<PAGE>
7/21/00
RESTATED
AMENDED ARTICLES OF INCORPORATION
OF
BROADWING INC.
FIRST: The name of the corporation is BROADWING INC.
SECOND: The place in Ohio where its principal office is located is
Cincinnati, Hamilton County.
THIRD: The purpose for which the corporation is formed is to engage in
any lawful act or activity for which corporations may be formed under Sections
1701.01 to 1701.98, inclusive, of the Ohio Revised Code.
FOURTH: The number of shares that the corporation is authorized to have
outstanding is 480,000,000 common shares, $.01 par value (classified as "Common
Shares"), 1,357,299 voting preferred shares without par value (classified as
"Voting Preferred Shares") and 1,000,000 non-voting preferred shares without par
value (classified as "Non-Voting Preferred Shares"). The preferred shares of
both classes are collectively referred to herein as "Preferred Shares." The
express terms of the shares of each of such classes are as follows:
1. Preferred Shares may be issued from time to time in one or
more series. All Preferred Shares of all series shall rank
equally and be identical in all respects except that only
Voting Preferred Shares shall be voting shares and except that
the board of directors is authorized to adopt amendments to
the Amended Articles in respect of any unissued or treasury
Preferred Shares and thereby to fix or change, to the full
extent now or hereafter permitted by the laws of Ohio, the
division of such shares into series and the designation and
authorized number of shares of each series and, subject to the
provisions of this Article Fourth, the relative rights,
preferences and limitations of each series and the variations
in such rights, preferences and limitations as between series
and specifically is authorized to fix or change with respect
to each series:
(a) the dividend rate on the shares of such series, the
dates of payment of such dividends, and the date or
dates from which such dividends shall be cumulative;
(b) the times when, the prices at which, and all other
terms and conditions upon which, shares of such
series shall be redeemable;
(c) the amounts which the holders of shares of such
series shall be entitled to receive upon the
liquidation, dissolution or winding up of the
corporation, which amounts may vary depending on
whether such liquidation, dissolution or winding up
is voluntary or involuntary and, if voluntary, may
vary at different dates;
<PAGE>
(d) whether or not the shares of such series shall be
subject to the operation of a purchase, retirement or
sinking fund and, if so, the extent to and manner in
which such purchase, retirement or sinking fund shall
be applied to the purchase or redemption of the
shares of such series for retirement or for other
corporate purposes and the terms and provisions
relative to the operation of such fund or funds;
(e) whether or not the shares of such series shall be
convertible into or exchangeable for shares of any
other class or series and, if so, the price or prices
or the rate or rates of conversion or exchange and
the method, if any, of adjusting the same;
(f) the restrictions, if any, upon the payment of
dividends or making of other distributions on, and
upon the purchase or other acquisition of, Common
Shares;
(g) the restrictions, if any, upon the creation of
indebtedness, and the restrictions, if any, upon the
issue of shares of such series or of any additional
shares ranking on a parity with or prior to the
shares of such series in addition to the restrictions
provided for in this Article Fourth; and
(h) such other rights, preferences and limitations as
shall not be inconsistent with this Article Fourth.
All shares of any particular series shall rank equally and be
identical in all respects except that shares of any one series
issued at different times may differ as to the date from which
dividends shall be cumulative.
2. Dividends on Preferred Shares of each series shall be
cumulative from the date or dates fixed with respect to such
series and shall be paid or declared or set apart for payment
for all past dividend periods and for the current dividend
period before any dividends (other than dividends payable in
Common Shares) shall be declared or paid or set apart for
payment on Common Shares. Whenever, at any time, full
cumulative dividends for all past dividend periods and for the
current dividend period shall have been paid or declared and
set apart for payment on all then outstanding Preferred Shares
and all requirements with respect to any purchase, retirement
or sinking fund or funds for all series of Preferred Shares
shall have been complied with, the board of directors may
declare dividends on Common Shares, and Preferred Shares shall
not be entitled to share therein.
3. Upon any liquidation, dissolution or winding up of the
corporation, the holders of Preferred Shares of each series
shall be entitled to receive the amounts to which such holders
are entitled as fixed with respect to such series, including
all dividends accumulated to the date of final distribution,
before any payment or distribution of assets of the
corporation shall be made to or set apart for the holders of
Common Shares, and after such payments shall have been made in
full to the holders of Preferred Shares, the holders of Common
Shares shall be entitled
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<PAGE>
to receive any and all assets remaining to be paid or
distributed to shareholders, and the holders of Preferred
Shares shall not be entitled to share therein. For the
purposes of this paragraph, the voluntary sale, conveyance,
lease, exchange or transfer of all or substantially all the
property or assets of the corporation or a consolidation or
merger of the corporation with one or more other corporations
(whether or not the corporation is the corporation surviving
such consolidation or merger) shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or
involuntary.
4. Each outstanding Common Share and each outstanding Voting
Preferred Share shall entitle the holder thereof to one vote
on each matter properly submitted to the shareholders for
their vote, consent, waiver, release or other action, subject
to the provisions of law from time to time in effect with
respect to cumulative voting. Except as otherwise required by
law or by this Article Fourth, Non-Voting Preferred Shares
shall not entitle the holders thereof to vote, consent, waive,
release or otherwise act on any question or in any proceeding
or to be represented at or receive notice of any meeting of
shareholders.
5. So long as any Preferred Shares are outstanding, the
corporation will not (a) without the affirmative vote or
consent of the holders of at least two-thirds of all Preferred
Shares at the time outstanding, (1) authorize shares ranking
prior to Preferred Shares or (2) change any provision of this
Article Fourth so as to affect adversely Preferred Shares; (b)
without the affirmative vote or consent of the holders of at
least two-thirds of any series of Preferred Shares at the time
outstanding, change any of the provisions of such series so as
to affect adversely the shares of such series; or (c) without
the affirmative vote or consent of the holders of at least a
majority of all Preferred Shares at the time outstanding, (1)
increase the authorized number of Preferred Shares or (2)
authorize shares of any other class ranking on a parity with
Preferred Shares.
6. Whenever, at any time or times, dividends payable on Preferred
Shares shall be in default in an aggregate amount equivalent
to six full quarterly dividends on any series of Preferred
Shares at the time outstanding, the number of directors then
constituting the board of directors of the corporation shall
ipso facto be increased by two, and the outstanding Preferred
Shares shall, in addition to any other voting rights, have the
exclusive right, voting separately as a class and without
regard to series, to elect two directors of the corporation to
fill such newly created directorships, and such right shall
continue until such time as all dividends accumulated on all
Preferred Shares to the latest dividend payment date shall
have been paid or declared and set apart for payment.
7. If the amounts payable with respect to any requirement to
retire Preferred Shares are not paid in full with respect to
all series as to which such requirement exists, the number of
shares to be retired in each series shall be in proportion to
the amounts which would be payable on account of such
requirement if all amounts payable were paid in full.
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<PAGE>
8. No holder of shares of any class shall have any preemptive
rights.
9. Of the 1,357,299 Voting Preferred Shares of the corporation,
400,000 shall constitute a series of Voting Preferred Shares
designated as Series A Preferred Shares (the "Series A
Preferred Shares") and have, subject and in addition to the
other provisions of this Article Fourth, the following
relative rights, preferences and limitations:
(1) DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the provisions of this Article
Fourth, the holders of the Series A
Preferred Shares shall be entitled to
receive, when and as declared by the Board
of Directors, out of funds legally available
for that purpose, cumulative dividends in
cash on the 1st day of January, April, July
and October in each year (each such date
being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after
the first issuance of a Series A Preferred
Share or fraction thereof, in an amount per
share per quarter (rounded to the nearest
cent) equal to the greater of (i) $20.00 or
(ii) subject to the provision for adjustment
hereinafter set forth, 1,000 times the
aggregate per share amount of all cash
dividends, and 1,000 times the aggregate per
share amount (payable in kind) of all
non-cash dividends or other distributions
(other than a dividend payable in Common
Shares or a subdivision of the outstanding
Common Shares, by reclassification or
otherwise), declared on the Common Shares,
since the immediately preceding Quarterly
Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date,
since the first issuance of a Series A
Preferred Share or fraction thereof;
provided that, in the event no dividend or
distribution shall have been declared on the
Common Shares during the period between any
Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date,
a dividend on the Series A Preferred Shares
of $20.00 per share shall nevertheless be
payable on such subsequent Quarterly
Dividend Payment Date.
In the event the corporation shall at any
time declare or pay any dividend on the
Common Shares payable in Common Shares, or
effect a subdivision or combination of the
outstanding Common Shares (by
reclassification or otherwise) into a
greater or lesser number of Common Shares,
then in each such case the amount to which
holders of the Series A Preferred Shares
were entitled immediately prior to such
event under clause (ii) of the next
preceding sentence shall be adjusted by
multiplying such amount by a fraction, the
numerator of which is the number of Common
Shares outstanding immediately after such
event and the
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<PAGE>
denominator of which is the number of Common
Shares that were outstanding immediately
prior to such event.
(B) The Board of Directors may fix a record date
for the determination of holders of the
Series A Preferred Shares entitled to
receive payment of a dividend or
distribution declared thereon, which record
date shall be no more than 60 days prior to
the date fixed for the payment thereof.
Dividends shall begin to accrue and be
cumulative on outstanding Series A Preferred
Shares from the Quarterly Dividend Payment
Date next preceding the date of issue of
such Series A Preferred Shares, unless the
date of issue of such shares is prior to the
record date for the first Quarterly Dividend
Payment Date, in which case dividends on
such shares shall begin to accrue from the
date of issue of such shares, or unless the
date of issue is a Quarterly Dividend
Payment Date or is a date after the record
date for the determination of holders of the
Series A Preferred Shares entitled to
receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either
of which events such dividends shall begin
to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest.
Dividends paid on the Series A Preferred
Shares 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.
(2) LIQUIDATION RIGHTS. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of
the corporation, then, subject to the provisions of
this Article Fourth, the holders of the Series A
Preferred Shares shall be entitled to receive, from
the assets of the corporation available for
distribution to shareholders, an amount equal to all
dividends accumulated to the date of final
distribution plus an amount equal to the greater of
(A) $125.00 per share or (B) an aggregate amount per
share, subject to the provision for adjustment
hereinafter set forth, of 1,000 times the aggregate
amount to be distributed per share to holders of
Common Shares. All such preferential amounts shall be
paid or set apart for payment before the payment or
setting apart for payment of any amount for, or the
distribution of any assets of the corporation to, the
holders of any class of shares ranking junior as to
assets to the Series A Preferred Shares, or the
holders of any series of Preferred Shares ranking
junior as to assets to the Series A Preferred Shares.
In the event the corporation shall at any time
declare or pay any dividend on Common Shares payable
in Common Shares, or effect a subdivision or
combination of the outstanding Common Shares (by
reclassification or otherwise) into a greater or
lesser number of Common Shares, then in each such
case the aggregate amount to which holders of the
Series A Preferred Shares were entitled immediately
prior to such event under clause (B) of the next
preceding
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<PAGE>
sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of
Common Shares outstanding immediately after such
event and the denominator of which is the number of
Common Shares that were outstanding immediately prior
to such event.
(3) REDEMPTION. The Series A Preferred Shares shall not
be redeemable.
(4) VOTING RIGHTS. Subject to the provisions of this
Article Fourth, each Series A Preferred Share shall
entitle the holder thereof to one vote on all matters
submitted to a vote of the shareholders of the
corporation. The holders of fractional Series A
Preferred Shares shall not be entitled to any vote on
any matter submitted to a vote of the shareholders of
the corporation.
(5) CERTAIN RESTRICTIONS.
(A) Subject to the provisions of this Article
Fourth, whenever quarterly dividends or
other dividends or distributions payable on
the Series A Preferred Shares are, in
arrears, thereafter and until all accrued
and unpaid dividends and distributions,
whether or not declared, on outstanding
Series A Preferred Shares shall have been
paid in full, the corporation shall not:
(i) declare or pay dividends on, or make
any other distributions on, any
shares ranking junior (either as to
dividends or upon liquidation,
dissolution or winding up) to the
Series A Preferred Shares;
(ii) redeem, purchase or otherwise
acquire for consideration shares
ranking junior (either as to
dividends or upon liquidation,
dissolution or winding up) to the
Series A Preferred Shares; provided
that the corporation may at any
time redeem, purchase or otherwise
acquire any such junior shares in
exchange for any shares of the
corporation ranking junior (either
as to dividends or upon
dissolution, liquidation or winding
up) to the Series A Preferred
Shares;
(iii) declare or pay dividends on or make
any other distributions on any
shares ranking on a parity (either
as to dividends or upon liquidation,
dissolution or winding up) with the
Series A Preferred Shares, except
dividends paid ratably on the Series
A Preferred Shares and all such
parity shares 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;
(iv) purchase or otherwise acquire for
consideration any Series A
Preferred Shares, or any shares
ranking on a parity with the Series
A Preferred Shares, except in
accordance with a
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<PAGE>
purchase offer made in writing or
by publication (as determined by
the Board of Directors) to all
holders of such shares upon such
terms as the Board of Directors,
after consideration of the
respective annual dividend rates
and other relative rights and
preferences of the respective
series and classes, shall determine
in good faith will result in fair
and equitable treatment among the
respective series or classes.
