<PAGE>
As filed with the Securities and Exchange Commission on December 15, 1995
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
---------------
MERRY LAND & INVESTMENT COMPANY, INC.
(Exact Name of Registrant as Specified in Its Charter)
Georgia 58-0961876
(State of Incorporation) (I.R.S.
Employer Identification Number)
P.O. Box 1417
624 Ellis Street, Augusta, Georgia 30903
(706) 722-6756
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
W. Hale Barrett Copy To:
Secretary
Hull, Towill, Norman & Barrett, P.C. R.W. Smith, Jr., Esquire
7th Floor, SunTrust Bank Building Piper & Marbury L.L.P.
P.O. Box 1564 36 South Charles Street
Augusta, Georgia 30903-1564 Baltimore, Maryland 21201-3010
(706)722-4481 (410) 539-2530
(Name, address, including zip code,
and telephone number,
including area code,
of agent for service)
---------------
Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective as
determined by market conditions and other factors.
---------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===========================================================================
Proposed Proposed
Aggregate Maximum Maximum
Title of Amount to be Offering Aggregate Amount of
securities registered Price Per Offering Registration
to be registered<F1> <F2> Unit Price<F2><F3> Fee<F4>
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities,
Preferred Stock,
Depositary Shares, $455,000,000
Common Stock and <F6> <F7> $455,000,000 $156,898
Common Stock Warrants
<F5>
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<FN>
<F1> This Registration Statement also covers delayed delivery contracts
that may be issued by the Registrant under which the party purchasing
such contracts may be required to purchase Debt Securities, Preferred
Stock, Depositary Shares, Common Stock or Common Stock Warrants
(collectively, the "Offered Securities"). Such contracts may be issued
together with the specific Offered Securities to which they relate. In
addition, Offered Securities registered hereunder may be sold either
separately or as units comprising more than one type of Offered
Security registered hereunder. Pursuant to Rule 429 the Prospectus
included in this Registration Statement also relates to Registrant's
Registration No. 33-57453 and the $45,000,000 of Registrant's
securities remaining for sale thereunder.
<F2> In U.S. dollars or the equivalent thereof in one or more foreign
currencies or units of two or more foreign currencies or composite
currencies (such as European Currency Units).
<F3> Estimated solely for purposes of calculating the registration fee. No
separate consideration will be received for Common Stock or Preferred
Stock as may from time to time be issued upon conversion or exchange
of Debt Securities, Preferred Stock or Depositary Shares.
<F4> The registration fee has been calculated in accordance with Rule
457(o) under the Securities Act of 1933, as amended.
<F5> Also includes such indeterminate amounts of Debt Securities and
indeterminate number of shares of Common Stock and Preferred Stock as
may be issued upon exercise of Common Stock Warrants or conversion of
or exchange for any other Debt Securities or Preferred Stock that
provide for conversion or exchange into other securities.
<F6> Such amount represents the principal amount of the Debt Securities
issued at their principal amount, the issue price rather than the
principal amount of any Debt Securities issued at an original issue
discount, the liquidation preference of any Preferred Stock, the
amount computed pursuant to Rule 457(c) for any Common Stock, the
issue price of any Common Stock Warrants and the exercise price for
any Common Stock issuable upon the exercise of Common Stock Warrants.
<F7> Omitted pursuant to General Instruction II.D of Form S-3 under the
Securities Act of 1933, as amended.
</TABLE>
===========================================================================
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
===========================================================================
<PAGE>
PROSPECTUS Subject to Completion
$500,000,000 December 15, 1995
MERRY LAND & INVESTMENT COMPANY, INC.
DEBT SECURITIES, PREFERRED STOCK, DEPOSITARY SHARES,
COMMON STOCK AND COMMON STOCK WARRANTS
---------------
Merry Land & Investment Company, Inc. ("Merry Land" or the "Company")
may from time to time offer in one or more series (i) its unsecured senior
or subordinated debt securities (the "Debt Securities"), (ii) shares or
fractional shares of its preferred stock, without par value (the "Preferred
Stock"), (iii) shares of Preferred Stock represented by depositary shares
(the "Depositary Shares"), (iv) shares of its common stock, without par
value (the "Common Stock"), or (v) warrants to purchase Common Stock (the
"Common Stock Warrants"), with an aggregate public offering price of up to
$500,000,000 on terms to be determined at the time of offering. The Debt
Securities, Preferred Stock, Depositary Shares, Common Stock and Common
Stock Warrants (collectively, the "Offered Securities") may be offered,
separately or together, in separate series in amounts, at prices and on
terms to be set forth in a supplement to this Prospectus (each, a
"Prospectus Supplement").
The Debt Securities will be direct unsecured obligations of the
Company and may be either senior Debt Securities ("Senior Debt Securities")
or subordinated Debt Securities ("Subordinated Debt Securities"). The
Senior Debt Securities will rank equally with all other unsecured and
unsubordinated indebtedness of the Company. The Subordinated Debt
Securities will be subordinated to all existing and future Senior Debt of
the Company, as defined. See "Description of Debt Securities."
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable
Prospectus Supplement and will include, where applicable: (i) in the case
of Debt Securities, the specific title, aggregate principal amount,
currency, form (which may be registered or bearer, or certificated or
global), authorized denominations, maturity, rate (or manner of calculation
thereof) and time of payment of interest, terms for redemption at the
option of the Company or repayment at the option of the Holder, terms for
sinking fund payments, terms for conversion into Preferred Stock, Common
Stock or other Company securities, additional covenants, and any initial
public offering price; (ii) in the case of Preferred Stock, the specific
title and stated value, any dividend, liquidation, redemption, conversion,
voting and other rights, and any initial public offering price; (iii) in
the case of Depositary Shares, the fractional share of Preferred Stock
represented by each such Depositary Share; (iv) in the case of Common
Stock, any initial public offering price; and (v) in the case of Common
Stock Warrants, the duration, offering price, exercise price and
detachability. In addition, such specific terms may include limitations on
direct or beneficial ownership and restrictions on transfer of the Offered
Securities, in each case as may be appropriate to preserve the status of
the Company as a real estate investment trust for federal income tax
purposes.
The applicable Prospectus Supplement will also contain information,
where applicable, about certain United States federal income tax
considerations relating to, and any listing on a securities exchange of,
the Offered Securities covered by such Prospectus Supplement.
The Offered Securities may be offered directly by the Company, through
agents designated from time to time by the Company, or to or through
underwriters or dealers. If any agents or underwriters are involved in the
sale of any of the Offered Securities, their names, and any applicable
purchase price, fee, commission or discount arrangement between or among
them, will be set forth, or will be calculable from the information set
forth, in the applicable Prospectus Supplement. See "Plan of
Distribution." No Offered Securities may be sold without delivery of the
applicable Prospectus Supplement describing the Offered Securities and the
method and terms of the offering.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON
OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
The date of this Prospectus is _______________ ____, 199__.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Reports,
proxy statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and its
Regional Offices located at: 75 Park Place, New York, New York 10017; and
500 West Madison Street, Chicago, Illinois 60661; and can also be inspected
and copied at the offices of the New York Stock Exchange at 20 Broad
Street, New York, New York 10005. Copies of such material can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company has filed a registration statement with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Offered Securities (the "Registration Statement"). As
permitted by the rules and regulations of the Commission, this Prospectus
does not contain all of the information set forth in the Registration
Statement. For further information, reference is made to such Registration
Statement and to the exhibits, which may be inspected and copied at or
obtained from the Commission's public reference facilities, 450 Fifth
Street, N.W., Washington, D.C. 20549 upon payment of the prescribed fees.
Each statement made in this Prospectus with respect to a document that is
filed as an exhibit to the Registration Statement is qualified by reference
to such exhibit for a complete statement of the terms and conditions
thereof.
There are incorporated herein by reference the following documents
heretofore filed by the Company with the Commission:
i. the Company's annual report on Form 10-K for the year ended
December 31, 1994;
ii. the Company's quarterly reports on Form 10-Q for the
quarters ended March 31, 1995, June 30, 1995 and September
30, 1995;
iii. the Company's current reports on Form 8-K filed on
(1) February 14, 1995,
(2) March 13, 1995,
(3) June 8, 1995,
(4) June 19, 1995,
(5) June 23, 1995
(6) July 14, 1995
(7) September 1, 1995
(8) September 14, 1995, and
(9) November 8, 1995;
iv. the Company's current reports on Form 8-K/A filed on
(1) January 24, 1995 amending the Company's report on Form
8-K filed on November 3, 1994,
(2) February 7, 1995 amending the Company's report on Form
8-K filed on August 15, 1994,
(3) June 21, 1995 amending the Company's report on Form 8-K
filed on June 19, 1995,
(4) September 18, 1995 amending the Company's report on
Form 8-K filed on June 8, 1995, and
(5) December 1, 1995 amending the Company's report on Form
8-K filed on September 14, 1995;
v. the description of the Company's Common Stock, $1.75 Series
A Cumulative Convertible Preferred Stock and $2.15 Series C
Cumulative Convertible Preferred Stock contained in the
Company's registration statements on Form 8-A filed under
the Exchange Act, including any amendments or reports filed
for the purpose of updating such descriptions; and
vi. the Company's definitive proxy statement dated March 27,
1995 relating to the annual meeting of shareholders held on
April 17, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the date of
filing such documents.
Any statement contained herein or in a document incorporated herein by
reference or deemed to be incorporated herein by reference shall be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein, in any accompanying Prospectus Supplement
relating to a specific offering of Offered Securities or in any other
amendment or supplement hereto or document subsequently incorporated herein
by reference, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
Copies of all documents incorporated herein by reference, other than
exhibits to such documents (unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates), will be provided without charge to each person who receives
a copy of this Prospectus on the written or oral request of such person
directed to W. Hale Barrett, the Company's Secretary, 624 Ellis Street,
Augusta, Georgia 30901, telephone number (706) 722-6756.
THE COMPANY
Merry Land is one of the largest owners and operators of upscale
garden apartments in the Southern region of the United States. Merry Land
became an independent publicly owned company in 1981 and has been managing
apartment communities since 1982. The Company is a self-administered and
self-managed real estate investment trust ("REIT") headquartered in
Augusta, Georgia. At December 15, 1995, the Company owned 78 apartment
communities containing 21,705 units and having an aggregate cost of $969.8
million. At September 30, 1995, the communities had an average occupancy of
95.2% and an average monthly rental rate of $624. The Company's apartment
communities are located in Florida, Georgia, Maryland, North Carolina,
Ohio, South Carolina, Tennessee, Texas and Virginia.
Merry Land is a Georgia corporation. The Company's principal office is
located at 624 Ellis Street, Augusta, Georgia 30901 and its telephone
number is (706) 722-6756.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement,
the net proceeds from the sale of the Offered Securities will be used for
general corporate purposes, which may include repayment of indebtedness,
making improvements to apartment properties, the acquisition of additional
apartment properties and the development and construction of new apartment
properties.
CERTAIN RATIOS
The following table sets forth the Company's ratio of earnings to
fixed charges and ratio of earnings to combined fixed charges and Preferred
Stock dividends for the periods shown.
<TABLE>
<CAPTION>
Year Ended December 31,
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges 1.26x 1.69x 2.98x 5.58x 4.44x
Ratio of earnings to combined
fixed charges and Preferred Stock 1.26x 1.69x 2.98x 3.29x 2.56x
dividends
</TABLE>
The ratio of earnings to fixed charges was computed by dividing
earnings by fixed charges. The ratio of earnings to combined fixed charges
and Preferred Stock dividends was computed by dividing earnings by fixed
charges and Preferred Stock dividends. For the purpose of computing these
ratios, earnings consist of income before taxes plus fixed charges. Fixed
charges consist of interest on borrowed funds and amortization of debt
discount and expense. Preferred Stock dividends consist of those dividends
paid on the Company's $1.75 Series A Cumulative Convertible Preferred Stock
(the "Series A Preferred Stock") and $2.205 Series B Cumulative Convertible
Preferred Stock (the "Series B Preferred Stock") during the respective
periods set forth in the preceding table.
DESCRIPTION OF DEBT SECURITIES
General
- -------
The Senior Debt Securities are to be issued under an indenture dated
as of February 1, 1995, as supplemented by a supplemental indenture dated
as of June 1, 1995 and as may be further supplemented from time to time
(the "Senior Indenture"), between the Company and First Union National Bank
of Georgia (the "Senior Indenture Trustee"), and the Subordinated Debt
Securities are to be issued under an indenture dated as of
February 1, 1995, as supplemented from time to time (the "Subordinated
Indenture"), between the Company and First Union National Bank of Georgia
(the "Subordinated Indenture Trustee"). The term "Trustee," as used
herein, shall refer to the Senior Indenture Trustee or the Subordinated
Indenture Trustee, as appropriate. The Senior Indenture and the form of the
Subordinated Indenture (being sometimes referred to herein collectively as
the "Indentures" and individually as an "Indenture") are filed as exhibits
to the Registration Statement and are available for inspection at the
corporate trust office of the Senior Indenture Trustee in Atlanta, Georgia
and the corporate trust office of the Subordinated Indenture Trustee in
Atlanta, Georgia or as described under "Available Information." The
Indentures are subject to and governed by the Trust Indenture Act of 1939,
as amended (the "TIA"). The statements made herein relating to the
Indentures and the Debt Securities are summaries of certain provisions
thereof, do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all provisions of the
Indentures and the Debt Securities. All section references appearing
herein are to sections of the Indentures, and capitalized terms used but
not defined herein have the respective meanings set forth in the Indentures
and the Debt Securities.
Terms
- -----
The Debt Securities will be direct, unsecured obligations of the
Company. The indebtedness represented by the Senior Debt Securities will
rank equally with all other unsecured and unsubordinated indebtedness of
the Company. The indebtedness represented by the Subordinated Debt
Securities will be subordinated in right of payment to the prior payment in
full of the Senior Debt of the Company, as described under "Subordination".
Each Indenture provides that the Debt Securities may be issued without
limit as to aggregate principal amount, in one or more series, in each case
as established from time to time in or pursuant to authority granted by a
resolution of the Board of Directors of the Company or as established in
one or more supplemental indentures to such Indenture. Debt Securities may
be issued with terms different from those of Debt Securities previously
issued; all Debt Securities of one series need not be issued at the same
time and, unless otherwise provided, a series may be reopened, without the
consent of the Holders of the Debt Securities of such series, for issuances
of additional Debt Securities of such series (Section 301 of each
Indenture).
Each Indenture provides that there may be more than one Trustee
thereunder, each with respect to one or more series of Debt Securities.
Any Trustee under either Indenture may resign or be removed with respect to
one or more series of Debt Securities, and a successor Trustee may be
appointed to act with respect to such series (Section 608 of each
Indenture). In the event that two or more persons are acting as Trustee
with respect to different series of Debt Securities, each such Trustee
shall be a Trustee of a trust under the applicable Indenture separate and
apart from the trust administered by any other Trustee (Sections 101 and
609 of each Indenture), and, except as otherwise indicated herein, any
action described herein to be taken by the Trustee may be taken by each
such Trustee with respect to, and only with respect to, the one or more
series of Debt Securities for which it is Trustee under the applicable
Indenture.
Reference is made to the Prospectus Supplement relating to the series
of Debt Securities being offered for the specific terms thereof, including:
1. the title of such Debt Securities and whether such Debt
Securities are Senior Debt Securities or Subordinated Debt
Securities;
2. the aggregate principal amount of such Debt Securities and any
limit on such principal amount;
3. the percentage of the principal amount at which such Debt
Securities will be issued and, if other than the principal amount
thereof, the portion of the principal amount payable upon
declaration of acceleration of the maturity thereof, or (if
applicable) the portion of the principal amount of such Debt
Securities that is convertible into Capital Stock (as defined in
the Indentures), or the method by which any such portion will be
determined;
4. if convertible, any applicable limitations on the ownership or
transferability of the Capital Stock into which such Debt
Securities are convertible;
5. the date or dates, or the method by which such date or dates will
be determined, on which the principal of such Debt Securities
will be payable and the amount of principal payable thereon;
6. the rate or rates (which may be fixed or variable) at which such
Debt Securities will bear interest, if any, or the method by
which such rate or rates will be determined, the date or dates
from which such interest will accrue or the method by which such
date or dates will be determined, the Interest Payment Dates on
which any such interest will be payable and the Regular Record
Dates, if any, for such Interest payable on any Registered
Security on any Interest Payment Dates, or the method by which
such Dates will be determined, and the basis upon which interest
will be calculated if other than that of a 360-day year
consisting of twelve 30-day months;
7. the place or places where the principal of (and premium or Make-Whole
Amount (as defined), if any), interest, if any, on, and
Additional Amounts, if any, payable in respect of, such Debt
Securities will be payable, where such Debt Securities may be
surrendered for registration of transfer, conversion or exchange
and where notices or demands to or upon the Company in respect of
such Debt Securities and the applicable Indenture may be served;
8. the period or periods within which, the price or prices
(including premium or Make-Whole Amount, if any) at which, the
currency or currencies, currency unit or units or composite
currency or currencies in which and other terms and conditions
upon which such Debt Securities may be redeemed in whole or in
part, at the option of the Company, if the Company is to have the
option;
9. the obligation, if any, of the Company to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund or
analogous provision or at the option of a Holder thereof, and the
period or periods within which or the date or dates on which, the
price or prices at which, the currency or currencies, currency
unit or units or composite currency or currencies in which, and
other terms and conditions upon which such Debt Securities will
be redeemed, repaid or purchased, in whole or in part, pursuant
to such obligation;
10. whether such Debt Securities will be in registered or bearer form
and terms and conditions relating thereto, and, if other than
$1,000 and any integral multiple thereof, the denominations in
which any registered Debt Securities will be issuable and, if
other than $5,000, the denomination or denominations in which any
bearer Debt Securities will be issuable;
11. if other than United States dollars, the currency or currencies
in which such Debt Securities will be denominated and payable,
which may be a foreign currency or units of two or more foreign
currencies or a composite currency or currencies;
12. whether the amount of payment of principal of (and premium or
Make-Whole Amount, if any) or interest, if any, on such Debt
Securities may be determined with reference to an index, formula
or other method (which index, formula or method may be based,
without limitation, on one or more currencies, currency units,
composite currencies, commodities, equity indices or other
indices), and the manner in which such amounts will be
determined;
13. whether the principal of (and premium or Make-Whole Amount, if
any) or interest or Additional Amounts, if any, on such Debt
Securities are to be payable, at the election of the Company or a
Holder thereof, in a currency or currencies, currency unit or
units or composite currency or currencies other than that in
which such Debt Securities are denominated or stated to be
payable, the period or periods within which, and the terms and
conditions upon which, such election may be made, and the time
and manner of, and identity of the exchange rate agent with
responsibility for, determining the exchange rate between the
currency or currencies, currency unit or units or composite
currency or currencies in which such Debt Securities are
denominated or stated to be payable and the currency or
currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are to be so payable;
14. provisions, if any, granting special rights to the Holders of
such Debt Securities upon the occurrence of such events as may be
specified;
15. any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to such Debt
Securities, whether or not such Events of Default or covenants
are consistent with the Events of Default or covenants set forth
in the applicable Indenture;
16. whether such Debt Securities will be issued in certificated or
book-entry form and terms and conditions related thereto;
17. the applicability, if any, of the defeasance and covenant
defeasance provisions of Article Fourteen of the applicable
Indenture;
18. whether and under what circumstances the Company will pay
Additional Amounts as contemplated in the Indenture on such Debt
Securities to any Holder who is not a United States person in
respect of any tax, assessment or governmental charge and, if so,
whether the Company will have the option to redeem such Debt
Securities rather than pay such Additional Amounts (and the terms
of any such option);
19. the obligation, if any, of the Company to permit the conversion
of the Debt Securities of such series into shares of Capital
Stock of the Company and the terms and conditions upon which such
conversion shall be effected; and
20. any other terms of such Debt Securities, which terms shall not be
inconsistent with the provisions of the applicable Indenture
(Section 301 of each Indenture).
The Debt Securities may provide for less than the entire principal
amount thereof to be payable upon declaration of acceleration of the
maturity thereof ("Original Issue Discount Securities") (Section 502 of
each Indenture). Any special United States federal income tax, accounting
and other considerations applicable to Original Issue Discount Securities
will be described in the applicable Prospectus Supplement.
Denominations, Interest, Registration and Transfer
- --------------------------------------------------
Unless otherwise specified in the applicable Prospectus Supplement,
the Debt Securities of any series issued in registered form will be
issuable in denominations of $1,000 and integral multiples thereof. Unless
otherwise specified in the applicable Prospectus Supplement, the Debt
Securities of any series issued in bearer form will be issuable in
denominations of $5,000 (Section 302 of each Indenture).
Unless otherwise specified in the applicable Prospectus Supplement,
the principal of (and premium or Make-Whole Amount, if any) and interest on
any series of Senior Debt Securities will be payable at the corporate trust
office of the Senior Indenture Trustee located at Corporate Trust
Administration, 999 Peachtree Street, N.E., Suite 1100, Atlanta, Georgia
30309, and the principal of (and premium or Make-Whole Amount, if any) and
interest on any series of Subordinated Debt Securities will be payable at
the corporate trust office of the Subordinated Indenture Trustee located at
Corporate Trust Administration, 999 Peachtree Street, N.E., Suite 1100,
Atlanta, Georgia 30309; provided that at the option of the Company payment
of interest on any series of Debt Securities may be made by check mailed to
the address of the Person entitled thereto as it appears in the Security
Register for such series or by wire transfer of funds to such Person at an
account maintained within the United States (Sections 301, 305, 306, 307
and 1002 of each Indenture).
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the Holder on the applicable Regular
Record Date and may either be paid to the Person in whose name such Debt
Security is registered at the close of business on a special record date
(the "Special Record Date") for the payment of such Defaulted Interest to
be fixed by the Trustee, in which case notice thereof shall be given to the
Holder of such Debt Security not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner, all as
more completely described in the applicable Indenture (Section 307 of each
Indenture).
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for
other Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations upon surrender of
such Debt Securities at the corporate trust office of the Trustee referred
to above. In addition, subject to certain limitations imposed upon Debt
Securities issued in book-entry form, the Debt Securities of any series may
be surrendered for conversion or registration of transfer thereof at the
corporate trust office of the Trustee referred to above. Every Debt
Security surrendered for conversion, registration or transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer.
No service charge will be made for any registration or transfer or exchange
of any Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith (Section 305 of each Indenture). If the applicable
Prospectus Supplement refers to any transfer agent (in addition to the
Trustee) initially designated by the Company with respect to any series of
Debt Securities, the Company may at any time rescind the designation of any
such transfer agent or approve a change in the location through which such
transfer agent acts, except that the Company will be required to maintain a
transfer agent in each Place of Payment for such series. The Company may
at any time designate additional transfer agents with respect to any series
of Debt Securities (Section 1002 of each Indenture).
Neither the Company nor the Trustee shall be required to (i) issue,
register the transfer of or exchange Debt Securities of any series during a
period beginning at the opening of business 15 days before any selection of
Debt Securities of that series to be redeemed and ending at the close of
business on the day of mailing or publication of the relevant notice of
redemption; (ii) register the transfer of or exchange any Registered
Security, or portion thereof, called for redemption, except the unredeemed
portion of any Registered Security being redeemed in part; (iii) exchange
any Bearer Security selected for redemption, except that such a Bearer
Security may be exchanged for a Registered Security of that series and like
tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption; or (iv) issue, register the transfer of or
exchange any Debt Security which has been surrendered for repayment at the
option of the Holder, except the portion, if any, of such Debt Security not
to be so repaid (Section 305 of each Indenture).
Merger, Consolidation or Sale
- -----------------------------
The Company may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any other
entity, provided that (a) either the Company shall be the continuing
entity, or the successor entity (if other than the Company) formed by or
resulting from any such consolidation or merger or which shall have
received the transfer of such assets is a Person organized and existing
under the laws of the United States or any State thereof and shall
expressly assume payment of the principal of (and premium or Make-Whole
Amount, if any) and interest (including all Additional Amounts, if any) on
all of the Debt Securities and the due and punctual performance and
observance of all of the covenants and conditions contained in each
Indenture; (b) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or any
Subsidiary as a result thereof as having been incurred by the Company or
such Subsidiary at the time of such transaction, no Event of Default under
an Indenture, and no event which, after notice or the lapse of time, or
both, would become such an Event of Default, shall have occurred and be
continuing; and (c) an Officers' Certificate and legal opinion covering
such conditions shall be delivered to the Trustee (Sections 801 and 803 of
each Indenture).
Certain Covenants
- -----------------
EXISTENCE. Except as described above under "Merger, Consolidation or
Sale," the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect the existence, rights (charter
and statutory) and franchises of the Company and its Subsidiaries;
provided, however, that the Company shall not be required to preserve any
right or franchise if it determines that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries as a whole and that the loss thereof is not disadvantageous in
any material respect to the Holders of the Debt Securities of any series
(Section 1005 of each Indenture).
MAINTENANCE OF PROPERTIES. The Company will cause all of its
properties used or useful in the conduct of its business or the business of
any Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
the Company and its Subsidiaries shall not be prevented from selling or
otherwise disposing of for value their properties in the ordinary course of
business (Section 1006 of each Indenture).
INSURANCE. The Company will, and will cause each of its Subsidiaries
to, keep all of its insurable properties insured against loss or damage in
an amount at least equal to their then full insurable value with
financially sound and reputable insurance companies (Section 1007 of each
Indenture).
PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay or discharge
or cause to be paid or discharged, before the same become delinquent, (i)
all taxes, assessments and governmental charges levied or imposed upon it
or any Subsidiary or upon the income, profits or property of the Company or
any Subsidiary, and (ii) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of
the Company or any Subsidiary; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or
validity is being contested in good faith by appropriate proceedings
(Section 1008 of each Indenture).
PROVISION OF FINANCIAL INFORMATION. Whether or not the Company is
subject to Section 13 or 15(d) of the Exchange Act, the Company will, to
the extent permitted under the Exchange Act, file with the Commission the
annual reports, quarterly reports and other documents which the Company
would have been required to file with the Commission pursuant to such
Section 13 and 15(d) if the Company were so subject, such documents to be
filed with the Commission on or prior to the respective dates (the
"Required Filing Dates") by which the Company would have been required so
to file such documents if the Company were so subject. The Company will
also in any event (x) within 15 days of each Required Filing Date (i)
transmit by mail to all Holders of Debt Securities, as their names and
addresses appear in the Security Register, without cost to such Holders,
copies of the annual reports and quarterly reports which the Company would
have been required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act if the Company were subject to such Sections and
(ii) file with the Trustee copies of the annual reports, quarterly reports
and other documents which the Company would have been required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act if the
Company were subject to such Sections and (y) if filing such documents by
the Company with the Commission is not permitted under the Exchange Act,
promptly upon written request and payment of the reasonable cost of
duplication and delivery, supply copies of such documents to any
prospective Holder (Section 1009 of each Indenture).
WAIVER OF CERTAIN COVENANTS. The Company may omit to comply with any
term, provision or condition of the foregoing covenants, and with any other
term, provision or condition with respect to the Debt Securities of any
series specified in Section 301 of the Indentures (except any such term,
provision or condition which could not be amended without the consent of
all Holders of Debt Securities of such series), if before or after the time
for such compliance the Holders of at least a majority in principal amount
of all outstanding Debt Securities of such series, by act of such Holders,
either waive such compliance in such instance or generally waive compliance
with such covenant or condition, but no such waiver shall extend to or
affect such covenant or condition except to the extent so expressly waived,
and until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect (Section 1012
of each Indenture).
ADDITIONAL COVENANTS. The Prospectus Supplement for a particular
series of Debt Securities may contain additional covenants of the Company
with respect to such series of Debt Securities.
