<PAGE>
EXHIBIT 3.3
Conformed Copy
Series C Preferred Stock
LIBERTY DIGITAL, INC.
CERTIFICATE OF DESIGNATIONS
_______________
SETTING FORTH A COPY OF A RESOLUTION
CREATING AND AUTHORIZING THE ISSUANCE
OF A SERIES OF PREFERRED STOCK DESIGNATED AS
"CONVERTIBLE PREFERRED STOCK, SERIES C"
ADOPTED BY THE BOARD OF DIRECTORS
OF LIBERTY DIGITAL, INC.
_______________
The undersigned, a Vice President of LIBERTY DIGITAL, INC., a Delaware
corporation (this "Corporation"), HEREBY CERTIFIES that the Board of Directors
of this Corporation on September 29, 2000, duly adopted the following
resolutions creating a new series of this Corporation's Series Preferred Stock:
"BE IT RESOLVED, that pursuant to authority expressly granted by the
provisions of Article IV, Section B of the Certificate of Incorporation of this
Corporation, the Board of Directors hereby creates and authorizes the issuance
of a new series of this Corporation's Series Preferred Stock, par value $.01 per
share ("Series Preferred Stock"), and hereby fixes the powers, designations,
dividend rights, voting powers, rights on liquidation, conversion rights,
redemption rights and other preferences and relative, participating, optional or
other special rights and the qualifications, limitations or restrictions of the
shares of such series (in addition to the powers, designations, preferences and
relative, participating, optional or other special rights and the
qualifications, limitations or restrictions thereof set forth in the Certificate
of Incorporation that are applicable to each class and series of this
Corporation's preferred stock, par value $.01 per share ("Preferred Stock")), as
follows:
1. Designation and Number. The designation of the series of Series
----------------------
Preferred Stock, par value $.01 per share, of this Corporation authorized hereby
is "Convertible Preferred Stock, Series C" (the "Series C Preferred Stock").
The number of shares constituting the Series C Preferred Stock shall be 150,000.
<PAGE>
2. Certain Definitions. Unless the context otherwise requires,
-------------------
the terms defined in this paragraph 2 shall, for all purposes of this
Certificate of Designations, have the meanings herein specified:
"Board of Directors": The Board of Directors of this Corporation and,
to the extent permitted by law, unless the context indicates otherwise, any
committee thereof authorized with respect to any particular matter to exercise
the power of the Board of Directors of this Corporation with respect to such
matter.
"Business Day: Any day other than a Saturday, Sunday or a day on which
banking institutions in Denver, Colorado are not required to be open.
"Capital Stock": Any and all shares, interests, participations or
other equivalents (however designated) of corporate stock of this Corporation.
"Closing Price": Of any security for any day, the last reported sale
price of such security regular way or, in case no such reported sale takes place
on such day, the average of the reported closing bid and asked prices regular
way, in either case on the composite tape, or if such security is not quoted on
the composite tape, on the principal United States securities exchange
registered under the Exchange Act on which such security is listed or admitted
to trading, or if such security is not listed or admitted to trading on any such
exchange, the last reported sale price (or the average of the quoted closing bid
and asked prices if there were no reported sales) on The Nasdaq Stock Market or
any comparable quotation system, or if such security is not quoted on The Nasdaq
Stock Market or any comparable system, the average of the closing bid and asked
prices as furnished by any member of the National Association of Securities
Dealers, Inc. selected from time to time by this Corporation for that purpose
or, in the absence of such quotations, such other method of determining market
value as the Board of Directors shall from time to time deem to be fair.
"Common Stock": The Common Stock, $.01 par value per share, of this
Corporation, and all series thereof now existing or hereafter created, including
the Series A Common Stock and the Series B Common Stock.
"Conversion Date": Of a share of Series C Preferred Stock, the date on
which the requirements for conversion of such Share set forth in paragraph 5(m)
have been satisfied by the holder thereof.
"Conversion Rate": The kind and amount of securities, cash or other
assets that as of any date are issuable or deliverable upon conversion of a
share of Series C Preferred Stock. The Conversion Rate of a Share of Series C
Preferred Stock shall initially be as set forth in paragraph 5(b), subject to
adjustment as set forth in paragraph 5 of this Certificate of Designations. In
the
2
<PAGE>
event that pursuant to paragraph 5 the Series C Preferred Stock becomes
convertible into more than one class or series of capital stock of this
Corporation, the term Conversion Rate, when used with respect to any such class
or series, shall mean the number or fraction of shares or other units of such
capital stock that as of any date would be issued upon conversion of a share of
Series C Preferred Stock.
"Convertible Securities": The Series A Convertible Securities and the
Series B Convertible Securities.
"Debt Instrument": Any bond, debenture, note, indenture, guarantee or
other instrument or agreement evidencing any Indebtedness, whether existing at
the Issue Date or thereafter created, incurred, assumed or guaranteed.
"Default": The occurrence of any of the following events:
(a) there shall be entered a decree or order for relief in respect of
the Corporation under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable federal or state bankruptcy law or
other similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator, or similar official of the Corporation or of any
substantial part of its properties, or ordering the winding-up or liquidation of
the affairs of the Corporation or an involuntary petition shall be filed against
the Corporation and a temporary stay entered, and (i) such petition and stay
shall not be diligently contested, or (ii) any such petition and stay shall
continue undismissed for a period of sixty (60) consecutive days; or
(b) the Corporation shall file a petition, answer, or consent seeking
relief under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable federal or state bankruptcy law or other
similar law, or the Corporation shall consent to the institution of proceedings
thereunder or to the filing of any such petition or to the appointment or taking
of possession of a receiver, liquidator, assignee, trustee, custodian,
sequestrator, or other similar official, of the Corporation or of any
substantial part of its properties, or the Corporation shall fail generally to
pay its debts as they become due, or shall take any action in furtherance of any
such action.
"Determination Date": For any issuance of rights or warrants or any
distribution to which paragraph 5(d) or 5(e) applies, the earlier of (i) the
record date for the determination of stockholders entitled to receive the rights
or warrants or the distribution to which such paragraph applies and (ii) the Ex-
Dividend Date for such rights, warrants or distribution.
3
<PAGE>
"Dividend Payment Date": The last day of each March, June, September
and December, commencing with December 31, 2000, or the next succeeding Business
Day if any such date is not a Business Day.
"Dividend Period": The period from and including October 1, 2000 to
but excluding the first Dividend Payment Date and, thereafter, each quarterly
period from and including a Dividend Payment Date to but excluding the next
Dividend Payment Date.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Exchange Offer": An issuer tender offer (within the meaning of Rule
13e-4(a)(2) of the rules and regulations promulgated by the Securities and
Exchange Commission under the Exchange Act, as such Rule is in effect on the
date hereof), including, without limitation, one that is effected through the
distribution of rights or warrants, made to holders of Series B Common Stock (or
to holders of other stock of this Corporation receivable by a holder of Shares
upon conversion thereof (or upon conversion of securities receivable by a holder
of Shares upon conversion of such Shares)), to issue stock of this Corporation
or of a Subsidiary of this Corporation and/or other property to a tendering
stockholder in exchange for shares of Series B Common Stock (or such other
stock) validly tendered pursuant to such issuer tender offer.
"Exchange Preferred Stock": A series of convertible preferred stock of
this Corporation, having terms, conditions, designations, dividend rights,
voting powers, rights on liquidation and other preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof that are identical, or as nearly so as is practicable in
the judgment of the Board of Directors, to those of the Series C Preferred Stock
for which such Exchange Preferred Stock is exchanged, except that (i) the
liquidation preference will be determined as provided in paragraph 5(h) or 5(i),
as applicable, (ii) the running of any time periods pursuant to the terms of the
Series C Preferred Stock shall be tacked to the corresponding time periods in
the Exchange Preferred Stock and (iii) the Exchange Preferred Stock will not be
convertible into, and the holders will have no conversion rights thereunder with
respect to, (x) in the case of a redemption of Redeemable Capital Stock, the
Redeemable Capital Stock redeemed, or the Redemption Securities issued, in the
Redemption Event, and (y) in the case of a Spin Off, the Spin Off Securities.
"Exchange Securities": Stock of this Corporation or of a Subsidiary of
this Corporation that is issued in exchange for shares of Series B Common Stock
(or other stock of this Corporation receivable by a holder of Shares upon
conversion thereof (or upon conversion of securities receivable by a holder of
Shares upon conversion of such Shares)) pursuant to an Exchange Offer ;
provided, however, that in the case of an Exchange Offer made to holders of
-------- -------
Series A Common Stock and Series B Common Stock, if the same kind and quantity
of stock is issued in exchange for shares of both Series A Common Stock and
Series B Common Stock or if stock of one
4
<PAGE>
class or series is issued in exchange for Series A Common Stock and the same
quantity of stock of a different class or series is issued in exchange for
Series B Common Stock and the differences between such classes or series are no
less favorable to the holders of Series B Common Stock than the differences
between the Series A Common Stock and the Series B Common Stock, then the
Exchange Securities shall be the stock issued in exchange for shares of Series B
Common Stock and not the stock issued in exchange for shares of Series A Common
Stock.
