<PAGE>
As filed with the Securities and Exchange Commission on March 9, 2000.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------------------
PERCEPTRONICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-2577731
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
----------------------------------------
21010 Erwin Street
Woodland Hills, California 91367
(Address, including zip code, of registrant's principal executive offices)
----------------------------------------
PERCEPTRONICS, INC. 1999 STOCK OPTION PLAN
PERCEPTRONICS, INC. 1999 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
(Full Title of the Plans)
Gershon Weltman, Chief Executive Officer
PERCEPTRONICS, INC.
21010 Erwin Street
Woodland Hills, California 91367
(818) 884-7470
(Name, address, and telephone number, including area code, of agent for service)
WITH A COPY TO:
John M. Iino, Esq.
Brand Farrar & Buxbaum LLP
515 South Flower Street, Suite 3500
Los Angeles, California 90071-2201
(213) 228-0288
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities to Amount to be Offering Price Per Aggregate Offering Amount of
be Registered Registered (1) Share (2) Price Registration Fee (2)
<S> <C> <C> <C> <C>
Common Stock 750,000 $2.438 $1,828,500 $483.00
</TABLE>
(1) An undetermined number of additional shares may be issued if the
anti-dilution adjustment provisions of the Plans become operational.
(2) The price of $2.438 per share, which is the average of the bid and
asked prices of the Common Stock reported on the OTC Bulletin Board
on March 8, 2000, is set forth solely for purposes of calculating
the filing fee pursuant to Rule 457(c) and (h).
2
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
The documents containing the information specified in this Item 1 will
be sent or given to employees, directors or others as specified by Rule
428(b)(1) promulgated under the Securities Act of 1933, as amended (the "1933
Act"). In accordance with the rules and regulations of the Securities and
Exchange Commission (the "SEC") and the instructions to Form S-8, such documents
are not being filed with the SEC either as part of this Registration Statement
or as prospectus supplements pursuant to Rule 424.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
The documents containing the information specified in this Item 2 will
be sent or given to employees as specified by Rule 428(b). In accordance with
the rules and regulations of the SEC and the instructions to Form S-8, such
documents are not being filed with the SEC either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the SEC are incorporated by
reference in this Registration Statement:
(1) The Registrant's Annual Report on Form 10-KSB for the year ended
March 31, 1999, filed with the SEC on June 24, 1999, and the portions of the
Registrant's Proxy Statement filed with the SEC on July 29, 1999, incorporated
by reference in such Annual Report on such Form 10-KSB.
(2) The Registrant's Quarterly Report on Form 10-QSB for the quarterly
period ended June 30, 1999, filed with the SEC on August 16, 1999.
(3) The Registrant's Quarterly Report on Form 10-QSB for the quarterly
period ended September 30, 1999, filed with the SEC on November 15, 1999.
(4) The Registrant's Quarterly Report on Form 10-QSB for the quarterly
period ended December 31, 1999, filed with the SEC on February 14, 2000.
(5) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed with the SEC on August 2,
1983
2
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pursuant to Section 12 of the Securities Exchange Act of 1934, as amended
(the "1934 Act").
All documents subsequently filed with the SEC by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the
filing of a post-effective amendment which indicates that all securities offered
herein have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Brand Farrar & Buxbaum LLP, counsel to the Registrant, holds 14,285
shares of the Registrant's Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law permits the indemnification of
officers, directors, employees and agents of the Registrant. The Registrant's
Bylaws and Indemnification Agreements between the Registrant and certain of its
officers and directors require the Registrant to indemnify such persons to the
fullest extent permitted by law. In addition, the Registrant's Certificate of
Incorporation provides that directors shall not be personally liable to the
Registrant or its stockholders for monetary damages for breach of their
fiduciary duty subject to certain exceptions as provided by law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The Exhibit Index appears on page 8.
ITEM 9. UNDERTAKINGS.
The Registrant hereby undertakes to file, during any period in which
offers or sales are being made, a post-effective amendment to this Registration
Statement to:
(i) Include any prospectus required by Section 10(a)(3) of
the 1933 Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration
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statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the SEC pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent
no more than a 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement; and
(iii) Include any additional or changed material information
on the plan of distribution.
The Registrant hereby undertakes that, for the purpose of determining
any liability under the 1933 Act, each such post-effective amendment shall be
deemed to be a new registration statement of the securities offered, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The Registrant hereby undertakes to file a post-effective amendment to
this Registration Statement to remove from registration any of the securities
being registered which remain unsold at the termination of the offering.
The Registrant hereby undertakes that, for purposes of determining any
liability under the 1933 Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the 1934 Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the 1934 Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California on March 3, 2000.
PERCEPTRONICS, INC.
By: /s/ Gershon Weltman
------------------------
Dr. Gershon Weltman
President
POWER OF ATTORNEY
We, the undersigned officers and directors of Perceptronics, Inc.,
hereby severally constitute and appoint Dr. Gershon Weltman our true and lawful
attorney, with full power to him, to sign for us in our names in the capacities
indicated below, any amendments to this Registration Statement on Form S-8
(including post-effective amendments), and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, and generally to do all things in our names and on our
behalf in our capacities as officers and directors to enable Perceptronics, Inc.
to comply with the provisions of the Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by our said attorney to said
Registration Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
/s/ Gershon Weltman Chairman of the Board,
- ------------------- President and Acting Chief March 6, 2000
Dr. Gershon Weltman Financial Officer
/s/ Amos Freedy Director March 6, 2000
- -------------------
Dr. Amos Freedy
5
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/s/ John Lyman Director March 6, 2000
- ------------------------
Dr. John Lyman
/s/ Robert Parker Director March 6, 2000
- ------------------------
Robert Parker
/s/ Stanley B. Schneider Director March 6, 2000
- ------------------------
Stanley B. Schneider
/s/ Richard Moskowitz Director March 6, 2000
- ------------------------
Richard Moskowitz
/s/ Robert E. Anderson Controller March 6, 2000
- ------------------------
Robert E. Anderson
6
<PAGE>
EXHIBIT INDEX
Exhibits marked with an asterisk (*) are incorporated by reference to
documents previously filed by the Registrant with the Securities and Exchange
Commission, as indicated. All other documents listed are filed with this
Registration Statement.
Exhibit
NUMBER DESCRIPTION
4.1 Certificate of Incorporation of the Registrant, as amended.
4.2 Bylaws of the Registrant, as amended.
4.3 Perceptronics, Inc. 1999 Stock Option Plan (incorporated by
reference to the Registrant's definitive Proxy Statement filed
with the SEC on July 29, 1999).*
4.4 Perceptronics, Inc. 1999 Stock Option Plan for Non-Employee
Directors (incorporated by reference to the Registrant's
definitive Proxy Statement filed with the SEC on
July 29, 1999).*
5.1 Opinion of Brand Farrar & Buxbaum LLP.
23.1 Consent of Brand Farrar & Buxbaum LLP (included in Exhibit 5.1).
23.2 Consent of Beckman Kirkland & Whitney.
24.1 Power of Attorney (included as part of the signature page to
this Registration Statement).
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EXHIBIT 4.1
CERTIFICATE OF INCORPORATION
OF PERCEPTRONICS, INC.
FIRST: The name of the Corporation is Perceptronics, Inc.
(hereinafter sometimes referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in
the State of Delaware is 229 So. State Street, Dover, Delaware 19901, in the
City of Dover, County of Kent. The name of the registered agent at that
address is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful
act or activity for which a corporation may be organized under the General
Corporation Law of Delaware.
FOURTH:
(a) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is sixteen million
(16,000,000), consisting of:
(1) one million (1,000,000) shares of Preferred
Stock, par value one-tenth cent ($.001 per share)
(the "Preferred Stock"); and
(2) fifteen million (15,000,000) shares of Common
Stock, par value one-tenth cent ($.001) per share
(the "Common Stock").
(b) 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, and to increase or decrease the number of shares
of any such series to the extent permitted by the Delaware General
Corporation Law, as amended from time to time.
<PAGE>
FIFTH: The following provisions are inserted for the management of
the business and the conduct of the affairs of the Corporation, and for
further definition, limitation and regulation of the powers of the
Corporation and of its directors and shareholders:
(a) The holders of each class or series of stock entitled to
vote in the election of directors shall be entitled to cumulative
voting in the election of directors in the manner provided in the
by-laws of the Corporation.
(b) The directors shall have the concurrent power with the
stockholders to adopt, amend or repeal the by-laws of the Corporation.
SIXTH: A director of this Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (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.
If the Delaware General Corporation Law is hereafter amended to
authorize the further elimination or limitation of the liability of a director,
then the liability of the directors of the Corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware General Corporation Law,
as so amended.
Any repeal or modification of the foregoing provisions of this Article
SIXTH by the stockholders of the Corporation shall not adversely affect any
right or protections of a director of the Corporation existing at the time of
such repeal or modification.
SEVENTH: The Corporation reserves the right to amend or repeal any
provision contained in this Certificate of Incorporation in the manner
prescribed by the laws of the State of Delaware and all rights conferred upon
stockholders are granted subject to this reservation.
EIGHTH: The names and mailing address of the sole incorporator are as
follows:
Name Mailing Address
---- ---------------
2
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Charles Baclet Prentice-Hall Corporate Services
6430 Sunset Boulevard
Los Angeles, California 90028
I, THE UNDERSIGNED, being the incorporator, for the purpose of forming
a corporation under the laws of the State of Delaware, do make, file and record
this Certificate of Incorporation, do certify that the facts herein stated are
true, and accordingly, have hereto set my hand this 8th day of September, 1987.
/s/ Charles Baclet
------------------
Charles Baclet
3
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (hereinafter called the "Merger
Agreement") is made as of September 11, 1987 by and between PERCEPTRONICS, INC.,
a California corporation (the "Company"), and PERCEPTRONICS, INC., a Delaware
corporation and a wholly-owned subsidiary of the Company ("Perceptronics
Delaware").
RECITALS
A. The Board of Directors of the Company and the Board of Directors of
Perceptronics Delaware deem it advisable that the Company merge into
Perceptronics Delaware pursuant to the General Corporation Law of the State of
Delaware ("Delaware Law") and the General Corporation Law of the State of
California ("California Law"), and the Board of Directors of each of such
corporations has approved this Agreement.
B. The Board of Directors of the Company has directed that this
Agreement be submitted to a vote of the Company's shareholders at the 1987
Annual Meeting of Shareholders to be held on October 15, 1987, or any
adjournment thereof.
C. The Company, as the sole shareholder of Perceptronics Delaware, has
adopted and approved this Agreement by written consent dated as of September 11,
1987.
NOW, THEREFORE, the parties do hereby adopt the plan of reorganization
encompassed by this Merger Agreement and do hereby agree that the Company shall
merge into Perceptronics Delaware on the following terms, conditions and other
provisions:
I. TERMS AND CONDITIONS
1.1 MERGER. The Company shall be merged with and into Perceptronics
Delaware, and Perceptronics Delaware shall be the surviving corporation (the
"Merger"), effective upon the date when a duly executed copy of this Merger
Agreement is filed with the Secretaries of State of Delaware and California (the
"Effective Date").