Events of Default, Notice and Waiver
- ------------------------------------
Each Indenture provides that the following events are "Events of
Default" with respect to any series of Debt Securities issued thereunder:
(a) default for 30 days in the payment of any installment of interest or
Additional Amounts payable on any Debt Security of such series: (b) default
in the payment of the principal of (or premium or Make-Whole Amount, if
any, on) any Debt Security of such series at its Maturity; (c) default in
making any sinking fund payment as required for any Debt Security of such
series; (d) default in the performance of any other covenant of the Company
contained in the Indenture (other than a covenant added to the Indenture
solely for the benefit of a series of Debt Securities issued thereunder
other than such series), continued for 60 days after written notice as
provided in the Indenture; (e) default under any bond, debenture, note,
mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness for money borrowed
by the Company (or by any Subsidiary, the repayment of which the Company
has guaranteed or for which the Company is directly responsible or liable
as obligor or guarantor) having an aggregate principal amount outstanding
of at least $10,000,000, whether such indebtedness now exists or shall
hereafter be created, which default shall have resulted in such
indebtedness being declared due and payable prior to the date on which it
would otherwise have become due and payable, without such acceleration
having been rescinded or annulled within 10 days after written notice to
the Company as provided in the Indenture; (f) the entry by a court of
competent jurisdiction of one or more judgments, orders or decrees against
the Company or any Subsidiary in an aggregate amount (excluding amounts
fully covered by insurance) in excess of $10,000,000 and such judgments,
orders or decrees remain undischarged, unstayed and unsatisfied in an
aggregate amount (excluding amounts fully covered by insurance) in excess
of $10,000,000 for a period of 30 consecutive days; (g) certain events of
bankruptcy, insolvency or reorganization, or court appointment of a
receiver, liquidator or trustee of the Company or any Significant
Subsidiary or for all or substantially all of the property of the Company
or any Significant Subsidiary; and (h) any other Event of Default provided
with respect to such series of Debt Securities (Section 501 of each
Indenture). The term "Significant Subsidiary" means each significant
subsidiary (as defined in Regulations S-X promulgated under the Securities
Act) of the Company.
If an Event of Default under either Indenture with respect to Debt
Securities of any series at the time outstanding occurs and is continuing,
then in every such case the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Debt Securities of that series may
declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities or Indexed Securities, such portion of
the principal amount as may be specified in the terms thereof) of, and
premium or Make-Whole Amount, if any, on, all of the Debt Securities of
that series to be due and payable immediately by written notice thereof to
the Company (and to the Trustee if given by the Holders). However, at any
time after such declaration of acceleration with respect to Debt Securities
of such series (or of all Debt Securities then Outstanding under the
applicable Indenture, as the case may be) has been made, but before a
judgment or decree for payment of the money due has been obtained by the
Trustee, the Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of such series (or of all Debt Securities then
Outstanding under the applicable Indenture, as the case may be) may rescind
and annul such declaration and its consequences if (a) the Company shall
have deposited with the Trustee all required payments of the principal of
(and premium or Make-Whole Amount, if any) and interest, and any Additional
Amounts, on the Debt Securities of such series (or of all Debt Securities
then Outstanding under the applicable Indenture, as the case may be), plus
certain fees, expenses, disbursements and advances of the Trustee and (b)
all Events of Default, other than the nonpayment of accelerated principal
(or specified portion thereof and the premium or Make-Whole Amount, if any)
or interest, with respect to the Debt Securities of such series (or of all
Debt Securities then Outstanding under the applicable Indenture, as the
case may be) have been cured or waived as provided in the Indenture
(Section 502 of each Indenture). Each Indenture also provides that the
Holders of not less than a majority in principal amount of the Outstanding
Debt Securities of any series (or of all Debt Securities then Outstanding
under the applicable Indenture, as the case may be) may waive any past
default with respect to such series and its consequences, except a default
(x) in the payment of the principal of (or premium or Make-Whole Amount, if
any) or interest or Additional Amounts payable on any Debt Security of such
series or (y) in respect of a covenant or provision contained in the
applicable Indenture that cannot be modified or amended without the consent
of the Holder of each Outstanding Debt Security affected thereby (Section
513 of each Indenture).
The Trustee is required to give notice to the Holders of Debt
Securities within 90 days of a default under the applicable Indenture;
provided, however, that such Trustee may withhold notice to the Holders of
any series of Debt Securities of any default with respect to such series
(except a default in the payment of the principal of (or premium or Make-
Whole Amount, if any) or interest or Additional Amounts payable on any Debt
Security of such series or in the payment of any sinking fund installment
in respect of any Debt Security of such series) if the Responsible Officers
of such Trustee consider such withholding to be in the interest of such
Holders (Section 601 of each Indenture).
Each Indenture provides that no Holders of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect
to such Indenture or for any remedy thereunder, except in the case of
failure of the Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of an Event of Default from the
Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of such series, as well as an offer of reasonable indemnity
(Section 507 of each Indenture). This provision will not prevent, however,
any Holder of Debt Securities from instituting suit for the enforcement of
payment of the principal of (and premium or Make-Whole Amount, if any),
interest on and Additional Amounts payable with respect to, such Debt
Securities at the respective due dates or redemption dates thereof (Section
508 of each Indenture).
Modification of the Indentures
- ------------------------------
Modifications and amendment of either Indenture may be made with the
consent of the Holders of not less than a majority in principal amount of
all Outstanding Debt Securities issued under such Indenture that are
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
such Debt Security affected thereby, (a) change the stated Maturity of the
principal of (or premium or Make-Whole Amount, if any), or any installment
of principal of or interest or Additional Amounts payable on, any such Debt
Security; (b) reduce the principal amount of, or the rate or amount of
interest on, or any premium or Make-Whole Amount payable on redemption of,
or any Additional Amount payable with respect to, any such Debt Security,
or reduce the amount of principal of an Original Issue Discount Security or
Make-Whole Amount, if any, that would be due and payable upon declaration
of acceleration of the maturity thereof or would be provable in bankruptcy,
or adversely affect any right of repayment of the Holder of any such Debt
Security; (c) change the Place of Payment, or the coin or currency, for
payment of principal of (and premium or Make-Whole Amount, if any), or
interest on, or any Additional Amounts payable with respect to, any such
Debt Security; (d) impair the right to institute suit for the enforcement
of any payment on or with respect to any such Debt Security; (e) reduce the
percentage of Outstanding Debt Securities of any series, the consent of
whose Holders is necessary to modify or amend the applicable Indenture, to
waive compliance with certain provisions thereof or certain defaults and
consequences thereunder or to reduce the quorum or voting requirements set
forth in the Indenture; or (f) modify any of the foregoing provisions or
any of the provisions relating to the waiver of certain past defaults or
certain covenants, except to increase the required percentage to effect
such action or to provide that certain other provisions may not be modified
or waived without the consent of the Holder of each such Debt Security
(Section 902 of each Indenture).
The Holders of not less than a majority in principal amount of
Outstanding Debt Securities issued under either Indenture have the right to
waive compliance by the Company with certain covenants in such Indenture
(Section 1012 of each Indenture).
Modifications and amendments of either Indenture may be made by the
Company and the respective Trustee thereunder without the consent of any
Holder of Debt Securities for any of the following purposes:
i. to evidence the succession of another Person to the
Company as obligor under such Indenture;
ii. to add to the covenants of the Company for the benefit of
the Holders of all or any series of Debt Securities or to
surrender any right or power conferred upon the Company
in such Indenture;
iii. to add Events of Default for the benefit of the Holders
of all or any series of Debt Securities;
iv. to add or change any provisions of either Indenture to
facilitate the issuance of, or to liberalize certain
terms of, Debt Securities in bearer form, or to permit or
facilitate the issuance of Debt Securities in
uncertificated form provided that such action shall not
adversely affect the interests of the Holders of the Debt
Securities of any series in any material respect;
v. to add, change or eliminate any provisions of either
Indenture, provided that any such addition, change or
elimination shall become effective only when there are no
Debt Securities Outstanding of any series created prior
thereto which are entitled to the benefit of such
provision;
vi. to secure the Debt Securities;
vii. to establish the form or terms of Debt Securities of any
series, including the provisions and procedures, if
applicable, for the conversion of such Debt Securities
into Common Stock or Preferred Stock of the Company;
viii. to provide for the acceptance of appointment by a
successor Trustee or facilitate the administration of the
trusts under either Indenture by more than one Trustee;
ix. to cure any ambiguity, defect or inconsistency in either
Indenture, provided that such action shall not adversely
affect the interests of Holders of Debt Securities of any
series issued under such Indenture;
x. to close either Indenture with respect to the
authentication and delivery of additional series of Debt
Securities or to qualify, or maintain qualification of,
either Indenture under the Trust Indenture Act; or
xi. to supplement any of the provisions of either Indenture
to the extent necessary to permit or facilitate
defeasance and discharge of any series of such Debt
Securities, provided that such action shall not adversely
affect the interests of the Holders of the Debt
Securities of any series in any material respect (Section
901 of each Indenture).
Subordination
- -------------
Upon any distribution to creditors of the Company in a liquidation,
dissolution, bankruptcy, insolvency or reorganization, the payment of the
principal of and interest on the Subordinated Debt Securities will be
subordinated to the extent provided in the Subordinated Indenture in right
of payment to the prior payment in full of all Senior Debt (Sections 1601
and 1602 of the Subordinated Indenture), but the obligation of the Company
to make payment of the principal and interest on the Subordinated Debt
Securities will not otherwise be affected (Section 1608 of the Subordinated
Indenture). No payment of principal or interest may be made on the
Subordinated Debt Securities at any time if a default on Senior Debt exists
that permits the holders of such Senior Debt to accelerate its maturity and
the default is the subject of judicial proceedings or the Company receives
notice of the default (Section 1603 of the Subordinated Indenture). The
Company may resume payments on the Subordinated Debt Securities when the
default is cured or waived, or 120 days pass after the notice is given if
the default is not the subject of judicial proceedings, if the
subordination provisions of the Subordinated Indenture otherwise permit
payment at that time (Section 1603 of the Subordinated Indenture). After
all Senior Debt is paid in full and until the Subordinated Debt Securities
are paid in full, Holders will be subrogated to the rights of holders of
Senior Debt to the extent that distributions otherwise payable to holders
have been applied to the payment of Senior Debt (Section 1607 of the
Subordinated Indenture). By reason of such subordination, in the event of a
distribution of assets upon insolvency, certain general creditors of the
Company may recover more, ratably, than holders of the Subordinated Debt
Securities.
Senior Debt is defined in the Subordinated Indenture as the principal
of and interest on, or substantially similar payments to be made by the
Company in respect of, the following, whether outstanding at the date of
execution of the Subordinated Indenture or thereafter incurred, created or
assumed: (a) indebtedness of the Company for money borrowed or represented
by purchase-money obligations, (b) indebtedness of the Company evidenced by
notes, debentures, or bonds, or other securities issued under the
provisions of an indenture, fiscal agency agreement or other instrument,
(c) obligations of the Company as lessee under leases of property either
made as part of any sale and leaseback transaction to which the Company is
a party or otherwise, (d) indebtedness of partnerships and joint ventures
that is included in the consolidated financial statements of the Company,
(e) indebtedness, obligations and liabilities of others in respect of which
the Company is liable contingently or otherwise to pay or advance money or
property or as guarantor, endorser or otherwise or which the Company has
agreed to purchase or otherwise acquire, and (f) any binding commitment of
the Company to fund any real estate investment or to fund any investment in
any entity making such real estate investment, in each case other than (1)
any such indebtedness, obligation or liability referred to in clauses (a)
through (f) above as to which, in the instrument creating or evidencing the
same pursuant to which the same is outstanding, it is provided that such
indebtedness, obligation or liability is not superior in right of payment
to the Subordinated Debt Securities or ranks pari passu with the
Subordinated Debt Securities, (2) any such indebtedness, obligation or
liability which is subordinated to indebtedness of the Company to
substantially the same extent as or to a greater extent than the
Subordinated Debt Securities are subordinated, and (3) the Subordinated
Debt Securities (Section 101 of the Subordinated Indenture). At
December 15, 1995, Senior Debt aggregated approximately $360.0 million.
There are no restrictions in the Subordinated Indenture upon the creation
of additional Senior Debt or other indebtedness.
Discharge, Defeasance and Covenant Defeasance
- ---------------------------------------------
Under each Indenture, the Company may discharge certain obligations to
Holders of any series of Debt Securities issued thereunder that have not
already been delivered to the applicable Trustee for cancellation and that
either have become due and payable or will become due and payable within
one year (or scheduled for redemption within one year) by irrevocably
depositing with the applicable Trustee, in trust, funds in such currency or
currencies, currency unit or units or composite currency or currencies in
which such Debt Securities are payable in an amount sufficient to pay the
entire indebtedness on such Debt Securities in respect of principal (and
premium or Make-Whole Amount, if any) and interest and any Additional
Amounts payable to the date of such deposit (if such Debt Securities have
become due and payable) or to the Stated Maturity or Redemption Date, as
the case may be (Section 401 of each Indenture).
Each Indenture provides that, if the provisions of Article Fourteen
thereof are made applicable to the Debt Securities of or within any series
pursuant to Section 301 of such Indenture, the Company may elect either (a)
to defease and be discharged from any and all obligations with respect to
such Debt Securities (except for the obligation to pay Additional Amounts,
if any, upon the occurrence of certain events of tax assessment or
governmental charge with respect to payments on such Debt Securities and
the obligations to register the transfer or exchange of such Debt
Securities, to replace temporary, mutilated, destroyed, lost or stolen Debt
Securities, to maintain an office or agency in respect of such Debt
Securities and to hold moneys for payment in trust) ("defeasance") (Section
1402 of each Indenture) or (b) to be released from its obligations with
respect to such Debt Securities under provisions of each Indenture
described under "Certain Covenants," or, if provided pursuant to Section
301 of each Indenture, its obligations with respect to any other covenant,
and any failure to comply with such obligations shall not constitute a
default or an Event or Default with respect to such Debt Securities
("covenant defeasance") (Section 1403 of each Indenture), in either case
upon the irrevocable deposit by the Company with the applicable Trustee, in
trust, of an amount, in such currency or currencies, currency unit or
currency units or composite currency or currencies in which such Debt
Securities are payable at Stated Maturity, or Government Obligations (as
defined below), or both, applicable to such Debt Securities which through
the scheduled payment of principal and interest in accordance with their
terms will provide money in an amount sufficient to pay the principal of
(and premium or Make-Whole Amount, if any) and interest on such Debt
Securities, and any mandatory sinking fund or analogous payments thereon,
on the scheduled due dates therefor.
Such a trust may only be established if, among other things, the
Company has delivered to the applicable Trustee an Opinion of Counsel (as
specified in each Indenture) to the effect that the Holders of such Debt
Securities will not recognize income, gain or loss for United States
federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to United States federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such defeasance or covenant defeasance had not occurred, and
such Opinion of Counsel, in the case of defeasance, must refer to and be
based upon a ruling of the Internal Revenue Service or a change in
applicable United States federal income tax laws occurring after the date
of such Indenture (Section 1404 of each Indenture).
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government which issued
the Foreign Currency in which the Debt Securities of a particular series
are payable, for the payment of which its full faith and credit is pledged
or (ii) obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America or the
government which issued the Foreign Currency in which the Debt Securities
of such series are payable, the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America or such other government, which, in either case, are not callable
or redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest
on or principal of any such Government Obligation held by such custodian
for the account of the holder of a depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt
from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the
Government Obligation evidenced by such depository receipt (Section 101 of
each Indenture).
Unless otherwise provided in the applicable Prospectus Supplement, if
after the Company has deposited funds and/or Government Obligations to
effect defeasance or covenant defeasance with respect to Debt Securities of
any series, (a) the Holder of a Debt Security of such series is entitled
to, and does, elect pursuant to Section 301 of either Indenture or the
terms of such Debt Security to receive payment in a currency, currency unit
or composite currency other than that in which such deposit has been made
in respect to such Debt Security, or (b) a Conversion Event (as defined
below) occurs in respect of the currency, currency unit or composite
currency in which such deposit has been made, the indebtedness represented
by such Debt Security shall be deemed to have been, and will be, fully
discharged and satisfied through the payment of the principal of (and
premium or Make-Whole Amount, if any) and interest on such Debt Security as
they become due out of the proceeds yielded by converting the amount so
deposited in respect of such Debt Security into the currency, currency unit
or composite currency in which such Debt Security becomes payable as a
result of such election or such cessation of usage based on the applicable
market exchange rate (Section 1405 of each Indenture).
"Conversion Event" means the cessation of use of (i) a currency,
currency unit or composite currency issued by the government of one or more
countries other than the United States (other than the ECU or other
currency unit) both by the government of the country that issued such
currency and for the settlement of transactions by a central bank or other
public institutions of or within the international banking community, (ii)
the ECU both within the European Monetary System and for the settlement of
transactions by public institutions of or within the European Communities
or (iii) any currency, currency unit or composite currency other than the
ECU for the purposes for which it was established (Section 101 of each
Indenture). Unless otherwise provided in the applicable Prospectus
Supplement, all payments of principal of (and premium or Make-Whole Amount,
if any) and interest on any Debt Security that is payable in a Foreign
Currency that ceases to be used by its government of issuance shall be made
in United States dollars.
In the event the Company effects covenant defeasance with respect to
any Debt Securities and such Debt Securities are declared due and payable
because of the occurrence of any Event of Default other than the Event of
Default described in clause (d) under "Events of Default, Notice and
Waiver" with respect to Sections 1004 to 1009, inclusive, of either
Indenture (which Sections would no longer be applicable to such Debt
Securities) or described in clause (h) under "Events of Default, Notice and
Waiver" with respect to a covenant as to which there has been covenant
defeasance, the amount in such currency, currency unit or composite
currency in which such Debt Securities are payable, and Government
Obligations on deposit with the Trustee, will be sufficient to pay amounts
due on such Debt Securities at the time of their Stated Maturity but may
not be sufficient to pay amounts due on such Debt Securities at the time of
the acceleration resulting from such Event of Default. However, the Company
would remain liable to make payment of such amounts due at the time of
acceleration.
The applicable Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance,
including any modifications to the provisions described above, with respect
to the Debt Securities of or within a particular series.
Conversion Rights
- -----------------
The terms and conditions, if any, upon which the Debt Securities are
convertible into Capital Stock will be set forth in the applicable
Prospectus Supplement relating thereto. Such terms will include whether
such Debt Securities are convertible into Capital Stock, the conversion
price (or manner of calculation thereof), the conversion period, provisions
as to whether conversion will be at the option of the Holders or the
Company, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such Debt
Securities.
Book-Entry System
- -----------------
The Debt Securities of a series may be issued in whole or in part in
the form of one or more global securities ("Global Securities") that will
be deposited with, or on behalf of, a depository (the "Depository")
identified in the Prospectus Supplement relating to such series. Global
Securities, if any, issued in the United States are expected to be
deposited with the Depository Trust Company, as Depository. Global
Securities may be issued in fully registered form and may be issued in
either temporary or permanent form. Unless and until it is exchanged in
whole or in part for the individual Debt Securities represented thereby, a
Global Security may not be transferred except as a whole by the Depository
for such Global Security to a nominee of such Depository or by a nominee of
such Depository to such Depository or another nominee of such Depository or
by such Depository or any nominee of such Depository to a successor
Depository or any nominee of such successor.
The specific terms of the depository arrangement with respect to a
series of Debt Securities will be described in the Prospectus Supplement
relating to such series. The Company expects that unless otherwise
indicated in the applicable Prospectus Supplement, the following provisions
will apply to depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and
transfer system the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons
that have accounts with such Depository ("Participants"). Such accounts
shall be designated by the underwriters, dealers or agents with respect to
such Debt Securities or by the Company if such Debt Securities are offered
directly by the Company. Ownership of beneficial interests in such Global
Security will be limited to Participants or persons that may hold interests
through Participants. Ownership of beneficial interests in such Global
Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the Depository for such Global
Security or its nominee (with respect to beneficial interests of
Participants) and records of Participants (with respect to beneficial
interests of persons who hold through Participants). The laws of some
states require that certain purchasers of securities take physical delivery
of such securities in definitive form. Such limits and laws may impair the
ability to own, pledge or transfer beneficial interest in a Global
Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee,
as the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as described below or in the applicable
Prospectus Supplement, owners of beneficial interest in a Global Security
will not be entitled to have any of the individual Debt Securities
represented by such Global Security registered in their names, will not
receive or be entitled to receive physical delivery of any such Debt
Securities in definitive form and will not be considered the owners or
holders thereof under the applicable Indenture.
Payments of principal of, any premium or Make-Whole Amount and any
interest on, or any Additional Amounts payable with respect to, individual
Debt Securities represented by a Global Security registered in the name of
a Depository or its nominee will be made to the Depository or its nominee,
as the case may be, as the registered owner of the Global Security. None
of the Company, the Trustee, any Paying Agent or the Security Registrar for
such Debt Securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Company expects that the Depository for any Debt Securities or its
nominee, upon receipt of any payment of principal, premium, Make-Whole
Amount, interest or Additional Amounts in respect of the Global Security
representing such Debt Securities, will immediately credit Participants'
accounts with payments in amounts proportionate to their respective
beneficial interests in the principal amount of such Global Security as
shown on the records of such Depository or its nominee. The Company also
expects that payments by Participants to owners of beneficial interests in
such Global Security held through such Participants will be governed by
standing instructions and customary practices, as is the case with
securities held for the account of customers in bearer form or registered
in street name. Such payments will be the responsibility of such
Participants.
If a Depository for any Debt Securities is at any time unwilling,
unable or ineligible to continue as depository and a successor depository
is not appointed by the Company within 90 days, the Company will issue
individual Debt Securities in exchange for the Global Security representing
such Debt Securities. In addition, the Company may at any time and in its
sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities, determine not to have any of
such Debt Securities represented by one or more Global Securities and in
such event will issue individual Debt Securities in exchange for the Global
Security or Securities representing such Debt Securities. Individual Debt
Securities so issued will be issued in denominations of $1,000 and integral
multiples thereof.
Trustees
- --------
First Union National Bank of Georgia, the Senior Indenture Trustee and
the Subordinate Indenture Trustee, also provides the Company's revolving
line of credit facility and from time to time directly or through
affiliates performs other services for the Company in the normal course of
business.
Governing Law
- -------------
The Indentures are governed by and shall be construed in accordance
with the laws of the State of Georgia.
DESCRIPTION OF COMMON STOCK
This summary of certain terms and provisions of the Company's Common
Stock does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the terms and provisions of the Company's
Amended and Restated Articles of Incorporation (the "Articles"), and
By-laws, as amended, which are filed as exhibits to the Registration
Statement of which this Prospectus is a part.
The Company has 100,000,000 shares of Common Stock authorized and
33,827,757 shares were outstanding at November 30, 1995. All outstanding
shares of Common Stock are fully paid and nonassessable.
The transfer agent and registrar for the Common Stock is First Union
National Bank of North Carolina, Charlotte, North Carolina. The Company's
Common Stock is traded on the New York Stock Exchange under the symbol
"MRY".
The holders of Common Stock are entitled to receive such dividends as
are declared by the Board of Directors, after payment of, or provision for,
full cumulative dividends for outstanding Preferred Stock. Each share of
Common Stock is entitled to one vote on all matters submitted to a vote of
shareholders, including the election of directors. Cumulative voting for
directors is not permitted, which means that holders of more than 50% of
all of the shares of Common Stock voting can elect all of the directors if
they choose to do so, and, in such event, the holders of the remaining
shares of Common Stock will not be able to elect any directors. Holders of
Common Stock and Preferred Stock, when outstanding and when entitled to
vote, vote as a class, except with respect to matters that relate only to
the rights, terms or conditions of the Preferred Stock, that affect only
the holders of the Preferred Stock, or that relate to the rights of the
holders of the Preferred Stock if the Company fails to fulfill any of its
obligations regarding the Preferred Stock. Upon any dissolution,
liquidation or winding-up of the Company, the holders of Common Stock are
entitled to receive pro rata all of the Company's assets and funds
remaining after payment of, or provision for, creditors and distribution
of, or provision for, preferential amounts and unpaid accumulated dividends
to holders of Preferred Stock. Holders of Common Stock have no preemptive
right to purchase or subscribe for any shares of capital stock of the
Company.
DESCRIPTION OF PREFERRED STOCK
This summary of certain terms and provisions of the Company's
Preferred Stock does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the terms and provisions of the
Company's Articles and By-laws, as amended, which are filed as exhibits to
the Registration Statement of which this Prospectus is a part.
The Articles authorize the issuance of 20,000,000 shares of Preferred
Stock, without par value, of which 677,470 shares of Series A Preferred
Stock, 4,000,000 shares of Series B Preferred Stock and 4,599,800 shares of
Series C Preferred Stock were issued and outstanding at November 30, 1995.
All outstanding shares of the Series A Preferred Stock, the Series B
Preferred Stock and the Series C Preferred Stock are fully paid and
nonassessable.
The transfer agent and registrar for the Series A Preferred Stock, the
Series B Preferred Stock and the Series C Preferred Stock is First Union
National Bank of North Carolina, Charlotte, North Carolina.
The following description of the terms of the Preferred Stock sets
forth certain general terms and provisions of the Preferred Stock to which
a Prospectus Supplement may relate. Specific terms of any series of
Preferred Stock offered by a Prospectus Supplement will be described in
that Prospectus Supplement. The description set forth below is subject to
and qualified in its entirety by reference to the Articles of Amendment to
the Articles fixing the preferences, limitations and relative rights of a
particular series of Preferred Stock.
General
- -------
Under the Articles, the Board of Directors of the Company is
authorized, without further shareholder action, to provide for the issuance
of up to 20,000,000 shares of Preferred Stock, in one or more series, with
such voting powers and with such designations, preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions, as the Board of Directors shall approve. At
November 30, 1995 the Company had 9,277,270 shares of Preferred Stock
issued and outstanding of its 20,000,000 authorized shares of Preferred
Stock.
The Preferred Stock will have the dividend, liquidation, redemption,
conversion and voting rights set forth below unless otherwise provided in
the Prospectus Supplement relating to a particular series of Preferred
Stock. Reference is made to the Prospectus Supplement relating to the
particular series of Preferred Stock offered thereby for specific terms,
including: (i) the title and liquidation preference per share of such
Preferred Stock and the number of shares offered; (ii) the price at which
such series of Preferred Stock will be issued; (iii) the dividend rate (or
method of calculation), the dates on which dividends shall be payable and
the dates from which dividends shall commence to accumulate; (iv) any
redemption or sinking fund provisions of such series of Preferred Stock;
(v) any conversion provisions of such series of Preferred Stock; and (vi)
any additional dividend, liquidation, redemption, sinking fund and other
rights, preferences, privileges, limitations and restrictions of such
series of Preferred Stock.
The Preferred Stock will, when issued, be fully paid and
nonassessable. Unless otherwise specified in the Prospectus Supplement
relating to a particular series of Preferred Stock, each series will rank
on a parity as to dividends and distributions in the event of a liquidation
with each other series of Preferred Stock and, in all cases, will be senior
to the Common Stock.
Dividend Rights
- ---------------
Holders of Preferred Stock of each series will be entitled to receive,
when as and if declared by the Board of Directors, out of assets of the
Company legally available therefor, cash dividends at such rates and on
such dates as are set forth in the Prospectus Supplement relating to such
series of Preferred Stock. Such rate may be fixed or variable or both and
may be cumulative, noncumulative or partially cumulative.
If the applicable Prospectus Supplement so provides, as long as any
shares of Preferred Stock are outstanding, no dividends will be declared or
paid or any distributions be made on the Common Stock, other than a
dividend payable in Common Stock, unless the accrued dividends on each
series of Preferred Stock have been fully paid or declared and set apart
for payment and the Company shall have set apart all amounts, if any,
required to be set apart for all sinking funds, if any, for each series of
Preferred Stock.
If the applicable Prospectus Supplement so provides, when dividends
are not paid in full upon any series of Preferred Stock and any other
series of Preferred Stock ranking on a parity as to dividends with such
series of Preferred Stock, all dividends declared upon such series of
Preferred Stock and any other series of Preferred Stock ranking on a parity
as to dividends will be declared pro rata so that the amount of dividends
declared per share on such series of Preferred Stock and such other series
will in all cases bear to each other the same ratio that accrued dividends
per share on such series of Preferred Stock and such other series bear to
each other.
Each series of Preferred Stock will be entitled to dividends as
described in the Prospectus Supplement relating to such series, which may
be based upon one or more methods of determination. Different series of
Preferred Stock may be entitled to dividends at different dividend rates or
based upon different methods of determination. Except as provided in the
applicable Prospectus Supplement, no series of Preferred Stock will be
entitled to participate in the earnings or assets of the Company.
Rights Upon Liquidation
- -----------------------
In the event of any voluntary or involuntary liquidation, dissolution
or winding-up of the Company, the holders of each series of Preferred Stock
will be entitled to receive out of the assets of the Company available for
distribution to shareholders, the amount stated or determined on the basis
set forth in the Prospectus Supplement relating to such series, which may
include accrued dividends, if such liquidation, dissolution or winding-up
is involuntary or may equal the current redemption price per share
(otherwise than for the sinking fund, if any, provided for such series)
provided for such series set forth in such Prospectus Supplement, if such
liquidation, dissolution or winding-up is voluntary, and on such
preferential basis as is set forth in such Prospectus Supplement. If, upon
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company, the amounts payable with respect to Preferred Stock of any series
and any other shares of stock of the Company ranking as to any such
distribution on a parity with such series of Preferred Stock are not paid
in full, the holders of Preferred Stock of such series and of such other
shares will share ratably in any such distribution of assets of the Company
in proportion to the full respective preferential amounts to which they are
entitled or on such other basis as is set forth in the applicable
Prospectus Supplement. The rights, if any, of the holders of any series of
Preferred Stock to participate in the assets of the Company remaining after
the holders of other series of Preferred Stock have been paid their
respective specified liquidation preferences upon any liquidation,
dissolution or winding-up of the Company will be described in the
Prospectus Supplement relating to such series.
