<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 17, 1996
REGISTRATION NO. 333-07209
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
SECURITIES ACT OF 1933
---------------------
AMERICAN BANKERS INSURANCE GROUP, INC.
(Exact name of Registrant as Specified in Charter)
<TABLE>
<S> <C>
FLORIDA 59-1985922
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
11222 QUAIL ROOST DRIVE
MIAMI, FLORIDA 33157-6596
(305) 253-2244
(Address including zip code, telephone number, including area code, of
Registrant's principal executive offices)
LEONARDO GARCIA
SECRETARY
11222 QUAIL ROOST DRIVE
MIAMI, FLORIDA 33157-6596
(305) 253-2244
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
COPY TO:
<TABLE>
<S> <C>
JOSEPHINE CICCHETTI, ESQ. JONATHAN L. FREEDMAN, ESQ.
JORDEN BURT BERENSON & JOHNSON LLP DEWEY BALLANTINE
777 BRICKELL AVENUE, SUITE 500 1301 AVENUE OF THE AMERICAS
MIAMI, FLORIDA 33131-2803 NEW YORK, NEW YORK 10019-6092
(305) 371-2600 (212) 259-8000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
---------------------
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.
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<PAGE> 2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable ground to believe that it meets all
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
its Form S-3 Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Miami, State of Florida
on the 17th day of July, 1996.
AMERICAN BANKERS INSURANCE GROUP, INC.
By: /s/ Floyd G. Denison
-------------------------------
Floyd G. Denison
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Form S-3 Registration Statement has been signed by the following
persons in the capacities indicated on July 17, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ----------------------------------------------
<C> <S>
* Chairman of the Board
- ---------------------------------------------
R. Kirk Landon
* Vice Chairman of the Board, Chief Executive
- --------------------------------------------- Officer & President
Gerald N. Gaston
* Chief Accounting Officer, Chief Financial
- --------------------------------------------- Officer, Vice President and Treasurer
Arthur W. Heggen
* Director
- ---------------------------------------------
William H. Allen, Jr.
* Director
- ---------------------------------------------
Nicholas A. Buoniconti
* Director
- ---------------------------------------------
Armando M. Codina
* Director
- ---------------------------------------------
Peter J. Dolara
</TABLE>
II-3
<PAGE> 3
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ----------------------------------------------
<C> <S>
* Director
- ---------------------------------------------
Daryl L. Jones
* Director
- ---------------------------------------------
James F. Jorden
* Director
- ---------------------------------------------
Jack F. Kemp
* Director
- ---------------------------------------------
Malcolm G. MacNeill
* Director
- ---------------------------------------------
Eugene M. Matalene, Jr.
* Director
- ---------------------------------------------
Albert H. Nahmad
* Director
- ---------------------------------------------
Nicholas J. St. George
* Director
- ---------------------------------------------
Robert C. Strauss
* Director
- ---------------------------------------------
George E. Williamson
*By: /s/ Floyd G. Denison
----------------------------------------
Floyd G. Denison, Attorney-in-fact
</TABLE>
II-4
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------------------------------------------------------------------------------
<C> <C> <S>
1 -- Form of Underwriting Agreement*
4 -- Form of Third Amended and Restated Articles of Incorporation (including designation
for the Convertible Preferred Stock)**
5 -- Opinion of Jorden Burt Berenson & Johnson LLP**
12 -- Schedule of Computation of Ratio of Earnings to Fixed Charges*
23.1 -- Consent of Price Waterhouse LLP*
23.2 -- Consent of Jorden Burt Berenson & Johnson LLP (included in Exhibit 5)**
24 -- Power of Attorney*
27 -- Financial Data Schedule*
28 -- Information from reports furnished to State Insurance regulatory authorities*
</TABLE>
- ---------------
* Previously filed.
** Filed herewith.
<PAGE> 1
EXHIBIT 4
FORM OF
THIRD AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
AMERICAN BANKERS INSURANCE GROUP, INC.
ARTICLE I - NAME
The name of the Corporation is American Bankers Insurance Group, Inc.
ARTICLE II - DURATION
The Corporation shall exist perpetually until dissolved according to law.
ARTICLE III - PURPOSE
The Corporation shall be authorized to exercise and enjoy all powers, rights,
and privileges granted by the laws of the State of Florida to corporations
organized thereunder, and all the powers conferred by all acts hereafter
amendatory of or supplemental to the laws of the State of Florida.
ARTICLE IV - STATED CAPITAL
The Corporation shall be authorized to issue two classes of shares of stock to
be designated, respectively, "Common Stock" and "Preferred Stock"; the total
number of shares which the Corporation shall have authority to issue is
38,500,000; the total number of shares of Common Stock shall be 35,000,000 and
each such share shall have a par value of One Dollar ($1.00); and the total
number of shares of Preferred Stock shall be 3,500,000 and each share shall be
without par value.
Each outstanding share of Common Stock, regardless of class, shall be entitled
to one (1) vote on each matter submitted to a vote at a meeting of
shareholders. Shares of Common Stock may be issued for such consideration,
having a value not less than the par value of the shares issued therefor, as is
determined from time to time by the Board of Directors, to be paid, in whole or
in part, in cash or other property, tangible or intangible, or in labor or then
services actually performed for the Corporation. Shares of Common Stock may
not be issued until the full amount of the consideration therefor has been
paid. Thereafter, such shares shall be deemed to be paid and non-assessable.
The shares of Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is expressly vested with authority to fix by
resolution or resolutions the designations and the powers, preferences and
relative, participating, optional or other special rights, and qualifications,
limitations and restrictions thereof, including, without limitation the voting
powers, if any, the dividend rate, conversion rights, redemption price, or
liquidation preference, of any series of shares of Preferred Stock, and to fix
the number of shares constituting any such series, and to increase or decrease
the number of shares of any such series (but not below the number of shares
thereof then
<PAGE> 2
outstanding). In case the number of shares of any such series shall be so
decreased, the shares constituting such decrease shall resume the status which
they had prior to the adoption of the resolution or resolutions originally
fixing the number of shares of such series."
SERIES A PARTICIPATING PREFERRED STOCK
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Participating Preferred Stock." The shares constituting
such series shall be without par value. The number of shares constituting such
series shall be 350,000.
Section 2. Dividends and Distribution.
(A) Subject to the prior and superior rights of the holders of any shares
of any series of Preferred Stock ranking prior and superior to the shares of
Series A Participating Preferred Stock with respect to dividends, the holders
of shares of Series A Participating Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on the
last day of March, June, September, and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share
or fraction of a share of Series A Participating Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of (a) $3.125 or
(b) Subject to the provisions for adjustment hereinafter set forth, 100 times
the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value $1.00 per share, of the
Corporation, (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Participating Preferred Stock. In the event the Corporation shall at any time
after February 24, 1988 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series A Participating Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series
A Participating Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $3.125 per share on the Series A
Participating Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
<PAGE> 3
(C) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A Participating Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Series A Participating
Preferred Stock, unless (i) the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or (ii) the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series
A Participating Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Participating Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series A Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 60 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Participating
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Participating Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the shareholders of
the Corporation. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the number of votes per share to which holders of shares of
Series A Participating Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) Except as otherwise provided by the Third Amended and Restated
Articles of Incorporation of the Corporation, or by law, the holders of shares
of Series A Participating Preferred Stock and the holders of shares of Common
Stock (and any other capital stock of the Corporation at the time entitled
thereto) shall vote together as one class on all matters submitted to a vote
of shareholders of the Corporation.
(C) Except as set forth herein, holders of Series A Participating Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on a Series A Participating Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued
<PAGE> 4
and unpaid dividends and distributions, whether or not declared, on shares of
Series A Participating Preferred Stock outstanding shall have been paid in full,
the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Participating Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding-up) with the Series A Participating
Preferred Stock, except dividends paid ratably on the Series A
Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of
any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Participating
Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in exchange
for shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series A
Participating Preferred Stock;
(iv) purchase or otherwise acquire for consideration any shares of Series
A Participating Preferred Stock, or any shares of stock ranking on a
parity with the Series A Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon
such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Re-acquired Shares. Any shares of Series A Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. Liquidation, Dissolution or Winding-Up.
<PAGE> 5
(A) Upon any liquidation (voluntary or otherwise), dissolution or winding
up of the Corporation, no distribution shall be made to the holders of shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Participating
Preferred Stock shall have received $100.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation Preference").
Following the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the holders of shares
of Series A Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
paragraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii)
the "Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Participating Preferred Stock and Common Stock,
respectively, holders of Series A Participating Preferred Stock and holders of
shares of Common Stock shall receive their ratable and proportionate share of
the remaining assets to be distributed in the ratio of the Adjustment Number to
one (1) with respect to such Series A Participating Preferred Stock and Common
Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of Preferred Stock, if any, which
rank on a parity with the Series A Participating Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration
<PAGE> 6
Date (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Participating Preferred
Stock shall not be redeemable.
Section 9. Ranking. The Series A Participating Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
Section 10. Amendment. The Third Amended and Restated Articles of
Incorporation of the Corporation, any further amendments thereto,
and any certificate amendatory thereof or supplemental thereto shall not be
amended or further amended in any manner which would materially alter or change
the powers, preferences or special rights of the Series A Participating
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of such percentage of the outstanding shares of Series A
Participating Preferred Stock, voting separately as a class, as may be required
under (i) the Florida General Corporation Act or (ii) the Third Amended and
Restated Articles of Incorporation of the Corporation, whichever requires a
greater percentage.
