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RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED
OF
AMERICAN HEALTHWAYS, INC.
(Originally incorporated on September 2, 1981)
FIRST: The name of the corporation (hereinafter called the "Corporation") is
American Healthways, Inc.
SECOND: The address of the registered office of the Corporation in the State of
Delaware is 1209 Orange Street, City of Wilmington, County of New Castle. The
name of the registered agent of the Corporation at such 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 General Corporation Law of the
State of Delaware.
FOURTH: The aggregate number of shares of capital stock the Corporation is
authorized to issue is 20,000,000 shares, of which 15,000,000 shares shall be
Common Stock, par value $.001 per share (the "Common Stock"), and 5,000,000
shares shall be preferred stock, par value $.001 per share (the "Preferred
Stock"), of which 150,000 shares are designated as Series A Preferred Stock (the
"Series A Preferred Stock").
The designations and the powers, preferences and relative,
participating, optional or other rights of the capital stock and the
qualifications, limitations or restrictions thereof are as follows:
A. COMMON STOCK PROVISIONS
1. Voting Rights.
Except as otherwise required by law or expressly provided herein, the
holder of each share of Common Stock shall have one vote on each matter
submitted to a vote of the stockholders of the Corporation.
2. Dividend Rights.
Subject to the provisions of law, the holders of the Common Stock shall
be entitled to receive dividends at such times and in such amounts as may be
determined by the Board of Directors of the Corporation.
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3. Liquidation Rights.
In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, after payment or provision for
payment of the debts and other liabilities of the Corporation and the
preferential amounts to which the holders of any outstanding shares of Preferred
Stock shall be entitled upon dissolution, liquidation, or winding up, the
holders of the Common Stock shall be entitled to share ratably in the remaining
assets of the Corporation.
B. PREFERRED STOCK PROVISIONS
1. Designation.
The Board of Directors is authorized, subject to any limitations
prescribed by law, to provide for the issuance of the shares of Preferred Stock
in series, and by filing a certificate pursuant to the applicable law of the
State of Delaware, to establish from time to time the number of shares to be
included in each such series, and to fix the designation, powers, preferences,
and rights of the shares of each such series and any qualifications, limitations
or restrictions thereof. The number of authorized shares of Preferred 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 Common
Stock without a vote of the holders of the Preferred Stock, or of any series
thereof, unless a vote of any such holders is required pursuant to the
certificate or certificates establishing the series of Preferred Stock.
2. Liquidation Rights.
If upon any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, the assets available for distribution to holders of
shares of Preferred Stock of all series shall be insufficient to pay such
holders the full preferential amount to which they are entitled, then such
assets shall be distributed ratably among the shares of all series of Preferred
Stock in accordance with the respective preferential amounts payable with
respect thereto.
3. Series A Preferred Stock.
Pursuant to the authority vested in the Board of Directors in
accordance with the provisions of this Article Fourth of the Restated
Certificate of Incorporation, the Board of Directors does hereby create,
authorize and provide for the issuance of the Series A Preferred Stock out of
the class of 5,000,000 shares of Preferred Stock, having the voting powers,
designation, relative, participating, optional and other special rights,
preferences, and qualifications, limitations and restrictions thereof that are
set forth as follows:
(a) Designation and Amount. The shares of such series shall be
designated as Series A Preferred Stock ("Series A Preferred Stock") and
the number of shares constituting such series shall be 150,000. Such
number of shares may be adjusted by appropriate action of the Board of
Directors.
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(b) Dividends and Distributions. Subject to the prior and
superior rights of the holders of any shares of any other series of
Preferred Stock or any other shares of Preferred Stock of the
Corporation ranking prior and superior to the shares of Series A
Preferred Stock with respect to dividends, each holder of one
one-hundredth (1/100) of a share (a "Unit") of Series A Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for that purpose, dividends at
the same rate as dividends are paid with respect to the Common Stock. In
the event that the Corporation shall at any time after June 19, 2000
(the "Rights Dividend Declaration Date") (i) declare or pay any dividend
on outstanding shares of Common Stock payable in shares of Common Stock;
(ii) subdivide outstanding shares of Common Stock; or (iii) combine
outstanding shares of Common Stock into a smaller number of shares, then
in each such case the amount to which the holder of a Unit of Series A
Preferred Stock was entitled immediately prior to such event pursuant to
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which shall be the number of shares of Common
Stock that are outstanding immediately after such event and the
denominator of which shall be the number of shares of Common Stock that
were outstanding immediately prior to such event.