Redemption
- ----------
A series of Preferred Stock may be redeemable, in whole or in part, at
the option of the Company, and may be subject to mandatory redemption
pursuant to a sinking fund, in each case upon terms, at the times and the
redemption prices and for the types of consideration set forth in the
Prospectus Supplement relating to such series. The Prospectus Supplement
relating to a series of Preferred Stock which is subject to mandatory
redemption shall specify the number of shares of such series that shall be
redeemed by the Company in each year commencing after a date to be
specified, at a redemption price per share to be specified, together with
an amount equal to any accrued and unpaid dividends thereon to the date of
redemption. Except as indicated in the applicable Prospectus Supplement,
the Preferred Stock is not subject to any mandatory redemption at the
option of the holder.
Sinking Fund
- ------------
The Prospectus Supplement for any series of Preferred Stock will state
the terms, if any, of a sinking fund for the purchase or redemption of that
series.
Conversion Rights
- -----------------
The Prospectus Supplement for any series of Preferred Stock will state
the terms, if any, on which shares of that series are convertible into
shares of Common Stock or another series of Preferred Stock. The Preferred
Stock will have no preemptive rights.
Voting Rights
- -------------
Except as indicated in the Prospectus Supplement relating to a
particular series of Preferred Stock, or except as expressly required by
Georgia law, a holder of Preferred Stock will not be entitled to vote.
Except as indicated in the Prospectus Supplement relating to a particular
series of Preferred Stock, in the event the Company issues full shares of
any series of Preferred Stock, each such share will be entitled to one vote
on matters on which holders of such series of Preferred Stock are entitled
to vote.
Transfer Agent and Registrar
- ----------------------------
The transfer agent, registrar and dividend disbursement agent for a
series of Preferred Stock will be selected by the Company and be described
in the applicable Prospectus Supplement. The registrar for shares of
Preferred Stock will send notices to shareholders of any meetings at which
holders of Preferred Stock have the right to vote on any matter.
Outstanding Preferred Stock
- ---------------------------
SERIES A PREFERRED STOCK. The Series A Preferred Stock ranks senior
to the Common Stock, and pari passu with the Series B Preferred Stock and
Series C Preferred Stock, with respect to payment of dividends and amounts
upon liquidation, dissolution or winding-up. Holders of Series A Preferred
Stock are entitled to receive, when, as and if declared by the Board of
Directors of the Company, out of funds legally available for payment,
cumulative cash dividends at the rate per annum of $1.75 per share of
Series A Preferred Stock. Dividends on the Series A Preferred Stock are
payable quarterly in arrears on the last calendar day of March, June,
September and December of each year.
Shares of Series A Preferred Stock are not redeemable by the Company
prior to June 30, 1998, and at no time are the shares of Series A Preferred
Stock redeemable for cash. On and after June 30, 1998, the shares of Series
A Preferred Stock are redeemable at the option of the Company, in whole or
in part, for such number of shares of Common Stock as equals the
liquidation preference of the Series A Preferred Stock to be redeemed
divided by the applicable conversion price as of the opening of business on
the date set for such redemption, subject to adjustment in certain
circumstances. The Company may exercise this option only if for 20 trading
days, within any period of 30 consecutive trading days, including the last
trading day of such period, the closing price of the Common Stock on the
New York Stock Exchange equals or exceeds the conversion price per share,
subject to adjustments in certain circumstances.
The holders of Series A Preferred Stock are entitled to receive in the
event of any liquidation, dissolution or winding-up of the Company, whether
voluntary or involuntary, $25.00 per share of Series A Preferred Stock plus
an amount per share of Series A Preferred Stock equal to all dividends
(whether or not earned or declared) accrued and unpaid thereon to the date
of final distribution to such holders, and no more. Except under certain
circumstances or except as otherwise from time to time required by
applicable law, the holders of Series A Preferred Stock have no voting
rights.
SERIES B PREFERRED STOCK. The Series B Preferred Stock ranks senior
to the Common Stock, and pari passu with the Series A Preferred Stock and
the Series C Preferred Stock, with respect to payment of dividends and
amounts upon liquidation, dissolution or winding-up. Holders of Series B
Preferred Stock are entitled to receive, when, as and if declared by the
Board of Directors of the Company, out of funds legally available for
payment, cumulative cash dividends at the rate per annum of $2.205 per
share of Series B Preferred Stock. Dividends on the Series B Preferred
Stock are payable quarterly in arrears on the last calendar day of March,
June, September and December of each year.
Shares of Series B Preferred Stock are not redeemable by the Company
prior to October 31, 1999, and at no time are the shares of Series B
Preferred Stock redeemable for cash. On and after October 31, 1999, the
shares of Series B Preferred Stock are redeemable at the option of the
Company, in whole or in part, for such number of shares of Common Stock as
equals the liquidation preference of the Series B Preferred Stock to be
redeemed divided by the applicable conversion price as of the opening of
business on the date set for such redemption, subject to adjustment in
certain circumstances. The Company may exercise this option only if for 20
trading days, within any period of 30 consecutive trading days, including
the last trading day of such period, the closing price of the Common Stock
on the New York Stock Exchange equals or exceeds the conversion price per
share, subject to adjustments in certain circumstances.
The holders of Series B Preferred Stock are entitled to receive in the
event of any liquidation, dissolution or winding-up of the Company, whether
voluntary or involuntary, $25.00 per share of Series B Preferred Stock plus
an amount per share of Series B Preferred Stock equal to all dividends
(whether or not earned or declared) accrued and unpaid thereon to the date
of final distribution to such holders, and no more. Except under certain
circumstances or except as otherwise from time to time required by
applicable law, the holders of Series B Preferred Stock have no voting
rights.
SERIES C PREFERRED STOCK. The Series C Preferred Stock ranks senior
to the Common Stock, and pari passu with the Series A Preferred Stock and
the Series B Preferred Stock, with respect to payment of dividends and
amounts upon liquidation, dissolution or winding-up. Holders of Series C
Preferred Stock are entitled to receive, when, as and if declared by the
Board of Directors of the Company, out of funds legally available for
payment, cumulative cash dividends at the rate per annum of $2.15 per share
of Series C Preferred Stock. Dividends on the Series C Preferred Stock are
payable quarterly in arrears on the last calendar day of March, June,
September and December of each year.
Shares of Series C Preferred Stock are not redeemable by the Company
prior to March 31, 2000, and at no time are the shares of Series C
Preferred Stock redeemable for cash. On and after March 31, 2000, the
shares of Series C Preferred Stock are redeemable at the option of the
Company, in whole or in part, for such number of shares of Common Stock as
equals the liquidation preference of the Series C Preferred Stock to be
redeemed divided by the applicable conversion price as of the opening of
business on the date set for such redemption, subject to adjustment in
certain circumstances. The Company may exercise this option only if for 20
trading days, within any period of 30 consecutive trading days, including
the last trading day of such period, the closing price of the Common Stock
on the New York Stock Exchange equals or exceeds the conversion price per
share, subject to adjustments in certain circumstances.
The holders of Series C Preferred Stock are entitled to receive in the
event of any liquidation, dissolution or winding-up of the Company, whether
voluntary or involuntary, $25.00 per share of Series C Preferred Stock plus
an amount per share of Series C Preferred Stock equal to all dividends
(whether or not earned or declared) accrued and unpaid thereon to the date
of final distribution to such holders, and no more. Except under certain
circumstances or except as otherwise from time to time required by
applicable law, the holders of Series C Preferred Stock have no voting
rights.
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue Common Stock Warrants for the purchase of Common
Stock. Common Stock Warrants may be issued independently or together with
any other Offered Securities offered by any Prospectus Supplement and may
be attached to or separate from such Offered Securities. Each series of
Common Stock Warrants will be issued under a separate warrant agreement
(each, a "Warrant Agreement") to be entered into between the Company and a
warrant agent specified in the applicable Prospectus Supplement (the
"Warrant Agent"). The Warrant Agent will act solely as an agent of the
Company in connection with the Common Stock Warrants of such series and
will not assume any obligation or relationship of agency or trust for or
with any holders or beneficial owners of Common Stock Warrants. The
following sets forth certain general terms and provisions of the Common
Stock Warrants offered hereby. Further terms of the Common Stock Warrants
and the applicable Warrant Agreements will be set forth in the applicable
Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of the
Common Stock Warrants in respect of which this Prospectus is being
delivered, including, where applicable, the following: (1) the title of
such Common Stock Warrants; (2) the aggregate number of such Common Stock
Warrants: (3) the price or prices at which such Common Stock Warrants will
be issued; (4) the designation, number and terms of the shares of Common
Stock purchasable upon exercise of such Common Stock Warrants; (5) the
designation and terms of the other Offered Securities with which such
Common Stock Warrants are issued and the number of such Common Stock
Warrants issued with each such Offered Security; (6) the date, if any, on
and after which such Common Stock Warrants and the related Common Stock
will be separately transferable; (7) the price at which each share of
Common Stock purchasable upon exercise of such Common Stock Warrants may be
purchased; (8) the date on which the right to exercise such Common Stock
Warrants shall commence and the date on which such right shall expire; (9)
the minimum or maximum amount of such Common Stock Warrants which may be
exercised at any one time; (10) information with respect to book-entry
procedures, if any; (11) a discussion of certain federal income tax
considerations; and (12) any other terms of such Common Stock Warrants,
including terms, procedures and limitations relating to the exchange and
exercise of such Common Stock Warrants.
DESCRIPTION OF DEPOSITARY SHARES
The Company may, at its option, elect to offer receipts for fractional
interests ("Depositary Shares") in Preferred Stock. In such event, receipts
("Depositary Receipts") for Depositary Shares, each of which will represent
a fraction (to be set forth in the Prospectus Supplement relating to a
particular series of Preferred Stock) of a share of a particular series of
Preferred Stock, will be issued as described below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit
Agreement") between the Company and the depositary named in the Prospectus
Supplement relating to such shares (the "Preferred Stock Depositary").
Subject to the terms of the Deposit Agreement, each owner of a Depositary
Share will be entitled, in proportion to the applicable fraction of a share
of Preferred Stock represented by such Depositary Share, to all the rights
and preferences of the Preferred Stock represented thereby (including
dividend, voting, redemption, subscription and liquidation rights). The
following summary of certain provisions of the Deposit Agreement does not
purport to be complete and is subject to, and is qualified in its entirety
by reference to, all the provisions of the Deposit Agreement, including the
definitions therein of certain terms. Whenever particular sections of the
Deposit Agreement are referred to, it is intended that such sections shall
be incorporated herein by reference. The form of Deposit Agreement is filed
as an exhibit to the Registration Statement of which this Prospectus is a
part, and the following summary is qualified in its entirety by reference
to such exhibit.
The Preferred Stock Depositary will distribute all cash dividends or
other cash distributions received in respect of the Preferred Stock to the
record holders of Depositary Shares relating to such Preferred Stock in
proportion to the numbers of such Depositary Shares owned by such holders.
(Deposit Agreement, Section 4.01)
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares in an equitable manner, unless the Preferred Stock
Depositary determines that it is not feasible to make such distribution, in
which case the Preferred Stock Depositary may sell such property and
distribute the net proceeds from such sale to such holders. (Deposit
Agreement, Section 4.02)
Upon surrender of the Depositary Receipts at the corporate trust
office of the Preferred Stock Depositary and upon payment of the taxes,
charges and fees provided for in the Deposit Agreement and subject to the
terms thereof, the holder of the Depositary Shares evidenced thereby is
entitled to delivery at such office, to or upon his or her order, of the
number of whole shares of the related series of Preferred Stock and any
money or other property, if any, represented by such Depositary Shares.
If a series of Preferred Stock represented by Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the
proceeds received by the Preferred Stock Depositary resulting from the
redemption, in whole or in part, of such series of Preferred Stock held by
the Preferred Stock Depositary. The redemption price per Depositary Share
will be equal to the applicable fraction of the redemption price per share
payable with respect to such series of the Preferred Stock. Whenever the
Company redeems shares of Preferred Stock held by the Preferred Stock
Depositary, the Preferred Stock Depositary will redeem as of the same
redemption date the number of Depositary Shares representing shares of
Preferred Stock so redeemed. If fewer than all the Depositary Shares are
to be redeemed, the Depositary Shares to be redeemed will be selected by
lot, pro rata or by any other equitable method as may be determined by the
Preferred Stock Depositary. (Deposit Agreement, Section 2.08)
Upon receipt of notice of any meeting at which the holders of the
Preferred Stock are entitled to vote, the Preferred Stock Depositary will
mail the information contained in such notice of meeting to the record
holders of the Depositary Shares relating to such Preferred Stock. Each
record holder of such Depositary Shares on the record date (which will be
the same date as the record date for the Preferred Stock) will be entitled
to instruct the Preferred Stock Depositary as to the exercise of the voting
rights pertaining to the amount of the Preferred Stock represented by such
holder's Depositary Shares. The Preferred Stock Depositary will endeavor,
insofar as practicable, to vote the amount of the Preferred Stock
represented by such Depositary Shares in accordance with such instructions,
and the Company will agree to take all reasonable action which may be
deemed necessary by the Preferred Stock Depositary in order to enable the
Preferred Stock Depositary to do so. The Preferred Stock Depositary will
abstain from voting shares of the Preferred Stock to the extent it does not
receive specific instructions from the holder of Depositary Shares
representing such Preferred Stock. (Deposit Agreement, Section 4.05)
The form of Depositary Receipt evidencing the Depositary Shares and
any provision of the Deposit Agreement may at any time be amended by
agreement between the Company and the Preferred Stock Depositary. However,
any amendment which materially and adversely alters the rights of the
holders of Depositary Shares will not be effective unless such amendment
has been approved by the holders of at least a majority of the Depositary
Shares then outstanding. (Deposit Agreement, Section 6.01) The Deposit
Agreement will only terminate if (i) all outstanding Depositary Shares have
been redeemed or (ii) there has been a final distribution in respect of the
Preferred Stock in connection with any liquidation, dissolution or winding-up
of the Company and such distribution has been distributed to the holders
of Depositary Receipts. (Deposit Agreement, Section 6.02)
The Company will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary arrangements.
The Company will pay charges of the Preferred Stock Depositary in
connection with the initial deposit of the Preferred Stock and issuance of
Depositary Receipts, all withdrawals of shares of Preferred Stock by owners
of Depositary Shares and any redemption of the Preferred Stock. Holders of
Depositary Receipts will pay other transfer and other taxes and
governmental charges and such other charges as are expressly provided in
the Deposit Agreement to be for their accounts. (Deposit Agreement,
Section 5.07)
The Preferred Stock Depositary may resign at any time by delivering to
the Company notice of its election to do so, and the Company may at any
time remove the Preferred Stock Depositary, any such resignation or removal
to take effect upon the appointment of a successor Preferred Stock
Depositary and its acceptance of such appointment. Such successor
Preferred Stock Depositary must be appointed within 60 days after delivery
of the notice of resignation or removal and must be a bank or trust company
having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000. (Deposit Agreement, Section
5.04)
The Preferred Stock Depositary will forward to the holders of the
Preferred Stock all reports and communications from the Company which are
delivered to the Preferred Stock Depositary and which the Company is
required or otherwise determines to furnish to such holders. (Deposit
Agreement, Section 4.07)
Neither the Preferred Stock Depositary nor the Company will be liable
under the Deposit Agreement to holders of Depositary Receipts other than
for its negligence, willful misconduct or bad faith. Neither the Company
nor the Preferred Stock Depositary will be obligated to prosecute or defend
any legal proceeding in respect of any Depositary Shares or Preferred Stock
unless satisfactory indemnity is furnished. The Company and the Preferred
Stock Depositary may rely upon written advice of counsel or accountants, or
upon information provided by persons presenting Preferred Stock for
deposit, holders of Depositary Receipts or other persons believed to be
competent and on documents believed to be genuine. (Deposit Agreement,
Section 5.03)
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities to or through underwriters
or may sell the Offered Securities to investors directly or through
designated agents. Any such underwriter or agent involved in the offer and
sale of the Offered Securities will be named in the applicable Prospectus
Supplement.
Underwriters may offer and sell the Offered Securities at a fixed
price or prices, which may be changed, or from time to time at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The Company also may, from time to
time, authorize underwriters acting as agents to offer and sell the Offered
Securities upon the terms and conditions set forth in any Prospectus
Supplement. In connection with the sale of Offered Securities,
underwriters may be deemed to have received compensation from the Company
in the form of underwriting discounts or commissions and may also receive
commissions from purchasers of Offered Securities for whom they may act as
agent. Underwriters may sell Offered Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions
or commissions (which may be changed from time to time) from the
underwriters and from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or
agents in connection with the offering of Offered Securities and any
discounts, concessions or commissions allowed by underwriters to
participating dealers will be set forth in the applicable Prospectus
Supplement. Underwriters, dealers and agents participating in the
distribution of the Offered Securities may be deemed to be underwriters,
and any discounts and commissions received by them and any profit realized
by them on resale of the Offered Securities may be deemed to be
underwriting discounts and commissions, under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Company, to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company
will authorize dealers acting as the Company's agents to solicit offers by
certain institutions to purchase Offered Securities from the Company at the
public offering price set forth in such Prospectus Supplement pursuant to
Delayed Delivery Contracts ("Contracts") providing for payment and delivery
on the date or dates stated in such Prospectus Supplement. Each Contract
will be for an amount not less than, and the principal amount of Offered
Securities sold pursuant to Contracts shall not be less nor more than, the
respective amounts stated in such Prospectus Supplement. Institutions with
which Contracts, when authorized, may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and other institutions, but will in
all cases be subject to the approval of the Company. Contracts will not be
subject to any conditions except (i) the purchase by an institution of the
Offered Securities covered by its Contract shall not at the time of
delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject and (ii) the Company shall have
sold to such underwriters the total principal amount of the Offered
Securities less the principal amount thereof covered by Contracts. A
commission indicated in the Prospectus Supplement will be paid to agents
and underwriters soliciting purchases of Offered Securities pursuant to
Contracts accepted by the Company. Agents and underwriters shall have no
responsibility in respect of the delivery or performance of Contracts.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with, and perform services for, the Company in the
ordinary course of business.
EXPERTS
The audited financial statements and schedules of the Company
incorporated by reference in this Prospectus and elsewhere in the
registration statement of which this Prospectus is a part, have been
audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated
herein in reliance upon the authority of said firm as experts in giving
said reports.
LEGAL OPINIONS
Certain legal opinions relating to tax matters and the Offered
Securities will be passed upon for the Company by Hull, Towill, Norman &
Barrett, P.C., Augusta, Georgia. Certain legal matters relating to the
validity of the Offered Securities will be passed upon for the Underwriters
by Piper & Marbury L.L.P., Baltimore, Maryland. W. Hale Barrett, a member
of the firm of Hull, Towill, Norman & Barrett, P.C., is a director and
secretary of the Company. He and members of his firm own 26,141 shares of
the Company's Common Stock.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is an itemized statement of the estimated amounts of
expenses in connection with the issuance and distribution of the securities
to be registered hereby, other than underwriting discounts and commissions.
<TABLE>
<S> . . . . . . . . . . . . . . . . . . . . . . . . . . <C>
Securities & Exchange Commission registration fee . . . $156,898
Blue Sky fees and expenses. . . . . . . . . . . . . . . .$40,000
Accounting fees and expenses. . . . . . . . . . . . . . $205,000
Legal fees and expenses . . . . . . . . . . . . . . . . $150,000
Trustees' fees and expenses . . . . . . . . . . . . . . .$30,000
Printing and engraving. . . . . . . . . . . . . . . . . $100,000
Transfer Agent Fees . . . . . . . . . . . . . . . . . . .$10,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . $5,000
--------
Total. . . . . . . . . . . . . . . . . . . . . . . $696,898
========
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Registrant's Articles of Incorporation contain the following
provisions:
(a) No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of his duty
of care or other duty as a director, provided that this provision shall
eliminate or limit the liability of a director only to the maximum extent
permitted by the Georgia Business Corporation Code or any successor law.
(b) Any repeal or modification of Section 11 by the shareholders of
the Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or
modification.
The Registrant's By-laws include the following indemnification
provisions:
(a) The corporation shall indemnify any person who was or is
threatened to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (by reason of the fact that he is or was a director of the
corporation (as used in this Article VII, "director" shall have the meaning
set forth in O.C.G.A. (Section 14-2-850(2)), against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, create a presumption that the
person did not act in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
No indemnification under this subsection (a) shall be made:
i) In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the
corporation; or
ii) In connection with any other proceeding in which he was
adjudged liable on the basis that personal benefit was
improperly received by him.
(b) The corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact he is or was a director, against
expenses, (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit, if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation; no indemnification
under this subsection (b) shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation, or is subjected to injunctive relief in favor of the
corporation:
i) For any appropriation, in violation of his duties, of any
business opportunity of the corporation;
ii) For acts or omissions which involve intentional misconduct
or a knowing violation of law;
iii) For the types of liability set forth in Code Section
14-2-832; or
iv) For any transaction from which he received an improper
personal benefit, unless and only to the extent that the
court in which such action or suit was brought shall
determine upon application that, despite adjudication of
liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity
for such expenses which the court shall deem proper (see
amendment to articles of incorporation dated May 3, 1988).
(c) To the extent that a director of the corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraphs (a) and (b) of this Article, or in
defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under paragraphs (a) and (b) of this Article,
unless ordered by a court, shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the director, is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (a) and (b). Such
determination shall be made (1) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if a quorum cannot be obtained under
paragraph (1) of this subsection, by majority vote of a committee duly
designated by the board of directors (in which designation directors who
are parties may participate), consisting solely of two or more directors
not at the time parties to the proceeding; (3) by special legal counsel:
(a) selected by the board of directors of its committee in the manner
prescribed in paragraph (1) or (2) of this subsection; or (b) if a quorum
of the board of directors cannot be obtained under paragraph (1) of this
subsection and a committee cannot be designated under paragraph (2) of this
subsection, selected by majority vote of the full board of directors (in
which selection directors who are parties may participate); or (4) by the
shareholders, but shares owned by or voted under the control of directors
who are at the time parties to the proceeding may not be voted on the
determination; (5) authorization of indemnification or an obligation to
indemnify and evaluation as to reasonableness or expenses shall be made in
the same manner as the determination that indemnification is permissible;
except that if the determination is made by special legal counsel,
authorization or indemnification and evaluation as to reasonableness of
expenses shall be made by those entitled under paragraph (3) above to
select counsel.
(e) Expenses incurred in defending a civil or criminal action, suit
or proceeding may be paid by the corporation in advance of the final
disposition of such action, suit or proceeding only if:
(i) The director furnishes the corporation a written affirmation
of his good faith belief that his conduct does not
constitute behavior of the kind described in subsection (b)
of this Code section; and
(ii) The director furnishes the corporation a written
undertaking, executed personally or on his behalf, to repay
any advances if it is ultimately determined that he is not
entitled to indemnification under this Code section.
(f) If any expenses or other amounts are paid by way of
indemnification, otherwise than by court order or action by the
shareholders or by an insurance carrier pursuant to insurance maintained by
the corporation, the corporation shall, not later than the next annual
meeting of the shareholders, unless such meeting is held within three (3)
months from the date of such payment, and, in any event, within fifteen
(15) months from the date of such payment, send (by personal delivery or
first class mail, or such other means as is authorized by O.C.G.A. Section
14-2-113) to its shareholders of record at the time entitled to vote for
the election of directors, a statement specifying the persons paid, the
amounts paid, and the nature and status at the time of such payment of the
litigation or threatened litigation.
(g) For purposes of this Article, reference to "the corporation"
shall be as defined in Section 14-2-850 O.C.G.A.
(h) The indemnification and advancement of expenses provided by or
granted pursuant to this Article shall, unless otherwise provided when a
director's term is terminated, continue as to a person who has ceased to be
a director, and shall inure to the benefit of the heirs, executors and
administrator of such a person.
Item 16. Exhibits.
1(a) -- Form of Underwriting Agreement for Debt Securities (filed as
Exhibit 1(a) to the Company's Shelf Registration Statement on
Form S-3 filed January 26, 1995, file number 33-57453, and
incorporated by reference herein)
1(b) -- Form of Underwriting Agreement for Common Stock (filed as
Exhibit 1(b) to the Company's Shelf Registration Statement on
Form S-3 filed January 26, 1995, file number 33-57453, and
incorporated by reference herein)
1(c) -- Form of Underwriting Agreement for Common Stock Warrants*
1(d) -- Form of Underwriting Agreement for Preferred Stock (filed as
Exhibit 1(d) to the Company's Shelf Registration Statement on
Form S-3 filed January 26, 1995, file number 33-57453, and
incorporated by reference herein)
1(e) -- Form of Underwriting Agreement for Depositary Shares*
4(a) -- Amended and Restated Articles of Incorporation
4(b) -- Bylaws (filed as Exhibit 3(ii) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1993 and
incorporated by reference herein)
4(c) -- Form of Senior Security filed as a part of Exhibit 4(d) to the
Company's Amendment No. 1 to that Shelf Registration Statement
on Form S-3 filed February 9, 1995, as amended in Amendment
No. 2 filed February 9, 1995, file number 33-57453, and
incorporated by reference herein)
4(d) -- Form of Subordinate Indenture (Form of Subordinate Security
included therein) (filed as Exhibit 4(e) to the Company's
Amendment No. 1 to that Shelf Registration Statement on Form
S-3 filed February 9, 1995, file number 33-57453, and
incorporated by reference herein)
4(e) -- Senior Indenture dated February 1, 1995 (incorporated herein
by reference to Exhibit 4B of the Company's current report on
Form 8-K filed June 23, 1995)
4(f) -- First Supplemental Indenture dated February 1, 1995
(incorporated herein by reference to Exhibit 4C of the
Company's current report on Form 8-K filed June 23, 1995)
4(g) -- Form of Common Stock Certificate (filed as Exhibit 4(f) to the
Company's Shelf Registration Statement on Form S-3 filed
January 26, 1995, file number 33-57453, and incorporated by
reference herein)
4(h) -- Form of Preferred Stock Certificate*
4(i) -- Form of Common Stock Warrant Agreement (filed as Exhibit 4(h)
to the Company's Shelf Registration Statement on Form S-3
filed January 26, 1995, file number 33-57453, and incorporated
by reference herein)
4(j) -- Form of Deposit Agreement (filed as Exhibit 4(i) to the
Company's Shelf Registration Statement on Form S-3 filed
January 26, 1995, file number 33-57453, and incorporated by
reference herein)
5 -- Opinion of Hull, Towill, Norman & Barrett, P.C. as to the
legality of the Offered Securities
12(a) -- Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Dividends
(filed as Exhibit 12(a) to the Company's Shelf Registration
Statement on Form S-3 filed January 26, 1995, file number
33-57453, and incorporated by reference herein)
23(a) -- Consent of Hull, Towill, Norman & Barrett, P.C.
(included in Exhibit 5)
23(b) -- Consent of Arthur Andersen LLP
25(a) -- Statement of Eligibility and Qualification of Senior Trustee
on Form T-1 (filed as Exhibit 25(a) to the Company's Amendment
No. 2 to that Shelf Registration Statement on Form S-3 filed
February 9, 1995, file number 33-57453, and incorporated by
reference herein)
25(b) -- Statement of Eligibility and Qualification of Subordinate
Trustee on Form T-1 (filed as Exhibit 25(b) to the Company's
Amendment No. 2 to that Shelf Registration Statement on Form
S-3 filed February 9, 1995, file number 33-57453, and
incorporated by reference herein)
- ---------
* To be incorporated by reference in connection with the offering of
Offered Securities.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment to
this registration statement (i) to include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the
prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that the undertakings set forth in subparagraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the provisions referred
to under Item 15 hereof, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer, or controlling person of
the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to file an application
for purposes of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Augusta, State of Georgia, on
December 15, 1995.
Merry Land & Investment Company,
Inc.
By: /s/
--------------------------------
As Its President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed, by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Chairman of the Board and December 15, 1995
/s/ Chief Executive Officer
-------------------------
Peter S. Knox III
President and December 15, 1995
/s/ Chief Financial Officer
-------------------------
W. Tennent Houston
/s/ Secretary and Director December 15, 1995
-------------------------
W. Hale Barrett
/s/ Director December 15, 1995
-------------------------
Pierce Merry, Jr.
