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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Laboratory Corporation of America Holdings
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3757370
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(State of Incorporation or Organization) (I.R.S.
Employer
Identification
no.)
358 South Main Street
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Burlington, North Carolina 27215
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(Address of Principal Executive Offices) (Zip Code)
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If this form relates to the registration
of a class of debt securities and is
effective upon filing pursuant to
General Instruction A(c)(1) please check
the following box. [ ]
If this form relates to the registration
of a class of debt securities and is to
become effective simultaneously with the
effectiveness of a concurrent
registration statement under the
Securities Act of 1933 pursuant to
General Instruction A(c)(2) please check
the following box. [ ]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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8 1/2% Series A Convertible New York Stock Exchange
Exchangeable Preferred Stock
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
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Item 1. Description of Registrant's Securities to be Registered
For a full description of the 8 1/2% Series A Convertible Exchangeable
Preferred Stock (the "Series A Exchangeable Preferred Stock") reference is
made to the information contained under the heading "Description of Preferred
Stock" contained in the registrant's Registration Statement on Form S-3 as
originally filed with the Securities and Exchange Commission on February 27,
1997, as amended (Registration No. 333-22427). Such information is
incorporated herein by reference.
Item 2. Exhibits
1 Form of Certificate of Designation with respect to the Series A
Exchangeable Preferred Stock.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
Laboratory Corporation of America Holdings
(Registrant)
Date: June 13, 1997 By: /s/ Wesley R. Elingburg
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(Signature)
Wesley R. Elingburg
Executive Vice President, Chief
Financial Officer and Treasurer
EXHIBIT 1
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF
LABORATORY CORPORATION OF AMERICA HOLDINGS
8 1/2% SERIES A CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
(Par Value $0.10 Per Share)
Pursuant to Section 151(g) of the
General Corporation Law of the
State of Delaware
[ ], 1997
TABLE OF CONTENTS
Page
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Section 1. Designation.................................. 1
Section 2. Ranking...................................... 1
Section 3. Dividends.................................... 2
Section 4. Mandatory Redemption......................... 5
Section 5. Optional Redemption.......................... 5
Section 6. Exchangeability.............................. 6
Section 7. Procedure for Redemption or Exchange......... 6
Section 8. Convertibility............................... 8
Section 9. Liquidation Rights........................... 19
Section 10. Voting Rights................................ 19
Section 11. Registration, Transfer and Exchanges......... 22
Section 12. Definitions.................................. 23
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF
8 1/2% SERIES A CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
OF
LABORATORY CORPORATION OF AMERICA HOLDINGS
The undersigned, Wesley R. Elingburg and Bradford T. Smith,
being respectively an Executive Vice President and the Secretary of Laboratory
Corporation of America Holdings, a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"),
certify that, pursuant to the authority expressly granted to and vested in the
Board of Directors of the Corporation (the "Board of Directors") by the
Certificate of Incorporation of the Corporation (the "Certificate of
Incorporation"), which authorizes the issuance, by the Corporation, of up to
10,000,000 shares of preferred stock, par value $0.10 per share (the
"Preferred Stock"), the Board of Directors in accordance with the provisions
of Section 151 of the General Corporation Law of the State of Delaware on May
19, 1997 duly adopted the following resolutions:
RESOLVED, that pursuant to Article Fourth of the Certificate of
Incorporation of the Corporation and in accordance with the provisions of
Sections 141 and 151 of the General Corporation Law of the State of Delaware,
the Board of Directors hereby creates and provides for the issuance of a
series of Preferred Stock, par value $0.10 per share and with a liquidation
preference of $50.00 per share, of the Corporation and hereby fixes the
number, voting powers, designation, preferences, and relative, participating,
optional or other special rights and such qualifications, limitations or
restrictions thereof, and other matters relating to, said series as follows:
Section 1. Designation. [ ] shares of the Preferred Stock
of the Corporation are hereby constituted as a series of Preferred Stock, par
value $0.10 per share, with a liquidation preference of $50.00 per share,
designated as "8 1/2% Series A Convertible Exchangeable Preferred Stock" (the
"Series A Exchangeable Preferred Stock").
Section 2. Ranking. The Series A Exchangeable Preferred Stock
will have priority as to dividends over the common stock, par value $0.01 per
share, of the Corporation ("Common Stock") and any other series or class of
the Corporation's stock issued after the date hereof that by its terms ranks
junior as to dividends to the Series A Exchangeable Preferred Stock, when and
if issued ("Junior Dividend Stock") and priority as to distributions of assets
upon liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, over the Common Stock and any series or class of the
Corporation's stock issued after the date hereof that by its terms ranks
junior as to liquidation, dissolution and winding up to the Series A
Exchangeable Preferred Stock, when and if issued ("Junior Liquidation Stock")
(the Common Stock and any other capital stock of the Corporation that is both
Junior Dividend Stock and Junior Liquidation Stock, "Junior Stock"). The
Series A Exchangeable Preferred Stock will be junior as to dividends to any
series or class of the Corporation's stock issued after the date hereof that
by its terms ranks senior as to dividends to the Series A Exchangeable
Preferred Stock, when and if issued ("Senior Dividend Stock") and junior as to
distributions of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, to any series or class of the
Corporation's stock issued after the date hereof that by its terms ranks
senior as to liquidation, dissolution and winding up to the Series A
Exchangeable Preferred Stock, when and if issued ("Senior Liquidation Stock"
and collectively with the Senior Dividend Stock, "Senior Stock"). The Series
A Exchangeable Preferred Stock will have parity as to dividends with the 8
1/2% Series B Convertible Pay-in-Kind Preferred Stock, par value $0.10 per
share (the "Series B PIK Preferred Stock") and any series or class of the
Corporation's stock issued after the date hereof that by its terms ranks on a
parity as to dividends with the Series A Exchangeable Preferred Stock, when
and if issued ("Parity Dividend Stock") and parity as to distributions of
assets upon liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, with the Series B PIK Preferred Stock and any series
or class of the Corporation's stock issued after the date hereof that by its
terms ranks on a parity as to liquidation, dissolution and winding up with the
Series A Exchangeable Preferred Stock, when and if issued ("Parity Liquidation
Stock") (the Series B PIK Preferred Stock, the Parity Dividend Stock and the
Parity Liquidation Stock, collectively, "Parity Stock"). The Series A
Exchangeable Preferred Stock shall be subject to the creation of Junior Stock.
The Series A Exchangeable Preferred Stock shall be subject to the creation of
Parity Stock and Senior Stock only if the provisions of Section 10(d)(ii) have
been complied with. The respective definitions of Senior Dividend Stock,
Senior Liquidation Stock, Junior Dividend Stock, Junior Liquidation Stock,
Parity Dividend Stock and Parity Liquidation Stock shall also include any
warrants, rights, calls or options, exercisable for or convertible into any of
the Senior Dividend Stock, Senior Liquidation Stock, Junior Dividend Stock,
Junior Liquidation Stock, Parity Dividend Stock and Parity Liquidation Stock,
as the case may be.
Section 3. Dividends. (a) Each holder of a share of Series A
Exchangeable 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 therefor, dividends at an annual rate of 8 1/2% of the Liquidation
Preference (as defined herein) of the Series A Exchangeable Preferred Stock,
or $4.25 per share of Series A Exchangeable Preferred Stock payable in cash.
