Exhibit 3.1
ARTICLES OF INCORPORATION
OF
VALUEVISION MEDIA, INC.
(Conformed Copy Includes all amendments through August 1, 2009)
ARTICLE 1
NAME
The name of the Corporation is ValueVision Media, Inc.
ARTICLE 2
REGISTERED OFFICE
The address of the registered office of the Corporation is 6740 Shady Oak Road, Minneapolis,
Minnesota 55344-3433.
ARTICLE 3
CAPITAL
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The Corporation is authorized to issue One Hundred Million (100,000,000) shares of
capital stock, having a par value of one cent ($.01) per share in the case of common
stock, and having a par value as determined by the Board of Directors in the case of
preferred stock, to be held, sold and paid for at such times and in such manner as the
Board of Directors may from time to time determine in accordance with the laws of the
State of Minnesota. |
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B. |
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In addition to any and all powers conferred upon the Board of Directors by the
laws of the State of Minnesota, the Board of Directors shall have the authority to
establish by resolution more than one class or series of shares, either preferred or
common, and to fix the relative rights, restrictions and preferences of any such
different classes or series, and the authority to issue shares of a class or series to
another class or series to effectuate share dividends, splits or conversion of the
Corporations outstanding shares. |
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C. |
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The Board of Directors shall also have the authority to issue rights to convert
any of the Corporations securities into shares of stock of any class or classes, the
authority to issue options to purchase or subscribe for shares of stock of any class or
classes, and the authority to issue share purchase or subscription warrants or any
other evidence of such option rights which set forth the terms, provisions and
conditions thereof, including the price or prices at which such shares may be
subscribed for or purchased. Such options, warrants and rights, may be transferable or
nontransferable and separable or inseparable from other securities of the Corporation.
The Board of Directors is authorized to fix the terms, provisions and conditions of
such options, warrants and rights, including the conversion basis or bases and the
option price or prices at which shares may be subscribed for or purchased. |
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D. |
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Any provisions herein to the contrary notwithstanding, except as otherwise
provided by law, not more than twenty percent (20%) of the aggregate voting power of
all shares outstanding entitled to vote on any matter shall be at any time voted by or
for the account of aliens or their representatives, or by or for the account of a
foreign government or representative thereof, or by or for the account of any
corporation organized under the laws of foreign country. |
The Board of Directors shall make such rule and regulations as it shall deem
necessary or appropriate to enforce the provisions of this paragraph D.
E. |
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Except as otherwise provided by law, aliens, foreign governments, or
corporations organized under the laws of a foreign country, or the representatives of
such aliens, foreign governments, or corporations organized under the laws of a foreign
country, shall not own, directly or through a third party who holds the stock for the
account of such alien, foreign government, or corporation organized under the laws of a
foreign country: (1) more than twenty percent (20%) of the number of shares of
outstanding stock of the Corporation, or (2) shares representing more than twenty
percent (20%) of the aggregate voting power of all outstanding shares of voting stock
of the Corporation. |
Shares of stock shall not be transferable on the books of the Corporation to aliens,
foreign governments, or corporations organized under the laws of foreign countries,
or to the representatives of, or persons holding for the account of, such aliens,
foreign governments, or corporations organized under the laws of foreign countries,
unless, after giving effect to such transfer, the aggregate number of shares of
stock owned by or for the account of aliens, foreign
governments, and corporations organized under the laws of foreign countries, and any
representatives thereof, will not exceed twenty percent (20%) of the number of shares of outstanding stock of the Corporation, and the aggregate voting power of
such shares will not exceed twenty percent (20%) of the aggregate voting power of
all outstanding shares of voting stock of the Corporation.
If, notwithstanding the restriction on transfer set forth in this Article 3E, the
aggregate number of shares of stock owned by or for the account of aliens, foreign
governments, and corporations organized under the laws of foreign countries, exceed
twenty percent (20%) of the number of shares of outstanding stock of the
Corporation, or if the aggregate voting power of such shares exceed twenty percent
(20%) of the aggregate voting power of all outstanding shares of voting stock of the
Corporation, the Corporation shall have the right to redeem shares of all classes of
capital stock, at their then fair market value, on a pro rata basis, owned by or for
the account of all aliens, foreign governments, and corporations organized under the
laws of foreign countries, in order to reduce the number of shares and/or percentage
of voting power held by or for the account of aliens, foreign governments, and
corporations organized under the laws of foreign countries, and their
representatives to the maximum number or percentage allowed under these Articles of
Incorporation or as otherwise required by applicable federal law.
The Board of Directors shall make such rules and regulations as it deems necessary
or appropriate to enforce the foregoing provisions of this Article 3E.
ARTICLE 4
SHAREHOLDER RIGHTS
A. |
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No shareholder of the Corporation shall have any preemptive rights. |
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B. |
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No shareholder of the Corporation shall have any cumulative voting rights. |
ARTICLE 5
WRITTEN ACTION BY LESS THAN ALL OF THE DIRECTORS
Any action required or permitted to be taken at a Board meeting, other than an action
requiring shareholder approval, may be taken by written action of the Board of Directors if signed
by the number of directors that would be required to take the same action at a meeting at which all
directors were present.
