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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): JUNE 26, 1996
CYBERGUARD CORPORATION
(Exact name of registrant as specified in its charter)
FLORIDA 0-2454 65-0510339
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2101 WEST CYPRESS CREEK ROAD, FORT LAUDERDALE, FLORIDA 33309
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (305) 974-1700
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ITEM 5.
Change of Name
On June 26, 1996, the shareholders of the Registrant approved an
amendment to its Articles of Incorporation to change the Registrant's corporate
name from Harris Computer Systems Corporation to CyberGuard Corporation. Such
amendment was filed with the Secretary of State of Florida on June 26, 1996 and
became effective as of such date.
Closing of Sale of Real-time Business
On June 27, 1996, the Registrant closed the transaction, described in
its Current Report on Form 8-K as filed with the Securities and Exchange
Commission on April 10, 1996 and as amended on June 18, 1996, in which the
Registrant sold its real-time computer business to Concurrent Computer
Corporation pursuant to a Purchase and Sale Agreement (the "Purchase and Sale
Agreement"), as amended and restated as of May 23, 1996, between the Registrant
and Concurrent Computer Corporation, a Delaware corporation ("Concurrent").
The Purchase and Sale Agreement provided for the assets of the Registrant's
real-time computer business ("the Real-time Business") to be sold to Concurrent
together with 683,178 shares of newly issued common stock of the Registrant
("Purchased Shares") in exchange for (i) 10,000,000 newly issued shares (the
"Concurrent Common Stock Consideration") of common stock of Concurrent, par
value $.01 per share ("Concurrent Common Stock") (ii) convertible exchangeable
preferred stock of Concurrent ("Concurrent Preferred Stock") paying a 9%
cumulative annual dividend quarterly in arrears with a liquidation preference
of $8,200,000; and (iii) the assumption by Concurrent of certain liabilities
(the "Assumed Liabilities"). The sale of the Real-time Business and the
Purchased Shares in exchange for the Concurrent Common Stock Consideration, the
Concurrent Preferred Stock and the assumption by Concurrent of the Assumed
Liabilities is referred to herein as the "Transaction."
The Transaction did not include the assumption by Concurrent of
certain liabilities of the Registrant or those assets and liabilities held by
the Registrant in connection with the development, manufacture, and marketing
of the Registrant's trusted computer products. The Real-time Business
represented approximately 82% of the assets of the Registrant as of March 30,
1996, and accounted for 83%, 89% and 87% of the Registrant's sales for the six
months ended March 30, 1996 and the fiscal years ended September 30, 1995 and
June 30, 1994, respectively.
At the closing the Transaction, the Registrant and Concurrent executed
certain ancillary agreements, including a Share Holding Agreement that contains
certain standstill, governance, transfer and registration provisions, and
provisions relating to the composition of the Board of Directors of the
Registrant and Concurrent.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information
Pro Forma Financial Statements in the form required by Article 11 of
Regulation S-X and relating to the Transaction described in Item 5 hereof are
incorporated herein by reference to Item 7 of Amendment No. 1 to the
Registrant's Current Report on Form 8-K, as filed with the Securities and
Exchange Commission on July 18, 1996.
(c) Exhibits.
The following exhibits are filed herewith:
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION METHOD OF FILING
NUMBER ----------- ----------------
------
<S> <C> <C>
99.1 Certificate of Designation of Concurrent Filed herewith
Preferred Stock filed June 27, 1996 with the
Secretary of State of Delaware
99.2 Share Holding Agreement between the Incorporated by reference to Exhibit 4.11
Registrant and Concurrent Computer to Registrant's Registration Statement on
Corporation in substantially the form Form S-3 (file no. 333-04407) as filed with
executed on June 27, 1996 the Commission on May 23, 1996
</TABLE>
ITEM 8. CHANGE IN FISCAL YEAR
On June 26, 1996, the Company's Board of Directors approved a
resolution adopting June 30 as the date of the end of the Registrant's fiscal
year. The Registrant will report financial results of the fiscal quarter ended
June 30, 1996 on Form 10-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: July 11, 1996 CYBERGUARD CORPORATION
By: /s/ Brian Formeny
-------------------
Brian Foremny
General Counsel and Secretary
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
99.1 Certificate of Designation of Concurrent
Preferred Stock filed June 27, 1996 with the
Secretary of State of Delaware
99.2 Share Holding Agreement between the
Registrant and Concurrent Computer
Corporation in substantially the form
executed on June 27, 1996
</TABLE>
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Exhibit 99.1
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DESIGNATION, PREFERENCES AND RIGHTS OF CLASS B
CONVERTIBLE PREFERRED STOCK
1. DESIGNATION AND NUMBER OF SHARES. The designation of such series
shall be 9.00% Class B Convertible Preferred Stock (the "Convertible Preferred
Stock"), and the number of shares constituting such series initially shall be
1,000,000.
2. PAR VALUE; PREEMPTIVE RIGHTS. As provided in Article Fourth of
the Corporation's Restated Certificate of Incorporation, the Convertible
Preferred Stock shall have a par value of $.01 per share. Holders of
Convertible Preferred Stock shall not be entitled to any preemptive rights to
acquire shares of any class or series of capital stock of the Corporation.
3. RANK. The Convertible Preferred Stock shall rank, with respect to
rights to receive dividends and rights to receive distributions upon the
liquidation, winding up or dissolution of the Corporation (whether voluntary or
involuntary): (a) senior to the Corporation's Common Stock, par value $.01 per
share (the "Common Stock"), and senior to any class or series of capital stock,
including any preferred stock, issued by the Corporation, other than the Class
A Preferred Stock (the "Junior Stock"), and (b) on a parity with the Class A
Preferred Stock (the "Parity Stock").
