SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended JUNE 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-20002
RENAISSANCE COMMUNICATIONS CORP.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
06-1251634
(I.R.S. Employer Identification No.)
ONE FAWCETT PLACE, GREENWICH, CONNECTICUT 06830
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone No., including Area Code 203-629-1888
Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report.
Indicate by check whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(D) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No.
--- - ---
At July 30, 1996, the Registrant had 30,337,207 shares of Common Stock
outstanding.
<PAGE>
<TABLE>
<CAPTION>
Renaissance Communications Corp.
Consolidated Balance Sheets
June 30, December 31,
1996 1995
(Unaudited) (Audited)
(in thousands)
Assets
<S> <C> <C>
Current assets:
Cash and Cash equivalents $10,707 $9,912
Accounts receivable, less allowance for
doubtful accounts of $2,192,000 and $2,128,000
in 1996 and 1995, respectively 41,375 41,258
Note receivable from officer 3,078 0
Barter program rights 17,708 29,247
Program rights 27,206 35,451
Prepaid expenses and other current assets 3,752 3,464
Total current assets 103,826 119,332
Property, plant and equipment, net of accumulated
depreciation of $36,086,000 and $33,061,000
in 1996 and 1995, respectively 35,855 37,215
Barter program rights 10,294 14,247
Program rights 36,027 45,445
Intangible assets, net of accumulated amortization
of $27,138,000 and $23,412,000 in 1996 and
1995, respectively 155,132 158,858
Deferred financing costs, net of accumulated
amortization of $3,391,000 and $2,642,000
in 1996 and 1995, respectively 2,382 3,131
Note receivable and other assets 4,305 4,331
Total assets $347,821 $382,559
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Renaissance Communications Corp.
Consolidated Balance Sheets (continued)
June 30, December 31,
1996 1995
(Unaudited) (Audited)
(in thousands)
Liabilities and shareholders' equity
<S> <C> <C>
Current liabilities:
Accounts payable $2,106 $2,464
Accrued expenses 10,508 8,325
Senior secured term loan 14,367 16,209
Barter program payable 17,708 29,247
Program payable 38,661 41,247
Total current liabilities 83,350 97,492
Senior secured term loan and revolving credit facility 28,676 47,546
Barter program payable 10,294 14,247
Program payable 40,632 54,563
Deferred income taxes 4,263 4,263
Other noncurrent liabilities 300 301
Common shareholder's equity:
Common Stock, par value $.01 per share, authorized
97,500,000 shares, issued and outstanding 30,337,207
and 30,037,206 shares in 1996 and 1995 303 300
Additional paid - in capital 164,270 162,273
Notes receivable from warrant exercise (2,000) 0
Accumulated earnings 17,733 1,574
Total shareholders' equity 180,306 164,147
Total liabilities and shareholders' equity $347,821 $382,559
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Renaissance Communications Corp.
Consolidated Statements of Income
(Unaudited)
Three months ended June 30, Six months ended June 30,
1996 1995 1996 1995
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Net revenue $47,061 $37,621 $83,234 $68,013
Barter revenue 8,770 6,765 17,944 13,642
Total revenue 55,831 44,386 101,178 81,655
Operating expenses 3,926 3,394 7,847 6,900
Selling, general and administrative expenses 9,940 8,854 18,684 16,822
Amortization of program rights 9,984 6,457 20,448 13,659
Amortization of barter program rights 8,516 6,469 17,424 13,063
Depreciation and amortization 3,798 3,888 7,569 8,193
Total operating expenses 36,164 29,062 71,972 58,637
Profit from operations 19,667 15,324 29,206 23,018
Other income (expense) net (36) (55) (93) (51)
Interest income 288 320 579 694
Interest expense (825) (1,755) (1,974) (4,062)
Income before provision for income taxes and
extraordinary item 19,094 13,834 27,718 19,599
Provision for income taxes 7,706 1,248 11,337 1,800
Income before extraordinary item 11,388 12,586 16,381 17,799
Extraordinary item:
Loss on early extinguishment of debt,
net of taxes 0 0 222 0
Net income $11,388 $12,586 $16,159 $17,799
Net income per common and common equivalent
share before extraordinary loss $0.37 $0.41 $0.53 $0.58
Extraordinary loss 0.00 0.00 0.01 0.00
Net income per common and common equivalent share $0.37 $0.41 $0.52 $0.58
Shares used in earnings per share calculation 30,944 30,645 30,879 30,617
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Renaissance Communications Corp.
Consolidated Statement of Changes in Shareholders' Equity
Six months ended June 30, 1996
(Unaudited)
Additional Notes
Common Paid-In Receivable From Accumulated
Stock Capital Warrant Exercise Earnings Total
(in thousands)
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $300 $162,273 $1,574 $164,147
Net Income 16,159 16,159
Exercise of warrants 3 1,997 (2,000) 0
----------------------------------------------------------------------
Balance at June 30, 1996 $303 $164,270 ($2,000) $17,733 $180,306
======================================================================
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Renaissance Communications Corp.
Consolidated Statements of Cash Flows
(Unaudited)
Six months ended June 30,
1996 1995
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $16,159 $17,799
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 7,569 8,193
Amortization of program rights,
net of barter 20,448 13,659
Amortization of discount on certain
contracts payable - 3
Provision for bad debts 471 195
Loss on early extinguishment of debt, net of taxes 222 -
Gain (loss) on disposal of fixed assets 93 51
Program payments (19,303) (14,600)
Decreases (increases) in assets and increases
(decreases) in liabilities:
Accounts receivable (588) 3,524
Prepaid expenses, other current assets
and other assets (462) (1,662)
Accounts payable (358) (709)
Accrued expenses 2,332 (432)
---------------------------
Total adjustments 10,424 8,222
---------------------------
Net cash provided by operating activities 26,583 26,021
Cash flows from investing activities:
Capital expenditures (2,198) (2,493)
Issuance of note receivable to officer (3,078) -
Proceeds from principal payment on note receivable 200 200
---------------------------
Net cash used in investing activities (5,076) (2,293)
---------------------------
Cash flows from financing activities:
Principal payments on senior secured term loan and
revolving credit facility (20,712) (24,216)
Principal payments on other noncurrent liabilities - (63)
Proceeds from exercise of warrants (See Note 2) - 373
-------------------------
Net cash used in financing activities (20,712) (23,906)
-------------------------
Net increase (decrease) in cash and cash equivalents 795 (178)
Cash and cash equivalents
Balance at the beginning of the period 9,912 10,129
------------------------
Balance at the end of the period $10,707 $9,951
========================
</TABLE>
See accompanying notes
<PAGE>
Renaissance Communications Corp.
Notes to Consolidated Financial Statements
(Unaudited)
1. FINANCIAL STATEMENT PRESENTATION
As of June 30, 1996, Renaissance Communications Corp. (the "Company")
owned and operated six television stations: KDAF, Dallas, Texas; WDZL,
Miami/Ft. Lauderdale, Florida; KTXL, Sacramento, California; WTIC,
Hartford/New Haven, Connecticut; WXIN, Indianapolis, Indiana; and WPMT,
Harrisburg, Pennsylvania. The interim financial statements presented
herein include the accounts of the Company and its wholly owned
subsidiaries for the period of time they were owned and operated by the
Company. All significant intercompany items and transactions are
eliminated in consolidation.
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all the normal recurring adjustments
necessary for a fair presentation of the results for the interim
periods presented. The results for the interim period are not
necessarily indicative of the results to be expected for the full year.
2. SHAREHOLDERS' EQUITY
On May 21, 1996, certain family members of an officer exercised
warrants for 300,000 shares. The exercise price was satisfied through
the issuance of $2,000,000 in demand notes to the Company. The notes
bear interest at an annual rate of 6%.
3. PENDING TRANSACTIONS
On July 1, 1996, the Company entered into a definitive agreement to be
acquired by Tribune Company for $36.00 per share in cash for an
aggregate purchase price of $1.13 billion. The transaction is subject
to shareholder and FCC approval. The transaction is expected to close
in early 1997.
In March 1994, the Company entered into an agreement to sell the voting
common stock of the subsidiary that holds the FCC license of WTIC ("61
Licensee") in order to comply with FCC regulations which prohibit it
from controlling the FCC license because the majority owner of the
Company owns newspapers within the service area of WTIC. The Company
will retain a 98% nonvoting interest in 61 Licensee and will continue
to consolidate the results of WTIC, including 61 Licensee. The
transaction is subject to the consent of the FCC. An application for
such consent is pending before the FCC. In connection with the filing
of the application to the FCC for transfer of control of the stations
to Tribune Company, the Company will withdraw the pending application
for transfer of control of WTIC and the related agreements will
terminate.
RENAISSANCE COMMUNICATIONS CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company's consolidated results include the operations of each of the
stations for the period they were owned and operated by the Company. As of June
30, 1996, the Company owned and operated six television stations: KDAF, Dallas,
Texas; WDZL, Miami/Ft. Lauderdale, Florida; KTXL, Sacramento, California; WTIC,
Hartford/New Haven, Connecticut; WXIN, Indianapolis, Indiana; and WPMT,
Harrisburg, Pennsylvania.
As of July 3, 1995, the Company exchanged its television station KDVR, Denver,
Colorado, and approximately $34,500,000 in cash for Fox's television station
KDAF, Dallas, Texas. Comparison of results subsequent to this date are affected
by the exchange of KDVR for KDAF.
THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS ENDED JUNE 30, 1995
Total revenue for the Company was $55,831,000 for the three months ended June
30, 1996, as compared to $44,386,000 for the same period in 1995, an increase of
$11,445,000 or 26%. Of this amount, net revenue increased by $9,440,000 or 25%
and barter revenue increased by $2,005,000 or 30%. Approximately $4,800,000 of
the increase in net revenue was due to higher net revenue at KDAF, Dallas as
compared to KDVR, Denver and the remainder was due to higher net revenue at the
remaining stations. Four of the five remaining stations reported double digit
percentage increases primarily due to an improved advertising environment and
improved station performance. Approximately $1,000,000 of the increase in barter
revenue was due to higher barter revenue at KDAF, Dallas as compared to KDVR,
Denver and the remainder was primarily due to the increased use of barter
programming at WXIN, Indianapolis and WTIC, Hartford.
Total operating expenses for the Company were $36,164,000 for the three months
ended June 30, 1996, as compared to $29,062,000 for the same period in 1995, an
increase of $7,102,000 or 24%. Operating expenses were $3,926,000 for the three
months ended June 30, 1996, as compared to $3,394,000 for the same period in
1995, an increase of $532,000 or 16%. Approximately $230,000 of the increase was
due to higher operating expenses at KDAF, Dallas as compared to KDVR, Denver and
the remainder of the increase was primarily due to costs relating to the
expansion of the news operation at KTXL, Sacramento, higher news expenses at
WXIN, Indianapolis and repair expenses to the tower at WDZL, Miami. Selling,
general and administrative expenses were $9,940,000 for the three months ended
June 30, 1996, as compared to $8,854,000 for the same period in 1995, an
increase of $1,086,000 or 12%. Approximately $200,000 of the increase was due to
higher expenses at KDAF, Dallas as compared to KDVR, Denver, and the remainder
was primarily due to higher promotion and advertising expenses at three of the
stations and non-recurring property tax assessments at KTXL, Sacramento.
Amortization of program rights was $9,984,000 for the three months ended June
30, 1996, as compared to $6,457,000 for the same period in 1995, an increase of
$3,527,000 or 55%. Approximately $1,900,000 of the increase was due to
additional amortization at KDAF, Dallas as compared to KDVR, Denver and the
remainder was primarily due to the introduction of new programs at the Company's
stations in the third quarter of 1995. Amortization of barter rights was
$8,516,000 for the three months ended June 30, 1996, as compared to $6,469,000
for the same period in 1995, an increase of $2,047,000 or 32%. The increase was
due to higher amortization at KDAF, Dallas as compared to KDVR, Denver and the
increased use of barter programming at WXIN, Indianapolis and WTIC, Hartford.
Depreciation and amortization expense was $3,798,000 for the three months ended
June 30, 1996 as compared to $3,888,000 for the same period in 1995, a decrease
of $90,000 or 2%.
For the three months ended June 30, 1996, the Company reported a profit
from operations of $19,667,000 as compared to $15,324,000 for the same period in
1995, an increase of $4,343,000 or 28%. The increase was due to improved results
at KDAF, Dallas as compared to KDVR, Denver and improved results at four of the
five remaining stations.
Interest expense was $825,000 for the three months ended June 30, 1996 , as
compared to $1,755,000 for the same period in 1995, a decrease of $930,000 or
53%. This decrease was due to a decrease in the Company's outstanding
indebtedness and lower interest rates.
The Company's provision for income taxes was $7,706,000 for the three months
ended June 30, 1996 , as compared to $1,248,000 for the same period in 1995. The
1996 provision consists of federal income taxes at the statutory rate and state
and local income taxes. The 1995 provision consists principally of state and
local income taxes. During the third quarter of 1995, the Company's taxable
income exceeded its remaining net operating losses and the Company began
providing for federal income taxes at the statutory rate on that excess.
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
Total revenue for the Company was $101,178,000 for the six months ended June 30,
1996, as compared to $81,655,000 for the same period in 1995, an increase of
$19,523,000 or 24%. Of this amount, net revenue increased by $15,221,000 or 22%
and barter revenue increased by $4,302,000 or 32%. Approximately $8,000,000 of
the increase in net revenue was due to higher net revenue at KDAF, Dallas as
compared to KDVR, Denver and the remainder was due to higher net revenue at the
remaining stations. Four of the five remaining stations reported double digit
percentage increases primarily due to an improved advertising environment and
improved station performance. Approximately $2,400,000 of the increase in barter
revenue was due to higher barter revenue at KDAF, Dallas as compared to KDVR,
Denver and the remainder was primarily due to the increased use of barter
programming at WXIN, Indianapolis and WTIC, Hartford.
Total operating expenses for the Company were $71,972,000 for the six months
ended June 30, 1996, as compared to $58,637,000 for the same period in 1995, an
increase of $13,335,000 or 23%. Operating expenses were $7,847,000 for the six
months ended June 30, 1996, as compared to $6,900,000 for the same period in
1995, an increase of $947,000 or 14%. Approximately $300,000 of the increase was
due to higher operating expenses at KDAF, Dallas as compared to KDVR, Denver and
the remainder of the increase was primarily due to costs relating to the
expansion of the news operation at KTXL, Sacramento and WTIC, Hartford, higher
news expenses at WXIN, Indianapolis and repair expenses to the tower at WDZL,
Miami. Selling, general and administrative expenses were $18,684,000 for the six
months ended June 30, 1996, as compared to $16,822,000 for the same period in
1995, an increase of $1,862,000 or 11%. Approximately $230,000 of the increase
was due to higher expenses at KDAF, Dallas as compared to KDVR, Denver, and the
remainder was primarily due to higher promotion and advertising expenses at
three of the stations and other non-recurring items. Amortization of program
rights was $20,448,000 for the six months ended June 30, 1996, as compared to
$13,659,000 for the same period in 1995, an increase of $6,789,000 or 50%.
