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CERTIFICATE OF INCORPORATION
OF NEXTEL COMMUNICATIONS, INC.
1. The name of the Corporation is:
Nextel Communications, Inc.
2. The address of its registered office in the State of Delaware is
Corporation Service Company, 1013 Centre Road, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is Corporation
Service Company.
3. The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.
4. The total authorized number of shares of all classes of capital stock
which the Corporation has authority to issue is 2,233,883,948 shares divided
into six classes as follows:
2,060,000,000 shares of Class A Common Stock of the par value of $0.001
per share;
100,000,000 shares of Class B Non-Voting Common Stock of the par value
of $0.001 per share;
26,941,933 shares of Class A Convertible Redeemable Preferred Stock of
the par value of $.01 share;
82 shares of Class B Convertible Preferred Stock of the par value of
$.01 share;
26,941,933 shares of Class C Convertible Redeemable Preferred Stock of
the par value of $.01 share; and
20,000,000 shares of Preferred Stock of the par value of $0.01 per
share.
Common Stock
1. Rights Generally. Except as provided herein, all shares of Class A
Common Stock ("Voting Common") and Class B Non-Voting Common Stock ("Non-Voting
Common") (together, "Common Stock") will be identical and entitle the holders
thereof to the same rights and privileges.
2. Dividends. Whenever dividends upon Preferred Stock at the time
outstanding, to the extent of any preference to which such stock is entitled,
shall have been paid in full, or declared and set apart for payment, for all
past dividend periods, and after the
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provisions for any sinking or purchase fund or funds for any series of
Preferred Stock shall have been complied with, the Board of Directors may
declare and pay dividends on Common Stock, payable in cash, or otherwise,
and the holders of shares of Preferred Stock shall not be entitled to share
therein, subject to the provisions of the resolution or resolutions
creating any series of Preferred Stock, provided that, if dividends are
declared on the Common Stock which are payable in shares of Common Stock,
dividends will be declared which are payable at the same rate on both
classes of Common Stock, dividends payable in shares of Voting Common will
be payable to holders of Voting Common and dividends payable in shares of
Non-Voting Common will be payable to holders of Non-Voting Common.
3. Liquidation. In the event of any liquidation, dissolution, or winding up
of the Corporation or upon the distribution of the assets of the
Corporation, all assets and funds of the Corporation remaining, after the
payment to the holders of Preferred Stock of the full preferential amounts
to which they shall be entitled pursuant to the resolution or resolutions
creating any series thereof, shall be divided and distributed among the
holders of the Common Stock ratably, except as may otherwise be provided in
any such resolution or resolutions.
4. Voting. Except as otherwise required by law, the holders of Voting
Common will be entitled to one vote per share on all matters to be voted on
by the stockholders of the Corporation and the holders of Non-Voting Common
will have no right to vote on any matters to be voted on by the
stockholders of the Corporation; provided that the holders of Non-Voting
Common shall have the right to vote, as a separate class (with each share
having one vote) on any merger, consolidation, reorganization or
reclassification of the Corporation or its shares of capital stock, any
amendment to this Certificate of Incorporation or any liquidation,
dissolution or winding up of the Corporation (each such event being a
"Fundamental Change") in which shares of Non-Voting Common would be treated
differently than shares of Voting Common (other than a Fundamental Change
in which the only difference in such treatment is that the holders of
Voting Common would be entitled to receive equity securities with full
voting rights and the holders of the Non-Voting Common would be entitled to
receive equity securities which have voting rights substantially identical
to the voting rights of Non-Voting Common and are convertible upon any
Voting Conversion Event (as defined in Section 5(b), with respect to
holders of Non-Voting Common other than Motorola, Inc., a Delaware
corporation or any affiliate thereof (collectively "Motorola"), or a
Motorola Conversion Event (as defined in Section 5(c), with respect to
Motorola, on a share for share basis, into the voting securities to which
the holders of the Voting Common are entitled, but which are otherwise
identical to such voting securities).
5. Conversion
(a) Upon the occurrence (or, with respect to clause (i) of this
Section 5(a), the expected occurrence) of (i) any Voting
Conversion Event, with respect to holders of Non-Voting Common
other than Motorola, or any distribution, or sale by Motorola
described in Section 5(c)(i) hereof (a "Motorola Transfer"),
each share of Non-Voting Common which is being or has been
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distributed, disposed of or sold (or is expected to be
distributed, disposed of or sold (or is expected to be
distributed, disposed of or sold) in connection with such Voting
Conversion Event or such Motorola Transfer shall be convertible
at the option of the holder thereof into one fully paid and
non-assessable share of Voting Common; or (ii) any Motorola
Conversion Event described in Section 5(c)(ii) hereof, any or
all of the shares of Non-Voting Common held by Motorola shall be
convertible at its option into one fully paid and nonassessable
share of Voting Common.
(b) "Voting Conversion Event" shall mean:
(i) any public offering or public sale of securities of the
Corporation (including a public offering registered
under the Securities Act of 1933 and a public sale
pursuant to Rule 144 of the Securities and Exchange
Commission or any similar rule then in force);
(ii) any sale of securities of the Corporation to a person or
group of persons (within the meaning of the Securities
Exchange Act of 1934 (the "1934 Act")) if, after such
sale, such person or group of persons in the aggregate
would own or control securities which possess in the
aggregate the ordinary voting power to elect a majority
of the Corporation's directors (provided that such sale
has been approved by the Corporation's Board of
Directors or a committee thereof);
(iii) any sale of securities of the Corporation to a person or
group of persons (within the meaning of the 1934 Act)
if, after such sale, such person or group of persons in
the aggregate would own or control securities of the
Corporation (excluding any Non-Voting Common being
converted and disposed of in connection with such Voting
Conversion Event) which possess in the aggregate the
ordinary voting power to elect a majority of the
Corporation's directors;
(iv) any sale of securities of the Corporation to a person or
group of persons (within the meaning of the 1934 Act)
if, after such sale, such person or group of persons
would not, in the aggregate, own, control or have the
right to acquire more than two percent (2%) of the
outstanding securities of any class of voting securities
of the Corporation; and
(v) any distribution, disposition or sale of any securities
of the Corporation to a person or group of persons
(within the meaning of the 1934 Act) in connection with
a merger, consolidation or similar transaction if, after
such transaction, such person or group of persons will
own or control securities which constitute in the
aggregate the ordinary voting power to elect a majority
of the
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surviving corporation's directors (provided that the
transaction has been approved by the Corporation's Board
of Directors or a committee thereof);
(c) "Motorola Conversion Event" shall mean:
(i) Any distribution, disposition or sale of shares of
Non-Voting Common by Motorola not prohibited under
Section 7.14 of the Agreement and Plan of Contribution
and Merger, dated August 4, 1994 by and among the
Corporation, Nextel, Motorola and ESMR Sub, Inc., a
Delaware corporation (the "Motorola Agreement");
(ii) the existence of circumstances which, in Motorola's
judgment, constitute or are likely to cause or result in
a material adverse development with respect to the
business, properties, operations or financial condition
of the Corporation and its subsidiaries and which
otherwise cause conversion of the shares of Non-Voting
Common held by Motorola into shares of Voting Common to
be reasonably necessary to protect Motorola's interests
as a stockholder of the Corporation.
provided that, for purposes of Sections 5(b) and 5(c), "person"
shall include any natural person and any corporation,
partnership, joint venture, trust, unincorporated organization
and any other entity or organization and provided, further that,
the occurrence of any Motorola Conversion Event shall be
determined by Motorola, in its sole judgment by notice to the
Corporation which notice shall be binding upon the Corporation;
(d) Subject to Section 5(a), (i) a holder, other than Motorola, of
Non-Voting Common will be entitled to convert shares of
Non-Voting Common into shares of Voting Common in connection
with any Voting Conversion Event and Motorola will be entitled
to convert shares of Non-Voting Common into shares of Voting
Common in connection with any Motorola Transfer, if such holder
reasonably believes that such Voting Conversion Event or
Motorola Transfer Event, as the case may be, will be consummated
and a written request for conversion from any holder of
Non-Voting Common to the Corporation stating such holder's
reasonable belief that a Voting Conversion Event or Motorola
Transfer, as the case may be, shall occur shall be conclusive
and shall obligate the Corporation to effect such conversion in
a timely manner so as to enable each such holder to distribute,
dispose of or sell such shares of Voting Common in connection
with such Voting Conversion Event or Motorola Transfer, as the
case may be; provided that the Corporation will not cancel the
shares of Non-Voting Common so converted before the tenth day
following such Voting Conversion Event or Motorola Transfer and
will reserve such shares until such tenth day for reissuance in
compliance with the following proviso; and provided further
that, if any shares of Non-Voting Common
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are converted into shares of Voting Common in connection with a
Voting Conversion Event or a Motorola Transfer and any such
shares of Voting Common are not actually distributed, disposed
of or sold pursuant to such Voting Conversion Event or Motorola
Transfer, such shares of Voting Common which were not so
distributed, disposed of or sold shall be promptly converted
back into the same number of shares of Non-Voting Common; and
(ii) Motorola, at its election, will be entitled to convert any
or all of its shares of Non-Voting Common into shares of Voting
Common upon the occurrence of any Motorola Conversion Event
described in Section 5(c)(ii) hereof.
(e) Each conversion of shares of Non-Voting Common into shares of
Voting Common will be effected by the surrender of the
certificate or certificates representing the shares to be
converted at the principal office of the Corporation at any time
during normal business hours, together with a written notice by
the holder of such shares of Non-Voting Common stating that such
holder desires to convert the shares, or a stated number of the
shares, of Non-Voting Common represented by such certificate or
certificates into shares of Voting Common. Such notice shall
also state the name or names (with addresses) and denominations
in which the certificate or certificates for such Voting Common
are to be issued. Such conversion will be deemed to have been
effected as of the close of business on the date on which such
certificate or certificates have been surrendered and such
notice has been received, and at such time the rights of the
holder of the converted shares of Non-Voting Common as such
holder will cease and the person or persons in whose name or
names the certificate or certificates for such shares of Voting
Common are to be issued upon such conversion will be deemed to
have become the holder or holders of record of the shares of
Voting Common represented thereby.
(f) Promptly after such surrender and the receipt of such written
notice, the Corporation will issue and deliver in accordance
with the surrendering holder's instructions each of the
following:
(i) the certificate or certificates representing the shares
of Voting Common issuable upon such conversion; and
(ii) a certificate representing any shares of Non-Voting
Common which were represented by the certificate or
certificates delivered to the Corporation in connection
with such conversion but which were not converted into
shares of Voting Common.
(g) The issuance of certificates representing shares of Voting
Common received upon conversion of shares of Non-Voting Common
will be made without charge to the holders of such shares for
any issuance tax in respect thereof or other cost incurred by
the Corporation in connection with such conversion and the
related issuance of Voting Common.
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(h) The Corporation will not close its books against the transfer of
shares of Common Stock in any manner which would interfere with
the timely conversion of any shares of Non-Voting Common.
6. Subdivision or Combination. If the Corporation in any manner subdivides
or combines the outstanding shares of one class of Common Stock, the
outstanding shares of the other class of Common Stock will be
proportionately subdivided or combined.
7. Reservation of Shares. The Corporation shall at all times reserve from
its authorized Voting Common a sufficient number of shares to provide for
conversion of all Non-Voting Common from time to time outstanding. If the
Voting Common issuable upon conversion of the Non-Voting Common is listed
on any national securities exchange or automated quotation system of NASD,
the Corporation will cause within 60 days of any such conversion to be
listed on such exchange or automated quotation system, subject to official
notice of issuance upon such conversion.
Class A Convertible Redeemable Preferred Stock
1. Class A Stated Value. Each share of Class A Convertible Redeemable
Preferred Stock of the par value $.01 per share (the "Class A Preferred Stock")
shall have a stated value of $36.75 (the "Class A Stated Value"). The
Corporation shall issue fractional shares of Class A Preferred Stock upon the
original issuance, transfer or exchange of a Class A Preferred Stock share,
unless the Corporation and the holder of such Class A Preferred Stock share
agree upon a payment in lieu of any such fractional share.