1.2 EFFECT OF MERGER:
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(a) On the Effective Date, the separate corporate existence of
the Company shall cease and the corporate existence of Perceptronics
Delaware, as governed by Delaware Law, shall continue unimpaired and
unaffected by the Merger.
(b) On the Effective Date, the shares of Perceptronics
Delaware Common Stock theretofore issued and outstanding shall be
retired and canceled.
(c) On the Effective Date, each share of the Company's Common
Stock issued and outstanding shall be converted by reason of the Merger
and without any action on the part of the holders thereof into and
become one share of Perceptronics Delaware Common Stock. The shares of
the Company's Common Stock so converted shall cease to exist as such
and shall exist only as shares of Perceptronics Delaware Common Stock.
1.3 STOCK CERTIFICATES. On and after the Effective Date, all of the
outstanding certificates which prior to that time represented shares of the
Common Stock of the Company shall be deemed for all purposes to evidence
ownership of and to represent the shares of Perceptronics Delaware into which
the shares of the Company represented by such certificates have been
converted as herein provided. The registered owner on the books and records
of the Company or its transfer agents of any such outstanding stock
certificate shall, until such certificate shall have been surrendered for
transfer or conversion or otherwise accounted for to Perceptronics Delaware
or its transfer agents, have and be entitled to exercise any voting and other
rights with respect to and to receive any dividend and other distributions
upon the shares of Perceptronics Delaware evidenced by such outstanding
certificate as above provided.
1.4 OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES. Upon the Effective
Date, Perceptronics Delaware will assume and continue the Company's 1982
Incentive Stock Option Plan and 1984 Non-Qualified Stock Option Plan, and
each option, warrant or other security exercisable or convertible into Common
Stock of the Company outstanding immediately prior to the Merger shall, by
virtue of the Merger and without any action on the part of the holder
thereof, become an option, warrant or other security to purchase the same
number of shares of Common Stock of Perceptronics Delaware with no other
changes in the terms and conditions thereof, including exercise of conversion
prices.
II. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
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2.1 PERCEPTRONICS DELAWARE CERTIFICATE OF INCORPORATION AND BY-LAWS.
The Certificate of Incorporation of Perceptronics Delaware, as in effect on
the Effective Date, shall continue to be the Certificate of Incorporation of
Perceptronics Delaware until further amended in accordance with the
provisions thereof and applicable law. The By-laws of Perceptronics Delaware,
as amended and in effect on the Effective Date, shall continue to be the
By-laws of Perceptronics Delaware without change or amendment until further
amended in accordance with the provisions thereof and applicable law.
2.2 PERCEPTRONICS DELAWARE DIRECTORS AND OFFICERS. The directors of
Perceptronics Delaware shall continue in office for their current terms and
until their successors are elected and qualified, or until their death,
resignation or removal. The officers of Perceptronics Delaware shall remain
officers of Perceptronics Delaware on the Effective Date and shall serve at
the pleasure of the Board of Directors.
III. CONDITIONS TO MERGER
3.1 CONDITIONS. The consummation of the Merger and the other
transactions contemplated by this Agreement is subject to the satisfaction of
the following conditions prior to or on the Effective Date:
(a) SHAREHOLDER APPROVAL. The principal terms of this
Agreement shall have been approved by the Company's shareholders; and
(b) LISTING. The shares of Perceptronics Delaware Common Stock
to be issued shall be, upon official notice of issuance, listed on the
National Association of Securities Dealers' Automatic Quotation System
("NASDAQ").
IV. TRANSFER OF ASSETS AND LIABILITIES
On the Effective Date, the rights, privileges, powers and franchises,
both of a public as well as of a private nature, of each of the Company and
Perceptronics Delaware shall be vested in and possessed by Perceptronics
Delaware, subject to all the disabilities, duties and restrictions of or upon
each of the Company and Perceptronics Delaware; and all rights, privileges,
powers and franchises of each of the Company and Perceptronics Delaware, and all
property, real, personal and mixed, of each of the Company and Perceptronics
Delaware, and all debts due to each of the Company and Perceptronics Delaware on
whatever account, and all things in action or belonging to each of the Company
and Perceptronics Delaware shall be transferred to and wasted in Perceptronics
Delaware; and all property, rights, privileges, powers and
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franchises, and all and every other interest, shall be thereafter as
effectually the property of Perceptronics Delaware as they were of the
Company and Perceptronics Delaware, and the title to any real estate vested
by deed or otherwise in either of the Company or Perceptronics Delaware shall
not revert or be in any way impaired by reason of the Merger; PROVIDED,
HOWEVER, that the liabilities of the Company and Perceptronics Delaware and
of their shareholders, directors and officers shall not be affected and all
rights of creditors and all liens upon any property or either of the Company
or Perceptronics Delaware shall be preserved unimpaired, and any claim
existing or action or proceeding pending by or against either the Company or
Perceptronics Delaware may be prosecuted to judgment as if such Merger had
not taken place except as they may be modified with the consent of such
creditors and all debts, liabilities and duties of or upon each of the
Company and Perceptronics Delaware shall attach to Perceptronics Delaware,
and may be enforced against it to the same extent as if such debts,
liabilities and duties had been incurred or contracted by it. The parties
hereto agree that from time to time and as and when requested by
Perceptronics Delaware, or by its successors or assigns, to the extent
permitted by law, the officers and directors of Company or Perceptronics
Delaware are fully authorized in the name of the Company or otherwise to
execute and deliver all such deeds, assignments, confirmations, assurances
and other instruments and to take or cause to be taken all such further
action as Perceptronics Delaware may deem necessary or desirable in order to
vest, perfect, confirm in or assure Perceptronics Delaware title to and
possession of all of said property, rights, privileges, powers and franchises
and otherwise to carry out the intent and purposes of this Merger Agreement.
V. MISCELLANEOUS
5.1 ABANDONMENT. At any time before the Effective Date, this Merger
Agreement may be terminated and the Merger may be abandoned by the Board of
Directors of the Company, notwithstanding approval of this Merger Agreement
by the shareholders of the Company.
5.2 AMENDMENT. At any time before the Effective Date, this Merger
Agreement may be amended, modified or supplemented by the Board of Directors
of the parties hereto, notwithstanding approval of this Merger Agreement by
the shareholders of the Company, provided, however, that no such amendment,
modification or supplement not approved by the shareholders shall change any
of this Agreement's principal terms.
5.3 COUNTERPARTS. In order to facilitate the filing and recording of
this Merger Agreement, the same may be executed in any number of counterparts,
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each of which shall be deemed to be an original.
IN WITNESS WHEREOF, this Merger Agreement, having first been duly
approved by the Board of Directors of each of the parties hereto, is hereby
executed on behalf of each of said corporations and attested by their
respective officers thereunto duly authorized.
PERCEPTRONICS, INC.
A California corporation
By: /s/ Gershon Weltman
----------------------------------------
Gershon Weltman, Chief Executive Officer
Officer
ATTEST:
/s/ Sarah A. S. Goldberg
-----------------------------------------
Sarah A. S. Goldberg, Secretary
PERCEPTRONICS, INC.
A Delaware corporation
By: /s/ Gershon Weltman
----------------------------------------
Gershon Weltman, Chief Executive Officer
Officer
ATTEST:
/s/ Sarah A. S. Goldberg
-----------------------------------------
Sarah A. S. Goldberg, Secretary
8
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CERTIFICATE OF SECRETARY OF
PERCEPTRONICS, INC., A DELAWARE CORPORATION
The undersigned, being the Secretary of Perceptronics, Inc., a
Delaware corporation, does hereby certify that the foregoing Agreement and
Plan of Merger was adopted and approved by the sole shareholder of
Perceptronics, Inc., a Delaware corporation, by written consent dated as of
September 11, 1987.
Date: October 21, 1987 /s/ Sarah A. S. Goldberg
-------------------------------
Sarah A. S. Goldberg, Secretary
9
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Certificate of Designation, voting Powers,
Preferences and Rights of Two Series
of Preferred Stock of Perceptronics, Inc.
Pursuant to Section 151(g) of the Delaware General Corporation Law,
I, Gershon Weltman, Ph.D., Chief Executive Officer of Perceptronics, Inc., a
Delaware corporation (the "Corporation"), hereby certify that the following
is a true and correct copy of a resolution duly adopted by the Corporation's
Board of Directors at meetings hold on April 27, 1993, at which a quorum was
present and acting throughout, and that the resolution has not bean rescinded
or amended and is in full force and effect at the date hereof:
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Corporation's Board of Directors by the Corporation's
Certificate of Incorporation, as amended to date, the Board of Directors
hereby creates two series of Preferred Stock of the Corporation, to be
designated "Series A Convertible Preferred Stock," consisting of 500,000
shares, and "Series B Convertible Preferred Stock," consisting of 246,700
shares, (hereinafter referred to as the "Preferred Stock") and hereby fixes
the voting powers, designations, preferences and relative participating,
optional or other rights, and the qualifications, limitations or restrictions
thereof, of the Preferred Stock, as follows; and
RESOLVED, FURTHER, that the Series A Preferred Stock shall be issued in
two classes, which shall be designated and known as "Series A-1 Preferred Stock"
and "Series A-2 Preferred Stock," and that the number of shares constituting
each class shall be 250,000 shares of Series A-1 Preferred Stock and 250,000
shares of Series A-2 Preferred Stock, and that all series and classes of
Preferred Stock shall be identical with each other in all respects except as
otherwise provided herein.
Section 1. DEFINITIONS. The following terms shall have the
following meanings:
1.1 "Additional Shares of Common Stock," shall mean all shares
of Common Stock of the Corporation issued by the Corporation after March 31,
1993 except Common Stock which may be issued pursuant to (a) the conversion of
the Preferred Stock and (b) the exercise by employees or directors of or
consultants to the Corporation or any of its subsidiaries of options outstanding
on the date hereof or granted after the date hereof pursuant to any stock option
plan presently in effect or which may here after be adopted by the Corporation.
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1.2 "Base Series A Conversion Rate," means the sum of (a)
6.154 shares of Common Stock for each share of Series A Preferred Stock, plus
(b) on the first business day of each January, April, July and October in each
year beginning July 1, 1993, 0.75% of the Base Series A Conversion Rate at such
time for each share of Series A Preferred Stock, as such rate may be adjusted
from time to time in accordance with Section 5 hereof. "Base Series B Conversion
Rate" shall mean a rate equal to 10 shares of Common Stock for each share of
Series B Preferred Stock, as such rate may be adjusted from time to time in
accordance with Section 5 hereof.
1.3 "Common Stock" shall include any stock into which the
Company 's Common Stock may hereinafter be changed.
