<PAGE> 1
EXHIBIT 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
TOMAX CORPORATION
Tomax Corporation, a Delaware corporation, hereby certifies as follows:
The original Certificate of Incorporation for Tomax Corporation (the
"Corporation") was filed in the office of the Secretary of State of the State of
Delaware on September 11, 2000. All amendments to the Certificate of
Incorporation reflected herein have been duly authorized and adopted by the
Company's Board of Directors and stockholders in accordance with the provisions
of Sections 242 and 245 of the Delaware General Corporation Law.
This Amended and Restated Certificate of Incorporation restates and
integrates and amends the Certificate of Incorporation of the Company. The text
of the Certificate of Incorporation is amended hereby to read as herein set
forth in full:
ARTICLE I
The name of the Corporation is Tomax Corporation.
ARTICLE II
The Corporation is organized to engage in any lawful purpose or purposes
for which a corporation may be organized under the General Corporation Law of
the State of Delaware.
ARTICLE III
The Corporation shall have the authority to issue 52,000,000 shares,
consisting of 50,000,000 shares of common stock (the "Common Stock"), par value
$0.001 per share, and 2,000,000 shares of preferred stock, par value $0.001 per
share. The Board of Directors is hereby authorized, subject to limitations
prescribed by law, to fix by resolution or resolutions the designations, powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, of any wholly unissued 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
<PAGE> 2
preferences of any such series, and the number of shares constituting any such
series and the designation thereof, or any of the foregoing.
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 issuance
of shares of such series then outstanding, subject to the powers, preferences
and rights, and the qualifications, limitations and restrictions thereof stated
in the Certificate of Incorporation or 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.
The preferred stock shall be divided into two classes, of which 421,585
shares are designated as Series A Convertible Redeemable Preferred Stock (the
"Series A Preferred") and 1,085,714 shares are designated as Series B Redeemable
Preferred Stock (the "Series B Preferred"). The respective rights and
preferences of the Common Stock, the Series A Preferred and the Series B
Preferred are set forth below.
3.1 DIVIDENDS.
(a) Optional. The holders of shares of Series A Preferred shall be
entitled to receive dividends, out of any assets legally available therefor,
prior and in preference to any declaration or payment of any dividend (payable
other than in common stock of the Corporation) on the Common Stock, at the rate
of $0.95 per share per annum (as adjusted for any stock dividends, combinations
or splits with respect to such shares after the filing of this Certificate), or,
if greater (as determined on a per annum basis and on an as converted basis for
the Series A Preferred) an amount equal to that paid on any other outstanding
stock of this Corporation, payable when and if declared by the Board of
Directors. Such dividends shall not be cumulative. The holders of shares of
Series B Preferred shall not be entitled to receive dividends.
(b) Initial Public Offering. If the Corporation consummates an
offering of its shares to the public (other than an offering restricted to its
employees, directors and consultants) and all outstanding shares of Series A
Preferred are to be converted into Common Stock upon such consummation (whether
pursuant to Section 3.4(a) or 3.4(b)), the Corporation shall pay to the holders
of Series A Preferred, simultaneously with such consummation, a dividend equal
to the sum of (i) $8.83 for each outstanding share of Series A Preferred and
(ii) an amount equal to declared but unpaid dividends on such share (subject to
adjustment of such fixed dollar amounts).
(c) Nonpayment of Series A Redemption Price. If a majority of the
then outstanding Series A Preferred request redemption pursuant to Section
3.5(a) but legal restrictions on redemptions limit or preclude the timely
redemption of all the Series A Preferred so requested to be redeemed at the
Series A Redemption Price pursuant to Section 3.5(a), dividends shall accrue on
the Series A Preferred at the rate of $0.95 per share per annum (as adjusted for
any stock dividends, combinations or splits with respect to such shares after
the filing of this Certificate) from the date on which redemption was to be made
pursuant to such request until all shares of Series A Preferred so
-2-
<PAGE> 3
requested to be redeemed have been redeemed and the applicable Series A
Redemption Price has been paid in full. Such dividends shall accrue whether or
not earned or declared.
3.2 LIQUIDATION, DISSOLUTION OR WINDING UP; CERTAIN MERGERS,
CONSOLIDATIONS AND ASSET SALES.
(a) Preference.