"Ex-Dividend Date": The date on which "ex-dividend" trading commences
for a dividend, an issuance of rights or warrants or a distribution to which
paragraph 5(c), 5(d) or 5(e) applies in the over-the-counter market or the
principal exchange on which the Series A Common Stock is then quoted or listed.
"Indebtedness": Any: (i) liability, contingent or otherwise, of this
Corporation (x) for borrowed money whether or not the recourse of the lender is
to the whole of the assets of this Corporation or only to a portion thereof),
(y) evidenced by a note, debenture or similar instrument (including a purchase
money obligation) given other than in connection with the acquisition of
inventory or similar property in the ordinary course of business, or (z) for the
payment of money relating to an obligation under a lease that is required to be
capitalized for financial accounting purposes in accordance with generally
accepted accounting principles; (ii) liability of others described in the
preceding clause (i) which this Corporation has guaranteed or which is otherwise
its legal liability; and (iii) obligations secured by a mortgage, pledge, lien,
charge or other encumbrance to which the property or assets of this Corporation
are subject whether or not the obligations secured thereby shall have been
assumed by or shall otherwise be this Corporation's legal liability.
"Issue Date": September 30, 2000, such date being the first date on
which any shares of the Series C Preferred Stock are first issued or deemed to
have been issued.
"Junior Securities": All shares of Series A Preferred Stock, Series A
Common Stock, Series B Common Stock, and any class or series of stock of this
Corporation, whether now existing or hereafter created, to the extent that it
ranks junior to the Series C Preferred Stock as to dividend rights or rights on
liquidation. A class or series of Junior Stock shall rank junior to the Series
C Preferred Stock as to dividend rights or rights on liquidation if the holders
of shares of Series C Preferred Stock shall be entitled to dividend payments or
payments of amounts distributable upon liquidation, dissolution or winding up of
the affairs of this Corporation, as the case may be, in preference or priority
to the holders of shares of such class or series.
"Liquidation Preference": Measured per Share of the Series C Preferred
Stock as of any date in question (the "Relevant Date") shall mean an amount
equal to the sum of (a) the Stated Value of such Share, plus (b) an amount equal
to all dividends accrued on such Share which pursuant
5
<PAGE>
to paragraph 3(c) of this Certificate of Designations have been added to and
remain a part of the Liquidation Preference as of the Relevant Date, plus (c)
for purposes of paragraph 4, paragraph 5(h), paragraph 5(i), paragraph 6 and
paragraph 7 of this Certificate of Designations and the definition of Redemption
Price, an amount equal to all unpaid dividends accrued on the sum of the amounts
specified in clauses (a) and (b) above during the period from and including the
immediately preceding Dividend Payment Date (or October 1, 2000 if the Relevant
Date is on or prior to the first Dividend Payment Date) to but excluding the
Relevant Date, and, in the case of clauses (b) and (c) hereof, whether or not
such unpaid dividends have been declared or there are any unrestricted funds of
the Corporation legally available for the payment of dividends. In connection
with the determination of the Liquidation Preference of a Share of Series C
Preferred Stock upon redemption, or upon liquidation, dissolution or winding up
of the Corporation or upon a conversion of Shares, the Relevant Date shall be
the applicable date of redemption or the date of distribution of amounts payable
to stockholders in connection with any such liquidation, dissolution or winding
up or the applicable Conversion Date.
"Mirror Preferred Stock": Convertible preferred stock issued by (a) in
the case of a redemption of Redeemable Capital Stock, the issuer of the
applicable Redemption Securities, (b) in the case of a Spin Off, the issuer of
the applicable Spin Off Securities, and (c) in the case of an Exchange Offer,
the issuer of the applicable Exchange Securities, and having terms, conditions,
designations, dividend rights, voting powers, rights on liquidation and other
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof that are identical, or as
nearly so as practicable in the judgment of the Board of Directors, to those of
the Series C Preferred Stock for which such Mirror Preferred Stock is exchanged,
except that (i) the liquidation preference will be determined as provided in
paragraph 5 (h), 5(i) or 6, as applicable, (ii) the running of any time periods
pursuant to the terms of the Series C Preferred Stock shall be tacked to the
corresponding time periods in the Mirror Preferred Stock, and (iii) the Mirror
Preferred Stock shall be convertible into the kind and amount of Redemption
Securities, Spin Off Securities or Exchange Securities, as applicable, and other
securities and property that the holder of a share of Series C Preferred Stock
in respect of which such Mirror Preferred Stock is issued pursuant to the terms
hereof would have received (x) in the case of the redemption of Redeemable
Capital Stock, upon such redemption had such shares of Series C Preferred Stock
been converted immediately prior to the effective date of the Redemption Event,
(y) in the case of a Spin Off, in such Spin Off had such share of Series C
Preferred Stock been converted immediately prior to the record date for such
Spin Off and (z) in the case of an Exchange Offer, upon consummation thereof had
such share of Series C Preferred Stock that such holder elects to tender
pursuant to Section 6 been converted and the shares of Series B Common Stock
received upon such conversion been tendered in full pursuant to such Exchange
Offer prior to the expiration thereof and the same percentage of such tendered
shares had been accepted for exchange as the percentage of validly tendered
shares of Series B Common Stock were accepted for exchange pursuant to such
Exchange Offer, as the case may be.
6
<PAGE>
"Parity Securities": Any class or series of stock of this Corporation,
whether now existing or hereafter created, ranking on a parity basis with the
Series C Preferred Stock as to dividend rights or rights on liquidation. The
Series D Preferred Stock shall be Parity Securities. Stock of any class or
series shall rank on a parity basis as to dividend rights or rights on
liquidation with the Series C Preferred Stock, whether or not the dividend
rates, dividend payment dates or liquidation prices per share are different from
those of the Series C Preferred Stock, if the holders of shares of such class or
series shall be entitled to dividend payments or payments of amounts
distributable upon liquidation, dissolution or winding up of the affairs of this
Corporation, as the case may be, in proportion to their respective accumulated
and accrued and unpaid dividends or liquidation prices, respectively, without
preference or priority, one over the other, as between the holders of shares of
such class or series and the holders of Series C Preferred Stock.. No class or
series of capital stock that ranks junior to the Series C Preferred Stock as to
rights on liquidation shall rank or be deemed to rank on a parity basis with the
Series C Preferred Stock as to dividend rights unless the instrument creating or
evidencing such class or series of capital stock otherwise expressly provides.
"person": A natural person, corporation, limited liability company,
partnership or other legal entity.
"Record Date": For the dividends payable on any Dividend Payment Date,
the 15th day of the month during which such Dividend Payment Date shall occur as
and if designated by the Board of Directors.
"Redeemable Capital Stock": A class or series of Capital Stock of this
Corporation that provides by its terms a right in favor of this Corporation to
call, redeem, exchange or otherwise acquire all of the outstanding shares or
units of such class or series.
"Redemption Date": As to any Share, the date, which shall be a
Business Day, fixed for redemption of such Share as specified in the notice of
redemption given in accordance with paragraph 7(c), provided that no such date
will be a Redemption Date unless the applicable Redemption Price is actually
paid on such date or the consideration sufficient for the payment thereof, and
for no other purpose, has been set apart, and if the Redemption Price is not so
paid in full or the consideration sufficient therefor so set apart then the
Redemption Date will be the date, which shall be a Business Day, on which such
Redemption Price is fully paid or the consideration sufficient for the payment
thereof, and for no other purpose, has been set apart.
"Redemption Price": As to any Share that is to be redeemed on any
Redemption Date, the Liquidation Preference as in effect on such Redemption
Date.
7
<PAGE>
Series C Preferred Stock
"Redemption Securities": With respect to the redemption of any
Redeemable Capital Stock, stock of a Subsidiary of this Corporation that is
distributed by this Corporation in payment, in whole or in part, of the
redemption price of such Redeemable Capital Stock.
"Senior Securities": Any class or series of stock of this Corporation,
whether now existing or hereafter created, ranking senior to the Series C
Preferred Stock as to dividend rights or rights on liquidation. Stock of any
class or series shall rank senior to the Series C Preferred Stock as to dividend
rights or rights on liquidation if the holders of shares of such class or series
shall be entitled to dividend payments or payments of amounts distributable upon
dissolution, liquidation or winding up of the affairs of this Corporation, as
the case may be, in preference or priority to the holders of shares of Series C
Preferred Stock. No class or series of capital stock that ranks on a parity
basis with or junior to the Series C Preferred Stock as to rights on liquidation
shall rank or be deemed to rank prior to the Series C Preferred Stock as to
dividend rights, notwithstanding that the dividend rate or dividend payment
dates thereof are different from those of the Series C Preferred Stock, unless
the instrument creating or evidencing such class or series of capital stock
otherwise expressly provides.
"Series A Common Stock": The Series A Common Stock, par value $.01 per
share, of this Corporation, as such exists on the date of this Certificate of
Designations, and Capital Stock of any other class or series into which such
Series Common Stock may thereafter have been changed.