ARTICLE 6
LIMITED LIABILITY OF DIRECTORS
To the fullest extent permitted by law, a director shall have no personal liability to the
Corporation or its shareholders for breach of fiduciary duty as a director. Any amendment to or
repeal of this Article 6 shall not adversely affect any right or protection of a director of the
Corporation for or with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.
ARTICLE 7
No officer or director of the Corporation shall be an alien, or a representative of a foreign
government.
The term alien as used in these Articles of Incorporation shall have the meaning assigned to
such term in the Communications Act of 1934 , as amended.
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CERTIFICATE OF DESIGNATION OF
SERIES B REDEEMABLE PREFERRED STOCK
Pursuant to Section 302A.401 of the Minnesota Business Corporation Act, ValueVision Media,
Inc., a Minnesota corporation (the Corporation), hereby certifies that the following resolutions
were duly adopted by its Board of Directors on February 25, 2009, to set forth the powers,
designations, preferences and relative, participating, optional or other rights of its Series B
Redeemable Preferred Stock:
RESOLVED, that, pursuant to the authority granted to the Board of Directors in the Articles of
Incorporation, there is hereby created, and the Corporation is hereby authorized to issue, a series
of preferred stock having the following designations, relative rights and preferences:
I. Designation of Series and Number of Shares. This series of the preferred stock shall be
designated the Series B Redeemable Preferred Stock (the Preferred Stock) and shall consist of
4,929,266 shares, par value $0.01 per share. The stated value of the Preferred Stock shall be
$8.288 per share (subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization with respect to the Preferred Stock )
(as adjusted, the Stated Value). The number of shares of Preferred Stock may be decreased from
time to time, as such shares are redeemed as provided herein or otherwise reacquired by the
Corporation, by a resolution of the Board of Directors filed with the Secretary of State of the
State of Minnesota.
II. Rank.
(a) All shares of Preferred Stock shall rank prior, both as to payment of dividends and
as to distributions of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, to all of the Corporations now or hereafter
issued Common Stock, par value $0.01 per share (Common Stock), and to all of the
Corporations now existing or hereafter issued capital stock which by its terms ranks junior
to the Preferred Stock both as to the payment of dividends and as to distributions of assets
upon liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, when and if issued (the Common Stock and any such other capital stock being
herein referred to as Junior Stock).
(b) Except as expressly permitted by Section 3.03(a)(ii)(B)(3) of the Shareholder
Agreement (as defined below), no payment on account of the purchase, redemption, retirement
or other acquisition of shares of Junior Stock or any class or series of the Corporations
capital stock which by its terms ranks junior to the Preferred Stock as to distributions of
assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary (the Junior Stock and any such other class or series of the Corporations
capital stock being herein referred to as Junior Liquidation Stock), shall be made
directly or indirectly by the Corporation unless and until all the Preferred Stock shall
have been redeemed as provided for herein or otherwise reacquired by the Corporation.
III. Dividends.
(a) From and after the date of the issuance of any shares of Preferred Stock (the
Issue Date), dividends shall accrue at the rate of 12.0% per annum (compounded quarterly)
(the Standard Rate) (or at the Default Rate (as hereinafter defined), if, and to the
extent, applicable) of the Base Amount (as hereinafter defined) on such shares of Preferred
Stock (the Accruing Dividends). Notwithstanding the previous sentence, dividends shall
accrue at the rate of 15.0% per annum (compounded quarterly) (the Default Rate) of the
Base Amount from and after the date of any Default (as hereinafter defined) through and
including the date on which the Corporation has cured any Default. Accruing Dividends shall
accrue and be declared by the Board of the Corporation on February 25, May 25, August 25,
and November 25 of each year (commencing with the first such date to occur after the Issue
Date) and shall be cumulative (whether or not declared and whether or not the Corporation
has funds legally available therefor); provided however, the Accruing Dividends shall only
be payable as set forth in this Section III(a) or in Sections IV or V. The Corporation
shall not declare, pay or set aside any dividends on shares of any Junior Stock, other than
dividends payable solely in shares of Junior Stock, so long as any shares of Preferred Stock
are outstanding. Holders of Preferred Stock will not be entitled to any dividends, whether
payable in cash, property or stock, in excess of the dividends provided for herein. Such
dividends shall be payable to holders of record at the close of business on the date
specified by the Board of Directors (or, to the extent permitted by applicable law, a duly
authorized committee thereof). All dividends paid with respect to shares of Preferred Stock
pursuant to this Section III shall be paid pro rata to the holders entitled thereto. The
Base
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Amount means the aggregate Stated Value of all outstanding shares of Preferred Stock
plus the Accruing Dividends to date on such shares (to the extent not previously paid in
cash); Default means failure by the Corporation to pay in cash when due any of the
redemption payments required under Sections V(a) or V(c) (without regard to the Companys
failure to provide a redemption notice as provided in Section V), notwithstanding for this
purpose the requirement that funds be legally available therefor; and cure of any Default
refers to the date on which the Corporation has paid in cash any and all amounts otherwise
required to be paid, notwithstanding for this purpose the requirement that funds be legally
available therefor, under Sections V(a) or V(c).
