BARRETT BUSINESS SERVICES, INC.
ARTICLES SUPPLEMENTARY
SERIES A NONCONVERTIBLE, NON-VOTING REDEEMABLE
PREFERRED STOCK
Barrett Business Services, Inc., a Maryland
corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: Under the authority contained
in Article III of the Charter of the Corporation (the “Charter”), the Board of Directors (the “Board”),
by duly adopted resolutions, classified and designated 50,000 shares of authorized but unissued Preferred Stock (as defined in
the Charter), $0.01 par value per share, of the Corporation as shares of Series A Nonconvertible, Non-Voting Redeemable Preferred
Stock (the “Series A Preferred Stock”), with the following preferences or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption, which, upon any restatement
of the Charter, shall become part of Article III of the Charter, with any necessary and appropriate renumbering or relettering
of the sections or subsections hereof.
“Series A Nonconvertible, Non-Voting
Redeemable Preferred Stock
(1) Designation and Number. A series of Preferred
Stock, designated the “Series A Nonconvertible, Non-Voting Redeemable Preferred Stock” (the “Series A Preferred
Stock”), is hereby established. The number of shares of the Series A Preferred Stock shall be 50,000.
(2) Rank. The Series A Preferred Stock shall,
with respect to rights to the payment of dividends and the distributions of assets upon the liquidation, dissolution, or winding
up of the Corporation, rank (a) senior to all classes or series of Common Stock (as defined in the Charter) and any other class
or series of stock of the Corporation if the holders of the Series A Preferred Stock are entitled to receive dividends or amounts
distributable upon the liquidation, dissolution, or winding up of the Corporation or redemption in preference or priority to the
holders of shares of such class or series (the “Junior Stock”); (b) on a parity with any class or series of stock of
the Corporation if the holders of such class or series of stock and the Series A Preferred Stock are entitled to receive dividends
and amounts distributable upon the liquidation, dissolution, or winding up of the Corporation or redemption in proportion to their
respective amounts of accumulated, accrued, and unpaid dividends per share or liquidation preferences, without preference or priority
of one over the other (the “Parity Stock”); and (c) junior to any class or series of stock of the Corporation if holders
of such class or series are entitled to receive dividends and amounts distributable upon the liquidation, dissolution, or winding
up of the Corporation or redemption in preference or priority to the holders of the Series A Preferred Stock (the “Senior
Stock”).
(3) Dividends.
(a) Subject to the preferential rights
of holders of any class or series of Senior Stock, holders of the outstanding shares of Series A Preferred Stock shall be entitled
to receive, when and as authorized by the Board of Directors and declared by the Corporation, out of funds legally available for
the payment of dividends, if applicable, cumulative preferential dividends at the rate of 5% per annum based on the $1,000 liquidation
preference (as may be adjusted in accordance with Section 7) with such rate increasing by 2% on each April 1 beginning April 1,
2013, until all of the outstanding shares of Series A Preferred Stock are redeemed as provided in Section 5. Such dividends shall
accrue from the first date on which any Series A Preferred Stock is issued (the “Original Issue Date”) and shall be
payable semi-annually in arrears on or before March 31 and September 30 of each year (each a “Dividend Payment Date”);
provided, however, that if any Dividend Payment Date is not a Business Day (as defined below), then the dividend which would
otherwise have been payable on such Dividend Payment Date may be paid on the following Business Day with the same force and effect
as if paid on such Dividend Payment Date. Any dividend payable on the Series A Preferred Stock for any partial dividend period
will be computed on the basis of a 360-day year consisting of twelve 30-day months. A “dividend period” shall mean,
with respect to the first “dividend period,” the period from and including the Original Issue Date to and including
the first Dividend Payment Date, and with respect to each subsequent “dividend period,” the period from, but excluding,
a Dividend Payment Date to and including the next succeeding Dividend Payment Date or other date as of which accrued dividends
are to be calculated.
(b) No dividends shall be declared or
paid or funds set apart for the payment of dividends by the Corporation or other distributions on any Common Stock or other Junior
Stock for any period (other than dividends or other distributions payable in shares of Common Stock or other Junior Stock or in
options, warrants or rights to subscribe for or purchase any shares of Common Stock or other Junior Stock and which options, warrants
or rights do not entitle the holder thereof to rights to dividends, amounts distributable upon the liquidation, dissolution, or
winding up of the Corporation or redemption on parity with or senior to the Series A Preferred Stock), and no shares of Common
Stock or other Junior Stock may be repurchased, redeemed or otherwise retired, nor may funds be set apart for such payment, repurchase,
redemption or retirement, unless all accrued and unpaid dividends in respect of the Series A Preferred Stock have been paid or
set apart for such payment on the Series A Preferred Stock for all prior dividend periods.
