SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
(X) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Comdial Corporation
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
COMDIAL CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 27, 1995
TO THE STOCKHOLDERS OF
COMDIAL CORPORATION:
The Annual Meeting of Stockholders of Comdial Corporation, a Delaware
corporation (the "Company"), will be held on April 27, 1995, at 9:00 a.m.
Eastern Time, in the Ballroom at The Boar's Head Inn, Route 250 West,
Charlottesville, Virginia 22905, for the following purposes:
1. To elect to the Board of Directors two (2) directors to serve for
three-year terms expiring at the Annual Meeting of Stockholders to be held
in 1998, one (1) director to serve for the remainder of a three-year term
expiring at the Annual Meeting of Stockholders to be held in 1997, and one
(1) director to serve for the remainder of a three-year term expiring at
the Annual Meeting of Stockholders to be held in 1996;
2. To consider and vote upon a proposal to approve the Restated
Certificate of Incorporation of the Company as set forth in the
accompanying Proxy Statement;
3. To ratify the selection of the firm of Deloitte & Touche LLP as
the Company's independent auditors for the current year; and
4. To transact such other business as may properly come before the
meeting or any continuation or adjournment thereof.
Only stockholders of record at the close of business on March 14,
1995, will be entitled to receive notice of and to vote at the Annual
Meeting and any adjournment thereof. The transfer books will not be
closed.
PLEASE FILL IN, DATE, AND SIGN THE ENCLOSED PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED RETURN ENVELOPE, WHICH DOES NOT REQUIRE ANY
POSTAGE IF MAILED IN THE UNITED STATES. IF YOU RECEIVE MORE THAN ONE PROXY
BECAUSE YOU OWN SHARES REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH
PROXY SHOULD BE COMPLETED AND RETURNED.
By Order of the Board of Directors
April 4, 1995 Wayne R. Wilver, Secretary
<PAGE>
ANNUAL MEETING OF STOCKHOLDERS
OF
COMDIAL CORPORATION
APRIL 27, 1995
PROXY STATEMENT
GENERAL INFORMATION
The Annual Meeting of Stockholders of COMDIAL CORPORATION, a Delaware
corporation (the "Company"), will be held on April 27, 1995, at the time
and place and for the purposes set forth in the Notice of Annual Meeting
of Stockholders accompanying this Proxy Statement. The enclosed form of
proxy is solicited on behalf of the Board of Directors of the Company in
connection with such meeting and any continuation or adjournment thereof.
This Proxy Statement and the enclosed form of proxy are first being sent or
given to the stockholders on or about April 4, 1995. The executive offices
of the Company are located at 1180 Seminole Trail, Charlottesville,
Virginia 22901; and the mailing address for such offices is Post Office
Box 7266, Charlottesville, Virginia 22906-7266.
At the Annual Meeting, the stockholders of the Company will be asked
to consider and vote upon the election of four nominees for director
("Proposal No. 1"). The stockholders will also be asked to consider and
vote upon a proposal ("Proposal No. 2") to approve a restatement of the
Company's Certificate of Incorporation which includes certain amendments.
The amendments are discussed in detail in this Proxy Statement and a copy
of the proposed Restated Certificate of Incorporation is annexed to this
Proxy Statement as Annex I. In addition, the stockholders of the Company
will be asked to ratify the Company's selection of the firm of Deloitte &
Touche LLP ("D&T") as the Company's independent auditors for the current
year ("Proposal No. 3").
If a proxy in the enclosed form is duly executed and returned, the
shares of the Company's Common Stock, par value $0.01 per share (the
"Common Stock"), represented thereby will be voted, where specification is
made by the stockholder on the form of proxy, in accordance with such
specification. If no directions to the contrary are indicated, the persons
named in the enclosed proxy will vote the shares represented thereby "FOR"
the election of each of the named nominees for director and "FOR" each of
the other proposals listed on the proxy card. If necessary, and unless the
shares represented by the proxy are voted against the proposals herein, the
persons named in the enclosed proxy may also vote in favor of a proposal to
recess the Annual Meeting and to reconvene it on a subsequent date or dates
without further notice, in order to solicit and obtain sufficient votes to
approve the matters being considered at the Annual Meeting. Any
stockholder may revoke his proxy by delivery of a new later dated proxy or
by providing written notice of revocation to the Secretary of the Company
at any time before it is voted. A proxy will not be voted if the
stockholder attends the meeting and elects to vote in person.
Only stockholders of record at the close of business on March 14, 1995
have the right to receive notice of and to vote at the Annual Meeting and
any adjournment thereof. As of that date, [21,054,842] shares of Common
Stock and 750,000 shares of the Company's Series A 7-1/2% Cumulative
Convertible Redeemable Preferred Stock, par value $10.00 per share (the
"Series A Preferred Stock") were outstanding. Each holder of record of
Common Stock is entitled to one vote for each share held on all matters
voted upon. As discussed below, the holder of record of the Series A
Preferred Stock, PacifiCorp Credit, Inc., a Delaware corporation ("PCI")
will be entitled to vote separately as a class on Proposal No. 2, but will
not be entitled to vote on any of the other proposals presented at the
Annual Meeting.
Presence in person or by proxy of the holders of [10,527,421] shares
of Common Stock will constitute a quorum at the Annual Meeting for purposes
of Proposal No. 1 and Proposal No. 3. In addition to this quorum
requirement, presence in person or by proxy of the holders of at least
375,001 shares of Series A Preferred Stock will be required to constitute a
quorum for purposes of Proposal No. 2. Assuming the applicable quorum is
present, the affirmative vote of a plurality of the shares of Common Stock
represented at the Annual Meeting and entitled to vote will be required to
act upon the election of a nominee for director, the affirmative vote of at
least sixty percent (60%) of the outstanding shares of Common Stock
entitled to vote and at least sixty-seven percent (67%) of the outstanding
shares of Series A Preferred Stock will be required to approve Proposal No.
2, and the affirmative vote by the holders of a majority of the shares of
Common Stock represented at the Annual Meeting and entitled to vote will be
required to act on all other matters to come before the Annual Meeting,
including Proposal No. 3.
With regard to Proposal No. 1, stockholders may vote in favor of all
nominees, withhold their votes as to all nominees or withhold their votes
as to specific nominees. With respect to the other proposals, stockholders
may vote in favor of or against such proposal or ratification, or they may
abstain from voting. In accordance with applicable law, the treatment and
effect of abstentions and broker non-votes are as follows. If a
stockholder registers an abstention vote by checking the "ABSTAIN" box on
the proxy card, no favorable vote is cast and therefore the abstention vote
has the effect of a vote against the proposal. Thus, an abstention from
voting on a matter has the same legal effect as a vote against the matter,
even though the stockholder may interpret such action differently. If a
broker or other nominee holding shares of Common Stock for beneficial
owners has voted on one or more matters pursuant to discretionary authority
or instructions from beneficial owners, but does not vote on other matters
because the broker or nominee has not received instructions from beneficial
owners and does not have the right to exercise discretionary voting power,
such broker non-votes have no effect on the vote with respect to such other
matters. That is, broker non-votes are not counted as votes for the
proposal or as votes against the proposal and, in the case of Proposal No.
1 and Proposal No. 3, are not counted in determining the number of votes
needed in order for a proposal to be approved.
The enclosed form of proxy confers discretionary authority to vote
with respect to any and all of the following matters that may come before
the Annual Meeting: (a) matters which may be presented at the Annual
Meeting at the request of public stockholders and with respect to which the
Company has not received notice at the date hereof; (b) approval of the
minutes of a prior meeting of stockholders, if such approval does not
amount to ratification of the action taken at the meeting; (c) the election
of any person to any office for which a bona fide nominee is unable to
serve or for good cause will not serve; (d) any proposal omitted from the
Proxy Statement and the form of proxy pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, as amended; and (e) matters incident to
the conduct of the Annual Meeting. The Board of Directors currently is not
aware of any matters (other than procedural matters) which will be brought
before the Annual Meeting and which are not referred to in the enclosed
Notice of Annual Meeting. If any such matters are properly brought before
the Annual Meeting, the persons named in the enclosed form of proxy will
vote in accordance with their best judgment.
The costs of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, certain directors, officers, and
employees of the Company may solicit proxies in person or by telephone,
telegraph, or mail. Further, the Company will also request record holders
of Common Stock who are brokerage firms, custodians, and fiduciaries to
forward proxy material to the beneficial owners of such shares and upon
request will reimburse such record holders for the costs of forwarding the
material in accordance with customary charges.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of February 6, 1995, as
to shares of Common Stock owned by (i) each person who is known by the
Company to own beneficially more than five percent of the Company's Common
Stock, and (ii) each director and nominee for director of the Company (iii)
each executive officer of the Company, and (iv) all directors and officers
as a group, together with their respective percentages.
AMOUNT AND NATURE % OF CLASS
NAME OF PERSON OR OF BENEFICIAL (IF MORE
NUMBER OF PERSONS IN GROUP OWNERSHIP(1) THAN 1%)(2)
PacifiCorp Credit, Inc.
825 N. E. Multnomah Street
Suite 775
Portland, Oregon 97232-2152 11,292,308 (3), (4) 47.8%
ALLTEL Corporation
One Allied Drive
Little Rock, Arkansas 72202 1,266,667 (3) 6.0%
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, Suite 650
Santa Monica, California 90401 1,101,700 (3), (5) 5.2%
A. M. Gleason . . . . . . . 11,366,808 (6), (12) 48.1%
Michael C. Henderson . . . . 11,292,308 (7) 47.8%
William E. Porter . . . . . 20,000 (8), (12) *
John W. Rosenblum . . . . . 40,000 (9), (12) *
Dianne C. Walker . . . . . . . 50,100 (10), (12) *
William G. Mustain . . . . . 135,883 (11) *
Wayne R. Wilver . . . . . . . 73,333 (13) *
Stephen C. Ayers . . . . . . 39,666 (14) *
Keith J. Johnstone . . . . . 20,536 (15) *
Lawrence K. Tate . . . . . . 62,750 (16) *
Ove Villadsen . . . . . . . 29,036 (15) *
All directors and officers
as a group (10 persons) . 11,838,112 (17) 49.6%
________________
* Less than one percent of the issued and outstanding shares of Common Stock.
(1) The amount and percentage of securities beneficially owned by an
individual are determined in accordance with the definition of
beneficial ownership set forth in the regulations of the Securities
and Exchange Commission and, accordingly, may include securities owned
by or for, among others, the spouse and/or minor children of the
individual and any other relative who has the same home as such
individual, as well as other securities as to which the individual has
or shares voting or investment power or has the right to acquire
within 60 days after February 6, 1995. Beneficial ownership may be
disclaimed as to certain of the securities. Unless otherwise
indicated, the persons and entities named have sole voting and
dispositive power over their shares.
(2) Individual percentages have been rounded. Shares subject to
outstanding stock options or warrants which the individual has the
right to acquire within 60 days after February 6, 1995, are deemed to
be outstanding for the purpose of computing the percentage of
outstanding securities of the class owned by such individual, or any
group including such individual, but are not deemed outstanding for
the purpose of computing the percentage of the class owned by any
other individual.
(3) Based on information filed with the Securities and Exchange Commission
by the reporting person.
(4) Includes 2,570,799 shares issuable upon the conversion of 750,000
shares of Series A 7-1/2% Cumulative Convertible Redeemable Preferred
Stock of the Company ("Series A Preferred Stock") held by PacifiCorp
Credit, Inc. ("PCI"). A. M. Gleason, an incumbent director, is Vice
Chairman and a director of PacifiCorp, an affiliate of PCI, and
Michael C. Henderson, a nominee for director, is a Vice President of
PacifiCorp Financial Services, Inc., also an affiliate of PCI. Mr.
