UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 17, 2012
MModal Inc.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 001-35069 | 98-0676666 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
| 9009 Carothers Parkway Franklin, Tennessee |
37067 | |||
| (Address of Principal Executive Offices) | (Zip Code) | |||
(866) 295-4600
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Introduction
As previously reported, on July 2, 2012, MModal Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with Legend Parent, Inc., a Delaware corporation (“Parent”), and Legend Acquisition Sub, Inc., a Delaware corporation and a wholly owned direct subsidiary of Parent (“Merger Sub”). Parent and Merger Sub are affiliates of One Equity Partners V, L.P. (“OEP”). Pursuant to the Merger Agreement, upon the terms and subject to the conditions thereof, on July 17, 2012, Merger Sub commenced a tender offer (the “Offer”) to purchase all of the outstanding shares of common stock, $0.10 par value per share, of the Company (“Shares”) at a purchase price of $14.00 per Share (the “Offer Price”), net to the seller in cash, without interest thereon and less any applicable withholding taxes.
On August 15, 2012, the Company and OEP announced the results of the Offer. On August 17, 2012, Merger Sub accepted the Shares tendered in the Offer for payment and paid for such Shares and the Company and OEP announced the completion of the Offer. Also on August 17, 2012, because Merger Sub then owned more than 90% of the outstanding Shares, in accordance with the Merger Agreement and as permitted by applicable law, Merger Sub merged with and into the Company (the “Merger”). At the effective time of the Merger (the “Effective Time”), (i) the Company was the surviving corporation in the Merger and now is a wholly owned direct subsidiary of Parent and (ii) each outstanding Share not validly tendered, accepted for payment and paid for pursuant to the Offer, other than Shares held by the Company as treasury stock, by Parent or Merger Sub, or by stockholders of the Company who validly exercise their appraisal rights in accordance with Section 262 of the Delaware General Corporation Law, as amended (the “DGCL”), was converted into the right to receive the Offer Price, net to the seller thereof in cash, without interest thereon and less any applicable withholding taxes. Following the Effective Time, the Shares will be delisted from The NASDAQ Global Select Market, and will be deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Company will no longer file periodic reports with the Securities and Exchange Commission (the “SEC”) on account of the Shares.
| Item 1.01. | Entry into a Material Definitive Agreement. |
| 1. | Senior Secured Credit Facility |
On August 17, 2012, in connection with the Merger, the Company entered into a credit agreement (the “Credit Agreement”) and related security and other agreements for (a) a $445.0 million senior secured term loan facility (the “Term Loan Facility”) and (b) a $75.0 million senior secured revolving loan facility (the “Revolving Facility” and together with the Term Loan Facility, the “Senior Credit Facilities”) with certain lenders, Royal Bank of Canada, as administrative agent, swing line lender and L/C issuer, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as syndication agent, SunTrust Bank, ING Capital LLC and Sumitomo Mitsui Banking Corporation, as documentation agents.
In addition to borrowings upon prior notice, the Revolving Facility includes borrowing capacity in the form of letters of credit of up to $10.0 million at any time outstanding and borrowings on same-day notice, referred to as swing line loans, of up to the lesser of (a) $10.0 million and (b) the commitment of the lenders under the Revolving Facility, at any time outstanding. The Credit Agreement also permits the Company to request additional tranches of term loans and/or revolving commitments and/or increase commitments under the Revolving Facility and/or the Term Loan Facility in an aggregate amount not to exceed the sum of (a) $75.0 million plus (b) $50.0 million, subject to compliance on a pro forma basis with a net secured leverage ratio. The availability of such additional capacity is subject to various conditions.
Interest Rate and Fees. Borrowings under the Senior Credit Facilities bear interest at a rate per annum equal to, at the Company’s option, either (a) a base rate determined by reference to the highest of (i) the federal funds effective rate plus 1/2 of 1.00%, (ii) the prime rate of Royal Bank of Canada, and (iii) the one-month Eurodollar rate (as defined in the Credit Agreement) plus 1.00 % or (b) a LIBOR rate determined by Royal Bank of Canada, equal to the offered rate that appears on the page of the Reuters LIBOR01 screen that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars with a term equivalent to the interest period selected by the Company, in each case plus an applicable margin. In addition to paying interest on outstanding principal under the Senior Credit Facilities, the Company is required to pay customary agency fees, a commitment fee in respect of the unutilized commitments under the Revolving Facility and certain fees in respect of letters of credit issued under the Revolving Facility.
Amortization and Final Maturity. The Term Loan Facility requires the Company to make scheduled quarterly payments of $1.1 million in repayment of the Term Loan Facility, beginning with the quarter ending December 31, 2012, with the balance due on the seventh anniversary of the closing date. The Revolving Facility does not require any scheduled amortization. Any principal amount outstanding under the Revolving Facility will be due and payable on the fifth anniversary of the closing date.