(c) Voting Rights. The holders of Units of Series A Preferred
Stock shall have the following voting rights:
(i) Subject to the provision for adjustment hereinafter
set forth, each Unit of Series A Preferred Stock shall entitle
the holder thereof to one vote on all matters submitted to a vote
of the stockholders of the Corporation. In the event the
Corporation shall at any time after the Rights Dividend
Declaration Date (i) declare any dividend on outstanding shares
of Common Stock payable in shares of Common Stock; (ii) subdivide
outstanding shares of Common Stock; or (iii) combine the
outstanding shares of Common Stock into a smaller number of
shares, then in each such case the number of votes per Unit to
which holders of Units of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying
such number by a fraction the numerator of which shall be the
number of shares of Common Stock that are outstanding immediately
after such event and the denominator of which shall be the number
of shares of Common Stock that were outstanding immediately prior
to such event.
(ii) Except as otherwise provided herein or by law, the
holders of Units of Series A Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(iii) Except as set forth herein or required by law, holders
of Units of Series A Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of shares of Common
Stock as set forth herein) for the taking of any corporate
action.
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(d) Reacquired Shares. Any Units of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such Units shall, upon their cancellation, become
authorized but unissued Units of Series A Preferred Stock to be created
by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
(e) Liquidation. Upon any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the holders of
Units of Series A Preferred Stock shall be entitled to share in any
assets remaining ratably with the holders of the Common Stock. In the
event the Corporation shall at any time after the Rights Dividend
Declaration Date (i) increase by way of stock split or similar
transaction the number of outstanding shares of Common Stock; (ii)
subdivide the outstanding shares of Common Stock; or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, then
in each such case the aggregate amount to which holders of Units of
Series A Preferred Stock were entitled prior to such event shall be
adjusted by multiplying such amount by a fraction, the numerator of
which shall be the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which shall be the
number of shares of Common Stock that were outstanding immediately prior
to such event.
(f) Share Exchange, Merger, Etc. In case the Corporation shall
enter into any share exchange, merger, combination or other transaction
in which the shares of Common Stock are exchanged for or converted into
other stock or securities, cash and/or any other property, then in any
such case Units of Series A Preferred Stock shall at the same time be
similarly exchanged for or converted into an amount per Unit (subject to
the provision for adjustment hereinafter set forth) equal to the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each
share of Common Stock is converted or exchanged. In the event the
Corporation shall at any time after the Rights Dividend Declaration Date
(i) declare any dividend on outstanding shares of Common Stock payable
in shares of Common Stock; (ii) subdivide outstanding shares of Common
Stock; or (iii) combine outstanding shares of Common Stock into a
smaller number of shares, then in each such case the amount set forth in
the immediately preceding sentence with respect to the exchange or
conversion of Units of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which shall be
the number of shares of Common Stock that are outstanding immediately
after such event and the denominator of which shall be the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(g) Redemption. The Units of Series A Preferred Stock shall not
be redeemable at the option of the Corporation or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Corporation
may acquire Units of Series A Preferred Stock in any other manner
permitted by law and the Certificate of Incorporation or Bylaws of the
Corporation.
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(h) Ranking. The Units of Series A Preferred Stock shall rank
junior to all other series of the Preferred Stock and to any other class
of Preferred Stock that hereafter may be issued by the Corporation as to
the payment of dividends and the distribution of assets, unless the
terms of any such series or class shall provide otherwise.
(i) Amendment. The Certificate of Incorporation, including
without limitation the provisions hereof, shall not hereafter be
amended, either directly or indirectly, or through merger or share
exchange with another corporation, in any manner that would alter or
change the powers, preferences or special rights of the Series A
Preferred Stock so as to affect the holders thereof adversely without
the affirmative vote of the holders of a majority or more of the
outstanding Units of Series A Preferred Stock, voting separately as a
class.