(B) The corporation shall not permit any
subsidiary of the corporation to purchase or
otherwise acquire for consideration any
shares of the corporation unless the
corporation could, pursuant to paragraph (A)
of this subparagraph 5, purchase or
otherwise acquire such shares at such time
and in such manner.
(6) REACQUIRED SHARES. Any Series A Preferred Shares
purchased or otherwise acquired by the corporation in
any manner whatsoever shall be retired promptly after
the acquisition thereof. All such shares shall upon
their retirement become authorized but unissued
Voting Preferred Shares and may be reissued as part
of a new series of Voting Preferred Shares to be
created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions
on issuance set forth herein.
(7) CONSOLIDATION, MERGER, ETC. In case the corporation
shall enter into any consolidation, merger,
combination or other transaction in which the Common
Shares are exchanged for or changed into other shares
or securities, cash and/or any other property, then
in any such case the Series A Preferred Shares shall
at the same time be similarly exchanged or changed in
an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000
times the aggregate amount of shares, securities,
cash and/or any other property (payable in kind), as
the case may be, into which or for which each Common
Share is changed or exchanged. In the event the
corporation shall at any time declare or pay any
dividend on Common Shares payable in Common Shares,
or effect a subdivision or combination of the
outstanding Common Shares (by reclassification or
otherwise) into a greater or lesser number of Common
Shares, then in each such case the amount set forth
in the next preceding sentence with respect to the
exchange or change of Series A Preferred Shares shall
be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of Common Shares
outstanding immediately prior to such event and the
denominator of which is the number of Common Shares
that were outstanding immediately prior to such
event.
10. Of the 1,357,299 Voting Preferred Shares of the corporation,
155,250 shall constitute a series of Voting Preferred Shares
designated as 6 3/4% Cumulative Convertible Preferred Shares
(the "6 3/4% Preferred Shares") with a Liquidation
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<PAGE>
Preference of $1,000 per share (the "Liquidation Preference"),
and have, subject and in addition to the other provisions of
this Article Fourth, the following relative rights,
preferences and limitations:
(1) ISSUE DATE. The date the 6 3/4% Preferred Shares are
first issued is referred to as the "Issue Date".
(2) RANK. The 6 3/4% Preferred Shares will, rank (i) PARI
PASSU in right of payment with each other class of
Capital Shares or series of Preferred Shares
established hereafter by the Board of Directors, the
terms of which expressly provide that such class or
series ranks on a parity with the 6 3/4% Preferred
Shares as to dividend rights and rights on
liquidation, dissolution and winding-up of the
corporation (collectively referred to as "Parity
Securities"); (ii) junior in right of payment to any
Senior Securities (as defined) as to dividends and
upon liquidation, dissolution or winding-up of the
corporation and (iii) senior in right of payment as
to dividend rights and upon liquidation, dissolution
or winding-up of the corporation to the Common Shares
or any Capital Shares of the corporation that
expressly provide that they will rank junior to the
6 3/4% Preferred Shares as to dividend rights or
rights on liquidation, winding-up and dissolution of
the corporation (collectively referred to as "Junior
Securities"). The corporation may not authorize,
create (by way of reclassification or otherwise) or
issue any class or series of Capital Shares of the
corporation ranking senior in right of payment as to
dividend rights or upon liquidation, dissolution or
winding-up of the corporation to the 6 3/4% Preferred
Shares ("Senior Securities") or any obligation or
security convertible or exchangeable into, or
evidencing a right to purchase, shares of any class
or series of Senior Securities without the
affirmative vote or consent of the Holders of at
least 66 2/3% of the outstanding 6 3/4% Preferred
Shares.
(3) DIVIDENDS. The Holders of the 6 3/4% Preferred Shares
will be entitled to receive, when, as and if
dividends are declared by the Board of Directors out
of funds of the corporation legally available
therefor, cumulative preferential dividends from the
Issue Date of the 6 3/4% Preferred Shares accruing at
the rate of $67.50 per 6 3/4% Preferred Share per
annum, or $16.875 per 6 3/4% Preferred Share per
quarter, payable quarterly in arrears on January 1,
April 1, July 1, and October 1 of each year or, if
any such date is not a Business Day, on the next
succeeding Business Day (each, a "Dividend Payment
Date"), to the Holders of record as of the next
preceding December 15, March 15, June 15, and
September 15 (each, a "Record Date"). In addition to
the dividends described in the preceding sentence, a
Holder of any outstanding 6 3/4% Preferred Shares
will be entitled to a dividend in an additional
amount (the "Supplemental Dividend"), to the extent
not previously paid on the 6 3/4% Preferred Shares,
equal to all accumulated and unpaid dividends on the
shares of IXC 6 3/4% Preferred Stock (as defined)
outstanding on the effective date of
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<PAGE>
the merger of Ivory Merger Inc., a wholly-owned
subsidiary of the corporation ("Ivory Merger"), with
and into IXC Communications, Inc. ("IXC"), pursuant
to which outstanding shares of IXC 6 3/4% Preferred
Stock were converted into the right to receive 6 3/4%
Preferred Shares. The Supplemental Dividend, until
paid by the corporation, shall for all purposes of
this Article Fourth be deemed included with the
accrued and unpaid dividends on the 6 3/4% Preferred
Shares. Accrued but unpaid dividends, if any, may be
paid on such dates as determined by the Board of
Directors. Dividends will be payable in cash except
as set forth below. Dividends payable on the 6 3/4%
Preferred Shares will be computed on the basis of a
360-day year of twelve 30-day months and will be
deemed to accrue on a daily basis. Dividends (other
than the Supplemental Dividend) may, at the option of
the corporation, be paid in Common Shares if, and
only if, the documents governing the corporation's
indebtedness that exist on the Issue Date then
prohibit the payment of such dividends in cash. If
the corporation elects to pay dividends in Common
Shares, the number of Common Shares to be distributed
will be calculated by dividing the amount of such
dividend otherwise payable in cash by 95% of the
arithmetic average of the Closing Price (as defined)
for the five Trading Days (as defined) preceding the
Dividend Payment Date. The 6 3/4% Preferred Shares
will not be redeemable unless all dividends
(including the Supplemental Dividend) accrued through
such redemption date shall have been paid in full.
Notwithstanding anything to the contrary herein
contained, the corporation shall not be required to
declare or pay a dividend if another person
(including, without limitation, any of its
Subsidiaries) pays an amount to the Holders equal to
the amount of such dividend on behalf of the
corporation and, in such event, the dividend will be
deemed paid for all purposes.
Dividends on the 6 3/4% Preferred Shares (including
the Supplemental Dividend) will accrue whether or not
the corporation has earnings or profits, whether or
not there are funds legally available for the payment
of such dividends and whether or not dividends are
declared. Dividends will accumulate to the extent
they are not paid on the Dividend Payment Date for
the quarter to which they relate. Accumulated unpaid
dividends (including the Supplemental Dividend) will
accrue and cumulate at a rate of 6.75% per annum. The
corporation will take all reasonable actions required
or permitted under Ohio law to permit the payment of
dividends on the 6 3/4% Preferred Shares.
No dividend whatsoever shall be declared or paid
upon, or any sum set apart for the payment of
dividends upon, any outstanding 6 3/4% Preferred
Share with respect to any dividend period unless all
dividends for all preceding dividend periods
(including the Supplemental Dividend) have been
declared and paid upon, or declared and a sufficient
sum set apart for the payment of such dividend upon,
all outstanding 6 3/4% Preferred Shares. Unless full
cumulative dividends on all outstanding 6 3/4%
Preferred Shares
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(including the Supplemental Dividend) due for all
past dividend periods shall have been declared and
paid, or declared and a sufficient sum for the
payment thereof set apart, then: (i) no dividend
(other than a dividend payable solely in shares of
Junior Securities or options, warrants or rights to
purchase Junior Securities) shall be declared or paid
upon, or any sum set apart for the payment of
dividends upon, any shares of Junior Securities; (ii)
no other distribution shall be declared or made upon,
or any sum set apart for the payment of any
distribution upon, any shares of Junior Securities;
(iii) no shares of Junior Securities shall be
purchased, redeemed or otherwise acquired or retired
for value (excluding an exchange for shares of other
Junior Securities or a purchase, redemption or other
acquisition from the proceeds of a substantially
concurrent sale of Junior Securities) by the
corporation or any of its Subsidiaries; and (iv) no
monies shall be paid into or set apart or made
available for a sinking or other like fund for the
purchase, redemption or other acquisition or
retirement for value of any shares of Junior
Securities by the corporation or any of its
Subsidiaries. Holders of the 6 3/4% Preferred Shares
will not be entitled to any dividends, whether
payable in cash, property or stock, in excess of the
full cumulative dividends as herein described.
(4) LIQUIDATION PREFERENCE. Upon any voluntary or
involuntary liquidation, dissolution or winding-up of
the affairs of the corporation after payment in full
of the Liquidation Preference (and any accrued and
unpaid dividends) on any Senior Securities, each
Holder of 6 3/4% Preferred Shares shall be entitled,
on an equal basis with the holders of any other
outstanding Parity Securities, to payment out of the
assets of the corporation available for distribution
of the Liquidation Preference per 6 3/4% Preferred
Share held by such Holder, plus an amount equal to
the accrued and unpaid dividends (if any), Liquidated
Damages (as defined) (if any) and the Supplemental
Dividend (if any) on the 6 3/4% Preferred Shares to
the date fixed for liquidation, dissolution, or
winding-up of the corporation before any distribution
is made on any Junior Securities, including, without
limitation, Common Shares of the corporation. After
payment in full of the Liquidation Preference and an
amount equal to the accrued and unpaid dividends,
Liquidated Damages (if any) and the Supplemental
Dividend (if any) to which Holders of the 6 3/4%
Preferred Shares are entitled, such Holders will not
be entitled to any further participation in any
distribution of assets of the corporation. However,
neither the voluntary sale, conveyance, 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 nor the
consolidation or merger of the corporation with or
into one or more corporations will be deemed to be a
voluntary or involuntary liquidation, dissolution or
winding-up of the corporation, unless such sale,
conveyance, exchange, transfer, consolidation or
merger shall be in connection with a liquidation,
dissolution or winding-up of the affairs of the
corporation or reduction or decrease in capital
stock.
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(5) REDEMPTION. The 6 3/4% Preferred Shares may not be
redeemed at the option of the corporation on or prior
to April 5, 2000. After April 5, 2000 the corporation
may redeem the 6 3/4% Preferred Shares (subject to
the legal availability of funds therefor).
Notwithstanding the foregoing, prior to April 1,
2002, the corporation shall only have the option to
redeem the 6 3/4% Preferred Shares if, during the
period of 30 consecutive Trading Days ending on the
Trading Day immediately preceding the date that the
notice of redemption is mailed to Holders, the
Closing Price for the Common Shares exceeded $75
divided by the Conversion Rate effective on the date
of such notice for at least 20 of such Trading Days.
Subject to the immediately preceding sentence, the
6 3/4% Preferred Shares may be redeemed, in whole or
in part, at the option of the corporation after
April 5, 2000, at the redemption prices specified
below (expressed as percentages of the Liquidation
Preference thereof), in each case, together with an
amount equal to accrued and unpaid dividends on the
6 3/4% Preferred Shares (excluding any declared
dividends for which the Record Date has passed),
Liquidated Damages (if any) and the Supplemental
Dividend (if any) to the date of redemption, upon not
less than 15 nor more than 60 days prior written
notice, if redeemed during the period commencing on
April 5, 2000 to March 31, 2001 at 105.40%, and
thereafter during the 12-month period commencing on
April 1 of each of the years set forth below:
<TABLE>
<CAPTION>
REDEMPTION
YEAR RATE
<S> <C>
2001 104.73%
2002 104.05%
2003 103.38%
2004 102.70%
2005 102.03%
2006 101.35%
2007 100.68%
2008 and thereafter 100.00%
</TABLE>
Except as provided in the preceding sentence, no
payment or allowance will be made for accrued
dividends on any of the 6 3/4% Preferred Shares
called for redemption.
