UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D/A
(Amendment No. 4)
Under the Securities Exchange Act of 1934
NTL Incorporated
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(Name of Issuer)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
629407107 (Common Stock)
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(CUSIP Number)
France Telecom S.A. Compagnie Generale des Communications
Jean-Louis Vinciguerra (COGECOM) S.A.
Senior Executive Vice President Pierre Hilaire
6 place d'Alleray Chairman of the Board of Directors
75505 Paris Cedex 15 6 place d'Alleray
France 75505 Paris Cedex 15
(33-1) 44-44-01-59 France
(33-1) 44-44-18-62
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
Copy to:
Alfred J. Ross, Jr.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telephone: (212) 848-4000
March 28, 2000
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(Date of Event which requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934
("Act") or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
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CUSIP No. 629407107
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1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
France Telecom S.A.
IRS Identification Number: N/A
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2. Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [ ]
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3. SEC Use Only
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4. Source of Funds (See Instructions)
WC
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e) [ ]
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6. Citizenship or Place of Organization
France
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7. Sole Voting Power
0
- ---------- Number of Shares --------------------------------------------------
Beneficially Owned
8. By Shared Voting Power
Each 20,264,081 shares of Common Stock
- ---------- Reporting Person --------------------------------------------------
9. With Sole Dispositive Power
0
- ---------- --------------------------------------------------
10. Shared Dispositve Power
20,264,081 shares of Common Stock
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
20,264,081 shares of Common Stock
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
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13. Percent of Class Represented by Amount in Row (11)
13.17% of the aggregate number of all outstanding shares of Common
Stock
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14. Type of Reporting Person (See Instructions)
CO
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CUSIP No. 629407107
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1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Compagnie Generale des Communications (COGECOM) S.A.
IRS Identification Number: N/A
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2. Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [ ]
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3. SEC Use Only
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4. Source of Funds (See Instructions)
WC
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e) [ ]
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6. Citizen or Place of Organization
France
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7. Sole Voting Power
0
- ---------- Number of Shares --------------------------------------------------
Beneficially Owned
8. By Shared Voting Power
Each 20,264,081 shares of Common Stock
- ---------- Reporting Person --------------------------------------------------
9. With Sole Dispositive Power
0
- ---------- --------------------------------------------------
10. Shared Dispositve Power
20,264,081 shares of Common Stock
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
20,264,081 shares of Common Stock
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
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13. Percent of Class Represented by Amount in Row (11)
13.17% of the aggregate number of all outstanding shares of Common
Stock
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14. Type of Reporting Person (See Instructions)
CO
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This Amendment No. 4 (the "Amendment") amends and supplements
the Schedule 13D filed on August 25, 1999, and previously amended and
supplemented by Amendment No. 1 on October 26, 1999, Amendment No.2 on January
31, 2000, and Amendment No. 3 on February 22, 2000 (as amended and supplemented,
the "Schedule 13D"), of France Telecom, a societe anonyme organized under the
laws of France ("FT") and Compagnie Generale des Communications (COGECOM), a
societe anonyme organized under the laws of France and a wholly owned subsidiary
of FT ("COGECOM"), with respect to the common stock, par value $0.01 per share
(the "Common Stock"), of NTL Incorporated, a Delaware corporation with its
principal executive offices at 110 East 59th Street, New York, NY 10022 (the
"Issuer"). All capitalized terms used in this Amendment that are not otherwise
defined herein have the meanings ascribed to such terms in the Schedule 13D.
FT and COGECOM are filing this Amendment to reflect (i)
completion on March 28, 2000 of the purchase of 750,000 shares of Series A 5%
Cumulative Preferred Stock by COGECOM pursuant to the Preferred Stock Purchase
Agreement and (ii) the issuance by the Issuer to COGECOM of 9,555.47 shares of
5% Cumulative Participating Convertible Preferred Stock, Series E (the "Series E
Preferred Stock") as a dividend on the Series A Preferred Stock beneficially
owned by FT and COGECOM.
Item 1. Security and Issuer
Item 1 is hereby amended by adding the following paragraphs:
On March 28, 2000, COGECOM purchased 750,000 shares of Series
A 5% Cumulative Preferred Stock pursuant to the Preferred Stock Purchase
Agreement.
On March 31, 2000, the Issuer issued to COGECOM 9,555.47
shares of Series E Preferred Stock as a dividend with respect to the Series A
Preferred Stock beneficially owned by FT and COGECOM. Each share of Series E
Preferred Stock is convertible into 12.112506 shares of Common Stock, at any
time at the option of the holder thereof.
Item 2. Identity and Background
No change
Item 3. Source and Amount of Funds or Other Consideration
FT has provided the funds for the purchase by COGECOM of the
shares of Series A 5% Cumulative Preferred Stock pursuant to the Preferred Stock
Purchase Agreement from cash on hand.
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Item 4. Purpose of Transaction
Item 4 is hereby amended by adding the following paragraph:
FT assigned to COGECOM its right to acquire 750,000 Series A
5% Cumulative Preferred Stock under the Preferred Stock Purchase Agreement. On
March 28, 2000, COGECOM purchased 750,000 shares of Series A 5% Cumulative
Preferred Stock pursuant to the Preferred Stock Purchase Agreement. On the same
day, the Banks acquired their respective portions of the Series A 5% Cumulative
Preferred Stock under the Preferred Stock Purchase Agreement.
Item 5. Interest in Securities of the Issuer
Item 5 is hereby amended and restated as follows:
(a) On March 31, 2000, FT and COGECOM were the joint
beneficial owners of 20,264,081 shares of Common Stock (assuming conversion of
the Series A Preferred Stock, the Series C Preferred Stock, the Series D
Preferred Stock, the Series E Preferred Stock and the 5 3/4% Convertible Notes),
which represents approximately 13.17% of the Common Stock outstanding. This
percentage is calculated on the basis of 153,914,497 shares, a sum of (i)
142,101,439 shares of Common Stock outstanding as of March 31, 2000, a figure
that the Issuer has provided to FT and COGECOM, (ii) 11,697,318 shares of Common
Stock, the number of shares issuable to FT and COGECOM upon conversion of the
Series A Preferred Stock, the Series C Preferred Stock, the Series D Preferred
Stock and the 5 3/4% Convertible Notes, and (iii) 115,740 shares of Common
Stock, the number of shares of Common Stock issuable to COGECOM upon conversion
of the Series E Preferred Stock.
(b) FT and COGECOM share the power to vote and the power to
dispose of all such 20,264,081 shares of Common Stock.
(c) On March 31, 2000, the Issuer paid a dividend on the
Series A Preferred Stock to COGECOM. The Issuer paid this dividend by issuing
9,555.47 shares of Series E Preferred Stock to COGECOM. Each such share of
Series E Preferred Stock is convertible into 12.112506 shares of Common Stock. A
copy of the certificate of designation for the Series E Preferred Stock is
attached hereto as Exhibit 10.9 and incorporated by reference herein.
Except as described above, neither FT nor COGECOM, nor, to the
best of their knowledge, any of the persons listed in Schedules I and II to the
Schedule 13D, effected any transactions in Common Stock, Series A Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred
Stock or 5 3/4% Convertible Notes during the past sixty (60) days. On March 28,
2000, COGECOM purchased 750,000 shares of Series A 5% Cumulative Preferred Stock
pursuant to the Preferred Stock Purchase Agreement. The Series A 5% Cumulative
Preferred Stock is not convertible into Common Stock within sixty days from the
date hereof.
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(d) No one other than FT or COGECOM is known to have the right
to receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of Common Stock, Series A Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock, Series E Preferred Stock, 5 3/4% Convertible
Notes or Series A 5% Cumulative Preferred Stock beneficially owned by FT and
COGECOM.
Item 6. Contracts, Arrangements, Understanding of Relationships with
Respect to Securities of the Issuer
Item 6 is hereby amended by incorporating by reference in
their entirety the paragraph set forth in item 4 above.
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Item 7. Material to be Filed as Exhibits
Item 7 is hereby amended to include the following exhibits,
attached hereto:
Exhibit 10.8
Exhibit 10.7 is hereby replaced in its entirety by the following item attached
hereto as Exhibit 10.8:
Form of Certificate of Designation of the Voting Powers,
Designation, Preferences and Relative, Participating, Optional or other Special
Rights and Qualifications, Limitations and Restrictions of the 5% Cumulative
Preferred Stock, Series A of the Issuer.
Exhibit 10.9
Form of Certificate of Designation of the Voting Powers,
Designation, Preferences and Relative, Participating, Optional or other special
Rights and Qualifications, Limitations and Restrictions of the 5% Cumulative
Participating Convertible Preferred Stock, Series E of the Issuer.
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After due inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: April 7, 2000
France Telecom S.A.
By: /s/ Jean-Louis Vinciguerra
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Name: Jean-Louis Vinciguerra
Title: Senior Executive Vice President
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After due inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: April 7, 2000
Compagnie Generale des
Communications
(COGECOM) S.A.
By: /s/ Pierre Hilaire
----------------------------------
Name: Pierre Hilaire
Title: Chairman of the Board of
Directors
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Exhibit 10.8
CERTIFICATE OF DESIGNATION
OF THE VOTING POWERS, DESIGNATION,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF THE
5% CUMULATIVE PREFERRED STOCK, SERIES A, OF
NTL INCORPORATED
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PURSUANT TO SECTION 151(g) OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
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The undersigned, Executive Vice President, General Counsel and
Secretary of NTL Incorporated, a Delaware corporation (the "Corporation"),
HEREBY CERTIFIES that the Board of Directors, in accordance with Article FOURTH,
Section B of the Corporation's Restated Certificate of Incorporation and Section
151(g) of the Delaware General Corporation Law (the "DGCL"), has authorized the
creation of the series of Preferred Stock hereinafter provided for and has
established the dividend, redemption and voting rights thereof and has adopted
the following resolution, creating the following new series of the Corporation's
Preferred Stock:
"BE IT RESOLVED that, pursuant to authority expressly granted
to the Board of Directors by the provisions of Article FOURTH, Section B of the
Restated Certificate of Incorporation of the Corporation and Section 151(g) of
the DGCL, there is hereby created and authorized the issuance of a new series of
the Corporation's Preferred Stock, par value $0.01 per share ("Preferred
Stock"), with the following powers, designations, dividend rights, voting
powers, rights on liquidation, redemption rights and other preferences and
relative, participating, optional or other special rights and with the
qualifications, limitations or restrictions on the shares of such series (in
addition to the powers, designations, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereof set forth in the Restated Certificate of Incorporation that
are applicable to each series of Preferred Stock) hereinafter set forth.
<PAGE>
(1) Number and Designation. 1,850,000 shares of the Preferred Stock of
the Corporation shall be designated as 5% Cumulative Preferred Stock, Series A
(the "5% Preferred Stock"), and no other shares of Preferred Stock shall be
designated as 5% Preferred Stock.
(2) Definitions. For purposes of the 5% Preferred Stock, the following
terms shall have the meanings indicated:
"Bankruptcy Event" shall mean any of the following: (i) a court having
jurisdiction in the premises enters a decree or order for (A) relief in respect
of any Major Entity in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereinafter in effect, (B) appointment of
a receiver, liquida tor, assignee, custodian, trustee, sequestrator or similar
official of any Major Entity or for all or substantially all of the property and
assets of any Major Entity or (C) the winding up or liquidation of the affairs
of any Major Entity; or (ii) any Major Entity (A) commences a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (B) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of any Major Entity, or for all or
substantially all of the property and assets of any Major Entity or (C) effects
any general assignment for the benefit of creditors.
"Board of Directors" shall mean the board of directors of the
Corporation. "Board of Directors" shall also mean the Executive Committee, if
any, of such board of directors or any other committee duly authorized by such
board of directors to perform any of its responsibilities with respect to the 5%
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.
"Common Stock" shall mean the Corporation's Common Stock, par value
$0.01 per share.
"Constituent Person" shall have the meaning set forth in paragraph
(9)(e) hereof.
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"Conversion Rate" shall have the meaning set forth in paragraph (9)(a)
hereof.
"Corporation" shall have the meaning set forth in the preamble.
"Current Market Price" of publicly traded shares of Common Stock or
any other class of capital stock or other security of the Corporation or any
other issuer for any day shall mean the last reported sale price for such
security on the principal exchange or quotation system on which such security is
listed or traded. If the security is not admitted for trading on any national
securities exchange or the Nasdaq National Market, "Current Market Price" shall
mean the average of the last reported closing bid and asked prices reported by
the Nasdaq as furnished by any member in good standing of the National
Association of Securities Dealers, Inc., selected from time to time by the
Corporation for that purpose or as quoted by the National Quotation Bureau
Incorporated. In the event that no such quotation is available for such day, the
Current Market Price shall be the average of the quotations for the last five
Trading Days for which a quotation is available within the last 30 Trading Days
prior to such day. In the event that five such quotations are not available
within such 30-Trading Day period, the Board of Directors shall be entitled to
determine the Current Market Price on the basis of such quotations as it
reasonably considers appropriate.
"Determination Date" shall have the meaning set forth in paragraph
(9)(a) hereof.
"Dividend Payment Date" shall mean the applicable redemption date of
the 5% Preferred Stock as set forth in paragraph 6(a).
"Dividend Periods" shall mean quarterly dividend periods commencing on
March 31, June 30, September 30 and December 31 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend Period
(except that the initial Dividend Period shall commence on the Issue Date and
the final Dividend Period shall end on but exclude the Dividend Payment Date.
"Eurotel" shall mean an entity which is or will be a direct or
indirect, wholly-owned subsidiary of the Corporation, which entity owns all of
the outstanding capital stock of entities that are primarily engaged in the
broadband communications, broadcasting and cable television business in
Continental Europe (outside of France).
"Eurotel Stock" shall mean capital stock of Eurotel with the greatest
voting power and the power to control or direct the management of Eurotel of the
type and class held, directly or through any of its subsidiaries, by the
Corporation.
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"Exchange Act"" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulation thereunder.
"Exchange Date" shall have the meaning set forth in paragraph (9)(a)
hereof.
"Expiration Time" shall have the meaning set forth in paragraph
(9)(d)(v) hereof.
"5% Preferred Stock" shall have the meaning set forth in paragraph (1)
hereof.
"5% Convertible Preferred" shall have the meaning set forth in
paragraph (3)(d) hereof.
"5% Convertible Series A" shall have the meaning set forth in
paragraph (3)(d) hereof.
"5% Convertible Series B" shall have the meaning set forth in
paragraph (3)(d) hereof.
"GAAP" shall mean United States generally accepted accounting
principles and practices as in effect from time to time and applied consistently
throughout the periods involved.
"Holdco" shall have the meaning set forth in paragraph (11) hereof.
"Issue Date" shall mean the date on which shares of 5% Preferred Stock
are first issued.
"Investment Agreement" means the agreement, dated July 26, 1999,
between France Telecom and the Corporation.
"Junior Securities" shall have the meaning set forth in paragraph
(3)(c) hereof.
"Junior Securities Distribution" shall have the meaning set forth in
paragraph (4)(e) hereof.
"Liquidation Right" shall mean, for each share of 5% Preferred Stock,
an amount equal to US$1,000 per share, plus an amount equal to all dividends
(whether
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or not earned or declared) accrued and unpaid thereon to the date of
final distribution to such holders.
