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| 8-K - GLOBAL FOOD TECHNOLOGIES, INC. | v168771_8k.htm |
CERTIFICATE
OF DESIGNATION OF PREFERENCES AND RIGHTS
PREFERRED
STOCK - SERIES C
------------------------------------
GLOBAL
FOOD TECHNOLOGIES, INC.
(Pursuant
to Section 151 of the General
Corporation
Law of the State of Delaware)
------------------------------------
Global
Food Technologies, Inc., a Delaware corporation (the "Corporation"), acting
pursuant to Section 151 of the Delaware General Corporation Law, as amended,
does hereby submit the following Certificate of Designation of Preferences and
Rights.
FIRST: The name of
the Corporation is Global Food Technologies, Inc.
SECOND: Pursuant to a meeting
of the Board of Directors on September 23, 2009, the following resolutions were
adopted, which resolutions are still in full force and effect and are not in
conflict with any provisions of the Certificate of Incorporation or By-Laws of
the Corporation:
WHEREAS,
the Certificate of Incorporation (“Certificate”) of the Corporation authorizes
preferred stock consisting of 20,000,000 shares, par value $.0001 per share (the
"Preferred Stock"), issuable from time to time in one or more
series;
WHEREAS,
the Certificate authorizes the Board of Directors to issue Preferred Stock and
establish and fix the number of shares to be included in any series of Preferred
Stock and the designation, rights, preferences, powers, restrictions and
limitations of the shares of such series;
WHEREAS,
it is the desire of the Board of Directors establish and fix the number of
shares to be included in a new series of Preferred Stock and the designation,
rights, preferences and limitations of the shares of such new
series;
NOW,
THEREFORE BE IT, RESOLVED, that pursuant to Article Four of the Certificate,
there is hereby established a new series consisting of 1,500,000 shares of
Preferred Stock of the Corporation to be known as the Series C Preferred Stock
(“Series C Preferred”). The voting powers, rights, preferences, privileges and
restrictions granted to and imposed upon the Series C Preferred are as
follows:
1. Designation
of Class.
(a) The
designation of the class of Preferred Stock created hereby shall be
Series C
Preferred Stock, par value $.0001 per share (the “Series C Preferred” and
together with any and all other series of Preferred Stock, the “Preferred
Stock”).
(b)
The number of shares of Series C Preferred may be decreased (but
not below
the number of shares then outstanding) or increased by a certificate executed,
acknowledged, filed and recorded in accordance with the Delaware General
Corporation Law, as amended (“DGCL”), setting forth a statement that a specified
decrease or increase, as the case may be, thereof had been authorized and
directed by a resolution or resolutions adopted by the Board of Directors
pursuant to authority expressly vested in it by the provisions of the
Certificate of Incorporation (“Certificate”) of the Corporation.
2. Liquidation
Preference.
(a) In the
event of any liquidation or winding up of the Corporation, the holders of Series
C Preferred will be entitled to receive in preference to holders of Common Stock
(and pari passu with any other outstanding series of Preferred Stock, unless
such Preferred Stock specifically has priority over the Series C Preferred), the
amounts set forth below. All remaining proceeds thereafter shall be shared pro
rata by the holders of Common Stock. A consolidation or merger of the
Corporation or sale of all or substantially all of its assets or of a majority
of its capital stock, in all cases only in which the stockholders immediately
prior to such transaction hold less than 50% of the voting power immediately
following such transaction (each a “Liquidation
Event”) shall be deemed to be a liquidation or winding up for purposes of
the liquidation preference.
(i) Each
holder of Series C Preferred shall be entitled to receive, prior and in
preference to any distribution of any of the assets or surplus funds of the
Corporation to the holders of the Common Stock, by reason of their ownership of
such stock, the amount of $4.50 (the “Original Series C
Issue Price”) per share (as adjusted with respect to such shares as set
forth in Section 4(d) below) for each share of Series C Preferred then held by
such holder, plus an amount equal to all accrued but unpaid dividends on such
shares of Series C Preferred (collectively, the “Series C
Preference”). If, upon the occurrence of a Liquidation Event, the assets
and funds available to be distributed among the holders of the Preferred Stock
shall be insufficient to permit the payment to such holders of the full
preferential amount, then the entire assets and funds of the Corporation legally
available for distribution to such holders shall be distributed ratably to all
holders of Preferred Stock (subject to any specific senior liquidation rights of
any series of Preferred Stock) based on the total preferential amount due each
such holder of shares of a series of Preferred Stock.
