EXHIBIT 2
GENESEE & WYOMING INC.
CERTIFICATE OF DESIGNATION OF
4.0% SENIOR REDEEMABLE CONVERTIBLE
PREFERRED STOCK, SERIES A, SETTING FORTH THE POWERS,
PREFERENCES, RIGHTS, QUALIFICATIONS, LIMITATIONS AND
RESTRICTIONS OF SUCH SERIES OF PREFERRED STOCK
Pursuant to Section 151 of the Delaware General Corporation
Law, Genesee & Wyoming Inc., a Delaware corporation (the "Corporation"), DOES
HEREBY CERTIFY:
The Restated Certificate of Incorporation of the Corporation
(the "Charter") confers upon the Board of Directors the authority to provide for
the issuance of shares of Preferred Stock in series and to fix the designations,
powers, preferences and rights of the shares of each such series and any
qualifications, limitations or restrictions thereof. On August 31, 2000, the
Board of Directors of the Corporation, in accordance with Section 141(c) of the
Delaware General Corporation Law conferred upon the Pricing Committee of the
Board of Directors of the Corporation (the "Pricing Committee") the authority to
determine any and all terms and provisions of a series of Senior Redeemable
Convertible Preferred Stock, including, without limitation, the conversion price
of such preferred stock. On October 18, 2000, the Pricing Committee duly adopted
the following resolution creating a series of Preferred Stock designated as 4.0%
Senior Redeemable Convertible Preferred Stock, Series A, and such resolution has
not been modified and is in full force and effect on the date hereof:
RESOLVED that, pursuant to the authority vested in the Board
of Directors of the Corporation in accordance with the provisions of the
Charter, a series of the class of authorized Preferred Stock, par value $0.01
per share, of the Corporation is hereby created and that the designation and
number of shares thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations and restrictions thereof are as follows:
Section 1. Designation and Number.
(a) The shares of such series shall be designated as 4.0%
Senior Redeemable Convertible Preferred Stock, Series A (the "Preferred Stock").
The number of shares initially constituting the Preferred Stock shall be 25,000,
which number may be decreased (but not increased) by the Board of Directors
without a vote of stockholders; provided, however, that such number may not be
decreased below the number of then outstanding shares of Preferred Stock or
shares of Preferred Stock which may be issued pursuant to the Stock Purchase
Agreement.
(b) The Preferred Stock shall, with respect to dividend
rights and rights on liquidation, dissolution or winding up, rank prior to all
other classes and series
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of Junior Stock (as defined below) of the Corporation now or hereafter
authorized including, without limitation, the Common Stock.
(c) Capitalized terms used herein and not otherwise
defined shall have the meanings set forth in Section 10 below.
Section 2. Dividends and Distributions.
(a) The holders of shares of Preferred Stock, in
preference to the holders of shares of Common Stock and of any shares of other
Junior Stock of the Corporation, shall be entitled to receive, when, as and if
declared by the Board of Directors, out of the assets of the Corporation legally
available therefor, cumulative cash dividends at an annual rate on the
Liquidation Preference thereof equal to 4.0% calculated on the basis of a
360-day year consisting of twelve 30-day months, accruing and payable in equal
quarterly payments, in immediately available funds, on the last day of March,
June, September and December or, if any such day is not a Business Day, the next
succeeding Business Day, in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the first such Quarterly
Dividend Payment Date to occur after the Issue Date with respect to such shares;
provided, however, that with respect to such first Quarterly Dividend Payment
Date to occur after the Issue Date with respect to such shares, the holders of
shares of Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors, out of the assets of the Corporation legally
available therefor, a cash dividend in respect of each share of Preferred Stock
in the amount of (i) $____, multiplied by (ii) a fraction equal to (A) the
number of days from (and including) the Issue Date to (but excluding) such
Quarterly Dividend Payment Date divided by (B) 90.
(b) Dividends payable pursuant to Section 2(a) with
respect to any shares of Preferred Stock shall begin to accrue from the Issue
Date with respect to such shares, and shall accrue on a daily basis, in each
case whether or not declared. Dividends paid on the shares of Preferred Stock in
an amount less than the total amount of such divi dends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares of Preferred Stock at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Preferred Stock entitled to receive payment of a dividend declared thereon,
which record date shall be no more than 60 days or less than 10 days prior to
the date fixed for the payment thereof. Accumulated but unpaid dividends for any
past quarterly dividend periods may be declared and paid at any time, without
reference to any regular Quarterly Dividend Payment Date, to holders of record
on such date, not more than 60 nor less than 10 days preceding the payment date
thereof, as may be fixed by the Board of Directors.
(c) In addition to the dividends or distributions on the
Preferred Stock described in Section 2(a), in the event that the Corporation
shall declare a dividend (other than a Regular Dividend) or make any other
distribution (including, without limitation, in cash, in capital stock (which
shall include, without limitation, any options, warrants or
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other rights to acquire capital stock) of the Corporation, whether or not
pursuant to a shareholder rights plan, "poison pill" or similar arrangement, or
other property or assets) to holders of Common Stock, then the Board of
Directors shall declare, and the holder of each share of Preferred Stock shall
be entitled to receive, a dividend or distribution in an amount equal to the
amount of such dividend or distribution received by a holder of the number of
shares of Common Stock for which such share of Preferred Stock is convertible on
the record date for such dividend or distribution. Any such amount shall be paid
to the holders of shares of Preferred Stock at the same time such dividend or
distribution is made to holders of Common Stock.
(d) The holders of shares of Preferred Stock shall not be
entitled to receive any dividends or other distributions except as provided
herein.
Section 3. Voting Rights.
In addition to any voting rights provided by law, the holders
of shares of Preferred Stock shall have the following voting rights:
(a) So long as the Preferred Stock is outstanding, each
share of Preferred Stock shall entitle the holder thereof to vote, in person or
by proxy, at a special or annual meeting of stockholders, on all matters voted
on by holders of Common Stock voting together as a single class with other
shares entitled to vote thereon. With respect to any such vote, each share of
Preferred Stock shall entitle the holder thereof to cast that number of votes
per share as is equal to the number of votes that such holder would be entitled
to cast had such holder converted his shares of Preferred Stock into Class A
Common Stock on the record date for determining the stockholders of the
Corporation eligible to vote on any such matters.
