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EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
of
BITSTREAM INC.
It is hereby certified that:
1. The current name of the corporation (hereinafter
called the "Corporation") is Bitstream Inc.; the Corporation was originally
incorporated under the name Bitstream Inc., and the date of filing of the
original Certificate of Incorporation of the Corporation with the Secretary of
State of the State of Delaware is April 15, 1996.
2. The provisions of the Certificate of Incorporation of
the Corporation are hereby amended and restated into the single instrument which
is hereinafter set forth, and which is entitled "Restated Certificate of
Incorporation of Bitstream Inc."
3. This Restated Certificate of Incorporation is hereby
adopted in accordance with Sections 242 and 245 of the General Corporation Law
of the State of Delaware.
4. The Certificate of Incorporation of the Corporation
is hereby amended and restated to set forth its entire text as amended and
restated as follows:
FIRST: The name of the corporation is Bitstream
Inc. (the "Corporation").
SECOND: The address of the Corporation's registered
office in the State of Delaware is No. 15 East North Street, in the City of
Dover, County of Kent, State of Delaware; and its registered agent at such
address is United Corporate Services, Inc.
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THIRD: The purpose of the Corporation is to engage
in, carry on and conduct any lawful act or activity for which corporations may
be organized under the Delaware General Corporation Law.
FOURTH: The total number of shares of stock that the
Corporation shall have authority to issue is 40,500,000, divided as follows: (a)
30,500,000 shares of Common Stock (i) 30,000,000 shares of which shall be Class
A Common Stock, par value $.01 per share and (ii) 500,000 shares of which shall
be Class B Common Stock, par value $.01 per share, and (b) 10,000,000 shares of
Preferred Stock (i) 6,000,000 shares of which shall be Preferred Stock, par
value $.01 per share, (ii) 3,000,000 shares of which shall be Class A Preferred
Stock, par value $.01 per share and (iii) 1,000,000 shares of which shall be
Class B Preferred Stock, par value $.01 per share.
A. COMMON STOCK
The Common Stock shall have the rights, powers,
qualifications, limitations, and the restrictions as provided below:
1. Voting Rights. The holders of the Common Stock of
the Corporation shall have the following voting rights.
1.1. Class A Common Stock. Except as otherwise
provided by law or this Restated Certificate of Incorporation,
the holders of Class A Common Stock shall have full voting
rights and powers and shall vote together with the holders of
the Class A Preferred Stock as a single class, and each share
of Class A Common Stock shall be entitled to one vote.
1.2. Class B Common Stock. Each outstanding share of
Class B Common Stock shall not be entitled to vote on any
matter on which the stockholders of the Corporation shall be
entitled to vote, and shares of Class B Common Stock shall not
be included in determining the number of shares voting or
entitled to vote on any such matters, except as set forth
herein or as otherwise required by law; provided that,
notwithstanding the foregoing, holders of shares of the Class
B Common Stock shall be entitled to vote as a separate class
on any amendment to this Section 1.2, or as otherwise required
by law.
2. Dividends.
2.1. General. Subject to Section 2.2 below, the Board
of Directors of the Corporation may cause dividends to be paid
to holders of shares of all classes of the Common Stock and
such holders shall share and share alike, and
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without distinction as to class, out of funds then legally
available for the payment of dividends subject to any
provisions of these Articles as amended from time to time
provided that dividends previously have been or simultaneously
are declared on the Preferred Stock.
2.2. Non-Cash. In the case of dividends payable in
shares of Common Stock of the Corporation, or options,
warrants or rights to acquire shares of such Common Stock, or
securities convertible into or exchangeable for shares of such
Common Stock, the shares, options, warrants, rights or
securities so payable shall be payable in shares of, or
options, warrants or rights to acquire, or securities
convertible into or exchangeable for Common Stock of the same
class upon which the dividend or distribution is being paid.
3. Liquidation. Upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, after the
payment or provision for payment of all debts and liabilities of the Corporation
and all preferential amounts to which the holders of the Preferred Stock are
entitled with respect to the distribution of assets in liquidation, the holders
of all classes of Common Stock shall be entitled to share ratably, and without
distinction as to class, in the remaining assets of the Corporation available
for distribution.
4. Optional Conversion. Subject to and upon compliance
with the provisions of this Section 4, and the exception stated at Section 4.6,
any Regulated Stockholder (as defined in Section 4.7 below) shall have the right
to convert, at any time and from time to time, any or all of the shares of Class
A Common Stock held by such stockholder into the same number of shares of Class
B Common Stock, and any holder of Class B Common Stock shall have the right to
convert any or all of the shares of Class B Common Stock held by such
stockholder into the same number of shares of Class A Common Stock, as follows:
4.1. Exercise of Option. Each conversion of shares of
the Common Stock of the Corporation into shares of another
class of the Common Stock of the Corporation shall be effected
in the same manner as provided for the conversion of preferred
stock at Section C.4.6. below, with the following exceptions
for any Regulated Stockholder (as defined below):
4.1.1. Expiration of Deferral Period. If such
conversion falls subject to Section 4.1.2 below, the
Corporation shall not issue the certificates for the
converted shares until the expiration of the Deferral
Period referred to therein, and no conversion of the
shares of a Regulated Stockholder shall
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be deemed effective except upon the expiration of
such Deferral Period.
