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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: March 4, 1998
INTERFACE, INC.
(Exact name of registrant as specified in its charter)
Georgia 0-12016 58-1451243
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(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
2859 Paces Ferry Road, Suite 2000, 30339
Atlanta, Georgia
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(Address of principal executive (Zip Code)
offices)
(770) 437-6800
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(Registrant's telephone number,
including area code)
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ITEM 5. OTHER EVENTS.
PRESS RELEASE CONCERNING RIGHTS AGREEMENT
On March 4, 1998, Interface, Inc. (the "Company") issued a
press release concerning the Company's implementation of a rights
agreement. A copy of such press release is filed as Exhibit 99.1
hereto and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statement of Businesses Acquired. None.
(b) Pro Forma Financial Information. None.
(c) Exhibits.
The following exhibits are filed herewith:
4.1 Composite Articles of Incorporation of the
Company **
4.3 Rights Agreement between the Company and Wachovia Bank,
N.A., dated as of March 16, 1998 *
99.1 Press Release dated March 4, 1998 **
___________________________
* Incorporated by reference to the Company's Registration
Statement on Form 8-A under the Securities Exchange Act of 1934,
filed on March 4, 1998.
** Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
INTERFACE, INC.
(Registrant)
Date: March 4, 1998 By: /s/ Keith E. Wright
Name: Keith E. Wright
Title: Assistant Treasurer
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EXHIBIT INDEX
Exhibit Number Description
4.1** Composite Articles
of Incorporation of the
Company
4.3* Rights Agreement between the
Company and Wachovia Bank,
N.A., dated as of March 16,
1998
99.1** Press Release dated March 4, 1998
___________________________
* Incorporated by reference to the Company's Registration
Statement on Form 8-A under the Securities Exchange Act of 1934,
filed on March 4, 1998.
** Filed herewith.
ARTICLES OF INCORPORATION
OF
INTERFACE, INC.
(Composite as of March 3, 1998)
I.
The name of the Corporation is:
INTERFACE, INC.
II.
The Corporation is organized pursuant to the provisions of
the Georgia Business Corporation Code.
III.
The Corporation shall have perpetual duration.
IV.
The Corporation is organized for the following purposes:
To manufacture, produce, assemble, fabricate, import,
purchase or otherwise acquire, invest in, own, hold, use,
maintain, service or repair, sell, rent, lease, pledge, mortgage,
exchange, export, distribute, assign and otherwise dispose of,
and to trade and deal in and with, at wholesale or retail, goods,
wares, merchandise, commodities, articles of commerce and
property of every kind and description, including, but not by way
of limitation, carpet; and to engage in, conduct and carry on a
general manufacturing, importing and exporting, merchandising,
leasing, mercantile and trading business in any and all branches
thereof.
To do each and every thing necessary, suitable or proper for
the accomplishment of any of the purposes or the attainment of
any one or more of the objects herein enumerated, or which shall
at any time appear conducive to or expedient for the protection
or benefit of the Corporation.
IN FURTHERANCE OF AND NOT IN LIMITATION of the general
powers conferred by the laws of the State of Georgia and the
objects and purposes herein set forth, it is expressly provided
that to such extent as a corporation organized under the Georgia
Business Corporation Code may now or hereafter lawfully do, the
Corporation shall have the power to do, either as principal or
agent and either alone or in connection with other corporations,
firms or individuals, all and everything necessary, suitable,
convenient or proper for, or in connection with, or incident to,
the accomplishment of any of the purposes or the attainment of
any one or more of the objects herein enumerated, or designed
directly or indirectly to promote the interests of the
Corporation or to enhance the value of its properties; and in
general to do any and all things and exercise any and all powers,
rights and privileges which a corporation may now or hereafter be
authorized to do or to exercise under the Georgia Business
Corporation Code or under any act amendatory thereof,
supplemental thereto or substituted therefor.
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The foregoing provisions of this Article IV shall be
construed both as purposes and powers and each as an independent
purpose and power. The foregoing enumeration of specific
purposes and powers herein specified shall, except when otherwise
provided in this Article IV, be in no wise limited or restricted
by reference to, or inference from, the terms of any provision of
this or any other Article of these Articles of Incorporation.
V.
A. The total number of shares of capital stock which the
Corporation shall have authority to issue is 85,000,000 shares,
consisting of 40,000,000 shares of Class A Common Stock of $0.10
par value per share, 40,000,000 shares of Class B Common Stock of
$0.10 par value per share (the Class A Common Stock and the Class
B Common Stock hereinafter sometimes referred to collectively as
the "Common Stock"), and 5,000,000 shares of Preferred Stock of
$1.00 par value per share.
B. The Corporation may purchase its own shares of capital
stock out of unreserved and unrestricted earned surplus and
capital surplus available therefor and as otherwise provided by
law.
C. The voting powers, designations, preferences and
relative rights of the classes of Common Stock and Preferred
Stock of the Corporation which are fixed by these Articles of
Incorporation, and the authority expressly vested in the Board of
Directors to fix by resolution or resolutions providing for the
issue of Preferred Stock the voting power (if any), designations,
preferences and relatives rights of the shares of Preferred Stock
which are not fixed by these Articles of Incorporation, are as
follows:
(1) The Class A Common Stock and the Class B Common
Stock shall be identical in all respects and the holders thereof
shall have equal rights and privileges, except as otherwise
provided in this Article V or required by law.
(2) Subject to the provisions of any applicable law,
or of the By-Laws of the Corporation as from time to time
amended, with respect to the fixing of a record date for the
determination of shareholders entitled to vote and except as
otherwise provided by any applicable law or by the resolution or
resolutions of the Board of Directors providing for the issue of
any series of Preferred Stock, the holders of outstanding shares
of Common Stock shall have and possess exclusive voting power and
rights for the election of directors and for all other purposes.
The holders of outstanding shares of Common Stock shall be
entitled to vote as follows:
(a) With respect to the election of directors,
holders of Class A Common Stock voting as a separate class
shall be entitled to elect the largest number of directors
that constitutes a minority of the Board of Directors and
holders of Class B Common Stock voting as a separate class
shall be entitled to elect the smallest number of directors
that constitutes a majority of the Board of Directors.
(b) The holders of Class A Common Stock as a
separate class shall be entitled by majority vote to remove,
with or without cause, any director elected by the holders
of Class A Common Stock and the holders of Class B Common
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Stock as a separate class shall be entitled by majority vote
to remove, with or without cause, any director elected by
the holders of Class B Common Stock.
(c) Any director elected by the Board of
Directors to fill a vacancy shall serve until the next
Annual Meeting of Shareholders and until his or her
successor has been elected and qualified. Any vacancy in
the office of a director elected by the holders of Class A
Common Stock may be filled by majority vote of such holders
voting as a separate class and any vacancy in the office of
a director elected by the holders of Class B Common Stock
may be filled by majority vote of such holders voting as a
separate class or, in the absence of a shareholder vote, in
either case by majority vote of the remaining directors
elected by holders of the same class. Any vacancy created
by increasing the number of directors may be filled by
majority vote of the holders of Class A Common Stock voting
as a separate class or of the holders of Class B Common
Stock voting as a separate class or, in the absence of a
shareholder vote, in either case by majority vote of the
directors of such class, whichever is necessary in order to
insure that holders of Class B Common Stock (or directors
elected by them) shall have elected the smallest number of
directors constituting a majority of Board of Directors, and
that holders of Class A Common Stock (or directors elected
by them) shall have elected the other members of the Board
of Directors.
(d) Except as otherwise provided herein or in the
By-Laws of the Corporation or otherwise required by law, the
holders of Class A and Class B Common Stock shall vote
together as a single class on all matters submitted for vote
of the shareholders, with each share being entitled to one
vote.
(e) Anything in this paragraph C to the contrary
notwithstanding, Class A and Class B Common Stock shall be
deemed to be in all respects a single class of Common Stock,
and no distinction whatsoever shall exist between the voting
rights or any other rights and privileges of the holders of
Class A and Class B Common Stock from and after the earlier
of the following:
(i) the first date (after the effective date
of these Amended and Restated Articles of
Incorporation) on which the number of issued and
outstanding shares of Class B Common Stock shall
constitute less than 10% of the aggregate number
of issued and outstanding shares of Class A and
Class B Common Stock. [; or]
(ii) June 30, 1983, unless the Corporation
has theretofore completed the issuance and sale of
shares of Class A Common Stock to underwriters in
connection with a public offering thereof
registered on a Registration Statement on Form S-1
filed with the Securities and Exchange Commission.
(f) Anything in this subparagraph (2) to the
contrary notwithstanding: (i) At any time when no shares of
Class B Common Stock are issued and outstanding the holders
of Class A Common Stock shall have exclusive voting power on
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all matters, and [(ii)] at any time when no shares of Class
A Common Stock are outstanding the holders of Class B Common
Stock shall have exclusive voting power on all matters.
(3) Each holder of record of Class B Common Stock may
at any time or from time to time, in such holder's sole
discretion, elect to convert any whole number of such
holder's Class B Common Stock into fully paid and
nonassessable Class A Common Stock at the rate of one share
of Class A Common Stock for each share of Class B Common
Stock converted. Any such conversion may be effected by the
holder surrendering the certificate or certificates
evidencing the Class B Common Stock to be converted, duly
endorsed, at the office of any transfer agent for the Class
B Common Stock, together with a written notice (in form
satisfactory to the Corporation) that the holder elects to
convert all or a specified number of shares of Class B
Common Stock and stating the name or names in which such
holder desires the certificate or certificates for such
shares of Class A Common Stock to be issued. Promptly
thereafter, the Corporation shall issue and deliver to such
holder or such holder's nominee or nominees a certificate or
certificates for the number of shares of Class A Common
Stock to which such holder shall be entitled as aforesaid.
Such conversion shall be deemed to have been made at the
close of business at the date of such surrender and the
person or persons in whose names the certificates of Class A
Common Stock are to be issued on such conversion shall be
treated for all purposes as the holder or holders of such
Class A Common Stock at such time. Authorized shares of
Class A Common Stock, to the extent that such shares shall
be subject to issuance or reissuance upon conversion of
shares of issued and outstanding Class B Common Stock as
aforesaid, shall be held in reserve by the Corporation,
without the necessity of a further declaration by the Board
of Directors, to be issued or reissued only upon conversion
of shares of issued and outstanding Class B Common Stock.
