FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 5-43936
BANKUNITED FINANCIAL CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 65-0377773
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
255 ALHAMBRA CIRCLE, CORAL GABLES 33134
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
(305) 569-2000
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
The number of shares outstanding of the registrant's common stock at the close
of business on February 12, 1999 was 17,891,661 shares of Class A Common Stock,
$.01 par value, and 402,370 shares of Class B Common Stock, $.01 par value.
This Form 10-Q contains 110 pages.
The Index to Exhibits appears on page 26.
<PAGE>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
Form 10-Q Report for the Quarter Ended December 31, 1998
INDEX
PAGE NO.
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PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Consolidated Statements of Financial Condition as of
December 31, 1998 (unaudited) and September 30, 1998 3
Consolidated Statements of Operations (unaudited)
for the Three Months Ended December 31, 1998
and December 31, 1997 4
Consolidated Statements of Stockholders' Equity
(unaudited) for the Three Months Ended December 31,
1998 and December 31, 1997 5
Consolidated Statements of Cash Flows (unaudited)
for the Three Months Ended December 31, 1998
and December 31, 1997 6
Condensed Notes to Consolidated Financial
Statements (unaudited) 7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 21
PART II - OTHER INFORMATION
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 23
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 23
Item 6. EXHIBITS AND REPORTS ON FORM 8-K 23
2
<PAGE>
<TABLE>
<CAPTION>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Note 1)
December 31, 1998 September 30,
(Unaudited) 1998
- -------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
<S> <C> <C>
ASSETS
Cash $ 26,153 $ 26,243
Federal Home Loan Bank overnight deposits 38,297 65,268
Securities purchased under agreements to resell 50,000 -
Tax certificates (net of reserves of $479 at December 31, 1998 and
$469 at September 30, 1998) 33,315 40,007
Investments held to maturity (market value of approximately
$14,600 at December 31, 1998 and $14,699 at September 30, 1998) 14,546 14,542
Investments available for sale, at market 23,187 23,661
Mortgage-backed securities, held to maturity (market value
of approximately $85,700 at December 31, 1998
and $143,505 at September 30, 1998) 87,726 146,146
Mortgage-backed securities available for sale, at market 235,864 199,610
Loans receivable, net 2,932,736 2,869,604
Mortgage loans held for sale (market value of approximately $217,650
at December 31, 1998 and $179,503 at September 30, 1998) 214,851 172,410
Other interest earning assets 64,927 51,313
Office properties and equipment, net 15,302 14,198
Real estate owned 2,681 1,974
Accrued interest receivable 26,207 32,864
Mortgage servicing rights 8,882 8,917
Goodwill 31,608 32,106
Prepaid expenses and other assets 26,095 39,520
---------- ----------
Total assets $3,832,377 $3,738,383
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $2,301,162 $2,124,824
Securities sold under agreements to repurchase 1,980 121,148
Advances from Federal Home Loan Bank 1,071,447 1,021,466
Company obligated mandatorily redeemable trust preferred securities of
subsidiary trusts holding solely junior subordinated deferrable interest
debentures of the Company 218,500 218,500
Interest payable (primarily on deposits and advances from Federal Home
Loan Bank) 9,446 7,825
Advance payments by borrowers for taxes and insurance 4,279 12,645
Accrued expenses and other liabilities 26,716 32,683
---------- ----------
Total liabilities 3,633,530 3,539,091
---------- ----------
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS' EQUITY (Note 2):
Preferred stock, Series B and Series 9%, $0.01 par value. Authorized shares -
10,000,000; issued and outstanding shares -
926,697 at December 31, 1998 and September 30, 1998 9 9
Class A Common Stock, $.01 par value. Authorized shares - 30,000,000;
issued and outstanding shares - 17,829,675 at December 31, 1998 and
17,816,213 at September 30, 1998 178 178
Class B Common Stock, $.01 par value. Authorized shares - 3,000,000;
issued and outstanding shares - 376,392 at December 31, 1998 and 331,743
at September 30, 1998 4 3
Additional paid-in capital 179,091 178,777
Retained earnings 18,656 18,448
Accumulated other comprehensive income, net of tax (Note 3) 909 1,877
---------- ----------
Total stockholders' equity 198,847 199,292
---------- ----------
Total liabilities and stockholders' equity $3,832,377 $3,738,383
========== ==========
</TABLE>
SEE CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
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<TABLE>
<CAPTION>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Note 1)
THREE MONTHS ENDED DECEMBER 31,
--------------------------------
(Unaudited)
1998 1997
------- -------
(In thousands, except earnings per share)
<S> <C> <C>
Interest income:
Interest and fees on loans $50,837 $36,893
Interest on mortgage-backed securities 4,073 2,192
Interest on short-term investments 848 420
Interest and dividends on long-term investments
and other earning assets 2,387 1,945
------- -------
Total interest income 58,145 41,450
------- -------
Interest expense:
Interest on deposits 27,666 17,584
Interest on borrowings 15,102 11,591
Preferred dividends of trust subsidiaries 5,288 2,908
------- -------
Total interest expense 48,056 32,083
------- -------
Net interest income before provision for loan losses 10,089 9,367
Provision for loan losses 400 650
------- -------
Net interest income after provision for loan losses 9,689 8,717
------- -------
Non-interest income:
Service fees, net 1,078 452
Net gain (loss) on sale of loans and mortgage-backed securities (9) 1,115
Other 224 77
------- -------
Total non-interest income 1,293 1,644
------- -------
Non-interest expenses:
Employee compensation and benefits 3,114 2,480
Occupancy and equipment 1,641 886
Insurance 380 255
Professional fees - legal and accounting 582 622
Data processing 358 217
Loan servicing expense 1,962 1,197
Other operating expenses 2,185 1,368
------- -------
Total non-interest expenses 10,222 7,025
------- -------
Income before income taxes and preferred stock dividends 760 3,336
Income taxes 364 1,361
------- -------
Net income before preferred stock dividends 396 1,975
Preferred stock dividends of the Company 188 332
------- -------
Net income after preferred stock dividends $ 208 $ 1,643
======= =======
Earnings Per Share (Note 4):
Basic $ 0.01 $ 0.13
======= =======
Diluted $ 0.01 $ 0.12
======= =======
Weighted average number of common shares
assumed outstanding during the period (Note 4):
Basic 18,189 13,012
======= =======
Diluted 18,566 14,042
======= =======
</TABLE>
SEE CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
<TABLE>
<CAPTION>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Note 1)
THREE MONTHS ENDED DECEMBER 31, 1997 AND 1998
--------------------------------------------------------------------------
(Unaudited)
ACCUMULATED
OTHER
PREFERRED COMMON PAID-IN RETAINED COMPREHENSIVE
STOCK STOCK CAPITAL EARNINGS INCOME TOTAL
--------- --------- --------- --------- --------- --------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance, September 30, 1997 $ 22 $ 95 $ 86,679 $ 11,988 $ 861 $ 99,645
Comprehensive income (Note 3):
Net income - - - 1,975 - 1,975
Dividends declared on preferred
stock - - - (332) - (332)
Other comprehensive loss, net
of tax - - - - (169) (169)
--------- --------- --------- --------- --------- --------
Total comprehensive income - - - 1,643 (169) 1,474
Redemption of preferred stock (6) 9 (131) - - (128)
Common stock issued through the
exercise of options, restricted
stock grants, directors'
compensation and employee
stock grants - 1 671 - - 672
Common stock issued through
public offering - 37 43,931 - - 43,968
--------- --------- --------- --------- --------- --------
Balance, December 31, 1997 $ 16 $ 142 $ 131,150 $ 13,631 $ 692 $145,631
========= ========= ========= ========= ========= ========
Balance, September 30, 1998 $ 9 $ 181 $ 178,777 $ 18,448 $ 1,877 $199,292
Comprehensive loss (Note 3):
Net income - - - 396 - 396
Dividends declared on preferred
stock - - - (188) - (188)
Other comprehensive loss, net
of tax - - - - (968) (968)
------- --------- --------- --------- --------- --------
Total comprehensive loss - - - 208 (968) (760)
Common stock issued through the
exercise of options, restricted
stock grants, directors'
compensation and employee
stock grants - 1 283 - - 284
Common stock issued through
preferred stock dividends - - 31 - - 31
--------- --------- --------- --------- --------- --------
Balance, December 31, 1998 $ 9 $ 182 $ 179,091 $ 18,656 $ 909 $198,847
========= ========= ========= ========= ========= ========
</TABLE>
SEE CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE>
<TABLE>
<CAPTION>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Note 1)
THREE MONTHS ENDED DECEMBER 31,
-----------------------------------
(Unaudited)
1998 1997
--------- ----------
(In thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 396 $ 1,975
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Provision for loan losses 400 650
Provision for losses on tax certificates 10 16
Depreciation and amortization 579 328
Amortization (accretion) of fees, discounts and premiums 6,193 (1,797)
Amortization of mortgage servicing rights 243 285
Amortization of goodwill 384 208
Net (gain) loss on sales of loans and mortgage-backed securities 9 (1,115)
Net gain on the sale of real estate owned (12) (54)
Loans originated for sale (132,060) (12,037)
Proceeds from sale of loans 11,982 28,574
Decrease (increase) in accrued interest receivable 6,657 (6,481)
Increase in interest payable on deposits and FHLB advances 1,621 1,926
Increase (decrease) in accrued taxes (142) 2,438
Decrease in other liabilities (5,750) (1,065)
Decrease (increase) in prepaid expenses and other assets 13,943 (3,004)
Other, net (383) 5
--------- ----------
Net cash provided by (used in) operating activities (95,930) 10,852
--------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net decrease (increase) in loans 9,172 (921,700)
Purchase of investment securities (1,009) -
Purchase of mortgage-backed securities (51,919) -
Purchase of other earning assets (14,249) (34,250)
Proceeds from repayments of investment securities 1,750 2,000
Proceeds from repayments of mortgage-backed securities 71,040 8,747
Proceeds from repayments of other earning assets 635 4,751
Proceeds from sale of mortgage-backed securities - 17,021
Proceeds from the sale of real estate owned 182 313
Purchases of office properties and equipment (1,682) (1,639)
Net increase in securities purchased under agreement to resell (50,000) -
Net decrease in tax certificates 6,692 9,231
--------- ----------
Net cash used in investing activities (29,388) (915,526)
--------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 176,338 248,210
Net increase in Federal Home Loan Bank Advances 49,981 589,982
Net decrease in other borrowings (119,168) -
Capitalized costs for medium term notes (599) -
Net proceeds from issuance of common stock 228 44,641
Preferred Stock , Series 9% tender offer - (43)
Preferred Stock, Series 1996 redemption - (85)
Dividends paid on the Company's preferred stock (157) (332)
Decrease in advances from borrowers for taxes and insurance (8,366) (4,254)
--------- ----------
Net cash provided by financing activities 98,257 878,119
--------- ----------
Decrease in cash and cash equivalents (27,061) (26,555)
Cash and cash equivalents at beginning of period 91,511 89,984
--------- ----------
Cash and cash equivalents at end of period $ 64,450 $ 63,429
========= ==========
Supplemental Disclosures:
Interest paid on deposits and borrowings $ 46,434 $ 30,157
========= ==========
Transfer of loans to real estate owned $ 970 $ 428
========= ==========
Transfer of loans from held for sale to portfolio $ 73,825 $ -
========= ==========
Income taxes paid $ - $ -
========= ==========
</TABLE>
SEE CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6
<PAGE>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
The accompanying unaudited consolidated financial statements have been
prepared in conformity with Rule 10-01 of Regulation S-X of the Securities and
Exchange Commission and therefore do not include information or footnotes
necessary for a complete presentation of financial position, results of
operations and cash flows in conformity with generally accepted accounting
principles ("GAAP"). However, all adjustments (consisting of normal recurring
accruals) which, in the opinion of management, are necessary for a fair
presentation of the financial statements of BankUnited Financial Corporation and
its subsidiaries (the "Company") have been included. Operating results for the
three month period ended December 31, 1998 are not necessarily indicative of the
results which may be expected for the year ending September 30, 1999. For
further information, refer to the Consolidated Financial Statements and Notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1998.
Certain prior period amounts have been reclassified to conform to the
December 31, 1998 consolidated financial statements.
2. CAPITAL
In December 1998, the Board of Directors of the Company authorized the
purchase from time to time in open market transactions of up to 1,000,000 shares
of the Company's Class A Common Stock at such prices as the Executive Committee
deems advantageous. As of the date of filing of this Quarterly Report on Form
10-Q, the Company had not purchased any shares of its Class A Common Stock on
the open market.
The Office of Thrift Supervision ("OTS") requires that BankUnited, FSB
(the "Bank"), a wholly owned subsidiary, meet minimum regulatory, core and
risk-based capital requirements. Currently, the Bank exceeds all regulatory
capital requirements. The Bank's required, actual and excess regulatory capital
levels as of December 31, 1998 were as follows:
<TABLE>
<CAPTION>
REQUIRED ACTUAL EXCESS
------------------ ------------------- -------------------
% OF % OF % OF
AMOUNT ASSETS AMOUNT ASSETS AMOUNT ASSETS
-------- ------ -------- ------ -------- ------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Core Capital $112,226 3.0% $320,411 8.6% $208,185 5.6%
Risk-Based Capital $151,400 8.0% $326,382 17.2% $174,982 9.2%
</TABLE>
7
<PAGE>
3. COMPREHENSIVE INCOME
The Company adopted SFAS No. 130, "Reporting Comprehensive Income,"
effective October 1, 1998. The Company's comprehensive income includes all items
which comprise net income plus other comprehensive income which includes the
unrealized holding gains and losses on available for sale securities. For the
three months ended December 31, 1998 and 1997, the Company's other comprehensive
loss was as follows:
FOR THE THREE MONTHS ENDED
DECEMBER 31,
--------------------------
1998 1997
------ ------
(In thousands)
Other comprehensive loss, net of taxes:
Unrealized holding gains (losses) arising
during the period........................ $ (968) $ 93
Less: reclassification adjustment for
gains included in net income............. - (262)
------ ------
Total other comprehensive loss ................... $ (968) $ (169)
====== ======
4. EARNINGS PER SHARE
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
DECEMBER 31,
--------------------------
1998 1997
--------- ---------
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C>
BASIC EARNINGS PER SHARE:
Numerator:
Net income after preferred stock dividends................ $ 208 $ 1,643
======= =======
Denominator:
Weighted average common shares outstanding................ 18,189 13,012
======= =======
Basic earnings per share..................................... $ 0.01 $ 0.13
======= =======
DILUTED EARNINGS PER SHARE:
Numerator:
Net income after preferred stock dividends................ $ 208 $ 1,643
Plus:
Reduction of preferred stock dividends................. - 26
------- -------
Diluted net income available to common
shareholders........................................... $ 208 $ 1,669
======= =======
Denominator:
Weighted average common shares outstanding................ 18,189 13,012
Plus:
Number of common shares from the conversion of
options and warrants................................ 377 724
Number of common shares from the conversion
of dilutive preferred stock*........................ - 306
------- -------
Diluted weighted average common shares outstanding........ 18,566 14,042
======= =======
Diluted earnings per share................................... $ 0.01 $ 0.12
======= =======
<FN>
- ----------
* For the three months ended December 31, 1998 and 1997 there were
343,000 and 744,000 common stock equivalent shares, respectively, of
convertible preferred stock outstanding that were not included in the
computation of diluted earnings per share because of their antidilutive
effect.
</FN>
</TABLE>
8
<PAGE>
5. CONTINGENCIES AND OFF-BALANCE SHEET ACTIVITIES
During November 1998, the Bank established a program to issue up to
$500 million aggregate principal amount of its Senior Notes (the "Senior Notes")
backed by an irrevocable standby letter of credit of the FHLB of Atlanta. These
notes may have either a fixed or floating rate of interest, determined at the
time of issuance, and will mature no sooner than 9 months and no more than 10
years from the date of issuance. The Bank intends to use the net proceeds from
the sale of the Senior Notes for general corporate purposes that will ultimately
promote home financing or other housing activity and encourage and assist the
Bank's asset/liability management. The notes have been rated "Aaa" by Moody's
Investors Service, Inc. and "AAA" by Standard & Poor's Ratings Services. As of
December 31, 1998, no Senior Notes had been issued. See Note 6, "Subsequent
Event," for information regarding the issuance and sale of Senior Notes during
the second quarter of fiscal 1999.
During April 1998, the Bank entered into two interest rate cap
contracts with a major Wall Street firm, in notional amounts of $90.0 million
and $60.0 million, terminating on October 23, 1999 and April 23, 2000,
respectively. The contracts require the counter-party to pay the Bank quarterly
interest payments based on the notional amounts and the difference between the
"London Inter Bank Offering Rate" ( the "LIBOR rate") and 5.90% when the LIBOR
rate exceeds 5.90%, in return for a one-time payment by the Bank.
During May 1998, the Bank entered into a third interest rate cap
contract with another major Wall Street firm in a notional amount of $75.0
million terminating on May 30, 2000. The contract requires the counter-party to
pay the Bank quarterly interest payments based on the notional amount and the
difference between the LIBOR rate and 6.10% when the LIBOR rate exceeds 6.10%,
in return for a one-time payment by the Bank.
The Bank entered into these contracts for the purpose of hedging a
portion of the Company's interest rate risk against rising interest rates on
certain short-term borrowings. As of December 31, 1998, the 3-month LIBOR rate
was 5.17%.
The Company is a party to certain claims and litigation arising in the
ordinary course of business. In the opinion of management, the resolution of
such claims and litigation will not materially affect the Company's consolidated
financial position or results of operations.
6. SUBSEQUENT EVENT
On February 2, 1999, the Bank issued and sold $200.0 million of Senior
Notes which mature in five years and bear interest at an annual rate of 5.40%,
payable semiannually.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
BankUnited Financial Corporation ( the "Company" or "BankUnited") is a
Florida-incorporated savings and loan holding company that operates as a
financial intermediary by acquiring and investing funds primarily through its
principal subsidiary, BankUnited, FSB (the "Bank"). The Bank is subject
9
<PAGE>
to the regulations of certain federal agencies and undergoes periodic
examinations by those regulatory authorities. References to the Company include
the activities of all of its subsidiaries, including the Bank and its
subsidiaries, if the context so requires.
The following discussion and analysis and the related financial data
present a review of the consolidated operating results and financial condition
of the Company for the three month periods ended December 31, 1998 and 1997.
This discussion and analysis should be read in conjunction with the Consolidated
Financial Statements and Notes thereto contained in the Company's Annual Report
on Form 10-K for the year ended September 30, 1998.
This Quarterly Report on Form 10-Q contains forward looking statements.
Additional written or oral forward looking statements may be made by the Company
from time to time in filings with the Securities and Exchange Commission or
otherwise. Such forward looking statements are within the meaning of that term
in Section 27A of the Securities Act of 1933, as amended, (the "Securities Act")
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Such statements may include, but not be limited to, projections
of income, borrowing costs, prepayment rates, and plans for future operations or
acquisitions, as well as assumptions relating to the foregoing. The words
"believe," "expect," "anticipate," "estimate," "project," "intend," and similar
expressions identify forward looking statements that are inherently subject to
risks and uncertainties, some of which cannot be predicted or quantified. Future
events and actual results could differ materially from those set forth in,
contemplated by, or underlying the forward looking statements.
DISCUSSION OF FINANCIAL CONDITION CHANGES FROM SEPTEMBER 30, 1998 TO
DECEMBER 31, 1998.
ASSETS
Total assets remained relatively constant from September 30, 1998 to
December 31, 1998, which is consistent with the Company's expectations that
assets will not grow significantly during the 1999 fiscal year.
The Company's short-term investments, primarily consisting of Federal
Home Loan Bank ("FHLB") overnight deposits and securities purchased under
agreements to resell, increased by $23.0 million, or 35.2% to $88.3 million at
December 31, 1998, from $65.3 million at September 30, 1998.
BankUnited's investment in tax certificates decreased by $6.7 million,
or 16.8%, to $33.3 million at December 31, 1998 from $40.0 million at September
30, 1998, as a result of certificate redemptions and repayments.
The levels of the Company's mortgage-backed securities
held-to-maturity, mortgage-backed securities available-for-sale and net loans
receivable were significantly affected during the period from September 30, 1998
to December 31, 1998 by increased repayments on mortgage loans and
mortgage-backed securities and the amortization of premiums paid on purchased
loans and mortgage-backed securities.
10
<PAGE>
Mortgage-backed securities held-to-maturity decreased by $58.4 million,
or 40.0% to $87.7 million at December 31, 1998 from $146.1 million at September
30, 1998 due to repayments and amortization of premiums.
Mortgage-backed securities available-for-sale increased by $36.3
million or 18.2% to $235.9 million at December 31, 1998, from $199.6 million at
September 30, 1998, due primarily to purchases of $51.9 million, offset by
repayments and amortization of $13.8 million, and also due to a reduction of
$1.8 million in the market value of the underlying securities.
The Company's net loans receivable (including loans held for sale)
remained relatively constant from September 30, 1998 to December 31, 1998.
Residential mortgage loan purchases of $399.7 million and loan originations of
$148.7 million were offset by repayments of $431.0 million (net of accretion of
discount and amortization of premium) and loan sales of $12.0 million. For
further discussion of repayments on loans and mortgage-backed securities, see
"Comparison of Operating Results for the Three Months Ended December 31, 1998
and 1997 - - Net Interest Income," and Item 3, "Quantitative and Qualitative
Disclosures About Market Risk."
Mortgage loans held for sale increased by $42.5 million, or 24.7%, to
$214.9 million at December 31, 1998 from $172.4 million at September 30, 1998,
due to residential loan originations of $132.1 million, offset by sales of $12.0
million, repayments of $3.8 million, and a transfer of loans to portfolio of
$73.8 million. The transfer resulted from the Company's discontinuation of its
policy of selling substantially all of the Company's internally generated
residential loans. In the second quarter of 1999, the Company has begun to
classify the majority of its originated residential loans as portfolio.
Other interest earning assets increased by $13.6 million, or 26.5%, to
$64.9 million at December 31, 1998 from $51.3 million at September 30, 1998.
This category primarily represents stock in the FHLB which the Company is
required to purchase as FHLB advances increase.
Accrued interest receivable decreased by $6.7 million to $26.2 million
at December 31, 1998 from $32.9 million at September 30, 1998. Prepaid expenses
and other assets decreased by $13.4 million or 33.9% to $26.1 million at
December 31, 1998, from $39.5 million at September 30, 1998.
Non-performing assets as of December 31, 1998 were $26.1 million which
represents an increase of $3.5 million or 15.5% from $22.6 million as of
September 30, 1998. The increase in non-performing assets primarily resulted
from increases in non-accrual loans, non-accrual tax certificates and real
estate owned, of $1.8 million, $0.6 million and $0.7 million, respectively.
Non-accrual loans increased primarily due to an increase in non-residential loan
delinquencies. The increase in non-accrual tax certificates resulted from a
change in the Company's policy regarding classification of tax certificates
relating to bankruptcy proceedings initiated by the debtor. The policy has been
changed to require classification of the tax certificates as non-accrual upon
filing of bankruptcy by the debtor instead of upon finalization of the
bankruptcy plan by the courts. As a result of the new policy, the non-accrual
tax certificates increased by $0.6 million in the first quarter of fiscal 1999.
The increase in real estate owned resulted from an increase in residential real
estate owned. Non-performing assets as a percentage of total assets increased
from 0.61% as of September 30, 1998 to 0.68% as of December 31, 1998 due to the
increase in non-performing assets for the reasons discussed above.
11
<PAGE>
The allowance for loan losses increased by $0.5 million from $6.1
million as of September 30, 1998 to $6.6 million as of December 31, 1998. The
increase was principally attributable to additional provisions for loan losses
resulting from the increase in non-performing assets.
The following table sets forth information concerning the Company's
non-performing assets as of the dates indicated.
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1998
------------ -------------
(Dollars in thousands)
<S> <C> <C>
Non-accrual loans $ 17,770 $ 15,999
Restructured loans 1,133 1,137
Loans past due 90 days and still accruing 2,762 2,313
-------- ---------
Total non-performing loans 21,665 19,449
Non-accrual tax certificates 1,779 1,225
Real estate owned 2,681 1,974
-------- ---------
Total non-performing assets $ 26,125 $ 22,648
======== =========
Allowance for losses on tax certificates $ 479 $ 469
Allowance for loan losses 6,594 6,128
-------- ---------
Total allowance $ 7,073 $ 6,597
======== =========
Non-performing assets as a percentage of
total assets 0.68% 0.61%
Non-performing loans as a percentage of
total loans 0.69% 0.64%
Allowance for loan losses as a percentage of
total loans 0.21% 0.20%
Allowance for loan losses as a percentage of
non-performing loans 30.44% 31.51%
Net charge offs (recoveries) as a percentage of
average total loans (0.01)% 0.02%
</TABLE>
LIABILITIES
Deposits increased by $176.3 million from September 30, 1998 to
December 31, 1998.
Securities sold under agreements to repurchase decreased by $119.1
million, or 98.3%, to $2.0 million at December 31, 1998 from $121.1 million at
September 30, 1998. This decrease resulted from the agreements maturing while
the Company's management seeks longer-term sources of funds to more effectively
control the Company's cost of funds and to take advantage of the current low
interest rate environment.
FHLB advances remained relatively constant from September 30, 1998 to
December 31, 1998.
12
<PAGE>
CAPITAL
The Company's total stockholders' equity was $198.8 million at December
31, 1998, a decrease of $0.5 million, or 0.2%, from $199.3 million at September
30, 1998. The decrease is due primarily to a $1.0 million decrease in
accumulated other comprehensive income, which was offset by increases from
current year earnings and the issuance of common stock from the exercise of
options. (See Note 3 - "Comprehensive Income" of the Condensed Notes to
Consolidated Financial Statements).
In December 1998, the Board of Directors of the Company authorized the
purchase from time to time in open market transactions of up to 1,000,000 shares
of the Company's Class A Common Stock at such prices as the Executive Committee
deems advantageous. As of the date of filing of this Quarterly Report on Form
10-Q, the Company had not purchased any shares of its Class A Common Stock on
the open market.
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended December 31, 1998, the Company increased
its transaction accounts by $114.8 million, or 23.4% and its certificates of
deposits by $61.5 million, or 3.8%. Included in the increase in deposits is an
increase of $87.2 million, to $173.4 million as of December 31, 1998 from $86.2
million as of September 30, 1998, in certificates of deposits issued to the
State of Florida, commonly referred to as public funds, partially offset by a
$25.7 million decrease in other certificates of deposits.
An additional source of funds is FHLB advances, which the Company
generally uses as a source of funds with longer maturities than deposits. FHLB
advances are limited to 30% of assets in accordance with the FHLB policy. As of
December 31, 1998, the Company had 28.0% of FHLB advances to total assets. Other
sources of short-term funds are available through other collateral borrowings.
During November 1998, the Bank established a medium-term note program
which permits the issuance, from time to time, of up to a total of $500 million
aggregate principal amount of the Bank's Senior Notes, with maturities ranging
from 9 months to 10 years from the date of issuance. As a condition of issuance,
principal, any redemption premium and interest on all offered Senior Notes are
supported by an irrevocable stand-by letter of credit of the FHLB of Atlanta.
The Senior Notes provide an additional source of funding, potentially with
longer maturities with attractive rates. As of December 31, 1998, no Senior
Notes had been issued. On February 2, 1999, the Bank issued and sold $200.0
million of Senior Notes which mature in five years and bear interest at an
annual rate of 5.40% payable semiannually.
The Bank is required under applicable federal regulations to maintain
specified levels of liquid investments in cash, United States government
securities and other qualifying investments. Regulations currently in effect
require the Bank to maintain liquid assets of not less than 4.0% of its net
withdrawable accounts plus short-term borrowings. The Bank had liquid assets of
6.08% and 7.18% as of December 31, 1998 and September 30, 1998, respectively, in
compliance with this requirement.
13
<PAGE>
During the quarter ended December 31, 1998, BankUnited's primary use of
funds was to purchase or originate loans and to purchase mortgage-backed and
investment securities. During that quarter, loans increased $105.6 million, and
BankUnited purchased $52.9 million of mortgage-backed and investment securities.
Funding for the above came primarily from increases in deposits of $176.3
million, increases in FHLB advances of $50 million and principal repayments on
loans and mortgage-backed securities.
Federal savings banks such as the Bank are also required to maintain
capital at levels specified by applicable minimum capital ratios. At December
31, 1998, the Bank was in compliance with all capital requirements and met the
definition of a "well capitalized" institution under applicable federal
regulations.
YEAR 2000
The Company utilizes extensive electronic data processing hardware and
software in its banking operations, among other things, to process and record
customer transactions, determine and collect revenue to be earned and expenses
to be paid in connection with customer transactions, maintain and report
customer transaction information, record and manage the Company's short-term and
long-term investments, accounting and financial management, and risk management.
The Company also relies on certain vendors to provide critical services to the
Company's banking operations, including telecommunications, loan servicing and
correspondent banking. Failure of the electronic data processing hardware or
software of the Company, its third party service bureaus, or certain vendors to
properly recognize the Year 2000 could result in a significant disruption of the
Company's banking operations.
The Company's customer transactions are processed through a network of
electronic data processing workstations in its branch offices and loan servicing
department and are recorded on electronic data processing hardware and software,
a substantial portion of which are maintained by two third party service
bureaus. The Company has replaced the majority of its hardware or software in
its branch offices to ensure compliance with Year 2000 issues, while one of the
Company's third party service bureaus is working with the Company to convert its
customer transaction hardware and software to a more advanced version which is
expected to be completed in February 1999 and which will also be Year 2000
compliant. The third party service bureau which processes the Company's loan
servicing transactions is also expected to be Year 2000 compliant. The Company
has replaced the majority of its hardware and software used in its operations as
necessary for Year 2000 compliance. The Company is also seeking Year 2000
compliance certifications from its major telecommunications, loan servicing and
correspondent banking vendors. While a portion of the Company's financial assets
and liabilities are with commercial businesses and government sponsored
entities, the Company's loans and deposits are primarily with individuals. As a
result, the Company does not expect any significant disruptions resulting from
customers that may not be Year 2000 compliant.
While the Company does not anticipate any difficulties becoming Year
2000 compliant with its third-party service bureaus, the Company continues to
monitor the feasibility of using a substitute third-party service bureau in the
event of such difficulties. Following the February 1999 conversion, should
14
<PAGE>
any operational problems arise regarding compliance with Year 2000, the Company
will immediately pursue an alternative plan. Management is unable at this time
to estimate the additional costs should such alternative plans become necessary.
The Company has designated a Year 2000 task force under the direction
of a senior officer of the Company which is identifying and coordinating the
Company's efforts to become Year 2000 compliant. Additionally, the Company and
its banking subsidiary are subject to regulation and supervision by the OTS
which regularly conducts reviews of the safety and soundness of the Company's
operations, including the Company's progress in becoming Year 2000 compliant.
Failure by the Company to adequately prepare for Year 2000 issues could
negatively impact the Company's banking operations resulting in restrictions on
its banking operations by the OTS. No such restrictions exist at this time, nor
does the Company expect any such restrictions resulting from failure to address
Year 2000 issues.
The Company has estimated the costs associated with becoming Year 2000
compliant to be approximately $666,000, of which approximately $538,000 has been
incurred through December 31, 1998.
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 1998 AND
1997.
NET INCOME AFTER PREFERRED STOCK DIVIDENDS
The Company had net income after preferred stock dividends of $208,000
for the three months ended December 31, 1998, compared to net income after
preferred stock dividends of $1.6 million for the three months ended December
31, 1997. Below is a more detailed discussion of each major category of income
and expenses.
NET INTEREST INCOME
Net interest income before provision for loan losses increased by $0.7
million, or 7.4%, to $10.1 million for the three months ended December 31, 1998
from $9.4 million for the three months ended December 31, 1997. This increase
was attributable to an increase in average interest-earning assets of $1.3
billion, or 56.5%, to $3.6 billion for the three months ended December 31, 1998
from $2.3 billion for the three months ended December 31, 1997 partially offset
by a decrease in the net interest margin to 1.17% for the three months ended
December 31, 1998 from 1.66% for the three months ended December 31, 1997. The
increase in average interest-earning assets was primarily due to the purchase of
$2.7 billion of residential mortgage loans during the 1998 fiscal year. The
decrease in the net interest margin was due to a decrease in the yield on
interest-earning assets to 6.48% (7.13% prior to premium amortization) for the
three months ended December 31, 1998 from 7.13% for the three months ended
December 31, 1997, primarily attributable to the lower yields on the loans
purchased, partially offset by a 28 basis point decrease in the cost of
interest-bearing liabilities to 5.46% for the three months ended December 31,
1998 from 5.74% for the three months ended December 31, 1997.