/s/ Director December 15, 1995
-------------------------
Hugh Calvin Long II
/s/ Controller December 15, 1995
-------------------------
Ronald J. Benton
AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
MERRY LAND & INVESTMENT COMPANY, INC.
-------------------------------------
ARTICLE I
The name of the corporation is "MERRY LAND & INVESTMENT COMPANY, INC."
ARTICLE II
The principal office of said corporation shall be in the City of
Augusta, Richmond County, Georgia, but the corporation shall have the right
to establish branch offices within or without this State whenever a
majority of the Board of Directors may so determine.
ARTICLE III
The object of said corporation is pecuniary gain and profit to its
stockholders.
ARTICLE IV
The general nature of the business to be transacted by the corporation
is to acquire by purchase or lease, or otherwise, lands and interests in
lands and to own, hold, improve, develop and manage any real estate and to
erect or cause to be erected on any lands owned, held or occupied by the
corporation, buildings or other structures with their appurtenances, and to
rebuild, enlarge, alter or improve any buildings or other structures now or
hereafter erected on any lands so owned, held or occupied, and to mortgage,
sell, lease or otherwise dispose of any lands or interests in lands and in
buildings or other structures, and any stores, shops, suites, rooms or
parts of any buildings or other structures at any time owned or held by the
corporation, and to buy, sell, hypothecate and deal in personal property of
all kinds, whether tangible or intangible, and in general to perform such
other businesses as may be approved by the Board of Directors and permitted
under the laws of the State of Georgia.
ARTICLE V
The authorized capital stock of said corporation shall consist of:
(a) 20,000,000 shares of preferred stock, without par
value. The Board of Directors shall have the power to issue the
preferred stock in one or more series, to designate the number of
shares in each series, and to determine the preferences,
limitations and relative rights of the preferred shares and of
one or more series of preferred shares, all before the issuance
of any shares of that series; and
(b) 100,000,000 shares of common stock, without par value.
No holders of any of the shares of stock of whatever class of this
corporation shall be entitled, as such holder, to subscribe for or to have
any preemptive rights with respect to any shares of any class of stock or
other securities which the corporation may issue or sell, whether now or
hereafter authorized.
ARTICLE V-A
Series A Cumulative Convertible Preferred Stock
FIRST: Pursuant to authority expressly vested in the Board of
Directors of the corporation by Article V of the Articles of Incorporation,
as amended (the "Articles"), on June 22, 1993 the Board of Directors duly
divided and classified 4,600,000 shares of the Preferred Stock of the
corporation, without par value, into a class designated as Series A
Cumulative Convertible Preferred Stock, and provided for the issuance of
such Preferred Stock.
SECOND: The terms of the Series A Cumulative Convertible Preferred
Stock established by the Board of Directors, in addition to those set forth
in Article V of the Articles of Incorporation are as follows:
Section 1. NUMBER OF SHARES AND DESIGNATION. This series of
Preferred Stock shall be designated as Series A Cumulative Convertible
Preferred Stock (the "Series A Preferred Stock") and 4,600,000 shall be the
number of shares of Preferred Stock constituting such series.
Section 2. DEFINITIONS. For purposes of the Series A Preferred
Stock, the following terms shall have the meanings indicated:
"Act" shall have the meaning set forth in paragraph (g)
of Section 5 hereof.
"Board of Directors" shall mean the Board of Directors
of the Corporation or any committee authorized by such
Board of Directors to perform any of its
responsibilities with respect to the Series A Preferred
Stock.
"Business Day" shall mean any day other than a
Saturday, Sunday or a day on which state or federally
chartered banking institutions in Augusta, Georgia or
New York, New York are not required to be open.
"Call Date" shall have the meaning set forth in
paragraph (c) of Section 5 hereof.
"Common Stock" shall mean the common stock of the
Corporation, without par value.
"Constituent Person" shall have the meaning set forth
in paragraph (e) of Section 7 hereof.
"Conversion Price" shall mean the conversion price per
share of Common Stock for which the Series A Preferred
Stock is convertible, as such Conversion Price may be
adjusted pursuant to Section 7. The initial conversion
price shall be $18.65 (equivalent to a conversion rate
of 1.34 shares of Common Stock for each share of Series
A Preferred Stock).
"Current Market Price" of publicly traded shares of
common stock or any other class of capital stock or
other security of the Corporation or any other issuer
for any day shall mean the last reported sales price,
regular way on such day, or, if no sale takes place on
such day, the average of the reported closing bid and
asked prices on such day, regular way, in either case
as reported on the New York Stock Exchange ("NYSE") or,
if such security is not listed or admitted for trading
on the NYSE, on the principal national securities
exchange on which such security is listed or admitted
for trading or, if not listed or admitted for trading
on any national securities exchange, on the National
Market System of the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ")
or, if such security is not quoted on such National
Market System, the average of the closing bid and asked
prices on such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for such
security on such day shall not have been reported
through NASDAQ, the average of the bid and asked prices
on such day as furnished by any NYSE member firm
regularly making a market in such security selected for
such purpose by the Chief Executive Officer or the
Board of Directors.
"Dividend Payment Date" shall mean the last calendar
day of March, June, September and December, in each
year, commencing on September 30, 1993; PROVIDED,
HOWEVER, that if any Dividend Payment Date falls on any
day other than a Business Day, the dividend payment due
on such Dividend Payment Date shall be paid on the
Business Day immediately following such Dividend
Payment Date.
"Dividend Periods" shall mean quarterly dividend
periods commencing on January 1, April 1, July 1 and
October 1 of each year and ending on and including the
day preceding the first day of the next succeeding
Dividend Period (other than the initial Dividend
Period, which shall commence on the Issue Date and end
on and include September 30, 1993).
"Fair Market Value" shall mean the average of the daily
Current Market Prices of a share of Common Stock during
the five (5) consecutive Trading Days selected by the
Corporation commencing not more than 20 Trading Days
before, and ending not later than, the earlier of the
day in question and the day before the "ex" date with
respect to the issuance or distribution requiring such
computation. The term "'ex' date," when used with
respect to any issuance or distribution, means the
first day on which the Common Stock trades regular way,
without the right to receive such issuance or
distribution, on the exchange or in the market, as the
case may be, used to determine that day's Current
Market Price.
"Issue Date" shall mean June 30, 1993.
"Junior Stock" shall mean the Common Stock and any
other class or series of shares of the Corporation over
which the Series A Preferred Stock has preference or
priority in the payment of dividends or in the
distribution of assets on any liquidation, dissolution
or winding up of the Corporation.
"Non-Electing Share" shall have the meaning set forth
in paragraph (e) of Section 7 hereof.
"Parity Stock" shall have the meaning set forth in
paragraph (b) of Section 8 hereof.
"Permitted Common Stock Cash Distributions" means cash
dividends and distributions paid after December 31,
1992 not in excess of the Company's cumulative
undistributed net earnings at December 31, 1992, plus
the cumulative amount of funds from operations, as
determined by the Board of Directors on a basis
consistent with the financial reporting practices of
the Corporation, after December 31, 1992, minus the
cumulative amount of dividends accrued or paid on the
Series A Preferred Stock or any other class of
Preferred Stock after the date of this Amendment to the
Articles.
"Person" shall mean any individual, firm, partnership,
corporation or other entity, and shall include any
successor (by merger or otherwise) of such entity.
"Press Release" shall have the meaning set forth in
paragraph (b) of Section 5 hereof.
"Securities" shall have the meaning set forth in
paragraph (d)(iii) of Section 7 hereof.
"Series A Preferred Stock" shall have the meaning set
forth in Section 1 hereof.
"set apart for payment" shall be deemed to include,
without any action other than the following, the
recording by the Corporation in its accounting ledgers
of any accounting or bookkeeping entry which indicates,
pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation
of funds to be so paid on any series or class of
capital stock of the Corporation; PROVIDED, HOWEVER,
that if any funds for any class or series of Junior
Stock or any class or series of stock ranking on a
parity with the Series A Preferred Stock as to the
payment of dividends are placed in a separate account
of the Corporation or delivered to a disbursing, paying
or other similar agent, then "set apart for payment"
with respect to the Series A Preferred Stock shall mean
placing such funds in a separate account or delivering
such funds to a disbursing, paying or other similar
agent.
"Trading Day" shall mean any day on which the
securities in question are traded on the NYSE, or if
such securities are not listed or admitted for trading
on the NYSE, on the principal national securities
exchange on which such securities are listed or
admitted, or if not listed or admitted for trading on
any national securities exchange, on the National
Market System of NASDAQ, or if such securities are not
quoted on such National Market System, in the
applicable securities market in which the securities
are traded.
"Transaction" shall have the meaning set forth in
paragraph (e) of Section 7 hereof.
"Transfer Agent" means First Union National Bank,
Charlotte, North Carolina, or such other agent or
agents of the Corporation as may be designated by the
Board of Directors or their designee as the transfer
agent for the Series A Preferred Stock.
"Voting Preferred Stock" shall have the meaning set
forth in Section 9 hereof.
Section 3. DIVIDENDS. (a) The holders of shares of the Series A
Preferred Stock shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for that purpose,
dividends payable in cash at the rate per annum of $1.75 per share of
Series A Preferred Stock. Such dividends shall be cumulative from the Issue
Date, whether or not in any Dividend Period or Periods there shall be funds
of the Corporation legally available for the payment of such dividends, and
shall be payable quarterly, when, as and if declared by the Board of
Directors, in arrears on Dividend Payment Dates, commencing on the first
Dividend Payment Date after the Issue Date. Each such dividend shall be
payable in arrears to the holders of record of shares of the Series A
Preferred Stock, as they appear on the stock records of the Corporation at
the close of business on such record dates, not more than 60 days preceding
such Dividend Payment Dates thereof, as shall be fixed by the Board of
Directors. Accrued and unpaid dividends for any past Dividend Periods may
be declared and paid at any time, without reference to any regular Dividend
Payment Date, to holders of record on such date, not exceeding 45 days
preceding the payment date thereof, as may be fixed by the Board of
Directors.
(b) The amount of dividends payable for each full Dividend Period for
the Series A Preferred Stock shall be computed by dividing the annual
dividend rate by four. The amount of dividends payable for the initial
Dividend Period, or any other period shorter or longer than a full Dividend
Period, on the Series A Preferred Stock shall be computed on the basis of
twelve 30-day months and a 360-day year. Holders of shares of Series A
Preferred Stock shall not be entitled to any dividends, whether payable in
cash, property or stock, in excess of cumulative dividends, as herein
provided, on the Series A Preferred Stock. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series A Preferred Stock that may be in arrears.
(c) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends, except as described in the immediately following
sentence, shall be declared or paid or set apart for payment on any class
or series of Parity Stock for any period unless full cumulative dividends
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on the Series
A Preferred Stock for all Dividend Periods terminating on or prior to the
Dividend Payment Date on such class or series of Parity Stock. When
dividends are not paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, all dividends declared upon shares of the Series A
Preferred Stock and all dividends declared upon any other class or series
of Parity Stock shall be declared ratably in proportion to the respective
amounts of dividends accumulated and unpaid on the Series A Preferred Stock
and accumulated and unpaid on such Parity Stock.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase
shares of, Junior Stock), shall be declared or paid or set apart for
payment or other distribution declared or made upon Junior Stock, nor shall
Junior Stock be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of shares of Common Stock made
for purposes of an employee incentive or benefit plan of the Corporation or
any subsidiary) for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such
stock) by the Corporation, directly or indirectly (except by conversion
into or exchange for Junior Stock), unless in each case (i) the full
cumulative dividends on all outstanding shares of the Series A Preferred
Stock and any other Parity Stock of the Corporation shall have been paid or
set apart for payment for all past Dividend Periods with respect to the
Series A Preferred Stock and all past dividend periods with respect to such
Parity Stock and (ii) sufficient funds shall have been paid or set apart
for the payment of the dividend for the current Dividend Period with
respect to the Series A Preferred Stock and the current dividend period
with respect to such Parity Stock.
Section 4. LIQUIDATION PREFERENCE. (a) In the event of any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, before any payment or distribution of the assets
of the Corporation (whether capital or surplus) shall be made to or set
apart for the holders of Junior Stock, the holders of the shares of Series
A Preferred Stock shall be entitled to receive Twenty-five Dollars ($25.00)
per share of Series A Preferred Stock plus an amount equal to all dividends
(whether or not earned or declared) accrued and unpaid thereon to the date
of final distribution to such holders; but such holders shall not be
entitled to any further payment. If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of Series A
Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid and liquidating payments on any other shares of any class
or series of Parity Stock, then such assets, or the proceeds thereof, shall
be distributed among the holders of shares of Series A Preferred Stock and
any such other Parity Stock ratably in accordance with the respective
amounts that would be payable on such shares of Series A Preferred Stock
and any such other Parity Stock if all amounts payable thereon were paid in
full. For the purposes of this Section 4, (i) a consolidation or merger of
the Corporation with one or more corporations, (ii) a sale or transfer of
all or substantially all of the Corporation's assets, or (iii) a statutory
share exchange shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of shares of any series or
class or classes of stock ranking on a parity with or prior to the Series A
Preferred Stock upon liquidation, dissolution or winding up, upon any
liquidation, dissolution or winding up of the Corporation, after payment
shall have been made in full to the holders of the Series A Preferred
Stock, as provided in this Section 4, any other series or class or classes
of Junior Stock shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining
to be paid or distributed, and the holders of the Series A Preferred Stock
shall not be entitled to share therein.
Section 5. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) The Series A Preferred Stock shall not be redeemable by the
Corporation prior to June 30, 1998. On and after June 30, 1998, the
Corporation, at its option, may redeem the shares of Series A Preferred
Stock in whole or in part, as set forth herein, subject to the provisions
described below.
(b) The Series A Preferred Stock may be redeemed, in whole or in
part, at the option of the Corporation, at any time, only if for 20 Trading
Days, within any period of 30 consecutive Trading Days, including the last
Trading Day of such period, the Current Market Price of the Common Stock on
each of such 20 Trading Days equals or exceeds the Conversion Price in
effect on such Trading Day. In order to exercise its redemption option,
the Corporation must issue a press release announcing the redemption (the
"Press Release") prior to the opening of business on the second Trading Day
after the condition in the preceding sentence has, from time to time, been
met. The Corporation may not issue a Press Release prior to May 31, 1998.
The Press Release shall announce the redemption and set forth the number of
shares of Series A Preferred Stock which the Corporation intends to redeem.
The Call Date shall be selected by the Corporation, shall be specified in
the notice of redemption and shall be not less than 30 days or more than 60
days after the date on which the Corporation issues the Press Release.
(c) Upon redemption of Series A Preferred Stock by the Corporation on
the date specified in the notice to holders required under subparagraph (e)
of this Section 5 (the "Call Date"), each share of Series A Preferred Stock
so redeemed shall be converted into a number of shares of Common Stock
equal to the liquidation preference (excluding any accrued and unpaid
dividends) of the shares of Series A Preferred Stock being redeemed divided
by the Conversion Price as of the opening of business on the Call Date.
Upon any redemption of Series A Preferred Stock, the Corporation
shall pay any accrued and unpaid dividends in arrears for any Dividend
Period ending on or prior to the Call Date. If the Call Date falls after a
dividend payment record date and prior to the corresponding Dividend
Payment Date, then each holder of Series A Preferred Stock at the close of
business on such dividend payment record date shall be entitled to the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the redemption of such shares before such Dividend Payment
Date. Except as provided above, the Corporation shall make no payment or
allowance for unpaid dividends, whether or not in arrears, on shares of
Series A Preferred Stock called for redemption or on the shares of Common
Stock issued upon such redemption.
(d) If full cumulative dividends on the Series A Preferred Stock and
any other class or series of Parity Stock of the Corporation have not been
paid or declared and set apart for payment, the Series A Preferred Stock
may not be redeemed in part and the Corporation may not purchase or acquire
shares of Series A Preferred Stock, otherwise than pursuant to a purchase
or exchange offer made on the same terms to all holders of shares of Series
A Preferred Stock.
(e) If the Corporation shall redeem shares of Series A Preferred
Stock pursuant to paragraph (a) of this Section 5, notice of such
redemption shall be given not more than four Business Days after the date
on which the Corporation issues the Press Release to each holder of record
of the shares to be redeemed. Such notice shall be provided by first class
mail, postage prepaid, at such holder's address as the same appears on the
stock records of the Corporation, or by publication in THE WALL STREET
JOURNAL or THE NEW YORK TIMES, or if neither such newspaper is then being
published, any other daily newspaper of national circulation. If the
Corporation elects to provide such notice by publication, it shall also
promptly mail notice of such redemption to the holders of the Series A
Preferred Stock to be redeemed. Neither the failure to mail any notice
required by this paragraph (e), nor any defect therein or in the mailing
thereof, to any particular holder, shall affect the sufficiency of the
notice or the validity of the proceedings for redemption with respect to
the other holders. Any notice which was mailed in the manner herein
provided shall be conclusively presumed to have been duly given on the date
mailed whether or not the holder receives the notice. Each such mailed or
published notice shall state, as appropriate: (1) the Call Date; (2) the
number of shares of Series A Preferred Stock to be redeemed and, if fewer
than all the shares held by such holder are to be redeemed, the number of
such shares to be redeemed from such holder; (3) the number of shares of
Common Stock to be issued with respect to each share of Series A Preferred
Stock; (4) the place or places at which certificates for such shares are to
be surrendered for certificates representing shares of Common Stock; (5)
the then-current Conversion Price; and (6) that dividends on the shares to
be redeemed shall cease to accrue on such Call Date except as otherwise
provided herein. Notice having been published or mailed as aforesaid, from
and after the Call Date (unless the Corporation shall fail to make
available a number of shares of Common Stock or amount of cash necessary to
effect such redemption), (i) except as otherwise provided herein, dividends
on the shares of the Series A Preferred Stock so called for redemption
shall cease to accrue, (ii) said shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as holders of
Series A Preferred Stock of the Corporation shall cease (except the rights
to receive the shares of Common Stock and cash payable upon such
redemption, without interest thereon, upon surrender and endorsement of
their certificates if so required and to receive any dividends payable
thereon). The Corporation's obligation to provide shares of Common Stock
and cash in accordance with the preceding sentence shall be deemed
fulfilled if, on or before the Call Date, the Corporation shall deposit
with a bank or trust company (which may be an affiliate of the Corporation)
that has an office in the Borough of Manhattan, City of New York, or in
Charlotte, North Carolina and that has, or is an affiliate of a bank or
trust company that has, a capital and surplus of at least $50,000,000,
shares of Common Stock and any cash necessary for such redemption, in
trust, with irrevocable instructions that such shares of Common Stock and
cash be applied to the redemption of the shares of Series A Preferred Stock
so called for redemption. At the close of business on the Call Date, each
holder of Series A Preferred Stock to be redeemed (unless the Company
defaults in the delivery of the shares of Common Stock or cash payable on
such Call Date) shall be deemed to be the record holder of the number of
shares of Common Stock into which such Series A Preferred Stock is to be
redeemed, regardless of whether such holder has surrendered the
certificates representing the Series A Preferred Stock. No interest shall
accrue for the benefit of the holders of Series A Preferred Stock to be
redeemed on any cash so set aside by the Corporation. Subject to
applicable escheat laws, any such cash unclaimed at the end of two years
from the Call Date shall revert to the general funds of the Corporation,
after which reversion the holders of such shares so called for redemption
shall look only to the general funds of the Corporation for the payment of
such cash.
As promptly as practicable after the surrender in accordance with
said notice of the certificates for any such shares so redeemed (properly
endorsed or assigned for transfer, if the Corporation shall so require and
if the notice shall so state), such shares shall be exchanged for
certificates of shares of Common Stock and any cash (without interest
thereon) for which such shares have been redeemed. If fewer than all the
outstanding shares of Series A Preferred Stock are to redeemed, shares to
be redeemed shall be selected by the Corporation from outstanding shares of
Series A Preferred Stock not previously called for redemption by lot or
pro rata (as nearly as may be) or by any other method determined by the
Corporation in its sole discretion to be equitable. If fewer than all the
shares of Series A Preferred Stock represented by any certificate are
redeemed, then new certificates representing the unredeemed shares shall be
issued without cost to the holder thereof.
(f) No fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon redemption of the Series A Preferred
Stock. Instead of any fractional interest in a share of Common Stock that
would otherwise be deliverable upon the redemption of a share of Series A
Preferred Stock, the Corporation shall pay to the holder of such share an
amount in cash (computed to the nearest cent) based upon the Current Market
Price of Common Stock on the Trading Day immediately preceding the Call
Date. If more than one share shall be surrendered for redemption at one
time by the same holder, the number of full shares of Common Stock issuable
upon redemption thereof shall be computed on the basis of the aggregate
number of shares of Series A Preferred Stock so surrendered.
(g) The Corporation covenants that any shares of Common Stock issued
upon redemption of the Series A Preferred Stock shall be validly issued,
fully paid and non-assessable. The Corporation shall endeavor to list the
shares of Common Stock required to be delivered upon redemption of the
Series A Preferred Stock, prior to such redemption, upon each national
securities exchange, if any, upon which the outstanding Common Stock is
listed at the time of such delivery.
The Corporation shall endeavor to take any action necessary to
ensure that any shares of Common Stock issued upon the redemption of Series
A Preferred Stock are freely transferable and not subject to any resale
restrictions under the Securities Act of 1933, as amended (the "Act"), or
any applicable state securities or blue sky laws (other than any shares of
Common Stock issued upon redemption of any Series A Preferred Stock which
are held by an "affiliate" (as defined in Rule 144 under the Act) of the
Corporation).
Section 6. SHARES TO BE RETIRED.
All shares of Series A Preferred Stock which shall have been issued
and reacquired in any manner by the Corporation shall be restored to the
status of authorized but unissued shares of Preferred Stock, without
designation as to series.
Section 7. CONVERSION.
Holders of shares of Series A Preferred Stock shall have the right to
convert all or a portion of such shares into shares of Common Stock, as
follows:
(a) Subject to and upon compliance with the provisions of this
Section 7, a holder of shares of Series A Preferred Stock shall have the
right, at his or her option, at any time to convert such shares into the
number of fully paid and non-assessable shares of Common Stock obtained by
dividing the aggregate liquidation preference (excluding any accrued and
unpaid dividends) of such shares by the Conversion Price (as in effect at
the time and on the date provided for in the last paragraph of paragraph
(b) of this Section 7 by surrendering such shares to be converted, such
surrender to be made in the manner provided in Section 7 paragraph (b);
PROVIDED, HOWEVER, that the right to convert shares called for redemption
pursuant to Section 5 shall terminate at the close of business on the Call
Date fixed for such redemption, unless the Corporation shall default in
making payment of the shares of Common Stock and any cash payable upon such
redemption under Section 5 hereof.
(b) In order to exercise the conversion right, the holder of each
share of Series A Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Transfer Agent, accompanied
by written notice to the Corporation that the holder thereof elects to
convert such Series A Preferred Stock. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such
share of Series A Preferred Stock is registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid).
Holders of shares of Series A Preferred Stock at the close of
business on a dividend payment record date shall be entitled to receive the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion thereof following such dividend payment
record date and prior to such Dividend Payment Date. However, shares of
Series A Preferred Stock surrendered for conversion during the period
between the close of business on any dividend payment record date and the
opening of business on the corresponding Dividend Payment Date (except
shares converted after the issuance of notice of redemption with respect to
a Call Date during such period, such shares of Series A Preferred Stock
being entitled to such dividend on the Dividend Payment Date) must be
accompanied by payment of an amount equal to the dividend payable on such
shares on such Dividend Payment Date. A holder of shares of Series A
Preferred Stock on a dividend payment record date who (or whose transferee)
tenders any such shares for conversion into shares of Common Stock on such
Dividend Payment Date will receive the dividend payable by the Corporation
on such shares of Series A Preferred Stock on such date, and the converting
holder need not include payment of the amount of such dividend upon
surrender of shares of Series A Preferred Stock for conversion. Except as
provided above, the Corporation shall make no payment or allowance for
unpaid dividends, whether or not in arrears, on converted shares or for
dividends on the shares of Common Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates
for shares of Series A Preferred Stock as aforesaid, the Corporation shall
issue and shall deliver at such office to such holder, or on his or her
written order, a certificate or certificates for the number of full shares
of Common Stock issuable upon the conversion of such shares in accordance
with provisions of this Section 7, and any fractional interest in respect
of a share of Common Stock arising upon such conversion shall be settled as
provided in paragraph (c) of this Section 7.
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates for
shares of Series A Preferred Stock shall have been surrendered and such
notice (and if applicable, payment of an amount equal to the dividend
payable on such shares) received by the Corporation as aforesaid, and the
person or persons in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become the holder or holders of record of the shares
represented thereby at such time on such date and such conversion shall be
at the Conversion Price in effect at such time on such date unless the
stock transfer books of the Corporation shall be closed on that date, in
which event such person or persons shall be deemed to have become such
holder or holders of record at the close of business on the next succeeding
day on which such stock transfer books are open, but such conversion shall
be at the Conversion Price in effect on the date on which such shares shall
have been surrendered and such notice received by the Corporation.
(c) No fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon conversion of the Series A Preferred
Stock. Instead of any fractional interest in a share of Common Stock that
would otherwise be deliverable upon the conversion of a share of Series A
Preferred Stock, the Corporation shall pay to the holder of such share an
amount in cash based upon the Current Market Price of Common Stock on the
Trading Day immediately preceding the date of conversion. If more than one
share shall be surrendered for conversion at one 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 aggregate number of shares of Series
A Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to time as
follows:
(i) If the Corporation shall after the Issue Date (A) pay a
dividend or make a distribution on its capital stock in shares of its
Common Stock, (B) subdivide its outstanding Common Stock into a greater
number of shares, (C) combine its outstanding Common Stock into a smaller
number of shares or (D) issue any shares of capital stock by
reclassification of its Common Stock, the Conversion Price in effect at the
opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or
distribution or at the opening of business on the day following the day on
which such subdivision, combination or reclassification becomes effective,
as the case may be, shall be adjusted so that the holder of any share of
Series A Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock that such holder
would have owned or have been entitled to receive after the happening of
any of the events described above had such shares of Series A Preferred
Stock been converted immediately prior to the record date in the case of a
dividend or distribution or the effective date in the case of a
subdivision, combination or reclassification. An adjustment made pursuant
to this subparagraph (i) shall become effective immediately after the
opening of business on the day next following the record date (except as
provided in paragraph (h) below) in the case of a dividend or distribution
and shall become effective immediately after the opening of business on the
day next following the effective date in the case of a subdivision,
combination or reclassification.
(ii) If the Corporation shall issue after the Issue Date rights,
options or warrants to all holders of Common Stock entitling them (for a
period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase Common Stock at a price per share less than the
Fair Market Value per share of Common Stock on the record date for the
determination of stockholders entitled to receive such rights or warrants,
then the Conversion Price in effect at the opening of business on the day
next following such record date shall be adjusted to equal the price
determined by multiplying (I) the Conversion Price in effect immediately
prior to the opening of business on the day following the date fixed for
such determination by (II) a fraction, the numerator of which shall be the
sum of (A) the number of shares of Common Stock outstanding on the close of
business on the date fixed for such determination and (B) the number of
shares that the aggregate proceeds to the Corporation from the exercise of
such rights or warrants for Common Stock would purchase at such Fair Market
Value, and the denominator of which shall be the sum of (A) the number of
shares of Common Stock outstanding on the close of business on the date
fixed for such determination and (B) the number of additional shares of
Common Stock offered for subscription or purchase pursuant to such rights
or warrants. Such adjustment shall become effective immediately after the
opening of business on the day next following such record date (except as
provided in paragraph (h) below). In determining whether any rights or
warrants entitle the holders of Common Stock to subscribe for or purchase
shares of Common Stock at less than such Fair Market Value, there shall be
taken into account any consideration received by the Corporation upon
issuance and upon exercise of such rights or warrants, the value of such
consideration, if other than cash, to be determined by the Chief Executive
Officer or the Board of Directors.