4.1.2. Deferral Notice. The Corporation shall
not convert or directly or indirectly redeem,
purchase or otherwise acquire any shares of Class A
Common Stock or any other class of capital stock of
the Corporation or take any other action affecting
the voting rights of such shares, if such action will
increase the percentage of any class of outstanding
voting securities owned or controlled by any
Regulated Stockholder (other than any such
stockholder who requests that the Corporation take
such action, or that otherwise waives in writing its
rights under this Section 4.1) unless the Corporation
gives written notice (the "Deferral Notice") of such
action to each Regulated Stockholder.
4.1.3. Deferral Period. The Corporation will
defer making any conversion, redemption, purchase or
other acquisition, or taking any such other action
described in Section 4.1.2, for a period of ten (10)
business days (the "Deferral Period") after giving
the Deferral Notice in order to allow each Regulated
Stockholder to determine whether it wishes to convert
or take any other action with respect to any Common
Stock it owns, controls or has the power to vote.
4.1.4. Response by Regulated Stockholder during
Deferral Period. If any such Regulated Stockholder
then elects to convert any shares of Class A Common
Stock it shall notify the Corporation in writing
within five (5) business days of the giving of the
Deferral Notice, in which case the Corporation shall
(i) defer taking the pending action until the end of
the Deferral Period, (ii) promptly notify from time
to time each other Regulated Stockholder holding
shares of each proposed conversion and the proposed
transactions, and (iii) effect the conversion
requested by all Regulated Stockholders in response
to the notices issued pursuant to this Section 4.1.4.
at the end of the Deferral Period.
4.2. Stock Splits. If the Corporation shall in any
manner subdivide (by stock split, stock dividend or otherwise)
or combine (by reverse split or otherwise) the outstanding
shares of the Class A Common Stock, the outstanding shares of
each other class of Common Stock shall be subdivided or
combined, as the case may be, to the same extent, share and
share alike, and effective provi-
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sion shall be made for the protection of the conversion rights
hereunder. In the case of any reorganization, reclassification
or change of shares of the Common Stock (other than a change
in par value or from par to no par value as a result of a
subdivision or combination), or in case of any consolidation
of the Corporation with one or more corporations or a merger
of the Corporation with another corporation, or in the case of
any sale, lease or other disposition of all or substantially
all of the assets of the Corporation, each holder of a share
of the Common Stock, irrespective of class, shall have the
right at any time thereafter, so long as the conversion right
hereunder with respect to such share would exist had such
event not occurred, to convert such share into the kind and
amount of shares of stock and other securities and properties
(including cash) receivable upon such reorganization,
reclassification, change, consolidation, merger, sale, lease
or other disposition (each a "Disposition") by a holder of the
number of shares of the class of the Common Stock into which
such shares of the Common Stock might have been converted
immediately prior to such reclassification, change,
consolidation, merger, sale, lease or other disposition. In
the event of such a Disposition, effective provision shall be
made in the Certificate of Incorporation of the resulting or
surviving corporation or otherwise for the protection of the
conversion rights of the shares of the Common Stock of each
class that shall be applicable, as nearly as reasonably may
be, to any such other shares of stock and other securities and
property deliverable upon conversion of shares of the Common
Stock into which such Common Stock might have been converted
immediately prior to such event. The Corporation shall not be
a party to a Disposition pursuant to which any Regulated
Stockholder would be required to take (i) any voting
securities that would cause such holder to violate any law,
regulation or other requirement of any governmental body
applicable to such holder, or (ii) any securities convertible
into voting securities which if such conversion took place
would cause such holder to violate any law, regulation or
other requirement of any governmental body applicable to such
holder other than securities that are specifically provided to
be convertible only in the event that such conversion may
occur without any such violation.
4.3. Capital Reorganization, Merger or Sale of
Assets. If at any time or from time to time there shall be a
capital reorganization of the Common Stock (other than a
subdivision, combination, recapitalization, reclassification
or exchange of shares provided for elsewhere in this Section
4) or a merger or consolidation of the Corporation with or
into another corporation (other than
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a merger or reorganization involving only a change in the
state of incorporation where the Corporation survives as a
going concern as further provided in Section 3.2. of Part C.
hereof), or the sale of all or substantially all of the
Corporation's capital stock or assets to any other person,
then, as a part of such reorganization, merger, or
consolidation or sale, provision shall be made so that the
holders of the Common Stock shall thereafter be entitled to
receive upon conversion of the Common Stock the number of
shares of stock or other securities or property of the
Corporation, or of the successor corporation resulting from
such merger, consolidation or sale, to which such holder would
have been entitled if such holder had converted its shares of
Common Stock immediately prior to such capital reorganization,
merger, consolidation or sale. In any such case, appropriate
adjustment shall be made in the application of the provisions
of this Section 4 to the end that the number of the shares of
Common Stock or other securities issuable upon conversion of
such shares of Common Stock shall be applicable after that
event in as nearly equivalent a manner as may be practicable.
4.4. Reservation of Shares. The Corporation shall at
all times reserve and keep available out of its authorized but
unissued shares of its Common Stock a sufficient number of
shares as from time to time shall permit the conversion of all
outstanding shares of Class B Common Stock into Class A Common
Stock (including any such shares represented by outstanding
warrants, options, subscription or purchase rights). If at any
time the number of authorized but unissued shares of Common
Stock shall prove insufficient to effect the conversion of all
such outstanding or promised shares, then the Corporation
shall take such action as may be necessary to increase its
authorized but unissued shares of Common Stock to a sufficient
number to accomplish a complete conversion.