Guarantees and Security. All obligations under the Senior Credit Facilities are unconditionally guaranteed by Parent and the Company’s direct and indirect domestic subsidiaries. All obligations under the Senior Credit Facilities, and the guarantees thereof, are secured, subject to certain exceptions, by substantially all of the assets of the Company and each of the guarantors, including:
| • | a first-priority pledge of all of the capital stock of each domestic subsidiary and first-tier foreign subsidiary of the Company or any guarantor (which pledge, in the case of the voting capital stock of foreign subsidiaries, is limited to 65% of such capital stock); and |
| • | a first-priority security interest in substantially all of the Company’s and the guarantors’ tangible and intangible assets. |
In connection with the foregoing arrangements, the guarantors entered into a Continuing Guaranty, dated August 17, 2012, and the Company and the guarantors entered into a Security Agreement, dated August 17, 2012.
Certain Other Provisions. The Credit Agreement contains a number of covenants that, among other things, include restrictions on incurring indebtedness, creating liens, mergers, dispositions of property, dividends and stock repurchases, acquisitions and other investments and entering into new material lines of business substantially different from those conducted by the Company and its subsidiaries on the date of the agreement.
Parent is also subject to a passive holding company covenant that limits its ability to engage in certain activities.
The Senior Credit Facilities also include a financial maintenance covenant, which requires the Company to maintain not more than a specified maximum total net leverage ratio at the end of each quarter.
In addition to the foregoing negative and financial covenants, the credit agreement governing the Senior Credit Facilities also contains certain customary representations and warranties, affirmative covenants and events of default (including upon a change of control).
| 2. | 10.75% Senior Notes Due 2020 |
On August 17, 2012, Merger Sub issued $250 million aggregate principal amount of its 10.75% senior notes due 2020 (the “Notes”) under an indenture, dated as of August 17, 2012 (the “Original Indenture”), among Merger Sub, Parent, as guarantor, and U.S. Bank, National Association, as trustee (the “Trustee”). The Notes were initially sold pursuant to a Purchase Agreement, dated August 14, 4012, by and among Merger Sub, Parent and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several initial purchasers named therein. On August 17, 2012, following the Effective Time, the Company and certain guarantors (the “Guarantors”), entered into a supplemental indenture with the Trustee (the “Supplemental Indenture,” and together with the Original Indenture, the “Indenture”) pursuant to which the Company assumed the obligations of Merger Sub under the Indenture and the Notes and the Guarantors guaranteed the Notes.
The Notes will mature on August 15, 2020. The Company will pay interest on the Notes on February 15 and August 15 of each year, commencing on February 15, 2013. Interest on the Notes will accrue at a rate of 10.75% per annum.
Guarantees. The Notes are guaranteed on an unsecured senior basis by Parent and the Company’s domestic subsidiaries that guarantee the Senior Credit Facilities.
Ranking. The Notes and related guarantees (the “Guarantees”) will rank senior in right of payment to all of the Company’s and the Guarantors’ existing and future subordinated indebtedness and will rank equally in right of payment with all of the Company’s and the Guarantors’ existing and future senior indebtedness, including the Senior
Credit Facilities. The Notes and the Guarantees will be effectively subordinated to all of the Company’s and Guarantors’ existing and future secured debt, including the Senior Credit Facilities, to the extent of the value of the assets securing such debt. The Notes and the Guarantees will be structurally subordinated to all debt and other liabilities, including trade payables, of any of the Company’s subsidiaries that do not guarantee the Notes.
Mandatory Redemption; Offers to Purchase; Open Market Purchases. The Company is not required to make any mandatory redemption or sinking fund payments with respect to the Notes. However, under certain circumstances, the Company may be required to offer to purchase Notes as described under “Change of Control” and “Asset Sale Proceeds” below. The Company may at any time and from time to time purchase Notes in the open market or otherwise.
Optional Redemption. Prior to August 15, 2015, the Company may redeem the Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus accrued and unpaid interest to, but not including, the applicable redemption date and an Applicable Premium (as defined below) as of the date of redemption, subject to the rights of holders on the relevant record date to receive interest due on the relevant interest payment date. The “Applicable Premium” means, with respect to any Note on any redemption date, the greater of: (a) 1.0% of the principal amount of such Note; and (b) the excess, if any, of (i) the present value at such redemption date of (A) the redemption price of such Note at August 15, 2015 (such redemption price being set forth in the table below), plus (B) all required interest payments due on such Note through August 15, 2015 (excluding accrued but unpaid interest to, but excluding, the redemption date), computed using a discount rate equal to the applicable treasury rate as of such redemption date plus 50 basis points; over (ii) the then outstanding principal amount of the Note.
