Online incorporation services tout easy, fast, and cheap online incorporation and limited liability company (LLC) formation services. Examples include LegalZoom.com, MyCorporation.com, and IncorporateTime.com. Storefront and virtual paralegal services such as We the People and those found in the legal services section of your local craigslist also offer similar services. Their web sites and radio and TV sales pitches indicate that forming a corporation or LLC is as quick, easy, and inexpensive as filling out an online questionnaire and paying a fee of $100-150 for the completion of the paperwork and the filing of the documents with the secretary of state. This article reviews the advantages and disadvantages of these services overall - for specific reviews of a particular provider, you should look elsewhere (and preferably to those with direct experience using the service, as well as at least a year of business operations thereafter).
No legal advice:
In the fine print, many document preparation services state they are not law firms, cannot provide legal advice, and recommend that you consult an attorney for legal advice. Here's a word for word example from one web site: "This site is not a substitute for legal counsel.... You should consult legal counsel to determine applicable law for your situation." And from another: "[Our document preparation service] is not a substitute for an attorney or law firm." Only licensed attorneys can practice law and provide legal advice to clients, so these firms are wisely protecting themselves by making it clear that they are not in the business of providing legal advice; they are in the business of preparing whatever forms or filing you tell them to. Thus, the computer programmer's old adage, Garbage In, Garbage Out, applies. If you tell them to form a Nevada LLC, when you really need a California S corporation, they will in all likelihood produce a technically sufficient LLC, but it won't meet your actual business legal needs. Likewise, if you choose not to elect S-corporation status, and end up paying higher taxes as a C-corporation, this is not their fault; they are counting on you to know what you need, or to have consulted a lawyer and/or tax accountant before coming to them.
Many incorporation services would apparently seem to remedy this situation with lengthy FAQs and learning centers, but, frankly, a few minutes or even a few hours of research is not a substitute for a lawyer's college degree, three years of law school, and additional on-the-job training and annual continuing legal education. Any paralegal or incorporation service whose employees do provide legal advice is engaged in the unethical practice of law without a license, a crime in most jurisdictions, and their legal advice, for more reasons than one, should be taken with a grain of salt. Better yet, terminate your relationship with any such person immediately.
Other Legal Issues:
Attorneys will focus not just on forming an entity you have ordered them to, but in taking a step back, assessing your overall business plan and goals, and making sure the legal structure takes into account your particular circumstances, rather than assuming you and your business are exactly the same as the next guy and his business. They will also at least point out, and suggest options for best addressing, legal issues that arise tangentially to forming a corporation or LLC. Such issues that the average incorporation service customer may be blissfully unaware of include securities laws compliance, promissory notes, trademark and service mark issues, and employee and independent contractor law. (Tax issues are also inherent in incorporating, so working with a CPA or accountant is something I always recommend to clients before and after incorporating.) Agreements typical of new corporations or existing business which are growing and have decided to incorporate include employment agreements, independent contractor agreements, supplier agreements, web site terms of use and privacy policies, and shareholder buy-sell agreements. All of these should be customized to your needs, not fill in the blank forms, just as corporate bylaws and LLC operating agreements should be customized, not one size fits all.
Lack of Follow-Through:
A good business attorney will also assist you in following through in the formation of your corporation or LLC. By this I mean making sure the meeting minutes are appropriately customized to your needs and the corp. or LLC's formation documents are actually completed, signed, shares are actually issued to shareholders, and appropriate federal, state, and local filings are made. After having reviewed numerous incorporation service companies, usually a year or more later after problems have arisen, but also often times in the course of transactions such as sale of the business or part of it to a new shareholder, member, or partner, I have yet to see a company that was correctly set up. I can say the same of do-it-yourself incorporations, where the owner(s) didn't hire anyone and did it themselves. In most cases, the articles of incorporation (for LLCs, the articles of organization) have been completed and filed in an adequate, if not optimal, manner, and the bylaws or operating agreement is likewise present. However, such documents are generally never executed - they just sit on the shelf in a binder, as they have since they were mailed out by the incorporation service, and thus without any force or effect whatsoever. Frequently, they contain numerous blanks that the owner was supposed to fill in, but didn't because they didn't know how to, or just never got around to it.
These defects are not the fault of the incorporation service per se, but they are indicative of the different level of service provided by such companies, in comparison to an attorney. Such lack of completion can and does lead to problem later, however, because the company's limited liability status and good standing with the state can be jeopardized by missing or incomplete corporate documents, or by failure to create annual minuets and file initial and annual state level filings. Difficulties also occur when disputes among partners or co-owners later arise, and upon review of the bylaws or operating agreement, the parties find that the documents were never signed (and thus may not control), that they lack buyout procedures, or that they are vague or silent on how to handle disputes. It goes without saying that most of these disputes are much more costly to resolve later, once the proverbial horse of improper documentation and agreements has left the barn.
Hidden fees:
The actual fees charged by incorporation services often ends up being as much as two or three times higher as they low rates they advertise, once such "add-ons" (which in many cases are needed to achieve your legal aims) as name reservations, corporate minute books, expedited or rush service, EIN numbers, S-corp election, first meeting minutes, and initial statement of information, sales tax reseller's permit, business license, or other state or federal filings are made. Some services offer rates so low, they do not account for the minimum level of costs that must be expended to properly set up a company! In many but not all instances, law firms offering flat fee incorporations do not have hidden fees.
In any case, incorporation service prices cannot and do not include legal advice on the incorporation process or related legal issues, hand-holding, referrals to other professionals such as accountants and insurance agents, or follow-through to ensure that the business entity is actually implemented correctly. Upon seeing all the work that goes into an incorporation or LLC organization, the most common remark from my clients is not, 'That was easy; I should have used an incorporation service, saved your legal fees, and done it myself.' Rather, it is, 'I can't believe some people try to do all this themselves!' You should keep in mind the difference in the level or services provided when evaluating price, be on the lookout for hidden or additional fees beyond the base rate, and realize that if you are choose to select an attorney over an incorporation service, you are paying not only for that attorney's time and end work product, but also his education, experience, skill, and legal advice and counsel for your business.
Relationship with a lawyer:
In deciding to go it alone, you should keep in mind that sooner or later, if your business grows, you will need a business attorney. It may be more prudent to establish that relationship now via an incorporation and set yourself up for future growth and success, rather than wait until a legal emergency arises, only to find you don't know any attorneys, or that the attorney you do retain finds that there are numerous steps you could have taken in the past to avoid current fees, taxes, problems, and disputes.
The fact that these problems don't become apparent until months or years after the company's formation (especially if professionals such as attorneys and accountants are never hired and thereby given the opportunity to review the company and spot issues) means that many customers of incorporation services are initially well pleased with the service they have received. If you don't know what you didn't get, you have no reason to be unhappy about; instead focusing on the money saved now.
In my experience, rarely does money saved on legal services now pay off in long-term savings. More often, it's the old, pay now, or pay (more) later situation. Some errors, such as choice of entity decisions that were not tax favorable, cannot be undone, they can only be changed going forward. Likewise, after a shareholder or partnership dispute has arisen, it's usually too late for proper buy-sell provisions in the bylaws or operating agreement, a separate buy sell agreement, or an arbitration clause. If you don't have enough money to afford an attorney at the outset, perhaps you and your partners should consider committing additional funds to the enterprise, utilizing loans or credit cards to access additional funds, or wait until more financing can be accumulated or obtained, before proceeding in a less than optimal way. Most entrepreneurs are convinced of the future growth and profit prospects of their companies; thus, it is surprising they often don't follow in the footsteps of other successful enterprises and allocate appropriate funds for legal services. The adage, "Failing to plan is planning to fail" applies here.
Volume business:
Incorporating services are sometimes called incorporation mills. By their very nature, they are in a volume business; they cannot charge low prices and provide personalized attention or service. In general, they make their profits by selling a non-customized or a minimally customized product over and over to as many customers as possible. Law firms, on the other hand, provide customized legal advice and services to each client on an individual basis. Law firms can handle unusual capital, profit, loss, or other allocation issues that fully and correctly utilize corporations and LLCs, and advise when such use is appropriate and when it is not. Incorporation mills will, for the most part, sell you whatever you ask for; it's your responsibility to determine whether you are ordering the right product from them.
But aren't you, as a California incorporation lawyer, biased?:
That's certainly a legitimate question, and it's up to you to take to heart or disregard the opinions and advice in this article, but I would answer it this way: Because I am a business attorney, I have seen the result of using these services in a way most lay people would not, and as a result cannot recommend that most people use an incorporation service. And although incorporation legal services is part of my business law practice, I would encourage most readers to use an attorney of their choosing, in their state - it need not be me and obviously I don't benefit from you using another attorney any more than I benefit from you using an incorporation service. In fact, incorporation services are probably in the long run good for my practice; they provide a steady stream of repair work and dispute resolution for me, that typically cost $1000s more than my flat fee incorporation services.
Summary and Conclusion:
In short, comparing incorporation services to a business lawyer is an apples to oranges comparison. The lawyer is licensed by the state to provide legal advice, is subject to numerous ethical rules, forms an attorney-client relationship with his clients, and keeps up to date on changes in the law through mandatory continuing legal education. The incorporation service simply executes on your instructions, no advice, no hand-holding, no legal review of your situation or legal needs. If your instructions do not comport with what's best for your situation, then your result will be less than optimal. There may be a small group of people who know what they need, but just lack the time to do it, and who are thus well served by incorporation services. But, in my opinion, the vast majority of potential incorporation service customers would be better served by investing an additional $500 or so to have their entity selected, formed, and set up correctly, with all of their questions answered along the way, with due attention to related legal issues, and to establish a relationship with an attorney for ongoing or future legal services.
Author: Jonas M. Grant , http://www.articlesbase.com
8/24/07
Divorce and Debt.
As common sense and statistics tell us, the leading cause of marital discord is money. Therefore, it is not surprising that many times divorce inventories have more red numbers than black ones.
Media sources often portray Hollywood stars of “power couples” divorcing. Included with the typical hype may be which party will get the mansion, vacation home, or car collection, but rarely is there any coverage about how the parties will divide debt.
The hard truth is that debt, just like assets, are included in the community estate. No matter what your own moral compass may register regarding your and your spouse’s debt, Texas case law establishes rules that might surprise you. First, debt incurred during the marriage is presumed to be community debt. See Cockerham v. Cockerham, 527 S.W.2d 162, 171 (Tex. 1975). There must be a sufficient amount of evidence to rebut this presumption.
Despite well established case law, Texas divorce decrees contain sections entitled “Debt to Husband” and “Debt to Wife”, which seemingly assign responsibility for each debt. These sections of the decree will identify each creditor, the account number, and account balance. At the close of the divorce proceedings, the divorced couple has a lengthy document called a final decree of divorce. The husband, wife, their attorneys, and the judge sign the final decree. Often times the parties order a certified copy of their divorce decree, throw it in a drawer or the safe deposit box, and rarely look at it again unless there are children and custody issues involved.
It may be months or years later when the phone rings and one of the parties is greeted by the monotone utterances of a bill collector reading a script off the computer screen. The dialogue may go something like this:
Bob the Bill Collector: “This is Bob with XYZ Visa. I’m calling because your account is 60 days past due, and I need to know when you plan to remit the past due amount and begin making payments.”
You: “What are you talking about? That’s my ex’s account. Our divorce decree says so. I haven’t been married to him/her in over (whatever time frame)! Call that deadbeat for the money.”
Bob: “Well, Mr. or Ms. So and So, that doesn’t mean you don’t owe the debt if your ex defaults.”
You: “I have a certified court order signed by me, my ex, our attorneys, and the judge saying that I don’t owe you anything for that account. That account is the ex’s problem. When you find him/her, let me know because he/she owes me money, too!”
Bob: “Your divorce decree might say you aren’t responsible, but the law says you are. Why don’t you give me a check by phone and we can get you on a payment plan.”
You: “Are you dense?! Did you hear anything I just said?! I’m not responsible and I’m not paying you one red cent on any of that debt. Call the ex but stop hounding me!”
Bob: “Mr. or Ms. So and So, I did hear you, and you’re wrong. No matter what your divorce decree says, you owe XYZ Visa. If you don’t begin making payments, XYZ Visa will report this delinquent account to the credit reporting agencies, and take action up to and including litigation.”
I’ll let you fill in the closing dialogue for yourself. You are angry and hang up the phone. You may think that Bob, located at some call center hundreds of miles away, has no idea what he’s talking about.
As unsettling as it may be, Bob is right. Unless the XYZ Visa was a party to your divorce suit and agreed to the terms of the final decree, you owe the money. It is highly unusual for a husband and wife or their attorneys to implead creditors into divorce actions due to complex legal issues such as jurisdiction and venue on both the state and federal level.
To understand how you could possibly be responsible for debt assigned to your ex, you must rewind to the point in time when the credit account was opened. You will need to look at the original account agreement. Almost no one keeps those documents, so order a copy of your credit report from one of the big three credit reporting agencies (EquiFax, Experian, or TransUnion). If the account shows up on your report, then you were more than likely a party to the credit agreement. Despite how the divorce decree allocates the debts (both secured and unsecured), the Court has no authority to modify the contractual obligations between the spouses and the creditor.
To say it another way, the court cannot take away the creditor’s right to proceed against either spouse(s) for payment of a community debt that was incurred prior to the decree. See Blake v. Amoco Fed. Credit Union, 900 S.W.2d 108 (Tex. App. – Houston [14th Dist.] 1995, no writ).
Let’s presume the account was originally opened in both your names and the creditor was looking to both you and your spouse’s income and assets to repay the obligation. This means that you are both responsible for the debt. But what about the divorce decree that spells out which assets and liabilities you and your ex were assigned? Is it a worthless piece of paper? No.
You will not be able to file a motion to enforce the divorce decree to get the defaulting spouse to pay the debt. An enforcement action will only assist if there was specific property, such as a vehicle, brokerage account, or personal property, the other spouse failed to turn over. But what about the debt? All is not lost. You could file an action for breach of contract against the defaulting spouse. The divorce decree is a binding contract that both parties voluntarily signed before the court.
If your ex has defaulted on one or multiple obligations, a suit for breach of contract may be cold comfort. As the old saying goes, you can’t squeeze blood from a turnip. Nevertheless, if you pursue this option, your damages may include any money you agreed to pay the creditor to keep the account out of collections, interest, and other miscellaneous expenses, such as attorney’s fees if any are incurred.
Depending on the size of the debt that the defaulting party hasn’t paid, you could seek relief in small claims court. Texas small claims courts have jurisdiction from $0.01 up to $5,000.00. These courts are designed for individuals who want to represent themselves and avoid hiring an attorney. This is where people go to argue the “do right” law. However, if the amount in controversy is greater than $5,000.00, then you must file suit in a county court, county court at law, or a district court with jurisdiction over the matter. At this point, you may consider hiring an attorney to prosecute the claim if there’s a reasonable possibility you could collect from the defaulting spouse. If possible, never let things get to this point by utilizing some of the suggestions outlined below.
Before you go to court or sign the final decree of divorce, you should research each and every account that the decree references no matter if that account falls under the “Husband” or “Wife” section. You both need to be aware how the accounts were established, and who and what the creditor deems liable. It may be in your best interests to refinance jointly held debt and establish the debt in each individual’s name if that is possible. If you or your spouse’s credit score is not strong enough to take this route, then you may consider liquidating assets to repay the debt before the divorce is final and close the account. It will be cold comfort to pay off a debt only to find out that your ex ran up a bunch of charges. A method may be to sell a car, a house, real property, or take a 401-K loan prior to finalizing the divorce to pay off debt. Because a mortgage and car loan can have long terms of payments, it may behoove you to sell those assets and let the other party acquire them on his or her own credit. By paying off those assets, those will no longer appear as debts on your credit report or create potential future problems if the other party fails to make payments to the creditor.
After your divorce is final, you may consider taking these actions:
1. Closing all joint accounts with a low balance or zero balance.
2. Request a credit report from one of the big three credit reporting agencies 90 days after the divorce is final. Look for any errors or discrepancies and aggressively challenge them in writing.
3. Ask each creditor to send you a duplicate notice for the joint accounts – even if the ex was assigned this account. Monitor to ensure that payments are being made on a regular, timely basis.
4. Make an offer for accord and satisfaction – basically, offer the creditor an amount of money in exchange for a release of your liability on the account assigned to your ex.
5. Communicate with the big three credit reporting agencies to notify them of the divorce and any name changes.
6. Create a debt reduction plan. There are many excellent resources available, such as Consumer Credit Counseling Services, Dave Ramsey, or a church based debt reduction plan.
Bottom line – your credit score is an asset just like your home or car. In fact, if you don’t have a good credit score, your ability to obtain consumer or business financing may be extremely limited.
Shannon Cavers is a Houston, Texas based lawyer practicing in divorce, family law and probate. More information and articles can be found at: Houston Divorce Lawyer
Author: Shannon Cavers , http://www.articlesbase.com
Media sources often portray Hollywood stars of “power couples” divorcing. Included with the typical hype may be which party will get the mansion, vacation home, or car collection, but rarely is there any coverage about how the parties will divide debt.
The hard truth is that debt, just like assets, are included in the community estate. No matter what your own moral compass may register regarding your and your spouse’s debt, Texas case law establishes rules that might surprise you. First, debt incurred during the marriage is presumed to be community debt. See Cockerham v. Cockerham, 527 S.W.2d 162, 171 (Tex. 1975). There must be a sufficient amount of evidence to rebut this presumption.
Despite well established case law, Texas divorce decrees contain sections entitled “Debt to Husband” and “Debt to Wife”, which seemingly assign responsibility for each debt. These sections of the decree will identify each creditor, the account number, and account balance. At the close of the divorce proceedings, the divorced couple has a lengthy document called a final decree of divorce. The husband, wife, their attorneys, and the judge sign the final decree. Often times the parties order a certified copy of their divorce decree, throw it in a drawer or the safe deposit box, and rarely look at it again unless there are children and custody issues involved.
It may be months or years later when the phone rings and one of the parties is greeted by the monotone utterances of a bill collector reading a script off the computer screen. The dialogue may go something like this:
Bob the Bill Collector: “This is Bob with XYZ Visa. I’m calling because your account is 60 days past due, and I need to know when you plan to remit the past due amount and begin making payments.”