(i)Preference of Series A Preferred. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation (a "Liquidation"), the holders of shares of Series A Preferred then
outstanding shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders, after and subject to the payment
in full of all amounts required to be distributed to the holders of any other
class or series of stock of the Corporation ranking on liquidation prior and in
preference to the Series A Preferred, but before any payment shall be made to
the holders of Common Stock or any other class or series of stock ranking on
liquidation junior to the Series A Preferred by reason of their ownership
thereof, an amount per share equal to the sum of (A) $11.86 for each outstanding
share of Series A Preferred and (B) an amount equal to declared but unpaid
dividends on such share (subject to adjustment of such fixed dollar amounts for
any stock splits, stock dividends, combinations, recapitalizations or the like
after the filing of this Certificate). If upon any Liquidation, the remaining
assets of the Corporation available for distribution to its stockholders shall
be insufficient to pay the holders of shares of Series A Preferred and any other
class of series of stock ranking on liquidation on a parity with the Series A
Preferred ("Parity Stock") the full amount to which they shall be entitled, the
holders of shares of Series A Preferred and any Parity Stock shall share ratably
in any distribution of the assets and funds of the Corporation in proportion to
the respective amounts which would otherwise be payable in respect of the shares
held by them upon such distribution if all amounts payable on or with respect to
such shares were paid in full.
(ii) Preference of Series B Preferred. In the event of a
Liquidation, the holders of shares of Series B Preferred then outstanding shall
be entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders, after and subject to the payment in full of
all amounts required to be distributed to the holders of Series A Preferred
Stock and any other class or series of stock of the Corporation ranking on
liquidation prior and in preference to the Series B Preferred, but before any
payment shall be made to the holders of Common Stock or any other class or
series of stock ranking on liquidation junior to the Series B Preferred by
reason of their ownership thereof, an amount per share equal to the sum of
$1.5525 for each outstanding share of Series B Preferred (subject to adjustment
of such fixed dollar amounts for any stock splits, stock dividends,
combinations, recapitalizations or the like after the filing of this
Certificate). If upon any Liquidation, the remaining assets of the Corporation
available for distribution to its stockholders shall be insufficient to pay the
holders of shares of Series B Preferred and any Parity Stock the full amount to
which they shall be entitled, the holders of shares of Series B Preferred and
any Parity Stock shall share ratably in any distribution of the assets and funds
of the Corporation in proportion to the respective amounts which would otherwise
be payable in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to such shares were paid in full.
-3-
<PAGE> 4
(b) Participation. Upon the completion of the distribution required
by Section 3.2(a)(i), the holders of shares of Series A Preferred (on an as
converted basis) and Common Stock then outstanding shall be entitled to be paid
out of the remaining assets of the Corporation additional amounts on a pro rata
basis. Upon the completion of the distribution required by Section 3.2(a)(ii),
the holders of shares of Series B Preferred shall not be entitled to be paid out
of the remaining assets of the Corporation any additional amounts.
(c) Certain Transactions. The merger or consolidation of the
Corporation into or with any other entity, or the sale of all or substantially
all of the assets of the Company, as a result of which the stockholders of the
Corporation immediately prior to such transaction, in their capacities as such,
own, immediately following such transaction, less than 50% of the surviving or
buying entity or its parent, shall be deemed to be a Liquidation for all
purposes of this Section 3.2.
(d) Noncash Consideration. In any Liquidation, if the consideration
received by the Corporation or its shareholders is other than cash, its value
for purposes of this Section 3.2 will be determined as follows:
(i)Securities not subject to investment letter or other similar
restrictions on free marketability covered by Section 3.2(d)(ii):
(1) If traded on a securities exchange or through the Nasdaq
National Market, the value shall be deemed to be the average of the closing
prices of the securities on such exchange or market over the 30-calendar-day
period ending 3 trading days prior to the closing;
(2) If actively traded over-the-counter (other than through
the Nasdaq National Market), the value shall be deemed to be the average of the
closing bid or sale prices (whichever is applicable) over the 30-calendar-day
period ending 3 trading days prior to the closing; and
(3) If there is no active public market, the value shall be
the fair market value thereof, as mutually determined by the Corporation and (A)
the holders of a majority of the Series A Preferred and (B) the holders of a
majority of the Series B Preferred.
