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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO
SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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U.S RESTAURANT PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Maryland 75-2687420
(State of incorporation or organization) (I.R.S. Employer Identification No.)
5310 Harvest Hill Road
Suite 270
Dallas, Texas 75230
(Address of principal executive offices) (Zip code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange on which
Title of each class to be so registered each class is to be registered
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$________ Series A Cumulative Convertible New York Stock Exchange
Preferred Stock, $0.001 par value
Securities to be registered pursuant to Section 12(g)of the Act:
None
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(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
Under its Articles of Incorporation (the "Articles"), U.S. Restaurant
Properties, Inc., a Maryland corporation (the "Corporation"), has authority to
issue 50,000,000 shares of preferred stock, par value $.001 per share. The
Corporation has authorized the issuance of up to 3,680,000 shares of preferred
stock as the $____ Series A Cumulative Convertible Preferred Stock (the "Series
A Preferred Stock"). The Corporation has applied for listing of the Series A
Preferred Stock on the New York Stock Exchange. Set forth below are the terms of
the Series A Preferred Stock.
1. DEFINITIONS. For purposes of the Series A Preferred Stock, the
following terms shall have the meanings indicated:
"ACT" shall mean the Securities Act of 1933, as amended.
"AFFILIATE" of a person means a person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with, the person specified.
"BOARD OF DIRECTORS" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Series A
Preferred Stock.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.
"CALL DATE" shall have the meaning set forth in paragraph (b) of
Section 4 hereof.
"COMMON STOCK" shall mean the common stock, $.001 par value per share,
of the Corporation or such shares of the Corporation's capital stock
into which such Common Stock shall be reclassified.
"CONSTITUENT PERSON" shall have the meaning set forth in paragraph (e)
of Section 6 hereof.
"CONVERSION PRICE" shall mean the conversion price per share of Common
Stock for which each share of Series A Preferred Stock in convertible,
as such Conversion Price may be adjusted pursuant to paragraph (d) of
Section 6. The initial conversion price shall be $_____ (equivalent to
a conversion rate of _____ shares of Common Stock for each share of
Series A Preferred Stock).
"CURRENT MARKET PRICE" of publicly traded shares of Common Stock or any
other class or series of capital stock or other security of the
Corporation or of any similar security of any other issuer for any day
shall mean the last reported sales price, regular way on such day, or,
if no sale takes place on such day, the average of the reported closing
bid and
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asked prices regular way on such day, in either case as reported on the
New York Stock Exchange ("NYSE") or, if such security is not listed or
admitted for trading on the NYSE, on the principal national securities
exchange on which such security is listed or admitted for trading or,
if not listed or admitted for trading on any national securities
exchange, on the National Market of the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or, if
such security is not quoted on such National Market, the average of the
closing bid and asked prices on such day in the over-the-counter market
as reported by NASDAQ, or, if bid and asked prices for such security on
such day shall not have been reported through NASDAQ, the average of
the bid and asked prices on such day as furnished by any NYSE member
firm regularly making a market in such security selected for such
purpose by the Chief Executive Officer or the Board of Directors or if
any class or series of securities are not publicly traded, the fair
value of the shares of such class as determined reasonably and in good
faith by the Board of Directors of the Corporation.
"DISTRIBUTION" shall have the meaning set forth in paragraph (d)(iii)
of Section 6 hereof.
"DIVIDEND PAYMENT DATE" shall mean, with respect to each Dividend
Period, the fifteenth day of March, June, September and December, in
each year, commencing on March 15, 1998; PROVIDED, HOWEVER, that if any
Dividend Payment Date falls on any day other than a Business Day, the
dividend payment due on such Dividend Payment Date shall be paid on the
Business Day immediately following such Dividend Payment Date.
"DIVIDEND PERIODS" shall mean quarterly dividend periods commencing on
January 1, April 1, July 1 and October 1 of each year and ending on and
including the day preceding the first day of the next succeeding
Dividend Period (other than the initial Dividend Period, which shall
commence on the Issue Date and end on and include December 31, 1997).
"FAIR MARKET VALUE" shall mean the average of the daily Current Market
Prices of a share of Common Stock during five (5) consecutive Trading
Days selected by the Corporation commencing not more than twenty (20)
Trading Days before, and ending not later than, the earlier of the day
in question and the day before the "ex" date with respect to the
issuance or distribution requiring such computation. The term "'ex
date," when used with respect to any issuance or distribution, means
the first day on which the share of Common Stock trades regular way,
without the right to receive such issuance or distribution, on the
exchange or in the market, as the case may be, used to determine that
day's Current Market Price.
"FUNDS AVAILABLE FOR DISTRIBUTION" shall mean funds from operations
(net income, computed in accordance with generally accepted accounting
principles excluding gains or losses from debt restructuring and sales
of property, plus depreciation and amortization) minus non-revenue
generated capital expenditures and debt principal amortization, as
determined by the Board of Directors on a basis consistent with the
policies and practices adopted by the Corporation for reporting
publicly its results of operations and financial condition.
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"ISSUE DATE" shall mean November ___, 1997.
"JUNIOR STOCK" shall mean the Common Stock and any other class or
series of capital stock of the Corporation over which the shares of
Series A Preferred Stock have preference or priority in the payment of
dividends or in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.
"NON-ELECTING SHARE" shall have the meaning set forth in paragraph (e)
of Section 6 hereof.
"PARITY STOCK" shall have the meaning set forth in paragraph (b) of
Section 7 hereof.
"PERMITTED COMMON STOCK CASH DISTRIBUTIONS" means cash dividends and
cash distributions paid on Common Stock after __________, 199_ not in
excess of the sum of the Corporation's cumulative undistributed net
earnings at __________, 199_, plus the cumulative amount of Funds
Available for Distribution after __________, 199_, minus the cumulative
amount of dividends accumulated, accrued or paid on the Series A
Preferred Stock or any other class of Preferred Stock after __________,
199_.
"PERSON" shall mean any individual, firm partnership, corporation or
other entity and shall include any successor (by merger or otherwise)
of such entity.
"PRESS RELEASE" shall have the meaning set forth in paragraph (a)(i)
of Section 4 hereof.
"SERIES A PREFERRED STOCK" shall mean the ____% Series A Cumulative
Convertible Preferred Stock, par value $.001 per share.
"SET APART FOR PAYMENT" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which
indicates, pursuant to a declaration of dividends or other distribution
by the Board of Directors, the allocation of funds to be so paid on any
series or class of capital stock of the Corporation; PROVIDED, HOWEVER,
that if any funds for any class or series of Junior Stock or any class
or series of Parity Stock are placed in a separate account of the
Corporation or delivered to a disbursing, paying or other similar
agent, then "set apart for payment" with respect to the Series A
Preferred Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.
"TRADING DAY", as to any securities, shall mean any day on which such
securities are traded on the NYSE or, if such securities are not listed
or admitted for trading on the NYSE, on the principal national
securities exchange on which such securities are listed or admitted or,
if such securities are not listed or admitted for trading on any
national securities exchange, on the National Market of NASDAQ or, if
such securities are not quoted on such National Market, in the
securities market in which such securities are traded.
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"TRANSACTION" shall have the meaning set forth in paragraph (e) of
Section 6 hereof.
"TRANSFER AGENT" means American Stock Transfer and Trust or such other
U.S. bank with aggregate capital, surplus and undivided profits, as
shown on its last published report, of at least $50,000,000 as may be
designated by the Board of Directors or their designee as the transfer
agent for the Series A Preferred Stock.
"VOTING PREFERRED STOCK" shall have the meaning set forth in Section 8
hereof.
2. DIVIDENDS.
(a) The holders of Series A Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors out of funds legally
available for that purpose, cumulative dividends payable in cash in an amount
per share of Series A Preferred Stock equal to the greater of (i) $_____ per
quarter (equivalent to $_____ per annum) or (ii) the cash dividends paid or
payable on the number of shares of Common Stock, or portion thereof, into which
a share of Series A Preferred Stock is convertible, in each case with
appropriate proration for partial quarters. The amount referred in clause (ii)
of this paragraph (a) with respect to each Dividend Period shall be determined
as of the applicable Dividend Payment Date by multiplying the number of shares
of Common Stock, or portion thereof calculated to the fourth decimal point, into
which a share of Series A Preferred Stock would be convertible at the opening of
business on such Dividend Payment Date (based on the Conversion Price then in
effect) by the quarterly cash dividend payable or paid for such Dividend Period
in respect of a share of Common Stock outstanding as of the record date for the
payment of dividends on the Common Stock with respect to such Dividend Period
or, if different, with respect to the most recent quarterly period for which
dividends with respect to the Common Stock have been declared. Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period
or Periods such dividends shall be declared or there shall be funds of the
Corporation legally available for the payment of such dividends, and shall be
payable quarterly in arrears on the Dividend Payment Dates, commencing on the
first Dividend Payment Date after the Issue Date. Each such dividend shall be
payable in arrears to the holders of record of the Series A Preferred Stock, as
they appear on the stock records of the Corporation at the close of business on
a record date which shall be not more than sixty (60) days prior to the
applicable Dividend Payment Date and shall be fixed by the Board of Directors to
coincide with the record date for the regular quarterly dividends, if any,
payable with respect to the Common Stock. Accumulated, accrued and unpaid
dividends for any past Dividend Periods may be declared and paid at any time,
without reference to any regular Dividend Payment Date, to holders of record on
such date, which date shall not precede by more than forty-five (45) days the
payment date thereof, as may be fixed by the Board of Directors. The amount of
accumulated, accrued and unpaid dividends on any share of Series A Preferred
Stock, or fraction thereof, at any date shall be the amount of any dividends
thereon calculated at the applicable rate to and including such date, whether or
not earned or declared, which have not been paid in cash.
(b) The amount of dividends payable per share of Series A
Preferred Stock for each Dividend Period shall be computed by dividing the
annual dividend by four (4). The amount of dividends payable per share of Series
A Preferred Stock for the initial Dividend
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Period, or any other period shorter or longer than a full Dividend Period, shall
be computed ratably on the basis of twelve (12) 30-day months and a 360-day
year. Holders of Series A Preferred Stock shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of cumulative
dividends, as herein provided, on the Series A Preferred Stock. No interest, or
sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Series A Preferred Stock that may be in arrears.
(c) So long as any of the shares of Series A Preferred Stock
are outstanding, no dividends, except as described in the immediately following
sentence, shall be declared or paid or set apart for payment by the Corporation
or other distribution of cash or other property declared or made directly or
indirectly by the Corporation or any affiliate or any person acting on behalf of
the Corporation or any of its affiliates with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of
accumulated, accrued and unpaid dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof have
been or contemporaneously are set apart for such payment on the Series A
Preferred Stock for all Dividend Periods terminating on or prior to the Dividend
Payment Date with respect to such class or series of Parity Stock. When
dividends are not paid in full or a sum sufficient for such payment is not set
apart, as aforesaid, all dividends declared upon the Series A Preferred Stock
and all dividends declared upon any other class or series of Parity Stock shall
be declared ratably in proportion to the respective amounts of dividends
accumulated, accrued and unpaid on the Series A Preferred Stock and accumulated,
accrued and unpaid on such Parity Stock.
(d) So long as any of the shares of Series A Preferred Stock
are outstanding, no dividends (other than dividends or distributions paid in
shares of or options, warrants or rights to subscribe for or purchase shares of
Junior Stock) shall be declared or paid or set apart for payment by the
Corporation or other distribution of cash or other property declared or made
directly or indirectly by the Corporation or any affiliate or any person acting
on behalf of the Corporation or any of its affiliates with respect to any shares
of Junior Stock, nor shall any shares of Junior Stock be redeemed, purchased or
otherwise acquired (other than a redemption, purchase or other acquisition of
Common Stock made for purposes of an employee incentive or benefit plan of the
Corporation or any subsidiary) for any consideration (or any moneys be paid to
or made available for a sinking-fund for the redemption of any shares of any
such stock) directly or indirectly by the Corporation or any affiliate or any
person acting on behalf of the Corporation or any of its affiliates (except by
conversion into or exchange for Junior Stock), nor shall any other cash or other
property otherwise be paid or distributed to or for the benefit of any holder of
shares of Junior Stock in respect thereof, directly or indirectly, by the
Corporation or any affiliate or any person acting on behalf of the Corporation
or any of its affiliates unless in each case (i) the full cumulative dividends
(including all accumulated, accrued and unpaid dividends) on all outstanding
shares of Series A Preferred Stock and any other Parity Stock of the Corporation
shall have been paid or such dividends have been declared and set apart for
payment for all past Dividend Periods with respect to the Series A Preferred
Stock and all past dividend periods with respect to such Parity Stock and (ii)
sufficient funds shall have been paid or set apart for the payment of the full
dividend for the current Dividend Period with respect to the Series A Preferred
Stock and the current Dividend Period with respect to such Parity Stock.
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3. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus) shall
be made to or set apart for the holders of Junior Stock, the holders of shares
of Series A Preferred Stock shall be entitled to receive Twenty-Five Dollars
($25.00) per share of Series A Preferred Stock plus an amount equal to all
dividends (whether or not earned or declared) accumulated, accrued and unpaid
thereon to the date of final distribution to such holders; but such holders
shall not be entitled to any further payment. Until the holders of the Series A
Preferred Stock have been paid the liquidation preference in full, no payment
will be made to any holder of Junior Stock upon the liquidation, dissolution or
winding up of the Corporation. If, upon any liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of Series A Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any other shares of any class or series of Parity Stock, then such
assets, or the proceeds thereof, shall be distributed among the holders of
Series A Preferred Stock and any such other Parity Stock ratably in the same
proportion as the respective amounts that would be payable on such Series A
Preferred Stock and any such other Parity Stock if all amounts payable thereon
were paid in full. For the purposes of this Section 4, (i) a consolidation or
merger of the Corporation with one or more corporations, (ii) a sale or transfer
of all or substantially all of the Corporation's assets, or (iii) a statutory
share exchange shall not be deemed to be a liquidation, dissolution or winding
up, voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of any shares of
Parity Stock, upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Series
A Preferred Stock and any Parity Stock, as provided in this Section 3, any other
series or class or classes of Junior Stock shall, subject to the respective
terms thereof, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Series A Preferred Stock and any Parity
Stock shall not be entitled to share therein.
4. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) Shares of Series A Preferred Stock shall not be redeemable
by the Corporation prior to __________. On and after __________, the
Corporation, at its option, may redeem shares of Series A Preferred Stock, in
whole or from time to time in part, as set forth herein, subject to the
provisions described below:
(i) Shares of Series A Preferred Stock may be
redeemed, in whole, or in part, at the option of the Corporation, at
any time on or after __________ by issuing and delivering to each
holder for each share of Series A Preferred Stock to be redeemed such
number of authorized but previously unissued shares of Common Stock as
equals the liquidation preference (excluding any accumulated, accrued
and unpaid dividends, if any, to the Call Date (as defined in paragraph
(b) below), which are to be paid in cash, whether or not earned or
declared, as provided below) per share of Series A Preferred
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Stock divided by the Conversion Price as in effect as of the opening of
business on the Call Date; PROVIDED, HOWEVER, that the Corporation may
redeem shares of Series A preferred Stock pursuant to this paragraph
(a)(i) only if for twenty (20) Trading Days, within any period of
thirty (30) consecutive Trading Days, including the last Trading Day of
such 30-Trading Day period, the Current Market Price of the Common
Stock on each of such twenty (20) Trading Days equals or exceeds the
Conversion Price in effect on such Trading Days. In order to exercise
its redemption option pursuant to this paragraph (a)(i), the
Corporation must issue a press release announcing the redemption (the
"PRESS RELEASE") prior to the opening of business on the second Trading
Day after the condition in the preceding sentence has, from time to
time, been satisfied. The Corporation may not issue a Press Release
prior to ____________. The Press Release shall announce the redemption
and set forth the number of shares of Series A Preferred Stock that the
Corporation intends to redeem; or
(ii) Shares of Series A Preferred Stock may be
redeemed, in whole or in part, at the option of the Corporation at any
time on or after ____________ out of funds legally available therefor
at a redemption price payable in cash equal to Twenty-Five Dollars
($25.00) per share of Series A Preferred Stock (plus an amount equal to
all accumulated, accrued and unpaid dividends, if any, to the Call
Date, whether or not earned or declared, as provided below).
(b) Shares of Series A Preferred Stock shall be redeemed by
the Corporation on the date specified in the notice to holders required under
paragraph (d) of this Section 4 (the "CALL DATE"). The Call Date shall be
selected by the Corporation, shall be specified in the notice of redemption and
shall be not less than thirty (30) days nor more than sixty (60) days after (i)
the date on which the Corporation issues the Press Release, if such redemption
is pursuant to paragraph (a)(i) of this Section 4, and (ii) the date notice of
redemption is sent by the Corporation, if such redemption is pursuant to
paragraph (a)(ii) of this Section 4. Upon any redemption of shares of Series A
Preferred Stock pursuant to this paragraph (a)(i) or (a)(ii) of this Section 4,
the Corporation shall pay in cash to the holder of such shares an amount equal
to all accumulated, accrued and unpaid dividends, if any, to the Call Date,
whether or not earned or declared. Immediately prior to authorizing any
redemption of the Series A Preferred Stock, and as a condition precedent for
such redemption, the Company, by resolution of its Board of Directors, shall
declare a mandatory dividend on the Series A Preferred Stock payable in cash on
the Call Date in an amount equal to all accumulated, accrued and unpaid
dividends as of the Call Date on the Series A Preferred Stock to be redeemed,
which amount shall be added to the redemption price. If the Call Date falls
after a dividend payment record date and prior to the corresponding Dividend
Payment Date, then each holder of Series A Preferred Stock at the close of
business on such dividend payment record date shall be entitled to the dividend
payable on such shares on the corresponding Dividend Payment Date
notwithstanding the redemption of such shares prior to such Dividend Payment
Date. Except as provided above, the Corporation shall make no payment or
allowance for accumulated or accrued dividends on shares of Series A Preferred
Stock called for redemption or on the shares of Common Stock issued upon such
redemption.
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(c) If full cumulative dividends on all outstanding shares of
Series A Preferred Stock and any other class or series of Parity Stock of the
Corporation have not been paid or declared and set apart for payment, no shares
of Series A Preferred Stock may be redeemed unless all outstanding shares of
Series A Preferred Stock are simultaneously redeemed and neither the Corporation
nor any affiliate of the Corporation may purchase or acquire shares of Series A
Preferred Stock, otherwise than pursuant to a purchase or exchange offer made on
the same terms to all holders of shares of Series A Preferred Stock.
(d) If the corporation shall redeem shares of Series A
Preferred Stock pursuant to paragraph (a) of this Section 4, notice of such
redemption shall be given to each holder of record of the shares to be redeemed
and, if such redemption is pursuant to paragraph (a)(i) of this Section 4, such
notice shall be given not more than four (4) Business Days after the date on
which the Corporation issues the Press Release. Such notice shall be provided by
first class mail, postage prepaid, at such holder's address as the same appears
on the stock records of the Corporation, or by publication in THE WALL STREET
JOURNAL or THE NEW YORK TIMES, or if neither such newspaper is then being
published, any other daily newspaper of national circulation not less than
thirty (30) nor more than sixty (60) days prior to the Call Date. If the
Corporation elects to provide such notices by publication, it shall also
promptly mail notice of such redemption to the holders of the shares of Series A
Preferred Stock to be redeemed. Neither the failure to mail any notice required
by this paragraph (d), nor any defect therein or in the mailing thereof, to any
particular holder, shall affect the sufficiency of the notice or the validity of
the proceedings for redemption with respect to the other holders. Any notice
which was failed in the manner herein provided shall be conclusively presumed to
have been duly given on the date mailed whether or not the holder receives the
notice. Each such mailed or published notice shall state, as appropriate: (1)
the Call Date; (2) the number of shares of Series A Preferred Stock to be
redeemed and, if fewer than all such shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (3) whether
redemption will be for shares of Common stock pursuant to paragraph (a)(i) of
this Section 4 or for cash pursuant to paragraph (a)(ii) of this Section 4, and,
if redemption will be for Common Stock, the number of shares of Common Stock (or
fraction of a share of Common Stock) to be issued with respect to each share of
Series A Preferred Stock to be redeemed; (4) the place or places at which
certificates for such shares are to be surrendered for certificates representing
shares of Common Stock; (5) the then-current Conversion Price; and (6) that
dividends on the shares of Series A Preferred Stock to be redeemed shall cease
to accrue on such Call Date except as otherwise provided herein. Notice having
been published or mailed as aforesaid, from and after the Call Date (unless the
Corporation shall fail to issue and make available at the office of the Transfer
Agent the number of shares of Common Stock and/or amount of cash necessary to
effect such redemption, including all accumulated, accrued and unpaid dividends
to the Call Date, whether or not earned or declared), (i) except as otherwise
provided herein, dividends on the shares of Series A Preferred Stock so called
for redemption shall cease to accumulate or accrue on the shares of Series A
Preferred Stock called for redemption (except that, in the case of a Call Date
after a dividend record date and prior to the related Dividend Payment Date,
holders of Series A Preferred Stock on the dividend record date will be entitled
on such Dividend Payment Date to receive the dividend payable on such shares),
(ii) said shares shall no longer be deemed to be outstanding, and (iii) all
rights of the holders thereof as holders of Series A Preferred Stock of the
Corporation shall cease (except the rights to receive the shares of Common Stock
and/or cash
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payable upon such redemption, without interest thereon, upon surrender and
endorsement of their certificates if so required and to receive any dividends
payable thereon). The Corporation's obligation to provide shares of Common Stock
and/or cash in accordance with the preceding sentence shall be deemed fulfilled
if, on or before the Call Date, the Corporation shall deposit with a bank or
trust company (which may be an affiliate of the Corporation) that has an office
in the Borough of Manhattan, The City of New York, or in _______________ and
that has, or is an affiliate of a bank or trust company that has, a capital and
surplus of at least $50,000,000, such number of shares of Common Stock and such
amount of cash as is necessary for such redemption, in trust, with irrevocable
instructions that such shares of Common Stock and/or cash be applied to the
redemption of the shares of Series A Preferred Stock so called for redemption.
In the case of any redemption pursuant to paragraph (a)(i) of this Section 4, at
the close of business on the Call Date, each holder of shares of Series A
Preferred Stock to be redeemed (unless the Corporation defaults in the delivery
of the shares of Common Stock or cash payable on such Call Date) shall be deemed
to be the record holder of the number of shares of Common Stock into which such
shares of Series A Preferred Stock are to be converted at redemption, regardless
of whether such holder has surrendered the certificates representing the shares
of Series A Preferred Stock to be so redeemed. No interest shall accrue for the
benefit of the holders of shares of Series A Preferred Stock to be redeemed on
any cash so set aside by the Corporation. Subject to applicable escheat laws,
any such cash unclaimed at the end of two (2) years from the Call Date shall
revert to the general funds of the Corporation, after which reversion the
holders of shares of Series A Preferred Stock so called for redemption shall
look only to the general funds of the Corporation for the payment of such cash.
As promptly as practicable after the surrender in accordance with said
notice of the certificates for any such shares so redeemed (properly endorsed or
assigned for transfer, if the Corporation shall so require and if the notice
shall so state), such certificates shall be exchanged for certificates
representing shares of Common Stock and/or any cash (without interest thereon)
for which such shares have been redeemed in accordance with such notice. If
fewer than all the outstanding shares of Series A Preferred Stock are to be
redeemed, shares to be redeemed shall be selected by the Corporation from
outstanding shares of Series A Preferred Stock not previously called for
redemption by lot or, with respect to the number of shares of Series A Preferred
Stock held of record by each holder of such shares, pro rata (as nearly as may
be) or by any other method as may be determined by the Board of Directors in its
discretion to be equitable. If fewer than all the shares of Series A Preferred
Stock represented by any certificate are redeemed, then a new certificate
representing the unredeemed shares shall be issued without cost to the holders
thereof.
(e) In the case of any redemption pursuant to paragraph (a)(i)
of this Section 4, no fractional shares of Common Stock or scrip representing
fractions of shares of Common Stock shall be issued upon redemption of the
shares of Series A Preferred Stock. Instead of any fractional interest in a
share of Common Stock that would otherwise be deliverable upon redemption of
shares of Series A Preferred Stock, the Corporation shall pay to the holder of
such share an amount in cash (computed to the nearest cent) based upon the
Current Market Price of the Common Stock on the Trading Day immediately
preceding the Call Date. If more than one share shall be surrendered for
redemption at one time by the same holder, the number of full
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shares of Common Stock issuable upon redemption thereof shall be computed on the
basis of the aggregate number of shares of Series A Preferred Stock so
surrendered.
(f) In the case of any redemption pursuant to paragraph (a)(i)
of this Section 4, the Corporation covenants that any shares of Common Stock
issued upon redemption of shares of Series A Preferred Stock shall be validly
issued, fully paid and non-assessable. The Corporation shall use its best
efforts to list, subject to official notice of issuance, the shares of Common
Stock required to be delivered upon any such redemption of shares of Series A
Preferred Stock, prior to such redemption, upon each national securities
exchange, if any, upon which the outstanding shares of Common Stock are listed
at the time of such delivery.
The Corporation shall take any action necessary to ensure that any
shares of Common Stock issued upon the redemption of Series A Preferred Stock
are freely transferable and not subject to any resale restrictions under the
Act, or any applicable state securities or blue sky laws (other than any shares
of Common Stock issued upon redemption of any Series A Preferred Stock which are
held by an "affiliate" (as defined in Rule 144 under the Act) of the
Corporation).
5. STOCK TO BE RETIRED. All shares of Series A Preferred Stock which
shall have been issued and reacquired in any manner by the Corporation shall be
restored to the status of authorized, but unissued shares of Preferred Stock,
without designation as to series. The Corporation may also retire any unissued
shares of Series A Preferred Stock, and such shares shall then be restored to
the status of authorized but unissued shares of Preferred Stock, without
designation as to series.
6. CONVERSION.
Holders of shares of Series A Preferred Stock shall have the right to
convert all or a portion of such shares into shares of Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of this
Section 6, a holder of shares of Series A Preferred Stock shall have the right,
at such holder's option, at any time to convert such shares, in whole or in
part, into the number of fully paid and non-assessable shares of authorized but
previously unissued shares of Common Stock obtained by dividing the aggregate
liquidation preference (excluding any accumulated, accrued and unpaid dividends)
of such shares by the Conversion Price (as in effect at the time and on the date
provided for in the last clause of paragraph (b) of this Section 6) by
surrendering such shares to be converted, such surrender to be made in the
manner provided in paragraph (b) of this Section 6; PROVIDED, HOWEVER, that the
right to convert shares of Series A Preferred Stock called for redemption
pursuant to Section 5 shall terminate at the close of business on the Call Date
fixed for such redemption, unless the Corporation shall default in making
payment of shares of Common Stock and/or cash payable upon such redemption under
Section 4 hereof.
(b) In order to exercise the conversion right, the holder of
each share of Series A Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Transfer Agent, accompanied by
written notice to the Corporation that the holder thereof elects to convert such
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share of Series A Preferred Stock. Unless the shares issuable on conversion are
to be issued in the same name as the name in which such share of Series A
Preferred Stock is registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by the holder or such holder's duly authorized attorney and an
amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Corporation demonstrating that such taxes have been paid).
