Phone: (503) 986-2200
Fax: (503) 378-4381 ARTICLES OF AMENDMENT - BUSINESS/PROFESSIONAL/NONPROFIT
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Secretary of State CHECK THE APPROPRIATE BOX BELOW: For office
Corporation Division |X| BUSINESS/PROFESSIONAL CORPORATION use only
255 Capitol St. NE, Suite 151 (Complete only 1, 2, 3, 4, 6, 7)
Salem, OR 97310-1327 |_| NONPROFIT CORPORATION
(Complete only 1, 2, 3, 5, 6, 7)
Registry Number: 165129-15
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Attach Additional Sheet if Necessary
Please Type or Print Legibly in BLACK Ink
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1) NAME OF CORPORATION PRIOR TO AMENDMENT: KEY TECHNOLOGY, INC.
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2) STATE THE ARTICLE NUMBER(S) AND SET FORTH THE ARTICLE(S) AS IT IS AMENDED TO
READ. (Attach a separate sheet if necessary.) SEE EXHIBIT A AND EXHIBIT B
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ATTACHED HERETO.
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3) THE AMENDMENT WAS ADOPTED ON: EXHIBIT A - JANUARY 6, 2000; EXHIBIT B -
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APRIL 11, 2000.
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(If more than one amendment was adopted, identify the date of adoption of
each amendment.)
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BUSINESS/PROFESSIONAL CORPORATION ONLY
4) CHECK THE APPROPRIATE STATEMENT
|_| Shareholder action was required to adopt the amendment(s). The vote was
as follows:
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Class or Number of Number of Number of Number of
series of shares votes entitled votes cast votes cast
shares outstanding to be cast FOR AGAINST
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|X| Shareholder action was not required to adopt the amendment(s). The
amendment(s) was adopted by the board of directors without shareholder
action.
|_| The corporation has not issued any shares of stock. Shareholder action
was not required to adopt the amendment(s). The amendment(s) was adopted by
the incorporators or by the board of directors.
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NONPROFIT CORPORATION ONLY
5) CHECK THE APPROPRIATE STATEMENT
|_| Membership approval was not required. The amendment(s) was approved by
a sufficient vote of the board of directors or incorporators.
|_| Membership approval was required. The membership vote was as follows:
-------------------------------------------------------------------------------
Class(es) Number of Number of Number of Number of
entitled to vote members votes entitled to votes cast votes cast
shares entitled to vote be cast FOR AGAINST
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6) EXECUTION
Printed Name Signature Title
RONALD L. GREENMAN /S/ RONALD L. GREENMAN ASSISTANT SECRETARY
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7) CONTACT NAME DAYTIME PHONE NUMBER-INCLUDING AREA CODE
RONALD L. GREENMAN (503) 802-2006
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CR113(Rev.5/96)
004002\00131\354025 V001
<PAGE>
CERTIFICATE OF DESIGNATION
SERIES B CONVERTIBLE PREFERRED STOCK
KEY TECHNOLOGY, INC.
Key Technology, Inc., an Oregon corporation (the "Corporation"),
certifies that pursuant to the authority contained in Article II of its Restated
Articles of Incorporation, and in accordance with the provisions of Section
60.134 of the Oregon Revised Statutes, its Board of Directors has adopted the
following resolution creating a series of its $.01 par Preferred Stock:
RESOLVED, that, pursuant to authority conferred upon the Board of
Directors by the Articles of Incorporation of the Corporation, the Board of
Directors hereby authorizes the issuance of Series B Convertible Preferred Stock
of the Corporation and hereby designates, pursuant to Section 60.134 of the
Oregon Revised Statutes, the rights, preferences, privileges, restrictions and
other matters relating to such Series B Preferred Stock as follows
1. DESIGNATION AND AMOUNT. 1,575,849 shares of the Corporation's
authorized Preferred Stock are hereby designated as the Series B Convertible
Preferred Stock (the "Series B Preferred Stock").
2. DIVIDENDS. No dividends shall be declared and set aside for any
shares of the Series B Preferred Stock except in the event that the Board of
Directors of the Corporation shall declare a dividend payable upon the then
outstanding shares of the Common Stock of the Corporation, in which event the
holders of the Series B Preferred Stock shall be entitled to the amount of
dividends per share of Series B Preferred Stock as would be declared payable on
the largest number of whole shares of Common Stock into which each share of
Series B Preferred Stock held by each holder thereof could be converted pursuant
to the provisions of Section 5 hereof (such number determined as of the record
date for the determination of holders of Common Stock entitled to receive such
dividend).
3. LIQUIDATION, DISSOLUTION OR WINDING UP
3.1 PREFERENCE. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, holders of each
share of Series B Preferred Stock shall be entitled to be paid first out of the
assets of the Corporation available for distribution to holders of the
Corporation's capital stock of all classes (whether such assets are capital,
surplus or earnings) before any sums shall be paid or any assets distributed
among the holders of Common Stock, an amount equal to Ten dollars ($10) per
share of Series B Preferred Stock plus an amount equal to all accrued and unpaid
dividends thereon, if any, computed up to and including the date full payment
shall be tendered to the holders of the Series B Preferred Stock with respect to
such liquidation, dissolution or winding up.
If the assets of the Corporation shall be insufficient to permit the
payment in full to holders of the Series B Preferred Stock of the amount thus
distributable, then the entire assets of
<PAGE>
the Corporation available for such distribution shall be distributed ratably
among the holders of the Series B Preferred Stock.
3.2 DISTRIBUTIONS OTHER THAN CASH. Whenever the distribution
provided for in this Section 3 shall be paid in property other than cash, the
value of such distribution shall be the fair market value of such property as
determined in good faith by the Board of Directors of the Corporation.
4. VOTING POWER. Except as otherwise required by law, each holder of
Series B Preferred Stock shall be entitled to vote on all matters and shall be
entitled to that number of votes equal to the number of votes that would be
accorded to the largest number of whole shares of Common Stock into which such
holder's shares of Series B Preferred Stock could be converted, pursuant to the
provisions of Section 5 of this Certificate, at the record date for the
determination of shareholders entitled to vote on such matter or, if no such
record date is established, at the date such vote is taken or any written
consent of shareholders is solicited. The holders of shares of Series B
Preferred Stock and Common Stock shall be entitled to vote together as a single
class on all matters. The holders of Series B Preferred Stock shall not be
entitled to vote as a separate class or voting group on any plan of merger.
5. CONVERSION RIGHTS. The holders of the Series B Preferred Stock shall
have the following conversion rights:
5.1 GENERAL. Subject to and in compliance with the provisions of
this Section 5, any shares of Series B Preferred Stock may, at the option of the
holder, be converted at any time or from time to time into fully paid and
nonassessable shares (calculated as to each conversion to the largest whole
share) of Common Stock. The number of shares of Common Stock to which a holder
of Series B Preferred Stock shall be entitled upon conversion shall be the
product obtained by multiplying the appropriate Applicable Conversion Rate
(determined as provided in Sections 5.3, 5.4 and 5.5 by the number of shares of
Series B Preferred Stock being converted.