4.5. Stock Transfer Taxes. The issuance of
certificates for shares of any class of Common Stock upon
conversion of shares of any other class of Common Stock shall
be made without charge to the holders of such shares of any
issuance tax in respect thereof or other cost incurred by the
Corporation in connection with such conversion and the related
issuance of shares of Common Stock. The Corporation shall not,
however, be required to pay any tax that may be payable in
respect of any transfer involved in the issuance and delivery
of any certificate in any name other than that of the holder
of the Common Stock converted, and the Corporation shall not
be required to issue or deliver any such stock certificate,
unless and until the person or persons requesting the issue
thereof shall have paid to the Corporation the
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amount of such tax or shall have established to the
satisfaction of the Corporation that such tax has been paid.
4.6. Exception. No holder of shares of Class B Common
Stock may convert any such shares to the extent that, as a
result of such conversion, such holder and its Affiliates (as
defined pursuant to Section 4.7 below), directly or
indirectly, would own, control or have the power to vote a
greater number of shares of Class A Common Stock or other
securities of any kind issued by the Corporation than such
holder and its Affiliates shall be permitted to own, control
or have the power to vote under any law, regulation, rule or
other requirement of any governmental authority at the time
applicable to such holder or its Affiliates.
4.7. Definitions. The following terms shall have the
meanings shown below for the purposes of this Section:
4.7.1. Affiliate. shall mean with respect to any
Person, any other person, directly or indirectly
controlling, controlled by or under common control
with such Person. For the purpose of the above
definition, the term "control" (including with
correlative meaning, "controlling," "controlled by,"
"under common control with"), as used with respect to
any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the
direction of the management and policies of such
Person, whether through the ownership of voting
securities or by contract or otherwise.
4.7.2. "Person" shall mean an individual, a
partnership, corporation, trust, joint venture, an
unincorporated association, or a government or any
department or agency thereof.
4.7.3. "Regulated Stockholder" shall mean (i)
any stockholder that is subject to the provisions of
Regulation Y of the Board of Governors of the Federal
Reserve System (12 C.F.R. Part 225) or any successor
to such regulation ("Regulation Y") and which holds
shares of Class B Common Stock or Class B Preferred
Stock of the Corporation as of the date of this
Restated Certificate of Incorporation or shares of
Class B Common Stock or Class B Preferred Stock of
the Corporation which were issued upon the conversion
of shares of Class B Common Stock or Class B
Preferred Stock, as the case may be, of Bitstream
Inc., a Massachusetts
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corporation (the "Predecessor Corporation") in
connection with the merger of the Predecessor
Corporation with and into the Corporation, so long as
such stockholder shall hold such shares of Common
Stock or Preferred Stock or shares issued upon
conversion of such shares, (ii) any Affiliate of any
such Regulated Stockholder that is a transferee of
any shares of Common Stock or Preferred Stock of the
Corporation, so long as such Affiliate shall hold,
and only with respect to, such shares of Common Stock
or Preferred Stock or shares issued upon conversion
of such shares and (iii) any Person to which such
Regulated Stockholder or any of its Affiliates has
transferred such shares, so long as such transferee
shall hold, and only with respect to, any shares
transferred by such stockholder or Affiliates or any
shares issued upon conversion of such shares but only
if such Person (or any Affiliate of such Person)
falls subject to the provisions of Regulation Y.
B. UNDESIGNATED PREFERRED STOCK
1. The shares of Preferred Stock of the Corporation may
be issued from time to time in one or more classes or series of any number of
shares, provided that the aggregate number of shares issued and not cancelled of
any and all such classes or series shall not exceed the total number of shares
of Preferred Stock hereinabove authorized, and with distinctive serial
designations, all as shall hereafter be stated and expressed in the resolutions
or resolutions providing for the issue of such shares of Preferred Stock from
time to time adopted by the Board of Directors of the Corporation pursuant to
authority to do so which is hereby vested in the Board of Directors. Each series
of shares of Preferred Stock (a) may have such voting powers, full or limited,
or may be without voting powers; (b) may be subject to redemption at such time
or times and at such prices; (c) may be entitled to receive dividends (which may
be cumulative or non-cumulative) at such rate or rates, on such conditions and
at such times, and payable in preference to, or in such relation to, the
dividends payable on any other class or classes or series of stock; (d) may have
such rights upon the voluntary or involuntary liquidation, winding up
dissolution of, or upon any distribution of the assets of, the Corporation; (e)
may be made convertible into or exchangeable for, shares of any other class or
classes or of any other series of the same or any other class or classes of
shares of the Corporation at such prices or at such rates of exchange and with
such adjustments; (f) may be entitled to the benefit of a sinking fund to be
applied to the purchase or redemption of shares of such series in such amount or
amounts; (g) may be entitled to the benefit of conditions and restrictions upon
the creation of indebtedness of the Corporation or any subsid-
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iary, upon the issue of any additional shares (including additional shares of
such classes or series or of any other classes or series), upon the amendment of
this Restated Certificate of Incorporation and upon the payment of dividends or
the making of other distributions on, and the purchase, redemption or other
acquisition by the Corporation or any subsidiary of, any outstanding shares of
the Corporation and (h) may have such other relative, participating, optional or
other special rights, qualifications, limitations or restrictions thereof; all
as shall be stated in said resolution or resolutions providing for the issue of
such shares of Preferred Stock. Shares of Preferred Stock of any classes or
series that have been redeemed (whether through the operation of a sinking fund
or otherwise) or that if convertible or exchangeable, have been converted into
or exchanged for shares of any other classes or series shall have the status of
authorized and unissued shares of Preferred Stock of the same classes or series
and may be reissued as a part of the classes or series of which they were
originally a part or may be reclassified and reissued as part of a new class or
series of shares of Preferred Stock to be created by resolution or resolutions
of the Board of Directors or as part of any other class or series of shares of
Preferred Stock, all subject to the conditions or restrictions on issuance set
forth in the resolution or resolutions adopted by the Board of Directors
providing for the issue of any classes or series of shares of Preferred Stock.