Holders of shares of Series A Preferred Stock at the close of business
on a dividend payment record date shall be entitled to receive the dividend
payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion thereof following such dividend payment record
date and prior to such Dividend Payment Date. However, shares of Series A
Preferred Stock surrendered for conversion during the period between the close
of business on any dividend payment record date and the opening of business on
the corresponding Dividend Payment Date (except shares converted after the
issuance of notice of redemption with respect to a Call Date during such period,
such shares of Series A Preferred Stock being entitled to such dividend on the
Dividend Payment Date) must be accompanied by payment of an amount equal to the
dividend payable on such shares on such Dividend Payment Date. A holder of
shares of Series A Preferred Stock on a dividend payment record date who (or
whose transferee) tenders any such shares for conversion into shares of Common
Stock on such Dividend Payment Date will receive the dividend payable by the
Corporation on such shares of Series A Preferred Stock on such date, and the
converting holder need not include payment of the amount of such dividend upon
surrender of shares of Series A Preferred Stock for conversion. Except as
provided above, the Corporation shall make no payment or allowance for unpaid
dividends, whether or not in arrears, on converted shares or for dividends on
the shares of Common Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates for
shares of Series A Preferred Stock as aforesaid, the Corporation shall issue and
shall deliver at such office to such holder, or send on such holder's written
order, a certificate or certificates for the number of full shares of Common
Stock issuable upon the conversion of such shares of Series A Preferred Stock in
accordance with provisions of this Section 6, and any fractional interest in
respect of a share of Common Stock arising upon such conversion shall be settled
as provided in paragraph (c) of this Section 6.
Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which the certificates for shares of
Series A Preferred Stock shall have been surrendered and such notice shall have
been received by the Corporation as aforesaid (and, if applicable, payment of an
amount equal to the dividend payable on such shares shall have been received by
the Corporation as above described), and the person or persons in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such time on such date
and such conversion shall be at the Conversion Price in effect at such time on
such date unless the stock transfer books of the Corporation shall be closed on
that date, in which event such person or persons shall be deemed to have become
holder or holders of record at the close of business on the next succeeding day
on which such stock transfer books are open, but such conversion shall be at the
Conversion Price in effect on
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the date on which such shares shall have been surrendered and such notice shall
have been received by the Corporation.
(c) No fractional share of Common Stock or scrip representing
fractions of a share of Common Stock shall be issued upon conversion of the
shares of Series A Preferred Stock. Instead of any fractional interest in a
share of Common Stock that would otherwise be deliverable upon the conversion of
shares of Series A Preferred Stock, the Corporation shall pay to the holder of
such share an amount in cash based upon the Current Market Price of the Common
Stock on the Trading Day immediately preceding the date of conversion. If more
than one (1) share shall be surrendered for conversion at one time by the same
holder, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of shares of
Series A Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to
time as follows:
(i) If the Corporation shall after the Issue Date (A)
pay a dividend or make a distribution on any class of its capital stock
in shares of Common Stock, (B) subdivide its outstanding Common Stock
into a greater number of shares, (C) combine its outstanding Common
Stock into a smaller number of shares or (D) issue any shares of
capital stock by reclassification of its Common Stock, the Conversion
Price in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive
such dividend or distribution or at the opening of business on the day
following the day on which such subdivision, combination or
reclassification becomes effective, as the case may be, shall be
adjusted so that the holder of any share of Series A Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock (or fraction of a share of Common
Stock) that such holder would have owned or have been entitled to
receive after the happening of any of the events described above had
such share of Series A Preferred Stock been converted immediately prior
to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or
reclassification. An adjustment made pursuant to this paragraph (d)(i)
of this Section 6 shall become effective immediately after the opening
of business on the day next following the record date (except as
provided in paragraph (h) below) in the case of a dividend or
distribution and shall become effective immediately after the opening
of business on the day next following the effective date in the case of
a subdivision, combination or reclassification.
(ii) If the Corporation shall issue after the Issue
Date rights, options or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 days after the record
date described below in this paragraph (d)(ii) of this Section 6) to
subscribe for or purchase Common Stock at a price per share less than
the Fair Market Value per share of the Common Stock on the record date
for the determination of stockholders entitled to receive such rights
or warrants, then the Conversion Price in effect at the opening of
business on the day next following such record date shall be adjusted
to equal the price determined by multiplying (A) the Conversion Price
in effect immediately prior to the opening of business on the day
following the date fixed for such
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determination by (B) a fraction, the numerator of which shall be the
sum of (X) the number of shares of Common Stock outstanding on the
close of business on the date fixed for such determination and (Y) the
number of shares that the aggregate proceeds to the Corporation from
the exercise of such rights or warrants for Common Stock would purchase
at such Fair Market Value, and the denominator of which shall be the
sum of (XX) the number of shares of Common Stock outstanding on the
close of business on the date fixed for such determination and (YY) the
number of additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants. Such adjustment shall
become effective immediately after the opening of business on the day
next following such record date (except as provided in paragraph (h)
below). In determining whether any rights or warrants entitle the
holders of Common Stock to subscribe for or purchase Common Stock at
less than such Fair Market Value, there shall be taken into account any
consideration received by the Corporation upon issuance and upon
exercise of such rights or warrants, the value of such consideration,
if other than cash, to be determined in good faith by the Board of
Directors.
(iii) If the Corporation shall distribute to all
holders of its Common Stock any shares of capital stock of the
Corporation (other than Common Stock), evidence of its indebtedness or
assets (including cash, but excluding cash dividends and cash
distributions to the extent the same constitute Permitted Common Stock
Cash Distributions and cash dividends which result in a payment of an
equal cash dividend to the holders of the Series A Preferred Stock
pursuant to paragraph (a)(ii) of Section 2 hereof) or rights or
warrants to subscribe for or purchase any of its securities (excluding
those rights and warrants issued to all holders of Common Stock
entitling them for a period expiring within forty-five (45) days after
the record date referred to in paragraph (d)(ii) of this Section 6
above to subscribe for or purchase Common Stock, which rights and
warrants are referred to in and treated under such paragraph (d)(ii)
above) (any of the foregoing being hereinafter in this paragraph
(d)(iii) called the "DISTRIBUTION"), then in each such case the
Conversion Price shall be adjusted so that it shall equal the price
determined by multiplying (A) the Conversion Price in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such Distribution by
(B) a fraction, the numerator of which shall be the Fair Market Value
per share of Common Stock on the record date mentioned below less the
then fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board resolution),
of the portion of the capital stock or assets or evidences of
indebtedness so distributed or of such rights or warrants applicable to
one (1) share of Common Stock, and the denominator of which shall be
the Fair Market Value per share of Common Stock on the record date
mentioned below. Such adjustment shall become effective immediately at
the opening of business on the Business Day next following (except as
provided in paragraph (h) below) the record date for the determination
of stockholders entitled to receive such Distribution. For the purposes
of this paragraph (d)(iii), the distribution of a right or warrant to
subscribe or purchase any of the Corporation's securities, which is
distributed not only to the holders of the Common Stock on the date
fixed for the determination of stockholders entitled to such
Distribution of such right or warrant, but also is distributed with
shares of Common Stock delivered to a Person converting shares of
Series A Preferred Stock after such
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determination date, shall not require an adjustment of the Conversion
Price pursuant to this paragraph (d)(iii); PROVIDED that if on the
date, if any, on which a person converting shares of Series A Preferred
Stock such person would no longer be entitled to receive such right or
warrant with shares of Common Stock (other than as a result of the
termination of all such right or warrant), a distribution of such
rights or warrants shall be deemed to have occurred and the Conversion
Price shall be adjusted as provided in this paragraph (d)(iii) and such
day shall be deemed to be "the date fixed for the determination of the
stockholders entitled to receive such distribution" and "the record
date" within the meaning of the two preceding sentences.
(iv) No adjustment in the Conversion Price shall be
required unless such adjustment would require a cumulative increase or
decrease of at least 1% in such price; PROVIDED, HOWEVER, that any
adjustments that by reason of this paragraph (d)(iv) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment until made; and PROVIDED, FURTHER, that any
adjustment shall be required and made in accordance with the provisions
of this Section 6 (other than this paragraph (d)(iv)) not later than
such time as may be required in order to preserve the tax-free nature
of a distribution to the holders of shares of Common Stock.
Notwithstanding any other provisions of this Section 6, the Corporation
shall not be required to make any adjustment of the Conversion Price
for the Issuance of any shares of Common Stock pursuant to any plan
providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional
amounts in shares of Common Stock under such plan. All calculations
under this Section 6 shall be made to the nearest cent (with $.005
being rounded upward) or to the nearest one-tenth of a share (with .05
of a share being rounded upward), as the case may be. Anything in this
paragraph of this Section 6 to the contrary notwithstanding, the
Corporation shall be entitled, to the extent permitted by law, to make
such reductions in the Conversion Price, in addition to those required
by this paragraph (d), as it in its discretion shall determine to be
advisable in order that any stock dividends, subdivision of shares,
reclassification or combination of shares, distribution of rights or
warrants to purchase stock or securities, or a distribution of other
assets (other than cash dividends) hereafter made by the Corporation to
its stockholders shall not be taxable, or if that is not possible, to
diminish any income taxes that are otherwise payable because of such
event.
(e) If the Corporation shall be a party to any transaction
(including without limitation a merger, consolidation, statutory share exchange,
issuer or self tender offer for all or a substantial portion of the shares of
Common Stock outstanding, sale of all or substantially all of the Corporation's
assets or recapitalization of the Common Stock, but excluding any transaction as
to which paragraph (d)(i) of this Section 6 applies) (each of the foregoing
being referred to herein as a "TRANSACTION"), in each case as a result of which
shares of Common Stock shall be converted into the right to receive stock,
securities or other property (including cash or any combination thereof), each
share of Series A Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereupon be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon consummation of such Transaction by a holder of that number of
shares, or fraction thereof, of Common Stock into
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which one (1) share of Series A Preferred Stock was convertible immediately
prior to such Transaction, assuming such holder of Common Stock (i) is not a
Person with which the Corporation consolidated or into which the Corporation
merged or which merged into the Corporation or to which such sale or transfer
was made, as the case may be ("CONSTITUENT PERSON"), or any affiliate of a
Constituent Person and (ii) failed to exercise such holder's rights of election,
if any, as to the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction (provided that if the kind or
amount of stock, securities and other property (including cash) receivable upon
such Transaction is not the same for each share of Common Stock of the
Corporation held immediately prior to such Transaction by other than a
Constituent Person or an affiliate thereof and in respect of which such rights
of election shall not have been exercised ("NON-ELECTING SHARE"), then for the
purpose of this paragraph (e) the kind and amount of stock, securities and other
property (including cash) receivable upon such Transaction by each Non-Electing
Share shall be deemed to be the kind and amount so receivable per share by
plurality of the Non-Electing Shares. The Corporation shall not be a party to
any Transaction unless the terms of such Transaction are consistent with the
provisions of this paragraph (e), and it shall not consent or agree to the
occurrence of any Transaction until the Corporation has entered into an
agreement with the successor or purchasing entity, as the case may be, for the
benefit of the holders of the Series A Preferred Stock that will contain
provisions enabling the holders of the Series A Preferred Stock that remain
outstanding after such Transaction to convert into the consideration received by
holders of Common Stock at the Conversion Price in effect immediately prior to
such Transaction. The provisions of this paragraph (e) shall similarly apply to
successive Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or any
other distribution) on the Common Stock (other than cash dividends and
cash distributions to the extent the same constitute Permitted Common
Stock Cash Distributions); or
(ii) the Corporation shall authorize the granting to
the holders of the Common Stock of rights or warrants to subscribe for
or purchase any shares of any class or series of capital stock or any
other rights or warrants; or
(iii) there shall be any reclassification of the
Common Stock or any consolidation or merger to which the Corporation is
a party and for which approval of any stockholders of the Corporation
is required, or a statutory share exchange, or an issuer or self tender
offer by the Corporation for all or a substantial portion of its
outstanding shares of Common Stock (or an amendment thereto changing
the maximum number of shares sought or the amount or type of
consideration being offered therefor) or the sale or transfer of all or
substantially all of the assets of the Corporation as an entirety; or
(iv) there shall occur the voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
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then the Corporation shall cause to be filed with the Transfer Agent and shall
cause to be mailed to each holder of shares of Series A Preferred Stock at such
holder's address as shown on the stock records of the Corporation, as promptly
as possible, but at least fifteen (15) days prior to the applicable date
hereinafter specified, a notice stating (A) the record date for the payment of
such dividend, distribution or rights or warrants, or, if a record date is not
established, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution or
winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, statutory share
exchange, sale, transfer, liquidation, dissolution or winding up or (C) the date
on which such tender offer commenced, the date on which such tender offer is
scheduled to expire unless extended, the consideration offered and the other
material terms thereof (or the material terms of any amendment thereto). Failure
to give or receive such notice or any defect therein shall not affect the
legality or validity of the proceedings described in this Section 6.
(g) Whenever the Conversion Price is adjusted as herein
provided, the Corporation shall promptly file with the Transfer Agent an
officer's certificate setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment which
certificate shall be conclusive evidence of the correctness of such adjustment
absent manifest error. Promptly after delivery of such certificate, the
Corporation shall prepare a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the effective date such
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Price to each holder of shares of Series A Preferred Stock at
such holder's last address as shown on the stock records of the Corporation.
