Document/Exhibit Description Pages Size
1: 10KSB Electronic Manufacturing Services Group, Inc. 41 165K
2: EX-3 Exhibit 3.1 17 63K
3: EX-10 Exhibit 10.1 2 18K
4: EX-10 Exhibit 10.2 2 12K
5: EX-10 Exhibit 10.3 6 30K
6: EX-21 Exhibit 21.1 1 5K
7: EX-23 Exhibit 23.1 1 7K
ELECTRONIC MANUFACTURING SERVICES GROUP, INC.
WRITTEN CONSENT OF BOARD OF DIRECTORS
AUGUST 29, 1996
Pursuant to Section 141(f) of the Delaware General Corporation Law, the
undersigned, being all of the members of the Board of Directors of Electronic
Manufacturing Services Group, Inc., a Delaware corporation (the "corporation"),
do hereby take the following action and adopt the following resolutions by
written consent, effective for all purposes as of the date hereof:
WHEREAS, the corporation's Certificate of Incorporation, as amended,
authorizes the corporation to issue Two Million (2,000,000) shares of preferred
stock, par value One Cent ($.01) per share;
WHEREAS, the Certificate of Incorporation provides that preferred stock
may be issued in such classes or series, and may have such voting powers, full
or limited, or no voting powers, and such designations, preferences and
relative, participating, optional or other special rights and qualifications, or
restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue of such stock adopted by the Board of
Directors;
WHEREAS, the Board of Directors has determined that it would be in the
corporation's best interests to establish and authorize the issuance of a class
of preferred stock denominated as "Class A Cumulative Convertible Preferred
Stock," having the designations, preferences, and rights as set forth herein;
WHEREAS, the corporation's subsidiary, EMSG Systems Division, Inc.
("ESD") has 9,926 shares of Class A Cumulative Preferred Stock (the "ESD
Preferred Stock") issued and outstanding; and
WHEREAS, the Board of Directors has determined that it would be in the
corporation's best interests to offer to exchange shares of its newly-created
Class A Cumulative Convertible Preferred Stock for all of the outstanding shares
of the ESD Preferred Stock, effective August 31, 1996, on such terms and
conditions as the officers of the corporation determine to be in the
corporation's best interests.
NOW, THEREFORE, BE IT RESOLVED, that the corporation shall have the
authority to issue preferred stock denominated as Class A Cumulative Convertible
Preferred Stock ("Class A Preferred Stock"), to consist of 350,000 shares, par
value One Cent ($.01) per share. "Par value" shall mean the dollar amount fixed
as the nominal or face value, as opposed to the market value, of each share of
Class A Preferred Stock, such dollar amount appearing on each certificate for
shares of such stock. The designations, preferences, and rights of the shares of
the Class A Preferred Stock are set forth as follows:
(1) Certain Definitions. Unless the context otherwise
requires, the terms defined in this subparagraph 1 shall have, for
all purposes of this resolution, the meanings herein specified.
Common Stock. The term "Common Stock" shall mean the common
voting stock, par value $.0025 per share, of the corporation and all shares
hereafter authorized of any class of common stock of the corporation; and any
other stock of the corporation hereafter authorized and howsoever designated
which has the right (subject always to prior rights of any class or series of
preferred stock) to participate in the distribution of the assets and earnings
of the corporation without limit as to per share amount.
Conversion Date. The term "Conversion Date" shall have the
meaning set forth in subparagraph 4(d) below.
Conversion Price. The term "Conversion Price" shall mean the
price per share of Common Stock used to determine the number of shares of Common
Stock deliverable upon conversion of a share of the Class A Preferred Stock,
which price shall initially be One and 75/100 Dollars ($1.75) per share, subject
to adjustment in accordance with the provisions of subparagraph 4 below.
Current Market Price. The term "Current Market Price"
shall have the meaning set forth in subparagraph 4(g) below.
Dividend Payment Date. The term "Dividend Payment Date"
shall have the meaning set forth in subparagraph 2(a) below.
Dividend Period. The term "Dividend Period" shall have the
meaning set forth in subparagraph 2(a) below.
Issue Date. The term "Issue Date" shall mean the date that
shares of Class A Preferred Stock are issued by the corporation. In the event
all of the authorized shares of Class A Preferred Stock are not issued on the
same date, the Issue Date for each particular share of Class A Preferred Stock
shall be the date upon which that particular share is issued by the corporation.
Junior Stock. The term "Junior Stock" shall mean, for purposes
of subparagraphs 2 and 6 below, the Common Stock, and any other class or series
of stock of the corporation hereafter authorized that is not entitled to receive
any dividends in any Dividend Period unless all dividends required to have been
paid or declared and set apart for payment on the Class A Preferred Stock shall
have been so paid or declared and set apart for payment; and for purposes of
subparagraphs 3 and 6 below, shall mean any class or series of stock of the
corporation hereafter authorized that is not entitled to receive any assets upon
the liquidation, dissolution, or winding up of the affairs of the corporation
until the Class A Preferred Stock shall have received the entire amount to which
such stock is entitled upon such liquidation, dissolution, or winding up.