5.2 MANDATORY CONVERSION.
(A) CONVERSION UPON MERGER, CONSOLIDATION, SHARE EXCHANGE
OR SALE OF ASSETS. All the outstanding shares of Series B Preferred Stock shall,
at the option of the Corporation and upon written notice to the holders thereof
given not less than 30 days prior to the closing of a merger or consolidation of
the Corporation with or into another Corporation, share exchange or the sale of
all or substantially all of the Corporation's assets to any other person, be
converted, effective upon such closing, into the number of shares of Common
Stock to which a holder of Series B Preferred Stock shall be entitled upon
conversion pursuant to Section 5.1, unless redeemed by the holder as provided
herein. Such conversion shall occur automatically on the effective date of such
event without any further action by such holders and whether or not the
certificates representing such shares are surrendered to the Corporation or its
transfer agent for the Common Stock, except that any holder may elect to have
such holder's Series B shares redeemed at the liquidation value by sending a
notice of redemption to the Corporation at any time prior to the expiration of
the 30 day notice. Nothing in this Section 5.2,
2
<PAGE>
however, shall limit or in any way restrict the rights of the holders of shares
of Series B Preferred Stock to convert such shares into shares of Common Stock
at any time pursuant to Section 5.1 immediately above. Notwithstanding any other
provision of this subparagraph, the occurrence of a merger or consolidation of
the Corporation with or into another corporation, share exchange or the sale of
all or substantially all of the Corporation's assets to any other person, shall
not be considered a liquidation, dissolution or winding up of the Corporation
under Section 3 of this Certificate.
(B) SURRENDER OF CERTIFICATES. Upon the occurrence of a
conversion specified in this Section 5.2, the holders of such Series B Preferred
Stock shall surrender the certificates representing such shares at the office of
the Corporation or of its transfer agent for the Common Stock. Thereupon, the
Corporation or its transfer agent shall issue and deliver to such holder a
certificate or certificates for the number of shares of Common Stock into which
the shares of the Series B Preferred Stock surrendered were convertible on the
date on which such conversion occurred. The Corporation shall not be obligated
to issue certificates evidencing the shares of Common Stock issuable upon such
conversion unless certificates evidencing such shares of the Series B Preferred
Stock being converted are either delivered to the Corporation or any such
transfer agent or the holder notifies the Corporation or any such transfer agent
that such certificates have been lost, stolen or destroyed and executes an
agreement satisfactory to the Corporation to indemnify the Corporation from any
loss incurred by it in connection therewith.
5.3 SERIES B APPLICABLE CONVERSION RATE. The conversion rate for
each share of the Series B Preferred Stock in effect at any time (the "Series B
Applicable Conversion Rate") shall be the quotient obtained by dividing Ten
dollars ($10) by the Applicable Conversion Value, calculated as provided in
Section 5.4.
5.4 APPLICABLE CONVERSION VALUE. The Applicable Conversion Value
shall be fifteen dollars ($15) for the Series B Preferred Stock, except that
such amount shall be adjusted from time to time in accordance with this Section
5.
5.5 ADJUSTMENTS TO APPLICABLE CONVERSION VALUE. Upon the
happening of an Extraordinary Common Stock Event (as hereinafter defined), the
Applicable Conversion Value shall, simultaneously with the happening of such
Extraordinary Common Stock Event, be adjusted by multiplying the then effective
Applicable Conversion Value by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such
Extraordinary Common Stock Event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such
Extraordinary Common Stock Event, and the product so obtained shall thereafter
be the Applicable Conversion Value. The Applicable Conversion Value, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive Extraordinary Common Stock Event or Events.
"Extraordinary Common Stock Event" shall mean (i) the issue of
additional shares of the Common Stock as a dividend or other distribution on
outstanding Common Stock, (ii) the subdivision of outstanding shares of Common
Stock into a greater number of shares of the Common Stock or (iii) the
combination of outstanding shares of Common Stock into a smaller number of
shares of Common Stock.
3
<PAGE>
5.6 DIVIDENDS. In the event the Corporation shall make, issue or
fix a record date for the determination of holders of Common Stock entitled to
receive a dividend or other distribution payable in securities of the
Corporation other than shares of Common Stock or in assets (excluding cash
dividends or distributions), then and in each such event provision shall be made
so that the holders of Series B Preferred Stock shall receive upon conversion
thereof in addition to the number of shares of Common Stock receivable thereupon
the number of securities or such other assets of the Corporation that they would
have received had their Series B Preferred Stock been converted into Common
Stock on the date of such event and had they thereafter, during the period from
the date of such event to and including the Conversion Date (as that term is
hereafter defined in Section 5.9, retained such securities or such other assets
during such period, giving application to all adjustments called for during such
period under this Section 5 with respect to the rights of the holders of Series
B Preferred Stock.
5.7 RECAPITALIZATION OR RECLASSIFICATION. If the Common Stock
issuable upon the conversion of the Series B Preferred Stock shall be changed
into the same or different number of shares of any class or classes of stock of
the Corporation, whether by recapitalization, reclassification or otherwise
(other than a reorganization, merger, consolidation or sale of assets), then and
in each such event the holder of each share of Series B Preferred Stock shall
have the right thereafter to convert such share into the kind and amount of
shares of stock and other securities and property receivable upon such
reorganization, reclassification or other change by holders of the number of
shares of Common Stock into which such share of Series B Preferred Stock might
have been converted immediately prior to such reorganization, reclassification
or change, all subject to further adjustment as provided herein.
5.8 CERTIFICATE AS TO ADJUSTMENTS. In each case of an adjustment
or readjustment of the Applicable Conversion Rate, the Corporation will furnish
each holder of Series B Preferred Stock with a certificate showing such
adjustment or readjustment, and stating in reasonable detail the facts upon
which such adjustment or readjustment is based.
5.9 EXERCISE OF CONVERSION PRIVILEGE. To exercise a conversion
privilege, a holder of Series B Preferred Stock shall surrender the certificate
or certificates representing the shares being converted to the Corporation at
its principal office, and shall give written notice to the Corporation at the
office that such holder elects to convert such shares. The certificate or
certificates for shares of Series B Preferred Stock surrendered for conversion
shall be accompanied by proper assignment thereof to the Corporation or in
blank. The date when such written notice is received by the Corporation,
together with the certificate or certificates representing the shares of Series
B Preferred Stock being converted, is the "Conversion Date." As promptly as
practicable after the Conversion Date, the Corporation shall issue and deliver
to the holder of the shares of Series B Preferred Stock being converted (i) such
certificate or certificates as it may request for the number of whole shares of
Common Stock issuable upon the conversion of such shares of Series B Preferred
Stock in accordance with the provisions of this Section 5, (ii) cash in the
amount of all accrued and unpaid dividends on such shares of Series B Preferred
Stock, if any, computed up to and including the Conversion Date and (iii) cash,
as provided in Section 5.10 in respect of any fraction of a share of Common
Stock issuable upon such conversion. Such conversion shall be deemed to have
been effected immediately prior to the
4
<PAGE>
close of business on the Conversion Date, and at such time the rights of the
holder as holder of the converted shares of Series B Preferred Stock shall cease
and the person or person in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become the holder or holders of record of the shares of Common
Stock represented thereby.
5.10 CASH IN LIEU OF FRACTIONAL SHARES. No fractional shares of
Common Stock shall be issued upon the conversion of shares of Series B Preferred
Stock. Instead of any fractional shares of Common Stock which would otherwise be
issuable upon conversion of Series B Preferred Stock, the Corporation shall pay
to the holder of the shares of Series B Preferred Stock which were converted a
cash adjustment in respect of such fractional shares in an amount equal to the
same fraction of the market price per share of the Common Stock (as determined
in a reasonable manner prescribed by the Board of Directors) at the close of
business on the Conversion Date. The determination as to whether or not any
fractional shares are issuable shall be based upon the total number of shares of
Series B Preferred Stock being converted at any one time by any holder thereof,
not upon each share of Series B Preferred Stock being converted.
5.11 PARTIAL CONVERSION. In the event some but not all of the
shares of Series B Preferred Stock represented by a certificate or certificates
surrendered by a holder are converted, the Corporation shall execute and deliver
to the holder a new certificate representing the number of shares of Series B
Preferred Stock that were not converted.
