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EXHIBIT 4.1
SHELDAHL, INC.
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES G
CONVERTIBLE PREFERRED STOCK
Pursuant to Section 302A.401 of the Minnesota Business Corporation Act:
I, the undersigned officer of Sheldahl, Inc., a Minnesota corporation
(the "Company"), in accordance with the provisions of Section 302A.401, DO
HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Articles of Incorporation of the Company, the Board of Directors on
____________, 200_ adopted the following resolution creating a series of Eleven
Thousand Three Hundred Three (11,303) shares of preferred stock designated as
Series G Convertible Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Company in accordance with the provisions of its Articles of
Incorporation, a series of preferred stock known as the Series G Convertible
Preferred Stock be, and hereby is, created and that the designation and amount
thereof and the rights and preferences of the shares of such preferred stock are
as follows:
Section 1. Designation, Amount and Par Value. The series of preferred
stock shall be designated as the Series G Convertible Preferred Stock (the
"Series G Preferred Stock"), and the number of shares so designated shall be
11,303 (which shall not be subject to increase without the prior written consent
of all of the holders of Series G Preferred Stock then outstanding). Each share
of Series G Preferred Stock shall have a par value of $1.00 per share and a
stated value of $1,000 per share (the "Stated Value").
Section 2. Dividends and Redemption.
(a) (i) Each Holder of Series G Preferred Stock of record as of the
date fifteen calendar days prior to each anniversary of the Original Issue Date
(the "Record Date") shall receive annually on such anniversary of the Original
Issue Date, or if such date is not a Business Day, the first Business Day
following such anniversary of the Original Issue Date, (the "Dividend Payment
Date"),with respect to shares held on such Record Date by such holder,
cumulative dividends payable in shares of the Company's Common Stock (as defined
in Section 6) in an amount equal to a fraction, of which the numerator is
11.0594587% of the Stated Value of the
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shares of the Series G Preferred Stock held on such Record Date by such holder
and of which the denominator is the Dividend Conversion Price (as defined in
Section 5(c)(i)) on such Record Date or, at the Company's option for dividends
accruing after the second anniversary of the Original Issue Date, cash in an
amount equal to 11.0594587% of the Stated Value of the Series G Preferred Stock
held on such Record Date by such holder.
(ii) In connection with any conversion of Series G Preferred
Stock, each holder of Series G Preferred Stock that provides a Holder Conversion
Notice (as defined below) to the Company in the case of conversion at the
holder's option, and each holder of record of Series G Preferred Stock in the
case of conversion at the Company's option shall receive, on each Holder
Conversion Date (as defined in Section 5(a)(i)), or Company Conversion Date (as
defined in Section 5 (a)(ii)), as the case may be, with respect to each share
converted, (x) all accrued, but unpaid dividends with respect to each preceding
Dividend Payment Date, calculated as provided in Section 2(a)(i), and (y) all
accrued, but unpaid dividends with respect to the period commencing with the day
after the most recent Dividend Payment Date and ending on the Conversion Date
(the "Period"), payable in shares of the Company's Common Stock in an amount
equal to a fraction, of which the numerator is 11.0594587% of the Stated Value
of the shares of the Series G Preferred Stock held on such Conversion Date by
such holder multiplied by the Pro Rata Dividend Amount (as defined below in this
Section 2(a)(ii)) and of which the denominator is the Dividend Conversion Price
(as defined in Section 5(c)(i)) on such Conversion Date or, at the Company's
option for dividends accruing after the second anniversary of the Original Issue
Date, cash in an amount equal to 11.0594587% of the Stated Value of the Series G
Preferred Stock held on such Conversion Date by such holder multiplied by the
Pro Rata Dividend Amount (as defined below in this Section 2(a)(ii)). The "Pro
Rata Dividend Amount" shall equal a fraction of which the numerator is the
number of days elapsed during the Period and of which the denominator is 360.
