SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
THE HALLWOOD GROUP INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 51-0261339
(State of incorporation or (IRS Employer
organization) Identification No.)
3710 RAWLINS, SUITE 1500, DALLAS, TEXAS 75219
(Address of principal executive offices) (Zip Code)
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check the
following box.
If this Form relates to the registration of a class of debt securities and is to
become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box.
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
NONE NOT APPLICABLE
Securities to be registered pursuant to Section 12(g) of the Act:
SERIES B PREFERRED STOCK,
PAR VALUE $.10
Title of Class
CORPDAL:61416.1 18747-00001
Page 1 of Page 6
<PAGE>
ITEM 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
The Hallwood Group Incorporated (the "Company") has issued a class of
preferred stock consisting of 250,000 shares to be designated as the Series B
Preferred Stock (referred to herein as the "Series B Preferred Stock"). Each
share of the Series B Preferred Stock ranks equally in all respects and is
subject to the following provisions:
1. Rank.
The Series B Preferred Stock, with respect to dividend rights and
rights upon liquidation, winding up and dissolution, ranks prior to all classes
of the Company's Common Stock.
2. Dividends.
(a) The holders of the Series B Preferred Stock are entitled to receive
out of any funds legally available therefor, when and as declared by the Board
of Directors of the Company (the "Board of Directors"), dividends in cash at a
rate of $.20 per share per annum, provided, however, that the Board of Directors
will declare a dividend on the Series B Preferred Stock annually in each of the
first five years from and after the date of the original issuance of the shares
of the Series B Preferred Stock (the "Original Issuance Date"). Such dividends
(i) accrue and are cumulative from the Original Issue Date through the
conclusion of the fifth anniversary of the Original Issue Date, whether or not
earned or declared and whether or not funds are legally available therefor, and
(ii) after the conclusion of such fifth anniversary, will not accrue, accumulate
or be payable, unless and until declared by the Board of Directors.
(b) Dividends declared pursuant to Section 2(a) above will be payable
annually, in arrears, on March 1 of each year, to the holder of record on such
respective dates as may be fixed by the Board of Directors in advance of payment
of each such dividend. Dividends payable on the Series B Preferred Stock for any
period less than a full year will be computed based on a 365-day year or 366-day
year, as the case may be, and the actual number of days elapsed in the period
for which payable. Any accumulation of such dividends on the Series B Preferred
Stock not paid in full on the date fixed by the Board of Directors for payment
of such dividends (the "Dividend Payment Date") bears simple interest at a rate
of 9.0% per annum from the Dividend Payment Date until paid. All dividends paid
with respect to shares of Series B Preferred Stock pursuant to Section 2(a) are
paid pro rata to the holders of the Series B Preferred Stock. In the event that
the funds of the Company legally available for the payment of dividends shall be
insufficient for the payment of the entire amount of dividends payable in any
dividend period with respect to the Series B Preferred Stock, the amount of such
legally available funds will be allocated for the payment of dividends with
respect to the Series B Preferred Stock pro rata based upon the Liquidation
Preference thereof (as defined in Section 4(a) below). At any time and from time
to time thereafter when additional funds of the Company become legally available
for the payment of dividends, such funds will be used to pay the balance of any
accrued but unpaid dividends and any interest thereon.
CORPDAL:61416.1 18747-00001
Page 2 of Page 6
<PAGE>
(c) So long as any shares of the Series B Preferred Stock remain
outstanding, the Company will not declare or pay any cash dividend, make a cash
distribution, or purchase, acquire, redeem, pay monies to the holders of, or set
aside or make monies available for a sinking fund for the purchase or redemption
of, any shares of common stock unless all accrued and unpaid dividends and
interest in respect of the Series B Preferred Stock have been paid or declared
and duly provided for.
3. Redemption.
(a) Mandatory Redemption. On July 20, 2010, to the extent the Company
has legally available funds therefor, the Company must redeem the remaining
outstanding shares of Series B Preferred Stock, at a redemption price
(hereinafter the "Redemption Price") of 100% of the Liquidation Preference per
share, together with an amount equal to the sum of all accrued and unpaid
dividends and interest thereon to such redemption date, in cash, and in the
manner provided in subparagraphs 3(c)(1) through 3(c)(4) below; provided,
however, that if there are insufficient legally available funds for redemption
under this Section 3(a) at the redemption date, the Company must redeem all or
part of the remainder of the shares of Series B Preferred Stock subject to
redemption from time to time or as soon as the Company has sufficient funds
which are legally available therefor until all such shares of Series B Preferred
Stock have been redeemed.
