EXHIBIT 3.1(e)
RESTATED
ARTICLES OF INCORPORATION
OF
NEORX CORPORATION
Pursuant to RCW 23B.10.070, the following constitutes Restated Articles
of Incorporation of NeoRx Corporation, a Washington corporation, and correctly
sets forth without change the corresponding provisions of the Articles of
Incorporation as previously stated and amended and supersede the original
Articles of Incorporation and all amendments thereto.
ARTICLE I NAME
The name of this corporation is NeoRx Corporation.
ARTICLE II DURATION
This corporation shall have perpetual existence.
ARTICLE III PURPOSES
The purposes for which this corporation is organized is to transact any
or all lawful business for which corporations may be incorporated under the
Washington Business Corporation Act.
ARTICLE IV POWERS
The powers of this corporation shall be those powers granted by the
Washington Business Corporation Act, as amended, including any additional powers
granted by amendments to said Act after the formation of this corporation.
ARTICLE V CAPITAL STOCK
A. AUTHORIZED CAPITAL. The total number of shares which the corporation
is authorized to issue is sixty-three million (63,000,000) shares of two cents
($.02) par value, consisting of sixty million (60,000,000) shares of Common
Stock of $.02 par value and three million (3,000,000) shares of Preferred Stock
of $.02 par value. The Preferred Stock is senior to the Common Stock, and the
Common Stock is subject to the rights and preferences of the Preferred Stock as
hereinafter set forth.
B. ISSUANCE OF PREFERRED STOCK IN SERIES. The Preferred Stock may be
issued from time to time in one or more series in any manner permitted by law
and the provisions of the Articles of Incorporation of the corporation, as
determined from time to time by the Board of Directors and stated in the
resolution or resolutions providing for the issuances thereof, prior to the
issuances of any shares thereof. The Board of Directors shall have the authority
to fix and determine, subject to the provisions hereof, the rights and
preferences of the shares of any series so established, including the rate of
dividend, whether shares may be redeemed and, if so, the redemption price and
the terms and conditions of redemption, the amount payable upon shares in event
of voluntary and involuntary liquidation, sinking fund provisions, if any, for
the redemption or purchase of shares, the terms and conditions, if any, on which
shares may be converted, and voting rights, if any.
C. DIVIDENDS. The holders of shares of Preferred Stock shall be
entitled to receive dividends, when and as declared by the Board of Directors,
out of funds of the corporation legally available therefor, at such rate, at
such time or times and cumulative or noncumulative, as may be provided by the
Board of Directors in designating a particular series of Preferred Stock.
D. REDEMPTION. The Preferred Stock may be redeemable at such
amount, and at such time or times as may be provided by the Board of Directors
in designating a particular series of Preferred Stock. In any event, such
Preferred Stock may be repurchased by the corporation to the extent legally
permissible.
E. LIQUIDATION. In the event of any liquidation, dissolution, or
winding up of the affairs of the corporation, whether voluntary or involuntary,
then, before any distribution shall be made to the holders of the Common Stock,
the holders of the Preferred Stock at the time outstanding shall be entitled to
be paid the preferential amount or amounts per share as may be provided by the
Board of Directors in designating a particular series of Preferred Stock,
together with the amount of any unpaid dividends accrued thereon, to the date of
such payment. The holders of the Preferred Stock shall not be entitled to
receive any distributive amounts upon the liquidation, dissolution, or winding
up of the affairs of the corporation other than the distributive amounts
referred to in this section.
F. CONVERSION. Shares of Preferred Stock may be convertible to
Common Stock of the corporation, at such rate and subject to such adjustments as
may be provided by the Board of Directors in designating a particular series of
Preferred Stock.
G. VOTING RIGHTS. Each outstanding share of Common Stock shall be
entitled to one vote on each matter submitted to a vote of the shareholders,
except as may otherwise be provided in these Articles of Incorporation. Holders
of Preferred Stock shall have such voting rights as may be provided by the Board
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of Directors in designating a particular series of Preferred Stock. At each
election for directors, every shareholder entitled to vote at such elections
shall have the right to cumulate his or her votes by giving one candidate as
many votes as the number of such directors multiplied by the number of his or
her shares shall equal, or by distributing such votes among any number of such
candidates.