C. CLASS A PREFERRED STOCK AND CLASS B PREFERRED STOCK
The Class A Preferred Stock and Class B Preferred Stock shall be subject to the
rights, powers, qualifications, limitations, and restrictions provided below:
1. Voting Rights. The holders of the Class A Preferred
Stock and Class B Preferred Stock of the Corporation shall have the following
voting rights:
1.1. Class A Preferred Stock. Except as otherwise
provided by law or this Restated Certificate of Incorporation,
the holders of Class A Preferred Stock shall have full voting
rights and powers and shall vote together with the holders of
the Class A Common Stock as a single class, with each share of
Class A Preferred Stock entitled to the number of votes that
such share would have possessed if such share had been
converted (pursuant to Section 4 below) to Class A Common
Stock as of the record date for such vote. Notwithstanding the
foregoing, the following actions shall require the affirmative
votes of a majority of the issued and then outstanding shares
of Class A Preferred Stock:
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1.1.1. The merger or consolidation of the
Corporation with or into any other corporation (other
than a wholly-owned subsidiary of the Corporation),
or the sale, assignment, lease or other disposition
(whether in one transaction or in a series of
transactions) of all or substantially all of the
Corporation's assets (whether now owned or hereafter
acquired);
1.1.2. The establishment by the Board of
Directors of the Corporation of a new class of
preferred stock with rights or preferences equal to
or superior to the Class A Preferred Stock;
1.1.3. The redemption or repurchase by the
Corporation of any shares of the Corporation's
capital stock, except pursuant to the rights granted
by stock options, warrants, and/or employee benefit
plans of the Corporation (the "Option Plans") issued
under such Option Plans and options; or
1.1.4. Any amendment to the Restated Certificate
of Incorporation of the Corporation which would
adversely affect the rights of the holders of the
Preferred Stock.
1.2. Class B Preferred Stock. Each outstanding share
of Class B Preferred Stock shall not be entitled to vote on
any matter on which the stockholders of the Corporation shall
be entitled to vote, and shares of Class B Preferred Stock
shall not be included in determining the number of shares
voting or entitled to vote on any such matters, except as set
forth herein or as otherwise required by law; provided that,
notwithstanding the foregoing, holders of shares of the Class
B Preferred Stock shall be entitled to vote as a separate
class on any amendment to this Section 1.2, or as otherwise
required by law.
2. Dividends.
2.1. General. The holders of Preferred Stock shall be
entitled to receive when, as and if declared by the Board of
Directors, out of funds then legally available therefor, such
dividends as equal the amount of dividends that the holders of
Class A Preferred Stock and Class B Preferred Stock would have
received had such holders converted such Preferred Stock to
Common Stock (pursuant to Section 4.1. below) on the record
date for the declaration of such dividends.
2.2. Non-Cash. In the case of dividends payable in
shares of Common Stock of the Corporation, or options,
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warrants or rights to acquire shares of such Common Stock, or
securities convertible into or exchangeable for shares of such
Common Stock, the holders of Class A Preferred Stock shall be
paid in shares of, or options, warrants or rights to acquire,
or securities convertible into or exchangeable for Class A
Common Stock, and the holders of Class B Preferred Stock shall
be paid in shares of, or options, warrants or rights to
acquire, or securities convertible into or exchangeable for
Class B Common Stock,
3. Liquidation.
3.1. Rights on Liquidation. In the event of any
liquidation, dissolution or winding up of the Corporation
(voluntary or involuntary), all of the property and assets of
the Corporation (whether from capital, surplus or earnings)
then available for distribution to the Corporation's
stockholders (the "Distribution Assets") shall be distributed
such that each holder of shares of Class A Preferred Stock and
Class B Preferred Stock shall receive $0.942 for each
preferred share then held by such holder before payment is
made on any share of Common Stock.
3.2. Merger or Consolidation. A merger or a
consolidation to which the Corporation is a party (other than
a merger with or into a wholly-owned subsidiary of the
Corporation), or a sale or lease of all or part of the assets
of the Corporation, shall be deemed a liquidation, dissolution
or winding up of the Corporation for the purposes of this
Section 3 with respect to any event that yields consideration
valued in the good faith judgment of the Board of Directors
less than $0.942 per share, (for purposes of this Section 3, a
"Merger or Sale of Corporation").
3.2.1. Merger Notice. No later than twenty (20)
days before the occurrence of any such Merger or Sale
of Corporation, the Corporation shall deliver a
notice to each holder of Class A Preferred Stock and
Class B Preferred Stock setting forth the principal
terms of such Merger or Sale of Corporation. Such
notice shall be deemed delivered upon personal
delivery or upon deposit in the United States mail,
by registered or certified mail, addressed to each
party at its address shown on the stock records of
the Corporation. Such notice shall include a
description of the amounts that would be paid to
holders of Class A Preferred Stock and Class B
Preferred Stock under Section 3 and of the
consideration that such holders would receive if they
exercised their rights under Section 4.6. to have
shares of Class A Preferred Stock and Class B
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Preferred Stock treated as if they had been converted
into Common Stock.
