UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D/A
(Amendment No. 2)
Under the Securities Exchange Act of 1934
NTL Incorporated
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(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 Dauvillaire
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) 44-44-84-72
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(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
January 22, 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 -------------------------------------------------------
8. Beneficially Shared Voting Power
Owned
By 16,118,673 shares of Common Stock
- ----- Each -------------------------------------------------------
9. Reporting Person Sole Dispositive Power
With
0
- ----- -------------------------------------------------------
10. Shared Dispositive Power
16,118,673 shares of Common Stock
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
16,118,673 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)
13.96% 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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<PAGE>
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. Citizenship or Place of Organization
France
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7. Sole Voting Power
0
- ----- Number of Shares -------------------------------------------------------
8. Beneficially Shared Voting Power
Owned
By 16,118,673 shares of Common Stock
- ----- Each -------------------------------------------------------
9. Reporting Person Sole Dispositive Power
With
0
- ----- -------------------------------------------------------
10. Shared Dispositive Power
16,118,673 shares of Common Stock
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
16,118,673 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)
13.96% 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. 2 (the "Amendment") amends and supplements the joint
statement on Schedule 13D filed on August 25, 1999, previously amended and
supplemented by Amendment No. 1 on October 26, 1999 (as amended and
supplemented, the "Schedule 13D"), of France Telecom S.A., a societe anonyme
organized under the laws of France ("FT") and Compagnie Generales des
Communications (COGECOM) S.A. ("COGECOM"), a societe anonyme organized under the
laws of France and a wholly owned subsidiary of FT, 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) the
purchase by COGECOM OF 232,000 5 3/4% Convertible Subordinated Notes due 2009
(the "5 3/4% Convertible Notes"), which will become convertible after March 21,
2000, (ii) the issuance by the Issuer to COGECOM of 9,437.50 shares of 5%
Cumulative Participating Convertible Preferred Stock, Series D (the "Series D
Preferred Stock"), as a dividend on the Series A Preferred Stock beneficially
owned by FT and COGECOM and (iii) the purchase by COGECOM of 82,439 shares of
Common Stock from certain shareholders of the Issuer pursuant to the Purchase
Agreement, dated as of November 1, 1999 (the "Second Selling Shareholder
Purchase Agreement"), among Robert M. Kavner ("Mr. Kavner"), Arnold Glimcher
("Mr. Glimcher"), DCI Capital Partners, a California General Partnership, and
COGECOM. Accordingly, the number of shares beneficially owned by FT and COGECOM
has been amended to give effect to such issuance and purchases.
Item 1. Security and Issuer
Item 1 is hereby amended by adding the following paragraph:
On January 3, 2000, the Issuer issued to COGECOM 9,437.50 shares
of Series D Preferred Stock as a dividend with respect to the Series A Preferred
Stock beneficially owned by FT and COGECOM. Each share of the Series D Preferred
Stock is convertible into 9.811136 shares of Common Stock, at anytime at the
option of the holder thereof.
On December 22, 1999, COGECOM purchased 232,000 5 3/4%
Convertible Notes for a total purchase price of $232,000,000. The 5 3/4%
Convertibles Notes are convertible into shares of Common Stock at any time after
March 21, 2000, at a conversion price of $135.23 per share.
On November 1, 1999, COGECOM purchased additional 82,439 shares
of Common Stock from Messrs. Kavner and Glimcher pursuant to the Second
Selling Shareholder Purchase Agreement.
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Item 2. Identity and Background
Item 2 is hereby amended by attaching an amended and restated
Schedule I hereto.
Item 3. Source and Amount of Funds or Other Consideration
Item 3 is hereby amended by adding the following paragraph:
FT has provided the funds for the purchase by COGECOM of the
shares of Common Stock pursuant to the Second Selling Shareholder Purchase
Agreement and the 5 3/4% Convertible Notes from cash on hand.
Item 4. Purpose of Transaction
Item 4 is hereby amended by adding the following paragraphs:
FT has caused COGECOM to purchase the 5 3/4% Convertible Notes to
further strengthen its exposure in the markets in which the Issuer operates,
to provide the Issuer with additional financial resources to pursue its
strategy, and to enjoy a return upon its investment.
Pursuant to the Selling Shareholder Purchase Agreement,
COGECOM has purchased shares from certain shareholders of NTL (the "Sellers").