On and after any date fixed for redemption (the
"Redemption Date"), provided that the corporation has
made available at the office of the Transfer Agent a
sufficient amount of cash to effect the redemption,
dividends will cease to accrue on the 6 3/4%
Preferred Shares called for redemption (except that,
in the case of a Redemption Date after a dividend
payment Record Date and prior to the related Dividend
Payment Date, Holders of the 6 3/4% Preferred Shares
on the dividend payment Record Date will be entitled
on such Dividend Payment Date to receive the
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dividend payable on such shares), such shares shall
no longer be deemed to be outstanding and all rights
of the Holders of such shares as Holders of 6 3/4%
Preferred Shares shall cease except the right to
receive the cash deliverable upon such redemption,
without interest from the Redemption Date.
In the event of a redemption of only a portion of the
6 3/4% Preferred Shares then outstanding, the
corporation shall effect such redemption on a pro
rata basis, except that the corporation may redeem
all of the shares held by Holders of fewer than 100
shares (or all of the shares held by Holders who
would hold less than 100 shares as a result of such
redemption), as may be determined by the corporation.
With respect to a redemption pursuant hereto, the
corporation will send a written notice of redemption
by first class mail to each Holder of record of the
6 3/4% Preferred Shares, not fewer than 15 days nor
more than 60 days prior to the Redemption Date at its
registered address (the "Redemption Notice");
PROVIDED, HOWEVER, that no failure to give such
notice nor any deficiency therein shall affect the
validity of the procedure for the redemption of the
6 3/4% Preferred Shares to be redeemed except as to
the Holder or Holders to whom the corporation has
failed to give said notice or except as to the Holder
or Holders whose notice was defective. The Redemption
Notice shall state:
(i) the redemption price;
(ii) whether all or less than all the
outstanding 6 3/4% Preferred Shares
are to be redeemed and the total
number of 6 3/4% Preferred Shares
being redeemed;
(iii) the Redemption Date;
(iv) that the Holder is to surrender to
the corporation, in the manner, at
the place or places and at the price
designated, his certificate or
certificates representing the 6 3/4%
Preferred Shares to be redeemed; and
(v) that dividends on the 6 3/4%
Preferred Shares to be redeemed
shall cease to accumulate on such
Redemption Date unless the
corporation defaults in the payment
of the redemption price.
Each Holder of the 6 3/4% Preferred Shares shall
surrender the certificate or certificates
representing such 6 3/4% Preferred Shares to the
corporation, duly endorsed (or otherwise in proper
form for transfer, as determined by the corporation),
in the manner and at the place designated in the
Redemption Notice, and on the Redemption Date the
full redemption price for such shares shall be
payable in cash to the person whose name appears
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on such certificate or certificates as the owner
thereof, and each surrendered certificate shall be
canceled and retired. In the event that less than all
of the shares represented by any such certificate are
redeemed, a new certificate shall be issued
representing the unredeemed shares.
(6) VOTING RIGHTS. Each Holder of record of the 6 3/4%
Preferred Shares, except as required under Ohio law
or as provided in paragraph (6) and in paragraphs
(2), (8) and (13) hereof, will be entitled to one
vote for each 6 3/4% Preferred Share held by such
Holder on any matter required or permitted to be
voted upon by the shareholders of the corporation.
Upon the accumulation of accrued and unpaid dividends
on the outstanding 6 3/4% Preferred Shares in an
amount equal to six full quarterly dividends (whether
or not consecutive) (together with any event with a
similar effect pursuant to the terms of any other
series of Preferred Shares upon which like rights
have been conferred, a "Voting Rights Triggering
Event"), the number of members of the corporation's
Board of Directors will be immediately and
automatically increased by two (unless previously
increased pursuant to the terms of any other series
of Preferred Shares upon which like rights have been
conferred), and the Holders of a majority of the
outstanding 6 3/4% Preferred Shares, voting together
as a class (pro rata, based on Liquidation
Preference) with the holders of any other series of
Preferred Shares upon which like rights have been
conferred and are exercisable, will be entitled to
elect two members to the Board of Directors of the
corporation. Voting rights arising as a result of a
Voting Rights Triggering Event will continue until
such time as all dividends in arrears on the 6 3/4%
Preferred Shares are paid in full. Notwithstanding
the foregoing, however, such voting rights to elect
directors will expire when the number of outstanding
6 3/4% Preferred Shares is reduced to 13,500 or less.
In the event such voting rights expire or are no
longer exercisable because dividends in arrears have
been paid in full, the term of any directors elected
pursuant to the provisions of this paragraph 6 above
shall terminate forthwith and the number of directors
constituting the Board of Directors shall be
immediately and automatically decreased by two (until
the occurrence of any subsequent Voting Rights
Triggering Event). At any time after voting power to
elect directors shall have become vested and be
continuing in Holders of the 6 3/4% Preferred Shares
(together with the holders of any other series of
Preferred Shares upon which like rights have been
conferred and are exercisable) pursuant to this
paragraph 6, or if vacancies shall exist in the
offices of directors elected by such holders, a
proper officer of the corporation may, and upon the
written request of Holders of record of at least 25%
of the outstanding 6 3/4% Preferred Shares or holders
of 25% of outstanding shares of any other series of
Preferred Shares upon which like rights have been
conferred and are exercisable addressed to the
Secretary of the corporation shall call a special
meeting of
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Holders of the 6 3/4% Preferred Shares and the
holders of such other series of Preferred Shares for
the purpose of electing the directors which such
holders are entitled to elect pursuant to the terms
hereof; PROVIDED, HOWEVER, that no such special
meeting shall be called if the next annual meeting of
shareholders of the corporation is to be held within
60 days after the voting power to elect directors
shall have become vested (or such vacancies arise, as
the case may be), in which case such meeting shall be
deemed to have been called for such next annual
meeting. If such meeting shall not be called,
pursuant to the provision of the immediately
preceding sentence, by a proper officer of the
corporation within 20 days after personal service to
the Secretary of the corporation at its principal
executive offices, then Holders of record of at least
25% of the outstanding 6 3/4% Preferred Shares or
holders of 25% of shares of any other series of
Preferred Shares upon which like rights have been
conferred and are exercisable may designate in
writing one of their members to call such meeting at
the expense of the corporation, and such meeting may
be called by the person so designated upon the notice
required for the annual meetings of shareholders of
the corporation and shall be held at the place for
holding the annual meetings of shareholders. Any
Holder of the 6 3/4% Preferred Shares or such other
series of Preferred Shares so designated shall have,
and the corporation shall provide, access to the
lists of Holders of the 6 3/4% Preferred Shares and
the holders of such other series of Preferred Shares
for any such meeting of the holders thereof to be
called pursuant to the provisions hereof. If no
special meeting of Holders of the 6 3/4% Preferred
Shares and the holders of such other series of
Preferred Shares is called as provided in this
paragraph 6, then such meeting shall be deemed to
have been called for the next meeting of shareholders
of the corporation.
At any meeting held for the purposes of electing
directors at which Holders of the 6 3/4% Preferred
Shares (together with the holders of any other series
of Preferred Shares upon which like rights have been
conferred and are exercisable) shall have the right,
voting together as a separate class, to elect
directors as aforesaid, the presence in person or by
proxy of Holders of at least a majority in voting
power of the outstanding 6 3/4% Preferred Shares (and
such other series of Preferred Shares) shall be
required to constitute a quorum thereof.
Any vacancy occurring in the office of a director
elected by Holders of the 6 3/4% Preferred Shares
(and such other series of Preferred Shares) may be
filled by the remaining director elected by Holders
of the 6 3/4% Preferred Shares (and such other series
of Preferred Shares) unless and until such vacancy
shall be filled by Holders of the 6 3/4% Preferred
Shares (and such other series of Preferred Shares).
So long as any 6 3/4% Preferred Shares are
outstanding, the corporation will not amend this
Article Fourth so as to affect adversely the
specified rights,
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<PAGE>
preferences, privileges or voting rights of Holders
of the 6 3/4% Preferred Shares or to authorize the
issuance of any additional 6 3/4% Preferred Shares
without the affirmative vote of Holders of at least
two-thirds of the issued and outstanding 6 3/4%
Preferred Shares, voting as one class, given in
person or by proxy, either in writing or by
resolution approved at an annual or special meeting.
Except as set forth above and otherwise required by
applicable law, the creation, authorization or
issuance of any shares of any Junior Securities,
Parity Securities or Senior Securities, or the
increase or decrease in the amount of authorized
Capital Shares of any class, including Preferred
Shares, shall not require the affirmative vote or
consent of Holders of the 6 3/4% Preferred Shares and
shall not be deemed to affect adversely the rights,
preferences, privileges or voting rights of the
6 3/4% Preferred Shares.
In any case in which the Holders of the 6 3/4%
Preferred Shares shall be entitled to vote pursuant
hereto or pursuant to Ohio law, each Holder of the
6 3/4% Preferred Shares entitled to vote with respect
to such matters shall be entitled to one vote for
each 6 3/4% Preferred Share held by such Holder.
(7) CONVERSION RIGHTS. The 6 3/4% Preferred Shares will
be convertible at the option of the Holder, into
Common Shares at any time, unless previously redeemed
or repurchased, at a conversion rate of 28.838 Common
Shares per 6 3/4% Preferred Share (as adjusted
pursuant to the provisions hereof, the "Conversion
Rate") (subject to the adjustments described below).
The right to convert a 6 3/4% Preferred Share called
for redemption or delivered for repurchase will
terminate at the close of business on the Redemption
Date for such 6 3/4% Preferred Shares or at the time
of the repurchase, as the case may be.
The right of conversion attaching to any 6 3/4%
Preferred Share may be exercised by the Holder
thereof by delivering the certificate for such share
to be converted to the office of the Transfer Agent,
or any agency or office of the corporation maintained
for that purpose, accompanied by a duly signed and
completed notice of conversion in form reasonably
satisfactory to the Transfer Agent of the
corporation, such as that which is set forth in
Exhibit B hereto. The conversion date will be the
date on which the share certificate and the duly
signed and completed notice of conversion are so
delivered. As promptly as practicable on or after the
conversion date, the corporation will issue and
deliver to the Transfer Agent a certificate or
certificates for the number of full Common Shares
issuable upon conversion, with any fractional shares
rounded up to full shares or, at the corporation's
option, payment in cash in lieu of any fraction of a
share, based on the Closing Price of the Common
Shares on the Trading Day preceding the conversion
date. Such certificate or certificates will be
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<PAGE>
delivered by the Transfer Agent to the appropriate
Holder on a book-entry basis or by mailing
certificates evidencing the additional shares to the
Holders at their respective addresses set forth in
the register of Holders maintained by the Transfer
Agent. All Common Shares issuable upon conversion of
the 6 3/4% Preferred Shares will be fully paid and
nonassessable and will rank PARI PASSU with the other
Common Shares outstanding from time to time. Any
6 3/4% Preferred Shares surrendered for conversion
during the period from the close of business on any
Record Date to the opening of business on the next
succeeding Dividend Payment Date must be accompanied
by payment of an amount equal to the dividends
payable on such Dividend Payment Date on the 6 3/4%
Preferred Shares being surrendered for conversion. No
other payment or adjustment for dividends, or for any
dividends in respect of Common Shares, will be made
upon conversion. The holders of Common Shares issued
upon conversion will not be entitled to receive any
dividends payable to holders of Common Shares as of
any record time before the close of business on the
conversion date.
The Conversion Rate shall be adjusted from time to
time by the corporation as follows:
(a) If the corporation shall hereafter pay a dividend or
make a distribution in Common Shares to all holders
of any outstanding class or series of Common Shares
of the corporation, the Conversion Rate in effect at
the opening of business on the date following the
date fixed for the determination of shareholders
entitled to receive such dividend or other
distribution shall be increased by multiplying such
Conversion Rate by a fraction of which the
denominator shall be the number of Common Shares
outstanding at the close of business on the Record
Date (as defined below) fixed for such determination
and the numerator shall be the sum of such number of
outstanding shares and the total number of shares
constituting such dividend or other distribution,
such increase to become effective immediately after
the opening of business on the day following the
Record Date. If any dividend or distribution of the
type described in this provision (a) is declared but
not so paid or made, the Conversion Rate shall again
be adjusted to the Conversion Rate which would then
be in effect if such dividend or distribution had not
been declared.
(b) If the outstanding Common Shares shall be subdivided
into a greater number of Common Shares, the
Conversion Rate in effect at the opening of business
on the day following the day upon which such
subdivision becomes effective shall be
proportionately increased and, conversely, if the
outstanding Common Shares shall be combined into a
smaller number of Common Shares, the Conversion Rate
in effect at the opening of business on the day
following the day upon which such combination becomes
effective shall be proportionately reduced, such
increase or reduction, as the case may be, to become
effective immediately after the
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<PAGE>
opening of business on the day following the day upon
which such subdivision or combination becomes
effective.
