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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Telephone and Data Systems, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 36-2669023
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(State of Incorporation or Organization) (I.R.S. Employer Identification No.)
30 North LaSalle Street, Chicago, Illinois 60602
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(Address of Principal Executive Offices) (Zip Code)
If this form relates to the registration of If this form relates to the
a class of securities pursuant to Section registration of a class of
12(b) of the Exchange Act and is effective securities pursuant to Section
pursuant to General Instruction A.(c), 12(g) of the Exchange Act and is
please check the following box.|_| effective pursuant to General
Instruction A.(d), please check
the following box.|_|
Securities Act registration statement file number to which this form relates:
N/A
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(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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Common Shares, par value $.01 American Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
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EXPLANATORY NOTE
This Amendment to the Registration Statement on Form 8-A of the Registrant
is being filed for the purpose of amending the Form 8-A of the
Registrant to file the Restated Certificate of Incorporation of the Registrant,
as amended on July 10, 1998.
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Registrant's Securities to be Registered.
The description (the "Description") of the Registrant's Common Shares, par
value $.01 per share, appearing under the caption "Proposal 1 - Tracking Stock
Proposal" in the Registrant's Proxy Statement/Prospectus, dated March 24, 1998,
as supplemented, is incorporated herein by reference. Any subsequent amendment
or any report filed for the purpose of updating the Description is deemed to be
incorporated herein by reference.
The Common Shares are traded on the American Stock Exchange under the
symbol "TDS."
Item 2. Exhibits.
Exhibit
Number Description of Document
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3.1 Restated Certificate of Incorporation of the Registrant, as
amended.
3.2 Restated Bylaws of the Registrant, are hereby incorporated by
reference to Exhibit 3.2 to the Registrant's Current Report on
Form 8-K dated May 22, 1998.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
TELEPHONE AND DATA SYSTEMS, INC.
Date: July 10, 1998 By: /s/ Gregory J. Wilkinson
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Name: Gregory J. Wilkinson
Title: Vice President and Controller
SIGNATURE PAGE TO TDS 8-A/A DATED JULY 10, 1998
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EXHIBIT INDEX
Exhibit
Number Description of Document
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3.1 Restated Certificate of Incorporation of the Registrant, as
amended.
3.2 Restated Bylaws of the Registrant, are hereby incorporated by
reference to Exhibit 3.2 to the Registrant's Current Report on
Form 8-K dated May 22, 1998.
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EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
TELEPHONE AND DATA SYSTEMS, INC.
Telephone and Data Systems, Inc., a corporation organized and existing
under and pursuant to the provisions of the General Corporation Law of the State
of Delaware (the "Corporation"), does hereby certify as follows:
FIRST: The original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of the State of Delaware on December 12, 1997.
The Corporation hereby restates and integrates and further amends the
Certificate of Incorporation of the Corporation by revising such document in its
entirety as follows:
ARTICLE I
The name of the Corporation is Telephone and Data Systems, Inc.
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The Corporation shall have unlimited power to engage in, and to do any
lawful act concerning, any and all lawful business for which corporations may be
organized under the Delaware General Corporation Law above mentioned.
ARTICLE IV
A. Authorized Shares.
1. Subject to paragraph 3 of this Section A and Section B.1, the aggregate
number of shares of capital stock which the Corporation is authorized to issue
is 475,000,000 shares, and the designation of each class or series, the number
of shares of each class or series and the par value of the shares of each class
or series, are as follows:
<TABLE>
<CAPTION>
Class Series No. of Shares Par Value
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<S> <C> <C> <C>
Common Shares None 100,000,000 $.01 per share
Series A Common Shares None 25,000,000 $.01 per share
Special Common Shares None 20,000,000 $.01 per share
United States Cellular Group Common None 140,000,000 $.01 per share
Shares
TDS Telecommunications Group Common None 90,000,000 $.01 par value
Shares
Aerial Communications Group Common None 95,000,000 $.01 par value
Shares
Undesignated Shares See Section B.1 4,720,599 $.01 par value
Preferred Shares See below 279,401 $.01 par value
</TABLE>
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The following series of Preferred Shares Originally Issued by TDS Iowa (as
defined in Section B.19 of this Article IV) before October 31, 1981 are referred
to as the "Pre-81 Preferred Shares."
Series No. of Shares
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A 1,395
B 1,955
D 646
G 1,368
H 1,188
N 2,347
The following series of Preferred Shares Originally Issued by TDS Iowa after
October 31, 1981 are referred to as the "Post-81 Preferred Shares."
Series No. of Shares
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O 629
S 1,209
U 1,100
BB 18,500
DD 42,540
EE 8,291
GG 26,919
II 3,746
JJ 1,310
KK 1,403
LL 1,487
QQ 8,368
SS 125,000
TT 30,000
2. As of the effective date of this Restated Certificate of Incorporation,
the series of Preferred Shares set forth above shall have the preferences,
qualifications, limitations, restrictions and rights set forth in this Restated
Certificate of Incorporation, including Attachment I hereto, which Attachment is
incorporated herein and made a part hereof.
3. The number of authorized Common Shares, Series A Common Shares, Special
Common Shares, Cellular Group Common Shares, Telecom Group Common Shares, Aerial
Group Common Shares or Undesignated Shares may be increased or decreased at any
time or from time-to-time (but not below the number of such shares then
outstanding in such class, respectively) by the affirmative vote of the holders
of a majority of the voting power of shares of capital stock of the Corporation
entitled to vote on all matters (not including shares entitled to vote only in
the election of directors or as otherwise required by law, including Section
242(b)(2) of the DGCL) pursuant to paragraph 8(c) of Section B of this Article
IV.
4. The Board shall have the authority to designate, prior to the time of
the first issuance of shares of any class or series of Tracking Stock (as
defined in Section B.19), the number of such shares which shall initially
constitute the number of shares which shall represent 100% of the common equity
of the related Tracking Group, the Number of Shares Issuable with Respect to
Retained Interest and the Number of Shares Issuable with Respect to Inter-Group
Interest, if any.
5. As of the first date of issuance of any class of Tracking Stock, the
outstanding series of Preferred Shares shall be attributed entirely to the TDS
Group. After the first date of issuance of any class of Tracking Stock, any
series of Undesignated Shares which are designated and issued, as preferred or
common stock, shall be attributed entirely to one Group or among two or more
Groups, as may be determined by the Board, taking into consideration the use of
proceeds from and purposes for such issuance and other factors.
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6. As of the first date of issuance of any class of Tracking Stock, all
Pre-Distribution Convertible Securities (as defined in Section B.19) shall be
attributed entirely to the TDS Group. After the first date of issuance of any
class of Tracking Stock, any Convertible Securities which are issued shall be
attributed entirely to one Group or among two or more Groups, as may be
determined by the Board, taking into consideration the use of proceeds from and
purposes for such issuance and other factors.
7. As of the first date of issuance of any class of Tracking Stock, any
Committed Acquisition Shares shall be attributed entirely to the TDS Group.
After the first date of issuance of any class of Tracking Stock, any Committed
Acquisition Shares shall be attributed entirely to one Group or among two or
more Groups, as may be determined by the Board, taking into consideration the
use of proceeds from and purposes for such issuance and other factors.
B. Preferences, Qualifications, Limitations, Restrictions and Rights of
Shares. The preferences, qualifications, limitations, restrictions, and the
special or relative rights of the Common, Series A Common, Special Common,
Cellular Group Common, Telecom Group Common, Aerial Group Common, Undesignated
and Preferred Shares are:
1. Issue of Undesignated Shares in Series. Authority is hereby vested in
the Board to divide any or all of the Undesignated Shares into one or more
classes or series of common or preferred stock, and to further divide any of
those classes or series, and to fix and determine by resolution as to each class
or series so established:
(a) the designation of such class or series, the number of shares to
constitute such class or series and par value or stated value thereof;
(b) the rate of dividend and the terms thereof;
(c) the price at and terms and conditions by which shares may be
redeemed;
(d) the amount payable upon shares in event of voluntary or
involuntary liquidation;
(e) sinking fund provisions for the redemption or purchase of shares;
(f) the terms and conditions on which shares may be converted, if the
shares of any series are issued with the privilege of, or subject to
mandatory, conversion;
(g) voting rights, if any, but in no event more than ten votes per
share in connection with any matter; and
(h) such other designations, preferences and relative, participating,
optional or other special rights, and qualifications or restrictions
thereof, as shall be stated and expressed in a resolution or resolutions
providing for the issuance of such stock adopted by the Board. Any of the
voting powers, designations, preferences, rights and qualifications,
limitations or restrictions of any such class or series of stock may be
made dependent upon facts ascertainable outside this Restated Certificate
of Incorporation or of any amendment thereto, or outside the resolution or
resolutions providing for the issue of such stock adopted by the Board
pursuant to the foregoing authority vested in it by this Restated
Certificate of Incorporation, provided that the manner in which such facts
shall operate upon the voting powers, designations, preferences, rights and
qualifications, limitations or restrictions of such class or series is
clearly and expressly set forth in the resolution or resolutions providing
for the issue of such stock adopted by the Board. The term "facts" as used
in this paragraph includes, but is not limited to, the occurrence of any
event, including a determination or action by any person or body, including
the Corporation.
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2. Dividends.
(a) Except as otherwise set forth in Attachment I hereto or as
otherwise provided in any designation of a class or series of Undesignated
Shares at the time that such class or series is originally established: (i)
the holders of Preferred Shares and of each class or series of Undesignated
Shares which has been designated as preferred stock shall be entitled to
receive, when and as declared by the Board, dividends at the rate fixed for
such series, and no more, payable in quarterly installments on the first
days of March, June, September and December in each year; (ii) dividends on
all series of Preferred Shares and all classes and series of Undesignated
Shares which have been designated as preferred stock shall be cumulative
from and after the respective dates of issuance; (iii) no dividends shall
be declared on the shares of any series of Preferred Shares or any class or
series of Undesignated Shares which have been designated as preferred stock
for any dividend period unless the full dividend for all prior dividend
periods shall have been declared or shall be declared at the same time upon
all Preferred Shares, and all classes and series of Undesignated Shares
which have been designated as preferred stock, outstanding during such
prior dividend periods; (iv) no dividends shall be declared on the shares
of any series of Preferred Shares, or any class or series of Undesignated
Shares which have been designated as preferred stock, unless a dividend for
the same period shall be declared at the same time upon all series of
Preferred Shares and all classes and series of Undesignated Shares which
have been designated as preferred stock, outstanding during said period, in
like proportion to the dividend rate upon such shares; and (v) no dividends
shall be paid on any shares of Common Stock unless full dividends on all
series of Preferred Shares, and all classes and series of Undesignated
Shares which have been designated as preferred stock, for all past dividend
periods and for the current dividend period, shall have been declared and
the Corporation shall have paid such dividends or shall have set apart a
sum sufficient for the payment thereof.
(b) Dividends on any class or series of Common Stock may be declared
and paid only out of the lesser of (i) assets of the Company legally
available therefor and (ii) the Available Dividend Amount (as defined in
paragraph 19 of this Section B) with respect to such class or series.
Subject to the foregoing, the Board shall have the authority to declare and
pay dividends on all or less than all of the classes or series of Common
Stock in equal or unequal amounts, notwithstanding the amount of assets
available for dividends on any class or series, the respective voting and
liquidation rights of any class or series, the amount of prior dividends
declared on any class or series or any other factor; provided, however,
that no dividends shall be declared or paid on the Series A Common Shares
unless the same, or greater, dividends, on a per share basis, are declared
and paid at the same time on the Common Shares and the Special Common
Shares, and if dividends shall be declared or paid on the Common Shares or
the Special Common Shares, the same dividends, on a per share basis, shall
be declared and paid at the same time on the Special Common Shares and the
Common Shares, respectively, except, in each case, as otherwise expressly
provided in this Restated Certificate of the Corporation.
3. Share Distributions. Notwithstanding anything to the contrary herein, if
at any time a dividend or other distribution is to be paid in shares of Common
Stock on shares of Common Stock, such dividend or other distribution shall be
paid as only as follows (including, in each case, Convertible Securities which
are exercisable for or convertible or exchangeable into such shares to be
distributed):
(a) Common Shares may be distributed on an equal per share basis to
holders of Common Shares, Series A Common Shares may be distributed on an
equal per share basis to holders of Series A Common Shares, and Special
Common Shares may be distributed on an equal per share basis to holders of
Special Common Shares (if any are then outstanding);
(b) Common Shares may be distributed on an equal per share basis to
holders of Common Shares and Series A Common Shares, and Special Common
Shares may be distributed on an equal per share basis to holders of Special
Common Shares (if any are then outstanding);
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(c) Series A Common Shares may be distributed on an equal per share
basis to holders of Common Shares and Series A Common Shares, and Special
Common Shares may be distributed on an equal per share basis to holders of
Special Common Shares (if any are then outstanding);
(d) Special Common Shares may be distributed on an equal per share
basis to holders of Common Shares, Series A Common Shares and Special
Common Shares (if any are then outstanding);
(e) shares of a class or series of Tracking Stock may be distributed
on an equal per share basis to holders of that class or series of Tracking
Stock;
(f) shares of a new class or series of capital stock which is intended
to represent a subdivision or new business of a Group, or any assets
attributed by the Board to such Group, may be distributed on an equal per
share basis to holders of common stock representing an interest in such
Group;
(g) shares of any class or series of Tracking Stock of a Tracking
Group may be distributed on an equal per share basis to holders of Common
Shares, Series A Common Shares and Special Common Shares (if any are then
outstanding), but only if the sum of (i) the number of shares of such class
or series of Tracking Stock to be so distributed (or the number of such
shares which would be issuable at such time upon the exercise, conversion
or exchange of any Convertible Securities to be so distributed) and (ii)
the Number of Shares Issuable to Third Parties related to such class or
series of Tracking Stock which are then are attributable to the TDS Group,
is less than or equal to the Number of Shares Issuable with Respect to
Retained Interest in such Tracking Group; and
(h) shares of any class or series of Tracking Stock of a Tracking
Group (for this purpose, the "Issuer Group"), may be distributed on an
equal per share basis to holders of a class or series of Tracking Stock of
any other Tracking Group (for this purpose, the "Investor Group"), but only
if the sum of (i) the number of shares of such class or series of Tracking
Stock of the Issuer Group to be so distributed (or the number of such
shares which would be issuable at such time upon the exercise, conversion
or exchange of any Convertible Securities to be so distributed) and (ii)
the Number of Shares Issuable to Third Parties related to the class or
series of Tracking Stock of the Issuer Group which are then are
attributable to the Investor Group, is less than or equal to the Number of
Shares Issuable with Respect to Inter-Group Interest in the Issuer Group by
the Investor Group.
In the case of any such share dividend the Board may permit the holders of
Common Stock to elect to receive cash in lieu of shares of stock. In any
dividend or distribution of Common Stock, the same number of shares of Common
Stock on a per share basis shall be distributed with respect to Common Shares,
Series A Common Shares and Special Common Shares.
4. Distribution of TDS Group Subsidiary in Dividend. Subject to paragraph
2(b) of Section B of Article IV, if at any time a distribution is to be made of
shares of capital stock of a subsidiary included in the TDS Group (for this
purpose, a "TDS Group Subsidiary"), such TDS Group Subsidiary shares may only be
distributed to the holders of Series A Common Shares, Common Shares and any
issued Special Common Shares and, in such event, the Board shall, to the extent
practicable, distribute TDS Group Subsidiary shares corresponding to Series A
Common Shares to the holders of Series A Common Shares, distribute TDS Group
Subsidiary shares corresponding to Common Shares to the holders of Common
Shares, and distribute TDS Group Subsidiary shares corresponding to Special
Common Shares to the holders of Special Common Shares, if any are then
outstanding; provided, however, that the same number of shares of common stock
of the TDS Group Subsidiary must be distributed with respect to each Series A
Common Share, Common Share and any issued Special Common Share. If practicable,
the Board shall recapitalize such TDS Group Subsidiary through an amendment to
its charter or otherwise, such that the relative rights, limitations and
preferences of the shares of capital stock of such TDS Group Subsidiary
substantially correspond to the Series A Common Shares, Common Shares and
Special Common Shares of the Corporation and their relative rights, limitations
and preferences, as may be determined to be necessary or appropriate in the sole
discretion of the Board, in order to permit the distribution to be effected in
the foregoing manner; provided, however, that if Special Common Shares are then
outstanding and the TDS Group Subsidiary has or will have shares corresponding
to Series A Common Shares and Common Shares but does not and will not have
shares corresponding to Special Common Shares and the Board determines that it
is impracticable to recapitalize the subsidiary as provided in this sentence to
create shares corresponding to Special Common Shares, the Board shall distribute
TDS Group Subsidiary shares corresponding to Common Shares of such TDS Group
Subsidiary to the holders of Special Common Shares.
5. Distribution of Tracking Group Subsidiary in Dividend. Subject to
paragraph 2(b) of Section B of Article IV, if at any time a distribution is to
be made of shares of capital stock of a subsidiary (for this purpose, a Non-
Qualifying Subsidiary") included in a Tracking Group (for this purpose, the
"Distributing Group"), other than a Qualifying Subsidiary or Qualifying
Subsidiaries holding all of the assets and liabilities of a Tracking Group, and
if there is a Retained Interest in such Distributing Group, the Board shall, to
the extent practicable, distribute Non-Qualifying Subsidiary shares
corresponding to Special Common Shares to the holders of Tracking Stock of such
Distributing Group equal to the product of the Outstanding Interest Fraction
multiplied by the number of all of the outstanding shares of the Non-Qualifying
Subsidiary owned directly or indirectly by the Corporation, on a pro rata basis.
The Board, in its sole discretion, may cause
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the Corporation to retain the balance of the outstanding shares of the common
stock of the Non-Qualifying Subsidiaries in respect of the Retained Interest and
any Inter-Group Interest in the Distributing Group or, in the sole discretion of
the Board, Non-Qualifying Subsidiary shares may be distributed to the holders of
TDS Group Shares or shares of any other Tracking Stock as follows: (a) if the
Board determines to distribute Non-Qualifying Subsidiary shares to the holders
of TDS Group Shares with respect to the Retained Interest, it shall, to the
extent practicable, distribute Non-Qualifying Subsidiary shares corresponding to
Series A Common Shares to the holders of Series A Common Shares, subsidiary
shares corresponding to Common Shares to the holders of Common Shares, and
subsidiary shares corresponding to Special Common Shares to the holders of
Special Common Shares with respect to any Retained Interest in such Tracking
Group, provided, that the same number of shares of Non-Qualifying Subsidiary
common stock must be distributed with respect to each Series A Common Share,
Common Share and any issued Special Common Share and (b) if the Board determines
to distribute Non-Qualifying Subsidiary shares to the holders of any class or
series of Tracking Stock of a Tracking Group other than the Distributing Group
with respect to any Inter-Group Interest by such Tracking Group in the
Distributing Group, it must, to the extent practicable, distribute
Non-Qualifying Subsidiary shares corresponding to Special Common Shares to the
holders of Tracking Stock of such other Tracking Group with respect to any such
Inter-Group Interest in the Distributing Group. If practicable, the Board shall
recapitalize such Non-Qualifying Subsidiary through an amendment to its charter
or otherwise, such that the relative rights, limitations and preferences of the
shares of capital stock of the Non-Qualifying Subsidiary substantially
correspond to the Series A Common Shares, Common Shares and Special Common
Shares of the Corporation and their relative rights, limitations and
preferences, as may be determined to be necessary or appropriate in the sole
discretion of the Board, in order to permit the distribution to be effected in
the foregoing manner; provided, that if the Non- Qualifying Subsidiary has or
will have shares corresponding to Series A Common Shares and Common Shares but
does not have and will not have shares corresponding to Special Common Shares
and the Board determines that it is impracticable to recapitalize such
subsidiary as provided in this sentence to create shares corresponding to
Special Common Shares, the Board shall distribute Non-Qualifying Subsidiary
shares corresponding to Common Shares to the holders of Special Common Shares
and to holders of any class of Tracking Stock who would otherwise be entitled to
receive subsidiary shares corresponding to Special Common Shares.
6. Certain Provisions Relating to Liquidation.
(a) Subject to paragraph 6(b) of this Section B, in the event of a
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, after payment or provision for payment of the
debts and other liabilities of the Corporation and subject to the prior
payment in full of the preferential amounts to which any class or series of
Preferred Shares or Undesignated Shares is entitled, the holders of the
outstanding shares of Common Stock shall be entitled to receive the
remaining assets of the Corporation, regardless of the Group to which such
assets are attributed in accordance with this Article IV, divided among the
holders of Common Stock in accordance with the per share "Liquidation
Units" attributable to each class of Common Stock. Each Series A Common
Share, Common Share and Special Common Share is hereby attributed one
Liquidation Unit, each Cellular Group Common Share is hereby attributed 2.5
Liquidation Units, each Telecom Group Common Share is hereby attributed .9
of a Liquidation Unit and each Aerial Group Common Share is hereby
attributed 1.1 Liquidation Units. The Liquidation Unit of each class or
series of Common Stock shall be adjusted by the Board as appropriate to
reflect equitably any subdivision (by stock split or otherwise) or
combination (by reverse stock split or otherwise) of such class of Common
Stock or any dividend or other distribution of shares or similar
transaction with respect to such class of Common Stock. Whenever a change
in the Liquidation Units with respect to any class or series of Common
Stock occurs, the Corporation shall prepare and file a statement of such
change with the Secretary of the Corporation and distribute a notice of
such change to all holders of shares of such class or series of Common
Stock, together with a notice of such stock split, reverse split,
distribution or other transaction requiring such change.
(b) Prior to the distribution of the remaining assets of the
Corporation as set forth in paragraph 6(a) of this Section B, the Board may
redeem all shares of Tracking Stock of all Tracking Groups in exchange for
shares of a Qualifying Subsidiary or Qualifying Subsidiaries holding all of
the assets and liabilities of the related Tracking Group pursuant to
paragraph 13 of this Section B.
(c) A consolidation, merger, or reorganization of the Corporation with
any other corporation or corporations, or a sale of all or substantially
all of the assets of the Corporation, shall not be considered a
dissolution, liquidation, or winding up of the Corporation within the
meaning of these provisions.
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7. Preemptive Rights. No holder of shares of any class or series of the
Corporation shall have any preemptive right pursuant to this Restated
Certificate of Incorporation to subscribe for or acquire any unissued or
treasury shares or other securities of the Corporation of the same or any other
class or series, whether such shares or securities be hereby or hereafter
authorized, except that holders of Series A Common Shares shall have a
preemptive right to acquire unissued or treasury Series A Common Shares or
securities convertible into or exchangeable for Series A Common Shares or
carrying a right to subscribe to or acquire Series A Common Shares; provided,
however, that no preemptive right shall exist to acquire any Series A Common
Shares sold otherwise than for cash.
8. Voting.
(a) With respect to the election of directors, the holders of (i)
Pre-81 Preferred Shares, (ii) Common Shares, (iii) Special Common Shares,
(iv) shares of all classes or series of Tracking Stock and (v) any series
of Undesignated Shares which, at the time such series of Undesignated
Shares was originally established, provided that the holders of such series
shall vote in the election of directors together with the holders of Pre-81
Preferred Shares, Common Shares, Special Common Shares and shares of
Tracking Stock (for this purpose, the "Public Holders"), voting together as
one group, shall be entitled to elect at each annual meeting that number of
directors which (together with all directors whose terms do not expire at
the time of such meeting and who were previously elected by such holders)
constitutes 25% of the total number of directors of the Corporation
(rounded up to the nearest whole number), plus one director, and for this
purpose the total number of directors of the Corporation shall be
determined without regard to any director(s) whom the holders of one or
more classes or series of Undesignated Shares have elected or have the
right to elect (without regard to this Section B.8), and in such election
each holder of Common Shares and Special Common Shares shall be entitled to
one vote for each share of such stock standing in the name of the holder on
the books of the Corporation, the holders of Tracking Stock shall have the
votes set forth in paragraph 8(d) of this Section B, the holders of series
of Pre-81 Preferred Shares shall have the voting rights set forth on
Attachment I hereto and the holders of any class or series of Undesignated
Shares shall have the voting rights fixed and determined by the Board at
the time such series of Undesignated Shares was originally established.
(b) The holders of (i) Post-81 Preferred Shares, (ii) Series A Common
Shares and (iii) any class or series of Undesignated Shares which, at the
time such class or series of Undesignated Shares was originally
established, provided that the holders of such class or series shall vote
in the election of directors together with the holders of Post-81 Preferred
Shares and Series A Common Shares (for this purpose, the "Series A
Holders"), voting together as one group, shall be entitled to elect at each
annual meeting that number of directors which (together with all directors
whose terms do not expire at the time of such meeting and who were
previously elected by such holders) are not elected by the Public Holders,
as provided in paragraph 8(a) of this Section B, subject to the rights, if
any, of the holders of any class or series of Undesignated Shares to elect
one or more directors (without regard to this Section B.8), and in such
election each holder of Series A Common Shares shall be entitled to ten
votes for each share of such stock standing in the name of the holder on
the books of the Corporation, the holders of series of Post-81 Preferred
Shares shall have the voting rights set forth on Attachment I hereto and
the holders of any class or series of Undesignated Shares shall have the
voting rights fixed and determined by the Board at the time such class or
series of Undesignated Shares was originally established.
(c) With respect to all matters other than the election of directors,
each holder of a series of Pre-81 Preferred Shares or Post-81 Preferred
Shares shall have the voting rights set forth on Attachment I hereto, each
holder of Common Shares shall be entitled to one vote for each share of
such stock standing in the name of the holder on the books of the
Corporation, each holder of Series A Common Shares shall be entitled to ten
votes for each share of such stock standing in the name of the holder on
the books of the Corporation and the holders of any class or series of
Undesignated Shares shall have the voting rights fixed and determined by
the Board at the time such class or series of Undesignated Shares was
originally established. Neither the holders of Special Common Shares nor
the holders of shares of any class of Tracking Stock shall be entitled to
vote with respect to any matter other than the election of directors as set
forth in subparagraph (a) of this paragraph 8, unless such holders must
vote as required by the DGCL or other applicable law or regulation.
(d) Upon the first issuance of shares of any class or series of
Tracking Stock, each of such shares shall be entitled to one vote per share
in the election of directors elected by the Public Holders; provided,
however,
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if shares of a class of Tracking Stock have been traded on a national
securities exchange or the Nasdaq Stock Market, or traded in the
over-the-counter market, for at least 25 Trading Days immediately prior to
any Adjustment Date (as hereinafter defined), the votes per share which
each share of a class of Tracking Stock shall have in the election of
directors at each annual meeting of shareholders pursuant to paragraph 8(a)
of this Section B shall be equal to the quotient (calculated to three
decimal places) determined by dividing the Aggregate Votes (as hereinafter
defined) of such class of Tracking Stock on the Adjustment Date for such
annual meeting, by the average daily number of outstanding shares of such
class of Tracking Stock during the Calculation Period (as hereinafter
defined) for such Adjustment Date. The Aggregate Votes of a class of
Tracking Stock on an Adjustment Date shall be equal to the product of the
Market Capitalization Percentage (as hereinafter defined) of such class of
Tracking Stock multiplied by the Aggregate Public Holder Votes (as
hereinafter defined) on the Adjustment Date for such annual meeting. The
Aggregate Public Holder Votes shall be equal to the quotient (calculated to
the nearest whole number) determined by dividing the sum of the average
daily number of outstanding Pre-81 Preferred Shares, Common Shares and
Special Common Shares (the "One-Vote Shares") during the Calculation
Period, by the Market Capitalization Percentage of the One-Vote Shares. The
Market Capitalization Percentage of any class of Tracking Stock and of the
One-Vote Shares shall be equal to the average daily ratio (represented as a
percentage calculated to three decimal places) of the Market Capitalization
of such class of Tracking Stock or the aggregate Market Capitalization of
the One-Vote Shares, as the case may be, to the aggregate Market
Capitalization of all shares held by the Public Holders, calculated for the
twenty-Trading Day period (the "Calculation Period") ending ten Trading
Days prior to the record date for each annual meeting of shareholders (the
"Adjustment Date"). The number of votes per share to which shares of
classes of Tracking Stock shall be entitled at any time in connection with
the election or removal of directors by the Public Holders shall be such
number of votes per share that were determined on the last preceding
Adjustment Date relating to an annual meeting of shareholders of the
Corporation, and such number of votes per share to which shares of Tracking
Stock shall be entitled shall not be changed until the next succeeding
Adjustment Date for the next succeeding annual meeting of shareholders of
the Corporation.
(e) In the event the number of issued and outstanding Series A Common
Shares at any time falls below 500,000, then with respect to the election
of directors at the next annual meeting and at each annual meeting
thereafter, the holders of all outstanding Preferred Shares, Common Shares,
Series A Common Shares, Special Common Shares, Cellular Group Common
Shares, Telecom Group Common Shares and Aerial Group Common Shares, and any
class or series of Undesignated Shares which, at the time such class or
series of Undesignated Shares was originally established, provided that the
holders of such class or series shall vote in the election of directors
with the Public Holders or the Series A Holders, shall be entitled to elect
all of the directors of the Corporation standing for election at any
meeting of shareholders, subject to the rights, if any, of the holders of
one or more classes or series of Undesignated Shares to elect one or more
directors (without regard to this Section B.8), and in each such election
of directors each holder of Pre-81 Preferred Shares or Post-81 Preferred
Shares shall have the voting rights set forth on Attachment I hereto, each
holder of Common Shares and each holder of Special Common Shares shall be
entitled to one vote for each share of such stock standing in the name of
the holder on the books of the Corporation, each holder of Series A Common
Shares shall be entitled to ten votes for each share of such stock standing
in the name of the holder on the books of the Corporation, the holders of
Tracking Stock shall have the votes set forth in paragraph 8(f) of this
Section B and the holders of any class or series of Undesignated Shares
shall have the voting rights fixed and determined by the Board at the time
such class or series of Undesignated Shares was originally established.
(f) In the event the number of issued and outstanding Series A Common
Shares at any time falls below 500,000, the votes per share which each
share of a class of Tracking Stock shall have in the election of directors
at each annual meeting of shareholders shall be equal to the quotient
(calculated to three decimal places) determined by dividing the Adjusted
Aggregate Votes (as hereinafter defined) of such class of Tracking Stock on
the Adjustment Date for such annual meeting by the average daily number of
outstanding shares of such class of Tracking Stock during the Calculation
Period for such Adjustment Date. The Adjusted Aggregate Votes of a class of
Tracking Stock on an Adjustment Date shall be equal to the product of the
Adjusted Market Capitalization Percentage (as hereinafter defined) of such
class of Tracking Stock multiplied by the Aggregate Director Votes (as
hereinafter defined) on the Adjustment Date for such annual meeting. The
Aggregate Director Votes shall be equal to the quotient (calculated to the
nearest whole number) determined by dividing (i) the sum of (A) the average
daily number of One-Vote Shares and Post-81 Preferred Shares and (B) the
product of 10 and the average daily number of Series A Common Shares, in
each case during the Calculation Period, by (ii) the Aggregate Market
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Capitalization Percentage of the One-Vote Shares, Post-81 Preferred Shares
and the Series A Common Shares. The Aggregate Market Capitalization
Percentage of the One-Vote Shares, Post-81 Preferred Shares and the Series
A Common Shares shall be equal to the average daily ratio (expressed as a
percentage calculated to three decimal places) of the aggregate Market
Capitalization of the One-Vote Shares, the Post-81 Preferred Shares and the
Series A Common Shares to the aggregate Market Capitalization of all shares
of capital stock which are entitled to vote in the election of directors
pursuant to paragraph 8(e) of this Section B, calculated during the
Calculation Period ending on the Adjustment Date for an annual meeting. The
Adjusted Market Capitalization Percentage of any class of Tracking Stock
shall be equal to the average daily ratio (expressed as a percentage
calculated to three decimal places) of the Market Capitalization of such
class of Tracking Stock to the aggregate Market Capitalization of all
shares of capital stock which are entitled to vote in the election of
directors pursuant to paragraph 8(e) of this Section B, calculated during
the Calculation Period ending on the Adjustment Date for an annual meeting.
The number of votes per share to which shares of classes of Tracking Stock
shall be entitled at any time in connection with the election or removal of
directors shall be such number of votes per share that were determined on
the last preceding Adjustment Date relating to an annual meeting of
shareholders of the Corporation, and such number of votes per share to
which shares of Tracking Stock shall be entitled shall not be changed until
the next succeeding Adjustment Date for the next succeeding annual meeting
of shareholders of the Corporation.
9. Conversion at the Option of the Holder. Each outstanding Series A Common
Share shall be convertible into one Common Share or one Special Common Share at
any time at the holder's choice. Any such conversion shall be effected by the
presentation and surrender of the certificates representing the Series A Common
Shares to be converted at the office of the Corporation or at such other place
as may from time to time be designated by the Corporation, in such form and
accompanied by all transfer taxes (or proof of payment thereof), if any, as
shall be required for such transfer, and upon such surrender, the holder of such
stock shall be entitled to receive in exchange therefor certificates for fully
paid and non- assessable Common Shares or Special Common Shares, as the case may
be, of the Corporation at the rate aforesaid, and such holder shall be
registered as the holder of such Common Shares or Special Common Shares, as the
case may be.
10. Disposition of Assets of a Tracking Group.
(a) If the Corporation disposes of all or substantially all of the
properties and assets of a Tracking Group (defined as 80% or more of the
then current market-value (as determined by the Board) of the properties
and assets of such Tracking Group as of such date), whether by sale,
transfer, assignment, merger, consolidation, contribution of assets or
stock or otherwise (a "Disposition"), in one transaction or a series of
related transactions with any one or more persons, entities or groups,
other than in a transaction referred to in the following sentence, the
Corporation shall take one of the actions listed in paragraph 10(b) of this
Section B on or prior to the 90th Trading Day following the consummation of
a Disposition. This requirement shall not apply to a Disposition (i) in
connection with the disposition by the Corporation of all of the
Corporation's properties and assets in one transaction or a series of
related transactions or in connection with the liquidation, dissolution or
winding up of the Corporation, (ii) by dividend, other distribution or
redemption in accordance with any provision described under paragraphs 2,
3, 4, 5, 6 or 13 of this Section B, (iii) to any person, entity or group
which the Corporation, directly or indirectly, after giving effect to the
Disposition, controls (as determined by the Board) or (iv) in connection
with a Related Business Transaction. For purposes of this paragraph 10, the
Tracking Group affected by the Disposition of its assets is referred to as
the "Affected Tracking Group" and the Tracking Stock of such Affected
Tracking Group is referred to as the "Affected Tracking Stock."
