<PAGE> 1
SCHEDULE 14C
(RULE 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
File by the Registrant [X]
File by Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Information Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14c-5(d)(2))
[ ] Definitive Information Statement
</TABLE>
RAMSAY YOUTH SERVICES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant As Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
RAMSAY YOUTH SERVICES, INC.
INFORMATION STATEMENT
February 4, 1999
To the Stockholders of
RAMSAY YOUTH SERVICES, INC.:
NOTICE IS HEREBY GIVEN to the stockholders of Ramsay Youth
Services, Inc., a Delaware corporation (the "Company"), pursuant to Section
228(d) of the General Corporation Law of the State of Delaware (the "DGCL"),
that the holders of more than a majority of the issued and outstanding shares of
common stock, par value $.01 per share (the "Common Stock") of the Company, who
were entitled to cast more than a majority of the total number of votes entitled
to be cast by the holders of all of the issued and outstanding shares of Common
Stock, by written consent, have approved an amendment to the Company's Restated
Certificate of Incorporation effecting a one-for-three reverse stock split. This
amendment will become effective on the date of the filing of an amendment to the
Restated Certificate of Incorporation of the Company with the Secretary of State
of Delaware, which filing is expected to take place on, or shortly after, March
1, 1999.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO
SEND US A PROXY.
AMENDMENT TO RESTATED
CERTIFICATE OF INCORPORATION
SUMMARY OF TERMS OF REVERSE STOCK SPLIT
The Board of Directors of the Company has concluded that it
would be advisable to amend (the "Amendment") the Company's Restated Certificate
of Incorporation to (i) effect a one-for-three reverse stock split (the "Reverse
Stock Split") of the Company's issued and outstanding shares of Common Stock and
(ii) provide for the payment of cash in lieu of fractional shares otherwise
issuable in connection with the Reverse Stock Split.
<PAGE> 3
2
At a meeting of the Board of Directors of the Company, the
Board considered and unanimously passed resolutions approving the Amendment and
recommending that the Amendment be submitted to the stockholders of the Company
for their approval, as required by the DGCL. As permitted by the DGCL, by
written consent, the holders of the requisite number of shares of the Company's
Common Stock entitled to vote on the Amendment have approved the Amendment (see
"Stockholder Approval" below). The Amendment will become effective on the date
of the filing of the Amendment with the Secretary of State of Delaware (the
"Effective Date"). On the Effective Date, automatically and without further
action on the part of the Company or any of the stockholders, each three shares
of issued and outstanding Common Stock will be converted and reclassified into
one share of common stock, par value $.01 per share (the "New Common Stock").
The Company has no other class of capital stock which is currently issued and
outstanding. To the extent that stockholders hold a number of shares of Common
Stock which is not evenly divisible by three, holders will receive cash in lieu
of any fractional shares that would otherwise be created by the Reverse Stock
Split (see "Exchange of Stock Certificates and Payment in Lieu of Fractional
Shares" below).
Except to the very limited extent for those stockholders who
receive cash in lieu of fractional shares, the Reverse Stock Split will not
affect any stockholder's proportionate equity interest in the Company.
The Amendment approved by the Board of Directors and the
requisite holders of shares of the Company's Common Stock is set forth as
Appendix A to this Information Statement.
STOCKHOLDER APPROVAL
The DGCL requires the approval of the holders of a majority of
the issued and outstanding shares of Common Stock in order to adopt the
Amendment.
The holders of approximately 61% of the number of issued and
outstanding shares of Common Stock have approved the Amendment by written
consent.
PRINCIPAL EFFECTS OF THE AMENDMENT
Upon filing of the Amendment with the Secretary of State of
Delaware:
1. The Reverse Stock Split will result in each three presently
issued and outstanding shares of Common Stock being automatically converted and
reclassified into one share of New Common Stock. As a result of the Reverse
Stock Split, the number of outstanding shares of Common Stock will be reduced
from 26,657,076 to approximately 8,885,692 shares of New Common Stock (subject
to minor adjustments due to the repurchase of fractional shares). No further
action on the part of any stockholder will be necessary to effect this
conversion and reclassification. Stock certificates representing the Common
Stock will automatically be deemed to represent the appropriate number of shares
of New Common Stock (and, as applicable, the right to receive cash in lieu of
any fractional share resulting from the Reverse Stock Split).