(iii) If the Corporation shall distribute to all holders of its
Common Stock any shares of capital stock of the Corporation (other than
Common Stock) or evidence of its indebtedness or assets (excluding
Permitted Common Stock Cash Distributions) or rights or warrants to
subscribe for or purchase any of its securities (excluding those rights and
warrants issued to all holders of Common Stock entitling them for a period
expiring within 45 days after the record date referred to in subparagraph
(ii) above to subscribe for or purchase Common Stock, which rights and
warrants are referred to in and treated under subparagraph (ii) above) (any
of the foregoing being hereinafter in this subparagraph (iii) called the
"Securities"), then in each such case the Conversion Price shall be
adjusted so that it shall equal the price determined by multiplying (I) the
Conversion Price in effect immediately prior to the close of business on
the date fixed for the determination of stockholders entitled to receive
such distribution by (II) a fraction, the numerator of which shall be the
Fair Market Value per share of the Common Stock on the record date
mentioned below less the then fair market value (as determined by the Chief
Executive Officer or the Board of Directors, whose determination shall be
conclusive), of the portion of the capital stock or assets or evidences of
indebtedness so distributed or of such rights or warrants applicable to one
share of Common Stock, and the denominator of which shall be the Fair
Market Value per share of the Common Stock on the record date mentioned
below. Such adjustment shall become effective immediately at the opening
of business on the Business Day next following (except as provided in
paragraph (h) below) the record date for the determination of shareholders
entitled to receive such distribution. For the purposes of this clause
(iii), the distribution of a Security, which is distributed not only to the
holders of the Common Stock on the date fixed for the determination of
stockholders entitled to such distribution of such Security, but also is
distributed with each share of Common Stock delivered to a Person
converting a share of Series A Preferred Stock after such determination
date, shall not require an adjustment of the Conversion Price pursuant to
this clause (iii); PROVIDED that on the date, if any, on which a person
converting a share of Series A Preferred Stock would no longer be entitled
to receive such Security with a share of Common Stock (other than as a
result of the termination of all such Securities), a distribution of such
Securities shall be deemed to have occurred and the Conversion Price shall
be adjusted as provided in this clause (iii) and such day shall be deemed
to be "the date fixed for the determination of the stockholders entitled to
receive such distribution" and "the record date" within the meaning of the
two preceding sentences.
(iv) No adjustment in the Conversion Price shall be required
unless such adjustment would require a cumulative increase or decrease of
at least 1% in such price; PROVIDED, HOWEVER, that any adjustments that by
reason of this subparagraph (iv) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment until
made; and PROVIDED, FURTHER, that any adjustment shall be required and made
in accordance with the provisions of this Section 7 (other than this
subparagraph (iv)) not later than such time as may be required in order to
preserve the tax-free nature of a distribution to the holders of shares of
Common Stock. Notwithstanding any other provisions of this Section 7, the
Corporation shall not be required to make any adjustment of the Conversion
Price for the issuance of any shares of Common Stock pursuant to any plan
providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional
amounts in shares of Common Stock under such plan. All calculations under
this Section 7 shall be made to the nearest cent (with $.005 being rounded
upward) or to the nearest one-tenth of a share (with .05 of a share being
rounded upward), as the case may be. Anything in this paragraph (d) to the
contrary notwithstanding, the Corporation shall be entitled, to the extent
permitted by law, to make such reductions in the Conversion Price, in
addition to those required by this paragraph (d), as it in its discretion
shall determine to be advisable in order that any stock dividends,
subdivision of shares, reclassification or combination of shares,
distribution of rights or warrants to purchase stock or securities, or a
distribution of other assets (other than cash dividends) hereafter made by
the Corporation to its stockholders shall not be taxable.
(e) If the Corporation shall be a party to any transaction (including
without limitation a merger, consolidation, statutory share exchange, self
tender offer for all or substantially all shares of Common Stock, sale of
all or substantially all of the Corporation's assets or recapitalization of
the Common Stock and excluding any transaction as to which subparagraph
(d)(i) of this Section 7 applies) (each of the foregoing being referred to
herein as a "Transaction"), in each case as a result of which shares of
Common Stock shall be converted into the right to receive stock, securities
or other property (including cash or any combination thereof), each share
of Series A Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such
Transaction shall thereafter be convertible into the kind and amount of
shares of stock, securities and other property (including cash or any
combination thereof) receivable upon the consummation of such Transaction
by a holder of that number of shares of Common Stock into which one share
of Series A Preferred Stock was convertible immediately prior to such
Transaction, assuming such holder of Common Stock (i) is not a Person with
which the Corporation consolidated or into which the Corporation merged or
which merged into the Corporation or to which such sale or transfer was
made, as the case may be ("Constituent Person"), or an affiliate of a
Constituent Person and (ii) failed to exercise his rights of election, if
any, as to the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction (provided that if the
kind or amount of stock, securities and other property (including cash)
receivable upon such Transaction is not the same for each share of Common
Stock of the Corporation held immediately prior to such Transaction by
other than a Constituent Person or an affiliate thereof and in respect of
which such rights of election shall not have been exercised ("Non-Electing
Share"), then for the purpose of this paragraph (e) the kind and amount of
stock, securities and other property (including cash) receivable upon such
Transaction by each Non-Electing Share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares).
The Corporation shall not be a party to any Transaction unless the terms of
such Transaction are consistent with the provisions of this paragraph (e),
and it shall not consent or agree to the occurrence of any Transaction
until the Corporation has entered into an agreement with the successor or
purchasing entity, as the case may be, for the benefit of the holders of
the Series A Preferred Stock that will contain provisions enabling the
holders of the Series A Preferred Stock that remains outstanding after such
Transaction to convert into the consideration received by holders of Common
Stock at the Conversion Price in effect immediately prior to such
Transaction. The provisions of this paragraph (e) shall similarly apply to
successive Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock (other than Permitted Common Stock Cash
Distributions); or
(ii) the Corporation shall authorize the granting to the holders
of the Common Stock of rights or warrants to subscribe for or purchase any
shares of any class or any other rights or warrants; or
(iii) there shall be any reclassification of the Common Stock
(other than an event to which subparagraph (d)(i) of this Section 7
applies) or any consolidation or merger to which the Corporation is a party
and for which approval of any stockholders of the Corporation is required,
or a statutory share exchange, or a self tender offer by the Company for
all or substantially all of its outstanding shares of Common Stock or the
sale or transfer of all or substantially all of the assets of the
Corporation as an entirety; or
(iv) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation,
then the Corporation shall cause to be filed with the Transfer Agent and
shall cause to be mailed to the holders of shares of the Series A Preferred
Stock at their addresses as shown on the stock records of the Corporation,
as promptly as possible, but at least 15 days prior to the applicable date
hereinafter specified, a notice stating (A) the date on which a record is
to be taken for the purpose of such dividend, distribution or rights or
warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend,
distribution or rights or warrants are to be determined or (B) the date on
which such reclassification, consolidation, merger, statutory share
exchange, sale, transfer, liquidation, dissolution or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, statutory
share exchange, sale, transfer, liquidation, dissolution or winding up.
Failure to give or receive such notice or any defect therein shall not
affect the legality or validity of the proceedings described in this
Section 7.
(g) Whenever the Conversion Price is adjusted as herein provided, the
Corporation shall promptly file with the Transfer Agent an officer's
certificate setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment
which certificate shall be conclusive evidence of the correctness of such
adjustment absent manifest error. Promptly after delivery of such
certificate, the Corporation shall prepare a notice of such adjustment of
the Conversion Price setting forth the adjusted Conversion Price and the
effective date of such adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Price to the holder of each
share of Series A Preferred Stock at such holder's last address as shown on
the stock records of the Corporation.
(h) In any case in which paragraph (d) of this Section 7 provides
that an adjustment shall become effective on the day next following the
record date for an event, the Corporation may defer until the occurrence of
such event (A) issuing to the holder of any share of Series A Preferred
Stock converted after such record date and before the occurrence of such
event the additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above the
Common Stock issuable upon such conversion before giving effect to such
adjustment and (B) paying to such holder any amount of cash in lieu of any
fraction pursuant to paragraph (c) of this Section 7.
(i) There shall be no adjustment of the Conversion Price in case of
the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth
in this Section 7. If any action or transaction would require adjustment
of the Conversion Price pursuant to more than one paragraph of this Section
7, only one adjustment shall be made and such adjustment shall be the
amount of adjustment that has the highest absolute value.
(j) If the Corporation shall take any action affecting the Common
Stock, other than action described in this Section 7, that in the opinion
of the Board of Directors would materially adversely affect the conversion
rights of the holders of the shares of Series A Preferred Stock, the
Conversion Price for the Series A Preferred Stock may be adjusted, to the
extent permitted by law, in such manner, if any, and at such time, as the
Board of Directors, in its sole discretion, may determine to be equitable
in the circumstances.
(k) The Corporation covenants that it will at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued shares of Common Stock, for the purpose of
effecting conversion of the Series A Preferred Stock, the full number of
shares of Common Stock deliverable upon the conversion of all outstanding
shares of Series A Preferred Stock not theretofore converted. For purposes
of this paragraph (k), the number of shares of Common Stock that shall be
deliverable upon the conversion of all outstanding shares of Series A
Preferred Stock shall be computed as if at the time of computation all such
outstanding shares were held by a single holder.
The Corporation covenants that any shares of Common Stock issued
upon conversion of the Series A Preferred Stock shall be validly issued,
fully paid and non-assessable.
The Corporation shall endeavor to list the shares of Common Stock
required to be delivered upon conversion of the Series A Preferred Stock,
prior to such delivery, upon each national securities exchange, if any,
upon which the outstanding Common Stock is listed at the time of such
delivery.
Prior to the delivery of any securities that the Corporation
shall be obligated to deliver upon conversion of the Series A Preferred
Stock, the Corporation shall endeavor to comply with all federal and state
laws and regulations thereunder requiring the registration of such
securities with, or any approval of or consent to the delivery thereof by,
any governmental authority.
(l) The Corporation will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the
Series A Preferred Stock pursuant hereto; PROVIDED, HOWEVER, that the
Corporation shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issue or delivery of shares of
Common Stock or other securities or property in a name other than that of
the holder of the Series A Preferred Stock to be converted, and no such
issue or delivery shall be made unless and until the person requesting such
issue or delivery has paid to the Corporation the amount of any such tax or
established, to the reasonable satisfaction of the Corporation, that such
tax has been paid.
Section 8. RANKING. Any class or series of stock of the Corporation
shall be deemed to rank:
(a) Prior to the Series A Preferred Stock, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to
the holders of Series A Preferred Stock;
(b) On a parity with the Series A Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution
or winding up, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be different from those
of the Series A Preferred Stock, if the holders of such class of stock or
series and the Series A Preferred Stock shall be entitled to the receipt of
dividends and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued and unpaid
dividends per share or liquidation preferences, without preference or
priority one over the other ("Parity Stock"); and
(c) Junior to the Series A Preferred Stock, as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, if such stock or series shall be Common Stock or if the
holders of Series A Preferred Stock shall be entitled to receipt of
dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of
shares of such stock or series.
Section 9. VOTING. If and whenever six quarterly dividends (whether
or not consecutive) payable on the Series A Preferred Stock or any series
or class of Parity Stock shall be in arrears (which shall, with respect to
any such quarterly dividend, mean that any such dividend has not been paid
in full), whether or not earned or declared, the number of directors then
constituting the Board of Directors shall be increased by two and the
holders of shares of Series A Preferred Stock, together with the holders of
shares of every other series of Parity Stock (any such other series, the
"Voting Preferred Stock"), voting as a single class regardless of series,
shall be entitled to elect the two additional directors to serve on the
Board of Directors at any annual meeting of stockholders or special meeting
held in place thereof, or at a special meeting of the holders of the Series
A Preferred Stock and the Voting Preferred Stock called as hereinafter
provided. Whenever all arrears in dividends on the Series A Preferred
Stock and the Voting Preferred Stock then outstanding shall have been paid
and dividends thereon for the current quarterly dividend period shall have
been paid or declared and set apart for payment, then the right of the
holders of the Series A Preferred Stock and the Voting Preferred Stock to
elect such additional two directors shall cease (but subject always to the
same provision for the vesting of such voting rights in the case of any
similar future arrearages in six quarterly dividends), and the terms of
office of all persons elected as directors by the holders of the Series A
Preferred Stock and the Voting Preferred Stock shall forthwith terminate
and the number of the Board of Directors shall be reduced accordingly. At
any time after such voting power shall have been so vested in the holders
of shares of Series A Preferred Stock and the Voting Preferred Stock, the
secretary of the Corporation may, and upon the written request of any
holder of Series A Preferred Stock (addressed to the secretary at the
principal office of the corporation) shall, call a special meeting of the
holders of the Series A Preferred Stock and of the Voting Preferred Stock
for the election of the two directors to be elected by them as herein
provided, such call to be made by notice similar to that provided in the
Bylaws of the Corporation for a special meeting of the stockholders or as
required by law. If any such special meeting required to be called as above
provided shall not be called by the secretary within 20 days after receipt
of any such request, then any holder of shares of Series A Preferred Stock
may call such meeting, upon the notice above provided, and for that purpose
shall have access to the stock books of the Corporation. The directors
elected at any such special meeting shall hold office until the next annual
meeting of the stockholders or special meeting held in lieu thereof if such
office shall not have previously terminated as above provided. If any
vacancy shall occur among the directors elected by the holders of the
Series A Preferred Stock and the Voting Preferred Stock, a successor shall
be elected by the Board of Directors, upon the nomination of the
then-remaining director elected by the holders of the Series A Preferred
Stock and the Voting Preferred Stock or the successor of such remaining
director, to serve until the next annual meeting of the stockholders or
special meeting held in place thereof if such office shall not have
previously terminated as provided above.
So long as any shares of Series A Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders
required by law or by the Articles of Incorporation, as amended, the
affirmative vote of at least 66 2/3% of the votes entitled to be cast by
the holders of the shares of Series A Preferred Stock and the Voting
Preferred Stock, at the time outstanding, acting as a single class
regardless of series, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall
be necessary for effecting or validating:
(a) Any amendment, alteration or repeal of any of the provisions of
the Amendment to the Articles of Incorporation that materially adversely
affects the voting powers, rights or preferences of the holders of the
Series A Preferred Stock or the Voting Preferred Stock; PROVIDED, HOWEVER,
that the amendment of the provisions of the Articles of Incorporation so as
to authorize or create, or to increase the authorized amount of, any Junior
Stock or any shares of any class ranking on a parity with the Series A
Preferred Stock or the Voting Preferred Stock shall not be deemed to
materially adversely affect the voting powers, rights or preferences of the
holders of Series A Preferred Stock, and PROVIDED FURTHER, that if any such
amendment, alteration or repeal would materially adversely affect any
voting powers, rights or preferences of the Series A Preferred Stock or
another series of Voting Preferred Stock that are not enjoyed by some or
all of the other series which otherwise would be entitled to vote in
accordance herewith, the affirmative vote of at least 66 2/3% of the votes
entitled to be cast by the holders of all series similarly affected,
similarly given, shall be required in lieu of the affirmative vote of at
least 66 2/3% of the votes entitled to be cast by the holders of the shares
of Series A Preferred Stock and the Voting Preferred Stock which otherwise
would be entitled to vote in accordance herewith; or
(b) The authorization or creation of, or the increase in the
authorized amount of, any shares of any class or any security convertible
into shares of any class ranking prior to the Series A Preferred Stock in
the distribution of assets on any liquidation, dissolution or winding up of
the Corporation or in the payment of dividends; PROVIDED, HOWEVER, that no
such vote of the holders of Series A Preferred Stock shall be required if,
at or prior to the time when such amendment, alteration or repeal is to
take effect, or when the issuance of any such prior shares or convertible
security is to be made, as the case may be, provision is made for the
redemption of all shares of Series A Preferred Stock at the time
outstanding.
For purposes of the foregoing provisions of this Section 9, each
share of Series A Preferred Stock shall have one (1) vote per share, except
that when any other series of preferred stock shall have the right to vote
with the Series A Preferred Stock as a single class on any matter, then the
Series A Preferred Stock and such other series shall have with respect to
such matters one (1) vote per $25.00 of stated liquidation preference.
Except as otherwise required by applicable law or as set forth herein, the
shares of Series A Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers other
than as set forth herein, and the consent of the holders thereof shall not
be required for the taking of any corporate action.
Section 10. RECORD HOLDERS. The Corporation and the Transfer Agent
may deem and treat the record holder of any shares of Series A Preferred
Stock as the true and lawful owner thereof for all purposes, and neither
the Corporation nor the Transfer Agent shall be affected by any notice to
the contrary.
ARTICLE V-B
Series B Cumulative Convertible Preferred Stock
FIRST: Pursuant to authority expressly vested in the Board of
Directors of the corporation by Article V of the Articles of Incorporation,
as amended (the "Articles"), the Board of Directors on June 22, 1993 duly
divided and classified 4,600,000 shares of the Preferred Stock of the
Corporation, without par value, into a class designated Series A Cumulative
Convertible Preferred Stock (the "Series A Preferred Stock"), and issued
and sold such Series A Preferred Stock.
SECOND: On October 31, 1994, the Board of Directors also duly divided
and classified 4,000,000 shares of Preferred Stock of the corporation,
without par value, into a class of Series B Cumulative Convertible
Preferred Stock and provided for the issuance of such Series B Preferred
Stock.
THIRD: The terms of the Series B Cumulative Convertible Preferred
Stock established by the Board of Directors, in addition to those set forth
in Article V of the Articles of the corporation are as follows:
Section 1. NUMBER OF SHARES AND DESIGNATION. This series of Preferred
Stock shall be designated as Series B Cumulative Convertible Preferred
Stock (the "Series B Preferred Stock") and 4,000,000 shall be the number of
shares of Preferred Stock constituting such series.
Section 2. DEFINITIONS. For purposes of the Series B Preferred Stock,
the following terms shall have the meanings indicated:
"Act" shall mean the Securities Act of 1933, as
amended.
"Board of Directors" shall mean the Board of Directors
of the Corporation or any committee authorized by such
Board of Directors to perform any of its
responsibilities with respect to the Series B Preferred
Stock.
"Business Day" shall mean any day other than a
Saturday, Sunday or a day on which state or federally
chartered banking institutions in New York, New York
are not required to be open.
"Call Date" shall have the meaning set forth in
paragraph (c) of Section 5 hereof.
"Common Stock" shall mean the common stock of the
Corporation, without par value, or such shares of
capital stock into which such shares of Common Stock
shall be reclassified.
"Constituent Person" shall have the meaning set forth
in paragraph (e) of Section 7 hereof.
"Conversion Price" shall mean the conversion price per
share of Common Stock for which the Series B Preferred
Stock is convertible, as such Conversion Price may be
adjusted pursuant to Section 7. The initial conversion
price shall be $21.04 (equivalent to a conversion rate
of 1.188 shares of Common Stock for each share of
Series B Preferred Stock).
"Current Market Price" of publicly traded shares of
common stock or any other class of capital stock or
other security of the Corporation or any other issuer
for any day shall mean the last reported sales price,
regular way on such day, or, if no sale takes place on
such day, the average of the reported closing bid and
asked prices on such day, regular way, in either case
as reported on the New York Stock Exchange ("NYSE") or,
if such security is not listed or admitted for trading
on the NYSE, on the principal national securities
exchange on which such security is listed or admitted
for trading or, if not listed or admitted for trading
on any national securities exchange, on the National
Market System of the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ")
or, if such security is not quoted on such National
Market System, the average of the closing bid and asked
prices on such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for such
security on such day shall not have been reported
through NASDAQ, the average of the bid and asked prices
on such day as furnished by any NYSE member firm
regularly making a market in such security selected for
such purpose by the Chief Executive Officer or the
Board of Directors or if the shares of any class of
securities are not publicly traded, the fair value of
the shares of such class as determined reasonably and
in good faith by the Board of Directors of the
Corporation.
"Dividend Payment Date" shall mean the last calendar
day of March, June, September and December, in each
year, commencing on December 31, 1994; PROVIDED,
HOWEVER, that if any Dividend Payment Date falls on any
day other than a Business Day, the dividend payment due
on such Dividend Payment Date shall be paid on the
Business Day immediately following such Dividend
Payment Date.
"Dividend Periods" shall mean quarterly dividend
periods commencing on January 1, April 1, July 1 and
October 1 of each year and ending on and including the
day preceding the first day of the next succeeding
Dividend Period (other than the initial Dividend
Period, which shall commence on the Issue Date and end
on and include December 31, 1994).
"Fair Market Value" shall mean the average of the daily
Current Market Prices of a share of Common Stock during
five (5) consecutive Trading Days selected by the
Corporation commencing not more than 20 Trading Days
before, and ending not later than, the earlier of the
day in question and the day before the "ex" date with
respect to the issuance or distribution requiring such
computation. The term "'ex' date," when used with
respect to any issuance or distribution, means the
first day on which the Common Stock trades regular way,
without the right to receive such issuance or
distribution, on the exchange or in the market, as the
case may be, used to determine that day's Current
Market Price.
"Issue Date" shall mean November 1, 1994.
"Junior Stock" shall mean the Common Stock and any
other class or series of shares of the Corporation over
which the Series A Preferred Stock and the Series B
Preferred Stock has preference or priority in the
payment of dividends or in the distribution of assets
on any liquidation, dissolution or winding up of the
Corporation.
"Non-Electing Share" shall have the meaning set forth
in paragraph (e) of Section 7 hereof.
"Parity Stock" shall have the meaning set forth in
paragraph (b) of Section 8 hereof.
"Permitted Common Stock Cash Distributions" means cash
dividends and distributions paid after December 31,
1993 not in excess of the Company's cumulative
undistributed net earnings at December 31, 1993, plus
the cumulative amount of funds from operations, as
determined by the Board of Directors on a basis
consistent with the financial reporting practices of
the Corporation, after December 31, 1993, minus the
cumulative amount of dividends accrued or paid on the
Series A Preferred Stock, the Series B Preferred Stock
or any other class of Parity Stock after the date of
this Amendment to the Articles.
"Person" shall mean any individual, firm, partnership,
corporation or other entity, and shall include any
successor (by merger or otherwise) of such entity.
"Press Release" shall have the meaning set forth in
paragraph (b) of Section 5 hereof.
"Securities" shall have the meaning set forth in
paragraph (d)(iii) of Section 7 hereof.
"Series A Preferred Stock" shall mean the $1.75 Series
A Cumulative Convertible Preferred Stock, liquidation
preference $25.00 per share, authorized on June 22,
1993 which is, from time to time, outstanding.
"Series B Preferred Stock" shall have the meaning set
forth in Section 1 hereof.
"set apart for payment" shall be deemed to include,
without any action other than the following, the
recording by the Corporation in its accounting ledgers
of any accounting or bookkeeping entry which indicates,
pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation
of funds to be so paid on any series or class of
capital stock of the Corporation; PROVIDED, HOWEVER,
that if any funds for any class or series of Junior
Stock or any class or series of Parity Stock are placed
in a separate account of the Corporation or delivered
to a disbursing, paying or other similar agent, then
"set apart for payment" with respect to the Series B
Preferred Stock shall mean placing such funds in a
separate account or delivering such funds to a
disbursing, paying or other similar agent.
"Trading Day" shall mean any day on which the
securities in question are traded on the NYSE, or if
such securities are not listed or admitted for trading
on the NYSE, on the principal national securities
exchange on which such securities are listed or
admitted, or if not listed or admitted for trading on
any national securities exchange, on the National
Market System of NASDAQ, or if such securities are not
quoted on such National Market System, in the
applicable securities market in which the securities
are traded.
"Transaction" shall have the meaning set forth in
paragraph (e) of Section 7 hereof.
"Transfer Agent" means First Union National Bank,
Charlotte, North Carolina, or such other U.S. bank with
aggregate capital, surplus and undivided profits, as
shown on its last published report, of at least
$50,000,000 as may be designated by the Board of
Directors or their designee as the transfer agent for
the Series B Preferred Stock.
"Voting Preferred Stock" shall have the meaning set
forth in Section 9 hereof.
Section 3. DIVIDENDS. (a) The holders of shares of the Series B
Preferred Stock shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for that purpose,
dividends payable in cash at the rate per annum of $2.205 per share of
Series B Preferred Stock. Such dividends shall be cumulative from the Issue
Date, whether or not in any Dividend Period or Periods there shall be funds
of the Corporation legally available for the payment of such dividends, and
shall be payable quarterly, when, as and if declared by the Board of
Directors, in arrears, on Dividend Payment Dates, commencing on the first
Dividend Payment Date after the Issue Date. Each such dividend shall be
payable in arrears to the holders of record of shares of the Series B
Preferred Stock, as they appear on the stock records of the Corporation at
the close of business on such record dates, which shall be not more than 60
days preceding such Dividend Payment Dates thereof, as shall be fixed by
the Board of Directors, which record dates shall coincide with the record
dates for the regular quarterly dividends, if any, payable on Common Stock.
Accrued and unpaid dividends for any past Dividend Periods may be declared
and paid at any time, without reference to any regular Dividend Payment
Date, to holders of record on such date, which date shall not precede by
more than 45 days the payment date thereof, as may be fixed by the Board of
Directors.
(b) The amount of dividends payable for each full Dividend Period for
the Series B Preferred Stock shall be computed by dividing the annual
dividend rate by four. The amount of dividends payable for the initial
Dividend Period, or any other period shorter or longer than a full Dividend
Period, on the Series B Preferred Stock shall be computed ratably on the
basis of twelve 30-day months and a 360-day year. Holders of shares of
Series B Preferred Stock shall not be entitled to any dividends, whether
payable in cash, property or stock, in excess of cumulative dividends, as
herein provided, on the Series B Preferred Stock. No interest, or sum of
money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Series B Preferred Stock that may be in arrears.
(c) So long as any shares of the Series B Preferred Stock are
outstanding, no dividends, except as described in the immediately following
sentence, shall be declared or paid or set apart for payment by the Company
or other distribution of cash or other property declared or made directly
or indirectly by the Company or any affiliate or any person acting on
behalf of the Company or any of its affiliates with respect to any class or
series of Parity Stock for any period unless full cumulative dividends have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on the Series
B Preferred Stock for all Dividend Periods terminating on or prior to the
Dividend Payment Date on such class or series of Parity Stock. When
dividends are not paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, all dividends declared upon shares of the Series B
Preferred Stock and all dividends declared upon any other class or series
of Parity Stock shall be declared ratably in proportion to the respective
amounts of dividends accumulated and unpaid on the Series B Preferred Stock
and accumulated and unpaid on such Parity Stock.
(d) So long as any shares of the Series B Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in
shares of Junior Stock), shall be declared or paid or set apart for payment
by the Company or other distribution of cash or other property declared or
made directly or indirectly by the Company or any affiliate or any person
acting on behalf of the Company or any of its affiliates with respect to
Junior Stock, nor shall Junior Stock be redeemed, purchased or otherwise
acquired (other than a redemption, purchase or other acquisition of shares
of Common Stock made for purposes of an employee incentive or benefit plan
of the Corporation or any subsidiary) for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption of any
shares of any such stock) directly or indirectly by the Company or any
affiliate or any person acting on behalf of the Company or any of its
affiliates (except by conversion into or exchange for Junior Stock), nor
shall any other cash or other property otherwise be paid or distributed to
or for the benefit of any holder of Junior Stock in respect thereof,
directly or indirectly, by the Company or any affiliate or any person
acting on behalf of the Company or any of its affiliates unless in each
case (i) the full cumulative dividends on all outstanding shares of the
Series B Preferred Stock and any other Parity Stock of the Corporation
shall have been paid or set apart for payment for all past Dividend Periods
with respect to the Series B Preferred Stock and all past dividend periods
with respect to such Parity Stock and (ii) sufficient funds shall have been
paid or set apart for the payment of the dividend for the current Dividend
Period with respect to the Series B Preferred Stock and the current
dividend period with respect to such Parity Stock.
Section 4. LIQUIDATION PREFERENCE. (a) In the event of any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, before any payment or distribution of the assets
of the Corporation (whether capital or surplus) shall be made to or set
apart for the holders of Junior Stock, the holders of the shares of Series
B Preferred Stock shall be entitled to receive Twenty-five Dollars ($25.00)
per share of Series B Preferred Stock plus an amount equal to all dividends
(whether or not earned or declared) accrued and unpaid thereon to the date
of final distribution to such holders; but such holders shall not be
entitled to any further payment. If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of Series B
Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid and liquidating payments on any other shares of any class
or series of Parity Stock, then such assets, or the proceeds thereof, shall
be distributed among the holders of shares of Series B Preferred Stock and
any such other Parity Stock ratably in accordance with the respective
amounts that would be payable on such shares of Series B Preferred Stock
and any such other Parity Stock if all amounts payable thereon were paid in
full. For the purposes of this Section 4, (i) a consolidation or merger of
the Corporation with one or more corporations, (ii) a sale or transfer of
all or substantially all of the Corporation's assets, or (iii) a statutory
share exchange shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of shares of any Parity
Stock, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the Series B
Preferred Stock and any Parity Stock, as provided in this Section 4, any
other series or class or classes of Junior Stock shall, subject to the
respective terms thereof, be entitled to receive any and all assets
remaining to be paid or distributed, and the holders of the Series B
Preferred Stock and any Parity Stock shall not be entitled to share
therein.
Section 5. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) The Series B Preferred Stock shall not be redeemable by the
Corporation prior to October 31, 1999. On and after October 31, 1999, the
Corporation, at its option, may redeem the shares of Series B Preferred
Stock in whole or in part, as set forth herein, subject to the provisions
described below.