(b) Other than as described in paragraph (a), the Corporation shall
take one of the following actions in the event of a Disposition:
(i) subject to paragraph 2(b) of this Section B, declare and
distribute a special dividend in cash, securities or other property
(other than a dividend or distribution of Common Stock of the
Corporation) or any combination thereof to the holders of the
outstanding shares of the Affected Tracking Stock, in an aggregate
amount equal to the product of the Outstanding Interest Fraction of
the Affected Tracking Group as of the record date for determining the
holders entitled to receive such dividend and the Fair Value of the
Net Proceeds of such Disposition, such dividend to be distributed
equally on a share- for-share basis to all outstanding shares of the
Affected Tracking Stock, except as provided in paragraph 2(d) of this
Section B;
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(ii) provided that there are assets of the Corporation legally
available therefor and the Available Dividend Amount for the Affected
Tracking Stock would have been sufficient to pay a dividend in lieu
thereof as described in subparagraph (i) of this paragraph, then:
(A) if such Disposition involves all (not merely
substantially all) of the properties and assets of the Affected
Tracking Group, redeem all outstanding shares of the Affected
Tracking Stock in exchange for cash, securities or other property
(other than Common Stock of the Corporation) or any combination
thereof on a pro rata basis in an aggregate amount equal to the
product of the Adjusted Outstanding Interest Fraction for the
Affected Tracking Group as of the date of such complete
redemption and the Fair Value of the Net Proceeds of such
Disposition, such aggregate amount to be allocated on a pro rata
basis to all outstanding shares of the Affected Tracking Stock,
except as provided in paragraph 2(d) of this Section B; or
(B) if such Disposition involves substantially all (but not
all) of the properties and assets of the Affected Tracking Group,
apply an aggregate amount of cash, securities or other property
(other than Common Stock of the Corporation) or any combination
thereof equal to the product of the Affected Tracking Group's
Outstanding Interest Fraction as of the date shares are selected
for redemption and the Fair Value of the Net Proceeds of such
Disposition to the redemption of outstanding shares of the
Affected Tracking Stock, such aggregate amount to be allocated on
a pro rata basis or by lot (except as provided in paragraph 2(d)
of this Section B) to the shares of the Affected Tracking Stock
to be redeemed in a manner such that there shall be redeemed the
number of whole shares of Affected Tracking Stock which have in
the aggregate an average Market Value during the forty-Trading
Day period beginning on the 11th Trading Day following the
consummation of the Disposition closest to the product of the
Outstanding Interest Fraction as of the date such shares are
selected for redemption multiplied by the Fair Value of the Net
Proceeds of such Disposition (but in no event more than all of
the shares of Affected Tracking Stock then outstanding); or
(iii) convert each outstanding share of the Affected Tracking
Stock of the Affected Tracking Group into a number (or fraction) of
fully paid and non-assessable Special Common Shares or shares of any
other class or classes of Tracking Stock (or any combination thereof
on a pro rata basis) equal to 110% (the "Disposition Conversion
Percentage") of the average daily ratio (calculated to the nearest
five decimal places) of the Market Value of (y) one share of Affected
Tracking Stock to (z) the Market Value of one Special Common Share or
share of such other class or classes of Tracking Stock (or any
combination thereof on a pro rata basis) during a forty-Trading Day
period beginning on the 11th Trading Day after consummation of the
Disposition.
In the event of the conversion of the Affected Tracking Stock
into Special Common Shares or shares of another class or classes of
Tracking Stock, the Fair Value of the Net Proceeds of such Disposition
shall be attributed to the Group related to the shares which are
issued upon such conversion (on a pro rata basis if a combination of
such shares are issued).
(c) The Corporation may elect to pay the dividend or redemption price
referred to in subparagraph (i) or (ii) of paragraph 10(b) of this Section
B either in the same form as the proceeds of the Disposition were received
or in any other combination of cash or securities or property (other than
Common Stock of the Corporation) that the Board determines will have an
aggregate market value on a fully distributed basis of not less than the
amount equal to:
(i) in the case of subparagraph (i) or clause (B) of subparagraph
(ii) of this paragraph 10(b), the product of the applicable
Outstanding Interest Fraction and the Fair Value of the Net Proceeds
of such Disposition; or
(ii) in the case of clause (A) of subparagraph (ii) of this
paragraph 10(b), the product of the applicable Adjusted Outstanding
Interest Fraction and the Fair Value of the Net Proceeds of such
Disposition.
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(d) If the dividend or redemption referred to in paragraph 10(b) of
Section B is paid in securities of an issuer other than the Corporation
(the "Successor"), and if there is a Retained Interest in the Affected
Tracking Group at such time, the Board shall, to the extent practicable,
distribute Successor shares corresponding to Special Common Shares to the
holders of shares of the Affected Tracking Stock. In the event of a
Disposition, the Corporation shall not be required to make any payment or
other distributions to the holders of TDS Group Shares or shares of any
class of Tracking Stock other than the Affected Tracking Stock. The
Successor shares relating to any Retained Interest or Inter-Group Interest
at the time of the Disposition may be retained by the Corporation and
attributed to the TDS Group or the other Tracking Group, respectively, or
some or all of such shares may be distributed pro rata to the holders of
the TDS Group Shares or the applicable Tracking Stock, respectively, in the
sole discretion of the Board. If the Board determines to distribute
Successor shares with respect to such a Retained Interest or Inter-Group
Interest, it shall, to the extent practicable, distribute Successor shares
corresponding to Special Common Shares to the holders of Tracking Stock of
another Tracking Group with respect to any such Inter- Group Interest, and
distribute Successor shares corresponding to Series A Common Shares to the
holders of Series A Common Shares, Successor shares corresponding to Common
Shares to the holders of Common Shares, and Successor shares corresponding
to Special Common Shares to the holders of Special Common Shares with
respect to any Retained Interest in such Tracking Group; provided that the
same number of shares of Successor common stock on a combined basis must be
distributed for each Series A Common Share, Common Share and any issued
Special Common Share. If practicable, the Board shall cause such Successor
to be recapitalized through an amendment to its charter or otherwise, such
that the shares of capital stock of such Successor and the relative rights,
limitations and preferences thereof substantially correspond to the Series
A Common Shares, Common Shares and Special Common Shares of the Corporation
and their relative rights, limitations and preferences, as may be
determined to be necessary or appropriate in the sole discretion of the
Board, in order to permit the distribution to be effected in the foregoing
manner.
(e) Subject to the terms of paragraph 10(b) of this Section B, the
Board shall have complete discretion as to which option in paragraph 10(b)
to select; provided, however, that once the disposition option selected by
the Board is publicly announced pursuant to paragraph 11 of this Section B,
the selection shall be irrevocable. The Board shall not be required to
select the option which results in the distribution with the highest value
to the holders of the shares of the Affected Tracking Stock or with the
smallest effect on the remaining classes and series of the Corporation's
Common Stock. In the event of a Disposition, the Corporation shall not be
required to make any payment or other distributions to the holders of
Common Shares, Series A Common Shares, Special Common Shares or shares of
any class of Tracking Stock other than the Affected Tracking Stock;
provided, however, the Corporation may, in the sole discretion of the
Board, make a distribution to such other shareholders in respect of any
Retained Interest or any Inter-Group Interest in the Affected Tracking
Group existing at the time of a Disposition; provided further, that if the
dividend or redemption referred to in paragraph 10(b) of this Section B is
paid in securities of a Successor, and if there is a Retained Interest in
the Affected Tracking Group at such time, the Board shall make any such
distribution in the manner provided pursuant to paragraph 10(d) of this
Section B.
(f) The Corporation may, in the sole discretion of the Board, at any
time prior to the first anniversary of a dividend on, or partial redemption
of, shares of Affected Tracking Stock following a Disposition, convert each
remaining outstanding share of Affected Tracking Stock into a number (or
fraction) of Special Common Shares or shares of any other class or classes
of Tracking Stock (or combination thereof on a pro rata basis) equal to the
product of the Disposition Conversion Percentage and the average daily
ratio (calculated to the nearest five decimal places) of the Market Value
of one Special Common Share or share of such other class or classes of
Tracking Stock (or any combination thereof on a pro rata basis) during a
twenty-Trading Day period ending on the fifth Trading Day prior to the date
of notice of such conversion.
(g) To the extent that any Shares Issuable to Third Parties are
included in the determination of the Adjusted Outstanding Interest
Fraction, the Corporation's obligations in respect of such securities shall
not be a reduction in the calculation of the Fair Value of the Net
Proceeds. In the event any redemption of Tracking Stock is made in
circumstances in which cash, securities or property are allocated to the
TDS Group in respect of Shares Issuable to Third Parties (such cash,
securities or other property being referred to herein as the "Reserved
Property"), the Corporation shall be permitted to segregate and hold such
property separate (in the case of any Reserved Property other than Special
Common Shares or shares of another class of Tracking Stock). In the event
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the Reserved Property is, for any reason, not delivered with respect to the
obligations relating to such Shares Issuable to Third Parties, such
Reserved Property shall revert to the TDS Group, subject to escheat laws,
and the former holders of the Affected Tracking Stock shall have no
interest in such Reserved Property. In the event of any conversion of
Tracking Stock into Special Common Shares or shares of any other class or
classes of Tracking Stock, the Corporation shall duly reserve Special
Common Shares or shares of such other class or classes of Tracking Stock or
combination thereof issuable with respect to Shares Issuable to Third
Parties of the Affected Tracking Stock.
(h) At the time of any dividend made as a result of a Disposition, the
TDS Group shall be credited, and the Affected Tracking Group shall be
charged (in addition to the charge for the dividend paid in respect of
outstanding shares of Affected Tracking Stock), with an amount equal to the
product of (i) the aggregate amount paid in respect of such dividend times
(ii) a fraction the numerator of which is the Retained Interest Fraction
and the denominator of which is the Outstanding Interest Fraction of such
Tracking Group.
(i) If any Inter-Group Interests in a Tracking Group exists at the
time of any dividend made as a result of a Disposition, each Tracking Group
holding such an Inter-Group Interest in the Affected Tracking Group shall
be credited, and the Affected Tracking Group shall be charged (in addition
to the charge for the dividend paid in respect of outstanding shares of
Affected Tracking Stock) with an amount equal to the product of (i) the
aggregate amount paid in respect of such dividend times (ii) a fraction the
numerator of which is the Inter-Group Interest Fraction and the denominator
of which is the Outstanding Interest Fraction of the Affected Tracking
Group.
(j) In the case of a Disposition in a series of related transactions,
the Disposition shall be deemed to have been consummated upon the
consummation of the last of the series of related transactions.
(k) The Board shall determine the redemption date or conversion date
pursuant to Section B.11 hereof.
11. Procedures Relating to Disposition Rights.
(a) Not later than the fifth Trading Day following the consummation of
a Disposition referred to above, the Corporation shall announce publicly by
press release (i) the Fair Value of the Net Proceeds of such Disposition,
(ii) the number of outstanding shares of Affected Tracking Stock, (iii)
information describing and indicating the number of Shares Issuable to
Third Parties of the Affected Tracking Stock, including the number of such
shares which are issuable as Committed Acquisition Shares and the number of
such shares into or for which Convertible Securities are then convertible,
exercisable or exchangeable, and the conversion, exercise or exchange
prices thereof (and stating which, if any, of such Convertible Securities
are Pre-Distribution Convertible Securities), (iv) the Disposition
Conversion Percentage, (v) the Outstanding Interest Fraction for the
Affected Tracking Stock as of a recent date preceding the date of such
notice and (vi) the Adjusted Outstanding Interest Fraction for the Affected
Tracking Stock as of a recent date preceding the date of such notice. Not
earlier than the 51st Trading Day and not later than the 55th Trading Day
following the consummation of such Disposition, the Corporation shall
announce publicly by press release which of the redemption options thereof
described in paragraph 10(b) of this Section B it has irrevocably
determined to take and the kind of capital stock or cash, securities or
other property or combination thereof to be delivered pursuant to the
option selected.
(b) If the Corporation determines to pay a dividend of cash,
securities or other property or combination thereof following a
Disposition, as described in subparagraph (i) of paragraph 10(b) of Section
B, the Corporation shall, not earlier than the 51st Trading Day and not
later than the 55th Trading Day following the consummation of such
Disposition, cause to be sent to each holder of outstanding shares of the
Affected Tracking Stock a notice setting forth (i) the record date for
determining holders entitled to receive such dividend, which shall be not
earlier than the 61st Trading Day and not later than the 65th Trading Day
following the consummation of such Disposition, (ii) the anticipated
payment date of such dividend (which shall not be more than 90 Trading Days
following the consummation of such Disposition), (iii) the kind and amount
of cash, other securities or property or combination thereof to be
distributed in respect of each share of the Affected Tracking Stock, (iv)
the amount of the Fair Value of the Net Proceeds of such Disposition, (v)
the Outstanding Interest Fraction as of a recent date preceding the date of
such notice, and (vi) the number of outstanding shares of the Affected
Tracking Stock subject
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to the Disposition and the Number of Shares Issuable to Third Parties of
the Affected Tracking Stock, including the number of such shares which are
issuable as Committed Acquisition Shares and the number of shares of the
Affected Tracking Stock into or for which outstanding Convertible
Securities are then convertible, exercisable or exchangeable and the
conversion, exercise or exchange prices thereof (and stating which, if any,
are Pre- Distribution Convertible Securities).
(c) If the Corporation determines to undertake a redemption of a class
of Tracking Stock following a Disposition of all (not merely substantially
all) of the properties and assets of the Affected Tracking Group with
respect to the Fair Value of the Net Proceeds, as described in clause (A)
of subparagraph (ii) of paragraph 10(b) of this Section B, the Corporation
shall cause to be given to each holder of outstanding shares of Tracking
Stock of the Affected Tracking Group a notice setting forth (i) a statement
that all of the shares of the Affected Tracking Stock outstanding on the
redemption date shall be redeemed, (ii) the anticipated redemption date
(which shall not be more than 90 Trading Days following the consummation of
such Disposition), (iii) the kind and amount of cash, securities or
property or combination thereof to be paid as a redemption price in respect
of shares of the Affected Tracking Stock outstanding on the redemption
date, (iv) the amount of the Fair Value of the Net Proceeds of such
Disposition, (v) the Adjusted Outstanding Interest Fraction as of a recent
date preceding the date of such notice, (vi) the place or places where
certificates for shares of Affected Tracking Stock, properly endorsed or
assigned for transfer (unless the Corporation waives such requirement), are
to be surrendered for delivery of cash, securities or property, and (vii)
the number of outstanding shares of the Affected Tracking Stock and the
Number of Shares Issuable to Third Parties of the Affected Tracking Stock,
including the number of such shares which are issuable as Committed
Acquisition Shares and the number of shares of the Affected Tracking Stock
into or for which outstanding Convertible Securities are then convertible,
exercisable or exchangeable and the conversion, exercise or exchange prices
thereof (and stating which, if any, of such Convertible Securities are
Pre-Distribution Convertible Securities). Such notice shall be sent not
less than 51 Trading Days nor more than 55 Trading Days following the
consummation of such Disposition and not less than 25 Trading Days prior to
the redemption date.
(d) If the Corporation determines to undertake a partial redemption of
Tracking Stock following a Disposition of substantially all (but not all)
of the properties and assets of the Affected Tracking Group as described in
clause (B) of subparagraph (ii) of paragraph 10(b) of this Section B, such
partial redemption shall be done on a pro rata basis or by lot. The
Corporation shall, not earlier than the 51st Trading Day and not later than
the 55th Trading Day following the consummation of such a Disposition,
cause to be given to each holder of record of outstanding shares of the
Affected Tracking Stock a notice setting forth (i) a statement that some of
the shares of the Affected Tracking Stock outstanding on the redemption
date shall be redeemed, specifying the number of such shares or how such
number shall be determined, (ii) a date not earlier than the 61st Trading
Day and not later than the 65th Trading Day following the consummation of
such Disposition which shall be the date on which shares of the Affected
Tracking Stock then outstanding shall be selected for redemption, (iii) the
anticipated redemption date (which shall not be more than 90 Trading Days
following the consummation of such Disposition), (iv) the kind and amount
of cash, securities or property or combination thereof to be paid as a
redemption price in respect of the shares of the Affected Tracking Stock,
(v) the amount of the Fair Value of the Net Proceeds of such Disposition,
(vi) the Outstanding Interest Fraction as of a recent date preceding the
date of such notice, (vii) the Number of Shares Issuable to Third Parties
of the Affected Tracking Stock, including the number of such shares which
are issuable as Committed Acquisition Shares and the number of shares of
Affected Tracking Stock into or for which outstanding Convertible
Securities are then convertible, exercisable or exchangeable and the
conversion, exercise or exchange prices thereof (and stating which, if any,
of such Convertible Securities are Pre-Distribution Convertible
Securities), and (viii) a statement that the Corporation shall not be
required to register a transfer of any shares of the Affected Tracking
Stock for a period of up to 15 Trading Days next preceding the date
referred to in clause (ii) of this sentence. Promptly following the date
referred to in clause (ii) of the preceding sentence, but not earlier than
the 61st Trading Day and not later than the 65th Trading Day following the
consummation of such Disposition, the Corporation shall cause to be given
to each holder of shares of the Affected Tracking Stock, a notice setting
forth (i) the number of shares of Affected Tracking Stock held by such
holder to be redeemed, (ii) a statement that such shares of Affected
Tracking Stock shall be redeemed, (iii) the anticipated redemption date
(which shall not be more than 90 Trading Days following the consummation of
such Disposition), (iv) the kind and amount of cash, other securities or
property to be received by such holder with respect to each share of
Affected Tracking Stock to be redeemed, including details as to the
calculation thereof, and (v) the place or places where certificates for
such shares of Affected Tracking Stock, properly endorsed or assigned for
transfer (unless the
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Corporation waives such requirement), are to be surrendered for delivery of
such cash, other securities or property or combination thereof.
(e) In the event of any conversion following a Disposition, as
described in subparagraph (iii) of paragraph 10(b) of this Section B, the
Corporation shall cause to be given to each holder of outstanding shares of
the Affected Tracking Stock a notice setting forth (i) a statement that all
of the outstanding shares of the Affected Tracking Stock shall be converted
into a number or fraction of Special Common Shares or shares of any other
class of Tracking Stock or combination thereof on a pro rata basis, and the
calculation pursuant to which such number or fraction was determined or
will be determined, (ii) the anticipated conversion date (which shall not
be more than 90 Trading Days following the consummation of such
Disposition), (iii) the per share number (or fraction) of Special Common
Shares or shares of another class of Tracking Stock or combination thereof,
as applicable, to be received with respect to each share of Affected
Tracking Stock, specifying such number or fraction of shares or combination
thereof, the Disposition Conversion Percentage and other details as to the
calculation thereof, (iv) the place or places where certificates for shares
of the Affected Tracking Stock, properly endorsed or assigned for transfer
(unless the Corporation waives such requirement), are to be surrendered,
and (v) the number of outstanding shares of the Affected Tracking Stock and
the Number of Shares Issuable to Third Parties of the Affected Tracking
Stock, including the number of such shares which are issuable as Committed
Acquisition Shares and the number of shares of the Affected Tracking Stock
into or for which outstanding Convertible Securities are then convertible,
exercisable or exchangeable and the conversion, exercise or exchange prices
thereof (and stating which, if any, are Pre-Distribution Convertible
Securities). Such notice shall be sent not less than 51 Trading Days nor
more than 55 Trading Days following the consummation of the Disposition and
not less than 25 days prior to the conversion date.
(f) Upon the Corporation's decision to convert all of the remaining
outstanding shares of the Affected Tracking Stock as described in paragraph
10(f), the Corporation shall announce publicly by press release (i) the
number of outstanding shares of Affected Tracking Stock to be converted,
(ii) the Number of Shares Issuable to Third Parties of such Tracking Stock,
including the number of such shares which are issuable as Committed
Acquisition Shares and into or for which Convertible Securities are then
convertible, exercisable or exchangeable and the conversion, exercise or
exchange prices thereof (and stating which, if any, of such Convertible
Securities are Pre-Distribution Convertible Securities), (iii) the
Disposition Conversion Percentage and (iv) the Outstanding Interest
Fraction for such Tracking Stock as of a recent date preceding the date of
such notice. The Corporation shall subsequently announce publicly by press
release whether the shares of such Tracking Stock are being converted in
exchange for Special Common Shares, shares of another Tracking Stock or a
combination thereof on a pro rata basis.
(g) In the event of any conversion as described paragraph 10(f) of
this Section B, the Corporation shall cause to be given to each holder of
outstanding shares of the Affected Tracking Stock a notice setting forth
(i) a statement that all of the outstanding shares of the Affected Tracking
Stock shall be converted into a number or fraction of Special Common Shares
or shares of any other class of Tracking Stock or combination thereof on a
pro rata basis, specifying the shares or combination thereof, (ii) the
anticipated conversion date (which shall not be more than 90 Trading Days
following the press release that publicly announces such conversion), (iii)
the per share number (or fraction) of Special Common Shares or shares of
another class of Tracking Stock or combination thereof, as applicable, to
be received with respect to each share of Affected Tracking Stock,
specifying such number or fraction of shares or combination thereof, the
Disposition Conversion Percentage and other details as to the calculation
thereof, (iv) the place or places where certificates for shares of the
Affected Tracking Stock, properly endorsed or assigned for transfer (unless
the Corporation waives such requirement), are to be surrendered, and (v)
the number of outstanding shares of the Affected Tracking Stock and the
Number of Shares Issuable to Third Parties of the Affected Tracking Stock,
including the number of such shares which are issuable as Committed
Acquisition Shares and the number of shares of the Affected Tracking Stock
into or for which outstanding Convertible Securities are then convertible,
exercisable or exchangeable and the conversion, exercise or exchange prices
thereof (and stating which, if any, are Pre-Distribution Convertible
Securities). Such notice shall be sent not less than 25 Trading Days nor
more than 35 Trading Days prior to the conversion date.
12. Conversion at Option of the Corporation. The Corporation may, in the
sole discretion of the Board, at any time convert each outstanding share of any
class of Tracking Stock (the "Converted Tracking Stock") of any Tracking
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<PAGE>
Group (the "Converted Tracking Group") into a number (or fraction) of fully paid
and non-assessable Special Common Shares or shares of another class or classes
of Tracking Stock or any combination thereof on a pro rata basis, equal to the
product of the applicable percentage set forth below (the "Optional Conversion
Percentage") on a conversion date selected by the Board pursuant to Section B.14
hereof, and the average daily ratio (calculated to the nearest five decimal
places) of the Market Value of one share of Converted Tracking Stock to the
Market Value of one Special Common Share or share of such other class of
Tracking Stock or any combination thereof on a pro rata basis, during a
twenty-Trading Day period ending on the fifth Trading Day prior to the date of
notice of such conversion, on a pro rata basis:
<TABLE>
<CAPTION>
12-Month Period Prior to Optional Conversion
Anniversary of Initial Issuance Date Percentage
------------------------------------ -------------------
<S> <C>
First through Fifth ............................................ 115%
Sixth .......................................................... 114%
Seventh ........................................................ 113%
Eighth ......................................................... 112%
Ninth .......................................................... 111%
Thereafter ..................................................... 110%
</TABLE>
In the event of the conversion of any class of Tracking Stock into
Special Common Shares or shares of another class or classes of Tracking Stock,
the assets and liabilities of the Converted Tracking Group shall be attributed
to the Group related to the shares which are issued upon such conversion (on a
pro rata basis if a combination of such shares are issued).
13. Redemption in Exchange for Stock of Subsidiary.
(a) Subject to paragraph 2(b) of this Section B, the
Corporation, in the sole discretion of the Board, may at any time
redeem (at no premium) all of the outstanding shares of any class of
Tracking Stock (the "Redeemed Tracking Stock") of a Tracking Group (the
"Redeemed Tracking Group"), for a number of outstanding shares of
common stock of a Qualifying Subsidiary or Qualifying Subsidiaries
holding all of the assets and liabilities attributed to the Redeemed
Tracking Group equal to the product of the Adjusted Outstanding
Interest Fraction of the Redeemed Tracking Group multiplied by the
number of all of the outstanding shares of the Qualifying Subsidiaries
owned directly or indirectly by the Corporation, on a pro rata basis.
The Corporation shall retain the balance of the outstanding shares of
the common stock of the Qualifying Subsidiaries as (i) Reserved
Property with respect to the obligations related to the Number of
Shares Issuable to Third Parties used in calculating such Adjusted
Outstanding Interest Fraction, or (ii) in respect of the Retained
Interest and any Inter- Group Interest in the Converted Tracking Group;
provided, however, in the sole discretion of the Board, shares of
common stock of the Qualifying Subsidiaries retained in respect of the
Retained Interest and any Inter-Group Interest in such Tracking Group
may be distributed as provided in paragraph 13(b) of this Section B.
(b) In the event the Board determines to redeem the shares of
any class of Tracking Stock for shares of a Qualifying Subsidiary, and
if there is a Retained Interest in such Tracking Group, the Board
shall, to the extent practicable, distribute Qualifying Subsidiary
shares corresponding to Special Common Shares to the holders of
Tracking Stock of such Tracking Group with respect to the Adjusted
Outstanding Interest Fraction in such Tracking Group and, if the Board
determines to distribute shares of such Qualifying Subsidiary to other
shareholders with respect to any Retained Interest or Inter-Group
Interest shall, to the extent practicable, distribute Qualifying
Subsidiary shares corresponding to Special Common Shares to the holders
of any other Tracking Stock with respect to any such Inter-Group
Interest in such Tracking Group, and distribute Qualifying Subsidiary
shares corresponding to Series A Common Shares to the holders of Series
A Common Shares, Qualifying Subsidiary shares corresponding to Common
Shares to the holders of Common Shares, and Qualifying Subsidiary
shares corresponding to Special Common Shares to the holders of Special
Common Shares with respect to any Retained Interest in such Tracking
Group, provided that the same number of shares of Qualifying Subsidiary
common stock on a combined basis shall be distributed for each Series A
Common Share, Common Share and any issued Special Common Share. If
practicable, the Board shall recapitalize such Qualifying Subsidiary or
Qualifying Subsidiaries through an amendment to its charter or
otherwise, such that the shares of capital stock of such subsidiary and
the relative rights, limitations and preferences thereof substantially
correspond to the Series A Common Shares, Common Shares and Special
Common Shares of the Corporation and their relative rights, limitations
and preferences, as may be determined to be necessary or appropriate in
the sole discretion of the Board, in order to
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<PAGE>
permit the distribution to be effected in the foregoing manner;
provided that, if the Qualifying Subsidiary has or will have shares
corresponding to Series A Common Shares and Common Shares but does not
and will not have shares corresponding to Special Common Shares and it
is impracticable to recapitalize the subsidiary as provided in this
sentence to create shares corresponding to Special Common Shares, the
Board shall distribute Qualifying Subsidiary shares corresponding to
Common Shares to the holders of Tracking Stock which would otherwise be
entitled to receive Qualifying Subsidiary shares corresponding to
Special Common Shares, and shall distribute Qualifying Subsidiary
shares corresponding to Common Shares to the holders of Special Common
Shares in respect of the Retained Interest.
14. Procedures Relating to Conversion or Redemption of Tracking Stock.
(a) Upon the Corporation's decision to convert or redeem all
of the outstanding shares of any class of Tracking Stock as described
in paragraphs 12 or 13 of this Section B, the Corporation shall
announce publicly by press release (i) the number of outstanding shares
of the class of Tracking Stock which will be converted or redeemed,
(ii) the Number of Shares Issuable to Third Parties of such Tracking
Stock, including the number of such shares which are issuable as
Committed Acquisition Shares and into or for which Convertible
Securities are then convertible, exercisable or exchangeable and the
conversion, exercise or exchange prices thereof (and stating which, if
any, of such Convertible Securities are Pre-Distribution Convertible
Securities), (iii) the Optional Conversion Percentage and other details
as to the calculation thereof, and (iv) the Outstanding Interest
Fraction and the Adjusted Outstanding Interest Fraction for such
Tracking Stock as of a recent date preceding the date of such notice.
The Corporation shall subsequently announce publicly by press release
whether the shares of such Tracking Stock are being converted in
exchange for Special Common Shares, shares of another Tracking Stock or
a combination thereof on a pro rata basis, or are being redeemed for
shares of a Qualifying Subsidiary. A notice by the Corporation that the
Corporation is considering a conversion or redemption or is seeking a
ruling from the Internal Revenue Service relating to a possible
conversion or redemption shall not constitute an announcement of a
decision with respect to a redemption or conversion pursuant to this
paragraph 14.
(b) The Corporation's decision to convert or redeem all of the
outstanding shares of Tracking Stock as described in paragraphs 12 or
13 of this Section B shall be revocable, and the determination of the
Board with respect to which securities the Corporation shall use to
convert or redeem such Tracking Stock shall be revocable, and any such
conversion or redemption may be abandoned or modified by the
Corporation, in the sole discretion of the Board, at any time prior to
the Corporation's delivery of the replacement securities in exchange
for the converted or redeemed shares of Tracking Stock.
(c) If the Corporation determines to convert the shares of any
class of Tracking Stock into Special Common Shares or shares of any
other class or classes of Tracking Stock or any combination thereof, as
described in paragraph 12 of this Section B, the Corporation shall
promptly cause to be given to each holder of shares of Tracking Stock
to be converted a notice setting forth (i) a statement that all
outstanding shares of such class of Tracking Stock shall be converted
in exchange for Special Common Shares or shares of any other class of
Tracking Stock or any combination thereof on a pro rata basis,
specifying the shares or combination thereof, (ii) the anticipated
conversion date (which shall not be more than 90 Trading Days following
the press release that publicly announces such a conversion), (iii) the
per share number (or fraction) of Special Common Shares or shares of
another class of Tracking Stock or combination thereof, as applicable,
to be received with respect to each share of the Converted Tracking
Stock, specifying such number or fraction of shares or combination
thereof, the Optional Conversion Percentage and other details as to the
calculation thereof, (iv) the place or places where certificates for
shares of such Tracking Stock to be redeemed, properly endorsed or
assigned for transfer (unless the Corporation waives such requirement),
are to be surrendered for delivery of certificates for Special Common
Shares, shares of another class of Tracking Stock or both, and (v) the
number of outstanding shares of such Tracking Stock to be redeemed and
the Number of Shares Issuable to Third Parties of such Tracking Stock,
including the number of such shares which are issuable as Committed
Acquisition Shares and the number of shares of such Tracking Stock into
or for which outstanding Convertible Securities are then convertible,
exercisable or exchangeable and the conversion, exercise or exchange
prices thereof (and stating which, if any, of such Convertible
Securities are Pre- Distribution Convertible Securities). Such notice
shall be sent not less than 25 Trading Days nor more than 35 Trading
Days prior to the conversion date.
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<PAGE>
(d) If the Corporation determines to redeem the shares of any
class of Tracking Stock Shares into shares of a Qualifying Subsidiary
as described in paragraph 13 of this Section B, the Corporation shall
promptly cause to be given to each holder of shares of Tracking Stock
to be redeemed a notice setting forth (i) a statement that all
outstanding shares of such class of Tracking Stock shall be redeemed in
exchange for shares of a Qualifying Subsidiary, (ii) the anticipated
redemption date (which shall not be more than 90 Trading Days following
the press release that publicly announces such a redemption), (iii) the
Adjusted Outstanding Interest Fraction for such Tracking Stock as of a
recent date preceding the date of such notice, (iv) the place or places
where certificates for shares of such Tracking Stock are to be
redeemed, properly endorsed or assigned for transfer (unless the
Corporation waives such requirement), are to be surrendered for
delivery of certificates for shares of common stock of the Qualifying
Subsidiary, and (v) the number of outstanding shares of such Tracking
Stock and the Number of Shares Issuable to Third Parties of such
Tracking Stock, including the number of such shares which are issuable
as Committed Acquisition Shares and the number of shares of such
Tracking Stock into or for which outstanding Convertible Securities are
then convertible, exercisable or exchangeable and the conversion,
exercise or exchange prices thereof (and stating which, if any, of such
Convertible Securities are Pre-Distribution Convertible Securities).
Such notice shall be sent not less than 25 Trading Days nor more than
35 Trading Days prior to the redemption date.
15. General Provisions Relating to Conversions and Redemptions.
(a) In each case in which a notice is required to be given to
holders of outstanding shares of any class of Tracking Stock in
accordance with paragraphs 11 or 14 (other than a notice to holders of
shares selected for a partial redemption), notice shall also be given,
within the required time period, to each holder of Convertible
Securities that are convertible into or exercisable or exchangeable for
shares of such Tracking Stock (unless provision for such notice is
otherwise made pursuant to the terms of such Convertible Securities),
which notice shall include, in addition to all of the information set
forth in the corresponding notice to holders of shares of such Tracking
Stock, a statement to the effect that the holders of such Convertible
Securities shall be entitled to receive the dividend, participate in
the redemption of shares following a Disposition with respect to such
Tracking Stock or in the selection of shares for conversion or
redemption, participate in the conversion of shares or participate in
the redemption of shares in exchange for stock of the Qualifying
Subsidiaries only if such holder appropriately converts, exercises or
exchanges such Convertible Securities on or prior to the record date
for the dividend, redemption date, date fixed for selection of shares
to be redeemed or conversion date, as applicable, set forth in such
notice. In the case of a conversion or redemption of shares of any
class of Tracking Stock, the notice to holders of Convertible
Securities shall also state what, if anything, such holders shall be
entitled to receive pursuant to the terms of such Convertible
Securities if such holders convert, exercise or exchange such
Convertible Securities following the conversion date or redemption
date, as applicable.
(b) All notices required to be given in accordance with this
paragraph 15 or paragraphs 11 or 14 shall be sent to a holder by first
class mail, postage prepaid, at the holder's address as the same
appears on the transfer books of the Corporation. Neither the failure
to mail any notice to any particular holder of shares of Tracking Stock
or of Convertible Securities nor any defect therein shall affect the
sufficiency thereof with respect to any other holder of outstanding
shares of Tracking Stock or of Convertible Securities, or the validity
of any conversion or redemption.
