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Exhibit 3.1
RESTATED ARTICLES OF INCORPORATION
OF
CASCADE MICROTECH, INC.
I, the undersigned, do hereby certify that the following are the
Restated Articles of Incorporation of Cascade Microtech, Inc., an Oregon
corporation, adopted May 29, 1990, and that these Restated Articles of
Incorporation supersede and take the place of the heretofore existing Articles
of Incorporation and Amendments thereto.
ARTICLE I
The name of this corporation shall be Cascade Microtech, Inc., and its
existence shall be perpetual.
ARTICLE II
The purpose and the object of this corporation are to engage in any lawful
activity for which corporations may be organized under the Oregon Business
Corporation Act (Oregon Revised Statutes, Chapter 60), and by such statement the
corporation shall have the power to engage in any lawful activity for which
corporations may be organized under the foregoing Act, including, but not
limited to, designing, manufacturing and selling microwave wafer probing
equipment.
ARTICLE III
3.1 The corporation is authorized to issue two classes of shares, to be
designated Preferred Stock ("Preferred Stock") and Common Stock ("Common
Stock"), respectively. The total number of shares of capital stock that the
corporation shall have authority to issue is sixteen million (16,000,000). The
total number of shares of Preferred Stock that the corporation shall have
authority to issue is four million (4,000,000). The total number of shares of
Common Stock that the corporation shall have authority to issue is twelve
million (12,000,000). The Preferred Stock shall have a par value of $0.01 per
share, and the Common Stock shall have a par value of $0.01 per share.
3.2 The shares of Preferred Stock may be issued from time to time in one
or more series. The Board of Directors of the corporation (the "Board of
Directors") is expressly authorized to provide for the issue of all or any of
the shares of the Preferred Stock in one or more series and to fix the number of
shares and to determine or alter for each such series such
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voting powers, full or limited, or no voting powers, and such designations,
preferences and relative, participating, optional or other rights and such
qualifications, limitations or restrictions thereof as shall be stated and
expressed in the resolution or resolutions adopted by the Board of Directors
providing for the issue of such shares (a "Preferred Stock Designation") and as
may be permitted by the Oregon Business Corporation Act. The Board of Directors
is also expressly authorized to increase or decrease (but not below the number
of such series then outstanding) the number of shares of any series subsequent
to the issue of shares of that series. In case the number of shares of any such
series shall be so decreased, the shares constituting such decrease shall resume
the status that they had prior to the adoption of the resolution originally
fixing the number of shares of such series.
(A) The first series of Preferred Stock shall consist of 1,337,319
shares and is hereby designated "Series A Preferred Stock."
(B) The powers, preferences, rights, restrictions and other
matters relating to the Series A Preferred Stock are as follows:
(1) DIVIDENDS.
(a) The holders of the Series A Preferred Stock shall
be entitled to receive dividends at the rate of $0.251 per share (as adjusted
for any stock dividends, combinations or splits with respect to such shares) per
annum, payable out of funds legally available therefor. Such dividends shall be
payable only when, as and if declared by the Board of Directors and shall be
noncumulative.
No dividends (other than those payable solely in the
form of Common Stock of the corporation) shall be paid on any Common Stock of
the corporation during any fiscal year of the corporation until dividends in the
total amount of $0.251 per share (as adjusted for any stock dividends,
combinations or splits with respect to such shares) on the Series A Preferred
Stock shall have been paid or declared and set apart during that fiscal year.
No right shall accrue to holders of shares of Series A
Preferred Stock by reason of the fact that dividends on such shares are not
declared in any prior year, and no undeclared or unpaid dividend shall bear or
accrue any interest.
(b) In the event the corporation shall declare a
distribution (other than any distribution described in Section (B)(2)) payable
in securities of other persons, evidences of indebtedness issued by the
corporation or other persons, assets (excluding cash dividends) or options or
rights to purchase any such securities or evidences of indebtedness, then, in
each such case, the holders of the Series A Preferred Stock shall be entitled to
a proportionate share of any such distribution as though the holders of the
Series A Preferred Stock were the holders of the number of shares of Common
Stock of the corporation into which their shares of
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Series A Preferred Stock are convertible as of the record date fixed for the
determination of the holders of Common Stock of the corporation entitled to
receive such distribution.
(2) LIQUIDATION AND REORGANIZATION PREFERENCES.
(a) In the event of any liquidation, dissolution or
winding up of the corporation, whether voluntary or involuntary, the holders of
the Series A Preferred Stock shall be entitled to receive, prior and in
preference to any distribution of any of the assets or surplus funds of the
corporation to the holders of the Common Stock by reason of their ownership
thereof, the amount of $2.51 per share (as adjusted for any stock dividends,
combinations or splits with respect to such shares), plus all accrued or
declared but unpaid dividends on such share for each share of Series A Preferred
Stock then held by them. If upon the occurrence of such event, the assets and
funds thus distributed among the holders of the Series A Preferred Stock shall
be insufficient to permit the payment to such holders of the full aforesaid
preferential amount, then the entire assets and funds of the corporation legally
available for distribution shall be distributed ratably among the holders of the
Series A Preferred Stock in proportion to the preferential amount each such
holder is otherwise entitled to receive.
(b) After payment to the holders of Series A Preferred
Stock of the full amount set forth in Section (B)(2)(a) above, the entire
remaining assets and funds of the corporation legally available for
distribution, if any, shall be distributed among the holders of the Common Stock
and the Series A Preferred Stock in proportion to the shares of Common Stock
then held by them and the shares of Common Stock which they then have the right
to acquire upon conversion of the shares of Series A Preferred Stock then held
by them.
(c) For purposes of this Section (B)(2), (i) any
acquisition of the corporation by means of merger or other form of corporate
reorganization in which more than 50% of the outstanding shares of the
corporation are exchanged for securities or other consideration issued or caused
to be issued by the acquiring corporation or its subsidiary (other than a mere
reincorporation transaction), or (ii) a sale of all or substantially all of the
assets of the corporation, shall be treated as a liquidation, dissolution or
winding up of the corporation and shall entitle the holders of Series A
Preferred Stock and Common Stock to receive at the closing, in cash, securities
or other property (valued as provided in Section (B)(2)(d) below) amounts as
follows:
(i) The holders of the Series A Preferred Stock
shall be entitled to receive, prior and in preference to any distribution of any
cash, securities or other property to the holders of the Common Stock by reason
of their ownership thereof, the amount of $2.51 per share (as adjusted for any
stock dividends, combinations or splits with respect to such shares), plus all
accrued or declared but unpaid dividends on such share for each share of Series
A Preferred Stock then held by them. If upon the occurrence of such event, the
cash, securities and other property thus distributed among the holders of the
Series A Preferred Stock shall be insufficient to permit the payment to such
holders of the full aforesaid preferential amount, then
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the entire assets and funds of the corporation legally available for
distribution shall be distributed ratably among the holders of the Series A
Preferred Stock in proportion to the preferential amount each such holder is
otherwise entitled to receive;
(ii) After payment to the holders of Series A
Preferred Stock of the full amount set forth in Section (B)(2)(c)(i) above, the
holders of Common Stock shall be entitled to receive, prior and in preference to
any further distribution of any cash, securities or other property to the
holders of Series A Preferred Stock by reason of their ownership thereof, the
amount of $1.70 per share (as adjusted for any stock dividends, combinations or
splits with respect to such shares), plus all accrued or declared but unpaid
dividends on such share for each share of Common Stock then held by them. If
upon the occurrence of such event, the cash, securities and other property thus
distributed among the holders of Common Stock shall be insufficient to permit
the payment to such holders of the full aforesaid preferential amount, then the
entire assets and funds of the corporation legally available for distribution
shall be distributed ratably among the holders of Common Stock in proportion to
the preferential amount each such holder is otherwise entitled to receive; and
(iii) After payment to the holders of Series A
Preferred Stock and Common Stock of the full amounts set forth above in Sections
(B)(2)(c)(i) and (ii), respectively, any remaining cash, securities or other
property legally available for distribution, if any, shall be distributed among
the holders of the Common Stock and the Series A Preferred Stock in proportion
to the shares of Common Stock then held by them and the shares of Common Stock
which they then have the right to acquire upon conversion of the shares of
Series A Preferred Stock then held by them.
(d) Whenever the distribution provided for in this
Section (B)(2) shall be payable in securities or property other than cash, the
value of such distribution shall be the fair market value of such securities or
other property as determined in good faith by the Board of Directors.
(3) VOTING RIGHTS; DIRECTORS.
(a) Each holder of shares of the Series A Preferred
Stock shall be entitled to a number of votes equal to the number of shares of
Common Stock into which such shares of Series A Preferred Stock could be
converted and shall have voting rights and powers equal to the voting rights and
powers of the Common Stock (except as otherwise expressly provided herein or as
required by law, voting together with the Common Stock as a single class) and
shall be entitled to notice of any shareholders, meeting in accordance with the
Bylaws of the corporation. Fractional votes, however, shall not be permitted,
and any fractional voting rights resulting from the above formula (after
aggregating all shares into which shares of Series A Preferred Stock held by
each holder could be converted) shall be rounded to the nearest whole number
(with one-half being rounded upward). Each holder of Common Stock shall be
entitled to one vote for each share of Common Stock held.