Approximately $3,800,000 of the increase was due to additional amortization at
KDAF, Dallas as compared to KDVR, Denver and the remainder was primarily due to
the introduction of new programs at the Company's stations in the third quarter
of 1995. Amortization of barter rights was $17,424,000 for the six months ended
June 30, 1996, as compared to $13,063,000 for the same period in 1995, an
increase of $4,361,000 or 33%. The increase was due to higher amortization at
KDAF, Dallas as compared to KDVR, Denver and the increased use of barter
programming at WXIN, Indianapolis and WTIC, Hartford. Depreciation and
amortization expense was $7,569,000 for the six months ended June 30, 1996 as
compared to $8,193,000 for the same period in 1995, a decrease of $624,000 or
8%. The net decrease was primarily due to lower depreciation at WDZL, Miami and
KTXL, Sacramento resulting from certain fixed assets being fully depreciated in
the second quarter of 1995.
For the six months ended June 30, 1996, the Company reported a profit from
operations of $29,206,000 as compared to $23,018,000 for the same period in
1995, an increase of $6,188,000 or 27%. The increase was due to improved results
at KDAF, Dallas as compared to KDVR, Denver and improved results at four of the
five remaining stations.
Interest expense was $1,974,000 for the six months ended June 30, 1996 , as
compared to $4,062,000 for the same period in 1995, a decrease of $2,088,000 or
51%. This decrease was due to a decrease in the Company's outstanding
indebtedness and lower interest rates.
The Company's provision for income taxes was $11,337,000 for the six months
ended June 30, 1996 , as compared to $1,800,000 for the same period in 1995. The
1996 provision consists of federal income taxes at the statutory rate and state
and local income taxes. The 1995 provision consists principally of state and
local income taxes. During the third quarter of 1995, the Company's taxable
income exceeded its remaining net operating losses and the Company began
providing for federal income taxes at the statutory rate on that excess.
The loss on early extinguishment of debt, net of taxes, for the six months ended
June 30, 1996 was $222,000 due to the write-off of deferred financing costs in
connection with the prepayment of senior debt.
LIQUIDITY AND CAPITAL RESOURCES
For the three months ended June 30, 1996, the Company reported broadcast
cashflow of $24,779,000, as compared to $19,602,000 for the same period in 1995,
an increase of $5,177,000 or 26%. The increase was primarily due to improved
broadcast cashflow at KDAF, Dallas as compared to KDVR, Denver and improved
broadcast cashflow at four of the five remaining stations.
For the six months ended June 30, 1996, the Company reported broadcast cashflow
of $39,766,000, as compared to $32,063,000 for the same period in 1995, an
increase of $7,703,000 or 24%. The increase was primarily due to improved
broadcast cashflow at KDAF, Dallas as compared to KDVR, Denver and improved
broadcast cashflow at four of the five remaining stations.
The following is a reconciliation of profit from operations to broadcast
cashflow:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
(in thousands)
Operating Data: 1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Profit from operations $19,667 $15,324 $29,206 $23,018
Add:
Depreciation and amortization 3,798 3,888 7,569 8,193
Amortization of program rights,
excluding barter 9,984 6,457 20,448 13,659
Corporate expenses 908 951 1,846 1,793
Subtract:
Cash program payments 9,578 7,018 19,303 14,600
----- ------ ------ -------
Broadcast cashflow $24,779 $19,602 $39,766 $32,063
======= ======= ======= =======
</TABLE>
For the six months ended June 30, 1996, the net cash provided by operating
activities was $26,583,000. This amount was primarily used to make debt service
payments and capital expenditures.
For the six months ended June 30, 1996, the net cash used in investing
activities was $5,076,000 and was primarily used for capital expenditures and
the issuance of a note to an officer. During 1996, the Company expects to spend
approximately $5,000,000 for capital expenditures and to finance these
expenditures with cash flows from operations.
For the six months ended June 30, 1996, the net cash used in financing
activities was $20,712,000 and was used to make debt service payments.
At June 30, 1996, the Company had cash and cash equivalents of $10,707,000.
Additionally, the Company had $49,750,000 available for borrowing under its
revolving credit facility.
<PAGE>
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The Company held an annual meeting of stockholders on May 2, 1996, at which the
following matters were voted upon:
1) Election of five directors.
2) Amendment to Certificate of Incorporation to increase number of
authorized shares of Common Stock.
3) Amendment to the Company's Executive Stock Option Plan to
increase the number of options which may be granted thereunder.
4) Approval of appointment of Ernst & Young LLP as independent
auditors for the fiscal year ending December 31, 1996.
The results of the meeting were as follows:
Broker
Directors For Withheld Non-Votes
Michael Finkelstein 27,129,117 5,343 0
Sidney Lapidus 27,129,117 5,343 0
Robert M. Meltzer 27,129,117 5,343 0
Martin D. Payson 27,129,117 5,343 0
Joanne R. Wenig 27,129,117 5,343 0
Broker
For Against Abstain Non-Votes
Proposal 2 25,688,528 1,445,432 500 0
Broker
For Against Abstain Non-Votes
Proposal 3 27,087,566 44,738 2,156 0
Broker
For Against Abstain Non-Votes
Proposal 4 27,133,360 1,000 100 0
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Restated Certificate of Incorporation, as amended.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
RENAISSANCE COMMUNICATIONS CORP.
(Registrant)
July 30, 1996 By:/S/ JOHN C. FERRARA
John C. Ferrara
Vice President and Chief Financial Officer
(Principal Financial Officer)
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
3.1 Restated Certificate of Incorporation, as amended.
Exhibit 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
RENAISSANCE COMMUNICATIONS CORP.
Renaissance Communications Corp., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware
(hereinafter called the "Corporation"), hereby certifies:
1. That the Corporation's present name is "RENAISSANCE COMMUNICATIONS
CORP." That the Corporation was originally incorporated under the name
"Television Enterprises, Inc." and its original Certificate of Incorporation was
filed with the Secretary of State of the State of Delaware on October 30, 1986.
2. That, pursuant to Sections 242 and 245 of the General Corporation
Law of the State of Delaware, this Restated Certificate of Incorporation
restates and integrates and further amends the provisions of the Certificate of
Incorporation of the Corporation.
3. That this Restated Certificate of Incorporation and the amendments
to the Certificate of Incorporation contained herein were declared advisable and
adopted by the unanimous written consent of the Board of Directors of the
Corporation and were approved by written consent of the holders of a majority of
outstanding shares of Common Stock of the Corporation and by the unanimous
written consent of the holders of the outstanding shares of Series B
Exchangeable Preferred Stock voting as a class pursuant to Section 228 of the
General Corporation Law of the State of Delaware, and have thereby been duly
adopted in accordance with Section 245 of the General Corporation Law of the
State of Delaware.
4. The text of the Restated Certificate of Incorporation of the
Corporation as heretofore amended and supplemented is hereby restated,
integrated and further amended to read in its entirety as follows:
CERTIFICATE OF INCORPORATION
OF
RENAISSANCE COMMUNICATIONS CORP.
FIRST: The name of the Corporation is RENAISSANCE COMMUNICATIONS CORP.
SECOND: The address of the Corporation's registered office in the
State of Delaware is 32 Loockerman square, Suite L-100, in the City of Dover,
County of Rent, zip code 19901, and the name of its registered agent at that
address is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: The total number of shares of all classes of capital stock
that the Corporation shall have authority to issue is Three Million (3,000,000)
shares, of which (a) Two Million Five Hundred Thousand (2,500,000) shares shall
be Preferred Stock with a par value of $1.00 per share (hereinafter referred to
as "Preferred Stock") and (b) Five Hundred Thousand (500,000) shares shall be
Common Stock with a par value of $1.00 per share (hereinafter referred to as the
"Common Stock").
The following is a statement of the designations, powers, preferences
and rights of the classes of capital stock of the Corporation and the
qualifications, limitations or restrictions thereof.
A.
Preferred Stock may be issued in one or more series. The number of
shares of any series of Preferred Stock and the designations, powers,
preferences and relative, participating, optional and other special rights of
Preferred Stock of each series, and the qualifications, limitations and
restrictions thereof, shall be such as are stated and expressed herein and, to
the extent not stated and expressed herein, shall be such as may be fixed by the
Board of Directors (authority so to do being hereby expressly granted) and
stated and expressed in a resolution or resolutions adopted by the Board of
Directors providing for the issue of Preferred Stock of such series. Such
resolution or resolutions shall (a) specify the number of shares constituting
that series and the distinctive designation of that series, (b) state the
dividend rate, if any, therefor, which dividend rate may vary under different
conditions and at different dates, and, if a dividend rate shall be fixed for
shares of Preferred Stock of such series, the terms and conditions of
declaration and payment of dividends on such shares (which terms and conditions
may vary under different conditions and at different dates), including, without
limitation, whether dividends shall be cumulative, and, if so, from which date
or dates, and the relative rights of priority, if any, of payment of dividends
on shares of that series, (c) fix the rights of shares of Preferred Stock of
such series in the event of a voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, (d) state whether or not shares of Preferred
Stock of such series shall be redeemable and, if so, the terms and conditions of
such redemption, including, without limitation, the date or dates upon or after
which such shares shall be redeemable, and the amount per share payable in case
of redemption, which amounts may vary under different conditions and at
different redemption dates, (e) fix the voting powers of the holders of
Preferred Stock of such series, whether full or limited, or without voting
powers; and may, in a manner not inconsistent with the provisions of this
Article FOURTH, (i) limit the number of shares of such series which may be
issued, (ii) provide for a sinking fund for the purchase or redemption or a
purchase fund for the purchase of shares of such series and the terms and
provisions governing the operation of any such fund and the status as to
reissuance of shares of Preferred Stock purchased or otherwise reacquired or
redeemed or retired through the operation thereof, and that so long as the
Corporation is in default as to such sinking or purchase fund the Corporation
shall not (with such exceptions, if any, as may be provided) pay any dividends
upon or purchase, redeem or otherwise acquire shares of capital stock ranking
junior to Preferred Stock as to dividends or distribution of assets upon
liquidation (such capital stock is hereinafter referred to in this Part A of
Article FOURTH as "junior stock"), (iii) impose conditions or restrictions upon
the creation of indebtedness of the Corporation or upon the issue of additional
Preferred Stock or other capital stock ranking equally therewith or prior
thereto as to dividends or distribution of assets on liquidation, (iv) impose
conditions or restrictions upon the payment of dividends upon, or the making of
other distributions to the holders of, or the purchase, redemption, or
reacquisition of, junior stock, (v) grant to the holders of Preferred Stock of
such series the right to convert such stock into shares of junior stock, and
(vi) fix such other designations, powers, preferences, rights, qualifications,
limitations and restrictions of shares of Preferred Stock of such series as the
Board of Directors may determine and which are not inconsistent with the
provisions of this Article FOURTH. The term "fixing for such series" and similar
terms shall mean stated and expressed in a resolution or resolutions adopted by
the Board of Directors providing for the issue of Preferred Stock of the series
referred to therein.
B.
Subject to the prior rights of Preferred Stock, set forth in Part A of
this Article FOURTH and to the conditions set forth therein or in any resolution
of the Board of Directors providing for issuance of any particular series of
Preferred Stock, such dividends (payable in cash, stock or otherwise) as may be
determined by the Board of Directors may be declared and paid on Common Stock
from time to time out of any funds legally available therefor.
Subject to the provisions of Part A of this Article FOURTH, the
holders of Common Stock shall be entitled to one vote for each share held at all
meetings of stockholders of the Corporation; provided, however, that the holders
of all or any series of Preferred Stock shall have certain voting rights as
provided in Parts C, D, E and F hereof or in any resolution of the Board of
Directors providing for issuance of any particular series of Preferred Stock,
which are not otherwise provided to the holders of the Common Stock.
C.
There is hereby created a series of Preferred Stock, hereby designated
as the Series A Senior Preferred Stock, to consist of 100,000 shares, par value
of $1.00 per share, having the designations, preferences, relative
participating, optional and other special rights, qualifications, limitations
and restrictions as hereinafter set forth:
1. DESIGNATION. The designation of the series of Preferred Stock
created hereby is Series A Senior Preferred Stock and the number of shares
constituting such Series is One Hundred Thousand (100,000) (the "Senior
Preferred Stock").
2. RANK. The Senior Preferred Stock shall, with respect to dividend
rights, rights on redemption and rights on liquidation, winding up and
dissolution, rank prior to any other equity securities of the Corporation,
including all classes of Common Stock and any other series of Preferred Stock
established by the Board of Directors (all of such equity securities of the
corporation to which the Senior Preferred Stock ranks prior are collectively
referred to herein as the "Junior Stock").
3. DIVIDENDS.
(i) The holders of Senior Preferred Stock shall be entitled to
receive in preference to the holders of any Junior Stock, when, as and if
declared by the Board of Directors, out of funds legally available for the
payment of dividends, cumulative dividends at the rate of $10.00 per share per
annum. Such dividends shall begin to accrue from and after the date of issuance
and shall be payable in equal quarterly installments at the rate of $10.00 per
share per annum on a cumulative basis quarterly on the 1st day of January,
April, July and October in each year (each of such dates being a "dividend
payment date") with the first such payment to be made on July 1, 1989, provided
that the amount of the first quarterly dividend payment shall be computed at a
rate of $10.00 per share per annum based on the number of days from the date of
issuance to the date of payment thereof and further provided that the quarterly
dividend payable on any Senior Preferred Stock which is outstanding for a
portion of any quarterly period shall be computed based on the number of days
during such quarterly period such Senior Preferred Stock is outstanding. Any
dividend payments to be made with respect to the Senior Preferred Stock for the
period through July 1, 1992 shall be made by the Corporation issuing additional
fully paid and nonassessable shares of Senior Preferred Stock at the rate of .10
of a share for each $10.00 of such accrued dividends. The issuance of such
additional shares shall constitute full payment of such dividends.
(ii) All dividends paid with respect to shares of the Senior
Preferred Stock pursuant to paragraph 3(i) of Part C hereof shall be paid pro
rata to the holders entitled thereto. Any dividend not paid shall be fully
cumulative and shall accrue quarterly (whether or not declared), with an amount
equivalent to interest at the rate of 10% per annum, compounded quarterly.
(iii) Notwithstanding anything contained herein to the contrary,
no cash dividends on shares of Senior Preferred Stock shall be declared by the
Board of Directors or paid or set apart for payment by the Corporation at such
time as the terms and provisions of any agreement of the Corporation relating to
its indebtedness specifically prohibits such declaration, payment or setting
apart for payment or provides that such declaration, payment or setting apart
for payment would constitute a breach thereof or a default thereunder; provided,
however, that nothing herein contained shall in any way or under any
circumstance be construed or deemed to require the Board of Directors to declare
or the Corporation to pay or set apart for payment any dividends on shares of
the Senior Preferred Stock at any time, whether permitted by any of such
agreements or not.
(iv) (a) Holders of shares of the Senior Preferred Stock shall be
entitled to receive the dividends provided for in paragraph 3(i) of Part C
hereof in preference to and in priority over any dividends upon any of the
Junior Stock.
