As filed with the Securities and Exchange Commission on June 7, 1995.
Registration No. 33-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
Century Telephone Enterprises, Inc.
(Exact name of registrant as specified in its charter)
__________________
Louisiana 72-0651161
(State or other (I.R.S. Employer
jurisdiction of incorporation Identification No.)
or organization)
100 Century Park Drive
Monroe, Louisiana 71203
(318) 388-9500
(Address, including zip code, and telephone number
including area code, of registrant's principal executive offices)
__________________
CENTURY TELEPHONE ENTERPRISES, INC.
1995 INCENTIVE COMPENSATION PLAN
(Full title of the Plan)
__________________
Harvey P. Perry, Esq. COPY TO
Senior Vice President, General Counsel Margaret F. Murphy
and Secretary Jones, Walker, Waechter, Poitevent,
Century Telephone Enterprises, Inc. Carrere & Denegre, L.L.P.
100 Century Park Drive 51st Floor
Monroe, Louisiana 71203 201 St. Charles Avenue
(318) 388-9500 New Orleans, Louisiana 70170
(Name, address, including zip code,
and telephone number, including
area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
__________________________________________________________________________________________________________
Amount Proposed Maximum Proposed Maximum Amount of
Title of Each Class of to be Offering Price Aggregate Offering Registration
Securities to be Registered<FN1> Per Unit<FN2> Price<FN2> Fee
Registered
__________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Common Stock 2,000,000 shares $28.50 <FN3> $57,000,000 $19,655.17
Preferred Stock Purchase
Rights <FN4> 2,000,000 rights <FN4> <FN4> $100<FN4>
__________________________________________________________________________________________________________
</TABLE>
<FN1> Upon a stock split, stock dividend or similar transaction in the future
and during the effectiveness of this Registration Statement involving
Common Stock of the Company, the number of shares registered shall be
automatically increased to cover the additional shares in accordance
with Rule 416(a) under the Securities Act of 1933.
<FN2> Estimated solely for the purpose of calculating the registration fee
pursuant to Rules 457(c) and (h).
<FN3> The average of the high and low price per share of Common Stock on the
New York Stock Exchange on June 6, 1995, in accordance with Rule 457(c).
<FN4> Rights are attached to and trade with the Common Stock of the Company.
Value attributable to such Rights, if any, is reflected in the market
price of the Common Stock. The fee paid represents the minimum
statutory fee pursuant to Section 6(b) of the Securities Act of 1933.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Documents by Reference.
The following documents, which have been filed by Century with the
Securities and Exchange Commission (the "Commission"), are incorporated
herein by reference:
(a) Century's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.
(b) Century's Quarterly Report on Form 10-Q for the quarter ended March
31, 1995.
(c) The description of the Common Stock set forth in Item 5 of
Century's Current Report on Form 8-K dated June 12, 1991.
All reports filed by Century with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 subsequent
to the date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold shall,
except to the extent otherwise provided by Regulation S-K or any other rule
promulgated by the Commission, be deemed to be incorporated by reference in
this Registration Statement and to be a part hereof from the date of filing
of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 83 of the Louisiana Business Corporation Law provides in part
that a corporation may indemnify any director, officer, employee or agent
of the corporation against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
him in connection with any action, suit or proceeding to which he is or was
a party or is threatened to be made a party (including any action by or in
the right of the corporation) if such action arises out of his acts on
behalf of the corporation and he acted in good faith not opposed to the
best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
The indemnification provisions of the Louisiana Business Corporation
Law are not exclusive; however, no corporation may indemnify any person for
willful or intentional misconduct. A corporation has the power to obtain
and maintain insurance or to create a form of self-insurance on behalf of
any person who is or was acting for the corporation, regardless of whether
the corporation has the legal authority to indemnify the insured person
against such liability.
Article II, Section 9 of Century's by-laws (the "Indemnification
Bylaw") provides for mandatory indemnification for current and former
directors and officers of Century to the full extent permitted by Louisiana
law.
Century's Articles of Incorporation authorize it to enter into
contracts with directors and officers providing for indemnification to the
fullest extent permitted by law. Century has entered into indemnification
contracts providing contracting directors or officers the procedural and
substantive rights to indemnification currently set forth in the
Indemnification Bylaw ("Indemnification Contracts"). The right to indem-
nification provided by each Indemnification Contract applies to all covered
claims, whether such claims arose before or after the effective date of the
contract.
Century maintains an insurance policy covering the liability of its
directors and officers for actions taken in their corporate capacities.
The Indemnification Contracts provide that, to the extent insurance is
reasonably available, Century will maintain comparable insurance coverage
for each contracting party as long as he or she serves as an officer or
director and thereafter for so long as he or she is subject to possible
personal liability for actions taken in such capacities. The
Indemnification Contracts also provide that if Century does not maintain
comparable insurance, it will hold harmless and indemnify a contracting
party to the full extent of the coverage that would otherwise have been
provided for thereunder.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of Century pursuant to the foregoing provisions, or otherwise, Century has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the
Securities Act of 1933 and is therefore unenforceable.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Amended and Restated Articles of Incorporation of Century.
4.2 By-laws of Century as amended through May 23, 1995.
4.3 Amended and Restated Rights Agreement dated as of November 17, 1986
between Century and the Rights Agent named therein (incorporated
by reference to Exhibit 4.1 to Century's Current Report on Form 8-
K dated December 20, 1988), Amendments thereto dated March 26, 1990
(incorporated by reference to Exhibit 4.1 to Century's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1990) and the
Second Amendment thereto dated February 3, 1993 (incorporated by
reference to Exhibit 4.12 to Registrant's Annual Report on Form
10-K for the year ended December 31, 1992).
4.4 1995 Incentive Compensation Plan.
5 Opinion of Jones, Walker, Waechter, Poitevent, Carrere & Denegre,
L.L.P.
23.1Consent of KPMG Peat Marwick LLP.
23.2Consent of Counsel (included in Exhibit 5).
24 Power of Attorney (included on the signature page of this
Registration Statement).
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceedings) is asserted by such director, officer
or controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
4.1 Amended and Restated Articles of Incorporation of
Century.
4.2 By-laws of Century as amended through May 23,
1995.
4.3 Amended and Restated Rights Agreement dated as of
November 17, 1986 between Century and the Rights
Agent named therein (incorporated by reference to
Exhibit 4.1 to Century's Current Report on Form 8-
K dated December 20, 1988), Amendments thereto
dated March 26, 1990 (incorporated by reference to
Exhibit 4.1 to Century's Quarterly Report on Form
10-Q for the quarter ended March 31, 1990) and the
Second Amendment thereto dated February 3, 1993
(incorporated by reference to Exhibit 4.12 to
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992).
4.4 1995 Incentive Compensation Plan.
5 Opinion of Jones, Walker, Waechter, Poitevent,
Carrere & Denegre, L.L.P.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Counsel (included in Exhibit 5).
24 Power of Attorney (included on the signature page
of this Registration Statement).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Monroe, State of Louisiana, on
May 22, 1995.
CENTURY TELEPHONE ENTERPRISES, INC.
By: /s/ Clarke M. Williams
Clarke M. Williams
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears immediately below constitutes and appoints
Clarke M. Williams, Glen F. Post, III and Harvey P. Perry, or
any one of them, his true and lawful attorney-in-fact and
agent, with full power of substitution, for him and in his
name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to
this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do
and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his
substitute or substitutes may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, as amended, this Registration Statement has been signed
by the following persons in the capacities and on the dates
indicated.
Signature Title Date
/s/ Clarke M. Williams
_________________________ Chairman of the Board May 22, 1995
Clarke M. Williams of Directors
/s/ Glen F. Post, III
_________________________ Vice Chairman of the May 22, 1995
Glen F. Post, III Board of Directors,
President and Chief
Executive Officer
/s/ R. Stewart Ewing, Jr.
_________________________ Senior Vice President May 22, 1995
R. Stewart Ewing, Jr. and Chief Financial
Officer
(Principal Financial Officer)
/s/ Murray H. Greer
_________________________ Controller (Principal May 22, 1995
Murray H. Greer Accounting Officer)
/s/ William R. Boles, Jr.
_________________________ Director May 22, 1995
William R. Boles, Jr.
/s/ Virginia Boulet
_________________________ Director May 22, 1995
Virginia Boulet
/s/ Ernest Butler, Jr.
_________________________ Director May 22, 1995
Ernest Butler, Jr.
_________________________ Director ______, 1995
Calvin Czeschin
/s/ James B. Gardner
_________________________ Director May 22, 1995
James B. Gardner
/s/ W. Bruce Hanks
_________________________ Director May 22, 1995
W. Bruce Hanks
/s/ R. L. Hargrove, Jr.
_________________________ Director May 22, 1995
R. L. Hargrove, Jr.
/s/ Johnny Hebert
_________________________ Director May 22, 1995
Johnny Hebert
/s/ R. Earl Hogan
_________________________ Director May 22, 1995
F. Earl Hogan
/s/ C. G. Melville, Jr.
_________________________ Director May 22, 1995
C. G. Melville, Jr.
/s/ Harvey P. Perry
_________________________ Director May 22, 1995
Harvey P. Perry
/s/ Jim D. Reppond
_________________________ Director May 22, 1995
Jim D. Reppond
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
CENTURY TELEPHONE ENTERPRISES, INC.
ARTICLE I
Name
The name of this Corporation is Century Telephone
Enterprises, Inc.
ARTICLE II
Purpose
The purpose of the Corporation is to engage in any lawful
activity for which corporations may be formed under the Business
Corporation Law of Louisiana.
ARTICLE III
Capital
A. Authorized Stock. The Corporation shall be authorized
to issue an aggregate of 177 million shares of capital stock, of
which 175 million shares shall be Common Stock, $1.00 par value
per share, and two million shares shall be Preferred Stock,
$25.00 par value per share.
B. Preferred Stock. (1) The Preferred Stock may be
issued from time to time in one or more series.
(2) In respect to any series of Preferred Stock, the
Board of Directors is hereby authorized to fix or alter the
dividend rights, dividend rates, conversion rights, voting
rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, and the liquidation
preferences of any wholly unissued series of Preferred Stock, and
the number of shares constituting any such series and the
designation thereof, or any of them; and to increase or decrease
the number of shares of any series subsequent to the issue of
shares of that series, but not below the number of shares of such
series then outstanding. In case the number of shares of any
series shall be so decreased, the shares constituting such
decrease shall resume the status which they had prior to the
adoption of the resolution originally fixing the number of shares
of such series. In addition thereto the Board of Directors shall
have such other powers with respect to the Preferred Stock and
any series thereof as shall be permitted by applicable law.
(3) No full dividend for any quarterly dividend period
may be declared or paid on shares of any series of Preferred
Stock unless the full dividend for that period shall be
concurrently declared or paid on all series of Preferred Stock
outstanding in accordance with the terms of each series. If
there are any accumulated dividends accrued or in arrears on any
share of any series of Preferred Stock those dividends shall be
paid in full before any full dividend shall be paid on any other
series of Preferred Stock. If less than a full dividend is to be
paid, the amount of the dividend to be distributed shall be
divided among the shares of Preferred Stock for which dividends
are accrued or in arrears in proportion to the aggregate amounts
which would be distributable to those holders of Preferred Stock
if full cumulative dividends had previously been paid thereon in
accordance with the terms of each series.
C. Voting Rights. (1) Each share of Common Stock and
each outstanding share of the Series A and H Preferred Stock
("Voting Preferred Stock") which has been beneficially owned
continuously by the same person since May 30, 1987 will entitle
such person to ten votes with respect to such share on each
matter properly submitted to the shareholders of the Corporation
for their vote, consent, waiver, release or other action when the
Common Stock and the Voting Preferred Stock vote together with
respect to such matter.
(2) (a) For purposes of this paragraph C, a change in
beneficial ownership of a share of the Corporation's stock shall
be deemed to have occurred whenever a change occurs in any person
or group of persons who, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise
has or shares (i) voting power, which includes the power to vote,
or to direct the voting of such share; (ii) investment power,
which includes the power to direct the sale or other disposition
of such share; (iii) the right to receive or retain the proceeds
of any sale or other disposition of such share; or (iv) the right
to receive distributions, including cash dividends, in respect to
such share.
(b) In the absence of proof to the contrary
provided in accordance with the procedures referred to in
subparagraph (4) of this paragraph C, a change in beneficial
ownership shall be deemed to have occurred whenever a share of
stock is transferred of record into the name of any other person.
(c) In the case of a share of Common Stock or
Voting Preferred Stock held of record in the name of a
corporation, general partnership, limited partnership, voting
trustee, bank, trust company, broker, nominee or clearing agency,
or in any other name except a natural person, if it has not been
established pursuant to the procedures referred to in
subparagraph (4) that such share was beneficially owned
continuously since May 30, 1987 by the person who possesses all
of the attributes of beneficial ownership referred to in clauses
(i) through (iv) of subparagraph (2)(a) of this paragraph C with
respect to such share of Common Stock or Voting Preferred Stock,
then such share of Common Stock or Voting Preferred Stock shall
carry with it only one vote regardless of when record ownership
of such share was acquired.
(d) In the case of a share of stock held of
record in the name of any person as trustee, agent, guardian or
custodian under the Uniform Gifts to Minors Act, the Uniform
Transfers to Minors Act or any comparable statute as in effect in
any state, a change in beneficial ownership shall be deemed to
have occurred whenever there is a change in the beneficiary of
such trust, the principal of such agent, the ward of such
guardian or the minor for whom such custodian is acting.
(3) Notwithstanding anything in this paragraph C to
the contrary, no change in beneficial ownership shall be deemed
to have occurred solely as a result of:
(a) any event that occurred prior to May 30,
1987, including contracts providing for options, rights of first
refusal and similar arrangements, in existence on such date to
which any holder of shares of stock is a party;
(b) any transfer of any interest in shares of
stock pursuant to a bequest or inheritance, by operation of law
upon the death of any individual, or by any other transfer
without valuable consideration, including a gift that is made in
good faith and not for the purpose of circumventing this
paragraph C;
(c) any change in the beneficiary of any trust,
or any distribution of a share of stock from trust, by reason of
the birth, death, marriage or divorce of any natural person, the
adoption of any natural person prior to age 18 or the passage of
a given period of time or the attainment by any natural person of
a specified age, or the creation or termination of any
guardianship or custodian arrangement; or
(d) any appointment of a successor trustee,
agent, guardian or custodian with respect to a share of stock.
(4) For purposes of this paragraph C, all
determinations concerning changes in beneficial ownership, or the
absence of any such change, shall be made by the Corporation.
Written procedures designed to facilitate such determinations
shall be established by the Corporation and refined from time to
time. Such procedures shall provide, among other things, the
manner of proof of facts that will be accepted and the frequency
with which such proof may be required to be renewed. The
Corporation and any transfer agent shall be entitled to rely on
all information concerning beneficial ownership of a share of
stock coming to their attention from any source and in any manner
reasonably deemed by them to be reliable, but neither the
Corporation nor any transfer agent shall be charged with any
other knowledge concerning the beneficial ownership of a share of
stock.
(5) Each share of Common Stock acquired by reason of
any stock split or dividend shall be deemed to have been
beneficially owned by the same person continuously from the same
date as that on which beneficial ownership of the share of Common
Stock, with respect to which such share of Common Stock was
distributed, was acquired.
(6) Each share of Common Stock acquired upon
conversion of the outstanding Series A and H Preferred Stock of
the Corporation ("Convertible Stock") shall be deemed to have
been beneficially owned by the same person continuously from the
date on which such person acquired the Convertible Stock
converted into such share of Common Stock.
(7) Where a holder beneficially owns shares having ten
votes per share and shares having one vote per share, and
transfers beneficial ownership of less than all of the shares
held, the shares transferred shall be deemed to consist, in the
absence of evidence to the contrary, of the shares having one
vote per share.
(8) Shares of Common Stock held by the Corporation's
employee benefit plans will be deemed to be beneficially owned by
such plans regardless of how such shares are allocated to or
voted by participants, until the shares are actually distributed
to participants.
(9) Each share of Common Stock, whether at any
particular time the holder thereof is entitled to exercise ten
votes or one, shall be identical to all other shares of Common
Stock in all other respects.
(10) Each share of Voting Preferred Stock, whether at
any particular time the holder thereof is entitled to exercise
ten votes or one, shall be identical in all other respects to all
other shares of Voting Preferred Stock in the same designated
series.
(11) Each share of Common Stock issued by the
Corporation in a business combination transaction shall be deemed
to have been beneficially owned by the person who received such
share in the transaction continuously for the shortest period, as
determined in good faith by the Board of Directors, that would be
permitted for the transaction to be accounted for as a pooling of
interests, provided that the Audit Committee of the Board of
Directors has made a good faith determination that (a) such
transaction has a bona fide business purpose, (b) it is in the
best interests of the Corporation and its shareholders that such
transaction be accounted for as a pooling of interests under
generally accepted accounting principals and (c) such issuance of
Common Stock does not have the effect of nullifying or materially
restricting or disparately reducing the per share voting rights
of holders of an outstanding class or classes of voting stock of
the Corporation. Notwithstanding the foregoing, (i) the
Corporation shall not issue shares in a business combination
transaction if such issuance would result in a violation of any
rule or regulation regarding the per share voting rights of
publicly-traded securities that is promulgated by the Securities
and Exchange Commission or the principal exchange upon which the
Common Stock is then listed for trading and (ii) nothing herein
shall be interpreted to require the Corporation to account for
any business combination transaction in any particular manner.
D. Non-Assessability; Transfers; Pre-emptive Rights. The
stock of this Corporation shall be fully paid and non-assessable
when issued and shall be personal property. No transfer of such
stock shall be binding upon this Corporation unless such transfer
is made in accordance with these Articles and the by-laws of this
Corporation and duly recorded in the books thereof. No
stockholder shall have any pre-emptive right to subscribe to any
or all additions to the stock of this Corporation.
E. Series A Preferred Stock. The Corporation's Preferred
Stock, Series A ("Series A Shares"), shall consist of 160,560
shares of Preferred Stock.
(1) Holders of the outstanding Series A Shares shall
be entitled to one vote per share thereof, voting with holders of
shares of Common Stock and with holders of other voting shares of
Preferred Stock as a single class, except as to those matters on
which holders of Preferred Stock or a particular series thereof
are required by applicable law to vote separately; and shall be
entitled to receive, out of any funds legally available therefor,
dividends at the rate of 6-1/8% per annum of the par value
thereof, and no more, payable in cash quarterly on the last day
of March, June, September and December, in each year when and as
declared by the Board of Directors of the Corporation; provided
that, if the Net Earnings per share of Common Stock of this
Corporation reaches $1.50 for the preceding calendar year, the
annual dividend rate shall be 7-1/8% thereafter; and further
provided that, if the Net Earnings per share of Common Stock
reaches $2.00 for the preceding calendar year, the annual
dividend rate shall be 8-1/8% thereafter. For purposes hereof,
"Net Earnings per share of Common Stock" shall be computed on a
fully diluted basis in accordance with Release No. 15, as amended
from time to time by the Accounting Principles Board (or any
successor thereto) of the American Institute of Certified Public
Accountants. Dividends shall accrue on each share of Series A
from the date of its original issuance and shall accrue from day
to day, whether or not earned or declared. Dividends shall be
cumulative so that if dividends in respect of any previous
quarterly dividend period at the prescribed rate per annum shall
not have been paid on or declared and set apart from all Series A
Shares at the time outstanding, the deficiency shall be fully
paid on or declared and set apart for said shares before any
dividend or other distribution shall be paid on or declared or
set apart for shares of Common Stock.
(2) In the event of a liquidation, dissolution or
winding up of this Corporation, the holders of Series A Shares
shall be entitled to receive, pro rata with all other holders of
Preferred Stock of whatever series, to the extent available out
of the assets of this Corporation whether such assets are capital
or surplus of any nature, an amount equal to the par value of
such Preferred Stock, and in addition thereto, a further amount
equal to the dividends unpaid and accumulated thereon, to the
date that payment is made available to the holders of Preferred
Stock, whether earned or declared or not, and no more, before any
payment shall be made or any assets distributed to the holders of
Common Stock. A consolidation or merger of this Corporation with
or into any other corporation or corporations, or a sale of all
or substantially all of the assets of the Corporation, shall not
be deemed to be a liquidation, dissolution or winding up, within
the meaning of this paragraph.
(3) If the average daily market price per share of
this Corporation's Common Stock maintains a level of $17.13 or
higher for a period of at least ninety consecutive days,
thereafter this Corporation, at the option of the Board of
Directors, may at any time or from time to time redeem the whole
or any part of the outstanding Series A Shares by paying in cash
therefor twenty five dollars ($25.00) per share and, in addition
to the aforementioned amount, an amount in cash equal to all
dividends thereon unpaid and accumulated as provided in paragraph
(1) above, whether earned or declared or not, to and including
the date fixed for redemption, such sum being hereinafter
sometimes referred to as the redemption price. In case of the
redemption of a part only of the outstanding Series A Shares,
this Corporation shall designate by lot, in such manner as the
Board of Directors may determine, the shares to be redeemed, or
shall effect such redemption pro rata. Less than all of the
Series A Shares at any time outstanding may not be redeemed until
all dividends accrued and in arrears upon all Series A Shares
outstanding shall have been paid for all past dividend periods,
and until full dividends for the then current dividend period on
all Series A Shares then outstanding, other than the shares to be
redeemed, shall have been paid or declared and the full amount
thereof set apart for payment. At least thirty (30) days'
previous notice by mail, postage prepaid, shall be given to the
holders of record of the Series A Shares to be redeemed, such
notice to be addressed to each shareholder at his post office
address as shown by the records of this Corporation. On or after
the date fixed for redemption and stated in such notice, each
holder of Series A Shares called for redemption shall surrender
his certificate evidencing such shares to this Corporation at the
place designated in such notice and shall thereupon be entitled
to receive payment of the redemption price. In case less than
all the shares represented by any such surrendered certificate
are redeemed, a new certificate shall be issued representing the
unredeemed shares. If such notice of redemption shall have been
duly given, and if on the date fixed for redemption funds
necessary for the redemption shall be available thereof, then,
notwithstanding that the certificates evidencing any shares so
called for redemption shall not have been surrendered, the
dividends with respect to the shares so called for redemption
shall cease to accrue after the date fixed for redemption and all
rights with respect to the shares so called for redemption shall
forthwith after such date cease and determine, except only the
right of the holders to receive the redemption price without
interest upon surrender of their certificates thereof.
If, on or prior to any date fixed for redemption
of Series A Shares, this Corporation deposits, with any bank or
trust company, as a trust fund, a sum sufficient to redeem, on
the date fixed for redemption thereof, the shares called for
redemption, with irrevocable instructions and authority to the
bank or trust company to give the notice or redemption thereof if
such notice shall not previously have been given by this
Corporation, or to complete the giving if such notice is
theretofore commenced, and to pay, on and after the date fixed
for redemption or prior thereto, the redemption price of the
shares to their respective holders upon the surrender of their
share certificates, then from and after the date of the deposit
(although prior to the date fixed for redemption), the shares so
called shall cease to accrue after the date fixed for redemption.