(b) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the holders of at
least 662/3% of the outstanding shares of Preferred Stock, voting separately as
a single class, in person or by proxy, at a special or annual meeting of
stockholders called for the purpose, shall be necessary to:
(i) authorize, increase the authorized number of
shares of or issue (including on conversion or exchange of any convertible or
exchangeable securities or by reclassification) any shares of any class or
classes of Senior Stock, Parity Stock or Class B Common Stock;
(ii) authorize, increase the authorized number of
shares of or issue any shares of any other class or classes of capital stock
having an optional or mandatory redemption earlier than _______, 200[ ];
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(iii) authorize, adopt or approve an amendment to
the Charter that would increase or decrease the par value of the shares of
Preferred Stock, or alter or change the powers, preferences or special rights of
the shares of Preferred Stock, Parity Stock, Junior Stock or Senior Stock in a
way that would adversely affect the preferences, rights or powers of the
Preferred Stock or amend the terms of any class of capital stock of the
Corporation to provide that such class of capital stock has an optional or
mandatory redemption date earlier than _______, 200[ ];
(iv) amend or alter the Charter so as to affect
the shares of Preferred Stock adversely, including, without limitation, by
granting any voting right to any holder of notes, bonds, debentures or other
debt obligations of the Corporation or by reclassifying any capital stock into
Senior Stock or Parity Stock; or
(v) authorize or issue any security convertible
into, exchangeable for or evidencing the right to purchase or otherwise receive
any shares of any class or classes of Senior Stock or Parity Stock.
(c) (i) The foregoing right of holders of shares of
Preferred Stock to take any action as provided in Section 3(b) may be exercised
at any annual meeting of stockholders or at a special meeting of holders of
shares of Preferred Stock held for such purpose as hereinafter provided or at
any adjournment thereof, or by the written consent, delivered to the Secretary
of the Corporation, of the holders of the minimum number of shares required to
take such action.
(ii) The President of the Corporation may call,
and upon the written request of holders of record of at least 25% of the
outstanding shares of Preferred Stock, addressed to the Secretary of the
Corporation at the principal office of the Corporation, shall call, a special
meeting of the holders of shares entitled to vote as provided in Section 3(b).
The subject matter of such meeting shall relate solely to the matters set forth
in Section 3(b). Such meeting shall be held within 30 days after delivery of
such request to the Secretary, at the place and upon the notice provided by law
and in the by-laws of the Corporation for the holding of meetings of
stockholders.
(iii) At each meeting of stockholders at which the
holders of shares of Preferred Stock shall have the right, voting separately as
a single class, to take any action, the presence in person or by proxy of the
holders of record of one-third of the total number of shares of Preferred Stock
then outstanding and entitled to vote on the matter shall be necessary and
sufficient to constitute a quorum. At any meeting at which a quorum of the
holders of shares of Preferred Stock is not present, a majority of the holders
of such shares present in person or by proxy shall have the power to adjourn the
meeting as to the actions to be taken by the holders of shares of Preferred
Stock from time to time and place to place without notice other than
announcement at the meeting until a quorum shall be present.
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For taking of any action as provided in Section 3(b) by the
holders of shares of Preferred Stock, each such holder shall have one vote for
each share of such stock standing in his name on the transfer books of the
Corporation as of any record date fixed for such purpose or, if no such date be
fixed, at the close of business on the Business Day next preceding the day on
which notice is given, or if notice is waived, at the close of business on the
Business Day next preceding the day on which the meeting is held; provided,
however, that shares of Preferred Stock held by the Corporation or any Affiliate
of the Corporation shall not be deemed to be outstanding for purposes of taking
any action as provided in this Section 3.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends payable on shares of
Senior Stock are not paid in full, at such time and thereafter until all unpaid
dividends payable, whether or not declared, on the outstanding shares of Senior
Stock shall have been paid in full or declared and set apart for payment or
whenever the Corporation shall not have redeemed or converted shares of Senior
Stock at a time required by the designations of such Senior Stock, at such time
and thereafter until all redemption, conversion and obligations that have come
due shall have been satisfied or all necessary funds have been set apart for
payment, the Corporation shall not: (A) declare or pay dividends, or make any
other distributions, on any shares of Preferred Stock, Parity Stock or Junior
Stock or (B) declare or pay dividends, or make any distributions, on any shares
of stock ranking pari passu with such Senior Stock, except dividends or
distributions paid ratably on the Senior Stock and stock ranking pari passu with
such Senior Stock on which dividends are payable or in arrears, in proportion to
the total amounts to which the holders of all shares of the Senior Stock and
such stock ranking pari passu with such Senior Stock are then entitled.
(b) Whenever quarterly dividends payable on shares of
Preferred Stock as provided in Section 2 are not paid in full, at such time and
thereafter until all unpaid dividends payable, whether or not declared, on the
outstanding shares of Preferred Stock shall have been paid in full or declared
and set apart for payment or whenever the Corporation shall not have redeemed or
converted shares of Preferred Stock at a time required by Section 5 or 8, at
such time and thereafter until all redemption conversion and obligations
provided in Section 5 or 8 that have come due shall have been satisfied or all
necessary funds have been set apart for payment, the Corporation shall not: (A)
declare or pay dividends, or make any other distributions, on any shares of
Junior Stock or (B) declare or pay dividends, or make any other distributions,
on any shares of Parity Stock, except dividends or distributions paid ratably on
the Preferred Stock and all Parity Stock on which dividends are payable or in
arrears, in proportion to the total amounts to which the holders of all shares
of the Preferred Stock and such Parity Stock are then entitled.
(c) Whenever dividends payable on shares of Preferred
Stock as provided in Section 2 are not paid in full, at such
time and thereafter until all unpaid
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dividends payable, whether or not declared, on the outstanding shares of
Preferred Stock shall have been paid in full or declared and set apart for
payment, or whenever the Corporation shall not have redeemed or converted shares
of Preferred Stock at a time required by Section 5 or 8, at such time and
thereafter until all redemption conversion and obligations provided in Section 5
or 8 that have come due shall have been satisfied or all necessary funds have
been set apart for payment, the Corporation shall not redeem, purchase or
otherwise acquire for consideration any shares of Junior Stock or Parity Stock;
provided, however, that (A) the Corporation may accept shares of any Parity
Stock or Junior Stock for conversion into Junior Stock and (B) the Corporation
may at any time redeem, purchase or otherwise acquire shares of any Parity Stock
pursuant to any mandatory redemption, put, sinking fund or other similar
obligation contained in such Parity Stock, pro rata with the Preferred Stock in
proportion to the total amount then required to be applied by the Corporation to
redeem, repurchase, convert, exchange or otherwise acquire shares of Preferred
Stock and shares of such Parity Stock.
(d) The Corporation shall not permit any Subsidiary of
the Corporation, or cause any other Person, to purchase or otherwise acquire for
consideration any shares of capital stock of the Corporation unless the
Corporation could, pursuant to Section 4(c), purchase such shares at such time
and in such manner.
Section 5. Redemption; Change of Control.
