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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
UnitedGlobalCom, Inc.
(Exact name of registrant as specified in its charter)
Delaware 84-1116217
(State of incorporation or organization) (IRS Employer
Identification No.)
4643 South Ulster Street, Suite 1300
Denver, Colorado 80237
(Address of principal executive offices) (Zip Code)
If this Form relates to the registration of a class of debt securities and is to
become effective pursuant to General Instruction A.(c)(1), please check the
following box. [ ]
If this Form relates to the registration of a class of debt securities and is to
become effective simultaneous with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [ ]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered: each class is to be registered:
None None
Securities to be registered pursuant to Section 12(g) of the Act:
7% Series D Senior Cumulative Convertible Preferred Stock,
par value $.01 per share
(Each share represented by 20 Depositary Shares)
(Title of Class)
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Item 1. Description of Registrant's Securities to be Registered.
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The Registrant's prospectus relating to the proposed offering of the 7%
Series D Senior Cumulative Convertible Preferred Stock and the Depositary
Shares, dated November 30, 1999, forming a part of the Registrant's Registration
Statement on Form S-3 (File No. 333-91857) under the Securities Act of 1933, as
amended (the "Securities Act") (such Registration Statement constituting a post-
effective amendment to the Registrant's Registration Statement on Form S-3 (File
No. 333-90997) under the Securities Act pursuant to Rule 429 under the
Securities Act), is incorporated herein by reference. The Registrant's
prospectus supplement relating to the proposed offering of the 7% Series D
Senior Cumulative Convertible Preferred Stock and the Depositary Shares, to be
subsequently filed by the Registrant pursuant to Rule 424(b) under the
Securities Act, is also incorporated herein by reference.
Item 2. Exhibits.
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Listed below are all exhibits filed as a part of this registration
statement:
I. 1.1 Specimen of Certificate for the 7% Series D Senior Cumulative
Convertible Preferred Stock.
1.2 Certificate of Designations for the 7% Series D Senior Cumulative
Convertible Preferred Stock.
1.3 Form of Deposit Agreement among the Registrant, Firstar Bank, N.A. and
the holders of the depositary receipts described therein. (1)
2. Constituent instruments defining the rights of the holders of the 7%
Series D Senior Cumulative Convertible Preferred Stock and the
Depositary Shares:
a. Second Restated Certificate of Incorporation of the Registrant.
(2)
b. Certificate of Amendment to the Certificate of Incorporation of
the Registrant. (3)
b. The Restated Bylaws of the Registrant. (2)
II 1-6. Not Applicable
(1) Incorporated by reference from the Registrant's Form 8-K (File No. 0-21974)
dated July 6, 1999.
(2) Incorporated by reference from Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (File No. 33-61376) filed with the
Commission on June 23, 1993.
(3) Incorporated by reference from the Registrant's Form 10-K for the year
ended February 28, 1994 (File No. 0-21974).
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
UNITEDGLOBALCOM, INC.
By: /s/ Frederick G. Westerman III
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Name: Frederick G. Westerman III
Title: Chief Financial Officer
Date: December 1, 1999
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EXHIBIT 1.1
Incorporated under the laws of the State of
DELAWARE
NUMBER SHARES
PD-__ *Specimen*
UNITEDGLOBALCOM, INC.
7% SERIES D SENIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK, $.01 PAR VALUE
This Certifies that _______________________________________________is
the owner of ___________________ Shares of the Capital Stock of UnitedGlobalCom,
Inc. transferable only on the books of the Corporation by the holder hereof in
person or by Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate
to be signed by its duly authorized officers and its Corporate Seal to be
hereunto affixed this ______ day of __________ A.D. 19___
_________________________ ________________________
Secretary Senior Vice President
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[REVERSE OF CERTIFICATE]
CERTIFICATE
FOR
Shares
of
Capital Stock
Issued To
______________
Dated
____________________
For Value Received, ____________ hereby sell, assign and transfer
unto ________________________________ Shares of the Capital Stock represented
by the within Certificate, and do hereby irrevocably constitute and appoint
_____________________________ Attorney to transfer the said Stock on the books
of the within named Corporation with full power of substitution in the premises.
Dated ___________________________ 19__
In presence of __________________
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EXHIBIT 1.2
UNITEDGLOBALCOM, INC.
CERTIFICATE OF DESIGNATION
establishing the
Voting Powers, Designations, Preferences, Limitations,
Restrictions, and Relative Rights of
7% SERIES D SENIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK
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Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
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UNITEDGLOBALCOM, INC., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Issuer"), does hereby
certify that (i) pursuant to authority conferred upon the Board of Directors of
the Issuer by its Second Amended and Restated Certificate of Incorporation, as
amended to date, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the Board of Directors authorized the
creation and issuance of the Issuer's 7% Series D Senior Cumulative Convertible
Preferred Stock (the "Preferred Stock") and appointed a committee to fix the
designations, preferences and rights of such Preferred Stock, and (ii) the
following resolution fixing the designations, preferences and rights of such
Preferred Stock, which was duly adopted by such Committee of the Board of
Directors, on December 1, 1999, which resolution
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remains in full force and effect. Certain capitalized terms used
herein are defined in Article 9.
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Issuer by the provisions of
Second Amended and Restated Certificate of Incorporation, as amended
from time to time (the "Certificate of Incorporation"), and pursuant
to Section 151(g) of the General Corporation Laws of the State of
Delaware, there be from the 3,000,000 shares of Preferred Stock, $0.01
par value, of the Issuer, authorized to be issued pursuant to the
Certificate of Incorporation, a series of Preferred Stock, consisting
of 287,500 shares of 7% Series D Senior Cumulative Convertible
Preferred Stock (referred to herein as the "Preferred Stock"), having
the number of shares and, to the extent that the designations, powers,
preferences and relative and other special rights and the
qualifications, limitations and restrictions of such Preferred Stock
are not stated and expressed in the Certificate of Incorporation, the
powers, preferences and relative and other special rights and the
qualifications, limitations and restrictions thereof, as follows:
1. Designation and Number of Shares
1.1 The series will be known as the 7% Series D Senior Cumulative
Convertible Preferred Stock.
1.2 The Preferred Stock will be a series consisting of 287,500 shares
of the authorized but unissued preferred stock of the Issuer.
2. Dividends
2.1 Holders of Preferred Stock will be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available therefor,
dividends on each outstanding share of Preferred Stock, payable quarterly in
arrears at a rate per annum equal to 7% of the liquidation preference per share.
(a) All dividends will be cumulative, whether or not earned or
declared, on a quarterly basis on March 31, June 30, September 30 and December
31 of each year (each such date being referred to herein as a "Dividend Payment
Date"),
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commencing December 31, 1999. Dividends will accumulate on a day to day basis
from October 1, 2000. Each distribution in the form of a dividend shall be
payable in arrears to Holders of record as they appear on the stock books of the
Issuer on each record date as established by the Board of Directors of the
Issuer (the "Dividend Payment Record Date") not more than 60 nor less than ten
days preceding a Dividend Payment Date.
(i) Dividends payable on the Preferred Stock for each full dividend
period will be computed by dividing the annual dividend rate by four.
Dividends payable on the Preferred Stock for any period less than a full
dividend period will be computed on the basis of a 360-day year consisting
of twelve 30-day months.
(ii) The Preferred Stock will not be entitled to any dividends,
whether payable in cash, property or securities, in excess of the full
cumulative dividends.