The increase in interest income of $16.7 million, or 40.2%, to $58.1
million for the three months ended December 31, 1998 from $41.5 million for the
three months ended December 31, 1997, primarily reflects increases in interest
and fees on loans of $13.9 million and a $1.9 million increase in interest on
mortgage-backed securities. This increase in interest and fees on loans is due
to an increase in average
15
<PAGE>
loans outstanding of $0.9 billion, or 42.9%, to $3.0 billion for the
three months ended December 31, 1998 from $2.1 billion for the three months
ended December 31, 1997 which resulted primarily from purchases of residential
loans in the secondary mortgage market. The results of operations for the three
months ended December 31, 1998 reflect an acceleration in the amortization of
premiums on purchased loans and mortgage-backed securities. The amortization of
premiums, net of discounts and deferred origination costs, increased from $1.0
million for the three months ended December 31, 1997 to $6.1 million for the
three months ended December 31, 1998. The increase in premium amortization was
largely the result of increased prepayments on purchased mortgage loans and
mortgage-backed securities. Prepayments on purchased mortgage loans and
mortgage-backed securities also negatively affect interest income since such
loans and securities are generally serviced by other entities who only remit
funds received from prepayments on a monthly basis, which results in a loss of
interest income from the delay in remittance and use of funds from such
prepayments. As a result of prepayments the yield on loans and mortgage-backed
securities declined from 7.10% and 7.70%, respectively, for the three months
ended December 31, 1997 to 6.68% and 4.79%, respectively, for the three months
ended December 31, 1998. This 42 and 291 basis point drop in the yield earned on
loans and mortgage-backed securities, respectively, was a significant factor in
the decline of the yield on interest earning assets. If the current interest
rate environment continues, a significant portion of the premium on purchased
mortgage loans and mortgage-backed security could continue to be expensed in a
relatively short term period. As of December 31, 1998 the Company had $24.1
million of premiums on purchased loans and on a mortgage-backed security related
to the securitization of a pool of the Company's purchased loans. Of these
premiums, up to approximately 70% are associated with one-year adjustable rate
mortgage loans with an index tied to the U.S. Treasury adjusted to a constant
maturity published by the Federal Reserve. The Company continues to closely
monitor prepayments to determine any effects on net interest income. See Item 3,
"Quantitative and Qualitative Disclosures About Market Risk," for a further
discussion about the effects of prepayments on net interest income.
The increase in interest expense of $16.0 million, or 49.8%, to $48.1
million for the three months ended December 31, 1998 from $32.1 million for the
three months ended December 31, 1997 reflects an increase in interest expense on
interest bearing deposits of $10.1 million, or 57.4%, from $17.6 million for the
three months ended December 31, 1997, to $27.7 million for the three months
ended December 31, 1998, an increase in interest expense on FHLB advances of
$2.8 million, or 25.0%, from $11.2 million for the three months ended December
31, 1997 to $14.0 million for the three months ended December 31, 1998, an
increase in preferred dividends of trust subsidiaries of $2.4 million, or 82.8%,
to $5.3 million for the three months ended December 31, 1998 from $2.9 million
for the three months ended December 31, 1997, and an increase in interest
expense on securities sold under agreements to repurchase of $0.7 million, or
175%, to $1.1 million for the three months ended December 31, 1998 from $0.4
million for the three months ended December 31, 1997. The increase in each of
these categories reflects significant increases in the average balance for each
category during the period. There was an increase in average interest-bearing
deposits of $0.9 billion, or 69.2%, to $2.2 billion for the three months ended
December 31, 1998, from $1.3 billion for the three months ended December 31,
1997. The average rate paid on interest-bearing deposits decreased 33 basis
points to 5.04% for the three months ended December 31, 1998 from 5.37% for the
three months ended December 31, 1997. As a result of management's efforts to
control the Company's cost of funds, the rate paid on interest bearing
liabilities decreased, particularly in the quarter ended December 31, 1998, by
28 basis points from 5.74% for the three months ended December 31, 1997 to 5.46%
for the three months ended December 31, 1998.
16
<PAGE>
PROVISION FOR LOAN LOSSES
The provision for loan losses for the three months ended December 31,
1998 was $400,000 as compared to $650,000 for the three months ended December
31, 1997. Based on management's analysis and review this allocation was
sufficient to support the increase in non-performing assets as of December 31,
1998. (See "Discussion of Financial Condition Changes from September 30, 1998 to
December 31, 1998 - Assets"). The provision for loan losses represents
management's estimate of the charge to operations after reviewing the nature,
volume, delinquency status, and inherent risk in the loan portfolio in relation
to the allowance for loan losses.
NON-INTEREST INCOME
Non-interest income for the three months ended December 31, 1998 was
$1.3 million compared with $1.6 million for the three months ended December 31,
1997, a decrease of $300,000, or 18.8%. This decrease reflects a reduction in
income related to a substantial reduction in the sales of loans and
mortgage-backed securities during the quarter ended December 31, 1998, partially
offset by an increase in net service fee income and other non-interest income.
NON-INTEREST EXPENSES
Operating expenses increased $3.2 million, or 45.7%, to $10.2 million
for the three months ended December 31, 1998 compared to $7.0 million for the
three months ended December 31, 1997. The increase in expenses is attributable
to the growth the Company has experienced, including the expenses of the
acquisitions of Consumers Bancorp, Inc. and Central Bank during the second and
third quarters of the 1998 fiscal year. Total non-interest expenses, as a
percentage of average assets, decreased from 1.17% for the three months ended
December 31, 1997 to 1.10% for the three months ended December 31, 1998.
INCOME TAXES
The income tax provision was $364,000 for the three months ended
December 31, 1998, compared to $1.4 million for the three months ended December
31, 1997, a decrease of $1.0 million or 71.4%. This change was due to the
Company's lower pre-tax earnings during the three months ended December 31,
1998, compared to the three months ended December 31, 1997, partially offset by
the increase in the effective income tax rate due to the effect of
non-deductible goodwill.
PREFERRED STOCK DIVIDENDS
Preferred stock dividends for the three months ended December 31, 1998
were $188,000, a decrease of $144,000 or 43.4%, as compared to $332,000 for the
three months ended December 31, 1997. This decrease is the result of the
retirement in January 1998 of the Noncumulative Convertible Preferred Stock,
Series 1993, partially offset by the issuance of the Series B Preferred Stock in
October 1997 and April 1998.
17
<PAGE>
YIELDS EARNED AND RATES PAID
The following table sets forth certain information relating to the
categories of the Company's interest-earning assets and interest-bearing
liabilities for the periods indicated. All yield and rate information is
calculated on an annualized basis. Yield and rate information for a period is
average information for the period calculated by dividing the income or expense
item for the period by the average balances during the period of the appropriate
balance sheet item. Net interest margin is the product of average
interest-earning assets and the annualized yield earned minus the product of
average interest-bearing liabilities and the annualized rate paid, divided by
average interest-earning assets. Non-accrual loans are included in asset
balances for the appropriate period, whereas recognition of interest on such
loans is discontinued and any remaining accrued interest receivable is reversed,
in conformity with federal regulations. The yields and net interest margins
appearing in the following table have been calculated on a pre-tax basis.
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31,
----------------------------------------------------------------------------
1998 1997
-------------------------------------- -------------------------------------
AVERAGE AVERAGE
BALANCE INTEREST YIELD/RATE BALANCE INTEREST YIELD/RATE
------------ --------- ---------- ------------ --------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans (1) $ 3,040,126 $ 50,837 6.68% $ 2,071,826 $ 36,893 7.10%
Mortgage-backed securities
and collateralized mortgage
obligations (1) 340,244 4,073 4.79% 113,910 2,192 7.70%
Short-term investments (2) 66,228 848 5.01% 28,383 420 5.79%
Tax certificates 36,542 628 6.87% 44,198 831 7.52%
Long-term investments and
FHLB stock 95,203 1,759 7.34% 62,062 1,114 7.14%
------------ --------- ----- ------------ --------- -----
Total interest-earning assets $ 3,578,343 $ 58,145 6.48% $ 2,320,379 $ 41,450 7.13%
------------ --------- ----- ------------ --------- -----
Interest-bearing liabilities:
NOW/money market $ 240,954 $ 1,829 3.01% $ 106,372 $ 748 2.79%
Savings 315,861 3,641 4.57% 168,177 1,991 4.70%
Certificates of deposit 1,620,860 22,196 5.43% 1,023,980 14,845 5.75%
Trust preferred securities 218,500 5,288 9.68% 116,000 2,908 10.03%
FHLB advances and other
borrowings 1,082,854 15,102 5.47% 792,391 11,591 5.72%
------------ --------- ----- ------------ --------- -----
Total interest-bearing
liabilities $ 3,479,029 $ 48,056 5.46% $ 2,206,920 $ 32,083 5.74%
------------ --------- ----- ------------ --------- -----
Excess of interest-earning assets
over interest-bearing liabilities $ 99,314 $ 113,459
============ ============
Net interest income $ 10,089 $ 9,367
========= =========
Interest rate spread 1.02% 1.39%
===== =====
Net interest margin 1.17% 1.66%
===== =====
Ratio of interest-earning assets to
interest-bearing liabilities 102.85% 105.14%
====== ======
<FN>
- ----------------------
(1) The yields and rates along with the corresponding interest rate spread
and net interest margin for the three months ended December 31, 1998
reflect an acceleration in the amortization of premiums paid on
purchased loans and mortgage-backed securities.
(2) Short-term investments include FHLB overnight deposits, securities
purchased under agreements to resell, federal funds sold and
certificates of deposit.
</FN>
</TABLE>
18
<PAGE>
RATE/VOLUME ANALYSIS
The following table presents, for the periods indicated, the changes in
interest income and the changes in interest expense attributable to the changes
in interest rates and the changes in the volume of interest-earning assets and
interest-bearing liabilities. For each category of interest-earning assets and
interest-bearing liabilities, information is provided on changes attributable
to: (i) changes in volume (change in volume multiplied by prior year rate); (ii)
changes in rate (change in rate multiplied by prior year volume); (iii) changes
in rate/volume (change in rate multiplied by change in volume); and (iv) total
changes in rate and volume.
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31,
----------------------------------------------------------------
1998 VS. 1997
----------------------------------------------------------------
INCREASE (DECREASE) DUE TO
----------------------------------------------------------------
CHANGES CHANGES CHANGES TOTAL
IN IN IN INCREASE/
VOLUME RATE RATE/VOLUME (DECREASE)
-------- --------- ----------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Interest income attributable to:
Loans $ 16,847 $ (2,011) $ (892) $ 13,944
Mortgage-backed securities and
collateralized mortgage obligations 4,356 (829) (1,646) 1,881
Short-term investments (1) 560 (57) (75) 428
Tax certificates (144) (71) 12 (203)
Long-term investments and
FHLB stock 607 4 34 645
-------- --------- -------- --------
Total interest-earning assets 22,226 (2,964) (2,567) 16,695
-------- --------- -------- --------
Interest expense attributable to:
NOW/money market 946 60 75 1,081
Savings 1,749 (53) (46) 1,650
Certificates of deposit 8,653 (822) (480) 7,351
Trust preferred securities 2,570 (100) (90) 2,380
FHLB advances and other
borrowings 4,240 (550) (179) 3,511
-------- --------- -------- --------
Total interest-bearing liabilities 18,158 (1,465) (720) 15,973
-------- --------- -------- --------
Increase (decrease) in net interest income $ 4,068 $ (1,499) $ (1,847) $ 722
======== ========= ======== ========
<FN>
- ------------
(1) Short-term investments include FHLB overnight deposits, securities
purchased under agreements to resell, federal funds sold and
certificates of deposit.
</FN>
</TABLE>
19
<PAGE>
RESTRUCTURING
In the second quarter of fiscal 1999, the Company announced that it was
in the process of comprehensively reviewing all of its lines of business with
the goals of restructuring and consolidating its organization, in order to lower
expenses, increase profit margins, and make better use of its deposit base. The
review involves analyzing the profitability of each of the Company's business
segments, including, in particular, evaluating the activities and profitability
of purchasing adjustable rate mortgages in the secondary market. As a result of
the review, which is still in progress, the negative impact of prepayments on
the Company's income in recent quarters and expectations of a continuing flat
yield curve, the Company is in the process of altering its practice of acquiring
loans in the secondary market, and is turning its focus to producing assets by
increasing commercial, consumer and residential loan activity and by offering
new products and services designed to meet its customers' financial needs. In
order to implement this strategy, the Company is restructuring its organization
by streamlining management and other personnel and allocating more resources to
more profitable business lines. The Company has discontinued purchasing one-year
adjustable rate mortgages with an index tied to the U.S. Treasury adjusted to a
constant maturity published by the Federal Reserve, and may consolidate or
discontinue other business lines. As a result of the restructuring, the Company
is re-assessing the staffing of various business lines and has hired, and may
continue to hire, new personnel as necessary to implement the strategy adopted
pursuant to the restructuring review. The Company expects to complete and
announce details of the restructuring during the quarter ending March 31, 1999,
and anticipates that there may be a charge to income for that quarter relating
to the discontinuance and consolidation of various business lines of the Bank.
20
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The discussion contained in the Company's Annual Report on Form 10-K
for the year ended September 30, 1998, under Item 7a, "Quantitative and
Qualitative Disclosures about Market Risk," provides detailed quantitative and
qualitative disclosures about market risk and should be referenced for
information thereon. In addition, the following discussion addresses the sources
and effects of developments during the quarter ended December 31, 1998 which
related to refinancing risks.
REFINANCING RISKS. A significant portion of the Company's loans
receivable are single-family residential mortgages that generally have an
imbedded option that allows the borrower to prepay the loan at any time without
penalty. A substantial portion of these loans have been purchased by the Company
in the secondary mortgage market at a premium.
In the current interest rate environment, when long-term interest rates
are generally low on a historical basis and the spread between short-term rates
and long-term rates is relatively narrow, prepayments of adjustable rate
mortgage ("ARM") loans and higher fixed-rate mortgages tend to accelerate. The
Company's results of operations for the three months ended December 31, 1998
reflect an acceleration in the amortization of premiums on purchased loans and
mortgage-backed securities. The amortization of premiums, net of discounts and
deferred origination costs, increased from $1.0 million for the three months
ended December 31, 1997 to $6.1 million for the three months ended December 31,
1998. The increase in premium amortization was largely the result of increased
prepayments on purchased mortgage loans and mortgage-backed securities.
Prepayments on purchased mortgage loans and mortgage-backed securities also
negatively affect interest income since such loans and securities are generally
serviced by other entities who only remit funds received from prepayments on a
monthly basis, which results in a loss of interest income from the delay in
remittance and use of funds from such repayments. As a result of prepayments the
yield on loans and mortgage-backed securities declined from 7.10% and 7.70%,
respectively, for the three months ended December 31, 1997 to 6.68% and 4.79%,
respectively, for the three months ended December 31, 1998. This 42 and 291
basis point drop in the yield earned on loans and mortgage-backed securities,
respectively, was a significant factor in the decline of the yield on interest
earning assets.
In addition, at December 31, 1998, $481.8 million of the Company's ARMs
had teaser rates, which will be subject to interest rate adjustments within the
next twelve months. Teaser rate loans may tend to be prepaid near the end of the
teaser period in the current interest rate environment, creating higher levels
of prepayments on loans overall which the Company may not be able to reinvest
quickly enough and at sufficient interest rates to mitigate the effect on it net
interest margin.
Premiums, net of discounts and deferred origination costs, which at
December 31, 1998 were $26.9 million, are recognized as a reduction to interest
income using the interest method over the contractual life of the loans adjusted
for estimated prepayments, based on the Company's historical prepayment
experience. As prepayments accelerate, the Company's historical prepayment
experience changes, resulting in a shortening of the estimated life of the loan
portfolio, and an increase in the rate at which premiums are expensed, resulting
in a greater reduction in interest income. Accelerated prepayments could,
therefore, have a material adverse effect on the Company's results of
operations. Based on a continuation of the current interest rate environment, a
significant portion of the premium may be expensed in a relatively short term
period.
21
<PAGE>
The Company has reviewed its practice of purchasing mortgage loans on
the secondary market, particularly ARM loans, and will be turning its focus to
originating its own loans. This change is expected to mitigate the effect of
accelerated prepayments which have continued throughout the first quarter of
fiscal 1999. At December 31, 1998 the Company had $24.1 million of premiums, on
purchased loans and on a mortgage-backed security related to the securitization
of a pool of the Company's purchased loans. Of these premiums, up to
approximately 70% are associated with one year ARM loans with an index tied to
the U.S. Treasury adjusted to a constant maturity published by the Federal
Reserve, and such loans have constituted the majority of the prepayments. The
Company continues to monitor prepayments to determine any effects on net
interest income. See "Comparison of Operating Results for the Three Months Ended
December 31, 1998 and 1997 - Restructuring" for further discussion of the
Company's change of strategy.
22
<PAGE>
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On December 15, 1998 the Board of Directors of the Company approved an
amendment to the Company's Articles of Incorporation which (i) increased the
number of shares of Class A Common Stock allocated to the Series I Class A
Common Stock from 20,000,000 shares to 30,000,000 shares, and (ii) increased the
number of shares of Preferred Stock allocated to the Noncumulative Convertible
Preferred Stock, Series B from 500,000 shares to 1,000,000 shares. The amendment
did not change the number of authorized shares of the Class A Common Stock or
Preferred Stock, or alter the rights of the holders of the Class A Common Stock
or the Noncumulative Convertible Preferred Stock, Series B.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the annual meeting of stockholders of the Company held on
January 28, 1999 the stockholders voted on the election of directors to the
Company's Board of Directors and the approval of an amendment to the Company's
1996 Incentive Compensation and Stock Award Plan (the "1996 Plan").
The stockholders voted to elect the nominees for directors as
follows:
VOTES FOR VOTES WITHHELD
--------- --------------
Mehdi Ghomeshi 2,298,436 20,617
Allen M. Bernkrant 2,297,827 21,226
Earline G. Ford 2,298,328 20,725
Bruce D. Friesner 2,298,445 20,608
The stockholders voted to approve an amendment to the 1996
Plan which provided for an increase in the number of shares of the Company's
Class A Common Stock and Class B Common Stock (together, the "Common Stock") and
Noncumulative Convertible Preferred Stock, Series B (the "Series B Preferred
Stock"), issuable under the 1996 Plan, to 2,050,000 shares of Common Stock and
650,000 shares of Series B Preferred Stock. Voting on the amendment was as
follows:
VOTES FOR VOTES AGAINST VOTES ABSTAINING
--------- ------------- ----------------
1,354,835 343,924 9,083
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
3.1 Articles of Incorporation of the Company, as
amended on December 15, 1998.
27.1 Financial Data Schedule
23
<PAGE>
(b) Reports on Form 8-K.
The Company filed the following current reports on
Form 8-K during the quarter for which this report is
filed:
(i) Current Report on Form 8-K dated November 9,
1998, reporting the Company's announcement of
fourth quarter and annual earnings for the
quarter and fiscal year ended September 30,
1998.
(ii) Current Report on Form 8-K dated December 21,
1998 reporting the resignation of Clifford A.
Hope from the position of Executive Vice
President and Chief Financial Officer of the
Company and BankUnited, FSB.
24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed by the undersigned
thereunto duly authorized.
BANKUNITED FINANCIAL CORPORATION
By: /s/ DIANE DeLELLA
--------------------------------------------
Diane DeLella
Vice President, Chief Financial Officer and
Controller
Date: February 16, 1999
25
<PAGE>
BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES
Form 10-Q for the Quarter Ended December 31, 1998
INDEX TO EXHIBITS
SEQUENTIALLY
EXHIBIT NO. NUMBERED PAGE
- ----------- -------------
3.1 Articles of Incorporation of the Company,
as amended on December 15, 1998..................
27.1 Financial Data Schedule..........................
26
ARTICLES OF INCORPORATION OF
BANKUNITED FINANCIAL CORPORATION
(as amended)
ARTICLE I
NAME
The name of the corporation is "BANKUNITED FINANCIAL CORPORATION" (the
"Corporation").
ARTICLE II
PRINCIPAL OFFICE
The principal office and mailing address of the Corporation is 255
Alhambra Circle, Coral Gables, Florida 33134.
ARTICLE III
REGISTERED OFFICE AND AGENT
The street address of the Corporation's initial registered office is
255 Alhambra Circle, Coral Gables, Florida 33134. The name of its registered
agent at such address is Nancy L. Ashton.
ARTICLE IV
TERM OF CORPORATE EXISTENCE
The duration of this Corporation is to be perpetual.
ARTICLE V
PURPOSE
The Corporation is a financial institution holding company and may
engage in any activity or business permitted under the laws of the State of
Florida.
ARTICLE VI
CAPITAL STOCK
The total number of shares of all classes of stock that the Corporation
is authorized to issue is 43,000,000 shares, of which 30,000,000 shall be Class
A Common Stock, $.01 par value (the "Class A Common Stock"), 3,000,000 shall be
Class B Common Stock, $.01 par value (the "Class B Common Stock"), and
10,000,000 shall be Preferred Stock, $.01 par value (the "Preferred Stock"). No
holder of the Corporation's stock shall have any preemptive right to acquire the
Corporation's securities.
CLASS A COMMON STOCK. The maximum number of shares of Class A
Common Stock that the Corporation is authorized to have outstanding is
30,000,000 shares at a par value of $.01 per share. The Class A Common
Stock shall be a special class of stock issuable from time to time in
one or more series as specified in Section 607.0602 of the Florida
Business Corporation Act (or in such other manner as may be permitted
by law), as determined from time to time by the Board of Directors and
stated in the resolution or resolutions providing for the issuance of
such series of Class A Common Stock adopted by the Board of Directors
pursuant to authority hereby vested in it, each such series to be
appropriately designated, prior to the issuance of any shares thereof,
by some distinguishing letter, number, or title. The Board of Directors
is hereby expressly granted authority to fix the authorized number of
shares of each series of common stock, and to fix the terms of such
series, including, but not limited to, the following:
(a) the rate or manner of payment of dividends;
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<PAGE>
(b) whether shares may be redeemed and, if so, the
redemption price and the terms and conditions of redemption;
(c) the amount payable upon shares in the event of
voluntary or involuntary liquidation;
(d) sinking fund provisions, if any, for the
redemption or purchase of shares;
(e) the terms and conditions, if any, on which shares
may be converted;
(f) voting rights, if any; and
(g) the other special rights, if any, and the
qualifications, limitations or restrictions thereof, of the shares of
such series.
The designation of each particular series of Class A Common Stock and
its terms in respect of the foregoing particulars shall be fixed and
determined by the Board of Directors in any manner permitted by law and
stated in the resolution or resolutions providing for the issuance of
such shares adopted by the Board of Directors pursuant to authority
hereby vested in it, before any shares of such series are issued. The
Board of Directors may from time to time increase (but not above the
total number of authorized shares of the class) the number of shares of
any series of Class A Common Stock already created by providing that
any unissued Class A Common Stock shall constitute part of such series,
or may decrease (but not below the number of shares thereof then
outstanding) the number of shares of any series of Class A Common Stock
already created by providing that any unissued shares previously
assigned to such series shall no longer constitute part thereof. The
Board of Directors is hereby empowered to classify or reclassify any
unissued Class A Common Stock by fixing or altering the terms thereof
in respect of the above-mentioned particulars and by assigning the same
to an existing or newly created series from time to time before the
issuance of such shares.
For purposes of determining whether a non-voting series of
Class A Common Stock shall be entitled to vote as a class pursuant to
Section 607.1004 of the Florida Business Corporation Act (or any
successor section or statute hereinafter enacted) on an amendment to
the Corporation's Articles of Incorporation, an amendment that
increases the total number of authorized shares of Class A Common Stock
shall not be considered to be an adverse change to the terms of any
individual series of Class A Common Stock and shall not require a vote
or the consent of the holders of any such series of Class A Common
Stock.
Set forth in Appendix A hereto is the Statement of Designation
setting forth the terms of the Series I Class A Common Stock.
CLASS B COMMON STOCK. The maximum number of shares of Class B
Common Stock that the Corporation is authorized to have outstanding is
3,000,000 shares at a par value of $.01 per share. Holders of Class B
Common Stock are entitled to vote on all questions required by law on
the basis of one vote per share and there shall be no cumulative
voting. The shares of Class B Common Stock shall be convertible into
shares of other classes of capital stock of the Corporation in such
manner as may be provided by the Board of Directors by resolution.
Set forth in Appendix A hereto is the Statement of Designation
setting forth the conversion rights of the Class B Common Stock.
PREFERRED STOCK. The maximum number of shares of Preferred
Stock that the Corporation is authorized to have outstanding is
10,000,000 shares at a par value of $.01 per share. The Preferred Stock
may be issued from time to time in one or more series as specified in
Section 607.0602 of the Florida Business Corporation Act (or in such
other manner as may be permitted by law), as determined from time to
time by the Board of Directors and stated in the resolution or
resolutions providing for the issuance of such series of Preferred
Stock adopted by the Board of Directors pursuant to authority hereby
vested in
2
<PAGE>
it, each such series to be appropriately designated, prior to the
issuance of any shares thereof, by some distinguishing letter, number,
or title. The Board of Directors is hereby expressly granted authority
to fix the authorized number of shares of each series of Preferred
Stock, and to fix the terms of such series, including, but not limited
to, the following:
(a) the rate or manner of payment of dividends;
(b) whether shares may be redeemed and, if so, the
redemption price and the terms and conditions of redemption;
(c) the amount payable upon shares in the event of
voluntary or involuntary liquidation;
(d) sinking fund provisions, if any, for the redemption
or purchase of shares;
(e) the terms and conditions, if any, on which shares may
be converted;
(f) voting rights, if any; and
(g) the other special rights, if any, and the
qualifications, limitations or restrictions thereof, of the shares of
such series.
The designation of each particular series of Preferred Stock and its
terms in respect of the foregoing particulars shall be fixed and
determined by the Board of Directors in any manner permitted by law and
stated in the resolution or resolutions providing for the issuance of
such shares adopted by the Board of Directors pursuant to authority
hereby vested in it, before any shares of such series are issued. The
Board of Directors may from time to time increase (but not above the
total number of authorized shares of the class) the number of shares of
any series of Preferred Stock already created by providing that any
unissued Preferred Stock shall constitute part of such series, or may
decrease (but not below the number of shares thereof then outstanding)
the number of shares of any series of Preferred Stock already created
by providing that any unissued shares previously assigned to such
series shall no longer constitute part thereof. The Board of Directors
is hereby empowered to classify or reclassify any unissued Preferred
Stock by fixing or altering the terms thereof in respect of the
above-mentioned particulars and by assigning the same to an existing or
newly created series from time to time before the issuance of such
shares.
For purposes of determining whether a non-voting series of
Preferred Stock shall be entitled to a vote as a class pursuant to
Section 607.1004 of the Florida Business Corporation Act (or any
successor section or statute hereinafter enacted) on an amendment to
the Corporation's Articles of Incorporation, an amendment that
increases the total number of authorized shares of Preferred Stock
shall not be considered to be an adverse change to the terms of any
individual series of Preferred Stock and shall not require a vote or
the consent of the holders of any such series of Preferred Stock.
Set forth in Appendices B, C, D, E, F and G hereto are the
Statements of Designation setting forth the terms of the Noncumulative
Convertible Preferred Stock, Series A; Noncumulative Convertible
Preferred Stock, Series B; Noncumulative Convertible Preferred Stock,
Series C; Noncumulative Convertible Preferred Stock, Series C-II; 8%
Noncumulative Convertible Preferred Stock, Series 1993; and 9%
Noncumulative Perpetual Preferred Stock, respectively."
ARTICLE VII
DISTRIBUTIONS TO STOCKHOLDERS
The Board of Directors may authorize and the Corporation may make
distributions to its stockholders subject to (a) the other provisions of these
Articles of Incorporation, and (b) except as the following otherwise provides,
the law currently in effect or hereinafter enacted:
3
<PAGE>
No distribution may be made if, after giving it effect:
(i) The Corporation would not be able to pay its
debts as they become due in the usual course of business; or
(ii) The Corporation's total assets would be less than the sum of
its total liabilities plus, unless the Board of Directors
determines otherwise, the amount that would be needed, if the
Corporation were to be dissolved at the time of distribution,
to satisfy the preferential rights upon dissolution of
stockholders whose preferential rights are superior to those
receiving the distribution.
ARTICLE VIII
DIRECTORS
The number of directors constituting the Board of Directors shall be
such number, equal to or greater than one, as may be fixed from time to time in
the bylaws of the Corporation.
Except as may be set forth in Statements of Designation creating series
of Class A Common Stock and Preferred Stock, the Board of Directors shall be
divided into three classes of directors of as nearly equal numbers as is
possible, designated Class I, Class II and Class III, respectively, serving
staggered three-year terms, with the term of a class expiring at each Annual
Meeting of Stockholders. At each Annual Meeting of Stockholders a number of
directors equal to the number of directors of the class whose term expires at
such meeting (or the number of directors properly nominated and qualified for
election) shall be elected to hold office until the third succeeding Annual
Meeting of Stockholders after their election. In all cases, each director shall
serve until a successor has been elected and qualified or until such director's
earlier resignation (including, without limitation, as may be provided by the
terms of an employment agreement), removal from office, death or disability.
ARTICLE IX
LIMITATION OF LIABILITY
The Corporation shall indemnify and may insure its officers and
directors to the fullest extent permitted by law currently in effect or
hereinafter enacted.
ARTICLE X
AMENDMENT
These Articles of Incorporation may be amended in the manner authorized
by law at the time of amendment.
ARTICLE XI
ACTION BY STOCKHOLDERS WITHOUT A MEETING
No action required or permitted to be taken at an Annual Meeting of
Stockholders or at a Special Meeting of Stockholders may be taken without a
meeting. The power of the stockholders to consent in writing, without a meeting,
to the taking of any action is expressly denied hereby.
ARTICLE XII
AFFILIATED TRANSACTIONS AND CONTROL-SHARE ACQUISITIONS
The Corporation shall not be governed by the Affiliated Transactions
and Control-Share Acquisitions sections (Sections 607.0901 through 607.0903) of
the Florida Business Corporation Act or any successor sections or statutes
hereinafter enacted.
4
<PAGE>
ARTICLE XIII
INCORPORATOR
The name and address of the incorporator of the Corporation is Maria E.
Chang, 1221 Brickell Avenue, 25th Floor, Miami, Florida 33131.
The undersigned incorporator has executed these Articles of
Incorporation this 10th day of January, 1995.
/S/ MARIA E. CHANG
-----------------------------------
Maria E. Chang, Incorporator
IN WITNESS WHEREOF, I, Nancy L. Ashton, having been named Registered
Agent and to accept service of process for BankUnited Financial Corporation at
the place designated in these Articles of Incorporation, hereby accept the
appointment as Registered Agent and agree to act in this capacity. I further
agree to comply with the provisions of all statutes relating to the proper and
complete performance of my duties, and I am familiar with and accept the
obligations of my position as Registered Agent this 10th day of January, 1995.
/S/ NANCY L. ASHTON
---------------------------------
Nancy L. Ashton, Registered Agent
STATE OF FLORIDA )
)SS:
COUNTY OF DADE )
The foregoing instrument was acknowledged before me this ____ day of
January, 1995 by Nancy L. Ashton, who is personally known to me and who did take
an oath.
_________________________________
Notary Public
State of Florida
Printed Name:____________________
Commission No.:__________________
My Commission Expires:
5
<PAGE>
APPENDIX A
STATEMENT OF DESIGNATION
OF
SERIES I CLASS A COMMON STOCK
AND
CLASS B COMMON STOCK
OF
BANKUNITED FINANCIAL CORPORATION
WHEREAS, pursuant to Article VI of the Articles of Incorporation of
BankUnited Financial Corporation (the "Corporation") as in effect on the date
hereof and Section 607.0602 of the Florida Business Corporation Act, the Board
of Directors of the Corporation is authorized, within limitations set forth
therein, (i) to divide the Corporation's Class A Common Stock, par value $.01
per share ("Class A Common Stock"), into series and fix and determine the
relative rights and preferences of the shares of any series so established, and
(ii) to fix and determine certain rights of the Corporation's Class B Common
Stock, par value $.01 per share ("Class B Stock"); and
WHEREAS, the Board of Directors desires to (i) establish a series of the
Class A Common Stock, designating such series "Series I Class A Common Stock,"
(ii) allocate 30,000,000 shares of the authorized Class A Common Stock to the
Series I Class A Common Stock, (iii) fix and determine the relative rights and
preferences of the shares of the Series I Class A Common Stock, and (iv) fix and
determine the conversion rights of the Class B Stock;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors (i) hereby
allocates a portion of the Class A Common Stock to a series thereof designated
Series I Class A Common Stock, and fixes and determines the relative rights and
preferences of the Series I Class A Common Stock, as set forth in Section I
below, and (ii) hereby sets forth in Section II below the conversion rights of
the Class B Stock.
I. DESIGNATION, ALLOCATION AND RIGHTS OF SERIES I CLASS A COMMON
STOCK.
(1) DESIGNATION AND ALLOCATION. 30,000,000 of the 30,000,000
shares of Class A Common Stock authorized by the Articles of Incorporation
of the Corporation hereby are determined to be and shall be of a series
designated as Series I Class A Common Stock (herein called "Series I Class
A Stock")."
(2) DIVIDENDS. The holders of shares of the Series I Class A
Common Stock shall be entitled to receive, when, as, and if declared by the
Board of Directors and out of the assets of the Corporation which are by
law available for the payment of dividends to the holders of common stock,
a per share dividend equal to 110% of the amount per share of any dividend
declared on Class B Stock (the "Dividend Rate"). The Dividend Rate shall be
subject to adjustment as provided by the formula set forth in subsection
I(3) of this resolution.