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(b) The authorized number of directors of the Company
shall be fixed by the Board of Directors, but in no event shall be fewer than
four (4) or more than seven (7) members. The holders of a majority of the
outstanding shares of Series A Preferred Stock, voting together as a class,
shall be entitled to designate and elect one member of the Board of Directors,
which member shall be subject to approval by the corporation, which approval
shall not be unreasonably withheld. The holders of Series A Preferred Stock and
the holders of Common Stock, voting together as a class, shall be entitled to
designate and elect the remaining members of the Board of Directors.
(c) In the case of any vacancy in the office of a
director designated and elected by the holders of the Series A Preferred Stock
pursuant to Section (B)(3)(b) hereof, only the holders of Series A Preferred
Stock, by affirmative vote of the holders of a majority of the outstanding
shares thereof, may elect a successor to hold the office for the unexpired term
of the director whose place shall be vacant, which successor shall be subject to
approval by the corporation, which approval shall not be unreasonably withheld.
Any director who shall have been elected by the holders of the Series A
Preferred Stock and approved pursuant to Section (B)(3)(b) hereof or any
director so elected and approved as provided in the preceding sentence hereof
may be removed during the director's term of office, with or without cause, only
by the affirmative vote of the holders of a majority of the outstanding shares
of Series A Preferred Stock.
(4) CONVERSION.
The holders of Series A Preferred Stock shall have conversion
rights as follows (the "Conversion Rights"):
(a) RIGHT TO CONVERT. Each share of Series A Preferred
Stock shall be convertible, at the option of the holder thereof, at any time
after the date of issuance of such share, at the office of the corporation or
any transfer agent for such stock, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing $2.51 by the
Series A Conversion Price applicable to such share, determined as hereinafter
provided, in effect on the date the certificate is surrendered for conversion.
The price at which shares of Common Stock shall be deliverable upon conversion
of shares of the Series A Preferred Stock (the "Series A Conversion Price")
shall initially be $2.51 per share of Common Stock. Such initial Series A
Conversion Price shall be adjusted as hereinafter provided.
(b) AUTOMATIC CONVERSION. Each share of Series A
Preferred Stock shall automatically be converted into shares of Common Stock at
the then-effective Series A Conversion Price upon the earlier of (i) the date
specified by vote or written consent or agreement of holders of at least a
majority of the shares of Series A Preferred Stock then outstanding, (ii) the
date on which a majority of the shares of Series A Preferred Stock originally
issued has been converted into shares of Common Stock or redeemed, or (iii)
immediately upon the closing of the sale of the corporation's Common Stock in a
firm commitment, underwritten
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public offering registered under the Securities Act of 1933, as amended (the
"Securities Act"), other than a registration relating solely to a transaction
under Rule 145 under the Securities Act (or any successor thereto) or to an
employee benefit plan of the corporation, at a public offering price (prior to
underwriters, discounts and expenses) equal to or exceeding $6.00 per share of
Common Stock (as adjusted for any stock dividends, combinations or splits with
respect to such shares) and the aggregate proceeds to the corporation and any
selling shareholders (after deduction for underwriters' discounts and expenses
relating to the issuance, including without limitation fees of the corporation's
counsel) of which exceed $7,500,000.
(c) MECHANICS OF CONVERSION.
(i) Before any holder of Series A Preferred
Stock shall be entitled to convert the same into shares of Common Stock, the
holder shall surrender the certificate or certificates therefor, duly endorsed,
at the office of the corporation or of any transfer agent for such stock and
shall give written notice to the corporation at such office that the holder
elects to convert the same and shall state therein the name or names in which
the holder wishes the certificate or certificates for shares of Common Stock to
be issued. As soon as practicable thereafter, the corporation shall issue and
deliver at such office to such holder of Series A Preferred Stock a certificate
or certificates for the number of shares of Common Stock to which the holder
shall be entitled as aforesaid. Such conversion shall 'be deemed to have been
made immediately prior to the close of business on the date of surrender of the
shares of Series A Preferred Stock to be converted and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock on such date.
(ii) If the conversion is in connection with an
underwritten offering of securities pursuant to the Securities Act, the
conversion, at the option of any holder tendering shares of Series A Preferred
Stock for conversion, may be conditioned upon the closing with the underwriters
of the sale of securities pursuant to such offering, in which event the
person(s) entitled to receive the Common Stock upon conversion of the Series A
Preferred Stock shall not be deemed to have converted such Series A Preferred
Stock until immediately prior to the closing of such sale of securities.
(d) ADJUSTMENTS TO SERIES A CONVERSION PRICE FOR
CERTAIN DILUTING ISSUES.
(i) SPECIAL DEFINITIONS. For purposes of this
Section (B)(4)(d), the following definitions shall apply:
(1) "Options" shall mean rights, options or
warrants to subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities (as defined below).
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(2) "Original Issue Date" shall mean the
date on which a share of Series A Preferred Stock was first issued.
(3) "Convertible Securities" shall mean any
evidences of indebtedness, shares (other than Common Stock and Series A
Preferred Stock) or other securities convertible into or exchangeable for Common
Stock.
(4) "Additional Shares of Common Stock"
shall mean all shares of Common Stock issued (or, pursuant to Section
(B)(4)(d)(iii), deemed to be issued) by the corporation after the original Issue
Date, other than shares of Common Stock issued or issuable:
(A) upon conversion of shares of Series
A Preferred Stock;
(B) pursuant to stock option or stock
purchase plans or agreements on terms approved by the Board of Directors, to
officers, directors or employees of, or consultants to, the corporation:
(1) who have provided services to
the corporation in any such capacity beginning at any time up to but not
including the Original Issue Date, but not exceeding 300,000 shares of Common
Stock (net of any repurchases of such shares or cancellations or expirations of
options); and
(2) who have provided or will
provide services to the Company in any such capacity beginning at any time on or
after the Original Issue Date, but not exceeding 400,000 shares of Common Stock
(net of any repurchases of such shares or cancellations or expirations of
options),
in each case subject to adjustment for any stock dividends, combinations or
splits with respect to such shares;
(C) to officers, directors or
employees of, or consultants to, the corporation
(1) which are repurchased by the
corporation at the original issue price(s) thereof (but excluding any shares the
issuance of which would have resulted in an adjustment of the Series A
Conversion Price but for Section (B)(4)(d)(i)(4)(B)), provided that shares which
are excluded from the definition of "Additional Shares of Common Stock" pursuant
to this Section (B)(4)(d)(i)(4)(C) are reissued by the corporation at not less
than such original issue price(s); or
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(2) which become available for
reissuance as a result of lapse without exercise of stock options;
(D) as a dividend or distribution on
Series A Preferred Stock; or
(E) for which adjustment of the Series A
Conversion Price is made pursuant to Section (B)(4)(e).
(ii) NO ADJUSTMENT OF CONVERSION PRICE. Any provision
herein to the contrary notwithstanding, no adjustment in the Conversion Price
for the Series A Preferred Stock shall be made in respect of the issuance of
Additional Shares of Common Stock unless the consideration per share (determined
pursuant to Section (B)(4)(d)(v) hereof) for an Additional Share of Common Stock
issued or deemed to be issued by the corporation is less than the Series A
Conversion Price in effect on the date of and immediately prior to such issue.
(iii) DEEMED ISSUE OF ADDITIONAL SHARES OF COMMON STOCK.
In the event the corporation at any time or from time to time after the Original
Issue Date shall issue any Options or Convertible Securities (other than
issuances pursuant to clauses (A) through (E) of Section (B)(4)(d)(i)(4)) or
shall fix a record date for the determination of holders of any class of
securities then entitled to receive any such Options or Convertible Securities,
then the maximum number of shares (as set forth in the instrument relating
thereto without regard to any provisions contained therein designed to protect
against dilution) of Common Stock issuable upon the exercise of such Options or,
in the case of Convertible Securities and Options therefor, the conversion or
exchange of such Convertible Securities, shall be deemed to be Additional Shares
of Common Stock issued as of the time of such issue or, in case such a record
date shall have been fixed, as of the close of business on such record date;
provided, however, that in any such case in which Additional Shares of Common
Stock are deemed to be issued:
(1) no further adjustments in the Series A
Conversion Price shall be made upon the subsequent issue of Convertible
Securities or shares of Common Stock upon the exercise of such Options or
conversion or exchange of such Convertible Securities;
(2) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase or
decrease in the consideration payable to the corporation or decrease or increase
in the number of shares of Common Stock issuable, upon the exercise, conversion
or exchange thereof, the Series A Conversion Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto) and
any subsequent adjustments based thereon, shall be recomputed, upon any such
increase or decrease becoming effective, to reflect such increase or decrease
insofar as it affects such Options or the rights of conversion or exchange under
such Convertible
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Securities; provided, however, that no such adjustment of the Series A
Conversion Price shall affect Common Stock previously issued upon conversion of
the Series A Preferred Stock;
(3) upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible Securities which shall
not have been exercised, the Series A Conversion Price computed upon the
original issue thereof (or upon the occurrence of a record date with respect
thereto) and any subsequent adjustments based thereon, shall, upon such
expiration, be recomputed as if:
(A) in the case of Convertible Securities or
Options for Common Stock, the only Additional Shares of Common Stock issued were
the shares of Common Stock if any, actually issued upon the exercise of such
options or the conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually received by the
corporation for the issue of all such Options, whether or not exercised, plus
the consideration actually received by the corporation upon such exercise or for
the issue of all such Convertible Securities which were actually converted or
exchanged, plus the additional consideration, if any, actually received by the
corporation upon such conversion or exchange; and
(B) in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of issue of such options and the
consideration received by the corporation for the Additional Shares of Common
Stock deemed to have been then issued was the consideration actually received by
the corporation for the issue of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the corporation
(determined pursuant to Section (B)(4)(d)) upon the issue of the Convertible
Securities with respect to which such Options were actually exercised;
(4) no readjustment pursuant to clause (2) or (3)
above shall have the effect of increasing the Series A Conversion Price to an
amount which exceeds the lower of (A) the Series A Conversion Price on the
original adjustment date or (B) the Series A Conversion Price that would have
resulted from any issuance of Additional Shares of Common Stock between the
original adjustment date and such readjustment date; and
(5) in the case of any Options which expire by
their terms not more than 30 days after the date of issue thereof, no adjustment
of the Series A Conversion Price shall be made until the expiration or exercise
of all such Options, whereupon such adjustment shall be made in the same manner
provided in clause (3) above.