Sale of such shares was subject to certain restrictions contained in the
Registration Rights Agreement (the "Registration Rights Agreement"), dated as of
March 8, 1999, among NTL and the shareholders listed therein (the
"Shareholders"). To enable the Sellers to complete the sale of their shares
pursuant the Selling Shareholder Purchase Agreement in compliance with the
Sellers' obligations under the Registration Rights Agreement, COGECOM extended
to the Shareholders an offer to purchase a certain number of shares of Common
Stock of the Shareholders which were subject to the Registration Rights
Agreement. Messrs Kavner and Glimcher were the only Shareholders who exercised
their right to sell their shares of Common Stock. The Second Selling Shareholder
Purchase Agreement effectuates the sale of Messrs Kavner's and Glimcher's shares
to COGECOM.
Item 5. Interest in Securities of the Issuer
Item 5 is hereby amended and restated as follows:
(a) On January 27, 2000, FT and COGECOM were the joint beneficial
owners of 16,118,673 shares of Common Stock (assuming conversion of the Series A
Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock and
the 5 3/4% Convertible Notes), which represents approximately 13.96% of the
Common Stock outstanding. This percentage is calculated on the basis of
115,471,669 shares, a sum of 106,113,814 shares of Common Stock outstanding as
of January 26, 2000, a figure that the Issuer has provided to FT and COGECOM;
7,549,668 shares of Common Stock, the number of shares of Common Stock issuable
to COGECOM upon conversion of the
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Series A Preferred Stock and the Series C Preferred Stock; 92,592, the number of
shares of Common Stock issuable to COGECOM upon conversion of the Series D
Preferred Stock; and 1,715,595, the number of shares of Common Stock issuable to
COGECOM upon conversion of the 5 3/4% Convertible Notes.
(b) FT and COGECOM share the power to vote and the power to
dispose of all such 16,118,673 shares of Common Stock.
(c) On January 3, 1999, the Issuer paid a dividend on the Series
A Preferred Stock to COGECOM. The Issuer paid this dividend by issuing 9,437.50
shares of Series D Preferred Stock to COGECOM. Each such share of Series D is
convertible into 9.811136 shares of Common Stock. A copy of the certificate of
designation for the Series D Preferred Stock is attached hereto as Exhibit 10.3
and incorporated by reference herein. On December 22 1999, COGECOM purchased
232,000 5 3/4% Convertible Notes, for a total purchase price of $232,000,000.
The 5 3/4% Convertible Notes are convertible into shares of Common Stock at a
conversion price of $135.23 per share. On November 1, 1999, COGECOM purchased
82,439 shares of Common Stock from certain shareholders of the Issuer pursuant
to the Second Selling Shareholder Purchase Agreement. A copy of the Second
Selling Shareholder Purchase Agreement is attached hereto as Exhibit 10.4 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 of the
Schedule 13D, effected any transactions in Common Stock, Series A Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock or 5 3/4% Convertible
Notes during the past sixty days.
(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 or 5 3/4% Convertible Notes 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 the
paragraphs set forth in item 4 above and the descriptions of the Second Selling
Shareholder Purchase Agreement and the 5 3/4% Convertible Notes that are set
forth in Item 5(c) above.
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<PAGE>
Item 7. Material to be Filed as Exhibits
Item 7 is hereby amended to include the following exhibits,
attached hereto:
Exhibit 10.3
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 D of the Issuer.
Exhibit 10.4
Purchase Agreement, made as of November 1, 1999, between and
among Robert M. Kavner, Arnold Glimcher, DCI Capital Partners and COGECOM.
Exhibit 10.5
Joing Filing Agreement, dated as of January 31, 2000, between
France Telecom S.A. and Compagnie Generale des Communications (COGECOM) S.A.
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<PAGE>
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: January 31, 2000
France Telecom S.A.
By: /s/ Jean-Louis Vinciguerra
---------------------------------------
Name: Jean-Louis Vinciguerra
Title: Senior Executive Vice President
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<PAGE>
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: January 31, 2000
Compagnie Generale des
Communications (COGECOM) S.A.
By: /s/ Pierre Dauvillaire
---------------------------------------------
Name: Pierre Dauvillaire
Title: Chairman of the Board of Directors
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<PAGE>
Schedule I
Directors and Executive Officers of France Telecom S.A.