4. DIVIDENDS AND DISTRIBUTIONS; METHOD OF PAYMENT. (a) The holders
of shares of Convertible Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for
such purpose, dividends at the rate per annum of 9.00% of the Liquidation
Preference (as defined in Section 8 hereof) of such shares. Such dividends
shall be fully cumulative, shall accumulate from the date of original issuance
of the Convertible Preferred Stock, and shall be payable quarterly in arrears
in cash on each September 30, December 31, March 31 and June 30, commencing
September 30, 1996 (provided, that if any such date is not a Business Day, then
such dividend shall be payable without interest on the next succeeding Business
Day), to holders of record as they appear on the stock books of the Corporation
on such record dates as shall be fixed by the Board of Directors. Such record
dates shall be not more than 60 nor less than 10 days preceding the respective
dividend payment dates. The amount of dividends payable per share of
Convertible Preferred Stock for each full quarterly dividend period shall be
computed by dividing the annual dividend amount by four. The amount of
dividends payable for the initial dividend period and for any other period
shorter than a full quarterly dividend period shall be computed on the basis of
a 360-day year of twelve 30-day months.
Dividends on account of arrears for any past dividend periods may be
declared and paid at any time, without reference to any regular dividend
payment date, to holders of record of Convertible Preferred Stock on such date,
not exceeding 45 days preceding the payment date thereof, as may be fixed in
advance by the Board of Directors.
Dividends shall not be paid or declared and set apart for payment on
any Parity Stock for any period unless full cumulative dividends have been, or
contemporaneously are, paid or declared and set apart for payment on the
Convertible Preferred Stock for all dividend periods terminating on or prior to
the date of payment of such full cumulative dividends. Dividends shall not be
paid or declared and set apart for payment on the Convertible Preferred Stock
for any period unless full cumulative dividends have been, or contemporaneously
are, paid or declared and set apart for payment on any Parity Stock for all
dividend periods terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full upon the Convertible
Preferred Stock and any Parity Stock, the Corporation may make dividend
payments on account of arrears on the Convertible Preferred Stock or any such
Parity Stock, provided that the Corporation shall make such payments ratably
upon all outstanding shares of Convertible Preferred Stock and such Parity
Stock in proportion to the respective amounts of dividends in arrears upon all
such outstanding shares of Convertible Preferred Stock and Parity Stock to the
date of such dividend payment.
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So long as any Convertible Preferred Stock shall be outstanding, the
Corporation shall not declare or pay any dividends on the Common Stock or any
other Junior Stock, or make any payment on account of, or set apart money for,
a sinking fund or other similar fund or agreement for the purchase, redemption
or other retirement of any shares of Junior Stock, or make any distribution in
respect thereof, whether in cash or property or in obligations or stock of the
Corporation, other than (A) the Rights (as defined in Section 13 hereof) and
(B) a distribution consisting solely of Junior Stock (such dividends, payments,
setting apart and distributions being herein called "Junior Stock Payments"),
unless the following conditions shall be satisfied at the date of such
declaration in the case of any such dividend, or the date of such setting apart
in the case of any such fund, or the date of such payment or distribution in
the case of any other Junior Stock Payment:
(i) full cumulative dividends shall have been paid or declared and set
apart for payment on all outstanding shares of Convertible Preferred
Stock through the last quarterly dividend payment date established
pursuant to this Section 4(a) that immediately precedes such dividend,
setting apart, payment or distribution; and
(ii) the Corporation shall not be in default or in arrears with respect to
any redemption (whether optional or mandatory) of any shares of Convertible
Preferred Stock.
Holders of shares of Convertible Preferred Stock shall not be entitled
to any dividend in excess of full cumulative dividends on such shares. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment that is in arrears.
(a) The Corporation may pay dividends pursuant to this Section 4 and any
redemption payments pursuant to Sections 5 and 6 hereof to holders of record of
Convertible Preferred Stock by checks payable to such holders in money of the
United States.
5. REDEMPTION AT OPTION OF THE CORPORATION. Whenever the Current
Market Price (as defined in Section 13) exceeds $3.75 (the "Triggering Price"),
as such price may be adjusted pursuant to Section 9(e) hereof, prior to the
date of any notice of redemption, the Corporation may, at its option, redeem
all or a portion of the shares of Convertible Preferred Stock, at any time or
from time to time, at a price per share equal to the Liquidation Preference.
The Corporation's right to redeem pursuant to this provision is subject to the
payment of all accrued and accumulated but unpaid dividends, whether or not
declared, without interest, to the Redemption Date (as defined below) on the
shares to be redeemed; and dividends on the shares to be redeemed will cease to
accrue on the Redemption Date.
Notice of any redemption pursuant to this Section 5 shall be given by
the Corporation by first class mail, postage prepaid, not more than 30 days
after the end of the period during which the applicable Current Market Price is
determined and not less than 30 or more than 90 days prior to the date fixed
for redemption (the "Redemption Date"), to each holder of record of the shares
to be redeemed, at such holder's address as shown on the stock register of the
Corporation. Each such notice shall state: (a) the Redemption Date; (b) the
number of shares of Convertible Preferred Stock to be redeemed and, if less
than all such shares held by such holder are to be redeemed, the number of such
shares to be redeemed from such holder; (c) the Redemption Price; (d) the place
or places where certificates for such shares are to be surrendered for payment
of the Redemption Price; (e) the then effective Conversion Price (as defined in
Section 9(a) hereof); (f) that the right of holders of Convertible Preferred
Stock called for redemption to exercise their conversion rights pursuant to
Section 9 hereof shall cease and terminate as to such shares at the close of
business on the Redemption Date (provided that there is no default in payment
of the Redemption Price); (g) that payment of the Redemption Price will be made
upon presentation and surrender of certificates representing the shares of
Convertible Preferred Stock called for redemption; (h) that, in accordance with
the second sentence of the first paragraph of this Section 5, accumulated but
unpaid dividends to the Redemption Date on the shares to be redeemed will be
paid on the Redemption Date; and (i) that dividends on the shares to be
redeemed will cease to accrue on the Redemption Date. If a notice is mailed to
a holder in the manner provided above within the time prescribed, it is duly
given with respect to such holder. Notice having been mailed as aforesaid,
from and after the Redemption Date (unless default shall be made by the
Corporation in providing
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money for the payment of the Redemption Price) dividends on the shares of
Convertible Preferred Stock so called for redemption shall cease to accrue, and
such shares shall no longer be deemed to be outstanding, and all rights of the
holders thereof as shareholders of the Corporation by virtue of the ownership
of such shares (except the right to receive from the Corporation the Redemption
Price without interest) shall cease. Upon surrender in accordance with such
notice of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors shall so require and the
notice shall so state), the Corporation shall redeem such shares at the
Redemption Price.
