Exhibit 1
OPTICAL CABLE CORPORATION
ARTICLES OF AMENDMENT
1. Name. The name of the Corporation is Optical Cable Corporation.
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2. The Amendment. The Amendment to the Articles of Incorporation is as
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set forth in the attachment hereto. The Amendment adds a Section 4.3 to the
Corporation's Amended and Restated Articles of Incorporation.
3. Board Action. At a meeting held on November 2, 2001, the Board of
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Directors duly adopted the Amendment.
4. Shareholder Action. Pursuant to Section 13.1-639 of the Code of
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Virginia and Article IV of the Corporation's Amended and Restated Articles of
Incorporation, shareholder action was not required to effect the Amendment.
Dated: November 2, 2001 OPTICAL CABLE CORPORATION
By: /s/ NEIL D. WILKIN, JR.
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Neil D. Wilkin, Jr.
Senior Vice President and
Chief Financial Officer
Attachment
4.3 Series A Participating Preferred Shares
(a) Designation and Amount. Pursuant to a resolution adopted by the Board
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of Directors of the Corporation on November 2, 2001, 100,000 preferred shares
(no par value) are hereby constituted as a series of preferred shares of the
Corporation which shall be designated as "Series A Participating Preferred
Shares" (the "Series A Preferred Shares"), the preferences, limitations and
relative rights of which are set forth herein.
(b) Dividends and Distribution.
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(i) The holders of Series A Preferred Shares, in preference to the holders
of Common Shares, no par value (the "Common Shares"), of the Corporation
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 fifteenth day of January, April, July and
October 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 Shares, in an amount per share (rounded to the
nearest cent) equal to the greater of (X) $1.00 or (Y) subject to the
provision 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 Common Shares or a
subdivision of the outstanding Common Shares (by reclassification or
otherwise), declared on the Common Shares, 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 share of Series A Preferred Shares. In the event the Corporation shall
at any time declare or pay any dividend on Common Shares payable in Common
Shares, or effect a subdivision or combination or consolidation of the
outstanding Common Shares (by reclassification or otherwise than by payment
of a dividend in Common Shares) into a greater or lesser number of Common
Shares, then in each such case the amount to which holders of Series A
Preferred Shares were entitled immediately prior to such event under clause
(Y) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which is
the number of Common Shares that were outstanding immediately prior to such
event.
The Corporation shall declare a dividend or distribution on the Series A
Preferred Shares as provided in this paragraph (i) immediately after it declares
a dividend or distribution on the Common Shares (other than a dividend payable
in Common Shares); provided that, in the event no dividend or distribution shall
have been declared on the Common Shares during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 per share on the Series A Preferred Shares shall nevertheless
be payable on such subsequent Quarterly Dividend Payment Date.
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Dividends shall begin to accrue and be cumulative on outstanding Series A
Preferred Shares from the Quarterly Dividend Payment Date next preceding the
date of issue of such Series A Preferred Shares, 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 Series A Preferred Shares 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 Series A Preferred Shares 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
Series A Preferred Shares entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 60 days
prior to the date fixed for the payment thereof.
(c) Voting Rights. The holders of Series A Preferred Shares shall have
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the following voting rights:
(i) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Shares shall entitle the holder thereof to
1,000 votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on Common Shares payable in Common Shares, or effect a
subdivision or combination or consolidation of the outstanding Common
Shares (by reclassification or otherwise than by payment of a dividend in
Common Shares) into a greater or lesser number of Common Shares, then in
each such case the number of votes per share to which holders of Series A
Preferred Shares were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is
the number of Common Shares outstanding immediately after such event and
the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(ii) Except as otherwise provided herein or by law, the holders of Series
A Preferred Shares and the holders of Common Shares shall vote together as
one class on all matters submitted to a vote of shareholders of the
Corporation.
(iii) Except as set forth herein, holders of Series A Preferred Shares
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
Shares as set forth herein) for taking any corporate action.
(d) Certain Restrictions.
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(i) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Shares as provided in paragraph (b) are
in arrears, thereafter and until
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all accrued and unpaid dividends and distributions, whether or not
declared, on Series A Preferred Shares outstanding shall have been paid in
full, the Corporation shall not:
(A) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of the Corporation ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred
Shares;
(B) declare or pay dividends on or make any other distributions
on any shares of the Corporation ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Shares, except dividends paid ratably on the Series
A Preferred Shares and all such parity shares 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;
(C) redeem or purchase or otherwise acquire for consideration
any shares of the Corporation ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Shares, provided that the Corporation may at any
time redeem, purchase or otherwise acquire any such parity shares in
exchange for any shares of the Corporation ranking junior (either as
to dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Shares; or
(D) purchase or otherwise acquire for consideration any Series A
Preferred Shares, or any shares of the Corporation ranking on a parity
with the Series A Preferred Shares, 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.