1. Board of Directors
Christophe AGUITON Pascal COLOMBANI
Employee, France Telecom Director of Technology, Ministry of
6 place d'Alleray Education, Research and Technology
75505 Paris Cedex 15 110 rue Grenelle
France 75007 Paris
France
Jean-Paul BECHAT Jean-Francois DAVOUST
Chairman and Chief Executive Officer, Employee, France Telecom
SNECMA 6 place d'Alleray
2 Boulevard General Martial Valin 75505 Paris Cedex 15
75015 Paris France
France
Christophe BLANCHARD-DIGNAC Jean-Pierre DELEZENNE
Budget Director, Employee, France Telecom
Ministry of the Economy, Finance and 6 place d'Alleray
Industry 75505 Paris Cedex 15
Direction du Budget France
139 rue de Bercy
75572 Paris Cedex 12
France
Michel BON Yannick d'ESCATHA
Chairman and Chief Executive Officer, Director of French Atomic Energy
France Telecom Commission
France Telecom 31-33 rue de la Federat
6 place d'Alleray 75752 Paris Cedex 15
75505 Paris Cedex 15 France
France
Jean-Claude DESRAYAUD
Employee, France Telecom
6 place d'Alleray
75505 Paris Cedex 15
France
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<PAGE>
Raymond DURAND Didier LOMBARD
Employee, France Telecom French Envoy for International
6 place d'Alleray Investments, Ministry of the Economy,
75505 Paris Cedex 15 Finance and Industry
France 139 rue de Bercy
75572 Paris Cedex 12
France
Pierre GADONNEIX Simon NORA
President, Gaz de France Honorary Inspector General of Finance
23 rue Philibert Delorme 6 place d'Alleray
75017 Paris 75505 Paris Cedex 15
France France
Nadine GRANDMOUGIN Pierre PEUCH
Employee, France Telecom Employee, France Telecom
6 place d'Alleray 6 Place d'Alleray
75505 Paris Cedex 15 75505 Paris Cedex 15
France France
Francois GRAPPOTTE Jean SIMONIN
Chairman and Chief Executive Officer, Managing Director,
LEGRAND Residential Agency of Toulouse
128 avenue du Marechal de Lattre de 108 rue de la Peripole
Tassigny BP 5856
87045 Limoges Cedex 31506 Toulouse Cedex
France France
Nicolas JACHIET Ron SOMMER*
Head of Investment Monitoring Division, Chairman
Treasury Department, Ministry of the Deutsche Telekom AG
Economy, Finance and Industry Postfach 20 00
139 rue de Bercy 53105 Bonn
75572 Paris Cedex 12 Germany
France * A citizen of Germany
Jacques de LAROSIERE
Advisor to Paribas
6 place d'Alleray
75505 Paris Cedex 15
France
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<PAGE>
2. Executive Officers
Michel BON Gerard MOINE
Chairman and Chief Executive Officer Public and Regulatory Affairs
France Telecom France Telecom
6 place d'Alleray 6 place d'Alleray
75505 Paris Cedex 15 75505 Paris Cedex 15
France France
Jacques BURILLON Marie-Claude PEYRACHE
Secretary Corporate Communications
France Telecom France Telecom
6 place d'Alleray 6 place d'Alleray
75505 Paris Cedex 15 75505 Paris Cedex 15
France France
Jacques CHAMPEAUX Jean-Francois PONTAL
Large Business Division Residential and Small Business, Division
France Telecom France Telecom
6 place d'Alleray 6 place d'Alleray
75505 Paris Cedex 15 75505 Paris Cedex 15
France France
Jean-Jacques DAMLAMIAN Jean-Louis VINCIGUERRA
Development Division Finance and Human Resources Division
France Telecom France Telecom
6 place d'Alleray 6 place d'Alleray
75505 Paris Cedex 15 75505 Paris Cedex 15
France France
Jean-Yves GOUIFFES
Network Division
France Telecom
6 place d'Alleray
75505 Paris Cedex 15
France
I - iii
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 D 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. 9,437.50 shares of the Preferred Stock of
the Corporation shall be designated as 5% Cumulative Participating Convertible
Preferred Stock, Series D (the "5% Preferred Stock") and no other shares of
Preferred Stock shall be designated as 5% Preferred Stock.
<PAGE>
(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
reported by the Nasdaq as furnished by any member in good standing of
the National
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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 March 31, 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.
"5 1/4% Preferred" shall have the meaning set forth in
paragraph (3)(d) hereof.
