<PAGE 1>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 10, 2000
American Gaming & Entertainment, Ltd.
____________________________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Delaware
____________________________________________________________________________
(State or Other Jurisdiction of
Incorporation or Organization)
0-19049 74-2504501
____________________________________________________________________________
(Commission (IRS Employer
File Number) Identification No.)
51 Beech Road, Glen Rock, New Jersey 07452
____________________________________________________________________________
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (201) 447-5360
Not Applicable
____________________________________________________________________________
(Former Name, Address and Former Fiscal Year, if Changed Since Last Report)
1 of 29
<PAGE 2>
American Gaming & Entertainment, Ltd.
SEC Form 8-K
Item 2. Acquisition or Disposition of Assets
On May 10, 2000, the transfer to Shamrock Holdings Group, Inc. (together
with certain affiliated entities, "Shamrock"), the Company's majority
stockholder and primary creditor, of substantially all of the Company's
assets, became effective. Such assets include, without limitation, (a)
substantially all of the Company's right, title and interest under the First
Amended Joint Plan of Liquidation for AMGAM Associates and American Gaming
and Resorts of Mississippi, Inc. and (b) all payments, distributions,
dividends and proceeds of any type to which the Company is entitled pursuant
to or in connection with an Irrevocable Proxy and Consent Agreement relating
to the Company's interest in a riverboat gaming and entertainment complex in
Rising Sun, Indiana (collectively, the "Transferred Assets"). In exchange
for the Transferred Assets, Shamrock shall release the Company from all
debts and liabilities and shall cause the dismissal with prejudice of the
adversary proceeding captioned Richard C. Breeden, Trustee of the Bennett
Funding Group, Inc. et al v. Gamma International, American Gaming &
Entertainment, Ltd. and John Does 1 to 100 (AP 98-70465 A) (United States
Bankruptcy Court for the Northern District of New York). For further
information, reference is made to the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1999.
Item 5. Other Events
On May 10, 2000, a Restated Certificate of Incorporation for the Company
became effective. The number of authorized shares of Common Stock of the
Company was increased to 3,000,000,000 and the Certificates of Designation
of the Company's Series C Cumulative Preferred Stock and Series D Cumulative
Preferred Stock were amended to provide that dividends shall only be
payable, on an as-if-converted basis, if dividends are paid on the Company's
Common Stock. For further information, reference is made to the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1999.
<PAGE 3>
Item 7. Financial Statements and Exhibits
(a) Exhibits
Exhibit Number Description
______________ ___________
3.1 Restated Certificate of Incorporation
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 hereunto duly authorized.
American Gaming & Entertainment, Ltd.
(Registrant)
DATE: May 15, 2000
By: J. DOUGLAS WELLINGTON
_____________________________
J. DOUGLAS WELLINGTON
President and Chief Executive Officer and
Principal Accounting Officer
<PAGE 4>
EXHIBIT INDEX
Exhibit Number Description Page
______________ ___________ ____
3.1 Restated Certificate of Incorporation 5
<PAGE >
EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION OF
AMERICAN GAMING & ENTERTAINMENT, LTD.
A DELAWARE CORPORATION
FIRST. The name of the Corporation is American Gaming & Entertainment,
Ltd.
SECOND. The address of the Corporation's registered office in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of its registered agent at such address is The Corporation
Trust Company.
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. (1) The total number of shares of capital stock which this
corporation shall have the authority to issue is Three Billion One Million
(3,001,000,000) consisting of (a) Three Billion (3,000,000,000) shares of
common stock, each having a par value of one cent ($0.01), amounting in the
aggregate to Thirty Million Dollars ($30,000,000) ("Common Stock"), and (b)
One Million (1,000,000) shares of preferred stock, each having a par value
of one cent ($0.01), amounting in the aggregate to Ten Thousand Dollars
($10,000) ("Preferred Stock").
(2) Except as otherwise expressly provided by statute or by
this Certificate, and subject to the express terms and rights, if any, of
any Preferred Stock authorized by the Board of Directors pursuant to the
authority granted in this Article FOURTH, all voting rights shall be vested
in the holders of the Common Stock, who shall be entitled to one vote per
share on all matters submitted to a vote of holders of the Common Stock and
shall be entitled to receive: (a) such dividends on the Common Stock as may
be declared and paid by the Corporation out of assets legally available
therefor; and (b) in the event of the liquidation, dissolution or winding up
of the Corporation, the assets of the Corporation available for distribution
to stockholders.
(3) The Board of Directors is authorized, subject to
limitations prescribed by statute and the provisions of this Article FOURTH,
to provide for the issuance of Preferred Stock, from time to time, in one or
more series of any number of shares, with a distinctive serial designation
for each series, provided that the aggregate number of shares issued and not
cancelled of any and all such series shall not exceed the total number of
shares of Preferred Stock authorized by this Article FOURTH, as shall
hereafter be stated and expressed in the resolution or resolutions providing
for the issuance of such Preferred Stock from time to time adopted by the
Board of Directors. Subject to said limitations, each series of Preferred
Stock: (a) may have such voting powers, full or limited, or may be without
voting powers; (b) may be subject to redemption at such time or times and at
such prices; (c) may be entitled to receive dividends (which may be
cumulative or noncumulative) at such rate or rates, on such conditions and
at such times, and payable in preference to, or in such relation to, the
dividends payable on any other class or classes or series of stock (d) may
have such rights upon the dissolution of; or upon any distribution of the
assets of; the Corporation; (e) may be made convertible into, or
exchangeable for, shares of any other class or classes of or any other
series of the same or any other class or classes of stock of the Corporation
or any other issuer, at such price or prices or at such rates of exchange,
and with such adjustments; (f) may be entitled to the benefit of a sinking
fund to be applied to the purchase or redemption of shares of such series in
such amount or amounts; (g) may be entitled to the benefit of conditions and
restrictions upon the creation of indebtedness of the Corporation or any
subsidiary, upon the issue of any additional stock (including additional
shares of such series or of any other series) and upon the payment of
dividends or the making of other distributions on, and the purchase,
redemption or other acquisition by the Corporation or any subsidiary, of any
outstanding stock of the Corporation; and (h) may have such other relative,
participating, optional or other special rights, qualifications, limitations
or restrictions thereon; all as shall be stated in said resolution or
resolutions providing for the issue of such series of Preferred Stock.
<PAGE>
(4) Shares of any series of Preferred Stock which have been
redeemed (whether through the operation of a sinking fund or otherwise) or
which, if convertible or exchangeable, have been converted into or exchanged
for shares of stock of any other class or classes, shall have the status of
authorized and unissued shares of Preferred Stock of the same series and
maybe reissued as a part of the series of which they were originally a part
or may be reclassified and reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of Directors
or as part of any other series of Preferred Stock, all subject to the
conditions or restrictions on issuance set forth in the resolution or
resolutions adopted by the Board of Directors providing for the issue of any
such series of Preferred Stock.
FIFTH. The Corporation shall have perpetual existence.
SIXTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to adopt, amend or
repeal the By-Laws of the Corporation in any manner not inconsistent with
the provisions of such By-Laws.
SEVENTH. Elections of directors need not be by written ballot unless the
By-Laws of the Corporation shall so provide.
Meetings of stockholders may be held within or without the State of Delaware
as the By-Laws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by
the Board of Directors or in the By-Laws of the Corporation;
EIGHTH. A director of the Corporation shall have no personal liability
to the Corporation or to its stockholders for monetary damages for breach of
fiduciary duty as a director except to the extent that Section 102(b)(7) (or
any successor or additional provision) of the General Corporation Law of the
State of Delaware, as amended from time to time, expressly provides that the
liability of a director may not be eliminated or limited.
NINTH. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate in the manner now or
hereafter prescribed by statute, and all rights conferred on stockholders
herein are granted subject to this reservation.
TENTH. (1) In order to enable the Corporation and any Subsidiary
(as hereinafter defined) to secure and maintain in good standing all
licenses and other regulatory approvals necessary for the lawful operation
of gaming and related businesses now or hereafter engaged in by the
Corporation or any Subsidiary within or without the United States (the
"Gaming Licenses") from the Gaming Authorities (as hereinafter defined)
empowered to issue or grant Gaming Licenses and in order to ensure that the
business of the Corporation and its Subsidiaries will be carried on in
compliance with the laws, rules, regulations and policies of the Gaming
Authorities and in a manner consistent with the responsibilities of the
Corporation and its Subsidiaries to the public as an organization engaged in
gaming and related businesses, the following provisions are made:
(2) While any Gaming License is outstanding, except as
otherwise approved by the Board of Directors, no stockholder who (a)
Beneficially Owns (as hereinafter defined) five percent (5%) or more of the
outstanding Capital Stock (as hereinafter defined) and who has neither been
qualified by nor obtained a waiver of qualification from each of the Gaming
Authorities requiring qualification with respect to each Gaming License (an
"Unqualified Stockholder") or (b) has been found to be disqualified or
unsuitable with respect to any Gaming License, which finding has not been
reversed, vacated or superseded in any subsequent proceeding prior to the
Redemption Date (as hereinafter defined) (a "Disqualified Stockholder"),
shall be entitled to vote, directly or indirectly, any shares of Capital
Stock Beneficially Owned by such stockholder on any matter, and no shares of
Capital Stock Beneficially Owned by an Unqualified Stockholder or a
Disqualified Stockholder shall be considered as outstanding stock entitled
to vote for any purpose.
<PAGE >
(3) The Corporation shall have the right, at its option, to
call for redemption all or any part of the Capital Stock Beneficially Owned
by a Disqualified Stockholder for the Redemption Price (as hereinafter
defined) at any time after the date the stockholder became a Disqualified
Stockholder. The Redemption Price may be paid in cash, property or rights,
including any Securities (as hereinafter defined) of the Corporation, as the
Board of Directors may by resolution determine (the "Redemption
Consideration").