Section 11. Fractional Shares. Series A Participating Preferred Stock may
be issued in fractions of a share which shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Participating Preferred Stock.
$_____ SERIES B CUMULATIVE CONVERTIBLE PREFERRED STOCK
Section I: Designation of Series and Number of Shares to be Initially
Issuable Therein. This series of Preferred Stock shall be designated
"$_________ Series B Cumulative Convertible Preferred Stock" (hereinafter
called the "Convertible Preferred Stock"), no par value, of which 2,300,000
shares shall be initially issuable.
Section II: Rank. All shares of Convertible Preferred Stock shall rank
prior, both as to payment of dividends and as to distributions of assets upon
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, to all Junior Stock.
Section III. Dividends. The holders of Convertible Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors out
of funds at the time legally available therefor, dividends at the rate of
$__________ per annum per share, and no more, which shall be fully cumulative,
shall accrue without interest from the date of initial issuance of such shares
of Convertible
<PAGE> 7
Preferred Stock (on a daily basis whether or not such amounts would be available
at that time for distribution to holders of shares of Convertible Preferred
Stock) and shall be payable in cash quarterly in arrears on _____________,
____________, ___________ and _____________ of each year commencing
____________, 1996 (with respect to the period from such date of initial
issuance to ______________, 1996) (except that if any such date is not a
Business Day, then such dividend shall be payable on the next Business Day) to
holders of record as they appear upon the stock transfer books of the
Corporation on such record dates, not more than sixty days nor less than ten
days preceding the payment dates for such dividends, as are fixed by the Board
of Directors (or, to the extent permitted by applicable law, a duly authorized
committee thereof). In no event shall any such dividend record date be fixed
less than (a) six Business Days prior to any date fixed for the redemption of
the Convertible Preferred Stock or (b) with respect to the dividend payment date
occurring on _________, less than ten Business Days prior to any date fixed for
such redemption. Subject to the next paragraph of this Section III, dividends
on account of arrears for any past dividend period may be declared and paid at
any time, without reference to any regular dividend payment date. The amount of
dividends payable per share of Convertible Preferred Stock for each quarterly
dividend period shall be computed by dividing the annual dividend amount by
four. The amount of dividends payable for the initial dividend period and any
period shorter than a full quarterly period shall be computed on the basis of a
360-day year of twelve 30-day months. No interest shall be payable in respect
of any dividend payment on the Convertible Preferred Stock which may be in
arrears.
No dividends or other distributions, other than dividends payable solely
in shares of Junior Stock, shall be declared, paid or set apart for payment on
shares of Junior Dividend Stock, unless and until all accrued and unpaid
dividends on the Convertible Preferred Stock for all dividend payment periods
ending on or before the payment date of such dividends or other distributions
on Junior Dividend Stock shall have been paid or declared and set apart for
payment.
No payment on account of the purchase, redemption, retirement or other
acquisition of shares of Junior Dividend Stock or Junior Liquidation Stock
shall be made unless and until all accrued and unpaid dividends on the
Convertible Preferred Stock for all dividend payment periods ending on or
before such payment for such Junior Dividend Stock or Junior Liquidation Stock
shall have been paid or declared and set apart for payment; provided, however,
that the restrictions set forth in this sentence shall not apply to the
purchase, redemption, retirement, or other acquisition of Junior Dividend Stock
or Junior Liquidation Stock either (A) pursuant to any employee or director
incentive or benefit plan or arrangement (including any employment, severance
or consulting agreement) of the Corporation or any subsidiary of the
Corporation heretofore or hereafter adopted or (B) in exchange solely for
Junior Stock.
No full dividends shall be declared, paid or set apart for payment on
shares of Parity Dividend Stock for any period unless full cumulative dividends
have been, or contemporaneously are, paid or declared and set apart for such
payment on the Convertible Preferred Stock for all dividend payment periods
ending on or before the payment date of such dividends on Parity Dividend
Stock. No dividends shall be paid on Parity Dividend Stock except on dates on
which dividends are paid on the Convertible Preferred Stock. All dividends
paid or declared and set apart for payment on the Convertible Preferred Stock
and the Parity Dividend Stock shall be paid or declared and set apart for
<PAGE> 8
payment pro rata so that the amount of dividends paid or declared and set apart
for payment per share on the Convertible Preferred Stock and the Parity Dividend
Stock on any date shall in all cases bear to each other the same ratio that
accrued and unpaid dividends to the date of payment on the Convertible Preferred
Stock and the Parity Dividend Stock bear to each other.
No payment on account of the purchase, redemption, retirement or other
acquisition of shares of Junior Stock, Parity Dividend Stock or Parity
Liquidation Stock shall be made, and, other than dividends to the extent
permitted by the preceding paragraph, no distributions shall be declared, paid
or set apart for payment on shares of Parity Dividend Stock or Parity
Liquidation Stock, unless and until all accrued and unpaid dividends on the
Convertible Preferred Stock for all dividend payment periods ending on or
before such payment for, or the payment date of such distributions on, such
Parity Dividend Stock or Parity Liquidation Stock shall have been paid or
declared and set apart for payment; provided, however, that the restrictions
set forth in this sentence shall not apply to the purchase, redemption,
retirement, or other acquisition of Parity Dividend Stock or Parity Liquidation
Stock either (A) pursuant to any employee or director incentive or benefit plan
or arrangement (including any employment, severance or consulting agreement) of
the Corporation or any subsidiary of the Corporation hereafter adopted or (B)
in exchange solely for Junior Stock.
Any reference to "distribution" contained in this Section III shall not be
deemed, except as expressly stated, to include any distribution made in
connection with any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary.
Section IV. Liquidation Preference. In the event of a liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of shares of Convertible Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to
shareholders an amount equal to the dividends accrued and unpaid on such shares
on the date of final distribution to such holders, whether or not declared,
without interest, plus a sum equal to $50 per share, and no more, before any
payment shall be made or any assets distributed to the holders of shares of
Junior Liquidation Stock; provided, however, that such rights shall accrue to
the holders of shares of Convertible Preferred Stock only with respect to
assets (if any) remaining after the Corporation's payment obligations with
respect to the liquidation preferences of the shares of any class or series of
the Corporation's capital stock hereafter issued ranking prior to the
Convertible Preferred Stock as to distributions of assets upon such
liquidation, dissolution or winding up ("Senior Liquidation Stock") are fully
met. The entire assets of the Corporation available for distribution to
shareholders after the liquidation preferences of the shares of Senior
Liquidation Stock are fully met shall be distributed ratably among the holders
of the Convertible Preferred Stock and any Parity Liquidation Stock in
proportion to the respective preferential amounts to which each is entitled
(but only to the extent of such preferential amounts). After payment in full
of the liquidation preferences of the share of the Convertible Preferred Stock,
the holders of such shares shall not be entitled to any further participation
in any distribution of assets by the Corporation. The voluntary sale, lease,
exchange or transfer of all or substantially all of the Company's property or
assets to, or its consolidation or merger with one or more corporations shall
not be deemed to be considered a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation.
<PAGE> 9
Section V. Redemption at Option of the Corporation. The Convertible
Preferred Stock may not be redeemed by the Corporation prior to ________, 2000.
On and after such date, the Convertible Preferred Stock may be redeemed by the
Corporation, at its option on any date set by the Board of Directors, in whole
or in part at any time, subject to the limitations, if any, imposed by the
Florida Business Corporation Act, for an amount in cash equal to the Redemption
Price.
In case of the redemption of less than all of the then outstanding
Convertible Preferred Stock, the Corporation shall designate by lot, or in such
other manner as the Board of Directors may determine to be fair, the shares to
be redeemed, or shall effect such redemption pro rata. Notwithstanding the
foregoing, the Corporation shall not redeem less than all of the Convertible
Preferred Stock at any time outstanding until all dividends accrued and in
arrears upon all Convertible Preferred Stock then outstanding shall have been
paid in full for all past dividend periods.
Not more than ninety nor less than thirty days prior to the date fixed for
redemption by the Board of Directors, notice thereof by first class mail,
postage prepaid, shall be given to the holders of record of the shares of
Convertible Preferred Stock to be redeemed, addressed to such holders at their
last addresses as shown upon the stock transfer books of the Corporation. Each
such notice of redemption shall specify the date fixed for redemption, the
Redemption Price, the place or places of payment, that payment will be made
upon presentation and surrender of the shares of Convertible Preferred Stock,
that on and after the date fixed for redemption dividends will cease to accrue
on such shares, the then-effective conversation price pursuant to Section VI,
and that the right of holders to convert shares of Convertible Preferred Stock
shall terminate at 5:00 p.m. New York City time on the Business Day prior to
the date fixed for redemption and if such conversion right is not exercised
prior to such time, such conversion right will be lost (unless the Corporation
defaults in the payment of the Redemption Price).
Any notice that is mailed as herein provided shall be conclusively
presumed to have been duly given, whether or not the holder of shares of
Convertible Preferred Stock receives such notice; and failure to give such
notice by mail, or any defect in such notice, to the holders of any shares
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Convertible Preferred Stock. On or after
the date fixed for redemption as stated in such notice, each holder of the
shares called for redemption shall surrender the certificate evidencing such
shares to the Corporation at the place designated in such notice and shall
thereupon be entitled to receive payment of the Redemption Price. If less than
all the shares evidenced by any such surrendered certificate are redeemed, a
new certificate shall be issued evidencing the unredeemed shares.