(h) In any case in which paragraph (d) of this Section 6
provides that an adjustment shall become effective on the day next following the
record date for an event, the Corporation may defer until the occurrence of such
event (A) issuing to the holder of any share of Series A Preferred Stock
converted after such record date and before the occurrence of such event the
additional Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (B) paying to such
holder any amount of cash in lieu of any fraction pursuant to paragraph (c) of
this Section 6.
(i) There shall be no adjustment of the Conversion Price in
case of the issuance of any capital stock of the Corporation in a
reorganization, acquisition or other similar transaction except as specifically
set forth in this Section 6. If any action or transaction would require
adjustment of the Conversion Price pursuant to more than one paragraph of this
Section 6, only one adjustment shall be made and such adjustment shall be the
amount of adjustment that has the highest absolute value.
(j) If the Corporation shall take any action affecting the
Common Stock, other than action described in this Section 6, that in the opinion
of the Board of Directors would materially adversely affect the conversion
rights of the holders of Series A Preferred Stock, the
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Conversion Price for the Series A Preferred Stock may be adjusted, to the extent
permitted by law, in such manner, if any, and at such time as the Board of
Directors, in its sole discretion, may determine to be equitable under the
circumstances.
(k) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued Common Stock solely for the purpose of effecting conversion of the
Series A Preferred Stock, the full number of shares of Common Stock deliverable
upon the conversion of all outstanding shares of Series A Preferred Stock not
theretofore converted into Common Stock. For purposes of this paragraph (k), the
number of shares of Common Stock that shall be deliverable upon the conversion
of all outstanding shares of Series A Preferred Stock shall be computed as if at
the time of computation all such outstanding shares were held by a single
holder.
The Corporation covenants that any shares of Common Stock issued upon
conversion of the shares of Series A Preferred Stock shall be validly issued,
fully paid and non-assessable.
The Corporation shall use its best efforts to list the shares of Common
Stock required to be delivered upon conversion of the shares of Series A
Preferred Stock, prior to such delivery, upon each national securities exchange,
if any, upon which the outstanding shares of Common Stock are listed at the time
of such delivery.
The Corporation shall take any action necessary to ensure that any
shares of Common Stock issued upon conversion of shares of Series A Preferred
Stock are freely transferable and not subject to any resale restrictions under
the Act, or any applicable state securities or blue sky laws (other than any
shares of Common Stock which are held by an "affiliate" (as defined in Rule 144
under the Act)).
(l) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion or
redemption of shares of Series A Preferred Stock pursuant hereto; PROVIDED,
HOWEVER, that the Corporation shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock or other securities or property in a name other than that of the
holder of the shares of Series A Preferred Stock to be converted or redeemed,
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Corporation the amount of any
such tax or established, to the reasonable satisfaction of the Corporation, that
such tax has been paid.
7. RANKING. Any class or series of capital stock of the
Corporation shall be deemed to rank:
(a) prior or senior to the Series A Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Series A Preferred Stock;
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(b) on a parity with the Series A Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof be different from
those of the Series A Preferred Stock, if the holders of such class of stock or
series and the Series A Preferred Stock shall be entitled to the receipt of
dividends and of amounts distributable upon liquidation, dissolution or winding
up in proportion to their respective amounts of accrued and unpaid dividends per
share or liquidation preferences, without preference or priority one over the
other ("PARITY STOCK"); and
(c) junior to the Series A Preferred Stock, as to the payment
of dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, if such stock or series shall be Common Stock or if the holder of
Series A Preferred Stock shall be entitled to receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of shares of such class or series
("JUNIOR STOCK").
8. VOTING.
(a) If and whenever six (6) quarterly dividends (whether or
not consecutive) payable on the Series A Preferred Stock or any series or class
of Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting the
Board of Directors shall be increased by two (2) (if not already increased by
reason of a similar arrearage with respect to any Parity Stock) and the holders
of shares of Series A Preferred Stock, together with the holders of shares of
every other series of Parity Stock (any other such series, the "VOTING PREFERRED
STOCK"), voting as a single class regardless of series, shall be entitled to
elect the two (2) additional directors to serve on the Board of Directors at any
annual meeting of stockholders or special meeting held in place thereof, or at a
special meeting of the holders of the Series A Preferred Stock and the Voting
Preferred Stock called as hereinafter provided. Whenever all arrears in
dividends on the Series A Preferred Stock and the Voting Preferred Stock then
outstanding shall have been paid and dividends thereon for the current quarterly
dividend period shall have been paid or declared and set apart for payment, then
the right of the holders of the Series A Preferred Stock and the Voting
Preferred Stock to elect such additional two (2) directors shall cease (but
subject always to the same provision of the vesting of such voting rights in the
case of any similar future arrearages in six (6) quarterly dividends), and the
terms of office of all persons elected as directors by the holders of the Series
A Preferred Stock and the Voting Preferred Stock shall forthwith terminate and
the number of the Board of Directors shall be reduced accordingly. At any time
after such voting power shall have been so vested in the holders of Series A
Preferred Stock and the Voting Preferred Stock, the Secretary of the Corporation
may, and upon the written request of any holder of Series A Preferred Stock
(addressed to the Secretary at the principal office of the Corporation) shall,
call a special meeting of the holders of the Series A Preferred Stock and of the
Voting Preferred Stock for the election of the two (2) directors to be elected
by them as herein provided, such call to be made by notice similar to that
provided in the Bylaws of the Corporation for a special meeting of the
stockholders or as required by law. If any such special meeting required to be
called as above provided, shall not be called by the Secretary within twenty
(20) days after receipt of any such request, then any holder of Series A
Preferred Stock may call such meeting, upon the notice
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above provided, and for that purpose shall have access to the stock books of the
Corporation. The directors elected at any such special meeting shall hold office
until the next annual meeting of the stockholders or special meeting held in
lieu thereof if such office shall not have previously terminated as above
provided. If any vacancy shall occur among the directors elected by the holders
of the Series A Preferred Stock and the Voting Preferred Stock, a successor
shall be elected by the Board of Directors, upon the nomination of the then
remaining director elected by the holders of the Series A Preferred Stock and
the Voting Preferred Stock or the successor of such remaining director, to serve
until the next annual meeting of the stockholders or special meeting held in
place thereof if such office shall not have previously terminated as above
provided.
(b) So long as any shares of Series A Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
by law or by the Articles of Incorporation, as amended, the affirmative vote of
at least 66 2/3% of the votes entitled to be cast by the holders of the Series A
Preferred Stock and the Voting Preferred Stock, at the time outstanding, acting
as a single class regardless of series, given in person or by proxy, either in
writing without a meeting or by vote at any meeting called for the purpose,
shall be necessary for effecting or validating:
(i) Any amendment, alteration or repeal of any of the
provisions of this amendment to the Articles of Incorporation, the
Articles of Incorporation or the Bylaws of the Corporation that
materially and adversely affects the voting powers, rights or
preferences of the holders of the Series A Preferred Stock or the
Voting Preferred Stock; PROVIDED, HOWEVER, that the amendment of the
provisions of the Articles of Incorporation so as to authorize or
create, or to increase the authorized amount of, any Junior Stock or
any shares of any class ranking on a parity with the Series A Preferred
Stock or the Voting Preferred Stock shall not be deemed to materially
adversely affect the voting powers, rights or preferences of the
holders of Series A Preferred Stock, and PROVIDED FURTHER, that if any
such amendment, alteration or repeal would materially adversely affect
any voting powers, rights or preferences of the Series A Preferred
Stock or another series of Voting Preferred Stock that are not enjoyed
by some or all of the other series which otherwise would be entitled to
vote in accordance herewith, the affirmative vote of at least 66 2/3%
of the votes entitled to be cast by the holders of all series similarly
affected, similarly given, shall be required in lieu of the affirmative
vote of at least 66 2/3% of the votes entitled to be cast by the
holders of the shares of Series A Preferred Stock and the Voting
Preferred Stock which otherwise would be entitled to vote in accordance
herewith; or
(ii) The authorization or creation of, or the
increase in the authorized amount of, any shares of any class or any
security convertible into shares of any class ranking prior or senior
to the Series A Preferred Stock in the distribution of assets on any
liquidation, dissolution or winding up of the Corporation or in the
payment of dividends;
PROVIDED, HOWEVER, that no such vote of the holders of Series A Preferred Stock
shall be required if, at or prior to the time when such amendment, alteration or
repeal is to take effect, or when the issuance of any such prior shares or
convertible security is to be made, as the case may be,
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provision is made for the redemption of all shares of Series A Preferred Stock
at the time outstanding.
For purposes of the foregoing provisions of this Section 8,
each share of Series A Preferred Stock shall have one (1) vote per share, except
that when any other series of preferred stock shall have the right to vote with
the Series A Preferred Stock as a single class on any matter, then the Series A
Preferred Stock and such other series shall have with respect to such matters
one (1) vote per Twenty-Five Dollars ($25.00) of stated liquidation preferences.
Except as otherwise required by applicable law or as set forth herein, the
Series A Preferred Stock shall not have any relative participating, optional or
other special voting rights and powers other than as set forth herein, and the
consent of the holders thereof shall not be required for the taking of any
corporate action.
9. RECORD HOLDERS. The Corporation and the Transfer Agent may deem and
treat the record holder of any share of Series A Preferred Stock as the true and
lawful owner thereof for all purposes, and neither the Corporation nor the
Transfer Agent shall be affected by any notice to the contrary.
ITEM 2. EXHIBITS.
1.1 Specimen $______ Series A Convertible Cumulative Preferred
Stock Certificate.
1.2 Specimen Common Stock Certificate (previously filed as Exhibit
4.1 to the Corporation's Registration Statement on Form S-4
(Registration No. 333-21403) and incorporated herein by
reference).
2.1 Amended Articles of Incorporation of the Corporation
(previously filed as Exhibit 3.1 to the Corporation's
Registration statement on Form S-4 (Registration No.
333-21403) and incorporated herein by reference).
2.2 Bylaws of the Corporation (previously filed as Exhibit 3.2 to
the Corporation's Registration Statement on Form S-4
(Registration No. 333-21403) and incorporated herein by
reference).
2.3 Form of Articles Supplementary designating the rights of the
holders of $_______ Series A Convertible Cumulative Preferred
Stock (previously filed).
20
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized.
U.S. RESTAURANT PROPERTIES, INC.
Date: November 7, 1997
By: /S/ Michael Warren
----------------------------------
Michael D. Warren
Director of Finance
21
<PAGE>
INDEX TO EXHIBITS
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
- ------- ------- ------------
1.1 Specimen $______ Series A Convertible Cumulative
Preferred Stock Certificate.
1.2 Specimen Common Stock Certificate (previously filed
as Exhibit 4.1 to the Corporation's Registration
Statement on Form S-4 (Registration No. 333-21403)
and incorporated herein by reference).
2.1 Amended Articles of Incorporation of the Corporation
(previously filed as Exhibit 3.1 to the Corporation's
Registration statement on Form S-4 (Registration No.
333-21403) and incorporated herein by reference).
2.2 Bylaws of the Corporation (previously filed as Exhibit
3.2 to the Corporation's Registration Statement on
Form S-4 (Registration No. 333-21403) and
incorporated herein by reference).
2.3 Form of Articles Supplementary designating the
rights of the holders of $_______ Series A
Convertible Cumulative Preferred Stock (previously
filed).
Exhibit 1.1
[FRONT OF STOCK CERTIFICATE]
SHARES OF $_______ SERIES A SHARES OF $______ SERIES A
CUMULATIVE CONVERTIBLE PREFERRED CUMULATIVE CONVERTIBLE
STOCK PAR VALUE $.001 PREFERRED STOCK PAR VALUE $.001
FORMED UNDER THE SHARES
LAWS OF THE STATE
OF MARYLAND
U.S. RESTAURANT
PROPERTIES, INC. THIS CERTIFICATE IS
TRANSFERABLE IN BOSTON
MASS. AND NEW YORK, N.Y.
CUSIP ______________
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFIES THAT
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF $________ SERIES A CUMULATIVE
CONVERTIBLE PREFERRED STOCK OF
U.S. Restaurant Properties, Inc. (the "Company"), transferable only on the books
of the Company by the holder hereof in person, or by duly authorized attorney,
upon the surrender of this Certificate is properly endorsed. This Certificate is
not valid unless countersigned by the Transfer Agent and registered by the
Registrar.
WITNESS the facsimile seal of the Company and the facsimile signatures
of its duly authorized representatives.
Dated:
U.S. RESTAURANT PROPERTIES, INC.
CORPORATE
SEAL
MARYLAND
SECRETARY PRESIDENT Counter signed and Registered:
AMERICAN STOCK TRANSFER
& TRUST COMPANY, Transfer Agent
and Registrar
By:
Authorized Signature
THERE ARE RESTRICTIONS ON THE TRANSFER
OF THE SHARES EVIDENCED BY THIS CERTIFICATE
AS MORE FULLY SET FORTH ON THE REVERSE HEREOF.
<PAGE>
[BACK OF STOCK CERTIFICATE]
U.S. RESTAURANT PROPERTIES, INC.