(c) The Corporation shall not be required to issue or deliver
fractional shares of any class of capital stock or any fractional
securities to any holder of shares of Tracking Stock upon any
conversion or redemption, dividend or other distribution described in
paragraphs 10, 12 or 13 of this Section B. In connection with the
determination of the number of shares of any class of capital stock
that is issuable or the amount of securities that is deliverable to any
holder of record upon any conversion or redemption, dividend or other
distribution (including any fractions of shares or securities), the
Corporation may aggregate the number of shares of Tracking Stock held
at the relevant time by such holder of record. If the number of shares
of any class of capital stock or the amount of securities remaining to
be issued or delivered to any holder of shares of Tracking Stock is a
fraction, the Corporation shall, if such fraction is not issued or
delivered to such holder, pay a cash adjustment in respect of such
fraction in an amount equal to the fair market value of such fraction
on the fifth Trading Day prior to the date such payment is to be made
(without interest). For purposes of the preceding sentence, "fair
market value" of any fraction shall be (i) in the case of any fraction
of a share of capital stock of the Corporation, the product of such
fraction and
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<PAGE>
the Market Value of one share of such capital stock and (ii) in the
case of any other fractional security, such value as is determined by
the Board.
(d) No adjustments in respect of dividends shall be made upon
the conversion or redemption of any shares of Tracking Stock; provided,
however, that if the conversion or redemption date with respect to a
class of Tracking Stock is subsequent to the record date for the
payment of a dividend or other distribution thereon or with respect
thereto, the holders of shares of such class of Tracking Stock at the
close of business on such record date shall be entitled to receive the
dividend or other distribution payable on or with respect to such
shares on the date set for payment of such dividend or other
distribution, notwithstanding a conversion or redemption by the
Corporation of such shares or the Corporation's default in payment of
the dividend or distribution due on such date.
(e) Before any holder of shares of any class of Tracking Stock
shall be entitled to receive certificates representing shares of any
kind of capital stock or cash, securities or other property or
combination thereof to be received by such holder with respect to any
conversion or redemption of such Tracking Stock, such holder shall be
required to surrender at such place as the Corporation shall specify
certificates for such shares, properly endorsed or assigned for
transfer (unless the Corporation waives such requirement). The
Corporation shall as soon as practicable after surrender of
certificates representing shares of such Tracking Stock deliver to the
person for whose account such shares were so surrendered, or to the
nominee or nominees of such person, certificates representing the
number of whole shares of the kind of capital stock or cash, securities
or other property or combination thereof to which such person is
entitled, together with any payment for fractional securities referred
to above. The Corporation shall not be required to register (i) a
transfer of any shares of Tracking Stock for a period of up to 15
Trading Days preceding the conversion date or redemption date or (ii)
any shares of Tracking Stock selected for redemption.
(f) From and after any applicable conversion or redemption
date, all rights of a holder of shares of any class of Tracking Stock
that were converted or redeemed shall cease except for the right, upon
surrender of the certificates representing such Tracking Stock, to
receive certificates representing shares of the kind and amount of
capital stock or cash, securities or other property or combination
thereof for which such shares of Tracking Stock were converted or
redeemed, together with any payment for fractional securities, and such
holder shall have no other or further rights in respect of the Tracking
Stock so converted or redeemed, including, but not limited to, any
rights with respect to any shares of capital stock or cash, securities
or other property or combination thereof which are reserved or
otherwise designated by the Corporation as being held for the
satisfaction of the Corporation's obligations to pay or deliver any
shares of capital stock, cash, securities or other property or
combination thereof upon the conversion, exercise or exchange of any
outstanding Convertible Securities or with respect to any other Shares
Issuable to Third Parties related to the conversion or redemption of
such Tracking Stock as of the date of such conversion or redemption. No
holder of a certificate that, immediately prior to the applicable
conversion or redemption date for any class of Tracking Stock,
represented shares of Tracking Stock which were converted or redeemed
shall be entitled to receive any dividend or other distribution with
respect to shares of any kind of capital stock or other securities into
or in exchange for which the shares of such Tracking Stock were
converted or redeemed until surrender of such holder's certificate for
a certificate or certificates representing shares of such kind of
capital stock or other securities. Upon such surrender, there shall be
paid to the holder the amount of any dividends or other distributions
(without interest) which theretofore became payable with respect to a
record date after the conversion date or redemption date, as the case
may be, but that were not paid by reason of the foregoing, with respect
to the number of whole shares of the kind of capital stock or other
securities represented by the certificate or certificates issued upon
such surrender.
(g) The Corporation shall pay any and all documentary, stamp
or similar issue or transfer taxes that may be payable in respect of
the issue or delivery of any shares of capital stock or other
securities on the conversion or redemption of any class of Tracking
Stock. The Corporation shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issue and delivery
of any shares of capital stock or other securities in a name other than
that in which the shares of Tracking Stock so converted or redeemed
were registered and no such issue or delivery shall be made unless and
until the person requesting such issue has paid to the Corporation the
amount of any such tax, or has established to the satisfaction of the
Corporation that such tax has been paid.
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<PAGE>
16. Effects on Convertible Securities.
(a) The following provisions with respect to Convertible
Securities shall apply only to the extent that the terms of such
Convertible Securities do not provide for adjustments in the event of a
conversion or redemption described in paragraphs 10, 12 or 13 of this
Section B.
(b) After any conversion date or redemption date on which all
outstanding shares of any class of Tracking Stock were converted or
redeemed, any share of such class of Tracking Stock that is to be
issued on conversion, exchange or exercise of any Convertible Security
shall, immediately upon such conversion, exchange or exercise and
without any notice or any other action on the part of, the Corporation
or its Board or the holder of such Convertible Security:
(i) in the event the shares of such class of Tracking
Stock outstanding on such conversion date were converted into
Special Common Shares or shares of another class or classes of
Tracking Stock or combination thereof pursuant to the
provisions described in subparagraph (iii) of paragraph 10(b),
paragraph 10(f) or paragraph 12 of this Section B, be
converted into the number of Special Common Shares or shares
of another class or classes of Tracking Stock or combination
thereof that the number of shares of such class of Tracking
Stock, that were to be issued upon such conversion, exchange
or exercise, would have received had such shares been
outstanding on such conversion date; or
(ii) in the event the shares of such class of Tracking
Stock outstanding on such redemption date were redeemed
pursuant to the provisions described in subparagraph (ii)(A)
of paragraph 10(b) of this Section B or redeemed for shares of
capital stock of a Qualifying Subsidiary or Qualifying
Subsidiaries pursuant to paragraph 13 of this Section B, be
redeemed, to the extent of funds of the Corporation legally
available therefor, for the kind and amount of cash,
securities or property or any combination thereof, or shares
of capital stock of a Qualifying Subsidiary or Qualifying
Subsidiaries, that the number of shares of such class of
Tracking Stock, that were to be issued upon such conversion,
exchange or exercise, would have received had such shares been
outstanding on such redemption date.
(c) If determined to be appropriate in the sole discretion of
the Board, any such capital stock or cash, securities or property or
any combination thereof to be delivered upon such conversion or
redemption may be irrevocably transferred in trust for the benefit of
holders of such Convertible Securities.
17. Other Provisions.
(a) The Board shall have the power to issue or sell any class
or series of stock herein or hereafter authorized, for such
consideration as the Board shall from time to time, in its discretion,
determine, whether or not greater consideration could be received upon
the issue or sale of shares of another class or series, and as
otherwise permitted by law.
(b) The Board shall have the power to purchase any class or
series of stock herein or hereafter authorized for such consideration
as the Board shall from time to time, in its discretion, determine,
whether or not lesser consideration could be paid upon the purchase of
shares of another class or series, and as otherwise permitted by law.
(c) If the Corporation shall in any manner split, subdivide or
combine the outstanding Common Shares, Series A Common Shares or
Special Common Shares, all outstanding Common Shares, Series A Common
Shares and Special Common Shares shall be proportionally split,
subdivided or combined in the same manner and on the same basis.
(d) In the event of a merger or consolidation of the
Corporation with or into another entity (whether or not the Corporation
is the surviving entity), the holders of Special Common Shares and
Common Shares shall be entitled to receive the same consideration per
share as a result of such merger or consolidation; provided, that this
requirement shall be deemed to be satisfied if the consideration
received by the holders of Special Common Shares consists of securities
which have relative rights, preferences and limitations vis-a-vis the
securities received
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<PAGE>
by the holders of Common Shares that, in the judgment of the Board, are
substantially similar in all material respects to the relative rights,
preferences and limitations of the Special Common Shares vis-a-vis the
Common Shares, respectively.
(e) Every reference in this Restated Certificate of
Incorporation or under Delaware law to a majority or other proportion
of shares of capital stock shall, to the extent permitted under
Delaware law, refer to a majority or such other proportion of the votes
entitled to be cast by such shares of capital stock.
(f) In accordance with Section 203(b)(3) of the DGCL, the
Corporation expressly elects not be governed by Section 203 of the
DGCL.
(g) Advance notice of shareholder nominations for election of
directors and other business to be brought by shareholders before a
meeting of shareholders shall be given in the manner provided in the
Bylaws of the Corporation.
(h) Any action required to be taken or which may be taken at
any annual or special meeting of stockholders may be taken without a
meeting, without prior notice and without a vote if a consent or
consents in writing, setting forth the action so taken, shall be signed
by persons entitled to vote capital stock of the Corporation
representing not less than 90% of the voting power of the shares that
would be necessary to authorize or take such action at a meeting at
which all shares of capital stock of the Corporation entitled to vote
thereon were present and voted.
18. Redemption to Protect Licenses.
(a) Notwithstanding any other provision of this Restated
Certificate of Incorporation, as amended, to the contrary, any
outstanding shares of stock of the Corporation (other than Series A
Common Shares) shall be subject to redemption by the Corporation, by
action of the Board, if in the judgment of the Board such action should
be taken, pursuant to Section 151(b)(2) of the DGCL or any other
applicable provision of law, to the extent necessary to prevent the
loss or secure the reinstatement of, or to prevent the denial of
applications for or the renewal of, any license or franchise from any
governmental agency held by the Corporation or any of its Subsidiaries,
or of any person in which the Corporation has any ownership or voting
interest, direct or indirect, to conduct any portion of the business of
the Corporation or any of its Subsidiaries, or any person in which the
Corporation has any ownership or voting interest, direct or indirect,
which license or franchise is conditioned upon some or all of the
holders of the Corporation's stock, or any other person with the right
to vote such stock or on whose behalf such stock is owned or voted,
possessing prescribed qualifications or any other condition. The terms
and conditions of such redemption shall be as follows:
(i) The redemption price of the shares to be redeemed
pursuant to this paragraph 18 shall be equal to the lesser of
(A) the Fair Market Value of such shares or (B) if such shares
were purchased by such Disqualified Holder within one year of
the Redemption Date, such Disqualified Holder's purchase price
for such shares;
(ii) The redemption price of such shares may be paid in
cash, Redemption Securities or any combination thereof;
(iii) If less than all the shares held by Disqualified
Holders are to be redeemed, the shares to be redeemed shall be
selected in such manner as shall be determined by the Board,
which may include selection first of the most recently
purchased shares thereof, selection by lot or selection in any
other manner determined by the Board;
(iv) At least 30 days' written notice of the Redemption
Date shall be given to the record holders of the shares
selected to be redeemed (unless waived in writing by any such
holder); provided that the Redemption Date may be the date on
which written notice shall be given to record holders if the
cash or Redemption Securities necessary to effect the
redemption shall have been deposited in trust for the benefit
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<PAGE>
of such record holders and subject to immediate withdrawal by
them upon surrender of the stock certificates for their shares
to be redeemed;
(v) From and after the Redemption Date, any and all
rights of whatever nature, which may be held by the owners of
shares selected for redemption (including without limitation
any rights to vote or participate in dividends declared on
stock of the same class or series as such shares), shall cease
and terminate and they shall thenceforth be entitled only to
receive the cash or Redemption Securities payable upon
redemption; and
(vi) Such other terms and conditions as the Board shall
determine.
(b) For purposes of this paragraph 18:
"Disqualified Holder" shall mean any holder of shares of stock
of the Corporation whose holding of such stock on behalf of such holder
or on behalf of any other person involving any beneficial or other
indirect ownership interest or voting power with respect to such stock,
either individually or when taken together with the holding or voting
of shares of stock of the Corporation by any other holders or persons
entitled to vote such stock, may result, in the good faith judgment of
the Board, in the loss of, or the failure to secure the reinstatement
of, or the denial of applications for or the renewal of, any license or
franchise from any governmental agency held by the Corporation or any
of its Subsidiaries or of any person in which the Corporation has any
ownership or voting interest to conduct any portion of the business of
the Corporation or any of its Subsidiaries or of any person in which
the Corporation has any ownership or voting interest, direct or
indirect.
"Fair Market Value" of a share of the Corporation's stock of
any class or series shall mean the average Closing Price for such a
share for each of the 20 most recent days on which shares of stock of
such class or series shall have been traded preceding the day on which
notice of redemption shall be given pursuant to this paragraph 18;
provided, however, that if shares of stock of such class or series are
not traded on any securities exchange or in the over-the-counter
market, "Fair Market Value" shall be determined by the Board in good
faith. "Closing Price" on any day means the reported closing sales
price or, in case no such sale takes place, the average of the reported
closing bid and asked prices on the principal United States securities
exchange registered under the Securities Exchange Act of 1934 on which
such stock is listed, or, if such stock is not listed on any such
exchange, the highest closing sales price or bid quotation for such
stock on the Nasdaq Stock Market or any system then in use, or if no
such prices or quotations are available, the fair market value on the
day in question as determined by the Board in good faith.
A "person" shall mean an individual, a corporation, a
partnership, a joint venture, a trust or unincorporated organization, a
joint stock company or similar organization, a government or any
political subdivision thereof, or any other legal entity.
"Redemption Date" shall mean the date fixed by the Board for
the redemption of shares of stock of the Corporation pursuant to this
paragraph 18.
"Redemption Securities" shall mean any debt or equity
securities (other than Series A Common Shares or securities convertible
into or exchangeable for, or carrying a right to subscribe to or
acquire, Series A Common Shares) of the Corporation, any of its
Subsidiaries or any other corporation, or any combination thereof,
having such terms and conditions as shall be approved by the Board and
which, together with any cash to be paid as part of the redemption
price, in the opinion of any nationally recognized investment banking
firm selected by the Board (which may be a firm which provides other
investment banking, brokerage or other services to the Corporation),
has a value, at the time notice of redemption is given pursuant to
subparagraph (a)(iv) of this paragraph 18, at least equal to the price
required to be paid pursuant to subparagraph (a)(i) of this paragraph
18 (assuming, in the case of Redemption Securities to be publicly
traded, such Redemption Securities were fully distributed and subject
only to normal trading activity).
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19. Definitions. In addition to the definitions set forth above in this
Restated Certificate of Incorporation, unless the context requires otherwise,
the following terms shall have the meanings specified below:
"Adjusted Outstanding Interest Fraction," as of any date, shall mean,
with respect to a particular class of Tracking Stock, a fraction the numerator
of which is the aggregate number of shares of such class of Tracking Stock
outstanding on such date and the denominator of which is the sum of (a) such
aggregate number of outstanding shares, (b) the Number of Shares Issuable with
Respect to Retained Interest for such class of Tracking Stock as of such date,
(c) the aggregate Number of Shares Issuable with Respect to Inter-Group Interest
by all other Tracking Groups in such Tracking Stock, if any, as of such date and
(d) the Number of Shares Issuable to Third Parties with respect to such Tracking
Stock as of such date.
"Aerial" shall mean Aerial Communications, Inc., a Delaware corporation.
"Aerial Group" shall mean, as of any date, that any Aerial Group Common
Shares have been issued and continue to be outstanding:
(a) the interest of the Corporation or any of its subsidiaries
in Aerial and its subsidiaries (including any successor thereto by
merger, consolidation or sale of all or substantially all of its
assets, whether or not in connection with a Related Business
Transaction) and their respective businesses, assets and liabilities,
except any of such businesses, assets or liabilities which have been
attributed by the Board to another Group;
(b) all businesses, assets and liabilities of the Corporation
or any of its subsidiaries to the extent attributed to the Aerial Group
by the Board, whether or not such businesses, assets or liabilities are
businesses, assets and liabilities of Aerial or any of its subsidiaries
(or a successor as described in clause (a) of this sentence);
(c) all businesses, assets and liabilities contributed or
otherwise transferred to the Aerial Group from the TDS Group or any of
the other Tracking Groups;
(d) the interest of the Corporation or any of its subsidiaries
in the businesses, assets and liabilities acquired by the Corporation
or any of its subsidiaries for the Aerial Group, as determined by the
Board;
(e) a proportionate undivided interest in each and every
business, asset and liability attributed to another Tracking Group
equal to the Inter-Group Interest Fraction, if any, of the Aerial Group
in such other Tracking Group; and
(f) such other businesses, assets and liabilities and such
adjustments to the foregoing as may be contemplated hereby or which may
be determined in good faith by the Board.
If a Retained Interest in the Aerial Group is then existing and if the
Corporation shall pay a dividend or make any other distribution with respect to
Aerial Group Common Shares payable in cash, securities or other property of the
Corporation attributed to the Aerial Group, other than Aerial Group Common
Shares, the TDS Group shall be deemed to hold an amount or fair value thereof
(as determined in good faith by the Board) of such cash, securities or other
property equal to the amount or fair value so distributed multiplied by a
fraction the numerator of which is the Aerial Group's Retained Interest Fraction
and the denominator of which is the Aerial Group's Outstanding Interest Fraction
in effect immediately prior to the record date for such dividend or other
distribution and, to the extent interest or dividends are paid or other
distributions are made on any securities other than Aerial Group Common Shares
so distributed to the holders of Aerial Group Common Shares, the Aerial Group
shall no longer include a corresponding ratable amount or fair value of the kind
of assets paid as such interest or dividends or other distributions in respect
of such securities deemed to be held by the TDS Group.
If an Inter-Group Interest in the Aerial Group is then existing and if
the Corporation shall pay a dividend or make any other distribution with respect
to Aerial Group Common Shares payable in cash, securities or other property of
the Corporation attributed to the Aerial Group other than Aerial Group Common
Shares, the Tracking Group(s) holding the Inter-Group Interest(s) in the Aerial
Group shall be deemed to hold an amount or fair value thereof (as determined in
good faith by the Board) of such cash, securities or other property equal to the
amount or fair value so distributed multiplied by a fraction the numerator of
which is the Inter-Group Interest Fraction in the Aerial Group in effect
immediately prior to the record date for such dividend or other distribution and
the denominator of which is equal to the Aerial Group's Outstanding
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Interest Fraction in effect immediately prior to the record date for such
dividend or other distribution and, to the extent interest or dividends are paid
or other distributions are made on any securities other than Aerial Group Common
Shares so distributed to the holders of Aerial Group Common Shares, the Aerial
Group shall no longer include a corresponding ratable amount or fair value of
the kind of assets paid as such interest or dividends or other distributions in
respect of such securities deemed to be held by the Tracking Group holding the
Inter-Group Interest in the Aerial Group.
From and after any transfer of cash, securities or other property from
the Aerial Group to the TDS Group or to another Tracking Group, the Aerial Group
shall no longer include the cash, securities or other property so transferred
and the TDS Group or such other Tracking Group, as the case may be, shall
include such cash, securities or other property, and from and after any transfer
of cash, securities or other property from the TDS Group or another Tracking
Group to the Aerial Group, the TDS Group or such other Tracking Group, as the
case may be, shall no longer include the cash, securities or other property so
transferred and the Aerial Group shall include such cash, securities or other
property.
"Aerial Group Common Shares," shall mean the Aerial Communications Group
Common Shares, par value $0.01 per share.
"Available Dividend Amount," as of any date, shall mean, with respect
to any Tracking Group, the product of the Outstanding Interest Fraction of such
Tracking Group and either (a) the excess of (i) an amount equal to the total
assets of such Tracking Group less the total liabilities (not including
preferred stock) of such Tracking Group as of such date over (ii) the aggregate
par value of, or any greater amount determined to be capital in respect of, all
outstanding shares of such class of Tracking Stock of such Tracking Group and
each class or series of Preferred Shares or Undesignated Shares attributed to
such Tracking Group or (b) in case there is no such excess, an amount equal to
Corporation Earnings (Losses) attributable to such Tracking Group (if positive)
for the fiscal year in which such date occurs and/or the preceding fiscal year.
The Available Dividend Amount for a Tracking Group is intended to be similar to
an amount equal to the product of the Outstanding Interest Fraction and the
amount that would be legally available for the payment of dividends on shares of
Tracking Stock under Delaware law if the related Tracking Group were a separate
Delaware corporation. The "Available Dividend Amount" as of any date, shall
mean, with respect to the TDS Group, the greater of (x) the amount of all
surplus (as defined in the DGCL) of the Corporation or, if there is no surplus,
the net profits (as contemplated by the DGCL) of the Corporation for the fiscal
year in which such date occurs and/or the preceding fiscal year (if positive),
less the sum of the Available Dividend Amounts of all of the Tracking Groups, or
(y) an amount equal to the sum of the Retained Interest Available Dividend
Amounts (if positive) with respect to all of the Tracking Groups, plus, without
duplication, either (a) the excess of (i) an amount equal to the total assets of
the TDS Group less the total liabilities (not including preferred stock) of the
TDS Group as of such date over (ii) the aggregate par value of, or any greater
amount determined to be capital in respect of, all outstanding Series A Common
Shares, Common Shares and any issued Special Common Shares, and each class or
series of Preferred Shares or Undesignated Shares attributed to the TDS Group or
(b) in case there is no such excess, an amount equal to Corporation Earnings
(Losses) attributable to the TDS Group (if positive) for the fiscal year in
which such date occurs and/or the preceding fiscal year.
"Board" shall mean the Board of Directors of the Corporation.
"Cellular Group" shall mean, as of any date, that any shares of
Cellular Group Stock have been issued and continue to be outstanding:
(a) the interest of the Corporation or any of its subsidiaries
in U.S. Cellular and its subsidiaries (including any successor thereto
by merger, consolidation or sale of all or substantially all of its
assets, whether or not in connection with a Related Business
Transaction) and their respective businesses, assets and liabilities,
except any of such businesses, assets or liabilities which have been
attributed by the Board to another Group;
(b) all businesses, assets and liabilities of the Corporation
or any of its subsidiaries to the extent attributed to the Cellular
Group by the Board, whether or not such businesses, assets or
liabilities are businesses, assets and liabilities of U.S. Cellular or
any of its subsidiaries (or a successor as described in clause (a) of
this sentence);
(c) all businesses, assets and liabilities contributed or
otherwise transferred to the Cellular Group from the TDS Group or any
of the other Tracking Groups;
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<PAGE>
(d) the interest of the Corporation or any of its subsidiaries
in the businesses, assets and liabilities acquired by the Corporation
or any of its subsidiaries for the Cellular Group, as determined by the
Board;
(e) a proportionate undivided interest in each and every
business, asset and liability attributed to another Tracking Group
equal to the Inter-Group Interest Fraction, if any, of the Cellular
Group in such other Tracking Group; and
(f) such other businesses, assets and liabilities and such
adjustments to the foregoing as may be contemplated hereby or which may
be determined in good faith by the Board.
If a Retained Interest in the Cellular Group is then existing and if
the Corporation shall pay a dividend or make any other distribution with respect
to Cellular Group Common Shares payable in cash, securities or other property of
the Corporation attributed to the Cellular Group, other than Cellular Group
Common Shares, the TDS Group shall be deemed to hold an amount or fair value
thereof (as determined in good faith by the Board) of such cash, securities or
other property equal to the amount or fair value so distributed multiplied by a
fraction the numerator of which is the Cellular Group's Retained Interest
Fraction and the denominator of which is the Cellular Group's Outstanding
Interest Fraction in effect immediately prior to the record date for such
dividend or other distribution and, to the extent interest or dividends are paid
or other distributions are made on any securities other than Cellular Group
Common Shares so distributed to the holders of Cellular Group Common Shares, the
Cellular Group shall no longer include a corresponding ratable amount or fair
value of the kind of assets paid as such interest or dividends or other
distributions in respect of such securities deemed to be held by the TDS Group.
If an Inter-Group Interest in the Cellular Group is then existing and
if the Corporation shall pay a dividend or make any other distribution with
respect to Cellular Group Common Shares payable in cash, securities or other
property of the Corporation attributed to the Cellular Group other than Cellular
Group Common Shares, the Tracking Group holding the Inter-Group Interest in the
Cellular Group shall be deemed to hold an amount or fair value thereof (as
determined in good faith by the Board) of such cash, securities or other
property equal to the amount or fair value so distributed multiplied by a
fraction the numerator of which is the Inter-Group Interest Fraction in the
Cellular Group in effect immediately prior to the record date for such dividend
or other distribution and the denominator of which is equal to the Cellular
Group's Outstanding Interest Fraction in effect immediately prior to the record
date for such dividend or other distribution and, to the extent interest or
dividends are paid or other distributions are made on any securities other than
Cellular Group Common Shares so distributed to the holders of Cellular Group
Common Shares, the Cellular Group shall no longer include a corresponding
ratable amount or fair value of the kind of assets paid as such interest or
dividends or other distributions in respect of such securities deemed to be held
by the Tracking Group holding the Inter-Group Interest in the Cellular Group.
From and after any transfer of cash, securities or other property from
the Cellular Group to the TDS Group or to another Tracking Group, the Cellular
Group shall no longer include the cash, securities or other property so
transferred and the TDS Group or such other Tracking Group, as the case may be,
shall include such cash, securities or other property, and from and after any
transfer of cash, securities or other property from the TDS Group or another
Tracking Group to the Cellular Group, the TDS Group or such other Tracking
Group, as the case may be, shall no longer include the cash, securities or other
property so transferred and the Cellular Group shall include such cash,
securities or other property.
"Cellular Group Common Shares" means the United States Cellular Group
Common Shares, par value $0.01 per share.
"Committed Acquisition Shares," as of any date, shall mean (a) Common
Shares that the Corporation had, prior to such date, agreed to issue in
connection with acquisitions, but as of such date had not been issued, and (b)
Common Shares that are issuable upon conversion, exercise or exchange of
Convertible Securities that the Corporation had, prior to such date, agreed to
issue in connection with acquisitions, but as of such date had not been issued,
in each case including obligations of the Corporation to issue Cellular Group
Common Shares, Telecom Group Common Shares and Aerial Group Common Shares as a
result of the Distribution pursuant to anti-dilution provisions in the
acquisition agreements providing for the issuance of Common Shares or
Convertible Securities which are convertible into or exercisable or exchangeable
for Common Shares, without duplication of any Common Shares issuable upon
conversion, exercise or exchange of Convertible Securities.
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"Common Stock" shall mean shares of capital stock of the Corporation
designated as common stock, including Series A Common Shares, Common Shares,
Special Common Shares, Cellular Group Common Shares, Telecom Group Common Shares
and Aerial Group Common Shares.
"Corporation Earnings (Loss)" for any period, with respect to any class
of Common Stock, shall mean the net earnings or loss of the related Group for
such period determined on a basis consistent with the determination of the net
earnings or loss of such Group for such period as presented in the combined
financial statements of such Group for such period, including income and
expenses of the Corporation attributed to the operations of such Group on a
substantially consistent basis, including without limitation, corporate, general
and administrative costs, net interest and income taxes.
"Convertible Securities" shall mean any securities of the Corporation,
including preferred stock, options and other rights (other than Common Stock),
that are convertible into, exchangeable for or evidence the right to purchase
any shares of any class or series of Common Stock, whether upon conversion,
exercise or exchange, pursuant to anti-dilution provisions of such securities or
otherwise.
"DGCL" shall mean the Delaware General Corporation Law.
"Distribution" shall mean the contemplated initial distribution of
Cellular Group Shares, Telecom Group Shares and/or Aerial Group Shares or any
part thereof to be made to the holders of Common Shares and Series A Common
Shares.
"Fair Value of Net Proceeds" shall mean, as of any date, with respect
to any Disposition of any of the businesses, assets and liabilities of a
Tracking Group, an amount, if any, equal to the fair value of the gross proceeds
of such Disposition less any payment of, or reasonable provision for, (a) any
taxes related to such Disposition or in respect of any resulting dividend or
redemption, including deferred taxes, but not including any deductions or other
offsets which may be available to the Corporation which are not attributed to
such Tracking Group, (b) any transaction costs, including, without limitation,
any legal, investment banking and accounting fees and expenses and (c) any
liabilities and other obligations (contingent or otherwise) of, or attributed
to, that Tracking Group, including, without limitation, obligations with respect
to committed acquisitions and Convertible Securities attributed to the Tracking
Group, any indemnity or guarantee obligations incurred in connection with the
Disposition or any liabilities for future purchase price adjustments, and any
preferential amounts plus any accumulated and unpaid dividends and other
obligations in respect of any class or series of Preferred Shares or
Undesignated Shares attributed to such Tracking Group (without duplication). For
purposes of this definition, any businesses, assets and liabilities of the
affected Tracking Group which the Board determines to retain after such
Disposition shall be deemed to constitute "reasonable provision" for such amount
of taxes, costs and liabilities (contingent or otherwise). To the extent the
proceeds of any Disposition include any securities or other property other than
cash, the Board shall determine the fair value of such securities or property,
including for the purpose of determining the comparable value thereof if the
Board determines to pay a dividend or redemption price in cash or securities or
other property as provided in this Restated Certificate of Incorporation.
"Group" shall mean the Aerial Group, the Cellular Group, the Telecom
Group and the TDS Group and any other Group so designated by the Board.
"Initial Issuance Date" shall mean, with respect to a class of stock,
the initial date of issuance of shares of such class of stock.
"Inter-Group Interest," as of any date, shall mean that part of the
Corporation's equity interest in a Tracking Group which is deemed to be held (or
subsequently acquired) by the Corporation and attributed to a Group other than
the TDS Group. A Tracking Group may not hold an Inter-Group interest in the TDS
Group.
"Inter-Group Interest Fraction," as of any date, with respect to any
Investor Group, shall mean a fraction the numerator of which is the Number of
Shares issuable with Respect to Inter-Group Interest in an Issuer Group by such
Investor Group as of such date and the denominator of which is the sum of (a)
the aggregate Number of Shares Issuable with Respect to Inter-Group Interest in
such Issuer Group by all Investor Groups as of such date, (b) the aggregate
number of shares of Tracking Stock of such Issuer Group outstanding as of such
date and (c) the Number of Shares Issuable with Respect to Retained Interest in
such Issuer Group as of such date.
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"Issuer Group" shall mean a Tracking Group in which there is an
Inter-Group Interest by an Investor Group.
"Investor Group" means a Tracking Group which holds an Inter-Group
Interest in an Issuer Group.
"Market Capitalization" of any class or series of capital stock of the
Corporation on any Trading Day shall mean the product of (a) the Market Value of
one share of such class or series on such Trading Day and (b) the number of
shares of such class or series outstanding at the close of business on such
Trading Day.
"Market Value" of a share of any class or series of capital stock of
the Corporation on any day shall mean the average of the high and low reported
sale prices regular way of a share of such class or series on such day (if such
day is a Trading Day, and if such day is not a Trading Day, on the Trading Day
immediately preceding such day) or in case no such reported sale takes place on
such Trading Day the average of the reported closing bid and asked prices
regular way of a share of such class or series on such Trading Day, in either
case on the American Stock Exchange or such other national securities exchange
or the Nasdaq National Market on which such class or series is listed, or if the
shares of such class or series are not quoted on the American Stock Exchange or
any other national securities exchange or the Nasdaq National Market on such
Trading Day, the average of the closing bid and asked prices of a share of such
class or series in the over-the-counter market on such Trading Day as furnished
by any New York Stock Exchange member firm selected from time to time by the
Corporation, or if such closing bid and asked prices are not made available by
any such New York Stock Exchange member firm on such Trading Day, the market
value of a share of such class or series as determined by the Board; provided,
that if the Special Common Shares or Series A Common Shares are not trading on a
national securities exchange or the Nasdaq National Market, and if bid and asked
prices are not available for the Special Common Shares or the Series A Common
Shares, the Market Value of a Special Common Share or a Series A Common Share,
as applicable, shall be deemed to be the same as a Common Share for purposes of
determining Market Value under Sections 8, 10 and 12 hereof; and provided
further, that for purposes of determining Market Values under Sections 8, 10 and
12 hereof (a) the "Market Value" of a share of any series of Common Stock on any
day prior to the "ex" date or any similar date for any dividend or distribution
paid or to be paid with respect to such series of Common Stock shall be reduced
by the fair market value of the per share amount of such dividend or
distribution as determined by the Board and (b) the "Market Value" of a share of
any series of Common Stock on any day prior to (i) the effective date of any
subdivision (by stock split or otherwise) or combination (by reverse stock split
or otherwise) of outstanding shares of such series of Common Stock or (ii) the
"ex" date or any similar date for any dividend or distribution with respect to
any such series of Common Stock in shares of such series of Common Stock, shall
be appropriately adjusted to reflect such subdivision, combination, dividend or
distribution.
"Merger," shall mean the merger of TDS Iowa with and into the
Corporation.