(ii) The method of valuation of securities subject to investment
letter or other restrictions on free marketability (other than restrictions
arising solely by virtue of a stockholder's status as an affiliate or former
affiliate) shall be to make an appropriate discount from the market value
determined as stated in Section 3.2(d)(i) to reflect the approximate fair market
value thereof, as mutually determined by the Corporation and (A) the holders of
a majority of the Series A Preferred and (B) the holders of a majority of the
Series B Preferred.
(iii) Other non-cash consideration shall be valued at the fair
market value thereof, as mutually determined by the Corporation and (A) the
holders of a majority of the Series A Preferred and (B) the holders of a
majority of the Series B Preferred. In a transaction described in Section
3.2(c), the pricing of the non-cash consideration in connection with the
dissolution is the same as it was priced in the underlying transaction, as
determined in good faith by the Corporation's
-4-
<PAGE> 5
Board of Directors. If the holders of not less than a majority of the Series A
Preferred object to the Board's determination of the value of a transaction
described in Section 3.2(c), the Corporation and the holders of not less than a
majority of the Series A Preferred shall each appoint one independent
investment-banker or qualified appraiser and such persons shall in turn select a
third investment-banker or qualified appraiser, which group of three persons
shall then determine, by majority vote, the fair market value thereof.
(e) Noncompliance. In the event the requirements of this Section 3.2
are not complied with as to any transaction, the Corporation shall forthwith
either:
(i)cause the closing of such transaction to be postponed until
such time as the requirements of this Section 3.2 have been complied with; or
(ii) cancel such transaction, in which event the rights,
preferences and privileges of the holders of Series A Preferred and Series B
Preferred shall revert to and be the same as such rights, preferences and
privileges existing immediately prior to the date of the first notice given
pursuant to Section 3.2(f).
(f) Notice. The Corporation shall give each holder of record of
Series A Preferred written notice of any impending transaction which constitutes
or would result in a Liquidation not later than 15 days prior to the
stockholders' meeting called to approve such transaction, or 15 days prior to
the closing of such transaction, whichever is earlier, and shall also notify
such holders in writing of the final approval of such transaction. The
Corporation shall give each holder of record of Series B Preferred written
notice of any impending transaction which constitutes or would result in a
Liquidation not later than 10 days prior to the stockholders' meeting called to
approve such transaction, or 10 days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in writing of the final
approval of such transaction. The first of such notices shall describe the
material terms and conditions of the impending transaction and the provisions of
this Section 3, and the Corporation shall thereafter give such holders prompt
notice of any material changes. The transaction shall in no event take place
sooner than 20 days after the Corporation has given the first notice provided
for herein or sooner than 10 days after the Corporation has given notice of any
material changes provided for herein; provided, however, that such periods may
be shortened, to the extent applicable, upon the written consent of each of (i)
the holders of Series A Preferred that represent at least a majority of the
voting power of all then outstanding shares of Series A Preferred and (ii) the
holders of Series B Preferred that represent at least a majority of the voting
power of all then outstanding shares of Series B Preferred.
3.3 Voting Rights. The holders of Series A Preferred shall have the
voting rights set forth below. The holders of Series B Preferred shall have no
voting rights, except as required by law.
(a) General. Except as otherwise required by law or as set forth in
Section 3.3(b) the shares of Series A Preferred shall be voted together with the
Common Stock and all other series of Preferred Stock at any annual or special
meeting of the stockholders of the Corporation, or may act by written consent in
the same manner as the Common Stock and any other series of Preferred Stock.
Each holder of Series A Preferred shall be entitled to such number of votes for
the Series A Preferred held by it on the record date fixed for such meeting or
on the effective date of such written
-5-
<PAGE> 6
consent as shall be equal to the whole number of shares of Common Stock into
which the shares of Series A Preferred held by such holder are convertible
immediately after the close of business on the record date fixed for such
meeting or on the effective date of such written consent.