On and after August 15, 2015, the Company may redeem the Notes at its option, in whole at any time or in part from time to time, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest to, but not including, the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on August 15 of the years indicated below:
| Redemption Period |
Price | |
| 2015 |
108.063% | |
| 2016 |
105.375% | |
| 2017 |
102.688% | |
| 2018 and thereafter |
100.000% |
In addition, at any time and from time to time on or prior to August 15, 2015, the Company may redeem in the aggregate up to 35% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of any additional Notes) with the net cash proceeds of one or more equity offerings by the Company at a redemption price (expressed as a percentage of principal amount) of 110.750%, plus accrued and unpaid interest to, but not including, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided that at least 50% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of any additional Notes) must remain outstanding after each such redemption; provided further that such redemption occurs within 90 days after the closing of such equity offering.
Change of Control. If a change of control occurs, unless the Company has exercised its right to redeem all the Notes as described above under “Optional Redemption,” each holder will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such holder’s Notes at a purchase price in cash equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase, subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date.
Asset Sale Proceeds. If the Company or any of its restricted subsidiaries causes or makes certain asset sales, the Company or its restricted subsidiary generally must, within specific periods of time, either prepay, repay or repurchase certain of its or its restricted subsidiaries’ indebtedness or make an offer to purchase a principal amount of the Notes and certain other debt equal to the excess net cash proceeds, or invest the net cash proceeds from such sales in additional assets. The purchase price of the Notes will be 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase.
Covenants. The Indenture contains covenants limiting the ability of the Company or any of its restricted subsidiaries to, among other things:
| • | incur additional indebtedness or issue preferred stock; |
| • | pay dividends on or make other distributions on or repurchase the Company’s capital stock or make other restricted payments; |
| • | create restrictions on the payment of dividends or other amounts from Parent’s restricted subsidiaries to the Company’s other restricted subsidiaries; |
| • | make loans or investments; |
| • | enter into certain transactions with affiliates; |
| • | create liens; |
| • | designate the Company’s subsidiaries as unrestricted subsidiaries; and |
| • | sell certain assets or merge with or into other companies or otherwise dispose of all or substantially all of the Company’s or any Guarantor’s assets. |
Events of Default. The Indenture also provides for customary events of default, including, without limitation, payment defaults, covenant defaults, cross acceleration defaults to certain other indebtedness in excess of specified amounts, certain events of bankruptcy and insolvency and judgment defaults in excess of specified amounts. If any such event of default occurs and is continuing under the Indenture, the Trustee or the holders of at least 25% in principal amount of the total outstanding Notes may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes issued under the Indenture to be due and payable immediately.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01 is incorporated by reference herein.
| Item 3.01. | Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. |
As a result of the Offer and the Merger, the Company no longer fulfills the numerical listing requirements of The NASDAQ Stock Market LLC (“Nasdaq”). On August 17, 2012, the Company notified Nasdaq of its intent to remove its Shares from listing on The NASDAQ Global Select Market and requested that Nasdaq file a Notification of Removal from Listing and/or Registration on Form 25 with the SEC to delist and deregister the Shares, which Nasdaq filed on such date. The Company intends to file with the SEC a Form 15 under the Exchange Act, requesting the deregistration of the Shares and the suspension of the Company’s reporting obligations under Sections 13 and 15(d) of the Exchange Act. Trading of the Shares on The NASDAQ Global Select Market will be suspended as of the opening of trading on August 20, 2012.
| Item 3.02. | Unregistered Sale of Equity Securities. |
In order to complete the Merger, on August 17, 2012, pursuant to Section 1.3 of the Merger Agreement, Merger Sub exercised its top-up option (the “Top-Up Option”) to purchase additional Shares, and the Company issued 46,610,191 Shares (the “Top-Up Shares”) to Merger Sub, at a price of $14.00 per Share. Merger Sub paid for the Top-Up Shares by delivery of cash equal to the aggregate par value of the Top-Up Shares and a promissory note having a principal amount equal to the aggregate purchase price pursuant to the Top-Up Option less the amount paid in cash. The Top-Up Shares, when added to the number of Shares directly or indirectly owned by Parent and Merger Sub at the time of exercise of the Top-Up Option, represented one Share more than 90% of the Shares outstanding immediately after the issuance of the Top-Up Shares, which ensured that Merger Sub and the Company could effect the Merger under applicable Delaware law. The Top-Up Shares were issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an exemption from registration pursuant to Section 4(2) of the Securities Act, as a transaction by an issuer not involving a public offering.
| Item 3.03. | Material Modification to Rights of Security Holders. |
The information set forth in Items 3.01, 5.01 and 5.03 of this Current Report on Form 8-K (this “Current Report”) is incorporated herein by reference in response to this Item 3.03.