2. Dividends.
2.1 No dividend or other distribution shall be declared or paid on the
Common Stock of the Corporation unless a dividend is declared or paid on each
share of the Class A Preferred Stock in an amount equal to the amount that would
have been paid on the number of shares of Common Stock into which such share of
Class A Preferred Stock would be convertible as of the record date for such
declaration or payment if all such shares of Common Stock had been issued upon
conversion on such record date and such dividends or distributions payable on
the Class A Preferred Stock pursuant to this Section 2.1 shall be declared and
paid in the same medium as that in which the dividends or distributions on the
Common Stock giving rise thereto has been declared and is to be paid.
2.2 In the event that the Corporation's Board of Directors takes action
to diminish, change, amend, or grant exceptions or exclusions from the authority
of the Operations Committee, or to terminate the Operations Committee (a
"Trigger Event"), in a situation other than upon an Approved Trigger Event or a
Rescission Event, then the holders of a majority of Class A Preferred Stock may,
not more than ten days after the day any draft of minutes of the meeting of the
Board of Directors of the Corporation at which such action was taken are first
circulated to all of the members of the Board of Directors for their review,
provide written notice to the Secretary of the Corporation that such event
triggers the accrual of a dividend pursuant to this Section 2.2 (a "Dividend
Event"). The Board of Directors shall have 30 days from the date such notice is
received by the Secretary of the Corporation to take such action to amend or
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modify the action giving rise to the notice that a Dividend Event has occurred.
If the Dividend Event has not been cured by the end of such 30-day period (the
"Dividend Accrual Date"), then from and after the Dividend Accrual Date,
dividends shall accrue on each outstanding share of Class A Preferred Stock at
the annual rate of twelve percent (12%) of the then current Dividend Base,
compounded monthly from the Dividend Accrual Date until the earlier of the day
such share of Class A Preferred Stock (a) is converted into shares of Voting
Common, (b) is converted into shares of Class C Convertible Redeemable Preferred
Stock, par value $.01 per share ("Class C Preferred Stock"), or (c) is redeemed
by the Corporation. Dividend Base means the Class A Stated Value per share plus
any accrued and unpaid dividends under this Section 2.2 and any declared but
unpaid dividends pursuant to Section 2.1 on that share of Class A Preferred
Stock. Dividends under this Section 2.2 shall be payable out of funds legally
available therefor in cash (or additional shares of Class A Preferred Stock as
provided below) semi-annually on June 30 and December 31 of each year and on the
day immediately prior to the time such share of Class A Preferred Stock is
converted to Voting Common or Class C Preferred Stock (each, a "Dividend Payment
Date") commencing after the Dividend Accrual Date (and, in the case of any
accrued but unpaid dividends that are unpaid as of any Dividend Payment Date, at
such other times and for such interim periods, if any, as determined by the
Board of Directors), except that if any such date is a Saturday, Sunday or legal
holiday then such dividend shall be payable on the next day that is not a
Saturday, Sunday or legal holiday, to holders of record as they appear on the
stock books of the transfer agent for the Corporation on the applicable record
date. Dividends under this Section 2.2 may, at the option of the Corporation, be
paid in additional shares of Class A Preferred Stock. The number of additional
shares of Class A Preferred Stock to be so issued shall be determined by
dividing the amount of dividends to be so paid by the Class A Stated Value and
such additional shares shall be issued and distributed to the applicable holders
of Class A Preferred Stock pro rata (including fractional shares) in accordance
with the amount of dividends due to each such holder pursuant to this Section
2.2. No record date shall be set for payment of any dividends or distributions
in respect of Common Stock of the Corporation or in respect of Preferred Stock
of the Corporation whose right to payment of dividends or distributions is
junior to that of the Class A Preferred Stock unless and until the payment of
all dividends and distributions provided under this Section 2.2 shall have been
made to the holders of Class A Preferred Stock.
2.3 No dividends shall be paid or declared and set apart for payment on
any class or series of the Corporation's capital stock ranking, as to dividends,
on a parity with or junior to the Class A Preferred Stock (collectively, "Parity
Dividend Stock") for any period and no purchase, redemption or other acquisition
shall be made by the Corporation of any shares of Parity Dividend Stock unless
and until full cumulative dividends have been, or contemporaneously are, paid or
declared and set apart for such payment on the Class A Preferred Stock for all
dividend payment periods terminating on or prior to the date of payment of such
dividends on the Parity Dividend Stock. When dividends are not paid in full upon
the Class A Preferred Stock and the Parity Dividend Stock, all dividends paid or
declared and set aside for payment upon shares of Class A Preferred Stock and
the Parity Dividend Stock shall be paid or declared and set aside for payment
pro rata so that the amount of dividends paid or declared and set aside for
payment per share on the Class A Preferred Stock and the Parity Dividend Stock
shall in all cases bear to each other the same ratio that accrued and unpaid
dividends per share on the shares of Class A Preferred Stock and on the shares
of Parity Dividend Stock bear to each other.
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2.4 Anything herein to the contrary notwithstanding, and in addition to
and not in limitation of any other provisions or conditions that may restrict
payment of dividends by the Corporation, the Board of Directors shall not
declare and the Corporation shall not pay dividends with respect to the Class A
Preferred Stock (including, without limitation, dividends previously declared
if, at the payment date, the declaration would be a violation hereof) if (A) the
Corporation or any officer or director thereof (i) has received notice of, (ii)
has given notice of or (iii) has knowledge of an "Event of Default" as such term
is defined in any Indenture or under any other agreement for money borrowed by
the Corporation (or as to which the Corporation has guaranteed, or is otherwise
obligated to make payment on, in whole or in part, any borrowing of money by
another party and the terms of any such guarantee or obligation restrict the
payment of dividends by the Corporation), or (B) such an Event of Default would
exist after giving effect to such payment.
3. Class A Liquidation Rights.
3.1 In the event of any liquidation, dissolution or winding up of the
business of the Corporation, whether voluntary or involuntary, each holder of
Class A Preferred Stock shall be entitled to receive, for each share thereof,
out of assets of the Corporation legally available therefor, a preferential
amount in cash equal to (and not more than) the sum of (A) the Class A Stated
Value, plus (B) an amount equal to any dividends accrued pursuant to Section 2.2
that remain unpaid, plus (C) an amount equal to the amount of all declared but
unpaid dividends or distributions thereon payable pursuant to Section 2.1. All
preferential amounts to be paid to the holders of Class A Preferred Stock in
connection with such liquidation, dissolution or winding up shall be paid 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 (i) any series of Preferred
Stock whose terms provide that the holders of Class A Preferred Stock should
receive preferential payment with respect to such distribution (to the extent of
such preference) or (ii) Common Stock. If in any such distribution the assets of
the Corporation shall be insufficient to pay the holders of the outstanding
shares of the Class A Preferred Stock (or the holders of any class or series of
capital stock ranking on a parity with the Class A Preferred Stock as to
distributions in the event of a liquidation, dissolution or winding up of the
Corporation) the full amounts to which they shall be entitled, such holders
shall share ratably in any distribution of assets in accordance with the sums
which would be payable on such distribution if all sums payable thereon were
paid in full. In liquidation, shares of Class A Preferred Stock and Class C
Preferred Stock shall rank on a pari passu basis.
3.2 Holders of shares of Class A Preferred Stock shall not be entitled
to receive any amounts with respect to any liquidation, dissolution or winding
up of the Corporation other than the amounts provided in this Section 3. Neither
a merger nor consolidation of the Corporation into or with another corporation
nor a merger or consolidation of any other corporation into or with the
Corporation, nor a sale, transfer, mortgage, pledge or lease of all or any part
of the assets of the Corporation shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this Section 3.
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4. Class A Voting Rights.
4.1 Except as otherwise required by law or as otherwise provided herein,
the holders of Class A Preferred Stock (and the holders of any other series of
Preferred Stock entitled to vote as a single class with the holders of Voting
Common) shall vote together with the holders of Voting Common as a single class
on all matters as to which the Voting Common is entitled to vote, and the
holders of Class A Preferred Stock shall be entitled to a number of votes equal
to the number of shares of Voting Common into which their shares of Class A
Preferred Stock are, as of the record date for determining shares entitled to
vote on such matter, convertible pursuant to Section 6 hereof, provided,
however, that the holders of Class A Preferred Stock shall not be entitled to
vote in the election of Directors except as provided in Section 4.2.
4.2 The holders of shares of Class A Preferred Stock, voting separately
as a single class, shall be entitled to elect three Directors, or, if greater,
that number of Directors (rounded up to the nearest whole number) that will
cause the aggregate number of Directors elected by the holders of Class A
Preferred Stock to equal 25% of the entire Board of Directors (including any
vacancies) of the Corporation (the "Class A Directors"). Class A Directors shall
be allocated as evenly as possible among all classes of Directors of the
Corporation. In any election of Directors in which any Class A Director is to be
elected, the holders of shares of Class A Preferred Stock shall vote solely as a
separate class pursuant to this Section 4.2 and not together with the holders of
Voting Common pursuant to Section 4.1. Except as provided in Section 4.3, Class
A Directors may only be removed from office by vote of the holders of a majority
of shares of Class A Preferred Stock outstanding, voting separately as a single
class. Any vacancy among the Class A Directors may be filled only by vote of the
holders of a majority of shares of Class A Preferred Stock outstanding, voting
separately as a single class, or, so long as any shares of Class A Preferred
Stock are outstanding, by vote of the remaining Class A Directors then in
office.
4.3 If an event constituting Cause occurs with respect to any Class A
Director and such Class A Director has not been removed or replaced within 10
days after the earlier of the day the Original Majority Holder becomes aware of
such event or the day the Corporation gives notice to the Original Majority
Holder of such an event, the Board of Directors shall have the right, by
majority vote, to remove such Class A Director.
4.4 No amendment to the Certificate of Incorporation which alters or
changes the powers, preferences or rights of the Class A Preferred Stock so as
to affect them adversely shall be effective unless it has been approved by the
vote of the holders of a majority of shares of Class A Preferred Stock
outstanding, voting separately as a single class. The Corporation shall not
issue, or enter into any commitment to issue, shares of Class A Preferred Stock
except (i) pursuant to the terms of any agreement in effect on the date that the
Certificate of Amendment of the Certificate of Incorporation of the Corporation
establishing the powers, preferences and rights of the Class A Preferred Stock
was originally filed with the Secretary of State of the State of Delaware, (ii)
in payment of dividends on outstanding shares of Class A Preferred Stock as
permitted by Section 2.2 above and (iii) such other issuances or issuance
commitments as have been approved by the vote of the holders of a majority of
the shares of Class A Preferred Stock outstanding, voting separately as a single
class.
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5. Operations Committee Membership. For so long as (i) there shall be an
Operations Committee, and (ii) the holders of shares of Class A Preferred Stock
are entitled to elect at least three Class A Directors, the number of members of
the Operations Committee shall be fixed at five, and three of such members shall
be Class A Directors. If the size of the Board of Directors is reduced so that
the holders of Class A Preferred Stock are not entitled to elect at least three
members of the Board of Directors, or if the Operations Committee has not been
terminated but the Original Majority Holder and its Qualified Controlled
Affiliates are not entitled to elect at least three members of the Board of
Directors, so long as there shall be an Operations Committee, then (i) the
majority of the members of the Operations Committee shall be selected from among
the Class A Directors, and (ii) the size of the Operations Committee shall be
reduced to the extent required so that the Class A Directors who serve as
members of the Operations Committee shall constitute a majority of the members
of the Operations Committee.
6. Conversion into Voting Common.
6.1 Class A Conversion Right and Mandatory Conversion.
6.1.1 Unless previously converted under Section 6.1.2, each holder
of Class A Preferred Stock may at any time, and from time to time, convert any
or all of such holder's shares of Class A Preferred Stock into fully paid and
non-assessable shares of Voting Common in an amount equal to the quotient of (i)
the aggregate Class A Stated Value of the shares of Class A Preferred Stock
which are being converted to Voting Common plus an amount equal to the amount of
all accrued and unpaid dividends as of the date of conversion divided by (ii)
the Class A Conversion Price (determined as provided in Section 6.2) in effect
at the time of such conversion. In order to exercise the conversion privilege
under this Section 6.1.1, the holder of any shares of Class A Preferred Stock to
be converted shall give written notice to the Corporation at its principal
office that such holder elects to convert such shares of Class A Preferred Stock
or a specified portion thereof into shares of Voting Common as set forth in such
notice. In the event the Corporation has called the Class A Preferred Stock for
redemption in connection with a prospective Change of Control, such notice of
conversion from the holder may condition conversion upon consummation of such
Change of Control.
