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Series B Preferred Stock
TCI SATELLITE ENTERTAINMENT, INC.
CERTIFICATE OF DESIGNATIONS
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SETTING FORTH A COPY OF A RESOLUTION
CREATING AND AUTHORIZING THE ISSUANCE
OF A SERIES OF PREFERRED STOCK DESIGNATED AS
"CUMULATIVE CONVERTIBLE VOTING PREFERRED STOCK, SERIES B"
ADOPTED BY THE BOARD OF DIRECTORS
OF TCI SATELLITE ENTERTAINMENT, INC.
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The undersigned, an assistant secretary of TCI SATELLITE ENTERTAINMENT,
INC., a Delaware corporation (this "Corporation"), HEREBY CERTIFIES that the
Board of Directors of this Corporation on March 2, 2000, duly adopted the
following resolutions creating a new series of this Corporation's Series
Preferred Stock:
"BE IT RESOLVED, that pursuant to authority expressly granted by the
provisions of Article IV, Section B of the Certificate of Incorporation of this
Corporation, the Board of Directors hereby creates and authorizes the issuance
of a new series of this Corporation's Series Preferred Stock, par value $.01 per
share ("Series Preferred Stock"), and hereby fixes the powers, designations,
dividend rights, voting powers, rights on liquidation, conversion rights,
redemption rights and other preferences and relative, participating, optional or
other special rights and the qualifications, limitations or restrictions of the
shares of such series (in addition to the powers, designations, preferences and
relative, participating, optional or other special rights and the
qualifications, limitations or restrictions thereof set forth in the Certificate
of Incorporation that are applicable to each class and series of this
Corporation's preferred stock, par value $.01 per share ("Preferred Stock")), as
follows:
1. DESIGNATION AND NUMBER. The designation of the series of Series
Preferred Stock, par value $.01 per share, of this Corporation authorized hereby
is "Cumulative Convertible
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Voting Preferred Stock, Series B" (the "Series B Preferred Stock"). The number
of shares constituting the Series B Preferred Stock will be 150,000.
2. CERTAIN DEFINITIONS. Unless the context otherwise requires, the terms
defined in this paragraph 2 will, for all purposes of this Certificate of
Designations, have the meanings herein specified:
"AVERAGE MARKET PRICE": As of any Record Date or Special Record Date for a
dividend payment declared by the Board of Directors, the product of (a) .90 and
(b) the average of the daily Closing Prices of the Series A Common Stock for a
period of 20 consecutive trading days ending on the tenth trading day prior to
such Record Date, appropriately adjusted to take into account any stock
dividends on the Series A Common Stock, or any stock splits, reclassifications
or combinations of the Series A Common Stock, during the period following the
first of such 20 trading days and ending on the last full trading day
immediately preceding the Dividend Payment Date or other date fixed for the
payment of dividends to which such Record Date or Special Record Date, as the
case may be, relates.
"BOARD OF DIRECTORS": The Board of Directors of this Corporation and, to
the extent permitted by law, unless the context indicates otherwise, any
committee thereof authorized with respect to any particular matter to exercise
the power of the Board of Directors of this Corporation with respect to such
matter.
"BUSINESS DAY": Any day other than a Saturday, Sunday or a day on which
banking institutions in Denver, Colorado are not required to be open.
"CAPITAL STOCK": Any and all shares, interests, participations or other
equivalents (however designated) of corporate stock of this Corporation.
"CLOSING PRICE": Of any security for any day (which for this purpose only
will mean the period from 9:30 a.m. to 4:00 p.m. New York time), the last
reported sale price of such security regular way or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the composite tape, or if such security is
not quoted on the composite tape, on the principal United States securities
exchange registered under the Exchange Act on which such security is listed or
admitted to trading, or if such security is not listed or admitted to trading on
any such exchange, the last reported sale price (or the average of the quoted
closing bid and asked prices if there were no reported sales) on The Nasdaq
Stock Market or any comparable quotation system, or if such security is not
quoted on The Nasdaq Stock Market or any comparable system, the average of the
closing bid and asked prices as furnished by any member of the National
Association of Securities Dealers, Inc. selected from time to time by this
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Corporation for that purpose or, in the absence of such quotations, such other
method of determining market value as the Board of Directors will from time to
time deem to be fair.
"COMMON STOCK": The Common Stock, $.01 par value per share, of this
Corporation, and all series thereof now existing or hereafter created, including
the Series A Common Stock and the Series B Common Stock.
"CONVERSION DATE": Of a share of Series B Preferred Stock, the date on
which the requirements for conversion of such Share set forth in paragraph 5(m)
have been satisfied by the holder thereof.
"CONVERSION RATE": The kind and amount of securities, cash or other assets
that as of any date are issuable or deliverable upon conversion of a share of
Series B Preferred Stock. The Conversion Rate of a Share of Series B Preferred
Stock will initially be as set forth in paragraph 5(b), subject to adjustment as
set forth in paragraph 5 of this Certificate of Designations. In the event that
pursuant to paragraph 5 the Series B Preferred Stock becomes convertible into
more than one class or series of capital stock of this Corporation, the term
Conversion Rate, when used with respect to any such class or series, will mean
the number or fraction of shares or other units of such capital stock that as of
any date would be issued upon conversion of a share of Series B Preferred Stock.
"CONVERTIBLE SECURITIES": The Series A Convertible Securities and the
Series B Convertible Securities.
"DEBT INSTRUMENT": Any bond, debenture, note, indenture, guarantee or other
instrument or agreement evidencing any Indebtedness, whether existing at the
Issue Date or thereafter created, incurred, assumed or guaranteed.
"DEFAULT": The occurrence of any of the following events:
(a) the failure of the Corporation to declare and, on or within five days
of the applicable Dividend Payment Date, pay any portion of the accrued
dividends on the Series B Preferred Stock for any Dividend Period;
(b) there has been entered a decree or order for relief in respect of the
Corporation under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable federal or state bankruptcy law or
other similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator, or similar official of the Corporation or of any
substantial part of its properties, or ordering the winding-up or liquidation of
the affairs of the Corporation or an involuntary petition has been filed against
the Corporation and a temporary stay entered, and
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(i) such petition and stay has not be diligently contested, or (ii) any such
petition and stay has continued undismissed for a period of 60 consecutive days;
or
(c) the Corporation has filed a petition, answer, or consent seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable federal or state bankruptcy law or other
similar law, or the Corporation has consented to the institution of proceedings
thereunder or to the filing of any such petition or to the appointment or taking
of possession of a receiver, liquidator, assignee, trustee, custodian,
sequestrator, or other similar official, of the Corporation or of any
substantial part of its properties, or the Corporation has failed generally to
pay its debts as they become due, or has taken any action in furtherance of any
such action.
"DETERMINATION DATE": For any issuance of rights or warrants or any
distribution to which paragraph 5(d) or 5(e) applies, the earlier of (a) the
record date for the determination of stockholders entitled to receive the rights
or warrants or the distribution to which such paragraph applies and (b) the
Ex-Dividend Date for such rights, warrants or distribution.
"DIVIDEND PAYMENT DATE": The last day of each March, June, September and
December, commencing with March 2000, or the next succeeding Business Day if any
such date is not a Business Day.
"DIVIDEND PERIOD": The period from and including the Issue Date to but
excluding the first Dividend Payment Date and, thereafter, each quarterly period
from and including a Dividend Payment Date to but excluding the next Dividend
Payment Date.
"EX-DIVIDEND DATE": The date on which "ex-dividend" trading commences for a
dividend, an issuance of rights or warrants or a distribution to which paragraph
5(c), 5(d) or 5(e) applies in the over-the-counter market or the principal
exchange on which the Series A Common Stock is then quoted or listed.
"EXCHANGE ACT": The Securities Exchange Act of 1934, as amended.
"EXCHANGE OFFER": An issuer tender offer (within the meaning of Rule
13e-4(a)(2) of the rules and regulations promulgated by the Securities and
Exchange Commission under the Exchange Act, as such Rule is in effect on the
date hereof), including, without limitation, one that is effected through the
distribution of rights or warrants, made to holders of Series B Common Stock (or
to holders of other stock of this Corporation receivable by a holder of Shares
upon conversion thereof (or upon conversion of securities receivable by a holder
of Shares upon conversion of such Shares)), to issue stock of this Corporation
or of a Subsidiary of this Corporation and/or other
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property to a tendering stockholder in exchange for shares of Series B Common
Stock (or such other stock) validly tendered pursuant to such issuer tender
offer.
"EXCHANGE PREFERRED STOCK": A series of convertible preferred stock of this
Corporation, having terms, conditions, designations, dividend rights, voting
powers, rights on liquidation and other preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof that are identical, or as nearly so as is practicable in
the judgment of the Board of Directors, to those of the Series B Preferred Stock
for which such Exchange Preferred Stock is exchanged, except that (i) the
liquidation preference will be determined as provided in paragraph 5(h) or 5(i),
as applicable, (ii) the running of any time periods pursuant to the terms of the
Series B Preferred Stock will be tacked to the corresponding time periods in the
Exchange Preferred Stock and (iii) the Exchange Preferred Stock will not be
convertible into, and the holders will have no conversion rights thereunder with
respect to, (x) in the case of a redemption of Redeemable Capital Stock, the
Redeemable Capital Stock redeemed, or the Redemption Securities issued, in the
Redemption Event, and (y) in the case of a Spin Off, the Spin Off Securities.