Such dividend shall be cumulative and shall accrue (whether or not earned or
declared, whether or not there are funds legally available for the payment
thereof and whether or not restricted by the terms of any of the Corporation's
indebtedness outstanding at any time) from the date such shares are issued by
the Corporation and shall be payable quarterly in arrears on March 31, June
30, September 30 and December 31 of each year (each a "Dividend Payment Date")
commencing, September 30, 1997. No interest will be payable in respect of any
dividend payment on the Series A Exchangeable Preferred Stock which may be in
arrears.
(b) The dividend payment period for any dividend payable on a
Dividend Payment Date shall be the period beginning on the immediately
preceding Dividend Payment Date (or on the issue date in the case of the first
dividend payment period) and ending on the day preceding such later Dividend
Payment Date. If any date on which a payment of a dividend or any other
amount is due in respect of Series A Exchangeable Preferred Stock is not a
Business Day, such payment shall be made on the next day that is a Business
Day.
(c) The amount of dividends payable per share of Series A
Exchangeable Preferred Stock for each dividend payment period will be computed
by dividing the annual dividend amount by four; provided, however, that the
amount of dividends payable for the first dividend payment period and for any
dividend payment period shorter than a full quarterly dividend period will be
computed on the basis of a 360-day year of twelve 30-day months.
(d) Dividends payable on any Dividend Payment Date shall be
payable to the holders of record of the Series A Exchangeable Preferred Stock
as they appear on the stock transfer books of the Corporation at the close of
business on such record dates as are fixed by the Board of Directors (provided
that no record date shall be later than (a) the sixth Business Day prior to the
date fixed for any redemption of the Series A Exchangeable Preferred Stock or,
(b) in the case of the dividend payment date occurring on June 30, 2000, the
tenth Business Day prior to such date). Dividends paid on the shares of
Series A Exchangeable Preferred Stock in an amount less than accumulated and
unpaid cash dividends payable therein shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
(e) If at any time the Corporation shall have failed to pay all
dividends which have accrued on any outstanding shares of Senior Dividend
Stock at the times such dividends are payable, unless otherwise provided in the
terms of the Senior Dividend Stock, no dividend shall be declared by the Board
of Directors or paid or set apart for payment by the Corporation on shares of
the Series A Exchangeable Preferred Stock unless prior to or concurrently with
such declaration, payment or setting apart for payment, all accrued and unpaid
dividends on all outstanding shares of such Senior Dividend Stock shall have
been or be declared, paid or set apart for payment.
(f) No dividends (other than dividends payable solely in Junior
Stock) shall be paid or declared and set apart for payment on any Junior
Dividend Stock, and no payment shall be made on account of the purchase,
redemption, retirement, or other acquisition of Junior Dividend Stock or
Junior Liquidation Stock (other than such acquisitions pursuant to employee or
director incentive or benefit plans or arrangements, or in exchange solely for
Junior Stock), unless all accrued and unpaid dividends on the Series A
Exchangeable Preferred Stock for all dividend payment periods ending on or
before the date of payment of such dividends on Junior Dividend Stock, or such
payment for such Junior Dividend Stock or Junior Liquidation Stock, shall have
been paid or declared and set apart for payment.
(g) Except as set forth in the second following sentence, no
dividends shall be paid or declared and set apart for payment on the Series A
Exchangeable Preferred Stock unless all accrued and unpaid dividends for all
dividend payment periods through such Dividend Payment Date on any Parity
Dividend Stock, including the Series B PIK Preferred Stock, have been paid or
declared and set apart for payment or are contemporaneously paid or declared
and set apart for payment. Except as set forth in the following sentence, no
dividends shall be paid or declared and set apart for payment on any Parity
Dividend Stock, including the Series B PIK Preferred Stock, unless all accrued
and unpaid dividends for all dividend payment periods through such Dividend
Payment Date on the Series A Exchangeable Preferred Stock have been paid or
declared and set apart for payment or are contemporaneously paid or declared
and set apart for payment. Whenever all accrued and unpaid dividends have not
been paid upon the Series A Exchangeable Preferred Stock or any other Parity
Dividend Stock, including the Series B PIK Preferred Stock, for all dividend
payment periods through such Dividend Payment Date, all dividends paid or
declared and set apart for payment on the Series A Exchangeable Preferred
Stock or any other Parity Dividend Stock, including the Series B PIK Preferred
Stock, shall be paid or declared pro rata so that the amount of dividends
declared and paid per share on the Series A Exchangeable Preferred Stock and
such Parity Dividend Stock will bear to each other the same ratio that the
accrued and unpaid dividends to the date of payment, on the Series A
Exchangeable Preferred Stock and such Parity Dividend Stock, including the
Series B PIK Preferred Stock, bear to each other.
(h) No payment shall be made on account of the purchase,
redemption, retirement or other acquisition of Parity Stock, including the
Series B PIK Preferred Stock (other than such acquisitions pursuant to
employee or director or incentive or benefit plans or arrangements, or in
exchange solely for Junior Stock) unless all accrued and unpaid dividends on
the Series A Exchangeable Preferred Stock for all dividend payment periods
ending on or before such payment for such Parity Stock, including the Series
B PIK Preferred Stock, shall have been paid or declared and set apart for
payment.
Section 4. Mandatory Redemption. All outstanding shares of
the Series A Exchangeable Preferred Stock shall be mandatorily redeemed by the
Corporation out of funds legally available therefor on June 30, 2012, at a
redemption price of $50.00 per share plus an amount equal to all accrued and
unpaid dividends, whether or not declared.
Section 5. Optional Redemption. (a) The shares of Series A
Exchangeable Preferred Stock may be redeemed by the Corporation, at its
option, in whole or in part out of funds legally available therefor at any time
on or after July 7, 2000 and if redeemed during the 12-month period beginning
July 7 of the years indicated below, the cash redemption price per share shall
be as set forth below plus, in each case, accrued and unpaid dividends thereon
to the date of redemption (the "Optional Redemption Price"):
Year Optional Redemption Price
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2000............................ $52.83
2001............................ 52.36
2002............................ 51.89
2003............................ 51.42
2004............................ 50.95
2005............................ 50.47
2006 and thereafter............. 50.00
(b) If fewer than all the outstanding shares of Series A
Exchangeable Preferred Stock are to be redeemed pursuant to this Section 5,
the Corporation will select those shares to be redeemed pro rata or by lot or
in such other manner as the Board of Directors may determine to be fair and
reasonable; provided, however, that if at any time dividends on the Series A
Exchangeable Preferred Stock are in arrears, the Corporation may not redeem
less than all of the then outstanding shares of Series A Exchangeable
Preferred Stock.
(c) No fractional shares of Series A Exchangeable Preferred Stock
will be issued upon a redemption of less than all of the Series A Exchangeable
Preferred Stock pursuant to this Section 5, but in lieu thereof, an appropriate
amount will be paid in cash based on the Closing Price for the Series A
Exchangeable Preferred Stock on the date of such redemption.
Section 6. Exchangeability. The Series A Exchangeable
Preferred Stock shall be exchangeable, in whole but not in part, at the option
of the Corporation, for the Corporation's 8 1/2% Convertible Subordinated
Notes due 2012 (the "Notes") on any March 31, June 30, September 30 or
December 31, on or after June 30, 2000 (a "Notes Exchange Date") provided (i)
the conditions to such exchange contained in the Indenture relating to the
Notes have been satisfied or waived and (ii) such exchange is permitted
pursuant to applicable law. Each share of Series A Exchangeable Preferred
Stock will be exchangeable for Notes at the rate of $50 principal amount of
Notes for each share of Series A Exchangeable Preferred Stock. No shares of
Series A Exchangeable Preferred Stock may be exchanged for Notes unless the
Corporation has paid or set aside for the benefit of the holders of the Series
A Exchangeable Preferred Stock all accrued and unpaid dividends on the Series
A Exchangeable Preferred Stock to the Notes Exchange Date.
