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Exhibit 3.1
ARTICLES OF AMENDMENT
TO
THE ARTICLES OF INCORPORATION
OF
CFW COMMUNICATIONS COMPANY
1. The name of the corporation is CFW Communications Company.
2. Pursuant to Section 13.1-639 of the Virginia Stock Corporation
Act and the authority conferred upon the Board of Directors by
the Articles of Incorporation of the Corporation, the Articles
of Incorporation are hereby amended to create a new series of
Preferred Stock to consist of 112,500 shares of Senior
Cumulative Convertible Preferred Stock, Series B, by adding to
Article II of such Articles of Incorporation, a new section
entitled, "Senior Cumulative Convertible Preferred Stock, Series
B", attached hereto as Appendix I.
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3. The amendment to the Articles of Incorporation of the
Corporation was duly adopted by the Board of Directors of the
Corporation on May 17, 2000. Shareholder action was not
required.
4. These Articles of Amendment shall become effective on July 12,
2000 at 10:00 a.m.
Dated: July 11, 2000 CFW COMMUNICATIONS COMPANY
By: _______________________________
Name:
Title:
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APPENDIX 1
TERMS OF THE SENIOR CUMULATIVE
CONVERTIBLE PREFERRED STOCK, SERIES B
OF
CFW COMMUNICATIONS COMPANY
1. Number; Rank. The number of authorized shares of Senior Cumulative
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Convertible Preferred Stock, Series B (the "Series B Preferred Stock") shall be
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112,500. The Series B Preferred Stock shall, with respect to dividend rights
and rights on liquidation, dissolution and winding up rank senior to all classes
of the Company's common stock, no par value per share ("Common Stock"), and to
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each other class of capital stock of the Company now or hereafter established
(collectively, the "Junior Securities"). The definition of Junior Securities
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shall also include any rights or options exercisable for or convertible into any
of the Junior Securities.
2. Dividends.
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(a) Each holder of Series B Preferred Stock shall be entitled to
receive, in respect of each Dividend Period, when, as and if declared by the
Board of Directors of the Company, out of funds legally available for the
payment of dividends, cumulative dividends in an amount per share equal to the
excess (if any) of (i) the Applicable Percentage of the Accreted Value as of the
immediately preceding Dividend Payment Date (or, for the initial Dividend
Period, as of the date of issuance) over (ii) the amount of any regular cash
dividends per share of Series B Preferred Stock that have been paid during such
Dividend Period pursuant to paragraph 2(d). Subject to the provisions of
paragraph 2(b), dividends paid pursuant to this paragraph 2(a) shall be payable
in cash in arrears semi-annually on June 30 and December 31 of each year (each
of such dates being a "Dividend Payment Date" and each such semi-annual period
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being a "Dividend Period"). Such dividends shall accrue from the date of issue
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(except that dividends on any amounts added to the Accreted Value pursuant to
paragraph 2(b) shall accrue from the date such amounts are added to the Accreted
Value), whether or not in any Dividend Period or Periods there shall be funds of
the Company legally available for the payment of such dividends. Each such
dividend shall be payable to the holders of record of shares of the Series B
Preferred Stock on June 1 and December 1, as they appear on the stock records of
the Company at the close of business on such record dates. The date on which
the Company initially issues any share of Series B Preferred Stock shall be
deemed to be its "date of issue" regardless of the number of times transfer of
such share is made on the stock records maintained by or for the Company and
regardless of the number of certificates which may be issued to evidence such
share.
(b) If dividends are not paid in cash on any Dividend Payment Date for
the immediately preceding Dividend Period (or portion thereof if less than a
full Dividend Period), the unpaid amount shall be added to the Accreted Value
for purposes of calculating succeeding periods' dividends. Notwithstanding the
addition to Accreted Value, the Company may pay, when, as and if declared by the
Board of Directors of the Company, the amount of dividends previously added to
the Accreted Value pursuant to the preceding sentence, and, if and when so
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paid, the Accreted Value shall be reduced by the amount of such payments;
provided that if on the date on which any such dividend is declared the Daily
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Price of a share of Common Stock is equal to or exceeds the then applicable
Conversion Price, then the Company shall declare and pay such dividend in the
number of shares of Common Stock determined by dividing the cash amount of such
dividend that the Company otherwise would pay by the then applicable Conversion
Price, and the Accreted Value shall be reduced by the amount of cash the Company
otherwise would have paid.
(c) The Applicable Percentage for each full Dividend Period for the
Series B Preferred Stock shall be 4.25%. The Applicable Percentage for the
initial Dividend Period, or any other period shorter or longer than a full
Dividend Period, on the Series B Preferred Stock shall be computed on the basis
of a per annum rate of 8.50% and the actual number of days elapsed over twelve
30-day months and a 360-day year. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on the
Series B Preferred Stock that may be in arrears.
(d) In case the Company shall fix a record date for the making of any
dividend or distribution to holders of Common Stock, whether payable in cash,
securities or other property (other than dividends or distributions payable
solely in Common Stock), the holder of each share of Series B Preferred Stock on
such record date shall be entitled to receive an equivalent dividend or
distribution based on the number of shares of Common Stock into which such share
of Series B Preferred Stock is convertible on such record date (disregarding any
Minimum Conversion Price then in effect).
(e) So long as any shares of the Series B Preferred Stock are
outstanding, no Junior Securities shall be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any shares of any such stock) by the Company,
directly or indirectly (except by conversion into or exchange for Junior
Securities) or any cash dividend made on any Junior Security other than the
ordinary dividend on the Company's Common Stock as determined and declared by
the Board in which the holders of the Series B Preferred Stock participate in
accordance with subparagraph (d) above, unless in each case (i) the full
dividends on all outstanding shares of the Series B Preferred Stock shall have
been paid or set apart for payment for all past Dividend Periods and (ii)
sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the Series B Preferred
Stock.