(iii) No interest, or sum of money in lieu of interest, will be
payable in respect of any accumulated and unpaid dividends which may be in
arrears.
(b) Dividends, to the extent declared by the Issuer's Board
of Directors may, at the option of the Issuer, be paid in cash, by delivery of
fully paid and nonassessable shares of Common Stock, or a combination thereof.
If the Issuer elects to pay dividends in shares of Common Stock, the number of
shares of Common Stock to be distributed will be calculated by dividing such
payment by the Market Value Amount as of the Dividend Payment Record Date.
2.2 (a) No dividends or other distributions (other than a dividend or
distribution in Junior Securities) may be declared, made or paid or funds set
apart for payment on the Junior Securities or Parity Securities, and no Junior
Securities or any Parity Securities, including the Preferred Stock, may be
repurchased, redeemed or otherwise acquired for any consideration (or any money
paid to or made available for a sinking fund for the redemption of any shares of
any such stock) by the Issuer (except by conversion into or exchange for Junior
Securities and in the case that monies for such dividends, distributions,
redemptions, purchases, or other acquisitions are derived from the proceeds of a
substantially concurrent offering of such securities), unless full cumulative
dividends shall have been or contemporaneously are paid or declared and a sum
sufficient for the payment thereof is set apart for such
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payment on all outstanding shares of Preferred Stock for all Dividend Payment
Dates on or prior to such declaration, payment, redemption, purchase or
acquisition.
(b) Notwithstanding the foregoing, if full dividends have not been
declared and paid or set apart on the Preferred Stock and any other Parity
Securities, dividends may be declared and paid on the Preferred Stock and such
other Parity Securities so long as the dividends are declared and paid pro rata
so that the amounts of dividends declared per share on the Preferred Stock and
such other Parity Securities will in all cases bear to each other the same ratio
that accrued and unpaid dividends per share on the shares of the Preferred Stock
and such other Parity Securities bear to each other; provided that if such
dividends are paid in cash on the other Parity Securities, dividends will also
be paid in cash on the Preferred Stock.
(c)(i) The Holders of shares of the Preferred Stock at the close
of business on a Dividend Payment Record Date will be entitled to receive the
dividend payment on those shares (except that Holders of shares called for
redemption or conversion on a Redemption Date or Conversion Date between the
record date and a date which is two days after the Dividend Payment Date will be
entitled to receive such dividend on such Redemption Date as indicated in
Section 5.1 hereof or such Conversion Date as indicated in Section 4 hereof, as
applicable) on the corresponding Dividend Payment Date notwithstanding the
subsequent conversion thereof or the Issuer's default in payment of the dividend
due on that Dividend Payment Date.
(ii) Except as provided in clause (i) of this Section 2.2(c) and in
Section 4.3, the Issuer shall make no payment or allowance for unpaid dividends,
whether or not in arrears, on converted shares or for dividends on the shares of
Common Stock issued upon conversion.
3. Ranking
3.1 The Preferred Stock will, with respect to dividend distributions and
distributions upon the liquidation, winding up or dissolution of the Issuer,
rank:
(a) senior to all classes of Common Stock and each other class of
Capital Stock or series of preferred stock issued by the Issuer, which is
established after the date of this Certificate of Designation, the terms of
which do not expressly provide that such class or series will rank senior to or
on a parity with the Preferred Stock as to dividend distributions and
distributions upon the liquidation, winding up
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or dissolution of the Issuer (collectively, with the Common Stock, referred to
as the "Junior Securities");
(b) on a parity with the Convertible Preferred Stock, Series A, par
value $0.01 per share, the Convertible Preferred Stock, Series B, par value
$0.01 per share, the Convertible Preferred Stock, Series C, par value $0.01 per
share and any class of Capital Stock or series of preferred stock issued by the
Issuer, which is established after the date of this Certificate of Designation
by the Board of Directors, the terms of which expressly provide that such class
or series will rank on a parity with the Preferred Stock as to dividend
distributions and distributions upon the liquidation, winding up or dissolution
of the Issuer (collectively referred to as "Parity Securities"); and
(c) subject to approval from holders of at least 66 2/3% of the
outstanding shares of Preferred Stock, junior to each class of Capital Stock or
series of preferred stock issued by the Issuer, which is established after the
date of this Certificate of Designation by the Board of Directors, the terms of
which expressly provide that such class or series will rank senior to the
Preferred Stock as to dividend distributions and distributions upon liquidation,
winding-up or dissolution of the Issuer (collectively referred to as "Senior
Securities").
3.2 Except as otherwise provided herein (including, without
limitation, Section 8.3 hereof), the Issuer is entitled to amend its Certificate
of Incorporation to authorize one or more additional series of preferred stock,
file certificates of designation, and issue without restriction from time to
time, any series of Junior Securities, Parity Securities, or Senior Securities.
4. Conversion
4.1(a) Each Holder of Preferred Stock shall have the right, at its option,
at any time and from time to time to convert, subject to the terms and
provisions of this Article 4, any or all of such Holder's shares of Preferred
Stock. In such case, the shares of Preferred Stock shall be converted into such
whole number of fully paid and nonassessable shares of Common Stock as is equal,
subject to Section 4.6, to:
the product of the number of shares of Preferred Stock being so
converted multiplied by
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the quotient of (i) the Liquidation Preference divided by (ii) the
Conversion Price then in effect,
except that with respect to any share which shall be called for redemption such
right shall terminate at the close of business on the second Business Day prior
to the Redemption Date unless the Issuer shall default in making the payment due
upon redemption thereof.
(b) The conversion right of a Holder of Preferred Stock shall be
exercised by the Holder by the surrender of the certificate representing shares
to be converted to the Issuer or to the Transfer Agent accompanied by the
Conversion Notice.
(i) Immediately prior to the close of business on the Conversion
Date, each converting Holder of Preferred Stock shall be deemed to be the
Holder of record of Common Stock issuable upon conversion of such Holder's
Preferred Stock notwithstanding that the share register of the Issuer shall
then be closed or that certificates representing such Common Stock shall
not then be actually delivered to such person.
(ii) Upon notice from the Issuer, each Holder of Preferred Stock so
converted shall promptly surrender to the Issuer or the Transfer Agent
certificates representing the shares so converted (if not previously
delivered), duly endorsed in blank or accompanied by proper instruments of
transfer.
(iii) On any Conversion Date, all rights with respect to the shares of
Preferred Stock so converted, including the rights, if any, to receive
notices, will terminate, except the rights of Holders thereof to: (1)
receive certificates for the number of shares of Common Stock into which
such shares of Preferred Stock have been converted; (2) receive the payment
in cash or shares of Common Stock of any accumulated and unpaid dividends
accrued thereon pursuant to Section 4.3 hereof; and (3) exercise the rights
to which they are entitled as Holders of Common Stock.
(c) If the Conversion Date shall not be a Business Day, then such
conversion right shall be deemed exercised on the next Business Day.
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(d) When shares of Preferred Stock are converted pursuant to this
Section 4.1, all accumulated and unpaid dividends, including dividends payable
on the Conversion Date pursuant to Section 2.2(c)(i), or liquidated damages
(whether or not in arrears or currently payable) on the Preferred Stock so
converted to (and not including) the Conversion Date shall immediately be due
and payable, at the Issuer's option:
(i) in cash;
(ii) in the whole number of fully paid and nonassessable shares of
Common Stock equal to the quotient of (i) the amount of accumulated and
unpaid dividends payable to the Holders of Preferred Stock hereunder,
divided by (ii) the Market Value Amount for the period ending on the
Conversion Date, plus cash for any fractional shares subject to Section
12.3 hereof; or
(iii) a combination thereof.