THE CORPORATION WILL FURNISH TO ANY STOCKHOLDER ON REQUEST AND WITHOUT CHARGE A
FULL STATEMENT OF THE DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND OTHER
RIGHTS, VOTING POWERS, RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS, QUALIFICATIONS
AND TERMS, AND CONDITIONS OF REDEMPTION OF THE STOCK OF EACH CLASS WHICH THE
CORPORATION IS AUTHORIZED TO ISSUE, OR THE DIFFERENCES IN THE RELATIVE RIGHTS
AND PREFERENCES BETWEEN THE SHARES OF EACH SERIES OF A CLASS IN SERIES WHICH THE
CORPORATION IS AUTHORIZED TO ISSUE. TO THE EXTENT THEY HAVE BEEN SET, AND OF THE
AUTHORITY OF THE BOARD OF DIRECTORS TO SET THE RELATIVE RIGHTS AND PREFERENCES
OF SUBSEQUENT SERIES OR CLASSES, SUCH REQUEST MAY BE MADE TO THE SECRETARY OF
THE CORPORATION OR TO ITS TRANSFER AGENT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
OWNERSHIP AND TRANSFER FOR THE PURPOSE OF THE CORPORATION'S MAINTENANCE OF ITS
STATUS AS A REAL STATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"). EXCEPT AS OTHERWISE PROVIDED PURSUANT TO THE CHARTER OF
THE CORPORATION, NO PERSON MAY (1) BENEFICIALLY OWN SHARES OF STOCK IN EXCESS OF
9.8% (OR SUCH OTHER PERCENTAGE AS MAY BE PROVIDED IN THE CHARTER OF THE
CORPORATION) OF THE AGGREGATE VALUE OF ALL OUTSTANDING STOCK (UNLESS SUCH PERSON
IS THE EXISTING HOLDER), OR (2) BENEFICIALLY OWN STOCK THAT WOULD RESULT IN THE
CORPORATION BEING "CLOSELY HELD" UNDER SECTION 856(h) OF THE CODE. ANY PERSON
WHO ATTEMPTS TO BENEFICIALLY OWN SHARES OF STOCK IN EXCESS OF THE ABOVE
LIMITATIONS MUST IMMEDIATELY NOTIFY THE CORPORATION. IF THE RESTRICTIONS ON
OWNERSHIP OR TRANSFER ARE VIOLATED, THE SHARES OF STOCK REPRESENTED HEREBY WILL
BE AUTOMATICALLY CONVERTED INTO SHARES OF EXCESS STOCK WHICH WILL BE HELD IN
TRUST BY THE CORPORATION. THE CORPORATION HAS THE OPTION TO REDEEM SHARES OF
EXCESS STOCK UNDER CERTAIN CIRCUMSTANCES. ALL TERMS IN THIS LEGEND NOT OTHERWISE
DEFINED HEREIN HAVE THE MEANINGS ASCRIBED THERETO IN THE CORPORATION'S CHARTER,
AS THE SAME MAY BE FURTHER AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING
THE RESTRICTIONS ON OWNERSHIP OR TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH
STOCKHOLDER WHO SO REQUESTS.
The following abbreviations, when used in the inscription of the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF TRAN MIN ACT--______ Custodian ______
TEN ENT -- as tenants by the (Cust) (Minor)
entireties
JT TEN -- as tenants in common under Uniform Transfers to Minors
Act ___________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received, _____________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
_______________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
_______________________________________________________________________________
________________________________________________________________________ shares
of $_________ Series A Cumulative Convertible Preferred Stock represented by
the within certificate, and do hereby irrevocably constitute and appoint
______________________________________________________________________ Attorney
to transfer the said shares on the books of the within-named Company with full
power of substitution in the premises.
Dated, ________________________
___________________________________________
NOTICE:THE SIGNATURE TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE
WHATEVER.
Signature(s) Guaranteed by:
- --------------------------
Exhibit 2.3
Series A Cumulative Convertible Preferred Stock
(Liquidation Preference $25.00 Per Share)
ARTICLES SUPPLEMENTARY
U.S. RESTAURANT PROPERTIES, INC.
---------------------------
Articles Supplementary Classifying and Designating a
Series of Preferred Stock as
Series A Cumulative Convertible Preferred Stock
and Fixing Distribution and
Other Preferences and Rights of Such Series
---------------------------
Dated as of November __, 1997
<PAGE>
U.S. RESTAURANT PROPERTIES, INC.
-----------
Articles Supplementary Classifying and Designating a
Series of Preferred Stock as
Series A Cumulative Convertible Preferred Stock
and Fixing Distribution and
Other Preferences and Rights of Such Series
-----------
U.S. Restaurant Properties, Inc., a Maryland corporation, having its
principal office in the State of Maryland in the City of Baltimore (the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Pursuant to authority conferred upon the Board of Directors by the
Articles of Incorporation, as amended (the "Articles of Incorporation"), and
Bylaws of the Corporation, the Board of Directors adopted resolutions
authorizing the creation and issuance of up to Three Million Two Hundred
Thousand (3,200,000) shares, with a liquidation preference of Twenty-Five
Dollars ($25.00) per share, of Series A Cumulative Convertible Preferred Stock
and adopted resolutions granting the Executive Committee of the Board of
Directors with full power and authority, subject to the foregoing resolution, to
determine the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption of the shares of such series. Such preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption, number of
shares and dividend rate, as determined by such duly authorized committee are as
follows:
Section 1. Number of Shares and Designation. This series of Preferred
Stock shall be designated as Series A Cumulative Convertible Preferred Stock
(the "Series A Preferred Stock") and the number of shares which shall constitute
such series shall not be more than 3,220,000 shares, par value $.001 per share,
which number may be decreased (but not below the number thereof then
outstanding) from time to time by the Board of Directors.
Section 2. Definitions. For purposes of the Series A Preferred
Stock, the following terms shall have the meanings indicated:
"Act" shall mean the Securities Act of 1933, as amended.
"affiliate" of a person means a person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with, the person specified.
<PAGE>
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Series A
Preferred Stock.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.
"Call Date" shall have the meaning set forth in paragraph (b) of
Section 5 hereof.
"Common Stock" shall mean the common stock, $.001 par value per share,
of the Corporation or such shares of the Corporation's capital stock
into which such Common Stock shall be reclassified.
"Constituent Person" shall have the meaning set forth in paragraph (e)
of Section 7 hereof.
"Conversion Price" shall mean the conversion price per share of Common
Stock for which each share of Series A Preferred Stock in convertible,
as such Conversion Price may be adjusted pursuant to paragraph (d) of
Section 7. The initial conversion price shall be $_____ (equivalent to
a conversion rate of _____ shares of Common Stock for each share of
Series A Preferred Stock).
"Current Market Price" of publicly traded shares of Common Stock or any
other class or series of capital stock or other security of the
Corporation or of any similar security of any other issuer for any day
shall mean the last reported sales price, regular way on such day, or,
if no sale takes place on such day, the average of the reported closing
bid and asked prices regular way on such day, in either case as
reported on the New York Stock Exchange ("NYSE") or, if such security
is not listed or admitted for trading on the NYSE, on the principal
national securities exchange on which such security is listed or
admitted for trading or, if not listed or admitted for trading on any
national securities exchange, on the National Market of the National
Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or, if such security is not quoted on such National Market,
the average of the closing bid and asked prices on such day in the
over-the-counter market as reported by NASDAQ, or, if bid and asked
prices for such security on such day shall not have been reported
through NASDAQ, the average of the bid and asked prices on such day as
furnished by any NYSE member firm regularly making a market in such
security selected for such purpose by the Chief Executive Officer or
the Board of Directors or if any class or series of securities are not
publicly traded, the fair value of the shares of such class as
determined reasonably and in good faith by the Board of Directors of
the Corporation.
"Distribution" shall have the meaning set forth in paragraph (d)(iii)
of Section 7 hereof.
-2-
<PAGE>
"Dividend Payment Date" shall mean, with respect to each Dividend
Period, the fifteenth day of March, June, September and December, in
each year, commencing on March 15, 1998; provided, however, that if any
Dividend Payment Date falls on any day other than a Business Day, the
dividend payment due on such Dividend Payment Date shall be paid on the
Business Day immediately following such Dividend Payment Date.
"Dividend Periods" shall mean quarterly dividend periods commencing on
January 1, April 1, July 1 and October 1 of each year and ending on and
including the day preceding the first day of the next succeeding
Dividend Period (other than the initial Dividend Period, which shall
commence on the Issue Date and end on and include December 31, 1997).
"Fair Market Value" shall mean the average of the daily Current Market
Prices of a share of Common Stock during five (5) consecutive Trading
Days selected by the Corporation commencing not more than twenty (20)
Trading Days before, and ending not later than, the earlier of the day
in question and the day before the "ex" date with respect to the
issuance or distribution requiring such computation. The term "'ex
date," when used with respect to any issuance or distribution, means
the first day on which the share of Common Stock trades regular way,
without the right to receive such issuance or distribution, on the
exchange or in the market, as the case may be, used to determine that
day's Current Market Price.
"Funds Available for Distribution" shall mean funds from operations
(net income, computed in accordance with generally accepted accounting
principles excluding gains or losses from debt restructuring and sales
of property, plus depreciation and amortization) minus non-revenue
generated capital expenditures and debt principal amortization, as
determined by the Board of Directors on a basis consistent with the
policies and practices adopted by the Corporation for reporting
publicly its results of operations and financial condition.
"Issue Date" shall mean November ___, 1997.
"Junior Stock" shall mean the Common Stock and any other class or
series of capital stock of the Corporation over which the shares of
Series A Preferred Stock have preference or priority in the payment of
dividends or in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.
"Non-Electing Share" shall have the meaning set forth in paragraph (e)
of Section 7 hereof.
"Parity Stock" shall have the meaning set forth in paragraph (b) of
Section 8 hereof.
"Permitted Common Stock Cash Distributions" means cash dividends and
cash distributions paid on Common Stock after __________, 199_ not in
excess of the sum of
-3-
<PAGE>
the Corporation's cumulative undistributed net earnings at __________,
199_, plus the cumulative amount of Funds Available for Distribution
after __________, 199_, minus the cumulative amount of dividends
accumulated, accrued or paid on the Series A Preferred Stock or any
other class of Preferred Stock after __________, 199_.
"Person" shall mean any individual, firm partnership, corporation or
other entity and shall include any successor (by merger or otherwise)
of such entity.
"Press Release" shall have the meaning set forth in paragraph (a)(i)
of Section 5 hereof.
"Series A Preferred Stock" shall have the meaning set forth in Section
1 hereof.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which
indicates, pursuant to a declaration of dividends or other distribution
by the Board of Directors, the allocation of funds to be so paid on any
series or class of capital stock of the Corporation; provided, however,
that if any funds for any class or series of Junior Stock or any class
or series of Parity Stock are placed in a separate account of the
Corporation or delivered to a disbursing, paying or other similar
agent, then "set apart for payment" with respect to the Series A
Preferred Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.
"Trading Day", as to any securities, shall mean any day on which such
securities are traded on the NYSE or, if such securities are not listed
or admitted for trading on the NYSE, on the principal national
securities exchange on which such securities are listed or admitted or,
if such securities are not listed or admitted for trading on any
national securities exchange, on the National Market of NASDAQ or, if
such securities are not quoted on such National Market, in the
securities market in which such securities are traded.
"Transaction" shall have the meaning set forth in paragraph (e) of
Section 7 hereof.
"Transfer Agent" means American Stock Transfer and Trust or such other
U.S. bank with aggregate capital, surplus and undivided profits, as
shown on its last published report, of at least $50,000,000 as may be
designated by the Board of Directors or their designee as the transfer
agent for the Series A Preferred Stock.
"Voting Preferred Stock" shall have the meaning set forth in Section 9
hereof.
-4-
<PAGE>
Section 3. Dividends.
(a) The holders of Series A Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors out of funds legally
available for that purpose, cumulative dividends payable in cash in an amount
per share of Series A Preferred Stock equal to the greater of (i) $_____ per
quarter (equivalent to $_____ per annum) or (ii) the cash dividends paid or
payable on the number of shares of Common Stock, or portion thereof, into which
a share of Series A Preferred Stock is convertible, in each case with
appropriate proration for partial quarters. The amount referred in clause (ii)
of this paragraph (a) with respect to each Dividend Period shall be determined
as of the applicable Dividend Payment Date by multiplying the number of shares
of Common Stock, or portion thereof calculated to the fourth decimal point, into
which a share of Series A Preferred Stock would be convertible at the opening of
business on such Dividend Payment Date (based on the Conversion Price then in
effect) by the quarterly cash dividend payable or paid for such Dividend Period
in respect of a share of Common Stock outstanding as of the record date for the
payment of dividends on the Common Stock with respect to such Dividend Period
or, if different, with respect to the most recent quarterly period for which
dividends with respect to the Common Stock have been declared. Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period
or Periods such dividends shall be declared or there shall be funds of the
Corporation legally available for the payment of such dividends, and shall be
payable quarterly in arrears on the Dividend Payment Dates, commencing on the
first Dividend Payment Date after the Issue Date. Each such dividend shall be
payable in arrears to the holders of record of the Series A Preferred Stock, as
they appear on the stock records of the Corporation at the close of business on
a record date which shall be not more than sixty (60) days prior to the
applicable Dividend Payment Date and shall be fixed by the Board of Directors to
coincide with the record date for the regular quarterly dividends, if any,
payable with respect to the Common Stock. Accumulated, accrued and unpaid
dividends for any past Dividend Periods may be declared and paid at any time,
without reference to any regular Dividend Payment Date, to holders of record on
such date, which date shall not precede by more than forty-five (45) days the
payment date thereof, as may be fixed by the Board of Directors. The amount of
accumulated, accrued and unpaid dividends on any share of Series A Preferred
Stock, or fraction thereof, at any date shall be the amount of any dividends
thereon calculated at the applicable rate to and including such date, whether or
not earned or declared, which have not been paid in cash.
(b) The amount of dividends payable per share of Series A
Preferred Stock for each Dividend Period shall be computed by dividing the
annual dividend by four (4). The amount of dividends payable per share of Series
A Preferred Stock for the initial Dividend Period, or any other period shorter
or longer than a full Dividend Period, shall be computed ratably on the basis of
twelve (12) 30-day months and a 360-day year. Holders of Series A Preferred
Stock shall not be entitled to any dividends, whether payable in cash, property
or stock, in excess of cumulative dividends, as herein provided, on the Series A
Preferred Stock. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Series A Preferred
Stock that may be in arrears.