3. Liquidation Preference.
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(a) In the event of any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, before any payment or distribution of
the assets of the Company (whether capital or surplus) shall be made to or set
apart for the holders of Junior Securities, the holder of each share of Series B
Preferred Stock shall be entitled to receive an amount per share equal to the
Liquidation Value of such share on the date of distribution, and such holders
shall not be entitled to any further payment. If, upon any liquidation,
dissolution or winding up of the Company, the assets of the Company, or proceeds
thereof, distributable among
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the holders of the shares of Series B Preferred Stock shall be insufficient to
pay in full the preferential amount aforesaid, then such assets, or the proceeds
thereof, shall be distributed among the holders of shares of Series B Preferred
Stock ratably in accordance with the respective amounts that would be payable on
such shares of Series B Preferred Stock if all amounts payable thereon were paid
in full. Solely for the purposes of this paragraph 3, neither the sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Company nor the consolidation or merger of the Company with or into one or more
other entities shall be deemed to be a liquidation, dissolution or winding-up of
the Company.
(b) After payment shall have been made in full to the holders of the
Series B Preferred Stock, as provided in this paragraph 3, any other series or
class or classes of Junior Securities shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any and all assets
remaining to be paid or distributed to holders of capital stock of the Company,
and the holders of the Series B Preferred Stock shall not be entitled to share
therein.
4. Conversion.
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(a) Subject to the provisions of this paragraph 4, each holder of
shares of Series B Preferred Stock shall have the right, at any time and from
time to time, at such holder's option, to convert its outstanding shares of
Series B Preferred Stock, in whole or in part, into fully paid and non-
assessable shares of Common Stock. Subject to subparagraph 4(a)(ii) below, the
number of shares of Common Stock deliverable upon conversion of one share of
Series B Preferred Stock shall be equal to (i) the Accreted Value of such share
on the date of conversion, plus any dividends accrued to such date (whether or
not earned or declared) since the end of the previous Dividend Period, divided
by (ii) the Conversion Price on such date. No notice delivered by the Company
pursuant to paragraph 5 will limit in any way any holder's rights to convert
pursuant to this paragraph 4(a). In order to exercise the conversion privilege
set forth in paragraph 4(a), the holder of the shares of Series B Preferred
Stock to be converted shall surrender the certificate representing such shares
at the office of the Company, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Each
conversion pursuant to paragraph 4(a) shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of Series B Preferred Stock shall have been surrendered and such
notice received by the Company as aforesaid, and the person in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder of
record of the shares of Common Stock represented thereby at such time on such
date. Effective upon such conversion, the shares of Series B Preferred Stock so
converted shall no longer be deemed to be outstanding, and all rights of a
holder with respect to such shares surrendered for conversion shall immediately
terminate except the right to receive the Common Stock and other amounts payable
pursuant to this paragraph 4.
(i) In connection with any conversion of shares of Series B
Preferred Stock into shares of Common Stock occurring within 30 days of the
Company's delivery of a
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Change of Control Notice pursuant to the provisions of paragraph 4(m), the
number of shares of Common Stock deliverable upon conversion of one share of
Series B Preferred Stock shall be equal to (x) the Change of Control Amount,
divided by (y) the Conversion Price on such date.
(b) Unless the shares issuable on conversion pursuant to this
paragraph 4 are to be issued in the same name as the name in which such shares
of Series B Preferred Stock are registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in form reasonably
satisfactory to the Company, duly executed by the holder or the holder's duly
authorized attorney and an amount sufficient to pay any transfer or similar tax.
As promptly as possible, but in any event within 5
days, after the surrender by the holder of the certificates for shares of Series
B Preferred Stock as aforesaid, the Company shall issue and shall deliver to
such holder, or on the holder's written order to the holder's transferee, a
certificate or certificates for the whole number of shares of Common Stock
issuable upon the conversion of such shares in accordance with the provisions of
this paragraph 4.
All shares of Common Stock delivered upon conversion of
the Series B Preferred Stock will upon delivery be duly and validly issued and
fully paid and non-assessable, free of all liens and charges and not subject to
any preemptive rights.
(c) Upon delivery to the Company by a holder of shares of Series B
Preferred Stock of a notice of election to convert pursuant to paragraph 4(a)
above, the right of the Company to purchase such shares of Series B Preferred
Stock shall terminate, regardless of whether a notice has been mailed pursuant
to paragraph 5.
From the date of delivery by a holder of shares of
Series B Preferred Stock of such notice of election to convert, in lieu of
dividends on such Series B Preferred Stock pursuant to paragraph 2, such Series
B Preferred Stock shall participate equally and ratably with the holders of
shares of Common Stock in all dividends paid on the Common Stock.
Except as provided herein, the Company shall make no
payment or adjustment for accrued dividends on shares of Series B Preferred
Stock, whether or not in arrears, on conversion of such shares or for dividends
in cash on the shares of Common Stock issued upon such conversion.
(d) The Company shall at all times reserve and keep available, free
from preemptive rights, such number of its authorized but unissued shares of
Common Stock as shall be required for the purpose of effecting conversion of the
Series B Preferred Stock.
Prior to the delivery of any securities which the
Company shall be obligated to deliver upon conversion of the Series B Preferred
Stock, the Company shall comply with all applicable federal and state laws and
regulations which require action to be taken by the Company.
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(e) The Company will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
Common Stock on conversion of the Series B Preferred Stock pursuant hereto;
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock in a name other than that of the holder of the Series B
Preferred Stock to be converted and no such issue or delivery shall be made
unless and until the person requesting such issue or delivery has paid to the
Company the amount of any such tax or has established, to the satisfaction of
the Company, that such tax has been paid.
(f) In connection with the conversion of any shares of Series B
Preferred Stock, no fractional shares of Common Stock shall be issued, but in
lieu thereof the Company shall pay to the holder thereof the value of such share
in cash as determined by reference to the Daily Price as of the date of
conversion of such fractional share.