"Number of Shares Issuable with Respect to Inter-Group Interest" shall
mean, with respect to any Tracking Group (for purposes of this definition, the
"Issuer Group"), the number of shares of Tracking Stock of the Issuer Group (the
"Issuer Group Shares") which are attributed to, and that could be issued or sold
by the Corporation for the benefit of, another Tracking Group (for purposes of
this definition, the "Investor Group"). Initially, the Number of Shares Issuable
with Respect to Inter-Group Interest in each Tracking Group shall be zero, and
shall from time to time thereafter, as applicable, be:
(a) adjusted as appropriate to reflect subdivisions (by stock
split or otherwise) and combinations (by reverse stock split or
otherwise) of the Issuer Group Shares and dividends or distributions of
Issuer Group Shares to the holders thereof and other reclassifications
of the Issuer Group Shares or similar transactions;
(b) decreased (but not to less than zero) by (i) the aggregate
number of Issuer Group Shares issued or sold by the Corporation, for
cash, securities or other property, the proceeds of which are
attributed to the Investor Group, (ii) the aggregate number of Issuer
Group Shares issued or delivered upon conversion, exercise or exchange
of Convertible Securities, the proceeds of which are attributed to the
Investor Group, (iii) the aggregate number of Issuer Group Shares
issued or delivered by the Corporation as a dividend or distribution to
holders of shares of the Investor Group, (iv) the aggregate number of
Issuer Group Shares issued or delivered upon the conversion, exercise
or exchange of any Convertible Securities issued or delivered by the
Corporation as a dividend or distribution or by reclassification or
exchange to holders of shares of the Investor Group, and (v) the
aggregate number of Issuer Group Shares (rounded, if necessary, to the
nearest whole number), equal to the aggregate fair value (as determined
by the Board) of assets or properties attributed to the Issuer Group
that are
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transferred from the Issuer Group to the Investor Group in
consideration of a reduction in the Number of Shares Issuable with
Respect to Inter-Group Interest by the Investor Group in the Issuer
Group, divided by the Market Value of one Issuer Group Share as of the
date of such transfer;
(c) increased by (i) the aggregate number of any Issuer Group
Shares which are retired or otherwise cease to be outstanding following
their purchase with funds attributed to the Investor Group and (ii) a
number (rounded, if necessary, to the nearest whole number), equal to
the fair value (as determined by the Board) of assets or properties
theretofore attributed to the Investor Group that are contributed to
the Issuer Group in consideration of an increase in the Number of
Shares Issuable with Respect to Inter-Group Interest in the Issuer
Group by the Investor Group, divided by the Market Value of one Issuer
Group Share as of the date of such contribution; and
(d) adjusted as may be appropriate to reflect other
transactions between the Issuer Group and the Investor Group, as
determined in good faith by the Board.
Whenever a change in the Number of Shares Issuable with Respect to
Inter-Group Interest with respect to any Group occurs, the Corporation shall
prepare and file a statement of such change with the Secretary of the
Corporation.
"Number of Shares Issuable with Respect to Retained Interest" shall
mean the number of shares of a class of Tracking Stock of a Tracking Group (for
purposes of this definition, the "Issuer Group") that are attributed to, and
could be issued or sold by the Corporation for the account of, the TDS Group in
respect of a Retained Interest by the TDS Group in such Issuer Group. The Number
of Shares Issuable with Respect to Retained Interest shall initially be
determined by the Board, and shall from time to time thereafter, as applicable,
be:
(a) adjusted as appropriate to reflect subdivisions (by stock
split or otherwise) and combinations (by reverse stock split or
otherwise) of the Issuer Group Shares, and dividends or distributions
of Issuer Group Shares to the holders thereof and other
reclassifications of Issuer Group Shares or similar transactions;
(b) decreased (but not to less than zero) by (i) the aggregate
number of Issuer Group Shares issued or sold by the Corporation, for
cash, securities or other property, the proceeds of which are
attributed to the TDS Group, (ii) the aggregate number of Issuer Group
Shares issued or delivered upon conversion, exercise or exchange of
Convertible Securities (including Pre-Distribution Convertible
Securities), the proceeds of which are attributed to the TDS Group,
(iii) the aggregate number of Issuer Group Shares issued or delivered
by the Corporation as a dividend or distribution to holders of Common
Shares, Series A Common Shares or Special Common Shares, (iv) the
aggregate number of Issuer Group Shares issued or delivered upon the
conversion, exercise or exchange of any Convertible Securities issued
or delivered by the Corporation as a dividend or distribution or by
reclassification or exchange to holders of shares of Common Shares,
Series A Common Shares or Special Common Shares, and (v) the aggregate
number of Issuer Group Shares (rounded, if necessary, to the nearest
whole number), equal to the aggregate fair value (as determined by the
Board) of assets or properties attributed to the Issuer Group that are
transferred from the Issuer Group to the TDS Group in consideration of
a reduction in the Number of Shares Issuable with Respect to Retained
Interest in the Issuer Group, divided by the Market Value of one Issuer
Group Share as of the date of such transfer;
(c) increased by (i) the aggregate number of any Issuer Group
Shares which are retired or otherwise cease to be outstanding following
their purchase with funds attributed to the TDS Group and (ii) a number
(rounded, if necessary, to the nearest whole number), equal to the fair
value (as determined by the Board) of assets or properties theretofore
attributed to the TDS Group that are contributed to the Issuer Group in
consideration of an increase in the Number of Shares Issuable with
Respect to Retained Interest in the Issuer Group, divided by the Market
Value of one Issuer Group Share as of the date of such contribution;
and
(d) adjusted as may be appropriate to reflect other
transactions between the Issuer Group and the TDS Group, as determined
in good faith by the Board.
Whenever a change in the Number of Shares Issuable with
Respect to Retained Interest in any Tracking Group occurs, the
Corporation shall prepare and file a statement of such change with the
Secretary of the Corporation.
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"Number of Shares Issuable To Third Parties" shall mean, as of any
date, the number of shares of any class or series of Common Stock (such shares
are herein referred to as "Shares Issuable to Third Parties") which are issuable
(a) as Committed Acquisition Shares, (b) pursuant to the conversion, exercise or
exchange of Convertible Securities or (c) otherwise, other than shares which are
deemed to be issuable with respect to a Retained Interest or with respect to an
Inter-Group Interest, as may be determined in good faith by the Board
considering any relevant factors, including whether the holders of Convertible
Securities would derive an economic benefit from the conversion, exercise or
exchange of such Convertible Securities which exceeds the economic cost thereof
or the economic benefit of not converting, exercising or exchanging such
Convertible Securities.
"Outstanding Interest Fraction," as of any date, shall mean, with
respect to any class of Tracking Stock, a fraction the numerator of which is the
aggregate number of shares of such class of Tracking Stock outstanding on such
date and the denominator of which is the sum of (a) such aggregate number of
shares, (b) the Number of Shares Issuable with Respect to Retained Interest of
such class of Tracking Stock as of such date and (c) the aggregate Number of
Shares Issuable with Respect to Inter-Group Interest by all other Tracking
Groups in such Tracking Stock, if any, as of such date.
"Pre-81 Preferred Shares," as of any date, shall mean the series of
Preferred Shares of the Corporation which are issued in the Merger in exchange
for series of Preferred Shares of TDS Iowa that were originally issued before
October 31, 1981, as identified in Section A of Article IV.
"Pre-Distribution Convertible Securities" shall mean Convertible
Securities that are outstanding on the record date for the Distribution and are,
prior to such date, convertible into or exercisable or exchangeable for either
Common Shares or Series A Common Shares; provided, if the record date for the
Distribution of any of the Cellular Group Shares, Telecom Group Shares or Aerial
Group Shares is not the same date, the Board shall determine which, if any,
Convertible Securities (or proportion thereof) that are issued after the first
record date for any part of the Distribution, shall represent Pre- Distribution
Convertible Securities.
"Post-81 Preferred Shares," as of any date, shall mean the series of
Preferred Shares of the Corporation which are issued in the Merger in exchange
for series of Preferred Shares of TDS Iowa that were originally issued after
October 31, 1981, as identified in Section A of Article IV.
"Qualifying Subsidiary" or "Qualifying Subsidiaries," as of any date,
shall mean a Subsidiary or Subsidiaries of the Corporation (a) in which (i) the
Corporation's ownership and voting interest is sufficient to satisfy the
requirements of the Internal Revenue Service for a distribution of the
Corporation's interest in such Subsidiary to the holders of Common Stock of the
Corporation that is tax-free to such holders or (ii) the Corporation owns,
directly or indirectly, all of the issued and outstanding capital stock and (b)
which hold(s) all of the assets and liabilities attributed to a Tracking Group.
"Related Business Transaction" shall mean any Disposition of all or
substantially all of the properties and assets of a Tracking Group in which the
Corporation receives as proceeds of such Disposition primarily equity securities
(including, without limitation, capital stock, convertible securities,
partnership or limited partnership interests and other types of equity
securities, without regard to the voting power or contractual or other
management or governance rights related to such equity securities) of the
purchaser or acquiror of such assets and properties of such Tracking Group, any
entity which succeeds (by merger, formation of a joint venture enterprise or
otherwise) to such assets and properties of such Tracking Group or a third party
issuer, which purchaser, acquiror or other issuer is engaged or proposes to
engage primarily in one or more businesses similar or complementary to the
businesses conducted by such Tracking Group prior to such Disposition, as
determined in good faith by the Board.
"Retained Interest Available Dividend Amount," as of any date, shall
mean, with respect to a Tracking Group, an amount (not less than zero) equal to
the product of (a) a fraction, the numerator of which is the Retained Interest
Fraction and the denominator of which is the Outstanding Interest Fraction with
respect to such Tracking Group multiplied by (b) the Available Dividend Amount
of such Tracking Group.
"Retained Interest Fraction," as of any date, shall mean, with respect
to any class of Tracking Stock, a fraction the numerator of which is the Number
of Shares Issuable with Respect to Retained Interest of such class of Tracking
Stock as of such date and the denominator of which is the sum of (a) such Number
of Shares Issuable with Respect to Retained
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Interest as of such date, (b) the aggregate Number of Shares Issuable with
Respect to Inter-Group Interest by all other Tracking Groups in such Tracking
Stock, if any, as of such date, and (c) the aggregate number of shares of such
class of Tracking Stock outstanding as of such date.
"Shares Issuable to Third Parties" shall have the meaning set forth in
the definition of "Number of Shares Issuable to Third Parties."
"Subsidiary" shall mean, with respect to any person or entity, any
corporation or partnership 50% or more of whose outstanding voting securities or
partnership interests, as the case may be, are directly or indirectly owned by
such person or entity.
"TDS Group" shall mean, as of any date, that any shares of any class or
series of Tracking Stock have been issued and continue to be outstanding:
(a) the interest of the Corporation and all of its
subsidiaries, (including any successors thereto by merger,
consolidation or sale of all or substantially all of its assets) and
their respective properties and assets, other than (except as provided
in paragraph (e) of this definition) the interest of the Corporation
and its subsidiaries in Aerial and its subsidiaries, TDS Telecom and
its subsidiaries, U.S. Cellular and its subsidiaries, and any other
subsidiaries attributed by the Board to a Group other than the TDS
Group (including any successors thereto by merger, consolidation or
sale of all or substantially all of its assets, whether or not in
connection with Related Business Transactions) and their respective
businesses, assets and liabilities;
(b) all businesses, assets and liabilities of the Corporation
or any of its subsidiaries to the extent attributed to the TDS Group by
the Board, whether or not such businesses, assets or liabilities are
businesses, assets and liabilities of the TDS Group or any of its
subsidiaries (or a successor as described in clause (a) of this
sentence);
(c) all businesses, assets and liabilities contributed or
otherwise transferred to the TDS Group from any of the Tracking Groups;
(d) the interest of the Corporation or any of its subsidiaries
in the businesses, assets and liabilities acquired by the Corporation
or any of its subsidiaries for the TDS Group, as determined by the
Board;
(e) a proportionate undivided interest in each and every
business, asset and liability attributed to a Tracking Group equal to
the Retained Interest Fraction of the TDS Group in such other Tracking
Group; and
(f) such other businesses, assets and liabilities and such
adjustments to the foregoing as may be contemplated hereby or which may
be determined in good faith by the Board.
If a Retained Interest in any Tracking Group is then existing and if
the Corporation shall pay a dividend or make any other distribution with respect
to holders of Tracking Stock of such Tracking Group payable in cash, securities
or other property of the Corporation attributed to such Tracking Group, other
than shares of Tracking Stock, the TDS Group shall be deemed to hold an amount
or fair value thereof (as determined in good faith by the Board) of such cash,
securities or other property equal to the amount or fair value so distributed
multiplied by a fraction the numerator of which is such Tracking Group's
Retained Interest Fraction and the denominator of which is such Tracking Group's
Outstanding Interest Fraction in effect immediately prior to the record date for
such dividend or other distribution and, to the extent interest or dividends are
paid or other distributions are made on any securities other than shares of
Tracking Stock so distributed to the holders of such shares of Tracking Stock,
such Tracking Group shall no longer include a corresponding ratable amount or
fair value of the kind of assets paid as such interest or dividends or other
distributions in respect of such securities deemed to be held by the TDS Group.
From and after any transfer of cash, securities or other property from
a Tracking Group to the TDS Group, such Tracking Group shall no longer include
the cash, securities or other property so transferred and the TDS Group shall
include such cash, securities or other property and from and after any transfer
of cash, securities or other property from the TDS
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Group to a Tracking Group, the TDS Group shall no longer include the cash,
securities or other property so transferred and such Tracking Group shall
include such cash, securities or other property.
"TDS Group Shares" shall mean the Series A Common Shares, Common Shares
and any issued Special Common Shares of the Corporation and any other shares of
capital stock designated by the Board as TDS Group Shares.
"TDS Iowa" shall mean Telephone and Data Systems, Inc., an Iowa
corporation.
"TDS Telecom" shall mean TDS Telecommunications Corporation, a
Delaware corporation.
"Telecom Group" shall mean, as of any date, that any shares of Telecom
Group Stock have been issued and continue to be outstanding:
(a) the interest of the Corporation or any of its subsidiaries
in TDS Telecom and its subsidiaries (including any successor thereto by
merger, consolidation or sale of all or substantially all of its
assets, whether or not in connection with a Related Business
Transaction) and their respective businesses, assets and liabilities,
except any of such businesses, assets or liabilities which have been
attributed by the Board to another Group;
(b) all businesses, assets and liabilities of the Corporation
or any of its subsidiaries to the extent attributed to the Telecom
Group by the Board, whether or not such businesses, assets or
liabilities are businesses, assets and liabilities of TDS Telecom or
any of its subsidiaries (or a successor as described in clause (a) of
this sentence);
(c) all businesses, assets and liabilities contributed or
otherwise transferred to the Telecom Group from the TDS Group or any of
the other Tracking Groups;
(d) the interest of the Corporation or any of its subsidiaries
in the businesses, assets and liabilities acquired by the Corporation
or any of its subsidiaries for the Telecom Group, as determined by the
Board;
(e) a proportionate undivided interest in each and every
business, asset and liability attributed to another Tracking Group
equal to the Inter-Group Interest Fraction, if any, of the Telecom
Group in such other Tracking Group; and
(f) such other businesses, assets and liabilities and such
adjustments to the foregoing as may be contemplated hereby or which may
be determined in good faith by the Board.
If a Retained Interest in the Telecom Group is then existing and if the
Corporation shall pay a dividend or make any other distribution with respect to
Telecom Group Common Shares payable in cash, securities or other property of the
Corporation attributed to the Telecom Group, other than Telecom Group Common
Shares, the TDS Group shall be deemed to hold an amount or fair value thereof
(as determined in good faith by the Board) of such cash, securities or other
property equal to the amount or fair value so distributed multiplied by a
fraction the numerator of which is the Telecom Group's Retained Interest
Fraction and the denominator of which is the Telecom Group's Outstanding
Interest Fraction in effect immediately prior to the record date for such
dividend or other distribution and, to the extent interest or dividends are paid
or other distributions are made on any securities other than Telecom Group
Common Shares so distributed to the holders of Telecom Group Common Shares, the
Telecom Group shall no longer include a corresponding ratable amount or fair
value of the kind of assets paid as such interest or dividends or other
distributions in respect of such securities deemed to be held by the TDS Group.
If an Inter-Group Interest in the Telecom Group is then existing and if
the Corporation shall pay a dividend or make any other distribution with respect
to Telecom Group Common Shares payable in cash, securities or other property of
the Corporation attributed to the Telecom Group other than Telecom Group Common
Shares, the Tracking Group holding the Inter-Group Interest in the Telecom Group
shall be deemed to hold an amount or fair value thereof (as determined in good
faith by the Board) of such cash, securities or other property equal to the
amount or fair value so distributed multiplied by a fraction the numerator of
which is the Inter-Group Interest Fraction in the Telecom Group in effect
immediately prior to the record date for such dividend or other distribution and
the denominator of which is equal to the Telecom Group's
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Outstanding Interest Fraction in effect immediately prior to the record date for
such dividend or other distribution and, to the extent interest or dividends are
paid or other distributions are made on any securities other than Telecom Group
Common Shares so distributed to the holders of Telecom Group Common Shares, the
Telecom Group shall no longer include a corresponding ratable amount or fair
value of the kind of assets paid as such interest or dividends or other
distributions in respect of such securities deemed to be held by the Tracking
Group holding the Inter-Group Interest in the Telecom Group.
From and after any transfer of cash, securities or other property from
the Telecom Group to the TDS Group or to another Tracking Group, the Telecom
Group shall no longer include the cash, securities or other property so
transferred and the TDS Group or such other Tracking Group, as the case may be,
shall include such cash, securities or other property, and from and after any
transfer of cash, securities or other property from the TDS Group or another
Tracking Group to the Telecom Group, the TDS Group or such other Tracking Group,
as the case may be, shall no longer include the cash, securities or other
property so transferred and the Telecom Group shall include such cash,
securities or other property.
"Telecom Group Common Shares" shall mean the TDS Telecommunications
Group Common Shares, par value $0.01 per share.
"Tracking Group" shall mean the Aerial Group, the Cellular Group and
the Telecom Group, and any other business group designated as a Tracking Group
by the Board.
"Tracking Stock" shall mean the Aerial Group Common Shares, the
Cellular Group Common Shares and the Telecom Group Common Shares, and any other
shares of capital stock of the Corporation which the Board designates as
Tracking Stock.
"Trading Day" shall mean each weekday other than a day on which the
relevant class of Common Stock of the Corporation is not traded on any national
securities exchange or quoted on the Nasdaq Stock Market or on the
over-the-counter market.
"U.S. Cellular" shall mean United States Cellular Corporation, a
Delaware corporation.
20. Determinations by Board. The Board of Directors shall make such
determinations with respect to the businesses, assets and liabilities to be
attributed to the Groups, the items of income and expenses for purposes of
determining the Corporation Earnings (Loss) attributable to the Groups, the
application of the provisions of this Article IV to transactions to be engaged
in by the Corporation and the powers, preferences and relative, participating,
optional and other special rights of the holders of the classes of Common Stock,
and the qualifications and restrictions thereon, provided by the Restated
Certificate of Incorporation of the Corporation, as may be or become necessary
or appropriate to the exercise of such powers, preferences and relative,
participating, optional and other special rights, including, without limiting
the foregoing, the determinations referred to in the following paragraphs of
this paragraph 20. A record of any such determination shall be filed with the
records of the actions of the Board of Directors.
(a) Upon any acquisition by the Corporation or its
subsidiaries of any assets or business, or any assumption of
liabilities, outside of the ordinary course of business of any then
existing Group, the Board of Directors shall determine whether such
assets, business and liabilities (or an interest therein) shall be for
the benefit of one Group or that an interest therein shall be partly
for the benefit of one or more Groups.
(b) Upon any issuance of any shares of Tracking Stock at a
time when the Number of Shares Issuable with Respect to Retained
Interest or the Number of Shares Issuable with Respect to Inter-Group
Interest is more than zero, the Board of Directors shall determine,
based on the use of the proceeds of such issuance and any other
relevant factors, whether all or any part of the shares of such
Tracking Stock so issued should reduce the Number of Shares Issuable
with Respect to Retained Interest or the Number of Shares Issuable with
Respect to Inter-Group Interest, as the case may be.
(c) Upon any issuance by the Corporation or any subsidiary
thereof of any Convertible Securities that are convertible into or
exchangeable or exercisable for shares of a class of Tracking Stock, if
at the time such Convertible Securities are issued the Number of Shares
Issuable with Respect to Retained Interest or the Number
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of Shares Issuable with Respect to Inter-Group Interest is greater than
zero, the Board of Directors shall determine whether, upon conversion,
exchange or exercise of such Convertible Securities, the issuance of
shares of such Tracking Stock pursuant thereto shall, in whole or in
part, reduce the Number of Shares Issuable with Respect to Retained
Interest or the Number of Shares Issuable with Respect to Inter-Group
Interest, taking into consideration the use of the proceeds of such
issuance of Convertible Securities and any other relevant factors.
(d) Upon any repurchase by the Corporation or any subsidiary
thereof of shares of any class of Tracking Stock, the Board of
Directors shall determine, based on the source of funds used and any
other relevant factors, whether all or any part of the shares of such
Tracking Stock so purchased shall increase the Number of Shares
Issuable with Respect to Retained Interest or the Number of Shares
Issuable with Respect to Inter-Group Interest, as the case may be.
If the Board designates any new class or series of capital stock, the
Board shall make such determinations under this Restated Certificate of
Incorporation as the Board determines may be necessary or appropriate in
connection therewith.
Subject to applicable law, any determinations made in good faith by the
Board under any provision of this Article IV or any certificate of designation
filed pursuant hereto, and any determinations with respect to any Group or the
rights of holders of any class or series of capital stock made pursuant to or in
furtherance of this Article IV, shall be final and binding on all shareholders.
ARTICLE V
The address of the registered office of the Corporation is Corporation
Trust Company, in the County of New Castle, and the name of its registered agent
at such address is Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware 19801.
ARTICLE VI
A. Number and Classes of Directors. The number of directors of the
Corporation shall be fixed by or pursuant to the Bylaws of the Corporation, but
shall not be less than three. The directors shall be divided into three classes
and each class shall be as nearly equal in number as possible. The term of
office of directors of the second class shall expire at the annual meeting of
shareholders in 1998; that of the third class shall expire at the annual meeting
of shareholders in 1999; and that of the first class shall expire at the annual
meeting of shareholders in 2000. At each annual meeting after such
classification, the number of directors equal to the number of the class, the
term of which expired at the time of such meeting, shall be elected to hold
office until the third succeeding annual meeting of shareholders. If the number
of directors fixed by or pursuant to the Bylaws of the Corporation is changed at
any time, any newly created directorships or any decrease in directorships shall
be so apportioned among the classes by the Board so as to make all classes as
nearly equal in number as possible; provided, however, that no decrease in the
number of directors shall shorten the term of any incumbent director.
B. Removal. Any one or more of or all of the directors may be removed
with or without cause only by a vote of the holders of at least a majority of
the voting power of shares then entitled to vote in the election of such
directors.
C. Ballots. The election of directors need not be by written ballot
unless the Bylaws of the Corporation so provide.
ARTICLE VII
To the extent permitted by the DGCL or any other applicable law
presently or hereafter in effect, no director of the Corporation shall be
personally liable to the Corporation or its shareholders for monetary damages
for breach of any fiduciary duty owed to the Corporation or its shareholders;
provided that this provision shall not relieve a director from liability (a) for
any breach of the director's duty of loyalty to the Corporation or its
shareholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) for transactions from
which the director derives
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an improper personal benefit or (d) under Section 174 of the DGCL. This Article
shall not apply to acts or omissions occurring prior to its effectiveness. No
amendment to, expiration of or repeal of this Article shall apply to or have any
effect on the liability or alleged liability of any director of the Corporation
for or with respect to any acts or omissions of such director occurring prior to
such amendment, expiration or repeal.
ARTICLE VIII
The Board of the Corporation, when evaluating any proposal or offer of
another party to (a) make a tender or exchange offer for any equity security of
the Corporation; (b) merge or consolidate the Corporation with another
corporation; or (c) purchase or otherwise acquire all or substantially all of
the properties and assets of the Corporation may, in connection with the
exercise of its judgment in determining what is in the best interests of the
Corporation and its shareholders, give due consideration to all factors the
directors deem relevant, including without limitation (i) the effects on the
customers of the Corporation or any of its subsidiaries or on such other
constituencies of the Corporation as the Board considers relevant under the
circumstances; (ii) not only the consideration being offered (after taking into
account corporate and shareholder taxes) in relation to the then current market
price for the Corporation's outstanding shares of capital stock, but also the
Board's estimate of the future value of the Corporation (including the
unrealized value of its properties and assets) as an independent going concern;
(iii) the purpose of the Corporation, and any of its subsidiaries, to provide
quality products and services on a long-term basis; and (iv) the long-term as
well as short-term interests of the Corporation and its shareholders, including
the possibility that such interests may be best served by the continued
independence of the Corporation. If, on the basis of such factors, the Board so
determines that a proposal or offer to acquire or merge the Corporation, or to
sell its assets, is not in the best interests of the Corporation, it may reject
the proposal or offer. If the Board determines to reject any such proposal or
offer, the Board shall have no obligation to facilitate, to remove any barriers
to, or to refrain from impeding the proposal or offer except as may be required
by applicable law. Except to the extent required by applicable law, the
consideration of any or all of such factors shall not be a violation of the
business judgment rule or of any duty of the directors to the shareholders or a
group of shareholders, even if the directors reasonably determine that any such
factor or factors outweigh the financial or other benefits to the Corporation or
a shareholder or group of shareholders.
ARTICLE IX
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to adopt, amend or
repeal the Bylaws of the Corporation.
ARTICLE X
Subject to the last sentence of this paragraph, each person
who is or was a director or officer of the Corporation, and each person who
serves or served at the request of the Corporation as a director or officer of
another enterprise, shall be indemnified by the Corporation in accordance with,
and to the fullest extent authorized by, the DGCL as it may be in effect from
time to time. The right of indemnity provided herein shall not be deemed
exclusive of any other rights to which any person may be entitled under any
Bylaw, agreement, vote of shareholders or directors, or otherwise. The
Corporation may provide indemnification to any such person, by agreement or
otherwise, on such terms and conditions as the Board of Directors may approve.
Any agreement for indemnification of any director, officer, employee or other
person may provide indemnification rights which are broader or otherwise differ
from those set forth herein. In furtherance and not in limitation of the powers
conferred by statute, the Board is expressly authorized to adopt, amend or
repeal the Bylaws of the Corporation regarding the manner and conditions under
which indemnification shall be provided hereunder by the Corporation and the
extent thereof from time to time as deemed appropriate by the Board in the best
interests of the Corporation.
* * * * * *
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SECOND: The Board of Directors of the Corporation, at a meeting duly called
at which a quorum existed, duly adopted resolutions proposing and approving and
declaring advisable this Restated Certificate of Incorporation of the
Corporation.
THIRD: Pursuant to Section 228 of the DGCL, the adoption of this Restated
Certificate of Incorporation was consented to in writing by the sole shareholder
of the Corporation.
FOURTH: This Restated Certificate of Incorporation was duly adopted in
accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Telephone and Data Systems, Inc. has caused this
Restated Certificate to be signed by its President this 22nd day of May, 1998.
TELEPHONE AND DATA SYSTEMS, INC.
By: /s/ LeRoy T. Carlson, Jr.
----------------------------------
LeRoy T. Carlson, Jr.
President
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ATTACHMENT I
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
TELEPHONE AND DATA SYSTEMS, INC.
INTRODUCTORY NOTE: This Attachment I to the Restated Certificate of
Incorporation of Telephone and Data Systems, Inc., a Delaware corporation ("TDS
Delaware"), describes the designations, rights, privileges and limitations of
the series of Preferred Shares of TDS Delaware which will be issued in the
Merger (as defined in the Restated Certificate of Incorporation) in exchange for
Preferred Shares of Telephone and Data Systems, Inc., an Iowa corporation ("TDS
Iowa"). Unless otherwise required by the context, for purposes of this
Attachment I, (i) references to dates of issuance of any series of Preferred
Shares shall mean the original dates of issuance of the related series of
Preferred Shares of TDS Iowa, (ii) references to conversion rates of any series
of Preferred Shares shall mean the conversion rates included in the original
certificate of designation of such series by TDS Iowa, without giving effect to
stock splits or other events after the original dates of issuance requiring
adjustment to such conversion rates, and (iii) references to all conversion or
redemption dates and periods shall be based on the original issuance date of
each series of Preferred Shares by TDS Iowa.
A. $6.00 Cumulative Voting Series A Preferred Stock, $.01 par value,
Liquidation Value $100.00 Per Share
(a) Designation-The designation of this preferred stock shall be "$6.00
Cumulative Voting Series A Preferred Stock" (hereinafter referred to as "Series
A Preferred Stock").
(b) Dividends-The holders of the Series A Preferred Stock shall be
entitled to receive, when and as declared by the board of directors of the
Corporation, out of any assets of the Corporation available for dividends
pursuant to the laws of the State of Delaware, preferential dividends at the
rate of six dollars ($6.00) per annum per share and no more. The dividends, when
payable, shall be paid quarterly on the first days of January, April, July, and
October in each year, before any dividends shall be declared or paid upon or set
apart for the common stock of the Company for that year. Such dividends upon the
preferred stock shall be cumulative from the date of issue thereof so that if
dividends for any past dividend period at the rate of six dollars ($6.00) per
annum shall not have been paid thereon or declared and a sum sufficient for
payment thereof set apart, the deficiency shall be fully paid or set apart but
without interest, before any dividend shall be paid upon or set apart for the
common stock. Whenever the full dividend upon the preferred stock for all past
dividend periods shall have been paid and the full dividend thereon for the then
current dividend period shall have been paid or declared and a sum sufficient
for the payment thereof set apart, dividends upon the common stock may be
declared by the board of directors out of the remainder of the assets available
therefor.
(c) Redemption-The Corporation may, at the option of the board of
directors, redeem the whole or any part of the outstanding Series A Preferred
Stock at any time after January 3, 1974. If such redemption is made, the holders
of any shares of Series A Preferred Stock redeemed shall be entitled to receive:
$105.00 per share if redeemed on or before January 3, 1975;
$104.50 if redeemed after January 3, 1975 but on or before January 3, 1976;
$104.00 if redeemed after January 3, 1976 but on or before January 3, 1977;
$103.50 if redeemed after January 3, 1977 but on or before January 3, 1978;
$103.00 if redeemed after January 3, 1978 but on or before January 3, 1979;
$102.50 if redeemed after January 3, 1979 but on or before January 3, 1980;
$102.00 if redeemed after January 3, 1980 but on or before January 3, 1981;
$101.50 if redeemed after January 3, 1981 but on or before January 3, 1982;
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<PAGE>
$101.00 if redeemed after January 3, 1982 but on or before January 3, 1983;
$100.50 if redeemed after January 3, 1983 but on or before January 3, 1984;
$100.00 if redeemed after January 3, 1984;
plus an amount equal to all dividends accrued and unpaid to the redemption date.
Notice of election to redeem shall be mailed to each holder of stock to be
redeemed not less than thirty (30) days prior to the date upon which the stock
is to be redeemed. In case less than all of the outstanding Series A Preferred
Stock is to be redeemed, the amount to be redeemed and the method of effecting
such redemption, whether by lot or pro rata or otherwise, may be determined by
the board of directors. If on or before the redemption date named in such
notice, the funds necessary for such redemption shall have been set aside by the
Corporation so as to be available for payment on demand to the holders of the
preferred stock so called for redemption, then, notwithstanding that any
certificate of the preferred stock so called for redemption shall not have been
surrendered for cancellation, the dividends thereon shall cease to accrue from
and after the date of redemption so designated, and all rights with respect to
such preferred stock so called for redemption, including any right to vote or
otherwise participate in the determination of any proposed corporate action,
shall forthwith after such redemption date cease and determine, except only the
right of the holder to receive the redemption price therefor, but without
interest. Stock redeemed pursuant to the provisions hereof or any Series A
Preferred Stock purchased or otherwise acquired shall not be reissued but shall
be canceled and proceedings shall be taken in the manner prescribed by statute
to reduce the shares accordingly.
(d) Voting Rights-The holders of the shares of Series A Preferred Stock
shall be entitled to one vote for each share of such stock standing in the name
of the holder on the books of the Corporation and shall vote together with the
holders of the common stock of the Corporation as one class.
(e) Preemptive Rights-No holder of any shares of Series A Preferred
Stock shall have any preemptive right to subscribe for or acquire additional
shares of the Corporation of the same or any other class, whether such shares be
hereby or hereafter authorized; and no holder of Series A Preferred Stock shall
have any preemptive right to acquire any shares which may be held in the
treasury of the Corporation; all such additional or treasury shares may be sold
for such consideration at such time and to such person or persons as the board
of directors may from time to time determine.
(f) Liquidation Rights-In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
the holders of the Series A Preferred Stock shall be entitled, before any assets
of the Corporation shall be distributed among or paid over to the holders of the
common stock, to receive out of the assets of the Company $100.00 per share of
Series A Preferred Stock. If upon any such dissolution, liquidation or winding
up, the assets of the Corporation available for payment to stockholders are not
sufficient to make payment in full to the holders of the Series A Preferred
Stock, payment shall be made to such holders ratably in accordance with the
number of shares held by them and, in case there shall then be more than one
series of the Preferred Stock ratably in accordance with the respective
distributive amount to which such holders shall be entitled.
B. $7.00 Cumulative Convertible Voting Series B Preferred Stock, $.01 par
value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of this preferred stock shall be "$7.00
Cumulative Convertible Voting Series B Preferred Stock" (hereinafter referred to
as "Series B Preferred Stock").
(b) Dividends-The holders of the Series B Preferred Stock shall be
entitled to receive, when and as declared by the board of directors of the
Corporation, out of any assets of the Corporation available for dividends
pursuant to the laws of the State of Delaware, preferential dividends at the
rate of seven dollars ($7.00) per annum per share and no more. The dividends,
when payable, shall be paid quarterly on the first days of March, June,
September and December in each year, before any dividends shall be declared or
paid upon or set apart for the common stock of the Company for that year. Such
dividends upon the Series B Preferred Stock shall be cumulative from the date of
issue thereof so that if dividends for any past dividend period at the rate of
seven dollars ($7.00) per annum shall not have been paid thereon or declared and
a sum sufficient for payment thereof set apart, the deficiency shall be fully
paid or set apart but without interest, before any dividend
I-2
<PAGE>
shall be paid upon or set apart for the common stock. Provided, however, that no
dividends shall be declared on the shares of any series of preferred stock for
any dividend period unless the full dividend for all prior dividend periods
shall have been declared or shall be declared at the same time upon all
preferred stock outstanding during such prior dividend periods, and further
provided, that no dividends shall be declared on the shares of any series of
preferred stock unless a dividend for the same period shall be declared at the
same time upon all preferred stock outstanding during said period in like
proportion to the dividend rate upon such shares. Whenever the full dividend
upon all the preferred stock for all past dividend periods shall have been paid
and the full dividend thereon for the then current dividend period shall have
been paid or declared and a sum sufficient for the payment thereof set apart,
dividends upon the common stock may be declared by the board of directors out of
the remainder of the assets available therefor.
(c) Redemption-The Corporation may, at the option of the board of
directors, redeem the whole or any part of the outstanding Series B Preferred
Stock at any time commencing five years after the date of issuance. If such
redemption is made, the holders of any shares of Series B Preferred Stock
redeemed shall be entitled to receive $100 per share plus an amount equal to all
dividends accrued and unpaid to the redemption date.