ARTICLE VI NO PREEMPTIVE RIGHTS
Except as may otherwise be provided by the Board of Directors, no
holder of any shares of this corporation shall have any preemptive right to
purchase, subscribe for or otherwise acquire any securities of this corporation
of any class or kind now or hereafter authorized.
ARTICLE VII REGISTERED OFFICE AND REGISTERED AGENT
A. The current registered agent of this corporation in the State
of Washington is Lawco of Washington, Inc.
B. The location and post office address of the current registered agent
and the current registered office of this corporation in the State of Washington
is 1201 Third Avenue, 40th Floor, Seattle, Washington 98101-3099.
ARTICLE VIII DIRECTORS
A. This corporation shall have at least one (1) director, the actual
number to be prescribed in the Bylaws. The number of directors may be increased
or decreased from time to time by amendment of the Bylaws, but no decrease shall
have the effect of shortening the term of any incumbent director. The current
Board of Directors consists of six (6) directors.
B. The names and post office addresses of the current Board of
Directors of this corporation are as follows:
Paul G. Abrams Jack L. Bowman
410 West Harrison 410 West Harrison
Seattle, WA 98119 Seattle, WA 98119
James G. Andress Lawrence H.N. Kinet
410 West Harrison 410 West Harrison
Seattle, WA 98119 Seattle, WA 98119
Fred B. Craves Carl-Heinz Pommer
410 West Harrison 410 West Harrison
Seattle, WA 98119 Seattle, WA 98119
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C. The term of the current directors shall be until the next annual
meeting of the shareholders of the corporation and until their successors shall
have been elected and are qualified, unless removed in accordance with the
provisions of the bylaws.
D. In evaluating an offer by another party to make a tender offer or
exchange offer for securities of the Corporation, or to effect a merger or
consolidation involving the Corporation, or to acquire all or substantially all
the assets of the Corporation, or otherwise to acquire control of the
Corporation, the Board of Directors, in considering the best interests of the
Corporation, may consider the social, legal, economic or other effects of any
such offer upon employees, customers, suppliers and other constituencies of the
Corporation, communities in which the Corporation is located or operates, and
all other relevant factors.
E. Advance notice of nominations for the election of Directors, other
than nominations by the Board of Directors or a committee thereof, and advance
notice of business to be conducted at any annual meeting of shareholders, other
than business proposed by the Board of Directors or a committee thereof, shall
be given within the time and in the manner provided in the Bylaws.
ARTICLE IX CONFLICTING INTERESTS
This corporation may enter into contracts and otherwise transact
business with its directors, officers and shareholders and with corporations,
associations, firms and entities in which they are or may become interested as
directors, officers, shareholders, members or otherwise, as freely as though
such interests did not exist, even though the vote, action or presence of such
directors, officers or shareholders may be necessary to obligate this
corporation upon such contracts or transactions. In the absence of fraud, no
such contracts or transactions shall be void or voidable and no such directors,
officers or shareholders shall be held liable to account to this corporation for
any profit or benefit realized by them through such contracts or transactions
despite such interests or their fiduciary relationship, if any, to this
corporation. In the case of directors and officers of this corporation (but not
in the case of shareholders who are not directors or officers), for the
foregoing provisions to be available to such directors or officers the nature of
the interest of such directors or officers (but not necessarily the details)
must have been disclosed to the Board of Directors of the corporation at or
prior to the meetings at which said contracts or transactions were authorized or
confirmed. A general notice that directors or officers of this corporation are
interested in any other corporation, association, firm or entity shall be
sufficient disclosure with respect to all contracts and transactions with such
corporation, association, firm or entity.
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ARTICLE X RESERVED RIGHTS
This corporation reserves the right to amend, alter, change, or repeal
any provisions contained in its Articles of Incorporation in any manner now or
hereafter prescribed or as permitted by statute. All rights of shareholders of
this corporation are granted subject to this reservation.