(3) DIVIDEND RATE ADJUSTMENTS. The Dividend Rate shall be subject
to adjustment from time to time as follows:
(a) If the Corporation shall (i) pay a dividend in and on
shares of its Series I Class A Common Stock or Class B Stock, (ii)
subdivide its outstanding shares of Series I Class A Common Stock
or Class B Stock into a greater number of shares, (iii) combine
its outstanding shares of Series I Class A Common Stock or Class B
Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Series I Class A Common Stock or
Class B Stock any shares of its capital stock, then the Dividend
Rate in effect immediately prior thereto shall be adjusted so that
the holder of Series I Class A Common Stock or Class B Stock
entitled to receive a dividend upon his or her Series I Class A
Common Stock or Class B Stock after the record date fixing
stockholders to be affected by such event shall be entitled to
receive upon declaration of a dividend on common stock such
dividend which such holder would have been entitled to receive
after the happening of such event had such dividend been declared
and paid immediately prior to such record date. Such adjustment
shall be made whenever any of such events shall happen, and shall
also be effective retroactively as to the happening of any such
event between such record date and the payment of dividends on the
common stock of the Corporation.
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<PAGE>
(b) (i) If the Corporation has issued Series I Class A
Common Stock which is not listed on a national securities
exchange or traded over-the-counter by a nationally
recognized securities firm or association and the
Corporation shall issue rights or warrants to the holders
of any of its capital stock entitling them to subscribe
for or purchase shares of common stock at a price per
share less than the Book Value Per Share (as defined in
subsection II(4)(b)(iii) of this resolution) of such
common stock at the record date mentioned below; or
(ii) If the Corporation has issued Series I Class
A Common Stock which is listed on a national securities
exchange or traded over-the-counter by a nationally
recognized securities firm or association, and the
Corporation shall issue rights or warrants to the holders
of its capital stock entitling them to subscribe for or
purchase shares of common stock at a price per share less
than the current market price per share (as defined in
subsection II(4)(e) of this resolution) of such common
stock at the record date mentioned below; then, in either
of the above events, the Dividend Rate shall be adjusted
by multiplying the Dividend Rate existing immediately
prior to such event by a fraction as provided below:
(A) If the Class B Stock may be
subscribed for or purchased at less than the Book Value
Per Share or the current market price per share, as the
case may be, then the numerator of such fraction shall be
the number of shares of Class B Stock outstanding on the
date of issuance of such rights or warrants plus the
number of additional shares of Class B Stock offered for
subscriptions or purchase, and the denominator of which
shall be the number of shares of Class B Stock outstanding
on the date of issuance of such rights or warrants plus
the number of shares of Class B Stock which the aggregate
offering price of the total number of shares of Class B
Stock so offered would purchase based on current Book
Value Per Share at the record date mentioned below or
current market price per share (as defined in subsection
II(4)(e) of this resolution), as the case may be.
(B) If the Series I Class A Common Stock
may be subscribed for or purchased at less than the Book
Value Per Share or the current market price per share, as
the case may be, then the numerator of such fraction shall
be the number of shares of Series I Class A Common Stock
outstanding on the date of issuance of such rights or
warrants plus the number of shares of Series I Class A
Common Stock which the aggregate offering price of the
total number of shares of Series I Class A Common Stock so
offered would purchase based on Book Value Per Share at
the record date mentioned below or current market price
per share (as defined in subsection II(4)(e) of this
resolution), as the case may be, and the denominator of
which shall be the number of shares of Series I Class A
Common Stock outstanding on the date of issuance of such
rights or warrants plus the number of additional shares of
Series I Class A Common Stock offered for subscription or
purchase.
(iii) An adjustment to the Dividend Rate as
provided in subsections I(3)(b)(ii)(A) or (B), above,
shall be made whenever such rights or warrants are issued,
and also shall be effective retroactively as to dividends
declared on the common stock of the Corporation between
the record date for the determination of stockholders
entitled to receive such rights or warrants and the date
such rights or warrants are issued.
(c) No adjustment in the Dividend Rate shall be required
unless such adjustment would require an increase or decrease of at
least 2% in such Dividend Rate; provided, however, that any
adjustments which by reason of this subsection I(3)(c) are not
required to be made, and are not made, shall be carried forward
and taken into account in any subsequent adjustment.
(4) VOTING.
(a) Except as otherwise provided in the Articles of
Incorporation of the Corporation, or as provided in any resolution
of the Board of Directors or the stockholders of the Corporation,
the Series I Class A Common Stock, the Class B Stock, and the
Preferred Stock shall vote together as a single class on all
matters submitted to the stockholders of the Corporation for a
vote. In any such vote, each share of Series I Class A Common
Stock is entitled to cast 1/10 of the vote that each share of
Class B Stock is entitled to cast.
(b) Notwithstanding the provision contained in subsection
I(4)(a) above, in the event of any consolidation of the
Corporation with or merger of the Corporation into another
corporation, or in the event of any sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other
consideration) of
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<PAGE>
all or substantially all of the property or assets of the
Corporation to another corporation, then, in any such
consolidation, merger, sale, conveyance, exchange or transfer, if
the consideration per share (as adjusted consistent with the
provisions of Sections I and II hereof) to be received for the
shares of Series I Class A Common Stock differs in any substantial
kind or amount from the per share (as adjusted consistent with the
provisions of Sections I and II hereof) consideration to be
received for Class B Stock, the majority of the holders of the
outstanding Series I Class A Common Stock, by a separate vote of
the holders of the Series I Class A Common Stock, must approve
such consolidation, merger, sale, conveyance, exchange or
transfer; provided, however, that nothing in this subsection
I(4)(b) shall in any way grant any rights to the holders of the
Series I Class A Common Stock in connection with the sale of any
shares of the capital stock of the Corporation by a stockholder of
the Corporation to any person or entity other than the
Corporation. Notwithstanding any other provision of this
subsection I(4)(b), the receipt by the holders of the Series I
Class A Common Stock of limited voting stock in an acquiring
company shall not be deemed to be consideration which differs in
any substantial respect from that received by the holders of the
Class B Stock, provided such limited voting common stock bears
substantially the same relative rights and privileges to the
acquiring company's voting stock as the Series I Class A Common
Stock bears to the Class B Stock.
II. CONVERSION RIGHTS OF CLASS B STOCK.
(1) CONVERSION. Subject to and upon compliance with the provisions
of this resolution, the holder of any shares of Class B Stock may
at such holder's option convert any such shares of Class B Stock
into such number of fully paid and non-assessable shares of Series
I Class A Common Stock as are issuable pursuant to the formula set
forth in subsections II(3), (4) and (5) of this resolution.
No adjustment shall be made for dividends on any Series I
Class A Common Stock that shall be issuable because of the
conversion of shares of Class B Stock, but all dividends accrued
and unpaid on any Class B Stock up to and including the dividend
payment date immediately preceding the date of conversion shall
constitute a debt of the Corporation payable to the converting
holder.
(2) MECHANICS OF CONVERSION. The surrender of any Class B Stock
for conversion shall be made by the holder thereof to the
Corporation at its principal office and such holder shall give
written notice to the Corporation at said office that such holder
elects to convert such Class B Stock in accordance with the
provisions hereof. Such notice also shall state the name or names
(with addresses) in which the certificate or certificates for
Series I Class A Common Stock, which shall be issuable on such
conversion, shall be issued. Subject to the provisions of
subsection II(1) hereof, every such notice of election to convert
shall constitute a contract between the holder of such shares and
the Corporation, whereby such holder shall be deemed to subscribe
for the number of shares of Series I Class A Common Stock which
such holder will be entitled to receive upon such conversion and,
in payment and satisfaction of such subscription, to surrender
such Class B Stock and to release the Corporation from all
obligations thereon, and whereby the Corporation shall be deemed
to agree that the surrender of such Class B Stock and the
extinguishment of its obligations thereon shall constitute full
payment for the Series I Class A Common Stock so subscribed for
and to be issued upon such conversion.
As soon as practicable after the receipt of such notice
and the shares of Class B Stock, the Corporation shall issue and
shall deliver to the person for whose account such shares of Class
B Stock were so surrendered, or on such holder's written order, a
certificate or certificates for the number of full shares of
Series I Class A Common Stock issuable upon the conversion of such
shares of Class B Stock and a check or cash for the payment (if
any) to which such person is entitled pursuant to subsection II(5)
hereof, together with a certificate or certificates representing
the shares of Class B Stock, if any, which are not to be
converted, but which constituted part of the Class B Stock
represented by the certificates or certificates surrendered by
such person. Such conversion shall be deemed to have been effected
on the date on which the Corporation shall have received such
notice and such Class B Stock, and the person or persons in whose
name or names any certificate or certificates for Series I Class A
Common Stock shall be issuable upon such conversion shall be
deemed to have become on said date the holder or holders of record
of the shares represented thereby.
(3) BASIC CONVERSION RATE. The initial rate at which holders may
convert Class B Stock into Series I Class A Common Stock
("Conversion Rate") shall be one share of Series I Class A Common
Stock for each share of Class B Stock surrendered for conversion.
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<PAGE>
(4) CONVERSION RATE ADJUSTMENT. The Conversion Rate shall be
subject to adjustment from time to time as follows:
(a) If the Corporation shall (i) pay a dividend in and on
shares of its Series I Class A Common Stock or its Class B Stock,
(ii) subdivide its outstanding shares of Series I Class A Common
Stock or its Class B Stock into a greater number of shares, (iii)
combine its outstanding shares of Series I Class A Common Stock or
its Class B Stock into a smaller number of shares, or (iv) issue
by reclassification of its shares of Series I Class A Common Stock
or its Class B Stock any shares of its capital stock, then the
Conversion Rate in effect immediately prior thereto shall be
adjusted so that the holder of Class B Stock surrendered for
conversion after the record date fixing stockholders to be
affected by such event shall be entitled to receive upon
conversion the number of such shares of the Corporation which such
holder would have been entitled to receive after the happening of
such event had such shares been converted immediately prior to
such record date. Such adjustment, if applicable, shall be made
whenever any of such events shall happen, and shall also be
effective retroactively as to shares converted between such record
date and the date of the happening of any such event.
(b) (i) If the Series I Class A Common Stock is not listed
on a national securities exchange or traded over-the-counter by a
nationally recognized securities firm or association, and the
Corporation issues rights or warrants (a) to the holders of its
Series I Class A Common Stock entitling them to subscribe for or
purchase shares of Series I Class A Common Stock or (b) to the
holders of its Class B Stock entitling them to subscribe for or
purchase shares of Class B Stock, in either case at a price per
share less than the Book Value Per Share (as defined below) of
Series I Class A Common Stock at the record date mentioned below;
or
(ii) If the Series I Class A Common Stock is listed on a
national securities exchange or traded over-the-counter by a
nationally recognized securities firm or association, and the
Corporation issued rights or warrants (a) to the holders of its
Series I Class A Common Stock entitling them to subscribe for or
purchase shares of Series I Class A Common Stock or (b) to the
holders of its Class B Stock entitling them to subscribe for or
purchase shares of Class B Stock, in either case at a price per
share less than the current market price per share of Series I
Class A Common Stock (as defined in subsection II(4)(e) of this
resolution) at the record date mentioned below;
then, in either of the above events in which the Series I Class A
Common Stock rights or warrants are issued at a price per share
below Book Value Per Share or current market price per share, as
the case may be, the number of shares of Series I Class A Common
Stock into which each share of Class B Stock shall thereafter be
convertible shall be determined by multiplying the number of
shares of Series I Class A Common Stock into which such shares of
Class B Stock were theretofore convertible by a fraction, the
numerator of which shall be the number of shares of Series I Class
A Common Stock outstanding on the date of issuance of such rights
or warrants plus the number of additional shares of Series I Class
A Common Stock offered for subscription or purchase, and the
denominator of which shall be the number of shares of Series I
Class A Common Stock outstanding on the date of issuance of such
rights or warrants plus the number of shares of Series I Class A
Common Stock which the aggregate offering price of the total
number of shares so offered would purchase based on Book Value Per
Share at the record date mentioned below or current market price
per share (as defined in subsection II(4)(e) of this resolution),
as the case may be. If the Corporation issues Class B Stock rights
or warrants at a price per share below Book Value Per Share or
current market price per share, as the case may be, then the above
formula shall be used except that when calculating the fraction in
such formula, Class B Stock shall be substituted for Series I
Class A Common Stock. Such adjustment shall be made whenever such
rights or warrants are issued, and shall also be effective
retroactively as to shares of Class B Stock converted between the
record date for the determination of stockholders entitled to
receive such rights or warrants and the date such rights or
warrants are issued.
(iii) The term "Book Value Per Share," as used herein,
shall mean such amount which is determined by (a) reducing total
stockholders' equity by the amount contributed to capital in
exchange for all classes of stock other than common stock,
adjusted to reflect any proportion of the Corporation's net income
or loss from operations since payment for such shares of stock
other than common stock (such adjustment arrived at by adding all
shares of outstanding stock, adjusted to reflect any conversion
ratios, the resulting number to be the denominator of a fraction
the numerator of which is to be the number of shares of the
Corporation's stock other than common stock, adjusted to reflect
conversion ratios, the resulting fractions to be multiplied by the
net income or loss from the Corporation's operations since payment
for the stock other than common stock); and (b) dividing the
resulting amount by the number of shares of common stock
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outstanding, adjusted to compensate for any common stock to common
stock conversion ratio other than one to one.
(c) If the Corporation shall distribute to the holders of
its Series I Class A Common Stock or Class B Stock evidence of its
indebtedness or assets (excluding cash dividends or distributions
made out of current or retained earnings) or rights or warrants to
subscribe other than as referred to in subsection II(4)(b) of this
resolution, then, when such distribution is made to the holders of
Series I Class A Common Stock the number of shares of Series I
Class A Common Stock into which each share of Class B Stock shall
thereafter be convertible shall be determined by multiplying the
number of shares of Series I Class A Common Stock into which such
shares of Class B Stock was theretofore convertible by a fraction,
the numerator of which shall be the Book Value Per Share of Series
I Class A Common Stock at the record date mentioned below or, if
the Series I Class A Common Stock is listed on a national
securities exchange or traded over-the-counter by a nationally
recognized securities firm or association, the market price per
share of Series I Class A Common Stock (as defined in subsection
II(4)(e) of this resolution) on the date of such distribution, and
the denominator of which shall be such Book Value Per Share of the
Series I Class A Common Stock at the record date mentioned below
or such current market price per share of the Series I Class A
Common Stock, as the case may be, less the then fair market value
(as determined by the Board of Directors of the Corporation, whose
determination shall be conclusive) of the portion of the assets,
evidence of indebtedness, subscription rights or warrants so
distributed applicable to one share of the Series I Class A Common
Stock. If the Corporation distributes such evidence of
indebtedness or assets to the holders of the Class B Stock, the
above formula shall be used except that when calculating the
fraction in such formula, Class B Stock shall be substituted for
Series I Class A Common Stock. Such adjustment shall be made
whenever any such distribution is made, and shall also be
effective retroactively as to the shares converted between the
record date for the determination of stockholders entitled to
receive such distribution and the date such distribution is made.
(d) In the event of any consolidation of the Corporation
with, or the merger of the Corporation into, another corporation,
or in the event of any sale, conveyance, exchange or transfer (for
cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Corporation
to another corporation, or in the case of any reorganization of
the Corporation, the holder of each share of Class B Stock then
outstanding shall have the right thereafter to convert such share
into the kind and amount of shares of stock and other securities
and property, including cash, which would have been deliverable to
such holder upon such consolidation, merger, sale, conveyance,
exchange, transfer or reorganization if such holder had converted
such holder's shares of Class B Stock into Series I Class A Common
Stock immediately prior to such consolidation, merger, sale,
conveyance, exchange, transfer or reorganization. In any such
event, effective provision shall be made in the instrument
effecting or providing for such consolidation, merger, sale,
conveyance, exchange, transfer or reorganization so that the
provisions set forth herein for the protection of the conversion
rights of the shares of Class B Stock shall thereafter be
applicable, as nearly as may be practicable, in relation to any
shares of stock or other securities or property, including cash,
deliverable after such consolidation, merger, sale, conveyance,
exchange, transfer or reorganization upon the conversion. The
provisions of this subsection II(4)(d) shall similarly apply to
successive consolidations, mergers, sales, conveyances, exchanges,
transfers and reorganizations.
(e) For purposes of computation under Sections I and II of
this resolution, the current market price per share of Series I
Class A Common Stock at any date shall be deemed to be the average
of the daily closing prices for the 20 consecutive business days
immediately prior to the day in question. The closing price for
each day shall be the last reported sales price, regular way, on
the principal national securities exchange upon which the Series I
Class A Common Stock is listed, or in case no such reported sale
takes place on such day, the average of the reported closing bid
and asked prices, regular way, on such national securities
exchange, or if the Series I Class A Common Stock is not then
listed on a national securities exchange, the average of the
closing prices or, if applicable, closing bid and asked prices in
the over-the-counter market as furnished by the nationally
recognized securities firm or association selected from time to
time by the Corporation for that purpose.
(f) No adjustments in the Conversion Rate shall be
required unless such adjustment would require an increase or
decrease of at least 2% in such Conversion Rate; provided,
however, that any adjustments which by reason of this subsection
II(4)(f) are not required to be made, and are not made, shall be
carried forward and taken into account in any subsequent
adjustment. All calculations under this subsection II(4)(f) shall
be made to the nearest cent or one-hundredth of a share, as the
case may be.
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(5) FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the conversion of any
shares. If more than one share shall be surrendered for conversion
at one time by the same holder, the number of full shares issuable
upon conversion thereof shall be computed on the basis of the
aggregate number of such shares so surrendered. If the conversion
of any shares results in a fraction, an amount equal to such
fraction multiplied by the current market price (determined as
provided in subsection II(4)(e) of this resolution) of the Series
I Class A Common Stock on the business day next preceding the date
of conversion shall be paid to such holder in cash by the
Corporation; or if the Series I Class A Common Stock is not listed
on a national securities exchange or traded over-the-counter by a
nationally recognized securities firm, an amount equal to such
fraction multiplied by the Book Value Per Share of the Class B
Stock on the business day next preceding the date of conversion
shall be paid to such holder in cash by the Corporation.
(6) TAX. The issue of stock certificates on conversion of shares
shall be made free of any tax in respect of such issue. The
Corporation shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue
and delivery of stock in a name other than that of the holder of
the shares converted, and the Corporation shall not be required to
issue or deliver any such stock certificates unless and until the
person or persons requesting the issuance thereof shall have paid
to the Corporation the amount of any such tax or shall have
established to the satisfaction of the Corporation that such tax
has been paid.
(7) POWER RESERVED BY THE BOARD OF DIRECTORS. If in any case a
state of facts occurs wherein in the opinion of the Board of
Directors, the other provisions of this Section II are not
strictly applicable, or if strictly applicable, would not fairly
protect the conversion rights of the Class B Stock in accordance
with the essential intent and principles of such provisions, then
the Board of Directors shall make an adjustment in the application
of such provisions in accordance with such essential intent and
principles so as to protect such conversion rights as aforesaid.
(8) RESERVATION OF SHARES. The Corporation shall at all times
reserve and keep available out of its authorized Series I Class A
Common Stock the full number of shares of Series I Class A Common
Stock deliverable upon the conversion of all outstanding shares of
Class B Stock and shall take all such corporate action as may be
required from time to time in order that it may validly and
legally issue fully paid and non-assessable shares of Series I
Class A Common Stock upon conversion of the Class B Stock.
(9) STATUS OF CONVERTED SHARES. Shares of Class B Stock converted
shall assume the status of authorized but unissued shares of Class
B Stock of the Corporation.
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APPENDIX B
STATEMENT OF DESIGNATION
OF
NONCUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES A
OF
BANKUNITED FINANCIAL CORPORATION
WHEREAS, pursuant to Article VI of the Articles of Incorporation of
BankUnited Financial Corporation (the "Corporation") and Section 607.0602 of the
Florida Business Corporation Act, the Board of Directors of the Corporation is
authorized to divide the Corporation's authorized Preferred Stock into series
and, within the limitations set forth therein, fix and determine the relative
rights and preferences of the shares of any series so established; and
WHEREAS, the Board of Directors desires to (i) establish a series of
Preferred Stock, designating such series "Noncumulative Convertible Preferred
Stock, Series A," (ii) allocate 55,000 shares of the authorized Preferred Stock
to the Noncumulative Convertible Preferred Stock, Series A, and (iii) fix and
determine the relative rights and preferences of the shares of the Noncumulative
Convertible Preferred Stock, Series A;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby
designates the following as the relative rights of the Noncumulative Convertible
Preferred Stock, Series A;
RESOLVED, that 55,000 of the 10,000,000 shares of Preferred Stock
authorized by the Articles of Incorporation of the Corporation be and hereby are
determined to be and shall be a series designated as Noncumulative Convertible
Preferred Stock, Series A (the "Series A Preferred Stock"), and that the
following is a statement fixing and determining the variations in the relative
rights and preferences of the Series A Preferred Stock pursuant to authority
vested in the Board of Directors by the Articles of Incorporation of the
Corporation:
1. PARITY. The Series A Preferred Stock is of the same class as and shall
be on a parity with the Corporation's currently outstanding Noncumulative
Convertible Preferred Stock, Series B, C and C-II (the "Outstanding Parity
Stock"), except as provided elsewhere herein.
2. DIVIDENDS. The holders of the Series A Preferred Stock shall be entitled
to receive, when, as, and if declared by the Board of Directors and out of
the assets of the Corporation which are by law available for the payment of
dividends, preferential cash dividends payable quarterly on the last day of
February, May, August and November of each year unless such day is a
non-business day, in which event, on the next business day, at the fixed
annual rate of $1.00 per share and no more.
So long as any Series A Preferred Stock remains outstanding:
(a) no dividend whatsoever shall be declared or paid upon
or set apart for payment, and no distribution shall be ordered or
made in respect of: (i) the Class B Common Stock, par value $.01
per share (the "Class B Common Stock") or the Corporation's Series
I Class A Common Stock, par value $.01 per share (the "Class A
Common Stock") or any other outstanding common stock of the
Corporation or (ii) any other class of stock or series thereof
ranking junior to the Series A Preferred Stock in the payment of
dividends;
(b) no shares of Class B Common Stock or Class A Common
Stock and no shares of any other class of stock or series thereof
ranking junior to the Series A Preferred Stock in the payment of
dividends shall be redeemed or purchased by the Corporation or any
subsidiary thereof; and
(c) no moneys, funds or other assets shall be paid to or
made available for a sinking fund for the redemption or purchase
of any shares of: (i) Class B Common Stock or Class A Common
Stock; or (ii) any other class of stock or series thereof ranking
junior to the Series A Preferred Stock in the payment of
dividends;
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unless, in each instance, full dividends on all outstanding shares
of Series A Preferred Stock for the then current calendar quarter
shall have been paid or declared and set aside for payment.
In addition, so long as any Series A Preferred Stock
remains outstanding, no dividend whatsoever shall be declared or
paid upon or set apart for payment, and no distribution shall be
ordered or made in respect of, any share or shares of any class of
stock or series thereof ranking on a parity with the Series A
Preferred Stock (including the Outstanding Parity Stock) in the
payment of dividends, unless, for the applicable calendar quarter:
(a) full dividends shall be paid or declared and set apart
for payment on all shares of: (i) the Series A Preferred Stock;
and (ii) any class of stock or series thereof ranking on a parity
with the Series A Preferred Stock (including the Outstanding
Parity Stock) in the payment of dividends; or
(b) in the event all such dividends for the applicable
calendar quarter are not or cannot be paid or declared and set
apart for payment in full, a pro rata portion of the full
dividends shall be paid or declared and set apart for payment on
all shares of: (i) the Series A Preferred Stock; and (ii) any
class of stock or series thereof ranking on a parity with the
Series A Preferred Stock (including the Outstanding Parity Stock)
in the payment of dividends. Such pro rata portion shall be
calculated based on the ratio that the total amount available for
the payment of all required dividends on the Series A Preferred
Stock and such parity stock for the applicable calendar quarter
bears to the total required dividends on the Series A Preferred
Stock and such parity stock for such calendar quarter.
3. PREFERENCE ON LIQUIDATION. In the event of any dissolution, liquidation
or winding up of the affairs of the Corporation, after payment or provision
for payment of any debts and other liabilities of the Corporation, the
holders of the Series A Preferred Stock shall be entitled to receive the
following amounts out of the net assets of the Corporation, and before any
distribution shall be made to the holders of any common stock or to the
holders of any other class of stock or series thereof ranking junior to the
Series A Preferred Stock in the distribution of assets:
(a) if such dissolution, liquidation or winding up is
voluntary, the applicable redemption price per share determined as
provided in Section 4 of these resolutions;
(b) if such dissolution, liquidation or winding up is
involuntary, $10.00 per share;
and no more. If upon such voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Corporation, the net assets of the
Corporation shall be insufficient to permit payment in full of the amounts
required to be paid to the holders of the Series A Preferred Stock and to
the holders of any class of stock or series thereof ranking on a parity
with the Series A Preferred Stock (including the Outstanding Parity Stock)
in respect of the distribution of assets, then a pro rata portion of the
full amount required to be paid upon such dissolution, liquidation or
winding up shall be paid to: (i) the holders of Series A Preferred Stock;
and (ii) the holders of any class of stock or series thereof ranking on a
parity with the Series A Preferred Stock (including the Outstanding Parity
Stock) in respect of the distribution of assets. Such pro rata portion
shall be calculated based on the ratio that the total amount available for
distribution to such holders bears to the total distribution required to be
made on the Series A Preferred Stock and such parity stock.
Nothing herein contained shall be deemed to prevent redemption of
Series A Preferred Stock by the Corporation in the manner provided in
Section 4 of these resolutions. Neither the merger nor consolidation of the
Corporation into or with any other corporation, nor the merger or
consolidation of any other corporation into or with the Corporation, nor a
sale, transfer or lease of all or any part of the assets of the Corporation
shall be deemed to be a dissolution, liquidation or winding up of the
Corporation within the meaning of this Section 3.
Written notice of any voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Corporation, stating a
payment date and the place where the distribution amounts shall be payable
and containing a statement of or reference to the conversion right set
forth in Section 6 of these resolutions, shall be given by mail, postage
prepaid, at least 30 days but not more than 60 days prior to the payment
date stated therein, to the holders of record of the Series A Preferred
Stock at their respective addresses as the same shall appear on the books
of the Corporation.
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4. REDEMPTION. The Corporation shall have the right, at its option and by
resolution of the Board of Directors, to redeem at any time and from time
to time the Series A Preferred Stock, in whole or in part, upon payment in
cash in respect of each share redeemed, if redeemed during the twelve month
period ending July 31, 1995, $10.15, or if redeemed after July 31, 1995,
$10.00.
If less than all of the outstanding shares of the Series A
Preferred Stock shall be redeemed, the particular shares to be redeemed
shall be allocated among the respective holders of Series A Preferred Stock
pro rata or by lot, as the Board of Directors may determine.
Notice of any redemption specifying the date fixed for said
redemption and the place where the amount to be paid upon redemption is
payable and containing a statement of or reference to the conversion right
set forth in Section 6 of these resolutions shall be mailed, postage
prepaid, at least 30 days but not more than 60 days prior to said
redemption date to the holders of record of the Series A Preferred Stock to
be redeemed at their respective addresses as the name shall appear on the
books of the Corporation. If such notice of redemption shall have been so
mailed, and if on or before the redemption date specified in such notice
all funds necessary for such redemption shall have been set aside by the
Corporation separate and apart from its other funds, in trust for the
account of the holders of the shares so to be redeemed, so as to be and
continue to be available therefor, then, on and after said redemption date,
notwithstanding that any certificate for shares of the Series A Preferred
Stock so called for redemption shall not have been surrendered for
cancellation, the shares represented thereby so called for redemption shall
be deemed to be no longer outstanding, the right to receive dividends
thereon shall cease to accrue, and all rights with respect to such shares
of the Series A Preferred Stock so called for redemption shall forthwith
cease and terminate, except only the right of the holders thereof to
receive out of the funds so set aside in trust the amount payable on
redemption thereof, but without interest.
Shares of Series A Preferred Stock redeemed or otherwise purchased
or acquired by the Corporation shall not be reissued as shares of Series A
Preferred Stock but shall assume the status of authorized but unissued
shares of Preferred Stock of the Corporation.
5. VOTING RIGHTS. The holders of the Series A Preferred Stock shall have
two and one-half votes per share on all matters requiring the vote of
stockholders, and additionally if the voting rights of the Class B Common
Stock are increased, then the voting rights of the Series A Preferred Stock
shall be increased by an amount which will maintain the two and one-half to
one proportion between the voting rights of the Class B Common Stock and
the Series A Preferred Stock as is hereby established.
Additionally, if at any time the equivalent of six or more full
quarterly dividends (whether or not consecutive) payable on the Series A
Preferred Stock shall not be paid, the number of directors constituting the
Board of Directors of the Corporation shall be increased by two, and the
holders of the Series A Preferred Stock (whether or not the payment of
quarterly dividends shall not be paid on other Preferred Stock outstanding)
shall have the exclusive right, voting together as a class, to elect two
directors to fill such newly-created directorships. This right shall remain
vested until dividends on the Series A Preferred Stock have been paid for
four consecutive quarters, at which time: (i) the right shall terminate
(subject to revesting in the case of any subsequent failure to pay of the
kind described above); (ii) the term of the directors then in office
elected by the holders of the Series A Preferred Stock as a class shall
terminate; and (iii) the number of directors constituting the Board of
Directors of the Corporation shall be reduced by two.
Whenever such right shall vest, it may be exercised initially
either at a special meeting of holders of the Series A Preferred Stock or
at any annual stockholders' meeting, but thereafter it shall be exercised
only at annual stockholders' meetings. Any director who shall have been
elected by the holders of the Series A Preferred Stock as a class pursuant
to this Section 5 shall hold office for a term expiring (subject to the
earlier payment of dividends) at the next annual meeting of stockholders,
and during such term may be removed at any time, either for or without
cause, by, and only by, the affirmative votes of the holders of record of a
majority of the outstanding shares of the Series A Preferred Stock given at
a special meeting of such stockholders called for such purpose, and any
vacancy created by such removal may also be filled at such meeting. Any
vacancy caused by the death or resignation of a director who shall have
been elected by the holders of the Series A Preferred Stock as a class
pursuant to this Section 5 may be filled by the remaining director elected
by the holders of the Series A Preferred Stock then in office.
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Whenever a meeting of the holders of Series A Preferred Stock is
permitted or required to be held pursuant to this Section 5, such meeting
shall be held at the earliest practicable date and the Secretary of the
Corporation shall call such meeting, providing written notice to all
holders of record of Series A Preferred Stock in accordance with law, upon
the earlier of the following:
(a) as soon as reasonably practicable following the
occurrence of the event or events permitting or requiring such
meeting hereunder; or
(b) within 20 days following receipt by said Secretary of
a written request for such a meeting, signed by the holders of
record of at least 20% of the shares of Series A Preferred Stock
then outstanding.
If such meeting shall not be called by the proper
corporate officer within 20 days after the receipt of such request
by the Secretary of the Corporation, or within 25 days after the
mailing of the same within the United States of America by
registered mail addressed to the Secretary of the Corporation at
its principal office, then the holders of record of at least 20%
of the shares of Series A Preferred Stock then outstanding may
designate one of their members to call such a meeting at the
expense of the Corporation, and such meeting may be called by such
person in the manner and at the place provided in this Section 5.
Any holder of Series A Preferred Stock so designated to call such
meeting shall have access to the stock books of the Corporation
for the purpose of causing a meeting of such stockholders to be so
called.
Notwithstanding any provision of this Section 5, no
special meeting of the holders of shares of Series A Preferred
Stock: (i) shall be held during the 90 day period next preceding
the date fixed for the annual meeting of stockholders of the
Corporation; or (ii) shall be required to be called or held in
violation of any law, rule or regulation.
Any meeting of the holders of all outstanding Series A
Preferred Stock entitled to vote as a class for the election of
directors shall be held at the place at which the last annual
meeting of stockholders was held. At such meeting, the presence in
person or by proxy of the holders of a majority of the outstanding
shares of the Series A Preferred Stock shall be required to
constitute a quorum; in the absence of a quorum, a majority of the
holders present, in person or by proxy, shall have the power to
adjourn the meeting from time to time without notice, other than
an announcement at the meeting, until a quorum shall be present.
6. CONVERTIBILITY. Shares of the Series A Preferred Stock
(hereinafter in this Section 6 called the "Shares") shall be convertible
into Class B Common Stock on the following terms and conditions:
(a) Subject to and upon compliance with the provisions of
this Section 6, the holder of any Shares may, at such holder's
option, convert any such Shares into such number of fully paid and
non-assessable shares of Class B Common Stock as are issuable
pursuant to the formula set forth in subsections (c) and (d) of
this Section 6. No adjustment shall be made for dividends on any
Class B Common Stock that shall be issuable upon the conversion of
such Shares.
(b) The surrender of any Shares for conversion shall be
made by the holder thereof to the Corporation at its principal
office and such holder shall give written notice to the
Corporation at said office that such holder elects to convert such
Shares in accordance with the provisions thereof and this Section
6. Such notice also shall state the name or names (with addresses)
in which the certificate or certificates for Class B Common Stock,
which shall be issuable on such conversion, shall be issued.
Subject to the provisions of subsection (a) of this Section 6,
every such notice of election to convert shall constitute a
contract between the holder of such shares and the Corporation,
whereby such holder shall be deemed to subscribe for the number of
shares of Class B Common Stock which such holder will be entitled
to receive upon such conversion and, in payment and satisfaction
of such subscription, to surrender such Shares and to release the
Corporation from all obligations thereon, and whereby the
Corporation shall be deemed to agree that the surrender of such
Shares and the extinguishment of its obligations thereon shall
constitute full payment for the Class B Common Stock so subscribed
for and to be issued upon such conversion.