5.12 RESERVATION OF COMMON STOCK. The Corporation shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion of the shares
of the Series B Preferred Stock, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series B Preferred Stock. 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 B Preferred Stock,
the Corporation shall take such corporate action as may be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose.
6. REDEMPTION RIGHTS
6.1 MANDATORY REDEMPTION. Except as otherwise provided in this
Section 6, on the fifth anniversary of the first date on which shares of Series
B Preferred Stock are issued (the "Mandatory Redemption Date"), the Corporation
shall redeem, out of funds legally available therefor, all outstanding shares of
Series B Preferred Stock, by paying therefor $10 per share, plus an amount equal
to any declared and unpaid dividends, if any, to such date, in cash (the
"Redemption Value").
6.2 NOTICE OF REDEMPTION. Notice of any redemption of shares of
Series B Preferred Stock pursuant to Section 6.1 shall be given by notice to the
registered holders of the Series B Preferred Stock not less than 30, nor more
than 60 days prior to the date fixed for redemption (a "Redemption Notice"), to
each holder of Series B Preferred Stock to be redeemed, at such holder's address
as it appears on the transfer books of the Corporation. In order to
5
<PAGE>
facilitate the redemption of Series B Preferred Stock, the Board of Directors
may fix a record date for the determination of Series B Preferred Stock to be
redeemed, or may cause the transfer books of the Corporation for the Series B
Preferred Stock to be closed, not more than 60 days or less than 30 days prior
to the date fixed for such redemption. At any time prior to the expiration of
the Redemption Notice, any holder of the Series B shares may exercise the
conversion rights pursuant to the provisions of Section 5.9 above.
6.3 CANCELLATION OF SERIES B PREFERRED STOCK. Notice of
Redemption having been given as aforesaid in respect of shares of Series B
Preferred Stock to be redeemed pursuant to Section 6.1, notwithstanding that any
certificates for such shares shall not have been surrendered for cancellation,
from and after the date of redemption designated in the notice of redemption (i)
the shares represented thereby shall no longer be deemed outstanding, (ii) the
rights to receive dividends thereon shall cease to accrue, and (iii) all rights
of the holders of Series B Preferred Stock to be redeemed shall cease and
terminate, excepting only the right to receive the $10 per share redemption
price therefor, plus all accumulated and unpaid dividends (whether or not earned
or declared) to the date of redemption.
6.4 ACCELERATION OF REDEMPTION DATE. If at any time after the
first date on which shares of Series B Preferred Stock are issued (the "Issue
Date") the average closing price of the Company's Common Stock as listed on the
Nasdaq National Market is $15 or more for thirty consecutive trading days, then
the Company will have the right to accelerate redemption of all of the Series B
Preferred Stock at the Redemption Value per share by sending a Redemption Notice
as provided in Section 6.2 above. At any time prior to the expiration of the
Redemption Notice, any holder of the Series B shares may exercise the conversion
rights pursuant to the provisions of Section 5.9 above.
7. PUT RIGHT
7.1 THE PUT. The Corporation hereby irrevocably grants and issues
to each holder of Series B Preferred Stock the right to require the Corporation
to purchase any time after the second anniversary of the Issue Date (hereinafter
referred to as the "Put") any or all of such Series B Preferred Stock at the
Redemption Value.
7.2 EXERCISE OF PUT. The holders of Series B Preferred Stock may
exercise the Put any time after the second anniversary of the Issue Date (the
"Exercise Period"). Any holder of Series B Preferred Stock may exercise the Put
during the Exercise Period by delivery of a written notice to the Corporation
specifying the number of Series B Preferred Stock as to which the Put is being
exercised, together with delivery of one or more certificates representing the
number of Series B shares as to which the Put is being exercised, duly endorsed
in blank by the holders of Series B Preferred Stock or having attached thereto a
stock power duly executed by the holder of Series B Preferred Stock in proper
form for transfer.
7.3 PAYMENT AND DELIVERY OF SERIES B PREFERRED STOCK. The
Corporation shall, within twenty (20) calendar days of the receipt of notice
from a holder of Series B Preferred Stock of its exercise of the Put, pay to
such holder of Series B Preferred Stock in cash or by check, the Redemption
Value for each share of Series B Preferred Stock as to which such holder
6
<PAGE>
of Series B Preferred Stock has exercised the Put. Any residual Series B shares
represented by the certificates surrendered but not included within the Put will
be issued in the name of the holder by the Corporation.
004002\00131\320353 V004
7
<PAGE>
CERTIFICATE OF DESIGNATION
SERIES C CONVERTIBLE PREFERRED STOCK
KEY TECHNOLOGY, INC.
Key Technology, Inc., an Oregon corporation (the "Corporation"),
certifies that pursuant to the authority contained in Article II of its Restated
Articles of Incorporation, and in accordance with the provisions of Section
60.134 of the Oregon Revised Statutes, its Board of Directors has adopted the
following resolution creating a series of its $.01 par value Preferred Stock:
RESOLVED, that, pursuant to authority conferred upon the Board of
Directors by the Articles of Incorporation of the Corporation, the Board of
Directors hereby authorizes the issuance of Series C Convertible Preferred Stock
of the Corporation and hereby designates, pursuant to Section 60.134 of the
Oregon Revised Statutes, the rights, preferences, privileges, restrictions and
other matters relating to such Series C Preferred Stock as follows
1. DESIGNATION AND AMOUNT.
One Hundred Nineteen Thousand , One Hundred Six (119,106) shares of
the Corporation's authorized Preferred Stock are hereby designated as the Series
C Convertible Preferred Stock (the "Series C Preferred Stock").
2. DIVIDENDS.
No dividends shall be declared and set aside for any shares of the
Series C Preferred Stock except in the event that the Board of Directors of the
Corporation shall declare a dividend payable upon the then outstanding shares of
the Common Stock of the Corporation, in which event the holders of the Series C
Preferred Stock shall be entitled to the amount of dividends per share of Series
C Preferred Stock as would be declared payable on the largest number of whole
shares of Common Stock into which each share of Series C Preferred Stock held by
each holder thereof could be converted pursuant to the provisions of Section 5
hereof (such number determined as of the record date for the determination of
holders of Common Stock entitled to receive such dividend).
3. LIQUIDATION, DISSOLUTION OR WINDING UP
3.1 PREFERENCE. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, holders of each
share of Series C Preferred Stock shall be entitled to be paid first out of the
assets of the Corporation available for distribution to holders of the
Corporation's capital stock of all classes (whether such assets are capital,
surplus or earnings) before any sums shall be paid or any assets distributed
among the holders of Common Stock, an amount equal to $20 per share of Series C
Preferred Stock plus an amount equal to all accrued and unpaid dividends
thereon, if any, computed up to and including
<PAGE>
the date full payment shall be tendered to the holders of the Series C Preferred
Stock with respect to such liquidation, dissolution or winding up.
If the assets of the Corporation shall be insufficient to permit the
payment in full to holders of the Series C Preferred Stock of the amount thus
distributable, then the entire assets of the Corporation available for such
distribution shall be distributed ratably among the holders of the Series C
Preferred Stock.
3.2 DISTRIBUTIONS OTHER THAN CASH. Whenever the distribution
provided for in this Section 3 shall be paid in property other than cash, the
value of such distribution shall be the fair market value of such property as
determined in good faith by the Board of Directors of the Corporation.