No Class B Common Stock may be issued unless the reserved
shares of Class A Common Stock are sufficient to satisfy the
conversion privilege that will then exist with respect to
such Class B Common Stock when issued.
(4) Any transfer of record of shares of Class B Common
Stock other than to a Qualified Transferee (as herein
defined) shall be conclusively deemed to constitute an
election by the holder of record thereof to convert the said
shares of Class B Common Stock into an equal number of
shares of Class A Common Stock. As used herein, Qualified
Transferee means any one or more of (i) the transferor's
spouse, issue, parents or siblings, or a trust for the
benefit of the transferor or any of such persons, (ii) in
the event of the transferor's death or legal disability, the
transferor's executor, administrator or personal
representative; [,] (iii) any transferee receiving the
shares as a gift, legacy or inheritance, or as a
distribution from a corporation or partnership in respect of
the transferee's ownership interest therein, or (iv) any
other person approved by the Board of Directors or its
designee upon written application submitted to the Secretary
of the Corporation at least five business days prior to the
date of the transfer. Any shares of Class B Common Stock
transferred beneficially but not of record may upon
application by any record holder of Class B Common Stock be
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denied the right to vote and receive payment of dividends
until the shares have been transferred of record.
(5) Shares of Class B Common Stock (in addition to
those issued in connection with the reclassification of the
Company's [Corporation's] Common Stock effected on March 2,
1983) may be issued only (i) in connection with an
acquisition by the Company [Corporation] or any of its
subsidiaries of any other firm, corporation or business
enterprise, (ii) pursuant to any employee benefit plan now
in effect or hereafter adopted, (iii) in exchange for Class
A Common Stock held by officers, directors or employees of
the Company [Corporation], or (iv) to effect a subdivision
of such shares in the form of a stock split, stock dividend
or other distribution in respect of such shares; provided,
however, that at no time shall the number of shares;
provided, however, that at no time shall the number of
shares of Class B Common Stock issued and outstanding exceed
6,000,000 (as adjusted to reflect any subdivision, split,
stock dividend, recapitalization, reclassification or
consolidation of such shares).
(6) Upon any stock dividend or other distribution in
the form of Common Stock of the Corporation, only Class A
Common Stock may be distributed in respect of Class A Common
Stock and only Class B Common Stock may be distributed in
respect of Class B Common Stock. Whenever any such
distribution is made, the same number of shares shall be
distributed in respect of each outstanding share of Class A
and Class B Common Stock. The Corporation shall not combine
or subdivide shares of either of such classes without at the
same time making a proportionate combination or subdivision
of shares of the other class.
(7) Except as otherwise provided by applicable law, or
by the resolution or resolutions of the Board of Directors
providing for the issuance of any series of Preferred Stock,
the holders of shares of Preferred Stock shall not, by
reason of such holding, (i) have any right to vote in the
election of directors or for any other purpose, nor (ii) be
entitled to notice of any meeting of shareholders.
(8) Before any sum or sums shall be set aside or
applied to the purchase of any outstanding shares of Common
Stock, and before any dividend shall be declared or paid or
any distribution ordered or made upon the Common Stock
(other than a dividend payable in shares of Common Stock),
the Corporation shall have complied with the dividend and
sinking fund requirements (if any) set forth in any
resolution or resolutions of the Board of Directors with
respect to the issue of any series of Preferred stock of
which any shares shall at the time be outstanding.
(9) Subject to the provisions of Paragraph C(8) of
this Article V, and to such other limitations as may be
specified in any resolution or resolutions of the Board of
Directors providing for the issue of any series of Preferred
Stock, the holders of outstanding shares of Common Stock
shall be entitled, to the exclusion of the holders of shares
of Preferred Stock of any and all series, to receive such
dividends payable with respect to the Common Stock as may be
declared by the Board of Directors from time to time.
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(10) In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or
involuntary, after payment shall have been made to the
holders of shares of Preferred Stock of the full amount to
which any series of the Preferred Stock is entitled as set
forth in the resolution or resolutions of the Board of
Directors providing for the issue thereof, the holders of
outstanding shares of Common Stock shall be entitled, to the
exclusion of the holders of shares of Preferred Stock of any
and all series, to share in all remaining assets of the
Corporation available for distribution to its shareholders
ratably according to the number of shares of Common Stock
held by them. Neither the merger nor consolidation of the
Corporation with or into any other corporation or
corporations, nor the merger or consolidation of any other
corporation or corporations into or with the Corporation,
nor the sale, transfer, mortgage, pledge or lease by the
Corporation of all or any part of its assets shall be deemed
to be a liquidation, dissolution or winding up of the
Corporation.
(11) The Preferred Stock may be issued from time to
time in one or more series of any number of shares, except
that the aggregate number of shares issued and not cancelled
of any and all such series shall not exceed the total number
of shares of Preferred Stock hereinabove authorized. Each
series of Preferred Stock shall be distinctively designated
by number, letter or descriptive words.
(12) Authority is hereby expressly granted to and
vested in the Board of Directors to issue the Preferred
Stock at any time, or from time to time, as Preferred Stock
of any one or more series, and, in connection with the
establishment of each such series, to fix by resolution or
resolutions providing for the issue of the shares thereof
the voting powers, if any, and the designation, preferences
and relative rights of each such series of Preferred Stock
to the full extent now or hereafter permitted by these
Articles of Incorporation and the laws of the State of
Georgia, including, without limiting the generality of the
foregoing, all of the following matters which may vary
between each series:
(a) The distinctive designation of such series
and the number of shares which constitute such series, which
number may be increased or decreased either before or
subsequent to the issuance of any shares of such series (but
not below the number of shares of such series then
outstanding), from time to time by action of the Board of
Directors;
(b) The dividend rate of such series, the dates
of payment thereof, and any limitations, restrictions or
conditions on the payment of dividends, including whether
dividends shall be cumulative and, if so, from which date or
dates, and the relative rights of priority, if any, of
payment of dividends on the shares of each series;
(c) The price or prices at which, and the terms,
times and conditions on which, the shares of such series may
be redeemed at the option of the Corporation or at the
option of the holders of such shares;
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(d) The amount or amounts payable upon the shares
of such series in the event of voluntary or involuntary
liquidation, dissolution or winding up of the Corporation,
and the relative rights of priority, if any, of payment to
the holders of shares of each series;
(e) Whether the shares of such series shall be
entitled to the benefit of a purchase, retirement or sinking
fund to be applied to the redemption or purchase of such
series, and if so entitled, the amount of such fund and the
manner of its application, including the price or prices at
which the shares of such series may be redeemed or purchased
through the application of such fund;
(f) Whether the shares of such series shall be
made convertible into, or exchangeable for, shares of any
other class or classes of stock of the Corporation, or the
shares of any other series of Preferred Stock, and, if made
so convertible or exchangeable, the conversion price or
prices, or the rate or rates of exchange, and the
adjustments thereof, if any, at which such conversion or
exchange may be made, and any other terms and conditions of
such conversion or exchange;
(g) Whether the shares of such series shall have
any voting rights, and, if voting rights are so granted, the
extent of such voting rights and the terms and conditions
under which such voting rights may be exercised;
(h) Whether the issue of any additional shares of
such series or of any future series in addition to such
series shall be subject to restrictions in addition to the
restrictions, if any, on the issue of additional shares
imposed in the resolution or resolutions fixing the terms of
any outstanding series of Preferred Stock theretofore issued
pursuant to this subparagraph (12), and, if subject to
additional restrictions, the extent of such additional
restrictions; and
(i) Whether the shares of such series shall be
entitled to the benefit of limitations restricting the
purchase of, the payment of dividends on, or the making of
other distributions in respect of stock of any class of the
Corporation, and the terms of any such restrictions;
provided, however, that such restrictions shall not include
any prohibition on the payment of dividends or with respect
to distributions in the event of voluntary or involuntary
liquidation established for any outstanding series of
Preferred Stock theretofore issued.
(13) SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK.
(a) DESIGNATION. 250,000 shares of the Preferred
Stock, $1.00 par value, of the Corporation, each with a face
value of $100.00 per share ("Face Value"), shall constitute a
series of such Preferred Stock designated as "Series A Cumulative
Convertible Preferred Stock" (herein referred to for convenience
as "Series A Preferred Stock").
(b) DIVIDENDS. Holders of record of Series A
Preferred Stock ("Record Holders") shall be entitled to receive,
and the Corporation shall pay, when, if, and as declared by the
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Board of Directors, but only out of funds legally available
therefor, preferential cash dividends at the rate of seven
percent (7%) per annum on the sum of (i) the Face Value of each
share of Series A Preferred Stock held by such Record Holders and
(ii) the amount, if any, of previously accrued and due but unpaid
dividends on such share, and no more. Such dividends shall be
calculated on the basis of a 360-day year of four 90-day quarters
(except as to any calculation for a period less than a full
quarter, as to which the amount accrued shall be calculated based
on the actual number of days elapsed and a year of 365 or 366
days, as applicable) and shall be payable on the 15th day of
January, April, July, and October of each year, commencing July
15, 1993, to Record Holders on the respective dates fixed for
such purpose by the Board of Directors in advance of the payment
of each dividend. Dividends on each issued and outstanding share
of the Series A Preferred Stock shall be cumulative and shall
accrue, whether or not declared and paid, from the date of
original issuance thereof, except as provided in subparagraph
(13)(g). The date on which the Corporation initially issues any
particular share of Series A Preferred Stock shall be deemed the
"date of original issuance" regardless of the number of times
transfer of such share is made or replacement certificates issued
to evidence such share. No dividend shall be deemed due and
payable until the quarterly dividend payment date therefor as
provided above, and the inclusion of any such dividend (as an
accrued and due but unpaid dividend) in applying the dividend
rate to calculate the amount of future dividends shall not
commence until the next succeeding day after the dividend payment
date for such dividend, and then only if and to the extent that
such dividend was neither paid on such date nor declared as
payable on such date and funds set apart for the payment thereof
on such date.
If all dividends accrued in respect of the Series A
Preferred Stock have not been fully paid, or declared and set
apart for payment in full, the Corporation shall not declare or
pay or set apart for payment any dividend on, make any other
distribution in respect of, or repurchase, redeem, or retire,
shares of any other class of stock of the Corporation ranking
junior to the Series A Preferred Stock as to dividends or upon
liquidation (other than dividends payable in Common Stock of the
Corporation or in any other class of stock of the Corporation
ranking junior to the Series A Preferred Stock as to dividends
and upon liquidation).