Parity Stock. The term "Parity Stock" shall mean, for
purposes of subparagraphs 2 and 6 below, any other class or series of
stock of the corporation hereafter authorized that is entitled to
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receive payment of dividends on a parity with the Class A Preferred Stock; and
for purposes of subparagraphs 3 and 6 below, shall mean any other class or
series of stock of the corporation hereafter authorized that is entitled to
receive assets upon the liquidation, dissolution, or winding up of the affairs
of the corporation on a parity with the Class A Preferred Stock.
Senior Stock. The term "Senior Stock" shall mean, for purposes
of subparagraphs 2 and 6 below, any class or series of stock of the corporation
hereafter authorized that ranks senior to the Class A Preferred Stock in respect
of the right to receive dividends; and for purposes of subparagraphs 3 and 6
below, shall mean any class or series of stock of the corporation hereafter
authorized that ranks senior to the Class A Preferred Stock in respect of the
right to receive assets upon the liquidation, dissolution, or winding up of the
affairs of the corporation.
Subscription Price. The term "Subscription Price" shall
mean One and 75/100 Dollars ($1.75) per share.
(2) Dividends.
(a) Subject to the prior preferences and other rights of any
Senior Stock, each holder of Class A Preferred Stock shall be entitled to
receive, out of funds legally available for that purpose, cash dividends at the
rate of Seventeen and 50/100 Cents ($.175) per share per annum for each share of
Class A Preferred Stock owned by such holder, and no more. Such dividends shall
be cumulative from the Issue Date and shall be payable in arrears, when and as
declared by the Board of Directors, on March 15, June 15, September 15, and
December 15 of each year (each such date being herein referred to as a "Dividend
Payment Date"), commencing on the first Dividend Payment Date following the
Issue Date. The quarterly period between consecutive Dividend Payment Dates
shall hereinafter be referred to as a "Dividend Period." Dividends for any
period less than a full Dividend Period shall be calculated on a day-to-day
basis and on the basis of a 360-day year. Each dividend shall be paid to the
holders of record of the Class A Preferred Stock as their names appear on the
share register of the corporation on the corresponding Record Date. The term
"Record Date" means, with respect to the dividend payable on March 15, June 15,
September 15, and December 15, respectively, of each year, the preceding March
1, June 1, September 1, and December 1, or such other record date designated by
the Board of Directors of the corporation with respect to the dividend payable
on such respective Dividend Payment Date. Dividends on account of arrears for
any past Dividend Periods may be declared and paid at any time, without
reference to any Dividend Payment Date, to holders of record on such date as may
be fixed by the Board of Directors.
(b) In the event that full cash dividends are not paid or made
available to the holders of all outstanding shares of Class A Preferred Stock
and of any Parity Stock, and funds available shall be
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insufficient to permit payment in full in cash to all such holders of the
preferential amounts to which they are then entitled, the entire amount
available for payment of cash dividends shall be distributed among the holders
of the Class A Preferred Stock and of any Parity Stock ratably in proportion to
the full amount to which they would otherwise be respectively entitled, and any
remainder not paid in cash to the holders of the Class A Preferred Stock shall
cumulate as provided in subparagraph 2(c) below.
(c) If, on any Dividend Payment Date, the holders of the Class
A Preferred Stock shall not have received the full dividends provided for in the
other provisions of this subparagraph 2, then such dividends shall cumulate,
whether or not earned or declared, for each succeeding full Dividend Period
during which such dividends shall remain unpaid. Unpaid dividends for any period
less than a full Dividend Period shall cumulate on a day-to-day basis and shall
be calculated on the basis of a 360-day year.
(d) So long as any shares of Class A Preferred Stock shall be
outstanding, the corporation shall not declare or pay on any Junior Stock any
dividend whatsoever, whether in cash, property or otherwise (other than
dividends payable in shares of the class or series upon which such dividends are
declared or paid, or payable in shares of Common Stock with respect to Junior
Stock other than Common Stock, together with cash in lieu of fractional shares),
nor shall the corporation make any distribution on any Junior Stock, nor shall
any Junior Stock be purchased or redeemed by the corporation, nor shall any
monies be paid or made available for a sinking fund for the purchase or
redemption of any Junior Stock, unless all dividends to which the holders of
Class A Preferred Stock shall have been entitled for all previous Dividend
Periods shall have been paid or declared and a sum of money sufficient for the
payment thereof set apart.