(ii) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of the
Corporation unless the Corporation could, under subparagraph (i) of this
paragraph (d), purchase or otherwise acquire such shares at such time and
in such manner.
(e) Reacquired Shares. Any Series A Preferred Shares purchased or
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otherwise acquired by the Corporation in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation, and upon the taking of any action required by applicable
law, become authorized but unissued preferred shares and may be reissued as part
of a new series of preferred shares to be created by resolution or resolutions
of the Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
(f) Liquidation, Dissolution or Winding Up. Upon any voluntary
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liquidation, dissolution or winding up of the Corporation, no distribution shall
be made:
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(A) to the holders of shares of the Corporation ranking junior
(either as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Shares unless, prior thereto, the
holders of Series A Preferred Shares shall have received an amount per
share equal to the greater of (i) $25,000 per share, or (ii) subject
to the provision for adjustment hereinafter set forth, 1000 times the
aggregate amount to be distributed per share to holders of Common
Shares, plus in each case an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the
date of such payment, or
(B) to the holders of shares of the Corporation ranking on a
parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Shares, except distributions
made ratably on the Series A Preferred Shares and all other such
parity shares in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or
winding up.
In the event the Corporation shall at any time declare or pay any dividend
on Common Shares payable in Common Shares, or effect a subdivision or
combination or consolidation of the outstanding Common Shares (by
reclassification or otherwise than by payment of a dividend in Common Shares)
into a greater or lesser number of Common Shares, then in each such case the
aggregate amount to which holders of Series A Preferred Shares were entitled
immediately prior to such event under the proviso in clause (A) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of Common Shares outstanding immediately after
such event and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(g) Consolidation, Merger, etc. In case the Corporation shall enter into
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any consolidation, merger, combination or other transaction in which the Common
Shares are exchanged for or changed into other shares or securities, cash and/or
any other property, then in any such case the Series A Preferred Shares 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 shares, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Shares is changed or exchanged. In the event the Corporation shall at any time
declare or pay any dividend on Common Shares payable in Common Shares, or effect
a subdivision or combination or consolidation of the outstanding Common Shares
(by reclassification or otherwise than by payment of a dividend in Common
Shares) into a greater or lesser number of Common Shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of Series A Preferred Shares shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to such event.
(h) No Redemption. The Series A Preferred Shares shall not be redeemable.
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5
(i) Amendment. The Articles of Incorporation of the Corporation shall not
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be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Shares so as to
affect them adversely without the affirmative vote of the holders of two-
thirds or more of the outstanding Series A Preferred Shares voting together
as a single class.
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OPTICAL CABLE CORPORATION
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
ARTICLE I
Name
The name of the corporation is Optical Cable Corporation (the
"Corporation").
ARTICLE II
Purpose
The Corporation is organized to engage in the development, manufacture and
sale of optical fiber cables, specialty cables and cable assemblies. In
addition, the Corporation shall have the power to engage in any lawful business
not required by the Virginia Stock Corporation Act to be stated in the Articles
of Incorporation.
ARTICLE III
Authorized Shares
3.1 Number and Designation. The aggregate number and designation of
shares that the Corporation shall have authority to issue are as follows:
Number of
Class Shares
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Preferred, no par value.................... 1,000,000
Common, no par value....................... 100,000,000
3.2 Preemptive Rights. No holder of outstanding shares shall have any
preemptive right with respect to (i) any shares of any class of the Corporation,
whether now or hereafter authorized, (ii) any warrants, rights or options to
purchase any such shares, or (iii) any obligations convertible into any such
shares or into warrants, rights or options to purchase any such shares.
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ARTICLE IV
Preferred Shares
4.1 Issuance in Series. (a) The Board of Directors is authorized to issue
Preferred Shares from time to time in one or more series and to provide for the
designation, preferences, limitations and relative rights of the shares of each
series by the adoption of Articles of Amendment to the Articles of Incorporation
of the Corporation setting forth:
(i) The maximum number of shares in the series and the designation of the
series, which designation shall distinguish the shares thereof from the
shares of any other series or class;
(ii) Whether shares of the series shall have special, conditional or
limited voting rights, or no right to vote, except to the extent prohibited
by law;
(iii) Whether shares of the series are redeemable or convertible (x) at
the option of the corporation, a shareholder or another person or upon the
occurrence of a designated event, (y) for cash, indebtedness, securities or
other property, and (z) in a designated amount or in an amount determined
in accordance with a designated formula or by reference to extrinsic data
or events;
(iv) Any right of holders of shares of the series to distributions,
calculated in any manner, including the rate or rates of dividends, and
whether dividends shall be cumulative, noncumulative or partially
cumulative;
(v) The amount payable upon the shares of the series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation; and
(vi) Any other preferences, limitations or specified rights (including a
right that no transaction of a specified nature shall be consummated while
any shares of such series remain outstanding except upon the assent of all
or a specified portion of such shares) now or hereafter permitted by the
laws of the Commonwealth of Virginia and not inconsistent with the
provisions of this Section 4.1.