Section 7. Procedure for Redemption or Exchange. (a) In the
event of redemption of the Series A Exchangeable Preferred Stock pursuant to
Section 4, or an offer by the Corporation to redeem any shares of Series A
Exchangeable Preferred Stock pursuant to Section 5 or exchange shares of
Series A Exchangeable Preferred Stock for Notes pursuant to Section 6, notice
of such redemption, offer to redeem or exchange shall be given by hand or by
nationally recognized "overnight courier" for delivery at the earliest time
offered by such overnight courier (which may not necessarily be the next day)
to each holder of record of the shares to be redeemed or exchanged at such
holder's address as the same appears on the stock transfer books of the
Corporation at least 30 but not more than 60 days before the date fixed for
redemption or the Notes Exchange Date, as the case may be, provided, however,
that no failure to give such notice nor any defect therein shall affect the
validity of the redemption or exchange of any share of Series A Exchangeable
Preferred Stock to be redeemed or exchanged except as to the holder to whom
the Corporation has failed to give said notice or except as to the holder
whose notice was defective. Each such notice shall state: (i) the redemption
date or Notes Exchange Date; (ii) the number of shares of Series A
Exchangeable Preferred Stock to be redeemed or exchanged and, if less than all
the shares held by such holder are to be redeemed or exchanged, the number of
shares to be redeemed or exchanged from such holder; (iii) the Optional
Redemption Price, if applicable, or rate of exchange; (iv) the place or places
where certificates for such shares are to be surrendered for payment of the
redemption price or exchange for the Notes; (v) the specific provision hereof
pursuant to which such redemption or exchange is to be made; and (vi) that
dividends on the shares to be redeemed or exchanged will cease to accrue on
such redemption date or Notes Exchange Date. Each such notice shall be
effective upon delivery if given by hand or upon deposit with a nationally
recognized overnight courier if given by such a courier. Upon giving any
notice of a redemption pursuant to Section 5(a) or notice of exchange pursuant
to Section 6, the Corporation shall become obligated to redeem or exchange the
shares of Series A Exchangeable Preferred Stock specified in such notice on
the redemption date or Notes Exchange Date, as the case may be, specified in
such notice.
(b) Notice having been given as aforesaid, from and after the
redemption date or the Notes Exchange Date (unless, in the case of
redemptions, default shall be made by the Corporation in providing money for
the payment of the redemption price of the shares called for redemption or, in
the case of an exchange, the Corporation defaults in issuing Notes or fails to
pay or set aside for payment accrued and unpaid dividends on the Series A
Exchangeable Preferred Stock to the Notes Exchange Date), dividends on the
shares of Series A Exchangeable Preferred Stock called for redemption or
exchange shall cease to accrue, and such shares shall no longer be deemed to
be outstanding and shall have the status of authorized but unissued shares of
Series A Exchangeable Preferred Stock, unclassified as to series, and shall not
be reissued as shares of Series A Exchangeable Preferred Stock, and all rights
of the holders thereof as stockholders of the Corporation (except the right to
receive from the Corporation the redemption price without interest or the
Notes and accrued and unpaid dividends on the Series A Exchangeable Preferred
Stock to the Notes Exchange Date) shall cease. Upon surrender in accordance
with said notice of the certificates for any shares so redeemed or exchanged
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such share shall
be redeemed or exchanged by the Corporation at the redemption price or rate of
exchange aforesaid; provided, however, in the case of a redemption pursuant to
Section 5(a) if fewer than all the shares represented by any such certificate
are to be redeemed, upon surrender of such certificate a new certificate shall
be issued representing the unredeemed shares without cost to the holder
thereof.
(c) The Corporation will pay any and all issuance and delivery
taxes that may be payable in respect of the issuance or delivery of Notes in
exchange for shares of Series A Exchangeable Preferred Stock. The Corporation
shall not, however, be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of Notes in a name other
than that in which the shares of Series A Exchangeable Preferred Stock so
exchanged were registered, and no such issuance or delivery shall be made
unless and until the person requesting such issuance has paid to the
Corporation the amount of any such tax or has established to the satisfaction
of the Corporation that such tax has been paid.
(d) If a notice of redemption shall have been given, and if, prior
to the redemption date, the Corporation shall have irrevocably deposited the
aggregate redemption price of the shares of Series A Exchangeable Preferred
Stock to be redeemed in trust for the pro rata benefit of the holders of the
shares of Series A Exchangeable Preferred Stock to be redeemed, so as to be
and to continue to be available therefor, with a bank or trust company that (i)
is organized under the laws of the United States of America or any state
thereof, (ii) has capital and surplus of not less than $250,000,000 and (iii)
has, or, if it has no publicly traded debt securities rated by a nationally
recognized rating agency, is the subsidiary of a bank holding company that
has, publicly traded debt securities rated at least "A" or the equivalent
thereof by Standard & Poor's Corporation or "A-2" or the equivalent by Moody's
Investor Service Inc., then upon making such deposit, all rights of holders of
the shares so called for redemption shall cease, except (i) conversion rights
pursuant to Section 8 hereof, (ii) as otherwise set forth herein and (iii) the
right of holders of such shares to receive the redemption price against
delivery of such shares, but without interest, and such shares shall cease to
be outstanding. Any funds so deposited that are unclaimed by holders of
shares at the end of three years from such redemption date shall be repaid to
the Corporation upon its request, after which repayment the holders of shares
of Series A Exchangeable Preferred Stock so called for redemption shall
thereafter be entitled to look only to the Corporation for payment of the
redemption price.
Section 8. Convertibility. (a) Holders of shares of Series A
Exchangeable Preferred Stock will have the right at any time on or after
September 30, 1997, at the holder's option, to convert any or all shares into
fully paid and nonassessable shares of Common Stock at the conversion rate
(subject to adjustment as described below) of 18.1818 shares of Common Stock
for each share of Series A Exchangeable Preferred Stock. If the Series A
Exchangeable Preferred Stock is called for redemption, the conversion right
will terminate at 5:00 p.m. New York City time on the Business Day prior to
the date fixed for such redemption and if not exercised prior to such time,
such conversion right will be lost, unless the Corporation defaults in making
the payment due upon redemption. Following conversion, the holder will no
longer have any right to payment of dividends on the shares of Series A
Exchangeable Preferred Stock surrendered for conversion.
(b) Any holder of shares of Series A Exchangeable Preferred Stock
desiring to convert such shares into Common Stock shall surrender the
certificate or certificates evidencing such shares of Series A Exchangeable
Preferred Stock at the office of the transfer agent for the Series A
Exchangeable Preferred Stock, which certificate or certificates, if the
Corporation shall so require, shall be duly endorsed to the Corporation or in
blank, or accompanied by proper instruments of transfer to the Corporation or
in blank, accompanied by irrevocable written notice to the Corporation that the
holder elects so to convert such shares of Series A Exchangeable Preferred
Stock and specifying the name or names (with address or addresses) in which a
certificate or certificates evidencing shares of Common Stock are to be
issued.