(b) So long as any shares of the Senior Preferred Stock are
outstanding, the Corporation shall not declare, pay or set apart for payment on
or make any distribution in respect of any of the Junior Stock, either directly
or indirectly, other than distributions or dividends in Junior Stock to the
holders of Junior Stock, unless prior to or concurrently with such declaration,
payment, setting apart for payment, or distribution, all accrued and unpaid
dividends on shares of the Senior Preferred Stock not paid on the dates provided
for in paragraph 3(i) of Part C hereof (including accrued dividends not paid by
reason of the terms and conditions of paragraph 3(i) or paragraph 3(iii) of Part
C hereof) shall have been or be paid.
(c) So long as any shares of the Senior Preferred Stock are
outstanding, the Corporation shall not make any payment on account of, or set
apart for payment money for a sinking or other similar fund for, the purchase,
redemption or other retirement of, any of the Junior Stock or any warrants,
rights, calls or options exercisable for or convertible into any of the Junior
Stock, and shall not permit any corporation or other entity directly or
indirectly controlled by the Corporation to purchase or redeem any of the Junior
Stock or any warrants, rights, calls or options exercisable for or convertible
into any of the Junior Stock.
(v) Each fractional share of Senior Preferred Stock outstanding
shall be entitled to a ratably proportionate amount of all dividends accruing
with respect to each outstanding share of Senior Preferred Stock pursuant to
paragraph 3(i) of Part C hereof, and all such dividends with respect to such
outstanding fractional shares shall be fully cumulative and accrue (whether or
not declared), with interest at the rate of 10% per annum, and shall be payable
in the same manner and at such times as provided for in paragraph 3(i) of Part C
hereof with respect to dividends on each outstanding share of Senior Preferred
Stock.
(vi) Notwithstanding any other provision contained in this
paragraph 3 of this Part C, if the Corporation fails to make payment of the Put
Price for the Put Shares on the Put Closing Date (as such terms are defined in
Section 8.21 of that certain WDZL-TV Assets Purchase Agreement by and between 39
Broadcasting, Ltd. and the Corporation, dated as of October 7, 1988, as amended
by Amendment No. 1 thereto) for any reason other than the failure of 39
Broadcasting, Ltd. to deliver to the Corporation a Notice of Sale (as defined in
Section 8.21 of said WDZL-TV Assets Purchase Agreement) or to deliver to the
Corporation the certificates for said Put Shares together with stock powers,
stock transfer tax stamps and signature guaranties as set forth in Section 8.21
of said WDZL-TV Assets Purchase Agreement, then the dividend rate on the Senior
Preferred Stock shall, as of the Put Closing Date and until the Corporation
makes payment of the Put Price, be increased to the rate of $12.44 per share per
annum and such dividends shall be paid in the manner provided in paragraph 3(i)
of this Part C. In the event that, following the Put Closing Date, the
Corporation makes payment of said Put Price for said Put Shares, the dividend
rate on the Senior Preferred Stock shall, as of the date of such payment, be
reduced to the rate of $10.00 per share per annum and such dividends shall be
paid in the manner provided in paragraph 3(i) of this Part C.
4. LIQUIDATION PREFERENCE.
(i) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holders of
shares of Senior Preferred Stock then outstanding shall be entitled to be paid
out of the assets of the Corporation available for distribution to its
stockholders an amount in cash equal to $100.00 for each share outstanding, plus
an amount in cash equal to all accrued but unpaid dividends thereon to the date
fixed for liquidation, dissolution or winding up before any payment shall be
made or any assets distributed to the holders of any of the Junior Stock. Except
as provided in the preceding sentence, holders of Senior Preferred Stock shall
not be entitled to any distribution in the event of liquidation, dissolution or
winding up of the affairs of the Corporation. If the assets of the Corporation
are not sufficient to pay in full the liquidation payments payable to the
holders of outstanding shares of Senior Preferred Stock, then the holders of all
such shares shall share ratably in such distribution of assets in accordance
with the amount which would be payable on such distribution if the amounts to
which the holders of outstanding shares of Senior Preferred Stock are entitled
were paid in full.
(ii) For the purposes of this paragraph 4 of this Part C, the
voluntary sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all the property or
assets of the Corporation or the consolidation or merger of the Corporation with
one or more corporations (excluding a merger where the Corporation is the
surviving corporation of such merger) shall be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, subject to the Corporation
having funds legally available for any payment required as a result thereof.
(iii) The liquidation payment with respect to each outstanding
fractional share of Senior Preferred Stock shall be equal to a ratably
proportionate amount of the liquidation payment with respect to each outstanding
share of Senior Preferred Stock.
5. REDEMPTION.
(i) The Senior Preferred Stock shall be redeemable, at the option
of the Corporation, in whole or in part, at any time or from time to time, at a
redemption price of $100.00 per share, together with accrued and unpaid
dividends thereon to the date fixed for redemption, to the extent the
Corporation shall have funds legally available for such payment.
(ii) On May 3, 1999 or as soon thereafter as funds are legally
available therefor, the Corporation shall, to the extent funds are legally
available therefor, redeem all outstanding shares of Senior Preferred Stock for
a price per whole share of $100.00, together with accrued and unpaid dividends
thereon to the date of redemption.
(iii) Shares of Senior Preferred Stock which have been issued and
reacquired in any manner, including shares purchased or redeemed, shall (upon
compliance with any applicable provisions of the laws of the State of Delaware)
have the status of authorized and unissued shares of the class of Preferred
Stock undesignated as to series and may be redesignated and reissued as part of
any series of Preferred Stock; provided, however, that no such issued and
reacquired shares of Senior Preferred Stock shall be reissued or sold as Senior
Preferred Stock unless reissued as a stock dividend on shares of Senior
Preferred Stock.
(iv) Notwithstanding the foregoing provisions of this paragraph 5
of this Part C, unless the full cumulative dividends on all outstanding shares
of Senior Preferred Stock shall have been paid or contemporaneously are declared
and paid for all past dividend periods, none of the shares of Senior Preferred
Stock shall be redeemed unless all outstanding shares of Senior Preferred Stock
are simultaneously redeemed.
6. PROCEDURE FOR REDEMPTION.
(i) In the event that fewer than all the outstanding shares of
Senior Preferred Stock are to be redeemed, the number of shares to be redeemed
shall be determined by the Board of Directors and the shares to be redeemed
shall be selected by lot or pro rata as may be determined by the Board of
Directors, except that in any redemption of fewer than all the outstanding
shares of Senior Preferred Stock, the Corporation may redeem all shares held by
any holders of a number of shares of Senior Preferred Stock not to exceed 100,
as may be specified by the Corporation.
(ii) In the event the Corporation shall redeem shares of Senior
Preferred Stock, notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 days nor more than 60 days prior to the
redemption date, to each holder of record of shares to be redeemed at such
holder's address as the same appears on the stock register of the Corporation.
Each such notice shall state: (a) the redemption date; (b) the number of shares
of Senior Preferred Stock to be redeemed and, if less than all the shares held
by such holder are to be redeemed from such holder, the number of shares to be
redeemed from such holder; (c) the redemption price; (d) the place or places
where certificates for such shares are to be surrendered for payment of the
redemption price; and (e) that dividends on the shares to be redeemed will cease
to accrue on such redemption date.
(iii) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
money for the payment of the redemption price of the shares called for
redemption) dividends on the shares of Senior Preferred Stock so called for
redemption shall cease to accrue, and said shares shall no longer be deemed to
be outstanding and shall have the status of authorized but unissued shares of
Preferred Stock, unclassified as to series, and shall not be reissued as shares
of Senior Preferred Stock (unless reissued as a stock dividend on Senior
Preferred Stock), and all rights of the holders thereof as stockholders of the
Corporation (except the right to receive from the Corporation the redemption
price and any accrued and unpaid dividends) shall cease. Upon surrender in
accordance with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such shares shall
be redeemed by the Corporation at the redemption price aforesaid. In the event
fewer than all of the shares represented by any such certificate are redeemed, a
new certificate shall be issued representing the unredeemed shares without cost
to the holder thereof.
7. VOTING RIGHTS.
(i) The holders of record of shares of Senior Preferred Stock
shall not be entitled to any voting rights except as hereinafter provided in
this paragraph 7 of this Part C or as otherwise provided by law.
(ii) So long as any shares of Senior Preferred Stock are
outstanding, the Corporation will not without the affirmative vote or consent of
the holders of a majority of the issued and outstanding Senior Preferred Stock
voting as a separate class create any class or series of shares ranking on a
parity with or prior to the Senior Preferred Stock either as to dividends or
redemption or upon liquidation, or amend, alter or repeal (whether by merger,
consolidation or otherwise) the Corporation's certificate of incorporation to
adversely affect the voting powers, rights or preferences of the Senior
Preferred Stock.
(iii) In case at any time four or more payments of dividends on
the Senior Preferred Stock shall not have been paid in full, then during the
period (the "Voting Period") commencing with such time and ending with the time
when one full fiscal quarter of the Corporation shall have elapsed after all
arrears in dividend payments on the Senior Preferred Stock shall have been paid,
at any meeting of stockholders of the Corporation held for the election of
directors during the Voting Period, the holders of a majority of the issued and
outstanding shares of Senior Preferred Stock present in person or represented by
proxy at said meeting shall be entitled, as a class to the exclusion of the
holders of all other classes of stock of the Corporation, to elect one
additional director to the Board of Directors of the Corporation. The rights of
the holders of Senior Preferred Stock contained in this paragraph 7 (iii) of
this Part C may be exercised by unanimous written consent in lieu of a meeting
or by a vote at any annual or special meeting of the stockholders of the
Corporation (including a special meeting of the holders of the Senior Preferred
Stock called as provided in paragraphs 7(iv) and (v) of this Part C below). At
the end of the Voting Period, the term of such additional director shall
automatically terminate and the holders of the Senior Preferred Stock shall be
automatically divested of all voting power vested in them under this paragraph
7(iii) of this Part C but subject always to the subsequent vesting hereunder of
voting power in the holders of the Senior Preferred Stock in the event of any
similar default or defaults thereafter.
(iv) If at any time the holders of the Senior Preferred Stock
have the right to elect that one additional director pursuant to paragraph
7(iii) of this Part C above, then the Secretary of the Corporation shall upon
the written request of the holders of Senior Preferred Stock representing at
least 51% of the issued and outstanding shares of Senior Preferred Stock, call a
special meeting of stockholders for the purpose of electing such additional
member of the Board of Directors. The Corporation shall pay all reasonable
expenses of the calling and holding of any such meeting. Upon the election of
such additional director by the holders of the Senior Preferred Stock at a
special meeting, the director elected by such holders, together with all current
directors, shall constitute the directors of the Corporation until the next
annual meeting.
(v) The special meeting contemplated under paragraph 7(iv) of
this Part C shall be held at the earliest practicable date, but not more than
twenty (20) days after receipt by the Corporation of said written request, at
such place as is specified in the By-laws of the Corporation. If any such
meeting shall not be called by the Secretary of the Corporation within 10 days
after personal service of said written request on him, then the holders of
Senior Preferred Stock representing at least 51% of the issued and outstanding
shares of the Senior Preferred Stock may designate in writing one of their
number to call such meeting, and such meeting may be called by such person so
designated upon the notice required for annual meetings of stockholders and
shall be held at such specified place. Any holder so designated shall have
access to the stock books of the Corporation for the purpose of calling a
meeting of stockholders pursuant to these provisions.
(vi) At any meeting held for the purpose of electing directors at
which the holders shall have the right, voting as a separate class, to elect a
director as provided in paragraph 7(iii) of this Part C, the presence, in person
or by proxy of the holders of a majority of the aggregate number of shares of
Senior Preferred Stock then outstanding shall be required to constitute a quorum
for such election.
8. PERMITTED REDEMPTION. Notwithstanding anything to the contrary
in the foregoing provisions of this Certificate, including, without limitation,
paragraphs 3 or 5 of Part C hereof, subject to compliance with applicable law,
the Corporation or any insurance trust established by the Corporation
(including, without limitation, the insurance trust dated as of February 1, 1989
by and among the Corporation, Sidney Lapidus and Joanne R. Wenig, as trustees,
as the same may be amended from time to time) shall be permitted to redeem or
purchase all or any portion of shares of its Junior Stock at any time from the
proceeds of life and/or disability insurance maintained or held with respect to
executive officers of the Corporation (including, without limitation, Michael
Finkelstein), irrespective of whether any of the Senior Preferred Stock is then
outstanding and will remain outstanding thereafter.
D.
There is hereby created a series of Preferred Stock, hereby designated
as the Series B Exchangeable Preferred Stock, to consist of 1,200,000 shares,
par value of $1.00 per share, having the designations, preferences, relative
participating, optional and other special rights, qualifications, limitations
and restrictions as hereinafter set forth:
1. DESIGNATION. The designation of the series of Preferred Stock
created hereby is Series B Exchangeable Preferred Stock and the number of shares
constituting such series is 1,200,000 (the "Series B Preferred Stock").
2. RANK. The Series B Preferred Stock shall, with respect to dividend
rights, rights on redemption and rights on liquidation, winding up and
dissolution, rank (i) junior to the Corporation's Series A Senior Preferred
Stock (the "Senior Stock"), (ii) on a parity with the Corporation's Series C
Convertible Preferred Stock (the "Series C Preferred Stock"), (iii) prior to or
on parity with any other series of preferred stock established by the Board of
Directors as set forth in the resolution of the Corporation's Board of Directors
creating any such other series, and (iv) prior to the Corporation's Series D
Convertible Preferred Stock (the "Series D Preferred Stock") and any other
series of preferred stock which is not by its terms on a parity with or prior to
the Series B Preferred Stock and to all classes of Common Stock of the
Corporation. All of such equity securities of the Corporation to which the
Series B Preferred Stock ranks prior are collectively referred to in this Part D
as the "Junior Stock" and all such equity securities of the Corporation which
rank on parity with the Series B Preferred Stock in respect to rights and
redemption and rights on liquidation, winding up and dissolution are
collectively referred to in this Part D as "Parity Stock".
3. DIVIDENDS.
(i) Subject to the rights of the Senior Stock, the holders of
Series B Preferred Stock shall be entitled to receive in preference to the
holders of any Junior Stock and on a parity with any Parity Stock as to which
dividends are payable on a parity with the Series B Preferred Stock, when, as
and if declared by the Board of Directors, out of funds legally available for
the payment of dividends, cumulative dividends at the rate of $12.00 per share
per annum. Such dividends shall begin to accrue from and after the date of
issuance and shall be payable in equal quarterly installments at the rate of
$12.00 per share per annum on a cumulative basis quarterly on the 1st day of
January, April, July, and October in each year (each of such dates being a
"dividend payment date"), with the first such payment to be made July 1, 1989;
provided, however, that (A) the amount of the first quarterly dividend payment
shall be computed at a rate of $12.00 per share per annum based on the number of
days from the date of issuance to the date of payment thereof and further
provided that the quarterly dividend payable on any Series B Preferred Stock
which is outstanding for a portion of any quarterly period shall be computed
based on the number of days during such quarterly period such Series B Preferred
Stock is outstanding; and (B) dividends on the Series B Preferred Stock shall be
payable at the rate of $18.00 per Share per annum on a cumulative basis
quarterly beginning July 1, 1998. Any dividend payments to be made with respect
to the Series B Preferred Stock for the period through June 30, 2000 or, if
earlier, the date six months after the senior bank debt of the corporation has
been paid in full shall be made by the Corporation issuing additional fully paid
and nonassessable shares of Series B Preferred Stock at the rate of .12 of a
share for each $12.00 of such accrued dividends issued through June 30, 1998 and
at the rate of .18 of a share for each $18.00 of such accrued dividends issued
after June 30, 1998. The issuance of such additional shares shall constitute
full payment of such dividends.