"Series A Convertible Securities": Securities, other than the Series B
Common Stock, that are convertible into or exercisable or exchangeable for
Series A Common Stock at the option of the holder thereof, or which otherwise
entitle the holder thereof to subscribe for, purchase or otherwise acquire
Series A Common Stock.
"Series A Preferred Stock": The Series A Convertible Preferred Stock,
par value $.01 per share, of this Corporation.
"Series B Common Stock": The Series B Common Stock, par value $.01 per
share, of this Corporation, as such exists on the date of this Certificate of
Designations, and Capital Stock of any other class or series into which such
Series B Common Stock may thereafter have been changed.
"Series B Convertible Securities": Securities that are convertible
into or exercisable or exchangeable for Series B Common Stock at the option of
the holder thereof or which otherwise entitle the holder thereof to subscribe
for, purchase or otherwise acquire Series B Common Stock.
"Series D Preferred Stock": The Series D Preferred Stock, par value
$.01 per share, of this Corporation.
8
<PAGE>
Series C Preferred Stock
"Share": A share of Series C Preferred Stock.
"Spin Off": The distribution of stock of a Subsidiary of this
Corporation as a dividend to all holders of Series B Common Stock (or to holders
of other stock of this Corporation receivable by a holder of Shares upon
conversion thereof (or upon conversion of securities receivable by a holder of
Shares upon conversion of such Shares)).
"Spin Off Securities": Stock of a Subsidiary of this Corporation that
is distributed to holders of Series B Common Stock (or to holders of other stock
of this Corporation receivable by a holder of Shares upon conversion thereof (or
upon conversion of securities receivable by a holder of Shares upon conversion
of such Shares)) in a Spin Off; provided, however, that in the case of a Spin
-------- -------
Off distribution made to holders of Series A Common Stock and Series B Common
Stock, if the same kind and quantity of stock is distributed with respect to
both Series A Common Stock and Series B Common Stock or if stock of one class or
series is distributed with respect to Series A Common Stock and the same
quantity of stock of a different class or series is distributed with respect to
Series B Common Stock and the differences between such classes or series are no
less favorable to the holders of Series B Common Stock than the differences
between the Series A Common Stock and the Series B Common Stock, then the Spin
Off Securities shall be the stock distributed with respect to shares of Series B
Common Stock and not the stock distributed with respect to shares of Series A
Common Stock.
"Stated Value": Of a Share of the Series C Preferred Stock, $1,000.
"Subsidiary": With respect to any person, any corporation, limited
liability company, partnership or other legal entity more than 50% of whose
outstanding voting securities or membership, partnership or other ownership
interests, as the case may be, are directly or indirectly owned by such person.
3. Dividends.
---------
(a) Subject to the prior preferences and other rights of any
Senior Securities, the holders of Series C Preferred Stock shall be entitled to
receive cumulative dividends, in preference to dividends on any Junior
Securities, which shall accrue as provided herein. Dividends on each Share will
accrue on a daily basis at the rate of 5% per annum of the Stated Value of such
Share from and including October 1, 2000 to but excluding the date on which the
Liquidation Preference or Redemption Price of such Share is made available
pursuant to paragraph 4 or 7, respectively, of this Certificate of Designations
or the Conversion Date of such Share pursuant to paragraph 5 hereof, as
applicable, provided, however, that on and after the occurrence of a Default,
-------- -------
the dividend rate shall be 7% per annum, rather than 5% per annum. Dividends
added to the Liquidation Preference of a Share as provided in paragraph 3(c)
shall accrue dividends on a daily
9
<PAGE>
Series C Preferred Stock
basis at the rate of 12% per annum. Dividends shall accrue as provided herein
whether or not such dividends have been declared and whether or not there are
any unrestricted funds of this Corporation legally available for the payment of
dividends. Accrued dividends on the Series C Preferred Stock shall be payable
quarterly on each Dividend Payment Date to the holders of record of the Series C
Preferred Stock as of the close of business on the applicable Record Date. For
purposes of determining the amount of dividends "accrued" (i) as of the first
Dividend Payment Date and as of any date that is not a Dividend Payment Date,
such amount shall be calculated on the basis of the applicable rate per annum
specified above in this paragraph 3(a) for the actual number of days elapsed
from and including October 1, 2000 (in the case of the first Dividend Payment
Date and any date prior to the first Dividend Payment Date) or the last
preceding Dividend Payment Date (in the case of any other date) to but excluding
the date as of which such determination is to be made, based on a 365-day year,
and (ii) as of any Dividend Payment Date after the first Dividend Payment Date,
such amount shall be calculated on the basis of such rate per annum based on a
360-day year of twelve 30-day months. For so long as the Liquidation Preference
of a Share of Series C Preferred Stock is equal to the Stated Value per Share,
the amount of the dividend payable per Share on the Dividend Payment Date for
each full quarterly Dividend Period shall be $12.50.
(b) Except as otherwise provided in paragraph 5 in connection
with the conversion of a Share, all dividends payable with respect to the Shares
shall be declared and paid, at the Corporation's election, in cash or in shares
of Series D Preferred Stock, valued for this purpose at the stated value
thereof, or in any combination of cash and shares of Series D Preferred Stock.
Payment of such dividends as provided herein shall be deemed to have been made
when such payment has been delivered to the record holders of the Series C
Preferred Stock entitled to receive the same, (i) in the case of cash, by wire
transfer of immediately available funds in accordance with the instructions of
such holders delivered in writing to the Corporation at least two Business Days
prior to any Dividend Payment Date (or if no such instructions are received, by
check delivered by certified mail, return receipt requested, to the address of
such record holder on the books of the Corporation), or (ii) in the case of
shares of Series D Preferred Stock, by delivery of certificates evidencing such
shares registered in the name of such holder, by certified mail, return receipt
requested, to the address of such record holder on the books of the Corporation
(unless otherwise instructed in writing by such holder, provided that such
instructions are delivered to the Corporation at least two Business Days prior
to the applicable Dividend Payment Date). All dividends paid with respect to the
Shares pursuant to this paragraph 3 shall be paid pro rata to all the holders of
Shares outstanding on the applicable Record Date or Special Record Date, as the
case may be.
(c) If on any Dividend Payment Date this Corporation, pursuant
to applicable law or otherwise, shall be prohibited or restricted from paying
the full dividends to which holders of Series C Preferred Stock, and any Parity
Securities ranking on a parity basis with the Series C Preferred Stock with
respect to the right to receive dividend payments, shall be entitled, the amount
available for such payment pursuant to applicable law and which is not otherwise
restricted
10
<PAGE>
Series C Preferred Stock
(if any) shall be distributed among the holders of Series C Preferred Stock and
any such Parity Securities ratably in proportion to the full amounts to which
they would otherwise be entitled. On each Dividend Payment Date, all dividends
that have accrued on each share of Series C Preferred Stock during the Dividend
Period ending on such Dividend Payment Date shall, to the extent not paid on
such Dividend Payment Date for any reason (whether or not such unpaid dividends
have been declared or there are any unrestricted funds of this Corporation
legally available for the payment of dividends), be added cumulatively to the
Liquidation Preference of such Share and will remain a part thereof until such
dividends and all dividends accrued thereon are paid. That portion of the
Liquidation Preference of a Share that consists of accrued unpaid dividends,
together with all dividends accrued in respect thereof, may be declared and paid
at any time (subject to the rights of any Senior Securities and to the
concurrent satisfaction of any dividend arrearages then existing with respect to
any Parity Securities that rank on a parity basis with the Series C Preferred
Stock as to the payment of dividends), without reference to any regular Dividend
Payment Date, to holders of record as of the close of business on such date, not
more than 45 days nor less than 10 days preceding the payment date thereof, as
may be fixed by the Board of Directors (the "Special Record Date"). Notice of
each Special Record Date shall be given, not more than 45 days nor less than 10
days prior thereto, to the holders of record of the Shares. Any dividend payment
made on the Shares shall first be credited against the earliest accrued but
unpaid dividend due with respect to such Shares.
(d) If at any time this Corporation shall have failed to pay, or
declare and set aside the consideration sufficient to pay, full cumulative
dividends on the Series C Preferred Stock for all Dividend Periods ending on or
before the immediately preceding Dividend Payment Date, and until full
cumulative dividends on the Series C Preferred Stock for all Dividend Periods
ending on or before the immediately preceding Dividend Payment Date are paid, or
declared and the consideration sufficient to pay the same in full is set aside
so as to be available for such purpose and no other purpose, (i) this
Corporation shall not redeem, or discharge any sinking fund obligation with
respect to, any Shares, Parity Securities or Junior Securities, or set aside any
money or assets for any such purpose, unless all then outstanding Shares are
redeemed pursuant to the terms hereof, (ii) this Corporation shall not declare
or pay any dividend on or make any distribution with respect to any Junior
Securities or Parity Securities or set aside any money or assets for any such
purpose, except that this Corporation may declare and pay a dividend on any
Parity Securities ranking on a parity basis with the Series C Preferred Stock
with respect to the right to receive dividend payments, contemporaneously with
the declaration and payment of a dividend on the Series C Preferred Stock,
provided that such dividends are declared and paid pro rata so that the amount
--------
of dividends declared and paid per share of Series C Preferred Stock and such
Parity Securities shall in all cases bear to each other the same ratio that
accumulated and accrued and unpaid dividends per share on the Series C Preferred
Stock and such Parity Securities bear to each other, and (iii) neither this
Corporation nor any Subsidiary thereof shall purchase or otherwise acquire any
Shares, Parity Securities or Junior Securities.