No payments or adjustments in respect of dividends on shares of
Series A Exchangeable Preferred Stock surrendered for conversion or on account
of any dividend on the Common Stock issued upon conversion shall be made upon
the conversion of any shares of Series A Exchangeable Preferred Stock;
provided, however, that:
(i) if a dividend record date fixed for the Series
A Exchangeable Preferred Stock as established herein results in a
holder who undertakes conversion being eligible to receive on any
Dividend Payment Date both a dividend on the Series A Exchangeable
Preferred Stock and a dividend on the Common Stock issued upon
conversion thereof, then such holder shall be entitled to receive
only the higher of such dividend amounts; and
(ii) if the Corporation shall, by dividend or
otherwise, declare or make a distribution on its Common Stock
referred to in Section 8(c)(iv) or 8(c)(v) (including, without
limitation, dividends or distributions referred to in the last
sentence of Section 8(c)(iv)), the holder of each share of Series A
Exchangeable Preferred Stock, upon the conversion thereof
subsequent to the close of business on the date fixed for the
determination of shareholders entitled to receive such dividend or
distribution and prior to the effectiveness of the conversion price
adjustment in respect of such dividend or distribution, shall also
be entitled to receive for each share of Common Stock into which
such share of Series A Exchangeable Preferred Stock is converted,
the portion of the shares of Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash and assets
so distributed applicable to one share of Common Stock; provided,
however, that at the election of the Corporation (whose election
shall be evidenced by a resolution of the Board of Directors) with
respect to all holders so converting, the Corporation may, in lieu
of distributing to such holder any portion of such distribution not
consisting of cash or securities of the Corporation, pay such
holder an amount in cash equal to the fair market value thereof (as
determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of
the Board of Directors).
The Corporation shall, as soon as practicable after such
deposit of certificates evidencing shares of Series A Exchangeable Preferred
Stock accompanied by the written notice and compliance with any other
conditions herein contained, deliver at the office of such transfer agent to
the person for whose account such shares of Series A Exchangeable Preferred
Stock were so surrendered, or to the nominee or nominees of such person,
certificates evidencing the number of full shares of Common Stock to which
such person shall be entitled as aforesaid, together with a cash adjustment in
respect of any fraction of a share of Common Stock as hereinafter provided.
Such conversion shall be deemed to have been made as of the date of such
surrender of the shares of Series A Exchangeable Preferred Stock to be
converted, and the person or persons entitled to receive the Common Stock
deliverable upon conversion of such Series A Exchangeable Preferred Stock
shall be treated for all purposes as the record holder or holders of such
Common Stock on such date.
(c) The conversion price at which a share of Series A Exchangeable
Preferred Stock is convertible into Common Stock shall be subject to
adjustment from time to time as follows:
(i) In case the Corporation shall pay or make a
dividend or other distribution on its Common Stock exclusively in
Common Stock or shall pay or make a dividend or other
distribution on any other class or series of capital stock of the
Corporation which dividend or distribution includes Common Stock,
the conversion price in effect at the opening of business on the
day following the date fixed for the determination of
shareholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such conversion
price by: A/(A + B), where:
A = the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination; and
B = the total number of shares of Common Stock constituting
such dividend or other distribution,
such reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination.
For purposes of this subparagraph (i), the number of shares of Common
Stock at any time outstanding shall not include shares held in the
treasury of the Corporation. The Corporation shall not pay any
dividend or make any distribution on shares of Common Stock held in
the treasury of the Corporation.
(ii) In case the Corporation shall pay or make a
dividend or other distribution on its Common Stock consisting
exclusively of, or shall otherwise issue to all holders of its
Common Stock, rights or warrants entitling the holders thereof to
subscribe for or purchase shares of Common Stock at a price per
share less than the Current Market Price Per Share of the Common
Stock on the date fixed for the determination of shareholders
entitled to receive such rights or warrants, the conversion price
in effect at the opening of business on the day following the
date fixed for such determination shall be reduced by multiplying
such conversion price by: (A + B)/(A + C), where:
A = the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination,
B = the number of shares of Common Stock which the aggregate
of the offering price of the total number of shares of Common Stock
so offered for subscription or purchase would purchase at such
Current Market Price Per Share, and
C = the number of additional shares of Common Stock so
offered for subscription or purchase,
such reduction to become effective immediately after the
opening of business on the day following the date fixed for such
determination.
In case any rights or warrants referred to in this subparagraph (ii)
in respect of which an adjustment shall have been made shall expire
unexercised after the shares of Common Stock issued in respect
thereof shall have been distributed or issued by the Corporation the
conversion price shall be readjusted at the time of such expiration
to the conversion price that would have been in effect if no
adjustment had been made on account of the distribution or issuance
of such expired rights or warrants; provided that no such
readjustment upon expiration of such rights or warrants shall affect
the number of shares of Common Stock issued upon conversion of
shares of Series A Exchangeable Preferred Stock prior to such
readjustment.
(iii) In case outstanding shares of Common Stock
shall be subdivided into a greater number of shares of Common
Stock, the conversion price in effect at the opening of business
on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced, and conversely, in
case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the conversion price in
effect at the opening of business on the day following the day
upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision
or combination becomes effective.
(iv) In case the Corporation shall, by dividend
or otherwise, distribute to all holders of its Common Stock
evidences of its indebtedness, shares of any class or series of
capital stock, cash or assets (including securities, but
excluding any rights or warrants referred to in subparagraph (ii)
of this Section 8(c), any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to
in subparagraph (i) of this Section 8(c)), the conversion price
shall be reduced so that the same shall equal the price
determined by multiplying the conversion price in effect
immediately prior to the effectiveness of the conversion price
reduction contemplated by this subparagraph (iv) by: (A - B)/A,
where:
A = the Current Market Price Per Share of the Common Stock
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution
(the "Reference Date"), and
B = the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors), on the
Reference Date, of the portion of the evidence of indebtedness,
shares of capital stock, cash and assets so distributed applicable
to one share of Common Stock,
such reduction to become effective immediately prior to the opening
of business on the day following the Reference Date, provided,
however, that for purposes of this subparagraph (iv), any dividend
or distribution that includes shares of Common Stock or rights or
warrants to subscribe for or purchase shares of Common Stock shall
be deemed instead to be (A) a dividend or distribution of the
evidences of indebtedness, cash, assets or shares of capital stock
other than such shares of Common Stock or rights or warrants (making
any further conversion price reduction required by this subparagraph
(iv)) immediately followed by (B) a dividend or distribution of such
shares of Common Stock or such rights or warrants (making any
further conversion price reduction required by subparagraph (i) or
(ii) of this Section 8(c), except (1) the Reference Date of such
dividend or distribution as defined in this subparagraph (iv) shall
be substituted as "the date fixed for the determination of
shareholders entitled to receive such dividend or other
distribution", "the date fixed for the determination of shareholders
entitled to receive such rights or warrants" and "the date fixed for
such determination" within the meaning of subparagraph (i) and (ii)
of this Section 8(c) and (2) any shares of Common Stock included in
such dividend or distribution shall not be deemed "outstanding at
the close of business on the date fixed for such determination
within the meaning of subparagraph (i) of this Section 8(c)). If
the Board of Directors determines the fair market value of any
distribution for purposes of this subparagraph (iv) by reference to
the actual or when issued trading market for any securities
comprising such distribution, it must in doing so consider the
prices in such market over the same period used in computing the
Current Market Price Per Share of Common Stock.