You: “What are you talking about? That’s my ex’s account. Our divorce decree says so. I haven’t been married to him/her in over (whatever time frame)! Call that deadbeat for the money.”
Bob: “Well, Mr. or Ms. So and So, that doesn’t mean you don’t owe the debt if your ex defaults.”
You: “I have a certified court order signed by me, my ex, our attorneys, and the judge saying that I don’t owe you anything for that account. That account is the ex’s problem. When you find him/her, let me know because he/she owes me money, too!”
Bob: “Your divorce decree might say you aren’t responsible, but the law says you are. Why don’t you give me a check by phone and we can get you on a payment plan.”
You: “Are you dense?! Did you hear anything I just said?! I’m not responsible and I’m not paying you one red cent on any of that debt. Call the ex but stop hounding me!”
Bob: “Mr. or Ms. So and So, I did hear you, and you’re wrong. No matter what your divorce decree says, you owe XYZ Visa. If you don’t begin making payments, XYZ Visa will report this delinquent account to the credit reporting agencies, and take action up to and including litigation.”
I’ll let you fill in the closing dialogue for yourself. You are angry and hang up the phone. You may think that Bob, located at some call center hundreds of miles away, has no idea what he’s talking about.
As unsettling as it may be, Bob is right. Unless the XYZ Visa was a party to your divorce suit and agreed to the terms of the final decree, you owe the money. It is highly unusual for a husband and wife or their attorneys to implead creditors into divorce actions due to complex legal issues such as jurisdiction and venue on both the state and federal level.
To understand how you could possibly be responsible for debt assigned to your ex, you must rewind to the point in time when the credit account was opened. You will need to look at the original account agreement. Almost no one keeps those documents, so order a copy of your credit report from one of the big three credit reporting agencies (EquiFax, Experian, or TransUnion). If the account shows up on your report, then you were more than likely a party to the credit agreement. Despite how the divorce decree allocates the debts (both secured and unsecured), the Court has no authority to modify the contractual obligations between the spouses and the creditor.
To say it another way, the court cannot take away the creditor’s right to proceed against either spouse(s) for payment of a community debt that was incurred prior to the decree. See Blake v. Amoco Fed. Credit Union, 900 S.W.2d 108 (Tex. App. – Houston [14th Dist.] 1995, no writ).
Let’s presume the account was originally opened in both your names and the creditor was looking to both you and your spouse’s income and assets to repay the obligation. This means that you are both responsible for the debt. But what about the divorce decree that spells out which assets and liabilities you and your ex were assigned? Is it a worthless piece of paper? No.
You will not be able to file a motion to enforce the divorce decree to get the defaulting spouse to pay the debt. An enforcement action will only assist if there was specific property, such as a vehicle, brokerage account, or personal property, the other spouse failed to turn over. But what about the debt? All is not lost. You could file an action for breach of contract against the defaulting spouse. The divorce decree is a binding contract that both parties voluntarily signed before the court.
If your ex has defaulted on one or multiple obligations, a suit for breach of contract may be cold comfort. As the old saying goes, you can’t squeeze blood from a turnip. Nevertheless, if you pursue this option, your damages may include any money you agreed to pay the creditor to keep the account out of collections, interest, and other miscellaneous expenses, such as attorney’s fees if any are incurred.
Depending on the size of the debt that the defaulting party hasn’t paid, you could seek relief in small claims court. Texas small claims courts have jurisdiction from $0.01 up to $5,000.00. These courts are designed for individuals who want to represent themselves and avoid hiring an attorney. This is where people go to argue the “do right” law. However, if the amount in controversy is greater than $5,000.00, then you must file suit in a county court, county court at law, or a district court with jurisdiction over the matter. At this point, you may consider hiring an attorney to prosecute the claim if there’s a reasonable possibility you could collect from the defaulting spouse. If possible, never let things get to this point by utilizing some of the suggestions outlined below.
Before you go to court or sign the final decree of divorce, you should research each and every account that the decree references no matter if that account falls under the “Husband” or “Wife” section. You both need to be aware how the accounts were established, and who and what the creditor deems liable. It may be in your best interests to refinance jointly held debt and establish the debt in each individual’s name if that is possible. If you or your spouse’s credit score is not strong enough to take this route, then you may consider liquidating assets to repay the debt before the divorce is final and close the account. It will be cold comfort to pay off a debt only to find out that your ex ran up a bunch of charges. A method may be to sell a car, a house, real property, or take a 401-K loan prior to finalizing the divorce to pay off debt. Because a mortgage and car loan can have long terms of payments, it may behoove you to sell those assets and let the other party acquire them on his or her own credit. By paying off those assets, those will no longer appear as debts on your credit report or create potential future problems if the other party fails to make payments to the creditor.
After your divorce is final, you may consider taking these actions:
1. Closing all joint accounts with a low balance or zero balance.
2. Request a credit report from one of the big three credit reporting agencies 90 days after the divorce is final. Look for any errors or discrepancies and aggressively challenge them in writing.
3. Ask each creditor to send you a duplicate notice for the joint accounts – even if the ex was assigned this account. Monitor to ensure that payments are being made on a regular, timely basis.
4. Make an offer for accord and satisfaction – basically, offer the creditor an amount of money in exchange for a release of your liability on the account assigned to your ex.
5. Communicate with the big three credit reporting agencies to notify them of the divorce and any name changes.
6. Create a debt reduction plan. There are many excellent resources available, such as Consumer Credit Counseling Services, Dave Ramsey, or a church based debt reduction plan.
Bottom line – your credit score is an asset just like your home or car. In fact, if you don’t have a good credit score, your ability to obtain consumer or business financing may be extremely limited.
Shannon Cavers is a Houston, Texas based lawyer practicing in divorce, family law and probate. More information and articles can be found at: Houston Divorce Lawyer
Author: Shannon Cavers , http://www.articlesbase.com
Discover The Benefits Of Incorporation.
If a business, which is mixed with personal assets, suffers losses, the owner is bound to lose everything. When personal assets are not involved with business the owner can always rely on these assets if the business suffers a set back. Forming a corporation is a step towards protecting the owner from liabilities. A List Of Benefits For Incorporation Once a company is incorporated, it receives the status of a separate legal entity. It is a lot like a person, which can sue, be sued, and enter into contracts. This helps to establish and increase the credibility of the company among its employees and customers. Below is a list of benefits for owning a corporation.
1.A corporation offers limited liability protection to its owners. Owners are not liable for any obligations or debts of the corporation. This applies as long as the owners have not signed a personal guarantee, do not have joint account with the business, and the business doesn't violate any state laws or default on its taxes.
2.Corporations can deduct business-operating losses without restrictions.
3.Corporations can split income with shareholders to lower the overall taxes. This method is referred to as income shifting.
4.Medical and life insurance, education, childcare, retirement plans, travel, entertainment, and other benefits are deductible and tax free to the employees. In most States, these advantages apply even if the corporation has only one employee.
5.Businesses owned by sole proprietors are subject to frequent IRS audits whereas this is rare with a corporation.
6.Corporations enable people to accumulate assets and wealth at corporate tax rates, which are considerably lower than individual tax rates.
7.A corporation continues to exist despite the death, withdrawal, or bankruptcy of one of its shareholders.
8. A corporation offers financial flexibility making it easier to run a business. It can easily raise capital by issuing stocks and bonds.
9. Shareholders in a C corporation can transfer or sell shares without restrictions.
10. A corporation can obtain credit without a personal guarantee. The development of business credit is another benefit of incorporating.
It is simple to dissolve a company if there are no out standing debts in its name. Several States like Nevada do not tax Corporations, which makes incorporating more appealing to people.
Because of the benefits provided to the companies opting for incorporation, even small businesses with just one employee are incorporating. The benefits offered through incorporation have lured many businesses to incorporate. Small business owners enjoy the ability to separate their personal assets from the business.
Several companies offer Do It Yourself (DIY) corporate kit software packages, which help small business owners to incorporate without much difficulty.
Author: David Gass ,http://www.articlesbase.com
1.A corporation offers limited liability protection to its owners. Owners are not liable for any obligations or debts of the corporation. This applies as long as the owners have not signed a personal guarantee, do not have joint account with the business, and the business doesn't violate any state laws or default on its taxes.
2.Corporations can deduct business-operating losses without restrictions.
3.Corporations can split income with shareholders to lower the overall taxes. This method is referred to as income shifting.
4.Medical and life insurance, education, childcare, retirement plans, travel, entertainment, and other benefits are deductible and tax free to the employees. In most States, these advantages apply even if the corporation has only one employee.
5.Businesses owned by sole proprietors are subject to frequent IRS audits whereas this is rare with a corporation.
6.Corporations enable people to accumulate assets and wealth at corporate tax rates, which are considerably lower than individual tax rates.
7.A corporation continues to exist despite the death, withdrawal, or bankruptcy of one of its shareholders.
8. A corporation offers financial flexibility making it easier to run a business. It can easily raise capital by issuing stocks and bonds.
9. Shareholders in a C corporation can transfer or sell shares without restrictions.
10. A corporation can obtain credit without a personal guarantee. The development of business credit is another benefit of incorporating.
It is simple to dissolve a company if there are no out standing debts in its name. Several States like Nevada do not tax Corporations, which makes incorporating more appealing to people.
Because of the benefits provided to the companies opting for incorporation, even small businesses with just one employee are incorporating. The benefits offered through incorporation have lured many businesses to incorporate. Small business owners enjoy the ability to separate their personal assets from the business.
Several companies offer Do It Yourself (DIY) corporate kit software packages, which help small business owners to incorporate without much difficulty.
Author: David Gass ,http://www.articlesbase.com
Panama Investment Corporation.
Investment corporations, also known as investment funds, are institutions of collective investment. They gather capital from the public to reinvest it collectively and diversely, therefore the investment risks are lower and the returns to the investors are in theory going to be enhanced. It is a Panama vehicle to raise third party investment funds.
Definition - An investment corporation in Panama is any judicial person (corporation or foundation), trust or contractual agreement that, through the issuance and sale of its own participation quotas, is dedicated to the business of obtaining monies from the investment public, through one time payments or periodical payments, with the object of investing and negotiating, either directly or through investment managers or administrators, investments in securities, bonds, options, futures, metals, real estate or any other recognized investment medium. The Panama investment corporations are entities that gather funds from the public to reinvest them collectively. The intent is that they can offer lower risks and costs of administration (reduced trading commissions for instance) and a professional capability of investment analysis, administration, follow up and financial control of the investment.
Investment Corporations Conducting a Public Offering in Panama
It is legally understood that a public offering of participation quotas of an investment corporation is taking place when it or its investment administrator, or another entity on behalf of it, offers securities through marketing and promotion activities in the territory of the Republic of Panama. These marketing and promotional activities are any form of communication targeting potential investors with the object of promoting the subscription or obtaining participation quotas (investments) in an investment corporation vehicle, and will be considered to be in the territory of the Republic of Panama as long as it is addressed to people domiciled in Panama. This is probably not of interest to many of you since you are reading this in English not Spanish. It is useful to read through this article to see how the law operates and how one can be excluded from registration which will probably be of great interest to you.
An investment corporation is considered to be administered in or from Panama when one of the following applies:
1. That the investment corporation designates an investment administrator in the Republic of Panama.
2. That the principal domicile of the investment corporation is located in the Republic of Panama, or the prospect or any other advertisement material indicates that it is located in Panama.
3. That the investment corporation designates a custodian in the Republic of Panama
4. That the directors necessary to adopt a resolution of the Board of Directors of the investment corporation have their domicile in Panama.
Investment Corporations Requiring Licensure with the Panama Securities Commission
1. Simple Investment Corporations: Only have one type of participation quotas and one investment portfolio.
2. Umbrella Investment Corporations: Have multiple series of participation quotas with different investment portfolios.
3. Multiple Class Investment Corporations: Have multiple series of participation quotas, each one of those series with different terms regarding the payment of commissions and subscription fees, redemptions and administrative fees.
4. Principal Fund Feed by other Funds: This is best described as an investment corporation that invests in other investment corporations.
Requirements for the Registration of an Investment Corporation in Panama
1. Name and incorporation information.
2. Legal and commercial domicile of the corporation.
3. Designation of an investment administrator who will have to have a License issued by the National Securities Commission. When the investment corporation will be administered for itself, the documentation regarding the person who will be the principal executive and the compliance officer must be submitted.
4. Designation of a custodian for the investment corporation.
5. Identification of the type of fund.
6. Authorized share capital and minimum capital to initiate the operation.
7. Amount of participation quotas required to be registered for public offering and value of the initial offer.
Documents to be Submitted with the Application
1. Authenticated copy of the articles of incorporation, which must establish that the corporation will exclusively operate as an investment corporation and the accounting books will be kept in Panama. Must be in Spanish but a certified English translation can be obtained.
2. Copy of passport or Panama Cedulla of Directors.
3. Audited financial statements or audited initial balance.
4. Curriculum Vitae of Directors and Dignitaries and Legal Representative.
5. Informative prospect of the investment corporation.
6. Signed contract with the investment administrator and signed contract with the custodian.
7. Draft Code of Conduct for those investment corporations that will assume their own administration and representation.
8. Advertisement and other publicity material that will be used by the investment corporation (everything that will be used even once).
9. Draft of the investment contract to be subscribed to every potential investor.
10. Draft Minutes of the Board of Directors establishing all terms and conditions related to the operation of the investment corporation.
Private Investment Corporations ? Registration Exempt
This type of investment corporations are not required to be registered in the Securities Commission and therefore are not subject to the rules that applies to registered investment corporations found above.
The Commission can sanction any representation or declaration that the investment corporation does, stating that it is registered in the Commission.
It is considered to be a private investment corporations when it is administered in the Republic of Panama or from the Republic of Panama, and has participation quotas that are not offered in the Republic of Panama and that its Articles of Incorporation includes one of the following two dispositions:
1. One disposition that limits the amount of effective owners of its participation quotas to 50, or that stipulated firmly that the offers for the investment will be done through private communications only and not through public communication such as web sites, newsletters, print or media ads etc.
2. A disposition that establishes that its participation quotas will only be offered to qualified investors in minimal initial investment amounts of $100,000.
The private investment corporations must designate a representative in Panama, who can be an licensed investment administrator, a securities house, a licensed investment advisor, a licensed Bank, an Accountant or a Lawyer, who must be able to dully represent the investment corporation before the Securities Commission at any time.
They must provide copy of the Articles of Incorporation, the Offering Prospectus, Audited Financial Statements, name and address of Directors. Yearly audited statements must be submitted.
Self-Administered Investment
When the investment corporation decides not to use an outside investment administrator, it must comply with the following:
1. The investment corporation must have at least 3 members of the Board of Directors, all of whom must have renowned business and professional honorability. They must be able to demonstrate that they are reputable well-regarded business professionals. This is generally established with reference letters, education and professional licensures.
2. At least one third of the members of the Board of Directors must have adequate knowledge and experience in fields related to securities market and financial market in general. This would be established through professional licenses, work experience, references and education.
3. Have a complete administrative and accounting organization, in addition to technical (Information Technology, Legal) and human resources for the administration of the investment corporation. They must be able to clearly demonstrate that all the pieces are in place to be able to competently and profitably administer the investment.
4. An internal code of conduct.
5. Designate a compliance officer that can ascertain all investment and due diligence requirements are being complied with.
This document was basically translated from Spanish Legalese and putting it into English Legalese which if you have ever tried it you would know it is not easy so do feel free to ask questions.
By Robert Bell , http://www.free-articles-zone.com
Definition - An investment corporation in Panama is any judicial person (corporation or foundation), trust or contractual agreement that, through the issuance and sale of its own participation quotas, is dedicated to the business of obtaining monies from the investment public, through one time payments or periodical payments, with the object of investing and negotiating, either directly or through investment managers or administrators, investments in securities, bonds, options, futures, metals, real estate or any other recognized investment medium. The Panama investment corporations are entities that gather funds from the public to reinvest them collectively. The intent is that they can offer lower risks and costs of administration (reduced trading commissions for instance) and a professional capability of investment analysis, administration, follow up and financial control of the investment.
Investment Corporations Conducting a Public Offering in Panama
It is legally understood that a public offering of participation quotas of an investment corporation is taking place when it or its investment administrator, or another entity on behalf of it, offers securities through marketing and promotion activities in the territory of the Republic of Panama. These marketing and promotional activities are any form of communication targeting potential investors with the object of promoting the subscription or obtaining participation quotas (investments) in an investment corporation vehicle, and will be considered to be in the territory of the Republic of Panama as long as it is addressed to people domiciled in Panama. This is probably not of interest to many of you since you are reading this in English not Spanish. It is useful to read through this article to see how the law operates and how one can be excluded from registration which will probably be of great interest to you.
An investment corporation is considered to be administered in or from Panama when one of the following applies:
1. That the investment corporation designates an investment administrator in the Republic of Panama.
2. That the principal domicile of the investment corporation is located in the Republic of Panama, or the prospect or any other advertisement material indicates that it is located in Panama.
3. That the investment corporation designates a custodian in the Republic of Panama
4. That the directors necessary to adopt a resolution of the Board of Directors of the investment corporation have their domicile in Panama.
Investment Corporations Requiring Licensure with the Panama Securities Commission
1. Simple Investment Corporations: Only have one type of participation quotas and one investment portfolio.
2. Umbrella Investment Corporations: Have multiple series of participation quotas with different investment portfolios.
3. Multiple Class Investment Corporations: Have multiple series of participation quotas, each one of those series with different terms regarding the payment of commissions and subscription fees, redemptions and administrative fees.
4. Principal Fund Feed by other Funds: This is best described as an investment corporation that invests in other investment corporations.
Requirements for the Registration of an Investment Corporation in Panama
1. Name and incorporation information.
2. Legal and commercial domicile of the corporation.
3. Designation of an investment administrator who will have to have a License issued by the National Securities Commission. When the investment corporation will be administered for itself, the documentation regarding the person who will be the principal executive and the compliance officer must be submitted.
