SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED
PURSUANT TO RULE 13(d)-2(a)
(Amendment No.1)*
SPACEHAB, INCORPORATED
(Name of Issuer)
Common Stock, No Par Value
(Title of Class of Securities)
846243103
(CUSIP Number)
General Counsel
DaimlerChrysler Aerospace AG
Postfach 801109
81663 Munich
Germany
011-49-89-607-34277
with a copy to:
DELBERT D. SMITH, ESQ.
Dorsey & Whitney LLP
1001 Pennsylvania Avenue, NW
Suite 300 South
Washington, D.C. 20004
(202) 824-8889
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 14, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a Statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Statement because of Rule 13d-1(b)(3) or (4), check the following box: [ ]
- --------
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes.)
Page 1 of [ ]
<PAGE>
SCHEDULE 13D
CUSIP NO.: 846243103
- --------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
DaimlerChrysler Aerospace AG
- --------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
(3) SEC USE ONLY
- --------------------------------------------------------------------------------
(4) SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF SHARES (7) SOLE VOTING POWER 1,437,499**
BENEFICIALLY (8) SHARED VOTING POWER 0
OWNED BY THE (9) SOLE DISPOSITIVE POWER 1,437,499**
REPORTING PERSON (10) SHARED DISPOSITIVE POWER 0
WITH:
- --------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY THE REPORTING PERSON
1,437,499 shares of Common Stock of the Company.**
- --------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.4%
- --------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
- ----------
** See Item 5
Page 2 of [ ]
<PAGE>
This Amendment No. 1 amends and supplements the Schedule 13D (the "Schedule
13D") filed with the Securities and Exchange Commission on August 16, 1999, by
DaimlerChrysler Aerospace AG, a stock corporation formed under the laws of the
Federal Republic of Germany, (the "Reporting Person"), and is filed to reflect
information required by Rule 13d-2 under the Securities and Exchange Act of
1934, as amended, with respect to the Common Stock, no par value, of Spacehab,
Incorporated, a Washington corporation (the "Company") which has its principal
executive offices at 300 D Street, SW, Suite 814, Washington, D.C. 20024.
The following amendment to Item 2 of the Schedule 13D is hereby made:
Item 2. Identity and Background.
Item 2 is amended and supplemented by replacing the third and fourth
paragraphs with the following:
Attached as Schedule I is information concerning (i) the executive officers
and directors of the Reporting Person and (ii) each person controlling the
Reporting Person, as is required to be disclosed in response to Item 2 and
General Instruction C to Schedule 13D.
Neither the Reporting Person nor any of the persons referred to in Schedule
I has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations and similar misdemeanors) or been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, U.S. Federal or state securities laws or finding any
violation with respect to such laws.
The following amendment to Item 3 of the Schedule 13D is hereby made:
Item 3. Source and Amount of Funds or Other Considerations.
Item 3 is amended and restated in its entirety as follows:
The Reporting Person entered into a Preferred Stock Purchase Agreement with
the Company, dated as of August 2, 1999 (the "Stock Purchase Agreement")
(Exhibit 1 to this Schedule 13D).
Page 3 of [ ]
<PAGE>
Pursuant to the Stock Purchase Agreement, on August 5, 1999, the Reporting
Person acquired 975,000 shares of Series B Senior Convertible Preferred Stock,
no par value ("Preferred Stock"), for a purchase price of $8,775,000, or $9 per
share. In addition, pursuant to the Stock Purchase Agreement, on October 14,
1999, the Reporting Person acquired an additional 358,334 shares of Preferred
Stock, no par value, for a purchase price of $3,225,006 ($9 per shares). The
1,333,334 shares of Preferred Stock were purchased from working capital of the
Reporting Person.
The following amendment to Item 4 of the Schedule 13D is hereby made:
Item 4. Purpose of Transaction.
Item 4 is amended and restated in its entirety as follows:
The Preferred Stock was acquired by the Reporting Person to become the
Company's leading strategic investor and in connection with a decision by the
Company and the Reporting Person to pursue strategic cooperative activities with
the Company in areas of mutual technological interest.