(j) Fractional Shares. The Series A Preferred Stock may be issued
in Units or other fractions of a share, which Units or fractions shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions
and to have the benefit of all other rights of holders of Series A
Preferred Stock.
FIFTH:
(a) The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors. Except as otherwise fixed by or
pursuant to the provisions of Article FOURTH hereof relating to the rights of
the holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation to elect additional directors under
specified circumstances, the number of directors shall be fixed by or in the
manner provided in the by-laws of the Corporation.
(b) The directors, other than those who may be elected by the holders of
any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, shall be divided into three classes, designated
Class I, Class II and Class III. Each class shall consist, as nearly equal in
number as possible, of one-third of the total number of directors constituting
the entire Board of Directors. At each annual meeting of stockholders,
successors to the class of directors whose term expires at that annual meeting
shall be elected for a three-year term. If the number of directors is changed,
any increase or decrease shall be apportioned among the classes so as to
maintain the number of directors in each class as nearly equal as possible.
(c) A director shall hold office until the annual meeting of
stockholders for the year in which his or her term expires and until his or her
successor shall be elected and shall qualify, subject, however, to prior death,
resignation, retirement, disqualification or removal from office. Any additional
director of any class appointed or elected to fill a vacancy resulting from an
increase in such class shall hold office for a term that shall coincide with the
remaining term of that class, but in no case will a decrease in the number of
directors shorten the term of any incumbent director.
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(d) Elections of directors need not be by written ballot unless the
by-laws of the Corporation so provide.
SIXTH: In furtherance and not in limitation of the powers conferred by statute
and unless otherwise provided herein, the Board of Directors, by a majority vote
taken at any meeting at which a quorum is present, is expressly authorized to
make, alter or repeal the by-laws of the Corporation.
SEVENTH: No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided, however, that this provision shall not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the Delaware General Corporation Law or (iv)
for any transaction from which the director derived an improper personal
benefit.
EIGHTH:
(a) Right to Indemnification. Each person who was or is made a party or
is threatened to be made a party to or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she is or was a
director or an officer of the Corporation or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "indemnitee"), whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such law permitted
the Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith; provided, however, that,
except as provided in Section (c) of this Article EIGHTH with respect to
proceedings to enforce rights to indemnification, the Corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation.
(b) Right to Advancement of Expenses. The right to indemnification
conferred in Section (a) of this Article EIGHTH shall include the right to be
paid by the Corporation the expenses (including attorneys' fees) incurred in
defending any such proceeding in advance of its final disposition (hereinafter
an "advancement of expenses"); provided, however, that, if the Delaware General
Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a director or officer (and not in any other capacity
in which
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service was or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to the
Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of
such indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal (hereinafter a "final adjudication") that such indemnitee is not entitled
to be indemnified for such expenses under this Section (b) or otherwise. The
rights to indemnification and to the advancement of expenses conferred in
Sections (a) and (b) of this Article EIGHTH shall be contract rights and such
rights shall continue as to an indemnitee who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the indemnitee's
heirs, executors and administrators.
(c) Right of Indemnitee to Bring Suit. If a claim under Section (a) or
(b) of this Article EIGHTH is not paid in full by the Corporation within sixty
(60) days after a written claim has been received by the Corporation, except in
the case of a claim for an advancement of expenses, in which case the applicable
period shall be twenty (20) days, the indemnitee may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by the indemnitee to
enforce a right to indemnification hereunder (but not in a suit brought by the
indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that, and (ii) in any suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the Corporation
shall be entitled to recover such expenses upon a final adjudication that, the
indemnitee has not met any applicable standard for indemnification set forth in
the Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or brought by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article EIGHTH or otherwise shall be on the Corporation.
(d) Non-Exclusivity of Rights. The rights to indemnification and to the
advancement of expenses conferred in this Article EIGHTH shall not be exclusive
of any other right which any person may have or hereafter acquire under any
statute, the Corporation's Restated Certificate of Incorporation, by-laws,
agreement, vote of stockholders or disinterested directors or otherwise.
(e) Insurance. The Corporation may maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of the
Corporation or another corporation,
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partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under the Delaware
General Corporation Law.