(c) If the corporation shall offer or issue rights,
options or warrants to all holders of its outstanding
Common Shares entitling them to subscribe for or
purchase Common Shares at a price per share less than
the Current Market Price (as defined below) on the
Record Date fixed for the determination of
shareholders entitled to receive such rights or
warrants, the Conversion Rate shall be adjusted so
that the same shall equal the rate determined by
multiplying the Conversion Rate in effect at the
opening of business on the date after such Record
Date by a fraction of which the denominator shall be
the number of Common Shares outstanding at the close
of business on the Record Date plus the number of
Common Shares which the aggregate offering price of
the total number of Common Shares subject to such
rights, options or warrants would purchase at such
Current Market Price and of which the numerator shall
be the number of Common Shares outstanding at the
close of business on the Record Date plus the total
number of additional Common Shares subject to such
rights, options or warrants for subscription or
purchase. Such adjustment shall become effective
immediately after the opening of business on the day
following the Record Date fixed for determination of
shareholders entitled to purchase or receive such
rights or warrants. To the extent that Common Shares
are not delivered pursuant to such rights, options or
warrants, upon the expiration or termination of such
rights or warrants the Conversion Rate shall again be
adjusted to be the Conversion Rate which would then
be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the
basis of delivery of only the number of Common Shares
actually delivered. If such rights or warrants are
not so issued, the Conversion Rate shall again be
adjusted to be the Conversion Rate which would then
be in effect if such date fixed for the determination
of shareholders entitled to receive such rights or
warrants had not been fixed. In determining whether
any rights or warrants entitle the holders to
subscribe for or purchase Common Shares at less than
such Current Market Price, and in determining the
aggregate offering price of such Common Shares, there
shall be taken into account any consideration
received for such rights or warrants, with the value
of such consideration, if other than cash, to be
determined by the Board of Directors.
(d) If the corporation shall, by dividend or otherwise,
distribute to all holders of its Common Shares any
class of Capital Stock of the corporation (other than
any dividends or distributions to which provision (a)
of this paragraph applies) or evidences of its
indebtedness, cash or other assets (including
securities, but excluding any rights or warrants of a
type referred to in paragraph (c) of this paragraph)
(the foregoing hereinafter called the "Distributed
Securities"), then, in each such case, the Conversion
Rate shall be increased so that the same shall be
equal to the rate determined by multiplying the
Conversion Rate in effect immediately
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prior to the close of business on the Record Date (as
defined below) with respect to such distribution by a
fraction of which the denominator shall be the
Current Market Price (determined as provided in
provision g (i) of this paragraph) of the Common
Shares on such date less the Fair Market Value (as
defined below) on such date of the portion of the
Distributed Securities so distributed applicable to
one Common Share and the numerator shall be such
Current Market Price, such increase to become
effective immediately prior to the opening of
business on the day following the Record Date;
PROVIDED, HOWEVER, that, in the event the then Fair
Market Value (as so determined) of the portion of the
Distributed Securities so distributed applicable to
one Common Share is equal to or greater than the
Current Market Price on the Record Date, in lieu of
the foregoing adjustment, adequate provision shall be
made so that each Holder of the 6 3/4% Preferred
Shares shall have the right to receive upon
conversion of a 6 3/4% Preferred Share (or any
portion thereof) the amount of Distributed Securities
such Holder would have received had such Holder
converted such 6 3/4% Preferred Share (or portion
thereof) immediately prior to such Record Date. If
such dividend or distribution is not so paid or made,
the Conversion Rate shall again be adjusted to be the
Conversion Rate which would then be in effect if such
dividend or distribution had not been declared. If
the Board of Directors determines the Fair Market
Value of any distribution for purposes hereof by
reference to the actual or when issued trading market
for any securities comprising all or part of such
distribution, it must in doing so consider the prices
in such market over the same period used in computing
the Current Market Price pursuant to provision g (i)
of this paragraph to the extent possible. Rights or
warrants distributed by the corporation to all
holders of Common Shares entitling the holders
thereof to subscribe for or purchase shares of the
corporation's Capital Stock (either initially or
under certain circumstances), which rights or
warrants, until the occurrence of a specified event
or events ("Dilution Trigger Event"): (i) are deemed
to be transferred with such Common Shares; (ii) are
not exercisable; and (iii) are also issued in respect
of future issuances of Common Shares, shall be deemed
not to have been distributed for purposes of this
provision (d) (and no adjustment to the Conversion
Rate under this provision (d) shall be required)
until the occurrence of the earliest Dilution Trigger
Event, whereupon such rights and warrants shall be
deemed to have been distributed and an appropriate
adjustment to the Conversion Rate under this
provision (d) shall be made. If any such rights or
warrants, including any such existing rights or
warrants distributed prior to the date hereof, are
subject to subsequent events, upon the occurrence of
each of which such rights or warrants shall become
exercisable to purchase different securities,
evidences of indebtedness or other assets, then the
occurrence of each such event shall be deemed to be
such date of issuance and record date with respect to
new rights or warrants (and a termination or
expiration of the existing rights or warrants without
exercise by the holder thereof). In addition, in the
event
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of any distribution (or deemed distribution) of
rights or warrants, or any Dilution Trigger Event
with respect thereto, that was counted for purposes
of calculating a distribution amount for which an
adjustment to the Conversion Rate under this
provision (d) was made, (1) in the case of any such
rights or warrants which shall all have been redeemed
or repurchased without exercise by any holders
thereof, the Conversion Rate shall be readjusted upon
such final redemption or repurchase to give effect to
such distribution or Dilution Trigger Event, as the
case may be, as though it were a cash distribution,
equal to the per share redemption or repurchase price
received by a holder or holders of Common Shares with
respect to such rights or warrants (assuming such
holder had retained such rights or warrants), made to
all holders of Common Shares as of the date of such
redemption or repurchase, and (2) in the case of such
rights or warrants which shall have expired or been
terminated without exercise by any holders thereof,
the Conversion Rate shall be readjusted as if such
rights and warrants had not been issued.
Notwithstanding any other provision of this provision (d) to
the contrary, Capital Stock, rights, warrants, evidences of
indebtedness, other securities, cash or other assets
(including, without limitation, any rights distributed
pursuant to any shareholder rights plan) shall be deemed not
to have been distributed for purposes of this provision (d) if
the corporation makes proper provision so that each Holder of
6 3/4% Preferred Shares who converts a 6 3/4% Preferred Share
(or any portion thereof) after the date fixed for
determination of shareholders entitled to receive such
distribution shall be entitled to receive upon such
conversion, in addition to the Common Shares issuable upon
such conversion, the amount and kind of such distributions
that such Holder would have been entitled to receive if such
Holder had, immediately prior to such determination date,
converted such 6 3/4% Preferred Share into Common Shares.
For purposes of this provision (d), provision (a) and
provision (b), any dividend or distribution to which
this provision (d) is applicable that also includes
Common Shares, or rights or warrants to subscribe for
or purchase Common Shares to which provision (b)
applies (or both), shall be deemed instead to be (1)
a dividend or distribution of the evidences of
indebtedness, cash, assets, shares of Capital Stock,
rights or warrants other than (A) such Common Shares
or (B) rights or warrants to which provision (b)
applies (and any Conversion Rate increase required by
this provision (d) with respect to such dividend or
distribution shall then be made) immediately followed
by (2) a dividend or distribution of such Common
Shares or such rights or warrants (and any further
Conversion Rate increase required by provisions (a)
and (b) with respect to such dividend or distribution
shall then be made), except that (1) the Record Date
of such dividend or distribution shall be substituted
as "the Record Date fixed for the determination of
shareholders entitled to receive such dividend or
other distribution", "Record Date fixed for such
determination" and "Record Date" within the meaning
of provision (a) and
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<PAGE>
as "the Record Date fixed for the determination of
shareholders entitled to receive such rights or
warrants", "the date fixed for the determination of
the shareholders entitled to receive such rights or
warrants" and "such Record Date" within the meaning
of provision (b), and (2) any Common Shares included
in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date
fixed for such determination" within the meaning of
provision (a).
(e) If the corporation shall, by dividend or otherwise,
distribute to all holders of its Common Shares cash
(excluding any cash that is part of a distribution
referred to in provision (d)) in an aggregate amount
that, combined together with (1) the aggregate amount
of any other such distributions to all holders of its
Common Shares made exclusively in cash within the 12
months preceding the date of payment of such
distribution, and in respect of which no adjustment
pursuant to this provision (e) has been made and (2)
the aggregate of any cash plus the Fair Market Value
(as determined by the Board of Directors, whose
determination shall be conclusive and described in a
resolution of the Board of Directors) of
consideration payable in respect of any tender offer
by the corporation or a Subsidiary of the corporation
for all or any portion of the Common Shares concluded
within the 12 months preceding the date of payment of
such Distribution, and in respect of which no
adjustment pursuant to provision (d) has been made,
exceeds 10% of the product of the Current Market
Price (determined as provided below) on the Record
Date with respect to such distribution times the
number of Common Shares outstanding on such date,
then, and in each such case, immediately after the
close of business on such date, the Conversion Rate
shall be increased so that the same shall equal the
price determined by multiplying the Conversion Rate
in effect immediately prior to the close of business
on such Record Date by a fraction (i) the denominator
of which shall be equal to the Current Market Price
on the Record Date less an amount equal to the
quotient of (x) the excess of such combined amount
over such 10% amount divided by (y) the number of
Common Shares outstanding on the Record Date and (ii)
the numerator of which shall be equal to the Current
Market Price on such Record Date; PROVIDED, HOWEVER,
that, if the portion of the cash so distributed
applicable to one Common Share is equal to or greater
than the Current Market Price of the Common Shares on
the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder
of 6 3/4% Preferred Shares shall have the right to
receive upon conversion of each 6 3/4% Preferred
Share (or any portion thereof) the amount of cash
such Holder would have received had such Holder
converted such 6 3/4% Preferred Share (or portion
thereof) immediately prior to such Record Date. If
such dividend or distribution is not so paid or made,
the Conversion Rate shall again be adjusted to be the
Conversion Rate which would then be in effect if such
dividend or distribution had not been declared.
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(f) If a tender or exchange offer made by the corporation
or any of its Subsidiaries for all or any portion of
Common Shares expires and such tender or exchange
offer (as amended upon the expiration thereof)
requires the payment to shareholders (based on the
acceptance (up to any maximum specified in the terms
of the tender offer) of Purchased Shares (as defined
below)) of an aggregate consideration having a Fair
Market Value that, combined together with (1) the
aggregate of the cash plus the Fair Market Value, as
of the expiration of such tender offer, of
consideration payable in respect of any other tender
offers, by the corporation or any of its Subsidiaries
for all or any portion of the Common Shares expiring
within the 12 months preceding the expiration of such
tender offer and in respect of which no adjustment
pursuant to this paragraph (f) has been made and (2)
the aggregate amount of any distributions to all
holders of the Common Shares made exclusively in cash
within 12 months preceding the expiration of such
tender offer and in respect of which no adjustment
pursuant to provision (e) has been made, exceeds 10%
of the product of the Current Market Price as of the
last time (the "Expiration Time") tenders could have
been made pursuant to such tender offer (as it may be
amended) times the number of Common Shares
outstanding (including any tendered shares) at the
Expiration Time, then, and in each such case,
immediately prior to the opening of business on the
day after the date of the Expiration Time, the
Conversion Rate shall be adjusted so that the same
shall equal the price determined by multiplying the
Conversion Rate in effect immediately prior to the
close of business on the date of the Expiration Time
by a fraction of which the denominator shall be the
number of Common Shares outstanding (including any
tendered shares) at the Expiration Time multiplied by
the Current Market Price of the Common Shares on the
Trading Day next succeeding the Expiration Time and
the numerator shall be the sum of (x) the Fair Market
Value of the aggregate consideration payable to
shareholders based on the acceptance (up to any
maximum specified in the terms of the tender offer)
of all shares validly tendered and not withdrawn as
of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to
as the "Purchased Shares") and (y) the product of the
number of Common Shares outstanding (less any
Purchased Shares) at the Expiration Time and the
Current Market Price of the Common Shares on the
Trading Day next succeeding the Expiration Time, such
reduction (if any) to become effective immediately
prior to the opening of business on the day following
the Expiration Time. If the corporation is obligated
to purchase shares pursuant to any such tender offer,
but the corporation is permanently prevented by
applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate
shall again be adjusted to be the Conversion Rate
which would then be in effect if such tender offer
had not been made. If the application of this
paragraph (f) to any tender offer would result in a
decrease in the Conversion Rate, no adjustment shall
be made for such tender offer under this paragraph
(f).
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The corporation may make voluntary increases in the
Conversion Rate in addition to those required in the
foregoing provisions, provided that each such
increase is in effect for at least 20 calendar days.