(b) Protective Provisions. The vote or written consent of the
holders of a majority of all shares of Series A Preferred then outstanding shall
be required for any action which:
(i)changes the rights, preferences, privileges, qualifications,
limitations or restrictions of the Series A Preferred;
(ii) increases or decreases the authorized number of shares of
Series A Preferred;
(iii) issues or creates any new class of equity security having
rights preferential to or on parity with the rights of the Series A Preferred
with respect to dividends or amounts distributable on Liquidation, or which
amends the terms of or reclassifies any class of equity securities with the same
effect;
(iv) redeems, repurchases or otherwise acquires any shares of
any class of equity securities or any securities or instruments convertible
into, exchangeable for or carrying any right to acquire equity securities, or
authorizes or creates a sinking fund for any such purpose, other than (x)
pursuant to Section 3.5, (y) the repurchase of Common Stock from individuals
which are employees of the Corporation on the date of repurchase (other than
Eric Olafson and Virgil Fernandez), provided that the shares of Common Stock so
repurchased are made subject to a stock option issued to one or more other
employees, or persons who thereupon become employees, within 60 days after such
repurchase and (z) the repurchase of Common Stock at cost pursuant to employment
agreements from individuals whose employment with the Corporation ends
simultaneously with such repurchase or ended within 60 days prior to such
repurchase; or
(v)amends the Corporation's Certificate of Incorporation
(including without limitation the adoption or effectiveness of any certificate
of rights, preferences and privileges of any new class or series of Preferred
Stock) in any way which adversely affects the rights, preferences or privileges
of the Series A Preferred.
3.4 Conversion Rights. The holders of Series A Preferred shall have
conversion rights set forth below. The holders of Series B Preferred shall have
no conversion rights.
(a) Right to Convert. Each share of Series A Preferred shall be
convertible, without the payment of any additional consideration by the holder
thereof and at the option of the holder thereof, at any time, at the office of
the Corporation or any transfer agent for the Series A Preferred, into the
number of fully paid and nonassessable shares of Common Stock determined by
dividing $11.86 by the Conversion Price in effect at the time of conversion. The
price at which shares of Common Stock will be deliverable upon conversion of the
Series A Preferred Stock (the "Conversion Price") shall initially be $11.86 per
share of Common Stock. Such initial Conversion Price shall be subject to
adjustment as provided in this Section 3.4.
-6-
<PAGE> 7
(b) Automatic Conversion. Each share of Series A Preferred shall
automatically be converted, at the Conversion Price then in effect: (i)
immediately upon the closing of a firm commitment underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of Common Stock for the account of
the Corporation to the public at a public offering price not less $14.83 per
share (as adjusted for stock splits, reverse stock splits, stock dividends and
the like occurring after the filing of this Certificate) (a "Qualifying Public
Offering"); or (ii) upon the election by vote or written consent of a majority
of shares of Series A Preferred to convert into Common Stock. In the event of
the automatic conversion of the Series A Preferred upon a Qualifying Public
Offering, the person(s) entitled to receive the Common Stock issuable upon such
conversion shall not be deemed to have converted such Series A Preferred until
immediately prior to the closing of the Qualifying Public Offering.
(c) Mechanics of Conversion. No fractional shares of Common Stock
shall be issued upon conversion of the Series A Preferred. In lieu of any
fractional shares to which the holder would otherwise be entitled (computing the
number of shares of Common Stock to which any holder is entitled on an aggregate
basis with respect to all shares to be converted by such holder at the time of
such conversion), the Corporation shall pay cash equal to such fraction
multiplied by the fair market value of the Common Stock, determined by the Board
of Directors in good faith. Before any holder of Series A Preferred shall be
entitled to convert the same into full shares of Common Stock pursuant to
Section 3.4(a), and before the Corporation shall be obligated to issue
certificates for shares of Common Stock upon the automatic conversion of Series
A Preferred pursuant to Section 3.4(b), such holder shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
Corporation or of any transfer agent for Series A Preferred and, in the case of
a conversion pursuant to Section 3.4(a), shall give written notice to the
Corporation at such office that such holder elects to convert the same and shall
state therein the name or names in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued. The Corporation shall, as
soon as practicable thereafter, issue and deliver to such holder, or to its
nominee(s), a certificate or certificates for the number of shares of Common
Stock to which such holder or nominee(s) shall be entitled as set forth above,
together with cash in lieu of any fraction of a share. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of such surrender of the shares of Series A Preferred to be converted (except
that in the case of an automatic conversion pursuant to a Qualifying Public
Offering pursuant to Section 3.4(b), such conversion shall be deemed to have
been made immediately prior to the closing of the Qualifying Public Offering),
and the person or persons entitled to receive the shares of Common Stock
issuable upon conversion shall be treated for all purposes as the record holder
or holders of such shares of Common Stock on such date.