(v) In case the Corporation shall pay or make a
dividend or other distribution on its Common Stock exclusively in
cash (excluding (A) cash that is part of the distribution
referred to in (iv) above and, (B) in the case of any quarterly
cash dividend on the Common Stock, the portion thereof that does
not exceed the per share amount of the next preceding quarterly
cash dividend on the Common Stock (as adjusted to appropriately
reflect any of the events referred to in subparagraph (i), (ii),
(iii) and (iv) of this Section 8(c)), or all of such quarterly
cash dividend if the amount thereof per share of Common Stock
multiplied by four does not exceed 15% of the Current Market
Price Per Share of the Common Stock on the Trading Day next
preceding the date of declaration of such dividend), the
conversion price shall be reduced so that the same shall equal
the conversion price in effect immediately prior to the
effectiveness of the conversion price reduction contemplated by
this subparagraph (v) by: (A - B)/A, where:
A = the Current Market Price Per Share of the Common Stock
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution,
and
B = the amount of cash so distributed and not excluded as
provided above applicable to one share of Common Stock,
such reduction to become effective immediately prior to the opening
of business on the day following the date fixed for the payment of
such distribution.
(vi) No adjustment in the conversion price shall
be required unless such adjustment would require an increase or
decrease of at least 1% in the conversion price; provided,
however, that any adjustments which by reason of this
subparagraph (vi) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
(vii) Whenever the conversion price is adjusted
as herein provided: (A) the Corporation shall compute the
adjusted conversion price and shall prepare a certificate signed
by the Chief Financial Officer of the Corporation setting forth
the adjusted conversion price and showing in reasonable detail
the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the transfer agent for
the Series A Exchangeable Preferred Stock; and (B) a notice
stating that the conversion price has been adjusted and setting
forth the adjusted conversion price shall forthwith be required,
and as soon as practicable after it is required, such notice
shall be mailed by the Corporation to all record holders of
shares of Series A Exchangeable Preferred Stock at their last
addresses as they shall appear upon the stock transfer books of
the Corporation.
(viii) The Corporation from time to time may
reduce the conversion price by any amount for any period of time
if the period is at least twenty days, the reduction is
irrevocable during the period and the Board of Directors of the
Corporation shall have made a determination that such reduction
would be in the best interest of the Corporation, which
determination shall be conclusive. Whenever the conversion price
is reduced pursuant to the preceding sentence, the Corporation
shall mail to holders of record of the Series A Exchangeable
Preferred Stock a notice of the reduction at least fifteen days
prior to the date the reduced conversion price takes effect, and
such notice shall state the reduced conversion price and the
period it will be in effect.
(d) No fractional shares of Common Stock shall be issued upon
conversion of Series A Exchangeable Preferred Stock. If more than one
certificate evidencing shares of Series A Exchangeable Preferred Stock 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 shares of Series A Exchangeable Preferred Stock so
surrendered. Instead of any fractional share of Common Stock that would
otherwise be issuable to a holder upon conversion of any shares of Series A
Exchangeable Preferred Stock, the Corporation shall pay a cash adjustment in
respect of such fractional share in an amount equal to the same fraction of the
market price per share of Common Stock (as determined by the Board of
Directors or in any manner prescribed by the Board of Directors, which, if
available, shall be the Closing Price (as defined herein) for the shares of
Common Stock) on the day of conversion.
(e) In the event that the Corporation shall be a party to any
transaction (including without limitation any recapitalization or
reclassification of the Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination of the Common Stock), any consolidation
of the Corporation with, or merger of the corporation into, any other person,
any merger of another person into the Corporation (other than a merger which
does not result in a reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock of the Corporation), any sale or transfer
of all or substantially all of the assets of the Corporation or any share
exchange) pursuant to which the Common Stock is converted into the right to
receive other securities, cash or other property, then lawful provisions shall
be made as part of the terms of such transaction whereby the holder of each
share of Series A Exchangeable Preferred Stock then outstanding shall have the
right thereafter to convert such share only into (i) in the case of any such
transaction other than a Common Stock Fundamental Change and subject to funds
being legally available for such purpose under applicable law at the time of
such conversion, the kind and amount of securities, cash and other property
receivable upon such transaction by a holder of the number of shares of Common
Stock into which such share of Series A Exchangeable Preferred Stock might
have been converted immediately prior to such transaction, after giving
effect, in the case of any Non-Stock Fundamental Change, to any adjustment in
the conversion price required by the provisions of Section 8(h), and (ii) in
the case of a Common Stock Fundamental Change, common stock of the kind
received by holders of Common Stock as a result of such Common Stock
Fundamental Change in an amount determined pursuant to the provisions of
Section 8(h). The Corporation or the person formed by such consolidation or
resulting from such merger or which acquires such assets or which acquires the
Corporation's shares, as the case may be, shall make provisions in its
certificate or articles of incorporation or other constituent document to
establish such right. Such certificate or articles of incorporation or other
constituent document shall provide for adjustments which, for events
subsequent to the effective date of such certificate or articles of
incorporation or other constituent document, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 8. The
above provisions shall similarly apply to successive transactions of the
foregoing type.
(f) After September 30, 1997, the Corporation shall at all times
reserve and keep available, free from preemptive rights out of its authorized
and unissued stock, solely for the purpose of effecting the conversion of the
Series A Exchangeable Preferred Stock, such number of shares of its Common
Stock as shall from time to time be sufficient to effect that conversion of all
shares of Series A Exchangeable Preferred Stock from time to time outstanding
in accordance with their terms.
If any shares of Common Stock required to be reserved for
purposes of conversion of the Series A Exchangeable Preferred Stock hereunder
require registration with or approval of any governmental authority under any
Federal or State law before such shares may be issued upon conversion, the
Corporation will in good faith and as expeditiously as possible endeavor to
cause such shares to be duly registered or approved as the case may be. If the
Common Stock is listed on the New York Stock Exchange or any other national
securities exchange or traded through the Nasdaq National Market, the
Corporation will, if permitted by the rules of such exchange or market, list
and keep listed on such exchange or make and keep eligible for trading on such
market (as the case may be), upon official notice of issuance, all shares of
Common Stock issuable upon conversion of the Series A Exchangeable Preferred
Stock; provided, however, that such shares of Common Stock may be delisted
from such exchange or may cease to be eligible for trading through such market
(as the case may be) if, prior to or concurrent with such delisting or
cessation of eligibility for trading, the Corporation causes such shares of
Common Stock to be listed on or eligible for trading through any other
national securities exchange or on the Nasdaq National Market.
(g) In case:
(i) the Corporation shall (1) declare any
dividend (or any other distribution) on its Common Stock, other
than (A) a dividend payable in shares of Common Stock or (B) a
dividend payable in cash out of its retained earnings other than
any special or nonrecurring or other extraordinary dividend or
(2) declare or authorize a redemption or repurchase of in excess
of 10% of the then-outstanding shares of Common Stock; or
(ii) the Corporation shall authorize the
granting to all holders of Common Stock of rights or warrants to
subscribe for or purchase any shares of stock of any class or
series or of any other rights or warrants; or
(iii) of any reclassification of Common Stock
(other than a subdivision or combination of the outstanding
Common Stock, or a change in par value, or from par value to no
par value, or from no par value to par value), or of any
consolidation or merger to which the Corporation is a party and
for which approval of any shareholders of the Corporation shall
be required, or of the sale or transfer of all or substantially
all of the assets of the Corporation or of any share exchange
whereby the Common Stock is converted into other securities,
cash or other property; or
(iv) of the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation;
then the Corporation shall cause to be filed with the transfer
agent for the Series A Exchangeable Preferred Stock, and shall
cause to be mailed to the holders of record of the Series A
Exchangeable Preferred Stock, at their last addresses as they
shall appear upon the stock transfer books of the Corporation,
at least ten days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on
which a record (if any) is to be taken for the purpose of such
dividend, distribution, redemption, repurchase, rights or
warrants or, if a record is not to be taken, the date as of
which the holders of Common Stock of record to be entitled to
such dividend, distribution, redemption, rights or warrants are
to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become
effective and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer, share exchange, dissolution, liquidation or
winding up (but no failure to mail such notice or any defect
therein or in the mailing thereof shall affect the validity of
the corporate action required to be specified in such notice).