(b) Optional Redemption. The Company may redeem at any time, or from
time to time, from any source of funds legally available therefor, in whole or
in part, in the manner provided in subparagraphs 3(c)(1) through 3(c)(4) below,
any and all shares of Series B Preferred Stock at a redemption price of 100% of
the Liquidation Preference per share, together with an amount equal to the sum
of all accrued and unpaid dividends and interest thereon to the date fixed for
redemption.
(c) Procedure for Redemption.
(1) With respect to any redemption of fewer than all the
outstanding shares of Series B Preferred Stock, the number of shares to
be redeemed is to be determined by the Board of Directors and the
shares to be redeemed will be selected by lot or pro rata as may be
determined by the Board of Directors.
(2) Not less than thirty (30) nor more than ninety (90) days
prior to the redemption date, written notice of the time and place of
redemption (hereinafter, the "Redemption Notice") must be given to each
holder of record of the Series B Preferred Stock so to be redeemed,
addressed to such holder at his or its post office address as the same
appears upon the books of the Company. The Redemption Notice must
state: (i) the redemption date; (ii) the number of shares to be
redeemed from such holder and the total number of shares of Series B
Preferred Stock to be redeemed; (iii) the Redemption Price; and (iv)
the place where certificates for such shares are to be surrendered for
payment of the Redemption Price.
CORPDAL:61416.1 18747-00001
Page 3 of Page 6
<PAGE>
(3) On or before the redemption date, each holder of shares of
Series B Preferred Stock to be redeemed will present and surrender his
or its certificate or certificates (endorsed in such manner as may be
required by the Company, or not endorsed if not required by the
Company) to the Company in the manner and at the place designated in
the Redemption Notice, and thereupon the Redemption Price for such
shares will be paid to or on the order of such holder.
(4) In the event less than all the shares of Series B
Preferred Stock represented by any such surrendered certificate are
redeemed, a new certificate will be issued by the Company to the
registered holder of such surrendered certificate representing the
unredeemed shares.
(d) Effect of Redemption.
(1) The shares of Series B Preferred Stock which have been
redeemed may not be reissued and each surrendered certificate will be
canceled. The Company will from time to time cause all such shares
redeemed to be retired in the manner provided by law. Such retired
shares of Series B Preferred Stock will resume the status of authorized
but unissued and non-designated shares of Preferred Stock of the
Company.
(2) From and after the date fixed for redemption, (i) the
shares of Series B Preferred Stock so designated for redemption will no
longer be transferable on the books of the Company (except with the
consent of the Company); (ii) such shares will not be deemed to be
outstanding for any purpose whatsoever (unless default shall be made by
the Company in payment of the Redemption Price); (iii) the holders
thereof will cease to be stockholders with respect to such shares and
will be entitled only to receive the Redemption Price thereof and (iv)
dividends on the shares of Series B Preferred Stock so called for
redemption will cease to accrue. If the Company defaults in making
payment of the Redemption Price, then such shares so called for
redemption and then unpaid will continue to be outstanding as if no
such call for redemption had been made.
4. Rights on Liquidation, Dissolution, etc.
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Company, the holders of the shares of Series B
Preferred Stock then outstanding are entitled to receive out of the assets of
the Company available for distribution to its stockholders an amount in cash
equal to $4.00 for each share outstanding (the "Liquidation Preference"), plus
an amount in cash equal to any and all accrued but unpaid dividends and interest
thereon to the date fixed for liquidation, before any payment is made or any
assets distributed to the holders of any of the stock of the Company ranking as
to liquidation, dissolution or winding up junior to the Series B Preferred
Stock. If the assets of the Company are not sufficient to pay in full the
liquidation payments payable to the holders of outstanding shares of the Series
B Preferred Stock and outstanding shares of securities ("Parity Securities") of
the Company ranking on a parity with
CORPDAL:61416.1 18747-00001
Page 4 of Page 6
<PAGE>
the Series B Preferred Stock as to liquidation, then the holders of all such
shares will share ratably in such distribution of assets in accordance with the
amount which would be payable on such distribution if the amounts to which the
holders of outstanding shares of Series B Preferred Stock are entitled were paid
in full.