(c) Dividends shall be payable, at the
sole option of the Corporation, either (i) in cash, (ii) by issuance of additional shares of Series A Preferred Stock (including
fractional shares) having an aggregate Liquidation Preference equal to the amount of the dividend to be paid, or (iii) in any combination
thereof. All dividends paid with respect to shares of Series A Preferred Stock, whether in cash or shares of Series A Preferred
Stock, shall be made pro rata among the holders of Series A Preferred Stock based on the aggregate accrued but unpaid dividends
on the shares held by each such holder. If and when any shares are issued under this Section 3(c) for the payment of accrued dividends,
such shares shall be validly issued and outstanding and fully paid and nonassessable.
(d) No dividends on shares of Series A
Preferred Stock shall be declared by the Corporation or paid or set apart for payment by the Corporation at such time as the terms
and provisions of any existing written agreement between the Corporation and any other party, including any existing agreement
relating to its indebtedness, (i) prohibit or impose any penalty on such declaration, payment or setting apart for payment or (ii)
provide 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.
(e) Notwithstanding the foregoing, dividends
on the Series A Preferred Stock shall accumulate, whether or not the terms and provisions set forth in Section 3(d) hereof at any
time prohibit the current payment of dividends, whether or not there are funds legally available for the payment of such dividends
and whether or not dividends are declared.
(f) Notwithstanding the foregoing, no
dividend will be declared or paid with respect to shares of the Series A Preferred Stock that are redeemed prior to the elapse
of six months from the Original Issue Date (for avoidance of doubt, such date being September 28, 2012).
(g) For purposes of these Articles Supplementary,
“Business Day” shall mean any day on which a bank doing business in the State of Washington is not permitted to be
closed.
(4) Liquidation Preference.
(a) Upon any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation, the holders of the Series A Preferred Stock then outstanding are entitled
to be paid, or have the Corporation declare and set apart for payment, out of the assets of the Corporation legally available for
distribution to its stockholders, before any distribution of assets is made to holders of any Junior Stock, a liquidation preference
per share of Series A Preferred Stock equal to the sum of (i) $1,000.00 (as may be adjusted in accordance with Section 7) and (ii)
all accrued and unpaid dividends (the “Liquidation Preference”).
(b) In the event that, upon any such voluntary
or involuntary liquidation, dissolution or winding up, the available assets of the Corporation are insufficient to pay the full
amount of the Liquidation Preference on all outstanding shares of Series A Preferred Stock and all shares of Parity Stock, then
the holders of the Series A Preferred Stock and all holders of such Parity Stock shall share ratably in any such distribution of
assets in proportion to the full liquidation preference to which they would otherwise be respectively entitled.
(c) After payment of the full amount of
the Liquidation Preference to which they are entitled, the holders of Series A Preferred Stock will have no right or claim to any
of the remaining assets of the Corporation.
(d) Upon the Corporation’s provision
of written notice as to the effective date of any such liquidation, dissolution or winding up of the Corporation, accompanied by
a check in the amount of the full Liquidation Preference to which each record holder of the Series A Preferred Stock is entitled,
the Series A Preferred Stock shall no longer be deemed outstanding shares of stock of the Corporation and all rights of the holders
of such shares will terminate. Such notice shall be given by first class mail, postage pre-paid, to each record holder of the Series
A Preferred Stock at the respective mailing addresses of such holders as the same shall appear on the stock transfer records of
the Corporation.
(e) In determining whether a distribution
(other than upon voluntary or involuntary liquidation), by distribution, redemption or other acquisition of the Corporation’s
equity securities is permitted under Maryland law, no effect shall be given to amounts that would be needed, if the Corporation
were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders whose
preferential rights on dissolution are superior to those receiving the distribution.
(f) The consolidation or merger of the
Corporation with or into any other business enterprise or of any other business enterprise with or into the Corporation, or the
sale, lease or conveyance of all or substantially all of the assets or business of the Corporation, shall not constitute a liquidation,
dissolution or winding up of the Corporation.
(5) Redemption.