(h) Notwithstanding any other provision in this Section 8 to the
contrary, if any Fundamental Change occurs, then the conversion price in
effect will be adjusted immediately after such Fundamental Change as described
below. In addition, in the event of a Common Stock Fundamental Change, each
share of Series A Exchangeable Preferred Stock shall be convertible solely
into common stock of the kind received by holders of Common Stock as the
result of such Common Stock Fundamental Change.
For purposes of calculating any adjustment to be made pursuant
to this Section 8(h) in the event of a Fundamental Change, immediately after
such Fundamental Change:
(i) In the case of a Non-Stock Fundamental
Change, the conversion price of the Series A Exchangeable
Preferred Stock shall thereupon become the lower of (A) the
conversion price in effect immediately prior to such Non-Stock
Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to this Section 8, and (B) the
result of A x $50/B, where:
A = the greater of the Applicable Price or the then
applicable Reference Market Price, and
B = (x) the then-current Optional Redemption Price per
share of Series A Exchangeable Preferred Stock or (y) for any
Non-Stock Fundamental Change that occurs before the Series A
Exchangeable Preferred Stock becomes redeemable by the
Corporation pursuant to Section 5, the applicable price per
share set forth for the date of such Non-Stock Fundamental
Change in the following table:
On and after date of original issuance and on or before
July 6, 1998 ................................................ $54.25
On and after July 7, 1998 and on or before July 6, 1999........ $53.78
On and after July 7, 1999 and on or before July 6, 2000 ....... $53.31
plus, in any case referred to in this clause (y), an amount equal
to all per share dividends on the Series A Exchangeable Preferred
Stock accrued and unpaid thereon, whether or not declared, to but
excluding the date of such Non-Stock Fundamental Change; and
(ii) In the case of a Common Stock Fundamental
Change, the conversion price of the Series A Exchangeable
Preferred Stock in effect immediately prior to such Common
Stock Fundamental Change, but after giving effect to any other
prior adjustments effected pursuant to this Section 8, shall
thereupon be adjusted by multiplying such conversion price by a
fraction of which the numerator shall be the Purchaser Stock
Price and the denominator shall be the Applicable Price;
provided, however, that in the event of a Common Stock
Fundamental Change in which (A) 100% by value of the
consideration received by a holder of Common Stock is common
stock of the successor, acquiror or other third party (and
cash, if any, is paid with respect to any fractional interests
in such common stock resulting from such Common Stock
Fundamental Change) and (B) all of the Common Stock shall have
been exchanged for, converted into or acquired for common stock
(and cash with respect to fractional interests) of the
successor, acquiror or other third party, the conversion price
of the Series A Exchangeable Preferred Stock in effect
immediately prior to such Common Stock Fundamental Change shall
thereupon be adjusted by dividing such conversion price by the
number of shares of common stock of the successor, acquiror, or
other third party received by a holder of one share of Common
Stock as a result of such Common Stock Fundamental Change.
(i) Notwithstanding the foregoing provisions, the issuance of any
shares of Common Stock pursuant to any plan providing for the reinvestment of
dividends or interest payable on securities of the Corporation and the
investment of additional optional amounts in shares of Common Stock under any
such plan, and the issuance of any shares of Common Stock or options or rights
to purchase such shares pursuant to any employee benefit plan or program of
the Corporation or pursuant to any option, warrant, right or exercisable,
exchangeable or convertible security outstanding as of the date the Series A
Exchangeable Preferred Stock was first designated shall not be deemed to
constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Corporation to which any of the adjustment
provisions described above applies. There shall also be no adjustment of the
conversion price in case of the issuance of any stock (or securities
convertible into or exchangeable for stock) of the Corporation except as
specifically described in this Section 8. If any action would require
adjustment of the conversion price pursuant to more than one of the provisions
described above, only one adjustment shall be made and such adjustment shall
be the amount of adjustment which has the highest absolute value to holders of
Series A Exchangeable Preferred Stock.
Section 9. Liquidation Rights. (a) In the case of the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, holders of outstanding shares of Series A Exchangeable Preferred
Stock shall be entitled to receive a liquidation preference from the net
assets of the Corporation available for distribution to stockholders in an
amount in cash which for each such share shall equal $50 per share (the
"Liquidation Preference"), plus an amount equal to any accrued and unpaid
dividends to the payment date, before any payment or distribution is made to
the holders of Common Stock or any other Junior Liquidation Stock, but the
holders of the shares of the Series A Exchangeable Preferred Stock will not be
entitled to receive the liquidation preference of such shares until the
liquidation preference of any Senior Liquidation Stock has been paid in full.
(b) The holders of Series A Exchangeable Preferred Stock and Parity
Liquidation Stock, including the Series B PIK Preferred Stock, shall share
ratably in any liquidation, distribution or winding up of the Corporation
(after payment of the liquidation preference of the Senior Liquidation Stock)
in which the net assets or the proceeds thereof are not sufficient to pay in
full the aggregate of the amounts payable thereon, in the same ratio that the
respective amounts which would be payable on such distribution if the amounts
to which the holders of all the outstanding shares of Series A Exchangeable
Preferred Stock and Parity Liquidation Stock, including the Series B PIK
Preferred Stock, are entitled were paid in full, bear to each other. After
payment in full of the liquidation preference of the shares of the Series A
Exchangeable Preferred Stock, the holders of such shares will not be entitled
to any further participation in any distribution of assets by the Corporation.
(c) Neither a consolidation nor merger of the Corporation with
another corporation nor a sale or transfer of all or substantially all of the
Corporation's property or assets will be considered a liquidation, dissolution
or winding up of the Corporation.
Section 10. Voting Rights. (a) The holders of shares of
Series A Exchangeable Preferred Stock shall not be entitled to vote on any
matter on which the holders of any voting securities of the Corporation shall
be entitled to vote except as otherwise provided by this Section 10 or as
required by law from time to time. In exercising any such vote, each
outstanding share of Series A Exchangeable Preferred Stock will be entitled to
one vote, excluding shares held by any entity controlled by the Corporation,
which shares shall have no voting rights.