(ii) All dividends paid with respect to shares of the Series B
Preferred Stock pursuant to paragraph 3(i) of this Part D shall be paid pro rata
to the holders entitled thereto. Any dividend not paid shall be fully cumulative
and shall accrue quarterly (whether or not declared), with interest at the rate
of 12% per annum through June 30, 1998 and at the rate of 18% per annum
thereafter, compounded quarterly.
(iii) Notwithstanding anything contained herein to the contrary,
no cash dividends on shares of Series B Preferred Stock shall be declared by the
Board of Directors or paid or set apart for payment by the Corporation at such
time as the terms and provisions of any agreement of the Corporation relating to
its indebtedness or Senior Stock or any Parity Stock specifically prohibits such
declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder; provided, however, that nothing herein
contained shall in any way or under any circumstances be construed or deemed to
require the Board of Directors to declare or the Corporation to pay or set apart
for payment any dividends on shares of the Series B Preferred Stock at any time,
whether permitted by any of such agreements or not.
(iv) (a) Holders of shares of the Series B Preferred Stock shall
be entitled to receive the dividends provided for in paragraph 3(i) of this Part
D hereof in preference to and in priority over any dividends upon any of the
Junior Stock.
(b) So long as any shares of the Series B Preferred Stock
are outstanding, the Corporation shall not declare, pay or set apart for payment
any dividend on any of the Junior Stock or make any payment on account of, or
set apart for payment money for a sinking or other similar fund for, the
purchase, redemption or other retirement of, any of the Junior Stock or any
warrants, rights, calls or options exercisable for or convertible into any of
the Junior Stock, or make any distribution in respect thereof, either directly
or indirectly, and whether in cash, obligations or shares of the Corporation or
other property (other than distributions or dividends in Junior Stock to the
holders of Junior Stock), and shall not permit any corporation or other entity
directly or indirectly controlled by the Corporation to purchase or redeem any
of the Junior Stock or any warrants, rights, calls or options exercisable for or
convertible into any of the Junior Stock, unless prior to or concurrently with
such declaration, payment, setting apart for payment, purchase, redemption
and/or distribution, as the case may be, all accrued and unpaid dividends on
shares of the Series B Preferred Stock not paid on the dates provided for in
paragraph 3(i) of Part D hereof (including accrued dividends not paid by reason
of the terms and conditions of paragraph 3(i) or paragraph 3(iii) of this Part
D) shall have been or be paid.
(v) Each fractional share of Series B Preferred Stock outstanding
shall be entitled to a ratably proportionate amount of all dividends accruing
with respect to each outstanding share of Series B Preferred Stock pursuant to
paragraph 3(i) of this Part D, and all such dividends with respect to such
outstanding fractional shares shall be fully cumulative and accrue (whether or
not declared), with interest at the rate of 12% per annum through June 30, 1998
and at the rate of 18% per annum thereafter, and shall be payable in the same
manner and at such tines as provided for in paragraph 3(i) of this Part D with
respect to dividends on each outstanding share of Series B Preferred Stock.
(vi) Subject to the rights of the holders of the Senior Stock, if
the Corporation shall declare a dividend on the Series B Preferred Stock and the
amount of the dividend declared or such lesser amount as may be legally
available for the payment thereof, is not sufficient to pay in full the accrued
and unpaid dividends on the Series B Preferred Stock and the accrued and unpaid
dividends on all outstanding shares of Parity Stock entitled to parity dividend
payments, then the holders of all such shares shall share ratably in such
distribution of assets as follows: with respect to all outstanding shares of
Series B Preferred Stock, an amount equal to (A) the amount which is available
for such distribution multiplied by (B) a fraction, (1) the numerator of which
is the aggregate accrued and unpaid dividends on the Series B Preferred Stock,
and (2) the denominator of which is the aggregate amount which would be payable
upon such distribution to the holders of all outstanding shares of Series B
Preferred Stock and other Parity Stock entitled to parity with respect to the
payment of dividends if the holder of each such outstanding share of Series B
Preferred Stock and each such outstanding share of such Parity Stock were paid
in full.
4. LIQUIDATION PREFERENCE.
(i) Subject to the rights of the holders of Senior Stock, in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, the holders of the shares of Series B Preferred
Stock then outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders an amount in each
equal to $100.00 for each share outstanding, plus an amount in cash equal to all
accrued but unpaid dividends thereon to the date fixed for liquidation,
dissolution or winding up before any payment shall be made or any assets
distributed to the holders of any of the Junior Stock. Except as provided in the
preceding sentence, holders of Series B Preferred Stock shall not be entitled to
any distribution in the event of liquidation, dissolution or winding up of the
affairs of the Corporation. Subject to the rights of the holders of Senior
Stock, if the assets of the Corporation are not sufficient to pay in full the
liquidation payments payable to the holders of outstanding shares of Series B
Preferred Stock and Parity Stock on the liquidation, dissolution or winding up,
then the holders of all such shares shall share ratably in such distribution of
assets as follows: with respect to all outstanding shares of Series B Preferred
Stock, an amount equal to (A) the amount which is available for such
distribution multiplied by (B) a fraction, (1) the numerator of which is the
aggregate liquidation preference of the Series B Preferred Stock, and (2) the
denominator of which is the aggregate amount which would be payable upon such
distribution to the holders of all outstanding shares of Series B Preferred
Stock and Parity Stock if the holder of each such outstanding share of Series B
Preferred Stock and each such outstanding share of Parity Stock were paid in
full, in accordance with the amount which would be payable on such distribution
if the amounts to which the holders of outstanding shares of Series B Preferred
Stock are entitled were paid in full.
(ii) The liquidation payment with respect to each outstanding
fractional share of Series B Preferred Stock shall be equal to a ratably
proportionate amount of the liquidation payment with respect to each outstanding
share of Series B Preferred Stock.
5. REDEMPTION.
(i) Subject to the rights of the holders of Senior Stock and in
parity with any rights of Parity Stock, to the extent the Corporation shall have
funds legally available therefor, the Series B Preferred Stock shall be
redeemable, at the option of the Corporation, in whole or in part, at any time
or from time to time, at a redemption price of $100.00 per share, together with
accrued and unpaid dividends thereon to the date fixed for redemption
("Redemption Price").
(ii) Shares of Series B Preferred Stock which have been issued
and reacquired in any manner, including shares purchased or redeemed or
exchanged, shall (upon compliance with any applicable provisions of the laws of
the State of Delaware) have the status of authorized and unissued shares of the
class of Preferred Stock undesignated as to series and may be redesignated and
reissued as part of any series of the Preferred Stock; provided, however, that
no such issued and reacquired shares of Series B Preferred Stock shall be
reissued or sold as Series B Preferred Stock unless reissued as a stock dividend
on shares of Series B Preferred Stock.
(iii) Notwithstanding the foregoing provisions of this paragraph
5 of this Part D (but subject to the provisions of subparagraph (iv) of this
Part D below), unless the full cumulative dividends on all outstanding shares of
Senior Stock and Series B Preferred Stock shall have been paid or
contemporaneously are declared and paid for all past dividend periods, none of
the shares of Series B Preferred Stock shall be redeemed unless all outstanding
shares of Series B Preferred Stock are simultaneously redeemed.
(iv) Notwithstanding anything to the contrary contained in this
Certificate, in the event that Michael Finkelstein dies or is disabled while he
is employed by the Corporation, any holder of Series B Preferred Stock may
require the insurance trust dated as of February 1, 1989 by and among the
Corporation and Sidney Lapidus and Joanne R. Wenig, as trustees, as the same Day
be amended from time to time (the "Insurance Trust") which is the beneficiary of
life insurance and disability policies on Mr. Finkelstein to repurchase all or
any portion of the Series B Preferred Stock owned by such holder in accordance
with the provisions of the Insurance Trust and the provisions of Section 9.9 of
the Stock Purchase Agreement dated October 28, 1988 by and among the
Corporation, Michael Finkelstein and Warburg, Pincus Capital Company, L.P., as
the same may be in effect from time to time.
(v) Subject to the prior redemption rights of the holders of the
Senior Stock and in parity with any rights of Parity Stock, if at any time the
Corporation voluntarily sells, conveys, exchanges or transfers (for cash, shares
of stock, securities or other consideration) all or substantially all the
property or assets of the Corporation (other than a sale, conveyance, exchange
or transfer to a subsidiary of the Corporation) or the Corporation consolidates
or merges with one or more corporations (excluding a merger where the
Corporation or a direct or indirect subsidiary or parent of the Corporation is
the surviving corporation of such merger), the Corporation shall, to the extent
the Corporation shall have funds legally available therefor, redeem all
outstanding shares of Series B Preferred Stock.
(vi) If the Corporation does not have funds legally available on
the date specified for redemption in subparagraphs (i), (ii), (iv) or (v) above
for the redemption of all the Series B Preferred Stock and any shares of Parity
Stock then entitled to redemption, the Corporation shall redeem on such date,
and on the 45th day after the close of each fiscal quarter of the Corporation,
the number of shares of Series B Preferred Stock whose aggregate Redemption
Price is equal to the amount of funds legally available for redemptions on such
date multiplied by a fraction, the numerator of which is the aggregate
Redemption Price of the Series B Preferred Stock originally issued and the
denominator of which is the aggregate Redemption Price of the Series B Preferred
Stock and the redemption price of any Parity Stock then entitled to redemption.
6. EXCHANGE. Subject to the rights of the Senior Stock and
subject to the Corporation having funds legally available for such payment, the
Series B Preferred Stock shall be exchangeable, at the option of the
Corporation, with the consent of the holders of a majority of the Series B
Preferred Stock, in whole or in part, at any time or from time to time on the
last day of March, June, September or December of any year, for debt securities
of the Corporation which shall be referred to as the Corporation's 12%
Subordinated Exchange Debentures due December 31, 1999 (the "Exchange
Debentures"). Holders of the outstanding shares of Series B Preferred Stock will
be entitled to receive $100.00 principal amount of the Exchange Debentures in
exchange for each share of Series B Preferred Stock held by them at the time of
exchange. At such time, the rights of the holders of Series B Preferred Stock so
exchanged as stockholders of the Corporation shall cease (except the right to
receive on the date of the exchange an amount equal to the amount of accrued and
unpaid dividends to the dividend payment date which coincides with the date of
exchange), and the person or persons entitled to receive the Exchange Debentures
issuable upon exchange shall be treated for all purposes as the registered
holder or holders of such Exchange Debentures as of the dividend payment date
which coincides with the date of exchange. Upon such exchange, the Corporation
and the holder of the Series B Preferred Stock will agree on appropriate
covenants (including, without limitation, subordination provisions and sinking
fund and other redemption provisions) to be contained in the Exchange Debentures
and the Corporation will enter into an appropriate Indenture containing
provisions normally contained in indentures relating to publicly issued
subordinated debentures. Interest on the Exchange Debentures shall be payable in
cash. In accordance with paragraph 7 of this Part D, the Corporation will mail
to each record holder of Series B Preferred Stock written notice of its
intention to exchange no less than 30 nor more than 60 days prior to the date of
such exchange. On the date of the exchange, the Corporation shall pay an amount
equal to accrued but unpaid dividends, at the Corporation's option, in cash or
in Exchange Debentures (at the rate of $100.00 initial principal amount for each
$100.00 in accrued but unpaid dividends).
7. PROCEDURE FOR REDEMPTION OR EXCHANGE.
(i) Except as provided in paragraph 5(iv) of this Part D, in the
event that fewer than all the outstanding shares of Series B Preferred Stock are
to be redeemed or exchanged, the number of shares to be redeemed or exchanged
shall be determined by the Board of Directors and the shares to be redeemed or
exchanged shall be selected by lot or pro rata as may be determined by the Board
of Directors, except that in any redemption or exchange of fewer than all the
outstanding shares of Series B Preferred Stock, the Corporation may redeem or
exchange all shares held by any holders of a number of shares of Series B
Preferred Stock not to exceed 100, as may be specified by the Corporation.
(ii) In the event the Corporation shall redeem or exchange shares
of Series B Preferred Stock, notice of such redemption or exchange shall be
given by first class mail, postage prepaid, mailed not less than 30 days nor
more than 60 days prior to the redemption or exchange date, to each holder of
record of the shares to be redeemed or exchanged at such holder's address as the
same appears on the stock register of the Corporation. Each such notice shall
state: (a) the redemption or exchange date; (b) the number of shares of Series B
Preferred Stock to be redeemed or exchanged and, if less than all the shares
held by such holder are to redeemed or exchanged from such holder, the number of
shares to be redeemed or exchanged from such holder; (c) the redemption or
exchange price; (d) the place or places where certificates for such shares are
to be surrendered for payment of the redemption price or exchange for the
Exchange Debentures; and (e) that dividends on the shares to be redeemed or
exchanged will cease to accrue on such redemption date or the date of exchange.
(iii) Notice having been mailed as aforesaid, from and after the
redemption date or the exchange date (unless, in the case of a redemption,
default shall be made by the Corporation in providing money for the payment of
the redemption price of the shares called for redemption) dividends on the
shares of Series B Preferred Stock so called for redemption or exchange shall
cease to accrue, and said shares shall no longer be deemed to be outstanding and
shall have the status of authorized but unissued shares of Preferred Stock,
unclassified as to series, and shall not be reissued as shares of Series B
Preferred Stock (unless reissued as a stock dividend on Series B Preferred
Stock), and all rights of the holders thereof as stockholders of the Corporation
(except the right to receive from the Corporation the redemption price or the
Exchange Debentures upon exchange and any accrued and unpaid dividends) shall
cease. Upon surrender in accordance with said notice of the certificates for any
shares so redeemed or exchanged (properly endorsed or assigned for transfer, if
the Board of Directors of the Corporation shall so require and the notice shall
so state), such shares shall be redeemed or exchanged by the Corporation at the
redemption price or exchange rate aforesaid. In the event fewer than all of the
shares represented by any such certificate are redeemed or exchanged, a new
certificate shall be issued representing the unredeemed or unexchanged shares
without cost to the holder thereof.
8. VOTING RIGHTS.
(i) The holders of record of shares of Series B Preferred Stock
shall not be entitled to any voting rights except as hereinafter provided in
this paragraph 8 of this Part D or as otherwise provided by law.
(ii) So long as any shares of Series B Preferred Stock are
outstanding, the Corporation will not without the affirmative vote or consent of
the holders of a majority of the issued and outstanding Series B Preferred Stock
voting as a separate class create any class or series of shares (other than the
Senior Stock and the Series C Preferred Stock) ranking on a parity with or prior
to the Series B Preferred Stock either as to dividends or redemption or upon
liquidation, or amend, alter or repeal (whether by merger, consolidation or
otherwise) the Corporation's certificate of incorporation to adversely affect
the voting powers, rights or preferences of the Series B Preferred Stock.