3.2.2. Election. No later than ten (10) days
after delivery of the notice, each holder of Class A
Preferred Stock and Class B Preferred Stock may
deliver an election to the Corporation notifying the
Corporation that the holder desires (i) to have such
holder's shares of Class A and Class B Preferred
Stock treated, pursuant to Section 4.6., as if they
had been converted into shares of Common Stock or
(ii) to receive such amounts as provided for under
this Section 3.
4. Conversion Rights. The holders of the Preferred
Stock shall have the following rights with respect to the conversion of such
shares into shares of Common Stock.
4.1. General.
4.1.1. Class A Preferred Stock and Class B
Preferred Stock. For purpose of this Section 4, in
each instance that a share of Preferred Stock is
referred to as being convertible into Common Stock,
in the case of Class A Preferred Stock, such share is
convertible only into Class A Common Stock, and in
the case of Class B Preferred Stock, such share is
convertible only into Class B Common Stock.
4.1.2. Conversion. Subject to and in compliance
with the provisions of this Section 4, any shares of
the Class A Preferred Stock and Class B Preferred
Stock may, at the option of any holder, be converted
at any time into an equal number of fully-paid and
non-assessable shares of Common Stock.
4.2. Automatic Conversion Upon Initial Public
Offering or Election of Preferred Stock.
4.2.1. Mandatory Conversion of Preferred Stock.
Immediately upon the effectiveness of an underwritten
public offering on a firm commitment basis pursuant
to an effective registration statement filed pursuant
to the Securities Act of 1933, as amended, covering
the offer and sale of Common Stock for the account of
the Corporation in which the Corporation actually
receives gross proceeds equal to or greater than
$5,000,000 (calculated after deducting underwriter's
discounts and commissions but before calculations of
expenses), and in which the price per share of Common
Stock equals or
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exceeds $3.00 per share (such price to be subject to
equitable adjustment in the event of any stock
dividend, stock split, combination, reorganization,
recapitalization, reclassification or other similar
event involving a change in the capital structure of
the Corporation), then all of the outstanding shares
of Class A Preferred Stock and Class B Preferred
Stock shall be converted automatically into the
number of shares of Common Stock into which such
shares of Common Stock are then convertible pursuant
to this Section 4 as of the effectiveness of such
underwritten public offering, without the need of any
further action by the holders of such shares and
whether or not the certificates representing such
shares are surrendered to the Corporation or any
transfer agent for the Corporation.
4.2.2. Surrender of Certificate Upon Mandatory
Conversion. Upon the occurrence of the conversion
event specified in the preceding paragraph 4.2.1.,
the holders of the Class A Preferred Stock and Class
B Preferred Stock shall, upon notice from the
Corporation, surrender the certificates representing
such shares at the office of the Corporation or of
its transfer agent for the Common Stock. Thereupon,
there shall be issued and delivered to such holder a
certificate for the number of shares of Common Stock
into which the shares of Class A Preferred Stock and
Class B Preferred Stock so surrendered were
convertible on the date on which such conversion
occurred. The Corporation shall not be obligated to
issue such certificates unless certificates
evidencing the shares of Class A Preferred Stock and
Class B Preferred Stock being converted are either
delivered to the Corporation or any such transfer
agent, or the holder notifies the Corporation that
such certificates have been lost, stolen, or
destroyed and executes an agreement satisfactory to
the Corporation to indemnify it from any loss
incurred in connection therewith.
4.3. Capital Reorganization or Reclassification. If
the Common Stock issuable upon the conversion of the Class A
Preferred Stock and Class B Preferred Stock shall be changed
into the same or different number of shares of any class or
classes of capital stock, whether by capital reorganization,
recapitalization, reclassification, split up or otherwise
(other than a subdivision or combination of shares or
subdivision or combination of shares or stock dividend (as
provided for elsewhere in this Section 4), or
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the sale of all or substantially all of the Corporation's
capital stock or assets to any other person), then and in each
such event the holder of each share of Class A Preferred Stock
and Class B Preferred Stock shall have the right thereafter to
convert such share into the kind and the amount of shares of
capital stock and other securities and property receivable
upon such reorganization, recapitalization, reclassification,
or other change by the holders of the number of shares of
Common Stock into which the Class A Preferred Stock and Class
B Preferred Stock might have been converted immediately prior
to such reorganization, recapitalization, reclassification or
change, all subject to further adjustment as provided herein.
4.4. Capital Reorganization, Merger or Sale of
Assets. If at any time or from time to time there shall be a
capital reorganization of the Common Stock (other than a
subdivision, combination, recapitalization, reclassification
or exchange of shares provided for elsewhere in this Section
4) or a merger or consolidation of the Corporation with or
into another corporation (other than a merger or
reorganization involving only a change in the state of
incorporation where the Corporation survives as a going
concern as further provided in Section 3.2. hereof), or the
sale of all or substantially all of the Corporation's capital
stock or assets to any other person, then, as a part of such
reorganization, merger, or consolidation or sale, provision
shall be made so that the holders of the Class A Preferred
Stock and Class B Preferred Stock shall thereafter be entitled
to receive upon conversion of the Class A Preferred Stock and
Class B Preferred Stock the number of shares of stock or other
securities or property of the Corporation, or of the successor
corporation resulting from such merger, consolidation or sale,
to which such holder would have been entitled if such holder
had converted its shares of Class A Preferred Stock and Class
B Preferred Stock immediately prior to such capital
reorganization, merger, consolidation or sale. In any such
case, appropriate adjustment shall be made in the application
of the provisions of this Section 4 to the end that the
provisions of this Section 4 (including adjustments of the
Applicable Conversion Value then in effect and the number of
the shares of Common Stock or other securities issuable upon
conversion of such shares of Class A Preferred Stock and Class
B Preferred Stock) shall be applicable after that event in as
nearly equivalent a manner as may be practicable.