4. Designation of a custodian for the investment corporation.
5. Identification of the type of fund.
6. Authorized share capital and minimum capital to initiate the operation.
7. Amount of participation quotas required to be registered for public offering and value of the initial offer.
Documents to be Submitted with the Application
1. Authenticated copy of the articles of incorporation, which must establish that the corporation will exclusively operate as an investment corporation and the accounting books will be kept in Panama. Must be in Spanish but a certified English translation can be obtained.
2. Copy of passport or Panama Cedulla of Directors.
3. Audited financial statements or audited initial balance.
4. Curriculum Vitae of Directors and Dignitaries and Legal Representative.
5. Informative prospect of the investment corporation.
6. Signed contract with the investment administrator and signed contract with the custodian.
7. Draft Code of Conduct for those investment corporations that will assume their own administration and representation.
8. Advertisement and other publicity material that will be used by the investment corporation (everything that will be used even once).
9. Draft of the investment contract to be subscribed to every potential investor.
10. Draft Minutes of the Board of Directors establishing all terms and conditions related to the operation of the investment corporation.
Private Investment Corporations ? Registration Exempt
This type of investment corporations are not required to be registered in the Securities Commission and therefore are not subject to the rules that applies to registered investment corporations found above.
The Commission can sanction any representation or declaration that the investment corporation does, stating that it is registered in the Commission.
It is considered to be a private investment corporations when it is administered in the Republic of Panama or from the Republic of Panama, and has participation quotas that are not offered in the Republic of Panama and that its Articles of Incorporation includes one of the following two dispositions:
1. One disposition that limits the amount of effective owners of its participation quotas to 50, or that stipulated firmly that the offers for the investment will be done through private communications only and not through public communication such as web sites, newsletters, print or media ads etc.
2. A disposition that establishes that its participation quotas will only be offered to qualified investors in minimal initial investment amounts of $100,000.
The private investment corporations must designate a representative in Panama, who can be an licensed investment administrator, a securities house, a licensed investment advisor, a licensed Bank, an Accountant or a Lawyer, who must be able to dully represent the investment corporation before the Securities Commission at any time.
They must provide copy of the Articles of Incorporation, the Offering Prospectus, Audited Financial Statements, name and address of Directors. Yearly audited statements must be submitted.
Self-Administered Investment
When the investment corporation decides not to use an outside investment administrator, it must comply with the following:
1. The investment corporation must have at least 3 members of the Board of Directors, all of whom must have renowned business and professional honorability. They must be able to demonstrate that they are reputable well-regarded business professionals. This is generally established with reference letters, education and professional licensures.
2. At least one third of the members of the Board of Directors must have adequate knowledge and experience in fields related to securities market and financial market in general. This would be established through professional licenses, work experience, references and education.
3. Have a complete administrative and accounting organization, in addition to technical (Information Technology, Legal) and human resources for the administration of the investment corporation. They must be able to clearly demonstrate that all the pieces are in place to be able to competently and profitably administer the investment.
4. An internal code of conduct.
5. Designate a compliance officer that can ascertain all investment and due diligence requirements are being complied with.
This document was basically translated from Spanish Legalese and putting it into English Legalese which if you have ever tried it you would know it is not easy so do feel free to ask questions.
By Robert Bell , http://www.free-articles-zone.com
How to Make The Business Incorporation Process Simple.
Business incorporation is essential to establish a separate entity for your business, distinct from the owners and shareholders. Incorporation permits your business to enter into contracts, buy, and sell property, and even sue or be in a lawsuit. Your business does not suffer due to the death of any partner, shareholder, or officer.
Process of Incorporation:
Until recently, incorporation was a very long and drawn-out process sometimes taking many years to complete. The scenario is very much different now. Creation of the Business Corporation Act has made the process simpler and quicker too.
There are three main steps in business incorporation. These are:
1) Procuring a proper corporate name
2) Submitting all necessary documents
3) Paying all filing dues
Successful completion of these three steps can incorporate your business. You can hire the services of a lawyer or incorporation service companies to complete necessary work for business incorporation. Although you can try doing it yourself too, it would be too tedious. Hiring of lawyers is a costly process as they charge by the hour. Incorporation could take few hours or days to complete. Incorporation service companies are the best bet, as they charge modestly and complete the process professionally.
Simple and Easy Incorporation Process:
Supply all the necessary information to incorporation service agencies for speedy, systematic, and correct completion of the total process.
The very first step is to secure a unique corporate name. The name should not be the same as that of any other business. It should also not be similar sounding names. Incorporation companies will select a distinct corporate name.
Incorporation requires filing of many different types of documents. Collecting all these documents from different sources could take a longtime. Incorporation service agencies collect these easily, as they know the legal requirements of incorporation and necessary documents too.
Quick filing of the documents with the necessary amount of fees can ensure fast completion. The filing fees differ from state to state. Incorporation agencies are very adept with the fees of each state. Since these companies do the same process day-in-and-day-out, they are aware of the important people with the incorporation offices. This can help expedite the proceedings of your case.
Most of the incorporation service agencies function online. You only have to submit your details online and you can complete the business incorporation process within the same day or within hours too. These companies charge you nominally for all the rendered services.
Types of Incorporation:
You can decide on the type of incorporation according to the volume of your business. There are two different types of incorporation, provincially or federally. Provincial incorporation allows you to conduct business only in the particular province.
Federal incorporation helps you conduct your business in all provinces by registering. You can function with the same name in all the provinces even if there is some other company functioning with a similar name. However, you have to maintain detailed annual paperwork of your business. You have to file the details with different provinces too.
Author: Craig Thornburrow , http://www.incorporationchoice.com , http://www.articlesbase.com
Process of Incorporation:
Until recently, incorporation was a very long and drawn-out process sometimes taking many years to complete. The scenario is very much different now. Creation of the Business Corporation Act has made the process simpler and quicker too.
There are three main steps in business incorporation. These are:
1) Procuring a proper corporate name
2) Submitting all necessary documents
3) Paying all filing dues
Successful completion of these three steps can incorporate your business. You can hire the services of a lawyer or incorporation service companies to complete necessary work for business incorporation. Although you can try doing it yourself too, it would be too tedious. Hiring of lawyers is a costly process as they charge by the hour. Incorporation could take few hours or days to complete. Incorporation service companies are the best bet, as they charge modestly and complete the process professionally.
Simple and Easy Incorporation Process:
Supply all the necessary information to incorporation service agencies for speedy, systematic, and correct completion of the total process.
The very first step is to secure a unique corporate name. The name should not be the same as that of any other business. It should also not be similar sounding names. Incorporation companies will select a distinct corporate name.
Incorporation requires filing of many different types of documents. Collecting all these documents from different sources could take a longtime. Incorporation service agencies collect these easily, as they know the legal requirements of incorporation and necessary documents too.
Quick filing of the documents with the necessary amount of fees can ensure fast completion. The filing fees differ from state to state. Incorporation agencies are very adept with the fees of each state. Since these companies do the same process day-in-and-day-out, they are aware of the important people with the incorporation offices. This can help expedite the proceedings of your case.
Most of the incorporation service agencies function online. You only have to submit your details online and you can complete the business incorporation process within the same day or within hours too. These companies charge you nominally for all the rendered services.
Types of Incorporation:
You can decide on the type of incorporation according to the volume of your business. There are two different types of incorporation, provincially or federally. Provincial incorporation allows you to conduct business only in the particular province.
Federal incorporation helps you conduct your business in all provinces by registering. You can function with the same name in all the provinces even if there is some other company functioning with a similar name. However, you have to maintain detailed annual paperwork of your business. You have to file the details with different provinces too.
Author: Craig Thornburrow , http://www.incorporationchoice.com , http://www.articlesbase.com
8/12/07
Articles of Incorporation
as approved February 15, 1983
TO: The Recorder of Deeds, D.C. Washington, D.C. We, the undersigned natural persons of the age of twenty-one years or more, acting as incorporators of a corporation, adopt the following Articles of Incorporation for such corporation pursuant to the District of Columbia Nonprofit Corporation Act:
FIRST: The name of the corporation is Art Libraries Society of North America.
SECOND: The period of duration is perpetual.
THIRD: The Corporation is organized and will be operated exclusively for charitable and educational purposes within the meaning of section 501(c) (3) of the Internal Revenue Code of 1954, as amended, in order to advance the cause of art librarianship and to promote the development, good management, and enlightened use of all art libraries and visual resources collections. In furtherance of such purposes, the corporation is authorized:
FOURTH: The corporation is to have members.
FIFTH: The corporation may have one or more classes of members. The designation of such class or classes, the manner of election or appointment, and the qualification and rights, including the right to vote, of the members of each class shall be set forth in the Bylaws.
SIXTH: Directors shall be elected or appointed as provided for in the Bylaws.
SEVENTH:
EIGHTH: The address, including street and number, of its initial registered office is 1747 Pennsylvania Avenue, N.W., Washington, D.C. 20006, and the name of its initial registered agent as such address is John W. Hazard, Jr., a resident of the District of Columbia.
NINTH: The number of directors constituting the initial board of directors is nine, and the names and addresses, including street and number, of the persons who are to serve as the initial directors until the first annual meeting or until their successors be elected and qualified are: (the present elected members of the Executive Board)
TENTH: The name and addresss, including street and number, of each incorporator is John W. Hazard, Jr., 1747 Pennsylvania Avenue, N.W., Washington, D.C. 20006; Gerard P. Panaro, 1747 Pennsylvania Avenue, N.W., Washington, D.C. 20006; Frank M. Northam, 1747 Pennsylvania Avenue, N.W., Washington, D.C. 20006.
TO: The Recorder of Deeds, D.C. Washington, D.C. We, the undersigned natural persons of the age of twenty-one years or more, acting as incorporators of a corporation, adopt the following Articles of Incorporation for such corporation pursuant to the District of Columbia Nonprofit Corporation Act:
FIRST: The name of the corporation is Art Libraries Society of North America.
SECOND: The period of duration is perpetual.
THIRD: The Corporation is organized and will be operated exclusively for charitable and educational purposes within the meaning of section 501(c) (3) of the Internal Revenue Code of 1954, as amended, in order to advance the cause of art librarianship and to promote the development, good management, and enlightened use of all art libraries and visual resources collections. In furtherance of such purposes, the corporation is authorized:
(a) To promote the continuing professional education of its members and the general knowledge of the public by sponsoring conferences, seminars, lectures, workshops, and other exchanges of information and materials concerning all aspects of art librarianship and visual resources curatorship;
(b) To stimulate greater use of art libraries and visual resources collections by sponsoring, supporting or publishing resources directories, bibliographies, inventories, periodical journals, occasional papers, reports and related materials concerning the organization and retrieval of art information;
(c) To foster excellence in art librarianship and the visual arts by establishing standards for art libraries and visual resources collections, by promoting improvements in the academic education of art librarians and visual resources curators, by sponsoring awards for outstanding achievement, and by other means to that end;
(d) To engage specifically in activities designed to influence legislation directly or indirectly relating to the furtherance of the corporation's purposes, provided, however, that the scope of such activities shall not be so substantial as to invalidate the corporation's continued qualification as an exempt organization under section 501(c) (3) of the Internal Revenue Code of 1954, as amended (or the corresponding provision of any future United States internal-revenue law); and
(e) To engage in any activities conducive to furthering the corporation's purposes, provided that such activities may lawfully be carried on by an organization exempt from federal income tax under section 501(c) (3) of the Internal Revenue Code of 1954, as amended (or the corresponding provision of any future United States internal-revenue law).
FOURTH: The corporation is to have members.
FIFTH: The corporation may have one or more classes of members. The designation of such class or classes, the manner of election or appointment, and the qualification and rights, including the right to vote, of the members of each class shall be set forth in the Bylaws.
SIXTH: Directors shall be elected or appointed as provided for in the Bylaws.
SEVENTH:
(a) The internal affairs of the corporation shall be regulated as provided for in the Bylaws.
(b) No part of the property, assets or net income of the corporation shall inure to the benefit of or be distributable to its members, directors, officers, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article THIRD hereof.
(c) Except to the extent permitted by the terms of Paragraph (d) of Article THIRD hereof, no substantial part of the activities of the corporation shall be devoted to propaganda or other attempts to influence legislation, and the corporation shall not participate or intervene (including the publishing or distribution of statements) in any political campaign on behalf of or in opposition to any candidate for public office.
(d) Notwithstanding any other provision of these Articles of Incorporation, the corporation shall not carry on any other activities not permitted to be carried on by an organization exempt from federal income tax under section 501(c) (3) of the Internal Revenue Code of 1954, as amended (or the corresponding provision of any future United States internal-revenue law) or by a corporation contributions to which are deductible under section 170(c) (2) of the Internal Revenue Code of 1954, as amended (or the corresponding provision of any future United States internal-revenue law).
(e) Upon the dissolution or final liquidation of the corporation, the Board of Directors shall, after paying or making provision for the payment of all the liabilities of the corporation, dispose of all of the assets of the corporation in such manner as the Board of Directors shall determine to be consistent with the purposes of the corporation by distributing the same exclusively to one or more charitable, scientific, literary or educational organizations that shall at the time qualify as exempt from federal income tax under section 501(c) (3) of the Internal Revenue Code of 1954 (or the corresponding provisions of any future United States internal-revenue law).
EIGHTH: The address, including street and number, of its initial registered office is 1747 Pennsylvania Avenue, N.W., Washington, D.C. 20006, and the name of its initial registered agent as such address is John W. Hazard, Jr., a resident of the District of Columbia.
NINTH: The number of directors constituting the initial board of directors is nine, and the names and addresses, including street and number, of the persons who are to serve as the initial directors until the first annual meeting or until their successors be elected and qualified are: (the present elected members of the Executive Board)
TENTH: The name and addresss, including street and number, of each incorporator is John W. Hazard, Jr., 1747 Pennsylvania Avenue, N.W., Washington, D.C. 20006; Gerard P. Panaro, 1747 Pennsylvania Avenue, N.W., Washington, D.C. 20006; Frank M. Northam, 1747 Pennsylvania Avenue, N.W., Washington, D.C. 20006.
8/11/07
Articles of Incorporation of
American Indian Law Students Association
(National Native American Law Students Association)
We, the undersigned, all of whom are natural persons of full age, desiring to form a Nonprofit Corporation under Article 14, Chapter 51, New Mexico Statutes Annotated, 1953 Compilation, adopt the following Articles for such corporation:
1. Name. The name of the corporation is American Indian Law Students Association, Incorporated.
2. Purpose. The corporation is organized exclusively for charitable and educational purposes as described under Section 501(c)(3) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Law) including, but not limited to:
(a) Providing an organization for American Indian law students which will promote unity and cooperation among the Indian law students, and will provide a basis from which work can be done for the advancement of Indian people.
(b) Providing better communication among American Indian law students, and between American Indian law students and the Indian people, Indian lawyers, and the general public.
(c) Providing assistance to American Indian law students including, but not limited to:
1. Financial Assistance during the academic year and summer by direct grants and employment opportunities.
2. Educational opportunities such as curriculum develo9pment, tutorial programs, and research projects.
(d) Providing a forum for the exploration of legal problems relating to laws affecting American Indians.
3. Profit making activities precluded. No pecuniary gain, incidental or otherwise, shall be afforded any member of the corporation and no part of the net earnings of the corporation shall inure to the benefit of or be distributable to its members, directors, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article two (2) thereof.
4. Duration. The duration of corporation existence shall be on hundred (100) years.
5. Other activities precluded. No substantial part of the activities of the corporation shall be the carrying on of propaganda, nor otherwise attempting to influence legislation, and the corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of any candidate for public office. Notwithstanding any other provision of these articles, the corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from Federal income tax under section 501(c)(3) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Law), or (b) by a corporation, contributions to which are deductible under section 170(c)(2) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Law).
6. Distribution upon dissolution. Upon dissolution of the corporation, the Board of Directors, after paying or making provision for the payment of all the liabilities of the corporation to an organization or organizations organized and operated exclusively for charitable, educational, religious, or scientific purposes as shall at the time qualify as an exempt organization or organizations under section 501(c)(3) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Code Law).
7. Principal office. The address of the initial registered office of the corporation is 1915 Roma N.E. in the City of Albuquerque, County of Bernalillo, State of New Mexico, and the name of its initial registered agent at such address is Douglas R. Nash.
8. Names of Incorporators. The name and address of each incorporator is:
Yvonne Knight 1337 Columbia Drive N.E.
Albuquerque, New Mexico
Vincent Knight 9616 Aspen N.E.
Albuquerque, New Mexico
Douglas Nash 4300 Prospect N.E.
Albuquerque, New Mexico
9. Names of Directors. The number of directors constituting the initial Board of Directors is seven (7), and the names and addresses of the persons who are to serve as directors until the first annual meeting of the corporation are:
Martin Seneca 393 Broadway
Cambridge, Mass. 02139
Alan Parker 1839 Federal Avenue
West Los Angeles, Calif. 90024
Ben Hanley 500 E. Riviera
Tempe, Arizona 85281
Yvonne Knight 1337 Columbia Drive N.E.
Albuquerque, N.M.
Gerald Brown 2023 Federal Ave., Apt. 2
West Los Angeles, Calif. 90025
Thomas Fredericks 735 South 41 St.
Boulder, Colo. 80303
Enoch LaPointe 1138 Queen St.
South Bend, Indiana 46616
IN WITNESS WHEREOF, we have hereunto set our hands and seal at Albuquerque, New Mexico, on this, the 27th day of May, 1970.
Signed by: Yvonne Knight
Vincent Knight
Douglas Nash
STATE OF NEW MEXICO
COUNTY OF BERNALILLO
On this 27th day of May, 1970, before me personally appeared Yvonne Knight, Vincent Knight and Douglas Nash, to me known to be the persons described in and who executed the foregoing instrument and acknowledged that they executed the same as their free act and deed.
WITNESS my hand and notarial seal the day and year above written.
Signed by: Louise R. Camp, Notary Public
My commission expires 6/30/71
(National Native American Law Students Association)
We, the undersigned, all of whom are natural persons of full age, desiring to form a Nonprofit Corporation under Article 14, Chapter 51, New Mexico Statutes Annotated, 1953 Compilation, adopt the following Articles for such corporation:
1. Name. The name of the corporation is American Indian Law Students Association, Incorporated.
2. Purpose. The corporation is organized exclusively for charitable and educational purposes as described under Section 501(c)(3) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Law) including, but not limited to:
(a) Providing an organization for American Indian law students which will promote unity and cooperation among the Indian law students, and will provide a basis from which work can be done for the advancement of Indian people.