-5-
<PAGE>
(c) So long as any of the shares of Series A Preferred Stock
are outstanding, no dividends, except as described in the immediately following
sentence, shall be declared or paid or set apart for payment by the Corporation
or other distribution of cash or other property declared or made directly or
indirectly by the Corporation or any affiliate or any person acting on behalf of
the Corporation or any of its affiliates with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of
accumulated, accrued and unpaid dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof have
been or contemporaneously are set apart for such payment on the Series A
Preferred Stock for all Dividend Periods terminating on or prior to the Dividend
Payment Date with respect to such class or series of Parity Stock. When
dividends are not paid in full or a sum sufficient for such payment is not set
apart, as aforesaid, all dividends declared upon the Series A Preferred Stock
and all dividends declared upon any other class or series of Parity Stock shall
be declared ratably in proportion to the respective amounts of dividends
accumulated, accrued and unpaid on the Series A Preferred Stock and accumulated,
accrued and unpaid on such Parity Stock.
(d) So long as any of the shares of Series A Preferred Stock
are outstanding, no dividends (other than dividends or distributions paid in
shares of or options, warrants or rights to subscribe for or purchase shares of
Junior Stock) shall be declared or paid or set apart for payment by the
Corporation or other distribution of cash or other property declared or made
directly or indirectly by the Corporation or any affiliate or any person acting
on behalf of the Corporation or any of its affiliates with respect to any shares
of Junior Stock, nor shall any shares of Junior Stock be redeemed, purchased or
otherwise acquired (other than a redemption, purchase or other acquisition of
Common Stock made for purposes of an employee incentive or benefit plan of the
Corporation or any subsidiary) for any consideration (or any moneys be paid to
or made available for a sinking-fund for the redemption of any shares of any
such stock) directly or indirectly by the Corporation or any affiliate or any
person acting on behalf of the Corporation or any of its affiliates (except by
conversion into or exchange for Junior Stock), nor shall any other cash or other
property otherwise be paid or distributed to or for the benefit of any holder of
shares of Junior Stock in respect thereof, directly or indirectly, by the
Corporation or any affiliate or any person acting on behalf of the Corporation
or any of its affiliates unless in each case (i) the full cumulative dividends
(including all accumulated, accrued and unpaid dividends) on all outstanding
shares of Series A Preferred Stock and any other Parity Stock of the Corporation
shall have been paid or such dividends have been declared and set apart for
payment for all past Dividend Periods with respect to the Series A Preferred
Stock and all past dividend periods with respect to such Parity Stock and (ii)
sufficient funds shall have been paid or set apart for the payment of the full
dividend for the current Dividend Period with respect to the Series A Preferred
Stock and the current Dividend Period with respect to such Parity Stock.
Section 4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus) shall
be made to or set apart for the holders of
-6-
<PAGE>
Junior Stock, the holders of shares of Series A Preferred Stock shall be
entitled to receive Twenty-Five Dollars ($25.00) per share of Series A Preferred
Stock plus an amount equal to all dividends (whether or not earned or declared)
accumulated, accrued and unpaid thereon to the date of final distribution to
such holders; but such holders shall not be entitled to any further payment.
Until the holders of the Series A Preferred Stock have been paid the liquidation
preference in full, no payment will be made to any holder of Junior Stock upon
the liquidation, dissolution or winding up of the Corporation. If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of Series A
Preferred Stock shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other shares of any class or series of
Parity Stock, then such assets, or the proceeds thereof, shall be distributed
among the holders of Series A Preferred Stock and any such other Parity Stock
ratably in the same proportion as the respective amounts that would be payable
on such Series A Preferred Stock and any such other Parity Stock if all amounts
payable thereon were paid in full. For the purposes of this Section 4, (i) a
consolidation or merger of the Corporation with one or more corporations, (ii) a
sale or transfer of all or substantially all of the Corporation's assets, or
(iii) a statutory share exchange shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of any shares of
Parity Stock, upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Series
A Preferred Stock and any Parity Stock, as provided in this Section 4, any other
series or class or classes of Junior Stock shall, subject to the respective
terms thereof, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Series A Preferred Stock and any Parity
Stock shall not be entitled to share therein.
Section 5. Redemption at the Option of the Corporation.
(a) Shares of Series A Preferred Stock shall not be redeemable
by the Corporation prior to __________. On and after __________, the
Corporation, at its option, may redeem shares of Series A Preferred Stock, in
whole or from time to time in part, as set forth herein, subject to the
provisions described below:
(i) Shares of Series A Preferred Stock may be
redeemed, in whole, or in part, at the option of the Corporation, at
any time on or after __________ by issuing and delivering to each
holder for each share of Series A Preferred Stock to be redeemed such
number of authorized but previously unissued shares of Common Stock as
equals the liquidation preference (excluding any accumulated, accrued
and unpaid dividends, if any, to the Call Date (as defined in paragraph
(b) below), which are to be paid in cash, whether or not earned or
declared, as provided below) per share of Series A Preferred Stock
divided by the Conversion Price as in effect as of the opening of
business on the Call Date; provided, however, that the Corporation may
redeem shares of Series A preferred Stock pursuant to this paragraph
(a)(i) only if for twenty (20) Trading Days,
-7-
<PAGE>
within any period of thirty (30) consecutive Trading Days, including
the last Trading Day of such 30-Trading Day period, the Current Market
Price of the Common Stock on each of such twenty (20) Trading Days
equals or exceeds the Conversion Price in effect on such Trading Days.
In order to exercise its redemption option pursuant to this paragraph
(a)(i), the Corporation must issue a press release announcing the
redemption (the "Press Release") prior to the opening of business on
the second Trading Day after the condition in the preceding sentence
has, from time to time, been satisfied. The Corporation may not issue a
Press Release prior to ____________. The Press Release shall announce
the redemption and set forth the number of shares of Series A Preferred
Stock that the Corporation intends to redeem; or
(ii) Shares of Series A Preferred Stock may be
redeemed, in whole or in part, at the option of the Corporation at any
time on or after ____________ out of funds legally available therefor
at a redemption price payable in cash equal to Twenty-Five Dollars
($25.00) per share of Series A Preferred Stock (plus an amount equal to
all accumulated, accrued and unpaid dividends, if any, to the Call
Date, whether or not earned or declared, as provided below).
(b) Shares of Series A Preferred Stock shall be redeemed by
the Corporation on the date specified in the notice to holders required under
paragraph (d) of this Section 5 (the "Call Date"). The Call Date shall be
selected by the Corporation, shall be specified in the notice of redemption and
shall be not less than thirty (30) days nor more than sixty (60) days after (i)
the date on which the Corporation issues the Press Release, if such redemption
is pursuant to paragraph (a)(i) of this Section 5, and (ii) the date notice of
redemption is sent by the Corporation, if such redemption is pursuant to
paragraph (a)(ii) of this Section 5. Upon any redemption of shares of Series A
Preferred Stock pursuant to this paragraph (a)(i) or (a)(ii) of this Section 5,
the Corporation shall pay in cash to the holder of such shares an amount equal
to all accumulated, accrued and unpaid dividends, if any, to the Call Date,
whether or not earned or declared. Immediately prior to authorizing any
redemption of the Series A Preferred Stock, and as a condition precedent for
such redemption, the Company, by resolution of its Board of Directors, shall
declare a mandatory dividend on the Series A Preferred Stock payable in cash on
the Call Date in an amount equal to all accumulated, accrued and unpaid
dividends as of the Call Date on the Series A Preferred Stock to be redeemed,
which amount shall be added to the redemption price. If the Call Date falls
after a dividend payment record date and prior to the corresponding Dividend
Payment Date, then each holder of Series A Preferred Stock at the close of
business on such dividend payment record date shall be entitled to the dividend
payable on such shares on the corresponding Dividend Payment Date
notwithstanding the redemption of such shares prior to such Dividend Payment
Date. Except as provided above, the Corporation shall make no payment or
allowance for accumulated or accrued dividends on shares of Series A Preferred
Stock called for redemption or on the shares of Common Stock issued upon such
redemption.
(c) If full cumulative dividends on all outstanding shares of
Series A Preferred Stock and any other class or series of Parity Stock of the
Corporation have not been paid or
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declared and set apart for payment, no shares of Series A Preferred Stock may be
redeemed unless all outstanding shares of Series A Preferred Stock are
simultaneously redeemed and neither the Corporation nor any affiliate of the
Corporation may purchase or acquire shares of Series A Preferred Stock,
otherwise than pursuant to a purchase or exchange offer made on the same terms
to all holders of shares of Series A Preferred Stock.
(d) If the corporation shall redeem shares of Series A
Preferred Stock pursuant to paragraph (a) of this Section 5, notice of such
redemption shall be given to each holder of record of the shares to be redeemed
and, if such redemption is pursuant to paragraph (a)(i) of this Section 5, such
notice shall be given not more than four (4) Business Days after the date on
which the Corporation issues the Press Release. Such notice shall be provided by
first class mail, postage prepaid, at such holder's address as the same appears
on the stock records of the Corporation, or by publication in The Wall Street
Journal or The New York Times, or if neither such newspaper is then being
published, any other daily newspaper of national circulation not less than
thirty (30) nor more than sixty (60) days prior to the Call Date. If the
Corporation elects to provide such notices by publication, it shall also
promptly mail notice of such redemption to the holders of the shares of Series A
Preferred Stock to be redeemed. Neither the failure to mail any notice required
by this paragraph (d), nor any defect therein or in the mailing thereof, to any
particular holder, shall affect the sufficiency of the notice or the validity of
the proceedings for redemption with respect to the other holders. Any notice
which was failed in the manner herein provided shall be conclusively presumed to
have been duly given on the date mailed whether or not the holder receives the
notice. Each such mailed or published notice shall state, as appropriate: (1)
the Call Date; (2) the number of shares of Series A Preferred Stock to be
redeemed and, if fewer than all such shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (3) whether
redemption will be for shares of Common stock pursuant to paragraph (a)(i) of
this Section 5 or for cash pursuant to paragraph (a)(ii) of this Section 5, and,
if redemption will be for Common Stock, the number of shares of Common Stock (or
fraction of a share of Common Stock) to be issued with respect to each share of
Series A Preferred Stock to be redeemed; (4) the place or places at which
certificates for such shares are to be surrendered for certificates representing
shares of Common Stock; (5) the then-current Conversion Price; and (6) that
dividends on the shares of Series A Preferred Stock to be redeemed shall cease
to accrue on such Call Date except as otherwise provided herein. Notice having
been published or mailed as aforesaid, from and after the Call Date (unless the
Corporation shall fail to issue and make available at the office of the Transfer
Agent the number of shares of Common Stock and/or amount of cash necessary to
effect such redemption, including all accumulated, accrued and unpaid dividends
to the Call Date, whether or not earned or declared), (i) except as otherwise
provided herein, dividends on the shares of Series A Preferred Stock so called
for redemption shall cease to accumulate or accrue on the shares of Series A
Preferred Stock called for redemption (except that, in the case of a Call Date
after a dividend record date and prior to the related Dividend Payment Date,
holders of Series A Preferred Stock on the dividend record date will be entitled
on such Dividend Payment Date to receive the dividend payable on such shares),
(ii) said shares shall no longer be deemed to be outstanding, and (iii) all
rights of the holders thereof as holders of Series A Preferred Stock of the
Corporation shall cease (except the rights to receive the shares of Common Stock
and/or cash
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payable upon such redemption, without interest thereon, upon surrender and
endorsement of their certificates if so required and to receive any dividends
payable thereon). The Corporation's obligation to provide shares of Common Stock
and/or cash in accordance with the preceding sentence shall be deemed fulfilled
if, on or before the Call Date, the Corporation shall deposit with a bank or
trust company (which may be an affiliate of the Corporation) that has an office
in the Borough of Manhattan, The City of New York, or in _______________ and
that has, or is an affiliate of a bank or trust company that has, a capital and
surplus of at least $50,000,000, such number of shares of Common Stock and such
amount of cash as is necessary for such redemption, in trust, with irrevocable
instructions that such shares of Common Stock and/or cash be applied to the
redemption of the shares of Series A Preferred Stock so called for redemption.
In the case of any redemption pursuant to paragraph (a)(i) of this Section 5, at
the close of business on the Call Date, each holder of shares of Series A
Preferred Stock to be redeemed (unless the Corporation defaults in the delivery
of the shares of Common Stock or cash payable on such Call Date) shall be deemed
to be the record holder of the number of shares of Common Stock into which such
shares of Series A Preferred Stock are to be converted at redemption, regardless
of whether such holder has surrendered the certificates representing the shares
of Series A Preferred Stock to be so redeemed. No interest shall accrue for the
benefit of the holders of shares of Series A Preferred Stock to be redeemed on
any cash so set aside by the Corporation. Subject to applicable escheat laws,
any such cash unclaimed at the end of two (2) years from the Call Date shall
revert to the general funds of the Corporation, after which reversion the
holders of shares of Series A Preferred Stock so called for redemption shall
look only to the general funds of the Corporation for the payment of such cash.
As promptly as practicable after the surrender in accordance with said
notice of the certificates for any such shares so redeemed (properly endorsed or
assigned for transfer, if the Corporation shall so require and if the notice
shall so state), such certificates shall be exchanged for certificates
representing shares of Common Stock and/or any cash (without interest thereon)
for which such shares have been redeemed in accordance with such notice. If
fewer than all the outstanding shares of Series A Preferred Stock are to be
redeemed, shares to be redeemed shall be selected by the Corporation from
outstanding shares of Series A Preferred Stock not previously called for
redemption by lot or, with respect to the number of shares of Series A Preferred
Stock held of record by each holder of such shares, pro rata (as nearly as may
be) or by any other method as may be determined by the Board of Directors in its
discretion to be equitable. If fewer than all the shares of Series A Preferred
Stock represented by any certificate are redeemed, then a new certificate
representing the unredeemed shares shall be issued without cost to the holders
thereof.