4. VOTING POWER.
Except as otherwise required by law, each holder of Series C
Preferred Stock shall be entitled to vote on all matters and shall be entitled
to that number of votes equal to the number of votes that would be accorded to
the largest number of whole shares of Common Stock into which such holder's
shares of Series C Preferred Stock could be converted, pursuant to the
provisions of Section 5 of this Certificate, at the record date for the
determination of shareholders entitled to vote on such matter or, if no such
record date is established, at the date such vote is taken or any written
consent of shareholders is solicited. The holders of shares of Series C
Preferred Stock and Common Stock shall be entitled to vote together as a single
class on all matters. The holders of Series C Preferred Stock shall not be
entitled to vote as a separate class or voting group on any plan of merger.
5. CONVERSION RIGHTS.
The holders of the Series C Preferred Stock shall have the following
conversion rights:
5.1 GENERAL. Subject to and in compliance with the provisions of
this Section 5, any shares of Series C Preferred Stock may, at the option of the
holder, be converted at any time or from time to time into fully paid and
nonassessable shares (calculated as to each conversion to the largest whole
share) of Common Stock. The number of shares of Common Stock to which a holder
of Series C Preferred Stock shall be entitled upon conversion shall be the
product obtained by multiplying the appropriate Applicable Conversion Rate
(determined as provided in Sections 5.3, 5.4 and 5.5) by the number of shares of
Series C Preferred Stock being converted.
5.2 MANDATORY CONVERSION.
(A) CONVERSION UPON MERGER, CONSOLIDATION, SHARE EXCHANGE OR
SALE OF ASSETS.
All the outstanding shares of Series C Preferred
Stock shall, at the option of the Corporation and upon written notice to the
holders thereof given not less than 30
2
<PAGE>
days prior to the closing of a merger or consolidation of the Corporation with
or into another Corporation, share exchange or the sale of all or substantially
all of the Corporation's assets to any other person, be converted, effective
upon such closing, into the number of shares of Common Stock to which a holder
of Series C Preferred Stock shall be entitled upon conversion pursuant to
Section 5.1, unless redeemed by the holder as provided herein. For purposes of
the preceding sentence, a merger, consolidation or share exchange shall only be
deemed to occur if, after giving effect to such merger, consolidation or share
exchange, the holders of the Corporation's outstanding capital stock (determined
on a fully diluted basis) immediately prior to the merger, consolidation or
share exchange, will cease to own immediately following the merger,
consolidation or share exchange the Corporation's (or the surviving
corporation's) outstanding capital stock (on a fully diluted basis) representing
at lest 50% of the equity value of the Corporation (or the surviving
corporation) as reasonably determined by the Corporation's board of directors.
Such conversion shall occur automatically on the effective date of such event
without any further action by such holders and whether or not the certificates
representing such shares are surrendered to the Corporation or its transfer
agent for the Common Stock, except that any holder may elect to have such
holder's Series C shares redeemed at the liquidation value by sending a notice
of redemption to the Corporation at any time prior to the expiration of the 30
day notice. Nothing in this Section 5.2, however, shall limit or in any way
restrict the rights of the holders of shares of Series C Preferred Stock to
convert such shares into shares of Common Stock at any time pursuant to Section
5.1 immediately above. Notwithstanding any other provision of this subparagraph,
the occurrence of a merger or consolidation of the Corporation with or into
another corporation, share exchange or the sale of all or substantially all of
the Corporation's assets to any other person, shall not be considered a
liquidation, dissolution or winding up of the Corporation under Section 3 of
this Certificate.
(B) SURRENDER OF CERTIFICATES.
Upon the occurrence of a conversion specified in this
Section 5.2, the holders of such Series C Preferred Stock shall surrender the
certificates representing such shares at the office of the Corporation or of its
transfer agent for the Common Stock. Thereupon, the Corporation or its transfer
agent shall issue and deliver to such holder a certificate or certificates for
the number of shares of Common Stock into which the shares of the Series C
Preferred Stock surrendered were convertible on the date on which such
conversion occurred. The Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such conversion
unless certificates evidencing such shares of the Series C Preferred Stock being
converted are either delivered to the Corporation or any such transfer agent or
the holder notifies the Corporation or any such transfer agent that such
certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection therewith.
5.3 SERIES C APPLICABLE CONVERSION RATE. The conversion rate for
each share of the Series C Preferred Stock in effect at any time (the "Series C
Applicable Conversion Rate") shall be the quotient obtained by dividing $20 by
the Applicable Conversion Value, calculated as provided in Section 5.4.
3
<PAGE>
5.4 APPLICABLE CONVERSION VALUE. The Applicable Conversion Value
shall be $12 for the Series C Preferred Stock, except that such amount shall be
adjusted from time to time in accordance with this Section 5.
5.5 ADJUSTMENTS TO APPLICABLE CONVERSION VALUE. Upon the
happening of an Extraordinary Common Stock Event (as hereinafter defined), the
Applicable Conversion Value shall, simultaneously with the happening of such
Extraordinary Common Stock Event, be adjusted by multiplying the then effective
Applicable Conversion Value by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such
Extraordinary Common Stock Event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such
Extraordinary Common Stock Event, and the product so obtained shall thereafter
be the Applicable Conversion Value. The Applicable Conversion Value, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive Extraordinary Common Stock Event or Events.
"Extraordinary Common Stock Event" shall mean (i) the issue of
additional shares of the Common Stock as a dividend or other distribution on
outstanding Common Stock, (ii) the subdivision of outstanding shares of Common
Stock into a greater number of shares of the Common Stock or (iii) the
combination of outstanding shares of Common Stock into a smaller number of
shares of Common Stock.
5.6 DIVIDENDS. In the event the Corporation shall make, issue or
fix a record date for the determination of holders of Common Stock entitled to
receive a dividend or other distribution payable in securities of the
Corporation other than shares of Common Stock or in assets, then and in each
such event provision shall be made so that the holders of Series C Preferred
Stock shall receive upon conversion thereof in addition to the number of shares
of Common Stock receivable thereupon the number of securities or such other
assets of the Corporation that they would have received had their Series C
Preferred Stock been converted into Common Stock on the date of such event and
had they thereafter, during the period from the date of such event to and
including the Conversion Date (as that term is hereafter defined in Section 5.9,
retained such securities or such other assets during such period, giving
application to all adjustments called for during such period under this Section
5 with respect to the rights of the holders of Series C Preferred Stock.
5.7 RECAPITALIZATION OR RECLASSIFICATION. If the Common Stock
issuable upon the conversion of the Series C Preferred Stock shall be changed
into the same or different number of shares of any class or classes of stock of
the Corporation, whether by recapitalization, reclassification or otherwise
(other than a reorganization, merger, consolidation or sale of assets), then and
in each such event the holder of each share of Series C Preferred Stock shall
have the right thereafter to convert such share into the kind and amount of
shares of stock and other securities and property receivable upon such
reorganization, reclassification or other change by holders of the number of
shares of Common Stock into which such share of Series C Preferred Stock might
have been converted immediately prior to such reorganization, reclassification
or change, all subject to further adjustment as provided herein.
4
<PAGE>
5.8 CERTIFICATE AS TO ADJUSTMENTS. In each case of an adjustment
or readjustment of the Applicable Conversion Rate, the Corporation will furnish
each holder of Series C Preferred Stock with a certificate showing such
adjustment or readjustment, and stating in reasonable detail the facts upon
which such adjustment or readjustment is based.