(f) Indemnification of Employees and Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses to
any employee or agent of the Corporation to the fullest extent of the provisions
of this Article EIGHTH with respect to the indemnification and advancement of
expenses of directors and officers of the Corporation.
NINTH: No amendment to or repeal of Article SEVENTH or EIGHTH of this Restated
Certificate of Incorporation shall apply to or have any effect on the rights of
any individual referred to in Article SEVENTH or EIGHTH for or with respect to
acts or omissions of such individual occurring prior to such amendment or
repeal.
TENTH:
A. Vote Required For Certain Business Combinations
1. In addition to any affirmative vote required by law or this
Restated Certificate of Incorporation, and except as otherwise expressly
provided in Section B of this Article TENTH:
(a) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder) which is, or after such merger or
consolidation would be, an Affiliate (as hereinafter defined) of an
Interested Stockholder; or
(b) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or
with any Interested Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any Subsidiary having an
aggregate Fair Market Value of $30,000,000 or more; or
(c) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of transactions) of any securities of
the Corporation or any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an aggregate Fair
Market Value of $10,000,000 or more; or
(d) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate of any Interested Stockholder; or
(e) any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation
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with any of its Subsidiaries or any other transaction (whether or not
with or into or otherwise involving an Interested Stockholder) which has
the effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or convertible
securities of the Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder or any Affiliate of any
Interested Stockholder;
shall require the affirmative vote of the holders of at least 80% of the voting
power of the then outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (the "Voting Stock"),
excluding shares held by the Interested Stockholder, voting together as a single
class (it being understood that for purposes of this Article TENTH, each share
of the Voting Stock shall have the number of votes granted to it pursuant to
Article FOURTH of this Restated Certificate of Incorporation). Such affirmative
vote shall be required notwithstanding the fact that no vote may be required, or
that a lesser percentage may be specified, by law or in any agreement with any
national securities exchange or otherwise.
2. The term "Business Combination" as used in this Article TENTH
shall mean any transaction which is referred to in any one or more of
subparagraphs (a) through (e) of paragraph 1 of this Section A.
B. When Higher Vote Is Not Required. The provisions of Section A of
this Article TENTH shall not be applicable to any particular Business
Combination, and such Business Combination shall require only such affirmative
vote as is required by law and any other provision of this Restated Certificate
of Incorporation, if all of the conditions specified in either of the following
paragraphs 1 or 2 are met:
1. The Business Combination shall have been approved by a majority
of the Disinterested Directors (as hereinafter defined).
2. All of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market
Value (as hereinafter defined) as of the date of the consummation of the
Business Combination of consideration other than cash to be received per
share by holders of Common Stock in such Business Combination shall be
at least equal to the higher of the following:
I. (if applicable) the Highest Per Share Price (as
hereinafter defined) (including the brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by the
Interested Stockholder for any shares of Common Stock acquired by
it (X) within the two year period immediately prior to the first
public announcement of the proposal of the Business Combination
(the "Announcement Date") or (Y) in the transaction in which it
became an Interested Stockholder, whichever is higher; and
II. the Fair Market Value per share of Common Stock on
the Announcement Date or on the date on which the Interested
Stockholder became
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an Interested Stockholder (such latter date is referred to in
this Article TENTH as the "Determination Date"), whichever is
higher.
(b) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the Business Combination of
consideration other than cash to be received per share by holders of
shares of any class of outstanding Voting Stock other than Common Stock
shall be at least equal to the highest of the following (it being
intended that the requirements of this subparagraph (b) shall be
required to be met with respect to every such class of outstanding
Voting Stock, whether or not the Interested Stockholder has previously
acquired any shares of a particular class of Voting Stock):
I. (if applicable) the Highest Per Share Price (as
hereinafter defined) (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by the
Interested Stockholder for any shares of such class of Voting
Stock acquired by it (X) within the two-year period immediately
prior to the Announcement Date or (Y) in the transaction in which
it became an Interested Stockholder, whichever is higher;
II. (if applicable) the highest preferential amount per
share to which the holders of shares of such class of Voting
Stock are entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation; and
III. the Fair Market Value per share of such class of
Voting Stock on the Announcement Date or on the Determination
Date, whichever is higher.