6.1.2 All shares of Class A Preferred Stock then outstanding
automatically shall be converted, without further action by any of the holders
of shares of Class A Preferred Stock or the Corporation, into shares of Voting
Common as hereinafter provided upon the soonest to occur of (a) the one hundred
eightieth (180th) day after the expiration of the covenant set forth in Section
8.3(b) of the Securities Purchase Agreement, (b) tenth anniversary of the
Original Issuance Date, (c) any day after the second anniversary of the Original
Issuance Date on which the Voting Power Ownership Percentage of the Original
Majority Holder and its Qualified Controlled Affiliates exceeds twenty-five
percent (25%) of the total voting power of all outstanding shares of capital
stock of the Corporation, (d) the occurrence of a Trigger Event following any of
the actions set forth in Subsections (i) (other than an event identified in
Section 3.3(e)(i) of the Securities Purchase Agreement with respect to Craig O.
McCaw) and (iii) through (vi), inclusive, of the definition of "Approved Trigger
Event" set forth below under the heading Defined Terms, and (e) immediately upon
any sale, transfer or other disposition of Voting Securities by the Original
Majority Holder or any of its Qualified Controlled Affiliates, if, immediately
following such sale, transfer or disposition, the Voting
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Power Ownership Percentage of the Original Majority Holder and its Qualified
Controlled Affiliates is less than 5%. Except as permitted by Section 8, if
there is any transfer or other disposition of shares of Class A Preferred Stock
("Transferred Class A Shares"), directly or indirectly, by the Original Majority
Holder or any Qualified Controlled Affiliate to any Person who is not a
Qualified Controlled Affiliate (or the continued holding of shares of Class A
Preferred Stock by any Person who was a Qualified Controlled Affiliate upon such
Person's failure to meet the criteria required to be a Qualified Controlled
Affiliate ("Retained Class A Shares")) (a "Class A Transfer Event"), then,
effective immediately upon such Class A Transfer Event, each Transferred Class A
Share and/or Retained Class A Share, as the case may be, (other than any
Collateral Shares (as defined in Section 9.2), which shall be converted into
shares of Class C Preferred Stock as provided in Section 9.2) shall
automatically be converted, without further action by any of the holders of
shares of Class A Preferred Stock or the Corporation, into shares of Voting
Common as hereinafter provided. Upon conversion, shares of Class A Preferred
Stock shall convert into fully paid and non-assessable shares of Voting Common
in an amount equal to the quotient of (i) the aggregate Class A Stated Value of
the shares of Class A Preferred Stock which are being converted to Voting Common
divided by (ii) the Class A Conversion Price (determined as provided in Section
6.2) in effect at the time of such conversion. Upon (or promptly after the
Corporation becomes aware of any occurrence or condition resulting in) any
automatic mandatory conversion of any shares of Class A Preferred Stock pursuant
to this Section 6.1.2, the Corporation shall promptly give confirmatory written
notice to each holder of Class A Preferred Stock whose shares have been so
converted at the address of such holder as set forth in the records of the
Corporation, provided, however, that no failure to give such confirmatory notice
nor any defect therein shall affect the effectiveness of any automatic mandatory
conversion of any shares of Class A Preferred Stock pursuant to this Section
6.1.2.
6.1.3 At such time as the certificate or certificates representing
the Class A Preferred Stock which has been converted are surrendered to the
Corporation, the Corporation shall issue and deliver a certificate or
certificates representing the number of shares of Voting Common determined
pursuant to Section 6.1.1 or 6.1.2. In case of conversion under Section 6.1.1 or
Section 6.1.2 of only a part of the shares of Class A Preferred Stock
represented by a certificate surrendered to the Corporation, the Corporation
shall forthwith issue and deliver a new certificate for the number of shares of
Class A Preferred Stock which have not been converted. Until such time as the
certificate or certificates representing Class A Preferred Stock which has been
converted are surrendered to the Corporation and a certificate or certificates
representing the Voting Common into which such Class A Preferred Stock has been
converted have been issued and delivered, the certificate or certificates
representing the shares of Class A Preferred Stock which have been converted
shall represent the shares of Voting Common into which such shares of Class A
Preferred Stock have been converted. The Corporation shall pay all documentary,
stamp or similar issue or transfer tax due on the issue of shares of Voting
Common issuable upon conversion of the Class A Preferred Stock.
6.2 The Class A Conversion Price. The price for the conversion of the
Class A Preferred Stock into Voting Common (the "Class A Conversion Price")
shall, subject to adjustment as hereinafter provided, be $12.25 for each share
of Voting Common.
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6.3 Adjustment of The Class A Conversion Price. The Class A Conversion
Price shall be subject to adjustment as follows:
6.3.1 In case the Corporation shall at any time subdivide or combine
the outstanding shares of Common Stock, or make a dividend or other distribution
on the Common Stock in shares of Common Stock, the Class A Conversion Price
shall forthwith be proportionately decreased in the case of a subdivision,
dividend or distribution, or increased in the case of a combination.
6.3.2 Shares of Common Stock issuable by way of dividend or other
distribution on any capital stock of the Corporation shall be deemed to have
been issued immediately after the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution and without consideration.
6.3.3 Whenever the Class A Conversion Price is adjusted as herein
provided, the Corporation shall forthwith cause a copy of a notice to be sent by
first-class mail, postage prepaid, to each holder of Class A Preferred Stock,
showing in reasonable detail the facts requiring such adjustment and the Class A
Conversion Price after such adjustment.
6.3.4 No adjustment of the Class A Conversion Price shall be made if
the amount of such adjustment shall be less than five cents per share of Voting
Common, but in such case any adjustment that would otherwise be required then to
be made shall be carried forward and shall be made at the time and together with
the next subsequent adjustment which, together with any adjustment so carried
forward, shall amount to not less than five cents per share; provided that if
the Corporation shall at any time subdivide or combine the outstanding shares of
Common Stock or issue any additional shares of Common Stock as a dividend, such
amount of five cents per share (as theretofore increased or decreased, if such
amount shall have been adjusted in accordance with the provisions of this
Section 6.3.4) shall forthwith be proportionately increased in the case of a
combination or decreased in the case of such a subdivision or stock dividend so
as appropriately to reflect the same.
6.3.5 In case of any Organic Change, the holder of each share of
Class A Preferred Stock then outstanding shall thereafter have the right to
receive upon conversion the kind and amount of shares of stock and other
securities and property receivable upon such Organic Change by a holder of the
number of shares of Common Stock which the holder of such share of Class A
Preferred Stock would have had the right to receive upon conversion immediately
prior to such Organic Change, at a price equal to the Class A Conversion Price
then in effect pertaining to such share of Class A Preferred Stock.
6.3.6 No adjustment of the Class A Conversion Price shall be made
and no deemed conversion into Common Stock as contemplated by Section 6.3.5
shall occur upon the consolidation of the Corporation with or its merger,
directly or indirectly, with or into any other corporation if (i) the
corporation resulting from such consolidation or surviving such merger shall
have consolidated net worth at least equal to the consolidated net worth of the
Corporation immediately before the merger, (ii) the surviving or resulting
corporation shall have no class of shares (either authorized or outstanding)
ranking prior to or on a parity with any then
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outstanding Class A Preferred Stock (other than any such class of shares with
terms identical in all material respects to any class of capital stock of the
Corporation in existence on or prior to the effective time of such consolidation
or merger), (iii) the surviving or resulting corporation shall have authorized
shares of a class or series of preferred stock equal in number and having the
same express rights and preferences as any then outstanding shares of Class A
Preferred Stock, and (iv) each holder of Class A Preferred Stock immediately
preceding such consolidation or merger shall receive in the consolidation or
merger the same number of shares with the same rights and preferences of the
resulting or surviving corporation. In the event of a merger or consolidation of
the Corporation with or into another corporation the consolidated net worth of
the Corporation and the consolidated net worth of the resulting or surviving
corporation each shall be calculated (in the case of such resulting or surviving
corporation, on a pro forma basis) as of the end of the calendar quarter
immediately preceding the proposed consolidation or merger.
6.3.7 Irrespective of any adjustments in the Class A Conversion
Price or the number or kind of shares purchasable upon conversion of shares of
Class A Preferred Stock, certificates representing shares of Class A Preferred
Stock theretofore or thereafter issued may continue to express the same price
and number and kind of shares previously stated in the certificates for shares
of Class A Preferred Stock.
6.3.8 The Corporation may retain a firm of independent public
accountants of recognized standing, which may be the firm regularly retained by
the Corporation, selected by the Board of Directors of the Corporation, to make
any computation required under this Section 6.3, and a certification by such
firm shall be conclusive evidence of the correctness of any computation made
under this Section 6.3.
6.4 Fractional Interests. The Corporation may, but shall not be required
to, issue fractions of shares of Voting Common on the conversion of Class A
Preferred Stock. If any fraction of a share of Voting Common would, except for
the provisions of this Section 6.4, be issuable on the conversion of any Class A
Preferred Stock, the Corporation may, in lieu of issuing such fractional share,
either (a) pay in cash an amount equal to the current value of such fraction,
computed on the basis of (i) if the Voting Common is listed on a national
securities exchange or the NASDAQ-NMS, the last sales price or (ii) if the
Voting Common is not listed on a national securities exchange or the NASDAQ-NMS
but is regularly quoted in the automated quotation system of the NASD, or any
successor thereto, the last bid price, or if there is no reported last bid, the
average of the bid prices, in either case on the last business day prior to the
date of exercise, or, if such computations cannot be made as aforesaid, as the
Board of Directors of the Corporation may in good faith determine or (b) round
such fraction up to a whole share of Voting Common.
7. Redemption of Class A Preferred Stock.
7.1 Corporation's Right to Redeem. Upon or at any time after a Change of
Control, all of the outstanding shares of Class A Preferred Stock shall be
redeemable effective not earlier than upon the consummation of any transaction
that constitutes a Change of Control at the option of the Corporation, out of
funds legally available therefor, in whole but not in part, at
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a redemption price of $36.75 per share of Class A Preferred Stock, plus an
amount equal to all accrued or declared but unpaid dividends thereon (the "Class
A Redemption Price").
7.2 Class A Redemption Notice.
7.2.1 If an event constituting a Change of Control occurs, or the
Corporation's Board of Directors approves, or the Corporation enters into an
agreement providing for, a transaction, event or development that constitutes
(or would constitute if consummated) a Change of Control, the Corporation may
call the outstanding shares of Class A Preferred Stock for redemption and set a
date for the redemption which date shall not be earlier than the date such
Change of Control is consummated (the "Class A Redemption Date"). In the event
of a prospective Change of Control, the redemption shall be conditioned upon the
consummation of such Change of Control. Notice of such proposed redemption (the
"Class A Redemption Notice") shall be mailed at least 45 days prior to the Class
A Redemption Date to all holders of shares of Class A Preferred Stock at their
respective addresses as the same shall appear on the stock record books of the
Corporation. The Class A Redemption Notice shall be conclusively presumed to
have been given with respect to the shares of Class A Preferred Stock whether or
not the holders thereof receive the Class A Redemption Notice. Each Class A
Redemption Notice shall state (i) the Class A Redemption Date, (ii) the Class A
Redemption Price, (iii) the place or places where such shares of Class A
Preferred Stock are to be surrendered, and (iv) that dividends on shares of
Class A Preferred Stock to be redeemed shall cease to accrue on the Class A
Redemption Date. No defect in any such notice as to any shares of Class A
Preferred Stock shall affect the proceedings for the redemption of any shares of
Class A Preferred Stock.
7.2.2 Upon surrender in accordance with the Class A Redemption
Notice of the certificates for any shares of Class A Preferred Stock so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors shall so
require and the notice shall so state), such shares of Class A Preferred Stock
shall be redeemed by the Corporation which shall make payment to the
surrendering holder in an amount equal to the product of the applicable Class A
Redemption Price multiplied by the number of shares of Class A Preferred Stock
being surrendered by such holder for redemption.
