Exhibit 3.4
NUCO2 INC.
ARTICLES OF AMENDMENT
ARTICLES OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF 8% CUMULATIVE CONVERTIBLE PREFERRED STOCK
ARTICLES OF DESIGNATIONS
NUCO2 INC. (the "Company"), a company organized and existing under
the Florida Business Corporation Act (the "FBCA"), certifies that pursuant to
the authority contained in its Articles of Incorporation (the "Articles of
Incorporation") and its By-laws (the "By-laws"), and in accordance with Section
607.0602 of the FBCA, the board of directors of the Company (the "Board of
Directors") at a meeting duly called and held on May 4, 2000, duly approved and
adopted the following resolution, which resolution remains in full force and
effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the Board of
Directors by the Articles of Incorporation and By-laws, the Board of Directors
does hereby create, authorize and provide for the issue of a series of Preferred
Stock having the following designation, voting powers, preferences and relative,
participating, optional and other special rights:
Certain capitalized terms used herein are defined in Section 16.
1. Number and Designation. The Company shall have a series of
Preferred Stock, which shall be designated as its 8% Cumulative Convertible
Preferred Stock (the "Convertible Preferred Stock"), no par value, with 5,000
shares initially authorized. Unless otherwise specified, references herein to
any "Section" refer to the Section number specified in these Articles of
Designations.
2. Issuance. The Company may issue up to 5,000 shares of Convertible
Preferred Stock in accordance with the Purchase Agreement.
3. Registered Form; Liquidation Preference; Registrar. Certificates
for shares of Convertible Preferred Stock shall be issuable only in registered
form and only with an initial Liquidation Preference of $1,000 per share. The
Company shall serve as initial Registrar and Transfer Agent (the "Registrar")
for the Convertible Preferred Stock.
4. Registration. Shares of the Convertible Preferred Stock have not
been registered under the Securities Act of 1933, as amended (the "Securities
Act") and may not be resold, pledged or otherwise transferred prior to the date
when they may be resold pursuant to Rule 144 under the Securities Act other than
(i) to the Company, (ii) pursuant to an exemption from registration under the
Securities Act or (iii) pursuant to an effective registration statement under
the Securities Act, in each case in accordance with any applicable securities
laws of any state of the United States.
5. Paying Agent and Conversion Agent. (a) The Company shall maintain
(i) an office or agency where shares of Convertible Preferred Stock may be
presented for
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payment (the "Paying Agent"), (ii) an office or agency where shares of
Convertible Preferred Stock may be presented for conversion (the "Conversion
Agent"), and (iii) a Registrar, which shall be an office or an agency where
shares of Convertible Preferred Stock may be presented for transfer. The Company
may appoint the Registrar, the Paying Agent and the Conversion Agent and may
appoint one or more additional paying agents and one or more additional
conversion agents in such other locations as it shall determine. The term
"Paying Agent" includes any additional paying agent, and the term "Conversion
Agent" includes any additional conversion agent. The Company may change any
Paying Agent or Conversion Agent without prior notice to any holder. The Company
shall notify the Registrar of the name and address of any Paying Agent or
Conversion Agent appointed by the Company. If the Company fails to appoint or
maintain another entity as Paying Agent or Conversion Agent, the Registrar shall
act as such. Notwithstanding the foregoing, the Company or any of its Affiliates
may act as Paying Agent, Registrar, or Conversion Agent.
(b) Neither the Company nor the Registrar shall be required (i) to
issue, countersign or register the transfer of or exchange any share of
Convertible Preferred Stock during a period beginning at the opening of business
5 days before any Redemption Date (as defined under Section 10(c)) and ending at
the close of business on such Redemption Date or (ii) to register the transfer
of or exchange any share of Convertible Preferred Stock so selected for
redemption. This Section 5(b) shall not apply to any conversion of Convertible
Preferred Stock in accordance with Section 12.
(c) Payments due on the shares of Convertible Preferred Stock shall
be payable at the office or agency of the Company maintained for such purpose.
If any such payment is in cash, it shall be payable by wire transfer (provided
that appropriate wire instructions have been received by the Registrar at least
15 days prior to the applicable date of payment) to a United States dollar
account maintained by the holder with a bank located in New York City.
6. Dividend Rights. (a) The Company shall pay, and the holders of
the shares of Convertible Preferred Stock shall be entitled to receive,
cumulative dividends from the date of initial issuance of such shares of
Convertible Preferred Stock at a rate of 8.00% per annum on the amount of the
then-effective Liquidation Preference of the shares of Convertible Preferred
Stock. Dividends will be computed on the basis of a 360-day year of twelve
30-day months and will be payable in accordance with Section 11 hereof.
Dividends will be payable quarterly in arrears on January 31, April 30, July 31
and October 31 of each year (each a "Dividend Payment Date"), commencing
(subject to the next sentence) on July 31, 2000, for so long as any shares of
Convertible Preferred Stock are outstanding; provided, however, that if such
date is not a Business Day, then the Dividend Payment Date shall be the next
Business Day. Dividends, whether or not the Company has earnings or profits,
whether or not there are funds legally available for the payment of such
dividends and whether declared or undeclared, will accumulate to the extent they
are not paid on the Dividend Payment Date for the period to which they relate.
The Company will take all actions required or permitted under the FBCA to permit
the payment or accrual of dividends on the shares of Convertible Preferred
Stock. Accrued dividends shall be payable quarterly on each Dividend Payment
Date to the holders of record of the Convertible Preferred Stock as of the close
of business on the applicable Dividend Record Date. Accrued dividends that are
not paid in full in cash on any such Dividend Payment Date (whether or not
declared and whether or not there are sufficient funds legally available for the
payment thereof) shall be added cumulatively to the Liquidation Preference on
the applicable Dividend Payment Date and thereafter
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remain a part thereof. Accrued dividends added to the Liquidation Preference of
a share of Convertible Preferred Stock in accordance with the foregoing
provisions of this Section 6(a) are sometimes referred to in these Articles as
"Accumulated Dividends". For purposes of determining the amount of dividends
"accrued" (i) as of the first Dividend Payment Date and as of any date that is
not a Dividend Payment Date, such amount shall be calculated on the basis of the
rate per annum specified above in this paragraph for the actual number of days
elapsed from and including the Closing Date (in case of the first Dividend
Payment Date and any date prior to the first Dividend Payment Date) or the last
preceding Dividend Payment Date (in case of any other date) to the date as of
which such determination is to be made, based on a 360-day year, and (ii) as of
any Dividend Payment Date after the first Dividend Payment Date, such amount
shall be calculated on the basis of such rate per annum based on a 360-day year
of twelve 30-day months of twelve 30-day months. Whenever the Company shall
declare or pay any dividend on any Convertible Preferred Stock, the holders of
the Convertible Preferred Stock shall be entitled to receive such dividends on a
per share basis.
(b) In addition to all dividends payable pursuant to Section 6(a),
whenever the Company shall declare or pay any dividend on its Common Stock, the
holders of the Convertible Preferred Stock shall be entitled to receive such
dividends on a ratable as-converted basis (calculated as if all shares of
Convertible Preferred Stock had been converted directly or indirectly into
Common Stock). Dividends payable pursuant to this Section 6(b) shall not reduce
any dividends payable pursuant to Section 6(a).
