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Exhibit 3.1
TELECOMMUNICATION SYSTEMS, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
TeleCommunication Systems, Inc., a Maryland corporation, having its
principal office in Anne Arundel County, Maryland (which is hereinafter called
the "Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland (the "SDAT") that:
FIRST: The name of the Corporation is "TeleCommunication Systems, Inc."
The Corporation desires to amend and restate its Charter as currently in effect
and as hereinafter amended. The Articles of Incorporation of the Corporation
were originally filed with the SDAT on July 30, 1987 and were last amended by
Articles of Amendment filed with the SDAT on April 6, 2000.
SECOND: Pursuant to Section 2-609 of the Maryland General Corporation Law
(the "MGCL"), these Articles of Amendment and Restatement (these "Articles")
restate and further amend the provisions of the Articles of Incorporation of the
Corporation.
THIRD: The text of the Articles of Incorporation of the Corporation is
hereby amended and restated in its entirety to read as follows:
FIRST: The name of the corporation (which is hereinafter called the
"Corporation") is:
TeleCommunication Systems, Inc.
SECOND: (a) The purposes for which and any of which the Corporation is
formed and the business and objects to be carried on and promoted by it are to
engage in any one or more businesses or transactions, or to acquire all or any
portion of any entity engaged in any one or more businesses or transactions
which the Board of Directors may from time to time authorize or approve, whether
or not related to the business described elsewhere in this Article or to any
other business at the time or theretofore engaged in by the Corporation.
(b) The foregoing enumerated purposes and objects shall be in no way
limited or restricted by reference to, or inference from, the terms of any other
clause of this or any other Article of the Charter of the Corporation, and each
shall be regarded as independent; and they are intended to be and shall be
construed as powers as well as purposes and objects of the Corporation and shall
be in addition to and not in limitation of the general powers of corporations
under the General Laws of the State of Maryland.
THIRD: The present address of the principal office of the Corporation in
this State is 275 West Street, Annapolis, MD 21401-1740.
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FOURTH: The name and address of the resident agent of the Corporation in
this State is The Corporation Trust Incorporated, 300 East Lombard Street,
Baltimore, Maryland 21202. Said resident agent is a Maryland corporation.
FIFTH: (a) The total number of shares of stock which the Corporation has
authority to issue is Three Hundred Million (300,000,000) shares, consisting of
Two Hundred Twenty-Five Million (225,000,000) shares of Class A common stock,
$0.01 par value per share ("Class A Common Stock"), and Seventy-Five Million
(75,000,000) shares of Class B common stock, $0.01 par value per share ("Class B
Common Stock" and, together with the Class A Common Stock, "Common Stock"). The
aggregate par value of all shares of all classes of stock having a par value is
$3,000,000.
(b) General. The following is a description of the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption of the Common
Stock of the Corporation:
(1) The exclusive voting power for all purposes shall be vested in
the holders of the Common Stock. The holders of all classes of 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 otherwise required by law. Shares of Common Stock of any
class shall not have cumulative voting rights. All shares of Class A
Common Stock and Class B Common Stock will entitle the holders thereof to
the same rights and privileges and shall rank equally, share ratably, and
be identical in all respects, as to all matters, except as (i) otherwise
set forth in Article FIFTH, subsection (c), and (ii) the holders of Class
B Common Stock shall be entitled to three (3) votes per share and the
holders of Class A Common Stock shall be entitled to one (1) vote per
share.
(2) Subject to the provisions of law and any preferences of any
class of stock hereafter classified or reclassified, dividends, including
dividends payable in shares of another class of the Corporation's stock,
may be paid ratably on the Common Stock at such time and in such amounts
as the Board of Directors may deem advisable.
(3) In the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, the holders of the
Common Stock shall be entitled, together with the holders of any other
class of stock hereafter classified or reclassified not having a
preference on distributions in the liquidation, dissolution or winding up
of the Corporation, to share ratably in the net assets of the Corporation
remaining, after payment or provision for payment of the debts and other
liabilities of the Corporation and the amount to which the holders of any
class
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of stock hereafter classified or reclassified having a preference on
distributions in the liquidation, dissolution or winding up of the
Corporation shall be entitled.
(c) Conversion.