(b) All Preferred Shares, regardless of series, shall rank on a parity
with all other Preferred Stock as to dividends (whether or not the dividend
rates or payment dates are different) and as to rights in the liquidation,
dissolution or winding up of affairs of the Corporation (whether or not the
redemption or liquidation prices are different).
4.2 Articles of Amendment. Before the issuance of any shares of a
series, Articles of Amendment establishing such series shall be filed with and
made effective by the State Corporation Commission of Virginia, as required by
law.
8
4.3 Series A Participating Preferred Shares
(a) Designation and Amount. Pursuant to a resolution adopted by the Board
----------------------
of Directors of the Corporation on November 2, 2001, 100,000 preferred shares
(no par value) are hereby constituted as a series of preferred shares of the
Corporation which shall be designated as "Series A Participating Preferred
Shares" (the "Series A Preferred Shares"), the preferences, limitations and
relative rights of which are set forth herein.
(b) Dividends and Distribution.
--------------------------
(i) The holders of Series A Preferred Shares, in preference to the holders
of Common Shares, no par value (the "Common Shares"), of the Corporation
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 fifteenth day of January, April, July and
October 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 Shares, in an amount per share (rounded to the
nearest cent) equal to the greater of (X) $1.00 or (Y) subject to the
provision 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 Common Shares or a
subdivision of the outstanding Common Shares (by reclassification or
otherwise), declared on the Common Shares, 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 share of Series A Preferred Shares. In the event the Corporation shall
at any time declare or pay any dividend on Common Shares payable in Common
Shares, or effect a subdivision or combination or consolidation of the
outstanding Common Shares (by reclassification or otherwise than by payment
of a dividend in Common Shares) into a greater or lesser number of Common
Shares, then in each such case the amount to which holders of Series A
Preferred Shares were entitled immediately prior to such event under clause
(Y) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which is
the number of Common Shares that were outstanding immediately prior to such
event.
The Corporation shall declare a dividend or distribution on the Series A
Preferred Shares as provided in this paragraph (i) immediately after it declares
a dividend or distribution on the Common Shares (other than a dividend payable
in Common Shares); provided that, in the event no dividend or distribution shall
have been declared on the Common Shares during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 per share on the Series A Preferred Shares shall nevertheless
be payable on such subsequent Quarterly Dividend Payment Date.
Dividends shall begin to accrue and be cumulative on outstanding Series A
Preferred Shares from the Quarterly Dividend Payment Date next preceding the
date of issue of such
9
Series A Preferred Shares, 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 Series A
Preferred Shares 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
Series A Preferred Shares 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
Series A Preferred Shares entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 60 days
prior to the date fixed for the payment thereof.
(c) Voting Rights. The holders of Series A Preferred Shares shall have
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the following voting rights:
(i) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Shares shall entitle the holder thereof to
1,000 votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on Common Shares payable in Common Shares, or effect a
subdivision or combination or consolidation of the outstanding Common
Shares (by reclassification or otherwise than by payment of a dividend in
Common Shares) into a greater or lesser number of Common Shares, then in
each such case the number of votes per share to which holders of Series A
Preferred Shares were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is
the number of Common Shares outstanding immediately after such event and
the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(ii) Except as otherwise provided herein or by law, the holders of Series
A Preferred Shares and the holders of Common Shares shall vote together as
one class on all matters submitted to a vote of shareholders of the
Corporation.
(iii) Except as set forth herein, holders of Series A Preferred Shares
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
Shares as set forth herein) for taking any corporate action.
(d) Certain Restrictions.