4.2 (a) The Company shall have the right, at its option, to convert
all (but not less than all) of the shares of Preferred Stock into shares of
Common Stock at the then Conversion Price, together with payment equal to the
sum of all accumulated but unpaid dividends or liquidated damages, if any,
through the conversion date, if, on or after, December 31, 2002, the Closing
Price of the Common Stock has equaled or exceeded 130% of the Conversion Price
for at least 20 Trading Days within any 30 consecutive Trading Days ending
within 5 days of the date on which notice of the exercise of the conversion
option is given. The Company may effect such payment, at its option, in cash or
by delivery of fully paid nonassessable shares of Common Stock by issuing that
whole number of shares of Common Stock equal to the amount of such payment
divided by the Market Value Amount, as of the conversion date or by any
combination thereof.
(b) The Company shall also have the right, at its option, to convert
all (but not less than all) of such shares of Preferred Stock into shares of
Common Stock at the then Conversion Price, plus accumulated and unpaid dividends
or liquidated damages, if any, whether or not declared, to the conversion date
(the "Provisional Conversion Date"), on or after June 30, 2001 (the "Provisional
Conversion"), if the closing price of the Common Stock has equaled or exceeded
150% of the Conversion Price for at least 20 Trading Days within any 30
consecutive Trading Day period (which 30 consecutive Trading Day period shall
end no earlier
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than June 30, 2001) ending within 5 days of the date on which notice of the
exercise of the conversion option is given. In the event that the Company
undertakes a Provisional Conversion, holders of Preferred Stock to whom the
Company shall give notice of such Provisional Conversion, will, in addition to
the shares of Common Stock which such holders will receive pursuant to the
preceding sentence, also receive a payment (the "Additional Payment") in an
amount equal to the present value of the aggregate amount of the dividends that
would thereafter have been payable on the Preferred Stock (whether or not
declared) from the Provisional Conversion Date to December 31, 2002 (the
"Additional Period"). The present value shall be calculated using as the
discount rate the bond equivalent yield on U.S. Treasury notes or bills having a
term nearest in length to that of the Additional Period, calculated as of the
day immediately preceding the date on which a notice of Provisional Conversion
is mailed. The Company may effect the payment of accumulated and unpaid
dividends, liquidated damages or Additional Amounts, at its option, in cash or
delivery of fully paid nonassessble shares of Common Stock by issuing that whole
number of shares of Common equal to the amount of such payment divided by the
Market Value Amount as of the conversion date or by any combination thereof.
(c) Notwithstanding the foregoing, the Company may not effect
these conversions into Common Stock at any time unless (i) such shares of Common
Stock are eligible for resale pursuant to Rule 144(k) under the Act, or (ii) a
registration statement relating to the resale of the shares of Common Stock
issuable upon such conversions is effective.
4.3 The Conversion Price shall be subject to adjustment if any
Conversion Price Adjustment Event described in Section 4.3(a) occurs. The
adjustment will be accomplished from time to time as described in Section
4.3(b).
(a) In case the Issuer shall at any time or from time to time:
(i) make any payment of a dividend (or other distribution) payable
in shares of Common Stock to all Holders of any class of Capital Stock of
the Issuer (other than the issuance of shares of Common Stock in connection
with the payment of dividends on, redemption of or the conversion of the
Preferred Stock or any preferred stock pari passu to the Preferred Stock);
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(ii) make any issuance to all Holders of shares of Common Stock of
rights, options or warrants entitling them to subscribe for or purchase
shares of Common Stock or securities convertible into or exchangeable for
shares of Common Stock at less than Market Value as of the date of
conversion or exchange; provided, however, that no adjustment shall be made
with respect to such a distribution if the Holder of shares of Preferred
Stock would be entitled to receive such rights, options or warrants upon
conversion at any time of shares of Preferred Stock into Common Stock, and
provided further, that if such rights, options or warrants are only
exercisable upon the occurrence of certain triggering events, then the
Conversion Price will not be adjusted until such triggering events occur;
(iii) make any subdivision, combination or reclassification of any
class of Common Stock;
(iv) make any distribution consisting exclusively of cash (excluding
any cash distribution upon a merger or consolidation to which Section 4.6
applies) to all Holders of shares of any class of Common Stock (which
distribution is not also being made to the holders of the Preferred Stock
based on the number of shares of Common Stock into which the Preferred
Stock is then convertible) in an aggregate amount that, combined together
with (1) all other such all-cash distributions made within the then-
preceding 12-months in respect of which no adjustment has been made and (2)
any cash and the fair market value of other consideration paid or payable
in respect of any tender offer by the Issuer or any of its Subsidiaries for
shares of Common Stock concluded within the then-preceding 12-months in
respect of which no adjustment has been made, exceeds 12.5% of the Issuer's
Market Capitalization on the record date of such distribution;
(v) completes a tender or exchange offer made by the Issuer or any
of its Subsidiaries for shares of any class of Common Stock that involves
an aggregate consideration that, together with (1) any cash and other
consideration payable in a tender or exchange offer by the Issuer or any of
its Subsidiaries for shares of any class of Common Stock expiring within
the then-preceding 12-months in respect of which no adjustment has been
made and (2) the aggregate
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amount of any such all-cash distributions referred to in (iv) above to all
Holders of shares of any class of Common Stock within the then-preceding
12-months in respect of which no adjustment has been made, exceeds 12.5% of
the Issuer's Market Capitalization just prior to the expiration of such
tender offer; or
(vi) makes a distribution to all Holders of Common Stock (which
distribution is not also being made to the holders of the Preferred Stock
based on the number of shares of Common Stock into which the Preferred
Stock is then convertible unless the Common Stock does not share pro rata
in such distribution) consisting of evidences of indebtedness, shares of
Capital Stock other than Common Stock of the Issuer or assets (including
securities, but excluding those dividends, rights, options, warrants and
distributions referred to above).