(b) The Series B Preferred Stock may be redeemed, in whole or in
part, at the option of the Corporation, at any time, only if for 20 Trading
Days, within any period of 30 consecutive Trading Days, including the last
Trading Day of such period, the Current Market Price of the Common Stock on
each of such 20 Trading Days equals or exceeds the Conversion Price in
effect on such Trading Day. In order to exercise its redemption option,
the Corporation must issue a press release announcing the redemption (the
"Press Release") prior to the opening of business on the second Trading Day
after the condition in the preceding sentence has, from time to time, been
met. The Corporation may not issue a Press Release prior to October 1,
1999. The Press Release shall announce the redemption and set forth the
number of shares of Series B Preferred Stock which the Corporation intends
to redeem.
(c) Upon redemption of Series B Preferred Stock by the Corporation on
the date specified in the notice to holders required under subparagraph (e)
of this Section 5 (the "Call Date"), each share of Series B Preferred Stock
so redeemed shall be converted into a number of shares of Common Stock
equal to the liquidation preference (excluding any accrued and unpaid
dividends) of the shares of Series B Preferred Stock being redeemed divided
by the Conversion Price as in effect as of the opening of business on the
Call Date. The Call Date shall be selected by the Corporation, shall be
specified in the notice of redemption and shall be not less than 30 days or
more than 60 days after the date on which the Corporation issues the Press
Release.
Upon any redemption of Series B Preferred Stock, the Corporation
shall pay any accrued and unpaid dividends in arrears for any Dividend
Period ending on or prior to the Call Date. If the Call Date falls after a
dividend payment record date and prior to the corresponding Dividend
Payment Date, then each holder of Series B Preferred Stock at the close of
business on such dividend payment record date shall be entitled to the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the redemption of such shares before such Dividend Payment
Date. Except as provided above, the Corporation shall make no payment or
allowance for unpaid dividends, whether or not in arrears, on shares of
Series B Preferred Stock called for redemption or on the shares of Common
Stock issued upon such redemption.
(d) If full cumulative dividends on the Series B Preferred Stock and
any other class or series of Parity Stock of the Corporation have not been
paid or declared and set apart for payment, the Series B Preferred Stock
may not be redeemed in part and the Corporation or any subsidiary may not
purchase or acquire shares of Series B Preferred Stock, otherwise than
pursuant to a purchase or exchange offer made on the same terms to all
holders of shares of Series B Preferred Stock.
(e) If the Corporation shall redeem shares of Series B Preferred
Stock pursuant to paragraph (a) of this Section 5, notice of such
redemption shall be given not more than four Business Days after the date
on which the Corporation issues the Press Release to each holder of record
of the shares to be redeemed. Such notice shall be provided by first class
mail, postage prepaid, at such holder's address as the same appears on the
stock records of the Corporation, or by publication in THE WALL STREET
JOURNAL or THE NEW YORK TIMES, or if neither such newspaper is then being
published, any other daily newspaper of national circulation. If the
Corporation elects to provide such notice by publication, it shall also
promptly mail notice of such redemption to the holders of the Series B
Preferred Stock to be redeemed. Neither the failure to mail any notice
required by this paragraph (e), nor any defect therein or in the mailing
thereof, to any particular holder, shall affect the sufficiency of the
notice or the validity of the proceedings for redemption with respect to
the other holders. Any notice which was mailed in the manner herein
provided shall be conclusively presumed to have been duly given on the date
mailed whether or not the holder receives the notice. Each such mailed or
published notice shall state, as appropriate: (1) the Call Date; (2) the
number of shares of Series B Preferred Stock to be redeemed and, if fewer
than all such shares held by such holder are to be redeemed, the number of
such shares to be redeemed from such holder; (3) the number of shares of
Common Stock to be issued with respect to each share of Series B Preferred
Stock; (4) the place or places at which certificates for such shares are to
be surrendered for certificates representing shares of Common Stock; (5)
the then-current Conversion Price; and (6) that dividends on the shares to
be redeemed shall cease to accrue on such Call Date except as otherwise
provided herein. Notice having been published or mailed as aforesaid, from
and after the Call Date (unless the Corporation shall fail to issue and
make available a number of shares of Common Stock or amount of cash
necessary to effect such redemption), (i) except as otherwise provided
herein, dividends on the shares of the Series B Preferred Stock so called
for redemption shall cease to accrue, (ii) said shares shall no longer be
deemed to be outstanding, and (iii) all rights of the holders thereof as
holders of Series B Preferred Stock of the Corporation shall cease (except
the rights to receive the shares of Common Stock and cash payable upon such
redemption, without interest thereon, upon surrender and endorsement of
their certificates if so required and to receive any dividends payable
thereon). The Corporation's obligation to provide shares of Common Stock
and cash in accordance with the preceding sentence shall be deemed
fulfilled if, on or before the Call Date, the Corporation shall deposit
with a bank or trust company (which may be an affiliate of the Corporation)
that has an office in the Borough of Manhattan, The City of New York, or in
Charlotte, North Carolina and that has, or is an affiliate of a bank or
trust company that has, a capital and surplus of at least $50,000,000,
shares of Common Stock and such amount of cash as is necessary for such
redemption, in trust, with irrevocable instructions that such shares of
Common Stock and cash be applied to the redemption of the shares of Series
B Preferred Stock so called for redemption. At the close of business on
the Call Date, each holder of Series B Preferred Stock to be redeemed
(unless the Company defaults in the delivery of the shares of Common Stock
or cash payable on such Call Date) shall be deemed to be the record holder
of the number of shares of Common Stock into which such Series B Preferred
Stock is to be redeemed, regardless of whether such holder has surrendered
the certificates representing the Series B Preferred Stock. No interest
shall accrue for the benefit of the holders of Series B Preferred Stock to
be redeemed on any cash so set aside by the Corporation. Subject to
applicable escheat laws, any such cash unclaimed at the end of two years
from the Call Date shall revert to the general funds of the Corporation,
after which reversion the holders of such shares so called for redemption
shall look only to the general funds of the Corporation for the payment of
such cash.
As promptly as practicable after the surrender in accordance with
said notice of the certificates for any such shares so redeemed (properly
endorsed or assigned for transfer, if the Corporation shall so require and
if the notice shall so state), such certificates shall be exchanged for
certificates of shares of Common Stock and any cash (without interest
thereon) for which such shares have been redeemed. If fewer than all the
outstanding shares of Series B Preferred Stock are to redeemed, shares to
be redeemed shall be selected by the Corporation from outstanding shares of
Series B Preferred Stock not previously called for redemption by lot or pro
rata (as nearly as may be). If fewer than all the shares of Series B
Preferred Stock represented by any certificate are redeemed, then new
certificates representing the unredeemed shares shall be issued without
cost to the holders thereof.
(f) Fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon redemption of the Series B Preferred
Stock. Instead of any fractional interest in a share of Common Stock that
would otherwise be deliverable upon the redemption of a share of Series B
Preferred Stock, the Corporation shall pay to the holder of such share an
amount in cash (computed to the nearest cent) based upon the Current Market
Price of Common Stock on the Trading Day immediately preceding the Call
Date. If more than one share shall be surrendered for redemption at one
time by the same holder, the number of full shares of Common Stock issuable
upon redemption thereof shall be computed on the basis of the aggregate
number of shares of Series B Preferred Stock so surrendered.
(g) The Corporation covenants that any shares of Common Stock issued
upon redemption of the Series B Preferred Stock shall be validly issued,
fully paid and non-assessable. The Corporation shall endeavor to list the
shares of Common Stock required to be delivered upon redemption of the
Series B Preferred Stock, prior to such redemption, upon each national
securities exchange, if any, upon which the outstanding Common Stock is
listed at the time of such delivery.
The Corporation shall endeavor to take any action necessary to
ensure that any shares of Common Stock issued upon the redemption of Series
B Preferred Stock are transferable and not subject to any resale
restrictions under the Act, or any applicable state securities or blue sky
laws except the provisions of Rule 144 under the Act.
Section 6. SHARES TO BE RETIRED.
All shares of Series B Preferred Stock which shall have been issued
and reacquired in any manner by the Corporation shall be restored to the
status of authorized but unissued shares of Preferred Stock, without
designation as to series.
Section 7. CONVERSION.
Shares of Series B Preferred Stock shall not be convertible prior to
April 30, 1995. On or after such date holders of shares of Series B
Preferred Stock shall have the right to convert all or a portion of such
shares into authorized but unissued shares of Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of this
Section 7, a holder of shares of Series B Preferred Stock shall have the
right, at his or her option, at any time to convert such shares into the
number of fully paid and non-assessable shares of Common Stock obtained by
dividing the aggregate liquidation preference (excluding any accrued and
unpaid dividends) of such shares by the Conversion Price (as in effect at
the time and on the date provided for in the last paragraph of paragraph
(b) of this Section 7) by surrendering such shares to be converted, such
surrender to be made in the manner provided in Section 7 paragraph (b);
PROVIDED, HOWEVER, that the right to convert shares of Series B Preferred
Stock called for redemption pursuant to Section 5 shall terminate at the
close of business on the Call Date fixed for such redemption, unless the
Corporation shall default in making payment of the shares of Common Stock
and any cash payable upon such redemption under Section 5 hereof.
(b) In order to exercise the conversion right, the holder of each
share of Series B Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Transfer Agent, accompanied
by written notice to the Corporation that the holder thereof elects to
convert such Series B Preferred Stock. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such
share of Series B Preferred Stock is registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid).
Holders of shares of Series B Preferred Stock at the close of
business on a dividend payment record date shall be entitled to receive the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion thereof following such dividend payment
record date and prior to such Dividend Payment Date. Except as provided
above, the Corporation shall make no payment or allowance for unpaid
dividends, whether or not in arrears, on converted shares or for dividends
on the shares of Common Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates
for shares of Series B Preferred Stock as aforesaid, the Corporation shall
issue and shall deliver at such office to such holder, or send on his or
her written order, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such shares in
accordance with provisions of this Section 7, and any fractional interest
in respect of a share of Common Stock arising upon such conversion shall be
settled as provided in paragraph (c) of this Section 7.
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates for
shares of Series B Preferred Stock shall have been surrendered and such
notice (and if applicable, payment of an amount equal to the dividend
payable on such shares) received by the Corporation as aforesaid, and the
person or persons in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become the holder or holders of record of the shares
represented thereby at such time on such date and such conversion shall be
at the Conversion Price in effect at such time on such date.
(c) No fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon conversion of the Series B Preferred
Stock. Instead of any fractional interest in a share of Common Stock that
would otherwise be deliverable upon the conversion of a share of Series B
Preferred Stock, the Corporation shall pay to the holder of such share an
amount in cash based upon the Current Market Price of Common Stock on the
Trading Day immediately preceding the date of conversion. If more than one
share shall be surrendered for conversion at one 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 aggregate number of shares of Series
B Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to time as
follows:
(i) If the Corporation shall after the Issue Date (A) pay a
dividend or make a distribution on its capital stock in shares of its
Common Stock, (B) subdivide its outstanding Common Stock into a greater
number of shares, (C) combine its outstanding Common Stock into a smaller
number of shares or (D) issue any shares of capital stock by
reclassification of its Common Stock, the Conversion Price in effect at the
opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or
distribution or at the opening of business on the day following the day on
which such subdivision, combination or reclassification becomes effective,
as the case may be, shall be adjusted so that the holder of any share of
Series B Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock that such holder
would have owned or have been entitled to receive after the happening of
any of the events described above had such shares of Series B Preferred
Stock been converted immediately prior to the record date in the case of a
dividend or distribution or the effective date in the case of a
subdivision, combination or reclassification. An adjustment made pursuant
to this subparagraph (i) shall become effective immediately after the
opening of business on the day next following the record date (except as
provided in paragraph (h) below) in the case of a dividend or distribution
and shall become effective immediately after the opening of business on the
day next following the effective date in the case of a subdivision,
combination or reclassification.
(ii) If the Corporation shall issue after the Issue Date rights,
options or warrants to all holders of Common Stock entitling them (for a
period expiring within 45 days after the record date described below in
this subparagraph 7(d)(ii)) to subscribe for or purchase Common Stock at a
price per share less than the Fair Market Value per share of Common Stock
on the record date for the determination of stockholders entitled to
receive such rights or warrants, then the Conversion Price in effect at the
opening of business on the day next following such record date shall be
adjusted to equal the price determined by multiplying (I) the Conversion
Price in effect immediately prior to the opening of business on the day
following the date fixed for such determination by (II) a fraction, the
numerator of which shall be the sum of (A) the number of shares of Common
Stock outstanding on the close of business on the date fixed for such
determination and (B) the number of shares that the aggregate proceeds to
the Corporation from the exercise of such rights or warrants for Common
Stock would purchase at such Fair Market Value, and the denominator of
which shall be the sum of (A) the number of shares of Common Stock
outstanding on the close of business on the date fixed for such
determination and (B) the number of additional shares of Common Stock
offered for subscription or purchase pursuant to such rights or warrants.
Such adjustment shall become effective immediately after the opening of
business on the day next following such record date (except as provided in
paragraph (h) below). In determining whether any rights or warrants
entitle the holders of Common Stock to subscribe for or purchase shares of
Common Stock at less than such Fair Market Value, there shall be taken into
account any consideration received by the Corporation upon issuance and
upon exercise of such rights or warrants, the value of such consideration,
if other than cash, to be determined in good faith by the Board of
Directors.
(iii) If the Corporation shall distribute to all holders of its
Common Stock any shares of capital stock of the Corporation (other than
Common Stock) or evidence of its indebtedness or assets (excluding
Permitted Common Stock Cash Distributions) or rights or warrants to
subscribe for or purchase any of its securities (excluding those rights and
warrants issued to all holders of Common Stock entitling them for a period
expiring within 45 days after the record date referred to in subparagraph
(ii) above to subscribe for or purchase Common Stock, which rights and
warrants are referred to in and treated under subparagraph (ii) above) (any
of the foregoing being hereinafter in this subparagraph (iii) called the
"Securities"), then in each such case the Conversion Price shall be
adjusted so that it shall equal the price determined by multiplying (I) the
Conversion Price in effect immediately prior to the close of business on
the date fixed for the determination of stockholders entitled to receive
such distribution by (II) a fraction, the numerator of which shall be the
Fair Market Value per share of the Common Stock on the record date
mentioned below less the then fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a
Board resolution), of the portion of the capital stock or assets or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock, and the denominator of which shall
be the Fair Market Value per share of the Common Stock on the record date
mentioned below. Such adjustment shall become effective immediately at the
opening of business on the Business Day next following (except as provided
in paragraph (h) below) the record date for the determination of
shareholders entitled to receive such distribution. For the purposes of
this clause (iii), the distribution of a Security, which is distributed not
only to the holders of the Common Stock on the date fixed for the
determination of stockholders entitled to such distribution of such
Security, but also is distributed with each share of Common Stock delivered
to a Person converting a share of Series B Preferred Stock after such
determination date, shall not require an adjustment of the Conversion Price
pursuant to this clause (iii); PROVIDED that on the date, if any, on which
a person converting a share of Series B Preferred Stock would no longer be
entitled to receive such Security with a share of Common Stock (other than
as a result of the termination of all such Securities), a distribution of
such Securities shall be deemed to have occurred and the Conversion Price
shall be adjusted as provided in this clause (iii) and such day shall be
deemed to be "the date fixed for the determination of the stockholders
entitled to receive such distribution" and "the record date" within the
meaning of the two preceding sentences.
(iv) No adjustment in the Conversion Price shall be required
unless such adjustment would require a cumulative increase or decrease of
at least 1% in such price; PROVIDED, HOWEVER, that any adjustments that by
reason of this subparagraph (iv) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment until
made; and PROVIDED, FURTHER, that any adjustment shall be required and made
in accordance with the provisions of this Section 7 (other than this
subparagraph (iv)) not later than such time as may be required in order to
preserve the tax-free nature of a distribution to the holders of shares of
Common Stock. Notwithstanding any other provisions of this Section 7, the
Corporation shall not be required to make any adjustment of the Conversion
Price for the issuance of any shares of Common Stock pursuant to any plan
providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional
amounts in shares of Common Stock under such plan. All calculations under
this Section 7 shall be made to the nearest cent (with $.005 being rounded
upward) or to the nearest one-tenth of a share (with .05 of a share being
rounded upward), as the case may be. Anything in this paragraph (d) to the
contrary notwithstanding, the Corporation shall be entitled, to the extent
permitted by law, to make such reductions in the Conversion Price, in
addition to those required by this paragraph (d), as it in its discretion
shall determine to be advisable in order that any stock dividends,
subdivision of shares, reclassification or combination of shares,
distribution of rights or warrants to purchase stock or securities, or a
distribution of other assets (other than cash dividends) hereafter made by
the Corporation to its stockholders shall not be taxable, or if that is not
possible, to diminish any income taxes that are otherwise payable because
of such event.
(e) If the Corporation shall be a party to any transaction (including
without limitation a merger, consolidation, statutory share exchange, self
tender offer for all or a substantial portion of its shares of Common
Stock, sale of all or substantially all of the Corporation's assets or
recapitalization of the Common Stock and excluding any transaction as to
which subparagraph (d)(i) of this Section 7 applies) (each of the foregoing
being referred to herein as a "Transaction"), in each case as a result of
which shares of Common Stock shall be converted into the right to receive
stock, securities or other property (including cash or any combination
thereof), each share of Series B Preferred Stock which is not converted
into the right to receive stock, securities or other property in connection
with such Transaction shall thereupon be convertible into the kind and
amount of shares of stock, securities and other property (including cash or
any combination thereof) receivable upon such consummation by a holder of
that number of shares of Common Stock into which one share of Series B
Preferred Stock was convertible immediately prior to such Transaction,
assuming such holder of Common Stock (i) is not a Person with which the
Corporation consolidated or into which the Corporation merged or which
merged into the Corporation or to which such sale or transfer was made, as
the case may be ("Constituent Person"), or an affiliate of a Constituent
Person and (ii) failed to exercise his rights of election, if any, as to
the kind or amount of stock, securities and other property (including cash)
receivable upon such Transaction (provided that if the kind or amount of
stock, securities and other property (including cash) receivable upon such
Transaction is not the same for each share of Common Stock of the
Corporation held immediately prior to such Transaction by other than a
Constituent Person or an affiliate thereof and in respect of which such
rights of election shall not have been exercised ("Non-Electing Share"),
then for the purpose of this paragraph (e) the kind and amount of stock,
securities and other property (including cash) receivable upon such
Transaction by each Non-Electing Share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares).
The Corporation shall not be a party to any Transaction unless the terms of
such Transaction are consistent with the provisions of this paragraph (e),
and it shall not consent or agree to the occurrence of any Transaction
until the Corporation has entered into an agreement with the successor or
purchasing entity, as the case may be, for the benefit of the holders of
the Series B Preferred Stock that will contain provisions enabling the
holders of the Series B Preferred Stock that remains outstanding after such
Transaction to convert into the consideration received by holders of Common
Stock at the Conversion Price in effect immediately prior to such
Transaction. The provisions of this paragraph (e) shall similarly apply to
successive Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock (other than Permitted Common Stock Cash
Distributions); or
(ii) the Corporation shall authorize the granting to the holders
of the Common Stock of rights or warrants to subscribe for or purchase any
shares of any class or any other rights or warrants; or
(iii) there shall be any reclassification of the Common Stock or
any consolidation or merger to which the Corporation is a party and for
which approval of any stockholders of the Corporation is required, or a
statutory share exchange, or a self tender offer by the Company for all or
a substantial portion of its outstanding shares of Common Stock (or an
amendment thereto changing the maximum number of shares sought or the
amount or type of consideration being offered therefor) or the sale or
transfer of all or substantially all of the assets of the Corporation as an
entirety; or
(iv) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, then the Corporation shall
cause to be filed with the Transfer Agent and shall cause to be mailed to
the holders of shares of the Series B Preferred Stock at their addresses as
shown on the stock records of the Corporation, as promptly as possible, but
at least 15 days prior to the applicable date hereinafter specified, a
notice stating (A) the record date for the payment of such dividend,
distribution or rights or warrants, or, if a record date is not
established, the date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution or rights or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution
or winding up is expected to become effective, and the date as of which it
is expected that holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other property, if
any, deliverable upon such reclassification, consolidation, merger,
statutory share exchange, sale, transfer, liquidation, dissolution or
winding up or (C) the date on which such tender offer commenced, the date
on which such tender offer is scheduled to expire unless extended, the
consideration offered and the other material terms thereof (or the material
terms of any amendment thereto). Failure to give or receive such notice or
any defect therein shall not affect the legality or validity of the
proceedings described in this Section 7.
(g) Whenever the Conversion Price is adjusted as herein provided, the
Corporation shall promptly file with the Transfer Agent an officer's
certificate setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment
which certificate shall be conclusive evidence of the correctness of such
adjustment absent manifest error. Promptly after delivery of such
certificate, the Corporation shall prepare a notice of such adjustment of
the Conversion Price setting forth the adjusted Conversion Price and the
effective date of such adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Price to the holder of each
share of Series B Preferred Stock at such holder's last address as shown on
the stock records of the Corporation.
(h) In any case in which paragraph (d) of this Section 7 provides
that an adjustment shall become effective on the day next following the
record date for an event, the Corporation may defer until the occurrence of
such event (A) issuing to the holder of any share of Series B Preferred
Stock converted after such record date and before the occurrence of such
event the additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above the
Common Stock issuable upon such conversion before giving effect to such
adjustment and (B) paying to such holder any amount of cash in lieu of any
fraction pursuant to paragraph (c) of this Section 7.
(i) There shall be no adjustment of the Conversion Price in case of
the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth
in this Section 7. If any action or transaction would require adjustment
of the Conversion Price pursuant to more than one paragraph of this Section
7, only one adjustment shall be made and such adjustment shall be the
amount of adjustment that has the highest absolute value.
(j) If the Corporation shall take any action affecting the Common
Stock, other than action described in this Section 7, that in the opinion
of the Board of Directors would materially adversely affect the conversion
rights of the holders of the shares of Series B Preferred Stock, the
Conversion Price for the Series B Preferred Stock may be adjusted, to the
extent permitted by law, in such manner, if any, and at such time, as the
Board of Directors, in its sole discretion, may determine to be equitable
in the circumstances.
(k) The Corporation will at all times reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but
unissued shares of Common Stock, solely for the purpose of effecting
conversion of the Series B Preferred Stock, the full number of shares of
Common Stock deliverable upon the conversion of all outstanding shares of
Series B Preferred Stock not theretofore converted into shares of Common
Stock. For purposes of this paragraph (k), the number of shares of Common
Stock that shall be deliverable upon the conversion of all outstanding
shares of Series B Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.
The Corporation covenants that any shares of Common Stock issued
upon conversion of the Series B Preferred Stock shall be validly issued,
fully paid and non-assessable.
The Corporation shall endeavor to list the shares of Common Stock
required to be delivered upon conversion of the Series B Preferred Stock,
prior to such delivery, upon each national securities exchange, if any,
upon which the outstanding Common Stock is listed at the time of such
delivery.
Prior to the delivery of any securities that the Corporation
shall be obligated to deliver upon conversion of the Series B Preferred
Stock, the Corporation shall endeavor to comply with all federal and state
laws and regulations thereunder requiring the registration of such
securities with, or any approval of or consent to the delivery thereof by,
any governmental authority and to take action necessary to insure that any
shares of Common Stock issued upon conversion of the Series B Preferred
Stock are transferable under the provisions of Rule 144A, Regulation S and
Rule 144 of the Act and any applicable state securities or blue sky laws.
(l) The Corporation will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the
Series B Preferred Stock pursuant hereto; PROVIDED, HOWEVER, that the
Corporation shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issue or delivery of shares of
Common Stock or other securities or property in a name other than that of
the holder of the Series B Preferred Stock to be converted, and no such
issue or delivery shall be made unless and until the person requesting such
issue or delivery has paid to the Corporation the amount of any such tax or
established, to the reasonable satisfaction of the Corporation, that such
tax has been paid.
Section 8. RANKING. Any class or series of stock of the Corporation
shall be deemed to rank:
(a) Prior to the Series B Preferred Stock, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to
the holders of Series B Preferred Stock;
(b) On a parity with the Series B Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution
or winding up, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be different from those
of the Series B Preferred Stock, if the holders of such class of stock or
series and the Series B Preferred Stock shall be entitled to the receipt of
dividends and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued and unpaid
dividends per share or liquidation preferences, without preference or
priority one over the other ("Parity Stock"); the Series A Preferred Stock
shall be Parity Stock with respect to the Series B Preferred Stock; and
(c) Junior to the Series B Preferred Stock, as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, if such stock or series shall be Common Stock or if the
holders of Series B Preferred Stock shall be entitled to receipt of
dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of
shares of such stock or series.
Section 9. VOTING. If and whenever six quarterly dividends (whether
or not consecutive) payable on the Series B Preferred Stock or any series
or class of Parity Stock shall be in arrears (which shall, with respect to
any such quarterly dividend, mean that any such dividend has not been paid
in full), whether or not earned or declared, the number of directors then
constituting the Board of Directors shall be increased by two (if not
already increased by reason of a similar arrearage with respect to any
Parity Stock) and the holders of shares of Series B Preferred Stock,
together with the holders of shares of every other series of Parity Stock
(any such other series, the "Voting Preferred Stock"), voting as a single
class regardless of series, shall be entitled to elect the two additional
directors to serve on the Board of Directors at any annual meeting of
stockholders or special meeting held in place thereof, or at a special
meeting of the holders of the Series B Preferred Stock and the Voting
Preferred Stock called as hereinafter provided. Whenever all arrears in
dividends on the Series B Preferred Stock and the Voting Preferred Stock
then outstanding shall have been paid and dividends thereon for the current
quarterly dividend period shall have been paid or declared and set apart
for payment, then the right of the holders of the Series B Preferred Stock
and the Voting Preferred Stock to elect such additional two directors shall
cease (but subject always to the same provision for the vesting of such
voting rights in the case of any similar future arrearages in six quarterly
dividends), and the terms of office of all persons elected as directors by
the holders of the Series B Preferred Stock and the Voting Preferred Stock
shall forthwith terminate and the number of the Board of Directors shall be
reduced accordingly. At any time after such voting power shall have been
so vested in the holders of shares of Series B Preferred Stock and the
Voting Preferred Stock, the secretary of the Corporation may, and upon the
written request of any holder of Series B Preferred Stock (addressed to the
secretary at the principal office of the corporation) shall, call a special
meeting of the holders of the Series B Preferred Stock and of the Voting
Preferred Stock for the election of the two directors to be elected by them
as herein provided, such call to be made by notice similar to that provided
in the Bylaws of the Corporation for a special meeting of the stockholders
or as required by law. If any such special meeting required to be called as
above provided shall not be called by the secretary within 20 days after
receipt of any such request, then any holder of shares of Series B
Preferred Stock may call such meeting, upon the notice above provided, and
for that purpose shall have access to the stock books of the Corporation.
The directors elected at any such special meeting shall hold office until
the next annual meeting of the stockholders or special meeting held in lieu
thereof if such office shall not have previously terminated as above
provided. If any vacancy shall occur among the directors elected by the
holders of the Series B Preferred Stock and the Voting Preferred Stock, a
successor shall be elected by the Board of Directors, upon the nomination
of the then-remaining director elected by the holders of the Series B
Preferred Stock and the Voting Preferred Stock or the successor of such
remaining director, to serve until the next annual meeting of the
stockholders or special meeting held in place thereof if such office shall
not have previously terminated as provided above.
So long as any shares of Series B Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders
required by law or by the Articles of Incorporation, as amended, the
affirmative vote of at least 66 2/3% of the votes entitled to be cast by
the holders of the shares of Series B Preferred Stock and the Voting
Preferred Stock, at the time outstanding, acting as a single class
regardless of series, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall
be necessary for effecting or validating:
(a) Any amendment, alteration or repeal of any of the provisions of
the Amendment to the Articles of Incorporation, the Articles of
Incorporation or the By-Laws of the Corporation that materially adversely
affects the voting powers, rights or preferences of the holders of the
Series B Preferred Stock or the Voting Preferred Stock; PROVIDED, HOWEVER,
that the amendment of the provisions of the Articles of Incorporation so as
to authorize or create, or to increase the authorized amount of, any Junior
Stock or any shares of any class ranking on a parity with the Series B
Preferred Stock or the Voting Preferred Stock shall not be deemed to
materially adversely affect the voting powers, rights or preferences of the
holders of Series B Preferred Stock, and PROVIDED FURTHER, that if any such
amendment, alteration or repeal would materially adversely affect any
voting powers, rights or preferences of the Series B Preferred Stock or
another series of Voting Preferred Stock that are not enjoyed by some or
all of the other series which otherwise would be entitled to vote in
accordance herewith, the affirmative vote of at least 66 2/3% of the votes
entitled to be cast by the holders of all series similarly affected,
similarly given, shall be required in lieu of the affirmative vote of at
least 66 2/3% of the votes entitled to be cast by the holders of the shares
of Series B Preferred Stock and the Voting Preferred Stock which otherwise
would be entitled to vote in accordance herewith; or
(b) The authorization or creation of, or the increase in the
authorized amount of, any shares of any class or any security convertible
into shares of any class ranking prior to the Series B Preferred Stock in
the distribution of assets on any liquidation, dissolution or winding up of
the Corporation or in the payment of dividends; PROVIDED, HOWEVER, that no
such vote of the holders of Series B Preferred Stock shall be required if,
at or prior to the time when such amendment, alteration or repeal is to
take effect, or when the issuance of any such prior shares or convertible
security is to be made, as the case may be, provision is made for the
redemption of all shares of Series B Preferred Stock at the time
outstanding.