7. Payment of Dividends; Mechanics of Payment; Dividend Rights
Preserved. (a) Subject to Sections 6 and 11, dividends on any share of
Convertible Preferred Stock that are payable, and are punctually paid or duly
provided for, on any Dividend Payment Date shall be paid in arrears to the
person in whose name such share of Convertible Preferred Stock (or one or more
predecessor shares of Convertible Preferred Stock) is registered at the close of
business on the next preceding January 15, April 15, July 15 and October 15
(each a "Dividend Record Date").
(b) Unless full cumulative dividends on all outstanding shares of
Convertible Preferred Stock for all past dividend periods shall have been
declared and paid, or declared and a sufficient sum for the payment thereof set
apart, then:
(i) no dividend (other than (A) with respect to Junior Shares, a
dividend payable solely in any Junior Shares, or (B) with respect to
Parity Shares, a dividend payable solely in Junior Shares or Parity
Shares, or (C) with respect to Parity Shares, a partial dividend
paid pro rata on such Parity Shares and the shares of Convertible
Preferred Stock) shall be declared or paid upon, or any sum set
apart for the payment of dividends upon, any Junior Shares or Parity
Shares, respectively;
(ii) no other distribution shall be declared or made upon, or any
sum set apart for the payment of any distribution upon, any Junior
Shares or Parity Shares;
(iii) no Junior Shares or Parity Shares or any warrants, rights,
calls or options (other than any cashless exercises of options)
exercisable for or convertible into any Parity Share or Junior Share
shall be purchased, redeemed or otherwise acquired (other than in
exchange
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for other Junior Shares or Parity Shares, respectively) by the
Company or any of its Subsidiaries; and
(iv) no monies shall be paid into or set apart or made available for
a sinking or other like fund for the purchase, redemption or other
acquisition of any Junior Shares or Parity Shares or any warrants,
rights, calls or options exercisable for or convertible into any
Parity Shares or Junior Shares by the Company or any of its
Subsidiaries (other than any cashless exercises of options).
Except as provided in Sections 6 or 12 hereof, holders of
Convertible Preferred Stock will not be entitled to any dividends, whether
payable in cash, property or stock, in excess of the full cumulative dividends
as herein described.
(c) The Company will notify the Registrar and give notice to the
holders of the Convertible Preferred Stock no later than the close of business
on the tenth Business Day prior to any Dividend Record Date for each dividend as
to whether it will pay such dividend.
(d) Subject to the foregoing provisions of this Section 7, each
share of Convertible Preferred Stock delivered under these Articles of
Designations upon registration of transfer of or in exchange for or in lieu of
any other share of Convertible Preferred Stock shall carry the rights to
dividends accumulated and unpaid, and to accrue, that were carried by such other
shares of Convertible Preferred Stock.
(e) The holder of record of a share of Convertible Preferred Stock
at the close of business on a Dividend Record Date with respect to the payment
of dividends on the shares of Convertible Preferred Stock will be entitled to
receive such dividends with respect to such share of Convertible Preferred Stock
on the corresponding Dividend Payment Date, notwithstanding the conversion of
such share after such Dividend Record Date and prior to such Dividend Payment
Date.
8. Voting Rights. (a) The holders of record of shares of Convertible
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this Section 8 or as otherwise provided by law.
(b) The holders of record of shares of Convertible Preferred Stock
shall be entitled to vote on all matters that the holders of the Company's
Common Stock are entitled to vote upon.
(c) In addition to the voting rights set forth above, the approval
of the holders of at least a majority of the then Outstanding shares of
Convertible Preferred Stock voting or consenting, as the case may be, as one
class, will be required for the Company to:
(i) amend the Articles of Incorporation, these Articles of
Designations or the By-Laws so as to (A) affect adversely the
rights, preferences (including, without limitation, liquidation
preferences, conversion price, dividend rate and redemption
provisions), privileges or voting rights of holders of the shares of
Convertible Preferred Stock, or (B) increase or decrease the number
of authorized shares of Convertible Preferred Stock;
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(ii) enter into, or permit any of its Subsidiaries to enter into,
any agreement that would impose material restrictions on the
Company's ability to honor the exercise of any rights of the holders
of the Convertible Preferred Stock;
(iii) authorize or create, issue, modify the terms of or increase or
decrease the authorized amount of any Senior Shares;
(iv) issue any shares of Convertible Preferred Stock other than
pursuant to the terms of the Purchase Agreement as in effect on the
Closing Date.
(d) In exercising the voting rights set forth in Section 8(b), each
share of Convertible Preferred Stock shall be entitled to vote on an
as-converted basis with the holders of the Company's Common Stock. In exercising
the other voting rights set forth in this Section 8 each share of Convertible
Preferred Stock entitled to vote shall have one vote per share, except that when
any other series of preferred stock shall have the right to vote with the
Convertible Preferred Stock as a single class on any matter not specified in
this Section 8, then the Convertible Preferred Stock and such other series of
preferred stock shall have with respect to such matters one vote per $1,000 of
the aggregate liquidation preference of all shares of Convertible Preferred
Stock and all shares of such other series of preferred stock.
9. Ranking. (a) The shares of Convertible Preferred Stock will, with
respect to dividend rights and rights on liquidation, winding-up and
dissolution, rank (i) senior to all shares of Common Stock (whether issued in
one or more classes) and to each other class of capital stock or series of
Preferred Stock of the Company, the terms of which do not expressly provide that
it ranks senior to or on a parity with the shares of Convertible Preferred Stock
as to dividend rights and rights on liquidation, winding-up and dissolution of
the Company (collectively referred to, together with all shares of Common Stock
(whether issued in one or more classes) of the Company, as "Junior Shares");
(ii) on a parity with additional shares of Convertible Preferred Stock issued by
the Company and each other class of capital stock or series of Preferred Stock
of the Company issued by the Company, the terms of which expressly provide that
such class or series will rank on a parity with the shares of Convertible
Preferred Stock as to dividend rights and rights on liquidation, winding-up and
dissolution of the Company (collectively referred to as "Parity Shares"); and
(iii) junior to each class of capital stock or series of Preferred Stock of the
Company issued by the Company in compliance with Section 8 hereof, the terms of
which expressly provide that such class or series will rank senior to the shares
of Convertible Preferred Stock as to dividend rights and rights upon
liquidation, winding-up and dissolution of the Company (collectively referred to
as "Senior Shares").
(b) No dividend whatsoever shall be declared or paid upon, or any
sum set apart for the payment of dividends upon, any outstanding shares of
Convertible Preferred Stock with respect to any dividend period unless all
dividends for all preceding dividend periods have been declared and paid, or
declared and a sufficient sum set apart for the payment of such dividends, upon
all outstanding Senior Shares.
(c) In the event of any liquidation, dissolution or winding-up of
the Company, whether voluntary or involuntary, the holders of the shares of
Convertible Preferred Stock then Outstanding
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shall be entitled to receive, prior and in preference to any distribution of any
of the assets of the Company to the holders of shares of Common Stock or Junior
Shares by reason of their ownership thereof, an amount equal to the greater of
(i) the then effective Liquidation Preference of their shares of Convertible
Preferred Stock, plus an amount equal to all dividends accrued and unpaid
thereon from the last Dividend Payment Date to the date fixed for liquidation,
dissolution or winding-up or (ii) the amount such holders would receive if such
holders converted, directly or indirectly in accordance with their terms, their
shares of Convertible Preferred Stock into Common Stock immediately prior to
such liquidation, dissolution or winding up.