(b) If any Conversion Price Adjustment Event occurs, the Issuer will
calculate the adjustment to the Conversion Price as follows for each specific
event. In the following descriptions, the variables have the following
definitions:
C equals the total number of shares of Preferred Stock outstanding at the
time of the Conversion Price Adjustment Event;
U equals the number of shares of Common Stock underlying rights, options, or
warrants issued entitling the holders to subscribe for or purchase shares
of Common Stock or securities convertible into or exchangeable for shares
of Common Stock issued in the Conversion Price Adjustment Event;
X equals the total number of shares of Common Stock outstanding immediately
prior to the Conversion Price Adjustment Event (not including unexercised
options, warrants, or rights);
Y equals the total number of shares of Common Stock outstanding immediately
after the Conversion Price Adjustment Event (not including unexercised
options, warrants, or rights);
Z equals the total number of shares of Common Stock outstanding at the time
of the Conversion Price Adjustment Event;
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Cash equals any distribution consisting exclusively of cash (excluding any
cash distributed upon a merger or consolidation to which Section 4.6
applies) to all Holders of shares of Common Stock in an aggregate amount
that, combined together with (1) all other such all-cash distributions
made within the then-preceding 12-months in respect of which no
adjustment has been made and (2) any cash and the fair market value of
other consideration paid or payable in respect of any tender offer by the
Issuer or any of its Subsidiaries for shares of Common Stock concluded
within the then-preceding 12 months in respect of which no adjustment has
been made pursuant to Section 4.3(a)(iv);
ExP equals the exercise or other consideration to be paid by the Holder upon
the exercise of or conversion of "U";
MC equals Market Capitalization;
MV equals Market Value per share of the Common Stock as of the date of
conversion or exchange of "U";
#Sh equals the number of shares of Common Stock receiving the distribution
contemplated in Section 4.3(a)(vi) or subject to the tender offer
contemplated in Section 4.3(a)(v);
TOff equals the aggregate consideration that, together with (1) any cash and
other consideration payable in a tender or exchange offer by the Issuer
or any of its Subsidiaries for shares of Common Stock expiring within the
then-preceding 12-months in respect of which no adjustment has been made
and (2) the aggregate amount of any such all-cash distributions referred
to in Section 4.3(a)(iv) to all Holders of shares of Common Stock within
the then-preceding 12-months in respect of which no adjustment has been
made;
TOff/S equals the tender offer price, per share;
TPur equals the number of shares purchased in the tender offer;
Value equals the aggregate fair market value of the distribution described in
Section 4.3(a)(vi), as determined in good faith by the Board of Directors
of the Issuer;
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CP equals the Conversion Price immediately prior to the Conversion Price
Adjustment Event;
ACP equals the Conversion Price immediately after the Conversion Price
Adjustment Event;
(i) In the case of an event described in Sections 4.3(a)(i) or
4.3(a)(iii), the Conversion Price in effect immediately before such event
shall be adjusted pursuant to the following formula: X/Y multiplied by
CP=ACP./1/
(ii) In the case of an event described in section 4.3(a)(ii), the
Conversion Price in effect immediately before such event shall be adjusted
pursuant to the following formula: X/(X+U ((MV-ExP)/MV)) multiplied by
CP=ACP./2/ If any options, warrants, convertible securities, or other
rights of the nature described in Section 4.3(a)(ii) ("Rights") expire
without exercise or conversion, the Conversion Price will be readjusted to
the Conversion Price which would otherwise be in effect had the adjustment
made upon the issuance of such Rights had been made on the basis of
delivery of only the number of shares of Common Stock actually delivered
upon the exercise or conversion of such Rights.
(iii) In the case of an event described in Section 4.3(a)(iv), the
Conversion Price in effect immediately before such event shall be adjusted
pursuant to the following formula: CP-((Cash-12.5% MC)/C)=ACP./3/
- -------------
/1/For example, where X=12 million shares, and 500,000 shares are being
issued in the Conversion Price Adjustment Event (Y=12,500,000), and CP is
$32.00, the Adjusted Conversion Price (ACP) is $30.72.
/2/For example, where X=12 million shares, and U=500,000 shares, MV is $40,
ExP is $35, and CP is $32.00, the Adjusted Conversion Price (ACP) is $31.83. If
ExP is $0, the Adjusted Conversion Price (ACP) is $30.72.
/3/For example, where Cash distributed equals $20,000,000, Market
Capitalization equals $100,000,000 (12.5% MC=$12,500,000), CP equals $32.00 and
(continued...)
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There will be no adjustment to the Conversion Price pursuant to Section
4.4(a)(iv) if (Cash-12.5% MC) is less than or equal to zero.
(iv) In the case of an event described in Section 4.4(a)(v), and if
the tender offer price or exchange offer price per share is greater than
Market Value, the Conversion Price in effect immediately before such event
shall be adjusted pursuant to the following formula: CP-((TPur multiplied
by (TOff/S-MV))/(#Sh-TPur))=ACP./4/
There will be no adjustment to the Conversion Price pursuant to Clause
4.4(a)(v) if TOff/S is less than or equal to Market Value or if TPur
multiplied by TOff/S is less than 12.5% of MC.
(v) In the case of an event described in Section 4.4(a)(vi), the
Conversion Price in effect immediately before such event shall be adjusted
pursuant to the following formula: CP-(Value/#Sh)=ACP./5/
An adjustment made pursuant to this Section 4.4 shall become effective
retroactively: (x) in the case of a Conversion Price Adjustment Event described
in Section 4.4(a)(i), (ii), (iv), or (vi), immediately following the close of
business on the record date for the determination of Holders of Common Stock
entitled to participate in such event; or (y) in the case of a Conversion Price
Adjustment Event described in Section 4.4(a)(ii), the close of business on the
day upon which such corporate action becomes effective; or (z) in the case of a
Conversion Price Adjustment Event
- -------------
/3/(...continued)
there are 2,000,000 shares of Preferred Stock outstanding (C), the Adjusted
Conversion Price (ACP) is $28.25.
/4/For example, where TOff/S is $45.00 at a time when MV is $35, CP equals
$32.00, 1,000,000 shares were purchased in the tender offer (TPur), and there
were 12,000,000 shares of the class outstanding (#SH), the Adjusted Conversion
Price (ACP) is $31.09.
/5/For example, where CP is $32.00, Value equals $1,500,000, and there were
12,000,000 shares of the class outstanding (#SH), ACP is $31.88.
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described in Section 4.4(a)(v), the close of business on the day of the
completion of such tender offer or exchange offer.
(c) Notwithstanding anything herein to the contrary, no adjustment
under this Section 4.4 need be made to the Conversion Price unless such
adjustment would require an increase or decrease of at least 1% of the
Conversion Price then in effect. Any lesser adjustment shall be carried forward
and shall be made at the time, if ever, of and together with the next subsequent
adjustment, which, together with any adjustment or adjustments so carried
forward, shall amount to an increase or decrease of at least 1% of such
Conversion Price.
(d) Notwithstanding anything to the contrary contained in this
Certificate of Designation, no Conversion Price adjustment will be made as a
result of the issuance of Common Stock on conversion of the Preferred Stock.
(e) Each event requiring adjustment to the Conversion Price shall
require only a single adjustment even though more than one of the adjustment
clauses set forth in Section 4.4(a), Section 4.5 or Section 4.6, may be
applicable to such Conversion Price Adjustment Event.
(f) If the Issuer shall fix a record date for the Holders of any class
of its Capital Stock for the purpose of entitling them to receive a dividend or
other distribution which would otherwise constitute a Conversion Price
Adjustment Event, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the Conversion Price then in
effect shall be required by reason of the fixing of such record date.
(g) Upon any increase or decrease in the Conversion Price, then, and
in each such case, the Issuer promptly shall deliver to each registered Holder
of Preferred Stock a certificate signed by an authorized officer of the Issuer,
setting forth in reasonable detail the event requiring the adjustment and the
method by which such adjustment was calculated and specifying the increased or
decreased Conversion Price then in effect following such adjustment.
(h) The Issuer reserves the right to make such reductions in the
Conversion Price in addition to those required in the foregoing provisions as it
considers to be advisable in order that any event treated for Federal income tax
purposes as a dividend of stock or stock rights will not be taxable to the
recipients.
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In the event the Issuer elects to make such a reduction in the Conversion Price,
the Issuer will comply with the requirements of Rule 14e-1 under the 1934 Act,
and any other securities laws and regulations thereunder if and to the extent
that such laws and regulations are applicable in connection with the reduction
of the Conversion Price.