(iii) Dividends on the Preferred Stock shall be calculated on
the basis of a 360-day year, shall accrue daily commencing on the Original Issue
Date (as defined in Section 6), and shall be deemed to accrue from such date
whether or not earned or declared and whether or not there are profits, surplus
or other funds of the Company legally available for the payment of dividends.
(iv) No payment shall be made pursuant to this Section 2 until
all accrued and unpaid dividends on the Company's Series D Preferred Stock (the
"Series D Preferred Stock") the Company's Series E Preferred Stock (the "Series
E Preferred Stock") and on the Company's Series F Preferred Stock (the "Series F
Preferred Stock") previously issued by the Company for all past dividend periods
shall have been paid and all conversion notices related thereto have been
honored to the date of such payment.
(b) So long as any Series G Preferred Stock shall remain outstanding,
except with respect to the redemption or exchange of "rights" under the Rights
Agreement, dated as of June 16, 1996, between the Company and Norwest Bank
Minnesota, N.A. (the "Rights Agreement") and the Series A Junior Participating
Stock reserved for issuance in connection therewith, neither
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the Company nor any subsidiary thereof shall redeem, purchase or otherwise
acquire directly or indirectly any Junior Securities (as defined in Section 6),
nor shall the Company directly or indirectly pay or declare any dividend or make
any distribution (other than a dividend or distribution described in Section 5)
upon, nor shall any distribution be made in respect of, any Junior Securities,
nor shall any monies be set aside for or applied to the purchase or redemption
(through a sinking fund or otherwise) of any Junior Securities unless the
Company is in compliance with its obligations hereunder.
(c) In no circumstances may the Company require redemption of any
shares of Series G Preferred Stock without the holder's consent.
Section 3. Voting Rights.
Except as otherwise provided herein and as otherwise required by law,
the Series G Preferred Stock shall have no voting rights. However, so long as
any shares of Series G Preferred Stock are outstanding, the Company shall not
and shall cause its subsidiaries not to, without the affirmative vote of 75% of
the holders of the Series G Preferred Stock then outstanding, alter or change
adversely the powers, preferences or rights given to the Series G Preferred
Stock; (b) alter or amend this Certificate of Designation in a manner adverse to
the holders of Series G Preferred Stock; (c) authorize or create any class of
stock ranking as to dividends or distribution of assets upon a Liquidation (as
defined in Section 4) or otherwise senior to or pari passu with the Series G
Preferred Stock, except for the Series D Preferred Stock, the Series E Preferred
Stock and the Series F Preferred Stock; (d) amend its articles of incorporation,
bylaws or other charter documents so as to affect adversely any rights of any
holders of Series G Preferred Stock; (e) increase the authorized number of
shares of Series G Preferred Stock; or (f) enter into any agreement with respect
to the foregoing.
Section 4. Liquidation.
(a) Upon any liquidation, dissolution or winding-up of the Company,
whether voluntary or involuntary (a "Liquidation"), the holders of Series G
Preferred Stock shall receive, out of the assets of the Company, after payment
of all amounts due the holders of Series D Preferred Stock, the Series E
Preferred Stock and the Series F Preferred Stock, but before any distribution or
payment shall be made to the holders of any Junior Securities for each share of
Series G Preferred Stock, an amount equal to:
(i) the Stated Value multiplied by 2.2118022; plus
(ii) an amount equal to all accrued but unpaid dividends,
whether declared or not; minus
(iii) the product of the Per Share Market Value on the
Liquidation Adjustment Calculation Date (as defined below in this Section 4)
multiplied by the "Share Adjustment Number," which shall initially be 437.41758
(as may be adjusted for any stock splits, reverse
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stock splits or stock dividends on the Common Stock), provided, however, that
the Share Adjustment Number for each share of Series G Stock shall be reduced by
subtracting a number equal to the number of shares of Common Stock the holder
elects to surrender to the Company divided by the number of shares of Series G
Preferred Stock held by such holder. The holder shall effect such election by
surrendering the certificate or certificates representing the shares of Common
Stock the holder wishes to surrender, together with the form of election notice
attached hereto as Exhibit C.