(ii) After
payment has been made to the holders of Preferred Stock of the full amounts to
which they are entitled, the remaining assets of the Corporation available for
distribution to shareholders shall be distributed ratably among the holders of
Common Stock.
(b) Each
holder of Series C Preferred shall be deemed to have consented to distributions
made by the Corporation in connection with the repurchase of shares of Common
Stock issued to or held by officers, directors, or employees of, or consultants
to, the Corporation or its subsidiaries upon termination of their employment or
services pursuant to agreements (whether now existing or hereafter entered into)
providing for the right of said repurchase at cost between the Corporation and
such persons.
(c) The value
of securities and property paid or distributed pursuant to this Section 2 shall
be computed at fair market value at the time of payment to the Corporation or at
the time made available to shareholders, all as determined by the Board of
Directors in the good faith exercise of its reasonable business judgment,
provided that (i) if such securities are listed on any established stock
exchange or a national market system, their fair market value shall be the
closing sales price for such securities as quoted on such system or exchange (or
the largest such exchange) for the date the value is to be determined (or if
there are no sales for such date, then for the last preceding business day on
which there were sales), as reported in the Wall Street Journal or similar
publication, and (ii) if such securities are regularly quoted by a recognized
securities dealer but selling prices are not reported, their fair market value
shall be the mean between the high bid and low asked prices for such securities
on the date the value is to be determined (or if there are no quoted prices for
such date, then for the last preceding business day on which there were quoted
prices).
(d) Nothing
set forth above shall affect in any way the right of each holder of Series C
Preferred to convert such shares at any time and from time to time into Common
Stock in accordance with Section 4 hereof.
3. Voting
Rights.
Except as otherwise required by law or
hereunder, the holder of each share of Common Stock issued and outstanding shall
have one vote and the holder of each share of Series C Preferred shall be
entitled to the number of votes equal to the number of shares of Common Stock
into which such share of Series C Preferred could be converted at the record
date for determination of the shareholders entitled to vote on such matters, or,
if no such record date is established, at the date such vote is taken or any
written consent of shareholders is solicited, such votes to be counted together
with all other shares of stock of the Corporation having general voting power
and not separately as a class. Fractional votes by the holders of Series C
Preferred shall not, however, be permitted and any fractional voting rights
shall (after aggregating all shares into which shares of Series C Preferred held
by each holder could be converted) be rounded to the nearest whole number (with
one-half being rounded upward). Holders of Common Stock and Series C Preferred
shall be entitled to notice of any shareholders’ meeting in accordance with the
Bylaws of the Corporation.
4. Conversion
Rights.
The
holders of Series C Preferred shall have conversion rights as
follows:
(a) Right to
Convert. Each share of Series C Preferred may be converted into Common
Stock at any time at the option of the holder without payment of any additional
or other consideration into such number of fully-paid and non-assessable shares
of Common Stock as is determined by dividing the Original Series C Issue Price
by the then applicable Conversion Price for such Series C Preferred, determined
as provided below, in effect at the time of conversion. The price at which
shares of Common Stock shall be deliverable upon conversion of the Series C
Preferred (the “Series C
Conversion Price”) shall initially be the Original Series C Issue Price
which shall be $4.50 per share.
(b) Mandatory
Conversion. Each share of Series C Preferred shall be converted into
shares of Common Stock at the then effective applicable Conversion Price, upon
the earlier of: (i) five years from the date the first share of Series C
Preferred is issued, or (ii) the voluntary conversion by holders of more than
50% of the then-outstanding shares of Series C Preferred (each such event is an
“Mandatory
Conversion”). In the event of a conversion of the Series C Preferred
Stock in the case of sub-clause (i) hereof, the stock shall be deemed to have
been converted immediately upon such five-year date. In the case of
sub-clause (ii) hereof, such conversion shall be deemed to have occurred
immediately upon receipt of written consent to conversion of more than 50% of
the then-outstanding shares of Series C Preferred, without any further action
required.