11
<PAGE>
Series C Preferred Stock
Nothing contained in the preceding paragraph of this paragraph 3(d)
shall prevent (x) the payment of dividends on any Junior Securities solely in
shares of Junior Securities or the redemption, purchase or other acquisition of
Junior Securities solely in exchange for shares of Junior Securities, (y) the
payment of dividends on any Parity Securities solely in shares of Junior
Securities or the redemption, exchange, purchase or other acquisition of Series
C Preferred Stock or Parity Securities solely in exchange for (together with a
cash adjustment for fractional shares, if any) shares of Junior Securities; or
(z) the purchase or acquisition of Shares pursuant to a purchase or exchange
offer or offers made to all holders of outstanding shares of Series C Preferred
Stock, provided that the terms of the purchase or exchange offer shall be
--------
identical for all shares of Series C Preferred Stock and all accrued dividends
on such Shares shall have been paid or shall have been declared and irrevocably
set apart in trust for the benefit of the holders of shares of Series C
Preferred Stock and for no other purpose. The provisions of this paragraph 3(d)
are for the benefit of the holders of Series C Preferred Stock and accordingly
the provisions of this paragraph 3(d) shall not restrict any redemption or
purchase by this Corporation or a Subsidiary thereof of Shares held by any
holder, provided that all other holders of Shares shall have waived in writing
the benefits of this provision with respect to such redemption.
4. Liquidation. Upon any liquidation, dissolution or winding up of
-----------
this Corporation, whether voluntary or involuntary, the holders of Series C
Preferred Stock shall be entitled to be paid an amount in cash equal to the
aggregate Liquidation Preference at the date of payment of all Shares
outstanding, which amounts shall be paid (x) before any distribution or payment
upon any such liquidation, dissolution or winding up of this Corporation is made
upon any Junior Securities, (y) on a pari passu basis with any such payment made
---- -----
to the holders of any Parity Securities, and (z) after any such payment is made
upon any Senior Securities. The holders of Series C Preferred Stock shall be
entitled to no other or further distribution of or participation in any
remaining assets of this Corporation after receiving the full preferential
amounts provided for in the preceding sentence. If upon such liquidation,
dissolution or winding up, the assets of this Corporation to be distributed
among the holders of Series C Preferred Stock and to all holders of Parity
Securities are insufficient to permit payment in full to such holders of the
aggregate preferential amounts which they are entitled to be paid, then the
entire assets of this Corporation to be distributed to such holders shall be
distributed ratably among them based upon the full preferential amounts to which
the shares of Series C Preferred Stock and such Parity Securities would
otherwise respectively be entitled. Upon any such liquidation, dissolution or
winding up, after the holders of Series C Preferred Stock and Parity Securities
have been paid in full the amounts to which they are entitled, the remaining
assets of this Corporation may be distributed to the holders of Junior
Securities. This Corporation shall mail written notice of such liquidation,
dissolution or winding up to each record holder of Series C Preferred Stock not
less than 20 days prior to the payment date stated in such written notice.
Neither the consolidation or merger of this Corporation into or with any other
corporation or corporations, nor the sale, transfer or lease by this Corporation
12
<PAGE>
Series C Preferred Stock
of all or any part of its assets, shall be deemed to be a liquidation,
dissolution or winding up of this Corporation within the meaning of this
paragraph 4.
5. Conversion.
----------
(a) Except as provided below in this paragraph 5(a) with respect
to Shares previously called for redemption as provided in paragraph 7 hereof,
the Series C Preferred Stock may be converted at any time or from time to time,
at the option of the holder thereof, in such manner and upon such terms and
conditions as hereinafter provided in this paragraph 5 into fully paid and non-
assessable full shares of Series B Common Stock. In the case of Shares called
for redemption by this Corporation pursuant to paragraph 7(a) hereof, the
conversion right provided by this paragraph 5 shall terminate at the close of
business on the Redemption Date. In the case of Shares required to be redeemed
pursuant to paragraph 7(b), the conversion right provided by this paragraph 5
shall terminate immediately upon receipt by this Corporation of a notice given
pursuant to said paragraph; provided, however, that such right shall be
-------- -------
reinstated as of the day following the date fixed for redemption of such Share
as specified in the notice of redemption given in accordance with paragraph 7(c)
unless the applicable Redemption Price is actually paid on such date or the
consideration sufficient for the payment thereof, and for no other purpose, has
been set apart. In case securities, cash or other assets other than Series B
Common Stock shall be payable, deliverable or issuable upon conversion as
provided herein, then all references to Series B Common Stock in this paragraph
5 shall be deemed to apply, so far as appropriate and as nearly as may be, to
such securities, cash or other assets.
(b) Subject to the provisions for adjustment hereinafter set
forth in this paragraph 5, the Series C Preferred Stock may be converted into
Series B Common Stock at the initial conversion rate of 171.674 fully paid and
non-assessable shares of Series B Common Stock for one share of the Series C
Preferred Stock, which rate was determined by dividing the Stated Value of a
Share of Series C Preferred Stock by $5.825 (the "initial conversion price"). If
on any Conversion Date, the Liquidation Preference of a Share of Series C
Preferred Stock is greater than the Stated Value of such Share (the amount of
such difference, the "Differential Amount"), then the number of shares of Series
B Common Stock or units of securities, cash or other assets otherwise issuable
or deliverable upon conversion of such Share shall be increased by an amount
determined by dividing the Differential Amount by the Effective Conversion Price
of such Share. The "Effective Conversion Price" of a Share as of a Conversion
Date means the quotient obtained by dividing the Stated Value of such Share by
the Conversion Rate then in effect before giving effect to the adjustment
contemplated by the preceding sentence.
(c) In case this Corporation shall, on or after the Issue Date,
(i) pay a dividend or make a distribution on its then outstanding shares of
Series B Common Stock in shares of Series B Common Stock, (ii) subdivide the
then outstanding shares of Series B Common Stock
13
<PAGE>
Series C Preferred Stock
into a greater number of shares of Series B Common Stock, (iii) combine the then
outstanding shares of Series B Common Stock into a smaller number of shares of
Series B Common Stock, (iv) pay a dividend or make a distribution on its then
outstanding shares of Series B Common Stock in shares of its Capital Stock or
Convertible Securities (other than Series B Common Stock or rights or warrants
for its Capital Stock or for its Convertible Securities), or (v) issue by
reclassification of its then outstanding shares of Series B Common Stock (other
than a reclassification by way of merger or binding share exchange that is
subject to paragraph 5(g)) any shares of any other class or series of Capital
Stock of this Corporation (other than rights, warrants or options for its
Capital Stock), then, subject to the following sentence and to paragraph 5(k),
the conversion privilege and the Conversion Rate in effect immediately prior to
the opening of business on the record date for such dividend or distribution or
the effective date of such subdivision, combination or reclassification shall be
adjusted so that the holder of each share of the Series C Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the number
and kind of shares of Capital Stock of this Corporation that such holder would
have owned or been entitled to receive immediately following such action had
such shares of Series C Preferred Stock been converted immediately prior to the
record date for, or effective date of, as the case may be, such event.
An adjustment made pursuant to this paragraph 5(c) for a dividend or
distribution shall become effective immediately after the record date for the
dividend or distribution and an adjustment made pursuant to this paragraph 5(c)
for a subdivision, combination or reclassification shall become effective
immediately after the effective date of the subdivision, combination or
reclassification. Such adjustment shall be made successively whenever any action
listed above shall be taken.
Any shares of Series B Common Stock issuable in payment of a dividend
shall be deemed to have been issued immediately prior to the time of the record
date for such dividend for purposes of calculating the number of outstanding
shares of Series B Common Stock under paragraph 5(d) below.
