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EXHIBIT 3.1
CERTIFICATE OF DETERMINATION
OF RIGHTS, PREFERENCES,
PRIVILEGES AND RESTRICTIONS
OF
SERIES D PREFERRED STOCK
OF
ABAXIS, INC.
A California corporation
(Pursuant to Section 401 of the
California General Corporation Law)
Clinton H. Severson and Donald Stewart certify that:
1. They are the duly elected and acting President and Secretary,
respectively, of Abaxis, Inc. (the "Corporation").
2. Pursuant to authority given by said Corporation's Articles of
Incorporation, the Board of Directors of said Corporation has duly adopted the
following recitals and resolutions:
WHEREAS, the Articles of Incorporation of the Corporation provide for a
class of its authorized shares known as Preferred Stock, comprising Five Million
(5,000,000) shares issuable from time to time in one or more series;
WHEREAS, the Board of Directors of this Corporation is authorized to fix
the number of shares of any series of Preferred Stock; to determine the
designation of any such series, and to determine or alter the rights,
preferences, privileges, and restrictions granted to or imposed upon any wholly
unissued series of Preferred Stock including but not limited to the dividend
rights, dividend rate and conversion rights, and to fix, alter or reduce the
number of shares constituting any such series (but not below the number of
shares then outstanding); and
WHEREAS, it is the desire of the Board of Directors of the Corporation,
pursuant to its authority under the Articles of Incorporation, to fix the
rights, preferences, privileges, restrictions and other matters relating to a
series of Preferred Stock to be designated Series D Preferred Stock;
NOW THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide for the issue of a new series of Preferred Stock of the Corporation and
does hereby fix the rights, preferences, privileges, restrictions and other
matters relating to such series of Preferred Stock as follows:
1. Designation. There shall be a series of Preferred Stock, which shall
comprise Ten Thousand (10,000) shares and shall be designated "Series D
Preferred Stock." As used hereafter, the terms "Preferred Stock" and "Preferred
Shares" without designation shall refer to shares of Series D Preferred Stock.
2. Dividends. Each holder of record of a share of Series D Preferred
Stock shall be entitled to receive, out of any assets at the time legally
available therefore, a dividend of Seventy
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Dollars ($70.00) per share per annum, payable on April 1st and September 1st of
each year but which amount shall be prorated to the extent a share of Preferred
Stock is issued and outstanding for less than such biannual period. The right to
the dividends on the Series D Preferred Stock described in the preceding
sentence shall be cumulative. The Corporation will pay such dividends either in
cash or by issuing shares of the Corporation's Common Stock ("Common Stock")
having the Market Value (as defined below) equal to such dividends, at the
option of the Board of Directors of the Corporation. If the Corporation elects
to pay such dividends by issuing Common Stock, the "Market Value" of such Common
Stock will be the average of the closing sale prices of the Corporation's Common
Stock as reported on the Nasdaq National Market System for the Five (5) trading
days prior to the record date for such dividend. A holder of Series D Preferred
Stock who would otherwise be entitled to receive a fraction of a share of Common
Stock under this Section 2 (taking into account all shares of Series D Preferred
Stock held by such holder) shall receive, in lieu thereof, an amount equal to
the product of such fractional interest multiplied by the Market Value. No
dividends or distributions shall be made with respect to the Common Stock unless
at the same time an equivalent dividend with respect to the Series D Preferred
Stock has been paid or declared and set apart for payment.
3. Conversion Rights. The holders of Series D Preferred Stock shall have
conversion rights as follows:
(a) Right to Convert. Each share of Series D Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
filing of this Certificate of Designation, at the office of the Corporation or
any transfer agent for the Series D Preferred Stock, into Common Stock as more
fully described below. The number of shares of fully paid and nonassessable
Common Stock into which each share of Series D Preferred Stock may be converted
shall be determined by dividing One Thousand Dollars $1,000.00 by the Series D
Conversion Price (as hereinafter defined) in effect at the time of conversion.