(1) Optional Conversion. Each share of Class B Common Stock shall
be convertible at any time, at the option of the holder, into one share
of Class A Common Stock. Such right shall be exercised by the surrender
of the certificate or certificates, representing the share or shares of
Class B Common Stock to be converted, 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 shares, represented by such
certificate or certificates, into an equal number of shares of Class A
Common Stock, and, if so required by the Transfer Agent, by instruments
of transfer in form satisfactory to the Transfer Agent, duly executed by
such holder or such holder's duly authorized attorney. Shares of Class A
Common Stock shall not, in any case, be convertible into shares of Class
B Common Stock.
(2) Mandatory Conversion. In addition to and notwithstanding
subsection (c)(1) above, immediately preceding any Transfer (as such term
is defined herein below) of shares of Class B Common Stock, and without
any action on the part of any stockholder, such shares of Class B Common
Stock shall be deemed automatically converted into an equal number of
shares of Class A Common Stock. From and after the time of such Transfer,
the relevant Transferred shares of Class B Common Stock will be canceled,
not reissued and any certificates representing such shares of Class B
Common Stock shall no longer represent shares of Class B Common Stock but
instead shall represent the same number of shares of Class A Common
Stock. The transferee shall have the right to have registered in the name
of such transferee the shares of Class A Common Stock issuable to such
transferee as a result of such conversion and Transfer. The shares of
Class A Common Stock issuable upon any such conversion shall be so
registered in the records of the Corporation and the certificates with
respect to such stock shall be issued by the Corporation upon the
surrender of the certificates that represent the shares of 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). "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. Notwithstanding the foregoing, the following shall not
constitute a "Transfer": (i) 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; (ii) any transfer of shares of Class B Common Stock
to the transferring stockholder's spouse, children, stepchildren, father,
mother, brother, sister, any lineal descendants of any one or more of the
foregoing, any estates of any one or more of the foregoing, any trusts
now or hereafter established for the benefit of any one or more of the
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foregoing, any other entity now or hereafter controlled by any of the
foregoing; and (iii) 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 subsection (c)(2) 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 subsection (c)(2), 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.
(d) Subject to the foregoing, the power of the Board of Directors to
classify and reclassify any of the shares of capital stock shall include,
without limitation, subject to the provisions of the Charter, authority to
classify or reclassify any unissued shares of such stock into a class or classes
of preferred stock, preference stock, special stock or other stock, and to
divide and classify shares of any class into one or more series of such class,
by determining, fixing, or altering one or more of the following:
(1) The distinctive designation of such class or series and the
number of shares to constitute such class or series; provided that,
unless otherwise prohibited by the terms of such or any other class or
series, the number of shares of any class or series may be decreased by
the Board of Directors in connection with any classification or
reclassification of unissued shares and the number of shares of such
class or series may be increased by the Board of Directors in connection
with any such classification or reclassification, and any shares of any
class or series which have been redeemed, purchased, otherwise acquired
or converted into shares of Common Stock or any other class or series
shall become part of the authorized capital stock and be subject to
classification and reclassification as provided in this sub-paragraph.
(2) Whether or not and, if so, the rates, amounts and times at
which, and the conditions under which, dividends shall be payable on
shares of such class or series, whether any such dividends shall rank
senior or junior to or on a parity with the dividends payable on any
other class or series of stock, and the status of any such dividends as
cumulative, cumulative to a limited extent or non-cumulative and as
participating or non-participating.
(3) Whether or not shares of such class or series shall have
voting rights, in addition to any voting rights provided by law and, if
so, the terms of such voting rights.
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(4) Whether or not shares of such class or series shall have
conversion or exchange privileges and, if so, the terms and conditions
thereof, including provision for adjustment of the conversion or exchange
rate in such events or at such times as the Board of Directors shall
determine.
(5) Whether or not shares of such class or series shall be subject
to redemption and, if so, the terms and conditions of such redemption,
including the date or dates upon or after which they shall be redeemable
and the amount per share payable in case of redemption, which amount may
vary under different conditions and at different redemption dates; and
whether or not there shall be any sinking fund or purchase account in
respect thereof, and if so, the terms thereof.
(6) The rights of the holders of shares of such class or series
upon the liquidation, dissolution or winding up of the affairs of, or
upon any distribution of the assets of, the Corporation, which rights may
vary depending upon whether such liquidation, dissolution or winding up
is voluntary or involuntary and, if voluntary, may vary at different
dates, and whether such rights shall rank senior or junior to or on a
parity with such rights of any other class or series of stock.