(iii) So long as any shares of Series B Preferred Stock shall be
issued and outstanding, the holders of the Series B Preferred Stock shall have
the right, voting separately as a class, to elect a majority of the members of
the Board of Directors of the Corporation at all times, including a majority of
the Board of Directors upon and after the election of a director pursuant to
paragraph 7(iii) of Part C of Article FOURTH of the Certificate of Incorporation
and upon and after any expansion of the Board of Directors pursuant to ARTICLE
TENTH of the Certificate of Incorporation. The holders of Series B Preferred
Stock shall have the right, by plurality vote, to remove any directors elected
by the holders of Series B Preferred Stock. If the office of any director
elected by the holders of Series B Preferred Stock becomes vacant by reason of
death, resignation, retirement, disqualification, removal from office, by an
increase in the number of directors, or otherwise, the remaining directors
elected by the holders of Series B Preferred Stock (or appointed to fill a
vacancy) may choose a successor or additional person who shall hold office for
the unexpired term in respect of which such vacancy occurred. Subject to the
provisions of Part A of Article FOURTH of the Certificate of Incorporation, the
holders of the Common Stock of the Corporation shall have the right, voting
separately as a class, to elect the number of directors not elected by the
holders of the Series B Preferred Stock.
(iv) The rights of holders of Series B Preferred Stock may be
exercised at a special meeting of such holders called as provided herein or at
an annual meeting of stockholders held for the purpose of electing directors.
The holders of record of at least 25% of the Series B Preferred Stock then
outstanding may designate in writing one of their number to call a special
meeting of such holders and such meeting may be called by the person so
designated in accordance with the notice required for meetings of stockholders,
with such meeting to be held in such place in the continental United states as
may be specified in such notice. Whenever holders of Series B Preferred Stock
are required or permitted to take any action by vote, such action may be taken
without a meeting on written consent, setting forth the action so taken and
signed by the holders of Series B Preferred Stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted.
E.
There is hereby created a series of Preferred Stock, hereby
designated as the Series C Convertible Preferred Stock, to consist of 164,000
shares, par value of $1.00 per share, having the designations, preferences,
relative participating, optional and other special rights, qualifications,
limitations and restrictions as hereinafter set forth:
1. DESIGNATION. The designation of the series of Preferred Stock
created hereby is Series C Convertible Preferred Stock and the number of shares
constituting such series is One Hundred Sixty-Four Thousand (164,000) (the
"Series C Preferred Stock").
2. RANK. The Series C Preferred Stock shall, with respect to
rights on redemption and rights on liquidation, winding up and dissolution, rank
(i) junior to the Corporation's Series A Senior Preferred Stock (the "Senior
Preferred Stock"), (ii) on a parity with the Corporation's Series B Exchangeable
Preferred Stock (the "Series B Preferred Stock") and the Corporation's Series D
Preferred Stock (the "Series D Preferred Stock"), (iii) prior to or on parity
with any other series of preferred stock established by the Board of Directors
as set forth in the resolution of the Corporation's Board of Directors creating
any such other series, and (iv) prior to all classes of Common Stock of the
Corporation. All of such equity securities of the Corporation to which the
Series C Preferred Stock ranks prior are collectively referred to herein as the
"Junior Stock" and all such equity securities of the Corporation which rank on
parity with the Series C Preferred Stock in respect to rights and redemption and
rights on liquidation, winding up and dissolution are collectively referred to
as "Parity Stock".
3. DIVIDENDS. The holders of Series C Preferred Stock shall only
be entitled to receive dividends as and when declared by the Board of Directors
of the Corporation.
4. LIQUIDATION PREFERENCE.
(i) Subject to the rights of the holders of the Senior Preferred
Stock, in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, the holders of shares of Series C
Preferred Stock then outstanding shall be entitled to be paid, for each share
outstanding, out of the assets of the Corporation available for distribution to
its stockholders an amount equal to (A) the Redemption Price (as such term is
defined in paragraph 5 of this Part E below) during the period from the second
anniversary of the date of the initial issuance to and including the seventh
anniversary thereof, or (B) the Accreted Value (as such term is defined in
paragraph 9(i) of this Part E below) during the periods from initial issuance to
the day preceding the second anniversary thereof and after the seventh
anniversary of the initial issuance, in each case determined as of the date of
the action by the Corporation effecting such liquidation, dissolution or winding
up, before any payment shall be made or any assets distributed to the holders of
any Junior Stock. Except as provided in the preceding sentence, holders of
series C Preferred Stock shall not be entitled to any distribution in the event
of liquidation, dissolution or winding up of the affairs of the Corporation.
Subject to the rights of the holders of the Senior Preferred Stock, if the
assets of the Corporation are not sufficient to pay in full the amounts payable
to the holders of outstanding shares of Series C Preferred Stock and Parity
Stock on liquidation, dissolution or winding up, then the holders of all such
shares shall share ratably in such distribution of assets as follows: with
respect to all outstanding shares of Series C Preferred Stock, an amount equal
to (A) the amount which is available for such distribution multiplied by (B) a
fraction, (1) the numerator of which is the aggregate liquidation preference of
the Series C Preferred Stock, and (2) the denominator of which is the aggregate
amount which would be payable upon such distribution to the holders of all
outstanding shares of Series C Preferred Stock and Parity Stock if the holder of
each such outstanding share of Series C Preferred Stock and each such
outstanding share of Parity Stock were paid in full.
(ii) The liquidation payment with respect to any outstanding
fractional share of Series C Preferred Stock shall be equal to a ratably
proportionate amount of the liquidation payment with respect to each outstanding
share of Series C Preferred Stock.
5. REDEMPTION.
(i) Subject to the prior redemption rights of the holders of the
Senior Preferred Stock, to the extent the Corporation shall have funds legally
available therefor, the Series C Preferred Stock shall be redeemable, at the
option of the Corporation, in whole but not in part, at any time and from time
to time, on or after the second anniversary of the date of its initial issuance
and prior to or on the seventh anniversary of its initial issuance, at a
redemption price equal to (A) the "Redemption Value" per share for the
applicable period set forth below at each anniversary date or (B) with respect
to any date not an anniversary date, the Redemption Value for the immediately
preceding anniversary date plus an amount equal to the difference between the
Redemption Values at the immediately succeeding anniversary date and at the
immediately preceding anniversary date multiplied by a fraction, the numerator
of which is the number of days elapsed from the immediately preceding
anniversary date to the redemption date and the denominator of which is 365 (the
"Redemption Price"), to the extent the Corporation shall have funds legally
available for such payment:
ANNIVERSARY DATE REDEMPTION VALUE
Second $23.9389
Third 26.8116
Fourth 30.0290
Fifth 33.6325
Sixth 37.6684
(ii) If at any time the Corporation shall redeem more than 50% of
the aggregate number of shares of Series B Preferred Stock originally issued or
50% of the aggregate number of shares of Series D Stock originally issued, the
Corporation shall, to the extent the Corporation shall have funds legally
available for such payment, redeem all outstanding shares of Series C Preferred
Stock.
(iii) If at any time Warburg, Pincus Capital Company L.P. or
Michael Finkelstein or his designees or persons controlling, controlled by or
under common control with Warburg, Pincus Capital Company L.P. or Michael
Finkelstein shall cease to own capital stock of the Corporation allowing such
persons as a group to elect a majority of the Board of Directors, and subject to
the prior redemption rights of the holders of the Senior Preferred Stock and on
a parity with any rights of holders of Parity Stock, the Corporation shall, to
the extent funds are legally available therefor, redeem all outstanding shares
of Series C Preferred Stock at a price equal to (A) the Redemption Price during
the period from the second anniversary of the date of the initial issuance to
and including the seventh anniversary thereof, or (B) the Accreted Value (as
such term is defined in paragraph 9(i) below) during the periods from initial
issuance to the day preceding the second anniversary thereof and after the
seventh anniversary of the initial issuance, in each case determined as of the
date of redemption.
(iv) Subject to the prior redemption rights of the holders of the
Senior Preferred Stock and in parity with any rights of holders of Parity Stock,
on the tenth anniversary of the initial issuance of the Series C Preferred Stock
or as soon thereafter as funds are legally available therefor, the Corporation
shall, to the extent funds are legally available therefor, redeem all
outstanding shares of Series C Preferred Stock at a price per whole share of
$100.00.
(v) Subject to the prior redemption rights of the holders of the
Senior Preferred Stock, if at any time the Corporation voluntarily sells,
conveys, exchanges or transfers (for cash, shares of stock, securities or other
consideration) of all or substantially all the property or assets of the
Corporation (other than a sale, conveyance, exchange or transfer to a subsidiary
of the Corporation) or the Corporation consolidates or merges with one or more
corporations (excluding a merger where the Corporation or a direct or indirect
subsidiary or parent of the Corporation is the surviving corporation of such
merger), the Corporation shall, to the extent the Corporation shall have funds
legally available therefor, redeem all outstanding shares of Series C Preferred
Stock.
(vi) If the Corporation does not have funds legally available on
the date specified for redemption in subparagraphs (ii), (iii), (iv) or (v)
above for the redemption of all the Series C Preferred Stock and any shares of
Parity Stock then entitled to redemption, the Corporation shall redeem on such
date, and on the 45th day after the close of each fiscal quarter of the
Corporation, the number of shares of Series C Preferred Stock whose aggregate
Redemption Price is equal to the amount of funds legally available for
redemptions on such date multiplied by a fraction, the numerator of which is the
aggregate Redemption Price of the Series C Preferred Stock originally issued and
the denominator of which is the aggregate Redemption Price of the Series C
Preferred Stock and the redemption price of any Parity Stock then entitled to
redemption.
(vii) On or after the occurrence of any event described in
subparagraph (ii), (iii) or (v) or the tenth anniversary of the initial issuance
of the Series C Preferred Stock, unless all the Series C Preferred Stock shall
have been redeemed as provided in this paragraph 5, the Corporation shall not
declare or pay cash dividends with respect to any Parity Stock or Junior Stock.
(viii) Shares of Series C Preferred Stock which have been issued
and reacquired in any manner, including shares purchased or redeemed, shall
(upon compliance with any applicable provisions of the laws of the State of
Delaware) have the status of authorized and unissued shares of the class of
Preferred Stock undesignated as to series and may be redesignated and reissued
as part of any series of Preferred Stock; provided, however, that no such issued
and reacquired shares of Series C Preferred Stock shall be reissued or sold as
Series C Preferred Stock.
(ix) Notwithstanding the foregoing provisions of this paragraph
5, unless the full cumulative dividends on all outstanding shares of Senior
Preferred Stock shall have been paid or contemporaneously are declared and paid
for all past dividend periods, none of the shares of Series C Preferred Stock
shall be redeemed unless all outstanding shares of Senior Preferred Stock are
simultaneously redeemed.
6. PROCEDURE FOR REDEMPTION.
(i) In the event that fewer than all the outstanding shares of
Series C Preferred Stock are to be redeemed, the number of shares to be redeemed
shall be determined by the Board of Directors and the shares to be redeemed
shall be selected by lot or pro rata as may be determined by the Board of
Directors, except that the Corporation may redeem all shares held by any holders
of a number of shares of Series C Preferred Stock not to exceed 100, as may be
specified by the Corporation.
(ii) In the event the Corporation shall redeem shares of Series C
Preferred Stock, notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 days nor more than 60 days prior to the
redemption date, provided, however, in the event the Corporation elects to
redeem shares of Series C Preferred Stock in connection with the Corporation's
initial public offering of its Common Stock, the redemption date shall be not
later than three (3) business days after the closing date of such initial public
offering and the notice of redemption shall be mailed not less than five (5)
days or more than 60 days prior to the redemption date. Any such notice of
redemption shall be sent as aforesaid to each holder of record of shares to be
redeemed at such holder's address as the same appears on the stock register of
the Corporation. Each such notice shall state: (a) the redemption date; (b) the
number of shares of Series C Preferred Stock to be redeemed and, if less than
all the shares held by such holder are to be redeemed from such holder, the
number of shares to be redeemed from such holder; (c) the redemption price; and
(d) the place or places where certificates for such shares are to be surrendered
for payment of the redemption price.
(iii) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
money for the payment of the redemption price of the shares called for
redemption as of the redemption date or such notice of redemption shall have
been revoked) increases in the Redemption Value and the "Accreted Value" (as
hereinafter defined) shall cease to accrue, and said shares shall no longer be
deemed to be outstanding, and all rights of the holders thereof as stockholders
of the Corporation (except the right to receive from the Corporation the
redemption price and any accrued and unpaid dividends) shall cease. Upon
surrender in accordance with said notice of the certificates for any shares so
redeemed (properly endorsed or assigned for transfer, if the Board of Directors
of the Corporation shall so require and the notice shall so state), such shares
shall be redeemed by the Corporation at the redemption price aforesaid (unless
such notice of redemption shall have been revoked by the Corporation). In the
event fewer than all of the shares represented by any such certificate are
redeemed, a new certificate shall be issued representing the unredeemed shares
without cost to the holder thereof.
(iv) The Corporation may, at its option, revoke any notice of
redemption given to the holders of Series C Preferred Stock at any time prior to
the redemption date therefor by sending notice of revocation thereof to each
record holder of shares of Series C Preferred Stock at such holder's address as
the same appears on the stock register of the Corporation, by first class mail,
postage prepaid, at any time prior to the redemption date. Any shares
surrendered for payment shall be returned to the holders who sent such shares.
7. VOTING RIGHTS.
(i) The holders of record of shares of Series C Preferred Stock
shall not be entitled to any voting rights except as hereinafter provided in
this paragraph 7 of this Part E or as otherwise provided by law.
(ii) So long as any shares of Series C Preferred Stock are
outstanding, the Corporation will not without the affirmative vote or consent of
the holders of a majority of the issued and outstanding Series C Preferred Stock
voting as a separate class create any new class or series of shares ranking
prior to the Series C Preferred Stock either as to redemption or upon
liquidation, dissolution or winding-up of the Corporation or amend, alter or
repeal (whether by merger, consolidation or otherwise) the Corporation's
certificate of incorporation to adversely affect the voting powers, rights or
preferences of the Series C Preferred Stock. Nothing in this paragraph 7 of this
Part E shall restrict the Corporation from creating, or require the consent of
holders of Series C Preferred Stock to the creation of, any separate class or
series of shares of preferred stock junior to or on parity with the Series C
Preferred Stock.
8. PERMITTED REDEMPTION. Notwithstanding anything to the contrary
in the foregoing provisions of this Part E, including, without limitation,
paragraphs 3 or 5 hereof, subject to compliance with applicable law, the
Corporation or any insurance trust established by the Corporation (including,
without limitation, the insurance trust dated as of February 1, 1989 by and
among the Corporation, Sidney Lapidus and Joanne R. Wenig, as trustees, as the
same may be amended from time to time) shall be permitted to redeem or purchase
all or any portion of shares of its series B Preferred Stock at any time from
the proceeds of life and/or disability insurance maintained or held with respect
to executive officers of the Corporation (including, without limitation, Michael
Finkelstein), irrespective of whether any of the Series C Preferred Stock is
then outstanding and will remain outstanding thereafter.