(d) Adjustments to Conversion Price for Dilutive Issues.
(i)Additional Shares of Common Stock. For purposes of this
Section 3.4(d), "Additional Shares of Common Stock" shall mean all shares of
Common Stock issued (or, pursuant to Section 3.4(d)(ii), deemed to be issued) by
the Corporation after the issuance of the Series A Preferred, other than shares
of Common Stock issued or issuable:
(1) upon conversion of shares of Series A Preferred;
-7-
<PAGE> 8
(2) to officers, directors or employees of, or consultants
to, the Corporation pursuant to equity incentive plans or other arrangements
approved by the Board of Directors, to the extent the aggregate number of shares
of Common Stock so issued does not exceed 750,000 (as adjusted for any stock
splits, stock dividends, combinations, recapitalizations or the like after the
filing of this Certificate), plus such number of shares redeemed and made
subject to stock options pursuant to Section 3.3(b)(iv);
(3) to leasing entities or financial institutions in
connection with bona fide commercial leasing or borrowing transactions whose
purpose is other than equity financing, pursuant to agreements approved by the
Board of Directors, or to vendors and key customers;
(4) as a dividend or distribution on the Series A Preferred;
(5) in any event for which adjustment is made pursuant to
Section 3.4(e), 3.4(f), 3.4(g) hereof; or
(6) by way of dividend or other distribution on shares
excluded from the definition of Additional Shares of Common Stock by this
Section 3.4(d)(i); or
(7) in a public offering prior to or in connection with
which all outstanding shares of Series A Preferred Stock will be converted to
Common Stock, as provided in Section 3.4(b) hereof.
(ii) Deemed Issue of Additional Shares of Common Stock. In the
event the Corporation at any time or from time to time shall issue any rights,
options or warrants to subscribe for, purchase or otherwise acquire Common Stock
or Convertible Securities ("Options") or any evidence of indebtedness, shares or
securities directly or indirectly convertible into or exchangeable for Common
Stock ("Convertible Securities") or shall fix a record date for the
determination of holders of any class of securities entitled to receive any
Options or Convertible Securities, then the maximum number of shares (as set
forth in the instrument relating thereto, without regard to any provisions
contained therein for a subsequent adjustment of such number) of Common Stock
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible
Securities shall, subject to the exclusions set forth in Section 3.4(d)(i), be
deemed to be Additional Shares of Common Stock issued as of the time of such
issue or, in case such a record date shall have been fixed, as of the close of
business on such record date; provided that in any such case in which Additional
Shares of Common Stock are so deemed to be issued:
(1) no further adjustment in the Conversion Price shall be
made upon the subsequent issue of Convertible Securities or shares of Common
Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(2) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase or decrease in
the consideration payable to the Corporation, or any increase or decrease in the
number of shares of Common Stock
-8-
<PAGE> 9
issuable, upon the exercise, conversion or exchange thereof, the Conversion
Price computed upon the original issue thereof (or upon the occurrence of a
record date with respect thereto), and any subsequent adjustments based thereon,
shall, upon any such increase or decrease becoming effective, be recomputed to
equal the lesser of (A) a price that reflects such increase or decrease insofar
as it affects such Options or the rights of conversion or exchange under such
Convertible Securities or (B) a price calculated as if such Options or
Convertible Securities were excluded from the definition of "Additional Shares
of Common Stock," it being the Corporation's intent that the issuance of such
Options or Convertible Securities, together with the foregoing adjustments in
their terms, will not have the net effect of increasing the Conversion Price of
the Series A Preferred;
(3) upon the expiration of any such Options or any rights of
conversion or exchange under such Convertible Securities that shall not have
been exercised, the Conversion Price computed upon the original issue thereof
(or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon such expiration, be recomputed
as if:
(A) in the case of Convertible Securities or Options for
Common Stock the only Additional Shares of Common Stock issued were the shares
of Common Stock, if any, actually issued upon the exercise of such Options or
conversion or exchange of such Convertible Securities and the consideration
received therefor was the consideration actually received by the Corporation for
the issue of all such Options, whether or not exercised, plus the consideration
actually received by the Corporation upon such exercise, or for the issue of all
such Convertible Securities that were actually converted or exchanged, plus the
additional consideration, if any, actually received by the Corporation upon such
conversion or exchange, and
(B) in the case of Options for Convertible Securities
only the Convertible Securities, if any, actually issued upon the exercise
thereof were issued at the time of issue of such Options, and the consideration
received by the Corporation for the Additional Shares of Common Stock deemed to
have been then issued was the consideration actually received by the Corporation
for the issue of all such Options, whether or not exercised, plus the
consideration deemed to have been received by the Corporation (determined
pursuant to Section 3.4(d)(v)) upon the issue of the Convertible Securities with
respect to which such Options were actually exercised;
(4) in the case of any Options that expire by their
terms not more than 30 days after the date of issue thereof, no adjustment of
the Conversion Price shall be made until the expiration or exercise of all such
Options, whereupon such adjustment shall be made in the same manner provided in
clause (3) above; and
(5) if such record date shall have been fixed and such
Options or Convertible Securities are not issued on the date fixed therefor, the
adjustment previously made in the Conversion Price that became effective on such
record date shall be canceled as of the close of business on such record date,
and thereafter the Conversion Price shall be adjusted pursuant to this Section
3.4(d) as of the actual date of their issuance.