(g) Conversion Price.
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(i) In order to prevent dilution of the conversion rights
granted under this paragraph 4, the Conversion Price shall be subject to
adjustment from time to time pursuant to this paragraph (g).
(ii) Subject to subparagraph (g) (iv) below, if and
whenever on or after the original date of issuance of the Series B Preferred
Stock the Company issues or sells, or in accordance with paragraph (h) is deemed
to have issued or sold, any shares of its Common Stock without consideration or
at a price per share less than the Conversion Price in effect immediately prior
to such issuance or sale (or deemed issuance or sale), then in each such case,
the Conversion Price, upon each such issuance or sale, except as hereinafter
provided, shall be lowered so as to be equal to an amount determined by
multiplying the Conversion Price in effect immediately prior to such issuance or
sale by the following fraction:
P + N
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P + F
where
P = the number of shares of Common Stock outstanding immediately
prior to such issuance or sale, assuming the exercise or
conversion of all outstanding securities exercisable for or
convertible into Common Stock at any time on or after the date
of such calculation
N = the number of shares of Common Stock which the net aggregate
consideration, if any, received by the Company for the total
number of such additional shares of Common Stock so issued or
sold would purchase at the Conversion Price in effect
immediately prior to such issuance or sale
F = the number of additional shares of Common Stock so issued or
sold
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(iii) Notwithstanding the foregoing, there shall be no
adjustment in the Conversion Price as a result of (A) any issue or sale (or
deemed issue or sale) of Options to acquire shares of Common Stock to employees
of the Company, or shares of Common Stock issuable pursuant to the exercise of
such Options, pursuant to stock option plans approved by the Company's Board of
Directors so long as the exercise price of such Options is not less than the
Current Market Price Per Common Share on the date such Options are issued as
determined by the Company's Board of Directors in its good faith judgment, or
any issuance of shares of Common Stock pursuant to the exercise of Options
outstanding as of July 11, 2000; (B) the issuance of up to 3,716,400 shares of
Common Stock to the sellers in connection with the closing of the Company's
acquisition of R&B Communications, Inc. and the issuance to employees of R&B
Communications, Inc. of options to acquire shares of Common Stock (not exceeding
65,000 shares in the aggregate) pursuant to the terms set forth in Exhibit G to
the Agreement and Plan of Merger, dated as of June 16, 2000, by and among R&B
Communications, Inc., R&B Combination Company and the Company; (C) Common Stock
issued pursuant to and in accordance with the terms of the Company's Dividend
Reinvestment Plan (so long as such shares are issued at a price which is no less
than the Daily Price on the date of issuance) or 1997 Employee Stock Purchase
Plan, each as in effect as of July 11, 2000; and (D) the issuance of up to
600,000 shares of Common Stock in connection with the purchase by the Company of
minority interests in the Virginia PCS Alliance, the West Virginia PCS Alliance
and/or the Virginia RSA 6 Cellular Limited Partnership (assuming that the
aggregate purchase price for all such minority interests does not exceed $21
million).
(ii) Unless the requisite consent of the holders of the
Common Stock has been obtained, in no event shall the Conversion Price be
adjusted below $35.50 (the "Minimum Conversion Price"). If such consent is
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obtained, this subparagraph 4(g)(iv) shall be of no further force or effect.
(h) Effect on Conversion Price of Certain Events. For purposes of
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determining the adjusted Conversion Price under paragraph (g), the following
shall be applicable:
(i) Issuance of Rights or Options. Except for Options
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granted in accordance with the provisions of paragraph (g)(iii) above or in
accordance with the Company's Rights Agreement dated as of February 26, 2000, if
the Company in any manner grants or sells any Options and the price per share
for which Common Stock is issuable upon the exercise of such Options, or upon
conversion or exchange of any Convertible Securities issuable upon exercise of
such Options, is less than the Conversion Price in effect immediately prior to
the time of the granting or sale of such Options, then the total maximum number
of shares of Common Stock issuable upon the exercise of such Options or upon
conversion or exchange of the total maximum amount of such Convertible
Securities issuable upon the exercise of such Options shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
granting or sale of such Options for such price per share. For purposes of this
paragraph, the "price per share for which Common Stock is issuable" shall be
determined by dividing (A) the total amount, if any, received or receivable by
the Company as consideration for the granting or sale of such Options, plus the
minimum aggregate amount of additional consideration payable
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to the Company upon exercise of all such Options, plus in the case of such
Options which relate to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the issuance or
sale of such Convertible Securities and the conversion or exchange thereof, by
(B) the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options. No further
adjustment of the Conversion Price shall be made when Convertible Securities are
actually issued upon the exercise of such Options or when Common Stock is
actually issued upon the exercise of such Options or the conversion or exchange
of such Convertible Securities.
(ii) Issuance of Convertible Securities. If the Company in
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any manner issues or sells any Convertible Securities and the price per share
for which Common Stock is issuable upon conversion or exchange thereof is less
than (a) the Conversion Price in effect immediately prior to the time of such
issue or sale, then the maximum number of shares of Common Stock issuable upon
conversion or exchange of such Convertible Securities shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
issuance or sale of such Convertible Securities for such price per share. For
the purposes of this paragraph, the "price per share for which Common Stock is
issuable" shall be determined by dividing (A) the total amount received or
receivable by the Company as consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (B) the total maximum number of shares of Common Stock issuable upon
the conversion or exchange of all such Convertible Securities. No further
adjustment of the Conversion Price shall be made when Common Stock is actually
issued upon the conversion or exchange of such Convertible Securities, and if
any such issue or sale of such Convertible Securities is made upon exercise of
any Options for which adjustments of the Conversion Price had been or are to be
made pursuant to other provisions of this paragraph (h), no further adjustment
of the Conversion Price shall be made by reason of such issue or sale.