(b) Providing better communication among American Indian law students, and between American Indian law students and the Indian people, Indian lawyers, and the general public.
(c) Providing assistance to American Indian law students including, but not limited to:
1. Financial Assistance during the academic year and summer by direct grants and employment opportunities.
2. Educational opportunities such as curriculum develo9pment, tutorial programs, and research projects.
(d) Providing a forum for the exploration of legal problems relating to laws affecting American Indians.
3. Profit making activities precluded. No pecuniary gain, incidental or otherwise, shall be afforded any member of the corporation and no part of the net earnings of the corporation shall inure to the benefit of or be distributable to its members, directors, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article two (2) thereof.
4. Duration. The duration of corporation existence shall be on hundred (100) years.
5. Other activities precluded. No substantial part of the activities of the corporation shall be the carrying on of propaganda, nor otherwise attempting to influence legislation, and the corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of any candidate for public office. Notwithstanding any other provision of these articles, the corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from Federal income tax under section 501(c)(3) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Law), or (b) by a corporation, contributions to which are deductible under section 170(c)(2) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Law).
6. Distribution upon dissolution. Upon dissolution of the corporation, the Board of Directors, after paying or making provision for the payment of all the liabilities of the corporation to an organization or organizations organized and operated exclusively for charitable, educational, religious, or scientific purposes as shall at the time qualify as an exempt organization or organizations under section 501(c)(3) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Code Law).
7. Principal office. The address of the initial registered office of the corporation is 1915 Roma N.E. in the City of Albuquerque, County of Bernalillo, State of New Mexico, and the name of its initial registered agent at such address is Douglas R. Nash.
8. Names of Incorporators. The name and address of each incorporator is:
Yvonne Knight 1337 Columbia Drive N.E.
Albuquerque, New Mexico
Vincent Knight 9616 Aspen N.E.
Albuquerque, New Mexico
Douglas Nash 4300 Prospect N.E.
Albuquerque, New Mexico
9. Names of Directors. The number of directors constituting the initial Board of Directors is seven (7), and the names and addresses of the persons who are to serve as directors until the first annual meeting of the corporation are:
Martin Seneca 393 Broadway
Cambridge, Mass. 02139
Alan Parker 1839 Federal Avenue
West Los Angeles, Calif. 90024
Ben Hanley 500 E. Riviera
Tempe, Arizona 85281
Yvonne Knight 1337 Columbia Drive N.E.
Albuquerque, N.M.
Gerald Brown 2023 Federal Ave., Apt. 2
West Los Angeles, Calif. 90025
Thomas Fredericks 735 South 41 St.
Boulder, Colo. 80303
Enoch LaPointe 1138 Queen St.
South Bend, Indiana 46616
IN WITNESS WHEREOF, we have hereunto set our hands and seal at Albuquerque, New Mexico, on this, the 27th day of May, 1970.
Signed by: Yvonne Knight
Vincent Knight
Douglas Nash
STATE OF NEW MEXICO
COUNTY OF BERNALILLO
On this 27th day of May, 1970, before me personally appeared Yvonne Knight, Vincent Knight and Douglas Nash, to me known to be the persons described in and who executed the foregoing instrument and acknowledged that they executed the same as their free act and deed.
WITNESS my hand and notarial seal the day and year above written.
Signed by: Louise R. Camp, Notary Public
My commission expires 6/30/71
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
ABERCROMBIE & FITCH CO.
* * *
Abercrombie & Fitch Co. (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware does hereby amend the Certificate of Incorporation of the Corporation,
which was originally filed on June 26, 1996, under the name Abercrombie & Fitch,
Inc.
FIRST. The name of the Corporation is:
-----
ABERCROMBIE & FITCH CO.
SECOND. The address of the registered office of the Corporation in the
------
State of Delaware is Corporation Service Company, 1013 Centre Road, City of
Wilmington, County of New Castle, Delaware 19805. The name of its registered
agent at such address is Corporation Service Company.
THIRD. The purpose of the Corporation is to engage in any lawful act or
-----
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware as the same exists or may hereafter be amended
("Delaware Law").
FOURTH.
------
Section 1. Capital Stock. (a) The total number of shares of stock which
-------------
the Corporation shall have authority to issue is 315,000,000, consisting of
300,000,000 shares of Common Stock, par value $.01 per share (the "Common
Stock"), and 15,000,000 shares of Preferred Stock, par value $.01 per share (the
"Preferred Stock"). The Common Stock of the Corporation shall be all of one
class, and shall be divided into two classes, consisting of Class A Common Stock
and Class B Common Stock. The Preferred Stock may be issued in one or more
series having such designations as may be fixed by the Board of Directors.
(b) The Board of Directors is expressly authorized to provide for the
issue of all or any shares of the Common Stock and the Preferred Stock, to
determine the number of shares of each class and to fix for each class of Common
Stock and for any series of Preferred Stock such voting powers, full or limited,
or no voting powers, and such designations, preferences and relative,
participating, optional or other special rights, and such qualifications,
limitations or restrictions thereof, as shall be stated and expressed in the
resolution or resolutions adopted by the Board of Directors or a duly authorized
committee thereof providing for the issue of such series and as may be permitted
by Delaware Law.
(c) The number of authorized shares of any class or classes of stock may
be increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of a majority of the Common Stock of the
Corporation irrespective of the provisions of Section 242(b)(2) of Delaware Law.
Section 2. Common Stock. (a) Issuance and Consideration. Any unissued
------------ --------------------------
or treasury shares of the Common Stock may be issued for such consideration as
may be fixed in accordance with applicable law from time to time by the Board of
Directors.
(b) Dividends. Subject to the rights of holders of the Preferred Stock,
---------
the holders of the Common Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of the assets of the Corporation which
are by law available therefor, dividends payable either in cash, in property, or
in shares of stock and the holders of the Preferred Stock shall not be entitled
to participate in any such dividends (unless otherwise provided by the Board of
Directors in any resolution providing for the issue of a series of Preferred
Stock).
(c) Number of Shares. Of the 300,000,000 shares of Common Stock of the
----------------
Corporation, 150,000,000 shares are initially designated as shares of Class A
Common Stock and 150,000,000 shares are initially designated as shares of Class
B Common Stock. The number of shares designated as Class A Common Stock or
Class B Common Stock may be increased or decreased from time to time by a
resolution or resolutions adopted by the Board of Directors or any duly
authorized committee thereof and in accordance with paragraph (d)(5)(E)
2
below without the consent of the holders of any outstanding shares of Common
Stock or Preferred Stock.
(d) Powers, Preferences, Etc. The following is a statement of the powers,
------------------------
preferences, and relative participating, optional or other special rights and
qualifications, limitations and restrictions of the Class A Common Stock and
Class B Common Stock of the Corporation:
(1) Except as otherwise set forth below in this ARTICLE FOURTH, the
powers, preferences and relative participating, optional or other special rights
and qualifications, limitations or restrictions of the Class A Common Stock and
Class B Common Stock shall be identical in all respects.
(2) Subject to the rights of the holders of Preferred Stock, and subject
to any other provisions of this Amended and Restated Certificate of
Incorporation, holders of Class A Common Stock and Class B Common Stock shall be
entitled to receive such dividends and other distributions in cash, stock of any
corporation (other than Common Stock of the Corporation) or property of the
Corporation as may be declared thereon by the Board of Directors from time to
time out of assets or funds of the Corporation legally available therefor and
shall share equally on a per share basis in all such dividends and other
distributions. In the case of dividends or other distributions payable in
Common Stock, including distributions pursuant to stock splits or divisions of
Common Stock of the Corporation, only shares of Class A Common Stock shall be
paid or distributed with respect to Class A Common Stock and only shares of
Class B Common Stock shall be paid or distributed with respect to Class B Common
Stock. The number of shares of Class A Common Stock and Class B Common Stock so
distributed shall be equal in number on a per share basis. Neither the shares
of Class A Common Stock nor the shares of Class B Common Stock may be
reclassified, subdivided or combined unless such reclassification, subdivision
or combination occurs simultaneously and in the same proportion for each class.
(3)(A) At every meeting of the stockholders of the Corporation every
holder of Class A Common
3
Stock shall be entitled to one vote in person or by proxy for each share of
Class A Common Stock standing in his or her name on the transfer books of the
Corporation, and every holder of Class B Common Stock shall be entitled to three
votes in person or by proxy for each share of Class B Common Stock standing in
his or her name on the transfer books of the Corporation in connection with the
election of directors and all other matters submitted to a vote of stockholders;
provided, however, that with respect to any proposed conversion of the shares of
-------- -------
Class B Common Stock into shares of Class A Common Stock pursuant to paragraph
(d)(5)(B), every holder of a share of Common Stock, irrespective of class, shall
have one vote in person or by proxy for each share of Common Stock standing in
his or her name on the transfer books of the Corporation. Except as may be
otherwise required by law or by this ARTICLE FOURTH, the holders of Class A
Common Stock and Class B Common Stock shall vote together as a single class,
subject to any voting rights which may be granted to holders of Preferred Stock,
on all matters submitted to a vote of the holders of Common Stock.
(B) Every reference in this Amended and Restated Certificate of
Incorporation to a majority or other proportion of shares of Common Stock, Class
A Common Stock or Class B Common Stock, shall refer to such majority or other
proportion of the votes to which such shares of Common Stock, Class A Common
Stock or Class B Common Stock are entitled.
(4) In the event of any dissolution, liquidation or winding up of the
affairs of the Corporation, whether voluntary or involuntary, after payment in
full of the amounts required to be paid to the holders of Preferred Stock, the
remaining assets and funds of the Corporation shall be distributed pro rata to
the holders of Class A Common Stock and Class B Common Stock. For the purposes
of this paragraph (d)(4), the voluntary sale, conveyance, lease, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all of the assets of the Corporation or a consolidation or
merger of the Corporation with one or more other corporations (whether or not
the
4
Corporation is the corporation surviving such consolidation or merger) shall not
be deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary.
(5)(A) Prior to the earliest to occur of the date on which shares of Class
B Common Stock are issued to stockholders of The Limited, Inc. or its successors
("The Limited") in a Tax-Free Spin-Off (as defined in paragraph (d)(5)(B)) and
the date on which the number of shares of Class B Common Stock outstanding is
less than 60% of the aggregate number of shares of Common Stock outstanding and
a Tax-Free Spin-Off has not occurred, each share of Class B Common Stock is
convertible at the option of the holder thereof into one share of Class A Common
Stock. At the time of a voluntary conversion, the holder of shares of Class B
Common Stock shall deliver to the office of the Corporation or any transfer
agent for the Class B Common Stock (i) the certificate or certificates
representing the shares of Class B Common Stock to be converted, duly endorsed
in blank or accompanied by proper instruments of transfer, and (ii) written
notice to the Corporation stating that such holder elects to convert such share
or shares and stating the name and address in which each certificate for shares
of Class A Common Stock issued upon such conversion is to be issued. To the
extent permitted by law and subject to the taking of any necessary action or
making any filing contemplated by paragraph (d)(5)(E), such voluntary conversion
shall be deemed to have been effected at the close of business on the date when
such delivery is made to the Corporation or such transfer agent of the shares to
be converted, and the person exercising such voluntary conversion shall be
deemed to be the holder of record of the number of shares of Class A Common
Stock issuable upon such conversion at such time. The Corporation shall
promptly deliver certificates evidencing the appropriate number of shares of
Class A Common Stock to such person.
(B) Each share of Class B Common Stock shall automatically convert into
one share of Class A Common Stock upon the transfer of such share if, after such
transfer, such share is not beneficially owned by The Limited, unless such
5
transfer is effected in connection with a transfer of Class B Common Stock to
stockholders of The Limited as a dividend intended to be on a tax-free basis
under the Internal Revenue Code of 1986, as amended from time to time (the
"Code"), (a "Tax-Free Spin-Off"). For purposes of this paragraph (d)(5), the
term "beneficially owned" with respect to shares of Class B Common Stock means
ownership by a person who, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise controls the voting power
(which includes the power to vote or to direct the voting of) of such Class B
Common Stock. In the event of a Tax-Free Spin-Off, shares of Class B Common
Stock shall automatically convert into shares of Class A Common Stock on the
fifth anniversary of the date on which shares of Class B Common Stock are first
transferred to stockholders of The Limited in a Tax-Free Spin-Off unless, prior
to such Tax-Free Spin-Off, The Limited delivers to the Corporation an opinion of
The Limited's counsel (which counsel shall be reasonably satisfactory to the
Corporation) to the effect that such conversion would preclude The Limited from
obtaining a favorable ruling from the Internal Revenue Service that the
distribution would be a Tax-Free Spin-Off under the Code. If such an opinion is
received, approval of such conversion shall be submitted to a vote of the
holders of the Common Stock as soon as practicable after the fifth anniversary
of the Tax-Free Spin-Off unless The Limited delivers to the Corporation an
opinion of The Limited's counsel (which counsel shall be reasonably satisfactory
to the Corporation) prior to such anniversary to the effect that such vote would
adversely affect the status of the Tax-Free Spin-Off. At the meeting of
stockholders called for such purpose, every holder of Common Stock shall be
entitled to one vote in person or by proxy for each share of Common Stock
standing in his or her name on the transfer books of the Corporation. Approval
of such conversion shall require the approval of a majority of the votes
entitled to be cast by the holders of the Class A Common Stock and Class B
Common Stock present and voting, voting together as a single class, and the
holders of the Class B Common Stock shall not be entitled to a separate class
vote. Such conversion shall be effective on
6
the date on which such approval is given at a meeting of stockholders called for
such purpose.
Each share of Class B Common Stock shall automatically convert into one
share of Class A Common Stock on the date on which the number of shares of Class
B Common Stock outstanding is less than 60% of the aggregate number of shares of
Common Stock outstanding and a Tax-Free Spin-Off has not occurred.
The Corporation shall at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Common
Stock and its issued Common Stock held in its treasury for the purpose of
effecting any conversion of the Class B Common Stock pursuant to this paragraph
(d)(5)(B), the full number of shares of Class A Common Stock then deliverable
upon any such conversion of all outstanding shares of Class B Common Stock.
The Corporation will provide notice of any automatic conversion of shares
of Class B Common Stock to holders of record of the Common Stock not less than
30 nor more than 60 days prior to the date fixed for such conversion; provided,
--------
however, that if the timing or nature of the effectiveness of an automatic
-------
conversion makes it impracticable to provide at least 30 days' notice, the
Corporation shall provide such notice as soon as practicable. Such notice shall
be provided by mailing notice of such conversion first class postage prepaid, to
each holder of record of the Common Stock, at such holder's address as it
appears on the transfer books of the Corporation; provided, however, that no
-------- -------
failure to give such notice nor any defect therein shall affect the validity of
the automatic conversion of any shares of Class B Common Stock. Each such
notice shall state, as appropriate, the following:
(i) the automatic conversion date;
(ii) the number of outstanding shares of Class B Common Stock that are to be
converted automatically;
7
(iii) the place or places where certificates for such shares are to be
surrendered for conversion; and
(iv) that no dividends will be declared on the shares of Class B
Common Stock converted after such conversion date.
Immediately upon such conversion, the rights of the holders of shares of
Class B Common Stock as such shall cease and such holders shall be treated for
all purposes as having become the record owners of the shares of Class A Common
Stock issuable upon such conversion; provided, however, that such persons shall
-------- -------
be entitled to receive when paid any dividends declared on the Class B Common
Stock as of a record date preceding the time of such conversion and unpaid as of
the time of such conversion.
As promptly as practicable after the time of conversion, upon the delivery
to the Corporation of certificates formerly representing shares of Class B
Common Stock, the Corporation shall deliver or cause to be delivered, to or upon
the written order of the record holder of the surrendered certificates formerly
representing shares of Class B Common Stock, a certificate or certificates
representing the number of fully paid and nonassessable shares of Class A Common
Stock into which the shares of Class B Common Stock formerly represented by such
certificates have been converted in accordance with the provisions of this
paragraph (d)(5)(B).
(C) Subject to the provisions of this paragraph (d)(5)(C), from and after
the date on which shares of Class B Common Stock are transferred to the
stockholders of The Limited in a Tax-Free Spin-Off, (i) each share of Class A
Common Stock shall be convertible at the option of the holder thereof into one
share of Class B Common Stock on the date on which any person (other than The
Limited or any of its consolidated subsidiaries) or any group of persons (other
than a group composed of The Limited and/or one or more of its consolidated
subsidiaries) agreeing to act together for the purpose of acquiring, holding,
voting or disposing of shares of Class B Common Stock, shall make an offer,
which the Board of
8
Directors determines in its sole discretion to be "bona fide", to holders of
Class B Common Stock to purchase 5% or more of the issued and outstanding shares
of such Class B Common Stock for cash or a combination of cash and other
securities or property and (ii) each share of Class B Common Stock shall be
convertible at the option of the holder thereof into one share of Class A Common
Stock on the date on which any person (other than The Limited or any of its
consolidated subsidiaries) or any group of persons (other than a group composed
of The Limited and/or one or more of its consolidated subsidiaries) agreeing to
act together for the purpose of acquiring, holding, voting or disposing of
shares of Class A Common Stock, shall make an offer, which the Board of
Directors determines in its sole discretion to be "bona fide", to holders of
Class A Common Stock to purchase 5% or more of the issued and outstanding shares
of Class A Common Stock for cash or a combination of cash and other securities
or property. The Corporation will provide notice in writing to all holders of
Common Stock of any offer referred to in the foregoing clauses (i) and (ii).