1.4 "Convertible Securities" shall mean evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable, with or without payment of additional consideration in cash or
property, for Additional Shares of Common Stock, either immediately or upon the
arrival of a specified date or the happening of a specified event.
1.5 "Current Market Price" per share of Common Stock at any
date herein specified shall mean the average of the daily market prices for 30
consecutive Trading Days commencing 45 days before such date, except that for
purposes of this Section 1.5, the "Current Market Price" per share of Common
Stock shall mean the market price on the Trading Day therein specified; provided
that the Current Market Price of any securities sold in an underwritten pubic
offering shall be the price at which such securities are offered to the public
therein. The market price for each such Trading Day shall be the last reported
sales price on the principal exchange on which the Common Stock is listed, or
the NASDAQ National Market System or over-the-counter market.
1.6 "Junior Stock" shall mean the Common Stock or any other
class or series of capital stock of the Corporation which at the time of
issuance is not declared to be senior to or on a parity with the Preferred Stock
as to dividends or rights upon liquidation.
1.7 "Liquidation Preference" shall mean (a) with respect to
the Series A Preferred Stock $4.00 per share; provided, that on the first
business day of each January, April, July and October in each year beginning
July 1, 1993, the Liquidation Preference for the Series A Preferred Stock shall
automatically be increased by 0.75% of the amount of the Liquidation Preference
for the Series A Preferred Stock at such time, for each share; and (b) with
respect to the Series B Preferred Stock, zero dollars ($0.00).
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1.8 "Person" shall mean any individual, corporation,
association, company, business trust, partnership, joint venture, joint-stock
company, trust, unincorporated organization or association or government or any
agency or political subdivision thereof.
1.9 "Trading Day" shall mean any day on which trading takes
place (a) in the over-the-counter-market and prices reflecting such trading are
published by the National Association of Securities Dealers Automated Quotation
System or (b) if the Common Stock is then listed or admitted to trading on a
national securities exchange, on the principal national securities exchange on
which the Common Stock is then listed or admitted to trading.
Section 2. DIVIDENDS. The Corporation shall not declare or make any
dividend or distribution with respect to Common Stock, unless each holder of
Series B Preferred Stock concurrently receives dividends or distributions
equal in amount and in the same kind of property (whether cash, securities or
other property) as such holder would be entitled to receive if all of the
outstanding Series B Preferred Stock were converted into Common Stock as of
the record date of such dividend or distribution with respect to Common
Stock. Except as provided in this Section 2, the Preferred Stock shall not be
entitled to receive any dividends.
Section 3. LIQUIDATION OR DISSOLUTION. Subject to the prior rights
of the Corporation's creditors and holders of securities senior to the
Preferred Stock in respect of distributions upon liquidation, dissolution or
winding-up of the Corporation, in the event of the voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, the holders of
Preferred Stock shall be entitled to receive the Liquidation Preference per
share, together with accrued and unpaid dividends payable thereon to the d
ate fixed for payment of such distribution, if any, before any distribution
is made to holders of any Junior Stock. If, upon any such liquidation,
dissolution or winding-up of the Corporation, the assets distributable among
the holders of Preferred Stock (and any series of preferred stock ranking in
parity with the Preferred Stock in respect of distributions upon liquidation,
dissolution or winding-up of the Corporation) shall be insufficient to permit
the payment in full to such holders of the preferential amount payable to
such holders determined as aforesaid, then the holders of Preferred Stock
will share ratably in any distribution of the Corporation's assets in
proportion to the respective preferential amounts that would have been
payable if such assets were sufficient to permit payment in full of all such
amounts. After payment of the full amount of the Liquidation Preference for
the Series A Preferred Stock, the remaining assets of the Corporation shall
be distributed to the holders of the Series B Preferred Stock
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and the Common Stock on a basis which assumes that each outstanding share of
Series B Preferred Stock has been converted to 10 shares of Common Stock.
Under this Section 3, a distribution of assets in any dissolution,
winding-up, liquidation or reorganization shall not include (a) any
consolidation or merger of the Corporation with or into any other
corporation, (b) any dissolution, liquidation, winding-up or reorganization
of the Corporation immediately followed by reincorporation of a successor
corporation or (c) a sale or other disposition of all or substantially all of
the Corporation's assets in consideration for the issuance of equity
securities of another corporation, provided that the consolidation, merger,
dissolution, liquidation, winding-up, reorganization, sale or other
disposition does not amend, alter, or change the preferences or rights of the
Preferred Stock or the qualifications, limitations or restrictions thereof in
a manner that adversely affects the Preferred Stock.
Section 4. No Voting Rights. The holders of Preferred Stock shall
have no right to vote with respect to such stock on any matter which the
stockholders of the Corporation have the right to vote.
Section 5. Conversion Rights.
5.1 Conversion of Preferred Stock.
5.1.1 The Preferred Stock shall be convertible at
the option of the holders thereof (at no expense to such holders) into fully
paid and non-assessable Common Stock at the times set forth in subsection
5.1.5, at the rate (i) in the case of Series A Preferred Stock, the Base
Series A Conversion Rate, and (ii ) in the case of Series B Preferred Stock,
the Base Series B Conversion Rate; or at the rate which results from the
making of any adjustment specified in Section 5.2 hereof. (As used herein,
the 'Conversion Rate" shall mean (a) with respect to the Series A Preferred
Stock, the Base Series A Conversion Rate; and (b) with respect to the Series
B Preferred Stock, the Base Series B Conversion Rate, in each case as
adjusted from time to time in accordance with this Section 5.
5.1.2 The holder of any shares of Preferred Stock
may exercise the conversion right as to any part thereof by delivering to the
Corporation during regular business hours, at the office of any transfer
agent of the Corporation for the Preferred Stock or at such other place as
may be designated by the Corporation, the certificate or certificates for the
shares to be converted, duly endorsed or assigned in blank or to the
Corporation (if required by it), accompanied by written notice stating that
the holder elects to convert such shares and, subject to applicable
securities laws, stating the name or names (with address) in which the
certificate or certificates for the share of
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Common Stock are to be issued. Conversion shall be deemed to have been
effected on the date when such delivery is made and such date is referred to
herein as the "Conversion Date." As promptly as practicable there after, the
Corporation shall issue and deliver to or upon the written order of such
holder, at such office or other place designated by the Corporation, a
certificate or certificates for the number of full shares of Common Stock to
which such holder is entitled and a check or cash in respect to any
fractional interest in a share of Common Stock as provided in subsection
5.1.3 hereof. The person in whose name the certificate or certificates for
Common Stock are to be issued shall be deemed to have become a stockholder of
record on the applicable Conversion Date unless the transfer books of the
Corporation are closed on that date, in which event he shall be deemed to
have become a stockholder of record on the next succeeding date on which the
transfer books are open, but the Conversion Rate shall be that in effect on
the Conversion Date. Upon conversion of only a portion of the number of
shares covered by a certificate representing shares of Preferred Stock
surrendered for conversion, the Corporation shall issue and deliver to or
upon the written order of the holder of the certificate so surrendered for
conversion, at the expense of the Corporation, a new certificate covering the
number of shares of Preferred Stock representing the unconverted portion of
the certificate so surrendered, which new certificate shall entitle in all
respects the bolder thereof to the rights of Preferred Stock represented
thereby to the same extent as if the certificate theretofore covering such
unconverted shares had not been surrendered for conversion.
5.1.3 No fractional shares of Common Stock or
scrip shall be issued upon conversion of shares of Preferred Stock. If more
than one share of Preferred Stock shall be surrendered for conversion at any
one time by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of Preferred Stock so surrendered. Instead of any
fractional shares of Common Stock which would otherwise be issuable upon
conversion of any shares of Preferred Stock, the Corporation shall pay a cash
adjustment in respect of such fractional interest in an amount determined on
the basis of the then Current Market Price per share of Common Stock.
Fractional interests shall not be entitled to dividends, and the holders
thereof shall not be entitled to any rights as stockholders of the
Corporation in respect of such fractional interests.
5.1.4 All dividends accrued and unpaid on
Preferred Stock to and including the date of conversion, whether or not
declared by the Board of Directors, shall constitute a debt of the
Corporation payable without interest to the converting holders and shall be
paid by the Corporation on the Conversion Date, in its option, either in cash
or by the issuance of Common
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Stock at the then Current Market Price per share. in case any shares of
Preferred Stock are redeemed, such right of conversion shall cease and
terminate, as to the shares to be redeemed, as of the close of business on
the business day preceding the Redemption Date (as defined herein) unless
default shall be made in the payment of the redemption price for the shares
to be so redeemed.
5.1.5 The shares of Series B Preferred Stock shall
be convertible pursuant to the provisions of this Section 5 at any time after
their issuance, at the option of the holders thereof. The shares of Series
A-1 Preferred Stock shall be convertible pursuant to the provisions of this
Section 5 at the option of the holders thereof, at any time after the earlier
of (i) March 31, 1999 and (ii) the date that is one year after the payment in
full by the Company of its 8.125% Secured Notes due March 31, 1998 (the "New
Notes"). The shares of Series A-2 Preferred Stock shall be convertible
pursuant to the provisions of this Section 5 at the option of the holders
thereof, at any time after the earlier of (i) March 31, 2000 and (ii) the
date that is two year after the payment in full by the Company of the New
Notes.
5.2 ADJUSTMENTS. The conversion Rate shall be subject to
adjustment from time to time as set forth in this Section 5.2.
5.2.1 STOCK DIVIDENDS, SUBDIVISIONS AND
COMBINATIONS. In case at any time, or from time to time, the
Corporation shall:
5.2.1(a) take a record of the
holders of its Common Stock for the purpose of entitling them to
receive a dividend payable in, or other distribution of, Common Stock;
5.2.1(b) subdivide its outstanding shares
of Common Stock into a larger number of shares of Common Stock;
5.2.1(c) combine its outstanding shares
of Common Stock into a smaller number of shares of Common Stock; or
5.2.1(d) issue by reclassification or
recapitalization of its Common Stock any other class or series of
shares of the Corporation;
then the Conversion Rate in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the holder of any
Preferred Stock surrendered for conversion after such time shall be entitled
to
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receive the number and kind of shares which he would have owned or have been
entitled to receive had such Preferred Stock been converted immediately prior
to such time. Such adjustment shall be made whenever any event listed above
shall occur.