9. CONVERSION.
(i) Any Series C Preferred Stock, other than Series C Preferred
Stock the notice of redemption of which has been given and not revoked pursuant
to paragraph 6, shall be convertible into shares of Common Stock of the
Corporation, at the option of the holder, in whole or in part, at any time or
from time to time during the period commencing with the later of (A) the
effective date of the Corporation's initial public offering of its Common Stock
and (B) the date the price in such offering is established and announced to the
public, and ending at the close of business on the third business day following
such date (the "Conversion Expiration Date"). The Corporation shall give notice
of the Conversion Expiration Date and the event giving rise to the conversion
right to each holder of record of Series C Preferred Stock at such holder's
address as the same appears on the stock register of the Corporation by
recognized overnight delivery service at least four business days prior to the
Conversion Expiration Date. Any shares of Series C Preferred Stock which the
holder has not elected to convert on or prior to the Conversion Expiration Date
shall have no further conversion rights. Holders of the outstanding shares of
Series C Preferred Stock will be entitled to receive such number of shares of
Common Stock in exchange for each share of Series C Preferred Stock converted by
such holders equal to the Accreted Value (as defined below) divided by the
initial offering price of the Corporation's Common Stock to the public in the
Corporation's initial public offering. With respect to each share of Series C
Preferred Stock, the term "Accreted Value" shall mean the "Accreted Amount" set
forth below at each anniversary date or, if the date of determination is not an
anniversary date, the Accreted Amount for the immediately preceding anniversary
date plus an amount equal to the difference between the Accreted Amount at the
immediately succeeding anniversary date and at the immediately preceding
anniversary date multiplied by a fraction, the numerator of which is the number
of days elapsed from the immediately preceding anniversary date to the date of
determination and the denominator of which is 365.
ANNIVERSARY DATE ACCRETED AMOUNT
Before First $ 19.1064
First 22.5456
Second 26.6038
Third 31.3925
Fourth 37.0432
Fifth 43.7109
Sixth 51.5789
Seventh 60.8631
Eighth 71.8184
Ninth 84.7458
Tenth 100.0000
(ii) Any holder of shares of Series C Preferred Stock electing to
convert such shares or any portion thereof in accordance with this paragraph 9
shall deliver the certificates therefor to the principal office of any transfer
agent for the Common Stock or, if there shall not exist any transfer agent for
the Common Stock, the principal executive office of the Corporation, with duly
executed instructions to convert such shares into Common Stock. The conversion
right with respect to any such shares of Series C Preferred Stock shall be
deemed to have been exercised on the earlier of the Conversion Expiration Date
or at the date upon which the certificates therefore with such instructions
shall have been so delivered, and the person or persons entitled to receive the
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder or holders of such Common Stock upon said date.
(iii) The Corporation may, at its option, determine not to issue
fractional shares of Common Stock or scrip representing fractional shares upon
conversion of shares of Series C Preferred Stock, subject to applicable law and
applicable contractual obligations of the Corporation. If more than one share of
Series C Preferred Stock shall be surrendered for conversion at one time by the
same holder, the number of full shares of Common Stock which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate number
of shares of Series C Preferred Stock so surrendered. If the Corporation
determines not to issue fractional shares, instead of any fractional share of
Common Stock which would otherwise be issuable upon conversion of any share or
shares of Series C Preferred Stock, the Corporation shall pay a cash adjustment
in respect of such fraction based on the initial offering price of the Common
Stock.
(iv) The Corporation shall pay any documentary, stand or similar
issue or transfer tax due on the issue of shares of Common Stock upon any
conversion on behalf of a holder of record of the Series C Preferred Stock.
F.
There is hereby created a series of Preferred Stock, hereby
designated as the Series D Convertible Preferred Stock, to consist of 100,000
shares, par value of $1.00 per share, having the designations, preferences,
relative participating, optional and other special rights, qualifications,
limitations and restrictions as hereinafter set forth:
1. DESIGNATION. The designation of the series of Preferred Stock
created hereby is Series D Convertible Preferred Stock and the number of shares
constituting such series is 100,000 (the "Series D Preferred Stock").
2. RANK. The Series D Preferred Stock shall, with respect to
dividend rights, rights on redemption and rights on liquidation, winding up and
dissolution, rank (i) junior to the Corporation's Series A Senior Preferred
Stock (the "Series A Senior Preferred Stock"), Series B Exchangeable Preferred
Stock (the "Series B Preferred Stock") and Series C Convertible Preferred Stock
(the "Series C Preferred Stock") (collectively, with respect to the Series D
Preferred Stock, the "Senior Stock"), (ii) prior to or on parity with any other
series of preferred stock established by the Board of Directors as set forth in
the resolution of the Corporation's Board of Directors creating any such other
series (collectively with respect to the Series D Preferred Stock, the "Parity
Stock"), and (iii) prior to all classes of Common Stock of the Corporation and
any series of non-parity preferred stock (collectively, with respect to the
Series D Preferred Stock, the "Junior Stock").
3. DIVIDENDS.
(i) Subject to the rights of the Senior Stock, the holders of
Series D Preferred Stock shall be entitled, in preference to the holders of any
Junior Stock and on a parity with any Parity Stock as to which dividends are
payable, when, as and if declared by the Board of Directors, out of funds
legally available for the payment of dividends, to cumulative dividends at the
rate of $50.00 per share per annum through June 30, 2000 and at the rate of
$90.00 per share per annum commencing July 1, 2000. Such dividends shall begin
to accrue from and after the date of issuance and shall accrue in equal
quarterly installments at the rate of $50.00 per share per annum on a cumulative
basis quarterly on the 1st day of January, April, July, and October in each year
(each of such dates being a "dividend payment date"); provided, however, (i)
that the amount of the first quarterly dividend shall be computed at a rate of
$50.00 per share per annum based on the number of days from the date of issuance
to April 1, 1993, (ii) that the dividend shall accrue in equal quarterly
installments at the rate of $90.00 per share per annum on a cumulative basis
quarterly commencing July 1, 2000, and (iii) that the quarterly dividend payable
on any Series D Preferred Stock which is outstanding for a portion of any
quarterly period shall be computed based on the number of days during such
quarterly period such Series D Preferred Stock is outstanding.
(ii) All dividends paid with respect to shares of the Series D
Preferred Stock pursuant to paragraph 3(i) of this Part F shall be paid pro rata
to the holders entitled thereto. Any dividend not paid shall be fully cumulative
and shall accrue quarterly (whether or not declared).
(iii) Notwithstanding anything contained herein to the contrary,
no cash dividends on shares of Series D Preferred Stock shall be declared by the
Board of Directors or paid or set apart for payment by the Corporation at such
time as the terms and provisions of any agreement of the Corporation relating to
its indebtedness or Senior Stock or any Parity Stock specifically prohibits such
declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder; provided, however, that nothing herein
contained shall in any way or under any circumstances be construed or deemed to
require the Board of Directors to declare or the Corporation to pay or set apart
for payment any dividends on shares of the Series D Preferred Stock at any time,
whether permitted by any of such agreements or not.
(iv) (a) Holders of shares of the Series D Preferred Stock shall
be entitled to receive the dividends provided for in paragraph 3(i) of this Part
F hereof in preference to and in priority over any dividends upon any of the
Junior Stock.
(b) The Corporation shall not declare, pay or set apart for
payment any dividend on any of the Junior Stock or make any payment on account
of, or set apart for payment money for a sinking or other similar fund for, the
purchase, redemption or other retirement of, any of the Junior Stock or any
warrants, rights, calls or options exercisable for or convertible into any of
the Junior Stock, or make any distribution in respect thereof, either directly
or indirectly, and whether in cash, obligations or shares of the Corporation or
other property (other than distributions or dividends in Junior Stock to the
holders of Junior Stock), and shall not permit any corporation or other entity
directly or indirectly controlled by the Corporation to purchase or redeem any
of the Junior Stock or any warrants, rights, calls or options exercisable for or
convertible into any of the Junior Stock, unless prior to or concurrently with
such declaration, payment, setting apart for payment, purchase, redemption
and/or distribution, as the case may be, all accrued and unpaid dividends on
shares of the Series D Preferred Stock not declared or paid (including accrued
dividends not paid by reason of the terms and conditions of paragraph 3(i) or
paragraph 3(iii) of Part F hereof) shall have been or be paid.
(v) Subject to the rights of the holders of the Senior Stock, if
the Corporation shall declare a dividend on the Series D Preferred Stock and the
amount of the dividend declared or such lesser amount as may be legally
available for the payment thereof, is not sufficient to pay in full the accrued
and unpaid dividends on the Series D Preferred Stock and the accrued and unpaid
dividends on all outstanding shares of Parity Stock entitled to parity dividend
payments, then the holders of all such shares shall share ratably in such
distribution of assets as follows: with respect to all outstanding shares of
Series D Preferred Stock, an amount equal to (A) the amount which is available
for such distribution multiplied by (B) a fraction, (1) the numerator of which
is the aggregate accrued and unpaid dividends on the Series D Preferred Stock,
and (2) the denominator of which is the aggregate amount which would be payable
upon such distribution to the holders of all outstanding shares of Series D
Preferred Stock and other Parity Stock entitled to parity with respect to the
payment of dividends if the holder of each such outstanding share of Series D
Preferred Stock and each such outstanding share of such Parity Stock were paid
in full.
4. LIQUIDATION PREFERENCE. Subject to the rights of the holders
of Senior Stock, in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holders of the
shares of Series D Preferred Stock then outstanding shall be entitled to be paid
out of the assets of the Corporation available for distribution to its
stockholders an amount in cash equal to $500.00 for each share outstanding, plus
an amount in cash equal to all accrued but unpaid dividends thereon to the date
fixed for liquidation, dissolution or winding up before any payment shall be
made or any assets distributed to the holders of any of the Junior Stock. Except
as provided in the preceding sentence, holders of Series D Preferred Stock shall
not be entitled to any distribution in the event of liquidation, dissolution or
winding up of the affairs of the Corporation. Subject to the rights of the
holders of Senior Stock, if the assets of the Corporation are not sufficient to
pay in full the liquidation payments payable to the holders of outstanding
shares of Series D Preferred Stock and Parity Stock on the liquidation
dissolution or winding up, then the holders of all such shares shall share
ratably in such distribution of assets as follows: with respect to all
outstanding shares of Series D Preferred Stock, an amount equal to (A) the
amount which is available for such distribution, multiplied by (B) a fraction
(1) the numerator of which is the aggregate liquidation preference of the Series
D Preferred Stock, and (2) the denominator of which is the aggregate amount
which would be payable upon such distribution to the holders of all outstanding
shares of Series D Preferred Stock and Parity Stock if the holder of each such
outstanding share of Series D Preferred Stock and each such outstanding share of
Parity Stock were paid in full.
5. REDEMPTION.
(i) Subject to the rights of the holders of Senior Stock, to the
extent the Corporation shall have funds legally available therefor, all
outstanding shares of the Series D Preferred Stock shall be redeemable, at the
option of the Corporation, at a redemption price of $500.00 per share, together
with accrued and unpaid dividends thereon to the date fixed for redemption (the
"Redemption Price") at any time and from time to time (x) commencing July 1,
2000 or (y) when there are fewer than 15,000 shares of Series D Preferred Stock
issued and outstanding.
(ii) Shares of Series D Preferred Stock which have been issued
and reacquired in any manner, including shares purchased or redeemed, shall
(upon compliance with any applicable provisions of the laws of the State of
Delaware) have the status of authorized and unissued shares of the class of
Preferred Stock undesignated as to series and may be redesignated and reissued
as part of any series of the Preferred Stock; provided, however, that no such
issued and reacquired shares of Series D Preferred Stock shall be reissued or
sold as Series D Preferred Stock.
(iii) Subject to the prior redemption rights of the holders of
the Senior Stock, if at any time the Corporation voluntarily sells, conveys,
exchanges or transfers (for cash, shares of stock, securities or other
consideration) all or substantially all the property or assets of the
Corporation (other than a sale, conveyance, exchange or transfer to a subsidiary
of the Corporation) or the Corporation consolidates or merges with one or more
corporations (excluding a merger where the Corporation or a direct or indirect
subsidiary or parent of the Corporation is the surviving corporation of such
merger) (collectively, a "Reorganization"), to the extent the Corporation shall
have funds legally available therefor, all outstanding shares of Series D
Preferred Stock shall be redeemable, at the option of the Corporation, at the
Redemption Price.
6. PROCEDURE FOR REDEMPTION.
(i) In the event that fewer than all the outstanding shares of
Series D Preferred Stock are able to be redeemed, the number of shares to be
redeemed shall be determined by the Board of Directors and the shares to be
redeemed shall be selected by lot or pro rata as may be determined by the Board
of Directors, except that in any redemption of fewer than all the outstanding
shares of Series D Preferred Stock, the Corporation may redeem all shares held
by any holders of a number of shares of Series D Preferred Stock not to exceed
100, as may be specified by the Corporation.
(ii) In the event the Corporation shall redeem shares of Series D
Preferred Stock, notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 days nor more than 60 days prior to the
redemption date, to each holder of record of the shares to be redeemed at such
holder's address as the same appears on the stock register of the Corporation.
Each such notice shall state: (a) the redemption date; (b) if fewer than all the
outstanding shares of Series D Preferred Stock are to be redeemed, the number of
shares of Series D Preferred Stock to be redeemed and, if less than all the
shares held by such holder are to be redeemed from such holder, the number of
shares to be redeemed or exchanged from such holder; (c) the Redemption Price;
(d) the place or places where certificates for such shares are to be surrendered
for payment of the Redemption Price; and (e) that dividends on the shares to be
redeemed will cease to accrue on such redemption date.
(iii) Notice having been mailed as aforesaid, from and after the
redemption date (unless, in the case of redemptions, default shall be made by
the Corporation in providing money for the payment of the redemption price of
the shares called for redemption) dividends on the shares of Series D Preferred
Stock so called for redemption shall cease to accrue, and said shares shall no
longer be deemed to be outstanding and shall have the status of authorized but
unissued shares of Preferred Stock, unclassified as to series, and shall not be
reissued as shares of Series D Preferred Stock, and all rights of the holders
thereof as stockholders of the Corporation (except the right to receive from the
Corporation the Redemption Price and any accrued and unpaid dividends) shall
cease. Upon surrender in accordance with said notice of the certificates for any
shares so redeemed (properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation shall so require and the notice shall so state),
such shares shall be redeemed by the Corporation at the Redemption Price
aforesaid. In the event fewer than all of the shares represented by any such
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
7. VOTING RIGHTS.
(i) The holders of record of shares of Series D Preferred Stock
shall not be entitled to any voting rights except as hereinafter provided in
this paragraph 7 of this Part F or as otherwise provided by law.
(ii) So long as any shares of Series D Preferred Stock are
outstanding, the Corporation will not, without the affirmative vote or consent
of the holders of a majority of the issued and outstanding Series D Preferred
Stock voting as a separate class, create any class or series of shares (other
than the Senior Stock outstanding on the date hereof) ranking on a parity with
or prior to the Series D Preferred Stock either as to dividends or redemption or
upon liquidation, or amend, alter or repeal (whether by merger, consolidation or
otherwise) the Corporation's certificate of incorporation or any resolution
providing for the issue of such Series D Preferred Stock to adversely affect the
voting powers, rights or preferences of the Series D Preferred Stock, including,
without limitation, rights to accrued dividends, redemption and liquidation
prices and other rights. Neither the Corporation nor any holder of Series D
Preferred Stock voting in favor of or consenting to such creation, amendment,
alteration or repeal shall have any liability to any other holder with respect
to such action.