(d) If upon the occurrence of such event the assets of the Company
shall be insufficient to permit the payment to such holders of the full
preferential amount and all liquidating payments on all Parity Shares, the
entire assets of the Company legally available for distribution shall be
distributed among the holders of the shares of Convertible Preferred Stock and
the holders of all Parity Shares ratably in accordance with the respective
amounts that would be payable on such shares of Convertible Preferred Stock and
any such Parity Shares if all amounts payable thereon were paid in full. After
payment of the full preferential amount (and, if applicable, an amount equal to
a pro rata dividend to the holders of Outstanding shares of Convertible
Preferred Stock), such holders shall not be entitled to any further
participation in any distribution of assets of the Company.
10. Redemption. (a) The shares of Convertible Preferred Stock may be
redeemed by the Company at any time commencing after the fourth anniversary of
the Closing Date (the "Fourth Anniversary Date"), only in whole and not in part,
at the election of the Company (an "Optional Redemption"), at a redemption price
(the "Redemption Price") payable in cash equal to 100% of the then effective
Liquidation Preference, plus accrued and unpaid dividends thereon from the last
Dividend Payment Date to the date of redemption (the "Optional Redemption
Date").
(b) Shares of Convertible Preferred Stock (if not earlier redeemed
or converted) shall be mandatorily redeemed by the Company (a "Mandatory
Redemption") upon a Change in Control within 30 days after the Change in Control
Date (the date of such redemption being the "Mandatory Redemption Date") at a
Redemption Price payable in cash equal to 100% of the then effective Liquidation
Preference plus accrued and unpaid dividends thereon from the last Dividend
Payment Date to the Mandatory Redemption Date plus if the Mandatory Redemption
Date is on or prior to the Fourth Anniversary Date, the amount of any dividends
that would have accrued and been payable on the Convertible Preferred Stock from
the Redemption Date through the Fourth Anniversary Date.
(c) In the event of an Optional Redemption or a Mandatory
Redemption, the Company shall give a redemption notice (the "Redemption Notice")
to the holders (A) not fewer than 30 days nor more than 60 days before the
redemption date in the case of an Optional Redemption or (B) within 5 days after
the Change in Control Date in the case of a Mandatory Redemption (the Mandatory
Redemption Date or the Optional Redemption Date, as applicable, is hereinafter
referred to as the "Redemption Date"). Whenever a Redemption Notice is required
to be delivered to the holders, such notice shall provide the information set
forth below and be given by first class mail, postage prepaid to each holder of
shares of Convertible Preferred Stock, at such holder's
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address appearing in the Convertible Preferred Share Register. All Redemption
Notices and shall state:
(i) the Redemption Date;
(ii) the applicable Redemption Price;
(iii) that on the Redemption Date, the Liquidation Preference,
together with all accrued and unpaid dividends from the last
Dividend Payment Date to the Redemption Date, plus the amounts, if
any, required by Section 10(b) if the Mandatory Redemption Date is
on or prior to the Fourth Anniversary Date, will become due and
payable upon each such share of Convertible Preferred Stock to be
redeemed and that dividends thereon will cease to accrue on and
after said date;
(iv) the conversion price, the date on which the right to convert
shares of Convertible Preferred Stock to be redeemed will terminate
and the place or places where such shares of Convertible Preferred
Stock may be surrendered for conversion;
(v) the place or places where such shares of Convertible Preferred
Stock are to be surrendered for payment of the Redemption Price and
the other amounts which are then payable; and
(vi) if a Mandatory Redemption pursuant to Section 10(b), the
relevant circumstances and facts regarding the Change in Control.
(d) The Redemption Notice shall be given by the Company or, at the
Company's request, by the Registrar in the name and at the expense of the
Company; provided that if the Company so requests, it shall provide the
Registrar adequate time, as reasonably determined by the Registrar, to deliver
such notices in a timely fashion.
(e) Prior to any Redemption Date, the Company shall deposit with the
Registrar or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust) an amount of consideration sufficient to pay
the Liquidation Preference of all the shares of Convertible Preferred Stock that
are to be redeemed on that date plus all accrued and unpaid dividends thereon
from the last Dividend Payment Date to the Redemption Date plus the amounts, if
any, required by Section 10(b) if the Mandatory Redemption Date is on or prior
to the Fourth Anniversary Date. If any share of Convertible Preferred Stock
called for redemption is converted, any consideration deposited with the
Registrar or with any Paying Agent or so segregated and held in trust for the
redemption of such share of Convertible Preferred Stock shall be paid or
delivered to the Company upon Company Order or, if then held by the Company,
shall be discharged from such trust.
(f) Notice of redemption having been given as aforesaid, the shares
of Convertible Preferred Stock so to be redeemed shall, on the Redemption Date,
become due and payable at the Liquidation Preference therein specified plus all
accrued and unpaid dividends thereon from the last Dividend Payment Date to the
Redemption Date plus the amounts, if any, required by Section
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10(b) if the Mandatory Redemption Date is on or prior to the Fourth Anniversary
Date, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued but unpaid dividends and unaccrued
dividends through the Fourth Anniversary Date) dividends on such shares of
Convertible Preferred Stock shall cease to accrue and such shares shall cease to
be convertible into shares of Common Stock. Upon surrender of any such shares of
Convertible Preferred Stock for redemption in accordance with said notice, such
shares of Convertible Preferred Stock shall be redeemed by the Company at the
applicable Liquidation Preference, together with all accrued and unpaid
dividends thereon from the last Dividend Payment Date to the Redemption Date
plus the amounts, if any, required by Section 10(b) if the Mandatory Redemption
Date is on or prior to the Fourth Anniversary Date. If any share of Convertible
Preferred Stock called for redemption shall not be so paid upon surrender
thereof for redemption, the Liquidation Preference thereof, and all accrued and
unpaid dividends thereon from the last Dividend Payment Date to the Redemption
Date plus the amounts, if any, required by Section 10(b) if the Mandatory
Redemption Date is on or prior to the Fourth Anniversary Date, shall, until
paid, bear interest from the Redemption Date at the dividend rate payable on the
shares of Convertible Preferred Stock and such shares shall remain convertible.
(g) If the Convertible Preferred Stock is redeemed subsequent to a
Dividend Record Date with respect to any Dividend Payment Date and on or prior
to such Dividend Payment Date, then any accrued dividends payable on such
Dividend Payment Date will be paid to the person in whose name such share of
Convertible Preferred Stock is registered at the close of business on such
Dividend Record Date.
11. Method of Payments. The Company shall make all dividend payments
in cash. Any dividends not paid in cash on a current basis on the applicable
Dividend Payment Date shall constitute Accumulated Dividends. Accumulated
Dividends shall be added to the Liquidation Preference. Dividends may not be
paid by delivery of shares of Convertible Preferred Stock.