"Major Entity" shall mean any of the Corporation, NTL Communications
Corp., Diamond Cable Communications Limited, Diamond Holdings Limited, NTL
(Triangle) LLC or any Significant Subsidiary.
"Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
securities market regulated by the National Association of Securities Dealers,
Inc.
"Nasdaq National Market" shall have the meaning set forth in Rule
4200(a)(23) of the rules of the National Association of Securities Dealers, Inc.
"9.9% Series B Preferred" shall have the meaning set forth in
paragraph (3)(d) hereof.
"NYSE" means the New York Stock Exchange.
"outstanding", when used with reference to shares of stock, shall mean
issued shares, excluding shares held by the Corporation or a subsidiary.
"Parity Securities" shall have the meaning set forth in paragraph
(3)(b) hereof.
"Person" shall mean any individual, partnership, association, joint
venture, corporation, business, trust, joint stock company, limited liability
company, any unincorporated organization, any other entity, a "group" of such
persons, as that term is defined in Rule 13d-5(b) under the Exchange Act, or a
government or political subdivision thereof.
"Preferred Stock" shall have the meaning set forth in the first
resolution above.
"Purchase Agreement" shall mean the Purchase Agreement, dated February
17, 2000, among the Corporation and certain parties identified therein with
respect to the 5% Preferred Stock.
"Purchase Shares" shall have the meaning set forth in (9)(d)(v)
hereof.
"Qualified Holder" shall mean any holder other than a commercial bank
or an affiliate of a commercial bank.
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"Record Date" shall have the meaning set forth in paragraph (9)(d)(iv)
hereof.
"Redemption Date" shall have the meaning set forth in paragraph (6)(a)
hereof.
"Redemption Obligation" shall have the meaning set forth in paragraph
(6)(b) hereof.
"Redemption Price" shall have the meaning set forth in paragraph
(6)(a) hereof.
"Senior Securities" shall have the meaning set forth in paragraph
(3)(a) 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 Securities or any class or series of Parity Securities 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 5%
Preferred Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent, as the
case may be.
"Significant Subsidiary" shall have the meaning given to such term in
Regulation S-X under the Exchange Act.
"13% Preferred" shall have the meaning set forth in paragraph (3)(d)
hereof.
"Trading Day" shall mean any day on which the securities in question
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 not listed or admitted for trading on
any national securities exchange, on the Nasdaq National Market, or if such
securities are not quoted thereon, in the applicable securities market in which
the securities are traded.
"Transaction" shall have the meaning set forth in paragraph (9)(e)
hereof.
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"25-Day Average Market Price" shall mean, for any security, the
volume- weighted average of the Current Market Prices of that security for the
twenty-five Trading Days immediately preceding the date of determination.
(3) Rank. Any class or series of stock of the Corporation shall be
deemed to rank:
(a) prior to the 5% Preferred Stock, either as to the payment
of dividends or as to distribution of assets upon liquidation, dissolution or
winding up, or both, if the holders of such class or series shall be entitled by
the terms thereof to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, in preference or priority to the holders
of 5% Preferred Stock ("Senior Securities");
(b) on a parity with the 5% Preferred Stock, either as to the
payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and
(c) junior to the 5% Preferred Stock, either as to the payment
of dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, or both, if such stock or series shall be Common Stock or if the
holders of the 5% Preferred Stock shall be entitled to receipt of dividends, and
of amounts distributable upon liquidation, dissolution or winding up, in
preference or priority to the holders of shares of such stock or series ("Junior
Securities").
(d) Each of the 13% Senior Redeemable Exchangeable Preferred
Stock and the 13% Series B Senior Redeemable Exchangeable Preferred Stock
(collectively, the "13% Preferred") is a Senior Security. Each of the 5%
Cumulative Participating Convertible Preferred Stock, Series A (the "5%
Convertible Series A") and any dividends paid on the 5% Convertible Series A in
accordance with its terms, to the extent that such dividends are paid in
preferred stock having terms substan tially identical to the 5% Convertible
Series A and any dividends paid on preferred stock issued as in-kind dividends
thereon, to the extent such dividends are paid in
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preferred stock having terms substantially identical to the 5% Convertible
Series A (the 5% Convertible Series A and all such in-kind dividends being
hereinafter referred to as the "5% Convertible Preferred"), is a Parity
Security. Each of the 9.9% Non-Voting Mandatorily Redeemable Preferred Stock,
Series B ("9.9% Series B Preferred") and the Series A Junior Participating
Preferred Stock is a Junior Security. Except for the Preferred Stock proposed to
be issued under the terms of the Invest ment Agreement (and collectively with
any dividends paid thereon in preferred stock, the "5% Convertible Series B"),
each of which would be a Parity Security, there shall be no issue of other
Senior Securities, Parity Securities or rights or options exercisable for or
convertible into any such securities, except as approved by the holders of the
5% Preferred Stock, or as otherwise permitted, pursuant to para graph 9(c).
(e) The respective definitions of Senior Securities, Junior
Securi ties and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.
(4) Dividends. (a) The holders of shares of 5% Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors, out
of funds legally available for the payment of dividends (after taking into
account revaluation of the assets and liabilities of the Corporation to the
extent deemed reasonable by the Board of Directors of the Corporation after
consultation with legal and financial advisors) but without regard to any
contractual or other restrictions with respect thereto, dividends at the
quarterly rate of US$12.50 per share (assuming a US$1,000 face amount) payable
in additional shares of the 5% Preferred Stock. All dividends on the 5%
Preferred Stock shall be payable in arrears on the Dividend Payment Date and
shall be cumulative from the Issue Date (except that dividends on additional
shares of the 5% Preferred Stock issued as dividends on 5% Preferred Stock shall
accrue from the date such additional shares of 5% Preferred Stock are issued or
would have been issued in accordance with this Certificate of Designation if
such dividends had been declared), whether or not in any Dividend Period or
Dividend Periods there shall be funds of the Corporation legally available for
the payment of such dividends. The total accumulative dividends for all Dividend
Periods terminat ing on or prior to the applicable redemption date shall be
payable to the holders of record of shares of the 5% Preferred Stock, as they
appear on the stock records of the Corporation at the close of business on the
record date for such dividend. Upon receipt by the Company of notice from the
holders of the 5% Preferred Stock that they have elected to require the Company
to discharge its Redemption Obligation, the Board of Directors shall fix as such
record date the fifth Business Day preceding
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the Dividend Payment Date and shall give notice on or prior to the record date
of the number of additional shares of 5% Preferred Stock payable in respect of
the divi dends accrued up to but excluding the Dividend Payment Date.
(b) For the purpose of determining the number of additional
shares of 5% Preferred Stock to be issued as dividends pursuant to paragraph
(4)(a), each such share of additional 5% Preferred Stock shall be valued at
US$1,000. Holders of such additional shares of 5% Preferred Stock shall be
entitled to receive dividends payable at the rates specified in paragraph
(4)(a).
(c) The dividends payable for the initial Dividend Period, or
any other period shorter than a full Dividend Period, on the 5% Preferred Stock
shall accrue daily and be computed on the basis of a 360-day year and the actual
number of days in such period. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the 5%
Preferred Stock that may be in arrears except as otherwise provided herein.
(d) So long as any shares of the 5% Preferred Stock are
outstand ing, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on Parity Securities or
Junior Securities, for any period, nor shall any Parity Securities or Junior
Securities be redeemed, pur chased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock for
all Dividend Periods terminating on or prior to the date of such redemption,
repur chase or other acquisition shall have been paid or set apart for payment
(together with any payments that may be required under paragraph (12)(c)), (ii)
sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the 5% Preferred Stock
and (iii) the Corporation is not in default with respect to any redemption of
shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below.
When dividends are not fully paid in additional shares of 5% Preferred Stock or
a sum sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon shares of the 5% Preferred Stock and all dividends declared upon
Parity Securities shall be declared ratably in propor tion to the respective
amounts of dividends accumulated and unpaid on the 5% Preferred Stock and
accumulated and unpaid on such Parity Securities.
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(e) So long as any shares of the 5% Preferred Stock are
outstand ing, no dividends (other than (i) any rights issued pursuant to the
Rights Agreement and (ii) dividends or distributions paid in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Junior
Securities) shall be declared or paid or set apart for payment or other
distribution declared or made upon Junior Securities, nor shall any Junior
Securities be redeemed, purchased or otherwise acquired (other than a
redemption, purchase, or other acquisition of shares of Common Stock made for
purposes of an employee incentive or benefit plan of the Corporation or any
subsid iary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") 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) by the Corporation, directly or
indirectly (except by conversion into or exchange for Junior Securities,
including pursuant to paragraph 4(d) of the 9.9% Series B Preferred), unless in
each case (A) full cumulative dividends on all out standing shares of the 5%
Preferred Stock and all other Parity Securities shall have been paid or set
apart for payment for all past Dividend Periods and dividend periods for such
other stock, (B) sufficient funds shall have been paid or set apart for the
payment of the dividend for the current Dividend Period with respect to the 5%
Preferred Stock and all other Parity Securities, (C) the Corporation is not in
default with respect to any redemption of shares of 5% Preferred Stock by the
Corporation pursuant to paragraph (6) below and (D) the Corporation has fully
performed its obligations under paragraphs (4)(a) and (6) hereof.
(f) Notwithstanding the provisions of Section 6(b) of the
Purchase Agreement, all payments by the Corporation of dividends on 5% Preferred
Stock to a holder thereof that is not a Qualified Holder (a "Non-Qualified
Holder") will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by the United States
of America or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax imposed on or measured by the net income or
net profits of a Non-Qualified Holder pursuant to the laws of the jurisdiction
in which it is organized or the jurisdiction in which the principal office or
applicable lending office of such Non-Qualified Holder is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect to such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the Corporation
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due
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under the 5% Preferred Stock, after withholding or deduction for or on account
of any Taxes, will not be less than the amount provided for herein or in such 5%
Preferred Stock . If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Corporation agrees to reimburse each Non-Qualified
Holder, upon the written request of such Non-Qualified Holder, for taxes imposed
on or measured by the net income or net profits of such Non-Qualified Holder
pursuant to the laws of the jurisdiction in which such Non-Qualified Holder is
organized or in which the principal office or applicable lending office of such
Non-Qualified Holder is located or under the laws of any political subdivision
or taxing authority of any such jurisdiction in which such Non-Qualified Holder
is organized or in which the principal office or applicable lending office of
such Non-Qualified Holder is located and for any withholding of taxes as such
Non-Qualified Holder shall determine are payable by, or withheld from, such
Non-Qualified Holder, in respect of such amounts so paid to or on behalf of such
Non-Qualified Holder pursuant to the preceding sentence and in respect of any
amounts paid to or on behalf of such Non-Qualified Holder pursuant to this
sentence. The Corporation will furnish to each Non-Quali fied Holder within 45
days after the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by the Corporation. The
Corporation agrees to indemnify and hold harmless each Non- Qualified Holder,
and reimburse such Non-Qualified Holder upon its written request, for the amount
of any Taxes so levied or imposed and paid by such Non-Qualified Holder.
(5) Liquidation Preference. (a) In the event of any liquidation,
dissolu tion 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
Securities, the holders of the shares of 5% Preferred Stock shall be entitled to
receive the Liquidation Right. If, upon any liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of the shares of 5% Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any Parity Securities, then such assets, or the proceeds thereof,
shall be distributed among the holders of shares of 5% Preferred Stock and any
such other Parity Securities ratably in accordance with the respective amounts
that would be payable on such shares of 5% Preferred Stock and any such other
stock if all amounts payable thereon were paid in full. For the purposes of this
paragraph (5), (i) a consolidation or merger of the Corporation with one or more
corporations, or (ii) a sale or transfer of all or substantially all of the
Corporation's assets, shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Corporation.
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<PAGE>
(b) Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph (5), any other series or class or classes
of Junior Securities shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the 5% Preferred Stock shall not be
entitled to share therein.
(6) Redemption. (a) On and after the date that is the second
anniversary of the Issue Date (the "Redemption Date"), each holder of shares of
5% Preferred Stock that is a Qualified Holder shall have the right to require
the Corporation, to the extent the Corporation shall have funds legally
available therefor (after taking into account revaluation of the assets and
liabilities of the Corporation to the extent deemed reasonable by the Board of
Directors of the Corporation after consultation with legal and financial
advisors) but without regard to any contractual or other restrictions with
respect thereto, to redeem all or some of such Qualified Holder's shares of 5%
Preferred Stock, from time to time in part, or in whole, at US$1,000 per share
(the "Redemption Price"), payable in cash, together with accrued and unpaid
dividends thereon to, but excluding, the date fixed for redemption, without
interest. Any holder of shares of 5% Preferred Stock that is a Qualified Holder
which elects to exercise its rights pursuant to this paragraph (6)(a) shall
deliver to the Corporation a written notice of election not less than 20 days
prior to the date on which such Qualified Holder demands redemption pursuant to
this paragraph (6)(a), which notice shall set forth the name of the Qualified
Holder, the number of shares of 5% Pre ferred Stock to be redeemed and a
statement that the election to exercise a redemp tion right is being made
thereby, and shall deliver to the Corporation on or before the date of
redemption certificates evidencing the shares of 5% Preferred Stock to be
redeemed, duly endorsed for transfer to the Corporation.
(b) If the Corporation is unable to redeem all outstanding
shares of 5% Preferred Stock requested by any holder of 5% Preferred Stock to be
redeemed pursuant to paragraph (6)(a) (the "Redemption Obligation") because the
Corporation does not have funds legally available therefor, the Redemption
Obligation shall be discharged as soon as the Corporation has funds legally
available to discharge such Redemption Obligation and its obligations under
paragraph (12)(c). So long as the Corporation fails to discharge the Redemption
Obligation for any reason, dividends shall continue to accrue on the Redemption
Price in accordance with paragraph (4) in addition to dividends that accrue
pursuant to paragraph (12)(c). If and so long as any Redemption Obligation with
respect to the 5% Preferred Stock shall not be fully
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<PAGE>
discharged, the Corporation shall not (i) directly or indirectly, redeem,
purchase, or otherwise acquire any Parity Security or discharge any mandatory or
optional redemption, sinking fund or other similar obligation in respect of any
Parity Securi ties (except in connection with a redemption, sinking fund or
other similar obligation to be satisfied pro rata with the 5% Preferred Stock)
or (ii) declare or make any Junior Securities Distribution (other than dividends
or distributions paid in shares of, or options, warrants or rights to subscribe
for or purchase shares of, Junior Securi ties), or, directly or indirectly,
discharge any mandatory or optional redemption, sinking fund or other similar
obligation in respect of the Junior Securities.
(c) On and after the date that is the earlier of (i) the
second anniversary of the Issue Date or (ii) the date an exchange is consummated
pursuant to paragraph (8)(a), the Corporation shall have the right to redeem
from any Qualified Holder, upon not less than five days' nor more than ten days'
notice of the redemption date, from time to time in part, or in whole, shares of
5% Preferred Stock, at the Redemption Price, payable in cash, together with
accrued and unpaid dividends thereon, including any dividend required under
paragraph (12)(c), to, but excluding, the date fixed for redemption, without
interest.