(a) Optional Redemption. Except as otherwise set forth
in this Sec tion 5, the Corporation shall not have any right
to redeem any shares of Preferred Stock prior to the fourth anniversary of the
Original Issue Date. On and after the fourth anniversary of the Original Issue
Date, the Corporation shall have the right, at its sole option and election, to
redeem the shares of Preferred Stock, in whole but not in part, on not less than
30 days notice of the date of redemption (any such date an "Optional Redemption
Date") at a price per share (the "Optional Redemption Price") equal to (A) the
Liquidation Preference plus (B) all accrued and unpaid dividends thereon,
whether or not declared or payable, to the applicable Optional Redemption Date,
in immediately available funds.
(b) Mandatory Redemption. To the extent permitted by law,
the Corporation shall redeem, on the eighth anniversary of the Original Issue
Date (or, if such day is not a Business Day, on the first Business Day
thereafter) (the "Mandatory Redemption Date"), all remaining shares of Preferred
Stock then outstanding, for an amount per share (the "Mandatory Redemption
Price") equal to (A) the Liquidation Preference plus (B) all accrued but unpaid
dividends thereon, whether or not declared or payable, to the Mandatory
Redemption Date, in immediately available funds. Prior to authorizing or making
such redemption, the Corporation, by resolution of the Board of Directors shall,
to the extent of funds legally available therefor, declare a dividend on the
Preferred Stock payable on the Mandatory Redemption Date in an amount equal to
any accrued and unpaid dividends on the Preferred Stock as of such date and, if
the Corporation does not have sufficient legally available funds to declare and
pay all
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dividends accrued at the time of such redemption, any remaining accrued and
unpaid dividends shall be added to the Mandatory Redemption Price. After paying
any accrued and unpaid dividends pursuant to the foregoing sentence, if the
funds of the Corporation legally available for redemption of shares of the
Preferred Stock then required to be redeemed are insufficient to redeem the
total number of such shares then outstanding, those funds which are legally
available shall be used to redeem the maximum possible number of shares of the
Preferred Stock, which shares to be redeemed shall be allocated pro rata among
the holders of the Preferred Stock based on the number of shares of Preferred
Stock held by such holders. At any time and from time to time thereafter, when
additional funds of the Corporation are legally available to discharge its
obligation to redeem all of the outstanding shares of Preferred Stock required
to be redeemed pursuant to this Section (the "Mandatory Redemption Obligation"),
such funds shall be immediately used to discharge such Mandatory Redemption
Obligation until the balance of such shares have been redeemed. If and so long
as the Mandatory Redemption Obligation shall not be fully discharged, dividends
on any remaining outstanding shares of Preferred Stock shall continue to accrue
and be added to the dividend payable pursuant to the second preceding sentence.
(c) Change of Control. If, on or prior to the fourth
anniversary of the Original Issue Date, a Change of Control occurs, a holder of
Preferred Stock may at its option require the Corporation to redeem all or a
portion of the holder's shares of Preferred Stock on the Control Redemption Date
(as hereafter defined) at a price per share (the "Control Redemption Price")
equal to (A) 101% of the Liquidation Preference plus (B) all accrued and unpaid
dividends thereon to the Control Redemption Date, whether or not declared or
payable, in immediately available funds. (The Control Redemption Price, Optional
Redemption Price and Mandatory Redemption Price are sometimes referred to as the
"Applicable Redemption Price." The Control Redemption Date, Optional Redemption
Date, and Mandatory Redemption Date are sometimes referred to as the "Applicable
Redemption Date.")
(d) Notice.
(i) The Corporation will provide notice to
holders of record of the Preferred Stock (x) of any redemption pursuant to
Section 5(a) or 5(b) not less than 30 nor more than 60 days prior to the date
fixed for such redemption (a "Redemption Notice") and (y) of any Change of
Control within 10 days of such Change of Control (a "Change of Control Notice").
Any Redemption Notice provided pursuant to this Sec tion 5(d) shall be provided
by first-class mail postage prepaid, to each holder of record of the Preferred
Stock, at such holder's address as it appears on the stock transfer books of the
Corporation and, in addition, any Notice provided pursuant to clause (x) of this
Section 5(d) shall be given by publication in a newspaper of general circulation
in the Borough of Manhattan, The City of New York (if such publication shall be
required by applicable law, rule, regulation or securities exchange
requirement).
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(ii) Each Redemption Notice shall state, as
appropriate, (x) the Applicable Redemption Date; (y) that all the shares of
Preferred Stock will be redeemed; and (z) the Optional Redemption Price or
Mandatory Redemption Price.
(iii) Each Change of Control Notice shall state
that: (w) a Change of Control has occurred and the holder of the Preferred Stock
has the option of requiring the Corporation to redeem all or any portion of its
shares of Preferred Stock; (x) any shares of Preferred Stock not tendered for
redemption will remain outstanding and continue to accrue dividends; (y) the
Control Redemption Price; and (z) the date on which the Corporation must redeem
the shares (the "Control Redemption Date"), which shall be not later than 45
days from the date the Change of Control Notice is mailed.
(iv) In addition, each Redemption Notice and
Change of Control Notice shall state, as appropriate, (v) the place or places
where certificates for such shares are to be surrendered for redemption; (w) the
amount of full cumulative dividends per share of Preferred Stock to be redeemed
up to but excluding the Applicable Redemption Date, and that dividends on shares
of Preferred Stock to be redeemed will cease to accrue on such Redemption Date
unless the Corporation shall default in payment of the Applicable Redemption
Price; (x) the name and location of any bank or trust company with which the
Corporation will deposit redemption funds pursuant to subsection (f) below; (y)
the then-effective Conversion Price; and (z) that the right of holders to
convert shares of Preferred Stock to be redeemed will terminate at the close of
business on the Business Day next preceding the Applicable Redemption Date
(unless the Corporation shall default in the payment of the Applicable
Redemption Price).
Any Notice that is mailed and published pursuant to clause (i) shall be
conclusively presumed to have been duly given, whether or not the holder of
shares of Preferred Stock receives such notice, and failure to give such notice
by mail, or any defect in such notice, to the holders of any shares designated
for redemption shall not affect the validity of the proceedings for the
redemption of any other shares of Preferred Stock.
(e) Mechanics of Redemption. Upon surrender of the
certificate for any shares redeemed pursuant to Section 5(a), (b) or (c) (duly
endorsed or accompanied by appropriate instruments of transfer if so required by
the Corporation), the holders of record of such shares shall be entitled to
receive the Applicable Redemption Price out of funds legally available therefor.
If fewer than all the shares represented by any such certificate are redeemed, a
new certificate representing the unredeemed shares shall be issued without cost
to the holder thereof.