In addition, in the event that any other transaction
or event occurs as to which the foregoing Conversion
Rate adjustment provisions are not strictly
applicable but the failure to make any adjustment
would adversely affect the conversion rights
represented by the 6 3/4% Preferred Shares in
accordance with the essential intent and principles
of such provisions, then, in each such case, either
(i) the corporation will appoint an investment
banking firm of recognized national standing, or any
other financial expert that does not (or whose
directors, officers, employees, affiliates or
shareholders do not) have a direct or material
indirect financial interest in the corporation or any
of its Subsidiaries, who has not been, and, at the
time it is called upon to give independent financial
advice to the corporation, is not (and none of its
directors, officers, employees, affiliates or
shareholders are) a promoter, director or officer of
the corporation or any of its Subsidiaries, which
will give their opinion upon or (ii) the Board of
Directors shall, in its sole discretion, determine
consistent with the Board of Directors' fiduciary
duties to the holders of the corporation's Common
Shares, the adjustment, if any, on a basis consistent
with the essential intent and principles established
in the foregoing Conversion Rate adjustment
provisions, necessary to preserve, without dilution,
the conversion rights represented by the 6 3/4%
Preferred Shares. Upon receipt of such opinion or
determination, the corporation will promptly mail a
copy thereof to the Holders of the 6 3/4% Preferred
Shares and will, subject to the fiduciary duties of
the Board of Directors, make the adjustments
described therein.
The corporation will provide to Holders of the 6 3/4%
Preferred Shares reasonable notice of any event that
would result in an adjustment to the Conversion Rate
pursuant to this section so as to permit the Holders
to effect a conversion of the 6 3/4% Preferred Shares
into Common Shares prior to the occurrence of such
event.
(g) For purposes of this paragraph, the following terms
shall have the meaning indicated:
(i) "Current Market Price" means the average of
the daily closing prices per Common Shares
for the 10 consecutive trading days
immediately prior to the date in question.
(ii) "Fair Market Value" shall mean the amount
which a willing buyer would pay a willing
seller in an arm's-length transaction, under
usual and ordinary circumstances and after
consideration of all available uses and
purposes without any compulsion upon the
seller to sell or the buyer to buy, as
determined by the Board of
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Directors, whose determination shall be made
in good faith and shall be conclusive and
described in a resolution of the Board of
Directors.
(iii) "Record Date" shall mean, with respect to
any dividend, distribution or other
transaction or event in which the holders of
Common Shares have the right to receive any
cash, securities or other property or in
which the Common Shares (or other applicable
security) are exchanged for or converted
into any combination of cash, securities or
other property, the date fixed for
determination of shareholders entitled to
receive such cash, securities or other
property (whether such date is fixed by the
Board of Directors or by statute, contract
or otherwise).
(h) No adjustment in the Conversion Rate shall be
required unless such adjustment would require an
increase or decrease of at least 1% in such rate;
PROVIDED, HOWEVER, that any adjustments which by
reason of this paragraph are not required to be made
shall be carried forward and taken into account in
any subsequent adjustment. All calculations under
this paragraph shall be made by the corporation and
shall be made to the nearest cent or to the nearest
one hundredth of a share, as the case may be. No
adjustment need be made for a change in the par value
or no par value of the Common Shares.
(i) Whenever the Conversion Rate is adjusted as herein
provided, the corporation shall promptly file with
the Transfer Agent an Officers' Certificate setting
forth the Conversion Rate after such adjustment and
setting forth a brief statement of the facts
requiring such adjustment. Promptly after delivery of
such certificate, the corporation shall prepare a
notice of such adjustment of the Conversion Rate
setting forth the adjusted Conversion Rate and the
date on which each adjustment becomes effective and
shall mail such notice of such adjustment of the
Conversion Rate to each Holder of the 6 3/4%
Preferred Shares at such Holder's last address
appearing on the register of Holders maintained for
that purpose within 20 days of the effective date of
such adjustment. Failure to deliver such notice shall
not affect the legality or validity of any such
adjustment.
(j) In any case in which this paragraph provides that an
adjustment shall become effective immediately after a
Record Date for an event, the corporation may defer
until the occurrence of such event issuing to the
Holder of any 6 3/4% Preferred Shares converted after
such Record Date and before the occurrence of such
event the additional Common Shares issuable upon such
conversion by reason of the adjustment required by
such event over and above the Common Shares issuable
upon such conversion before giving effect to such
adjustment.
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<PAGE>
(k) For purposes of this paragraph, the number of Common
Shares at any time outstanding shall not include
shares held in the treasury of the corporation but
shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of Common
Shares. The corporation shall not pay any dividend or
make any distribution on Common Shares held in the
treasury of the corporation.
(8) CERTAIN COVENANTS.
(a) TRANSACTIONS WITH AFFILIATES. Without the affirmative
vote or consent of the Holders of a majority of the
outstanding 6 3/4% Preferred Shares, the corporation
will not, and will not permit any of its Subsidiaries
to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter
into or make or amend any contract, agreement,
understanding, loan, advance or guarantee with, or
for the benefit of, any Affiliate (each of the
foregoing, an "Affiliate Transaction"), unless (i)
such Affiliate Transaction is on terms that are no
less favorable to the corporation or the relevant
Subsidiary than those that would have been obtained
in a comparable transaction by the corporation or
such Subsidiary with an unrelated Person and (ii) the
corporation files in its minute books with respect to
any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate
consideration in excess of $1.0 million, a resolution
of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that
such Affiliate Transaction has been approved by a
majority of the members of the Board of Directors
that are disinterested as to such Affiliate
Transaction.
As used herein, "Affiliate" of any specified Person
means any other Person directly or indirectly
controlling or controlled by or under direct or
indirect common control with such specified Person.
For purposes of this definition, "control"
(including, with correlative meanings, the terms
"controlling," "controlled by" and "under common
control with"), as used with respect to any Person,
shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the
management or policies of such Person, whether
through the ownership of voting securities, by
agreement or otherwise; provided that beneficial
ownership of 10% or more of the voting securities of
a Person shall be deemed to be control.
The provisions of the foregoing paragraph shall not
prohibit (i) any issuance of securities, or other
payments, awards or grants in cash, securities or
otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans
approved by the Board of Directors, (ii) the grant of
stock options or similar rights to employees and
directors of the corporation pursuant to plans
approved by the Board of Directors, (iii) any
employment or consulting arrangement or
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<PAGE>
agreement entered into by the corporation or any of
its Subsidiaries in the ordinary course of business
and consistent with the past practice of the
corporation or such Subsidiary, (iv) the payment of
reasonable fees to directors of the corporation and
its Subsidiaries who are not employees of the
corporation or its Subsidiaries, (v) any Affiliate
Transaction between the corporation and a Subsidiary
thereof or between such Subsidiaries (for purposes of
this paragraph, "Subsidiary" includes any entity
deemed to be an Affiliate because the corporation or
any of its Subsidiaries own securities in such entity
or controls such entity), or (vi) transactions
between IXC or any subsidiary thereof specifically
contemplated by the PSINet Agreement dated as of July
22, 1997 between a subsidiary of IXC and PSINet, as
amended as of the date hereof.
(b) PAYMENTS FOR CONSENT. Neither the corporation nor any
of its Subsidiaries will, directly or indirectly, pay
or cause to be paid any consideration, whether by way
of dividend or other distribution, fee or otherwise,
to any Holder of 6 3/4% Preferred Shares for or as an
inducement to any consent, waiver or amendment of any
of the terms or provisions of this Article Fourth or
the 6 3/4% Preferred Shares unless such consideration
is offered to be paid and is paid to all Holders of
the 6 3/4% Preferred Shares that consent, waive or
agree to amend in the time frame set forth in the
solicitation documents relating to such consent,
waiver or agreement.
(c) REPORTS. Whether or not required by the rules and
regulations of the SEC, so long as any 6 3/4%
Preferred Shares are outstanding, the corporation
will furnish to the Holders of the 6 3/4% Preferred
Shares (i) all quarterly and annual financial
information that would be required to be contained in
a filing with the SEC on Forms 10-Q and 10-K if the
corporation were required to file such Forms,
including "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and,
with respect to the annual information only, a report
thereon by the corporation's certified independent
accountants and (ii) all information that would be
required to be contained in a current report on Form
8-K if the corporation were required to file such
reports. In the event the corporation has filed any
such report with the SEC, it will not be obligated to
separately furnish the report to any Holder unless
and until such Holder requests a copy of the report.
In addition, whether or not required by the rules and
regulations of the SEC, the corporation will file a
copy of all such information and reports with the SEC
for public availability (unless the SEC will not
accept such a filing) and make such information
available to securities analysts and prospective
investors upon request.
(9) MERGER, CONSOLIDATION OR SALE OF ASSETS OF THE
CORPORATION. In the event that the corporation is
party to any Fundamental Change or transaction
(including, without limitation, a merger other than a
merger that does not result in a reclassification,
conversion, exchange or cancellation of Common
Shares), consolidation, sale of all or substantially
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<PAGE>
all of the assets of the corporation,
recapitalization or reclassification of Common Shares
(other than a change in par value, or from par value
to no par value, or from no par value to par value or
as a result of a subdivision or combination of Common
Shares) or any compulsory share exchange (each of the
foregoing, including any Fundamental Change, being
referred to as a "Transaction"), the corporation will
be obligated, subject to applicable provisions of
state law, either to offer (a "Repurchase Offer") to
purchase all of the 6 3/4% Preferred Shares on the
date (the "Repurchase Date") that is 75 days after
the date the corporation gives notice of the
Transaction, at a price (the "Repurchase Price")
equal to $1,000.00 per 6 3/4% Preferred Share,
together with an amount equal to accrued and unpaid
dividends on the 6 3/4% Preferred Shares through the
Repurchase Date or to adjust the Conversion Rate as
described below. If a Repurchase Offer is made, the
corporation shall deposit, on or prior to the
Repurchase Date, with a paying agent an amount of
money sufficient to pay the aggregate Repurchase
Price of the 6 3/4% Preferred Shares which is to be
paid on the Repurchase Date.
On or before the 15th day after the corporation knows
or reasonably should know that a Transaction has
occurred, the corporation will be required to mail to
all Holders a notice of the occurrence of such
Transaction and whether or not the documents
governing the corporation's indebtedness permit at
such time a Repurchase Offer, and, as applicable,
either the new Conversion Rate (as adjusted at the
option of the corporation) or the date by which the
Repurchase Offer must be accepted, the Repurchase
Price for the 6 3/4% Preferred Shares and the
procedures which the Holder must follow to accept the
Repurchase Offer. To accept the Repurchase Offer, the
Holder of a 6 3/4% Preferred Share will be required
to deliver, on or before the 10th day prior to the
Repurchase Date, written notice to the corporation
(or an agent designated by the corporation for such
purpose) of Holder's acceptance, together with the
certificates evidencing the 6 3/4% Preferred Shares
with respect to which the offer is being accepted,
duly endorsed for transfer.
In the event the corporation does not make a
Repurchase Offer with respect to a Transaction and
such Transaction results in Common Shares being
converted into the right to receive, or being
exchanged for, (i) in the case of any Transaction
other than a Transaction involving a Common Shares
Fundamental Change (as defined below) (and subject to
funds being legally available for such purpose under
applicable law at the time of such conversion),
securities, cash or other property, each 6 3/4%
Preferred Share shall thereafter be convertible into
the kind and, in the case of a Transaction which does
not involve a Fundamental Change (as defined below),
amount of securities, cash and other property
receivable upon the consummation of such Transaction
by a holder of that number of Common Shares into
which a 6 3/4% Preferred Share was convertible
immediately prior to such Transaction or (ii) in the
case of a Transaction
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<PAGE>
involving a Common Shares Fundamental Change, each
6 3/4% Preferred Share shall thereafter be
convertible (in the manner described therein) into
common stock of the kind received by holders of
Common Shares (but in each case after giving effect
to any adjustment discussed below relating to a
Fundamental Change if such Transaction constitutes a
Fundamental Change), other than as required by Ohio
law.
If any Fundamental Change occurs, then the Conversion
Rate in effect will be adjusted immediately after
such Fundamental Change as described below. In
addition, in the event of a Common Shares Fundamental
Change, each share of the 6 3/4% Preferred Shares
shall be convertible solely into common stock of the
kind received by holders of Common Shares as a result
of such Common Shares Fundamental Change.