12. Conversion. (a) Subject to and upon compliance with the
provisions of these Articles of Designations, at the option of:
(I) the holder thereof (a "Holder Conversion"), any share of
Convertible Preferred Stock may be converted at any time into a
number of fully paid and nonassessable shares of Common Stock
(calculated as to each conversion to the nearest 1/100 of a share)
equal to (i) the then effective Liquidation Preference thereof plus
accrued and unpaid dividends to the date of conversion plus, if the
date of conversion is prior to the Fourth Anniversary Date and there
has been a public announcement of a Change in Control, a public
announcement by the Company of a transaction that would result in a
Change in Control or a public announcement by any Person of an
intention to effect a Change in Control, the amount of any dividends
that would have accrued and been payable from the date of conversion
to the Fourth Anniversary Date divided by (ii) the Conversion Price
in effect at the time of conversion; or
(II) the Company (a "Company Conversion") after the second
anniversary of the Closing Date if (x) the closing price (as defined
in Section 12(d)(vi)) of the Common Stock has been at least $30.00
per share, as adjusted for any stock splits, stock dividends,
combinations or
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similar reclassifications of the Common Stock, for the 60
consecutive trading day period ending one day prior to the date of
the Conversion Notice required by Section 12(b)(II) and (y) the
Company delivers to the holders an Officers' Certificate (with the
Conversion Notice) certifying that the Company is at that time able
to effect a Demand Registration (as defined in the Purchase
Agreement) and would not defer the filing of a registration
statement pursuant to Section 10.01(b) of the Purchase Agreement or
otherwise, all but not less than all of the Convertible Preferred
Stock may be converted into a number of fully paid and nonassessable
shares of Common Stock (calculated as to each conversion to the
nearest 1/100 of a share) equal to (i) the then effective
Liquidation Preference thereof plus accrued and unpaid dividends to
the date of conversion divided by (ii) the Conversion Price in
effect at the time of conversion.
In case the Convertible Preferred Stock is called for redemption,
such conversion right in respect of the Convertible Preferred Stock shall expire
at the close of business on the Business Day next preceding the Redemption Date,
unless the Company defaults in making the payment due upon redemption.
The "Conversion Price" shall be equal to $9.47. The "Conversion
Price" shall be adjusted in certain instances as provided in Sections 12(d) and
Section 12(e) hereof.
(b) In the event of
(I) a Holder Conversion, the holder of any share of Convertible
Preferred Stock to be converted shall surrender the certificate for
such share, duly endorsed or assigned to the Company or in blank, at
any office or agency of the Company maintained for that purpose,
accompanied by written notice to the Company at such office or
agency that the holder elects to convert such share or, if fewer
than all the shares of Convertible Preferred Stock represented by a
single share certificate are to be converted, the number of shares
represented thereby to be converted. In the case of any conversion
of fewer than all the shares of Convertible Preferred Stock
evidenced by a certificate, upon such conversion the Company shall
execute and the Registrar shall countersign and deliver to the
holder thereof, at the expense of the Company, a new certificate or
certificates representing the number of unconverted shares of
Convertible Preferred Stock; or
(II) a Company Conversion, the Company shall give a conversion
notice (the "Conversion Notice") to the holders not fewer than 30
days nor more than 60 days before the conversion date (the
"Conversion Date"). Whenever a Conversion Notice is required to be
delivered to the holders, such notice shall provide the information
set forth below and be given by first class mail, postage prepaid to
each holder of shares of Convertible Preferred Stock, at such
holder's address appearing in the Convertible Preferred Share
Register. All Conversion Notices and shall state:
(i) the Conversion Date;
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(ii) the number of shares of Common Stock into which the
Convertible Preferred Stock will be converted, including
the data used to determine such amount of shares;
(iii) that on the Conversion Date, dividends on the
Convertible Preferred Stock will cease to accrue on and
after said date; and
(iv) the place or places where such shares of
Convertible Preferred Stock shall be surrendered for
conversion.
Shares of Convertible Preferred Stock shall be deemed to have been
converted immediately prior to the close of business on the day of surrender of
such shares for conversion in accordance with clause (I) above or prior to the
close of business on the Conversion Date in the case of Clause (II) above, as
applicable, and at such time the rights of the holders of such shares as holders
shall cease, and the person or persons entitled to receive the shares of Common
Stock issuable upon conversion shall be treated for all purposes as the record
holder or holders of such shares of Common Stock at such time. As promptly as
practicable on or after the date of any such conversion, the Company shall issue
and shall deliver at such office or agency a certificate or certificates for the
number of full shares of Common Stock issuable upon conversion, together with
payment in lieu of any fraction of a share, as provided in Section 12(c).
(c) No fractional shares of Common Stock shall be issued upon the
conversion of a share of Convertible Preferred Stock. 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 which shall be
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of shares of Convertible Preferred Stock so surrendered. Instead of any
fractional shares of Common Stock which would otherwise be issuable upon
conversion of any share of Convertible Preferred Stock, the Company 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 12(d)(vi)) per share of
Common Stock at the close of business on the Business Day prior to the day of
conversion.
(d) For purposes of this Section 12(d), all references to Common
Stock shall be deemed to include the shares of Common Stock into which the
Convertible Preferred Stock is convertible. The Conversion Price shall be
adjusted from time to time by the Company as follows:
(i) If the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding shares of Common
Stock in shares of Common Stock, the Conversion Price in effect at
the opening of business on the date 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 fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the
Common Stock Record Date (as defined in Section 12(d)(vi)) fixed for
such determination and 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
immediately after the opening of business on the day following the
Common Stock Record Date. If any dividend or distribution of the
type described in this Section 12(d)(i) is
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declared but not so paid or made, the Conversion Price shall again
be adjusted to the Conversion Price which would then be in effect if
such dividend or distribution had not been declared.
(ii) (1) In case the Company shall issue or sell any Common Stock
(other than Common Stock issued (A) upon exercise or conversion of
(x) any security outstanding on the Closing Date or (y) any Option
Stock, (B) upon exercise or conversion of any security the issuance
of which caused an adjustment hereunder or the issuance of which did
not require adjustment hereunder or (C) upon exercise or conversion
of any of the Convertible Preferred Stock in accordance with their
respective terms) without consideration or for a consideration per
share less than the Current Market Price on the earlier of the date
on which the Company entered into a firm contract for such issuance
or the actual date of such issuance, or shall issue securities
convertible into Common Stock having a conversion price per share
less than the Current Market Price at the earlier of the date on
which the Company entered into a firm contract for such issuance or
the actual date of issuance of such convertible security, the
Conversion Price to be in effect after such issuance or sale shall
be determined by multiplying the Conversion Price in effect
immediately prior to such issuance or sale by a fraction, (I) the
numerator of which shall be the sum of (x) the number of shares of
Common Stock outstanding immediately prior to such issuance or sale
and (y) the number of shares of Common Stock which the aggregate
consideration receivable by the Company for the total number of
additional shares of Common Stock so issued or sold (or, in the case
of convertible securities, issuable on conversion) would purchase at
the Current Market Price in effect immediately prior to such
issuance or sale and (II) the denominator of which shall be the sum
of the number of shares of Common Stock outstanding immediately
prior to such issuance or sale and the number of additional shares
of Common Stock to be issued or sold (or, in the case of convertible
securities, issued on conversion). In case any portion of the
consideration to be received by the Company shall be in a form other
than cash, the fair market value of such noncash consideration shall
be utilized in the foregoing computation. Fair market value shall be
determined in good faith by the Board of Directors.