(b) The sale, conveyance, exchange or transfer of all or substantially
all of the property and assets of the Company or the merger or consolidation of
the Company into or with any other corporation, or the merger of any other
corporation into it, will not be deemed a dissolution, liquidation or winding up
of the affairs of the Company for purposes of this Section 4.
5. Voting; Consent.
(a) The holders of the shares of Series B Preferred Stock are not
entitled to vote on matters which may be the subject of proper action by
stockholders of the Company except as otherwise provided by law.
(b) In any vote by the holders of Series B Preferred Stock as may be
required by law, each holder of Series B Preferred Stock is entitled to one (1)
vote for each share of Series B Preferred Stock.
(c) No consent of holders of the Series B Preferred Stock is required
for (i) the creation of any indebtedness of any kind of the Company, (ii) the
creation of any class of stock of the Company subordinate, pari passu or senior
to the Series B Preferred Stock as to the payment of dividends and upon
liquidation of the Company, or (iii) any increase or decrease in the amount of
authorized Common Stock or any increase, decrease or change in the par value
thereof.
Except as expressly set forth herein, the holders of the Series B
Preferred Stock have no other rights other than those provided by applicable
Delaware law.
ITEM 2. EXHIBITS.
I. 1.1 Specimen of the Preferred Stock Certificate
1.2 Certificate of Designations, Rights and Preferences of
Preferred Stock of the Hallwood Group Incorporated
II. Not applicable.
CORPDAL:61416.1 18747-00001
Page 5 of Page 6
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: April 3, 1997
THE HALLWOOD GROUP INCORPORATED
By:/s/Melvin J. Melle
---------------------------
Melvin J. Melle
Vice President, Chief Financial Officer
and Secretary
CORPDAL:61416.1 18747-00001
Page 6 of Page 6
EXHIBIT 1.1
B
THE HALLWOOD GROUP INCORPORATED
THIS CERTIFICATE MAY INCORPORATED UNDER THE CUSIP 406364
BE PRESENTED FOR LAWS OF THE STATE OF DELAWARE SEE REVERSE FOR CERTAIN
TRANSFER DEFINITIONS
IN BOSTON, MASS. OR
NEW YORK, N.Y.
THIS CERTIFIES THAT
PRODUCTION COORDINATOR ALBERT DERMOVSESIAN
(215)-830-2103
PROOF OF FEBRUARY 27, 1997
HALLWOOD GROUP
H 49229fc
__________________________________________
Opr. eg NEW
__________________________________________
/net/banknote/home 12/H
IS THE OWNER OF
AMERICAN BANKNOTE COMPANY
680 BLAIR MILL ROAD
HORSHAM, PA 19044
215-657-3480
_____________________________________________
SALESPERSON C. SHARKEY - 215-830-2153
_____________________________________________
/home/ed/inprogress/home12/Hallwood49229
FULLY PAID AND NON-ASSESSABLE SHARES OF THE SERIES B PREFERRED STOCK, PAR VALUE
$.10 PER SHARE, OF
THE HALLWOOD GROUP INCORPORATED, transferable on the books of the Corporation in
person or by duly authorized attorney, upon surrender of this certificate
property endorsed. This certificate is not valid unless countersigned by the
Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated:
/s/ Robert L. Lynch
COUNTERSIGNED AND REGISTERED -------------------
THE FIRST NATIONAL BANK OF BOSTON VICE CHAIRMAN
(BOSTON, MASS.) TRANSFER AGENT
AND REGISTRAR [CORPORATE SEAL]
BY /s/ M. Penezic /s/ Melvin J. Melle
------------------- -------------------
AUTHORIZED OFFICER SECRETARY
CORPDAL:61416.1 18747-00001
<PAGE>
THE HALLWOOD GROUP INCORPORATED
A STATEMENT OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OF THE
CORPORATION OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS WILL BE FURNISHED BY THE
CORPORATION, WITHOUT CHARGE, TO EACH STOCKHOLDER WHO SO REQUESTS, UPON
APPLICATION TO ITS TRANSFER AGENT, OR TO THE SECRETARY OF THE CORPORATION.