(4) All Publicly-traded Securities (as hereinafter defined)
of the Corporation and any Subsidiary shall be held subject to the condition
that if a holder thereof (a "Disqualified Holder") is found to be
disqualified or unsuitable with respect to any Gaming License, which finding
has not been reversed, vacated or superseded in any subsequent proceeding
prior to the date of a Written Notice (as hereinafter defined), such
Disqualified Holder shall dispose of his interest in the Corporation within
10 days after the Corporation mails by first class mail to the name and
address of the persons known to the Corporation to hold of record such
Publicly-traded Securities, as the same shall appear in the books of the
Corporation as of the date the notice is mailed, written notice to such
effect (a "Written Notice"). Notwithstanding any other provision of this
Article TENTH, if any Disqualified Holder fails to dispose of his Publicly-
traded Securities within 10 days after the mailing of the Written Notice,
such Disqualified Holder shall indemnify the Corporation and its
Subsidiaries for any and all direct or indirect costs, including attorney's
fees, incurred by the Corporation and its Subsidiaries as a result of such
Disqualified Holder's continuing ownership or failure to divest of such
Publicly-traded Securities.
(5) Any right arising pursuant to the provisions of Section
3 of this Article TENTH shall be exercised as follows:
(a) If the Corporation shall determine to redeem
Capital Stock pursuant to Section 3 of this Article TENTH, at least 10 days
in advance of the date designated for such redemption, the Corporation shall
mail by first class mail to the name and address of the person or persons
known to the Corporation to hold of record such shares of Capital Stock, as
the same shall appear on the books of the Corporation as of the date such
notice is mailed, a written notice advising of the exercise of the right and
stating the total number of shares to be redeemed from the holder (the
"Redemption Notice"). After the Redemption Price and the Redemption
Consideration for the shares to be redeemed have been determined, the
Corporation shall mail as aforesaid a second notice (the "Price Notice") to
such holder or holders setting forth the Redemption Price and the Redemption
Consideration and the date and time of the redemption (the "Redemption
Date"). The Price Notice shall be mailed not less than 10 days in advance of
the Redemption Date. If the Redemption Price and Redemption Consideration
for the shares have been determined prior to the time the Redemption Notice
is mailed, the Corporation, at its option, may include in the Redemption
Notice the information required to be provided in the Price Notice and in
that case no Price Notice need be sent. The redemption shall be made at the
principal place of business of the Corporation or such other place as may be
specified by the Board of Directors.
(b) The record holder or holders of shares to be
redeemed shall deliver or cause to be delivered the certificate or
certificates representing those shares, properly endorsed for transfer, to
the Corporation on the Redemption Date and shall receive therefor the
Redemption Consideration. If, on the Redemption Date, a holder shall fail to
deliver the certificate or certificates for all or part of the shares to be
redeemed from him properly endorsed for transfer, the Redemption
Consideration to be delivered by the Corporation with respect to such shares
shall be set aside by the Corporation, separate and apart for the benefit of
such holder, to be delivered to such holder without payment of any interest
thereon upon surrender of the certificate or certificates for the shares to
be delivered by such holder properly endorsed for transfer.
(6) After the Redemption Notice and Price Notice have been
given and the Redemption Consideration is set aside in accordance with
Section 5 of this Article TENTH, and notwithstanding that any certificate
for shares of Capital Stock called for redemption has not been surrendered
to the Corporation, the shares heretofore evidenced thereby shall no longer
be deemed outstanding, the right to receive dividends thereon shall cease to
accrue from and after the Redemption
<PAGE >
Date and all rights of the person holding certificates theretofore
evidencing such shares of Capital Stock shall cease and terminate, excepting
only the right to receive the Redemption Consideration, without interest, in
payment therefor, and the person holding such certificates shall thereafter
be restricted exclusively to the Redemption Consideration for any and all
claims of whatever nature in respect of the redeemed shares.
(7) The following definitions shall apply with respect to
this Article TENTH.
(a) The term "Gaming Authorities" means all federal,
state or local government authorities which issue or grant any license or
approval necessary or appropriate for the lawful operation of gaming and
related businesses now or hereafter engaged in by the Corporation or its
Subsidiaries.
(b) The term "Publicly-traded Securities" means any
Security which is listed or admitted to trading on any national securities
exchange or is quoted on the National Association of Securities Dealers,
Inc. Automated Quotation System.
(c) The "Redemption Price" for a share of Capital
Stock means the average closing sale price during the 20-day period
immediately preceding the date of the Redemption Notice of a share of such
Capital Stock on the Nasdaq Small-Cap Market or if such stock is not listed
on such exchange, on the principal United States securities exchange
registered under the Exchange Act on which such stock is listed, or if such
stock is not listed on any such exchange, the average last quoted price or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market with respect to a share of such Capital Stock during
the 20-day period immediately preceding the date of the Redemption Notice as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System or any similar system then in use, or if no such quotations
are available, the fair market value on the date of the call for redemption
of a share of such stock as determined by the Board of Directors.
(d) The term "Securities" means any instrument;
evidencing a direct or indirect beneficial ownership or creditor interest in
a corporation, including, by not limited to; stock, common and preferred;
bonds; mortgages; debentures; security agreements; notes; warrants; options
and rights.
(e) The terms "Affiliate" and "Associate" shall have
the respective meanings ascribed to such terms in Rule 12b-2 promulgated
under the Securities Exchange Act of 1934 (the '1Exchange Act") as in effect
on the effective date of this Certificate pursuant to the General
Corporation Law of the State of Delaware (the term "registrant" in said Rule
12b-2 meaning in this case the Corporation).
(f) A person shall be deemed the "Beneficial Owner"
of; and shall be deemed to "Beneficially Own" shares of Capital Stock:
(i) which such person or any of such person's
Affiliates or Associates, directly or indirectly, has the sole or shared
right to vote or dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 promulgated under the Exchange Act or pursuant to any
successor provision), including, but not limited to, pursuant to any
agreement, arrangement or understanding, whether or not in writing;
provided, that a person shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own", any security under this subparagraph (i) as a result of
any agreement, arrangement or understanding to vote such security that both
(y) arises solely from a revocable proxy given in response to a public proxy
or consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the rules and regulations promulgated under the
Exchange Act and (z) is not reportable by such person on Schedule 13D
promulgated under the Exchange Act (or any comparable or successor report)
without giving effect to any applicable waiting period; or
<PAGE >
(ii) which are Beneficially Owned,
directly or indirectly, by any other person (or any Affiliate or Associate
thereof) with which such person (or any such person's Affiliates or
Associates) has any agreement, arrangement or understanding, whether or not
in writing, for the purpose of acquiring, holding, voting (except pursuant
to a revocable proxy as described in the provisions of subparagraph (i)
above), or disposing of any Capital Stock:
provided that (i) no director or officer of the Corporation (nor any
Affiliate or Associate of any such director or officer) shall, solely by
reason of acting in their capacities as such, be deemed the "Beneficial
Owner" of or to "Beneficially Own" any shares of Capital Stock that are
Beneficially Owned by any other director or officer, and (ii) no person
shall be deemed the "Beneficial Owner" of or to "Beneficially Own" any
shares of Capital Stock held in any voting trust, any employee stock
ownership plan or any similar plan or trust, if such person does not possess
the right to vote, to direct the voting of or to be consulted with respect
to the voting of such shares.
(g) The term "Capital Stock" shall mean all capital
stock of the Corporation authorized to be issued from time to time under
this Certificate.
(h) The term "person" shall mean any individual,
firm, corporation, partnership or other entity and shall include any group
comprised of any person and any other person with whom such person or any
Affiliate or Associate of such person has any agreement, arrangement or
understanding, directly or indirectly, for the purpose of acquiring,
holding, voting or disposing of Capital Stock.
(i) The term "Subsidiary" means any company of which
a majority of any class of equity security is beneficially owned by the
Corporation.
(8) The Board of Directors shall have the power to determine
for the purposes of this Article TENTH on the basis of information known to
them after reasonable inquiry all questions arising under this Article TENTH
including, without limitation, (a) whether a person is a Disqualified
Holder, an Unqualified Stockholder or a Disqualified Stockholder, (b)
whether a Disqualified Holder has disposed of his Securities Beneficially
Owned by any person and (c) whether a person is an Affiliate or Associate of
another. Any such determination shall be binding and conclusive on all
parties.
(9) The Corporation shall cause to be placed in every
indenture or other operative instrument of Publicly-traded Securities (other
than Capital Stock) of the Corporation entered into after December 30, 1993
a provision requiring that any holder of such securities who is found to be
a Disqualified Holder shall have his interest therein redeemed or shall
dispose of such interest in the Corporation in the manner set forth in the
indenture or other operative instrument.
(10) Nothing contained in this Article TENTH shall be
construed (a) to relieve any Unqualified Stockholder, Disqualified
Stockholder or Disqualified Holder from any fiduciary obligation imposed by
law, (b) to prohibit or affect any contractual arrangements which the
Corporation may make from time to time with any holder of Securities to
purchase all or any part of shares of Capital Stock or other Securities held
by them, or (c) to be in derogation of any action, past or future, which has
been or may be taken by the Board of Directors or any holder of Securities
with respect to the subject matter of this Article TENTH.
(11) The Corporation will be entitled to injunctive relief
in any court of competent jurisdiction to enforce the provisions of this
Article TENTH and each holder of the Publicly-traded Securities of the
Corporation will be deemed to have acknowledged by acquiring or retaining
such securities that failure to comply with this Article TENTH will expose
the Corporation to irreparable injury for which there is no adequate remedy
at law and that the Corporation is entitled to injunctive relief to enforce
the provisions of this Article TENTH.