No fractional shares of Convertible Preferred Stock shall be issued
upon redemption of less than all Convertible Preferred Stock. If more than one
certificate evidencing shares of Convertible Preferred Stock shall be held at
one time by the same holder, the number of full shares issuable upon redemption
of less than all of such shares of Convertible Preferred Stock shall be
computed on the basis of the aggregate number of shares of Convertible
Preferred Stock so held. Instead of any fractional share of Convertible
Preferred Stock that would otherwise be issuable to a holder upon redemption of
less than all shares of Convertible Preferred Stock, the Corporation shall pay
a cash adjustment in respect of such fractional share in an amount equal to the
same fraction of the fair value
<PAGE> 10
per share of Convertible Preferred Stock (as determined in good faith by the
Board of Directors or in any manner prescribed by the Board of Directors) at the
close of business on the date fixed for redemption.
Notice having been given as aforesaid, if, on the date fixed for
redemption, funds necessary for the redemption shall be available therefor and
shall have been deposited with a bank or trust company with irrevocable
instructions and authority to pay the Redemption Price to the holders of the
Convertible Preferred Stock, then, notwithstanding that the certificates
evidencing any shares so called for redemption shall not have been surrendered,
dividends with respect to the shares so called shall cease to accrue on and
after the date fixed for redemption, such shares shall no longer be deemed
outstanding, the holders thereof shall cease to be shareholders of the
Corporation and all rights whatsoever with respect to the shares so called for
redemption (except the right of the holders to receive the Redemption Price
without interest upon surrender of their certificates therefor) shall
terminate. If funds legally available for such purpose are not sufficient for
redemption of the shares of Convertible Preferred Stock which were to be
redeemed, then the certificates evidencing such shares shall be deemed not to
be surrendered, such shares shall remain outstanding, and the right of holders
of shares of Convertible Preferred Stock thereafter shall continue to be only
those of a holder of shares of the Convertible Preferred Stock.
Upon an optional redemption by the Corporation, if at any time the
Corporation does not pay amounts sufficient to redeem all Convertible Preferred
Stock, then such funds which are paid shall be applied to redeem such shares of
Convertible Preferred Stock as the Corporation may designate by lot or in such
other manner as the Board of Directors may determine to be fair, or such
redemption shall be effected pro rata.
The shares of Convertible Preferred Stock shall not be subject to the
operation of any mandatory purchase, retirement or sinking fund.
Section VI. Conversion Privilege.
(a) Right of Conversion. Each share of Convertible Preferred Stock shall
be convertible at the option of the holder thereof, at any time prior to the
5:00 p.m. New York City time on the Business Day prior to the date fixed for
redemption of such share as herein provided, into fully paid and nonassessable
shares of Common Stock, at the rate of that number of shares of Common Stock
for each full share of Convertible Preferred Stock that is equal to $50 divided
by the conversion price applicable per share of Common Stock, or into such
additional or other securities, cash or property and at such other rates as
required in accordance with the provisions of this Section VI. For purposes of
this resolution, the "conversion price" applicable per share of Common Stock
shall initially be equal to $______________ and shall be adjusted from time to
time in accordance with the provisions of this Section VI.
(b) Conversion Procedures. Any holder of shares of Convertible Preferred
Stock desiring to convert such shares into Common Stock shall surrender the
certificate or certificates evidencing such shares of Convertible Preferred
Stock at the office of the transfer agent for the Convertible Preferred Stock,
which certificate or certificates, if the Corporation shall so require, shall
be duly
<PAGE> 11
endorsed to the Corporation or in blank, or accompanied by proper instruments of
transfer to the Corporation or in blank, accompanied by irrevocable written
notice to the Corporation that the holder elects so to convert such shares of
Convertible Preferred Stock and specifying the name or names (with address or
addresses) in which a certificate or certificates evidencing shares of Common
Stock are to be issued.
No payments or adjustments in respect of dividends on shares of
Convertible Preferred Stock surrendered for conversion or on account of any
dividend on the Common Stock issued upon conversion shall be made upon the
conversion of any shares of Convertible Preferred Stock; provided, however,
that:
(i) if a dividend record date fixed for the Convertible Preferred
Stock as established herein results in a holder who undertakes
conversion being eligible to receive on any dividend payment date
both a dividend on the Convertible Preferred Stock and a dividend
on the Common Stock issued upon conversion thereof, then such
holder shall be entitled to receive only the higher of such
dividend amounts; and
(ii) if the Corporation shall, by dividend or otherwise, declare or
make a distribution on its Common Stock referred to in Section
VI(c)(iv) or VI(c)(v) (including, without limitation, dividends or
distributions referred to in the last sentence of Section
VI(c)(iv)), the holder of each share of Convertible Preferred
Stock, upon the conversion thereof subsequent to the close of
business on the date fixed for the determination of shareholders
entitled to receive such distribution and prior to the
effectiveness of the conversion price adjustment in respect of such
distribution, shall also be entitled to receive for each share of
Common Stock into which such share of Convertible Preferred Stock
is converted, the portion of the shares of Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash
and assets so distributed applicable to one share of Common Stock;
provided, however, that at the election of the Corporation (whose
election shall be evidenced by a resolution of the Board of
Directors) with respect to all holders so converting, the
Corporation may, in lieu of distributing to such holder any portion
of such distribution not consisting of cash or securities of the
Corporation, pay such holder an amount in cash equal to the fair
market value thereof (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in
a resolution of the Board of Directors). If any conversion of a
share of Convertible Preferred Stock described in the immediately
preceding sentence occurs prior to the payment date for a
distribution to holders of Common Stock which the holder of the
share of Convertible Preferred Stock so converted is entitled to
receive in accordance with the immediately preceding sentence, the
Corporation may elect (such election to be evidenced by a
resolution of the Board of Directors) to distribute to such holder
a due bill for the shares of Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash or assets
to which such holder is so entitled, provided that such due bill
(i) meets any applicable requirements of the principal national
securities exchange or other market on which the Common Stock
is then traded and (ii) requires payment or delivery of such shares
of Common Stock, rights, warrants,
<PAGE> 12
evidences of indebtedness, shares of capital stock, cash or assets
no later than the date of payment or delivery thereof to holders of
shares of Common Stock receiving such distribution.
The Corporation shall, as soon as practicable after such deposit of
certificates evidencing shares of Convertible Preferred Stock accompanied by
the written notice and compliance with any other conditions herein contained,
deliver at such office of such transfer agent to the person for whose account
such shares of Convertible Preferred Stock were so surrendered, or to the
nominee or nominees of such person, certificates evidencing the number of full
shares of Common Stock to which such person shall be entitled as aforesaid,
together with a cash adjustment in respect of any fraction of a share of Common
Stock as hereinafter provided. Such conversion shall be deemed to have been
made as of the date of such surrender of the shares of Convertible Preferred
Stock to be converted, and the person or persons entitled to receive the Common
Stock deliverable upon conversion of such Convertible Preferred Stock shall be
treated for all purposes as the record holder or holders of such Common Stock
on such date.
(c) Adjustment of Conversion Price. The conversion price at which a share
of Convertible Preferred Stock is convertible into Common Stock shall be
subject to adjustment from time to time as follows:
(i) In case the Corporation shall pay or make a dividend or other
distribution on its Common Stock exclusively in Common Stock or shall pay
or make a dividend or other distribution on any other class or series of
capital stock of the Corporation which dividend or distribution includes
Common Stock, the conversion price in effect at the opening of business
on the day following the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution shall be reduced
by multiplying such conversion price by: A/(A + B), where:
A = the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination; and
B = the total number of shares of Common Stock constituting such
dividend or other distribution,
such reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination. For
purposes of this subparagraph (i), the number of shares of Common Stock
at any time outstanding shall not include shares held in the treasury of
the Corporation. The Corporation shall not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Corporation.
(ii) In case the Corporation shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall
otherwise issue to all holders of its Common Stock, rights or warrants
entitling the holders thereof to subscribe for or purchase shares of
Common Stock at a price per share less than the Current Market Price Per
Share of the Common Stock on the date fixed for the determination of
shareholders entitled to
<PAGE> 13
receive such rights or warrants, the conversion price in effect at the
opening of business on the day following the date fixed for such
determination shall be reduced by multiplying such conversion price by: (A
+ B)/(A + C), where:
A = the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination,
B = the number of shares of Common Stock which the aggregate of the
offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such
Current Market Price Per Share, and
C = the number of shares of Common Stock so offered for
subscription or purchase,
such reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination.
In case any rights or warrants referred to in this subparagraph (ii) in
respect of which an adjustment shall have been made shall expire
unexercised within 45 days after the shares shall have been distributed
or issued by the Corporation the conversion price shall be readjusted at
the time of such expiration to the conversion price that would have been
in effect if no adjustment had been made on account of the distribution
or issuance of such expired rights or warrants. For the purposes of this
Section VI(c)(ii), if both (A) a Distribution Date (as defined in Section
3(a) of the Rights Agreement) and (B) an event set forth in Section
11(a)(ii) or 13(a) of the Rights Agreement shall have occurred, then the
later to occur of such events shall be deemed to constitute an issuance
of rights to purchase shares of the related common stock.
(iii) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the conversion price in
effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the conversion price in
effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately increased,
such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day
upon which such subdivision or combination becomes effective.