ARTICLE XI REDEMPTION
This corporation shall have the right to purchase, take, receive or
otherwise acquire, hold, own, pledge, transfer or otherwise dispose of its own
shares. Subject to the provisions of the Washington Business Corporation Act,
purchases of its own shares, whether direct or indirect, may be made from
unreserved and unrestricted earned surplus and capital surplus available
therefor.
ARTICLE XII LIMITATION ON DIRECTOR LIABILITY
To the fullest extent permitted by Washington law at the time this
Article becomes effective or as may thereafter be in effect, a director of this
corporation shall not be liable to this corporation or its shareholders for
monetary damages for his or her conduct as a director. Any amendment to or
repeal of this Article XII shall not adversely affect any right of a director of
this corporation hereunder with respect to any acts or omissions of such
director occurring prior to such amendment or repeal.
ARTICLE XIII INDEMNIFICATION OF DIRECTORS
To the fullest extent permitted by Washington law at the time this
Article becomes effective or as may be thereafter in effect, this corporation is
authorized to indemnify any director of this corporation. The Board of Directors
shall be entitled to determine the terms of such indemnification, including
advance of expenses, and to give effect thereto through the adoption of Bylaws,
approval of agreements, or by any other manner approved by the Board of
Directors. Any amendment to or repeal of this Article XIII shall not adversely
affect any right of a director of this corporation hereunder with respect to any
right to indemnification that arises prior to such amendment or repeal.
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STATEMENT OF RIGHTS AND PREFERENCES
OF THE $2.4375 CONVERTIBLE EXCHANGEABLE PREFERRED STOCK, SERIES 1
($.02 Par Value)
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(i) DESIGNATION. The designation of such series of the Preferred
Stock authorized shall be the "$2.4375 Convertible Exchangeable Preferred Stock,
Series 1" (the "Exchangeable Preferred Stock"). The maximum number of shares of
Exchangeable Preferred Stock shall be 1,120,000.
(ii) DIVIDENDS. Holders of shares of Exchangeable Preferred Stock will
be entitled to receive, when, as and if declared by the Board out of funds of
the Corporation legally available therefor, an annual cash dividend of $2.4375
per share, payable in semi-annual installments on December 1 and June 1
commencing June 1, 1990 (each a "dividend payment date"). Dividends on the
Exchangeable Preferred Stock will be cumulative from the date of initial
issuance of shares of Exchangeable Preferred Stock. Dividends will be payable to
holders of record as they appear on the stock books of the Corporation on such
record dates, not more than 60 days nor less than 10 days preceding the payment
dates thereof, as shall be fixed by the Board (each a "dividend payment record
date"). If dividends are not paid in full upon the Exchangeable Preferred Stock
and any other Parity Preferred Stock (as defined in paragraph (iii) below), all
dividends paid and declared upon shares of Exchangeable Preferred-Stock and
Parity Preferred Stock will be paid and declared pro rata so that in all cases
the amount of dividends paid and declared per share on the Exchangeable
Preferred Stock and such other Parity Preferred Stock shall bear to each other
the same ratio that accumulated and unpaid dividends per share on the shares of
Exchangeable Preferred Stock and such other Parity Preferred Stock bear to each
other. Except as set forth in the preceding sentence, unless full cumulative
dividends on the Exchangeable Preferred Stock have been paid, dividends (other
than in Common Stock of the Corporation (as defined in subparagraph (iv)(I)
below), other stock ranking junior to the Exchangeable Preferred Stock and
rights to acquire the foregoing) may not be paid or declared and set aside for
payment and other distributions may not be made upon the Common Stock or on any
other stock of the Corporation ranking junior to or on a parity with the
Exchangeable Preferred Stock as to dividends, nor may any Common Stock or any
other stock of the Corporation ranking junior to or on a parity with the
Exchangeable Preferred Stock as to dividends be redeemed, purchased or otherwise
acquired for any consideration by the Corporation (except for repurchases from
employees and consultants at cost and except by conversion into or exchange for
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stock of the Corporation ranking junior to the Exchangeable Preferred Stock as
to dividends). Dividends payable for any partial dividend period shall be
calculated on the basis of a 360-day year of 12 30-day months. Accrued but
unpaid dividends shall not bear interest.