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As soon as practicable after the receipt of such notice
and Shares, the Corporation shall issue and shall deliver to the
person for whose account such Shares were so surrendered, or on
such holder's written order, a certificate or certificates for the
number of full shares of Class B Common Stock issuable upon the
conversion of such Shares and a check or cash for the payment (if
any) to which such person is entitled pursuant to subsection (e)
of this Section 6, together with a certificate or certificates
representing the Shares, if any, which are not to be converted,
but which constituted part of the Shares represented by the
certificate or certificates surrendered by such person. Such
conversion shall be deemed to have been effected on the date on
which the Corporation shall have received such notice and such
Shares, and the person or persons in whose name or names any
certificate or certificates for Class B Common Stock shall be
issuable upon such conversion shall be deemed to have become on
said date the holder or holders of record of the shares
represented thereby.
(c) The Conversion Rate shall be 1.495919425 shares of
Class B Common Stock for each share of Series A Preferred Stock
surrendered for conversion.
(d) The Conversion Rate shall be subject to adjustment
from time to time as follows:
(1) If the Corporation shall (i) pay a dividend
in shares of its Class B Common Stock, (ii) subdivide its
outstanding shares of Class B Common Stock into a greater
number of shares, (iii) combine its outstanding shares of
Class B Common Stock into a smaller number of shares, or
(iv) issue by reclassification of its shares of Class B
Common Stock any shares of its capital stock, then the
Conversion Rate in effect immediately prior thereto shall
be adjusted so that the holder of a Share surrendered for
conversion after the record date fixing stockholders to be
affected by such event shall be entitled to receive upon
conversion the number of such shares of the Corporation
which such holder would have been entitled to receive
after the happening of such event had such shares been
converted immediately prior to such record date. Such
adjustment shall be made whenever any of such events shall
happen, and shall also be effective retroactively as to
shares converted between such record date and the date of
the happening of any such event.
(2) If the Corporation shall issue rights or
warrants to the holders of its Class B Common Stock
entitling them to subscribe for or purchase shares of
Class B Common Stock, at a price per share less than the
current market price per share of the Class A Common Stock
(as defined in subsection (d)(5) of this Section 6) at the
record date mentioned below, then the number of shares of
Class B Common Stock into which each share shall
thereafter be convertible shall be determined by
multiplying the number of shares of Class B Common Stock
into which such share was theretofore convertible by a
fraction, the numerator of which shall be the number of
shares of the Class B Common Stock outstanding on the date
of issuance of such rights or warrants plus the number of
additional shares of the Class B Common Stock offered for
subscription or purchase, and the denominator of which
shall be the number of shares of the Class B Common Stock
outstanding on the date of issuance of such rights or
warrants plus the number of shares of the Class B Common
Stock which the aggregate offering price of the total
number of shares so offered would purchase based on
current market price per share (as defined in subsection
(d)(5) of this Section 6). Such adjustment shall be made
whenever such rights or warrants are issued, and shall
also be effective retroactively as to shares converted
between the record date for the determination of
stockholders entitled to receive such rights or warrants
and the date such rights or warrants are issued.
(3) If the Corporation shall distribute to the
holders of its Class B Common Stock evidence of its
indebtedness or assets (excluding cash dividends or
distributions made out of current or retained earnings) or
rights or warrants to subscribe other than as referred to
in subsection (d)(2) of this Section 6, then in each such
case the number of shares of Class B Common Stock into
which each share shall thereafter be convertible shall be
determined by multiplying the number of shares of Class B
Common Stock into which such share was theretofore
convertible by a fraction, the numerator of which shall be
the current market price per share of Class A Common Stock
(as defined in subsection (d)(5) of Section 6) on the date
of such distribution, and the denominator of which shall
be such current market price per share of the Class A
Common Stock, as the case may be, less the then fair
market value (as determined by the Board of Directors of
the Corporation, whose determination
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shall be conclusive) of the portion of the assets,
evidence of indebtedness, subscription rights or warrants
so distributed applicable to one share of Class B Common
Stock. Such adjustment shall be made whenever any such
distribution is made, and shall also be effective
retroactively as to the shares converted between the
record date for the determination of stockholders entitled
to receive such distribution and the date such
distribution is made.
(4) In the event of any consolidation of the
Corporation with or merger of the Corporation into another
corporation, or in the event of any sale, conveyance,
exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially
all of the property or assets of the Corporation to
another corporation, or in the case of any reorganization
of the Corporation, the holder of each share then
outstanding shall have the right thereafter to convert
such shares into the kind and amount of shares of stock
and other securities and property, including cash, which
would have been deliverable to such holder upon such
consolidation, merger, sale, conveyance, exchange,
transfer or reorganization if such holder had converted
such holder's shares into Class B Common Stock immediately
prior to such consolidation, merger, sale, conveyance,
exchange, transfer or reorganization. In any such event,
effective provision shall be made in the instrument
effecting or providing for such consolidation, merger,
sale, conveyance, exchange, transfer or reorganization so
that the provisions set forth herein for the protection of
the conversion rights of the Shares shall thereafter be
applicable, as nearly as may be practicable, in relation
to any shares of stock or other securities or property
including cash, deliverable after such consolidation,
merger, sale, conveyance, exchange, transfer or
reorganization upon the conversion of the Series A
Preferred Stock, or such other securities as shall have
been issued to the holders thereof in lieu thereof or in
exchange therefor. The provisions of this subsection
(d)(4) shall similarly apply to successive consolidations,
mergers, sales, conveyances, exchanges, transfers and
reorganizations.
(5) For purposes of computation under subsections
(d)(2) and (d)(3) of this Section 6, the current market
price per share of Class A Common Stock at any date shall
be deemed to be the average of the daily closing prices
for the 20 consecutive business days immediately prior to
the day in question, if the Class B Common Stock is
convertible into Class A Common Stock on a one-for-one
basis, and if the Class B Common Stock is not convertible
into Class A Common Stock on a one-for-one basis, then the
current market price per share of Class A Common Stock at
any date shall be deemed to be such average multiplied by
the then current conversion rate of Class B Common Stock
into Class A Common Stock. The closing price for each day
shall be the last reported sales price, regular way, on
the principal national securities exchange upon which the
Class A Common Stock is listed, or in case no such
reported sales take place on such day, the average of the
reported closing bid and asked prices, regular way, on
such national securities exchange, or if the Class A
Common Stock is not then listed on a national securities
exchange, the average of the closing prices or, if
applicable, closing bid and asked prices in the
over-the-counter market as furnished by the nationally
recognized securities firm or association selected from
time to time by the Corporation for that purpose.
(6) No adjustment in the Conversion Rate shall be
required unless such adjustment would require an increase
or decrease of at least 2% in the Conversion Rate;
provided, however, that any adjustments which by reason of
this subsection (d)(6) are not required to be made, and
are not made, shall be carried forward and taken into
account in any subsequent adjustment. All calculations
under this subsection (d)(6) shall be made to the nearest
cent or one-hundredth of a share, as the case may be.
(e) Receipt by a holder of Series A Preferred Stock of a
notice of redemption pursuant to Section 4 of these resolutions
shall not terminate the conversion rights set forth in this
Section 6, but rather such conversion rights shall continue until
the redemption date set forth in the notice of redemption.
(f) No fractional shares or scrip representing fractional
shares shall be issued upon the conversion of any shares. If more
than one share shall be surrendered for conversion at one time by
the same holder, the
B-6
<PAGE>
number of full shares issuable upon conversion thereof shall be
computed on the basis of the aggregate number of such shares so
surrendered. If the conversion of any shares results in a
fraction, an amount equal to such fraction multiplied by the
current market price (determined as provided in subsection (d)(5)
of this Section 6) of the Class A Common Stock on the business day
next preceding the date of conversion shall be paid to such holder
in cash by the Corporation.
(g) The issue of stock certificates on conversion of
shares shall be made free of any tax in respect of such issue. The
Corporation shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue
and delivery of stock in a name other than that of the holder of
the shares converted, and the Corporation shall not be required to
issue or deliver any such stock certificates unless and until the
person or persons requesting the issuance thereof shall have paid
to the Corporation the amount of any such tax or shall have
established to the satisfaction of the Corporation that such tax
has been paid.
(h) If in any case a state of facts occurs wherein in the
opinion of the Board of Directors, the other provisions of this
Section 6 are not strictly applicable, or if strictly applicable,
would not fairly protect the conversion rights of the Series A
Preferred Stock in accordance with the essential intent and
principles of such provisions, then the Board of Directors shall
make an adjustment in the application of such provisions in
accordance with such essential intent and principles so as to
protect such conversion rights as aforesaid.
(i) The Corporation shall at all times reserve and keep
available out of its authorized Class B Common Stock the full
number of shares of Class B Common Stock deliverable upon the
conversion of all outstanding shares of Series A Preferred Stock
and shall take all such corporate action as may be required from
time to time in order that it may validly and legally issue fully
paid and non-assessable shares of Class B Common Stock upon
conversion of the Series A Preferred Stock.
(j) Shares of Series A Preferred Stock converted shall not
be reissued as shares of Series A Preferred Stock but shall assume
the status of authorized but unissued shares of Preferred Stock of
the Corporation.
B-7
<PAGE>
APPENDIX C
STATEMENT OF DESIGNATION
OF
NONCUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES B
OF
BANKUNITED FINANCIAL CORPORATION
WHEREAS, pursuant to Article VI of the Articles of Incorporation of
BankUnited Financial Corporation (the "Corporation"), and Section 607.0602 of
the Florida Business Corporation Act, the Board of Directors of the Corporation
is authorized to divide the Corporation's authorized Preferred Stock into series
and, within the limitations set forth therein, fix and determine the relative
rights and preferences of the shares of any series so established; and
WHEREAS, the Board of Directors of the Corporation desires to (i) establish
a second series of its class of Preferred Stock, designating such series
"Noncumulative Convertible Preferred Stock, Series B," (ii) allocate 1,000,000
shares of the authorized Preferred Stock to the Noncumulative Convertible
Preferred Stock, Series B, and (iii) fix and determine the relative rights and
preferences of the shares of the Noncumulative Convertible Preferred Stock,
Series B;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby
designates the following as the relative rights of the Noncumulative Convertible
Preferred Stock, Series B:
RESOLVED, that 1,000,000 of the 10,000,000 shares of the class of Preferred
Stock authorized by the Articles of Incorporation of the Corporation be and
hereby are determined to be and shall be of a series designated as Noncumulative
Convertible Preferred Stock, Series B (the "Series B Preferred Stock") and that
the following is a statement fixing and determining the variations in the
relative rights and preferences of the Series B Preferred Stock pursuant to
authority vested in the Board of Directors by the Articles of Incorporation of
the Corporation:
1. PARITY. The Series B Preferred Stock is of the same class as and shall
be on a parity with the Corporation's currently outstanding Noncumulative
Convertible Preferred Stock, Series A, C and C-II (the "Outstanding Parity
Stock"), except as provided elsewhere herein.
2. DIVIDENDS. The holders of the Series B Preferred Stock shall be entitled
to receive, when, as, and if declared by the Board of Directors and out of
the assets of the Corporation which are by law available for the payment of
dividends, preferential cash dividends payable quarterly on the last day of
February, May, August and November of each year unless such day is a
non-business day, in which event on the next business day, at the fixed
annual rate of $0.7375 per share and no more.
So long as any Series B Preferred Stock remains outstanding:
(a) no dividend whatsoever shall be declared or paid upon or set
apart for payment, and no distribution shall be ordered or made in
respect of: (i) the Class B Common Stock, par value $.01 per share
("Class B Common Stock") or the Corporation's Series I Class A
Common Stock, par value $.01 per share (the "Class A Common
Stock") or any other outstanding common stock of the Corporation,
or (ii) any other class of stock or series thereof ranking junior
to the Series B Preferred Stock in the payment of dividends;
(b) no shares of the Class B Common Stock or the Class A Common
Stock and no shares of any other class of stock or series thereof
ranking junior to the Series B Preferred Stock in the payment of
dividends shall be redeemed or purchased by the Corporation or any
subsidiary thereof; and
(c) no moneys, funds or other assets shall be paid to or made
available for a sinking fund for the redemption or purchase of any
shares of: (i) the Class B Common Stock or the Class A Common
Stock, or (ii) any other class of stock or series thereof ranking
junior to the Series B Preferred Stock in the payment of
dividends;
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<PAGE>
unless, in each instance, full dividends on all outstanding shares
of Series B Preferred Stock for the then current calendar quarter
shall have been paid or declared and set aside for payment.
In addition, so long as any Series B Preferred Stock
remains outstanding, no dividend whatsoever shall be declared or
paid upon or set apart for payment, and no distribution shall be
ordered or made in respect of, any share or shares of any class of
stock or series thereof ranking on a parity with the Series B
Preferred Stock (including the Outstanding Parity Stock) in the
payment of dividends, unless, for the applicable calendar quarter:
(a) full dividends shall be paid or declared and set apart for
payment on all shares of: (i) the Series B Preferred Stock, and
(ii) any class of stock or series thereof ranking on a parity with
the Series B Preferred Stock (including the Outstanding Parity
Stock) in the payment of dividends; or
(b) in the event all such dividends for the applicable calendar
quarter are not or cannot be paid or declared and set apart for
payment in full, a pro rata portion of the full dividends shall be
paid or declared and set apart for payment on all shares of: (i)
the Series B Preferred Stock, and (ii) any class of stock or
series thereof ranking on a parity with the Series B Preferred
Stock (including the Outstanding Parity Stock) in the payment of
dividends. Such pro rata portion shall be calculated based on the
ratio that the total amount available for the payment of all
required dividends on the Series B Preferred Stock and such parity
stock for the applicable calendar quarter bears to the total
required dividends on the Series B Preferred Stock and such parity
stock for such calendar quarter.
3. PREFERENCE ON LIQUIDATION. In the event of any dissolution, liquidation
or winding up of the affairs of the Corporation, after payment or provision
for payment of any debts and other liabilities of the Corporation, the
holders of the Series B Preferred Stock shall be entitled to receive the
following amounts out of the net assets of the Corporation, and before any
distribution shall be made to the holders of any common stock or to the
holders of any other class of stock or series thereof ranking junior to the
Series B Preferred Stock in the distribution of assets:
(a) if such dissolution, liquidation or winding up is voluntary,
the applicable redemption price per share determined as provided
in Section 4 of these resolutions;
(b) if such dissolution, liquidation or winding up is involuntary,
$7.375 per share;
and no more. If upon such voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Corporation, the
net assets of the Corporation shall be insufficient to permit
payment in full of the amounts required to be paid to the holders
of the Series B Preferred Stock and to the holders of any class of
stock or series thereof ranking on a parity with the Series B
Preferred Stock (including the Outstanding Parity Stock) in
respect of the distribution of assets, then a pro rata portion of
the full amount required to be paid upon such dissolution,
liquidation or winding up shall be paid to: (i) the holders of
Series B Preferred Stock, and (ii) the holders of any class of
stock or series thereof ranking on a parity with the Series B
Preferred Stock (including the Outstanding Parity Stock) in
respect of the distribution of assets. Such pro rata portion shall
be calculated based on the ratio that the total amount available
for distribution to such holders bears to the total distribution
required to be made on the Series B Preferred Stock and such
parity stock.
Nothing herein contained shall be deemed to prevent
redemption of Series B Preferred Stock by the Corporation in the
manner provided in Section 4 of these resolutions. Neither the
merger nor consolidation of the Corporation into or with any other
corporation, nor the merger or consolidation of any other
corporation into or with the Corporation, nor a sale, transfer or
lease of all or any part of the assets of the Corporation shall be
deemed to be a dissolution, liquidation or winding up of the
Corporation within the meaning of this Section 3.
Written notice of any voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the
Corporation, stating a payment date and the place where the
distribution amounts shall be payable and containing a statement
of or reference to the conversion right set forth in Section 6 of
these resolutions, shall be given by mail, postage prepaid, at
least 30 days but not more than 60 days prior to the payment date
stated
C-2
<PAGE>
therein, to the holders of record of the Series B Preferred Stock
at their respective addresses as the same shall appear on the
books of the Corporation.
4. REDEMPTION. the Corporation shall have the right, at its option
and by resolution of its Board of Directors, to redeem at any time and from
time to time the Series B Preferred Stock, in whole or in part, upon
payment in cash in respect of each share redeemed at the then applicable
redemption price set forth below:
<TABLE>
<CAPTION>
<S> <C> <C>
If redeemed during the twelve month period ending January 31, 1995 $7.67
If redeemed during the twelve month period ending January 31, 1996 $7.59625
If redeemed during the twelve month period ending January 31, 1997 $7.5225
If redeemed during the twelve month period ending January 31, 1998 $7.44875
If redeemed after January 31, 1998 $7.375
</TABLE>
If less than all of the outstanding shares of the Series B
Preferred Stock shall be redeemed, the particular shares to be redeemed
shall be allocated among the respective holders of Series B Preferred
Stock, pro rata or by lot, as the Board of Directors may determine.
Notice of any redemption specifying the date fixed for said
redemption and the place where the amount to be paid upon redemption is
payable and containing a statement of or reference to the conversion right
set forth in Section 6 of these resolutions shall be mailed, postage
prepaid, at least 30 days but not more than 60 days prior to said
redemption date to the holders of record of the Series B Preferred Stock to
be redeemed at their respective addresses as the same shall appear on the
books of the Corporation. If such notice of redemption shall have been so
mailed, and if on or before the redemption date specified in such notice,
all funds necessary for such redemption shall have been set aside by the
Corporation separate and apart from its other funds, in trust for the
account of the holders of the shares so to be redeemed, so as to be and
continue to be available therefor, then, on and after said redemption date,
notwithstanding that any certificate for shares of the Series B Preferred
Stock so called for redemption shall not have been surrendered for
cancellation, the shares represented thereby so called for redemption shall
be deemed to be no longer outstanding and all rights with respect to such
shares of the Series B Preferred Stock so called for redemption shall
forthwith cease and terminate, except only the right of the holders thereof
to receive out of the funds so set aside in trust the amount payable on
redemption thereof, but without interest.
Shares of Series B Preferred Stock redeemed or otherwise purchased
or acquired by the Corporation shall not be reissued as shares of Series B
Preferred Stock but shall assume the status of authorized but unissued
shares of Preferred Stock of the Corporation.
5. VOTING RIGHTS. The holders of the Series B Preferred Stock shall have
two and one-half votes per share on all matters requiring the vote of
stockholders, and additionally, if the voting rights of the Class B Common
Stock are increased, then the voting rights of the Series B Preferred Stock
shall be increased by an amount which will maintain the two and one-half to
one proportion between the voting rights of the Class B Common Stock and
the Series B Preferred Stock as is hereby established.
Additionally, if at any time the equivalent of six or more full
quarterly dividends (whether or not consecutive) payable on the Series B
Preferred Stock shall not be paid, the number of directors constituting the
Board of Directors of the Corporation shall be increased by two, and the
holders of the Series B Preferred Stock (whether or not the payment of
quarterly dividends shall not be paid on other Preferred Stock outstanding)
shall have the exclusive right, voting together as a class, to elect two
directors to fill such newly created directorships. This right shall remain
vested until dividends on the Series B Preferred Stock have been paid for
four consecutive quarters, at which time: (i) the right shall terminate
(subject to revesting in the case of any subsequent failure to pay of the
kind described above); (ii) the term of the directors then in office
elected by the holders of the Series B Preferred Stock as a class shall
terminate; and (iii) the number of directors constituting the Board of
Directors of the Corporation shall be reduced by two.
C-3
<PAGE>
Whenever such right shall vest, it may be exercised initially
either at a special meeting of holders of the Series B Preferred Stock or
at any annual stockholders' meeting, but thereafter it shall be exercised
only at annual stockholders' meetings. Any director who shall have been
elected by the holders of the Series B Preferred Stock as a class pursuant
to this Section 5 shall hold office for a term expiring at the next annual
meeting of stockholders, and during such term may be removed at any time,
either for or without cause, by, and only by, the affirmative votes of the
holders of record of a majority of the outstanding shares of the Series B
Preferred Stock given at a special meeting of such stockholders called for
such purpose, and any vacancy created by such removal may also be filled at
such meeting. Any vacancy caused by the death or resignation of a director
who shall have been elected by the holders of the Series B Preferred Stock
as a class pursuant to this Section 5 may be filled only by the remaining
director elected by the holders of the Series B Preferred Stock then in
office.
Whenever a meeting of the holders of Series B Preferred Stock is
permitted or required to be held pursuant to this Section 5, such meeting
shall be held at the earliest practicable date and the Secretary of the
Corporation shall call such meeting, providing written notice to all
holders of record of Series B Preferred Stock, in accordance with law, upon
the earlier of the following:
(a) as soon as reasonably practicable following the occurrence of
the event or events permitting or requiring such meeting
hereunder; or
(b) within 20 days following receipt by said Secretary of a
written request for such a meeting, signed by the holders of
record of at least 20% of the shares of Series B Preferred Stock
then outstanding.
If such meeting shall not be called by the proper
corporate officer within 20 days after the receipt of such request
by the Secretary of the Corporation, or within 25 days after the
mailing of the same within the United States of America by
registered mail addressed to the Secretary of the Corporation at
its principal office, then the holders of record of at least 20%
of the shares of Series B Preferred Stock then outstanding may
designate one of their members to call such a meeting at the
expense of the Corporation, and such meeting may be called by such
person in the manner and at the place provided in this Section 5.
Any holder of Series B Preferred Stock so designated to call such
meeting shall have access to the stock books of the Corporation
for the purpose of causing a meeting of such stockholders to be so
called.
Notwithstanding any provision of this Section 5 to the
contrary, no special meeting of the holders of shares of Series B
Preferred Stock: (i) shall be held during the 90-day period next
preceding the date fixed for the annual meeting of stockholders of
the Corporation; or (ii) shall be required to be called or held in
violation of any law, rule or regulation.
Any meeting of the holders of all outstanding Series B
Preferred Stock entitled to vote as a class for the election of
directors shall be held at the place at which the last annual
meeting of stockholders was held. At such meeting, the presence in
person or by proxy of the holders of a majority of the outstanding
shares of the Series B Preferred Stock shall be required to
constitute a quorum; in the absence of a quorum, a majority of the
holders present, in person or by proxy, shall have the power to
adjourn the meeting from time to time without notice, other than
an announcement at the meeting, until a quorum shall be present.
6. CONVERTIBILITY. Shares of the Series B Preferred Stock
(hereinafter in this Section 6 called the "Shares") shall be convertible
into Class B Common Stock on the following terms and conditions:
(a) Subject to and upon compliance with the provisions of this
Section 6, the holder of any Shares may at such holder's option
convert any such Shares into such number of fully paid and
non-assessable shares of Class B Common Stock as are issuable
pursuant to the formula set forth in subsections (c) and (d) of
this Section 6. No adjustment shall be made for dividends on any
Class B Common Stock that shall be issuable upon the conversion of
such Shares.
(b) The surrender of any Shares for conversion shall be made by
the holder thereof to the Corporation at its principal office and
such holder shall give written notice to the Corporation at said
office that such holder elects to convert such Shares in
accordance with the provisions thereof and this Section 6. Such
notice also
C-4
<PAGE>
shall state the name or names (with addresses) in which the
certificate or certificates for the Class B Common Stock, which
shall be issuable on such conversion, shall be issued. Subject to
the provisions of subsection (a) of this Section 6, every such
notice of election to convert shall constitute a contract between
the holder of such shares and the Corporation, whereby such holder
shall be deemed to subscribe for the number of shares of Class B
Common Stock which such holder will be entitled to receive upon
such conversion and, in payment and satisfaction of such
subscription, to surrender such Shares and to release the
Corporation from all obligations thereon, and whereby the
Corporation shall be deemed to agree that the surrender of such
Shares and the extinguishment of its obligations thereon shall
constitute full payment for the Class B Common Stock so subscribed
for and to be issued upon such conversion.
As soon as practicable, after the receipt of such notice
and Shares, the Corporation shall issue and shall deliver to the
person for whose account such Shares were so surrendered, or on
such holder's written order, a certificate or certificates for the
number of full shares of Class B Common Stock issuable upon the
conversion of such Shares and a check or cash for the payment (if
any) to which such person is entitled pursuant to subsection (e)
of this Section 6, together with a certificate or certificates
representing the Shares, if any, which are not to be converted,
but which constituted part of the Shares represented by the
certificate or certificates surrendered by such person. Such
conversion shall be deemed to have been effected on the date on
which the Corporation shall have received such notice and such
Shares, and the person or persons in whose name or names any
certificate or certificates for Class B Common Stock shall be
issuable upon such conversion shall be deemed to have become on
said date the holder or holders of record of the shares
represented thereby.
(c) The Conversion Rate shall be 1.495919425 shares of Class B
Common Stock for each share of Series B Preferred Stock
surrendered for conversion.
(d) The Conversion Rate shall be subject to adjustment from time
to time as follows:
(1) If the Corporation shall (i) pay a dividend in shares
of its Class B Common Stock, (ii) subdivide the outstanding shares
of Class B Common Stock into a greater number of shares, (iii)
combine its outstanding shares of the Class B Common Stock into a
smaller number of shares, or (iv) issue by reclassification of its
shares of Class B Common Stock any shares of its capital stock,
then the Conversion Rate in effect immediately prior thereto shall
be adjusted so that the holder of a Share surrendered for
conversion after the record date fixing stockholders to be
affected by such event shall be entitled to receive upon
conversion the numbers of such shares of the Corporation which
such holder would have been entitled to receive after the
happening of such event had such shares been converted immediately
prior to such record date. Such adjustment shall be made whenever
any of such events shall happen, and shall also be effective
retroactively as to shares converted between such record date and
the date of the happening of any such event.
(2) If the Corporation shall issue rights or warrants to
the holders of its Class B Common Stock entitling them to
subscribe for or purchase shares of Class B Common Stock, at a
price per share less than the current market price per share of
the Class A Common Stock (as defined in subsection (d)(5) of this
Section 6) at the record date mentioned below, then the number of
shares of Class B Common Stock into which each share shall
thereafter be convertible shall be determined by multiplying the
number of shares of Class B Common Stock into which such share was
theretofore convertible by a fraction, the numerator of which
shall be the number of shares of the Class B Common Stock
outstanding on the date of issuance of such rights or warrants
plus the number of additional shares of the Class B Common Stock
offered for subscription or purchase, and the denominator of which
shall be the number of shares of the Class B Common Stock
outstanding on the date of issuance of such rights or warrants
plus the number of shares of the Class B Common Stock which the
aggregate offering price of the total number of shares so offered
would purchase based on current market price per share (as defined
in subsection (d)(5) of this Section 6). Such adjustment shall be
made whenever such rights or warrants are issued, and shall also
be effective retroactively as to shares converted between the
record date for the determination of stockholders entitled to
receive such rights or warrants and the date such rights or
warrants are issued.
(3) If the Corporation shall distribute to the holders of the
Class B Common Stock evidence of its indebtedness or assets
(excluding cash dividends or distributions made out of current or
retained earnings) or
C-5
<PAGE>
rights or warrants to subscribe other than as referred to in
subsection (d)(2) of this Section 6, then in each such case the
number of shares of the Class B Common Stock into which each share
shall thereafter be convertible shall be determined by multiplying
the number of shares of the Class B Common Stock into which such
share was theretofore convertible by a fraction, the numerator of
which shall be the current market price per share of the Class A
Common Stock (as defined in subsection (d)(5) of this Section 6)
on the date of such distribution, and the denominator of which
shall be such current market price per share of the Class A Common
Stock, as the case may be, less the then fair market value (as
determined by the Board of Directors of the Corporation, whose
determination shall be conclusive) of the portion of the assets,
evidence of indebtedness, subscription rights or warrants so
distributed applicable to one share of the Class B Common Stock.
Such adjustment shall be made whenever any such distribution is
made, and shall also be effective retroactively as to the shares
converted between the record date for the determination of
stockholders entitled to receive such distribution and the date
such distribution is made.
(4) In the event of any consolidation of the Corporation
with or merger of the Corporation into another corporation, or in
the event of any sale, conveyance, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Corporation to
another corporation, or in the case of any reorganization of the
Corporation, the holder of each share then outstanding shall have
the right thereafter to convert such shares into the kind and
amount of shares of stock and other securities and property,
including cash, which would have been deliverable to such holder
upon such consolidation, merger, sale, conveyance, exchange,
transfer or reorganization if such holder had converted such
holder's shares into the Class B Common Stock immediately prior to
such consolidation, merger, sale, conveyance, exchange, transfer
or reorganization. In any such event, effective provision shall be
made in the instrument effecting or providing for such
consolidation, merger, sale, conveyance, exchange, transfer or
reorganization so that the provisions set forth herein for the
protection of the conversion rights of the Shares shall thereafter
be applicable, as nearly as may be practicable, in relation to any
shares of stock or other securities or property including cash,
deliverable after such consolidation, merger, sale, conveyance,
exchange, transfer or reorganization upon the conversion of the
Series B Preferred Stock, or such other securities as shall have
been issued to the holders thereof in lieu thereof or in exchange
therefor. The provisions of this subsection (d)(4) shall similarly
apply to successive consolidations, mergers, sales, conveyances,
exchanges, transfers and reorganizations.
(5) For purposes of computation under subsections (d)(2)
and (d)(3) of this Section 6, the current market price per share
of the Class A Common Stock at any date shall be deemed to be the
average of the daily closing prices for the 20 consecutive
business days immediately prior to the day in question, if the
Class B Common Stock is convertible into Class A Common Stock on a
one-for-one basis, and if the Class B Common Stock is not
convertible into Class A Common Stock on a one-for-one basis, then
the current market price per share of Class A Common Stock at any
date shall be deemed to be such average multiplied by the then
current conversion rate of the Class B Common Stock into the Class
A Common Stock. The closing price for each day shall be the last
reported sales price, regular way, on the principal national
securities exchange upon which the Class A Common Stock is listed,
or in case no such reported sale take place on such day, the
average of the reported closing bid and asked prices, regular way,
on such national securities exchange, or if the Class A Common
Stock is not then listed on a national securities exchange, the
average of the closing prices or, if applicable, closing bid and
asked prices in the over-the-counter market as furnished by the
nationally recognized securities firm or association selected from
time to time by the Corporation for that purpose.
(6) No adjustment in the Conversion Rate shall be required
unless such adjustment would require an increase or decrease of at
least 2% in the Conversion Rate; provided, however, that any
adjustments which by reason of this subsection (d)(6) are not
required to be made, and are not made, shall be carried forward
and taken into account in any subsequent adjustment. All
calculations under this subsection (d)(6) shall be made to the
nearest cent or one-hundredth of a share, as the case may be.
<PAGE>
(e) Receipt by a holder of Series B Preferred Stock of a notice of
redemption pursuant to Section 4 of these resolutions shall not
terminate the conversion rights set forth in this Section 6, but
rather such conversion rights shall continue until the redemption
date set forth in the notice of redemption.
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(f) No fractional shares or scrip representing fractional shares
shall be issued upon the conversion of any shares. If more than
one share shall be surrendered for conversion at one time by the
same holder, the number of full shares issuable upon conversion
thereof shall be computed on the basis of the aggregate number of
such shares so surrendered. If the conversion of any shares
results in a fraction, an amount equal to such fraction multiplied
by the current market price (determined as provided in subsection
(d)(5) of this Section 6) of the Class A Common Stock on the
business day next preceding the date of conversion shall be paid
to such holder in cash by the Corporation.
(g) The issue of stock certificates on conversion of shares shall
be made free of any tax in respect of such issue. The Corporation
shall not, however, be required to pay any tax which may be
payable in respect to any transfer involved in the issue and
delivery of stock in a name other than that of the holder of the
shares converted, and the Corporation shall not be required to
issue or deliver any such stock certificates unless and until the
person or persons requesting the issuance thereof shall have paid
to the Corporation the amount of any such tax or shall have
established to the satisfaction of the Corporation that such tax
has been paid.
(h) If in any case a state of facts occurs wherein the opinion of
the Board of Directors and the other provisions of this Section 6
are not strictly applicable, or if strictly applicable, would not
fairly protect the conversion rights of the Series B Preferred
Stock in accordance with the essential intent and principles of
such provisions, then the Board of Directors shall make an
adjustment in the application of such provisions in accordance
with such essential intent and principles so as to protect such
conversion rights as aforesaid.
(i) The Corporation shall at all times reserve and keep available
out of its authorized Class B Common Stock the full number of
shares of the Class B Common Stock deliverable upon the conversion
of all outstanding shares of Series B Preferred Stock and shall
take all such corporate action as may be required from time to
time in order that it may validly and legally issue fully paid and
non-assessable shares of Class B Common Stock upon conversion of
the Series B Preferred Stock.
(j) Shares of Series B Preferred Stock converted shall not be
reissued as shares of Series B Preferred Stock but shall assume
the status of authorized but unissued shares of Preferred Stock of
the Corporation.