"EXCHANGE SECURITIES": Stock of this Corporation or of a Subsidiary of this
Corporation that is issued in exchange for shares of Series B Common Stock (or
other stock of this Corporation receivable by a holder of Shares upon conversion
thereof (or upon conversion of securities receivable by a holder of Shares upon
conversion of such Shares)) pursuant to an Exchange Offer; PROVIDED, HOWEVER,
that in the case of an Exchange Offer made to holders of Series A Common Stock
and Series B Common Stock, if the same kind and quantity of stock is issued in
exchange for shares of both Series A Common Stock and Series B Common Stock or
if stock of one class or series is issued in exchange for Series A Common Stock
and the same quantity of stock of a different class or series is issued in
exchange for Series B Common Stock and the differences between such classes or
series are no less favorable to the holders of Series B Common Stock than the
differences between the Series A Common Stock and the Series B Common Stock,
then the Exchange Securities will be the stock issued in exchange for shares of
Series B Common Stock and not the stock issued in exchange for shares of Series
A Common Stock.
"INDEBTEDNESS": Any: (a) liability, contingent or otherwise, of this
Corporation (i) for borrowed money whether or not the recourse of the lender is
to the whole of the assets of this Corporation or only to a portion thereof),
(ii) evidenced by a note, debenture or similar instrument (including a purchase
money obligation) given other than in connection with the acquisition of
inventory or similar property in the ordinary course of business, or (iii) for
the payment of money relating to an obligation under a lease that is required to
be capitalized for financial accounting purposes in accordance with generally
accepted accounting principles; (b) liability of others described in the
preceding clause (a) which this Corporation has guaranteed or which is otherwise
its legal liability; and (c) obligations secured by a mortgage, pledge, lien,
charge or other encumbrance to which the property or assets of this Corporation
are subject whether or not the
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obligations secured thereby have been assumed by or shall otherwise be this
Corporation's legal liability.
"ISSUE DATE": March 16, 2000, such date being the first date on which any
shares of the Series B Preferred Stock are first issued or deemed to have been
issued.
"JUNIOR SECURITIES": All shares of Series A Common Stock, Series B Common
Stock, and any class or series of stock of this Corporation, whether now
existing or hereafter created, to the extent that it ranks junior to the Series
B Preferred Stock as to dividend rights or rights on liquidation. A class or
series of Junior Stock will rank junior to the Series B Preferred Stock as to
dividend rights or rights on liquidation if the holders of shares of Series B
Preferred Stock are entitled to dividend payments or payments of amounts
distributable upon liquidation, dissolution or winding up of the affairs of this
Corporation, as the case may be, in preference or priority to the holders of
shares of such class or series.
"LIQUIDATION PREFERENCE": Measured per Share of the Series B Preferred
Stock as of any date in question (the "Relevant Date") means an amount equal to
the sum of (a) the Stated Value of such Share, plus (b) an amount equal to all
dividends accrued on such Share which pursuant to paragraph 3(c) of this
Certificate of Designations have been added to and remain a part of the
Liquidation Preference as of the Relevant Date, plus (c) for purposes of
paragraph 4, paragraph 5 (except as otherwise provided in paragraph 5(m)) and
paragraph 7 of this Certificate of Designations and the definition of Redemption
Price, an amount equal to all unpaid dividends accrued on the sum of the amounts
specified in clauses (a) and (b) above during the period from and including the
immediately preceding Dividend Payment Date (or the Issue Date if the Relevant
Date is on or prior to the first Dividend Payment Date) to but excluding the
Relevant Date, and, in the case of clauses (b) and (c) hereof, whether or not
such unpaid dividends have been declared or there are any unrestricted funds of
the Corporation legally available for the payment of dividends. In connection
with the determination of the Liquidation Preference of a Share of Series B
Preferred Stock upon redemption, or upon liquidation, dissolution or winding up
of the Corporation or upon a conversion of Shares, the Relevant Date will be the
applicable date of redemption or the date of distribution of amounts payable to
stockholders in connection with any such liquidation, dissolution or winding up
or the applicable Conversion Date.
"MIRROR PREFERRED STOCK": Convertible preferred stock issued by (a) in the
case of a redemption of Redeemable Capital Stock, the issuer of the applicable
Redemption Securities, (b) in the case of a Spin Off, the issuer of the
applicable Spin Off Securities, and (c) in the case of an Exchange Offer, the
issuer of the applicable Exchange Securities, and having terms, conditions,
designations, dividend rights, voting powers, rights on liquidation and other
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof that are identical, or as
nearly so as practicable in the judgment of the Board of Directors, to those
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of the Series B Preferred Stock for which such Mirror Preferred Stock is
exchanged, except that (i) the liquidation preference will be determined as
provided in paragraph 5 (h), 5(i) or 6, as applicable, (ii) the running of any
time periods pursuant to the terms of the Series B Preferred Stock will be
tacked to the corresponding time periods in the Mirror Preferred Stock, and
(iii) the Mirror Preferred Stock will be convertible into the kind and amount of
Redemption Securities, Spin Off Securities or Exchange Securities, as
applicable, and other securities and property that the holder of a share of
Series B Preferred Stock in respect of which such Mirror Preferred Stock is
issued pursuant to the terms hereof would have received (x) in the case of the
redemption of Redeemable Capital Stock, upon such redemption had such shares of
Series B Preferred Stock been converted immediately prior to the effective date
of the Redemption Event, (y) in the case of a Spin Off, in such Spin Off had
such share of Series B Preferred Stock been converted immediately prior to the
record date for such Spin Off and (z) in the case of an Exchange Offer, upon
consummation thereof had such share of Series B Preferred Stock that such holder
elects to tender pursuant to Section 6 been converted and the shares of Series B
Common Stock received upon such conversion been tendered in full pursuant to
such Exchange Offer prior to the expiration thereof and the same percentage of
such tendered shares had been accepted for exchange as the percentage of validly
tendered shares of Series B Common Stock were accepted for exchange pursuant to
such Exchange Offer, as the case may be.
"PARITY SECURITIES": (a) Any class or series of stock of this Corporation,
whether now existing or hereafter created, ranking on a parity basis with the
Series B Preferred Stock as to dividend rights or rights on liquidation. Stock
of any class or series will rank on a parity basis as to dividend rights or
rights on liquidation with the Series B Preferred Stock, whether or not the
dividend rates, dividend payment dates or liquidation prices per share are
different from those of the Series B Preferred Stock, if the holders of shares
of such class or series are entitled to dividend payments or payments of amounts
distributable upon liquidation, dissolution or winding up of the affairs of this
Corporation, as the case may be, in proportion to their respective accumulated
and accrued and unpaid dividends or liquidation prices, respectively, without
preference or priority, one over the other, as between the holders of shares of
such class or series and the holders of Series B Preferred Stock. No class or
series of capital stock that ranks junior to the Series B Preferred Stock as to
rights on liquidation will rank or be deemed to rank on a parity basis with the
Series B Preferred Stock as to dividend rights unless the instrument creating or
evidencing such class or series of capital stock otherwise expressly provides;
and (b) the Series A Preferred Stock.
"PERSON": A natural person, corporation, limited liability company,
partnership or other legal entity.
"RECORD DATE": For the dividends payable on any Dividend Payment Date, the
15th day of the month during which such Dividend Payment Date occurs as and if
designated by the Board of Directors.
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"REDEEMABLE CAPITAL STOCK": A class or series of Capital Stock of this
Corporation that provides by its terms a right in favor of this Corporation to
call, redeem, exchange or otherwise acquire all of the outstanding shares or
units of such class or series.
"REDEMPTION DATE": As to any Share, the date, which shall be a Business
Day, fixed for redemption of such Share as specified in the notice of redemption
given in accordance with paragraph 7(c), provided that no such date will be a
Redemption Date unless the applicable Redemption Price is actually paid on such
date or the consideration sufficient for the payment thereof, and for no other
purpose, has been set apart, and if the Redemption Price is not so paid in full
or the consideration sufficient therefor so set apart then the Redemption Date
will be the date, which shall be a Business Day, on which such Redemption Price
is fully paid or the consideration sufficient for the payment thereof, and for
no other purpose, has been set apart.
"REDEMPTION PRICE": As to any Share that is to be redeemed on any
Redemption Date, the Liquidation Preference as in effect on such Redemption
Date.
"REDEMPTION SECURITIES": With respect to the redemption of any Redeemable
Capital Stock, stock of a Subsidiary of this Corporation that is distributed by
this Corporation in payment, in whole or in part, of the redemption price of
such Redeemable Capital Stock.
"SENIOR SECURITIES": Any class or series of stock of this Corporation,
whether now existing or hereafter created, ranking senior to the Series B
Preferred Stock as to dividend rights or rights on liquidation. Stock of any
class or series will rank senior to the Series B Preferred Stock as to dividend
rights or rights on liquidation if the holders of shares of such class or series
are entitled to dividend payments or payments of amounts distributable upon
dissolution, liquidation or winding up of the affairs of this Corporation, as
the case may be, in preference or priority to the holders of shares of Series B
Preferred Stock. No class or series of capital stock that ranks on a parity
basis with or junior to the Series B Preferred Stock as to rights on liquidation
will rank or be deemed to rank prior to the Series B Preferred Stock as to
dividend rights, notwithstanding that the dividend rate or dividend payment
dates thereof are different from those of the Series B Preferred Stock, unless
the instrument creating or evidencing such class or series of capital stock
otherwise expressly provides.