For the purpose of determining the legality of dividends or redemptions
pursuant to Section 23A.08.420(2) (b) of the Revised Code of Washington, or any
successor statute, dividends on or redemptions of the Exchangeable Preferred
Stock may be paid or made without reference to the amount required to satisfy
the holders' Liquidation Preference.
(iii) RANK. The shares of Exchangeable Preferred Stock shall rank prior
to the shares of Common Stock and of any other class of stock of the Corporation
ranking junior to the Exchangeable Preferred Stock upon liquidation, so that in
the event of any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of the Exchangeable Preferred
Stock shall be entitled to receive out of the assets of the Corporation
available for distribution to its stockholders, whether from capital, surplus or
earnings, before any distribution is made to holders of shares of Common Stock
or any other such junior stock, an amount equal to $25.00 per share (the
"Liquidation Preference" of a share of Exchangeable Preferred Stock) plus an
amount equal to all dividends (whether or not earned or declared) accumulated
and unpaid on the shares of Exchangeable Preferred Stock to the date of final
distribution. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of shares of Exchangeable Preferred Stock and Parity Preferred
Stock shall be insufficient to pay in full the preferential amount aforesaid,
then such assets, or the proceeds thereof, shall be distributable among such
holders ratably in accordance with the respective amounts which would be payable
on such shares if all amounts payable thereon were paid in full. After payment
of the full amount of the Liquidation Preference and such dividends to which
holders of shares of Exchangeable Preferred Stock are entitled, the holders of
shares of Exchangeable Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Corporation. For the purposes
hereof, neither a consolidation or merger of the Corporation with any other
corporation, nor a sale or transfer of all or any part of the Corporation's
assets for cash or securities shall be considered a liquidation, dissolution or
winding up of the Corporation.
For the purposes of this statement of Rights and Preferences any stock
of any class or series of the Corporation shall be deemed to rank:
(a) prior to shares of the Exchangeable Preferred Stock,
either as to dividends or upon liquidation, if the holders of stock of such
class or series shall be entitled by the terms thereof to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or winding
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up, as the case may be, in preference or priority to the holders of shares of
the Exchangeable Preferred Stock;
(b) on a parity with shares of the Exchangeable Preferred
Stock, either as to dividends or upon liquidation, whether or not the dividend
rates, dividend payment dates, or redemption or liquidation prices per share
thereof be different from those of the Exchange- able Preferred Stock, if the
holders of stock of such class or series shall be entitled by the terms thereof
to the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in proportion to their respective
dividend rates or liquidation prices, without preference or priority of one over
the other as between the holders of such stock and the holders of shares of
Exchangeable Preferred Stock (the term "Parity Preferred Stock" being used to
refer to any stock on a parity with the shares of Exchangeable Preferred Stock,
either as to dividends or upon liquidation as the context may require); and
(c) junior to shares of the Exchangeable Preferred Stock,
either as to dividends or upon liquidation, if such class shall be Common Stock
or if the holders of the Exchangeable Preferred Stock shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in preference or priority to the holders of
stock of such class or series.
(iv) CONVERSION.
(I) Subject to and upon compliance with the provisions of this
paragraph (iv), the holder of a share of Exchangeable Preferred Stock shall have
the right, at such holder's option, at any time, to convert such share into such
number of fully paid and non-assessable shares of Common Stock (calculated as to
each conversion to the nearest 1/100th of a share) as the Liquidation Preference
of such share surrendered for conversion is a multiple of the Conversion Price
(as defined below) and by surrender of such share so to be converted, such
surrender to be made in the manner provided in subparagraph (II) of this
paragraph (iv); PROVIDED, HOWEVER, that the right to convert shares called for
redemption pursuant to paragraph (viii) or for exchange pursuant to paragraph
(vii) shall terminate at the close of business on the date fixed for such
redemption or exchange, as the case may be, unless the Corporation shall default
in making payment of the amount payable upon such redemption or in making the
exchange and payment of any amount payable upon such exchange. A holder of a
share of Exchangeable Preferred Stock is not entitled to any rights of a holder
of Common Stock until such holder has converted such share of Exchangeable
Preferred Stock.