Notice of election to redeem shall be mailed to each holder of Series B
Preferred Stock to be redeemed not less than thirty (30) days prior to the date
upon which such stock is to be redeemed. In case less than all of the
outstanding Series B Preferred Stock is to be redeemed, the amount to be
redeemed and the method of effecting such redemption, whether by lot or pro rata
or otherwise, may be determined by the board of directors. If on or before the
redemption date named in such notice, the funds necessary for such redemption
shall have been set aside by the Corporation so as to be available for payment
on demand to the holders of the Series B Preferred Stock so called for
redemption, then, notwithstanding that any certificate of the Series B Preferred
Stock so called for redemption shall not have been surrendered for cancellation,
the dividends thereon shall cease to accrue from and after the date of
redemption so designated, and all rights with respect to such Series B Preferred
Stock so called for redemption, including any right to vote or otherwise
participate in the determination of any proposed corporate action, shall
forthwith after such redemption date cease and terminate, except only the right
of the holder to receive the redemption price therefor, but without interest.
Stock redeemed pursuant to the provisions hereof or any Series B Preferred Stock
purchased or otherwise acquired shall not be reissued but shall be canceled and
proceedings shall be taken in the manner prescribed by statute to reduce the
shares accordingly.
(d) Voting Rights-The holders of the shares of Series B Preferred Stock
shall be entitled to one vote for each share of such stock standing in the name
of the holder on the books of the Corporation and shall vote together with the
holders of the common stock and the holders of other series of the preferred
stock of the Corporation as one class.
(e) Preemptive Rights-No holder of any shares of Series B Preferred
Stock shall have any preemptive right to subscribe for or acquire additional
shares of the Corporation of the same or any other class or series, whether such
shares be hereby or hereafter authorized; and no holder of Series B Preferred
Stock shall have any preemptive right to acquire any shares which may be held in
the treasury of the Corporation; all such additional or treasury shares may be
sold for such consideration at such time and to such person or persons as the
board of directors may from time to time determine.
(f) Conversion-
(1) The Series B Preferred Stock shall be convertible into
Common Stock as hereinafter provided, and, when and as so converted,
such Series B Preferred Stock shall be canceled and retired and shall
not be reissued as such. Any holder of the Series B Preferred Stock may
at any time prior to five years from the date of issuance convert such
stock into full shares of the Common Stock of the Corporation at the
rate of ten (10) shares of Common Stock for each share of Series B
Preferred Stock. On presentation and surrender to the Corporation at
its Offices of the certificates for shares of the Series B Preferred
Stock to be converted, the holder of such stock shall be entitled to
receive in exchange therefor certificates for shares of the fully paid
and non-assessable Common Stock of the Corporation at the rate
aforesaid, all under suitable regulations to be prescribed by the board
of directors of the Corporation. Conversion of Series B Preferred Stock
in the manner aforesaid shall not affect the right of the holder of
such stock to receive dividends accrued but unpaid on such shares as of
the dividend payment date immediately prior to conversion.
(2) The number of shares of Common Stock into which each share
of Series B Preferred Stock is convertible, shall be subject to
adjustment from time to time as in clauses (A) and (B) of this
subparagraph (2):
I-3
<PAGE>
(A) In case the Corporation shall (i) pay a dividend
on its Common Stock in shares of the Corporation, (ii)
subdivide its outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares, or
(iv) issue by reclassification of its Common Stock (whether
pursuant to a merger or consolidation or otherwise) any shares
of the Corporation, then the holder of each share of Series B
Preferred Stock shall be entitled to receive upon the
conversion of such share, the number of shares of the
Corporation which he would have owned or would have been
entitled to receive after the happening of any of the events
described above had such share been converted immediately
prior to the happening of such event. An adjustment made
pursuant to this provision shall become effective
retroactively with respect to conversions made subsequent to
the record date in the case of a dividend, and shall become
effective on the effective date in the case of a subdivision,
combination or reclassification.
(B) No adjustment in the conversion rate shall be
required unless such adjustment would require an increase or
decrease in such rate of at least one-tenth of a common share;
provided, however, that any adjustments which by reason of
this clause (B) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
(3) The Corporation shall at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of
issue upon conversion of shares of Series B Preferred Stock as herein
provided, such number of shares of Common Stock as shall then be
issuable upon the conversion of all outstanding shares of Series B
Preferred Stock.
(4) Fractional shares of Common Stock shall not be issued upon
conversion of Series B Preferred Stock nor shall cash adjustments be
made for fractional shares upon such conversion.
(5) For the purposes of this paragraph (f), the term "Common
Stock" shall mean (A) the class of stock designated as the Common Stock
of the Corporation at the date of this Restated Certificate of
Incorporation, or (B) any other class of stock resulting from
successive changes or reclassifications of such Common Stock consisting
solely of change in par value, or from par value to no par value, or
from no par value to par value.
(g) Liquidation Rights-In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
the holders of the Series B Preferred Stock shall be entitled, before any assets
of the Corporation shall be distributed among or paid over to the holders of the
common stock, to receive out of the assets of the Company $100.00 per share of
Series B Preferred Stock. If upon any such dissolution, liquidation or winding
up, the assets of the Corporation available for payment to stockholders are not
sufficient to make payment in full to the holders of the Series B Preferred
Stock, payment shall be made to such holders ratably in accordance with the
number of shares held by them and, in case there shall then be more than one
series of the Preferred Stock outstanding at that time, ratably in accordance
with the respective distributive amount to which such holders shall be entitled.
D. 6.00 Cumulative Convertible Voting Series D Preferred Stock, $.01 par
value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of this preferred stock shall be $6.00
Cumulative Convertible Voting Series D Preferred Stock (hereinafter referred to
as "Series D Preferred Stock").
(b) Dividends-The holders of the Series D Preferred Stock shall be
entitled to receive, when and as declared by the board of directors of the
Corporation, out of any assets of the Corporation available for dividends
pursuant to the laws of the State of Delaware, preferential dividends at the
rate of six dollars ($6.00) per annum per share and no more. The dividends, when
payable, shall be paid quarterly on the first days of March, June, September,
and December in each year, before any dividends shall be declared or paid upon
or set apart for the common stock of the Company for that year. Such dividends
upon the Series D Preferred Stock shall be cumulative from the date of issue
thereof so that if dividends for any past dividend period at the rate of six
dollars ($6.00) per annum shall not have been paid thereon or declared and a sum
sufficient for payment thereof set apart, the deficiency shall be fully paid or
set apart but without interest, before any dividend shall be paid upon or set
apart for the common stock. Provided, however, that no dividends shall be
declared on the shares of any series of preferred stock for any dividend period
unless the full dividend for all prior dividend periods shall have been
I-4
<PAGE>
declared or shall be declared at the same time upon all preferred stock
outstanding during said prior dividend periods, and further provided, that no
dividends shall be declared on the shares of any series of preferred stock
unless a dividend for the same period shall be declared at the same time upon
all preferred stock outstanding during said period in like proportion to the
dividend rate upon such shares. Whenever the full dividend upon all the
preferred stock for all past dividend periods shall have been paid and the full
dividend thereon for the then current dividend period shall have been paid or
declared and a sum sufficient for the payment thereof set apart, dividends upon
the common stock may be declared by the board of directors out of the remainder
of the assets available therefor.
(c) Redemption-The Corporation may, at the option of the board of
directors, redeem the whole or any part of the outstanding Series D Preferred
Stock at any time commencing ten years after the date of issuance. If such
redemption is made, the holders of any shares of Series D Preferred Stock
redeemed shall be entitled to receive $100 per share plus an amount equal to all
dividends accrued and unpaid to the redemption date.
Notice of election to redeem shall be mailed to each holder of Series D
Preferred Stock to be redeemed not less than thirty (30) days prior to the date
upon which such stock is to be redeemed. In case less than all of the
outstanding Series D Preferred Stock is to be redeemed, the amount to be
redeemed and the method of effecting such redemption, whether by lot or pro rata
or otherwise, may be determined by the board of directors. If on or before the
redemption date named in such notice, the funds necessary for such redemption
shall have been set aside by the Corporation so as to be available for payment
on demand to the holders of the Series D Preferred Stock so called for
redemption then, notwithstanding that any certificate of the Series D Preferred
Stock so called for redemption shall not have been surrendered for cancellation,
the dividends thereon shall cease to accrue from and after the date of
redemption so designated, and all rights with respect to such Series D Preferred
Stock so called for redemption, including any right to vote or otherwise
participate in the determination of any proposed corporate action, shall
forthwith after such redemption date cease and terminate, except only the right
of the holder to receive the redemption price therefor, but without interest.
Stock redeemed pursuant to the provisions hereof or any Series D Preferred Stock
purchased or otherwise acquired shall not be reissued but shall be canceled and
proceedings shall be taken in the manner prescribed by statute to reduce the
shares accordingly.
(d) Voting Rights-The holders of the shares of Series D Preferred Stock
shall be entitled to one vote for each share of such stock standing in the name
of the holder on the books of the Corporation and shall vote together with the
holders of the common stock and the holders of other series of the preferred
stock of the Corporation as one class.
(e) Preemptive Rights-No holder of any shares of Series D Preferred
Stock shall have any preemptive right to subscribe for or acquire additional
shares of the Corporation of the same or any other class or series, whether such
shares be hereby or hereafter authorized; and no holder of Series D Preferred
Stock shall have any preemptive right to acquire any shares which may be held in
the treasury of the Corporation; all such additional or treasury shares may be
sold for such consideration at such time and to such person or persons as the
board of directors may from time to time determine.
(f) Conversion-
(1) The Series D Preferred Stock shall be convertible into
Common Stock as hereinafter provided and, when and as so converted,
such Series D Preferred Stock shall be canceled and retired and shall
not be reissued as such. Any holder of the Series D Preferred Stock may
at any time commencing two (2) years and terminating upon the
expiration of ten (10) years from the date of issuance convert such
stock into full shares of the Common Stock of the Corporation at the
rate of ten (10) shares of Common Stock for each share of Series D
Preferred Stock. On presentation and surrender to the Corporation at
its offices of the certificates for shares of the Series D Preferred
Stock to be converted, the holder of such stock shall be entitled to
receive in exchange therefor certificates for shares of the fully paid
and non-assessable Common Stock of the Corporation at the rate
aforesaid, all under suitable regulations to be prescribed by the board
of directors of the Corporation. Conversion of Series D Preferred Stock
in the manner aforesaid shall not affect the right of the holder of
such stock to receive dividends accrued but unpaid on such shares as of
the dividend payment date immediately prior to conversion.
(2) The number of shares of Common Stock into which each share
of Series D Preferred Stock is convertible, shall be subject to
adjustment from time to time as in clauses (A) and (B) of this
subparagraph (2):
I-5
<PAGE>
(A) In case the Corporation shall (i) pay a dividend
on its Common Stock in shares of the Corporation, (ii)
subdivide its outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares, or
(iv) issue by reclassification of its Common Stock (whether
pursuant to a merger or consolidation or otherwise) any shares
of the Corporation, then the holder of each share of Series D
Preferred Stock shall be entitled to receive upon the
conversion of such share, the number of shares of the
Corporation which he would have owned or would have been
entitled to receive after the happening of any of the events
described above had such share been converted immediately
prior to the happening of such event. An adjustment made
pursuant to this provision shall become effective
retroactively with respect to conversions made subsequent to
the record date in the case of a dividend, and shall become
effective on the effective date in the case of a subdivision,
combination or reclassification.
(B) No adjustment in the conversion rate shall be
required unless such adjustment would require an increase or
decrease in such rate of at least one-tenth of a share of
Common Stock; provided, however, that any adjustments which by
reason of this clause (B) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment.
(3) The Corporation shall at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of
issue upon conversion of shares of Series D Preferred Stock as herein
provided, such number of shares of Common Stock as shall then be
issuable upon the conversion of all outstanding shares of Series D
Preferred Stock.
(4) Fractional shares of Common Stock shall not be issued upon
conversion of Series D Preferred Stock nor shall cash adjustments be
made for fractional shares upon such conversion.
(5) For the purposes of this paragraph (f), the term "Common
Stock" shall mean (A) the class of stock designated as the Common Stock
of the Corporation at the date of this Restated Certificate of
Incorporation, or (B) any other class of stock resulting from
successive changes or reclassifications of such Common Stock consisting
solely of change in par value, or from par value to no par value, or
from no par value to par value.
(g) Liquidation Rights-In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
the holders of the Series D Preferred Stock shall be entitled, before any assets
of the Corporation shall be distributed among or paid over to the holders of the
common stock, to receive out of the assets of the Company $100.00 per share of
Series D Preferred Stock. If upon any such dissolution, liquidation or winding
up, the assets of the Corporation available for payment to stockholders are not
sufficient to make payment in full to the holders of the Series D Preferred
Stock, payment shall be made to such holders ratably in accordance with the
number of shares held by them and, in case there shall then be more than one
series of the Preferred Stock outstanding at that time, ratably in accordance
with the respective distributive amount to which such holders shall be entitled.
G. $7.00 Cumulative Convertible Voting Series G Preferred Stock, $.01 par
value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of this preferred stock shall be $7.00
Cumulative Convertible Voting Series G Preferred Stock (hereinafter referred to
as "Series G Preferred Stock").
(b) Dividends-The holders of the Series G Preferred Stock shall be
entitled to receive, when and as declared by the Board of Directors of the
Corporation, out of any assets of the Corporation available for dividends
pursuant to the laws of the State of Delaware, preferential dividends at the
rate of seven dollars ($7.00) per annum per share. The dividends, when payable,
shall be paid quarterly on the first days of March, June, September and December
in each year, before any dividends shall be declared or paid upon or set apart
for the common stock of the Company for that year. Such dividends upon the
Series G Preferred Stock shall be cumulative from the date of issue thereof so
that if dividends for any past dividend period at the rate of seven dollars
($7.00) per annum shall not have been paid thereon or declared and a sum
sufficient for payment thereof set apart, the deficiency shall be fully paid or
set apart before any dividend shall be paid upon or set apart for the common
stock. Provided however, that no dividends shall be declared on the shares of
any series of preferred stock for any dividend period unless the full dividend
for all prior dividend periods shall have been declared or shall be declared at
the
I-6
<PAGE>
same time upon all preferred stock outstanding during said prior dividend
periods, and further provided, that no dividends shall be declared on the shares
of any series of preferred stock unless a dividend for the same period shall be
declared at the same time upon all preferred stock outstanding during said
period in like proportion to the dividend rate upon such shares. Whenever the
full dividend upon all the preferred stock for all past dividend periods shall
have been paid and the full dividend thereon for the then current dividend
period shall have been paid or declared and a sum sufficient for the payment
thereof set apart, dividends upon the common stock may be declared by the Board
of Directors out of the remainder of the assets available therefor.
(c) Redemption-Commencing ten years after the date of issuance, the
Corporation may, at the option of the Board of Directors, redeem in any one year
all or any part of the outstanding shares of Series G Preferred Stock at a price
of $100.00 per share.
Notice of redemption shall be mailed to each holder of Series G
Preferred Stock to be redeemed not less than thirty (30) days prior to the date
upon which the stock is to be redeemed. In case less than all of the outstanding
Series G Preferred Stock is to be redeemed, the amount to be redeemed and the
method of effecting such redemption, whether by lot or pro rata or otherwise,
may be determined by the Board of Directors. If on or before the redemption date
named in such notice, the funds necessary for such redemption shall have been
set aside by the Corporation so as to be available for payment on demand to the
holders of the Series G Preferred Stock so called for redemption then,
notwithstanding that any certificate of the Series G Preferred Stock so called
for redemption shall not have been surrendered for cancellation, the dividends
thereon shall cease to accrue from and after the date of redemption so
designated and all rights with respect to such Series G Preferred Stock so
called for redemption, including any right to vote or otherwise participate in
the determination of any proposed corporate action, shall forthwith after such
redemption date cease and determine, except only the right of the holder to
receive the redemption price therefor, but with interest on the unpaid dividends
calculated only until the date of redemption and without any further interest
whatsoever. Stock redeemed pursuant to the provisions hereof or any Series G
Preferred Stock purchased or otherwise acquired by the Corporation shall not be
reissued but shall be canceled and proceedings shall be taken in the manner
prescribed by statute to reduce the shares accordingly.
(d) Voting Rights-The holders of the shares of Series G Preferred Stock
shall be entitled to one vote for each share of such stock standing in the name
of the holder on the books of the Corporation and shall vote together with the
holders of the common stock and the holders of other series of the preferred
stock of the Corporation as one class.
(e) Preemptive Rights-No holder of any shares of Series G Preferred
Stock shall have any preemptive right to subscribe for or acquire additional
shares of the Corporation of the same or any other class or series, whether such
shares be hereby or hereafter authorized; and no holder of Series G Preferred
Stock shall have any preemptive right to acquire any shares which may be held in
the treasury of the Corporation; all such additional or treasury shares may be
sold for such consideration at such time and to such person or persons as the
Board of Directors may from time to time determine, unless otherwise restricted
by the terms of this statement of designations, powers and preferences.
(f) Conversion-
(1) The Series G Preferred Stock shall be convertible into
Common Stock as hereinafter provided and, when and as so converted,
such Series G Preferred Stock shall be canceled and retired and shall
not be reissued as such.
(2) Any holder of the Series G Preferred Stock, at any time
commencing immediately upon the issuance of the Series G Preferred
Stock and terminating upon the expiration of ten years from the date of
issuance, may convert such stock into full shares of the Common Stock
of the Corporation at the rate of nine (9) shares of Common Stock for
each share of Series G Preferred Stock upon 90 days written notice.
(3) On presentation and surrender to the Corporation at its
offices of the certificates for shares of the Series G Preferred Stock
to be converted, the holder of such stock shall be entitled to receive
in exchange therefor certificates for shares of the fully paid and
non-assessable Common Stock of the Corporation at the rate aforesaid,
all under suitable regulations to be prescribed by the Board of
Directors of the Corporation. Conversion of Series G Preferred Stock in
the manner aforesaid shall not affect the right of the holder of such
stock to receive dividends accrued but unpaid on such shares as of the
dividend payment date immediately prior to conversion.
I-7
<PAGE>
(4) The number of shares of Common Stock into which each share
of Series G Preferred Stock is convertible shall be subject to
adjustment from time to time as in clauses (A) and (B) of this
subparagraph (4):
(A) In case the Corporation shall (i) pay a dividend
on its Common Stock in shares of the Corporation, (ii)
subdivide its outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares, or
(iv) issue by reclassification of its Common Stock (whether
pursuant to a merger or consolidation or otherwise) any shares
of the Corporation, then the holder of each share of Series G
Preferred Stock shall be entitled to receive upon the
conversion of such share, the number of shares of the
Corporation which he would have owned or would have been
entitled to receive after the happening of any of the events
described above had such share been converted immediately
prior to the happening of such event. An adjustment made
pursuant to this provision shall become effective on the
effective date in the case of a subdivision, combination or
reclassification.
(B) No adjustment in the conversion rate shall be
required unless such adjustment would require an increase or
decrease in such rate of at least one-tenth of a common share;
provided, however, that any adjustments which by reason of
this clause (B) are not required to be made shall be carried
forward and taken into account by any subsequent adjustment.
(5) The Corporation shall at all times reserve and keep
available out of its authorized Common Stock solely for the purpose of
issue upon conversion of shares of Series G Preferred Stock as herein
provided, such number of shares of Common Stock as shall then be
issuable upon the conversion of all outstanding shares of Series G
Preferred Stock.
(6) Fractional shares of Common Stock shall not be issued upon
conversion of Series G Preferred Stock nor shall cash adjustments be
made for fractional shares upon such conversion.
(7) For the purpose of this paragraph (f), the term "Common
Stock" shall mean (A) the class of stock designated as the Common Stock
of the Corporation at the date of this Restated Certificate of
Incorporation, or (B) any other class of stock resulting from
successive changes or reclassifications of such Common Stock consisting
solely of change in par value, or from par value to no par value, or
from no par value to par value.
(g) Liquidation Rights-In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
the holders of the Series G Preferred Stock shall be entitled, before any assets
of the Corporation shall be distributed among or paid over to the holders of the
common stock, to receive out of the assets of the Company $100.00 per share of
Series G Preferred Stock. If upon any such dissolution, liquidation or winding
up, the assets of the Corporation available for payment to stockholders are not
sufficient to make payment in full to the holders of the Series G Preferred
Stock, payment shall be made to such holders ratably in accordance with the
number of shares held by them and, in case there shall then be more than one
series of the Preferred Stock outstanding at that time, ratably in accordance
with the respective distributive amount to which such holders shall be entitled.
H. $7.00 Cumulative Convertible Voting Series H Preferred Stock, $.01 par
value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of this preferred stock shall be $7.00
Cumulative Convertible Voting Series H Preferred Stock (hereinafter referred to
as "Series H Preferred Stock").
(b) Dividends-The holders of the Series H Preferred Stock shall be
entitled to receive, when and as declared by the Board of Directors of the
Corporation, out of any assets of the Corporation available for dividends
pursuant to the laws of the State of Delaware, preferential dividends at the
rate of seven dollars ($7.00) per annum per share. The dividends, when payable,
shall be paid quarterly on the first days of March, June, September and December
in each year, before any dividends shall be declared or paid upon or set apart
for the common stock of the Company for that year. Such dividends upon the
Series H Preferred Stock shall be cumulative from the date of issue thereof so
that if dividends for any past dividend period at the rate of seven dollars
($7.00) per annum shall not have been paid thereon or declared and a sum
sufficient for payment thereof set apart, the deficiency shall be fully paid or
set apart before any dividend shall be paid upon or set apart for the common
stock. Provided, however, that no dividends shall be declared on the shares of
any series of preferred stock for any
I-8
<PAGE>
dividend period unless the full dividend for all prior dividend periods shall
have been declared or shall be declared at the same time upon all preferred
stock outstanding during said prior dividend periods, and further provided, that
no dividends shall be declared on the shares of any series of preferred stock
unless a dividend for the same period shall be declared at the same time upon
all preferred stock outstanding during said period in like proportion to the
dividend rate upon such shares. Whenever the full dividend upon all the
preferred stock for all past dividend periods shall have been paid and the full
dividend thereon for the then current dividend period shall have been paid or
declared and a sum sufficient for the payment thereof set apart, dividends upon
the common stock may be declared by the Board of Directors out of the remainder
of the assets available therefor.
(c) Redemption-
(1) Unless the holder of Series H Preferred Stock elects not
to have his shares redeemed in any one or more years in accordance with
this subparagraph (c)(1) by so informing the Corporation at any time or
times in writing (which election, if made, shall be irrevocable and
shall forever bar redemption of the Series H Preferred Stock except in
accordance with the provisions of subparagraph (c)(2)), the Corporation
will redeem more than twenty percent of the shares of Series H
Preferred Stock then held by each holder of Series H Preferred Stock at
an aggregate price of $119.06 per share on the anniversary of the date
of issuance of the Series H Preferred Stock in the following years:
1981, 1984, 1987 and 1989 through and including 1995.
(2) Beginning on the twenty-first anniversary of the date of
issuance of the Series H Preferred Stock, the holders of Series H
Preferred Stock shall have the right, at their option, to have the
Corporation redeem any or all of the outstanding shares of Series H
Preferred Stock at a price of $100.00 per share.
(3) If, on or before the applicable redemption date named
above, the funds necessary for such redemption shall have been set
aside by the Corporation so as to be available for payment on demand to
the holders of the Series H Preferred Stock so called for redemption,
then, notwithstanding that any certificate of the Series H Preferred
Stock so called for redemption shall not have been surrendered for
cancellation, the dividends thereon shall cease to accrue from and
after the date of redemption so designated and all rights with respect
to such Series H Preferred Stock so called for redemption, including
any right to vote or otherwise participate in the determination of any
proposed corporate action, shall forthwith after such redemption date
cease and determine, except only the right of the holder to receive the
redemption price therefor, but with interest on the unpaid dividends
calculated only until the date of redemption and without any further
interest whatsoever.
(4) Stock redeemed pursuant to any of the provisions of
paragraph (c) or any Series H Preferred Stock purchased or otherwise
acquired by the Corporation shall not be reissued but shall be canceled
and proceedings shall be taken in the manner prescribed by statute to
reduce the shares accordingly.
(d) Voting Rights-The holders of the shares of Series H Preferred Stock
shall be entitled to one vote for each share of such stock standing in the name
of the holder on the books of the Corporation and shall vote together with the
holders of the common stock and the holders of other series of the preferred
stock of the Corporation as one class.
(e) Preemptive Rights-No holder of any shares of Series H Preferred
Stock shall have any preemptive right to subscribe for or acquire additional
shares of the Corporation of the same or any other class or series, whether such
shares be hereby or hereafter authorized; and no holder of Series H Preferred
Stock shall have any preemptive right to acquire any shares which may be held in
the treasury of the Corporation; all such additional or treasury shares may be
sold for such consideration at such time and to such person or persons as the
Board of Directors may from time to time determine, unless otherwise restricted
by the terms of this statement of designations, powers and preferences.
(f) Conversion-
(1) The Series H Preferred Stock shall be convertible into
Common Stock as hereinafter provided and, when and as so converted,
such Series H Preferred Stock shall be canceled and retired and shall
not be reissued as such.
I-9
<PAGE>
(2) Any holder of the Series H Preferred Stock, at any time
commencing immediately upon the issuance of the Series H Preferred
Stock and terminating upon the expiration of ten years from the date of
issuance, may convert such stock into full shares of the Common Stock
of the Corporation at the rate of nine (9) shares of Common Stock for
each share of Series H Preferred Stock upon 90 days written notice to
the Corporation by the holder of the Series H Preferred Stock. The
Corporation, at its option, may consent to shorter notice.
(3) On presentation and surrender to the Corporation at its
offices of the certificates for shares of the Series H Preferred Stock
to be converted, the holder of such stock shall be entitled to receive
in exchange therefor certificates for shares of the fully paid and
non-assessable Common Stock of the Corporation at the rate aforesaid,
all under suitable regulations to be prescribed by the Board of
Directors of the Corporation. Conversion of Series H Preferred Stock in
the manner aforesaid shall not affect the right of the holder of such
stock to receive dividends accrued but unpaid on such shares as of the
dividend payment date immediately prior to conversion.
(4) The number of shares of Common Stock into which each share
of Series H Preferred Stock is convertible shall be subject to
adjustment from time to time as in clauses (A) and (B) of this
subparagraph (4):
(A) In case the Corporation shall (i) pay a dividend
on its Common Stock in shares of the Corporation, (ii)
subdivide its outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares, or
(iv) issue by reclassification of its Common Stock (whether
pursuant to a merger or consolidation or otherwise) any shares
of the Corporation, then the holder of each share of Series H
Preferred Stock shall be entitled to receive upon the
conversion of such share, the number of shares of the
Corporation which he would have owned or would have been
entitled to receive after the happening of any of the events
described above had such share been converted immediately
prior to the happening of such event. An adjustment made
pursuant to this provision shall become effective on the
effective date in the case of a subdivision, combination or
reclassification.
(B) No adjustment in the conversion rate shall be
required unless such adjustment would require an increase or
decrease in such rate of at least one-tenth of a common share;
provided, however, that any adjustments which by reason of
this clause (B) are not required to be made shall be carried
forward and taken into account by any subsequent adjustment.
(5) The Corporation shall at all times reserve and keep
available out of its authorized Common Stock solely for the purpose of
issue upon conversion of shares of Series H Preferred Stock as herein
provided, such number of shares of Common Stock as shall then be
issuable upon the conversion of all outstanding shares of Series H
Preferred Stock.
(6) Fractional shares of Common Stock shall not be issued upon
conversion of Series H Preferred Stock nor shall cash adjustments be
made for fractional shares upon such conversion.
(7) For the purposes of this paragraph (f), the term "Common
Stock" shall mean (A) the class of stock designated as the Common Stock
of the Corporation at the date of this Restated Certificate of
Incorporation, or (B) any other class of stock resulting from
successive changes or reclassifications of such Common Stock consisting
solely of change in par value, or from par value to no par value, or
from no par value to par value.
(g) Liquidation Rights-In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
the holders of the Series H Preferred Stock shall be entitled, before any assets
of the Corporation shall be distributed among or paid over to the holders of the
Common Stock, to receive out of the assets of the Company $100.00 per share of
Series H Preferred Stock. If upon any such dissolution, liquidation or winding
up, the assets of the Corporation available for payment to stockholders are not
sufficient to make payment in full to the holders of the Series H Preferred
Stock, payment shall be made to such holders ratably in accordance with the
number of shares held by them and, in case there shall then be more than one
series of the Preferred Stock outstanding at that time, ratably in accordance
with the respective distributive amount to which such holders shall be entitled.
I-10
<PAGE>
N. $8.00 Cumulative Convertible and Redeemable Voting Series N Preferred
Stock, $.01 par value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of this series of Preferred Shares
shall be "$8.00 Cumulative Convertible and Redeemable Voting Series N Preferred
Shares" (hereinafter referred to as the "Series N Preferred Shares").
(b) Dividends-The holders of the Series N Preferred Shares shall be
entitled to receive, when and as declared by the board of directors of the
Corporation, out of any assets of the Corporation available for dividends
pursuant to the laws of the State of Delaware, preferential dividends at the
rate of eight dollars ($8.00) per annum per share and no more. The dividends,
when payable, shall be paid quarterly on the first days of March, June,
September and December in each year, before any dividends shall be declared or
paid upon or set apart for the Common Shares or Series A Common Shares of the
Corporation for that quarter. Such dividends upon the Series N Preferred Shares
shall be cumulative from the date of issue thereof so that if dividends for any
past dividend period at the rate of eight dollars ($8.00) per annum shall not
have been paid thereon or declared and a sum sufficient for payment thereof set
apart, the deficiency shall be fully paid or set apart but without interest,
before any dividend shall be paid upon or set apart for the Common Shares or
Series A Common Shares; provided, however, that no dividends shall be declared
on the shares of any series of preferred stock for any dividend period unless
the full dividend for all prior dividend periods shall have been declared or
shall be declared at the same time upon all preferred stock outstanding during
such prior dividend periods, and further provided that no dividends shall be
declared on the shares of any series of preferred stock unless a dividend for
the same period shall be declared at the same time upon all preferred stock
outstanding during said period in like proportion to the dividend rate upon such
shares. Whenever the full dividend upon all the series of the preferred stock
for all past dividend periods shall have been paid and the full dividend thereon
for the then current dividend period shall have been paid or declared and a sum
sufficient for the payment thereof set apart, dividends upon the Common Shares
or Series A Common Shares may be declared by the board of directors out of the
remainder of the assets available therefor.
(c) Redemption-
(1) Unless such shares have been converted pursuant to
paragraph (f) hereof prior to the sixth anniversary of the date of
issue thereof, the Corporation shall, beginning with the seventh
anniversary of the date of issue thereof, and annually thereafter on
each subsequent anniversary of the date of issue thereof, redeem one-
fourteenth of the number of Series N Preferred Shares outstanding on
the sixth anniversary of the date of issue thereof, until all such
shares have been redeemed, and the holders thereof shall be entitled to
receive $100.00 per share plus an amount equal to all dividends accrued
and unpaid thereon to the redemption date.
(2) Notice of any redemption shall be mailed to each holder of
Series N Preferred Shares to be redeemed not less than thirty (30) days
prior to the date upon which such stock is to be redeemed. If on or
before the redemption date specified in such notice, the funds
necessary for such redemption shall have been set aside by the
Corporation so as to be available for payment on demand to the holders
of Series N Preferred Shares so called for redemption then,
notwithstanding that any certificate representing Series N Preferred
Shares so called for redemption shall not have been surrendered for
cancellation, the dividends thereon shall cease to accrue from and
after the date of such redemption so specified, and all rights with
respect to such Series N Preferred Shares so called for redemption,
including any right to vote or otherwise participate in the
determination of any proposed corporate action, shall forthwith after
such redemption date cease and terminate, except only the right of the
holder to receive the redemption price therefor, but without interest.
Series N Preferred Shares redeemed pursuant to the provisions hereof or
any such shares purchased or otherwise acquired shall not be reissued
but shall be canceled and proceedings shall be taken in the manner
prescribed by statute to reduce the number of outstanding Series N
Preferred Shares accordingly.
(d) Voting Rights-The holders of Series N Preferred Shares shall be
entitled to one vote for each share of such stock standing in the name of the
holder on the books of the Corporation and shall vote together with the holders
of the common stock and the holders of other series of the preferred stock of
the Corporation as one class.
(e) Preemptive Rights-No holder of any Series N Preferred Shares shall
have any preemptive right to subscribe for or acquire additional shares of the
Corporation of the same or any other class or series, whether such shares be
hereby or hereafter authorized; and no holder of Series N Preferred Shares shall
have any preemptive right to acquire any
I-11
<PAGE>
shares which may be held in the treasury of the Corporation; all such additional
or treasury shares may be sold for such consideration at such time and to such
person or persons as the board of directors may from time to time determine.
(f) Conversion-
(1) The Series N Preferred Shares shall be convertible into
the Corporation's Common Shares as hereinafter provided, and when and
as so converted, such Series N Preferred Shares shall be canceled and
retired and shall not be reissued as such. Commencing upon the issuance
and terminating at the close of business on the third anniversary
thereof, the Series N Preferred Shares may be converted, upon thirty
(30) days' written notice to the Corporation into Common Shares of the
Corporation at the rate of ten (10) Common Shares for each Series N
Preferred Share. Thereafter, until the close of business on the sixth
anniversary of the date of issue, the Series N Preferred Shares may be
converted, upon thirty (30) days' written notice to the Corporation,
into Common Shares of the Corporation at the rate of nine (9) Common
Shares for each Series N Preferred Share. On presentation and surrender
to the Corporation at its offices of the certificates representing
Series N Preferred Shares to be converted, the holder thereof shall be
entitled to receive in exchange therefor certificates for the fully
paid and non-assessable Common Shares of the Corporation at the rate
aforesaid, all under suitable regulations to be prescribed by the board
of directors of the Corporation. Conversion of Series N Preferred
Shares in the manner aforesaid shall not affect the right of the
converting holder thereof to receive dividends accrued but unpaid
thereon as of the dividend payment date immediately prior to
conversion.