(iii) No Adjustment of Conversion Price. No adjustment of
the Conversion Price, in respect of the issuance of Additional Shares of Common
Stock or otherwise, shall be made
-9-
<PAGE> 10
unless the consideration per share for Additional Shares of Common Stock issued
by the Corporation is less than the Conversion Price in effect on the date of,
and immediately prior to, the issue of such Additional Shares of Common Stock.
(iv) Adjustment of Conversion Price Upon Issuance of Additional
Shares of Common Stock. In the event the Corporation shall issue Additional
Shares of Common Stock without consideration or for a consideration per share
less than the Conversion Price in effect on the date of and immediately prior to
such issue, then and in such event, the Conversion Price shall be reduced,
concurrently with such issue, to a price (calculated to the nearest cent)
determined by dividing:
(1) an amount equal to the sum of (A) the number of shares
of Common Stock outstanding immediately prior to such issue or subject to
options, warrants, conversion rights and other similar rights outstanding
immediately prior to such issue or (without duplication) reserved for issuance
under option plans and other plans applicable to employees or directors of the
Corporation, multiplied by the Conversion Price in effect immediately prior to
such issue, plus (B) the aggregate consideration, if any, received by the
Corporation for the issuance and sale of such Additional Shares of Common Stock
by
(2) the sum of (A) the number of shares of Common Stock
outstanding immediately prior to such issue or subject to options, warrants,
conversion rights and other similar rights outstanding immediately prior to such
issue or (without duplication) reserved for issuance under option plans and
other plans applicable to employees or directors of the Corporation, plus (B)
the number of such Additional Shares of Common Stock so issued.
(v)Determination of Consideration. For purposes of this Section
3.4(d), the consideration received by the Corporation for the issue of any
Additional Shares of Common Stock shall be determined as follows:
(1) Cash, Property and Services. Such consideration shall:
(A) insofar as it consists of cash, be computed at the
aggregate amount of cash received by the Corporation excluding amounts paid or
payable for accrued interest or accrued dividends;
(B) insofar as it consists of indebtedness (other than
Convertible Securities), be computed on the basis of the face amount of such
indebtedness on the date of such issue;
(C) insofar as it consists of (1) property other than
cash or indebtedness (other than Convertible Securities), or (2) services
rendered, be computed at the fair value thereof at the time of such issue as
determined in good faith by the Board of Directors; and
(D) in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets of the
Corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in
-10-
<PAGE> 11
Sections 3.4(v)(2)(A) and (B), allocable to the Additional Shares of Common
Stock, as determined by the Board of Directors in good faith.
(2) Options and Convertible Securities. The consideration
per share received by the Corporation for Additional Shares of Common Stock
deemed to have been issued pursuant to Section 3.4(d)(ii), relating to Options
and Convertible Securities, shall be determined by dividing:
(A) the total amount, if any, received or receivable by
the Corporation as consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration) payable to
the Corporation upon the exercise of such Options or the conversion or exchange
of such Convertible Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and the
conversion or exchange of such Convertible Securities, by
(B) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities.