(7) Whether or not there shall be any limitations applicable,
while shares of such class or series are outstanding, upon the payment of
dividends or making of distributions on, or the acquisition of, or the
use of moneys for purchase or redemption of, any stock of the
Corporation, or upon any other action of the Corporation, including
action under this sub-paragraph, and, if so, the terms and conditions
thereof.
(8) Any other preferences, rights, restrictions, including
restrictions on transferability, and qualifications of shares of such
class or series, not inconsistent with law and the Charter of the
Corporation.
(e) For the purposes hereof and of any articles supplementary to the
Charter providing for the classification or reclassification of any shares of
capital stock or of any other Charter document of the Corporation (unless
otherwise provided in any such articles or document), any class or series of
stock of the Corporation shall be deemed to rank:
(1) prior to another class or series either as to dividends or
upon liquidation, if the holders of such class or series shall be
entitled to the receipt of dividends or of amounts distributable on
liquidation, dissolution or winding up, as the case may be, in preference
or priority to holders of such other class or series;
(2) on a parity with another class or series either as to
dividends or upon liquidation, whether or not the dividend rates,
dividend payment dates or redemption or liquidation price per share
thereof be different from those of such
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others, if the holders of such class or series of stock shall be entitled
to receipt of dividends or amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in proportion to their
respective dividend rates or redemption or liquidation prices, without
preference or priority over the holders of such other class or series;
and
(3) junior to another class or series either as to dividends or
upon liquidation, if the rights of the holders of such class or series
shall be subject or subordinate to the rights of the holders of such
other class or series in respect of the receipt of dividends or the
amounts distributable upon liquidation, dissolution or winding up, as the
case may be.
SIXTH: The number of directors of the Corporation shall be eight (8),
which number may be increased or decreased pursuant to the By-Laws of the
Corporation, but shall never be less than the minimum number permitted by the
General Laws of the State of Maryland now or hereafter in force. The names of
the directors who will serve until the first annual meeting of stockholders and
until their successors are elected and qualify are as follows:
Maurice B. Tose
Andrew C. Barrett
Timothy P. Bradley
Clyde A. Heintzelman
Richard A. Kozak
Weldon H. Latham
Byron F. Marchant
Daniel Tseung
SEVENTH: (a) The following provisions are hereby adopted for the purpose
of defining, limiting, and regulating the powers of the Corporation and of the
directors and the stockholders:
(1) The Board of Directors is hereby empowered to authorize
the issuance from time to time of shares of its stock of any class,
whether now or hereafter authorized, or securities convertible into
shares of its stock of any class or classes, whether now or hereafter
authorized, for such consideration as may be deemed advisable by the
Board of Directors and without any action by the stockholders.
(2) No holder of any stock or any other securities of the
Corporation, whether now or hereafter authorized, shall have any
preemptive right to subscribe for or purchase any stock or any other
securities of the Corporation other than such, if any, as the Board of
Directors, in its sole discretion, may
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determine and at such price or prices and upon such other terms as the
Board of Directors, in its sole discretion, may fix; and any stock or
other securities which the Board of Directors may determine to offer for
subscription may, as the Board of Directors in its sole discretion shall
determine, be offered to the holders of any class, series or type of
stock or other securities at the time outstanding to the exclusion of the
holders of any or all other classes, series or types of stock or other
securities at the time outstanding.
(3) The Board of Directors of the Corporation shall,
consistent with applicable law, have power in its sole discretion to
determine from time to time in accordance with sound accounting practice
or other reasonable valuation methods what constitutes annual or other
net profits, earnings, surplus or net assets in excess of capital; to fix
and vary from time to time the amount to be reserved as working capital,
or determine that retained earnings or surplus shall remain in the hands
of the Corporation; to set apart out of any funds of the Corporation such
reserve or reserves in such amount or amounts and for such proper purpose
or purposes as it shall determine and to abolish any such reserve or any
part thereof; to redeem or purchase its stock or to distribute and pay
distributions or dividends in stock, cash or other securities or
property, out of surplus or any other funds or amounts legally available
therefor, at such times and to the stockholders of record on such dates
as it may, from time to time, determine; to determine the amount,
purpose, time of creation, increase or decrease, alteration or
cancellation of any reserves or charges and the propriety thereof
(whether or not any obligation or liability for which such reserves or
charges shall have been created shall have been paid or discharged); to
determine the fair value and any matters relating to the acquisition,
holding and disposition of any assets by the Corporation; and to
determine whether and to what extent and at what times and places and
under what conditions and regulations the books, accounts and documents
of the Corporation, or any of them, shall be open to the inspection of
stockholders, except as otherwise provided by statute, the rules of any
stock exchange or market system on which securities of the Corporation
are listed or by the By-Laws, and, except as so provided, no stockholder
shall have any right to inspect any book, account or document of the
Corporation unless authorized so to do by resolution of the Board of
Directors.