The deposit shall be deemed to constitute full payment of the
shares to their holders and from and after the date of the
deposit the shares shall be deemed to be no longer outstanding,
and the holders thereof shall cease to be shareholders with
respect to such shares, and shall have no rights with respect
thereto except the right to receive from the bank or trust
company payment of the redemption price of the shares without
interest, upon the surrender of their certificates therefor, and
the right to convert said shares as provided herein at any time
up to but not after the close of business on the day prior to the
date fixed for redemption of such shares. Any moneys deposited
on account of the redemption price of Series A Shares converted
subsequent to the making of such deposit shall be repaid to the
Corporation forthwith upon the conversion of such Series A
Shares.
(4) The holders of Series A Shares shall have
conversion rights as follows:
(a) The Series A Shares shall be convertible, at
the option of the respective holders thereof, at any time
prior to the day prior to such date, if any, as may have
been fixed for the redemption thereof in any notice of
redemption given as provided in (3) hereof, at the office of
the Corporation or any transfer agent for such shares, into
fully paid and non-assessable shares (calculated to the
nearest whole share, fractions of a share being disregarded)
of Common Stock of the Corporation, at conversion price in
effect at the time of conversion determined as hereinafter
provided, each Series A Share being taken at $25.00 for the
purpose of such conversion. The price at which shares of
Common Stock shall be deliverable upon conversion (herein
called the "conversion price") shall be $11.42 per share
until January 15, 1977, and thereafter the sum of (i) the
average daily closing market price thereof during the
preceding 24 months of any national securities exchange upon
which said Common Stock is listed for trading or, in the
absence of said listing, then as reported by the National
Association of Securities Dealers, Inc., but not more than
$11.42 and not less than $8.12 per share; and (ii) one-half
of the difference between said average market price and
$11.42 per share; provided, however, that any Series A
Shares called for redemption shall be thereafter
convertible, at the option of the holders thereof, at any
time prior to the date fixed for redemption, into shares of
Common Stock, which shall be valued at $11.42 per share for
said purpose. Such conversion price shall be subject to
adjustment from time to time in certain circumstances, as
hereinafter provided. The Corporation shall make no payment
or adjustment on account of any dividends accrued on the
Series A Shares surrendered for conversion. In case of the
call for redemption of any Series A Shares, the right of
conversion shall terminate as to the shares designated for
redemption, at the close of business on the day preceding
the day fixed for redemption, unless default is made in the
payment of the redemption price.
(b) Before any holder of Series A Shares shall be
entitled to convert the same to Common Stock, he shall
surrender the certificates or certificates therefor, duly
endorsed, at the office of the Corporation or of any
transfer agent for the Series A Shares, and shall give
written notice to the Corporation at such office that he
elects to convert the same and shall state in writing
therein the name or names in which he wishes the certificate
or certificates for Common Stock to be issued. The
Corporation shall, as soon as practicable thereafter, issue
and deliver at such office to such holder of Series A
Shares, or to his nominee or nominees, certificates for the
number of full shares of Common Stock to which he shall be
entitled, as aforesaid. Such conversion shall be deemed to
have been made as of the date of surrender of the Series A
Shares to be converted, and the person or persons entitled
to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or
holders of that Common Stock on said date.
(c) In case the Corporation shall at any time
subdivide the outstanding shares of Common Stock, or shall
issue as a dividend on Common Stock such number of shares of
Common Stock as shall equal 10% or more of the number of
shares of Common Stock outstanding immediately prior to the
issuance of such dividend, the conversion price in effect
immediately prior to such subdivision or the issuance of
such dividend shall be proportionately decreased, and in
case the Corporation shall at any time combine the
outstanding shares of Common Stock, the conversion price in
effect immediately prior to such combination shall be
proportionately increased, effective at the close of
business on the date of such subdivision, dividend, or
combination, as the case may be.
(d) No fractional shares of Common Stock shall be
issued upon the conversion of Series A Shares. If any
fractional interest in a share of Common Stock would, except
for the provisions of this paragraph (d), be deliverable
upon conversion hereunder, the Corporation shall adjust such
fractional interest by rounding off said fractional interest
to the nearest whole number of shares of Common Stock.
(e) Whenever the conversion price is adjusted, as
herein provided, the Corporation shall forthwith maintain at
its office and file with the transfer agents for Series A
Shares, if any, a statement signed by the Chairman of the
Board, or the President, or a Vice President of the
Corporation, and by its Treasurer or an Assistant Treasurer,
showing in detail the facts requiring such adjustment and
the conversion price after such adjustment. Such transfer
agents shall be under no duty or responsibility with respect
to any such statement except to exhibit the same from time
to time to any holder of Series A Shares desiring an
inspection thereof.
(f) In case of any capital reorganization or any
reclassification of the capital stock of the Corporation or
in case of the consolidation or merger of the Corporation
with or into another corporation or the conveyance of all or
substantially all of the assets of the Corporation to
another corporation, each Series A Share shall thereafter be
convertible into the number of shares of stock or other
securities or property to which a holder of the number of
shares of Common Stock of the Corporation deliverable upon
conversion of such Series A Share would have been entitled
upon such reorganization, reclassification, consolidation,
merger or conveyance; and, in any such case, appropriate
adjustment (as determined by the Board of Directors) shall
be made in the application of the provisions herein set
forth with respect to the rights and interests thereafter of
the holders of the Series A Shares, to the end that the
provisions set forth herein (including provisions with
respect to changes in and other adjustments of the
conversion price) shall thereafter be applicable, as nearly
as reasonably may be, in relation to any shares of stock or
other property thereafter deliverable upon conversion of the
Series A Shares.
(g) In case:
1. the Corporation shall take a record of
the holders of its Common Stock for the purpose of
entitling them to receive a dividend, or any other
distribution, payable otherwise than in cash; or
2. the Corporation shall take a record of
the holders of its Common Stock for the purpose of
entitling them to subscribe for or purchase any shares
of stock of any class or to receive any other rights;
or
3. of any capital reorganization of the
Corporation, reclassification of the capital stock of
the Corporation (other than a subdivision or
combination of its outstanding shares of Common Stock),
consolidation or merger of the Corporation with or into
another corporation, or conveyance of all of
substantially all of the assets of the Corporation to
another corporation; or
4. of the voluntary or involuntary
dissolution, liquidation or winding up of the
Corporation; then, and in any such case, the
Corporation shall cause to be mailed to the holders of
record of the outstanding Series A Shares, at least 10
days prior to the date hereinafter specified, a notice
stating the date on which (i) a record is to be taken
for the purpose of such dividend, distribution or
rights, or (ii) such reclassification, reorganization,
consolidation, merger, conveyance, dissolution,
liquidation or winding up is to take place and the
date, if any is to be fixed, as of which holders of
Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other
property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.
(h) The Corporation shall at all times reserve
and keep available, out of its authorized but unissued
Common Stock, solely for the purpose of effecting the
conversion of the Series A Shares, the full number of shares
of Common Stock deliverable upon the conversion of all
Series A Shares from time to time outstanding.
(i) The Corporation shall pay any and all issue
and other taxes that may be payable in respect of any issue
or delivery of shares of Common Stock on conversion of
Series A Shares pursuant hereto. The Corporation shall not,
however, be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery
of shares of Common Stock in a name other than that in which
the Series A Shares so converted were registered, and no
such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Corporation the
amount of any such tax, or has established, to the
satisfaction of the Corporation, that such tax has been
paid.
(j) All certificates of the Series A Shares
surrendered for conversion shall be appropriately cancelled
on the books of the Corporation, and the shares so converted
represented by such certificates shall be restored to the
status of authorized but unissued Preferred Stock of the
Corporation without designation as to series.
F. Series H Preferred Stock. The Corporation's Preferred
Stock, Series H ("Series H Shares"), shall consist of 20,000
shares of Preferred Stock.
(1) Holders of the outstanding Series H Shares shall
be entitled to one vote per share thereof, voting with holders of
shares of Common Stock and with holders of other voting shares of
Preferred Stock as a single class, except as to those matters on
which holders of Preferred Stock or a particular series thereof
are required by applicable law to vote separately; and shall be
entitled to receive, out of any funds legally available therefor,
dividends at the rate of 7% per annum of the part value thereof,
and no more, payable in cash quarterly on the last day of March,
June, September, and December in each year, commencing 1975, when
and as declared by the Board of Directors of the Corporation.
Dividends shall accrue on each share of Series H from the date of
its original issuance and shall accrue from day to day, whether
or not earned or declared. Dividends shall be cumulative so that
if dividends in respect of any previously quarterly dividend
period at the prescribed rate per annum shall not have been paid
on or declared and set or apart for all Series H Shares at the
time outstanding, the deficiency shall be fully paid on or
declared and set apart for said shares before any dividend or
other distribution shall be paid on or declared or set apart for
shares of Common Stock.
(2) In the event of a liquidation, dissolution or
winding up of this Corporation, the holders of Series H Shares
shall be entitled to receive, pro rata with all other holders of
Preferred Stock of whatever series, to the extent available out
of the assets of this Corporation, whether such assets are
capital or surplus of any nature, an amount equal to the par
value of such Preferred Stock, and in addition thereto, a further
amount equal to the dividends unpaid and accumulated thereon, to
the date that payment is earned or declared or not, and no more,
before any payment shall be made or any assets distributed to the
holders of Common Stock. A consolidation or merger of this
Corporation with or into any other corporation or corporations,
or a sale of all or substantially all of the assets of the
Corporation, shall not be deemed to be a liquidation, dissolution
or winding up, within the meaning of this paragraph.
(3) The holders of Series H Shares shall have
conversion rights as follows:
(a) The Series H Shares shall be convertible, at
the option of the respective holders thereof, at the office
of the Corporation or any transfer agent for such shares,
into fully paid and non-assessable shares (calculated to the
nearest whole share, fractions of a share being disregarded)
of Common Stock of the Corporation, at the conversion rate
of one and twelve thirteenths (1-12/13ths) shares of Common
Stock for each Series H Share converted. Such conversion
rate shall be subject to adjustment from time to time in
certain instances, as hereinafter provided. The Corporation
shall make no payment or adjustment on account of any
dividends accrued on the Series H Shares surrendered for
conversion.
(b) Before any holder of Series H Shares shall be
entitled to convert the same in Common Stock, he shall
surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or of any
transfer agent for the Series H Shares, and shall give
written notice to the Corporation at such office that he
elects to convert the same and shall state in writing
therein the name or names in which he wishes the certificate
or certificates for Common Stock to be issued. The
Corporation shall, as soon as practicable thereafter, issue
and deliver at such office to such holder of Series H
Shares, or to his nominee or nominees, certificates for the
number of full shares of Common Stock to which he shall be
entitled, as aforesaid. Such conversion shall be deemed to
have been made as of the date of surrender of the Series H
Shares to be converted, and the person or persons entitled
to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or
holders of that Common Stock on said date.
(c) In case the Corporation shall at any time
subdivide the outstanding shares of Common Stock, or shall
issue as a dividend on Common Stock such number of shares of
Common Stock as shall equal 10% or more of the number of
shares of Common Stock outstanding immediately prior to the
issuance of such dividend, the conversion price in effect
immediately prior to such subdivision or the issuance of
such dividend shall be proportionately decreased, and in
case the Corporation shall at any time combine the
outstanding shares of Common Stock, the conversion price in
effect immediately prior to such combination shall be
proportionately increased, effective at the close of
business on the date of such subdivision, dividend or
combination, as the case may be.
(d) No fractional shares of Common Stock shall be
issued upon the conversion of Series H Shares. If any
fractional interest in a share of Common Stock would, except
for the provisions of this paragraph (d), be deliverable
upon conversion hereunder, the Corporation shall adjust such
fractional interest by rounding off said fractional interest
to the nearest whole number of shares of Common Stock.
(e) Whenever the conversion is adjusted, as
herein provided, the Corporation shall forthwith maintain at
its office and file with the transfer agents for Series H
Shares, if any, a statement signed by the Chairman of the
Board, or the President, or a Vice President of the
Corporation, and by its Treasurer or an Assistant Treasurer,
showing in detail the facts requiring such adjustment and
the conversion price after such adjustment. Such transfer
agent shall be under no duty or responsibility with resect
to any such statement except to exhibit the same from time
to time to any holder of Series H Shares desiring an
inspection thereof.
(f) In case of any capital reorganization or any
reclassification of the capital stock of the Corporation or
in case of the consolidation or merger of the Corporation
with or into another corporation or the conveyance of all or
substantially all of the assets of the Corporation to
another corporation, each Series H Share shall thereafter be
convertible into the number of shares of stock or other
securities or property to which a holder of the number of
shares of Common Stock of the Corporation deliverable upon
conversion of such Series H Shares would have been entitled
upon such reorganization, reclassification, consolidation,
merger or conveyance; and, in any such case, appropriate
adjustment (as determined by the Board of Directors) shall
be made in the application of the provisions herein set
forth with respect to the rights and interests thereafter of
the holders of the Series H Shares, to the end that the
provisions set forth herein (including provisions with
respect to changes in and other adjustments of the
conversion price) shall thereafter be applicable, as nearly
as reasonably may be, in relation to any shares of stock or
other property thereafter deliverable upon the conversion of
the Series H Shares.
(g) In case:
1. the Corporation shall take a record of
the holders of its Common Stock for the purpose of
entitling them to receive a dividend, or any other
distribution, payable otherwise than in cash; or
2. the Corporation shall take a record of
the holders of its Common Stock for the purpose of
entitling them to subscribe for or purchase any shares
of stock of any class or to receive any other rights;
or
3. of any capital reorganization of the
Corporation, reclassification of the capital stock of
the Corporation (other than a subdivision or
combination of its outstanding shares of Common Stock),
consolidation or merger of the Corporation with or into
another corporation, or conveyance of all or
substantially all of the assets of the Corporation to
another corporation; or
4. of the voluntary or involuntary
dissolution, liquidation or winding up of the
Corporation; then, and in any such case, the
Corporation shall cause to be mailed to the holders of
record of the outstanding Series H Shares, at least 10
days prior to the date hereinafter specified, a notice
stating the date on which (i) a record is to be taken
for the purpose of such dividend, distribution, or
rights, or (ii) such reclassification, reorganization,
consolidation, merger, conveyance, dissolution,
liquidation or winding up is to take place and the
date, if any is to be fixed, as of which holders of
Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other
property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.
(h) The Corporation shall at all times reserve
and keep available, out of its authorized but unissued
Common Stock, solely for the purpose of effecting the
conversion of the Series H Shares, the full number of shares
of Common Stock deliverable upon the conversion of all
Series H Shares from time to time outstanding.
(i) The Corporation shall pay any and all issue
and other taxes that may be payable in respect to any issue
or delivery of shares of Common Stock or conversion of
Series H Shares pursuant hereto. The Corporation shall not,
however, be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery
of shares of Common Stock in a name other than that in which
the Series H Shares so converted were registered, and no
such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Corporation the
amount of any such tax, or has established, to the
satisfaction of the Corporation, that such tax has been
paid.
(j) All certificates of the Series H Shares
surrendered for conversion shall be appropriately cancelled
on the books of the Corporation, and the shares so converted
represented by such certificates shall be restored to the
status of authorized but unissued Preferred Stock of the
Corporation without designation as to series.
G. Series K Preferred Stock. The Corporation's 5%
Cumulative Convertible Series K Preferred Stock ("Series K
Shares") shall consist of 75,000 shares of Preferred Stock having
the preferences, limitations and relative rights set forth below.
(1) Holders of the Series K Shares shall be entitled
to cast one vote per share, voting with holders of shares of
Common Stock and with holders of other series of voting preferred
stock as a single class on any matter to come before a meeting of
the shareholders, except with respect to the casting of ballots
on those matters as to which holders of Preferred Stock or a
particular series thereof are required by law to vote separately.
(2) The Series K Shares shall, with respect to
dividend rights and rights upon liquidation, dissolution and
winding up, rank prior to the Common Stock and pari passu with
respect to the Series A Shares and Series H Shares. All equity
securities of the Corporation as to which the Series K Shares
rank prior, whether with respect to dividends or upon
liquidation, dissolution or winding-up or otherwise, including
the Common Stock, are collectively referred to herein as the
"Junior Securities"; all equity securities of the Corporation as
to which the Series K Shares rank pari passu, including the
Series A Shares and Series H Shares, are collectively referred to
herein as the "Parity Securities"; and all other equity
securities of the Corporation (other than convertible debt
securities) as to which the Series K Shares ranks junior are
collectively referred to herein as the "Senior Securities." The
preferences, limitations and relative rights of the Series K
Shares shall be subject to the preferences, limitations and
relative rights of any Junior Securities, Parity Securities or
Senior Securities issued after the Series K Shares.
(3) The holders of Series K Shares shall have the
following dividend rights:
(a) The holders of record of the Series K Shares
shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds of the Corporation
legally available therefor, an annual cash dividend of $1.25
on each Series K Share, payable quarterly on each March 31,
June 30, September 30 and December 31 on which any Series K
Shares shall be outstanding (each a "Dividend Due Date"),
commencing on the last day of the calendar quarter in which
a wholly-owned subsidiary of the Corporation merges with and
into Kingsley Telephone Company. Dividends on each Series K
Share shall accrue and be cumulative from and after the date
of issuance of such Series K Share and dividends payable for
any partial quarterly period shall be calculated on the
basis of a year of 360 days consisting of twelve 30-day
months. Dividends shall be payable to the holders of record
as they appear on the Corporation's stock transfer books at
the close of business on the record date for such payment,
which the Board of Directors shall fix not more than 60 days
or less than 10 days preceding a Dividend Due Date. Holders
of the Series K Shares shall not be entitled to any
dividends, whether paid in cash, property or stock, in
excess of the cumulative dividends as provided in this
paragraph (a) and shall not be entitled to any interest
thereon.
(b) Unless all cumulative dividends accrued on
the Series K Shares have been or contemporaneously are
declared and paid or declared and a sum set apart sufficient
for such payment through the most recent Dividend Payment
Date, then (i) except as provided in the last sentence of
this paragraph, no dividend or other distribution shall be
declared or paid or set apart for payment on any Parity
Securities, (ii) no dividend or other distribution shall be
declared or paid or set aside for payment upon the Junior
Securities (other than a dividend or distribution paid in
shares of, or warrants, rights or options exercisable for or
convertible into, Junior Securities) and (iii) no Junior
Securities shall be redeemed, purchased or otherwise
acquired for any consideration, nor shall any monies be paid
to or made available for a sinking fund for the redemption
of any Junior Securities, except by conversion of Junior
Securities into, or by exchange of Junior Securities for,
other Junior Securities. If accrued dividends are not paid
or set apart with respect to the Series K Shares and all
other Parity Securities in full, all dividends declared with
respect to such securities shall be declared pro rata on a
share-by-share basis among all Series K Shares and Parity
Securities outstanding at the time.
(4) The holders of Series K Shares shall have the
following conversion rights:
(a) Subject to the rights of the Corporation
specified in paragraph (b) below, each Series K Share shall
be convertible, at any time, at the option of the holder
thereof into that number of fully paid and nonassessable
shares of the Common Stock obtained by dividing $25.00 by
the Conversion Price then in effect under the terms of this
subsection (4). Unless and until changed in accordance with
the terms of this subsection (4), the Conversion Price shall
be $25.33. In order for a holder of the Series K Shares to
effect such conversion, the holder shall deliver to Society
Shareholder Services, Inc., Dallas Texas, or such other
agent as may be designated by the Board of Directors as the
transfer agent for the Series K Shares (the "Transfer
Agent"), the certificates representing such shares in
accordance with paragraph (c) below accompanied by written
notice jointly addressed to the Corporation and the Transfer
Agent that the holder thereof elects to convert such shares
or a specified portion thereof. Each conversion shall be
deemed to have been effected immediately prior to the close
of business on the date on which the certificates
representing the Series K Shares being converted shall have
been delivered to the Transfer Agent in accordance with each
term and condition of paragraph (c) below, accompanied by
the written notice jointly addressed to the Corporation and
the Transfer Agent of such conversion (the "Optional
Conversion Date"), and the person or persons in whose 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 Common
Stock represented thereby at such time. As of the close of
business on the Optional Conversion Date, the Series K
Shares shall be deemed to cease to be outstanding and all
rights of any holder thereof shall be extinguished except
for the rights arising under the Common Stock issued in
exchange therefor and the right to receive accrued and
unpaid dividends on such Series K Shares through the
Optional Conversion Date on the terms specified in paragraph
(d) below.
(b) At any time after July 1, 1997, the
Corporation, at its option, shall be entitled to convert, in
whole but not in part, each outstanding Series K Share into
that number of fully paid and nonassessable shares of Common
Stock obtained by dividing $25.00 by the Conversion Price
then in effect. In order to effect such conversion, the
Corporation shall mail notice to each record holder of the
Series K Shares at least 30 but not more than 60 days prior
to the date fixed for such conversion (the "Mandatory
Conversion Date" and together with the Optional Conversion
Date, the "Conversion Date"). Each notice shall specify the
Mandatory Conversion Date and the Conversion Price then in
effect. Any notice mailed in such manner shall be
conclusively deemed to have been duly given regardless of
whether such notice is in fact received. Upon receipt of
such notice, the holder of Series K Shares shall promptly
surrender to the Transfer Agent in accordance with paragraph
(c) below the certificate representing the converted Series
K Shares. In order to facilitate the conversion of the
Series K Shares, the Board of Directors may fix a record
date for the determination of the holders of the Series K
Shares, which shall not be more than 60 days prior to the
Mandatory Conversion Date. As of the close of business on
the Mandatory Conversion Date, the Series K Shares shall be
deemed to cease to be outstanding and all rights of any
holder thereof shall be extinguished except for the rights
arising under the Common Stock issued in exchange therefore
and the right to receive accrued and unpaid dividends on
such Series K Shares through the Mandatory Conversion Date
on the terms specified in paragraph (d) below; provided,
however, that no certificates representing such Common Stock
shall be issued and no dividends or other distributions
shall be payable with respect to such Common Stock, until
the certificates representing the Series K Shares have been
surrendered to the Transfer Agent in accordance with
paragraph (c) below.
(c) In connection with surrendering to the
Transfer Agent the certificates representing (or formerly
representing) Series K Shares, the holder shall furnish the
Transfer Agent with transfer instruments satisfactory to the
Corporation and sufficient to transfer the Series K Shares
being converted to the Corporation free of any adverse
interest or claims. As promptly as practicable after the
surrender of the Series K Shares in accordance with this
paragraph and any other requirement under this subsection
(4), the Corporation, acting directly or through the
Transfer Agent, shall issue and deliver to such holder
certificates for the number of whole shares of Common Stock
issuable upon the conversion of such shares in accordance
with the provisions hereof (along with any interest payment
specified in paragraph (a) or (b) above and cash payment in
lieu of fractional shares specified in paragraph (e) below).