5.9 EXERCISE OF CONVERSION PRIVILEGE. To exercise a conversion
privilege, a holder of Series C Preferred Stock shall surrender the certificate
or certificates representing the shares being converted to the Corporation at
its principal office, and shall give written notice to the Corporation at the
office that such holder elects to convert such shares. The certificate or
certificates for shares of Series C Preferred Stock surrendered for conversion
shall be accompanied by proper assignment thereof to the Corporation or in
blank. The date when such written notice is received by the Corporation,
together with the certificate or certificates representing the shares of Series
C Preferred Stock being converted, is the "Conversion Date." As promptly as
practicable after the Conversion Date, the Corporation shall issue and deliver
to the holder of the shares of Series C Preferred Stock being converted (i) such
certificate or certificates as it may request for the number of whole shares of
Common Stock issuable upon the conversion of such shares of Series C Preferred
Stock in accordance with the provisions of this Section 5, (ii) cash in the
amount of all accrued and unpaid dividends on such shares of Series C Preferred
Stock, if any, computed up to and including the Conversion Date and (iii) cash,
as provided in Section 5.10 in respect of any fraction of a share of Common
Stock issuable upon such conversion. Such conversion shall be deemed to have
been effected immediately prior to the close of business on the Conversion Date,
and at such time the rights of the holder as holder of the converted shares of
Series C Preferred Stock shall cease and the person or person in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby.
5.10 CASH IN LIEU OF FRACTIONAL SHARES. No fractional shares of
Common Stock shall be issued upon the conversion of shares of Series C Preferred
Stock. Instead of any fractional shares of Common Stock which would otherwise be
issuable upon conversion of Series C Preferred Stock, the Corporation shall pay
to the holder of the shares of Series C Preferred Stock which were converted a
cash adjustment in respect of such fractional shares in an amount equal to the
same fraction of the market price per share of the Common Stock (as determined
in a reasonable manner prescribed by the Board of Directors) at the close of
business on the Conversion Date. The determination as to whether or not any
fractional shares are issuable shall be based upon the total number of shares of
Series C Preferred Stock being converted at any one time by any holder thereof,
not upon each share of Series C Preferred Stock being converted.
5.11 PARTIAL CONVERSION. In the event some but not all of the
shares of Series C Preferred Stock represented by a certificate or certificates
surrendered by a holder are converted, the Corporation shall execute and deliver
to the holder a new certificate representing the number of shares of Series C
Preferred Stock that were not converted.
5.12 RESERVATION OF COMMON STOCK. The Corporation shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion of the shares
of the Series C Preferred Stock, such number
5
<PAGE>
of its shares of Common Stock as shall from time to time be sufficient to effect
the conversion of all outstanding shares of the Series C Preferred Stock. 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 C Preferred Stock, the Corporation shall take such corporate action as
may be necessary to increase its authorized but unissued shares of Common Stock
to such number of shares as shall be sufficient for such purpose.
6. REDEMPTION RIGHTS
6.1 MANDATORY REDEMPTION. Except as otherwise provided in this
Section 6, on the fifth anniversary of the first date on which shares of Series
C Preferred Stock are issued (the "Mandatory Redemption Date"), the Corporation
shall redeem, out of funds legally available therefor, all outstanding shares of
Series C Preferred Stock, by paying therefor $20 per share, plus an amount equal
to any declared and unpaid dividends, if any, to such date, in cash (the
"Redemption Value").
6.2 NOTICE OF REDEMPTION. Notice of any redemption of shares of
Series C Preferred Stock pursuant to Section 6.1 shall be given by notice to the
registered holders of the Series C Preferred Stock not less than 30, nor more
than 60 days prior to the date fixed for redemption (a "Redemption Notice"), to
each holder of Series C Preferred Stock to be redeemed, at such holder's address
as it appears on the transfer books of the Corporation. In order to facilitate
the redemption of Series C Preferred Stock, the Board of Directors may fix a
record date for the determination of Series C Preferred Stock to be redeemed, or
may cause the transfer books of the Corporation for the Series C Preferred Stock
to be closed, not more than 60 days or less than 30 days prior to the date fixed
for such redemption. At any time prior to the expiration of the Redemption
Notice, any holder of the Series C shares may exercise the conversion rights
pursuant to the provisions of Section 5.9 above.
6.3 CANCELLATION OF SERIES C PREFERRED STOCK. Notice of
Redemption having been given as aforesaid in respect of shares of Series C
Preferred Stock to be redeemed pursuant to Section 6.1, notwithstanding that any
certificates for such shares shall not have been surrendered for cancellation,
from and after the date of redemption designated in the notice of redemption (i)
the shares represented thereby shall no longer be deemed outstanding, (ii) the
rights to receive dividends thereon shall cease to accrue, and (iii) all rights
of the holders of Series C Preferred Stock to be redeemed shall cease and
terminate, excepting only the right to receive the $20 per share redemption
price therefor, plus all accumulated and unpaid dividends (whether or not earned
or declared) to the date of redemption.
7. PUT RIGHT
7.1 THE PUT. The Corporation hereby irrevocably grants and issues
to each holder of Series C Preferred Stock the right to require the Corporation
to purchase at any time (hereinafter referred to as the "Put") any or all of
such Series C Preferred Stock at the Redemption Value.
6
<PAGE>
7.2 EXERCISE OF PUT. The holders of Series C Preferred Stock may
exercise the Put any time after the Issue Date (the "Exercise Period"). Any
holder of Series C Preferred Stock may exercise the Put during the Exercise
Period by delivery of a written notice to the Corporation specifying the number
of Series C Preferred Stock as to which the Put is being exercised, together
with delivery of one or more certificates representing the number of Series C
shares as to which the Put is being exercised, duly endorsed in blank by the
holders of Series C Preferred Stock or having attached thereto a stock power
duly executed by the holder of Series C Preferred Stock in proper form for
transfer.
7.3 PAYMENT AND DELIVERY OF SERIES C PREFERRED STOCK. The
Corporation shall, within 20 calendar days of the receipt of notice from a
holder of Series C Preferred Stock of its exercise of the Put, pay to such
holder of Series C Preferred Stock in cash or by check, the Redemption Value for
each share of Series C Preferred Stock as to which such holder of Series C
Preferred Stock has exercised the Put. Any residual Series C shares represented
by the certificates surrendered but not included within the Put will be issued
in the name of the holder by the Corporation.
004002\00131\330539 V002
7
<PAGE>
[LOGO] Phone: (503) 986-2200 ARTICLES OF AMENDMENT -
Fax: (503) 378-4381 BUSINESS/PROFESSIONAL/NONPROFIT
--------------------------------------------------------------------------------
Secretary of State Check the appropriate box below: For office
Corporation Division |X| BUSINESS/PROFESSIONAL CORPORATION use only
255 Capitol St. NE, Suite 151 (Complete only 1, 2, 3, 4, 6, 7)
Salem, OR 97310-1327 |_| NONPROFIT CORPORATION
(Complete only 1, 2, 3, 5, 6, 7)
Registry Number: 165129-15
---------------
Attach Additional Sheet if Necessary
Please Type or Print Legibly in Black Ink
--------------------------------------------------------------------------------
1) NAME OF CORPORATION PRIOR TO AMENDMENT: KEY TECHNOLOGY, INC.
--------------------------------------
2) STATE THE ARTICLE NUMBER(S) AND SET FORTH THE ARTICLE(S) AS IT IS AMENDED TO
READ. (Attach a separate sheet if necessary.) SEE EXHIBIT A ATTACHED
-----------------------------
HERETO.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
3) THE AMENDMENT WAS ADOPTED ON: MAY 4, 1998
---------------------
(If more than one amendment was adopted, identify the date of adoption of
each amendment.)
--------------------------------------------------------------------------------
BUSINESS/PROFESSIONAL CORPORATION ONLY
4) CHECK THE APPROPRIATE STATEMENT
|_| Shareholder action was required to adopt the amendment(s). The vote was
as follows:
-------------------------------------------------------------------------------
Class or Number of Number of Number of Number of
series of shares votes entitled votes cast votes cast
shares outstanding to be cast FOR AGAINST
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
|X| Shareholder action was not required to adopt the amendment(s). The
amendment(s) was adopted by the board of directors without shareholder
action.
|_| The corporation has not issued any shares of stock. Shareholder action
was not required to adopt the amendment(s). The amendment(s) was adopted by
the incorporators or by the board of directors.