(e) In the case of any redemption pursuant to paragraph (a)(i)
of this Section 5, no fractional shares of Common Stock or scrip representing
fractions of shares of Common Stock shall be issued upon redemption of the
shares of Series A Preferred Stock. Instead of any fractional interest in a
share of Common Stock that would otherwise be deliverable upon redemption of
shares of Series A Preferred Stock, the Corporation shall pay to the holder of
such share an amount in cash (computed to the nearest cent) based upon the
Current Market Price of the Common Stock on the Trading Day immediately
preceding the Call Date. If more than one
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<PAGE>
share shall be surrendered for redemption at one time by the same holder, the
number of full shares of Common Stock issuable upon redemption thereof shall be
computed on the basis of the aggregate number of shares of Series A Preferred
Stock so surrendered.
(f) In the case of any redemption pursuant to paragraph (a)(i)
of this Section 5, the Corporation covenants that any shares of Common Stock
issued upon redemption of shares of Series A Preferred Stock shall be validly
issued, fully paid and non-assessable. The Corporation shall use its best
efforts to list, subject to official notice of issuance, the shares of Common
Stock required to be delivered upon any such redemption of shares of Series A
Preferred Stock, prior to such redemption, upon each national securities
exchange, if any, upon which the outstanding shares of Common Stock are listed
at the time of such delivery.
The Corporation shall take any action necessary to ensure that any
shares of Common Stock issued upon the redemption of Series A Preferred Stock
are freely transferable and not subject to any resale restrictions under the
Act, or any applicable state securities or blue sky laws (other than any shares
of Common Stock issued upon redemption of any Series A Preferred Stock which are
held by an "affiliate" (as defined in Rule 144 under the Act) of the
Corporation).
Section 6. Stock To Be Retired. All shares of Series A Preferred Stock
which shall have been issued and reacquired in any manner by the Corporation
shall be restored to the status of authorized, but unissued shares of Preferred
Stock, without designation as to series. The Corporation may also retire any
unissued shares of Series A Preferred Stock, and such shares shall then be
restored to the status of authorized but unissued shares of Preferred Stock,
without designation as to series.
Section 7. Conversion.
Holders of shares of Series A Preferred Stock shall have the right to
convert all or a portion of such shares into shares of Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of this
Section 7, a holder of shares of Series A Preferred Stock shall have the right,
at such holder's option, at any time to convert such shares, in whole or in
part, into the number of fully paid and non-assessable shares of authorized but
previously unissued shares of Common Stock obtained by dividing the aggregate
liquidation preference (excluding any accumulated, accrued and unpaid dividends)
of such shares by the Conversion Price (as in effect at the time and on the date
provided for in the last clause of paragraph (b) of this Section 7) by
surrendering such shares to be converted, such surrender to be made in the
manner provided in paragraph (b) of this Section 7; provided, however, that the
right to convert shares of Series A Preferred Stock called for redemption
pursuant to Section 5 shall terminate at the close of business on the Call Date
fixed for such redemption, unless the Corporation shall default in making
payment of shares of Common Stock and/or cash payable upon such redemption under
Section 5 hereof.
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<PAGE>
(b) In order to exercise the conversion right, the holder of
each share of Series A Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Transfer Agent, accompanied by
written notice to the Corporation that the holder thereof elects to convert such
share of Series A Preferred Stock. Unless the shares issuable on conversion are
to be issued in the same name as the name in which such share of Series A
Preferred Stock is registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by the holder or such holder's duly authorized attorney and an
amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Corporation demonstrating that such taxes have been paid).
Holders of shares of Series A Preferred Stock at the close of business
on a dividend payment record date shall be entitled to receive the dividend
payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion thereof following such dividend payment record
date and prior to such Dividend Payment Date. However, shares of Series A
Preferred Stock surrendered for conversion during the period between the close
of business on any dividend payment record date and the opening of business on
the corresponding Dividend Payment Date (except shares converted after the
issuance of notice of redemption with respect to a Call Date during such period,
such shares of Series A Preferred Stock being entitled to such dividend on the
Dividend Payment Date) must be accompanied by payment of an amount equal to the
dividend payable on such shares on such Dividend Payment Date. A holder of
shares of Series A Preferred Stock on a dividend payment record date who (or
whose transferee) tenders any such shares for conversion into shares of Common
Stock on such Dividend Payment Date will receive the dividend payable by the
Corporation on such shares of Series A Preferred Stock on such date, and the
converting holder need not include payment of the amount of such dividend upon
surrender of shares of Series A Preferred Stock for conversion. Except as
provided above, the Corporation shall make no payment or allowance for unpaid
dividends, whether or not in arrears, on converted shares or for dividends on
the shares of Common Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates for
shares of Series A Preferred Stock as aforesaid, the Corporation shall issue and
shall deliver at such office to such holder, or send on such holder's written
order, a certificate or certificates for the number of full shares of Common
Stock issuable upon the conversion of such shares of Series A Preferred Stock in
accordance with provisions of this Section 7, and any fractional interest in
respect of a share of Common Stock arising upon such conversion shall be settled
as provided in paragraph (c) of this Section 7.
Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which the certificates for shares of
Series A Preferred Stock shall have been surrendered and such notice shall have
been received by the Corporation as aforesaid (and, if applicable, payment of an
amount equal to the dividend payable on such shares shall have been received by
the Corporation as above described), and the person or persons in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such
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<PAGE>
conversion shall be deemed to have become the holder or holders of record of the
shares represented thereby at such time on such date and such conversion shall
be at the Conversion Price in effect at such time on such date unless the stock
transfer books of the Corporation shall be closed on that date, in which event
such person or persons shall be deemed to have become holder or holders of
record at the close of business on the next succeeding day on which such stock
transfer books are open, but such conversion shall be at the Conversion Price in
effect on the date on which such shares shall have been surrendered and such
notice shall have been received by the Corporation.
(c) No fractional share of Common Stock or scrip representing
fractions of a share of Common Stock shall be issued upon conversion of the
shares of Series A Preferred Stock. Instead of any fractional interest in a
share of Common Stock that would otherwise be deliverable upon the conversion of
shares of Series A Preferred Stock, the Corporation shall pay to the holder of
such share an amount in cash based upon the Current Market Price of the Common
Stock on the Trading Day immediately preceding the date of conversion. If more
than one (1) share shall be surrendered for conversion at one time by the same
holder, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of shares of
Series A Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to
time as follows:
(i) If the Corporation shall after the Issue Date (A)
pay a dividend or make a distribution on any class of its capital stock
in shares of Common Stock, (B) subdivide its outstanding Common Stock
into a greater number of shares, (C) combine its outstanding Common
Stock into a smaller number of shares or (D) issue any shares of
capital stock by reclassification of its Common Stock, the Conversion
Price in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive
such dividend or distribution or at the opening of business on the day
following the day on which such subdivision, combination or
reclassification becomes effective, as the case may be, shall be
adjusted so that the holder of any share of Series A Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock (or fraction of a share of Common
Stock) that such holder would have owned or have been entitled to
receive after the happening of any of the events described above had
such share of Series A Preferred Stock been converted immediately prior
to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or
reclassification. An adjustment made pursuant to this paragraph (d)(i)
of this Section 7 shall become effective immediately after the opening
of business on the day next following the record date (except as
provided in paragraph (h) below) in the case of a dividend or
distribution and shall become effective immediately after the opening
of business on the day next following the effective date in the case of
a subdivision, combination or reclassification.
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<PAGE>
(ii) If the Corporation shall issue after the Issue
Date rights, options or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 days after the record
date described below in this paragraph (d)(ii) of this Section 7) to
subscribe for or purchase Common Stock at a price per share less than
the Fair Market Value per share of the Common Stock on the record date
for the determination of stockholders entitled to receive such rights
or warrants, then the Conversion Price in effect at the opening of
business on the day next following such record date shall be adjusted
to equal the price determined by multiplying (A) the Conversion Price
in effect immediately prior to the opening of business on the day
following the date fixed for such determination by (B) a fraction, the
numerator of which shall be the sum of (X) the number of shares of
Common Stock outstanding on the close of business on the date fixed for
such determination and (Y) the number of shares that the aggregate
proceeds to the Corporation from the exercise of such rights or
warrants for Common Stock would purchase at such Fair Market Value, and
the denominator of which shall be the sum of (XX) the number of shares
of Common Stock outstanding on the close of business on the date fixed
for such determination and (YY) the number of additional shares of
Common Stock offered for subscription or purchase pursuant to such
rights or warrants. Such adjustment shall become effective immediately
after the opening of business on the day next following such record
date (except as provided in paragraph (h) below). In determining
whether any rights or warrants entitle the holders of Common Stock to
subscribe for or purchase Common Stock at less than such Fair Market
Value, there shall be taken into account any consideration received by
the Corporation upon issuance and upon exercise of such rights or
warrants, the value of such consideration, if other than cash, to be
determined in good faith by the Board of Directors.
(iii) If the Corporation shall distribute to all
holders of its Common Stock any shares of capital stock of the
Corporation (other than Common Stock), evidence of its indebtedness or
assets (including cash, but excluding cash dividends and cash
distributions to the extent the same constitute Permitted Common Stock
Cash Distributions and cash dividends which result in a payment of an
equal cash dividend to the holders of the Series A Preferred Stock
pursuant to paragraph (a)(ii) of Section 3 hereof) or rights or
warrants to subscribe for or purchase any of its securities (excluding
those rights and warrants issued to all holders of Common Stock
entitling them for a period expiring within forty-five (45) days after
the record date referred to in paragraph (d)(ii) of this Section 7
above to subscribe for or purchase Common Stock, which rights and
warrants are referred to in and treated under such paragraph (d)(ii)
above) (any of the foregoing being hereinafter in this paragraph
(d)(iii) called the "Distribution"), then in each such case the
Conversion Price shall be adjusted so that it shall equal the price
determined by multiplying (A) the Conversion Price in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such Distribution by
(B) a fraction, the numerator of which shall be the Fair Market Value
per share of Common Stock on the record date mentioned below less the
then fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board resolution),
of the portion of the capital
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<PAGE>
stock or assets or evidences of indebtedness so distributed or of such
rights or warrants applicable to one (1) share of Common Stock, and the
denominator of which shall be the Fair Market Value per share of Common
Stock on the record date mentioned below. Such adjustment shall become
effective immediately at the opening of business on the Business Day
next following (except as provided in paragraph (h) below) the record
date for the determination of stockholders entitled to receive such
Distribution. For the purposes of this paragraph (d)(iii), the
distribution of a right or warrant to subscribe or purchase any of the
Corporation's securities, which is distributed not only to the holders
of the Common Stock on the date fixed for the determination of
stockholders entitled to such Distribution of such right or warrant,
but also is distributed with shares of Common Stock delivered to a
Person converting shares of Series A Preferred Stock after such
determination date, shall not require an adjustment of the Conversion
Price pursuant to this paragraph (d)(iii); provided that if on the
date, if any, on which a person converting shares of Series A Preferred
Stock such person would no longer be entitled to receive such right or
warrant with shares of Common Stock (other than as a result of the
termination of all such right or warrant), a distribution of such
rights or warrants shall be deemed to have occurred and the Conversion
Price shall be adjusted as provided in this paragraph (d)(iii) and such
day shall be deemed to be "the date fixed for the determination of the
stockholders entitled to receive such distribution" and "the record
date" within the meaning of the two preceding sentences.
(iv) No adjustment in the Conversion Price shall be
required unless such adjustment would require a cumulative increase or
decrease of at least 1% in such price; provided, however, that any
adjustments that by reason of this paragraph (d)(iv) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment until made; and provided, further, that any
adjustment shall be required and made in accordance with the provisions
of this Section 7 (other than this paragraph (d)(iv)) not later than
such time as may be required in order to preserve the tax-free nature
of a distribution to the holders of shares of Common Stock.
Notwithstanding any other provisions of this Section 7, the Corporation
shall not be required to make any adjustment of the Conversion Price
for the Issuance of any shares of Common Stock pursuant to any plan
providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional
amounts in shares of Common Stock under such plan. All calculations
under this Section 7 shall be made to the nearest cent (with $.005
being rounded upward) or to the nearest one-tenth of a share (with .05
of a share being rounded upward), as the case may be. Anything in this
paragraph of this Section 7 to the contrary notwithstanding, the
Corporation shall be entitled, to the extent permitted by law, to make
such reductions in the Conversion Price, in addition to those required
by this paragraph (d), as it in its discretion shall determine to be
advisable in order that any stock dividends, subdivision of shares,
reclassification or combination of shares, distribution of rights or
warrants to purchase stock or securities, or a distribution of other
assets (other than cash dividends) hereafter made by the Corporation to
its stockholders shall not be taxable, or if that is not possible, to
diminish any income taxes that are otherwise payable because of such
event.