<PAGE >
Exhibit A
CERTIFICATE OF DESIGNATION,
POWERS, PREFERENCES AND RIGHTS
OF
SERIES A PREFERRED STOCK
OF
AMERICAN GAMING & ENTERTAINMENT, LTD.
AMERICAN GAMING & ENTERTAINMENT, LTD., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
That pursuant to authority conferred upon the Board of Directors by the
Certificate of Incorporation, as amended, of the Corporation, and pursuant
to the provisions of Sections 141 and 151 of the General Corporation Law of
the State of Delaware, said Board of Directors, at meetings duly called and
held on April 22, 1992, adopted, and on November 5, 1992 and November 19,
1999, amended, a resolution providing for the issuance of one series of the
Corporation's Preferred Stock, $0.01 par value, to be designated "Series A
Preferred Stock", and fixing the designation, powers, preferences and
relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, which resolution, as amended, is as
follows:
RESOLVED, that pursuant and subject to the provisions of Article FOURTH of
the Certificate of Incorporation, as amended, of the Corporation, there is
hereby established a series of Preferred Stock to which the following
provisions shall be applicable:
(a) Designation. The series shall be designated as "Series A Preferred
Stock" (hereinafter "this Series A Preferred Stock").
(b) Number. The number of shares of Series A Preferred Stock authorized
to be issued is 55,982.61.
(c) Conversion. The holders of Series A Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):
(i) Right to Convert. At any time:
(A) each share of Series A Preferred Stock shall be
convertible, at the option of the holder thereof, into twenty-five (25) (the
"Conversion Factor") fully paid and nonassessable shares of the
Corporation's Common Stock ("Common Stock"); and
(B) each share of Series A Preferred Stock shall be
automatically converted into that number of fully paid and nonassessable
shares of Common Stock equal to the Conversion Factor if the holders of two-
thirds of the Series A Preferred Stock vote to convert all Series A
Preferred Stock into Common Stock.
(ii) Mechanics of Conversion. No fractional shares of Common Stock
shall be issued upon conversion of the Series A Preferred Stock. In lieu of
any fractional share to which a holder would otherwise be entitled, the
corporation shall pay cash equal to such fraction multiplied by the fair
market value of the Common Stock as determined by the Board. Before any
holder of Series A Preferred Stock shall be entitled to convert the same
into full shares of Common Stock, he shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the corporation or of
any transfer agent for the Series A Preferred Stock, and shall give written
notice to the corporation at such office that he elects to convert the same.
The corporation shall, as soon as practicable thereafter, issue and deliver
at such office to such holder of Series A Preferred Stock, a certificate or
certificates for the number of shares of Common Stock
<PAGE >
to which he shall be entitled as aforesaid and a check payable to the holder
in the amount of any cash amounts payable as the result of a conversion into
a fractional share of Common Stock. Such conversion shall be deemed to have
been made immediately prior to the close of business on the date of such
surrender of the shares of Series A Preferred Stock to be converted, 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.
(iii) Adjustments for Stock Dividends, Subdivisions, Combinations,
or Consolidations. In the event the Corporation shall pay a stock dividend
on the Common Stock, or the outstanding shares of Common Stock shall be
subdivided, combined or consolidated, by reclassification or otherwise, into
a greater or lesser number of shares of Common Stock, the Conversion Factor
in effect immediately prior to such subdivision, combination or
consolidation shall, concurrently with the effectiveness of such
subdivision, combination or consolidation, be proportionately adjusted.
(iv) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of any Conversion Factor for Series A Preferred
Stock pursuant to this Section 2, the Corporation at its expense shall
promptly compute such adjustment or readjustment in accordance with the
terms hereof and furnish to each holder of preferred stock a certificate
setting forth such adjustment or readjustment and showing in detail the
facts upon which such adjustment or readjustment is based. The Corporation
shall, upon the written request at any time of any holder of Series A
Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Factor for such Series A Preferred Stock at the time in effect
and (iii) the number of shares of Common Stock and the amount, if any, of
other property which at the time would be received upon the conversion of
each share of Series A Preferred Stock.
(v) Notices of Record Date. In the event that this Corporation
shall propose at any time:
(A) to declare any dividend or distribution upon its Common
Stock, whether in cash, property, stock or other securities, whether or not
a regular cash dividend and whether or not out of earnings or earned
surplus;
(B) to offer for subscription pro rata to the holders of any
class or series of its stock any additional shares of stock of any class or
series or other rights;
(C) to effect any reclassification or recapitalization of
its shares of Common Stock outstanding involving a change in the shares of
Common Stock; or
(D) to merge or consolidate with or into any other
corporation, or sell, lease or convey all or substantially all its property
or business, or to liquidate, dissolve or wind up;
then, in connection with each such event, this Corporation shall send to the
holders of the Series A Preferred Stock:
(1) at least 20 days' prior written notice of the
date on which a record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders of Common
Stock shall be entitled thereto) or for determining rights to vote in
respect of the matters referred to in (C) and (D) above; and
(2) in the case of the matters referred to in (C)
and (D) above, at least 20 days' prior written notice of the date when the
same shall take place (and specifying the date on which the holders of
Common Stock shall be entitled to exchange their Common Stock for securities
or other property deliverable upon the occurrence of such event).
Each such written notice shall be given by first class mail, postage
prepaid, addressed to the holders of Series A Preferred Stock at the address
for each such holder as shown on the books of the Corporation.
<PAGE >
(d) Voting Rights.
(i) Voting Other than for Directors. Except as otherwise required
by law and except with respect to the election of directors, the holders of
Series A Preferred Stock and the holders of Common Stock shall be entitled
to notice of any shareholders' meeting and to vote as a single class upon
any matter submitted to the shareholders for a vote, as follows:
(A) the holders of Series A Preferred Stock shall have one
vote for each full share of Common Stock into which their respective shares
of Series A Preferred Stock would be convertible on the record date for the
vote; and
(B) the holders of Common Stock shall have one vote per
share of Common Stock.
(ii) Voting for Directors. The holders of Series A Preferred
Stock, voting together as a single class, shall elect one director. In the
election of the director to be elected by holders of the Series A Preferred
Stock, each share of Series A Preferred Stock shall be entitled to one vote.
For so long as the aforesaid class voting is in effect, any vacancy in the
Board occurring because of the death, resignation or removal of a director
elected by the holders of Series A Preferred Stock voting as a class, shall
be filled by the vote or written consent of the holders of a majority of
Series A Preferred Stock or, in absence of action by such holders, by action
of the remaining director, if any, elected by the holders of Series A
Preferred Stock. A director elected by the holders of the Series A
Preferred Stock, as aforesaid, may be removed from the Board with or without
cause by the vote or consent of the holders of a majority of the issued and
outstanding Series A Preferred Stock.
(e) Status of Converted Stock. In the event any shares of Series A
Preferred Stock shall be converted pursuant to Section (c) hereof, the
shares so converted shall be cancelled and shall not be issuable by the
Corporation, and the Certificate of Incorporation of the Corporation shall
be appropriately amended to effect the corresponding reduction in the
Corporation's authorized capital stock.
(f) Designation of Further Series A Preferred Stock. For so long as any
shares of the Series A Preferred Stock remain outstanding, the Company shall
not designate or issue any shares of said Series A Preferred Stock in excess
of 55,982.61 shares without first obtaining the written consent of the
holders of a majority of the shares of said Series A Preferred Stock then
outstanding.
(g) Dividends on Common Stock. If, as of the record date for any dividend
hereafter paid on Common Stock by the Corporation, there are outstanding any
shares of the Series A Preferred Stock, the Corporation shall promptly pay
to the holder of each such outstanding share of Series A Preferred Stock a
dividend equal to the total amount of said dividends which would have been
payable with respect to the number of shares of Common Stock into which such
share of Series A Preferred Stock could have been converted as of said
record date.
<PAGE >
Exhibit B
CERTIFICATE OF DESIGNATION,
POWERS, PREFERENCES AND RIGHTS
OF
SERIES C CUMULATIVE
PREFERRED STOCK
OF
AMERICAN GAMING & ENTERTAINMENT, LTD.
AMERICAN GAMING & ENTERTAINMENT, LTD., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
That pursuant to authority conferred upon the Board of Directors by the
Certificate of Incorporation, as amended, of the Corporation, and pursuant
to the provisions of Sections 141 and 151 of the General Corporation Law of
the State of Delaware, said Board of Directors, at meetings duly called and
held on March 23, 1994 and November 19, 1999, adopted and amended,
respectively, a resolution providing for the issuance of one series of the
Corporation's Preferred Stock, $0.01 par value, to be designated "Series C
Cumulative Preferred Stock", and fixing the designation, powers, preferences
and relative, participating, optional or other rights, and the
qualifications, limitations or restrictions thereof, which resolution, as
amended, is as follows:
RESOLVED, that pursuant and subject to the provisions of Article FOURTH of
the Certificate of Incorporation, as amended, of the Corporation, there is
hereby established a series of Preferred Stock to which the following
provisions shall be applicable:
(a) Designation. The series shall be designated as "Series C
Cumulative Preferred Stock" (hereinafter "this Series C Preferred Stock").
(b) Number. The number of shares of Series C Preferred Stock authorized
to be issued is 4,000.
(c) Dividends. If, as of the record date for any dividend hereafter
paid on the Corporation's Common Stock ("Common Stock") by the Corporation,
there are outstanding any shares of the Series C Preferred Stock, the
Corporation shall promptly pay to the holder of each such outstanding share
of Series C Preferred Stock a dividend equal to the total amount of said
dividends which would have been payable with respect to the number of shares
of Common Stock into which such share of Series C Preferred Stock could have
been converted as of said record date.