--------------------------------------------------------------------------------
NONPROFIT CORPORATION ONLY
5) CHECK THE APPROPRIATE STATEMENT
|_| Membership approval was not required. The amendment(s) was approved by
a sufficient vote of the board of directors or incorporators.
|_| Membership approval was required. The membership vote was as follows:
-------------------------------------------------------------------------------
Class(es) Number of Number of Number of Number of
entitled to vote members votes entitled to votes cast votes cast
shares entitled to vote be cast FOR AGAINST
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
--------------------------------------------------------------------------------
6) EXECUTION
Printed Name Signature Title
THOMAS C. MADSEN /S/ THOMAS C. MADSEN President
--------------------- ------------------------- ----------------------
--------------------------------------------------------------------------------
7) CONTACT NAME DAYTIME PHONE NUMBER
RONALD L. GREENMAN (503) 221-1440
----------------------------- ------------------------------------------
-----------------
FEES
-----------------
Make check for
$10 payable to
"Corporation
Division"
NOTE: Filing fees
may be paid with
VISA or
Mastercard. The
card number and
expiration date
should be
submitted on a
separate sheet
for your
protection
-----------------
CR113(Rev.6/96)
<PAGE>
EXHIBIT A
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
BY DIRECTORS
PURSUANT TO ARTICLES OF AMENDMENT TO
THE RESTATED ARTICLES OF INCORPORATION
OF
KEY TECHNOLOGY, INC.
Article II of the Corporation's Restated Articles of Incorporation
is amended to add a section providing for a series of Series A Junior
Participating Preferred Stock, and that the designation and amount thereof and
the voting powers, preferences, limitations and relative and special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof are as follows:
ARTICLE II
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
Section 1. Designation, Amount and Par Value.
---------------------------------
The shares of such series shall be designated as "Series A Junior
Participating Preferred Stock" and the number of shares constituting such series
shall be 15,000. Such series is hereinafter referred to as the "Series A
Preferred Stock." The par value of the Series A Preferred Stock shall be $.01
per share.
Section 2. Dividends and Distributions.
---------------------------
(A) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the last day of March, June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $.01 or (b) subject to the
provisions for adjustment hereinafter set forth, 1,000 times the aggregate per
share amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock, par value $.01 per share, of the Corporation (the "Common
Stock") since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a
<PAGE>
share of Series A Preferred Stock. In the event the Corporation shall at any
time after May 4, 1998 (the "Rights Declaration Date") (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Preferred stock as provided in Paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock).
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights.
-------------
The holders of shares of Series A Preferred stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 1,000
votes (and each 1/1,000 of a share of Series A Preferred Stock shall entitle the
holder thereof to one vote) on all matters submitted to a vote of the
shareholders of the Corporation. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of shares
of Series A Preferred Stock were entitled immediately prior to such event shall
be adjusted by multiplying such number by a fraction the
2
<PAGE>
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
shareholders of the Corporation.
(C) (i) If at any time dividends on any Series A Preferred Stock
shall be in arrears in an amount equal to six quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series A Preferred Stock then
outstanding shall have been declared and paid or set apart for payment. During
each default period, all holders of Preferred Stock (including holders of the
Series A Preferred Stock) with dividends in arrears in an amount equal to six
quarterly dividends thereon, voting as a class, irrespective of series, shall
have the right to elect two directors in addition to any number of directors
that the holders of any series of Preferred Stock may otherwise be entitled to
elect.
(ii) During any default period, such voting right of the
holders of Series A Preferred Stock may be exercised initially at a special
meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any
annual meeting of shareholders, and thereafter at annual meetings of
shareholders, provided that such voting right shall not be exercised unless the
holders of 10% in number of shares of Preferred Stock outstanding shall be
present at the meeting in person or by proxy. The absence of a quorum of the
holders of Common Stock shall not affect the exercise by the holders of
Preferred Stock of such voting right. At any meeting at which the holders of
Preferred Stock shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to elect directors
to fill such vacancies, if any, in the Board of Directors as may then exist up
to two directors or, if such right is exercised at an annual meeting, to elect
two directors. If the number which may be so elected at any special meeting does
not amount to the required number, the holders of the Preferred Stock shall have
the right to make such increase in the number of directors as shall be necessary
to permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect directors in any
default period and during the continuance of such period, the number of
directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
directors, the Board of Directors may order, or any shareholder or shareholders
owning in the aggregate not less than 10% of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request, the calling of
a special meeting of the holders of Preferred Stock, which meeting shall
thereupon be called by the Chairman, President, a Vice President or the
Secretary of the Corporation. Notice of such meeting and of any annual meeting
at which holders of Preferred Stock are entitled to vote
3
<PAGE>
pursuant to this paragraph (C)(iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to the holder at the holder's
last address appearing on the books of the Corporation. Such meeting shall be
called for a time not earlier than 10 days and not later than 50 days after such
order or request or in default of the calling of such meeting within 50 days
after such order or request, such meeting may be called on similar notice by any
shareholder or shareholders owning in the aggregate not less than 10% of the
total number of shares of Preferred Stock outstanding. Notwithstanding the
provisions of this paragraph (C)(iii), no such special meeting shall be called
during the period within 50 days immediately preceding the date fixed for the
next annual meeting of the shareholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation, if applicable, shall continue to be
entitled to elect the whole number of directors until the holders of Preferred
Stock shall have exercised their right to elect two directors voting as a class,
after the exercise of which right (x) the directors so elected by the holders of
Preferred Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may, except as provided in paragraph
(C)(ii) of this Section 3, be filled by vote of a majority of the remaining
directors theretofore elected by the holders of the class of stock which elected
the director whose office shall have become vacant. References in this paragraph
(C) to directors elected by the holders of a particular class of stock shall
include directors elected by such directors to fill vacancies, as provided in
clause (y) of the foregoing sentence.
(iv) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect directors shall
cease, (y) the term of any directors elected by the holders of Preferred Stock
as a class shall terminate, and (z) the number of directors shall be such number
as may be provided for in the Restated Articles of Incorporation or Restated
Bylaws irrespective of any increase made pursuant to the provisions of paragraph
(C)(ii) of this Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the Restated Articles of
Incorporation or Restated Bylaws). Any vacancies in the Board of Directors
effected by the provisions of clauses (y) and (z) in the preceding sentence may
be filled by a majority of the remaining directors.
(D) Except as set forth herein, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
--------------------
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
4
<PAGE>
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A Preferred Stock and all
such parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
--------
acquire shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under Section 4(A),
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares.
-----------------
Any shares of Series A Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock,
without designation as to series, and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein or in the Restated Articles of Incorporation.
Section 6. Liquidation, Dissolution or Winding Up.
--------------------------------------
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to:
5
<PAGE>
(i) the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock, unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received the higher of (a) $0.01 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, or (b) an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1,000 times the aggregate amount to be distributed per share to holders of
Common Stock; or
(ii) the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up.
(B) In the event the Corporation shall at any time (i) declare any
dividend on Common Stock payable in shares of Common Stock, or (ii) subdivide,
combine or consolidate the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or smaller number of shares, then
in each such case the aggregate amount to which holders of shares of Series A
Preferred Stock are entitled under clause (i)(b) of Section 6(A) hereof shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, Etc.
---------------------------
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which shares of Common Stock are exchanged
for or changed into other stock or securities, cash and/or any other property,
then in any such case the shares of Series A Preferred Stock shall at the same
time be similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock
is changed or exchanged. In the event the Corporation shall at any time (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
6
<PAGE>
Section 8. No Redemption.