In connection with, and as a condition to the acquisition of the shares of
Preferred Stock, the Reporting Person and the Company entered into (i) a
Registration Rights Agreement, dated as of August 5, 1999 (Exhibit 2 to this
Schedule 13D), and (ii) a Strategic Collaboration Agreement, dated as of August
5, 1999 (Exhibit 3 to this Schedule 13D).
Pursuant to the Stock Purchase Agreement and the Designation of Rights,
Terms and Preferences of Additional Shares of Series B Senior Convertible
Preferred Stock of the Company as filed with the Secretary of State of the State
of Washington on October 14, 1999 (the "Certificate of Designations") (Exhibit 4
hereto), for as long as the Reporting Person owns thirty percent (30%) of the
Preferred Stock purchased pursuant to the Agreement and/or Common Stock of the
Company issued upon conversion of said Preferred Stock, the Reporting Person
shall be entitled to designate one of the Company's directors. Said director is
to be a member of the Executive Committee of the Company's Board of Directors.
Mr. Joseph Kind, President of the Reporting Person's Space Infrastructure
Division, has been so designated by the Reporting Person and joined the
Company's Board on August 5, 1999.
Although the Reporting Person has not formulated any definitive plans with
respect to the shares of Common Stock of the Company owned by it, the Reporting
Person may from time to time acquire, or dispose of, Common Stock and/or other
securities of the Company if and when it deems it appropriate, subject to the
restrictions imposed by Section 16 of the Securities Exchange Act of 1934, as
amended (the "Act"). The Reporting Person may formulate other purposes, plans or
proposals relating to any of such securities of the Company to the extent deemed
advisable in light of market conditions, investment policies and other factors.
Except as described in this Item 4 and elsewhere in this Schedule 13D,
neither the Reporting Person nor any of the persons named on Schedule I to this
Schedule 13D has any plans or proposals which relate to or would result in: (a)
the acquisition by any person of additional securities of the Company, or the
disposition of securities of the Company; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; its subsidiaries; (d) any change in the
present Board of Directors or management of the Company, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the Board; (e) any material change in the present capitalization or
dividend policy of the Company; (f) any other material change in the
Page 4 of [ ]
<PAGE>
Company's business or corporate structure; (g) changes in the Company's charter,
By-Laws or instruments corresponding thereto or other actions which may impede
the acquisition of control of the Company by any person; (h) causing a class of
securities of the Company to be delisted from a national securities exchange or
cease to be authorized to be quoted in an interdealer quotation system of a
registered national securities association; (i) causing a class of equity
securities of the Company to become eligible for termination of registration
pursuant to Section 12(g)(4) of the Act, as amended; or (j) any action similar
to those enumerated above.
The following amendment to Item 5 of the Schedule 13D is hereby made:
Item 5. Interest in Securities of the Issuer.
Item 5 is amended and restated in its entirety as follows:
The Reporting Person directly owns (a) 104,165 shares of Common Stock of
the Company (acquired in 1995) and (b) 1,333,334 shares of Preferred Stock,
which allow the Reporting Person to convert said shares of Preferred Stock into
Common Stock as described below.
The 1,333,334 shares of Preferred Stock currently are convertible by the
Reporting Person, without the payment of additional consideration, into an equal
number of shares of Common Stock. The conversion mechanism, as set forth in the
Certificate of Designation, provides for the conversion ratio to be adjusted for
stock splits, combinations, certain dividends and distributions,
reclassifications, merger or reorganization.
If the Reporting Person exercised its conversion rights with respect to the
Preferred Stock, the Reporting Person would directly control a total of
1,437,499 shares (or 11.4%) of the issued and outstanding Common Stock of the
Company. Such percentage is based on the 11,229,646 shares of Common Stock
reported as outstanding as of July 23, 1999 in the Company's 10K for the Fiscal
Year ended June 30, 1999.
Other than the transactions described in this Schedule 13D, no transactions
in the shares of Common Stock of the Company have been effected in the past 60
days by the Reporting Person.
The following amendment to Item 7 of the Schedule 13D is hereby made:
Item 7: Material to be Filed as Exhibits.