(d) Upon the redemption of 5% Preferred Stock, the Corporation
shall pay the Redemption Price, any accrued and unpaid dividends in arrears to,
but excluding, the Dividend Payment Date, and any other dividend required under
paragraph (12)(c).
(e) For purposes of paragraph (6)(a), unless full cumulative
dividends (whether or not declared) on all outstanding shares of 5% Preferred
Stock and any Parity Securities shall have been paid or contemporaneously are
declared and paid or set apart for payment for all Dividend Periods terminating
on or prior to the applicable redemption date and notice has been given in
accordance with paragraph (7), none of the shares of 5% Preferred Stock shall be
redeemed, and no sum shall be set aside for such redemption, unless shares of 5%
Preferred Stock are redeemed pro rata and notice has previously been given in
accordance with para graph (7).
(7) Procedure for Redemption. (a) When the Corporation is requested to
redeem shares of 5% Preferred Stock pursuant to paragraph (6), notice of the
request for such redemption shall be given by certified mail, return receipt
requested, postage prepaid, mailed not less than 20 days prior to the redemption
date, by each requesting holder to the Corporation at the following address and
confirmed by facsimile transmission:
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NTL Incorporated
110 East 59th Street
New York, New York 10022
Facsimile: (212) 906-8497
Each such notice shall state (i) the redemption date and (ii) if the
holder is requiring the Corporation to redeem fewer than all the shares of 5%
Preferred Stock held by such holder, the number of shares that the Corporation
is being required to redeem from such holder.
Within 10 days of receipt of any such notice from a holder of the 5%
Pre ferred Stock, the Corporation shall respond to each requesting holder with a
notice sent by certified mail, return receipt requested, postage prepaid, to
each requesting holder at such holder's address as the same appears on the stock
register of the Corporation and confirmed by facsimile transmission to each
requesting holder of record if the Corporation has been furnished with such
facsimile address by the holder(s); provided, however, that neither the failure
to give such notice nor confir mation 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. Each such notice shall (i) confirm the redemption date and the number
of shares of 5% Preferred Stock to be redeemed and, if fewer than all the shares
held by such holder are to be redeemed, the number of shares to be redeemed from
such holder and (ii) state (A) the amount payable, (B) the place or places where
certificates for such shares are to be surrendered or the notice should be sent
for payment of the redemption price, and (C) that dividends on the shares to be
redeemed will cease to accrue at and from such redemption date, except as
otherwise provided herein. Any notice that was mailed 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.
(b) If notice has been mailed by the Corporation in response
to any holder who has given the Corporation notice requesting redemption of any
of its shares of 5% Preferred Stock, as aforesaid, from and after the redemption
date (unless default shall be made by the Corporation in providing for the
payment of the redemption price of the shares called for redemption and
dividends accrued and unpaid thereon, if any), (i) except as otherwise provided
herein, dividends on the shares of 5% Preferred Stock so called for redemption
shall cease to accrue, (ii) said shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as holders of the 5%
Preferred Stock shall cease (except the right to receive from the Corporation
the Redemption Price without interest thereon, upon surrender
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and endorsement of the certificates for any shares so redeemed, and to receive
any dividends payable thereon, including any amounts payable pursuant to
paragraph (12)(c)).
(c) Upon surrender of the certificates for any shares so
redeemed (properly endorsed or assigned for transfer, if the Board of Directors
of the Corpora tion shall so require and the notice shall so state), such shares
shall be redeemed by the Corporation at the Redemption Price aforesaid, plus any
dividends payable thereon, including any amounts payable pursuant to paragraph
12(c). If fewer than all the outstanding shares of 5% Preferred Stock are to be
redeemed due to the restriction set forth in paragraph (6)(b), the number of
shares to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be selected pro rata (with any fractional shares
being rounded to the nearest whole share). In case fewer than all the shares
represented by any such certificate are redeemed, without cost to the holder
thereof either (i) a new certificate shall be issued represent ing the
non-surrendered shares, or (ii) at the option of the holder, the holder shall be
entitled to retain its existing certificates, which shall be deemed to represent
the number of shares of 5% Preferred Stock that have not been redeemed.
(8) Exchange. (a) Upon at least 30 days' written notice to the Corpora
tion, a Qualified Holder shall have the right, at such Qualified Holder's
option, to exchange all or any part of such shares of 5% Preferred Stock for
shares of Eurotel Stock (or to effect a constructive exchange in accordance with
paragraph (12)(d)) having a value (calculated pursuant to paragraph 8(c) below)
equal to the Redemp tion Price of the shares of 5% Preferred Stock with respect
to which the exchange right is being exercised, together with accrued and unpaid
dividends thereon to, but excluding, the date fixed for exchange, of such shares
of 5% Preferred Stock.
(b) Any exchange pursuant to paragraph 8(a) shall be subject
to the following requirements:
(i) The 5% Preferred Stock shall have been
outstanding for at least six months.
(ii) Consummation of the exchange will not cause the
Corporation, any subsidiary of the Corporation, or Eurotel to become in breach
or contravention of, or give rise to a right to terminate or otherwise cause a
loss of any material right under, any material agreement, contract, instrument
or obligation of or binding on such entity; and the Corporation covenants and
agrees not to enter into
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<PAGE>
any such agreement, contract or instrument or incur such obligation after the
date of issuance of the 5% Preferred Stock.
(iii) All necessary approvals of any governmental
competi tion or other regulatory bodies or authorities having jurisdiction over
the exchange or any matters arising as a result thereof shall have been
received, and the exchange will have no material negative effect on any material
governmental license, permit or authorization held by Eurotel or any subsidiary
of Eurotel; provided that after receipt of a notice from a Qualified Holder
under paragraph 8(a) the Corporation shall, subject to receiving in the case of
competition approvals full cooperation from the Qualified Holder, promptly take
all reasonable steps necessary to receive all such governmental competition and
regulatory approvals and to avoid any such material negative effect.
(iv) The maximum amount of Eurotel Stock that may be
acquired upon an exchange shall be 50% of the outstanding amount thereof. Any
shares of 5% Preferred Stock remaining outstanding after acquisition of the maxi
mum amount of Eurotel Stock shall be subject to redemption in accordance with
paragraph 6(a) hereof.
(c) The aggregate value at any time of the Eurotel Stock shall
equal the aggregate amount expended by the Corporation and its subsidiaries in
the acquisition of the entities that comprise Eurotel (less the aggregate amount
of debt, as reflected on the consolidated balance sheet of Eurotel prepared in
conformity with GAAP, which is incurred or assumed by Eurotel or any of its
subsidiaries or entities comprising Eurotel or its predecessors in connection
therewith (the "Acquisition Debt")), together with any amounts invested in
Eurotel or any of its subsidiaries (other than by Eurotel or its subsidiaries)
after such acquisition and prior to the exchange, reduced by any dividends,
distribution or transfers of any assets from Eurotel to any other Person
increasing at a rate of 5% per annum from the date of such acquisition or
investment to the date the value of Eurotel is being calculated. The value of
each share of Eurotel Stock shall be pro rata to the aggregate value of Eurotel.
(d) If at the time of any exchange of all of the 5% Preferred
Stock, the Eurotel Stock acquired as a result of such exchange does not
constitute 50% of the outstanding shares of Eurotel Stock, the Qualified Holder
shall have the right (subject to the conditions set forth in paragraph (b)
above) to acquire from the Corporation an additional amount of Eurotel Stock
(the "Additional Amount") such that the amount of Eurotel Stock held by such
Qualified Holder as a result of the
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exchange and the acquisition of the Additional Amount equals 50% of the outstand
ing shares of Eurotel Stock. The Additional Amount shall be acquired for cash at
the same per share value calculated pursuant to paragraph (c) above.
(e) If Eurotel shall issue to the Corporation any option,
warrant or right to acquire Eurotel Stock, or if the issued Eurotel Stock shall
be comprised of more than one class, the rights of the Qualified Holder under
this paragraph (8) shall be equitably adjusted so as to maintain the intent of
this paragraph (8) that the Qualified Holder may acquire 50% of the Eurotel
Stock from the Corporation at a value reflecting the provisions of paragraph
8(c).
(f) If any of the requirements set forth in paragraph (8)(b)
cannot be satisfied upon a Qualified Holder's exchange for Eurotel Stock under
paragraph 8(a) or acquisition of Eurotel Stock under paragraph 8(d) of 50% of
the outstanding amount of Eurotel Stock, as determined in good faith by such
Qualified Holder and the Corporation, the Qualified Holder shall have the right
to acquire, upon exchange under paragraph 8(a) of any part of the 5% Preferred
Stock held by the Qualified Holder or acquisition under paragraph 8(d), such
amount of Eurotel Stock as would allow the requirements set forth in paragraph
(8)(b) to be satisfied. If the Qualified Holder exercises the right described in
the previous sentence, it shall have the right (i) to exchange or acquire the
remaining amount of Eurotel Stock as soon as possible after the restrictions on
the exchange or acquisition of the entire amount of Eurotel Stock permitted
hereunder shall cease to exist or (ii) to require redemption of any amount of
Preferred Shares that such Qualified Holder shall hold after exercising its
rights under the first sentence of this paragraph (8)(f).
(g) 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 Eurotel Stock upon exchange of the 5% 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 Eurotel Stock in a name other than that of the holder of the 5%
Preferred Stock to be exchanged 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 satisfaction of
the Corporation, that such tax has been paid.
(9) Conversion. (a) Subject to and upon compliance with the provisions
of this paragraph (9), each holder of shares of 5% Preferred Stock which is a
Quali fied Holder shall have the right, at any time and from time to time after
the date which is six months from the consummation of an exchange pursuant to
paragraph
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(8)(a), at such holder's option, to convert any or all outstanding shares of 5%
Pre ferred Stock held by such holder, but not fractions of shares, into fully
paid and non-assessable shares of Common Stock by surrendering such shares to be
con verted, such surrender to be made in the manner provided in paragraph (9)(b)
hereof. The number of shares of Common Stock deliverable upon conversion of each
share of 5% Preferred Stock shall be equal to $1,000 divided by the 25-Day
Average Market Price as of the date the exchange is consummated (the "Exchange
Date"), as adjusted as provided herein, provided that such conversion rate (the
"Conversion Rate") shall not be less than the price that would cause an
adjustment pursuant to Schedule 25, Section 2(c) of the Restated Transaction
Agreement, dated July 26, 1999, by and among Bell Atlantic Corporation, Cable
and Wireless plc, Cable & Wireless Communications plc and the Corporation. The
Conversion Rate is subject to adjustment from time to time pursuant to paragraph
(9)(d) hereof. The right to convert shares called for redemption pursuant to
paragraph 6(c) shall terminate at the close of business on the date immediately
preceding the date fixed for such redemp tion unless the Corporation shall
default in making payment of the amount payable upon such redemption, in which
case such right of conversion shall be reinstated. Upon conversion, any accrued
and unpaid dividends, including any dividends required under paragraph (12)(c),
on the 5% Preferred Stock at the date of conversion shall be paid to the holder
thereof in accordance with the provisions of paragraph (4).
(b) (i) In order to exercise the conversion privilege, the
holder of each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (12)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation to the holders of the 5%
Preferred Stock for such purposes, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Such
notice shall state that the holder has satisfied any legal or regulatory
requirement for conversion, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976; provided, however, that the Corporation
shall use its best efforts in cooperating with such holder to obtain such legal
or regulatory approvals to the extent its cooperation is necessary. Such notice
shall also state the name or names (with address and social security or other
taxpayer identification number, if applicable) in which the certificate or
certificates for Common Stock are to be issued. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such share of
5% Preferred Stock is registered, each share surrendered for conversion shall be
accompanied by instru ments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or the holder's duly authorized
attorney and an amount sufficient to pay any transfer
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<PAGE>
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). All certificates representing
shares of 5% Preferred Stock surrendered for conversion shall be canceled by the
Corporation or the transfer agent.
(ii) Subject to the last sentence of paragraph
(9)(a), holders of shares of 5% Preferred Stock at the close of business on a
dividend payment record date shall not be entitled to receive the dividend
payable on such shares on the corresponding Dividend Payment Date if such holder
shall have surrendered (or made a constructive surrender under paragraph
(12)(d)) for conversion such shares at any time following the preceding Dividend
Payment Date and prior to such Dividend Payment Date.
(iii) Subject to a holder's election under paragraph
(12)(d), as promptly as practicable after the surrender (including a
constructive surrender under paragraph (12)(d)) by a holder of the certificates
for shares of 5% Preferred Stock as aforesaid, the Corporation shall issue and
shall deliver to such holder, or on the holder's written order, a certificate or
certificates (which certificate or certificates shall have the legend set forth
in paragraph (12)(d)) for the whole number of duly authorized, validly issued,
fully paid and non-assessable shares of Common Stock issuable upon the
conversion of such shares in accordance with the provisions of this paragraph
(9), and any fractional interest in respect of a share of Common Stock arising
on such conversion shall be settled as provided in paragraph (9)(c). Upon
conversion of only a portion of the shares of 5% Preferred Stock represented by
any certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (12)(d), upon the surrender
(including a construc tive surrender under paragraph (12)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares shall no
longer be deemed to be outstanding and all rights of a holder with respect to
such shares so surrendered shall immediately terminate except the right to
receive the Common Stock and other amounts payable pursuant to this paragraph
(9).
(iv) 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 5% Preferred Stock shall have been surrendered (or
deemed surrendered pursuant to an election under paragraph (12)(d)) and such
notice received by the Corporation as aforesaid, 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
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shares of Common Stock represented thereby at such time on such date and such
conversion shall be into a number of shares of Common Stock equal to the product
of the number of shares of 5% Preferred Stock surrendered times the Conversion
Rate 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 such 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 based upon the Conversion Rate in effect on the
date upon which such shares shall have been surrendered and such notice received
by the Corporation.
(c) (i) No fractional shares or scrip representing fractions
of shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion (or deemed surrendered under paragraph (12)(d)) 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 5% Preferred Stock surrendered (or deemed surrendered under paragraph
(12)(d)) for conversion by such holder.
(ii) 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 5% Preferred Stock shall have been surrendered (or
deemed surrendered under paragraph (12)(d)) and such notice received by the
Corporation as aforesaid, 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 of Common Stock repre sented thereby at such time on such date and
such conversion shall be into a number of shares of Common Stock equal to the
product of the number of shares of 5% Preferred Stock surrendered times the
Conversion Rate 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 such 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 based upon the Conversion
Rate in effect on the date upon which such shares shall have been surrendered
(or deemed surrendered under paragraph (12)(d)) and such notice received by the
Corporation.
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(d) The Conversion Rate shall be adjusted from time to time as
follows:
(i) If the Corporation shall after the Exchange Date
(A) declare a dividend or make a distribution on its Common Stock in shares of
its 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) effect any reclassification of its outstanding Common Stock,
the Conversion Rate in effect on the record date for such dividend or
distribution, or the effective date of such subdivision, combination or
reclassification, as the case may be, shall be proportionately adjusted so that
the holder of any share of 5% Preferred Stock thereafter surrendered for
conversion shall be entitled to receive the number and kind of shares 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 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, combina tion or
reclassification. An adjustment made pursuant to this subparagraph (i) shall
become effective immediately after the opening of business on the Business Day
next following the record date (except as provided in paragraph (9)(h)) in the
case of a dividend or distribution and shall become effective immediately after
the opening of business on the Business Day next following the effective date in
the case of a subdivision, combination or reclassification. Adjustments in
accordance with this paragraph (9)(d)(i) shall be made whenever any event listed
above shall occur.