-------------
The shares of Series A Preferred Stock shall not be redeemable.
Notwithstanding the foregoing, the Corporation may acquire shares of Series A
Preferred Stock in any other manner permitted by law, the Restated Articles of
Incorporation or this amendment thereof.
Section 9. Rank.
----
Unless otherwise provided in the Restated Articles of Incorporation
or an amendment thereof relating to a subsequent series of Preferred Stock of
the Corporation, the Series A Preferred Stock shall rank junior to all other
series of the Corporation's Preferred Stock as to the payment of dividends and
the distribution of assets on liquidation, dissolution or winding up, and senior
to the Common Stock of the Corporation.
Section 10. Amendment.
---------
The Restated Articles of Incorporation shall not be further amended
in any manner which would materially alter or change the powers, preferences or
special rights of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least a majority of the
outstanding shares of Series A Preferred Stock, voting separately as a class.
Section 11. Fractional Shares.
-----------------
Series A Preferred Stock may be issued in fractions of a share which
shall entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Preferred Stock.
212221
7
<PAGE>
Submit the original [LOGO] SECRETARY OF STATE THIS SPACE FOR
and one true copy CORPORATION DIVISION OFFICE USE ONLY
$10.00 BUSINESS REGISTRY
158 12TH STREET NE
REGISTRY NUMBER: Salem, OR 97310-0210
(503) 378-4166
165129-15
-----------------
RESTATED ARTICLES OF INCORPORATION
BUSINESS CORPORATION
--------------------------------------------------------------------------------
PLEASE TYPE OR PRINT LEGIBLY IN BLACK INK
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1. Name of the corporation prior to amendment: KEY TECHNOLOGY, INC.
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2. New name of the corporation (if changed):
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3. A copy of the restated articles is attached.
4. Check the appropriate statement(s):
|_| The restated articles contain amendments which do not require
shareholder approval. These amendments were duly adopted by the
board of directors.
|X| The restated articles contain amendments which require shareholder
approval. The date of adoption of the restated articles was
JUNE 25, 1993, which is the date of adoption of amendments included
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in the restated articles. The vote of the shareholders was as follows:
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Class or Number of Number of Number of Number of votes
series of shares votes entitled votes cast against
shares outstanding to be cast cast for
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COMMON 3,628,400 3,628,400 3,628,400 0
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5. Other provisions, if applicable:
Execution: /S/ RONALD L. GREENMAN RONALD L. GREENMAN Asst. Secretary
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Signature Printed Name Title
Person to contact about this filing: RONALD L. GREENMAN 503/221-1440
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Name Daytime phone number
Makes checks payable to the Corporation Division. Submit the completed form
and fee to: Corporation Division, Business Registry, 158 12th Street NE,
Salem, Oregon 97310-0210.
BC-3 (10/91)
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RESTATED ARTICLES OF INCORPORATION
OF KEY TECHNOLOGY, INC.
ARTICLE I
The name of this Corporation is KEY TECHNOLOGY, INC. and its
duration shall be perpetual.
ARTICLE II
The Corporation shall have authority to issue 20,000,000 shares of
stock in the aggregate. Such shares shall be divided into two classes as
follows:
(a) 15,000,000 shares of common stock, $.01 par value (the
"Common Stock");
(b) 5,000,000 shares of series preferred stock, $.01 par value
(the "Series Preferred").
The Series Preferred may be issued from time to time in one or more
series in any manner permitted by law, as determined from time to time by the
Board of Directors and stated in the resolution or resolutions adopted by the
Board of Directors pursuant to authority hereby vested in it, each series to be
appropriately designated, prior to the issue of any shares thereof, by some
distinguishing letter, number or title. All shares of the same series of Series
Preferred shall be identical in every particular and, except as otherwise stated
with respect to the particular preferences, limitations and relative rights in
the resolution or resolutions creating any series, identical with respect to
other series within the same class. The designation and terms of each particular
series of Series Preferred shall be fixed and determined by the Board of
Directors in any manner permitted by law and stated in the resolution or
resolutions providing for the issue of such stock before any shares of such
series are issued.
The Board of Directors may from time to time increase the number of
shares of any series of Series Preferred already created by providing that any
unissued shares of Series Preferred shall constitute part of such series, or may
decrease (but not below the number of shares thereof then outstanding) the
number of shares of any series of Series Preferred already created by providing
that any unissued shares previously assigned to such series shall no longer
constitute a part thereof. The Board of Directors is further empowered to
classify or reclassify any unissued Series Preferred by fixing or altering the
terms thereof and by assigning all or any portion thereof to an existing or
newly created series from time to time before the issuance of such stock.
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ARTICLE III
1. The number of directors of the Corporation shall be fixed as
provided by the Bylaws and may be changed from time to time by amending the
Bylaws, as therein provided, but the number of directors shall be not less than
three. The Board of Directors is authorized to increase the number of persons to
comprise the Board of Directors in any period between annual shareholder
meetings by the affirmative vote of a majority of the directors. In the event
the Board of Directors is divided into classes, such additional director or
directors shall be allocated by the Board of Directors among the three classes
of directors so as to maintain equal classes to the extent possible. Without the
unanimous consent of the existing Board of Directors, no more than two
additional directors shall be added to the Board of Directors within any
12-month period. Without the unanimous consent of the Board of Directors, no
person who is affiliated as an owner, director, officer or employee of a company
or business deemed by the Board of Directors to be competitive with that of the
Corporation shall be eligible to serve on the Board of Directors of the
Corporation.
2. At any time when the Board of Directors shall consist of six or
more members, in lieu of electing the entire number of directors annually, the
Board of Directors of the Corporation shall be divided into three classes. The
method of classification shall be to assign the longest terms to those directors
with the most seniority as directors. In the event there are more directors with
identical seniority than there are class positions to be filled, the initial
designation of classification shall be made by the director then serving as
Chairman of the Board. The classes shall be Class 1, Class 2 and Class 3. The
term of office of directors of Class 1 shall expire at the first annual meeting
of shareholders after their election, that of Class 2 shall expire at the second
annual meeting after their election, and that of Class 3 shall expire at the
third annual meeting after their election. When classification of directors is
in effect, at each annual meeting of shareholders the number of directors equal
to the number of the class whose term expires at the time of such meeting shall
be elected to hold office until the third succeeding annual meeting. No
classification of directors shall be effective in the event the authorized
number of members of the Board is reduced to fewer than six.
3. If the Board of Directors is divided into classes and in the
event of any increase or decrease in the authorized number of directors, then
(i) each director then serving as such shall nevertheless continue as a director
of the class of which he is a member until the expiration of his current term,
or upon his earlier resignation, removal from office or death; (ii) the newly
created or eliminated directorships resulting from such increase or decrease
shall be allocated by the Board of Directors among the three classes of
directors so as to maintain equal classes to the
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extent possible; and (iii) in the event such decrease in the authorized number
of directors makes the total number of directors less than six, then the Board
of Directors shall become declassified and the directors remaining in office
shall continue their terms until the next annual meeting of shareholders, at
which time all of said remaining directors shall be re-elected to one-year terms
or until their successors are duly elected and qualified.
ARTICLE IV
1. The affirmative vote of the holders of not less than 75 percent
of all outstanding Common Stock, voting as one class, shall be required for the
approval or authorization of any "business combination" (as hereinafter defined)
with any person or entity which, as of the record date for the determination of
the shareholders entitled to notice of and to vote upon such matter, is the
beneficial owner of 5 percent or more of the outstanding Common Stock of the
Corporation (hereinafter a "Major Shareholder"). Any such 75 percent vote in
order to constitute due and valid authorization under this Article must include
not less than 51 percent of the Common Stock held by persons other than the
Major Shareholder.