(b) Any surrender of shares to the Company shall not be deemed
effective unless and until all amounts due under this Section 4 have been paid
to the holder thereof.
(c) If the assets of the Company shall be insufficient to pay in full
such amounts as required by this Section 4 after payment of all amounts due the
holders of the Series D Preferred Stock, the Series E Preferred Stock and the
Series F Preferred Stock then the entire assets to be distributed to the holders
of Series G Preferred Stock shall be distributed among the holders of Series G
Preferred Stock ratably in accordance with the respective amounts that would be
payable on to such holders if the maximum amounts payable thereon were paid in
full. If, and to the extent that the full amount due to the holders of the
Series G Preferred Stock for each share of Series G Preferred Stock held is not
paid on Liquidation because the assets of the Company are insufficient to pay
such full amount, the amount due to the holders of the Series G Preferred Stock
for each share of Series G Preferred Stock shall not be reduced by the Share
Adjustment Number.
(d) A sale, conveyance or disposition of all or substantially all of
the assets of the Company or the effectuation by the Company of a transaction or
series of related transactions in which more than 50% of the voting power of the
Company is disposed of, or a consolidation or merger of the Company with or into
any other company or companies shall not be treated as a Liquidation, but
instead shall be subject to the provisions of Section 5.
(e) The Company shall mail written notice of any such Liquidation after
the Board of Directors has adopted a final plan of Liquidation, but not less
than 30 days prior to any payment date stated therein, to each record holder of
Series G Preferred Stock, stating the "Liquidation Adjustment Calculation Date",
which shall be ten business days after the Board of Directors has adopted such
plan.
Section 5. Conversion.
(a) (i) Each share of Series G Preferred Stock is convertible by the
holder thereof into shares of Common Stock at the Conversion Ratio (as defined
in Section 6) in effect on the Holder Conversion Date (as defined below in this
Section (5)(a)(i)), at the option of the holder in whole or in part at any time
after the Original Issue Date. The holder shall effect conversions by
surrendering the certificate or certificates representing the shares of Series G
Preferred Stock to be converted to the Company, together with the form of
conversion notice attached hereto as Exhibit A (the "Holder Conversion Notice"),
a copy of which, notwithstanding anything herein
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to the contrary, shall also be promptly sent to the Company's transfer agent and
the Company's counsel. Each Holder Conversion Notice shall specify the number of
shares of Series G Preferred Stock to be converted and the date on which such
conversion is to be effected, which date may not be prior to the date on which
the holder delivers such Conversion Notice by facsimile (the "Holder Conversion
Date"). If no Holder Conversion Date is specified in a Holder Conversion Notice,
the Holder Conversion Date shall be the date that the Holder Conversion Notice
is deemed delivered pursuant to Section 5(h). If the holder is converting less
than all shares of Series G Preferred Stock represented by the certificate or
certificates tendered by the holder with the Holder Conversion Notice, or if a
conversion hereunder cannot be effected in full for any reason, the Company
shall promptly deliver to such holder (in the manner and within the time set
forth in Section 5(b)) a certificate for such number of shares as have not been
converted. Shares issuable upon conversion at the option of the holder in
accordance with this Section 5(a)(i) shall be deemed for all purposes to have
been issued on the applicable Holder Conversion Date. Certificates initially
issued to represent such shares shall be dated as of such Holder Conversion
Date.