(iv) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness, shares of any class or series of capital stock, cash or
assets (including securities, but excluding any rights or warrants
referred to in subparagraph (ii) of this Section VI(c), any dividend or
distribution paid exclusively in cash and any dividend or distribution
referred to in subparagraph (i) of this Section VI(c)), the conversion
price shall be reduced so that the same shall equal the price determined
by
<PAGE> 14
multiplying the conversion price in effect immediately prior to the
effectiveness of the conversion price reduction contemplated by this
subparagraph (iv) by: (A - B)/A, where:
A = the Current Market Price Per Share of the Common Stock on the
date fixed for the payment of such distribution (the
"Reference Date"), and
B = the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors), on
the Reference Date, of the portion of the evidence of
indebtedness, shares of capital stock, cash and assets so
distributed applicable to one share of Common Stock,
such reduction to become effective immediately prior to the opening of
business on the day following the Reference Date, provided, however, that
for purposes of this subparagraph (iv), any dividend or distribution that
includes shares of Common Stock or rights or warrants to subscribe for or
purchase shares of Common Stock shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, cash, assets
or shares of capital stock other than such shares of Common Stock or
rights or warrants (making any further conversion price reduction
required by this subparagraph (iv)) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (making any further conversion price reduction required by
subparagraph (i) or (ii) of this Section VI(c), except (A) the Reference
Date of such dividend or distribution as defined in this subparagraph
(iv) shall be substituted as "the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution",
"the date fixed for the determination of shareholders entitled to receive
such rights or warrants" and "the date fixed for such determination"
within the meaning of subparagraph (i) and (ii) of this Section VI(c) and
(B) any shares of Common Stock included in such dividend or distribution
shall not be deemed "outstanding at the close of business on the date
fixed for such determination" within the meaning of subparagraph (i) of
this Section VI(c)). If the Board of Directors determines the fair
market value of any distribution for purposes of this subparagraph (iv)
by reference to the actual or when issued trading market for any
securities comprising such distribution, it must in doing so consider the
prices in such market over the same period used in computing the Current
Market Price Per Share of Common Stock.
(v) In case the Corporation shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding (A) cash
that is part of the distribution referred to in (iv) above and, (B) in
the case of any quarterly cash dividend on the Common Stock, the portion
thereof that does not exceed the per share amount of the next preceding
quarterly cash dividend on the Common Stock (as adjusted to appropriately
reflect any of the events referred to in subparagraph (i), (ii), (iii),
(iv) and (v) of this Section VI(c)), or all of such quarterly cash
dividend if the amount thereof per share amount of Common Stock
multiplied by four does not exceed 15% of the Current Market Price Per
Share of the Common Stock on the Trading Day next preceding the date of
declaration of such dividend), the conversion price shall be reduced so
that the same shall equal the conversion price in
<PAGE> 15
effect immediately prior to the effectiveness of the conversion price
reduction contemplated by this subparagraph (v) by: (A - B)/A, where:
A = the Current Market Price Per Share of the Common Stock on the
date fixed for the payment of such distribution, and
B = the amount of cash so distributed and not excluded as provided
above applicable to one share of Common Stock,
such reduction to become effective immediately prior to the opening of
business on the day following the date fixed for the payment of such
distribution.
(vi) No adjustment in the conversion price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
the conversion price; provided, however, that any adjustments which by
reason of this subparagraph (vi) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
(vii) Whenever the conversion price is adjusted as herein provided:
(1) the Corporation shall compute the adjusted conversion price and shall
prepare a certificate signed by the Treasurer of the Corporation setting
forth the adjusted conversion price and showing in reasonable detail the
facts upon which such adjustment in based, and such certificate shall
forthwith be filed with the transfer agent for the Convertible Preferred
Stock; and (2) a notice stating that the conversion price has been
adjusted and setting forth the adjusted conversion price shall forthwith
be required, and as soon as practicable after it is required, such notice
shall be mailed by the Corporation to all record holders of shares of
Convertible Preferred Stock at their last addresses as they shall appear
upon the stock transfer books of the Corporation.
(viii) The Corporation from time to time may reduce the conversion
price by any amount for any period of time if the period is at least
twenty days, the reduction is irrevocable during the period and the Board
of Directors of the Corporation shall have made a determination that such
reduction would be in the best interest of the Corporation, which
determination shall be conclusive. Whenever the conversion price is
reduced pursuant to the preceding sentence, the Corporation shall mail to
holders of record of the Convertible Preferred Stock a notice of the
reduction at least fifteen days prior to the date the reduced conversion
price takes effect, and such notice shall state the reduced conversion
price and the period it will be in effect.
(d) No Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of Convertible Preferred Stock. If more than one
certificate evidencing shares of Convertible Preferred Stock shall be
surrendered for conversion at one time by the same holder, the number of full
shares issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of Convertible Preferred Stock so surrendered.
Instead of any fractional share of Common Stock that would otherwise be issuable
to a holder upon conversion of any shares of Convertible Preferred Stock, the
Corporation shall pay a cash adjustment in respect of such
<PAGE> 16
fractional share in an amount equal to the same fraction of the market price per
share of Common Stock (as determined by the Board of Directors or in any manner
prescribed by the Board of Directors, which, so long as the Common Stock is
listed on the New York Stock Exchange or quoted on the Nasdaq National Market
System, shall be the reported last sale price regular way) at the close of
business on the day of conversion.
(e) Reclassification, Consolidation, Merger or Sale of Assets. In the
event that the Corporation shall be a party to any transaction (including
without limitation any recapitalization or reclassification of the Common Stock
(other than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or combination of
the Common Stock), any consolidation of the Corporation with, or merger of the
Corporation into, any other person, any merger of another person into the
Corporation (other than a merger which does not result in a reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Corporation), any sale or transfer of all or substantially all of the
assets of the Corporation or any share exchange) pursuant to which the Common
Stock is converted into the right to receive other securities, cash or other
property, then lawful provisions shall be made as part of the terms of such
transaction whereby the holder of each share of Convertible Preferred Stock
then outstanding shall have the right thereafter to convert such share only
into (i) in the case of any such transaction other than a Common Stock
Fundamental Change and subject to funds being legally available for such
purpose under applicable law at the time of such conversion, the kind and
amount of securities, cash and other property receivable upon such transaction
by a holder of the number of shares of Common Stock of the Corporation into
which such share of Convertible Preferred Stock might have been converted
immediately prior to such transaction, after giving effect, in the case of any
Non-Stock Fundamental Change, to any adjustment in the conversion price
required by the provisions of Section VI(h), and (ii) in the case of a Common
Stock Fundamental Change, common stock of the kind received by holders of
Common Stock as a result of such Common Stock Fundamental Change in an amount
determined pursuant to the provisions of Section VI(h). The Corporation or the
person formed by such consolidation or resulting from such merger or which
acquires such assets or which acquires the Corporation's shares, as the case
may be, shall make provisions in its certificate or articles of incorporation
or other constituent document to establish such right. Such certificate or
articles of incorporation or other constituent document shall provide for
adjustments which, for events subsequent to the effective date of such
certificate or articles of incorporation or other constituent document, shall
be as nearly equivalent as may be practicable to the adjustments provided for
in this Section VI. The above provisions shall similarly apply to successive
transactions of the foregoing type.
(f) Reservation of Shares; Etc. The Corporation shall at all times
reserve and keep available, free from preemptive rights out of its authorized
and unissued stock, solely for the purpose of effecting the conversion of the
Convertible Preferred Stock, such number of shares of its Common Stock as shall
from time to time be sufficient to effect that conversion of all shares of
Convertible Preferred Stock from time to time outstanding. The Corporation
shall from time to time, in accordance with the laws of the State of Florida, in
good faith and as expeditiously as possible endeavor to cause the authorized
number of shares of Common Stock to be increased if at any time the number of
shares of authorized and unissued Common Stock shall not be sufficient to permit
the conversion of all the then-outstanding shares of Convertible Preferred
Stock.
<PAGE> 17
If any shares of Common Stock required to be reserved for purposes of
conversion of the Convertible Preferred Stock hereunder require registration
with or approval of any governmental authority under any Federal or State law
before such shares may be issued upon conversion, the Corporation will in good
faith and as expeditiously as possible endeavor to cause such shares to be duly
registered or approved as the case may be. If the Common Stock is listed on
the New York Stock Exchange or any other national securities exchange or traded
through the Nasdaq National Market, the Corporation will, if permitted by the
rules of such exchange or market, list and keep listed on such exchange or
make and keep eligible for trading on such market (as the case may be), upon
official notice of issuance, all shares of Common Stock issuable upon
conversion of the Convertible Preferred Stock; provided, however, that such
shares of Common Stock may be delisted from such exchange or may cease to be
eligible for trading through such market (as the case may be) if, prior to or
concurrent with such delisting or cessation of eligibility for trading, the
Corporation causes such shares of Common Stock to be listed on or eligible for
trading through any other such exchange or market.