(iv) ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE OF
ADDITIONAL SHARES OF COMMON STOCK. In the event the corporation, at any time
after the Original Issue Date, shall issue Additional Shares of Common Stock
(including Additional Shares of Common Stock deemed to be issued pursuant to
Section (B)(4)(d)(iii)) without consideration or
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for a consideration per share less than the Series A Conversion Price in effect
on the date of and immediately prior to such issue, then and in such event, the
Series A Conversion Price shall be reduced, concurrently with such issue, to a
price (calculated to the nearest cent) determined by multiplying the Series A
Conversion Price by a fraction,
(1) the numerator of which shall be (A) the number
of shares of Common Stock outstanding immediately prior to such issue plus (B)
the number of shares of Common Stock which the aggregate consideration received
by the corporation for the total number of Additional Shares of Common Stock so
issued would purchase at the Series A Conversion Price in effect immediately
prior to such issuance, and
(2) the denominator of which shall be (A) the
number of shares of Common Stock outstanding immediately prior to such issue
plus (B) the number of such Additional Shares of Common Stock so issued.
For the purpose of the above calculation, the number of shares of Common Stock
outstanding immediately prior to such issue shall be calculated on a fully
diluted basis, as if all shares of Series A Preferred Stock and all Convertible
Securities had been fully converted into shares of Common Stock immediately
prior to such issuance and any outstanding warrants, options or other rights for
the purchase of shares of stock or convertible securities had been fully
exercised immediately prior to such issuance (and the resulting securities fully
converted into shares of Common Stock, if so convertible) as of such date, but
not including in such calculation any additional shares of Common Stock issuable
with respect to shares of Series A Preferred Stock, Convertible Securities or
outstanding options, warrants or other rights for the purchase of shares of
stock or convertible securities solely as a result of the adjustment of the
Series A Conversion Price (or other conversion ratio) resulting from the
issuance of Additional Shares of Common Stock causing such adjustment.
(v) DETERMINATION OF CONSIDERATION. For purposes of
this Section (B)(4)(d), the consideration received by the corporation for the
issue of any Additional Shares of Common Stock shall be computed as follows:
(1) CASH AND PROPERTY. Such consideration:
(A) insofar as it consists of cash, shall be
computed at the aggregate amount of cash received by the corporation excluding
amounts paid or payable for accrued interest or accrued dividends;
(B) insofar as it consists of property other
than cash, shall be computed at the fair value thereof at the time of such
issue, as determined in good faith by the Board; and
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(C) insofar as it consists of cash and
property, shall be computed as provided in clauses (A) and (B) above, prorated
for the amount of each form of such consideration so received.
(2) OPTIONS AND CONVERTIBLE SECURITIES. The
consideration per share received by the corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Section (B)(4)(d)(iii)
relating to Options and Convertible Securities shall be determined by dividing:
(A) the total amount, if any, received or
receivable by the corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein designed to protect against dilution) payable
to the corporation upon the exercise of such options or the conversion or
exchange of such Convertible Securities or, in the case of Options for
Convertible Securities, the exercise of such Options for Convertible Securities
and the conversion or exchange of such Convertible Securities,
by (B) the maximum number of shares of
Common Stock (as set forth in the instruments relating thereto, without regard
to any provision contained therein designed to protect against the dilution)
issuable upon the exercise of such Options or conversion or exchange of such
Convertible Securities.
(e) ADJUSTMENTS TO CONVERSION PRICES FOR STOCK DIVIDENDS AND
FOR COMBINATIONS OR SUBDIVISIONS OF COMMON STOCK. In the event that the
corporation at any time or from time to time after the Original Issue Date shall
declare or pay, without consideration, any dividend on the Common Stock payable
in Common Stock or in any right to acquire Common Stock for no consideration or
shall effect a subdivision of the outstanding shares of Common Stock into a
greater number of shares of Common Stock (by stock split, reclassification or
otherwise than by payment of a dividend in Common Stock or in any right to
acquire Common Stock) or in the event the outstanding shares of Common Stock
shall be combined or consolidated, by reclassification or otherwise, into a
lesser number of shares of Common Stock, then the Series A Conversion Price in
effect immediately prior to such event shall be proportionately decreased or
increased, as appropriate, concurrently with the effectiveness of such event. In
the event that the corporation shall declare or pay, without consideration, any
dividend on the Common Stock payable in any right to acquire Common Stock for no
consideration, then the corporation shall be deemed to have made a dividend
payable in Common Stock in an amount of shares equal to the maximum number of
shares issuable upon exercise of such rights to acquire Common Stock.
(f) ADJUSTMENTS FOR RECLASSIFICATIONS AND REORGANIZATIONS.
If the Common Stock issuable upon conversion of the Series A Preferred Stock
shall be changed into the same or a different number of shares of any other
class or classes of
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stock, whether by capital reorganization, reclassification or otherwise (other
than a subdivision or combination of shares provided for in Section (B)(4)(e)
above or a merger or other reorganization referred to in Section (B)(2)(c)
above), the Series A Conversion Price then in effect shall be proportionately
adjusted, concurrently with the effectiveness of such reorganization or
reclassification, so that the Series A Preferred Stock shall be convertible
into, in lieu of the number of shares of Common Stock which the holders would
otherwise have been entitled to receive, a number of shares of such other class
or classes of stock equivalent to the number of shares of Common Stock that
would have been subject to receipt by the holders upon conversion of the Series
A Preferred Stock immediately before such change.
(g) NO IMPAIRMENT. The corporation will not, by amendment of
its Restated Articles of Incorporation or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed hereunder by the corporation,
but will at all times in good faith assist in the carrying out of all the
provisions of this Section (B)(4) and in the taking of all such action as may be
necessary or appropriate in order to protect the Conversion Rights of the
holders of the Series A Preferred Stock against impairment.
(h) MINIMUM ADJUSTMENT. No adjustment of the Series A
Conversion Price shall be made in an amount less than $.01 per share; provided,
however, that any adjustments which are not required to be made as a result of
the operation of this Section (B)(4)(h) shall be carried forward and shall be
taken into account in any subsequent adjustment made prior to five years from
the date of the event giving rise to the adjustment being carried forward.
Except to the limited extent provided for in Section (B)(4)(d)(iii)(4). no
adjustment of the Series A Conversion Price pursuant to Section (B)(4)(d)(iv)
shall have the effect of increasing the Series A Conversion Price above the
Series A Conversion Price in effect immediately prior to such adjustment.
(i) CERTIFICATES AS TO ADJUSTMENTS. Upon the occurrence of
each adjustment or readjustment of the Series A Conversion Price pursuant to
this Section (B)(4), the corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of Series A Preferred Stock a certificate executed by the
corporation's President or Chief Financial Officer setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The corporation, upon the written request at any time of
any holder of Series A Preferred Stock, shall furnish or cause to be furnished
to such holder a like certificate setting forth (i) such adjustments and
readjustments, (ii) the Series A Conversion Price at the time in effect, and
(iii) the number of shares of Common Stock and the amount, if any, of other
property which at the time would be received upon the conversion of the Series A
Preferred Stock.