For purposes of the foregoing provisions of this Section 9, each
share of Series B Preferred Stock shall have one (1) vote per share, except
that when any other series of preferred stock shall have the right to vote
with the Series B Preferred Stock as a single class on any matter, then the
Series B Preferred Stock and such other series shall have with respect to
such matters one (1) vote per $25.00 of stated liquidation preference.
Except as otherwise required by applicable law or as set forth herein, the
shares of Series B Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers other
than as set forth herein, and the consent of the holders thereof shall not
be required for the taking of any corporate action.
Section 10. RECORD HOLDERS. The Corporation and the Transfer Agent
may deem and treat the record holder of any shares of Series B Preferred
Stock as the true and lawful owner thereof for all purposes, and neither
the Corporation nor the Transfer Agent shall be affected by any notice to
the contrary.
ARTICLE V-C
SERIES C CUMULATIVE CONVERTIBLE PREFERRED STOCK
FIRST: Pursuant to authority expressly vested in the Board of
Directors of the corporation by Article Five of the Articles of
Incorporation, as amended (the "Articles"), the Board of Directors on June
22, 1993, duly divided and classified 4,600,000 shares of the Preferred
Stock of the corporation, without par value, into a class designated Series
A Cumulative Convertible Preferred Stock (the "Series A Preferred Stock"),
and provided for the issuance of such Series A Preferred Stock.
SECOND: On October 31, 1994, the Board of Directors duly divided and
classified 4,000,000 shares of Preferred Stock of the corporation, without
par value, into a class of Series B Cumulative Convertible Preferred Stock
(the "Series B Preferred Stock"), and provided for the issuance of such
Series B Stock.
THIRD: On March 7, 1995, the Board of Directors duly divided and
classified 4,600,000 shares of the Preferred Stock of the corporation,
without par value, into a class of Series C Cumulative Convertible
Preferred Stock and provided for the issuance of such Series C Preferred
Stock.
FOURTH: The terms of the Series C Cumulative Convertible Preferred
Stock established by the Board of Directors, in addition to those set forth
in Article V of the Articles of Incorporation are as follows:
Section 1. NUMBER OF SHARES AND DESIGNATION. This series of
Preferred Stock shall be designated as Series C Cumulative Convertible
Preferred Stock (the "Series C Preferred Stock") and 4,600,000 shall be the
number of shares of Preferred Stock constituting such series.
Section 2. DEFINITIONS. For purposes of the Series C Preferred
Stock, the following terms shall have the meanings indicated:
"Act" shall have the meaning set forth in paragraph (g)
of Section 5 hereof.
"Board of Directors" shall mean the Board of Directors
of the Corporation or any committee authorized by such
Board of Directors to perform any of its
responsibilities with respect to the Series C Preferred
Stock.
"Business Day" shall mean any day other than a
Saturday, Sunday or a day on which state or federally
chartered banking institutions in Augusta, Georgia or
New York, New York are not required to be open.
"Call Date" shall have the meaning set forth in
paragraph (c) of Section 5 hereof.
"Common Stock" shall mean the common stock of the
Corporation, without par value.
"Constituent Person" shall have the meaning set forth
in paragraph (e) of Section 7 hereof.
"Conversion Price" shall mean the conversion price per
share of Common Stock for which the Series C Preferred
Stock is convertible, as such Conversion Price may be
adjusted pursuant to Section 7. The initial conversion
price shall be $22.00 (equivalent to a conversion rate
of 1.136 shares of Common Stock for each share of
Series C Preferred Stock).
"Current Market Price" of publicly traded shares of
common stock or any other class of capital stock or
other security of the Corporation or any other issuer
for any day shall mean the last reported sales price,
regular way on such day, or, if no sale takes place on
such day, the average of the reported closing bid and
asked prices on such day, regular way, in either case
as reported on the New York Stock Exchange ("NYSE") or,
if such security is not listed or admitted for trading
on the NYSE, on the principal national securities
exchange on which such security is listed or admitted
for trading or, if not listed or admitted for trading
on any national securities exchange, on the National
Market System of the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ")
or, if such security is not quoted on such National
Market System, the average of the closing bid and asked
prices on such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for such
security on such day shall not have been reported
through NASDAQ, the average of the bid and asked prices
on such day as furnished by any NYSE member firm
regularly making a market in such security selected for
such purpose by the Chief Executive Officer or the
Board of Directors.
"Dividend Payment Date" shall mean the last calendar
day of March, June, September and December, in each
year, commencing on June 30, 1995; PROVIDED, HOWEVER,
that if any Dividend Payment Date falls on any day
other than a Business Day, the dividend payment due on
such Dividend Payment Date shall be paid on the
Business Day immediately following such Dividend
Payment Date.
"Dividend Periods" shall mean quarterly dividend
periods commencing on January 1, April 1, July 1 and
October 1 of each year and ending on and including the
day preceding the first day of the next succeeding
Dividend Period (other than the initial Dividend
Period, which shall commence on the Issue Date and end
on and include June 30, 1995).
"Fair Market Value" shall mean the average of the daily
Current Market Prices of a share of Common Stock during
the five (5) consecutive Trading Days selected by the
Corporation commencing not more than 20 Trading Days
before, and ending not later than, the earlier of the
day in question and the day before the "ex" date with
respect to the issuance or distribution requiring such
computation. The term "'ex' date," when used with
respect to any issuance or distribution, means the
first day on which the Common Stock trades regular way,
without the right to receive such issuance or
distribution, on the exchange or in the market, as the
case may be, used to determine that day's Current
Market Price.
"Issue Date" shall mean March 15, 1995.
"Junior Stock" shall mean the Common Stock and any
other class or series of shares of the Corporation over
which the Series C Preferred Stock has preference or
priority in the payment of dividends or in the
distribution of assets on any liquidation, dissolution
or winding up of the Corporation.
"Non-Electing Share" shall have the meaning set forth
in paragraph (e) of Section 7 hereof.
"Parity Stock" shall have the meaning set forth in
paragraph (b) of Section 8 hereof.
"Permitted Common Stock Cash Distributions" means cash
dividends and distributions paid after December 31,
1994, not in excess of the Company's cumulative
undistributed net earnings at December 31, 1994, plus
the cumulative amount of funds from operations, as
determined by the Board of Directors on a basis
consistent with the financial reporting practices of
the Corporation, after December 31, 1994, minus the
cumulative amount of dividends accrued or paid on the
Series C Preferred Stock or any other class of
Preferred Stock after January 1, 1995.
"Person" shall mean any individual, firm, partnership,
corporation or other entity, and shall include any
successor (by merger or otherwise) of such entity.
"Press Release" shall have the meaning set forth in
paragraph (b) of Section 5 hereof.
"Securities" shall have the meaning set forth in
paragraph (d)(iii) of Section 7 hereof.
"Series A Preferred Stock" shall mean the $1.75 Series
A Cumulative Convertible Preferred Stock, liquidation
preference $25.00 per share, authorized on June 22,
1993, which is, from time to time, outstanding.
"Series B Preferred Stock" shall mean the $2.205 Series
B Cumulative Convertible Preferred Stock, liquidation
preference $25.00 per share, authorized on October 31,
1994, which is, from time to time, outstanding.
"Series C Preferred Stock" shall have the meaning set
forth in Section 1 hereof.
"set apart for payment" shall be deemed to include,
without any action other than the following, the
recording by the Corporation in its accounting ledgers
of any accounting or bookkeeping entry which indicates,
pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation
of funds to be so paid on any series or class of
capital stock of the Corporation; PROVIDED, HOWEVER,
that if any funds for any class or series of Junior
Stock or any class or series of stock ranking on a
parity with the Series C Preferred Stock as to the
payment of dividends are placed in a separate account
of the Corporation or delivered to a disbursing, paying
or other similar agent, then "set apart for payment"
with respect to the Series C Preferred Stock shall mean
placing such funds in a separate account or delivering
such funds to a disbursing, paying or other similar
agent.
"Trading Day" shall mean any day on which the
securities in question are traded on the NYSE, or if
such securities are not listed or admitted for trading
on the NYSE, on the principal national securities
exchange on which such securities are listed or
admitted, or if not listed or admitted for trading on
any national securities exchange, on the National
Market System of NASDAQ, or if such securities are not
quoted on such National Market System, in the
applicable securities market in which the securities
are traded.
"Transaction" shall have the meaning set forth in
paragraph (e) of Section 7 hereof.
"Transfer Agent" means First Union National Bank,
Charlotte, North Carolina, or such other agent or
agents of the Corporation as may be designated by the
Board of Directors or their designee as the transfer
agent for the Series C Preferred Stock.
"Voting Preferred Stock" shall have the meaning set
forth in Section 9 hereof.
Section 3. DIVIDENDS. (a) The holders of shares of the Series C
Preferred Stock shall be entitled to receive, when, as and if declared by
the Board of Directors, out of funds legally available for that purpose,
dividends payable in cash in an amount per share of Series C Preferred
Stock equal to the greater of (i) $.5375 per quarter (equivalent to $2.15
per annum) or (ii) the cash dividend on the number of shares of Common
Stock, or portion thereof, into which a share of Series C Preferred Stock
is convertible. The amount referred to in (ii) of the immediately
preceding sentence shall be determined as of each Dividend Payment Date by
multiplying the number of shares of Common Stock, or portion thereof,
calculated to the fourth decimal place, into which a share of Series C
Preferred Stock is convertible at the opening of business on such Dividend
Payment Date by the quarterly cash dividend payable in respect of a share
of Common Stock on such Dividend Payment Date. Such dividends shall be
cumulative from the Issue Date, whether or not in any Dividend Period or
Periods there shall be funds of the Corporation legally available for the
payment of such dividends, and shall be payable quarterly, when, as and if
declared by the Board of Directors, in arrears on Dividend Payment Dates,
commencing on June 30, 1995. Each such dividend shall be payable in arrears
to the holders of record of shares of the Series C Preferred Stock, as they
appear on the stock records of the Corporation at the close of business on
such record dates, not more than 60 days preceding such Dividend Payment
Dates thereof, as shall be fixed by the Board of Directors which record
dates and Dividend Payment Dates shall coincide with the record dates and
Dividend Payment Dates for the quarterly dividends, if any, payable on
Common Stock. Accrued and unpaid dividends for any past Dividend Periods
may be declared and paid at any time, without reference to any regular
Dividend Payment Date, to holders of record on such date, not exceeding 45
days preceding the payment date thereof, as may be fixed by the Board of
Directors.
(b) The amount of dividends payable for each full Dividend Period for
the Series C Preferred Stock shall be computed by dividing the annual
dividend rate by four. The amount of dividends payable for any period
shorter or longer than a full Dividend Period on the Series C Preferred
Stock shall be computed on the basis of twelve 30-day months and a 360-day
year. Holders of shares of Series C Preferred Stock shall not be entitled
to any dividends, whether payable in cash, property or stock, in excess of
cumulative dividends, as herein provided, on the Series C Preferred Stock.
No interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payment or payments on the Series C Preferred Stock
that may be in arrears.
(c) So long as any shares of the Series C Preferred Stock are
outstanding, no dividends, except as described in the immediately following
sentence, shall be declared or paid or set apart for payment on any class
or series of Parity Stock for any period unless full cumulative dividends
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on the Series
C Preferred Stock for all Dividend Periods terminating on or prior to the
Dividend Payment Date on such class or series of Parity Stock. When
dividends are not paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, all dividends declared upon shares of the Series C
Preferred Stock and all dividends declared upon any other class or series
of Parity Stock shall be declared ratably in proportion to the respective
amounts of dividends accumulated and unpaid on the Series C Preferred Stock
and accumulated and unpaid on such Parity Stock.
(d) So long as any shares of the Series C Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase
shares of, Junior Stock), shall be declared or paid or set apart for
payment or other distribution declared or made upon Junior Stock, nor shall
Junior Stock be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of shares of Common Stock made
for purposes of an employee incentive or benefit plan of the Corporation or
any subsidiary) for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such
stock) by the Corporation, directly or indirectly (except by conversion
into or exchange for Junior Stock), unless in each case (i) the full
cumulative dividends on all outstanding shares of the Series C Preferred
Stock and any other Parity Stock of the Corporation shall have been paid or
set apart for payment for all past Dividend Periods with respect to the
Series C Preferred Stock and all past dividend periods with respect to such
Parity Stock and (ii) sufficient funds shall have been paid or set apart
for the payment of the dividend for the current Dividend Period with
respect to the Series C Preferred Stock and the current dividend period
with respect to such Parity Stock.
Section 4. LIQUIDATION PREFERENCE. (a) In the event of any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, before any payment or distribution of the assets
of the Corporation (whether capital or surplus) shall be made to or set
apart for the holders of Junior Stock, the holders of the shares of Series
C Preferred Stock shall be entitled to receive Twenty-five Dollars ($25.00)
per share of Series C Preferred Stock plus an amount equal to all dividends
(whether or not earned or declared) accrued and unpaid thereon to the date
of final distribution to such holders; but such holders shall not be
entitled to any further payment. If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of Series C
Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid and liquidating payments on any other shares of any class
or series of Parity Stock, then such assets, or the proceeds thereof, shall
be distributed among the holders of shares of Series C Preferred Stock and
any such other Parity Stock ratably in accordance with the respective
amounts that would be payable on such shares of Series C Preferred Stock
and any such other Parity Stock if all amounts payable thereon were paid in
full. For the purposes of this Section 4, (i) a consolidation or merger of
the Corporation with one or more corporations, (ii) a sale or transfer of
all or substantially all of the Corporation's assets, or (iii) a statutory
share exchange shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of shares of any series or
class or classes of stock ranking on a parity with or prior to the Series C
Preferred Stock upon liquidation, dissolution or winding up, upon any
liquidation, dissolution or winding up of the Corporation, after payment
shall have been made in full to the holders of the Series C Preferred
Stock, as provided in this Section 4, any other series or class or classes
of Junior Stock shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining
to be paid or distributed, and the holders of the Series C Preferred Stock
shall not be entitled to share therein.
Section 5. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) The Series C Preferred Stock shall not be redeemable by the
Corporation prior to March 31, 2000. On and after March 31, 2000, the
Corporation, at its option, may redeem the shares of Series C Preferred
Stock in whole or in part, as set forth herein, subject to the provisions
described below.
(b) The Series C Preferred Stock may be redeemed, in whole or in
part, at the option of the Corporation, at any time, only if for 20 Trading
Days, within any period of 30 consecutive Trading Days, including the last
Trading Day of such period, the Current Market Price of the Common Stock on
each of such 20 Trading Days equals or exceeds the Conversion Price in
effect on such Trading Day. In order to exercise its redemption option,
the Corporation must issue a press release announcing the redemption (the
"Press Release") prior to the opening of business on the second Trading Day
after the condition in the preceding sentence has, from time to time, been
met. The Corporation may not issue a Press Release prior to February 28,
2000. The Press Release shall announce the redemption and set forth the
number of shares of Series C Preferred Stock which the Corporation intends
to redeem. The Call Date shall be selected by the Corporation, shall be
specified in the notice of redemption and shall be not less than 30 days or
more than 60 days after the date on which the Corporation issues the Press
Release.
(c) Upon redemption of Series C Preferred Stock by the Corporation on
the date specified in the notice to holders required under subparagraph (e)
of this Section 5 (the "Call Date"), each share of Series C Preferred Stock
so redeemed shall be converted into a number of shares of Common Stock
equal to the liquidation preference (excluding any accrued and unpaid
dividends) of the shares of Series C Preferred Stock being redeemed divided
by the Conversion Price as of the opening of business on the Call Date.
Upon any redemption of Series C Preferred Stock, the Corporation shall
pay any accrued and unpaid dividends in arrears for any Dividend Period
ending on or prior to the Call Date. If the Call Date falls after a
dividend payment record date and prior to the corresponding Dividend
Payment Date, then each holder of Series C Preferred Stock at the close of
business on such dividend payment record date shall be entitled to the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the redemption of such shares before such Dividend Payment
Date. Except as provided above, the Corporation shall make no payment or
allowance for unpaid dividends, whether or not in arrears, on shares of
Series C Preferred Stock called for redemption or on the shares of Common
Stock issued upon such redemption.
(d) If full cumulative dividends on the Series C Preferred Stock and
any other class or series of Parity Stock of the Corporation have not been
paid or declared and set apart for payment, the Series C Preferred Stock
may not be redeemed in part and the Corporation may not purchase or acquire
shares of Series C Preferred Stock, otherwise than pursuant to a purchase
or exchange offer made on the same terms to all holders of shares of Series
C Preferred Stock.
(e) If the Corporation shall redeem shares of Series C Preferred
Stock pursuant to paragraph (a) of this Section 5, notice of such
redemption shall be given not more than four Business Days after the date
on which the Corporation issues the Press Release to each holder of record
of the shares to be redeemed. Such notice shall be provided by first class
mail, postage prepaid, at such holder's address as the same appears on the
stock records of the Corporation, or by publication in THE WALL STREET
JOURNAL or THE NEW YORK TIMES, or if neither such newspaper is then being
published, any other daily newspaper of national circulation. If the
Corporation elects to provide such notice by publication, it shall also
promptly mail notice of such redemption to the holders of the Series C
Preferred Stock to be redeemed. Neither the failure to mail any notice
required by this paragraph (e), nor any defect therein or in the mailing
thereof, to any particular holder, shall affect the sufficiency of the
notice or the validity of the proceedings for redemption with respect to
the other holders. Any notice which was mailed in the manner herein
provided shall be conclusively presumed to have been duly given on the date
mailed whether or not the holder receives the notice. Each such mailed or
published notice shall state, as appropriate: (1) the Call Date; (2) the
number of shares of Series C Preferred Stock to be redeemed and, if fewer
than all the shares held by such holder are to be redeemed, the number of
such shares to be redeemed from such holder; (3) the number of shares of
Common Stock to be issued with respect to each share of Series C Preferred
Stock; (4) the place or places at which certificates for such shares are to
be surrendered for certificates representing shares of Common Stock; (5)
the then-current Conversion Price; and (6) that dividends on the shares to
be redeemed shall cease to accrue on such Call Date except as otherwise
provided herein. Notice having been published or mailed as aforesaid, from
and after the Call Date (unless the Corporation shall fail to make
available a number of shares of Common Stock or amount of cash necessary to
effect such redemption), (i) except as otherwise provided herein, dividends
on the shares of the Series C Preferred Stock so called for redemption
shall cease to accrue, (ii) said shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as holders of
Series C Preferred Stock of the Corporation shall cease (except the rights
to receive the shares of Common Stock and cash payable upon such
redemption, without interest thereon, upon surrender and endorsement of
their certificates if so required and to receive any dividends payable
thereon). The Corporation's obligation to provide shares of Common Stock
and cash in accordance with the preceding sentence shall be deemed
fulfilled if, on or before the Call Date, the Corporation shall deposit
with a bank or trust company (which may be an affiliate of the Corporation)
that has an office in the Borough of Manhattan, City of New York, or in
Charlotte, North Carolina and that has, or is an affiliate of a bank or
trust company that has, a capital and surplus of at least $50,000,000,
shares of Common Stock and any cash necessary for such redemption, in
trust, with irrevocable instructions that such shares of Common Stock and
cash be applied to the redemption of the shares of Series C Preferred Stock
so called for redemption. At the close of business on the Call Date, each
holder of Series C Preferred Stock to be redeemed (unless the Company
defaults in the delivery of the shares of Common Stock or cash payable on
such Call Date) shall be deemed to be the record holder of the number of
shares of Common Stock into which such Series C Preferred Stock is to be
redeemed, regardless of whether such holder has surrendered the
certificates representing the Series C Preferred Stock. No interest shall
accrue for the benefit of the holders of Series C Preferred Stock to be
redeemed on any cash so set aside by the Corporation. Subject to
applicable escheat laws, any such cash unclaimed at the end of two years
from the Call Date shall revert to the general funds of the Corporation,
after which reversion the holders of such shares so called for redemption
shall look only to the general funds of the Corporation for the payment of
such cash.
As promptly as practicable after the surrender in accordance with said
notice of the certificates for any such shares so redeemed (properly
endorsed or assigned for transfer, if the Corporation shall so require and
if the notice shall so state), such shares shall be exchanged for
certificates of shares of Common Stock and any cash (without interest
thereon) for which such shares have been redeemed. If fewer than all the
outstanding shares of Series C Preferred Stock are to redeemed, shares to
be redeemed shall be selected by the Corporation from outstanding shares of
Series C Preferred Stock not previously called for redemption by lot or
pro rata (as nearly as may be) or by any other method determined by the
Corporation in its sole discretion to be equitable. If fewer than all the
shares of Series C Preferred Stock represented by any certificate are
redeemed, then new certificates representing the unredeemed shares shall be
issued without cost to the holder thereof.
(f) No fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon redemption of the Series C Preferred
Stock. Instead of any fractional interest in a share of Common Stock that
would otherwise be deliverable upon the redemption of a share of Series C
Preferred Stock, the Corporation shall pay to the holder of such share an
amount in cash (computed to the nearest cent) based upon the Current Market
Price of Common Stock on the Trading Day immediately preceding the Call
Date. If more than one share shall be surrendered for redemption at one
time by the same holder, the number of full shares of Common Stock issuable
upon redemption thereof shall be computed on the basis of the aggregate
number of shares of Series C Preferred Stock so surrendered.
(g) The Corporation covenants that any shares of Common Stock issued
upon redemption of the Series C Preferred Stock shall be validly issued,
fully paid and non-assessable. The Corporation shall endeavor to list the
shares of Common Stock required to be delivered upon redemption of the
Series C Preferred Stock, prior to such redemption, upon each national
securities exchange, if any, upon which the outstanding Common Stock is
listed at the time of such delivery.
The Corporation shall endeavor to take any action necessary to
ensure that any shares of Common Stock issued upon the redemption of Series
C Preferred Stock are freely transferable and not subject to any resale
restrictions under the Securities Act of 1933, as amended (the "Act"), or
any applicable state securities or blue sky laws (other than any shares of
Common Stock issued upon redemption of any Series C Preferred Stock which
are held by an "affiliate" (as defined in Rule 144 under the Act) of the
Corporation).
Section 6. SHARES TO BE RETIRED.
All shares of Series C Preferred Stock which shall have been issued
and reacquired in any manner by the Corporation shall be restored to the
status of authorized but unissued shares of Preferred Stock, without
designation as to series. The Corporation may also retire any unissued
shares of Series C Preferred Stock, and such shares shall then be restored
to the status of authorized but unissued shares of Preferred Stock, without
designation as to series.
Section 7. CONVERSION.
Holders of shares of Series C Preferred Stock shall have the right to
convert all or a portion of such shares into shares of Common Stock, as
follows:
(a) Subject to and upon compliance with the provisions of this
Section 7, a holder of shares of Series C Preferred Stock shall have the
right, at his or her option, at any time to convert such shares into the
number of fully paid and non-assessable shares of Common Stock obtained by
dividing the aggregate liquidation preference (excluding any accrued and
unpaid dividends) of such shares by the Conversion Price (as in effect at
the time and on the date provided for in the last paragraph of paragraph
(b) of this Section 7) by surrendering such shares to be converted, such
surrender to be made in the manner provided in Section 7 paragraph (b);
PROVIDED, HOWEVER, that the right to convert shares called for redemption
pursuant to Section 5 shall terminate at the close of business on the Call
Date fixed for such redemption, unless the Corporation shall default in
making payment of the shares of Common Stock and any cash payable upon such
redemption under Section 5 hereof.
(b) In order to exercise the conversion right, the holder of each
share of Series C Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Transfer Agent, accompanied
by written notice to the Corporation that the holder thereof elects to
convert such Series C Preferred Stock. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such
share of Series C Preferred Stock is registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid).
Holders of shares of Series C Preferred Stock at the close of business
on a dividend payment record date shall be entitled to receive the dividend
payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion thereof following such dividend payment
record date and prior to such Dividend Payment Date. However, shares of
Series C Preferred Stock surrendered for conversion during the period
between the close of business on any dividend payment record date and the
opening of business on the corresponding Dividend Payment Date (except
shares converted after the issuance of notice of redemption with respect to
a Call Date during such period, such shares of Series C Preferred Stock
being entitled to such dividend on the Dividend Payment Date) must be
accompanied by payment of an amount equal to the dividend payable on such
shares on such Dividend Payment Date. A holder of shares of Series C
Preferred Stock on a dividend payment record date who (or whose transferee)
tenders any such shares for conversion into shares of Common Stock on such
Dividend Payment Date will receive the dividend payable by the Corporation
on such shares of Series C Preferred Stock on such date, and the converting
holder need not include payment of the amount of such dividend upon
surrender of shares of Series C Preferred Stock for conversion. Except as
provided above, the Corporation shall make no payment or allowance for
unpaid dividends, whether or not in arrears, on converted shares or for
dividends on the shares of Common Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates for
shares of Series C Preferred Stock as aforesaid, the Corporation shall
issue and shall deliver at such office to such holder, or on his or her
written order, a certificate or certificates for the number of full shares
of Common Stock issuable upon the conversion of such shares in accordance
with provisions of this Section 7, and any fractional interest in respect
of a share of Common Stock arising upon such conversion shall be settled as
provided in paragraph (c) of this Section 7.
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates for
shares of Series C Preferred Stock shall have been surrendered and such
notice (and if applicable, payment of an amount equal to the dividend
payable on such shares) received by the Corporation as aforesaid, and the
person or persons in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become the holder or holders of record of the shares
represented thereby at such time on such date and such conversion shall be
at the Conversion Price in effect at such time on such date unless the
stock transfer books of the Corporation shall be closed on that date, in
which event such person or persons shall be deemed to have become such
holder or holders of record at the close of business on the next succeeding
day on which such stock transfer books are open, but such conversion shall
be at the Conversion Price in effect on the date on which such shares shall
have been surrendered and such notice received by the Corporation.
(c) No fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon conversion of the Series C Preferred
Stock. Instead of any fractional interest in a share of Common Stock that
would otherwise be deliverable upon the conversion of a share of Series C
Preferred Stock, the Corporation shall pay to the holder of such share an
amount in cash based upon the Current Market Price of Common Stock on the
Trading Day immediately preceding the date of conversion. If more than one
share shall be surrendered for conversion at one 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 aggregate number of shares of Series
C Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to time as
follows:
(i) If the Corporation shall after the Issue Date (A) pay a
dividend or make a distribution on its capital stock in shares of its
Common Stock, (B) subdivide its outstanding Common Stock into a greater
number of shares, (C) combine its outstanding Common Stock into a smaller
number of shares or (D) issue any shares of capital stock by
reclassification of its Common Stock, the Conversion Price in effect at the
opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or
distribution or at the opening of business on the day following the day on
which such subdivision, combination or reclassification becomes effective,
as the case may be, shall be adjusted so that the holder of any share of
Series C Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock that such holder
would have owned or have been entitled to receive after the happening of
any of the events described above had such shares of Series C Preferred
Stock been converted immediately prior to the record date in the case of a
dividend or distribution or the effective date in the case of a
subdivision, combination or reclassification. An adjustment made pursuant
to this subparagraph (i) shall become effective immediately after the
opening of business on the day next following the record date (except as
provided in paragraph (h) below) in the case of a dividend or distribution
and shall become effective immediately after the opening of business on the
day next following the effective date in the case of a subdivision,
combination or reclassification.