(c) Mechanics of
Conversion. No fractional shares of Common Stock shall be issued upon
conversion of Series C Preferred. In lieu of any fractional shares to which the
holder would otherwise be entitled, the Corporation shall pay cash equal to such
fraction multiplied by the then effective Series C Conversion Price. Before any
holder of Series C Preferred shall be entitled to convert the same into full
shares of Common Stock and to receive certificates therefore, such holder shall
surrender the certificate or certificates therefore, duly endorsed, at the
office of the Corporation or of any transfer agent for the Series C Preferred,
and shall give written notice to the Corporation at such office that he or she
elects to convert the same; provided, however, that in the event of an Mandatory
Conversion pursuant to Section 4(b), the outstanding shares of Series C
Preferred shall be converted automatically without any further action by the
holders of such shares and whether or not the certificates representing such
shares are surrendered to the Corporation or its transfer agent, and provided
further that the Corporation shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon such Mandatory Conversion
unless the certificates evidencing such shares of Series C Preferred are either
delivered to the Corporation or its transfer agent as provided above, or the
holder notifies the Corporation or its transfer agent that such certificates
have been lost, stolen, or destroyed and executes an agreement satisfactory to
the Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates. The Corporation shall, as soon as practicable
after such delivery, or such agreement and indemnification in the case of a lost
certificate, issue and deliver at such office to such holder of Series C
Preferred, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid and a check payable to
the holder in the amount of any cash amounts payable as the result of a
conversion into fractional shares of Common Stock. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of such surrender of the shares of Series Preferred to be converted, or in the
case of Mandatory Conversion, on the date as set forth in Section
4(b).
(d) Adjustments to Conversion
Price.
(i) Adjustments for
Dividends, Splits, Subdivisions, Combinations, or Consolidation of Common
Stock. If the outstanding shares of Common Stock shall be increased by
stock dividend payable in Common Stock, stock split, subdivision, or other
similar transaction occurring after the filing of this Certificate of
Designation of Rights and Preferences into a greater number of shares of Common
Stock, the Conversion Prices then in effect shall, concurrently with the
effectiveness of such event, be decreased in proportion to the percentage
increase in the outstanding number of shares of Common Stock. If the outstanding
shares of Common Stock shall be decreased by reverse stock split, combination,
consolidation, or other similar transaction occurring after the filing of this
Certificate of Designation of Rights and Preferences into a lesser number of
shares of Common Stock, the Conversion Prices then in effect shall, concurrently
with the effectiveness of such event, be increased in proportion to the
percentage decrease in the outstanding number of shares of Common
Stock.
(ii) No
adjustment shall be made in the event that the Corporation declares a dividend
of convertible securities to holders of Common Stock convertible into Common
Stock (such as options or warrants) if the exercise price for the Common Stock
thereunder is equal to or greater than the fair market value of the Common Stock
as determined by the Board of Directors in accordance with Section
2(c).
(iii)
Adjustments
for Reclassification, Exchange and Substitution. If the Common Stock
issuable upon conversion of the Series C Preferred shall be changed into the
same or a different number of shares of any other class or classes of stock,
whether by capital reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares provided for above), the Conversion Prices
then in effect shall, concurrently with the effectiveness of such reorganization
or reclassification, be proportionately adjusted such that the Series C
Preferred shall be convertible into, in lieu of the number of shares of Common
Stock which the holders would otherwise have been entitled to receive, a number
of shares of such other class or classes of stock equivalent to the number of
shares of Common Stock that would have been subject to receipt by the holders
upon conversion of such Series C Preferred immediately before that
change.
(e) No
Impairment. The Corporation will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation but will at all times in good
faith assist in the carrying out of all the provisions of this Section 4 and in
the taking of all such action as may be necessary or appropriate in order to
protect the conversion rights of the holders of the Preferred Stock against
impairment.