Certificates will be issued for the balance of any remaining
Series K Shares in any case in which fewer than all of the
Series K Shares are converted. Any conversion under
paragraph (a) or (b) shall be effected at the Conversion
Price in effect on the Conversion Date.
(d) If the Conversion Date with respect to any
Series K Share occurs after any record date with respect to
the payment of a dividend on the Series K Shares (the
"Dividend Record Date") and on or prior to the Dividend Due
Date, then (i) the dividend due on such Dividend Due Date
shall be payable to the holder of record of such share as of
the Dividend Record Date and (ii) the dividend that accrues
from the close of business on the Dividend Record Date
through the Conversion Date shall be payable to the holder
of record of such share as of the Conversion Date. Except
as provided in this subsection (4), no payment or adjustment
shall be made in connection with any conversion on account
of any dividends accrued on Series K Shares surrendered for
conversion or on account of any dividends on the Common
Stock issued upon conversion.
(e) No fractional interest in a share of Common
Stock shall be issued by the Corporation upon the conversion
of any Series K Share. In lieu of any such fractional
interest, the holder that would otherwise be entitled to
such fractional interest shall receive a cash payment
(computed to the nearest cent) equal to such fraction
multiplied by the market value of a share of Common Stock,
which shall be deemed to equal the last reported per share
sale price of Common Stock on the New York Stock Exchange
("NYSE") (or, if the Common Stock is not then traded on the
NYSE, then the last reported per share sale price on such
other national securities exchange on which the Common Stock
is listed or admitted to trading or, if not then listed or
admitted to trading on any national securities exchange,
then the last quoted bid price in the over-the-counter
market as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ"), or any
similar system of automated dissemination of securities
prices) on the Trading Day (as defined below) immediately
prior to the Conversion Date. As used in this subsection
(4), the term "Trading Day" means (i) if the Common Stock is
listed or admitted for trading on any national securities
exchange, days on which such national securities exchange is
open for business, or (ii) if the Common Stock is not so
listed or admitted for trading but is quoted by NASDAQ or
any similar system of automated dissemination of quotations
of securities prices, days on which trades may be made on
such system.
(f) The Conversion Price shall be adjusted from
time to time as follows:
1. If the Corporation shall pay or make a
dividend or other distribution on any class of capital
stock of the Company in the form of Common Stock, then
the Conversion Price in effect at the opening of
business on the day following the date fixed for the
determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction the
numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on
the date fixed for such determination and the
denominator of which shall be the aggregate number of
shares of Common Stock that would be outstanding if
such dividend or other distribution were effected as of
such date. For the purposes of this subparagraph (1),
the number of shares of Common Stock at any time
outstanding shall not include shares held in the
treasury of the Corporation.
2. If the Corporation shall issue rights,
warrants or other securities convertible into Common
Stock to all holders of its Common Stock entitling them
to subscribe for or purchase shares of Common Stock at
a price per share less than the current market price
per share (determined as provided in subparagraph (6)
below) of the Common Stock on the date fixed for the
determination of shareholders entitled to receive such
rights, warrants or convertible securities, then the
Conversion Price in effect at the opening of business
on the day following the date fixed for such
determination shall be reduced by multiplying such
Conversion Price by a fraction the numerator of which
shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed
for such determination plus the number of shares of
Common Stock that the aggregate of the offering price
of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at
such current market price and the denominator of which
shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed
for such determination plus the number of shares of
Common Stock so offered for subscription or purchase.
For the purposes of this subparagraph (2), the number
of shares of Common Stock at any time outstanding shall
not include shares held in the treasury of the
Corporation.
3. If the outstanding shares of Common
Stock shall be subdivided into a greater number of
shares of Common Stock, then the Conversion Price in
effect at the opening of business on the day following
the day upon which such subdivision becomes effective
shall be reduced proportionately in the manner provided
in subparagraph (1) above, and, conversely, if the
outstanding shares of Common Stock shall each be
combined into a smaller number of shares of Common
Stock, then the Conversion Price in effect at the
opening of business on the day following the day upon
which such combination becomes effective shall be
proportionately increased.
4. If the Corporation shall, by dividend or
otherwise, distribute to all holders of its Common
Stock evidences of its indebtedness or cash or other
assets (excluding any dividend or distribution referred
to in subparagraph (1) above, any rights, warrants or
convertible securities referred to in subparagraph (2)
above, and any dividend payable solely in cash from the
earnings of the Corporation), then in each case the
Conversion Price shall be adjusted so that the
Conversion Price shall equal the price determined by
multiplying the Conversion Price in effect immediately
prior to the close of business on the record date for
the determination of holders of Common Stock entitled
to receive such distribution by a fraction the
numerator of which shall be the current market price
per share (determined as provided in subparagraph (6)
below) of the Common Stock on such record date less the
then fair market value per share (determined solely by
the Board of Directors and described in a statement
filed with the Transfer Agent) of the cash or other
assets or evidences of indebtedness so distributed (and
for which an adjustment to the Conversion Price has not
previously been made pursuant to the terms of this
paragraph (f)) applicable to one share of Common Stock
and the denominator of which shall be such current
market price per share of the Common Stock.
5. The reclassification of Common Stock
into securities, including securities other than Common
Stock (other than any reclassification upon a
consolidation, merger or statutory share exchange to
which subparagraph (9) below applies), shall be deemed
to involve (A) a distribution of such securities other
than Common Stock to all holders of Common Stock and
the effective date of such reclassification shall be
deemed to be "the date fixed for the determination of
shareholders entitled to receive such distribution" and
"the date fixed for such determination" within the
meaning of subparagraph (2) above, and (B) a
subdivision or combination, as the case may be, of the
number of shares of Common Stock outstanding
immediately prior to such reclassification into the
number of shares of Common Stock outstanding
immediately thereafter and the effective date of such
reclassification shall be deemed to be "the day upon
which such subdivision becomes effective" or "the day
upon which such combination becomes effective," as the
case may be, and "the day upon which such subdivision
or combination becomes effective" within the meaning of
subparagraph (3) above.
6. For the purpose of any computation under
subparagraphs (2) and (4) above, the current market
price per share of Common Stock on any day shall be
deemed to be the average of the last reported sale
price for the 20 consecutive Trading Days selected by
the Board of Directors commencing no more than 30
Trading Days before and ending no later than the day
before the day in question on the NYSE (or, if the
Common Stock is not then traded on the NYSE, then the
last reported sale price on such other national
securities exchange on which the Common Stock is listed
or admitted to trading or, if not then listed or
admitted to trading on any national securities
exchange, then the last quoted bid price in the over-
the-counter market as reported by NASDAQ or any similar
system of automated dissemination of securities
prices).
7. No adjustment in the Conversion Price
shall be required unless such adjustment would require
an increase or decrease of at least 1% of such price;
provided, however, that any adjustments which by reason
of this subparagraph (7) are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment and provided, further, that any
adjustment shall be made in accordance with the
provisions of this paragraph (f) (other than this
subparagraph (7)) not later than such time as may be
required in order to preserve the tax-free nature of a
distribution to the holders of shares of Common Stock.
Anything in this subparagraph (7) to the contrary
notwithstanding, the Corporation shall be entitled to
make such reductions in the Conversion Price, in
addition to those required by this paragraph (f), as it
in its discretion shall determine to be advisable in
order that any stock dividend, subdivision or
combination of shares, distribution of capital stock or
rights or warrants to purchase stock or securities, or
distribution of evidences of indebtedness or assets
(other than cash dividends or distributions paid from
retained earnings) hereafter made by the Corporation to
its shareholders be a tax-free distribution for federal
income tax purposes. All calculations shall be made to
the nearest cent.
8. Whenever the Conversion Price is
adjusted as herein provided, the Corporation shall
promptly deliver to the Transfer Agent an officer's
certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of
the facts requiring such adjustment, which certificate
shall constitute conclusive evidence, absent manifest
error, of the correctness of such adjustment. Promptly
after delivery of such certificate, the Corporation
shall prepare and mail a notice to each holder of
Series K Shares at each such holder's last address as
the same appears on the books of the Corporation, which
notice shall set forth the Conversion Price and a brief
statement of the facts requiring the adjustment.
9. If the Corporation shall be a party to
any transaction, including, without limitation, a
merger, consolidation or statutory share exchange but
excluding a reincorporation merger and any transaction
as to which subparagraphs (1) through (5) apply, in
which shares of Common Stock shall be converted into
the right to receive securities, cash or other property
(or any combination thereof) (each of the foregoing
being referred to herein as a "Transaction"), then each
holder of Series K Shares outstanding shall have the
right thereafter to convert such shares only into the
kind and amount of securities, cash and other property
receivable in connection with such Transaction by a
holder of the number of shares of Common Stock into
which such Series K Shares might have been converted
immediately prior to such Transaction, assuming such
holder of Common Stock (A) is not an entity with which
the Corporation consolidated, into which the
Corporation merged, that merged into the Corporation,
that engaged in a share exchange, or to which such sale
or transfer was made, as the case may be (a
"constituent entity"), or an affiliate of a constituent
entity, (B) did not exercise dissenters' rights with
respect to such Transaction and (C) failed to exercise
his rights of election, if any, as to the kind or
amount of securities, cash or other property receivable
in connection with such Transaction (provided that if
the kind or amount of securities, cash and other
property receivable in connection with such Transaction
is not the same for each share of Common Stock held
immediately prior to such Transaction by holders other
than a constituent entity 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 subparagraph (9) the kind and
amount of securities, cash and other property
receivable in connection with such Transaction by each
non-electing share shall be deemed to be the kind and
amount so receivable per share by all or a plurality of
the non-electing shares). If necessary, appropriate
adjustment shall be made in the application of the
provisions set forth herein with respect to the rights
and interests thereafter of the holders of Series K
Shares so that the provisions set forth herein shall
thereafter correspondingly be made applicable, as
nearly as may reasonably be, in relation to any shares
of stock or other securities or property thereafter
deliverable on the conversion of the shares. Any such
adjustment shall be evidenced by a certificate of
independent public accountants and a notice of such
adjustment filed and mailed in the manner set forth in
subparagraph (8) above, and each containing the
information set forth in such subparagraph (8); and any
adjustment so certified shall for all purposes hereof
conclusively be deemed to be an appropriate adjustment.
The above provisions shall similarly apply to
successive Transactions.
10. For purposes of this paragraph (f),
"Common Stock" includes any stock of any class of the
Corporation that has no preference in respect of
dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or
winding up of the Corporation and that is not subject
to redemption by the Corporation. However, subject to
the provisions of subparagraph (9) above, shares
issuable on conversion of Series K Shares shall include
only shares of the class designated as Common Stock of
the Corporation on the date of the initial issuance of
Series K Shares by the Corporation, or shares of any
class or classes resulting from any reclassification
thereof that have no preference in respect of dividends
or amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of
the Corporation and that are not subject to redemption
by the Corporation; provided that if at any time there
shall be more than one such resulting class, the shares
of each such class then so issuable shall be
substantially in the proportion that the total number
of shares of such class resulting from all such
reclassifications bears to the total number of shares
of all such classes resulting from all such
reclassifications.
(g) The Corporation shall pay any and all
documentary stamp or similar issue or transfer taxes payable
in respect of the issuance or delivery of shares of Common
Stock in connection with conversions of Series K Shares
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 issuance or delivery
of shares of Common Stock in a name other than that of the
record holder of the Series K Shares 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 has established,
to the satisfaction of the Corporation, that such tax has
been paid.
(h) The Corporation covenants that (A) all shares
of Common Stock that may be issued upon conversions of
Series K Shares will upon issuance be duly and validly
issued, fully paid and nonassessable, free of all liens and
charges and not subject to any preemptive rights, and (B) 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 conversions of Series K Shares, the whole
number of shares of Common Stock deliverable upon the
conversion of all outstanding Series K Shares.
(5) The holders of Series K Shares shall have the
following liquidation rights and preferences:
(a) Upon any voluntary or involuntary
dissolution, liquidation, or winding up of the Corporation
(for the purposes of this subsection (5), a "Liquidation"),
the holder of each Series K Share then outstanding shall be
entitled to be paid out of the assets of the Corporation
available for distribution to its shareholders an amount
equal to $25.00 per share plus all dividends (whether or not
declared or due) accrued and unpaid on such share through
the date fixed for the distribution of assets of the
Corporation to the holders of Series K Shares. With respect
to the distribution of the Corporation's assets upon a
Liquidation, the Series K Shares shall rank prior to Junior
Securities, pari passu with the Parity Securities and junior
to the Senior Securities.
(b) If upon any Liquidation of the Corporation,
the assets available for distribution to the holders of
Series K Shares and any Parity Securities then outstanding
shall be insufficient to pay in full the liquidation
distributions to the holders of the outstanding Series K
Shares and Parity Securities in accordance with the terms of
these Articles of Incorporation, then the holders of such
shares shall share ratably in such distribution of assets.
(c) Neither the voluntary sale, conveyance,
lease, pledge, exchange or transfer of all or substantially
all the property or assets of the Corporation, the merger or
consolidation of the Corporation into or with any other
corporation, the merger of any other corporation into the
Corporation, a statutory share exchange with any other
corporation, nor any purchase or redemption of some or all
of the shares of any class or series of stock of the
Corporation, shall be deemed to be a Liquidation of the
Corporation for the purposes of this subsection (5) (unless
in connection therewith the Liquidation of the Corporation
is specifically approved).
(d) The holder of any Series K Shares shall not
be entitled to receive any payment owed for such shares
under this subsection (5) until such holder shall cause to
be delivered to the Corporation the certificate or
certificates representing such Series K Shares and transfer
instruments satisfactory to the Corporation and sufficient
to transfer such Series K Shares to the Corporation free of
any adverse interest or claim. No interest shall accrue on
any payment upon Liquidation.
(e) After payment of the full amount of the
liquidating distribution to which they are entitled, the
holders of Series K Shares will not be entitled to any
further participation in any distribution of assets by the
Corporation.
(6) The Series K Shares is not entitled to any
preemptive or subscription rights in respect of any securities of
the Corporation.
H. Junior Preferred Stock. The Corporation's Series AA
Junior Participating Preferred Stock (the "Junior Preferred
Stock") shall consist of 300,000 shares of Preferred Stock.
(1) The rights of the holders of Junior Preferred
Stock to dividends and distributions shall be as follows:
(a) Subject to the provisions for adjustment
hereinafter set forth, the holders of shares of Junior
Preferred Stock shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally
available for the purpose, (i) cash dividends in an amount
per share (rounded to the nearest cent) equal to 100 times
the aggregate per share amount of all cash dividends
declared or paid on the Common Stock, and (ii) a preferen-
tial cash dividend ("Preferential Dividends"), if any, on
the 15th day of March, June, September, and December of each
year or, if such 15th day is not a business day, on the bus-
iness day immediately preceding such 15th day (each a
"Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of
a share or fraction of a share of Junior Preferred Stock, in
an amount equal to $21.00 per share of Junior Preferred
Stock less the per share amount of all cash dividends
declared on the Junior Preferred Stock pursuant to clause
(i) of this sentence since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issu-
ance of any share or fraction of a share of Junior Preferred
Stock. In the event this Corporation shall, at any time af-
ter the issuance of any share or fraction of a share of
Junior Preferred Stock, make any distribution on the shares
of Common Stock, whether by way of a dividend or a reclassi-
fication of stock, a recapitalization, reorganization or
partial liquidation of the Corporation or otherwise, which
is payable in cash or any debt security, debt instrument,
real or personal property or any other property (other than
cash dividends subject to clause (i) of the immediately
preceding sentence and other than a distribution of shares
of Common Stock or other capital stock of this Corporation
and other than a distribution of rights or warrants to
acquire any such share, including any debt security
convertible into or exchangeable for any such share, at a
price less than the Current Market Price of such share),
then and in each such event this Corporation shall
simultaneously pay on each then outstanding share of Junior
Preferred Stock a distribution, in like kind, of 100 times
(subject to the provisions for adjustment hereinafter set
forth) such distribution paid on a share of Common Stock.
The dividends and distributions on the Junior Preferred
Stock to which holders thereof are entitled pursuant to
clause (i) of the first sentence of this paragraph and
pursuant to the second sentence of this paragraph are
hereinafter referred to as "Participating Dividends," and
the multiple of such cash and non-cash dividends on the
Common Stock applicable to the determination of the
Participating Dividends, which shall be 100 initially but
shall be adjusted from time to time as hereinafter provided,
is hereinafter referred to as the "Dividend Multiple." In
the event this Corporation shall at any time declare or pay
any dividend or make any distribution on Common Stock
payable in shares of Common Stock, or effect a subdivision
or split or a combination, consolidation or reverse split of
the outstanding shares of Common Stock into a greater or
lesser number of shares of Common Stock, then in each such
case the Dividend Multiple thereafter applicable to the
determination of the amount of Participating Dividends which
holders of shares of Junior Preferred Stock shall be
entitled to receive shall be the Dividend Multiple
applicable immediately prior to such event multiplied by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) This Corporation shall declare each
Participating Dividend at the same time it declares any cash
or non-cash dividend or distribution on the Common Stock in
respect of which a Participating Dividend is required to be
paid. No cash or non-cash dividend or distribution on the
Common Stock in respect of which a Participating Dividend is
required to be paid shall be paid or set aside for payment
on the Common Stock unless a Participating Dividend in
respect of such dividend or distribution on the Common Stock
shall be simultaneously paid, or set aside for payment, on
the Junior Preferred Stock.
(c) Preferential Dividends shall begin to accrue
on outstanding shares of Junior Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issuance of any shares of Junior Preferred Stock. Accrued
but unpaid Preferential Dividends shall cumulate but shall
not bear interest. Preferential Dividends paid on the
shares of Junior Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time
outstanding.
(2) The holders of shares of Junior Preferred Stock
shall have the following voting rights:
(a) Subject to the provisions for adjustment
hereinafter set forth, each share of Junior Preferred Stock
shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of the shareholders of this Corporation.
The number of votes which a holder of Junior Preferred Stock
is entitled to cast, as the same may be adjusted from time
to time as hereinafter provided, is hereinafter referred to
as the "Vote Multiple." In the event this Corporation shall
at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision
or split or a combination, consolidation or reverse split of
the outstanding shares of Common Stock into a greater or
lesser number of shares of Common Stock, then in each such
case the Vote Multiple thereafter applicable to the
determination of the number of votes per share to which
holders of shares of Junior Preferred Stock shall be
entitled after such event shall be the Voting Multiple
immediately prior to such event multiplied by a fraction,
the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by
law, the holders of shares of Junior Preferred Stock and the
holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of shareholders of
this Corporation.
(c) The holder of a fractional share of Junior
Preferred Stock may vote any such fractional share in
increments of 1/100 of a share on all matters submitted to a
vote of the shareholders of this Corporation such that the
holder of a fractional share of Junior Preferred Stock may
cast one vote for each one hundredth of a share of Junior
Preferred Stock held of record by him.
(d) In the event that the Preferential Dividends
accrued on the Junior Preferred Stock for four or more
quarterly dividend periods, whether consecutive or not,
shall not have been declared and paid or set apart for
payment, the holders of record of the Junior Preferred Stock
shall have the right, at the next meeting of shareholders
called for the election of directors, voting as a class to
elect two members to the Board of Directors, which directors
shall be in addition to the number provided for under the
By-laws prior to such event, to serve until the next Annual
Meeting and until their successors are elected and qualified
or their earlier resignation, removal or incapacity or until
such earlier time as all accrued and unpaid Preferential
Dividends upon the outstanding shares of Junior Preferred
Stock shall have been paid (or set aside for payment) in
full. The holders of shares of Junior Preferred Stock shall
continue to have the right to elect directors as provided by
the immediately preceding sentence until all accrued and
unpaid Preferential Dividends upon the outstanding shares of
Junior Preferred Stock shall have been paid (or set aside
for payment) in full. Such directors may be removed and
replaced by such shareholders, and vacancies in such direc-
torships may be filled only by such shareholders (or by the
remaining director elected by such shareholders, if there be
one) in the manner permitted by law; provided, however, that
any such action by shareholders shall be taken at a meeting
of shareholders and shall not be taken by written consent
thereof.
(e) Except as otherwise required by law or set
forth herein, holders of Junior Preferred Stock shall have
no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for the
taking of any corporate action.
(3) This Corporation shall abide by the following
restrictions:
(a) Whenever Preferential Dividends or
Participating Dividends are in arrears or this Corporation
shall be in default in payment thereof, thereafter and until
all accrued and unpaid Preferential Dividends and
Participating Dividends, whether or not declared, on shares
of Junior Preferred Stock outstanding shall have been paid
or set aside for payment in full, and in addition to any and
all other rights which any holder of shares of Junior
Preferred Stock may have in such circumstances, the
Corporation shall not:
1. declare or pay dividends on, make any
other distributions on, or redeem or purchase or
otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to, the Junior
Preferred Stock;
2. declare or pay dividends on or make any
other distributions on any shares of stock ranking on a
parity as to dividends with the Junior Preferred Stock,
unless dividends are paid ratably on the Junior
Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such
shares are then entitled;
3. except as permitted by subparagraph (4)
below, redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation,
dissolution or winding up) with the Junior Preferred
Stock, provided that this Corporation may at any time
redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any stock
of the Corporation ranking junior (both as to dividends
and upon liquidation, dissolution or winding up) to the
Junior Preferred Stock; or
4. purchase or otherwise acquire for
consideration any shares of Junior Preferred Stock, or
any shares of stock ranking on a parity with the Junior
Preferred Stock (either as to dividends or upon
liquidation, dissolution or winding up), except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the
Board of Directors, after consideration of the
respective annual dividend rates and other relative
rights and preferences of the respective series and
classes, shall determine in good faith will result in
fair and equitable treatment among the respective
series or classes.
(b) This Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise
acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph
(a) of this Section 3, purchase or otherwise acquire such
shares at such time and in such manner.
(c) This Corporation shall not issue any shares
of Junior Preferred Stock except upon exercise of Rights
issued pursuant to that certain Rights Agreement dated as of
November 17, 1986 between the Corporation and the Rights
Agent named therein or any comparable agreement entered into
after the expiration date thereof (the "Rights Agreement"),
a copy of which is on file with the Secretary of the
Corporation at its principal executive office and shall be
made available to shareholders of record without charge upon
written request therefor addressed to said Secretary.
Notwithstanding the foregoing sentence, nothing contained in
the provisions hereof shall prohibit or restrict this
Corporation from issuing for any purpose any series of
preferred stock with rights and privileges similar to,
different from, or greater than, those of the Junior
Preferred Stock.
(4) Any shares of Junior Preferred Stock purchased or
otherwise acquired by this Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition
thereof. This Corporation shall cause all such shares upon their
retirement and cancellation to become authorized but unissued
shares of preferred stock, without designation as to series, and
such shares may be reissued as part of a new series of preferred
stock to be created by resolution or resolutions of the Board of
Directors.