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN
OR DESTROYED THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY
AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -_____Custodian______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act _______________________
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received, _____________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[__________________]
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
______________________________________________________________________ Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated _________________________________
NOTICE: ____________________________________________________________
THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE
NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATEVER.
SIGNATURE(S) GUARANTEED:________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.
AMERICAN BANKNOTE COMPANY PRODUCTION COORDINATOR ALBERT DERMOVSESIAN
680 BLAIR MILL ROAD (215)-830-2103
HORSHAM, PA 19044 PROOF OF FEBRUARY 27, 1997
215-657-3480 HALLWOOD GROUP
_________________________________________ H 49229bk
SALESPERSON - C. SHARKEY - 215-830-2153 ___________________________________
_________________________________________ Opr. eg NEW
/home/ed/in progress/home12/Hallwood49229 ___________________________________
/net/banknote/home 12/H
CORPDAL:61416.1 18747-00001
EXHIBIT 1.2
THE HALLWOOD GROUP INCORPORATED
CERTIFICATE OF DESIGNATIONS, RIGHTS
AND PREFERENCES OF PREFERRED STOCK
OF THE HALLWOOD GROUP INCORPORATED
-----------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------
We, William L. Guzzetti, and Melvin J. Melle, Executive Vice President
and Vice President and Secretary, respectively, of The Hallwood Group
Incorporated, a Delaware corporation (hereinafter called the "Corporation"),
pursuant to the provisions of Section 151 of the General Corporation Law of the
State of Delaware, do hereby make this Certificate of Designation under the
corporate seal of the Corporation and do hereby state and certify that pursuant
to the authority expressly vested in the Board of Directors of the Corporation
by the Certificate of Incorporation, the Board of Directors duly adopted the
following resolutions:
RESOLVED, that, pursuant to Article Fourth of the Certificate of
Incorporation (which authorizes 500,000 shares of Preferred Stock, par value
$.10 per share, of which no shares of preferred stock are presently issued and
outstanding), the Board of Directors hereby fixes the designation and
preferences and relative, participating, optional and other special rights, and
qualifications, limitations and restrictions of a series of Preferred Stock
consisting of 250,000 shares to be designated as the Series B Preferred Stock
(referred to herein as the "Series B Preferred Stock").
RESOLVED, that each share of the Series B Preferred Stock shall rank
equally in all respects and shall be subject to the following provisions:
1. Rank. The Series B Preferred Stock shall, with respect to dividend
rights and rights upon liquidation, winding up and dissolution, rank prior to
all classes of the Corporation's Common Stock.
2. Dividends.
CORPDAL:63843.1 18747-00001
1
<PAGE>
(a) The holders of the Series B Preferred Stock shall be entitled to
receive out of any funds legally available therefor, when and as declared by the
Board of Directors, dividends in cash at a rate of $.20 per share per annum,
provided, however, that the Board of Directors shall declare a dividend on the
Series B Preferred Stock annually in each of the first five years from and after
the date of the original issuance of the shares of the Series B Preferred Stock
(the "Original Issuance Date"). Such dividends (a) shall accrue and be
cumulative from the dividends (a) shall accrue and be cumulative from the
Original Issue Date through the conclusion of the fifth anniversary of the
Original Issue Date, whether or not earned or declared and whether or not funds
are legally available therefor, and (b) after the conclusion of such fifty
anniversary, shall not accrue, accumulate or be payable, unless and until
declared by the Board of Directors.
(b) Dividends declared pursuant to Section 2(a) above shall be payable
annually, in arrears, on March 1 of each year, to the holder of record on such
respective dates as may be fixed by the Board of Directors in advance of payment
of each such dividend. Dividends payable on the Series B Preferred Stock for any
period less than a full year shall be computed based on a 365- day year or
366-day year, as the case may be, and the actual number of days elapsed in the
period for which payable. Any accumulation of such dividends on the Series B
Preferred Stock not paid in full on the date fixed by the Board of Directors for
payment of such dividends (the "Dividend Payment Date") shall bear simple
interest at a rate of 9.0% per annum from the Dividend Payment Date until paid.