5.2.2 ISSUANCE OF ADDITIONAL SHARES OF COMMON
STOCK. In case at any time, or from time to time, the Corporation shall
(except as hereinafter provided) issue or sell any Additional Shares of
Common Stock for a consideration per share less than the Current Market Price
per share of Common Stock, then the Conversion Rate with respect to the
Series A Preferred Stock only (the "Series A Conversion Rate") shall, on the
date specified below for determining the Current Market Price, subject to the
provisions of subsection 5.2.5 hereof, be adjusted to that number determined
by multiplying the Series A Conversion Rate immediately prior to such
adjustment by a fraction (a) the numerator of which shall be the number of
shares of Common Stock otustanding immediately prior to the issuance of such
Additional Shares of Common Stock plus the number of such Additional Shares
of Common Stock so issued (including shares deemed to have been issued
pursuant to subsections 5.2.3 or 5.2.4 hereof), and (b) the denominator of
which shall be the number of shares of Common Stock outstanding immediately
prior to the issuance of such Additional Shares of Common Stock (including
shares deemed to have been issued pursuant to subsections 5.2.3 or 5.2.4
hereof) plus the number of shares of Common Stock which the aggregate
consideration for the total number of such Additional Shares of Common Stock
so issued would purchase at the Current Market Price. For the purposes of
this subsection 5.2.2, the date as of which the Current Market Price per
share of Common Stock shall be computed shall be the earlier of (i) the date
on which the Corporation shall enter into a firm contract for the issuance or
sale of such Additional Shares of Common Stock or (ii) the date of actual
issuance of such Additional Shares of Common Stock. The provisions of this
subsection 5.2.2 shall not apply to any issuance of Additional Shares of
Common Stock for which an adjustment is provided under subsection 5.2.1
hereof. No adjustment of the Series A Conversion Rate shall be made under
this subsection 5.2.2 upon the issuance of any Additional Shares of Common
Stock which are issued pursuant to the exercise of any warrant or other
subscription or purchase rights or pursuant to the exercise of any conversion
or exchange rights in any Convertible Securities, if any such adjustment
shall previously have been made upon the issuance of such warrants or other
rights or upon the issuance of such Convertible Securities (or upon the
issuance of any warrant or other rights therefor) pursuant to subsections
5.2.3 or 5.2.4 hereof.
5.2.3 ISSUANCE OF WARRANTS OR OTHER RIGHTS. In
case at any time, or from time to time, the Corporation shall take a record
of the holders of
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its Common Stock for the purpose of entitling them to receive a distribution
of, or shall otherwise issue, any warrants or other rights to subscribe for
or purchase either any Additional Shares of Common Stock or any Convertible
Securities and the consideration per share for which Additional Shares of
Common Stock may at any time thereafter be issuable pursuant to such warrants
or other rights or pursuant to the terms of such Convertible Securities shall
be less than the Current Market Price per share of Common Stock, then the
Series A Conversion Rate immediately thereafter shall, subject to the
provisions of subsection 5.2.5 hereof, be adjusted as provided in subsection
5.2.2 hereof on the basis that (a) the maximum number of Additional Shares of
Common Stock issuable pursuant to all such warrants or other rights or
necessary to affect the conversion or exchange of all such Convertible
Securities shall be deemed to have been issued as of the date for the
determination of the Current Market Price per share of Common Stock as
hereinafter provided, and (b) the aggregate consideration for such maximum
number of Additional Shares of Common Stock shall be deemed to be the minimum
consideration received and receivable by the Corporation for the issuance of
such Additional Shares of Common Stock pursuant to such warrants or other
rights or pursuant to the terms of such Convertible Securities. For the
purposes of this subsection 5.2.3, the date as of which the Current Market
Price per share of Common Stock shall be computed shall be the earliest of
(i) the date on which the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive any such
warrants or other rights, (ii) the date on which the Corporation shall enter
into a firm contract for the issuance of such warrants or other rights or
(iii) the date of actual issuance of such warrants or other rights.
5.2.4 ISSUANCE OF-CONVERTIBLE SECURITIES. In
case at any time, or from time to time, the Corporation shall take a record
of the holders of its Common Stock for t he purpose of entitling them to
receive a distribution of, or shall otherwise issue, any Convertible
Securities and the consideration per share for which Additional Shares of
Common Stock may at any time thereafter be issuable pursuant to the terms of
such Convertible Securities shall be less than the Current Market Price per
share of Common Stock, then the Series A Conversion Rate shall, subject to
the provisions of subsection 5 .2.5 hereof, be adjusted as provided in
subsection 5.2.2 hereof on the basis that (a) the maximum number of
Additional Shares of Common Stock necessary to effect the conversion or
exchange of all such Convertible Securities shall be deemed to have been
issued as of the date for the determination of the Current Market Price per
share of Common Stock as hereinafter provided, and (b) the aggregate
consideration for such maximum number of Additional Shares of Common Stock
shall be deemed to be the minimum consideration received and receivable by
the Corporation for the issuance of such Additional Shares of
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Common Stock pursuant to the terms of such Convertible Securities. For the
purposes of this subsection 5.2.4, the date as of which the Current Market
Price per share of Common Stock shall be computed shall be the earliest of
(i) the date on which the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive any such
Convertible Securities, (ii) the date on which the Corporation shall enter
into a firm contract for the issuance of such Convertible Securities or (iii)
the date of actual issuance of such Convertible Securities. No adjustment of
the Series A Conversion Rate shall be made under this subsection 5.2.4 upon
the issuance of any Convertible Securities which are issued pursuant to the
exercise of any warrants or other subscription or purchase rights therefor,
if any such adjustment shall previously have been made upon the issuance of
such warrants or other rights pursuant to subsection 5.2.3 hereof.
5.2.5 REDUCTION IN AMOUNT OF ADJUSTMENT, If,
at the time an adjustment is required by subsections 5.2.2, 5.2.3 or 5.2.4
hereof (hereinafter in this subsection 5.2.5 called a "Series A Adjustment"),
there has been any previous adjustment or adjustments of the Series A
Conversion Rate under subsections 5.2.3 or 5.2.4 hereof on the basis of the
issuance of warrants or other rights or the issuance of Convertible
Securities, and
5.2.5(a) a portion of such warrants or
rights, or the right of conversion or exchange in respect of a portion of
such other Convertible Securities, as the case may be, shall have expired
without having been exercised; and/or
5.2.5(b) the consideration per share,
for which shares of Common Stock are issuable pursuant to such warrants or
rights or the terms of such other Convertible Securities, shall have been
increased solely by virtue of provisions therein contained for an automatic
increase in such consideration upon the arrival of a specified date or the
happening of a specified event;
then the Series A Conversion Rate after such Adjustment shall be reduced by
the Sam (to the extent not used pursuant to this subsection 5.2.5 to reduce
previous Series A Adjustments) of the amounts of excess, in respect of each
such previous adjustment, of (i) the Series A Conversion Rate immediately
after such previous adjustment over (ii) the Series A Conversion Rate which
would have been applicable after such adjustment on the basis of
(A) treating the Additional Shares of Common
Stock, if any, theretofore actually issued or issuable pursuant to the
previous exercise of such warrants or right 5 or such right of conversion or
exchange as having
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been issued prior to the event requiring such adjustment and for the
consideration actually received and receivable therefor, and
(B) treating any such warrants or rights or any
such other Convertible Securities which then remain outstanding as having
been granted or issued with such grant or issuance being the event requiring
such adjustment and with the consideration per share for which shares of
Common Stock are issuable pursuant thereto being the consideration then in
effect.
If the reduction as provided above exceeds the amount of such Series
A Adjustment, the excess shall be carried over and used to reduce the amount
of any subsequent Series A Adjustment.
5.2.6 OTHER PROVISIONS APPLICABLE TO
ADJUSTMENTS UNDER THIS SECTION. The following provisions shall be applicable
to the making of adjustments of the Conversion Rate hereinbefore provided for
in this Section 5.2:
5.2.6(a) TREASURY STOCK. The sale or
other disposition of any issued shares of Common Stock owned or held by or
for the account of the Corporation shall be deemed an issuance thereof for
purposes of this Section 5.2, but until so issued such shares shall not be
deemed to be outstanding.
5.2.6(b) COMPUTATION OF CONSIDERATION.
To the extent that any Additional Shares of Common Stock or any Convertible
Securities or any warrants or other rights to subscribe for or purchase any
Additional Shares of Common Stock or any Convertible Securities shall be
issued for a cash consideration, the consideration received by the
Corporation therefor shall be deemed to be the amount of the cash received by
the Corporation therefor, or, if such Additional Shares of Common Stock or
Convertible Securities are offered by the Corporation for subscription, the
subscription price, or, if such Additional Shares of Common Stock or
Convertible Securities are sold to underwriters or dealers for public
offering without a subscription offering, the initial public offering price,
in any such case excluding any amounts paid or receivable for accrued
interest or accrued dividends and without deduction of any compensation,
discounts or expenses paid or incurred by the Corporation for and in the
underwriting of, or otherwise in connection with, the issue thereof. To the
extent that such issuance shall be for a consideration other than cash, then,
except as herein otherwise expressly provided, the amount of such
consideration shall be deemed to be the fair value of such consideration at
the time of such issuance as determined by the board of directors of the
Corporation or, if objected to in writing by holders of a
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majority of the outstanding shares of Preferred Stock, a third party mutually
acceptable to the Company and such objecting holders. The consideration for
any Additional Shares of Common Stock issuable pursuant to any warrants or
other rights to subscribe for or purchase the same shall be the consideration
received by the Corporation for issuing such warrants or other rights, plus
the additional consideration payable to the Corporation upon the exercise of
such warrants or other rights. The consideration for any Additional Shares of
Common Stock issuable pursuant to the terms of any Convertible Securities
shall be the consideration received by the Corporation for issuing any
warrants or other rights to subscribe for or purchase such Convertible
Securities, plus the consideration paid or payable to the Corporation in
respect of the subscription for or purchase of such Convertible Securities,
plus the additional consideration, if any, payable to the Corporation upon
the exercise of the right of conversion or exchange in such Convertible
Securities. In case of the issuance at any time of any Additional Shares of
Common Stock or Convertible Securities in payment or satisfaction of any
dividend upon any class of stock other than Common Stock or in payment of any
debt, the Corporation shall be deemed to have received for such Additional
Shares of Common Stock or Convertible Securities a consideration equal to the
amount of such dividend or debt so paid or satisfied.
5.2.6(c) WHEN ADJUSTMENTS ARE TO BE
MADE. The adjustments required by the preceding subsections shall be made
whenever and as often as any specified event requiring an adjustment shall
occur, except that no adjustment of the Conversion Rate that would otherwise
be required shall be made (except in the case of a subdivision or combination
of shares of the Common Stock, as provided for in subsection 5.2.1 hereof)
unless and until such adjustment either by itself or with other adjustments
not previously made and after giving effect to any reduction provided for in
subsection 5.2.5 hereof adds at least 1/50th of a share to the Conversion
Rate immediately prior to the making of such adjustment. Any adjustment
representing a change of less than such minimum amount (except as aforesaid)
shall be carried forward and made as soon as such adjustment, together with
other adjustments required by this Section 5.2 and not previously made, would
result in a minimum adjustment. For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of business on
the date of its occurrence.
5.2.6(d) FRACTIONAL INTERESTS. In
computing adjustments under this Section 5.2, fractional interests in Common
Stock shall be taken into account to the nearest one-thousandth of a share.