(f) Redemption Funds. On the date of any redemption being
made pursuant to this Section, the Corporation shall, and at any time after
mailing the Redemption Notice or Change of Control Notice and before the
Applicable Redemption Date the Corporation may, deposit for the benefit of the
holders of shares of Preferred Stock to be redeemed the funds necessary for such
redemption with a bank or trust company having a capital and surplus of at least
$500 million, with instructions to such
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bank or trust company to pay the full redemption amounts as provided herein to
the holders of shares of Preferred Stock upon surrender of certificates for such
shares; provided, however, that the making of such deposit shall not release the
Corporation from any of its obligations hereunder. Any moneys so deposited by
the Corporation and unclaimed at the end of twelve months from the Applicable
Redemption Date shall revert to the general funds of the Corporation and, upon
demand, such bank or trust company shall pay over to the Corporation such
unclaimed amounts and thereupon such bank or trust company shall be relieved of
all responsibility in respect thereof and any holder of shares of Preferred
Stock so redeemed shall look only to the Corporation for the payment of the full
redemption amounts, as provided herein.
(g) Rights After Redemption. Notice of redemption having
been given as provided in Section 5(d), upon the deposit pursuant to subsection
(f) of the full redemption amounts as provided herein in respect of all shares
of Preferred Stock then surrendered in accordance with subsection (e), from and
after the Applicable Redemption Date: (i) the shares represented thereby shall
no longer be deemed outstanding, (ii) the right to receive dividends thereon
shall cease to accrue, and (iii) all rights of the holders of such shares of
Preferred Stock shall cease and terminate, excepting only the right to receive
the full redemption amounts as provided herein without interest thereon and the
right to convert such shares of Preferred Stock at any time on or prior to the
Business Day next preceding the Applicable Redemption Date. If the funds
deposited are not sufficient for redemption of the shares of the Preferred Stock
that were to be redeemed, then (a) in the case of redemption pursuant to Section
5(a), no certificates evidencing any shares of Preferred Stock shall be deemed
surrendered and such shares shall remain outstanding and the rights of holders
of shares of Preferred Stock shall continue to be those of holders of shares of
the Preferred Stock or (b) in the case of redemption pursuant to Sections 5(b)
or 5(c), certificates evidencing shares of Preferred Stock for which the
Applicable Redemption Price has not been deposited in full shall not be deemed
surrendered and such shares shall remain outstanding and the rights of holders
of shares of Preferred Stock shall continue to be those of holders of shares of
the Preferred Stock.
Section 6. Reacquired Shares.
Any shares of Preferred Stock converted, exchanged, redeemed,
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares of Preferred Stock shall upon their cancellation become authorized but
unissued shares of preferred stock, par value $0.01 per share, of the
Corporation and, upon the filing of an appropriate Certificate of Designation
with the Secretary of State of the State of Delaware, may be reissued as part of
another series of preferred stock, par value $0.01 per share, of the Corporation
subject to the conditions or restrictions on issuance set forth therein, but in
any event may not be reissued as shares of Preferred Stock or other Parity Stock
unless all of the shares of Preferred Stock shall have already been redeemed or
converted or such issuance is approved in accordance with the terms contained
herein.
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Section 7. Liquidation, Dissolution or Winding Up.
(a) If the Corporation shall commence a voluntary case
under the United States bankruptcy laws or any applicable bankruptcy, insolvency
or similar law of any other country, or consent to the entry of an order for
relief in an involuntary case under any such law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its property,
or make an assignment for the benefit of its creditors, or admit in writing its
inability to pay its debts generally as they become due, or if a decree or order
for relief in respect of the Corporation shall be entered by a court having
jurisdiction in the premises in an involuntary case under the United States
bankruptcy laws or any applicable bankruptcy, insolvency or similar law of any
other country, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of the Corporation or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and on account of any such event the Corporation shall liquidate,
dissolve or wind up, or if the Corporation shall otherwise liquidate, dissolve
or wind up, no distribution shall be made:
(i) to the holders of Preferred Stock, Parity
Stock or Junior Stock unless, prior thereto, the holders of Senior Stock shall
have received the total amounts to which such holders are entitled upon such
liquidation, dissolution or winding up,
(ii) to the holders of shares of Junior Stock
unless, prior thereto, the holders of shares of Preferred Stock, subject to
Section 8, shall have received the Liquidation Preference, plus all accrued and
unpaid dividends, whether or not declared or currently payable, to the date of
distribution, with respect to each share, or
(iii) to the holders of shares of Parity Stock,
except distributions made ratably on the Preferred Stock and all other Parity
Stock in proportion to the total amounts to which the holders of all shares of
the Preferred Stock and other Parity Stock are entitled upon such liquidation,
dissolution or winding up.
(b) Neither the consolidation or merger of the
Corporation with or into any other Person nor the sale or other distribution to
another Person of all or substantially all the assets, property or business of
the Corporation shall be deemed to be a liquidation, dissolution or winding up
of the Corporation for purposes of this Section 7.
Section 8. Voluntary Conversion.
(a) Any holder of Preferred Stock shall have the right,
at its option and, provided that all waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, have expired or terminated, at
any time and from time to time, to convert, subject to the terms and provisions
of this Section 8, any or all of such holder's shares of Preferred Stock into
such number of fully paid and non-
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assessable shares of Class A Common Stock as is equal, subject to Section 8(g),
to the product of the number of shares of Preferred Stock being so converted
multiplied by the quotient of (i) the Liquidation Preference divided by (ii) the
Conversion Price (as defined below) then in effect, except that with respect to
any shares which shall be called for redemption, such right shall terminate on
the Business Day next preceding the Applicable Redemption Date, unless in any
such case the Corporation shall default in performance or payment due upon
redemption thereof. The Conversion Price shall be $23.00, subject to adjustment
as set forth in Section 8(d). Such conversion right shall be exercised by the
surrender of the shares to be converted to the Corporation at any time during
usual business hours at its principal place of business to be maintained by it,
accompanied by written notice that the holder elects to convert such shares of
Preferred Stock and specifying the name or names (with address) in which a
certificate or certificates for shares of Class A Common Stock are to be issued
and (if so required by the Corporation) by a written instrument or instruments
of transfer in form reasonably satisfactory to the Corporation duly executed by
the holder or its duly authorized legal representative and transfer tax stamps
or funds therefor, if required pursuant to Section 8(k). All shares of Preferred
Stock surrendered for conversion shall be delivered to the Corporation for
cancellation and canceled by it and no shares of Preferred Stock shall be issued
in lieu thereof.