(iii) Change in Option Price or Conversion Rate. Except for
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Options granted in accordance with the provisions of paragraph (g)(iii) above or
in accordance with the Company's Rights Agreement dated as of February 26, 2000,
if the purchase price provided for in any Options, the additional consideration,
if any, payable upon the conversion or exchange of any Convertible Securities or
the rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock changes at any time, the Conversion Price in
effect at the time of such change shall be immediately adjusted to the
Conversion Price which would have been in effect at such time had such Options
or Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case may be, at the
time initially granted, issued or sold; provided that if such adjustment would
result in an increase of the Conversion Price then in effect, such adjustment
shall not be effective until 30 days after written notice thereof has been given
by the Company to all holders of the Series B Preferred Stock. For purposes of
paragraph (h), if the terms of any Option or Convertible
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Security which was outstanding as of the date of issuance of the Series B
Preferred Stock are changed in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such change; provided that no such change shall at
any time cause the Conversion Price hereunder to be increased.
(iv) Treatment of Expired Options and Unexercised Convertible
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Securities. Upon the expiration of any Option or the termination of any right
to convert or exchange any Convertible Security without the exercise of any such
Option or right, the Conversion Price then in effect hereunder shall be adjusted
immediately to the Conversion Price which would have been in effect at the time
of such expiration or termination had such Option or Convertible Security, to
the extent outstanding immediately prior to such expiration or termination,
never been issued; provided that if such expiration or termination would result
in an increase in the Conversion Price then in effect, such increase shall not
be effective until 30 days after written notice thereof has been given to all
holders of the Series B Preferred Stock. For purposes of paragraph (h), the
expiration or termination of any Option or Convertible Security which was
outstanding as of the date of issuance of the Series B Preferred Stock shall not
cause the Conversion Price hereunder to be adjusted unless, and only to the
extent that, a change in the terms of such Option or Convertible Security caused
it to be deemed to have been issued after the date of issuance of the Series B
Preferred Stock.
(i) Calculation of Consideration Received. If any Common Stock,
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Option or Convertible Security is issued or sold or deemed to have been issued
or sold for cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor. If any Common Stock, Option or
Convertible Security is issued or sold for a consideration other than cash, the
amount of the consideration other than cash received by the Company shall be the
fair value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the Company
shall be the Market Price thereof as of the date of receipt. If any Common
Stock, Option or Convertible Security is issued to the owners of the non-
surviving entity in connection with any merger in which the Company is the
surviving Company, the amount of consideration therefor shall be deemed to be
the fair value of such portion of the net assets and business of the non-
surviving entity as is attributable to such Common Stock, Option or Convertible
Security, as the case may be. The fair value of any consideration other than
cash and securities shall be determined jointly by the Company and the holders
of a majority of the outstanding Series B Preferred Stock. If such parties are
unable to reach agreement within a reasonable period of time, the fair value of
such consideration shall be determined by an independent appraiser experienced
in valuing such type of consideration jointly selected by the Company and the
holders of a majority of the outstanding Series B Preferred Stock. The
determination of such appraiser shall be final and binding upon the parties, and
the fees and expenses of such appraiser shall be borne by the Company.
(vi) Integrated Transactions. In case any Option is issued in
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connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is
allocated to such Option by the parties thereto, the Option shall be deemed to
have been issued for a consideration of $.01.
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(vii) Record Date. If the Company takes a record of the
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holders of Common Stock for the purpose of entitling them (a) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (b) to subscribe for or purchase Common Stock, Options
or Convertible Securities, then such record date shall be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or upon the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
(i) Subdivision or Combination of Common Stock. If the Company at any
------------------------------------------
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Conversion Price in effect immediately prior to
such subdivision shall be proportionately reduced, and if the Company at any
time combines (by reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination shall be
proportionately increased.
(j) Reorganization, Reclassification, Consolidation, Merger or Sale.
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Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Company's assets or other transaction,
in each case which is effected in such a manner that the holders of Common Stock
are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock, is
referred to herein as an "Organic Change". Prior to the consummation of any
Organic Change, the Company shall make appropriate provisions (in form and
substance reasonably satisfactory to the holders of a majority of the Series B
Preferred Stock then outstanding) to insure that each of the holders of Series B
Preferred Stock shall thereafter have the right to acquire and receive, in lieu
of or in addition to (as the case may be) the shares of Conversion Stock
immediately theretofore acquirable and receivable upon the conversion of such
holder's Series B Preferred Stock, such shares of stock, securities or assets as
such holder would have received in connection with such Organic Change if such
holder had converted its Series B Preferred Stock immediately prior to such
Organic Change. In each such case, the Company shall also make appropriate
provisions (in form and substance reasonably satisfactory to the holders of a
majority of the Series B Preferred Stock then outstanding) to insure that the
provisions of paragraph 4 hereof shall thereafter be applicable to the Series B
Preferred Stock (including, in the case of any such consolidation, merger or
sale in which the successor entity or purchasing entity is other than the
Company, an immediate adjustment of the Conversion Price pursuant to the
provisions of this paragraph 4 to give effect to the value for the Common Stock
reflected by the terms of such consolidation, merger or sale, and a
corresponding immediate adjustment in the number of shares of Conversion Stock
acquirable and receivable upon conversion of Series B Preferred Stock, if the
value so reflected is less than the Conversion Price in effect immediately prior
to such consolidation, merger or sale). The Company shall not effect any such
consolidation, merger or sale, unless prior to the consummation thereof, the
successor entity (if other than the Company) resulting from consolidation or
merger or the entity purchasing such assets assumes by written instrument (in
form and substance reasonably satisfactory to the holders of a majority of the
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Series B Preferred Stock then outstanding), the obligation to deliver to each
such holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such holder may be entitled to acquire.