So long as any shares of Series C Preferred Stock are outstanding, the
Corporation shall not declare, pay or set apart for payment any dividend on,
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, or make any distribution in respect of, the Common Stock, the
Corporation's Series A Preferred Stock (the "Series A") or the Junior Stock
(as defined below), other than the Corporation's Series E Preferred Stock
(the "Series E"), or any warrants, rights, calls or options exercisable for,
or convertible into, any Common Stock, Series A or Junior Stock other than
the Series E either directly or indirectly, and whether in cash, obligations
or shares of the Corporation, or other property (other than distributions or
dividends in Common Stock, Series A or Junior Stock and/or warrants to
purchase Common Stock, Series A or Junior Stock to the holders of Common
Stock, Series A or Junior Stock and/or holders of warrants, rights, calls or
options exercisable for, or convertible into, any Common Stock, Series A or
Junior Stock), and shall not permit any corporation or other entity directly
or indirectly controlled by the Corporation to purchase or redeem any Common
Stock, Series A or Junior Stock, other than the Series E, or any warrants,
rights, calls or options exercisable for or convertible into any of the
Common Stock, Series A or Junior Stock, other than the Series E, unless in
any
<PAGE >
such instance the holders of Series C Preferred Stock shall be entitled to
participate in such dividend, purchase, redemption, retirement or
distribution on the same basis as if such Series C Preferred Stock had been
converted into the number of shares of Common Stock into which such shares
of Series C Preferred Stock could have been converted as of said record
date.
The Series C Preferred Stock shall rank junior as to dividends to any class
or series of stock of the Corporation which are by their terms expressly
made senior as to dividends to the Series C Preferred Stock in accordance
with Section (e)(iii)(C) of this Certificate. The Series C Preferred Stock
shall rank equally as to dividends with all shares of the Common Stock,
Series A and the Corporation's Series D Cumulative Preferred Stock ("Series
D") and any other class or series of stock of the Corporation which are
expressly made equal as to dividends to the Series C Preferred Stock in
accordance with Section (e)(iii)(C) of this Certificate. Notwithstanding
the foregoing, nothing contained in the Certificate of Incorporation of the
Corporation shall prohibit the Corporation from redeeming shares of Series C
Preferred Stock, Series D and/or Series E while there are accrued and unpaid
dividends on shares of Series C Preferred Stock and/or Series D. The Series
C Preferred Stock shall rank senior as to dividends to the Series E and any
other class or series of stock of the Corporation which are not by their
terms expressly made senior or equal as to dividends to the Series C
Preferred Stock (collectively, the "Junior Stock") in accordance with
Section (e)(iii)(C) of this Certificate.
(d) Liquidation. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary
("Liquidation"), the holder of each share of Series C Preferred Stock shall
be entitled to receive out of assets of the Corporation before any
distribution is made to, or set apart for, the holders of any shares of
Common Stock, Series A or of any class or series of stock of the Corporation
ranking junior to the Series C Preferred Stock in respect of distribution of
assets upon Liquidation, a liquidating distribution in the amount of $1,000
per share together with any accrued but unpaid dividends thereon to the date
of distribution. After payment to holders of Series C Preferred Stock of
the full preferential amount as aforesaid, holders of Series C Preferred
Stock, as such, shall have no right or claim to any of the remaining assets
of the Corporation.
If upon any Liquidation of the Corporation the assets of the Corporation or
proceeds thereof distributable among the holders of shares of the Series C
Preferred Stock and of any class or series of stock ranking equally with the
Series C Preferred Stock as to distribution of assets upon Liquidation shall
be insufficient to pay in full the preferential amounts payable to such
holders, then such assets or the proceeds thereof shall be distributed among
such holders ratably in accordance with the respective amounts that would be
payable on such shares if all amounts payable thereon were paid in full.
The Series C Preferred Stock shall rank junior as to distribution of assets
upon Liquidation to any class or series of stock of the Corporation which
are by their terms expressly made senior as to distribution of assets upon
Liquidation to the Series C Preferred Stock in accordance with Section
(e)(iii)(B) of this Certificate. The Series C Preferred Stock shall rank
equally as to distribution of assets upon Liquidation with all shares of
Series D and Series E and any other class or series of stock of the
Corporation which are expressly made equal as to distribution of assets upon
Liquidation to the Series C Preferred Stock in accordance with Section
(e)(iii)(B) of this Certificate. The Series C Preferred Stock shall rank
senior as to distribution of assets upon Liquidation to the Corporation's
Common Stock and the Series A and any other class or series of stock of the
Corporation which are not by their terms expressly made senior or equal as
to distribution of assets upon Liquidation to the Series C Preferred Stock
in accordance with Section (e)(iii)(B) of this Certificate.
A consolidation or merger or share exchange of the Corporation with or into
one or more corporations, or a sale, lease, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or substantially
all of the assets of the Corporation shall not be deemed to be a
Liquidation.
(e) Voting Rights.
(i) Except as otherwise required by law, the Corporation's Certificate
of Incorporation, by contractual arrangement or as hereinafter provided in
this Section (e), the holder(s) of Series C Preferred
<PAGE >
Stock shall not, by reason of holding Series C Preferred Stock, have any
voting rights as stockholders of the Corporation including, without
limitation, any right to notice of or to be represented at any shareholders'
meetings or to vote upon the election of directors or upon any other matter.
(ii) So long as any shares of Series C Preferred Stock are outstanding,
the Corporation shall not, without the affirmative vote of the holders of at
least two-thirds of the then outstanding shares of Series C Preferred Stock
voting separately as a class, change by amendment to the Corporation1s
Certificate of Incorporation or otherwise, the terms or provisions of the
Series C Preferred Stock so as to adversely affect the powers, special
rights and preferences of the holders thereof.
(iii) So long as shares of Series C Preferred Stock are outstanding, the
Corporation shall not, without the consent of the holders of at least a
majority of the outstanding shares of Series C Preferred Stock voting
separately as a class, (A) merge with or into another corporation unless (1)
the Corporation is the surviving or successor corporation or the entity
formed by such consolidation or merger is organized in the United States or
any state, municipality or other governmental division thereof, (2) the
terms of the Series C Preferred Stock are not changed in any manner which is
materially adverse to the holders thereof and (3) the powers, special rights
and preferences of any securities into which the Series C Preferred Stock is
converted in such transaction are substantially the same as the powers,
special rights and preferences of the Series C Preferred Stock, (B) issue
any class or series of stock of the Corporation ranking senior to or equally
with the Series C Preferred Stock as to distribution of assets upon
Liquidation other than 4,000 shares of Series D, and 4,000 shares of Series
E or (C) issue any class or series of stock of the Corporation ranking
senior to or equally with the Series C Preferred Stock as to dividends other
than 4,000 shares of Series D. No vote or consent of the holders of the
Series C Preferred Stock shall be required in respect of any transaction
enumerated in this paragraph if at or prior to the time any such transaction
is to take effect, provision is made for the redemption or other retirement
of the Series C Preferred Stock at the time outstanding, the consent of
which would otherwise be required and such redemption or retirement is made
in accordance herewith.
(f) Optional Redemption. At the option of the Corporation, by vote of the
Board of Directors, the Series C Preferred Stock may be redeemed in whole or
in part at any time and from time to time, at the prices per share set forth
below (the "Base Redemption Prices"), plus an amount equal to any cash
dividends that have accumulated but have not been paid to the date fixed for
redemption (the applicable Base Redemption Price plus the accumulated and
unpaid dividends are hereinafter referred to as the "Redemption Price"):
If redeemed during the following periods the Base Redemption Prices shall be
as follows:
October 1, 1999 - December 31, 1999, $1,498.86
Thereafter, the Base Redemption Price will increase $29.17 as of the first
day of each successive calendar quarter.
In the event that fewer than all of the outstanding shares of Series C
Preferred Stock are to be redeemed at any one time, the shares so to be
redeemed shall be selected by lot or pro rata as determined by the
Corporation. The Corporation shall cause a notice to be mailed, first class
postage prepaid, at least 13 days, but not more than 90 days, prior to the
date fixed for redemption, to each holder of record of shares of Series C
Preferred Stock. Such notice shall be mailed to such record holders at
their respective addresses as they shall appear upon the books of the
Corporation and shall set forth the date of such redemption and the place
for surrender of certificates for shares to be redeemed.
If such notice of redemption shall have been duly given and if on or before
the redemption date specified in such notice there shall have been deposited
with a bank or trust company, having capital, surplus and undivided profits
of at least $50,000,000, in trust for the account of the holders of the
shares so called for redemption, funds in an amount equal to the Redemption
Price applicable to the shares to be redeemed at the date fixed for such
redemption, together with irrevocable instruments and authority to such bank
or trust company to redeem such shares on or after the date of such deposit
upon surrender of the certificates therefor, then upon the making of such
deposit in trust the shares with respect to which such deposit shall
<PAGE >
have been made shall no longer be deemed to be outstanding. All rights with
respect to such shares shall forthwith terminate except only (i) the rights,
if any, under Section (g)(iii) of this Certificate, and (ii) the right to
receive forthwith from and after the date of such deposit the Redemption
Price, without interest.
If such notice of redemption shall have been duly given and if no such
deposit shall have been made, then upon the date fixed for redemption,
unless default shall be made in providing funds at the time and place
specified for the payment of the Redemption Price, the shares so called for
redemption shall no longer be deemed to be outstanding, and all rights with
respect to such shares shall forthwith terminate, except only the right to
receive the Redemption Price, without interest.
Any interest accrued on funds so deposited in trust shall belong to the
Corporation and be paid to it from time to time. All funds deposited in
accordance with this Section (f) which shall remain unclaimed by the holders
of shares called for redemption at the end of one year after the redemption
date shall be returned by such bank or trust company to the Corporation,
after which the holders of such shares shall look only to the Corporation
for the payment of such unclaimed amounts, without interest.
In case fewer than all of the shares represented by any certificate are
redeemed, a new certificate representing the unredeemed shares shall be
issued to the surrendering holder at the expense of the Corporation.