2. As a result of the Reverse Stock Split, the public trading
price for the Common Stock on the National Association of Securities Dealers
National Market System
<PAGE> 4
3
(under the symbol "RYOU") will increase to reflect the reduced number of shares
of Common Stock issued and outstanding. THERE CAN BE NO ASSURANCE THAT THE
PUBLIC TRADING PRICE OF THE COMMON STOCK WILL INCREASE TO THREE TIMES THE MARKET
PRICE PRIOR TO THE EFFECTIVE DATE, THAT THE PUBLIC TRADING PRICE OF THE COMMON
STOCK WILL REMAIN AT ITS INCREASED TRADING PRICE FOLLOWING THE EFFECTIVENESS OF
THE REVERSE STOCK SPLIT OR THAT LIQUIDITY FOR THE COMPANY'S STOCKHOLDERS WILL
NOT BE ADVERSELY AFFECTED BY THE REDUCED NUMBER OF SHARES WHICH WILL BE STANDING
AFTER THE REVERSE STOCK SPLIT.
3. Fractional shares which would otherwise be issued as a
result of the Reverse Stock Split will be purchased by the Company for cash.
4. The Amendment will not have any affect on the par value of
the Common Stock. As a result of the Reverse Stock Split, a proportionate amount
of capital set forth on the Company's balance sheet will be transferred from the
Common Stock Stated Capital Account to the Paid-In Surplus account.
The New Common Stock issued pursuant to the Reverse Stock
Split will be fully paid and non-assessable. The voting rights and other rights
that accompany the Common Stock will not be altered by the Amendment. Except to
the very limited extent for those stockholders who receive cash in lieu of
fractional shares, the Reverse Stock Split will not affect any stockholder's
proportionate equity interest in the Company.
The Company is presently authorized to issue 30,000,000 shares
of Common Stock, 800,000 shares of Class A Preferred Stock and 2,000,000 shares
of Class B Preferred Stock. At the close of business on January 31, 1999,
26,657,076 shares of Common Stock were issued and outstanding. The Company has
no other class of capital stock which is currently issued and outstanding. The
following table illustrates the principal effects of the Amendment on the Common
Stock and on certain financial data of the Company:
<TABLE>
<CAPTION>
As of Adjusted for
January 31, 1999 Reverse Split
---------------- -------------
(unaudited) (unaudited)
<S> <C> <C>
COMMON STOCK:
- -------------
Authorized 30,000,000 30,000,000
Issued 27,238,626 9,079,542**
Outstanding 26,657,076 8,885,692**
Issuable pursuant to outstanding options and other
convertible securities 4,039,008 1,346,336
Par value per share $ .01 $ .01
CLASS A PREFERRED STOCK:
- ------------------------
Authorized 800,000 800,000
Issued and outstanding 0 0
</TABLE>
<PAGE> 5
4
<TABLE>
<CAPTION>
As of Adjusted for
January 31, 1999 Reverse Split
---------------- -------------
(unaudited) (unaudited)
<S> <C> <C>
Available for future issuance 486,500 486,500
Par value per share $1.00 $1.00
CLASS B PREFERRED STOCK:
- ------------------------
Authorized 2,000,000 2,000,000
Issued and outstanding 0 0
Available for future issuance 1,610,346 1,610,346
Par value per share $1.00 $1.00
OTHER EFFECTS OF THE AMENDMENT ON
CERTAIN BALANCE SHEET ACCOUNTS:
- ---------------------------------
STOCKHOLDERS' EQUITY
Class A Preferred Stock 0 0
Class B Preferred Stock 0 0
Common Stock 272,386* 90,795**
Additional paid-in capital 125,895,854* 126,077,445**
</TABLE>
* Estimated based on unaudited balances as of December 31, 1998.
** Estimated based on unaudited balances as of December 31, 1998 and subject
to further adjustments due to the repurchase of fractional shares.
The Common Stock is currently registered under Section 12(g)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and as
a result, the Company is subject to the periodic reporting and other
requirements of the Exchange Act. The Amendment will not affect the registration
of the Common Stock under the Exchange Act or the listing of the Common Stock on
the National Association of Securities Dealers National Market System, and the
Company has no present intention of terminating the registration under the
Exchange Act in order to become a "private" company.