(4) Notwithstanding any provision of law requiring the
authorization of any action by a greater proportion than a majority of
the total number of shares of all classes of capital stock or of the
total number of shares of any class of capital stock, such action shall
be valid and effective if authorized by the affirmative vote of the
holders of a majority of the total number of shares of all classes
outstanding and entitled to vote thereon, except as otherwise provided in
the Charter.
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(5) The Corporation shall indemnify (A) its directors and
officers, whether serving the Corporation or at its request any other
entity, to the fullest extent required or permitted by the General Laws
of the State of Maryland now or hereafter in force, including the advance
of expenses under the procedures and to the full extent permitted by law
and (B) other employees and agents to such extent as shall be authorized
by the Board of Directors or the Corporation's By-Laws and be permitted
by law. The foregoing rights of indemnification shall not be exclusive of
any other rights to which those seeking indemnification may be entitled.
The Board of Directors may take such action as is necessary to carry out
these indemnification provisions and is expressly empowered to adopt,
approve and amend from time to time such by-laws, resolutions or
contracts implementing such provisions or such further indemnification
arrangements as may be permitted by law. No amendment of the Charter of
the Corporation or repeal of any of its provisions shall limit or
eliminate the right to indemnification provided hereunder with respect to
acts or omissions occurring prior to such amendment or repeal.
(6) To the fullest extent permitted by Maryland statutory
or decisional law, as amended or interpreted, no director or officer of
the Corporation shall be personally liable to the Corporation or its
stockholders for money damages. No amendment of the Charter of the
Corporation or repeal of any of its provisions shall limit or eliminate
the limitation on liability provided to directors and officers hereunder
with respect to any act or omission occurring prior to such amendment or
repeal.
(7) The Corporation reserves the right from time to time to
make any amendments of the Charter which may now or hereafter be
authorized by law, including any amendments changing the terms or
contract rights, as expressly set forth in the Charter, of any of its
outstanding stock by classification, reclassification or otherwise. The
Charter may be amended by the stockholders of the Corporation by the
affirmative vote of a majority of the total number of votes entitled to
vote generally in the election of directors; provided, however, the
affirmative vote of holders of at least 80% of the total number of votes
entitled to vote generally in the election of directors is required to
amend, modify or repeal the provisions of the Charter relating to (1) the
limitation of liability of officers and directors; (2) the
indemnification of officers and directors; (3) Article EIGHTH; and (4)
this subsection (a)(7) of Article SEVENTH.
(b) The enumeration and definition of particular powers of the
Board of Directors included in the foregoing shall in no way be limited or
restricted by reference to or inference from the terms of any other clause of
this or any other Article of the Charter of the Corporation, or construed as or
deemed by inference or otherwise in any
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manner to exclude or limit any powers conferred upon the Board of Directors
under the General Laws of the State of Maryland now or hereafter in force.
EIGHTH: (a) The provisions of Sections 3-601 to 3-604 of the MGCL shall
not apply to any "business combination" with the Corporation and Maurice B.
Tose, or any entity controlling, controlled by or under common control with
Maurice B. Tose, his spouse, children, stepchildren, father, mother, brother,
sister, any lineal descendants of any one or more of the foregoing, any estates
of any one or more of the foregoing, any trusts now or hereafter established for
the benefit of any one or more of the foregoing, or any other entity now or
hereafter controlled by any of the foregoing. Such persons are exempted from
such Sections of the MGCL to the fullest extent permitted by Maryland law.
(b) The provisions of Sections 3-701 to 3-709 of the MGCL shall not apply
to any share of the capital stock of the Corporation now or hereafter
beneficially held (during the period of such beneficial ownership) by Maurice B.