(b) As promptly as practicable after the surrender, as
herein provided, of any shares of Preferred Stock for conversion pursuant to
Section 8(a), the Corporation shall deliver to, or upon the written order of,
the holder of such shares so surrendered a certificate or certificates
representing the number of fully paid and non-assessable shares of Class A
Common Stock into which such shares of Preferred Stock may be or have been
converted in accordance with the provisions of this Section 8. Subject to the
following provisions of this paragraph and of Section 8(d), such conversion
shall be deemed to have been made immediately prior to the close of business on
the date that such shares of Preferred Stock shall have been surrendered in
satisfactory form for conversion, and the Person or Persons entitled to receive
the Class A Common Stock deliverable upon conversion of such shares of Preferred
Stock shall be treated for all purposes as having become the record holder or
holders of such Class A Common Stock at such time, and such conversion shall be
at the Conversion Price in effect at such time; provided, however, that no
surrender shall be effective to constitute the Person or Persons entitled to
receive the Class A Common Stock deliverable upon such conversion as the record
holder or holders of such Class A Common Stock while the share transfer books of
the Corporation shall be closed (but not for any period in excess of five days),
but such surrender shall be effective to constitute the Person or Persons
entitled to receive such Class A Common Stock as the record holder or holders
thereof for all purposes immediately prior to the close of business on the next
succeeding day on which such share transfer books are open, and such conversion
shall be deemed to have been made at, and shall be made at the Conversion Price
in effect at the close of business on the date that such shares of Preferred
Stock shall have been surrendered in satisfactory form for conversion.
<PAGE>
12
(c) To the extent permitted by law, when shares of
Preferred Stock are converted, all dividends accrued and unpaid (whether or not
declared or currently payable) on the Preferred Stock so converted to the date
of conversion shall be immediately due and payable and must accompany the shares
of Class A Common Stock issued upon such conversion.
(d) The Conversion Price shall be subject to adjustment
as follows:
(i) In case the Corporation shall at any time or
from time to time after the Original Issue Date (A) pay a dividend or make a
distribution (other than a dividend or distribution paid or made to holders of
shares of Preferred Stock in the manner provided in Section 2(c)) on the
outstanding shares of Class A Common Stock in capital stock (which, for purposes
of this Section 8(d) shall include, without limitation, any options, warrants or
other rights to acquire capital stock) of the Corporation, (B) subdivide the
outstanding shares of Class A Common Stock into a larger number of shares, (C)
combine the outstanding shares of Class A Common Stock into a smaller number of
shares, (D) issue any shares of its capital stock in a reclassification of the
Class A Common Stock or (E) pay a dividend or make a distribution (other than a
dividend or distribution paid or made to holders of shares of Preferred Stock in
the manner provided in Section 2(c)) on the outstanding shares of Class A Common
Stock in securities of the Corporation pursuant to a shareholder rights plan,
"poison pill" or similar arrangement,
then, and in each such case, the Conversion Price in effect immediately prior to
such event shall be adjusted (and any other appropriate actions shall be taken
by the Corporation) so that the holder of any share of Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the number of
shares of Class A Common Stock or other securities of the Corporation that such
holder would have owned or would have been entitled to receive upon or by reason
of any of the events described above, had such share of Preferred Stock been
converted immediately prior to the occurrence of such event. An adjustment made
pursuant to this Section 8(d)(i) shall become effective retroactively (A) in the
case of any such dividend or distribution, to a date immediately following the
close of business on the record date for the determination of holders of Class A
Common Stock entitled to receive such dividend or distribution or (B) in the
case of any such subdivision, combination or reclassification, to the close of
business on the day upon which such corporate action becomes effective.
(ii) In case the Corporation shall at any time or
from time to time after the Original Issue Date issue shares of Common Stock (or
securities convertible into or exchangeable for Class A Common Stock, or any
options, warrants or other rights to acquire shares of Class A Common Stock) for
a consideration per share less than either the Conversion Price or the Current
Market Price per share of Class A Common Stock (in each case, then in effect at
the record date or issuance date, as the case may be (the "Date")) (treating the
price per share of any security convertible or exchangeable or exercisable into
Class A Common Stock as equal to (A) the sum of the
<PAGE>
13
price for such security convertible, exchangeable or exercisable into Class A
Common Stock plus any additional consideration payable (without regard to any
anti-dilution adjustments) upon the conversion, exchange or exercise of such
security into Class A Common Stock divided by (B) the number of shares of Class
A Common Stock initially underlying such convertible, exchangeable or
exercisable security),
then, and in each such case, the Conversion Price then in effect shall be
adjusted by dividing the Conversion Price in effect on the day immediately prior
to the Date by a fraction (x) the numerator of which shall be the sum of the
number of shares of Class A Common Stock outstanding on the Date plus the number
of additional shares of Class A Common Stock issued or to be issued (or the
maximum number into which such convertible or exchangeable securities initially
may convert or exchange or for which such options, warrants or other rights
initially may be exercised) and (y) the denominator of which shall be the sum of
the number of shares of Class A Common Stock outstanding on the Date plus the
number of shares of Class A Common Stock which the aggregate consideration for
the total number of such additional shares of Class A Common Stock so issued or
be issued upon the conversion, exchange or exercise of such convertible or
exchangeable securities or options, warrants or other rights (plus the aggregate
amount of any additional consideration initially payable upon such conversion,
exchange or exercise of such security) would purchase at the greater of the
Conversion Price or Current Market Price per share of Class A Common Stock on
the Date, as the case may be. Notwithstanding the foregoing, the Conversion
Price shall not be adjusted where, pursuant to an arms' length transaction with
a non-Affiliate, the Corporation issues shares of Class A Common Stock (or
securities convertible into or exchangeable for Class A Common Stock or any
options, warrants or other rights to acquire Class A Common Stock) for a
consideration per share less than either the Conversion Price then in effect or
the Current Market Price per share of Class A Common Stock if issued as all or a
portion of the purchase price for the stock or assets of another corporation.
Such adjustment shall be made whenever such shares, securities, options,
warrants or other rights are issued, and shall become effective retroactively to
a date immediately following the close of business (1) in the case of issuance
to stockholders of the Corporation, as such, on the record date for the
determination of stockholders entitled to receive such shares, securities,
options, warrants or other rights and (2) in all other cases, on the date
("issuance date") of such issuance; provided that:
(A) the determination as to whether an
adjustment is required to be made pursuant to this Section 8(d)(ii) shall be
made upon the issuance of such shares or such convertible or exchangeable
securities, options, warrants or other rights;
(B) if any convertible or exchangeable
securities, options, warrants or other rights (or any portions thereof) which
shall have given rise to an adjustment pursuant to Section 8(d)(i) or this
Section 8(d)(ii) shall have expired or terminated without the exercise thereof
and/or if by reason of the terms of such
<PAGE>
14
convertible or exchangeable securities, options, warrants or other rights there
shall have been an increase or increases, with the passage of time or otherwise,
in the price payable upon the exercise or conversion thereof, then the
Conversion Price hereunder shall be readjusted (but to no greater extent than
originally adjusted) on the basis of (x) eliminating from the computation any
additional shares of Class A Common Stock corresponding to such convertible or
exchangeable securities, options, warrants or other rights as shall have expired
or terminated, (y) treating the additional shares of Class A Common Stock, if
any, actually issued or issuable pursuant to the previous exercise of such
convertible or exchangeable securities, options, warrants or other rights as
having been issued for the consideration actually received and receivable
therefor and (z) treating any of such convertible or exchangeable securities,
options, warrants or other rights which remain outstanding as being subject to
exercise or conversion on the basis of such exercise or conversion price as
shall be in effect at this time; and
(C) no adjustment in the Conversion Price
shall be made pursuant to this Section 8(d)(ii) as a result of any issuance of
securities by the Corporation in respect of which an adjustment to the
Conversion Price is made pursuant to Section 8(d)(i).