(d) In case this Corporation shall, on or after the Issue Date,
distribute any rights or warrants to all holders of shares of Series B Common
Stock entitling them (for a period expiring within 45 days after the record date
for the determination of stockholders entitled to receive such rights or
warrants) to subscribe for or purchase shares of Series B Common Stock (or
Series B Convertible Securities) at a price per share of Series B Common Stock
(or having an initial exercise price or conversion price per share of Series B
Common Stock, after adding thereto an allocable portion of the exercise price of
the right or warrant to purchase such Series B Convertible Securities, computed
on the basis of the maximum number of shares of Series B Common Stock issuable
upon conversion of such Series B Convertible Securities) less than the current
market price per share of Series B Common Stock (as determined in accordance
with the provisions of paragraph 5(f) below) on the Determination Date, the
number of shares of Series B Common Stock into which
14
<PAGE>
Series C Preferred Stock
each Share shall thereafter be convertible shall be determined by multiplying
the number of shares of Series B Common Stock into which such Share was
theretofore convertible immediately prior to the opening of business on such
record date by a fraction of which the numerator shall be the number of shares
of Series B Common Stock outstanding on such record date plus the number of
additional shares of Series B Common Stock offered for subscription or purchase
(or into which the Series B Convertible Securities so offered are initially
convertible) and of which the denominator shall be the number of shares of
Series B Common Stock outstanding on such record date plus the number of shares
of Series B Common Stock which the aggregate offering price of the total number
of shares of Series B Common Stock so offered (or the aggregate initial
conversion or exercise price of the Series B Convertible Securities so offered,
after adding thereto the aggregate exercise price of the rights or warrants to
purchase such Series B Convertible Securities) would purchase at the current
market price per share of Series B Common Stock (as determined in accordance
with the provisions of paragraph 5(f) below) on the Determination Date. Such
adjustment shall be made successively whenever any such rights or warrants are
issued and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights or warrants. In
the event that all of the shares of Series B Common Stock (or all of the Series
B Convertible Securities) subject to such rights or warrants have not been
issued when such rights or warrants expire (or, in the case of rights or
warrants to purchase Series B Convertible Securities which have been exercised,
all of the shares of Series B Common Stock issuable upon conversion of such
Series B Convertible Securities have not been issued prior to the expiration of
the conversion right thereof), then the Conversion Rate shall be readjusted
retroactively to be the Conversion Rate which would then be in effect had the
adjustment upon the issuance of such rights or warrants been made on the basis
of the actual number of shares of Series B Common Stock (or Series B Convertible
Securities) issued upon the exercise of such rights or warrants (or the
conversion of such Series B Convertible Securities); but such subsequent
adjustment shall not affect the number of shares of Series B Common Stock issued
upon the conversion of any Share prior to the date such subsequent adjustment is
made. No adjustment shall be made under this paragraph 5(d) if the adjusted
Conversion Rate would be lower than the Conversion Rate in effect immediately
prior to such adjustment.
(e) In case this Corporation, on or after the Issue Date, shall
distribute to all holders of shares of Series B Common Stock any evidences of
its indebtedness or assets or rights or warrants to purchase shares of Series A
Common Stock (or Series A Convertible Securities) or Series B Common Stock (or
Series B Convertible Securities) (excluding (x) dividends or distributions
referred to in paragraph 5(c), distributions of rights or warrants referred to
in paragraph 5(d), distributions of Spin Off Securities referred to in paragraph
5(i) and distributions of rights or warrants exercisable for Exchange Securities
(which shall be governed by paragraph 6) and (y) cash dividends or distributions
unless such cash dividends or cash distributions are Extraordinary Cash
Dividends), then in each such case the number of shares of Series B Common Stock
into which each Share shall thereafter be convertible shall be determined by
multiplying the number of shares of
15
<PAGE>
Series C Preferred Stock
Series B Common Stock into which such Share was theretofore convertible
immediately prior to the opening of business on (A) the record date for the
determination of stockholders entitled to receive the distribution or (B) in the
case of a reclassification, the effective date of such reclassification, by a
fraction of which the numerator shall be the current market price per share of
the Series B Common Stock (as determined in accordance with the provisions of
paragraph 5(f) below) on the Determination Date and of which the denominator
shall be such current market price per share of Series B Common Stock less the
fair market value (as determined by the Board of Directors of this Corporation,
whose determination shall be conclusive) on such record date or effective date
of the portion of the assets or evidences of indebtedness or rights or warrants
so to be distributed applicable to one share of Series B Common Stock; provided,
--------
however, that in the event the denominator of the foregoing fraction is zero or
-------
negative, in lieu of the foregoing adjustment, adequate provision shall be made
so that each holder of a Share shall have the right to receive upon conversion
of such Share, in addition to the shares of Series B Common Stock to which the
holder is entitled, the assets or evidences of indebtedness or rights or
warrants such holder would have received had such holder converted such Share
immediately prior to the record date for such distribution. Such adjustment
shall be made successively whenever any such distribution is made and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such distribution. No adjustment shall be made
under this paragraph 5(e) if the adjusted Conversion Rate would be lower than
the Conversion Rate in effect immediately prior to such adjustment.
For purposes of this paragraph 5(e), the term "Extraordinary Cash
Dividend" shall mean any cash dividend with respect to the Series B Common Stock
the amount of which, together with the aggregate amount of cash dividends on the
Series B Common Stock to be aggregated with such cash dividend in accordance
with the following provisions of this paragraph, equals or exceeds the threshold
percentage set forth below in the following sentence. If, upon the date prior to
the Ex-Dividend Date with respect to a cash dividend on Series B Common Stock,
the aggregate of the amount of such cash dividend together with the amounts of
all cash dividends on the Series B Common Stock with Ex-Dividend Dates occurring
in the 365 consecutive day period ending on the date prior to the Ex-Dividend
Date with respect to the cash dividend to which this provision is being applied
(other than any such other cash dividends with Ex-Dividend Dates occurring in
such period for which a prior adjustment in the Conversion Rate was previously
made under this paragraph 5(e)) equals or exceeds on a per share basis 10% of
the average of the Closing Prices during the period beginning on the date after
the first such Ex-Dividend Date in such period and ending on the date prior to
the Ex-Dividend Date with respect to the cash dividend to which this provision
is being applied (except that if no other cash dividend has had an Ex-Dividend
Date occurring in such period, the period for calculating the average of the
Closing Prices shall be the period commencing 365 days prior to the date
immediately prior to the Ex-Dividend Date with respect to the cash dividend to
which this provision is being applied), such cash dividend together with each
other cash dividend with an Ex-Dividend Date occurring in such 365-day period
that is aggregated with such cash dividend in accordance with this paragraph
shall be deemed to be an Extraordinary Cash Dividend.
16
<PAGE>
Series C Preferred Stock
(f) For the purpose of any computation under paragraph 5(d) or
5(e) the current market price per share of Series B Common Stock on any
Determination Date or date of issuance, as the case may be, shall be deemed to
be the product of (i) the number of shares of Series A Common Stock into which a
share of Series B Common Stock is then convertible at the option of the holder
thereof times (ii) the average of the daily Closing Prices for a share of Series
A Common Stock for the ten (10) consecutive trading days before the
Determination Date in question.
(g) If this Corporation consolidates with any other entity or
merges into another entity, or in case of any sale or transfer to another entity
(other than by mortgage or pledge) of all or substantially all of the properties
and assets of this Corporation, or if the Corporation is a party to a merger or
binding share exchange which reclassifies or changes its outstanding Series B
Common Stock, this Corporation (or its successor in such transaction) or the
purchaser of such properties and assets shall make appropriate provision so that
the holder of a Share shall have the right thereafter to convert such Share into
the kind and amount of securities, cash or other assets that such holder would
have owned immediately after such consolidation, merger, sale or transfer if
such holder had converted such Share into Series B Common Stock immediately
prior to the effective date of such consolidation, merger, sale or transfer
(taking into account for this purpose (to the extent applicable) the valid
exercise by such holder of any rights of election made available to holders of
Series B Common Stock, which rights of election shall simultaneously be made
available to holders of Shares on the same basis as if such Shares had
theretofore been converted into shares of Series B Common Stock), and the
holders of the Series C Preferred Stock shall have no other conversion rights
under these provisions; provided that effective provision shall be made, in the
--------
Articles or Certificate of Incorporation of the resulting or surviving
corporation or otherwise or in any contracts of sale or transfer, so that the
provisions set forth herein for the protection of the conversion rights of the
Series C Preferred Stock shall thereafter be made applicable, as nearly as
reasonably may be, to any such other securities and other assets deliverable
upon conversion of the Series C Preferred Stock remaining outstanding or other
convertible preferred stock or other convertible securities received by the
holders of Series C Preferred Stock in place thereof; and provided, further,
-------- -------
that any such resulting or surviving corporation or purchaser shall expressly
assume the obligation to deliver, upon the exercise of the conversion privilege,
such securities, cash or other assets as the holders of the Series C Preferred
Stock remaining outstanding, or other convertible preferred stock or other
convertible securities received by the holders in place thereof, shall be
entitled to receive pursuant to the provisions hereof, and to make provision for
the protection of the conversion rights as above provided.
(h) Subject to paragraph 5(k) and to the remaining provisions of
this paragraph 5(h), in the event that a holder of Series C Preferred Stock
would be entitled to receive upon conversion thereof pursuant to this paragraph
5 any Redeemable Capital Stock and this Corporation redeems, exchanges or
otherwise acquires all of the outstanding shares or other units
17
<PAGE>
Series C Preferred Stock
of such Redeemable Capital Stock (such event being a "Redemption Event"), then,
from and after the effective date of such Redemption Event, the holders of
Shares of Series C Preferred Stock then outstanding shall be entitled to receive
upon conversion of such Shares, in lieu of shares or units of such Redeemable
Capital Stock, the kind and amount of securities, cash and other assets
receivable upon the Redemption Event by a holder of the number of shares or
units of such Redeemable Capital Stock into which such Shares of Series C
Preferred Stock could have been converted immediately prior to the effective
date of such Redemption Event (assuming, to the extent applicable, that such
holder failed to exercise any rights of election with respect thereto and
received per share or unit of such Redeemable Capital Stock the kind and amount
of securities, cash and other assets received per share or unit by a plurality
of the non-electing shares or units of such Redeemable Capital Stock), and (from
and after the effective date of such Redemption Event) the holders of the Series
C Preferred Stock shall have no other conversion rights under these provisions
with respect to such Redeemable Capital Stock.