Stockholders have no right under the DGCL or under the
Company's Restated Certificate of Incorporation or By-laws to dissent from the
Amendment, to dissent from the payment of cash in lieu of issuing fractional
shares or to appraisal rights.
REASONS FOR THE AMENDMENT
- -------------------------
The Board of Directors believes that the current per share
price of the Common Stock and the number of shares outstanding have had a
negative effect on the marketability of the existing shares, the amount and
percentage of transaction costs paid by individual stockholders, and the
potential ability of the Company to raise capital by issuing additional shares.
The Board of Directors believes there are several reasons for these effects, as
summarized below.
<PAGE> 6
5
The Board of Directors believes that the current price per
share of the Company's Common Stock has a tendency to diminish its effective
marketability because of the reluctance of many brokerage firms to recommend
lower-priced stocks to their clients. Additionally, the policies and practices
of a number of brokerage firms tend to discourage individual brokers within
those firms from handling lower-priced stocks. Some of these policies and
practices pertain to the payment of brokerage commissions and to time consuming
procedures that operate to render the handling of lower-priced stocks
unattractive to brokers from an economic perspective. The structure of brokerage
commissions also tends to have an adverse affect upon holders of lower-priced
stocks since the brokerage commission payable on the sale of a lower-priced
stock generally represents a higher percentage of the sales price than the
commission on a relatively higher-priced stock. The foregoing factors adversely
affect not only the liquidity of the Common Stock, but also the Company's
ability to raise additional capital through a sale of equity securities.
The Board of Directors believes that the decrease in the
number of shares of Common Stock outstanding as a consequence of the Reverse
Stock Split, and the anticipated corresponding increased price per share, will
stimulate interest in the Company's Common Stock and possibly promote greater
liquidity for the Company's stockholders with respect to those shares presently
held by them. However, the possibility does exist that this liquidity could be
adversely affected by the reduced number of shares which will be outstanding
after the Reverse Stock Split.
The Board of Directors also believes that the Reverse Stock
Split will result in a price level for the shares that should mitigate the
policies and practices on the part of brokerage firms referred to above and
diminish the adverse affect of brokerage commissions on the potential market for
the Company's shares. However, there can be no assurance that the Reverse Stock
Split will achieve the desired results which have been outlined above, nor can
there be any assurance that any increase in the price per share of the Common
Stock resulting from the Reverse Stock Split will be sustained for any prolonged
period of time.
The Board of Directors is not aware of any present efforts by
any person to accumulate Common Stock or to obtain control of the Company and
the Reverse Stock Split is not intended to be an anti-takeover device. The
Amendment is intended simply to enhance the image of the Company, its corporate
flexibility and to price the stock in a price range more acceptable to the
brokerage community.
EXCHANGE OF STOCK CERTIFICATES AND PAYMENT IN LIEU OF FRACTIONAL SHARES
- -----------------------------------------------------------------------
As soon as practicable after the Effective Date, stockholders
of record on the Effective Date will be furnished with the necessary materials
and instructions for the surrender and exchange of their certificates
representing shares of existing Common Stock. One share of New Common Stock will
be issued in exchange for three presently issued and outstanding shares of the
Company's Common Stock. Beginning on the Effective Date, each certificate
representing shares of the Company's Common Stock will be deemed for all
corporate purposes to evidence ownership of shares of New Common Stock. To the
extent a stockholder holds a number of shares not evenly divisible by three, the
Company will pay cash for such fractional interests as described below.
<PAGE> 7
6
No scrip or fractional certificates will be issued in
connection with the Reverse Stock Split. On the Effective Date, stockholders who
would be entitled to receive fractional shares because they hold a number of
shares of Common Stock not evenly divisible by three, will be entitled, in lieu
thereof, to a cash payment at a price equal to the average closing price of the
Company's Common Stock as reported on the National Association of Securities
Dealers National Market System for the 20 trading days immediately preceding the
Effective Date multiplied by the number of shares of existing Common Stock which
have not been reclassified into shares of New Common Stock, upon presentation to
the Company's transfer agent of certificates representing such shares.
The Company will either deposit sufficient cash with its
transfer agent or set aside sufficient cash for the purchase of fractional
interests. STOCKHOLDERS SHOULD NOT SUBMIT ANY STOCK CERTIFICATES TO THE COMPANY
OR THE COMPANY'S TRANSFER AGENT UNTIL REQUESTED TO DO SO.