(iii) In case the Corporation shall at any time or
from time to time after the Original Issue Date distribute to all holders of
shares of its Class A Common Stock (including any such distribution made in
connection with a consolidation or merger in which the Corporation is the
resulting or surviving corporation and the Class A Common Stock is not changed
or exchanged) cash, evidences of indebtedness of the Corporation or another
issuer, securities of the Corporation or another issuer or other assets
(excluding (A) dividends or distributions paid or made to holders of shares of
Preferred Stock in the manner provided in Section 2(c), (B) Regular Dividends,
and (C) dividends payable in shares of Class A Common Stock (or any options,
warrants or other rights to acquire Class A Common Stock) for which adjustment
is made under Sec tion 8(d)(i)) or rights or warrants to subscribe for or
purchase securities of the Corporation (excluding those referred to in Section
8(d)(ii) or those in respect of which an adjustment in the Conversion Price is
made pursuant to Section 8(d)(i) or (ii)), then, and in each such case, the
Conversion Price then in effect shall be adjusted by dividing the Conversion
Price in effect immediately prior to the date of such distribution by a fraction
(x) the numerator of which shall be the Current Market Price of the Class A
Common Stock on the record date referred to below and (y) the denominator of
which shall be such Current Market Price of the Class A Common Stock less the
then Fair Market Value (as determined by the Board of Directors of the
Corporation) of the portion of the cash, evidences of indebtedness, securities
or other assets so distributed or of such subscription rights or warrants
applicable to one share of Class A Common Stock (but such denominator not to be
less than one). Such adjustment shall be made whenever any such distribution is
made and shall become effective retroactively to a date immediately following
the close of business on the record date for the determination of stockholders
entitled to receive such distribution.
<PAGE>
15
(iv) In case the Corporation, at any time or from
time to time after the Original Issue Date, shall take any action affecting its
Class A Common Stock similar to or having an effect similar to any of the
actions described in any of Sec tion 8(d)(i) through Section 8(d)(iii),
inclusive, or Section 8(h) (but not including any action described in any such
Section) and the Board of Directors of the Corporation in good faith determines
that it would be equitable in the circumstances to adjust the Conversion Price
as a result of such action, then, and in each such case, the Conversion Price
shall be adjusted in such manner and at such time as the Board of Directors of
the Corporation in good faith determines would be equitable in the circumstances
(such determination to be evidenced in a resolution, a certified copy of which
shall be mailed to the holders of the Preferred Stock).
(v) Notwithstanding anything herein to the
contrary, no adjustment under this Section 8(d) need be made to the Conversion
Price unless such adjustment would require an increase or decrease of at least
1% of the Conversion Price then in effect. Any lesser adjustment shall be
carried forward and shall be made at the time of and together with the next
subsequent adjustment, which, together with any adjustment or adjustments so
carried forward, shall amount to an increase or decrease of at least 1% of such
Conversion Price. Any adjustment to the Conversion Price carried forward and not
theretofore made shall be made immediately prior to the conversion of any shares
of Preferred Stock pursuant hereto.
(vi) Notwithstanding anything herein to the
contrary, no adjustment under this Section 8(d) shall be made upon the grant of
options pursuant to the Corporation's 1996 Stock Option Plan and Stock Option
Plan for Outside Directors, in each case as in effect on October __, 20001/,
plus additional options not exceeding 480,000 options to employees, consultants
or directors of the Corporation pursuant to benefit plans approved by the Board
of Directors of the Corporation or upon the issuance of shares of Class A Common
Stock upon exercise of such options if the exercise price thereof was not less
than the Market Price of the Common Stock on the date such options were granted.
(e) If the Corporation shall take a record of the holders
of its Class A Common Stock for the purpose of entitling them to receive a
dividend or other distribution, and shall thereafter and before the distribution
to stockholders thereof legally abandon its plan to pay or deliver such dividend
or distribution, then thereafter no adjustment in the Conversion Price then in
effect shall be required by reason of the taking of such record.
(f) Promptly following any increase or decrease in the
Conversion Price, the Corporation shall deliver to each registered holder of
Preferred Stock a certificate, signed by the President or a Vice President and
by the Treasurer or an
----------
1/ As in effect upon signing.
<PAGE>
16
Assistant Treasurer or the Secretary or an Assistant Secretary of the
Corporation, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated and specifying
the increased or decreased Conversion Price then in effect following such
adjustment.
(g) No fractional shares or scrip representing fractional
shares shall be issued upon the conversion of any shares of Preferred Stock. If
more than one share of Preferred Stock shall be surrendered for conversion at
one time by the same holder, the number of full shares of Class A Common Stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
Liquidation Preference of the shares of Preferred Stock so surrendered. If the
conversion of any share or shares of Preferred Stock results in a fraction, an
amount equal to such fraction multiplied by the Current Market Price of the
Class A Common Stock on the Business Day preceding the day of conversion shall
be paid to such holder in cash by the Corporation.
(h) In case of any capital reorganization or
reclassification or other change of outstanding shares of Class A Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value), or in case of any consolidation or merger of the
Corporation with or into another Person (other than a consolidation or merger in
which the Corporation is the resulting or surviving Person and which does not
result in any reclassification or change of outstanding Class A Common Stock),
or in case of any sale or other disposition to another Person of all or
substantially all of the assets of the Corporation (any of the foregoing, a
"Transaction"), the Corporation, or such successor or purchasing Person, as the
case may be, shall execute and deliver to each holder of Preferred Stock at
least 5 Business Days prior to effecting any of the foregoing Transactions a
certificate that the holder of each share of Preferred Stock then outstanding
shall have the right thereafter to convert such share of Preferred Stock into
the kind and amount of shares of stock or other securities (of the Corporation
or another issuer) or property or cash receivable upon such Transaction by a
holder of the number of shares of Class A Common Stock into which such share of
Preferred Stock could have been converted immediately prior to such Transaction.