(ii) If the Corporation shall after the Exchange Date
fix a record date for the issuance of rights or warrants (in each case, other
than any rights issued pursuant to a shareholder rights plan) to all holders of
Common Stock entitling them (for a period expiring within 45 days after such
record date) to subscribe for or purchase Common Stock (or securities
convertible into Common Stock) at a price per share (or, in the case of a right
or warrant to purchase securities convertible into Common Stock, having an
effective exercise price per share of Common Stock, computed on the basis of the
maximum number of shares of Common Stock issuable upon conversion of such
convertible securities, plus the amount of additional consideration payable, if
any, to receive one share of Common Stock upon conversion of such securities)
less than the 25-Day Average Market Price on the date on which such issuance was
declared or otherwise announced by the Corporation (the "Determination Date"),
then the Conversion Rate in effect at the opening of business on the Business
Day next following such record date shall be adjusted so that the holder of each
share of 5% Preferred Stock shall be entitled to
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receive, upon the conversion thereof, the number of shares of Common Stock
determined by multiplying (I) the Conversion Rate in effect immediately prior to
such record date by (II) a fraction, the numerator of which shall be the sum of
(A) the number of shares of Common Stock outstanding on the close of business on
the Determination Date and (B) the number of additional shares of Common Stock
offered for subscription or purchase pursuant to such rights or warrants (or in
the case of a right or warrant to purchase securities convertible into Common
Stock, the aggregate number of additional shares of Common Stock into which the
convertible securities so offered are initially convertible), and the
denominator of which shall be the sum of (A) the number of shares of Common
Stock outstanding on the close of business on the Determination Date and (B) 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
25-Day Average Market Price on such date (or, in the case of a right of warrant
to purchase securities convertible into Common Stock, the number of shares of
Common Stock obtained by dividing the aggregate exercise price of such rights or
warrants for the maximum number of shares of Common Stock issuable upon
conversion of such convertible securities, plus the aggregate amount of
additional consideration payable, if any, to convert such securities into Common
Stock, by such 25-Day Average Market Price). Such adjustment shall become
effective immediately after the opening of business on the Business Day next
following such record date (except as provided in paragraph (9)(h)). Such
adjustment shall be made successively whenever such a record date is fixed. In
the event that after fixing a record date such rights or warrants are not so
issued, the Conversion Rate shall be readjusted to the Conversion Rate which
would then be in effect if such record date had not been fixed. In determining
whether any rights or warrants entitle the holders of Common Stock to subscribe
for or purchase shares of Common Stock at less than such 25-Day Average Market
Price, 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 by the Board
of Directors in good faith. In case any rights or warrants referred to in this
subparagraph (ii) shall expire unexercised after the same have been distributed
or issued by the Corporation (or, in the case of rights or warrants to purchase
securities convertible into Common Stock once exercised, the conversion right of
such securities shall expire), the Conversion Rate shall be readjusted at the
time of such expiration to the Conversion Rate that would have been in effect if
no adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.
(iii) If the Corporation shall fix a record date for
the making of a distribution to all holders of its Common Stock of evidences of
its
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indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (9)(d)(i)) or rights or warrants (in each case, other than
any rights issued pursuant to a shareholder rights plan) 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 45 days
after such record date) to subscribe for or purchase Common Stock or securities
convertible into shares of Common Stock, which rights and warrants are referred
to in and treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) called the "Securities"), then in each
such case the Conversion Rate shall be adjusted so that the holder of each share
of 5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to the close of business on such
record date by (II) a fraction, the numerator of which shall be the 25-Day
Average Market Price per share of the Common Stock on such record date, and the
denominator of which shall be the 25-Day Average Market Price per share of the
Common Stock on such record date less the then-fair market value (as determined
by the Board of Directors in good faith, whose determinations shall be
conclusive) of the portion of the assets, shares of its capital stock or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that after
fixing a record date such distribution is not so made, the Conversion Rate shall
be readjusted to the Conversion Rate which would then be in effect if such
record date had not been fixed. Such adjustment shall become effective
immediately at the opening of business on the Business Day next following
(except as provided in paragraph (9)(h)) the record date for the determination
of shareholders entitled to receive such distribu tion. For the purposes of this
subparagraph (iii), the distribution of a Security, which is distributed not
only to the holders of the Common Stock on the date fixed for the determination
of shareholders entitled to such distribution of such Security, but also is
distributed with each share of Common Stock delivered to a Person converting a
share of 5% Preferred Stock after such determination date, shall not require an
adjustment of the Conversion Rate pursuant to this subparagraph (iii); provided,
however, that on the date, if any, on which a Person converting a share of 5%
Preferred Stock would no longer be entitled to receive such Security with a
share of Common Stock (other than as a result of the termination of all such
Securities), a distribution of such Securities shall be deemed to have occurred
and the Conversion Rate shall be adjusted as provided in this subparagraph (iii)
(and such day shall be deemed to be "the date fixed for the determination of
shareholders entitled to receive such distribution" and "the record date" within
the meaning of the three preceding
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sentences). If any rights or warrants referred to in this subparagraph (iii)
shall expire unexercised after the same shall have been distributed or issued by
the Corporation, the Conversion Rate shall be readjusted at the time of such
expiration to the Conver sion Rate that would have been in effect if no
adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.
(iv) In case the Corporation shall, by dividend or
otherwise, distribute to all holders of its Common Stock cash in the amount per
share that, together with the aggregate of the per share amounts of any other
cash distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (exclud ing any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjust ment pursuant to
paragraph 9(e) is made), then, in such case, the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to the close of business on the
Record Date for the cash dividend or distribution by a fraction the numerator of
which shall be the Current Market Price of a share of the Common Stock on the
Record Date and the denominator shall be such Current Market Price less the per
share amount of cash so distributed during the 12-month period applicable to one
share of Common Stock, such adjustment to be effective immediately prior to the
opening of business on the Business Day following the Record Date; provided,
however, that in the event the denominator of the foregoing fraction is zero or
negative, in lieu of the foregoing adjustment, adequate provision shall be made
so that each holder of 5% Preferred Stock shall have the right to receive upon
conversion, in addition to the shares of Common Stock to which the holder is
entitled, the amount of cash such holder would have received had such holder
converted each share of 5% Preferred Stock at the beginning of the 12-month
period. In the event that such dividend or distribution is not so paid or made,
the Conversion Rate shall again be adjusted to be the Conver sion Rate which
would then be in effect if such dividend or distribution had not been declared.
Notwithstanding the foregoing, if any adjustment is required to be made as set
forth in this paragraph (9)(d)(iv), the calculation of any such adjustment shall
include the amount of the quarterly cash dividends paid during the 12-month
reference period only to the extent such dividends exceed the regular quarterly
cash dividends paid during the 12 months preceding the 12-month reference
period. For purposes of this paragraph (9)(d)(iv), "Record Date" shall mean,
with respect to any dividend or distribution in
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which the holders of Common Stock have the right to receive cash, the date fixed
for determination of shareholders entitled to receive such cash.
In the event that at any time cash distributions to holders of
Common Stock are not paid equally on all series of Common Stock, the provisions
of this paragraph 9(d)(iv) will apply to any cash dividend or cash distribution
on any series of Common Stock otherwise meeting the requirements of this
paragraph, and shall be deemed amended to the extent necessary so that any
adjustment required will be made on the basis of the cash dividend or cash
distribution made on any such series.
(v) In case of the consummation of a tender or
exchange offer (other than an odd-lot tender offer) made by the Corporation or
any subsidiary of the Corporation for all or any portion of the outstanding
shares of Common Stock to the extent that the cash and fair market value (as
determined in good faith by the Board of Directors of the Corporation, whose
determination shall be conclusive and shall be described in a resolution of such
Board) of any other consideration included in such payment per share of Common
Stock at the last time (the "Expiration Time") tenders or exchanges may be made
pursuant to such tender or exchange offer (as amended) exceed by more than 5.0%,
with any smaller excess being disregarded in computing the adjustment to the
Conversion Rate provided in this paragraph (9)(d)(v), the first reported sale
price per share of the Common Stock on the Trading Day next succeeding the
Expiration Time, then the Conversion Rate shall be adjusted so that the same
shall equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the Expiration Time by a fraction the numerator of which
shall be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to shareholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Expiration Time
(the shares deemed so accepted, up to any such maximum, being referred to as the
"Purchase Shares") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchase Shares) on the Expiration Time and the first
reported sale price of the Common Stock on the Trading Day next succeeding the
Expiration Time, and the denominator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares) on the
Expiration Time multiplied by the first reported sale price of the Common Stock
on the Trading Day next succeed ing the Expiration Time, such adjustment to
become effective immediately prior to the opening of business on the day
following the Expiration Time.
(vi) No adjustment in the Conversion Rate shall be
required unless such adjustment would require a cumulative increase or decrease
of at least
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1% in the Conversion Rate; provided, however, that any adjustments that by
reason of this subparagraph (vi) 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 paragraph (9) (other than this subparagraph (vi))
not later than such time as may be required in order to preserve the tax-free
nature of a distribution for United States income tax purposes to the holders of
shares of 5% Preferred Stock or Common Stock. Notwithstanding any other
provisions of this paragraph (9), the Corporation shall not be required to make
any adjustment of the Conversion Rate 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 paragraph (9) shall be made to the nearest dollar or to
the nearest 1/1,000 of a share, as the case may be. Anything in this paragraph
(9)(d) to the contrary notwithstanding, the Corporation shall be entitled, to
the extent permit ted by law, to make such adjustments in the Conversion Rate,
in addition to those required by this paragraph (9)(d), as it in its discretion
shall determine to be advis able in order that any stock dividends subdivision
of shares, reclassification or combination of shares, distribution or rights or
warrants to purchase stock or securi ties, or a distribution of other assets
(other than cash dividends) hereafter made by the Corporation to its
shareholders shall not be taxable.
(vii) In the event that, at any time as a result of
shares of any other class of capital stock becoming issuable in exchange or
substitution for or in lieu of shares of Common Stock or as a result of an
adjustment made pursuant to the provisions of this paragraph (9)(d), the holder
of 5% Preferred Stock upon subsequent conversion shall become entitled to
receive any shares of capital stock of the Corporation other than Common Stock,
the number of such other shares so receivable upon conversion of any shares of
5% Preferred Stock shall thereafter be subject to adjustment from time to time
in a manner and on terms as nearly equiva lent as practicable to the provisions
contained herein.
(e) If the Corporation shall be a party to any transaction
(includ ing without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (9)(d)(i) 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), there shall be no adjustment to the Conversion Rate but
each share of 5% Preferred Stock which is not converted
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into the right to receive stock, securities or other property in connection with
such Transaction shall thereafter be convertible into the kind and amount of
shares of stock, securities and other property (including cash or any
combination thereof) receivable upon the consummation of such Transaction by a
holder of that number of shares or fraction thereof of Common Stock into which
one share of 5% 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 an affiliate of a Constituent Person and
(ii) failed to exercise his 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 (9)(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 a plurality of the non-electing shares).
The provisions of this paragraph (9)(e) shall similarly apply to successive
Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or any
other distribution) on the Common Stock; 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 any other rights or warrants; or
(iii) there shall be any subdivision, combination or
reclassi fication of the Common Stock or any consolidation or merger to which
the Corpora tion is a party and for which approval of any shareholders of the
Corporation is required, or the sale or transfer of all or substantially all of
the assets of the Corpora tion as an entirety; or
(iv) there shall occur the voluntary or involuntary
liquida tion, dissolution or winding up of the Corporation;
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then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (9)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock at their addresses as shown on
the stock records of the Corporation, as promptly as possible, but at least ten
days prior to the applica ble date hereinafter specified, a notice stating (A)
the date on which a record is to be taken for the purpose of such dividend (or
such other distribution) or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights or warrants are to be determined or (B)
the date on which such subdivision, combina tion, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up or
other action 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 subdivision, combination, reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution or winding up. Failure to give
or receive such notice or any defect therein shall not affect the legality or
validity of any distribution, right, warrant subdivision, combination,
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, winding up or other action, or the vote upon any of the foregoing.
(g) Whenever the Conversion Rate is adjusted as herein
provided, the Corporation shall prepare an officer's certificate with respect to
such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the effective date of such adjustment and shall mail a copy of such
officer's certificate to the holder of each share of 5% Preferred Stock at such
holder's last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to paragraph (9)(b),
it shall also promptly file with such transfer agent an officer's certificate
setting forth the Conversion Rate 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.
(h) In any case in which paragraph (9)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of 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 (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (9)(c).
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(i) For purposes of this paragraph (9), the number of shares
of Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.
(j) There shall be no adjustment of the Conversion Rate in
case of the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth in
this paragraph (9). If any single action would require adjustment of the
Conversion Rate pursuant to more than one subparagraph of this paragraph (9),
only one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value.
(k) If the Corporation shall take any action affecting the
Common Stock, other than action described in this paragraph (9), that in the
opinion of the Board of Directors materially adversely affects the conversion
rights of the holders of the shares of 5% Preferred Stock, the Conversion Rate
may be adjusted, to the extent permitted by law, in such manner, if any, and at
such time, as the Board of Directors may determine to be equitable in the
circumstances; provided that the provisions of this paragraph (9)(k) shall not
affect any rights the holders of 5% Preferred Stock may have at law or in
equity.
(l) (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of 5% Preferred Stock
not theretofore converted. For purposes of this paragraph (9)(l) the number of
shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of 5% Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.
(ii) The Corporation covenants that any shares of
Common Stock issued upon conversion of the 5% Preferred Stock shall be duly
authorized, validly issued, fully paid and non-assessable. Before taking any
action that would cause an adjustment increasing the Conversion Rate such that
the quotient of $1,000.00 and the Conversion Rate would be reduced below the
then-par value of the shares of Common Stock deliverable upon conversion of the
5% Preferred Stock, the
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Corporation will take any corporate action that, in the opinion of its counsel,
may be necessary in order that the Corporation may validly and legally issue
fully paid and non-assessable shares of Common Stock based upon such adjusted
Conversion Rate.
(iii) Prior to the delivery of any securities that
the Corpora tion shall be obligated to deliver upon conversion of the 5%
Preferred Stock, the Corporation shall comply with all applicable federal and
state laws and regulations which required action to be taken by the Corporation.
(m) 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 of the 5%
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 5% Preferred Stock to
be converted 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 satisfac tion of the Corporation, that
such tax has been paid.
(10) Voting Rights. (a) The holders of record of shares of 5%
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (10) or as otherwise provided by law. When and if the
holders of 5% Preferred Stock are entitled to vote by law or pursuant to this
paragraph (10), each holder will be entitled to one vote per share except that
when any other series of preferred stock shall have the right to vote with the
5% Preferred Stock as a single class on any matter, then the 5% Preferred Stock
and other series shall have with respect to such matters one vote per $1,000 of
stated liquidation preference.
