate of nine percent
(9%) per annum, compounding semi-annually in arrears from April 10, 1998
and prorated on a daily basis for partial periods.
"Series A Preferred Stock" shall mean the Corporation's Series A Preferred
Stock, $1.00 par value.
"Straight Preferred Stock" shall mean preferred stock of the Corporation
which (i) is neither a Convertible Security nor convertible into or
exchangeable for any other security other than preferred stock meeting the
requirements of this definition or debt securities, (ii) is issued solely
for cash payable upon issuance, (iii) accrues dividends only at a rate or
rates fixed in the certificate of designation or amendment to the
Certificate of Incorporation designating such preferred stock, (iv) has no
voting rights other than as required by law, (v) entitles the holders
thereof to receive, in the aggregate, not more than the purchase price
therefor plus the amount of any accrued unpaid dividends in respect
thereof, and (vi) does not otherwise directly or indirectly alter or
change the powers, preferences or special rights of the shares of Series A
Preferred Stock so as to affect them adversely.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more
of the other Subsidiaries of that Person or a combination thereof, or (ii)
if a partnership, association or other business entity, a majority of the
partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that person or a combination thereof. For purposes
hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a partnership, association or other business entity if such
Person or Persons shall be allocated a majority of partnership,
association or other business entity gains or losses or shall be or
control the managing general partner of such partnership, association or
other business entity.
"Warrants" shall mean the Warrants issued pursuant to the Purchase
Agreement to purchase 133,333 shares of Common Stock, as adjusted from
time to time.
15. Severability of Provisions. If any right, preference or limitation of
the Series A Preferred Stock set forth in this Resolution (as such Resolution
may be amended from time to time) is invalid, unlawful or incapable of being
enforced by reason of any rule, law or public policy, all other rights
preferences and limitations set forth in this Resolution (as so amended)
which can be given effect without implicating the invalid, unlawful or
unenforceable right preference or limitation shall, nevertheless, remain in
full force and effect, and no right, preference or limitation herein set
forth shall be deemed dependent upon any other right, preference or
limitation unless so expressed herein.
16. Preemptive Rights. The Purchasers who are parties to the Purchase
Agreement have certain preemptive rights set forth in the Purchase Agreement
entitling them, in certain circumstances, to acquire securities to be issued
by the Corporation.
FIFTH: The following provisions are inserted for the management of
the business and for the conduct of the affairs of the corporation, and for
further definition, limitation and regulation of the powers of the
corporation and of its directors and stockholders:
(1) Subject to the provisions of this Certificate of
Incorporation, the number of directors of the corporation shall be such
as from time to time shall be fixed by, or in the manner provided in
the by-laws. Election of directors need not be by ballot unless the
by-laws so provide.
(2) Subject to the provisions of this Certificate of
Incorporation, the Board of Directors shall have power without the
assent or vote of the stockholders:
(a) To make, alter, amend, change, add to or repeal the
By-Laws of the corporation; to fix and vary the amount to be
reserved for any proper purpose; to authorize and cause to be
executed mortgages and liens upon all or any part of the property
of the corporation; to determine the use and disposition of any
surplus or net profits; and to fix the times for the declaration
and payment of dividends.
(b) To determine from time to time whether, and to what
times and places, and under what conditions the accounts and
books of the corporation (other than the stock ledger) or any of
them, shall be open to the inspection of the stockholders.
(3) The directors in their discretion may submit any contract
or act for approval or ratification at any annual meeting of the
stockholders or at any meeting of the stockholders called for the
purpose of considering any such act or contract, and any contract or
act that shall be approved or be ratified by the vote of the holders of
a majority of the stock of the corporation which is represented in
person or by proxy at such meeting and entitled to vote thereat
(provided that a lawful quorum of stockholders be there represented in
person or by proxy) shall be as valid and as binding upon the
corporation and upon all the stockholders as though it had been
approved or ratified by every stockholder of the corporation, whether
or not the contract or act would otherwise be open to legal attack
because of director's interest, or for any other reason.
(4) In addition to the powers and authorities hereinbefore or
by statute expressly conferred upon them, the directors are hereby
empowered to exercise all such powers and do all such acts and things
as may be exercised or done by the corporation; subject, nevertheless,
to the provisions of the statutes of Delaware, of this certificate, and
to any by-laws from time to time made by the stockholders, provided,
however, that no by-laws so made shall invalidate any prior act of the
directors which would have been valid if such by-law had not been made.
SIXTH: No director shall be liable to the corporation or any
of its stockholders for monetary damages for breach of fiduciary duty as a
director, except with respect to (1) a breach of the director's duty of
loyalty to the corporation or its stockholders, (2) acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (3) liability under Section 174 of the Delaware General Corporation Law
or (4) a transaction from which the director derived an improper personal
benefit, it being the intention of the foregoing provision to eliminate the
liability of the corporation's directors to the corporation or its
stockholders to the fullest extent permitted by Section 102(b)(7) of the
Delaware General Corporation Law, as amended from time to time. The
corporation shall indemnify to the fullest extent permitted by Sections
102(b)(7) and 145 of the Delaware General Corporation Law, as amended from
time to time, each person that such Sections grant the corporation the power
to indemnify.
SEVENTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them and/or
between this corporation and its stockholders or any class of them (Excluding
Series A Convertible Preferred Stock), any court or equitable jurisdiction
within the State of Delaware, may, on the application in a summary way of
this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this 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 this corporation under the provisions of Section279 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 this 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 (3/4) in value of the
stockholders of this corporation, as the case may be, agree to any compromise
or arrangement and to any reorganization of this corporation as consequence
of any 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 this
corporation, as the case may be, and also on this corporation.
EIGHTH: The
corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation in the manner now or
hereafter prescribed by law and this Certificate of Incorporation, and all
rights and powers conferred herein on stockholders, directors and officers
are subject to this reserved power.
NINTH: Except as otherwise provided in the provisions
establishing a class of stock, the number of authorized shares of any class
or series of 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 voting power of the corporation entitled to vote irrespective
of the provisions of Section 242(b)(2) of the General Corporation Law of the
State of Delaware.
TENTH: If at any time this corporation shall have a class of stock
registered pursuant to the provisions of the Securities Exchange Act of 1934,
for so long as such class is so registered, any action by the stockholders of
such class must be taken at an annual or special meeting of stockholders and
may not be taken by written consent.
IN WITNESS WHEREOF, CTC Communications Group, Inc. has caused this
Restated Certificate of Incorporation to be signed by its Chairman and
attested by its Secretary, who does hereby affirm, under the penalties of
perjury, that the facts stated herein are true, this 25th day of August,
1999.
CTC COMMUNICATIONS GROUP, INC.
By: /s/ Robert J. Fabbricatore
Robert J. Fabbricatore, Chairman
ATTEST:
By: /s/ John D. Pittenger
John D. Pittenger, Secretary
Exhibit 99.1
Press Release Issued October 1, 1999
CTC Communications Corp. Completes Holding Company Reorganization
WALTHAM, Mass.--Oct. 1, 1999--CTC Communications Corp. (NASDAQ:CPTL) (the
"Company" or "CTC") announced today that it has reorganized into a holding
company form of organizational structure which changed the jurisdiction of
the enterprise from Massachusetts to Delaware. As a result of the
reorganization, a new parent company, CTC Communications Group, Inc., a
Delaware corporation ("CTC Group"), owns 100 percent of CTC, the previous
publicly-held company. Stockholders of CTC have automatically become
stockholders of CTC Group on a share for share basis.
The new holding company organizational structure will allow CTC Group to
manage its entire organization more effectively and broadens the alternatives
for future financing.
The reorganization was approved by the required two-thirds vote of CTC
stockholders under Massachusetts law. Existing certificates representing
shares of CTC's common stock serve as evidence of ownership of the same
number of shares of common stock of CTC Group; an exchange of certificates is
not required. The change to the holding company structure was tax free to
CTC's stockholders. The by-laws, executive officers and board of directors of
CTC Group are the same as those of CTC. CTC Group's common stock will
continue to be listed on the Nasdaq National Market under the ticker symbol
"CPTL." The new Cusip No. for CTC Group's common stock is 12641[9] 100.
About CTC Communications
CTC, headquartered in Waltham, Massachusetts, is a rapidly growing provider
of integrated communication solutions to medium and larger-sized business
customers in the Northeast U.S. It provides an extensive array of voice and
data services including local, long distance, frame relay, Internet access
and other advanced data services. In August of this year, the company
officially became an Internet Service Provider. CTC markets its services
through 310 member sales and service representatives located in 26 branch
offices throughout Maine, New Hampshire, Vermont, Massachusetts, Rhode
Island, Connecticut, New York and Maryland. CTC Communications' ICN Network
is fully redundant and is managed at the company's recently completed, state-
of-the-art Technology Center, located at its corporate headquarters in
Waltham, Massachusetts. As of June 30, 1999, the company had more than
184,000 access lines in service and has been adding approximately 40,000 new
lines per quarter. CTC can be found on the Worldwide Web at www.ctcnet.com.
The statements in this press release that relate to future plans, events or
performance are forward-looking statements that involve risk and
uncertainties that could cause actual results to differ materially from those
reflected in the forward-looking statements. Readers are, accordingly,
cautioned not to place undue reliance on these forward-looking statements,
which speak only as to the date hereof. Additional information about these
risks and uncertainties is set forth in the Company's most recent report on
Form 10-Q. CTC undertakes no obligation to release publicly the results of
any revisions to these forward-looking statements that may be made to reflect
results, events or circumstances after the date hereof.
CONTACT: CTC Communications
John D. Pittenger
(781) 466-1302