(b) No dividends shall be declared, paid or set apart for payment on shares of any
class or series of the Corporations capital stock whether now existing or hereafter issued
which by its terms ranks, as to dividends, on a parity with the Preferred Stock (any such
class or series of the Corporations capital stock being herein referred to as Parity
Dividend Stock) for any period unless dividends have been, or contemporaneously are, paid
or declared and set apart for payment on the Preferred Stock. No dividends shall be paid on
Parity Dividend Stock except on dates on which dividends are paid on the Preferred Stock.
All dividends paid or declared and set apart for payment on the Preferred Stock and any
Parity Dividend Stock shall be paid or declared and set apart for payment pro rata so that
the amount of dividend paid or declared and set apart for payment per share on the Preferred
Stock and the Parity Dividend Stock on any date shall in all cases bear to each other the
same ratio that accrued and unpaid dividends on the Preferred Stock and the Parity Dividend
Stock bear to each other.
IV. Liquidation Preference. In the event of a liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of the then outstanding shares of
Preferred Stock shall be entitled to receive out of the assets of the Corporation available for
distribution to shareholders an amount in cash equal to the Stated Value for each share
outstanding, plus an amount in cash equal to the Accruing Dividends on such shares on the date of
final distribution to such holders (to the extent not previously paid in cash) before any payment
shall be made or any assets distributed to the holders of shares of Junior Liquidation Stock. The
entire assets of the Corporation available for distribution to holders of Preferred Stock and any
class or series of the Corporations capital stock which by its terms ranks on a parity with the
Preferred Stock as to distributions of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary (any such class or series of the Corporations
capital stock being herein referred to as Parity Liquidation Stock) shall be distributed ratably
among the holders of the Preferred Stock and any Parity Liquidation Stock in proportion to the
respective preferential amounts (including accrued and unpaid dividends, if any) to which each is
entitled (but only to the extent of such preferential amounts). After payment in full of the
liquidation preferences of the shares of the Preferred Stock, the holders of such shares shall not
be entitled to any further participation in any distribution of assets by the Corporation.
V. Redemption.
(a) Mandatory Redemption. The Corporation shall redeem for cash, out of any source of
funds legally available therefor, at a redemption price in each case equal to 100% of the
Stated Value per share, plus an amount in cash equal to all Accruing Dividends thereon
outstanding to the applicable redemption date (to the extent not previously paid in cash)
(the Redemption Price), shares of Preferred Stock in such amounts and at such dates as set
forth below in this Section V(a):
(i) On the fourth anniversary of the Issue Date, the Corporation shall pay an
amount equal to (A) $19,667,495, plus (B) an amount in cash equal to 30% of any
additional Accruing Dividends that have accrued since the Issue Date (to the extent
not previously paid in cash) as a result of the Default Rate (rather than the
Standard Rate) being in effect, less (C) any amounts previously paid by the
Corporation under Sections V(a)(iii), V(a)(iv), V(b) and V(c), which amount shall be
applied first to all Accruing Dividends not previously paid in cash
on outstanding shares of Preferred Stock (pro rata with respect to all shares of Preferred Stock
then outstanding), and then to redeem shares of Preferred Stock at the Redemption
Price.
(ii) On the fifth anniversary of the Issue Date, the Corporation shall redeem
any and all remaining outstanding shares of Preferred Stock as of such date at the
Redemption Price;
(iii) Within 90 calendar days following the end of each fiscal year of the
Corporation (commencing with the fiscal year ending January 31, 2010), the
Corporation shall, in the
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following priority order, (1) apply any Excess Cash Balance as of the end of
such fiscal year to pay any Accruing Dividends on outstanding shares of Preferred
Stock not previously paid in cash (pro rata with respect to all shares of Preferred
Stock then outstanding), and (2) redeem that number of shares of Preferred Stock
obtained by dividing any remaining Excess Cash Balance as of the end of such fiscal
year (after the payments required by clause (1) of this Section V(a)(iii)) by the
Redemption Price. Excess Cash Balance as of the end of any fiscal period means an
amount equal to (1) the cash and cash equivalents and marketable securities (the
Cash Balance) reported on the Corporations audited, if at fiscal year-end, or
unaudited, if at fiscal quarter-end, balance sheet as of the end of such fiscal
period (the Balance Sheet), less (2) the amount included in such Cash Balance
attributable to any securities held by the Corporation that are characterized as
auction rate securities (or similar term), less (3) the amount obtained (whether
positive or negative) from subtracting (i) the accounts payable that would have been
reported on the Balance Sheet had all accounts payable been paid on stated terms
(and no earlier or later), from (ii) the accounts payable reported on the Balance
Sheet, less (4) the bona fide estimated additional cash required to fund operations,
as reasonably determined and reflected in an operating budget approved by the
Corporations Board of Directors for the next four fiscal quarters following the end
of such fiscal period (the Additional Cash Amount), less (5) the amount included
in the Cash Balance that is attributable to cash pledged to vendors and other
similar entities to secure the purchase price of inventory acquired in the ordinary
course of business, less (6) $20,000,000.