The term "Common Stock" shall mean the Common Stock, $.02 par value, of
the Corporation as the same exists on the date of this statement of Rights and
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Preferences or as such stock may be constituted from time to time, except that
for the purpose of subparagraph (V) of this paragraph (iv) the term "Common
Stock" shall also mean and include stock of the Corporation of any class,
whether now or hereafter authorized, which shall have the right to participate
in the distribution of either earnings or assets of the Corporation without
limit as to amount or percentage.
The term "Conversion Price" shall mean $5.50, as adjusted in accordance
with the provisions of this paragraph (iv).
The term "Liquidation Preference" shall have the meaning specified in
paragraph (iii).
(II) In order to exercise the conversion privilege, the holder
of each share of Exchangeable Preferred Stock to be converted shall surrender
the certificate representing such share at the office of the conversion agent
for the Exchangeable Preferred Stock in the Borough of Manhattan, City of New
York or Seattle, Washington, appointed for such purpose by the Corporation, with
the Notice of Election to Convert on the back of said certificate completed and
signed. Unless the shares issuable on conversion are to be issued in the same
name as the name in which such share of Exchangeable Preferred Stock is
registered, each share surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the holder or the holder's duly authorized attorney and an amount sufficient
to pay any transfer or similar tax.
The holders of shares of Exchangeable Preferred Stock at the close of
business on a dividend payment record date shall be entitled to receive the
dividend payable on such shares on the corresponding dividend payment date
notwithstanding the conversion thereof after such dividend payment record date
or the Corporation's default in payment of the dividend due on such dividend
payment date. However, shares of Exchangeable Preferred Stock surrendered for
conversion during the period between the close of business on any dividend
payment record date and the opening of business on the corresponding dividend
payment date (except shares called for redemption on a redemption date during
such period) must be accompanied by payment of an amount equal to the dividend
payable on such shares on such dividend payment date (the "dividend amount").
The dividend with respect to a share of Exchangeable Preferred Stock called for
redemption on a redemption date between the close of business on any dividend
payment record date and the opening of business on the corresponding dividend
payment date shall be payable on such dividend payment date to the holder of
such share on such dividend payment record date notwithstanding the conversion
of such share of Exchangeable Preferred Stock after such dividend payment record
date and prior to such dividend payment date, and the holder converting such
share of Exchangeable Preferred Stock need not include a payment of such
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dividend amount upon surrender of such share of Exchangeable Preferred Stock for
conversion. The holders of shares of Exchangeable Preferred Stock on a dividend
payment record date who (or whose transferees) convert any of such shares on or
after the corresponding dividend payment date will receive the dividend payable
by the Corporation on such shares of Exchangeable Preferred Stock on such
dividend payment date, and need not include payment of the dividend amount upon
surrender of such shares for conversion. Except as provided above, the
Corporation shall make no payment or adjustment for accrued and unpaid dividends
on shares of Exchangeable Preferred Stock, whether or not in arrears, on
conversion of such shares or for dividends on the shares of Common Stock issued
upon such conversion.
As promptly as practicable after the surrender by a holder of the
certificates for shares of Exchangeable Preferred Stock as aforesaid, the
Corporation shall issue and shall deliver at the office of the conversion agent
to such holder, or on the holder's written order to the holder's transferee, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such shares in accordance with the provisions of
this paragraph (iv), and any fractional interest in respect of a share of Common
Stock arising upon such conversion shall be settled as provided in subparagraph
(III) of this paragraph (iv).
Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which the certificates for shares of
Exchangeable Preferred Stock shall have been surrendered and such notice
received by the Corporation as aforesaid, and the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby at such time
on such date and such conversion shall be at the Conversion Price in effect at
such time on such date, unless the stock transfer books of the Corporation shall
be closed on that date, in which event such person or persons shall be deemed to
have become such holder or holders of record at the close of business on the
next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
shares of Exchangeable Preferred Stock shall have been surrendered and such
notice received by the Corporation. All shares of Common Stock delivered upon
conversion of the Exchangeable Preferred Stock will upon delivery be duly and
validly issued and fully paid and non-assessable, free of all liens and charges
and not subject to any preemptive rights. Upon the surrender of certificates
representing shares of Exchangeable Preferred Stock, such shares shall no longer
be deemed to be outstanding and all rights of a holder with respect to such
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shares surrendered for conversion shall immediately terminate except the right
to receive the Common Stock or other securities, cash or other assets as herein
provided.