7.2.3 Notwithstanding the foregoing, if the Corporation's Class A
Redemption Notice has been given pursuant to this Section 7 and any holder of
shares of Class A Preferred Stock shall, prior to the close of business on the
third Business Day preceding the Class A Redemption Date, give written notice to
the Corporation in accordance with the provisions of Section 6.1.1 that it
desires to convert its shares of Class A Preferred Stock (accompanied by a
certificate or certificates for such shares of Class A Preferred Stock, duly
endorsed or assigned to the Corporation), then the conversion of such shares of
Class A Preferred Stock shall become effective as provided in Section 6.
7.3 Payment Prior to Class A Redemption Date.
7.3.1 If such Class A Redemption Notice shall have been duly given
as provided above, or if the Corporation shall have given to the bank or trust
company hereinafter referred to irrevocable authorization to give or complete
such Class A Redemption Notice, and if
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prior to the applicable Class A Redemption Date the funds necessary for such
redemption shall have been deposited by the Corporation with a bank or trust
company in good standing (which bank or trust company shall have been identified
in a written notice given to the holders whose shares of Class A Preferred Stock
are to be redeemed), organized under the laws of the United States of America or
a State thereof, having a capital surplus and undivided profits aggregating at
least $100,000,000 according to its last published statement of condition, in
trust for the pro rata benefit of the holders of the shares of Class A Preferred
Stock so called for or otherwise subject to redemption, so as to be, and to
continue to be, available therefor, then, notwithstanding that any certificate
for shares of Class A Preferred Stock so called for or otherwise subject to
redemption shall not have been surrendered for cancellation, all shares of Class
A Preferred Stock so called for or otherwise subject to redemption shall no
longer be deemed to be outstanding on and after such Class A Redemption Date,
and all rights with respect to such shares shall forthwith cease and terminate
at the close of business on such Class A Redemption Date, except only the right
of the holders thereof to receive, out of the funds so set aside in trust, the
amount payable on redemption thereof, without interest. Any interest accrued on
any funds so deposited shall be the property of the Corporation and shall be
paid to the Corporation from time to time.
7.3.2 Any funds set aside or deposited, as the case may be, in
accordance with Section 7.3.1 above that remain unclaimed at the end of one year
from the applicable Class A Redemption Date shall be released or repaid to the
Corporation, after which the holders of the shares of Class A Preferred Stock so
called for redemption shall look only to the Corporation for payment of the
amount payable on redemption thereof, without interest, subject to the
applicable law of escheat.
8. Transfer Restrictions
8.1 Prohibition on Transfer. No holder of shares of Class A Preferred
Stock shall, directly or indirectly, make any sale, transfer, pledge, assignment
or other disposition of Class A Preferred Stock or any interest therein, except
for transfers to Qualified Controlled Affiliates or other transfers to Persons
under circumstances contemplated by Section 8.2.
8.2 Right to Pledge. Shares of Class A Preferred Stock may be assigned
or pledged as collateral to an Eligible Secured Party but only if the terms of
the assignment or pledge require, and the Eligible Secured Party agrees to give,
a written notice to the Chairman, President, and Secretary of the Corporation
not less than five business days before the Eligible Secured Party takes any
action to sell or otherwise realize on the Class A Preferred Stock held as
collateral. The notice required by this Section 8.2 shall be effective when
received.
9. Mandatory Conversion into Class C Preferred Stock.
9.1 Mandatory Conversion of All Shares of Class A Preferred Stock.
Notwithstanding anything herein to the contrary, upon (a) the date on which the
Original Majority Holder and all Qualified Controlled Affiliates hold, in the
aggregate, less than fifty-one percent (51%) of the total number of shares of
the Class A Preferred Stock at the time outstanding, or (b) the occurrence of an
event identified in Section 3.3(e)(i) of the Securities Purchase Agreement
constituting Cause with respect to Craig O. McCaw, then, effective
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immediately upon such event, each outstanding share of Class A Preferred Stock,
and each share of Class A Preferred Stock required to be issued in payment of
all accrued and unpaid dividends on the Class A Preferred Stock to the date of
the conversion pursuant to Section 2.2, automatically shall be converted,
without further action by any of the holders of the Class A Preferred Stock or
the Corporation, into an equal number of fully paid and nonassessable shares of
Class C Preferred Stock.
9.2 Mandatory Conversion of Collateral Shares. Notwithstanding anything
herein to the contrary, upon any Eligible Secured Party which holds a pledge of
Class A Preferred Stock or who otherwise holds Class A Preferred Stock as
security, taking title to or selling or otherwise transferring shares of the
Class A Preferred Stock (the "Collateral Shares") held as collateral (a
"Foreclosure Event"), then, effective immediately upon such Foreclosure Event,
each Collateral Share shall automatically be converted, without further action
by any of the holders of Class A Preferred Stock or the Corporation, into one
fully paid and nonassessable share of Class C Preferred Stock.
9.3 Notice and Delivery of Certificates. Upon (or promptly after the
Corporation becomes aware of any occurrence or condition resulting in) any
automatic mandatory conversion of any shares of Class A Preferred Stock pursuant
to this Section 9, the Corporation shall promptly give confirmatory written
notice to each holder of Class A Preferred Stock whose shares have been so
converted at the address of such holder as set forth in the records of the
Corporation, provided, however, that no failure to give such confirmatory notice
nor any defect therein shall affect the effectiveness of any automatic mandatory
conversion of any shares of Class A Preferred Stock pursuant to this Section 9.
Any such holders shall deliver to the Corporation the certificate or
certificates representing the shares of Class A Preferred Stock that have been
so converted and such holder shall be entitled to receive in exchange therefor a
certificate or certificates representing the number of shares of Class C
Preferred Stock into which the shares of Class A Preferred Stock so surrendered
have been converted. In case of conversion under Section 9.2 of only a part of
the shares of Class A Preferred Stock represented by a certificate surrendered
to the Corporation, the Corporation shall forthwith issue and deliver a new
certificate for the number of shares of Class A Preferred Stock which have not
been converted. Until such time as the certificate or certificates representing
Class A Preferred Stock which has been converted are surrendered to the
Corporation and a certificate or certificates representing the shares of Class C
Preferred Stock into which such shares of Class A Preferred Stock has been
converted have been issued and delivered, the certificate or certificates
representing the shares of Class A Preferred Stock which have been converted
shall represent the shares of Class C Preferred Stock into which such shares of
Class A Preferred Stock have been converted. The Corporation shall pay all
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Class C Preferred Stock issuable upon conversion of the Class A Preferred
Stock.
10. Other Provisions.
10.1 Reservation of Shares. The Corporation shall at all times reserve
from its authorized Voting Common and Class C Preferred Stock a sufficient
number of shares to provide for conversion of all Class A Preferred Stock from
time to time outstanding. As a condition precedent to the taking of any action
which would cause an adjustment reducing the Class A
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Conversion Price, the Corporation will take such corporate action as may be
necessary in order that it may validly and legally issue to holders of Class A
Preferred Stock upon conversion fully paid and non-assessable shares of Voting
Common at such adjusted Class A Conversion Price. If the Voting Common issuable
upon conversion of the Class A Preferred Stock is listed on any national
securities exchange or automated quotation system of NASD, the Corporation will
cause within 60 days of any such conversion, all shares reserved for such
conversion to be listed on such exchange or automated quotation system, subject
to official notice of issuance upon such conversion.
10.2 Notice of Certain Events. If, at any time, the Corporation shall:
10.2.1 Declare any dividend or other distribution upon its Common
Stock;
10.2.2 Propose any capital reorganization or any reclassification of
capital stock of the Corporation, or any consolidation or merger of the
Corporation with or into another corporation, or any conveyance of all or
substantially all the assets of the Corporation, or any voluntary dissolution or
liquidation (or if any involuntary dissolution or liquidation of the Corporation
shall be effected); or
10.2.3 Propose to issue to holders of its Common Stock rights to
purchase or subscribe for capital stock or securities convertible into or
exchangeable for capital stock; then, and in each such case, the Corporation
shall cause to be given to the holders of the Class A Preferred Stock, at least
30 days prior to the date specified in clause (x) or (y) below, as the case may
be, a notice containing a brief description of the proposed action and stating
the date on which (x) a record is to be taken for the purpose of such dividend,
distribution or rights, or (y) such reclassification, reorganization,
consolidation, merger, conveyance, dissolution, or liquidation is to take place
and the date, if any is to be fixed, as of which the holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reclassification, reorganization,
consolidation, merger, conveyance, dissolution, or liquidation. Such mailing
shall be a condition precedent to the taking of the action proposed to be taken
by the Corporation.
10.3 Adjustments to Class A Conversion Price. Before taking any action
which would cause an adjustment reducing the Class A Conversion Price below the
then par value (if any) of the shares of Voting Common issuable upon conversion
of Class A Preferred Stock, the Corporation will take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Corporation
may validly and legally issue fully paid and non-assessable shares of such
Voting Common at such adjusted Class A Conversion Price.
10.4 Cancellation of Shares of Class A Preferred Stock. No share or
shares of Class A Preferred Stock acquired by the Corporation for any reason
shall be reissued, and all such shares shall be cancelled, retired and
eliminated from the shares of Class A Preferred Stock which the Corporation
shall be authorized to issue.
10.5 Record Holders. The Corporation and its transfer agent, if any, for
the Class A Preferred Stock may deem and treat the record holder of any shares
of Class A Preferred
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Stock as the sole true and lawful owner thereof for all purposes, and neither
the Corporation nor any such transfer agent shall be affected by any notice to
the contrary.
Class B Convertible Preferred Stock
1. Class B Stated Value. Each share of Class B Convertible Redeemable
Preferred Stock of the par value $.01 per share (the "Class B Preferred Stock")
shall have a stated value of $1.00 per share (the "Class B Stated Value").
2. Dividends.
2.1 No dividend or other distribution shall be declared or paid on the
Common Stock of the Corporation unless a dividend is declared or paid on each
share of the Class B Preferred Stock in an equal amount per share. Except as and
to the extent provided in the preceding sentence and except for any dividend
pursuant to Section 2.2, which shall rank senior in all respects to the dividend
rights of any shares of any other series or class of stock of the Corporation,
the dividend and distribution rights of the Class B Preferred Stock shall be
subordinate and junior in all respects to the dividend and distribution rights
of any shares of any other series or class of the preferred stock of the
Corporation, whether now or hereafter authorized, unless the terms of such class
or series shall expressly state that the dividend or distribution rights of
shares of such series or class shall be pari passu with, or junior or
subordinate to, those of the Class B Preferred Stock.
2.2 If at any time the Corporation shall have incurred an obligation
pursuant to Section 3.3(b) of the Securities Purchase Agreement to pay a lump
sum payment in the amount of $25,000,000 and any portion of that amount remains
unpaid 15 days following the date such amount first becomes payable thereunder
(such amount, the "Amount Due"), and funds are legally available for the payment
of dividends, a dividend in the amount of the Amount Due in the aggregate,
automatically and immediately, without further action by the Board, shall be
declared and immediately paid on and with respect to the outstanding shares of
Class B Preferred Stock (to be shared in an equal amount per share). Upon such
payment, the obligation pursuant to Section 3.3(b) of the Securities Purchase
Agreement shall be extinguished in an amount equal to the amount of such
payment.
3. Class B Liquidation Rights.
3.1 In the event of any liquidation, dissolution or winding up of the
business of the Corporation, whether voluntary or involuntary, each holder of
Class B Preferred Stock shall be entitled to receive, for each share thereof,
out of assets of the Corporation legally available therefor, a preferential
amount in cash equal to One Dollar ($1.00). All preferential amounts to be paid
to the holders of Class B Preferred Stock in connection with such liquidation,
dissolution or winding up shall be paid after the payment or setting apart for
payment of any amount for, or the distribution of any assets of the Corporation
to, the holders of the Class A Preferred Stock and the Class C Preferred Stock,
and the holders of any other class or series of preferred stock of the
Corporation, whether now or hereafter authorized, unless the terms of such class
or series shall expressly state that the rights of the holders of the Class B
Preferred Stock in the distribution of any amount or assets made in connection
with the dissolution, liquidation or
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winding up of the Corporation shall be pari passu with, or superior or senior
to, the rights of the holders of such other class or series of preferred stock,
but the holders of Class B Preferred Stock shall be paid 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 Common Stock.