4.4 In the event the Issuer distributes rights or warrants (other than
those referred to in Section 4.4(a)(ii)) pro rata to all Holders of shares of
Common Stock, so long as any such rights or warrants have not expired or been
redeemed by the Issuer, the Holders of any Preferred Stock surrendered for
conversion will, in the discretion of the Issuer and subject to the last
paragraph of this Section 4.5, be entitled to receive upon such conversion, in
addition to the shares of Common Stock then issuable upon such conversion (the
"Conversion Shares"), a number of rights or warrants to be determined as
follows:
(a) if such conversion occurs on or prior to the date for the
distribution to Holders of rights or warrants of separate certificates
evidencing such rights or warrants (the "Distribution Date"), the same number of
rights or warrants to which a Holder of a number of shares of Common Stock equal
to the number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions applicable to the rights or warrants,
and
(b) if such conversion occurs after such Distribution Date, the same
number of rights or warrants to which a Holder of the number of shares of Common
Stock of the Issuer into which such Preferred Stock was convertible immediately
prior to such Distribution Date would have been entitled on such Distribution
Date in accordance with the terms and provisions of and applicable to the rights
or warrants.
In the event the Holders of the Preferred Stock are not entitled to
receive such rights or warrants pursuant to Section 4.4(a) or 4.4(b), the
Conversion Price will be subject to adjustment upon any declaration or
distribution of such rights or warrants pursuant to Section 4.4, above.
4.5 (a) In case of:
(i) any capital reorganization or reclassification or other change of
outstanding shares of Common Stock (other than a
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<PAGE>
change in par value, or from par value to no par value, or from no par
value to par value), or
(ii) any consolidation or merger of the Issuer with or into another
Person (other than a consolidation or merger in which the Issuer is the
resulting or surviving Person and which does not result in any
reclassification or change of outstanding Common Stock), or
(iii) any sale, transfer or other conveyance to another Person of all
or substantially all of the assets of the Issuer computed on a consolidated
basis (other than the sale, transfer, assignment or distribution of shares
of Capital Stock or assets to a Subsidiary)
(any of the events described in Section 4.6(a) being referred to in this Section
4.6 as a "Transaction"), then the adjustment described in Section 4.5(b) will be
made.
(b) Each share of Preferred Stock then outstanding shall, without the
consent of any Holder of Preferred Stock, become convertible only into the kind
and amount of shares of stock or other securities (of the Issuer or another
issuer) or property or cash receivable upon such Transaction by a Holder of the
number of shares of Common Stock into which such share of Preferred Stock could
have been converted immediately prior to such Transaction after giving effect to
any adjustment event, provided, however that the adjustments described in
Section 4.6 may apply upon the occurrence of a Change of Control.
(c) The provisions of this Section 4.5 and any equivalent thereof in
any such certificate similarly shall apply to successive Transactions. The
provisions of this Section 4.5 shall be the sole right of Holders of Preferred
Stock in connection with any Transaction and such Holders shall have no separate
vote thereon.
4.6 (a) Upon a Change of Control, if the Market Value at such time
is less than the Conversion Price, then the Conversion Price will be subject to
a temporary adjustment for a period of 60 days such that the Conversion Price
will be equal to the greater of:
(i) the Market Value on the date on which a Change of Control event
occurs, and
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<PAGE>
(ii) 66.67% of the Market Value as of December 2, 1999.
(b) In lieu of issuing the shares of Common Stock issuable upon
conversion in the event of a Change of Control, the Issuer may, at its option,
make a cash payment equal to the greater 4.6(a)(i) and (ii) above, or any
combination thereof.
(c) In the event of a Change of Control, notice of such Change of Control
shall be given, within five Business Days of the Change of Control Date, by the
Issuer by first-class mail to each record Holder of shares of Preferred Stock,
at such Holder's address as the same appears on the books of the Issuer. Each
such notice shall state: (i) that a Change of Control has occurred; (ii) the
last day on which the Change of Control Option may be exercised (the "Expiration
Date"); (iii) the name and address of the paying agent; and (iv) the procedures
that Holders must follow to exercise the Change of Control Option.
(d) On or before the Expiration Date, each Holder of shares of Preferred
Stock wishing to exercise the Change of Control option shall surrender the
certificate or certificates representing the shares of Preferred Stock to be
converted, in the manner and at the place designated in the notice described in
Section 4.6(c), and on such date the cash or shares of Common Stock due to such
Holder shall be delivered to the person whose name appears on such certificate
or certificates as the owner thereof and each surrendered certificate shall be
returned to authorized but unissued shares. Upon surrender (in accordance with
the notice described in Section 4.6(c) of the certificate or certificates
representing any shares to be so converted (properly endorsed or assigned for
transfer, if the Issuer shall so require and the notice shall so state), such
shares shall be converted by the Issuer at the Conversion Price as adjusted.
(e) The foregoing provisions are not waivable by the Issuer.
4.7 In the case of any distribution by the Issuer to its stockholders of
substantially all of its assets, each Holder of Preferred Stock will participate
pro rata in such distribution based on the number of shares of Common Stock into
which such Holders' shares of Preferred Stock would have been convertible
immediately prior to such distribution, unless the amount of such distribution
would result in a payment less than the Liquidation Preference, in which case
the Liquidation Preference shall be paid.
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<PAGE>
4.8 If, as a result of any Conversion Price Adjustment Event, a Holder
of the Preferred Stock becomes entitled to receive upon conversion shares of two
or more classes of Capital Stock, the Issuer shall determine the reasonable
allocation of the adjusted Conversion Price between the classes of Capital
Stock. After such allocation, the Conversion Price of each class of Capital
Stock shall thereafter be subject to adjustment on terms applicable to the
Preferred Stock in this Article 4.
4.9 The Issuer shall at all times reserve and keep available for
issuance upon the conversion of the Preferred Stock, such number of its
authorized but unissued shares of Common Stock as will from time to time be
sufficient to permit the conversion of all outstanding shares of Preferred
Stock, and shall take all action required to increase the authorized number of
shares of Common Stock if at any time there shall be insufficient authorized
unissued shares of Common Stock to permit such reservation or to permit the
conversion of all outstanding shares of Preferred Stock.
4.10 The issuance or delivery of certificates for Common Stock upon the
conversion of shares of Preferred Stock shall be made without charge to the
converting Holder of shares of Preferred Stock for such certificates or for any
tax in respect of the issuance or delivery of such certificates or the
securities represented thereby, and such certificates shall be issued or
delivered in the respective names of, or in such names as may be directed by,
the Holders of the shares of Preferred Stock converted; provided, however, that
the Issuer shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate in
a name other than that of the Holder of the shares of Preferred Stock converted,
and the Issuer shall not be required to issue or deliver such certificate unless
or until the Person or Persons requesting the issuance or delivery thereof shall
have paid to the Issuer the amount of such tax or shall have established to the
reasonable satisfaction of the Issuer that such tax has been paid.
5. Optional Redemption of Preferred Stock
5.1 (a) Shares of the Preferred Stock will not be redeemable prior to
December 31, 2002.
(b) On or after December 31, 2002, the Preferred Stock may be
redeemed, in whole or in part, at the option of the Issuer, in cash, by delivery
of fully
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<PAGE>
paid and nonassessable shares of Common Stock or a combination thereof, upon
Redemption Notice given not less than 20 days' notice nor more than 60 days'
prior to the Redemption Date, during the 12-month periods commencing on June 30
of the years indicated below, at the following Redemption Prices per share, plus
in each case all accumulated and unpaid dividends to the Redemption Date:
Year Redemption
---- ----------
Price Per Share
---------------
2002............................. $52.00
2003............................. $51.50
2004............................. $51.00
2005............................. $50.50
2006 and thereafter.............. $50.00
(c) In the event that fewer than all the outstanding shares of the
Preferred Stock are to be redeemed, the shares to be redeemed will be determined
pro rata or by lot.