Such notice shall be provided by mailing notice of such offer, first class
postage prepaid, to each holder of the class of Common Stock then entitled to be
converted, at such holder's address as it appears on the transfer books of the
Corporation. The Common Stock shall be convertible under this paragraph
(d)(5)(C) as long as such offer shall remain in effect and shall not be
terminated, rescinded or completed, as determined by the Board of Directors in
its sole discretion. Notwithstanding the foregoing, each share of Common Stock
converted into a share of the other class of Common Stock pursuant to this
paragraph (d)(5)(C) and not purchased pursuant to such offer prior to the
termination, rescission or completion thereof, as determined by the Board of
Directors in its sole discretion, shall automatically be reconverted into a
share of Common Stock of the class from which it was converted pursuant to this
paragraph (d)(5)(C) upon the earliest to occur of the termination, rescission or
completion of such offer, as so determined by the Board of Directors.
9
Any conversion pursuant to this paragraph (d)(5)(C) may be effected at the
office of the Corporation or any transfer agent for the Common Stock and at such
other place or places, if any, as the Board of Directors may designate. Upon
conversion pursuant to this paragraph (d)(5)(C), the Corporation shall make no
payment or adjustment on account of dividends accrued or in arrears on Common
Stock surrendered for conversion or on account of any dividends on Common Stock
issuable on such conversion. Before any holder of Common Stock shall be
entitled to convert the same into any other class of stock pursuant to this
paragraph (d)(5)(C), such holder shall surrender the certificate or certificates
for such Common Stock at the office of said transfer agent (or other place as
provided above). Such certificate(s), if the Corporation shall so request,
shall be duly endorsed to the Corporation or in blank or accompanied by proper
instruments of transfer to the Corporation or in blank (such endorsements or
instruments of transfer to be in form satisfactory to the Corporation). Such
certificate(s) shall be accompanied by a written notice to the Corporation at
said office stating that such holder elects to convert all or a specified number
of Common Stock represented by such certificate(s) in accordance with this
paragraph (d)(5)(C) and stating the name(s) in which such holder desires the
certificate(s) representing the stock to be issued. Such written notice shall
also state the name(s) of the person(s) making the offer entitling such holder
to convert such Common Stock. The Corporation will, as soon as practicable
after deposit of the certificate(s) for the class of Common Stock to be
converted, accompanied by the written notice and the statements prescribed
above, issue and deliver at the office of said transfer agent (or other place as
provided above) to the person for whose account such Common Stock was so
surrendered, or to such person's nominee or nominees, a certificate or
certificates for the number of shares of such other class of Common Stock to
which such holder shall be entitled as aforesaid.
Any certificate of Common Stock issued in connection with a conversion
pursuant to this paragraph (d)(5)(C) shall bear a legend substantially to the
effect of the last sentence
10
of the first subparagraph of this paragraph (d)(5)(C) until such certificate
shall be transferred to the person(s) making the offer entitling a holder of
Common Stock to convert such Common Stock pursuant to this paragraph (d)(5)(C),
or the nominee or nominees of such person(s).
Any conversion pursuant to this paragraph (d)(5)(C) shall be deemed to have
been made as of the date of surrender of the Common Stock to be converted; and
the person or persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such Common Stock on such date.
(D) The Corporation will pay any and all documentary, stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
one class of Common Stock on the conversion of shares of the other class of
Common Stock pursuant to this paragraph (d)(5); provided, however, that the
-------- -------
Corporation shall not be required to pay any tax which may be payable in respect
of any registration of transfer involved in the issue or delivery of shares of
one class of Common Stock in a name other than that of the registered holder of
the other class of Common Stock converted, and no such issue or delivery shall
be made unless and until the person requesting such issue 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.
(E) Concurrently with any conversion of one class of Common Stock into the
other class of Common Stock effected pursuant to paragraphs (d)(5)(A) and (B)
above and, in the case of a conversion pursuant to paragraph (d)(5)(C) above,
concurrently with the purchase of shares so converted, each share of a class of
Common Stock that is converted (i) shall be retired and canceled and shall not
be reissued and (ii) shall proportionally decrease the number of shares of
Common Stock of such class designated hereby. The Secretary of the Corporation
shall be, and hereby is, authorized and directed to file with the Secretary of
State of the State of Delaware one or more Certificates of Decrease of
Designated Shares
11
to record any such decrease in designated shares of Common Stock. No
undesignated shares of Common Stock shall be designated shares of Class B Common
Stock following an automatic conversion of shares of Class B Common Stock
pursuant to paragraph (d)(5)(B) above.
(F) Immediately upon the effectiveness of this Amended and Restated
Certificate of Incorporation each share of common stock of the Corporation, par
value $.10 per share, that is issued and outstanding immediately prior to such
effectiveness, shall be changed into and reclassified as 43,000 shares of Class
B Common Stock.
Section 3. Preferred Stock.
---------------
(a) Series and Limits of Variations between Series. Any unissued or
----------------------------------------------
treasury shares of the Preferred Stock may be issued from time to time in one or
more series for such consideration as may be fixed from time to time by the
Board of Directors and each share of a series shall be identical in all respects
with the other shares of such series, except that, if the dividends thereon are
cumulative, the date from which they shall be cumulative may differ. Before any
shares of Preferred Stock of any particular series shall be issued, a
certificate shall be filed with the Secretary of State of Delaware setting forth
the designation, rights, privileges, restrictions, and conditions to be attached
to the Preferred Stock of such series and such other matters as may be required,
and the Board of Directors shall fix and determine, and is hereby expressly
empowered to fix and determine, in the manner provided by law, the particulars
of the shares of such series (so far as not inconsistent with the provisions of
this ARTICLE FOURTH applicable to all series of Preferred Stock), including, but
not limited to, the following:
(1) the distinctive designation of such series and the number of shares
which shall constitute such series, which number may be increased (except where
otherwise provided by the Board of Directors in creating such series) or
decreased (but not below the number of shares thereof then outstanding) from
time to time by like action of the Board of Directors;
12
(2) the annual rate of dividends payable on shares of such series, the
conditions upon which such dividends shall be payable and the date from which
dividends shall be cumulative in the event the Board of Directors determines
that dividends shall be cumulative;
(3) whether such series shall have voting rights, in addition to the voting
rights provided by law and, if so, the terms of such voting rights;
(4) whether such series shall have conversion privileges and, if so, the
terms and conditions of such conversion, including, but not limited to,
provision for adjustment of the conversion rate upon such events and in such
manner as the Board of Directors shall determine;
(5) whether or not the shares of such series shall be redeemable and, if
so, the terms and conditions of such redemption, including the date or dates
upon or after which they shall be redeemable, and the amount per share payable
in case of redemption, which amount may vary under different conditions and at
different redemption dates;
(6) whether such series shall have a sinking fund for the redemption or
purchase of shares of that series and, if so, the terms and amount of such
sinking fund;
(7) the rights of the shares of such series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, and the
relative rights of priority, if any, of payment of shares of that series; and
(8) any other relative rights, preferences and limitations of such series.
Section 4. No Preemptive Rights. Except as otherwise set forth above in
--------------------
this ARTICLE FOURTH, no holder of shares of this Corporation of any class shall
be entitled, as such, as a matter of right, to subscribe for or purchase shares
of any class now or hereafter authorized, or to purchase or subscribe for
securities convertible into or exchangeable for shares of the Corporation or to
which there shall be attached
13
or appertain any warrants or rights entitling the holders thereof to purchase or
subscribe for shares.
FIFTH.
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Section 1. Amendment of Bylaws by Directors. In furtherance and not in
--------------------------------
limitation of the powers conferred by statute, the Board of Directors is
expressly authorized to make, repeal, alter, amend and rescind the bylaws of the
Corporation.
Section 2. Amendment of Bylaws by the Stockholders. The bylaws shall not
---------------------------------------
be made, repealed, altered, amended or rescinded by the stockholders of the
Corporation except by the vote of not less than 75 percent of the outstanding
shares of the Corporation entitled to vote thereon. Any amendment to the
Certificate of Incorporation which shall contravene any bylaw in existence on
the record date of the stockholders meeting at which such amendment is to be
voted upon by the stockholders shall require the vote of not less than 75
percent of the outstanding shares entitled to vote thereon.
SIXTH.
-----
Section 1. Classified Board. Effective immediately upon the issuance of
----------------
more than 1,000 shares of Common Stock of the Corporation, the Board of
Directors (exclusive of directors to be elected by the holders of any one or
more series of Preferred Stock voting separately as a class or classes) shall be
divided into three classes, Class A, Class B, and Class C. The number of
directors in each class shall be the whole number contained in the quotient
arrived at by dividing the authorized number of directors by three, and if a
fraction is also contained in such quotient, then if such fraction is one-third,
the extra director shall be a member of Class A and if the fraction is two-
thirds, one of the extra directors shall be a member of Class A and the other
shall be a member of Class B. Each director shall serve for a term ending on
the date of the third annual meeting following the annual meeting at which such
director was elected; provided, however, that the directors first elected to
Class A shall serve for a term ending on the date of the annual meeting next
following the end of the calendar year 1996, the directors first elected to
Class B shall serve for a term ending on the date of the second annual meeting
next following the end of the
14
calendar year 1996, and the directors first elected to Class C shall serve for a
term ending on the date of the third annual meeting next following the end of
the calendar year 1996. Notwithstanding the foregoing formula provisions, in
the event that, as a result of any change in the authorized number of directors,
the number of directors in any class would differ from the number allocated to
that class under the formula provided in this ARTICLE SIXTH immediately prior to
such change, the following rules shall govern:
(a) each director then serving as such shall nevertheless continue as a
director of the class of which such director is a member until the expiration of
his current term, or his prior death, resignation or removal;
(b) at each subsequent election of directors, even if the number of
directors in the class whose term of office then expires is less than the number
then allocated to that class under said formula, the number of directors then
elected for membership in that class shall not be greater than the number of
directors in that class whose term of office then expires, unless and to the
extent that the aggregate number of directors then elected plus the number of
directors in all classes then duly continuing in office does not exceed the then
authorized number of directors of the Corporation;
(c) at each subsequent election of directors, if the number of directors in
the class whose term of office then expires exceeds the number then allocated to
that class under said formula, the Board of Directors shall designate one or
more of the directorships then being elected as directors of another class or
classes in which the number of directors then serving is less than the number
then allocated to such other class or classes under said formula;
(d) in the event of the death, resignation or removal of any director who
is a member of a class in which the number of directors serving immediately
preceding the creation of such vacancy exceeded the number then allocated to
that class under said formula, the Board of Directors shall designate the
vacancy thus created as a vacancy in another class in which the number of
directors then serving is less than the
15
number then allocated to such other class under said formula;
(e) In the event of any increase in the authorized number of directors, the
newly created directorships resulting from such increase shall be apportioned by
the Board of Directors to such class or classes as shall, so far as possible,
bring the composition of each of the classes into conformity with the formula in
this ARTICLE SIXTH, as it applies to the number of directors authorized
immediately following such increase; and
(f) designation of directorships or vacancies into other classes and
apportionments of newly created directorships to classes by the Board of
Directors under the foregoing items (c), (d) and (e) shall, so far as possible,
be effected so that the class whose term of office is due to expire next
following such designation or apportionment shall contain the full number of
directors then allocated to said class under said formula.
Notwithstanding any of the foregoing provisions of this ARTICLE SIXTH, each
director shall serve until his successor is elected and qualified or until his
death, resignation or removal.
Section 2. Election by Holders of Preferred Stock. During any period when
--------------------------------------
the holders of any Preferred Stock or any one or more series thereof, voting as
a class, shall be entitled to elect a specified number of directors, by reason
of dividend arrearages or other provisions giving them the right to do so, then
and during such time as such right continues (i) the then otherwise authorized
number of directors shall be increased by such specified number of directors,
and the holders of such Preferred Stock or such series thereof, voting as a
class, shall be entitled to elect the additional directors so provided for,
pursuant to the provisions of such Preferred Stock or series; (ii) each such
additional director shall serve for such term, and have such voting powers, as
shall be stated in the provisions pertaining to such Preferred Stock or series;
and (iii) whenever the holders of any such Preferred Stock or series thereof are
divested of such rights to elect a specified number of directors, voting as a
class, pursuant to the provisions of such Preferred Stock or series, the terms
of office of all directors elected by the holders of
16
such Preferred Stock or series, voting as a class pursuant to such provisions or
elected to fill any vacancies resulting from the death, resignation or removal
of directors so elected by the holders of such Preferred Stock or series, shall
forthwith terminate and the authorized number of directors shall be reduced
accordingly.
Section 3. Ballots. Elections of directors at an annual or special
-------
meeting of stockholders need not be by written ballot unless the bylaws of the
Corporation shall provide otherwise.
Section 4. Elimination of Certain Personal Liability of Directors. A
------------------------------------------------------
director of this Corporation shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of any fiduciary duty as a
director to the fullest extent permitted by Delaware Law.
SEVENTH. After the issuance of more than 1,000 shares of Common Stock of
-------
the Corporation, no action shall be taken by the stockholders except at an
annual or special meeting of stockholders.
EIGHTH. The Board of Directors of the Corporation, when evaluating any
------
offer of another party to (1) make a tender or exchange offer for any equity
security of the Corporation, (2) merge or consolidate the Corporation with
another corporation, or (3) purchase or otherwise acquire all or substantially
all of the properties and assets of the Corporation, shall in connection with
the exercise of its judgment in determining what is in the best interests of the
Corporation and its stockholders, give due consideration to all relevant
factors, including without limitation the social and economic effects on the
employees, customers, suppliers and other constituents of the Corporation and
its subsidiaries and on the communities in which the Corporation and its
subsidiaries operate or are located.
NINTH. Any director may be removed at any annual or special
-----
stockholders' meeting upon the affirmative vote of not less than 75 percent of
the outstanding shares of voting stock of the Corporation at that time entitled
to vote thereon; provided, however, that such director may be removed only for
cause and shall receive a copy of the charges against him, delivered to him
personally or by mail at his last
17
known address at least 10 days prior to the date of the stockholders' meeting;
provided further, that directors who shall have been elected by the holders of a
series or class of Preferred Stock, voting separately as a class, shall be
removed only pursuant to the provisions establishing the rights of such series
or class to elect such directors.
TENTH.
-----
Section 1. Amendment of Certain Articles. The provisions set forth in this
-----------------------------
ARTICLE TENTH and in ARTICLES FIFTH, SIXTH, Section 1, SEVENTH, EIGHTH, NINTH,
ELEVENTH, TWELFTH and THIRTEENTH may not be amended, altered, changed, or
repealed in any respect unless such amendment, alteration, change or repealing
is approved by the affirmative vote of not less than 75 percent of the
outstanding shares of the Corporation entitled to vote thereon; provided that
with respect to any proposed amendment, alteration or change to this Amended and
Restated Certificate of Incorporation, or repealing of any provision of this
Amended and Restated Certificate of Incorporation, which would amend, alter or
change the powers, preferences or special rights of the shares of Class A Common
Stock or Class B Common Stock so as to affect them adversely, the affirmative
vote of not less than 75 percent of the outstanding shares affected by the
proposed amendment, voting as a separate class, shall be required in addition to
the vote otherwise required pursuant to this ARTICLE TENTH; and provided,
--------
further, that with respect to any amendment, alteration or change to, or
-------
repealing of, any provision of ARTICLE ELEVENTH, the affirmative vote of not
less than 75 percent of the outstanding shares of the Corporation entitled to
vote thereon, other than shares held by the Interested Person (if any) seeking
or proposing to effect any transaction involving the Corporation or any
subsidiary of the Corporation, shall be required in addition to the vote
otherwise required pursuant to this ARTICLE TENTH.
Section 2. Amendments Generally. Subject to the provisions of Section 1
--------------------
of this ARTICLE TENTH, the Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Amended and Restated
Certificate of Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred on stockholders herein are granted subject to
this reservation.
18
ELEVENTH.
--------
Section 1. Vote Required for Certain Business Combinations. The
-----------------------------------------------
affirmative vote of not less than 75 percent of the outstanding shares of
"Voting Stock" (as hereinafter defined) held by stockholders other than the
"Interested Person" (as hereinafter defined) seeking to effect a "Business
Combination" (as hereinafter defined) shall be required for the approval or
authorization of any Business Combination with any Interested Person; provided
--------
that the provisions of this ARTICLE ELEVENTH shall not apply to any Business
Combination, and such Business Combination shall require only such affirmative
vote, if any, as is required by law or otherwise, if such Business Combination
shall have been approved by a majority (whether such approval is made prior or
subsequent to the acquisition of Beneficial Ownership of the Voting Stock that
caused the Interested Person to become an Interested Person) of the Continuing
Directors (as hereinafter defined).
Section 2. Definitions. Certain words and terms as used in this ARTICLE
-----------
ELEVENTH shall have the meanings given to them by the definitions and
descriptions in this Section.
(a) Business Combination. The term "Business Combination" shall mean (a)
--------------------
any merger or consolidation of the Corporation or a subsidiary of the
Corporation with or into an Interested Person, (b) any sale, lease, exchange,
transfer or other disposition, including without limitation, a mortgage or any
other security device, of all or any "Substantial Part" (as hereinafter defined)
of the assets either of the Corporation (including without limitation, any
voting securities of a subsidiary) or of a subsidiary of the Corporation to an
Interested Person, (c) any merger or consolidation of an Interested Person with
or into the Corporation or a subsidiary of the Corporation, (d) any sale, lease,
exchange, transfer or other disposition, including without limitation, a
mortgage or other security device, of all or any Substantial Part of the assets
of an Interested Person to the Corporation or a subsidiary of the Corporation,
(e) the issuance or transfer by the Corporation or any subsidiary of the
Corporation of any securities of the Corporation or a subsidiary of the
Corporation to an Interested Person, (f) any reclassification of securities,
recapitalization or other comparable transaction
19
involving the Corporation that would have the effect of increasing the voting
power of any Interested Person with respect to Voting Stock of the Corporation,
and (g) any agreement, contract or other arrangement providing for any of the
transactions described in this definition of Business Combination.