(g) Conversion. Holders of Series C Preferred Stock shall have the
right to convert their shares at any time subject to the following:
(i) each share of Series C Preferred Stock shall be convertible, at
the option of the holder thereof, into that number of fully paid and non-
assessable shares of Common Stock equal to (1) the then applicable
Redemption Price for such shares of Series C Preferred Stock divided by (2)
0.75 multiplied by the Average Market Price (as defined below) on the Date
of Conversion (as defined below).
(ii) on the first business day following the date that at least
3,000 shares of Series C Preferred Stock have been converted into Common
Stock, each then outstanding share of Series C Preferred Stock shall be
automatically converted into that number of fully paid and non-assessable
shares of Common Stock equal to (1) the then applicable Redemption Price for
such shares of Series C Preferred Stock divided by (2) 0.75 multiplied by
the Average Market Price on the Date of Conversion.
(iii) Notwithstanding anything to the contrary contained herein, if
any shares of Series C Preferred Stock shall be called for redemption, the
right of conversion as to the shares called for redemption shall expire at
the close of business on the third business day preceding the date fixed for
redemption thereof unless default shall be made in payment of the Redemption
Price with respect to such shares, notwithstanding any earlier deposit by
the Corporation of funds reserved for such redemption.
(iv) Upon any conversion of shares of Series C Preferred Stock, the
holders thereof shall not be entitled to receive any accumulated, accrued or
unpaid dividends in respect of the shares surrendered for conversion or the
shares of Common Stock issued on conversion thereof; provided, however, that
such holders shall be entitled to receive any dividends on such shares of
Series C Preferred Stock paid or declared prior to such conversion if such
holder held such shares on the record date for the payment of such dividend.
(v) Each holder of shares of Series C Preferred Stock desiring to
exercise his right of conversion shall deliver written notice of his
election to convert, stating the names and addresses of the persons to whom
the Common Stock is to be issued, and the number (in whole shares) of shares
to be converted, and shall surrender the certificate or certificates for
such shares, duly endorsed or accompanied by proper instruments of transfer
(unless such endorsement or instruments be waived by the Corporation) to the
Corporation during usual business hours at the office of the Transfer Agent
of the Corporation for the transfer of its Common Stock in New York, New
York (or such other place as may be designated by the Corporation upon
written notice to all holders of Series C Preferred Stock). Upon receipt by
the Corporation of any such notice of election to convert shares of Series C
Preferred Stock, and upon
<PAGE >
surrender of the certificate or certificates therefor, the Corporation shall
execute and deliver, as soon as practicable, to the converting holder, or to
his nominee or nominees, a certificate or certificates for the number of
shares of Common Stock resulting from such conversion, together with any
cash adjustment in lieu of fractional shares as hereinafter provided. For
all purposes except the right to receive dividends, as provided in the
foregoing paragraph, the rights of a converting holder, as such, shall
cease, and the person or persons in whose name or names the certificate or
certificates for Common Stock issuable upon such conversion are to be issued
shall be deemed to have become the record holder or holders of such Common
Stock at the close of business on the day (the "Date of Conversion") on
which delivery of such notice or the surrender of the certificate or
certificates for such shares (whichever shall later occur) shall be made.
(vi) The Corporation shall not be required to issue fractional
shares of Common Stock upon conversion of shares of Series C Preferred
Stock. 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 issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares so surrendered. If
any fractional interest in a share of Common Stock would be deliverable upon
the conversion of any shares, the Corporation may, in lieu of delivering the
fractional share therefor, make a cash adjustment in respect of such
fraction in an amount equal to the same fraction of the Current Market Price
(as defined below) of one share of the Common Stock of the Corporation on
the last business day before the Date of Conversion. The "Current Market
Price" on any given day shall be (i) if the Common Stock of the Corporation
is listed or admitted to unlisted trading privileges on a National
Securities Exchange (defined as any exchange registered with the Securities
and Exchange Commission as a "national securities exchange" under the
Securities Exchange Act of 1934), the last sales price of the shares of
Common Stock of the Corporation on the National Securities Exchange in or
nearest the City of New York on which the shares of Common Stock of the
Corporation shall be listed or admitted to unlisted trading privileges (or
the quoted closing bid if there are no sales on such Exchange) on such day,
(ii) if the Common Stock of the Corporation is included in the National
Market System ("NMS") of The NASDAQ Stock Market or on NASDAQ, the last
sales price of the shares of Common Stock of the Corporation in the NMS of
The NASDAQ Stock Market or on NASDAQ, as the case may be (or the quoted
closing bid if there be no sales on the NMS or on NASDAQ) on such day, or
(iii) if the Common Stock of the Corporation is not so listed, admitted or
included, the mean between the high and low bid prices of the shares of
Common Stock of the Corporation in the over-the-counter market on such day
as reported by National Quotation Bureau Incorporated, or similar
organization designated by the Corporation, or if not so available in any
such manner, as shall be determined by the Corporation, which determination
shall be conclusive.
(vii) The "Average Market Price" at any date shall be deemed to be
the average of the Current Market Prices for the 10 consecutive business
days prior to such date; provided, however, that if the record date or
payment date for a stock split or stock combination occurs during such 10
day period, the Average Market Price for the business days prior to such
record date or payment date shall be appropriately adjusted.
(viii) In case the Corporation shall (i) effect any capital
reorganization or reclassification of its Common Stock (except a change in
par value, or from par value to no par value or from no par value to par
value or as a result of a subdivision, combination or stock dividend), or
(ii) consolidate or merge with or into any other corporation (other than a
merger in which the Corporation is the surviving corporation and each share
of Common Stock outstanding immediately prior to such merger is to remain
outstanding immediately after such merger), lawful provision shall be made
as part of the terms of such transaction whereby the holders of shares of
Series C Preferred Stock shall, if entitled to convert such shares at any
time after the consummation of such transaction, receive upon conversion
thereof in lieu of each share of Common Stock issuable upon conversion of
such shares prior to such consummation the same kind and amount of stock (or
other securities, cash or property, if any) as may be issuable or
distributable in connection with such transaction with respect to each
outstanding share of Common Stock, subject to appropriate adjustments for
subsequent stock splits, stock combinations, reclassifications, capital
reorganizations, consolidations or mergers.
<PAGE >
(h) Other Rights. The holders of the Series C Preferred Stock shall not
have any other preferences or special rights.
<PAGE >
Exhibit C
CERTIFICATE OF DESIGNATION,
POWERS, PREFERENCES AND RIGHTS
OF
SERIES D CUMULATIVE
PREFERRED STOCK
OF
AMERICAN GAMING & ENTERTAINMENT, LTD.
AMERICAN GAMING & ENTERTAINMENT, LTD., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
That pursuant to authority conferred upon the Board of Directors by the
Certificate of Incorporation, as amended, of the Corporation, and pursuant
to the provisions of Sections 141 and 151 of the General Corporation Law of
the State of Delaware, said Board of Directors, at meetings duly called and
held on March 23, 1994 and November 19, 1999, adopted and amended,
respectively, a resolution providing for the issuance of one series of the
Corporation's Preferred Stock, $0.01 par value, to be designated "Series D
Cumulative Preferred Stock", and fixing the designation, powers, preferences
and relative, participating, optional or other rights, and the
qualifications, limitations or restrictions thereof, which resolution, as
amended, is as follows:
RESOLVED, that pursuant and subject to the provisions of Article FOURTH of
the Certificate of Incorporation, as amended, of the Corporation, there is
hereby established a series of Preferred Stock to which the following
provisions shall be applicable:
(a) Designation. The series shall be designated as "Series D Cumulative
Preferred Stock" (hereinafter "this Series D Preferred Stock").
(b) Number. The number of shares of Series D Preferred Stock authorized
to be issued is 4,000.
(c) Dividends. If, as of the record date for any dividend hereafter
paid on the Corporation's Common Stock ("Common Stock") by the Corporation,
there are outstanding any shares of the Series D Preferred Stock, the
Corporation shall promptly pay to the holder of each such outstanding share
of Series D Preferred Stock a dividend equal to the total amount of said
dividends which would have been payable with respect to the number of shares
of Common Stock into which such share of Series D Preferred Stock could have
been converted as of said record date.
So long as any shares of Series D Preferred Stock are outstanding, the
Corporation shall not declare, pay or set apart for payment any dividend on,
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, or make any distribution in respect of, the Common Stock, the
Corporation's Series A Preferred Stock (the "Series A") or the Junior Stock
(as defined below), other than the Corporation's Series E Preferred Stock
(the "Series E"), or any warrants, rights, calls or options exercisable for,
or convertible into, any Common Stock, Series A or Junior Stock other than
the Series E either directly or indirectly, and whether in cash, obligations
or shares of the Corporation, or other property (other than distributions or
dividends in Common Stock, Series A or Junior Stock and/or warrants to
purchase Common Stock, Series A or Junior Stock to the holders of Common
Stock, Series A or Junior Stock and/or holders of warrants, rights, calls or
options exercisable for, or convertible into, any Common Stock, Series A or
Junior Stock), and shall not permit any corporation or other entity directly
or indirectly controlled by the Corporation to purchase or redeem any Common
Stock, Series A or Junior Stock, other than the Series E, or any warrants,
rights, calls or options exercisable for or
<PAGE >
convertible into any of the Common Stock, Series A or Junior Stock, other
than the Series E, unless in any such instance the holders of Series D
Preferred Stock shall be entitled to participate in such dividend, purchase,
redemption, retirement or distribution on the same basis as if such Series D
Preferred Stock had been converted into the number of shares of Common Stock
into which such shares of Series D Preferred Stock could have been converted
as of said record date.