The ownership of a fractional interest will not give the
holder thereof any voting, dividend or other rights except the right to receive
payment therefor as described above. No service charge will be payable by
stockholders in connection with the exchange of certificates or the issuance of
cash for fractional interests, all of which costs will be borne and paid by the
Company.
EFFECT ON OUTSTANDING OPTIONS AND WARRANTS
- ------------------------------------------
The Company currently has outstanding options issued pursuant
to stock option plans of the Company and outstanding warrants which are
exercisable into shares of Common Stock of the Company (the options and warrants
are hereinafter referred to collectively as the "Convertible Securities"). The
provisions of these Convertible Securities provide that in the event of a
decrease in the number of outstanding shares of the Company's Common Stock, the
number of shares of stock into which the Convertible Securities may be exercised
shall be proportionately reduced and the applicable exercise price per share
shall be proportionately increased. Accordingly, on the Effective Date, the
aggregate number of shares of New Common Stock issuable pursuant to outstanding
Convertible Securities will be decreased by dividing the number of shares
obtainable on the Effective Date by three, and the applicable exercise price per
share of New Common Stock issuable pursuant to outstanding Convertible
Securities will be increased by multiplying the applicable exercise price per
share on the Effective Date by three.
FEDERAL INCOME TAX CONSEQUENCES
- -------------------------------
A summary of the federal income tax consequences of the
Reverse Stock Split is set forth below. The following discussion is based upon
present federal tax laws and does not purport to be a complete discussion of the
consequences of the Reverse Stock Split. This discussion is for general
information only and does not discuss consequences which may apply to special
classes of taxpayers (e.g., non-resident aliens, broker-dealers, or insurance
companies). Accordingly, stockholders are advised to consult their own advisors
for more detailed information regarding the effects of the Reverse Stock Split
on their individual tax status.
<PAGE> 8
7
The Reverse Stock Split will be treated as a tax free
recapitalization to the Company and as a tax free exchange to its stockholders
to the extent that shares of presently issued and outstanding Common Stock are
exchanged for shares of New Common Stock.
Stockholders who receive cash in lieu of fractional shares
will recognize a gain or loss for federal income tax purposes measured by the
difference between the amount of cash received and the basis of such stock
allocable to such fractional shares. Stockholders who do not receive any cash
for their holdings will not recognize any gain or loss for federal income tax
purposes as a result of the Reverse Stock Split.
The shares of New Common Stock issued to each stockholder will
have an aggregate basis for computing gain or loss equal to the aggregate basis
of shares of Common Stock held by such stockholder immediately prior to the
Reverse Stock Split, reduced by the amount of proceeds, if any, received from
the sale of fractional interests and increased by any gain recognized on that
sale.
A stockholder's holding period for shares of New Common Stock
will include the holding period for shares of Common Stock exchanged therefor,
provided that the shares were capital assets held by such stockholder.
INFORMATION CONCERNING CERTAIN STOCKHOLDERS
- -------------------------------------------
Certain information with respect to (i) the stockholders of
the Company (including any "group" as that term is used in Section 13(d)(3) of
the Exchange Act) who, to the knowledge of the Board of Directors, owned
beneficially more than five percent (5%) of any class of the outstanding voting
securities of the Company as of January 1, 1999, (ii) each director of the
Company who owned beneficially any shares of voting securities of the Company as
of January 31, 1999, and (iii) all directors and officers of the Company as a
group, is set forth in the following table. This information has been provided
to the Company by the persons named below. Except as indicated in the footnotes
to the table, all of such shares are owned with sole voting and investment
power, and all of the information set forth in the table is stated prior to the
adjustments which will be effected as a result of the Reverse Stock Split.