12 - RESTATED ARTICLES OF INCORPORATION
<PAGE>
(j) NOTICES OF RECORD DATE. In the event that the
corporation shall propose at any time (i) to declare any dividend or
distribution upon its Common Stock, whether in cash, property, stock or other
securities, whether or not a regular cash dividend and whether or not out of
earnings or earned surplus; (ii) to offer for subscription pro rata to the
holders of any class or series of its stock any additional shares of stock of
any class or series or other rights; (iii) to effect any reclassification or
recapitalization of its Common Stock outstanding involving a change in the
Common Stock; or (iv) to merge or consolidate with or into any other corporation
or sell, lease or convey all or substantially all of its assets or to liquidate,
dissolve or wind up, then, in connection with each such event, the corporation
shall send to the holders of Series A Preferred Stock:
(1) at least 20 days, prior written notice of the date
on which a record shall be taken for such dividend, distribution or subscription
rights (and specifying the date on which the holders of Common Stock shall be
entitled thereto) or for determining rights to vote, if any, in respect of the
matters referred to in Section (B)(4)(j)(iii) and (iv) above; and
(2) in the case of the matters referred to in Section
(B)(4)(j)(iii) and (iv) above, at least 20 days, prior written notice of the
date when the same shall take place (and specifying the date on which the
holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon the occurrence of such event).
(k) ISSUE TAXES. The corporation shall pay any and all issue
and other taxes that may be payable in respect of any issue or delivery of
shares of Common Stock on conversion of Series A Preferred Stock pursuant
hereto; provided, however, that the corporation shall not be obligated to pay
any transfer taxes resulting from any transfer requested by any holder in
connection with any such conversion.
(l) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series A Preferred Stock, such number of its
shares of Common Stock as shall be sufficient from time to time to effect the
conversion of all outstanding shares of Series A Preferred Stock; and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of the Series
A Preferred Stock, the corporation will take such corporate action as may be
necessary, in the opinion of its counsel, to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purpose, including without limitation engaging in best efforts to
obtain the requisite shareholder approval of any necessary amendment to these
Restated Articles of Incorporation.
13 - RESTATED ARTICLES OF INCORPORATION
<PAGE>
(m) FRACTIONAL SHARES. No fractional share shall be issued
upon the conversion of any share or shares of Series A Preferred Stock. All
shares of Common Stock (including fractions thereof) issuable upon conversion of
more than one share of Series A Preferred Stock by a holder thereof shall be
aggregated for purposes of determining whether the conversion would result in
the issuance of any fractional share. If, after the aforementioned aggregation,
the conversion would result in the issuance of a fraction of a share of Common
Stock, the corporation, in lieu of issuing any fractional share, shall pay the
holder otherwise entitled to such fraction a sum in cash equal to the fair
market value of such fraction on the date of conversion (as determined in good
faith by the Board of Directors).
(n) NOTICES. Any notice required by the provisions of this
Section (B)(4) to be given to the any holder of shares of Series A Preferred
Stock shall be deemed given when personally delivered to such holder or when
deposited in the United States mail, postage prepaid and addressed to such
holder of record at the holder's address appearing on the books of the
corporation.
(5) RESTRICTIONS AND LIMITATIONS.
As long as any shares of Series A Preferred Stock remain
outstanding, the corporation, without the vote or written consent by the holders
of at least a majority of the outstanding shares of Series A Preferred Stock,
voting as a class, shall not:
(a) Redeem, purchase or otherwise acquire for value (or pay
into or set aside for a sinking fund for each purpose) any share or shares of
Preferred Stock otherwise than by conversion in accordance with Section (B)(4)
hereof or any share or shares of Common Stock; provided, however, that this
restriction shall not apply to the repurchase of shares of Common Stock from
employees, officers, directors, consultants or other persons performing services
for the Company or any subsidiary pursuant to agreements under which the Company
has the option to repurchase such shares at cost upon the occurrence of certain
events, such as the termination of employment.
(b) Authorize or issue or obligate itself to issue, any
other equity security (including any security convertible into or exercisable
for any equity security) senior to the Series A Preferred Stock as to dividend
or liquidation preferences or any other rights, preferences or privileges of or
powers granted to the Series A Preferred Stock;
(c) Increase or decrease (other than by conversion) the
total number of authorized shares of Preferred Stock;
(d) Change, amend, modify or otherwise alter any of the
rights, preferences or privileges provided for herein for the benefit of any
shares of Series A Preferred Stock; or
14 - RESTATED ARTICLES OF INCORPORATION
<PAGE>
(e) Change the authorized number of directors of the
corporation or the provisions for the election of Directors of the corporation
by class vote contained in Section (B)(3)(b) above.
(6) NO REISSUANCE OF SERIES A PREFERRED STOCK.
No share or shares of Series A Preferred Stock acquired by the
corporation by reason of repurchase, conversion or otherwise shall be reissued,
and all such shares shall be cancelled, retired and eliminated from the shares
which the corporation shall be authorized to issue.
ARTICLE IV
No director of the corporation shall be personally liable to the
corporation or its shareholders for monetary damages for conduct as a director;
provided, however, that this Article IV shall not eliminate the liability of a
director for any act or omission for which such elimination of liability is not
permitted under the Oregon Business Corporation Act. No amendment to the Oregon
Business Corporation Act that further limits the acts or omissions for which
elimination of liability is permitted shall affect the liability of a director
for any act or omission which occurs prior to the effective date of such
amendment.
ARTICLE V
5.1 DEFINITIONS.
A. PROCEEDING. The term "Proceeding" shall include any
threatened, pending, or completed action, suit, or proceeding, whether brought
in the right of the corporation or otherwise and whether of a civil, criminal,
administrative, or investigative nature, in which a Fiduciary Person may be or
may have been involved as a party or otherwise by reason of the fact that the
person is or was a Fiduciary Person.
B. FIDUCIARY PERSON. A Fiduciary Person is a person who is or was
a director or officer of the corporation or a fiduciary within the meaning of
the Employee Retirement Income Security Act of 1974 with respect to any employee
benefit plan of the corporation, or is or was serving at the request of the
corporation as a director, officer, or fiduciary of an employee benefit plan of
another corporation, partnership, joint venture, trust, or other enterprise,
whether or not serving in such capacity at the time any liability or expense is
incurred for which indemnification or advancement of expenses can be provided
under this Article.
5.2 INDEMNIFICATION. The corporation shall indemnify to the fullest
extent not prohibited by law any Fiduciary Person who was or is a party or is
threatened to be made a party to any Proceeding against all expenses (including
attorney fees), judgments, fines, and amounts
15 - RESTATED ARTICLES OF INCORPORATION
<PAGE>
paid in settlement actually and reasonably incurred by the person in connection
with such Proceeding.
5.3 ADVANCEMENT OF EXPENSES. Expenses incurred by a director or officer
of the corporation in defending a Proceeding shall in all cases be paid by the
corporation in advance of the final disposition of such Proceeding at the
written request of such person, if the person:
A. furnishes the corporation a written affirmation of the
person's good faith belief that such person has met the standard of conduct
described in the Oregon Business Corporation Act or is entitled to be
indemnified by the corporation under any other indemnification rights granted by
the corporation to such person; and
B. furnishes the corporation a written undertaking to repay such
advance to the extent it is ultimately determined by a court that such person is
not entitled to be indemnified by the corporation under this Article or under
any other indemnification rights granted by the corporation to such person.
Such advances shall be made without regard to the person's ability
to repay such advances and without regard to the person's ultimate entitlement
to indemnification under this Article or otherwise.
5.4 NON-EXCLUSIVITY AND CONTINUITY OF RIGHTS. The indemnification and
entitlement to advancement of expenses provided by this Article shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under the corporation's articles of incorporation or any statute, agreement,
general or specific action of the board of directors, vote of stockholders, or
otherwise, shall continue as to a person who has ceased to be a director or
officer, shall inure to the benefit of the heirs, executors, and administrators
of such person, and shall extend to all claims for indemnification or
advancement of expenses made after the adoption of this Article.
5.5 AMENDMENTS. Any repeal of this Article shall only be prospective and
no repeal or modification hereof shall adversely affect the rights under this
Article in effect at the time of the alleged occurrence of any action or
omission to act that is the cause of any Proceeding.
Dated: May 29, 1990
/s/ Eric W. Strid
--------------------------------------
Eric W. Strid, President
16 - RESTATED ARTICLES OF INCORPORATION
<PAGE>
AMENDMENT TO RESTATED ARTICLES OF INCORPORATION
OF
CASCADE MICROTECH, INC.
ARTICLE V OF THE RESTATED ARTICLES OF INCORPORATION
IS AMENDED TO READ AS FOLLOWS:
V.
Capital Stock
5.1 The corporation is authorized to issue two classes of shares, to be
designated Preferred Stock ("Preferred Stock") and Common Stock ("Common
Stock"), respectively. The total number of shares of capital stock that the
corporation shall have authority to issue is sixteen million (16,000,000). The
total number of shares of Preferred Stock that the corporation shall have
authority to issue is four million (4,000,000). The total number of shares of
Common Stock that the corporation shall have authority to issue is twelve
million (12,000,000). The Preferred Stock shall have a par value of $0.01 per
share, and the Common Stock shall have a par value of $0.01 per share.