(3) Distributions Upon Liquidation, Dissolution, or Winding Up. In the
event of any voluntary or involuntary liquidation, dissolution, or other winding
up of the affairs of the corporation, subject to the prior preferences and other
rights of any Senior Stock, but before any distribution or payment shall be made
to the holders of Junior Stock, the holders of the Class A Preferred Stock shall
be entitled to be paid the Subscription Price of all outstanding shares of Class
A Preferred Stock as of the date of such liquidation or dissolution or such
other winding up, plus any accrued and unpaid dividends thereon to such date,
and no more, in cash or in property taken at its fair value as determined by the
Board of Directors, or both, at the election of the Board of Directors. If such
payment shall have been made in full to the holders of the Class A Preferred
Stock, and if payment shall have been made in full to the holders of any Senior
Stock and Parity Stock of all amounts to which such holders shall be entitled,
the remaining assets and funds of the corporation shall be distributed among the
holders of Junior Stock, according to their respective shares and priorities.
If, upon any such liquidation, dissolution, or other winding up of the affairs
of
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the corporation, the net assets of the corporation distributable among the
holders of all outstanding shares of the Class A Preferred Stock and of any
Parity Stock shall be insufficient to permit the payment in full to such holders
of the preferential amounts to which they are entitled, then the entire net
assets of the corporation remaining after the distributions to holders of any
Senior Stock of the full amounts to which they may be entitled shall be
distributed among the holders of the Class A Preferred Stock and of any Parity
Stock ratably in proportion to the full amounts to which they would otherwise be
respectively entitled. Neither the consolidation or merger of the corporation
into or with another corporation or corporations, nor the sale of all or
substantially all of the assets of the corporation to another corporation or
corporations shall be deemed a liquidation, dissolution, or winding up of the
affairs of the corporation within the meaning of this subparagraph 3.
(4) Conversion Rights. The Class A Preferred Stock shall be
convertible into Common Stock as follows:
(a) Optional Conversion. Subject to and upon compliance with
the provisions of this subparagraph 4, the holder of any shares of Class A
Preferred Stock shall have the right at such holder's option, at any time or
from time to time, to convert any of such shares of Class A Preferred Stock into
fully paid and nonassessable, unregistered shares of Common Stock at the
Conversion Price (as hereinafter defined) in effect on the Conversion Date (as
hereinafter defined) upon the terms hereinafter set forth.
(b) Certificate Legend. Certificates representing shares
of Common Stock issued pursuant to a conversion described in
subparagraph 4(a) shall bear legends in substantially the following
forms:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER ANY FEDERAL OR STATE SECURITIES LAWS AND HAVE
BEEN ISSUED UNDER EXEMPTIONS THAT DEPEND IN PART ON THE INTENT
OF THE HOLDER HEREOF NOT TO SELL OR TRANSFER SUCH SHARES IN
ANY MANNER NOT PERMITTED BY SUCH LAWS. THESE SHARES MAY NOT BE
SOLD OR TRANSFERRED EXCEPT UPON REGISTRATION UNDER ALL
APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR UPON DELIVERY
TO ELECTRONIC MANUFACTURING SERVICES GROUP, INC. OF EITHER (A)
A NO-ACTION LETTER FROM THE STATE AND FEDERAL AGENCIES HAVING
JURISDICTION THEREOF OR (B) AN OPINION OF COUNSEL ACCEPTABLE
TO THE CORPORATION THAT NEITHER THE SALE NOR THE PROPOSED
TRANSFER CONSTITUTES A VIOLATION OF ANY FEDERAL OR STATE
SECURITIES LAW.
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(c) Conversion Price. Each share of Class A Preferred Stock
shall be converted into a number of shares of Common Stock determined by
dividing (i) the sum of (A) the Subscription Price plus (B) any dividends on
such share of Class A Preferred Stock which such holder is entitled to receive,
but has not yet received, by (ii) the Conversion Price in effect on the
Conversion Date, and multiplying that quotient by one and one-half (1.5). The
Conversion Price at which shares of Common Stock shall initially be issuable
upon conversion of the shares of Class A Preferred Stock shall be One and 75/100
Dollars ($1.75). The Conversion Price shall be subject to adjustment as set
forth in subparagraph 4(f). No payment or adjustment shall be made for any
dividends on the Common Stock issuable upon such conversion.
(d) Mechanics of Conversion. The holder of any shares of Class
A Preferred Stock may exercise the conversion right specified in subparagraph
4(a) by surrendering to the corporation or any transfer agent of the corporation
the certificate or certificates for the shares to be converted, accompanied by
written notice specifying the number of shares to be converted. Conversion shall
be deemed to have been effected on the date when delivery of notice of an
election to convert and certificates for shares is made, and such date is
referred to herein as the "Conversion Date". Subject to the provision of
subparagraph 4(f)(vii), as promptly as practicable thereafter (and after
surrender of the certificate or certificates representing shares of Class A
Preferred Stock to the corporation or any transfer agent of the corporation) the
corporation shall issue and deliver to or upon the written order of such holder
a certificate or certificates for the number of full shares of Common Stock to
which such holder is entitled and a check or cash with respect to any fractional
interest in a share of Common Stock as provided in subparagraph 4(e). Subject to
the provisions of subparagraph 4(f)(vii), the person in whose name the
certificate or certificates for Common Stock are to be issued shall be deemed to
have become a holder of record of such Common Stock on the applicable Conversion
Date. Upon conversion of only a portion of the number of shares covered by a
certificate representing shares of Class A Preferred stock surrendered for
conversion, the corporation shall issue and deliver to or upon the written order
of the holder of the certificate so surrendered for conversion, at the expense
of the corporation, a new certificate covering the number of shares of Class A
Preferred Stock representing the unconverted portion of the certificate so
surrendered.