<TABLE>
<CAPTION>
NAME AND ADDRESS TITLE NUMBER OF PERCENTAGE
BENEFICIAL OWNER OF CLASS SHARES OWNED (1) OF CLASS (1)
- ---------------- -------- ---------------- ------------
<S> <C> <C> <C>
Paul J. Ramsay Common 16,640,562 (2) 61.37%
Paul Ramsay Group
154 Pacific Highway
St. Leonards, NSW
Australia
Paul Ramsay Hospitals Pty. Limited Common 16,557,812 (3) 61.21%
c/o Haythe & Curley
237 Park Avenue
New York, New York 10017
</TABLE>
<PAGE> 9
8
<TABLE>
<S> <C> <C> <C>
Paul Ramsay Holdings Pty. Limited Common 14,163,073 (3) 52.64%
c/o Haythe & Curley
237 Park Avenue
New York, New York 10017
Ramsay Holdings HSA Limited Common 2,719,056 (3) 10.20%
c/o Haythe & Curley
237 Park Avenue
New York, New York 10017
Heartland Advisors, Inc. Common 1,779,672 (4) 6.68%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
Luis E. Lamela Common 1,744,957 (5) 6.41%
One Alhambra Plaza, Suite 750
Coral Gables, Florida 33134
Dauphin Capital Partners I, LP Common 1,333,334 (6) 5.00%
1921 W. Joppa Road
Baltimore, Maryland 21204
Aaron Beam, Jr. Common 52,505 (7) *
Marcio C. Cabrera Common 6,667 (8) *
Bert G. Cibran Common 50,833 (9) *
Isabel M. Diaz Common 82,432 (10) *
Peter J. Evans Common 66,083 (11) *
Thomas M. Haythe Common 91,350 (12) *
Jorge L. Rico Common 6,667 (13) *
Steven J. Shulman Common 39,417 (14) *
Michael S. Siddle Common 42,750 (15) *
All directors and executive
officers as a group
(11 persons) Common 18,824,223 (2)(5) 67.36%
(7)(8)(9)(10)
(11)(12)(13)
(14)(15)
</TABLE>
- -------------------
<PAGE> 10
9
* Indicates ownership percentage of less than one percent (1%).
(1) Includes all shares that each named person is entitled to receive within
60 days, through the exercise of any option, warrant, conversion right,
or similar arrangement. Such shares are deemed to be owned and
outstanding by such person individually for purposes of calculating the
number of shares owned and the percentage of class for each such named
person, but are not deemed outstanding for purposes of such calculations
for any other named person.
(2) Mr. Ramsay's beneficial ownership of Common Stock consists of (i) 17,750
shares of Common Stock owned directly by Mr. Ramsay, (ii) 65,000 shares
of Common Stock issuable upon the exercise of exercisable options owned
directly by Mr. Ramsay, (iii) 2,719,056 shares of Common Stock
beneficially owned by Ramsay Holdings HSA Limited ("Ramsay Holdings"),
(iv) 14,163,073 shares of Common Stock beneficially owned by Paul Ramsay
Holdings Pty. Limited ("Holdings Pty."), which includes all shares
beneficially owned by Ramsay Holdings, and (v) 16,557,812 shares of
Common Stock beneficially owned by Paul Ramsay Hospitals Pty. Limited
("Hospitals Pty."), which includes all shares beneficially owned by
Ramsay Holdings and Holdings Pty. The shares beneficially owned by Ramsay
Holdings consist of 2,719,056 shares of Common Stock owned of record by
Ramsay Holdings. The shares beneficially owned by Holdings Pty. consist
of 11,194,017 shares of Common Stock owned of record by Holdings Pty.,
250,000 shares of Common Stock issuable upon the exercise of exercisable
warrants to purchase shares of Common Stock held by Holdings, Pty. and
the 2,719,056 shares of Common Stock beneficially owned by Ramsay
Holdings. The shares beneficially owned by Hospitals Pty. consist of
2,253,073 shares of Common Stock owned of record by Hospitals Pty.,
141,666 shares of Common Stock issuable upon the exercise of exercisable
warrants to purchase shares of Common Stock held by Hospitals Pty. and
the 14,163,073 shares of Common Stock beneficially owned by Holdings Pty.
(3) These shares are included in the beneficial ownership of Paul J. Ramsay
and are included in footnote (2) above.
(4) Information as to the holdings of Heartland Advisors, Inc. ("HAI") is
based upon a report on Schedule 13G filed with the Securities and
Exchange Commission. Such report indicates that HAI owned 1,169,600
shares with sole voting power and 1,577,900 shares with sole dispositive
power. Such report indicates that HAI is an investment adviser registered
under the Investment Advisers Act of 1940.