The consideration per share so determined shall be subject to adjustment
pursuant to Sections 3.4(d)(ii)(2) through (5).
(e) Adjustment for Stock Splits, Dividends and Combinations. If the
Corporation, at any time or from time to time after the original issuance of the
Series A Preferred, shall effect a subdivision of the outstanding Common Stock,
or shall fix a record date for determination of stockholders entitled to receive
a dividend of Common Stock on its outstanding Common Stock, the Conversion Price
then in effect immediately before such subdivision or as of such record date
shall be proportionately reduced, and if the Corporation shall combine the
outstanding shares of Common Stock, the Conversion Price then in effect
immediately before the combination shall be proportionately increased. Any
adjustment under this Section 3.4(e) shall become effective at the close of
business on the date the subdivision or combination becomes effective or on the
record date for determining holders of any class of securities entitled to
receive the dividend, provided that if such record date shall have been fixed
and such dividend shall not have been fully paid on the date fixed therefor, the
adjustment previously made in the Conversion Price that became effective on such
record date shall be canceled as of the close of business on such record date,
and thereafter the Conversion Price shall be adjusted pursuant to this Section
3.4(e) as of the time of actual payment of such dividend.
(f) Adjustments for Other Dividends and Distributions. In the event
the Corporation at any time or from time to time shall make or issue, or fix a
record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in securities of the
Corporation other than shares of Common Stock, then and in each such event
provision shall be made so that the holders of shares of Series A Preferred
shall receive upon
-11-
<PAGE> 12
conversion thereof, in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities of the Corporation that they
would have received had their shares of Series A Preferred been converted into
shares of Common Stock on the date of such event, giving effect to all
adjustments called for with respect to such securities during the period from
the date of such event to and including the conversion date.
(g) Recapitalizations. If at any time or from time to time there
shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in
this Section 3.4 or Section 3.2(c)) provision shall be made so that the holders
of the Series A Preferred shall thereafter be entitled to receive upon
conversion of the Series A Preferred the number of shares of stock or other
securities or property, to which a holder of Common Stock deliverable upon
conversion would have been entitled on such recapitalization. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 3.4 with respect to the rights of the holders of the Series A
Preferred after the recapitalization so that the provisions of this Section 3.4
(including without limitation Section 3.4(d)) shall be applicable after that
event on a basis as equivalent to its application prior to such recapitalization
as practicable.
(h) No Impairment. The Corporation will not, by amendment of this
Certificate of Rights, Preferences and Privileges or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Corporation but will at all times in good faith assist in the carrying out of
all the provisions of this Section 3.4 and in the taking of all such action as
may be necessary or appropriate in order to protect the conversion rights of the
Series A Holders against impairment.
(i) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock such number of its shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all outstanding Series A
Preferred; and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of Series A Preferred, in addition to such other remedies as
shall be available to the Holders of such shares of Series A Preferred, the
Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes.
(j) Certificate of Conversion Price. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 3.4,
the Corporation, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Series A Preferred a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any holder of Series A Preferred, furnish or cause to be furnished to
such holder a like certificate setting forth (A) such adjustment and
readjustment, (B) the Conversion Price for the Series A Preferred at the time in
effect, and (C) the number of shares of Common Stock and the nature and amount,
if any, of other property which at the time would be received upon the
conversion of a share of Series A Preferred.
-12-
<PAGE> 13
(k) Notices of Record Date. In the event the Corporation takes a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or other
distribution, any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to receive
any other right, the Corporation shall mail to each holder of Series A
Preferred, at least 20 days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right.
3.5 Redemption.
(a) Redemption of Series A Preferred. Upon the written request from
the holders of a majority of the then outstanding Series A Preferred given not
more than 60 and not less than 15 days prior to each of December 31, 2001,
December 31, 2002 and December 31, 2003 (each a "Series A Redemption Date") that
all or some of such holders' shares be redeemed, and concurrently with surrender
by such holders of the certificates representing such shares, the Corporation
shall, to the extent it may lawfully do so, redeem the shares specified in such
request, up to 140,528 shares of Series A Preferred (as adjusted for any stock
dividends, combinations or splits with respect to such shares after the filing
of this Certificate) in the aggregate for each Redemption Date, by paying in
cash therefor a sum per share of $11.86 (as so adjusted) plus all accrued or
accumulated but unpaid dividends, if any, on such shares to the date of payment
(the "Series A Redemption Price"). The Series A Redemption Price will be paid on
the Redemption Date. If legal restrictions on redemptions preclude the
redemption pursuant to this Section 3.5 on the Series A Redemption Date of the
full number of shares of Series A Preferred so requested, the shares whose
redemption is so precluded shall be redeemed pursuant to this Section 3.5 within
10 days after, and to the extent, it becomes legally permissible to redeem some
or all of such shares. Any redemption effected pursuant to this Section 3.5
shall be made on a pro rata basis among the holders of Series A Preferred in
proportion to the number of shares of Series A Preferred then held by such
holders.