(g) Prior Notice of Certain Events. In case:
(i) the Corporation shall (1) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock or (B) a dividend payable in cash out of its
retained earnings other than any special or nonrecurring or other
extraordinary dividend or (2) declare or authorize a redemption or
repurchase of in excess of 10% of then-outstanding shares of Common
Stock; or
(ii) the Corporation shall authorize the granting to all holders of
Common Stock of rights or warrants to subscribe for or purchase any
shares of stock of any class or series or of any other rights or
warrants; or
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change
in par value, or from par value to no par value, or from no par value to
par value), or of any consolidation or merger to which the Corporation is
a party and for which approval of any shareholders of the Corporation
shall be required, or of the sale or transfer of all or substantially all
of the assets of the Corporation or of any share exchange whereby the
Common Stock is converted into other securities, cash or other property;
or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation;
then the Corporation shall cause to be filed with the transfer agent for the
Convertible Preferred Stock, and shall cause to be mailed to the holders of
record of the Convertible Preferred Stock, at their last addresses as they shall
appear upon the stock transfer books of the Corporation, at least ten days prior
to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record (if any) is to be taken for the purpose
of such dividend, distribution, redemption, repurchase, 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, redemption,
rights or warrants
<PAGE> 18
are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
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, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer, share
exchange, dissolution, liquidation or winding up (but no failure to mail such
notice or any defect therein or in the mailing thereof shall affect the
validity of the corporate action required to be specified in such notice).
(h) Adjustments in Case of Fundamental Changes. Notwithstanding any other
provision in this Section VI to the contrary, if any Fundamental Change occurs,
then the conversion price in effect will be adjusted immediately after such
Fundamental Change as described below. In addition, in the event of a Common
Stock Fundamental Change, each share of Convertible Preferred Stock shall be
convertible solely into common stock of the kind received by holders of Common
Stock as the result of such Common Stock Fundamental Change.
For purposes of calculating any adjustment to be made pursuant to this
Section VI(h) in the event of a Fundamental Change, immediately after such
Fundamental Change:
(i) In the case of a Non-Stock Fundamental Change, the conversion
price of the Convertible Preferred Stock shall thereupon become the lower
of (1) the conversion price in effect immediately prior to such Non-Stock
Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to this Section VI, and (2) the result of A
x $50/B, where:
A = the greater of the Applicable Price or the then applicable
Reference Market Price, and
B = (x) the then-current Redemption Price per share of Convertible
Preferred Stock or (y) for any Non-Stock Fundamental Change that
occurs before the Convertible Preferred Stock becomes redeemable
by the Corporation pursuant to Section V, the applicable price
per share set forth for the date of such Non-Stock Fundamental
Change in the following table:
<TABLE>
Date of Non-Stock Fundamental Change Price
- ---------------------------------------------------------------------------------------
<S> <C> <C>
After date of original issuance of Convertible
Preferred Stock and on or before , 199 ............. $
After , 199 and on or before , 199 ............. $
After , 199 and on or before , 199 ............. $
After , 199 and on or before , 199 ............. $
After , 199 and on or before , 199 ............. $
</TABLE>
plus, in any case referred to in this clause (y), an amount equal
to all per share dividends on the Convertible Preferred Stock
accrued and unpaid thereon,
<PAGE> 19
whether or not declared, to but excluding the date of such
Non-Stock Fundamental Change; and
(ii) In the case of a Common Stock Fundamental Change, the
conversion price of the Convertible Preferred Stock in effect immediately
prior to such Common Stock Fundamental Change, but after giving effect to
any other prior adjustments effected pursuant to this Section VI, shall
thereupon be adjusted by multiplying such conversion price by a fraction
of which the numerator shall be the Purchaser Stock Price and the
denominator shall be the Applicable Price; provided, however, that in the
event of a Common Stock Fundamental Change in which (A) 100% by value of
the consideration received by a holder of Common Stock is common stock of
the successor, acquiror or other third party (and cash, if any, is paid
with respect to any fractional interests in such common stock resulting
from such Common Stock Fundamental Change) and (B) all of the Common
Stock shall have been exchanged for, converted into or acquired for
common stock (and cash with respect to fractional interests) of the
successor, acquiror or other third party, the conversion price of the
Convertible Preferred Stock in effect immediately prior to such Common
Stock Fundamental Change shall thereupon be adjusted by dividing such
conversion price by the number of shares of common stock of the
successor, acquiror, or other third party received by a holder of one
share of Common Stock as a result of such Common Stock Fundamental
Change.
(i) Dividend or Interest Reinvestment Plans. Notwithstanding the
foregoing provisions, 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 any such plan, and the issuance of any shares
of Common Stock or options or rights to purchase such shares pursuant to any
employee benefit plan or program of the Corporation or pursuant to any option,
warrant, right or exercisable, exchangeable or convertible security outstanding
as of the date the Convertible Preferred Stock was first designated (except as
expressly provided in Section VI(c)(ii) with respect to certain events under
the Rights Agreement), and any issuance of Rights, shall not be deemed to
constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Corporation to which any of the adjustment
provisions described above applies. There shall also be no adjustment of the
conversion price in case of the issuance of any stock (or securities
convertible into or exchangeable for stock) of the Corporation except as
specifically described in this Section VI. If any action would require
adjustment of the conversion price pursuant to more than one of the provisions
described above, only one adjustment shall be made and such adjustment shall be
the amount of adjustment which has the highest absolute value to holders of
Convertible Preferred Stock.
(j) Series A Preferred Stock Purchase Rights. So long as Rights are
attached to the outstanding shares of Common Stock of the Corporation, each
share of Common Stock issued upon conversion of the shares of Convertible
Preferred Stock prior to the earliest of any Distribution Date (as defined in
Section 3(a) of the Rights Agreement), the date of redemption of the Rights or
the date of expiration of the Rights shall be issued with Rights in an amount
equal to the amount of Rights then attached to each such outstanding share of
Common Stock.
Section VII. Voting Rights.
<PAGE> 20
(a) General. The holders of shares of Convertible Preferred Stock shall
not have any voting rights except as set forth below or as otherwise from time
to time required by law. In connection with any right to vote, each holder of
a share of Convertible Preferred Stock shall have one vote for each share held.
Any shares of Convertible Preferred Stock owned, directly or indirectly, by
any entity of which the Corporation owns, directly or indirectly, a majority of
the shares entitled to vote for directors, shall not have voting rights
hereunder and shall not be counted in determining the presence of a quorum.
So long as any shares of the Corporation's Convertible Preferred Stock are
outstanding, the Corporation will not, without the affirmative vote or consent
of the holders of at least 66 2/3% of the outstanding shares of Convertible
Preferred Stock and outstanding Parity Dividend Stock, voting or consenting (as
the case may be) as a single class (i) amend, alter or repeal (by merger or
otherwise) any provision of the Corporation's Third Amended and Restated
Articles of Incorporation, as may be amended or restated from time to time,
or the by-laws so as to affect adversely the relative rights, preferences,
qualifications, limitations or restrictions of the Convertible Preferred Stock
or (ii) effect any reclassification of the Convertible Preferred Stock.
(b) Default Voting Rights. Notwithstanding any other provision of the
Corporation's Third Amended and Restated Articles of Incorporation, whenever
dividends on the Convertible Preferred Stock or any other class or series of
Parity Dividend Stock shall be in arrears in an aggregate amount equal to at
least six quarterly dividends (whether or not consecutive), (i) the number of
members of the Board of Directors of the Corporation shall be increased by two,
effective as the time of election of such directors as hereinafter provided and
(ii) the holders of shares of Convertible Preferred Stock (voting separately as
a class with all other affected classes or series of Parity Dividend Stock upon
which like voting rights have been conferred and are exercisable) shall have
the exclusive right to vote for and elect such two additional directors of the
Corporation who shall continue to serve during the period such dividends remain
in arrears. The right of the holders of shares of Convertible Preferred Stock
to vote for such two additional directors shall terminate when all accrued and
unpaid dividends on the Convertible Preferred Stock and all other affected
classes or series of Parity Dividend Stock have been declared and paid or set
apart for payment. The term of office of all directors so elected shall
terminate immediately upon the termination of the right of the holders of
shares of Convertible Preferred Stock and such Parity Dividend Stock to vote
for such two additional directors, and the number of directors of the Board of
Directors of the Corporation shall immediately thereafter be reduced by two.
The foregoing right of the holders of shares of Convertible Preferred
Stock with respect to the election of two directors may be exercised at any
annual meeting of shareholders or at any special meeting of shareholders held
for such purpose. If the right to elect directors shall have accrued to the
holders of shares of Convertible Preferred Stock more than ninety days preceding
the date established for the next annual meeting of stockholders, the President
of the Corporation shall, within twenty days after the delivery to the
Corporation at its principal office of a written request for a special meeting
signed by the holders of at least 10% of all outstanding shares of Convertible
Preferred Stock, call a special meeting of the holders of Convertible Preferred
Stock to be held within sixty days after the delivery of such request for the
purpose of electing such additional directors.
<PAGE> 21
Notwithstanding any other provision of the Corporation's Third Amended and
Restated Articles of Incorporation, the holders of shares of Convertible
Preferred Stock and any Parity Dividend Stock referred to above voting as a
class shall have the right to remove, without cause and at any time, and
replace any directors such holders shall have elected pursuant to this Section
VII.
Section VIII. Outstanding Shares. For purposes of this amendment, all
shares of Convertible Preferred Stock issued by the Corporation shall be deemed
outstanding except (i) from the date fixed for redemption pursuant to Section
V, all shares of Convertible Preferred Stock that have been so called for
redemption under Section V, to the extent provided thereunder; (ii) from the
date of surrender of certificates evidencing shares of Convertible Preferred
Stock, all shares of Convertible Preferred Stock converted into Common Stock;
and (iii) from the date of registration of transfer, all shares of Convertible
Preferred Stock owned, directly or indirectly, by any entity of which the
Corporation owns, directly or indirectly, a majority of the shares entitled to
vote for directors.