Notwithstanding the foregoing, if the redemption price for the shares
of such Redeemable Capital Stock is paid in whole or in part in Redemption
Securities, and the Mirror Preferred Stock Condition is met, the Series C
Preferred Stock shall not be convertible into such Redemption Securities and,
from and after the applicable redemption date, the holders of any shares of
Series C Preferred Stock that have not been exchanged for Mirror Preferred Stock
and Exchange Preferred Stock shall have no conversion rights under these
provisions except for any conversion right that may have existed immediately
prior to the effective date of the Redemption Event with respect to any
securities (including the Series B Common Stock), cash or other assets other
than the Redeemable Capital Stock so redeemed. This Corporation shall use all
commercially reasonable efforts to ensure that the Mirror Preferred Stock
Condition is satisfied. The Mirror Preferred Stock Condition will be satisfied
in connection with a redemption of any Redeemable Capital Stock into which the
Series C Preferred Stock is then convertible if appropriate provision is made so
that the holders of the Series C Preferred Stock have the right to exchange
their shares of Series C Preferred Stock on the effective date of the Redemption
Event for Exchange Preferred Stock of this Corporation and Mirror Preferred
Stock of the issuer of the Redemption Securities. The sum of the initial
liquidation preferences of the shares of Exchange Preferred Stock and Mirror
Preferred Stock delivered in exchange for a Share of Series C Preferred Stock
will equal the Liquidation Preference of a share of Series C Preferred Stock on
the effective date of the Redemption Event. The Mirror Preferred Stock will have
an aggregate initial liquidation preference equal to the product of the
aggregate Liquidation Preference of the Shares of Series C Preferred Stock
exchanged therefor and the quotient of (x) the product of the Conversion Rate
for the Redeemable Capital Stock to be redeemed (determined immediately prior to
the effective date of the Redemption Event) and the average of the daily Closing
Prices of the Redeemable Capital Stock for the period of ten consecutive trading
days ending on the third trading day prior to the effective date of the
Redemption Event, divided by (y) the sum of the amount determined pursuant to
clause (x), plus the fair value of the securities (other than the Redeemable
Capital Stock being redeemed), cash or other assets that
18
<PAGE>
Series C Preferred Stock
would have been receivable by a holder of Series C Preferred Stock upon
conversion thereof immediately prior to the effective date of the Redemption
Event (such fair value to be determined in the case of stock or other securities
with a Closing Price in the same manner as provided in clause (x) and otherwise
by the Board of Directors in the exercise of its good faith judgment). The
shares of Exchange Preferred Stock will have an aggregate initial liquidation
preference equal to the difference between the aggregate Liquidation Preference
of the Shares of Series C Preferred Stock exchanged therefor and the aggregate
initial liquidation preference of the Mirror Preferred Stock.
(i) If this Corporation effects a Spin Off, this Corporation
shall make appropriate provision so that the holders of the Series C Preferred
Stock have the right to exchange their Shares of Series C Preferred Stock on the
effective date of the Spin Off for Exchange Preferred Stock of this Corporation
and Mirror Preferred Stock of the issuer of the Spin Off Securities. The sum of
the initial liquidation preferences of the shares of Exchange Preferred Stock
and Mirror Preferred Stock delivered in exchange for a Share of Series C
Preferred Stock will equal the Liquidation Preference of a Share of Series C
Preferred Stock on the effective date of the Spin Off. The Mirror Preferred
Stock will have an aggregate liquidation preference equal to the product of the
aggregate Liquidation Preference of the Shares of Series C Preferred Stock
exchanged therefor and the quotient of (x) the product of the number (or
fraction) of Spin Off Securities that would have been receivable upon such Spin
Off by a holder of the number of shares of Series B Common Stock issuable upon
conversion of a Share of Series C Preferred Stock immediately prior to the
record date for the Spin Off and the average of the daily Closing Prices of the
Spin Off Securities for the period of ten consecutive trading days commencing on
the tenth trading day following the effective date of the Spin Off, divided by
(y) the sum of the amount determined pursuant to clause (x), plus the fair value
of the shares of Series B Common Stock and other securities (other than Spin Off
Securities), cash or other assets that would have been receivable by a holder of
a Share of Series C Preferred Stock upon conversion thereof immediately prior to
the record date for the Spin Off (such fair value to be determined in the case
of Series B Common Stock or other securities with a Closing Price in the same
manner as provided in clause (x) and otherwise by the Board of Directors in the
exercise of its good faith judgment). The shares of Exchange Preferred Stock
will have an aggregate initial liquidation preference equal to the difference
between the aggregate Liquidation Preference of the Shares of Series C Preferred
Stock exchanged therefor and the aggregate initial liquidation preference of the
Mirror Preferred Stock. From and after the effective date of such Spin Off, the
holders of any Shares of Series C Preferred Stock that have not been exchanged
for Mirror Preferred Stock and Exchange Preferred Stock as provided above shall
have no conversion rights under these provisions with respect to such Spin Off
Securities.
(j) Whenever the Conversion Rate or the conversion privilege
shall be adjusted as provided in this paragraph 5, this Corporation shall
promptly cause a notice to be mailed to the holders of record of the Series C
Preferred Stock describing the nature of the event requiring such adjustment,
the Conversion Rate in effect immediately thereafter and the kind and amount of
19
<PAGE>
Capital Stock or other securities or cash or other assets into which the Series
C Preferred Stock shall be convertible after such event. Where appropriate, such
notice may be given in advance and included as a part of a notice required to be
mailed under the provisions of paragraph 5(l).
(k) This Corporation may, but shall not be required to, make any
adjustment of the Conversion Rate if such adjustment would require an increase
or decrease of less than 1% in such Conversion Rate; provided, however, that any
adjustments which by reason of this paragraph 5(k) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this paragraph 5 shall be made to the nearest cent or the
nearest 1/1000th of a share, as the case may be. In any case in which this
paragraph 5(k) shall require that an adjustment shall become effective
immediately after a record date for such event, the Corporation may defer until
the occurrence of such event (x) issuing to the holder of any Shares of Series C
Preferred Stock converted after such record date and before the occurrence of
such event the additional shares of Series B Common Stock or other Capital Stock
issuable upon such conversion by reason of the adjustment required by such event
over and above the shares of Series B Common Stock or other Capital Stock
issuable upon such conversion before giving effect to such adjustment and (y)
paying to such holder cash in lieu of any fractional interest to which such
holder is entitled pursuant to paragraph 5(p); provided, however, that, if
requested by such holder, this Corporation shall deliver to such holder a due
bill or other appropriate instrument evidencing such holder's right to receive
such additional shares of Series B Common Stock or other Capital Stock, and such
cash, upon the occurrence of the event requiring such adjustment.
To the extent the shares of Series C Preferred Stock become
convertible into cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.
(l) In case at any time:
(i) this Corporation shall take any action which would
require an adjustment in the Conversion Rate pursuant to this paragraph;
(ii) there shall be any capital reorganization or
reclassification of the Series B Common Stock (other than a change in par
value), or any consolidation, merger or binding share exchange to which the
Corporation is a party and for which approval of any stockholders of this
Corporation is required, or any sale, transfer or lease of all or
substantially all of the assets of the Corporation, or a tender offer for
shares of Common Stock of any series representing at least a majority of
the total voting power represented by the outstanding shares of Common
Stock of such series which has been recommended by the Board of Directors
as being in the best interests of the holders of Common Stock; or
20
<PAGE>
(iii) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of this Corporation;
then, in any such event, this Corporation shall give written notice, in the
manner provided in the first sentence of paragraph 7(c) hereof, to the holders
of the Series C Preferred Stock at their respective addresses as the same appear
on the books of the Corporation, at least twenty days (or ten days in the case
of a recommended tender offer as specified in clause (ii) above) prior to any
record date for such action, dividend or distribution or the date as of which it
is expected that holders of Series B Common Stock of record shall be entitled to
exchange their shares of Series B Common Stock for securities, cash or other
assets, if any, deliverable upon such reorganization, reclassification,
consolidation, merger, binding share exchange, sale, transfer, lease, tender
offer, dissolution, liquidation or winding up; provided, however, that any
-------- -------
notice required by any event described in clause (ii) of this paragraph 5(l)
shall be given in the manner and at the time that such notice is given to the
holders of Common Stock. Without limiting the obligations of this Corporation
to provide notice of corporate actions hereunder, the failure to give the notice
required by this paragraph 5(l) or any defect therein shall not affect the
legality or validity of any such corporate action of the Corporation or the vote
upon such action.