At the Effective Time, each outstanding Share immediately prior to the Effective Time (other than Shares held by the Company as treasury stock, by Parent or Merger Sub, or by stockholders of the Company who validly exercise their appraisal rights in accordance with Section 262 of the DGCL) was converted into the right to receive the Offer Price, net to the seller in cash, without interest thereon and less any applicable withholding taxes.
| Item 5.01. | Changes in Control of Registrant. |
As a result of the acceptance of and payment for Shares in the Offer on August 17, 2012, a change of control of the Company occurred. Upon the effectiveness of the Merger, the Company became a wholly owned direct subsidiary of Parent. The disclosure under Item 3.01 is incorporated herein by reference. The total amount of the consideration payable in connection with the change of control transaction was approximately $1.1 billion. The funds used to consummate the Offer and the Merger were from an equity contribution by OEP, proceeds received in connection with the Senior Credit Facilities and the issuance of the Notes, as described in Item 1.01 above, and available cash from the Company’s balance sheet.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
In connection with the Merger and as contemplated by the Merger Agreement, each member of the Company’s board of directors prior to the Merger voluntarily resigned from the Company’s board of directors effective as of the Effective Time (with the exception of Mr. Roger L. Davenport). Each such director resigned pursuant to the terms of the Merger Agreement and not because of any disagreement with the Company. Pursuant to the terms of the Merger Agreement, on August 17, 2012, each of Mr. Gregory A. Belinfanti, Mr. Christian Ahrens and Mr. Matthew P. Hughes became a member of the Company’s board of directors as of the Effective Time. Accordingly, as of the Effective Time, the Company’s board of directors consisted of Mr. Davenport, Mr. Belinfanti, Mr. Ahrens and Mr. Hughes.
| Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Change of Fiscal Year. |
Pursuant to the Merger Agreement, as of the Effective Time, the Company’s certificate of incorporation in effect immediately prior to the Effective Time was amended and restated (the “Amended and Restated Certificate of Incorporation”) to be in the form of the certificate of incorporation set forth as Exhibit A to the Merger Agreement. In addition, as of the Effective Time, the Company’s bylaws in effect immediately prior to the Effective Time were amended and restated to be identical to the bylaws of Merger Sub, as in effect immediately prior to the Effective Time, with such bylaws having been further amended and restated (the “Amended and Restated Bylaws”) in accordance with section 5.7 of the Merger Agreement.
Copies of the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws are filed as Exhibits 3.1 and 3.2 to this Current Report and are incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits.
| Exhibit No. |
Description of Exhibit | |
| 3.1 | Amended and Restated Certificate of Incorporation of MModal Inc. | |
| 3.2 | Amended and Restated Bylaws of MModal Inc. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MModal Inc. | ||||||
| By: | /s/ Kathryn F. Twiddy | |||||
| Date: August 17, 2012 | Kathryn F. Twiddy, Chief Legal Officer | |||||
Exhibit Index
| Exhibit No. |
Description of Exhibit | |
| 3.1 | Amended and Restated Certificate of Incorporation of MModal Inc. | |
| 3.2 | Amended and Restated Bylaws of MModal Inc. | |
Exhibit 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MMODAL INC.
1. Name. The name of the corporation is MModal Inc. (the “Corporation”).
2. Registered Office and Agent. The address of the Corporation’s registered office in the State of Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of the Corporation’s registered agent at such address is The Corporation Trust Company.
3. Purpose. The purposes for which the Corporation is formed are to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “Delaware General Corporation Law”) and to possess and exercise all of the powers and privileges granted by such law and any other law of the State of Delaware.
4. Authorized Capital. The aggregate number of shares of stock which the Corporation shall have authority to issue is One Thousand (1,000) shares of common stock, each with a par value of $0.01 per share.
a. Voting Rights. Except as otherwise provided in this Certificate of Incorporation or as otherwise required by applicable law, the holders of common stock shall be entitled to one vote per share on all matters to be voted on by the Corporation’s stockholders. No stockholder of the Corporation shall be entitled to exercise any right of cumulative voting.
b. Dividends. As, if and when dividends are declared or paid on the shares of common stock, whether in cash, property or securities of the Corporation, the holders of common stock shall be entitled to participate in such dividends ratably on a per share basis.
c. Liquidation. The holders of common stock shall be entitled to participate ratably on a per share basis in all distributions to the holders of common stock as a result of the liquidation, dissolution or winding up of the Corporation.
5. Bylaws. The original bylaws of the Corporation (the “Bylaws”) shall be adopted by the sole incorporator. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors of the Corporation is expressly authorized thereafter to adopt, amend or repeal the Bylaws without any action on the part of the stockholders; provided that any Bylaw adopted or amended by the Board of Directors, and any powers thereby conferred, may be amended, altered or repealed by the stockholders of the Corporation.
6. Elections of Directors. Unless and except to the extent that the Bylaws shall so require, the election of directors of the Corporation need not be by written ballot.
7. Right to Amend. The Corporation reserves the right to amend any provision contained in this Certificate as the same may from time to time be in effect in the manner now or hereafter prescribed by law, and all rights conferred on stockholders or others hereunder are subject to such reservation.