(d) If the Issuer elects to pay the Redemption Price in shares of Common
Stock, the number of shares of Common Stock to be distributed will be calculated
by dividing the aggregate Redemption Price payable to any Holder by the Market
Value Amount (but for purposes of this redemption the period used in calculating
a Market Value shall mean the ten consecutive trading days ending two days
before the Redemption Date) as of the Redemption Notice Date.
(e) From and after the applicable Redemption Date (unless the Issuer
shall be in default of payment of the Redemption Price), dividends on the shares
of the Preferred Stock to be redeemed on such Redemption Date shall cease to
accumulate, such shares shall no longer be deemed to be outstanding, and all
rights of the Holders thereof as stockholders of the Issuer (except the right to
receive the Redemption Price and accumulated dividend amounts and liquidation
penalties, if any through the Redemption Date) will cease.
5.2 If any dividends on the Preferred Stock are in arrears, no shares of
the Preferred Stock will be redeemed unless all dividends in arrears are paid or
all outstanding shares of the Preferred Stock are simultaneously redeemed.
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5.3 In the event the Issuer shall elect to redeem shares of the Preferred
Stock pursuant to Section 5.1 hereof, the Issuer must provide the Holders with
the Redemption Notice as described in Section 5.1(b), and
(a) (i) On or before any Redemption Date, each Holder of shares of
Preferred Stock to be redeemed shall surrender the certificate or certificates
representing such shares of Preferred Stock (properly endorsed or assigned, or
transferred, if the Issuer shall so require and the Redemption Notice shall so
state) to the Issuer or the Redemption Agent (if appointed) in the manner and at
the place designated in the Redemption Notice.
(ii) On the Redemption Date, the Issuer or the Redemption Agent,
as applicable, shall pay or deliver to the Holder whose name appears on such
certificate or certificates as the owner thereof, the full Redemption Price
due such Holder in cash, in fully paid and nonassessable shares of Common
Stock or in a combination thereof.
(iii) The shares represented by each certificate to be surrendered shall
be automatically (and without any further action of the Issuer or the Holder)
canceled as of the Redemption Date whether or not certificates for such shares
are returned to the Issuer and returned to authorized but unissued shares of
preferred stock of no series.
(iv) If fewer than all the shares represented by any such certificate are
to be redeemed, a new certificate shall be issued representing the unredeemed
shares, without cost to the Holder, together with the amount of cash, if any,
in lieu of fractional shares.
(b) If a Redemption Notice shall have been given as provided in Section
5.1, all rights of the Holders thereof as stockholders of the Issuer with
respect to shares so called for redemption (except for the right to receive from
the Issuer the Redemption Price) shall cease either (i) from and after the
Redemption Date (unless the Issuer shall default in the payment of the
Redemption Price, in which case such rights shall not terminate at the
Redemption Date) or (ii) if the Issuer shall so elect and state in the
Redemption Notice, from and after the time and date (which date shall be the
Redemption Date or an earlier date not less than 20 days after the date of
mailing of the Redemption Notice) on which the Issuer shall irrevocably
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<PAGE>
deposit in trust for the Holders of the shares to be redeemed with a designated
Redemption Agent as paying agent sufficient to pay at the office of such paying
agent, on the Redemption Date, the Redemption Price. Any money or shares of
Common Stock so deposited with such Redemption Agent which shall not be required
for such redemption shall be returned to the Issuer forthwith. Subject to
applicable escheat laws, any moneys or shares of Common Stock so set aside by
the Issuer and unclaimed at the end of one year from the Redemption Date shall
revert to the general funds of the Issuer, after which reversion the Holders of
such shares so called for redemption shall look only to the general funds of the
Issuer for the payment of the Redemption Price without interest. Any interest
accrued on funds held by the Redemption Agent shall be paid to the Issuer from
time to time.
(c) In the event that fewer than all the outstanding shares of the
Preferred Stock are to be redeemed, the shares to be redeemed shall be
determined pro rata or by lot, as determined by the Issuer, except that the
Issuer may redeem such shares held by any Holder of fewer than 100 shares (or
shares held by Holders who would hold fewer than 100 shares as a result of such
redemption), as may be determined by the Issuer.
6. Liquidation Preference
6.1 Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Issuer, Holders of the Preferred Stock will be entitled to be
paid, out of assets of the Issuer available for distribution the Liquidation
Preference per share plus an amount in cash equal to all accumulated and unpaid
dividends thereon to the date fixed for liquidation, dissolution or winding up
(including an amount equal to a prorated dividend for the period from the last
dividend payment date to the date fixed for liquidation, dissolution or winding
up), before any distribution is made on any Junior Securities, including,
without limitation, the Common Stock.
6.2 If, upon any voluntary liquidation, dissolution or winding-up of
the Issuer, the amounts payable with respect to the liquidation performance of
the Preferred Stock and all other Parity Securities are not paid in full, the
Holders of the Preferred Stock and the Parity Securities will share pro rata in
proportion to the full distribution to which each is entitled.
6.3 After payment of the full amount of the Liquidation Preference to
which they are entitled, the Holders of shares of the Preferred Stock will have
no right or claim to any of the remaining assets of the Issuer.
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<PAGE>
6.4 Neither the sale, conveyance, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or substantially all
of the property or business of the Issuer (other than in connection with the
winding up of its business), nor the merger or consolidation of the Issuer with
or into any other corporation, will be deemed to be a dissolution, liquidation,
or winding up, voluntary or involuntary, of the Issuer.
7. Voting Rights
7.1 Holders of the Preferred Stock have no voting rights with
respect to general corporate matters except as provided by law or as set forth
herein.
7.2 (a) If dividends or Quarterly Return Amounts (as defined in the
Securities Account Agreement) payable on the Preferred Stock are in arrears and
unpaid for six quarterly periods, the Holders of the Preferred Stock voting
separately as a class with the shares of any other preferred stock or preference
securities having similar voting rights (the "Voting Rights Class") will be
entitled at the next regular or special meeting of stockholders of the Issuer to
elect two directors of the Issuer to fill newly created directorships.
(b) Such voting rights may be exercised at a special meeting of the
holders of the shares of the Voting Rights Class, called as hereinafter
provided, or at any annual meeting of stockholders held for the purpose of
electing directors, and thereafter at each such annual meeting until such time
as all dividends in arrears on the shares of Preferred Stock shall have been
paid in full, at which time or times such voting rights and the term of the
directors elected pursuant to Section 7.2(a) shall terminate.
(c) At any time when such voting rights shall have vested in holders
of shares of the Voting Rights Class described in Section 7.2(a), a proper
officer of the Issuer may call, and, upon the written request of the record
holders of shares representing twenty-five percent (25%) of the voting power of
the shares then outstanding of the Voting Rights Class, addressed to the
Secretary of the Issuer, shall call a special meeting of the holders of shares
of the Voting Rights Class. Such meeting shall be held at the earliest
practicable date upon the notice required for annual meetings of stockholders at
the place for holding annual meetings of stockholders of the Issuer, or, if
none, at a place designated by the Board of Directors. Notwithstanding the
provisions of this Section 7.2(c), no such special meeting shall
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<PAGE>
be called during a period within the 60 days immediately preceding the date
fixed for the next annual meeting of stockholders, in which such case the
election of directors pursuant to Section 7.2(a) shall be held at such annual
meeting of stockholders.