(iii) The rights of holders of Series D Preferred Stock may be
exercised at a special meeting of such holders called as provided herein or at
an annual meeting of stockholders held for the purpose of electing directors.
The holders of record of at least 50% of the Series D Preferred Stock then
outstanding may designate in writing one of their number to call a special
meeting of such holders and such meeting may be called by the person so
designated in accordance with the notice required for meetings of stockholders,
with such meeting to be held in such place in the continental United States as
may be specified in such notice. Whenever holders of Series D Preferred Stock
are required or permitted to take any action by vote, such action may be taken
without a meeting on written consent, setting forth the action so taken and
signed by the holders of Series D Preferred Stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted.
8. CONVERSION. (i) The holder of any share or shares of Series D
Preferred Stock shall have the right, at its option, to convert all or any
portion of such shares into fully paid and nonassessable shares of Common Stock
of the Corporation at any time and from time to time after the date of issuance
at the rate of one share of Common Stock for each one share of Series D
Preferred Stock or at the rate which results from the making of any adjustment
specified in subparagraph (v) hereof (the number of shares of Common Stock
issuable at any time, giving effect to the latest prior adjustment pursuant to
subparagraph (v) hereof, if any, in exchange for one share of Series D Preferred
Stock being hereinafter called the "Conversion Rate"). When shares of Series D
Preferred Stock are converted, all dividends accrued and unpaid on the stock so
converted to the date of conversion (whether or not currently payable) shall
automatically be canceled.
(ii) The Series D Preferred Stock shall be convertible at the
principal office of the Corporation into fully paid and nonassessable shares of
Common Stock at the Conversion Rate. In case of the redemption pursuant to
paragraph 5(i) or 5(iii) of this Part F of any shares of Series D Preferred
Stock, such right of conversion shall cease and terminate, as to the shares to
be redeemed, at the close of business on the date fixed for such redemption or
Reorganization, unless default shall be made in the payment of the Redemption
Price for the shares to be so redeemed or such Reorganization shall not occur.
(iii) In order to convert shares of Series D Preferred Stock into
shares of Common Stock pursuant to the right of conversion set forth in
subparagraph (i) above, the holder thereof shall surrender the certificate or
certificates representing Series D Preferred Stock, duly endorsed to the
Corporation or in blank, at the principal office of the Corporation and shall
give written notice to the Corporation that such holder elects to convert the
same, stating in such notice the name or names in which such holder wishes the
certificate or certificates representing shares of Common Stock to be issued.
The Corporation shall, within five business days, deliver at said office or
other place to such holder of Series D Preferred Stock, or to such holders
nominee or nominees, a certificate or certificates for the number of shares of
Common Stock to which such holder shall be entitled as aforesaid, together with
cash to which such holder shall be entitled in lieu of fractional shares in an
amount equal to the same fraction of the Conversion Amount of a whole share of
Common Stock on the business day preceding the day of conversion and for
dividends. Shares of Series D Preferred Stock shall be deemed to have been
converted as of the date of the surrender of such shares for conversion as
provided above, and the person or persons entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder or holders of such shares of Common Stock on such date. Upon
conversion of only a portion of the number of shares covered by a certificate
representing shares of Series D Preferred Stock surrendered for conversion, the
Corporation shall issue and deliver to, or upon the written order of, the holder
of the certificate so surrendered for conversion, at the expense of the
Corporation, a new certificate covering the number of shares of Series D
Preferred Stock representing the unconverted portion of the certificate so
surrendered, which new certificate shall entitle the holder thereof to the
rights of the shares of Series D Preferred Stock represented thereby to the sale
extent as if the certificate theretofore covering such unconverted shares had
not been surrendered for conversion.
(iv) The issuance of certificates for shares of Common Stock upon
the conversion of shares of Series D Preferred Stock shall be made without
charge to the converting stockholder for any original issue or transfer tax in
respect of the issuance of such certificates and any such tax shall be paid by
the Corporation.
(v) The Conversion Rate shall be subject to the following
adjustments:
(a) If the Corporation shall declare and pay to the holders of
Common Stock a dividend or other distribution payable in shares
of Common Stock, the Conversion Rate in effect immediately prior
thereto shall be adjusted so that the holders of Series D
Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock which
such holder would have owned or been entitled to receive after
the declaration and payment of such dividend or other
distribution if such shares of Series D Preferred Stock had been
converted immediately prior to the record date for the
determination of shareholders entitled to receive such dividend
or other distribution.
(b) If the Corporation shall subdivide the outstanding shares of
Common Stock into a greater number of shares of Common Stock, or
combine the outstanding shares of Common Stock into a lesser
number of shares, or issue by reclassification of its shares of
Common Stock any shares of the Corporation, the Conversion Rate
in effect immediately prior thereto shall be adjusted so that the
holders of Series D Preferred Stock thereafter surrendered for
conversion shall be entitled to receive the number of shares of
Common Stock which such holder would have owned or been entitled
to receive after the happening of any of the events described
above if such shares of Series D Preferred Stock had been
converted immediately prior to the happening of such event on the
day upon which such subdivision, combination or reclassification,
as the case may be, becomes effective.
(c) If the Corporation shall issue or sell any Additional Shares
of Common Stock for a consideration per share less than the
greater of Market Price or the applicable Conversion Amount of
the Series D Preferred Stock (in each case as such terms are
defined in subparagraph (vii) hereof), then the Conversion Rate
shall be adjusted to the number determined by multiplying the
Conversion Rate in effect immediately prior to such issuance or
sale by a fraction, as follows: (A) if issued for a consideration
per share less than Market Price the numerator of which shall be
the number of shares of Common Stock outstanding immediately
prior to the issuance or sale of such Additional Shares of Common
Stock plus the number of such Additional Shares of Common Stock
so issued or sold, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to
the issuance or sale of such Additional Shares of Common Stock
plus the number of shares of Common Stock which the aggregate
consideration for such Additional Shares of Common Stock so
issued or sold would purchase at a consideration per share equal
to the Market Price, and (B) if issued for a consideration per
share less than the applicable Conversion Amount, the numerator
of which shall be the number of shares of Common Stock
outstanding immediately prior to the issuance or sale of such
Additional Shares of Common Stock plus the number of such
Additional Shares of Common Stock so issued or sold, and the
denominator of which shall be the number of shares of Common
Stock outstanding immediately prior to the issuance or sale of
such Additional Shares of Common Stock plus the number of shares
of Common Stock which the aggregate consideration for such
Additional Shares of Common Stock so issued or sold would
purchase at a consideration per share equal to such Conversion
Amount. If shares of Common Stock shall be issued at a price per
share less than both the applicable Conversion Amount and Market
Price, the Conversion Rate shall be adjusted in the manner
hereinabove set forth which will result in the greater increase
in the Conversion Rate. For the purposes of this subparagraph
(c), the date as of which such Conversion Amount or Market Price
shall be computed shall be the earlier of (y) the date on which
the Corporation shall enter into a firm contract for the issuance
or sale of such Additional Shares of Common Stock or (z) the date
of the actual issuance or sale of such shares.
(d) If the Corporation shall issue or sell any warrants, options,
or other rights entitling the holders thereof to subscribe for or
purchase either any Additional Shares of Common Stock or
evidences of indebtedness, shares of stock or other securities
which are convertible into or exchangeable, with or without
payment of additional consideration in cash or property, for
Additional Shares of Common Stock (such convertible or
exchangeable evidences of indebtedness, shares of stock or other
securities hereinafter being called "Convertible Securities"), or
shall issue and sell Convertible Securities and the consideration
per share for which Additional Shares of Common Stock may at any
time thereafter be issuable pursuant to such warrants, options or
other rights or pursuant to the terms of such Convertible
Securities (when added to the consideration per share of Common
Stock, if any, received for such warrants, options or other
rights), shall be less than the greater of Market Price or the
applicable Conversion Amount, then the Conversion Rate shall be
adjusted as provided in subparagraph (c) on the basis that (y)
the maximum number of Additional Shares of Common Stock issuable
pursuant to all such warrants, options or other rights or
necessary to effect the conversion or exchange of all such
Convertible Securities shall be deemed to have been issued and
(z) the aggregate consideration (plus the consideration, if any,
received for such warrants, options or other rights) for such
maximum number of Additional Shares of Common Stock shall be
deemed to be the consideration received and receivable by the
Corporation for the issuance of such Additional Shares of Common
Stock pursuant to such warrants, options or other rights or
pursuant to the terms of such Convertible Securities.
(e) For the purposes of subparagraph (d) above, the date as of
which such Conversion Amount and Market Price shall be computed
shall be the earliest of (x) the date on which the corporation
shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive any warrants, options or
other rights referred to in subsection (d) or to receive any
Convertible Securities, (y) the date on which the Corporation
shall enter into a firm contract for the issuance of such
warrants, options or other rights or Convertible Securities or
(z) the date of the actual issuance of such warrants, options or
other rights or Convertible Securities.
(f) No adjustment of the Conversion Rate shall be made under
subparagraph (c) upon the issuance of any Additional Shares of
Common Stock which are issued pursuant to the exercise of any
warrants, options or other rights or pursuant to the exercise of
any conversion or exchange rights in any Convertible Securities,
if such adjustment shall previously have been made upon the
issuance of such warrants, options or other rights or upon the
issuance of such Convertible Securities (or upon the issuance of
any warrants, options or other rights therefor), pursuant to
subparagraph (d).
(g) If any warrants, options or other rights (or any portions
thereof) or conversion rights pursuant to Convertible Securities
which shall have given rise to an adjustment pursuant to
subparagraph (d) shall have expired or terminated without the
exercise thereof and/or if by reason of the terms of such
warrants, options or other rights or Convertible Securities there
shall have been an increase or increases, with the passage of
time or otherwise, in the price payable upon the exercise or
conversion thereof, then the Conversion Rate hereunder shall be
readjusted (but to no greater extent than originally adjusted) on
the basis of (x) eliminating from the computation any Additional
Shares of Common Stock corresponding to such warrants, options or
other rights or conversion rights as shall have expired or
terminated, (y) treating the Additional Shares of Common Stock,
if any, actually issued or issuable pursuant to the previous
exercise of such warrants, options or other rights or of
conversion rights pursuant to any Convertible Securities as
having been issued for the consideration actually received and
receivable therefor, and (z) treating any of such warrants,
options or other rights or of conversion rights pursuant to any
Convertible Securities which remain outstanding as being subject
to exercise or conversion on the basis of such exercise or
conversion price as shall be in effect at the time; provided,
however, that any consideration which was actually received by
the Corporation in connection with the issuance or sale of such
warrants, options or other rights shall form part of the
readjustment computation even though such warrant, options or
other rights shall have expired without the exercise thereof. The
Conversion Rate shall be adjusted as provided in subparagraph (c)
as a result of any increase in the number of Additional Shares of
Common Stock issuable, or any decrease in the consideration
payable upon any issuance of Additional Shares of Common Stock,
pursuant to any antidilution provisions contained in any
warrants, options or other rights or in any Convertible
Securities.
(h) (A) In case any Additional Shares of Common Stock,
Convertible Securities or warrants, options or other rights
to purchase any such Additional Shares of Common Stock or
Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the
amount received by the Corporation therefor except otherwise
provided in this subparagraph (h).
(B) In case any Additional Shares of Common Stock,
Convertible Securities or warrants, options or other rights
to purchase any such Additional Shares of Common Stock or
Convertible Securities shall be offered by the Corporation
for subscription, the consideration received therefor shall
be deemed to be the subscription price.
(C) In case any Additional Shares of Common Stock,
Convertible Securities or warrants, options or other rights
to purchase any such Additional Shares of Common Stock or
Convertible Securities are sold to underwriters or dealers
for public offering without a subscription offering, the
consideration received therefor shall be deemed to be the
initial public offering price.
(D) In any such case covered by subparagraphs (A), (B), or
(C) herein, in determining the amount of consideration
received by the Corporation, if the consideration is in
whole or in part consideration other than cash, the amount
of the consideration shall be deemed to be the fair value of
such consideration as determined by the Board of Directors
of the Corporation. If Additional Shares of Common Stock
shall be issued as part of a unit with warrants, options, or
other rights, then the amount of consideration for the
warrants, option or other right shall be deemed to be the
amount determined at the time of issuance by the Board of
Directors of the Corporation. If the Board of Directors of
the Corporation shall not make any such determination, the
consideration for the warrant, option or other right shall
be deemed to be zero.
(E) In any such case covered by subparagraphs (A), (B), (C),
or (D) herein, in determining the amount of consideration
received by the Corporation (I) any amounts paid or
receivable for accrued interest or accrued dividends shall
be excluded, and (II) any compensation, discounts, expenses
paid or incurred or underwriting commissions or concessions
paid in connection therewith shall not be deducted.
(F) In any case covered by subparagraphs (A), (B) or (C)
herein, there shall be added to the consideration received
by the Corporation at the time of issuance or sale, the
minimum aggregate amount of additional consideration payable
to the Corporation upon the exercise of such warrants,
options or other rights which relate to Convertible
Securities and the minimum aggregate amount of
consideration, if any, payable upon the conversion or
exchange thereof.
(G) In case any Additional Shares of Common Stock,
Convertible Securities or any options, warrants or other
rights to purchase such Additional Shares of Common Stock or
Convertible Securities shall be issued in connection with
any merger or consolidation in which the Corporation is the
surviving corporation, the amount of consideration therefor
shall be deemed to be the fair value, as determined by the
Board of Directors of the Corporation, of such portion of
the assets and business of the non-surviving corporation or
corporations as such Board shall determine to be
attributable to such Additional Shares of Common Stock,
Convertible Securities or warrants, options or other rights
to purchase such Additional Shares of Common Stock or
Convertible Securities.
(i) In case the Corporation shall effect a Reorganization and,
pursuant to the terms of such Reorganization, shares of stock or
other securities, property or assets of the Corporation,
successor or transferee or an affiliate thereof or cash are to be
received by or distributed to the holders of Common Stock, then
each holder of Series D Preferred Stock shall be given a written
notice from the Corporation informing each holder of the terms of
such Reorganization and of the record date thereof for any
distribution pursuant thereto, at least ten days in advance of
such record date, and each holder of Series D Preferred Stock
shall have the right after such notice but prior to such
Reorganization to convert the Series D Preferred Stock and to
receive, upon conversion of such Series D Preferred Stock, the
number of shares of stock or other securities, property or assets
of the Corporation, successor or transferee or affiliate thereof
or cash receivable upon or as a result of such Reorganization, by
a holder of the number of shares of Common Stock equal to the
Conversion Rate immediately prior to such Reorganization,
multiplied by the number of shares of Series D Preferred Stock as
may be converted. After the Reorganization, the rights of the
holders of Series D Preferred Stock to convert such stock shall
terminate and be of no further force or effect.
(j) The number of shares of Common Stock outstanding at any given
time shall not include shares owned or held by or for the account
of the Corporation, and the disposition of such shares shall be
considered an issue or sale of Common Stock, for the purposes of
this paragraph 8(v) of this Part F.