(m) Before any holder of Series C Preferred Stock shall be
entitled to convert the same into Series B Common Stock, such holder shall
surrender the certificate or certificates for such Series C Preferred Stock at
the office of this Corporation or at the office of the transfer agent for the
Series C Preferred Stock, which certificate or certificates, if this Corporation
shall so request, shall be duly endorsed to this Corporation or in blank or
accompanied by proper instruments of transfer to this Corporation or in blank
(such endorsements or instruments of transfer to be in form satisfactory to this
Corporation), and shall give written notice to this Corporation at said office
that it elects to convert all or a part of the Shares represented by said
certificate or certificates in accordance with the terms of this paragraph 5,
and shall state in writing therein the name or names in which such holder wishes
the certificates for Series B Common Stock to be issued. Every such notice of
election to convert shall constitute a contract between the holder of such
Series B Preferred Stock and the Corporation, whereby the holder of such Series
C Preferred Stock shall be deemed to subscribe for the amount of Series B Common
Stock which such holder shall be entitled to receive upon conversion of the
number of shares of Series C Preferred Stock to be converted, and, in
satisfaction of such subscription, to deposit the shares of Series C Preferred
Stock to be converted, and thereby this Corporation shall be deemed to agree
that the surrender of the shares of Series C Preferred Stock to be converted
shall constitute full payment of such subscription for Series B Common Stock to
be issued upon such conversion. This Corporation will as soon as practicable
after such deposit of a certificate or certificates for Series C Preferred
Stock, accompanied by the written notice and the statement above prescribed,
issue and deliver at the office of this Corporation or of said transfer agent to
the person for whose account such Series C Preferred Stock was so surrendered,
or to his nominee(s) or, subject to compliance with applicable law,
21
<PAGE>
transferee(s), a certificate or certificates for the number of full shares of
Series B Common Stock to which such holder shall be entitled, together with cash
or its check in lieu of any fraction of a share as hereinafter provided. If
surrendered certificates for Series C Preferred Stock are converted only in
part, this Corporation will issue and deliver to the holder, or to his
nominee(s), without charge therefor, a new certificate or certificates
representing the aggregate of the unconverted Shares.
The person or persons entitled to receive the Series B Common Stock
issuable upon conversion of such Series C Preferred Stock shall be treated for
all purposes as the record holder or holders of such Series B Common Stock on
the Conversion Date. Notwithstanding the foregoing, this Corporation shall not
be required to convert any Shares of Series C Preferred Stock, and no surrender
of Series C Preferred Stock shall be effective for that purpose, while the stock
transfer books of this Corporation are closed for any purpose; but such
surrender shall be effective (assuming all other requirements of this paragraph
5(m) have been satisfied) for conversion, and to constitute the person or
persons entitled to receive the Series B Common Stock issuable upon such
conversion as the record holder(s) of such shares of Series B Common Stock, for
all purposes immediately upon the reopening of such books. Upon conversion of
Shares, the rights of the holder of the Shares so converted, as a holder
thereof, will cease; provided, however, that if the Board of Directors declares
-------- -------
any dividend on the Series C Preferred Stock pursuant to paragraph 3(a) of this
Certificate of Designations and the Conversion Date for any Shares of Series C
Preferred Stock occurs after the Record Date and before the Dividend Payment
Date for such dividend, then the holder of such Shares on such Record Date shall
be entitled to receive such dividend on such Dividend Payment Date as if such
Conversion Date had not occurred.
The issuance of certificates for shares of Series B Common Stock upon
conversion of Shares of Series C Preferred Stock shall be made without charge
for any issue, stamp or other similar tax in respect of such issuance; provided,
--------
however, if any such certificate is to be issued in a name other than that of
-------
the registered holder of the Share or Shares of Series C Preferred Stock
converted, the person or persons requesting the issuance thereof shall pay to
this Corporation the amount of any tax which may be payable in respect of any
transfer involved in such issuance or shall establish to the satisfaction of
this Corporation that such tax has been paid.
(n) This Corporation shall at all times reserve and keep
available, solely for the purpose of issuance upon conversion of the outstanding
shares of Series C Preferred Stock, such number of shares of Series B Common
Stock (or other Capital Stock) as shall be issuable upon the conversion of all
outstanding Shares, provided that nothing contained herein shall be construed to
preclude this Corporation from satisfying its obligations in respect of the
conversion of the outstanding shares of Series C Preferred Stock by delivery of
shares of Series B Common Stock (or such other Capital Stock) which are held in
the treasury of this Corporation. This Corporation shall take all such corporate
and other actions as from time to time may be necessary to insure that all
shares of Series B Common Stock (or other Capital Stock) issuable upon
conversion of shares of
22
<PAGE>
Series C Preferred Stock from time to time will, upon issue, be duly and validly
authorized and issued, fully paid and nonassessable and free of any preemptive
or similar rights.
(o) All shares of Series C Preferred Stock received by this
Corporation upon conversion thereof into Series B Common Stock shall be retired
and shall be restored to the status of authorized and unissued shares of
preferred stock (and may be reissued as part of another series of the preferred
stock of this Corporation, but such shares shall not be reissued as Series C
Preferred Stock).
(p) This Corporation shall not be required to issue fractional
shares of Series B Common Stock or scrip upon conversion of the Series C
Preferred Stock. As to any final fraction of a share of Series B Common Stock
which a holder of one or more Shares would otherwise be entitled to receive upon
conversion of such Shares in the same transaction, this Corporation shall pay a
cash adjustment in respect of such final fraction in an amount equal to the same
fraction of the market value of a full share of Series B Common Stock. For
purposes of this paragraph 5(p), the market value of a share of Series B Common
Stock shall be the product of (i) the Closing Price of a share of Series A
Common Stock on the trading day immediately preceding the Conversion Date times
(ii) the number of shares of Series A Common Stock into which a share of Series
B Common Stock is then convertible at the option of the holder.
(q) This Corporation shall not, by amendment of this Certificate
of Designations or through any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, other than as expressly permitted by this Certificate of
Designations or approved by the requisite vote or written consent of the holders
of Series C Preferred Stock taken or given in accordance with this Certificate,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by this Corporation, but will at all times in
good faith assist in the carrying out of all the provisions of this paragraph 5
and in the taking of all such action as may be necessary or appropriate in order
to protect the conversion rights of the holders of Series C Preferred Stock
against impairment.
6. Exchange Option.
---------------
(a) In the event an Exchange Offer is made by this Corporation
or a Subsidiary thereof (the applicable of the foregoing being the "Offeror"),
the Offeror shall concurrently therewith make an equivalent offer to the holders
of Series C Preferred Stock pursuant to which such holders may tender Shares,
based upon the number of shares of Series B Common Stock into which such
tendered Shares are then convertible (or other stock of this Corporation
receivable by a holder of tendered Shares upon conversion thereof (or upon
conversion of securities receivable by a holder of Shares upon conversion of
such tendered Shares)) (and in lieu of tendering
23
<PAGE>
outstanding shares of Series B Common Stock (or such other stock)), together
with such other consideration as may be required to be tendered pursuant to such
Exchange Offer, and receive in exchange therefor, in lieu of Exchange Securities
(and other property, if applicable), Mirror Preferred Stock with an aggregate
liquidation preference equal to the aggregate Liquidation Preference of the
shares of Series C Preferred Stock exchanged therefor. Whether or not a holder
of Shares elects to accept such offer and tender Shares, no adjustment to the
Conversion Rate of the Shares will be made pursuant to paragraph 5 in connection
with the Exchange Offer.
(b) If an Exchange Offer is made as discussed above, the Offeror
shall, concurrently with the distribution of the offering circular or prospectus
and related documents to holders of Common Stock, provide each holder of Series
C Preferred Stock with a notice setting forth the offer described in paragraph
6(a) above and describing the Exchange Offer, the Exchange Securities and the
Mirror Preferred Stock. Such notice shall be accompanied by the offering
circular, prospectus or similar document provided to holders of Common Stock in
respect of the Exchange Offer and a copy of the certificate of designations (or
similar document) proposed to be filed by the Offeror in order to establish the
Mirror Preferred Stock. No failure to mail the notice contemplated by this
paragraph 6(b) or any defect therein or in the mailing thereof shall affect the
validity of the applicable Exchange Offer.
7. Redemption.
----------
(a) Subject to paragraph 7(f), the shares of Series C Preferred
Stock may be redeemed out of funds legally available therefor, at the option of
this Corporation by action of the Board of Directors, in whole or from time to
time in part, on any Business Day after June 30, 2006 at the Redemption Price
per Share as of the applicable Redemption Date. If less than all outstanding
Shares are to be redeemed, Shares shall be redeemed ratably (as nearly as may be
practicable) among the holders thereof.