(b) Interested Person. The term "Interested Person" shall mean and include
-----------------
any individual, corporation, partnership or other person or entity which,
together with its "Affiliates" and "Associates" (as defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934 as in
effect at the date of the adoption of this ARTICLE ELEVENTH by the stockholders
of the Corporation), "Beneficially Owns" (as defined in Rule 13d-3 of the
General Rules and Regulations under the Securities Exchange Act of 1934 as in
effect at the date of the adoption of this ARTICLE ELEVENTH by the stockholders
of the Corporation) in the aggregate five percent or more of the outstanding
Voting Stock of the Corporation, and any Affiliate or Associate of any such
individual, corporation, partnership or other person or entity. Without
limitation, any share of Voting Stock of the Corporation that any Interested
Person has the right to acquire at any time (notwithstanding that Rule 13d-3
deems such shares to be beneficially owned only if such right may be exercised
within 60 days) pursuant to any agreement, or upon exercise of conversion
rights, warrants or options, or otherwise, shall be deemed to be Beneficially
Owned by the Interested Person and to be outstanding for purposes of this
definition. An Interested Person shall be deemed to have acquired a share of
the Voting Stock of the Corporation at the time when such Interested Person
became the Beneficial Owner thereof.
(c) Voting Stock. The term "Voting Stock" shall mean all of the
------------
outstanding shares of Common Stock of the Corporation and any outstanding shares
of Preferred Stock entitled to vote on each matter on which the holders of
record of Common Stock shall be entitled to vote, and each reference to a
proportion of shares of Voting Stock shall refer to such proportion of the votes
entitled to be cast by such shares.
(d) Substantial Part. The term "Substantial Part" shall mean more than 20
----------------
percent of the fair market value as determined by two-thirds of the Continuing
Directors of the total consolidated assets
20
of the Corporation and its subsidiaries taken as a whole as of the end of its
most recent fiscal year ended prior to the time the determination is being made.
(e) Continuing Director. The term "Continuing Director" shall mean a
-------------------
Director who was a member of the Board of Directors of the Corporation
immediately prior to the time that the Interested Person involved in a Business
Combination became an Interested Person, or a Director who was elected or
appointed to fill a vacancy after the date the Interested Person became an
Interested Person by a majority of the then-current Continuing Directors;
provided, that with respect to The Limited, the term "Continuing Director" shall
--------
mean a Director who was a member of the Board of Directors of the Corporation
immediately following the consummation of the initial public offering of the
Corporation's Class A Common Stock in a transaction registered under the
Securities Act of 1933, as amended (the "IPO"), or a Director who was elected or
appointed to fill a vacancy after the IPO by a majority of the then-current
Continuing Directors.
TWELFTH.
-------
Section 1. In anticipation that the Corporation will cease to be a wholly
owned subsidiary of The Limited, but that The Limited will remain a stockholder
of the Corporation, and in anticipation that the Corporation and The Limited may
engage in the same or similar activities or lines of business and have an
interest in the same areas of corporate opportunities, and in recognition of (i)
the benefits to be derived by the Corporation through its continued contractual,
corporate and business relations with The Limited (including service of officers
and directors of The Limited as officers and directors of the Corporation) and
(ii) the difficulties attendant to any director, who desires and endeavors fully
to satisfy such director's fiduciary duties, in determining the full scope of
such duties in any particular situation, the provisions of this ARTICLE TWELFTH
are set forth to regulate, define and guide the conduct of certain affairs of
the Corporation as they may involve The Limited and its officers and directors,
and the powers, rights, duties and liabilities of the Corporation and its
officers, directors and stockholders in connection therewith.
21
Section 2. Except as The Limited may otherwise agree in writing,
(a) The Limited shall not have a duty to refrain from engaging directly or
indirectly in the same or similar business activities or lines of business as
the Corporation, and
(b) neither The Limited nor any officer or director thereof shall be liable
to the Corporation or its stockholders for breach of any fiduciary duty by
reason of any such activities of The Limited or of such person's participation
therein.
In the event that The Limited acquires knowledge of a potential transaction or
matter that may be a corporate opportunity for both The Limited and the
Corporation, The Limited shall have no duty to communicate or offer such
corporate opportunity to the Corporation and shall not be liable to the
Corporation or its stockholders for breach of any fiduciary duty as a
stockholder of the Corporation or controlling person of a stockholder by reason
of the fact that The Limited pursues or acquires such corporate opportunity for
itself, directs such corporate opportunity to another person or entity, or does
not communicate information regarding, or offer, such corporate opportunity to
the Corporation.
Section 3. In the event that a director, officer or employee of the
Corporation who is also a director, officer or employee of The Limited acquires
knowledge of a potential transaction or matter that may be a corporate
opportunity for the Corporation and The Limited (whether such potential
transaction or matter is proposed by a third-party or is conceived of by such
director, officer or employee of the Corporation), such director, officer or
employee shall be entitled to offer such corporate opportunity to the
Corporation or The Limited as such director, officer or employee deems
appropriate under the circumstances in his sole discretion, and no such
director, officer or employee shall be liable to the Corporation or its
stockholders for breach of any fiduciary duty or duty of loyalty or failure to
act in (or not opposed to) the best interests of the Corporation or the
derivation of any improper personal benefit by reason of the fact that (i) such
director, officer or employee offered such corporate opportunity to The Limited
(rather than the Corporation) or did not communicate information
22
regarding such corporate opportunity to the Corporation or (ii) The Limited
pursues or acquires such corporate opportunity for itself or directs such
corporate opportunity to another person or does not communicate information
regarding such corporate opportunity to the Corporation.
Section 4. Any person or entity purchasing or otherwise acquiring any
interest in any shares of capital stock of the Corporation shall be deemed to
have notice of and to have consented to the provisions of this ARTICLE TWELFTH.
Section 5. For purposes of this ARTICLE TWELFTH and ARTICLE THIRTEENTH
only, (i) the term "Corporation" shall mean the Corporation and all
corporations, partnerships, joint ventures, associations and other entities in
which the Corporation beneficially owns (directly or indirectly) fifty percent
or more of the outstanding voting stock, voting power or similar voting
interests, and (ii) the term "The Limited" shall mean The Limited and all
corporations, partnerships, joint ventures, associations and other entities
(other than the Corporation, defined in accordance with clause (i) of this
Section 5) in which The Limited beneficially owns (directly or indirectly) fifty
percent or more of the outstanding voting stock, voting power or similar voting
interests.
Section 6. Notwithstanding anything in this Certificate of Incorporation
to the contrary, the foregoing provisions of this ARTICLE TWELFTH shall expire
on the date that The Limited ceases to own beneficially Common Stock
representing at least 20% of the number of outstanding shares of Common Stock of
the Corporation and no person who is a director or officer of the Corporation is
also a director or officer of The Limited. Neither the alteration, amendment,
change or repeal of any provision of this ARTICLE TWELFTH nor the adoption of
any provision of this Amended and Restated Certificate of Incorporation
inconsistent with any provision of this ARTICLE TWELFTH shall eliminate or
reduce the effect of this ARTICLE TWELFTH in respect of any matter occurring, or
any cause of action, suit or claim that, but for this ARTICLE TWELFTH, would
accrue or arise, prior to such alteration, amendment, repeal or adoption.
23
Section 7. The provisions of this ARTICLE TWELFTH are in addition to the
provisions of ARTICLE SIXTH, Section 5, and ARTICLE THIRTEENTH.
THIRTEENTH.
----------
Section 1. No contract, agreement, arrangement or transaction (or any
amendment, modification or termination thereof) between the Corporation and The
Limited or any Related Entity (as defined below) or between the Corporation and
one or more of the directors or officers of the Corporation, The Limited or any
Related Entity, shall be void or voidable solely for the reason that The
Limited, any Related Entity or any one or more of the officers or directors of
the Corporation, The Limited or any Related Entity are parties thereto, or
solely because any such directors or officers are present at or participate in
the meeting of the Board of Directors or committee thereof which authorizes the
contract, agreement, arrangement, transaction, amendment, modification or
termination or solely because his or their votes are counted for such purpose,
but any such contract, agreement, arrangement or transaction (or any amendment,
modification or termination thereof) shall be governed by the provisions of this
Amended and Restated Certificate of Incorporation, the Corporation's Bylaws,
Delaware Law and other applicable law. For purposes of this ARTICLE THIRTEENTH,
(i) the term "Related Entities" means one or more directors of this Corporation,
or one or more corporations, partnerships, associations or other organizations
in which one or more of its directors have a direct or indirect financial
interest and (ii) the terms the "Corporation" and "The Limited" have the
meanings set forth in ARTICLE TWELFTH, Section 5.
Section 2. Directors of the Corporation who are also directors or officers
of The Limited or any Related Entity may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or of a committee that
authorizes or approves any such contract, agreement, arrangement or transaction
(or amendment, modification or termination thereof). Outstanding shares of
Common Stock owned by The Limited and any Related Entities may be counted in
determining the presence of a quorum at a meeting of stockholders that
authorizes or approves any such contract, agreement, arrangement or transaction
(or amendment, modification or termination thereof).
24
Section 3. Neither The Limited nor any officer or director thereof or
Related Entity shall be liable to the Corporation or its stockholders for breach
of any fiduciary duty or duty of loyalty or failure to act in (or not opposed
to) the best interests of the Corporation or the derivation of any improper
personal benefit by reason of the fact that The Limited or an officer of
director thereof or such Related Entity in good faith takes any action or
exercises any rights or gives or withholds any consent in connection with any
agreement or contract between The Limited or such Related Entity and the
Corporation. No vote cast or other action taken by any person who is an
officer, director or other representative of The Limited or such Related Entity,
which vote is cast or action is taken by such person in his capacity as a
director of this Corporation, shall constitute an action of or the exercise of a
right by or a consent of The Limited or such Related Entity for the purpose of
any such agreement or contract.
Section 4. Any person or entity purchasing or otherwise acquiring any
interest in any shares of capital stock of the Corporation shall be deemed to
have notice of and to have consented to the provisions of this ARTICLE
THIRTEENTH.
Section 5. For purposes of this ARTICLE THIRTEENTH, any contract,
agreement, arrangement or transaction with any corporation, partnership, joint
venture, association or other entity in which the Corporation beneficially owns
(directly or indirectly) fifty percent or more of the outstanding voting stock,
voting power or similar voting interests, or with any officer or director
thereof, shall be deemed to be a contract, agreement, arrangement or transaction
with the Corporation.
Section 6. Neither the alteration, amendment, change or repeal of any
provision of this ARTICLE THIRTEENTH nor the adoption of any provision
inconsistent with any provision of this ARTICLE THIRTEENTH shall eliminate or
reduce the effect of this ARTICLE THIRTEENTH in respect of any matter occurring,
or any cause of action, suit or claim that, but for this ARTICLE THIRTEENTH,
would accrue or arise, prior to such alteration, amendment, change, repeal or
adoption.
25
Section 7. The provisions of this ARTICLE THIRTEENTH are in addition to
the provisions of ARTICLE SIXTH, Section 5, and ARTICLE TWELFTH.
26
IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation,
having been duly adopted by the written consent of the sole stockholder of the
Corporation in accordance with the provisions of Sections 228, 242 and 245 of
the General Corporation Law of the State of Delaware, has been executed this
27th day of August 1996.
ABERCROMBIE & FITCH CO.
By: /s/ Samuel P. Fried
-----------------------
Name: Samuel P. Fried
Title: Secretary
ABERCROMBIE & FITCH CO.
* * *
Abercrombie & Fitch Co. (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware does hereby amend the Certificate of Incorporation of the Corporation,
which was originally filed on June 26, 1996, under the name Abercrombie & Fitch,
Inc.
FIRST. The name of the Corporation is:
-----
ABERCROMBIE & FITCH CO.
SECOND. The address of the registered office of the Corporation in the
------
State of Delaware is Corporation Service Company, 1013 Centre Road, City of
Wilmington, County of New Castle, Delaware 19805. The name of its registered
agent at such address is Corporation Service Company.
THIRD. The purpose of the Corporation is to engage in any lawful act or
-----
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware as the same exists or may hereafter be amended
("Delaware Law").
FOURTH.
------
Section 1. Capital Stock. (a) The total number of shares of stock which
-------------
the Corporation shall have authority to issue is 315,000,000, consisting of
300,000,000 shares of Common Stock, par value $.01 per share (the "Common
Stock"), and 15,000,000 shares of Preferred Stock, par value $.01 per share (the
"Preferred Stock"). The Common Stock of the Corporation shall be all of one
class, and shall be divided into two classes, consisting of Class A Common Stock
and Class B Common Stock. The Preferred Stock may be issued in one or more
series having such designations as may be fixed by the Board of Directors.
(b) The Board of Directors is expressly authorized to provide for the
issue of all or any shares of the Common Stock and the Preferred Stock, to
determine the number of shares of each class and to fix for each class of Common
Stock and for any series of Preferred Stock such voting powers, full or limited,
or no voting powers, and such designations, preferences and relative,
participating, optional or other special rights, and such qualifications,
limitations or restrictions thereof, as shall be stated and expressed in the
resolution or resolutions adopted by the Board of Directors or a duly authorized
committee thereof providing for the issue of such series and as may be permitted
by Delaware Law.
(c) The number of authorized shares of any class or classes of stock may
be increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of a majority of the Common Stock of the
Corporation irrespective of the provisions of Section 242(b)(2) of Delaware Law.
Section 2. Common Stock. (a) Issuance and Consideration. Any unissued
------------ --------------------------
or treasury shares of the Common Stock may be issued for such consideration as
may be fixed in accordance with applicable law from time to time by the Board of
Directors.
(b) Dividends. Subject to the rights of holders of the Preferred Stock,
---------
the holders of the Common Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of the assets of the Corporation which
are by law available therefor, dividends payable either in cash, in property, or
in shares of stock and the holders of the Preferred Stock shall not be entitled
to participate in any such dividends (unless otherwise provided by the Board of
Directors in any resolution providing for the issue of a series of Preferred
Stock).
(c) Number of Shares. Of the 300,000,000 shares of Common Stock of the
----------------
Corporation, 150,000,000 shares are initially designated as shares of Class A
Common Stock and 150,000,000 shares are initially designated as shares of Class
B Common Stock. The number of shares designated as Class A Common Stock or
Class B Common Stock may be increased or decreased from time to time by a
resolution or resolutions adopted by the Board of Directors or any duly
authorized committee thereof and in accordance with paragraph (d)(5)(E)
2
below without the consent of the holders of any outstanding shares of Common
Stock or Preferred Stock.
(d) Powers, Preferences, Etc. The following is a statement of the powers,
------------------------
preferences, and relative participating, optional or other special rights and
qualifications, limitations and restrictions of the Class A Common Stock and
Class B Common Stock of the Corporation:
(1) Except as otherwise set forth below in this ARTICLE FOURTH, the
powers, preferences and relative participating, optional or other special rights
and qualifications, limitations or restrictions of the Class A Common Stock and
Class B Common Stock shall be identical in all respects.
(2) Subject to the rights of the holders of Preferred Stock, and subject
to any other provisions of this Amended and Restated Certificate of
Incorporation, holders of Class A Common Stock and Class B Common Stock shall be
entitled to receive such dividends and other distributions in cash, stock of any
corporation (other than Common Stock of the Corporation) or property of the
Corporation as may be declared thereon by the Board of Directors from time to
time out of assets or funds of the Corporation legally available therefor and
shall share equally on a per share basis in all such dividends and other
distributions. In the case of dividends or other distributions payable in
Common Stock, including distributions pursuant to stock splits or divisions of
Common Stock of the Corporation, only shares of Class A Common Stock shall be
paid or distributed with respect to Class A Common Stock and only shares of
Class B Common Stock shall be paid or distributed with respect to Class B Common
Stock. The number of shares of Class A Common Stock and Class B Common Stock so
distributed shall be equal in number on a per share basis. Neither the shares
of Class A Common Stock nor the shares of Class B Common Stock may be
reclassified, subdivided or combined unless such reclassification, subdivision
or combination occurs simultaneously and in the same proportion for each class.
(3)(A) At every meeting of the stockholders of the Corporation every
holder of Class A Common
3
Stock shall be entitled to one vote in person or by proxy for each share of
Class A Common Stock standing in his or her name on the transfer books of the
Corporation, and every holder of Class B Common Stock shall be entitled to three
votes in person or by proxy for each share of Class B Common Stock standing in
his or her name on the transfer books of the Corporation in connection with the
election of directors and all other matters submitted to a vote of stockholders;
provided, however, that with respect to any proposed conversion of the shares of
-------- -------
Class B Common Stock into shares of Class A Common Stock pursuant to paragraph
(d)(5)(B), every holder of a share of Common Stock, irrespective of class, shall
have one vote in person or by proxy for each share of Common Stock standing in
his or her name on the transfer books of the Corporation. Except as may be
otherwise required by law or by this ARTICLE FOURTH, the holders of Class A
Common Stock and Class B Common Stock shall vote together as a single class,
subject to any voting rights which may be granted to holders of Preferred Stock,
on all matters submitted to a vote of the holders of Common Stock.
(B) Every reference in this Amended and Restated Certificate of
Incorporation to a majority or other proportion of shares of Common Stock, Class
A Common Stock or Class B Common Stock, shall refer to such majority or other
proportion of the votes to which such shares of Common Stock, Class A Common
Stock or Class B Common Stock are entitled.
(4) In the event of any dissolution, liquidation or winding up of the
affairs of the Corporation, whether voluntary or involuntary, after payment in
full of the amounts required to be paid to the holders of Preferred Stock, the
remaining assets and funds of the Corporation shall be distributed pro rata to
the holders of Class A Common Stock and Class B Common Stock. For the purposes
of this paragraph (d)(4), the voluntary sale, conveyance, lease, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all of the assets of the Corporation or a consolidation or
merger of the Corporation with one or more other corporations (whether or not
the
4
Corporation is the corporation surviving such consolidation or merger) shall not
be deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary.