(a) Mandatory Redemption. At the earlier
of (such earlier date, the “Mandatory Redemption Date”) (i) the fifth anniversary of the Original Issue Date, or (ii)
a Change of Control (as defined below), the Corporation, to the extent that it has funds legally available therefor shall redeem
all of the outstanding shares of the Series A Preferred Stock for cash at a redemption price per share of Series A Preferred Stock
(the “Redemption Price”) equal to $1,000.00 (as may be adjusted in accordance with Section 7) plus all accrued and
unpaid dividends thereon up to and including the Mandatory Redemption Date.
A “Change of Control” means, after the Original
Issue Date, in one or a series of related transactions:
(i) (A) the acquisition by any person, including
any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), of “beneficial ownership” (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that a person or group shall be deemed to have beneficial ownership of all shares of voting stock that such person
or group has the right to acquire regardless of when such right is first exercisable), directly or indirectly, of stock of the
Corporation entitling that person to exercise more than 50% of the total voting power of all stock of the Corporation entitled
to vote generally in the election of the Corporation’s directors; and (B) following the closing of any transaction referred
to in (A), neither the Corporation nor the acquiring or surviving entity has a class of common securities (or American Depositary
Receipts representing such securities) listed on the New York Stock Exchange (the “NYSE”), the NYSE Amex Equities (the
“NYSE Amex”), or the NASDAQ Stock Market (“NASDAQ”), or listed or quoted on an exchange or quotation system
that is a successor to the NYSE, the NYSE Amex or NASDAQ; or
(ii) the sale, lease or conveyance of all
or substantially all of the assets or business of the Corporation.
(b) Optional Redemption. At any time before
the Mandatory Redemption Date, the Corporation, at its option, may redeem shares of the Series A Preferred Stock, in whole or in
part, for the Redemption Price. If less than all of the outstanding shares of Series A Preferred Stock are to be redeemed, the
shares of Series A Preferred Stock to be redeemed may be selected by any equitable method determined by the Board provided that
such method does not result in the creation of fractional shares.
(c) Procedure for Redemption.
(i) Upon the Corporation’s written
notice as to the effective date of the redemption, accompanied by payment in immediately available U.S. funds of the amount of
the full Redemption Price through such effective date to which each record holder of shares of Series A Preferred Stock to be redeemed
is entitled, shares of the Series A Preferred Stock shall be redeemed and shall no longer be outstanding shares of stock of the
Corporation and all rights of the holders of such shares will terminate. Such notice shall be given by first class mail, postage
pre-paid, to each record holder of the shares of Series A Preferred Stock to be redeemed at the respective mailing address of such
holder as the same shall appear on the stock transfer records of the Corporation. No failure to give such notice or any defect
therein or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of Series A Preferred
Stock except as to the holder to whom notice was defective or not given.
(ii) In addition to any information required
by law or by the applicable rules of any exchange upon which Series A Preferred Stock may be listed or admitted to trading, such
notice shall state: (A) the redemption date; (B) the Redemption Price; (C) the place or places where the shares of Series A Preferred
Stock are to be surrendered (if so required in the notice) for payment of the Redemption Price in immediately available U.S. funds
(if not otherwise included with the notice); and (D) that dividends on the shares to be redeemed will cease to accrue on the redemption
date if payment accompanies the notice or, if not, on the date funds are set aside for payment. If less than all of the shares
of Series A Preferred Stock held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number
of shares of Series A Preferred Stock held by such holder to be redeemed.
(iii) If notice of redemption of any shares
of Series A Preferred Stock has been given and if the funds necessary for such redemption have been set apart by the Corporation
for the benefit of the holders of any shares of Series A Preferred Stock so called for redemption, then, from and after the date
funds have been set apart for payment of the Redemption Price, dividends will cease to accrue on such shares of Series A Preferred
Stock, such shares of Series A Preferred Stock shall no longer be outstanding and all rights of the holders of such shares will
terminate, except the right to receive the Redemption Price therefor. If the Corporation shall so require and the notice of redemption
shall so state, holders of Series A Preferred Stock to be redeemed shall surrender the certificates representing such Series A
Preferred Stock, to the extent that such shares are certificated, at the place designated in such notice and, upon surrender in
accordance with said notice of the certificates representing shares of Series A Preferred Stock so redeemed (properly endorsed
or assigned for transfer, if the Corporation shall so require and the notice shall so state), such shares of Series A Preferred
Stock shall be redeemed by the Corporation at the Redemption Price. In case less than all of the shares of Series A Preferred Stock
represented by any such certificate are redeemed, a new certificate or certificates shall be issued representing the unredeemed
shares of Series A Preferred Stock without cost to the holder thereof. In the event that the shares of Series A Preferred Stock
to be redeemed are uncertificated, such shares shall be redeemed in accordance with the notice and no further action on the part
of the holders of such shares shall be required.