(2) In case the Company shall issue or sell securities convertible
into Common Stock having a fair market value more than the
consideration received by the Company for such issuance or sale, at
the earlier of the date on which the Company entered into a firm
contract for such issuance or the actual date of issuance of such
convertible security, the Conversion Price to be in effect after
such issuance or sale shall be determined by multiplying the
Conversion Price in effect immediately prior to such issuance or
sale by a fraction, (I) the numerator of which shall be the sum of
(x) the number of shares of Common Stock outstanding immediately
prior to such issuance or sale and (y) the number of shares of
Common Stock which the aggregate consideration receivable by the
Company for the total number of additional shares of Common Stock
issuable on conversion would purchase at the Current Market Price in
effect immediately prior to such issuance or sale and (II) the
denominator of which shall be the sum of (x) the number of shares of
Common Stock outstanding immediately prior to such issuance or sale
and (y) the number of shares of Common Stock which the fair market
value of such convertible securities would purchase at the Current
Market Price immediately prior to such issuance or sale. In case any
portion
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of the consideration to be received by the Company shall be in a
form other than cash, the fair market value of such noncash
consideration shall be utilized in the foregoing computation. Fair
market value shall be determined in good faith by the Board of
Directors.
(3) If the Company shall offer or issue options, rights or warrants
to all holders of its outstanding shares of Common Stock entitling
them to subscribe for or purchase shares of Common Stock at a price
per share less than the Current Market Price (as defined in Section
12(d)(vi)) on the Common Stock Record Date fixed for the
determination of shareholders entitled to receive such options,
rights or warrants, the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the
Conversion Price in effect at the opening of business on the date
after such Common Stock Record Date by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding
at the close of business on the Common Stock Record Date plus the
number of shares of Common Stock which the aggregate offering price
of the total number of shares of Common Stock subject to such
options, rights or warrants 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 Common
Stock Record Date plus the total number of additional shares of
Common Stock subject to such options, rights or warrants for
subscription or purchase. Such adjustment shall become effective
immediately after the opening of business on the day following the
Common Stock Record Date fixed for determination of shareholders
entitled to purchase or receive such options, rights or warrants. To
the extent that shares of Common Stock are not delivered pursuant to
such options, rights or warrants, upon the expiration or termination
of such options, rights or warrants the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect
had the adjustments made upon the issuance of such options, rights
or warrants been made on the basis of delivery of only the number of
shares of Common Stock actually delivered. If such options, rights
or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if
such date fixed for the determination of shareholders entitled to
receive such options, rights or warrants had not been fixed. In
determining whether any options, rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken
into account (x) any consideration received for such options, rights
or warrants, with the value of such consideration and the amount of
such exercise or subscription price, if other than cash, to be
determined by the Board of Directors and (y) the amount of any
exercise price or subscription price required to be paid upon
exercise of such options, warrants or rights.
(iii) If the 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, if the 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
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<PAGE>
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) If the Company shall, by dividend or otherwise, distribute to
all holders of its shares of Common Stock any class of capital stock
of the Company (other than any dividends or distributions to which
Section 12(d)(i) applies) or evidences of its indebtedness, cash or
other assets (including securities, but excluding any rights or
warrants of a type referred to in Section 12(d)(ii)(2) and dividends
and distributions paid exclusively in cash and excluding any capital
stock, evidences of indebtedness, cash or assets distributed upon a
merger or consolidation to which Section 12(e) applies) (the
foregoing hereinafter in this Section 12(d)(iv) called the
"Distributed Securities"), then, in each such case, the Conversion
Price shall be reduced so that the same shall be equal to the price
determined by multiplying the Conversion Price in effect immediately
prior to the close of business on the Common Stock Record Date (as
defined in Section 12(d)(vi)) with respect to such distribution by a
fraction of which the numerator shall be the Current Market Price
(determined as provided in Section 12(d)(vi)) on such date less the
fair market value (as determined by the Board of Directors, whose
good faith determination shall be conclusive and described in a
resolution of the Board of Directors) on such date of the portion of
the Distributed Securities so distributed applicable to one share of
Common Stock and the denominator shall be such Current Market Price,
such reduction to become effective immediately prior to the opening
of business on the day following the Common Stock Record Date;
provided, however, that, in the event the then fair market value (as
so determined) of the portion of the Distributed Securities so
distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price on the Common Stock Record
Date, in lieu of the foregoing adjustment, adequate provision shall
be made so that each holder of shares of Convertible Preferred Stock
shall have the right to receive upon conversion of a share of
Convertible Preferred Stock (or any portion thereof) the amount of
Distributed Securities such holder would have received had such
holder converted such share of Convertible Preferred Stock (or
portion thereof) directly or indirectly into Common Stock
immediately prior to such Common Stock Record Date. If such dividend
or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in
effect if such dividend or distribution had not been declared. If
the Board of Directors determines the fair market value of any
distribution for purposes of this Section 12(d)(iv) by reference to
the actual or when issued trading market for any securities
constituting all or part of such distribution, it must in doing so
consider the prices in such market over the same period used in
computing the Current Market Price pursuant to Section 12(d)(vi) to
the extent possible. Options, rights or warrants distributed by the
Company to all holders of shares of Common Stock entitling the
holders thereof to subscribe for or purchase shares of the Company's
capital stock (either initially or under certain circumstances),
which options, rights or warrants, until the occurrence of a
specified event or events ("Dilution Trigger Event"): (A) are deemed
to be transferred with such shares of Common Stock; (B) are not
exercisable; and (C) are also issued in respect of future issuances
of shares of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 12(d)(iv) (and no
adjustment to the Conversion Price under this Section 12(d)(iv)
shall be required) until the occurrence of the earliest Dilution
Trigger Event, whereupon such options, rights
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and warrants shall be deemed to have been distributed and an
appropriate adjustment to the Conversion Price under this Section
12(d)(iv) shall be made. If any such options, rights or warrants,
including any such existing options, rights or warrants distributed
prior to the first issuance of shares of Convertible Preferred
Stock, are subject to subsequent events, upon the occurrence of each
of which such options, rights or warrants shall become exercisable
to purchase different securities, evidences of indebtedness or other
assets, then the occurrence of each such event shall be deemed to be
such date of issuance and record date with respect to new options,
rights or warrants (and a termination or expiration of the existing
options, rights or warrants, without exercise by the holder
thereof). In addition, in the event of any distribution (or deemed
distribution) of options, rights or warrants, or any Dilution
Trigger Event with respect thereto, that was counted for purposes of
calculating a distribution amount for which an adjustment to the
Conversion Price under this Section 12(d) was made, (1) in the case
of any such options, rights or warrants which shall all have been
redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Dilution Trigger
Event, as the case may be, as though it were a cash distribution,
equal to the per share redemption or repurchase price received by a
holder or holders of shares of Common Stock with respect to such
options, rights or warrants (assuming such holder had retained such
options, rights or warrants), made to all holders of shares of
Common Stock as of the date of such redemption or repurchase, and
(2) in the case of such options, rights or warrants which shall have
expired or been terminated without exercise by any holders thereof,
the Conversion Price (as adjusted pursuant to this paragraph) shall
be readjusted to be the Conversion Price which would have been in
effect if such options, rights or warrants had not been issued.