(b) Without the written consent of the holders of at least
662/3% of aggregate Liquidation Rights of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 662/3% of aggregate Liquidation Rights
of the outstanding shares of 5% Preferred Stock at a meeting of the holders of
5% Preferred Stock called for such purpose, the Corporation will not amend,
alter or repeal any provision of the Restated Certificate of Incorporation (by
merger or otherwise) so as to adversely affect the preferences, rights or powers
of the 5% Preferred Stock; pro vided that any such amendment that changes the
dividend payable on, or the aggre gate Liquidation Rights of, the 5% Preferred
Stock shall require the affirmative vote at a meeting of holders of 5% Preferred
Stock called for such purpose or written consent of the holder of each share of
5% Preferred Stock.
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(c) Without the written consent of the holders of at least
662/3% of aggregate Liquidation Rights of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 662/3% of aggregate Liquidation Rights
of the outstanding shares of 5% Preferred Stock at a meeting of such holders
called for such purpose, the Corporation will not issue any additional 5%
Preferred Stock or create, authorize or issue any Parity Securities or Senior
Securities or increase the authorized amount of any such other class or series;
provided that this paragraph (9)(c) shall not limit the right of the Corporation
to (i) issue additional shares of 5% Preferred Stock as dividends pursuant to
paragraph (4) or (ii) to issue Parity Securities or Senior Securities in order
to refinance, redeem or refund the 13% Preferred, the 5% Con vertible Preferred
or the 5% Convertible Series B, provided that in the case of a refinancing,
redemption or refund of the 13% Preferred, the 5% Convertible Preferred or the
5% Convertible Series B, the maximum accrual value (i.e., the sum of stated
value and maximum amount payable in kind over the term from issuance to first
date of mandatory redemption or redemption at the option of the holder) of such
Parity Securities or Senior Securities issued by the Corporation in such
refinancing, as shall be reflected on the Corporation's consolidated balance
sheet prepared in accordance with GAAP applied on a basis consistent with the
Corporation's prior practice, may not exceed the maximum accrual value of the
13% Preferred, the 5% Convertible Preferred or the 5% Convertible Series B,
respectively, as reflected on the Corporation's consolidated balance sheet as
contained in the report filed by the Corporation with the United States
Securities and Exchange Commission pursuant to the Exchange Act that is most
recent prior to such refinancing.
(d) Nothing in this paragraph (10) shall be in derogation of
any rights that a holder of shares of 5% Preferred Stock may have in his
capacity as a holder of shares of Common Stock.
(e) Except as otherwise set forth in this paragraph (10) or as
required by law, the holders of 5% Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers, except as
provided by this Certificate or in any agreement the Corporation and a holder
and the consent or vote of such holders shall not be required for the taking of
any corporate action by the Corporation or the Board of Directors. The
provisions of this paragraph (10) are in lieu of, and not in addition to, any
voting rights specified in the Restated Certifi cate of Incorporation as
applicable to a series of Preferred Stock.
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(11) Holding Company. Notwithstanding anything herein to the contrary,
if the Corporation is reorganized such that the Common Stock is exchanged for
the common stock of a new entity ("Holdco") whose common stock is traded on
NASDAQ or another recognized securities exchange, then the Corporation, by
notice to the holders of the 5% Preferred Stock but without any required consent
on their part, may cause the exchange of this 5% Preferred Stock for 5%
preferred stock of Holdco having the same terms, conditions, ranking and other
rights as set forth herein, provided that (i) Holdco shall be incorporated under
the Delaware General Corporation Law and be based in the United States and (ii)
to the extent permitted by applicable law, the certificates representing shares
of the 5% Preferred Stock prior to the formation of Holdco shall be deemed to
represent shares of the new 5% preferred stock, and the holder thereof shall not
be required to surrender or exchange its certificates representing shares of 5%
Preferred Stock.
(12) General Provisions. (a) The headings of the paragraphs, subpara
graphs, clauses and subclauses of this Certificate of Designation are for
convenience of reference only and shall not define, limit or affect any of the
provisions hereof.
(b) The shares of 5% Preferred Stock shall bear the
following legend:
THE SHARES OF PREFERRED STOCK, PAR VALUE $0.01, OF THE CORPORATION (THE
"PREFERRED STOCK") REPRE SENTED BY THIS CERTIFICATE MAY NOT BE OFFERED
OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") AND ANY APPLICABLE STATE SECURITIES
LAWS OR IN ACCORDANCE WITH ANY APPLICABLE EXEMPTION FROM, OR
TRANSACTION NOT SUBJECT TO, THE REGIS TRATION REQUIREMENTS UNDER THE
ACT. THE TRANS FER OF THE PREFERRED STOCK EVIDENCED BY THIS CER
TIFICATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE
PURCHASE AGREEMENT, DATED FEBRUARY 17, 2000, AS MAY BE AMENDED, AMONG
THE CORPORATION AND CERTAIN PURCHASERS, A COPY OF WHICH IS ON FILE AT
THE EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE FURNISHED WITHOUT
CHARGE TO THE HOLDER OF SUCH PREFERRED STOCK UPON WRITTEN REQUEST TO
THE CORPORATION.
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SO LONG AS ANY OF THE PREFERRED STOCK ARE RESTRICTED SECURITIES WITHIN
THE MEANING OF RULE 144(a)(3) UNDER THE ACT, THE CORPORATION WILL,
DURING ANY PERIOD IN WHICH (A) THE CORPORATION IS NOT SUBJECT TO AND IN
COMPLIANCE WITH SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED (THE "EXCHANGE ACT"), OR (B) THE COR PORATION IS NOT
EXEMPT FROM THE REPORTING OBLIGATIONS OF RULE 12g3-2(B) OF THE EXCHANGE
ACT, PROVIDE TO EACH HOLDER OF SUCH RESTRICTED SECURITIES AND TO EACH
PRO SPECTIVE PURCHASER (AS DESIGNATED BY SUCH HOLDER) OF SUCH
RESTRICTED SECURITIES, UPON THE REQUEST OF SUCH HOLDER OR PROSPECTIVE
PURCHASER, ANY INFORMATION REQUIRED TO BE PROVIDED BY SUBJECTION
(d)(4)(i) OF RULE 144(A) UNDER THE ACT.
(c) If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) hereof or shall have failed to
discharge the Redemption Obligation pursuant to paragraph (6) hereof, the
holders of shares of 5% Preferred Stock shall be entitled to receive, in
addition to all other amounts required to be paid hereunder, when, as and if
declared by the Board of Directors, out of funds legally available for the
payment of dividends (after taking into account revaluation of the assets and
liabilities of the Corporation to the extent deemed reasonable by the Board of
Directors of the Corporation after consultation with legal and financial
advisors) but without regard to any contractual or other restrictions with
respect thereto, cash dividends on (i) the aggregate dividends which the
Corporation shall have failed to declare or pay or (ii) the aggregate Redemption
Price together with accrued and unpaid dividends on the 5% Preferred Stock, as
applicable, in each case at a rate of 2% per quarter, compounded quarterly, for
the period during which the failure to pay dividends or failure to discharge the
Redemption Obligation shall continue.
(d) (i) Whenever in connection with any exchange or conversion
of the 5% Preferred Stock for Eurotel Stock or Common Stock, as applicable, the
Qualified Holder is required to surrender certificates representing such shares
of 5% Preferred Stock, the Qualified Holder may, by written notice to the
Corporation and its transfer agent, elect to retain such certificates. In such
case, the certificates so retained by the Qualified Holder shall be deemed (as
and to the extent permitted by
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the law of the jurisdiction of incorporation of Eurotel and with respect to
Common Stock, Delaware) to represent, at and from the date of such exchange, the
number of shares of Eurotel Stock or the Common Stock, as the case may be,
issuable upon such exchange pursuant to paragraph (8) or conversion pursuant to
paragraph (9).
(ii) (A) A Qualified Holder which has previously
elected to retain certificates representing the 5% Preferred Stock in accordance
with para graph (12)(d)(i) upon exchange or conversion may subsequently elect to
receive certificates representing the shares of Eurotel Stock or the Common
Stock issued upon such exchange or conversion. To receive certificates
representing such shares of Eurotel Stock or the Common Stock, as applicable,
the holder of such certificates shall surrender it, duly endorsed or assigned to
the Corporation or in blank, at the office of the Corporation, or to any
transfer agent of the Corporation previously designated by the Corporation for
such purposes, with a written notice of that election.
(B) Unless the certificates to be issued shall be
registered in the same name as the name in which such surrendered certificates
are registered, each certificate so surrendered shall be accompanied by
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the Qualified Holder or the Qualified 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).
All certificates so surrendered shall be canceled by the Corporation or the
transfer agent.
(C) As promptly as practicable after the surrender by
the Qualified Holder of such certificates, the Corporation shall issue and shall
deliver to such Qualified Holder, or on the Qualified Holder's written order, a
certificate or certificates for the number of duly authorized, validly issued,
fully paid and non- assessable shares of Eurotel Stock or the Common Stock, as
applicable, represented by the certificates so surrendered."
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IN WITNESS WHEREOF, NTL Incorporated has caused this
Certificate of Designation to be signed by the undersigned this 27th day of
March, 2000.
NTL INCORPORATED
By: /s/ Richard J. Lubasch
--------------------------------------
Name: Richard J. Lubasch
Title: Executive Vice President,
General Counsel and Secretary
35
Exhibit 10.9
CERTIFICATE OF DESIGNATION
OF THE VOTING POWERS, DESIGNATION,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF THE
5% CUMULATIVE PARTICIPATING CONVERTIBLE
PREFERRED STOCK, SERIES E OF
NTL INCORPORATED
------------------------------
PURSUANT TO SECTION 151(g) OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
------------------------------
The undersigned, Executive Vice President, General Counsel and
Secretary of NTL Incorporated, a Delaware corporation (the "Corporation"),
HEREBY CERTIFIES that the Board of Directors, in accordance with Article FOURTH,
Section B of the Corporation's Restated Certificate of Incorporation and Section
151(g) of the Delaware General Corporation Law (the "DGCL"), has authorized the
creation of the series of Preferred Stock hereinafter provided for and has
established the dividend, redemption, conversion and voting rights thereof and
has adopted the following resolution, creating the following new series of the
Corporation's Preferred Stock:
"BE IT RESOLVED that, pursuant to authority expressly granted
to the Board of Directors by the provisions of Article FOURTH, Section B of the
Restated Certificate of Incorporation of the Corporation and Section 151(g) of
the DGCL, there is hereby created and authorized the issuance of a new series of
the Corporation's Preferred Stock, par value $.01 per share ("Preferred Stock"),
with the following powers, designations, dividend rights, voting powers, rights
on liquidation, conversion rights, redemption rights and other preferences and
relative, participating, optional or other special rights and with the
qualifications, limitations or restrictions on the shares of such series (in
addition to the powers, designations, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereof set forth in the Restated Certificate of Incorporation that
are applicable to each series of Preferred Stock) hereinafter set forth.
(1) Number and Designation. 9,555.47 shares of the Preferred
Stock of the Corporation shall be designated as 5% Cumulative Participating
Convertible Preferred Stock, Series E (the "5% Preferred Stock") and no other
shares of Preferred Stock shall be designated as 5% Preferred Stock.
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(2) Definitions. For purposes of the 5% Preferred Stock, the
following terms shall have the meanings indicated:
"Additional Preferred" shall have the meaning set forth in
paragraph (4)(a) hereof.
"Bankruptcy Event" shall mean any of the following: (I) a
court having jurisdiction in the premises enters a decree or order for
(A) relief in respect of any Major Entity in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect, (B) appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of any
Major Entity or for all or substantially all of the property and assets
of any Major Entity or (C) the winding up or liquidation of the affairs
of any Major Entity; or (II) any Major Entity (A) commences a voluntary
case under any applicable bankruptcy, insolvency or other similar law
now or hereinafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of any
Major Entity, or for all or substantially all of the property and
assets of any Major Entity or (C) effects any general assignment for
the benefit of creditors.
"Board of Directors" shall mean the board of directors of the
Corporation. Except as such term is used in paragraph (9), "Board of
Directors" shall also mean the Executive Committee, if any, of such
board of directors or any other committee duly authorized by such board
of directors to perform any of its responsibilities with respect to the
5% 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.
"Common Stock" shall mean the Corporation's Common Stock, par
value $.01 per share.
"Constituent Person" shall have the meaning set forth in
paragraph (8)(e)(i) hereof.
"Conversion Rate" shall have the meaning set forth in
paragraph (8)(a) hereof.
"Current Market Price" of publicly traded shares of Common
Stock or any other class of capital stock or other security of the
Corporation or any other issuer for any day shall mean the last
reported sale price for such security on the principal exchange or
quotation system on which such security is listed or traded. If the
security is not admitted for trading on any national securities
exchange or the Nasdaq National Market, "Current Market Price" shall
mean the average of the last reported closing bid and asked prices
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reported by the Nasdaq as furnished by any member in good standing of
the National Association of Securities Dealers, Inc., selected from
time to time by the Corporation for that purpose or as quoted by the
National Quotation Bureau Incorporated. In the event that no such
quotation is available for such day, the Current Market Price shall be
the average of the quotations for the last five Trading Days for which
a quotation is available within the last 30 Trading Days prior to such
day. In the event that five such quotations are not available within
such 30-Trading Day period, the Board of Directors shall be entitled to
determine the Current Market Price on the basis of such quotations as
it reasonably considers appropriate.
"Determination Date" shall have the meaning set forth in
paragraph (8)(d)(ii) hereof.
"Dividend Payment Date" shall mean September 30, December 31,
March 31 and June 30 of each year, commencing on June 30, 2000;
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 September 30, December 31, March 31 and June 30 of each
year and ending on and including the day preceding the first day of the
next succeeding Dividend Period.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder.
"Expiration Time" shall have the meaning set forth in
paragraph (8)(d)(v) hereof.
"5% Preferred Stock" shall have the meaning set forth in
paragraph (1) hereof.
"Issue Date" shall mean the date on which shares of 5%
Preferred Stock are first issued.
"Junior Securities" shall have the meaning set forth in
paragraph (3)(c) hereof.
"Junior Securities Distribution" shall have the meaning set
forth in paragraph (4)(f) hereof.
"Liquidation Right" shall mean, for each share of 5% Preferred
Stock, the greater of (i) an amount equal to $1,000 per share, plus an
amount equal to all dividends (whether or not earned or declared)
accrued and unpaid thereon to the date of final distribution to such
holders, and (ii) the amount that would be received in liquidation
following conversion of a share of 5% Preferred Stock into Common
Stock.
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"Major Entity" shall mean any of the Corporation, NTL
Communications Corp., Diamond Cable Communications Limited, Diamond
Holdings Limited, NTL (Triangle) LLC or any Significant Subsidiary.
"Mandatory Redemption Date" shall have the meaning set forth
in paragraph (6)(c) hereof.
"Mandatory Redemption Obligation" shall have the meaning set
forth in paragraph (6)(d) hereof.
"Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
securities market regulated by the National Association of Securities
Dealers, Inc.
"Nasdaq National Market" shall have the meaning set forth in
Rule 4200(a)(23) of the rules of the National Association of Securities
Dealers, Inc.
"9.9% Series B Preferred" shall have the meaning set forth in
paragraph (3)(d) hereof.
"non-electing share" shall have the meaning set forth in
paragraph (8)(e)(i) hereof.
"NYSE" means the New York Stock Exchange.
"outstanding", when used with reference to shares of stock,
shall mean issued shares, excluding shares held by the Corporation or a
subsidiary.