(iv) Within 45 calendar days following the end of any fiscal quarter of the
Corporation (except the fourth fiscal quarter of the Corporation, in which case
Section V(a)(iii) shall be applicable) during which an ARS Event (as defined below),
an Asset Sale Event (as defined below) or a Financing Event (as defined below)
occurs, the Corporation shall, in the following priority order, (1) apply any Excess
Cash Balance as of the end of such fiscal quarter to pay any Accruing Dividends on
outstanding shares of Preferred Stock not previously paid in cash (pro rata with
respect to all shares of Preferred Stock then outstanding), and (2) redeem that
number of shares of Preferred Stock obtained by dividing any remaining Excess Cash
Balance as of the end of such fiscal quarter (after the payments required by clause
(1) of this Section V(a)(iv)) by the Redemption Price. ARS Event means the
receipt of any net cash proceeds from the sale or other disposition of any
securities held by the Corporation that are characterized as auction rate
securities (or similar term). Asset Sale Event means a sale or other disposition
for cash by the Corporation of fixed assets outside of the ordinary course of
business and Financing Event means the issuance by the Corporation of indebtedness
for borrowed money outside of the ordinary course of business; provided that an
Asset Sale Event or Financing Event shall not be deemed to occur for purposes of the
first sentence of this Section V(a)(iv) unless such Asset Sale Event or Financing
Event, together with any prior Asset Sale Events and Financing Events, generates net
cash proceeds to the Corporation in excess of (x) $500,000 in the current fiscal
year or (y) $2,500,000 since the Issue Date; provided, however, that the $500,000
limit in clause (x) shall be increased to the extent such $500,000 limit was not
entirely utilized in any prior fiscal year since the Issue Date.
(b) Redemption at Option of the Corporation. At any time and from time to time, at the
option of the Corporation and upon five calendar days prior written notice to the record
holders of the Preferred Stock, the Corporation may redeem for cash, out of any source of
funds legally available therefor, all or any of the outstanding shares of Preferred Stock,
at the Redemption Price; provided, however, that no share of Preferred Stock may be redeemed
pursuant to this Section V(b) until all Accruing Dividends on outstanding shares of
Preferred Stock not previously paid in cash have been fully paid in cash.
(c) Redemption Upon Change in Control. Upon the occurrence of a Change in Control, the
Preferred Stock shall be redeemable at the option of the holders thereof, in whole or in
part, at the Redemption Price. The Corporation shall redeem the number of shares specified
in the holders notices of election to redeem pursuant to Section V(e) on the date fixed for
redemption. A Change of Control shall mean (i) the consummation by the Corporation of a
merger, consolidation or other business combination in a transaction or series of
transactions as a result of which the holders of the Common Stock immediately prior to such
transaction or series of transactions will hold less than 50% of the voting power of all
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outstanding voting securities of the surviving entity, (ii) the consummation of a sale
or other disposition in one or more transactions by the Corporation or its subsidiaries of
all or substantially all of the Corporations consolidated assets other than among the
Corporation and its subsidiaries, (iii) the acquisition by any person or entity, together
with its affiliates (as defined in Rule 12b-2 under the Exchange Act of 1934, as amended
(the Exchange Act)), or any other group (as defined in Section 13(d) of the Exchange Act),
including through the formation of any such group or the affiliation of any such persons or
entities other than any Restricted Party (as defined in the Shareholder Agreement) or an
Affiliate thereof or any 13D Group (as defined in the Shareholder Agreement) of which any of
them is a member, of beneficial ownership of a majority of the voting power of all the then
outstanding voting securities of the Corporation entitled to vote generally in the election
of directors or (iv) Continuing Directors no longer constitute a majority of the Board of
Directors of the Corporation. For purposes of this paragraph (b), Continuing Directors
shall mean (i) each director who is a member of the Board of Directors of the Corporation on
the date hereof and (ii) each other director whose initial nomination as a director was
approved by a majority of the Continuing Directors as of the time of such nomination
(including, without limitation, director designees of the Restricted Parties pursuant to the
Shareholder Agreement).
(d) Procedure for Mandatory or Optional Redemption; Notices.
(i) In the event that the Corporation shall redeem shares of Preferred Stock
pursuant to Section V(a) or V(b) hereof, notice of such redemption shall be mailed
by first-class mail, postage prepaid, and mailed (1) in the case of a mandatory
redemption under Section V(a)(i) or V(a)(ii), not less than 30 days nor more than 90
days prior to the redemption date, (2) in the case of a mandatory redemption under
Section V(a)(iii) or V(a)(iv), not less than 10 days nor more than 90 days prior to
the redemption date, and (iii) in the case of an optional redemption under Section
V(b), not less than 5 days nor more than 90 days prior to the redemption date, in
any case to the holders of record of the shares to be redeemed at their respective
addresses as they shall appear in the records of the Corporation; provided, however,
that failure of the Corporation to give such notice or any defect therein or in the
mailing thereof shall not affect the validity of the proceeding for the redemption
of any shares so to be redeemed except as to the holder to whom the Corporation has
failed to give such notice or except as to the holder to whom notice was defective.
Each such notice shall state: (A) the redemption date; (B) the amount of Accruing
Dividends to be paid; (C) the number of shares of Preferred Stock to be redeemed;
(D) the Redemption Price; and (E) the place or places where certificates for such
shares are to be surrendered for payment of the Redemption Price (which place shall
be the principal place of business of the Corporation). In the event the
Corporation does not have sufficient funds legally available to redeem for cash at
the Redemption Price on any mandatory redemption date all shares of Preferred Stock
required to be redeemed on such redemption date, such failure to
redeem all such shares shall constitute a Default (notwithstanding for this purpose the requirement
that funds be legally available therefor), the Corporation shall redeem for cash at
the Redemption Price the maximum number of shares that can be redeemed by the
Corporation out of any source of funds legally available therefor, and shall redeem
for cash at the Redemption Price the remaining shares to have been redeemed as soon
as the Corporation has sufficient funds legally available therefor.