(5) Upon any voluntary or involuntary liquidation,
dissolution or winding up of this Corporation, no distribution
shall be made (a) to the holders of shares of stock ranking
junior to the Junior Preferred Stock (upon liquidation,
dissolution or winding up) unless the holders of shares of Junior
Preferred Stock shall have received, subject to adjustment as
hereinafter provided, the greater of either (i) $8,500 per share
plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment, or (ii) the amount equal to 100 times the aggregate
amount to be distributed per share to holders of Common Stock, or
(b) to the holders of stock ranking on a parity upon liquidation,
dissolution or winding up with the Junior Preferred Stock, unless
simultaneously therewith distributions are made ratably on the
Junior Preferred Stock and all other shares of such parity stock
in proportion to the total amounts to which the holders of shares
of Junior Preferred Stock are entitled under clause (a)(i) of
this sentence and to which the holders of such parity shares are
entitled, in each case upon such liquidation, dissolution or
winding up. The amount to which holders of Junior Preferred
Stock shall be entitled upon liquidation, dissolution or winding
up of this Corporation pursuant to clause (a)(ii) of the
foregoing sentence is hereinafter referred to as the
"Participating Liquidation Amount" and the multiple of the amount
to be distributed to holders of shares of Common Stock upon the
liquidation, dissolution or winding up of this Corporation
applicable pursuant to said clause to the determination of the
Participating Liquidation Amount, which shall be 100 initially
but shall be adjusted from time to time as hereinafter provided,
is hereinafter referred to as the "Liquidation Multiple." In the
event this Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or split or a combination, consolidation or
reverse split of the outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, then in each
such case the Liquidation Multiple therefor applicable to the
determination of the Participating Liquidation Amount to which
holders of Junior Preferred Stock shall be entitled after such
event shall be the Liquidation Multiple applicable immediately
prior to such event multiplied by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding
immediately prior to such event.
(6) The holders of shares of Junior Preferred Stock
shall have the following rights:
(a) In the event that holders of shares of Common
Stock of this Corporation receive in respect of their shares
of Common Stock any share of capital stock of this
Corporation (other than any share of Common Stock of the
Corporation), whether by way of reclassification,
recapitalization, reorganization, dividend or other
distribution or otherwise ("Transaction"), then and in each
such event the dividend rights, voting rights and rights
upon the liquidation, dissolution or winding up of this
Corporation of the shares of Junior Preferred Stock shall be
adjusted so that after such event the holders of Junior
Preferred Stock shall be entitled, in respect of each share
of Junior Preferred Stock held, in addition to such rights
in respect thereof to which such holder was entitled
immediately prior to such adjustment, to (i) such additional
dividends as equal the Dividend Multiple in effect
immediately prior to such Transaction multiplied by the
additional dividends which the holder of a share of Common
Stock shall be entitled to receive by virtue of the receipt
in the Transaction of such capital stock, (ii) such
additional voting rights as equal the Vote Multiple in
effect immediately prior to such Transaction multiplied by
the additional voting rights which the holder of a share of
Common Stock shall be entitled to receive by virtue of the
receipt in the Transaction of such capital stock and (iii)
such additional distributions upon liquidation, dissolution
or winding up of this Corporation as equal the Liquidation
Multiple in effect immediately prior to such Transaction
multiplied by the additional amount which the holder of a
share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of this Corporation
by virtue of the receipt in the Transaction of such capital
stock, as the case may be, all as provided by the terms of
such capital stock.
(b) In the event that holders of shares of Common
Stock of this Corporation receive in respect of their shares
of Common Stock any right or warrant to purchase Common
Stock (including as such a right, for all purposes of this
paragraph, any security convertible into or exchangeable for
Common Stock) at a purchase price per share less than the
Current Market Price (as hereinafter defined) of a share of
Common Stock on the date of issuance of such right or
warrant, then and in each such event the dividend rights,
voting rights and rights upon the liquidation, dissolution
or winding up of this Corporation of the shares of Junior
Preferred Stock shall each be adjusted so that after such
event the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple shall each be the product of the
Dividend Multiple, the Vote Multiple and the Liquidation
Multiple, as the case may be, in effect immediately prior to
such event multiplied by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus
the maximum number of shares of Common Stock which could be
acquired upon exercise in full of all such rights or
warrants and the denominator of which shall be the number of
shares of Common Stock outstanding immediately before such
issuance of rights or warrants plus the number of shares of
Common Stock which could be purchased, at the Current Market
Price of the Common Stock at the time of such issuance, by
the maximum aggregate consideration payable upon exercise in
full of all such rights or warrants.
(c) In the event that holders of shares of Common
Stock of this Corporation receive in respect of their shares
of Common Stock any right or warrant to purchase capital
stock of this Corporation (other than shares of Common
Stock), including as such a right, for all purposes of this
paragraph, any security convertible into or exchangeable for
capital stock of this Corporation (other than Common Stock),
at a purchase price per share less than the Current Market
Price of such shares of capital stock on the date of
issuance of such right or warrant, then and in each such
event the dividend rights, voting rights and rights upon
liquidation, dissolution or winding up of this Corporation
of the shares of Junior Preferred Stock shall each be
adjusted so that after such event each holder of a share of
Junior Preferred Stock shall be entitled, in respect of each
share of Junior Preferred Stock held, in addition to such
rights in respect thereof to which such holder was entitled
immediately prior to such event, to receive (i) such
additional dividends as equal the Dividend Multiple in
effect immediately prior to such event multiplied, first, by
the additional dividends to which the holder of shares of
Common Stock shall be entitled upon exercise of such right
or warrant by virtue of the capital stock which could be
acquired upon such exercise and multiplied again by the
Discount Fraction (as hereinafter defined) and (ii) such
additional voting rights as equal the Vote Multiple in
effect immediately prior to such event multiplied, first, by
the additional voting rights to which the holder of a share
of Common Stock shall be entitled upon exercise of such
right or warrant by virtue of the capital stock which could
be acquired upon such exercise and multiplied again by the
Discount Fraction and (iii) such additional distributions
upon liquidation, dissolution or winding up of this
Corporation as equal the Liquidation Multiple in effect
immediately prior to such event multiplied, first, by the
additional amount which the holder of a share of Common
Stock shall be entitled to receive upon liquidation,
dissolution or winding up of this Corporation upon exercise
of such right or warrant by virtue of the capital stock
which could be acquired upon such exercise and multiplied
again by the Discount Fraction. For purposes of this
paragraph, the "Discount Fraction" shall be a fraction, the
numerator of which shall be the difference between the
Current Market Price (as hereinafter defined) of a share of
the capital stock subject to a right or warrant distributed
to the holders of shares of Common Stock of this Corporation
as contemplated by this paragraph immediately after the
distribution thereof and the purchase price per share for
such share of capital stock pursuant to such right or
warrant and the denominator of which shall be the Current
Market Price of a share of such capital stock immediately
after the distribution of such right or warrant.
(d) For purposes of this Section (6), the
"Current Market Price" of a share of capital stock of this
Corporation (including a share of Common Stock) on any date
shall be deemed to be the average of the daily closing
prices per share thereof over the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately prior
to such date; provided, however, that, in the event that
such Current Market Price of any such share of capital stock
is determined during a period which includes any date that
is within 30 Trading Days after the ex-dividend date for (i)
a dividend or distribution on stock payable in shares of
such stock or securities convertible into shares of such
stock, or (ii) any subdivision, split, combination,
consolidation, reverse stock split or reclassification of
such stock, then, and in each such case, the Current Market
Price shall be appropriately adjusted by the Board of
Directors of this Corporation to reflect the Current Market
Price of such stock to take into account ex-dividend
trading. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked
prices, regular way in either case as reported in the
principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the
New York Stock Exchange, or, if the shares are not listed or
admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the shares are listed
or admitted to trading or, if the shares are not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter
market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or if on any
such date the shares are not quoted by any such organ-
ization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in
the shares selected by the Board of Directors of this
Corporation. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which
the shares are listed or admitted to trading is open for the
transaction of business or, if the shares are not listed or
admitted to trading on any national securities exchange, on
which the New York Stock Exchange or such other national
securities exchange as may be selected by the Board of
Directors of this Corporation is open. If the shares are
not publicly held or not so listed or traded on any day
within the period of 30 Trading Days applicable to the
determination of Current Market Price thereof as aforesaid,
"Current Market Price" shall mean the fair market value
thereof per share as determined in good faith by the Board
of Directors of this Corporation. In either case referred
to in the foregoing sentence, the determination of Current
Market Price shall be described in a statement filed with
the Secretary of the Corporation.
(7) In case this Corporation shall enter into any
consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other property, then
in any such case each outstanding share of Junior Preferred Stock
shall at the time be similarly exchanged for or changed into the
aggregate amount of stock, securities, cash and/or other property
(payable in like kind), as the case may be, for which or into
which each share of Common Stock is changed or exchanged multi-
plied by the highest of the Vote Multiple, the Dividend Multiple
or the Liquidation Multiple in effect immediately prior to such
event.
(8) Adjustments to the Junior Preferred Stock required
by the provisions hereof shall be effective as of the time at
which the event requiring such adjustments occurs. This
Corporation shall give prompt written notice to each holder of a
share of Junior Preferred Stock of the effect of any adjustment
to the voting rights, dividend rights or rights upon liquidation,
dissolution or winding up of this Corporation of such shares re-
quired by the provisions hereof. Notwithstanding the foregoing
sentence, the failure of this Corporation to give such notice
shall not affect the validity of or the force or effect of or the
requirement for such adjustment.
(9) The shares of Junior Preferred Stock shall not be
redeemable at the option of this Corporation or any holder there-
of. Notwithstanding the foregoing sentence of this Section, this
Corporation may acquire shares of Junior Preferred Stock in any
other manner permitted by law, the provisions hereof and the
Articles of Incorporation of the Corporation.
(10) Unless otherwise provided in these Articles of
Incorporation, the Junior Preferred Stock shall rank junior to
all other series of the Corporation's preferred stock (as to the
payment of dividends and the distribution of assets on
liquidation, dissolution or winding up) and senior to the Common
Stock.
(11) The provisions of this Section of the Articles of
Incorporation shall not be amended in any manner which would
materially affect the rights, privileges or powers of the Junior
Preferred Stock without, in addition to any other vote of
shareholders required by law, the affirmative vote of the holders
of 80% or more of the outstanding shares of Junior Preferred
Stock, voting together as a single class.
ARTICLE IV
Directors
A. Number of Directors. The business and affairs of this
Corporation shall be managed under the direction of the Board of
Directors. The number of directors comprising the Board of
Directors of this Corporation (exclusive of directors who may be
elected by the holders of any one or more series of Preferred
Stock voting separately) shall be 14 unless otherwise determined
from time to time by resolution adopted by the affirmative votes
of both (i) 80% of the directors then in office and (ii) a
majority of the Continuing Directors (as defined in Article
V(D)), voting as a separate group, provided, however, that no
decrease in the number of directors shall shorten the term of any
incumbent director.
B. Classification. The Board of Directors, other than
those who may be elected by the holders of any one or more series
of Preferred Stock voting separately, shall be divided, with
respect to the time during which they shall hold office, into
three classes, designated Class I, II and III, as nearly equal in
number as possible. Any increase or decrease in the number of
directors shall be apportioned by the Board of Directors so that
all classes of directors shall be as nearly equal in number as
possible. At each annual meeting of shareholders, directors
chosen to succeed those whose terms then expire shall be elected
to hold office for a term expiring at the annual meeting of
shareholders held in the third year following the year of their
election and until their successors are duly elected and
qualified.
C. Vacancies. Except as provided in Article IV(G) hereof,
any vacancy on the Board (including any vacancy resulting from an
increase in the authorized number of directors or from a failure
of the shareholders to elect the full number of authorized
directors) may, notwithstanding any resulting absence of a quorum
of directors, be filled only by the Board of Directors, acting by
vote of both (i) a majority of the directors then in office and
(ii) a majority of all the Continuing Directors, voting as a
separate group, and any director so appointed shall serve until
the next shareholders' meeting held for the election of directors
of the class to which he shall have been appointed and until his
successor is duly elected and qualified.
D. Removal. Subject to Article IV(G) hereof and
notwithstanding any other provisions of these Articles or the
Bylaws of this Corporation, any director or the entire Board of
Directors may be removed at any time, but only for cause, by the
affirmative vote at a meeting of shareholders called for such
purpose of the holders of both (i) a majority of the Total Voting
Power (as defined in Article V(D) hereof) entitled to be cast by
the holders of Voting Stock (as defined in Article V(D) hereof),
voting together as a single class, and (ii) a majority of the
Total Voting Power entitled to be cast by the Independent
Shareholders (as defined in Article V(D) hereof), voting as a
separate group. At the same meeting in which the shareholders
remove one or more directors, a successor or successors may be
elected for the unexpired term of the director or directors
removed. Except as set forth in this Article, directors shall
not be subject to removal.
E. Tender Offers and Other Extraordinary Transactions. In
connection with the exercise of its judgment in determining what
is in the best interest of the Corporation and its stockholders
when evaluating a Business Combination (as defined in Article
V(D) hereof) or a tender or exchange offer or a proposal by
another Person or Persons to make a tender or exchange offer, the
Board of Directors of the Corporation shall consider, in addition
to the adequacy of the amount to be paid in connection with any
such transaction, all of the following factors and any other
factors which it deems relevant: (i) the social and economic
effects of the transaction on the Corporation and its
subsidiaries, and their respective employees, customers,
creditors and other elements of the communities in which they
operate or are located, (ii) the business and financial condition
and earnings prospects of the acquiring Person or Persons,
including, but not limited to, debt service and other existing or
likely financial obligations of the acquiring Person or Persons,
and the possible effect of such conditions upon the Corporation
and its Subsidiaries and the other elements of the communities in
which the Corporation and its subsidiaries operate or are
located, and (iii) the competence, experience and integrity of
the acquiring Person or Persons and its or their management.
F. Board Qualifications. (1) Except as otherwise
provided in Article IV(G) hereof, no person shall be eligible for
nomination, election or service as a director of the Corporation
who shall:
(a) in the opinion of the Board of Directors fail
to respond satisfactorily to the Corporation respecting any
inquiry of the Corporation for information to enable the
Corporation to make any certification required by the
Federal Communications Commission under the Anti-Drug Abuse
Act of 1988 or to determine the eligibility of such person
under this Article;
(b) have been arrested or convicted of any
offense concerning the distribution or possession of, or
trafficking in, drugs or other controlled substances,
provided that in the case of an arrest the Board of
Directors may in its discretion determine that
notwithstanding such arrest such persons shall remain
eligible under this Article; or
(c) have engaged in actions that could lead to
such an arrest or conviction and that the Board of Directors
determines would make it unwise for such person to serve as
a director of the Corporation.
(2) Any person serving as a director of the
Corporation shall automatically cease to be a director on such
date as he ceases to have the qualifications set forth in
paragraph (1) above, and his position shall be considered vacant
within the meaning of Article IV(C) hereof.
G. Directors Elected by Preferred Shareholders.
Notwithstanding anything in these Articles of Incorporation to
the contrary, whenever the holders of any one or more series of
Preferred Stock shall have the right, voting separately as a
class, to elect one or more directors of the Corporation, the
provisions of these Articles of Incorporation (as they may be
duly amended from time to time) fixing the rights and preferences
of such Preferred Stock shall govern with respect to the
nomination, election, term, removal, vacancies or other related
matters with respect to such directors.
ARTICLE V
Certain Business Combinations
A. Vote Required in Business Combinations. No Business
Combination may be effected unless all of the following
conditions have been fulfilled:
(1) In addition to any vote otherwise required by law
or these Articles, the proposal to effect a Business Combination
shall have been approved by (i) a majority of the directors then
in office and a majority of the Continuing Directors and (ii) by
the affirmative votes of both of the following:
(a) 80% of the Total Voting Power entitled to be
cast by holders of outstanding shares of Voting Stock of
this Corporation, voting as a separate voting group; and
(b) Two-thirds of the Total Voting Power entitled
to be cast by the Independent Stockholders present or duly
represented at a meeting, voting as a separate voting group.
(2) A proxy or information statement describing the
proposed Business Combination and complying with the requirements
of the Securities Exchange Act of 1934, as amended (the "Act"),
and the rules and regulations thereunder (or any subsequent
provisions replacing the Act, rules or regulations as a whole or
in part) is mailed to all shareholders of the Corporation at
least 30 days prior to the consummation of such Business
Combination (regardless of whether such proxy or information
statement is required pursuant to the Act or subsequent
provisions).
B. Nonapplicability of Voting Requirements. The vote
required by Paragraph A of this Article does not apply to a
Business Combination if all conditions specified in either of
paragraphs 1 or 2 below are met:
(1) The proposed Business Combination is approved
prior to the time the Related Person involved in the proposed
transaction became a Related Person by the affirmative votes of
both a majority of the directors then in office and a majority of
the Continuing Directors, voting as a separate group.
(2) All of the following five conditions have been
met:
(a) The aggregate amount of the cash and the
Market Value on the Valuation Date of consideration other
than cash to be received per share by all holders of Common
Stock in such Business Combination is at least equal to the
highest of the following:
1. the highest per share price, including
any brokerage commissions, transfer taxes and
soliciting dealers' fees, paid by or on behalf of the
Related Person for any shares of Common Stock of the
same class or series acquired by it within the two-year
period immediately prior to the Announcement Date or in
the transaction in which it became a Related Person,
whichever is higher;
2. The Market Value per share of Common
Stock of the same class or series on the Announcement
Date or on the Determination Date, whichever is higher;
or
3. The price per share equal to the Market
Value per share of Common Stock of the same class or
series determined pursuant to clause (2) immediately
preceding, multiplied by the fraction of (i) the
highest per share price, including any brokerage
commissions, transfer taxes and soliciting dealers'
fees, paid by or for the Related Person for any shares
of Common Stock of the same class or series acquired by
it within the two-year period immediately prior to the
Announcement Date, over (ii) the Market Value per share
of Common Stock of the same class or series on the
first day in such two-year period on which the Related
Person acquired any shares of Common Stock.
(b) The aggregate amount of the cash and the
Market Value as of the Valuation Date of consideration other
than cash to be received per share by holders of shares of
any class or series of outstanding stock other than Common
Stock is at least equal to the highest of the following,
whether or not the Related Person has previously acquired
any shares of a particular class or series of stock:
1. The highest per share price, including
any brokerage commissions, transfer taxes and
soliciting dealers' fees, paid by or for the Related
Person for any shares of such class of stock acquired
by it within the two-year period immediately prior to
the Announcement Date or in the transaction in which it
became a Related Person, whichever is higher;
2. The highest preferential amount per
share to which the holders of shares of such class of
stock are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of
this Corporation;
3. The Market Value per share of such class
of stock on the Announcement Date or on the
Determination Date, whichever is higher; or
4. The price per share equal to the Market
Value per share of such class of stock determined
pursuant to clause (3) immediately preceding,
multiplied by the fraction of (i) the highest per share
price, including any brokerage commissions, transfer
taxes and soliciting dealers' fees, paid by or for the
Related Person for any shares of any class of Voting
Stock acquired by it within the two-year period
immediately prior to the Announcement Date, over (ii)
the Market Value per share of the same class of Voting
Stock on the first day in such two-year period on which
the Related Person acquired any shares of the same
class of Voting Stock.
(c) The consideration to be received by holders
of any class or series of outstanding stock is to be in cash
or in the same form as the Related Person has previously
paid for shares of the same class or series of stock. If
the Related Person has paid for shares of any class of stock
with varying forms of consideration, the form of
consideration for such class of stock shall be either cash
or the form used to acquire the largest number of shares of
such class or series of stock previously acquired by it.
(d) After the Related Person has become a Related
Person and prior to the consummation of such Business
Combination:
1. There shall have been no failure to
declare and pay at the regular date therefor any
full periodic dividends, cumulative or not, on any
outstanding Preferred Stock of this Corporation;
2. There shall have been no reduction in
the annual rate of dividends paid on any class or
series of stock of this Corporation that is not
Preferred Stock except as necessary to reflect any
subdivision of the stock, and no failure to
increase the annual rate of dividends as necessary
to reflect any reclassification, including any
reverse stock split, recapitalization, reorgani-
zation, or any similar transaction which has the
effect of reducing the number of outstanding
shares of the stock; and
3. The Related Person did not become the
Beneficial Owner of any additional shares of stock
of this Corporation except as part of the
transaction which resulted in such Related Person
becoming a Related Person or by virtue of
proportionate stock splits or stock dividends.
The provisions of clause (1) and (2) immediately preceding
shall not apply if no Related Person or an Affiliate or
Associate of the Related Person voted as a director of this
Corporation in a manner inconsistent with such clauses and
the Related Person, within ten days after any act or failure
to act inconsistent with such clauses, notifies the Board of
Directors of this Corporation in writing that the Related
Person disapproves thereof and requests in good faith that
the Board of Directors rectify such act or failure to act.
(e) After the Related Person has become a Related
Person, the Related Person may not have received the
benefit, directly or indirectly, except proportionately as a
shareholder, of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantages provided by this Corporation or any of its
Subsidiaries, whether in anticipation of or in connection
with such Business Combination or otherwise.
C. Alternative Shareholder Vote for Business Combinations.
In the event the conditions set forth in Subparagraph (B)(1) or
(B)(2) have been met, the affirmative vote required of
shareholders in order to approve the proposed Business
Combination shall be 66-2/3% of the Total Voting Power present or
duly represented at the meeting called for such purpose.
D. Definitions. The following terms, for all purposes of
these Articles or the By-laws of this Corporation, shall have the
following meaning:
(1) An "Affiliate" of, or a person "affiliated with,"
a specified person means a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled
by, or is under common control with, the person specified.
(2) "Announcement Date" means the first general public
announcement of the proposal or intention to make a proposal of
the Business Combination or its first communication generally to
shareholders of this Corporation, whichever is earlier.
(3) "Associate," when used to indicate a relationship
with any person, means any of the following:
(a) Any corporation or organization, other than
this Corporation, of which such person is an officer,
director or partner or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of Equity
Securities.
(b) Any trust or other estate in which such
person has a substantial beneficial interest or as to which
such person serves as trustee or in a similar fiduciary
capacity.
(c) Any relative or spouse of such person, or any
relative of such spouse, who has the same home as such
person.
(d) Any investment company registered under the
Investment Company Act of 1940 for which such person serves
as investment advisor.
(4) A person shall be deemed to be the "Beneficial
Owner" of any shares of capital stock (regardless whether owned
of record):
(a) Which that person or any of its Affiliates or
Associates, directly or indirectly, owns beneficially;
(b) Which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether exercisable
immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (ii) the right to vote pursuant to
any agreement, arrangement or understanding; or
(c) Which are beneficially owned, directly or
indirectly, by any other person with which such person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of voting capital
stock of the corporation or any of its subsidiaries.