2. For purposes of this Article, the term "business
combination" shall mean:
(a) any merger or consolidation (whether in a single transaction
or a series of related transactions) of the Corporation or any
subsidiary of the Corporation with or into any Major
Shareholder; or
(b) the sale, exchange, shareholder distribution, pledge,
mortgage (or use of other security device to create a lien
upon) or lease of all or substantially all of the assets of
the Corporation or a subsidiary to any Major Shareholder, or
the purchase, exchange, lease or other acquisition by the
Corporation or any of its subsidiaries of all or substantially
all of the assets of a Major Shareholder, in either case in a
single transaction or a series of related transactions; or
(c) the issuance of securities of the Corporation (or warrants,
options or other rights to purchase the same) to, the
reclassification or recapitalization of the securities of the
Corporation owned by, or the exchange of securities of the
Corporation with a Major Shareholder; or
(d) any other transaction with a Major Shareholder for which
approval of the shareholders of this
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Corporation is required by law or by any agreement between the
Corporation and any national securities exchange or rule of
any such exchange or NASDAQ; or
(e) any contact or agreement providing for any of the
foregoing.
3. For purposes of this Article, the term "person" or "entity"
shall mean:
(a) any individual, corporation, partnership or other person;
(b) any other party which is an "affiliate" or "associate" (as
those terms are defined in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934 as in
effect on October 1, 1987), or any person or entity described
in subparagraph 3(a) above;
(c) any other party with which any person or entity described in
subparagraph 3(a) above or any of its affiliates or associates
have any agreement, arrangement or understanding, directly or
indirectly, for the purpose of acquiring, holding, voting or
disposing of shares of the Corporation; and
(d) the predecessors, successors or assigns of any entity
described in subparagraphs 3(a), (b) or (c) above in any
transaction or series of transactions not involving a public
offering of the shares of the Corporation within the meaning
of the Securities Act of 1933.
4. The super-majority voting requirements of this Article shall not
be applicable to any business combination either (i) approved by resolution of
the Board of Directors prior to the time that the Major Shareholder became such,
provided that the resolution received the affirmative vote of a majority of the
Continuing Directors, or (ii) solely between the Corporation and any other
corporation or entity in which 50 percent or more of the voting stock or
interest is owned by the Corporation, if the shareholders of the Corporation
retain their proportionate voting and equity interests in the surviving entity.
The term "Continuing Director" for purposes of this Article shall mean a
director who was a member of the Board of Directors of the Corporation
immediately prior to the time that any person or entity with whom a business
combination is to be consummated became a Major Shareholder, or a director
designated (before his initial election as a director) as a Continuing Director
by a two-thirds vote of the then Continuing Directors. All references to a vote
of the Continuing
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Directors shall mean a vote of the total number of Continuing Directors of the
Corporation.
5. Beneficial ownership for purposes of this Article shall be deemed
to include all shares which would be determined to be beneficially owned
(whether directly by such person or entity or indirectly through any affiliate
or otherwise) under Rule 13d-3 of the Securities and Exchange Commission as in
effect on October 1, 1987, as well as all shares of the Corporation which the
other entity has the right to acquire, pursuant to any agreement or otherwise.
6. The determination of whether a proposed business combination is
within the scope of this Article, including without limitation, (i) the number
of shares of stock beneficially owned by any person; (ii) whether a person is an
affiliate or associate of another; (iii) whether a person has an agreement,
arrangement or understanding with another as to the matters referred to in this
Article; (iv) whether the assets subject to any business combination are a
substantial part of the relevant corporation's assets; (v) whether a proposed
transaction is subject to the provisions of this Article; and (vi) such other
matters with respect to which a determination is required under this Article,
shall be made by a two-thirds majority of the Continuing Directors. Any such
determination shall be conclusive and binding for all purposes of this Article.
7. During the time a Major Shareholder exists, a resolution to
voluntarily dissolve the Corporation shall be adopted only upon (i) the consent
of all of this Corporation's shareholders; or (ii) the affirmative vote of at
least two-thirds of the total number of the Continuing Directors, and the
affirmative vote of the holders of at least 75 percent of the shares of the
Corporation entitled to vote thereon. If no Major Shareholder exists, this
section 7 shall not apply.
8. The shareholder vote, if any, required for any business
combination not expressly subject to the super-majority voting provisions of
this Article shall be such vote as may otherwise be required by applicable law
and any other applicable provisions of these Restated Articles of Incorporation.
9. Notwithstanding the foregoing provisions, in the event of any
business combination with any person or entity which is a Major Shareholder, the
requisite vote of the shareholders of this Corporation necessary to approve the
transaction shall be 95 percent unless the terms of the transaction are such
that all of the Corporation's shareholders are to receive as a result of the
business combination the same amount, kind and composition of cash or securities
payment on a per-share basis in exchange for their shares as was received by any
other former shareholder of the Corporation whose shares were acquired during
the preceding 12-
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month period by the Major Shareholder with whom the business combination is to
be consummated.
ARTICLE V
Notwithstanding any of the provisions of these Restated Articles of
Incorporation or the Bylaws of the Corporation, and notwithstanding the fact
that some lesser percentage may be allowed by law, any amendment, change or
repeal of Articles III, IV or this Article V, or any other amendment of these
Restated Articles of Incorporation which would have the effect of modifying or
permitting circumvention of the provisions of Articles III, IV and V, shall
require the affirmative vote of 75 percent of the outstanding shares of Common
Stock of the Corporation.
ARTICLE VI
1. The Corporation shall indemnify its directors, officers, and may
indemnify its employees and agents, to the full extent and under the
circumstances permitted by the Oregon Business Corporation Act.
2. To the fullest extent permitted by law, no director of this
Corporation shall be personally liable to the Corporation or its shareholders
for monetary damages for conduct as a director. No amendment or repeal of this
Article VI, nor the adoption of any provision of these Restated Articles of
Incorporation inconsistent with this Article VI, shall adversely affect any
right or protection of a director based upon this Article VI and existing at the
time of such amendment or repeal. No change in the law shall reduce or eliminate
the rights and protections applicable at the time this provision shall become
effective unless the change in the law shall specifically require such reduction
or elimination. If the Oregon Business Corporation Act is amended, after this
Article VI shall become effective, to authorize corporate action further
eliminating or limiting the personal liability of directors, officers, employees
or agents, then the liability of directors, officers, employees or agents of
this Corporation shall be eliminated or limited to the fullest extent permitted
by the Oregon Business Corporation Act, as so amended.
3. No contract or other transaction between the Corporation and one
or more of its directors or between the Corporation and any other corporation,
firm, association or entity in which one or more of its directors are directors
or officers or are financially interested, shall be either void or voidable
because of such relationship or interest or because such director or directors
are present at the meeting of the Board of Directors or a committee thereof
which authorizes, approves or ratifies such contract or transaction or because
his or their votes are counted for such purposes, if: (i) the fact of such
relationship or interest is disclosed or known to the Board of Directors or
committee which authorizes, approves or ratifies the contract or transaction by
a
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vote or consent sufficient for the purpose without counting the votes or
consents of such interested directors; or (ii) the fact of such relationship or
interest is disclosed or known to the shareholders entitled to vote and they
authorize, approve or ratify such contract or transaction by vote or written
consent; or (iii) the contract or transaction is fair and reasonable to the
Corporation.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes or ratifies such contract or transaction.
4. No shareholder shall have any preemptive right to acquire
unissued or treasury shares of the Corporation or securities convertible into
such shares or carrying a right to subscribe to or acquire such shares.
The address where the Division may mail notices is the same as the
registered agent.
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