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<PAGE>
(e) If the Corporation shall be a party to any transaction
(including without limitation a merger, consolidation, statutory share exchange,
issuer or self tender offer for all or a substantial portion of the shares of
Common Stock outstanding, sale of all or substantially all of the Corporation's
assets or recapitalization of the Common Stock, but excluding any transaction as
to which paragraph (d)(i) of this Section 7 applies) (each of the foregoing
being referred to herein as a "Transaction"), in each case as a result of which
shares of Common Stock shall be converted into the right to receive stock,
securities or other property (including cash or any combination thereof), each
share of Series A Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereupon be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon consummation of such Transaction by a holder of that number of
shares, or fraction thereof, of Common Stock into which one (1) share of Series
A Preferred Stock was convertible immediately prior to such Transaction,
assuming such holder of Common Stock (i) is not a Person with which the
Corporation consolidated or into which the Corporation merged or which merged
into the Corporation or to which such sale or transfer was made, as the case may
be ("Constituent Person"), or any affiliate of a Constituent Person and (ii)
failed to exercise such holder's rights of election, if any, as to the kind or
amount of stock, securities and other property (including cash) receivable upon
such Transaction (provided that if the kind or amount of stock, securities and
other property (including cash) receivable upon such Transaction is not the same
for each share of Common Stock of the Corporation held immediately prior to such
Transaction by other than a Constituent Person or an affiliate thereof and in
respect of which such rights of election shall not have been exercised
("Non-Electing Share"), then for the purpose of this paragraph (e) the kind and
amount of stock, securities and other property (including cash) receivable upon
such Transaction by each Non-Electing Share shall be deemed to be the kind and
amount so receivable per share by plurality of the Non-Electing Shares. The
Corporation shall not be a party to any Transaction unless the terms of such
Transaction are consistent with the provisions of this paragraph (e), and it
shall not consent or agree to the occurrence of any Transaction until the
Corporation has entered into an agreement with the successor or purchasing
entity, as the case may be, for the benefit of the holders of the Series A
Preferred Stock that will contain provisions enabling the holders of the Series
A Preferred Stock that remain outstanding after such Transaction to convert into
the consideration received by holders of Common Stock at the Conversion Price in
effect immediately prior to such Transaction. The provisions of this paragraph
(e) shall similarly apply to successive Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or any
other distribution) on the Common Stock (other than cash dividends and
cash distributions to the extent the same constitute Permitted Common
Stock Cash Distributions); or
(ii) the Corporation shall authorize the granting to
the holders of the Common Stock of rights or warrants to subscribe for
or purchase any shares of any class or series of capital stock or any
other rights or warrants; or
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(iii) there shall be any reclassification of the
Common Stock or any consolidation or merger to which the Corporation is
a party and for which approval of any stockholders of the Corporation
is required, or a statutory share exchange, or an issuer or self tender
offer by the Corporation for all or a substantial portion of its
outstanding shares of Common Stock (or an amendment thereto changing
the maximum number of shares sought or the amount or type of
consideration being offered therefor) or the sale or transfer of all or
substantially all of the assets of the Corporation as an entirety; or
(iv) there shall occur the voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
then the Corporation shall cause to be filed with the Transfer Agent and shall
cause to be mailed to each holder of shares of Series A Preferred Stock at such
holder's address as shown on the stock records of the Corporation, as promptly
as possible, but at least fifteen (15) days prior to the applicable date
hereinafter specified, a notice stating (A) the record date for the payment of
such dividend, distribution or rights or warrants, or, if a record date is not
established, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution or
winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, statutory share
exchange, sale, transfer, liquidation, dissolution or winding up or (C) the date
on which such tender offer commenced, the date on which such tender offer is
scheduled to expire unless extended, the consideration offered and the other
material terms thereof (or the material terms of any amendment thereto). Failure
to give or receive such notice or any defect therein shall not affect the
legality or validity of the proceedings described in this Section 7.
(g) Whenever the Conversion Price is adjusted as herein
provided, the Corporation shall promptly file with the Transfer Agent an
officer's certificate setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment which
certificate shall be conclusive evidence of the correctness of such adjustment
absent manifest error. Promptly after delivery of such certificate, the
Corporation shall prepare a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the effective date such
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Price to each holder of shares of Series A Preferred Stock at
such holder's last address as shown on the stock records of the Corporation.
(h) In any case in which paragraph (d) of this Section 7
provides that an adjustment shall become effective on the day next following the
record date for an event, the Corporation may defer until the occurrence of such
event (A) issuing to the holder of any share of Series A Preferred Stock
converted after such record date and before the occurrence of such event the
additional Common Stock issuable upon such conversion by reason of the
adjustment
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required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (B) paying to such holder
any amount of cash in lieu of any fraction pursuant to paragraph (c) of this
Section 7.
(i) There shall be no adjustment of the Conversion Price in
case of the issuance of any capital stock of the Corporation in a
reorganization, acquisition or other similar transaction except as specifically
set forth in this Section 7. If any action or transaction would require
adjustment of the Conversion Price pursuant to more than one paragraph of this
Section 7, only one adjustment shall be made and such adjustment shall be the
amount of adjustment that has the highest absolute value.
(j) If the Corporation shall take any action affecting the
Common Stock, other than action described in this Section 7, that in the opinion
of the Board of Directors would materially adversely affect the conversion
rights of the holders of Series A Preferred Stock, the Conversion Price for the
Series A Preferred Stock may be adjusted, to the extent permitted by law, in
such manner, if any, and at such time as the Board of Directors, in its sole
discretion, may determine to be equitable under the circumstances.
(k) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued Common Stock solely for the purpose of effecting conversion of the
Series A Preferred Stock, the full number of shares of Common Stock deliverable
upon the conversion of all outstanding shares of Series A Preferred Stock not
theretofore converted into Common Stock. For purposes of this paragraph (k), the
number of shares of Common Stock that shall be deliverable upon the conversion
of all outstanding shares of Series A Preferred Stock shall be computed as if at
the time of computation all such outstanding shares were held by a single
holder.
The Corporation covenants that any shares of Common Stock issued upon
conversion of the shares of Series A Preferred Stock shall be validly issued,
fully paid and non-assessable.
The Corporation shall use its best efforts to list the shares of Common
Stock required to be delivered upon conversion of the shares of Series A
Preferred Stock, prior to such delivery, upon each national securities exchange,
if any, upon which the outstanding shares of Common Stock are listed at the time
of such delivery.
The Corporation shall take any action necessary to ensure that any
shares of Common Stock issued upon conversion of shares of Series A Preferred
Stock are freely transferable and not subject to any resale restrictions under
the Act, or any applicable state securities or blue sky laws (other than any
shares of Common Stock which are held by an "affiliate" (as defined in Rule 144
under the Act)).
(l) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion or
redemption of shares of Series A Preferred Stock pursuant
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hereto; provided, however, that the Corporation shall not be required to pay any
tax that may be payable in respect of any transfer involved in the issue or
delivery of shares of Common Stock or other securities or property in a name
other than that of the holder of the shares of Series A Preferred Stock to be
converted or redeemed, and no such issue or delivery shall be made unless and
until the person requesting such issue or delivery has paid to the Corporation
the amount of any such tax or established, to the reasonable satisfaction of the
Corporation, that such tax has been paid.
Section 8. Ranking. Any class or series of capital stock of the
Corporation shall be deemed to rank:
(a) prior or senior to the Series A Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Series A Preferred Stock;
(b) on a parity with the Series A Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof be different from
those of the Series A Preferred Stock, if the holders of such class of stock or
series and the Series A Preferred Stock shall be entitled to the receipt of
dividends and of amounts distributable upon liquidation, dissolution or winding
up in proportion to their respective amounts of accrued and unpaid dividends per
share or liquidation preferences, without preference or priority one over the
other ("Parity Stock"); and
(c) junior to the Series A Preferred Stock, as to the payment
of dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, if such stock or series shall be Common Stock or if the holder of
Series A Preferred Stock shall be entitled to receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of shares of such class or series
("Junior Stock").
Section 9. Voting.
(a) If and whenever six (6) quarterly dividends (whether or
not consecutive) payable on the Series A Preferred Stock or any series or class
of Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting the
Board of Directors shall be increased by two (2) (if not already increased by
reason of a similar arrearage with respect to any Parity Stock) and the holders
of shares of Series A Preferred Stock, together with the holders of shares of
every other series of Parity Stock (any other such series, the "Voting Preferred
Stock"), voting as a single class regardless of series, shall be entitled to
elect the two (2) additional directors to serve on the Board of Directors at any
annual meeting of stockholders or special meeting held in place thereof, or at a
special meeting of the holders
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of the Series A Preferred Stock and the Voting Preferred Stock called as
hereinafter provided. Whenever all arrears in dividends on the Series A
Preferred Stock and the Voting Preferred Stock then outstanding shall have been
paid and dividends thereon for the current quarterly dividend period shall have
been paid or declared and set apart for payment, then the right of the holders
of the Series A Preferred Stock and the Voting Preferred Stock to elect such
additional two (2) directors shall cease (but subject always to the same
provision of the vesting of such voting rights in the case of any similar future
arrearages in six (6) quarterly dividends), and the terms of office of all
persons elected as directors by the holders of the Series A Preferred Stock and
the Voting Preferred Stock shall forthwith terminate and the number of the Board
of Directors shall be reduced accordingly. At any time after such voting power
shall have been so vested in the holders of Series A Preferred Stock and the
Voting Preferred Stock, the Secretary of the Corporation may, and upon the
written request of any holder of Series A Preferred Stock (addressed to the
Secretary at the principal office of the Corporation) shall, call a special
meeting of the holders of the Series A Preferred Stock and of the Voting
Preferred Stock for the election of the two (2) directors to be elected by them
as herein provided, such call to be made by notice similar to that provided in
the Bylaws of the Corporation for a special meeting of the stockholders or as
required by law. If any such special meeting required to be called as above
provided, shall not be called by the Secretary within twenty (20) days after
receipt of any such request, then any holder of Series A Preferred Stock may
call such meeting, upon the notice above provided, and for that purpose shall
have access to the stock books of the Corporation. The directors elected at any
such special meeting shall hold office until the next annual meeting of the
stockholders or special meeting held in lieu thereof if such office shall not
have previously terminated as above provided. If any vacancy shall occur among
the directors elected by the holders of the Series A Preferred Stock and the
Voting Preferred Stock, a successor shall be elected by the Board of Directors,
upon the nomination of the then remaining director elected by the holders of the
Series A Preferred Stock and the Voting Preferred Stock or the successor of such
remaining director, to serve until the next annual meeting of the stockholders
or special meeting held in place thereof if such office shall not have
previously terminated as above provided.
(b) So long as any shares of Series A Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
by law or by the Articles of Incorporation, as amended, the affirmative vote of
at least 66 2/3% of the votes entitled to be cast by the holders of the Series A
Preferred Stock and the Voting Preferred Stock, at the time outstanding, acting
as a single class regardless of series, given in person or by proxy, either in
writing without a meeting or by vote at any meeting called for the purpose,
shall be necessary for effecting or validating:
(i) Any amendment, alteration or repeal of any of the
provisions of this amendment to the Articles of Incorporation, the
Articles of Incorporation or the Bylaws of the Corporation that
materially and adversely affects the voting powers, rights or
preferences of the holders of the Series A Preferred Stock or the
Voting Preferred Stock; provided, however, that the amendment of the
provisions of the Articles of Incorporation so as to authorize or
create, or to increase the authorized amount of, any Junior Stock or
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any shares of any class ranking on a parity with the Series A Preferred
Stock or the Voting Preferred Stock shall not be deemed to materially
adversely affect the voting powers, rights or preferences of the
holders of Series A Preferred Stock, and provided further, that if any
such amendment, alteration or repeal would materially adversely affect
any voting powers, rights or preferences of the Series A Preferred
Stock or another series of Voting Preferred Stock that are not enjoyed
by some or all of the other series which otherwise would be entitled to
vote in accordance herewith, the affirmative vote of at least 66 2/3%
of the votes entitled to be cast by the holders of all series similarly
affected, similarly given, shall be required in lieu of the affirmative
vote of at least 66 2/3% of the votes entitled to be cast by the
holders of the shares of Series A Preferred Stock and the Voting
Preferred Stock which otherwise would be entitled to vote in accordance
herewith; or
(ii) The authorization or creation of, or the
increase in the authorized amount of, any shares of any class or any
security convertible into shares of any class ranking prior or senior
to the Series A Preferred Stock in the distribution of assets on any
liquidation, dissolution or winding up of the Corporation or in the
payment of dividends;
provided, however, that no such vote of the holders of Series A Preferred Stock
shall be required if, at or prior to the time when such amendment, alteration or
repeal is to take effect, or when the issuance of any such prior shares or
convertible security is to be made, as the case may be, provision is made for
the redemption of all shares of Series A Preferred Stock at the time
outstanding.
For purposes of the foregoing provisions of this Section 9,
each share of Series A Preferred Stock shall have one (1) vote per share, except
that when any other series of preferred stock shall have the right to vote with
the Series A Preferred Stock as a single class on any matter, then the Series A
Preferred Stock and such other series shall have with respect to such matters
one (1) vote per Twenty-Five Dollars ($25.00) of stated liquidation preferences.
Except as otherwise required by applicable law or as set forth herein, the
Series A Preferred Stock shall not have any relative participating, optional or
other special voting rights and powers other than as set forth herein, and the
consent of the holders thereof shall not be required for the taking of any
corporate action.
Section 10. Record Holders. The Corporation and the Transfer Agent may
deem and treat the record holder of any share of Series A Preferred Stock as the
true and lawful owner thereof for all purposes, and neither the Corporation nor
the Transfer Agent shall be affected by any notice to the contrary.
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Signature Block on Following Page
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IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be signed in its name and on its behalf by its President and
Chief Executive Officer and attested to by its Secretary on this ____ day of
November, 1997 and its said President and Chief Executive Officer acknowledges
under the penalties of perjury that these Articles Supplementary are the
corporate act of said Corporation and that to the best of his knowledge,
information and belief, the matters and facts set forth herein are true in all
material respects.
U.S. RESTAURANT PROPERTIES, INC.
By:
--------------------------------
Name: Robert J. Stetson
Title: President and Chief
Executive Officer
Attest:
----------------------------
Name: Fred H. Margolin
Title: Secretary
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