(k) Certain Events. If any event occurs of the type contemplated by
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the provisions of paragraph 4 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the Company's
Board of Directors shall make an appropriate adjustment in the Conversion Price
so as to protect the rights of the holders of Series B Preferred Stock; provided
that no such adjustment shall increase the Conversion Price as otherwise
determined pursuant to paragraph 4 or decrease the number of shares of
Conversion Stock issuable upon conversion of each share of Series B Preferred
Stock.
(l) Notices.
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(i) Immediately upon any adjustment of the Conversion
Price, the Company shall give written notice thereof to all holders of Series B
Preferred Stock, setting forth in reasonable detail and certifying the
calculation of such adjustment.
(ii) The Company shall give written notice to all holders
of Series B Preferred Stock at least 20 days prior to the date on which the
Company closes its books or takes a record (a) with respect to any dividend or
distribution upon Common Stock (other than the Company's ordinary Common Stock
dividend), (b) with respect to any pro rata subscription offer to holders of
Common Stock or (c) for determining rights to vote with respect to any Organic
Change, dissolution or liquidation.
(iii) The Company shall also give written notice to the
holders of Series B Preferred Stock at least 20 days prior to the date on which
any Organic Change shall take place.
(m) Change of Control Offer.
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(i) Promptly after the occurrence of a Change of Control
(the date of such occurrence being the "Change of Control Date"), the Company
----------------------
shall commence (or cause to be commenced) an offer to purchase all outstanding
shares of Series B Preferred Stock pursuant to the terms described in paragraph
(m) (iv) (the "Change of Control Offer") at a purchase price equal to the Change
-----------------------
of Control on the Change of Control Payment Date, and shall purchase (or cause
the purchase of) any shares of Series B Preferred Stock tendered in the Change
of Control Offer pursuant to the terms hereof.
(ii) At the option of each holder of Series B Preferred
Stock, the Change of Control Amount payable to such holder shall be payable (i)
in cash, (ii) in a number of shares of Common Stock (or the securities of the
entity into which the Common Stock became converted or was exchanged in
connection with the Change of Control) determined by dividing the portion of the
Change of Control Amount that would otherwise be paid in cash (and which
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the holder has elected to receive in shares) by the Conversion Price in effect
as of the date on which the Change of Control occurred (which will determine the
number of shares of the Company that the holder would receive, which shall then
be used to determine the number of shares of the successor entity, if
applicable, that the holder is entitled to receive), or (iii) in a combination
of cash and such shares.
(iii) If a holder elects to receive the Change of Control
Amount in cash, prior to the mailing of the notice referred to in paragraph
(m)(iv), but in any event within 20 days following the date on which a Change of
Control has occurred, the Company shall (A) promptly determine if the purchase
of the Series B Preferred Stock for cash would violate or constitute a default
under the indebtedness of the Company and (B) either shall repay to the extent
necessary all such indebtedness or preferred stock of the Company that would
prohibit the repurchase of the Series B Preferred Stock pursuant to a Change of
Control Offer or obtain any requisite consents or approvals under instruments
governing any indebtedness or preferred stock of the Company to permit the
repurchase of the Series B Preferred Stock for cash. The Company shall first
comply with this paragraph (m)(iii) before it shall repurchase for cash any
Series B Preferred Stock pursuant to this paragraph (m).
(iv) Within 20 days following the date on which a Change
of Control has occurred, the Company shall send, by first-class mail, postage
prepaid, a notice (a "Change of Control Notice") to each holder of Series B
------------------------
Preferred Stock. If applicable, such notice shall contain all instructions and
materials necessary to enable such holders to tender Series B Preferred Stock
pursuant to the Change of Control Offer. Such notice shall state:
(A) that a Change of Control has occurred, that a Change of Control
Offer is being made pursuant to this paragraph (m) and that all Series
B Preferred Stock validly tendered and not withdrawn will be accepted
for payment;
(B) the purchase price (including the amount of accrued dividends,
if any) and the purchase date (which must be no earlier than 30 days
nor later than 60 days from the date such notice is mailed, other than
as may be required by law) (the "Change of Control Payment Date");
------------------------------
(C) that any shares of Series B Preferred Stock not tendered will
continue to accrue dividends;
(D) that, unless the Company defaults in making payment therefor,
any share of Series B Preferred Stock accepted for payment pursuant to
the Change of Control Offer shall cease to accrue dividends after the
Change of Control Payment Date;
(E) that holders electing to have any share of Series B Preferred
Stock purchased pursuant to a Change of Control Offer will be required
to surrender stock certificates representing such shares of Series B
Preferred Stock, properly endorsed for transfer, together with such
other customary documents as the
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Company and the Transfer Agent may reasonably request to the Transfer
Agent and registrar for the Series B Preferred Stock at the address
specified in the notice prior to the close of business on the business
day prior to the Change of Control Payment Date;
(F) that holders will be entitled to withdraw their election if the
Company receives, not later than five business days prior to the
Change of Control Payment Date, a telegram, facsimile transmission or
letter setting forth the name of the holder, the number of shares of
Series B Preferred Stock the holder delivered for purchase and a
statement that such holder is withdrawing its election to have such
shares of Series B Preferred Stock purchased;
(G) that holders who tender only a portion of the shares of Series
B Preferred Stock represented by a certificate delivered will, upon
purchase of the shares tendered, be issued a new certificate
representing the unpurchased shares of Series B Preferred Stock; and
(H) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical
income, cash flow and capitalization after giving effect to such
Change of Control).
(v) The Company will comply with any tender offer rules under
the Exchange Act which may then be applicable in connection with any offer made
by the Company to repurchase the shares of Series B Preferred Stock as a result
of a Change of Control. To the extent that the provisions of any securities laws
or regulations conflict with provisions hereof, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligation hereunder by virtue thereof.