Gleason and Mr. Henderson each disclaim beneficial ownership of the
shares of Common Stock and Series A Preferred Stock owned by PCI.
(5) Dimensional Fund Advisors, Inc. ("DFA") is an investment advisor
registered under the Investment Advisors Act of 1940, as amended. The
shares reported in the table are held in portfolios of DFA Investment
Dimensions Group, Inc., a registered open-end investment company, or
in series of the DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and the DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all of which
DFA serves as investment manager. DFA disclaims beneficial ownership
of all such shares. No individual client of DFA is known to the
Company to be the holder of more than five percent of the Company's
Common Stock.
(6) Includes 11,292,308 shares beneficially owned by PCI (see note 4).
Mr. Gleason currently serves as PCI's nominee on the Board of
Directors of the Company. In May 1995, Mr. Gleason is expected to
retire as Vice Chairman and a director of PacifiCorp. PCI has named
Mr. Henderson (see note 7) to replace Mr. Gleason as PCI's nominee on
the Board of Directors, effective as of the Annual Meeting. Although
Mr. Gleason will no longer be PCI's nominee, he has agreed to remain a
member of the Board. His current term expires in 1997.
(7) Mr. Henderson is not presently a director of the Company. Pursuant to
an agreement between PCI and the Company dated October 31, 1991, so
long as PCI or any of its affiliates owns at least 10% of the
Company's outstanding Common Stock, the Company will nominate and use
its best efforts to cause a nominee of PCI to become a member of the
Board of Directors of the Company. Mr. Gleason currently serves as
PCI's nominee (see note 6). Effective as of the Annual Meeting, Mr.
Henderson will be PCI's nominee.
(8) Includes 10,000 shares issuable upon the exercise of stock options.
(9) Includes 10,000 shares issuable upon the exercise of stock options.
(10) Includes 20,000 shares issuable upon the exercise of stock options.
(11) Includes 73,333 shares issuable upon the exercise of stock options.
(12) Includes 10,000 shares issuable in February 1995 under the terms of
the Company's 1992 Non-Employee Directors Stock Incentive Plan as a
result of net income reported by the Company for the fiscal year ended
December 31, 1994.
(13) Includes 33,333 shares issuable upon the exercise of stock options.
(14) Includes 16,666 shares issuable upon the exercise of stock options.
(15) All of the shares issuable upon the exercise of stock options.
(16) Includes 21,874 shares issuable upon the exercise of stock options.
(17) Includes 234,778 shares issuable upon the exercise of stock options
and 11,292,308 shares beneficially owned by PCI (see note 4).
The shares of Series A Preferred Stock held by PCI are non-voting,
except as follows. In addition to any other vote required by law, the
affirmative vote of the holders of a majority of the outstanding shares of
Series A Preferred Stock is required to effect the dissolution of the
Company, the sale, lease, exchange of all or substantially all of its
property and assets, the merger or consolidation of the Company with or
into any other entity, or the voluntary bankruptcy of the Company. In
addition to the foregoing, and in addition to any other vote required by
law, the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series A Preferred Stock is required to (i) create
any class or series of stock ranking prior to or in parity with the Series
A Preferred Stock as to dividends or upon liquidation or (ii) alter or
change any of the preferences, privileges, rights, or powers of the holders
of the Series A Preferred Stock so as to adversely affect such preferences,
privileges, rights, or powers. In addition, the holders of Series A
Preferred Stock have the right to elect two members of the Board of
Directors or such greater number as is necessary to equal at least 40% of
the Board, if the Company does not pay four consecutive quarterly dividends
required by the terms of the Series A Preferred Stock.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL
Nominees For Director
The Board of Directors is currently comprised of five members, divided
into three classes. One class of directors is elected each year to hold
office for a three-year term and until successors of such directors are
chosen and have qualified. The two directors whose three-year terms are
expiring in 1995 are William G. Mustain and John W. Rosenblum. Messrs.
Mustain and Rosenblum each has been nominated for re-election as a director
at the Annual Meeting.
At its regular meeting held on July 19, 1994, the Board of Directors
increased the number of directors from four to five, thereby creating a new
directorship in the class of directors whose terms expire in 1997, and
chose William E. Porter to fill the newly created directorship. In
accordance with ARTICLE SEVENTH, Paragraph (e) of the Company's Certificate
of Incorporation, a director chosen by the Board to fill a vacancy or to
fill a newly created directorship must stand for election at the next
annual election of directors. Accordingly, Mr. Porter has been nominated
for election as a director at the Annual Meeting. If elected, Mr. Porter
will serve the remainder of a three-year term expiring at the Annual
Meeting in 1997.
In May 1995, A. M. Gleason is expected to retire as Vice Chairman and
a director of PacifiCorp, PCI's parent company. Pursuant to an agreement
between PCI and the Company dated October 31, 1991, so long as PCI or any
of its affiliates owns at least 10% of the Company's outstanding Common
Stock, the Company must nominate and use its best efforts to cause a
nominee of PCI to become a member of the Board of Directors of the Company.
Mr. Gleason currently serves on the Board of Directors as PCI's nominee
(see note 6 to the table appearing under "Securities Ownership of Certain
Beneficial Owners and Management" above).
Pursuant to the agreement, PCI has named Michael C. Henderson to
replace Mr. Gleason as PCI's nominee, effective as of the Annual Meeting.
Although Mr. Gleason will no longer be PCI's nominee, he has agreed to
remain a member of the Board. His current term expires in 1997.
In connection with the foregoing, at its regular meeting held on
February 16, 1995, the Board of Directors increased the number of directors
from five to six, thereby creating a new directorship in the class of
directors whose terms expire in 1996. To fill this vacancy, Mr. Henderson
has been nominated for election as a director at the Annual Meeting. If
elected, Mr. Henderson will serve the remainder of a three-year term
expiring at the Annual Meeting in 1996.
The remaining two directors will continue to serve as set forth below.
In the absence of instructions to the contrary, the proxy holders will vote
the proxies received by them for the election of Messrs. Mustain,
Rosenblum, Henderson, and Porter. Discretionary authority is reserved to
cast votes for the election of a substitute should any of the nominees be
unable or unwilling to serve as a director. Each of the nominees has
agreed to serve as a director if elected, however, and the Company believes
that each of them will be available to serve.
The names and ages of the directors continuing in office and the
nominee, their principal occupations or employment during the past five
years, and other data regarding them is set forth below.
Nominees for Election to the Board of Directors
Terms Expiring in 1998:
WILLIAM G. MUSTAIN
Mr. Mustain, age 53, is President and Chief Executive Officer of the
Company. He joined the Company as Vice President in June 1987 and assumed
his current position in May 1989. Mr. Mustain was Vice President of
Operations (Engineering and Manufacturing) for Norand Corporation from 1983
to 1987. From 1964 to 1983, he held various engineering and manufacturing
positions with General Electric Company. He has served as a director of
the Company since 1989 and is a member of the Nominating Committee of the
Board of Directors.
JOHN W. ROSENBLUM
Mr. Rosenblum, age 51, is a Tayloe Murphy Professor of Business
Administration at the Darden Graduate School of Business Administration at
the University of Virginia. He is also a director of Chesapeake
Corporation, Cadmus Communications Corp., and T. Rowe Price Associates.
Mr. Rosenblum has served as a director of the Company since 1992 and is a
member of the Compensation Committee of the Board of Directors.
Nominee for Election to the Board of Directors
Term Expiring in 1997:
WILLIAM E. PORTER
Mr. Porter, age 49, is Vice President - Project Future of Trigon
Corporation (formerly Blue Cross Blue Shield of Virginia). Between 1992
and May 1994, Mr. Porter was a Vice President of the Integrated Systems
Division of Century Technologies Corporation, a systems integration
company. Between 1990 and 1992, Mr. Porter served as Deputy Chief of Staff
for the Governor of the Commonwealth of Virginia and as Deputy Secretary of
Commerce and Trade. He served as a director of the Metropolitan Washington
Airports Authority between 1992 and 1994 and as a director of Virginia's
Center for Innovative Technology in 1993. Mr. Porter has served as a
director of the Company since July, 1994 and is a member of the Audit,
Compensation, and Nominating Committees of the Board of Directors.
Nominee for Election to the Board of Directors
Term Expiring in 1996:
MICHAEL C. HENDERSON
Mr. Henderson, age 48, is President of PacifiCorp Financial Services, Inc.
("PFS"), a diversified financial services company owned by PacifiCorp. He
has also served as Chairman of Pacific Generation Company, a wholly-owned
subsidiary of PacifiCorp engaged in the development and operation of
independent power projects, and is currently responsible for its day-to-day
operations. Prior to April 1993, Mr. Henderson was Vice President -
Community and Energy Services of PacifiCorp. Between April 1991 and April
1992, Mr. Henderson served as Senior Vice President - Portfolio Management
of PFS and in that capacity held various management positions in companies
in which PFS held equity interests. Between 1986 and 1990, Mr. Henderson
was President and Chief Executive Officer of Crescent Foods, Inc., a
producer of spices, extracts and nutmeats. Prior to 1986, Mr. Henderson
was a certified public accountant with Deloitte & Touche, an independent
auditing firm, for seventeen years, where he was partner in charge of
consulting services in the Pacific Northwest. Mr. Henderson has not
previously served as a director of the Company.
Member of the Board of Directors Continuing in Office
Term Expiring in 1997:
A. M. GLEASON
Mr. Gleason, age 65, is Vice Chairman and a director of PacifiCorp, a
diversified public utility. Prior to January 1994, Mr. Gleason was
President and Chief Executive Officer of PacifiCorp. He is also a director
of Tektronix, Inc., Blount, Inc., and Fred Meyer, Inc. Mr. Gleason has
served as a director of the Company since 1981 and is a member of the
Compensation and Nominating Committees of the Board of Directors.
Member of the Board of Directors Continuing in Office
Term Expiring in 1996:
DIANNE C. WALKER
Ms. Walker, age 38, is an independent consultant. Prior to January 1995,
she was a consultant to Bear Stearns & Co. Inc., an investment banking
firm. Prior to August 1992, she was a consultant to (between April 1990
and July 1991, Vice President of) Kidder Peabody & Co., Inc., an investment
banking firm. Between 1988 and 1990, Ms. Walker was a consultant to
Pacific Telecom, Inc., a telecommunications company. She is also a
director of Satellite Technology Management, Inc., Catalina Marketing
Corporation, Arizona Public Service Company, and Microtest, Inc. Ms.
Walker has served as a director of the Company since 1986 and is a member
of the Audit Committee of the Board of Directors.
Board Meetings
The Board of Directors held four regularly scheduled meetings and two
special meetings in 1994. During 1994 all directors attended at least 75%
of the aggregate number of meetings of the Board of Directors and standing
Committees on which they served.
Committees
The Board of Directors has standing Audit, Compensation, and
Nominating Committees as well as certain other Committees.
The Audit Committee held two meetings in 1994. Its principal
functions are to recommend to the Board of Directors the firm of
independent auditors to serve the Company each fiscal year, to review the
plan and results of the audit by the independent auditors, and the scope,
results, and adequacy of the Company's systems of internal accounting
controls and procedures. In addition, the Audit Committee reviews the
independence of such auditors and reviews their fees for audit and non-
audit services rendered to the Company. During 1994, the members of the
Audit Committee included Messrs. Rosenblum (Chair) and Gleason and Ms.