"5 1/4% Series A" shall have the meaning set forth in
paragraph (3)(d) 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
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<PAGE>
such holders, and (ii) the amount that would be received in liquidation
following conversion of a share of 5% Preferred Stock into Common
Stock.
"Major Entity" shall mean any of the Corporation, NTL
Communications Corp., Diamond Cable Communications Limited, Diamond
Holdings Limited, NTL (Bermuda) Limited 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 A Preferred" shall have the meaning set forth in
paragraph (3)(d) hereof.
"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.
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<PAGE>
"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.
"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.
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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 (i) the 13% Series B Senior Redeemable Exchangeable
Preferred Stock (the "13% Preferred") and (ii) the 5 1/4% Convertible Preferred
Stock, Series A, (the "5 1/4% Series A") and any dividends paid on the 5 1/4%
Series A in accordance with its terms, to the extent that such dividends are
paid in preferred stock having terms substantially identical to the 5 1/4%
Series A and any dividends paid on preferred stock issued as in-kind dividends
thereon, to the extent such dividends are paid in preferred stock having terms
substantially identical to the 5 1/4% Series A (the 5 1/4% Series A and all such
in-kind dividends being hereinafter referred to as the "5 1/4% Preferred") is a
Senior Security. Each of the 9.9% Non-Voting Mandatorily Redeemable Preferred
Stock, Series A ("9.9% Series A Preferred"), and 9.9% Non-Voting Mandatorily
Redeemable Preferred Stock, Series B ("9.9% Series B Preferred"), is a Junior
Security. The 5% Cumulative Participating Convertible Preferred Stock, Series A,
the 5% Cumulative Participating Convertible Preferred Stock, Series C, 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
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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.
(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
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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).
(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
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<PAGE>
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(c) of the 9.9% Series A Preferred and 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 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
$150.00 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
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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 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.
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(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 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).
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(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 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 9.811136, 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
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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 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.
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(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 (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
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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.
(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
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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
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
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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 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.
(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.
(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
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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 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.
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(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.
(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
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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 $101.9250) 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.
(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
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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 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
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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 or the 5 1/4% 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 or the 5 1/4% Preferred, respectively.
(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.
(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.
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(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 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.
25
<PAGE>
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 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.
26
<PAGE>
(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."
27
<PAGE>
IN WITNESS WHEREOF, NTL Incorporated has caused this Certificate of
Designation to be signed by the undersigned this 30th day of December, 1999.
NTL Incorporated
By: /s/ Richard J. Lubasch
---------------------------------------
Name: Richard J. Lubasch
Title: Executive Vice President, General
Counsel and Secretary
28
PURCHASE AGREEMENT, made as of the 1st day of November, 1999
BETWEEN AND AMONG
(1) Robert M. Kavner ("Kavner") and Arnold Glimcher ("Glimcher"), each of
whom is a shareholder of NTL Incorporated (Kavner and Glimcher are
collectively referred to herein as the "Sellers");
(2) DCI Capital Partners, a California general partnership ("DCI"); and
(3) Compagnie Generale des Communications (COGECOM) S.A. ("Cogecom"), a
company registered in France and having its registered office at 6
Place d'Alleray, 75505 Paris Cedex 15, France, and a wholly owned
subsidiary of France Telecom S.A. (the Sellers, DCI and Cogecom are
hereinafter referred to as the "Parties").
WHEREAS
In reply to a Private Sale Notice (as defined in Section 2.7 of
the registration rights agreement, dated March 8, 1999, by and among
the Company, DCI, and the other parties thereto (the "Registration
Rights Agreement")), dated October 23, 1999, the Sellers exercised
their right to sell to Cogecom an aggregate of 82,439 shares of common
stock, par value $0.01 per share (the "Additional Tag Along Shares") of
NTL Incorporated (the "Company"), a Delaware corporation having its
principal executive office at 110 East 59th Street, New York, NY 10022;
WHEREAS
The Sellers desire to sell to Cogecom and Cogecom, subject to the terms
and conditions set out in this Agreement, desires to purchase from the
Sellers, the Additional Tag Along Shares, at a price per Additional Tag
Along Share as set forth below and otherwise on the terms set out in
this Agreement;
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. Purchase and Sale.
On and subject to the terms and conditions of this Agreement, the
Sellers hereby severally agree to sell to Cogecom that number of the
Additional Tag Along Shares listed opposite its name in Section 3
hereof, and Cogecom agrees to purchase all of such Additional Tag Along
Shares, at the purchase price set out below, free from any and all
pledges, liens, security interests or other encumbrances.