(5)(A) Prior to the earliest to occur of the date on which shares of Class
B Common Stock are issued to stockholders of The Limited, Inc. or its successors
("The Limited") in a Tax-Free Spin-Off (as defined in paragraph (d)(5)(B)) and
the date on which the number of shares of Class B Common Stock outstanding is
less than 60% of the aggregate number of shares of Common Stock outstanding and
a Tax-Free Spin-Off has not occurred, each share of Class B Common Stock is
convertible at the option of the holder thereof into one share of Class A Common
Stock. At the time of a voluntary conversion, the holder of shares of Class B
Common Stock shall deliver to the office of the Corporation or any transfer
agent for the Class B Common Stock (i) the certificate or certificates
representing the shares of Class B Common Stock to be converted, duly endorsed
in blank or accompanied by proper instruments of transfer, and (ii) written
notice to the Corporation stating that such holder elects to convert such share
or shares and stating the name and address in which each certificate for shares
of Class A Common Stock issued upon such conversion is to be issued. To the
extent permitted by law and subject to the taking of any necessary action or
making any filing contemplated by paragraph (d)(5)(E), such voluntary conversion
shall be deemed to have been effected at the close of business on the date when
such delivery is made to the Corporation or such transfer agent of the shares to
be converted, and the person exercising such voluntary conversion shall be
deemed to be the holder of record of the number of shares of Class A Common
Stock issuable upon such conversion at such time. The Corporation shall
promptly deliver certificates evidencing the appropriate number of shares of
Class A Common Stock to such person.
(B) Each share of Class B Common Stock shall automatically convert into
one share of Class A Common Stock upon the transfer of such share if, after such
transfer, such share is not beneficially owned by The Limited, unless such
5
transfer is effected in connection with a transfer of Class B Common Stock to
stockholders of The Limited as a dividend intended to be on a tax-free basis
under the Internal Revenue Code of 1986, as amended from time to time (the
"Code"), (a "Tax-Free Spin-Off"). For purposes of this paragraph (d)(5), the
term "beneficially owned" with respect to shares of Class B Common Stock means
ownership by a person who, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise controls the voting power
(which includes the power to vote or to direct the voting of) of such Class B
Common Stock. In the event of a Tax-Free Spin-Off, shares of Class B Common
Stock shall automatically convert into shares of Class A Common Stock on the
fifth anniversary of the date on which shares of Class B Common Stock are first
transferred to stockholders of The Limited in a Tax-Free Spin-Off unless, prior
to such Tax-Free Spin-Off, The Limited delivers to the Corporation an opinion of
The Limited's counsel (which counsel shall be reasonably satisfactory to the
Corporation) to the effect that such conversion would preclude The Limited from
obtaining a favorable ruling from the Internal Revenue Service that the
distribution would be a Tax-Free Spin-Off under the Code. If such an opinion is
received, approval of such conversion shall be submitted to a vote of the
holders of the Common Stock as soon as practicable after the fifth anniversary
of the Tax-Free Spin-Off unless The Limited delivers to the Corporation an
opinion of The Limited's counsel (which counsel shall be reasonably satisfactory
to the Corporation) prior to such anniversary to the effect that such vote would
adversely affect the status of the Tax-Free Spin-Off. At the meeting of
stockholders called for such purpose, every holder of Common Stock shall be
entitled to one vote in person or by proxy for each share of Common Stock
standing in his or her name on the transfer books of the Corporation. Approval
of such conversion shall require the approval of a majority of the votes
entitled to be cast by the holders of the Class A Common Stock and Class B
Common Stock present and voting, voting together as a single class, and the
holders of the Class B Common Stock shall not be entitled to a separate class
vote. Such conversion shall be effective on
6
the date on which such approval is given at a meeting of stockholders called for
such purpose.
Each share of Class B Common Stock shall automatically convert into one
share of Class A Common Stock on the date on which the number of shares of Class
B Common Stock outstanding is less than 60% of the aggregate number of shares of
Common Stock outstanding and a Tax-Free Spin-Off has not occurred.
The Corporation shall at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Common
Stock and its issued Common Stock held in its treasury for the purpose of
effecting any conversion of the Class B Common Stock pursuant to this paragraph
(d)(5)(B), the full number of shares of Class A Common Stock then deliverable
upon any such conversion of all outstanding shares of Class B Common Stock.
The Corporation will provide notice of any automatic conversion of shares
of Class B Common Stock to holders of record of the Common Stock not less than
30 nor more than 60 days prior to the date fixed for such conversion; provided,
--------
however, that if the timing or nature of the effectiveness of an automatic
-------
conversion makes it impracticable to provide at least 30 days' notice, the
Corporation shall provide such notice as soon as practicable. Such notice shall
be provided by mailing notice of such conversion first class postage prepaid, to
each holder of record of the Common Stock, at such holder's address as it
appears on the transfer books of the Corporation; provided, however, that no
-------- -------
failure to give such notice nor any defect therein shall affect the validity of
the automatic conversion of any shares of Class B Common Stock. Each such
notice shall state, as appropriate, the following:
(i) the automatic conversion date;
(ii) the number of outstanding shares of Class B Common Stock that are to be
converted automatically;
7
(iii) the place or places where certificates for such shares are to be
surrendered for conversion; and
(iv) that no dividends will be declared on the shares of Class B
Common Stock converted after such conversion date.
Immediately upon such conversion, the rights of the holders of shares of
Class B Common Stock as such shall cease and such holders shall be treated for
all purposes as having become the record owners of the shares of Class A Common
Stock issuable upon such conversion; provided, however, that such persons shall
-------- -------
be entitled to receive when paid any dividends declared on the Class B Common
Stock as of a record date preceding the time of such conversion and unpaid as of
the time of such conversion.
As promptly as practicable after the time of conversion, upon the delivery
to the Corporation of certificates formerly representing shares of Class B
Common Stock, the Corporation shall deliver or cause to be delivered, to or upon
the written order of the record holder of the surrendered certificates formerly
representing shares of Class B Common Stock, a certificate or certificates
representing the number of fully paid and nonassessable shares of Class A Common
Stock into which the shares of Class B Common Stock formerly represented by such
certificates have been converted in accordance with the provisions of this
paragraph (d)(5)(B).
(C) Subject to the provisions of this paragraph (d)(5)(C), from and after
the date on which shares of Class B Common Stock are transferred to the
stockholders of The Limited in a Tax-Free Spin-Off, (i) each share of Class A
Common Stock shall be convertible at the option of the holder thereof into one
share of Class B Common Stock on the date on which any person (other than The
Limited or any of its consolidated subsidiaries) or any group of persons (other
than a group composed of The Limited and/or one or more of its consolidated
subsidiaries) agreeing to act together for the purpose of acquiring, holding,
voting or disposing of shares of Class B Common Stock, shall make an offer,
which the Board of
8
Directors determines in its sole discretion to be "bona fide", to holders of
Class B Common Stock to purchase 5% or more of the issued and outstanding shares
of such Class B Common Stock for cash or a combination of cash and other
securities or property and (ii) each share of Class B Common Stock shall be
convertible at the option of the holder thereof into one share of Class A Common
Stock on the date on which any person (other than The Limited or any of its
consolidated subsidiaries) or any group of persons (other than a group composed
of The Limited and/or one or more of its consolidated subsidiaries) agreeing to
act together for the purpose of acquiring, holding, voting or disposing of
shares of Class A Common Stock, shall make an offer, which the Board of
Directors determines in its sole discretion to be "bona fide", to holders of
Class A Common Stock to purchase 5% or more of the issued and outstanding shares
of Class A Common Stock for cash or a combination of cash and other securities
or property. The Corporation will provide notice in writing to all holders of
Common Stock of any offer referred to in the foregoing clauses (i) and (ii).
Such notice shall be provided by mailing notice of such offer, first class
postage prepaid, to each holder of the class of Common Stock then entitled to be
converted, at such holder's address as it appears on the transfer books of the
Corporation. The Common Stock shall be convertible under this paragraph
(d)(5)(C) as long as such offer shall remain in effect and shall not be
terminated, rescinded or completed, as determined by the Board of Directors in
its sole discretion. Notwithstanding the foregoing, each share of Common Stock
converted into a share of the other class of Common Stock pursuant to this
paragraph (d)(5)(C) and not purchased pursuant to such offer prior to the
termination, rescission or completion thereof, as determined by the Board of
Directors in its sole discretion, shall automatically be reconverted into a
share of Common Stock of the class from which it was converted pursuant to this
paragraph (d)(5)(C) upon the earliest to occur of the termination, rescission or
completion of such offer, as so determined by the Board of Directors.
9
Any conversion pursuant to this paragraph (d)(5)(C) may be effected at the
office of the Corporation or any transfer agent for the Common Stock and at such
other place or places, if any, as the Board of Directors may designate. Upon
conversion pursuant to this paragraph (d)(5)(C), the Corporation shall make no
payment or adjustment on account of dividends accrued or in arrears on Common
Stock surrendered for conversion or on account of any dividends on Common Stock
issuable on such conversion. Before any holder of Common Stock shall be
entitled to convert the same into any other class of stock pursuant to this
paragraph (d)(5)(C), such holder shall surrender the certificate or certificates
for such Common Stock at the office of said transfer agent (or other place as
provided above). Such certificate(s), if the Corporation shall so request,
shall be duly endorsed to the Corporation or in blank or accompanied by proper
instruments of transfer to the Corporation or in blank (such endorsements or
instruments of transfer to be in form satisfactory to the Corporation). Such
certificate(s) shall be accompanied by a written notice to the Corporation at
said office stating that such holder elects to convert all or a specified number
of Common Stock represented by such certificate(s) in accordance with this
paragraph (d)(5)(C) and stating the name(s) in which such holder desires the
certificate(s) representing the stock to be issued. Such written notice shall
also state the name(s) of the person(s) making the offer entitling such holder
to convert such Common Stock. The Corporation will, as soon as practicable
after deposit of the certificate(s) for the class of Common Stock to be
converted, accompanied by the written notice and the statements prescribed
above, issue and deliver at the office of said transfer agent (or other place as
provided above) to the person for whose account such Common Stock was so
surrendered, or to such person's nominee or nominees, a certificate or
certificates for the number of shares of such other class of Common Stock to
which such holder shall be entitled as aforesaid.
Any certificate of Common Stock issued in connection with a conversion
pursuant to this paragraph (d)(5)(C) shall bear a legend substantially to the
effect of the last sentence
10
of the first subparagraph of this paragraph (d)(5)(C) until such certificate
shall be transferred to the person(s) making the offer entitling a holder of
Common Stock to convert such Common Stock pursuant to this paragraph (d)(5)(C),
or the nominee or nominees of such person(s).
Any conversion pursuant to this paragraph (d)(5)(C) shall be deemed to have
been made as of the date of surrender of the Common Stock to be converted; and
the person or persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such Common Stock on such date.
(D) The Corporation will pay any and all documentary, stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
one class of Common Stock on the conversion of shares of the other class of
Common Stock pursuant to this paragraph (d)(5); provided, however, that the
-------- -------
Corporation shall not be required to pay any tax which may be payable in respect
of any registration of transfer involved in the issue or delivery of shares of
one class of Common Stock in a name other than that of the registered holder of
the other class of Common Stock converted, and no such issue or delivery shall
be made unless and until the person requesting such issue 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.
(E) Concurrently with any conversion of one class of Common Stock into the
other class of Common Stock effected pursuant to paragraphs (d)(5)(A) and (B)
above and, in the case of a conversion pursuant to paragraph (d)(5)(C) above,
concurrently with the purchase of shares so converted, each share of a class of
Common Stock that is converted (i) shall be retired and canceled and shall not
be reissued and (ii) shall proportionally decrease the number of shares of
Common Stock of such class designated hereby. The Secretary of the Corporation
shall be, and hereby is, authorized and directed to file with the Secretary of
State of the State of Delaware one or more Certificates of Decrease of
Designated Shares
11
to record any such decrease in designated shares of Common Stock. No
undesignated shares of Common Stock shall be designated shares of Class B Common
Stock following an automatic conversion of shares of Class B Common Stock
pursuant to paragraph (d)(5)(B) above.
(F) Immediately upon the effectiveness of this Amended and Restated
Certificate of Incorporation each share of common stock of the Corporation, par
value $.10 per share, that is issued and outstanding immediately prior to such
effectiveness, shall be changed into and reclassified as 43,000 shares of Class
B Common Stock.
Section 3. Preferred Stock.
---------------
(a) Series and Limits of Variations between Series. Any unissued or
----------------------------------------------
treasury shares of the Preferred Stock may be issued from time to time in one or
more series for such consideration as may be fixed from time to time by the
Board of Directors and each share of a series shall be identical in all respects
with the other shares of such series, except that, if the dividends thereon are
cumulative, the date from which they shall be cumulative may differ. Before any
shares of Preferred Stock of any particular series shall be issued, a
certificate shall be filed with the Secretary of State of Delaware setting forth
the designation, rights, privileges, restrictions, and conditions to be attached
to the Preferred Stock of such series and such other matters as may be required,
and the Board of Directors shall fix and determine, and is hereby expressly
empowered to fix and determine, in the manner provided by law, the particulars
of the shares of such series (so far as not inconsistent with the provisions of
this ARTICLE FOURTH applicable to all series of Preferred Stock), including, but
not limited to, the following:
(1) the distinctive designation of such series and the number of shares
which shall constitute such series, which number may be increased (except where
otherwise provided by the Board of Directors in creating such series) or
decreased (but not below the number of shares thereof then outstanding) from
time to time by like action of the Board of Directors;
12
(2) the annual rate of dividends payable on shares of such series, the
conditions upon which such dividends shall be payable and the date from which
dividends shall be cumulative in the event the Board of Directors determines
that dividends shall be cumulative;
(3) whether such series shall have voting rights, in addition to the voting
rights provided by law and, if so, the terms of such voting rights;
(4) whether such series shall have conversion privileges and, if so, the
terms and conditions of such conversion, including, but not limited to,
provision for adjustment of the conversion rate upon such events and in such
manner as the Board of Directors shall determine;
(5) whether or not the shares of such series shall be redeemable and, if
so, the terms and conditions of such redemption, including the date or dates
upon or after which they shall be redeemable, and the amount per share payable
in case of redemption, which amount may vary under different conditions and at
different redemption dates;
(6) whether such series shall have a sinking fund for the redemption or
purchase of shares of that series and, if so, the terms and amount of such
sinking fund;
(7) the rights of the shares of such series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, and the
relative rights of priority, if any, of payment of shares of that series; and
(8) any other relative rights, preferences and limitations of such series.
Section 4. No Preemptive Rights. Except as otherwise set forth above in
--------------------
this ARTICLE FOURTH, no holder of shares of this Corporation of any class shall
be entitled, as such, as a matter of right, to subscribe for or purchase shares
of any class now or hereafter authorized, or to purchase or subscribe for
securities convertible into or exchangeable for shares of the Corporation or to
which there shall be attached
13
or appertain any warrants or rights entitling the holders thereof to purchase or
subscribe for shares.
FIFTH.
-----
Section 1. Amendment of Bylaws by Directors. In furtherance and not in
--------------------------------
limitation of the powers conferred by statute, the Board of Directors is
expressly authorized to make, repeal, alter, amend and rescind the bylaws of the
Corporation.
Section 2. Amendment of Bylaws by the Stockholders. The bylaws shall not
---------------------------------------
be made, repealed, altered, amended or rescinded by the stockholders of the
Corporation except by the vote of not less than 75 percent of the outstanding
shares of the Corporation entitled to vote thereon. Any amendment to the
Certificate of Incorporation which shall contravene any bylaw in existence on
the record date of the stockholders meeting at which such amendment is to be
voted upon by the stockholders shall require the vote of not less than 75
percent of the outstanding shares entitled to vote thereon.
SIXTH.
-----
Section 1. Classified Board. Effective immediately upon the issuance of
----------------
more than 1,000 shares of Common Stock of the Corporation, the Board of
Directors (exclusive of directors to be elected by the holders of any one or
more series of Preferred Stock voting separately as a class or classes) shall be
divided into three classes, Class A, Class B, and Class C. The number of
directors in each class shall be the whole number contained in the quotient
arrived at by dividing the authorized number of directors by three, and if a
fraction is also contained in such quotient, then if such fraction is one-third,
the extra director shall be a member of Class A and if the fraction is two-
thirds, one of the extra directors shall be a member of Class A and the other
shall be a member of Class B. Each director shall serve for a term ending on
the date of the third annual meeting following the annual meeting at which such
director was elected; provided, however, that the directors first elected to
Class A shall serve for a term ending on the date of the annual meeting next
following the end of the calendar year 1996, the directors first elected to
Class B shall serve for a term ending on the date of the second annual meeting
next following the end of the
14
calendar year 1996, and the directors first elected to Class C shall serve for a
term ending on the date of the third annual meeting next following the end of
the calendar year 1996. Notwithstanding the foregoing formula provisions, in
the event that, as a result of any change in the authorized number of directors,
the number of directors in any class would differ from the number allocated to
that class under the formula provided in this ARTICLE SIXTH immediately prior to
such change, the following rules shall govern:
(a) each director then serving as such shall nevertheless continue as a
director of the class of which such director is a member until the expiration of
his current term, or his prior death, resignation or removal;
(b) at each subsequent election of directors, even if the number of
directors in the class whose term of office then expires is less than the number
then allocated to that class under said formula, the number of directors then
elected for membership in that class shall not be greater than the number of
directors in that class whose term of office then expires, unless and to the
extent that the aggregate number of directors then elected plus the number of
directors in all classes then duly continuing in office does not exceed the then
authorized number of directors of the Corporation;
(c) at each subsequent election of directors, if the number of directors in
the class whose term of office then expires exceeds the number then allocated to
that class under said formula, the Board of Directors shall designate one or
more of the directorships then being elected as directors of another class or
classes in which the number of directors then serving is less than the number
then allocated to such other class or classes under said formula;
(d) in the event of the death, resignation or removal of any director who
is a member of a class in which the number of directors serving immediately
preceding the creation of such vacancy exceeded the number then allocated to
that class under said formula, the Board of Directors shall designate the
vacancy thus created as a vacancy in another class in which the number of
directors then serving is less than the
15
number then allocated to such other class under said formula;
(e) In the event of any increase in the authorized number of directors, the
newly created directorships resulting from such increase shall be apportioned by
the Board of Directors to such class or classes as shall, so far as possible,
bring the composition of each of the classes into conformity with the formula in
this ARTICLE SIXTH, as it applies to the number of directors authorized
immediately following such increase; and
(f) designation of directorships or vacancies into other classes and
apportionments of newly created directorships to classes by the Board of
Directors under the foregoing items (c), (d) and (e) shall, so far as possible,
be effected so that the class whose term of office is due to expire next
following such designation or apportionment shall contain the full number of
directors then allocated to said class under said formula.