(vi) On the Change of Control Payment Date, the Company shall
(A) accept for payment the shares of Series B Preferred Stock validly tendered
pursuant to the Change of Control Offer, (B) pay to the holders of shares so
accepted the purchase price therefor, at the option of each such holder, in cash
or Common Stock (or the securities of the entity into which the Common Stock
became converted in connection with the Change of Control) as provided in
paragraph (ii) above and (C) cancel each surrendered certificate and retire the
shares represented thereby. Unless the Company defaults in the payment for the
shares of Series B Preferred Stock tendered pursuant to the Change of Control
Offer, dividends will cease to accrue with respect to the shares of Series B
Preferred Stock tendered and all rights of holders of such tendered shares will
terminate, except for the right to receive payment therefor on the Change of
Control Payment Date.
(vii) To accept the Change of Control Offer, the holder of a
share of Series B Preferred Stock shall deliver, prior to the close of business
on the business day prior to the Change of Control Payment Date, written notice
to the Company (or an agent designated by the Company for such purpose) of such
holder's acceptance, together with certificates evidencing
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<PAGE>
the shares of B Preferred Stock with respect to which the Change of Control
Offer is being accepted, duly endorsed for transfer.
(n) Certain Mergers. In connection with any consolidation with or
---------------
merger with or into, any person in a transaction where the Common Stock is
converted into or exchanged for securities of such person or an affiliate of
such person, the Company covenants that as a condition precedent to the
consummation of any such consolidation or merger it shall provide the holders of
the Series B Preferred Stock with a certificate, in form and substance
satisfactory to the holders of a majority of the Series B Senior Preferred Stock
signed by a duly authorized officer of the Company indicating that the person
issuing such securities will be organized and existing under the laws of a
jurisdiction which allows for the issuance of preference stock and that the
Series B Preferred Stock shall be converted into or exchanged for and shall
become shares of such person having in respect of such person substantially the
same powers, preference and relative participating, optional or other special
rights and the qualifications, limitations or restrictions thereon that the
Series B Preferred Stock had immediately prior to such transaction.
(o) Conversion at the Option of the Company. If on any date after the
---------------------------------------
fifth anniversary of the date of issuance of the Series B Preferred Stock, the
Daily Price has been at least $61.50 per share (as adjusted for any stock
splits, stock dividends, reverse stock splits, share consolidations or other
similar transactions) during any 30 trading days out of any consecutive 45
trading day period, the Company may elect, by written notice delivered to the
Transfer Agent (with a copy to each holder of Series B Preferred Stock), no
later than five Market Days after such date, to cause all outstanding shares of
Series B Preferred Stock to be converted into fully paid and nonassessable
shares of Common Stock. Any such conversion shall be deemed to have been
effected, without further action by any party, immediately prior to the close of
business on the date such notice is received by the Transfer Agent. The number
of shares of Common Stock deliverable upon conversion of one share of Series B
Preferred Stock shall be equal to (i) the Accreted Value of such share on the
date of conversion, plus any dividends accrued to such date (whether or not
earned or declared) since the end of the previous Dividend Period, divided by
(ii) the Conversion Price on such date.
(p) Reacquired Shares. Any shares of Series B Preferred Stock
-----------------
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of preferred
stock and may be reissued as part of a new series of preferred stock to be
created by an amendment or amendments of the Company's articles of incorporation
adopted by the Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
5. Put/Conversion.
--------------
(a) At any time on or after (i) the date which is three months after
the stated maturity date of the Company's senior notes due 2010 or (ii) January
11, 2011, if the Company has not issued such senior notes, the holders of a
majority of the shares of Series B Preferred Stock may, by written notice (the
"Put Notice") to the Company, require the Company to
----------
14
<PAGE>
purchase all of the outstanding shares of Series B Preferred Stock at a price
per share equal to the Accreted Value on the date of purchase, plus all
dividends accrued to such date (whether or not earned or declared) since the
most recent Dividend Payment Date (the "Put Right"). The Put Notice shall state
---------
the date of purchase, which shall be no earlier than 30 days from the date of
the Put Notice. The purchase price will be payable in cash.
(b) Upon receipt of the Put Notice, the Company shall notify, by first
class mail, postage prepaid, each holder of record of the shares to be purchased
at such holder's address as the same appears on the stock register of the
Company; provided that neither the failure to give such notice nor any defect
therein shall affect the validity of the giving of notice for the purchase of
any share of Series B Preferred Stock to be purchased except as to the holder to
whom the Company has failed to give said notice or except as to the holder whose
notice was defective. Each such notice shall state: (i) the date of purchase;
(ii) the purchase price; (iii) the place or places where certificates for such
shares are to be surrendered for payment of the purchase price; and (iv) that
dividends on the shares to be purchased will cease to accrue on such date of
purchase.
(c) Notice having been mailed as aforesaid, from and after the
purchase date (unless default shall be made by the Company in providing money
for the payment of the purchase price), dividends on the shares of Series B
Preferred Stock shall cease to accrue, and all rights of the holders thereof as
stockholders of the Company (except the right to receive from the Company the
purchase price) shall cease. Upon surrender in accordance with said notice of
the certificates for any shares so purchased (properly endorsed or assigned for
transfer, if the Board of Directors of the Company shall so require and the
notice shall so state), such share shall be purchased by the Company at the
purchase price aforesaid.
(d) For the avoidance of doubt, nothing in this paragraph 5 shall
restrict the right of the holders of Series B Preferred Stock to convert their
shares of Series B Preferred Stock into shares of Common Stock prior to such
holders acceptance of the purchase price.
(e) If a Put Notice has not been delivered to the Company on or before
the date which is one year from the applicable date set forth in paragraph 5(a)
above, then the Company shall have the right to convert all, but not less than
all, of the outstanding shares of Series B Preferred Stock into fully paid and
non-assessable shares of Common Stock pursuant to the provisions of paragraph 4.