(b) In the event that the Corporation shall have failed to pay
dividends on Series A Exchangeable Preferred Stock or on any outstanding
shares of Parity Dividend Stock, including the Series B PIK Preferred Stock,
in an aggregate amount equal to at least six quarterly dividends on such shares
(whether or not consecutive) (such failure, a "Dividend Non-Payment"), the
number of directors constituting the Board of Directors of the Corporation,
without further action, shall be increased by two and the holders of the
outstanding shares of Series A Exchangeable Preferred Stock shall have the
right, voting separately as a class with the holders of Parity Dividend Stock
on which like voting rights have been conferred and are exercisable, including
the Series B PIK Preferred Stock, to elect such two additional members of the
Board of Directors, at any annual meeting of stockholders of the Corporation
or by written consent pursuant to Section 228 of the General Corporation Law
of the State of Delaware, in each case, who shall continue to serve so long as
such dividends on the Series A Exchangeable Preferred Stock and Parity
Dividend Stock, including the Series B PIK Preferred Stock, have not been
paid. If and when all such accrued and unpaid dividends on the Series A
Exchangeable Preferred Stock and Parity Dividend Stock, including the Series
B PIK Preferred Stock, have been paid or declared and set apart for payment,
the holders of shares of the Series A Exchangeable Preferred Stock and Parity
Dividend Stock, including the Series B PIK Preferred Stock, shall be divested
of the special voting rights provided by this Section 10, subject to revesting
in the event of every subsequent Dividend Non-Payment. Upon termination of
such special voting rights, the term of office of each director elected
pursuant to this Section 10 by the holders of shares of Series A Exchangeable
Preferred Stock and Parity Dividend Stock, including the Series B PIK
Preferred Stock, (a "Preferred Stock Director") shall terminate immediately
and the number of directors constituting the entire Board of Directors shall,
without further action, be reduced by two, subject always to the increase of
the number of directors pursuant to this Section 10 in the case of the future
right of the holders of Series A Exchangeable Preferred Stock to elect
Preferred Stock Directors. Any Preferred Stock Director may be removed by,
and shall not be removed otherwise than by, the vote of the holders of record
of a majority of the outstanding shares of the Series A Exchangeable Preferred
Stock and the Parity Dividend Stock, including the Series B PIK Preferred
Stock, entitled to vote thereon present at a meeting called for such purpose
at which a quorum is present or by written consent pursuant to Section 228 of
the General Corporation Law of the State of Delaware. So long as a Dividend
Non-Payment shall continue, any vacancy in the office of a Preferred Stock
Director may be filled by vote of the holders of record of a majority of the
outstanding shares of the Series A Exchangeable Preferred Stock and the Parity
Dividend Stock, including the Series B PIK Preferred Stock, entitled to vote
thereon present at a meeting called for such purpose at which a quorum is
present or by written consent pursuant to Section 228 of the General
Corporation Law of the State of Delaware. As long as a Dividend Non-Payment
shall continue, holders of shares of the Series A Exchangeable Preferred Stock
shall not, as such stockholders, be entitled to vote on the election or
removal of directors other than Preferred Stock Directors, but shall not be
divested of any other voting rights provided to such stockholders by law or
this Certificate of Designation with respect to any other matter to be acted
upon by the stockholders of the Corporation.
(c) At any meeting held for the purpose of electing directors at
which the holders of outstanding shares of Series A Exchangeable Preferred
Stock shall have the right to elect directors as provided in this Section 10,
the presence, in person or by proxy, of the holders of at least a majority of
the then outstanding shares of Series A Exchangeable Preferred Stock and the
Parity Dividend Stock, including the Series B PIK Preferred Stock, on which
like voting rights have been conferred and are exercisable shall be required
and be sufficient to constitute a quorum of such class for the election of
directors by such class. At any such meeting or adjournment thereof (i) the
absence of a quorum of the holders of the Series A Exchangeable Preferred
Stock and the Parity Dividend Stock, including the Series B PIK Preferred
Stock, present in person or by proxy shall not prevent the election of
directors other than those to be elected by the holders of the Series A
Exchangeable Preferred Stock and the Parity Dividend Stock, including the
Series B PIK Preferred Stock, and the absence of a quorum or quorums of the
holders of any class or classes of any stock or other securities of the
Corporation other than the Series A Exchangeable Preferred Stock and the
Parity Dividend Stock, including the Series B PIK Preferred Stock shall not
prevent the election of directors to be elected by the holders of the Series A
Exchangeable Preferred Stock and the Parity Dividend Stock, including the
Series B PIK Preferred Stock and (ii) in the absence of a quorum of the
holders of any class of stock entitled to vote for the election of directors,
a majority of the holders present in person or by proxy of such class shall
have the power to adjourn the meeting for the election of directors which the
holders of such class are entitled to elect, from time to time, without notice
(except as required by law) other than announcement at the meeting, until a
quorum shall be present.
(d) So long as any shares of Series A Exchangeable Preferred Stock
remain outstanding, the Corporation will not, without the affirmative vote or
consent of the holders of at least 66 (2)/(3)% of all shares of Series A
Exchangeable Preferred Stock and Series B PIK Preferred Stock and other Parity
Dividend Stock, voting separately as one class:
(i) amend, alter or repeal (by merger or
otherwise) any provision of the Certificate of Incorporation or
any terms or provisions of this Certificate of Designation or
the by-laws of the Corporation so as to affect adversely the
relative rights, preferences, qualifications, limitations, or
restrictions of the Series A Exchangeable Preferred Stock; or
(ii) authorize or issue, or increase the
authorized or issued amount of any Senior Dividend Stock, Senior
Liquidation Stock or any security convertible into such Senior
Dividend Stock or such Senior Liquidation Stock; or
(iii) effect any reclassification of the Series A
Exchangeable Preferred Stock.
or, without the consent of the holders of a majority of Series A
Exchangeable Preferred Stock and Series B PIK Preferred Stock and other
Parity Dividend Stock, voting separately as one class, authorize or issue,
or increase the authorized or issued amount of any additional class of
Parity Stock or any security convertible into such Parity Stock.
Section 11. Registration, Transfer and Exchanges. The
Corporation will keep with the registrar and transfer agent of the Series A
Exchangeable Preferred Stock, a register in which the Corporation will provide
for the registration and transfer of shares of Series A Exchangeable Preferred
Stock. Any holder of shares of Series A Exchangeable Preferred Stock may, at
its option, in person or by duly authorized attorney, surrender the certificate
representing the same for exchange at the registrar and transfer agent (duly
endorsed or accompanied, if so required by the Corporation, by a written
instrument of transfer duly executed by such holder or his or her duly
authorized attorney), and, within a reasonable time thereafter and without
expense (other than transfer taxes, if any), receive in exchange therefor one
or more duly executed certificate or certificates dated as of the date to which
dividends have been paid on the shares of Series A Exchangeable Preferred
Stock so surrendered, or if no dividend has yet been so paid, then dated the
date hereof, and registered in such name or names, all as may be designated
by such holder, for the same aggregate number of shares of Series A
Exchangeable Preferred Stock as represented by the certificate or certificates
so surrendered. The Corporation covenants and agrees to take and cause to be
taken all action reasonably necessary to effect such registrations, transfers
and exchanges. Each share of Series A Exchangeable Preferred Stock issued in
exchange for any share shall carry the same rights to unpaid dividends,
redemption payments and exchange for Notes which were carried by the share so
exchanged, so that neither gain nor loss of any such right shall result from
any such transfer or exchange.
The Corporation and any agent of the Corporation may treat the
person in whose name any share of Series A Exchangeable Preferred Stock is
registered as the owner of such share for the purpose of receiving payment of
dividends, and amounts payable on redemption and liquidation in respect of
such share and Notes receivable upon an exchange and for all other purposes.