All dividends paid with respect to shares of Series B Preferred Stock pursuant
to Section 2(a) shall be paid pro rata to the holders of the Series B Preferred
Stock. In the event that the funds of the Corporation legally available for the
payment of dividends shall be insufficient for the payment of the entire amount
of dividends payable in any dividend period with respect to the Series B
Preferred Stock, the amount of such legally available funds shall be allocated
for the payment of dividends with respect to the Series B Preferred Stock pro
rata based upon the Liquidation Preference thereof (as defined in Section 4(a)
below). At any time and from time to time thereafter when additional funds of
the Corporation become legally available for the payment of dividends, such
funds shall be used to pay the balance of any accrued but unpaid dividends and
any interest thereon.
(c) So long as any shares of the Series B Preferred Stock shall remain
outstanding, the Corporation will not declare or pay any cash dividend, make a
cash distribution, or purchase, acquire, redeem, pay monies to the holders of,
or set aside or make monies available for a sinking fund for the purchase of
redemption of, any shares of Common Stock unless all accrued and unpaid
dividends and interest in respect of the Series B Preferred Stock have been paid
or declared and duly provided for.
3. Redemption.
(a) Mandatory Redemption. On July 20, 2010, to the extent the
Corporation shall have legally available funds therefore, the Corporation shall
have legally available funds therefor, the
CORPDAL:63843.1 18747-00001
2
<PAGE>
Corporation shall redeem the remaining outstanding shares of Series B Preferred
Stock, at a redemption price (hereinafter the "Redemption Price") of 100% of the
Liquidation Preference per share, together with an amount equal to the sum of
all accrued and unpaid dividends and interest thereon to such redemption date,
in cash, and in the manner provided in subparagraphs 3(c)(1) through 3(c)(4)
below; provided, however, that if there are insufficient legally available funds
for redemption under this Section 3(a) at the redemption date, the Corporation
shall redeem all or part of the remainder of the shares of Series B Preferred
Stock subject to redemption from time to time or as soon as the Corporation has
sufficient funds which are legally available therefor until all such shares of
Series B Preferred Stock have been redeemed.
(b) Optional Redemption. The Corporation may redeem at any time, or
from time to time, from any source of funds legally available therefor, in whole
or in part, in the manner provided in subparagraphs 3(c)(1) through 3(c)(4)
below, any and all shares of Series B Preferred Stock at a redemption price of
100% of the Liquidation Preference per share, together with an amount equal to
the sum of all accrued and unpaid dividends and interest thereon to the date
fixed for redemption.
(c) Procedure for Redemption. (1) With respect to any redemption of
fewer than all the outstanding shares of Series B Preferred Stock, the number of
shares to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be selected by lot or pro rata as may be determined
by the Board of Directors.
(2) Not less than thirty (30) nor more than ninety (90) days prior to
the redemption date, written notice of the time and place of redemption
(hereinafter, the "Redemption Notice") shall be given to each holder of record
of the Series B Preferred Stock so to be redeemed, addressed to such holder at
his or its post office address as the same shall appear upon the books of the
Corporation. The Redemption Notice shall state: (i) the redemption date; (ii)
the number of shares to be redeemed from such holder and the total number of
shares of Series B Preferred Stock to be redeemed; (iii) the Redemption Price;
and (iv) the place where certificates for such shares are to be surrendered for
payment of the Redemption Price.
(3) On or before the redemption date, each holder of shares of Series B
Preferred Stock to be redeemed shall present and surrender his or its
certificate or certificates (endorsed in such manner as may be required by the
Corporation, or not endorsed if not required by the Corporation) to the
Corporation in the manner and at the place designated in the Redemption Notice,
and thereupon the Redemption Price for such shares shall be paid to or on the
order of such holder.
(4) In the event less than all the shares of Series B Preferred Stock
represented by any such surrendered certificate are redeemed, a new certificate
shall be issued by the Corporation to the registered holder of such surrendered
certificate representing the unredeemed shares.