"Parity Securities" shall have the meaning set forth in
paragraph (3)(b) hereof.
"Person" shall mean any individual, partnership, association,
joint venture, corporation, business, trust, joint stock company,
limited liability company, any unincorporated organization, any other
entity, a "group" of such persons, as that term is defined in Rule
13d-5(b) under the Exchange Act, or a government or political
subdivision thereof.
"Preferred Shares" has the meaning set forth in paragraph
(9)(c).
"Preferred Stock" shall have the meaning set forth in the
first resolution above.
"Purchase Shares" shall have the meaning set forth in
paragraph (8)(d)(v) hereof.
"Record Date" shall have the meaning set forth in paragraph
(8)(d)(iv) hereof.
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"Relevant Compounding Factor" shall mean, with respect to each
share of 5% Preferred Stock, upon initial issuance 1.00, and shall on
each Dividend Payment Date be increased to equal the product of the
Relevant Compounding Factor in effect immediately prior to such
Dividend Payment Date and 1.0125.
"Rights" shall have the meaning set forth in paragraph (11)
hereof.
"Securities" shall have the meaning set forth in paragraph
(8)(d)(iii) hereof.
"Senior Securities" shall have the meaning set forth in
paragraph (3)(a) 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 Securities or any
class or series of Parity Securities 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 5%
Preferred Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent,
as the case may be.
"Significant Subsidiary" shall have the meaning given to such
term in Regulation S-X under the Exchange Act.
"13% Preferred" shall have the meaning set forth in paragraph
(3)(d) hereof.
"Trading Day" shall mean any day on which the securities in
question 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 not listed or admitted for trading on any national securities
exchange, on the Nasdaq National Market, or if such securities are not
quoted thereon, in the applicable securities market in which the
securities are traded.
"Transaction" shall have the meaning set forth in paragraph
(8)(e)(i) hereof.
"Trigger Event" shall have the meaning set forth in paragraph
(9)(b) hereof.
"Trigger Event Cure" shall have the meaning set forth in
paragraph (9)(b) hereof.
"25-Day Average Market Price" shall mean, for any security,
the volume- weighted average of the Current Market Prices of that
security for the twenty-five Trading Days immediately preceding the
date of determination.
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(3) Rank. Any class or series of stock of the Corporation
shall be deemed to rank:
(a) prior to the 5% Preferred Stock, either as to the payment
of dividends or as to distribution of assets upon liquidation, dissolution or
winding up, or both, if the holders of such class or series shall be entitled by
the terms thereof to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, in preference or priority to the holders
of 5% Preferred Stock ("Senior Securities");
(b) on a parity with the 5% Preferred Stock, either as to the
payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and
(c) junior to the 5% Preferred Stock, either as to the payment
of dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, or both, if such stock or series shall be Common Stock or if the
holders of the 5% Preferred Stock shall be entitled to receipt of dividends, and
of amounts distributable upon liquidation, dissolution or winding up, in
preference or priority to the holders of shares of such stock or series ("Junior
Securities").
(d) Each of the 13% Senior Redeemable Exchangeable Preferred
Stock and the 13% Series B Senior Redeemable Exchangeable Preferred Stock
(collectively, the "13% Preferred") is a Senior Security. Each of the 9.9%
Non-Voting Mandatorily Redeemable Preferred Stock, Series B ("9.9% Series B
Preferred") and the Series A Junior Participating Preferred Stock, is a Junior
Security. The 5% Cumulative Participating Convertible Preferred Stock, Series A,
the 5% Cumulative Participating Convertible Preferred Stock, Series C, the 5%
Cumulative Participating Convertible Preferred Stock, Series D, the 5%
Cumulative Preferred Stock, Series A, and one or more classes of Additional
Preferred (as defined below) shall be Parity Securities; provided, however, that
there shall be no issue of other Senior Securities, Parity Securities or rights
or options exercisable for or convertible into any such securities, except as
approved by the holders of the 5% Preferred Stock pursuant to paragraph 9(e).
(e) The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.
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(4) Dividends. (a) Subject to paragraph (8)(b)(ii), the
holders of shares of 5% Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of funds legally available for
the payment of dividends, dividends at the quarterly rate of $12.50 per share
(assuming a $1,000.00 face amount) payable in cash, shares of Common Stock (such
Common Stock for this purpose to be assigned a value equal to the 25-Day Average
Market Price as of the record date for such Dividend Payment Date) or additional
shares of Preferred Stock of a class to be designated by the Board of Directors
having terms substantially identical to the 5% Preferred Stock except as
follows: (A) the Conversion Rate (as set forth in Section 8(a)) on such
Preferred Stock initially shall be the quotient resulting from the division of
the Conversion Rate (as then in effect on the 5% Preferred Stock) by the
Relevant Compounding Factor and (B) the number of shares of such Preferred Stock
payable as a dividend on any Dividend Payment Date shall increase for each
Dividend Payment Date from the first Dividend Payment Date by the Relevant
Compounding Factor (such classes of Preferred Stock singularly and collectively,
the "Additional Preferred"). All dividends on the 5% Preferred Stock, in
whatever form, shall be payable in arrears quarterly on each Dividend Payment
Date and shall be cumulative from the Issue Date (except that dividends on
Additional Preferred shall accrue from the date such Additional Preferred is
issued or would have been issued in accordance with this Certificate of
Designation if such dividends had been declared), whether or not in any Dividend
Period or Dividend Periods there shall be funds of the Corporation legally
available for the payment of such dividends. Each such dividend shall be payable
to the holders of record of shares of the 5% Preferred Stock, as they appear on
the stock records of the Corporation at the close of business on the record date
for such dividend. Upon the declaration of any such dividend, the Board of
Directors shall fix as such record date on the fifth Business Day preceding the
relevant Dividend Payment Date and shall give notice on or prior to the record
date of the form of payment of such dividend. Accrued and unpaid dividends for
any past Dividend Payment Date may be declared and paid at any time, without
reference to any Dividend Payment Date, to holders of record on such record
date, not more than 45 days nor less than five Business Days preceding the
payment date thereof, as may be fixed by the Board of Directors.
(b) In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock shall be entitled to
receive an amount equal to the amount (and in the form of consideration) that
such holders would be entitled to receive if, pursuant to paragraph (8), they
had converted such 5% Preferred Stock fully into Common Stock immediately before
the record date for the payment of any such dividends on Common Stock. Each such
dividend shall be payable to the holders of record of shares of the 5% Preferred
Stock as they appear on the stock records of the Corporation at the close of
business on the record date for such dividend on Common Stock, and the
Corporation shall pay each such dividend on the applicable payment date for such
dividend on the Common Stock.
(c) For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each such Additional
Preferred shall be valued at $1,000.00. Holders of such Additional Preferred
shall be entitled to receive dividends payable at the rates specified in
paragraph (4)(a).
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(d) The dividends payable for any period shorter than a full
Dividend Period on the 5% Preferred Stock shall accrue daily and be computed on
the basis of a 360-day year and the actual number of days in such period. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the 5% Preferred Stock that may be in
arrears except as otherwise provided herein.
(e) So long as any shares of the 5% Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on Parity Securities or
Junior Securities, for any period, nor shall any Parity Securities or Junior
Securities be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock for all
Dividend Periods terminating on or prior to the date of such redemption,
repurchase or other acquisition shall have been paid or set apart for payment,
(ii) sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the 5% Preferred Stock
and (iii) the Corporation is not in default with respect to any redemption of
shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below.
When dividends are not fully paid in Common Stock or Additional Preferred or are
not paid in full in cash or a sum sufficient for such payment is not set apart,
as aforesaid, all dividends declared upon shares of the 5% Preferred Stock and
all dividends declared upon Parity Securities shall be declared ratably in
proportion to the respective amounts of dividends accumulated and unpaid on the
5% Preferred Stock and accumulated and unpaid on such Parity Securities.
(f) So long as any shares of the 5% Preferred Stock are
outstanding, no dividends (other than (i) any rights issued pursuant to a
shareholder rights plan as provided in paragraph (11) and (ii) dividends or
distributions paid in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Junior Securities) shall be declared or paid or set apart
for payment or other distribution declared or made upon Junior Securities, nor
shall any Junior Securities be redeemed, purchased or otherwise acquired (other
than a redemption, purchase, or other acquisition of shares of Common Stock made
for purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") 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) by the Corporation, directly or
indirectly (except by conversion into or exchange for Junior Securities,
including pursuant to paragraph 4(d) of the 9.9% Series B Preferred), unless in
each case (A) full cumulative dividends on all outstanding shares of the 5%
Preferred Stock and all other Parity Securities shall have been paid or set
apart for payment for all past Dividend Periods and dividend periods for such
other stock, (B) sufficient funds shall have been paid or set apart for the
payment of the dividend for the current Dividend Period with respect to the 5%
Preferred Stock and all other Parity Securities, (C) the Corporation is not in
default with respect to any redemption of shares of 5% Preferred Stock by the
Corporation
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pursuant to paragraph (6) below, (D) the Corporation has fully performed its
obligations under paragraphs (4)(b) and (6) hereof.
(5) 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 Securities, the holders of the shares of 5% Preferred Stock shall be
entitled to receive the Liquidation Right. If, upon any liquidation, dissolution
or winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of 5% Preferred Stock
shall be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any Parity Securities, then such assets, or the proceeds
thereof, shall be distributed among the holders of shares of 5% Preferred Stock
and any such other Parity Securities ratably in accordance with the respective
amounts that would be payable on such shares of 5% Preferred Stock and any such
other stock if all amounts payable thereon were paid in full. For the purposes
of this paragraph (5), (i) a consolidation or merger of the Corporation with one
or more corporations, or (ii) a sale or transfer of all or substantially all of
the Corporation's assets, 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 Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph (5), any other series or class or classes
of Junior Securities shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the 5% Preferred Stock shall not be
entitled to share therein.
(6) Redemption. (a) On and after the first Business Day
following the earlier to occur of (i) August 13, 2006 or (ii) the date on which
both (A) the 25-Day Average Market Price of the Common Stock shall have exceeded
$96.00 and (B) August 13, 2003, to the extent the Corporation shall have funds
legally available for such payment, the Corporation may redeem at its option
shares of 5% Preferred Stock, from time to time in part, or in whole, payable at
the option of the Corporation in (A) cash, at a redemption price of $1,000.00
per share, (B) in shares of Common Stock, at a redemption price of $1,000.00 per
share, or (C) in a combination of cash and Common Stock, at a redemption price
based on the respective combination of consideration, together in each case with
accrued and unpaid dividends thereon, whether or not declared, to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(a), the price per share of Common Stock shall be the 25-Day
Average Market Price.
(b) On and after the first Business Day following August 13,
2009, each holder of shares of 5% Preferred Stock shall have the right to
require the Corporation, to the extent the Corporation shall have funds legally
available therefor, to redeem such holder's shares of 5% Preferred Stock, from
time to time in part, or in whole, at a redemption price of $1,000.00 per share,
payable at the option of the Corporation in cash, shares of Common Stock or a
combination thereof, together with accrued and unpaid dividends thereon to, but
excluding, the
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date fixed for redemption, without interest. For purposes of determining the
number of shares of the Common Stock to be issued pursuant to this paragraph
(6)(b), the price per share of Common Stock shall equal the 25-Day Average
Market Price. Any holder of shares of 5% Preferred Stock who elects to exercise
its rights pursuant to this paragraph (6)(b) shall deliver to the Corporation a
written notice of election not less than 20 days prior to the date on which such
holder demands redemption pursuant to this paragraph 6(b), which notice shall
set forth the name of the Holder, the number of shares of 5% Preferred Stock to
be redeemed and a statement that the election to exercise a redemption right is
being made thereby; and, subject to paragraph (10)(d), shall deliver to the
Corporation on or before the date of redemption certificates evidencing the
shares of 5% Preferred Stock to be redeemed, duly endorsed for transfer to the
Corporation.
(c) If the Corporation shall not have redeemed all outstanding
shares of 5% Preferred Stock pursuant to paragraphs (6)(a) or (6)(b), on August
13, 2019 (the "Mandatory Redemption Date"), to the extent the Corporation shall
have funds legally available for such payment, the Corporation shall redeem all
outstanding shares of 5% Preferred Stock, at a redemption price of $1,000.00 per
share, payable at the option of the Corporation in cash, shares of Common Stock
or a combination thereof, together with accrued and unpaid dividends thereon to,
but excluding, the Mandatory Redemption Date, without interest. For purposes of
determining the number of shares of the Common Stock to be issued pursuant to
this paragraph (6)(c), the price per share of Common Stock shall be the 25-Day
Average Market Price.
(d) If the Corporation is unable or shall fail to discharge
its obligation to redeem all outstanding shares of 5% Preferred Stock pursuant
to paragraphs 6(b) or 6(c) (each, a "Mandatory Redemption Obligation"), the
Mandatory Redemption Obligation shall be discharged as soon as the Corporation
is able to discharge such Mandatory Redemption Obligation. If and so long as any
Mandatory Redemption Obligation with respect to the 5% Preferred Stock shall not
be fully discharged, the Corporation shall not (i) directly or indirectly,
redeem, purchase, or otherwise acquire any Parity Security or discharge any
mandatory or optional redemption, sinking fund or other similar obligation in
respect of any Parity Securities (except in connection with a redemption,
sinking fund or other similar obligation to be satisfied pro rata with the 5%
Preferred Stock) or (ii) declare or make any Junior Securities Distribution
(other than dividends or distributions paid in shares of, or options, warrants
or rights to subscribe for or purchase shares of, Junior Securities), or,
directly or indirectly, discharge any mandatory or optional redemption, sinking
fund or other similar obligation in respect of the Junior Securities.
(e) Upon any redemption of 5% Preferred Stock, the Corporation
shall pay the redemption price and any accrued and unpaid dividends in arrears
to, but excluding, the applicable redemption date.
(f) For purposes of paragraph (6)(a) only, unless full
cumulative dividends (whether or not declared) on all outstanding shares of 5%
Preferred Stock and any Parity Securities shall have been paid or
contemporaneously are declared and paid or set apart for payment for all
Dividend Periods terminating on or prior to the applicable redemption date and
notice has been given in accordance with paragraph (7), none of the shares of 5%
Preferred Stock
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shall be redeemed, and no sum shall be set aside for such redemption, unless
shares of 5% Preferred Stock are redeemed pro rata and notice has previously
been given in accordance with paragraph (7).
(7) Procedure for Redemption. (a) If the Corporation shall
redeem shares of 5% Preferred Stock pursuant to paragraph 6(a), notice of such
redemption shall be given by certified mail, return receipt requested, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
redemption date, to each holder of record of the shares to be redeemed at such
holder's address as the same appears on the stock register of the Corporation
and confirmed by facsimile transmission to each holder of record if the
Corporation has been furnished with such facsimile address by the holder(s);
provided, however, that neither the failure to give such notice nor confirmation
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 that was mailed 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 notice shall state: (i) the redemption date; (ii) the number of shares of
5% Preferred Stock to be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of shares to be redeemed from such holder;
(iii) the amount payable, whether such amount shall be paid in Common Stock or
in cash and if the payment is in Common Stock an explanation of the
determination of the amount to be paid; (iv) the place or places where
certificates for such shares are to be surrendered or the notice under paragraph
(10)(d) should be sent for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date, except as otherwise provided herein.