(b) Redemption of Series B Preferred. Subject to the payment in full
of all amounts required to be paid to the holders of Series A Preferred and any
other class or series of stock of the Corporation ranking on redemption prior
and in preference to the Series B Preferred, upon the determination by the
Corporation's board of directors of a date (the "Series B Redemption Date") that
all or some of the Series B Preferred shall be redeemed, and upon notice of
redemption being given by the Corporation to the holders of such shares, the
Corporation shall, to the extent it may lawfully do so, redeem the shares (as
adjusted for any stock dividends, combinations or splits with respect to such
shares after the filing of this Certificate) specified in the notice, by paying
in cash therefor a sum per share of $1.5525 (as so adjusted) (the "Series B
Redemption Price") concurrently with surrender by such holders of the
certificates representing such shares, all of which shall occur on or about the
Redemption Date. If legal restrictions on redemptions preclude the redemption
pursuant to this Section 3.5 on the Series B Redemption Date of the full number
of shares of Series B Preferred set forth in the notice, the shares whose
redemption is so precluded shall be redeemed pursuant to this Section 3.5 within
10 days after, and to the extent, it becomes legally permissible to redeem some
or all of such shares. Any redemption effected pursuant to this Section 3.5
shall be made on a pro rata basis among the holders of Series B Preferred in
proportion to the number of shares of Series B Preferred then held by such
holders.
-13-
<PAGE> 14
3.6 Notices. Any notice required by this Certificate to be given to the
holders of shares of Series A Preferred or to the holders of Series B Preferred
shall be deemed given if deposited in the United States mail, postage prepaid,
and addressed to each holder of record at its address appearing on the books of
the Corporation.
ARTICLE IV
The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, zip code 19801. The name of its registered
agent at such address is The Corporation Trust Company.
ARTICLE V
The corporation is to have perpetual existence.
ARTICLE VI
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to make, alter, amend or repeal
the Bylaws of the corporation.
ARTICLE VII
The election of directors need not be by written ballot unless the
Bylaws of the corporation shall so provide.
ARTICLE VIII
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the corporation.
ARTICLE IX
To the fullest extent permitted by the Delaware General Corporation Law
or any other applicable law as now in effect or as it may hereafter be amended,
a director of the corporation shall not be personally liable to the corporation
or its shareholders for monetary damages for any action taken, or any failure to
take any action, as a director.
The corporation shall indemnify to the fullest extent permitted by law
any person made or threatened to be made a party to an action or proceeding,
whether criminal, civil, administrative or
-14-
<PAGE> 15
investigative, by reason of the fact that he or she or his or her testator or
intestate is or was a director or officer of the corporation or any predecessor
of the corporation or serves or served any other enterprise as a director,
officer, employee or agent at the request of the corporation or any predecessor
to the corporation.
Neither any amendment nor repeal of this Article IX, nor the adoption of
any provision of this corporation's Certificate of Incorporation inconsistent
with this Article IX, shall eliminate or reduce the effect of this Article IX in
respect of any matter occurring, or any cause of action, suit or claim accruing
or arising or that, but for this Article IX, would accrue or arise, prior to
such amendment, repeal or adoption of an inconsistent provision.
ARTICLE X
Except as provided in Article IX above, 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
statute, and all rights conferred upon stockholders herein are granted subject
to this reservation.
IN WITNESS WHEREOF, the Company has caused this Certificate to be signed
by Eric Olafson, the Chairman, President and Chief Executive Officer of the
Corporation.
Dated: November 15, 2000
/s/ Eric Olafson
-----------------------------------------------
Eric Olafson
Chairman, President and Chief Executive Officer
-15-