The Series D Preferred Stock shall rank junior as to dividends to any class
or series of stock of the Corporation which are by their terms expressly
made senior as to dividends to the Series D Preferred Stock in accordance
with Section (e)(iii)(C) of this certificate. The Series D Preferred Stock
shall rank equally as to dividends with all shares of the Common Stock, the
Series A and the Corporation's Series C Cumulative Preferred Stock ("Series
C") and any other class or series of stock of the Corporation which are
expressly made equal as to dividends to the Series D Preferred Stock in
accordance with Section (e)(iii)(C) of this Certificate. Notwithstanding
the foregoing, nothing contained in the certificate of Incorporation of the
Corporation shall prohibit the Corporation from redeeming shares of Series
C, Series D Preferred Stock and/or Series E while there are accrued and
unpaid dividends on shares of Series C and/or Series D Preferred Stock. The
Series D Preferred Stock shall rank senior as to dividends to the Series E
and any other class or series of stock of the Corporation which are not by
their terms expressly made senior or equal as to dividends to the Series D
Preferred Stock (collectively, the "Junior Stock") in accordance with
Section (e)(iii)(C) of this Certificate.
(d) Liquidation. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary
("Liquidation"), the holder of each share of Series D Preferred Stock shall
be entitled to receive out of assets of the Corporation before any
distribution is made to, or set apart for, the holders of any shares of
Common Stock, Series A or of any class or series of stock of the Corporation
ranking junior to the Series D Preferred Stock in respect of distribution of
assets upon Liquidation, a liquidating distribution in the amount of $1,000
per share together with any accrued but unpaid dividends thereon to the date
of distribution. After payment to holders of Series D Preferred Stock of
the full preferential amount as aforesaid, holders of Series D Preferred
Stock, as such, shall have no right or claim to any of the remaining assets
of the Corporation.
If upon any Liquidation of the Corporation the assets of the Corporation or
proceeds thereof distributable among the holders of shares of the Series D
Preferred Stock and of any class or series of stock ranking equally with the
Series D Preferred Stock as to distribution of assets upon Liquidation shall
be insufficient to pay in full the preferential amounts payable to such
holders, then such assets or the proceeds thereof shall be distributed among
such holders ratably in accordance with the respective amounts that would be
payable on such shares if all amounts payable thereon were paid in full.
The Series D Preferred Stock shall rank junior as to distribution of assets
upon Liquidation to any class or series of stock of the Corporation which
are by their terms expressly made senior as to distribution of assets upon
Liquidation to the Series D Preferred Stock in accordance with Section
(e)(iii)(B) of this Certificate. The Series D Preferred stock shall rank
equally as to distribution of assets upon Liquidation with all shares of
Series C and Series E and any other class or series of stock of the
Corporation which are expressly made equal as to distribution of assets upon
Liquidation to the Series D Preferred Stock in accordance with Section
(e)(iii)(B) of this Certificate. The Series D Preferred Stock shall rank
senior as to distribution of assets upon Liquidation to the Corporation's
Common Stock and the Series A and any other class or series of stock of the
Corporation which are not by their terms expressly made senior or equal as
to distribution of assets upon Liquidation to the Series D Preferred Stock
in accordance with Section (e)(iii)(B) of this Certificate.
A consolidation or merger or share exchange of the Corporation with or into
one or more corporations, or a sale, lease, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or substantially
all of the assets of the Corporation shall not be deemed to be a
Liquidation.
(e) Voting Rights.
<PAGE >
(i) Except as otherwise required by law, the Corporation's
Certificate of Incorporation, by contractual arrangement or as hereinafter
provided in this Section (e), the holder(s) of Series D Preferred Stock
shall not, by reason of holding Series D Preferred Stock, have any voting
rights as stockholders of the Corporation including, without limitation, any
right to notice of or to be represented at any shareholders' meetings or to
vote upon the election of directors or upon any other matter.
(ii) So long as any shares of Series D Preferred Stock are
outstanding, the Corporation shall not, without the affirmative vote of the
holders of at least two-thirds of the then outstanding shares of Series D
Preferred Stock voting separately as a class, change by amendment to the
Corporation's Certificate of Incorporation or otherwise, the terms or
provisions of the Series D Preferred Stock so as to adversely affect the
powers, special rights and preferences of the holders thereof.
(iii) So long as shares of Series D Preferred Stock are
outstanding, the Corporation shall not, without the consent of the holders
of at least a majority of the outstanding shares of Series D Preferred Stock
voting separately as a class, (A) merge with or into another corporation
unless (1) the Corporation is the surviving or successor corporation or the
entity formed by such consolidation or merger is organized in the United
States or any state, municipality or other governmental division thereof,
(2) the terms of the Series D Preferred Stock are not changed in any manner
which is materially adverse to the holders thereof and (3) the powers,
special rights and preferences of any securities into which the Series D
Preferred Stock is converted in such transaction are substantially the same
as the powers, special rights and preferences of the Series D Preferred
Stock, (B) issue any class or series of stock of the Corporation ranking
senior to or equally with the Series D Preferred Stock as to distribution of
assets upon Liquidation other than 4,000 shares of Series C, and 4,000
shares of Series E or (C) issue any class or series of stock of the
Corporation ranking senior to or equally with the Series D Preferred Stock
as to dividends other than 4,000 shares of Series C. No vote or consent of
the holders of the Series D Preferred Stock shall be required in respect of
any transaction enumerated in this paragraph if at or prior to the time any
such transaction is to take effect, provision is made for the redemption or
other retirement of the series D Preferred Stock at the time outstanding,
the consent of which would otherwise be required and such redemption or
retirement is made in accordance herewith.
(f) Optional Redemption. At the option of the Corporation, by vote of
the Board of Directors, the Series D Preferred Stock may be redeemed in
whole or in part at any time and from time to time, at the prices per share
set forth below (the "Base Redemption Prices"), plus an amount equal to any
cash dividends that have accumulated but have not been paid to the date
fixed for redemption (the applicable Base Redemption Price plus the
accumulated and unpaid dividends are hereinafter referred to as the
"Redemption Price"):
If redeemed during the following periods the Base Redemption Prices shall be
as follows:
October 1, 1999 - December 31, 1999, $1,444.67
Thereafter, the Base Redemption Price will increase $29.17 as of the first
day of each successive calendar quarter.
In the event that fewer than all of the outstanding shares of Series D
Preferred Stock are to be redeemed at any one time, the shares so to be
redeemed shall be selected by lot or pro rata as determined by the
Corporation. The Corporation shall cause a notice to be mailed, first class
postage prepaid, at least 13 days, but not more than 90 days, prior to the
date fixed for redemption, to each holder of record of shares of Series D
Preferred Stock. Such notice shall be mailed to such record holders at
their respective addresses as they shall appear upon the books of the
Corporation and shall set forth the date of such redemption and the place
for surrender of certificates for shares to be redeemed.
If such notice of redemption shall have been duly given and if on or before
the redemption date specified in such notice there shall have been deposited
with a bank or trust company, having capital, surplus and undivided profits
of at least $50,000,000, in trust for the account of the holders of the
shares so called for redemption, funds in an amount equal to the Redemption
Price applicable to the shares to be redeemed at the date fixed for such
redemption, together with irrevocable instruments and authority to such bank
or trust
<PAGE >
company to redeem such shares on or after the date of such deposit upon
surrender of the certificates therefor, then upon the making of such deposit
in trust the shares with respect to which such deposit shall have been made
shall no longer be deemed to be outstanding. All rights with respect to
such shares shall forthwith terminate except only (1) the rights, if any,
under Section (g)(iii) of this Certificate and (ii) the right to receive
forthwith from and after the date of such deposit the Redemption Price,
without interest.
If such notice of redemption shall have been duly given and if no such
deposit shall have been made, then upon the date fixed for redemption,
unless default shall be made in providing funds at the time and place
specified for the payment of the Redemption Price, the shares so called for
redemption shall no longer be deemed to be outstanding, and all rights with
respect to such shares shall forthwith terminate, except only the right to
receive the Redemption Price, without interest.
Any interest accrued on funds so deposited in trust shall belong to the
Corporation and be paid to it from time to time. All funds deposited in
accordance with this Section (f) which shall remain unclaimed by the holders
of shares called for redemption at the end of one year after the redemption
date shall be returned by such bank or trust company to the Corporation,
after which the holders of such shares shall look only to the Corporation
for the payment of such unclaimed amounts, without interest.
In case fewer than all of the shares represented by any certificate are
redeemed, a new certificate representing the unredeemed shares shall be
issued to the surrendering holder at the expense of the Corporation.
(g) Conversion. Holders of Series D Preferred Stock shall have the
right to convert their shares at any time subject to the following:
(i) each share of Series D Preferred Stock shall be convertible, at
the option of the holder thereof, into that number of fully paid and non-
assessable shares of Common Stock equal to (1) the then applicable
Redemption Price for such shares of Series D Preferred Stock divided by (2)
0.75 multiplied by the Average Market Price (as defined below) on the Date
of Conversion (as defined below).
(ii) on the first business day following the date that at least
3,000 shares of Series D Preferred Stock have been converted into Common
Stock, each then outstanding share of Series D Preferred Stock shall be
automatically converted into that number of fully paid and non-assessable
shares of Common Stock equal to (1) the then applicable Redemption Price for
such shares of Series D Preferred Stock divided by (2) 0.75 multiplied by
the Average Market Price on the Date of Conversion.
(iii) Notwithstanding anything to the contrary contained herein, if
any shares of Series D Preferred Stock shall be called for redemption, the
right of conversion as to the shares called for redemption shall expire at
the close of business on the third business day preceding the date fixed for
redemption thereof unless default shall be made in payment of the Redemption
Price with respect to such shares, notwithstanding any earlier deposit by
the Corporation of funds reserved for such redemption.
(iv) Upon any conversion of shares of Series D Preferred Stock, the
holders thereof shall not be entitled to receive any accumulated, accrued or
unpaid dividends in respect of the shares surrendered for conversion or the
shares of Common Stock issued on conversion thereof; provided, however, that
such holders shall be entitled to receive any dividends on such shares of
Series D Preferred Stock paid or declared prior to such conversion if such
holder held such shares on the record date for the payment of such dividend.