(b) Subject to the rights of any Parity Securities and the
provisions of paragraph 7(f) and subject to any prohibitions or restrictions
contained in any Debt Instrument, at any time on or after June 30, 2006 or prior
thereto if a Default has occurred and during the continuance thereof, any holder
shall have the right, at such holder's option, to require redemption by this
Corporation at the Redemption Price per Share as of the applicable Redemption
Date of all or any portion of such holder's Shares, by written notice to this
Corporation stating the number of Shares to be redeemed. This Corporation shall
redeem, out of funds legally available therefor and not restricted in accordance
with the first sentence of this paragraph 7(b), the Shares so requested to be
redeemed on such date within 60 days following this Corporation's receipt of
such notice as this Corporation shall state in its notice given pursuant to
paragraph 7(c). If the funds of this Corporation legally available for
redemption of Shares and not restricted in accordance with the first sentence of
this paragraph 7(b) are insufficient to redeem the total number of Shares
required to be
24
<PAGE>
redeemed pursuant to this paragraph 7(b), then, those funds which are legally
available for redemption of such Shares and not so restricted will be used to
redeem the maximum possible number of such Shares ratably among the holders who
have required Shares to be redeemed under this paragraph 7(b). At any time
thereafter when additional funds of this Corporation are legally available and
not so restricted for such purpose, such funds will immediately be used to
redeem the Shares this Corporation failed to redeem on such Redemption Date
until the balance of such Shares are redeemed. Further, if the funds of this
Corporation legally available for redemption of Shares are sufficient to pay the
Redemption Price of the Shares requested to be redeemed in full, then any
portion of such Redemption Price not paid when due as provided in this paragraph
7(b), notwithstanding that payment thereof is restricted pursuant to any Debt
Instrument in accordance with the first sentence of this paragraph 7(b), shall
constitute indebtedness of this Corporation for borrowed money, the payment of
which indebtedness the holders requesting such redemption shall be entitled to
enforce by the exercise of any and all rights at law or in equity.
(c) Notice of any redemption pursuant to this paragraph 7 shall
be mailed, first class, postage prepaid, not less than 30 days nor more than 60
days prior to the Redemption Date, to the holders of record of the shares of
Series C Preferred Stock to be redeemed, at their respective addresses as the
same appear upon the books of this Corporation or are supplied by them in
writing to this Corporation for the purpose of such notice; but no failure to
mail such notice or any defect therein or in the mailing thereof shall affect
the validity of the proceedings for the redemption of any shares of the Series C
Preferred Stock. Such notice shall set forth the Redemption Price, the
Redemption Date, the number of Shares to be redeemed and the place at which the
Shares called for redemption will, upon presentation and surrender of the stock
certificates evidencing such Shares, be redeemed. In case fewer than the total
number of shares of Series C Preferred Stock represented by any certificate are
redeemed, a new certificate representing the number of unredeemed Shares will be
issued to the holder thereof without cost to such holder.
(d) If notice of any redemption by this Corporation pursuant to
this paragraph 7 shall have been mailed as provided in paragraph 7(c) and if on
or before the Redemption Date specified in such notice the consideration
necessary for such redemption shall have been set apart so as to be available
therefor and only therefor, then on and after the close of business on the
Redemption Date, the Shares called for redemption, notwithstanding that any
certificate therefor shall not have been surrendered for cancellation, shall no
longer be deemed outstanding, and all rights with respect to such Shares shall
forthwith cease and terminate, except the right of the holders thereof to
receive upon surrender of their certificates the consideration payable upon
redemption thereof.
(e) All shares of Series C Preferred Stock redeemed, retired,
purchased or otherwise acquired by this Corporation shall be retired and shall
be restored to the status of authorized and unissued shares of preferred stock
(and may be reissued as part of another series of
25
<PAGE>
the preferred stock of this Corporation, but such shares shall not be reissued
as Series C Preferred Stock).
(f) If and so long as this Corporation shall fail to redeem on a
Redemption Date pursuant to this paragraph 7 all shares of Series C Preferred
Stock required to be redeemed on such date, this Corporation shall not redeem,
or discharge any sinking fund obligation with respect to, any Shares, Junior
Securities or Parity Securities, or set aside any money or assets for any such
purpose, unless all then outstanding Shares required to be redeemed are redeemed
pursuant to the terms hereof, and shall not declare or pay any dividend on or
make any distribution with respect to any Junior Securities or set aside any
money or assets for any such purpose, and neither this Corporation nor any
Subsidiary thereof shall purchase or otherwise acquire any Shares, Parity
Securities or Junior Securities. Nothing contained in this paragraph 7(f) shall
prevent (i) the payment of dividends on any Junior Securities solely in shares
of Junior Securities or the redemption, purchase or other acquisition of Junior
Securities solely in exchange for shares of Junior Securities, (ii) the
redemption, exchange, purchase or other acquisition of Series C Preferred Stock
or Parity Securities solely in exchange for (together with a cash adjustment for
fractional shares, if any), shares of Junior Securities, or (iii) the purchase
or acquisition of shares of Series C Preferred Stock pursuant to a purchase or
exchange offer or offers made to all holders of outstanding shares of Series C
Preferred Stock, provided that the terms of the purchase or exchange offer shall
--------
be identical for all Shares and all accrued dividends on such Shares shall have
been declared and irrevocably set apart in trust for the benefit of the holders
of Shares and for no other purpose. The provisions of this paragraph 7(f) are
for the benefit of holders of Series C Preferred Stock and accordingly the
provisions of this paragraph 7(f) shall not restrict any redemption or purchase
by this Corporation or a Subsidiary thereof of Shares held by any holder,
provided that all other holders of Shares shall have waived in writing the
benefits of this provision with respect to such redemption.
8. Voting Rights. The holders of the Series C Preferred Stock shall
-------------
have no voting rights whatsoever, except as required by law and except that, for
so long as any Shares remain outstanding, this Corporation will not, either
directly or indirectly, without the consent of the holders of record of at least
66 2/3% of the number of Shares then outstanding, take any action (including by
merger, consolidation or binding share exchange with any other corporation or
entity) to amend, alter or repeal (i) any of the provisions hereof, (ii) any of
the provisions of the Certificate of Incorporation of this Corporation so as to
affect adversely any preference or any relative or other right given to the
Series C Preferred Stock or the Series B Common Stock, or (iii) any of
paragraphs 3 or 4 or the first sentence of paragraph 2 of Section A of Article
IV of the Certificate of Incorporation of this Corporation.
9. Waiver. Any provision of this Certificate of Designations which,
------
for the benefit of the holders of Series C Preferred Stock, prohibits, limits or
restricts actions by the Corporation, or imposes obligations on the Corporation,
including but not limited to provisions
26
<PAGE>
relating to the obligation of the Corporation to redeem or convert such Shares,
may be waived in whole or in part, or the application of all or any part of such
provision in any particular circumstance or generally may be waived, in each
case by the affirmative vote or with the consent of the holders of record of at
least 66 2/3% of the number of Shares then outstanding (or such greater
percentage thereof as may be required by this Certificate of Designations,
applicable law or any applicable rules of any national securities exchange or
national interdealer quotation system), either in writing or by vote at an
annual meeting or a special meeting called for such purpose at which the holders
of Series C Preferred Stock shall vote as a separate class.
10. Preemptive Rights. The holders of the Series C Preferred Stock
-----------------
will not have any preemptive right to subscribe for or purchase any shares of
stock or any other securities which may be issued by this Corporation.
11. Senior Securities. The Series C Preferred Stock shall not rank
-----------------
junior to any other classes or series of stock of this Corporation in respect of
the right to receive dividends or the right to participate in any distribution
upon liquidation, dissolution or winding up of this Corporation. Without the
prior consent of the holders of record of at least 66 2/3% of the number of
Shares then outstanding, this Corporation shall not issue any Senior Securities.
12. Claims. In the event of any action at law or suit in equity with
------
respect to the Series C Preferred Stock, this Corporation, in addition to all
other sums which it may be required to pay, will pay a reasonable sum for
attorney's fees incurred by the holders of the Series C Preferred Stock in
connection with such action or suit and all other costs of collection. The
Corporation shall not assert its right to trial by jury in any action, suit or
proceeding arising from or related to this Series C Preferred Stock.
13. Exclusion of Other Rights. Except as may otherwise be required
-------------------------
by law and for the equitable rights and remedies that may otherwise be available
to holders of Series C Preferred Stock, the shares of Series C Preferred Stock
shall not have any designations, preferences, limitations or relative rights,
other than those specifically set forth in these resolutions (as such
resolutions may, subject to paragraph 8, be amended from time to time) and in
the Certificate of Incorporation of this Corporation.
14. Headings. The headings of the various paragraphs and
--------
subparagraphs hereof are for convenience of reference only and shall not affect
the interpretation of any of the provisions hereof.
FURTHER RESOLVED, that the appropriate officers of this Corporation
are hereby authorized to execute and acknowledge a certificate setting forth
these resolutions and to cause such
27
<PAGE>
certificate to be filed and recorded, in accordance with the requirements of
Section 151(g) of the General Corporation Law of the State of Delaware."
The undersigned has signed this Certificate of Designations on this
29th day of September, 2000.
/s/ Mark D. Rozells
--------------------------------------
Name: Mark D. Rozells
Title: Vice President
28