5.2 The shares of Preferred Stock may be issued from time to time in one
or more series. The Board of Directors of the corporation (the "Board of
Directors") is expressly authorized to provide for the issue of all or any of
the shares of the Preferred Stock in one or more series and to fix the number of
shares and to determine or alter for each such series such voting powers, full
or limited, or no voting powers, and such designations, preferences and
relative, participating, optional or other rights and such qualifications,
limitations or restrictions thereof as shall be stated and expressed in the
resolution or resolutions adopted by the Board of Directors providing for the
issue of such shares (a "Preferred Stock Designation") and as may be permitted
by the Oregon Business Corporation Act. The Board of Directors is also expressly
authorized to increase or decrease (but not below the number of such series then
outstanding) the number of shares of any series subsequent to the issue of
shares of that series. In case the number of shares of any such series shall be
so decreased, the shares constituting such decrease shall resume the status that
they had prior to the adoption of the resolution originally fixing the number of
shares of such series.
(A) The first series of Preferred Stock shall consist of 1,337,319
shares and is hereby designated "Series A Preferred Stock." The second series of
Preferred Stock shall consist of 1,009,167 shares and is hereby designated
"Series B Preferred Stock." The third
1 - AMENDMENT TO RESTATED
ARTICLES OF INCORPORATION
<PAGE>
series of Preferred Stock shall consist of 1,500,000 shares and is hereby
designated "Series C Preferred Stock."
(B) The powers, preferences, rights, restrictions and other
matters relating to the Series A, B and C Preferred Stock are as follows:
(1) DIVIDENDS.
(a) The holders of the Series A, B and C Preferred
Stock shall be entitled to receive dividends at the rate of $0.251, $0.60 and
$0.80 per share (as adjusted for any stock dividends, combinations or splits
with respect to such shares) per annum, respectively, payable out of funds
legally available therefor. Such dividends shall be payable only when, as and if
declared by the Board of Directors and shall be noncumulative.
No dividends (other than those payable solely in the
form of Common Stock of the Corporation) shall be paid on any Common Stock of
the Corporation during any fiscal year of the Corporation until dividends in the
total amount of $0.251, $0.60 and $0.80 per share (as adjusted for any stock
dividends, combinations or splits with respect to such shares) on the Series A,
B and C Preferred Stock, respectively, shall have been paid or declared and set
apart during that fiscal year.
No right shall accrue to holders of shares of Series A,
B and C Preferred Stock by reason of the fact that dividends on such shares are
not declared in any prior year, and no undeclared or unpaid dividend shall bear
or accrue any interest.
No dividend shall be paid on or declared and set apart
for the shares of any series of Preferred Stock for any dividend period unless
at the same time a like proportionate dividend for the same dividend period,
ratably in proportion to the respective annual dividend rates fixed therefor,
shall be paid on or declared and set apart for the shares of all other such
series of Preferred Stock.
(b) In the event the Corporation shall declare a
distribution (other than any distribution described in Section (B)(2)) payable
in securities of other persons, evidences of indebtedness issued by the
Corporation or other persons, assets (excluding cash dividends) or options or
rights to purchase any such securities or evidences of indebtedness, then, in
each such case, the holders of the Series A, B and C Preferred Stock shall be
entitled to a proportionate share of any such distribution as though the holders
of the Series A, B and C Preferred Stock were the holders of the number of
shares of Common Stock of the Corporation into which their shares of Series A, B
and C Preferred Stock are convertible as of the record date fixed for the
determination of the holders of Common Stock of the Corporation entitled to
receive such distribution.
2 - AMENDMENT TO RESTATED
ARTICLES OF INCORPORATION
<PAGE>
(2) LIQUIDATION AND REORGANIZATION PREFERENCES.
(a) In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the holders of
the Series A, B and C Preferred Stock shall be entitled to receive, prior and in
preference to any distribution of any of the assets or surplus funds of the
Corporation to the holders of the Common Stock by reason of their ownership
thereof, the amount of $2.51, $6.00 and $8.00 per share (as adjusted for any
stock dividends, combinations or splits with respect to such shares),
respectively, plus all accrued or declared but unpaid dividends on such share
for each share of Series A, B and C Preferred Stock then held by them. The
Series A, B and C Preferred Stock shall rank on a parity as to the receipt of
the respective preferential amounts for each such series upon the occurrence of
such event. If upon the occurrence of such event, the assets and funds thus
distributed among the holders of the Series A, B and C Preferred Stock shall be
insufficient to permit the payment to such holders of the full aforesaid
preferential amount, then the entire assets and funds of the Corporation legally
available for distribution shall be distributed ratably among the holders of the
Series A, B and C Preferred Stock in proportion to the preferential amount each
such holder is otherwise entitled to receive.
(b) After payment to the holders of Series A, B and C
Preferred Stock of the full amount set forth in Section (B)(2)(a) above, the
entire remaining assets and funds of the Corporation legally available for
distribution, if any, shall be distributed among the holders of the Common Stock
and the Series A, B and C Preferred Stock in proportion to the shares of Common
Stock then held by them and the shares of Common Stock which they then have the
right to acquire upon conversion of the shares of Series A, B and C Preferred
Stock then held by them.
(c) For purposes of this Section (B)(2), (i) any
acquisition of the Corporation by means of merger or other form of corporate
reorganization in which more than 50% of the outstanding shares of the
Corporation are exchanged for securities or other consideration issued or caused
to be issued by the acquiring corporation or its subsidiary (other than a mere
reincorporation transaction), or (ii) a sale of all or substantially all of the
assets of the Corporation, shall be treated as a liquidation, dissolution or
winding up of the Corporation and shall entitle the holders of Series A, B and C
Preferred Stock and Common Stock to receive at the closing, in cash, securities
or other property (valued as provided in Section (B)(2)(d) below) amounts as
follows:
(i) The holders of the Series A, B and C
Preferred Stock shall be entitled to receive, prior and in preference to any
distribution of any cash, securities or other property to the holders of the
Common Stock by reason of their ownership
3 - AMENDMENT TO RESTATED
ARTICLES OF INCORPORATION
<PAGE>
thereof, the amount of $2.51, $6.00 and $8.00 per share (as adjusted for any
stock dividends, combinations or splits with respect to such shares),
respectively, plus all accrued or declared but unpaid dividends on such share
for each share of Series A, B and C Preferred Stock then held by them. If upon
the occurrence of such event, the cash, securities and other property thus
distributed among the holders of the Series A, B and C Preferred Stock shall be
insufficient to permit the payment to such holders of the full aforesaid
preferential amount, then the entire assets and funds of the Corporation legally
available for distribution shall be distributed ratably among the holders of the
Series A, B and C Preferred Stock in proportion to the preferential amount each
such holder is otherwise entitled to receive;
(ii) After payment to the holders of Series A, B
and C Preferred Stock of the full amount set forth in Section (B)(2)(c)(i)
above, the holders of Common Stock shall be entitled to receive prior and in
preference to any further distribution of any cash, securities or other property
to the holders of Series A, B and C Preferred Stock by reason of their ownership
thereof, the amount of $1.70 per share (as adjusted for any stock dividends,
combinations or splits with respect to such shares), plus all accrued or
declared but unpaid dividends on such share for each share of Common Stock then
held by them. If upon the occurrence of such event, the cash, securities and
other property thus distributed among the holders of Common Stock shall be
insufficient to permit the payment to such holders of the full aforesaid
preferential amount, then the entire assets and funds of the Corporation legally
available for distribution shall be distributed ratably among the holders of
Common Stock in proportion to the preferential amount each such holder is
otherwise entitled to receive; and
(iii) After payment to the holders of Series A, B
and C Preferred Stock and Common Stock of the full amounts set forth above in
Sections (B)(2)(c)(i) and (ii), respectively, any remaining cash, securities or
other property legally available for distribution, if any, shall be distributed
among the holders of the Common Stock and the Series A, B and C Preferred Stock
in proportion to the shares of Common Stock then held by them and the shares of
Common Stock which they then have the right to acquire upon conversion of the
shares of Series A, B and C Preferred Stock then held by them.
(d) Whenever the distribution provided for in this
Section (B)(2) shall be payable in securities or property other than cash, the
value of such distribution shall be the fair market value of such securities or
other property as determined in good faith by the Board of Directors.
(3) VOTING RIGHTS; DIRECTORS.
4 - AMENDMENT TO RESTATED
ARTICLES OF INCORPORATION
<PAGE>
(a) Each holder of shares of the Series A, B and C be
entitled to a number of votes equal to the number of shares of Common Stock into
which such shares of Series A, B and C Preferred Stock could be converted and
shall have voting rights and powers equal to the voting rights and powers of the
Common Stock (except as otherwise expressly provided herein or as required by
law, voting together with the Common Stock as a single class) and shall be
entitled to notice of any shareholders' meeting in accordance with the Bylaws of
the Corporation. Fractional votes, however, shall not be permitted, and any
fractional voting rights resulting from the above formula (after aggregating all
shares into which shares of Series A, B and C Preferred Stock held by each
holder could be converted) shall be rounded to the nearest whole number (with
one-half being rounded upward). Each holder of Common Stock shall be entitled to
one vote for each share of Common Stock held.