(ii) The Corporation agrees that in the event that its Board of Directors
determines that there are insufficient funds legally available (in accordance with
the Minnesota Business Corporation Act) for any redemption (in whole or in part) of
the Preferred Stock pursuant to Section V, the Corporation shall provide a notice to
each holder of Series B Preferred Stock within 5 calendar days of such
determination, signed by the Chief Financial Officer of the Corporation. Such
notice shall disclose the most recent financial information (including all
underlying assumptions, calculations and other information related thereto),
provided to the Board of Directors for purposes of making such determination as well
as the amount of funds legally available to the Corporation, as determined by the
Board of Directors.
(iii) Within 5 calendar days after the determination by the Corporations Board
of Directors of whether the Corporation has an Excess Cash Balance, the Corporation
shall provide a notice, signed by the Chief Financial Officer of the Corporation, to
each holder of Series B Preferred Stock setting forth in reasonable detail the
calculation of the Excess Cash Balance, if any, as well as the Additional Cash
Amount, if any, and shall include the most recent financial
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information (including all underlying assumptions, calculations and other
information related thereto) provided to the Board of Directors for reviewing and
approving such determinations, and a confirmation that the Corporations Board of
Directors has approved such determinations.
(e) Procedure for Change in Control Redemption.
(i) If a Change in Control should occur, then, in any one or more of such
events the Corporation shall give written notice by first-class mail, postage
prepaid, to each holder of Preferred Stock at its address as it appears in the
records of the Corporation, which notice shall describe such Change in Control and
shall state the date on which the Change in Control is expected to take place, and
shall be mailed within 10 business days following the occurrence of the Change in
Control. Such notice shall also set forth (in addition to the information required
by the next succeeding paragraph): (A) each holders right to require the
Corporation to redeem for cash shares of Preferred Stock held by such holder as a
result of such Change in Control; (B) the Redemption Price; (C) the optional
redemption date (which date shall be no earlier than 30 days and no later than 90
days from the date of such Change in Control); and (D) the procedures to be followed
by such holder in exercising its right of redemption, including the place or places
where certificates for such shares are to be surrendered for payment of the
Redemption Price (which place shall be the principal place of business of the
Corporation). In the event a holder of shares of Preferred Stock shall elect to
require the Corporation to redeem any or all of such shares of Preferred Stock, such
holder shall deliver, within 20 days of the mailing to it of the Corporations
notice described in this Section V(e), a written notice stating such holders
election and specifying the number of shares to be redeemed pursuant to Section V(c)
hereof.
(ii) In the case of any redemption pursuant to Section V(c) hereof, the notice
by the Corporation shall describe the Change in Control, including a description of
the Surviving Person and, if applicable, the effect of the Change in Control on the
Common Stock. The notice shall be accompanied by (A) the consolidated balance sheet
of the Corporation and its Subsidiaries as of the end of the most recent fiscal year
of the Corporation for which such information is available and the related
consolidated statements of operations and cash flows for such fiscal year, in each
case setting forth the comparative figures for the preceding fiscal year,
accompanied by an opinion of independent public accountants of nationally recognized
standing selected by the Corporation as to the fair presentation in accordance with
generally accepted accounting principles of such financial statements, and (B) a
consolidated balance sheet of the Corporation and its Subsidiaries as of the end of
the most recent fiscal quarter of the Corporation for which such information is
available and the related consolidated statements of operations and cash flows for
such quarter and for the portion of the Corporations fiscal year ended at the end
of such fiscal quarter, in each case setting forth in comparative form the figures
for the corresponding quarter and the corresponding portion of the Corporations
preceding fiscal year. For so long as the Corporation is subject to the periodic
reporting requirements of the Exchange Act and makes timely filings thereunder, the
delivery requirements of the preceding sentence shall be satisfied by the
Corporations most current report, schedule, registration statement, definitive
proxy statement or other document on file with the United States Securities and
Exchange Commission.
(f) Notice by the Corporation having been mailed as provided in Section V(d) hereof, or
notice of election having been mailed by the holders as provided in Section V(e) hereof, and
provided that on or before the applicable redemption date funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from its other
funds, in trust for the pro rata benefit of the holders of the shares so called for or
entitled to redemption, so as to be and to continue to be available therefor, then, from and
after the redemption date (unless the Corporation defaults in the payment of the Redemption
Price, in which case such rights shall continue until the Redemption
Price is paid), such shares shall no longer be deemed to be outstanding and shall not have the status of shares
of Preferred Stock, and all rights of the holders thereof as shareholders of the Corporation
shall cease. Upon surrender of the certificates for any shares so redeemed (properly
endorsed or assigned for transfer, if the Board of Directors of the Corporation shall so
require and a notice by the Corporation shall so state), such shares shall be redeemed by
the Corporation for cash at the Redemption Price as aforesaid. In
case fewer than all the shares represented by any such certificate are redeemed, a new certificate or certificates
shall be issued representing the unredeemed shares without cost to the holder thereof.