8. Limitation on Liability. The directors of the Corporation shall be entitled to the benefits of all limitations on the liability of directors generally that are now or hereafter become available under the Delaware General Corporation Law, and the Corporation shall indemnify all persons whom it is permitted to indemnify to the fullest extent permitted by Section 145 of the Delaware General Corporation Law, as amended from time to time. Without limiting the generality of the foregoing, no director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. The Corporation may, in the sole discretion of the Board of Directors of the Corporation, provide indemnification to such of the employees and agents of the Corporation to such extent and to such effect as the Board of Directors shall determine to be appropriate and authorized by the Delaware General Corporation Law.
The Corporation shall indemnify, advance expenses, and hold harmless, to the fullest extent permitted by applicable law as it presently exists and may hereafter by amended, any person (and the heirs, executors or administrators of such person) (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except for claims for indemnification (following the final disposition of such Proceeding) or advancement of expenses not paid in full, the Corporation shall be required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person against the Corporation or any of its direct or indirect subsidiaries only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board of Directors of the Corporation. The right to indemnification conferred in this Section 8 shall also include the right to be paid by the Corporation the expenses incurred in connection with any such Proceeding in advance of its final disposition to the fullest extent authorized by the Delaware General Corporation Law.
The Corporation may purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her or on his or her behalf and incurred by him or her in any such capacity, or arising out of his or her status as such,
whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of this Section 8, provided that such insurance is available on acceptable terms, which determination shall be made by the Board of Directors.
The rights and authority conferred in this Section 8 shall not be exclusive of any other right which any person may otherwise have or hereafter acquire.
Any amendment, repeal or modification of this Section 8 shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.
9. Business Combinations with Interested Stockholders. The Corporation elects not to be governed by Section 203 of the Delaware General Corporation Law.
* * * * *
Exhibit 3.2
AMENDED AND RESTATED
BYLAWS
OF
MMODAL INC.
(the “Corporation”)
ARTICLE I
STOCKHOLDERS
| 1.1 | Meetings. |
1.1.1 Place. Meetings of the stockholders shall be held at such place as may be designated by the board of directors.
1.1.2 Annual Meeting. An annual meeting of the stockholders for the election of directors and for other business shall be held on such date and at such time as may be fixed by the board of directors.
1.1.3 Special Meetings. Special meetings of the stockholders may be called at any time by the president, or the board of directors, or the holders of a majority of the outstanding shares of stock of the Corporation entitled to vote at the meeting.
1.1.4 Quorum. The presence, in person or by proxy, of the holders of a majority of the outstanding shares of stock of the Corporation entitled to vote on a particular matter shall constitute a quorum for the purpose of considering such matter.
1.1.5. Voting Rights. Except as otherwise provided herein, in the certificate of incorporation or by law, every stockholder shall have the right at every meeting of stockholders to one vote for every share standing in the name of such stockholder on the books of the Corporation which is entitled to vote at such meeting.
1.1.6. Stockholder Action by Written Consent. Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
ARTICLE II
DIRECTORS
2.1 Number and Term. The board of directors shall have authority to (i) determine the number of directors that constitute the board of directors and (ii) fix the terms of office of the directors.
| 2.2 | Meetings. |
2.2.1 Place. Meetings of the board of directors shall be held at such place as may be designated by the board of directors or in the notice of the meeting.
2.2.2 Regular Meetings. Regular meetings of the board of directors shall be held at such times as the board of directors may designate. Notice of regular meetings need not be given.
2.2.3 Special Meetings. Special meetings of the board of directors may be called by the president or any two members of the board of directors on three days’ notice to each director, either personally or by mail (including electronic mail), telegram, telephone or facsimile transmission.
2.2.4 Quorum. A majority of all the directors in office shall constitute a quorum for the transaction of business at any meeting.
2.2.5 Voting. Except as otherwise provided herein, in the certificate of incorporation or by law, the vote of a majority of the directors present at any meeting at which a quorum is present shall constitute the act of the board of directors.
2.2.6 Committees. The board of directors may, by resolution adopted by a majority of the whole board of directors, designate one or more committees, each committee to consist of one or more directors and such alternate members (also directors) as may be designated by the board of directors. Unless otherwise provided herein, in the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another director to act at the meeting in the place of any such absent or disqualified member. Except as otherwise provided herein, in the certificate of incorporation or by law, any such committee shall have and may exercise the powers of the full board of directors to the extent provided in the resolution of the board of directors directing the committee.
ARTICLE III
OFFICERS
3.1 Election. At its first meeting after each annual meeting of the stockholders, the board of directors shall elect a president, a secretary, a treasurer and such other officers as it deems advisable.