Item 7 is amended and restated in its entirety as follows:
Exhibit 1 Preferred Stock Purchase Agreement, dated as of August 2, 1999,
between the Reporting Person and the Company.*
Exhibit 2 Registration Rights Agreement, dated as of August 5, 1999,
between the Reporting Person and the Company.*
Exhibit 3 Strategic Collaboration Agreement, dated as of August 5, 1999,
between the Reporting Person and the Company.*
Exhibit 4 Designation of Rights, Terms and Preferences of Additional Shares
of Series B Senior Convertible Preferred Stock of the Company as
filed with the Secretary of State of the State of Washington on
October 14, 1999.
- ----------
* Previously filed.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: October____, 1999
DAIMLERCHRYSLER AEROSPACE AG
By: /s/ Dr. Eckart Wolff
---------------------------------
Name: Dr. Eckart Wolff
Page 5 of [ ]
<PAGE>
Sch. I.-3
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF THE REPORTING PERSON, AND DCLR AND DC
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE REPORTING PERSON AND DCLR. The
following table sets forth the name and present principal occupation or
employment of each member of the Board of Management of each of the Reporting
Person and DCLR. Unless otherwise indicated, each such person is a citizen of
the Federal Republic of Germany and the business address of each such person is
Postfach 80 11 69, 81663 Munich, Germany.
Present Principal
Occupation
Name Office or Employment
- --------------------------------------------------------------------------------
Dr. Manfred Bischoff Chairman, Board of Management
Werner Heinzman Member, Board of Management Defense Systems
Dr. Gustav Humbert Member, Board of Management Civil Aircraft
Dr. Hartwig Knitter Member, Board of Management Human Resources
2. DIRECTORS AND EXECUTIVE OFFICERS OF DC. The following table sets forth
the name, business address and present principal occupation or employment of
each member of the Supervisory Board and Board of Management of DC. Unless
otherwise indicated, each suchperson is a citizen of the Federal Republic of
Germany and such person's business address is 70546 Stuttgart, Germany. Unless
otherwise indicated, each occupation set forth opposite an individual's name
refers to employment with DC.
Sch. I.-1
<PAGE>
<TABLE>
<CAPTION>
Present Principal
Occupation
Name Office or Employment
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Robert J. Eaton* Chairman, Board of Management
1000 Chrysler Drive
Auburn Hills, MI 48326-2912
U.S.A.
Jurgen E. Schrempp Chairman, Board of Management
Dr. Manfred Bischoff Member, Board of Management Aerospace & Industrial
Non-Automotive
Dr. Eckhard Cordes Member, Board of Management Corporate Development &
IT-Management, Industrial
Holdings (MTU & TEMIC)
Gunther Fleig Member, Board of Management Human Resources & Labor
Relations Director
Thomas C. Gale* Member, Board of Management Product Strategy, Design and
1000 Chrysler Drive Passenger Car Operations
Auburn Hills, MI 48326-2912 Chrysler, Plymouth, Jeep and
U.S.A. Dodge
Dr. Manfred Gentz Member, Board of Management Finance and Controlling
James P. Holden* Member, Board of Management Passenger Cars & Trucks Chrysler,
1000 Chrysler Drive Plymouth, Jeep and Dodge
Auburn Hills, MI 48326-2912
U.S.A.
Prof. Jurgen Hubbert Member, Board of Management Passenger Cars Mercedes-Benz &
smart
</TABLE>
Sch. I.-2
<PAGE>
<TABLE>
<CAPTION>
Present Principal
Occupation
Name Office or Employment
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Dr. Klaus Mangold Member, Board of Management Services (debis)
Thomas W. Sidlik* Member, Board of Management Procurement & Supply for the
1000 Chrysler Drive Chrysler, Plymouth, Jeep and
Auburn Hills, MI 48326-2912 Dodge brands & Jeep Operations
U.S.A.
Gary C. Valade* Member, Board of Management Global Procurement and Supply
1000 Chrysler Drive
Auburn Hills, MI 48326-2912
U.S.A.