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VI. No Conversion Rights.
(a) No Conversion. The Preferred Stock is not convertible into shares of Common Stock
or any other securities, and is entitled solely to the designations, relative rights and
preferences set forth in this certificate.
(b) Reclassification, Consolidation, Merger or Sale of Assets. In the event that the
Corporation shall be a party to any transaction pursuant to which the Common Stock is
converted into the right to receive other securities, cash or other property (including
without limitation any capitalization or reclassification of the Common Stock (other than a
change in par value, or from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination of the Common Stock), any consolidation of
the Corporation with, or merger of the Corporation into, any other entity, any merger of
another entity into the Corporation (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of Common
Stock), any sale or transfer of all or substantially all of the assets of the Corporation or
any share exchange), then effective provisions shall be made in the certificate or articles
of incorporation of the resulting or surviving corporation, in any contract of sale,
conveyance, lease, transfer or otherwise so that the provisions set forth herein for the
protection of the rights of the holders of Preferred Stock shall thereafter continue to be
applicable, and any such resulting or surviving corporation shall expressly assume the
obligation to pay dividends on and redeem the Preferred Stock as set forth herein. The above
provisions shall similarly apply to successive transactions of the foregoing type.
(c) Prior Notice of Certain Events. In case:
(i) the Corporation shall (1) declare any dividend (or any other distribution)
on its Common Stock, other than (A) a dividend payable in shares of Common Stock or
(B) a dividend payable in cash out of its retained earnings other than any special
or nonrecurring or other extraordinary dividend or (2) declare or authorize a
redemption or repurchase of in excess of 5% of the then outstanding shares of Common
Stock;
(ii) the Corporation shall authorize the granting to all holders of Common
Stock of rights or warrants to subscribe for or purchase any shares of stock of any
class or series or of any other rights or warrants;
(iii) of any reclassification of Common Stock (other than a subdivision or
combination of the outstanding Common Stock, or a change in par value, or from par
value to no par value, or from no par value to par value), or of any consolidation
or merger to which the Corporation is a party and for which approval of any
shareholders of the Corporation shall be required, or of the sale of all or
substantially all of the assets of the Corporation or of any share exchange whereby
the Common Stock is converted into other securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution, liquidation or winding up of
the Corporation;
then the Corporation shall cause to be filed with the Transfer Agent for the Preferred
Stock, and shall cause to be mailed to the holders of record of the Preferred Stock, at
their last addresses as they shall appear upon the stock transfer books of the Corporation,
at least ten days prior to the applicable record or effective date hereinafter specified, a
notice stating (x) the date on which a record (if any) is to be taken for the purpose of
such dividend, distribution, redemption, repurchase, or grant of rights or warrants or, if a
record is not to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, redemption, repurchase, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation, winding up or other event is expected to
become effective, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation, winding up or other event (but no
failure to mail such notice or any defect therein or in the mailing thereof shall affect the
validity of the corporate action required to be specified in such notice).
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VII. Voting Rights.
(a) General. Subject to Sections VII(b), VII(c) and XI(b) and except as set forth below
or as otherwise from time to time required by law, the holders of shares of Preferred Stock
shall vote as a class together with the holders of the Common Stock on all matters with
respect to which the holders of Common Stock have the right to vote. In connection with any
right to vote, each share of Preferred Stock shall be entitled to one
vote per share. Any shares of Preferred Stock owned, directly or indirectly, by any entity of which the
Corporation owns, directly or indirectly, a majority of the shares entitled to vote for
directors shall not have voting rights hereunder and shall not be counted in determining the
presence of a quorum.
(b) Limitations on Voting Rights. Notwithstanding Section VII(a), no share of
Preferred Stock shall have any right to vote as a class together with the holders of the
Common Stock on any matter pursuant to Section VII(a) if (1) such share is transferred to
any third party other than a Restricted Party (as defined in the Shareholder Agreement), or
(2) to the extent that shares of Common Stock are issued pursuant to the exercise of the
Warrant (as hereinafter defined), on a one share of Common Stock so issued per one share of
Preferred Stock outstanding basis (subject to appropriate adjustment in the event of any
stock dividend, stock split, combination or other similar recapitalization). Warrant
means that certain Warrant to purchase 6,000,000 shares of Common Stock dated February 25,
2009 issued to GE Capital Equity Investments, Inc.
(c) Voting Rights for Directors.
(i)
For so long as the Restricted Parties own a majority of the outstanding shares of Preferred Stock and the Investor (as defined in the Shareholder Agreement)
is entitled to designate at least two nominees (each, a Designee) for election to
the Board of Directors of the Corporation pursuant to Section 2.01 of the
Shareholder Agreement, subject to Section XI(b), the holders of
the outstanding shares of Preferred Stock shall have the right, voting separately as a class and to
the exclusion of the holders of all other classes of stock of the Corporation, to
(A) initially elect three directors (who are reasonably acceptable to the
Corporation) and (B) thereafter, as long as the Investor is entitled to designate at
least two Designees for election to the Board of Directors pursuant to Section 2.01
of the Shareholder Agreement, elect that number of directors equal to the number of
Designees that the Investor is entitled to so designate (with each Designee being
reasonably acceptable to the Corporation if such Designee has not previously been a
member of the Board of Directors). For as long as the holders of Preferred Stock
voting separately as a class are entitled to elect two or more directors pursuant to
this Section VII(c)(i), holders of the outstanding Preferred Stock shall not be
entitled to vote in the election of any other directors of the Corporation.