The Series D Conversion Price shall initially be Seven Dollars ($7.00), as
adjusted to reflect any stock dividends on, or stock splits or stock
combinations of, the Common Stock after the date of filing this Certificate of
Designation (the "Series D Conversion Price").
(b) Automatic Conversion. Each share of Series D Preferred Stock
shall be converted into Common Stock automatically upon the earlier to occur of:
(i) September 27 , 2005; provided however, that if the closing
sales price of the Common Stock as reported on the Nasdaq National Market System
is less than $7.00 (as adjusted to reflect any stock dividends, stock splits,
stock combinations or recapitalizations) for each of the twenty (20) consecutive
trading days immediately prior to and including September 27, 2005, then the
Series D Preferred Stock will convert into Common Stock automatically upon the
earlier to occur of (A) September 27, 2006 or (B) the event specified in Section
3(b)(ii), below; and provided further, however, that if the closing sales price
of the Common Stock as reported on the Nasdaq National Market System is $7.00 or
greater for any twenty (20) consecutive trading days after the first anniversary
of the filing of this Certificate of Designation, then the one year extension of
the automatic conversion date provided for in subsection (i)(A) above will not
apply and the conversion date will remain the earlier to occur of (A) September
27, 2005 or (B) the event specified in Section 3(b)(ii), below; or
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(ii) on the first date following the first anniversary of the
date of the filing of this Certificate of Designation that the closing sales
price of the Common Stock as reported on the Nasdaq National Market System has
exceeded $14.00 (as adjusted to reflect any stock dividends, stock splits, stock
combinations or recapitalizations) for the twenty (20) consecutive trading days
immediately prior to such date.
(c) No Fractional Shares. No fractional shares of Common Stock or
script shall be issued upon conversion of shares of Series D Preferred Stock. If
more than one share of Series D Preferred Stock shall be surrendered for
conversion at any one time by the same holder, the number of full shares of
Common Stock issuable upon conversion thereof shall be computed on the basis of
the aggregate number of shares of Series D Preferred Stock so surrendered. In
lieu of any fractional shares of Common Stock that would otherwise be issuable
upon conversion of any shares of Series D Preferred Stock, the Corporation shall
pay a cash adjustment in respect to such fractional interest equal to the
product of such fractional interest multiplied by the Series D Conversion Price.
(i) Mechanics of Conversion. Before any holder of Series D
Preferred Stock shall be entitled to convert the same into Common Stock, and
before the Corporation shall be obligated to issue certificates for shares of
Common Stock upon the automatic conversion of the Series D Preferred Stock as
set forth in Section 3(b) hereof, such holder shall surrender the certificate or
certificates therefor, duly endorsed in blank or accompanied by proper
instruments of transfer, at the principal office of the Corporation or of any
transfer agent for the Series D Preferred Stock, and, if such conversion is
voluntary pursuant to Section 3(a), shall give written notice to the Corporation
at such office that such holder elects to convert the same and shall state in
writing therein the name or names in which such holder wishes the certificate or
certificates for Common Stock to be issued. As soon as practicable thereafter,
the Corporation shall issue and deliver at such office to such holder's nominee
or nominees, certificates for the number of whole shares of Common Stock to
which such holder shall be entitled. If such conversion is pursuant to Section
3(a), such conversion shall be deemed to have been made as of the date of such
surrender of the Series D Preferred Stock to be converted, and the person or
persons entitled to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
on said date.
(ii) Capital Adjustments. In case the Corporation shall at any
time (A) subdivide the outstanding Common Stock, or (B) issue a stock dividend
on its outstanding Common Stock, the number of shares of Common Stock issuable
upon conversion of the Series D Preferred Stock immediately prior to such
subdivision or the issuance of such stock dividend shall be proportionately
increased by the same ratio as the subdivision or dividend (with appropriate
decreases in the Series D Conversion Price). In case the Corporation shall at
any time combine its outstanding Common Stock, the number of shares of Common
Stock issuable upon conversion of the Series D Preferred Stock immediately prior
to such combination shall be proportionately decreased by the same ratio as the
combination (with appropriate increases in the Series D Conversion Price). All
such adjustments described herein shall be effective at the close of business on
the date of such subdivision, stock dividend or combination, as the case may be.