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(i) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Shares as provided in paragraph (b) are
in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on Series A Preferred Shares
outstanding shall have been paid in full, the Corporation shall not:
10
(A) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of the Corporation ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred
Shares;
(B) declare or pay dividends on or make any other distributions
on any shares of the Corporation ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Shares, except dividends paid ratably on the Series
A Preferred Shares and all such parity shares 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;
(C) redeem or purchase or otherwise acquire for consideration
any shares of the Corporation ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Shares, provided that the Corporation may at any
time redeem, purchase or otherwise acquire any such parity shares in
exchange for any shares of the Corporation ranking junior (either as
to dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Shares; or
(D) purchase or otherwise acquire for consideration any Series A
Preferred Shares, or any shares of the Corporation ranking on a parity
with the Series A Preferred Shares, 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.
(ii) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of the
Corporation unless the Corporation could, under subparagraph (i) of this
paragraph (d), purchase or otherwise acquire such shares at such time and
in such manner.
(e) Reacquired Shares. Any Series A Preferred Shares purchased or
-----------------
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation, and upon the taking of any action required by applicable
law, become authorized but unissued preferred shares and may be reissued as part
of a new series of preferred shares to be created by resolution or resolutions
of the Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
(f) Liquidation, Dissolution or Winding Up. Upon any voluntary
--------------------------------------
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made:
(A) to the holders of shares of the Corporation ranking junior
(either as to dividends or upon liquidation, dissolution or winding
up) to the Series A
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Preferred Shares unless, prior thereto, the holders of Series A
Preferred Shares shall have received an amount per share equal to the
greater of (i) $25,000 per share, or (ii) subject to the provision for
adjustment hereinafter set forth, 1000 times the aggregate amount to
be distributed per share to holders of Common Shares, plus in each
case an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment, or
(B) to the holders of shares of the Corporation ranking on a
parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Shares, except distributions
made ratably on the Series A Preferred Shares and all other such
parity shares in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or
winding up.
In the event the Corporation shall at any time declare or pay any dividend
on Common Shares payable in Common Shares, or effect a subdivision or
combination or consolidation of the outstanding Common Shares (by
reclassification or otherwise than by payment of a dividend in Common Shares)
into a greater or lesser number of Common Shares, then in each such case the
aggregate amount to which holders of Series A Preferred Shares were entitled
immediately prior to such event under the proviso in clause (A) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of Common Shares outstanding immediately after
such event and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(g) Consolidation, Merger, etc. In case the Corporation shall enter into
---------------------------
any consolidation, merger, combination or other transaction in which the Common
Shares are exchanged for or changed into other shares or securities, cash and/or
any other property, then in any such case the Series A Preferred Shares 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 shares, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Shares is changed or exchanged. In the event the Corporation shall at any time
declare or pay any dividend on Common Shares payable in Common Shares, or effect
a subdivision or combination or consolidation of the outstanding Common Shares
(by reclassification or otherwise than by payment of a dividend in Common
Shares) into a greater or lesser number of Common Shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of Series A Preferred Shares shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to such event.
(h) No Redemption. The Series A Preferred Shares shall not be redeemable.
-------------
(i) Amendment. The Articles of Incorporation of the Corporation shall not
---------
be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Shares so as to
affect them adversely without
12
the affirmative vote of the holders of two-thirds or more of the
outstanding Series A Preferred Shares voting together as a single class.
ARTICLE V
Common Shares
5.1 Voting Rights. The holders of outstanding Common Shares shall, to
the exclusion of the holders of any other class of shares of the Corporation,
have the sole power to vote for the election of directors and for all other
purposes without limitation, except (i) as otherwise provided in the Articles of
Amendment establishing any series of Preferred Shares or (ii) as may be required
by law.
5.2 Distributions. Subject to the rights of the holders of shares, if
any, ranking senior to the Common Shares as to dividends or rights in the
liquidation, dissolution or winding up of the affairs of the Corporation, the
holders of the Common Shares shall be entitled to distributions, including
dividends, when declared by the Board of Directors and to the net assets of the
Corporation upon the liquidation, dissolution or winding up of the affairs of
the Corporation.
ARTICLE VI
Limit on Liability and Indemnification
6.1 Definition. For purposes of this Article the following definitions
shall apply:
(i) "Corporation" means this corporation only and no predecessor entity
or other legal entity;
(ii) "expenses" include counsel fees, expert witness fees, and costs of
investigation, litigation and appeal, as well as any amounts expended in
asserting a claim for indemnification;
(iii) "liability" means the obligation to pay a judgment, settlement,
penalty, fine, or other such obligation, including, without limitation, any
excise tax assessed with respect to an employee benefit plan;
(iv) "legal entity" means a corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise;
(v) "predecessor entity" means a legal entity the existence of which
ceased upon its acquisition by the Corporation in a merger or otherwise;
and
(vi) "proceeding" means any threatened, pending, or completed action,
suit, proceeding or appeal whether civil, criminal, administrative or
investigative and whether formal or informal.