Section IX. Miscellaneous.
(a) Whenever possible, each provision hereof shall be interpreted in a
manner as to be effective and valid under applicable law, but if any provision
hereof is held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating or otherwise adversely affecting the remaining
provisions hereof. If a court of competent jurisdiction should determine that
a provision hereof would be valid or enforceable if a period of time were
extended or shortened or a particular percentage were increased or decreased,
then such court may make such change as shall be necessary to render the
provision in question effective and valid under applicable law.
(b) The Corporation shall pay any and all stock transfer and documentary
stamp taxes that may be payable in request of any issuance or delivery of
shares of Convertible Preferred Stock or shares of Common Stock or other
securities issued on account of Convertible Preferred Stock pursuant hereto or
certificates or instruments evidencing such shares or securities. The
Corporation shall not, however, be required to pay any such tax which may be
payable in respect of any transfer involved in the issuance or delivery of
shares of Convertible Preferred Stock or Common Stock or other securities in a
name other than that in which the shares of Convertible Preferred Stock with
respect to which such shares or other securities are issued or delivered were
registered, or in respect of any payment to any person with respect to any such
shares or securities other than a payment to the registered holder thereof, and
shall not required to make any such issuance, delivery or payment unless and
until the person otherwise entitled to such issuance, delivery or payment has
paid to the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid or is not payable.
(c) In the event that a holder of shares of Convertible Preferred Stock
shall not by written notice designate the name in which shares of Common Stock
to be issued upon conversion of such shares should be registered or to whom
payment upon redemption of shares of Convertible Preferred Stock should be made
or the address to which the certificates or instruments evidencing such shares
or such payment should be sent, the Corporation shall be entitled to register
such shares and make such payment, in the name of the holder of such Convertible
Preferred Stock as shown on the records
<PAGE> 22
of the Corporation and to send the certificates or instruments evidencing such
shares or such payment, to the address of such holder shown on the records of
the Corporation.
Section X. Definitions. The following definitions shall apply to terms
used in connection with the Convertible Preferred Stock:
a. "Applicable Price" shall mean (i) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only cash,
the amount of cash received by the holder of one share of Common Stock and (ii)
in the event of any other Non-Stock Fundamental Change or any Common Stock
Fundamental Change, the average of the daily Closing Prices of the Common Stock
for the ten consecutive Trading Days prior to and including the record date for
the determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such Non-Stock
Fundamental Change or Common Stock Fundamental Change, or, if there is no such
record date, the date upon which the holders of the Common Stock shall have the
right to receive such cash, securities, property or other assets, in each case,
as adjusted in good faith by the Board of Directors of the Corporation to
appropriately reflect any of the events referred to in subparagraphs (i), (ii),
(iii), (iv) and (v) of Section VI(c).
b. "Business Day" shall mean any day other than a Saturday, Sunday
or any day on which banking institutions are authorized to close in New York,
New York.
c. "Closing Price" of any common stock on any day shall mean the last
reported sale price regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices regular
way of the common stock in each case on the New York Stock Exchange, or, if the
common stock is not listed or admitted to trading on such Exchange, on the
principal national securities exchange or quotation system on which the common
stock is listed or admitted to trading or quoted, or, if not listed or admitted
to trading or quoted on any national securities exchange or quotation system,
the average of the closing bid and asked prices of the common stock in the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similarly generally accepted reporting
service, or, if not so available in such manner, as furnished by any New York
Stock Exchange member firm selected from time to time by the Board of Directors
of the Corporation for that purpose.
d. "Common Stock" shall mean the Corporation's now or hereafter issued
Common Stock.
e. "Common Stock Fundamental Change" shall mean any Fundamental Change in
which more than 50% by value (as determined in good faith by the Board of
Directors of the Corporation) of the consideration received by holders of
Common Stock consists of common stock that for each of the ten consecutive
Trading Days referred to with respect to such Fundamental Change in Section
X(a) above has been admitted for listing or admitted for listing subject to
notice of issuance on a national securities exchange or quoted on the Nasdaq
National Market; provided, however, that a Fundamental Change shall not be a
Common Stock Fundamental Change unless either (i) the Corporation continues to
exist after the occurrence of such Fundamental Change and the outstanding
shares of Convertible Preferred Stock continue to exist as outstanding shares
of Convertible Preferred
<PAGE> 23
Stock, or (ii) not later than the occurrence of such Fundamental Change, the
outstanding shares of Convertible Preferred Stock are converted into or
exchanged for shares of convertible preferred stock of a corporation succeeding
to the business of the Corporation, which Convertible Preferred Stock has
powers, preferences and relative, participating, optional or other rights, and
qualifications, limitations and restrictions, substantially similar to those of
the Convertible Preferred Stock.
f. "Current Market Price Per Share" shall mean, as to the Common
Stock on any date in question, the average of the daily Closing Prices for the
five consecutive Trading Days prior to and including the date in question;
provided, however, that:
(1) if the Ex Date for any event (other than the issuance or
distribution requiring such computation) that required an adjustment
to the conversion price pursuant to subparagraphs (i), (ii), (iii),
(iv), or (v) of Section VI(c) ("Other Event") occurs after the fifth
Trading Day prior to the day in question and prior to the Ex Date
for the issuance or distribution requiring such computation (the
"Current Event"), the Closing Price for each Trading Day prior to
the Ex Date for such Other Event shall be adjusted by multiplying
such Closing Price by the same fraction by which the conversion
price is so required to be adjusted as a result of such Other Event,
(2) if the Ex Date for any Other Event occurs after the Ex Date for
the Current Event and on or prior to the date in question, the
Closing Price for each Trading Day on and after the Ex Date for
such Other Event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the conversion
price is so required to be adjusted as a result of such Other
Event,
(3) if the Ex Date for any Other Event occurs on the Ex Date for
the Current Event, one of those events, as determined by the
Corporation, shall be deemed for purposes of clauses (1) and (2) of
this proviso to have an Ex Date occurring prior to the Ex Date for
the other of those events, and
(4) if the Ex Date for the Current Event is on or prior to the
date in question, then after taking into account any adjustment
required pursuant to clause (2) of this proviso, the Closing Price
for each Trading Day on or after such Ex Date shall be adjusted by
adding thereto the amount of any cash and the fair market value on
the date in question (as determined in good faith by the Board of
Directors in a manner consistent with any determination of such
value for purposes of paragraph (iv) or (v) of Section VI(c), whose
determination shall be conclusive and described in a resolution of
the Board of Directors) of the portion of the rights, warrants,
evidences of indebtedness, shares of capital stock or assets being
distributed applicable to one share of Common Stock.
g. "Ex Date" shall mean (1) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
on the relevant exchange or in the relevant market from which the Closing Price
was obtained without the right to receive such issuance or distribution and (2)
when used with respect to any subdivision or combination of shares
<PAGE> 24
of Common Stock, means the first date on which the Common Stock trades regular
way on such exchange or in such market after the time at which such subdivision
or combination becomes effective.
h. "Fundamental Change" shall mean the occurrence of any transaction or
event in connection with a plan pursuant to which all or substantially all of
the Common Stock shall be exchanged for, converted into, or acquired for or
constitute solely the right to receive cash, securities, property or other
assets (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); provided, however, in the case of a plan involving more than one
such transaction or event, for purposes of adjustment of the conversion price,
such Fundamental Change shall be deemed to have occurred when substantially all
of the Common Stock of the Corporation shall be exchanged for, converted into,
or acquired for or constitute solely the right to receive cash, securities,
property or other assets, but the adjustment shall be based upon the highest
weighted average of consideration per share which a holder of Common Stock could
have received in such transactions or events as a result of which more than 50%
of the Common Stock of the Corporation shall have been exchanged for, converted
into, or acquired for or constitute solely the right to receive cash,
securities, property or other assets.
i. "Junior Dividend Stock" shall mean the Junior Stock and any other
capital stock of the Corporation ranking junior as to dividends to the
Convertible Preferred Stock.
j. "Junior Liquidation Stock" shall mean the Junior Stock and any other
class or series of the Corporation's capital stock ranking junior to the
Convertible Preferred Stock as to distributions of assets upon liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary.
k. "Junior Stock" shall mean the Common Stock, the Series A Preferred
Stock, and the Corporation's hereafter issued capital stock ranking junior to
the Convertible Preferred Stock both as to the payment of dividends and as to
distributions of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, when and if issued.
l. "Nasdaq National Market" shall mean the National Association of
Securities Dealers Automated Quotation National Market.
m. "Non-Stock Fundamental Change" shall mean any Fundamental Change
other than a Common Stock Fundamental Change.
n. "Parity Dividend Stock" shall mean any class or series of the
Corporation's capital stock hereafter issued ranking, as to dividends, on a
parity with the Convertible Preferred Stock.
o. "Parity Liquidation Stock" shall mean any class or series of the
Corporation's capital stock ranking on a parity with the Convertible Preferred
Stock as to distributions or assets upon liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary.