Notwithstanding any other provision of this Section 12(d)(iv) to the
contrary, options, rights, warrants, evidences of indebtedness,
other securities, cash or other assets (including, without
limitation, any rights distributed pursuant to any shareholder
rights plan) shall be deemed not to have been distributed for
purposes of this Section 12(d)(iv) if the Company makes proper
provision so that each holder of shares of Convertible Preferred
Stock who converts a share of Convertible Preferred Stock (or any
portion thereof) after the date fixed for determination of
shareholders entitled to receive any such distribution shall be
entitled to receive upon such conversion, in addition to the shares
of Common Stock issuable upon such conversion, the amount and kind
of such distributions that such holder would have been entitled to
receive if such holder had, immediately prior to such determination
date, converted such share of Convertible Preferred Stock into
Common Stock. For purposes of this Section 12(d)(iv) and Sections
12(d)(i) and (ii), any dividend or distribution to which this
Section 12(d)(iv) is applicable that also includes shares of Common
Stock, or options, rights or warrants to subscribe for or purchase
shares of Common Stock to which Section 12(d)(ii) applies (or both),
shall be deemed instead to be (A) a dividend or distribution of the
evidences of indebtedness, assets, shares of capital stock, rights
or warrants other than such shares of Common Stock or options,
rights or warrants to which Section 12(d)(ii) applies (and any
Conversion Price reduction required by this Section 12(d)(iv) with
respect to such dividend or distribution shall then be made)
immediately followed by (B) a dividend or distribution of such
shares of Common Stock or such options, rights or warrants (and any
further Conversion Price reduction required by Sections 12(d)(i) or
12(d)(ii) with respect to such dividend or distribution shall then
be made), except that (1) the Common Stock Record
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<PAGE>
Date of such dividend or distribution shall be substituted as "the
date fixed for the determination of stockholders entitled to receive
such dividend or other distribution", "the Common Stock Record Date
fixed for such determination" and "the Common Stock Record Date"
within the meaning of Section 12(d)(i) and as "the date fixed for
the determination of shareholders entitled to receive such rights or
warrants", "the Common Stock Record Date fixed for the determination
of the share holders entitled to receive such rights or warrants"
and "such Common Stock Record Date" for purposes of Section
12(d)(ii), 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" for the
purposes of Section 12(d)(i).
(v) For purposes of this Section 12(d), the number of shares of
Common Stock at any time outstanding shall not include shares held
in the treasury of the Company. The Company shall not pay any
dividend or make any distribution on shares of Common Stock held in
the treasury of the Company.
(vi) For purposes of this Section 12(d), the following terms shall
have the meaning indicated:
"closing price" with respect to any securities on any day means the
last sale price on such day as reported in the Consolidated Last Sale Reporting
System or as quoted in the National Association of Securities Dealers Automated
Quotation System, or if such last sale price is not available, the average of
the closing bid and asked prices as reported in either such system.
"Common Stock Record Date" means, 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 for 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).
"Current Market Price" means the average of the daily closing prices
per share of Common Stock for the 20 consecutive trading days immediately prior
to the date in question; provided, however, that (A) if the "ex" date (as
hereinafter defined) for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the Conversion Price
pursuant to Sections 12(d)(i), (ii), (iii), (iv), and (v) occurs during such 20
consecutive trading days, 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, (B) if the "ex" date for any event
(other than the issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Price pursuant to Sections 12(d)(i),
(ii), (iii), (iv), or (v) occurs on or after the "ex" date for the issuance or
distribution requiring such computation and prior to the day 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 and (C) if the "ex" date for the issuance or
distribution requiring such computation is prior to the day in question, after
taking into account any
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<PAGE>
adjustment required pursuant to clause (A) or (B) 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 (as determined
by the Board of Directors in a manner consistent with any good faith
determination of such value for purposes of Sections 12(d)(iv) or (v), whose
good faith determination shall be conclusive and described in a resolution of
the Board of Directors) of the evidences of indebtedness, shares of capital
stock or assets being distributed applicable to one share of Common Stock as of
the close of business on the day before such "ex" date. For purposes of this
paragraph, the term "ex" date (1) when used with respect to any issuance or
distribution, means the first date on which the shares of Common Stock trade
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 (2) when used with respect to any subdivision or combination of
shares of Common Stock, means the first date on which the shares of Common Stock
trade regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective. Notwithstanding the
foregoing, whenever successive adjustments to the Conversion Price are called
for pursuant to this Section 12(d), such adjustments shall be made to the
Current Market Price as may be necessary or appropriate to effectuate the intent
of this Section 12(d) and to avoid unjust or inequitable results, as determined
in good faith by the Board of Directors.
"fair market value" means the amount which a willing buyer would pay
a willing seller in an arm's-length transaction.
(vii) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1%
in such price; provided, however, that any adjustments which by
reason of this Section 12(d)(vii) are not required to be made shall
be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 12 shall be made by
the Company and shall be made to the nearest cent. No adjustment
need be made for a change in the par value or no par value of the
Common Stock.
(viii) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly file with the Registrar an Officers'
Certificate setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such
adjustment. Promptly after delivery of such certificate, the Company
shall prepare a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the date on which
each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to each holder of shares of
Convertible Preferred Stock at such holder's last address appearing
on the register of holders maintained for that purpose within 10
days of the effective date of such adjustment. Failure to deliver
such notice shall not affect the legality or validity of any such
adjustment.
(ix) In any case in which this Section 12(d) provides that an
adjustment shall become effective immediately after a Common Stock
Record Date for an event, the Company may defer until the occurrence
of such event issuing to the holder of any share of Convertible
Preferred Stock converted after such Common Stock Record Date and
before the occurrence of such event the additional shares of Common
Stock issuable upon such
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<PAGE>
conversion by reason of the adjustment required by such event over
and above the shares of Common Stock issuable upon such conversion
before giving effect to such adjustment.
(e) In case of any consolidation of the Company with, or merger of
the Company into, any other Person, or in case of any merger of another Person
into the Company (other than a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), or in case of any sale, conveyance or transfer of
all or substantially all the assets of the Company, the holder of each share of
Convertible Preferred Stock shall have the right thereafter, during the period
such share of Convertible Preferred Stock shall be convertible as specified in
Section 12(a), to convert such share of Convertible Preferred Stock into the
kind and amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance or transfer by a holder of the number of
shares of shares of Common Stock of the Company into which such share of
Convertible Preferred Stock might have been converted immediately prior to such
consolidation, merger, conveyance or transfer, assuming such holder of shares of
Common Stock of the Company failed to exercise his rights of election, if any,
as to the kind or amount of securities, cash and other property receivable upon
such consolidation, merger, conveyance or transfer (provided that, if the kind
or amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance or transfer is not the same for each share of
Common Stock of the Company in respect of which such rights of election shall
not have been exercised ("nonelecting share"), then for the purpose of this
Section 12 the kind and amount of securities, cash and other property receivable
upon such consolidation, merger, conveyance or transfer by each nonelecting
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the nonelecting shares). Such securities shall provide for
adjustments which, for events subsequent to the effective date of the triggering
event, shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 12. The above provisions of this Section 12 shall
similarly apply to successive consolidations, mergers, conveyances or transfers.
(f) In case:
(i) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its earned
surplus; or
(ii) the Company shall authorize the granting to all holders of its
shares of Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other
rights;
(iii) of any reclassification of the Common Stock (other than a
subdivision or combination of the Company's outstanding shares of
Common Stock), or of any consolidation or merger to which the
Company is a party and for which approval of any shareholders of the
Company is required, or the sale, conveyance or transfer of all or
substantially all the assets of the Company;
(iv) of any capital reorganization; or
(v) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
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<PAGE>
then the Company shall cause to be filed with the Registrar and at each office
or agency maintained for the purpose of conversion of shares of Convertible
Preferred Stock, and shall cause to be mailed to all holders at their last
addresses as they shall appear in the shares of Convertible Preferred Stock
Register, a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, rights or warrants, or, if a record is
not to be taken, the date as of which the holders of shares of Common Stock of
record to be entitled to such dividend, distribution, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective, and the date as of which it is expected that holders of shares
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, dissolution,
liquidation or winding-up. Such notice shall be so given in the case of any
action covered by Section 12(f)(i) or Section 12(f)(ii) above at least 20 days
prior to the Common Stock Record Date (as defined in Section 12(d)(vi)) of such
action, and in the case of any other such action in Section 12(f), at least 20
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock, whichever shall be the
earlier.