"SERIES A COMMON STOCK": The Series A Common Stock, par value $.01 per
share, of this Corporation, as such exists on the date of this Certificate of
Designations, and Capital Stock of any other class or series into which such
Series A Common Stock may thereafter have been changed.
"SERIES A CONVERTIBLE SECURITIES": Securities, other than the Series B
Common Stock, that are convertible into or exercisable or exchangeable for
Series A Common Stock at the option
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of the holder thereof, or which otherwise entitle the holder thereof to
subscribe for, purchase or otherwise acquire Series A Common Stock.
"SERIES A PREFERRED STOCK": The Cumulative Preferred Stock, Series A, par
value $.01 per share, of this Corporation.
"SERIES B COMMON STOCK": The Series B Common Stock, par value $.01 per
share, of this Corporation, as such exists on the date of this Certificate of
Designations, and Capital Stock of any other class or series into which such
Series B Common Stock may thereafter have been changed.
"SERIES B CONVERTIBLE SECURITIES": Securities that are convertible into or
exercisable or exchangeable for Series B Common Stock at the option of the
holder thereof or which otherwise entitle the holder thereof to subscribe for,
purchase or otherwise acquire Series B Common Stock.
"SHARE": A share of Series B Preferred Stock.
"SPIN OFF": The distribution of stock of a Subsidiary of this Corporation
as a dividend to all holders of Series B Common Stock (or to holders of other
stock of this Corporation receivable by a holder of Shares upon conversion
thereof (or upon conversion of securities receivable by a holder of Shares upon
conversion of such Shares)).
"SPIN OFF SECURITIES": Stock of a Subsidiary of this Corporation that is
distributed to holders of Series B Common Stock (or to holders of other stock of
this Corporation receivable by a holder of Shares upon conversion thereof (or
upon conversion of securities receivable by a holder of Shares upon conversion
of such Shares)) in a Spin Off; PROVIDED, HOWEVER, that in the case of a Spin
Off distribution made to holders of Series A Common Stock and Series B Common
Stock, if the same kind and quantity of stock is distributed with respect to
both Series A Common Stock and Series B Common Stock or if stock of one class or
series is distributed with respect to Series A Common Stock and the same
quantity of stock of a different class or series is distributed with respect to
Series B Common Stock and the differences between such classes or series are no
less favorable to the holders of Series B Common Stock than the differences
between the Series A Common Stock and the Series B Common Stock, then the Spin
Off Securities will be the stock distributed with respect to shares of Series B
Common Stock and not the stock distributed with respect to shares of Series A
Common Stock.
"STATED VALUE": Of a Share of the Series B Preferred Stock, $1,000.
"SUBSIDIARY": With respect to any person, any corporation, limited
liability company, partnership or other legal entity more than 50% of whose
outstanding voting securities or
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membership, partnership or other ownership interests, as the case may be, are
directly or indirectly owned by such person.
3. DIVIDENDS.
(a) Subject to the prior preferences and other rights of any Senior
Securities, the holders of Series B Preferred Stock will be entitled to receive
cumulative dividends, in preference to dividends on any Junior Securities, which
will accrue as provided herein. Dividends on each Share will accrue on a daily
basis at the rate of 8% per annum on the amount of the Liquidation Preference of
such Share from and including the Issue Date to but excluding the date on which
the Liquidation Preference or Redemption Price of such Share is made available
pursuant to paragraph 4 or 7, respectively, of this Certificate of Designations
or the Conversion Date of such Share pursuant to paragraph 5 hereof, as
applicable, PROVIDED, HOWEVER, that on and after the occurrence and during the
continuance of a Default, the dividend rate will be 10% per annum, rather than
8% per annum. Dividends will accrue as provided herein whether or not such
dividends have been declared and whether or not there are any unrestricted funds
of this Corporation legally available for the payment of dividends. Accrued
dividends on the Series B Preferred Stock will be payable quarterly on each
Dividend Payment Date to the holders of record of the Series B Preferred Stock
as of the close of business on the applicable Record Date. For purposes of
determining the amount of dividends "accrued" (i) as of the first Dividend
Payment Date and as of any date that is not a Dividend Payment Date, such amount
will be calculated on the basis of the rate per annum specified above in this
paragraph 3(a) for the actual number of days elapsed from and including the
Issue Date (in the case of the first Dividend Payment Date and any date prior to
the first Dividend Payment Date) or the last preceding Dividend Payment Date (in
the case of any other date) to but excluding the date as of which such
determination is to be made, based on a 365-day year, and (ii) as of any
Dividend Payment Date after the first Dividend Payment Date, such amount will be
calculated on the basis of such rate per annum based on a 360-day year of twelve
30-day months.
(b) For all Dividend Periods ending on or prior to March 31, 2003, all
dividends payable with respect to the Shares may be declared and paid, in the
sole discretion of the Board of Directors, in cash, through the issuance of
Series A Common Stock or in any combination of the foregoing, except as
otherwise provided in paragraph 5 in connection with the Conversion of a Share.
For all Dividend Periods ending after March 31, 2003, all dividends payable with
respect to the Shares will be declared and paid in cash. If any dividend payment
declared by the Board of Directors with respect to the shares of Series B
Preferred Stock is to be paid in whole or in part through the issuance of shares
of Series A Common Stock, the amount of such dividend payment to be paid per
share of Series B Preferred Stock in shares of Series A Common Stock (the "Stock
Dividend Amount") will be satisfied and paid by the delivery to the holders of
record of such shares of Series B Preferred Stock on the Record Date or Special
Record Date (as defined below) for such dividend payment, of a number of shares
of Series A Common Stock determined by dividing the
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Stock Dividend Amount by the Average Market Price of a share of Series A Common
Stock as of such Record Date or Special Record Date. The Corporation will not be
required to issue any fractional share of Series A Common Stock to which any
holder of Series B Preferred Stock may become entitled pursuant to this
paragraph 3(b). The Board of Directors may elect to settle any final fraction of
a share of Series A Common Stock which a holder of one or more shares of Series
B Preferred Stock would otherwise be entitled to receive pursuant to this
paragraph 3(b) by having the Corporation pay to such holder, in lieu of issuing
such fractional share, cash in an amount (rounded upward to the nearest whole
cent) equal to the same fraction of the Average Market Price of a share of
Series A Common Stock as of the Record Date or Special Record Date, as the case
may be, for the dividend payment with respect to which such shares of Series A
Common Stock are being delivered. Such election, if made, will be made as to all
holders of Series B Preferred Stock who would otherwise be entitled to receive a
fractional share of Series A Common Stock on the Dividend Payment Date or other
date fixed for the payment of such dividend. Payment of such dividends as
provided herein will be deemed to have been made, if paid in cash, when such
payment has been delivered by wire transfer of immediately available funds to
the record holders of the Series B Preferred Stock entitled to receive the same,
in accordance with the instructions of such holders delivered in writing to the
Corporation at least two Business Days prior to any Dividend Payment Date (or if
no such instructions are received, by mail to the address of such record holder
on the books of the Corporation), or, if paid in shares of Series A Common
Stock, when shares of Series A Common Stock have been issued to the record
holders of the Series B Preferred Stock entitled to receive the same. All
dividends paid with respect to the Shares pursuant to this paragraph 3 will be
paid PRO RATA to all the holders of Shares outstanding on the applicable Record
Date or Special Record Date, as the case may be.
(c) If on any Dividend Payment Date this Corporation, pursuant to
applicable law or otherwise, is prohibited or restricted from paying the full
dividends to which holders of Series B Preferred Stock, and any Parity
Securities ranking on a parity basis with the Series B Preferred Stock with
respect to the right to receive dividend payments, are entitled, the amount
available for such payment pursuant to applicable law and which is not otherwise
restricted (if any) will be distributed among the holders of Series B Preferred
Stock and any such Parity Securities ratably in proportion to the full amounts
to which they would otherwise be entitled. On each Dividend Payment Date, all
dividends that have accrued on each share of Series B Preferred Stock during the
Dividend Period ending on such Dividend Payment Date will, to the extent not
paid on such Dividend Payment Date for any reason (whether or not such unpaid
dividends have been declared or there are any unrestricted funds of this
Corporation legally available for the payment of dividends), be added
cumulatively to the Liquidation Preference of such Share and will remain a part
thereof until such dividends are paid. That portion of the Liquidation
Preference of a Share that consists of accrued unpaid dividends, together with
all dividends accrued in respect thereof, may be declared and paid at any time
(subject to the rights of any Senior Securities and to the concurrent
satisfaction of any dividend arrearages then existing with respect to any Parity
Securities that rank
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on a parity basis with the Series B Preferred Stock as to the payment of
dividends), without reference to any regular Dividend Payment Date, to holders
of record as of the close of business on such date, not more than 45 days nor
less than 10 days preceding the payment date thereof, as may be fixed by the
Board of Directors (the "Special Record Date"). Notice of each Special Record
Date will be given, not more than 45 days nor less than 10 days prior thereto,
to the holders of record of the Shares. Any dividend payment made on the Shares
will first be credited against the earliest accrued but unpaid dividend due with
respect to such Shares.