(ii) If, at any time after eighteen (18) months following the Original
Issue Date, (A) the Per Share Market Value (as defined in Section 6) is greater
than $12.50 (as adjusted for stock splits, reverse stock splits and stock
dividends) for at least 30 consecutive Business Days (as defined in Section 6);
(B) the average daily trading volume of the Common Stock on the Nasdaq National
Market for such 30 consecutive Business Days exceeds 50,000 shares (as adjusted
for stock splits, reverse stock splits and stock dividends); and (C) none of the
Shares of the Company's Series D Preferred Stock, Series E Preferred Stock and
Series F Preferred Stock, or any other shares of Preferred Stock (other than the
Series G Preferred Stock) that have been issued solely to circumvent the
automatic conversion of the Series G Preferred Stock pursuant to this Section
5(a)(ii) is outstanding, then the Company may, upon 10 days notice provided
thereafter, require the conversion of all but not less than all of the then
outstanding and unconverted shares of Series G Preferred Stock at the Conversion
Ratio in effect on the Company Conversion Date (as defined below) by delivering
to the holders a notice in the form attached hereto as Exhibit B (the "Company
Conversion Notice"). Each Company Conversion Notice shall specify the date on
which such conversion is to be effected, which date may not be prior to the 10th
day after the Company delivers such Company Conversion Notice by facsimile (the
"Company Conversion Date"). If no Company Conversion Date is specified in a
Company Conversion Notice given under this Section the Company Conversion Date
shall be the 11th day after the Company Conversion Notice is deemed delivered
pursuant to Section 5(h). Nothing contained herein shall limit a holder's right
to convert any or all of the Preferred Stock held by it prior to the Company
Conversion Date. Shares issuable upon conversion at the option of the Company in
accordance with this Section 5 (a)(ii) shall be deemed for all purposes to have
been issued on the applicable Company Conversion Date. Certificates initially
issued to represent such Shares shall be dated as of such Company Conversion
Date.
(iii) In the event of any such conversion of Series G Preferred Stock,
holders thereof shall be entitled to receive dividends in accordance with
Section 2(a)(ii) hereof.
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A Holder Conversion Date and a Company Conversion Date are sometimes
referred to herein as a "Conversion Date" and a Holder Conversion Notice and a
Company Conversion Notice are sometimes referred to as a "Conversion Notice."
(b) Not later than ten Business Days after the Conversion Date and
receipt by the Company of an original share certificate representing the shares
of Series G Preferred Stock to be converted, the Company will deliver to the
holder (i) a certificate or certificates which shall be free of restrictive
legends and trading restrictions (other than those required by Section 3.1(b) of
the Purchase Agreement or as may be required by the Rights Agreement)
representing the number of shares of Common Stock being acquired upon the
conversion of shares of Series G Preferred Stock; (ii) if the Company so elects
or is required to pay accrued dividends in Common Stock, an original share
certificate representing that number of shares of Common Stock payable in
respect of accrued but unpaid dividends; (iii) if the Company so elects and is
permitted to pay accrued dividends in cash, a bank check in the amount of the
accrued but unpaid dividends; and (iv) one or more certificates representing the
number of shares of Series G Preferred Stock not converted; provided, however,
that the Company shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon conversion of any shares of Preferred Stock
until certificates evidencing such shares of Series G Preferred Stock are either
delivered for conversion to the Company or the transfer agent for the Series G
Preferred Stock or Common Stock, or the holder of such Series G Preferred Stock
notifies the Company that such certificates have been lost, stolen or destroyed
and provides a bond (or other adequate security) reasonably satisfactory to the
Company to indemnify the Company from any loss incurred by it in connection
therewith.
(c) (i) The conversion price for each share of Series G Preferred Stock
(the "Conversion Price") on any Conversion Date shall be $2.770558 (the "Initial
Conversion Price"), as adjusted from time to time as provided in this Section
5(c). The Dividend Conversion Price shall initially be $3.5384827 as adjusted
from time to time as provided in this Section 5(c).