Such certificate shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
8. If, in the case of any such Transaction, the stock, other securities, cash or
property receivable thereupon by a holder of Class A Common Stock includes
shares of stock or other securities of a Person other than the suc cessor or
purchasing Person and other than the Corporation, which controls or is
controlled by the successor or purchasing Person or which, in connection with
such Transaction, issues stock, securities, other property or cash to holders of
Class A Common Stock, then such certificate also shall be executed by such
Person, and such Person shall, in such certificate, specifically acknowledge the
obligations of such successor or purchasing Person and acknowledge its
obligations to issue such stock, securities, other property or cash to the
holders of Preferred Stock upon conversion of the shares of Preferred Stock as
provided above. The provisions of this Section 8(h) and any equivalent thereof
in any such certificate similarly shall apply to successive Transactions.
<PAGE>
17
(i) In case at any time or from time to time after the
Original Issue Date:
(A) the Corporation shall declare a dividend
(other than a Regular Dividend) (or any other distribution) on its Class A
Common Stock;
(B) the Corporation shall authorize the granting
to the holders of its Class A Common Stock of rights or warrants to subscribe
for or purchase any shares of stock of any class or of any other rights or
warrants, other than pursuant to the grant of options for which, as specified in
Section 8(d)(vi), no adjustment is to be made;
(C) there shall be any reclassification of the
Class A Common Stock, or any consolidation or merger to which the Corporation is
a party and for which approval of any shareholders of the Corporation is
required, or any sale or other disposition of all or substantially all of the
assets of the Corporation; or
(D) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall mail to each holder of shares of Preferred Stock at
such holder's address as it appears on the transfer books of the Corporation, as
promptly as possible but in any event at least 5 days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution or rights or warrants
or, if a record is not to be taken, the date as of which the holders of Class A
Common Stock of record to be entitled to such dividend, distribution or rights
are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, conveyance, dissolution, liquidation or winding up
is expected to become effective. Such notice also shall specify the date as of
which it is expected that holders of Class A Common Stock of record shall be
entitled to exchange their Class A Common Stock for shares of stock or other
securities or property or cash deliverable upon such reclassification,
consolidation, merger, sale, conveyance, dissolution, liquidation or winding up.
(j) The Corporation shall at all times reserve and keep
available for issuance upon the conversion of the Preferred Stock pursuant to
Section 8(a) such number of its authorized but unissued shares of Class A Common
Stock as will from time to time be sufficient to permit the conversion of all
outstanding shares of Preferred Stock, and shall take all action required to
increase the authorized number of shares of Class A Common Stock if at any time
there shall be insufficient authorized but unissued shares of Class A Common
Stock to permit such reservation or to permit the conversion of all outstanding
shares of Preferred Stock.
(k) The issuance or delivery of certificates for Class A
Common Stock upon the conversion of shares of Preferred Stock pursuant to
Section 8(a) shall be made without charge to the converting holder of shares of
Preferred Stock for such certificates
<PAGE>
18
or for any tax in respect of the issuance or delivery of such certificates or
the securities represented thereby, and such certificates shall be issued or
delivered in the respective names of, or (subject to compliance with the
applicable provisions of federal and state securities laws) in such names as may
be directed by, the holders of the shares of Preferred Stock converted;
provided, however, that the Corporation shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate in a name other than that of the holder of the
shares of Preferred Stock converted, and the Corporation shall not be required
to issue or deliver such certificate unless or until the Person or Persons
requesting the issuance or delivery thereof shall have paid to the Corporation
the amount of such tax or shall have established to the reasonable satisfaction
of the Corporation that such tax has been paid.
(l) The Corporation may, one time only, at its option,
reduce the Conversion Price by any amount for any period of time if the period
is at least 20 days and if the reduction is irrevocable during the period. When
the Conversion Price is so reduced, the Corporation shall mail to holders of
record of the Preferred Stock a notice of the reduction of at least 15 days
before the date the reduced Conversion Price takes effect, stating the reduced
Conversion Price and the period it will be in effect. Notwithstanding the
foregoing, any such voluntary reduction of the Conversion Price shall not be
deemed to change or adjust the Conversion Price for purposes of Section 8(d)
above.
Section 9. Certain Remedies.
Any registered holder of Preferred Stock shall be entitled to
an injunction or injunctions to prevent breaches of the provisions of this
Certificate of Designation and to enforce specifically the terms and provisions
of this Certificate of Designation in any court of the United States or any
state thereof having jurisdiction, this being in addition to any other remedy to
which such holder may be entitled at law or in equity.
Section 10. Definitions.
For the purposes of this Certificate of Designation of
Preferred Stock, the following terms shall have the meanings indicated:
"Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act; provided
that "Affiliate" shall not include the Purchaser or any Affiliate of the
Purchaser.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which commercial banks in The City of New York, New York
are authorized or required by law or executive order to close.
A "Change of Control" of the Corporation shall mean such times
as:
<PAGE>
19
(i) Any Person or "group" (within the meaning of
Section 13(d)(3) of the Exchange Act), other than the Fuller Immediate Family,
is or becomes the beneficial owner, directly or indirectly, of outstanding
shares of stock of the Corporation entitling such Person or Persons to exercise
50% or more of the total votes (including the Preferred Stock) entitled to be
cast at a regular or special meeting, or by action by written consent, of
shareholders of the Corporation (the term "beneficial owner" shall be determined
in accordance with Rule 13d-3, promulgated by the Commission under the Exchange
Act);
(ii) A majority of the Board of Directors of the
Corporation shall consist of Persons other than Continuing Directors. The term
"Continuing Director" shall mean any member of the Board of Directors on the
Initial Closing Date (as defined in the Stock Purchase Agreement) and any other
member of the Board of Directors who shall be recommended or elected to succeed
or become a Continuing Director by a majority of Continuing Directors who are
then members of the Board of Directors.