(d) If at any time this Corporation fails to pay, or declare and set
aside the consideration sufficient to pay, full cumulative dividends on the
Series B Preferred Stock for all Dividend Periods ending on or before the
immediately preceding Dividend Payment Date, and until full cumulative dividends
on the Series B Preferred Stock for all Dividend Periods ending on or before the
immediately preceding Dividend Payment Date are paid, or declared and the
consideration sufficient to pay the same in full is set aside so as to be
available for such purpose and no other purpose, (i) this Corporation will not
redeem, or discharge any sinking fund obligation with respect to, any Shares,
Parity Securities or Junior Securities, or set aside any money or assets for any
such purpose, unless all then outstanding Shares are redeemed pursuant to the
terms hereof, (ii) this Corporation will not declare or pay any dividend on or
make any distribution with respect to any Junior Securities or Parity Securities
or set aside any money or assets for any such purpose, except that this
Corporation may declare and pay a dividend on any Parity Securities ranking on a
parity basis with the Series B Preferred Stock with respect to the right to
receive dividend payments, contemporaneously with the declaration and payment of
a dividend on the Series B Preferred Stock, PROVIDED that such dividends are
declared and paid PRO RATA so that the amount of dividends declared and paid per
share of Series B Preferred Stock and such Parity Securities will in all cases
bear to each other the same ratio that accumulated and accrued and unpaid
dividends per share on the Series B Preferred Stock and such Parity Securities
bear to each other, and (iii) neither this Corporation nor any Subsidiary
thereof will purchase or otherwise acquire any Shares, Parity Securities or
Junior Securities.
Nothing contained in the preceding paragraph of this paragraph 3(d) will
prevent (x) the payment of dividends on any Junior Securities solely in shares
of Junior Securities or the redemption, purchase or other acquisition of Junior
Securities solely in exchange for shares of Junior Securities, (y) the payment
of dividends on any Parity Securities solely in shares of Junior Securities or
the redemption, exchange, purchase or other acquisition of Series B Preferred
Stock or Parity Securities solely in exchange for (together with a cash
adjustment for fractional shares, if any) shares of Junior Securities, or (z)
the purchase or acquisition of Shares pursuant to a purchase or exchange offer
or offers made to all holders of outstanding shares of Series B Preferred Stock,
PROVIDED that the terms of the purchase or exchange offer are identical for all
shares of Series B Preferred Stock and all accrued dividends on such Shares have
been paid or have been declared and irrevocably set apart in trust for the
benefit of the holders of shares of Series B Preferred Stock and for no other
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purpose. The provisions of this paragraph 3(d) are for the benefit of the
holders of Series B Preferred Stock and accordingly the provisions of this
paragraph 3(d) will not restrict any redemption or purchase by this Corporation
or a Subsidiary thereof of Shares held by any holder, provided that all other
holders of Shares have waived in writing the benefits of this provision with
respect to such redemption.
4. LIQUIDATION. Upon any liquidation, dissolution or winding up of this
Corporation, whether voluntary or involuntary, the holders of Series B Preferred
Stock will be entitled to be paid an amount in cash equal to the aggregate
Liquidation Preference at the date of payment of all Shares outstanding, which
amounts will be paid (x) before any distribution or payment upon any such
liquidation, dissolution or winding up of this Corporation is made upon any
Junior Securities, (y) on a PARI PASSU basis with any such payment made to the
holders of any Parity Securities, and (z) after any such payment is made upon
any Senior Securities. The holders of Series B Preferred Stock will be entitled
to no other or further distribution of or participation in any remaining assets
of this Corporation after receiving the full preferential amounts provided for
in the preceding sentence. If upon such liquidation, dissolution or winding up,
the assets of this Corporation to be distributed among the holders of Series B
Preferred Stock and to all holders of Parity Securities are insufficient to
permit payment in full to such holders of the aggregate preferential amounts
which they are entitled to be paid, then the entire assets of this Corporation
to be distributed to such holders will be distributed ratably among them based
upon the full preferential amounts to which the shares of Series B Preferred
Stock and such Parity Securities would otherwise respectively be entitled. Upon
any such liquidation, dissolution or winding up, after the holders of Series B
Preferred Stock and Parity Securities have been paid in full the amounts to
which they are entitled, the remaining assets of this Corporation may be
distributed to the holders of Junior Securities. This Corporation will mail
written notice of such liquidation, dissolution or winding up to each record
holder of Series B Preferred Stock not less than 20 days prior to the payment
date stated in such written notice. Neither the consolidation or merger of this
Corporation into or with any other corporation or corporations, nor the sale,
transfer or lease by this Corporation of all or any part of its assets, will be
deemed to be a liquidation, dissolution or winding up of this Corporation within
the meaning of this paragraph 4.
5. CONVERSION.
(a) Except as provided below in this paragraph 5(a) with respect to
Shares previously called for redemption as provided in paragraph 7 hereof, the
Series B Preferred Stock may be converted at any time on or after March 16,
2002, at the option of the holder thereof, in such manner and upon such terms
and conditions as hereinafter provided in this paragraph 5 into fully paid and
non-assessable full shares of Series B Common Stock. In the case of Shares
called for redemption by this Corporation pursuant to paragraph 7(a) hereof, the
conversion right provided by this paragraph 5 will terminate at the close of
business on the Redemption Date. In the case of
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Shares required to be redeemed pursuant to paragraph 7(b), the conversion right
provided by this paragraph 5 will terminate immediately upon receipt by this
Corporation of a notice given pursuant to said paragraph; PROVIDED, HOWEVER,
that such right will be reinstated as of the day following the date fixed for
redemption of such Share as specified in the notice of redemption given in
accordance with paragraph 7(c) unless the applicable Redemption Price is
actually paid on such date or the consideration sufficient for the payment
thereof, and for no other purpose, has been set apart. In case securities, cash
or other assets other than Series B Common Stock are payable, deliverable or
issuable upon conversion as provided herein, then all references to Series B
Common Stock in this paragraph 5 will be deemed to apply, so far as appropriate
and as nearly as may be, to such securities, cash or other assets.
(b) Subject to the provisions for adjustment hereinafter set forth in
this paragraph 5, the Series B Preferred Stock may be converted into Series B
Common Stock at the initial conversion rate of 113.1145 fully paid and
non-assessable shares of Series B Common Stock for one share of the Series B
Preferred Stock, which rate was determined by dividing the Stated Value of a
Share of Series B Preferred Stock by $8.8406 (the "initial conversion price").
If on any Conversion Date, the Liquidation Preference of a Share of Series B
Preferred Stock is greater than the Stated Value of such Share (the amount of
such difference, the "Differential Amount"), then the number of shares of Series
B Common Stock or units of securities, cash or other assets otherwise issuable
or deliverable upon conversion of such Share will be increased by an amount
determined by dividing the Differential Amount by the Effective Conversion Price
of such Share. The "Effective Conversion Price" of a Share as of a Conversion
Date means the quotient obtained by dividing the Stated Value of such Share by
the Conversion Rate then in effect, in each case, before giving effect to the
adjustment contemplated by the preceding sentence.
(c) In case this Corporation, on or after the Issue Date, (i) pays a
dividend or makes a distribution on its then outstanding shares of Series B
Common Stock in shares of Series B Common Stock, (ii) subdivides the then
outstanding shares of Series B Common Stock into a greater number of shares of
Series B Common Stock, (iii) combines the then outstanding shares of Series B
Common Stock into a smaller number of shares of Series B Common Stock, (iv) pays
a dividend or makes a distribution on its then outstanding shares of Series B
Common Stock in shares of its Capital Stock or Convertible Securities (other
than Series B Common Stock or rights or warrants for its Capital Stock or for
its Convertible Securities), or (v) issues by reclassification of its then
outstanding shares of Series B Common Stock (other than a reclassification by
way of merger or binding share exchange that is subject to paragraph 5(g)) any
shares of any other class or series of Capital Stock of this Corporation (other
than rights, warrants or options for its Capital Stock), then, subject to the
following sentence and to paragraph 5(k), the conversion privilege and the
Conversion Rate in effect immediately prior to the opening of business on the
record date for such dividend or distribution or the effective date of such
subdivision, combination or reclassification will be adjusted so that the holder
of each share of the Series B Preferred Stock
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thereafter surrendered for conversion will be entitled to receive the number and
kind of shares of Capital Stock of this Corporation that such holder would have
owned or been entitled to receive immediately following such action had such
shares of Series B Preferred Stock been converted immediately prior to the
record date for, or effective date of, as the case may be, such event.
An adjustment made pursuant to this paragraph 5(c) for a dividend or
distribution will become effective immediately after the record date for the
dividend or distribution and an adjustment made pursuant to this paragraph 5(c)
for a subdivision, combination or reclassification will become effective
immediately after the effective date of the subdivision, combination or
reclassification. Such adjustment will be made successively whenever any action
listed above is taken.
Any shares of Series B Common Stock issuable in payment of a dividend will
be deemed to have been issued immediately prior to the time of the record date
for such dividend for purposes of calculating the number of outstanding shares
of Series B Common Stock under paragraph 5(d) below.