<PAGE>
2. Settlement.
(A) November 2, 1999 at 5:00 p.m. (New York time) shall be the
settlement date for the sale of (i) 61,997 Additional Tag
Along Shares by Kavner and (ii) 4,943 Additional Tag Along
Shares by Glimcher (the "First Settlement Date").
(B) At the request of Kavner, the settlement for the sale of
15,499 Additional Tag Along Shares by Kavner shall be on the
first business day that a certificate evidencing such shares
is issued by the transfer agent of the Company (the "Second
Settlement Date").
(C) On each Settlement Date, the Sellers shall cause to be
delivered to Cogecom certificates representing the Additional
Tag Along Shares in the manner agreed by the Parties against
payment in full made in accordance with Section 3.
3. Purchase Price.
The purchase price per share to be paid by Cogecom for the Additional
Tag Along Shares shall be $68.50 per Additional Tag Along Share, to be
paid by wire transfer to accounts of the Sellers by Cogecom, as
follows:
<TABLE>
<CAPTION>
Number
Seller Certificate No. Settlement Date of Shares Purchase Price
<S> <C> <C> <C> <C>
Kavner CT 2556 First Settlement Date 61,997 $4,246,794.50
Kavner CT 3191* Second Settlement 15,499 $1,061,681.50
Date
Glimcher CT 3096 First Settlement Date 989 $67,746.50
Glimcher CT 2571 First Settlement Date 3,954 $270,849.00
======= =============
82,439 $5,647,071.50
</TABLE>
- ----------
* Replacement certificate to be issued by transfer agent.
4. Representations, Warranties and Undertakings.
(A) Kavner hereby makes the representations, warranties and
undertakings set forth in Annex I hereto as of the date hereof
and as of the First Settlement Date and the Second Settlement
Date.
2
<PAGE>
(B) Glimcher hereby makes the representations, warranties and
undertakings set forth in Annex I hereto as of the date hereof
and as of the First Settlement Date.
(C) Cogecom makes to each of the Sellers the representations,
warranties and undertakings set forth in Annex II hereto as of
the date hereof and as of the First Settlement Date and the
Second Settlement Date.
(D) DCI makes to Cogecom the representations, warranties and
undertakings set forth in Annex III hereto as of the date
hereof and as of the First Settlement Date and the Second
Settlement Date.
(E) The Sellers, DCI and Cogecom shall each notify the others
forthwith if, on or prior to the First Settlement Date (and,
in the case of Kavner, Cogecom and DCI, the Second Settlement
Date), any of their respective representations, warranties,
undertakings or agreements set out in Annex I, Annex II or
Annex III hereto ceases to be true and accurate or becomes
misleading in any respect or that there has been any breach of
any of such representations, warranties, undertakings or
agreements.
5. Miscellaneous.
The Parties each undertake to execute all such documents and do all
such acts and things as the other may reasonably require in order to
give effect to the terms of this Agreement and to enable the sale and
purchase of the Additional Tag Along Shares to be carried out and given
full force and effect.
The representations, warranties, agreements and undertakings in this
Agreement shall continue in full force and effect despite any
completion of the purchase and sale of the Additional Tag Along Shares
under this Agreement.
The Sellers agree that, except as otherwise specifically contemplated
in this Agreement, no press release or similar public announcement or
communication will be made by them concerning the execution,
performance or terms of this Agreement unless specifically approved in
advance and in writing by Cogecom.
6. Expenses.
Each party to this Agreement shall pay all of its expenses in
connection with this Agreement and the transactions contemplated
hereby.
3
<PAGE>
7. Notices.
(A) Any notice to be given under this Agreement shall be in
writing and shall be delivered to or sent by facsimile
transmission, to the respective numbers set out in sub-clause
(B) below. Any such notice shall be deemed served on the
business day of actual receipt; where actual receipt occurs on
a day which is a Saturday, Sunday or bank holiday the
effective date of service shall be the first business day
following the date of actual receipt or, if earlier, the date
upon which receipt shall have been acknowledged.