Subject to the foregoing provisions, dividends and other
distributions, whether payable in cash, stock, or otherwise as
determined by the Board of Directors, may be declared and paid on
Common Stock and on any other class of stock ranking junior to
the Series A Preferred Stock as to dividends or upon liquidation,
out of the remaining funds of the Corporation legally available
therefor, and the Series A Preferred Stock shall not be entitled
to participate therein.
Except as otherwise provided herein, if at any time the
Corporation pays less than the total amount of dividends then
accrued with respect to the Series A Preferred Stock, such
payment shall be distributed ratably among the holders of Series
A Preferred Stock based upon the number of shares of Series A
Preferred Stock held by each such holder.
(c) LIQUIDATION RIGHTS. Upon any liquidation,
dissolution, or winding up of the Corporation, Record Holders of
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Series A Preferred Stock shall be entitled to receive out of the
assets of the Corporation available for distribution to its
shareholders, before any distribution or payment shall be made to
holders of Common Stock or of any other class of stock ranking
junior to the Series A Preferred Stock as to liquidation, an
amount in cash equal to the Face Value per share of outstanding
Series A Preferred Stock PLUS the amount of accrued but unpaid
dividends accumulated thereon, if any, to the date of payment of
such liquidating distribution. Holders of Series A Preferred
Stock shall not be entitled to any further payment upon any such
liquidation, dissolution, or winding up. If upon such
liquidation, dissolution, or winding up of the Corporation, the
assets available to be distributed among the holders of Series A
Preferred Stock shall be insufficient to permit the payment to
holders of Series A Preferred Stock, and to holders of all other
stock, if any, ranking PARI PASSU with the Series A Preferred
Stock as to liquidation, of the full amounts distributable as
aforesaid and by the terms of such other stock, then the entire
remaining assets of the Corporation to be distributed shall be
distributed ratably among the holders of Series A Preferred Stock
and the holders of such other stock based upon the amount they
are otherwise entitled to hereunder and under the then terms of
such other stock. Written notice of any liquidation, dissolution,
or winding up of the Corporation -- stating a liquidating
distribution payment date, the amount of such payment, and the
place where said sums shall be payable -- shall be given to all
Record Holders by certified mail, postage prepaid, not less than
thirty (30) days prior to the payment date stated therein, such
notice to be addressed to each Record Holder at its address as
shown on the Corporation's stock records for the Series A
Preferred Stock. For the purposes hereof, the voluntary sale,
lease, exchange, or transfer, whether for cash, securities, or
otherwise, of all or any part of its property or assets to, or a
business combination or merger of the Corporation into or with,
one or more other corporations or business entities, or the
reduction of the Corporation's capital stock, shall not be
deemed, without more, to be a liquidation, dissolution, or
winding up of the Corporation.
(d) VOTING RIGHTS.
(1) Except as otherwise required by law or the Amended
and Restated Articles of Incorporation of the Corporation (the
"Articles of Incorporation"), or as set forth herein, holders of
Series A Preferred Stock shall not have any right to vote or to
give or withhold consent, for any purpose, on any matter
whatsoever on which a vote or consent of the shareholders of the
Corporation may be required, taken, or solicited. Record Holders
of Series A Preferred Stock shall be entitled to receive,
however, (i) notice of any meeting of shareholders at which a
vote or consent of shareholders may be taken, at the same time
and in the same manner as shareholders of the Corporation
entitled to vote, and (ii) all information provided by the
Corporation to holders of Class A Common Stock as a class,
whether or not in connection with a meeting or a vote or consent
of shareholders.
(2) For so long as any shares of Series A Preferred
Stock are outstanding, the affirmative vote or written consent of
the holders of at least a majority of the outstanding shares of
Series A Preferred Stock, voting as a class (which class shall
also include the holders of shares of other series of Preferred
Stock, if any, that by the governing terms thereof have at that
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time similar voting rights), will be required for any amendment,
alteration, or repeal of any provision of the Articles of
Incorporation that would adversely affect the powers,
preferences, or special rights of all Preferred Stock as a class.
(3) For so long as any shares of Series A Preferred
Stock are outstanding, the affirmative vote or written consent of
the holders of at least a majority of the outstanding shares of
Series A Preferred Stock (voting alone as a separate class) will
be required for any amendment, alteration, or repeal of any
provision of this Subparagraph (13) or any other provision of the
Articles of Incorporation that would adversely affect the powers,
preferences, or special rights solely of the Series A Preferred
Stock.
(4) For the purposes of this Subparagraph (13), none
of (i) the establishment or enlargement of a class or series of
any class of stock, whether or not by amendment of the Articles
of Incorporation, ranking senior to or PARI PASSU with the Series
A Preferred Stock as to dividends or upon liquidation, (ii) an
amendment of the Articles of Incorporation increasing or
decreasing the aggregate number of shares of authorized Preferred
Stock, as a class, or (iii) an amendment of this Subparagraph
(13) increasing or decreasing the number of shares of Series A
Preferred Stock designated and constituted as authorized to be
issued hereunder, so long as any decrease described in clause
(ii) or (iii) does not affect the status of any issued and
outstanding share of Series A Preferred Stock or other Preferred
Stock as being validly issued and outstanding, shall be
considered to affect adversely the powers, preferences, or
special rights of the Series A Preferred Stock or of all
Preferred Stock as a class, as the case may be; PROVIDED,
HOWEVER, that for purposes of this Subparagraph (13), the
establishment at any time prior to June 30, 1995, of a class or
series of any class of stock ranking senior to the Series A
Preferred Stock as to dividends or upon liquidation shall be
considered to affect adversely the powers, preferences, and
special rights of the Series A Preferred Stock or all of the
Preferred Stock as a class, as the case may be.
(e) OPTIONAL REDEMPTION BY THE CORPORATION.
(1) The Corporation, at its sole option, and from time
to time at any time, subject to the following limitations, may
redeem the whole or any part of the then outstanding Series A
Preferred Stock by paying in cash for each share redeemed the
Face Value thereof PLUS an amount equal to the full dividends
accrued but unpaid on each such share (whether or not declared)
through the redemption date (the "Redemption Price"):
-10-<PAGE>
Time Period Limitation on Redemption
--------------------------------- -------------------------
Prior to June 1, 1995 No redemption permitted
June 1, 1995 through May 31, 1996 Redemption permitted
ONLY if Market Price (as
defined in subparagraph
(13) (g) (4) (vii) below
on the date notice of
redemption is sent by
the Corporation exceeds
120% of the effective
Conversion price (as
defined in subparagraph
(13) (g) (1)) per whole
share of Class A Common
Stock on such date
After May 31, 1996 No limitations
Notwithstanding the foregoing, for so long as any dividend
accrued and due on the Series A Preferred Stock has not been paid
or declared and sufficient funds set aside for the payment
thereof, the Corporation may not: (i) redeem any shares of Series
A Preferred Stock unless all shares of Series A Preferred Stock
then outstanding are simultaneously redeemed; (ii) purchase any
shares of Series A Preferred Stock, except in accordance with a
purchase or exchange offer made on the same terms to all Record
Holders of Series A Preferred Stock; or (iii) purchase any shares
of any class or series (or make any payment to any sinking fund
for the redemption or purchase of any shares of any class or
series) ranking PARI PASSU with or junior to the Series A
Preferred Stock as to dividends or upon liquidation, except, in
the case of a class or series of stock ranking pari PASSU with
the Series A Preferred Stock as to dividends or upon liquidation,
in accordance with a purchase or exchange offer made to all
Record Holders of Series A Preferred Stock and the holders of
shares of such class or series of PARI PASSU stock, on a pro rata
basis.
(2) If less than all of the Series A Preferred Stock
at any time outstanding shall be called for redemption hereunder,
the shares to be redeemed shall be selected on a pro rata basis
(with rounding to the nearest whole share) and upon such terms
and conditions as the Board of Directors may determine (subject
to the limitations and provisions contained in this subparagraph
(13)). In case of a pro rata redemption, the Corporation, at its
option, may nonetheless redeem all of the shares of Series A
Preferred Stock of any Record Holder if, as a result of a
straight pro rata redemption, that holder would then hold less
than 500 of such shares. Nothing herein shall limit the Company's
right to redeem any shares of Series A Preferred Stock by
agreement with the holder thereof.
(3) Notice of redemption shall be mailed, certified
mail, postage prepaid, not less than 20 days nor more than 60
days prior to the redemption date specified in that notice, to
each Record Holder of the shares to be redeemed at the address
appearing on the Corporation's stock records for the Series A
Preferred Stock. Neither failure to mail such notice to one or
more of such holders nor any defect in such notice shall affect
the sufficiency of the proceedings for redemption as to other
holders. Each such notice shall state: (i) the redemption date;
(ii) the applicable Redemption Price; (iii) the number of shares
of Series A Preferred Stock to be redeemed and, if less than all
the outstanding shares of Series A Preferred Stock are to be
redeemed, the basis upon which the Corporation proposes to
determine such lesser number of shares to be redeemed and the
number of shares of such Record Holder that would be redeemed on
such basis if such Record Holder continued to hold all of its
-11-<PAGE>
shares on the Partial Redemption Determination Date (as defined
below); and (iv) the place or places at which the certificates
representing such shares are to be surrendered for payment of the
Redemption Price. In case of a redemption of less than all the
outstanding shares of Series A Preferred Stock, the Corporation's
final determination of the number of shares of each holder to be
redeemed shall be made with respect to Record Holders of Series A
Preferred Stock as of the close of business two (2) business days
immediately preceding the redemption date (the "Partial
Redemption Determination Date"). Neither the transfer nor the
conversion of shares of Series A Preferred Stock so determined
for redemption shall be permitted after the Partial Redemption
Determination Date. The Corporation may require that any transfer
of shares of Series A Preferred Stock permitted by it between the
date of the above notice to Record Holders and the Partial
Redemption Determination Date refer to the Corporation's notice
of redemption and otherwise reflect that the transferee will
acquire such shares subject to possible redemption as stated in
such notice.