The Conversion Rate in the case of any Transaction
involving a Fundamental Change will be adjusted
immediately after such Fundamental Change:
(i) in the case of a Non-Stock
Fundamental Change (as defined
below), the Conversion Rate will
thereupon become the higher of (A)
the Conversion Rate in effect
immediately prior to such Non-Stock
Fundamental Change, but after
giving effect to any other prior
adjustments effected, and (B) a
fraction, the numerator of which is
(x) the redemption rate for one
6 3/4% Preferred Share if the
redemption date were the date of
such Non-Stock Fundamental Change
(or, for the twelve-month period
commencing April 1, 1999,
106.075%), multiplied by $1,000
plus (y) the amount of any
then-accrued and unpaid dividends
on one 6 3/4% Preferred Share, and
the denominator of which is the
greater of the Applicable Price or
the then applicable Reference
Market Price; and
(ii) in the case of a Common Shares
Fundamental Change, the Conversion
Rate in effect immediately prior to
such Common Shares Fundamental
Change, but after giving effect to
any other prior adjustments
effected, will thereupon be
adjusted by multiplying such
Conversion Rate by a fraction of
which the denominator will be the
Purchaser Stock Price (as defined
below) and the numerator will be
the Applicable Price; PROVIDED,
HOWEVER, that in the event of a
Common Shares Fundamental Change in
which (A) 100% of the value of the
consideration received by a holder
of Common Shares is common stock of
the successor, acquiror, or other
third party (and cash, if any, is
paid only with respect to any
fractional interests in such common
stock resulting from such Common
Shares
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<PAGE>
Fundamental Change) and (B) all
Common Shares will have been
exchanged for, converted into, or
acquired for common stock (and cash
with respect to fractional
interests) of the successor,
acquiror, or other third party, the
Conversion Rate in effect
immediately prior to such Common
Shares Fundamental Change will
thereupon be adjusted by
multiplying such Conversion Rate by
the number of shares of common
stock of the successor, acquirer,
or other third party received by a
holder of one Common Share as a
result of such Common Shares
Fundamental Change.
The term "Applicable Price" means (i) in the case of
a Non-Stock Fundamental Change in which the holders
of Common Shares receive only cash, the amount of
cash received by the holder of one Common Share and
(ii) in the event of any other Non-Stock Fundamental
Change or any Common Shares Fundamental Change, the
average of the Closing Price (as defined below) for
Common Shares during the ten Trading Days prior to
the record date for the determination of the holders
of Common Shares entitled to receive such securities,
cash, or other property in connection with such
Non-Stock Fundamental Change or Common Shares
Fundamental Change or, if there is no such record
date, the date upon which the holders of Common
Shares shall have the right to receive such
securities, cash, or other property (such record date
or distribution date being hereinafter referred to as
the "Entitlement Date") in each case as adjusted in
good faith by the corporation to appropriately
reflect any of the events referred to above.
The term "Common Shares Fundamental Change" means any
Fundamental Change in which more than 50% of the
value (as determined in good faith by the Board of
Directors of the corporation) of the consideration
received by holders of Common Shares consists of
common stock that for each of the ten consecutive
Trading Days prior to the Entitlement Date has been
admitted for listing or admitted for listing subject
to notice of issuance on a national securities
exchange or quoted on the Nasdaq National Market;
provided, however, that a Fundamental Change shall
not be a Common Shares Fundamental Change unless
either (i) the corporation continues to exist after
the occurrence of such Fundamental Change and the
outstanding 6 3/4% Preferred Shares continue to exist
as outstanding 6 3/4% Preferred Shares or (ii) not
later than the occurrence of such Fundamental Change,
the outstanding 6 3/4% Preferred Shares are converted
into or exchanged for convertible Preferred Shares of
an entity succeeding to the business of the
corporation or a subsidiary thereof, which
convertible Preferred Shares has powers, preferences,
and relative, participating, optional, or other
rights and qualifications, limitations, and
restrictions, substantially similar to those of the
6 3/4% Preferred Shares.
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<PAGE>
The term "Fundamental Change" means the occurrence of
any Transaction or event in connection with a plan
pursuant to which all or substantially all Common
Shares shall be exchanged for, converted into,
acquired for, or constitute solely the right to
receive securities, cash, or other property (whether
by means of an exchange offer, liquidation, tender
offer, consolidation, merger, combination,
reclassification, recapitalization, or otherwise),
provided, that, in the case of a plan involving more
than one such Transaction or event, for purposes of
adjustment of the Conversion Rate, such Fundamental
Change shall be deemed to have occurred when
substantially all Common Shares shall be exchanged
for, converted into, or acquired for or constitute
solely the right to receive securities, cash, or
other property, but the adjustment shall be based
upon the consideration that a holder of Common Shares
received in such Transaction or event as a result of
which more than 50% of Common Shares shall have been
exchanged for, converted into, or acquired or
constitute solely the right to receive securities,
cash, or other property.
The term "Non-Stock Fundamental Change" means any
Fundamental Change other than a Common Shares
Fundamental Change.
The term "Purchaser Stock Price" means, with respect
to any Common Shares Fundamental Change, the average
of the Closing Prices for the common stock received
in such Common Shares Fundamental Change for the ten
consecutive Trading Days prior to and including the
Entitlement Date, as adjusted in good faith by the
corporation to appropriately reflect any of the
events referred to above.
The term "Reference Market Price" shall initially
mean $18.51 (which is equal to $38.79 divided by
2.096 (which is the exchange ratio for shares of
common stock of IXC in the Agreement and Plan of
Merger dated as of July 20, 1999 among the
corporation, Ivory Merger and IXC)), and in the event
of any adjustment of the Conversion Rate other than
as a result of a Non-Stock Fundamental Change, the
Reference Market Price shall also be adjusted so that
the ratio of the Reference Market Price to the
Conversion Rate after giving effect to any such
adjustment shall always be the same as the ratio of
the initial Reference Market Price to the initial
Conversion Rate.
In case (1) the corporation shall declare a dividend
(or any other distribution) on its Common Shares
payable otherwise than in cash out of its earned
surplus, (2) the corporation shall authorize the
granting to all holders of its Common Shares of
rights or warrants to subscribe for or purchase any
shares of Capital Stock of any class or of any other
rights, (3) of any reclassification of the Common
Shares of the corporation (other than a subdivision
or combination of its outstanding Common Shares), (4)
of any consolidation or merger to which the
corporation is a party and for which approval of any
shareholders of the corporation is required, (5) of
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<PAGE>
the sale or transfer of all or substantially all the
assets of the corporation, or (6) of the voluntary or
involuntary dissolution, liquidation or winding-up of
the corporation, then the corporation shall cause to
be filed with the Transfer Agent and at each office
or agency maintained for the purpose of conversion of
the 6 3/4% Preferred Shares, and shall cause to be
mailed to all Holders at their last addresses as they
shall appear in the 6 3/4% Preferred Shares Register,
at least 20 days (or 10 days in any case specified in
clause (1) or (2) above) prior to the applicable date
hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of
such dividend, distribution, rights or warrants, or,
if a record is not to be taken, the date as of which
the holders of Common Shares of record to be entitled
to such dividend, distribution, rights or warrants
are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up of
the corporation is expected to become effective, and
the date as of which it is expected that holders of
Common Shares of record shall be entitled to exchange
their Common Shares for securities, cash or other
property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up of the corporation. Failure
to give the notice requested by this paragraph or any
defect therein shall not affect the legality or
validity of any dividend, distribution, right,
warrant, reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or
winding-up of the corporation, or the vote upon any
such action. The corporation shall at all times
reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common
Shares (or out of its authorized Common Shares held
in the treasury of the corporation), for the purpose
of effecting the conversion of the 6 3/4% Preferred
Shares, the full number of Common Shares then
issuable upon the conversion of all outstanding
6 3/4% Preferred Shares.
The corporation will pay any and all document, stamp
or similar issue or transfer taxes that may be
payable in respect of the issue or delivery of Common
Shares on conversion of the 6 3/4% Preferred Shares
pursuant hereto. The corporation shall not, however,
be required to pay any tax which may be payable in
respect of any transfer involved in the issue and
delivery of Common Shares in a name other than that
of the Holder of a 6 3/4% Preferred Share or 6 3/4%
Preferred Shares to be converted, and no such issue
or delivery shall be made unless and until the Person
requesting such issue has paid to the corporation the
amount of any such tax, or has established to the
satisfaction of the corporation that such tax has
been paid.
(10) REISSUANCE OF THE 6 3/4% PREFERRED SHARES. 6 3/4%
Preferred Shares redeemed for or converted into
Common Shares or that have been reacquired in any
manner shall not be reissued as 6 3/4% Preferred
Shares and shall (upon compliance with any applicable
provisions of Ohio law)
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have the status of authorized and unissued Preferred
Shares undesignated as to series and may be
redesignated and reissued as part of any series of
Preferred Shares (except as provided by Ohio law);
PROVIDED, however, that so long as any 6 3/4%
Preferred Shares are outstanding, any issuance of
such shares must be in compliance with the terms
hereof.
(11) BUSINESS DAY. If any payment, redemption or exchange
shall be required by the terms hereof to be made on a
day that is not a Business Day, such payment,
redemption or exchange shall be made on the
immediately succeeding Business Day.
(12) AMENDMENT, SUPPLEMENT AND WAIVER. Except as set forth
in paragraph (6), the corporation may amend this
Paragraph 10 to Article Fourth with the affirmative
vote of the Holders of a majority of the outstanding
6 3/4% Preferred Shares (including votes obtained in
connection with a tender offer or exchange offer for
the 6 3/4% Preferred Shares) and, except as otherwise
provided by applicable law, any past default or
failure to comply with any provision of this Article
Fourth may also be waived with the consent of such
Holders. Notwithstanding the foregoing and except as
set forth in paragraph (6), however, without the
consent of each Holder affected, an amendment or
waiver may not (with respect to any 6 3/4% Preferred
Shares held by a non-consenting Holder): (i) alter
the voting rights with respect to the 6 3/4%
Preferred Shares or reduce the number of 6 3/4%
Preferred Shares whose Holders must consent to an
amendment, supplement or waiver, (ii) reduce the
Liquidation Preference of the 6 3/4% Preferred Shares
or adversely alter the provisions with respect to the
redemption of the 6 3/4% Preferred Shares, (iii)
reduce the rate of or change the time for payment of
dividends on the 6 3/4% Preferred Shares, (iv) waive
a default in the payment of dividends (including the
Supplemental Dividend) or Liquidated Damages on the
6 3/4% Preferred Shares, (v) make any 6 3/4%
Preferred Share payable in money other than United
States dollars, (vi) make any change in the
provisions of Paragraph 10 to Article Fourth relating
to waivers of the rights of Holders of the 6 3/4%
Preferred Shares to receive either the Liquidation
Preference, Liquidated Damages (if any), the
Supplemental Dividend (if any) or dividends on the
6 3/4% Preferred Shares or (vii) make any change in
the foregoing amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of
any Holder of the 6 3/4% Preferred Shares, the
corporation may (to the extent permitted by, and
subject to the requirements of, Ohio law) amend or
supplement this Paragraph 10 to Article Fourth to
cure any ambiguity, defect or inconsistency, to
provide for uncertificated 6 3/4% Preferred Shares in
addition to or in place of certificated 6 3/4%
Preferred Shares, to make any change that would
provide any additional rights or benefits to the
Holders of the 6 3/4% Preferred Shares or to make any
change that the Board of
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Directors determines, in good faith, is not
materially adverse to Holders of the 6 3/4% Preferred
Shares.
(13) FORM S-4 REGISTRATION STATEMENT; LIQUIDATED DAMAGES.
Pursuant to the Agreement and Plan of Merger dated as
of July 20, 1999, by and among the corporation, Ivory
Merger and IXC (the "Merger Agreement"), the
corporation has filed with the SEC on September 13,
1999, and the SEC has declared effective, a
Registration Statement on Form S-4 under the
Securities Act (the "S-4 Registration Statement")
with respect to the 6 3/4% Preferred Shares,
Depositary Shares representing a one-twentieth
interest in a 6 3/4% Preferred Share ("the Depositary
Shares") and Common Shares issuable upon conversion
thereof or paid as dividends thereon (collectively,
the "S-4 Registered Securities"), thereby providing
that a holder thereof will be able to sell or
transfer such S-4 Registered Securities without
filing a registration statement under the Securities
Act.