(v) Each holder of shares of Series D Preferred Stock desiring to
exercise his right of conversion shall deliver written notice of his
election to convert, stating the names and addresses of the persons to whom
the Common Stock is to be issued, and the number (in whole shares) of shares
to be converted, and shall surrender the certificate or certificates for
such shares, duly endorsed or accompanied by proper instruments of transfer
(unless such endorsement or instruments be waived by the Corporation) to the
corporation during usual business hours at the office of the Transfer Agent
of the Corporation for the transfer of its Common Stock in New York, New
York (or such other place as may be designated by the
<PAGE >
Corporation upon written notice to all holders of Series D Preferred Stock).
Upon receipt by the Corporation of any such notice of election to convert
shares of Series D Preferred Stock, and upon surrender of the certificate or
certificates therefor, the Corporation shall execute and deliver, as soon as
practicable, to the converting holder, or to his nominee or nominees, a
certificate or certificates for the number of shares of Common Stock
resulting from such conversion, together with any cash adjustment in lieu of
fractional shares as hereinafter provided. For all purposes except the
right to receive dividends, as provided in the foregoing paragraph, the
rights of a converting holder, as such, shall cease, and the person or
persons in whose name or names the certificate or certificates for Common
Stock issuable upon such conversion are to be issued shall be deemed to have
become the record holder or holders of such Common Stock at the close of
business on the day (the "Date of Conversion") on which delivery of such
notice or the surrender of the certificate or certificates for such shares
(whichever shall later occur) shall be made.
(vi) The Corporation shall not be required to issue fractional
shares of Common Stock upon conversion of shares of Series D Preferred
Stock. If more than one share of Series D Preferred Stock shall be
surrendered for conversion at one time by the same holder, the number of
full shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares so surrendered. If
any fractional interest in a share of Common Stock would be deliverable upon
the conversion of any shares, the Corporation may, in lieu of delivering the
fractional share therefor, make a cash adjustment in respect of such
fraction in an amount equal to the same fraction of the Current Market Price
(as defined below) of one share of the Common Stock of the Corporation on
the last business day before the Date of Conversion. The "Current Market
Price" on any given day shall be (i) if the Common Stock of the Corporation
is listed or admitted to unlisted trading privileges on a National
Securities Exchange (defined as any exchange registered with the Securities
and Exchange Commission as a "national securities exchange" under the
Securities Exchange Act of 1934), the last sales price of the shares of
Common Stock of the Corporation on the National Securities Exchange in or
nearest the City of New York on which the shares of Common Stock of the
Corporation shall be listed or admitted to unlisted trading privileges (or
the quoted closing bid if there are no sales on such Exchange) on such day,
(ii) if the Common Stock of the Corporation is included in the National
Market System ("NMS") of The NASDAQ Stock Market or on NASDAQ, the last
sales price of the shares of Common Stock of the Corporation in the NMS of
The NASDAQ Stock Market or on NASDAQ, as the case may be (or the quoted
closing bid if there be no sales on the NMS or on NASDAQ) on such day, or
(iii) if the Common Stock or the Corporation is not so listed, admitted or
included, the mean between the high and low bid prices of the shares of
Common Stock of the Corporation in the over-the-counter market on such day
as reported by National Quotation Bureau Incorporated, or similar
organization designated by the Corporation, or if not so available in any
such manner, as shall be determined by the Corporation, which determination
shall be conclusive.
(vii) The "Average Market Price" at any date shall be deemed to be
the average of the Current Market Prices for the 10 consecutive business
days prior to such date; provided, however, that if the record date or
payment date for a stock split or stock combination occurs during such 10
day period, the Average Market Price for the business days prior to such
record date or payment date shall be appropriately adjusted.
(viii) In case the corporation shall (i) effect any capital
reorganization or reclassification of its Common Stock (except a change in
par value, or from par value to no par value or from no par value to par
value or as a result of a subdivision, combination or stock dividend), or
(ii) consolidate or merge with or into any other corporation (other than a
merger in which the Corporation is the surviving corporation and each share
of Common Stock outstanding immediately prior to such merger is to remain
outstanding immediately after such merger), lawful provision shall be made
as part of the terms of such transaction whereby the holders of shares of
Series D Preferred Stock shall, if entitled to convert such shares at any
time after the consummation of such transaction, receive upon conversion
thereof in lieu of each share of Common Stock issuable upon conversion of
such shares prior to such consummation the same kind and amount of stock (or
other securities, cash or property, if any) as may be issuable or
distributable in connection with such transaction with respect to each
outstanding share of Common Stock, subject to appropriate adjustments for
subsequent stock splits, stock combinations, reclassifications, capital
reorganizations, consolidations or mergers.
<PAGE >
(h) Other Rights. The holders of the Series D Preferred Stock shall not
have any other preferences or special rights.
<PAGE >
Exhibit D
CERTIFICATE OF DESIGNATION,
POWERS, PREFERENCES AND RIGHTS
OF
SERIES E
PREFERRED STOCK
OF
AMERICAN GAMING & ENTERTAINMENT, LTD.
AMERICAN GAMING & ENTERTAINMENT, LTD., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
That pursuant to authority conferred upon the Board of Directors by the
Certificate of Incorporation, as amended, of the Corporation, and pursuant
to the provisions of Sections 141 and 151 of the General Corporation Law of
the State of Delaware, said Board of Directors, at meetings duly cal1ed and
held on March 23, 1994 and November 19, 1999, adopted and amended,
respectively, a resolution providing for the issuance of one series of the
Corporation's Preferred Stock, $0.01 par value, to be designated "Series E
Preferred Stock", and fixing the designation, powers, preferences and
relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, which resolution, as amended, is as
follows:
RESOLVED, that pursuant and subject to the provisions of Article FOURTH of
the Certificate of Incorporation, as amended, of the Corporation, there is
hereby established a series of Preferred Stock to which the following
provisions shall be applicable:
(a) Designation. The series shall be designated as "Series E Preferred
Stock" (hereinafter "this Series E Preferred Stock").
(b) Number. The number of shares of Series E Preferred Stock authorized
to be issued is 4,000.
(c) Dividends. The holders of shares of Series E Preferred Stock shall
not be entitled to any dividends.
(d) Liquidation. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary
("Liquidation"), the holder of each share of Series E Preferred Stock shall
be entitled to receive out of assets of the Corporation before any
distribution is made to, or set apart for, the holders of any shares of
Common Stock or of any class or series of stock of the Corporation ranking
junior to the Series E Preferred Stock in respect of distribution of assets
upon Liquidation, a liquidating distribution in the amount of $1,000 per
share. After payment to holders of Series E Preferred Stock of the full
preferential amount as aforesaid, holders of Series E Preferred Stock, as
such, shall have no right or claim to any of the remaining assets of the
Corporation.
If upon any Liquidation of the Corporation the assets of the Corporation or
proceeds thereof distributable among the holders of shares of the Series E
Preferred Stock and of any class or series of stock ranking equally with the
Series E Preferred Stock as to distribution of assets
<PAGE >
upon Liquidation shall be insufficient to pay in full the preferential
amounts payable to such holders, then such assets or the proceeds thereof
shall be distributed among such holders ratably in accordance with the
respective amounts that would be payable on such shares if all amounts
payable thereon were paid in full.
The Series E Preferred Stock shall rank junior as to distribution of assets
upon Liquidation to any class or series of stock of the Corporation which
are by their terms expressly made senior as to distribution of assets upon
Liquidation to the Series E Preferred Stock in accordance with Section
(e)(iii)(B) of this Certificate. The Series E Preferred Stock shall rank
equally as to distribution of assets upon Liquidation with all the
Corporation's shares of Series C Cumulative Preferred Stock (the "Series C")
and Series D Cumulative Preferred Stock (the "Series D") and any other class
or series of stock of the Corporation which are expressly made equal as to
distribution of assets upon Liquidation to the Series E Preferred Stock in
accordance with Section (e)(iii)(B) of this Certificate. The Series E
Preferred Stock shall rank senior as to distribution of assets upon
Liquidation to the Corporation's Common Stock and the Series A and any other
class or series of stock of the Corporation which are not by their terms
expressly made senior or equal as to distribution of assets upon Liquidation
to the Series E Preferred Stock in accordance with Section (e)(iii)(B) of
this Certificate.
A consolidation or merger or share exchange of the Corporation with or into
one or more corporations, or a sale, lease, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or substantially
all of the assets of the Corporation shall not be deemed to be a
Liquidation.
(e) Voting Rights.
(i) Except as otherwise required by law, the Corporation's
Certificate of Incorporation, by contractual arrangement or as hereinafter
provided in this Section (e), the holder(s) of Series E Preferred Stock
shall not, by reason of holding Series E Preferred Stock, have any voting
rights as stockholders of the Corporation including, without limitation, any
right to notice of or to be represented at any shareholders' meetings or to
vote upon the election of directors or upon any other matter.
(ii) So long as any shares of Series E Preferred Stock are
outstanding, the Corporation shall not, without the affirmative vote of the
holders of at least two-thirds of the then outstanding shares of Series E
Preferred Stock voting separately as a class, change by amendment to the
Corporation's Certificate of Incorporation or otherwise, the terms or
provisions of the Series E Preferred Stock so as to adversely affect the
powers, special rights and preferences of the holders thereof.