Section 12. Definitions. Unless the context or use indicates
another or different meaning or intent, as used herein, the following terms
shall have the following meanings, terms defined in the singular to have a
correlative meaning when used in the plural and vice versa:
"Applicable Price" means (i) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only cash,
the amount of cash received by the holder of one share of Common Stock and (ii)
in the event of any other Non-Stock Fundamental Change or any Common Stock
Fundamental Change, the average of the Closing Prices for the Common Stock
during the ten consecutive Trading Days prior to and including the record date
for the determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such Non-Stock
Fundamental Change or Common Stock Fundamental Change, or, if there is no such
record date, the date upon which the holders of the Common Stock shall have
the right to receive such cash, securities, property or other assets, in each
case, as adjusted in good faith by the Board of Directors or the Corporation
to appropriately reflect any of the events referred to in clauses (i) through
(v) of Section 8(c).
"Business Day" shall mean any day other than a Saturday, Sunday
or any day on which banking institutions are authorized to close in New York,
New York.
"Closing Price" of any security means on any day the last
reported sale price regular way on such day or in case no sale takes place on
such day, the average of the reported closing bid and asked prices regular way
in each case on the New York Stock Exchange, Inc. or, if the security is not
quoted on such system, on the principal national securities exchange or
quotation system on which such security is listed or admitted to trading or
quoted, or, if not listed or admitted to trading on any national securities
exchange or quotation system, the average of the closing bid and asked prices
in the over-the-counter market on such day as reported by the National
Quotation Bureau Incorporated, or a similarly generally accepted reporting
service, or, if not so available in such manner, as furnished by any New York
Stock Exchange Member firm selected from time to time by the Board of
Directors for that purpose.
"Common Stock Fundamental Change" means any Fundamental Change
in which more than 50% of the value (as determined in good faith by the Board
of Directors of the Corporation) of the consideration received by holders of
Common Stock consists of common stock that for each of the ten consecutive
Trading Days referred to with respect to such Fundamental Change in the
definition of "Applicable Price" has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on the Nasdaq National Market, provided, however, that a Fundamental
Change shall not be a Common Stock Fundamental Change unless either (i) the
Corporation continues to exist after the occurrence of such Fundamental Change
and the outstanding shares of Series A Exchangeable Preferred Stock continue
to exist as outstanding Series A Exchangeable Preferred Stock, or (ii) not
later than the occurrence of such Fundamental Change, the outstanding shares
of Series A Exchangeable Preferred Stock are converted into or exchanged for
shares of preferred stock of a corporation succeeding to the business of the
Corporation, which preferred stock has powers, preferences and relative,
participating, optional or other rights, and qualifications, limitations and
restrictions, substantially similar to those of the Series A Exchangeable
Preferred Stock.
"Current Market Price Per Share" shall mean, as to the Common
Stock on any date in question, the average of the daily Closing Prices for the
five consecutive Trading Days prior to and including the date in question;
provided, however, that:
(i) if the Ex Date for any event (other than
the issuance or distribution requiring such computation) that
required an adjustment to the conversion price pursuant to
subparagraphs (i), (ii), (iii), (iv) or (v) of Section 8(c)
("Other Event") occurs after the fifth Trading Day prior to the
day in question and prior to the Ex Date for the issuance or
distribution requiring such computation (the "Current Event"),
the Closing Price for each Trading Day prior to the Ex Date for
such Other Event shall be adjusted by multiplying such Closing
Price by the same fraction by which the conversion price is so
required to be adjusted as a result of such Other Event,
(ii) if the Ex Date for any Other Event occurs
after the Ex Date for the Current Event and on or prior to the
date in question, the Closing Price for each Trading Day on and
after the Ex Date for such Other Event shall be adjusted by
multiplying such Closing Price by the reciprocal of the
fraction by which the conversion price is so required to be
adjusted as a result of such Other Event,
(iii) if the Ex Date for any Other Event occurs
on the Ex Date for the Current Event, one of those events, as
determined by the Corporation, shall be deemed for purposed of
clauses (i) and (ii) of this proviso to have an Ex Date
occurring prior to the Ex Date for the other of those events,
and
(iv) if the Ex Date for the Current Event is on
or prior to the date in question, then after taking into
account any adjustment required pursuant to clause (ii) of this
proviso, the Closing Price for each Trading Day on or after
such Ex Date shall be adjusted by adding thereto the amount of
any cash and the fair market value on the date in question (as
determined in good faith by the Board of Directors in a manner
consistent with any determination of such value for purposes of
paragraph (iv) or (v) of Section 8(c), whose determination
shall be conclusive and described in a resolution of the Board
of Directors) of the portion of the rights, warrants, evidences
of indebtedness, shares of capital stock or assets being
distributed applicable to one share of Common Stock.
"Ex Date" shall mean (i) when used with respect to any issuance
or distribution, means the first date on which the Common Stock trades regular
way on the relevant exchange or in the relevant market from which the Closing
Price was obtained without the right to receive such issuance or distribution
and (ii) when used with respect to any subdivision or combination of shares of
Common Stock, means the first date on which the Common Stock trades regular
way on such exchange or in such market after the time at which such
subdivision or combination becomes effective.
"Fundamental Change" means the occurrence of any transaction or
event in connection with a plan pursuant to which all or substantially all of
the Common Stock shall be exchanged for, converted into, acquired for or
constitute solely the right to receive cash, securities, property or other
assets (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) provided, in the case of a plan involving more than one such
transaction or event, for purposes of adjustment of the conversion price, such
Fundamental Change shall be deemed to have occurred when substantially all of
the Common Stock of the Corporation shall be exchanged for, converted into, or
acquired for or constitute solely the right to receive cash, securities,
property or other assets, but the adjustment shall be based upon the highest
weighted average per share consideration which a holder of Common Stock could
have received in such transactions or events as a result of which more than
50% of the Common Stock of the Corporation shall have been exchanged for,
converted into, or acquired for or constitute solely the right to receive cash,
securities, property or other assets.
"Non-Stock Fundamental Change" means any Fundamental Change
other than a Common Stock Fundamental Change.
"Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Common Stock Fundamental Change for the ten consecutive
Trading Days prior to and including the record date for the determination of
the holders of Common Stock entitled to receive such common stock, or if there
is no such record date, the date upon which the holders of the Common Stock
shall have the right to receive such common stock, in each case, as adjusted
in good faith by the Board of Directors to appropriately reflect any of the
events referred to in clauses (i) through (v) Section 8(c); provided, however,
that if no such Closing Prices exist, the Purchaser Stock Price shall be set
at a price determined in good faith by the Board of Directors of the
Corporation.
"Reference Market Price" shall mean $2.50 (which is an amount
equal to 66 2/3% of the reported last sale price for the Common Stock on the
New York Stock Exchange on May 21, 1997) and in the event of any adjustment to
the conversion price other than as a result of a Fundamental Change, the
Reference Market Price shall also be adjusted so that the ratio of the
Reference Market Price to the conversion price after giving effect to any such
adjustment shall always be the same ratio of $2.50 to the initial conversion
price specified in the first sentence of Section 8.
"Trading Day" shall mean a day on which securities traded on the
national securities exchange or quotation system or in the over-the-counter
market used to determine the Closing Price.
IN WITNESS WHEREOF, LABORATORY CORPORATION OF AMERICA HOLDINGS
has caused this Certificate to be signed by one of its Executive Vice
President and to be attested to by its Secretary, as of the day of
1997.
LABORATORY CORPORATION
OF AMERICA HOLDINGS
By_____________________________________
Name: Wesley R. Elingburg
Title: Executive Vice President,
Chief Financial Officer and
Treasurer
Attest___________________________
Name: Bradford T. Smith
Title: Secretary