3.2 Neither a merger nor consolidation of the Corporation into or with
another corporation nor a merger or consolidation of any other corporation into
or with the Corporation, nor a sale, transfer, mortgage, pledge or lease of all
or any part of the assets of the Corporation shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for purposes of this
Section 3.
4. Class B Voting Rights.
4.1 Except as otherwise required by law or as otherwise provided herein,
the holders of Class B Preferred Stock shall have no voting rights or powers. On
all matters as to which they are entitled to vote, the holders of Class B
Preferred Stock shall be entitled to one vote per share of Class B Preferred
Stock and shall vote separately as a single class.
4.2 The holders of shares of Class B Preferred Stock, voting separately
as a class (but with such holders entitled to vote only after all other classes
or series of the capital stock of the Corporation, which are entitled to vote in
the election of any Directors of the Corporation, have voted in the election of
Directors at any general or special meeting of the stockholders held for such
purpose), shall be entitled to elect that number of Directors, if any, that
would cause the percentage of the Board of Directors elected by the holders of
the Class B Preferred Stock to be equal to the aggregate Voting Power Ownership
Percentage of that holder of Class B Preferred Stock who, together with its
Controlled Affiliates (collectively, the "Majority Holder"), owns a majority of
the outstanding shares of the Class B Preferred Stock (determined as of the
record date for determining shares eligible to vote on such matter) (rounded
down to the nearest whole number of Directors) (such total number of Directors
entitled to be elected by the holders of the Class B Preferred Stock, reduced as
indicated in the following proviso, referred to as the "Proportionate Number of
Directors"); provided, however, that for purposes of this Section 4.2, the
number of Directors entitled to be elected by the holders of the Class B
Preferred Stock shall be reduced by the number of Directors that are members of
the Corporation's Board of Directors who were nominees of, or were elected by,
the Majority Holder (or any of its Affiliates) (whether by contract or pursuant
to the terms of any other class or series of the Corporation's capital stock).
Those individuals elected to the Board of Directors by vote of the Class B
Preferred Stock pursuant to this Section 4.2 are referred to herein as the
"Class B Directors." For purposes of this Section 4, the aggregate Voting Power
Ownership Percentage of the Majority Holder shall be calculated (i) with respect
to any election of Directors, as of the date as of which a record is to be taken
to determine the holders of securities entitled to vote at such election, or
(ii) with respect to the filling of any vacancy among the Class B Directors, as
of the date such vacancy was created.
4.3 Except as provided in Section 4.4, Class B Directors may only be
removed from office by the vote of the holders of a majority of shares of Class
B Preferred Stock outstanding, voting separately as a single class. Any vacancy
among the Class B Directors may be filled only by the vote of the holders of a
majority of shares of Class B Preferred Stock
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outstanding, voting separately as a single class, or, so long as any shares of
Class B Preferred Stock are outstanding, by vote of the remaining Class B
Directors then in office.
4.4 If an event constituting Cause occurs with respect to any Class B
Director and such Class B Director has not been removed or replaced within 10
days after the earlier of the day the Original Majority Holder becomes aware of
such event or the day the Corporation gives notice to the Original Majority
Holder of such an event, the Board of Directors shall have the right, by
majority vote, to remove such Class B Director.
4.5 No amendment to the Certificate of Incorporation which alters or
changes the powers, preferences or special rights of the Class B Preferred Stock
so as to affect them adversely shall be effective and no issuance of any shares
of Class B Preferred Stock, other than as part of the package of securities of
the Corporation issued in connection with the original issuance of shares of
Class A Preferred Stock to the original holders thereof, shall be permitted,
unless it has been approved by the vote of the holders of a majority of shares
of the Class B Preferred Stock outstanding, voting separately as a single class.
5. Operations Committee Membership. If at any time, (i) there shall be an
Operations Committee, and (ii) none of the shares of Class A Preferred Stock are
outstanding, a sufficient number of Class B Directors shall be members of the
Operations Committee such that a majority of the members of the Operations
Committee shall be Investor Directors.
6. Conversion.
6.1 Upon (i) any sale, transfer or other disposition of Voting
Securities by the Original Majority Holder or any of its Qualified Controlled
Affiliates, if, immediately following such sale, transfer or disposition, the
Voting Power Ownership Percentage of the Original Majority Holder and its
Qualified Controlled Affiliates is less than 5%, (ii) any date on which the
Original Majority Holder and its Controlled Affiliates hold, in the aggregate,
less than (51%) of the total number of shares of the Class B Preferred Stock at
the time outstanding, (iii) any transfer or other disposition of any shares of
Class B Preferred Stock by the Original Majority Holder or any of its Qualified
Controlled Affiliates to any Person who is not a Qualified Controlled Affiliate,
or the continued holding of such shares by any such Person who was a Qualified
Controlled Affiliate upon such Person's failure to meet the criteria required to
be a Qualified Controlled Affiliate or (iv) the consummation of any transaction
that constitutes a Change of Control, each outstanding share of Class B
Preferred Stock automatically shall be converted, without further action by any
of the holders of the Class B Preferred Stock or the Corporation, into one fully
paid and nonassessable share of Common Stock.
6.2 Upon (or promptly after the Corporation becomes aware of any
occurrence or condition resulting in) any automatic mandatory conversion of any
shares of Class B Preferred Stock pursuant to Section 6.1, the Corporation shall
promptly give confirmatory written notice to each holder of Class B Preferred
Stock whose shares have been so converted at the address of such holder as set
forth in the records of the Corporation, provided, however, that no failure to
give such confirmatory notice nor any defect therein shall affect the
effectiveness of any automatic mandatory conversion of any shares of Class B
Preferred Stock pursuant to this Section 6. Any such holders shall deliver to
the Corporation the certificates representing the
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shares of Class B Preferred Stock being so converted and each such holder shall
be entitled to receive in exchange therefor a certificate or certificates
representing the number of shares of Common Stock into which the shares of Class
B Preferred Stock so surrendered have been converted. Until such time as the
certificate or certificates representing Class B Preferred Stock which has been
converted are surrendered to the Corporation and a certificate or certificates
representing the shares of Common Stock into which such shares of Class B
Preferred Stock has been converted have been issued and delivered, the
certificate or certificates representing the shares of Class B Preferred Stock
which have been converted shall represent the shares of Common Stock into which
such shares of Class B Preferred Stock have been converted. The Corporation
shall pay all documentary, stamp or similar issue or transfer tax due on the
issue of such shares of Common Stock issuable upon conversion of the Class B
Preferred Stock.
7. Prohibition on Transfer. No holder of shares of Class B Preferred Stock
shall make any sale, transfer, pledge, assignment or other disposition of Class
B Preferred Stock or any interest therein, except for transfers to Qualified
Controlled Affiliates.
8. Cancellation of Shares of Class B Preferred Stock. No share or shares of
Class B Preferred Stock acquired by the Corporation by any reason shall be
reissued, and all such shares shall be cancelled, retired and eliminated from
the shares of Class B Preferred Stock which the Corporation shall be authorized
to issue.
Class C Convertible Redeemable Preferred Stock
1. Class C Stated Value. Each share of Class C Convertible Redeemable
Preferred Stock of the par value $.01 per share (the "Class C Preferred Stock")
shall have a stated value of $36.75 (the "Class C Stated Value"). The
Corporation shall issue fractional shares of Class C Preferred Stock upon the
original issuance, transfer or exchange of a Class C Preferred Stock share,
unless the Corporation and the holder of such Class C Preferred Stock share
agree upon a payment in lieu of any such fractional share.
2. Dividends. No dividend or other distribution shall be declared or paid
on the Common Stock of the Corporation unless a dividend is declared or paid on
each share of the Class C Preferred Stock in an amount equal to the amount that
would have been paid on the number of shares of Common Stock into which such
share of Class C Preferred Stock would be convertible as of the record date for
such declaration or payment if all such shares of Common Stock had been issued
upon conversion of the Class C Preferred Stock on such record date and such
dividends or distributions payable on the Class C Preferred Stock pursuant to
this Section 2 shall be declared and paid in the same medium as that in which
the dividends or distributions on the Common Stock giving rise thereto has been
declared and is to be paid.
3. Class C Liquidation Rights.
3.1 In the event of any liquidation, dissolution or winding up of the
business of the Corporation, whether voluntary or involuntary, each holder of
Class C Preferred Stock shall be entitled to receive, for each share thereof,
out of assets of the Corporation legally available therefor, a preferential
amount in cash equal to (and not more than) the sum of (A) its Class C Stated
Value, plus (B) an amount equal to the amount of all declared but unpaid
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dividends or distributions thereon payable pursuant to Section 2.1. All
preferential amounts to be paid to the holders of Class C Preferred Stock in
connection with such liquidation, dissolution or winding up shall be paid 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 (i) any series of Preferred
Stock whose terms provide that the holders of Class C Preferred Stock should
receive preferential payment with respect to such distribution (to the extent of
such preference) or (ii) Common Stock. If in any such distribution the assets of
the Corporation shall be insufficient to pay the holders of the outstanding
shares of the Class C Preferred Stock (or the holders of any class or series of
capital stock ranking on a parity with the Class C Preferred Stock as to
distributions in the event of a liquidation, dissolution or winding up of the
Corporation) the full amounts to which they shall be entitled, such holders
shall share ratably in any distribution of assets in accordance with the sums
which would be payable on such distribution if all sums payable thereon were
paid in full. In liquidation, shares of Class A Preferred Stock and Class C
Preferred Stock shall rank on a pari passu basis.
3.2 Holders of shares of Class C Preferred Stock shall not be entitled
to receive any amounts with respect to any liquidation, dissolution or winding
up of the Corporation other than the amounts provided in this Section 3. Neither
a merger nor consolidation of the Corporation into or with another corporation
nor a merger or consolidation of any other corporation into or with the
Corporation, nor a sale, transfer, mortgage, pledge or lease of all or any part
of the assets of the Corporation shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this Section 3.
4. Class C Voting Rights.
4.1 Except as otherwise required by law or as otherwise provided herein,
the holders of Class C Preferred Stock (and the holders of any other series of
Preferred Stock entitled to vote as a single class with the holders of Voting
Common) shall vote together with the holders of Voting Common as a single class
on all matters as to which the Voting Common is entitled to vote, and the
holders of Class C Preferred Stock shall be entitled to a number of votes equal
to the number of shares of Voting Common into which their shares of Class C
Preferred Stock are, as of the record date for determining shares entitled to
vote on such matter, convertible pursuant to Section 5 hereof.
4.2 No amendment to the Certificate of Incorporation which alters or
changes, in any way, the powers, preferences or rights of the Class C Preferred
Stock shall be effective if such alteration or change adversely affects the
holders of Class C Preferred Stock unless it has been approved by the vote of
the holders of a majority of shares of Class C Preferred Stock outstanding,
voting separately as a single class.
5. Conversion into Voting Common.
5.1 Class C Conversion Right and Mandatory Conversion.
5.1.1 Unless previously converted under Section 5.1.2, each holder
of Class C Preferred Stock may at any time, and from time to time, convert any
or all of such holder's shares of Class C Preferred Stock into fully paid and
non-assessable shares of Voting
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<PAGE> 23
Common in an amount equal to the quotient of (i) the aggregate Class C Stated
Value of the shares of Class C Preferred Stock which are being converted to
Voting Common divided by (ii) the Class C Conversion Price (determined as
provided in Section 5.2) in effect at the time of such conversion. In order to
exercise the conversion privilege under this Section 5.1.1, the holder of any
shares of Class C Preferred Stock to be converted shall give written notice to
the Corporation at its principal office that such holder elects to convert such
shares of Class C Preferred Stock or a specified portion thereof into shares of
Voting Common as set forth in such notice. In the event the Corporation has
called the Class A Preferred Stock for redemption in connection with a
prospective Change of Control, such notice of conversion from the holder may
condition conversion upon consummation of such Change of Control.