4.5. Certificate as to Adjustments; Notice by
Corporation. In each case of an adjustment or readjustment of
the Applicable Conversion Rate, the Corporation at its
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expense will furnish each holder of Class A Preferred Stock
and Class B Preferred Stock with a certificate prepared by the
Treasurer or Chief Financial Officer of the Corporation,
showing such adjustment or readjustment, and stating in detail
the facts upon which such adjustment or readjustment is based.
4.6. Voluntary Conversion. The shares' conversion
privilege may be exercised as follows:
4.6.1. Holder to Initiate. A holder of the
Preferred Stock shall:
4.6.1.1. Surrender the certificate or
certificates representing the shares being
converted to the Corporation at its principal
office;
4.6.1.2. Give written notice to the
Corporation at that office that such holder
elects to convert such shares, including the
name or names with address or addresses in which
the certificate or certificates for shares of
Common Stock issuable upon such conversion shall
be issued (the "Conversion Notice").
4.6.1.3. Include a proper assignment,
either to the Corporation or in blank, of the
certificate or certificates for shares of
Preferred Stock surrendered.
4.6.2. Corporation to Deliver. The Corporation
shall, as promptly as practicable after the
Conversion Date, issue and deliver to the holder of
the shares of Class A Preferred Stock and Class B
Preferred Stock being converted, or to its written
order, such certificate(s) as the holder may request
for the number of shares of Common Stock issuable
upon the conversion of such shares of Class A
Preferred Stock and Class B Preferred Stock in
accordance with the provisions of this Section 4, and
cash, as provided in Section 4.7., in respect of any
fraction of a share of Common Stock issuable upon
such conversion.
4.6.3. Holder of Converted Shares. The person(s)
in whose name or names any certificate(s) for shares
of Common Stock shall be issuable upon such
conversion shall be deemed the holder or holders of
record of the shares of Common Stock represented
thereby.
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4.6.4. Date of Conversion. The date that the
Corporation receives the stockholder's written notice
together with the certificate or certificates
representing the shares of Class A Preferred Stock
and Class B Preferred Stock being converted shall be
the "Conversion Date". The conversion shall be deemed
effective immediately prior to the close of business
on the Conversion Date, and at such time the rights
of the holder shall cease as holder of the converted
shares of Class A Preferred Stock and Class B
Preferred Stock.
4.7. Cash in Lieu of Fractional Shares. No fractional
shares of Common Stock or scrip representing fractional shares
shall be issued upon the conversion of shares of Class A
Preferred Stock and Class B Preferred Stock. Instead of any
fractional shares of Common Stock which would otherwise be
issuable upon conversion of Class A Preferred Stock and Class
B Preferred Stock, the Corporation shall pay to the holder of
the shares of the Class A Preferred Stock and Class B
Preferred Stock which were converted a cash adjustment in
respect of such fractional shares in an amount equal to the
product obtained by multiplying the same fraction by 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 aggregate number of shares of Class A Preferred
Stock and Class B Preferred Stock being converted at any one
time by any holder thereof, not upon each share of Class A
Preferred Stock and Class B Preferred Stock being converted.
4.8. Partial Conversion. In the event that some but
not all of the shares of Class A Preferred Stock and Class B
Preferred Stock represented by a certificate(s) surrendered by
a holder are converted, a new certificate representing the
number of shares of Preferred Stock which were not converted
shall be issued to the holder at the Corporation's expense.
4.9. Reservation of Common Stock. The Corporation
shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock a sufficient
number of shares of Common Stock of each class as from time to
time shall permit the conversion of all outstanding shares of
the Class A Preferred Stock and Class B Preferred Stock
(including any such shares represented by outstanding
warrants, options, subscription or purchase rights). If at any
time the number of authorized but unissued shares of Common
Stock
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shall prove insufficient to effect the conversion of all such
outstanding or promised Class A Preferred Stock and Class B
Preferred Stock, then the Corporation shall take such action
as may be necessary to increase its authorized but unissued
shares of Common Stock to a sufficient number to accomplish a
complete conversion.
4.10. No Reissuance of Preferred Stock. No share(s)
of Class A Preferred Stock and Class B Preferred Stock
reacquired by the Corporation by redemption, purchase,
conversion or otherwise, shall be reissued, and all such
reacquired shares shall be cancelled, retired, and eliminated
from the shares that the Corporation shall be authorized to
issue. The Corporation shall from time to time take such
corporate action as may be necessary and appropriate to reduce
the authorized number of shares of the Class A Preferred Stock
and Class B Preferred Stock to correspond with such
reacquisitions.
4.11. Notices of Record Date. In the event of any
taking by the Corporation of a record of the holders of any
class of securities for the purpose of determining the holders
thereof who are entitled (i) to receive any dividend or other
distribution, any Common Stock or Preferred Stock, or any
right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or
property, or to receive any other right, or (ii) to
participate in any merger, consolidation, liquidation, sale of
all or substantially all of the Corporation's assets, or other
similar transaction, the Corporation shall mail to each holder
of Class A Preferred Stock and Class B Preferred Stock at
least ten (10) days prior to the date specified therein, a
notice specifying the date on which any such record is to be
taken for the purpose of such dividend, distribution, right or
other action, and the amount and character of such dividend,
distribution, right or other action.