If less than all the then outstanding shares of Convertible Preferred
Stock are to be redeemed, the Corporation shall effect such redemption pro rata
(as nearly as practicable) among all holders of Convertible Preferred Stock.
If fewer than all the shares represented by a surrendered certificate or
certificates are redeemed, the Corporation shall issue a new certificate
representing the unredeemed shares. Notwithstanding the foregoing, the
Corporation shall not redeem less than all the outstanding shares of
Convertible Preferred Stock pursuant to this Section 5, or purchase or acquire
any shares of Convertible Preferred Stock otherwise than pursuant to a purchase
or exchange offer made on the same terms to all holders of shares of
Convertible Preferred Stock, unless full cumulative dividends shall have been
paid upon all outstanding shares of Convertible Preferred Stock for all past
dividend periods.
6. MANDATORY REDEMPTION. On June 1, 2006 (the "Mandatory Redemption
Date"), the Corporation shall redeem all of the Convertible Preferred Stock
then outstanding at the Liquidation Preference. Accrued and accumulated but
unpaid dividends, whether or not declared, without interest, to the Mandatory
Redemption Date will be paid on the Mandatory Redemption Date and on and after
the Mandatory Redemption Date, dividends will cease to accumulate on the
Convertible Preferred Stock.
Notice of such redemption shall be given by the Corporation by first
class mail, postage prepaid, not less than 30 or more than 90 days prior to the
Mandatory Redemption Date, to each holder of record of the shares to be
redeemed, at such holder's address as shown on the stock register of the
Corporation. Each such notice shall state: (a) the Mandatory Redemption Date;
(b) the Redemption Price; (c) the place or places where certificates for such
shares are to be surrendered for payment of the Redemption Price; (d) the then
effective Conversion Price; (e) that the right of holders of Convertible
Preferred Stock to exercise their conversion rights pursuant to Section 9
hereof shall cease and terminate at the close of business on the Mandatory
Redemption Date (provided that there is no default in payment of the Redemption
Price); (f) that payment of the Redemption Price will be made upon presentation
and surrender of certificates representing the shares of Convertible Preferred
Stock; (g) that, in accordance with the second sentence of the first paragraph
of this Section 6, accumulated but unpaid dividends to the Mandatory Redemption
Date will be paid on the Mandatory Redemption Date; and (h) that on and after
the Mandatory Redemption Date, dividends will cease to accumulate on the
Convertible Preferred Stock. If a notice is mailed to a holder in the manner
provided above within the time prescribed, it is duly given with respect to
such holder.
On or after the Mandatory Redemption Date, each holder of the shares
of outstanding Convertible Preferred Stock (other than shares which have been
duly surrendered for conversion at or before the close of business on the
Mandatory Redemption Date) shall surrender the certificate or certificates
evidencing such shares to the Corporation at the place designated in the
redemption notice and shall thereupon be entitled to receive payment of the
Redemption Price. If, on the Mandatory Redemption Date, funds necessary for
the redemption shall be available therefor and shall have been irrevocably
deposited or set aside, then, notwithstanding that the certificates evidencing
any shares to be redeemed shall not have been surrendered, the dividends with
respect to such shares shall cease to accumulate on and after the Mandatory
Redemption Date, such shares shall no longer be deemed to be outstanding, the
holders thereof shall cease to be shareholders of the Corporation by virtue of
the ownership of such shares, and all rights whatsoever with respect to such
shares (except the right of the holders thereof to receive the Redemption Price
without interest upon surrender of their certificates) shall terminate.
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7. VOTING.
(a) No General Voting Rights. Except as otherwise provided from time
to time by the laws of Delaware or this Corporation's Restated Certificate of
Incorporation, the entire voting power for the election of directors of the
Corporation and for all other purposes shall be vested in the holders of Common
Stock which shall vote as a single class, with the holder of each share of
Common Stock being entitled to one vote in respect of such shares.
(b) Other Voting Rights. Without the consent or affirmative vote of
the holders of a majority of the outstanding shares of Convertible Preferred
Stock, voting separately as a class to the exclusion of holders of any other
shares of capital stock of the Corporation (either in writing without a
meeting, if permitted by the Certificate of Incorporation and applicable law,
or by vote at any meeting called for that purpose), the Corporation may not
amend, alter or repeal (by any means whatsoever, including, without limitation,
by merger or consolidation any provision of the Certificate of Incorporation,
any amendment or supplement thereto or this Certificate of Designations (or any
similar document relating to any series or class of preferred stock of the
Corporation), if such action would (a) increase or decrease the aggregate
number of authorized shares of Convertible Preferred Stock, (b) increase or
decrease the par value of such shares or (c) amend, alter, repeal or change the
powers, rights, privileges or preferences of the holders of shares of
Convertible Preferred Stock so as to affect them adversely, provided, however,
that the creation, issuance or increase in the amount of authorized shares of
any series of Junior Stock will not be deemed to adversely affect such powers,
rights, privileges or preferences of the Convertible Preferred Stock.