(B) The respective addresses and facsimile numbers of the Parties
are as follows:
The Sellers: Robert M. Kavner
20680 Leonard Road
Saratoga, CA 95070
Telecopy No.: (408) 867-9853
Arnold Glimcher
435 East 52nd Street
New York, NY 10022
Telecopy No.: (212) 421-0835
Cogecom: 212, rue Raymond Losserand
75505 Paris Cedex 15
France
Attention: Philippe McAllister
Telecopy No.: 331-4444-2154
Attention: Olivier Froissart
Telecopy No.: 331-4444-7799
With a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: Alfred Ross
Telecopy No.: 1-212-848-4051
4
<PAGE>
DCI: 9830 Wilshire Boulevard
Beverly Hills, CA 90212
Telecopy No.: 1-213-617-1806
Attention: Dede Robbins
8. Entire Agreement.
This Agreement embodies the entire understanding of the Parties and
there are no other agreements or understandings, written or oral, in
effect between Parties relating to the subject matter hereof. This
Agreement may be amended or modified only by an instrument executed by
the Parties.
9. Successors and Assigns.
No Party hereto may assign this Agreement without the prior written
consent of the others provided that Cogecom may assign this Agreement
to any of its affiliates provided that it will remain responsible for
performance under this Agreement. Any impermissible attempted
assignment of this Agreement without such prior written consent shall
be void. This Agreement and the provisions thereof shall be binding
upon and inure to the benefit of the Parties and their permitted
successors and assigns.
10. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
11. Counterparts.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
5
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed as
of the day and year first before written.
COMPAGNIE GENERALE DES COMMUNICATIONS (COGECOM) S.A.
By:
------------------------------
Name: Pierre Dauvillaire
Title: Chairman of the Board of Directors
By:
------------------------------
Name:
Title:
ROBERT M. KAVNER
- ------------------------------
ARNOLD GLIMCHER
- ------------------------------
DCI CAPITAL PARTNERS
By:
------------------------------
Name: Michael Ovitz
Title: General Partner
6
<PAGE>
ANNEX I
Sellers Several Representations, Warranties and Undertakings
Each of the Sellers severally hereby represents, warrants and undertakes to
COGECOM with respect to himself, that:
1. he has full power to enter into and perform this Agreement; all
necessary authorizations, approvals, consents and licenses to permit
him to enter into and perform this Agreement have been obtained and are
in full force and effect; the execution and delivery by such Seller of,
and the performance by such Seller of, this Agreement will not
contravene any provision of applicable law, any agreement or other
instrument binding upon such Seller or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over such
Seller or any of his assets, and no consent, approval, authorization or
order of, or qualification or filing with, any governmental body or
agency is required for the performance by such Seller of his
obligations under this Agreement, except such as have already been
obtained and are in full force and effect; and this Agreement has been
duly authorized, executed and delivered by such Seller and is a valid
and binding agreement of such Seller enforceable in accordance with its
terms;
2. such Seller has valid title free and clear of all security interests,
liens, encumbrances, equities or other claims to, and the legal right
and power to sell and transfer the Additional Tag Along Shares, and
transfer of such Additional Tag Along Shares to Cogecom will pass title
to such shares, free and clear of all security interests, liens,
encumbrances, equities or other claims; and
3. such Seller is, directly or indirectly, an investor in DCI and has
received distributions of the Additional Tag Along Shares from DCI in
the past as a result of a distribution, transfer and assignment in full
compliance with the requirements of (i) Section 10(j) of the
Registration Rights Agreement and (ii) applicable laws, governmental
orders, rules and regulations including, without limitation, the United
States Securities Act of 1933, as amended and the rules and regulations
thereunder (the "Securities Act") and, therefore, such Seller is a "Y
Holder" (as that term is defined in the Registration Rights Agreement).