5.1.2 All shares of Class C Preferred Stock then outstanding
automatically shall be converted, without further action by any of the holders
of shares of Class C Preferred Stock or the Corporation, into shares of Voting
Common as hereinafter provided upon the soonest to occur of (a) the one hundred
eightieth (180th) day after the expiration of the covenant set forth in Section
8.3(b) of the Securities Purchase Agreement, (b) tenth anniversary of the
Original Issuance Date, (c) any day after the second anniversary of the Original
Issuance Date on which the Voting Power Ownership Percentage of the Original
Majority Holder and its Qualified Controlled Affiliates exceeds twenty-five
percent (25%) of the total voting power of all outstanding shares of capital
stock of the Corporation, (d) the occurrence of a Trigger Event following any of
the actions set forth in Subsections (i) (other than an event identified in
Section 3.3(e)(i) of the Securities Purchase Agreement with respect to Craig O.
McCaw) and (iii) through (vi), inclusive, of the definition of "Approved Trigger
Event" set forth below under the heading Defined Terms, and (e) immediately upon
any sale, transfer or other disposition of Voting Securities by the Original
Majority Holder or any of its Qualified Controlled Affiliates, if, immediately
following such sale, transfer or disposition, the Voting Power Ownership
Percentage of the Original Majority Holder and its Qualified Controlled
Affiliates is less than 5%. If there is any transfer or other disposition of
shares of Class C Preferred Stock ("Transferred Class C Shares") by the Original
Majority Holder or any Qualified Controlled Affiliate to any Person who is not a
Qualified Controlled Affiliate (or the continued holding of shares of Class C
Preferred Stock by any Person who was a Qualified Controlled Affiliate upon such
Person's failure to meet the criteria required to be a Qualified Controlled
Affiliate ("Retained Class C Shares")) (a "Class C Transfer Event"), then
effective immediately upon such Class C Transfer Event, each Transferred Class C
Share and/or Retained Class C Share shall automatically be converted, without
further action by any of the holders of shares of Class C Preferred Stock or the
Corporation, into shares of Voting Common as hereinafter provided. Upon
conversion, shares of Class C Preferred Stock shall convert into fully paid and
non-assessable shares of Voting Common in an amount equal to the quotient of (i)
the aggregate Class C Stated Value of the shares of Class C Preferred Stock
which are being converted to Voting Common divided by (ii) the Class C
Conversion Price (determined as provided in Section 5.2) in effect at the time
of such conversion. Upon (or promptly after the Corporation becomes aware of any
occurrence or condition resulting in) any automatic mandatory conversion of any
shares of Class C Preferred Stock pursuant to this Section 5.1.2, the
Corporation shall promptly give confirmatory written notice to each holder of
Class C Preferred Stock whose shares have been so converted at the address of
such holder as set forth in the records of the Corporation, provided, however,
that no failure to give such notice nor any defect therein shall affect the
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effectiveness of any automatic mandatory conversion of any shares of Class C
Preferred Stock pursuant to this Section 5.1.2.
5.1.3 At such time as the certificate or certificates representing
the Class C Preferred Stock which has been converted are surrendered to the
Corporation, the Corporation shall issue and deliver a certificate or
certificates representing the number of shares of Voting Common determined
pursuant to Section 5.1.1 or 5.1.2. In case of conversion under Section 5.1.1 of
only a part of the shares of Class C Preferred Stock represented by a
certificate surrendered to the Corporation, the Corporation shall forthwith
issue and deliver a new certificate for the number of shares of Class C
Preferred Stock which have not been converted. Until such time as the
certificate or certificates representing Class C Preferred Stock which has been
converted are surrendered to the Corporation and a certificate or certificates
representing the Voting Common into which such Class C Preferred Stock has been
converted have been issued and delivered, the certificate or certificates
representing the shares of Class C Preferred Stock which have been converted
shall represent the shares of Voting Common into which such shares of Class C
Preferred Stock have been converted. The Corporation shall pay all documentary,
stamp or similar issue or transfer tax due on the issue of shares of Voting
Common issuable upon conversion of the Class C Preferred Stock.
5.2 Class C Conversion Price. The price for the conversion of the Class
C Preferred Stock into Voting Common (the "Class C Conversion Price") shall,
subject to adjustment as hereinafter provided, be $12.25 for each share of
Voting Common.
5.3 Adjustment of the Class C Conversion Price. The Class C Conversion
Price shall be subject to adjustment as follows:
5.3.1 In case the Corporation shall at any time subdivide or combine
the outstanding shares of Common Stock, or make a dividend or other distribution
on the Common Stock in shares of Common Stock, the Class C Conversion Price
shall forthwith be proportionately decreased in the case of a subdivision,
dividend or distribution, or increased in the case of a combination.
5.3.2 Shares of Common Stock issuable by way of dividend or other
distribution on any capital stock of the Corporation shall be deemed to have
been issued immediately after the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution and without consideration.
5.3.3 Whenever the Class C Conversion Price is adjusted as herein
provided, the Corporation shall forthwith cause a copy of a notice to be sent by
first-class mail, postage prepaid, to each holder of Class C Preferred Stock,
showing in reasonable detail the facts requiring such adjustment and the Class C
Conversion Price after such adjustment.
5.3.4 No adjustment of the Class C Conversion Price shall be made if
the amount of such adjustment shall be less than five cents per share of Voting
Common, but in such case any adjustment that would otherwise be required then to
be made shall be carried forward and shall be made at the time and together with
the next subsequent adjustment which, together
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<PAGE> 25
with any adjustment so carried forward, shall amount to not less than five cents
per share; provided that if the Corporation shall at any time subdivide or
combine the outstanding shares of Common Stock or issue any additional shares of
Common Stock as a dividend, such amount of five cents per share (as theretofore
increased or decreased, if such amount shall have been adjusted in accordance
with the provisions of this Section 5.3.4) shall forthwith be proportionately
increased in the case of a combination or decreased in the case of such a
subdivision or stock dividend so as appropriately to reflect the same.
5.3.5 In case of any Organic Change, the holder of each share of
Class C Preferred Stock then outstanding shall thereafter have the right to
receive upon conversion the kind and amount of shares of stock and other
securities and property receivable upon such Organic Change by a holder of the
number of shares of Common Stock which the holder of such share of Class C
Preferred Stock would have had the right to receive upon conversion immediately
prior to such Organic Change, at a price equal to the Class C Conversion Price
then in effect pertaining to such share of Class C Preferred Stock.
5.3.6 No adjustment of the Class C Conversion Price shall be made
and no deemed conversion into Common Stock as contemplated by Section 5.3.5
shall occur upon the consolidation of the Corporation with or its merger,
directly or indirectly, with or into any other corporation if (i) the
corporation resulting from such consolidation or surviving such merger shall
have consolidated net worth at least equal to the consolidated net worth of the
Corporation immediately before the merger, (ii) the surviving or resulting
corporation shall have no class of shares (either authorized or outstanding)
ranking prior to or on a parity with any then outstanding Class C Preferred
Stock (other than any such class of shares with terms identical to any class of
capital stock of the Corporation in existence on or prior to the effective time
of such consolidation or merger), (iii) the surviving or resulting corporation
shall have authorized shares of a class or series of preferred stock equal in
number and having the same express rights and preferences as any then
outstanding shares of Class C Preferred Stock, and (iv) each holder of Class C
Preferred Stock immediately preceding such consolidation or merger shall receive
in the consolidation or merger the same number of shares with the same rights
and preferences of the resulting or surviving corporation. In the event of a
merger or consolidation of the Corporation with or into another corporation the
consolidated net worth of the Corporation and the consolidated net worth of the
resulting or surviving corporation each shall be calculated (in the case of such
resulting or surviving corporation, on a pro forma basis) as of the end of the
calendar quarter immediately preceding the proposed consolidation or merger.
5.3.7 Irrespective of any adjustments in the Class C Conversion
Price or the number or kind of shares purchasable upon conversion of shares of
Class C Preferred Stock, certificates representing shares of Class C Preferred
Stock theretofore or thereafter issued may continue to express the same price
and number and kind of shares previously stated in the certificates for shares
of Class C Preferred Stock.
5.3.8 The Corporation may retain a firm of independent public
accountants of recognized standing, which may be the firm regularly retained by
the Corporation, selected by the Board of Directors of the Corporation, to make
any computation required under this Section 5.3, and a certification by such
firm shall be conclusive evidence of the correctness of any computation made
under this Section 5.3.
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5.4 Fractional Interests. The Corporation may, but shall not be required
to, issue fractions of shares of Voting Common on the conversion of Class C
Preferred Stock. If any fraction of a share of Voting Common would, except for
the provisions of this Section 5.4, be issuable on the conversion of any Class C
Preferred Stock, the Corporation may, in lieu of issuing such fractional share,
either (a) pay cash in an amount equal to the current value of such fraction,
computed on the basis of (i) if the Voting Common is listed on a national
securities exchanger or the NASDAQ-NMS, the last sales price or (ii) if the
Voting Common is not listed on a national securities exchange or the NASDAQ-NMS
but is regularly quoted in the automated quotation system of the NASD, or any
successor thereto, the last bid price, or if there is no reported last bid, the
average of the bid prices, in either case on the last business day prior to the
date of exercise, or, if such computations cannot be made as aforesaid, as the
Board of Directors of the Corporation may in good faith determine or (b) round
such fraction up to a whole share of Voting Common.
6. Redemption of Class C Preferred Stock.
6.1 Corporation's Right to Redeem. Upon or at any time after a Change of
Control, all of the outstanding shares of Class C Preferred Stock shall be
redeemable effective not earlier than upon the consummation of any transaction
that constitutes a Change of Control at the option of the Corporation, out of
funds legally available therefor, in whole but not in part, at a redemption
price of $36.75 per share of Class C Preferred Stock, plus an amount equal to
all accrued or declared but unpaid dividends thereon (the "Class C Redemption
Price").
6.2 Class C Redemption Notice.
6.2.1 If an event constituting a Change of Control occurs, or the
Corporation's Board of Directors approves, or the Corporation enters into an
agreement providing for, a transaction, event or development that constitutes
(or would constitute if consummated) a Change of Control, the Corporation may
call the outstanding shares of Class A Preferred Stock for redemption and set a
date for the redemption which date shall not be earlier than the date such
Change of Control is consummated (the "Class C Redemption Date"). In the event
of a prospective Change of Control, the redemption shall be conditioned upon the
consummation of such Change of Control. Notice of such proposed redemption (the
"Class C Redemption Notice") shall be mailed at least 45 days prior to the Class
C Redemption Date to all holders of shares of Class C Preferred Stock at their
respective addresses as the same shall appear on the stock record books of the
Corporation. The Class C Redemption Notice shall be conclusively presumed to
have been given with respect to the shares of Class C Preferred Stock whether or
not the holders thereof receive the Class C Redemption Notice. Each Class C
Redemption Notice shall state (i) the Class C Redemption Date, (ii) the Class C
Redemption Price, (iii) the place or places where such shares of Class C
Preferred Stock are to be surrendered, and (iv) that dividends on shares of
Class C Preferred Stock to be redeemed shall cease to accrue on the Class C
Redemption Date. No defect in any such notice as to any shares of Class C
Preferred Stock shall affect the proceedings for the redemption of any shares of
Class C Preferred Stock.
6.2.2 Upon surrender in accordance with the Class C Redemption
Notice of the certificates for any shares of Class C Preferred Stock so redeemed
(properly endorsed or
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assigned for transfer, if the Board of Directors shall so require and the notice
shall so state), such shares of Class C Preferred Stock shall be redeemed by the
Corporation which shall make payment to the surrendering holder in an amount
equal to the product of the applicable Class C Redemption Price multiplied by
the number of shares of Class C Preferred Stock being surrendered by such holder
for redemption.
6.2.3 Notwithstanding the foregoing, if the Corporation's Class C
Redemption Notice has been given pursuant to this Section 6 and any holder of
shares of Class C Preferred Stock shall, prior to the close of business on the
third Business Day preceding the Class C Redemption Date, give written notice to
the Corporation in accordance with the provisions of Section 5.1.1 that it
desires to convert its shares of Class C Preferred Stock (accompanied by a
certificate or certificates for such shares of Class C Preferred Stock, duly
endorsed or assigned to the Corporation), then the conversion of such shares of
Class C Preferred Stock shall become effective as provided in Section 5.