(5) "Business Combination" means any of the following
transactions, when entered into by the Corporation or a
Subsidiary with, or upon a proposal by, a Related Person:
(a) The merger or consolidation of, or an
exchange of securities by, the Corporation or any
Subsidiary;
(b) The sale, lease, exchange, mortgage, pledge,
transfer or any other disposition (in one or a series of
transactions) of any assets of the Corporation, or of any
Subsidiary, having an aggregate book or fair market value of
$1,000,000 or more, measured at the time the transaction or
transactions are approved by the Board of Directors;
(c) The adoption of a plan or proposal for the
liquidation or dissolution of the Corporation or any
Subsidiary;
(d) The issuance or transfer by the Corporation
or any Subsidiary (in one or a series of transactions) of
securities of the Corporation, or of any Subsidiary, having
a fair market value of $1,000,000 or more;
(e) The reclassification of securities (including
a reverse stock split), recapitalization, consolidation or
any other transaction (whether or not involving a Related
Person) which has the direct or indirect effect of
increasing the voting power (regardless whether then
exercisable) or the proportionate amount of the outstanding
shares of any class or series of Equity Securities of this
Corporation or any of its Subsidiaries of a Related Person,
or any Associate or Affiliate of a Related Person;
(f) Any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantages provided by the Corporation or any Subsidiary to
an Interested Shareholder or any Affiliate or Associate
thereof, except proportionately as a shareholder; or
(g) Any agreement, contract or other arrangement
providing directly or indirectly for any of the foregoing.
(6) "Capital Stock" means any Common Stock, Preferred
Stock or other capital stock of the Corporation, or any bonds,
debentures, or other obligations granted voting rights by the
Corporation pursuant to La. R.S. 12:75H.
(7) "Common Stock" means any stock other than a class
or series of preferred or preference stock.
(8) "Continuing Director" shall mean any member of the
Board of Directors who is not a Related Person or an Affiliate or
Associate thereof, and who was a member of the Board of Directors
prior to the time that the Related Person became a Related
Person, and any successor to a Continuing Director who is not a
Related Person or an Affiliate or Associate thereof and was
recommended to succeed a Continuing Director by a majority of
Continuing Directors who were then members of the Board of
Directors, provided that, in the absence of a Related Person, any
reference to "Continuing Directors" shall mean all directors then
in office.
(9) "control," including the terms "controlling,"
"controlled by" and "under common control with," means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract
or otherwise. The beneficial ownership of 10% or more of the
votes entitled to be cast by a corporation's voting stock creates
a presumption of control.
(10) "Determination Date" means the date on which a
Related Person first became a Related Person.
(11) "Equity Security" means any of the following:
(a) Any stock or similar security, certificate of
interest or participation in any profit sharing agreement,
voting trust certificate or certificate of deposit for an
equity security.
(b) Any security convertible, with or without
consideration, into an equity security, or any warrant or
other security carrying any right to subscribe to or
purchase an equity security.
(c) Any put, call, straddle or other option or
privilege of buying an equity security from or selling an
equity security to another without being bound to do so.
(12) "Independent Shareholder" or "Independent
Stockholder" means a holder of Voting Stock of this Corporation
who is not a Related Person.
(13) "Market Value" means the following:
(a) In the case of stock, the highest closing
sale price on the date or during the period in question of a
share of such stock on the principal United States
securities exchange registered under the Securities Exchange
Act of 1934 on which such stock is listed or, if such stock
is not listed on any such exchange, the highest closing bid
quotation with respect to a share of such stock on the date
or during the period in question on the National Association
of Securities Dealers, Inc., Automated Quotations Systems,
or any alternative system then in use, or, if no such
quotations are available, the fair market value on the date
or during the period in question of a share of such stock as
determined by a majority of the Continuing Directors of this
Corporation in good faith.
(b) In the case of property other than cash or
stock, the fair market value of such property on the date or
during the period in question as determined by a majority of
the Continuing Directors of this Corporation in good faith.
(14) A "person" shall mean any individual, firm,
corporation or other entity, or a group of persons acting or
agreeing to act together in the manner set forth in Rule 13d-5
under the Securities Exchange Act of 1934, as in effect on
January 1, 1984.
(15) "Related Person" means any person (other than the
Corporation, a Subsidiary or any profit sharing, employee stock
ownership or other employee benefit plan of the Corporation or
any Subsidiary or any trust, trustee of or fiduciary with
respect to any such plan acting in such capacity) who (a) is the
direct or indirect Beneficial Owner of shares of Capital Stock
representing more than 10% of the outstanding Total Voting Power
entitled to vote for the election of directors, and any Affiliate
or Associate of any such person, or (b) is an Affiliate or
Associate of the Corporation and at any time within the two-year
period immediately prior to the date in question was the
Beneficial Owner, directly of indirectly, of shares of Capital
Stock (including two or more classes or series voting together as
a single class) representing 10% or more of the outstanding Total
Voting Power entitled to vote for the election of directors. For
the purpose of determining whether a person is the Beneficial
Owner of a percentage, specified in this Article, of the
outstanding Total Voting Power, the number of shares of Voting
Stock deemed to be outstanding shall include shares deemed owned
by that person through application of Article V(D)(3) but shall
not include any other shares which may be issuable to any other
person.
(16) "Subsidiary" means any corporation of which Voting
Stock having a majority of the votes entitled to be cast is
owned, directly or indirectly, by this Corporation.
(17) "Total Voting Power," when used in reference to
any particular matter properly brought before the shareholders
for their consideration and vote, means the total number of votes
that holders of Capital Stock are entitled to cast with respect
to such matter.
(18) "Valuation Date" means the following:
(a) For a Business Combination voted upon by
shareholders, the latter of the date prior to the date of
the shareholders' vote and the day 20 days prior to the
consummation of the Business Combination; and
(b) For a Business Combination not voted upon by
the shareholders, the date of the consummation of the
Business Combination.
(19) "Voting Stock" means shares of Capital Stock of
the Corporation entitled to vote generally in the election of
directors.
E. Benefit of Statute. This Corporation claims and shall
have the benefit of the provisions of R.S. 12:133 except that the
provisions of R.S. 12:133 shall not apply to any business
combination involving an interested shareholder that is an
employee benefit plan or related trust of this Corporation.
ARTICLE VI
Shareholders' Meetings
A. Written Consents. Any action required or permitted to
be taken at any annual or special meeting of shareholders may be
taken only upon the vote of the shareholders, present in person
or represented by duly authorized proxy, at an annual or special
meeting duly noticed and called, as provided in the Bylaws of the
Corporation, and may not be taken by a written consent of the
shareholders pursuant to the Business Corporation Law of the
State of Louisiana.
B. Special Meetings. Subject to the terms of any
outstanding class or series of Preferred Stock that entitles the
holders thereof to call special meetings, the holders of a
majority of the Total Voting Power of the Corporation shall be
required to cause the Secretary of the Corporation to call a
special meeting of shareholders pursuant to La. R.S. 12:73B (or
any successor provision). Nothing in this Article VI shall limit
the power of the President of the Corporation or its Board of
Directors to call a special meeting of shareholders.
ARTICLE VII
Limitation of Liability and Indemnification
A. Limitation of Liability. No director or officer of the
Corporation shall be liable to the Corporation or to its
shareholders for monetary damages for breach of his fiduciary
duty as a director or officer, provided that the foregoing
provision shall not eliminate or limit the liability of a
director or officer for (1) any breach of his duty of loyalty to
the Corporation or its shareholders; (2) acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law; (3) liability for unlawful distributions of the
Corporation's assets to, or redemptions or repurchases of the
Corporation's shares from, shareholders of the Corporation, under
and to the extent provided in La. R.S. 12:92D; or (4) any
transaction from which he derived an improper personal benefit.
B. Authorization of Further Actions. The Board of
Directors may (1) cause the Corporation to enter into contracts
with its directors and officers providing for the limitation of
liability set forth in this Article to the fullest extent
permitted by law, (2) adopt By-laws or resolutions, or cause the
Corporation to enter into contracts, providing for
indemnification of directors and officers of the Corporation and
other persons (including but not limited to directors and
officers of the Corporation's direct and indirect Subsidiaries)
to the fullest extent permitted by law and (3) cause the
Corporation to exercise the insurance powers set forth in La.
R.S. 12:83F, notwithstanding that some or all of the members of
the Board of Directors acting with respect to the foregoing may
be parties to such contracts or beneficiaries of such By-laws or
resolutions or the exercise of such powers. No repeal or
amendment of any such By-laws or resolutions limiting the right
to indemnification thereunder shall affect the entitlement of any
person to indemnification whose claim thereto results from
conduct occurring prior to the date of such repeal or amendment.
C. Subsidiaries. The Board of Directors may cause the
Corporation to approve for the officers and directors of its
direct and indirect Subsidiaries limitation of liability,
indemnification and insurance provisions comparable to the
foregoing.
D. Amendment of Article. Notwithstanding any other
provisions of these Articles of Incorporation, the affirmative
vote of the holders of at least 80% of the Total Voting Power
shall be required to amend or repeal this Article VII, and any
amendment or repeal of this Article shall not adversely affect
any elimination or limitation of liability of a director or
officer of the Corporation under this Article with respect to any
action or inaction occurring prior to the time of such amendment
or repeal.
ARTICLE VIII
Reversion
Except for cash, shares or other property or rights payable
or issuable to the holders of Preferred Stock, the rights to
which shall be determined under applicable state law, Cash,
property or share dividends, shares issuable to shareholders in
connection with a reclassification of stock, and the redemption
price of redeemed shares, that are not claimed by the
shareholders entitled thereto within one year after the dividend
or redemption price became payable or the shares became issuable,
despite reasonable efforts by the Corporation to pay the dividend
or redemption price or deliver the certificates for the shares to
such shareholders within such time, shall, at the expiration of
such time, revert in full ownership to the Corporation, and the
Corporation's obligation to pay such dividend or redemption price
or issue such shares, as the case may be, shall thereupon cease,
provided, however, that the Board of Directors may, at any time,
for any reason satisfactory to it, but need not, authorize (i)
payment of the amount of any cash or property dividend or
redemption price or (ii) issuance of any shares, ownership of
which has reverted to the Corporation pursuant to this Article,
to the person or entity who or which would be entitled thereto
had such reversion not occurred.
ARTICLE IX
Amendments
A. Charter Amendments. Articles IV (other than paragraphs
F and G), V, VI(A) and IX of these Articles of Incorporation
shall not be amended in any manner (whether by modification or
repeal of an existing Article or Articles or by addition of a new
Article or Articles) except upon resolutions adopted by the
affirmative vote of both (i) 80% of the Total Voting Power
entitled to be cast by the holders of outstanding shares of
Voting Stock, voting together as a single group, and (ii) two-
thirds of the Total Voting Power entitled to be cast by the
Independent Shareholders present or duly represented at a
shareholders' meeting, voting as a separate group; provided,
however, that if such resolutions shall first be adopted by both
a majority of the directors then in office and a majority of the
Continuing Directors, voting as a separate group, then such
resolutions shall be deemed adopted by the shareholders upon the
affirmative vote of a majority of the Total Voting Power entitled
to be cast by the holders of outstanding shares of Voting Stock,
voting as a single group.
B. Bylaw Amendments. Bylaws of this Corporation may be
altered, amended, or repealed or new Bylaws may be adopted by (i)
the shareholders, but only upon the affirmative vote of both 80%
of the Total Voting Power entitled to be cast by the holders of
outstanding shares of Voting Stock, voting together as a single
group, and two-thirds of the Total Voting Power entitled to be
cast by the Independent Shareholders present or duly represented
at a shareholders' meeting, voting as a separate group, or (ii)
the Board of Directors, but only upon the affirmative vote of
both a majority of the directors then in office and a majority of
the Continuing Directors, voting as a separate group.
These Amended and Restated Articles of Incorporation are
dated as of May 23, 1995.
==============================================================
BYLAWS
OF
CENTURY TELEPHONE ENTERPRISES, INC.
(as amended through May 23, 1995)
==============================================================
BYLAWS
CENTURY TELEPHONE ENTERPRISES, INC.
TABLE OF CONTENTS
ARTICLE I - Officers.......................................... 1
Section 1. Required and Permitted Officers................. 1
Section 2. Election and Removal of Officers................ 4
ARTICLE II - Board of Directors............................... 4
Section 1. Powers.......................................... 4
Section 2. Organizational and Regular Meetings............. 4
Section 3. Special Meetings................................ 4
Section 4. Waiver of Notice................................ 5
Section 5. Quorum.......................................... 5
Section 6. Notice of Adjournment........................... 5
Section 7. Written Consents ............................... 6
Section 8. Voting.......................................... 6
Section 9. Use of Communications Equipment................. 6
Section 10. Indemnification................................ 6
Section 11. Certain Qualifications......................... 11
ARTICLE III - Committees...................................... 11
Section 1. Committees...................................... 11
Section 2. Appointment and Removal of Committee Members.... 14
Section 3. Procedures for Committees....................... 14
Section 4. Meetings........................................ 15
Section 5. Authority of Chairman to Appoint Committees..... 15
ARTICLE IV - Shareholders' Meetings........................... 15
Section 1. Place of Meetings............................... 15
Section 2. Annual Meeting.................................. 15
Section 3. Special Meetings................................ 15
Section 4. Notice of Meetings.............................. 16
Section 5. Notice of Shareholder Nominations and Shareholder
Business......................................... 16
Section 6. Quorum.......................................... 18
Section 7. Voting Power Present or Represented............. 19
Section 8. Voting Requirements............................. 19
Section 9. Proxies......................................... 19
Section 10. Adjournments................................... 19
Section 11. Written Consents............................... 20
Section 12. List of Shareholders........................... 20
Section 13. Procedure at Shareholders Meetings............. 20
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<PAGE>
ARTICLE V - Certificates of Stock............................. 20
ARTICLE VI - Registered Shareholders.......................... 21
ARTICLE VII - Loss of Certificate............................. 21
ARTICLE VIII - Checks......................................... 21
ARTICLE IX - Dividends........................................ 21
ARTICLE X - Inapplicability of Louisiana Control Share Statute 22
ARTICLE XI - Certain Definitions.............................. 22
ARTICLE XII - Amendments...................................... 22
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<PAGE>
BYLAWS
(Amended entirely May 23, 1995)
ARTICLE I
OFFICERS
Section 1. Required and Permitted Officers
1 Officers. The officers of the Corporation shall be a
Chairman of the Board; a Chief Executive Officer; a President; a
Secretary; and a Treasurer. The Board may elect such other
officers as the Board may determine. An officer need not be a
Director and any two or more of the offices may be held by one
person, provided, however, that a person holding more than one
office may not sign in more than one capacity any certificate or
any instrument required to be signed by two officers. The
required and permitted officers and duties thereof are as
follows:
A. Chairman of the Board (Chairman). The Chairman shall
preside at all meetings of the shareholders and Directors, ensure
that all orders, policies and resolutions of the Board are
carried out and perform such other duties as may be prescribed by
the Board of Directors or the Bylaws.
B. Vice Chairman. The Board may from time to time elect
one or more Vice Chairmen. The Vice Chairman shall serve in the
absence or inability of the Chairman to serve. In the event of
the death, resignation or permanent inability of the Chairman to
serve, the Vice Chairman shall automatically succeed to the
office of Chairman until such time as the Board of Directors
convenes a properly called meeting to elect a new Chairman. In
the event that there is more than one Vice Chairman, then the one
who has served in that capacity for the longest period of time
shall serve in the absence of the Chairman or assume the office
of Chairman as the case may be.
C. Chief Executive Officer (CEO). The CEO shall, subject
to the powers of the Chairman, have general and active management
of the business of the Corporation. He may sign, execute and
deliver in the name of the Corporation powers of attorney,
contracts, bonds and other obligations and shall perform such
other duties as may be prescribed from time to time by the Board
of Directors or the Bylaws. The CEO shall manage the day-to-day
affairs of the Corporation and direct the activities of the
President - Telephone Group, President - Telecommunications
Services, the General Counsel and the Chief Financial Officer.
Without limiting the generality of the foregoing, the CEO shall
establish the annual salaries of each non-executive officer of
the Corporation, unless otherwise directed by the Board, and the
annual salaries of each officer of the Corporation's
subsidiaries, unless otherwise directed by the respective boards
of directors of such subsidiaries.
D. President. The President may sign, execute and deliver
in the name of the Corporation powers of attorney, contracts,
bonds, and other obligations and shall perform such other duties
as may be prescribed from time to time by the Board of Directors,
the Chairman, the CEO, or the Bylaws.
E. Executive Vice President(s). The Executive Vice
President(s) shall assist the CEO in discharging the duties of
that office in any manner requested and perform any other duties
as may be prescribed by the CEO, the Board of Directors or the
Bylaws.
F. Chief Financial Officer. The Chief Financial Officer
shall be the principal financial officer of the Corporation. He
shall manage the financial affairs of the Corporation and direct
the activities of the Treasurer, Controller and other officers
responsible for functional areas within the Finance Group. He
shall be responsible for all internal and external financial
reporting. He may sign, execute and deliver in the name of the
Corporation powers of attorney, contracts, bonds, and other
obligations and shall perform such other duties as may be
prescribed from time to time by the Board of Directors or by the
Bylaws.
G. Treasurer. As directed by the Chief Financial Officer,
the Treasurer shall have general custody of all the funds and
securities of the Corporation. He may sign, with the CEO,
President, Chief Financial Officer or such other person or
persons as may be designated for the purpose by the Board of
Directors, all bills of exchange or promissory notes of the
Corporation. He shall perform such other duties as may be
prescribed from time to time by the Chief Financial Officer or
the Bylaws.
H. Controller. As directed by the Chief Financial
Officer, the Controller shall be responsible for the development
and maintenance of the accounting systems used by the Corporation
and its subsidiaries. The Controller shall be authorized to
implement policies and procedures to ensure that the Corporation
and its subsidiaries maintain internal accounting control systems
designed to provide reasonable assurance that the accounting
records accurately reflect business transactions and that such
transactions are in accordance with management's authorization.
Additionally, as directed by the Chief Financial Officer, the
Controller shall be responsible for internal and external
financial reporting for the Corporation and its subsidiaries.
I. Assistant Treasurer. The Assistant Treasurer shall
have such powers and perform such duties as may be assigned by
the Treasurer. In the absence or disability of the Treasurer,
the Assistant Treasurer shall perform the duties and exercise the
powers of the Treasurer.
J. Secretary. The Secretary shall keep the minutes of all
meetings of the shareholders, the Board of Directors and all
committees. He shall cause notice to be given of meetings of
shareholders, of the Board of Directors and of any committee
appointed by the Board. He shall have custody of the corporate
seal and general charge of the records, documents and papers of
the Corporation not pertaining to the duties vested in other
officers, which shall at all reasonable times be open to the
examination of any Director. He may sign or execute contracts
with any other officer thereunto authorized in the name of the
Corporation and affix the seal of Corporation thereto. He shall
perform such other duties as may be prescribed from time to time
by the Board of Directors or the Bylaws.
K. Assistant Secretary. The Assistant Secretary shall
have powers and perform such duties as may be assigned by the
Secretary. In the absence or disability of the Secretary, the
Assistant Secretary shall perform the duties and exercise the
power of the Secretary.
L. President - Telecommunications Services. The President
- Telecommunications Services shall serve as President of all
cellular subsidiaries and such other subsidiaries of the
Corporation as he is from time to time elected President by the
Board of Directors thereof. Subject to any limitation in these
Bylaws or the Bylaws of any such subsidiaries, he shall be
responsible for all operations, marketing, construction,
preparation of budgets and business plans, and the profitability
of all of the operations of the companies under his supervision.
M. President - Telephone Group. The President - Telephone
Group shall serve as President of all operating telephone
subsidiaries and subsidiaries operating in conjunction therewith.
Subject to any limitations in these Bylaws or the Bylaws of any
such subsidiaries, he shall be responsible for all operations,
marketing, construction, preparation of budgets and business
plans, and the profitability of all of the operations of the
companies under his supervision.
N. General Counsel. The General Counsel shall be directly
responsible for advising the Board of Directors, the Corporation,
and all its officers and employees in all matters affecting the
legal affairs of the Corporation. He shall determine the need
for and, if necessary, select outside counsel to represent the
Corporation and approve all fees in connection with their
representation. He shall also have such other powers, duties and
authority as may be prescribed to him from time to time by the
CEO, the Board of Directors, or the Bylaws.
O. Senior Vice President(s). The Senior Vice President(s)
shall perform such duties as may be prescribed from time to time
by the Board of Directors, the CEO, or the Bylaws.
P. Vice President(s). The Vice President(s) shall have
such powers and perform such duties as may be assigned to them by
the Board of Directors, the CEO, the President, or the Executive
Vice President or Senior Vice President to whom they report. A
Vice President may sign and execute contracts and other
obligations pertaining to the regular course of his duties.
Q. Assistant Vice President(s). The Assistant Vice
President(s) shall have such powers and perform such duties as
may be assigned to them by the Board of Directors, the CEO, the
President or the officer to whom they report. An Assistant Vice
President may sign and execute contracts and other obligations
pertaining to the regular course of his duties.
1.2Executive Officer Group. The Executive Officer Group
shall be the Chairman of the Board, the Chief Executive Officer,
the Chief Financial Officer, the President - Telecommunications
Services, the President - Telephone Group, and the General
Counsel.
Section 2. Election and Removal of Officers
2.1Election. The officers shall be elected annually by the
Board of Directors at its first meeting following the annual
meeting of the shareholders and, at any time, the Board may
remove any officer (with or without cause, and regardless of any
contractual obligation to such officer) and fill a vacancy in any
office, but any election to, removal from or appointment to fill
a vacancy in any office, and the determination of the terms of
employment thereof, shall require the affirmative votes of (a) a
majority of the Directors then in office and (b) a majority of
the Continuing Directors, voting as a separate group.
2.2Removal. In addition, the Chief Executive Officer is
empowered in his sole discretion to remove or suspend any officer
or other employee of the Corporation who (a) fails to respond
satisfactorily to the Corporation respecting any inquiry by the
Corporation for information to enable it to make any
certification required by the Federal Communications Commission
under the Anti-Drug Abuse Act of 1988, (b) is arrested or
convicted of any offense concerning the distribution or
possession of, or trafficking in, drugs or other controlled
substances, or (c) the Chief Executive Officer believes to have
been engaged in actions that could lead to such an arrest or
conviction.
ARTICLE II
BOARD OF DIRECTORS
Section 1. Powers
In addition to the powers and authorities by these Bylaws
expressly conferred upon it, the Board of Directors may exercise
all such powers of the Corporation and do all such lawful acts
and things as are not by statute or by the Articles of
Incorporation or by these Bylaws required to be exercised or done
by the shareholders.
Section 2. Organizational and Regular Meetings
The Board of Directors shall hold an annual organizational
meeting, without notice, immediately following the adjournment of
the annual meeting of the shareholders and shall hold a regular
meeting on the first Tuesday after the twentieth day in the
months of February, May, August and November of each year. The
Secretary shall give not less than five days' written notice to
each Director of all regular meetings, which notice shall state
the time and place of the meeting.