(f) The Company shall notify, by first class mail, postage prepaid,
mailed not less than 30 days nor more than 60 days prior to the date of
conversion, each holder of record of the shares to converted at such holder's
address as the same appears on the stock register of the Company; provided that
neither the failure to give such notice nor any defect therein shall affect the
validity of the giving of notice for the conversion of any share of Series B
Preferred Stock to be converted except as to the holder to whom the Company has
failed to give said notice or except as to the holder whose notice was
defective. Each such notice shall state: (i) the conversion date; (ii) the
number of shares of Common Stock and the cash, if any, into which each share of
Series B Preferred Stock will convert; (iii) the place or places where
certificates for
15
<PAGE>
shares of Series B Preferred Stock are to be surrendered for
conversion; and (iv) that dividends on the shares to be converted will cease to
accrue on such conversion date.
6. Voting Rights.
-------------
(a) Except as otherwise provided in paragraph 6(b) or as required by
law, each holder of Series B Preferred Stock shall be entitled to vote on all
matters and shall be entitled to that number of votes equal to the number of
shares of Common Stock into which such holder's shares of Series B Preferred
Stock could be converted, pursuant to the provisions of paragraph 4 hereof, on
the record date for the determination of shareholders entitled to vote on such
matter or, if no such record date is established, on the date such vote is taken
or any written consent of shareholders is solicited. Except as otherwise
expressly provided herein or as required by law, the holders of shares of Series
B Preferred Stock and Common Stock shall vote together as a single class on all
matters.
(b) For so long as at least 45,000 shares of Series B Preferred Stock
remain outstanding, in the election of directors of the Company, the holders of
the Series B Preferred Stock, voting separately as a single class to the
exclusion of all other classes of the Company's capital stock and with each
Share of Series B Preferred Stock entitled to one vote, shall be entitled to
elect two (2) directors to serve on the Company's Board of Directors until such
directors' successors are duly elected by the holders of the Series B Preferred
Stock or such directors are removed from office by the holders of the Series B
Preferred Stock. If at any time there are less than 45,000 shares of Series B
Preferred Stock outstanding, but for so long as at least 11,250 shares of Series
B Preferred Stock remain outstanding, in the election of directors of the
Company, the holders of the Series B Preferred Stock, voting separately as a
single class to the exclusion of all other classes of the Company's capital
stock and with each Share of Series B Preferred Stock entitled to one vote,
shall be entitled to elect one (1) director to serve on the Company's Board of
Directors until such director's successor is duly elected by the holders of the
Series B Preferred Stock or such director is removed from office by the holders
of the Series B Preferred Stock. If the holders of the Series B Preferred Stock
for any reason fail to elect anyone to fill any such directorship, such position
shall remain vacant until such time as the holders of the Series B Preferred
Stock elect a director to fill such position and shall not be filled by
resolution or vote of the Company's Board of Directors or the Company's other
stockholders. For so long as the holders of Series B Preferred Stock are
entitled to elect at least one director, the Company's Board of Directors shall
consist of not more than eleven (11) directors without the prior written
approval of the holders of a majority of the shares of the Series B Preferred
Stock. For so long as the holders of Series B Preferred Stock are entitled to
elect at least one director, at least one director so elected who shall be
specified by the holders of a majority of the shares of Series B Preferred Stock
and who may specify a different director for each such committee shall be
appointed to each committee of the Company's Board of Directors.
(c) In addition, so long as any of the Series B Preferred Stock is
outstanding, the affirmative vote of the holders of (x) all of the outstanding
shares of Series B Preferred Stock shall be necessary to alter or change the
preferences, rights or powers of the Series B Preferred Stock and (y) a majority
of the outstanding shares of Series B Preferred Stock, voting together as
16
<PAGE>
a single class, shall be necessary to: (i) increase or decrease the authorized
number of shares of Series B Preferred Stock, (ii) amend, alter, repeal or waive
any provision of the Restated Articles of Incorporation (including any articles
of amendment and whether by amendment, merger or otherwise) or the By-laws so as
to adversely affect the preferences, rights or powers of the Series B Preferred
Stock, including, without limitation, the voting powers, dividend rights and
liquidation preference of the Series B Preferred Stock, or change the Series B
Preferred Stock into any other securities (other than as required by paragraph
4(j)), cash or other property, (iii) issue any additional Series B Preferred
Stock or create, authorize or issue any capital stock that ranks prior (whether
with respect to dividends or upon liquidation, dissolution, winding up or
otherwise) to or pari passu with the Series B Preferred Stock, (iv) redeem or
repurchase for cash any Junior Securities, or (v) authorize the issuance of any
Common Stock or Convertible Securities at a price that would cause the
Conversion Price to be adjusted below the Minimum Conversion Price, provided
that the approval required by this clause (v) shall no longer be required at any
time following the approval by the requisite holders of the Common Stock of the
removal of the Minimum Conversion Price limitation and authorizing the Series B
Preferred Stock to be converted into Common Stock at any price determined by
application of the anti-dilution protection set forth in paragraph 4 above
without regard to the Minimum Conversion Price.
7. Miscellaneous. If any holder of Series B Preferred Stock elects to
-------------
receive the Change of Control Amount in shares of Common Stock in connection
with a Change of Control Offer pursuant to paragraph 4(m), the Company shall
comply with all statutes, rules and regulations applicable thereto at that time,
including any and all regulations of the principal trading market on which the
Common Stock is then trading, including, if necessary, any shareholder approval
requirement under NASD Rule 4460(i), as it may be amended from time to time.
8. Definitions. The following terms, as used herein, shall have the
-----------
following meanings:
"Accreted Value" equals, with respect to one share of Series B Preferred
--------------
Stock, $1,000, adjusted for the amount of any dividends added to (or subtracted
from) the Accreted Value in accordance with paragraph 2(b) (which aggregate
amount shall be subject to adjustment whenever there shall occur a stock split,
combination, re-classification or other similar event involving the Series B
Preferred Stock).