Walker. Prior to April 1994, Max E. Bobbitt, a former director, also
served on and chaired this committee. Since July 1994, the Audit Committee
has consisted of Ms. Walker (Chair) and Mr. Porter.
The Compensation Committee held five meetings in 1994. Its principal
functions are to approve remuneration of the officers of the Company,
review certain benefit programs, and approve and administer remuneration
plans, including the stock incentive plans of the Company. The Report of
the Compensation Committee on executive compensation is set forth on page
14 of this Proxy Statement. During 1994, the members of the Compensation
Committee included Messrs. Gleason (Chair) and Rosenblum. Prior to July
1994, this committee also included Ms. Walker. In February 1995, the Board
added Mr. Porter as a member of this committee.
The Nominating Committee held three meetings in 1994. Prior to July
1994, the members of the Nominating Committee included Messrs. Gleason
(Chair) and Rosenblum and Ms. Walker. Prior to April 1994, Mr. Bobbitt
also served on this committee. Since July 1994, the Nominating Committee
has consisted of Messrs. Porter (Chair), Gleason, and Mustain. The
principal functions of the Nominating Committee are to review candidates
and recommend to the Board of Directors nominees for membership on the
Board of Directors. In fulfilling this responsibility, the Nominating
Committee will consider recommendations received from stockholders and
other qualified sources. Stockholder recommendations must be in writing
and addressed to the Chairman of the Nominating Committee, c/o Corporate
Secretary, Comdial Corporation, 1180 Seminole Trail, P. O. Box 7266,
Charlottesville, Virginia 22906-7266. If a stockholder intends to make a
nomination at any Annual Meeting, the Bylaws of the Company require that
the stockholder deliver a notice to the Company not less than 120 days in
advance of the anniversary date of the Company's Proxy Statement released
to its stockholders in connection with the previous year's annual meeting
of stockholders, setting forth (i) the name and address of the stockholder
who intends to make the nomination; (ii) the name, address, and principal
occupation of such proposed nominee; (iii) a representation that the
stockholder is entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons
specified in the notice; (iv) the consent of each proposed nominee to serve
as a director of the Company if so elected; and (v) the total number of
shares of capital stock of the Company that will be voted for each proposed
nominee and the number of shares of capital stock of the Company owned by
the notifying stockholder. The Chairman of the meeting, in his discretion,
may refuse to acknowledge the nomination or disregard the nomination of any
person not made in compliance with the foregoing procedure.
By requiring advance notice of stockholder nominations, the Bylaws
afford the Board of Directors the opportunity to consider the
qualifications of the proposed nominees and, to the extent deemed necessary
or desirable by the Board, to inform stockholders about such
qualifications. The Bylaws do not give the Board of Directors any power to
approve or disapprove of stockholder nominations for election of directors.
However, they may have the effect of precluding a contest for the election
of directors if their procedures are not followed, and therefore may
discourage or deter a stockholder from conducting a solicitation of proxies
to elect his or her own slate of directors.
A stockholder interested in nominating a person for election as a
director at the Annual Meeting of Stockholders to be held in 1996 should
notify the Company in the manner described above on or before December 6,
1995.
The Board has also designated as a standing committee a Pension
Committee and may establish other committees from time to time.
Compensation of Directors
Non-employee directors of the Company receive a monthly director's fee
of $1,000. In addition, the Board of Directors, with the approval of the
stockholders, adopted the 1992 Non-Employee Directors Stock Incentive Plan
(the "Directors Plan") in 1992. Under the Directors Plan, a director of
the Company who is not otherwise an employee of the Company or any of its
subsidiaries and has not been an employee for a period of at least one year
is eligible to receive automatic grants of options and awards of shares of
Common Stock. An aggregate of 600,000 shares of Common Stock is reserved
for issuance under the Directors Plan. The Directors Plan provides that
(i) each newly-elected director who is eligible to participate in the plan
on the date of his or her first election to the Board automatically receive
an option to purchase 10,000 shares of Common Stock, and (ii) for each
fiscal year in which the Company has net income, each then director receive
in the following year an automatic award of 10,000 shares of Common Stock.
Directors Gleason, Porter, Rosenblum, and Walker each received an automatic
award of 10,000 shares of Common Stock on February 23, 1995, as a result of
net income reported by the Company for the fiscal year ended December 31,
1994.
All stock options granted under the Directors Plan are non-statutory
options. The option exercise price is the fair market value of the shares
of Common Stock at the time the option is granted. All of the options are
immediately exercisable; provided, however, that they may be exercised only
while the holder is a director or within 36 months of the date he or she
ceases to be a director and in no event may any such option be exercised
more than ten years after the date of grant.
Mr. Mustain, the only employee of the Company who is a member of the
Board of Directors, receives no additional compensation for serving as a
director.
Executive Officers of the Company
The following table lists the executive officers of the Company. All
executive officers are appointed annually by and serve at the discretion of
the Board of Directors of the Company.
<TABLE>
POSITION BUSINESS EXPERIENCE
NAME AND AGE WITH THE COMPANY DURING PAST FIVE YEARS
<S> <C> <C>
William G. Mustain (53) President and Chief *
Executive Officer
Wayne R. Wilver (61) Senior Vice President, Mr. Wilver joined the Company
Chief Financial in July 1986 as Vice President,
Officer, Treasurer, and Chief Financial Officer,
Secretary Treasurer, and Secretary and
assumed his present position in
May 1989. Between 1983 and
1986, Mr. Wilver served as Vice
President-Finance and Business
Management and Treasurer to the
U.S. Committee for Energy
Awareness. Prior to 1983, he
held various management
positions with General Electric
Company, including Chief
Financial Executive of its
Mobile Communications Business
division.
Stephen C. Ayers (40) Vice President Mr. Ayers joined the Company in
November 1988 as Vice
President. Prior to that time,
he held various sales
management positions with
BellSouth Communications
Systems, Inc., a subsidiary of
BellSouth, Inc.
Keith J. Johnstone (48) Vice President Mr. Johnstone was elected Vice
President of the Company in May
1990. He has been employed in
various positions with Comdial
Business Communications Corpor-
ation or its predecessor since
1980, including Director of
Customer Service, Director of
Materials, Director of Manufac-
turing Systems, and Plant
Manager.
continued on next page
POSITION BUSINESS EXPERIENCE
NAME AND AGE WITH THE COMPANY DURING PAST FIVE YEARS
<S> <C> <C>
Lawrence K. Tate (52) Vice President Mr. Tate was elected Vice
President of the Company in
November 1982. Between 1969
and 1982, he held various
management positions, including
Vice President- Manufacturing
Operations, for Stromberg-
Carlson Telephone Systems,
Inc., which operated the Char-
lottesville manufacturing
facility before the Company
acquired the facility in
October 1982.
Ove Villadsen (54) Vice President Mr. Villadsen was elected Vice
President of Comdial Business
Communications Corporation, a
subsidiary of the Company, in
November 1982, and was elected
Vice President of the Company
in May 1989. He has been
employed in various management
positions with the Company or
its predecessor since 1980.
</TABLE>
______________
* See "Election of Directors - Nominees for Election to the Board
of Directors: Terms Expiring in 1998."
Family Relationships
There is no family relationship between any director, executive
officer, or person nominated or chosen by the Company to become a director or
executive officer.
Executive Compensation
The Securities and Exchange Commission has adopted regulations to make
disclosure of cash and equity-based executive compensation easier to
understand and more relevant to stockholders. The required information is
comprised of a five-year stock performance graph, a report from the
Company's Compensation Committee of the Board of Directors, a summary
compensation table, and additional tables which provide further details on
stock options and pension benefits.
Five Year Total Stockholder Return
The following performance table compares the cumulative total return,
assuming the reinvestment of dividends, for the period from December 31,
1989 through December 31, 1994, from an investment of $100 in (i) the
Company's Common Stock, (ii) the Nasdaq Market Index, and (iii) a peer
group index constructed by the Company (the "Peer Group Index").
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
COMDIAL CORPORATION COMMON STOCK, THE NASDAQ MARKET INDEX,
AND THE PEER GROUP INDEX
(PERFORMANCE GRAPH)
1989 1990 1991 1992 1993 1994
Comdial Corporation $100.00 $90.91 $63.34 $63.64 $472.73 $427.27
The Nasdaq Index $100.00 $81.12 $104.14 $105.16 $126.14 $132.44
Peer Group Index $100.00 $32.74 $30.14 $69.18 $196.15 $136.20
<PAGE>
The Nasdaq Market Index tracks the aggregate price performance of
equity securities of companies traded on the National Association of
Securities Dealers Automated Quotation - National Market System ("Nasdaq-
NMS"). The Company's Common Stock is traded on the Nasdaq-NMS.
Media General Financial Services supplied the necessary information to
construct the table, including the Peer Group Index. The Peer Group Index
consists of the following companies: ExecuTone Information Systems, Inc.,
Inter-Tel, Inc., and Mitel Corporation. The Company selected these three
companies as the peer group because their lines of business most closely
match the lines of business in which the Company is currently primarily
engaged. A fourth company, TIE Communications, Inc., was excluded from the
peer group because that company recently underwent a restructuring and, as
a result, current financial data is not available. Although AT&T and
Northern Telecom are also major competitors of the Company, these two
companies have been excluded from the peer group because they are much
larger than the Company and derive most of their revenues from other lines
of business. The returns of each peer group issuer have been weighted
according to the respective issuer's stock market capitalization at the
beginning of each period for which a return is indicated.
The performance of any individual company's common stock is influenced
not only by its own performance and future prospects, but also by a number
of external factors over which the company and its management have indirect
or no control, including general economic conditions, expectations for the
company's future performance, and conditions affecting or expected to
affect the company's industry. In addition, stock performance can be
affected by factors such as trading volume, analytical research coverage by
the investment community, and the propensity of stockholders to hold the
stock for investment purposes. The relative weight of these factors also
changes over time. Consequently, stock performance, including measurement
against indices, may not be representative of a company's financial
performance for given periods of time.
Report of the Compensation Committee of the Board of Directors
The Company's executive compensation package for its executive
officers consists of three elements: base salary, annual performance-based
bonus, and stock option grants.
Compensation Principles. The Committee believes that the executive
compensation package should provide incentives to achieve both current and
longer-term strategic management goals of the Company, with the ultimate
objective of enhancing stockholder value. The three elements of the
compensation plan are designed to achieve this objective. The base
salaries are set at the minimum necessary to attract and retain qualified
people with a significant portion of the cash compensation being in the
form of performance-based bonuses dependent upon meeting specified annual
goals. Stock option grants are intended to serve as an incentive to
achieve the overall longer-term objective.
Prior to 1985, the Company was primarily focused on the residential
telephone business. Since that time, the Company has redirected its
efforts to the small business telephone systems market. In this endeavor,
the Company was first profitable in 1990 and, with the exception of a
modest loss in 1991, the Company has been profitable each year thereafter.
The Company will continue its efforts to further improve financial
stability while striving to increase sales and improve profits with the
ultimate objective of enhancing stockholder value.
Salaries. In general, base salary levels are set at the minimum
levels believed by the Committee to be sufficient to attract and retain
qualified executives, when considered with the other components of the
executive compensation package. Annually, the Committee reviews the
compensation of the executive officers. In addition, the Committee
examines the report of an independent research company showing the
compensation paid by companies in the same or similar industries. The
Committee considers the remuneration analysis in conjunction with the
Company's overall performance as measured by achievement of the Company's
objectives and the development and succession of sound management practices
and skilled personnel.
The Company's primary objective, as noted above, has been the
reduction of expenses, the repayment of debt, and the development of new
products. In order to attract and retain qualified executive personnel,
base salary levels have reflected a necessary balance between (i) the
competitive level set by the industry and (ii) the relatively low
profitability the Company has achieved.