For purposes of the foregoing provisions of this Section 7, each share
of Convertible Preferred Stock shall have one vote per share. The foregoing
provisions of this Section 7 shall not apply if, at or prior to the time when
the act with respect to which such vote would otherwise be required shall be
effected, all outstanding shares of Convertible Preferred Stock shall have been
redeemed or called for redemption and sufficient funds shall have been
irrevocably deposited in trust to effect such redemption and all other steps
necessary or desirable to effect such redemption shall have been taken.
8. LIQUIDATION PREFERENCE. (i) In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of Convertible Preferred Stock shall be entitled to receive out of
the assets of the Corporation available for distribution to shareholders,
before any distribution of assets shall be made to the holders of the Common
Stock or of any other shares of Junior Stock, a liquidating distribution in the
total amount of $8,200,000 (the "Total Liquidation Preference") or an amount
equal to $8.20 per share (the "Liquidation Preference") plus an amount equal to
any accrued and accumulated but unpaid dividends thereon to the date of final
distribution to such holders, whether or not declared, without interest;
provided, however, if in accordance with the provisions of the Purchase and
Sale Agreement, dated as of March 26, 1996, as amended and restated on May 23,
1996, between the Corporation and Harris Computer Systems Corporation (the
"Purchase and Sale Agreement") the amount of the net current assets (the "Net
Assets")shown on the Final Net Current Asset Reconciliation (as defined in the
Purchase and Sale Agreement)(such amount shown, the "Actual Net Asset Amount")
is less than $12,600,000 (such lesser amount, the "Applicable Amount"), then
the Total Liquidation Preference shall be adjusted by reducing it, dollar for
dollar, to the extent of the difference (the "Difference") between the Actual
Net Asset Amount and the Applicable Amount. The Liquidation Preference shall
then be reduced by the amount (rounded to the nearest $0.01) determined by
dividing the Difference by the number of issued and outstanding shares of
Convertible Preferred Stock as of the date of the Final Net Current Asset
Reconciliation or, if later, the date any Reconciliation Disagreement (as
defined in the Purchase and Sale Agreement) is resolved. Alternatively, if the
amount of the Net Assets shown on the Final Net Current Asset Reconciliation
after resolution of all reconciliation Disagreements (as defined in the
Purchase and Sale Agreement) is in excess of the Net Assets shown on the
Projected Net Current Asset Reconciliation (as defined in the Purchase and Sale
Agreement), then the Total Liquidation Preference shall be increased, dollar
for dollar, to the extent of such excess up to $10,000,000 (such excess up to
$10,000,000, the "Excess"). The Liquidation Preference shall then be increased
by the amount (rounded to the nearest $0.01) determined by dividing the Excess
by the number of issued and outstanding shares of Convertible Preferred Stock
as of
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the date of the Final Net Current Asset Reconciliation or, if later, the date
any Reconciliation Disagreement is resolved.
(ii) The Total Liquidation Preference shall also be further
reduced to the extent that the parties to the Purchase and Sale Agreement or a
court of competent jurisdiction determines (which determination by such court
shall be final and nonappealable) that any Asset (as defined in the Purchase
and Sale Agreement) required to be transferred by the Purchase and Sale
Agreement was not in fact transferred, such reduction (the "Net Asset
Reduction") to be equal to the book value of such Asset on the Final Net
Current Asset Reconciliation or with respect to non-current assets the Audited
Balance Sheet (as defined in the Purchase and Sale Agreement) less any cash
paid to the Corporation in respect thereof. The Liquidation Preference shall
then be reduced by the amount (rounded to the $0.01) determined by dividing the
Net Asset Reduction by the number of issued and outstanding shares of
Convertible Preferred Stock as of the date the amount of the Net Asset
Reduction is determined. In addition, in accordance with the terms of the
Purchase and Sale Agreement, the Total Liquidation Preference shall be further
reduced by the amount of any Damages (as defined in the Purchase and Sale
Agreement), less any cash paid to the Corporation in respect thereof (the "Net
Damages"), incurred by the Corporation and its Representatives (as defined in
the Purchase and Sale Agreement) as a result of a wilful breach by Harris of a
representation or warranty contained in the Purchase and Sale Agreement. The
Liquidation Preference shall then be reduced by the amount (rounded to the
nearest dollar) determined by dividing the Net Damages by the number of issued
and outstanding shares of Convertible Preferred Stock as of the date the total
amount of the Net Damages is determined.
If, upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the assets available for distribution are
insufficient to pay in full the amounts payable with respect to the Convertible
Preferred Stock and any other outstanding shares of Parity Stock, the holders
of the Convertible Preferred Stock and of such other Parity Stock shall share
ratably in any distribution of assets of the Corporation in proportion to the
full respective preferential amounts to which they are entitled.
After payment to the holders of the Convertible Preferred Stock of the
full preferential amounts provided for in this Section 8, the holders of the
Convertible Preferred Stock shall not be entitled to any further participation
in any distribution of assets by the Corporation.
For purposes of this Section 8, neither a consolidation or merger of
the Corporation with or into another person nor a sale or transfer of all or
substantially all of the assets of the Corporation will be deemed a
liquidation, dissolution or winding up of the Corporation.
9. CONVERSION AND EXCHANGE RIGHTS.
(a) General Rights to Convert. Each holder of a share of Convertible
Preferred Stock shall have the right, at the option of such holder, at any time
to convert, upon the terms and provisions of this Section 9, one or more shares
of Convertible Preferred Stock into fully paid and nonassessable shares of
Common Stock of the Corporation (and such other securities and property as such
holder may be entitled to as hereinafter provided). Such conversion of shares
of Convertible Preferred Stock to shares of Common Stock shall be made at a
conversion rate of one share of Convertible Preferred Stock for a number of
shares of Common Stock equal to (x) the Liquidation Preference divided by (y)
the conversion price applicable per share of Common Stock at the time of
conversion (the "Conversion Price"). The Conversion Price shall initially be
$2.50. The Conversion Price shall be adjusted in certain instances as provided
below.