The corporation will use its best efforts to maintain
the effectiveness of the S-4 Registration Statement
until all S-4 Registered Securities that are not held
by affiliates of the corporation (A) may be resold
without restriction under Rule 144 of the Securities
Act or (B) have been sold pursuant to the S-4
Registration Statement (subject to the corporation's
right to notify Holders that the Prospectus contained
therein ceases to be accurate and complete as a
result of material business developments for up to
120 days during such three-year period, provided that
(x) no single period may exceed 45 days and (y) such
periods in the aggregate may not exceed 60 days in
any calendar year). If a holder of S-4 Restricted
Securities that is not an affiliate of the
corporation becomes unable to sell or transfer
outstanding S-4 Registered Securities without filing
a registration statement under the Securities Act
(such event a "Registration Default"), then the
corporation will pay Liquidated Damages to such
holder with respect to the first 45-day period
immediately following the occurrence of such
Registration Default in an amount equal to $0.25 per
year per Depositary Share ($5.00 per year per $ 1,000
in Liquidation Preference of the 6 3/4% Preferred
Shares) held by such Holder. The amount of the
Liquidated Damages will increase by an additional
$2.50 per year per $1,000 in Liquidation Preference
of the 6 3/4% Preferred Shares with respect to any
subsequent period until any Registration Default has
been cured. In addition, Holders of 6 3/4% Preferred
Shares which are S-4 Registered Securities may
receive Liquidated Damages with respect to Common
Shares which are S-4 Registered Securities issued in
lieu of paying dividends in cash. The Liquidated
Damages amount per Common Share will be equal to the
Liquidated Damages per 6 3/4% Preferred Share,
divided by the Conversion Rate. All accrued
Liquidated Damages will be paid by the corporation,
to the extent permitted by applicable law, on each
Dividend Payment Date and, to the extent the net
dividend payable on such date may be paid through the
issuance of Common Shares, may be paid in Common
Shares (valued on the same basis as for the dividend
then
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payable). Following the cure of all Registration
Defaults, the accrual of Liquidated Damages will
cease. Notwithstanding anything to the contrary
herein contained, during any period, the corporation
will not be required to pay Liquidated Damages with
respect to more than one Registration Default.
(14) TRANSFER AND EXCHANGE. When a 6 3/4% Preferred Share
certificate is presented to the Transfer Agent with a
request to register the transfer of such 6 3/4%
Preferred Share or to exchange 6 3/4% Preferred
Shares for an equal number of 6 3/4% Preferred Shares
of other authorized denominations, the Transfer Agent
shall register the transfer or make the exchange as
requested if its reasonable requirements for such
transaction are met and such transfer or exchange is
in compliance with applicable laws or regulations.
(15) CERTAIN DEFINITIONS. As used in this paragraph 10 of
Article Fourth, the following terms shall have the
following meanings (and (1) terms defined in the
singular have comparable meanings when used in the
plural and vice versa, (2) "including" means
including without limitation, (3) "or" is not
exclusive and (4) an accounting term not otherwise
defined has the meaning assigned to it in accordance
with United States generally accepted accounting
principles as in effect on the Issue Date and all
accounting calculations will be determined in
accordance with such principles), unless the content
otherwise requires:
"Board of Directors" means the Board of Directors of
the corporation or any committee thereof duly
authorized to act on behalf of the Board.
"Business Day" means each day which is not a legal
holiday.
"Capital Stock" of any person means any and all
shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or
interests in (however designated) equity of such
person, including any Preferred Shares, but excluding
any debt securities convertible into or exchangeable
for such equity.
"Closing Price" means on any day the reported last
bid price on such day, or in case no sale takes place
on such day, the average of the reported closing bid
and asked prices on the principal national securities
exchange on which such stock is listed or admitted to
trading, or if not listed or admitted to trading on
any national securities exchange, the average of the
closing bid and asked prices as furnished by any
independent registered broker-dealer firm, selected
by the corporation for that purpose, in each case
adjusted for any stock split during the relevant
period.
"Default" means any event which is, or after notice
or passage of time or both would be, a Voting Rights
Triggering Event.
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"Holders" means the registered holders from time to
time of the 6 3/4% Preferred Shares and the
Depositary Shares.
"Liquidated Damages" means, with respect to any
6 3/4% Preferred Share, the additional amounts
payable pursuant to paragraph (13) of Paragraph 10
of Article Fourth hereof.
"Officers' Certificate" means a certificate signed by
two officers of the corporation.
"Person" means any individual, corporation,
partnership, joint venture, limited liability
company, association, joint-stock company, trust,
unincorporated organization, government or any agency
or political subdivision thereof or any other entity.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended.
"Subsidiary" means any corporation, association,
partnership, limited liability company or other
business entity of which more than 50% of the total
voting power of shares of Capital Stock or other
interests entitled (without regard to the occurrence
of any contingency) to vote in the election of
directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by
the corporation, the corporation and one or more
Subsidiaries or one or more Subsidiaries and any
partnership the sole general partner or the managing
partner of which are the corporation or any
Subsidiary or the only general partners of which are
the corporation and one or more Subsidiaries or one
or more Subsidiaries.
"Trading Day" means, in respect of any securities
exchange or securities market, each Monday, Tuesday,
Wednesday, Thursday and Friday, other than any day on
which securities are not traded on the applicable
securities exchange or in the applicable securities
market.
"Transfer Agent" means the transfer agent for the
6 3/4% Preferred Shares appointed by the corporation.
FIFTH: The number of directors of the corporation shall be fixed from
time to time by its Regulations and may be increased or decreased as therein
provided, but the number of directors shall in no event be fixed at less than
nine. The board of directors shall be divided into three classes, as nearly
equal in number as the then fixed number of directors permits, with the term of
office of one class expiring each year. At the annual meeting of shareholders in
1984, directors of the first class shall be elected to hold office for a term
expiring at the next succeeding annual meeting, directors of the second class
shall be elected to hold office for a term expiring at the second succeeding
annual meeting and directors of the third class shall be elected to hold office
for a term expiring at the third succeeding annual meeting. At the annual
meeting of shareholders in 1985 and at each annual meeting of shareholders
thereafter, the successors to
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that class of directors whose term then expires shall be elected to hold office
for a term expiring at the third succeeding annual meeting. In the event of any
increase in the number of directors of the corporation, the additional directors
shall be similarly classified in such a manner that each class of directors
shall be as equal in number as possible. In the event of any decrease in the
number of directors of the corporation, such decrease shall be effected in such
a manner that each class of directors shall be as equal in number as possible.
SIXTH:
1. (a) In addition to any affirmative vote required by law
or by these Amended Articles, and except as otherwise
expressly provided in paragraph 2 of this Article
Sixth:
(i) any merger or consolidation of the
corporation or of any Subsidiary (as
hereinafter defined) with (A) any Interested
Shareholder (as hereinafter defined) or (B)
any other corporation (whether or not itself
an Interested Shareholder) which is, or
after such merger or consolidation would be,
an Affiliate (as hereinafter defined) of an
Interested Shareholder; or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one
transaction or a series of transactions) to
or with any Interested Shareholder or any
Affiliate of any Interested Shareholder of
any assets of the corporation or of any
Subsidiary having an aggregate Fair Market
Value (as hereinafter defined) of $5,000,000
or more; or
(iii) the issuance or transfer by the corporation
or by any Subsidiary (in one transaction or
a series of transactions) of any securities
of the corporation or of any Subsidiary to
any Interested Shareholder or to any
Affiliate of any Interested Shareholder in
exchange for cash, securities or other
property (or combination thereof) having an
aggregate Fair Market Value of $5,000,000 or
more; or
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the
corporation proposed by or on behalf of an
Interested Shareholder or any Affiliate of
any Interested Shareholder; or
(v) any reclassification of securities
(including any reverse stock split), or
recapitalization of the corporation, or any
merger or consolidation of the corporation
with any Subsidiary or any other transaction
(whether or not with or into or otherwise
involving an Interested Shareholder) which
has the effect, directly or indirectly, of
increasing the proportionate share of the
outstanding shares of any class of equity or
convertible securities of the corporation or
of any Subsidiary which is directly or,
indirectly owned by any
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Interested Shareholder or any Affiliate of
any Interested Shareholder;
shall require the affirmative vote of the holders of
at least 80% of the then outstanding Common Shares
and Voting Preferred Shares of the corporation
entitled to a vote (the "Voting Shares"), voting as a
single class at a meeting of shareholders called for
such purpose. Such affirmative vote shall be required
notwithstanding that no vote may be required, or that
a lesser percentage may be specified, by law or in
any agreement with any national securities exchange
or otherwise.
(b) The term "Business Combination" as used in this
Article Sixth shall mean any transaction referred to
in any one or more of clauses (1) through (5) of
subparagraph (a) of this paragraph 1.
2. The provisions of paragraph 1 of this Article Sixth shall not
be applicable to any particular Business Combination, and such
Business Combination shall require only such affirmative vote
as is required by law and by any other provision of these
Amended Articles, if all of the conditions specified in either
of the following subparagraphs (a) or (b) are met:
(a) The Business Combination shall have been approved by
a majority of the Continuing Directors (as
hereinafter defined) of the corporation; provided,
however, that such approval shall be effective only
if obtained at a meeting at which a Continuing
Director Quorum (as hereinafter defined) is present.
(b) All of the following conditions shall have been met:
(1) The aggregate amount of (x) cash and (y) Fair Market
Value (determined as of the date of the consummation
of the Business Combination) of consideration other
than cash, to be received per share by holders of
Common Shares in such Business Combination shall be
at least equal to the highest amount determined under
subclauses (A), (B) and (C) below:
(A) the highest per share price (including any
brokerage commissions, transfer taxes and
soliciting dealers' fees, if any) paid by
the Interested Shareholder for any Common
Share acquired by it (i) within the two-year
period immediately prior to the first public
announcement of the proposal of the Business
Combination (the "Announcement Date") or
(ii) in the transaction in which it became
an Interested Shareholder, whichever is
higher;
(B) the Fair Market Value per Common Share on
the Announcement Date or on the date on
which the Interested Shareholder became an
Interested Shareholder (the "Determination
Date"), whichever is higher; and
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(C) the price per Common Share equal to the Fair
Market Value per Common Share determined
pursuant to subparagraph (b)(1) (B) above,
multiplied by the ratio of (i) the highest
per share price (including brokerage
commissions, transfer taxes and soliciting
dealers' fees, if any) paid by the
Interested Shareholder for any Common Share
acquired by it within the two-year period
immediately prior to the Announcement Date
to (ii) the Fair Market Value per Common
Share on the first day in such two-year
period on which the Interested Shareholder
acquired any Common Share.
(2) The aggregate amount of (x) cash and (y) Fair Market
Value (determined as of the date of the consummation
of the Business Combination) of consideration other
than cash, to be received per share by holders of any
class of Preferred Shares shall be at least equal to
the highest amount determined under subclauses (A),
(B), (C) and (D) below:
(A) the highest per share price (including
brokerage commissions, transfer taxes and
soliciting dealers' fee, if any) paid by the
Interested Shareholder for any shares of
such class of Preferred Shares acquired by
it (i) within the two-year period
immediately prior to the Announcement Date
or (ii) in the transaction in which it
became an Interested Shareholder, whichever
is higher;
(B) the highest preferential amount per share to
which the holders of such class of Preferred
Shares would be entitled in the event of any
voluntary or involuntary liquidation,
dissolution or winding up of the affairs of
the corporation regardless of whether the
Business Combination to be consummated
constitutes such an event;
(C) the Fair Market Value per share of such
class of Preferred Shares on the
Announcement Date or on the Determination
Date, whichever is higher; and
(D) the price per Preferred Share equal to the
Fair Market Value per share of such class of
Preferred Shares determined pursuant to
subparagraph (b)(2)(C) above, multiplied by
the ratio of (i) the highest per share price
(including brokerage commissions, transfer
taxes and soliciting dealers' fees, if any)
paid by the Interested Shareholder for any
shares of such class of Preferred Shares
acquired by it within the two-year period
immediately prior to the Announcement Date
to (ii) the Fair Market Value per share of
such class of Preferred Shares on the first
day in such two-year period on which the
Interested Shareholder acquired any share of
such class of Preferred Shares.
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The provisions of this subparagraph (b)(2) shall be
required to be met with respect to every class of
outstanding Preferred Shares, whether or not the
Interested Shareholder has previously acquired any
shares of a particular class of Preferred Shares.
(3) The consideration to be received by holders of Common
Shares or of a particular class of Preferred Shares
shall be in cash or in the same form as the
Interested Shareholder has previously paid for shares
of each such class of Common Shares or Preferred
Shares, respectively. If the Interested Shareholder
has paid for shares of any class of Common Shares or
Preferred Shares, respectively, with varying forms of
consideration, the form of consideration for such
class shall be either cash or that form used to
acquire the largest number of shares of such class
previously acquired by the Interested Shareholder.