FIFTH: (a) The number of Directors of the
Corporation which shall constitute the whole Board of Directors shall be such as
from time to time shall be fixed by or in the manner provided in the By-Laws but
in no case shall the number be less than one. Except as may otherwise be
required by law, vacancies in the Board of Directors and newly created
directorships resulting from any increase in the authorized number of Directors
may be filled by a majority of the Directors then in office, though less than a
quorum.
(b) All corporate powers of the Corporation
shall be exercised by the Board of Directors except as otherwise provided herein
or by law. In furtherance and not in limita-
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tion of the powers conferred by statute and by law the Board of Directors is
expressly authorized to make, amend, alter, change, add to or repeal By-Laws of
the Corporation, without any action on the part of the stockholders.
SIXTH: Whenever a compromise or arrangement is
proposed between this Corporation and its creditors or any class of them and/or
between this Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of this Corporation or of any creditor or stockholder thereof or the
application of any receiver or receivers appointed for this Corporation under
the provision of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the Court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all
stockholders or class of stockholders of this Corporation, as the case may be,
and also on this Corporation.
SEVENTH: (a) No contract or transaction between the
Corporation and one or more of its Directors, or between a corporation and any
other corporation, partnership, association or other organization in which one
or more of its Directors or officers are Directors or officers, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because such Directors or officers are present at or participate in the meeting
of the Board of Directors or the committee thereof which authorizes the contract
or transaction, or solely because his, her or their votes are counted for such
purpose if:
(1) The material facts as to his, her or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of the disinterested directors, even though the disinterested
directors be less than a quorum; or
(2) The material facts as to his, her or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote there-
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on, and the contract or transaction is specifically approved in good faith by
vote of the stockholders; or
(3) The contract or transaction is fair as to
the Corporation as of the time it is authorized, approved or ratified, by the
Board of Directors, a committee thereof, or the stockholders.
In any case described in this Section, any common or interested Director may be
counted in determining the existence of a quorum at any meeting of the Board of
Directors or any committee which shall authorize any such contract or
transaction and may vote thereat to authorize any such contract or transaction.
Any Director of the Corporation may vote upon any contract or other transaction
between the Corporation and any subsidiary or affiliated corporation without
regard to the fact that he is also a Director of such subsidiary or affiliated
corporation.
(b) No person who is or at any time has
been a Director of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a Director,
provided that the foregoing provision shall not eliminate or limit the liability
of a Director (i) for any breach of such Director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts of omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
section 174 of Title 8 of the Delaware Code, or (iv) for any transaction from
which such Director derived an improper personal benefit.
(c) Any contract, transaction or act of the
Corporation or of the Board of Directors which shall be ratified by a majority
of a quorum of the stockholders entitled to vote at any annual meeting or at any
special meeting called for that purpose shall be as valid and binding as though
ratified by every stockholder of the Corporation; provided, however, that any
failure of the stockholders to approve or ratify such contract, transaction or
act when and if submitted to them shall not be deemed in any way to invalidate
the same or to deprive the Corporation, its Directors or officers of their right
to proceed with such contract, transaction or act.
(d) Each Director, officer and employee,
past or present, of the Corporation, and each person who serves or may have
served at the request of the Corporation as a Director, Trustee, officer or
employee of another corporation, association, trust or other entity and their
respective heirs, administrators and executors, shall be indemnified by the
Corporation in accordance with, and to the fullest extent permitted by, the
provisions of the General Corporation Law of the State of Delaware as it may
from time to time be amended. Each agent of the Corporation and each person who
serves or may have served at the request of the Corpora-
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tion as an agent of another corporation, or as an employee or agent of any
partnership, joint venture, trust or other enterprise may, in the discretion of
the Board of Directors, be indemnified by the Corporation to the same extent as
provided herein with respect to Directors, officers and employees of the
Corporation. The provisions of this paragraph (d) shall apply to any member of
any Committee appointed by the Board of Directors as fully as though such person
shall have been an officer or Director of the Corporation.
(e) The provisions of this Article SEVENTH
shall be in addition to and not in limitation of any other rights, indemnities,
or limitations of liability to which any Director or officer may be entitled, as
a matter of law or under any By-Law, agreement, vote of stockholders or
otherwise.
EIGHTH: (a) To the extent not prohibited by law,
the Corporation shall indemnify any person who is or was made, or threatened to
be made, a party to any threatened, pending or completed action, suit or
proceeding (a "Proceeding"), whether civil, criminal, administrative or
investigative, including, without limitation, an action by or in the right of
the Corporation to procure a judgment in its favor, by reason of the fact that
such person, or a person of whom such person is the legal representative, is or
was a Director or officer of the Corporation, or is or was serving in any
capacity at the request of the Corporation for any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise (an
"Other Entity"), against judgments, fines, penalties, excise taxes, amounts paid
in settlement and costs, charges and expenses (including attorneys' fees and
disbursements). Persons who are not Directors or officers of the Corporation may
be similarly indemnified in respect of service to the Corporation or to an Other
Entity at the request of the Corporation to the extent the Board at any time
specifies that such persons are entitled to the benefits of this Article EIGHTH.