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APPENDIX D
STATEMENT OF DESIGNATION
OF
NONCUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES C
OF
BANKUNITED FINANCIAL CORPORATION
WHEREAS, pursuant to Article VI of the Articles of Incorporation of
BankUnited Financial Corporation (the "Corporation") and Section 607.0602 of the
Florida Business Corporation Act, the Board of Directors of the Corporation is
authorized to divide the Corporation's authorized Preferred Stock into series
and, within the limitations set forth therein, fix and determine the relative
rights and preferences of the shares of any series so established;
WHEREAS, the Board of Directors desires to (i) establish a series of the
Preferred Stock, designating such series "Noncumulative Convertible Preferred
Stock, Series C," (ii) allocate 363,636 shares of the authorized Preferred Stock
to the Noncumulative Convertible Preferred Stock, Series C, and (iii) fix and
determine the relative rights and preferences of the Noncumulative Convertible
Preferred Stock, Series C;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby
allocates a portion of the Preferred Stock to a series designated Noncumulative
Convertible Preferred Stock, Series C and fixes and determines the relative
rights and preferences of the Noncumulative Convertible Preferred Stock, Series
C, as set forth below:
1. DESIGNATION AND ALLOCATION. Of the 10,000,000 shares of Preferred Stock
authorized by the Articles of Incorporation of the Corporation, 363,636 shares
are hereby determined to be and shall be of a series designated as Noncumulative
Convertible Preferred Stock, Series C ("Series C Preferred Stock").
2. PARITY. The Series C Preferred Stock is of the same class as and shall
be on a parity with the Corporation's currently outstanding Noncumulative
Convertible Preferred Stock, Series A, B and C-II (the "Outstanding Parity
Stock"), except as may be provided elsewhere herein.
3. DIVIDENDS. The holders of the Series C Preferred Stock shall be entitled
to receive, when, as, and if declared by the Board of Directors and out of the
assets of the Corporation which are by law available for the payment of
dividends, preferential cash dividends payable quarterly on the last day of
February, May, August and November of each year unless such day is a
non-business day, in which event on the next business day, at the fixed annual
rate of $0.55 per share and no more.
So long as any Series C Preferred Stock remains outstanding:
(a) no dividend whatsoever shall be declared or paid upon or set
apart for payment, and no distribution shall be ordered or made in respect of:
(i) the Corporation's Series I Class A Common Stock, par value $.01 per share
(the "Class A Common Stock"), or the Class B Common Stock, par value $.01 per
share (the "Class B Common Stock"), or any other outstanding common stock of the
Corporation, or (ii) any other class of stock or series thereof ranking junior
to the Series C Preferred Stock in the payment of dividends; and
(b) no shares of the Class A Common Stock or the Class B Common
Stock and no shares of any other class of stock or series thereof ranking junior
to the Series C Preferred Stock in the payment of dividends shall be redeemed or
purchased by the Corporation or any subsidiary thereof; and
(c) no moneys, funds or other assets shall be paid to or made
available for a sinking fund for the redemption or purchase of any shares of:
(i) the Class A Common Stock or the Class B Common Stock; or (ii) any other
class of stock or series thereof ranking junior to the Series C Preferred Stock
in the payment of dividends;
unless, in each instance, full dividends on all outstanding shares of Series C
Preferred Stock for the then current calendar quarter shall have been paid or
declared and set aside for payment.
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In addition, so long as any Series C Preferred Stock remains outstanding,
no dividend whatsoever shall be declared or paid upon or set apart for payment,
and no distribution shall be ordered or made in respect of, any share or shares
of any class of stock or series thereof ranking on a parity with the Series C
Preferred Stock (including the Outstanding Parity Stock) in the payment of
dividends, unless, for the applicable calendar quarter:
(a) full dividends shall be paid or declared and set apart for
payment on all shares of: (i) the Series C Preferred Stock; and (ii) any class
of stock or series thereof ranking on a parity with the Series C Preferred Stock
(including the Outstanding Parity Stock) in the payment of dividends; or
(b) in the event all such dividends for the applicable calendar
quarter are not or cannot be paid or declared and set apart for payment in full,
a pro rata portion of the full dividends shall be paid or declared and set apart
for payment on all shares of: (i) the Series C Preferred Stock; and (ii) any
class of stock or series thereof ranking on a parity with the Series C Preferred
Stock (including the Outstanding Parity Stock) in the payment of dividends. Such
pro rata portion shall be calculated based on the ratio that the total amount
available for the payment of all required dividends on the Series C Preferred
Stock and such parity stock for the applicable calendar quarter bears to the
total required dividends on the Series C Preferred Stock and such parity stock
for such calendar quarter.
4. PREFERENCE ON LIQUIDATION. In the event of any dissolution, liquidation
or winding up of the affairs of the Corporation, after payment or provision for
payment of any debts and other liabilities of the Corporation, the holders of
the Series C Preferred Stock shall be entitled to receive the following amounts
out of the net assets of the Corporation, and before any distribution shall be
made to the holders of any common stock or to the holders of any other class of
stock or series thereof ranking junior to the Series C Preferred Stock in the
distribution of assets:
(a) if such dissolution, liquidation or winding up is voluntary,
the applicable redemption price per share determined as provided in section 5 of
these resolutions;
(b) if such dissolution, liquidation or winding up is involuntary,
$5.50 per share;
and no more. If upon such voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Corporation the net assets of the Corporation
shall be insufficient to permit payment in full of the amounts required to be
paid to the holders of the Series C Preferred Stock and to the holders of any
class of stock or series thereof ranking on a parity with the Series C Preferred
Stock (including the Outstanding Parity Stock) in respect of the distribution of
assets, then a pro rata portion of the full amount required to be paid upon such
dissolution, liquidation or winding up shall be paid to: (i) the holders of
Series C Preferred Stock; and (ii) the holders of any class of stock or series
thereof ranking on a parity with the Series C Preferred Stock (including the
Outstanding Parity Stock) in respect of the distribution of assets. Such pro
rata portion shall be calculated upon the ratio that the total amount available
for distribution to such holders bears to the total distribution required to be
made on the Series C Preferred Stock and such parity stock.
Neither the merger nor consolidation of the Corporation into or with any
other corporation, nor the merger or consolidation of any other corporation into
or with the Corporation, nor a sale, transfer or lease of all or any part of the
assets of the Corporation shall be deemed to be a dissolution, liquidation or
winding up of the Corporation within the meaning of this section 4.
Written notice of any voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Corporation, stating a payment date and the
place where the distribution amounts shall be payable, shall be given by mail,
postage prepaid, at least 30 days but not more than 60 days prior to the payment
date stated therein, to the holders of record of the Series C Preferred Stock at
their respective addresses as the same shall appear on the books of the
Corporation.
5. REDEMPTION. The Corporation shall have the right, at its option and by
resolution of its Board of Directors, to redeem at any time and from time to
time the Series C Preferred Stock in whole or in part, upon payment in cash in
respect of each share redeemed at the redemption price of $5.50.
If less than all of the outstanding shares of the Series C Preferred Stock
shall be redeemed, the particular shares to be redeemed shall be allocated among
the respective holders of Series C Preferred Stock pro rata or by lot, as the
Board of Directors may determine.
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<PAGE>
Notice of any redemption specifying the date fixed for said redemption and
the place where the amount to be paid upon redemption is payable and containing
a statement of, or reference to, the conversion right set forth in section 7 of
these resolutions shall be mailed, postage prepaid, at least 30 days but not
more than 60 days prior to said redemption date to the holders of record of the
Series C Preferred Stock, to be redeemed at their respective addresses as the
same shall appear on the books of the Corporation. If such notice of redemption
shall have been so mailed, and if on or before the redemption date specified in
such notice, all funds necessary for such redemption shall have been set aside
by the Corporation separate and apart from its other funds, in trust for the
account of the holders of the shares so to be redeemed, so as to be and continue
to be available therefor, then, on and after said redemption date,
notwithstanding that any certificate for shares of the Series C Preferred Stock
so called for redemption shall not have been surrendered for cancellation, the
shares represented thereby so called for redemption shall be deemed to be no
longer outstanding, the right to receive dividends thereon shall cease, and all
rights with respect to such shares of the Series C Preferred Stock so called for
redemption shall forthwith cease and terminate, except only the right of the
holders thereof to receive out of the funds so set aside in trust the amount
payable on redemption thereof, but without interest.
Shares of Series C Preferred Stock redeemed or otherwise purchased or
acquired by the Corporation shall not be reissued as shares of Series C
Preferred Stock but shall assume the status of authorized but unissued shares of
Preferred Stock of the Corporation.
6. VOTING RIGHTS. Except as may be otherwise provided by
applicable law, the Series C Preferred Stock shall be non-voting
7. CONVERTIBILITY. Shares of the Series C Preferred Stock
(hereinafter in this section 7 called the "Shares") shall be convertible into
the Corporation's Class A Common Stock on the following terms and conditions:
(a) CONVERSION. Subject to and upon compliance with the provisions
of this section 7, the holder of any Shares may, at such holder's option,
convert any such Shares into such number of fully paid and non-assessable shares
of the Class A Common Stock as are issuable pursuant to the formula set forth in
subsections 7(b), (c) and (d) of this section 7 by surrendering any Shares for
conversion to the Corporation at its principal office and by furnishing written
notice to the Corporation at said office that such holder elects to convert in
accordance with the provisions hereof. Such notice also shall state the name or
names (with addresses) in which the certificate or certificates for Class A
Common Stock which shall be issuable on such conversion shall be issued. Every
such notice of election to convert shall constitute a contract between the
holder and the Corporation, whereby such holder shall be deemed to subscribe for
the number of shares of Class A Common Stock which such holder will be entitled
to receive upon such conversion and, in payment and satisfaction of such
subscription, to surrender such Shares and to release the Corporation from all
obligations thereon, and whereby the Corporation shall be deemed to agree that
the surrender of such Shares and the extinguishment of its obligations thereon
shall constitute full payment for the Class A Common Stock so subscribed for and
to be issued upon such conversion.
As soon as practicable after the receipt of such notice and Shares, the
Corporation shall issue and shall deliver to the holder for whose account such
Shares were so surrendered, or on such holder's written order, a certificate or
certificates for the number of full shares of Class A Common Stock issuable upon
the conversion of such Shares and a check or cash for the payment (if any) to
which such person is entitled pursuant to subsection 7(d) hereof, together with
a certificate or certificates representing the Shares, if any, which are not to
be converted, but which constituted part of the Shares represented by the
certificate or certificates surrendered by such holder. Such conversion shall be
deemed to have been effected on the date on which the Corporation shall have
received such notice and such Shares, and the person or persons in whose name or
names any certificate or certificates for Class A Common Stock shall be issuable
upon such conversion shall be deemed to have become on said date the holder or
holders of record of the shares represented thereby.
(b) BASIC CONVERSION RATE. The rate at which the holder of any
Shares may convert such Shares into Class A Common Stock (the "Conversion Rate")
shall be 1.45475 shares of Class A Common Stock for each Share which is
surrendered for conversion, subject to adjustment as provided in subsection 7(c)
hereinbelow.
(c) CONVERSION RATE ADJUSTMENT. The Conversion Rate shall be
subject to adjustment from time to time as follows:
(1) If the Corporation shall (i) pay a stock dividend in
and on shares of its Class A Common Stock, (ii) subdivide its outstanding shares
of Class A Common Stock into a greater number of shares, (iii) combine its
outstanding
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shares of Class A Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Class A Common Stock any shares of its capital
stock, then the Conversion Rate in effect immediately prior thereto shall be
adjusted so that the holder of any Shares surrendered for conversion after the
record date fixing stockholders to be affected by such event shall be entitled
to receive upon conversion the number of such shares of Class A Common Stock
which such holder would have been entitled to receive after the happening of
such event had such Shares been converted immediately prior to such record date.
Such adjustment, if applicable, shall be made whenever any of such events shall
happen, and shall also be effective retroactively as to the Shares converted
between such record date and the date of the happening of any such event.
(2) In the event of any consolidation of the Corporation
with or merger of the Corporation into another corporation, or in the event of
any sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation to another corporation, or in the case of any
reorganization of the Corporation, the Corporation or the surviving entity shall
have the right to require that if the holder of such Shares shall thereafter
convert such Shares such conversion shall be into the kind and amount of shares
of stock and other securities and property, including cash, which would have
been deliverable to such holder upon such consolidation, merger, sale,
conveyance, exchange, transfer or reorganization if such holder had converted
such holder's Shares into Class A Common Stock immediately prior to such
consolidation, merger, sale, conveyance, exchange, transfer or reorganization.
In any such event, effective provision shall be made in the instrument effecting
or providing for such consolidation, merger, sale, conveyance, exchange,
transfer or reorganization so that the provisions set forth herein for the
conversion rights of the holder of Shares shall thereafter be applicable, as
nearly as may be practicable, in relation to any shares of stock or other
securities or property, including cash, deliverable after such consolidation,
merger, sale, conveyance, exchange, transfer or reorganization upon the
conversion. The provisions of this subsection 7(c)(2) shall similarly apply to
successive consolidations, mergers, sales, conveyances, exchanges, transfers and
reorganizations.
The Corporation shall provide written notice of any action contemplated
pursuant to this subsection 7(c)(2) at least 10 days prior to the record date of
such action, to the holders of record of the Series C Preferred Stock to their
respective addresses as the same shall appear on the books of the Corporation.
The Corporation shall also provide the holders of record of the Series C
Preferred Stock with written notice at least 10 days prior to the record date
set for the consideration of any other extraordinary business matters (provided,
however, that any routine business matters including, but not limited to, the
setting of record dates for (i) the declaration of regular dividends and (ii)
annual stockholders' meetings that do not require the filing of a preliminary
proxy statement with the Securities and Exchange Commission or its successor
shall be excluded from such notice provisions).
(3) No adjustment in the Conversion Rate shall be required
unless such adjustment would require an increase or decrease of at least 2% in
such Conversion Rate; provided, however, that any adjustments which by reason of
this subsection 7(c)(3) are not required to be made, and are not made, shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this subsection 7(c)(3) shall be made to the nearest cent or
one-hundredth of a share, as the case may be.
(d) FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the conversion of any Shares. If more
than one Share shall be surrendered for conversion at one time by the same
holder, the number of full shares issuable upon conversion thereof shall be
computed on the basis of the aggregate face amount of such Shares so
surrendered. If the conversion of any Shares results in a fraction, an amount
equal to such fraction multiplied by the Conversion Rate, subject to adjustment
as provided in subsection (c) hereof, shall be paid to such holder in cash by
the Corporation.
(e) TAX. The Corporation shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of stock in the name other than that of the holder of the Shares
converted, and the Corporation shall not be required to issue or deliver any
such stock certificates unless and until the person or persons requesting the
issuance thereof shall have paid to the Corporation the amount of any such tax
or shall have established to the satisfaction of the Corporation that such tax
has been paid.
(f) RESERVATION OF SHARES. The Corporation shall at all times
reserve and keep available out of its authorized Class A Common Stock the full
number of shares of Class A Common Stock deliverable upon the conversion of all
outstanding Shares and shall take all such corporate action as may be required
from time to time in order that it may validly and legally issue fully paid and
non-assessable shares of Class A Common Stock upon conversion of the Shares.
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APPENDIX E
STATEMENT OF DESIGNATION
OF
NONCUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES C-II
OF
BANKUNITED FINANCIAL CORPORATION
WHEREAS, pursuant to Article VI of the Articles of Incorporation of the
Corporation, the Board of Directors of the Corporation is authorized to divide
the Corporation's authorized Preferred Stock, $.01 par value (the "Preferred
Stock"), into series and, within the limitations set forth therein, fix and
determine the relative rights and preferences of the shares of any series so
established;
WHEREAS, the Board of Directors desires to (i) establish a series of the
Preferred Stock, designating such series "Noncumulative Convertible Preferred
Stock, Series C-II," (ii) allocate 222,223 shares of the authorized Preferred
Stock to the Noncumulative Convertible Preferred Stock, Series C-II, and (iii)
fix and determine the relative rights and preferences of the Noncumulative
Convertible Preferred Stock, Series C-II;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby
allocates a portion of the Preferred Stock to a series designated Noncumulative
Convertible Preferred Stock, Series C-II (the "Series C-II Preferred Stock"),
and fixes and determines the relative rights and preferences of the Series C-II
Preferred Stock, as set forth below:
1. DEFINITIONS
(a) Articles of Incorporation - the Articles of
Incorporation, as amended, of the Corporation as filed with the Florida
Secretary of State.
(b) Board of Directors - the Board of Directors of the
Corporation.
(c) The Corporation - BankUnited Financial Corporation.
(d) Common Stock - the Corporation's Series I Class A Common
Stock, $.01 par value, and Class B Common Stock, $.01 par value.
(e) Dividend Payment Date - the last day of each quarter during
which a dividend on the Series C-II Preferred Stock is declared by the Board of
Directors, unless such day is a non-business day, in which event such Dividend
Payment Date shall be the next business day.
(f) Dividend Payment Period - a Dividend Period for which a
dividend on the Series C-II Preferred Stock is declared by the Board of
Directors.
(g) Dividend Period - a quarterly period for which a dividend is
due and payable on the Series C-II Preferred Stock when, as and if declared by
the Board of Directors, commencing on and including the first day of a quarter
for which a dividend is due and payable and ending on and including the last day
of such quarter, unless such day is a non-business day, in which event on the
next business day.
(h) Junior Stock - the Common Stock and such other classes and/or
series of equity securities which, as designated by the Board of Directors in
its sole discretion, rank junior to the Series C-II Preferred Stock with respect
to any one or more of the following: (i) dividend rights, (ii) rights upon
liquidation, dissolution or winding up of the Corporation, (iii) redemption
rights or (iv) any other rights specified by the Board of Directors.
(i) Parity Stock - any classes and/or series of equity securities
which, as designated by the Board of Directors in its sole discretion, rank on a
parity with the Series C-II Preferred Stock with respect to any one or more of
the following: (i) dividend rights, (ii) rights upon liquidation, dissolution or
winding up of the Corporation, (iii) redemption rights
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or (iv) any other rights specified by the Board of Directors, whether or not the
dividend rates, dividend periods, or liquidation prices per share thereof are
different from those of the Series C-II Preferred Stock.
(j) Passed Dividend - a dividend for a Dividend Period which the
Board of Directors omits or fails to declare or determines not to declare
whether or not dividends are declared on any future Dividend Payment Periods.
(k) Preferred Stock - the Corporation's Preferred Stock, $.01
par value.
(l) Senior Stock - any classes and/or series of equity securities
of the Corporation in which, as designated by the Board of Directors in its sole
discretion, the holders of such classes and/or series shall be entitled to any
one or more of the following: (i) dividend rights, (ii) rights upon liquidation,
dissolution or winding up of the Corporation, (iii) redemption rights or (iv)
any other rights specified by the Board of Directors, in preference or priority
to the holders of Series C-II Preferred Stock.
(m) Series A Preferred Stock - the Corporation's Noncumulative
Convertible Preferred Stock, Series A.
(n) Series B Preferred Stock - the Corporation's Noncumulative
Convertible Preferred Stock, Series B.
(o) Series C Preferred Stock - the Corporation's Noncumulative
Convertible Preferred Stock, Series C.
2. DESIGNATION AND ALLOCATION. Of the 10,000,000 shares of Preferred Stock
authorized by the Articles of Incorporation of the Corporation, 222,223 shares
are hereby determined to be and shall be of a series designated as Noncumulative
Convertible Preferred Stock, Series C-II.
3. RANK. The Series C-II Preferred Stock shall rank, with respect to
dividend rights and rights upon liquidation, dissolution or winding up of the
Corporation, senior to the Common Stock. The Series C-II Preferred Stock shall
rank, as to dividend rights, rights upon liquidation and dissolution or winding
up of the Corporation, on a parity with the Series A, Series B and Series C
Preferred Stock.
The Series C-II Preferred Stock shall be subject to the future
authorization and issuance of additional classes and/or series of equity
securities ranking junior to, on a parity with, or senior to the Series C-II
Preferred Stock with respect to any one or more of the following: (i) dividend
rights, (ii) rights upon liquidation, dissolution or winding up of the
Corporation, (iii) redemption rights or (iv) any other rights specified by the
Board of Directors, including, without limitation, series of Preferred Stock
that are cumulative as to dividends. The Board of Directors shall, in its sole
discretion, determine whether any such additional classes and/or series of
equity securities shall be designated as Junior Stock, Parity Stock or Senior
Stock.
4. DIVIDENDS
(a) RATE AND PAYMENTS. Holders of shares of the Series C-II
Preferred Stock shall be entitled to receive, when, as, and if declared by the
Board of Directors out of the funds legally available for payment, noncumulative
cash dividends, payable quarterly, from the date of issue thereof at the annual
rate of 8.9% ($0.801 per share). Dividends on the Series C-II Preferred Stock,
when declared by the Board of Directors, shall be payable quarterly on each
Dividend Payment Date.
The amount of dividends payable for any period other than a full
Dividend Payment Period shall be computed on the basis of a 365-day year and the
actual number of days elapsed in the period. Dividends payable for each full
Dividend Period shall be computed by dividing the annual dividend rate by four.
Each declared dividend shall be payable to holders of record as
they appear at the close of business on the stock books of the Corporation on
such record dates, not more than 20 calendar days and not less than 10 calendar
days preceding the payment dates therefor, as are determined by the Board of
Directors.
(b) NONCUMULATIVE DIVIDENDS. Dividends on the shares of Series
C-II Preferred Stock shall be noncumulative, that is, if the Board of Directors
omits or fails to declare or determines, in its sole discretion, not to declare
a dividend for any Dividend
Period, then the Corporation shall have no
obligation to pay such Passed Dividend and the
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holders of the Series C-II Preferred Stock will have no right to, or a prior
claim or preference to, the Passed Dividend, whether or not funds are or
subsequently become available for the payment of such Passed Dividend.
The Board of Directors may determine, in its sole discretion, that
the Corporation shall pay less than the stated amount of dividends on the Series
C-II Preferred Stock for any Dividend Period notwithstanding that funds are or
subsequently become available for the payment of such dividend. Any portion of a
dividend for a Dividend Period not declared shall be deemed a Passed Dividend
and treated as described above.
(c) PARITY AND JUNIOR STOCK RIGHTS. No full dividends shall be
declared and paid, or declared and set apart for payment, on any stock ranking,
as to dividend rights, on a parity with the Series C-II Preferred Stock, unless
full dividends shall have been or contemporaneously are declared and paid, or
declared and set apart for payment, on all shares of the Series C-II Preferred
Stock.
If at any time with respect to any Dividend Period, dividends are
declared in part and paid in part, or declared in part and set apart for payment
in part, on the Series C-II Preferred Stock, a pro rata portion shall be
declared and paid, or declared and set apart for payment, on all shares of the
Series C-II Preferred Stock together with any stock ranking, as to dividend
rights, on a parity with the Series C-II Preferred Stock. Such pro rata portion
shall be calculated based on the ratio that the total amount available for the
payment of dividends on the Series C-II Preferred Stock plus such stock ranking,
as to dividend rights, on a parity with the Series C-II Preferred Stock bears to
the total payment of full dividends on the Series C-II Preferred Stock together
with such stock ranking, as to dividend rights, on a parity with the Series C-II
Preferred Stock.
Unless full dividends have been declared and paid, or declared and
set apart for payment, on all outstanding shares of Series C-II Preferred Stock
for the applicable Dividend Period, the Corporation shall not (i) declare any
dividends on any stock ranking, as to dividend rights, junior to the Series C-II
Preferred Stock (other than in other Junior Stock), (ii) redeem, purchase or
otherwise acquire any stock ranking, as to dividend rights, on a parity with or
junior to the Series C-II Preferred Stock, for any consideration except by
conversion into or exchange for Junior Stock or (iii) pay or make available any
monies, funds or other assets for any sinking fund for the redemption or
purchase of any stock ranking, as to dividend rights, on a parity with or junior
to the Series C-II Preferred Stock.
Holders of the Series C-II Preferred Stock shall not be entitled
to any dividends, whether payable in cash, property or stock, in excess of the
dividends actually declared by the Board of Directors.
Except as expressly otherwise limited herein, and to the extent
permitted by applicable law, the Board of Directors: (i) may declare and the
Corporation may pay or set apart for payment dividends on any Junior Stock or
Parity Stock, (ii) may make any payment on account of or set apart payment for a
sinking fund or other similar fund or agreement for the purchase or other
acquisition, redemption, retirement or other requirement of, or with respect to,
any Junior Stock or Parity Stock or any warrants, rights, calls or options
exercisable or exchangeable for or convertible into any Junior Stock or Parity
Stock, (iii) may make any distribution with respect to any Junior Stock or
Parity Stock or any warrants, rights, calls or options exercisable or
exchangeable for or convertible into any Junior Stock or Parity Stock, whether
directly or indirectly, and whether in cash, obligations or securities of the
Corporation or other property and (iv) may purchase or otherwise acquire, redeem
or retire any Junior Stock or Parity Stock or any warrants, rights, calls or
options exercisable or exchangeable for or convertible into any Junior Stock or
Parity Stock; and the holders of the Series C-II Preferred Stock shall not be
entitled to share or participate therein.
5. PREFERENCE ON LIQUIDATION. In the event of any liquidation, dissolution
or winding up of the Corporation, voluntary or involuntary, after payment or
provision for payment of any debts and other liabilities of the Corporation as
required by law, the holders of the Series C-II Preferred Stock shall be
entitled to receive $9.00 per share out of the assets of the Corporation
available for distribution to stockholders, before any distribution of assets is
made to the holders of any stock ranking junior to the Series C-II Preferred
Stock in the distribution of assets. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation legally available for distribution to stockholders shall be
insufficient to permit payment in full of the amounts required to be paid to the
holders of the Series C-II Preferred Stock together with the holders of any
stock ranking on a parity with the Series C-II Preferred Stock in the
distribution of assets, then a pro rata portion of the full amount required to
be paid upon such liquidation, dissolution or winding up shall be paid to the
holders of the Series C-II Preferred Stock together with any stock ranking on a
parity with the Series C-II Preferred Stock in the distribution of assets. Such
pro rata portion shall be calculated based on the ratio that
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the total amount available for distribution to such holders bears to the total
distribution required to be made on the Series C-II Preferred Stock together
with any stock ranking on a parity with the Series C-II Preferred Stock in the
distribution of assets. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of the Series C-II
Preferred Stock will not be entitled to any further participation in any
distribution of assets of the Corporation.
Neither the merger nor consolidation of the Corporation into or
with any other entity or entities, nor the merger or consolidation of any other
entity or entities into or with the Corporation, nor a sale, transfer, lease or
exchange (for cash, securities or other consideration) of all or any part of the
assets of the Corporation shall be deemed to be a liquidation, dissolution or
winding up of the Corporation within the meaning of this Section 5, unless such
sale, transfer, lease or exchange shall be in connection with and intended to be
a plan of complete liquidation, dissolution or winding up of the Corporation.
Written notice of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, stating a payment date and the
place where the distribution amounts shall be payable, shall be given by mail,
postage prepaid, at least 30 days but not more than 60 days prior to the payment
date stated therein, to the holders of record of the Series C-II Preferred Stock
at their respective addresses as the same shall appear on the books of the
Corporation.
6. OPTIONAL REDEMPTION. The Series C-II Preferred Stock is redeemable at
the option of the Corporation for cash, in whole or in part, at any time and
from time to time upon payment in cash with respect to each share redeemed at
$9.00 per share plus any dividends that have been declared but are unpaid as of
the date of redemption to the extent that the Corporation has funds legally
available therefor.
Subject to any limitations provided herein and to the extent
permitted by law, the Corporation may, at its option, redeem the Series C-II
Preferred Stock at any time without regard to whether or not shares of any other
series of Preferred Stock are also being redeemed. If less than all of the
outstanding shares of Series C-II Preferred Stock shall be redeemed, the
particular shares to be redeemed shall be allocated among the respective holders
of the Series C-II Preferred Stock, pro rata or by lot, as the Board of
Directors may determine. The Corporation may, in its sole discretion, also
determine to redeem other series of Preferred Stock without redeeming any shares
of the Series C-II Preferred Stock.
Notice of any redemption specifying the date fixed for said
redemption and the place where the amount to be paid upon redemption is payable
shall be mailed, postage prepaid, at least 30 days but not more than 60 days
prior to said redemption date, to the holders of record of the Series C-II
Preferred Stock to be redeemed at their respective addresses as the same shall
appear on the books of the Corporation. If such notice of redemption shall have
been so mailed, unless default shall be made by the Corporation in providing for
the payment of the redemption price, and if on or before the redemption date
specified in such notice all funds necessary for such redemption shall have been
set aside by the Corporation separate and apart from its other funds, in trust
for the account of the holders of the shares so to be redeemed, so as to be and
continue to be available therefor, then, on and after said redemption date,
notwithstanding that any certificate for shares of the Series C-II Preferred
Stock so called for redemption shall not have been surrendered for cancellation,
the shares represented thereby so called for redemption shall be deemed to be no
longer outstanding, the right to receive dividends thereon shall cease, and all
rights with respect to such shares of the Series C-II Preferred Stock so called
for redemption shall forthwith cease and terminate, except only the right of the
holders thereof to receive out of the funds so set aside in trust the amount
payable on redemption thereof, including any dividends that have been declared
but are unpaid as of the date of redemption.
Shares of Series C-II Preferred Stock redeemed or otherwise
purchased or acquired by the Corporation shall not be reissued as shares of
Series C-II Preferred Stock, but shall assume the status of authorized but
unissued shares of Preferred Stock of the Corporation, without designation as to
series until such shares are once more designated as part of a particular series
by the Board of Directors.
7. VOTING RIGHTS. Except as required by applicable law, the
holders of the Series C-II Preferred Stock will not be entitled to vote for any
purpose.
8. SINKING FUND. No sinking fund shall be provided for the
purchase or redemption of shares of the Series C-II Preferred Stock.
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9. CONVERTIBILITY. Shares of the Series C-II Preferred Stock
(hereinafter in this section 9 called the "Shares") shall be convertible into
the Corporation's Class A Common Stock on the following terms and conditions:
(a) CONVERSION. Subject to and upon compliance with the provisions
of this section 9, the holder of any Shares may at such holder's option, convert
any such Shares into such number of fully paid and non-assessable shares of the
Class A Common Stock as are issuable pursuant to the formula set forth in
subsections 9(b), (c) and (d) of this section 9 by surrendering any Shares for
conversion to the Corporation at its principal office and by furnishing written
notice to the Corporation at said office that such holder elects to convert in
accordance with the provisions hereof. Such notice also shall state the name or
names (with addresses) in which the certificate or certificates for Class A
Common Stock which shall be issuable on such conversion shall be issued. Every
such notice of election to convert shall constitute a contract between the
holder and the Corporation, whereby such holder shall be deemed to subscribe for
the number of shares of Class A Common Stock which such holder will be entitled
to receive upon such conversion and, in payment and satisfaction of such
subscription, to surrender such Shares and to release the Corporation from all
obligations thereon, and whereby the Corporation shall be deemed to agree that
the surrender of such Shares and the extinguishment of its obligations thereon
shall constitute full payment for the Class A Common Stock so subscribed for and
to be issued upon such conversion.
As soon as practicable after the receipt of such notice and
Shares, the Corporation shall issue and shall deliver to the holder for whose
account such Shares were so surrendered, or on such holder's written order, a
certificate or certificates for the number of full shares of Class A Common
Stock issuable upon the conversion of such Shares and a check or cash for the
payment (if any) to which such person is entitled pursuant to subsection 9(d)
hereof, together with a certificate or certificates representing the Shares, if
any, which are not to be converted, but which constituted part of the Shares
represented by the certificate or certificates surrendered by such holder. Such
conversion shall be deemed to have been effected on the date on which the
Corporation shall have received such notice and such Shares, and the person or
persons in whose name or names any certificate or certificates for Class A
Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the holder or holders of record of the shares represented
thereby.
(b) BASIC CONVERSION RATE. The rate at which the holder of any
Shares may convert such Shares into Class A Common Stock (the "Conversion Rate")
shall be 1.3225 shares of Class A Common Stock for each Share which is
surrendered for conversion, subject to adjustment as provided in subsection 9(c)
hereinbelow.
(c) CONVERSION RATE ADJUSTMENT. The Conversion Rate shall be
subject to adjustment from time to time as follows:
(1) If the Corporation shall (i) pay a stock dividend in
and on shares of its Class A Common Stock, (ii) subdivide its outstanding shares
of Class A Common Stock into a greater number of shares, (iii) combine its
outstanding shares of Class A Common Stock into a smaller number of shares, or
(iv) issue by reclassification of its shares of Class A Common Stock any shares
of its capital stock, then the Conversion Rate in effect immediately prior
thereto shall be adjusted so that the holder of any Shares surrendered for
conversion after the record date fixing stockholders to be affected by such
event shall be entitled to receive upon conversion the number of such shares of
Class A Common Stock which such holder would have been entitled to receive after
the happening of such event had such Shares been converted immediately prior to
such record date. Such adjustment, if applicable, shall be made whenever any of
such events shall happen, and shall also be effective retroactively as to the
Shares converted between such record date and the date of the happening of any
such event.
(2) In the event of any consolidation of the Corporation
with or merger of the Corporation into another corporation, or in the event of
any sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation to another corporation, or in the case of any
reorganization of the Corporation, the Corporation or the surviving entity shall
have the right to require that if the holder of such Shares shall thereafter
convert such Shares such conversion shall be into the kind and amount of shares
of stock and other securities and property, including cash, which would have
been deliverable to such holder upon such consolidation, merger, sale,
conveyance, exchange, transfer or reorganization if such holder had converted
such holder's Shares into Class A Common Stock immediately prior to such
consolidation, merger, sale, conveyance, exchange, transfer or reorganization.
In any such event, effective provision shall be made in the instrument effecting
or providing for such consolidation, merger, sale, conveyance, exchange,
transfer or reorganization so that the provisions set forth herein for the
conversion rights of the holder of Shares shall thereafter be applicable, as
nearly as may be practicable, in relation to any shares of stock or other
securities or property, including cash, deliverable after such consolidation,
merger, sale, conveyance,
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exchange, transfer or reorganization upon the conversion. The provisions of this
subsection 9(c)(2) shall similarly apply to successive consolidations, mergers,
sales, conveyances, exchanges, transfers and reorganizations.