5.2.6(e) ANTIDILUTION PROVISIONS. No
adjustment shall be made as a result of any increase in the number of
Additional Shares of
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Common Stock issuable or any decrease in the consideration payable upon any
issuance of Additional Shares of common Stock, pursuant to any provisions
intended solely to avoid dilution contained in any warrants, rights or
Convertible Securities.
5.2.6(f) WHEN ADJUSTMENT NOT REQUIRED.
(i) If the Corporation shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or distribution or
subscription or purchase rights and shall, thereafter and before the
distribution to stockholders thereof, legally abandon its plan to pay or
deliver such dividend, distribution, subscription or purchase rights, then
thereafter no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof shall be
rescinded and annulled.
(ii) If the Corporation declares or
makes any dividend or distribution with respect to Common Stock, and each
holder of Series B Preferred Stock concurrently receives dividends or
distributions equal in amount and in the same kind of property (whether cash,
securities or other property) as such holder would be entitled to receive if
all of the outstanding Series B Preferred Stock were converted into Common
Stock as of the record date of such dividend or distribution with respect to
Common Stock, then thereafter no adjustment shall be required with respect to
such dividend or distribution.
5.2.7 MERGER, CONSOLIDATION OR DISPOSITION OF ASSETS. In
case the Corporation shall merge with or consolidate into another Person, or
shall sell, transfer or otherwise dispose of another Person, or shall sell
transfer or otherwise dispose of all or substantially all its property,
assets or business to another Person and, pursuant to the terms of such
merger, consolidation or disposition of assets, shares of common stock or
other securities, property or assets of the successor or acquiring
corporation or an affiliate thereof or cash are to be received by or
distributed to the holders of Common Stock of the Corporation, then each
holder of Preferred Stock shall have the right thereafter to receive, upon
conversion of such Preferred Stock, the same consideration that such holder
would have been entitled to receive had it converted all of its Preferred
Stock to Common Stock immediately prior to the record date with respect to
such event. The foregoing provisions of this subsection 5.2.7 shall similarly
apply to successive mergers, consolidations or dispositions of assets.
If a purchase, tender or exchange offer is made to and accepted by the
holders of more than 50% of the outstanding shares of Common Stock, the
Corporation shall not effect any consolidation, merger or sale with the Person
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having made such offer or with any affiliate of such Person, unless prior to
the consummation thereof each holder of shares of Preferred Stock shall have
been given a reasonable opportunity to then elect to receive, upon conversion
of the shares of Preferred Stock then held by such holder, either the stock,
securities, cash or assets then issuable with respect to the Common Stock or
the stock, securities, cash or assets, or the equivalent, issued to previous
holders of the Common Stock in accordance with such offer.
5.2.8 OTHER ACTION AFFECTING COMMON STOCK. If a
state of facts shall occur which, without being specifically controlled by
the provisions of the foregoing Subsections 5.2.1 to 5.2.7, inclusive, would
not fairly protect the conversion rights of the Preferred Stock in accordance
with the essential intent and principles of such provisions, then the Board
of Directors of the Corporation shall in good faith make an adjustment in the
application of such provisions, in accordance with such essential intent and
principles, so as to protect such conversion rights.
5.2.9 NECESSARY CORPORATE ACTION. Before taking
any action which would result in an adjustment in the Conversion Rate, the
Corporation shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.
5.2.10 TAXES UPON CONVERSION. The Corporation
shall pay all documentary, stamp or other transaction taxes attributable to
the issuance or delivery of shares of Common Stock upon conversion of any
shares of Preferred Stock.
5.3 RESERVATION OF COMMON STOCK. The Corporation shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock solely for the purpose of effecting the conversion or exchange of
shares of Preferred Stock, the full number of whole shares of Common Stock then
deliverable upon the conversion or exchange of all shares of Preferred Stock at
the time outstanding. All shares of Common Stock which shall be so issuable
shall, when issued upon conversion of all or any portion of the Preferred Stock,
be duly and validly issued and fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issuance thereof. Upon conversion
of Preferred Stock, the shares of Preferred Stock so converted shall have the
status of authorized and unissued Preferred Stock, and the number of shares of
preferred stock which the Corporation shall have authority to issue shall be
decreased by any such conversion.
5.4 NOTICE PROVISIONS.
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5.4.1 NOTICE OF ADJUSTMENTS. Whenever the
Conversion Rate or the Series A Conversion Rate shall be adjusted pursuant to
Section 5.2 hereof, the Corporation shall forthwith obtain a certificate
signed by the chief financial officer of the Corporation, setting forth, in
reasonable detail, the event requiring the adjustment and the method by which
such adjustment was calculated (including a description of the basis on which
the Corporation's board of directors determined the fair value of any
evidences of indebtedness, shares of stock, other securities or property or
assets or warrants or other subscription or purchase rights referred to in
Sections 5.2.2 or 5.2.7 hereof) and specifying the Conversion Rate or the
Series A Conversion Rate and (if such adjustment was made pursuant to
subsections 5.2.7 or 5.2.8 hereof) describing the amount and kind of common
stock, securities, property or assets or cash which may be received upon
conversion of the Preferred Stock, after giving effect to such adjustment.
The Corporation shall promptly cause a signed copy of such certificate to be
delivered to each holder of Preferred Stock.
5.4.2 NOTICE OF CERTAIN CORPORATE ACTION. In case the
Corporation shall propose (a) to pay any dividend payable in stock of any class
to the holders of its Common Stock or to make any other distribution to the
holders of its Common Stock, (b) to offer to the holders of its Common Stock
rights to subscribe for or to purchase any Convertible Securities or Additional
Shares of Common Stock or shares of stock of any class or any other securities,
rights or options, (c) to effect any reclassification of its Common Stock (other
than a reclassification involving only the subdivision or combination of
outstanding shares of Common Stock), (d) to effect any capital reorganization,
(e) to effect any consolidation, merger or sale, transfer or other distribution
of all or substantially all its property, assets or business, or (f) to effect
the liquidation, dissolution or winding-up of the Corporation, then in each such
case, the Corporation shall give to each holder of Preferred Stock a notice of
such proposed action, which shall specify the date on which a record is to be
taken for the purposes of such stock dividend, distribution or rights, or the
date on which such reclassification, reorganization, consolidation, merger,
sale, transfer, disposition, liquidation, dissolution or winding-up is to take
place and the date of participation therein by the holders of Common Stock, if
any such date is to be fixed, and shall also set forth such facts with respect
thereto as shall be reasonably necessary to indicate the affect of such action
on the Common Stock, the Conversion Rate and the Series A Conversion Rate after
giving effect to any adjustment which will be required as a result of such
action. Such notice shall be so given in the case of any action covered by (a)
or (b) above at least 20 days prior to the record date for determining holders
of the Common Stock for purposes of such action and, in the case of any other
such action, at least 20 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of Common Stock,
whichever
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shall be the earlier.
Section 6. OPTIONAL REDEMPTION.
6.1 REDEMPTION RIGHT. The Corporation shall have the right
to redeem the outstanding Series A Preferred Stock (but not the Series B
Preferred Stock), in whole or in part, at any time and from time to time, by
paying to the holders thereof in cash a redemption price per share equal to
the Liquidation Preference.
6 .2 NOTICE OF REDEMPTION. If any shares of Series A
Preferred Stock are to be redeemed pursuant to Section 6.1 hereof, notice
thereof (the "Redemption Notice) shall be sent at least 30 and not more than
60 days prior to the date fixed for redemption (the "Redemption Date") to
each holder of record whose Series A Preferred Stock is to be redeemed, by
first class mail, postage pre-paid, to such holder at such holder's address
as the same shall appear on the books of the Corporation. The Redemption
Notice shall state (a) the Redemption Date, (b) the redemption price, (c) the
then current Conversion Rate, (d) that the shares called for redemption may
be converted at any time before the close of business on the business day
preceding the Redemption Date, (e) that holders who want to convert shares of
Series A Preferred Stock must satisfy the requirements of Section 5.1.2
hereof, (f) the place at which certificates for shares of Series A Preferred
Stock called for redemption must be surrendered to collect the redemption
price, and (g) the Section of this Certificate of Designation, Voting Powers,
Preferences and Rights pursuant to which they are to be redeemed.
6.3 PARTIAL REDEMPTION. If less than all of the outstanding
shares of Preferred stock are to be redeemed, the shares to be redeemed shall
be determined pro rata or by lot in a manner fixed by the Board of Directors.
On or after the Redemption Date, each holder of shares of Preferred Stock
that were called for redemption shall present and surrender the certificate
or certificates for such shares to the Corporation at the place designated in
the Redemption Notice and thereupon the redemption price of such shares shall
be paid to, or to the order of, the person whose name appears on such
certificate or certificates as the owner thereof. From and after the
Redemption Date, unless the Corporation shall default in the payment of
redemption price pursuant to the Redemption Notice, all dividends on the
Preferred Stock shall cease to accrue and all rights of the holders thereof
as stockholders of the Corporation, except the right to receive the
redemption price (but without interest thereon), shall cease and terminate.
Any and all shares of Preferred Stock redeemed, purchased or otherwise
acquired by the Corporation thereafter shall be canceled and returned to the
status of authorized and
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unissued Preferred Stock.
6.4 TRANSFER BOOKS. To facilitate the redemption of any
shares of Preferred Stock, the Board of Directors is authorized to cause the
transfer books for such Preferred Stock to be closed as to the shares to be
redeemed, unless the rules of any national securities exchange or automated
quotation system on which the Preferred Stock may be listed or quoted
prohibit the closing of such transfer books.
Section 7. NO PREEMPTIVE RIGHTS. No holder of Preferred Stock shall
have any preemptive or preferential right of subscription to any shares of
stock of the Corporation, or to options, warrants or other interests therein
or therefor, or to any obligations convertible into stock of the Corporation,
issued or sold, or any right of subscription to any thereof other than such,
if any, as the Board of Directors, in its discretion, from time to time may
determine and at such price or prices as the Board of Directors from time to
time may fix pursuant to the authority conferred by the Corporation's
Certificate of Incorporation.
Section 8. CERTAIN RESTRICTIONS. So long as any Preferred Stock is
outstanding, the Corporation shall not, without the consent of holders of a
majority of the outstanding shares of Preferred Stock, (i) purchase, redeem
or otherwise acquire any shares of any class of the Corporation's outstanding
capital stock, other than an amount of stock at any time permitted to be
purchased by the Company under Rule l0b-18 under the Securities Exchange Act
of 1934, (ii) issue any class or series of any class of capital stock which
ranks prior to or PARI PASSU with the Preferred Stock with respect to
dividend rights or rights on liquidation, winding-up or dissolution of the
Corporation or (iii) amend, alter or change the preferences or rights of any
series or class of capital stock of the Corporation (including the Preferred
Stock) or the qualifications, limitations or restrictions thereof if such
amendment, alteration or change adversely affects the Preferred Stock.
IT WITNESS WHEREOF, Perceptronics, Inc. has caused its seal and
hereunto affixed and this certificate to be signed by its president and its
corporate seal attested to by its secretary as of this 27th day of April, 1993.