(f) Certificate as to
Adjustments. Upon the occurrence of each adjustment or readjustment of
the Conversion Prices pursuant to this Section 4, the Corporation at its expense
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and furnish to each holder of Preferred Stock a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Corporation shall, upon the
written request of any holder of Series C Preferred, furnish or cause to be
furnished to such holder a like certificate setting forth (i) such adjustments
and readjustments, (ii) the applicable Conversion Price for such series of
Series C Preferred at the time in effect, and (iii) the number of shares of
Common Stock and the amount, if any, of other property which at the time would
be received upon the conversion of such series of Series C Preferred
Stock.
(g) Notices of Record
Date. If the Corporation shall propose at any time:
(i) to
declare any dividend or distribution upon its Common Stock, whether in cash,
property, stock, or other securities, whether or not a regular cash dividend and
whether or not out of earnings or earned surplus;
(ii) to
offer for subscription pro rata to the holders of any class or series of its
stock any additional shares of stock of any class or series or other
rights;
(iii) to
effect any reclassification or recapitalization of its Common Stock outstanding
involving a change in the Common Stock; or
(iv) to
merge or consolidate with or into any other corporation, or sell, lease, or
convey all or substantially all its property or business, or to liquidate,
dissolve, or wind up; then, in connection with each such event, this Corporation
shall send to the holders of the Series C Preferred:
(1) at
least 10 days’ prior written notice of the date on which a record shall be taken
for such dividend, distribution, or subscription rights (and specifying the date
on which the holders of Common Stock shall be entitled thereto) or for
determining rights to vote in respect of the matters referred to in (iii) and
(iv) in this Section 4 (g); and
(2) in
the case of the matters referred to in (iii) and (iv) in this Section 4(g), at
least 10 days’ prior written notice of the date when the same shall take place
(and specifying the date on which the holders of Common Stock shall be entitled
to exchange their Common Stock for securities or other property deliverable upon
the occurrence of such event or the record date for the determination of such
holders if such record date is earlier).
Each such
written notice required or permitted hereunder shall be given in writing and
shall be conclusively deemed effectively given upon personal delivery or
delivery by courier, or on the first business day after transmission if sent by
confirmed facsimile transmission or electronic mail transmission, or five days
after deposit in the United States mail, by registered or certified mail,
postage prepaid. The Corporation’s address for notices is the corporate address
reported in the Corporation’s most recent report filed with the Securities and
Exchange Commission. The Corporation’s Chief Financial Officer shall maintain
the addresses for notices for the holders of the Series C Preferred. A holder of
Series C Preferred may designate to the Corporation a substitute address for
notices. A substituted address shall take effect seven days after notice
thereof. Notices shall be directed to the substitute address after it takes
effect.
(h)
Reservation
of Stock Issuable Upon Conversion. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of the shares of the
Series C Preferred such number of its shares of Common Stock as shall from time
to time be sufficient to effect the conversion of all outstanding shares of
Series C Preferred; and if at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the conversion of all
then outstanding shares of Series C Preferred, the Corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose, including, without limitation, engaging in
best efforts to obtain the requisite shareholder approval of any necessary
amendment to its Certificate of Incorporation.
(i) Status of
Converted Stock. In case any series of Series C Preferred shall be
converted pursuant to this Section 4, the shares so converted shall resume the
status of authorized but unissued shares of Preferred Stock undesignated as to
series.
5. Dividends.
(a) The
holders of the Series C Preferred shall be entitled to receive cash dividends at
a fixed annual rate of $0.36 per share, which shall accrue as set forth in
Section 5(d) below. Dividends on the Series C Preferred shall be
payable, when, as and if declared by the Board of Directors out of assets
legally available for that purpose, quarterly in arrears on February 15, May 15,
August 15 and November 15 of each year (each, a "Dividend Payment Date"),
commencing on the first Dividend Payment Date after the issuance of the Series C
Preferred, or if such date is not a Business Day (as defined below), the next
succeeding Business Day. Each such dividend shall be paid to the
holders of record of the shares of Series C Preferred as they appear on the
share register of the Company on the applicable record date (each, a "Record
Date"), which shall be the first day of the month in which the relevant Dividend
Payment Date falls.