(ii) The right to elect directors as described in Section VII(c)(i) hereof may
be exercised at any annual meeting of shareholders held for the purpose of electing
directors or by the written consent of the holders of Preferred Stock without a
meeting pursuant to Section 302A.441 of the Minnesota Business Corporation Act. For
so long as the Restricted Parties own a majority of the outstanding shares of
Preferred Stock and the Investor is entitled to designate at least two Designees for
election to the Board of Directors of the Corporation pursuant to Section 2.01 of
the Shareholder Agreement and subject to Section XI(b) hereof, such voting right
shall continue until such time as all outstanding shares of Preferred Stock shall
have been redeemed or otherwise retired. If the Restricted Parties own less than a
majority of the outstanding shares of Preferred Stock or if the Investor is no
longer entitled to designate at least two Designees for election to the Board of
Directors pursuant to Section 2.01 of the Shareholder Agreement, the holders of the
Preferred Stock shall, in any election of directors, vote as a single class together
with the holders of the Common Stock for the election of directors and each share of
Preferred Stock will be entitled to one vote per share, except as provided in
Section VII(b).
(iii) The Secretary of the Corporation may, and upon the written request of the
holders of record of at least 10% of the outstanding shares of Preferred Stock
(addressed to the Secretary of the Corporation at the principal office of the
Corporation) shall, call a special meeting of the holders of Preferred Stock for the
election (and, if applicable, removal) of the directors to be elected by them as
herein provided. Such call shall be made by notice to each holder by first-class
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mail, postage prepaid at its address as it appears in the records of the
Corporation, and such notice shall be mailed at least 10 days but no more than 20
days before the date of the special meeting, or as required by law. Such meeting
shall be held at the earliest practicable date upon the notice required for special
meetings of shareholders at the place designated by the Secretary of the
Corporation. If such meeting shall not be called by a proper officer of the
Corporation within 15 days after receipt of such written request by the Secretary of
the Corporation, then the holders of record of at least 10% of the shares of
Preferred Stock then outstanding may call such meeting at the expense of the
Corporation, and such meeting may be called by such holders upon the notice required
for special meetings of shareholders and shall be held at the place designated in
such notice. Any holder of Preferred Stock that would be entitled to vote at any
such meeting shall have access to the stock books of the Corporation for the purpose
of causing a meeting of holders of Preferred Stock to be called pursuant to the
provisions of this Section VII(c)(iii).
(iv) At any meeting held for the purpose of electing directors at which the
holders of Preferred Stock shall have the right to elect directors as a class as
provided in this Section VII(c), the presence in person or by proxy of the holders
of a majority of the then outstanding shares of Preferred Stock shall be required
and be sufficient to constitute a quorum of such class for the election of directors
by such class. At any such meeting or adjournment thereof, (x) the absence of a
quorum of the holders of Preferred Stock shall not prevent the election of directors
other than the directors to be elected by the holders of Preferred Stock as a class,
and the absence of a quorum or quorums of the holders of capital stock entitled to
elect such other directors shall not prevent the election of the directors to be
elected by the holders of Preferred Stock, and (y) in the absence of a quorum of the
holders of Preferred Stock, a majority of the holders of Preferred Stock present in
person or by proxy shall have the power to adjourn the meeting for the election of
directors which such holders are entitled to elect as a class, from time to time,
without notice (except as required by law) other than announcement at the meeting,
until a quorum shall be present.
(v) Except as provided in Section XI(b) hereof and this paragraph (v), the term
of office of any director elected by the holders of Preferred Stock pursuant to
Section VII(c)(i) hereof shall terminate upon the expiration of his term and the
election of his successor. Directors elected by the holders of Preferred Stock
pursuant to Section VII(c) may be removed with or without cause by the holders of a
majority of the outstanding shares of Preferred Stock and shall not otherwise be
subject to removal other than upon election of their successor or the Preferred
Stock voting separately as a class no longer being entitled to elect directors as
provided herein.
(vi) For so long as the holders of Preferred Stock are entitled, voting
separately as a class, to elect at least two members of the Board of Directors and
the Restricted Parties own a majority of the outstanding Preferred Stock, in case of
a vacancy occurring in the office of any director so elected pursuant to Section
VII(c)(i) hereof, the holders of a majority of the Preferred Stock then outstanding
may, at a special meeting of the holders or by written consent as provided above,
elect a successor to hold office for the unexpired term of such director.
(vii) Unless otherwise agreed to by the holders of a majority of the
outstanding shares of Preferred Stock, for so long as the holders of Preferred Stock
are entitled, voting separately as a class, to elect at least two members of the
Board of Directors and the Restricted Parties own a majority of the outstanding
Preferred Stock, (A) the number of directors constituting the Board of Directors
shall remain at nine, (B) each of the Audit Committee and the Compensation Committee
of the Board of Directors shall contain at least one director elected by the holders
of Preferred Stock and (C) with respect to each other committee of the Board of
Directors, the percentage of directors on such committee designated by the holders
of Preferred Stock shall, at all times, be at least equal to the percentage of the
Board of Directors elected by the holders of Preferred Stock; provided, that, if
under applicable law or the rules and regulations of the securities exchange or
automated quotation system upon which the Common Stock is listed, such director
elected by the holders of Preferred Stock is not permitted to serve on any such
Committee, then the provisions of clauses (B) and (C) shall not apply to the holders
of the Preferred Stock.