3.2 Authority, Duties and Compensation. The officers shall have such authority, perform such duties and serve for such compensation as may be determined by resolution of the board of directors. Except as otherwise provided by the resolution of the board of directors, (i) the president shall be the chief executive officer of the Corporation, shall have general supervision over the business and operations of the Corporation, may perform any act and execute any instrument for the conduct of such business and operations and shall preside at all meetings of the board of directors and stockholders, (ii) the other officers shall have the duties customarily related to their respective offices and (iii) any vice president, or vice presidents in the order determined by the board of directors, shall in the absence of the president have the authority and perform the duties of the president.
ARTICLE IV
INDEMNIFICATION
| 4.1 | Indemnification Respecting Third Party Claims. |
4.1.1 Indemnification of Directors and Officers. The Corporation, to the fullest extent and in the manner permitted by the laws of the State of Delaware as in effect from time to time, shall indemnify in accordance with the following provisions of this Article IV any person (a “Covered Person”) who was or is made a party to, is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding (including any appeal thereof), whether civil, criminal, administrative, regulatory or investigative in nature (other than an action by or in the right of the Corporation), by reason of the fact that such Covered Person is or was a director or officer of the Corporation, or, at a time when he or she was a director or officer of the Corporation, is or was serving at the request of, or to represent the interests of, the Corporation as a director, officer, partner, member, trustee, fiduciary, employee or agent (a “Subsidiary Officer”) of another corporation, partnership, joint venture, limited liability company, trust, employee benefit plan or other enterprise, including any charitable or not-for-profit public service organization or trade association (an “Related Entity”), against expenses (including attorneys’ fees and disbursements), costs, judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by such Covered Person in connection with such action, suit or proceeding if such Covered Person acted in good faith and in a manner such Covered Person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful;
provided, however, that the Corporation shall not be obligated to indemnify against any amount paid in settlement unless the Corporation has consented to such settlement. The termination of any action, suit or proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the Covered Person did not act in good faith and in a manner which such Covered Person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, that such Covered Person had reasonable cause to believe that his or her conduct was unlawful. Notwithstanding anything to the contrary in the foregoing provisions of this paragraph, a Covered Person shall not be entitled, as a matter of right, to indemnification pursuant to this paragraph against costs or expenses incurred in connection with any action, suit or proceeding commenced by such Covered Person against the Corporation or any Related Entity or any person who is or was a director, officer, partner, member, trustee, fiduciary, employee or agent of the Corporation or a Subsidiary Officer of any Related Entity in their capacity as such, but such indemnification may be provided by the Corporation in a specific case as permitted by Section 4.6 of these bylaws; provided that such Covered Person shall, to the fullest extent permitted by law, be entitled to indemnification in connection with any action, suit or proceeding commenced by such Covered Person to enforce his or her rights under this Article IV.
4.1.2 Indemnification of Employees and Agents. The Corporation may indemnify any employee or agent of the Corporation in the manner and to the same or a lesser extent that it shall indemnify a Covered Person under Section 4.1.1.
| 4.2 | Indemnification Respecting Derivative Claims. |
4.2.1 Indemnification of Directors and Officers. The Corporation, to the fullest extent and in the manner permitted by the laws of the State of Delaware as in effect from time to time, shall indemnify in accordance with the following provisions of this Article IV any Covered Person who was or is made a party to, is threatened to be made a party to or is involved in any threatened, pending or completed action or suit (including any appeal thereof) brought by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such Covered Person is or was a director or officer of the Corporation, or, at a time when he or she was a director or officer of the Corporation, is or was serving at the request of, or to represent the interests of, the Corporation as a Subsidiary Officer of a Related Entity against expenses (including attorneys’ fees and disbursements) and costs actually and reasonably incurred by such Covered Person in connection with such action or suit if such Covered Person acted in good faith and in a manner such Covered Person reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such Covered Person shall have been adjudged to be liable to the Corporation unless, and only to the extent that, the Court of Chancery of the State of Delaware or the court in which such judgment was rendered shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such Covered Person is fairly and reasonably entitled to indemnity for such expenses and costs as the Court of Chancery of the State of Delaware or such other court shall deem proper. Notwithstanding anything to the contrary in the foregoing provisions of this paragraph, a Covered Person shall not be entitled, as a matter of right, to indemnification
pursuant to this paragraph against costs and expenses incurred in connection with any action or suit brought by or in the right of the Corporation commenced by such Covered Person, but such indemnification may be provided by the Corporation in any specific case as permitted by Section 4.6 of these bylaws; provided that such Covered Person shall, to the fullest extent permitted by law, be entitled to indemnification in connection with any action, suit or proceeding commenced by such Covered Person to enforce his or her rights under this Article IV.
4.2.2 Indemnification of Employees and Agents. The Corporation may indemnify any employee or agent of the Corporation in the manner and to the same or a lesser extent that it shall indemnify any Covered Person under Section 4.2.1.