Tose, or any entity controlling, controlled by or under common control with
Maurice B. Tose, or by his spouse, children, stepchildren, father, mother,
brother, sister, any lineal descendants of any of the foregoing, any estates of
any of the foregoing, any trusts now or hereafter established for the benefit of
any of the foregoing, any other entity now or hereafter controlled by any of the
foregoing. Such shares of capital stock are exempted from such Sections of the
MGCL to the fullest extent permitted by Maryland law.
NINTH: The duration of the Corporation shall be perpetual.
FOURTH: At a meeting of the Board, each member of the Board approved
these Articles pursuant to Section 2-408 of the MGCL, by which these Articles
were set forth, declared to be advisable and directed to be submitted to the
stockholders of the Corporation for consideration and approval.
FIFTH: Each holder of the Class A Common Stock and Series A Preferred
Stock of the Corporation, the only classes of capital stock issued, outstanding
and entitled to vote thereon, adopted and approved these Articles by unanimous
written consent pursuant to Section 2-505 of the MGCL.
SIXTH: Prior to the filing of these Articles, the total number of shares
of stock of all classes which the Corporation had authority to issue was Ninety
Million (90,000,000) shares, consisting of fifty-four Million (54,000,000)
shares of Class A common stock, $0.01 par value per share, twenty-one Million
(21,000,000) shares of Class B common stock, $0.01 par value per share and
Fifteen Million (15,000,000) shares of Series A preferred, par value $0.001 per
share. The aggregate par value of all shares of all classes of stock having a
par value was Seven Hundred sixty-five Thousand Dollars ($765,000.00)
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SEVENTH: Upon the filing of these Articles, the total number of shares of
stock of all classes which the Corporation has authority to issue is Three
Hundred Million (300,000,000) shares of capital stock, of which Two Hundred
Twenty-Five Million (225,000,000) shares shall be designated Class A common
stock, $0.01 par value per share, and Seventy-Five Million (75,000,000) shares
shall be designated Class B common stock, $0.01 par value per share. In
addition, upon the filing of these Articles, the aggregate par value of all
shares of all classes of stock having a par value will be $3,000,000.
EIGHTH: (a) The Corporation hereby effects a reverse stock split by changing and
reclassifying each 2.92 shares of Class A common stock, $0.01 par value per
share, and each 2.92 shares of Class B common stock, $0.01 par value per share,
of the Corporation, which is issued at the close of business on the effective
date of these Articles of Amendment and Restatement, into one (1) share of Class
A common stock, $0.01 par value per share, and one (1) share of Class B common
stock, $0.01 per value per share.
(b) Fractional Shares. No fractional shares shall be issued upon the
effectiveness of the reverse stock split. In lieu of any fractional shares to
which the holder would otherwise be entitled, the Corporation shall pay cash
equal to such fraction multiplied by the fair market value of the Common Stock,
as set by the Board of Directors in its good faith determination.
NINTH: In addition to the above, these Articles include provisions that
exempt Maurice B. Tose from the Business Combinations Statute (MCGL Sections
3-601 et seq.), and the Control Share Statute (MCGL Sections 3-701 to 3-709).
TENTH: The number of directors of the Corporation and the names of those
currently in office are as set forth in Article SIXTH of the foregoing Articles.
ELEVENTH: The provisions set forth in the foregoing amendment and
restatement of the Charter are all of the provisions of the Charter currently in
effect.
IN WITNESS WHEREOF, the Corporation has caused these Articles to be
signed in its name and on its behalf by its President and witnessed by its
Assistant Secretary on June ___, 2000.
WITNESS: TELECOMMUNICATION SYSTEMS, INC.,
A Maryland Corporation
By: (SEAL)
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Name: Thomas M. Brandt, Jr. Maurice B. Tose,
Assistant Secretary President and Chief Executive Officer
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CERTIFICATE
The undersigned, who executed on behalf of TELECOMMUNICATION SYSTEMS,
INC., a Maryland corporation (the "Corporation"), the foregoing Articles of
Amendment and Restatement of which this certificate is made a part, hereby
acknowledges in the name and on behalf of the Corporation the foregoing Articles
of Amendment and Restatement to be the corporate act of the Corporation and
hereby certifies that, to the best of his knowledge, information, and belief,
the matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects, under the penalties of
perjury.
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Maurice B. Tose
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CONSENT OF RESIDENT AGENT
THE UNDERSIGNED, hereby consents to act as resident agent in Maryland for
the entity named in the attached instrument.
THE CORPORATION TRUST INCORPORATED
By:
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Printed Name:
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