6.3 Payment Prior to Class C Redemption Date.
6.3.1 If such Class C Redemption Notice shall have been duly given as
provided above, or if the Corporation shall have given to the bank or trust
company hereinafter referred to irrevocable authorization to give or complete
such Class C Redemption Notice, and if prior to the applicable Class C
Redemption Date the funds necessary for such redemption shall have been
deposited by the Corporation with a bank or trust company in good standing
(which bank or trust company shall have been identified in a written notice
given to the holders whose shares of Class C Preferred Stock are to be
redeemed), organized under the laws of the United States of America or a State
thereof, having a capital surplus and undivided profits aggregating at least
$100,000,000 according to its last published statement of condition, in trust
for the pro rata benefit of the holders of the shares of Class C Preferred Stock
so called for or otherwise subject to redemption, so as to be, and to continue
to be, available therefor, then, notwithstanding that any certificate for shares
of Class C Preferred Stock so called for or otherwise subject to redemption
shall not have been surrendered for cancellation, all shares of Class C
Preferred Stock so called for or otherwise subject to redemption shall no longer
be deemed to be outstanding on and after such Class C Redemption Date, and all
rights with respect to such shares shall forthwith cease and terminate at the
close of business on such Class C Redemption Date, except only the right of the
holders thereof to receive, out of the funds so set aside in trust, the amount
payable on redemption thereof, without interest. Any interest accrued on any
funds so deposited shall be the property of the Corporation and shall be paid to
the Corporation from time to time.
6.3.2 Any funds set aside or deposited, as the case may be, in
accordance with Section 6.3.1 above that remain unclaimed at the end of one year
from the applicable Class C Redemption Date shall be released or repaid to the
Corporation, after which the holders of the shares of Class C Preferred Stock so
called for redemption shall look only to the Corporation for payment of the
amount payable on redemption thereof, without interest, subject to the
applicable law of escheat.
6.4 Corporation's Right to Designate a Purchaser. Notwithstanding the
foregoing, if the Corporation is entitled to call for redemption all of the
outstanding shares of
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Class C Preferred Stock pursuant to Section 6.1, each holder of Class C
Preferred Stock shall, at the request of the Corporation, sell to a Person
designated by the Corporation all (but not less than all) of its shares of Class
C Preferred Stock for a cash purchase price equal to the Class C Redemption
Price. No such sale shall occur earlier than the date of the Change of Control
relating to the Corporation's right to call all of the outstanding shares of
Class C Preferred Stock for redemption, and any holder of Class C Preferred
Stock shall be entitled to convert any outstanding shares of Class C Preferred
Stock into shares of Voting Common as provided in Section 5 by giving written
notice to the Corporation in accordance with the provisions of Section 5.1.1
(accompanied by a certificate or certificates for such shares of Class C
Preferred Stock, duly endorsed or assigned to the Corporation), which conversion
may be conditioned upon the consummation of such Change of Control.
7. Other Provisions.
7.1 Reservation of Voting Common. The Corporation shall at all times
reserve from its authorized Voting Common a sufficient number of shares to
provide for conversion of all Class C Preferred Stock from time to time
outstanding. As a condition precedent to the taking of any action which would
cause an adjustment reducing the Class C Conversion Price, the Corporation will
take such corporate action as may be necessary in order that it may validly and
legally issue to holders of Class C Preferred Stock upon conversion fully paid
and non-assessable shares of Voting Common at such adjusted Class C Conversion
Price. If the Voting Common issuable upon conversion of the Class C Preferred
Stock is listed on any national securities exchange or automated quotation
system of NASD, the Corporation will cause within 60 days of any such conversion
all shares reserved for such conversion to be listed on such exchange or
automated quotation system, subject to official notice of issuance upon such
conversion.
7.2 Notice of Certain Events. If, at any time, the Corporation shall:
7.2.1 Declare any dividend or other distribution upon its Common
Stock;
7.2.2 Propose any capital reorganization or any reclassification of
capital stock of the Corporation, or any consolidation or merger of the
Corporation with or into another corporation, or any conveyance of all or
substantially all the assets of the Corporation, or any voluntary dissolution or
liquidation (or if any involuntary dissolution or liquidation of the Corporation
shall be effected); or
7.2.3 Propose to issue to holders of its Common Stock rights to
purchase or subscribe for capital stock or securities convertible into or
exchangeable for capital stock; then, and in each such case, the Corporation
shall cause to be given to the holders of the Class C Preferred Stock, at least
30 days prior to the date specified in clause (x) or (y) below, as the case may
be, a notice containing a brief description of the proposed action and stating
the date on which (x) a record is to be taken for the purpose of such dividend,
distribution or rights, or (y) such reclassification, reorganization,
consolidation, merger, conveyance, dissolution, or liquidation is to take place
and the date, if any is to be fixed, as of which the holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for securities
or
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other property deliverable upon such reclassification, reorganization,
consolidation, merger, conveyance, dissolution, or liquidation. Such mailing
shall be a condition precedent to the taking of the action proposed to be taken
by the Corporation.
7.3 Adjustments to Class C Conversion Price. Before taking any action
which would cause an adjustment reducing the Class C Conversion Price below the
then par value (if any) of the shares of Voting Common issuable upon conversion
of Class C Preferred Stock, the Corporation will take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Corporation
may validly and legally issue fully paid and non-assessable shares of such
Voting Common at such adjusted Class C Conversion Price.
7.4 Cancellation of Shares. No share or shares of Class C Preferred
Stock acquired by the Corporation for any reason shall be reissued, and all such
shares shall be cancelled, retired and eliminated from the shares of Class C
Preferred Stock which the Corporation shall be authorized to issue.
7.5 Record Holders. The Corporation and its transfer agent, if any, for
the Class C Preferred Stock may deem and treat the record holder of any shares
of Class C Preferred Stock as the sole true and lawful owner thereof for all
purposes, and neither the Corporation nor any such transfer agent shall be
affected by any notice to the contrary.
Defined Terms
For purposes hereof, the following terms shall have the meanings
specified below:
(a) "Affiliate" means, as to any Person, another Person that
directly or indirectly through one or more intermediaries,
Controls, or is Controlled by, or is under common Control with,
such Person. For the purposes of this definition, "Control" when
used with respect to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of
the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; the
terms "Controlling" and "Controlled" have meanings correlative
to the foregoing; provided, that the term "Controlled Affiliate"
as used herein includes Craig O. McCaw and any Affiliate of
Craig O. McCaw that is, at the relevant time, Controlled by
Craig O. McCaw; and further provided, that the Corporation and
the Original Majority Holder shall not be deemed to be direct or
indirect Affiliates of each other.
(b) "Approved Trigger Event" shall mean that the Board of Directors,
by the lesser of (1) the Required Vote or (2) the vote of a
majority of all Directors then in office, has diminished,
changed, amended or granted exceptions or exclusions from the
authority of the Operations Committee, or terminated the
Operations Committee, after:
(i) a Cause event applicable to Craig O. McCaw, the Original
Majority Holder or any Qualified Controlled Affiliate
other than an event that would permit removal of an
Investor Director (other
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than Craig O. McCaw) under Section 3.8 of the
Securities Purchase Agreement;
(ii) advance approval of any such action by the vote
of a majority of the members of the Operations
Committee;
(iii) the failure of the Original Majority Holder or
any of its Controlled Affiliates to purchase,
prior to the expiration of any Option, at least
66 2/3% of the shares of Common Stock that were
available for purchase under that Option on the
Original Issuance Date (after any adjustments
pursuant to Section 1 of such Option Agreement
but disregarding any adjustments pursuant to
Section 1 thereof resulting from the failure to
exercise in full any preceding Option tranche);
(iv) the failure of the Common Stock Holdings of the
Original Majority Holder and its Qualified
Controlled Affiliates for (A) any period of 90
consecutive days or (B) an aggregate of 100 days
in any period of 180 consecutive days, to be at
least 66-2/3% of the Original Majority Holder's
Common Stock Holdings as of the most recent of
(i) the Original Issuance Date and (ii) the date
of exercise of any Option, prior to commencement
of such 90 or 180 consecutive day period;
(v) the Original Majority Holder or any of its
Affiliates has breached any of the covenants set
forth in Section 8.3(b) or 8.3(c) of the
Securities Purchase Agreement, or the Original
Majority Holder has materially breached its duty
to negotiate in good faith with respect to the
matters set forth in Section 8.3(d) of the
Securities Purchase Agreement;
(vi) Craig O. McCaw has breached any of the covenants
set forth in Section 8.3(i) of the Securities
Purchase Agreement or at any time prior to April
4, 2005, Craig O. McCaw shall no longer serve as
an Investor Director and as a member of the
Operations Committee (other than an event
identified in Section 3.3(e)(i) of the
Securities Purchase Agreement with respect to
Craig O. McCaw); or
(vii) the Operations Committee Termination Date.
(c) "Cause" has the meaning set forth in Section 3.3(e) of
the Securities Purchase Agreement.
(d) "Change of Control" shall have occurred if at any time
any of the following events shall have occurred:
(i) The Corporation is merged or consolidated or
reorganized into or with another corporation or
other legal person, and as a result of
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such merger, consolidation or reorganization
less than a majority of the combined voting
power of the then-outstanding securities of such
corporation or person immediately after such
transaction is held in the aggregate by the
holders of Voting Securities of the Corporation
immediately prior to such transaction, including
Voting Securities issuable upon exercise or
conversion of options, warrants or other
securities or rights;
(ii) The Corporation sells or otherwise transfers all
or substantially all of its assets to any other
corporation or other legal person, and as a
result of such sale or other transfer of assets,
less than a majority of the combined voting
power of the then-outstanding securities of such
corporation or person immediately after such
sale or transfer is held in the aggregate by the
holders of Voting Securities of the Corporation
immediately prior to such sale or transfer,
including Voting Securities issuable upon
exercise or conversion of options, warrants or
other securities or rights;
(iii) There is a report filed on Schedule 13D or
Schedule 14D-1 (or any successor schedule, form
or report), each as promulgated pursuant to the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), disclosing that any person (as
the term "person" is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act) has become
the beneficial owner (as the term "beneficial
owner" is defined under Rule 13d-3 or any
successor rule or regulation promulgated under
the Exchange Act) of securities representing 40%
or more of the Voting Securities of the
Corporation, including Voting Securities
issuable upon exercise or conversion of options,
warrants or other securities or rights;
(iv) The Corporation files a report or proxy
statement with the Securities and Exchange
Commission pursuant to the Exchange Act
disclosing in response to Form 8-K or Schedule
14A (or any successor schedule, form or report
or item therein) that a change in control of the
Corporation has occurred; or
(v) During any period of two consecutive years,
beginning on the date when Class A Directors
first are elected or appointed to the Board of
Directors of the Corporation, individuals who at
the beginning of any such period constitute the
Directors of the Corporation cease for any
reason to constitute at least a majority
thereof, unless the election, or the nomination
for election by the Corporation's stockholders,
of each Director of the Corporation first
elected during such period was approved by a
vote of at least two-thirds of the Directors of
the Corporation then still in office who were
Directors of the Corporation at the beginning of
any such period.
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Notwithstanding the foregoing provisions of Subsections (iii)
and (iv) of this definition, a "Change of Control" shall not be
deemed to have occurred solely because (i) the Corporation, (ii)
an entity in which the Corporation directly or indirectly
beneficially owns 50% or more of the voting securities, or (iii)
any Corporation-sponsored employee stock ownership plan or other
employee benefit plan of the Corporation, either files or
becomes obligated to file a report or proxy statement under or
in response to Schedule 13D, Schedule 14D-1, Form 8-K or
Schedule 14A (or any successor schedule, form or report or item
therein) under the Exchange Act, disclosing beneficial ownership
by it of Voting Securities, whether in excess of 50% or
otherwise, or because the Corporation reports that a change of
control of the Corporation has or may have occurred or will or
may occur in the future by reason of such beneficial ownership.
(e) "Common Stock" shall mean Voting Common and all other
classes of the Corporation's common stock.
(f) "Common Stock Holdings" means (i) the shares of Voting
Common issued by the Corporation to the Original
Majority Holder on April 4, 1995 pursuant to the
Securities Purchase Agreement plus (ii) the shares of
Voting Common issued or issuable as a result of the
conversion of the Class A Preferred Stock (and any
shares of Class C Preferred Stock into which shares of
Class A Preferred Stock have been converted) and/or the
Class B Preferred Stock plus (iii) any shares of Voting
Common acquired pursuant to exercise of the Options, in
each case subject to any adjustments to reflect changes
in the Corporation's capital structure.