(b) The authorized number of directors of the Company
shall be fixed by the Board of Directors, but in no event shall be fewer than
four (4) or more than seven (7) members. The holders of a majority of the
outstanding shares of Series A Preferred Stock, voting together as a class,
shall be entitled to designate and elect one member of the Board of Directors,
which member shall be subject to approval by the Corporation, which approval
shall not be unreasonably withheld. So long as there remains outstanding not
fewer than 505,000 shares of Series B Preferred Stock, the holders of a majority
of the outstanding shares of Series B Preferred Stock, voting together as a
class, shall be entitled to designate and elect one member of the Board of
Directors, which member shall be subject to approval by the Corporation, which
approval shall not be unreasonably withheld. So long as there remains
outstanding not fewer than 1,000,000 shares of Series C Preferred Stock, the
holders of a majority of the outstanding shares of Series C Preferred Stock,
voting together as a class, shall be entitled to designate and elect one member
of the Board of Directors, which member shall be subject to approval by the
Corporation, which approval shall not be unreasonably withheld. The holders of
Series A, B and C Preferred Stock and the holders of Common Stock, voting
together as a class, shall be entitled to designate and elect the remaining
members of the Board of Directors.
(c) In the case of any vacancy in the office of a
director designated and elected by the holders of the Series A, B or C Preferred
Stock pursuant to the second and third sentences of Section (B)(3)(b) hereof,
only the holders of Series A, B and C Preferred Stock, as the case may be, by
affirmative vote of the holders of a majority of the outstanding shares thereof,
may elect a successor to hold the office for the unexpired term of the director
whose place shall be vacant, which successor shall be subject to approval by the
Corporation, which approval shall not be unreasonably withheld. Any director who
shall have been elected by the holders of the Series A, B or C Preferred Stock
and approved pursuant to Section (B)(3)(b) hereof or any director so elected and
approved as provided in
5 - AMENDMENT TO RESTATED
ARTICLES OF INCORPORATION
<PAGE>
the preceding sentence hereof may be removed during the director's term of
office, with or without cause, only by the affirmative vote of the holders of
a majority of the outstanding shares of Series A, B or C Preferred Stock, as
the case may be.
(4) CONVERSION.
The holders of Series A, B and C Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):
(a) RIGHT TO CONVERT. Each share of Series A Preferred
Stock shall be convertible, at the option of the holder thereof, at any time
after the date of issuance of such share, at the office of the Corporation or
any transfer agent for such stock, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing $2.51 by the
Series A Conversion Price applicable to such share, determined as hereinafter
provided, in effect on the date the certificate is surrendered for conversion.
The price at which shares of Common Stock shall be deliverable upon conversion
of shares of the Series A Preferred Stock (the "Series A Conversion Price")
shall initially be $2.51 per share of Common Stock. Such initial Series A
Conversion Price shall be adjusted as hereinafter provided. Each share of Series
B Preferred Stock shall be convertible, at the option of the holder thereof, at
any time after the date of issuance of such share, at the office of the
Corporation or any transfer agent for such stock, into such number of fully paid
and nonassessable shares of Common Stock as is determined by dividing $6.00 by
the Series B Conversion Price applicable to such share, determined as
hereinafter provided, in effect on the date the certificate is surrendered for
conversion. The price at which shares of Common Stock shall be deliverable upon
conversion of shares of the Series B Preferred Stock (the "Series B Conversion
Price") shall initially be $6.00 per share of Common Stock. Such initial Series
B Conversion Price shall be adjusted as hereinafter provided. Each share of
Series C Preferred Stock shall be convertible, at the option of the holder
thereof, at any time after the date of issuance of such share, at the office of
the Corporation or any transfer agent for such stock, into such number of fully
paid and nonassessable shares of Common Stock as is determined by dividing $8.00
by the Series C Conversion Price applicable to such share, determined as
hereinafter provided, in effect on the date the certificate is surrendered for
conversion. The price at which shares of Common Stock shall be deliverable upon
conversion of shares of the Series C Preferred Stock (the "Series C Conversion
Price") shall initially be $8.00 per share of Common Stock. Such initial Series
C Conversion Price shall be adjusted as hereinafter provided.
(b) AUTOMATIC CONVERSION. Each share of Series A, B
and C Preferred Stock shall automatically be converted into shares of Common
Stock at the then-effective Series A, B or C Conversion Price, respectively,
upon the earlier, of (i) the
6 - AMENDMENT TO RESTATED
ARTICLES OF INCORPORATION
<PAGE>
date specified by vote or written consent or agreement of holders of at least a
majority of the shares of Series A, B and C Preferred Stock then outstanding,
provided such vote, written consent or agreement is in furtherance of (A) the
closing of the sale of the Corporation's Common Stock in a firm commitment,
underwritten public offering registered under the Securities Act of 1933, as
amended (the "Securities Act"), (B) the closing of any acquisition of the
Corporation by means of merger or other form of corporate reorganization in
which more than 50% of the outstanding shares of the Corporation are exchanged
for securities or other consideration issued or caused to be issued by the
acquiring corporation or its subsidiary (other than a mere reincorporation
transaction), or (C) the closing of a sale of all or substantially all of the
assets of the Corporation; (ii) the date on which a majority of the shares of
Series A and B Preferred Stock and all of the Series C Preferred Stock
originally issued has been converted into shares of Common Stock or redeemed; or
(iii) immediately upon the closing of the sale of the Corporation's Common Stock
in a firm commitment, underwritten public offering registered under the
Securities Act, other than a registration relating solely to a transaction under
Rule 145 under the Securities Act (or any successor thereto) or to an employee
benefit plan of the Corporation, at a public offering price (prior to
underwriters' discounts and expenses) equal to or exceeding 125 percent of the
then applicable Conversion Price of the Series C Preferred Stock (as adjusted
for, any stock dividends, combinations or splits with respect to such shares)
and the aggregate proceeds to the Corporation and any selling shareholders
(after deduction for underwriters' discounts and expenses relating to the
issuance, including without limitation fees of the Corporation's counsel) of
which exceed $20,000,000 (a "Qualified Public Offering").
(c) MECHANICS OF CONVERSION.
(i) Before any holder of Series A, B or C
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, the holder shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or of any transfer agent for such
stock and shall give written notice to the Corporation at such office that the
holder elects to convert the same and shall state therein the name or names in
which the holder wishes the certificate or certificates for shares of Common
Stock to be issued. As soon as practicable thereafter, the Corporation shall
issue and deliver at such office to such holder of Series A, B or C Preferred
Stock a certificate or certificates for the number of shares of Common Stock to
which the holder shall be entitled as aforesaid. Such conversion shall be deemed
to have been made immediately prior to the close of business on the date of
surrender of the shares of Series A, B or C Preferred Stock to be converted, and
the person or persons entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on such date.
7 - AMENDMENT TO RESTATED
ARTICLES OF INCORPORATION
<PAGE>
(ii) If the conversion is in connection with an
underwritten offering of securities pursuant to the Securities Act, the
conversion may be conditioned, at the option of any holder tendering shares of
Series A, B or C Preferred Stock for conversion, upon the closing with the
underwriters of the sale of securities pursuant to such offering, in which event
the person(s) entitled to receive the Common Stock upon conversion of the Series
A, B or C Preferred Stock shall not be deemed to have converted such Series A, B
or C Preferred Stock until immediately prior to the closing of such sale of
securities.
(d) ADJUSTMENTS TO SERIES A, B AND C CONVERSION PRICE
FOR CERTAIN DILUTING ISSUES.
(i) SPECIAL DEFINITIONS. For purposes of this
Section (B)(4)(d), the following definitions shall apply:
(1) "OPTIONS" shall mean rights, options or
warrants to subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities (as defined below).
(2) "ORIGINAL ISSUE DATE" shall mean the date
on which a share of Series C Preferred Stock was first issued.
(3) "CONVERTIBLE SECURITIES" shall mean any
evidences of indebtedness, shares (other than Common Stock and Series A, B and C
Preferred Stock) or other securities convertible into or exchangeable for Common
Stock.
(4) "ADDITIONAL SHARES OF COMMON STOCK"
shall mean all shares of Common Stock issued (or, pursuant to Section
(B)(4)(d)(iii), deemed to be issued) by the Corporation after the Original Issue
Date, other than shares of Common Stock issued or issuable:
(A) upon conversion of shares of Series
A, B or C Preferred Stock;
(B) pursuant to stock option, stock
incentive, or stock purchase plans or agreements on terms approved by the Board
of Directors, to officers, directors or employees of, or consultants to, the
Corporation, so long as shares issued or issuable under such plans and
agreements, together with shares reserved for issuance under such plans and
agreements total no more than 2,200,000 shares (subject to adjustment for any
stock dividends, combinations or splits with respect to such shares);
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(C) to officers, directors or employees
of, or consultants to, the Corporation:
(1) which are subject to repurchase
by the Corporation at the original issue price(s) thereof (but excluding any
shares the issuance of which would have resulted in an adjustment of the Series
A, B or C Conversion Price but for Section (B)(4)(d)(i)(4)(B)), provided that
shares which are excluded from the definition of "Additional Shares of Common
Stock" pursuant to this Section (B)(4)(d)(i)(4)(C) are reissued by the
Corporation at not less than such original issue price(s); or
(2) which become available for
reissuance as a result of lapse without exercise of stock options;
(D) as a dividend or distribution on
Series A, B or C Preferred Stock; or
(E) for which adjustment of the Series
A, B or C Conversion Price is made pursuant to Section (B)(4)(e).