(4) If notice of redemption has been given pursuant to
subparagraph (13)(e)(3) above and if, on or before the redemption
date specified in such notice, the funds necessary for such
redemption have been irrevocably deposited by the Corporation
with a Paying Agent (as defined in subparagraph 13(e)(5) below),
or otherwise irrevocably designated or set aside in trust for the
pro rata benefit of holders of the shares so called for
redemption in a manner permitted by the Georgia Business
Corporation Code, then from and after the redemption date,
notwithstanding that any certificate for shares so called for
redemption shall not have been surrendered for cancellation or
that any such shares may have been transferred, (i) all of the
shares so called for redemption (as finally determined on the
Partial Redemption Determination Date in case of a partial
redemption) shall no longer be deemed outstanding, (ii) all
dividends shall cease to accrue thereon, and (iii) all voting and
other rights with respect to such shares shall cease and
terminate (except the right to receive the Redemption Price upon
a surrender of certificate(s) representing such shares). Upon
surrender in accordance with said notice of the certificates for
any shares so called for redemption (properly endorsed or
assigned for transfer, with signatures guaranteed by a national
bank or a New York Stock Exchange member firm), such shares shall
be redeemed by the Corporation at the Redemption Price. If fewer
than all the shares represented by any such certificate are
redeemed, a new certificate representing the unredeemed shares
shall be issued promptly without cost to the Record Holder
thereof.
(5) On or before the redemption date, the Corporation
shall deposit with an agent that is a bank or a trust company
(the "Paying Agent"), or otherwise designate or set aside as
provided in subparagraph (13)(e)(4) above, funds sufficient to
pay the Redemption Price for all shares of Series A Preferred
Stock to be redeemed on the redemption date, other than any such
shares that may have been previously delivered for other
consideration in a transaction otherwise permitted by this
Subparagraph (13). Any interest earned on funds so designated,
set aside, or deposited with a Paying Agent shall be retainable
by or payable to the Corporation, and holders of shares of Series
A Preferred Stock shall have no rights with respect thereto. Any
funds so deposited with a Paying Agent that shall remain
unclaimed by the Record Holders of redeemed shares at the end of
-12-<PAGE>
one year after the redemption date, together with any previously
unpaid interest earned thereon, shall be released or repaid by
the Paying Agent to the Corporation, and thereafter such Record
Holders shall look only to the Corporation for payment of the
Redemption Price.
(f) MANDATORY REDEMPTION.
(1) From and after May 31, 2003, each Record Holder of
a share of Series A Preferred Stock shall have the right, upon
written notice to the Corporation, to require the Corporation, to
the extent permitted under applicable law, and subject to any
then applicable provisions in any contract, credit agreement,
indenture, or other outstanding debt security or instrument
binding upon the Corporation as of the date of filing of the
Corporation's Articles of Amendment adding this Subparagraph (13)
to paragraph C of Article V of the Corporation's Articles of
Incorporation, or any provisions in any subsequent contracts,
credit agreements, indentures, or other outstanding debt
securities or instruments binding upon the Corporation that are
similar in nature and effect to (and no more restrictive than)
the provisions in effect as of such date, to redeem at the
Redemption Price some or all of the shares of Series A Preferred
Stock owned by such Record Holder. No redemption may be requested
for a fractional share, or for less than all of a Record Holder's
shares if, as a result, such holder would hold of record less
than 500 shares of Series A Preferred Stock.
(2) The Corporation shall set the redemption date at
not more than 60 days after receipt by the Corporation of a
redemption notice pursuant to subparagraph (13)(f)(1), and the
Corporation shall give notice to the Record Holder thereof. In
order to receive payment of the Redemption Price, such Record
Holder must surrender to the Corporation (properly endorsed or
assigned for transfer, with signatures guaranteed by a national
bank or a New York Stock Exchange member firm) all stock
certificates representing the shares of Series A Preferred Stock
to be redeemed by the Corporation. If less than the full number
of shares of Series A Preferred Stock evidenced by any such
surrendered stock certificate are being redeemed, a new stock
certificate representing the unredeemed shares shall be issued
promptly without cost to the Record Holder thereof.
(3) If a Record Holder demands redemption pursuant to
subparagraph (13)(f)(1) above and if, by the redemption date, the
funds necessary for such redemption have been irrevocably
deposited by the Corporation with a Paying Agent, or otherwise
irrevocably designated or set aside as provided in subparagraph
(13)(e)(4), then from and after such redemption date,
notwithstanding that any certificate for any shares so designated
for redemption has not been surrendered by the Record Holder for
cancellation or that any such shares may have been transferred
(whether with or without the Corporation's permission), (i) any
shares so designated for redemption shall no longer be deemed
outstanding, (ii) any dividends payable thereon shall cease to
accrue, and (iii) all voting and other rights with respect to
such shares shall cease and terminate (except the right to
receive the Redemption Price upon a surrender of certificate(s)
representing such shares). Any interest earned on funds so
designated, set aside, or deposited with a Paying Agent shall be
retainable by or payable to the Corporation, and the Record
Holder of any shares of Series A Preferred Stock being redeemed
shall have no rights with respect thereto. Any funds so deposited
-13-<PAGE>
with a Paying Agent that shall remain unclaimed by the Record
Holder of any such redeemed shares at the end of one year after
the redemption date, together with any previously unpaid interest
earned thereon, shall be released or repaid by the Paying Agent
to the Corporation, and thereafter such Record Holder shall look
only to the Corporation for payment of the Redemption Price.
(4) The Corporation shall not be required to establish
any sinking or retirement fund with respect to the shares of
Series A Preferred Stock.
(g) CONVERSION.
(1) Subject to and upon compliance with the provisions
of this subparagraph (13)(g), any Record Holder of Series A
Preferred Stock may, at its option, convert any or all such
shares of stock into shares of Class A Common Stock at the rate
of one share of Class A Common Stock (the "Conversion Factor")
for each $14.7875 (the "Conversion Price") of Conversion Value
(as defined below) of the shares of Series A Preferred Stock so
converted, subject to adjustments as set forth herein below. The
"Conversion Value'' of a share of Series A Preferred Stock shall
be equal to the Face Value thereof PLUS the amount of any accrued
but unpaid dividends thereon (whether or not declared),
calculated as of the applicable Conversion Date (as defined in
subparagraph (13)(g)(2) below). If a residual amount of
Conversion Value remains following a conversion of all shares
tendered for conversion (that is, an amount less than the then
effective Conversion Price for another whole share of Class A
Common Stock), the Corporation shall pay to the Record Holder in
cash such residual amount of Conversion Value in lieu of the
issuance of any fractional share of Series A Preferred Stock or
any fractional share of Class A Common Stock. If any share of
Series A Preferred Stock is called for redemption as provided in
Section (e) hereof, the conversion rights pertaining thereto will
terminate at the close of business two (2) business days
immediately preceding the redemption date thereof, provided that
if such redemption is not made on such redemption date, the
conversion rights set forth in this subparagraph (13) shall
thereafter be in effect (subject to the provisions of this
subparagraph (13)).
(2) A Record Holder of shares of Series A Preferred
Stock may exercise the conversion right as to all or any of the
shares (but not as to (i) a number of shares of Series A
Preferred Stock having an aggregate Conversion Value that is less
than the then effective Conversion Price for a whole share of
Class A Common Stock, or (ii) a number of shares of Series A
Preferred Stock that would result in such holder owning of record
less than 500 shares of Series A Preferred Stock) by delivering
to the Corporation during regular business hours, at its
principal executive office or at any such other place as may be
designated by the Corporation, the certificate or certificate(s)
for the shares of Series A Preferred Stock to be converted, duly
endorsed or assigned in blank (or to the Corporation if required
by it), with signatures guaranteed by a national bank or a New
York Stock Exchange member firm, and accompanied by written
notice stating that the Record Holder elects to convert such
shares of Series A Preferred Stock and stating the name or names
(with address) in which the certificate or certificates for the
Class A Common Stock are to be issued (subject to the provisions
of subparagraph (13)(j)). Conversion shall be deemed to have been
effected on the date when such delivery is made, and such date is
-14-<PAGE>
referred to herein as the "Conversion Date". From and after the
Conversion Date, no further dividends shall accrue with respect
to converted shares of Series A Preferred Stock, and no
previously accrued but unpaid dividends shall be payable with
respect thereto, the amount of any such previously accrued and
unpaid dividend to be included in the Conversion Value of the
converted shares on the Conversion Date as provided above. As
promptly as practicable after the Conversion Date (but in no
event later than five (5) business days thereafter), the
Corporation shall issue and deliver to or upon the written order
of such Record Holder (subject to the provisions of subparagraph
(13)(j)) a certificate or certificates for the number of full
shares of Class A Common Stock to which any such Record Holder is
entitled, a check or cash in respect of any residual amount of
Conversion Value of any converted share of Series A Preferred
Stock, and a new certificate for any unconverted shares of Series
A Preferred Stock previously represented by a surrendered
certificate (as described further below). Any person in whose
name the certificate or certificates for shares of Class A Common
Stock are to be issued shall be deemed to become a holder of
record of such shares on the applicable Conversion Date, unless
the transfer books of the Corporation are closed on that date, in
which event such person shall be deemed to have become a holder
of record of such shares on the next succeeding date on which the
transfer books are open, but the applicable Conversion Factor and
Conversion Value shall be those in effect on the Conversion Date.
Upon conversion of only a portion of the shares of Series A
Preferred Stock covered by a surrendered certificate, the
Corporation shall issue and deliver to or upon the written order
of the Record Holder of the surrendered certificate, at the
Corporation's expense, a new certificate for Series A Preferred
stock representing the unconverted shares covered by the
surrendered certificate. Such new certificate shall entitle the
Record Holder thereof to dividends on the shares of Series A
Preferred Stock represented thereby to the same extent as if the
certificate theretofore covering such unconverted shares of
Series A Preferred Stock had not been surrendered in connection
with the conversion.
(3) No fractional shares of Class A Common Stock, or
scrip in respect thereof, shall be issued upon conversion of
Series A Preferred Stock. Instead, in any case in which a
fractional share of Class A Common Stock would otherwise be
issuable because the amount of remaining Conversion Value after
aggregation of all converted shares of Series A Preferred Stock
is less than the then effective Conversion Price for a whole
share of Class A Common Stock, the Corporation shall pay the
converting Record Holder the cash amount of such remaining
Conversion Value on the same date as delivery of certificates
relating to the shares of Class A Common Stock delivered in
connection with any such conversion, or within five (5) business
days of the Conversion Date.