(iii) The shareholders of the Corporation shall
have approved a recapitalization, reorganization, merger, consolidation or
similar transaction, in each case with respect to which all or substantially all
the Persons who were the respective beneficial owners, directly or indirectly,
of the outstanding shares of capital stock (excluding the holders of Preferred
Stock) of the Corporation immediately prior to such recapitalization,
reorganization, merger, consolidation or similar transaction, will own less than
50% of either the combined voting power or the total number of the then
outstanding shares of capital stock of the Corporation resulting from such
recapitalization, reorganization, merger, consolidation or similar transaction;
(iv) The shareholders of the Corporation shall
have approved of the sale or other disposition of all or substantially all the
assets of the Corporation in one transaction or in a series of related
transactions;
(v) Any transaction occurs, the result of which
is that the Class A Common Stock is not required to be registered under Section
12 of the Exchange Act and that the holders of Class A Common Stock do not
receive common stock of the Person surviving such transaction which is required
to be registered under Section 12 of the Exchange Act; or
(vi) Immediately after any merger, consolidation,
recapitalization or similar transaction, any Person or "group" (within the
meaning of Sec tion 13(d)(3) of the Exchange Act) shall be the beneficial
owners, directly or indirectly, of outstanding shares of capital stock of the
Corporation (or any Person surviving such transaction) entitling them
collectively to exercise 50% or more of the total voting power of shares of
capital stock of the Corporation (or the surviving Person in such transaction)
and in connection with or as a result of such transaction, the Corporation (or
such surviving Person) shall have incurred or issued additional indebtedness
such that the total indebtedness so incurred or issued equals at least 50% of
the consideration payable in
<PAGE>
20
such transaction; provided that any such recapitalization shall not be
considered a Change of Control if the holders of the Preferred Stock shall have
been given the right to participate on at least a pari passu basis.
"Class A Common Stock" shall mean the Class A Common Stock of
the Corporation, par value $.01 per share, and having one vote per share.
"Class B Common Stock" shall mean the Class B Common Stock of
the Corporation, par value $.01 per share, and having ten votes per share.
"Common Stock" shall mean and include the Class A Common Stock
and the Class B Common Stock and each other class of capital stock of the
Corporation that does not have a preference over any other class of capital
stock of the Corporation as to dividends or upon liquidation, dissolution or
winding up of the Corporation and, in each case, shall include any other class
of capital stock of the Corporation into which such stock is reclassified or
reconstituted.
"Current Market Price" per share shall mean, on any date
specified herein for the determination thereof, (a) the average daily Market
Price of the Class A Common Stock for those days during the period of 5 days,
ending on such date, which are Trading Days, and (b) if the Class A Common Stock
is not then listed or admitted to trading on any national securities exchange or
quoted in the over-the-counter market, the Market Price on such date.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Securities and Exchange
Commission thereunder.
"Fair Market Value" shall mean (x) if available, the Current
Market Price (determined without reference to the last sentence of the
definition of Market Price) or (y) if there shall be no Current Market Price
available, the amount which a willing buyer, under no compulsion to buy, would
pay a willing seller, under no compulsion to sell, in an arm's-length
transaction (assuming (i) that the Common Stock is valued "as if fully
distributed" and (ii) no consideration is given for minority investment
discounts, or discounts related to illiquidity or restrictions on
transferability).
"Fuller Immediate Family" shall mean Mortimer B. Fuller, III,
his interest in his father's estate and any of his children or grandchildren and
any trust or other Person controlled by, and a majority of the beneficial
ownership interest of which is owned by, any of such individuals, singly or
jointly.
"Junior Stock" shall mean any capital stock of the corporation
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Preferred Stock including, without limitation, the Common
Stock.
<PAGE>
21
"Liquidation Preference" with respect to a share of Preferred
Stock shall mean $1,000.00.
"Market Price" shall mean, per share of Class A Common Stock
on any date specified herein: (a) the closing price per share of the Common
Stock on such date published in The Wall Street Journal or, if no such closing
price on such date is published in The Wall Street Journal, the average of the
closing bid and asked prices on such date, as officially reported on the
principal national securities exchange on which the Class A Common Stock is then
listed or admitted to trading; (b) if the Class A Common Stock is not then
listed or admitted to trading on any national securities exchange but is
designated as a national market system security, the last trading price of the
Class A Common Stock on such date; or (c) if there shall have been no trading on
such date or if the Class A Common Stock is not so designated, the average of
the reported closing bid and asked prices of the Class A Common Stock on such
date as shown by NASDAQ and reported by any member firm of the NYSE, selected by
the Corporation. If neither (a), (b) or (c) is applicable, Market Price shall
mean the Fair Market Value per share determined in good faith by the Board of
Directors of the Corporation which shall be deemed to be Fair Market Value
unless holders of at least a majority of the outstanding shares of Preferred
Stock request that the Corporation obtain an opinion of a nationally recognized
investment banking firm chosen by such holders (at the Corporation's expense),
in which event Fair Market Value shall be as determined by such investment
banking firm.
"NASDAQ" shall mean the National Market System of the NASDAQ
Stock Market.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Original Issue Date" shall mean _________, 2000.
"Parity Stock" shall mean any capital stock of the
corporation, including the Preferred Stock, ranking on a par (either as to
dividends or upon liquidation, dissolu tion or winding up) with the Preferred
Stock.
"Person" shall mean any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind, and shall include any successor (by merger) of such
entity.
"Regular Dividend" shall mean a cash dividend on the Common
Stock declared by the Board of Directors of the Corporation with respect to the
most recently completed quarter of the fiscal year of the Corporation (the
"Quarter"), that satisfies either of the following conditions: (i) the product
of four times the per share amount of such Common Stock cash dividend declared
with respect to such Quarter is less than or equal to 110% of the aggregate per
share amounts of the Common Stock cash dividends
<PAGE>
22
declared and paid with respect to the immediately preceding four fiscal quarters
or (ii) the aggregate per share amounts of Common Stock cash dividends declared
with respect to such Quarter and the immediately preceding three fiscal quarters
is less than or equal to 10% of the consolidated net income of the Corporation
and its Subsidiaries per share of Common Stock (as determined in accordance with
generally accepted accounting principles) for the 12-month period ending on the
last day of such Quarter. In the case of a cash dividend on the Common Stock
declared by the Board of Directors of the Corporation with respect to
semi-annual or annual period during which no quarterly cash dividends were
declared, the preceding formula will be adjusted and applied appropriately to
determine whether such cash dividend is a Regular Dividend.
"Senior Stock" shall mean any capital stock of the Corporation
ranking senior (either as to dividends or upon liquidation, dissolution or
winding up) to the Preferred Stock.
"Stock Purchase Agreement" shall mean the Stock Purchase
Agreement, dated October 19, 2000, by and between the Corporation and The 1818
Fund III, L.P., as the same may be amended from time to time.
"Subsidiary" shall mean, with respect to any person, a
corporation or other entity of which 50% or more of the voting power of the
voting equity securities or equity interest in owned, directly or indirectly, by
such persons.
"Trading Days" shall mean a day on which the national
securities exchanges are open for trading.
Section 11. Modification or Amendment.
Except as specifically set forth herein, modifications or
amendments to this Certificate of Designation may be made by the Corporation
with the consent of the holders of at least 50% of the outstanding shares of
Preferred Stock.
IN WITNESS WHEREOF, Genesee & Wyoming, Inc. has caused this Certificate
to be duly executed in its corporate name on this ____ day of __________, 2000.
GENESEE & WYOMING INC.
By:
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Name:
Title:
