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CERTIFICATE OF DESIGNATION
OF THE VOTING POWERS, DESIGNATION,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF THE
5% CUMULATIVE PARTICIPATING CONVERTIBLE
PREFERRED STOCK, SERIES A OF
NTL INCORPORATED
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PURSUANT TO SECTION 151(g) OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
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The undersigned, Executive Vice President, General Counsel and
Secretary of NTL Incorporated, a Delaware corporation (the "Corporation"),
HEREBY CERTIFIES that the Board of Directors, in accordance with Article FOURTH,
Section B of the Corporation's Restated Certificate of Incorporation and Section
151(g) of the Delaware General Corporation Law (the "DGCL"), has authorized the
creation of the series of Preferred Stock hereinafter provided for and has
established the dividend, redemption, conversion and voting rights thereof and
has adopted the following resolution, creating the following new series of the
Corporation's Preferred Stock:
"BE IT RESOLVED that, pursuant to authority expressly granted to the
Board of Directors by the provisions of Article FOURTH, Section B of the
Restated Certificate of Incorporation of the Corporation and Section 151(g) of
the DGCL, there is hereby created and authorized the issuance of a new series of
the Corporation's Preferred Stock, par value $.01 per share ("Preferred Stock"),
with the following powers, designations, dividend rights, voting powers, rights
on liquidation, conversion rights, redemption rights and other preferences and
relative, participating, optional or other special rights and with the
qualifications, limitations or restrictions on the shares of such series (in
addition to the powers, designations, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereof set forth in the Restated Certificate of Incorporation that
are applicable to each series of Preferred Stock) hereinafter set forth.
(1) Number and Designation. 750,000 shares of the Preferred Stock of
the Corporation shall be designated as 5% Cumulative Participating Convertible
Preferred Stock, Series A (the "5% Preferred Stock") and no other shares of
Preferred Stock shall be designated as 5% Preferred Stock.
(2) Definitions. For purposes of the 5% Preferred Stock, the
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following terms shall have the meanings indicated:
"Additional Preferred" shall have the meaning set forth in paragraph
(4)(a) hereof.
"All But One Outstanding Share" shall have the meaning set forth in
paragraph (6)(c) hereof.
"Bankruptcy Event" shall mean any of the following: (I) a court
having jurisdiction in the premises enters a decree or order for (A)
relief in respect of any Major Entity in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereinafter
in effect, (B) appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of any Major Entity or for all
or substantially all of the property and assets of any Major Entity or (C)
the winding up or liquidation of the affairs of any Major Entity; or (II)
any Major Entity (A) commences a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereinafter in effect,
or consents to the entry of an order for relief in an involuntary case
under any such law, (B) consents to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of any Major Entity, or for all or
substantially all of the property and assets of any Major Entity or (C)
effects any general assignment for the benefit of creditors.
"Board of Directors" shall mean the board of directors of the
Corporation. Except as such term is used in paragraph (9), "Board of
Directors" shall also mean the Executive Committee, if any, of such board
of directors or any other committee duly authorized by such board of
directors to perform any of its responsibilities with respect to the 5%
Preferred Stock.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.
"Common Stock" shall mean the Corporation's Common Stock, par value
$.01 per share.
"Constituent Person" shall have the meaning set forth in paragraph
(8)(e)(i) hereof.
"Conversion Rate" shall have the meaning set forth in paragraph
(8)(a) hereof.
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"Current Market Price" of publicly traded shares of Common Stock or
any other class of capital stock or other security of the Corporation or
any other issuer for any day shall mean the last reported sale price for
such security on the principal exchange or quotation system on which such
security is listed or traded. If the security is not admitted for trading
on any national securities exchange or the Nasdaq National Market,
"Current Market Price" shall mean the average of the last reported closing
bid and asked prices reported by the Nasdaq as furnished by any member in
good standing of the National Association of Securities Dealers, Inc.,
selected from time to time by the Corporation for that purpose or as
quoted by the National Quotation Bureau Incorporated. In the event that no
such quotation is available for such day, the Current Market Price shall
be the average of the quotations for the last five Trading Days for which
a quotation is available within the last 30 Trading Days prior to such
day. In the event that five such quotations are not available within such
30-Trading Day period, the Board of Directors shall be entitled to
determine the Current Market Price on the basis of such quotations as it
reasonably considers appropriate.
"Determination Date" shall have the meaning set forth in paragraph
(8)(d)(ii) hereof.
"Dividend Payment Date" shall mean September 30, December 31,
March 31 and June 30 of each year, commencing on September 30, 1999;
provided, however, that if any Dividend Payment Date falls on any day
other than a Business Day, the dividend payment due on such Dividend
Payment Date shall be paid on the Business Day immediately following such
Dividend Payment Date.
"Dividend Periods" shall mean quarterly dividend periods commencing
on September 30, December 31, March 31 and June 30 of each year
and ending on and including the day preceding the first day of the next
succeeding Dividend Period (other than the initial Dividend Period which
shall commence on the Issue Date and end on and include September 30,
1999).
"Exchange Act"" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulation thereunder.
"Expiration Time" shall have the meaning set forth in paragraph
(8)(d)(v) hereof.
"5% Preferred Stock" shall have the meaning set forth in paragraph
(1) hereof.
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"5-1/4% Preferred" shall have the meaning set forth in paragraph
(3)(d) hereof.
"5-1/4% Series A" shall have the meaning set forth in paragraph
(3)(d) hereof.
"Investment Securities" shall mean any of the following: (a) shares
of Common Stock, and (b) shares of 5% Preferred Stock. For purposes of
calculating ownership of Investment Securities, each share of Common Stock
equals one Investment Security (adjusted for stock dividends, stock
splits, reclassifications or similar transactions that have occurred since
the Issue Date), and each share of 5% Preferred Stock equals eight
Investment Securities, adjusted in accordance with adjustments to the
Conversion Rate as provided in paragraph (8)(d).
"Issue Date" shall mean the date on which shares of 5% Preferred
Stock are first issued.
"Junior Securities" shall have the meaning set forth in paragraph
(3)(c) hereof.
"Junior Securities Distribution" shall have the meaning set forth in
paragraph (4)(f) hereof.
"Liquidation Right" shall mean, for each share of 5% Preferred
Stock, the greater of (i) an amount equal to $1,000 per share, plus an
amount equal to all dividends (whether or not earned or declared) accrued
and unpaid thereon to the date of final distribution to such holders, and
(ii) the amount that would be received in liquidation following conversion
of a share of 5% Preferred Stock into Common Stock.
"Major Entity" shall mean any of the Corporation, NTL Communications
Corp., Diamond Cable Communications Limited, Diamond Holdings Limited, NTL
(Bermuda) Limited or any Significant Subsidiary.
"Mandatory Redemption Date" shall have the meaning set forth in
paragraph (6)(c) hereof.
"Mandatory Redemption Obligation" shall have the meaning set forth
in paragraph (6)(d) hereof.
"Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
securities market regulated by the National Association of Securities
Dealers, Inc.
"Nasdaq National Market" shall have the meaning set forth in Rule
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4200(a)(23) of the rules of the National Association of Securities
Dealers, Inc.
"9.9% Series A Preferred" shall have the meaning set forth in
paragraph (3)(d) hereof.
"9.9% Series B Preferred" shall have the meaning set forth in
paragraph (3)(d) hereof.
"non-electing share" shall have the meaning set forth in paragraph
(8)(e)(i) hereof.
"NYSE" means the New York Stock Exchange.
"outstanding", when used with reference to shares of stock, shall
mean issued shares, excluding shares held by the Corporation or a
subsidiary.
"Parity Securities" shall have the meaning set forth in paragraph
(3)(b) hereof.
"Person" shall mean any individual, partnership, association, joint
venture, corporation, business, trust, joint stock company, limited
liability company, any unincorporated organization, any other entity, a
"group" of such persons, as that term is defined in Rule 13d-5(b) under
the Exchange Act, or a government or political subdivision thereof.
"Preferred Shares" has the meaning set forth in paragraph (9)(c).
"Preferred Stock" shall have the meaning set forth in the first
resolution above.
"Purchase Shares" shall have the meaning set forth in paragraph
(8)(d)(v) hereof.
"Qualified Holding Condition" means France Telecom S.A., a societe
anonyme formed under the laws of France, or an affiliate, is the holder of
at least 6,527,027 Investment Securities, provided that this number shall
be adjusted in accordance with the adjustments made to the components of
Investment Securities, as set forth above.
"Record Date" shall have the meaning set forth in paragraph
(8)(d)(iv) hereof.
"Relevant Compounding Factor" shall mean, with respect to each share
of 5% Preferred Stock, upon initial issuance 1.00, and shall on each
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Dividend Payment Date be increased to equal the product of the Relevant
Compounding Factor in effect immediately prior to such Dividend Payment
Date and 1.0125.
"Rights" shall have the meaning set forth in paragraph (11) hereof.
"Securities" shall have the meaning set forth in paragraph
(8)(d)(iii) hereof.
"Senior Securities" shall have the meaning set forth in paragraph
(3)(a) hereof.
"set apart for payment" shall be deemed to include, without any
action other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which indicates,
pursuant to a declaration of dividends or other distribution by the Board
of Directors, the allocation of funds to be so paid on any series or class
of capital stock of the Corporation; provided, however, that if any funds
for any class or series of Junior Securities or any class or series of
Parity Securities are placed in a separate account of the Corporation or
delivered to a disbursing, paying or other similar agent, then "set apart
for payment" with respect to the 5% Preferred Stock shall mean placing
such funds in a separate account or delivering such funds to a disbursing,
paying or other similar agent, as the case may be.
"Significant Subsidiary" shall have the meaning given to such term
in Regulation S-X under the Exchange Act.
"13% Preferred" shall have the meaning set forth in paragraph (3)(d)
hereof.
"Trading Day" shall mean any day on which the securities in question
are traded on the NYSE, or if such securities are not listed or admitted
for trading on the NYSE, on the principal national securities exchange on
which such securities are listed or admitted, or if not listed or admitted
for trading on any national securities exchange, on the Nasdaq National
Market, or if such securities are not quoted thereon, in the applicable
securities market in which the securities are traded.
"Transaction" shall have the meaning set forth in paragraph
(8)(e)(i) hereof.
"Trigger Event" shall have the meaning set forth in paragraph (9)(b)
hereof.
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"Trigger Event Cure" shall have the meaning set forth in paragraph
(9)(b) hereof.
"25-Day Average Market Price" shall mean, for any security, the
volume-weighted average of the Current Market Prices of that security for
the twenty-five Trading Days immediately preceding the date of
determination.
(3) Rank. Any class or series of stock of the Corporation shall be
deemed to rank:
(a) prior to the 5% Preferred Stock, either as to the payment of
dividends or as to distribution of assets upon liquidation, dissolution or
winding up, or both, if the holders of such class or series shall be entitled by
the terms thereof to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, in preference or priority to the holders
of 5% Preferred Stock ("Senior Securities");
(b) on a parity with the 5% Preferred Stock, either as to the
payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and
(c) junior to the 5% Preferred Stock, either as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up, or both, if such stock or series shall be Common Stock or if the
holders of the 5% Preferred Stock shall be entitled to receipt of dividends, and
of amounts distributable upon liquidation, dissolution or winding up, in
preference or priority to the holders of shares of such stock or series ("Junior
Securities").
(d) Each of (i) the 13% Series B Senior Redeemable Exchangeable
Preferred Stock (the "13% Preferred") and (ii) the 5-1/4% Convertible Preferred
Stock, Series A, (the "5-1/4% Series A") and any dividends paid on the 5-1/4%
Series A in accordance with its terms, to the extent that such dividends are
paid in preferred stock having terms substantially identical to the 5-1/4%
Series A and any dividends paid on preferred stock issued as in-kind dividends
thereon, to the extent such dividends are paid in preferred stock having terms
substantially identical to the 5-1/4% Series A (the 5-1/4% Series A and all such
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in-kind dividends being hereinafter referred to as the "5-1/4% Preferred") is a
Senior Security. Each of the 9.9% Non-Voting Mandatorily Redeemable Preferred
Stock, Series A ("9.9% Series A Preferred"), and 9.9% Non-Voting Mandatorily
Redeemable Preferred Stock, Series B ("9.9% Series B Preferred"), is a Junior
Security. One or more classes of Additional Preferred (as defined below) shall
be Parity Securities; provided, however, that there shall be no issue of other
Senior Securities, Parity Securities or rights or options exercisable for or
convertible into any such securities, except as approved by the holders of the
5% Preferred Stock pursuant to paragraph 9(f).
(e) The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.
(4) Dividends. (a) Subject to paragraph (8)(b)(ii), the holders of
shares of 5% Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available for the
payment of dividends, dividends at the quarterly rate of $12.50 per share
(assuming a $1,000.00 face amount) payable in cash, shares of Common Stock (such
Common Stock for this purpose to be assigned a value equal to the 25-Day Average
Market Price as of the record date for such Dividend Payment Date) or additional
shares of Preferred Stock of a class to be designated by the Board of Directors
having terms substantially identical to the 5% Preferred Stock except as
follows: (A) the Conversion Rate (as set forth in Section 8(a)) on such
Preferred Stock initially shall be the quotient resulting from the division of
the Conversion Rate (as then in effect on the 5% Preferred Stock) by the
Relevant Compounding Factor (except that for purposes of additional shares of
Preferred Stock payable as a dividend for the initial Dividend Period, the
Conversion Rate shall be the quotient resulting from the division of the
Conversion Rate (as then in effect) by [(90 - (# days in initial Dividend
Period)/90) x Relevant Compounding Factor]) and (B) the number of shares of such
Preferred Stock payable as a dividend on any Dividend Payment Date shall
increase for each Dividend Payment Date from the first Dividend Payment Date by
the Relevant Compounding Factor (such classes of Preferred Stock singularly and
collectively, the "Additional Preferred"). All dividends on the 5% Preferred
Stock, in whatever form, shall be payable in arrears quarterly on each Dividend
Payment Date and shall be cumulative from the Issue Date (except that dividends
on Additional Preferred shall accrue from the date such Additional Preferred is
issued or would have been issued in accordance with this Certificate of
Designation if such dividends had been declared), whether or not in any Dividend
Period or Dividend Periods there shall be funds of the Corporation legally
available for the payment of such dividends. Each such dividend shall be payable
to the holders of record of
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shares of the 5% Preferred Stock, as they appear on the stock records of the
Corporation at the close of business on the record date for such dividend. Upon
the declaration of any such dividend, the Board of Directors shall fix as such
record date on the fifth Business Day preceding the relevant Dividend Payment
Date and shall give notice on or prior to the record date of the form of payment
of such dividend. Accrued and unpaid dividends for any past Dividend Payment
Date may be declared and paid at any time, without reference to any Dividend
Payment Date, to holders of record on such record date, not more than 45 days
nor less than five Business Days preceding the payment date thereof, as may be
fixed by the Board of Directors.
(b) In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock shall be entitled to
receive an amount equal to the amount (and in the form of consideration) that
such holders would be entitled to receive if, pursuant to paragraph (8), they
had converted such 5% Preferred Stock fully into Common Stock immediately before
the record date for the payment of any such dividends on Common Stock. Each such
dividend shall be payable to the holders of record of shares of the 5% Preferred
Stock as they appear on the stock records of the Corporation at the close of
business on the record date for such dividend on Common Stock, and the
Corporation shall pay each such dividend on the applicable payment date for such
dividend on the Common Stock.
(c) For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each such Additional
Preferred shall be valued at $1,000.00. Holders of such Additional Preferred
shall be entitled to receive dividends payable at the rates specified in
paragraph (4)(a).
(d) The dividends payable for the initial Dividend Period, or any
other period shorter than a full Dividend Period, on the 5% Preferred Stock
shall accrue daily and be computed on the basis of a 360-day year and the actual
number of days in such period. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the 5%
Preferred Stock that may be in arrears except as otherwise provided herein.
(e) So long as any shares of the 5% Preferred Stock are outstanding,
no dividends, except as described in the next succeeding sentence, shall be
declared or paid or set apart for payment on Parity Securities or Junior
Securities, for any period, nor shall any Parity Securities or Junior Securities
be redeemed, purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of any
such Parity Securities or Junior Securities) by the Corporation (except for
conversion into or exchange into other Parity Securities or Junior Securities,
as the case may be) unless, in each case, (i) full cumulative dividends on all
outstanding shares of the 5% Preferred Stock for all Dividend Periods
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terminating on or prior to the date of such redemption, repurchase or other
acquisition shall have been paid or set apart for payment, (ii) sufficient funds
shall have been paid or set apart for the payment of the dividend for the
current Dividend Period with respect to the 5% Preferred Stock and (iii) the
Corporation is not in default with respect to any redemption of shares of 5%
Preferred Stock by the Corporation pursuant to paragraph (6) below. When
dividends are not fully paid in Common Stock or Additional Preferred or are not
paid in full in cash or a sum sufficient for such payment is not set apart, as
aforesaid, all dividends declared upon shares of the 5% Preferred Stock and all
dividends declared upon Parity Securities shall be declared ratably in
proportion to the respective amounts of dividends accumulated and unpaid on the
5% Preferred Stock and accumulated and unpaid on such Parity Securities.
(f) So long as any shares of the 5% Preferred Stock are outstanding,
no dividends (other than (i) any rights issued pursuant to a shareholder rights
plan as provided in paragraph (11) and (ii) dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Junior Securities) shall be declared or paid or set apart for payment or
other distribution declared or made upon Junior Securities, nor shall any Junior
Securities be redeemed, purchased or otherwise acquired (other than a
redemption, purchase, or other acquisition of shares of Common Stock made for
purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation, directly or
indirectly (except by conversion into or exchange for Junior Securities,
including pursuant to paragraph 4(c) of the 9.9% Series A Preferred and
paragraph 4(d) of the 9.9% Series B Preferred), unless in each case (A) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock and all
other Parity Securities shall have been paid or set apart for payment for all
past Dividend Periods and dividend periods for such other stock, (B) sufficient
funds shall have been paid or set apart for the payment of the dividend for the
current Dividend Period with respect to the 5% Preferred Stock and all other
Parity Securities, (C) the Corporation is not in default with respect to any
redemption of shares of 5% Preferred Stock by the Corporation pursuant to
paragraph (6) below, (D) the Corporation has fully performed its obligations
under paragraphs (4)(b) and (6) hereof.
(5) Liquidation Preference. (a) In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
before any payment or distribution of the assets of the Corporation (whether
capital or surplus) shall be made to or set apart for the holders of Junior
Securities, the holders of the shares of 5% Preferred Stock shall be entitled to
receive the Liquidation Right. If, upon any liquidation, dissolution or winding
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up of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of the shares of 5% Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any Parity Securities, then such assets, or the proceeds thereof,
shall be distributed among the holders of shares of 5% Preferred Stock and any
such other Parity Securities ratably in accordance with the respective amounts
that would be payable on such shares of 5% Preferred Stock and any such other
stock if all amounts payable thereon were paid in full. For the purposes of this
paragraph (5), (i) a consolidation or merger of the Corporation with one or more
corporations, or (ii) a sale or transfer of all or substantially all of the
Corporation's assets, shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of any Parity Securities,
upon any liquidation, dissolution or winding up of the Corporation, after
payment shall have been made in full to the holders of the 5% Preferred Stock,
as provided in this paragraph (5), any other series or class or classes of
Junior Securities shall, subject to the respective terms and provisions (if any)
applying thereto, be entitled to receive any and all assets remaining to be paid
or distributed, and the holders of the 5% Preferred Stock shall not be entitled
to share therein.
(6) Redemption. (a) On and after the first Business Day following
the earlier to occur of (i) the seventh anniversary of the Issue Date or (ii)
the date on which both (A) the 25-Day Average Market Price of the Common Stock
shall have exceeded $150.00 and (B) the fourth anniversary of the Issue Date, to
the extent the Corporation shall have funds legally available for such payment,
the Corporation may redeem at its option shares of 5% Preferred Stock, from time
to time in part, All But One Outstanding Share or, if the Qualified Holding
Condition is not satisfied, in whole, payable at the option of the Corporation
in (A) cash, at a redemption price of $1,000.00 per share, (B) in shares of
Common Stock, at a redemption price of $1,000.00 per share, or (C) in a
combination of cash and Common Stock, at a redemption price based on the
respective combination of consideration, together in each case with accrued and
unpaid dividends thereon, whether or not declared, to, but excluding, the date
fixed for redemption, without interest. For purposes of determining the number
of shares of Common Stock to be issued pursuant to this paragraph (6)(a), the
price per share of Common Stock shall be the 25-Day Average Market Price.
(b) On and after the first Business Day following the tenth
anniversary of the Issue Date, each holder of shares of 5% Preferred Stock shall
have the right to require the Corporation, to the extent the Corporation shall
have funds legally available therefor, to redeem such holder's shares of 5%
Preferred Stock, from time to time in part, All But One Outstanding Share or, if
the Qualified Holding Condition is not satisfied, in whole, at a redemption
price of $1,000.00 per share, payable at the option of the Corporation in cash,
<PAGE> 12
shares of Common Stock or a combination thereof, together with accrued and
unpaid dividends thereon to, but excluding, the date fixed for redemption,
without interest. For purposes of determining the number of shares of the Common
Stock to be issued pursuant to this paragraph (6)(b), the price per share of
Common Stock shall equal the 25-Day Average Market Price. Any holder of shares
of 5% Preferred Stock who elects to exercise its rights pursuant to this
paragraph (6)(b) shall deliver to the Corporation a written notice of election
not less than 20 days prior to the date on which such holder demands redemption
pursuant to this paragraph 6(b), which notice shall set forth the name of the
Holder, the number of shares of 5% Preferred Stock to be redeemed and a
statement that the election to exercise a redemption right is being made
thereby; and, subject to paragraph (10)(d), shall deliver to the Corporation on
or before the date of redemption certificates evidencing the shares of 5%
Preferred Stock to be redeemed, duly endorsed for transfer to the Corporation.
(c) If the Corporation shall not have redeemed all outstanding
shares of 5% Preferred Stock pursuant to paragraphs (6)(a) or (6)(b), on the
twentieth anniversary of the Issue Date (the "Mandatory Redemption Date"), to
the extent the Corporation shall have funds legally available for such payment,
the Corporation shall redeem All But One Outstanding Share of 5% Preferred
Stock, or, if the Qualified Holding Condition is not satisfied, all outstanding
shares of 5% Preferred Stock, at a redemption price of $1,000.00 per share,
payable at the option of the Corporation in cash, shares of Common Stock or a
combination thereof, together with accrued and unpaid dividends thereon to, but
excluding, the Mandatory Redemption Date, without interest. For purposes of
determining the number of shares of the Common Stock to be issued pursuant to
this paragraph (6)(c), the price per share of Common Stock shall be the 25-Day
Average Market Price. For purposes of the 5% Preferred Stock, "All But One
Outstanding Share" means all but one share of 5% Preferred Stock outstanding at
the relevant time. For the avoidance of doubt, so long as the Qualified Holding
Condition is satisfied, at least one share of 5% Preferred Stock shall remain
outstanding in perpetuity. As soon as (i) the Qualified Holding Condition is no
longer satisfied, and (ii) there is only one share of 5% Preferred Stock that
has not been redeemed pursuant to this paragraph (6) or converted pursuant to
paragraph (8), that one outstanding share of 5% Preferred Stock shall be
redeemed, payable, at the option of the holder, in cash or in Common Stock.
(d) If the Corporation is unable or shall fail to discharge its
obligation to redeem all outstanding shares or All But One Outstanding Share of
5% Preferred Stock pursuant to paragraphs 6(b) or 6(c) (each, a "Mandatory
Redemption Obligation"), the Mandatory Redemption Obligation shall be discharged
as soon as the Corporation is able to discharge such Mandatory Redemption
Obligation. If and so long as any Mandatory Redemption Obligation with respect
to the 5% Preferred Stock shall not be fully discharged, the Corporation shall
<PAGE> 13
not (i) directly or indirectly, redeem, purchase, or otherwise acquire any
Parity Security or discharge any mandatory or optional redemption, sinking fund
or other similar obligation in respect of any Parity Securities (except in
connection with a redemption, sinking fund or other similar obligation to be
satisfied pro rata with the 5% Preferred Stock) or (ii) declare or make any
Junior Securities Distribution (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Junior Securities), or, directly or indirectly, discharge any mandatory or
optional redemption, sinking fund or other similar obligation in respect of the
Junior Securities.
(e) Upon any redemption of 5% Preferred Stock, the Corporation shall
pay the redemption price and any accrued and unpaid dividends in arrears to, but
excluding, the applicable redemption date.
(f) For purposes of paragraph (6)(a) only, unless full cumulative
dividends (whether or not declared) on all outstanding shares of 5% Preferred
Stock and any Parity Securities shall have been paid or contemporaneously are
declared and paid or set apart for payment for all Dividend Periods terminating
on or prior to the applicable redemption date and notice has been given in
accordance with paragraph (7), none of the shares of 5% Preferred Stock shall be
redeemed, and no sum shall be set aside for such redemption, unless shares of 5%
Preferred Stock are redeemed pro rata and notice has previously been given in
accordance with paragraph (7).
(7) Procedure for Redemption. (a) If the Corporation shall redeem
shares of 5% Preferred Stock pursuant to paragraph 6(a), notice of such
redemption shall be given by certified mail, return receipt requested, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
redemption date, to each holder of record of the shares to be redeemed at such
holder's address as the same appears on the stock register of the Corporation
and confirmed by facsimile transmission to each holder of record if the
Corporation has been furnished with such facsimile address by the holder(s);
provided, however, that neither the failure to give such notice nor confirmation
nor any defect therein or in the mailing thereof, to any particular holder,
shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice that was mailed in
the manner herein provided shall be conclusively presumed to have been duly
given on the date mailed whether or not the holder receives the notice. Each
such notice shall state: (i) the redemption date; (ii) the number of shares of
5% Preferred Stock to be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of shares to be redeemed from such holder;
(iii) the amount payable, whether such amount shall be paid in Common Stock or
in cash and if the payment is in Common Stock an explanation of the
determination of the amount to be paid; (iv) the place or places where
certificates for such shares are to be surrendered or the notice under paragraph
<PAGE> 14
(10)(d) should be sent for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date, except as otherwise provided herein.
(b) If notice has been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
for the payment of the redemption price of the shares called for redemption and
dividends accrued and unpaid thereon, if any), (i) except as otherwise provided
herein, dividends on the shares of 5% Preferred Stock so called for redemption
shall cease to accrue, (ii) said shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as holders of the 5%
Preferred Stock shall cease (except the right to receive from the Corporation
the redemption price without interest thereon, upon surrender and endorsement
(or a constructive surrender under paragraph (10)(d)) of their certificates if
so required, and to receive any dividends payable thereon).
(c) Upon surrender (including a constructive surrender under
paragraph (10)(d)) in accordance with notice given pursuant to this paragraph
(7) of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid, plus any dividends payable
thereon. If fewer than all the outstanding shares of 5% Preferred Stock are to
be redeemed, the number of shares to be redeemed shall be determined by the
Board of Directors and the shares to be redeemed shall be selected pro rata
(with any fractional shares being rounded to the nearest whole share). In case
fewer than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued, subject to a holder's election under paragraph
(10)(d), representing the surrendered shares without cost to the holder thereof.
(8) Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock shall
have the right, at any time and from time to time, at such holder's option, to
convert any or All But One Outstanding Share or, if the Qualified Holding
Condition is not satisfied, all outstanding shares, of 5% Preferred Stock held
by such holder, but not fractions of shares, into fully paid and non-assessable
shares of Common Stock by surrendering such shares to be converted, such
surrender to be made in the manner provided in paragraph (8)(b) hereof. The
number of shares of Common Stock deliverable upon conversion of each share of 5%
Preferred Stock shall be equal to $1,000.00 divided by 125.00 (such quotient, as
adjusted as provided herein, the "Conversion Rate"). The Conversion Rate is
subject to adjustment from time to time pursuant to paragraph (8)(d) hereof. The
right to convert shares called for redemption pursuant to paragraph 6(a) shall
terminate at the close of business on the date immediately preceding the date
fixed for such redemption unless the Corporation shall default in making payment
of the amount payable upon such redemption, in which case such right of
<PAGE> 15
conversion shall be reinstated. Upon conversion, any accrued and unpaid
dividends on the 5% Preferred Stock at the date of conversion shall be paid to
the holder thereof in accordance with the provisions of paragraph (4), except
that, upon conversion of All But One Outstanding Share or, if the Qualified
Holding Condition is not satisfied, all outstanding shares, of 5% Preferred
Stock held by such holder, all such accrued and unpaid dividends at the date of
conversion shall be paid in Common Stock at the applicable Conversion Rate.
(b) (i) In order to exercise the conversion privilege, the holder of
each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (10)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation to the holders of the 5%
Preferred Stock for such purposes, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Such
notice shall state that the holder has satisfied any legal or regulatory
requirement for conversion, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976; provided, however, that the Corporation
shall use its best efforts in cooperating with such holder to obtain such legal
or regulatory approvals to the extent its cooperation is necessary. Such notice
shall also state the name or names (with address and social security or other
taxpayer identification number, if applicable) in which the certificate or
certificates for Common Stock are to be issued. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such share of
5% Preferred Stock is registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by the holder or the holder's duly authorized attorney and an
amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Corporation demonstrating that such taxes have been paid).
All certificates representing shares of 5% Preferred Stock surrendered for
conversion shall be canceled by the Corporation or the transfer agent.
(ii) Subject to the last sentence of paragraph (8)(a), holders of
shares of 5% Preferred Stock at the close of business on a dividend payment
record date shall not be entitled to receive the dividend payable on such shares
on the corresponding Dividend Payment Date if such holder shall have surrendered
(or made a constructive surrender under paragraph (10)(d)) for conversion such
shares at any time following the preceding Dividend Payment Date and prior to
such Dividend Payment Date.
(iii) Subject to a holders election under paragraph (10)(d), as
promptly as practicable after the surrender (including a constructive surrender
under paragraph (10)(d)) by a holder of the certificates for shares of 5%
Preferred Stock as aforesaid, the Corporation shall issue and shall deliver to
<PAGE> 16
such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this paragraph (8), and any
fractional interest in respect of a share of Common Stock arising on such
conversion shall be settled as provided in paragraph (8)(c). Upon conversion of
only a portion of the shares of 5% Preferred Stock represented by any
certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (10)(d), upon the surrender
(including a constructive surrender under paragraph (10)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares shall no
longer be deemed to be outstanding and all rights of a holder with respect to
such shares so surrendered shall immediately terminate except the right to
receive the Common Stock and other amounts payable pursuant to this paragraph
(8).
(iv) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered pursuant to an election under paragraph (10)(d)) and such notice
received by the Corporation as aforesaid, and the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby at such time
on such date and such conversion shall be into a number of shares of Common
Stock equal to the product of the number of shares of 5% Preferred Stock
surrendered times the Conversion Rate in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered and such notice received by the Corporation.
(c) (i) No fractional shares or scrip representing fractions of
shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion (or deemed surrendered under paragraph (10)(d)) at one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed
<PAGE> 17
on the basis of the aggregate number of shares of 5% Preferred Stock surrendered
(or deemed surrendered under paragraph (10)(d)) for conversion by such holder.
(ii) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered under paragraph (10)(d)) and such notice received by the Corporation
as aforesaid, and the Person or Persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of the
shares of Common Stock represented thereby at such time on such date and such
conversion shall be into a number of shares of Common Stock equal to the product
of the number of shares of 5% Preferred Stock surrendered times the Conversion
Rate in effect at such time on such date, unless the stock transfer books of the
Corporation shall be closed on that date, in which event such Person or Persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such stock transfer books are open,
but such conversion shall be based upon the Conversion Rate in effect on the
date upon which such shares shall have been surrendered (or deemed surrendered
under paragraph (10)(d)) and such notice received by the Corporation.
(d) The Conversion Rate shall be adjusted from time to time as
follows:
(i) If the Corporation shall after the Issue Date (A) declare a
dividend or make a distribution on its Common Stock in shares of its Common
Stock, (B) subdivide its outstanding Common Stock into a greater number of
shares, (C) combine its outstanding Common Stock into a smaller number of
shares, or (D) effect any reclassification of its outstanding Common Stock, the
Conversion Rate in effect on the record date for such dividend or distribution,
or the effective date of such subdivision, combination or reclassification, as
the case may be, shall be proportionately adjusted so that the holder of any
share of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Common Stock that such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such share been converted immediately
prior to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or reclassification. An
adjustment made pursuant to this subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (8)(h)) in the case of a dividend
or distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case of a
subdivision, combination or reclassification. Adjustments in accordance with
this paragraph (8)(d)(i) shall be made whenever any event listed above shall
occur.
<PAGE> 18
(ii) If the Corporation shall after the Issue Date fix a record date
for the issuance of rights or warrants (in each case, other than any rights
issued pursuant to a shareholder rights plan) to all holders of Common Stock
entitling them (for a period expiring within 45 days after such record date) to
subscribe for or purchase Common Stock (or securities convertible into
Common Stock) at a price per share (or, in the case of a right or warrant to
purchase securities convertible into Common Stock, having an effective exercise
price per share of Common Stock, computed on the basis of the maximum number of
shares of Common Stock issuable upon conversion of such convertible securities,
plus the amount of additional consideration payable, if any, to receive one
share of Common Stock upon conversion of such securities) less than the 25-Day
Average Market Price on the date on which such issuance was declared or
otherwise announced by the Corporation (the "Determination Date"), then the
Conversion Rate in effect at the opening of business on the Business Day next
following such record date shall be adjusted so that the holder of each share of
5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to such record date by (II) a
fraction, the numerator of which shall be the sum of (A) the number of shares of
Common Stock outstanding on the close of business on the Determination Date and
(B) the number of additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants (or in the case of a right or
warrant to purchase securities convertible into Common Stock, the aggregate
number of additional shares of Common Stock into which the convertible
securities so offered are initially convertible), and the denominator of which
shall be the sum of (A) the number of shares of Common Stock outstanding on the
close of business on the Determination Date and (B) the number of shares that
the aggregate proceeds to the Corporation from the exercise of such rights or
warrants for Common Stock would purchase at such 25-Day Average Market Price on
such date (or, in the case of a right of warrant to purchase securities
convertible into Common Stock, the number of shares of Common Stock obtained by
dividing the aggregate exercise price of such rights or warrants for the maximum
number of shares of Common Stock issuable upon conversion of such convertible
securities, plus the aggregate amount of additional consideration payable, if
any, to convert such securities into Common Stock, by such 25-Day Average Market
Price). Such adjustment shall become effective immediately after the opening of
business on the Business Day next following such record date (except as provided
in paragraph (8)(h)). Such adjustment shall be made successively whenever such a
record date is fixed. In the event that after fixing a record date such rights
or warrants are not so issued, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect if such record date had not been
fixed. In determining whether any rights or warrants entitle the holders of
Common Stock to subscribe for or purchase shares of Common Stock at less than
such 25-Day Average Market Price, there shall be taken into account any
<PAGE> 19
consideration received by the Corporation upon issuance and upon exercise of
such rights or warrants, the value of such consideration, if other than cash, to
be determined by the Board of Directors in good faith. In case any rights or
warrants referred to in this subparagraph (ii) shall expire unexercised after
the same have been distributed or issued by the Corporation (or, in the case of
rights or warrants to purchase securities convertible into Common Stock once
exercised, the conversion right of such securities shall expire), the Conversion
Rate shall be readjusted at the time of such expiration to the Conversion Rate
that would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
(iii) If the Corporation shall fix a record date for the making of a
distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (8)(d)(i)) or rights or warrants (in each case, other than
any rights issued pursuant to a shareholder rights plan) to subscribe for or
purchase any of its securities (excluding those rights and warrants issued to
all holders of Common Stock entitling them (for a period expiring within 45 days
after such record date) to subscribe for or purchase Common Stock or securities
convertible into shares of Common Stock, which rights and warrants are referred
to in and treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) called the "Securities"), then in each
such case the Conversion Rate shall be adjusted so that the holder of each share
of 5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to the close of business on such
record date by (II) a fraction, the numerator of which shall be the 25-Day
Average Market Price per share of the Common Stock on such record date, and the
denominator of which shall be the 25-Day Average Market Price per share of the
Common Stock on such record date less the then-fair market value (as determined
by the Board of Directors in good faith, whose determinations shall be
conclusive) of the portion of the assets, shares of its capital stock or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that after
fixing a record date such distribution is not so made, the Conversion Rate shall
be readjusted to the Conversion Rate which would then be in effect if such
record date had not been fixed. Such adjustment shall become effective
immediately at the opening of business on the Business Day next following
(except as provided in paragraph (8)(h)) the record date for the determination
of shareholders entitled to receive such distribution. For the purposes of this
subparagraph (iii), the distribution of a Security, which is distributed not
only to the holders of the Common Stock on the date fixed for
<PAGE> 20
the determination of shareholders entitled to such distribution of such
Security, but also is distributed with each share of Common Stock delivered to a
Person converting a share of 5% Preferred Stock after such determination date,
shall not require an adjustment of the Conversion Rate pursuant to this
subparagraph (iii); provided, however, that on the date, if any, on which a
Person converting a share of 5% Preferred Stock would no longer be entitled to
receive such Security with a share of Common Stock (other than as a result of
the termination of all such Securities), a distribution of such Securities shall
be deemed to have occurred and the Conversion Rate shall be adjusted as provided
in this subparagraph (iii) (and such day shall be deemed to be "the date fixed
for the determination of shareholders entitled to receive such distribution" and
"the record date" within the meaning of the three preceding sentences). If any
rights or warrants referred to in this subparagraph (iii) shall expire
unexercised after the same shall have been distributed or issued by the
Corporation, the Conversion Rate shall be readjusted at the time of such
expiration to the Conversion Rate that would have been in effect if no
adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.
(iv) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per share that,
together with the aggregate of the per share amounts of any other cash
distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjustment pursuant to paragraph
8(e) is made), then, in such case, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date for the
cash dividend or distribution by a fraction the numerator of which shall be the
Current Market Price of a share of the Common Stock on the Record Date and the
denominator shall be such Current Market Price less the per share amount of cash
so distributed during the 12-month period applicable to one share of Common
Stock, such adjustment to be effective immediately prior to the opening of
business on the Business Day following the Record Date; provided, however, that
in the event the denominator of the foregoing fraction is zero or negative, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
holder of 5% Preferred Stock shall have the right to receive upon conversion, in
addition to the shares of Common Stock to which the holder is entitled, the
amount of cash such holder would have received had such holder converted each
<PAGE> 21
share of 5% Preferred Stock at the beginning of the 12-month period. In the
event that such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be in
effect if such dividend or distribution had not been declared. Notwithstanding
the foregoing, if any adjustment is required to be made as set forth in this
paragraph (8)(d)(iv), the calculation of any such adjustment shall include the
amount of the quarterly cash dividends paid during the 12-month reference period
only to the extent such dividends exceed the regular quarterly cash dividends
paid during the 12 months preceding the 12-month reference period. For purposes
of this paragraph (8)(d)(iv), "Record Date" shall mean, with respect to any
dividend or distribution in which the holders of Common Stock have the right to
receive cash, the date fixed for determination of shareholders entitled to
receive such cash.
In the event that at any time cash distributions to holders of
Common Stock are not paid equally on all series of Common Stock, the provisions
of this paragraph 8(d)(iv) will apply to any cash dividend or cash distribution
on any series of Common Stock otherwise meeting the requirements of this
paragraph, and shall be deemed amended to the extent necessary so that any
adjustment required will be made on the basis of the cash dividend or cash
distribution made on any such series.
(v) In case of the consummation of a tender or exchange offer (other
than an odd-lot tender offer) made by the Corporation or any subsidiary of the
Corporation for all or any portion of the outstanding shares of Common Stock to
the extent that the cash and fair market value (as determined in good faith by
the Board of Directors of the Corporation, whose determination shall be
conclusive and shall be described in a resolution of such Board) of any other
consideration included in such payment per share of Common Stock at the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as amended) exceed by more than 5.0%, with any smaller
excess being disregarded in computing the adjustment to the Conversion Rate
provided in this paragraph (8)(d)(v), the first reported sale price per share of
the Common Stock on the Trading Day next succeeding the Expiration Time, then
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
Expiration Time by a fraction the numerator of which shall be the sum of (x) the
fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchase Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchase Shares) on the Expiration Time and the first reported sale price of
<PAGE> 22
the Common Stock on the Trading Day next succeeding the Expiration Time, and the
denominator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time multiplied
by the first reported sale price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such adjustment to become effective immediately
prior to the opening of business on the day following the Expiration Time.
(vi) No adjustment in the Conversion Rate shall be required unless
such adjustment would require a cumulative increase or decrease of at least 1%
in the Conversion Rate; provided, however, that any adjustments that by reason
of this subparagraph (vi) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment until made, and provided
further that any adjustment shall be required and made in accordance with the
provisions of this paragraph (8) (other than this subparagraph (vi)) not later
than such time as may be required in order to preserve the tax-free nature of a
distribution for United States income tax purposes to the holders of shares of
5% Preferred Stock or Common Stock. Notwithstanding any other provisions of this
paragraph (8), the Corporation shall not be required to make any adjustment of
the Conversion Rate for the issuance of any shares of Common Stock pursuant to
any plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional amounts
in shares of Common Stock under such plan. All calculations under this paragraph
(8) shall be made to the nearest dollar or to the nearest 1/1,000 of a share, as
the case may be. Anything in this paragraph (8)(d) to the contrary
notwithstanding, the Corporation shall be entitled, to the extent permitted by
law, to make such adjustments in the Conversion Rate, in addition to those
required by this paragraph (8)(d), as it in its discretion shall determine to be
advisable in order that any stock dividends subdivision of shares,
reclassification or combination of shares, distribution or rights or warrants to
purchase stock or securities, or a distribution of other assets (other than cash
dividends) hereafter made by the Corporation to its shareholders shall not be
taxable.
(vii) In the event that, at any time as a result of shares of any
other class of capital stock becoming issuable in exchange or substitution for
or in lieu of shares of Common Stock or as a result of an adjustment made
pursuant to the provisions of this paragraph (8)(d), the holder of 5% Preferred
Stock upon subsequent conversion shall become entitled to receive any shares of
capital stock of the Corporation other than Common Stock, the number of such
other shares so receivable upon conversion of any shares of 5% Preferred Stock
shall thereafter be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions contained herein.
(e) (i) If the Corporation shall be a party to any transaction
<PAGE> 23
(including without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (8)(d)(i) applies)
(each of the foregoing being referred to herein as a "Transaction"), in each
case as a result of which shares of Common Stock shall be converted into the
right to receive stock, securities or other property (including cash or any
combination thereof), there shall be no adjustment to the Conversion Rate but
each share of 5% Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereafter be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that number
of shares or fraction thereof of Common Stock into which one share of 5%
Preferred Stock was convertible immediately prior to such Transaction, assuming
such holder of Common Stock (i) is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be
("Constituent Person"), or an affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of stock
securities and other property (including cash) receivable upon such Transaction
(provided that if the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction is not the same for each share
of Common Stock of the Corporation held immediately prior to such Transaction by
other than a Constituent Person or an affiliate thereof and in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then for the purpose of this paragraph (8)(e) the kind and amount of stock,
securities and other property (including cash) receivable upon such Transaction
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). The provisions
of this paragraph (8)(e) shall similarly apply to successive Transactions.
(ii) Notwithstanding anything herein to the contrary , if the
Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another recognized securities exchange or automated
quotation system, then the Corporation, by notice to and consultation with the
holders of the 5% Preferred Stock, may cause the exchange of this 5% Preferred
Stock for preferred stock of Holdco having the same terms and conditions as set
forth herein; provided that the rights attaching to the preferred stock of
Holdco shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such
rights effectively giving the same economic rights as the 5% Preferred Stock
(including for these purposes any resultant change in the tax treatment for the
holders of such stock).
<PAGE> 24
(f) If:
(i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock; or
(ii) the Corporation shall authorize the granting to the holders of
the Common Stock of rights or warrants to subscribe for or purchase any
shares of any class or any other rights or warrants; or
(iii) there shall be any subdivision, combination or
reclassification of the Common Stock or any consolidation or merger to
which the Corporation is a party and for which approval of any
shareholders of the Corporation is required, or the sale or transfer of
all or substantially all of the assets of the Corporation as an entirety;
or
(iv) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (8)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock at their addresses as shown on
the stock records of the Corporation, as promptly as possible, but at least ten
days prior to the applicable date hereinafter specified, a notice stating (A)
the date on which a record is to be taken for the purpose of such dividend (or
such other distribution) or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights or warrants are to be determined or (B)
the date on which such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up or
other action is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such subdivision, combination, reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution or winding up. Failure to give
or receive such notice or any defect therein shall not affect the legality or
validity of any distribution, right, warrant subdivision, combination,
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, winding up or other action, or the vote upon any of the foregoing.
(g) Whenever the Conversion Rate is adjusted as herein provided, the
Corporation shall prepare an officer's certificate with respect to such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the effective date of such adjustment and shall mail a copy of such officer's
certificate to the holder of each share of 5% Preferred Stock at such holder's
<PAGE> 25
last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to paragraph (8)(b),
it shall also promptly file with such transfer agent an officer's certificate
setting forth the Conversion Rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment which certificate shall
be conclusive evidence of the correctness of such adjustment.
(h) In any case in which paragraph (8)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (8)(c).
(i) For purposes of this paragraph (8), the number of shares of
Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.
(j) There shall be no adjustment of the Conversion Rate in case of
the issuance of any stock of the Corporation in a reorganization, acquisition or
other similar transaction except as specifically set forth in this paragraph
(8). If any single action would require adjustment of the Conversion Rate
pursuant to more than one subparagraph of this paragraph (8), only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value.
(k) If the Corporation shall take any action affecting the Common
Stock, other than action described in this paragraph (8), that in the opinion of
the Board of Directors materially adversely affects the conversion rights of the
holders of the shares of 5% Preferred Stock, the Conversion Rate may be
adjusted, to the extent permitted by law, in such manner, if any, and at such
time, as the Board of Directors may determine to be equitable in the
circumstances; provided that the provisions of this paragraph (8)(k) shall not
affect any rights the holders of 5% Preferred Stock may have at law or in
equity.
(l) (i) The Corporation covenants that it will at all times reserve
and keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued shares of Common Stock or its issued shares of Common
Stock held in its treasury, or both, for the purpose of effecting conversion of
the 5% Preferred Stock, the full number of shares of Common Stock deliverable
<PAGE> 26
upon the conversion of all outstanding shares of 5% Preferred Stock not
theretofore converted. For purposes of this paragraph (8)(l) the number of
shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of 5% Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.
(ii) The Corporation covenants that any shares of Common Stock
issued upon conversion of the 5% Preferred Stock shall be duly authorized,
validly issued, fully paid and non-assessable. Before taking any action that
would cause an adjustment increasing the Conversion Rate such that the quotient
of $1,000.00 and the Conversion Rate (which quotient initially shall be $125.00)
would be reduced below the then-par value of the shares of Common Stock
deliverable upon conversion of the 5% Preferred Stock, the Corporation will take
any corporate action that, in the opinion of its counsel, may be necessary in
order that the Corporation may validly and legally issue fully paid and
non-assessable shares of Common Stock based upon such adjusted Conversion Rate.
(iii) Prior to the delivery of any securities that the Corporation
shall be obligated to deliver upon conversion of the 5% Preferred Stock, the
Corporation shall comply with all applicable federal and state laws and
regulations which required action to be taken by the Corporation.
(m) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the 5%
Preferred Stock pursuant hereto; provided, however, that the Corporation shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or other securities
or property in a name other than that of the holder of the 5% Preferred Stock to
be converted and no such issue or delivery shall be made unless and until the
Person requesting such issue or delivery has paid to the Corporation the amount
of any such tax or established, to the satisfaction of the Corporation, that
such tax has been paid.
(n) No adjustment in the Conversion Rate need be made for a
transaction referred to in paragraph (8)(d)(i) through (v) above to the extent
that all holders of 5% Preferred Stock are entitled to participate in such
transaction pursuant to paragraph 4(b).
(9) Voting Rights. (a) The holders of record or shares of 5%
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (9) or as otherwise provided by law.
(b) If and whenever either (i) six quarterly dividends (whether or
<PAGE> 27
not consecutive) payable on the 5% Preferred Stock have not been paid in full,
(ii) the Corporation shall have failed to discharge its Mandatory Redemption
Obligation, or (iii) there occurs a Bankruptcy Event (any such event described
in the preceding subparagraphs (i) through (iii) being hereinafter referred to
as a "Trigger Event"), a vote of the holders of shares of 5% Preferred Stock,
voting as a single class, will be required on all matters brought to
shareholders of the Corporation. Whenever all arrears in dividends on the 5%
Preferred Stock then outstanding shall have been paid and dividends thereon for
the current quarterly dividend period shall have been paid or declared and set
apart for payment, the Corporation shall have fulfilled its Mandatory Redemption
Obligation, and all Bankruptcy Events shall have been cured (the "Trigger Event
Cure"), then the right of the holders of the 5% Preferred Stock to vote as
described in the this paragraph 9(b) shall cease (but subject always to the same
provisions for the vesting of such voting rights if any Trigger Event occurs).
(c) In addition to the power to elect a director in accordance with
paragraph (9)(d), upon the occurrence of any Trigger Event, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of 5% Preferred Stock, together with the holders of shares
of every other series of preferred stock (including, without limitation,
Additional Preferred) upon which like rights to vote for the election of two
additional directors have been conferred and are exercisable (resulting from
either the failure to pay dividends or the failure to redeem) (any such other
series is referred to as the "Preferred Shares"), voting as a single class
regardless of series, shall be entitled to elect the two additional directors to
serve on the Board of Directors at any annual meeting of stockholders or special
meeting held in place thereof, or at a special meeting of the holders of 5%
Preferred Stock and the Preferred Shares, called as hereinafter provided.
Whenever all arrears in dividends on the Preferred Shares then outstanding shall
have been paid and dividends thereon for the current quarterly dividend period
shall have been paid or declared and set apart for payment, the Corporation
shall have fulfilled any redemption obligation in respect of the Preferred
Shares, and the Trigger Event Cure has occurred, then the right of the holders
of the 5% Preferred Stock and the Preferred Shares to elect such additional two
directors shall cease (but subject always to the same provisions for the vesting
of such voting rights if any Trigger Event occurs), and the terms of office of
all persons elected as directors by the holders of 5% Preferred Stock and the
Preferred Shares shall forthwith terminate and the number of members of the
Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in holders of shares of 5% Preferred Stock and
the Preferred Shares, the Secretary of the Corporation may, and upon the written
request of any holder of 5% Preferred Stock (addressed to the secretary at the
principal office of the Corporation) shall, call a special meeting of the
holders of the 5% Preferred Stock and of the Preferred Shares for the election
of the two directors to be elected by them as herein provided, such call to be
made by notice similar to that provided in the Bylaws of the Corporation for a
<PAGE> 28
special meeting of the stockholders or as required by law. If any such special
meeting required to be called as above provided shall not be called by the
Secretary of the Corporation within 20 days after receipt of any such request,
then any holder of shares of 5% Preferred Stock may call such meeting, upon the
notice above provided, and for that purpose shall have access to the stock books
of the Corporation. The directors elected at any such special meeting shall hold
office until the next annual meeting of the stockholders or special meeting held
in lieu thereof if such office shall not have previously terminated as above
provided. If any vacancy shall occur among the directors elected by the holders
of the 5% Preferred Stock and the Preferred Shares, a successor shall be elected
by the Board of Directors, upon the nomination of the then-remaining director
elected by the holders of the 5% Preferred Stock and the Preferred Shares or the
successor of such remaining director, to serve until the next annual meeting of
the stockholders or special meeting held in place thereof if such office shall
not have previously terminated as provided above.
(d) (i) In addition to any other rights granted in this paragraph
(9) to elect directors or to vote on any matter submitted to stockholders, all
holders of shares of 5% Preferred Stock, voting separately as a class, shall
have the right to elect one director to serve on the Board of Directors, so long
as the Qualified Holding Condition is satisfied. Immediately upon failure of the
Qualified Holding Condition, this paragraph (9)(d) shall be of no further effect
and the rights granted herein to the holders of the 5% Preferred Stock shall
cease to apply.
(ii) Such voting rights of the holders of shares of 5% Preferred
Stock may be exercised initially at a special meeting called pursuant to
subparagraph (iii) of this paragraph (9)(d) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders, provided that
such voting rights may not be exercised at any meeting unless holders of
one-third of the outstanding shares of 5% Preferred Stock shall be present at
such meeting in person or by proxy. The absence of a quorum of the holders of
Common Stock shall not affect the exercise by the holders of shares of 5%
Preferred Stock of such rights. At any meeting at which the holders of shares of
5% Preferred Stock shall exercise such voting rights initially, they shall have
the right, voting separately as a class, to elect one director to fill one
vacancy in the Board of Directors, if any such vacancy may then exist, or, if
such right is exercised at an annual meeting, to elect one director. If
necessary, the holders of the shares of 5% Preferred Stock shall have the right
to make such increase in the number of members of the Board of Directors as
shall be necessary to permit them to so elect one director.
(iii) Unless the holders of shares of 5% Preferred Stock shall have
previously exercised their right to elect one director, the Board of Directors
shall order, and any stockholder or stockholders owning in the aggregate not
<PAGE> 29
less than 25% of the total number of the shares of 5% Preferred Stock
outstanding may request, the calling of a special meeting of the holders of
shares of 5% Preferred Stock, which meeting shall thereupon promptly be called
by the Secretary of the Corporation. Notice of such meeting and of any annual
meeting at which holders of shares of 5% Preferred Stock are entitled to vote
pursuant to this paragraph (9)(d) shall be given to each holder of record of
shares of 5% Preferred Stock by mailing a copy of such notice to him at his last
address as the same appears on the books of the Corporation. Such meeting shall
be called for a time not earlier than 20 days and not later then 60 days after
such order or request or in default of the calling of such meeting within 60
days after such order or request, such meeting may be called on similar notice
by any stockholder or stockholders owning in the aggregate not less than 25% of
the total number of outstanding shares of 5% Preferred Stock.
(iv) The holders of shares of Common Stock and shares of 5%
Preferred Stock, and other classes or series of stock of the Corporation, if
applicable, shall continue to be entitled to elect all the directors until
holders of the shares of 5% Preferred Stock shall have exercised their right to
elect one director, voting as a separate class, after the exercise of which
right (x) the director so elected by the holders of shares of 5% Preferred Stock
shall continue in office until his successor shall have been elected by such
holders, and (y) any vacancy in the Board of Directors may (except as provided
in paragraph (9)(d)(ii)) be filled by vote of a majority of the remaining
directors theretofore elected by the holders of the class of capital stock which
elected the director whose office shall have become vacant. References in this
paragraph (9)(d)(iv) to directors elected by the holders of a particular class
of capital stock shall include directors elected by such directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(e) Without the written consent of the holders of at least 66-2/3%
in liquidation preference of the outstanding shares of 5% Preferred Stock or the
vote of holders of at least 66-2/3% in liquidation preference of the outstanding
shares of 5% Preferred Stock at a meeting of the holders of 5% Preferred Stock
called for such purpose, the Corporation will not amend, alter or repeal any
provision of the Certificate of Incorporation (by merger or otherwise) so as to
adversely affect the preferences, rights or powers of the 5% Preferred Stock;
provided that any such amendment that changes the dividend payable on, the
Conversion Rate with respect to, or the liquidation preference of the 5%
Preferred Stock shall require the affirmative vote at a meeting of holders of 5%
Preferred Stock called for such purpose or written consent of the holder of each
share of 5% Preferred Stock.
(f) Without the written consent of the holders of at least 66-2/3%
in liquidation preference of the outstanding shares of 5% Preferred Stock or the
vote of holders of at least 66-2/3% in liquidation preference of the outstanding
shares of 5% Preferred Stock at a meeting of such holders called for such
<PAGE> 30
purpose, the Corporation will not issue any additional 5% Preferred Stock or
create, authorize or issue any Parity Securities or Senior Securities or
increase the authorized amount of any such other class or series; provided that
this paragraph 9(f) shall not limit the right of the Corporation to (i) issue
Additional Preferred as dividends pursuant to paragraph 4 or (ii) to issue
Parity Securities or Senior Securities in order to refinance, redeem or refund
the 13% Preferred or the 5-1/4% Preferred, provided that the maximum accrual
value (i.e., the sum of stated value and maximum amount payable in kind over the
term from issuance to first date of mandatory redemption or redemption at the
option of the holder) of such Parity Securities may not exceed the maximum
accrual value of the 13% Preferred or the 5-1/4% Preferred, respectively.
(g) In exercising the voting rights set forth in this paragraph (9),
each share of 5% Preferred Stock shall have one vote per share, except that when
any other series of preferred stock shall have the right to vote with the 5%
Preferred Stock as a single class on any matter, then the 5% Preferred Stock and
other series shall have with respect to such matters one vote per $1,000 of
stated liquidation preference. Except as otherwise required by applicable law or
as set forth herein, the shares of 5% Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers and
the consent of the holders thereof shall not be required for the taking of any
corporate action.
(h) Nothing in this paragraph (9) shall be in derogation of any
rights that a holder of shares of 5% Preferred Stock may have in his capacity as
a holder of shares of Common Stock.
(10) General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are for
convenience of reference only and shall not define, limit or affect any of the
provisions hereof.
(b) If the Corporation shall have failed to declare or pay dividends
as required pursuant to paragraph (4) hereof or shall have failed to discharge
any obligation to redeem shares of 5% Preferred Stock pursuant to paragraph (6)
hereof, the holders of shares of 5% Preferred Stock shall be entitled to
receive, in addition to all other amounts required to be paid hereunder, when,
as and if declared by the Board of Directors, out of funds legally available for
the payment of dividends, cash dividends on the aggregate dividends which the
Corporation shall have failed to declare or pay or the redemption price,
together with accrued and unpaid dividends thereon, as the case may be, at a
rate of 2% per quarter, compounded quarterly, for the period during which the
failure to pay dividends or failure to discharge an obligation to redeem shares
of 5% Preferred Stock shall continue.
<PAGE> 31
(c) The shares of 5% Preferred Stock shall bear the following
legend:
THE SHARES OF PREFERRED STOCK, PAR VALUE $.01, OF THE COMPANY (THE
"PREFERRED STOCK") (AND THE SHARES OF COMMON STOCK, PAR VALUE $.01, OF THE
COMPANY (THE "COMMON STOCK") INTO WHICH THE PREFERRED STOCK MAY BE CONVERTED)
REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND
ANY APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM
REGISTRATION REQUIREMENTS. THE TRANSFER OF THE PREFERRED STOCK (OR COMMON STOCK,
IF THE PREFERRED STOCK HAS BEEN CONVERTED) EVIDENCED BY THIS CERTIFICATE IS
SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE PURCHASE AGREEMENT,
DATED JULY 15, 1999, AS MAY BE AMENDED, AMONG THE CORPORATION AND FRANCE
TELECOM, A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF THE CORPORATION
AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH PREFERRED STOCK UPON
WRITTEN REQUEST TO THE CORPORATION.
THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY BE
CONVERTED INTO COMMON STOCK, PAR VALUE $.01, OF THE COMPANY (THE "COMMON STOCK")
OR REDEEMED IN EXCHANGE FOR COMMON STOCK WITHOUT THE SURRENDER AND EXCHANGE OF
THIS CERTIFICATE FOR CERTIFICATES REPRESENTING SUCH COMMON STOCK. A NOTICE OF
SUCH CONVERSION EVENT, IF ANY, IS ON FILE AT THE EXECUTIVE OFFICES OF THE
CORPORATION AND
<PAGE> 32
WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN
REQUEST TO THE CORPORATION.
The shares of Common Stock issuable upon conversion of the 5%
Preferred Stock shall bear the following legend:
THE SHARES OF COMMON STOCK, PAR VALUE $.01, OF THE COMPANY (THE
"COMMON STOCK") REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD IN
THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND ANY APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
EXEMPTION FROM REGISTRATION REQUIREMENTS. THE TRANSFER OF THE COMMON STOCK
EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER
PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED JULY 15, 1999, AS MAY BE AMENDED,
AMONG THE CORPORATION AND FRANCE TELECOM, A COPY OF WHICH IS ON FILE AT THE
EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE
HOLDER OF SUCH COMMON STOCK UPON WRITTEN REQUEST TO THE CORPORATION.
(d) (i) Whenever in connection with any conversion or redemption of
the 5% Preferred Stock in exchange for Common Stock the holder is required to
surrender certificates representing such shares of 5% Preferred Stock, such
holder may, by written notice to the Corporation and its transfer agent, elect
to retain such certificates. In such case, the certificates so retained by the
holder thereof shall be deemed to represent, at and from the date of such
conversion or redemption, the number of shares of Common Stock issuable upon
such conversion or redemption (subject to paragraph (8)(c), if applicable), and
shall be so reflected upon the books of the Corporation and its transfer agent.
(ii) (A) A holder who has previously elected to retain certificates
representing the 5% Preferred Stock in accordance with paragraph (10)(d)(i) upon
conversion or redemption may subsequently elect to receive certificates
representing the shares of Common Stock issued upon such conversion or
<PAGE> 33
redemption. To receive certificates representing such shares of Common Stock,
the holder of such certificate shall surrender it, duly endorsed or assigned to
the Corporation or in blank, at the office of the Corporation, or to any
transfer agent of the Corporation previously designated by the Corporation for
such purposes, with a written notice of that election.
(B) Unless the certificates to be issued shall be registered in the
same name as the name in which such surrendered certificates are registered,
each certificate so surrendered shall be accompanied by instruments of transfer,
in form satisfactory to the Corporation, duly executed by the holder or the
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). All certificates so surrendered
shall be canceled by the Corporation or the transfer agent.
(C) As promptly as practicable after the surrender by a holder of
such certificates, the Corporation shall issue and shall deliver to such holder,
or on the holder's written order, a certificate or certificates (which
certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock represented by the certificates so
surrendered.
(11) Shareholder Rights Plan. The shares of 5% Preferred Stock shall
be entitled to the benefits of a number of rights issuable under the Rights
Agreement, dated as of October 1, 1993, as amended, between the Company and
Continental Stock Transfer & Trust Company or any successor plan of similar
purpose and effect ("Rights") equal to the number of shares of Common Stock then
issuable upon conversion of the 5% Preferred Stock at the prevailing Conversion
Rate. Any shares of Common Stock deliverable upon conversion of a share of 5%
Preferred Stock or upon payment of a dividend shall be accomplished by a Right."