(e) Fractional Shares. No fractional shares of
Common Stock or scrip shall be issued upon conversion of shares of Class A
Preferred Stock. If more than one share of Class A Preferred Stock shall be
surrendered for conversion at any one time by the same holder, the number of
full shares of Common Stock issuable upon conversion thereof shall be computed
on the basis of the aggregate number of shares of Class A Preferred Stock so
surrendered. Instead of any fractional shares of Common Stock which would
otherwise be
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issuable upon conversion of any shares of Class A Preferred Stock, the
corporation shall pay a cash adjustment in respect of such fractional interest
in an amount equal to that fractional interest of the then Current Market Price.
(f) Conversion Price Adjustments. The Conversion
Price shall be subject to adjustment from time to time as follows:
(i) Common Stock Issued at less than the
Conversion Price. If the corporation shall issue any Common Stock other than
Excluded Stock (as hereinafter defined) without consideration or for a
consideration per share less than the Conversion Price in effect immediately
prior to such issuance, the Conversion Price in effect immediately prior to each
such issuance shall immediately (except as provided below) be reduced to the
price determined by dividing (1) an amount equal to the sum of (A) the number of
shares of Common Stock outstanding immediately prior to such issuance multiplied
by the Conversion Price in effect immediately prior to such issuance and (B) the
consideration, if any, received by the corporation upon such issuance, by (2)
the total number of shares of Common Stock outstanding immediately after such
issuance.
For the purposes of any adjustment of the Conversion Price pursuant to
clause (i), the following provisions shall be applicable:
(A) Cash. In the case of the issuance of
Common Stock for cash, the amount of the consideration received by the
corporation shall be deemed to be the amount of the cash proceeds received by
the corporation for such Common Stock before deducting therefrom any discounts,
commissions, taxes or other expenses allowed, paid or incurred by the
corporation for any underwriting or otherwise in connection with the issuance
and sale thereof.
(B) Consideration Other Than Cash. In the
case of the issuance of Common Stock (otherwise than upon the conversion of
shares of capital stock or other securities of the corporation) for a
consideration in whole or in part other than cash, including securities acquired
in exchange therefor (other than securities by their terms so exchangeable), the
consideration other than cash shall be deemed to be the fair value thereof as
determined by the Board of Directors, irrespective of any accounting treatment;
provided that such fair value as determined by the Board of Directors shall not
exceed the aggregate Current Market Price of the share of Common Stock being
issued as of the date the Board of Directors authorizes the issuance of such
shares.
(C) Options and Convertible Securities. In
the case of the issuance of (i) options, warrants or other rights to purchase or
acquire Common Stock (whether or not at the time exercisable), (ii) securities
by their terms convertible into or exchangeable for Common Stock (whether or not
at the time so
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convertible or exchangeable) or options, warrants or rights to purchase such
convertible or exchangeable securities (whether or not at the time exercisable):
(1) the aggregate maximum number of
shares of Common Stock deliverable upon exercise of such options, warrants or
other rights to purchase or acquire Common Stock shall be deemed to have been
issued at the time such options, warrants or rights were issued and for a
consideration equal to the consideration (determined in the manner provided in
subclauses (A) and (B) above), if any, received by the corporation upon the
issuance of such options, warrants or rights plus the minimum purchase price
provided in such options, warrants or rights for the Common Stock covered
thereby;
(2) the aggregate maximum number of
shares of Common Stock deliverable upon conversion of or in exchange for any
such convertible or exchangeable securities, or upon the exercise of options,
warrants or other rights to purchase or acquire such convertible or exchangeable
securities and the subsequent conversion or exchange thereof, shall be deemed to
have been issued at the time such securities were issued or such options,
warrants or rights were issued and for a consideration equal to the
consideration, if any, received by the corporation for any such securities and
related options, warrants or rights (excluding any cash received on account of
accrued interest or accrued dividends), plus the additional consideration
(determined in the manner provided in subclauses (A) and (B) above), if any, to
be received by the corporation upon the conversion or exchange of such
securities, or upon the exercise of any related options, warrants or rights to
purchase or acquire such convertible or exchangeable securities and the
subsequent conversion or exchange thereof;
(3) on any change in the number of
shares of Common Stock deliverable upon exercise of any such options, warrants
or rights or conversion or exchange of such convertible or exchangeable
securities or any change in the consideration to be received by the corporation
upon such exercise, conversion or exchange, including, but not limited to, a
change resulting from the anti-dilution provisions thereof, the Conversion Price
as then in effect shall forthwith be readjusted to such Conversion Price as
would have been obtained had an adjustment been made upon the issuance of such
options, warrants or rights not exercised prior to such change, or of such