<PAGE> 25
p. "Purchaser Stock Price" shall mean, with respect to any Common Stock
Fundamental Change, the average of the daily Closing Prices of the common stock
received in such Common Stock Fundamental Change for the ten consecutive Trading
Days prior to and including the record date for the determination of the holders
of Common Stock entitled to receive such common stock, or, if there is no such
record date, the date upon which the holders of the Common Stock shall have the
right to receive such common stock, in each case, as adjusted in good faith by
the Board of Directors of the corporation to appropriately reflect any of the
events referred to in subparagraphs, (i), (ii), (iii), (iv) and (v) of Section
VI(c); provided, however, if no such Closing Prices of the common stock for such
Trading Days exist, then the Purchaser Stock Price shall be set at a price
determined in good faith by the Board of Directors of the Corporation.
q. "Redemption Price" shall mean the applicable price per share set
forth for the date fixed for redemption in the following table:
<TABLE>
Date Fixed for Redemption Price
-----------------------------------------------------------------------------------
<S> <C>
On or after , 2000 and on or before , 2001 ...............
After , 2001 and on or before , 2002 ...............
After , 2002 and on or before , 2003 ...............
After , 2003 and on or before , 2004 ...............
After , 2004 and on or before , 2005 ...............
After , 2005 and on or before , 2006 ...............
Any date after , 2006 ..................................... 50.00
</TABLE>
plus, in each case, an amount in cash equal to all per share dividends on the
Convertible Preferred Stock accrued and unpaid thereon, whether or not
declared, to but excluding the date fixed for redemption.
r. "Reference Market Price" shall initially mean $ (which is
an amount equal to 66 % of the reported last sale price for the Common Stock
quoted on the Nasdaq National Market on , 1996), and in the
event of any adjustment to the conversion price other than as a result of a
Fundamental Change, the Reference Market Price shall also be adjusted so that
the ratio of the Reference Market Price to the conversion price after giving
effect to any such adjustment shall always be the same as the ratio of $ to the
initial conversion price per share set forth in the last sentence of Section
VI(a).
s. "Rights" shall have the meaning ascribed to such term in the Rights
Agreement.
t. "Rights Agreement" shall mean the Rights Agreement dated as of
February 24, 1988, as amended, between the Corporation and the Rights Agent
named therein.
u. "Series A Preferred Stock" shall mean the Corporation's Series A
Participating Preferred Stock, when and if issued.
<PAGE> 26
v. "Trading Day" shall mean a day on which securities traded on the
national securities exchange or quotation system or in the over-the-counter
market used to determine the Closing Price.
ARTICLE V - BOARD OF DIRECTORS
Section 1. Number of Directors. The number of directors of the Corporation
shall not be less than twelve (12) or more than eighteen (18), the exact number
of directors to be determined from time to time by resolution adopted by
affirmative vote of a majority of the entire Board of Directors, and such exact
number shall be fifteen (15) until otherwise determined by resolution adopted
by affirmative vote of a majority of the entire Board of Directors.
Section 2. Classes of Directors. The Board of Directors shall be divided
into three classes, Class I, Class II and Class III. Such classes shall be as
nearly equal in number of directors as possible. Each director shall serve for
a term ending at the third annual meeting following the annual meeting at which
such director was elected; provided, however, that the directors first elected
to Class I shall serve for a term ending on the annual meeting next following
the end of the 1983 fiscal year, the directors first elected to Class II shall
serve for a term ending at the second annual meeting next following the end of
the 1983 fiscal year, and the directors first elected to Class III shall serve
for a term ending at the third annual meeting next following the end of the
1983 fiscal year, serving, in each case, until their successors shall be
elected and shall qualify. Any vacancies in the Board of Directors for any
reason, and any newly created directorships resulting from any increase in the
number of directors, shall be filled by the affirmative vote of a majority of
the remaining director(s) of the class in which such vacancy occurs or if none
so remains, by a majority vote of the directors of the other two classes, and
any directors so chosen shall hold office until the next election of the class
for which such directors shall have been chosen and until their successors
shall be elected and shall qualify. No decrease in the number of directors
shall shorten the term of any incumbent director. There shall be no cumulative
voting in the election of directors.
Section 3. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may
be removed, but only for, cause, and only by the affirmative vote of the
holders of 75% or more of the outstanding shares of capital stock of the
Corporation then entitled to vote at an election of directors.
Section 4. Nomination of Directors. Except for the filling of any
vacancies in the Board of Directors which is governed by Section 2 of this
Article V, nominations for the election of directors may be made by the Board
of Directors or by any shareholder entitled to vote for the election of
directors. Nominations by any shareholder shall be made by notice in writing,
delivered or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 5 days nor more than 60 days prior to
any meeting of the shareholders called for the election of directors. Each
notice shall set forth (i) the name, age, business address and, if known,
residence address of each nominee proposed in such notice, (ii) the principal
occupation or employment of each such nominee and (iii) the number of shares of
stock of the Corporation which are beneficially owned by each such nominee.
<PAGE> 27
The Secretary of the Corporation shall determine whether any nomination by
any shareholder is made in conformance with the procedures set forth in this
Section 4. Nominations not made in conformance with the procedures set forth in
this Section 4 shall be null and void and shall be disregarded by the
Corporation.
ARTICLE VI - INDEMNIFICATION
The Corporation shall indemnify any present or former officer or director, or
person exercising powers and duties of a director, to the full extent now or
hereafter permitted under Florida Statutes now or hereafter in force.
ARTICLE VII - BYLAWS
The power to adopt, alter, amend or repeal Bylaws shall be vested in the Board
of Directors and the shareholders, but the Board of Directors may not alter,
amend or repeal any Bylaws adopted by the shareholders if the shareholders
provided that such Bylaws shall not be altered, amended or repealed by the
Board of Directors.
ARTICLE VIII - APPROVAL OF CERTAIN BUSINESS COMBINATIONS
A. In addition to any affirmative vote required by law or under any other
provision of these Third Amended and Restated Articles of Incorporation, and
except as otherwise expressly provided in Paragraph C: (1) any merger or
consolidation of the Corporation or any Subsidiary (as hereinafter defined)
with or into (a) any 30% Shareholder (as hereinafter defined) or (b) any other
corporation (whether or not itself a 30% Shareholder) which, after such merger
or consolidation, would be an Affiliate (as hereinafter defined) of a 30%
Shareholder; or, (2) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related transactions) to
or with any 30% Shareholder of any assets of the Corporation or any Subsidiary
having an aggregate fair market value of $5,000,000 or more; or, (3) the
issuance or transfer by the Corporation or any Subsidiary (in one transaction
or a series of related transactions) of any securities of the Corporation or
any Subsidiary to any 30% Shareholder in exchange for cash, securities or other
property (or a combination thereof) having an aggregate fair market value of
$5,000,000 or more; or, (4) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation; or, (5) any reclassification of
securities (including any reverse stock split), recapitalization,
reorganization, merger or consolidation of the Corporation with any of its
Subsidiaries or any similar transaction (whether or not with or into or
otherwise involving a 30% Shareholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding shares of
any class of equity or convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by any 30% Shareholder, shall
require the affirmative vote of the holders of at least 85% of the outstanding
shares of capital stock of the Corporation entitled to vote generally in the
election of directors, considered for the purpose of this Article VIII as one
class ("Voting Shares"), which shall include the affirmative vote of at least
50% of the Voting Shares by shareholders other than any 30% Shareholder. Such
affirmative vote shall be required notwithstanding the fact that no vote may be
required, or that some lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise.
<PAGE> 28
B. The term "business combination" as used in this Article VIII shall mean
any transaction which is referred to in any one or more of clauses (1) through
(5) of Paragraph A hereof.
C. The provisions of Paragraph A shall not be applicable to any particular
business combination, and such business combination shall require only such
affirmative vote as is required by law if:
(1) The Board of Directors of the Corporation has by at least a 75% vote
of the members of the Board then in office:
(a) given prior approval to the acquisition by the 30% Shareholder
involved in the business combination of 30% or more of the outstanding
common stock of the Corporation; or
(b) approved the business combination prior to the 30% Shareholder
involved in the business combination having become a 30% Shareholder;
or,
(2) all of the following conditions are satisfied:
(a) the ratio of the aggregate amount of the cash and the fair market
value of other consideration to be received per share by holders of
common stock of the Corporation ("Common Stock") in such business
combination to the market price of the Common Stock immediately prior to
the announcement of such business combination, is at least as great as
the ratio of the highest per share price (including brokerage
commissions, transfer taxes and soliciting dealers' fees) which such 30%
Shareholder has paid for any shares of Common Stock acquired by it
within the two-year period prior to the business combination to the
market price of the Common Stock immediately prior to the initial
acquisition by such 30% Shareholder of any Common Stock;
(b) the aggregate amount of the cash and fair market value of other
consideration to be received per share by holders of Common Stock in
such business combination is not less than the highest per share price
(including brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by such 30% Shareholder in acquiring any of its holdings of
Common Stock, and is not less than the earnings per share of Common
Stock for the four full consecutive fiscal quarters immediately
preceding the record date for solicitation of votes on such business
combination multiplied by the then price/earnings multiple (if any) of
such 30% Shareholder as customarily computed and reported in the
financial community;
(c) the consideration to be received by holders of Common Stock in such
business combination shall be the same form and of the same kind as the
consideration paid by the 30% Shareholder in acquiring the shares of
Common Stock already owned by it;
<PAGE> 29
(d) after becoming a 30% Shareholder and prior to the consummation of
such business combination: (i) the 30% Shareholder shall have taken steps
to ensure that the Corporation's Board of Directors included at all times
representation by continuing director(s) (as hereinafter defined)
proportionate to the ratio that the Voting Shares which from time to time
are owned by persons who are not 30% Shareholders ("Public Holders") bear
to all Voting Shares outstanding at such respective times (with a
continuing director to occupy any resulting fractional board position);
(ii) there shall have been no reduction in the rate of dividends payable
on the Common Stock except as necessary to insure that a quarterly
dividend payment does not exceed 15% of the net income of the
Corporation for the four full consecutive fiscal quarters immediately
preceding the declaration date of such dividend, or except as may have
been approved by a unanimous vote of all directors (the "entire Board");
(iii) such 30% Shareholder shall not have acquired any newly issued
shares of stock, directly or indirectly, from the Corporation (except
upon conversion of convertible securities acquired by it prior to
obtaining a 30% interest or as a result of a pro rate stock dividend or
stock split); and (iv) such 30% Shareholder shall not have acquired any
additional shares of the Common Stock or securities convertible into or
exchangeable for Common Stock except as a part of the transaction which
resulted in such 30% Shareholder acquiring its 30% interest;
(e) prior to the consummation of such business combination, such 30%
Shareholder shall not have received the benefit, directly or indirectly
(except proportionately as a shareholder), of any loans, advances,
guarantees, pledges or other financial assistance or tax credits provided
by the Corporation, or made any change in the Corporation's business or
equity capital structure without the unanimous approval of the entire
Board; and,
(f) a proxy statement responsive to the requirements of the Securities
Exchange Act of 1934 shall have been mailed to all holders of Voting
Shares for the purpose of soliciting shareholder approval of such
business combination. Such proxy statement shall contain at the front
thereof, in a prominent place, any recommendations as to the advisability
(or inadvisability) of the business combination which the continuing
directors, or any of them, may have furnished in writing and, if deemed
advisable by a majority of the continuing directors, an opinion of
independent financial advisers as to the fairness (or lack of fairness)
of the terms of such business combination, from the point of view of the
holders of Voting Shares other than any 30% Shareholder (such independent
financial advisers to be selected by a majority of the continuing
directors, and to be paid a reasonable fee for their services upon
receipt by the Corporation of such opinion).