(F) upon exercise of that certain
warrant dated as of the Original Issue Date, to purchase up to 250,000 shares of
Series C Preferred Stock.
(ii) NO ADJUSTMENT OF CONVERSION PRICE. Any provision
herein to the contrary notwithstanding, no adjustment in the Conversion Price
for a series of Preferred Stock shall be made in respect of the issuance of
Additional Shares of Common Stock unless the consideration per share (determined
pursuant to Section (B)(4)(d)(v) hereof) for an Additional Share of Common Stock
issued or deemed to be issued by the Corporation is less than the Conversion
Price for such series of Preferred Stock in effect on the date of and
immediately prior to such issue.
(iii) DEEMED ISSUE OF ADDITIONAL SHARES OF COMMON STOCK.
In the event the Corporation at any time or from time to time after the Original
Issue Date shall issue any Options or Convertible Securities (other than
issuances pursuant to clauses (A) through (E) of Section (B)(4)(d)(i)(4)) or
shall fix a record date for the determination of holders of any class of
securities then entitled to receive any such Options or Convertible Securities,
then the maximum number of shares (as set forth in the instrument relating
thereto without regard to any provisions contained therein designed to protect
against dilution) of Common Stock issuable upon the exercise of such Options or,
in the case of
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Convertible Securities and Options therefor, the conversion or
exchange of such Convertible Securities, shall be deemed to be Additional Shares
of Common Stock issued as of the time of such issue or, in case such a record
date shall have been fixed, as of the close of business on such record date;
provided, however, that in any such case in which Additional Shares of Common
Stock are deemed to be issued:
(1) no further adjustments in the Series A, B
or C Conversion Price shall be made upon the subsequent issue of Convertible
Securities or shares of Common Stock upon the exercise of such Options or
conversion or exchange of such Convertible Securities;
(2) if such Options or Convertible Securities
by their terms provide, with the passage of time or otherwise, for any increase
or decrease in the consideration payable to the Corporation or decrease or
increase in the number of shares of Common Stock issuable, upon the exercise,
conversion or exchange thereof, the Series A, B or C Conversion Price computed
upon the original issue thereof (or upon the occurrence of a record date with
respect thereto) and any subsequent adjustments based thereon, shall be
recomputed, upon any such increase or decrease becoming effective, to reflect
such increase or decrease insofar as it affects such Options or the rights of
conversion or exchange under such Convertible Securities; provided, however,
that no such adjustment of the Series A, B or C Conversion Price shall affect
Common Stock previously issued upon conversion of the Series A, B or C Preferred
Stock;
(3) upon the expiration of any such options or
any rights of conversion or exchange under such Convertible Securities which
shall not have been exercised, the Series A, B or C Conversion Price computed
upon the original issue thereof (or upon the occurrence of a record date with
respect thereto) and any subsequent adjustments based thereon, shall, upon such
expiration, be recomputed as if:
(A) in the case of Convertible Securities
or options for Common Stock, the only Additional Shares of Common Stock issued
were the shares of Common Stock, if any, actually issued upon the exercise of
such Options or the conversion or exchange of such Convertible Securities and
the consideration received therefor was the consideration actually received by
the Corporation for the issue of all such options, whether or not exercised,
plus the consideration actually received by the Corporation upon such exercise
or for the issue of all such Convertible Securities which were actually
converted or exchanged, plus the additional consideration, if any, actually
received by the Corporation upon such conversion or exchange; and
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(B) in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of issue of such Options and the
consideration received by the Corporation for the Additional Shares of Common
Stock deemed to have been then issued was the consideration actually received by
the Corporation for the issue of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the Corporation
(determined pursuant to Section (B)(4)(d)) upon the issue of the Convertible
Securities with respect to which such Options were actually exercised;
(4) no readjustment pursuant to clause (2) or
(3) above shall have the effect of increasing the Series A, B or C Conversion
Price to an amount which exceeds the lower of (A) the Series A, B or C
Conversion Price on the original adjustment date or (B) the Series A, B or C
Conversion Price that would have resulted from any issuance of Additional Shares
of Common Stock between the original adjustment date and such readjustment date;
and
(5) in the case of any options which expire by
their terms not more than 30 days after the date of issue thereof, no adjustment
of the Series A, B or C Conversion Price shall be made until the expiration or
exercise of all such Options, whereupon such adjustment shall be made in the
same manner provided in clause (3) above.
(iv) ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE
OF ADDITIONAL SHARES OF COMMON STOCK. In the event the Corporation, at any time
after the Original Issue Date, shall issue Additional Shares of Common Stock
(including Additional Shares of Common Stock deemed to be issued pursuant to
Section (B)(4)(d)(iii)) without consideration or for a consideration per share
less than the Conversion Price with respect to any series of Preferred Stock in
effect on the date of and immediately prior to such issue, then and in such
event, the Conversion Price for such series of Preferred Stock shall be reduced,
concurrently with such issue, to a price (calculated to the nearest cent)
determined by multiplying such Conversion Price by a fraction,
(1) the numerator of which shall be (A) the
number of shares of Common Stock outstanding immediately prior to such issue
plus (B) the number of shares of Common Stock which the aggregate consideration
(if any, as determined pursuant to Section (B)(4)(d)(v)) received by the
Corporation for the total number of Additional Shares of Common Stock so issued
would purchase at such Conversion Price in effect immediately prior to such
issuance, and
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(2) the denominator of which shall be (A) the
number of shares of Common Stock outstanding immediately prior to such issue
plus (B) the number of such Additional Shares of Common Stock so issued.
For the purpose of the above calculation, the number of shares of Common
Stock outstanding immediately prior to such issue shall be calculated on a
fully diluted basis, as if all shares of Series A, B and C Preferred Stock
and all Convertible Securities had been fully converted into shares of Common
Stock immediately prior to such issuance and any outstanding warrants,
options or other rights for the purchase of shares of stock or convertible
securities had been fully exercised immediately prior to such issuance (and
the resulting securities fully converted into shares of Common Stock, if so
convertible) as of such date, but not including in such calculation any
additional shares of Common Stock issuable with respect to shares of Series
A, B or C Preferred Stock, Convertible Securities or outstanding options,
warrants or other rights for the purchase of shares of stock or convertible
securities solely as a result of the adjustment of the respective Conversion
Prices (or other conversion ratio) resulting from the issuance of Additional
Shares of Common Stock causing such adjustment.
(v) DETERMINATION OF CONSIDERATION. For purposes of
this Section (B)(4)(d), the consideration received by the Corporation for the
issue of any Additional Shares of Common Stock shall be computed as follows:
(1) CASH AND PROPERTY. Such consideration:
(A) insofar as it consists of cash, shall
be computed at the aggregate amount of cash received by the Corporation
excluding amounts paid or payable for accrued interest or accrued dividends;
(B) insofar as it consists of property
other than cash, shall be computed at the fair value thereof at the time of such
issue, as determined in good faith by the Board; and
(C) insofar as it consists of cash and
property, shall be computed as provided in clauses (A) and (B) above, prorated
for the amount of each form of such consideration so received.
(2) OPTIONS AND CONVERTIBLE SECURITIES. The
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Section (B)(4)(d)(iii)
relating to Options and convertible Securities shall be determined by dividing:
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(A) the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein designed to protect against dilution) payable
to the Corporation upon the exercise of such Options or the conversion or
exchange of such Convertible securities or, in the case of Options for
Convertible Securities, the exercise of such options for Convertible Securities
and the conversion or exchange of such Convertible securities,
by (B) the maximum number of shares of
Common Stock (as set forth in the instruments relating thereto, without regard
to any provision contained therein designed to protect against the dilution)
issuable upon the exercise of such options or conversion or exchange of such
Convertible Securities.
(e) ADJUSTMENTS TO CONVERSION PRICES FOR STOCK DIVIDENDS
AND FOR COMBINATIONS OR SUBDIVISIONS OF COMMON STOCK. In the event that the
Corporation at any time or from time to time after the Original Issue Date shall
declare or pay, without consideration, any dividend on the Common Stock payable
in Common Stock or in any right to acquire Common Stock for no consideration or
shall effect a subdivision of the outstanding shares of Common Stock into a
greater number of shares of Common Stock (by stock split, reclassification or
otherwise than by payment of a dividend in Common Stock or in any right to
acquire Common Stock) or in the event the outstanding shares of Common Stock
shall be combined or consolidated, by reclassification or otherwise, into a
lesser number of shares of Common Stock, then the Conversion Price for any
series of Preferred Stock in effect immediately prior to such event shall be
proportionately decreased or increased, as appropriate, concurrently with the
effectiveness of such event. In the event that the Corporation shall declare or
pay, without consideration, any dividend on the Common Stock payable in any
right to acquire Common Stock for no consideration, then the Corporation shall
be deemed to have made a dividend payable in Common Stock in an amount of shares
equal to the maximum number of shares issuable upon exercise of such rights to
acquire Common Stock.