(ii) If the Corporation shall issue after the Issue Date rights,
options or warrants to all holders of Common Stock entitling them (for a
period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase Common Stock at a price per share less than the
Fair Market Value per share of Common Stock on the record date for the
determination of stockholders entitled to receive such rights or warrants,
then the Conversion Price in effect at the opening of business on the day
next following such record date shall be adjusted to equal the price
determined by multiplying (I) the Conversion Price in effect immediately
prior to the opening of business on the day following the date fixed for
such determination by (II) a fraction, the numerator of which shall be the
sum of (A) the number of shares of Common Stock outstanding on the close of
business on the date fixed for such determination and (B) the number of
shares that the aggregate proceeds to the Corporation from the exercise of
such rights or warrants for Common Stock would purchase at such Fair Market
Value, and the denominator of which shall be the sum of (A) the number of
shares of Common Stock outstanding on the close of business on the date
fixed for such determination and (B) the number of additional shares of
Common Stock offered for subscription or purchase pursuant to such rights
or warrants. Such adjustment shall become effective immediately after the
opening of business on the day next following such record date (except as
provided in paragraph (h) below). In determining whether any rights or
warrants entitle the holders of Common Stock to subscribe for or purchase
shares of Common Stock at less than such Fair Market Value, there shall be
taken into account any consideration received by the Corporation upon
issuance and upon exercise of such rights or warrants, the value of such
consideration, if other than cash, to be determined by the Chief Executive
Officer or the Board of Directors.
(iii) If the Corporation shall distribute to all holders of its
Common Stock any shares of capital stock of the Corporation (other than
Common Stock) or evidence of its indebtedness or assets (excluding
Permitted Common Stock Cash Distributions and cash dividends which result
in a payment of an equal cash dividend to the holders of the Series C
Preferred Stock pursuant to subparagraph (ii) of Section 3(a) hereof) or
rights or warrants to subscribe for or purchase any of its securities
(excluding those rights and warrants issued to all holders of Common Stock
entitling them for a period expiring within 45 days after the record date
referred to in subparagraph (ii) above to subscribe for or purchase Common
Stock, which rights and warrants are referred to in and treated under
subparagraph (ii) above) (any of the foregoing being hereinafter in this
subparagraph (iii) called the "Securities"), then in each such case the
Conversion Price shall be adjusted so that it shall equal the price
determined by multiplying (I) the Conversion Price in effect immediately
prior to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by (II) a fraction, the
numerator of which shall be the Fair Market Value per share of the Common
Stock on the record date mentioned below less the then fair market value
(as determined by the Chief Executive Officer or the Board of Directors,
whose determination shall be conclusive), of the portion of the capital
stock or assets or evidences of indebtedness so distributed or of such
rights or warrants applicable to one share of Common Stock, and the
denominator of which shall be the Fair Market Value per share of the Common
Stock on the record date mentioned below. Such adjustment shall become
effective immediately at the opening of business on the Business Day next
following (except as provided in paragraph (h) below) the record date for
the determination of shareholders entitled to receive such distribution.
For the purposes of this clause (iii), the distribution of a Security,
which is distributed not only to the holders of the Common Stock on the
date fixed for the determination of stockholders entitled to such
distribution of such Security, but also is distributed with each share of
Common Stock delivered to a Person converting a share of Series C Preferred
Stock after such determination date, shall not require an adjustment of the
Conversion Price pursuant to this clause (iii); PROVIDED that on the date,
if any, on which a person converting a share of Series C Preferred Stock
would no longer be entitled to receive such Security with a share of Common
Stock (other than as a result of the termination of all such Securities), a
distribution of such Securities shall be deemed to have occurred and the
Conversion Price shall be adjusted as provided in this clause (iii) and
such day shall be deemed to be "the date fixed for the determination of the
stockholders entitled to receive such distribution" and "the record date"
within the meaning of the two preceding sentences.
(iv) No adjustment in the Conversion Price shall be required
unless such adjustment would require a cumulative increase or decrease of
at least 1% in such price; PROVIDED, HOWEVER, that any adjustments that by
reason of this subparagraph (iv) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment until
made; and PROVIDED, FURTHER, that any adjustment shall be required and made
in accordance with the provisions of this Section 7 (other than this
subparagraph (iv)) not later than such time as may be required in order to
preserve the tax-free nature of a distribution to the holders of shares of
Common Stock. Notwithstanding any other provisions of this Section 7, the
Corporation shall not be required to make any adjustment of the Conversion
Price for the issuance of any shares of Common Stock pursuant to any plan
providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional
amounts in shares of Common Stock under such plan. All calculations under
this Section 7 shall be made to the nearest cent (with $.005 being rounded
upward) or to the nearest one-tenth of a share (with .05 of a share being
rounded upward), as the case may be. Anything in this paragraph (d) to the
contrary notwithstanding, the Corporation shall be entitled, to the extent
permitted by law, to make such reductions in the Conversion Price, in
addition to those required by this paragraph (d), as it in its discretion
shall determine to be advisable in order that any stock dividends,
subdivision of shares, reclassification or combination of shares,
distribution of rights or warrants to purchase stock or securities, or a
distribution of other assets (other than cash dividends) hereafter made by
the Corporation to its stockholders shall not be taxable, or if that is not
possible, to diminish any income taxes that are otherwise payable because
of such event.
(e) If the Corporation shall be a party to any transaction (including
without limitation a merger, consolidation, statutory share exchange, self
tender offer for all or substantially all shares of Common Stock, sale of
all or substantially all of the Corporation's assets or recapitalization of
the Common Stock and excluding any transaction as to which subparagraph
(d)(i) of this Section 7 applies) (each of the foregoing being referred to
herein as a "Transaction"), in each case as a result of which shares of
Common Stock shall be converted into the right to receive stock, securities
or other property (including cash or any combination thereof), each share
of Series C Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such
Transaction shall thereafter be convertible into the kind and amount of
shares of stock, securities and other property (including cash or any
combination thereof) receivable upon the consummation of such Transaction
by a holder of that number of shares of Common Stock into which one share
of Series C Preferred Stock was convertible immediately prior to such
Transaction, assuming such holder of Common Stock (i) is not a Person with
which the Corporation consolidated or into which the Corporation merged or
which merged into the Corporation or to which such sale or transfer was
made, as the case may be ("Constituent Person"), or an affiliate of a
Constituent Person and (ii) failed to exercise his rights of election, if
any, as to the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction (provided that if the
kind or amount of stock, securities and other property (including cash)
receivable upon such Transaction is not the same for each share of Common
Stock of the Corporation held immediately prior to such Transaction by
other than a Constituent Person or an affiliate thereof and in respect of
which such rights of election shall not have been exercised ("Non-Electing
Share"), then for the purpose of this paragraph (e) the kind and amount of
stock, securities and other property (including cash) receivable upon such
Transaction by each Non-Electing Share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares).
The Corporation shall not be a party to any Transaction unless the terms of
such Transaction are consistent with the provisions of this paragraph (e),
and it shall not consent or agree to the occurrence of any Transaction
until the Corporation has entered into an agreement with the successor or
purchasing entity, as the case may be, for the benefit of the holders of
the Series C Preferred Stock that will contain provisions enabling the
holders of the Series C Preferred Stock that remains outstanding after such
Transaction to convert into the consideration received by holders of Common
Stock at the Conversion Price in effect immediately prior to such
Transaction. The provisions of this paragraph (e) shall similarly apply to
successive Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock (other than Permitted Common Stock Cash
Distributions); or
(ii) the Corporation shall authorize the granting to the holders
of the Common Stock of rights or warrants to subscribe for or purchase any
shares of any class or any other rights or warrants; or
(iii) there shall be any reclassification of the Common Stock
(other than an event to which subparagraph (d)(i) of this Section 7
applies) or any consolidation or merger to which the Corporation is a party
and for which approval of any stockholders of the Corporation is required,
or a statutory share exchange, or a self tender offer by the Company for
all or substantially all of its outstanding shares of Common Stock or the
sale or transfer of all or substantially all of the assets of the
Corporation as an entirety; or
(iv) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation,
then the Corporation shall cause to be filed with the Transfer Agent and
shall cause to be mailed to the holders of shares of the Series C Preferred
Stock at their addresses as shown on the stock records of the Corporation,
as promptly as possible, but at least 15 days prior to the applicable date
hereinafter specified, a notice stating (A) the date on which a record is
to be taken for the purpose of such dividend, distribution or rights or
warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend,
distribution or rights or warrants are to be determined or (B) the date on
which such reclassification, consolidation, merger, statutory share
exchange, sale, transfer, liquidation, dissolution or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, statutory
share exchange, sale, transfer, liquidation, dissolution or winding up.
Failure to give or receive such notice or any defect therein shall not
affect the legality or validity of the proceedings described in this
Section 7.
(g) Whenever the Conversion Price is adjusted as herein provided, the
Corporation shall promptly file with the Transfer Agent an officer's
certificate setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment
which certificate shall be conclusive evidence of the correctness of such
adjustment absent manifest error. Promptly after delivery of such
certificate, the Corporation shall prepare a notice of such adjustment of
the Conversion Price setting forth the adjusted Conversion Price and the
effective date of such adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Price to the holder of each
share of Series C Preferred Stock at such holder's last address as shown on
the stock records of the Corporation.
(h) In any case in which paragraph (d) of this Section 7 provides
that an adjustment shall become effective on the day next following the
record date for an event, the Corporation may defer until the occurrence of
such event (A) issuing to the holder of any share of Series C Preferred
Stock converted after such record date and before the occurrence of such
event the additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above the
Common Stock issuable upon such conversion before giving effect to such
adjustment and (B) paying to such holder any amount of cash in lieu of any
fraction pursuant to paragraph (c) of this Section 7.
(i) There shall be no adjustment of the Conversion Price in case of
the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth
in this Section 7. If any action or transaction would require adjustment
of the Conversion Price pursuant to more than one paragraph of this Section
7, only one adjustment shall be made and such adjustment shall be the
amount of adjustment that has the highest absolute value.
(j) If the Corporation shall take any action affecting the Common
Stock, other than action described in this Section 7, that in the opinion
of the Board of Directors would materially adversely affect the conversion
rights of the holders of the shares of Series C Preferred Stock, the
Conversion Price for the Series C Preferred Stock may be adjusted, to the
extent permitted by law, in such manner, if any, and at such time, as the
Board of Directors, in its sole discretion, may determine to be equitable
in the circumstances.
(k) The Corporation covenants that it will at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued shares of Common Stock, for the purpose of
effecting conversion of the Series C Preferred Stock, the full number of
shares of Common Stock deliverable upon the conversion of all outstanding
shares of Series C Preferred Stock not theretofore converted. For purposes
of this paragraph (k), the number of shares of Common Stock that shall be
deliverable upon the conversion of all outstanding shares of Series C
Preferred Stock shall be computed as if at the time of computation all such
outstanding shares were held by a single holder.
The Corporation covenants that any shares of Common Stock issued upon
conversion of the Series C Preferred Stock shall be validly issued, fully
paid and non-assessable.
The Corporation shall endeavor to list the shares of Common Stock
required to be delivered upon conversion of the Series C Preferred Stock,
prior to such delivery, upon each national securities exchange, if any,
upon which the outstanding Common Stock is listed at the time of such
delivery.
Prior to the delivery of any securities that the Corporation shall be
obligated to deliver upon conversion of the Series C Preferred Stock, the
Corporation shall endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with,
or any approval of or consent to the delivery thereof by, any governmental
authority.
(l) The Corporation will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the
Series C Preferred Stock pursuant hereto; PROVIDED, HOWEVER, that the
Corporation shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issue or delivery of shares of
Common Stock or other securities or property in a name other than that of
the holder of the Series C Preferred Stock to be converted, and no such
issue or delivery shall be made unless and until the person requesting such
issue or delivery has paid to the Corporation the amount of any such tax or
established, to the reasonable satisfaction of the Corporation, that such
tax has been paid.
Section 8. RANKING. Any class or series of stock of the Corporation
shall be deemed to rank:
(a) prior to the Series C Preferred Stock, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to
the holders of Series C Preferred Stock;
(b) on a parity with the Series C Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution
or winding up, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be different from those
of the Series C Preferred Stock, if the holders of such class of stock or
series and the Series C Preferred Stock shall be entitled to the receipt of
dividends and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued and unpaid
dividends per share or liquidation preferences, without preference or
priority one over the other ("Parity Stock"); the Series A Preferred Stock
and the Series B Preferred Stock shall be Parity Stock with respect to the
Series C Preferred Stock; and
(c) junior to the Series C Preferred Stock, as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, if such stock or series shall be Common Stock or if the
holders of Series A Preferred Stock shall be entitled to receipt of
dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of
shares of such stock or series.
Section 9. VOTING. If and whenever six quarterly dividends
(whether or not consecutive) payable on the Series C Preferred Stock or any
series or class of Parity Stock shall be in arrears (which shall, with
respect to any such quarterly dividend, mean that any such dividend has not
been paid in full), whether or not earned or declared, the number of
directors then constituting the Board of Directors shall be increased by
two (if not already increased by reason of a similar arrearage with respect
to any Parity Stock) and the holders of shares of Series C Preferred Stock,
together with the holders of shares of every other series of Parity Stock
(any such other series, the "Voting Preferred Stock"), voting as a single
class regardless of series, shall be entitled to elect the two additional
directors to serve on the Board of Directors at any annual meeting of
stockholders or special meeting held in place thereof, or at a special
meeting of the holders of the Series C Preferred Stock and the Voting
Preferred Stock called as hereinafter provided. Whenever all arrears in
dividends on the Series C Preferred Stock and the Voting Preferred Stock
then outstanding shall have been paid and dividends thereon for the current
quarterly dividend period shall have been paid or declared and set apart
for payment, then the right of the holders of the Series C Preferred Stock
and the Voting Preferred Stock to elect such additional two directors shall
cease (but subject always to the same provision for the vesting of such
voting rights in the case of any similar future arrearages in six quarterly
dividends), and the terms of office of all persons elected as directors by
the holders of the Series C Preferred Stock and the Voting Preferred Stock
shall forthwith terminate and the number of the Board of Directors shall be
reduced accordingly. At any time after such voting power shall have been
so vested in the holders of shares of Series C Preferred Stock and the
Voting Preferred Stock, the secretary of the Corporation may, and upon the
written request of any holder of Series C Preferred Stock (addressed to the
secretary at the principal office of the corporation) shall, call a special
meeting of the holders of the Series C Preferred Stock and of the Voting
Preferred Stock for the election of the two directors to be elected by them
as herein provided, such call to be made by notice similar to that provided
in the Bylaws of the Corporation for a special meeting of the stockholders
or as required by law. If any such special meeting required to be called as
above provided shall not be called by the secretary within 20 days after
receipt of any such request, then any holder of shares of Series C
Preferred Stock may call such meeting, upon the notice above provided, and
for that purpose shall have access to the stock books of the Corporation.
The directors elected at any such special meeting shall hold office until
the next annual meeting of the stockholders or special meeting held in lieu
thereof if such office shall not have previously terminated as above
provided. If any vacancy shall occur among the directors elected by the
holders of the Series C Preferred Stock and the Voting Preferred Stock, a
successor shall be elected by the Board of Directors, upon the nomination
of the then-remaining director elected by the holders of the Series C
Preferred Stock and the Voting Preferred Stock or the successor of such
remaining director, to serve until the next annual meeting of the
stockholders or special meeting held in place thereof if such office shall
not have previously terminated as provided above.
So long as any shares of Series C Preferred Stock are outstanding, in
addition to any other vote or consent of stockholders required by law or by
the Articles of Incorporation, as amended, the affirmative vote of at least
66 2/3% of the votes entitled to be cast by the holders of the shares of
Series C Preferred Stock and the Voting Preferred Stock, at the time
outstanding, acting as a single class regardless of series, given in person
or by proxy, either in writing without a meeting or by vote at any meeting
called for the purpose, shall be necessary for effecting or validating:
(a) Any amendment, alteration or repeal of any of the provisions of
the Amendment to the Articles of Incorporation that materially adversely
affects the voting powers, rights or preferences of the holders of the
Series C Preferred Stock or the Voting Preferred Stock; PROVIDED, HOWEVER,
that the amendment of the provisions of the Articles of Incorporation so as
to authorize or create, or to increase the authorized amount of, any Junior
Stock or any shares of any class ranking on a parity with the Series C
Preferred Stock or the Voting Preferred Stock shall not be deemed to
materially adversely affect the voting powers, rights or preferences of the
holders of Series C Preferred Stock, and PROVIDED FURTHER, that if any such
amendment, alteration or repeal would materially adversely affect any
voting powers, rights or preferences of the Series C Preferred Stock or
another series of Voting Preferred Stock that are not enjoyed by some or
all of the other series which otherwise would be entitled to vote in
accordance herewith, the affirmative vote of at least 66 2/3% of the votes
entitled to be cast by the holders of all series similarly affected,
similarly given, shall be required in lieu of the affirmative vote of at
least 66 2/3% of the votes entitled to be cast by the holders of the shares
of Series C Preferred Stock and the Voting Preferred Stock which otherwise
would be entitled to vote in accordance herewith; or
(b) The authorization or creation of, or the increase in the
authorized amount of, any shares of any class or any security convertible
into shares of any class ranking prior to the Series C Preferred Stock in
the distribution of assets on any liquidation, dissolution or winding up of
the Corporation or in the payment of dividends; PROVIDED, HOWEVER, that no
such vote of the holders of Series C Preferred Stock shall be required if,
at or prior to the time when such amendment, alteration or repeal is to
take effect, or when the issuance of any such prior shares or convertible
security is to be made, as the case may be, provision is made for the
redemption of all shares of Series C Preferred Stock at the time
outstanding.
For purposes of the foregoing provisions of this Section 9, each share
of Series C Preferred Stock shall have one (1) vote per share, except that
when any other series of preferred stock shall have the right to vote with
the Series C Preferred Stock as a single class on any matter, then the
Series A Preferred Stock and such other series shall have with respect to
such matters one (1) vote per $25.00 of stated liquidation preference.
Except as otherwise required by applicable law or as set forth herein, the
shares of Series C Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers other
than as set forth herein, and the consent of the holders thereof shall not
be required for the taking of any corporate action.
Section 10. RECORD HOLDERS. The Corporation and the Transfer Agent
may deem and treat the record holder of any shares of Series C Preferred
Stock as the true and lawful owner thereof for all purposes, and neither
the Corporation nor the Transfer Agent shall be affected by any notice to
the contrary.
ARTICLE VI
The corporation shall have the power to enter into or become a partner
in any arrangement for sharing profits, by joint venture or otherwise, with
any person, firm, or corporation now or hereafter carrying on any business
which said corporation has the direct or incidental authority to pursue,
whenever in the judgment of the Board of Directors such action shall be for
the benefit of the corporation.
ARTICLE VII
The corporation shall have the power to enter into guaranties or
endorsements, and otherwise to act as surety whenever in the judgment of
the Board of Directors such action shall be for the benefit of the
corporation.
ARTICLE VIII
RESERVED
ARTICLE IX
The name and post office address of each of the applicants for the
corporation's original charter were as follows:
Kenneth H. Merry 1150 Glenn Avenue
Augusta, Georgia
Dorrah L. Nowell, Jr. 3136 Ramsgate Road
Augusta, Georgia
Harry C. Robinson 2911 Bransford Road
Augusta, Georgia
ARTICLE X
The corporation shall have all the powers, rights, and privileges
conferred upon corporations of like character by the present or any future
laws of the State of Georgia, in addition to the specific powers herein
enumerated.
ARTICLE XI
(a) No director of the corporation shall be personally liable to the
corporation or its shareholders for monetary damages for breach of his duty
of care or other duty as a director, provided that this provision shall
eliminate or limit the liability of a director only to the maximum extent
permitted by the Georgia Business Corporation Code or any successor law.
(b) Any repeal or modification of Article XI by the shareholders of
the corporation shall not adversely affect any right or protection of a
director of the corporation existing at the time of such repeal or
modification.
IN WITNESS WHEREOF, MERRY LAND & INVESTMENT COMPANY, INC. has caused
these Amended and Restated Articles of Incorporation to be executed, its
corporate seal affixed and the foregoing to be attested, all by duly
authorized officers on the ________ day of October, 1995.
MERRY LAND & INVESTMENT COMPANY,
INC.
[Corporate Seal] By:
--------------------------------
As Its:
ATTEST:
--------------------------------
As Its Secretary
<PAGE>
CERTIFICATE REGARDING
AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
MERRY LAND & INVESTMENT COMPANY, INC.
-------------------------------------
The undersigned, W. Hale Barrett, the Secretary of MERRY LAND &
INVESTMENT COMPANY, INC. (the "Corporation"), a Georgia corporation, does
hereby certify pursuant to Section 14-2-1007(d) of the Official Code of Georgia
Annotated (the "Code") the following:
(1) The Amended and Restated Articles of Incorporation of the
Corporation do not contain any amendments to the Articles of Incorporation
of the Corporation which would require shareholder approval.
(2) The name of the Corporation is MERRY LAND & INVESTMENT COMPANY,
INC.
(3) The text of each amendment adopted is as follows:
A. Article I was amended to delete references to the period
of the Corporation's existence and to delete reference to the
"petitioners", who initially petitioned the Superior Court of
Richmond County, Georgia for incorporation. The text of the
amended Article I appears above.
B. Articles II, VI, and X, the texts of which appear above,
are amended to delete references to the petitioners.
C. Pursuant to authority expressly vested in the Board of
Directors by Article V of the Articles of Incorporation, Article
V-A was amended to delete Section 10 thereof (which prohibited
the ownership of more than 10% of the outstanding Series A
Preferred Stock by one Person) and to renumber Section 11 as
Section 10.
D. Article VIII, which referred to the petitioners' presentation
of a name registration certificate, was deleted as unnecessary.
E. Various amendments inserted article numbers and/or
headings for each Article and made conforming changes to the
tense or syntax of various sentences consistent with the
foregoing. The text of each such amendment appears above.
(4) The amendments were duly approved by the Board of Directors
without shareholder approval in accordance with the provisions of Section
14-2-1002 and 14-2-1007 of the Code. The effective date of each amendment's
adoption is October 16, 1995.
IN WITNESS WHEREOF, the undersigned does hereby set his hand and seal
this _______ day of October, 1995.
___________________________(SEAL)
W. HALE BARRETT - Secretary
December 14, 1995
Writer's Direct Dial
706/828-2001
MERRY LAND & INVESTMENT COMPANY, INC.
624 Ellis Street
Augusta, Georgia 30901
Re: Shelf Registration Statement on Form S-3
Ladies & Gentlemen:
We have acted as counsel to Merry Land & Investment Company, Inc., a
Georgia corporation (the "Company"), in connection with the preparation of
the Registration Statement on Form S-3 (the "Registration Statement") filed
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to
the contemplated issuance by the Company from time to time of up to
$455,000,000 aggregate pubic offering price or the equivalent thereof in
one or more foreign currencies or composite currencies of (i) senior or
subordinated debt securities (the "Debt Securities"), which may be issued
pursuant to a Senior Debt Securities Indenture between the Company and
Signet Trust Company, as Trustee (as amended or supplemented, the "Senior
Indenture"), or a Subordinated Debt Securities Indenture between the
Company and Chemical Bank, as Trustee (as amended or supplemented, the
"Subordinated Indenture" and, together with the Senior Indenture, the
"Indentures"); (ii) shares of preferred stock, without par value per share
(the "Preferred Stock"), which may be issued in the form of depositary
shares (the "Depositary Shares") evidenced by depositary receipts (the
"Receipts"); (iii) shares of common stock of the Company, without par value
per share (the "Common Stock"); and (iv) warrants to purchase Common Stock
(the "Warrants").
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as we have deemed
necessary for the purpose of rendering this opinion.
On the basis of the foregoing, we are of the opinion that:
1. When (i) the Registration Statement and any required post-effective
amendment thereto have become effective under the Securities Act;
(ii) the Indentures have been duly executed and delivered; (iii) the terms
of the Debt Securities and of their issuance and sale have been duly
established in conformity with the Indentures relating to the Debt
Securities so as not to violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon the Company and
so as to comply with any requirement or restriction imposed by any court or
governmental or regulatory body having jurisdiction over the Company; and
(iv) the Debt Securities have been duly executed and authenticated in
accordance with the Indentures relating to the Debt Securities, and duly
issued and sold as contemplated by the Registration Statements and any
prospectus supplement relating thereto, the Debt Securities will constitute
valid and legally binding obligations of the Company enforceable in
accordance with their terms, subject to (a) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws now
or hereafter in effect relating to or affecting creditors rights generally,
and (b) general principles of equity (regardless of whether considered in a
proceeding at law or in equity).
2. When (i) the Registration Statement and any required post-effective
amendment thereto have become effective under the Securities Act;
(ii) the Deposit Agreement relating to the Depositary Shares has been duly
executed and delivered; (iii) the terms of the Depositary Shares and of
their issuance and sale have been duly established in conformity with the
Deposit Agreement relating to such Depositary Shares so as not to violate
any applicable law or result in a default under or breach of any agreement
or instrument binding upon the Company and so as to comply with any
requirement or restriction imposed by any court or governmental or
regulatory body having jurisdiction over the Company; (iv) the terms of the
Preferred Stock have been duly and properly authorized for issuance and
Articles of Amendment to the Articles of Incorporation of the Company
classifying the Preferred Stock and setting forth the terms thereof have
been filed; (v) such shares of Preferred Stock have been duly issued and
paid for in the manner contemplated in the Registration Statements and any
prospectus supplement relating thereto; and (vi) the Receipts evidencing
the Depositary Shares are duly issued against the deposit of the Preferred
Stock in accordance with the Deposit Agreement, such Receipts will be
validly issued and will entitle the holders thereof to the rights specified
therein and in the Deposit Agreement.
3. When (i) the Registration Statement and any required post-effective
amendment thereto have become effective under the Securities Act;
(ii) the Warrant Agreement relating to the Warrants (the "Warrant
Agreement") has been duly executed and delivered; (iii) the terms of the
Warrants and of their issuance and sale have been duly established in
conformity with the Warrant Agreement relating to such Warrants so as not
to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Company and so as to comply with
any governmental or regulatory body having jurisdiction over the Company;
and (iv) the Warrants have been duly executed and countersigned in
accordance with the Warrant Agreement relating to such Warrants, and issued
and sold in the form and in the manner contemplated in the Registration
Statement and any prospectus supplement relating thereto, such Warrants
will constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject to (a) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and other
similar laws nor or hereafter in effect relating to or affecting creditors'
rights generally, and (b) general principles of equity (regardless of
whether considered in a proceeding at law or in equity).
4. When (i) the Registration Statement and any required post-effective
amendment thereto have become effective under the Securities Act;
(ii) the terms of the Preferred Stock have been duly and properly
authorized for issuance and Articles of Amendment to the Articles of
Incorporation of the Company classifying the Preferred Stock and setting
forth the terms thereof have been filed; and (iii) such shares of Preferred
Stock have been duly issued and paid for in the manner contemplated in the
Registration Statement and any prospectus supplement relating thereto, such
shares of Preferred Stock will be validly issued, fully paid and
nonassessable.
5. When (i) the Registration Statement and any required post-effective
amendment thereto have become effective under the Securities Act;
(ii) the shares of Common Stock have been duly and properly authorized for
issuance; and (iii) the shares of Common Stock have been duly issued, sold
and delivered as contemplated in the Registration Statement and any
prospectus supplement relating thereto, the shares of Common Stock
(including any Common Stock duly issued (x) upon the exchange or conversion
of any shares of Preferred Stock that are exchangeable or convertible into
Common Stock, (y) upon the exercise of any Warrants exercisable for Common
Stock or (z) upon the exchange or conversion of any Debt Securities that
are exchangeable or convertible into Common Stock), will be validly issued,
fully paid and nonassessable.
We are members of the Bar of the State of Georgia and the foregoing
opinion is limited to the laws of the State of Georgia and the federal laws
of the United States of America.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the heading
"Legal Opinions." In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of
the Securities Act.
/S/
HULL, TOWILL, NORMAN &
BARRETT, P.C.
<EXHIBIT 23-B>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation
by reference of our report dated September 16, 1994 included in the report
of Merry Land & Investment Company, Inc. on Form 8-K/A filed February 7,
1995, the incorporation by reference of our report dated January 13, 1995
included in the Company's Form 8-K filed on February 14, 1995, the
incorporation by reference of our report dated May 24, 1995 included in the
Company's Form 8-K filed on June 19, 1995, the incorporation by reference
of our report dated May 24, 1995 included in the Company's Form 8-K/A filed
on June 21, 1995, the incorporation by reference of our reports dated May
24, 1995 and August 4, 1995 included in the Company's Form 8-K/A filed
September 18, 1995, the incorporation by reference of our report dated
October 13, 1995 included in the Company's Form 8-K/A filed on December 1,
1995, the incorporation by reference of our reports dated January 13, 1995
included in the Company's Form 10-K for the year ended December 31, 1994,
and to all references to our firm included in or made a part of this
Registration Statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Atlanta, Georgia
December 14, 1995