(g) "Currently Announced Transactions" shall have the
meaning set forth in Section 4.19 of the Securities
Purchase Agreement.
(h) "Eligible Secured Party" shall mean any broker,
investment bank, bank or other financial institution to
whom shares of Class Preferred Stock have been assigned
or pledged as collateral that has agreed, by written
agreement in form and substance reasonably satisfactory
to the Corporation, (i) to sell to a Person designated
by the Corporation, upon the request of the Corporation,
all (but not less than all) of any shares of Class C
Preferred Stock held by it that the Corporation is
entitled to call for redemption pursuant to Section 6.1
under the heading Class C Convertible Redeemable
Preferred Stock for a cash purchase price equal to the
Class C Redemption Price, provided that such sale shall
not occur earlier than the date of the Change of Control
relating to the Corporation's right to call the Class C
Preferred Stock for redemption and until such purchase
the Eligible Secured Party shall be entitled to convert
any such shares of Class C Preferred Stock into shares
of Voting Common (which conversion may be conditioned
upon the consummation of such Change of Control) and
(ii) to transfer any shares of Class A Preferred Stock
or Class C Preferred Stock, or any interest therein,
only to a Person that has agreed, by written agreement
in form and substance reasonably
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satisfactory to the Corporation, (A) to comply with (i)
above with respect to any interest in any shares of
Class A Preferred Stock or Class C Preferred Stock held
by such transferee and (B) not to transfer any interest
in shares of Class A Preferred Stock or Class C
Preferred Stock unless the transferee agrees, by written
agreement in form and substance reasonably satisfactory
to the Corporation, to comply with the terms of this
clause (ii) with respect to any interest in any shares
of Class A Preferred Stock or Class C Preferred Stock
held by such transferee.
(i) "First Option" shall mean the option to acquire up to
15,000,000 shares of Voting Common (subject to
adjustment as provided therein) on or before the second
anniversary of the Original Issuance Date, issued by the
Corporation to an Affiliate of the Original Majority
Holder on the Original Issuance Date.
(j) "Indentures" shall mean the Indenture dated as of August
15, 1993 between the Corporation and The Bank of New
York, as Trustee, the Indenture dated as of February 16,
1994 between the Corporation and The Bank of New York,
as Trustee, and amendments or supplemental indentures
from time to time entered into in accordance with the
terms thereof, including those to which the Corporation
would become subject pursuant to the Currently Announced
Transactions.
(k) "Investor Directors" shall mean all Class A Directors,
Class B Directors and any other Directors elected as a
member of the Board of Directors pursuant to designation
by the Original Majority Holder or its Qualified
Controlled Affiliates in accordance with the Securities
Purchase Agreement.
(l) "NASD" shall mean the National Association of Securities
Dealers.
(m) "NASDAQ-NMS" shall mean the NASD Automated Quotation
National Market System.
(n) "Operations Committee Termination Date" shall mean April
4, 2005, or, if the Original Majority Holder acts
pursuant to Section 3.3(f) of the Securities Purchase
Agreement to renew its rights under the Securities
Purchase Agreement with respect to the Operations
Committee and the Board of Directors approves such
renewal by a Required Vote, April 4, 2015.
(o) "Options" shall mean the First Option, the Second Option
and the Third Option.
(p) "Organic Change" shall mean any of the following
actions:
(i) a reclassification or change of the outstanding
shares of Common Stock (other than a change in
par value, or from par value to no par
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value, or from no par value to par value, or as
a result of a subdivision or combination, or the
authorization of different classes of Common
Stock);
(ii) a sale or conveyance of another corporation of
all or substantially all the assets of the
Corporation; or
(iii) a consolidation of the Corporation with, or
merger of the Corporation with or into, another
corporation (other than a consolidation or
merger contemplated by Section 6.3.6 under the
heading Class A Convertible Redeemable Preferred
Stock or contemplated by Section 5.3.6 under the
heading Class C Convertible Redeemable Preferred
Stock).
(q) "Original Issuance Date" shall mean the date of initial
issuance of Class A Preferred Stock.
(r) "Original Majority Holder" shall mean that holder of
Class A Preferred Stock whose Controlled Affiliates, on
the Original Issuance Date, owned a majority of the
shares of Class A Preferred Stock and Class B Preferred
Stock.
(s) "Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock
company, trust, unincorporated association, joint
venture, governmental authority or other entity of
whatever nature or a group, including without limitation
any pension, profit sharing or other benefit plan or
trust.
(t) "Qualified Controlled Affiliate" means any Controlled
Affiliate of the Original Majority Holder that has
agreed, by a written agreement in form and substance
reasonably satisfactory to the Corporation, to be bound
by all the Transaction Agreements (as such term is
defined in Section 10.1 of the Securities Purchase
Agreement) with respect to its ownership of securities
of the Corporation as fully as if it were the Original
Majority Holder.
(u) "Required Vote" shall mean the vote of the lesser of (i)
two-thirds of the members of the Board of Directors, or
(ii) at least that number of members as equals (A) the
total number of members of the Board of Directors minus
(B) the sum of (x) the number of Investor Directors,
plus (y) the number of Directors who are designees
(whether by contract or pursuant to the terms of any
class or series of the Corporation's capital stock) of
or Affiliates of any Person having a material direct or
indirect pecuniary interest (other than in such Person's
capacity as a holder of Voting Common) in the matter
with respect to which the Required Vote is taken plus
(z) one.
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(v) "Rescission Event" shall mean the following actions if
taken pursuant to a Required Vote:
(i) any termination of employment of a person
holding the position of President, Chief
Operating Officer or Chief Executive Officer who
was elected or appointed to that position
pursuant to the nomination of the Operations
Committee; or
(ii) rescission of any action taken by the Operations
Committee.
(w) "Second Option" shall mean the option to acquire up to
15,000,000 shares of Voting Common (subject to
adjustment as provided therein) on or before fourth
anniversary of the Original Issuance Date issued by the
Corporation to the Original Majority Holder on the
Original Issuance Date.
(x) "Securities Purchase Agreement" means the Securities
Purchase Agreement dated as of April 4, 1995 by and
among the Corporation, the Original Majority Holder and
Craig O. McCaw.
(y) "Third Option" shall mean the option to acquire up to
5,000,000 shares of Voting Common (subject to adjustment
as provided therein) on or before sixth anniversary of
the Original Issuance Date issued by the Corporation to
the Original Majority Holder on the Original Issuance
Date.
(z) "Voting Common" shall mean shares of Class A Common
Stock, par value $.001 per share.
(aa) "Voting Power Ownership Percentage" means the percentage
ownership calculated by dividing (i) the aggregate
number of votes in the election of Directors to which
all shares of Voting Securities owned by the applicable
Person or Persons and their respective Controlled
Affiliates are entitled, howsoever and whenever
acquired, by (ii) the aggregate number of votes in the
election of Directors to which all issued and
outstanding Voting Securities are entitled. For these
purposes: (A) Voting Securities issuable upon exercise
or conversion of options, warrants or other securities
or rights shall not be included, other than the Class A
Preferred Stock, which shall be included based on the
number of shares of Voting Common into which such shares
of Class A Preferred Stock are convertible as of any
date as of which Voting Power Ownership Percentage is
calculated for purposes hereof, (B) restricted stock of
the Corporation that is not treated by the Corporation
as outstanding shall not be included and (C) the
Corporation's Class B Common Stock shall be deemed to
have one vote per share in the election of Directors.
(bb) "Voting Securities" shall mean Voting Common and all
other classes of capital stock of the Corporation that
are entitled to vote generally in the election of
directors of the Corporation (including, without
limitation, the
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Class A Preferred Stock and the Class C Preferred Stock,
but excluding the Class B Preferred Stock)."
Preferred Stock
Authority is hereby expressly granted to the Board of Directors
from time to time to issue the Preferred Stock as Preferred
Stock of one or more series and in connection with the creation
of any such series to fix by the resolution or resolutions
providing for the issue of shares thereof the designation,
voting powers, preferences, and relative, participating,
optional, or other special rights of such series, and the
qualifications, limitations, or restrictions thereof. Such
authority of the Board of Directors with respect to each such
series shall include, but not be limited to, the determination
of the following:
(a) the distinctive designation of, and the number of shares
comprising, such series, which number may be increased
(except where otherwise provided by the Board of
Directors in creating such series) or decreased (but not
below the number of shares thereof then outstanding)
from time to time by like action of the Board of
Directors;
(b) the dividend rate or amount for such series, the
conditions and dates upon which such dividends shall be
payable, the relation which such dividends shall bear to
the dividends payable on any other class or classes or
any other series of any class or classes of stock, and
whether such dividends shall be cumulative, and if so,
from which date or dates for such series;
(c) whether or not the shares of such series shall be
subject to redemption by the Corporation and the times,
prices, and other terms and conditions of such
redemption;
(d) whether or not the shares of such series shall be
subject to the operation of a sinking fund or purchase
fund to be applied to the redemption or purchase of such
shares and if such a fund be established, the amount
thereof and the terms and provisions relative to the
application thereof;
(e) whether or not the shares of such series shall be
convertible into or exchangeable for shares of any other
class or classes, or of any other series of any class or
classes, of stock of the Corporation and if provision be
made for conversion or exchange, the times, prices,
rates, adjustments, and other terms and conditions of
such conversion or exchange;
(f) whether or not the shares of such series shall have
voting rights, in addition to the voting rights provided
by law, and if they are to have such additional voting
rights, the extent thereof;
(g) the rights of the shares of such series in the event of
any liquidation, dissolution, or winding up of the
Corporation or upon any distribution of its assets; and
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<PAGE> 37
(h) any other powers, preferences, and relative, participating,
optional, or other special rights of the shares of such series,
and the qualifications, limitations, or restrictions thereof,
to the full extent now or hereafter permitted by law and not
inconsistent with the provisions hereof.
Upon the effectiveness of the filing of this Restated Certificate of
Incorporation, each share of common stock, $.01 par value, of the
Corporation heretofore outstanding shall be reclassified, changed and
converted into 41,670 shares of Voting Common and 17,830 shares of
Non-Voting Common.
5. The Board of Directors is authorized to make, alter or repeal the
by-laws of the Corporation. Election of directors need not be by written ballot.
6. Each person who is or was or had agreed to become a Director or officer
of the Corporation, or each such person who is or was serving or had agreed to
serve at the request of the Board of Directors or an officer of the Corporation
as an employee or agent of the Corporation or as a Director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise (including the heirs, executors, administrators or estate of such
person), shall be indemnified by the Corporation to the full extent permitted by
the General Corporation Law of the State of Delaware or any other applicable
laws as now or hereafter in effect. Without limiting the generality or effect of
the foregoing, the Corporation may enter into one or more agreements with any
person which provide for indemnification greater or different than that provided
in this Article. No amendment to or repeal of this Article 6 shall apply to or
have any effect on the right to indemnity permitted or authorized hereunder for
or with respect to claims asserted before or after such amendment or repeal
arising from acts or omissions occurring in whole or in part before the
effective date of such amendment or repeal.
7. To the fullest extent permitted by the Delaware General Corporation Law
as the same exists or may hereafter be amended, a director of this Corporation
shall not be liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director. No amendment to or repeal of this
Article 7 shall apply to or have any effect on the liability or alleged
liability of any Director of the Corporation for or with respect to any acts or
omissions of such Director occurring prior to such amendment or repeal.
8. Subject to any rights granted to the holders of any class or series of
stock having preference over the Voting Common and Non-Voting Common as to
dividends or upon liquidation, the directors shall be divided into three
classes, as nearly equal in number as possible. Upon the consummation of the
merger of Nextel with and into the Corporation, each class of directors of
Nextel shall be deemed to have been elected for a term expiring at the annual
meeting of stockholders of the Corporation at which their terms as directors of
Nextel would have expired, with members of each class to hold office until their
successors are elected and qualified. At each succeeding annual meeting of the
stockholders held in the third year following the year of their election.
9. Subject to any rights granted to the holders of any class or series of
stock having a preference over the Voting Common and Non-Voting Common as to
dividends or upon liquidation to elect additional directors under specified
circumstances, any action required or
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permitted to be taken by the stockholders of the Corporation must be effected at
a duly called annual or special meeting of the stockholders of the Corporation
and may not be effected by any consent in writing of such stockholders.
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