(d) In case this Corporation, on or after the Issue Date, distributes
any rights or warrants to all holders of shares of Series B Common Stock
entitling them (for a period expiring within 45 days after the record date for
the determination of stockholders entitled to receive such rights or warrants)
to subscribe for or purchase shares of Series B Common Stock (or Series B
Convertible Securities) at a price per share of Series B Common Stock (or having
an initial exercise price or conversion price per share of Series B Common
Stock, after adding thereto an allocable portion of the exercise price of the
right or warrant to purchase such Series B Convertible Securities, computed on
the basis of the maximum number of shares of Series B Common Stock issuable upon
conversion of such Series B Convertible Securities) less than the current market
price per share of Series B Common Stock (as determined in accordance with the
provisions of paragraph 5(f) below) on the Determination Date, the number of
shares of Series B Common Stock into which each Share shall thereafter be
convertible will be determined by multiplying the number of shares of Series B
Common Stock into which such Share was theretofore convertible immediately prior
to the opening of business on such record date by a fraction of which the
numerator will be the number of shares of Series B Common Stock outstanding on
such record date plus the number of additional shares of Series B Common Stock
offered for subscription or purchase (or into which the Series B Convertible
Securities so offered are initially convertible) and of which the denominator
will be the number of shares of Series B Common Stock outstanding on such record
date plus the number of shares of Series B Common Stock which the aggregate
offering price of the total number of shares of Series B Common Stock so offered
(or the aggregate initial conversion or exercise price of the Series B
Convertible Securities so offered, after adding thereto the aggregate exercise
price of the rights or warrants to purchase such Series B Convertible
Securities) would purchase at the current market price per share of Series B
Common Stock (as determined in accordance with the provisions of paragraph 5(f)
below) on the Determination Date. Such adjustment will be made successively
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whenever any such rights or warrants are issued and will become effective
immediately after the record date for the determination of stockholders entitled
to receive such rights or warrants. In the event that all of the shares of
Series B Common Stock (or all of the Series B Convertible Securities) subject to
such rights or warrants have not been issued when such rights or warrants expire
(or, in the case of rights or warrants to purchase Series B Convertible
Securities which have been exercised, all of the shares of Series B Common Stock
issuable upon conversion of such Series B Convertible Securities have not been
issued prior to the expiration of the conversion right thereof), then the
Conversion Rate will be readjusted retroactively to be the Conversion Rate which
would then be in effect had the adjustment upon the issuance of such rights or
warrants been made on the basis of the actual number of shares of Series B
Common Stock (or Series B Convertible Securities) issued upon the exercise of
such rights or warrants (or the conversion of such Series B Convertible
Securities); but such subsequent adjustment will not affect the number of shares
of Series B Common Stock issued upon the conversion of any Share prior to the
date such subsequent adjustment is made. No adjustment will be made under this
paragraph 5(d) if the adjusted Conversion Rate would be lower than the
Conversion Rate in effect immediately prior to such adjustment.
(e) In case this Corporation, on or after the Issue Date, distributes
to all holders of shares of Series B Common Stock any evidences of its
indebtedness or assets or rights or warrants to purchase shares of Series A
Common Stock (or Series A Convertible Securities) or Series B Common Stock (or
Series B Convertible Securities) (excluding (x) dividends or distributions
referred to in paragraph 5(c), distributions of rights or warrants referred to
in paragraph 5(d), distributions of Spin Off Securities referred to in paragraph
5(i) and distributions of rights or warrants exercisable for Exchange Securities
(which will be governed by paragraph 6) and (y) cash dividends or distributions
unless such cash dividends or cash distributions are Extraordinary Cash
Dividends), then in each such case the number of shares of Series B Common Stock
into which each Share is thereafter convertible will be determined by
multiplying the number of shares of Series B Common Stock into which such Share
was theretofore convertible immediately prior to the opening of business on (A)
the record date for the determination of stockholders entitled to receive the
distribution or (B) in the case of a reclassification, the effective date of
such reclassification, by a fraction of which the numerator will be the current
market price per share of the Series B Common Stock (as determined in accordance
with the provisions of paragraph 5(f) below) on the Determination Date and of
which the denominator will be such current market price per share of Series B
Common Stock less the fair market value (as determined by the Board of Directors
of this Corporation, whose determination will be conclusive) on such record date
or effective date of the portion of the assets or evidences of indebtedness or
rights or warrants so to be distributed applicable to one share of Series B
Common Stock; PROVIDED, HOWEVER, that in the event the denominator of the
foregoing fraction is zero or negative, in lieu of the foregoing adjustment,
adequate provision will be made so that each holder of a Share will have the
right to receive upon conversion of such Share, in addition to the shares of
Series B Common Stock to which the holder is entitled, the assets or evidences
of indebtedness or rights or warrants such holder would have received had such
holder
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converted such Share immediately prior to the record date for such distribution.
Such adjustment will be made successively whenever any such distribution is made
and will become effective immediately after the record date for the
determination of stockholders entitled to receive such distribution. No
adjustment will be made under this paragraph 5(e) if the adjusted Conversion
Rate would be lower than the Conversion Rate in effect immediately prior to such
adjustment.
For purposes of this paragraph 5(e), the term "Extraordinary Cash Dividend"
will mean any cash dividend with respect to the Series B Common Stock the amount
of which, together with the aggregate amount of cash dividends on the Series B
Common Stock to be aggregated with such cash dividend in accordance with the
following provisions of this paragraph, equals or exceeds the threshold
percentage set forth below in the following sentence. If, upon the date prior to
the Ex-Dividend Date with respect to a cash dividend on Series B Common Stock,
the aggregate of the amount of such cash dividend together with the amounts of
all cash dividends on the Series B Common Stock with Ex-Dividend Dates occurring
in the 365 consecutive day period ending on the date prior to the Ex-Dividend
Date with respect to the cash dividend to which this provision is being applied
(other than any such other cash dividends with Ex-Dividend Dates occurring in
such period for which a prior adjustment in the Conversion Rate was previously
made under this paragraph 5(e)) equals or exceeds on a per share basis 10% of
the average of the Closing Prices during the period beginning on the date after
the first such Ex-Dividend Date in such period and ending on the date prior to
the Ex-Dividend Date with respect to the cash dividend to which this provision
is being applied (except that if no other cash dividend has had an Ex-Dividend
Date occurring in such period, the period for calculating the average of the
Closing Prices will be the period commencing 365 days prior to the date
immediately prior to the Ex-Dividend Date with respect to the cash dividend to
which this provision is being applied), such cash dividend together with each
other cash dividend with an Ex-Dividend Date occurring in such 365-day period
that is aggregated with such cash dividend in accordance with this paragraph
will be deemed to be an Extraordinary Cash Dividend.
(f) For the purpose of any computation under paragraph 5(d) or 5(e)
the current market price per share of Series B Common Stock on any Determination
Date or date of issuance, as the case may be, will be deemed to be the product
of (i) the number of shares of Series A Common Stock into which a share of
Series B Common Stock is then convertible at the option of the holder thereof
times (ii) the average of the daily Closing Prices for a share of Series A
Common Stock for the 10 consecutive trading days before the Determination Date
in question, appropriately adjusted to take into account any stock dividends on
the Series A Common Stock or any stock splits, reclassifications or combinations
of the Series A Common Stock, during the period following the first of such 10
trading days and ending on the last full trading day immediately preceding the
Determination Date or date of issuance, as the case may be.
(g) If this Corporation consolidates with any other entity or merges
into another entity, or in case of any sale or transfer to another entity (other
than by mortgage or pledge)
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of all or substantially all of the properties and assets of this Corporation, or
if the Corporation is a party to a merger or binding share exchange which
reclassifies or changes its outstanding Series B Common Stock, this Corporation
(or its successor in such transaction) or the purchaser of such properties and
assets will make appropriate provision so that the holder of a Share will have
the right thereafter to convert such Share into the kind and amount of
securities, cash or other assets that such holder would have owned immediately
after such consolidation, merger, sale or transfer if such holder had converted
such Share into Series B Common Stock immediately prior to the effective date of
such consolidation, merger, sale or transfer (taking into account for this
purpose (to the extent applicable) the valid exercise by such holder of any
rights of election made available to holders of Series B Common Stock, which
rights of election will simultaneously be made available to holders of Shares on
the same basis as if such Shares had theretofore been converted into shares of
Series B Common Stock), and the holders of the Series B Preferred Stock will
have no other conversion rights under these provisions; PROVIDED that effective
provision will be made, in the Articles or Certificate of Incorporation of the
resulting or surviving corporation or otherwise or in any contracts of sale or
transfer, so that the provisions set forth herein for the protection of the
conversion rights of the Series B Preferred Stock will thereafter be made
applicable, as nearly as reasonably may be, to any such other securities and
other assets deliverable upon conversion of the Series B Preferred Stock
remaining outstanding or other convertible preferred stock or other convertible
securities received by the holders of Series B Preferred Stock in place thereof;
and PROVIDED, FURTHER, that any such resulting or surviving corporation or
purchaser will expressly assume the obligation to deliver, upon the exercise of
the conversion privilege, such securities, cash or other assets as the holders
of the Series B Preferred Stock remaining outstanding, or other convertible
preferred stock or other convertible securities received by the holders in place
thereof, will be entitled to receive pursuant to the provisions hereof, and to
make provision for the protection of the conversion rights as above provided.