Section 3. Special Meetings
3.1 Call of Special Meetings. Special meetings of the Board
of Directors may be called by the Chairman of the Board or, if he
is absent or unable or unwilling to act, by the President. Upon
the written request of any two Directors delivered to the
Chairman of the Board, the President or the Secretary of the
Corporation, a special meeting shall be called.
3.2Notice. Written notice of the time and place of special
meetings shall be delivered personally to the Directors or sent
to each Director by letter or by telegram, charges prepaid,
addressed to him at his address shown in the Corporation's
records. In case such notice is mailed or telegraphed, it shall
be deposited in the United States mail at least 72 hours prior to
the meeting or delivered to an overnight mail delivery service or
to the telegraph company in the place in which the principal
office of the corporation is located at least 48 hours prior to
the meeting. In case such notice is personally delivered as
above provided, it shall be so delivered at least 24 hours prior
to the meeting. The foregoing notwithstanding, if the Chairman
or the President shall determine, in his sole discretion, that
the subject of the special meeting is urgent and must be
considered by the Board without delay, notice may be given by
personal delivery or by telephone not less than 12 hours prior to
the time set for the meeting, provided a confirming telegram or
overnight letter is sent to the Director contemporaneously. Such
mailing, telegraphing, telephoning or personal delivery as above
provided shall be due, legal and personal notice to such
Director.
Section 4. Waiver of Notice
Any Director may waive notice of a meeting by written waiver
executed either before or after the meeting. Directors present
at any regular or special meeting shall be deemed to have
received due, or to have waived, notice thereof, provided that a
director who participates in a meeting by telephone shall not be
deemed to have received or waived due notice if, at the beginning
of the meeting, he objects to the transaction of any business
because the meeting is not lawfully called.
Section 5. Quorum
A majority of the authorized number of Directors as fixed by
or pursuant to the Articles of Incorporation shall be necessary
to constitute a quorum for the transaction of business, provided,
however, that a minority of the Directors, in the absence of a
quorum, may adjourn from time to time, but may not transact any
business. If a quorum is present when the meeting convened, the
directors present may continue to do business, taking action by
vote of a majority of a quorum, until adjournment,
notwithstanding the withdrawal of enough directors to leave less
than a quorum or the refusal of any director present to vote.
Section 6. Notice of Adjournment
Notice of the time and place of holding an adjourned meeting
need not be given to absent Directors if the time and place is
fixed at the meeting adjourned.
Section 7. Written Consents
Anything to the contrary contained in these Bylaws
notwithstanding, any action required or permitted to be taken by
the Board of Directors may be taken without a meeting, if all
members of the Board of Directors shall individually or
collectively consent in writing to such action. Such written
consent or consents shall be filed with the minutes of the
proceedings of the Board. Such action by written consent shall
have the same force and effect as a unanimous vote of such
Directors at a meeting.
Section 8. Voting
At all meetings of the Board, each Director present shall
have one vote. At all meetings of the Board, all questions, the
manner of deciding which is not otherwise specifically regulated
by law, the Articles of Incorporation or these Bylaws, shall be
determined by a majority of the Directors present at the meeting,
provided, however, that any shares of other corporations owned by
the Corporation shall be voted only pursuant to resolutions duly
adopted upon the affirmative votes of (a) 80% of the Directors
then in office and (b) a majority of the Continuing Directors,
voting as a separate group.
Section 9. Use of Communications Equipment
Meetings of the Board of Directors may be held by means of
telephone conference calls or similar communications equipment
provided that all persons participating in the meeting can hear
and communicate with each other.
Section 10. Indemnification
10.1 Definitions. As used in this Section:
(a) The term "Expenses" shall mean any expenses or
costs (including, without limitation, attorney's fees, judgments,
punitive or exemplary damages, fines and amounts paid in
settlement). If any of the foregoing amounts paid on behalf of
Indemnitee are not deductible by Indemnitee for federal or state
income tax purposes, the Corporation will reimburse Indemnitee
for tax liability with respect thereto by paying to Indemnitee an
amount which, after taking into account taxes on such amount,
equals Indemnitee's incremental tax liability.
(b) The term "Claim" shall mean any threatened,
pending or completed claim, action, suit, or proceeding, whether
civil, criminal, administrative or investigative and whether made
judicially or extra-judicially, or any separate issue or matter
therein, as the context requires.
(c) The term "Determining Body" shall mean (i) those
members of the Board of Directors who are not named as parties to
the Claim for which indemnification is being sought ("Impartial
Directors"), if there are at least three Impartial Directors, or
(ii) a committee of at least three directors appointed by the
Board of Directors (regardless of whether the members of the
Board of Directors voting on such appointment are Impartial
Directors) and composed of Impartial Directors or (iii) if there
are fewer than three Impartial Directors or if the Board of
Directors or a committee appointed thereby so directs (regardless
of whether the members thereof are Impartial Directors),
independent legal counsel, which may be the regular outside
counsel of the Corporation.
(d) The term "Indemnitee" shall mean each director and
officer and each former director and officer of the Corporation.
10.2 Indemnity. (a) To the extent any Expenses incurred by
Indemnitee are in excess of the amounts reimbursed or indemnified
pursuant to policies of liability insurance maintained by the
Corporation, the Corporation shall indemnify and hold harmless
Indemnitee against any such Expenses actually and reasonably
incurred in connection with any Claim against Indemnitee (whether
as a subject of or party to, or a proposed or threatened subject
of or party to, the Claim) or in which Indemnitee is involved
solely as a witness or person required to give evidence, by
reason of his position (i) as a director or officer of the
Corporation, (ii) as a director or officer of any subsidiary of
the Corporation or as a fiduciary with respect to any employee
benefit plan of the Corporation, or (iii) as a director, officer,
employee or agent of another corporation, partnership, limited
liability company, joint venture, trust or other for-profit or
not-for-profit entity or enterprise, if such position is or was
held at the request of the Corporation, whether relating to
service in such position before or after the effective date of
this Section 10, if (i) the Indemnitee is successful in his
defense of the Claim on the merits or otherwise or (ii) the
Indemnitee has been found by the Determining Body (acting in good
faith) to have met the Standard of Conduct; provided that (a) the
amount of Expenses for which the Corporation shall indemnify
Indemnitee may be reduced by the Determining Body to such amount
as it deems proper if it determines in good faith that the Claim
involved the receipt of a personal benefit by Indemnitee and (b)
no indemnification shall be made in respect of any Claim as to
which Indemnitee shall have been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be
liable for willful or intentional misconduct in the performance
of his duty to the Corporation or to have obtained an improper
benefit, unless, and only to the extent that, a court shall
determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, the
Indemnitee is fairly and reasonably entitled to indemnity for
such Expenses as the court shall deem proper; and provided
further that, if the Claim involves Indemnitee by reason of his
position with an entity or enterprise described in clause (ii) or
(iii) of this Section 10.2(a) and if Indemnitee may be entitled
to indemnification with respect to such Claim from such entity or
enterprise, Indemnitee shall be entitled to indemnification
hereunder only (x) if he has applied to such entity or enterprise
for indemnification with respect to the Claim and (y) to the
extent that indemnification to which he would be entitled
hereunder but for this proviso exceeds the indemnification paid
by such other entity or enterprise.
(b) For purposes of this Section, the Standard of
Conduct is met when conduct by an Indemnitee with respect to
which a Claim is asserted was conduct that he reasonably believed
to be in, or not opposed to, the best interest of the
Corporation, and, in the case of a Claim which is a criminal
action or proceeding, conduct that the Indemnitee had no
reasonable cause to believe was unlawful. The termination of any
Claim by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself,
create a presumption that Indemnitee did not meet the Standard of
Conduct.
(c) Promptly upon becoming aware of the existence of
any Claim, Indemnitee shall notify the Chief Executive Officer of
the existence of the Claim, who shall promptly advise the members
of the Board of Directors thereof and that establishing the
Determining Body will be a matter presented at the next regularly
scheduled meeting of the Board of Directors. After the
Determining Body has been established the Chief Executive Officer
shall inform Indemnitee thereof and Indemnitee shall immediately
notify the Determining Body of all facts relevant to the Claim
known to such Indemnitee. Within 60 days of the receipt of such
notice and information, together with such additional information
as the Determining Body may request of Indemnitee, the
Determining Body shall report to Indemnitee of its determination
whether Indemnitee has met the Standard of Conduct. The
Determining Body may extend the period of time for determining
whether the Standard of Conduct has been met, but in no event
shall such period of time be extended beyond an additional 60
days.
(d) If, after determining that the Standard of Conduct
has been met, the Determining Body obtains facts of which it was
not aware at the time it made such determination, the Determining
Body on its own motion, after notifying the Indemnitee and
providing him an opportunity to be heard, may, on the basis of
such facts, revoke such determination, provided that, in the
absence of actual fraud by Indemnitee, no such revocation may be
made later than 30 days after final disposition of the Claim.
(e) Indemnitee shall promptly inform the Determining
Body upon his becoming aware of any relevant facts not
theretofore provided by him to the Determining Body, unless the
Determining Body has obtained such facts by other means.
(f) In the case of any Claim not involving a proposed,
threatened or pending criminal proceeding (i) if Indemnitee has,
in the good faith judgment of the Determining Body, met the
Standard of Conduct, the Corporation may, in its sole discretion,
assume all responsibility for the defense of the Claim, and, in
any event, the Corporation and Indemnitee each shall keep the
other informed as to the progress of the defense of the Claim,
including prompt disclosure of any proposals for settlement;
provided that if the Corporation is a party to the Claim and
Indemnitee reasonably determines that there is a conflict between
the positions of the Corporation and Indemnitee with respect to
the Claim, then Indemnitee shall be entitled to conduct his
defense with counsel of his choice; and provided further that
Indemnitee shall in any event be entitled at his expense to
employ counsel chosen by him to participate in the defense of the
Claim; and (ii) the Corporation shall fairly consider any
proposals by Indemnitee for settlement of the Claim. If the
Corporation proposes a settlement of the Claim and such
settlement is acceptable to the person asserting the Claim or the
Corporation believes a settlement proposed by the person
asserting the Claim should be accepted, it shall inform
Indemnitee of the terms of such proposed settlement and shall fix
a reasonable date by which Indemnitee shall respond. If
Indemnitee agrees to such terms, he shall execute such documents
as shall be necessary to make final the settlement. If
Indemnitee does not agree with such terms, Indemnitee may proceed
with the defense of the Claim in any manner he chooses, provided
that if Indemnitee is not successful on the merits or otherwise,
the Corporation's obligation to indemnify such Indemnitee as to
any Expenses incurred by following his disagreement shall be
limited to the lesser of (A) the total Expenses incurred by
Indemnitee following his decision not to agree to such proposed
settlement or (B) the amount that the Corporation would have paid
pursuant to the terms of the proposed settlement. If, however,
the proposed settlement would impose upon Indemnitee any
requirement to act or refrain from acting that would materially
interfere with the conduct of Indemnitee's affairs, Indemnitee
shall be permitted to refuse such settlement and proceed with the
defense of the Claim, if he so desires, at the Corporation's
expense in accordance with the terms and conditions of these
Bylaws without regard to the limitations imposed by the
immediately preceding sentence. In any event, the Corporation
shall not be obligated to indemnify Indemnitee for an amount paid
in settlement that the Corporation has not approved.
(g) In the case of a Claim involving a proposed,
threatened or pending criminal proceeding, Indemnitee shall be
entitled to conduct the defense of the Claim and to make all
decisions with respect thereto, with counsel of his choice;
provided that the Corporation shall not be obligated to indemnify
Indemnitee for an amount paid in settlement that the Corporation
has not approved.
(h) After notification to the Corporation of the
existence of a Claim, Indemnitee may from time to time request of
the Chief Executive Officer or, if the Chief Executive Officer is
a party to the Claim as to which indemnification is being sought,
any officer who is not a party to the Claim and who is designated
by the Chief Executive Officer (the "Disbursing Officer"), which
designation shall be made promptly after receipt of the initial
request, that the Corporation advance to Indemnitee the Expenses
(other than fines, penalties, judgments or amounts paid in
settlement) that he incurs in pursuing a defense of the Claim
prior to the time that the Determining Body determines whether
the Standard of Conduct has been met. The Disbursing Officer
shall pay to Indemnitee the amount requested (regardless of
Indemnitee's apparent ability to repay the funds) upon receipt of
an undertaking by or on behalf of Indemnitee to repay such amount
if it shall ultimately be determined that he is not entitled to
be indemnified by the Corporation under the circumstances,
provided that if the Disbursing Officer does not believe such
amount to be reasonable, he shall advance the amount deemed by
him to be reasonable and Indemnitee may apply directly to the
Determining Body for the remainder of the amount requested.
(i) After a determination that the Standard of Conduct
has been met, for so long as and to the extent that the
Corporation is required to indemnify Indemnitee under these
Bylaws, the provisions of Paragraph (h) shall continue to apply
with respect to Expenses incurred after such time except that (i)
no undertaking shall be required of Indemnitee and (ii) the
Disbursing Officer shall pay to Indemnitee the amount of any
fines, penalties or judgments against him which have become final
for which the Corporation is obligated to indemnify him or any
amount of indemnification ordered to be paid to him by a court.
(j) Any determination by the Corporation with respect
to settlement of a Claim shall be made by the Determining Body.
(k) The Corporation and Indemnitee shall keep
confidential to the extent permitted by law and their fiduciary
obligations all facts and determinations provided pursuant to or
arising out of the operation of these Bylaws and the Corporation
and Indemnitee shall instruct its or his agents and employees to
do likewise.
10.3 Enforcement. (a) The rights provided by this Section
shall be enforceable by Indemnitee in any court of competent
jurisdiction.
(b) If Indemnitee seeks a judicial adjudication of his
rights under this Section, Indemnitee shall be entitled to
recover from the Corporation, and shall be indemnified by the
Corporation against, any and all Expenses actually and reasonably
incurred by him in connection with such proceeding, but only if
he prevails therein. If it shall be determined that Indemnitee
is entitled to receive part but not all of the relief sought,
then Indemnitee shall be entitled to be reimbursed for all
Expenses incurred by him in connection with such proceeding if
the indemnification amount to which he is determined to be
entitled exceeds 50% of the amount of his claim. Otherwise, the
Expenses sought incurred by Indemnitee in connection with such
judicial adjudication shall be appropriately prorated.
(c) In any judicial proceeding described in this
subsection, the Corporation shall bear the burden of proving that
Indemnitee is not entitled to Expenses sought with respect to any
Claim.
10.4 Saving Clause. If any provision of this Section is
determined by a court having jurisdiction over the matter to
require the Corporation to do or refrain from doing any act that
is in violation of applicable law, the court shall be empowered
to modify or reform such provision so that, as modified or
reformed, such provision provides the maximum indemnification
permitted by law and such provision, as so modified or reformed,
and the balance of this Section, shall be applied in accordance
with their terms. Without limiting the generality of the
foregoing, if any portion of this Section shall be invalidated on
any ground, the Corporation shall nevertheless indemnify and
Indemnitee to the full extent permitted by any applicable portion
of this Section that shall not have been invalidated and to the
full extent permitted by law with respect to that portion that
has been invalidated.
10.5 Non-Exclusivity. (a) The indemnification and payment of
Expenses provided by or granted pursuant to this Section shall
not be deemed exclusive of any other rights to which Indemnitee
is or may become entitled under any statute, article of
incorporation, by-law, authorization of shareholders or
directors, agreement or otherwise.
(b) It is the intent of the Corporation by this
Section to indemnify and hold harmless Indemnitee to the fullest
extent permitted by law, so that if applicable law would permit
the Corporation to provide broader indemnification rights than
are currently permitted, the Corporation shall indemnify and hold
harmless Indemnitee to the fullest extent permitted by applicable
law notwithstanding that the other terms of this Section would
provide for lesser indemnification.
10.6 Successors and Assigns. This Section shall be binding
upon the Corporation, its successors and assigns, and shall inure
to the benefit of Indemnitee's heirs, personal representatives,
and assigns and to the benefit of the Corporation, its successors
and assigns.
10.7 Indemnification of Other Persons. The Corporation may
indemnify any person not a director or officer of the Corporation
to the extent authorized by the Board of Directors or a committee
of the Board expressly authorized by the Board of Directors.
Section 11. Certain Qualifications
No person shall be eligible for nomination, election or
service as a director of the Corporation who shall (i) in the
opinion of the Board of Directors fail to respond satisfactorily
to the Corporation respecting any inquiry of the Corporation for
information to enable the Corporation to make any certification
required by the Federal Communications Commission under the
Anti-Drug Abuse Act of 1988 or to determine the eligibility of
such persons under this section; (ii) have been arrested or
convicted of any offense concerning the distribution or
possession of, or trafficking in, drugs or other controlled
substances, provided that in the case of an arrest the Board of
Directors may in its discretion determine that notwithstanding
such arrest such persons shall remain eligible under this
Section; or (iii) have engaged in actions that could lead to such
an arrest or conviction and that the Board of Directors
determines would make it unwise for such person to serve as a
director of the Corporation. Any person serving as a director of
the Corporation shall automatically cease to be a director on
such date as he ceases to have the qualifications set forth in
this Section, and his position shall be considered vacant within
the meaning of the Articles of Incorporation of the Corporation.
ARTICLE III
COMMITTEES
Section 1. Committees
1.1 Standing Committees. The Board of Directors shall have
six standing committees, the names, functions and powers of each
of which shall be as follows:
A. The Executive Committee shall consist of not less than
three Directors, one of whom shall be the Chairman of the Board,
who shall also serve as chairman of the Executive Committee. To
the full extent permitted by law and the Articles of
Incorporation, the Executive Committee shall have and may
exercise all of the powers of the Board in the management of the
business and affairs of the Corporation when the Board is not in
session.
B. The Compensation Committee shall consist of two or more
Directors (the exact number of which shall be set from time to
time by the Board), each of whom shall (i) be a "disinterested
person" as defined in Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended, and (ii) not serve, and shall
not have served in the past, as an officer or employee of the
Corporation or any of its subsidiaries. The Compensation
Committee is empowered to:
1. after receiving and considering the
recommendations of the Chief Executive Officer,
determine from time to time the salary of the
Corporation's executive officers (as defined in
Section 1.2 of Article I of these Bylaws) and the
fees of the Corporation's directors;
2. administer each of the Corporation's incentive
compensation plans and stock-based plans
(including its 1983 Restricted Stock Plan, Key
Employee Incentive Compensation Plan, 1988
Incentive Compensation Program, 1990 Incentive
Compensation Program, 1995 Incentive Compensation
Plan and any successor plans), and exercise all
powers provided for in such plans;
3. approve any (i) proposed plan or arrangement
offering or providing any benefits to one or more
of the Corporation's executive officers or
directors (other than any plan or arrangement
offering benefits that do not discriminate in
scope, terms or operation in favor of executive
officers or directors and that are generally
available to all salaried employees) and (ii)
proposed amendment or change to any such plan or
arrangement;
4. approve any (i) proposed employment or severance
contract between the Corporation and an executive
officer or proposed executive officer thereof and
(ii) proposed extension or material amendment
thereto;
5. issue executive compensation reports to the
Corporation's shareholders in the manner required
under the rules and regulations of the U.S.
Securities and Exchange Commission;
6. retain independent consultants and legal advisors
who will report directly to the Compensation
Committee and be paid with funds of the
Corporation; and
7. if requested by the Board, (i) review, determine
or approve the compensation of any non-executive
officer of the Corporation or any officer of the
Corporation's subsidiaries, (ii) review, determine
or approve any proposed amendments, contributions
or changes to any of the Corporation's employee
benefit plans, welfare plans, insurance or other
benefit arrangements that are not directly
administered or monitored by the Compensation
Committee pursuant to the powers granted in
paragraphs 2 and 3 above, and (iii) perform such
other services as may be delegated to it by the
Board.
No action of the type described in paragraphs 1 - 6 shall be
valid unless it has been approved by the Compensation Committee.
All actions of the Compensation Committee shall be subject to
ratification by the full Board of Directors unless the
Compensation Committee reasonably determines that submitting a
matter to the full Board of Directors for ratification would be
prohibited by, or contrary to the intents and purposes of, any
laws, rules, or regulations that require or contemplate that such
matter be authorized by independent directors.
C. The Nominating Committee shall consist of two or more
Directors and shall perform the following functions:
1. To consider and recommend to the Board nominees
for election by shareholders or for appointment by
the remaining Directors to fill vacancies on the
Board;
2. To review and consider the performance of and to
recommend the appointment or reappointment of
officers of the Corporation.
D. The Audit Committee shall consist of two or more
Directors, none of whom shall otherwise be employed by the
Corporation, and shall have the following responsibilities:
1. To recommend to the Board the engagement or
discharge of the Corporation's independent auditor
of its financial statements;
2. To direct and supervise all investigations into
matters relating to or rising from the performance
and results of each independent audit;
3. To review with the Corporation's independent
auditor the plan and results of each independent
audit engagement;
4. To review the scope, adequacy and results of the
Corporation's internal auditing procedures;
5. To review and to approve or disapprove each
service to be performed for the Corporation by the
independent auditor before such service is
performed; except that the Committee is authorized
to permit the President or the Chief Financial
Officer to engage the independent auditor or
perform any category of service specified by the
Committee under circumstances deemed appropriate
by the Audit Committee;
6. To review the degree of independence of the independent
auditor;
7. To consider the range of audit and non-audit fees; and
8. To review the adequacy of the Corporation's system
of internal accounting controls.
E. The Insurance Evaluation Committee shall consist of two
or more Directors, and shall have the following responsibilities:
1. To review periodically the Corporation's insurance
programs and to advise and recommend any action
deemed appropriate with respect thereto; and
2. To review periodically the Corporation's insurance
needs and to advise and recommend any action
deemed appropriate with respect thereto.
F. The Shareholder Relations Committee shall consist of
three or more non-officer directors and shall have the authority
of the Board of Directors with respect to investigating,
inquiring into and considering issues related to certain
shareholders' interest and rights and considering and acting upon
shareholder matters as assigned, from time to time, by the
Chairman of the Board.
1.2 Special Purpose Committees. The Board may authorize on
an ad hoc basis special pricing committees in connection with the
issuance of securities or such other special purpose committees
as may be necessary or appropriate in connection with the Board's
management of the business and affairs of the Corporation.
Section 2. Appointment and Removal of Committee Members
Subject to Section 5 below, Directors shall be appointed to
or removed from a committee only upon the affirmative votes of:
1. A majority of the Directors then in office; and
2. A majority of the Continuing Directors, voting as
a separate group.
Each member of a committee shall hold office during the term
designated by the Board.
Section 3. Procedures for Committees
Each committee shall keep written minutes of its meetings.
All action taken by a committee shall be reported to the Board of
Directors at its next meeting, whether regular or special.
Failure to keep written minutes or to make such a report shall
not affect the validity of action taken by a committee. Each
committee shall adopt such regulations (not inconsistent with the
Articles of Incorporation, these Bylaws or any regulations
specified for such committee by the Board of Directors) as it
shall deem necessary for the proper conduct of its functions and
the performance of its responsibilities.