(ii) If the Company, at any time while any shares of Series G
Preferred Stock are outstanding, (a) shall pay a stock dividend or otherwise
make a distribution or distributions on shares of its Junior Securities payable
in shares of Common Stock; (b) subdivide outstanding shares of Common Stock into
a larger number of shares; (c) combine outstanding shares of Common Stock into a
smaller number of shares; or (d) issue by reclassification of shares of Common
Stock any shares of capital stock of the Company, the Conversion Price and the
Dividend Conversion Price shall each be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding before such
event and of which the denominator shall be the number of shares of Common Stock
outstanding after such event. Any adjustment made pursuant to this Section
5(c)(ii) shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
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(iii) If the Company, at any time while any shares of Series G
Preferred Stock are outstanding, shall issue rights or warrants to all holders
of Common Stock entitling them to subscribe for or purchase shares of Common
Stock at a price per share less than the Per Share Market Value of Common Stock
at the record date mentioned below, the Conversion Price and the Dividend
Conversion Price shall each be multiplied by a fraction, of which the
denominator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding on the date of issuance of such rights or warrants
plus the number of additional shares of Common Stock offered for subscription or
purchase, and of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding on the date of issuance of
such rights or warrants plus the number of shares which the aggregate offering
price of the total number of shares so offered would purchase at such Per Share
Market Value. Such adjustment shall be made whenever such rights or warrants are
issued, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights or warrants.
However, upon the expiration of any right or warrant to purchase Common Stock
the issuance of which resulted in an adjustment in the Conversion Price and
Dividend Conversion Price pursuant to this Section 5(c)(iii), if any such right
or warrant shall expire and shall not have been exercised, the Conversion Price
and Dividend Conversion Price shall immediately upon such expiration be
recomputed and effective immediately upon such expiration be increased to the
price which it would have been (but reflecting any other adjustments in the
Conversion Price and Dividend Conversion Price made pursuant to the provisions
of this Section 5 after the issuance of such rights or warrants) had the
adjustment of the Conversion Price and Dividend Conversion Price made upon the
issuance of such rights or warrants been made on the basis of offering for
subscription or purchase only that number of shares of Common Stock actually
purchased upon the exercise of such rights or warrants actually exercised.
(iv) If the Company, at any time while shares of Series G
Preferred Stock are outstanding, shall distribute to all holders of Common Stock
(and not to holders of Series G Preferred Stock) evidences of its indebtedness
or assets or rights or warrants to subscribe for or purchase any security
(excluding those referred to in Sections 5(c)(ii) and (iii) above), then in each
such case the Conversion Price or the Dividend Conversion Price at which each
share of Series G Preferred Stock shall thereafter be convertible shall be
determined by multiplying the Conversion Price or the Dividend Conversion Price
in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the Per Share Market Value of Common Stock determined as of
the record date mentioned above, and of which the numerator shall be such Per
Share Market Value of the Common Stock on such record date less the then fair
market value at such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of Common Stock
as determined by the Board of Directors in good faith; provided, however, that
in the event of a distribution exceeding ten percent (10%) of the net assets of
the Company, such fair market value shall be determined by a nationally
recognized or major regional investment banking firm or firm of independent
certified public accountants of recognized standing (which may be the firm that
regularly examines the financial statements of the Company) (an "Appraiser")
selected in good faith by the holders of a majority in interest of
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the shares of Series G Preferred Stock then outstanding and reasonably
acceptable to the Company. In either case the adjustments shall be described in
a statement provided to the holders of Series G Preferred Stock of the portion
of assets or evidences of indebtedness so distributed or such subscription
rights applicable to one share of Common Stock. Such adjustment shall be made
whenever any such distribution is made and shall become effective immediately
after the record date mentioned above.
(v) All calculations under this Section 5 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be.
(vi) Whenever the Conversion Price and the Dividend Conversion
Price are adjusted pursuant to Section 5(c)(ii),(iii) or (iv), the Company shall
promptly mail to each holder of Series G Preferred Stock, a notice setting forth
the Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.
(vii) In case of any reclassification of the Common Stock, any
consolidation or merger of the Company with or into another person pursuant to
which the Company will not be the surviving entity, the sale or transfer of all
or substantially all of the assets of the Company or any compulsory share
exchange pursuant to which the Common Stock is converted into other securities,
cash or property, the holders of Series G Preferred Stock then outstanding shall
convert such shares only into the shares of stock and other securities, cash and
property receivable upon or deemed to be held by holders of Common Stock
following such reclassification, consolidation, merger, sale, transfer or share
exchange, and the holders of the Series G Preferred Stock shall be entitled upon
such event to receive such amount of securities, cash or property as the shares
of the Common Stock of the Company into which such shares of Series G Preferred
Stock could have been converted immediately prior to such reclassification,
consolidation, merger, sale, transfer or share exchange would have been
entitled. The terms of any such consolidation, merger, sale, transfer or share
exchange shall include such terms so as to continue to give to the holder of
Series G Preferred Stock the right to receive the securities, cash or property
set forth in this Section 5(c)(vii) upon any conversion or redemption following
such consolidation, merger, sale, transfer or share exchange. This provision
shall similarly apply to successive reclassifications, consolidations, mergers,
sales, transfers or share exchanges.