(h) Subject to paragraph 5(k) and to the remaining provisions of this
paragraph 5(h), in the event that a holder of Series B Preferred Stock would be
entitled to receive upon conversion thereof pursuant to this paragraph 5 any
Redeemable Capital Stock and this Corporation redeems, exchanges or otherwise
acquires all of the outstanding shares or other units of such Redeemable Capital
Stock (such event being a "Redemption Event"), then, from and after the
effective date of such Redemption Event, the holders of Shares of Series B
Preferred Stock then outstanding will be entitled to receive upon conversion of
such Shares, in lieu of shares or units of such Redeemable Capital Stock, the
kind and amount of securities, cash and other assets receivable upon the
Redemption Event by a holder of the number of shares or units of such Redeemable
Capital Stock into which such Shares of Series B Preferred Stock could have been
converted immediately prior to the effective date of such Redemption Event
(taking into account for this purpose (to the extent applicable) the valid
exercise by such holder of any rights of election made available to holders of
Series B Common Stock, which rights of election will simultaneously be made
available to holders of Shares on the same basis as if such Shares had
theretofore been converted into shares
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of Series B Common Stock), and (from and after the effective date of such
Redemption Event) the holders of the Series B Preferred Stock will have no other
conversion rights under these provisions with respect to such Redeemable Capital
Stock.
Notwithstanding the foregoing, if the redemption price for the shares of
such Redeemable Capital Stock is paid in whole or in part in Redemption
Securities, and the Mirror Preferred Stock Condition is met, the Series B
Preferred Stock will not be convertible into such Redemption Securities and,
from and after the applicable redemption date, the holders of any shares of
Series B Preferred Stock that have not been exchanged for Mirror Preferred Stock
and Exchange Preferred Stock will have no conversion rights under these
provisions except for any conversion right that may have existed immediately
prior to the effective date of the Redemption Event with respect to any
securities (including the Series B Common Stock), cash or other assets other
than the Redeemable Capital Stock so redeemed. This Corporation will use all
commercially reasonable efforts to ensure that the Mirror Preferred Stock
Condition is satisfied. The Mirror Preferred Stock Condition will be satisfied
in connection with a redemption of any Redeemable Capital Stock into which the
Series B Preferred Stock is then convertible if appropriate provision is made so
that the holders of the Series B Preferred Stock have the right to exchange
their shares of Series B Preferred Stock on the effective date of the Redemption
Event for Exchange Preferred Stock of this Corporation and Mirror Preferred
Stock of the issuer of the Redemption Securities. The sum of the initial
liquidation preferences of the shares of Exchange Preferred Stock and Mirror
Preferred Stock delivered in exchange for a Share of Series B Preferred Stock
will equal the Liquidation Preference of a share of Series B Preferred Stock on
the effective date of the Redemption Event. The Mirror Preferred Stock will have
an aggregate initial liquidation preference equal to the product of the
aggregate Liquidation Preference of the Shares of Series B Preferred Stock
exchanged therefor and the quotient of (x) the product of the Conversion Rate
for the Redeemable Capital Stock to be redeemed (determined immediately prior to
the effective date of the Redemption Event) and the average of the daily Closing
Prices of the Redeemable Capital Stock for the period of ten consecutive trading
days ending on the third trading day prior to the effective date of the
Redemption Event, divided by (y) the sum of the amount determined pursuant to
clause (x), plus the fair value of the securities (other than the Redeemable
Capital Stock being redeemed), cash or other assets that would have been
receivable by a holder of Series B Preferred Stock upon conversion thereof
immediately prior to the effective date of the Redemption Event (such fair value
to be determined in the case of stock or other securities with a Closing Price
in the same manner as provided in clause (x) and otherwise by the Board of
Directors in the exercise of its good faith judgment). The shares of Exchange
Preferred Stock will have an aggregate initial liquidation preference equal to
the difference between the aggregate Liquidation Preference of the Shares of
Series B Preferred Stock exchanged therefor and the aggregate initial
liquidation preference of the Mirror Preferred Stock.
(i) If this Corporation effects a Spin Off, this Corporation will make
appropriate provision so that the holders of the Series B Preferred Stock have
the right to exchange
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their Shares of Series B Preferred Stock on the effective date of the Spin Off
for Exchange Preferred Stock of this Corporation and Mirror Preferred Stock of
the issuer of the Spin Off Securities. The sum of the initial liquidation
preferences of the shares of Exchange Preferred Stock and Mirror Preferred Stock
delivered in exchange for a Share of Series B Preferred Stock will equal the
Liquidation Preference of a Share of Series B Preferred Stock on the effective
date of the Spin Off. The Mirror Preferred Stock will have an aggregate
liquidation preference equal to the product of the aggregate Liquidation
Preference of the Shares of Series B Preferred Stock exchanged therefor and the
quotient of (x) the product of the number (or fraction) of Spin Off Securities
that would have been receivable upon such Spin Off by a holder of the number of
shares of Series B Common Stock issuable upon conversion of a Share of Series B
Preferred Stock immediately prior to the effective date of the Spin Off and the
average of the daily Closing Prices of the Spin Off Securities for the period of
ten consecutive trading days commencing on the tenth trading day following the
effective date of the Spin Off, divided by (y) the sum of the amount determined
pursuant to clause (x), plus the fair value of the shares of Series B Common
Stock and other securities (other than Spin Off Securities), cash or other
assets that would have been receivable by a holder of a Share of Series B
Preferred Stock upon conversion thereof immediately prior to the effective date
of the Spin Off (such fair value to be determined in the case of Series B Common
Stock or other securities with a Closing Price in the same manner as provided in
clause (x) and otherwise by the Board of Directors in the exercise of its good
faith judgment). The shares of Exchange Preferred Stock will have an aggregate
initial liquidation preference equal to the difference between the aggregate
Liquidation Preference of the Shares of Series B Preferred Stock exchanged
therefor and the aggregate initial liquidation preference of the Mirror
Preferred Stock. From and after the effective date of such Spin Off, the holders
of any Shares of Series B Preferred Stock that have not been exchanged for
Mirror Preferred Stock and Exchange Preferred Stock as provided above will have
no conversion rights under these provisions with respect to such Spin Off
Securities.
(j) Whenever the Conversion Rate or the conversion privilege are
adjusted as provided in this paragraph 5, this Corporation will promptly cause a
notice to be mailed to the holders of record of the Series B Preferred Stock
describing the nature of the event requiring such adjustment, the Conversion
Rate in effect immediately thereafter and the kind and amount of Capital Stock
or other securities or cash or other assets into which the Series B Preferred
Stock is convertible after such event. Where appropriate, such notice may be
given in advance and included as a part of a notice required to be mailed under
the provisions of paragraph 5(l).
(k) This Corporation may, but will not be required to, make any
adjustment of the Conversion Rate if such adjustment would require an increase
or decrease of less than 1% in such Conversion Rate; provided, however, that any
adjustments which by reason of this paragraph 5(k) are not made will be carried
forward and taken into account in any subsequent adjustment. All calculations
under this paragraph 5 will be made to the nearest cent or the nearest 1/1000th
of a share, as the case may be. In any case in which this paragraph 5(k)
requires that an
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adjustment will become effective immediately after a record date for such event,
the Corporation may defer until the occurrence of such event (x) issuing to the
holder of any Shares of Series B Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Series B
Common Stock or other Capital Stock issuable upon such conversion by reason of
the adjustment required by such event over and above the shares of Series B
Common Stock or other Capital Stock issuable upon such conversion before giving
effect to such adjustment and (y) paying to such holder cash in lieu of any
fractional interest to which such holder is entitled pursuant to paragraph 5(p);
provided, however, that, if requested by such holder, this Corporation will
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares of Series B Common Stock
or other Capital Stock, and such cash, upon the occurrence of the event
requiring such adjustment.
To the extent the shares of Series B Preferred Stock become convertible
into cash, no adjustment need be made thereafter as to the cash. Interest will
not accrue on the cash.
(l) In case at any time:
(i) this Corporation takes any action which would require an
adjustment in the Conversion Rate pursuant to this paragraph;
(ii) there shall be any capital reorganization or
reclassification of the Series B Common Stock (other than a change in par
value), or any consolidation, merger or binding share exchange to which the
Corporation is a party and for which approval of any stockholders of this
Corporation is required, or any sale, transfer or lease of all or
substantially all of the assets of the Corporation, or a tender offer for
shares of Common Stock of any series representing at least a majority of
the total voting power represented by the outstanding shares of Common
Stock of such series which has been recommended by the Board of Directors
as being in the best interests of the holders of Common Stock; or
(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of this Corporation;
then, in any such event, this Corporation will give written notice, in the
manner provided in the first sentence of paragraph 7(c) hereof, to the holders
of the Series B Preferred Stock at their respective addresses as the same appear
on the books of the Corporation, at least 20 days (or ten days in the case of a
recommended tender offer as specified in clause (ii) above) prior to any record
date for such action, dividend or distribution or the date as of which it is
expected that holders of Series B Common Stock of record will be entitled to
exchange their shares of Series B Common Stock for securities, cash or other
assets, if any, deliverable upon such reorganization, reclassification,
consolidation, merger, binding share exchange, sale, transfer, lease, tender
offer, dissolution,
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liquidation or winding up; PROVIDED, HOWEVER, that any notice required by any
event described in clause (ii) of this paragraph 5(l) will be given in the
manner and at the time that such notice is given to the holders of Common Stock.