The Corporation shall provide written notice of any action
contemplated pursuant to this subsection 9(c)(2) at least 10 days prior to the
record date of such action, to the holders of record of the Series C-II
Preferred Stock to their respective addresses as the same shall appear on the
books of the Corporation. The Corporation shall also provide the holders of
record of the Series C-II Preferred Stock with written notice at least 10 days
prior to the record date set for the consideration of any other extraordinary
business matters (provided, however, that any routine business matters
including, but not limited to, the setting of record dates for (i) the
declaration of regular dividends and (ii) annual stockholders' meetings that do
not require the filing of a preliminary proxy statement with the Securities and
Exchange Commission or its successor shall be excluded from such notice
provisions).
(3) No adjustment in the Conversion Rate shall be required
unless such adjustment would require an increase or decrease of at least 2% in
such Conversion Rate; provided, however, that any adjustments which by reason of
this subsection 9(c)(3) are not required to be made, and are not made, shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this subsection 9(c)(3) shall be made to the nearest cent or
one-hundredth of a share, as the case may be.
(d) FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the conversion of any Shares. If more
than one Share shall be surrendered for conversion at one time by the same
holder, the number of full shares issuable upon conversion thereof shall be
computed on the basis of the aggregate face amount of such Shares so
surrendered. If the conversion of any Shares results in a fraction, an amount
equal to such fraction multiplied by the Conversion Rate, subject to adjustment
as provided in subsection (c) hereof, shall be paid to such holder in cash by
the Corporation.
(f) TAX. The Corporation shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of stock in the name other than that of the holder of the Shares
converted, and the Corporation shall not be required to issue or deliver any
such stock certificates unless and until the person or persons requesting the
issuance thereof shall have paid to the Corporation the amount of any such tax
or shall have established to the satisfaction of the Corporation that such tax
has been paid.
(g) RESERVATION OF SHARES. The Corporation shall at all times
reserve and keep available out of its authorized Class A Common Stock the full
number of shares of Class A Common Stock deliverable upon the conversion of all
outstanding Shares and shall take all such corporate action as may be required
from time to time in order that it may validly and legally issue fully paid and
non-assessable shares of Class A Common Stock upon conversion of the Shares.
11. NO OTHER RIGHTS. The shares of Series C-II Preferred Stock
shall not have any preferences, voting powers or relative, participating,
optional or other special rights except as set forth above and in the Articles
of Incorporation or as otherwise required by law.
12. AMENDMENTS. The Board of Directors reserves the right to amend
these resolutions in accordance with applicable law.
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APPENDIX F
STATEMENT OF DESIGNATION
OF
8% NONCUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1993
OF
BANKUNITED FINANCIAL CORPORATION
BankUnited Financial Corporation (the "Corporation"), a corporation
organized and existing under the Florida Business Corporation Act, in accordance
with the provisions of Section 607.0602 thereof and Article VI the Corporation's
Articles of Incorporation, DOES HEREBY CERTIFY:
That pursuant to authority conferred upon the Board of Directors by the
Articles of Incorporation of the Corporation, said Board of Directors acting at
a meeting thereof adopted resolutions providing for the issuance of 1,610,000
shares of the Corporation's Preferred Stock, $.01 par value, designated "8%
Noncumulative Convertible Preferred Stock, Series 1993," which resolutions are
as follows:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation by the Articles of Incorporation, the Board of
Directors does hereby provide for and authorize the issuance of 1,610,000
shares of the Preferred Stock, $.01 par value, of the Corporation, of the
presently authorized but unissued shares of Preferred Stock (the "Preferred
Stock") to be designated "8% Noncumulative Convertible Preferred Stock,
Series 1993" (the "Series 1993 Preferred Stock"). The voting powers,
designations, preferences, and relative, participating, optional or other
special rights of the Series 1993 Preferred Stock authorized hereunder and
the qualifications, limitations and restrictions of such preferences and
rights are as follows:
1. DIVIDENDS.
(a) The holders of the Series 1993 Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of
Directors out of funds of the Corporation legally available for
payment, noncumulative cash dividends, payable quarterly in
arrears, at the rate of $.80 per share per annum. Dividends, when
declared on the Series 1993 Preferred Stock, shall have accrued
from the date of issuance or thereafter, from the most recent date
on which dividends were payable and be payable quarterly on March
31, June 30, September 30 and December 31 of each year (each a
"Dividend Payment Date"), commencing on September 30, 1993;
PROVIDED, HOWEVER, that if any such day is a non-business day, the
Dividend Payment Date will be the next business day. Each declared
dividend shall be payable to holders of record as they appear at
the close of business on the stock books of the Corporation on
such record dates, not more than 30 calendar days and not less
than 10 calendar days preceding the Dividend Payment Date
therefor, as determined by the Board of Directors (each of such
dates a "Record Date"). Quarterly dividend periods (each a
"Dividend Period") shall commence on and include the first day of
January, April, July and October of each year and shall end on and
include the day next preceding the next following Dividend Payment
Date.
(b) No full dividends shall be declared or paid or set
apart for payment on any series of Preferred Stock or other
capital stock of any series ranking, as to dividends or
liquidation preference, on a parity ("Parity Stock") with the
Series 1993 Preferred Stock during any calendar quarter unless
full dividends on the Series 1993 Preferred Stock for the Dividend
Period ending during such calendar quarter have been or contempo
raneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for such payment. When
dividends are not so paid in full (or a sum sufficient for such
full payment is not so set apart) upon the Series 1993 Preferred
Stock and any other Parity Stock, dividends upon the Series 1993
Preferred Stock and dividends on such other Parity Stock payable
during such calendar quarter shall be declared pro rata so that
the amount of such dividends so payable per share on the Series
1993 Preferred Stock and such other Parity Stock shall in all
cases bear to each other the same ratio that full dividends for
the then-current calendar quarter on the shares of Series 1993
Preferred Stock (which shall not include any accumulation in
respect of unpaid dividends for prior Dividend Periods) and full
dividends, including required or permitted accumulations,
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<PAGE>
if any, on shares of such other Parity Stock, bear to each other.
If full dividends on the Series 1993 Preferred Stock have not been
declared and paid or set apart for payment for the Dividend
Payment Date falling in the then-current Dividend Period, then,
with respect to such then-current Dividend Period, the following
restrictions shall be applicable: (i) no dividend or distribution,
other than in shares of capital stock ranking junior to the Series
1993 Preferred Stock as to dividends or liquidation preference
("Junior Stock"), may be declared, set aside or paid on any shares
of Junior Stock, (ii) the Corporation may not repurchase, redeem
or otherwise acquire any shares of its Junior Stock (except by
conversion into or exchange for Junior Stock) and (iii) the
Corporation may not, directly or indirectly, repurchase, redeem or
otherwise acquire (except by conversion into or exchange for
Junior Stock) any shares of any class or series of Junior Stock or
warrants, calls, options or other rights to acquire capital stock
of the Corporation or other security exercisable or exchangeable
into capital stock of the Corporation, otherwise than pursuant to
pro rata offers to purchase or a concurrent redemption of all, or
a pro rata portion, of the outstanding shares of Series 1993
Preferred Stock. Holders of the Series 1993 Preferred Stock shall
not be entitled to any dividends, whether payable in cash,
property or stock, in excess of declared noncumulative dividends,
as herein provided, on the Series 1993 Preferred Stock. No
interest or sum of money in lieu of interest shall be payable in
respect of any declared dividend payment or payments on the Series
1993 Preferred Stock which may be in arrears. As used herein, the
phrase "set apart" in respect of the payment of dividends shall
require deposit of any funds in a bank or trust company in a
separate deposit account maintained for the benefit of the holders
of the Series 1993 Preferred Stock.
2. REDEMPTION.
(a) The shares of Series 1993 Preferred Stock shall be
redeemable by the Corporation, in whole or in part, at any time
and from time to time from and after July 1, 1998. The shares of
Series 1993 Preferred Stock shall be redeemable by the
Corporation, in whole, or in part, at any time and from time to
time prior to July 1, 1998 only if the Corporation's Series I
Class A Common Stock, $.01 par value (the "Class A Common Stock"),
shall have a closing bid price which is at least 140% of the
Conversion Price (as defined below) for any 20 consecutive trading
days ending within five trading days of the giving of notice of
redemption as provided for below. The Series 1993 Preferred Stock
shall be redeemable by the Corporation at a price of $10.00 per
share until June 30, 1998 and thereafter at the following per
share prices during the twelve month period beginning July 1:
YEAR REDEMPTION PRICE
---- ----------------
1998..................... $10.40
1999..................... 10.32
2000..................... 10.24
2001..................... 10.16
2002..................... 10.08
2003 and thereafter...... 10.00
plus, in each case, an amount equal to all accrued but unpaid
dividends (whether or not declared) for the then-current Dividend
Period immediately preceding the date fixed for redemption (the
"Redemption Date"). For purposes of this Section 2, the Conversion
Price shall not give effect to adjustment for missed dividend
payments pursuant to Section 3(d)(v) hereof.
(b) The Series 1993 Preferred Stock shall be redeemable by
the Corporation, in accordance with applicable law, in whole or in
part, upon not less than 30 nor more than 60 calendar days' prior
written notice by mail.
(c) In the event that fewer than all the outstanding
shares of the Series 1993 Preferred Stock are to be redeemed as
permitted by this Section (2), the number of shares to be redeemed
shall be determined by the Board of Directors and the shares to be
redeemed shall be determined by lot or PRO RATA as may be
determined by the Board of Directors or by such other method as
may be approved by the Board of Directors that is required to
conform to any rule or regulation of any stock exchange or
automated quotation system upon which the shares of the Series
1993 Preferred Stock may at the time be listed.
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<PAGE>
(d) Notice of redemption of the Series 1993 Preferred
Stock, specifying the Redemption Date and place of redemption,
shall be given by first class mail to each holder of record of the
shares to be redeemed, at his or her address of record, not less
than 30 nor more than 60 calendar days prior to the Redemption
Date. In the event of a redemption prior to July 1, 1998, such
notice shall be given not more than five business days following
the expiration of the 20 consecutive trading day period specified
in Section 2(a). Each such notice shall also specify the
redemption price applicable to the shares to be redeemed. If less
than all the shares owned by such holder are then to be redeemed,
the notice shall also specify the number of shares thereof which
are to be redeemed and the fact that a new certificate or
certificates representing any unredeemed shares shall be issued
without cost to such holder.
(e) Notice of redemption of shares of the Series 1993
Preferred Stock having been given as provided in Section 2(d),
then unless the Corporation shall have defaulted in providing for
the payment of the redemption price and all accrued and unpaid
dividends (whether or not declared) for the then-current Dividend
Period immediately preceding the Redemption Date, all rights of
the holders thereof (except the right to receive the redemption
price and all accrued and unpaid dividends, whether or not
declared, for the then-current Dividend Period immediately
preceding the Redemption Date) shall cease with respect to such
shares and such shares shall not, after the Redemption Date, be
deemed to be outstanding and shall not have the status of
Preferred Stock. In case fewer than all the shares represented by
any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the
holder thereof.
(f) Any shares of Series 1993 Preferred Stock which shall
at any time have been redeemed or converted shall, after such
redemption or conversion, have the status of authorized but
unissued shares of Preferred Stock, without designation as to
series until such shares are once more designated as part of a
particular series by the Board of Directors.
(g) Shares of the Series 1993 Preferred Stock are not
subject or entitled to the benefit of a sinking fund.
(h) Notwithstanding the foregoing, if notice of redemption
shall have been given pursuant to this Section 2 and any holder of
the Series 1993 Preferred Stock shall, prior to the close of
business on the date three business days next preceding the
Redemption Date, give written notice to the Corporation pursuant
to Section 3 hereof of the conversion of any or all of the shares
held by the holder (accompanied by a certificate or certificates
for such shares, duly endorsed or assigned to the Corporation),
then the redemption shall not become effective as to such shares
and the conversion shall become effective as provided in Section 3
below."
3. CONVERSION.
(a) Subject to and upon compliance with the provisions of
this Section 3, the holder of any shares of the Series 1993
Preferred Stock shall have the right, at his or her option, at any
time, to convert the shares into a number of fully paid and
nonassessable shares (calculated as to each conversion to the
nearest 1/100th of a share) of the Corporation's Series I Class A
Common Stock, $.01 par value (the "Class A Common Stock"), equal
to $10.00 for each share surrendered for conversion divided by the
Conversion Price (as defined in Section 3(d) below); PROVIDED,
HOWEVER, that if the Corporation shall have called the Series 1993
Preferred Stock for redemption, such right shall terminate on the
close of business on the third business day preceding the
Redemption Date unless the Corporation has defaulted in making the
payment due on the Redemption Date.
(b) (i) In order to exercise the conversion privilege, the
holder of each share of the Series 1993 Preferred Stock to
be converted shall surrender the certificate representing
such share to the Corporation's transfer agent for the
Series 1993 Preferred Stock with the Notice of Election to
Convert on the back of said certificate duly completed and
signed. Unless the shares issuable on conversion are to be
issued in the same name as the name in which the shares of
the Series 1993 Preferred Stock are registered, each share
surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or his or her
duly authorized attorney and by funds in an amount
sufficient to pay any transfer or
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<PAGE>
similar tax. The holders of shares of the Series 1993
Preferred Stock at the close of business on a Record Date
shall be entitled to receive any dividend declared payable
on those shares for the corresponding Dividend Period on
the applicable Dividend Payment Date, notwithstanding the
conversion of the shares after the Record Date.
(ii) As promptly as practicable after the
surrender by a holder of the certificates for shares of
the Series 1993 Preferred Stock in accordance with Section
3, the Corporation shall issue and shall deliver at the
office of the transfer agent to the holder, or on his or
her written order, a certificate or certificates for the
number of full shares of Class A Common Stock issuable
upon the conversion of those shares in accordance with the
provisions of this Section 2, and any fractional interest
in respect of a share of Class A Common Stock arising upon
the conversion shall be settled as provided in Section
3(c) below.
(iii) Each conversion shall be deemed to have
been effected immediately prior to the close of business
on the date on which all of the conditions specified in
Section 3(b) hereof shall have been satisfied, and, the
person or persons in whose name or names any certificate
or certificates for shares of Class A Common Stock shall
be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the shares of
Class A Common Stock represented by those certificates at
such time on such date and such conversion shall be at the
Conversion Price in effect at such time on such date,
unless the stock transfer books of the Corporation shall
be closed on that date, in which event such person or
persons shall be deemed to have become such holder or
holders of record at the close of business on the next
succeeding day on which such stock transfer books are
open, but such conversion shall be at the Conversion Price
in effect on the date upon which all of the conditions
specified in Section 3(b) hereof shall have been
satisfied. All shares of Class A Common Stock delivered
upon conversion of the Series 1993 Preferred Stock will
upon delivery be duly and validly issued and fully paid
and nonassessable, free of all liens and charges and not
subject to any preemptive rights. Upon the surrender of
certificates representing shares of the Series 1993
Preferred Stock to be converted, the shares shall no
longer be deemed to be outstanding and all rights of a
holder with respect to the shares surrendered for
conversion shall immediately terminate except the right to
receive the Class A Common Stock or other securities, cash
or other assets as herein provided.
(c) No fractional shares or securities representing
fractional shares of Class A Common Stock shall be issued upon
conversion of the Series 1993 Preferred Stock. Any fractional
interest in a share of Class A Common Stock resulting from
conversion of a share of the Series 1993 Preferred Stock shall be
paid in cash (computed to the nearest cent) based on the Current
Market Price (as defined in Section 3(d)(iv) below) of the Class A
Common Stock on the Trading Day (as defined in Section 3(d)(iv)
below) next preceding the day of conversion. If more than one
share shall be surrendered for conversion at one time by the same
holder, the number of whole shares of Class A Common Stock
issuable upon the conversion shall be computed on the basis of the
aggregate Liquidation Preference (as such term is defined in
Section 6 below) of the shares of the Series 1993 Preferred Stock
so surrendered.
(d) The "Conversion Price" per share of the Series 1993
Preferred Stock shall be $10.00, subject to adjustment from time
to time as follows:
<PAGE>
(i) In case the Corporation shall (1) pay a
dividend or make a distribution on its Class A Common
Stock in shares of its Class A Common Stock, (2) subdivide
its outstanding Class A Common Stock into a greater number
of shares, or (3) combine its outstanding Class A Common
Stock into a smaller number of shares, the Conversion
Price in effect immediately prior to such event shall be
proportionately adjusted so that the holder of any share
of the Series 1993 Preferred Stock thereafter surrendered
for conversion shall be entitled to receive the number and
kind of shares of Class A Common Stock of the Corporation
which he would have been entitled to receive had the share
been converted immediately prior to the happening of such
event. An adjustment made pursuant to this Section 3(d)(i)
shall become effective immediately after the Record Date
in the case of a dividend or distribution except as
provided in Section 3(d)(viii)
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<PAGE>
below, and shall become effective immediately after the
effective date in the case of a subdivision or
combination. If any dividend or distribution is not paid
or made, the Conversion Price then in effect shall be
appropriately readjusted.
(ii) In case the Corporation shall issue rights
or warrants to all holders of its Class A Common Stock
entitling them (for a period expiring within 45 days after
the record date mentioned below) to subscribe for or
purchase Class A Common Stock at a price per share less
than the Current Market Price (as defined in Section
3(d)(iv) below) of the Class A Common Stock at the record
date for the determination of stockholders entitled to
receive the rights or warrants, the Conversion Price in
effect immediately prior to the issuance of such rights or
warrants shall be adjusted so that it shall equal the
price determined by multiplying the Conversion Price in
effect immediately prior to the date of issuance of the
rights or warrants by a fraction of which the numerator
shall be the number of shares of Class A Common Stock
outstanding on the date of the issuance of the rights or
warrants plus the number of shares of Class A Common Stock
which the aggregate offering price of the total number of
shares of Class A Common Stock so offered for subscription
or purchase would purchase at the Current Market Price at
that record date, and of which the denominator shall be
the number of shares of Class A Common Stock outstanding
on the date of issuance of the rights or warrants plus the
number of additional shares of Class A Common Stock for
subscription or purchase. The adjustment provided for in
this Section 3(d)(ii) shall be made successively whenever
any such rights or warrants are issued, and shall become
effective immediately, except as provided in Section
3(d)(viii) below after such record date. In determining
whether any rights or warrants entitle the holder of the
Class A Common Stock to subscribe for or purchase shares
of Class A Common Stock at less than the Current Market
Price, and in determining the aggregate offering price of
the shares of Class A Common Stock so offered, there shall
be taken into account any consideration received by the
Corporation for such rights or warrants, the value of such
consideration, if other than cash, to be determined by the
Board (whose determination, if made in good faith, shall
be conclusive). If any or all of such rights or warrants
are not so issued or expire or terminate without having
been exercised, the Conversion Price then in effect shall
be appropriately readjusted.
(iii) In case the Corporation shall distribute to
all holders of its Class A Common Stock any shares of
capital stock of the Corporation (other than Class A
Common Stock) or evidences of indebtedness or assets
(excluding cash dividends or distributions paid from
retained earnings of the Corporation) or rights or
warrants to subscribe for or purchase any of its
securities (excluding those referred to in Section
3(d)(ii) above), then, in each such case, the Conversion
Price shall be adjusted so that it shall equal the price
determined by multiplying the Conversion Price in effect
immediately prior to the date of the distribution by a
fraction, the numerator of which shall be the Current
Market Price of the Class A Common Stock on the record
date mentioned below less the then fair market value (as
determined by the Board, whose determination, if made in
good faith, shall be conclusive) of that portion of the
capital stock or assets or evidences of indebtedness so
distributed, or of the rights or warrants so distributed,
applicable to one share of Class A Common Stock, and the
denominator of which shall be the Current Market Price of
the Class A Common Stock on the record date. Such
adjustment shall become effective immediately, except as
provided in Section 3(d)(viii) below, after the record
date for the determination of stockholders entitled to
receive such distribution. If any such distribution is not
made or if any or all of such rights or warrants expire or
terminate without having been exercised, the Conversion
Price then in effect shall be appropriately readjusted.
Notwithstanding the foregoing, in the event that the
Corporation shall distribute rights or warrants (other
than those referred to in Section 3(d)(ii) above)
("Rights") pro rata to holders of Class A Common Stock,
the Corporation may, in lieu of making any adjustment
pursuant to this Section 3(d)(iii), make proper provision
so that each holder of the Series 1993 Preferred Stock who
converts such Series 1993 Preferred Stock (or any portion
thereof) after the record date for such distribution and
prior to the expiration or redemption of the Rights shall
be entitled to receive upon such conversion, in addition
to the shares of Class A Common Stock issuable upon such
conversion (the "Conversion Shares"), a number of Rights
to be determined as follows: (1) if such conversion
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<PAGE>
occurs on or prior to the date for the distribution to the
holders of Rights of separate certificates evidencing such
Rights (the "Distribution Date"), the same number of
Rights to which a holder of a number of shares of Class A
Common Stock equal to the number of Conversion Shares is
entitled at the time of such conversion in accordance with
the terms and provisions of and applicable to the Rights;
and (2) if such conversion occurs after the Distribution
Date, the same number of shares of Class A Common Stock
into which the number of shares of this Series 1993
Preferred Stock so converted was convertible immediately
prior to the Distribution Date would have been entitled on
the Distribution Date in accordance with the terms and
provisions of and applicable to the Rights.
(iv) For the purpose of any computation under
this Section 3, the "Current Market Price" of the Class A
Common Stock at any date shall be the average of the last
reported sale prices per share for the ten consecutive
Trading Days (as defined below) preceding the date of such
computation. The last reported sale price for each day
shall be (1) the last reported sale price of the Class A
Common Stock on the Nasdaq National Market, or any similar
system of automated dissemination of quotations of
securities prices then in common use, if so quoted, or (2)
if not quoted as described in clause (1), the mean between
the high bid and low asked quotations for the Class A
Common Stock as reported by the National Quotation Bureau
Incorporated if at least two securities dealers have
inserted both bid and asked quotations for the Class A
Common Stock on at least five of the ten preceding days,
or (3) if the Class A Common Stock is listed or admitted
for trading on any national securities exchange, the last
sale price, or the closing bid price if no sale occurred,
of the Class A Common Stock on the principal securities
exchange on which the Class A Common Stock is listed. If
the Class A Common Stock is quoted on a national
securities or central market system, in lieu of a market
or quotation system described above, the last reported
sale price shall be determined in the manner set forth in
clause (2) of the preceding sentence if bid and asked
quotations are reported but actual transactions are not,
and in the manner set forth in clause (3) of the preceding
sentence if actual transactions are reported. If none of
the conditions set forth above is met, he last reported
sale price of the Class A Common Stock on any day or the
average of such last reported sale prices for any period
shall be the fair market value of such class of stock as
determined by a member firm of the New York Stock
Exchange, Inc. selected by the Corporation. As used
herein, the term "Trading Days" means (1) if the Class A
Common Stock is quoted on the Nasdaq National Market or
any similar system of automated dissemination of
quotations of securities prices, days on which trades may
be made on such system, or (2) if not quoted as described
in clause (1), days on which quotations are reported by
the National Quotation Bureau Incorporated, or (3) if the
Class A Common Stock is listed or admitted for trading on
any national securities exchange, days on which such
national securities exchange is open for business.
(v) In the event that the Corporation shall fail
to declare and pay a dividend on the Series 1993 Preferred
Stock for more than three Dividend Periods (a "Dividend
Default") in any five-year period, then the Conversion
Price shall be reduced by an amount equal to 75% of the
first three missed dividend payments and 100% of any
dividend which is not declared and paid for any subsequent
Dividend Period. Notwithstanding the foregoing, if at any
time subsequent to an adjustment in the Conversion Price
pursuant to this Section 3(d)(v), the Corporation declares
and pays dividends on the Series 1993 Preferred Stock for
each Dividend Period in the five-year period commencing on
the date of the adjustment, then no further adjustment in
the Conversion Price pursuant to this Section 3(d)(v)
shall be made until a new Dividend Default shall have
occurred.
<PAGE>
(vi) No adjustment in the Conversion Price shall
be required unless such adjustment would require a change
of at least one percent in the Conversion Price; PROVIDED,
HOWEVER, that any adjustments which by reason of this
Section 3(d)(vi) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment; and PROVIDED, FURTHER, that adjustment shall
be required and made in accordance with the provisions of
this Section 3(d) (other than this Section 3(d)(vi)) not
later than three years of the date of the event requiring
the
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<PAGE>
adjustment. All calculations under this Section 3(d) shall
be made to the nearest cent or the nearest one hundredth
of a share, as the case may be. Notwithstanding anything
in this Section 3(d) to the contrary, the Corporation
shall be entitled to make such reductions in the
Conversion Price, in addition to those required by this
Section 3(d), as it, in its discretion, shall determine to
be advisable in order that any stock dividend, subdivision
or combination of shares, distribution of capital stock or
rights or warrants to purchase stock or securities, or
distribution of evidence of indebtedness or assets (other
than cash dividends or distributions paid from retained
earnings) hereinafter made by the Corporation to its
stockholders shall be a tax free distribution for federal
income tax purposes.
(vii) Whenever the Conversion Price is adjusted,
as herein provided, the Corporation shall promptly file
with its transfer agent an officers' certificate setting
forth the Conversion Price after the adjustment and
setting forth a brief statement of the facts requiring the
adjustment, which certificate shall be conclusive evidence
of the correctness of the adjustment. Promptly after
delivery of the certificate, the Corporation shall prepare
a notice of the adjustment of the Conversion Price setting
forth the adjusted Conversion Price and the date on which
the adjustment becomes effective and shall mail the notice
of such adjustment of the Conversion Price to the holders
of the Series 1993 Preferred Stock at their addresses as
shown on the stock books of the Corporation.
(viii) In any case in which this Section 3(d)
provides that an adjustment shall become effective
immediately after a record date for an event, the
Corporation may defer until the occurrence of the event
(1) issuing to the holder of any share of the Series 1993
Preferred Stock converted after the record date and before
the occurrence of the event, the additional shares of
Class A Common Stock issuable upon the conversion by
reason of the adjustment required by the event over and
above the Class A Common Stock issuable upon such
conversion before giving effect to the adjustment and (2)
paying to the holder any amount in cash in lieu of any
fractional share pursuant to Section 3(c) above.
(e) If:
(i) the Corporation shall authorize the granting
to the holders of the Class A Common Stock or rights or
warrants to subscribe for or purchase any shares of any
class or any other rights or warrants; or
(ii) there shall be any reclassification of the
Class A Common Stock (other than a subdivision or
combination of the outstanding Class A Common Stock and
other than a change in the par value, or from par value to
no par value, or from no par value to par value), or any
consolidation, merger, or statutory share exchange to
which the Corporation is a party, and for which approval
of any stockholders of the Corporation is required, or any
sale or transfer of all or substantially all the assets of
the Corporation; or
(iii) there shall be a voluntary or an
involuntary dissolution, liquidation or winding up of the
Corporation;
then the Corporation shall cause to be filed with the
transfer agent, and shall cause to be mailed to the
holders of shares of the Series 1993 Preferred Stock at
their addresses as shown on the stock books of the
Corporation, at least 15 days prior to the applicable date
hereinafter specified, a notice stating (1) the date on
which a record is to be taken for the purpose of the
dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the
holders of Class A Common Stock of record to be entitled
to the dividend, distribution or rights or warrants are to
be determined or (2) the date on which the
reclassification, consolidation, merger, statutory share
exchange, sale, transfer, dissolution, liquidation or
winding up is expected to become effective, and the date
as of which it is expected that holders of Class A Common
Stock of record shall be entitled to exchange their shares
of Class A Common Stock for securities or other property
deliverable upon the
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<PAGE>
reclassification, consolidation, merger, statutory share
exchange, sale, transfer, dissolution, liquidation or
winding up. Failure to give any such notice or any defect
in the notice shall not affect the legality or validity of
the proceedings described in this Section 3(e).
(f) (i) The Corporation covenants that it will at all
times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but
unissued shares of Class A Common Stock or its issued
shares of Class A Common Stock held by its treasury, or
both, for the purpose of effective conversions of the
Series 1993 Preferred Stock the full number of shares of
Class A Common Stock deliverable upon the conversion of
all outstanding shares of the Series 1993 Preferred Stock
not theretofore converted. For purposes of this Section
3(f), the number of shares of Class A Common Stock which
shall be deliverable upon the conversion of all
outstanding shares of the Series 1993 Preferred Stock
shall be computed as if at the time of computation all the
outstanding shares were held by a single holder.
(ii) Before taking any action which would cause
an adjustment reducing the Conversion Price below the then
par value (if any) of the shares of Class A Common Stock
deliverable upon conversion of the Series 1993 Preferred
Stock, the Corporation will take any corporate action
which may, in the opinion of its counsel, be necessary in
order that the Corporation may validly and legally issue
fully paid and nonassessable shares of Class A Common
Stock at the adjusted Conversion Price.
(iii) The Corporation will endeavor to list the
shares of Class A Common Stock or other securities
required to be delivered upon conversion of the Series
1993 Preferred Stock, prior to the delivery, upon each
national securities exchange or the Nasdaq National
Market, if any, upon which the outstanding Class A Common
Stock or other securities are listed at the time of
delivery.
(iv) Prior to the delivery of any Class A Common
Stock or other securities which the Corporation shall be
obligated to deliver upon conversion of the Series 1993
Preferred Stock, the Corporation will endeavor, in good
faith and as expeditiously as possible, to take all
reasonable measures to comply with all federal and state
laws and regulations thereunder requiring the registration
of those securities with, or any approval of or consent to
the delivery thereof by, any governmental authority.
(g) The Corporation will pay any and all documentary stamp
or similar issue or transfer taxes payable in respect of the issue
or delivery of shares of Class A Common Stock or other securities
on conversion of the Series 1993 Preferred Stock pursuant hereto;
PROVIDED, HOWEVER, that the Corporation shall not be required to
pay any tax which may be payable in respect of any transfer
involved in the issue or delivery of shares of Class A Common
Stock or other securities in a name other than that of the holder
of the Series 1993 Preferred Stock to be converted and no such
issue or delivery shall be made unless and until the person
requesting the issue or delivery has paid to the Corporation the
amount of any such tax or has established, to the satisfaction of
the Corporation, that the tax has been paid.
(h) In case of any reclassification or similar change of
outstanding shares of Class A Common Stock (other than change in
par value, or as a result of subdivision or combination), or in
case of any consolidation of the Corporation with, or merger of
the Corporation with or into, any other entity that results in a
reclassification, change, conversion, exchange or cancellation of
outstanding shares of Class A Common Stock or any sale or transfer
of all or substantially all of the assets of the Corporation, each
holder of shares of the Series 1993 Preferred Stock then
outstanding shall have the right thereafter to convert the shares
of the Series 1993 Preferred Stock held by the holder into the
kind and amount of securities, cash and other property which the
holder would have been entitled to receive upon such
reclassification, change, consolidation, merger, sale or transfer
if the holder had held the Class A Common Stock issuable upon the
conversion of the shares of the Series 1993 Preferred Stock
immediately prior to the reclassification, change, consolidation,
merger, sale or transfer.
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<PAGE>
4. PREEMPTIVE RIGHTS. Shares of the Series 1993 Preferred Stock
are not entitled to any preemptive rights to acquire any unissued shares of
any capital stock of the Corporation, now or hereafter authorized, or any
other securities of the Corporation, whether or not convertible into shares
of capital stock of the Corporation or carrying a right to subscribe to or
acquire any such shares of capital stock.
5. VOTING. Except as required by law, the shares of the Series
1993 Preferred Stock shall not have any voting powers, either general or
special, except as follows:
(a) So long as any shares of the Series 1993 Preferred
Stock are outstanding, if the Corporation shall have failed to
declare and pay dividends on all outstanding shares of the Series
1993 Preferred Stock for six Dividend Periods, whether or not
consecutive, the number of directors of the Corporation shall
automatically be increased by two and the holders of the Series
1993 Preferred Stock shall have the right, voting together as a
class and separately from all other classes and series, to elect
such two additional directors. The right of the holders of the
Series 1993 Preferred Stock to elect such members of the Board of
Directors as aforesaid shall continue until dividends have been
declared and paid on the Series 1993 Preferred Stock for four
consecutive Dividend Periods. If at any time thereafter should the
Corporation fail to declare and pay dividends on all outstanding
shares of the Series 1993 Preferred Stock for four Dividend
Periods, whether or not consecutive, the voting right described in
this Section 5(a) shall vest until dividends shall have been
declared and paid on the Series 1993 Preferred Stock for four
consecutive Dividend Periods. Whenever the voting right described
in this Section 5(a) shall have vested in the holders of the
Series 1993 Preferred Stock, the right may be exercised initially
either at a special meeting of the holders of the Series 1993
Preferred Stock, called as hereinafter provided, or at any annual
meeting of stockholders held for the purpose of electing directors
and thereafter at each successive annual meeting.