Prof. Klaus Dieter Vohringer Member, Board of Management Research & Technology
Dr. Dieter Zetsche Member, Board of Management Commercial Vehicles
</TABLE>
*Citizen of the United States of America
Sch. I.-3
EXHIBIT 4
DESIGNATION OF RIGHTS, TERMS AND PREFERENCES
OF
ADDITIONAL SHARES OF
SERIES B SENIOR CONVERTIBLE PREFERRED STOCK
OF
SPACEHAB, INCORPORATED
(Pursuant to Chapter 6 of the
Washington Business Corporation Act)
Spacehab, Incorporated, a corporation organized and existing under the
Business Corporation Act of the State of Washington (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Chapter 6 of the
Business Corporation Act at a meeting duly called and held on August 26, 1999:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the
Articles of Incorporation, the Board of Directors hereby designates
additional shares of Series B Preferred Stock of the Corporation, no par
value per share (the "Preferred Stock"), as follows:
Series B Senior Convertible Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series B Senior Convertible Preferred Stock" (the "Series B
Preferred Stock"). The number of existing and outstanding shares of Series B
Preferred Stock is Nine Hundred Seventy-Five Thousand (975,000) and the number
of additional shares of Series B Preferred Stock shall be Three Hundred
Fifty-Eight Thousand Three Hundred Thirty-Four (358,334). As a result, the total
number of shares of Series B Preferred Stock shall be One Million Three Hundred
Thirty-Three Thousand Three Hundred Thirty-Four (1,333,334). Such number of
shares may be decreased by resolution of the Board of Directors; provided that
no decrease shall reduce the number of shares of Series B Preferred Stock to a
number less than the number of shares then outstanding.
Section 2. Dividends. The holders of the Series B Preferred Stock shall be
entitled to receive, out of funds legally available therefor, such dividends
with respect to the shares of Series B Preferred Stock as may be declared by the
Board of Directors. In addition, when and if the Board of Directors shall
declare a dividend payable with respect to the then outstanding shares of
Exh. 4-1
<PAGE>
Common Stock, no par value per share ("Common Stock") of the Corporation, each
holder of Series B Preferred Stock shall be entitled to the amount of dividends
as would be payable on the largest number of whole shares of Common Stock into
which shares of Series B Preferred Stock held by such holder could then be
converted pursuant to Section 5 hereof (such number to be determined as of the
record date for the determination of holders of Common Stock entitled to receive
such dividend). Dividends shall not be declared or paid to holders of Common
Stock unless and until the Corporation shall simultaneously declare and pay to
holders of Series B Preferred Stock the dividend referred to in the preceding
sentence.
Section 3. Liquidation, Dissolution or Winding Up; Certain Mergers,
Consolidations and Asset Sales.
a. In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the holders of shares of Series B Preferred Stock
then outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders, before any payment
shall be made to the holders of Common Stock or any other class or series of
stock ranking on liquidation junior to the Series B Preferred Stock (the Common
Stock and any other class or series of stock ranking on liquidation junior to
the Series B Preferred Stock, including without limitation, the Series A Junior
Participating Preferred Stock of the Corporation, being collectively referred to
as "Junior Stock") by reason of their ownership thereof, an amount equal to Nine
Dollars ($9.00) for each outstanding share of Series B Preferred Stock (the
"Series B Original Issue Price")(subject to appropriate adjustment in the event
of any stock dividend, stock split, combination or other similar
recapitalization affecting such shares) plus (ii) any dividends declared or
accrued but unpaid thereon. If upon any such liquidation, dissolution or winding
up of the Corporation, the remaining assets of the Corporation available for
distribution to its stockholders shall be insufficient to pay the holders of
shares of Series B Preferred Stock the full amount to which they shall be
entitled, the holders of shares of Series B Preferred Stock and any class or
series of stock ranking on liquidation on a parity with the Series B Preferred
Stock shall share ratably (based upon the sum of each series respective Original
Issue Price plus accrued but unpaid dividends) in any distribution of the
remaining assets and funds of the Corporation in proportion to the respective
amounts which would otherwise be payable in respect of the shares held by them
upon such distribution if all amounts payable on or with respect to such shares
were paid in full.
b. After the payment of all preferential amounts required to be paid to the
holders of Series B Preferred Stock and any other class or series of stock of
the Corporation ranking on liquidation on a parity with the Series B Preferred
Stock upon the dissolution, liquidation or winding up of the Corporation, the
holders of shares of Junior Stock then outstanding shall be entitled to receive
the remaining assets and funds of the Corporation available for distribution to
its stockholders.