PERCEPTRONICS, INC.
By: /s/ Gershon Weltman
------------------------
Gershon Weltman, Ph.D.
Chief Executive Officer
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(seal)
ATTEST:
/s/ Sarah A.S. Goldberg
- -------------------------
4-27-93
- -------------, Secretary
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CERTIFICATE OF RESTORATION AND REVIVAL OF
CERTIFICATE OF INCORPORATION
OF
PERCEPTRONICS, INC.
Perceptronics, Inc. (hereinafter called the "corporation"), a
corporation organized under the laws of Delaware, the Certificate of
Incorporation of which was voided for failure to pay franchise taxes, now
desires to procure a restoration, renewal and revival of its Certificate of
Incorporation, and hereby certifies as follows:
1. The name of the corporation is Perceptronics, Inc.
2. The address of the registered office of the corporation in
the State of Delaware and the name of the registered agent at such address
are as follows: National Registered Agents, Inc. 9 East Lockerman Street,
Dover, Delaware 19901, County of Kent.
3. The date of filing the corporation's Original Certificate of
Incorporation in the State of Delaware was on September 9, 1987.
4. The corporation hereby procures a restoration and revival of its
Certificate of Incorporation, which became inoperative by law on March 1,
1997, pursuant to the General Corporation Law of the State of Delaware.
5. The Certificate of Incorporation of the corporation, which
provides for and will continue to provide for, perpetual duration, shall,
upon the filing of this Certificate of Restoration and Revival of Certificate
of Incorporation in the Department of State of the State of Delaware, be
restored and revived and shall become fully operative.
6. This Certificate of Restoration and Revival of Certificate of
Incorporation is filed by authority of the duly elected directors as
prescribed by Section 312 of the General Corporation Law of the State of
Delaware.
Executed on this 29th day of June, 1998.
/s/ Gershon Weltman
---------------------------
Dr. Gershon Weltman
Chief Executive Officer
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Exhibit 4.2
PERCEPTRONICS, INC.
BY-LAWS
ARTICLE I
STOCKHOLDERS
Section 1. ANNUAL MEETING. An annual meeting of the Stockholders,
for the election of directors and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as the Board of Directors shall each year fix, which
date shall be within thirteen months subsequent to the later of the date of
Incorporation or the last annual meeting of stockholders.
Section 2. SPECIAL MEETINGS. Special meetings of stockholders may be
called by the Board of Directors, the Chairman of the Board of Directors or
the President of the Corporation and shall be called by the Secretary of the
Corporation at the request in writing of holders of not less than 10% of the
total voting power of all outstanding securities of the Corporation then
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
Section 3. NOTICE OF MEETINGS. Written notice of the place, date,
and time of all meetings of the stockholders and, in the case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
given, not less than ten nor more than sixty (60) days before the date on
which the meeting is to be held, to a stockholder entitled to vote at such
meeting. except as otherwise provided herein or required by law (meaning,
here and hereinafter, as required from time to time by the Delaware General
Corporation Law or the Certificate of Incorporation of the Corporation).
When a meeting is adjourned to another place, date or time, written
notice need not be given of the adjourned meeting if the place, date and time
thereof are announced at the meeting at which the adjournment is taken;
provided, however, that if the date of any adjourned meeting is more than
thirty (30) days after the date for which the meeting was originally noticed,
or if a new record date is fixed for the adjourned meeting, written notice of
the place, date, and time of the adjourned meeting shall be given in
conformity herewith. At any adjourned meeting, any business may be transacted
which might have been transacted at the original meeting.
Section 4. QUORUM. At any meeting of the Stockholders, the holders
of a majority of all of the shares of the stock entitled to vote at the
meeting, present in person or by proxy, shall constitute a quorum for all
purposes, unless or except to the extent that the presence of a larger number
may be required by law.
If a quorum shall fail to attend any meeting, the chairman of the
meeting or the holders of
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a majority of the shares of stock entitled to vote who are present, in person
or by proxy, may adjourn the meeting to another place, date or time.
If a notice of any adjourned special meeting of stockholders is sent
to all stockholders entitled to vote thereat, stating that it will be held
with those present constituting a quorum, then except as otherwise required
by law, those present at such adjourned meeting shall constitute a quorum,
and all matters shall be determined by a majority of the votes cast at such
meeting.
Section 5. ORGANIZATION. The Chairman of the Board or, in his or her
absence, the Chief Executive Officer of the Corporation or, in his or her
absence, such person as may be chosen by the holders of a majority of the
shares entitled to vote who are present, in person or by proxy, shall call to
order any meeting of the stockholders and act as chairman of the meeting. In
the absence of the Secretary of the Corporation, the secretary of the meeting
shall be such person as the chairman appoints.
Section 6. CONDUCT OF BUSINESS. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him or her in order.
Section 7. ACTION BY CONSENT. Unless otherwise restricted by the
Certificate of Incorporation, any action required to be taken at any annual
or special meeting of stockholders, or any action which may be taken at any
annual or special meeting of stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting
forth the action so taken, shall be signed by the holders of outstanding
securities of the Corporation having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting
at which all securities entitled to vote thereon were present and voted.
Prompt notice of the taking of the Corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have
not consented in writing.
Section 8. PROXIES AND VOTING. At any meeting of the stockholders,
every stockholder entitled to vote may vote in person or by proxy authorized
by an instrument in writing filed in accordance with the procedure
established for the meeting.
Each stockholder shall have one vote for every share of stock
entitled to vote which is registered in his or her name on the record date
for the meeting, except as otherwise provided herein or required by law.
Every stockholder complying with this Section 8 and entitled to vote
at any election of directors may cumulate such stockholder's votes and give
one candidate a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which the stockholder's shares
are normally entitled, or distribute the stockholder's votes on the same
principle among as many candidates as the shareholder thinks fit. No
stockholder shall be entitled to cumulate votes (i.e., cast for any candidate
a number of votes greater than the number of votes which such stockholder
normally is entitled to cast) unless such candidate or
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candidate's names have been placed in nomination prior to the voting and the
stockholder has given notice at the meeting prior to the voting of the
stockholder's intention to cumulate the stockholder's votes. If any one
stockholder has given such notice, all stockholders may cumulate their votes
for candidates in nomination.
All voting, except in the election of directors or where otherwise
required by law, may be by a voice vote; provided, however, that upon demand
therefor by a stockholder entitled to vote or his or her proxy, a stock vote
shall be taken. All elections of directors and every stock vote shall be
taken by ballots, each of which shall state the name of the stockholder or
proxy voting and such other information as may be required under the
procedure established for the meeting. Every vote taken by ballots shall be
counted by an inspector or inspectors appointed by the chairman of the
meeting.
All elections shall be determined by a plurality of the votes cast
and, except as otherwise required by law, all other matters shall be
determined by a majority of the votes cast.
Section 9. STOCK LIST. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the
number of shares registered in his or her name, shall be open to the
examination of any such stockholder, for any purpose germane to the meeting,
during ordinary business hours for a period of at least ten (10) days prior
to the meeting, either at a place within the city where the meeting is to be
hold, which place shall be specified in the notice of the meeting, or if not
so specified, at the place where the meeting is to be held.
The stock list shall also be kept at the place of the meeting during
the whole time thereof and shall be open to the examination of any such
stockholder who is present. This list shall presumptively determine the
identity of the stockholders entitled to vote at the meeting and the number
of shares held by each of them.
ARTICLE II
BOARD OF DIRECTORS
Section 1. NUMBER AND TERM OF OFFICE. The number of directors of the
Corporation shall not be less than five (5) nor more than nine (9) until
changed by amendment of the Certificate of Incorporation or by a by-law
amending this Section 1 duty adopted by holders of a majority of the
outstanding shares entitled to vote or by the Board of Directors. The exact
number of directors shall be fixed from time to time within the limits
specified in the Certificate of Incorporation or in this Section 1, by a
by-law or amendment thereof duly adopted by the stockholders or by the Board
of Directors. Subject to the foregoing provisions for changing the number of
directors, the number of directors of this Corporation has been fixed at slx
(6).
All directors shall hold office until their respective successors
are duly elected and qualified or until a director's earlier death,
resignation or removal.
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<PAGE>
Section 2. VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Subject to the
rights of the holders of any series of Preferred Stock then outstanding,
newly created directorships resulting from any increase in the authorized
number of directors or any vacancies in the Board of Directors resulting from
death, resignation, retirement, disqualification, removal from office or
other cause may be filled by a majority vote of the directors then in office,
though less than a quorum, or by a sole remaining director, and a director so
chosen shall hold office until such director's successor has been duly
elected and qualified or until such director's earlier death, resignation or
removal. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
Section 3. REMOVAL. Any director or the entire Board of Directors
may be removed, with or without cause, at any time by the affirmative vote of
the holders of not less than a majority of the total voting power of all
outstanding securities of the corporation entitled to vote; provided,
however, if less than the entire board of directors is to be removed, no
director may be removed without cause if the votes cast against his removal
would be sufficient to elect him if then cumulatively voted at an election of
the entire Board of Directors.
Section 4. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at place or places, on such date or dates, and at
such time or times as shall have been established by the Board of Directors
and publicized among all directors. A notice of each regular meeting shall
not be required.
Section 5. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by one-third of the directors then in office (rounded
up to the nearest whole number) or by the chief executive officer and shall
be held at such place, on such date, and at such time as they or he or she
shall fix. Notice of the place, date, and time of each such special meeting
shall be given each director by whom it is not waived by mailing written
notice not less than live (5) days before the meeting or by telegraphing,
telexing or otherwise actually delivering the same not less than twenty- four
(24) hours before the meeting. Unless otherwise indicated in the notice
hereof, any and all business may be transacted at a special meeting.
Section 6. QUORUM. At any meeting of the Board of Directors, a
majority of the total number of authorized directors shall constitute a
quorum for all purposes. If a quorum shall fail to attend any meeting, a
majority of those present may adjourn the meeting to another place, date, or
time, without further notice or waiver thereof.
Section 7. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE.
Members of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person at such meeting.
Section 8. CONDUCT OF BUSINESS; ACTION BY CONSENT. At any meeting of
the Board of Directors, business shall be transacted in such order and manner as
the Board may from time to
4
<PAGE>
time determine, and all matters shall be determined by the vote of a majority
of the directors present, except as otherwise provided herein or required by
law. Action may be taken by the Board of Directors without a meeting if all
members thereof consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board of Directors.
Section 9. POWERS. The Board of Directors may, except as otherwise
required by law, exercise all such powers and do all such acts and things as
may be exercised or done by the Corporation, including, without limiting the
generality of the foregoing, the unqualified power:
(1) To declare dividends from time to time in accordance with law;
(2) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such
form as it may determine, of written obligations of every kind, negotiable or
non-negotiable, secured or unsecured, and to do all things necessary in
connection therewith;
(4) To remove any officer of the Corporation with or without
cause, and from time to time devolve the powers and duties of any officer
upon any other person for the time being;
(5) To confer upon any officer of the Corporation the power to
appoint, remove and suspend subordinate officers, employees and agents;
(6) To adopt from time to time such stock, option, stock
purchase, bonus or other compensation plans for directors, officers,
employees and agents of the Corporation and its subsidiaries as it may
determine;
(7) To adopt from time to time such insurance, retirement, and
other benefit plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine; and
(8) To adopt from time to time regulations, not inconsistent
with these by-laws, for the management of the Corporation's business and
affairs.