An amount in cash equal to the full cumulative dividends accrued and
accumulated but unpaid, whether or not declared and without interest, on such
shares of Convertible Preferred Stock shall be paid on the effective date of
the conversion through the last quarterly payment date that immediately
precedes the effective date of the conversion.
(b) Mechanics of Conversion. In order to convert shares of
Convertible Preferred Stock into Common Stock, the holder or holders thereof
shall surrender the certificate or certificates evidencing such
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shares of Convertible Preferred Stock at the office of the transfer agent for
the Convertible Preferred Stock (or if there is no such transfer agent, to the
secretary of the Corporation), which certificate or certificates shall be duly
endorsed to the Corporation or in blank, or accompanied by proper instruments
of transfer, accompanied by (i) a written notice to the Corporation that the
holder elects so to convert all or a specified number of such shares of
Convertible 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 and (ii) if required pursuant to Section 9(j) hereof, an
amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Corporation demonstrating that such taxes have been paid).
If more than one share of Convertible Preferred Stock shall be surrendered for
conversion at one time by the same holder, the number of full shares of Common
Stock issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of Convertible Preferred Stock so surrendered.
Shares of Convertible Preferred Stock shall be deemed to have been
converted immediately prior to the close of business on the day of the
surrender of such shares for conversion in accordance with the foregoing
provisions, and the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such Common Stock at such time. As promptly as
practicable on or after the surrender of a certificate or certificates for
conversion and the receipt of the notice relating thereto (and in any event
within five Business Days thereafter), the Corporation shall deliver or cause
to be delivered to the person or persons entitled to receive the same: (i) a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion; (ii) any cash owed in lieu of any fraction of a
share, determined in accordance with Section 9(i) hereof; (iii) if less than
the full number of shares of Convertible Preferred Stock evidenced by the
surrendered certificate or certificates is being converted, a new certificate
or certificates, of like tenor, for the number of shares evidenced by such
surrendered certificate or certificates less the number of shares being
converted; and (iv) subject to the provisions of the second paragraph of
Section 9(a), an amount in cash equal to the full cumulative dividends accrued
but unpaid on such shares of Convertible Preferred Stock through the last
quarterly dividend payment date established pursuant to Section 4 hereof that
immediately precedes the effective date of conversion. If for any reason the
Corporation is unable to pay any accrued dividends on the Convertible Preferred
Stock being converted, the Corporation will pay such dividends to the
converting holder as soon thereafter as funds of the Corporation are legally
available for such payment and may be paid under applicable credit agreements
with interest thereon, accruing at a rate of 9.00% per annum. At the request of
any such converting holder, the Corporation shall deliver to such holder a due
bill or other appropriate instrument evidencing the Corporation's obligation to
such holder. A payment or adjustment shall not be made by the Corporation upon
any conversion on account of any dividends on the Common Stock issued upon
conversion.
(c) Rights to Exchange. (i) Corporation may, at its option, cause
shares of Convertible Preferred Stock, as a whole or in part, at any time and
from time to time, to be exchanged for debentures of the Corporation having the
terms set forth in Exhibit B to the Purchase and Sale Agreement (the
"Debentures"). Such exchange of shares of Convertible Preferred Stock for the
Debentures pursuant to this Section 9(c)(i) shall be made at an exchange rate
of Debentures in the principal amount equal to the Liquidation Preference.
On the effective date of the exchange pursuant to this Section
9(c)(i), the Corporation shall pay holders of Convertible Preferred Stock to be
exchanged an amount in cash equal to the full cumulative dividends accrued and
accumulated but unpaid, whether or not declared and without interest, on such
shares of Convertible Preferred Stock through the last quarterly dividend
payment date that immediately precedes the effective date of the exchange.
(ii) Each holder of shares of Convertible Preferred Stock shall
have the right at any time after September 1, 1998 upon the terms and
conditions set forth in this Section 9(c)(ii), at the option of such holder,
whenever dividends due for four quarterly periods have not been paid, to
exchange such shares of Convertible Preferred Stock, as a whole or in part, for
Debentures. Such exchange of shares of Convertible Stock for the Debentures
shall be of an Exchange Rate of Debentures in the principal amount equal to the
Liquidation Preference plus all dividends which are accrued and accumulated but
unpaid, whether or not de-
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clared and without interest up to the calendar quarter immediately preceding
the calendar quarter in which the date of conversion occurs.
(d) Mechanics of the Exchange. In connection with the exchange
shares of Convertible Preferred Stock for the Debentures, the holder or holders
thereof shall surrender the certificate or certificates evidencing such shares
of Convertible Preferred Stock at the office of the transfer agent (or the
secretary of the Corporation if there is no such transfer agent) for the
Convertible Preferred Stock, which certificate or certificates shall be duly
endorsed to the Corporation or in blank, or accompanied by proper instruments
of transfer, accompanied by (i) a written notice to the Corporation that the
holder shall thereby exchange all or the number specified by the Corporation
and specifying the name or names (with address or addresses) in which a
certificate or certificates evidencing the Debentures are to be issued and (ii)
if required pursuant to Section 9(i) hereof, an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). When more than one share of
Convertible Preferred Stock is to be surrendered for exchange at one time by
the same holder, the principal amount of the Debentures issuable upon exchange
thereof shall be computed on the basis of the aggregate number of shares of
Convertible Preferred Stock so surrendered.