convertible or exchangeable securities not converted or exchanged prior to such
change, upon the basis of such change;
(4) on the expiration or
cancellation of any such options, warrants or rights, or the termination of the
right to convert or exchange such convertible or exchangeable securities, if the
Conversion Price shall have been adjusted upon the issuance thereof, the
Conversion Price shall forthwith be readjusted to such Conversion Price as would
have been obtained had an adjustment been
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made upon the issuance of such options, warrants, rights or such convertible or
exchangeable securities on the basis of the issuance of only the number of
shares of Common Stock actually issued upon the exercise of such options,
warrants or rights, or upon the conversion or exchange of such convertible or
exchangeable securities; and
(5) if the Conversion Price shall
have been adjusted upon the issuance of any such options, warrants, rights or
convertible or exchangeable securities, no further adjustment of the Conversion
Price shall be made for the actual issuance of Common Stock upon the exercise,
conversion or exchange thereof;
(ii) Excluded Stock. "Excluded Stock" shall mean (A)
shares of Common Stock issued or reserved for issuance by the corporation as a
stock dividend payable in shares of Common Stock, or upon any subdivision or
split-up of the outstanding shares of Common Stock or Class A Preferred Stock,
or upon conversion of shares of Class A Preferred Stock and (B) shares of Common
Stock to be issued pursuant to employee benefit plan transactions to key
employees, consultants and advisors of the corporation together with any such
shares that are repurchased by the corporation and reissued to any such
employee, consultant or advisor; provided, however, that shares of Common Stock
issued and to be issued to such persons shall not exceed twenty-five (25%) of
the issued and outstanding shares of Common Stock. All shares of Excluded Stock
which the corporation has reserved for issuance shall be deemed to be
outstanding for all purposes of computations under subparagraph 4(f)(i).
(iii) Stock Dividends, Subdivisions, Reclassifica-
tion or Combinations. If the corporation shall (i) declare a dividend or make a
distribution on its Common Stock in shares of its Common Stock, (ii) subdivide
or reclassify the outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify the outstanding Common Stock into a
smaller number of shares, the Conversion Price in effect at the time of the
record date for such dividend or distribution or the effective date of such
subdivision, combination or reclassification shall be proportionately adjusted
so that the holder of any shares of Class A Preferred Stock surrendered for
conversion after such date shall be entitled to receive the number of shares of
Common Stock which he would have owned or been entitled to receive had such
Class A Preferred Stock been converted immediately prior to such date.
Successive adjustments in the Conversion Price shall be made whenever any event
specified above shall occur.
(iv) Other Distributions. In case the corporation
shall fix a record date for the making of a distribution to all holders of
shares of its Common Stock (i) of shares of any class other than its Common
Stock or (ii) of evidence of indebtedness of the corporation or (iii) of assets
(excluding cash dividends or distributions, and dividends or distributions
referred to in subparagraph 4(f)(iii) above), or (iv) of rights or warrants
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(excluding those referred to in subparagraph 4(f)(i) above), in each such case
the Conversation Price in effect immediately prior thereto shall be reduced
immediately thereafter to the price determined by dividing (1) an amount equal
to the difference resulting from (A) the number of shares of Common Stock
outstanding on such record date multiplied by the Conversion Price per share on
such record date, less (B) the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive) of said shares or evidences
of indebtedness or assets or rights or warrants to be so distributed, by (2) the
number of shares of Common Stock outstanding on such record date. Such
adjustment shall be made successively whenever such a record date is fixed. In
the event that such distribution is not so made, the Conversion Price then in
effect shall be readjusted, effective as of the date when the Board of Directors
determines not to distribute such shares, evidences of indebtedness, assets,
rights or warrants, as the case may be, to the Conversion Price which would then
be in effect if such record date had not been fixed.
(v) Consolidation, Merger, Sale, Lease or Conveyance.
In case of any consolidation with or merger of the corporation with or into
another corporation, or in case of any sale, lease or conveyance to another
corporation of the assets of the corporation as an entirety or substantially as
an entirety, each share of Class A Preferred Stock shall after the date of such
consolidation, merger, sale, lease or conveyance be convertible into the number
of shares of stock or other securities or property (including cash) to which the
Common Stock issuable (at the time of such consolidation, merger, sale, lease or
conveyance) upon conversion of such share of Class A Preferred Stock would have
been entitled upon such consolidation, merger, sale, lease or conveyance; and in
any such case, if necessary, the provisions set forth herein with respect to the
rights and interests thereafter of the holders of the shares of Class A
Preferred Stock shall be appropriately adjusted so as to be applicable, as
nearly as may reasonably be, to any shares of stock or other securities or
property thereafter deliverable on the conversion of the shares of Class A
Preferred Stock.