Section 10. COMPENSATION OF DIRECTORS. Directors, as such, may receive,
pursuant to resolution of the Board of Directors, fixed fees and other
compensation for their services as directors, including, without limitation,
their services as members of committees of the Board of Directors.
Section 11. COMMITTEES OF THE BOARD OF DIRECTORS. The Board of
Directors may from time to time designate committees of the Board, with such
lawfully delegable powers and duties as it thereby confers, to serve at the
pleasure of the Board and shall, for those committees and any others provided
for herein, elect a director or directors to serve as the member or members,
5
<PAGE>
designating, if it desires, other directors as alternate members who may
replace any absent or disqualified member at any meeting of the committee.
Any committee so designated may exercise the power and authority of the Board
of Directors to declare a dividend, to authorize the issuance of stock or to
adopt a certificate of ownership and merger pursuant to Section 253 of the
Delaware General Corporation Law if the resolution which designates the
committee or a supplemental resolution of the Board of Directors shall so
provide. In the absence or disqualification of any member of any committee
and any alternate member in his place, the member or members of the committee
present at the meeting and not disqualified from voting, whether or not he or
she or they constitute a quorum, may by unanimous vote appoint another member
of the Board of Directors to act at the meeting in the place of the absent or
disqualified member.
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be
made for notice to members of all meetings; one-third of the authorized
members shall constitute a quorum unless the committee shall consist of one
or two members, in which event one member shall constitute a quorum; and all
matters shall be determined by a majority vote of the members present. Action
may be taken by any committee without a meeting if all members thereof
consent thereto in writing, and the writing or writings are filed with the
minutes of the proceedings of such committee.
ARTICLE III
OFFICERS
Section 1. GENERALLY. The officers of the Corporation shall consist
of a Chairman of the Board and/or a Chief Executive Officer, President, one
or more vice Presidents, a Secretary, a Chief Financial Officer and such
other offices as may from time to time be appointed by the Board of
Directors. Officers shall be elected by the Board of Directors, which shall
consider that subject at its first meeting after every annual meeting of
stockholders. Each officer shall hold office until his or her successor is
elected and qualified or until his or her earlier resignation or removal. Any
number of offices may be held by the same person.
Section 2. CHAIRMAN OF THE BOARD. The Chairman of the Board shall
preside at all meetings of stockholders and of the Board of Directors. The
Board at its discretion may designate the Chairman of the Board as chief
executive officer of the Corporation, in which event the Chairman of the
Board shall be charged with and shall have the discretion and supervision of
all its business and operations.
Section 3. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of the
Corporation shall have general supervision, direction and control of the
business of the Company and shall, in the absence of the Chairman of the Board,
perform the duties of the Chairman of the Board. The Chief Executive Officer
shall have such other powers and duties as may be prescribed by the Board of
Directors or these by-laws.
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Section 4. PRESIDENT. The President of the Corporation shall
be the chief operation officer of the Corporation and shall have
responsibility for the day-to-day operation and management of the business of
the Corporation. The President shall have such other powers and duties as may
be prescribed by the Board of Directors or these by-laws.
Section 5. VICE PRESIDENT. Each Vice President shall have such
powers and duties as may be delegated to him or her by the Board of
Directors. One Vice President shall be designated by the Board to perform the
duties and exercise the powers of the President in the event of the
President's absence or disability.
Section 6. CHIEF FINANCIAL OFFICER. The Chief Financial Officer
shall have the responsibility for maintaining the financial records of the
Corporation and shall have custody of all monies and securities of the
Corporation. He or she shall make such disbursements of the funds of the
Corporation as are authorized and shall render from time to time an account
of all such transactions and of the financial condition of the Corporation.
The Chief Financial Officer shall also perform such other duties as the Board
of Directors may from time to time prescribe.
Section 7. SECRETARY. The Secretary shall issue all authorized
notices for, and shall keep minutes of, all meetings of the stockholders and
the Board of Directors. He or she shall have charge of the corporate books
and shall perform such other duties as the Board of Directors may from time
to time prescribe.
Section 8. DELEGATION OF AUTHORITY. The Board of Directors may from
time to time delegate the powers or duties of any officer to any other
officers or agents, notwithstanding any provision thereof.
Section 9. REMOVAL. Any officer of the Corporation may be removed at
any time, with or without cause, by the Board of Directors.
Section 10. ACTION WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS.
Unless otherwise directed by the Board of Directors, the Chairman of the
Board or the Chief Executive Officer or any officer of the Corporation
authorized by them shall have the power to vote and otherwise act on behalf
of the Corporation, in person or by proxy, at any meeting of stockholders of
or with respect to any action of stockholders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
ARTICLE IV
STOCK
Section 1. CERTIFICATES OF STOCK. Each stockholder shall be entitled to
a certificate signed by, or in the name of the Corporation by, the Chairman of
the Board , the President or a
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Vice President, and by the Secretary or an Assistant Secretary, or the Chief
Financial Officer, certifying the number of shares owned by him or her. Any
of or all the signatures on the certificate may be facsimile.
Section 2. TRANSFERS OF STOCK. Transfers of stock shall be made only
upon the transfer books of the Corporation kept at an office of the Corporation
or by transfer agents designated to transfer shares of the stock of the
Corporation. Except where a certificate is issued in accordance with Section 4
of Article V of these by-laws, an outstanding certificate for the number of
shares involved shall be surrendered for cancellation before a new certificate
is issued therefor.
Section 3. RECORD DATE. The Board of Directors may fix a record date
which shall not be more than sixty nor fewer than ten days before the date of
any meeting of stockholders, nor more than sixty days prior to the time for
the other action hereinafter described, as of which there shall be determined
the stockholders who are entitled: to notice of or to vote at any meeting of
stockholders or any adjournment thereof; to express consent to corporate
action in writing without a meeting; to receive payment of any dividend or
other distribution or allotment of any rights; or to exercise any rights with
respect to any change, conversion or exchange of stock or with respect to any
other lawful action.
Section 4. LOST, STOLEN OR DESTROYED CERTIFICATES. In the event of
the loss, theft or destruction of any certificate of stock, another may be
issued in its place pursuant to such regulations as the Board of Directors
may establish concerning proof of such loss, theft or destruction and
concerning the giving of a satisfactory bond or bonds of indemnity.
Section 5. REGULATIONS. The issue, transfer, conversion and
registration of certificates of stock shall be governed by such other
regulations as the Board of Directors may establish.
ARTICLE V
NOTICES
Section 1. NOTICES. Except as otherwise specifically provided herein
or required by law, all notices required to be given to any stockholder,
director, officer, employee or agent shall be in writing and may in every
instance be effectively given by hand delivery to the recipient hereof, by
depositing such notice in the mails, postage paid, or by sending such notice
by prepaid telegram, telex, rapifax or mailgram. Any such notice shall be
addressed to such stockholder, director, officer, employee or agent at his or
her last known address as the same appears on the books of the Corporation.
The time when such notice is received by such stockholder, director, officer,
employee or agent, or by any person accepting such notice on behalf of such
person, if hand delivered, or dispatched, if delivered through the mails or
by telegram, telex, rapifax or mailgram, shall be the time of the giving of
the notice.
Section 2. WAIVERS. A written waiver of any notice, signed by a
stockholder, director, officer, employee or agent, whether before or after
the time the event for which notice is
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to be given, shall be deemed equivalent to the notice required to be given to
such stockholder, director, officer, employee or agent. Neither the business
nor the purpose of any meeting need be specified in such a waiver.
ARTICLE V
MISCELLANEOUS
Section 1. FACSIMILE SIGNATURES. In addition to the provisions for
use of facsimile signatures elsewhere specifically authorized in these
by-laws, facsimile signatures elsewhere specifically authorized in these
by-laws, facsimile signatures of any officer or officers of the Corporation
may be used whenever and as authorized by the Board of Directors or a
committee thereof.
Section 2. CORPORATE SEAL. The Board of Directors may provide a
suitable seal, containing the name of the Corporation, which seal shall be in
the charge of the Secretary. If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used
by the Chief Financial Officer or by an Assistant Secretary or Controller.
Section 3. RELIANCE UPON BOOKS, REPORTS AND RECORDS. Each director,
each member of any committee designated by the Board of Directors, and each
officer of the Corporation shall, in the performance of his duties, be fully
protected in relying in good faith upon the books of account or other records
of the Corporation, including reports made to the Corporation by any of its
officers, by an independently certified public accountant, or by an appraiser
selected with reasonable care.
Section 4. FISCAL YEAR. The fiscal year of the Corporation shall be
as fixed by the Board of Directors.
Section 5. TIME PERIODS. In applying any provision of these by-laws
which require that an act be done or not done a specified number of days
prior to an event or that an act be done during a period of a specified
number of days prior to an event, calendar days shall be used, the day of the
doing of the act shall be excluded, and the day of the event shall be
included.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. RIGHT TO INDEMNIFICATION. Each person who was or is made
a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
("proceeding"), by reason of the fact that he or she or a person of whom he
or she is the legal representative, is or was a director, officer or employee
of the Corporation or is or was serving at the request of the Corporation as
a director, officer or employee of another corporation, or of a partnership,
joint venture, trust or other enterprise,
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including service with respect to employee benefit plans, whether the basis
of such proceeding is alleged action in an official capacity as a director,
officer or employee or in any other capacity while serving as a director,
officer or employee, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by Delaware 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 said Law permitted the Corporation to
provide prior to such amendment) against all expenses, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties, amounts paid or to be paid in settlement and amounts expended in
seeking indemnification granted to such person under applicable law, this
by-law or any agreement with the Corporation) reasonably incurred or suffered
by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director, officer or employee
and shall inure to the benefit of his or her heirs, executors and
administrators; provided however, that, except as provided in Section 2 of
this Article VII, the Corporation shall indemnify any such person seeking
indemnity in connection with an action, suit or proceeding (or part thereof)
initiated by such person only if such action, suit or proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation. Such
right shall be a contract right and shall include the right to be paid by the
Corporation expenses incurred in defending any such proceeding in advance of
its final disposition; provided, however, that, if the Delaware General
Corporation Law then so requires, the payment of such expenses incurred by a
director or officer of the Corporation in his or her capacity as a director
or officer (and not in any other capacity in which service was or is rendered
by such person while a director or officer, including, without limitation,
service to an employee benefit plan) in advance of the final disposition of
such proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it should be determined ultimately that such director
or officer is not entitled to be indemnified under this Section or otherwise.