4.3 Determination of Entitlement to Indemnification. Any indemnification to be provided under Section 4.1 or 4.2 of these bylaws (unless ordered by a court of competent jurisdiction) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification is proper under the circumstances because such Covered Person has met the applicable standard of conduct set forth in such paragraph. Such determination shall be made in accordance with any applicable procedures authorized by the board of directors and in accordance with the Delaware General Corporation Law. In the event a request for indemnification is made after final disposition of the proceeding in question by any Covered Person referred to in Section 4.1.1 or 4.2.1 of these bylaws, the Corporation shall use its reasonable efforts to cause such determination to be made not later than ninety (90) days after such request is made.
| 4.4 | Right to Indemnification in Certain Circumstances. |
4.4.1 Indemnification Upon Successful Defense. Notwithstanding the other provisions of this Article IV, to the extent that a director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 4.1 or 4.2 of these bylaws, or in defense of any claim, issue or matter therein, or in any action, suit or proceeding brought by the director or officer to enforce rights to indemnification or advancement of expenses and costs granted pursuant to this Article IV, such Covered Person shall, to the fullest extent permitted bylaw, be indemnified against expenses (including attorneys’ fees and disbursements) and costs actually and reasonably incurred by such Covered Person in connection therewith.
4.4.2 Indemnification for Service As a Witness. To the extent any Covered Person who is or was a director or officer of the Corporation has served or prepared to serve as a witness in any action, suit or proceeding (whether civil, criminal, administrative, regulatory or investigative in nature), including any investigation by any legislative body or any regulatory or self-regulatory body by which the Corporation’s business is regulated, by reason of his or her service as a director or officer of the Corporation or his or her service as a Subsidiary Officer of a Related Entity at a time when he or she was a director or officer of the Corporation (assuming such Covered Person is or was serving at the request of, or to represent the interests of, the Corporation as a Subsidiary Officer of such Related Entity), but excluding service as a witness in
an action or suit commenced by such person or to which such person is named a party (unless such expenses were incurred with the approval of the board of directors, a committee thereof or the Chairman, a Vice Chairman, the President or the Chief Executive Officer of the Corporation), the Corporation shall, to the fullest extent permitted by law, indemnify such Covered Person against out-of-pocket costs and expenses (including attorneys’ fees and disbursements) actually and reasonably incurred by such Covered Person in connection therewith and shall use its reasonable efforts to provide such indemnity within forty-five (45) days after receipt by the Corporation from such Covered Person of a statement requesting such indemnification, averring such service and reasonably evidencing such expenses and costs; it being understood, however, that the Corporation shall have no obligation under this Article IV to compensate such Covered Person for such Covered Person’s time or efforts so expended. The Corporation may indemnify any employee or agent of the Corporation to the same or a lesser extent as it may indemnify any director or officer of the Corporation pursuant to the foregoing sentence of this paragraph.
| 4.5 | Advances of Expenses. |
4.5.1 Advances to Directors and Officers. To the fullest extent not prohibited by applicable law, expenses and costs incurred by any Covered Person referred to in Section 4.1.1 or 4.2.1 of these bylaws in defending a civil, criminal, administrative, regulatory or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking in writing by or on behalf of such Covered Person to repay such amount if it shall ultimately be determined that such Covered Person is not entitled to be indemnified in respect of such costs and expenses by the Corporation as authorized by this Article IV.
4.5.2 Advances to Employees and Agents. To the fullest extent not prohibited by applicable law, expenses and costs incurred by any person referred to in Sections 4.1.2 or 4.2.2 of these bylaws in defending a civil, criminal, administrative, regulatory or investigative action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the board of directors, a committee thereof or an officer of the Corporation authorized to so act by the board of directors, upon receipt of an undertaking in writing by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation in respect of such costs and expenses as authorized by this Article IV.
| 4.6 | Indemnification Not Exclusive. |
4.6.1 The provision of indemnification to or the advancement of expenses and costs to any Covered Person under this Article IV, or the entitlement of any Covered Person to indemnification or advancement of expenses and costs under this Article IV, shall not limit or restrict in any way the power of the Corporation to indemnify or advance expenses and costs to such Covered Person in any other way permitted by law or be deemed exclusive of, or invalidate, any right to which any Covered Person seeking indemnification or advancement of expenses and costs may be entitled under any law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such Covered Person’s capacity as an officer, director, employee or agent of the Corporation and as to action in any other capacity.