c. The consolidation or merger of the Corporation into or with any other
entity or entities which results in the exchange of outstanding shares of the
Corporation for securities or other consideration issued or paid or caused to be
issued or paid by any such entity
Exh. 4-2
<PAGE>
or affiliate thereof, and the sale or transfer by the Corporation of all or
substantially all its assets, shall be deemed to be a liquidation, dissolution
or winding up of the Corporation within the meaning of the provisions of this
Section 3, but only for the purposes of the redemption of such Series B
Preferred Stock, and only if so elected by the holders of a majority of the
outstanding shares of Series B Preferred Stock, in their sole discretion.
Section 4. Voting.
a. Each holder of outstanding shares of Series B Preferred Stock shall be
entitled to the number of votes equal to the number of whole shares of Common
Stock into which the shares of Series B Preferred Stock held by such holder are
then convertible (as adjusted from time to time pursuant to Section 5 hereof),
at each meeting of stockholders of the Corporation (and written actions of
stockholders in lieu of meetings) with respect to any and all matters presented
to the stockholders of the Corporation for their action or consideration. Except
as provided by law, or by the provisions of Subsections 4(b), 4(c) and 4(d)
below, holders of Series B Preferred Stock shall vote together with the holders
of Common Stock, as a single class.
b. For so long as (i) any shares of Series B Preferred Stock remain
outstanding and (ii) any holder thereof is a Qualified Holder (as defined in the
Preferred Stock Purchase Agreement (the "Purchase Agreement") dated as of August
2, 1999 between the Corporation and Daimler Chrysler Aerospace AG ("DASA")), the
Series B Preferred Stock (voting as a class) will elect one of the Directors
(the "Preferred Director") and the Common Stock (voting as a class) will elect
the remaining Directors. The Preferred Director shall be included as a member of
the Executive Committee of the Board. If at any time Series B Preferred Stock
issued remains outstanding but there is no Qualified Holder, all of the
Directors will be elected by the Series B Preferred Stock and Common Stock
voting together as one class. This Section 4(b) shall not affect or limit
provisions of Section 8.1 of the Purchase Agreement as to the right of a
Qualified Holder to designate a nominee for election to the Board (and for such
designee, if elected by the shareholders, to serve on the Executive Committee of
the Board), which provisions may remain applicable notwithstanding there not
being any shares of Series B Preferred Stock outstanding.
c. Any Preferred Director may be removed at any time, by the vote of the
holders of more than fifty percent (50%) of all of the then outstanding shares
of Series B Preferred Stock, voting as a separate class in person or by proxy at
a special meeting of stockholders called for such purpose (or at any adjournment
thereof) by holders of at least twenty percent (20%) of the outstanding shares
of Series B Preferred Stock or at any annual meeting of stockholders, or by
written consent delivered to the Secretary of the Corporation, and no Preferred
Director may be removed at any time without the affirmative vote or consent of
the holders of more than fifty percent (50%) of all of the outstanding shares of
Series B Preferred Stock. Any vacancy created by the removal, death or
resignation of a Preferred Director may be filled by the holders of more than
fifty percent (50%) of all of the outstanding shares of Series B Preferred Stock
by vote in person or by proxy at a special meeting of stockholders of the
Corporation called for such purpose by holders of at least twenty percent (20%)
of the
Exh. 4-3
<PAGE>
outstanding shares of Series B Preferred Stock, or at any annual meeting, or by
written consent delivered to the Secretary of the Corporation.