(viii) If:
A. the Company shall declare a dividend (or any
other distribution) on its Common Stock; or
B. the Company shall declare a special
nonrecurring cash dividend on or a
redemption of its Common Stock; or
C. the Company shall authorize the granting to
all holders of the Common Stock rights or
warrants to subscribe for or purchase any
shares of capital stock of any class or of
any rights; or
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D. the approval of any stockholders of the
Company shall be required in connection with
any reclassification of the Common Stock of
the Company, any consolidation or merger to
which the Company is a party, any sale or
transfer of all or substantially all of the
assets of the Company, or any compulsory
share exchange whereby the Common Stock is
converted into other securities, cash or
property; or
E. the Company shall authorize the voluntary or
involuntary dissolution, liquidation or
winding up of the affairs of the Company;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Series G Preferred Stock, and shall cause to be
mailed to the holders of Series G Preferred Stock at their last addresses as
they shall appear upon the stock books of the Company, at least 20 calendar days
prior to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to
be determined; or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided, however, that
the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice.
(d) The Company will at all times reserve and keep available out of its
authorized and unissued Common Stock solely for the purpose of issuance upon
conversion of Series G Preferred Stock and payment of dividends on Series G
Preferred Stock, each as herein provided, free from preemptive rights or any
other actual or contingent purchase rights of persons other than the holders of
Series G Preferred Stock, not less than such number of shares of Common Stock as
shall be issuable, upon the conversion of all outstanding shares of Series G
Preferred Stock and payment of dividends hereunder. All shares of Common Stock
that shall be so issuable shall, upon issue, be duly authorized, validly issued
and fully paid, nonassessable and freely tradable (except as may be required
pursuant to Section 3.1(b) of the Purchase Agreement).
(e) Upon a conversion hereunder the Company shall not be required to
issue stock certificates representing fractions of shares of Common Stock, but
may if otherwise permitted, make a cash payment in respect of any final fraction
of a share based on the Per Share Market Value at such time. If the Company
elects not, or is unable, to make such a cash payment, the holder of a share of
Preferred Stock shall be entitled to receive, in lieu of the final fraction of a
share, one whole share of Common Stock.
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(f) The issuance of certificates for shares of Common Stock on
conversion of Series G Preferred Stock shall be made without charge to the
holders thereof for any documentary stamp or similar taxes that may be payable
in respect of the issue or delivery of such certificates, provided that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the issuance and delivery of any such certificate upon
conversion in a name other than that of the holder of such shares of Series G
Preferred Stock so converted and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
(g) Shares of Series G Preferred Stock converted into Common Stock
shall be canceled and shall have the status of authorized but unissued shares of
undesignated stock.
(h) Any and all notices or other communications or deliveries to be
provided by the holders of the Series G Preferred Stock hereunder shall be in
writing and delivered personally, by facsimile, sent by a nationally recognized
overnight courier service or sent by certified or registered mail, postage
prepaid, addressed to the attention of the Chief Executive Officer of the
Company at the facsimile telephone number or address of the principal place of
business of the Company as set forth in the Purchase Agreement. Any and all
notices or other communications or deliveries to be provided by the Company
hereunder shall be in writing and delivered personally, by facsimile, sent by a
nationally recognized overnight courier service or sent by certified or
registered mail, postage prepaid, addressed to each holder of Series G Preferred
Stock at the facsimile telephone number or address of such holder appearing on
the books of the Company, or if no such facsimile telephone number or address
appears, at the principal place of business of the holder. Any notice or other
communication or deliveries hereunder shall be deemed given and effective on the
earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Section prior to 11:59 p.m. (Central Time) on such date of transmission; (ii)
four days after deposit in the United States mails; (iii) the Business Day
following the date of mailing, if sent by nationally recognized overnight
courier service; or (iv) upon actual receipt by the party to whom such notice is
required to be given.