D. For the purposes of this Article VIII:
(1) A "person" shall mean any individual, firm, corporation or other entity.
<PAGE> 30
(2) "30% Shareholder" shall mean, in respect of any business combination,
any person (other than the Corporation or any Subsidiary) who or which,
as of the record date for the determination of shareholders entitled to
notice of and to vote on such business combination, or immediately prior
to the consummation of any such transaction: (a) is the beneficial owner,
directly or indirectly, of not less than 30% of the Voting Shares; or, (b)
is an Affiliate of the Corporation and at any time within 2 years prior
thereto was the beneficial owner, directly or indirectly, of not less
than 30% of the then outstanding Voting Shares; or, (c) is an assignee of
or has otherwise succeeded to any shares of capital stock of the
Corporation which were at any time within 2 years prior thereto
beneficially owned by any 30% Shareholder, and such assignment or
succession shall have occurred in the course of a transaction or series
of transactions not involving a public offering within the meaning of the
Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:(a)
which such person or any of its Affiliates and Associates (as hereinafter
defined) beneficially own, directly or indirectly; or, (b) which such
person or any of its Affiliates or Associates has (i) the right to
acquire (whether such right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement or understanding
or upon the exercise of conversion rights, warrants, or options, or
otherwise, or (ii) the right to vote pursuant to any agreement,
arrangement or understanding; or, (c) which are beneficially owned,
directly or indirectly, by any other person with which such
first-mentioned person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock of the
Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of sub-paragraph (3), above, but shall not include
any other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options, or otherwise.
(5) "Continuing director" shall mean a person who was a member of the
Board of Directors of the Corporation elected by the Public Holders prior
to the date as of which any 30% Shareholder acquired in excess of 5% of
the then outstanding Voting Shares, or a person designated (before his
initial election as a director) as a continuing director by a majority of
the then continuing directors.
(6) "Other consideration to be received" shall mean common stock of the
Corporation retained by its Public Holders in the event of a business
combination in which the Corporation is the surviving corporation.
(7) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on February 23, 1983.
(8) "Subsidiary" means any corporation of which a majority of any class
of equity security (as defined in Rule 3a11-1 of the General Rules and
Regulations under the Securities
<PAGE> 31
Exchange Act of 1934, as in effect on February 23, 1983) is owned,
directly or indirectly, by the Corporation; provided, however, that for
the purposes of the definition of 30% Shareholder set forth in
sub-paragraph (2), above, the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity security owned
directly or indirectly, by the Corporation.
E. A majority of the continuing directors shall have the power and duty to
determine for the purposes of this Article VIII, on the basis of information
known to them: (a) the number of Voting Shares beneficially owned by any person;
(b) whether a person is an Affiliate or Associate of another; (c) whether a
person has an agreement, arrangement or understanding with another as to the
matters referred to in sub-paragraph (3), above, or, (d) whether the assets
subject to any business combination have an aggregate fair market value of
$5,000,000 or more.
F. Nothing contained in this Article VIII shall be construed to relieve
any 30% Shareholder from any fiduciary obligation imposed by law.
ARTICLE IX
Action shall be taken by the shareholders only at annual or special meetings of
shareholders, and shareholders may not act by written consent. Special
meetings of shareholders may be called only by the holders of not less than 75%
of the Voting Shares as defined in Article VIII, or by such other persons or
bodies as may be authorized by the Bylaws of the Company.
ARTICLE X - AMENDMENTS
Any amendment, alteration, change or repeal of Article V, Article VIII, Article
IX, or Article X of this Third Amended and Restated Articles of Incorporation
shall require the affirmative vote of the holders of at least 85% of the then
outstanding Voting Shares as defined in Article VIII, which shall include the
affirmative vote of at least 50% of the Voting Shares other than any 30%
Shareholders; provided that this Article X shall not apply to, and such 85%
vote shall not be required for any amendment, alteration, change or repeal
recommended to the shareholders by at least a majority of the entire Board and
by at least two-thirds of the continuing directors, as defined in Article VIII.
<PAGE> 1
EXHIBIT 5
July 17, 1996
American Bankers Insurance Group, Inc.
11222 Quail Roost Drive
Miami, Florida 33157
Ladies and Gentlemen:
We have acted as counsel to American Bankers Insurance Group, Inc., a
Florida corporation (the "Company"), in connection with the preparation and
filing by the Company with the Securities and Exchange Commission of a
Registration Statement on Form S-3 filed on June 28, 1996 as amended (File No.
333-07209) (the "Registration Statement"), under the Securities Act of 1933, as
amended, with respect to the offer and sale by the Company of up to (i)
2,300,000 shares (the "Registered Preferred Shares") of $____ Series B
Cumulative Convertible Preferred Stock of the Company and (ii) such number of
shares (the "Registered Common Shares") of the Common Stock, par value $1.00
per share, of the Company as may be issuable upon the conversion of the
Registered Preferred Shares. The Registered Preferred Shares will be issued and
sold pursuant to an Underwriting Agreement (the "Underwriting Agreement") to be
entered into between the Company, CS First Boston, Donaldson, Lufkin & Jenrette
Securities Corporation, Furman Selz and McDonald & Company Securities, Inc.
(collectively, the "Underwriters").
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of the Registration Statement, the
form of Third Amended and Restated Articles of Incorporation of the Company
(the "Amended and Restated Articles of Incorporation") setting forth the
rights, preferences and limitations of the Registered Preferred Stock filed as
an exhibit to the Registration Statement, the form of Underwriting Agreement
filed as an exhibit to the Registration Statement, and such corporate records,
agreements, documents, and other instruments and such certificates or
comparable documents of public officials and of officers and representatives of
the Company, and have made such inquiries of such officers and representatives,
as we have deemed relevant and necessary as a basis for the opinions hereinafter
set forth.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of such latter documents. As to all questions of fact material to
this opinion that have not been independently established, we have relied upon
certificates of officers and representatives of the Company. We have also
assumed for the purposes hereof that the Certificate of Designation and the
Underwriting Agreement will be executed substantially in the
<PAGE> 2
American Bankers Insurance Group, Inc.
July 17, 1996
forms filed as exhibits to the Registration Statement and that the Certificate
of Designation will be duly filed with the Secretary of State of Florida before
the issuance of the Registered Preferred Shares.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Florida.
2. Upon adoption by the Board of Directors of the Company or a duly
authorized committee thereof of final resolutions establishing the designation,
preferences, rights and limitations of the Registered Preferred Shares and the
filing of the Amended and Restated Articles of Incorporation with the Secretary
of State of the State of Florida, the Registered Preferred Shares will be duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms of the Underwriting Agreement, will be
validly issued, fully paid and nonassessable.
3. The Registered Common Shares have been duly authorized and, when
issued and delivered upon conversion of the Registered Preferred Shares in
accordance with the terms of the Certificate of Designation, will be validly
issued, fully paid and nonassessable.
The opinions express herein are limited to the corporate laws of the
State of Florida and we express no opinion as to the effect on the matters
covered by this letter of the laws of any other jurisdiction.
The opinions expressed herein are rendered solely for your benefit in
connection with the transactions described herein. Those opinions may not be
used or relied upon by any other person, nor may this letter or any copies
thereof be furnished to a third party, filed with a governmental agency,
quoted, cited or otherwise referred to without our prior written consent, except
that we consent to the filing of this letter as an exhibit to the Registration
Statement. Consent is also given to the reference to our firm under the caption
"Legal Matters" in the Prospectus contained in the Registration Statement.
Very truly yours,
Jorden Burt Berenson & Johnson LLP