(d) At any meeting held for the purpose of electing directors at which
the holders of the Voting Rights Class shall have the right to elect directors
as provided herein, the presence in person or by proxy of the holders of shares
representing more than fifty percent (50%) in voting power of the then
outstanding shares of the Voting Rights Class shall be required and shall be
sufficient to constitute a quorum of such class for the election of directors by
such class.
(e) Any director elected pursuant to the voting rights created under this
Section 7.2 shall hold office until the next annual meeting of stockholders
(unless such term has previously terminated pursuant to Section 7.2(b)) and any
vacancy in respect of any such director shall be filled only by vote of the
remaining director so elected by holders of the Voting Rights Class, or if there
be no such remaining director, by the holders of shares of the Voting Rights
Class at a special meeting called in accordance with the procedures set forth in
this Section 7.2, or, if no such special meeting is called, at the next annual
meeting of stockholders. Upon any termination of such voting rights, the term of
office of all directors elected pursuant to this Section 7 shall terminate.
7.3 The affirmative vote or consent of the Holders of at least 66 2/3% of
the outstanding Preferred Stock will be required for:
(a) the issuance of any class of Senior Securities (or security
convertible into Senior Securities or evidencing a right to purchase any shares
or any class or series of Senior Securities), and
(b) amendments to the Issuer's Certificate of Incorporation that would
affect adversely the rights of Holders of the Preferred Stock, including,
without limitation,
(i) any increase in the authorized number of shares of all series of
preferred stock in excess of 3,000,000 shares and
(ii) the issuance of any shares of Preferred Stock in excess of the number
of shares of such stock authorized in this
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<PAGE>
Certificate of Designation as of the date of the original issuance of
the Preferred Stock.
(c) In all such cases each share of Preferred Stock shall be entitled
to one vote.
7.4 Except as set forth in this Certificate of Designation, the creation,
authorization or issuance of any shares of Junior Securities or Parity
Securities or an increase or decrease in the amount of authorized Capital Stock
of any class, including any preferred stock, shall not require the consent of
the Holders of the Preferred Stock and shall not be deemed to affect adversely
the rights, preferences, privileges or voting rights of Holders of shares of the
Preferred Stock.
8. Amendment, Supplement and Waiver
8.1 Without the consent of any Holder of the Preferred Stock, subject to
the requirements of the Delaware General Corporation Law, the Issuer may amend
or supplement this Certificate of Designation to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Preferred Stock in addition to or
in place of certificated Preferred Stock, to provide for the assumption of the
Issuer's obligations to Holders of the Preferred Stock in the case of a merger
or consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Preferred Stock or that does not adversely affect
the legal rights under this Certificate of Designation of any such Holder.
9. Certain Definitions
Set forth below are certain defined terms used in this Certificate of
Designation.
9.1 "Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations thereunder.
9.2 "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the
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<PAGE>
management or policies of such person, whether through the ownership of voting
securities, by agreement of or otherwise.
9.3 "Business Day" means any day other than a Legal Holiday.
9.4 "Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock or
partnership or membership interests, whether common or preferred.
9.5 "Closing Price" for each day shall be the last sales price or in case
no such reported sales take place on such day, the average of the last reported
bid and asked price, in either case on the principal U.S. national securities
exchange on which the shares of Common Stock are admitted to trading or listed,
or if not listed or admitted to trading on such exchange, the representative
closing bid price as reported by the Nasdaq National Stock Market, or if the
Nasdaq National Stock Market is no longer reporting such information, or if not
so available, the fair market price as determined, in good faith, by our Board
of Directors.
9.6 "Change of Control" means: (a) the sale, lease, transfer, conveyance
or other disposition of all or substantially all of the assets of the Issuer to
any "person" or "group" (within the meaning of Sections 13(d)(3) and 14(d)(2) of
the Exchange Act or any successor provision to either of the foregoing,
including any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act) other
than Existing Shareholders (except in connection with a liquidation or
dissolution of the Issuer that does not constitute a Change of Control under
clause (b) below), (b) the approval by the requisite shareholders of the Issuer
of a plan of liquidation or statutory dissolution (which shall not be construed
to include a plan or merger or consolidation) of the Issuer, unless Existing
Shareholders "beneficially own" (as defined in Rule 13d-3 under the Exchange
Act) at least the same percentage of voting power after the consummation of such
plan as before or otherwise retain the right or ability, by voting power, to
control the Person that acquire the proceeds of such liquidation or dissolution,
(c) any "person" or "group" (within a meaning of Sections 13(d)(3) and 14(d)(2)
of the Exchange Act or any successor provision to either of the foregoing,
including any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other
than Existing Shareholders, becomes the "beneficial owner" (as so defined) of
more than thirty-five percent (35%) of the total voting power of all classes of
the Voting Stock of the Issuer or a successor and/or warrants or options to
acquire such Voting
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Stock, calculated on a fully diluted basis, provided that Existing Shareholders
"beneficially own" (as so defined) in the aggregate a percentage of such Voting
Stock or warrants having a lesser percentage of voting power than such other
"person" or "group" and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of the
Issuer's Board of Directors, or (d) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Issuer's Board
of Directors (together with any new directors whose nomination for election or
appointment by such board or whose election by the stockholders of the Issuer
was approved by a vote of the Existing Shareholders or a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Issuer's Board of
Directors then in office. Notwithstanding clause (c) above, (i) the acquisition
by a Qualified Investor of forty-nine percent (49%) or less of the Voting Stock
of the Issuer shall not constitute a Change of Control, and (ii) a merger or
consolidation that would otherwise constitute a Change of Control hereunder
shall not constitute a Change of Control if at least ninety percent (90%) of the
consideration consists of common stock that is, or upon issuance, will be traded
on a United States national securities exchange or quoted on the Nasdaq National
Stock Market.
9.7 "Common Stock" means the Issuer's authorized $.01 par value Class A
Common Stock.
9.8 The "Conversion Date" shall be the date the Issuer or the Transfer
Agent receives the Conversion Notice.
9.9 The "Conversion Notice" is written notice from the Holder to the
Issuer stating that the Holder elects to convert all or a portion of the shares
of Preferred Stock represented by certificates delivered to the Issuer or the
Transfer Agent contemporaneously. The Conversion Notice will specify or include:
(i) The number of shares of Preferred Stock being converted by the
Holder,
(ii) The name or names (with address and taxpayer identification
number) in which a certificate or certificates for shares of Common Stock
are to be issued,
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(iii) A written instrument or instruments of transfer in form
reasonably satisfactory to the Issuer or the Transfer Agent, duly executed
by the Holder or its duly authorized legal representative, or in blank, and
(iv) Transfer tax stamps or funds thereof, if required pursuant to
Section 4.9.
9.10 The "Conversion Price" shall initially be $63.79, subject to
adjustments as set forth in Section 4.3.
9.11 "Conversion Price Adjustment Events" are any of those events specified
in Section 4.3(a).
9.12 "Dividend Payment Date" is as defined in Section 2.1, above.
9.13 "Dividend Payment Record Date" is as defined in Section 2.1, above.
9.14 "Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
9.15 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
9.16 "Existing Shareholders" means Albert M. Carollo, Lawrence F. DeGeorge,
Lawrence J. DeGeorge, Curtis Rochelle, Marian Rochelle, Rochelle Investments,
Ltd. (so long as it is controlled by Curtis or Marian Rochelle), Gene W.