(iii) Reorganization. In case of any capital reorganization
(other than in connection with a merger or other reorganization in which the
Corporation is not the
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continuing or surviving entity), or any reclassification of the Common Stock of
the Corporation, the Series D Preferred Stock shall thereafter be convertible
into that number of shares of stock or other securities or property to which a
holder of the number of shares of Common Stock of the Corporation deliverable
upon conversion of the shares of Series D Preferred Stock immediately prior to
such reorganization or recapitalization would have been entitled to receive upon
such reorganization or reclassification. In any such case, appropriate
adjustment (as determined by the Board of Directors) shall be made in the
application of the provisions herein set forth with respect to the rights and
interests thereafter of the holders of Series D Preferred Stock, such that the
provisions set forth herein shall thereafter be applicable, as nearly as
reasonably may be, in relation to any share of stock or other property
thereafter deliverable upon the conversion.
(iv) Reservation of Stock. The Corporation shall at all times
reserve and keep available, out of its authorized but unissued Common Stock,
solely for the purpose of effecting the conversion of the Series D Preferred
Stock, the full number of shares of Common Stock deliverable upon the conversion
of all Series D Preferred Stock from time to time outstanding. The Corporation
shall from time to time (subject to obtaining necessary director and shareholder
action), in accordance with the laws of the State of California, increase the
authorized amount of its Common Stock if at any time the authorized number of
shares of Common Stock remaining unissued shall not be sufficient to permit the
conversion of all of the shares of Series D Preferred Stock at the time
outstanding.
4. Voting Rights. The holders of the Series D Preferred Stock shall have
no voting power whatsoever, except as otherwise provided by the General
Corporation Law of the State of California ("California Law"), and no holder of
Series D Preferred Stock shall vote or otherwise participate in any proceeding
in which actions shall be taken by the Corporation or the stockholders thereof
or be entitled to notification as to any meeting of the stockholders (except to
the extent the a holder of Series D Preferred Stock is also a holder of Common
Stock).
To the extent that under California Law the vote of the holders of the
Series D Preferred Stock, voting separately as a class, is required to authorize
a given action of the Corporation, the affirmative vote or consent of the
holders of at least a majority of the shares of Series D Preferred Stock
represented at a duly held meeting at which a quorum is present or by written
consent of a majority of the number of shares of outstanding Series D Preferred
Stock (except as otherwise may be required under California Law) shall
constitute the approval of such action by the class. To the extent that under
California Law the holders of the Series D Preferred Stock are entitled to vote
on a matter with holders of Common Stock, voting together as one (1) class, each
share of Series D Preferred Stock shall be entitled to a number of votes equal
to the number of shares of Common Stock into which it is then convertible using
the record date for the taking of such vote of stockholders as the date as of
which the Series D Conversion Price is calculated. Holders of the Series D
Preferred Stock also shall be entitled to notice of all shareholder meetings or
written consents with respect to which they would be entitled to vote, which
notice would be provided pursuant to the Corporation's by-laws and applicable
statutes.
RESOLVED FURTHER, that the President or any Vice President, and the
Secretary or any Assistant Secretary, of the Corporation be, and hereby are,
authorized and directed to execute, acknowledge, file and record a Certificate
of Determination of preferences in accordance with the foregoing resolutions and
the provisions of California law.
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5. The authorized number of shares of Series D Preferred Stock is Ten
Thousand (10,000), none of which has been issued.
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The undersigned declare under penalty of perjury under the laws of the
State of California that the matters set forth in the foregoing Certificate are
true and correct of their own knowledge. Executed at Sunnyvale, California on
September __, 2000.
/s/ Clinton H. Severson
------------------------
Clinton H. Severson
President
/s/ Donald Stewart
------------------------
Donald Stewart
Secretary
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