(g) The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued shares of Common
Stock, for the purpose of effecting the conversion of shares of Convertible
Preferred Stock, the full number of shares of Common Stock then issuable upon
the conversion of all outstanding shares of Convertible Preferred Stock.
(h) The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
shares of Convertible Preferred Stock pursuant hereto. The Company 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 in a name
other than that of the holder of the share of Convertible Preferred Stock or
shares of Convertible Preferred Stock to be converted, and no such issue or
delivery shall be made unless and until the Person requesting such issue has
paid to the Company the amount of any such tax, or has established to the
satisfaction of the Company that such tax has been paid or is not payable.
(i) The issuance of certificates for shares of any class of
Convertible Preferred Stock shall be made without charge to the holders of such
shares for any issuance tax in respect thereof or other cost incurred by the
Company in connection with such issuance of shares of Convertible Preferred
Stock; provided, however, that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the holder of the
Convertible Preferred Stock converted.
13. Preemptive Rights. (a) If the Company proposes to and does issue
any Equity Securities (other than in a registered public offering or in a
transaction in which Equity Securities are exchanged for the assets or
securities of another person; provided, that the Board has determined in good
faith that the assets or securities received by the Company in such exchange
have a fair value at least equal to the value of the Equity Securities of the
Company exchanged therefor) the Company shall offer each holder of Convertible
Preferred Stock the right to participate proportionately in a percentage amount
equal to the percentage of the Company's Common Stock (on a fully diluted basis)
represented by the Convertible Preferred Stock held by
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<PAGE>
each such holder as of the date of issuance of any such Equity Securities (the
"Date of Issuance") and on the same terms and conditions and at the same per
unit price (the "Issue Price"). The Company shall give written notice to each
such holder of any such issuance as far in advance of the Date of Issuance as
possible, but in no event less than 10 days in advance of the Date of Issuance
(a "Notice of Issuance"). The Notice of Issuance will describe in reasonable
detail the terms and conditions of the proposed issuance, including the Issue
Price, the maximum number of Equity Securities that holder will be entitled to
purchase (assuming for this purpose only that the number of shares of
Convertible Preferred Stock held by each holder does not change between the date
of the giving of such notice and the Date of Issuance) on the Date of Issuance.
(b) Each such holder shall have the option to elect to purchase all
or part of such holder's portion of the Equity Securities described in a Notice
of Issuance at the Issue Price and on the other terms contained in the Notice of
Issuance by notifying the Company in writing (an "Election Notice") at least two
Business Days prior to the Date of Issuance (the "Election Period"), at which
time such holder shall become irrevocably bound (subject to the satisfaction of
all regulatory requirements) to purchase such Equity Securities. Each Election
Notice will indicate the number of units that each holder elects to purchase.
(c) Any purchase and sale pursuant to the provisions of this Section
13 shall occur on the Date of Issuance at the principal offices of the Company
unless otherwise agreed. At any closing of a purchase and sale in accordance
with this Section 13, the Company will deliver certificates evidencing the
Equity Securities to be so purchased against delivery by each holder of an
amount equal to the number of units that each holder has elected to purchase
multiplied by the Issue Price. Such amount will be payable at such closing. Each
holder making a purchase of Equity Securities pursuant to this Section 13 shall
be responsible for the payment of any transfer or other taxes due as a result of
such purchase and such taxes shall be payable at the closing (unless such holder
provides evidence in form satisfactory to the Company that such taxes have been
paid).
(d) The failure of any holder to exercise its right to purchase
Equity Securities under this Section 13 in connection with any one issuance of
Equity Securities by the Company will not, in any manner, waive or otherwise
impair the rights of such holder to purchase such holder's share of Equity
Securities in connection with any other proposed issuance of Equity Securities
to which this Section 13 is applicable.
(e) Notwithstanding anything contained in this Section 13 to the
contrary, the Company may at any time, regardless of whether an Election Notice
has been given, prior to the Date of Issuance abandon an offering as to which it
has given a Notice of Issuance, in which case holders of Convertible Preferred
Stock shall have no further right to purchase the Equity Securities described in
such Notice of Issuance.
14. Consolidation, Merger, Conveyance or Transfer. Without the vote
or consent of the holders of a majority of the then Outstanding shares of
Convertible Preferred Stock, the Company may not consolidate or merge with or
into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to, any Person unless (i) if the Company is the
surviving or continuing Person, the Convertible Preferred Stock shall remain
outstanding without any amendment that would adversely affect the preferences,
rights or powers of the Convertible
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Preferred Stock, (ii) if the Company is not the surviving or continuing Person,
(a) the entity formed by such consolidation or merger or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made (in any such case, the "resulting entity") is a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia; and (b) the shares of Convertible Preferred Stock are
converted into or exchanged for and become shares of such resulting entity,
having in respect of such resulting entity the same (or more favorable) powers,
preferences and relative, participating, optional or other special rights that
the shares of Convertible Preferred Stock had immediately prior to such
transaction; and (iii) the Company shall have delivered to the Registrar an
Officers' Certificate and an opinion of counsel, reasonably satisfactory in form
and content, each stating that such consolidation, merger, conveyance or
transfer complies with this Section 14 and that all conditions precedent herein
provided for relating to such transaction have been complied with.
15. SEC Reports; Reports by Company. So long as any shares of
Convertible Preferred Stock are outstanding, the Company shall file with the SEC
and, within 15 days after it files them with the SEC, with the Registrar and, if
requested, furnish to each holder of shares of Convertible Preferred Stock all
annual and quarterly reports and the information, documents, and other reports
that the Company is required to file with the SEC pursuant to Section 13(a) or
15(d) of the Exchange Act ("SEC Reports"). In the event the Company is not
required or shall cease to be required to file SEC Reports, pursuant to the
Exchange Act, the Company will nevertheless file such reports with the SEC
(unless the SEC will not accept such a filing). Whether or not required by the
Exchange Act to file SEC Reports with the SEC, so long as any shares of
Convertible Preferred Stock are Outstanding, the Company will furnish or cause
to be furnished copies of the SEC Reports to the holders of shares of
Convertible Preferred Stock at the time the Company is required to make such
information available to the Registrar and to prospective investors who request
it in writing.
16. Definitions. For purposes of these Articles of Designations, the
following terms shall have the meaning set forth below:
"Accumulated Dividends" has the meaning set forth in Section 6(a).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For the purposes of this definition, "control"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Without limiting the foregoing, each of Chase Capital Partners, The Chase
Manhattan Corporation, each of their respective affiliates (the "Chase
Entities") and any other person, fund or entity for whom any of the Chase
Entities acts as a fiduciary or provides discretionary management with respect
to any investments or any such direct or indirect interests therein shall be
deemed to be affiliates of each other.
"Articles of Incorporation" has the meaning set forth in the
recitals.
"Board of Directors" has the meaning set forth in the Recitals.
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"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to be closed.
"By-laws" has the meaning set forth in the Recitals.
"Capital Stock" means, with respect to any person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting and/or non-voting) of such person's capital stock,
whether outstanding on the Closing Date or issued after the Closing Date, and
any and all rights (other than any evidence of indebtedness), warrants or
options exchangeable for or convertible into such capital stock.