(vi) Rounding of Calculations; Minimum Adjustment.
All calculations under this subparagraph 4(f) shall be made to the nearest cent
or to the nearest one hundredth (1/100th) of a share, as the case may be. Any
provision of this subparagraph 4 to the contrary notwithstanding, no adjustment
in the Conversion Price shall be made if the amount of such adjustment would be
less than $0.05, but any such amount shall be carried forward and an adjustment
with respect thereto shall be made at the time of and together with any
subsequent adjustment which, together with such amount and any other amount or
amounts so carried forward, shall aggregate $0.05 or more.
(vii) Timing of Issuance of Additional Common Stock
Upon Certain Adjustments. In any case in which the provisions of this
subparagraph 4(f) shall require that an adjustment shall become
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effective immediately after a record date for an event, the corporation may
defer until the occurrence of such event (A) issuing to the holder of any share
of Class A Preferred Stock converted after such record date and before the
occurrence of such event the additional shares of Common Stock issuable upon
such conversion by reason of the adjustment required by such event over and
above the shares of Common Stock issuable upon such conversion before giving
effect to such adjustment and (B) paying to such holder any amount of cash in
lieu of a fractional share of Common Stock pursuant to subparagraph 4(e);
provided that the corporation upon request shall deliver to such holder a due
bill or other appropriate instrument evidencing such holder's right to receive
such additional shares, and such cash, upon the occurrence of the event
requiring such adjustment.
(g) Current Market Price. The Current Market Price at any date
shall mean, in the event the Common Stock is publicly traded, the average of the
daily closing prices per share of Common Stock for thirty (30) consecutive
trading days ending no more than fifteen (15) business days before such date (as
adjusted for any stock dividend, split, combination or reclassification that
took effect during such thirty (30) business day period). The closing price for
each day shall be the last reported sale price regular way or, in case no such
reported sale takes place on such day, the average of the last closing bid and
asked prices regular way, in either case on the principal national securities
exchange on which the Common Stock is listed or admitted to trading, or if not
listed or admitted to trading on any national securities exchange, the closing
sale price for such day reported by NASDAQ, if the Common Stock is traded
over-the-counter and quoted in the National Market System, or if the Common
Stock is so traded, but not so quoted, the average of the closing reported bid
and asked prices of the Common Stock as reported by NASDAQ or any comparable
system or, if the Common Stock is not listed on NASDAQ or any comparable system,
the average of the closing bid and asked prices as furnished by two members of
the National Association of Securities Dealers, Inc. selected from time to time
by the corporation for that purpose. If the Common Stock is not traded in such
manner that the quotations referred to above are available for the period
required hereunder, Current Market Price per share of Common Stock shall be
deemed to be the fair value as determined by the Board of Directors,
irrespective of any accounting treatment.
(h) Statement Regarding Adjustments. Whenever the Conversion
Price shall be adjusted as provided in subparagraph 4(f), the corporation shall
forthwith file, at the office of any transfer agent for the Class A Preferred
Stock and at the principal office of the corporation, a statement showing in
detail the facts requiring such adjustment and the Conversion Price that shall
be in effect after such adjustment, and the corporation shall also cause a copy
of such statement to be sent by mail, first class postage prepaid, to each
holder of shares of Class A Preferred Stock at its address appearing on the
corporation's records. Each such statement shall be
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signed by the corporation's independent public accountants, if applicable. Where
appropriate, such copy may be given in advance and may be included as part of a
notice required to be mailed under the provisions of subparagraph 4(i).
(i) Notice to Holders. In the event the corporation shall
propose to take any action of the type described in clause (i) (but only if the
action of the type described in clause (i) would result in an adjustment in the
Conversion Price), (iii), (iv) or (v) of subparagraph 4(f), the corporation
shall give notice to each holder of shares of Class A Preferred Stock, in the
manner set forth in subparagraph 4(h), which notice shall specify the record
date, if any, with respect to any such action and the approximate date on which
such action is to take place. Such notice shall also set forth such facts with
respect thereto as shall be reasonably necessary to indicate the effect of such
action (to the extent such effect may be known at the date of such notice) on
the Conversion Price and the number, kind or class of shares or other securities
or property which shall be deliverable upon conversion of shares of Class A
Preferred Stock. In the case of any action which would require the fixing of a
record date, such notice shall be given at least ten (10) days prior to the date
so fixed, and in case of all other action, such notice shall be given at least
fifteen (15) days prior to the taking of such proposed action. Failure to give
such notice, or any defect therein, shall not affect the legality or validity of
any such action.