Effective as of February 27, 1995, the Committee set the annual salary
of Mr. Mustain (the Company's President and Chief Executive Officer) at
$215,000, representing a 16.2% increase over Mr. Mustain's previous salary,
which had been in effect without increase since 1992. The Committee
believes that Mr. Mustain is performing an extremely valuable function in
leading the Company in its successful efforts in its current markets and
its entry into the new areas of international and computer telephony.
Bonuses. Prior to 1993, the Committee at year-end considered granting
bonuses to officers based upon the profitability of the Company for the
year and an evaluation of the contributions of each officer.
Beginning in 1993, the Committee has established a more formal plan
for the awarding of bonuses to officers. The plan consists of two clearly
defined objectives: cash generation and profitability. The Committee
believes that these objectives are supportive of the Company's continued
focus on improved financial stability and debt reduction.
In line with this defined plan and the Company's performance in 1994,
the Committee awarded bonuses to each of the Company's six executive
officers, totaling 26% of the officers' aggregate base salaries. The
Committee awarded Mr. Mustain a bonus of $69,375 or 37.5% of his base
salary.
Stock Options. Stock options comprise one part of the executive
compensation package. This component is intended to encourage key
employees to remain in the employ of the Company by offering them an
opportunity for ownership in the Company, and to provide them with a long-
term interest in the Company's overall performance as reflected by the
performance in the market of the Company's Common Stock. The Committee has
established levels of stock option grants for various positions within the
Company. Each year, the Committee evaluates the performance of each
employee within the various positions eligible to receive stock options,
and in its discretion makes awards up to the established level on the basis
of performance by each person to whom a grant is made, and such person's
contribution towards achieving the Company's overall objectives.
During 1994, 56 eligible employees were awarded stock options to
acquire a total of 266,000 shares of the Company's Common Stock. Three of
the Company's six executive officers were awarded stock options in 1994
totaling 40,000 shares.
Pension Plan. The Company has a pension plan covering hourly and
salaried employees, including the executive officers. The plan requires
Company contributions for tax-deferred pension accruals, with the amount of
contribution actuarially determined in order to fund for each participating
employee a benefit based on the two factors of career average compensation
and years of service. For highly compensated employees, such as the
executive officers, the amount of benefit under the pension plan is limited
in order to qualify under Federal tax laws. Following this report is a
more detailed discussion of each of the components of the executive
compensation package, including additional information regarding the
pension plan.
A. M. Gleason (Chair) John W. Rosenblum
<PAGE>
Summary Compensation Table
The following summary compensation table presents information about
the compensation paid by the Company during its three most recent fiscal
years to those individuals who were (i) the Company's Chief Executive
Officer (the "CEO") at the end of the last completed fiscal year,
regardless of compensation level, and (ii) the Company's four most highly
compensated executive officers other than the CEO who were serving as
executive officers at the end of the last completed fiscal year and whose
total annual salary and bonus for the last completed fiscal year exceeded
$100,000.
<TABLE>
Summary Compensation Table:
LONG-TERM
COMPEN-
ANNUAL COMPENSATION(1) SATION
ALL OTHER
NAME AND OPTIONS COMPEN-
PRINCIPAL SALARY(2) BONUS GRANTED SATION(3)
POSITION YEAR ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C>
William G. Mustain 1994 185,000 69,375 - 2,310
President and Chief 1993 185,000 84,000 - 2,249
Executive Officer 1992 181,343 25,000 200,000 2,182
Wayne R. Wilver 1994 124,231 18,750 20,000 2,174
Senior Vice President and 1993 120,000 22,000 - 2,235
Chief Financial Officer 1992 118,171 15,000 40,000 2,179
Stephen C. Ayers 1994 120,599 34,500 - 2,005
Vice President 1993 115,900 34,000 - 1,811
1992 108,118 10,000 25,000 -
Keith J. Johnstone 1994 98,461 22,500 - 1,723
Vice President 1993 90,000 21,000 - 1,719
1992 84,658 10,000 61,610 1,518
Ove Villadsen 1994 108,461 28,875 10,000 1,898
Vice President 1993 100,000 23,000 - 1,942
1992 96,345 15,000 77,110 1,696
</TABLE>
(1) While the five named individuals received perquisites or other personal
benefits in the years shown, in accordance with Securities and Exchange
Commission regulations, the value of these benefits are not indicated since
they did not exceed the lesser of $50,000 or 10% of the individual's salary
and bonus in any year.
(2) The salaries shown in the Summary Compensation Table for 1994 have
been in effect since February 14, 1994.
(3) Amounts set forth in the Summary Compensation Table under the heading
"All Other Compensation" represent the matching contributions made by
the Company to its 401(k) plan for the benefit of the named officer in
the year indicated.
Stock Options
The Company has adopted the Comdial Corporation 1992 Stock Incentive
Plan (the "Stock Incentive Plan"). The Stock Incentive Plan is intended to
further the long-term stability and financial success of the Company by
attracting and retaining key employees through the use of stock incentives,
including stock options. The Company does not award stock appreciation
rights under the Stock Incentive Plan. The Company has reserved a total of
2,400,000 shares of Common Stock for issuance pursuant to incentive awards
made under the Stock Incentive Plan.
The following table sets forth additional information concerning
individual grants of stock options made under the Stock Incentive Plan
during the last completed fiscal year to each of the named executive
officers:
<TABLE>
Option Grants In Last Fiscal Year POTENTIAL
REALIZED VALUE AT
ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(1)
% OF
TOTAL OPTIONS
GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE
GRANTED(2) IN FISCAL PRICE EXPIRATION 5% 10%
NAME (#) YEAR ($/SH) DATE ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Wayne R. Wilver 20,000 7.5% $3.53 2/01/04 $44,400 $112,518
Ove Villadsen 10,000 3.8% $3.53 2/01/04 $22,200 $ 56,259
</TABLE>
(1) The potential realized values in the table assume that the market
price of the Company's Common Stock appreciates in value from the date
of grant to the end of the option term at the annualized rates of five
percent and ten percent, respectively. The actual value, if any, an
executive may realize will depend on the excess, if any, of the stock
price over the exercise price on the date the option is exercised.
There is no assurance that the value realized by an executive will be
at or near the value estimated in the table.
(2) All options granted to the named officers were granted on February 1,
1994. One third of the options become exercisable on the first
anniversary of the grant date, another third become exercisable on the
second anniversary of the grant date, and the balance become
exercisable on the third anniversary of the grant date. All of these
options were granted with an exercise price equal to the market price
of the Company's Common Stock on the grant date.
The following table sets forth information concerning each exercise of
stock options during the 1994 fiscal year by each of the named executive
officers and the fiscal year-end value of unexercised options, provided on
an aggregated basis:
<TABLE>
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Unexercised Option Values
(A) (B) (C) (D) (E)
NUMBER OF VALUE OF UNDER LYING
SECURITIES UNEXERCISED
UNEXERCISED IN-THE-MONEY(2)
OPTIONS AT OPTIONS AT
FY-END (#) FY-END ($)
SHARES ACQUIRED VALUE(1) EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
William G. Mustain 85,000 $259,950 123,333 / 66,667 $289,233 / $160,667
Wayne R. Wilver - - 66,666 / 33,334 $154,265 / $32,135
Stephen C. Ayers - - 16,666 / 8,334 $40,165 / $20,085
Keith J. Johnstone 33,926 $112,188 20,536 / 20,538 $49,492 / $49,497
Ove Villadsen 37,917 $122,414 25,703 / 35,704 $61,944 / $61,947
</TABLE>
(1) The dollar values referred to in columns (C) and (E) are calculated by
determining the difference between the fair market value of the
securities underlying the options and the exercise price of the
options at exercise or fiscal year-end, respectively.
(2) Options are in-the-money if the fair market value of the underlying
securities exceeds the exercise price of the option.
Pension Plan
The Company has a pension plan covering both salaried and hourly
employees. Under the pension plan, actuarially computed contributions are
made annually by the Company and benefits are determined primarily by
average career compensation and years of service. The following pension
plan table shows estimated annual benefits payable upon retirement at age
65 in specified compensation and years of service classifications:
Pension Plan Table:
ESTIMATED ANNUAL BENEFITS PAYABLE BY THE
PLAN AT RETIREMENT WITH YEARS OF SERVICE INDICATED
REMUNERATION
15 20 25 30 35
($) ($) ($) ($) ($) ($)
100,000 27,184 36,245 45,306 54,368 63,429
125,000 34,309 45,745 57,181 68,618 80,054
150,000 41,434 55,245 69,056 82,868 96,679
175,000 41,434 55,245 69,056 82,868 96,679
200,000 41,434 55,245 69,056 82,868 96,679
225,000 41,434 55,245 69,056 82,868 96,679
250,000 41,434 55,245 69,056 82,868 96,679
Effective as of January 1, 1994, the plan covers a participant's
compensation including bonuses and incentive pay for hourly employees and
excluding deferred or supplemental compensation or other forms of
compensation, if any, paid by the Company; provided, however, that the
amount of a participant's annual compensation taken into account under the
plan for any year may be subject to certain limitations under the plan or
in accordance with applicable law. As to Messrs. Mustain, Wilver, Ayers,
Johnstone, and Villadsen, the amounts set forth in the Summary Compensation
Table under the heading "Salary" are covered by the plan. As of December
31, 1994, Messrs. Mustain, Wilver, Ayers, Johnstone, and Villadsen have
seven, eight, six, twelve, and twelve years of credited service,
respectively.
There are several different forms of benefit options available under
the Company's pension plan, including Straight Life Annuity, 5 Years
Certain & Life Annuity, 10 Years Certain & Life Annuity, Level Income Life
Annuity (age 62 and 65), Contingent Annuitant Option and Joint and Survivor
Option. The Level Income Life Annuity balances retirement income from the
pension plan and social security benefits so that income remains more or
less constant regardless of when social security benefits begin.
Indebtedness of Management
Prior to 1985, the Company made loans to certain executive officers of
the Company to assist such officers in the exercise of Company stock
options and/or the payment of personal income taxes resulting from such
exercise. The following table shows, as to each officer whose indebtedness
exceeded $60,000, the largest aggregate amount of such indebtedness during
fiscal year 1994 and the balance due the Company as of February 6, 1995.
Each such loan is evidenced by a non-interest bearing promissory note
secured by a pledge of the officer's shares of Company Common Stock and an
assignment of the death benefit under his Company group life insurance
policy. All of the loans described herein are accelerated and become
immediately due and payable on termination of employment.
Indebtedness of Management
LARGEST AGGREGATE
AMOUNT OUTSTANDING DURING AMOUNT OUTSTANDING
NAME AND PRINCIPAL FISCAL YEAR 1994 AS OF FEBRUARY 6, 1995
POSITION ($) ($)
Lawrence K. Tate
Vice President $176,064 $172,713
Certain Relationships and Related Transactions
Loans From PacifiCorp Affiliates. Prior to November 1991, the Company
was indebted under a financing agreement with a group of banks, comprised
of Manufacturers Hanover Trust Company, First Interstate Bank of
California, and Barclays Bank International Ltd. (the "Bank Group").
Effective November 1, 1991, the Company's remaining indebtedness to the
Bank Group was assigned to PacifiCorp Holdings, Inc., then known as Inner
PacifiCorp, Inc. ("PHI"). The Company and PHI entered into a loan
restructuring agreement (the "Loan Restructuring Agreement") pursuant to
which the Company's indebtedness to PHI was consolidated and restructured.