Schneider, G. Schneider Holdings, Co. and The Gene W. Schneider Family Trust (so
long as each is controlled by Gene W. Schneider or trustees appointed by him),
Janet S. Schneider and Mark L. Schneider (collectively, the "Principals") and
with respect to any Principal means:
(a) any controlling stockholder or 80% (or more) owned subsidiary of
such Principal, or with respect to each individual Principal, (1) family
partnerships, corporations or other entities holding our equity interests, the
transferee(s) or the surviving entities or entities solely for the benefit of
such Principal or any of the Persons listed in (2) through (5) below, (2) such
Principal's spouse, (3)
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such Principal's children, grandchildren, stepchildren, step grandchildren and
their spouses, (4) heirs, legatees and divisees, and (5) trusts primarily for
the benefit of any of the foregoing; or
(b) any trust corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% (or more) controlling interest of which consist of such Principal and/or
such other persons referred to in the immediately preceding clause (a).
9.17 "Holder" means a Person in whose name shares of Capital Stock is
registered.
9.18 "Issuer" means UnitedGlobalCom, Inc., a Delaware corporation.
9.19 "Junior Security" is as defined in Section 3.1.
9.20 "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place payment is to be received are
authorized by law, regulation or executive order to remain closed. If a payment
date is Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
9.21 "Liquidation Preference" means $1,000 per share of Preferred Stock.
9.22 "Market Capitalization" means the product of the then-current market
price times the total number of shares of Common Stock then outstanding.
9.23 "Market Value" means, as of any date, the average of the daily Closing
Price for the five consecutive Trading Days ending on such date.
9.24 "Market Value Amount" means (i) 97% of the Market Value of the Common
Stock, if a shelf registration statement registering the resale of such shares
is effective or the shares of Common Stock are eligible for resale pursuant to
Rule 144(k) under the Act, or (ii) 93% of the Market Value of the Common Stock,
in each case determined as of the date of such notice.
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9.25 "Notice Date" means the tenth day prior to a Deposit Payment Date.
9.26 "Parity Security" is as defined in Section 3.1.
9.27 "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock issuer, interest, trust or unincorporated
organization (including any subdivision or ongoing business of any such entity
or substantially all of the assets of any such entity, subdivision or business).
9.28 "Preferred Stock" means the Preferred Stock authorized in this
Certificate of Designation.
9.29 "Qualified Investor" means an investor approved by the Board of
Directors of the Company, which has debt securities rated by a nationally
recognized statistical rating organization in one of its four highest generic
rating categories and either (i) is in the telecommunications industry or (ii)
engages in a business which will benefit from strategic synergies from an
investment in the Company.
9.30 "Redemption Agent" means that Person, if any, appointed by the Issuer
to hold funds deposited by the Issuer in trust to pay to the Holders of shares
to be redeemed.
9.31 "Redemption Date" means that certain date set forth in the Redemption
Notice on which date the redemption of the Preferred Stock is completed.
9.32 "Redemption Notice" means that notice to be given by the Issuer to the
Holders notifying the Holders as to the redemption, in whole or in part, of the
Preferred Stock pursuant to Article 5 hereof. The Redemption Notice shall
include the following information: (i) the Redemption Date and the time of day
on such date; (ii) the total number of shares of Preferred Stock to be redeemed
and, if fewer than all the shares held by such Holder are to be redeemed, the
number of such shares to be redeemed from such Holder; (iii) the Redemption
Price (whether to be paid in cash or shares of Common Stock); (iv) the place or
places where certificates for such shares are to be surrendered for payment of
the Redemption Price and delivery of certificates representing shares of Common
Stock (if the Issuer so chooses); (v) that dividends on the shares to be
redeemed will cease to accrue on such Redemption Date unless the Issuer defaults
in the payment of the Redemption Price; and (vi) the name
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of any bank or trust company, if any, performing the duties of Redemption Agent.
Redemption Notice shall be given by first-class mail to each record Holder of
the shares to be redeemed, at such holder's address as the same appears on the
books of the Company.
9.33 "Redemption Notice Date" means the date the Redemption Notice is first
mailed or delivered to any Holder.
9.34 "Redemption Price" means that price established for redemption of the
Preferred Stock established in Section 5.1(b) hereof.
9.35 "Securities Account" means the account created pursuant to the
Securities Account Agreement.
9.36 "Securities Account Agreement" means the Securities Account Agreement
dated December 7, 1999 between the Company and Firstar Bank, N.A., as deposit
agent.
9.37 "Senior Securities" is as defined in Section 3.1.
9.38 "Subsidiary" means, with respect to any person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other Subsidiaries of such person or a combination
thereof.
9.39 The "Transfer Agent" shall be as established pursuant to Article 11
hereof.
9.40 "Trading Day" shall mean any business day on which the Nasdaq National
Stock Market (or any U.S. national securities exchange or quotation system on
which the Common Stock is then listed) is open for the transaction of business.
9.41 "Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
10. Transfer Agent and Registrar
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The duly appointed Transfer Agent and registrar for the Preferred Stock
shall be Firstar Bank, N.A. The Issuer may, in its sole discretion, remove the
Transfer Agent in accordance with the agreement between the Issuer and the
Transfer Agent; provided that the Issuer shall appoint a successor transfer
agent who shall accept such appointment prior to the effectiveness of such
removal.
11. Other Provisions
11.1 With respect to any notice to a Holder of shares of the Preferred
Stock required to be provided hereunder, neither failure to mail such notice,
nor any defect therein or in the mailing thereof, to any particular Holder shall
affect the sufficiency of the notice or the validity of the proceedings referred
to in such notice with respect to the other Holders or affect the legality or
validity of any distribution, rights, warrant, reclassification, consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up, or the
vote upon any such action. Any notice which was mailed in the manner herein
provided shall be conclusively presumed to have been duly given whether or not
the Holder receives the notice.
11.2 Shares of Preferred Stock issued and reacquired will be retired and
canceled promptly after reacquisition thereof and, upon compliance with the
applicable requirements of Delaware law, have the status of authorized but
unissued shares of preferred stock of the Issuer undesignated as to series and
may with any and all other authorized but unissued shares of preferred stock of
the Issuer be designated or redesignated and issued or reissued, as the case may
be, as part of any series of preferred stock of the Issuer except that any
issuance or reissuance of shares of Preferred Stock must be in compliance with
this Certificate of Designation.
11.3 In the Issuer's discretion, no fractional shares of Common Stock or
securities representing fractional shares of Common Stock will be issued upon
conversion, redemption, or as dividends payable in the Preferred Stock. Any
fractional interest in a share of Common Stock resulting from conversion,
redemption, or dividend payment will be paid in cash based on the last reported
sale price of the Common Stock on the Nasdaq National Stock Market (or any
national securities exchange or authorized quotation system on which the Common
Stock is then listed) at the close of business on the trading day next preceding
the date of conversion or such later time as the Issuer is legally and
contractually able to pay for such fractional shares.
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11.4 The shares of Preferred Stock shall be issuable in whole shares.
11.5 All notices periods referred to herein shall commence on the date of
the mailing of the applicable notice.
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IN WITNESS WHEREOF, UnitedGlobalCom, Inc. caused this Certificate to be
signed this 2nd day of December, 1999.
UNITEDGLOBALCOM, INC.
By: /s/ Frederick G. Westerman III
---------------------------------
Name: Frederick G. Westerman III
Title: Chief Financial Officer
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