Section 2. RIGHT OF CLAIMANT TO BRING SUIT. If a claim under Section
1 is not paid in full by the Corporation within thirty (30) days after a
written claim has been received by the Corporation, the claimant may at any
time thereafter bring suite against the Corporation to recover the unpaid
amount of the claim and, if such suite is not frivolous or brought in bad
faith, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required
undertaking, if any, has been tendered to this Corporation) that the claimant
has not met the standards of conduct which make it permissible under the
Delaware General Corporation Law for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense shall
be on Corporation. 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 action that
indemnification of the claimant is proper in the circumstances because he or
she 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 claimant has not met such applicable standard conduct,
shall be a defense to the action or create a presumption that the
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claimant has not met the applicable standard of conduct.
Section 3. INSURANCE. The Corporation may maintain insurance to the
extent reasonably available, at its expense, to protect itself and any such
director, officer, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other enterprise against
any such 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.
Section 4. EFFECT OF AMENDMENT. Any amendment, repeal or
modification of any provision of this Article VII by the stockholders and the
directors of the Corporation shall not adversely affect any right or
protection of a director or officer of the Corporation existing at the time
of such amendment, repeal or modification.
ARTICLE VIII
AMENDMENTS
The Board of Directors is expressly empowered to adopt, amend or
repeal By-Laws of the Corporation. Any adoption, amendment or repeal of
By-Laws of the Corporation by the Board of Directors shall require the
approval of a majority of the total number of authorized directors (whether
or not there exist any vacancies in previously authorized directorships at
the time any resolution providing for adoption, amendment or repeal is
presented to the Board). The stockholders shall also have power to adopt,
amend or repeal the By-Laws of the Corporation.
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AMENDMENT TO THE BYLAWS OF PERCEPTRONICS, INC.
(A DELAWARE CORPORATION)
The Bylaws of Perceptronics, Inc., & Delaware corporation, are hereby
amended to read as follows:
1. Section 2 of Article I is amended to read in full as follows:
"SECTION 2, SPECIAL MEETINGS. Special meetings of stockholders
may be called by the Board of Directors, the Chairman of the
Board of Directors or the President of the Corporation and
shall be called by the Secretary of the Corporation at the
request in writing of holders of not less than 10% of the
total voting power of all outstanding securities of the
corporation then entitled to vote. No request by a stockholder
shall be deemed properly made unless the request contains the
information required for a notice of stockholder business in
accordance with Section 11 of this Article I."
2. The following Sections 10 and 11 are hereby added to Article I of
the Bylaws:
"SECTION 10 - NOTIFICATION--OF NOMINATIONS. Subject to the
rights of the holders of any one or more series of Preferred
Stock then outstanding, nominations for the election of
directors may be made by the Board of Directors or by any
stockholder entitled to vote for the election of directors.
Any stockholder entitled to vote for the election of directors
at an annual meeting or a special meeting called for the
purpose of electing directors may nominate persons for
election as directors at such meeting only if written notice
of such stockholder's intent to make such nomination is
delivered to, or mailed, postage prepaid, and received by, the
Secretary of the Corporation at the principal office of the
Corporation not later than (i) in the case of an annual
meeting, ninety days prior to the anniversary date of the
immediately preceding annual meeting; provided, however, that
in the case of the 1988 annual meeting, such notice must be
delivered to
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or received by the Secretary of the Corporation not later than the
close of business on the tenth day following the date on which the
Company first makes public disclosure of the date of the annual
meeting and (ii) in the case of a special meeting, the close of
business on the seventh business day following the date on which
the Corporation first makes public disclosure of the date of the
special meeting. Each notice given by such stockholder shall
set forth: (A) the name and address of the stockholder who
intends to make the nomination and of the person or persons to
be nominated; (B) a representation that the stockholder is a
holder of record of stock of the Corporation entitled to vote
at such meeting (or if the record date for such meeting is
subsequent to the date required for such stockholder notice, a
representation that the stockholder is a holder of record at
the time of such notice and intends to be a holder of record
on the record date for such meeting), setting forth the number
and class of shares so held, and intends to appear in person
or by Proxy at the meeting to nominate the person or persons
specified in the notice; (C) a description of all arrangements
or understandings between the stockholder and each nominee and
any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made
by the stockholder; (D) such other information regarding each
nominee proposed by such stockholder as would have been
required to be included in a proxy statement filed pursuant to
the proxy rules of the Securities and Exchange Commission had
each nominee been nominated, or intended to be nominated, by
the Board of Directors; and (E) the consent of each nominee to
serve as a director of the Corporation if so elected. The
Chairman of the meeting shall, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the provisions of this Section 10; and, if the
Chairman should so determine and declare, the defective
nomination shall he disregarded."
"SECTION 11 - NOTIFICATION OF STOCKHOLDER BUSINESS. All
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business properly brought before any annual or special meeting
of stockholders shall be transacted at such meeting. Business
shall be deemed properly brought only if it is (i) specified
in the notice of meeting (or any supplement thereto) given by
or at the direction of the Board of Directors, (ii) otherwise
properly brought before the meeting by or at the direction of
the Board of Directors, or (iii) brought before the meeting by
a stockholder of record entitled to vote at such meeting if
written notice of such stockholder's intent to bring such
business before such meeting is delivered to, or mailed,
postage prepaid, and received by, the Secretary of the
Corporation at the principal office of the Corporation not
later than (i) in the case of an annual .meeting, ninety days
prior to the anniversary date of the immediately preceding
annual meeting; however, that in the case of the 1988 annual
meeting, such notice must be delivered to or received by the
Secretary of the Corporation not later than the close of
business on the tenth day following the date on which the
Company first makes public disclosure of the date of the
annual meeting and (ii) in the case of a special meeting, the
close of business on the seventh business day following the
date on which the Corporation first makes public disclosure of
the date of the special meeting. Each notice given by such
stockholder shall set forth: (A) a brief description of the
business desired to be brought before the meeting and the
reasons for conducting such business at the meeting; (B) the
name and address of the stockholder who intends to propose
such business; (C) a representation that the stockholder is a
holder of record of stock of the Corporation entitled to vote
at such meeting (or if the record date for such meeting is
subsequent to the date required for such stockholder notice, a
representation that the stockholder is a holder of record at
the time of such notice and intends to be a holder of record
on the record date for such meeting), setting forth the number
and class of shares so held, and intends to appear in person
or by proxy at such meeting to propose such business; and (D)
any material interest of the stockholder in such business. The
Chairman of the meeting shall, if the facts
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warrant, determine and declare to the meeting that business was
not properly brought before the meeting in accordance with the
provisions of this Section 11; and, If the Chairman should so
determine and declare, any such business not properly brought
before the meeting shall not be transacted."
The undersigned, being the duly elected and acting Secretary of
Perceptronics, Inc. hereby certifies that the foregoing amendments to the
Bylaws of Perceptronics, Inc. were duly approved by the Board of Directors at
a meeting held on July 27, 1988.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed her name
as of the 27th day of July, 1988.
/s/ Sarah A. S. Goldberg
-------------------------------
Sarah A. S. Goldberg, Secretary
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AMENDMENT TO THE BYLAWS
OF
PERCEPTRONICS, INC.
(a Delaware corporation)
The undersigned, being the duly elected and acting Secretary of
Perceptronics, Inc., hereby certifies that the following amendment to the
Bylaws of Perceptronics, Inc., a Delaware corporation, was duly adopted by
the Board of Directors at a meeting held on April 23, 1991.
The first paragraph of Section 8, Article I of the Bylaws, as
amended, of Perceptronics, Inc. is hereby amended to read in full as follows:
"Section 8. PROXIES AND VOTING. At any meeting of the
stockholders, any stockholder entitled to vote may vote in person
or by proxy authorized in accordance with Section 212(c) of the
Delaware General Corporation Law and filed with the Corporation in
accordance with the procedure established for the meeting."
IN WITNESS WHEREOF, the undersigned has hereunto subscribed her name
as of the 28 day of June, 1991.
/s/ Sarah A. S. Goldberg
-----------------------------------
Sarah A.S. Goldberg, Secretary
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Exhibit 5.1
BRAND FARRAR & BUXBAUM LLP
COUNSELLORS AT LAW
515 South Flower Street, Suite 3500
Los Angeles, California 90071-2201
March 6, 2000
PERCEPTRONICS, INC.
21010 Erwin Street
Woodland Hills, California 91367
Re: PERCEPTRONICS, INC.
1999 Stock Option Plan
1999 Stock Option Plan for Non-Employee Directors
750,000 Shares of Common Stock, $0.001 Par Value
Ladies and Gentlemen:
We have acted as counsel for Perceptronics, Inc. (the "Registrant") in
connection with the preparation and filing of a Registration Statement on Form
S-8 (the "Registration Statement") for the registration under the Securities Act
of 1933, as amended, of 750,000 shares of the Registrant's Common Stock, $.001
par value (the "Shares"), to be issued upon the exercise of options under the
Perceptronics, Inc. 1999 Stock Option Plan and the Perceptronics, Inc. 1999
Stock Option Plan for Non-Employee Directors (collectively, the "Plans").
In rendering our opinion, we have examined, and are familiar with, and
have relied as to factual matters solely upon, originals or copies certified, or
otherwise identified to our satisfaction, of such documents, corporate records
or other instruments as we have deemed necessary or appropriate for the purposes
of the opinion set forth herein, including without limitation:
1. The Certificate of Incorporation of the Registrant.
2. The Bylaws of the Registrant, as amended to date.
3. Confirmation of the Secretary of the State of Delaware as to the
good standing of the Registrant in that state.
4. A Certificate of the Secretary of the Registrant relating to
resolutions duly adopted by the Board of Directors of the
Registrant regarding the Plans.
5. A Certificate of the Secretary of the Registrant relating to
the approval of the Plans by the stockholders of the Registrant.
<PAGE>
Perceptronics, Inc.
March 3, 2000
Page 2
6. Copies of the Plans.
In addition to the examination outlined above, we have conferred with
various officers of the Registrant and have ascertained or verified, to our
satisfaction, such additional facts as we deemed necessary or appropriate for
the purposes of this opinion.
Based upon and subject to the foregoing, we are of the opinion that the
Shares are duly authorized and, when issued and delivered pursuant to the terms
of the Plans and the terms of any agreement relating to any of the options
granted thereunder, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/ Brand Farrar & Buxbaum LLP
BRAND FARRAR & BUXBAUM LLP
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
Perceptronics, Inc.
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of Perceptronics, Inc. pertaining to the 1999
Stock Option Plan and the 1999 Stock Option Plan for Non-Employee Directors of
our report dated June 3, 1999, with respect to the consolidated financial
statements of Perceptronics, Inc. included in its Annual Report on Form 10-KSB
for the year ended March 31, 1999, filed with the Securities and Exchange
Commission.
/s/ BECKMAN KIRKLAND & WHITNEY
Agoura Hills, California
March 2, 2000