Section 4. Meetings
A majority of the members of any committee shall constitute
a quorum and action by a majority (or by any super majority
required by law, the Articles of Incorporation, these Bylaws or
any applicable resolution adopted by the Board of Directors) of a
quorum at any meeting of a committee shall be deemed action by
the committee. The committee may also take action without
meeting if all members thereof consent in writing thereto.
Meetings of a committee may be held by telephone conference calls
or other communications equipment provided each person
participating may hear and be heard by all other meeting
participants.
Section 5. Authority of Chairman to Appoint Committees
Whenever the Board of Directors is not in session, the
Chairman may fill vacancies in any committees and may create such
new committees as he deems necessary or useful and appoint
Directors as members thereof. Any such action by the Chairman,
and any action taken by such new committee, shall be subject to
ratification or disapproval by the Board at its next meeting.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings
Unless otherwise required by law or these By-laws, all
meetings of the shareholders shall be held at the principal
office of the Corporation or at such other place, within or
without the State of Louisiana, as may be designated by the Board
of Directors.
Section 2. Annual Meeting
An annual meeting of the shareholders shall be held on the
date and at the time as the Board of Directors shall designate
for the purpose of electing directors and for the transaction of
such other business as may be properly brought before the
meeting. If no annual shareholders' meeting is held for a period
of 18 months, any shareholder may call such meeting to be held at
the registered office of the Corporation as shown on the records
of the Secretary of State of the State of Louisiana.
Section 3. Special Meetings
Special meetings of the shareholders, for any purpose or
purposes, may be called by the Chairman of the Board, the
President or the Board of Directors. Subject to the terms of any
outstanding class or series of Preferred Stock that entitles the
holders thereof to call special meetings, the holders of a
majority of the Total Voting Power shall be required to cause the
Secretary of the Corporation to call a special meeting of
shareholders pursuant to La. R.S. 12:73B (or any successor
provision). Such requests of shareholders must state the
specific purpose or purposes of the proposed special meeting, and
the business to be brought before such meeting by the
shareholders shall be limited to such purpose or purposes.
Section 4. Notice of Meetings
Except as otherwise provided by law, the authorized person
or persons calling a shareholders' meeting shall cause written
notice of the time and place of the meeting to be given to all
shareholders of record entitled to vote at such meeting at least
10 days and not more than 60 days prior to the day fixed for the
meeting. Notice of the annual meeting need not state the purpose
or purposes thereof, unless action is to be taken at the meeting
as to which notice is required by law, the Articles of
Incorporation or the Bylaws. Notice of a special meeting shall
state the purpose or purposes thereof. Any previously scheduled
meeting of the shareholders may be postponed, and (unless
provided otherwise by law or the Articles of Incorporation) any
special meeting of the shareholders may be cancelled, by
resolution of the Board of Directors upon public notice given
prior to the date previously scheduled for such meeting of
shareholders.
Section 5. Notice of Shareholder Nominations and Shareholder
Business
5.1 Business Brought Before Meetings. At any meeting of the
shareholders, only such business shall be conducted as shall have
been properly brought before the meeting. Nominations for the
election of directors at a meeting at which directors are to be
elected may be made by or at the direction of the Board of
Directors, or a committee duly appointed thereby, or by any
shareholder of record entitled to vote generally for the election
of directors who complies with the procedures set forth below.
Other matters to be properly brought before a meeting of the
shareholders must be (a) specified in the notice of meeting (or
any supplement thereto) given by or at the direction of the Board
of Directors, including matters covered by Rule 14a-8 of the
Securities and Exchange Commission, (b) otherwise properly
brought before the meeting by or at the direction of the Board of
Directors, or (c) otherwise properly brought before the meeting
by any shareholder of record entitled to vote at such meeting who
complies with the procedures set forth below.
5.2 Required Notice. A notice of the intent of a shareholder
to make a nomination or to bring any other matter before the
meeting shall be made in writing and received by the Secretary of
the Corporation not more than 210 days and not less than 70 days
in advance of the first anniversary of the preceding year's
annual meeting of shareholders or, in the event of a special
meeting of shareholders or an annual meeting scheduled to be held
either 30 days earlier or later than such anniversary date, such
notice shall be received by the Secretary of the Corporation
within 15 days of the earlier of the date on which notice of such
meeting is first mailed to shareholders or public disclosure of
the meeting date is made. In no event shall the public
announcement of an adjournment of a shareholders' meeting
commence a new time period for the giving of a shareholder's
notice as described above.
5.3 Contents of Notice. Every such notice by a shareholder
shall set forth:
(a) the name, age, business address and residential
address of the shareholder of record who intends to make a
nomination or bring up any other matter, and any beneficial owner
or other person acting in concert with such shareholder;
(b) a representation that the shareholder is a holder
of record of shares of the Corporation's capital stock that
accord such shareholder the voting rights specified in paragraph
5.1 above and that the shareholder intends to appear in person at
the meeting to make the nomination or bring up the matter
specified in the notice;
(c) with respect to notice of an intent to make a
nomination, a description of all agreements, arrangements or
understandings among the shareholder, any person acting in
concert with the shareholder, each proposed nominee and any other
person or persons (naming such person or persons) pursuant to
which the nomination or nominations are to be made by the
shareholder;
(d) with respect to notice of an intent to make a
nomination, (i) the name, age, business address and residential
address of each person proposed for nomination, (ii) the
principal occupation or employment of such person, (iii) the
class and number of shares of capital stock of the Corporation of
which such person is the beneficial owner, and (iv) any other
information relating to such person that would be required to be
disclosed in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission had such nominee been
nominated by the Board of Directors; and
(e) with respect to notice of an intent to bring up
any other matter, a complete and accurate description of the
matter, the reasons for conducting such business at the meeting,
and any material interest in the matter of the shareholder and
the beneficial owner, if any, on whose behalf the proposal is
made.
5.4 Other Required Information. Notice of an intent to make
a nomination shall be accompanied by the written consent of each
nominee to serve as a director of the Corporation if so elected
and an affidavit of each such nominee certifying that he meets
the qualifications specified in Section 11 of Article II of these
Bylaws. The Corporation may require any proposed nominee to
furnish such other information or certifications as may be
reasonably required by the Corporation to determine the
eligibility and qualifications of such person to serve as a
director.
5.5 Disqualification of Certain Proposals. With respect to
any proposal by a shareholder to bring before a meeting any
matter other than the nomination of directors, the following
shall govern:
(a) If the Secretary of the Corporation has received
sufficient notice of a proposal that may properly be brought
before the meeting, a proposal sufficient notice of which is
subsequently received by the Secretary and that is substantially
duplicative of the first proposal shall not be properly brought
before the meeting. If in the judgment of the Board of Directors
a proposal deals with substantially the same subject matter as a
prior proposal submitted to shareholders at a meeting held within
the preceding five years, it shall not be properly brought before
any meeting held within three years after the latest such
previous submission if (i) the proposal was submitted at only one
meeting during such preceding period and it received affirmative
votes representing less than 3% of the total number of votes cast
in regard thereto, (ii) the proposal was submitted at only two
meetings during such preceding period and it received at the time
of its second submission affirmative votes representing less than
6% of the total number of votes cast in regard thereto, or (iii)
the proposal was submitted at three or more meetings during such
preceding period and it received at the time of its latest
submission affirmative votes representing less than 10% of the
total number of votes cast in regard thereto.
(b) Notwithstanding compliance with all of the
procedures set forth above in this Section, no proposal shall be
deemed to be properly brought before a meeting of shareholders
if, in the judgment of the Board, it is not a proper subject for
action by shareholders under Louisiana law.
5.6 Power to Disregard Proposals. At the meeting of
shareholders, the chairman shall declare out of order and
disregard any nomination or other matter not presented in
accordance with the foregoing procedures or which is otherwise
contrary to the foregoing terms and conditions.
5.7 Rights of Shareholders Under Federal Proxy Rules.
Nothing in this Section shall be deemed to modify any rights or
obligations of shareholders with respect to requesting inclusion
of proposals in the Corporation's proxy statement or soliciting
their own proxies pursuant to the proxy rules of the Securities
and Exchange Commission.
5.8 Rights of Preferred Shareholders. Nothing in this
Section shall be deemed to modify any rights of holders of any
outstanding class or series of Preferred Stock to elect directors
or bring other matters before a shareholders' meeting in the
manner specified by the terms and conditions governing such
stock.
Section 6. Quorum
6.1 Establishment of Quorum. At all meetings of
shareholders, the holders of a majority of the Total Voting Power
shall constitute a quorum to organize the meeting, provided,
however, that at any meeting the notice of which sets forth any
matter that, by law or the Articles of Incorporation, must be
approved by the affirmative vote of the holders of a specified
percentage in excess of a majority of the Total Voting Power
present or represented at the shareholders' meeting, the holders
of that specified percentage shall constitute a quorum, and
further provided that when specified business is to be voted on
by a class or series of stock voting as a class, the holders of a
majority of the voting power of such class or series shall
constitute a quorum of such class or series for the transaction
of such business. Shares of Voting Stock as to which the holders
have voted or abstained from voting with respect to any matter
considered at a meeting, or which are subject to Non-Votes (as
defined in Section 6.3 below), shall be counted as present for
purposes of constituting a quorum to organize a meeting.
6.2 Withdrawal. If a quorum is present or represented at a
duly organized meeting, such meeting may continue to do business
until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum, or the refusal of any
shareholders present to vote.
6.3 Non-Votes. As used in these Bylaws, "Non-Votes" shall
mean the number of votes as to which the record holder or proxy
holder of shares of Capital Stock has been precluded from voting
thereon (whether by law, regulations of the Securities and
Exchange Commission, rules or bylaws of any national securities
exchange or other self-regulatory organization, or otherwise),
including without limitation votes as to which brokers may not or
do not exercise discretionary voting power under the rules of the
New York Stock Exchange with respect to any matter for which the
broker has not received voting instructions from the beneficial
owner of the voting shares.
Section 7. Voting Power Present or Represented
For purposes of determining the amount of Total Voting Power
present or represented at any annual or special meeting of
shareholders with respect to voting on any particular matter,
shares as to which the holders have abstained from voting, and
shares which are subject to Non-Votes (as defined in Section
6.3), will be treated as not present and not cast.
Section 8. Voting Requirements
When a quorum is present at any meeting, the vote of the
holders of a majority of the Total Voting Power present in person
or represented by proxy shall decide any question brought before
such meeting, unless the question is one upon which, by express
provision of law or the Articles of Incorporation, a different
vote is required, in which case such express provision shall
govern and control the decision of such question. Directors
shall be elected by plurality vote.
Section 9. Proxies
At any meeting of the shareholders, every shareholder having
the right to vote shall be entitled to vote in person or by proxy
appointed by an instrument in writing subscribed by such
shareholder and bearing a date not more than 11 months prior to
the meeting, unless the instrument provides for a longer period,
but in no case will an outstanding proxy be valid for longer than
three years from the date of its execution. The person appointed
as proxy need not be a shareholder of the Corporation.
Section 10. Adjournments
10.1 Adjournments of Meetings. Adjournments of any annual or
special meeting of shareholders may be taken without new notice
being given unless a new record date is fixed for the adjourned
meeting, but any meeting at which directors are to be elected
shall be adjourned only from day to day until such directors
shall have been elected.
10.2Lack of Quorum. If a meeting cannot be organized because
a quorum has not attended, those present may adjourn the meeting
to such time and place as they may determine, subject, however,
to the provisions of Section 10.1 hereof. In the case of any
meeting called for the election of directors, those who attend
the second of such adjourned meetings, although less that a
quorum as fixed in Section 6.1 hereof, shall nevertheless
constitute a quorum for the purpose of electing directors.
Section 11. Written Consents
Any action required or permitted to be taken at any annual
or special meeting of shareholders may be taken only upon the
vote of the shareholders, present in person or represented by
duly authorized proxy, at an annual or special meeting duly
noticed and called, as provided in these Bylaws, and may not be
taken by a written consent of the shareholders pursuant to the
Business Corporation Law of the State of Louisiana.
Section 12. List of Shareholders
At every meeting of shareholders, a list of shareholders
entitled to vote, arranged alphabetically and certified by the
Secretary or by the agent of the Corporation having charge of
transfers of shares, showing the number and class of shares held
by each shareholder on the record date for the meeting, shall be
produced on the request of any shareholder.
Section 13. Procedure at Shareholders' Meetings
The Chairman of the Board, or in his absence, the Vice
Chairman, shall preside as chairman at all shareholders'
meetings. The organization of each shareholders' meeting and all
matters relating to the manner of conducting the meeting shall be
determined by the chairman, including the order of business, the
conduct of discussion and the manner of voting. Meetings shall
be conducted in a manner designed to accomplish the business of
the meeting in a prompt and orderly fashion and to be fair and
equitable to all shareholders, but it shall not be necessary to
follow Roberts' Rules of Order or any other manual of
parliamentary procedure.
ARTICLE V
CERTIFICATES OF STOCK
Certificates of stock issued by the Corporation shall be
numbered and shall be entered into the books of the Corporation
as they are issued. They shall exhibit the holder's name and
number of shares and shall be signed by the President or any
Vice-President and by the Treasurer, Secretary or any Assistant
Secretary, all in the manner required by law.
ARTICLE VI
REGISTERED SHAREHOLDERS
The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact
thereof and accordingly shall not be bound to recognize any
beneficial, equitable or other claim to or interest in such share
on the part of any other person, whether or not it shall have
express or other notice thereof, except as expressly provided by
the laws of Louisiana.
ARTICLE VII
LOSS OF CERTIFICATE
Any person claiming a certificate of stock to be lost or
destroyed shall make an affidavit or affirmation of that fact,
and the Board of Directors, the General Counsel or the Secretary
may, in his or its discretion, require the owner of the lost of
destroyed certificate or his legal representative, to give the
Corporation a bond, in such sum as the Board of Directors, the
General Counsel or the Secretary may require, to indemnify the
Corporation against any claim that may be made against the
Corporation on account of the alleged loss or destruction of any
such certificate; a new certificate of the same tenor and for the
same number of shares as the one alleged to be lost or destroyed,
may be issued without requiring any bond when, in the judgment of
the Board of Directors, the General Counsel or the Secretary, it
is proper to do so.
ARTICLE VIII
CHECKS
All checks, drafts and notes of the Corporation shall be
signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time
designate.
ARTICLE IX
DIVIDENDS
Dividends upon the capital stock of the Corporation, subject
to the provisions of the Articles of Incorporation, if any, may
be declared by the Board of Directors at any regular or special
meetings, pursuant to law.
ARTICLE X
INAPPLICABILITY OF LOUISIANA CONTROL SHARE STATUTE
Effective May 23, 1995, the provisions of La. R.S. 12:135
through 12:140.2 shall not apply to control share acquisitions of
shares of the Corporation's Capital Stock.
ARTICLE XI
CERTAIN DEFINITIONS
The terms Capital Stock, Continuing Directors, Total Voting
Power and Voting Stock shall have the meanings ascribed to them
in the Articles of Incorporation, provided, however, that for
purposes of Sections 3 and 6 of Article IV of these Bylaws, Total
Voting Power shall mean the total number of votes that holders of
Capital Stock are entitled to cast generally in the election of
directors.
ARTICLE XII
AMENDMENTS
These Bylaws may only be altered, amended or repealed in the
manner specified in the Articles of Incorporation.
CENTURY TELEPHONE ENTERPRISES, INC.
1995 INCENTIVE COMPENSATION PLAN
1. Purpose. The purpose of the 1995 Incentive Compensation
Plan (the "Plan") of Century Telephone Enterprises, Inc.
("Century") is to increase shareholder value and to advance the
interests of Century and its subsidiaries (collectively, the
"Company") by furnishing a variety of economic incentives (the
"Incentives") designed to attract, retain and motivate employees
and officers and to strengthen the mutuality of interests between
such employees and officers and Century's shareholders.
Incentives may consist of opportunities to purchase or receive
shares of common stock, $1.00 par value per share, of Century
(the "Common Stock"), on terms determined under the Plan. As
used in the Plan, the term "subsidiary" means any corporation of
which Century owns (directly or indirectly) within the meaning of
Section 425(f) of the Internal Revenue Code of 1986, as amended
(the "Code"), 50% or more of the total combined voting power of
all classes of stock. No Incentives shall be granted hereunder
unless the Plan is first approved by the shareholders of Century.
2. Administration.
2.1 Composition. The Plan shall be administered by the
compensation committee of the Board of Directors of Century,
or by a subcommittee of the compensation committee. The
committee or subcommittee that administers the Plan shall
hereinafter be referred to as the "Committee". The Committee
shall consist of not fewer than two members of the Board of
Directors, each of whom shall (a) qualify as a "disinterested
person" under Rule 16b-3 under the Securities Exchange Act of
1934 (the "1934 Act"), as currently in effect or any
successor rule, and (b) beginning on the date of Century's
1996 annual meeting of shareholders, qualify as "outside
directors" under Section 162(m) of the Code.
2.2 Authority. The Committee shall have plenary
authority to award Incentives under the Plan, to interpret
the Plan, to establish any rules or regulations relating to
the Plan that it determines to be appropriate, to enter into
agreements with participants as to the terms of the
Incentives (the "Incentive Agreements") and to make any other
determination that it believes necessary or advisable for the
proper administration of the Plan. Its decisions in matters
relating to the Plan shall be final and conclusive on the
Company and participants. The Committee may delegate its
authority hereunder to the extent provided in Section 3
hereof. The Committee shall not have authority to award
Incentives under the Plan to directors in their capacities as
such.
3. Eligible Participants. Key employees of the Company
(including officers who also serve as directors of the Company)
shall become eligible to receive Incentives under the Plan when
designated by the Committee. Employees may be designated
individually or by groups or categories, as the Committee deems
appropriate. With respect to participants not subject to Section
16 of the 1934 Act, the Committee may delegate to appropriate
personnel of the Company its authority to designate participants,
to determine the size and type of Incentives to be received by
those participants and to determine or modify performance
objectives for those participants.
4. Types of Incentives. Incentives may be granted under the
Plan to eligible participants in any of the following forms,
either individually or in combination, (a) incentive stock
options and non-qualified stock options; (b) stock appreciation
rights ("SARs") (c) restricted stock; and (d) performance shares.
5. Shares Subject to the Plan.
5.1. Number of Shares. Subject to adjustment as
provided in Section 10.6, a total of 2 million shares of
Common Stock are authorized to be issued under the Plan,
Incentives with respect to no more than 200,000 shares of
Common Stock may be granted through the Plan to a single
participant in one calendar year. No more than 500,000
shares may be issued through the Plan as restricted stock.
In the event that a stock option, SAR or performance share
granted hereunder expires or is terminated or cancelled prior
to exercise or payment, any shares of Common Stock that were
issuable thereunder may again be issued under the Plan. In
the event that shares of Common Stock are issued as
Incentives under the Plan and thereafter are forfeited or
reacquired by the Company pursuant to rights reserved upon
issuance thereof, such forfeited and reacquired shares may
again be issued under the Plan. If an Incentive is to be
paid in cash by its terms, the Committee need not make a
deduction from the shares of Common Stock issuable under the
Plan with respect thereto. If and to the extent that an
Incentive may be paid in cash or shares of Common Stock, the
total number of shares available for issuance hereunder shall
be debited by the number of shares payable under such
Incentive, provided that upon any payment of all or part of
such Incentive in cash, the total number of shares available
for issuance hereunder shall be credited with the appropriate
number of shares represented by the cash payment, as
determined in the sole discretion of the Committee.
Additional rules for determining the number of shares granted
under the Plan may be made by the Committee, as it deems
necessary or appropriate.
5.2. Type of Common Stock. Common Stock issued under
the Plan may be authorized and unissued shares or issued
shares held as treasury shares.
6. Stock Options. A stock option is a right to purchase
shares of Common Stock from Century. Stock options granted under
this Plan may be incentive stock options or non-qualified stock
options. Any option that is designated as a non-qualified stock
option shall not be treated as an incentive stock option. Each
stock option granted by the Committee under this Plan shall be
subject to the following terms and conditions:
6.1. Price. The exercise price per share shall be
determined by the Committee, subject to adjustment under
Section 10.6; provided that in no event shall the exercise
price be less than the Fair Market Value of a share of Common
Stock on the date of grant.
6.2. Number. The number of shares of Common Stock
subject to the option shall be determined by the Committee,
subject to Section 5.1 and subject to adjustment as provided
in Section 10.6.
6.3. Duration and Time for Exercise. Subject to earlier
termination as provided in Section 10.4, the term of each
stock option shall be determined by the Committee. Subject
to Section 10.12, each stock option shall become exercisable
at such time or times during its term as shall be determined
by the Committee, provided, however, that, except as provided
below, no stock option granted to an officer or director of
Century who is subject to Section 16 of the 1934 Act (an
"Insider") shall be exercisable within the six-month period
immediately following the date of grant. Notwithstanding the
foregoing, the Committee may accelerate the exercisability of
any stock option at any time, except to thet extent of any
automataic acceleration of stock options under Section 10.12.
6.4. Repurchase. Upon approval of the Committee, the
Company may repurchase a previously granted stock option from
a participant by mutual agreement before such option has been
exercised by payment to the participant of the amount per
share by which: (i) the Fair Market Value (as defined in
Section 10.13) of the Common Stock subject to the option on
the business day immediately preceding the date of purchase
exceeds (ii) the exercise price.
6.5. Manner of Exercise. A stock option may be exer-
cised, in whole or in part, by giving written notice to the
Company, specifying the number of shares of Common Stock to
be purchased. The exercise notice shall be accompanied by
the full purchase price for such shares. The option price
shall be payable in United States dollars and may be paid by
(a) cash; (b) uncertified or certified check; (c) unless
otherwise determined by the Committee, by delivery of shares
of Common Stock held by the optionee for at least six months,
which shares shall be valued for this purpose at the Fair
Market Value on the business day immediately preceding the
date such option is exercised; (d) by the simultaneous
exercise of options and sale of the shares of Common Stock
acquired upon simultaneous exercise of options and sale of
the shares of Common Stock acquired upon exercise, pursuant
to a brokerage arrangement that has been approved in advance
by the Committee, with the proceeds from such sale delivered
in payment of the exercise price; or (e) in such other manner
as may be authorized from time to time by the Committee. In
the case of delivery of an uncertified check upon exercise of
a stock option, no shares shall be issued until the check has
been paid in full. Prior to the issuance of shares of Common
Stock upon the exercise of a stock option, a participant
shall have no rights as a shareholder.
6.6. Incentive Stock Options. Notwithstanding anything
in the Plan to the contrary, the following additional
provisions shall apply to the grant of stock options that are
intended to qualify as Incentive Stock Options (as such term
is defined in Section 422 of the Code):
(a) Any Incentive Stock Option agreement authorized
under the Plan shall contain such other provisions as the
Committee shall deem advisable, but shall in all events
be consistent with and contain or be deemed to contain
all provisions required in order to qualify the options
as Incentive Stock Options.