(iii) So long as shares of Series E Preferred Stock are
outstanding, the Corporation shall not, without the consent of the holders
of at least a majority of the outstanding shares of Series E Preferred Stock
voting separately as a class (A) merge with or into another corporation
unless, (1) the Corporation is the surviving or successor corporation or the
entity formed by such consolidation or merger is organized in the United
States or any state, municipality or other governmental division thereof,
(2) the terms of the Series E Preferred Stock are not changed in any manner
which is materially adverse to the holders thereof and (3) the powers,
special rights and preferences of any securities into which the Series E
Preferred Stock is converted in such transaction are substantially the same
as the powers, special rights and preferences of the Series E Preferred
Stock or (B) issue any class or series of stock of the Corporation ranking
senior to or equally with the Series E Preferred Stock as to distribution of
assets upon Liquidation other than 4,000 shares of Series C, and 4,000
shares of Series D. No vote or consent of the holders of the Series E
Preferred Stock shall be required in respect of any transaction enumerated
in this paragraph if at or prior to the time any such transaction is to take
effect, provision is made for the redemption or other retirement of the
Series E Preferred Stock at the time outstanding, the consent of which would
otherwise be required and such redemption or retirement is made in
accordance herewith.
(f) Optional Redemption. At the option of the Corporation, by vote of
the Board of Directors, the Series E Preferred Stock may be redeemed in
whole or in part at any time and from time to time, at the prices per share
set forth below (the "Redemption Prices"):
If redeemed during the following periods the Redemption Prices shall be as
follows:
October 1, 1999 - December 31, 1999, $1,340.40
Thereafter, the Redemption Price will increase $20.83 as of the first day of
each successive calendar quarter.
<PAGE >
In the event that fewer than all of the outstanding shares of Series E
Preferred Stock are to be redeemed at any one time, the shares so to be
redeemed shall be se1ected by lot or pro rata as determined by the
Corporation. The Corporation shall cause a notice to be mailed, first class
postage prepaid, at least 13 days, but not more than 90 days, prior to the
date fixed for redemption, to each holder of record of shares of Series E
Preferred Stock. Such notice shall be mailed to such record holders at
their respective addresses as they shall appear upon the books of the
Corporation and shall set forth the date of such redemption and the place
for surrender of certificates for shares to be redeemed.
If such notice of redemption shall have been duly given and if on or before
the redemption date specified in such notice there shall have been deposited
with a bank or trust company, having capital surplus and undivided profits
of at least $50,000,000, in trust for the account of the holders of the
shares so called for redemption, funds in an amount equal to the Redemption
Price applicable to the shares to be redeemed at the date fixed for such
redemption, together with irrevocable instruments and authority to such bank
or trust company to redeem such shares on or after the date of such deposit
upon surrender of the certificates therefor, then upon the making of such
deposit in trust the shares with respect to which such deposit shall have
been made shall no longer be deemed to be outstanding. All rights with
respect to such shares shall forthwith terminate except only (i) the rights,
if any, under Section (g)(iii) of this Certificate and (ii) the right to
receive forthwith from and after the date of such deposit the Redemption
Price, without interest.
If such notice of redemption shall have been duly given and if no such
deposit shall have been made, then upon the date fixed for redemption,
unless default shall be made in providing funds at the time and place
specified for the payment of the Redemption Price, the shares so called for
redemption shall no longer be deemed to be outstanding, and all rights with
respect to such shares shall forthwith terminate, except only the right to
receive the Redemption Price, without interest.
Any interest accrued on funds so deposited in trust shall belong to the
Corporation and be paid to it from time to time. All funds deposited in
accordance with this Section (f) which shall remain unclaimed by the holders
of shares called for redemption at the end of one year after the redemption
date shall be returned by such bank or trust company to the Corporation,
after which the holders of such shares shall look only to the Corporation
for the payment of such unclaimed amounts, without interest.
In case fewer than all of the shares represented by any certificate are
redeemed, a new certificate representing the unredeemed shares shall be
issued to the surrendering holder at the expense of the Corporation.
(g) Conversion. Holders of Series E Preferred Stock shall have the
right to convert their shares at any time, subject to the following:
(i) each share of Series E Preferred Stock shall be convertible, at
the option of the holder thereof, into that number of fully paid and non-
assessable shares of Common Stock equal to (1) the then applicable
Redemption Price for such shares of Series E Preferred Stock divided by (2)
0.75 multiplied by the Average Market Price (as defined below) on the Date
of Conversion (as defined below).
(ii) on the first business day following the date that at least
3,000 shares of Series E Preferred Stock have been converted into Common
Stock, each then outstanding share of Series E Preferred Stock shall be
automatically converted into that number of fully paid and non-assessable
shares of Common Stock equal to (1) the then applicable Redemption Price for
such shares of Series E Preferred Stock divided by (2) 0.75 multiplied by
the Average Market Price on the Date of Conversion.
(iii) Notwithstanding anything to the contrary contained herein, if
any shares of Series E Preferred Stock shall be called for redemption, the
right of conversion, if any, as to the shares called for redemption shall
expire at the close of business on the third business day preceding the date
fixed for redemption thereof unless default shall be made in payment of the
Redemption Price with respect to such shares, notwithstanding any earlier
deposit by the Corporation of funds reserved for such redemption.
<PAGE >
(iv) Upon any conversion of shares of Series E Preferred Stock, the
holders thereof shall not be entitled to receive any accumulated, accrued or
unpaid dividends in respect of the shares surrendered for conversion or the
shares of Common Stock issued on conversion thereof.
(v) Each holder of shares of Series E Preferred Stock desiring to
exercise his right of conversion shall deliver written notice of his
election to convert, stating the names and addresses of the persons to whom
the Common Stock is to be issued, and the number (in whole shares) of shares
to be converted, and shall surrender the certificate or certificates for
such shares, duly endorsed or accompanied by proper instruments of transfer
(unless such endorsement or instruments be waived by the Corporation) to the
Corporation during usual business hours at the office of the Transfer Agent
of the Corporation for the transfer of its Common Stock in New York, New
York (or such other place as may be designated by the Corporation upon
written notice to all holders of Series E Preferred Stock). Upon receipt by
the Corporation of any such notice of election to convert shares of Series E
Preferred Stock, and upon surrender of the certificate or certificates
therefor, the Corporation shall execute and deliver, as soon as practicable,
to the converting holder, or to his nominee or nominees, a certificate or
certificates for the number of shares of Common Stock resulting from such
conversion, together with any cash adjustment in lieu of fractional shares
as hereinafter provided. For all purposes, the rights of a converting
holder, as such, shall cease, and the person or persons in whose name or
names the certificate or certificates for Common Stock issuable upon such
conversion are to be issued shall be deemed to have become the record holder
or holders of such Common Stock at the close of business on the day (the
"Date of Conversion") on which delivery of such notice or the surrender of
the certificate or certificates for such shares (whichever shall later
occur) shall be made.
(vi) The Corporation shall not be required to issue fractional
shares of Common Stock upon conversion of shares of Series E Preferred
Stock. If more than one share of Series E Preferred Stock shall be
surrendered for conversion at one time by the same holder, the number of
full shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares so surrendered. If
any fractional interest in a share of Common Stock would be deliverable upon
the conversion of any shares, the Corporation may, in lieu of delivering the
fractional share therefor, make a cash adjustment in respect of such
fraction in an amount equal to the same fraction of the Current Market Price
(as defined below) of one share of the Common Stock of the Corporation on
the last business day before the Date of Conversion. The "Current Market
Price" on any given day shall be (i) if the Common Stock of the Corporation
is listed or admitted to unlisted trading privileges on a National
Securities Exchange (defined as any exchange registered with the Securities
and Exchange Commission as a "national securities exchange" under the
Securities Exchange Act of 1934), the last sales price of the shares of
Common Stock of the Corporation on the National Securities Exchange in or
nearest the City of New York on which the shares of Common Stock of the
Corporation shall be listed or admitted to unlisted trading privileges (or
the quoted closing bid if there be no sales on such Exchange) on such day,
(ii) if the Common Stock of the Corporation is included in the National
Market System ("NMS") of The NASDAQ Stock Market or on NASDAQ, the last
sales price of the shares of Common Stock of the Corporation in the NMS of
The NASDAQ Stock Market or on NASDAQ, as the case may be (or the quoted
closing bid if there be no sale on the NMS or on NASDAQ) on such day, or
(iii) if the Common Stock of the Corporation is not so listed, admitted or
included, the mean between the high and low bid prices of the shares of
Common Stock of the Corporation in the over-the-counter market on such day
as reported by National Quotation Bureau Incorporated, or similar
organization designated by the Corporation, or if not so available in such
manner, as shall be determined by the Corporation, which determination shall
be conclusive.
(vii) The "Average Market Price" at any date shall be deemed to be
the average of the Current Market Prices for the 10 consecutive business
days prior to such date; provided, however, that if the record date or
payment date for a stock split or stock combination occurs during such 10
day period, the Average Market Price for the business days prior to such
record date or payment date shall be appropriately adjusted.
(viii) In case the Corporation shall (i) effect any capital
reorganization or reclassification of its Common Stock (except a change in
par value, or from par value to no par value or from no par value to par
value or as a result of a subdivision, combination or stock dividend), or
(ii) consolidate or merge with or
<PAGE >
into any other corporation (other than a merger in which the Corporation is
the surviving corporation and each share of Common Stock outstanding
immediately prior to such merger is to remain outstanding immediately after
such merger), lawful provision shall be made as part of the terms of such
transaction whereby the holders of shares of Series E Preferred Stock shall,
if entitled to convert such shares at any time after the consummation of
such transaction, receive upon conversion thereof in lieu of each share of
Common Stock issuable upon conversion of such shares prior to such
consummation the same kind and amount of stock (or other securities, cash or
property, if any) as may be issuable or distributable in connection with
such transaction with respect to each outstanding share of Common Stock,
subject to appropriate adjustments for subsequent stock splits, stock
combinations, reclassifications, capital reorganizations, consolidations or
mergers.
(h) Other Rights. The holders of the Series E Preferred Stock shall not
have any other preferences or special rights.