Without limiting the obligations of this Corporation to provide notice of
corporate actions hereunder, the failure to give the notice required by this
paragraph 5(l) or any defect therein will not affect the legality or validity of
any such corporate action of the Corporation or the vote upon such action.
(m) Before any holder of Series B Preferred Stock is entitled to
convert the same into Series B Common Stock, such holder will surrender the
certificate or certificates for such Series B Preferred Stock at the office of
this Corporation or at the office of the transfer agent for the Series B
Preferred Stock, which certificate or certificates, if this Corporation shall so
request, will be duly endorsed to this Corporation or in blank or accompanied by
proper instruments of transfer to this Corporation or in blank (such
endorsements or instruments of transfer to be in form satisfactory to this
Corporation), and will give written notice to this Corporation at said office
that it elects to convert all or a part of the Shares represented by said
certificate or certificates in accordance with the terms of this paragraph 5,
and will state in writing therein the name or names in which such holder wishes
the certificates for Series B Common Stock to be issued. Every such notice of
election to convert will constitute a contract between the holder of such Series
B Preferred Stock and the Corporation, whereby the holder of such Series B
Preferred Stock will be deemed to subscribe for the amount of Series B Common
Stock which such holder will be entitled to receive upon conversion of the
number of shares of Series B Preferred Stock to be converted, and, in
satisfaction of such subscription, to deposit the shares of Series B Preferred
Stock to be converted, and thereby this Corporation will be deemed to agree that
the surrender of the shares of Series B Preferred Stock to be converted will
constitute full payment of such subscription for Series B Common Stock to be
issued upon such conversion. This Corporation will as soon as practicable after
such deposit of a certificate or certificates for Series B Preferred Stock,
accompanied by the written notice and the statement above prescribed, issue and
deliver at the office of this Corporation or of the transfer agent to the person
for whose account such Series B Preferred Stock was so surrendered, or to his
nominee(s) or, subject to compliance with applicable law, transferee(s), a
certificate or certificates for the number of full shares of Series B Common
Stock to which such holder is entitled, together with cash or its check in lieu
of any fraction of a share as hereinafter provided. If surrendered certificates
for Series B Preferred Stock are converted only in part, this Corporation will
issue and deliver to the holder, or to his nominee(s), without charge therefor,
a new certificate or certificates representing the aggregate of the unconverted
Shares.
The person or persons entitled to receive the Series B Common Stock
issuable upon conversion of such Series B Preferred Stock will be treated for
all purposes as the record holder or holders of such Series B Common Stock on
the Conversion Date. Notwithstanding the foregoing, this Corporation will not be
required to convert any Shares of Series B Preferred Stock, and no surrender of
Series B Preferred Stock will be effective for that purpose, while the stock
transfer
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books of this Corporation are closed for any purpose; but such surrender will be
effective (assuming all other requirements of this paragraph 5(m) have been
satisfied) for conversion, and to constitute the person or persons entitled to
receive the Series B Common Stock issuable upon such conversion as the record
holder(s) of such shares of Series B Common Stock, for all purposes immediately
upon the reopening of such books. Upon conversion of Shares, the rights of the
holder of the Shares so converted, as a holder thereof, will cease; PROVIDED,
HOWEVER, that if the Board of Directors declares any dividend on the Series B
Preferred Stock pursuant to paragraph 3(a) of this Certificate of Designations
and the Conversion Date for any Shares of Series B Preferred Stock occurs after
the Record Date and before the Dividend Payment Date for such dividend, then the
holder of such Shares on such Record Date will be entitled to receive such
dividend on such Dividend Payment Date as if such Conversion Date had not
occurred and the amount of such declared dividend that would otherwise have been
added to the Liquidation Preference of such converted Shares pursuant to clause
(c) of the definition of "Liquidation Preference" will not be added thereto.
The issuance of certificates for shares of Series B Common Stock upon
conversion of Shares of Series B Preferred Stock will be made without charge for
any issue, stamp or other similar tax in respect of such issuance; PROVIDED,
HOWEVER, if any such certificate is to be issued in a name other than that of
the registered holder of the Share or Shares of Series B Preferred Stock
converted, the person or persons requesting the issuance thereof will pay to
this Corporation the amount of any tax which may be payable in respect of any
transfer involved in such issuance or will establish to the satisfaction of this
Corporation that such tax has been paid.
(n) From and after the date of the Corporation's first meeting of
stockholders following the Issue Date, this Corporation will at all times
reserve and keep available, solely for the purpose of issuance upon conversion
of the outstanding shares of Series B Preferred Stock, such number of shares of
Series B Common Stock (or other Capital Stock) as shall be issuable upon the
conversion of all outstanding Shares, provided that nothing contained herein
will be construed to preclude this Corporation from satisfying its obligations
in respect of the conversion of the outstanding shares of Series B Preferred
Stock by delivery of shares of Series B Common Stock (or such other Capital
Stock) which are held in the treasury of this Corporation. This Corporation will
take all such corporate and other actions as from time to time may be necessary
to insure that all shares of Series B Common Stock (or other Capital Stock)
issuable upon conversion of shares of Series B Preferred Stock from time to time
will, upon issue, be duly and validly authorized and issued, fully paid and
nonassessable and free of any preemptive or similar rights.
(o) All shares of Series B Preferred Stock received by this
Corporation upon conversion thereof into Series B Common Stock will be retired
and will be restored to the status of authorized and unissued shares of
preferred stock (and may be reissued as part of another series of the preferred
stock of this Corporation, but such shares will not be reissued as Series B
Preferred Stock).
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(p) This Corporation will not be required to issue fractional shares
of Series B Common Stock or scrip upon conversion of the Series B Preferred
Stock. As to any final fraction of a share of Series B Common Stock which a
holder of one or more Shares would otherwise be entitled to receive upon
conversion of such Shares in the same transaction, this Corporation will pay a
cash adjustment in respect of such final fraction in an amount equal to the same
fraction of the market value of a full share of Series B Common Stock. For
purposes of this paragraph 5(p), the market value of a share of Series B Common
Stock will be the product of (i) the Closing Price of a share of Series A Common
Stock on the trading day immediately preceding the Conversion Date times (ii)
the number of shares of Series A Common Stock into which a share of Series B
Common Stock is then convertible at the option of the holder.
(q) This Corporation will not, by amendment of this Certificate of
Designations or through any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, other than as expressly permitted by this Certificate of
Designations or approved by the requisite vote or written consent of the holders
of Series B Preferred Stock taken or given in accordance with this Certificate,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by this Corporation, but will at all times in
good faith assist in the carrying out of all the provisions of this paragraph 5
and in the taking of all such action as may be necessary or appropriate in order
to protect the conversion rights of the holders of Series B Preferred Stock
against impairment.
6. EXCHANGE OPTION.
(a) In the event an Exchange Offer is made by this Corporation or a
Subsidiary thereof (the applicable of the foregoing being the "Offeror"), the
Offeror will concurrently therewith make an equivalent offer to the holders of
Series B Preferred Stock pursuant to which such holders may tender Shares, based
upon the number of shares of Series B Common Stock into which such tendered
Shares are then convertible (or other stock of this Corporation receivable by a
holder of tendered Shares upon conversion thereof (or upon conversion of
securities receivable by a holder of Shares upon conversion of such tendered
Shares)) (and in lieu of tendering outstanding shares of Series B Common Stock
(or such other stock)), together with such other consideration as may be
required to be tendered pursuant to such Exchange Offer, and receive in exchange
therefor, in lieu of Exchange Securities (and other property, if applicable),
Mirror Preferred Stock with an aggregate liquidation preference equal to the
aggregate Liquidation Preference of the shares of Series B Preferred Stock
exchanged therefor. Whether or not a holder of Shares elects to accept such
offer and tender Shares, no adjustment to the Conversion Rate of the Shares will
be made pursuant to paragraph 5 in connection with the Exchange Offer.
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(b) If an Exchange Offer is made as discussed above, the Offeror will,
concurrently with the distribution of the offering circular or prospectus and
related documents to holders of Common Stock, provide each holder of Series B
Preferred Stock with a notice setting forth the offer described in paragraph
6(a) above and describing the Exchange Offer, the Exchange Securities and the
Mirror Preferred Stock. Such notice will be accompanied by the offering
circular, prospectus or similar document provided to holders of Common Stock in
respect of the Exchange Offer and a copy of the certificate of designations (or
similar document) proposed to be filed by the Offeror in order to establish the
Mirror Preferred Stock. No failure to mail the notice contemplated by this
paragraph 6(b) or any defect therein or in the mailing thereof will affect the
validity of the applicable Exchange Offer.
7. REDEMPTION.
(a) Subject to paragraph 7(f), the shares of Series B Preferred Stock
may be redeemed out of funds legally available therefor, at the option of this
Corporation by action of the Board of Directors, in whole or from time to time
in part, on any Business Day after April 1, 2005 at the Redemption Price per
Share as of the applicable Redemption Date. If less than all outstanding Shares
are to be redeemed, Shares will be redeemed ratably (as nearly as may be
practicable) among the holders thereof.