(4) The Conversion Factor shall be subject to
adjustment from time to time as follows, PROVIDED, HOWEVER, that
no adjustment to the Conversion Factor need be made until
cumulative adjustments would affect the Conversion Factor by more
than one percent (1%):
(i) If the Corporation at any time or from time
to time shall issue warrants, options, or other rights
(including without limitation any class of common stock
convertible into Class A Common Stock) to the holders
-15-<PAGE>
of Class A Common Stock, as a class, entitling them to
subscribe for or purchase shares of Class A Common
Stock for a consideration per share less than the
Market Price per share of the Class A Common Stock (as
defined in clause (vii) below) on the date of such
issuance, then in each case the Conversion Factor shall
be adjusted by multiplying the Conversion Factor in
effect on the record date fixed for the determination
of holders of Class A Common Stock entitled to receive
such warrants, options, or rights by a fraction the
numerator of which is the number of shares of Class A
Common Stock outstanding on such record date plus the
number of additional shares of Class A Common Stock
offered for subscription or purchase, and the
denominator of which is the number of shares of Class 7
Common Stock outstanding on such record date plus the
number of shares of Class A Common Stock that the
aggregate offering purchase price of the total number
of shares of additional Class A Common Stock subject to
such warrants, options, or rights would purchase at
such Market Price. There shall be excluded from the
operation of this clause (i) any rights to acquire
shares of Class A Common Stock pursuant to any dividend
reinvestment plan established by the Corporation.
(ii) If, at any time or from time to time, the
number of shares of Class A Common Stock outstanding is
increased by a stock dividend payable in shares of
Class A Common Stock or by a subdivision or split-up of
shares of Class A Common Stock, then the Conversion
Factor in effect on the record date fixed for the
determination of holders of shares of Class A Common
Stock entitled to receive such stock dividend, or whose
shares of Class A Common Stock are included as part of
such subdivision or split-up, shall be appropriately
increased so that the number of shares of Class A
Common Stock issuable for the Conversion Price on
conversion of Series A Preferred Stock shall be
increased in proportion to such increase in outstanding
shares of Class A Common Stock.
(iii) If, at any time or from time to time the
number of shares of Class A Common Stock outstanding is
decreased by a combination (whether by reverse stock
split or otherwise) of the outstanding shares of Class
A Common Stock, then the Conversion Factor in effect on
the record date fixed for such combination shall be
appropriately decreased so that the number of shares of
Class A Common Stock issuable for the Conversion Price
on conversion of Series A Preferred Stock shall be
decreased in proportion to such decrease in outstanding
shares of Class A Common Stock.
(iv) In case, at any time or from time to time, of
(A) any capital reorganization or reclassification of
the shares of the Corporation (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 stock
dividend or a subdivision, split-up, or combination of
shares), (B) a business combination or merger of the
Corporation with or into another person (other than a
business combination or merger in which the Corporation
is the continuing entity and which does not result in
-16-<PAGE>
any change in the Class A Common Stock), (C) a sale or
other disposition of all or substantially all the
assets of the Corporation as an entirety to any other
person, or (D) any other transaction (including without
limitation any dividend or distribution payable
otherwise than in cash out of earnings or earned
surplus (determined in accordance with generally
accepted accounting principles, consistently applied)
but excluding any such dividend or distribution so
payable out of earnings or earned surplus and excluding
any other transaction described in clauses (i), (ii),
or (iii) above, whether or not such transaction results
in an adjustment pursuant to the terms of any such
clause) that is effected in such a manner that holders
of Class A Common Stock are entitled to receive (either
directly or upon subsequent liquidation) stock,
securities, or assets with respect to or in exchange
for Class A Common Stock, THEN each share of Series A
Preferred Stock shall immediately upon the consummation
of such reorganization, reclassification, business
combination, merger, sale or other disposition, or
other described transaction be (x) convertible into the
kind and number of shares of stock or other securities
or property of the Corporation, or of the entity
resulting from such business combination or surviving
such merger or to which such assets shall have been
sold or otherwise disposed, or (y) entitled to receive
upon conversion thereof the stock, securities, or other
assets with respect to or in exchange for Class A
Common Stock, to which a holder of the number of shares
of Class A Common Stock deliverable upon conversion of
such share of Series A Preferred Stock (immediately
prior to the consummation of such event) would have
been entitled upon such consummation.
(v) No adjustment in the Conversion Factor shall
have any effect upon the Conversion Value of a share of
Series A Preferred Stock, although each such adjustment
shall affect (in the manner described in this
subparagraph (13)(g)(4)) the number of shares of Class
A Common Stock issuable in respect of any particular
amount of Conversion Value and thus shall affect the
effective Conversion Price as to a whole share of Class
A Common Stock.
(vi) All calculations under this subparagraph
(13)(g)(4) shall be made to the nearest one-tenth
(1/10) of a cent or to the nearest one-tenth (1/10) of
a share, as the case may be.
(vii) For the purpose of any computation
pursuant to this subparagraph (13)(g)(4) or elsewhere
under this Agreement, "Market Price" on any date of one
share of Class A Common Stock shall be deemed to be
the average of the daily closing prices of the Class A
Common Stock for the ten (10) consecutive trading days
ending on the trading day immediately preceding the day
in question (as adjusted for any stock dividend, split,
combination, or reclassification that took effect
during such 10-day period). The closing price for each
day shall be the last reported sales price, regular
way, or, in case no such reported sale took place on
such day, the average of the last reported bid and
-17-<PAGE>
asked prices, regular way, in either case as officially
reported by the principal national securities exchange
on which the Class A Common Stock may then be listed
for trading; or, if the Class A Common Stock is not
permitted to trade on any such exchange, then such
sales price or such bid and asked prices for the Class
A Common Stock as quoted in the NASDAQ Inter-Dealer
Quotation System or such other similar inter-dealer
quotation system being used generally by members of the
National Association of Securities Dealers, Inc., or
any similar successor organization, for over-the-
counter transactions in securities, as such quotations
are reported by National Quotation Bureau,
Incorporated, or any similar successor organization;
or, if trading in the Class A Common Stock is not then
quoted through any such system or covered by quotation
reports of such organization, then such sales price or
such bid and asked prices as furnished by any New York
Stock Exchange member firm selected from time to time
by the Corporation for such purpose.
(viii) Any adjustment made pursuant to clauses
(i), (ii), or (iii) above shall become effective on the
date immediately after the record date referenced
therein.
(ix) In any case in which the provisions of this
subparagraph (13)(g)(4) shall require that an
adjustment become effective immediately after a record
date for an event, the Corporation may defer until the
occurrence of such event (A) issuing to the holder of
any share of Series A Preferred Stock converted after
such record date and before the occurrence of such
event the additional shares of Class A Common Stock
issuable upon such conversion by reason of the
adjustment required by such event over and above the
shares of Class A Common Stock issuable upon such
conversion before giving effect to such adjustment and
(B) paying to such holder any amount in cash in lieu of
a fractional share or in respect of residual Conversion
Value; PROVIDED, HOWEVER, that the Corporation shall
deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive
such additional shares of Class A Common Stock, or such
cash, upon the occurrence of the event requiring such
adjustment.
(5) Whenever the Conversion Factor shall be adjusted
as provided in subparagraph (13)(g)(4), the Corporation shall
forthwith mail, first class and postage prepaid, to each Record
Holder of Series A Preferred Stock at its address appearing on
the Corporation's stock records for the Series A Preferred Stock,
a copy of a statement, certified by its chief financial officer,
showing the facts requiring such adjustment and the Conversion
Factor and effective Conversion Price per whole share of Class A
Common Stock that shall be in effect after such adjustment. Where
appropriate, such copy may be given in advance and may be
included as part of a notice required under subparagraph
(13)(g)(4).
(6) If the Corporation shall propose to (i) take any
action of the types described in clauses (i) or (iv) of
subparagraph (13)(g)(4), (ii) declare a dividend upon the Class A
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Common Stock payable otherwise than in cash out of earnings or
earned surplus (determined in accordance with generally accepted
accounting principles, consistently applied) except for a stock
dividend payable in shares of Class A Common Stock, or (iii)
grant, issue or sell any options, convertible securities or
rights to purchase stock (other than shares of Class A Common
Stock), warrants, securities or other property pro-rata to the
record holders of Class A Common Stock, the Corporation shall
give notice to each Record Holder of Series A Preferred Stock, in
the manner set forth in subparagraph (13)(g)(5), which notice
shall specify the record date, if any, with respect to any such
action and the date on which such action is to take place. Such
notice shall also set forth such facts with respect thereto as
shall be reasonably necessary to indicate the effect of such
action (to the extent such effect may be known at the date of
such notice) on the Conversion Factor and effective Conversion
Price per whole share of Class A Common Stock and on the number,
kind, or class of stock or other securities or property that
shall be deliverable or purchasable upon the occurrence of such
action or thereafter deliverable upon conversion of Series A
Preferred Stock. In the case of any action that would require the
fixing of a record date, such notice shall be given at least 20
days prior to the date so fixed, and in the case of all other
action, such notice shall be given at least 25 days prior to the
taking of such proposed action. Failure to give such notice, or
any defect therein, shall not affect the legality or validity of
any such action.
(7) For the purposes of this subparagraph (13)(g), the
amount of Class A Common Stock at any time outstanding shall not
include Class A Common Stock then owned or held by or for the
account of the Corporation.
(8) The Corporation shall at all times reserve, out of
its treasury or authorized but unissued Class A Common Stock, or
both, solely for the purpose of effecting the conversion of
Series A Preferred Stock, sufficient shares to provide for the
Conversion of all shares of Series A Preferred Stock outstanding
from time to time. All shares of Class A Common Stock that are so
issuable shall, when issued, be, and the Corporation shall take
all such actions as are necessary to insure that all such shares
of Class A Common Stock are, duly and validly issued, fully paid
and nonassessable, and free from all taxes, liens, and charges.
The Corporation shall take such actions as may be necessary to
assure that all such shares of Class A Common Stock may be so
issued without violation of any applicable law or governmental
regulation or any requirements of any domestic securities
exchange or inter-dealer quotation system upon which shares of
Class A Common Stock may be listed or qualified (except for
official notice of issuance, which shall be immediately delivered
by the Corporation upon each such issuance); provided, that the
Corporation shall not be required hereunder to register the
issuance of any such shares of stock under federal or state
securities laws. The Corporation shall take such actions as may
be necessary to assure that all such shares of Class A Common
Stock are listed or qualified on any domestic securities exchange
or inter-dealer quotation system on which shares of Class A
Common Stock are listed or qualified; provided, that the
Corporation shall not be required hereunder to register the
issuance of any such shares of stock under federal or state
securities laws.
(h) REACQUIRED SHARES OF SERIES A PREFERRED STOCK.