d. So long as any shares of the Series B Preferred Stock remain
outstanding, unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the affirmative vote or consent of the
holders of more than fifty percent (50%) of all of the shares of Series B
Preferred Stock at the time outstanding, voting separately as a class, given in
person or by proxy either in writing (as may be permitted by law and the
Articles of Incorporation and By-laws of the Corporation) or at any special or
annual meeting, shall be necessary to permit, effect or validate the taking of
any of the following actions by the Corporation:
(i) create, authorize, issue or sell (i) any class or series of
capital stock ranking prior to or on parity with the Series B Preferred
Stock as to dividends or upon liquidation, dissolution or winding up;
provided, however, that holders of Common Stock may receive dividends to
the extent provided by Section 2 above and, provided further, that the
consent to issuance of any class or series of capital stock ranking on
parity with the Series B Preferred Stock shall not be unreasonably
withheld; or (ii) any rights, options or other securities convertible,
exercisable or exchangeable for or into, or having rights to purchase, any
shares of capital stock described in clause (i) hereof; or
(ii) amend the Articles of Incorporation or By-laws of the
Corporation, or in any other manner alter or change the powers, rights,
privileges or preferences of the Series B Preferred Stock, if such
amendment or action would alter, change or affect adversely the powers,
rights, privileges or preferences of the holders of the Series B Preferred
Stock; or
(iii) increase the number of shares of Series B Preferred Stock
authorized for issuance above 1,333,334 shares; or
(iv) at any time after the initial issuance date of the Series B
Preferred Stock, issue any shares of Series B Preferred Stock, except (i)
issuances pursuant to the Purchase Agreement, or (ii) issuances of share
certificates upon transfers or exchanges of shares by holders (other than
the Corporation) or in replacement of lost, stolen, damaged or mutilated
share certificates;
Section 5. Optional Conversion. The holders of the Series B Preferred Stock
shall each have conversion rights as follows (the "Conversion Rights"):
a. Right to Convert. Shares of Series B Preferred Stock shall be
convertible, at the option of the holder thereof, at any time and from time to
time, and without the payment of additional consideration by the holder thereof,
into such number of fully paid and nonassessable shares of Common Stock as is
determined by dividing the aggregate Series B Original Issue Price of the Shares
of Series B Preferred Stock being converted by the Series B Conversion Price in
Exh. 4-4
<PAGE>
effect at the time of conversion or such share. The initial "Series B Conversion
Price" shall be Nine Dollars ($9.00), subject to adjustment as provided below.
For purposes of this Section 5, "Original Issue Date" shall mean, for the Series
B Preferred Stock, the date on which the first share of Series B Preferred Stock
was issued.
In the event of a liquidation of the Corporation, the Conversion Rights
shall terminate at the close of business on the first full day preceding the
date fixed for the payment of any amounts distributable on liquidation to the
holders of Series B Preferred Stock.
b. Fractional Shares. No fractional shares of Common Stock shall be issued
upon conversion of the Series B Preferred Stock, and the number of shares of
Common Stock to be issued shall be rounded to the nearest whole share. The
shares issuable upon such conversion shall be determined on the basis of the
total number of shares of Series B Preferred Stock which the holder is at the
time converting into Common Stock and the number of shares of Common Stock
issuable upon such aggregate conversion.
c. Mechanics of Conversion.
(i) In order for a holder of Series B Preferred Stock to convert shares of
Series B Preferred Stock into shares of Common Stock, such holder shall
surrender the certificate or certificates for such shares of Series B Preferred
Stock, at the office of the transfer agent for the Corporation (or at the
principal office of the Corporation if the Corporation serves as its own
transfer agent), together with written notice that such holder elects to convert
all or any number of the shares of the Series B Preferred Stock represented by
such certificate or certificates. Such notice shall state such holder's name or
the names of the nominees in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued. If required by the
Corporation, certificates surrendered for conversion shall be endorsed or
accompanied by a written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered holder or his,
her or its attorney duly authorized in writing. The date of receipt of such
certificates and notice by the transfer agent (or by the Corporation if the
Corporation serves as its own transfer agent) shall be the conversion date
("Conversion Date"). The Corporation shall, as soon as practicable after the
Conversion Date, issue and deliver at such office to such holder of Series B
Preferred Stock, or to his, her or its nominees, a certificate or certificates
for the number of shares of Common Stock to which such holder shall be entitled,
together with cash in lieu of any fraction of a share. In case less than all the
shares of Series B Preferred Stock represented by any certificate are being
converted, a new certificate representing the unconverted shares of Series B
Preferred Stock shall be issued to the holder thereof without cost to such
holder.