(b) If notice has been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
for the payment of the redemption price of the shares called for redemption and
dividends accrued and unpaid thereon, if any), (i) except as otherwise provided
herein, dividends on the shares of 5% Preferred Stock so called for redemption
shall cease to accrue, (ii) said shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as holders of the 5%
Preferred Stock shall cease (except the right to receive from the Corporation
the redemption price without interest thereon, upon surrender and endorsement
(or a constructive surrender under paragraph (10)(d)) of their certificates if
so required, and to receive any dividends payable thereon).
(c) Upon surrender (including a constructive surrender under
paragraph (10)(d)) in accordance with notice given pursuant to this paragraph
(7) of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid, plus any dividends payable
thereon. If fewer than all the outstanding shares of 5% Preferred Stock are to
be redeemed, the number of shares to be redeemed shall be determined by the
Board of Directors and the shares to be redeemed shall be selected pro rata
(with any fractional shares being rounded to the nearest whole share). In case
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fewer than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued, subject to a holder's election under paragraph
(10)(d), representing the surrendered shares without cost to the holder thereof.
(8) Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock shall
have the right, at any time and from time to time, at such holder's option, to
convert any or all outstanding shares of 5% Preferred Stock held by such holder,
but not fractions of shares, into fully paid and non-assessable shares of Common
Stock by surrendering such shares to be converted, such surrender to be made in
the manner provided in paragraph (8)(b) hereof. The number of shares of Common
Stock deliverable upon conversion of each share of 5% Preferred Stock shall be
equal to 12.112506, as adjusted as provided herein (the "Conversion Rate"). The
Conversion Rate is subject to adjustment from time to time pursuant to paragraph
(8)(d) hereof. The right to convert shares called for redemption pursuant to
paragraph 6(a) shall terminate at the close of business on the date immediately
preceding the date fixed for such redemption unless the Corporation shall
default in making payment of the amount payable upon such redemption, in which
case such right of conversion shall be reinstated. Upon conversion, any accrued
and unpaid dividends on the 5% Preferred Stock at the date of conversion shall
be paid to the holder thereof in accordance with the provisions of paragraph
(4).
(b) (i) In order to exercise the conversion privilege, the
holder of each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (10)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation to the holders of the 5%
Preferred Stock for such purposes, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Such
notice shall state that the holder has satisfied any legal or regulatory
requirement for conversion, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976; provided, however, that the Corporation
shall use its best efforts in cooperating with such holder to obtain such legal
or regulatory approvals to the extent its cooperation is necessary. Such notice
shall also state the name or names (with address and social security or other
taxpayer identification number, if applicable) in which the certificate or
certificates for Common Stock are to be issued. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such share of
5% 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 the 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).
All certificates representing shares of 5% Preferred Stock surrendered for
conversion shall be canceled by the Corporation or the transfer agent.
(ii) Subject to the last sentence of paragraph (8)(a), holders
of shares of 5% Preferred Stock at the close of business on a dividend payment
record date shall not be
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entitled to receive the dividend payable on such shares on the corresponding
Dividend Payment Date if such holder shall have surrendered (or made a
constructive surrender under paragraph (10)(d)) for conversion such shares at
any time following the preceding Dividend Payment Date and prior to such
Dividend Payment Date.
(iii) Subject to a holder's election under paragraph (10)(d),
as promptly as practicable after the surrender (including a constructive
surrender under paragraph (10)(d)) by a holder of the certificates for shares of
5% Preferred Stock as aforesaid, the Corporation shall issue and shall deliver
to such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this paragraph (8), and any
fractional interest in respect of a share of Common Stock arising on such
conversion shall be settled as provided in paragraph (8)(c). Upon conversion of
only a portion of the shares of 5% Preferred Stock represented by any
certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (10)(d), upon the surrender
(including a constructive surrender under paragraph (10)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares shall no
longer be deemed to be outstanding and all rights of a holder with respect to
such shares so surrendered shall immediately terminate except the right to
receive the Common Stock and other amounts payable pursuant to this paragraph
(8).
(iv) 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 5% Preferred Stock shall have been surrendered (or deemed
surrendered pursuant to an election under paragraph (10)(d)) and such notice
received by the Corporation as aforesaid, 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 of Common Stock represented thereby at such time
on such date and such conversion shall be into a number of shares of Common
Stock equal to the product of the number of shares of 5% Preferred Stock
surrendered times the Conversion Rate 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 such 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 based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered and such notice received by the Corporation.
(c) (i) No fractional shares or scrip representing fractions
of shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
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for conversion (or deemed surrendered under paragraph (10)(d)) 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 5% Preferred Stock surrendered (or deemed surrendered under paragraph
(10)(d)) for conversion by such holder.
(ii) 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 5% Preferred Stock shall have been surrendered (or deemed
surrendered under paragraph (10)(d)) and such notice received by the Corporation
as aforesaid, 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 of Common Stock represented thereby at such time on such date and such
conversion shall be into a number of shares of Common Stock equal to the product
of the number of shares of 5% Preferred Stock surrendered times the Conversion
Rate 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 such 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 based upon the Conversion Rate in effect on the
date upon which such shares shall have been surrendered (or deemed surrendered
under paragraph (10)(d)) and such notice received by the Corporation.
(d) The Conversion Rate shall be adjusted from time to time as
follows:
(i) If the Corporation shall after the Issue Date (A) declare
a dividend or make a distribution on its Common Stock in shares of its 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) effect any reclassification of its outstanding Common Stock, the
Conversion Rate in effect on the record date for such dividend or distribution,
or the effective date of such subdivision, combination or reclassification, as
the case may be, shall be proportionately adjusted so that the holder of any
share of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares 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 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 subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (8)(h)) in the case of a dividend
or distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case of a
subdivision, combination or reclassification. Adjustments in accordance with
this paragraph (8)(d)(i) shall be made whenever any event listed above shall
occur.
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(ii) If the Corporation shall after the Issue Date fix a
record date for the issuance of rights or warrants (in each case, other than any
rights issued pursuant to a shareholder rights plan) to all holders of Common
Stock entitling them (for a period expiring within 45 days after such record
date) to subscribe for or purchase Common Stock (or securities convertible into
Common Stock) at a price per share (or, in the case of a right or warrant to
purchase securities convertible into Common Stock, having an effective exercise
price per share of Common Stock, computed on the basis of the maximum number of
shares of Common Stock issuable upon conversion of such convertible securities,
plus the amount of additional consideration payable, if any, to receive one
share of Common Stock upon conversion of such securities) less than the 25- Day
Average Market Price on the date on which such issuance was declared or
otherwise announced by the Corporation (the "Determination Date"), then the
Conversion Rate in effect at the opening of business on the Business Day next
following such record date shall be adjusted so that the holder of each share of
5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to such record date by (II) a
fraction, the numerator of which shall be the sum of (A) the number of shares of
Common Stock outstanding on the close of business on the Determination Date and
(B) the number of additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants (or in the case of a right or
warrant to purchase securities convertible into Common Stock, the aggregate
number of additional shares of Common Stock into which the convertible
securities so offered are initially convertible), and the denominator of which
shall be the sum of (A) the number of shares of Common Stock outstanding on the
close of business on the Determination Date and (B) 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 25-Day Average Market Price on
such date (or, in the case of a right of warrant to purchase securities
convertible into Common Stock, the number of shares of Common Stock obtained by
dividing the aggregate exercise price of such rights or warrants for the maximum
number of shares of Common Stock issuable upon conversion of such convertible
securities, plus the aggregate amount of additional consideration payable, if
any, to convert such securities into Common Stock, by such 25-Day Average Market
Price). Such adjustment shall become effective immediately after the opening of
business on the Business Day next following such record date (except as provided
in paragraph (8)(h)). Such adjustment shall be made successively whenever such a
record date is fixed. In the event that after fixing a record date such rights
or warrants are not so issued, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect if such record date had not been
fixed. In determining whether any rights or warrants entitle the holders of
Common Stock to subscribe for or purchase shares of Common Stock at less than
such 25-Day Average Market Price, 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 by the Board of Directors in good faith. In case any rights or
warrants referred to in this subparagraph (ii) shall expire unexercised after
the same have been distributed or issued by the Corporation (or, in the case of
rights or warrants to purchase securities convertible into Common Stock once
exercised, the conversion right of such securities shall expire), the Conversion
Rate shall be readjusted at the time of such expiration to the
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Conversion Rate that would have been in effect if no adjustment had been made on
account of the distribution or issuance of such expired rights or warrants.
(iii) If the Corporation shall fix a record date for the
making of a distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (8)(d)(i)) or rights or warrants (in each case, other than
any rights issued pursuant to a shareholder rights plan) 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 45 days
after such record date) to subscribe for or purchase Common Stock or securities
convertible into shares of Common Stock, which rights and warrants are referred
to in and treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) called the "Securities"), then in each
such case the Conversion Rate shall be adjusted so that the holder of each share
of 5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to the close of business on such
record date by (II) a fraction, the numerator of which shall be the 25-Day
Average Market Price per share of the Common Stock on such record date, and the
denominator of which shall be the 25-Day Average Market Price per share of the
Common Stock on such record date less the then-fair market value (as determined
by the Board of Directors in good faith, whose determinations shall be
conclusive) of the portion of the assets, shares of its capital stock or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that after
fixing a record date such distribution is not so made, the Conversion Rate shall
be readjusted to the Conversion Rate which would then be in effect if such
record date had not been fixed. Such adjustment shall become effective
immediately at the opening of business on the Business Day next following
(except as provided in paragraph (8)(h)) the record date for the determination
of shareholders entitled to receive such distribution. For the purposes of this
subparagraph (iii), the distribution of a Security, which is distributed not
only to the holders of the Common Stock on the date fixed for the determination
of shareholders entitled to such distribution of such Security, but also is
distributed with each share of Common Stock delivered to a Person converting a
share of 5% Preferred Stock after such determination date, shall not require an
adjustment of the Conversion Rate pursuant to this subparagraph (iii); provided,
however, that on the date, if any, on which a Person converting a share of 5%
Preferred Stock would no longer be entitled to receive such Security with a
share of Common Stock (other than as a result of the termination of all such
Securities), a distribution of such Securities shall be deemed to have occurred
and the Conversion Rate shall be adjusted as provided in this subparagraph (iii)
(and such day shall be deemed to be "the date fixed for the determination of
shareholders entitled to receive such distribution" and "the record date" within
the meaning of the three preceding sentences). If any rights or warrants
referred to in this subparagraph (iii) shall expire unexercised after the same
shall have been distributed or issued by the Corporation, the Conversion Rate
shall be readjusted at the time of such expiration to the Conversion Rate that
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would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
(iv) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per share that,
together with the aggregate of the per share amounts of any other cash
distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjustment pursuant to paragraph
8(e) is made), then, in such case, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date for the
cash dividend or distribution by a fraction the numerator of which shall be the
Current Market Price of a share of the Common Stock on the Record Date and the
denominator shall be such Current Market Price less the per share amount of cash
so distributed during the 12-month period applicable to one share of Common
Stock, such adjustment to be effective immediately prior to the opening of
business on the Business Day following the Record Date; provided, however, that
in the event the denominator of the foregoing fraction is zero or negative, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
holder of 5% Preferred Stock shall have the right to receive upon conversion, in
addition to the shares of Common Stock to which the holder is entitled, the
amount of cash such holder would have received had such holder converted each
share of 5% Preferred Stock at the beginning of the 12-month period. In the
event that such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be in
effect if such dividend or distribution had not been declared. Notwithstanding
the foregoing, if any adjustment is required to be made as set forth in this
paragraph (8)(d)(iv), the calculation of any such adjustment shall include the
amount of the quarterly cash dividends paid during the 12-month reference period
only to the extent such dividends exceed the regular quarterly cash dividends
paid during the 12 months preceding the 12-month reference period. For purposes
of this paragraph (8)(d)(iv), "Record Date" shall mean, with respect to any
dividend or distribution in which the holders of Common Stock have the right to
receive cash, the date fixed for determination of shareholders entitled to
receive such cash.
In the event that at any time cash distributions to holders of
Common Stock are not paid equally on all series of Common Stock, the provisions
of this paragraph 8(d)(iv) will apply to any cash dividend or cash distribution
on any series of Common Stock otherwise meeting the requirements of this
paragraph, and shall be deemed amended to the extent necessary so that any
adjustment required will be made on the basis of the cash dividend or cash
distribution made on any such series.
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(v) In case of the consummation of a tender or exchange offer
(other than an odd-lot tender offer) made by the Corporation or any subsidiary
of the Corporation for all or any portion of the outstanding shares of Common
Stock to the extent that the cash and fair market value (as determined in good
faith by the Board of Directors of the Corporation, whose determination shall be
conclusive and shall be described in a resolution of such Board) of any other
consideration included in such payment per share of Common Stock at the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as amended) exceed by more than 5.0%, with any smaller
excess being disregarded in computing the adjustment to the Conversion Rate
provided in this paragraph (8)(d)(v), the first reported sale price per share of
the Common Stock on the Trading Day next succeeding the Expiration Time, then
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
Expiration Time by a fraction the numerator of which shall be the sum of (x) the
fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchase Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchase Shares) on the Expiration Time and the first reported sale price of
the Common Stock on the Trading Day next succeeding the Expiration Time, and the
denominator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time multiplied
by the first reported sale price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such adjustment to become effective immediately
prior to the opening of business on the day following the Expiration Time.
(vi) No adjustment in the Conversion Rate shall be required
unless such adjustment would require a cumulative increase or decrease of at
least 1% in the Conversion Rate; provided, however, that any adjustments that by
reason of this subparagraph (vi) 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 paragraph (8) (other than this subparagraph (vi))
not later than such time as may be required in order to preserve the tax-free
nature of a distribution for United States income tax purposes to the holders of
shares of 5% Preferred Stock or Common Stock. Notwithstanding any other
provisions of this paragraph (8), the Corporation shall not be required to make
any adjustment of the Conversion Rate 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 paragraph (8) shall be made to the nearest dollar or to
the nearest 1/1,000 of a share, as the case may be. Anything in this paragraph
(8)(d) to the contrary notwithstanding, the Corporation shall be entitled, to
the extent permitted by law, to make such adjustments in the Conversion Rate, in
addition to those required by this paragraph (8)(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 or rights or
warrants
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to purchase stock or securities, or a distribution of other assets (other than
cash dividends) hereafter made by the Corporation to its shareholders shall not
be taxable.
(vii) In the event that, at any time as a result of shares of
any other class of capital stock becoming issuable in exchange or substitution
for or in lieu of shares of Common Stock or as a result of an adjustment made
pursuant to the provisions of this paragraph (8)(d), the holder of 5% Preferred
Stock upon subsequent conversion shall become entitled to receive any shares of
capital stock of the Corporation other than Common Stock, the number of such
other shares so receivable upon conversion of any shares of 5% Preferred Stock
shall thereafter be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions contained herein.
(viii) The $96.00 required stock price threshold set forth in
paragraph (6)(a)(ii) shall be adjusted from time to time in a manner consistent
with the provisions of this paragraph (8)(d).