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(1) All or any shares of Series A Preferred Stock
acquired by the Corporation and not retired may be transferred by
the Corporation to any other person(s). However, for so long as
such shares are held by the Corporation, and until such shares
are transferred to another person, no dividends shall accrue with
respect to such shares.
(2) The amount of Series A Preferred Stock available
for issuance pursuant to this Subparagraph (13) at any time shall
be the difference between the authorized number of shares
designated in subparagraph (13)(a) and the number of such shares
issued and outstanding at such time, and no reduction shall be
made for any shares of Series A Preferred Stock acquired by the
Corporation (including through redemptions under subparagraph
(13)(e) and (f) or conversions into Class A Common Stock under
subparagraph (13)(g)), unless such reacquired shares have been
expressly retired and cancelled.
(3) The Board of Directors may, with respect to any
unissued shares of Series A Preferred Stock or any shares of
Series A Preferred Stock reacquired by the Corporation after
original issuance, act by resolution to retire such shares and
restore them to the status of authorized but unissued shares of
Preferred Stock, without designation as to series, and may
thereafter act to designate, constitute, and issue some or all
such shares as part of a new or other series of Preferred Stock
in accordance with applicable law, the provisions of any
additional or supplementary section to this Subparagraph (13),
and any other provisions of the Articles of Incorporation.
(i) RANKING. For purposes of this Subparagraph (13),
the shares of any class or classes or any series of stock of the
Corporation shall be deemed to rank:
(1) Senior to the Series A preferred Stock, either as
to dividends or upon liquidation, if the holders of such shares
shall be entitled to the receipt of dividends or of amounts
distributable upon dissolution, liquidation, or winding up of the
Corporation, as the case may be, in preference or priority to the
Record Holders of shares of Series A Preferred Stock;
(2) PARI PASSU with the Series A Preferred Stock,
either as to dividends or upon liquidation, whether or not the
dividend rates, dividend payment dates, or redemption or
liquidation prices per share be different from those of the
Series A Preferred Stock, if the holders of such shares shall be
entitled to the receipt of dividends or of amounts distributable
upon dissolution, liquidation, or winding up of the Corporation,
as the case may be, in proportion to their respective dividend
rates or liquidation prices, without preference or priority, one
over the other, as between the holders of such shares and the
Record Holders of shares of Series A Preferred Stock; and
(3) Junior to the Series A Preferred Stock, either as
to dividends or upon liquidation, if such class shall be Common
Stock or if the holders of shares of Series A Preferred Stock
shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation, or winding up of the
Corporation, as the case may be, in preference or priority to the
holders of such shares.
(j) CERTAIN GENERAL MATTERS.
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(1) Notwithstanding any other provision hereof, the
Corporation shall not be required to issue any certificate
representing shares of Class A Common Stock issuable upon
conversion of shares of Series A Preferred Stock, or representing
unconverted or unredeemed shares of Series A Preferred Stock
covered by a certificate surrendered in connection with any
conversion or redemption of other shares of Series A Preferred
Stock also covered by such Certificate, in the name of any person
other than the Record Holder of the subject shares of Series A
Preferred Stock on the Conversion Date or the redemption date, as
the case may be, unless such Record Holder shall demonstrate to
the Corporation's reasonable satisfaction that such issuance
complies with applicable federal and state securities laws
governing the registration (or exemption therefrom) of sales of
securities.
(2) Any action not permitted by this Subparagraph (13)
to be taken by the Corporation may nonetheless be taken by it (if
otherwise permitted by applicable law, the Articles of
Incorporation, and the bylaws of the Corporation) if the
Corporation obtains the affirmative vote or written consent of
the Record Holders of at least a majority of the outstanding
shares of Series A Preferred Stock.
(3) The Corporation shall have the right, in
connection with any issuance or transfer of a share of Series A
Preferred Stock, to establish by contract with the proposed
holder thereof any lawful restriction or limitation respecting
the transfer or other disposition of, or any exercise of rights
appurtenant to, such share with which such proposed holder shall
agree.
(4) The Corporation shall not close its books against
the transfer of shares of Series A Preferred Stock or of Class A
Common Stock issued or issuable upon conversion of Series A
Preferred Stock in any manner which interferes unduly with the
timely conversion of Series A Preferred Stock. The Corporation
shall assist and cooperate with any holder of shares of Series A
Preferred Stock required to make any governmental filings or
obtain any governmental approval prior to or in connection with
any conversion of Series A Preferred Stock hereunder (including,
without limitation, making any filings required to be made by the
Corporation); provided, that the Corporation shall not be
required hereunder to register the issuance of any such shares of
stock under federal or state securities laws.
(5) NOTICES. Unless otherwise provided in an agreement
between the Corporation and a holder of Series A Preferred Stock,
all notices, demands, or other communications to be given or
delivered by reason of this Subparagraph (13) shall be in writing
and shall be deemed to have been given (i) on the date delivered
in person, (ii) on the date indicated on the return receipt if
mailed postage prepaid, by certified or registered U.S. Mail,
with return receipt requested, (iii) on the date transmitted by
telex or facsimile, if sent by 5:00 P.M., Eastern Time, and
confirmation of receipt thereof is reflected or obtained, or (iv)
IF sent by Federal Express or other nationally recognized
overnight courier service or overnight express U.S. Mail, with
service charges or postage prepaid, THEN on the next business day
after delivery to the courier service or U.S. Mail (in time for
and specifying next day delivery). In each case (except for
personal delivery) such notices, demands, and other
communications shall be sent to a holder of Series A Preferred
-21-<PAGE>
Stock at the address or telex or facsimile number for such holder
on the Company's stock records and to the Corporation at its
principal executive offices, as may be announced from time to
time, Attention: Secretary.
D. The Board of Directors may from time to time distribute
to shareholders out of capital surplus of the Corporation a
portion of its assets, in cash or in property.
VI.
None of the holders of any capital stock of the Corporation
of any kind, class or series now or hereafter authorized shall
have preemptive rights with respect to any shares of capital
stock of the Corporation of any kind, class or series now or
hereafter authorized.
VII.
No director of the Company [Corporation] shall be personally
liable to the Company [Corporation] or its shareholders for
monetary damages for breach of his duty of care or other duty as
a director; provided, that this provision shall eliminate or
limit the liability of a director only to the extent permitted
from time to time by the Georgia Business Corporation Code or any
successor laws or laws.
VIII.
SECTION 1. DESIGNATION AND NUMBER OF SHARES. The
shares of such series shall be designated as "Series B
Participating Cumulative Preferred Stock" (the "SERIES B
PREFERRED STOCK"), and the number of shares constituting such
series shall be 1,000,000 The par value of each share of Series
B Preferred Stock shall be $1.00. If more than a total of
1,000,000 shares of Series B Preferred Stock shall be issuable
upon the exercise of rights (the "RIGHTS") issued pursuant to the
Rights Agreement dated as of March 16, 1998, between the
Corporation and Wachovia Bank, N.A., as rights agent (as such
agreement may be amended from time to time, the "RIGHTS
AGREEMENT"), the Board of Directors of the Corporation, pursuant
to Section 14-2-602 of the Georgia Business Corporation Code, as
amended, and in accordance with the provisions of the Articles of
Incorporation, shall adopt a resolution or resolutions increasing
the previously determined total number of shares of Series B
Preferred Stock authorized to be issued (to the extent that the
Articles of Incorporation then permit) to the largest number of
whole shares (rounded to the nearest whole number) issuable upon
exercise of the Rights and directing that a statement of Articles
of Amendment with respect to such increase in authorized shares
of the Series B Preferred Stock be executed and filed with the
Secretary of State of the State of Georgia. The number of shares
of the Series B Preferred Stock may be increased or decreased by
resolution of the Board of Directors; PROVIDED, HOWEVER, that no
decrease shall reduce the number of shares of Series B Preferred
Stock to a number less than the number of shares then outstanding
plus the number of shares issuable upon exercise of the
outstanding Rights.
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SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(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 B Preferred Stock with
respect to dividends, if any, the holders of shares of Series B
Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable on the last day of
March, June, September and December of 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 any share or fraction of a share of Series B
Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 and (b) subject to the
provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount (payable in kind) of all cash
dividends or other distributions and 100 times the aggregate per
share amount of all non-cash dividends or other distributions
(other than (i) a dividend payable in shares of Common Stock (as
defined below) of the Corporation or (ii) a subdivision of the
outstanding shares of Common Stock (by reclassification or
otherwise)) , declared on 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 B
Preferred Stock. The multiple of such cash and non-cash
dividends and distributions on the Common Stock applicable to the
determination of the dividends to be paid on the Series B
Preferred Stock, which shall initially be 100, but which shall be
adjusted from time to time as provided herein, is referred to
herein as the "DIVIDEND MULTIPLE." If the Corporation shall at
any time after March 16, 1998 (the "RIGHTS DECLARATION DATE"),
declare or pay any dividend or make any distribution on Common
Stock payable in shares of Common Stock or effect a subdivision
or split or combination, consolidation or reverse stock split of
the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common
Stock, then in each such case the Dividend Multiple thereafter
applicable to the determination of the amount which holders of
shares of Series B Preferred Stock shall be entitled to receive
shall be the Dividend Multiple applicable immediately prior to
such event multiplied by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event. For purposes hereof, "COMMON STOCK" means the
Corporation's Class A Common Stock, par value $0.10 per share,
and Class B Common Stock, par value $0.10 per share.
(B) The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in
SECTION 2(A) immediately after it declares a dividend or
distribution on the Common Stock (other than as described in
clauses (i) and (ii) of the first sentence of SECTION 2(A));
PROVIDED, HOWEVER, that if 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 (or, with respect to the first Quarterly
Dividend Payment Date, the period between the first issuance of
any share or fraction of a share of Series B Preferred Stock and
such first Quarterly Dividend Payment Date), a dividend of $1.00
per share on the Series B Preferred Stock shall nevertheless be
-23-<PAGE>
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series B Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue
of such shares of Series B Preferred Stock, unless the date of
issue of such shares is on or before the record date for the
first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue and be cumulative from the date
of issue of such shares, or unless the date of issue is a date
after the record date for the determination of holders of shares
of Series B Preferred Stock entitled to receive a quarterly
dividend and on or before such Quarterly Dividend Payment Date,
in which case 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 shares of
Series B 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 B Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date
shall not be more than 60 days prior to the date fixed for the
payment thereof.