(ii) The Corporation shall at all times when the Series B Preferred Stock
shall be outstanding, reserve and keep available out of its authorized but
unissued stock, for the purpose of effecting the conversion of the Series B
Preferred Stock, such number of its duly authorized shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding Series B Preferred Stock.
Exh. 4-5
<PAGE>
(iii) Upon any such conversion, no adjustment to the Series B Conversion
Price shall be made for any declared or accrued but unpaid dividends on the
Series B Preferred Stock surrendered for conversion or on the Common Stock
delivered upon conversion, but, as provided in clause (iv) below, such dividends
shall remain payable to the holder thereof.
(iv) All shares of Series B Preferred Stock which shall have been
surrendered for conversion as herein provided shall no longer be deemed to be
outstanding and all rights with respect to such shares, including the rights, if
any, to receive notices and to vote, shall immediately cease and terminate on
the Conversion Date, except only the right of the holders thereof to receive
shares of Common Stock in exchange therefor and payment of any dividends
declared or accrued but unpaid thereon. Any shares of Series B Preferred Stock
so converted shall be retired and cancelled and shall not be reissued, and the
Corporation (without the need for stockholder action) may from time to time take
such appropriate action as may be necessary to reduce the authorized Series B
Preferred Stock accordingly.
(v) The Corporation shall pay any and all issue and other taxes that may be
payable in respect of any issuance or delivery of shares of Common Stock upon
conversion of shares of Series B Preferred Stock pursuant to this Section 5. The
Corporation shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issuance and delivery of shares of
Common Stock in a name other than that in which the shares of Series B Preferred
Stock so converted were registered, and no such issuance or delivery shall be
made unless and until the person or entity requesting such issuance has paid to
the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid.
d. Adjustment for Stock Splits and Combinations. If the Corporation shall
at any time or from time to time after the Original Issue Date of the Series B
Preferred Stock effect a subdivision of the outstanding Common Stock, the Series
B Conversion Price then in effect with respect to the Series B Preferred Stock
immediately before that subdivision shall be proportionately decreased. If the
Corporation shall at any time or from time to time after the Original Issue Date
of the Series B Preferred Stock combine the outstanding shares of Common Stock,
the Series B Conversion Price then in effect immediately before the combination
with respect to the Series B Preferred Stock shall be proportionately increased.
Any adjustment under this paragraph shall become effective at the close of
business on the date the subdivision or combination becomes effective.
e. Adjustment for Certain Dividends and Distributions. In the event the
Corporation at any time, or from time to time after the Original Issue Date of
the Series B Preferred Stock shall make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in additional shares of Common Stock, then and in
each such event the Series B Conversion Price with respect to the Series B
Preferred Stock then in effect shall be decreased as of the time of such
issuance or, in the event such a record date shall have been fixed, as of the
close of business on such record date,
Exh. 4-6
<PAGE>
by multiplying the Series B Conversion Price for the Series B Preferred Stock
then in effect by a fraction:
(1) the numerator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and
(2) the denominator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or
distribution;
provided, however, that if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Series B Conversion Price for the Series B Preferred Stock
shall be recomputed accordingly as of the close of business on such record date
and thereafter the Series B Conversion Price for the Series B Preferred Stock
shall be adjusted pursuant to this paragraph as of the time of actual payment of
such dividends or distributions.
f. Adjustments for Other Dividends and Distributions. In the event the
Corporation at any time or from time to time after the Original Issue Date of
the Series B Preferred Stock shall make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Corporation other than shares of
Common Stock, then and in each such event provision shall be made so that the
holders of Series B Preferred Stock shall receive upon conversion thereof in
addition to the number of shares of Common Stock receivable thereupon, the
amount of securities of the Corporation that they would have received had the
Series B Preferred Stock been converted into Common Stock on the date of such
event and had thereafter, during the period from the date of such event to and
including the conversion date, retained such securities receivable by them as
aforesaid during such period, giving application to all adjustments called for
during such period under this paragraph with respect to the rights of the
holders of the Series B Preferred Stock.
g. Adjustment for Reclassification, Exchange or Substitution. If the Common
Stock issuable upon the conversion of the Series B Preferred Stock shall be
changed into the same or a different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification, or otherwise (other
than a subdivision or combination of shares or stock dividend provided for
above, or a reorganization, merger, consolidation, or sale of assets provided
for below), then and in each such event the holders of the Series B Preferred
Stock shall have the right thereafter to convert such share into the kind and
amount of shares of stock and other securities and property receivable upon such
reorganization, reclassification, or other change, by holders of the number of
shares of Common Stock into which such shares of Series B Preferred Stock might
have been converted immediately prior to such reorganization, reclassification,
or change, all subject to further adjustment as provided herein.