Shares of Convertible Preferred Stock shall be deemed to have been
exchanged immediately prior to the close of business on the day of the
surrender of such shares for exchange in accordance with the foregoing
provisions, and the person or persons entitled to receive the Debentures
issuable upon such exchange shall be treated for all purposes as the record
holder or holders of such Debentures at such time. As promptly as practicable
on or after the surrender of a certificate or certificates for exchange and the
receipt of the notice relating thereto (and in any event within five Business
Days thereafter), the Corporation shall deliver or cause to be delivered to the
person or persons entitled to receive the same: (i) a certificate or
certificates for the principal amount of the Debentures issuable upon such
conversion; (ii) any cash owed in lieu of any fraction of a Debenture in
accordance with Section 9(j) hereof; (iii) if less than the full number of
shares of Convertible Preferred Stock evidenced by the surrendered certificate
or certificates is being exchanged, a new certificate or certificates, of like
tenor, for the number of shares evidenced by such surrendered certificate or
certificates less the number of shares being exchanged; and (iv) if exchanged
pursuant to Section 9(c)(i), subject to the provisions of the second paragraph
of Section 9(c)(i), an amount in cash equal to the full cumulative dividends
accrued but unpaid on such shares of Convertible Preferred Stock through the
last quarterly dividend payment date established pursuant to Section 4 hereof
that immediately precedes the effective date of exchange. If for any reason
the Corporation is unable to pay any accrued dividends on the Convertible
Preferred Stock being exchanged pursuant to Section 9(c)(i), the Corporation
will pay such dividends to the converting holder as soon thereafter as funds of
the Corporation are legally available for such payment and may be paid under
applicable credit agreements with interest thereon, accruing at a rate of 9.00%
per annum. At the request of any such holder converting pursuant to Section
9(c)(i), the Corporation shall deliver to such holder a due bill or other
appropriate instrument evidencing the Corporation's obligation to such holder.
(e) Adjustments to Conversion Price and the Triggering Price. The
Conversion Price and Triggering Price shall be adjusted from time to time as
follows:
(i) In case the Corporation shall pay or make a dividend or other
distribution on any class of capital stock of the Corporation in Common
Stock, the Conversion Price and Triggering Price in effect at the close of
business on the date fixed for the determination of shareholders entitled
to receive such dividend or other distribution shall be reduced to a price
determined by multiplying such Conversion Price and Triggering Price each
by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination and of which the denominator shall be the sum of such
number of shares and the total number of shares constituting such dividend
or other distribution, such reduction to become effective at the opening of
business on the day following the date fixed for such determination. In
the event that such dividend or distribution is not so paid or made, the
Conversion Price and Triggering Price shall be readjusted to be the
Conversion Price and Triggering Price which would then be in
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effect if such date fixed for the determination of shareholders entitled to
receive such dividend or other distribution had not been fixed.
(ii) In case the Corporation shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock (or securities convertible
into (which for purposes of this paragraph (ii) shall also mean
exchangeable for) Common Stock) at a price per share less than the Current
Market Price (as defined in Section 13 hereof) of Common Stock on the date
fixed for the determination of shareholders entitled to receive such rights
or warrants, the Conversion Price and Triggering Price in effect at the
close of business on the date fixed for such determination shall be reduced
to a price determined by multiplying such Conversion Price and Triggering
Price each by a fraction of which the numerator shall be the total number
of shares of Common Stock outstanding at the close of business on the date
fixed for such determination plus 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 (or the aggregate
conversion price of the convertible securities so offered) would purchase
at such Current Market Price and of which the denominator shall be the
number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the total number of additional
shares of Common Stock so offered for subscription or purchase (or into
which the convertible securities so offered are convertible), such
reduction to become effective at the opening of business on the day
following the date fixed for such determination. To the extent that shares
of Common Stock are not delivered after the expiration of such rights or
warrants, the Conversion Price and Triggering Price shall be readjusted to
the Conversion Price and Triggering Price which would then be in effect had
the adjustments made upon the issuance of such rights or warrants been made
on the basis of delivery of only the number of shares of Common Stock
actually delivered. In the event that such rights or warrants are not so
issued, the Conversion Price and Triggering Price shall be readjusted to be
the Conversion Price and Triggering Price which would then be in effect if
the date fixed for the determination of shareholders entitled to receive
such rights or warrants had not been fixed.
(iii) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price and
Triggering Price in effect at the close of business on the date upon which
such subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of Common Stock shall each be
combined into a smaller number of shares of Common Stock, the Conversion
Price and Triggering Price in effect at the close of business on the date
upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become
effective at the opening of business on the day following the date upon
which such subdivision or combination becomes effective.
(iv) Notwithstanding any other provision of this Section 9, no
adjustment in the Conversion Price or Triggering Price shall be required
unless such adjustment would require an increase or decrease of at least 1%
in the Conversion Price or Triggering Price, as the case may be ; provided,
however, that any adjustments which by reason of this paragraph (iv) are
not required to be made shall be carried forward and taken into account in
determining whether any subsequent adjustment shall be required. Once the
cumulative effect of any such adjustments that are carried forward would
result in an increase or decrease of at least 1% in the Conversion Price or
Triggering Price, then the Conversion Price or Triggering Price shall be
changed to reflect all adjustments called for by this Section 9 and not
previously made.
(v) Notwithstanding any other provision of this Section 9, no
adjustment to the Conversion Price or Triggering Price shall reduce the
Conversion Price or Triggering Price below the then par value per share of
the Common Stock, and any such purported adjustment shall instead reduce
the Conversion Price or Triggering Price to such par value.
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(vi) Whenever the Conversion Price or Triggering Price is adjusted as
provided herein, the Corporation shall compute the adjusted Conversion
Price or Triggering Price in accordance with this Section 9 and shall
prepare a certificate signed by the Treasurer of the Corporation setting
forth the adjusted Conversion Price or Triggering Price and showing in
reasonable detail the facts upon which such adjustment is based, and the
corporation shall mail a copy of such certificate as soon as practicable to
the holders of record of the shares of Convertible Preferred Stock.