SECTION 3. VOTING RIGHTS. In addition to any other
voting rights required by law, the holders of shares of Series B
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series B Preferred Stock
shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of shareholders of the Corporation. The
number of votes which a holder of a share of Series B Preferred
Stock is entitled to cast, as the same may be adjusted from time
to time, is hereinafter referred to as the "VOTE MULTIPLE." If
the Corporation shall at any time after the Rights Declaration
Date declare or pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or split or
combination, consolidation of reverse stock split of the
outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common
Stock, then in each such case, the Vote Multiple thereafter
applicable to the determination of the number of votes per share
to which holders of shares of Series B Preferred Stock shall be
entitled after such event shall be the Vote Multiple applicable
immediately prior to such event multiplied by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series B Preferred Stock and the holders of
shares of Common Stock shall vote together as a single class on
all matters submitted to a vote of shareholders of the
Corporation; PROVIDED, HOWEVER, that, except as set forth in
SECTION 3(C), the holders of shares of Series B Preferred Stock
shall vote with the holders of the Class A Common Stock in the
election of directors.
(C) (i) If at any time dividends on any Series B
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Preferred Stock shall be in arrears in an amount equal to six
quarterly dividends thereon (whether or not consecutive), the
occurrence of such contingency shall mark the beginning of a
period (herein called a "DEFAULT PERIOD") which shall extend
until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current quarterly
dividend period on all shares of Series B Preferred Stock then
outstanding shall have been declared and paid or set apart for
payment. During each default period, all holders of Series B
Preferred Stock and any other series of Preferred Stock then
entitled as a class to elect directors, voting together as a
single class, irrespective of series, shall have the right to
elect one Director.
(ii) During any default period, such voting right of
the holders of Series B Preferred Stock may be exercised
initially at a special meeting called pursuant to SECTION
3(C)(iii) or at any annual meeting of shareholders, and
thereafter at annual meetings of shareholders; PROVIDED, HOWEVER,
that neither such voting right nor the right of the holders of
any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be
exercised unless the holders of 10% in number of shares of
Preferred Stock outstanding shall be present in person or by
proxy. The absence of a quorum of holders of Common Stock shall
not affect the exercise by holders of Preferred Stock of such
voting right. At any meeting at which holders of Preferred Stock
shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to
elect Directors to fill such vacancy, if any, in the Board of
Directors as may then exist up to one Director or, if such right
is exercised at an annual meeting, to elect one Director. If the
number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock
shall have the right to make such increase in the number of
Directors as shall be necessary to permit the election by them of
the required number. After the holders of the Preferred Stock
shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the
number of Directors shall not be increased or decreased except by
vote of the holders of Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior to
or PARI PASSU with the Series B Preferred Stock.
(iii) Notwithstanding anything to the contrary
contained in the Corporation's Articles of Incorporation or
Bylaws, unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any
shareholder(s) owning in the aggregate not less than ten percent
(10%) of the total number of shares of Preferred Stock
outstanding, irrespective of series, may request, the calling of
a special meeting of holders of Preferred Stock, which meeting
shall thereupon be called by the President, a Vice President or
the Secretary of the Corporation. Notice of such meeting and of
any annual meeting at which holders of Preferred Stock are
entitled to vote pursuant to this SECTION 3(C)(iii) shall be
given to each holder of record of Preferred Stock by mailing a
copy of such notice to him at his last address as the same
appears on the books of the Corporation. Such meeting shall be
called for a time not earlier than 10 days and not later than 60
days after such order or request or in default of the calling of
such meeting within 60 days after such order or request. Such
-25-<PAGE>
meeting may be called on similar notice by any shareholder(s)
owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding,
irrespective of series. Notwithstanding the provisions of this
SECTION 3(C)(iii), no such special meeting shall be called during
the period within 60 days immediately preceding the date fixed
for the next annual meeting of shareholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of Directors until the holders of Preferred Stock shall
have exercised their right to elect one Director voting as a
class, after the exercise of which right (x) the Director so
elected by the holders of Preferred Stock shall continue in
office until his or her successor shall have been elected by such
holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in
SECTION 3(C)(ii)) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the
class of stock which elected the Director whose office shall have
become vacant. References in this SECTION 3(C) to Directors
elected by the holders of a particular class of stock shall
include Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock, voting
as a separate class, to elect Directors shall cease, (y) the term
of any Director elected by the holders of Preferred Stock, voting
as a separate class, shall terminate, and (z) the number of
Directors shall be such number as may be provided for in the
Articles of Incorporation or Bylaws irrespective of any increase
made pursuant to the provisions of SECTION 3(C)(ii) (such number
being subject, however, to change thereafter in any manner
provided by law or in the Articles of Incorporation or Bylaws).
Any vacancies in the Board of Directors effected by the
provisions of clauses (y) and (z) in the preceding sentence may
be filled in any manner provided for in the Articles of
Incorporation or Bylaws.
(D) Except as otherwise provided herein, holders of
Series B 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 the Series B Preferred Stock as provided
in SECTION 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on
outstanding shares of Series B Preferred Stock shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series B Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity
-26-<PAGE>
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, except
dividends paid ratably on the Series B Preferred Stock and
all such other 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, purchase or otherwise acquire for
value any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series B Preferred Stock; PROVIDED, HOWEVER, that the
Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for
shares of stock of the Corporation ranking junior (as to
dividends and upon dissolution, liquidation or winding up)
to the Series B Preferred Stock; or
(iv) redeem, purchase or otherwise acquire for value
any shares of Series B Preferred Stock, or any shares of
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B
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 Series B Preferred
Stock and all such other parity stock 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
(as defined below) of the Corporation to purchase or otherwise
acquire for value any shares of stock of the Corporation unless
the Corporation could, under SECTION 4(A), purchase or otherwise
acquire such shares at such time and in such manner.
(C) A "SUBSIDIARY" of Corporation shall mean any
corporation or other entity of which securities or other
ownership interests entitled to cast as least a majority of the
votes that would be entitled to be cast in an election of the
Board of Directors of such corporation or other entity or other
persons performing similar functions are beneficially owned,
directly or indirectly, by the Corporation or by any corporation
or other entity that is otherwise controlled by the Corporation.
(D) The Corporation shall not issue any shares of
Series B Preferred Stock except upon exercise of Rights issued
pursuant to the Rights Agreement.
SECTION 5. REACQUIRED SHARES. Any shares of Series B
Preferred Stock redeemed, purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued
shares of Preferred Stock without designation as to series 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 as
permitted by the Articles of Incorporation or as otherwise
permitted under Georgia law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP
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(A) Upon any liquidation, dissolution or winding up of
the Corporation, no distribution shall be made:
(i) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Preferred Stock unless, prior
thereto, the holders of shares of Series B Preferred Stock
shall have received $1.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment;
PROVIDED, HOWEVER, that the holders of shares of Series B
Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate
amount to be distributed per share to holders of Common
Stock, or
(ii) to the holders of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, except
distributions made ratably on the Series B Preferred Stock
and all such other parity stock in proportion to the total
amounts to which the holders of all such shares are entitled
upon such liquidation, dissolution or winding up. The
amount to which holders of Series B Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the
Corporation pursuant to the proviso to clause (i) above is
hereinafter referred to as the "PARTICIPATING LIQUIDATION
AMOUNT," and the multiple of the amount to be distributed to
holders of Common Stock upon the liquidation, dissolution or
winding up of the Corporation applicable pursuant to said
proviso, as such multiple may be adjusted from time to time
as hereinafter provided, is hereinafter referred to as the
"LIQUIDATION MULTIPLE." If the Corporation shall at any
time after the Rights Declaration Date pay any dividend on
Common Stock payable in shares of Common Stock or effect a
subdivision or split or combination, consolidation or
reverse stock split of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such
case the Liquidation Multiple thereafter applicable to the
determination of the amount to which holders of shares of
Series B Preferred Stock shall be entitled to receive after
such event shall be the Liquidation Multiple immediately
prior to such event multiplied by a fraction the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) For purposes of this SECTION 6, none of the
following events shall be deemed to be a voluntary or involuntary
liquidation, dissolution or winding up of the Corporation: (i)
the voluntary sale, conveyance, lease, exchange or transfer (for
cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the
Corporation; (ii) the combination, consolidation or merger of the
Corporation with or into one or more other corporations or other
associations; (iii) the consolidation or merger of one or more
corporations or other associations with or into the Corporation;
or (iv) participation by the Corporation in a share exchange.
SECTION 7. CERTAIN RECLASSIFICATION AND OTHER EVENTS
-28-<PAGE>
(A) If, after the Rights Declaration Date, holders of
shares of Common Stock receive in respect of their shares of
Common Stock any share of capital stock of the Corporation (other
than any share of Common Stock of the Corporation), whether by
way of reclassification, recapitalization, reorganization,
dividend or other distribution or otherwise (a "TRANSACTION"),
then, and in each such event, the dividend rights, voting rights
and rights upon the liquidation, dissolution or winding up of the
Corporation of the shares of Series B Preferred Stock shall be
adjusted so that after such event the holders of Series B
Preferred Stock shall be entitled, in respect of each share of
Series B Preferred Stock held, in addition to such rights in
respect thereof to which such holder was entitled immediately
prior to such adjustment, to
(i) such additional dividends as equal the Dividend
Multiple in effect immediately prior to such Transaction
multiplied by the additional dividends which the holder of a
share of Common Stock shall be entitled to receive by virtue
of the receipt in the Transaction of such capital stock,
(ii) such additional voting rights as equal the Vote
Multiple in effect immediately prior to such Transaction
multiplied by the additional voting rights to which the
holder of a share of Common Stock shall be entitled by
virtue of the receipt in the Transaction of such capital
stock, and
(iii) such additional distributions upon
liquidation, dissolution or winding up of the Corporation as
equal the Liquidation Multiple in effect immediately prior
to such Transaction multiplied by the additional amount
which the holder of a share of Common Stock shall be
entitled to receive upon liquidation, dissolution or winding
up of the Corporation by virtue of the receipt in the
Transaction of such capital stock, as the case may be, all
as provided by the terms of such capital stock.