(c) The consideration to be received by holders of a
particular class of outstanding Voting Stock (including Common Stock)
shall be in cash or in the same form as the Interested Stockholder has
previously paid for shares of such class of Voting Stock. If the
Interested Stockholder has paid for shares of any class of Voting
Stock with varying forms of consideration, the form of consideration
for such class of Voting Stock shall be either cash or the form used
to acquire the largest number of shares of such class of Voting Stock
previously acquired by it.
(d) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such Business
Combination: (i) except as approved by a majority of the Disinterested
Directors, there shall have been no failure to declare and pay at the
regular date therefor any full quarterly dividends (whether or not
cumulative) on any outstanding Preferred Stock; (ii) there shall have
been (x) no reduction in the annual rate of dividends paid on the Common
Stock (except as necessary to reflect any subdivision of the Common
Stock), except as approved by a majority of the Disinterested Directors,
and (y) an increase in such annual rate of dividends as necessary to
reflect any reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which has
the effect of reducing the number of outstanding shares of the Common
Stock, unless the failure so to increase such annual rate is approved
by a
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majority of the Disinterested Directors; and (iii) such Interested
Stockholder shall have not become the beneficial owner of any additional
shares of Voting Stock except as part of the transaction which results
in such Interested Stockholder becoming an Interested Stockholder.
(e) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the
benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantages provided
by the Corporation, whether in anticipation of or in connection with
such Business Combination or otherwise.
(f) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), and the
rules and regulations thereunder (or any subsequent provisions replacing
the Exchange Act, rules or regulations) shall be mailed to public
stockholders of the Corporation at least 30 days prior to the
consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to the Exchange
Act or subsequent provisions).
C. Certain Definitions. For the purposes of this Article TENTH:
1. A "person" shall mean any individual, firm, corporation or other
entity.
2. "Interested Stockholder" shall mean any person (other than the
Corporation or any Subsidiary) who or which:
(a) is the beneficial owner, directly or indirectly, of more
than 20% of the voting power of the outstanding Voting Stock; or
(b) is an Affiliate of the Corporation and at any time within
the two-year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, within the meaning of Rule
13d-3 under the Exchange Act, of 20% or more of the voting power of the
then outstanding Voting Stock; or
(c) is an assignee of or has otherwise succeeded to any
shares of Voting Stock which were at any time within the two-year period
immediately prior to the date in question beneficially owned by any
Interested Stockholder, if such assignment or succession shall have
occurred in the course of a transaction or series of transactions not
involving a public offering within the meaning of the Securities Act of
1933.
3. A person shall be a "beneficial owner" of any Voting Stock:
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(a) which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly, within
the meaning of Rule 13d-3 under the Exchange Act; or
(b) which such person or any of its Affiliates or Associates has
(i) the right to acquire (whether such right is exercisable immediately
or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (ii) the right to
vote pursuant to any agreement, arrangement or understanding (but
neither such person nor any such Affiliate or Associate shall be deemed
to be the beneficial owner of any shares of Voting Stock solely by
reason of a revocable proxy granted for a particular meeting of
stockholders, pursuant to a public solicitation of proxies for such
meeting, and with respect to which shares neither such person nor any
such Affiliate or Associate is otherwise deemed the beneficial owner);
or
(c) which are beneficially owned, directly or indirectly, within
the meaning of Rule 13d-3 under the Exchange Act, by any other person
with which such person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purposes of acquiring,
holding, voting (other than solely by reason of a revocable proxy as
described in subparagraph (b) of this paragraph (3)) or disposing of any
shares of Voting Stock;
provided, however, that in the case of any employee stock ownership or similar
plan of the Corporation or of any Subsidiary in which the beneficiaries thereof
possess the right to vote any shares of Voting Stock held by such plan, no such
plan nor any trustee with respect thereto (nor any Affiliate of such trustee),
solely by reason of such capacity of such trustee, shall be deemed, for any
purposes hereof, to beneficially own any shares of Voting Stock held under any
such plan.