(4) After such Interested Shareholder has become an
Interested Shareholder and prior to the consummation
of such Business Combination: (A) except as approved
by a majority of the Continuing Directors, there
shall have been no failure to declare and pay at the
regular date therefor any full quarterly dividends
(whether or not cumulative) on outstanding Preferred
Shares; (B) except as approved by a majority of the
Continuing Directors, there shall have been (i) no
reduction in the annual rate of dividends paid on
Common Shares (except as necessary to reflect any
subdivision of the Common Shares) and (ii) an
increase in such annual rate of dividends as
necessary to reflect any reclassification (including
any reverse stock split), recapitalization,
reorganization or any similar transaction which has
the effect of reducing the number of outstanding
Common Shares; and (C) such Interested Shareholder
shall not have become the beneficial owner of any
additional Common or Preferred Shares of the
corporation except as part of the transaction which
results in such Interested Shareholder becoming an
Interested Shareholder. The approval by a majority of
the Continuing Directors of any exception to the
requirements set forth in clauses (A) and (B) above
shall be effective only if obtained at a meeting at
which a Continuing Director Quorum is present.
(5) After such Interested Shareholder has become an
Interested Shareholder, such Interested Shareholder
shall not have received the benefit, directly or
indirectly (except proportionately as a shareholder),
of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax
advantages provided by the corporation, whether in
anticipation of or in connection with such Business
Combination or otherwise.
(6) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934
and the rules and regulations thereunder (or any
subsequent provisions amending or replacing such Act,
rules or
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regulations) shall be mailed to all shareholders of
the corporation at least 30 days prior to the
consummation of such Business Combination (whether or
not such proxy or information statement is required
to be mailed pursuant to such Act, rules, regulations
or subsequent provisions).
3. For the purposes of this Article Sixth:
(a) The term "person" shall mean any individual, firm,
partnership, corporation or other entity.
(b) The term "Interested Shareholder" shall mean any
person (other than the corporation or any Subsidiary
and other than any profit-sharing, employee stock
ownership or other employee benefit plan of the
corporation or of any Subsidiary or any trustee of or
fiduciary with respect to any such plan when acting
in such capacity) who or which:
(i) is the beneficial owner (as hereinafter
defined) of 10% or more of the outstanding
Voting Shares; or
(ii) is an Affiliate (as hereinafter defined) of
the corporation and at any time within the
two-year period immediately prior to the
date in question was the beneficial owner of
10% or more of the outstanding Voting
Shares; or
(iii) is an assignee of or has otherwise succeeded
to any outstanding Voting Shares which were
at any time within the two-year period
immediately prior to the date in question
beneficially owned by any Interested
Shareholder, if such assignment or
succession shall have occurred in the course
of a transaction or series of transactions
not involving a public offering within the
meaning of the Securities Act of 1933.
(c) A person shall be deemed the "beneficial owner" of
any Voting Shares:
(i) which such person or any of its Affiliates
or Associates (as hereinafter defined)
beneficially owns, directly or indirectly;
or
(ii) which such person or any of its Affiliates
or Associates has, directly or indirectly,
(A) the right to acquire (whether such right
is exercisable immediately or only after the
passage of time), pursuant to any agreement,
arrangement or understanding or upon the
exercise of conversion rights, exchange
rights, warrants or options, or otherwise,
or (B) the right to vote pursuant to any
agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or
indirectly, by any other person with which
such person or any of its Affiliates or
Associates has any agreement, arrangement or
understanding for
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the purpose of acquiring, holding, voting or
disposing of any Voting Shares.
(d) For the purposes of determining whether a person is
an Interested Shareholder pursuant to subparagraph
(b) of this paragraph 3, the number of Voting Shares
deemed to be outstanding shall include shares deemed
owned through application of subparagraph (c) of this
paragraph 3 but shall not include any other Voting
Shares which may be issuable pursuant to any
agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options,
or otherwise.
(e) The terms "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations
promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as in
effect on March 1, 1984.
(f) The term "Subsidiary" means any corporation of which
a majority of any class of equity security is owned,
directly, or indirectly, by the corporation;
provided, however, that for the purposes of the
definition of Interested Shareholder set forth in
subparagraph (b) of this paragraph 3, the term
"Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is owned,
directly or indirectly, by the corporation.
(g) The term "Continuing Director" means any member of
the board of directors of the corporation who is
unaffiliated with the Interested Shareholder and was
a member of the board of directors prior to the time
that the Interested Shareholder became an Interested
Shareholder, and any successor of a Continuing
Director who is unaffiliated with the Interested
Shareholder and is either recommended or elected to
succeed a Continuing Director by a majority of
Continuing Directors, provided that such
recommendation or election shall be effective only if
made at a meeting at which a Continuing Director
Quorum is present.
(h) The term "Continuing Director Quorum" means that
number of Continuing Directors constituting at least
two-thirds of the whole authorized number of
directors of the corporation, but in any event not
fewer than six Continuing Directors, capable of
exercising the powers conferred upon them under the
provisions of these Amended Articles or the Amended
Regulations of the corporation or by law.
(i) The term "Fair Market Value" means: (1) in the case
of shares, the highest closing sale price of a share
during the 30-day period immediately preceding the
date in question on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if the sale price
of such share is not quoted on the Composite Tape, on
the New York Stock Exchange, or, if such shares are
not listed on such Exchange, on the principal United
States securities
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exchange registered under the Securities Exchange Act
of 1934 on which such shares are listed, or, if such
shares are not listed on any such exchange, the
highest closing bid quotation with respect to a share
during the 30-day period preceding the date in
question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any
system then in use, or, if no such quotations are
available, the fair market value on the date in
question of such share as determined by the board of
directors of the corporation in good faith; and (2)
in the case of property other than cash or shares,
the fair market value of such property on the date in
question as determined in good faith by a majority of
Continuing Directors, provided that such
determination shall be effective only if made at a
meeting at which a Continuing Director Quorum is
present.
(j) The term "Common Shares" shall mean Common Shares of
the corporation or, where appropriate for purposes of
subparagraph (b) of paragraph 2 of this Article
Sixth, of Cincinnati Bell Inc. prior to July 1, 1983.
(k) The term "Preferred Shares" shall mean Voting
Preferred Shares, Non-Voting Preferred Shares and any
other class of Preferred Shares which may from time
to time be authorized in or by these Amended Articles
and which by the terms of its issuance is
specifically designated "Preferred Shares" for
purposes of this Article Sixth.
(l) In the event of any Business Combination in which the
corporation survives, the phrase "consideration,
other than cash, to be received" as used in
subparagraphs (b)(1) and (2) of paragraph 2 of this
Article Sixth shall include Common Shares and/or any
other Voting Shares retained by the holders of such
shares.
4. Nothing contained in this Article Sixth shall be construed to
relieve any Interested Shareholder from any fiduciary
obligation imposed by law.
5. Notwithstanding any other provisions of these Amended Articles
or the Amended Regulations of the corporation (and
notwithstanding that a lesser percentage may be specified by
law, these Amended Articles or the Amended Regulations of the
corporation), the affirmative vote of the holders of at least
80% of the then outstanding Voting Shares, voting as a single
class at a meeting of shareholders called for such purpose,
shall be required to amend or repeal, or adopt any provisions
of these Amended Articles inconsistent with, this Article
Sixth; provided, however, that if the board of directors of
the corporation has recommended such amendment, repeal or
adoption, and if, as of the record date for the determination
of shareholders entitled to vote thereon, no person is known
by the board of directors to be an Interested Shareholder,
then the affirmative vote of the holders of only two-thirds of
the then outstanding Voting Shares, voting as a single class
at a meeting of shareholders called for such purpose, shall be
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required to amend or repeal, or adopt any provisions
inconsistent with, this Article Sixth.
SEVENTH: The corporation, by action of the board of directors and
without action by the shareholders, may purchase its shares of any class for the
purposes and to the extent permitted by law.
EIGHTH: Notwithstanding any provision of the General Corporation Law of
Ohio now or hereafter in effect, no shareholder shall have the right to vote
cumulatively in the election of directors. Without limiting the generality of
the preceding sentence, no shareholder shall have the right at any time in the
election of directors either to give one candidate as many votes as the number
of directors to be elected multiplied by the number of his votes equals or to
distribute his votes on the same principle among two or more candidates.
NINTH: These Amended Articles of Incorporation supersede and take the
place of the existing Amended Articles of Incorporation.
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EXHIBIT A
FORM OF THE 6 3/4 PREFERRED SHARES
FACE OF SECURITY
Certificate Number Number of Shares
Of Convertible Preferred Shares
[ ] [ ]
CUSIP NO: [ ]
6 3/4% Cumulative Convertible
(without par value) (liquidation preference $ 1,000
per share of 6 3/4% Preferred Shares)
of
Cincinnati Bell Inc.
Cincinnati Bell Inc., an Ohio corporation (the "corporation"), hereby
certifies that [ ] (the "Holder") is the registered owner of fully paid and
non-assessable preferred securities of the corporation designated the 6 3/4%
Cumulative Convertible Preferred Shares (without par value) (liquidation
preference $1,000 per share of the 6 3/4% Preferred Shares) (the "6 3/4%
Preferred Shares"). The shares of the 6 3/4% Preferred Shares are transferable
on the books and records of the Registrar, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form
for transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the 6 3/4% Preferred Shares represented hereby are
issued and shall in all respects be subject to the provisions of the Amended
Articles of Incorporation of the corporation, as the same may be amended from
time to time (the "Articles"). Capitalized terms used herein but not defined
shall have the meaning given them in the Articles. The corporation will provide
a copy of the Articles to a Holder without charge upon written request to the
corporation at its principal place of business.
Reference is hereby made to select provisions of the 6 3/4% Preferred
Shares set forth on the reverse hereof, and to the Articles, which select
provisions and the Articles shall for all purposes have the same effect as if
set forth at this place.
Upon receipt of this certificate, the Holder is bound by the Articles
and is entitled to the benefits thereunder.
Unless the Transfer Agent's Certificate of Authentication hereon has
been properly executed, these shares of the 6 3/4% Preferred Shares shall not be
entitled to any benefit under the Articles or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the corporation has executed this certificate this
[ ] day of [ ], [ ].
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CINCINNATI BELL INC.
By:
Name:
Title:
[Seal]
By:
Name:
Title:
TRANSFER AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the 6 3/4% Preferred Shares referred to in the within
mentioned Articles.
Dated: [ ], [ ]
[THE FIFTH THIRD BANK]
as Transfer Agent,
By:
Authorized Signatory
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REVERSE OF SECURITY
Dividends on each share of the 6 3/4% Preferred Shares shall be payable
at a rate per annum set forth in the face hereof or as provided in the Articles.
The shares of the 6 3/4% Preferred Shares shall be redeemable as
provided in the Articles. The shares of the 6 3/4% Preferred Shares shall be
convertible into the corporation's Common Shares in the manner and according to
the terms set forth in the Articles.
As required under Ohio law, the corporation shall furnish to any Holder
upon request and without charge, a full summary statement of the designations,
voting rights preferences, limitations and special rights of the shares of each
class or series authorized to be issued by the corporation so far as they have
been fixed and determined and the authority of the Board of Directors to fix and
determine the designations, voting rights, preferences, limitations and special
rights of the class and series of shares of the corporation.
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EXHIBIT B
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Convertible
Preferred Shares)
The undersigned hereby irrevocably elects to convert (the "Conversion")
shares of the 6 3/4% Cumulative Convertible Preferred Shares (the "6 3/4%
Preferred Shares"), represented by stock certificate No(s).-(the "6 3/4%
Preferred Share Certificates") into shares of common stock ("Common Shares") of
Cincinnati Bell Inc. (the "corporation") according to the conditions of the
Amended Articles of Incorporation of the corporation (the "Articles"), as of the
date written below. If shares are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates.* No fee will be
charged to the holder for any conversion, except for transfer taxes, if any. A
copy of each 6 3/4% Preferred Share Certificate is attached hereto (or evidence
of loss, theft or destruction thereof).
The undersigned represents and warrants that all offers and sales by
the undersigned of the shares of Common Shares issuable to the undersigned upon
conversion of the 6 3/4% Preferred Shares shall be made pursuant to registration
of the Common Shares under the Securities Act of 1933 (the "Act"), or pursuant
to any exemption from registration under the Act.
Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Article Fourth and the 6 3/4% Preferred Shares, agrees to
be bound by the terms of the Registration Rights Agreement.
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Capitalized terms used but not defined herein shall have the meanings
ascribed thereto in or pursuant to the Articles.
Date of Conversion:
Applicable Conversion Rate:
Number of shares of Convertible
Preferred Shares to be Converted:
Number of shares of
Common Shares to be Issued
Signature:
Name:
Address:**
Fax No.:
* The corporation is not required to issue shares of Common Shares until
the original 6 3/4% Preferred Share Certificate(s) (or evidence of
loss, theft or destruction thereof) to be converted are received by the
corporation or its Transfer Agent. The corporation shall issue and
deliver shares of Common Shares to an overnight courier not later than
three business days following receipt of the original 6 3/4% Preferred
Share Certificate(s) to be converted.
** Address where shares of Common Shares and any other payments or
certificates shall be sent by the corporation.
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