(B) If, after the Rights Declaration Date, holders of
shares of Common Stock receive in respect of their shares of
Common Stock any right or warrant to purchase Common Stock
(including as such a right, for all purposes of this SECTION
7(B), any security convertible into or exchangeable for Common
Stock at a purchase price per share less than the Fair Market
Value (as defined below) of a share of Common Stock on the date
of issuance of such right or warrant, then, and in each such
event, the dividend rights, voting rights and rights upon the
liquidation dissolution or winding up of the Corporation of the
shares of Series B Preferred Stock shall each be adjusted so that
after such event the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple shall each be the product of the Dividend
Multiple, the Vote Multiple and the Liquidation Multiple, as the
case may be, in effect immediately prior to such event multiplied
by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such
issuance of rights or warrants plus the maximum number of shares
of Common Stock which could be acquired upon exercise in full of
all such rights or warrants and the denominator of which shall be
the number of shares of Common Stock outstanding immediately
before such issuance of rights or warrants plus the number of
shares of Common Stock which could be purchased, at the Fair
Market Value of the Common Stock at the time of such issuance, by
the maximum aggregate consideration payable upon exercise in full
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of all such rights or warrants.
(C) If, after the Rights Declaration Date, holders of
shares of Common Stock receive in respect of their shares of
Common Stock any right or warrant to purchase capital stock
(other than shares of Common Stock), including as such a right,
for all purposes of this SECTION 7(C), any security convertible
into or exchangeable for capital stock of the Company (other than
Common Stock), at a purchase price per share less than the Fair
Market Value of a share of such capital stock on the date of
issuance of such rights or warrant, then, and in each such event,
the dividend rights, voting rights and rights upon the
liquidation, dissolution or winding up of the Corporation of the
shares of Series B Preferred Stock shall each be adjusted so that
after such event holders of Series B Preferred Stock shall be
entitled, in respect of each share of Series B Preferred Stock
held, in addition to such rights in respect thereof to which such
holder was entitled immediately prior to such event, to receive
(i) such additional dividends as equal the Dividend Multiple in
effect immediately prior to such event multiplied, first, by the
additional dividends to which the holder of a share of Common
Stock shall be entitled upon exercise of such right or warrant by
virtue of the capital stock which could be acquired upon such
exercise, and multiplied again by the Discount Fraction (as
defined below), (ii) such additional voting rights as equal the
Vote Multiple in effect immediately prior to such event
multiplied, first, by the additional voting rights to which the
holder of a share of Common Stock shall be entitled upon exercise
of such right or warrant by virtue of the capital stock which
could be acquired upon such exercise, and multiplied again by the
Discount Fraction, and (iii) such additional distributions upon
liquidation, dissolution or winding up of the Corporation as
equal the Liquidation Multiple in effect immediately prior to
such event multiplied, first, by the additional amount which the
holder of a share of Common Stock shall be entitled to receive
upon liquidation, dissolution or winding up of the Corporation
upon exercise of such right or warrant by virtue of the capital
stock which could be acquired upon such exercise, and multiplied
again by the Discount Fraction. For purposes of this SECTION
7(C), the "DISCOUNT FRACTION" shall be a fraction the numerator
of which shall be the difference between (x) the Fair Market
Value of a share of the capital stock subject to a right or
warrant distributed to holders of shares of Common Stock of the
Corporation as contemplated by this SECTION 7(C) immediately
after the distribution thereof and (y) the purchase price per
share for such share of capital stock pursuant to such right or
warrant, and the denominator of which shall be the Fair Market
Value of a share of such capital stock immediately after the
distribution of such right or warrant.
(D) For purposes of this SECTION 7, the "FAIR MARKET
VALUE" of a share of capital stock of the Corporation (including
a share of Common Stock) on any date shall be deemed to be the
average of the daily closing price per share thereof over the 30
consecutive Trading Days (as defined below) immediately prior to
such date; PROVIDED, HOWEVER, that in the event that such Fair
Market Value of any such share of capital stock is determined
during a period which includes any date that is within 30 Trading
Days after (i) the ex-dividend date for a dividend or
distribution on stock payable in shares of such stock or
securities convertible into shares of such stock, or (ii) the
effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such
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stock, then, and in each such case, the Fair Market Value shall
be appropriately adjusted by the Board of Directors of the
Corporation to take into account ex-dividend or post-effective
date trading. The closing price for any day shall be the last
sale price, regular way, or in case no such sale takes place on
such day, the average of the closing bid and asked prices,
regular way (in either case, as reported in the applicable
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange, or, if the
shares are not listed or admitted to trading on the New York
Stock Exchange, as reported in the applicable transaction
reporting system with respect to securities listed on the
principal national securities exchange on which the shares are
listed or admitted to trading or, if the shares are not listed or
admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported
by The Nasdaq Stock Market or such other system then in use, or
if on any such date the shares are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
shares selected by the Board of Directors of the Corporation.
The term "TRADING DAY" shall mean a day on which the principal
national securities exchange on which the shares are listed or
admitted to trading is open for the transaction of business or,
if the shares are not listed or admitted to trading on any
national securities exchange, on which the New York Stock
Exchange or such other national securities exchange as may be
selected by the Board of Directors of the Corporation is open.
If the shares are not publicly held or not so listed or traded on
any day within the period of 30 Trading Days applicable to the
determination of Fair Market Value, "FAIR MARKET VALUE" shall
mean the fair market value thereof per share as determined in
good faith by the Board of Directors of the Corporation. In
either case referred to in the foregoing sentence, the
determination of Fair Market Value shall be described in a
statement filed with the Secretary of the Corporation.
SECTION 8. CONSOLIDATION OR MERGER. If 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 or any other property, then in any such case the
shares of Series B Preferred Stock shall at the same time be
similarly exchanged for or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount of stock, securities,
cash or any other property, as the case may be, into which or for
which each share of Common Stock is exchanged or changed. If the
Corporation shall at any time after the Rights Declaration Date
pay any dividend on Common Stock payable in shares of Common
Stock or effect a subdivision or split or combination,
consolidation or reverse stock split of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case
the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series B 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.
-31-<PAGE>
SECTION 9. EFFECTIVE TIME OF ADJUSTMENTS.
(A) Adjustments to the Series B Preferred Stock required by
the provisions hereof shall be effective as of the time at which
the event requiring such adjustments occur.
(B) The Corporation shall give prompt written notice to
each holder of a share of outstanding Series B Preferred Stock of
the effect of any adjustment to the voting rights, dividend
rights or rights upon liquidation, dissolution or winding up of
the Corporation of such shares required by the provisions hereof.
Notwithstanding the foregoing sentence, the failure of the
Corporation to give such notice shall not affect the validity of
or the force or effect of or the requirement for such adjustment.
SECTION 10. NO REDEMPTION. The Series B Preferred
Stock shall not be redeemable.
SECTION 11. RANK. The Series B Preferred Stock shall
rank junior (as to dividends and upon liquidation, dissolution
and winding up) to all other series of the Corporation's
preferred stock, except any series that specifically provides
that such series shall rank junior to the Series B Preferred
Stock.
SECTION 12. FRACTIONAL SHARES. Series B 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 B Preferred Stock.
SECTION 13. AMENDMENT. The Articles of Incorporation
of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or
special rights of the Series B Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of a
majority or more of the outstanding shares of Series B Preferred
Stock, voting separately as a class.
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CONTACT: Daniel T. Hendrix
Chief Financial Officer
770-437-6800
Morgen-Walke Associates
June Filingeri/John Blackwell
Media Contact: Stan Froelich
212-850-5600
INTERFACE, INC. ADOPTS SHAREHOLDER RIGHTS PLAN
ATLANTA, Georgia, March 4, 1998 Interface, Inc. (Nasdaq: IFSIA),
announced today that it adopted a Shareholder Rights Plan and has
declared a dividend of one right for each outstanding share of
Interface common stock, payable to shareholders of record as of
the close of business on March 16, 1998. The plan is intended to
protect Interface and its shareholders against unfair or coercive
takeover tactics and offers which may not provide adequate value
to the shareholders. The plan was not adopted in response to an
effort to acquire control of Interface and is similar to
shareholder protective plans adopted by many other companies.
The rights will trade automatically with the common stock and
will not be exercisable until the tenth day after it is announced
that a person or group (an "Acquiring Person") has acquired 15%
or more of Interface's common stock, or the tenth business day
after the commencement of a tender or exchange offer that will
result in such person or group owning 15% or more of Interface's
common stock. Thereafter, separate rights certificates will be
distributed, and each right will entitle its holder to purchase
participating cumulative preferred stock having economic and voting
terms similar to one share of Interface's common stock.
Upon announcement that any person or group has become an
Acquiring Person, each right will entitle all other shareholders
to purchase, for the exercise price of $180, preferred stock
having a market value of $360. These shareholders would also be
entitled to purchase $360 worth of shares of the Acquiring
Person's common stock for $180 if the Acquiring Person were to
cause Interface to enter into certain mergers or other
transactions. If any person or group acquires 15% or more of
Interface's common stock, the Interface board of directors may,
at its option, exchange one share of Interface's common stock for
each right. The rights should not interfere with a transaction
that the board of directors determines is in the best interests
of Interface and its shareholders, because the Board may elect to
approve the acquisition in advance and the rights may be redeemed
by the board for $0.01 per right at any time prior to the close
of business on the tenth day after the public announcement that a
person or group has become an Acquiring Person.
The rights agreement does not in any way weaken Interface's
financial strength or interfere with its business plans. The
issuance of the rights has no dilutive effect, will not affect
reported earnings per share, is not taxable to Interface or its
shareholders, and will not change the way in which Interface
shares are traded. A letter to shareholders regarding the rights
agreement and a summary of certain terms of the agreement will be
mailed to Interface shareholders of record as of the close of
business on March 16, 1998.
Interface, Inc. is a recognized leader in the worldwide
commercial interiors market, offering floorcoverings, fabrics,
specialty chemicals, and interior architectural products. The
Company is the world's largest manufacturer of modular carpet
under the Interface, Heuga and Bentley brands and, through its
Bentley Mills, Prince Street and Firth subsidiaries, enjoys a
leading position in the high quality, designer-oriented segment
of the broadloom and woven carpet market. The Company now
provides specialized carpet replacement services through
Renovisions and installation and maintenance services through
Re:Source Americas. The Company is also a leading producer of
interior fabrics and upholstery products, which it markets under
the Guilford of Maine, Stevens Linen, Toltec, Camborne, and Intek
brands. In addition, the Company provides chemicals used in
various rubber and plastic products; offers Intersept , a
proprietary antimicrobial used in a variety of interior finishes;
sponsors the Envirosense Consortium in its mission to address
workplace environmental issues; and produces raised/access
flooring systems under the C-Tec, Intercell and Interstitial
Systems brands.