(b) At any time when the voting right of the Series 1993
Preferred Stock provided in Section 5(a) above shall have become
operative and shall not have been exercised, or for the purpose of
the removal of a director as set forth in Section 5(d) below, a
proper officer of the Corporation shall, upon the written request
of the holders of record of at least 10% of the shares of the
Series 1993 Preferred Stock then outstanding addressed to the
Secretary of the Corporation, call a special meeting of the
holders of the Series 1993 Preferred Stock for the purpose of
electing the additional directors to be elected by the holders of
the Series 1993 Preferred Stock or removing any such director, as
the case may be. Such meeting shall be held at the earliest
practicable date upon the notice (and at the place) required for
annual meetings of stockholders. Such notice shall comply with the
requirements of all applicable laws and shall set forth the
purposes of such meeting. If such meeting shall not be called by
the proper officer of the Corporation within 20 days after the
personal service of such written request upon the Secretary of the
Corporation, or within 20 days after mailing the same within the
United States by registered or certified mail enclosed in a
postage-paid envelope addressed to the Secretary of the
Corporation at its principal office, then the holders of record of
at least 10% of the shares of the Series 1993 Preferred Stock then
outstanding may designate in writing one of their number to call
such meeting at the expense of the Corporation, and such meeting
may be called by the person so designated upon the notice (and at
the place) required for annual meetings of stockholders.
(c) Unless otherwise required by law, directors elected by
the holders of the Series 1993 Preferred Stock shall not become
members of any of the three classes of directors otherwise
required by the Articles of Incorporation and Bylaws of the
Corporation with respect to the remaining directors elected by
other classes or series of stock entitled to vote therefor, but
shall, subject to Section 5(e) below, serve until the next annual
meeting or until their respective successors shall be elected and
shall qualify. All rights of the holders of the Series 1993
Preferred Stock to elect such directors shall continue in effect
until the Corporation has declared and paid dividends for four
consecutive Dividend Periods as provided in Section 5(b) above. At
such time as such condition has been met, the voting rights of the
holders of the Series 1993 Preferred Stock shall, without further
action, terminate, subject to revesting in the event of each and
every subsequent failure of the Corporation to declare and pay
such dividends for the requisite number of Dividend Periods
described above.
(d) The term of office of all directors elected by the
holders of the Series 1993 Preferred Stock in office at any time
when the aforesaid voting right is vested in such holders shall
terminate upon the election of their successors at any meeting of
stockholders held for the purpose of selecting directors,
provided,
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<PAGE>
however, without further action, and unless required by law, any
director that shall have been elected by holders of the Series
1993 Preferred Stock as provided herein may be removed at any
time, either with or without cause, by affirmative vote of the
holders of record of a majority of outstanding shares of the
Series 1993 Preferred Stock, voting separately as one class, at a
duly held meeting of the holders of the Series 1993 Preferred
Stock called pursuant to the provisions set forth in Section 5(b).
(e) Upon the later of any termination of the aforesaid
voting right in accordance with the foregoing provisions or the
expiration of the minimum term of office required by law, the term
of office of all directors elected by the holders of the Series
1993 Preferred Stock pursuant thereto then in office shall,
without further action, thereupon terminate unless otherwise
required by law. Upon such termination, the number of directors
constituting the Board of Directors of the Corporation shall,
without further action, be reduced by two, subject always to the
increase of the number of directors pursuant to the provisions of
this Section 5(e) in the case of the future right of such holders
of the Series 1993 Preferred Stock to elect directors as provided
herein.
(f) Unless otherwise required by law, in case of any
vacancy occurring among the directors so elected, the remaining
director may appoint a successor to hold office for the unexpired
term of the director whose place shall be vacant, and if all
directors so elected shall cease to serve as directors before
their term shall expire, the holders of the Series 1993 Preferred
Stock then outstanding may, at a meeting of such holders duly
held, elect successors to hold office for the unexpired terms of
the directors whose places shall be vacant.
(g) The directors elected by the holders of the Series
1993 Preferred Stock in accordance with the provisions of this
Section 5 shall be entitled to one vote per director on any
matter, and otherwise to same rights and privileges as all other
directors of the Corporation.
(h) So long as any shares of the Series 1993 Preferred
Stock are outstanding, the Articles of Incorporation and Bylaws of
the Corporation shall contain provisions ensuring that the number
of directors of the Corporation shall at all times be such that
the exercise by the holder of shares of the Series 1993 Preferred
Stock of the right to elect directors under the circumstances
provided in this Section 5 will not contravene any provisions of
the Corporation's Articles of Incorporation or Bylaws.
(i) Unless the vote or consent of the holders of a greater
number of shares is required by law, the consent of the holders of
at least a majority of all of the shares of the Series 1993
Preferred Stock at the time outstanding given in person or by
proxy, either in writing or by a vote at a meeting called for that
purpose, on which matter the holders of shares of the Series 1993
Preferred Stock shall vote together as a separate class, shall be
necessary to authorize, effect or validate any amendment,
alteration or repeal of any of the provisions of the Articles of
Incorporation of the Corporation or of any certificate, amendatory
or supplemental thereto, which amendment, alteration or repeal
would, if effected, adversely affect the powers, preferences,
rights or privileges of the Series 1993 Preferred Stock.
(j) Unless the vote or consent of the holders of a greater
number of shares is required by law, the consent of the holders of
at least 66-2/3% of all of the shares of the Series 1993 Preferred
Stock at the time outstanding given in person or by proxy, either
in writing or by a vote at a meeting called for that purpose, on
which matter the holders of shares of the Series 1993 Preferred
Stock shall vote together as a separate class, shall be necessary
to create, authorize, issue or increase the authorized or issued
amount of any class or series of any equity securities of the
Corporation, or any warrants, options or other rights convertible
or exchangeable into any class or series of any equity securities
of the Corporation, ranking senior to the Series 1993 Preferred
Stock either as to payment of dividends or rights upon
liquidation.
<PAGE>
(k) Notwithstanding anything to the contrary set forth
herein, the creation or issuance of Parity Stock or Junior Stock
with respect to the payment of dividends or rights upon
liquidation, a merger, consolidation, reorganization or other
business combination in which the Corporation is not the surviving
entity, or an amendment that increases the number of authorized
shares of Preferred Stock or increases the number of authorized
shares of a series of Preferred Stock constituting Junior Stock or
Parity Stock shall not be considered to be an adverse change to
the terms of the Series 1993 Preferred Stock and shall not require
a vote or the consent of the holders of the Series 1993 Preferred
Stock.
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<PAGE>
6. LIQUIDATION RIGHTS.
(a) Upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of the
shares of the Series 1993 Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to stockholders under applicable law, before any
payment or distribution of assets shall be made on the Class A
Common Stock or on any other class or series of capital stock of
the Corporation ranking junior to the Series 1993 Preferred Stock
upon liquidation, the amount of $10.00 per share, in the event of
an involuntary liquidation and the applicable redemption price as
set forth in Section 2 hereof, in the event of a voluntary
liquidation (the "Liquidation Preference"), plus a sum equal to
all dividends accrued on such shares (whether or not declared) for
and unpaid for the then current Dividend Period. The sale,
conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all the
property and assets of the Corporation shall not be deemed a
dissolution, liquidation or winding up of the Corporation for the
purposes of this Section 6, nor shall the merger or consolidation
of the Corporation into or with any other corporation or
association or the merger or consolidation of any other
corporation or association into or with the Corporation, be deemed
to be a dissolution, liquidation or winding up of the Corporation
for the purposes of this Section 6.
(b) After the payment in cash (in New York Clearing House
funds or its equivalent) to the holders of the shares of the
Series 1993 Preferred Stock of the full preferential amounts for
the shares of the Series 1993 Preferred Stock, as set forth in
Section 6(a) above, the holders of the Series 1993 Preferred Stock
as such shall have no further right or claim to any of the
remaining assets of the Corporation.
(c) In the event the assets of the Corporation available
for distribution to the holders of shares of the Series 1993
Preferred Stock upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation shall be insufficient
to pay in full all amounts to which such holders are entitled
pursuant to Section 6(a) above, no distribution shall be made on
account of any shares of any other series of Preferred Stock or
any other class of capital stock of the Corporation ranking on a
parity with the shares of the Series 1993 Preferred Stock upon
such liquidation, dissolution or winding up unless proportionate
amounts shall be paid on account of the shares of the Series 1993
Preferred Stock, ratably, in proportion to the full amounts to
which holders of all such shares which are on a parity with the
shares of the Series 1993 Preferred Stock are respectively
entitled upon such dissolution, liquidation or winding up.
7. RANK. The Series 1993 Preferred Stock shall rank senior as to
payment of dividends and rights upon liquidation to all classes
and series of capital stock of the Corporation outstanding as of
May 24, 1993. Unless the Corporation shall have obtained the
consent of the holders as provided in Section 6 above, the
Corporation shall not issue any other series of Preferred Stock
ranking senior to the Series 1993 Preferred Stock as to the
payment of dividends or rights upon liquidation or any other
series of any equity securities ranking senior to the Series 1993
Preferred Stock as to the payment of dividends or rights upon
liquidation. The Corporation may issue shares of Preferred Stock
or other capital stock ranking junior to or on a parity with the
Series 1993 Preferred Stock as to the payment of dividends or
rights upon liquidation. For purposes of this statement of
designation, any capital stock of any series or class of the
Corporation shall be deemed to rank:
(a) senior to the shares of the Series 1993 Preferred
Stock, as to dividends or upon liquidation, if the holders of such
series or class shall be entitled to the receipt of dividends or
of amounts distributable upon dissolution, liquidation or winding
up of the Corporation, as the case may be, in preference or
priority to the holders of the shares of the Series 1993 Preferred
Stock;
<PAGE>
(b) on a parity with shares of the Series 1993 Preferred
Stock, as to dividends or upon liquidation, whether or not the
dividend rates, dividend payment dates or redemption or
liquidation prices per share or sinking fund provisions, if any,
be different from those of the Series 1993 Preferred Stock, if the
holders of such stock shall be entitled to the receipt of
dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be,
in proportion to their respective dividend rates or liquidation
prices, without preference or priority, one over the other, as
between the holders of such stock and the holders of shares of the
Series 1993 Preferred Stock; and
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<PAGE>
(c) junior to shares of the Series 1993 Preferred Stock,
as to dividends or upon liquidation, if such stock shall be Class
A Common Stock or if the holders of shares of the Series 1993
Preferred Stock shall be entitled to receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding up
of the Corporation, as the case may be, in preference or priority
to the holders of shares of such series or class.
8. REPORTS AND NOTICES. So long as any shares of the Series 1993
Preferred Stock shall be outstanding, the Corporation shall provide to the
holder or holders of such shares copies of all annual, quarterly and other
reports of the Corporation and copies of all stockholder notices of the
Corporation when and as furnished to the holders of the Class A Common
Stock.
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<PAGE>
APPENDIX G
STATEMENT OF DESIGNATION
OF
9% NONCUMULATIVE PERPETUAL Preferred Stock
OF
BANKUNITED FINANCIAL CORPORATION
BankUnited Financial Corporation (the "Corporation"), a corporation
organized and existing under the Florida Business Corporation Act, in accordance
with the provisions of Section 607.0602 thereof and Article VI of the
Corporation's Articles of Incorporation, DOES HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of Directors by the
Articles of Incorporation of the Corporation, said Board of Directors acting at
a meeting thereof adopted resolutions providing for the issuance of 2,300,000
shares of the Corporation's Preferred Stock, $.01 par value, designated "9%
Noncumulative Perpetual Preferred Stock," which resolutions are as follows:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation by the Articles of Incorporation, the Board of
Directors does hereby provide for and authorize the issuance of 2,300,000
shares of the Preferred Stock, $.01 par value, of the Corporation, of the
presently authorized but unissued shares of Preferred Stock (the "Preferred
Stock") to be designated "9% Noncumulative Perpetual Preferred Stock" (the
"Perpetual Preferred Stock"). The voting powers, designations, preferences,
and relative, participating, optional or other special rights of the
Perpetual Preferred Stock authorized hereunder and the qualifications,
limitations and restrictions of such preferences and rights are as follows:
1. DIVIDENDS.
(a) The holders of the Perpetual Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds of the Corporation legally available for
payment, noncumulative cash dividends, payable quarterly in
arrears, at the rate of $.90 per share per annum. Dividends, when
declared on the Perpetual Preferred Stock, shall have accrued from
the date of issuance or thereafter, from the most recent date on
which dividends were payable and shall be payable quarterly on
March 31, June 30, September 30 and December 31 of each year (each
a "Dividend Payment Date"), commencing on March 31, 1994;
PROVIDED, HOWEVER, that if any such day is a non-business day, the
Dividend Payment Date will be the next business day. Each declared
dividend shall be payable to holders of record as they appear at
the close of business on the stock books of the Corporation on
such record dates, not more than 30 calendar days and not less
than 10 calendar days preceding the Dividend Payment Date
therefor, as determined by the Board of Directors (each of such
dates a "Record Date"). Quarterly dividend periods (each a
"Dividend Period") shall commence on and include the first day of
January, April, July and October of each year and shall end on and
include the day next preceding the next following Dividend Payment
Date.
(b) No full dividends shall be declared or paid or set
apart for payment on any series of Preferred Stock or other
capital stock of any series ranking, as to dividends or
liquidation preference, on a parity ("Parity Stock") with the
Perpetual Preferred Stock during any calendar quarter unless full
dividends on the Perpetual Preferred Stock for the Dividend Period
ending during such calendar quarter have been or contemporaneously
are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for such payment. When dividends are
not so paid in full (or a sum sufficient for such full payment is
not so set apart) upon the Perpetual Preferred Stock and any other
Parity Stock, dividends upon the Perpetual Preferred Stock and
dividends on such other Parity Stock payable during such calendar
quarter shall be declared pro rata so that the amount of such
dividends so payable per share on the Perpetual Preferred Stock
and such other Parity Stock shall in all cases bear to each other
the same ratio that full dividends for the then-current calendar
quarter on the shares of Perpetual Preferred Stock (which shall
not include any accumulation in respect of unpaid dividends for
prior Dividend Periods) and full dividends, including required or
permitted accumulations, if any, on shares
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of such other Parity Stock, bear to each other. If full dividends
on the Perpetual Preferred Stock have not been declared and paid
or set aside for payment for the Dividend Payment Date falling in
the then-current Dividend Period, then, with respect to such
then-current Dividend Period, the following restrictions shall be
applicable: (i) no dividend or distribution, other than in shares
of capital stock ranking junior to the Perpetual Preferred Stock
as to dividends or liquidation preference ("Junior Stock"), may be
declared, set aside or paid on any shares of Junior Stock, (ii)
the Corporation may not repurchase, redeem or otherwise acquire
any shares of its Junior Stock (except by conversion into or
exchange for Junior Stock) and (iii) the Corporation may not,
directly or indirectly, repurchase, redeem or otherwise acquire
(except by conversion into or exchange for Junior Stock) any
shares of any class or series of Junior Stock or warrants, calls,
options or other rights to acquire capital stock of the
Corporation or other security exercisable or exchangeable into
capital stock of the Corporation, otherwise than pursuant to pro
rata offers to purchase or a concurrent redemption of all, or a
pro rata portion, of the outstanding shares of Perpetual Preferred
Stock. Holders of the Perpetual Preferred Stock shall not be
entitled to any dividends, whether payable in cash, property or
stock, in excess of declared noncumulative dividends, as herein
provided, on the Perpetual Preferred Stock. No interest or sum of
money in lieu of interest shall be payable in respect of any
declared dividend payment or payments on the Perpetual Preferred
Stock which may be in arrears. As used herein, the phrase "set
apart" in respect of the payment of dividends shall require
deposit of any funds in a bank or trust Corporation in a separate
deposit account maintained for the benefit of the holders of the
Perpetual Preferred Stock.
2. REDEMPTION.
(a) The shares of Perpetual Preferred Stock shall be
redeemable by the Corporation, in whole or in part, at any time
and from time to time from and after September 30, 1998 at a price
of $10.00 per share plus an amount equal to all accrued but unpaid
dividends (whether or not declared) for the then current Dividend
Period immediately preceding the date fixed for redemption (the
"Redemption Date").
(b) The Perpetual Preferred Stock shall be redeemable by
the Corporation, in accordance with applicable law, in whole or in
part, upon not less than 30 nor more than 60 calendar days' prior
written notice by mail.
(c) In the event that fewer than all the outstanding
shares of the Perpetual Preferred Stock are to be redeemed as
permitted by this Section 2, the number of shares to be redeemed
shall be determined by the Board of Directors and the shares to be
redeemed shall be determined by lot or PRO RATA as may be
determined by the Board of Directors or by such other method as
may be approved by the Board of Directors that is required to
conform to any rule or regulation of any stock exchange or
automated quotation system upon which the shares of the Perpetual
Preferred Stock may at the time be listed.
(d) Notice of redemption of the Perpetual Preferred Stock,
specifying the Redemption Date and place of redemption, shall be
given by first class mail to each holder of record of the shares
to be redeemed, at his or her address of record, not less than 30
nor more than 60 calendar days prior to the Redemption Date. If
less than all the shares owned by such holder are then to be
redeemed, the notice shall also specify the number of shares
thereof which are to be redeemed and the fact that a new
certificate or certificates representing any unredeemed shares
shall be issued without cost to such holder.
(e) Notice of redemption of shares of the Perpetual
Preferred Stock having been given as provided in Section 2(d),
then unless the Corporation shall have defaulted in providing for
the payment of the redemption price and all accrued and unpaid
dividends (whether or not declared) for the then-current Dividend
Period immediately preceding the Redemption Date, all rights of
the holders thereof (except the right to receive the redemption
price and all accrued and unpaid dividends, whether or not
declared, for the then-current Dividend Period immediately
preceding the Redemption Date) shall cease with respect to such
shares and such shares shall not, after the Redemption Date, be
deemed to be outstanding and shall not have the status of
Perpetual Preferred Stock. In case fewer than all the shares
represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares
without cost to the holder thereof.
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(f) Any shares of Perpetual Preferred Stock which shall at
any time have been redeemed shall, after such redemption, have the
status of authorized but unissued shares of Preferred Stock,
without designation as to series until such shares are once more
designated as part of a particular series by the Board of
Directors.
(g) Shares of the Perpetual Preferred Stock are not
subject or entitled to the benefit of a sinking fund."
3. PREEMPTIVE RIGHTS. Holders of the Perpetual Preferred Stock are
not entitled to any preemptive rights to acquire any unissued shares of any
capital stock of the Corporation, now or hereafter authorized, or any other
securities of the Corporation, whether or not convertible into shares of
capital stock of the Corporation or carrying a right to subscribe to or
acquire any such shares of capital stock.
4. VOTING. Except as required by law, the shares of the Perpetual
Preferred Stock shall not have any voting powers, either general or
special, except as follows:
(a) So long as any shares of the Perpetual Preferred Stock
are outstanding, if the Corporation shall have failed to declare
and pay dividends on all outstanding shares of the Perpetual
Preferred Stock for six Dividend Periods, whether or not
consecutive, the number of directors of the Corporation shall
automatically be increased by two and the holders of the Perpetual
Preferred Stock shall have the right, voting separately as a class
(together with the holders of shares of Parity Stock, if any, upon
which like voting rights have been conferred and are exercisable),
to elect such two additional directors. The right of the holders
of the Perpetual Preferred Stock (and Parity Stock, if any, with
parity voting rights) to elect such members of the Board of
Directors as aforesaid shall continue until dividends have been
declared and paid on the Perpetual Preferred Stock for four
consecutive Dividend Periods. If at any time thereafter should the
Corporation fail to declare and pay dividends on all outstanding
shares of the Perpetual Preferred Stock for four Dividend Periods,
whether or not consecutive, the voting right described in this
Section 4(a) shall vest until dividends shall have been declared
and paid on the Perpetual Preferred Stock for four consecutive
Dividend Periods. Whenever the voting right described in this
Section 4(a) shall have vested in the holders of the Perpetual
Preferred Stock, the right may be exercised initially either at a
special meeting of the holders of the Perpetual Preferred Stock
(and Parity Stock, if any, with parity voting rights), called as
hereinafter provided, or at any annual meeting of stockholders
held for the purpose of electing directors and thereafter at each
successive annual meeting.
(b) At any time when the voting right of the Perpetual
Preferred Stock provided in Section 4(a) above shall have become
operative and shall not have been exercised, or for the purpose of
the removal of a director as set forth in Section 4(d) below, a
proper officer of the Corporation shall, upon the written request
of the holders of record of at least 10% of the shares of the
Perpetual Preferred Stock (and Parity Stock, if any, with parity
voting rights) then outstanding addressed to the Secretary of the
Corporation, call a special meeting of the holders of the
Perpetual Preferred Stock (and Parity Stock, if any, with parity
voting rights) for the purpose of electing the additional
directors to be elected by such holders or removing any such
director, as the case may be. Such meeting shall be held at the
earliest practicable date upon the notice (and at the place)
required for annual meetings of stockholders. Such notice shall
comply with the requirements of all applicable laws and shall set
forth the purposes of such meeting. If such meeting shall not be
called by the proper officer of the Corporation within 20 days
after the personal service of such written request upon the
Secretary of the Corporation, or within 20 days after mailing the
same within the United States by registered or certified mail
enclosed in a postage-paid envelope addressed to the Secretary of
the Corporation at its principal office, then the holders of
record of at least 10% of the shares of the Perpetual Preferred
Stock (and Parity Stock, if any, with parity voting rights) then
outstanding may designate in writing one of their members to call
such meeting at the expense of the Corporation, and such meeting
may be called by the person so designated upon the notice (and at
the place) required for annual meetings of stockholders.
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(c) Unless otherwise required by law, directors elected by
the holders of the Perpetual Preferred Stock (and Parity Stock, if
any, with parity voting rights) shall not become members of any of
the three classes of directors otherwise required by the Articles
of Incorporation and Bylaws of the Corporation with respect to the
remaining directors elected by other classes or series of stock
entitled to vote therefor, but shall, subject to Section 4(e)
below, serve until the next annual meeting or until their
respective successors shall be elected
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and shall qualify. All rights of the holders of the Perpetual
Preferred Stock (and Parity Stock, if any, with parity voting
rights) to elect such directors shall continue in effect until the
Corporation has declared and paid dividends for four consecutive
Dividend Periods as provided in Section 4(b) above. At such time
as such condition has been met, the voting rights of such holders
shall, without further action, terminate, subject to revesting in
the event of each and every subsequent failure of the Corporation
to declare and pay such dividends for the requisite number of
Dividend Periods described above.
(d) The term of office of all directors elected by the
holders of the Perpetual Preferred Stock (and Parity Stock, if
any, with parity voting rights) in office at any time when the
aforesaid voting right is vested in such holders shall terminate
upon the election of their successors at any meeting of
stockholders held for the purpose of selecting directors;
provided, however, without further action, and unless required by
law, any director that shall have been elected by such holders as
provided herein may be removed at any time, either with or without
cause, by affirmative vote of the holders of record of a majority
of outstanding shares of the Perpetual Preferred Stock (and Parity
Stock, if any, with parity voting rights), voting separately as
one class, at a duly held meeting of such holders called pursuant
to the provisions set forth in Section 4(b).
(e) Upon the later of any termination of the aforesaid
voting right in accordance with the foregoing provisions or the
expiration of the minimum term of office required by law, the term
of office of all directors elected by the holders of the Perpetual
Preferred Stock (and Parity Stock, if any, with parity voting
rights) pursuant thereto then in office shall, without further
action, thereupon terminate unless otherwise required by law. Upon
such termination, the number of directors constituting the Board
of Directors of the Corporation shall, without further action, be
reduced by two, subject always to the increase of the number of
directors pursuant to the provisions of this Section 4(e) in the
case of the future right of such holders to elect directors as
provided herein.
(f) Unless otherwise required by law, in case of any
vacancy occurring among the directors so elected, the remaining
director may appoint a successor to hold office for the unexpired
term of the director whose place shall be vacant, and if all
directors so elected shall cease to serve as directors before
their term shall expire, the holders of the Perpetual Preferred
Stock then outstanding (and any Parity Stock, if any, with parity
voting rights) may, at a meeting of such holders duly held, elect
successors to hold office for the unexpired terms of the directors
whose places shall be vacant.
(g) The directors elected by the holders of the Perpetual
Preferred Stock (and any Parity Stock, if any, with parity voting
rights) in accordance with the provisions of this Section 4 shall
be entitled to one vote per director on any matter, and otherwise
to same rights and privileges as all other directors of the
Corporation.
(h) So long as any shares of the Perpetual Preferred Stock
are outstanding, the Articles of Incorporation and Bylaws of the
Corporation shall contain provisions ensuring that the number of
directors of the Corporation shall at all times be such that the
exercise by the holders of shares of the Perpetual Preferred Stock
of the right to elect directors under the circumstances provided
in this Section 4 will not contravene any provisions of the
Corporation's Articles of Incorporation or Bylaws.
(i) Unless the vote or consent of the holders of a greater
number of shares is required by law, the consent of the holders of
at least a majority of all of the shares of the Perpetual
Preferred Stock at the time outstanding given in person or by
proxy, either in writing or by a vote at a meeting called for that
purpose, on which matter the holders of shares of the Perpetual
Preferred Stock shall vote together as a separate class, shall be
necessary to authorize, effect or validate any amendment,
alteration or repeal of any of the provisions of the Articles of
Incorporation of the Corporation or of any certificate, amendatory
or supplemental thereto, which amendment, alteration or repeal
would, if effected, adversely affect the powers, preferences,
rights or privileges of the Perpetual Preferred Stock.
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(j) Unless the vote or consent of the holders of a greater
number of shares is required by law, the consent of the holders of
at least 66-2/3% of all of the shares of the Perpetual Preferred
Stock at the time outstanding given in person or by proxy, either
in writing or by a vote at a meeting called for that purpose, on
which matter the holders of shares of the Perpetual Preferred
Stock shall vote together as a separate class
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(together with the holders of shares of Parity Stock, if any, upon
which like voting rights have been conferred and are exercisable),
shall be necessary to create, authorize, issue or increase the
authorized or issued amount of any class or series of any equity
securities of the Corporation, or any warrants, options or other
rights convertible or exchangeable into any class or series of any
equity securities of the Corporation, ranking senior to the
Perpetual Preferred Stock either as to payment of dividends or
rights upon liquidation.
(k) Notwithstanding anything to the contrary set forth
herein, the creation or issuance of Parity Stock or Junior Stock
with respect to the payment of dividends or rights upon
liquidation, a merger, consolidation, reorganization or other
business combination in which the Corporation is not the surviving
entity, or an amendment that increases the number of authorized
shares of Preferred Stock or increases the number of authorized
shares of a series of Preferred Stock constituting Junior Stock or
Parity Stock shall not be considered to be an adverse change to
the terms of the Perpetual Preferred Stock and shall not require a
vote or the approval of the holders of the Perpetual Preferred
Stock.
5. LIQUIDATION RIGHTS.
(a) Upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of the
shares of the Perpetual Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to stockholders under applicable law, before any
payment or distribution of assets shall be made on any class or
series of capital stock of the Corporation ranking junior to the
Perpetual Preferred Stock upon liquidation, the amount of $10.00
per share, in the event of a voluntary or involuntary liquidation
(the "Liquidation Preference"), plus a sum equal to all dividends
declared but unpaid for the then-current Dividend Period. For
purposes of this Section 5, the merger or consolidation of the
Corporation into or with any other corporation or association, the
merger or consolidation of any other corporation or association
into or with the Corporation, or the sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all the property and assets
of the Corporation shall not be deemed a dissolution, liquidation
or winding up of the Corporation, unless such sale, conveyance,
exchange or transfer shall be in connection with and intended to
be a plan of complete liquidation, dissolution or winding up of
the Corporation.
(b) After the payment in cash (in New York Clearing House
funds or its equivalent) to the holders of the shares of the
Perpetual Preferred Stock of the full preferential amounts for the
shares of the Perpetual Preferred Stock, as set forth in Section
5(a) above, the holders of the Perpetual Preferred Stock as such
shall have no further right or claim to any of the remaining
assets of the Corporation.
(c) In the event the assets of the Corporation available
for distribution to the holders of shares of the Perpetual
Preferred Stock upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation shall be insufficient
to pay in full all amounts to which such holders are entitled
pursuant to Section 5(a) above, no distribution shall be made on
account of any shares of any other series of Preferred Stock or
any other class of capital stock of the Corporation ranking on a
parity with the shares of the Perpetual Preferred Stock upon such
liquidation, dissolution or winding up unless proportionate
amounts shall be paid on account of the shares of the Perpetual
Preferred Stock, ratably, in proportion to the full amounts to
which holders of all such shares which are on a parity with the
shares of the Perpetual Preferred Stock are respectively entitled
upon such dissolution, liquidation or winding up.
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6. RANK. The Perpetual Preferred Stock shall rank on a parity with
the 8% Noncumulative Convertible Preferred Stock, Series 1993 and senior to
the Class A Common Stock, Class B Common Stock, Noncumulative Convertible
Preferred Stock, Series A, Noncumulative Convertible Preferred Stock,
Series B, Noncumulative Convertible Preferred Stock, Series C and
Noncumulative Convertible Preferred Stock, Series C-II of the Corporation
as to payment of dividends and rights upon liquidation. Unless the
Corporation shall have obtained the consent of the holders as provided in
Section 4 above, the Corporation shall not issue any other series of
Preferred Stock ranking senior to the Perpetual Preferred Stock as to the
payment of dividends or rights upon liquidation or any other series of any
equity securities ranking senior to the Perpetual Preferred Stock as to the
payment of dividends or rights upon liquidation. The Corporation may issue
shares of Preferred Stock or other capital stock ranking junior to or on a
parity with the Perpetual Preferred Stock as to the payment of dividends or
rights upon liquidation without the consent of the holders of the
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Perpetual Preferred Stock. For purposes of this Section 6, any capital
stock of any series or class of the Corporation shall be deemed to rank:
(a) senior to the shares of the Perpetual Preferred Stock,
as to dividends or upon liquidation, if the holders of such series
or class shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding up
of the Corporation, as the case may be, in preference or priority
to the holders of the shares of the Perpetual Preferred Stock;
(b) on a parity with shares of the Perpetual Preferred
Stock, as to dividends or upon liquidation, whether or not the
dividend rates, dividend payment dates or redemption or
liquidation prices per share or sinking fund provisions, if any,
be different from those of the Perpetual Preferred Stock, if the
holders of such stock shall be entitled to the receipt of
dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be,
in proportion to their respective dividend rates or liquidation
prices, without preference or priority, one over the other, as
between the holders of such stock and the holders of shares of the
Perpetual Preferred Stock; and
(c) junior to shares of the Perpetual Preferred Stock, as
to dividends or upon liquidation, if the holders of shares of the
Perpetual Preferred Stock shall be entitled to receipt of
dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be,
in preference or priority to the holders of shares of such series
or class.
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APPENDIX H
STATEMENT OF DESIGNATION
OF
8% NONCUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES 1996
OF
BANKUNITED FINANCIAL CORPORATION
BankUnited Financial Corporation (the "Corporation"), a corporation
organized and existing under the Florida Business Corporation Act, in accordance
with the provisions of Section 607.0602 thereof and Article VI the Corporation's
Articles of Incorporation, DOES HEREBY CERTIFY:
That pursuant to authority conferred upon the Board of Directors by the
Articles of Incorporation of the Corporation, said Board of Directors acting at
a meeting thereof adopted resolutions providing for the issuance of 1,000,000
shares of the Corporation's Preferred Stock, $.01 par value, "8% Noncumulative
Convertible Preferred Stock, Series 1996," which resolutions are as follows:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation by the Articles of Incorporation, the Board of Directors does
hereby provide for and authorize the issuance of 1,000,000 shares of the
Preferred Stock, $.01 par value, of the Corporation, of the presently authorized
but unissued shares of Preferred Stock (the "Preferred Stock") to be designated
"8% Noncumulative Convertible Preferred Stock, Series 1996" (the "Series 1996
Preferred Stock"). The number of shares constituting the Series 1996 Preferred
Stock may be increased or decreased from time to time by a vote of not less than
a majority of the Board of Directors of the Corporation then in office;
PROVIDED, that no decrease shall reduce the number of shares of the Series 1996
Preferred Stock to a number less than the number of shares then outstanding plus
the number of shares reserved for issuance upon the exercise of any outstanding
options, rights or warrants to purchase Series 1996 Preferred Stock or upon the
conversion of any outstanding securities issued by the Corporation convertible
into shares of the Series 1996 Preferred Stock. The voting powers, designations,
preferences, and relative, participating, optional or other special rights of
the Series 1996 Preferred Stock authorized hereunder and the qualifications,
limitations and restrictions of such preferences and rights are as follows:
1. DIVIDENDS.
(a) The holders of the Series 1996 Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out
of funds of the Corporation legally available for payment, noncumulative
cash dividends, payable quarterly in arrears, at the rate of $1.20 per
share per annum. Dividends, when declared on the Series 1996 Preferred
Stock, shall have accrued from the date of issuance or thereafter, from the
most recent date on which dividends were payable and be payable quarterly
on March 31, June 30, September 30 and December 31 of each year (each a
"Dividend Payment Date"), commencing on December 31, 1996; PROVIDED,
HOWEVER, that if any such day is a non-business day, the Dividend Payment
Date will be the next business day. Each declared dividend shall be payable
to holders of record as they appear at the close of business on the stock
books of the Corporation on such record dates, not more than 30 calendar
days and not less than 10 calendar days preceding the Dividend Payment Date
therefor, as determined by the Board of Directors (each of such dates a
"Record Date"). Quarterly dividend periods (each a "Dividend Period") shall
commence on and include the first day of January, April, July and October
of each year and shall end on and include the day next preceding the next
following Dividend Payment Date. Dividends payable on the Series 1996
Preferred Stock for any period greater or less than a full Dividend Period
shall be computed on the basis of a 360-day year consisting of twelve
30-day months. Dividends payable on the Series 1996 Preferred Stock for
each full Dividend Period shall be computed by dividing the annual dividend
rate by four.