"Applicable Percentage" is defined in paragraph 2(c) hereof.
---------------------
"Change of Control" means: (i) the sale, lease, transfer, conveyance or
-----------------
other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all the assets of the
Company and its subsidiaries taken as a whole to any "person" (as such term is
used in Section 13(d)(3) of the Exchange Act), (ii) the consummation of any
transaction (including any merger or consolidation) the result of which is that
any "person" (as defined above), becomes the beneficial owner (as determined in
accordance with Rules 13d-3 and 13d-5 under the Exchange Act except that a
person will be deemed to have beneficial ownership of all shares that such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 40% of
the
17
<PAGE>
Voting Securities of the Company, or (iii) the first day on which a majority
of the members of the board of directors are not Continuing Directors.
"Change of Control Amount" means, with respect to one share of Series B
------------------------
Preferred Stock, 101% of the Accreted Value per share plus any dividends accrued
to such date (whether or not earned or declared) since the end of the previous
Dividend Period; provided, however, that if the Change of Control occurs prior
-------- -------
to the fifth anniversary of the date of issue of any share of Series B Preferred
Stock, the Accreted Value shall be calculated assuming the Change of Control had
occurred on the fifth anniversary of the date of issue of such share of Series B
Preferred Stock (and assuming that no cash dividends had been paid on such share
from the actual date of the Change of Control through the fifth anniversary of
the date of issue).
"Continuing Directors" means individuals who constituted the Board of
--------------------
Directors of the Company on July 11, 2000 (the "Incumbent Directors"); provided
-------------------
that any individual becoming a director during any year shall be considered to
be an Incumbent Director if such individual's election, appointment or
nomination was recommended or approved by at least two-thirds of the other
Incumbent Directors continuing in office following such election, appointment or
nomination present, in person or by telephone, at any meeting of the Board of
Directors of the Company, after the giving of a sufficient notice to each
Incumbent Director so as to provide a reasonable opportunity for such Incumbent
Directors to be present at such meeting.
"Conversion Price" means $41.00, subject to adjustment from time to time as
----------------
provided in paragraph 4.
"Conversion Stock" means shares of the Company's Common Stock, no par value
----------------
per share; provided that if there is a change such that the securities issuable
upon conversion of the Series B Preferred Stock are issued by an entity other
than the Company or there is a change in the type or class of securities so
issuable, then the term "Conversion Stock" shall mean one share of the security
issuable upon conversion of the Series B Preferred Stock if such security is
issuable in shares, or shall mean the smallest unit in which such security is
issuable if such security is not issuable in shares.
"Convertible Securities" means any stock or securities directly or
----------------------
indirectly convertible into or exchangeable for Common Stock.
"Current Market Price Per Common Share" means, as of any date, the average
-------------------------------------
(weighted by daily trading volume) of the Daily Prices per share of Common Stock
for the 30 consecutive trading days immediately prior to such date.
"Daily Price" means, as of any date, (i) if the shares of such class of
-----------
Common Stock then are listed and traded on the New York Stock Exchange, Inc.
("NYSE"), the closing price on such date as reported on the NYSE Composite
----
Transactions Tape; (ii) if the shares of such class of Common Stock then are not
listed and traded on the NYSE, the closing price on such date as reported by the
principal national securities exchange on which the shares are listed and
traded; (iii) if the shares of such class of Common Stock then are not listed
and traded on any such
18
<PAGE>
securities exchange, the last reported sale price on such date on the National
Market of the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ"); or (iv) if the shares of such class of Common Stock
------
then are not traded on the NASDAQ National Market, the average of the highest
reported bid and lowest reported asked price on such date as reported by NASDAQ.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Liquidation Value" on any date means, with respect to one share of Series
-----------------
B Preferred Stock, the greater of (i) the Accreted Value on such date, plus all
dividends (whether or not earned or declared) accrued since the end of the
previous Dividend Period and (ii) the amount that would have been payable on a
number of shares of Common Stock equal to the number of shares of Common Stock
into which a share of Series B Preferred Stock was convertible immediately prior
to such date (disregarding any Minimum Conversion Price then in effect).
"Market Day" means a day on which the principal national securities market
----------
or exchange on which the Common Stock is listed or admitted for trading is open
for the transaction of business.
"Market Price" of any security means the average of the closing prices of
------------
such security's sales on all securities exchanges on which such security may at
the time be listed, or, if there has been no sales on any such exchange on any
day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such security is not so
listed, the average of the representative bid and asked prices quoted in the
NASDAQ System as of 4:00 P.M., New York time, or, if on any day such security is
not quoted in the NASDAQ System, the average of the highest bid and lowest asked
prices on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor organization,
in each such case averaged over a period of 21 days consisting of the day as of
which "Market Price" is being determined and the 20 consecutive business days
prior to such day. If at any time such security is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the
"Market Price" shall be the fair value thereof determined jointly by the Company
and the holders of a majority of the Series B Preferred Stock. If such parties
are unable to reach agreement within a reasonable period of time, such fair
value shall be determined by an independent appraiser experienced in valuing
securities jointly selected by the Company and the holders of a majority of the
Series B Preferred Stock. The determination of such appraiser shall be final
and binding upon the parties, and the Company shall pay the fees and expenses of
such appraiser.
"Options" means any rights, warrants or options to subscribe for or
-------
purchase Common Stock or Convertible Securities.
"Person" as used herein means any corporation, limited liability company,
------
partnership, trust, organization, association, other entity or individual.
19
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Transfer Agent" means the transfer agent for the Series B Preferred Stock
--------------
appointed by the Company.
"Voting Securities" means securities of the Company ordinarily having the
-----------------
power to vote for the election of directors of the Company; provided that when
the term "Voting Securities" is used with respect to any other Person it means
the capital stock or other equity interests of any class or kind ordinarily
having the power to vote for the election of directors or other members of the
governing body of such Person.
20