(b) The Corporation shall, from time to
time, reimburse or advance to any Director or officer or other person entitled
to indemnification hereunder the funds necessary for payment of expenses,
including attorneys' fees and disbursements, incurred in connection with any
Proceeding, in advance of the final disposition of such Proceeding; provided,
however, that, if required by the Delaware General Corporation Law, such
expenses incurred by or on behalf of any Director or officer or other person may
be paid in advance of the final disposition of a Proceeding only upon receipt by
the Corporation of an undertaking, by or on behalf of such Director or officer
(or other person indemnified hereunder), to repay any such amount so advanced if
it shall ultimately be determined by final judicial decision from which there is
no further right of appeal that such Director, officer or other person is not
entitled to be indemnified for such expenses.
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(c) The rights to indemnification and
reimbursement or advancement of expenses provided by, or granted pursuant to,
this Article EIGHTH shall not be deemed exclusive of any other rights to which a
person seeking indemnification or reimbursement or advancement of expenses may
have or hereafter be entitled under any statute, this Certificate of
Incorporation, the By-laws of the Corporation (the "By-laws"), any agreement,
any vote of stockholders or disinterested Directors or otherwise, both as to
action in his or her official capacity and as to action in another capacity
while holding such office.
(d) The rights to indemnification and
reimbursement or advancement of expenses provided by, or granted pursuant to,
this Article EIGHTH shall continue as to a person who has ceased to be a
Director or officer (or other person indemnified hereunder) and shall inure to
the benefit of the executors, administrators, legatees and distributees of such
person.
(e) The Corporation shall have power to
purchase and maintain insurance on behalf of any person who is or was a
Director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of an
Other Entity, against any liability asserted against such person and incurred by
such person in any such capacity, or arising out of such person's status as
such, whether or not the Corporation would have the power to indemnify such
person against such liability under the provisions of this Article EIGHTH, the
By-laws or under Section 145 of the Delaware General Corporation Law or any
other provision of law.
(f) The provisions of this Article EIGHTH
shall be a contract between the Corporation, on the one hand, and each Director
and officer who serves in such capacity at any time while this Article EIGHTH is
in effect and any other person indemnified hereunder, on the other hand,
pursuant to which the Corporation and each such Director, officer, or other
person intend to be legally bound. No repeal or modification of this Article
EIGHTH shall affect any rights or obligations with respect to any state of facts
then or theretofore existing or thereafter arising or any proceeding theretofore
or thereafter brought or threatened based in whole or in part upon any such
state of facts.
(g) The rights to indemnification and
reimbursement or advancement of expenses provided by, or granted pursuant to,
this Article EIGHTH shall be enforceable by any person entitled to such
indemnification or reimbursement or advancement of expenses in any court of
competent jurisdiction. The burden of proving that such indemnification or
reimbursement or advancement of expenses is not appropriate shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, its independent legal counsel and its stockholders) to have made a
determination prior to the commencement of such action that
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such indemnification or reimbursement or advancement of expenses is proper in
the circumstances nor an actual determination by the Corporation (including its
Board of Directors, its independent legal counsel and its stock holders) that
such person is not entitled to such indemnification or reimbursement or
advancement of expenses shall constitute a defense to the action or create a
presumption that such person is not so entitled. Such a person shall also be
indemnified for any expenses incurred in connection with successfully
establishing his or her right to such indemnification or reimbursement or
advancement of expenses, in whole or in part, in any such proceeding.
(h) Any Director or officer of the
Corporation serving in any capacity (i) another corporation of which a majority
of the shares entitled to vote in the election of its directors is held,
directly or indirectly by the Corporation or (ii) any employee benefit plan of
the Corporation or any corporation referred to in clause (i) shall be deemed to
be doing so at the request of the Corporation.
(i) Any person entitled to be indemnified
or to reimbursement or advancement of expenses as a matter of right pursuant to
this Article EIGHTH may elect to have the right to indemnification or
reimbursement or advancement of expenses interpreted on the basis of the
applicable law in effect at the time of the occurrence of the event or events
giving rise to the applicable Proceeding, to the extent permitted by law, or on
the basis of the applicable law in effect at the time such indemnification or
reimbursement or advancement of expenses is sought. Such election shall be made,
by a notice in writing to the Corporation, at the time indemnification or
reimbursement or advancement of expenses is sought; provided, however, that if
no such notice is given, the right to indemnification or reimbursement or
advancement of expenses shall be determined by the law in effect at the time
indemnification or reimbursement or advancement of expenses is sought.
NINTH: The Board of Directors may from time to time
(after adoption by the undersigned of the original By-laws) make, alter or
repeal the By-laws by a vote of a majority of the entire Board of Directors that
would be in office if no vacancy existed, whether or not present at a meeting;
provided, however, that any By-laws made, amended or repealed by the Board of
Directors may be amended or repealed, and any By-laws may be made, by the
stockholders of the Corporation by vote of a majority of the holders of shares
of stock of the Corporation entitled to vote in the election of Directors of the
Corporation.
I, the undersigned officer of BITSTREAM INC., a corporation of
the State of Delaware, hereby certify that the foregoing is
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a true, correct and complete copy of the Restated Certificate of Incorporation
of said Corporation as at present in force.
IN WITNESS WHEREOF, I have hereunto subscribed by name and
affixed the seal of this Corporation this 15th day of May 1996.
BITSTREAM INC.
/s/ C. Raymond Boelig
----------------------------------------
Name: C. Raymond Boelig
Title: President and CEO
ATTEST:
/s/ William Swiggart
- ----------------------------------------
Name: William Swiggart
Title: Secretary
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