"Change in Control" means the occurrence of any of the following
events: (i) the acquisition of ownership, directly or indirectly (in a single
transaction or a series of related transactions), beneficially or of record, by
any Person or group (within the meaning of Section 13(d) and Section 14(d)(2) of
the Securities Exchange Act as in effect on the date hereof) of shares
representing more than 40% of the issued and outstanding common stock of the
Company entitled to vote for the members of the board of directors of the
Company; (ii) occupation of a majority of the seats (other than vacant seats) on
the board of directors of the Company by Persons who were neither (x) nominated
by the board of directors of the Company nor (y) appointed by directors so
nominated; or (iii) any Person or group (other than the group in control of the
Company on the date hereof) shall otherwise directly or indirectly Control the
Company.
"Change in Control Date" means the date on which a Change in Control
occurs.
"Closing Date" means the Closing Date under the Purchase Agreement.
"closing price" has the meaning set forth in Section 12(d)(vi).
"Common Stock Record Date" has the meaning set forth in Section
12(d)(vi).
"Common Stock" means the common stock of the Company, par value
$0.001 per share.
"Company" has the meaning set forth in the Recitals.
"Company Conversion" has the meaning set forth in Section 12(a)(II).
"Company Order" means a written request or order signed in the name
of the Company by its Chairman of the Board, its Chief Executive Officer, its
President or any Executive or Senior Vice President and by its Chief Financial
Officer, Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary.
"Conversion Agent" has the meaning set forth in Section 5(a).
"Conversion Date" has the meaning set forth in Section 12(b)(II).
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"Conversion Notice" has the meaning set forth in Section 12(b)(II).
"Conversion Price" has the meaning set forth in Section 12(a).
"Convertible Preferred Stock" has the meaning set forth in Section
1.
"Current Market Price" has the meaning set forth in Section
12(d)(vi).
"Date of Issuance" has the meaning set forth in Section 13(a).
"Dilution Trigger Event" has the meaning set forth in Section
12(d)(iv).
"Distributed Securities" has the meaning set forth in Section
12(d)(iv).
"Dividend Payment Date" has the meaning set forth in Section 6.
"Dividend Record Date" has the meaning set forth in Section 7(a).
"Election Notice" has the meaning set forth in Section 13(b).
"Election Period" has the meaning set forth in Section 13(b).
"Equity Securities" shall mean any securities the rights of which
are in the nature of those of the Company's Common Stock, including, without
limitation, common stock, any securities having the right to vote for the
election of directors, stock appreciation rights and securities convertible into
any of the foregoing.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"fair market value" has the meaning set forth in Section 12(d)(vi).
"FBCA" has the meaning set forth in the recitals.
"Fourth Anniversary Date" has the meaning set forth in Section
10(a).
"GAAP" means generally accepted accounting principles in the United
States of America.
"Holder Conversion" has the meaning set forth in Section 12(a)(I).
"Issue Price" has the meaning set forth in Section 13(a).
"Junior Shares" has the meaning set forth in Section 9(a).
"Liquidation Preference" means an amount equal to $1,000 per share,
subject to change in accordance with Section 6, Section 7 and Section 11 hereof,
including, without limitation, by the addition of Accumulated Dividends.
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"Mandatory Redemption Date" has the meaning set forth in Section
10(b).
"nonelecting share" has the meaning set forth in Section 12(e).
"Notice of Issuance" has the meaning set forth in Section 13(a).
"Officers' Certificate" means a certificate of the Company signed in
the name of the Company by its Chairman of the Board, its Chief Executive
Officer, its President or an Executive or Senior Vice President and by its Chief
Financial Officer, Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary.
"Option Stock" means shares of Common Stock not to exceed, in the
aggregate, 2,060,000 shares of Common Stock, issued or issuable in accordance
with the Company's 1995 Stock Option Plan and the Company's Directors' Stock
Option Plan, provided that (i) in the case of the 1995 Stock Option Plan, the
option exercise price at the time of such grant is not less than 75% of the fair
market value of such shares on the date of such grant as reasonably determined
in good faith by the Stock Option or other administering Committee of the Board
and (ii) the number of shares of Common Stock specified above shall be adjusted
as appropriate to reflect any stock split, stock consolidation, subdivision or
combination affecting the Common Stock.
"Optional Redemption" has the meaning set forth in Section 10(a).
"Optional Redemption Date" has the meaning set forth in Section
10(a).
"Outstanding" means (i) when used with respect to shares of
Convertible Preferred Stock, as of the date of determination, all shares of
Convertible Preferred Stock theretofore authenticated and delivered under these
Articles of Designations, except (a) shares of Convertible Preferred Stock
theretofore converted into shares of Common Stock in accordance with Section 12
and shares of Convertible Preferred Stock theretofore canceled by the Registrar
or delivered to the Registrar for cancellation; (b) shares of Convertible
Preferred Stock for whose payment or redemption money in the necessary amount
has been theretofore deposited with the Registrar or any Paying Agent (other
than the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the holders of such
shares of Convertible Preferred Stock; provided that, if such shares of
Convertible Preferred Stock are to be redeemed, notice of such redemption has
been duly given pursuant to these Articles of Designations or provision therefor
satisfactory to the Registrar has been made; and (c) shares of Convertible
Preferred Stock in exchange for or in lieu of which other shares of Convertible
Preferred Stock have been authenticated and delivered pursuant to these Articles
of Designations; provided, however, that, in determining whether the holders of
the shares of Convertible Preferred Stock have given any request, demand,
authorization, direction, notice, consent or waiver or taken any other action
hereunder, shares of Convertible Preferred Stock owned by the Company or any
Subsidiary of the Company shall be disregarded and deemed not to be Outstanding
"Parity Shares" has the meaning set forth in Section 9(a).
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"Paying Agent" has the meaning set forth in Section 5(a).
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
"Preferred Stock" means, with respect to any person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such person's preferred or preference stock,
whether now outstanding or issued after the date hereof, including all series
and classes of such preferred or preference stock.
"Purchase Agreement" means the Preferred Stock Purchase Agreement,
dated as of May __, 2000, among the Company and the Purchaser named therein, as
it may be amended from time to time.
"Redemption Date" has the meaning set forth in Section 10(c).
"Redemption Notice" has the meaning set forth in Section 10(c).
"Redemption Price" has the meaning set forth in Section 10(a).
"Registrar" has the meaning set forth in Section 3.
"resulting entity" has the meaning set forth in Section 14.
"SEC" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the adoption of these Articles of Designations such commission is
not existing and performing the duties now assigned to it, then the body
performing such duties at such time.
"SEC Reports" has the meaning set forth in Section 15.
"Senior Shares" has the meaning set forth in Section 9(a).
"Subsidiary" means , with respect to any Person (the "parent") at
any date, any corporation, limited liability company, partnership, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or, in the case
of a partnership, more than 50% of the general partnership interests are, as of
such date, owned, controlled or held. Unless otherwise specified, "Subsidiary"
and "Subsidiaries" shall mean a Subsidiary and Subsidiaries, respectively, of
the Company.
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IN WITNESS WHEREOF, the Company has caused these Articles of
Designations to be duly executed by the undersigned officer of the Company, this
10th day of May, 2000.
NUCO2 INC.,
By: /s/ Eric M. Wechsler
------------------------
Name: Eric M. Wechsler
Title: Secretary
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