Under the terms of the Loan Restructuring Agreement, PHI made various loans
to the Company. The loans accrued interest at two and one-half percent
(after October 31, 1993, three and one-half percent) above the prime rate
of interest established from time to time by Morgan Guaranty Trust Company.
As security for the loans, the Company granted PHI a security interest in
substantially all of its accounts receivable, inventories, property, plant
and equipment, and other assets.
In connection with the loans, the Company agreed to certain financial
and other covenants, including (i) maintenance of specified levels of
consolidated net worth, working capital, and cash flow and (ii)
restrictions on borrowing and dividend payments. The Company also agreed
that, for so long as (i) PHI or any of its affiliates owns at least ten
percent of the issued and outstanding shares of the Company's Common Stock
or (ii) any principal or interest owed to PHI under the Loan Restructuring
Agreement remained unpaid, the Company would nominate and use its best
efforts to cause one nominee of PHI, as may be reasonably acceptable to the
Company, to become a member of the Board of Directors.
On December 1, 1993, the Company's indebtedness held by PHI was
transferred to its wholly-owned subsidiary, PacifiCorp Financial Services,
Inc., which in turn transferred the indebtedness to its wholly-owned
subsidiary, PCI.
On December 23, 1993, the Company and PCI entered into an agreement
(the "Equity Agreement") pursuant to which, among other things, PCI agreed
to accept 850,000 shares of Series A Preferred Stock in exchange for the
cancellation of $8.5 million of the Company's existing indebtedness to PCI.
The exchange was conditioned upon, among other things, payment in full by
the Company of the balance of the indebtedness held by PCI.
At a special meeting held on February 1, 1994, the stockholders of the
Company approved the exchange and amendments to the Company's Certificate
of Incorporation permitting the issuance of the Series A Preferred Stock.
Immediately following the meeting, the Company and Shawmut Capital
Corporation, then known as Barclays Business Credit, Inc. ("Shawmut
Capital") entered into a loan and security agreement pursuant to which
Shawmut Capital agreed to make a $6.0 million term loan and provide the
Company with a $9.0 million revolving credit loan facility. The Company
then issued 850,000 shares of Series A Preferred Stock to PCI in exchange
for the cancellation of $8.5 million of the Company's indebtedness to PCI
(then totaling $21.2 million) and paid the balance of such indebtedness to
PCI using cash generated from operations and loan proceeds from Shawmut
Capital.
Each share of Series A Preferred Stock is convertible at the option of
PCI into 3.427733 fully paid and nonassessable shares of Common Stock. The
conversion ratio is subject to anti-dilution protection upon the occurrence
of certain events, including (i) stock dividends or other distributions of
the Common Stock, (ii) stock splits affecting the Common Stock, reverse
stock splits, share exchanges, or reclassifications, (iii) certain
issuances of Common Stock (or rights, warrants, or securities convertible
or exchangeable into Common Stock) at a price per share (or having a
conversion or exercise price per share) less than the market price, or (iv)
a merger, consolidation, or other reorganization of the Company.
In accordance with the Equity Agreement, in December 1994, the Company
redeemed 100,000 shares of the Series A Preferred Stock held by PCI for $1
million in cash (an amount equal to the aggregate par value of such
shares).
PCI Piggyback Registration Rights. PCI has piggyback registration
rights with respect to the Common Stock which it currently owns and with
respect to shares of Common Stock issuable upon conversion of the Series A
Preferred Stock. As a result, if the Company were to make a public
offering of its Common Stock, PCI would have the right to include its
shares in such offering, provided that the quantity of PCI shares so
included would not, in the opinion of the underwriters, adversely affect
the proposed offering by the Company.
In December 1993, PCI exercised its piggyback rights to register
2,000,000 shares of Common Stock in conjunction with the demand
registration of 500,000 shares of Common Stock issued to the Bank Group
upon their exercise of certain warrants in November 1993. In July 1994,
the Company's registration statement on Form S-3 registering these shares
was made effective by the Securities and Exchange Commission.
PCI Right of First Refusal. The Company has granted PCI a right of
first refusal to purchase its pro rata share of any new securities which
the Company may, from time to time, propose to sell and issue.
Sales to ALLTEL Corporation and Pacific Telecom, Inc. During its most
recent fiscal year, the Company had sales to ALLTEL Supply, Inc., a
subsidiary of ALLTEL Corporation, and Pacific Telecom, Inc., an affiliate
of PCI, totaling $12,400,000 and $45,000 respectively. The sales
transactions occurred at substantially the same prices and terms as those
with other distributors with whom the Company does business.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers, and persons who own more than ten
percent of the Company's Common Stock, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of the Company's Common Stock and to provide copies of the
reports to the Company. To the Company's knowledge, based solely on a
review of the copies of such reports furnished to the Company and written
representations that no other reports were required to be filed, during the
fiscal year ended December 31, 1994, the Company's directors, executive
officers, and stockholders beneficially owning more than ten percent of the
Company's Common Stock complied with their respective Section 16(a)
reporting requirements.
PROPOSAL NO. 2
APPROVAL OF RESTATED CERTIFICATE OF INCORPORATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL
The Board of Directors has declared advisable, and has submitted to
the stockholders for approval, a restated Certificate of Incorporation (the
"Restated Certificate of Incorporation") of the Company, in the form
attached hereto as Annex I. The purpose of the Restated Certificate of
Incorporation is to restate and integrate the Company's Certificate of
Incorporation, as previously amended, and further to (i) amend ARTICLE
SEVENTH to eliminate a provision specifying which class or classes of
directors must have an uneven number of directors when the total number of
directors is not evenly divisible by three and to clarify certain other
provisions of ARTICLE SEVENTH governing the number and election of
directors; (ii) amend ARTICLE NINTH to clarify the stockholder vote
required to amend or repeal the provisions set forth in ARTICLES SIXTH,
SEVENTH, EIGHTH or NINTH; and (iii) make certain clarifying and corrective
changes not inconsistent with the Company's Certificate of Incorporation
(the amendments described in clauses (i) through (iii) above are
hereinafter sometimes referred to collectively as the "Amendments").
ARTICLE SEVENTH contains various provisions governing the number,
classes and terms of directors. Paragraph (b) of ARTICLE SEVENTH, which
establishes three classes of directors having staggered terms, currently
provides that if the authorized number of directors is not evenly divisible
by three, then the extra director or directors must be assigned to a
particular class or classes. The requirement that an extra director be
assigned to a particular class is not required by Delaware law and prevents
certain flexibility the Company would otherwise have in assigning directors
to classes where there are multiple vacancies to be filled. The Amendments
would eliminate this requirement, leaving only the requirement that the
three classes of directors be as nearly equal in number as possible.
Currently, pursuant to Paragraphs (d) and (e) of ARTICLE SEVENTH, a
director chosen by the Board to fill a vacancy or newly created
directorship must stand for election at the next annual election of
directors, even though the term of the class to which the director was
assigned has not expired. This requirement is inconsistent with Delaware
law, which provides that, in the case of a corporation the directors of
which are divided into classes, a director chosen by the Board to fill a
vacancy or newly created directorship will hold office until the next
election of the class for which such director was chosen. The Amendments
would eliminate the requirement, so that a director chosen by the Board to
fill a vacancy or a newly created directorship would hold office until the
next election of the class for which the director was chosen, in accordance
with Delaware law.
ARTICLE NINTH now provides that ARTICLES SIXTH, SEVENTH, EIGHTH, and
NINTH of the Company's Certificate of Incorporation may not be amended or
repealed in any respect unless approved "by the affirmative vote of the
holders of not less than 60% of the total voting power of all outstanding
voting stock" of the Company. In February 1994, the Certificate of
Incorporation was amended to authorize the issuance of shares of preferred
stock in one or more series and, pursuant to this authority, the Company
issued shares of its newly designated Series A Preferred Stock to PCI. The
shares of Series A Preferred Stock have limited voting rights, as described
in the section of this Proxy Statement entitled "Stock Ownership of Certain
Beneficial Owners and Management." Other series of preferred stock may be
authorized by the Board ("Other Preferred Stock") having such voting rights
as are provided in the resolution creating such preferred stock or as
otherwise required by applicable law. Due to the issuance of shares of
Series A Preferred Stock to PCI and the possibility that Other Preferred
Stock may be issued in the future, the reference in ARTICLE NINTH to "all
outstanding voting stock" is ambiguous and may be read to include not only
Common Stock, but Series A Preferred Stock or Other Preferred Stock.
To eliminate this ambiguity, the Amendments would amend ARTICLE NINTH
to require only the affirmative vote of the holders of not less than 60% of
the outstanding shares of Common Stock to amend or repeal ARTICLES SIXTH,
SEVENTH, EIGHTH, or NINTH of the Company's Certificate of Incorporation.
As a result of this Amendment, shares of Series A Preferred Stock or Other
Preferred Stock issued in the future would not vote with the holders of
Common Stock for the purpose of this special voting requirement. Thus, the
effect of this Amendment would be to reestablish the supermajority voting
rights of the holders of Common Stock as they existed prior to the issuance
of the Series A Preferred Stock.
In addition to the foregoing, the Amended and Restated Certificate of
Incorporation contains certain clarifying and corrective changes to the
Certificate of Incorporation not inconsistent with the Certificate of
Incorporation.
The Board of Directors believes that all of the foregoing amendments
to the Company's Certificate of Incorporation are in the best interests of
the Company.
PROPOSAL NO. 3
RATIFICATION OF THE SELECTION OF AUDITORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL
The Board of Directors, upon the recommendation of its Audit
Committee, has selected the firm of D&T, certified public accountants and
independent auditors, to serve the Company in those capacities for the year
ending December 31, 1995 and recommends ratification of such selection by
the stockholders. D&T has served as independent auditors for the Company
since 1985. In addition to auditing the consolidated financial statements
of the Company for the year ended December 31, 1994, D&T provided an audit
of the Company's pension and 401(k) plans. Its representatives will be
present at the Annual Meeting and will have the opportunity to make a
statement if they desire to do so and to respond to appropriate questions
asked by stockholders.
In the event the proposal to ratify the selection of D&T is defeated,
the adverse vote will be considered as a direction to the Board of
Directors to select other independent auditors for the next year. However,
because of the expense and difficulty in changing independent auditors
after the beginning of a year, the Board of Directors intends to allow the
appointment for 1995 to stand unless the Board of Directors finds other
reasons for making a change.
The Board of Directors considers D&T to be well qualified to serve as
the independent auditors for the Company.
The Board of Directors recommends a vote "FOR" the proposal to ratify
the selection of D&T as independent auditors for 1995. Proxies solicited
by the Board of Directors will be so voted unless stockholders otherwise
specify in their proxies.
OTHER MATTERS
Management is not aware of other matters which will come before the
meeting, but if any such matters are properly presented, proxies solicited
hereby will be voted in accordance with the best judgment of the persons
holding the proxies. All shares represented by duly executed proxies will
be voted at the meeting.
STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Any stockholder proposals to be considered by the Company for
inclusion in the proxy materials for the 1996 Annual Meeting of
Stockholders must be received by the Company no later than December 6,
1995.
For the Board of Directors
Wayne R. Wilver, Secretary
Charlottesville, Virginia
April 4, 1995
THE COMPANY WILL MAIL WITHOUT CHARGE UPON WRITTEN REQUEST A COPY OF THE
1994 ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS,
SCHEDULES AND A LIST OF EXHIBITS. REQUESTS SHOULD BE SENT TO SECRETARY,
COMDIAL CORPORATION, 1180 SEMINOLE TRAIL, P. O. BOX 7266, CHARLOTTESVILLE,
VIRGINIA, 22906-7266.