CORPDAL:63843.1 18747-00001
3
<PAGE>
(d) Effect of Redemption. (1) The shares of Series B Preferred Stock
which have been redeemed shall not be reissued and each surrendered certificate
shall be canceled. The Corporation shall from time to time cause all such shares
redeemed to be retired in the manner provided by law. Such retired shares of
Series B Preferred Stock shall resume the status of authorized but unissued and
non-designated shares of Preferred Stock of the Corporation.
(2) From and after the date fixed for redemption, (A) the shares of
Series B Preferred Stock so designated for redemption shall no longer be
transferrable on the books of the Corporation (except with the consent of the
Corporation); (B) such shares shall not be deemed to be outstanding for any
purpose whatsoever (unless default shall be made by the Corporation in payment
of the Redemption Price); (C) the holders thereof shall cease to be stockholders
with respect to such shares and shall be entitled only to receive the Redemption
Price thereof and (D) dividends on the shares of Series B Preferred Stock so
called for redemption shall cease to accrue. If the Corporation shall default in
making payment of the Redemption Price, then such shares so called for
redemption and then unpaid shall continue to be outstanding as if no such call
for redemption had been made.
4. Rights on Liquidation, Dissolution, etc.
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, the holders of the shares of
Series B Preferred Stock then outstanding shall be entitled to receive out of
the assets of the Corporation available for distribution to its stockholders an
amount in cash equal to $4.00 for each share outstanding (the "Liquidation
Preference"), plus an amount in cash equal to any and all accrued but unpaid
dividends and interest thereon to the date fixed for liquidation, before any
payment shall be made or any assets distributed to the holders of any of the
stock of the Corporation ranking as to liquidation, dissolution or winding up
junior to the Series B Preferred Stock. If the assets of the Corporation are not
sufficient to pay in full the liquidation payments payable to the holders of
outstanding shares of the Series B Preferred Stock and outstanding shares of
securities ("Parity Securities") of the Corporation ranking on a parity with the
Series B Preferred Stock as to liquidation, then the holders of all such shares
shall share ratably in such distribution of assets in accordance with the amount
which would be payable on such distribution if the amounts to which the holders
of outstanding shares of Series B Preferred Stock are entitled were paid in
full.
(b) The sale, conveyance, exchange or transfer of all or substantially
all of the property and assets of the Corporation of the merger or consolidation
of the Corporation into or with any other corporation, or the merger of any
other corporation into it, shall not be deemed a dissolution, liquidation or
winding up of the affairs of the Corporation for purposes of this Section 4.
5. Voting; Consent
CORPDAL:63843.1 18747-00001
4
<PAGE>
(a) The holders of the shares of Series B Preferred Stock shall not be
entitled to vote on matters which may be the subject of proper action by
stockholders of the Corporation except as otherwise provided by law.
(b) In any vote by the holders of Series B Preferred Stock as may be
required by law, each holder of Series B Preferred Stock shall be entitled to
one (1) vote for each share of Series B Preferred Stock.
(c) No consent of holders of the Series B Preferred Stock shall be
required for (i) the creation of any indebtedness of any kind of the
Corporation, (ii) the creation of any class of stock of the Corporation
subordinate, pari passu or senior to the Series B Preferred Stock as to the
payment of dividends and upon liquidation of the Corporation, or (iii) any
increase or decrease in the amount of authorized Common Stock of any increase,
decrease or change in the par value thereof.
6. Except as expressly set forth herein, the holders of the Series B
Preferred Stock shall have no other rights other than those provided by
applicable Delaware law.
CORPDAL:63843.1 18747-00001
5
<PAGE>
IN WITNESS WHEREOF, The Hallwood Group Incorporation has caused this
Certificate of Designation to be signed by William L. Guzzetti, as Executive
Vice President, and attested by Melvin J. Melle, as Secretary, this ___ day of
_______________, 1995.
THE HALLWOOD GROUP INCORPORATED
By: ____________________________________
William L. Guzzetti
Executive Vice President
ATTEST:
By: ______________________
Melvin J. Melle, Secretary
CORPDAL:63843.1 18747-00001
6