(2) The number of Common Shares into which each Series N
Preferred Shares is convertible shall be subject to adjustment from
time to time as set forth in clauses (A) and (B) of this subparagraph
(2):
(A) In case the Corporation shall (i) pay a dividend
on its Common Shares in shares of the Corporation, (ii)
subdivide its outstanding Common Shares, (iii) combine the
outstanding Common Shares into a smaller number of shares or
(iv) issue by reclassification of its Common Shares (whether
pursuant to a merger or consolidation or otherwise) any shares
of the Corporation, then the holder of each Series N Preferred
Share shall be entitled to receive upon the conversion of such
share, the number of shares of the Corporation which he would
have owned or would have been entitled to receive after the
happening of any of the events described above had such share
been converted immediately prior to the happening of such
event. An adjustment made pursuant to this provision shall
become effective retroactively with respect to conversions
made subsequent to the record date in the case of a dividend,
and shall become effective on the effective date in the case
of a subdivision, combination or reclassification.
(B) No adjustment in the conversion rate shall be
required unless such adjustment would require an increase or
decrease in such rate of at least one-tenth (1/10) of a Common
Shares; provided, however, that any adjustments which by
reason of this clause (B) are not required to be made shall be
carried forward and taken into account by any subsequent
adjustment.
(3) The Corporation shall at all times reserve and keep
available out of its authorized Common Shares, solely for the purpose
of issuance upon conversion of Series N Preferred Shares as herein
provided, such number of Common Shares as shall then be issuable upon
the conversion of all outstanding Series N Preferred Shares.
(4) Fractional Common Shares shall not be issued upon
conversion of Series N Preferred Shares, nor shall cash adjustments be
made for fractional shares upon such conversion.
(5) For the purposes of this paragraph (f), the term "Common
Shares" shall mean (A) the class of stock designated as the Common
Shares of the Corporation at the date of this Restated Certificate of
Incorporation, or (B) any other class of stock resulting from
successive changes or reclassifications of such class consisting solely
of a change in par value, or a change from no par value to par value.
(g) Liquidation Rights-In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
the holders of the Series N Preferred Shares shall be entitled, before any
I-12
<PAGE>
assets of the Corporation shall be distributed among or paid over to the holders
of Common Shares or Series A Common Shares, to receive out of the assets of the
Corporation $100.00 per Series N Preferred Share. If upon any such dissolution,
liquidation or winding up, the assets of the Corporation available for payment
to stockholders are not sufficient to make payment in full to the holders of the
Series N Preferred Shares, payment shall be made to such holders ratably in
accordance with the number of shares held by them, and in case there shall then
be more than one series of the preferred stock outstanding at that time, ratably
in accordance with the respective distributive amount to which such holders
shall be entitled.
O. $9.00 Cumulative Convertible and Redeemable Voting Series O Preferred
Shares, $.01 par value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of this series of Preferred Shares
shall be "$9.00 Cumulative Convertible and Redeemable Voting Series O Preferred
Shares" (hereinafter referred to as the "Series O Preferred Shares").
(b) Dividends-The holders of the Series O Preferred Shares shall be
entitled to receive, when and as declared by the board of directors of the
Corporation, out of any assets of the Corporation available for dividends
pursuant to the laws of the State of Delaware, preferential dividends at the
rate of nine dollars ($9.00) per annum per share and no more. The dividends,
when payable, shall be paid quarterly on the first days of March, June,
September and December in each year (prorated if the period such stock is
outstanding prior to the first quarterly dividend date is less than a calendar
quarter), before any dividends shall be declared or paid upon or set apart for
the Common Shares or Series A Common Shares of the Corporation for that quarter.
Such dividends upon the Series O Preferred Shares shall be cumulative from the
date of issue thereof so that if dividends for any past dividend period at the
rate of nine dollars ($9.00) per annum per share shall not have been paid
thereon or declared and a sum sufficient for payment thereof set apart, the
deficiency shall be fully paid or set apart but without interest, before any
dividend shall be paid upon or set apart for the Common Shares or Series A
Common Shares; provided, however, that no dividends shall be declared on the
shares of any series of preferred stock for any dividend period unless the full
dividend for all prior dividend periods shall have been declared or shall be
declared at the same time upon all preferred stock outstanding during such prior
dividend periods, and further provided that no dividends shall be declared on
the shares of any series of preferred stock unless a dividend for the same
period shall be declared at the same time upon all preferred stock outstanding
during said period in like proportion to the dividend rate upon such shares.
Whenever the full dividend upon all series of preferred stock for all past
dividend periods shall have been paid and the full dividend thereon for the then
current dividend period shall have been paid or declared and a sum sufficient
for the payment thereof set apart, dividends upon the Common Shares or Series A
Common Shares may be declared by the board of directors out of the remainder of
the assets available therefor.
(c) Redemption-
(1) Unless such shares have been converted pursuant to
paragraph (f) hereof prior to January 1, 1990, the Corporation may, at
its option from time to time and in such amounts as it may determine,
redeem the Series O Preferred Shares for $100.00 per share plus an
amount equal to all dividends accrued and unpaid thereon to the
redemption date.
(2) Unless such shares have been converted pursuant to
paragraph (f) hereof prior to January 1, 1990, the holder of Series O
Preferred Shares may, at the holder's option, during the period
commencing January 1, 1990 and ending December 31, 1999, elect to have
redeemed in any one year as much as one-third (1/3) of the number of
Series O Preferred Shares held by such person on January 1, 1990.
(3) Notice of an election under either of the redemption
provisions in subparagraphs (c)(1) and (c)(2) above shall be mailed (A)
in case of a redemption at the election of the Corporation to each
holder of Series O Preferred Shares to be redeemed or (B) in the case
of a redemption at the election of the holder of Series O Preferred
Shares to the Corporation not less than thirty (30) days prior to the
date upon which such stock is to be redeemed. In case less than all of
the outstanding Series O Preferred Shares are to be redeemed by the
Corporation, the amount to be redeemed and the method of effecting such
redemption, whether by lot or pro rata or otherwise, may be determined
by the Board of Directors. If on or before the redemption date
specified in such notice, the funds necessary for such redemption shall
have been set aside by the Corporation so as to be available for
payment on demand to the holders of the Series O Preferred Shares so
called for or requesting redemption, then, notwithstanding that any
certificate representing Series O Preferred Shares so called for or
requesting redemption
I-13
<PAGE>
shall not have been surrendered for cancellation, the dividends thereon
shall cease to accrue from and after the date of such redemption so
specified, and all rights with respect to such Series O Preferred
Shares so called for or requesting redemption, including any right to
vote or otherwise participate in the determination of any proposed
corporate action, shall forthwith after such redemption date cease and
terminate, except only the right of the holder to receive the
redemption price therefor, but without interest. Series O Preferred
Shares redeemed pursuant to the provisions hereof or any such shares
purchased or otherwise acquired shall not be reissued but shall be
canceled and proceedings shall be taken in the manner prescribed by
statute to reduce the number of outstanding Series O Preferred Shares
accordingly.
(d) Voting Rights-
(1) For all purposes, the holders of Series O Preferred Shares
shall be entitled to one vote for each share of such stock standing in
the name of the holder on the books of the Corporation.
(2) Subject to the rights, if any, of the holders of one or
more series of Preferred Shares, voting as a class, to elect one or
more directors, in the election of directors, the holders of Series O
Preferred Shares shall vote together as one class with the Series A
Common Shares. The total number of directors of the Corporation shall
be determined without regard to any director(s) whom the holders of one
or more series of Preferred Shares, voting as a class, have elected or
have the right to elect. In the event the number of issued and
outstanding Series A Common Shares at any time falls below 500,000,
then with respect to the election of directors at the next annual
meeting thereafter the holders of Common Shares, Series A Common Shares
and Preferred Shares shall be entitled to elect all of the directors of
the Corporation.
(e) Preemptive Rights-No holder of any Series O Preferred Shares shall
have any preemptive right to subscribe for or acquire additional shares of the
Corporation of the same or any other class or series, whether such shares be
hereby or hereafter authorized; and no holder of Series O Preferred Shares shall
have any preemptive right to acquire any shares which may be held in the
treasury of the Corporation; all such additional or treasury shares may be sold
for such consideration at such time and to such person or persons as the board
of directors may from time to time determine.
(f) Conversion-
(1) (A) The Series O Preferred Shares shall be convertible
into the Corporation's Common Shares as hereinafter provided,
and when and as so converted, such Series O Preferred Shares
shall be canceled and retired and shall not be reissued as
such. Commencing upon issuance and terminating at the close of
business on December 31, 1988, the Series O Preferred Shares
may be converted, upon sixty (60) days' written notice to the
Corporation, into Common Shares of the Corporation at the rate
of nine (9) Common Shares for each Series O Preferred Share.
Thereafter, until the close of business on December 31, 1989,
the Series O Preferred Shares may be converted, upon sixty
(60) days' written notice to the Corporation, into Common
Shares of the Corporation at the rate of eight (8) Common
Shares for each Series O Preferred Share. On presentation and
surrender to the Corporation at its offices of the
certificates representing the Series O Preferred Shares to be
converted, the holder thereof shall be entitled to receive in
exchange therefor certificates for fully paid and
non-assessable Common Shares of the Corporation at the rate
aforesaid, all under suitable regulations to be prescribed by
the board of directors of the Corporation. Conversion of
Series O Preferred Shares in the manner aforesaid shall not
affect the right of the converting holder thereof to receive
dividends accrued but unpaid thereon as of the dividend
payment date immediately prior to conversion.
(B) Notwithstanding the provisions of clause (A)
above, if the Market Value (as defined below) of a Common
Share does not exceed $12.875 per share on each of five
consecutive trading days for at least two periods of five days
each from the date of issuance to December 31, 1987, then the
Corporation will deliver additional Common Shares to qualified
shareholders, in an amount equal to the Price Differential (as
defined below). The payment of additional Common Shares is
limited to those shareholders electing to receive stock in
connection with the acquisition of Chatham Telephone Company
and others who receive such stock from such shareholders
through inheritance or gift, and who complete the conversion
of their Series O Preferred Shares, as provided herein, prior
to August 1, 1988, and is
I-14
<PAGE>
further limited to those Common Shares owned by the
shareholder on August 1, 1988 which were (i) issued in the
original distribution of Series O Preferred Shares, or (ii)
acquired pursuant to a conversion of Series O Preferred Shares
(the "Qualified Shares"). For purposes of calculating the
number of additional Common Shares to be issued, the value of
each additional Common Share being issued shall be the highest
average Market Value for two periods of five consecutive
trading days from the date of issuance through December 31,
1987. This value is referred to hereinafter as the "Additional
Share Value." The number of additional Common Shares to be
issued shall be determined by dividing the Price Differential
by the Additional Share Value. No fractional shares will be
issued in connection with the payment of additional shares. An
equivalent amount of cash for such fractional shares shall be
distributed based upon the Additional Share Value.
For purposes hereof:
1. "Market Value" means the high sales price of
a Common Share, as reported in the Wall
Street Journal.
2. "Price Differential" means the difference
between the highest average Market Value for
five (5) consecutive trading days during the
period from the date of issuance through
December 31, 1987, and $12.875, multiplied
by the number of Qualified Shares.
(2) The number of Common Shares into which each Series O
Preferred Share is convertible shall be subject to adjustment from time
to time as set forth in clauses (A) and (B) of this subparagraph (2):
(A) In case the Corporation shall (i) pay a dividend
on its Common Shares in shares of the Corporation, (ii)
subdivide its outstanding Common Shares, (iii) combine the
outstanding Common Shares into a smaller number of shares or
(iv) issue by reclassification of its Common Shares (whether
pursuant to a merger or consolidation or otherwise) any shares
of the Corporation, then the holder of each Series O Preferred
Share shall be entitled to receive upon the conversion of such
share, the number of shares of the Corporation which the
holder would have owned or would have been entitled to receive
after the happening of any of the events described above had
such share been converted immediately prior to the happening
of such event. An adjustment made pursuant to this provision
shall become effective retroactively with respect to
conversions made subsequent to the record date in the case of
a dividend, and shall become effective on the effective date
in the case of a subdivision, combination or reclassification.
(B) No adjustment in the conversion rate shall be
required unless such adjustment would require an increase or
decrease in such rate of at least one-tenth (1/10) of a Common
Share; provided, however, that any adjustments which by reason
of this clause (B) are not required to be made shall be
carried forward and taken into account by any subsequent
adjustment.
(3) The Corporation shall at all times reserve and keep
available out of its authorized Common Shares, solely for the purpose
of issuance upon conversion of Series O Preferred Shares as herein
provided, such number of Common Shares as shall then be issuable upon
the conversion of all outstanding Series O Preferred Shares.
(4) Fractional Common Shares shall not be issued upon
conversion of Series O Preferred Shares, nor shall cash adjustments be
made for fractional shares upon such conversion.
(5) For the purposes of this paragraph (f), the term "Common
Shares" shall mean (A) the class of stock designated as the Common
Shares of the Corporation at the date of this Restated Certificate of
Incorporation, or (B) any other class of stock resulting from
successive changes or reclassifications of such class consisting solely
of a change in par value, or a change from no par value to par value.
I-15
<PAGE>
(g) Liquidation Rights-In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
the holders of the Series O Preferred Shares shall be entitled, before any
assets of the Corporation shall be distributed among or paid over to the holders
of Common Shares or Series A Common Shares, to receive out of the assets of the
Corporation $100.00 per Series O Preferred Share. If upon any such dissolution,
liquidation or winding up, the assets of the Corporation available for payment
to shareholders are not sufficient to make payment in full to the holders of the
Series O Preferred Shares, payment shall be made to such holders ratably in
accordance with the number of shares held by them and, in case there shall then
be more than one series of preferred stock outstanding at that time, ratably in
accordance with the respective distributive amount to which such holders shall
be entitled.
S. $10.50/$7.00 Cumulative and Convertible Voting Series S Preferred
Shares, $.01 par value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of this series of Preferred Shares
shall be "$10.50/$7.00 Cumulative and Convertible Voting Series S Preferred
Shares" (hereinafter referred to as the "Series S Preferred Shares").
(b) Dividends-The rate of dividend payable upon Series S Preferred
Shares shall be ten and 50/100 dollars ($10.50) per share per annum during the
first year after issuance and seven and no/100 dollars ($7.00) per share per
annum thereafter.
(c) Voting Rights-
(1) With respect to all matters, each holder of Series S
Preferred Shares shall be entitled to one vote for each share of such
stock standing in the name of the holder on the books of the
Corporation.
(2) With respect to the election of directors, the holders of
Series S Preferred Shares shall have class voting rights (voting
together with the holders of (A) other Preferred Shares that are
entitled to vote thereon and that were issued after October 31, 1981,
and (B) Series A Common Shares) to the extent provided in Article IV of
the Restated Certificate of Incorporation of the Corporation.
(d) Conversion-
(1) The Series S Preferred Shares shall be convertible into
the Corporation's Common Shares as hereinafter provided, and when and
as so converted, such Series S Preferred Shares shall be canceled and
retired and shall not be reissued as such. Commencing upon issuance and
terminating four (4) years thereafter, the Series S Preferred Shares
may be converted, upon written notice to the Corporation, into Common
Shares of the Corporation at the rate of four (4) Common Shares for
each Series S Preferred Share. On presentation and surrender to the
Corporation at its offices of the certificate representing the Series S
Preferred Shares to be converted, the holder thereof shall be entitled
to receive in exchange therefor certificates for the fully paid and
non-assessable Common Shares of the Corporation at the rate aforesaid,
all under suitable regulations to be prescribed by the board of
directors of the Corporation. Conversion of Series S Preferred Shares
in the manner aforesaid shall not affect the right of the converting
holder thereof to receive dividends accrued but unpaid thereon as of
the dividend payment date immediately prior to conversion.
(2) The number of Common Shares into which each Series S
Preferred Share is convertible shall be subject to adjustment from time
to time as set forth in clauses (A) and (B) of this subparagraph (2):
(A) In case the Corporation shall (i) pay a dividend
on its Common Shares in shares of the Corporation (ii)
subdivide its outstanding Common Shares, (iii) combine the
outstanding Common Shares into a smaller number of shares or
(iv) issue by reclassification of its Common Shares (whether
pursuant to a merger or consolidation or otherwise) any shares
of the Corporation, then the holder of each Series S Preferred
Share shall be entitled to receive upon the conversion of such
share, the number of shares of the Corporation which he would
have owned or would have been entitled to receive after the
happening of any of the events described above had such share
been converted immediately prior to the happening of such
event. An adjustment made pursuant to this provision shall
become effective retroactively with
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<PAGE>
respect to conversions made subsequently to the record date in
the case of a dividend, and shall become effective on the
effective date in the case of a subdivision, combination or
reclassification.
(B) No adjustment in the conversion rate shall be
required unless such adjustment would require an increase or
decrease in such rate of at least one-tenth (1/10) of a Common
Share; provided, however, that any adjustments which by reason
of this clause (B) are not required to be made shall be
carried forward and taken into account by any subsequent
adjustment.
(3) The Corporation shall at all times reserve and keep
available out of its authorized Common Shares, solely for the purpose
of issuance upon conversion of Series S Preferred Shares as herein
provided, such number of Common Shares as shall then be issuable upon
the conversion of all outstanding Series S Preferred Shares.
(4) Fractional Common Shares shall not be issued upon
conversion of Series S Preferred Shares, nor shall cash adjustments be
made for fractional shares upon such conversion.
(5) For the purposes of this paragraph (d), the term "Common
Shares" shall mean (A) the class of stock designated as the Common
Shares of the Corporation at the date of this Restated Certificate of
Incorporation, or (B) any other class of stock resulting from
successive changes or reclassifications of such class consisting solely
of a change in par value, or a change from no par value to par value.
(e) Liquidation-The amount payable upon each Series S Preferred Share
in the event of either voluntary or involuntary liquidation shall be $100.00,
plus a sum equal to the amount of all accumulated and unpaid dividends thereon.
U. $8.50 Cumulative, Non-Convertible, Redeemable and Voting Series U
Preferred Shares, $.01 par value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of this series of Preferred Shares
shall be "$8.50 Cumulative, Non-Convertible, Redeemable and Voting Series U
Preferred Shares" (hereinafter referred to as "Series U Preferred Shares").
(b) Dividends-The rate of dividend payable upon Series U Preferred
Shares shall be eight and 50/100 dollars ($8.50) per share per annum. Such
dividends shall be cumulative from and commence to accrue on the date of
issuance.
(c) Redemption-
(1) After the fifth anniversary of the date of issuance, the
Corporation may, at its option, redeem annually up to twenty percent
(20%) of the Series U Preferred Shares outstanding on such fifth
anniversary for $100.00 per share. After the tenth anniversary of their
issuance, the Corporation may at any time redeem, in whole or in part,
the then outstanding Series U Preferred Shares for $100.00 per share.
In addition to the redemption price, the following shall be paid:
(A) any accrued and unpaid dividends with respect to
each Series U Preferred Share redeemed, and
(B) an amount equal to $2.125 for each Series U
Preferred Share redeemed multiplied by the number of days
between the date fixed for redemption and the March 1, June 1,
September 1, or December 1 immediately preceding the date
fixed for redemption and divided by 90.
(2) Notice of an election under the redemption provision in
subparagraph (c)(1) above shall be delivered to each holder of Series U
Preferred Shares to be redeemed at the address appearing on the records
of the Corporation not less than thirty (30) days prior to the date
upon which such stock is to be redeemed. If on or before the redemption
date specified in such notice, the funds necessary for such redemption
shall have been set aside by the Corporation so as to be available for
payment on demand to the holder of the Series U Preferred Shares so
called for redemption, then, notwithstanding that any certificate
representing Series U Preferred Shares so called
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<PAGE>
for redemption shall not have been surrendered for cancellation, the
dividends thereon shall cease to accrue from and after the date of such
redemption so specified, and all rights with respect to such Series U
Preferred Shares so called for redemption, including any right to vote
or otherwise participate in the determination of any proposed corporate
action, shall terminate at the close of business on such redemption
date, except only the right of the holder to receive the redemption
price therefor, but without interest. The Series U Preferred Shares
purchased or otherwise acquired shall not be reissued but shall be
canceled and proceedings shall be taken in the manner prescribed by
statute to reduce the number of Preferred Shares which the Corporation
is authorized to issue by the number of shares canceled.
(d) Voting Rights-
(1) With respect to all matters, each holder of Series U
Preferred Shares shall be entitled to one vote for each share of such
stock standing in the name of the holder on the books of the
Corporation.
(2) With respect to the election of directors, the holders of
Series U Preferred Shares shall have class voting rights (voting
together with the holders of (A) other Preferred Shares that are
entitled to vote thereon and that were issued after October 31, 1981,
and (B) Series A Common Shares) to the extent provided in Article IV of
the Restated Certificate of Incorporation of the Corporation.
(e) Conversion-The Series U Preferred Shares shall not be convertible.
(f) Liquidation-The amount payable upon each Series U Preferred Share
in the event of either voluntary or involuntary liquidation shall be $100.00,
plus a sum equal to the amount of all accumulated and unpaid dividends thereon.
BB. $9.00 Cumulative and Convertible Voting Series BB Preferred Shares,
$.01 par value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of this series of Preferred Shares
shall be $9.00 Cumulative, Convertible and Redeemable Voting Series BB Preferred
Shares" (hereinafter referred to as the "Series BB Preferred Shares").
(b) Dividends-The rate of dividend payable upon Series BB Preferred
Shares shall be nine and no/100 dollars ($9.00) per share per annum.
(c) Redemption-
(1) Unless the Series BB Preferred Shares have been converted,
or written notice to convert has been received prior to the expiration
of the conversion period set forth in paragraph (e) hereof, then
commencing with the tenth anniversary of the issuance of the Series BB
Preferred Shares and ending ten years thereafter, the Corporation may,
at its sole option, at any time thereafter, redeem up to two thousand
(2,000) shares per annum of the then outstanding Series BB Preferred
Shares for $100.00 per share, plus an amount equal to all dividends
accrued and unpaid thereon on the redemption date.
(2) Notice of an election under the redemption provision in
subparagraph (c)(1) above shall be delivered to the Corporation not
less than thirty (30) days prior to the date upon which such stock is
to be redeemed. If on or before the redemption date specified in such
notice, the funds necessary for such redemption shall have been set
aside by the Corporation so as to be available for payment on demand to
the holder of Series BB Preferred Shares so offered for redemption,
then, notwithstanding that any certificate representing Series BB
Preferred Shares so offered for redemption shall have not been so
surrendered for cancellation, the dividends thereon shall cease to
accrue from and after the date of such redemption so specified, and all
rights with respect to such Series BB Preferred Shares so offered for
redemption, including any right to vote or otherwise participate in the
determination of any proposed corporate action, shall forthwith after
such redemption date shall cease and terminate, except only the right
of the holder to receive the redemption price therefor, but without
interest.
I-18
<PAGE>
(d) Voting Rights-
(1) With respect to all matters, each holder of Series BB
Preferred Shares shall be entitled to one vote for each share of such
stock standing in the name of the holder on the books of the
Corporation.
(2) With respect to the election of directors, the holders of
Series BB Preferred Shares shall have class voting rights (voting
together with the holders of (A) other Preferred Shares that are
entitled to vote thereon and that were issued after October 31, 1981,
and (B) Series A Common Shares) to the extent provided in Article IV of
the Restated Certificate of Incorporation of the Corporation.
(e) Conversion-
(1) The Series BB Preferred Shares shall be convertible into
the Corporation's Common Shares as hereinafter provided. Commencing
upon issuance and terminating ten (10) years thereafter, the Series BB
Preferred Shares may be converted, upon written notice to the
Corporation, into Common Shares of the Corporation at the rate of six
(6) Common Shares for each Series BB Preferred Share. On presentation
and surrender to the Corporation at its offices of the certificate
representing the Series BB Preferred Shares to be converted, the holder
thereof shall be entitled to receive in exchange therefor certificates
for the fully paid and non-assessable Common Shares of the Corporation
at the rate aforesaid, all under suitable regulations to be prescribed
by the board of directors of the Corporation. Conversion of Series BB
Preferred Shares in the manner aforesaid shall not affect the right of
the converting holder thereof to receive dividends accrued but unpaid
thereon as of the dividend payment date immediately prior to
conversion.
(2) The number of Common Shares into which each Series BB
Preferred Share is convertible shall be subject to adjustment from time
to time as set forth in clauses (A) and (B) of this subparagraph (2):
(A) In case the Corporation shall (i) pay a dividend
on its Common Shares in shares of the Corporation (ii)
subdivide its outstanding Common Shares, (iii) combine the
outstanding Common Shares into a smaller number of shares, or
(iv) issue by reclassification of its Common Shares (whether
pursuant to a merger or consolidation or otherwise) any shares
of the Corporation, then the holder of each Series BB
Preferred Share shall be entitled to receive upon the
conversion of such share, the number of shares of the
Corporation which he would have owned or would have been
entitled to receive after the happening of any of the events
described above had such share been converted immediately
prior to the happening of such event. An adjustment made
pursuant to this provision shall become effective
retroactively with respect to conversions made subsequent to
the record date in the case of a dividend, and shall become
effective on the effective date in the case of a subdivision,
combination or reclassification.
(B) No adjustment in the conversion rate shall be
required unless such adjustment would require an increase or
decrease in such rate of at least one-tenth (1/10) of a Common
Share; provided, however, that any adjustments which by reason
of this clause (B) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment.
(3) The Corporation shall at all times reserve and keep
available out of its authorized Common Shares, solely for the purpose
of issuance upon conversion of Series BB Preferred Shares as herein
provided, such number of Common Shares as shall then be issuable upon
the conversion of all outstanding Series BB Preferred Shares.
(4) Fractional Common Shares shall not be issued upon
conversion of Series BB Preferred Shares, nor shall cash adjustments be
made for fractional shares upon such conversion.
(5) For the purposes of this paragraph (e), the term "Common
Shares" shall mean (A) the class of stock designated as the Common
Shares of the Corporation at the date of this Restated Certificate of
Incorporation, or (B) any other class of stock resulting from
successive changes or reclassifications of such class consisting solely
of a change in par value, or a change from no par value to par value.
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<PAGE>
(f) Liquidation-The amount payable upon each Series BB Preferred Share
in the event of either voluntary or involuntary liquidation shall be $100.00,
plus a sum equal to the amount of all accumulated and unpaid dividends thereon.
DD. $7.00 Cumulative, Convertible and Redeemable Voting Series DD
Preferred Shares, $.01 par value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of this series of Preferred Shares
shall be $7.00 Cumulative, Convertible and Redeemable Voting Series DD Preferred
Shares (hereinafter referred to as the "Series DD Preferred Shares").
(b) Dividends-The rate of dividend payable upon Series DD Preferred
Shares shall be seven and no/100 dollars ($7.00) per share per annum.
(c) Convertibility-Commencing upon issuance and terminating on the day
before the fifteenth anniversary thereof, the Series DD Preferred Shares shall
be convertible, at the election of the holder of Series DD Preferred Shares and
upon surrender to the Corporation of the certificate or certificates
representing the shares to be converted, into fully paid and non-assessable TDS
Common Shares, $1.00 par value (hereinafter referred to as the "Common Shares"),
at the rate of five and one-quarter (5.25) Common Shares for each Series DD
Preferred Share. Certificates representing any Series DD Preferred Shares
surrendered for conversion shall be delivered to the Corporation duly endorsed,
or accompanied by proper instruments of transfer, to the Corporation or in
blank, together with a written notice to the Corporation of the holder's
election to make the conversion and of the name or names in which the
certificate or certificates for Common Shares shall be issued. The Corporation
shall pay all documentary, stamp, and similar taxes that may be payable in
respect of the issue or delivery of Common Shares upon conversion of any Series
DD Preferred Shares. The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Common Shares the full number of Common Shares that would be deliverable upon
the conversion of Series DD Preferred Shares then outstanding.
If at any time the Corporation elects to redeem part or all of the
outstanding Series DD Preferred Shares (pursuant to paragraph (e) of this
Statement of Designation, Preferences and Rights), the holders of the Series DD
Preferred Shares that the Corporation elects to redeem shall be entitled to
convert those shares to Common Shares by delivering to the Corporation, not less
than ten (10) days before the redemption date specified in the Corporation's
notice of redemption, a written notice of the holder's election to convert part
or all of his Series DD Preferred Shares to Common Shares, together with the
certificate or certificates representing the Series DD Preferred Shares to be
converted duly endorsed (or accompanied by proper instruments of transfer) to
the Corporation or in blank.
The number of Common Shares into which each Series DD Preferred Share
is convertible shall be subject to adjustment from time to time as set forth
below:
In case the Corporation shall (1) pay a dividend on its Common Shares
(in shares of the Corporation), (2) subdivide its outstanding Common Shares, (3)
combine the outstanding Common Shares into a smaller number of shares or (4)
issue by reclassification of its Common Shares (whether pursuant to a merger or
consolidation or otherwise) any shares of the Corporation, then the holder of
each Series DD Preferred Share shall be entitled to receive upon the conversion
of such share, the number of shares of the Corporation which he or she would
have owned or would have been entitled to receive after the happening of any of
the events described above had such share been converted immediately prior to
the happening of such event. An adjustment made pursuant to this provision shall
become effective retroactively with respect to conversions made subsequent to
the record date in the case of a dividend, and shall become effective on the
effective date in the case of a subdivision, combination or reclassification.
Fractional Common Shares shall not be issued upon conversion of Series DD
Preferred Shares, nor shall cash adjustments be made for fractional shares upon
such conversion.
(d) Liquidation Value-Each Series DD Preferred Share shall have a
liquidation value of $100.00.
(e) Redeemability-The Series DD Preferred Shares shall be redeemable
upon the second anniversary of their issuance, and on each anniversary
thereafter through the sixth such anniversary, at the election of the holder of
Series DD Preferred Shares, which election shall be made not less than ten (10)
days before each such anniversary. The Corporation shall redeem on a pro-rata
basis for each holder, up to twenty percent (20%) of the number of Series DD
Preferred Shares
I-20
<PAGE>
issued and outstanding on each anniversary of their issuance without premium,
upon payment to the holder of Series DD Preferred Shares to be redeemed of
$100.00 per share plus
(1) any accrued and unpaid dividends with respect to each
Series DD Preferred Share redeemed, and
(2) an amount equal to $1.75 for each Series DD Preferred
Share redeemed multiplied by the number of days between the date fixed
for redemption and the March 1, June 1, September 1, or December 1
immediately preceding the date fixed for redemption and divided by 90.
The right of redemption provided in the preceding sentence shall not be
cumulative. In the event that a holder of Series DD Preferred Shares fails to
exercise its right of redemption during any year, such right of redemption with
respect to the Series DD Preferred Shares eligible for redemption during such
year shall lapse. A holder of Series DD Preferred Shares shall exercise its
right of redemption by mailing to the Corporation written notice of its election
to redeem Series DD Preferred Shares, together with a certificate or
certificates representing the Series DD Preferred Shares to be redeemed, duly
endorsed or accompanied by proper instruments of transfer. The foregoing right
of redemption may only be exercised if the price of the Common Shares at the
time the holder of Series DD Preferred Shares gives notice of his or her desire
to have Series DD Preferred Shares redeemed is below $19.00 per share (or such
equivalent price as may exist as a result of any stock split, stock dividend,
reclassification or similar event).
After the fifteenth anniversary of their issuance, the Series DD
Preferred Shares outstanding may be redeemed at the election of the Corporation
from time to time in whole or in part, without premium, upon payment to the
holder of Series DD Preferred Shares to be redeemed of $100 per share plus
(1) any accrued and unpaid dividends with respect to each
Series DD Preferred Share redeemed, and
(2) an amount equal to $1.75 for each Series DD Preferred
Share redeemed multiplied by the number of days between the date fixed
for redemption and the March 1, June 1, September 1, or December 1
immediately preceding the date fixed for redemption and divided by 90.
Notice of any redemption shall be mailed to each holder of Series DD Preferred
Shares to be redeemed not less than thirty (30) days prior to the date upon
which such stock is to be redeemed. If on or before the redemption date
specified in such notice, the funds necessary for such redemption shall have
been set aside by the Corporation so as to be available for payment on demand to
the holders of Series DD Preferred Shares so called for redemption then,
notwithstanding that any certificate representing Series DD Preferred Shares so
called for redemption shall not have been surrendered for cancellation, the
dividends thereon shall cease to accrue from and after the date of such
redemption so specified, and all rights with respect to such Series DD Preferred
Shares so called for redemption, including any right to vote or otherwise
participate in the determination of any proposed corporate action, shall
forthwith after such redemption date cease and terminate, except only the right
of the holder to receive the redemption price therefor, but without interest.
(f) Voting Rights-With respect to all matters, each holder of Series DD
Preferred Shares shall be entitled to one vote for each share of such stock
standing in the name of the holder on the books of the Corporation. With respect
to the election of directors, the holders of Series DD Preferred Shares shall
have class voting rights (voting together with the holders of (1) other
Preferred Shares that are entitled to vote thereon and that were issued after
October 31, 1981, and (2) Series A Common Shares) to the extent provided in
Article IV of the Restated Certificate of Incorporation of the Corporation.
(g) Liquidation Preference-For purposes of Article IV of this Restated
Certificate of Incorporation, the "fixed amount payable" for the Series DD
Preferred Shares shall be $100.00 per share.
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<PAGE>
EE. $6.00 Cumulative, Convertible, Redeemable and Voting Series EE
Preferred Shares, $.01 par value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of this series of Preferred Shares
shall be "$6.00 Cumulative, Convertible, Redeemable and Voting Series EE
Preferred Shares" (hereinafter referred to as the "Series EE Preferred Shares").
(b) Dividends-The rate of dividend payable upon Series EE Preferred
Shares shall be six and no/100 dollars ($6.00) per share per annum. Such
dividends shall be cumulative from and commence to accrue on the date of
issuance.
(c) Redemption-
(1) After the twentieth anniversary of the date of issuance,
the Corporation may, at its option, at any time redeem all or a portion
of the then outstanding Series EE Preferred Shares for $100.00 per
share, plus an amount equal to all accumulated and unpaid dividends
thereon.