4.6.2 Given that certain jointly indemnifiable claims (as defined below) may arise due to the service of one or more Covered Persons to or at the request of the Corporation and also one or more indemnitee-related entities (as defined below), the Corporation shall be fully and primarily responsible for the payment to each Covered Person in respect of indemnification or advancement of expenses in connection with any such jointly indemnifiable claims, pursuant to and in accordance with the terms of this Article IV, irrespective of any right of recovery the Covered Person may have from the indemnitee-related entities. Under no circumstance shall the Corporation be entitled to any right of subrogation or contribution by the indemnitee-related entities and no right of advancement or recovery the Covered Person may have from the indemnitee-related entities shall reduce or otherwise alter the rights of the Covered Person or the obligations of the Corporation hereunder. In the event that any of the indemnitee-related entities shall make any payment to the Covered Person in respect of indemnification or advancement of expenses with respect to any jointly indemnifiable claim, the indemnitee-related entity making such payment shall be subrogated to the extent of such payment to all of the rights of recovery of the Covered Person against the Corporation, and the Covered Person shall execute all papers reasonably required and shall do all things that may be reasonably necessary to secure such rights, including the execution of such documents as may be necessary to enable the indemnitee-related entities effectively to bring suit to enforce such rights. Each of the indemnitee-related entities shall be third-party beneficiaries with respect to this Section 4.6.2 of these bylaws, entitled to enforce this Section 4.6.2 of these bylaws.
For purposes of this Section 4.6.2 of these bylaws, the following terms shall have the following meanings:
4.6.2.1 The term “indemnitee-related entities” means any corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (other than the Corporation or any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise for which the Covered Person has agreed, on behalf of the Corporation or at the Corporation’s request, to serve as a director, officer, employee or agent and which service is covered by the indemnity described herein) from whom a Covered Person may be entitled to indemnification or advancement of expenses with respect to which, in whole or in part, the Corporation may also have an indemnification or advancement obligation.
4.6.2.2 The term “jointly indemnifiable claims” shall be broadly construed and shall include, without limitation, any action, suit or proceeding for which the Covered Person shall be entitled to indemnification or advancement of expenses from both the indemnitee-related entities and the Corporation pursuant to Delaware law, any agreement or certificate of incorporation, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or comparable organizational documents of the Corporation or the indemnitee-related entities, as applicable.
| 4.7 | Corporate Obligations; Reliance. |
4.7.1 The rights granted pursuant to the provisions of this Article IV shall vest at the time a person becomes a director or officer of the Corporation and shall be deemed to create a binding contractual obligation on the part of the Corporation to the persons who from time to time are elected as officers or directors of the Corporation, and such persons in acting in their capacities as officers or directors of the Corporation or Subsidiary Officers of any Related Entity shall be entitled to rely on such provisions of this Article IV without giving notice thereof to the Corporation.
4.7.2 Without the consent of any affected Covered Person, the Corporation shall not, in connection with the settlement or resolution of any claim alleged against it in any action, suit or proceeding, seek or consent to entry of an order that releases, bars or otherwise affects the rights of indemnification and advancement of expenses provided in this Article IV.
4.8 Amendment or Repeal. Any repeal or modification of the provisions of this Article IV shall not adversely affect any right or protection hereunder of any Covered Person in respect of any proceeding (regardless of when such proceeding is first threatened, commenced or completed) arising out of, or related to, any act or omissions occurring prior to the time of such repeal or modification.
4.9 Accrual of Claims; Successors. The indemnification provided or permitted under the foregoing provisions of this Article IV shall or may, as the case may be, apply in respect of any expense, cost, judgment, fine, penalty or amount paid in settlement, whether or not the claim or cause of action in respect thereof accrued or arose before or after the effective date of such provisions of this Article IV. The right of any Covered Person who is or was a director, officer, employee or agent of the Corporation or a Subsidiary Officer to indemnification or advancement of expenses as provided under the foregoing provisions of this Article IV shall continue after he or she shall have ceased to be a director, officer, employee, agent or Subsidiary Officer and shall inure to the benefit of the heirs, distributees, executors, administrators and other legal representatives of such Covered Person.
4.10 Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of, or to represent the interests of, the Corporation as a Subsidiary Officer of any Related Entity, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article IV or applicable law.
4.11 Definitions of Certain Terms. For purposes of this Article IV, (a) references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed into the Corporation in a consolidation or merger if such corporation would have been permitted (if its corporate existence had continued)
under applicable law to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request, or to represent the interests of, such constituent corporation as a Subsidiary Officer of any Related Entity shall stand in the same position under the provisions of this Article IV with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued; (b) references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; (c) references to “serving at the request of the Corporation” shall include any service as a director, officer, partner, member, trustee, fiduciary, employee or agent of the Corporation or as a Subsidiary Officer of any Related Entity which service imposes duties on, or involves services by, such director, officer, partner, member, trustee, fiduciary, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and (d) a Covered Person who acted in good faith and in a manner such Covered Person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of the Corporation” as referred to in this Article IV.
ARTICLE V
TRANSFER OF SHARE CERTIFICATES
Transfers of share certificates and the shares represented thereby shall be made on the books of the Corporation only by the registered holder or by duly authorized attorney. Transfers shall be made only on surrender of the share certificate or certificates.
ARTICLE VI
AMENDMENTS
These bylaws may be amended or repealed at any regular or special meeting of the board of directors by vote of a majority of all directors in office or at any annual or special meeting of stockholders by vote of holders of a majority of the outstanding stock entitled to vote.