(5) Includes 115,000 shares of Common Stock issuable upon the exercise of
exercisable options to purchase shares of Common Stock held by Mr. Lamela
and 450,045 shares of Common Stock issuable upon the exercise of
exercisable warrants to purchase shares of Common Stock held by Mr.
Lamela.
(6) Information as to the holdings of Dauphin Capital Partners I, LP
("Dauphin") is based upon a report on Schedule 13D filed with the
Securities and Exchange Commission. Such report indicates that Dauphin
owned 1,333,334 shares with sole voting power and sole dispositive power.
<PAGE> 11
10
(7) Includes 23,333 shares of Common Stock issuable upon the exercise of
currently exercisable options to purchase shares of Common Stock held by
Mr. Beam.
(8) Represents 6,667 shares of Common Stock issuable upon the exercise of
currently exercisable options to purchase shares of Common Stock held by
Mr. Cabrera.
(9) Represents 50,000 shares of Common Stock issuable upon the exercise of
exercisable options to purchase shares of Common Stock held by Mr. Cibran
and 833 shares of Common Stock issuable upon the exercise of currently
exercisable warrants to purchase shares of Common Stock held by Mr.
Cibran.
(10) Includes 6,667 shares of Common Stock issuable upon the exercise of
exercisable options to purchase shares of Common Stock held by Ms. Diaz
and 50,788 shares of Common Stock issuable upon the exercise of
exercisable warrants to purchase shares of Common Stock held by Ms. Diaz.
(11) Includes 48,333 shares of Common Stock issuable upon the exercise of
currently exercisable options to purchase shares of Common Stock held by
Mr. Evans.
(12) Includes 5,000 shares of Common Stock held in a Keough Plan for the
benefit of Mr. Haythe and 25,000 shares of Common Stock issuable upon the
exercise of currently exercisable options to purchase shares of Common
Stock held by Mr. Haythe.
(13) Represents 6,667 shares of Common Stock issuable upon the exercise of
currently exercisable options to purchase shares of Common Stock held by
Mr. Rico.
(14) Includes 25,667 shares of Common Stock issuable upon the exercise of
currently exercisable options to purchase shares of Common Stock held by
Mr. Shulman.
(15) Includes 25,000 shares of Common Stock issuable upon the exercise of
currently exercisable options to purchase shares of Common Stock held by
Mr. Siddle.
By Order of the Board of Directors
Paul J. Ramsay
Chairman of the Board
<PAGE> 12
Appendix A
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
--------------------------------------------------
The Restated Certificate of Incorporation of the
Company shall be amended as follows:
1. The Restated Certificate of Incorporation of the
Company shall be amended by deleting the first sentence of
Paragraph (4) in its entirety and substituting in lieu thereof
the following:
"(4) The total number of shares of stock of which the
Corporation shall have the authority to issue is
Thirty-Two Million Eight Hundred Thousand (32,800,000)
shares, of which Thirty Million (30,000,000) shares,
par value $.01 per share, amounting in the aggregate to
Three Hundred Thousand Dollars ($300,000), shall be
Common Stock; Eight Hundred Thousand (800,000) shares,
par value $1.00 per share, amounting in the aggregate
to Eight Hundred Thousand Dollars ($800,000), shall be
Class A Preferred Stock; and Two Million (2,000,000)
shares, par value $1.00 per share, amounting in the
aggregate to Two Million Dollars ($2,000,000), shall be
Class B Preferred Stock."
On the date that this amendment is filed with the
Secretary of State of the State of Delaware (the
"Effective Time"), this amendment shall become
effective and each three shares of common stock, $.01
par value (the "Old Common Stock"), of the Company
issued and outstanding or held in treasury immediately
prior to the Effective Time will automatically be
reclassified into one share of common stock, $.01 par
value (the "Common Stock"). No fractional shares will
be issued and, in lieu thereof, each holder of shares
of Old Common Stock, whose aggregate shares of Old
Common Stock held in one name or account immediately
prior to the Effective Time are fewer than three or not
evenly divisible by three shall be entitled to receive
cash from the Company for the resulting fractional
share interest in an amount equal to the product of (i)
the average closing price of the Old Common Stock on
the National Association of Securities Dealers National
Market System for the 20 trading days immediately
preceding the Effective Time multiplied by (ii) the
number of shares of Old Common Stock held by such
holder immediately prior to the Effective Time and
which have not been reclassified into shares of Common
Stock.