<PAGE>
ANNEX II
Cogecom Representations, Warranties, and Undertakings
Cogecom hereby represents, warrants and agrees for the benefit of the Sellers
that:
1. it has full corporate power, and all authorizations, approvals,
consents and licenses required by it, to permit it to enter into and
perform this Agreement have been obtained and are in full force and
effect; the execution and delivery by it of, and the performance by it
of, this Agreement will not contravene its constitutional documents,
any provision of applicable law any agreement or other instrument
binding upon it or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over it or any of its assets,
and no consent, approval, authorization or order of, or qualification
or filing with, any governmental body or agency is required for the
performance by it of its obligations under this Agreement, except such
as have already been obtained and are in full force and effect; and
this Agreement has been duly authorized, executed and delivered by it
and is a valid and binding agreement of it; the purchase of the
Additional Tag Along Shares by Cogecom will not require notification
under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976;
2. the Additional Tag Along Shares have not been and, in connection with
the purchase of the Additional Tag Along Shares by Cogecom, will not be
registered under the Securities Act; as a result the Additional Tag
Along Shares will be "restricted securities" within the meaning of Rule
144 under the Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons
except in a transaction exempt from, or not subject to, the
registration requirements of the Securities Act;
3. it is an institutional "accredited investor" within the meaning of Rule
501(a)(1),(2),(3) or (7) under the Securities Act; as a purchaser in a
private placement of securities which have not been registered under
the Securities Act, it is purchasing Additional Tag Along Shares for
its own account without a view to any resale or distribution thereof;
it has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of its decision to
invest in the Additional Tag Along Shares, and it has the financial
ability to bear the economic risk of its investment in the Additional
Tag Along Shares; and it acknowledges that it has had access to such
information as it deems necessary and has made its own investigation to
the extent it deems necessary in connection with its decision to
purchase the Additional Tag Along Shares; and
4. it agrees that the certificates evidencing the Additional Tag Along
Shares currently bear a legend and certificates delivered to it will
continue to bear a legend evidencing the restrictions.
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT,
COGECOM MAKES NO REPRESENTATIONS OR WARRANTIES, AND HEREBY DISCLAIMS ANY SUCH
REPRESENTATIONS OR WARRANTIES, WHETHER BY
<PAGE>
IT OR ANY OF ITS OFFICERS, DIRECTORS, PARTNERS, EMPLOYEES, AGENTS OR
REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT,
THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE COMPANY.
<PAGE>
ANNEX III
DCI Representations, Warranties, and Undertakings
DCI hereby represents, warrants and undertakes to COGECOM that:
1. it has full corporate power, and all authorizations, approvals,
consents and licenses required by it, to permit it to enter into and
perform this Agreement have been obtained and are in full force and
effect; the execution and delivery by DCI of, and the performance by
DCI of, this Agreement will not contravene the constitutional documents
of DCI, any provision of applicable law any agreement or other
instrument binding upon DCI or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over DCI or any
of its assets, and no consent, approval, authorization or order of, or
qualification or filing with, any governmental body or agency is
required for the performance by DCI of its obligations under this
Agreement, except such as have already been obtained and are in full
force and effect; and this Agreement has been duly authorized, executed
and delivered by DCI and is a valid and binding agreement of DCI
enforceable in accordance with its terms;
2. DCI is a "Y Holder", as such term is defined in the Registration Rights
Agreement; and
3. DCI is a California general partnership and has distributed,
transferred and assigned the Additional Tag Along Shares to Glimcher
and Kavner; (i) such distribution, transfer and assignment was in full
compliance with the requirements of the Registration Rights Agreement
and all applicable laws, governmental orders, rules and regulations,
including, without limitation, the Securities Act and the Securities
Exchange Act of 1934, as amended, and the rules and regulations
thereunder, and (ii) in connection such distribution, DCI has properly
and validly assigned its rights under the Registration Rights Agreement
to Glimcher and Kavner, pursuant to Section 10(j) of the Registration
Rights Agreement.
JOINT FILING AGREEMENT
The undersigned hereby agree that the Statement on Schedule
13D, dated August 25, 1999, as amended and supplemented by Amendment No. 1 on
October 26, 1999, and by Amendment No. 2 on January 31, 1999 (the "Schedule
13D"), with respect to the Common Stock, par value $0.01 per share, of NTL
Incorporated, is, and any amendments thereto executed by each of us shall be,
filed on behalf of each of us pursuant to and in accordance with the provisions
of Regulation 13D under the Securities and Exchange Act of 1934, as amended, and
that this Agreement shall be included as an Exhibit to the Schedule 13D and each
such amendment. Each of the undersigned agrees to be responsible for the timely
filing of the Schedule 13D and any amendments thereto, and for the completeness
and accuracy of the information concerning itself contained therein. This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the 31st day of January, 2000.
FRANCE TELECOM S.A.
By: /s/ Jean-Louis Vinciguerra
---------------------------------
Name: Jean-Louis Vinciguerra
Title: Senior Executive Vice President
COMPAGNIE GENERALE DES
COMMUNICATION (COGECOM) S.A.
By: /s/ Pierre Dauvillaire
---------------------------------------
Name: Pierre Dauvillaire
Title: Chairman of the Board of
Directors