(2) Notice of an election under the redemption provision in
subparagraph (c)(1) above shall be delivered to each holder of Series
EE Preferred Shares to be redeemed at the address appearing on the
records of the Corporation not less than thirty (30) days prior to the
date upon which such stock is to be redeemed. If, on the redemption
date specified in such notice, the funds necessary for such redemption
shall have been set aside by the Corporation so as to be available for
payment on demand to the holder of Series EE Preferred Shares so called
for redemption, then notwithstanding that any certificate representing
Series EE Preferred Shares so called for redemption shall not have been
surrendered for cancellation, the dividends thereon shall cease to
accrue from and after the date of such redemption so specified, and all
rights with respect to such Series EE Preferred Shares so called for
redemption, including any right to vote or otherwise participate in the
determination of any proposed corporate action, shall terminate at the
close of business on such redemption date, except only the right of the
holder to receive the redemption price therefor, but without interest.
(d) Voting Rights-
(1) With respect to all matters, each holder of Series EE
Preferred Shares shall be entitled to one vote for each share of such
stock standing in the name of the holder on the books of the
Corporation.
(2) With respect to the election of directors, the holders of
Series EE Preferred Shares shall have class voting rights (voting
together with the holders of (A) other Preferred Shares that are
entitled to vote thereon and that were issued after October 31, 1981,
and (B) Series A Common Shares) to the extent provided in Article IV of
the Restated Certificate of Incorporation of the Corporation.
(e) Conversion-
(1) Commencing upon issuance and terminating at the close of
business on the day before the tenth anniversary of the date of
issuance, each outstanding Series EE Preferred Share may be converted,
upon fifteen (15) days' written notice into four and one-half (4.5)
Common Shares. On presentation and surrender to the Corporation at its
offices of the certificate representing the Series EE Preferred Shares
to be converted, the holder thereof shall be entitled to receive in
exchange therefor certificates for the fully paid and non-assessable
Common Shares of the Corporation at the rate aforesaid, all under
suitable regulations to be prescribed by the board of directors of the
Corporation. Conversion of Series EE Preferred Shares in the manner
aforesaid shall not affect the right of the converting holder thereof
to receive dividends accrued but unpaid thereon as of the dividend
payment date immediately prior to conversion.
(2) The number of Common Shares into which each Series EE
Preferred Share is convertible shall be subject to adjustment from time
to time. In the event the Corporation shall (A) pay a dividend on its
Common Shares (in Common Shares of the Corporation) of more than 20% of
the number of outstanding Common Shares, (B) subdivide its outstanding
Common Shares, (C) combine the outstanding Common Shares into a smaller
number of shares or (D) issue by reclassification of its Common Shares
(whether pursuant to a merger or consolidation or otherwise) any shares
of the Corporation, then the holder of each Series EE Preferred Share
shall be entitled to
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<PAGE>
receive, upon the conversion of such share, the number of shares of the
Corporation which he would have owned or would have been entitled to
receive after the happening of any of the events described above had
such share been converted immediately prior to the happening of such
event. An adjustment made pursuant to this provision shall become
effective retroactively with respect to conversions made after the
record date in the case of a dividend, and shall become effective on
the effective date in the case of a subdivision, combination or
reclassification.
(3) The Corporation shall at all times reserve and keep
available out of its authorized Common Shares, solely for the purpose
of issuance upon conversion of Series EE Preferred Shares as herein
provided, such number of Common Shares as shall then be issuable upon
the conversion of all outstanding Series EE Preferred Shares.
(4) Fractional Common Shares shall not be issued upon
conversion of Series EE Preferred Shares, nor shall cash adjustments be
made for fractional shares upon such conversion.
(5) For the purposes of this paragraph (e), the term "Common
Shares" shall mean (A) the class of stock designated as the Common
Shares of the Corporation on the date this Restated Certificate of
Incorporation is filed with the Delaware Secretary of State, or (B) any
other class of stock resulting from successive changes or
reclassifications of such class consisting solely of a change in par
value, or a change from no par value.
(f) Liquidation-The amount payable upon each Series EE Preferred Share
in the event of either voluntary or involuntary liquidation shall be $100.00,
plus a sum equal to the amount of all accumulated and unpaid dividends thereon.
GG. $5.00 Cumulative Convertible and Redeemable Voting Series GG Preferred
Shares, $.01 par value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of this series of Preferred Shares
shall be "$5.00 Cumulative Convertible and Redeemable Voting Series GG Preferred
Shares" (hereinafter referred to as the "Series GG Preferred Shares").
(b) Dividends-Each holder of a share of Series GG Preferred Shares
shall be entitled to receive, when, as and if declared by the board of directs
of the Corporation, out of funds of the Corporation legally available therefor,
cumulative dividends during each fiscal quarter that such Series GG Preferred
Shares is outstanding at a per annum dividend rate of five dollars ($5.00) per
share. Such dividends shall be cumulative from and commence to accrue on the
date of original issuance of such Series GG Preferred Shares (the "Issue Date").
(c) Redemption-
(1) Unless the Series GG Preferred Shares have been converted
or the Corporation shall have received prior to the tenth anniversary
of the Issue Date written notice of election to convert in accordance
with paragraph (e) hereof, on or after the tenth anniversary of the
Issue Date, the Series GG Preferred Shares shall be redeemable, in
whole or in part from time-to-time, at the option of the Corporation,
upon giving notice as provided in subparagraph (c)(2) hereof, at a
redemption price (the "Redemption Price") equal to the product of the
number of Series GG Preferred Shares called for redemption times the
sum of (A) $100.00 per Series GG Preferred Share plus (B) all dividends
accrued and unpaid thereon through the date set for redemption (the
"Redemption Date"); provided, however, that prior to the twelfth
anniversary of the Issue Date the Corporation shall have redeemed all
the Series GG Preferred Shares outstanding. The Redemption Price
payable on any Redemption Date shall be payable, at the option of
Corporation, (x) in cash (by certified check) or (y) by the issuance of
Common Shares of the Corporation to the record holder of such Series GG
Preferred Shares being redeemed. In the event that the Corporation
elects to pay the Redemption Price by issuing its Common Shares, the
number of Common Shares to be issued shall be calculated based upon the
closing price on the American Stock Exchange (or, if the Corporation's
Common Shares are not listed on the American Stock Exchange on the
first trading day immediately preceding the date notice is given, the
closing price of such Common Shares on (in order if more than one
applies) any national securities exchange, any regional securities
exchange, the highest bid price quoted through the National Association
of Securities Dealers Automated Quotation System or the highest bid
price reported by dealers in the over-the-counter market) of the
Corporation's Common Shares on the first trading day immediately
preceding the date that the notice of redemption is mailed to record
holders.
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<PAGE>
(2) Notice of an election under the redemption provision in
subparagraph (c)(1) above shall be mailed (by first class, postage
prepaid) to each holder of Series GG Preferred Shares to be redeemed at
the address appearing on the records of the Corporation not less than
thirty (30) days prior to the Redemption Date. If on or before the
Redemption Date specified in such notice, the funds necessary for such
redemption shall have been set aside by the Corporation so as to be
available for payment to the holder of Series GG Preferred Shares so
called for redemption upon such holder's surrender of such Series GG
Preferred Shares to the Corporation, then, notwithstanding that any
certificate representing Series GG Preferred Shares so called for
redemption shall not have been surrendered for cancellation, the
dividends thereon shall cease to accrue from and after the Redemption
Date, and all rights with respect to such Series GG Preferred Shares so
called for redemption, including any right to vote or otherwise
participate, in the determination of any proposed corporate action,
shall terminate at the close of business on such Redemption Date,
except only the right of the holder to receive the Redemption Price
therefor, but without interest.
(d) Each such notice of redemption shall state:
(1) the Redemption Date;
(2) the number of Series GG Preferred Shares to be redeemed
and, if less than all the shares held by such holder are to be redeemed
from such holder, the number of shares to be redeemed from such holder;
(3) whether the Redemption Price will be paid in cash (by
certified check) or by the issuance of Common Shares of the
Corporation, and, if payment is to be made by the issuance of Common
Shares, the number of Common Shares to be issued to such holder;
(4) the place where certificates for such shares are to be
surrendered for payment of the Redemption Price; and
(5) that dividends on the shares to be redeemed shall cease
to accrue on such Redemption Date.
On or after the Redemption Date each holder of shares of Series GG
Preferred Shares to be redeemed shall present and surrender his certificate or
certificates for such shares to the Corporation at the place designated in such
notice and thereupon the Redemption Price of such shares shall be paid to or on
the order of the person whose name appears on such certificate or certificates
as the owner thereof and each surrendered certificate shall be cancelled. In
case fewer than all the shares represented by such certificate are redeemed, a
new certificate shall be issued representing the unredeemed shares. From and
after the Redemption Date (unless the Corporation shall default in payment of
the Redemption Price) all dividends on the shares of Series GG Preferred Shares
designated for redemption in such notice shall cease to accrue, and all rights
of the holders thereof as shareholders of the Corporation, except the right to
receive the Redemption Price thereof, without interest, upon the surrender of
certificates representing the same, shall cease and terminate and such shares
shall not thereafter be transferred (except with the consent of the Corporation)
on the books of the Corporation and such shares shall not be deemed to be
outstanding for any purpose whatsoever.
(e) Voting Rights-
(1) With respect to all matters, each holder of Series GG
Preferred Shares shall be entitled to one vote for each share of such
stock standing in the name of the holder on the books of the
Corporation.
(2) With respect to the election of directors, the holders of
Series GG Preferred Shares shall have class voting rights (voting
together with the holders of (A) other Preferred Shares that are
entitled to vote thereon and that were issued after October 31, 1981,
and (B) Series A Common Shares) to the extent provided in Article IV of
the Restated Certificate of Incorporation of the Corporation.
(f) Conversion-
(1) Commencing upon the Issue Date and terminating at the
close of business on the day before the tenth anniversary of the Issue
Date, the outstanding Series GG Preferred Shares may be converted at
any time, upon
I-24
<PAGE>
fifteen (15) days' written notice mailed to the Corporation (by first
class, postage prepaid), into 2.3 Common Shares for each Series GG
Preferred Share. On presentation and surrender of the certificate(s)
representing the Series GG Preferred Shares to be converted to the
Corporation at its offices, the holder thereof shall be entitled to
receive in exchange therefor certificates for the fully paid and
non-assessable Common Shares of the Corporation at the rate aforesaid,
all under suitable regulations to be prescribed by the board of
directors of the Corporation. Conversion of Series GG Preferred Shares
in the manner aforesaid shall not affect the right of the converting
holder thereof to receive dividends accrued but unpaid thereon as of
the dividend payment date immediately prior to the date of conversion
(the "Conversion Date").
(2) The number of Common Shares into which each Series GG
Preferred Shares is convertible shall be subject to adjustment from
time to time as set forth in clauses (A) and (B) of this subparagraph
(2):
(A) In the event the Corporation shall (i) pay a
dividend on its Common Shares in shares of the Corporation,
(ii) subdivide its outstanding Common Shares, (iii) combine
the outstanding Common Shares into a smaller number of shares
or (iv) issue by reclassification of its Common Shares
(whether pursuant to a merger or consolidation or otherwise)
any shares of the Corporation, then the holder of each Series
GG Preferred Share shall be entitled to receive upon the
conversion of such share, the number of shares of the
Corporation which he would have owned or would have been
entitled to receive after the happening of any of the events
described above had such share been converted immediately
prior to the happening of such event. An adjustment made
pursuant to this provision shall become effective
retroactively with respect to conversions made after the
record date in the case of a dividend, and shall become
effective on the effective date in the case of a subdivision,
combination or reclassification.
(B) No adjustment in the conversion rate shall be
required unless such adjustment would require an increase or
decrease in such rate of at least one-tenth (1/10) of a Common
Share; provided, however, that any adjustments which by reason
of this clause (B) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment.
(3) The Corporation shall at all times reserve and keep
available out of its authorized Common Shares, solely for the purpose
of issuance upon conversion of Series GG Preferred Shares as herein
provided, such number of Common Shares as shall then be issuable upon
the conversion of all outstanding Series GG Preferred Shares.
(4) Fractional Common Shares shall not be issued upon
conversion of Series GG Preferred Shares, nor shall cash adjustments be
made for fractional shares upon such conversion.
(5) For purposes of this paragraph (e), the term "Common
Shares" shall mean (A) the class of stock designated as the Common
Shares of the Corporation on the date this Restated Certificate of
Incorporation is filed with the Delaware Secretary of State, or (B) any
other class of stock resulting from successive changes or
reclassifications of such class consisting solely of a change in par
value, or a change from no par value to par value.
(6) Each such notice of conversion shall state:
(A) The Conversion Date (which shall be at least
fifteen (15) days subsequent to the date of mailing of such
notice); and
(B) The number of Series GG Preferred Shares to be
converted, if less than all the shares held by such holder.
The holder shall deliver his certificate(s) representing such Series GG
Preferred Shares to be converted to the Corporation with the notice of
conversion. In case fewer than all the shares represented by such certificate
are converted, a new certificate shall be issued representing the unconverted
shares. From and after the Conversion Date (unless the Corporation shall default
in issuing the Common Shares on the Conversion Date) all dividends on such
shares of Series GG Preferred Shares shall cease to accrue and such shares shall
not be outstanding for any purpose whatsoever.
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<PAGE>
(g) Preference Value in Liquidation. The amount payable upon each
Series GG Preferred Shares in the event of either voluntary or involuntary
liquidation shall be $100.00, plus a sum equal to the amount of all dividends
accrued and unpaid dividends thereon.
II. Redeemable Voting Series II Preferred Shares, $.01 par value,
Liquidation Value $100.00 Per Share
(a) Designation-The designation of this series of Preferred Shares
shall be "Redeemable Voting Series II Preferred Shares" (hereinafter referred to
as the "Series II Preferred Shares").
(b) Dividends-Each holder of a Series II Preferred Share shall be
entitled to receive, when, as and if declared by the board of directors of the
Corporation, out of funds of the Corporation legally available therefor,
cumulative dividends during each fiscal quarter that such Series II Preferred
Shares are outstanding at a per annum dividend rate of six dollars ($6.00) per
share. Such dividends shall be payable as declared and cumulative from and
commence to accrue on the date of original issuance of such Series II Preferred
Shares (the "Issue Date").
(c) Redemption at Election of Holder-
(1) The Series II Preferred Shares shall be redeemable, in
whole or in part, at the option of the holder thereof, on March 1,
1993, upon written notice given by such holder, between September 1,
1992 and December 1, 1992 and on the first day of March in calendar
years 1997 through 2012, upon written notice given by such holder
between the first day of September and the first day of December of the
immediately preceding calendar year, of the holder's election to have
the Corporation redeem such shares on March 1st of the next succeeding
calendar year (the "Redemption Date"). Notice of an election under the
redemption provision above shall be mailed (by first class, postage
prepaid) to the office or agency maintained by the Corporation for that
purpose and each notice shall state the number of Series II Preferred
Shares to be redeemed, if less than all the shares held by the holder
giving such notice.
(2) Except as provided in the preceding paragraph, the Series
II Preferred Shares shall not be subject to redemption and shall not be
subject to the election by the holder thereof to have the Corporation
redeem such Series II Preferred Shares.
(3) Upon receipt of written notice from the holder of its
election to redeem, the Corporation shall redeem the Series II
Preferred Shares to be redeemed pursuant to such notice of redemption
on the Redemption Date. The redemption price (the "Redemption Price")
of the Series II Preferred Shares shall be equal to the product of the
number of Series II Preferred Shares elected to be redeemed multiplied
by the sum of (A) $100.00 per share plus (B) all dividends accrued and
unpaid, whether declared or undeclared, thereon through the Redemption
Date. The Redemption Price payable on any Redemption Date shall be paid
by check mailed to the holder within 30 days of the Redemption Date.
(4) If on or before the Redemption Date, the funds necessary
for such redemption shall have been set aside by the Corporation so as
to be available for payment to any holder of the Series II Preferred
Shares to be redeemed pursuant to such notice of redemption upon such
holder's surrender of such Series II Preferred Shares to the
Corporation, then, notwithstanding that any certificate representing
Series II Preferred Shares to be so redeemed shall not have been
surrendered for cancellation, the dividends thereon shall cease to
accrue from and after the Redemption Date, and all rights with respect
to such Series II Preferred Shares to be so redeemed, including any
right to vote or otherwise participate in the determination of any
proposed corporate action, shall terminate at the close of business on
such Redemption Date, except only the right of the holder to receive
the Redemption Price therefor, but without interest.
(5) Each holder who has given notice pursuant to subparagraph
(c)(1) above shall deliver the certificate representing the Series II
Preferred Shares to be redeemed to the Corporation with the notice of
the redemption. In case fewer than all the shares represented by such
certificate are to be redeemed, a new certificate shall be issued
representing the shares which were not so redeemed.
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<PAGE>
(d) Voting Rights-
(1) With respect to all matters, each holder of Series II
Preferred Shares shall be entitled to one vote for each share of such
stock standing in the name of the holder on the books of the
Corporation.
(2) With respect to the election of directors, the holders of
Series II Preferred Shares shall have class voting rights (voting
together with the holders of (A) other Preferred Shares that are
entitled to vote thereon and that were issued after October 31, 1981,
and (B) Series A Common Shares) to the extent provided in Article IV of
the Restated Certificate of Incorporation of the Corporation.
(e) Preference Value in Liquidation-The amount payable upon each Series
II Preferred Share in the event of either voluntary or involuntary liquidation
shall be $100.00.
JJ. Redeemable Voting Series JJ Preferred Shares, $.01 par value,
Liquidation Value $100.00 Per Share
(a) Designation-The designation of this series of Preferred Shares
shall be "Redeemable Voting Series JJ Preferred Shares" (hereinafter referred to
as the "Series JJ Preferred Shares").
(b) Dividends-Each holder of a Series JJ Preferred Share shall be
entitled to receive, when, as and if declared by the board of directors of the
Corporation, out of funds of the Corporation legally available therefor,
cumulative dividends during each fiscal quarter that such Series JJ Preferred
Shares are outstanding at a per annum dividend rate of six dollars ($6.00) per
share. Such dividends shall be payable as declared and cumulative from and
commence to accrue on the date of original issuance of such Series JJ Preferred
Shares (the "Issue Date").
(c) Redemption at Election of Holder-
(1) The Series JJ Preferred Shares shall be redeemable, in
whole or in part, at the option of the holder thereof, on March 1,
1994, upon written notice given by such holder, between September 1,
1993 and December 1, 1993 and on the first day of March in calendar
years 1997 through 2012, upon written notice given by such holder
between the first day of September and the first day of December of the
immediately preceding calendar year, of the holder's election to have
the Corporation redeem such shares on March 1st of the next succeeding
calendar year (the "Redemption Date"). Notice of an election under the
redemption provision above shall be mailed (by first class, postage
prepaid) to the office or agency maintained by the Corporation for that
purpose and each notice shall state the number of Series JJ Preferred
Shares to be redeemed, if less than all the shares held by the holder
giving such notice.
(2) Except as provided in the preceding paragraph, the Series
JJ Preferred Shares shall not be subject to redemption and shall not be
subject to the election by the holder thereof to have the Corporation
redeem such Series JJ Preferred Shares.
(3) Upon receipt of written notice from the holder of its
election to redeem, the Corporation shall redeem the Series JJ
Preferred Shares to be redeemed pursuant to such notice of redemption
on the Redemption Date. The redemption price (the "Redemption Price")
of the Series JJ Preferred Shares shall be equal to the product of the
number of Series JJ Preferred Shares elected to be redeemed multiplied
by the sum of (A) $100.00 per share plus (B) all dividends accrued and
unpaid, whether declared or undeclared, thereon through the Redemption
Date. The Redemption Price payable on any Redemption Date shall be paid
by check mailed to the holder within 30 days of the Redemption Date.
(4) If on or before the Redemption Date, the funds necessary
for such redemption shall have been set aside by the Corporation so as
to be available for payment to any holder of the Series JJ Preferred
Shares to be redeemed pursuant to such notice of redemption upon such
holder's surrender of such Series JJ Preferred Shares to the
Corporation, then, notwithstanding that any certificate representing
Series JJ Preferred Shares to be so redeemed shall not have been
surrendered for cancellation, the dividends thereon shall cease to
accrue from and after the Redemption Date, and all rights with respect
to such Series JJ Preferred Shares to be so redeemed, including any
right to vote or otherwise participate in the determination of any
proposed corporate action, shall
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<PAGE>
terminate at the close of business on such Redemption Date, except only
the right of the holder to receive the Redemption Price therefor, but
without interest.
(5) Each holder who has given notice pursuant to subparagraph
(c)(1) above shall deliver the certificate representing the Series JJ
Preferred Shares to be redeemed to the Corporation with the notice of
the redemption. In case fewer than all the shares represented by such
certificate are to be redeemed, a new certificate shall be issued
representing the shares which were not so redeemed.
(d) Voting Rights-
(1) With respect to all matters, each holder of Series JJ
Preferred Shares shall be entitled to one vote for each share of such
stock standing in the name of the holder on the books of the
Corporation.
(2) With respect to the election of directors, the holders of
Series JJ Preferred Shares shall have class voting rights (voting
together with the holders of (A) other Preferred Shares that are
entitled to vote thereon and that were issued after October 31, 1981,
and (B) Series A Common Shares) to the extent provided in Article IV of
the Restated Certificate of Incorporation of the Corporation.
(e) Preference Value in Liquidation-The amount payable upon each Series
JJ Preferred Share in the event of either voluntary or involuntary liquidation
shall be $100.00.
KK. Redeemable Voting Series KK Preferred Shares, $.01 par value,
Liquidation Value $100.00 Per Share
(a) Designation-The designation of this series of Preferred Shares
shall be "Redeemable Voting Series KK Preferred Shares" (hereinafter referred to
as the "Series KK Preferred Shares").
(b) Dividends-Each holder of a Series KK Preferred Share shall be
entitled to receive, when, as and if declared by the board of directors of the
Corporation, out of funds of the Corporation legally available therefor,
cumulative dividends during each fiscal quarter that such Series KK Preferred
Shares are outstanding at a per annum dividend rate of six dollars ($6.00) per
share. Such dividends shall be payable as declared and cumulative from and
commence to accrue on the date of original issuance of such Series KK Preferred
Shares (the "Issue Date").
(c) Redemption at Election of Holder-
(1) The Series KK Preferred Shares shall be redeemable, in
whole or in part, at the option of the holder thereof, on March 1,
1995, upon written notice given by such holder, between September 1,
1994 and December 1, 1994 and on the first day of March in calendar
years 1997 through 2012, upon written notice given by such holder
between the first day of September and the first day of December of the
immediately preceding calendar year, of the holder's election to have
the Corporation redeem such shares on March 1st of the next succeeding
calendar year (the "Redemption Date"). Notice of an election under the
redemption provision above shall be mailed (by first class, postage
prepaid) to the office or agency maintained by the Corporation for that
purpose and each notice shall state the number of Series KK Preferred
Shares to be redeemed, if less than all the shares held by the holder
giving such notice.
(2) Except as provided in the preceding paragraph, the Series
KK Preferred Shares shall not be subject to redemption and shall not be
subject to the election by the holder thereof to have the Corporation
redeem such Series KK Preferred Shares.
(3) Upon receipt of written notice from the holder of its
election to redeem, the Corporation shall redeem the Series KK
Preferred Shares to be redeemed pursuant to such notice of redemption
on the Redemption Date. The redemption price (the "Redemption Price")
of the Series KK Preferred Shares shall be equal to the product of the
number of Series KK Preferred Shares elected to be redeemed multiplied
by the sum of (A) $100.00 per share plus (B) all dividends accrued and
unpaid, whether declared or undeclared, thereon through the Redemption
Date. The Redemption Price payable on any Redemption Date shall be paid
by check mailed to the holder within 30 days of the Redemption Date.
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<PAGE>
(4) If on or before the Redemption Date, the funds necessary
for such redemption shall have been set aside by the Corporation so as
to be available for payment to any holder of the Series KK Preferred
Shares to be redeemed pursuant to such notice of redemption upon such
holder's surrender of such Series KK Preferred Shares to the
Corporation, then, notwithstanding that any certificate representing
Series KK Preferred Shares to be so redeemed shall not have been
surrendered for cancellation, the dividends thereon shall cease to
accrue from and after the Redemption Date, and all rights with respect
to such Series KK Preferred Shares to be so redeemed, including any
right to vote or otherwise participate in the determination of any
proposed corporate action, shall terminate at the close of business on
such Redemption Date, except only the right of the holder to receive
the Redemption Price therefor, but without interest.
(5) Each holder who has given notice pursuant to subparagraph
(c)(1) above shall deliver the certificate representing the Series KK
Preferred Shares to be redeemed to the Corporation with the notice of
the redemption. In case fewer than all the shares represented by such
certificate are to be redeemed, a new certificate shall be issued
representing the shares which were not so redeemed.
(d) Voting Rights-
(1) With respect to all matters, each holder of Series KK
Preferred Shares shall be entitled to one vote for each share of such
stock standing in the name of the holder on the books of the
Corporation.
(2) With respect to the election of directors, the holders of
Series KK Preferred Shares shall have class voting rights (voting
together with the holders of (A) other Preferred Shares that are
entitled to vote thereon and that were issued after October 31, 1981,
and (B) Series A Common Shares) to the extent provided in Article IV of
the Restated Certificate of Incorporation of the Corporation.
(e) Preference Value in Liquidation-The amount payable upon each Series
KK Preferred Share in the event of either voluntary or involuntary liquidation
shall be $100.00.
LL. Redeemable Voting Series LL Preferred Shares, $.01 par value,
Liquidation Value $100.00 Per Share
(a) Designation-The designation of this series of Preferred Shares
shall be "Redeemable Voting Series LL Preferred Shares" (hereinafter referred to
as the "Series LL Preferred Shares").
(b) Dividends-Each holder of a Series LL Preferred Share shall be
entitled to receive, when, as and if declared by the board of directors of the
Corporation, out of funds of the Corporation legally available therefor,
cumulative dividends during each fiscal quarter that such Series LL Preferred
Shares are outstanding at a per annum dividend rate of six dollars ($6.00) per
share. Such dividends shall be payable as declared and cumulative from and
commence to accrue on the date of original issuance of such Series LL Preferred
Shares (the "Issue Date").
(c) Redemption at Election of Holder-
(1) The Series LL Preferred Shares shall be redeemable, in
whole or in part, at the option of the holder thereof, on March 1,
1996, upon written notice given by such holder, between September 1,
1995 and December 1, 1995 and on the first day of March in calendar
years 1997 through 2012, upon written notice given by such holder
between the first day of September and the first day of December of the
immediately preceding calendar year, of the holder's election to have
the Corporation redeem such shares on March 1st of the next succeeding
calendar year (the "Redemption Date"). Notice of an election under the
redemption provision above shall be mailed (by first class, postage
prepaid) to the office or agency maintained by the Corporation for that
purpose and each notice shall state the number of Series LL Preferred
Shares to be redeemed, if less than all the shares held by the holder
giving such notice.
(2) Except as provided in the preceding paragraph, the Series
LL Preferred Shares shall not be subject to redemption and shall not be
subject to the election by the holder thereof to have the Corporation
redeem such Series LL Preferred Shares.
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<PAGE>
(3) Upon receipt of written notice from the holder of its
election to redeem, the Corporation shall redeem the Series LL
Preferred Shares to be redeemed pursuant to such notice of redemption
on the Redemption Date. The redemption price (the "Redemption Price")
of the Series LL Preferred Shares shall be equal to the product of the
number of Series LL Preferred Shares elected to be redeemed multiplied
by the sum of (A) $100.00 per share plus (B) all dividends accrued and
unpaid, whether declared or undeclared, thereon through the Redemption
Date. The Redemption Price payable on any Redemption Date shall be paid
by check mailed to the holder within 30 days of the Redemption Date.
(4) If on or before the Redemption Date, the funds necessary
for such redemption shall have been set aside by the Corporation so as
to be available for payment to any holder of the Series LL Preferred
Shares to be redeemed pursuant to such notice of redemption upon such
holder's surrender of such Series LL Preferred Shares to the
Corporation, then, notwithstanding that any certificate representing
Series LL Preferred Shares to be so redeemed shall not have been
surrendered for cancellation, the dividends thereon shall cease to
accrue from and after the Redemption Date, and all rights with respect
to such Series LL Preferred Shares to be so redeemed, including any
right to vote or otherwise participate in the determination of any
proposed corporate action, shall terminate at the close of business on
such Redemption Date, except only the right of the holder to receive
the Redemption Price therefor, but without interest.
(5) Each holder who has given notice pursuant to subparagraph
(c)(1) above shall deliver the certificate representing the Series LL
Preferred Shares to be redeemed to the Corporation with the notice of
the redemption. In case fewer than all the shares represented by such
certificate are to be redeemed, a new certificate shall be issued
representing the shares which were not so redeemed.
(d) Voting Rights-
(1) With respect to all matters, each holder of Series LL
Preferred Shares shall be entitled to one vote for each share of such
stock standing in the name of the holder on the books of the
Corporation.
(2) With respect to the election of directors, the holders of
Series LL Preferred Shares shall have class voting rights (voting
together with the holders of (A) other Preferred Shares that are
entitled to vote thereon and that were issued after October 31, 1981,
and (B) Series A Common Shares) to the extent provided in Article IV of
the Restated Certificate of Incorporation of the Corporation.
(e) Preference Value in Liquidation-The amount payable upon each Series
LL Preferred Share in the event of either voluntary or involuntary liquidation
shall be $100.00.
QQ. Redeemable Voting Series QQ Preferred Shares, $.01 par value,
Liquidation Value $100.00 Per Share
(a) Designation-The designation of the series of Preferred Shares
created by this resolution shall be "Redeemable Voting Series QQ Preferred
Shares" (hereinafter referred to as the "Series QQ Preferred Shares").
(b) Dividends-Each holder of a Series QQ Preferred Share shall be
entitled to receive, when, as and if declared by the board of directors of the
Corporation, cumulative dividends during each fiscal quarter to the extent set
forth below. Such dividends shall commence to accrue (whether or not declared),
without interest, with the fiscal quarter ending December 31, 1991, at a per
annum rate of four dollars ($4.00) per share and shall be paid (if and when
declared) in cash on the first business day after the end of the quarter for
which accrued; provided, however, that any dividends accrued with respect to the
first thirteen quarters after September 30, 1991, shall be paid by issuing
additional Series QQ Preferred Shares at the annual rate of .04 of a share for
each outstanding Series QQ Preferred Share; and such dividends shall accrue
thereafter at a per annum rate of six dollars ($6.00) per share. If with respect
to any of the first thirteen quarters after September 30, 1991, any of the
additional Series QQ Preferred Shares to be paid in satisfaction of the dividend
then accrued are not issued, then, for the purpose of determining the cumulative
dividends to which each holder of Series QQ Preferred Shares shall thereafter be
entitled to receive with respect to subsequent fiscal quarters ended on or
before December 31, 1994, the additional Series QQ Preferred Shares not so
issued shall be deemed to have been issued as of the first business day
following the fiscal quarter for which accrued and to accrue dividends
commencing with the quarter in which deemed to be issued.
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<PAGE>
(c) Redemption at Election of Corporation-
(1) Unless the holder shall have elected to have the Series QQ
Preferred Shares redeemed in accordance with subparagraph (d)(1)
hereof, the Series QQ Preferred Shares shall thereafter be redeemable
in whole but not in part by the Corporation, upon giving notice as
provided in subparagraph (c)(2) hereof, by delivering, at the option of
the Corporation, on any date set for redemption (the "Redemption
Date"), for each Series QQ Share (A) 4.35003 (the "Redemption Ratio")
fully paid and non-assessable Common Shares, par value $1.00 per share
("USCC Common Shares"), of United States Cellular Corporation, a
Delaware corporation ("USCC"), or (B) that number of Common Shares, par
value $1.00 per share, of the Corporation ("TDS Common Shares") having
a Market Value equal to the Market Value of one USCC Common Share
multiplied by the Redemption Ratio, or (C) a combination of USCC Common
Shares and TDS Common Shares having an aggregate Market Value equal to
the Market Value of one USCC Common Share multiplied by the Redemption
Ratio, or (D) cash (paid by certified check) equal to the Market Value
of one USCC Common Share multiplied by the Redemption Ratio.
(2) Notice of an election under the redemption provision in
subparagraph (c)(1) above shall be mailed (by first class, postage
prepaid) to each holder of Series QQ Preferred Shares to be redeemed at
the address appearing on the records of the Corporation not less than
thirty (30) days prior to the Redemption Date. If the Corporation
elects to redeem any of the Series QQ Preferred Shares in cash and, on
or before the Redemption Date specified in such notice, the funds
necessary for such redemption shall have been set aside by the
Corporation so as to be available for payment to the holders of Series
QQ Preferred Shares so called for redemption upon such holders'
surrender of such Series QQ Preferred Shares to the Corporation, then,
notwithstanding that any certificate representing Series QQ Preferred
Shares so called for redemption shall not have been surrendered for
cancellation, all rights with respect to such Series QQ Preferred
Shares so called for redemption, including any right to vote or
otherwise participate in the determination of any proposed corporate
action, shall terminate at the close of business on such Redemption
Date, except only the right of the holder to receive the Redemption
Price therefor, but without interest.
(3) Each notice of redemption shall state:
(A) the Redemption Date;
(B) the number of Series QQ Preferred Shares to be
redeemed;
(C) whether the Redemption Price will be paid in cash
(by certified check), by the issuance of TDS Common Shares, by
the transfer of USCC Common Shares, or by a combination
thereof; and
(D) the place where certificates for the Series QQ
Preferred Shares are to be surrendered for payment of the
Redemption Price.
(4) Each holder of Series QQ Preferred Shares to be redeemed
shall present and surrender his certificate for such shares to the
Corporation at the place designated in such notice. Within two business
days after the date of such presentation or, if later, upon the
Redemption Date, the Redemption Price of such shares shall be paid to
or on the order of the person whose name appears on such certificate as
the owner thereof and each surrendered certificate shall be canceled.
From and after the Redemption Date (unless the Corporation shall
default in payment of the Redemption Price), all rights of the holders
thereof as shareholders of the Corporation, except the right to receive
the Redemption Price thereof, without interest, upon the surrender of
certificates representing the same, shall cease and terminate, such
shares shall not thereafter be transferred (except with the consent of
the Corporation) on the books of the Corporation, and such shares shall
not be deemed to be outstanding for any purpose whatsoever.