(iv) The deposit of funds with a bank
or trust company for the purpose of redeeming Series A Preferred Stock shall be irrevocable except that:
(A) the Corporation shall be entitled
to receive from such bank or trust company the interest or other earnings, if any, earned on any money so deposited in trust, and
the holders of any shares redeemed shall have no claim to such interest or other earnings; and
(B) any balance of monies so deposited
by the Corporation and unclaimed by the holders of the Series A Preferred Stock entitled thereto at the expiration of two years
from the applicable redemption date shall be repaid, together with any interest or other earnings thereon, to the Corporation,
and after any such repayment, the holders of the shares entitled to the funds so repaid to the Corporation shall look only to the
Corporation for payment of the Redemption Price without interest or other earnings.
(6) Voting Rights. Holders of the Series A
Preferred Stock will not have any voting rights, except that, so long as any shares of Series A Preferred Stock remain outstanding,
the Corporation shall not, without the affirmative vote of the holders of at least 85% of the Series A Preferred Stock outstanding
at the time voting as a separate class, (A) amend, alter or repeal the provisions of the Charter (by amendment, merger or otherwise)
in such a way that would materially and adversely affect the powers, special rights, preferences, or privileges of the Series A
Preferred Stock or the holders thereof, or (B) create or authorize the creation of (by amendment, merger, or otherwise) or issue
or incur any obligation to issue any Series A Preferred Stock (other than as provided in Section 3(c)) or any Senior Stock or Parity
Stock (or other securities, including notes, debentures or bonds, convertible into or exchangeable for Senior Stock or Parity Stock),
which by their terms shall be redeemable at any time when any shares of Series A Preferred Stock are issued and outstanding.
(7) Adjustment for Stock Splits and Reverse
Stock Splits. If outstanding shares of the Series A Preferred Stock shall be divided into a greater number of shares of Series
A Preferred Stock or into other securities of the Corporation convertible into or exchangeable for shares of Series A Preferred
Stock, then the Liquidation Price and Redemption Price, each as in effect immediately prior to such division, shall, simultaneously
with the effectiveness of such division, be proportionately reduced. Conversely, if outstanding shares of the Series A Preferred
Stock shall be combined into a smaller number of shares of Series A Preferred Stock or into other securities of the Corporation
convertible into or exchangeable for shares of Series A Preferred Stock, then the Liquidation Preference and Redemption Price,
each as in effect immediately prior to such combination, shall, simultaneously with the effectiveness of such combination be proportionately
increased. Any adjustment to the Liquidation Preference or Redemption Price under this Section 7 shall become effective
at the close of business on the date the subdivision or combination referred to herein becomes effective.
(8) Exclusion of Other Rights. The shares
of Series A Preferred Stock are not convertible into or exchangeable for any other property or securities of the Corporation. The
Series A Preferred Stock shall have no preemptive or subscription rights. The Series A Preferred Stock shall not have any preferences
or other rights other than those specifically set forth herein.”
SECOND: The Series A Preferred Stock
has been classified and designated by the Board under the authority contained in the Charter.
THIRD: These Articles Supplementary
have been approved by the Board in the manner and by the vote required by law. No stockholder of the Corporation has any voting
rights with respect to these Articles Supplementary.
FOURTH: The undersigned acknowledges
these Articles Supplementary to be the corporate act of the Corporation and, as to all matters or facts required to be verified
under oath, the undersigned acknowledges that, to the best of his knowledge, information and belief, these matters and facts are
true in all material respects and that this statement is made under the penalties of perjury.
IN WITNESS WHEREOF, the Corporation has caused
these Articles Supplementary to be signed in its name and on its behalf by its Chairman of the Board and attested to by its Secretary
on this 27th day of March, 2012.
ATTEST:
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BARRETT BUSINESS SERVICES, INC. |
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| By: |
/s/ James D. Miller |
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By: |
/s/ Anthony Meeker |
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Name: James D. Miller
Title: Secretary |
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Name: Anthony Meeker Title: Chairman of the
Board |