4. For the purposes of determining whether a person is an Interested
Stockholder pursuant to paragraph 2 of this Section C, the number of shares of
Voting Stock deemed to be outstanding shall include shares deemed owned by such
person through application of paragraph 3 of this Section C but shall not
include any other shares of Voting Stock which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of conversion rights,
warrants or options, or otherwise.
5. "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act.
6. "Subsidiary" means any corporation of which a majority of any class
of equity security is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Interested
Stockholder set forth in paragraph 2 of this Section C, the term "Subsidiary"
shall mean only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
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7. "Disinterested Director" means any member of the Board of Directors
who is unaffiliated with the Interested Stockholder and was a member of the
Board of Directors prior to the time that the Interested Stockholder became an
Interested Stockholder, and any successor of a Disinterested Director who is
unaffiliated with the Interested Stockholder and is recommended to succeed a
Disinterested Director by a majority of Disinterested Directors then on the
Board of Directors.
8. "Fair Market Value" means: (a) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape,
on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Exchange Act on which such stock is listed, or, if such stock is not listed
on any such exchange, the highest closing bid quotation with respect to a share
of such stock during the 30-day period preceding the date in question on the
National Association of Securities Dealers Automated Quotation System or any
system then in use, or if no such quotations are available, the fair market
value on the date in question of a share of such stock as determined by the
Board of Directors in good faith, in each case with respect to any class of
stock, appropriately adjusted for any dividend or distribution in shares of such
stock or any stock split or reclassification of outstanding shares of such stock
into a greater number of shares of such stock or any combination or
reclassification of outstanding shares of such stock into a smaller number of
shares of such stock; and (b) in the case of property other than cash or stock,
the fair market value of such property on the date in question as determined by
the Board of Directors in good faith.
9. References to "Highest Per Share Price" shall in each case with
respect to any class of stock reflect an appropriate adjustment for any dividend
or distribution in shares of such stock or any stock split or reclassification
of outstanding shares of such stock into a greater number of shares of such
stock or any combination or reclassification of outstanding shares of such stock
into a smaller number of shares of such stock.
10. In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash" as used in subparagraphs
(a) and (b) of paragraph 2 of Section B of this Article TENTH shall include the
shares of Common Stock and/or the shares of any other class of outstanding
Voting Stock retained by the holders of such shares.
D. Powers of the Board of Directors. A majority of the directors of the
Corporation shall have the power and duty to determine for the purposes of this
Article TENTH, on the basis of information known to them after reasonable
inquiry, (a) whether a person is an Interested Stockholder, (b) the number of
shares of Voting Stock beneficially owned by any person, (c) whether a person is
an Affiliate or Associate of another and (d) whether the assets which are the
subject of any Business Combination have, an aggregate Fair Market Value of
$30,000,000 or more, or the consideration to be received for the issuance or
transfer of securities by the Corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of $10,000,000 or more.
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E. No Effect on Fiduciary Obligations of Interested Stockholders.
Nothing contained in this Article TENTH shall be construed to relieve any
Interested Stockholder from any fiduciary obligation imposed by law.
F. Amendment or Repeal. Notwithstanding any other provisions of this
Restated Certificate of Incorporation or the by-laws of the Corporation (and
notwithstanding the fact that a lesser percentage may be specified by law, this
Restated Certificate of Incorporation or the by-laws of the Corporation), the
affirmative vote of the holders of 80% or more of the outstanding Voting Stock,
excluding shares held by an Interested Stockholder, voting together as a single
class, shall be required to amend or repeal, or adopt any provisions
inconsistent with this Article TENTH.
ELEVENTH: No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent, in writing, without a
meeting, to the taking of any action is specifically denied.
TWELFTH: The Corporation shall not be governed by the provisions of Section 203
of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation which
restates, integrates and amends the provisions of the Certificate of
Incorporation of the Corporation, and which has been duly adopted in accordance
with Section 242 of the General Corporation Law of the State of Delaware, has
been executed by its President and attested by its Secretary, this ____ day of
August, 1991.
AMERICAN HEALTHWAYS, INC.
By:
-------------------------------
Thomas G. Cigarran
President
ATTEST:
------------------------------
Henry D. Herr
Secretary
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