(b) All Incentive Stock Options must be granted
within ten years from the date on which this Plan is
adopted by the Board of Directors.
(c) Unless sooner exercised, all Incentive Stock
Options shall expire no later than ten years after the
date of grant.
(d) No Incentive Stock Options shall be granted to
any participant who, at the time such option is granted,
would own (within the meaning of Section 422 of the Code)
stock possessing more than 10% of the total combined
voting power of all classes of stock of the employer
corporation or of its parent or subsidiary corporation.
(e) The aggregate Fair Market Value (determined with
respect to each Incentive Stock Option as of the time
such Incentive Stock Option is granted) of the Common
Stock with respect to which Incentive Stock Options are
exercisable for the first time by a participant during
any calendar year (under the Plan or any other plan of
Century or any of its subsidiaries) shall not exceed
$100,000. To the extent that such limitation is
exceeded, such options shall not be treated, for federal
income tax purposes, as incentive stock options.
6.7 Equity Maintenance. If a participant exercises an
option during the term of his employment with the Company,
and pays the exercise price (or any portion thereof) through
the surrender of shares of outstanding Common Stock owned by
the participant, the Committee may, in its discretion, grant
to such participant an additional option to purchase the
number of shares of Common Stock equal to the shares of
Common Stock so surrendered by such participant. Any such
additional options granted by the Committee shall be
exercisable at the Fair Market Value of the Common Stock
determined as of the business day immediately preceding the
respective dates such additional options may be granted. As
stated above, such additional options may be granted only in
connection with the exercise of options by the participant
during the term of his active employment with the Company.
The grant of such additional options under this Section 6.7
shall be made upon such other terms and conditions as the
Committee may from time to time determine.
7. Restricted Stock
7.1 Grant of Restricted Stock. The Committee may award
shares of restricted stock to such key employees as the
Committee determines to be eligible pursuant to the terms of
Section 3. An award of restricted stock may be subject to
the attainment of specified performance goals or targets,
restrictions on transfer, forfeitability provisions and such
other terms and conditions as the Committee may determine,
subject to the provisions of the Plan. To the extent
restricted stock is intended to qualify as performance based
compensation under Section 162(m) of the Code, it must meet
the additional requirements imposed thereby.
7.2 The Restricted Period. At the time an award of
restricted stock is made, the Committee shall establish a
period of time during which the transfer of the shares of
restricted stock shall be restricted (the "Restricted
Period"). Each award of restricted stock may have a
different Restricted Period. A Restricted Period of at least
three is required, except that if vesting of the shares is
subject tot he attainment of specified performance goals, a
Restricted Period of one year or more is permitted. In
addition, any participant subject to Section 16 of the 1934
Act shall be prohibited from selling or otherwise
transferring shares of restricted stock for a period of six
months from the grant thereof. The expiration of the
Restricted Period shall also occur as provided under Section
10.4 and under the conditions described in Section 10.12
hereof.
7.3 Escrow. The participant receiving restricted stock
shall enter into an Incentive Agreement with the Company
setting forth the conditions of the grant. Certificates
representing shares of restricted stock shall be registered
in the name of the participant and deposited with the
Company, together with a stock power endorsed in blank by the
participant. Each such certificate shall bear a legend in
substantially the following form:
The transferability of this certificate and the
shares of Common Stock represented by it are subject
to the terms and conditions (including conditions of
forfeiture) contained in the Century Telephone
Enterprises, Inc. 1995 Incentive Compensation Plan
(the "Plan"), and an agreement entered into between
the registered owner and Century Telephone
Enterprises, Inc. thereunder. Copies of the Plan and
the agreement are filed at the principal office of
the Company.
7.4 Dividends on Restricted Stock. Any and all cash and
stock dividends paid with respect to the shares of restricted
stock shall be subject to any restrictions on transfer,
forfeitability provisions or reinvestment requirements as the
Committee may, in its discretion, prescribe in the Incentive
Agreement.
7.5 Forfeiture. In the event of the forfeiture of any
shares of restricted stock under the terms provided in the
Incentive Agreement (including any additional shares of
restricted stock that may result from the reinvestment of
cash and stock dividends, if so provided in the Incentive
Agreement), such forfeited shares shall be surrendered and
the certificates cancelled. The participants shall have the
same rights and privileges, and be subject to the same
forfeiture provisions, with respect to any additional shares
received pursuant to Section 10.6 due to a recapitalization,
merger or other change in capitalization.
7.6 Expiration of Restricted Period. Upon the
expiration or termination of the Restricted Period and the
satisfaction of any other conditions prescribed by the
Committee or at such earlier time as provided for in Section
7.2 and in the Incentive Agreement or an amendment thereto,
the restrictions applicable to the restricted stock shall
lapse and a stock certificate for the number of shares of
restricted stock with respect to which the restrictions have
lapsed shall be delivered, free of all such restrictions and
legends, except any that may be imposed by law, to the
participant or the participant's estate, as the case may be.
7.7 Rights as a Shareholder. Subject to the terms and
conditions of the Plan and subject to any restrictions on the
receipt of dividends that may be imposed in the Incentive
Agreement, each participant receiving restricted stock shall
have all the rights of a shareholder with respect to shares
of stock during any period in which such shares are subject
to forfeiture and restrictions on transfer, including without
limitation, the right to vote such shares.
8. Stock Appreciation Rights. A SAR is a right to receive,
without payment to the Company, a number of shares of Common
Stock, cash or any combination thereof, the amount of which is
determined pursuant to the formula set forth in Section 8.4. A
SAR may be granted (a) with respect to any stock option granted
under the Plan, either concurrently with the grant of such stock
option or at such later time as determined by the Committee (as
to all or any portion of the shares of Common Stock subject to
the stock option), or (b) alone, without reference to any related
stock option. Each SAR granted by the Committee under the Plan
shall be subject to the following terms and conditions:
8.1 Number. Each SAR granted to any participant shall
relate to such number of shares of Common Stock as shall be
determined by the Committee, subject to Section 5.1 and
subject to adjustment as provided in Section 10.6. In the
case of a SAR granted with respect to a stock option, the
number of shares of Common Stock to which the SAR pertains
shall be reduced in the same proportion that the holder of
the option exercises the related stock option.
8.2 Duration and Time for Exercise. Subject to Section
10.12, the term and exercisability of each SAR shall be
determined by the Committee. Unless otherwise provided by
the Committee in the Incentive Agreement, each SAR issued in
connection with a stock option shall become exercisable at
the same time or times, to the same extent and upon the same
conditions as the related stock option. No SAR granted to a
person subject to Section 16 of the 1934 Act may be exercised
during the first six months of its term. Notwithstanding the
foregoing, the Committee may in its discretion accelerate the
exercisability of any SAR at any time, except to the extent
of any automatic acceleration of SARs under Section 10.12.
8.3 Exercise. A SAR may be exercised, in whole or in
part, by giving written notice to the Company, specifying the
number of SARs that the holder wishes to exercise. The
Company shall, within 30 days of receipt of notice of
exercise by the Company, deliver to the exercising holder
certificates for the shares of Common Stock or cash or both,
as determined by the Committee, to which the holder is
entitled pursuant to Section 8.4.
8.4 Payment. Subject to the right of the Committee to
deliver cash in lieu of shares of Common Stock, the number of
shares of Common Stock that shall be issuable upon the
exercise of an SAR shall be determined by dividing:
(a) the number of shares of Common Stock as to which
the SAR is exercised multiplied by the dollar amount of
the appreciation in such shares (for this purpose, the
"appreciation" shall be the amount by which the Fair
Market Value of the shares of Common Stock subject to the
SAR on the Exercise Date exceeds (1) in the case of a SAR
related to a stock option, the purchase price of the
shares of Common Stock under the stock option or (2) in
the case of a SAR granted alone, without reference to a
related stock option, an amount equal to the Fair Market
Value of a share of Common Stock on the date of grant,
which shall be determined by the Committee at the time of
grant, subject to adjustment under Section 10.6); by
(b) the Fair Market Value of a share of Common Stock
on the Exercise Date.
In lieu of issuing shares of Common Stock upon the
exercise of a SAR, the Committee may elect to pay the holder
of the SAR cash equal to the Fair Market Value on the
Exercise Date of any or all of the shares which would
otherwise be issuable. No fractional shares of Common Stock
shall be issued upon the exercise of a SAR; instead, the
holder of a SAR shall be entitled to receive a cash
adjustment equal to the same fraction of the Fair Market
Value of a share of Common Stock on the Exercise Date or to
purchase the portion necessary to make a whole share at its
Fair Market Value on the Exercise Date.
9. Performance Shares. A performance share consists of an
award that may be paid in shares of Common Stock or in cash, as
described below. The award of performance shares shall be
subject to such terms and conditions as the Committee deems
appropriate.
9.1 Performance Objectives. Each performance share
will be subject to performance objectives for Century or one
of its subsidiaries, divisions or departments to be achieved
by the end of a specified period. The number of performance
shares awarded shall be determined by the Committee and may
be subject to such terms and conditions as the Committee
shall determine. If the performance objectives are achieved,
each participant will be paid (a) a number of shares of
Common Stock equal to the number of performance shares
initially granted to that participant; (b) a cash payment
equal to the Fair Market Value of such number of shares of
Common Stock on the date the performance objectives are met
or such other date as may be provided by the Committee or (c)
a combination of shares of Common Stock and cash, as may be
provided by the Committee. If such objectives are not met,
each award of performance shares may provide for lesser
payments in accordance with a pre-established formula set
forth in the Incentive Agreement. To the extent a
performance share is intended to qualify as performance based
compensation under Section 162(m) of the Code, it must meet
the additional requirements imposed thereby.
9.2 Not a Shareholder. The award of performance shares
to a participant shall not create any rights in such partic-
ipant as a shareholder of the Company, until the payment of
shares of Common Stock with respect to an award, at which
time such stock shall be considered issued and outstanding.
9.3 Dividend Equivalent Payments. A performance share
award may be granted by the Committee in conjunction with
dividend equivalent payment rights or other such rights.
Dividend equivalent payments may be made to the participant
at the time of the payment of the dividend or issuance of the
other right or at the end of the specified performance period
or may be deemed to be invested in additional performance
shares at the Fair Market Value of a share of Common Stock on
the date of payment of the dividend or issuance of the right.
10. General.
10.1. Duration. Subject to Section 10.11, the Plan
shall remain in effect until all Incentives granted under the
Plan have either been satisfied by the issuance of shares of
Common Stock or the payment of cash or been terminated under
the terms of the Plan and all restrictions imposed on shares
of Common Stock in connection with their issuance under the
Plan have lapsed.
10.2 Transferability of Incentives. Options, SARs and
performance shares granted under the Plan shall not be
transferable except: (a) by will; (b) by the laws of descent
and distribution; (c) to family members, to a trust for the
benefit of family members or to charitable institutions, if
permitted by the Committee and provided in the Incentive
Agreement, after a determination that the ability to transfer
the Incentive will not result in the grant of the Incentive
being taxable and, with respect to such Incentives to
Insiders, if permitted by Rule 16b-3 under the 1934 Act; or
(d) pursuant to a domestic relations order, as defined by the
Code. Options or SARs may be exercised during the lifetime
of a participant only by the participant or by the
participant's guardian or legal representative. Any
attempted assignment, transfer, pledge, hypothecation or
other disposition of an Incentive, or levy of attachment or
similar process upon the Incentive not specifically permitted
herein, shall be null and void and without effect.
10.3. Non-transferability of Common Stock. Any shares
of Common Stock awarded to an Insider as restricted stock, or
in payment of a performance share award must be held for a
period of six months from the date of grant, unless otherwise
permitted to be transfered and still be in compliance with
Rule 16b 3 under the 1934 Act.
10.4. Effect of Termination of Employment or Death. In
the event that a participant ceases to be an employee of the
Company for any reason, including death, disability, early
retirement or normal retirement, any Incentives may be
exercised, shall vest or shall expire at such times as may be
determined by the Committee in the Incentive Agreement.
10.5. Additional Condition. Anything in this Plan to
the contrary notwithstanding: (a) the Company may, if it
shall determine it necessary or desirable for any reason, at
the time of award of any Incentive or the issuance of any
shares of Common Stock pursuant to any Incentive, require the
recipient of the Incentive, as a condition to the receipt
thereof or to the receipt of shares of Common Stock issued
pursuant thereto, to deliver to the Company a written
representation of present intention to acquire the Incentive
or the shares of Common Stock issued pursuant thereto for his
own account for investment and not for distribution; and (b)
if at any time the Company further determines, in its sole
discretion, that the listing, registration or qualification
(or any updating of any such document) of any Incentive or
the shares of Common Stock issuable pursuant thereto is
necessary on any securities exchange or under any federal or
state securities or blue sky law, or that the consent or
approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with the award
of any Incentive, the issuance of shares of Common Stock
pursuant thereto, or the removal of any restrictions imposed
on such shares, such Incentive shall not be awarded or such
shares of Common Stock shall not be issued or such restric-
tions shall not be removed, as the case may be, in whole or
in part, unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free
of any conditions not acceptable to the Company.
10.6. Adjustment. In the event of any recapitalization,
stock dividend, stock split, combination of shares or other
change in the Common Stock, the number of shares of Common
Stock then subject to the Plan, including shares subject to
outstanding Incentives, shall be adjusted in proportion to
the change in outstanding shares of Common Stock. In the
event of any such adjustments, the purchase price of any
option, the performance objectives of any Incentive, and the
shares of Common Stock issuable pursuant to any Incentive
shall be adjusted as and to the extent appropriate, in the
reasonable discretion of the Committee, to provide partici-
pants with the same relative rights before and after such
adjustment.
10.7. Incentive Agreements. The terms of each Incentive
shall be stated in an agreement approved by the Committee.
The Committee may also determine to enter into agreements
with holders of options to reclassify or convert certain
outstanding options, within the terms of the Plan, as
Incentive Stock Options or as non-qualified stock options.
10.8. Withholding. The Company shall have the right to
withhold from any payments made under the Plan or to collect
as a condition of payment, any taxes required by law to be
withheld.
10.9. No Continued Employment. No participant under the
Plan shall have any right, because of his or her par-
ticipation, to continue in the employ of the Company for any
period of time or to any right to continue his or her present
or any other rate of compensation.
10.10. Deferral Permitted. Payment of cash or distribu-
tion of any shares of Common Stock to which a participant is
entitled under any Incentive shall be made as provided in the
Incentive Agreement. Payment may be deferred at the option
of the participant if provided in the Incentive Agreement.
10.11. Amendment of the Plan. The Board may amend or
discontinue the Plan at any time. In addition, no amendment
or discontinuance shall, subject to adjustments permitted
under Section 10.6, change or impair, without the consent of
the recipient, an Incentive previously granted, except that
the Company retains the right to (a) convert any outstanding
Incentive Stock Option to a non-qualified stock option, (b)
require the forfeiture of an Incentive if a participant's
employment is terminated for cause, and (c) exercise all
rights under Section 10.12.
10.12 Change of Control. Notwithstanding anything to
the contrary in the Plan or any related Incentive Agreement,
if (i) Century shall not be the surviving entity in any
merger, consolidation or other reorganization (or survives
only as a subsidiary of an entity other than a previously
wholly-owned subsidiary of the Company), (ii) the Company
sells, leases or exchanges all or substantially all of its
assets to any other person or entity (other than a wholly-
owned subsidiary of the Company), (iii) Century is to be
dissolved or liquidated, (iv) any person or entity, including
a "group" as contemplated by section 13(d)(3) of the 1934
Act, other than an employee benefit plan of the Company or a
related trust, acquires or gains ownership or control
(including, without limitation, power to vote) of more than
30% of the outstanding shares of Century's voting stock, or
(v) as a result of or in connection with a contested election
of directors, the persons who were directors of Century
before such election shall cease to constitute a majority of
the Board of Directors of Century (each such event is
referred to herein as a "Corporate Change"), then upon the
approval by the Board of Directors of Century of any
Corporate Change of the type described in clause (i) to (iii)
or upon a Corporate Change described in clause (iv) or (v),
all outstanding options and SARs shall automatically become
fully exercisable, all restrictions or limitations on any
Incentives shall lapse and all performance criteria and other
conditions relating to the payment of Incentives shall be
deemed to be achieved or waived by the Company, without the
necessity of any action by any person. In addition, no later
than (a) 30 days after the approval by the Board of Directors
of Century of any Corporate Change of the type described in
clauses (i) to (iii) or (b) 30 days after a Corporate Change
of the type described in clause (iv) or (v), the Committee,
acting in its sole discretion without the consent or approval
of any participant (and notwithstanding any removal or
attempted removal of some or all of the members thereof as
directors or committee members), may act to effect one or
more of the following alternatives, which may vary among
individual participants and which may vary among Incentives
held by any individual participant: (1) require that all
outstanding options and/or SARs be exercised on or before a
specified date (before or after such Corporate Change) fixed
by the Committee, after which specified date all unexercised
options and SARs and all rights of participants thereunder
shall terminate, (2) provide for mandatory conversion of some
or all of the outstanding options and SARs held by some or
all participants as of a date, before or after such Corporate
Change, specified by the Committee, in which event such
options and SARs shall be deemed automatically cancelled and
the Company shall pay, or cause to be paid, to each such
participant an amount of cash per share equal to the excess,
if any, of the Change of Control Value of the shares subject
to such option or SAR, as defined and calculated below, over
the exercise price(s) of such options or SARs, or, in lieu of
such cash payment, the issuance of Common Stock having a Fair
Market Value equal to such excess, (3) make such equitable
adjustments to Incentives then outstanding as the Committee
deems appropriate to reflect such Corporate Change (provided,
however, that the Committee may determine in its sole
discretion that no adjustment is necessary to Incentives then
outstanding) or (4) provide that thereafter upon any exercise
of an option or SAR theretofore granted the participant shall
be entitled to purchase under such option or SAR, in lieu of
the number of shares of Common Stock then covered by such
option or SAR, the number and class of shares of stock or
other securities or property (including, without limitation,
cash) to which the participant would have been entitled
pursuant to the terms of the agreement providing for the
merger, consolidation, asset sale, dissolution or other
Corporate Change of the type described in clause (i) to (iii)
above, if, immediately prior to such Corporate Change, the
participant had been the holder of record of the number of
shares of Common Stock then covered by such options or SARs.
For the purposes of clause (2) above, the "Change of Control
Value" shall equal the amount determined by whichever of the
following items is applicable: (i) the per share price
offered to shareholders of Century in any such merger,
consolidation or other reorganization, determined as of the
date of the definitive agreement providing for such
transaction, (ii) the price per share offered to shareholders
of Century in any tender offer or exchange offer whereby a
Corporate Change takes place, or (iii) in all other events,
the Fair Market Value per share of Common Stock into which
such options or SARs being converted are exercisable, as
determined by the Committee as of the date determined by the
Committee to be the date of conversion of such options or
SARs. In the event that the consideration offered to
shareholders of Century in any transaction described herein
consists of anything other than cash, the Committee shall
determine the fair cash equivalent of the portion of the
consideration offered which is other than cash.
10.13. Definition of Fair Market Value. Whenever "Fair
Market Value" of Common Stock shall be determined for pur-
poses of this Plan, it shall be determined as follows: (i) if
the Common Stock is listed on an established stock exchange
or any automated quotation system that provides sale
quotations, the closing sale price for a share of the Common
Stock on such exchange or quotation system on the applicable
date; (ii) if the Common Stock is not listed on any exchange
or quotation system, but bid and asked prices are quoted and
published, the mean between the quoted bid and asked prices
on the applicable date, and if bid and asked prices are not
available on such day, on the next preceding day on which
such prices were available; and (iii) if the Common Stock is
not regularly quoted, the fair market value of a share of
Common Stock on the applicable date as established by the
Committee in good faith.
10.14. Compliance with Section 16. It is the intent of
the Company that the Plan and Incentives hereunder satisfy
and be interpreted in a manner, that, in the case of
participants who are or may be Insiders, satisfies the
applicable requirements of Rule 16b-3, so that such persons
will be entitled to the benefits of Rule 16b-3 or other
exemptive rules under Section 16 of the 1934 Act and will not
be subjected to avoidable liability thereunder. If any
provision of the Plan or of any Incentives would otherwise
frustrate or conflict with the intent expressed in this
Section 10.14, that provision to the extent possible shall be
interpreted and deemed amended so as to avoid such conflict.
To the extent of any remaining irreconcilable conflict with
such intent, the provision shall be deemed void as applicable
to Insiders.
10.15. Loans. In order to assist a participant to
satisfy his tax liabilities arising in connection with an
Incentive granted under the Plan, the Committee may
authorize, subject to the provisions of Regulation G of the
Board of Governors of the Federal Reserve System, at either
the time of the grant of the Incentive, at the time of the
acquisition of Common Stock pursuant to the Incentive, or at
the time of the lapse of restrictions on shares of restricted
stock granted under the Plan, the extension of a loan to the
participant by the Company. The terms of any loans,
including the interest rate, collateral and terms of
repayment, will be subject to the discretion of the
Committee. The maximum credit available hereunder shall be
equal to the maximum tax liability that may be incurred in
connection with the Incentive.
Adopted by the Compensation Committee: February 19, 1995.
Ratified by the Board of Directors: February 21, 1995.
Approved by the Shareholders: May 11, 1995.
Exhibit 5
June 6, 1995
Century Telephone Enterprises, Inc.
100 Century Park Drive
Monroe, Louisiana 71203
Gentlemen:
We have acted as counsel for Century Telephone Enterprises,
Inc. ("Century") in connection with Century's Registration
Statement on Forms S-8 (the "Registration Statement") with
respect to the proposed offering by Century of 2,000,000 shares
of Century's Common Stock, $1.00 par value (the "Shares"),
pursuant to the terms of Century's 1995 Incentive Compensation
Plan (the "Plan").
Based upon the foregoing, and upon our examination of such
legal and factual matters as we deem necessary in order to
furnish this opinion, it is our opinion that the Shares, when
issued according to the terms of the Plan, will be duly
authorized, legally issued, fully paid and non-assessable,
assuming the Shares are not issued for less than par value.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement.
Sincerely,
JONES, WALKER, WAECHTER,
POITEVENT, CARRERE & DENEGRE, L.L.P.
By: /s/ Margaret F. Murphy
Margaret F. Murphy
Exhibit 23.1
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors
Century Telephone Enterprises, Inc.
We consent to the use of our report dated February 6, 1995, on
the consolidated financial statements of Century Telephone
Enterprises, Inc. and Subsidiaries and the related financial
statement schedule as of December 31, 1994 and 1993, and for each
of the years in the three-year period ended December 31, 1994,
incorporated herein by reference. Our report refers to changes
in the accounting for income taxes and postretirement benefits
other than pensions in 1992.
KPMG PEAT MARWICK LLP
/s/ KPMG PEAT MARWICK LLP
Shreveport, Louisiana
June 6, 1995