(b) Subject to the rights of any Parity Securities and the provisions
of paragraph 7(f) and subject to any prohibitions or restrictions contained in
any Debt Instrument, at any time on or after April 1, 2020, any holder will have
the right, at such holder's option, to require redemption by this Corporation at
the Redemption Price per Share as of the applicable Redemption Date of all or
any portion of such holder's Shares, by written notice to this Corporation
stating the number of Shares to be redeemed. This Corporation will redeem, out
of funds legally available therefor and not restricted in accordance with the
first sentence of this paragraph 7(b), the Shares so requested to be redeemed on
such date within 60 days following this Corporation's receipt of such notice as
this Corporation will state in its notice given pursuant to paragraph 7(c). If
the funds of this Corporation legally available for redemption of Shares and not
restricted in accordance with the first sentence of this paragraph 7(b) are
insufficient to redeem the total number of Shares required to be redeemed
pursuant to this paragraph 7(b), then, those funds which are legally available
for redemption of such Shares and not so restricted will be used to redeem the
maximum possible number of such Shares ratably among the holders who have
required Shares to be redeemed under this paragraph 7(b). At any time thereafter
when additional funds of this Corporation are legally available and not so
restricted for such purpose, such funds will immediately be used to redeem the
Shares this Corporation failed to redeem on such Redemption Date until the
balance of such Shares are redeemed. Further, if the funds of this Corporation
legally available for redemption of Shares are sufficient to pay the Redemption
Price of the Shares requested to be redeemed in full, then any portion of such
Redemption Price not paid when due as provided in this paragraph 7(b),
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notwithstanding that payment thereof is restricted pursuant to any Debt
Instrument in accordance with the first sentence of this paragraph 7(b), will
constitute indebtedness of this Corporation for borrowed money, the payment of
which indebtedness the holders requesting such redemption will be entitled to
enforce by the exercise of any and all rights at law or in equity.
(c) Notice of any redemption pursuant to this paragraph 7 will be
mailed, first class, postage prepaid, not less than 30 days nor more than 60
days prior to the Redemption Date, to the holders of record of the shares of
Series B Preferred Stock to be redeemed, at their respective addresses as the
same appear upon the books of this Corporation or are supplied by them in
writing to this Corporation for the purpose of such notice; but no failure to
mail such notice or any defect therein or in the mailing thereof will affect the
validity of the proceedings for the redemption of any shares of the Series B
Preferred Stock. Such notice will set forth the Redemption Price, the Redemption
Date, the number of Shares to be redeemed and the place at which the Shares
called for redemption will, upon presentation and surrender of the stock
certificates evidencing such Shares, be redeemed. In case fewer than the total
number of shares of Series B Preferred Stock represented by any certificate are
redeemed, a new certificate representing the number of unredeemed Shares will be
issued to the holder thereof without cost to such holder.
(d) If notice of any redemption by this Corporation pursuant to this
paragraph 7 has been mailed as provided in paragraph 7(c) and if on or before
the Redemption Date specified in such notice the consideration necessary for
such redemption has been set apart so as to be available therefor and only
therefor, then on and after the close of business on the Redemption Date, the
Shares called for redemption, notwithstanding that any certificate therefor has
not been surrendered for cancellation, will no longer be deemed outstanding, and
all rights with respect to such Shares will forthwith cease and terminate,
except the right of the holders thereof to receive upon surrender of their
certificates the consideration payable upon redemption thereof.
(e) All shares of Series B Preferred Stock redeemed, retired,
purchased or otherwise acquired by this Corporation will be retired and will be
restored to the status of authorized and unissued shares of preferred stock and
may be reissued as part of another series of the preferred stock of this
Corporation, but such shares will not be reissued as Series B Preferred Stock.
(f) If and so long as this Corporation fails to redeem on a Redemption
Date pursuant to this paragraph 7 all shares of Series B Preferred Stock
required to be redeemed on such date, this Corporation will not redeem, or
discharge any sinking fund obligation with respect to, any Shares, Junior
Securities or Parity Securities, or set aside any money or assets for any such
purpose, unless all then outstanding Shares required to be redeemed are redeemed
pursuant to the terms hereof, and will not declare or pay any dividend on or
make any distribution with respect to any Junior Securities or set aside any
money or assets for any such purpose, and neither this
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Corporation nor any Subsidiary thereof will purchase or otherwise acquire any
Shares, Parity Securities or Junior Securities. Nothing contained in this
paragraph 7(f) will prevent (i) the payment of dividends on any Junior
Securities solely in shares of Junior Securities or the redemption, purchase or
other acquisition of Junior Securities solely in exchange for shares of Junior
Securities, (ii) the redemption, exchange, purchase or other acquisition of
Series B Preferred Stock or Parity Securities solely in exchange for (together
with a cash adjustment for fractional shares, if any), shares of Junior
Securities, or (iii) the purchase or acquisition of shares of Series B Preferred
Stock pursuant to a purchase or exchange offer or offers made to all holders of
outstanding shares of Series B Preferred Stock, PROVIDED that the terms of the
purchase or exchange offer shall be identical for all Shares and all accrued
dividends on such Shares shall have been declared and irrevocably set apart in
trust for the benefit of the holders of Shares and for no other purpose. The
provisions of this paragraph 7(f) are for the benefit of holders of Series A
Preferred Stock and accordingly the provisions of this paragraph 7(f) will not
restrict any redemption or purchase by this Corporation or a Subsidiary thereof
of Shares held by any holder, provided that all other holders of Shares shall
have waived in writing the benefits of this provision with respect to such
redemption.
8. VOTING RIGHTS.
(a) In addition to voting rights required by law, the holders of the
Series B Preferred Stock will have the voting rights described in this
paragraph 8.
(b) Each share of Series B Preferred Stock will be entitled to vote
together with holders of the Series A Common Stock (and any other class or
series which may similarly be entitled to vote with the shares of Series A
Common Stock) as a single class upon all matters upon which holders of Series A
Common Stock are entitled to vote. In any such vote, the holders of Series B
Preferred Stock will be entitled to 5,580 votes per share of Series B Preferred
Stock.
(c) So long as any Shares remain outstanding, this Corporation will
not, either directly or indirectly, without the consent of the holders of record
of at least 66 2/3% of the number of Shares then outstanding, take any action
(including by merger, consolidation or binding share exchange with any other
corporation or entity) to amend, alter or repeal (i) any of the provisions of
this paragraph 8, (ii) any of the provisions of the Certificate of Incorporation
of this Corporation so as to affect adversely any preference or any relative or
other right given to the Series B Preferred Stock or the Series B Common Stock,
or (iii) any of paragraphs 3 or 4 or the first sentence of paragraph 2 of
Section A of Article IV of the Certificate of Incorporation of this Corporation.
9. WAIVER. Any provision of this Certificate of Designations which, for the
benefit of the holders of Series B Preferred Stock, prohibits, limits or
restricts actions by the Corporation, or imposes obligations on the Corporation,
including but not limited to provisions
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relating to the obligation of the Corporation to redeem or convert such Shares,
may be waived in whole or in part, or the application of all or any part of such
provision in any particular circumstance or generally may be waived, in each
case by the affirmative vote or with the consent of the holders of record of at
least 66 2/3% of the number of Shares then outstanding (or such greater
percentage thereof as may be required by this Certificate of Designations,
applicable law or any applicable rules of any national securities exchange or
national interdealer quotation system), either in writing or by vote at an
annual meeting or a special meeting called for such purpose at which the holders
of Series B Preferred Stock will vote as a separate class.
10. PREEMPTIVE RIGHTS. The holders of the Series B Preferred Stock will not
have any preemptive right to subscribe for or purchase any shares of stock or
any other securities which may be issued by this Corporation.
11. SENIOR SECURITIES. The Series B Preferred Stock will not rank junior
to any other classes or series of stock of this Corporation outstanding on
the Issue Date in respect of the right to receive dividends or the right to
participate in any distribution upon liquidation, dissolution or winding up
of this Corporation. Without the prior consent of the holders of record of at
least 66 2/3% of the number of Shares then outstanding, this Corporation will
not issue any Senior Securities.
12. EXCLUSION OF OTHER RIGHTS. Except as may otherwise be required by law
and for the equitable rights and remedies that may otherwise be available to
holders of Series B Preferred Stock, the shares of Series B Preferred Stock will
not have any designations, preferences, limitations or relative rights, other
than those specifically set forth in these resolutions (as such resolutions may,
subject to paragraph 8, be amended from time to time) and in the Certificate of
Incorporation of this Corporation.
13. HEADINGS. The headings of the various paragraphs and subparagraphs
hereof are for convenience of reference only and will not affect the
interpretation of any of the provisions hereof.
FURTHER RESOLVED, that the appropriate officers of this Corporation are
hereby authorized to execute and acknowledge a certificate setting forth these
resolutions and to cause such certificate to be filed and recorded, in
accordance with the requirements of Section 151(g) of the General Corporation
Law of the State of Delaware."
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The undersigned has signed this Certificate of Designations on this 16th
day of March 2000.
By: /s/ Pamela J. Strauss
--------------------------
Name: Pamela J. Strauss
Title: Assistant Secretary
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