(f) ADJUSTMENTS FOR RECLASSIFICATIONS AND REORGANIZATIONS.
If the Common Stock issuable upon conversion of the Series A, B and C Preferred
Stock shall be changed into the same or a different number of shares of any
other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
provided for in Section (B)(4)(e) above or a merger or other reorganization
referred to in Section (B)(2)(c) above), the Series A, B and C Conversion Price
then in effect shall be proportionately adjusted, concurrently with the
effectiveness of such reorganization or reclassification, so that the Series A,
B and C Preferred Stock shall be convertible into, in lieu of the number of
shares of Common Stock
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which the holders would otherwise have been entitled to receive, a number of
shares of such other class or classes of stock equivalent to the number of
shares of Common Stock that would have been subject to receipt by the holders
upon conversion of the Series A, B and C Preferred Stock immediately before
such change.
(g) NO IMPAIRMENT. The Corporation will not, by amendment of
its Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in the carrying out of all the provisions of this
Section (B)(4) and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series A, B and C Preferred Stock against impairment.
(h) MINIMUM ADJUSTMENT. No adjustment of the Series A,
B or C Conversion Price shall be made in an amount less than $.01 per share;
provided, however, that any adjustments which are not required to be made as a
result of the operation of this Section (B)(4)(h) shall be carried forward and
shall be taken into account in any subsequent adjustment made prior to five
years from the date of the event giving rise to the adjustment being carried
forward. Except to the limited extent provided for in Section (B)(4)(d)(iii)(4),
no adjustment of the Series A, B or C Conversion Price pursuant to Section
(B)(4)(d)(iv) shall have the effect of increasing the Series A, B or C
Conversion Price above the Series A, B or C Conversion Price in effect
immediately prior to such adjustment.
(i) CERTIFICATES AS TO ADJUSTMENTS. Upon the occurrence of
each adjustment or readjustment of any Conversion Price pursuant to this Section
(B)(4), the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Series A, B or C Preferred Stock a certificate executed by the
Corporation's President or Chief Financial Officer setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation, upon the written request at any time of
any holder of Series A, B or C Preferred Stock, shall furnish or cause to be
furnished to such holder a like certificate setting forth (i) such adjustments
and readjustments, (ii) the Conversion Price for such series of Preferred Stock
at the time in effect, and (iii) the number of shares of Common Stock and the
amount, if any, of other property which at the time would be received upon the
conversion of the Series A, B or C Preferred Stock.
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(j) NOTICES OF RECORD DATE. In the event that the
Corporation shall propose at any time (i) to declare any dividend or
distribution upon its Common Stock, whether in cash, property, stock or other
securities, whether or not a regular cash dividend and whether or not out of
earnings or earned surplus; (ii) to offer for subscription pro rata to the
holders of any class or series of its stock any additional shares of stock of
any class or series or other rights; (iii) to effect any reclassification or
recapitalization of its Common Stock outstanding involving a change in the
Common Stock; or (iv) to merge or consolidate with or into any other entity or
sell, lease or convey all or substantially all of its assets or to liquidate,
dissolve or wind up, then, in connection with each such event, the Corporation
shall send to the holders of Series A, B and C Preferred Stock:
(1) at least 20 days' prior written notice of the date
on which a record shall be taken for such dividend, distribution or subscription
rights (and specifying the date on which the holders of Common Stock shall be
entitled thereto) or for determining rights to vote, if any, in respect of the
matters referred to in Section (B)(4)(j)(iii) and (iv) above; and
(2) in the case of the matters referred to in Section
(B)(4)(j)(iii) and (iv) above, at least 20 days' prior written notice of the
date when the same shall take place (and specifying the date on which the
holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon the occurrence of such event).
(k) ISSUE TAXES. The Corporation shall pay any and all issue
and other taxes that may be payable in respect of any issue or delivery of
shares of Common Stock on conversion of Series A, B or C Preferred Stock
pursuant hereto; provided, however, that the Corporation shall not be obligated
to pay any transfer taxes resulting from any transfer requested by any holder in
connection with any such conversion.
(l) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series A, B and C Preferred Stock, such number
of its shares of Common Stock as shall be sufficient from time to time to effect
the conversion of all outstanding shares of Series A, B and C Preferred Stock;
and if at any time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all then outstanding shares
of the Series A, B and C Preferred Stock, the Corporation will take such
corporate action as may be necessary, in the opinion of its counsel, to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose, including
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without limitation engaging in best efforts to obtain the requisite
shareholder approval of any necessary amendment to these Restated Articles of
Incorporation.
(m) FRACTIONAL SHARES. No fractional share shall be issued
upon the conversion of any share or shares of Series A, B or C Preferred Stock.
All shares of Common Stock (including fractions thereof) issuable upon
conversion of more than one share of Series A, B or C Preferred Stock by a
holder thereof shall be aggregated for purposes of determining whether the
conversion would result in the issuance of any fractional share. If, after the
aforementioned aggregation, the conversion would result in the issuance of a
fraction of a share of Common Stock, the Corporation, in lieu of issuing any
fractional share, shall pay the holder otherwise entitled to such fraction a sum
in cash equal to the fair market value of such fraction on the date of
conversion (as determined in good faith by the Board of Directors).
(n) NOTICES. Any notice required by the provisions of this
Section (B)(4) to be given to the holders of shares of Series A, B or C
Preferred Stock shall be deemed given when personally delivered to such holder
or when deposited in the United States mail, postage prepaid and addressed to
such holder of record at the holder's address appearing on the books of the
Corporation.
(5) RESTRICTIONS AND LIMITATIONS.
(a) As long as any shares of Preferred Stock remain
outstanding, the Corporation, without the vote or written consent by (i) the
holders of at least a majority of the outstanding shares of Series A, B and C
Preferred Stock, voting together as a single class, and (ii) the holder of at
least a majority of the outstanding shares of Series C Preferred Stock, voting
as a separate class, shall not:
(i) Redeem, purchase or otherwise acquire for value
(or pay into or set aside for a sinking fund for such purpose) any share or
shares of Preferred Stock or any share or shares of Common Stock; provided,
however, that this restriction shall not apply to (a) the conversion of shares
of Preferred Stock in accordance with Section (B)(4) hereof, (b) the redemption
of shares of Series C Preferred Stock in accordance with Section 2.25 of that
certain Investors' Rights Agreement dated as of the Original Issue Date (the
"Investors' Rights Agreement"), (c) the repurchase of Registrable Securities
pursuant to the terms of Section 2.6 of the Investors' Rights Agreement, (d) the
repurchase of shares of Common Stock from Dale E. Carlton and Cynthia Ann
Crow-Carlton pursuant to the terms of the Stock Put Agreement dated October 14,
1992, (e) the repurchase of shares of Common Stock from K. Reed Gleason in an
amount not to exceed $1,000,000 on terms approved by the Board of Directors
provided such repurchase occurs not more than six (6) months from the Original
Issue Date, and (f) repurchase of shares of Common Stock from current and
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former employees, officers, directors, consultants or other persons performing
services for the Company or any subsidiary pursuant to agreements under which
the Company has the option to repurchase such shares and on terms approved by
the Board of Directors.
(ii) Increase or decrease (other than by conversion)
the total number of authorized shares of Preferred Stock;
(b) The Corporation shall not amend its Articles of
Incorporation without the approval, by vote or written consent, by the holders
of at least a majority of the outstanding shares of a series of Preferred Stock,
if such amendment would change any of the rights, preferences or limitations
provided for herein for the benefit of any shares of that series of Preferred
Stock. Without limiting the generality of the preceding sentence, the
Corporation will not amend its Articles of Incorporation without the approval of
at least a majority of the outstanding shares of a series of Preferred Stock, if
such amendment would:
(i) Authorize or obligate the Corporation to (a) issue
any additional Series A, B or C Preferred Stock above the 1,337,319, 1,009,167
and 1,500,000 shares of Series A, B and C Preferred Stock, respectively,
authorized as of the Original Issue Date, or (b) issue any other equity security
(including any security convertible into or exercisable for any equity security)
senior to the Series A, B or C Preferred Stock as to dividend or liquidation
preferences or any other rights, preferences or limitations of or powers granted
to the Series A, B or C Preferred Stock;
(ii) Change, amend, modify or otherwise alter any of
the rights, preferences or limitations provided for herein for the benefit of
any shares of Series A, B or C Preferred Stock; or
(iii) Change the provisions for the election of
Directors of the Corporation by class vote contained in Section (B)(3)(b) above;
(c) The Corporation shall not amend its Articles of
Incorporation if such amendment would change the rights, preferences or
limitations of one or more series of Preferred Stock, unless such amendment is
approved, by vote or written consent, by the holders of at least a majority of
the outstanding shares of each of the other series of Preferred Stock.
(6) NO REISSUANCE OF SERIES A, B OR C PREFERRED STOCK.
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No share or shares of Series A, B or C Preferred Stock acquired
by the Corporation by reason of repurchase, conversion or otherwise shall be
reissued, and all such shares shall be cancelled, retired and eliminated from
the shares which the Corporation shall be authorized to issue.
18 - AMENDMENT TO RESTATED
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