(vii) In any case in which this Section 9 shall require that an
adjustment shall become effective on the day following a record date for an
event, the Corporation may defer until the occurrence of such event (i)
issuing to the holder of any share of Convertible Preferred Stock, if such
share is converted after such record date and before the occurrence of such
event, the additional Common Stock issuable upon such conversion by reason
of the adjustment required by such event over and above Common Stock
issuable upon such conversion before giving effect to such adjustment and
(ii) paying to such holders any amount in cash in lieu of a fractional
share of Common Stock pursuant to paragraph (i) of this Section 9;
provided, that, upon request of any such holder, the Corporation shall
deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional Common Stock and
such cash, upon the occurrence of the event requiring such adjustment; and
provided, further, that the failure of such event to occur shall relieve
the Corporation of the obligation to make an additional distribution upon
conversion by reason of the adjustment required by the occurrence of such
event.
(viii) The Corporation may make such reductions in the Conversion
Price, in addition to those required by this Section 9, as the Board of
Directors considers to be advisable in order that any event treated for
Federal income tax purposes as a dividend or distribution of stock (or
rights to acquire stock) shall not be taxable to the recipients. The
Corporation at any time or from time to time, as permitted by applicable
law and to the extent the Board of Directors determines that such reduction
would be in the best interests of the Corporation, may reduce the
Conversion Price by any amount for any period of time, if the period is at
least twenty (20) days and if the reduction is irrevocable during the
period.
(ix) Whenever the Conversion Price is reduced by the Corporation
pursuant to paragraph (viii) of this Section 9(e), the Corporation shall
mail to holders of the Convertible Preferred Stock a notice of the
reduction. The Corporation shall mail such notice by first class mail,
postage prepaid, at least fifteen (15) days before the date the reduced
Conversion Price takes effect, to each holder of record of shares of
Convertible Preferred Stock at such holder's address as shown on the stock
register of the Corporation. The notice shall state the reduced Conversion
Price and the period it will be in effect. If a notice is mailed to a
holder in the manner provided above within the time prescribed, it is duly
given with respect to such holder.
(f) Reclassification, Consolidation, Merger or Sale of Assets. In
the event that the Corporation shall be a party to any transaction (including
without limitation any (i) 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), (ii) any consolidation or merger of the Corporation with
or into any other person or 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), (iii) any sale or transfer of all or substantially all of the
assets of the Corporation, or (iv) any compulsory share exchange) pursuant to
which the Common Stock shall be exchanged for, converted into, acquired for or
constitute solely the right to receive other securities, cash or other
property, then appropriate provision shall be made as part of the terms of such
transaction whereby the holder of each share of Convertible Preferred Stock
then outstanding shall thereafter have the right to convert such share only
into the kind and amount of securities, cash and other property receivable upon
such recapitalization, reclassification, consolidation, merger, sale, transfer
or share exchange by a holder of the number of shares of Common Stock into
which such share of Convertible Preferred Stock might have been converted
immediately prior to such transaction. The Corporation or the person formed by
such consolidation or resulting from such merger or which acquired such assets
or which
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acquired 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 9. The above provisions shall
similarly apply to successive transactions of the type described in this
paragraph.
(g) Prior Notice of Certain Events. In case at any time:
(i) the Corporation shall (1) declare any dividend or any other
distribution on its Common Stock, other than (A) a dividend payable solely
in shares of Common Stock or (B) the Rights or (2) declare or authorize a
redemption or repurchase of any of the then outstanding shares of Common
Stock or any other Junior 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 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 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 compulsory share exchange whereby the Common Stock is
converted into other securities, cash or other property; or
(iv) of the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation;
then, in any such case, the Corporation shall cause to be mailed to the holders
of record of the Convertible Preferred Stock, at their last addresses as they
shall appear upon the stock transfer books of the Corporation, at least twenty
(20) days prior to the applicable record date or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, redemption, repurchase or granting
of 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, liquidation, dissolution 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, liquidation, dissolution
or winding up. 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) Reservation of Shares, etc. The Corporation shall at all times
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Stock, solely for the purpose of effecting the conversion
of shares of Convertible Preferred Stock, the full number of shares of Common
Stock then deliverable upon the conversion of all shares of Convertible
Preferred Stock then outstanding. If the Corporation shall issue any
securities or make any change in its capital structure which would change the
number of shares of Common Stock into which each share of the Convertible
Preferred Stock shall be convertible as herein provided, the Corporation shall
at the same time also make proper provision so that thereafter there shall be a
sufficient number of shares of Common Stock authorized and reserved, free from
preemptive rights, for conversion of the outstanding Convertible Preferred
Stock on the new basis.
If any Debentures or shares of Common Stock required to be reserved
for purposes of exchange or conversion of the Convertible Preferred Stock
hereunder require registration with or approval of any governmental authority
under any Federal or State law before such debentures or shares may be issued
upon exchange or conversion, the Corporation will in good faith and as
expeditiously as possible endeavor to
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cause such debentures or shares to be duly registered or approved, as the case
may be. The Corporation will, in good faith and as expeditiously as possible,
endeavor, if permitted by the rules of the applicable exchange or quotation
system, list and keep listed or quote and keep quoted on the principal exchange
or quotation system of its Common Stock, as the case may be, upon official
notice of issuance or quotation, all Debentures or shares of Common Stock
issuable upon exchange or conversion of the Convertible Preferred Stock.
