Exhibit 4(m)
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES G CONVERTIBLE PREFERRED STOCK
OF
NCT GROUP, INC.
NCT GROUP, INC., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation") hereby certifies as
follows:
FIRST: That, pursuant to authority conferred upon the Board of Directors of
the Corporation by the Restated Certificate of Incorporation of the Corporation,
and pursuant to the provisions of Section 151 of Title 8 of the Delaware Code of
1953, as amended, said Board of Directors at a special meeting duly held on
March 10, 2000, adopted a resolution providing for the issuance of a total of
Five Thousand (5,000) shares of Series G Convertible Preferred Stock (the
"Series G Preferred Stock"), and providing for the powers, designations,
preferences and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof, which Certificate of
Designations, Preferences and Rights of Series G Convertible Preferred Stock of
the Corporation (the "Certificate of Designations") was filed with the Secretary
of State of the State of Delaware on March 6, 2000, as corrected on March 10,
2000;
SECOND: Further, that the Board of Directors of the Corporation, by the
written consent of all of its members, filed with the minutes of the Board,
adopted resolutions proposing and declaring advisable the following amendment to
the Certificate of Designations. The resolution setting forth the proposed
amendment is as follows:
RESOLVED, that section 4(b) of the Certificate of Designations be deleted
and amended to read in its entirety as follows:
(b) Conversion Rate. The number of shares of Common Stock issuable upon
conversion of each of the Series G Preferred Shares pursuant to Section 4(a)
shall be determined according to the following formula (the "Conversion Rate"):
Stated Value = Number of Shares
Conversion Price of Common Stock
Notwithstanding anything contained herein to the contrary, the Corporation shall
not be required to issue in excess of Twenty-four Million (24,000,000) shares of
Common Stock upon conversion of Series G Preferred Shares or such lesser amount
as determined on a pro-rata basis based upon the number of Series G Preferred
Shares issued and outstanding (the "Maximum Share Issuance Amounts"). If the sum
computed by such Conversion Rate exceeds 24,000,000 shares of Common Stock, the
Corporation shall, within five (5) business days after receiving the Conversion
Notice for which the conversion would exceed the Maximum Share Issuance Amount,
either (1) redeem, in accordance with Section 5, the Series G Preferred Shares
which may not be converted due to the Maximum Share Issuance Amount, as
described in the preceding sentence, or (2) amend this Certificate of
Designations to provide for a Maximum Shares Issuance Amount which will permit
the conversion of all outstanding Series G Preferred Shares.
For purposes of this Certificate of Designations, the following terms shall have
the following meanings:
(i) "Conversion Price" means, with respect to any date of
determination, the lower of the Fixed Conversion Price (as defined below)
and the Variable Conversion Price (as defined below);
(ii) "Fixed Conversion Price" means $0.71925.
(iii) "Variable Conversion Price" means the amount obtained by
multiplying 0.8 by the average Closing Bid Prices (as defined below) for
the Common Stock for the five consecutive trading days immediately
preceding the relevant date.
(iv) "Closing Bid Price" means, for any security as of any date, the
last closing bid price on the NASDAQ National Market System (the
"NASDAQ-NM") as reported by Bloomberg Financial Markets ("Bloomberg"), or,
if the NASDAQ-NM is not the principal trading market for such security, the
last closing bid price of such security on the principal securities
exchange or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price of such security in the over-the-counter market on the pink
sheets or bulletin board for such security as reported by Bloomberg, or, if
no closing bid price is reported for such security by Bloomberg, the last
closing trade price of such security as reported by Bloomberg. If the
Closing Bid Price cannot be calculated for such security on such date on
any of the foregoing bases, the Closing Bid Price of such security on such
date shall be the fair market value as reasonably determined in good faith
by the Board of Directors of the Company (all as appropriately adjusted for
any stock dividend, stock split or other similar transaction during such
period);
THIRD: That section 4(b) of the Certificate of Designations is hereby
deleted and amended to read in its entirety as follows:
(b) Conversion Rate. The number of shares of Common Stock issuable
upon conversion of each of the Series G Preferred Shares pursuant to
Section 4(a) shall be determined according to the following formula (the
"Conversion Rate"):
Stated Value = Number of Shares
Conversion Price of Common Stock
Notwithstanding anything contained herein to the contrary, the Corporation shall
not be required to issue in excess of Twenty-four Million (24,000,000) shares of
Common Stock upon conversion of Series G Preferred Shares or such lesser amount
as determined on a pro-rata basis based upon the number of Series G Preferred
Shares issued and outstanding (the "Maximum Share Issuance Amounts"). If the sum
computed by such Conversion Rate exceeds 24,000,000 shares of Common Stock, the
Corporation shall, within five (5) business days after receiving the Conversion
Notice for which the conversion would exceed the Maximum Share Issuance Amount,
either (1) redeem, in accordance with Section 5, the Series G Preferred Shares
which may not be converted due to the Maximum Share Issuance Amount, as
described in the preceding sentence, or (2) amend this Certificate of
Designations to provide for a Maximum Shares Issuance Amount which will permit
the conversion of all outstanding Series G Preferred Shares.
For purposes of this Certificate of Designations, the following terms shall have
the following meanings:
(i) "Conversion Price" means, with respect to any date of
determination, the lower of the Fixed Conversion Price (as defined below)
and the Variable Conversion Price (as defined below);
(ii) "Fixed Conversion Price" means $0.71925.
(iii) "Variable Conversion Price" means the amount obtained by
multiplying 0.8 by the average Closing Bid Prices (as defined below) for
the Common Stock for the five consecutive trading days immediately
preceding the relevant date.
(iv) "Closing Bid Price" means, for any security as of any date, the
last closing bid price on the NASDAQ National Market System (the
"NASDAQ-NM") as reported by Bloomberg Financial Markets ("Bloomberg"), or,
if the NASDAQ-NM is not the principal trading market for such security, the
last closing bid price of such security on the principal securities
exchange or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price of such security in the over-the-counter market on the pink
sheets or bulletin board for such security as reported by Bloomberg, or, if
no closing bid price is reported for such security by Bloomberg, the last
closing trade price of such security as reported by Bloomberg. If the
Closing Bid Price cannot be calculated for such security on such date on
any of the foregoing bases, the Closing Bid Price of such security on such
date shall be the fair market value as reasonably determined in good faith
by the Board of Directors of the Company (all as appropriately adjusted for
any stock dividend, stock split or other similar transaction during such
period);
FOURTH: That the amendment effected herein was duly adopted in accordance
with the applicable provisions of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Amendment to the
Certificate of Designations to be signed by Cy E. Hammond, its Senior Vice
President and Chief Financial Officer, as of the 26th day of September, 2000.
NCT GROUP, INC.
By: /s/ Cy E. Hammond
-------------------------------
Senior Vice President and
Chief Financial Officer
ATTEST:
By: /s/ Irene Lebovics
-------------------------------
Irene Lebovics, Secretary