Notwithstanding any of the foregoing provisions of this ARTICLE SIXTH, each
director shall serve until his successor is elected and qualified or until his
death, resignation or removal.
Section 2. Election by Holders of Preferred Stock. During any period when
--------------------------------------
the holders of any Preferred Stock or any one or more series thereof, voting as
a class, shall be entitled to elect a specified number of directors, by reason
of dividend arrearages or other provisions giving them the right to do so, then
and during such time as such right continues (i) the then otherwise authorized
number of directors shall be increased by such specified number of directors,
and the holders of such Preferred Stock or such series thereof, voting as a
class, shall be entitled to elect the additional directors so provided for,
pursuant to the provisions of such Preferred Stock or series; (ii) each such
additional director shall serve for such term, and have such voting powers, as
shall be stated in the provisions pertaining to such Preferred Stock or series;
and (iii) whenever the holders of any such Preferred Stock or series thereof are
divested of such rights to elect a specified number of directors, voting as a
class, pursuant to the provisions of such Preferred Stock or series, the terms
of office of all directors elected by the holders of
16
such Preferred Stock or series, voting as a class pursuant to such provisions or
elected to fill any vacancies resulting from the death, resignation or removal
of directors so elected by the holders of such Preferred Stock or series, shall
forthwith terminate and the authorized number of directors shall be reduced
accordingly.
Section 3. Ballots. Elections of directors at an annual or special
-------
meeting of stockholders need not be by written ballot unless the bylaws of the
Corporation shall provide otherwise.
Section 4. Elimination of Certain Personal Liability of Directors. A
------------------------------------------------------
director of this Corporation shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of any fiduciary duty as a
director to the fullest extent permitted by Delaware Law.
SEVENTH. After the issuance of more than 1,000 shares of Common Stock of
-------
the Corporation, no action shall be taken by the stockholders except at an
annual or special meeting of stockholders.
EIGHTH. The Board of Directors of the Corporation, when evaluating any
------
offer of another party to (1) make a tender or exchange offer for any equity
security of the Corporation, (2) merge or consolidate the Corporation with
another corporation, or (3) purchase or otherwise acquire all or substantially
all of the properties and assets of the Corporation, shall in connection with
the exercise of its judgment in determining what is in the best interests of the
Corporation and its stockholders, give due consideration to all relevant
factors, including without limitation the social and economic effects on the
employees, customers, suppliers and other constituents of the Corporation and
its subsidiaries and on the communities in which the Corporation and its
subsidiaries operate or are located.
NINTH. Any director may be removed at any annual or special
-----
stockholders' meeting upon the affirmative vote of not less than 75 percent of
the outstanding shares of voting stock of the Corporation at that time entitled
to vote thereon; provided, however, that such director may be removed only for
cause and shall receive a copy of the charges against him, delivered to him
personally or by mail at his last
17
known address at least 10 days prior to the date of the stockholders' meeting;
provided further, that directors who shall have been elected by the holders of a
series or class of Preferred Stock, voting separately as a class, shall be
removed only pursuant to the provisions establishing the rights of such series
or class to elect such directors.
TENTH.
-----
Section 1. Amendment of Certain Articles. The provisions set forth in this
-----------------------------
ARTICLE TENTH and in ARTICLES FIFTH, SIXTH, Section 1, SEVENTH, EIGHTH, NINTH,
ELEVENTH, TWELFTH and THIRTEENTH may not be amended, altered, changed, or
repealed in any respect unless such amendment, alteration, change or repealing
is approved by the affirmative vote of not less than 75 percent of the
outstanding shares of the Corporation entitled to vote thereon; provided that
with respect to any proposed amendment, alteration or change to this Amended and
Restated Certificate of Incorporation, or repealing of any provision of this
Amended and Restated Certificate of Incorporation, which would amend, alter or
change the powers, preferences or special rights of the shares of Class A Common
Stock or Class B Common Stock so as to affect them adversely, the affirmative
vote of not less than 75 percent of the outstanding shares affected by the
proposed amendment, voting as a separate class, shall be required in addition to
the vote otherwise required pursuant to this ARTICLE TENTH; and provided,
--------
further, that with respect to any amendment, alteration or change to, or
-------
repealing of, any provision of ARTICLE ELEVENTH, the affirmative vote of not
less than 75 percent of the outstanding shares of the Corporation entitled to
vote thereon, other than shares held by the Interested Person (if any) seeking
or proposing to effect any transaction involving the Corporation or any
subsidiary of the Corporation, shall be required in addition to the vote
otherwise required pursuant to this ARTICLE TENTH.
Section 2. Amendments Generally. Subject to the provisions of Section 1
--------------------
of this ARTICLE TENTH, the Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Amended and Restated
Certificate of Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred on stockholders herein are granted subject to
this reservation.
18
ELEVENTH.
--------
Section 1. Vote Required for Certain Business Combinations. The
-----------------------------------------------
affirmative vote of not less than 75 percent of the outstanding shares of
"Voting Stock" (as hereinafter defined) held by stockholders other than the
"Interested Person" (as hereinafter defined) seeking to effect a "Business
Combination" (as hereinafter defined) shall be required for the approval or
authorization of any Business Combination with any Interested Person; provided
--------
that the provisions of this ARTICLE ELEVENTH shall not apply to any Business
Combination, and such Business Combination shall require only such affirmative
vote, if any, as is required by law or otherwise, if such Business Combination
shall have been approved by a majority (whether such approval is made prior or
subsequent to the acquisition of Beneficial Ownership of the Voting Stock that
caused the Interested Person to become an Interested Person) of the Continuing
Directors (as hereinafter defined).
Section 2. Definitions. Certain words and terms as used in this ARTICLE
-----------
ELEVENTH shall have the meanings given to them by the definitions and
descriptions in this Section.
(a) Business Combination. The term "Business Combination" shall mean (a)
--------------------
any merger or consolidation of the Corporation or a subsidiary of the
Corporation with or into an Interested Person, (b) any sale, lease, exchange,
transfer or other disposition, including without limitation, a mortgage or any
other security device, of all or any "Substantial Part" (as hereinafter defined)
of the assets either of the Corporation (including without limitation, any
voting securities of a subsidiary) or of a subsidiary of the Corporation to an
Interested Person, (c) any merger or consolidation of an Interested Person with
or into the Corporation or a subsidiary of the Corporation, (d) any sale, lease,
exchange, transfer or other disposition, including without limitation, a
mortgage or other security device, of all or any Substantial Part of the assets
of an Interested Person to the Corporation or a subsidiary of the Corporation,
(e) the issuance or transfer by the Corporation or any subsidiary of the
Corporation of any securities of the Corporation or a subsidiary of the
Corporation to an Interested Person, (f) any reclassification of securities,
recapitalization or other comparable transaction
19
involving the Corporation that would have the effect of increasing the voting
power of any Interested Person with respect to Voting Stock of the Corporation,
and (g) any agreement, contract or other arrangement providing for any of the
transactions described in this definition of Business Combination.
(b) Interested Person. The term "Interested Person" shall mean and include
-----------------
any individual, corporation, partnership or other person or entity which,
together with its "Affiliates" and "Associates" (as defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934 as in
effect at the date of the adoption of this ARTICLE ELEVENTH by the stockholders
of the Corporation), "Beneficially Owns" (as defined in Rule 13d-3 of the
General Rules and Regulations under the Securities Exchange Act of 1934 as in
effect at the date of the adoption of this ARTICLE ELEVENTH by the stockholders
of the Corporation) in the aggregate five percent or more of the outstanding
Voting Stock of the Corporation, and any Affiliate or Associate of any such
individual, corporation, partnership or other person or entity. Without
limitation, any share of Voting Stock of the Corporation that any Interested
Person has the right to acquire at any time (notwithstanding that Rule 13d-3
deems such shares to be beneficially owned only if such right may be exercised
within 60 days) pursuant to any agreement, or upon exercise of conversion
rights, warrants or options, or otherwise, shall be deemed to be Beneficially
Owned by the Interested Person and to be outstanding for purposes of this
definition. An Interested Person shall be deemed to have acquired a share of
the Voting Stock of the Corporation at the time when such Interested Person
became the Beneficial Owner thereof.
(c) Voting Stock. The term "Voting Stock" shall mean all of the
------------
outstanding shares of Common Stock of the Corporation and any outstanding shares
of Preferred Stock entitled to vote on each matter on which the holders of
record of Common Stock shall be entitled to vote, and each reference to a
proportion of shares of Voting Stock shall refer to such proportion of the votes
entitled to be cast by such shares.
(d) Substantial Part. The term "Substantial Part" shall mean more than 20
----------------
percent of the fair market value as determined by two-thirds of the Continuing
Directors of the total consolidated assets
20
of the Corporation and its subsidiaries taken as a whole as of the end of its
most recent fiscal year ended prior to the time the determination is being made.
(e) Continuing Director. The term "Continuing Director" shall mean a
-------------------
Director who was a member of the Board of Directors of the Corporation
immediately prior to the time that the Interested Person involved in a Business
Combination became an Interested Person, or a Director who was elected or
appointed to fill a vacancy after the date the Interested Person became an
Interested Person by a majority of the then-current Continuing Directors;
provided, that with respect to The Limited, the term "Continuing Director" shall
--------
mean a Director who was a member of the Board of Directors of the Corporation
immediately following the consummation of the initial public offering of the
Corporation's Class A Common Stock in a transaction registered under the
Securities Act of 1933, as amended (the "IPO"), or a Director who was elected or
appointed to fill a vacancy after the IPO by a majority of the then-current
Continuing Directors.
TWELFTH.
-------
Section 1. In anticipation that the Corporation will cease to be a wholly
owned subsidiary of The Limited, but that The Limited will remain a stockholder
of the Corporation, and in anticipation that the Corporation and The Limited may
engage in the same or similar activities or lines of business and have an
interest in the same areas of corporate opportunities, and in recognition of (i)
the benefits to be derived by the Corporation through its continued contractual,
corporate and business relations with The Limited (including service of officers
and directors of The Limited as officers and directors of the Corporation) and
(ii) the difficulties attendant to any director, who desires and endeavors fully
to satisfy such director's fiduciary duties, in determining the full scope of
such duties in any particular situation, the provisions of this ARTICLE TWELFTH
are set forth to regulate, define and guide the conduct of certain affairs of
the Corporation as they may involve The Limited and its officers and directors,
and the powers, rights, duties and liabilities of the Corporation and its
officers, directors and stockholders in connection therewith.
21
Section 2. Except as The Limited may otherwise agree in writing,
(a) The Limited shall not have a duty to refrain from engaging directly or
indirectly in the same or similar business activities or lines of business as
the Corporation, and
(b) neither The Limited nor any officer or director thereof shall be liable
to the Corporation or its stockholders for breach of any fiduciary duty by
reason of any such activities of The Limited or of such person's participation
therein.
In the event that The Limited acquires knowledge of a potential transaction or
matter that may be a corporate opportunity for both The Limited and the
Corporation, The Limited shall have no duty to communicate or offer such
corporate opportunity to the Corporation and shall not be liable to the
Corporation or its stockholders for breach of any fiduciary duty as a
stockholder of the Corporation or controlling person of a stockholder by reason
of the fact that The Limited pursues or acquires such corporate opportunity for
itself, directs such corporate opportunity to another person or entity, or does
not communicate information regarding, or offer, such corporate opportunity to
the Corporation.
Section 3. In the event that a director, officer or employee of the
Corporation who is also a director, officer or employee of The Limited acquires
knowledge of a potential transaction or matter that may be a corporate
opportunity for the Corporation and The Limited (whether such potential
transaction or matter is proposed by a third-party or is conceived of by such
director, officer or employee of the Corporation), such director, officer or
employee shall be entitled to offer such corporate opportunity to the
Corporation or The Limited as such director, officer or employee deems
appropriate under the circumstances in his sole discretion, and no such
director, officer or employee shall be liable to the Corporation or its
stockholders for breach of any fiduciary duty or duty of loyalty or failure to
act in (or not opposed to) the best interests of the Corporation or the
derivation of any improper personal benefit by reason of the fact that (i) such
director, officer or employee offered such corporate opportunity to The Limited
(rather than the Corporation) or did not communicate information
22
regarding such corporate opportunity to the Corporation or (ii) The Limited
pursues or acquires such corporate opportunity for itself or directs such
corporate opportunity to another person or does not communicate information
regarding such corporate opportunity to the Corporation.
Section 4. Any person or entity purchasing or otherwise acquiring any
interest in any shares of capital stock of the Corporation shall be deemed to
have notice of and to have consented to the provisions of this ARTICLE TWELFTH.
Section 5. For purposes of this ARTICLE TWELFTH and ARTICLE THIRTEENTH
only, (i) the term "Corporation" shall mean the Corporation and all
corporations, partnerships, joint ventures, associations and other entities in
which the Corporation beneficially owns (directly or indirectly) fifty percent
or more of the outstanding voting stock, voting power or similar voting
interests, and (ii) the term "The Limited" shall mean The Limited and all
corporations, partnerships, joint ventures, associations and other entities
(other than the Corporation, defined in accordance with clause (i) of this
Section 5) in which The Limited beneficially owns (directly or indirectly) fifty
percent or more of the outstanding voting stock, voting power or similar voting
interests.
Section 6. Notwithstanding anything in this Certificate of Incorporation
to the contrary, the foregoing provisions of this ARTICLE TWELFTH shall expire
on the date that The Limited ceases to own beneficially Common Stock
representing at least 20% of the number of outstanding shares of Common Stock of
the Corporation and no person who is a director or officer of the Corporation is
also a director or officer of The Limited. Neither the alteration, amendment,
change or repeal of any provision of this ARTICLE TWELFTH nor the adoption of
any provision of this Amended and Restated Certificate of Incorporation
inconsistent with any provision of this ARTICLE TWELFTH shall eliminate or
reduce the effect of this ARTICLE TWELFTH in respect of any matter occurring, or
any cause of action, suit or claim that, but for this ARTICLE TWELFTH, would
accrue or arise, prior to such alteration, amendment, repeal or adoption.
23
Section 7. The provisions of this ARTICLE TWELFTH are in addition to the
provisions of ARTICLE SIXTH, Section 5, and ARTICLE THIRTEENTH.
THIRTEENTH.
----------
Section 1. No contract, agreement, arrangement or transaction (or any
amendment, modification or termination thereof) between the Corporation and The
Limited or any Related Entity (as defined below) or between the Corporation and
one or more of the directors or officers of the Corporation, The Limited or any
Related Entity, shall be void or voidable solely for the reason that The
Limited, any Related Entity or any one or more of the officers or directors of
the Corporation, The Limited or any Related Entity are parties thereto, or
solely because any such directors or officers are present at or participate in
the meeting of the Board of Directors or committee thereof which authorizes the
contract, agreement, arrangement, transaction, amendment, modification or
termination or solely because his or their votes are counted for such purpose,
but any such contract, agreement, arrangement or transaction (or any amendment,
modification or termination thereof) shall be governed by the provisions of this
Amended and Restated Certificate of Incorporation, the Corporation's Bylaws,
Delaware Law and other applicable law. For purposes of this ARTICLE THIRTEENTH,
(i) the term "Related Entities" means one or more directors of this Corporation,
or one or more corporations, partnerships, associations or other organizations
in which one or more of its directors have a direct or indirect financial
interest and (ii) the terms the "Corporation" and "The Limited" have the
meanings set forth in ARTICLE TWELFTH, Section 5.
Section 2. Directors of the Corporation who are also directors or officers
of The Limited or any Related Entity may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or of a committee that
authorizes or approves any such contract, agreement, arrangement or transaction
(or amendment, modification or termination thereof). Outstanding shares of
Common Stock owned by The Limited and any Related Entities may be counted in
determining the presence of a quorum at a meeting of stockholders that
authorizes or approves any such contract, agreement, arrangement or transaction
(or amendment, modification or termination thereof).
24
Section 3. Neither The Limited nor any officer or director thereof or
Related Entity shall be liable to the Corporation or its stockholders for breach
of any fiduciary duty or duty of loyalty or failure to act in (or not opposed
to) the best interests of the Corporation or the derivation of any improper
personal benefit by reason of the fact that The Limited or an officer of
director thereof or such Related Entity in good faith takes any action or
exercises any rights or gives or withholds any consent in connection with any
agreement or contract between The Limited or such Related Entity and the
Corporation. No vote cast or other action taken by any person who is an
officer, director or other representative of The Limited or such Related Entity,
which vote is cast or action is taken by such person in his capacity as a
director of this Corporation, shall constitute an action of or the exercise of a
right by or a consent of The Limited or such Related Entity for the purpose of
any such agreement or contract.
Section 4. Any person or entity purchasing or otherwise acquiring any
interest in any shares of capital stock of the Corporation shall be deemed to
have notice of and to have consented to the provisions of this ARTICLE
THIRTEENTH.
Section 5. For purposes of this ARTICLE THIRTEENTH, any contract,
agreement, arrangement or transaction with any corporation, partnership, joint
venture, association or other entity in which the Corporation beneficially owns
(directly or indirectly) fifty percent or more of the outstanding voting stock,
voting power or similar voting interests, or with any officer or director
thereof, shall be deemed to be a contract, agreement, arrangement or transaction
with the Corporation.
Section 6. Neither the alteration, amendment, change or repeal of any
provision of this ARTICLE THIRTEENTH nor the adoption of any provision
inconsistent with any provision of this ARTICLE THIRTEENTH shall eliminate or
reduce the effect of this ARTICLE THIRTEENTH in respect of any matter occurring,
or any cause of action, suit or claim that, but for this ARTICLE THIRTEENTH,
would accrue or arise, prior to such alteration, amendment, change, repeal or
adoption.
25
Section 7. The provisions of this ARTICLE THIRTEENTH are in addition to
the provisions of ARTICLE SIXTH, Section 5, and ARTICLE TWELFTH.
26
IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation,
having been duly adopted by the written consent of the sole stockholder of the
Corporation in accordance with the provisions of Sections 228, 242 and 245 of
the General Corporation Law of the State of Delaware, has been executed this
27th day of August 1996.
ABERCROMBIE & FITCH CO.
By: /s/ Samuel P. Fried
-----------------------
Name: Samuel P. Fried
Title: Secretary
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