(j) Treasury Stock. For the purposes of this subparagraph 4,
the sale or other disposition of any Common Stock theretofore held in the
corporation's treasury shall be deemed to be an issuance thereof.
(k) Costs. The corporation shall pay all documentary, stamp,
transfer or other transactional taxes attributable to the issuance or delivery
of shares of Common Stock upon conversion of any shares of Class A Preferred
Stock; provided that the corporation shall not be required to pay any taxes
which may be payable in respect of any transfer involved in the issuance or
delivery of any certificate for such shares in a name other than that of the
holder of the shares of Class A Preferred Stock in respect of which such shares
are being issued.
(l) Reservation Shares. The corporation shall reserve at all
times so long as any shares of Class A Preferred Stock remain outstanding, free
from preemptive rights, out of its treasury stock (if applicable) or its
authorized but unissued shares of Common Stock, or both, solely for the purpose
of effecting the conversion of the shares Class A Preferred Stock, sufficient
shares of Common Stock to provide for the conversion of all outstanding shares
of Class A Preferred Stock.
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(m) Approvals. If any shares of Common Stock to be reserved
for the purpose of conversion of shares of Class A Preferred Stock require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued or delivered upon conversion,
then the corporation will in good faith and as expeditiously as possible
endeavor to secure such registration or approval, as the case may be. If, and so
long as, any Common Stock into which the shares of Class A Preferred Stock are
then convertible is listed on any national securities exchange, the corporation
will, if permitted by the rules of such exchange, list and keep listed on such
exchange, upon official notice of issuance, all shares of such Common Stock
issuable upon conversion.
(n) Valid Issuance. All shares of Common Stock which may be
issued upon conversion of the shares of Class A Preferred Stock will upon
issuance by the corporation be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issuance thereof, and the corporation shall take no action which will cause a
contrary result (including without limitation, any action which would cause the
Conversion Price to be less than the par value, if any, of the Common Stock).
(5) Voting Rights. The holders of the issued and outstanding
shares of Class A Preferred Stock shall have no voting rights except
as set forth herein and as required by law.
(6) Covenants. In addition to any other rights provided by law, so long
as any Class A Preferred Stock is outstanding, the corporation, without first
obtaining the affirmative vote or written consent of the holders of not less
than a majority of such outstanding shares of Class A Preferred Stock, will not:
(a) amend or repeal any provision of, or add any provision to,
the corporation's Articles of Incorporation or Bylaws if such action
would alter adversely or reduce the preferences, rights, privileges or
powers of, or the restrictions provided for the benefit of, any Class A
Preferred Stock, or increase or decrease the number of shares of Class
A Preferred Stock authorized thereby;
(b) authorize or issue shares of any class or series of stock
not expressly authorized herein having any preference or priority as to
dividends, assets or other rights superior to or on a parity with any
such preference or priority of the Class A Preferred Stock, or
authorize or issue shares of stock of any class or any bonds,
debentures, notes or other obligations convertible into or exchangeable
for, or having option rights to purchase, any shares of stock of the
corporation having any preference or priority as to dividends, assets
or other rights superior to or on a parity with any such preference or
priority of the Class A Preferred Stock;
-13-
(c) reclassify any class or series of any Junior Stock into
Parity Stock or Senior Stock or reclassify any series of Parity Stock
into Senior Stock; or
(d) pay or declare any dividend on any Junior Stock (other
than dividends payable in shares of the class or series upon which such
dividends are declared or paid, or payable in shares of Common Stock
with respect to Junior Stock other than Common Stock, together with
cash in lieu of fractional shares and dividends not in excess of
dividends paid to the Class A Preferred Stock) while the Class A
Preferred Stock remains outstanding, or apply any or its assets to the
redemption, retirement, purchase or acquisition, directly or
indirectly, through subsidiaries or otherwise, of any Junior Stock,
except from employees of the corporation upon termination of employment
or otherwise pursuant to the terms of stock purchase or option
agreements providing for the repurchase of, or right of first refusal
with respect to, such Junior Stock entered into with such employees.
(7) Board Liaison; Communications. The corporation's Board of Directors
from time to time will select one of its members to serve as a communications
liaison (the "Liaison") between the Board of Directors and the holders of the
Class A Preferred Stock. The Liaison will be responsible for ensuring that the
holders of the Class A Preferred Stock receive copies of all material
correspondence sent by the corporation to the holders of the corporation's
Common Stock, and for presenting to the Board of Directors all written positions
regarding the corporation adopted by the holders of the Class A Preferred Stock
as a group. The Board of Directors hereby appoints Ray Steckenrider to serve
initially as the Liaison.
(8) Exclusion of Other Rights. Except as may be otherwise required by
law, the shares of Class A Preferred Stock shall not have any preferences or
relative, participating, optional or other special rights, other than those
specifically set forth in this resolution (as such resolution may be amended
from time to time). The shares of Class A Preferred Stock shall have no
preemptive or subscription rights.