<PAGE>
*******************************APPENDIX************************************
[FRONT OF PROXY CARD]
COMDIAL CORPORATION
Proxy for Annual Meeting of Stockholders
April 27, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF COMDIAL
CORPORATION
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated April 4, 1995, and appoints
William G. Mustain and Wayne R. Wilver, or either of them, as proxies, each
with the power to appoint his or her substitute and to act alone, and
authorizes them, or either of them, to represent and to vote, as designated
on the reverse side of this card, all shares of Common Stock of Comdial
Corporation held of record by the undersigned on March 15, 1995, at the
Annual Meeting of Stockholders to be held on April 27, 1995, and at any
adjournment thereof.
The Board of Directors Recommends a Vote FOR Proposals 1, 2, and 3
appearing on the Reverse Side Hereof
<PAGE>
[REVERSE SIDE OF PROXY CARD]
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no directions to the contrary
are indicated, this proxy will be voted FOR Proposal 1, FOR Proposal 2, and
FOR Proposal 3.
___________________________ ________________
ACCOUNT NUMBER COMMON
1. ELECTION OF DIRECTORS: William G. Mustain, John W. Rosenblum,
William E. Porter, Michael C. Henderson
FOR the nominees listed above ( ) WITHHOLD AUTHORITY ( )
to vote for all nominees listed above
(Instruction: To withhold authority to vote for any individual nominee, draw a
line through that individual's name above)
2. APPROVAL OF RESTATED CERTIFICATE OF INCORPORATION:
FOR ( ) AGAINST ( ) ABSTAIN ( )
3. RATIFICATION OF SELECTION OF DELOITTE & TOUCHE LLP as the Company's
independent auditors for the current year:
FOR ( ) AGAINST ( ) ABSTAIN ( )
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
PLEASE MARK YOUR CHOICE
LIKE THIS ( ) IN BLUE OR BLACK INK.
Date , 1995
Signature
Signature, if held jointly
Please sign exactly as name appears
hereon. When shares are held by
joint tenants, both should sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If
a corporation, please sign in full
corporate name by President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
Annex I
Restated Certificate of Incorporation
of
Comdial Corporation
Comdial Corporation, a corporation organized and existing under the laws
of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is Comdial Corporation. Comdial
Corporation was originally incorporated under the same name, and the original
Certificate of Incorporation was filed with the Secretary of State of the
State of Delaware on April 6, 1982.
2. Pursuant to, and in accordance with, Sections 242 and 245 of the
General Corporation Law of the State of Delaware, this Restated Certificate
of Incorporation restates and integrates the certificates and other
instruments comprising, and further amends the provisions of, the Certificate
of Incorporation of this corporation and was duly adopted by the board of
directors at a meeting held on February 16, 1995 and by vote of the
corporation's stock entitled to vote thereon at the corporation's annual
meeting of stockholders held on April 29, 1995.
3. The text of the Restated Certificate of Incorporation as heretofore
amended or supplemented is hereby restated and further amended to read in its
entirety as follows:
FIRST: The name of this corporation is:
Comdial Corporation
SECOND: The purpose of this corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
THIRD: The aggregate number of shares of capital stock which the
corporation has the authority to issue is Thirty Two Million (32,000,000),
which is divided into two classes as follows:
Two Million (2,000,000) shares of Preferred Stock (Preferred
Stock) with a par value of $10.00 per share, and
Thirty Million (30,000,000) shares of Common Stock (Common
Stock) with a par value of $0.01 per share.
The designations, voting powers, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions of the above classes of
stock are as follows:
I. Preferred Stock
(1) Issuance in Series.
Shares of Preferred Stock may be issued in one or more series at
such time or times, and for such consideration or considerations as the
board of directors may determine. All shares of any one series of
Preferred Stock will be identical with each other in all respects,
except that shares of one series issued at different times may differ as
to dates from which dividends thereon may be cumulative. All series
will rank equally and be identical in all respects, except as permitted
by the following provisions of paragraph 2 of this Division I.
(2) Authority of the Board with Respect to Series.
The board of directors is authorized, at any time and from time to
time, to provide for the issuance of the shares of Preferred Stock in
one or more series with such designations, preferences and relative,
participating, optional or other special rights and qualifications,
limitations or restrictions thereof as are stated and expressed in the
resolution or resolutions providing for the issue thereof adopted by the
board of directors, and as are not stated and expressed in this
Certificate of Incorporation or any amendment hereto including, but not
limited to, determination of any of the following:
(i) The number of shares constituting that series and the
distinctive designation of that series;
(ii) The dividend rate or rates on the shares of that series,
whether dividends shall be cumulative, and, if so, from which date
or dates, the payment date or dates for dividends and the relative
rights of priority, if any, of payment of dividends on shares of
that series;
(iii) Whether that series shall have voting rights, in
addition to the voting rights provided by law, and, if so, the
terms of such voting rights;
(iv) Whether that series shall have conversion privileges,
and, if so, the terms and conditions of such conversion, including
provision for adjustment of the conversion rate in such events as
the board of directors shall determine;
(v) Whether or not the shares of that series shall be redeem-
able, and, if so, the terms and conditions of such redemption,
including the date or date upon or after which they shall be
redeemable, and the amount per share payable in case of redemption,
which amount may vary under different conditions and at different
redemption dates;
(vi) Whether that series shall have a sinking or retirement
fund for the redemption or purchase of shares of that series, and,
if so, the terms and amount of such sinking or retirement fund;
(vii) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of
the corporation, and the relative rights of priority, if any, of
payment of shares of that series;
(viii) Any other preferences, privileges and powers, and
relative participating, optional or other special rights, and
qualifications, limitations or restrictions of a series, as the
board of directors may deem advisable and are not inconsistent with
the provisions of this Certificate of Incorporation.
(3) Dividends.
Dividends on outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment in accordance with their respective
preferential and relative rights before any dividends shall be paid or
declared and set apart for payment on the outstanding shares of Common
Stock with respect to the same dividend period.
(4) Liquidation.
If upon any voluntary or involuntary liquidation, dissolution or
winding up of the corporation, the assets available for distribution to
holders of shares of Preferred Stock of all series shall be insufficient
to pay such holders the full preferential amount to which they are
entitled, then such assets shall be distributed ratably among the shares
of all series of Preferred Stock in accordance with the respective
preferential and relative amounts (including unpaid cumulative
dividends, if any) payable with respect thereto.
(5) Reacquired Shares.
Shares of Preferred Stock which have been issued and reacquired in
any manner by the corporation (excluding, until the corporation elects
to retire them, shares which are held as treasury shares but including
shares redeemed, shares purchased and retired, and shares which have
been converted into shares of Common Stock) will have the status of
authorized and unissued shares of Preferred Stock and may be reissued.
(6) Voting Rights.
Unless and except to the extent otherwise required by law or
provided in the resolution or resolutions of the board of directors
creating any series of Preferred Stock pursuant to this Division I, the
holders of the Preferred Stock shall have no voting power with respect
to any matter whatsoever. In no event shall the Preferred Stock be
entitled to more than one vote in respect of each share of stock except
as may be required by law or by this Certificate of Incorporation.
II. Common Stock
(1) Dividends.
Subject to the preferential rights of the Preferred Stock, the
holders of the Common Stock are entitled to receive, to the extent
permitted by law, such dividends as may be declared from time to time by
the board of directors.
(2) Liquidation.
In the event of the voluntary or involuntary liquidation,
dissolution, distribution of assets or winding up of the corporation,
after distribution in full of the preferential amounts, if any, to be
distributed to the holders of shares of Preferred Stock, holders of
Common Stock shall be entitled to receive all of the remaining assets of
the corporation of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of Common
Stock held by them respectively. The board of directors may distribute
in kind to the holders of Common Stock such remaining assets of the
corporation or may sell, transfer or otherwise dispose of all or any
part of such remaining assets to any other corporation, trust or other
entity and receive payment therefor in cash, stock or obligations of
such other corporation, trust or other entity, or any combination
thereof, and may sell all or any part of the consideration so received
and distribute any balance thereof in kind to holders of Common Stock.
The merger or consolidation of the corporation into or with any other
corporation, or the merger of any other corporation into it, or any
purchase or redemption of shares of stock of the corporation of any
class, shall not be deemed to be a dissolution, liquidation or winding
up of the corporation for the purposes of this paragraph.
(3) Voting Rights.
Except as may be otherwise required by law or this Certificate of
Incorporation, each holder of Common Stock has one vote in respect of
each share of stock held by him of record on the books of the
corporation on all matters voted upon by the stockholders."
FOURTH: The corporation is to have perpetual existence.
FIFTH: In furtherance and not in limitation of the powers conferred
by statute, the board of directors is authorized to adopt, amend and repeal
the Bylaws of this corporation.
SIXTH: No action shall be taken by the stockholders of the
corporation except in an annual or special meeting of stockholders. Special
meetings of the stockholders of the corporation for any purpose or purposes
may be called by the Chairman of the Board and shall be called by the
Chairman of the Board, or Secretary at the request in writing of a majority
of the board of directors.
SEVENTH: (a) The number of directors of the corporation shall be fixed
from time to time in the manner set forth in the Bylaws.
(b) The board of directors shall be divided into three classes, Class
A, Class B and Class C, with each class as nearly equal in number as
possible. Any inequality among the classes in the number of directors
comprising such classes shall not impair the validity of any action taken by
the board of directors. Each director shall serve for a term ending on the
date of the third annual meeting following the annual meeting at which such
director was elected. Directors in office on the effective date of this
Restated Certificate of Incorporation will continue to serve in the class to
which they were elected or appointed and for the balance of their respective
terms as they existed immediately prior to the effective date of this
Restated Certificate of Incorporation.
(c) In the event of any increase or decrease in the authorized number
of directors, each director then serving shall nevertheless continue as a
director of the class of which he or she is a member until the expiration of
his or her term, or his or her prior death, retirement or resignation.
(d) Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, although less than a quorum, or by a sole
remaining director and the directors so chosen shall hold office until the
next election of the class for which such directors shall have been chosen,
and until their successors shall be elected and qualified. If there are no
directors in office, then an election of directors may be held in the manner
provided by statute.
(e) Vacancies in more than one class of directors shall be filled, and
newly created or eliminated directorships shall be apportioned among the
three classes of directors, so that the number of directors in each class
will be as nearly equal as possible.
EIGHTH: The affirmative vote of the holders of not less than 60
percent of the total voting power of all outstanding shares of Common Stock
of the corporation shall be required for the merger, consolidation or other
business reorganization or combination of this corporation with any other
corporation (collectively referred to as "Combination") or for the sale of
all or substantially all the assets of this corporation (referred to as a
"Sale") notwithstanding that applicable law would otherwise permit such a
Combination or Sale with the approval of fewer shares or without the approval
of any shares.
NINTH: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation,
in the manner now or hereafter prescribed by statute, and all rights
conferred on stockholders herein are granted subject to this reservation.
Notwithstanding the foregoing, the affirmative vote of the holders of not
less than 60 percent of the total voting power of all outstanding shares of
Common Stock of the corporation shall be required to amend or repeal the
provisions set forth in Articles SIXTH, SEVENTH, EIGHTH and NINTH.
TENTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of Section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as
the case may be, to be summoned in such manner as the said court directs. If
a majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of
this corporation, as the case may be, agree to any compromise or arrangement
and to any reorganization of this corporation as a consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or
on all of the stockholders or class of stockholders, of this corporation, as
the case may be, and also on this corporation.