(i) No Fractional Shares or Debentures. No fractional shares or
scrip representing fractional shares of Common Stock shall be issued upon
conversion of Convertible Preferred Stock. Instead of any fraction of a share
which would otherwise be issuable upon conversion of any shares of Convertible
Preferred Stock, the Corporation shall pay a cash adjustment in respect of such
fraction in an amount equal to the same fraction of the Closing Price (as
defined in Section 13 hereof) of a share of Common Stock (or, if there is no
such Closing Price, the fair market value of a share of Common Stock, as
determined in good faith by the Board of Directors or in any manner prescribed
by the Board of Directors) at the close of business on the Trading Day
immediately preceding the date of conversion.
The Debentures will be issued in denominations of $1,000 and integral
multiples thereof. No fractional interests in the Debentures shall be issued
upon exchange of conversion of Convertible Preferred Stock. Instead of any
fraction of a Debenture which would otherwise be issuable upon exchange of any
shares of Convertible Preferred Stock, the Corporation shall pay a cash
adjustment in respect of such fraction in an amount equal to the same fraction
of the Closing Price (as defined in Section 13 hereof) of a Debenture in the
principal amount of $1,000 (or, if there is no such Closing Price, the fair
market value of a Debenture in such principal amount, as determined in good
faith by the Board of Directors or in any manner prescribed by the Board of
Directors) at the close of business on the Trading Day immediately preceding
the date of exchange.
(j) Transfer Taxes, etc. The Corporation will pay any and all taxes
that may be payable in respect of the issue or delivery of shares of Common
Stock or Debentures on conversion or exchange of shares of Convertible
Preferred Stock pursuant hereto. 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 shares of Common Stock or Debentures in a
name other than that in which the shares of Convertible Preferred Stock so
exchanged or converted were registered, and no such issue or delivery shall be
made unless and until the person requesting such issue 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.
10. EXCHANGES. Certificates representing shares of Convertible
Preferred Stock shall be exchangeable, at the option of the holder, for a new
certificate or certificates of the same or different denominations representing
in the aggregate the same number of shares of Convertible Preferred Stock.
11. OUTSTANDING SHARES. For purposes of this Certificate of
Designations, all shares of Convertible Preferred Stock shall be deemed
outstanding except for (a) shares of Convertible Preferred Stock held of record
or beneficially by the Corporation or any subsidiary of the Corporation; (b)
from the date of surrender of certificates representing Convertible Preferred
Stock for conversion pursuant to Section 9 hereof, all shares of Convertible
Preferred Stock which have been converted into Common Stock or other securities
or property pursuant to Section 9 hereof; and (c) from the date fixed for
redemption pursuant to Section 5 or 6 hereof, all shares of Convertible
Preferred Stock which have been called for redemption, provided that funds
necessary for such redemption are available therefor and have been irrevocably
deposited or set aside for such purpose and all other steps necessary to effect
such redemption shall have been taken.
12. STATUS OF CONVERTIBLE PREFERRED STOCK UPON RETIREMENT. Shares of
Convertible Preferred Stock which are acquired or redeemed by the Corporation
or converted pursuant to Section 9 shall return to the status of authorized and
unissued shares of Preferred Stock of the Corporation, without designation as
to series. Upon the acquisition or redemption by the Corporation or conversion
pursuant to Section 9 of all
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outstanding shares of Convertible Preferred Stock, all provisions of this
Certificate of Designations shall cease to be of further effect.
13. DEFINITIONS. For purposes of this Certificate of Designation,
the following terms shall have the meanings indicated:
(a) "Board of Directors" shall mean the board of directors of the
Corporation or any committee authorized by such board of directors to perform
any of its responsibilities with respect to the Convertible Preferred Stock.
(b) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which commercial banks in the State of New York are authorized or
required by law or executive order to close or a day which is or is declared a
national or New York state holiday;
(c) "Closing Price" with respect to any securities on any day shall
mean the closing sale price regular way on such day or, in case no such sale
takes place on such day, the average of the reported closing bid and asked
prices, regular way, in each case on the principal national securities
exchange or quotation system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or admitted to trading on any
national securities exchange or quotation system, the average of the closing
bid and asked prices of such security on the over-the-counter market on the day
in question 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 of the Corporation for that purpose or a
price determined in good faith by the Board.
(d) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the thirty consecutive Trading
Days immediately prior to the date in question.
(e) "fair market value" shall mean the amount which a willing buyer
would pay a willing seller in an arm's length transaction.
(f) "full cumulative dividends" shall mean, with respect to the
Convertible Preferred Stock, or any other capital stock of the Corporation, as
of any date the amount of accumulated, accrued and unpaid dividends payable on
such shares of Convertible Preferred Stock, or other capital stock, as the case
may be, whether or not earned or declared and whether or not there shall be
funds legally available for the payment thereof.
(g) "record date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or in which
the Common Stock (or other applicable security) is exchanged or converted into
any combination of cash, securities or other property, the date fixed for
determination of shareholders entitled to receive such cash, securities or
other property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise), and with respect to any subdivision or
combination of the Common Stock, the effective date of such subdivision or
combination.
(h) "Rights" shall mean the rights of the Corporation that are
issuable under the Corporation's Rights Agreement, dated July 31, 1992 and as
amended from time to time, or rights to purchase any capital stock of the
Corporation under any successor stockholder rights plan or plans adopted in
replacement of the Corporations Rights Agreement.
(i) "Trading Day" shall mean (x) if the applicable security is quoted
on the Nasdaq National Market of The Nasdaq Stock Market, a day on which trades
may be made on such Nasdaq National Market or (y) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or another
national securities exchange, a day on which the New York Stock Exchange or
another national securities
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exchange is open for business or (z) if the applicable security is not so
listed, admitted for trading or quoted, any day other than a Saturday or Sunday
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations to be duly executed in its corporate name this 27th day of June,
1996.
CONCURRENT COMPUTER CORPORATION
By:
-----------------------------
Name: John T. Stihl
Title: Chairman, President and Chief Executive Officer
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