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(d) Class Voting. So long as any shares of Preferred Stock are outstanding the
Corporation shall not, without the affirmative vote or consent of the holders of at least a
majority of all outstanding shares of the Preferred Stock, voting or consenting separately
as a class without regard to series:
(i) create any class of stock that by its terms ranks senior to or on a parity
with the Preferred Stock as to dividends or upon liquidation, dissolution or winding
up of the Corporation or increase the authorized number of shares of, or issue any
additional shares of or any securities convertible into shares of, or reclassify any
Junior Stock into shares of, any such class;
(ii) alter or change any of the provisions of the Corporations Articles of
Incorporation (whether by merger, consolidation or other business combination with
another person or by any other means) so as to adversely affect the relative rights
and preferences of any outstanding Preferred Stock of the Corporation; provided,
however, that neither (A) the creation, amendment or reclassification of any class
of stock that following such creation, amendment or reclassification by its terms
ranks junior to shares of Preferred Stock of the Corporation as to dividends and
upon liquidation, dissolution or winding up, nor (B) an increase in the authorized
number of shares of any such class, nor (C) any merger, consolidation or other
business combination subject to the provisions of Section VI(b), shall give rise to
any such voting right;
(iii) issue any additional shares of Preferred Stock.
(e) Additional Class Voting. Unless otherwise agreed to by the holders of a majority of
the outstanding shares of Preferred Stock, for so long as the Restricted Parties own a
majority of the outstanding shares of Preferred Stock, the Corporation shall not, without
the express written consent of the holders of a majority of the shares of Preferred Stock,
take any action, requiring the approval of the Investor pursuant to Sections 3.02, 3.03 or
3.04 of the Shareholder Agreement. The provisions of this paragraph (d) will terminate with
respect to such Sections 3.02, 3.03 or 3.04, as applicable, when the obligations of the
Corporation under such Sections terminate under the Shareholder Agreement.
VIII. Status of Acquired Shares. For purposes hereof, all shares of Preferred Stock owned,
directly or indirectly, by any entity of which the Corporation owns, directly or indirectly, a
majority of the shares entitled to vote for directors shall be deemed not outstanding. Subject to
the Board of Directors right to reduce the shares of Preferred Stock pursuant to Section I, shares
of Preferred Stock redeemed by the Corporation or otherwise acquired by the Corporation shall be
restored to the status of authorized but unissued shares of capital stock, without designation as
to series, and, subject to the other provisions hereof, may thereafter be issued, but not as shares
of Preferred Stock.
IX. Modification and Waiver. The Corporation may not, without the consent of each holder
affected thereby, (a) change the stated redemption date of the Preferred Stock, (b) reduce the
Stated Value or liquidation preference of, or dividend on, the Preferred Stock, (c) change the
place or currency of payment of the Stated Value or liquidation preference of, or dividend on, the
Preferred Stock or (d) reduce the percentage of outstanding Preferred Stock necessary to modify or
amend the terms thereof or to grant waivers in respect thereto.
X. Severability of Provisions. Whenever possible, each provision hereof shall be interpreted
in a manner as to be effective and valid under applicable law, but if any provision hereof is held
to be prohibited by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting
the remaining provisions hereof. If a court of competent jurisdiction should determine that a
provision hereof would be valid or enforceable if a period of time were extended or shortened or a
particular percentage were increased or decreased, then such court may make such change as shall be
necessary to render the provision in question effective and valid under applicable law.
XI. Miscellaneous.
(a) Transfer Taxes. The Corporation shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance of delivery of shares
of Preferred Stock or certificates or instruments evidencing such shares or securities. The
Corporation shall not, however, be required to pay any such tax which may be payable in
respect of any transfer involved in the issuance or delivery of shares of Preferred Stock in
a name other than that in which the shares of Preferred Stock with respect to which such
shares are issued or delivered were registered, or in respect of any payment to any entity
with respect to any such shares other than a payment to the registered holder thereof, and
shall not be
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required to make any such issuance, delivery or payment unless and until the entity
otherwise entitled to such issuance, delivery or payment has paid to the Corporation the
amount of any such tax or has established, to the satisfaction of the Corporation, that such
tax has been paid or is not payable.
(b) Shareholder Agreement. Reference is made to the Amended and Restated Shareholder
Agreement, dated as of February 25, 2009 (as the same may be amended, supplemented or
modified from time to time pursuant to the terms thereof, the Shareholder Agreement),
among the Corporation, the Investor and NBC Universal, Inc. The Preferred Stock shall be
subject to the terms and conditions set forth in the Shareholder Agreement, including
without limitation, the voting, transfer and standstill restrictions set forth therein.
(c) Documents on File. Copies of the Shareholder Agreement shall be kept on file at the
principal place of business of the Corporation at 6740 Shady Oak Road, Eden Prairie, MN
55344-3433.
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