(e) (i) If the Corporation shall be a party to any transaction
(including without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (8)(d)(i) 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), there shall be no adjustment to the Conversion Rate but
each share of 5% Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereafter be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that number
of shares or fraction thereof of Common Stock into which one share of 5%
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 an affiliate of a Constituent Person and (ii) failed
to exercise his 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 (8)(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 a plurality of the non-electing shares). The provisions
of this paragraph (8)(e) shall similarly apply to successive Transactions.
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(ii) Notwithstanding anything herein to the contrary , if the
Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another recognized securities exchange or automated
quotation system, then the Corporation, by notice to and consultation with the
holders of the 5% Preferred Stock, may cause the exchange of this 5% Preferred
Stock for preferred stock of Holdco having the same terms and conditions as set
forth herein; provided that the rights attaching to the preferred stock of
Holdco shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such
rights effectively giving the same economic rights as the 5% Preferred Stock
(including for these purposes any resultant change in the tax treatment for the
holders of such stock).
(f) If:
(i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock; 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 any other rights or warrants; or
(iii) there shall be any subdivision, combination or
reclassification of the Common Stock or any consolidation or merger to
which the Corporation is a party and for which approval of any
shareholders of the Corporation is required, or 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 any transfer
agent designated by the Corporation pursuant to paragraph (8)(b) and shall cause
to be mailed to the holders of shares of the 5% Preferred Stock at their
addresses as shown on the stock records of the Corporation, as promptly as
possible, but at least ten days prior to the applicable date hereinafter
specified, a notice stating (A) the date on which a record is to be taken for
the purpose of such dividend (or such other distribution) or rights or warrants,
or, if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution or rights or
warrants are to be determined or (B) the date on which such subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up or other action 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 subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up. Failure to give or receive such notice
or any defect therein shall not affect the legality or validity
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of any distribution, right, warrant subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, winding up or
other action, or the vote upon any of the foregoing.
(g) Whenever the Conversion Rate is adjusted as herein
provided, the Corporation shall prepare an officer's certificate with respect to
such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the effective date of such adjustment and shall mail a copy of such
officer's certificate to the holder of each share of 5% Preferred Stock at such
holder's last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to paragraph (8)(b),
it shall also promptly file with such transfer agent an officer's certificate
setting forth the Conversion Rate 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.
(h) In any case in which paragraph (8)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of 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 (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (8)(c).
(i) For purposes of this paragraph (8), the number of shares
of Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.
(j) There shall be no adjustment of the Conversion Rate in
case of the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth in
this paragraph (8). If any single action would require adjustment of the
Conversion Rate pursuant to more than one subparagraph of this paragraph (8),
only one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value.
(k) If the Corporation shall take any action affecting the
Common Stock, other than action described in this paragraph (8), that in the
opinion of the Board of Directors materially adversely affects the conversion
rights of the holders of the shares of 5% Preferred Stock, the Conversion Rate
may be adjusted, to the extent permitted by law, in such manner, if any, and at
such time, as the Board of Directors may determine to be equitable in the
circumstances; provided that the provisions of this paragraph (8)(k) shall not
affect any rights the holders of 5% Preferred Stock may have at law or in
equity.
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(l) (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of 5% Preferred Stock
not theretofore converted. For purposes of this paragraph (8)(l) the number of
shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of 5% Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.
(ii) The Corporation covenants that any shares of Common Stock
issued upon conversion of the 5% Preferred Stock shall be duly authorized,
validly issued, fully paid and non- assessable. Before taking any action that
would cause an adjustment increasing the Conversion Rate such that the quotient
of $1,000.00 and the Conversion Rate (which quotient initially shall be
$82.5593) would be reduced below the then-par value of the shares of Common
Stock deliverable upon conversion of the 5% Preferred Stock, the Corporation
will take any corporate action that, in the opinion of its counsel, may be
necessary in order that the Corporation may validly and legally issue fully paid
and non-assessable shares of Common Stock based upon such adjusted Conversion
Rate.
(iii) Prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the 5% Preferred
Stock, the Corporation shall comply with all applicable federal and state laws
and regulations which required action to be taken by the Corporation.
(m) 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 of the 5%
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 5% Preferred Stock to
be converted 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 satisfaction of the Corporation, that
such tax has been paid.
(n) No adjustment in the Conversion Rate need be made for a
transaction referred to in paragraph (8)(d)(i) through (v) above to the extent
that all holders of 5% Preferred Stock are entitled to participate in such
transaction pursuant to paragraph 4(b).
(9) Voting Rights. (a) The holders of record or shares of 5%
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (9) or as otherwise provided by law.
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(b) If and whenever either (i) six quarterly dividends
(whether or not consecutive) payable on the 5% Preferred Stock have not been
paid in full, (ii) the Corporation shall have failed to discharge its Mandatory
Redemption Obligation, or (iii) there occurs a Bankruptcy Event (any such event
described in the preceding subparagraphs (i) through (iii) being hereinafter
referred to as a "Trigger Event"), a vote of the holders of shares of 5%
Preferred Stock, voting as a single class, will be required on all matters
brought to shareholders of the Corporation. Whenever all arrears in dividends on
the 5% 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, the Corporation shall have fulfilled its
Mandatory Redemption Obligation, and all Bankruptcy Events shall have been cured
(the "Trigger Event Cure"), then the right of the holders of the 5% Preferred
Stock to vote as described in this paragraph 9(b) shall cease (but subject
always to the same provisions for the vesting of such voting rights if any
Trigger Event occurs).
(c) Upon the occurrence of any Trigger Event, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of 5% Preferred Stock, together with the holders of shares
of every other series of preferred stock (including, without limitation,
Additional Preferred) upon which like rights to vote for the election of two
additional directors have been conferred and are exercisable (resulting from
either the failure to pay dividends or the failure to redeem) (any such other
series is referred to as the "Preferred Shares"), voting as a single class
regardless of series, shall be entitled to elect the two 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 5%
Preferred Stock and the Preferred Shares, called as hereinafter provided.
Whenever all arrears in dividends on the Preferred Shares 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, the Corporation
shall have fulfilled any redemption obligation in respect of the Preferred
Shares, and the Trigger Event Cure has occurred, then the right of the holders
of the 5% Preferred Stock and the Preferred Shares to elect such additional two
directors shall cease (but subject always to the same provisions for the vesting
of such voting rights if any Trigger Event occurs), and the terms of office of
all persons elected as directors by the holders of 5% Preferred Stock and the
Preferred Shares shall forthwith terminate and the number of members of the
Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in holders of shares of 5% Preferred Stock and
the Preferred Shares, the Secretary of the Corporation may, and upon the written
request of any holder of 5% Preferred Stock (addressed to the secretary at the
principal office of the Corporation) shall, call a special meeting of the
holders of the 5% Preferred Stock and of the Preferred Shares for the election
of the two 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 of the Corporation within 20 days after receipt of any such request,
then any holder of shares of 5% 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
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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 5% Preferred Stock and the Preferred Shares, a successor shall be
elected by the Board of Directors, upon the nomination of the then-remaining
director elected by the holders of the 5% Preferred Stock and the Preferred
Shares 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 provided above.
(d) Without the written consent of the holders of at least
662/3% in liquidation preference of the outstanding shares of 5% Preferred Stock
or the vote of holders of at least 662/3% in liquidation preference of the
outstanding shares of 5% Preferred Stock at a meeting of the holders of 5%
Preferred Stock called for such purpose, the Corporation will not amend, alter
or repeal any provision of the Certificate of Incorporation (by merger or
otherwise) so as to adversely affect the preferences, rights or powers of the 5%
Preferred Stock; provided that any such amendment that changes the dividend
payable on, the Conversion Rate with respect to, or the liquidation preference
of the 5% Preferred Stock shall require the affirmative vote at a meeting of
holders of 5% Preferred Stock called for such purpose or written consent of the
holder of each share of 5% Preferred Stock.
(e) Without the written consent of the holders of at least
662/3% in liquidation preference of the outstanding shares of 5% Preferred Stock
or the vote of holders of at least 662/3% in liquidation preference of the
outstanding shares of 5% Preferred Stock at a meeting of such holders called for
such purpose, the Corporation will not issue any additional 5% Preferred Stock
or create, authorize or issue any Parity Securities or Senior Securities or
increase the authorized amount of any such other class or series; provided that
this paragraph 9(e) shall not limit the right of the Corporation to (i) issue
Additional Preferred as dividends pursuant to paragraph 4 or (ii) to issue
Parity Securities or Senior Securities in order to refinance, redeem or refund
the 13% Preferred, provided that the maximum accrual value (i.e., the sum of
stated value and maximum amount payable in kind over the term from issuance to
first date of mandatory redemption or redemption at the option of the holder) of
such Parity Securities may not exceed the maximum accrual value of the 13%
Preferred.
(f) In exercising the voting rights set forth in this
paragraph (9), each share of 5% Preferred Stock shall have one vote per share,
except that when any other series of preferred stock shall have the right to
vote with the 5% Preferred Stock as a single class on any matter, then the 5%
Preferred Stock and other series shall have with respect to such matters one
vote per $1,000 of stated liquidation preference. Except as otherwise required
by applicable law or as set forth herein, the shares of 5% Preferred Stock shall
not have any relative, participating, optional or other special voting rights
and powers and the consent of the holders thereof shall not be required for the
taking of any corporate action.
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(g) Nothing in this paragraph (9) shall be in derogation of
any rights that a holder of shares of 5% Preferred Stock may have in his
capacity as a holder of shares of Common Stock.
(10) General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are for
convenience of reference only and shall not define, limit or affect any of the
provisions hereof.
(b) If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) hereof or shall have failed to
discharge any obligation to redeem shares of 5% Preferred Stock pursuant to
paragraph (6) hereof, the holders of shares of 5% Preferred Stock shall be
entitled to receive, in addition to all other amounts required to be paid
hereunder, when, as and if declared by the Board of Directors, out of funds
legally available for the payment of dividends, cash dividends on the aggregate
dividends which the Corporation shall have failed to declare or pay or the
redemption price, together with accrued and unpaid dividends thereon, as the
case may be, at a rate of 2% per quarter, compounded quarterly, for the period
during which the failure to pay dividends or failure to discharge an obligation
to redeem shares of 5% Preferred Stock shall continue.
(c) The shares of 5% Preferred Stock shall bear the following
legend:
THE SHARES OF PREFERRED STOCK, PAR VALUE $.01, OF THE
CORPORATION (THE "PREFERRED STOCK") (AND THE SHARES OF COMMON
STOCK, PAR VALUE $.01, OF THE CORPORATION (THE "COMMON STOCK")
INTO WHICH THE PREFERRED STOCK MAY BE CONVERTED) REPRESENTED
BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD IN THE UNITED
STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT") AND ANY APPLICABLE STATE SECURITIES
LAWS OR AN APPLICABLE EXEMPTION FROM REGISTRATION
REQUIREMENTS. THE TRANSFER OF THE PREFERRED STOCK (OR COMMON
STOCK, IF THE PREFERRED STOCK HAS BEEN CONVERTED) EVIDENCED BY
THIS CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER
PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED JULY 15, 1999,
AS MAY BE AMENDED, AMONG THE CORPORATION AND FRANCE TELECOM, A
COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF THE
CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER
OF SUCH PREFERRED STOCK UPON WRITTEN REQUEST TO THE
CORPORATION.
THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE
MAY BE CONVERTED INTO COMMON STOCK, PAR VALUE $.01, OF THE
CORPORATION (THE "COMMON STOCK") OR
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REDEEMED IN EXCHANGE FOR COMMON STOCK WITHOUT THE SURRENDER
AND EXCHANGE OF THIS CERTIFICATE FOR CERTIFICATES REPRESENTING
SUCH COMMON STOCK. A NOTICE OF SUCH CONVERSION EVENT, IF ANY,
IS ON FILE AT THE EXECUTIVE OFFICES OF THE CORPORATION AND
WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS
CERTIFICATE UPON WRITTEN REQUEST TO THE CORPORATION.
The shares of Common Stock issuable upon conversion of the 5%
Preferred Stock shall bear the following legend:
THE SHARES OF COMMON STOCK, PAR VALUE $.01, OF THE CORPORATION
(THE "COMMON STOCK") REPRESENTED BY THIS CERTIFICATE MAY NOT
BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND
ANY APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
EXEMPTION FROM REGISTRATION REQUIREMENTS. THE TRANSFER OF THE
COMMON STOCK EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE
RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE PURCHASE
AGREEMENT, DATED JULY 15, 1999, AS MAY BE AMENDED, AMONG THE
CORPORATION AND FRANCE TELECOM, A COPY OF WHICH IS ON FILE AT
THE EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE FURNISHED
WITHOUT CHARGE TO THE HOLDER OF SUCH COMMON STOCK UPON WRITTEN
REQUEST TO THE CORPORATION.
(d) (i) Whenever in connection with any conversion or
redemption of the 5% Preferred Stock in exchange for Common Stock the holder is
required to surrender certificates representing such shares of 5% Preferred
Stock, such holder may, by written notice to the Corporation and its transfer
agent, elect to retain such certificates. In such case, the certificates so
retained by the holder thereof shall be deemed to represent, at and from the
date of such conversion or redemption, the number of shares of Common Stock
issuable upon such conversion or redemption (subject to paragraph (8)(c), if
applicable), and shall be so reflected upon the books of the Corporation and its
transfer agent.
(ii) (A) A holder who has previously elected to retain
certificates representing the 5% Preferred Stock in accordance with paragraph
(10)(d)(i) upon conversion or redemption may subsequently elect to receive
certificates representing the shares of Common Stock issued upon such conversion
or redemption. To receive certificates representing such shares of Common Stock,
the holder of such certificate shall surrender it, duly endorsed or assigned to
the Corporation or in blank, at the office of the Corporation, or to any
transfer agent of the
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Corporation previously designated by the Corporation for such purposes, with a
written notice of that election.
(B) Unless the certificates to be issued shall be registered
in the same name as the name in which such surrendered certificates are
registered, each certificate so surrendered shall be accompanied by instruments
of transfer, in form satisfactory to the Corporation, duly executed by the
holder or the 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). All certificates so
surrendered shall be canceled by the Corporation or the transfer agent.
(C) As promptly as practicable after the surrender by a holder
of such certificates, the Corporation shall issue and shall deliver to such
holder, or on the holder's written order, a certificate or certificates (which
certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the number of duly authorized, validly issued, fully paid and non-
assessable shares of Common Stock represented by the certificates so
surrendered.
(11) Shareholder Rights Plan. The shares of 5% Preferred Stock
shall be entitled to the benefits of a number of rights issuable under the
Rights Agreement, dated as of October 13, 1993, as amended, between the Company
and Continental Stock Transfer & Trust Company or any successor plan of similar
purpose and effect ("Rights") equal to the number of shares of Common Stock then
issuable upon conversion of the 5% Preferred Stock at the prevailing Conversion
Rate. Any shares of Common Stock deliverable upon conversion of a share of 5%
Preferred Stock or upon payment of a dividend shall be accompanied by a Right."
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IN WITNESS WHEREOF, NTL Incorporated has caused this
Certificate of Designation to be signed by the undersigned this 31st day of
March, 2000.
NTL Incorporated
By: /s/ Richard J. Lubasch
----------------------
Name: Richard J. Lubasch
Title: Executive Vice President, General
Counsel and Secretary
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