(5) For purposes of this Statement, (A) the "Market Value" per
share of TDS Common Shares or USCC Common Shares at any time as of
which such value is to be determined shall be deemed to be the average
"Closing Price" (as defined below) for TDS or USCC Common Shares, as
the case may be, for the five trading days ending on the fifth business
day preceding the relevant Redemption Date, Accelerated Redemption Date
or effective
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<PAGE>
date of a Going Private Transaction of the type referred to in clause
(d)(4)(C) below, (B) a "business day" means a day on which the New York
Stock Exchange or other principal stock exchange or over-the-counter
market on which the TDS or USCC Common Shares, as the case may be, are
traded was open for at least one-half of its normal business day, and
(C) the "Closing Price" on any day shall be the last sale price of such
shares, regular way, as reported in a composite published report of
transactions which includes transactions on the exchange or other
principal markets in which such shares are traded or, if there is no
such composite report as to any such day, the last reported sale price,
regular way (or if there is no such reported sale on such day, the
average of the closing reported bid and asked prices) on the principal
United States securities trading market (whether a stock exchange,
National Association of Securities Dealers Automated Quotation System
or otherwise) on which such shares are traded.
(d) Redemption at Election of Holder-
(1) The Series QQ Preferred Shares outstanding on January 1,
1995, shall be redeemable in whole or in part at the option of the
holder thereof on January 31, 1995, upon written notice given by such
holder at the office or agency maintained by the Corporation for that
purpose.
(2) Each Series QQ Preferred Share tendered to the Corporation
for redemption pursuant to subparagraph (d)(1) above shall be redeemed
by the Corporation on the date specified in the notice (and permitted
by this Statement) referred to in subparagraph (d)(1) above (which
shall be the "Redemption Date" of such shares), by delivering, at the
option of the Corporation, (A) that number of fully paid and
non-assessable USCC Common Shares determined by multiplying one (1) by
the Redemption Ratio, or (B) that number of TDS Common Shares having a
Market Value equal to the Market Value of one USCC Common Share
multiplied by the Redemption Ratio, or (C) a combination of USCC Common
Shares and TDS Common Shares having an aggregate Market Value equal to
the Market Value of one USCC Common Share multiplied by the Redemption
Ratio.
(3) Upon presentation and surrender of the certificate
representing the Series QQ Preferred Shares to be redeemed, the holder
thereof shall be entitled to receive in exchange therefor a certificate
or certificates representing the fully paid and non-assessable TDS
Common Shares, USCC Common Shares, or a combination thereof, determined
in the manner set forth in subparagraph (d)(2) above. In addition, if
any additional Series QQ Preferred Shares that were to be issued in
payment of dividends accrued with respect to the first thirteen
quarters after September 30, 1991, were not issued prior to the
Redemption Date, then such holder shall also receive, in satisfaction
of such dividends, the additional TDS Common Shares, USCC Common
Shares, or a combination thereof, determined in the manner set forth in
subparagraph (d)(2) above, which such holder would have received if
such additional shares had been issued and had been tendered for
redemption.
(4) The amount and kind of securities or property to be
delivered pursuant to subparagraph (c)(1) or (d)(2) above shall be
subject to adjustment from time to time as follows:
(A) In case USCC shall (i) take a record of the
holders of USCC Common Shares for the purpose of entitling
them to receive a dividend payable in USCC Common Shares, (ii)
subdivide the outstanding USCC Common Shares, or (iii) combine
the outstanding USCC Common Shares into a smaller number of
shares, the Redemption Ratio shall be adjusted (or further
adjusted in the case of successive such events) so that each
holder of Series QQ Preferred Shares shall thereafter be
entitled upon the redemption of each share thereof held by him
to receive for each such share the number of USCC Common
Shares which he would have owned or been entitled to receive
after the happening of that one of the events described above
which shall have happened had such Series QQ Preferred Share
been redeemed immediately prior to the happening of such event
in exchange for USCC Common Shares, such entitlement to become
effective immediately after the opening of business on the day
next following (x) the record date for such dividend, or (y)
the day upon which such subdivision or combination shall
become effective.
(B) In case USCC shall take a record of the holders
of USCC Common Shares for the purpose of entitling them to
receive an Extraordinary Dividend (as hereinafter defined),
the holder of each Series QQ Preferred Share shall be entitled
in each such case to an additional cash payment upon the
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redemption of such share in an amount equal to the amount of
cash and the fair market value as of such record date of any
property other than cash that such holder would have been
entitled to receive as a result of such Extraordinary Dividend
had such Series QQ Preferred Share been redeemed immediately
prior to such record date in exchange for USCC Common Shares.
As used herein the term "Extraordinary Dividend" means any
dividend upon USCC Common Shares payable in cash and/or in
property other than cash if and to the extent that on the
record date thereof the amount of such cash and the fair
market value of such property per USCC Common Share (when
added to all other dividends (other than any dividend referred
to in clause (d)(4)(A) above) previously paid on USCC Common
Shares during the same Payment Period (as hereinafter
defined)) exceeds ten percent of the average Closing Price for
USCC Common Shares for the five trading days ending on such
record date; provided, however, that the term "Extraordinary
Dividend" shall not include any dividend referred to in clause
(d)(4)(A) above. As used herein the term "Payment Period"
means each consecutive 12-month period commencing on October
1, 1991, and each anniversary thereof.
(C) In case USCC shall effect a Going Private
Transaction (as hereinafter defined) in which the
consideration to be received by the holders of USCC Common
Shares consists of equity securities of TDS, then,
notwithstanding any provision of this Statement to the
contrary, upon the subsequent redemption of the Series QQ
Preferred Shares, each Series QQ Preferred Share tendered to
the Corporation for redemption pursuant to subparagraph (c)(2)
or (d)(1) above shall be redeemed by the Corporation on the
Redemption Date specified in the redemption notice (and
otherwise permitted by this Statement) by delivering that
number of TDS Common Shares having a Market Value as of the
effective date of such Going Private Transaction equal to the
Market Value on such date of that number of USCC Common Shares
for which such Series QQ Preferred Share might have been
redeemed immediately prior to such Going Private Transaction,
plus that number of USCC Common Shares which the holder of
such Series QQ Preferred Share would have been entitled to
receive if all of the additional Series QQ Preferred Shares to
be issued in payments of accrued dividends for the first
thirteen quarters after September 30, 1991, pursuant to the
proviso in paragraph (b) above, had been issued and
immediately redeemed for USCC Common Shares on the last
business day immediately preceding the effective date of such
Going Private Transaction. The TDS Common Shares to be
delivered pursuant to this clause (d)(4)(C) shall be subject
to adjustment from time to time after the effective date of a
Going Private Transaction of the type referred to in this
clause pursuant to clauses (d)(4)(A) and (B) as if such
clauses referred to TDS and TDS Common Shares rather than USCC
and USCC Common Shares, respectively.
(D) No adjustment in the number of TDS or USCC Common
Shares, as the case may be, to which any holder is entitled
pursuant to the application of clause (d)(4)(A) above shall be
required unless such adjustment would require an increase or
decrease of at least 1/10th of a TDS or USCC Common Share, as
the case may be; provided, however, that any adjustments which
by reason of this clause (D) are not required to be made shall
be carried forward and taken into account in any subsequent
adjustment.
(5) Each holder who has given notice pursuant to subparagraph
(d)(1) above shall deliver the certificate representing the Series QQ
Preferred Shares to be redeemed to the Corporation with the notice of
the redemption. In case fewer than all the shares represented by any
certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares.
(e) Redemption in the Event of Organic Change-In case USCC shall
propose to effect any reorganization or reclassification of USCC Common Shares,
consolidate or merge with another corporation, or sell to another corporation
all or substantially all of its assets in such a way that holders of its
outstanding USCC Common Shares shall be entitled to receive (either directly or
upon subsequent liquidation) stock, securities, cash or other property with
respect to or in exchange for such USCC Common Shares (collectively, any
"Organic Change"), and immediately after such Organic Change TDS or USCC would
no longer be under common control within the meaning of Rule 405 promulgated by
the Securities and Exchange Commission (the "SEC") under the Securities Act of
1933, as amended (a "Disaffiliation Transaction"), or USCC or TDS shall propose
to effect any transaction or series of transactions of the type described in
paragraph (a)(3)(i) of Rule 13e-3 promulgated by the SEC under the Securities
Exchange Act of 1934, as amended, in which USCC is the "issuer", which has one
of the effects described in paragraph (a)(3)(ii) of such Rule (a "Going Private
Transaction"), and in which
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the consideration to be received by the holders of USCC Common Shares is
something other than equity securities of TDS, then TDS shall deliver a notice
of redemption (as described in subparagraph (c)(3) above) to each holder of
Series QQ Preferred Shares at least ten business days prior to the earliest date
(the "Effective Date") on which holders of USCC Common Shares shall become
entitled to receive stock, securities, cash or other property in connection with
such Disaffiliation Transaction or such Going Private Transaction. Such notice
of redemption shall specify the Effective Date and each Series QQ Preferred
Share shall be redeemed on a date (the "Accelerated Redemption Date") which is
not later than the last business day preceding such Effective Date by the
delivery by the Corporation of that number of USCC Common Shares for which such
Series QQ Preferred Share might have been redeemed immediately prior to such
Disaffiliation Transaction or such Going Private Transaction, plus that number
of USCC Common Shares which the holder of such Series QQ Preferred Share would
have been entitled to receive if all of the additional Series QQ Preferred
Shares to be issued in payment of accrued dividends for the first thirteen
fiscal quarters after September 30, 1991, pursuant to the proviso in paragraph
(b) above, had been issued and immediately redeemed for USCC Common Shares on
the Accelerated Redemption Date.
(f) No Fractional Shares-No fractional TDS Common Shares or USCC Common
Shares shall be issued upon the redemption of Series QQ Preferred Shares, nor
shall cash adjustments be made for fractional shares upon such redemption.
(g) Terminology-For purposes of this Statement, the term "TDS Common
Shares" and the term "USCC Common Shares" shall mean (A) the class of stock
designated as the Common Shares of the Corporation and the Common Shares of
USCC, respectively, on the date this Statement is filed with the Delaware
Secretary of State, or (B) any other class of stock resulting from successive
changes or reclassifications of such class consisting solely of a change in par
value, or a change from no par value to par value.
(h) Voting Rights-
(1) With respect to all matters, each holder of Series QQ
Preferred Shares shall be entitled to one vote for each share of such
stock standing in the name of the holder on the books of the
Corporation.
(2) With respect to the election of directors, the holders of
Series QQ Preferred Shares shall have class voting rights (voting
together with the holders of (A) other Preferred Shares that are
entitled to vote thereon and that were issued after October 31, 1981,
and (B) Series A Common Shares) to the extent provided in Article IV of
the Restated Certificate of Incorporation of the Corporation.
(i) Preference Value in Liquidation-The amount payable upon each Series
QQ Preferred Share in the event of either voluntary or involuntary liquidation
shall be $100.00.
SS. $5.50 Cumulative Convertible and Redeemable Voting Series SS Preferred
Shares, $.01 par value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of the series of Preferred Shares
created by this resolution shall be "$5.50 Cumulative Convertible and Redeemable
Voting Series SS Preferred Shares" (hereinafter referred to as the "Series SS
Preferred Shares").
(b) Dividends-Each holder of a Series SS Preferred Share shall be
entitled to receive, when, as and if declared by the board of directors of the
Corporation, out of funds of the Corporation legally available therefor,
cumulative dividends during each fiscal quarter to the extent set forth below.
Such dividends shall be cumulative from and shall commence to accrue (whether or
not declared) on the date of original issuance of such Series SS Preferred
Shares (the "Issue Date"), at a per annum dividend rate of five dollars and
fifty cents ($5.50) per share.
(c) Redemption-
(1) On or after the fifth anniversary of the Issue Date, the
Series SS Preferred Shares shall be redeemable, in whole or in part
from time to time, at the option of the Corporation, on a date (the
"Optional
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Redemption Date") which is the first business day after a dividend
payment date, pursuant to a notice as provided in subparagraph (c)(3)
hereof, at a redemption price (the "Optional Redemption Price") equal
to the sum of (A) $100.00 for each Series SS Preferred Share called for
redemption plus (B) all dividends accrued and unpaid thereon through
the Optional Redemption Date. The Optional Redemption Price payable on
any Optional Redemption Date shall be payable (i) in cash (by certified
check), or (ii) in the event that the Average Closing Price (as defined
below) for the Common Shares of the Corporation exceeds $44.44, then,
at the option of the Corporation (to be exercised, if at all, in its
notice of redemption) by (I) the issuance to the record holder of the
Series SS Preferred Shares being redeemed of 2.25 Common Shares
(subject to adjustment as set forth in paragraph (e)(2) hereof) for
each Series SS Preferred Share so redeemed plus (II) the payment in
cash of all dividends accrued and unpaid thereon through the Optional
Redemption Date. If a holder, subsequent to receiving a notice of
redemption of less than all of such holder's Series SS Preferred Shares
and at least fifteen (15) days prior to the Redemption Date, elects to
convert any Series SS Preferred Shares, then the number of shares to be
redeemed from such holder on such Redemption Date shall be reduced by
the lesser of (x) the number of Series SS Preferred Shares called for
redemption from such holder and (y) the number of such shares converted
by such holder. For purposes hereof, the term "Average Closing Price"
shall mean the arithmetical average of the closing price on the
American Stock Exchange of the Common Shares of the Corporation for the
five trading days ending on the fifth business day preceding the
relevant Redemption Date and, if the Common Shares of the Corporation
are not listed on the American Stock Exchange then, in order, if more
than one applies, the arithmetical average of the closing price of such
Common Shares on any national securities exchange or on any regional
securities exchange, the highest bid price quoted through the National
Association of Securities Dealers Automated Quotation System, or the
highest bid price reported by dealers in the over-the-counter market.
(2) If an Optional Redemption Date has not occurred by the
tenth anniversary of the Issue Date (the "Mandatory Redemption Date"
and, together with the Optional Redemption Date, the "Redemption
Date"), the Corporation shall, on the Mandatory Redemption Date, redeem
all Series SS Preferred Shares then outstanding at a redemption price
(the "Mandatory Redemption Price" and, together with the Optional
Redemption Price, the "Redemption Price") equal to the sum of (A)
$100.00 for each Series SS Preferred Share outstanding on the Mandatory
Redemption Date plus (B) all dividends accrued and unpaid thereon
through the Mandatory Redemption Date. The Mandatory Redemption Price
shall be payable in cash by certified check.
(3) Notice of (A) an election under the redemption provision
in subparagraph (c)(1) above, or (B) the Mandatory Redemption Date,
shall be mailed (by registered mail, return receipt requested) to each
holder of Series SS Preferred Shares to be redeemed at the address
appearing on the records of the Corporation not less than sixty (60)
days prior to the Redemption Date. If, on or before the Redemption Date
specified in such notice, the funds or Common Shares necessary for such
redemption shall have been set aside by the Corporation so as to be
available for payment to the holder of Series SS Preferred Shares so
called for redemption upon such holder's surrender of such Series SS
Preferred Shares to the Corporation, then, notwithstanding that any
certificate representing Series SS Preferred Shares so called for
redemption shall not have been surrendered for cancellation, the
dividends thereon shall cease to accrue from and after the Redemption
Date, and all rights with respect to such Series SS Preferred Shares so
called for redemption, including any right to vote or otherwise
participate in the determination of any proposed corporate action,
shall terminate at the close of business on such Redemption Date,
except only the right of the holder to receive the Redemption Price
therefor, but without interest.
(4) Each such notice of redemption shall state:
(A) the Redemption Date;
(B) the number of Series SS Preferred Shares to be
redeemed and, if less than all the shares held by such holder
are to be redeemed from such holder, the number of shares to
be redeemed from such holder (subject in each case to the
right of the holder to convert such shares prior to the
Redemption Date);
(C) in the case of an Optional Redemption Date,
whether the Optional Redemption Price will be paid in cash (by
certified check) or, in the event the Average Closing Price
exceeds $44.44, by the issuance of Common Shares of the
Corporation;
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<PAGE>
(D) the place where certificates for such shares are
to be surrendered for payment of the Redemption Price; and
(E) that dividends on the shares to be redeemed shall
cease to accrue on such Redemption Date.
(5) On or after a Redemption Date, each holder of shares of
Series SS Preferred Shares to be redeemed shall present and surrender
the certificate or certificates for such shares to the Corporation at
the place designated in such notice and thereupon the Redemption Price
of such shares shall be paid to or on the order of the person whose
name appears on such certificate or certificates as the owner thereof
and each surrendered certificate shall be cancelled. In case fewer than
all the shares represented by such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares. From
and after a Redemption Date (unless the Corporation shall default in
payment of the Redemption Price) all dividends on the Series SS
Preferred Shares designated for redemption in such notice shall cease
to accrue, and all rights of the holders thereof as shareholders of the
Corporation, except the right to receive the Redemption Price thereof,
without interest, upon the surrender of certificates representing the
same, shall cease and terminate and such shares shall not thereafter be
transferred (except with the consent of the Corporation) on the books
of the Corporation and such shares shall not be deemed to be
outstanding for any purpose whatsoever.
(d) Voting Rights-
(1) With respect to all matters, each holder of Series SS
Preferred Shares shall be entitled to one vote for each share of such
stock standing in the name of the holder on the books of the
Corporation.
(2) With respect to the election of directors, the holders of
Series SS Preferred Shares shall have class voting rights (voting
together with the holders of (A) other Preferred Shares that are
entitled to vote thereon and that were issued after October 31, 1981,
and (B) Series A Common Shares) to the extent provided in Article IV of
the Restated Certificate of Incorporation of the Corporation.
(e) Conversion-
(1) At any time and from time to time after the Issue Date,
any holder of Series SS Preferred Shares may convert all or any portion
of the Series SS Preferred Shares held by such holder into Common
Shares at a conversion ratio (subject to adjustment as set forth below)
of 2.25 Common Shares for each Series SS Preferred Share so converted;
provided, however, that, in the case of Series SS Preferred Shares
called for redemption or shares to be redeemed on the Mandatory
Redemption Date, the right of the holder thereof to convert such shares
shall expire fifteen (15) days prior to the Redemption Date. A holder
of Series SS Preferred Shares shall be entitled to receive in exchange
therefor certificates for the fully paid and non-assessable Common
Shares of the Corporation at the rate aforesaid (with the aggregate
number of such Common Shares rounded to the nearest whole share) within
fifteen (15) days following presentation and surrender by such holder
to the Corporation at its offices of the certificates representing the
Series SS Preferred Shares to be converted (the "Conversion Date"), all
under suitable regulations (which shall not be inconsistent with the
provisions hereof, which shall not materially impair the rights of the
holder, and of which the holder shall receive advance notice) to be
prescribed by the board of directors of the Corporation. Conversion of
Series SS Preferred Shares in the manner aforesaid shall not affect the
right of the converting holder thereof to receive (on the Conversion
Date if such dividends shall be legally payable by the Corporation on
such date, or as promptly after the Conversion Date as such dividends
shall be legally payable) dividends accrued but unpaid thereon as of
any dividend payment date prior to the Conversion Date.
(2) The number of Common Shares to be exchanged for each
Series SS Preferred Share that is converted pursuant to subparagraph
(e)(1) or redeemed in accordance with subparagraph (c)(1) shall be
subject to adjustment from time to time as set forth in clauses (A) and
(B) of this subparagraph (2):
(A) In the event the Corporation shall (i) pay a
dividend on its Common Shares in shares of the Corporation,
(ii) subdivide its outstanding Common Shares, (iii) combine
the outstanding Common Shares into a smaller number of shares
or (iv) issue by reclassification of its Common Shares
(whether
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<PAGE>
pursuant to a merger or consolidation or otherwise) any shares
of the Corporation, then the holder of each Series SS
Preferred Share shall be entitled to receive in exchange for
such share upon the conversion or redemption thereof the
number of shares of the Corporation which such holder would
have owned or would have been entitled to receive after the
happening of any of the events described above had such share
been converted immediately prior to the happening of such
event. The adjustments provided for in this clause (A) shall
be cumulative if more than one event requiring an adjustment
shall occur between the Issue Date and the Conversion Date or
Redemption Date, as the case may be.
(B) No adjustment pursuant to this paragraph (e)
shall be required unless such adjustment would require an
increase or decrease in such rate of at least one-tenth (1/10)
of a Common Share; provided, however, that any adjustments
which by reason of this clause (B) are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment.
(C) Promptly after any adjustment pursuant to this
paragraph (e), the Corporation shall give written notice
thereof to all holders of Series SS Preferred Shares, setting
forth in reasonable detail and certifying the calculation of
such adjustment.
(3) The Corporation shall at all times reserve and keep
available out of its authorized Common Shares, solely for the purpose
of issuance upon conversion of Series SS Preferred Shares as herein
provided, such number of Common Shares as shall then be issuable upon
the conversion of all outstanding Series SS Preferred Shares.
(4) Fractional Common Shares shall not be issued upon
conversion of Series SS Preferred Shares, nor shall cash adjustments be
made for fractional shares upon such conversion.
(5) For purposes of this paragraph (e), the term "Common
Shares" shall mean (A) the class of stock designated as the Common
Shares of the Corporation on the date this Statement is filed with the
Delaware Secretary of State, or (B) any other class of stock resulting
from successive changes or reclassification of such class consisting
solely of a change in par value, or a change from no par value to par
value.
(6) Each notice of conversion shall state the number of Series
SS Preferred Shares to be converted, if less than all the shares held
by such holder. In case fewer than all the shares represented by such
certificate are converted, a new certificate shall be issued
representing the unconverted shares. From and after the Conversion Date
(unless the Corporation shall default in issuing the Common Shares on
the Conversion Date), all dividends on such converted shares of Series
SS Preferred Shares shall cease to accrue and such shares shall not be
outstanding for any purpose whatsoever.
(f) Preference Value in Liquidation-The amount payable with respect to
each Series SS Preferred Share in the event of either voluntary or involuntary
liquidation of the Corporation shall be $100.00, plus a sum equal to the amount
of all dividends accrued and unpaid thereon.
TT. $5.00 Cumulative Convertible and Redeemable Voting Series TT Preferred
Shares, $.01 par value, Liquidation Value $100.00 Per Share
(a) Designation-The designation of the series of Preferred Shares
created by this resolution shall be "$5.00 Cumulative Convertible and Redeemable
Voting Series TT Preferred Shares" (hereinafter referred to as the "Series TT
Preferred Shares").
(b) Dividends-Each holder of a Series TT Preferred Share shall be
entitled to receive, when, as and if declared by the board of directors of the
Corporation, out of funds of the Corporation legally available therefor,
cumulative dividends during each fiscal quarter to the extent set forth below.
Such dividends shall be cumulative from and shall commence to accrue (whether or
not declared) on the date of original issuance of such Series TT Preferred
Shares (the "Issue Date"), at a per annum dividend rate of five dollars ($5.00)
per share.
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<PAGE>
(c) Redemption-
(1) On or after the tenth anniversary of the Issue Date, the
Series TT Preferred Shares shall be redeemable, in whole or in part
from time to time, at the option of the Corporation, on a date (the
"Redemption Date") which is the first business day after a dividend
payment date, pursuant to a notice as provided in subparagraph (c)(2)
hereof, at a redemption price (the "Redemption Price") equal to the sum
of (A) $100.00 for each Series TT Preferred Share called for redemption
plus (B) all dividends accrued and unpaid thereon through the
Redemption Date. The Redemption Price payable on any Redemption Date
shall be payable (i) in cash (by certified check), or (ii) by the
issuance of Common Shares of the Corporation to the record holder of
such Series TT Preferred Shares being redeemed. In the event that the
Corporation elects to pay the Redemption Price by issuing its Common
Shares, the number of Common Shares to be issued shall be calculated
(and rounded to the nearest whole share) based upon the arithmetical
average of the closing price on the American Stock Exchange (or, if the
Corporation's Common Shares are not listed on the American Stock
Exchange (in order if more than one applies), the closing price of such
Common Shares on any national securities exchange or on any regional
securities exchange, the highest bid price quoted through the National
Association of Securities Dealers Automated Quotation System, or the
highest bid price reported by dealers in the over-the-counter market)
of the Corporation's Common Shares for the thirty (30) trading days
ending on the third trading day prior to the Redemption Date. If a
holder, subsequent to receiving a notice of redemption of such holder's
Series TT Preferred Shares and at least fifteen (15) days prior to the
Redemption Date, properly elects to convert any Series TT Preferred
Shares, then the number of shares to be redeemed from such holder on
such Redemption Date shall be reduced by the lesser of (x) the number
of Series TT Preferred Shares called for redemption from such holder
and (y) the number of such shares converted by such holder.
(2) Notice of an election under the redemption provision in
subparagraph (c)(1) above shall be mailed (by registered mail, return
receipt requested) to each holder of Series TT Preferred Shares to be
redeemed at the address appearing on the records of the Corporation not
less than sixty (60) days prior to the Redemption Date. If, on or
before the Redemption Date specified in such notice, the funds or
Common Shares necessary for such redemption shall have been set aside
by the Corporation so as to be available for payment to the holder of
Series TT Preferred Shares so called for redemption upon such holder's
surrender of such Series TT Preferred Shares to the Corporation, then,
notwithstanding that any certificate representing Series TT Preferred
Shares so called for redemption shall not have been surrendered for
cancellation, the dividends thereon shall cease to accrue from and
after the Redemption Date, and all rights with respect to such Series
TT Preferred Shares so called for redemption, including any right to
vote or otherwise participate in the determination of any proposed
corporate action, shall terminate at the close of business on such
Redemption Date, except only the right of the holder to receive the
Redemption Price therefor, but without interest.
(3) Each such notice of redemption shall state:
(A) the Redemption Date;
(B) the number of Series TT Preferred Shares to be
redeemed and, if less than all the shares held by such holder
are to be redeemed from such holder, the number of shares to
be redeemed from such holder (subject, if applicable, to the
right of the holder to convert such shares prior to the
Redemption Date);
(C) whether the Redemption Price will be paid in cash
(by certified check) or by the issuance of Common Shares of
the Corporation;
(D) the place where certificates for such shares are
to be surrendered for payment of the Redemption Price; and
(E) that dividends on the shares to be redeemed shall
cease to accrue on such Redemption Date.
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<PAGE>
(4) On or after a Redemption Date, each holder of shares of
Series TT Preferred Shares to be redeemed shall present and surrender
the certificate or certificates for such shares to the Corporation at
the place designated in such notice and thereupon the Redemption Price
of such shares shall be paid to or on the order of the person whose
name appears on such certificate or certificates as the owner thereof
and each surrendered certificate shall be canceled. In case fewer than
all the shares represented by such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares. From
and after a Redemption Date (unless the Corporation shall default in
payment of the Redemption Price) all dividends on the Series TT
Preferred Shares designated for redemption in such notice shall cease
to accrue, and all rights of the holders thereof as shareholders of the
Corporation, except the right to receive the Redemption Price thereof,
without interest, upon the surrender of certificates representing the
same, shall cease and terminate and such shares shall not thereafter be
transferred (except with the consent of the Corporation) on the books
of the Corporation and such shares shall not be deemed to be
outstanding for any purpose whatsoever.
(d) Voting Rights-
(1) With respect to all matters, each holder of Series TT
Preferred Shares shall be entitled to one vote for each share of such
stock standing in the name of the holder on the books of the
Corporation.
(2) With respect to the election of directors, the holders of
Series TT Preferred Shares shall have class voting rights (voting
together with the holders of (A) other Preferred Shares that are
entitled to vote thereon and that were issued after October 31, 1981,
and (B) Series A Common Shares) to the extent provided in Article IV of
the Restated Certificate of Incorporation of the Corporation.
(e) Conversion-
(1) At any time and from time to time for the period
commencing on the Issue Date and terminating on the tenth anniversary
of the Issue Date, any holder of Series TT Preferred Shares may convert
all or any portion of the Series TT Preferred Shares held by such
holder into Common Shares at a conversion ratio (subject to adjustment
as set forth below) of 1.818 Common Shares for each Series TT Preferred
Share so converted; provided, however, that, in the case of Series TT
Preferred Shares called for redemption, the right of the holder thereof
to convert such shares shall expire fifteen (15) days prior to the
Redemption Date. A holder of Series TT Preferred Shares shall be
entitled to receive in exchange therefor certificates for the fully
paid and non-assessable Common Shares of the Corporation at the rate
aforesaid (with the aggregate number of such Common Shares rounded to
the nearest whole share) within fifteen (15) days following
presentation and surrender by such holder to the Corporation at its
offices of the certificates representing the Series TT Preferred Shares
to be converted (the "Conversion Date"), all under suitable regulations
(which shall not be inconsistent with the provisions hereof, which
shall not materially impair the rights of the holder, and of which the
holder shall receive advance notice) to be prescribed by the board of
directors of the Corporation. Conversion of Series TT Preferred Shares
in the manner aforesaid shall not affect the right of the converting
holder thereof to receive (on the Conversion Date if such dividends
shall be legally payable by the Corporation on such date, or as
promptly after the Conversion Date as such dividends shall be legally
payable) dividends accrued but unpaid thereon as of any dividend
payment date prior to the Conversion Date.
(2) The number of Common Shares to be exchanged for each
Series TT Preferred Share that is converted pursuant to subparagraph
(e)(1) or redeemed in accordance with subparagraph (c)(1) shall be
subject to adjustment from time to time as set forth in clauses (A) and
(B) of this subparagraph (2):
(A) In the event the Corporation shall (i) pay a
dividend on its Common Shares in shares of the Corporation,
(ii) subdivide its outstanding Common Shares, (iii) combine
the outstanding Common Shares into a smaller number of shares
or (iv) issue by reclassification of its Common Shares
(whether pursuant to a merger or consolidation or otherwise)
any shares of the Corporation, then the holder of each Series
TT Preferred Share shall be entitled to receive in exchange
for such share upon the conversion or redemption thereof the
number of shares of the Corporation which such holder would
have owned or would have been entitled to receive after the
happening of any of the events described above had such share
been converted immediately prior to the happening of such
event. The adjustments provided for in
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<PAGE>
this clause (A) shall be cumulative if more than one event
requiring an adjustment shall occur between the Issue Date and
the Conversion Date or Redemption Date, as the case may be.
(B) No adjustment pursuant to this paragraph (e)
shall be required unless such adjustment would require an
increase or decrease in such rate of at least one-tenth (1/10)
of a Common Share; provided, however, that any adjustments
which by reason of this clause (B) are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment.
(C) Promptly after any adjustment pursuant to this
paragraph (e), the Corporation shall give written notice
thereof to all holders of Series TT Preferred Shares, setting
forth in reasonable detail and certifying the calculation of
such adjustment.
(3) The Corporation shall at all times reserve and keep
available out of its authorized Common Shares, solely for the purpose
of issuance upon conversion of Series TT Preferred Shares as herein
provided, such number of Common Shares as shall then be issuable upon
the conversion of all outstanding Series TT Preferred Shares.
(4) Fractional Common Shares shall not be issued upon
conversion of Series TT Preferred Shares, nor shall cash adjustments be
made for fractional shares upon such conversion.
(5) For purposes of this paragraph (e), the term "Common
Shares" shall mean (A) the class of stock designated as the Common
Shares of the Corporation on the date this Statement is filed with the
Delaware Secretary of State, or (B) any other class of stock resulting
from successive changes or reclassification of such class consisting
solely of a change in par value, or a change from no par value to par
value.
(6) Each notice of conversion shall state the number of Series
TT Preferred Shares to be converted, if less than all the shares held
by such holder. In case fewer than all the shares represented by such
certificate are converted, a new certificate shall be issued
representing the unconverted shares. From and after the Conversion Date
(unless the Corporation shall default in issuing the Common Shares on
the Conversion Date), all dividends on such converted shares of Series
TT Preferred Shares shall cease to accrue and such shares shall not be
outstanding for any purpose whatsoever.
(f) Preference Value in Liquidation-The amount payable with respect to
each Series TT Preferred Share in the event of either voluntary or involuntary
liquidation of the Corporation shall be $100.00, plus a sum equal to the amount
of all dividends accrued and unpaid thereon.
* * * * * * * *
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<PAGE>
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
TELEPHONE AND DATA SYSTEMS, INC.
TELEPHONE AND DATA SYSTEMS, INC., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:
FIRST: That the board of directors by majority vote, at a
meeting duly called at which a quorum was present, adopted a resolution
declaring advisable and approving an amendment to the Restated Certificate of
Incorporation, which is attached hereto as Exhibit A.
SECOND: Pursuant to Section 228 of the Delaware General
Corporation Law, the adoption of the amendment attached hereto as Exhibit A was
duly approved by the shareholders of the Corporation.
THIRD: That the aforesaid amendment was duly adopted
in accordance with the applicable provisions of ss.242 and ss.228 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Telephone and Data Systems, Inc. has
caused this certificate to be signed by its president this 10th day of July,
1998.
TELEPHONE AND DATA SYSTEMS, INC.
By: /s/ LeRoy T. Carlson, Jr.
--------------------------------
LeRoy T. Carlson, Jr.
President
<PAGE>
EXHIBIT A
1. The Restated Certificate of Incorporation is hereby amended to add
paragraph (g) to Section B.8 of Article IV thereof as follows:
"(g) The Corporation shall not merge with or consolidate with any other
corporation or other entity in a transaction which requires a vote of
the stockholders of the Corporation under the DGCL unless, in addition
to the vote required by the DGCL, such merger or consolidation is also
approved by holders of a majority of the Common Shares and the Series A
Common Shares, each voting separately as a class."
2. Paragraph 3 of Section A of Article IV of the Restated Certificate
of Incorporation is hereby amended and restated in its entirety to read as
follows:
"3. The number of authorized Special Common Shares, Cellular Group
Common Shares, Telecom Group Common Shares, Aerial Group Common Shares
or Undesignated Shares may be increased or decreased at any time or
from time-to-time (but not below the number of such shares then
outstanding in such class, respectively) by the affirmative vote of the
holders of a majority of the voting power of shares of capital stock of
the Corporation entitled to vote on all matters (not including shares
entitled to vote only in the election of directors or as otherwise
required by law, including Section 242(b)(2) of the DGCL) pursuant to
paragraph 8(c) of Section B of this Article IV."
3. Paragraph (f) of Section B.17 of Article IV of the Restated
Certificate of Incorporation is hereby deleted, and paragraphs (g) and (h)
thereof are hereby redesignated as paragraphs (f) and (g), respectively.
<PAGE>