Section 6. Definitions. For the purposes hereof, the following terms
shall have the following meanings:
a) "Affiliate" has the meaning set forth in Section 302A.011 of the
Minnesota Business Corporation Act.
b) "Associate" has the meaning set forth in Section 302A.011 of the
Minnesota Business Corporation Act.
c) "Appraiser" has the meaning set forth in Section 5(c)(iv).
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d) "Business Day" means any day except a day on which the Nasdaq
National Market, the NYSE or the AMEX, as applicable, if the Common
Stock is listed for trading or quoted thereon at such time, is closed,
and if the Common Stock is not listed for trading or quoted on any of
the Nasdaq National Market, the NYSE or the AMEX at such time, then
"Business Day" shall mean any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions
in the State of Minnesota generally are authorized or required by law
or other government actions to close.
e) "Common Stock" means the common stock, $.25 par value per share, of
the Company and stock of any other class into which such shares may
hereafter have been reclassified or changed.
f) "Company Conversion Date" has the meaning set forth in
Section 5(a)(ii).
g) "Company Conversion Notice" has the meaning set forth in
Section 5(a)(ii).
h) "Conversion Date" has the meaning set forth in Section 5(a)(iii).
i) "Conversion Notice" has the meaning set forth in Section 5(a)(iii).
j) "Conversion Price" has the meaning set forth in Section 5(c)(i).
k) "Conversion Ratio" with respect to a share of Series G Preferred
Stock means, at any time, a fraction, of which the numerator is the
Stated Value and the denominator is the Conversion Price at such time.
l) "Dividend Conversion Price" has the meaning set forth in
Section 5(c)(i).
m) "Dividend Payment Date" has the meaning set forth in
Section 2(a)(i).
n) "Holder Conversion Date" has the meaning set forth in
Section 5(a)(i).
o) "Holder Conversion Notice" has the meaning set forth in
Section 5(a)(i).
p) "Initial Conversion Price" has the meaning set forth in
Section 5(c)(i).
q) "Junior Securities" means the Common Stock and all equity securities
(other than the Series D, Series E Preferred Stock and Series F
Preferred Stock) of the Company.
r) "Liquidation" has the meaning set forth in Section 4.
s) "Liquidation Adjustment Calculation Date" has the meaning set forth
in Section 4.
t) "Original Issue Date" means the date of the first issuance of any
shares of the Series G Preferred Stock regardless of the number of
transfers of any particular shares of Series G Preferred Stock and
regardless of the number of certificates which may be issued to
evidence such Preferred Stock.
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u) "Per Share Market Value" means on any particular date (a) the
closing bid price per share of the Common Stock on such date on the
Nasdaq National Market or other stock exchange or quotation system on
which the Common Stock is then listed or quoted or, if there is no such
closing bid price on such date, then the closing bid price on such
exchange or quotation system on the date nearest preceding such date
for which there is such a closing bid price; or (b) if the Common Stock
is not listed or quoted then on the Nasdaq National Market or any stock
exchange or quotation system, the closing bid price for a share of
Common Stock in the over-the-counter market, as reported by the Nasdaq
National Market, Bloomberg, L.P. or in the National Quotation Bureau
Incorporated or similar organization or agency succeeding to its
functions of reporting prices) at the close of business on such date;
or (c) if closing bid prices for the Common Stock are not then reported
by the Nasdaq National Market, Bloomberg, L.P. or in the National
Quotation Bureau Incorporated (or similar organization or agency
succeeding to its functions of reporting prices), then the average of
the "Pink Sheet" quotes for the relevant conversion period, as
determined in good faith by the holder; or (d) if the Common Stock is
not then publicly traded the fair market value of a share of Common
Stock as determined by an Appraiser mutually acceptable to the holders
and the Company.