"Business Day" shall mean any day other
than a Saturday or Sunday or a day on which banking institutions in Los Angeles,
California are authorized or required by law or executive order to remain
closed.
(b) Dividends
payable on the Series C Preferred shall be computed on the basis of a 360-day
year with equal 120-day quarters, and, for any period less than one full 120-day
quarter, on the basis of the actual number of days elapsed. In the event that
any date on which a dividend is payable on the Series C Preferred is not a
Business Day, then payment of the dividend payable on such date shall be made on
the next day that is a Business Day (and without any interest or other payment
in respect of any such delay).
(c) No
cash dividends on Series C Preferred shall be authorized by the Board of
Directors of the Corporation or declared or paid or set apart for payment by the
Corporation at such time as the terms and provisions of any agreement of the
Corporation, including any agreement relating to its indebtedness, prohibits
such declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration or payment shall be
restricted or prohibited by law, including applicable provisions of the Delaware
General Corporation Law. In addition, the Board of Directors may rely
upon the recommendation of its President and/or Chief Financial Officer with
respect to determining if the declaration any payment of dividends on the Series
C Preferred would, in such officer’s reasonable judgment, leave the Corporation
with inadequate working capital reserves in light of the Company’s business
strategy.
(d) Notwithstanding
the foregoing, dividends on the Series C Preferred will accrue whether or not
the Corporation has earnings, whether or not there are funds legally available
for the payment of such dividends, whether or not such dividends are declared
and whether or not such dividends are prohibited by agreement. If the Board of
Directors fails to declare a dividend, the dividend shall accumulate until
declared and paid. Accrued but unpaid dividends on the Series C Preferred will
accumulate but will not bear interest.
(e) Unless
full cumulative dividends on the Series C Preferred have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for payment for all past dividend periods and the
then current dividend period, no dividends (other than a dividend payable in
capital stock of the Corporation) shall be declared or paid or set aside for
payment nor shall any other distribution be declared or made upon the Common
Stock, or any other class or series of capital stock of the Corporation ranking
junior to or on a parity with the Series C Preferred as to dividends or upon
liquidation. Holders of Series C Preferred shall not be entitled to any
dividend, whether payable in cash, property or stock, in excess of full
cumulative dividends on the Series C Preferred as provided above. Any dividend
payment made on the Series C Preferred shall first be credited against the
earliest accrued but unpaid dividend due with respect to such shares which
remains payable. Accrued but unpaid dividends on the Series C Preferred will not
bear interest.
(f) Dividends
on the Series C Preferred shall cease to accumulate upon the conversion of the
Series C Preferred.
6. Redemption
Rights.
The
Series C Preferred shall be nonredeemable.
7. Covenants.
In
addition to any other rights provided by law, the Corporation shall not, without
first obtaining the affirmative vote or written consent of the holders of a
majority of the outstanding shares of Series C Preferred, voting as a single
class: amend or repeal any provision of, or add any provision to, the
Corporation’s Certificate of Incorporation or Bylaws if such action would alter
or change the preferences, rights, privileges or powers of, or the restrictions
provided for the benefit of holders of Series C Preferred.
THIRD: This Certificate of
Designation of Preferences and Rights constitutes an
agreement
between the Corporation and all of the holders of the Series C Preferred. It may
be amended by vote of the Board of Directors of the Corporation and the holders
of a majority of the outstanding shares of the Series C Preferred.
IN WITNESS WHEREOF, the
undersigned have executed this Certificate in the
name and
on behalf of Global Food Technologies, Inc. on December 4, 2009, and the
statements contained herein are affirmed as true under penalties of
perjury.
| GLOBAL FOOD TECHNOLOGIES, INC. | |||
|
By:
|
/s/ Keith Meeks | ||
| Keith Meeks | |||
| President | |||
| ATTEST: | |||
|
By:
|
/s/ Marshall F. Sparks | ||
| Marshall F. Sparks | |||
|
CFO
and Secretary
|
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