(b) No full dividends shall be declared, paid or set apart for
payment on any series of Preferred Stock or other capital stock of any
series ranking, as to dividends or liquidation preference, on a parity
("Parity Stock") with the Series 1996 Preferred Stock during any calendar
quarter unless full dividends on the Series 1996 Preferred Stock for the
Dividend Period ending during such calendar quarter have been or
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contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for such payment. When dividends are
not so paid in full (or a sum sufficient for such full payment is not so
set apart) upon the Series 1996 Preferred Stock and any other Parity Stock,
dividends upon the Series 1996 Preferred Stock and dividends on such other
Parity Stock payable during such calendar quarter shall be declared pro
rata so that the amount of such dividends so payable per share on the
Series 1996 Preferred Stock and such other Parity Stock shall in all cases
bear to each other the same ratio that full dividends for the then-current
calendar quarter on the shares of Series 1996 Preferred Stock (which shall
not include any accumulation in respect of unpaid dividends for prior
Dividend Periods) and full dividends, including required or permitted
accumulations, if any, on shares of such other Parity Stock, bear to each
other. The Corporation shall not declare, pay or set apart funds for any
dividend or other distribution, other than in shares of capital stock
ranking junior to the Series 1996 Preferred Stock as to dividends or
liquidation preference ("Junior Stock"), on any shares of Junior Stock or
repurchase, redeem or otherwise acquire through a sinking fund or
otherwise, or set apart funds for the repurchase, redemption or other
acquisition of, any shares of Junior Stock (except by conversion into or
exchange for Junior Stock), unless (i) all declared and unpaid dividends
with respect to the Series 1996 Preferred Stock have been paid, or funds
have been set apart for payment of such dividends and (ii) the Corporation
has declared a cash dividend on the Series 1996 Preferred Stock at the
annual dividend rate for the then-current Dividend Period and sufficient
funds have been set apart for payment of such dividends. Holders of the
Series 1996 Preferred Stock shall not be entitled to any dividends, whether
payable in cash, property or stock, in excess of declared noncumulative
dividends, as herein provided, on the Series 1996 Preferred Stock. No
interest or sum of money in lieu of interest shall be payable in respect of
any declared dividend payment or payments on the Series 1996 Preferred
Stock which may be in arrears. As used herein, the phrase "set apart" in
respect of the payment of dividends shall require deposits of any funds in
a bank or trust company in a separate deposit account maintained for the
benefit of the holders of the Series 1996 Preferred Stock.
2. REDEMPTION.
(a) The shares of Series 1996 Preferred Stock shall be redeemable
by the Corporation, in whole, or in part, at any time and from time to time
at a price of $15.00 per share, plus an amount equal to declared but unpaid
dividends, if any, with respect to Dividend Periods preceding the date
fixed for redemption (the "Redemption Date"), if the Corporation's Series I
Class A Common Stock, $.01 par value (the "Class A Common Stock"), shall
have a closing price which is at least 120% of the Conversion Price (as
defined below) for any 20 out of 30 consecutive trading days ending within
five days of the giving of notice of redemption as provided for below. In
addition, the Series 1996 Preferred Stock shall be redeemable by the
Corporation in whole or in part, at any time and from time to time on or
after July 1, 1998 at the following per share prices during the twelve
month period beginning July 1:
YEAR REDEMPTION PRICE
---- ----------------
1998 $16.20
1999 15.96
2000 15.72
2001 15.48
2002 15.24
2003 and thereafter 15.00
plus, in each case, an amount equal to any declared but unpaid dividends,
if any, with respect to Dividend Periods preceding the Redemption Date.
(b) In the event that fewer than all the outstanding shares of the
Series 1996 Preferred Stock are to be redeemed as permitted by this Section
2, the number of shares to be redeemed shall be determined by the Board of
Directors and the shares to be redeemed shall be determined by lot or PRO
RATA as may be determined by the Board of Directors or by such other method
as may be approved by the Board of Directors that is
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required to conform to any rule or regulation of any stock exchange or
automated quotation system upon which the shares of the Series 1996
Preferred Stock may at the time be listed.
(c) Notice of redemption of the Series 1996 Preferred Stock,
specifying the Redemption Date, the redemption price and the place of
redemption, shall be given by first class mail to each holder of record of
the shares to be redeemed at his or her address of record and by
publication in THE WALL STREET JOURNAL. In the case of a redemption in
whole, notice will be given once, not less than 30 nor more than 60
calendar days prior to the Redemption Date. In the case of a partial
redemption, the notice shall also specify the aggregate number of shares of
the Series 1996 Preferred Stock to be redeemed and the aggregate number of
shares of the Series 1996 Preferred Stock that shall be outstanding after
such partial redemption and the mailed notice shall specify the fact that a
new certificate or certificates representing any unredeemed shares shall be
issued without cost to a holder. The notice of partial redemption shall be
given twice: the first notice shall be given not more than 75 days nor less
than 60 days prior to the Redemption Date; and the second notice shall be
given at least 20 days after the first notice but not less than 30 days
prior to the Redemption Date.
(d) Notice of redemption of shares of the Series 1996 Preferred
Stock having been given as provided in Section 2(c), then unless the
Corporation shall have defaulted in providing for the payment of the
redemption price and all declared and unpaid dividends with respect to
Dividend Periods preceding the Redemption Date, all rights of the holders
thereof (except the right to receive the redemption price and all declared
and unpaid dividends with respect to Dividend Periods preceding the
Redemption Date) shall cease with respect to such shares and such shares
shall not, after the Redemption Date, be deemed to be outstanding and shall
not have the status of Preferred Stock. In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares without cost to the holder
thereof.
(e) Any shares of Series 1996 Preferred Stock which shall at any
time have been redeemed or converted shall, after such redemption or
conversion, have the status of authorized but unissued shares of Preferred
Stock, without designation as to series until such shares are once more
designated as part of a particular series by the Board of Directors.
(f) Shares of the Series 1996 Preferred Stock are not subject or
entitled to the benefit of a sinking fund.
3. CONVERSION.
(a) Subject to and upon compliance with the provisions of this
Section 3, the holder of any shares of the Series 1996 Preferred Stock
shall have the right, at his or her option, at any time and from time to
time prior to redemption, to convert the shares into a number of fully paid
and nonassessable shares (calculated as to each conversion to the nearest
1/100th of a share) of the Corporation's Series I Class A Common Stock,
$.01 par value (the "Class A Common Stock"), equal to $15.00 for each share
surrendered for conversion divided by the Conversion Price (as defined in
Section 3(d) below).
(b) (i) In order to exercise the conversion privilege, the holder
of each share of the Series 1996 Preferred Stock to be converted shall
surrender the certificate representing such share to the Corporation's
transfer agent for the Series 1996 Preferred Stock with the Notice of
Election to Convert on the back of said Certificate duly completed and
signed. Unless the shares issuable on conversion are to be issued in the
same name as the name in which the shares of the Series 1996 Preferred
Stock are registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or his or her duly authorized
attorney and by funds in an amount sufficient to pay any transfer or
similar tax. The holders of shares of the Series 1996 Preferred Stock at
the close of business on a Record Date shall be entitled to receive any
dividend declared payable on those shares for the corresponding Dividend
Period on the applicable Dividend Payment Date, notwithstanding the
conversion of the shares after the Record Date.
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(ii) As promptly as practicable after the surrender by a
holder of the certificates for shares of the Series 1996 Preferred Stock in
accordance with this Section 3, the Corporation shall issue and shall
deliver to the holder at the office of the transfer agent, or otherwise
upon such holder's written order, a certificate or certificates for the
number of full shares of Class A Common Stock issuable upon the conversion
of those shares in accordance with the provisions of this Section 3, and
any fractional interest in respect of a share of Class A Common Stock
arising upon the conversion shall be settled as provided in Section 3(c)
below. In case less than all of the shares of the Series 1996 Preferred
Stock represented by a certificate are to be converted by a holder, upon
such conversion the Corporation shall issue and deliver to the holder at
the office of the transfer agent, or otherwise upon such holder's written
order, a certificate or certificates for the shares of Series 1996
Preferred Stock not converted.
(iii) Each conversion shall be deemed to have been
effected immediately prior to the close of business on the date on which
all of the conditions specified in Section 3(b) hereof shall have been
satisfied, and, the person or persons in whose name or names any
certificate or certificates for shares of Class A Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Class A Common Stock represented by
those certificates at such time on such date and such conversion shall be
at the Conversion Price in effect at such time on such date, unless the
stock transfer books of the Corporation shall be closed on that date, in
which event such person or persons shall be deemed to have become such
holder or holders of record at the close of business on the next succeeding
day on which such stock transfer books are open, but such conversion shall
be at the Conversion Price in effect on the date upon which all of the
conditions specified in Section 3(b) hereof shall have been satisfied. All
shares of Class A Common Stock delivered upon conversion of the Series 1996
Preferred Stock will upon delivery be duly and validly issued and fully
paid and nonassessable, free of all liens and charges and not subject to
any preemptive rights. Upon the surrender of certificates representing
shares of the Series 1996 Preferred Stock to be converted, the shares shall
no longer be deemed to be outstanding and all rights of a holder with
respect to the shares surrendered for conversion shall immediately
terminate except the right to receive the Class A Common Stock or other
securities, cash or other assets as herein provided.
(c) No fractional shares or securities representing fractional
shares of Class A Common Stock shall be issued upon conversion of the
Series 1996 Preferred Stock. Any fractional interest in a share of Class A
Common Stock resulting from conversion of a share of the Series 1996
Preferred Stock shall be paid in cash (computed to the nearest cent) based
on the Current Market Price (as defined in Section 3(d)(iv) below) of the
Class A Common Stock on the Trading Day (as defined in Section 3(d)(iv)
below) next preceding the day of conversion. If more than one share shall
be surrendered for conversion at one time by the same holder, the number of
whole shares of Class A Common Stock issuable upon the conversion shall be
computed on the basis of the aggregate Liquidation Preference (as such term
is defined in Section 6 below) of the shares of the Series 1996 Preferred
Stock so surrendered.
(d) The "Conversion Price" per share of the Series 1996 Preferred
Stock shall be $9.00, subject to adjustment from time to time as follows:
(i) In case the Corporation shall (1) pay a dividend or
make a distribution on its Class A Common Stock in shares of its Class A
Common Stock, (2) subdivide its outstanding Class A Common Stock into a
greater number of shares, or (3) combine its outstanding Class A Common
Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such event shall be proportionately adjusted so that
the holder of any share of the Series 1996 Preferred Stock thereafter
surrendered for conversion shall be entitled to receive the number and kind
of shares of capital stock of the Corporation which he would have been
entitled to receive had the share been converted immediately prior to the
record date for such action, or, if no record date has been established in
connection with such event, the effective date for such action. An
adjustment made pursuant to this Section 3(d)(i) shall become effective
immediately after the record date in the case of a dividend or distribution
except as provided in Section 3(d)(vii) below, and shall become effective
immediately after the effective date in the case of a subdivision or
combination. If, as a result of an adjustment made pursuant to this Section
3(d)(i), the holder of any shares of Series 1996 Preferred Stock thereafter
surrendered for conversion shall become entitled to receive shares of two
or more classes of capital stock of the Corporation, the Board of Directors
of the Corporation (whose determination shall be conclusive and shall
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be described in a resolution adopted thereto) shall determine the
allocation of the adjusted Conversion Price between or among shares of such
classes of capital stock. If any dividend or distribution is not paid or
made, the Conversion Price then in effect shall be appropriately
readjusted.
(ii) In case the Corporation shall issue rights or
warrants to all holders of its Class A Common Stock entitling them (for a
period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase Class A Common Stock at a price per share less
than the Current Market Price (as defined in Section 3(d)(iv) below) of the
Class A Common Stock at the record date for the determination of
stockholders entitled to receive the rights or warrants, the Conversion
Price in effect immediately prior to such record date shall be adjusted so
that it shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the record date by a fraction of which
the numerator shall be the number of shares of Class A Common Stock
outstanding on the record date plus the number of shares of Class A Common
Stock which the aggregate offering price of the total number of shares of
Class A Common Stock so offered for subscription or purchase would purchase
at the Current Market Price at that record date, and of which the
denominator shall be the number of shares of Class A Common Stock
outstanding on the record date plus the number of additional shares of
Class A Common Stock for subscription or purchase. The adjustment provided
for in this Section 3(d)(ii) shall be made successively whenever any such
rights or warrants are issued, and shall become effective immediately,
except as provided in Section 3(d)(vii) below, after such record date. In
determining whether any rights or warrants entitle the holder of the Class
A Common Stock to subscribe for or purchase shares of Class A Common Stock
at less than the Current Market Price, and in determining the aggregate
offering price of the shares of Class A Common Stock so offered, there
shall be taken into account any consideration received by the Corporation
for such rights or warrants, the value of such consideration, if other than
cash, to be determined by the Board (whose determination, if made in good
faith, shall be conclusive). If any or all of such rights or warrants are
not so issued or expire or terminate without having been exercised, the
Conversion Price then in effect shall be appropriately readjusted.
(iii) In case the Corporation shall distribute to all
holders of its Class A Common Stock any shares of capital stock of the
Corporation (other than Class A Common Stock) or evidences of indebtedness
or assets (excluding cash dividends or distributions paid from retained
earnings of the Corporation) or rights or warrants to subscribe for or
purchase any of its securities (excluding those referred to in Section
3(d)(ii) above), then, in each such case, the Conversion Price shall be
adjusted so that it shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date of the
distribution by a fraction, the numerator of which shall be the Current
Market Price of the Class A Common Stock on the record date mentioned below
less the then fair market value (as determined by the Board, whose
determination, if made in good faith, shall be conclusive) of that portion
of the capital stock or assets or evidences of indebtedness so distributed,
or of the rights or warrants so distributed, applicable to one share of
Class A Common Stock, and the denominator of which shall be the Current
Market Price of the Class A Common Stock on the record date. Such
adjustment shall become effective immediately, except as provided in
Section 3(d)(vii) below, after the record date for the determination of
stockholders entitled to receive such distribution. If any such
distribution is not made or if any or all of such rights or warrants expire
or terminate without having been exercised, the Conversion Price then in
effect shall be appropriately readjusted.
(iv) For the purpose of any computation under this Section
3, the "Current Market Price" of the Class A Common Stock at any date shall
be the average of the last reported sale prices per share for the 30
consecutive Trading Days (as defined below) commencing 35 Trading Days
before date of such computation. The last reported sale price for each day
shall be (1) the last reported sale price of the Class A Common Stock on
the Nasdaq National Market, or any similar system of automated
dissemination of quotations of securities prices then in common use, if so
quoted, or (2) if not quoted as described in clause (1), the closing bid
notation for the Class A Common Stock as reported by the National Quotation
Bureau Incorporated if at least two securities dealers have inserted both
bid and asked quotations for the Class A Common Stock on at least five of
the ten preceding days, or (3) if the Class A Common Stock is listed or
admitted for trading on any national securities exchange, the last sale
price, or the closing bid price if no sale occurred, of the Class A Common
Stock on the principal securities exchange on which the Class A Common
Stock is listed. If the Class A Common Stock is quoted on a national
securities or central market system, in lieu of a market or quotation
system described above, the last reported sale price shall be determined in
the manner set forth in clause (2)
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of the preceding sentence if bid and asked quotations are reported but
actual transactions are not, and in the manner set forth in clause (3) of
the preceding sentence if actual transactions are reported. If none of the
conditions set forth above is met, the last reported sale price of the
Class A Common Stock on any day or the average of such last reported sale
prices for any period shall be the fair market value of such class of stock
as determined by a member firm of the New York Stock Exchange, Inc.
selected by the Corporation. As used herein the term "Trading Days" means
(1) if the Class A Common Stock is quoted on the Nasdaq National Market or
any similar system of automated dissemination of quotations of securities
prices, days on which trades may be made on such system, or (2) if not
quoted as described in clause (1), days on which quotations are reported by
the National Quotation Bureau, Incorporated, or (3) if the Class A Common
Stock is listed or admitted for trading on any national securities
exchange, days on which such national securities exchange is open for
business.
(v) No adjustment in the Conversion Price shall be
required unless such adjustment would require a change of at least one
percent in the Conversion Price; PROVIDED, HOWEVER, that any adjustments
which by reason of this Section 3(d)(v) are not required to be made shall
be carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 3(d) shall be made to the nearest cent or
the nearest one hundredth of a share, as the case may be.
(vi) Whenever the Conversion Price is adjusted, as herein
provided, the Corporation shall promptly file with its transfer agent and
with the principal securities exchange, if any, on which the Series 1996
Preferred Stock is traded or, if traded over-the-counter, with the Nasdaq
National Market System an officers' certificate setting forth the
Conversion Price after the adjustment and setting forth a brief statement
of the facts requiring the adjustment, which certificate shall be
conclusive evidence of the correctness of the adjustment. Promptly after
delivery of the certificate, the Corporation shall prepare a notice of the
adjustment of the Conversion Price setting forth the adjusted Conversion
Price, the number of additional shares of Class A Common Stock issuable
upon conversion and the type and amount, if any, of other property which
would be received upon conversion of the Series 1996 Preferred Stock, the
facts upon which the adjustment is based and the date on which the
adjustment becomes effective and shall mail the notice of such adjustment
of the Conversion Price to the holders of the Series 1996 Preferred Stock
at their addresses as shown on the stock books of the Corporation.
(vii) In any case in which this Section 3(d) provides that
an adjustment shall become effective immediately after a record date for an
event, the Corporation may defer until the occurrence of the event (1)
issuing to the holder of any share of the Series 1996 Preferred Stock
converted after the record date and before the occurrence of the event, the
additional shares of Class A Common Stock issuable upon the conversion by
reason of the adjustment required by the event over and above the Class A
Common Stock issuable upon such conversion before giving effect to the
adjustment and (2) paying to the holder any amount in cash in lieu of any
fractional share pursuant to Section 3(c) above.
(e) (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights and all liens and
charges with respect to the issue or delivery thereof, out of the aggregate
of its authorized but unissued shares of Class A Common Stock or its issued
shares of Class A Common Stock held by its treasury, or both, for the
purpose of effective conversions of the Series 1996 Preferred Stock the
full number of shares of Class A Common Stock deliverable upon the
conversion of all outstanding shares of the Series 1996 Preferred Stock not
theretofore converted. For purposes of this Section 3(e), the number of
shares of Class A Common Stock which shall be deliverable upon the
conversion of all outstanding shares of the Series 1996 Preferred Stock
shall be computed as if at the time of computation all of the outstanding
shares were held by a single holder.
(ii) Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par value (if any)
of the shares of Class A Common Stock deliverable upon conversion of the
Series 1996 Preferred Stock, the Corporation will take any corporate action
which may, in the opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and nonassessable
shares of Class A Common Stock at the adjusted Conversion Price.
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(f) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery
of shares of Class A Common Stock or other securities on conversion of the
Series 1996 Preferred Stock pursuant hereto; PROVIDED, HOWEVER, that the
Corporation shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of shares of
Class A Common Stock or other securities in a name other than that of the
holder of the Series 1996 Preferred Stock to be converted and no such issue
or delivery shall be made unless and until the person requesting the issue
or delivery has paid to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation, that the tax has been
paid.
(g) In case of any reclassification or similar change of
outstanding shares of Class A Common Stock (other than a change in par
value, or as a result of a subdivision or combination), or in case of any
consolidation of the Corporation with, or merger of the Corporation with or
into, any other entity that results in a reclassification, change,
conversion, exchange or cancellation of outstanding shares of Class A
Common Stock or any sale or transfer of all or substantially all of the
assets of the Corporation, each holder of shares of the Series 1996
Preferred Stock then outstanding shall have the right thereafter to convert
the shares of the Series 1996 Preferred Stock held by the holder into the
kind and amount of securities, cash and other property which the holder
would have been entitled to receive upon such reclassification, change,
consolidation, merger, sale or transfer if the holder had held the Class A
Common Stock issuable upon the conversion of the shares of the Series 1996
Preferred Stock immediately prior to the reclassification, change,
consolidation, merger, sale or transfer and had such holder elected to
receive the consideration in the form and manner elected by the plurality
of the persons entitled to vote thereon. These provisions shall apply to
successive reclassifications, changes, consolidations, mergers, sales or
conveyances.
4. PREEMPTIVE RIGHTS. Shares of the Series 1996 Preferred Stock are not
entitled to any preemptive rights to acquire any unissued shares of any
capital stock of the Corporation, now or hereafter authorized, or any other
securities of the Corporation, whether or not convertible into shares of
capital stock of the Corporation or carrying a right to subscribe to or
acquire any such shares of capital stock. To the extent preemptive rights
are granted by the Corporation to the Parity Stock, the Junior Stock or the
Class A Common Stock, the Series 1996 Preferred Stock shall be entitled to
similar rights.
5. VOTING. Except as required by law, the shares of the Series 1996
Preferred Stock shall not have any voting powers, either general or
special, except as follows:
(a) Unless the vote or consent of the holders of a greater number
of shares is required by law, the approval of the holders of at least
66-2/3% of all of the shares of the Series 1996 Preferred Stock at the time
outstanding given in person or by proxy, either in writing or by a vote at
a meeting called for that purpose, on which matter the holders of shares of
the Series 1996 Preferred Stock shall vote together as a separate class,
shall be necessary to (i) authorize, effect or validate any amendment,
alteration or repeal of or otherwise change any of the provisions of the
Articles of Incorporation of the Corporation or of any certificate,
amendatory or supplemental thereto, which amendment, alteration or repeal
would, if effected, materially and adversely affect the powers,
preferences, rights or privileges of the Series 1996 Preferred Stock or
(ii) create, authorize, issue or increase the authorized or issued amount
of any class or series of any equity securities of the Corporation, or any
warrants, options or other rights convertible or exchangeable into any
class or series of any equity securities of the Corporation, ranking senior
to the Series 1996 Preferred Stock either as to payment of dividends or
rights upon liquidation, winding-up or dissolution of the Corporation.
(b) Notwithstanding anything to the contrary set forth herein, the
creation or issuance of Parity Stock or Junior Stock with respect to the
payment of dividends or distribution of assets upon liquidation or an
amendment that increases the number of authorized shares of Series 1996
Preferred Stock or increases the number of authorized shares of a series of
Preferred Stock constituting Junior Stock or Parity Stock shall not be
considered to be a material and adverse change to the terms of the Series
1996 Preferred Stock and shall not require a vote or the consent of the
holders of the Series 1996 Preferred Stock pursuant to Section 5(a) above.
Amendments considered to be an adverse change requiring a vote of the
holders of Series 1996 Preferred Stock pursuant to Section 5(a) above shall
include, but not be limited to, those: which reduce the dividend rate on
the Series 1996 Preferred Stock, cancel declared and unpaid dividends or
change the relative
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seniority rights of the holders of the Series 1996 Preferred Stock as to
the payment of dividends in relation to the holders of any other capital
stock of the Corporation; which reduce the amount payable to the holders of
Series 1996 Preferred Stock upon liquidation or change the relative
seniority of the liquidation preferences of the holders of the Series 1996
Preferred Stock to the rights upon liquidation of the holders of any other
capital stock of the Corporation; or which cancel or modify the conversion
rights of the Series 1996 Preferred Stock.
(c) The holders of Series 1996 Preferred Stock, if any Series 1996
Preferred Stock shall be outstanding, shall be entitled to vote with the
holders of the shares of Class A Common Stock, and not as a separate class,
to the same extent as the holders of the shares of Class A Common Stock on
any consolidation, merger, sale of all or substantially all of the assets
of the Corporation, reclassification, capital reorganization or
liquidation; PROVIDED that each share of Series 1996 Preferred Stock shall
be entitled to the same number of votes that the holder would have had if
such holder had converted his shares of Series 1996 Preferred Stock into
shares of Class A Common Stock as of the record date for such meeting or
solicitation of consents in lieu of a meeting.
6. LIQUIDATION RIGHTS.
(a) Upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the holders of the shares of the Series 1996
Preferred Stock shall be entitled to receive out of the assets of the
Corporation available for distribution to stockholders under applicable
law, before any payment or distribution of assets shall be made on the
Class A Common Stock or on any other class or series of capital stock of
the Corporation ranking junior to the Series 1996 Preferred Stock upon
liquidation and subject to the rights of the holders of any class or series
of stock having preference with respect to distributions upon liquidation
(created pursuant to Section 5(a) above) and the Corporation's general
creditors, the amount of $15.00 per share (the "Liquidation Preference"),
plus an amount equal to all dividends declared and unpaid, without
interest. The sale, conveyance, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of
the property and assets of the Corporation shall not be deemed a
dissolution, liquidation or winding up of the Corporation for the purposes
of this Section 6, nor shall the merger or consolidation of the Corporation
into or with any other corporation or association or the merger or
consolidation of any other corporation or association into or with the
Corporation, be deemed to be a dissolution, liquidation or winding up of
the Corporation for the purposes of this Section 6; PROVIDED, HOWEVER, that
if the aggregate amount of cash that may be received in exchange for or
upon conversion of the Series 1996 Preferred Stock in connection with a
cash merger or other cash transaction would be less than the aggregate
liquidation preference of the Series 1996 Preferred Stock, then the holders
of the Series 1996 Preferred Stock shall be entitled to the Liquidation
Preference in place of the aggregate amount of cash that may be received in
exchange for or upon conversion of the Series 1996 Preferred Stock in
connection with the cash merger or other cash transaction; and PROVIDED
FURTHER, that such cash merger or transaction shall not be considered a
liquidation, dissolution or winding up of the Corporation subject otherwise
to this Section 6(a).
(b) After the payment in cash (in New York Clearing House funds or
its equivalent) to the holders of the shares of the Series 1996 Preferred
Stock of the full preferential amounts for the shares of the Series 1996
Preferred Stock, as set forth in Section 6(a) above, the holders of the
Series 1996 Preferred Stock as such shall have no further right or claim to
any of the remaining assets of the Corporation.
(c) In the event the assets of the Corporation available for
distribution to the holders of shares of the Series 1996 Preferred Stock
upon any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation shall be insufficient to pay in full all amounts to which
such holders are entitled pursuant to Section 6(a) above, no distribution
shall be made on account of any shares of any other series of Preferred
Stock or any other class of capital stock of the Corporation ranking on a
parity with the shares of the Series 1996 Preferred Stock upon such
liquidation, dissolution or winding up unless proportionate amounts shall
be paid on account of the shares of the Series 1996 Preferred Stock,
ratably, in proportion to the full amounts to which holders of all such
shares which are on a parity with the shares of the Series 1996 Preferred
Stock are respectively entitled upon such dissolution, liquidation or
winding up.
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(d) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the Corporation shall, within
10 days after the date the Board of Directors approves such action, at
least 20 days prior to any shareholders' meeting called to approve such
action or within 20 days after the commencement of any involuntary
proceeding, whichever is earliest, give each holder of the Series 1996
Preferred Stock written notice of the proposed action. Such written notice
shall describe the material terms and conditions of the proposed action.
The Corporation shall not consummate any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation before the
expiration of 30 days after the mailing of such written notice; PROVIDED,
that any such 30 day period may be shortened upon the written consent of
the holders of all of the outstanding shares of the Series 1996 Preferred
Stock.
(e) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation that will involve the
distribution of assets other than cash, the Corporation shall promptly
engage competent independent appraisers to determine the value of the
assets to be distributed to the holders of shares of the Series 1996
Preferred Stock and the holders of Class A Common Stock. The Corporation
shall, upon receipt of such appraiser's valuation, give prompt written
notice to each holder of shares of the Series 1996 Preferred Stock of the
appraiser's valuation.
7. RANK. The Series 1996 Preferred Stock shall rank, with respect to
classes and series of capital stock of the Corporation outstanding as of
the date of the filing of this resolution with the Florida Department of
State, on a parity with the 8% Noncumulative Convertible Preferred Stock,
Series 1993 and the 9% Noncumulative Perpetual Preferred Stock and senior
to the Class A Common Stock, the Class B Common Stock, the Noncumulative
Convertible Preferred Stock, Series B, the Noncumulative Convertible
Preferred Stock, Series C and the Noncumulative Convertible Preferred
Stock, Series C-II of the Corporation as to payment of dividends and rights
upon liquidation, dissolution or winding up of the Corporation. Unless the
Corporation shall have obtained the consent of the holders as provided in
Section 5 above, the Corporation shall not issue any other series of
Preferred Stock ranking senior to the Series 1996 Preferred Stock as to the
payment of dividends or rights upon liquidation, dissolution or winding up
of the Corporation or any other series of any equity securities ranking
senior to the Series 1996 Preferred Stock as to the payment of dividends or
rights upon liquidation, dissolution or winding up of the Corporation. The
Corporation may issue shares of Preferred Stock or other capital stock
ranking junior to or on a parity with the Series 1996 Preferred Stock as to
the payment of dividends or rights upon liquidation, dissolution or winding
up of the Corporation. For purposes of this statement of designation, any
capital stock of any series or class of the Corporation shall be deemed to
rank:
(a) senior to the shares of the Series 1996 Preferred Stock, as to
dividends or upon liquidation, if the holders of such series or class shall
be entitled to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the Corporation, as the case may
be, in preference or priority to the holders of the shares of the Series
1996 Preferred Stock;
(b) on a parity with shares of the Series 1996 Preferred Stock, as
to dividends or upon liquidation, whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share or
sinking fund provisions, if any, be different from those of the Series 1996
Preferred Stock, if the holders of such stock shall be entitled to the
receipt of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be, in
proportion to their respective dividend rates or liquidation prices,
without preferences or priority, one over the other, as between the holders
of such stock and the holders of shares of the Series 1996 Preferred Stock;
and
(c) junior to shares of the Series 1996 Preferred Stock, as to
dividends or upon liquidation, if the holders of shares of the Series 1996
Preferred Stock shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the holders
of shares of such series or class.
H-9
<PAGE>
8. NOTICE OF CERTAIN EVENTS. If:
(a) the Corporation shall declare a dividend (other than a cash
dividend) or distribution on its Class A Common Stock or any Junior Stock;
or
(b) the Corporation shall authorize the issuance to the holders of
the Class A Common Stock or any Junior Stock of rights or warrants to
subscribe for or purchase any shares of Class A Common Stock or of any
other subscription rights or warrants; or
(c) there shall be any reclassification of the Class A Common
Stock or any consolidation or merger, to which the Corporation is a party,
or any sale or transfer of all or substantially all the assets of the
Corporation; or
(d) there shall be a voluntary or an involuntary dissolution,
liquidation or winding up of the Corporation; or
(e) there shall be a redemption of the Series 1996 Preferred
Stock, in whole or in part, pursuant to Section 2 above;
then the Corporation shall cause to be filed with the transfer agent, if
any, and shall cause to be mailed to the holders of shares of the Series
1996 Preferred Stock at their addresses as shown on the stock books of the
Corporation, except as otherwise provided in Section 2(c) above or Section
6(d) above, at least 10 days prior to the applicable date hereinafter
specified, a notice stating (1) the date on which a record is to be taken
for the purpose of the dividend, distribution or rights or warrants, or, if
a record is not to be taken, the date as of which the holders of Class A
Common Stock of record to be entitled to the dividend, distribution or
rights or warrants are to be determined, (2) the date on which the
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as
of which it is expected that holders of Class A Common Stock of record
shall be entitled to exchange their shares of Class A Common Stock for
cash, securities or other property deliverable upon the reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding
up or (iii) the Redemption Date and redemption price pursuant to Section 2
above. Failure to give any such notice or any defect in the notice shall
not affect the legality or validity of the proceedings described in this
Section 8.
9. REPORTS AND NOTICES. So long as any shares of the Series 1996 Preferred
Stock shall be outstanding, the Corporation shall provide to the holder or
holders of such shares copies of all annual, quarterly and other reports of
the Corporation and copies of all stockholder notices of the Corporation
when and as furnished to the holders of the Class A Common Stock.
H-10
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BANK UNITED, FSB FOR THE THREE MONTHS ENDED DECEMBER 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 26,153
<INT-BEARING-DEPOSITS> 38,297
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 259,051
<INVESTMENTS-CARRYING> 185,587
<INVESTMENTS-MARKET> 183,615
<LOANS> 3,154,181
<ALLOWANCE> 6,954
<TOTAL-ASSETS> 3,832,377
<DEPOSITS> 2,301,162
<SHORT-TERM> 256,980
<LIABILITIES-OTHER> 40,441
<LONG-TERM> 1,034,947
0
9
<COMMON> 182
<OTHER-SE> 198,656
<TOTAL-LIABILITIES-AND-EQUITY> 3,832,377
<INTEREST-LOAN> 50,837
<INTEREST-INVEST> 7,308
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 58,145
<INTEREST-DEPOSIT> 27,666
<INTEREST-EXPENSE> 48,056
<INTEREST-INCOME-NET> 10,089
<LOAN-LOSSES> 400
<SECURITIES-GAINS> (9)
<EXPENSE-OTHER> 10,222
<INCOME-PRETAX> 760
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 760
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
<YIELD-ACTUAL> 1.02
<LOANS-NON> 17,770
<LOANS-PAST> 2,762
<LOANS-TROUBLED> 1,133
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 6,128
<CHARGE-OFFS> 101
<RECOVERIES> 167
<ALLOWANCE-CLOSE> 6,594
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