v) "Period" has the meaning set forth in Section 2(a)(ii).
w) "Person" means a corporation, an association, a partnership,
organization, a business, an individual, a government or political
subdivision thereof or a governmental agency.
x) "Pro Rata Dividend Amount" has the meaning set forth in
Section 2(a)(ii).
y) "Purchase Agreement" means the Stock Purchase Agreement, dated as of
November 10, 2000, among the Company and the original holders of the
Series G Preferred Stock.
z) "Record Date" has the meaning set forth in Section 2(a)(i).
aa) "Rights Agreement" has the meaning set forth in Section 2 (b).
ab) "Series G Preferred Stock" has the meaning set forth in Section 1.
ac) "Stated Value" has the meaning set forth in Section 1.
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IN WITNESS WHEREOF, I have executed and subscribed this Certificate and
do affirm the foregoing as true under the penalties of perjury this ___ day of
_________, 200_.
SHELDAHL, INC.
By
---------------------------
Jill D. Burchill
Its Chief Financial Officer
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EXHIBIT A
NOTICE OF CONVERSION
AT THE ELECTION OF HOLDER
(To be Executed by the Registered Holder
in order to Convert Shares of Series G Preferred Stock)
The undersigned hereby elects to convert the number of shares of Series G
Convertible Preferred Stock indicated below, into the number of shares of Common
Stock, par value $.25 per share (the "Common Stock"), of Sheldahl, Inc. (the
"Company") indicated below, as of the date written below. If shares are to be
issued in the name of a person other than undersigned, the undersigned will pay
all transfer taxes payable with respect thereto and is delivering herewith such
certificates and opinions as reasonably requested by the Company in accordance
therewith. No fee will be charged to the holder for any conversion, except for
such transfer taxes, if any.
Conversion calculations:
---------------------------------------------------
Date to Effect Conversion
---------------------------------------------------
Number of shares of Series G Preferred Stock
to be Converted
---------------------------------------------------
Number of shares of Common Stock to be Issued
Applicable Conversion Price
Signature
Name
Address
<PAGE> 15
EXHIBIT B
NOTICE OF CONVERSION AT
THE ELECTION OF THE COMPANY
Sheldahl, Inc. (the "Company") hereby represents and warrants that the
conditions precedent to a Conversion at the option of the Company pursuant to
Section 5(a)(ii) have been satisfied and therefore hereby notifies the addressee
hereof that the Company hereby elects to exercise its right to convert [ ]
shares of its Series G Convertible Preferred Stock (the "Preferred Stock") held
by the Holder into shares of Common Stock, par value $.25 per share (the "Common
Stock") of the Company according to the terms hereof, as of the date written
below. No fee will be charged to the Holder for any conversion hereunder, except
for such transfer taxes, if any which may be incurred by the Company if shares
are to be issued in the name of a person other than the person to whom this
notice is addressed.
Conversion calculations:
---------------------------------------------------
Date to Effect Conversion
Number of shares of Preferred Stock to be Converted
Number of shares of Common Stock to be Issued
Applicable Conversion Price
Name of Holder
Address of Holder
<PAGE> 16
EXHIBIT C
NOTICE OF ELECTION
TO SURRENDER COMMON STOCK
(To be Executed by the Registered Holder)
The undersigned hereby elects to surrender to the Company ____ shares of Common
Stock, par value $.25 per share (the "Common Stock"), of Sheldahl, Inc. (the
"Company") pursuant to Section 4 of the Series G Convertible Preferred
Certificate of Designation.
437.533805 (as may be adjusted for any stock splits, reverse stock splits or
stock dividends on the Common Stock occurring after the filing of the Series G
Certificate of Designation)
minus
(_____ shares of Common Stock surrendered
divided by
_____ shares of Series G Convertible Preferred Stock held)
equals the Share Adjustment Number ______.
Signature
Name
Address