Exh. 4-7
<PAGE>
h. Adjustment for Merger or Reorganization, etc. In case of any
consolidation or merger of the Corporation with or into another corporation or
the sale of all or substantially all of the assets of the Corporation to another
corporation (other than a consolidation, merger or sale which is covered by
Subsection 3(c)), each share of Series B Preferred Stock shall thereafter be
convertible (or shall be converted into a security which shall be convertible)
into the kind and amount of shares of stock or other securities or property to
which a holder of the number of shares of Common Stock of the Corporation
deliverable upon conversion of such Series B Preferred Stock would have been
entitled upon such consolidation, merger or sale; and, in such case, appropriate
adjustment (as determined in good faith by the Board of Directors) shall be made
in the application of the provisions in this Section 5 set forth with respect to
the rights and interest thereafter of the holders of the Series B Preferred
Stock, to the end that the provisions set forth in this Section 5 (including
provisions with respect to changes in and other adjustments of the Series B
Conversion Price) shall thereafter be applicable, as nearly as reasonably may
be, in relation to any shares of stock or other property thereafter deliverable
upon the conversion of the Series B Preferred Stock.
i. No Impairment. The Corporation will not, by amendment of its Articles 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 5
and in the taking of all such action as may be necessary or appropriate in order
to protect the respective Conversion Rights of the holders of the Series B
Preferred Stock against impairment.
j. Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment of the Series B Conversion Price pursuant to this Section 5, the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Series B 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 at any
time of any holder of Series B Preferred Stock, furnish or cause to be furnished
to such holder a similar certificate setting forth (i) such adjustments and
readjustments, (ii) the Series C Conversion Price then in effect, and (iii) the
number of shares of Common Stock and the amount, if any, of other property which
then would be received upon the conversion of such Series B Preferred Stock.
k. Notice of Record Date. In the event:
(a) that the Corporation declares a dividend (or any other
distribution) on its Common Stock payable in Common Stock or
other securities of the corporation;
(b) that the Corporation subdivides or combines its outstanding
shares of Common Stock;
Exh. 4-8
<PAGE>
(c) of any reclassification of the Common Stock of the Corporation
(other than a subdivision or combination of its outstanding
shares of Common Stock or a stock dividend or stock distribution
thereon), or of any consolidation or merger of the Corporation
into or with another corporation, or of the sale of all or
substantially all of the assets of the Corporation; or
(d) of the involuntary or voluntary dissolution, liquidation or
winding up of the Corporation;
then the Corporation shall cause to be filed at its principal office, and shall
cause to be mailed to the holders of the Series B Preferred Stock at their last
addresses as shown on the records of the Corporation or its transfer agent, at
least ten (10) days prior to the date specified in (i) below or twenty (20) days
before the date specified in (ii) below, a notice stating
(i) the record date of such dividend, distribution, subdivision or
combination, or, if a record is not to be taken, the date as of
which the holders of Common Stock of record to be entitled to
such dividend, distribution, subdivision or combination are to be
determined, or
(ii) the date on which such reclassification, consolidation, merger,
sale, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger,
sale, dissolution or winding up.
[the remainder of this page intentionally left blank]
Exh. 4-9
<PAGE>
IN WITNESS WHEREOF, this Designation of Rights, Terms and Preferences is
executed on behalf of the Corporation by its President and attested by its
Assistant Secretary this 14th day of October, 1999.
SPACEHAB, INCORPORATED
By:___________________________
Name: Shelley A. Harrison
Title Chairman and CEO
Attest: ___________________________
Name: Mark A. Kissman
Title: Secretary
Exh. 4-10