(k) If a state of facts shall occur which, without being
specifically controlled by the provisions of this paragraph 8(v)
of this Part F, would not fairly protect the conversion rights of
the Series D Preferred Stock in accordance with the essential
intent and principles of such provisions, then the Board of
Directors of the Corporation shall make an adjustment in the
application of such provisions, in accordance with such essential
intent and principles, so as to protect such conversion rights.
(l) Anything herein to the contrary notwithstanding, no
adjustment in the Conversion Rate shall be required unless such
adjustment, either by itself or with other adjustments not
previously made, would require a change of at least 1% in such
rate; provided, however, that any adjustment which by reason of
this subparagraph (1) is not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
(m) All calculations under this paragraph 8(v) of this Part F
shall be made to the nearest one-tenth of a share.
(n) Whenever the Conversion Rate shall be adjusted pursuant to
this paragraph 8(v) of this Part F, the Corporation shall
forthwith obtain, and cause to be delivered to each holder of
Series D Preferred Stock, a certificate signed by the principal
financial or accounting officer of the Corporation, setting forth
in reasonable detail the event requiring the adjustment and the
method by which such adjustment was calculated (including a
description of the basis on which the Board of Directors of the
Corporation determined the fair value of any consideration other
than cash pursuant to subparagraph (h)) and specifying the new
Conversion Rate. In the case referred to in subparagraph (i),
such certificate shall be issued describing the amount and kind
of stock, securities, property or assets or cash which shall be
receivable upon conversion of the Series D Preferred Stock after
giving effect to the provisions of such subparagraph (i).
(vi) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of Series D Preferred Stock, the full
number of shares of Common Stock then deliverable upon the conversion or
exchange of all shares of Series D Preferred Stock at the time outstanding. The
Corporation shall take at all times such corporate action as shall be necessary
in order that the Corporation may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the conversion of Series 3 Preferred
Stock in accordance with the provisions hereof.
(vii) No fractional shares of Common Stock or scrip representing
fractional shares of Common Stock shall be issued upon any conversion of Series
D Preferred Stock, but, in lieu thereof, there shall be paid an amount in cash
equal to the same fraction of the Conversion Amount of a whole share of Common
Stock on the business day preceding the day of conversion.
(viii) The following terms used in this paragraph 8 of this Part
F shall have the meanings set forth below.
(A) "Additional Shares of Common Stock" shall mean all shares of
Common Stock of the Corporation issued by the Corporation after
the date hereof, or any security which is convertible into or
exchangeable for Common Stock, or any right, option or warrant to
acquire Common Stock except for (v) shares of Series C
Convertible Preferred Stock or the shares of Common Stock into
which it may be converted; (w) Common Stock Purchase Warrants to
purchase up to 15,000 shares of Common Stock (subject to
adjustment) originally issued April 7, 1989 as the same may be in
effect from time to time and shares of Common Stock for which
such warrants may be exercised; (x) shares of Common Stock issued
upon conversion of the Series D Preferred Stock, (y) right,
options, warrants or stock grants to employees, directors and
consultants of the Corporation outstanding on the date of
original issuance of the Series D Preferred Stock and shares of
Common Stock issuable upon exercise of such rights, options or
warrants to employees, directors and consultants of the
Corporation, (z) options or stock grants to employees pursuant to
employee benefit plans.
(B) "Conversion Amount" shall mean at any applicable date the
amount equal to the quotient resulting from dividing $500.00 by
the Conversion Rate in effect on such date for the Series D
Preferred Stock.
(C) "Market Price" of a share of Common Stock on any day shall
mean the average closing price of a share of Common Stock for the
15 consecutive trading days preceding such day on the principal
national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if not listed or admitted
to trading on any national securities exchange, the average of
the reported closing bid and asked prices during such 15 trading
day period in the over-the-counter market as furnished by the
National Quotation Bureau, Inc., or, if such firm is not then
engaged in the business of reporting such prices, as furnished by
any similar firm then engaged in such business selected by the
Corporation, or, if there is no such firm, as furnished by any
number of the National Association of Securities Dealers, Inc.
selected by the Corporation or, if the shares of Common Stock are
not publicly traded, the Market Price for such day shall be the
Conversion Amount.
FIFTH: The business and affairs of the Corporation shall be
managed by the Board of Directors, and election of directors need not be by
written ballot unless and to the extent the By-Laws of the Corporation so
provide.
SIXTH: In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to make,
alter or repeal from time to time the By-Laws of the Corporation in any manner
not inconsistent with the laws of the State of Delaware or the Certificate of
Incorporation of the Corporation.
SEVENTH: No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit.
EIGHTH: The Corporation reserves the right at any time and from
time to time to amend, alter or repeal any provision contained in this
Certificate of Incorporation in the manner now or as hereafter prescribed by
law, and all rights, preferences, and privileges conferred upon stockholders,
directors, and officers by or pursuant to this Certificate of Incorporation in
its present form or as hereafter amended are subject to the rights reserved in
this Article.
NINTH: That thereafter, the stockholders of the Corporation
entitled to vote in respect thereof unanimously consented to the adoption of the
Amendment and Restatement of the Certificate of Incorporation herein certified
in accordance with the provisions of Section 228(a) of the General Corporation
Law of the State of Delaware.
TENTH: So long as any of the $53,100,000 principal amount of the
Corporation's Senior Subordinated Notes (hereinafter referred to as the "Notes"
and the term "Note" shall refer to any one of the Notes) issued pursuant to the
Indenture dated as of April 1, 1989 (the "Indenture") among the Corporation,
Channel 20, Inc., Channel 39, Inc., Channel 40, Inc., Channel 53, Inc. and
United States Trust Company of New York, as Trustee, remain outstanding, the
Holders (as defined in the Indenture) of the Notes shall have the following
voting rights:
(a) Except as otherwise provided herein and in the Indenture and
except as provided by statute, the Holders of the Notes shall have no voting
rights and shall not be deemed to be stockholders or have any rights as
stockholders of the Corporation.
(b) In case at any time an Event of Default (as defined in the
Indenture) shall have occurred and shall have continued uncured for thirty (30)
days, then during the period (the "Voting Period") commencing with such time and
ending when such Event of Default shall have been cured and no other Events of
Default are existing, the number of directors of the Corporation shall
automatically be increased by one (1) and the holders of a majority of the
aggregate outstanding principal amount of the Notes shall be entitled, as a
class, to the exclusion of the holders of all other classes of stock of the
Corporation, to elect one additional director to the Board of Directors of the
Corporation. The rights of the Holders of the Notes contained in this paragraph
(b) may be exercised by written consent in lieu of a meeting by the Holders of
Notes representing a majority of the aggregate outstanding principal amount of
the Notes or by a vote at any meeting of the Holders of the Notes or
stockholders of the Corporation. All actions of the Holders shall be taken and
all meetings of the Holders shall be called, in the manner provided for in the
Indenture. At the end of the Voting Period, the term of such additional director
shall automatically terminate and the Holders of the Notes shall be
automatically divested of all voting power vested in them under this paragraph
(b) but subject always to subsequent vesting hereunder of voting power in the
Holders of the Notes in the event of the occurrence of any subsequent Event of
Default.
(c) Upon the election of such additional director by the Holders
of the Notes, the director elected by the Holders shall serve until his
successor is elected and qualified and such director together with all current
directors shall constitute the directors of the Corporation.
(d) The Holders of outstanding Notes shall be entitled to vote as
a class upon a proposed amendment to this Certificate of Incorporation if such
amendment would alter or change the powers or special rights of the Notes
granted pursuant to this Article Tenth so as to affect such Holders adversely.
IN WITNESS WHEREOF, the Corporation has caused this Restated
Certificate of Incorporation to be signed by Michael Finkelstein, its President,
and attested by Michael Finkelstein, its Secretary, this 9th day of March, 1993.
RENAISSANCE COMMUNICATIONS CORP.
By:/S/ MICHAEL FINKELSTEIN
Michael Finkelstein
President
ATTEST:
/S/ MICHAEL FINKELSTEIN
Michael Finkelstein
Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
RENAISSANCE COMMUNICATIONS CORP.
---------------------------------
Under Section 242 of the
Delaware General Corporation Law
---------------------------------
RENAISSANCE COMMUNICATIONS CORP., a Delaware corporation, hereby
certifies as follows:
1. The Board of Directors of said corporation duly adopted a
resolution setting forth and declaring it advisable that the Restated
Certificate of Incorporation of the Corporation be hereby amended by deleting
the first paragraph of Article FOURTH in its entirety and by inserting the
following new first paragraph to Article FOURTH in lieu thereof:
FOURTH: The total number of shares of all classes of capital
stock that the Corporation shall have authority to issue is Forty
Million (40,000,000) shares, of which (a) Two Million Five Hundred
Thousand (2,500,000) shares shall be Preferred Stock with a par value
of $1.00 per share (hereinafter referred to as "Preferred Stock") and
(b) Thirty-Seven Million Five Hundred Thousand (37,500,000) shares
shall be Common Stock with a par value of $.01 per share (hereinafter
referred to as the "Common Stock").
and declaring that simultaneously with the effectiveness of said amendment of
Article FOURTH each of the issued and outstanding shares of Common Stock with a
par value of $1.00 per share shall be changed and reclassified into seventy-five
(75) shares of Common Stock with a par value of $.01 per share.
2. In lieu of a vote of stockholders, written consent to the foregoing
amendment has been given by the holders of a majority of the outstanding stock
entitled to vote thereon in accordance with the provisions of Section 228 of the
General Corporation Law of the State of Delaware; written notice has been given
to those stockholders who have not consented in writing as provided in said
Section 228; and such amendment has been duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
Signed and attested to this 19th day of January, 1994.
/s/ Michael Finkelstein
-------------------------------
Name: Michael Finkelstein
Title: Chairman of the Board
Attest:
/s/ Michael Finkelstein
- -------------------------------
Name: Michael Finkelstein
Title: Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
RENAISSANCE COMMUNICATIONS CORP.
---------------------------------
Under Section 242 of the
Delaware General Corporation Law
---------------------------------
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation")
is Renaissance Communications Corp.
2. The Restated Certificate of Incorporation of the Corporation is
hereby amended to (a) amend the first paragraph of Article FOURTH to increase
the number of shares of Common Stock which the Corporation is authorized to
issue and (b) delete parts C, D, E and F of Article FOURTH. Article FOURTH, as
so amended, is hereby amended to read in its entirety as follows:
FOURTH: The total number of shares of all classes of capital
stock that the Corporation shall have authority to issue is One Hundred
Million (100,000,000) shares, of which (a) Two Million Five Hundred
Thousand (2,500,000) shares shall be Preferred Stock with a par value
of $1.00 per share (hereinafter referred to as "Preferred Stock") and
(b) Ninety-Seven Million Five Hundred Thousand (97,500,000) shares
shall be Common Stock with a par value of $.01 per share (hereinafter
referred to as the "Common Stock").
The following is a statement of the designations, powers, preferences
and rights of the classes of capital stock of the Corporation and the
qualifications, limitations or restrictions thereof.
A.
Preferred Stock may be issued in one or more series. The number
of shares of any series of Preferred Stock and the designations, powers,
preferences and relative participating, optional and other special rights
of Preferred Stock of each series, and the qualifications, limitations and
restrictions thereof, shall be such as are stated and expressed herein and,
to the extent not stated and expressed herein, shall be such as may be
fixed by the Board of Directors (authority so to do being hereby expressly
granted) and stated and expressed in a resolution or resolutions adopted by
the Board of Directors providing for the issue of Preferred Stock of such
series. Such resolution or resolutions shall (a) specify the number of
shares constituting that series and the distinctive designation of that
series, (b) state the dividend rate, if any, therefor, which dividend rate
may vary under different conditions and at different dates, and, if a
dividend rate shall be fixed for shares of Preferred Stock of such series,
the terms and conditions of declaration and payment of dividends on such
shares (which terms and conditions may vary under different conditions and
at different dates), including, without limitation, whether dividends shall
be cumulative, and, if so, from which date or dates, and the relative
rights of priority, if any, of payment of dividends on shares of that
series, (c) fix the rights of shares of Preferred Stock of such series in
the event of a voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, (d) state whether or not shares of Preferred Stock
of such series shall be redeemable and, if so, the terms and conditions of
such redemption, including, without limitation, the date or dates upon or
after which such shares shall be redeemable, and the amount per share
payable in case of redemption, which amounts may vary under different
conditions and at different redemption dates, (e) fix the voting powers of
the holders of Preferred Stock of such series, whether full or limited, or
without voting powers; and may, in a manner not inconsistent with the
provisions of this Article FOURTH, (i) limit the number of shares of such
series which may be issued, (ii) provide for a sinking fund for the
purchase or redemption or a purchase fund for the purchase of shares of
such series and the terms and provisions governing the operation of any
such fund and the status as to reissuance of shares of Preferred Stock
purchased or otherwise reacquired or redeemed or retired through the
operation thereof, and that so long as the Corporation is in default as to
such sinking or purchase fund the Corporation shall not (with such
exceptions, if any, as may be provided) pay any dividends upon or purchase,
redeem or otherwise acquire shares of capital stock ranking junior to
Preferred Stock as to dividends or distribution of assets upon liquidation
(such capital stock is hereinafter referred to in this Part A of Article
FOURTH as "junior stock"), (iii) impose conditions or restrictions upon the
creation of indebtedness of the Corporation or upon the issue of additional
Preferred Stock or other capital stock ranking equally therewith or prior
thereto as to dividends or distribution of assets on liquidation, (iv)
impose conditions or restrictions upon the payment of dividends upon, or
the making of other distributions to the holders of, or the purchase,
redemption, or reacquisition of, junior stock, (v) grant to the holders of
Preferred Stock of such series the right to convert such stock into shares
of junior stock, and (vi) fix such other designations, powers, preferences,
rights, qualifications, limitations and restrictions of shares of Preferred
Stock of such series as the Board of Directors may determine and which are
not inconsistent with the provisions of this Article FOURTH. The term
"fixing for such series" and similar terms shall mean stated and expressed
in a resolution or resolutions adopted by the Board of Directors providing
for the issue of Preferred Stock of the series referred to therein.
B.
Subject to the prior rights of Preferred Stock, set forth in Part
A of this Article FOURTH and to the conditions set forth therein or in any
resolution of the Board of Directors providing for issuance of any
particular series of Preferred Stock, such dividends (payable in cash,
stock or otherwise) as may be determined by the Board of Directors may be
declared and paid on Common Stock from time to time out of any funds
legally available therefor.
Subject to the provisions of Part A of this Article FOURTH, the
holders of Common Stock shall be entitled to one vote for each share held
at all meetings of stockholders of the Corporation; provided, however, that
the holders of all or any series of Preferred Stock shall have certain
voting rights as provided in any resolution of the Board of Directors
providing for issuance of any particular series of Preferred Stock, which
are not otherwise provided to the holders of the Common Stock.
3. This Certificate of Amendment was duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law of the State
of Delaware. Signed and attested to this 2nd day of May, 1996.
/s/ Michael Finkelstein
-------------------------------
Name: Michael Finkelstein
Title: Chairman of the Board
Attest:
/s/ John C. Ferrara
- -------------------------------
Name: John C. Ferrara
Title: Assistant Secretary
<TABLE> <S> <C>
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 10,707
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0
0
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<TOTAL-LIABILITY-AND-EQUITY> 347,821
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