ELEVENTH: The address of the registered office of this corporation in
the State of Delaware is 1209 Orange Street, in the City of Wilmington,
County of New Castle, and the name of its registered agent at that address is
The Corporation Trust Company.
TWELFTH: No director of the corporation shall be personally liable to
the corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director involving any act or omission of any such
director occurring on or after May 14, 1987; provided, however, that the
foregoing provision shall not eliminate or limit the liability of a director
(i) for any breach of the director's duty of loyalty to the corporation or
its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the General Corporation Law of the State of Delaware, or (iv)
for any transaction from which the director derived an improper personal
benefit. Any repeal or modification of this Article by the stockholders of
the corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the corporation in
respect of any acts or omissions occurring prior to such repeal or
modification, or any such limitation existing at the time of such repeal or
modification.
4. The provisions of Comdial Corporation's Certificate of Designation
of Series A 7-1/2% Cumulative Convertible Redeemable Preferred Stock, par
value $10.00 per share, filed with the Secretary of State of the State of
Delaware on February 1, 1994 shall specifically survive the restatement,
integration and amendment effected by this Restated Certificate of
Incorporation. A copy of the Certificate of Designation, without amendment
or modification, is attached to this Restated Certificate of Incorporation as
Exhibit A and is incorporated herein by reference.
IN WITNESS WHEREOF, Comdial Corporation has caused this Restated
Certificate of Incorporation to be duly executed by William G. Mustain, its
President, and attested to by Wayne R. Wilver, its Secretary, and has caused
the corporate seal to be affixed hereto, this ___ day of April, 1995.
COMDIAL CORPORATION
By:_______________________________________
William G. Mustain, President
(Corporate Seal)
ATTEST:
__________________________________
Wayne R. Wilver, Secretary
<PAGE>
Exhibit A to the Company's
Restated Certificate of Incorporation
CERTIFICATE OF DESIGNATION
OF
SERIES A 7-1/2% CUMULATIVE CONVERTIBLE REDEEMABLE
PREFERRED STOCK
Comdial Corporation, a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware (the
"Company"), certifies that pursuant to the authority contained in Article
THIRD of its Certificate of Incorporation, as amended, and in accordance with
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, its Board of Directors, at a meeting duly convened and held on
February 1, 1994, adopted the following resolution creating a series of its
Preferred Stock, par value $10.00, designated as Series A 7-1/2% Cumulative
Convertible Redeemable Preferred Stock:
RESOLVED, that a series of the class of authorized Preferred Stock,
par value $10.00, of the Company be hereby created, and that the designation
and amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such
series, and the qualifications, limitations and restrictions thereof are as
follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as the "Series A 7-1/2% Cumulative Convertible Redeemable
Preferred Stock" (hereinafter "Series A Preferred Stock") and the number of
shares constituting such series shall be 850,000 and no more.
Section 2. Dividends and Distributions.
(a) The holders of shares of Series A Preferred Stock, in
preference to the holders of shares of the Company's Common Stock, par value
$0.01 per share ("Common Stock"), shall be entitled to receive, when, as and
if declared by the Board of Directors, out of funds of the Company legally
available for the payment of dividends, quarterly dividends per share payable
in cash in the following amounts: $0.19 on the last day of March, $0.19 on
the last day of June, $0.19 on the last day of September, and $0.18 on the
last day of December in each year (each such date being referred to as a
"Quarterly Dividend Payment Date") commencing on the first Quarterly Dividend
Payment Date which is after the date of issue of such shares of Series A
Preferred Stock; provided, however, that with respect to such first Quarterly
Dividend Payment Date, the holders of shares of Series A Preferred Stock
shall be entitled pursuant to this paragraph (a) to receive the pro rata
portion of such quarterly dividend on the basis of the number of days elapsed
between the date of issue and the first Quarterly Dividend Payment Date.
Such dividends shall be cumulative and shall accrue from the date of issue
until paid in cash.
(b) Dividends paid on shares of Series A 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
to all such shares of Series A Preferred Stock at the time outstanding. The
Board of Directors may fix a record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive payments of a dividend
declared thereon, which record date shall be no more than 60 days nor less
than 10 days prior to the date fixed for the payment thereof.
(c) The holders of shares of Series A Preferred Stock shall not be
entitled to receive any dividends or other distributions except as provided
in this Certificate of Designation of Series A 7-1/2% Cumulative Convertible
Redeemable Preferred Stock.
Section 3. Voting Rights. The shares of Series A Preferred Stock
shall not have any voting powers, either general or special, except as
required by applicable law and as follows:
(a) Without the affirmative vote of the holders of 67% of the
shares of Series A Preferred Stock at the time outstanding, voting separately
as a class, the Company shall not amend its Certificate of Incorporation to,
adopt a certification of designation to or otherwise (i) create any class of
stock, issue any series of Preferred Stock or any other equity security
ranking prior to or in parity with the Series A Preferred Stock as to
dividends or upon liquidation or (ii) alter or change any of the preferences,
privileges, rights or powers of the holders of the Series A Preferred Stock
so as to affect adversely such preferences, privileges, rights or powers.
(b) Without the affirmative vote of the holders of a majority of
shares of Series A Preferred Stock at the time outstanding, voting separately
as a class, the Company shall not effect the dissolution of the Company, the
sale, lease, exchange of all or substantially all of its property and assets,
authorize a merger or consolidation of the Company, or seek protection under
the Federal Bankruptcy Code or any successor statute of similar import.
(c) In the event that any four consecutive quarterly dividends
upon the Series A Preferred Stock shall be in arrears and unpaid, the holders
of Series A Preferred Stock shall have the exclusive and special right,
voting separately as a class, to elect two (2) members of the Board of
Directors or such greater number of members as is necessary to equal at least
40% of the total number of members of the Board of Directors at all times
thereafter.
Section 4. Certain Restrictions. Whenever quarterly dividends
payable on shares of Series A Preferred Stock pursuant to the terms of
Section 2 are in arrears, then thereafter and until all accrued and unpaid
dividends on shares of Series A Preferred Stock outstanding shall have been
paid in full or declared and set apart for payment, the Company shall not
declare or pay dividends on, or make any other distributions on any shares of
any series or class other than Series A Preferred Stock or purchase, redeem
or otherwise acquire any shares of any series or class other than Series A
Preferred stock.
Section 5. Redemption.
(a) The outstanding shares of Series A Preferred Stock may be
redeemed at the option of the Company, in whole or in part, at any time upon
not less than 30 days nor more than 90 days prior written notice to all
holders of record of shares of Series A Preferred Stock to be so redeemed, at
a redemption price equal to all accumulated but unpaid dividends to and
including the date fixed for redemption of such shares (the "Redemption
Date") plus an amount (the "Applicable Amount") equal to (i) during the four
calendar years after the year of issuance of the Series A Preferred Stock,
$10.00 per share or (ii) during each calendar year after the fourth year, an
amount equal to the Applicable Amount in the preceding year plus $0.50 per
share; provided that the redemption price per share for any transaction which
results in the total number of shares of Series A Preferred Stock that have
been redeemed (including the shares redeemed in such transaction) equaling at
least ten percent (10%) of the total number of shares of Series A Preferred
Stock which were originally issued, and for all subsequent transactions,
shall be the same price as was in effect during the year preceding the
transaction which results in the redemption of at least ten percent (10%) of
the originally issued Series A Preferred Stock. Subject to delivery of
certificates for the shares to be redeemed, the Company shall pay the
Applicable Amount plus all accumulated but unpaid dividends on the Redemption
Date.
(b) Unless default shall be made in the payment in full of the
redemption price and any accumulated and unpaid dividends, dividends on the
shares of Series A Preferred Stock called for redemption shall cease to
accumulate on the Redemption Date, and all rights of the holders of such
shares as stockholders of the Company by reason of the ownership of such
shares shall cease on the Redemption Date, except the right to receive the
amount payable upon redemption of such shares on presentation and surrender
of the respective certificates representing such shares. After the
Redemption Date, such shares shall not be deemed to be outstanding and shall
not be transferable on the books of the Company except to the Company.
(c) At any time on or after the Redemption Date, the respective
holders of record of shares of Series A Preferred Stock to be redeemed shall
be entitled to receive the redemption price upon actual delivery to the
Company of certificates for the shares to be redeemed, such certificates, if
required by the Company, to be properly stamped for transfer and duly
endorsed in blank or accompanied by proper instruments of transfer thereof
duly executed in blank.
Section 6. Liquidation, Dissolution or Winding-Up. In the event
of any voluntary or involuntary liquidation, dissolution or winding up of the
Company, the holders of shares of the Series A Preferred Stock then
outstanding shall be entitled to be paid out of the assets of the Company
available for distribution to its stockholders, before any payment shall be
made to the holders of any other class or series of capital stock of the
Company, an amount equal to $10.00 per share plus an amount equal to all
dividends accrued thereon to and including the date of payment.
Section 7. Conversion.
(a) Each share of Series A Preferred Stock shall be convertible at
any time at the option of the holder thereof, into shares of Common Stock,
the number of such shares of Common Stock to be determined by dividing the
par value of the Series A Preferred Stock by $2.91738 (the initial conversion
price for each share of Common Stock), subject to the adjustments hereinafter
provided (such price as adjusted, the "Conversion Price").
(b) Each holder of outstanding shares of Series A Preferred Stock
may exercise the conversion right provided in paragraph (a) above as to all
or any portion of the shares he holds by delivering to the Company during
regular business hours, at the principal office of the Company or at such
other place as may be designated in writing by the Company, the certificate
or certificates for the shares to be converted, duly endorsed or assigned in
blank or endorsed or assigned to the Company (if required by it), accompanied
by written notice stating that the holder elects to convert such shares and
stating the name or names (with address and applicable social security or
other tax identification number) in which the certificate or certificates for
shares of Common Stock are to be issued. Conversion shall be deemed to have
been effected on the date (the "Conversion Date") when such delivery is made.
As promptly as practicable thereafter the Company shall issue and deliver to
or upon the written order of such holder, at such office or other place
designated by the Company, a certificate or certificates for the number of
shares of Common Stock to which he is entitled and a check or other order for
the payment of cash due with respect to any fraction of a share, as provided
in paragraph (c) below. The person in whose name the certificate or
certificates for shares of Common Stock are to be issued shall be deemed to
have become a shareholder of record on the Conversion Date, unless the
transfer books of the Company are closed on that date, in which event he
shall be deemed to have become a shareholder of record on the next succeeding
date on which the transfer books are open; but the Conversion Price shall be
that in effect on the Conversion Date.
(c) The Company shall not issue any fraction of a share of Common
Stock upon conversion of shares of Series A Preferred Stock. If more than
one share of Series A Preferred Stock shall be surrendered for conversion at
any time by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the total
number of shares of Series A Preferred Stock so surrendered. If any
fractional interest in a share of Common Stock would be deliverable upon
conversion, the Company shall make an adjustment therefor in cash based on
the Market Price of one share of Common Stock on the Conversion Date. The
"Market Price" of a share of Common Stock on any date shall be deemed to be
the average of the closing price of one share of Common Stock on the NASDAQ
National Market System on each of the 20 consecutive trading days commencing
40 trading days before such date (a trading day being a day on which
securities are traded in the NASDAQ National Market System).