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6.2 Limit on Liability. In every instance in which the Virginia Stock
Corporation Act, as it exists on the date hereof or may hereafter be amended,
permits the limitation or elimination of liability of directors or officers of a
corporation to the corporation or its shareholders, the directors and officers
of this Corporation shall not be liable to the Corporation or its shareholders.
6.3 Indemnification of Directors and Officers. The Corporation shall
indemnify any individual who is, was or is threatened to be made a party to a
proceeding (including a proceeding by or in the right of the Corporation)
because such individual is or was a director or officer of the Corporation or
because such individual is or was serving the Corporation, or any other legal
entity in any capacity at the request of the Corporation while a director or
officer of the Corporation, against all liabilities and reasonable expenses
incurred in the proceeding except such liabilities and expenses as are incurred
because of such individual's willful misconduct or knowing violation of the
criminal law. Service as a director or officer of a legal entity controlled by
the Corporation shall be deemed service at the request of the Corporation. The
determination that indemnification under this Section 6.3 is permissible and the
evaluation as to the reasonableness of expenses in a specific case shall be
made, in the case of a director, as provided by law, and in the case of an
officer, as provided in Section 6.4 of this Article; provided, however, that if
a majority of the directors of the Corporation has changed after the date of the
alleged conduct giving rise to a claim for indemnification, such determination
and evaluation shall, at the option of the person claiming indemnification, be
made by special legal counsel agreed upon by the Board of Directors and such
person. Unless a determination has been made that indemnification is not
permissible, the Corporation shall make advances and reimbursements for expenses
incurred by a director or officer in a proceeding upon receipt of an undertaking
from such director or officer to repay the same if it is ultimately determined
that such director or officer is not entitled to indemnification. Such
undertaking shall be an unlimited, unsecured general obligation of the director
or officer and shall be accepted without reference to such director's or
officer's ability to make repayment. The termination of a proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent shall not of itself create a presumption that a director or
officer acted in such a manner as to make such director or officer ineligible
for indemnification. The Corporation is authorized to contract in advance to
indemnify and make advances and reimbursement for expenses to any of its
directors or officers to the same extent provided in this Section 6.3.
6.4 Indemnification of Others. The Corporation may, to a lesser extent
or to the same extent that it is required to provide indemnification and make
advances and reimbursements for expenses to its directors and officers pursuant
to Section 6.3, provide indemnification and make advances and reimbursements for
expenses to its employees and agents, the directors, officers, employees and
agents of its subsidiaries and predecessor entities, and any person servicing
any other legal entity in any capacity at the request of the Corporation, and
may contract in advance to do so. The determination that indemnification and
the evaluation as to the reasonableness of expenses in a specific case shall be
made as authorized from time to time by general or specific action of the Board
of Directors, which action may be taken before or after a claim for
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indemnification is made, or as otherwise provided by law. No person's rights
under Section 6.3 of this Article shall be limited by the provisions of this
Section 6.4.
6.5 Miscellaneous. The rights of each person entitled to indemnification
under this Article shall inure to the benefit of such person's heirs, executors
and administrators. Special legal counsel selected to make determinations under
this Article may be counsel for the Corporation. Indemnification pursuant to
this Article shall not be exclusive of any other right of indemnification to
which any person may be entitled, including indemnification pursuant to a valid
contract, indemnification by legal entities other than the Corporation and
indemnification under policies of insurance purchased and maintained by the
Corporation or others. However, no person shall be entitled to indemnification
by the Corporation to the extent such person is indemnified by another,
including an insurer. The Corporation is authorized to purchase and maintain
insurance against any liability it may have under this Article or to protect any
of the persons named above against any liability arising from their service to
the Corporation or any other legal entity at the request of the Corporation
regardless of the Corporation's power to indemnify against such liability. The
provisions of this Article shall not be deemed to preclude the Corporation from
entering into contracts otherwise permitted by law with any individuals or legal
entities, including those named above. If any provision of this Article or its
application to any person or circumstance is held invalid by a court of
competent jurisdiction, the invalidity shall not affect other provisions or
applications of this Article, and to this end the provisions of this Article are
severable.
6.6 Application; Amendments. The provisions of this Article shall be
applicable from and after its adoption even though some or all of the underlying
conduct or events relating to a proceeding may have occurred before its
adoption. No amendment, modification or repeal of this Article shall diminish
the rights provided hereunder to any person arising from conduct or events
occurring before the adoption of such amendment, modification or repeal.
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