(9) Headings of Subdivisions. The headings of the various
subdivisions hereof are for convenience of reference only and shall
not affect the interpretation of any of the provisions hereof.
(10) Severability of Provisions. If any right, preference or limitation
of the Class A Preferred Stock set forth in this resolution (as such resolution
may be amended from time to time) is invalid, unlawful or incapable of being
enforced by reason of any rule of law or public policy, all other rights,
preferences and limitations set forth in this resolution (as so amended) which
can be given effect without the invalid, unlawful or unenforceable right,
preference or limitation shall, nevertheless, remain in full force
-14-
and effect, and no right, preference or limitation herein set forth shall be
deemed dependent upon any other such right, preference or limitation unless so
expressed herein.
(11) Status of Reacquired Shares. Shares of Class A Preferred Stock
which have been issued and reacquired in any manner shall (upon compliance with
any applicable provisions of the laws of the State of North Carolina) have the
status of authorized and unissued shares of Class A Preferred Stock and may be
redesignated and reissued.
FURTHER RESOLVED, that the corporation shall offer to exchange shares
of its Class A Preferred Stock for all of the outstanding shares of the ESD
Preferred Stock, effective August 31, 1996, on such terms and conditions as the
officers of the corporation determine to be in the corporation's best interests.
FURTHER RESOLVED, that the officers of the corporation be, and they
hereby are, authorized to take all such action and to execute and deliver on
behalf of the corporation any and all such certificates, instruments, documents,
agreements, and undertakings as they or any of them may consider necessary or
appropriate to enable the corporation to carry out the intent and purposes of
the foregoing resolutions.
/s/ Alan G. Finkel /s/ Craig Macnab
---------------------------- ----------------------------
Alan G. Finkel Craig Macnab
/s/ Kenneth H. Marks /s/ Kenneth L. Marks
---------------------------- ----------------------------
Kenneth H. Marks Kenneth L. Marks
/s/ Ray Steckenrider
----------------------------
Ray Steckenrider
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ELECTRONIC MANUFACTURING SERVICES GROUP, INC.
WRITTEN CONSENT OF BOARD OF DIRECTORS
AUGUST 30, 1996
Pursuant to Section 141(f) of the Delaware General Corporation Law, the
undersigned, being all of the members of the Board of Directors of Electronic
Manufacturing Services Group, Inc., a Delaware corporation (the "corporation"),
do hereby take the following action and adopt the following resolutions by
written consent, effective for all purposes as of the date hereof:
WHEREAS, on August 29, 1996, the corporation's Board of Directors
adopted certain resolutions by written consent (the "Consent"), which, among
other things, authorized the corporation to issue 350,000 shares of preferred
stock denominated as Class A Cumulative Convertible Preferred Stock ("Class A
Preferred Stock"), par value One Cent ($.01) per share;
WHEREAS, the Board of Directors of the corporation had previously
determined that the Class A Preferred Stock would be voting stock, issued to the
holders of the Class A Cumulative Preferred Stock of its subsidiary, EMSG
Systems Division, Inc., in connection with a "reverse B" reorganization of the
corporation;
WHEREAS, the Consent, at subparagraph 5, inadvertently provided that
the holders of the Class A Preferred Stock would have no voting rights;
WHEREAS, the Board of Directors desires to amend the Consent to give
the holders of the Class A Preferred Stock certain voting rights; and
WHEREAS, the corporation has not yet issued any shares of Class A
Preferred Stock.
NOW, THEREFORE, BE IT RESOLVED, that subparagraph 5 of the Consent
shall be amended to read as follows:
(5) Voting Rights. Except as otherwise set forth herein or required by
law, the holders of the issued and outstanding shares of Class A Preferred Stock
shall have the right to vote, with the holders of the corporation's Common Stock
and not as a separate class, on each matter submitted to the shareholders for a
vote, and each share of Class A Preferred Stock shall entitle its holder to
one-tenth of one (1/10) vote on each such matter.
FURTHER RESOLVED, that the officers of the corporation be, and they
hereby are, authorized to take all such action and to execute and deliver on
behalf of the corporation any and all such certificates, instruments, documents,
agreements, and undertakings as they or any of them may consider necessary or
appropriate to enable
the corporation to carry out the intent and purposes of the foregoing
resolution.
/s/ Alan G. Finkel /s/ Craig Macnab
---------------------------- ----------------------------
Alan G. Finkel Craig Macnab
/s/ Kenneth H. Marks /s/ Kenneth L. Marks
---------------------------- ----------------------------
Kenneth H. Marks Kenneth L. Marks
/s/ Ray Steckenrider
----------------------------
Ray Steckenrider
-2-
Dates Referenced Herein and Documents Incorporated by Reference
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