(d) The issuance of shares of Common Stock on conversion of
outstanding shares of Series A Preferred Stock shall be made by the Company
without charge for expenses or for any tax in respect of the issuance of such
shares of Common Stock, but the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of shares of Common Stock in any name other than that of the holder
of record on the books of the Company of the outstanding shares of Series A
Preferred Stock converted, and the Company shall not be required to issue or
deliver any certificate for shares of Common Stock unless and until the
person requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
(e) Conversion Price Adjustments. The Conversion Price of the
Series A Preferred Stock shall be subject to adjustment from time to time as
follows:
(i) (A) If the Company shall issue any Additional Stock (as
defined below) without consideration or for a consideration per share that is
less than the Market Price in effect immediately prior to the issuance of
such Additional Stock, the Conversion Price shall forthwith (except as other-
wise provided in this clause (i)) be adjusted as to equal the price
determined by the following formula:
OP x (P x N) + C = NP
(P x (N + n))
where
NP = new Conversion Price,
OP = old Conversion Price
P = Market Price in effect immediately prior to the issuance of
Additional Stock,
N = the number of shares of Common Stock outstanding immediately prior
to the issuance of Additional Stock (including for this purpose the
number of shares of Common Stock issuable upon conversion of the
Series A Preferred Stock at the Conversion Price in effect
immediately prior to such issuance),
C = the aggregate consideration to be received by the Company for the
Additional Stock, and
n = the number of shares of Additional Stock to be issued.
(B) No adjustment of the Conversion Price for the Series
A Preferred Stock shall be made in an amount less than one cent per share,
provided that any adjustments that are thereby not required to be made shall
be carried forward and shall be taken into account in any subsequent
adjustment. Except to the limited extent provided for in Subsection
7(e)(i)(E)(3), no adjustment of the Conversion Price pursuant to this
Subsection 7(e)(i) shall have the effect of increasing the Conversion Price
above the Conversion Price in effect immediately prior to such adjustment.
(C) In the case of the issuance of Common Stock for
cash, the consideration shall be deemed to be the amount of cash paid
therefor before deducting any reasonable discounts, commissions or other
expenses allowed, paid or incurred by the Company for any underwriting or
otherwise in connection with the issuance and sale thereof.
(D) In the case of the issuance of the Common Stock for
a consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair value thereof as determined by the
Board of Directors irrespective of any accounting treatment.
(E) In the case of the issuance of options to purchase
or rights to subscribe for Common Stock, securities by their terms
convertible into or exchangeable for Common Stock or options to purchase or
rights to subscribe for such convertible or exchangeable securities (which
are not excluded from the definition of Additional Stock), the following
provisions shall apply:
(1) subject to subparagraph (4) below, the
aggregate maximum number of shares of Common Stock deliverable upon
exercise of such options to purchase or rights to subscribe for Common
Stock shall be deemed to have been issued at the time such options or
rights were issued and for a consideration equal to the consideration
(determined in the manner provided in Subsections 7(e)(i)(C) and
7(e)(i)(D)), if any, received by the Company upon the issuance of such
options or rights plus the additional consideration, if any, to be
received by the Company upon the exercise of such options or rights for
the Common Stock covered thereby;
(2) subject to subparagraph (4) below, the
aggregate maximum number of shares of Common Stock deliverable upon
conversion of or in exchange for any such convertible or exchangeable
securities or upon the exercise of options to purchase or rights to
subscribe for such convertible or exchangeable securities and the
subsequent conversion or exchange thereof shall be deemed to have been
issued at the time such convertible or exchangeable securities were
issued or such options or rights were issued and for a consideration
equal to the consideration, if any, received by the Company for any such
convertible or exchangeable securities and related options or rights
(excluding any cash received on account of accrued interest or accrued
dividends), plus the additional consideration, if any, to be received by
the Company upon the conversion or exchange of such securities or the
exercise of any related options or rights (the consideration in each
case to be determined in the manner provided in Subsections 7(e)(i)(C)
and 7(e)(i)(D));
(3) in the event of any increase in the number of
shares of Common Stock deliverable upon exercise of such options or
rights or upon conversion of or in exchange for such convertible or
exchangeable securities, including, but not limited to, a change
resulting from the antidilution provisions thereof, the Conversion Price
then in effect shall forthwith be readjusted to such Conversion Price as
would have been obtained had the adjustment that was made upon the
issuance of such options, rights or securities not converted prior to
such change or the options or rights related to such securities not
converted prior to such change been made upon the basis of such change,
but no further adjustment shall be made for the actual issuance of
Common Stock upon the exercise of any such options or rights or the
conversion or exchange of such securities; and
(4) upon the expiration of any such options or
rights, the termination of any such rights to convert or exchange or the
expiration of any options or rights related to such convertible or
exchangeable securities, the Conversion Price shall forthwith be
readjusted to such Conversion Price as would have been obtained had the
adjustment that was made upon the issuance of such options, rights or
securities or options or rights related to such securities been made
upon the basis of the issuance of only the number of shares of Common
Stock actually issued upon the exercise of such options or rights, upon
the conversion or exchange of such securities or upon the exercise of
the options or rights related to such securities.
(ii) "Additional Stock" shall mean any shares of Common Stock
issued (or deemed to have been issued pursuant to Subsection 7(e)(i)(E)) by
the Company after the date Series A Preferred Stock is first issued
("Issuance Date"), other than
(A) Common Stock issued pursuant to a transaction
described in Subsection 7(e)(iii) hereof,
(B) Any shares of Common Stock issuable or issued to
directors, employees or consultants of the Company directly or pursuant to a
stock option or other plan, and
(C) Common Stock issued or issuable upon conversion of
any outstanding Series A Preferred Stock.
(iii) If the Company should at any time or from time to time
after the Issuance Date fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock or the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such
holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend, distribution, split or subdivision if no record date is
fixed), the applicable Conversion Price of the Series A Preferred Stock shall
be appropriately decreased so that the number of shares of Common Stock
issuable on conversion of each share of Series A Preferred Stock shall be
increased in proportion to such increase of outstanding shares.
(iv) If the number of shares of Common Stock outstanding at
any time after the Issuance Date is decreased by a combination or reverse
stock split of the outstanding shares of Common Stock, then, following the
record date of such combination or reverse stock split, the applicable
Conversion Price of the Series A Preferred Stock shall be appropriately
increased so that the number of shares of Common Stock issuable on conversion
of each share of Series A Preferred Stock shall be decreased in proportion to
such decrease in outstanding shares.
(v) In case of any consolidation or merger of the Company
with or into another corporation or the conveyance of all or substantially
all of the assets of the Company to another corporation, adequate provision
shall be made by the Company or by the successor or purchasing business
entity so that each share of Series A Preferred Stock 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
deliverable upon conversion of such Series A Preferred Stock immediately
before the effectiveness of such consolidation, merger or conveyance, would
have been entitled upon such consolidation, merger or conveyance; and, in any
such case, appropriate adjustment (as determined by the Board of Directors of
the Company) shall be made in the application of the provisions herein set
forth with respect to the rights and interest thereafter of the holder of the
Series A Preferred Stock, to the end that the provisions set forth herein
(including provisions with respect to changes in and other adjustment of the
Conversion Price of the Series A Preferred Stock) 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 A Preferred Stock.
(f) Other Distributions. If the Company shall declare a
distribution payable to holders of Common Stock in securities of other
persons, evidences of indebtedness issued by the Company or other persons,
assets (excluding cash dividends) or options or rights not referred to in
Subsection 7(e)(iii), then, in each such case for the purpose of this
Subsection 7(f), the holders of the Series A Preferred Stock shall be
entitled to a proportionate share of any such distribution as though they
were the holders of the number of shares of Common Stock of the Company into
which their shares of Series A Preferred Stock are convertible as of the
record date fixed for the determination of the holders of Common Stock of the
Company entitled to receive such distribution.
(g) Recapitalizations. If at any time or from time to time there
shall be a recapitalization of the Common Stock (other than a subdivision,
combination, merger, sale of assets or other transaction provided for
elsewhere in this Section 7), provision shall be made so that the holders of
the Series A Preferred Stock shall thereafter be entitled to receive upon
conversion of the Series A Preferred Stock the number of shares of stock or
other securities or property of the Company or otherwise, to which a holder
of Common Stock deliverable upon conversion immediately before the
effectiveness of such recapitalization would have been entitled on such
recapitalization. In any such case, appropriate adjustment shall be made in
the application of the provisions of this Section 7 with respect to the
rights of the holders of the Series A Preferred Stock after the
recapitalization to the end that the provisions of this Section 7 (including
adjustment of the Conversion Price then in effect and the number of shares
purchasable upon conversion of the Series A Preferred Stock) shall be
applicable after that event as nearly equivalent as may be practicable.
(h) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 7 and in the taking of all
such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of the Series A Preferred Stock against
impairment.
(i) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price of the Series A Preferred
Stock pursuant to this Section 7, the Company, at its expense, shall promptly
compute such adjustment or readjustment in accordance with the terms hereof
and prepare and furnish to each holder of Series A Preferred Stock, by first
class mail, postage prepaid, a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, including a statement setting forth (A) the
consideration received or to be received by the Company for any Additional
Stock, (B) the Conversion Price then in effect, and (C) the number of shares
of Common Stock and the amount, if any, of other property which at the time
would be received upon the conversion of a share of the Series A Preferred
Stock.
(j) Notices of Record Date. In the event of any taking by the
Company of a record of the holders of any class of securities for the purpose
of determining the holders thereof who are entitled to receive any dividend
(other than a cash dividend) or other distribution, any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right, the Company
shall mail to each holder of Series A Preferred Stock, at least 20 days prior
to the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or
right, and the amount and character of such dividend, distribution or right.
(k) Notices. Any notice required by the provisions of this
Section 7 to be given to the holder of shares of Series A Preferred Stock
shall be deemed given when personally delivered to such holder or five
business days after the same has been deposited in the United States mail,
certified or registered mail, return receipt requested, postage prepaid, and
addressed to each holder of record at his address appearing on the books of
the Company.
(l) Effect of Conversion After Certain Record Dates. If any shares
of Series A Preferred Stock are converted into shares of Common Stock after
the record date for the happening of any of the events described in
subparagraphs (i), (ii) or (iii) of Section 7(e) but before the happening of
such event the Company may defer, until the happening of such event, (i)
issuing to the holder of shares of Series A Preferred Stock so converted the
shares of Common Stock which he is entitled to receive because of the
adjustments required pursuant to any such subparagraph and (ii) paying to
such holder any cash in lieu of a fractional share pursuant to this Section
7.
(m) Reservation of Stock Issuable on Conversion. Shares of Common
Stock issued on conversion of shares of Series A Preferred Stock shall be
issued as fully paid shares and shall be nonassessable by the Company. The
Company shall, at all times, reserve and keep available for the purpose of
effecting the conversion of the outstanding shares of Series A Preferred
Stock such number of its duly authorized shares of Common Stock as shall be
sufficient to effect the conversion of all of the outstanding shares of
Series A Preferred Stock.
Section 8. Transfer Restrictions. The holder of any shares of
Series A Preferred Stock shall not transfer or purport to transfer any such
shares unless he shall have given to the Company, through its Secretary, at
least fifteen (15) business days' written notice of the proposed transfer,
the number of shares proposed to be transferred, the price at which the
proposed transfer is to be made, and the name of the prospective transferee.
During such fifteen (15) business days, the Company shall have the sole
option to exercise its right of redemption consistent with the terms of
Section 5 of this Certificate.
IN WITNESS WHEREOF, Comdial Corporation has caused this Certificate
of Designation to be duly executed by William G. Mustain, its President, and
attested to by Wayne R. Wilver, its Secretary, and has caused the corporate
seal to be affixed hereto, this 1st day of February, 1994.
COMDIAL CORPORATION
By: /s/ William G. Mustain
William G. Mustain, President
(Corporate Seal)
ATTEST:
/s/ Wayne R. Wilver
Wayne R. Wilver, Secretary