(III) FRACTIONAL SHARES. No fractional shares or securities
representing fractional shares of Common Stock shall be issued upon conversion
of the Exchangeable Preferred Stock. Any fractional interest in a share of
Common Stock resulting from conversion of a share of Exchangeable Preferred
Stock shall be paid in cash (computed to the nearest cent) based on the last
reported sale price of the Common Stock (as defined in subparagraph (IV)(d) of
this paragraph (iv)) on the business day next preceding the day of conversion.
If more than one share shall be surrendered for conversion at one time by the
same holder, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate Liquidation Preference
of the shares of Exchangeable Preferred Stock so surrendered.
(IV) ADJUSTMENT. The Conversion Price shall be adjusted from
time to time as follows:
(a) In case the Corporation shall (i) pay a
dividend or make a distribution on its Common Stock in shares of its Common
Stock, (ii) subdivide its outstanding Common Stock into a greater number of
shares, or (iii) combine its outstanding Common Stock into a smaller number of
shares, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the holder of any share of Exchangeable Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the number of
shares of Common Stock of the Corporation which he would have owned or have been
entitled to receive after the happening of any of the events described above had
such share been converted immediately prior to the happening of such event. An
adjustment made pursuant to this subparagraph (IV)(a) shall become effective
immediately, except as provided in subparagraph (IV)(g) below, after the record
date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of subdivision or combination.
(b) In case the Corporation shall issue rights
or warrants to all holders of its Common Stock entitling them (for a period
expiring within 45 days after the record date mentioned below) to subscribe for
or purchase Common Stock at a price per share less than the current market price
per share of Common Stock (as defined in subparagraph (IV)(d) below) at the
record date for the determination of stockholders entitled to receive such
rights or warrants, the Conversion Price in effect immediately prior thereto
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date of
issuance of such rights or warrants by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding on the date of issuance of
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such rights or warrants plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such current market price, and of
which the denominator shall be the number of shares of Common Stock outstanding
on the date of issuance of such rights or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase. Such adjustment
shall be made successively whenever any such rights or warrants are issued, and
shall become effective immediately, except as provided in subparagraph (IV)(g)
below, after such record date. In determining whether any rights or warrants
entitle the holders of the Common Stock to subscribe for or purchase shares of
Common Stock at less than such current market price, and in determining the
aggregate offering price of the shares of Common Stock so offered, there shall
be taken into account any consideration received by the Corporation for such
rights or warrants, the value of such consideration, if other than cash, to be
determined by the Board of Directors.
(c) In case the Corporation shall distribute to
all holders of its Common Stock any shares of capital stock of the
Corporation (other than Common Stock) or evidences of indebtedness or assets
(excluding cash dividends or other distributions paid from retained earnings of
the Corporation) or rights or warrants to subscribe for or purchase any of its
securities (excluding those referred to in subparagraph (IV)(b) above), then, in
each such case, the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date of such distribution by a fraction of which the
numerator shall be the current market price per share of Common Stock (as
defined in subparagraph (IV)(d) below) on the record date mentioned below less
the then fair market value (as determined by the Board, whose determination
shall, if made in good faith, be conclusive) of the portion of the capital stock
or assets or evidences of indebtedness so distributed or of such rights or
warrants applicable to one share of Common Stock, and of which the denominator
shall be the current market price per share (as defined in subparagraph (IV)(d)
below) of the Common Stock. Such adjustment shall become effective immediately,
except as provided in subparagraph (IV)(g) below, after the record date for the
determination of shareholders entitled to receive such distribution.
(d) DEFINITION OF CURRENT MARKET PRICE. For the
purpose of any computation under subparagraphs (IV)(b) and (c) above, the
current market price per share of Common Stock at any date shall be deemed to be
the average of the last reported sale prices for the ten consecutive Trading
Days (as defined below) preceding the day before the record date with respect to
any distribution, issuance or other event requiring such computation. The last
reported sale price for each day shall be (i) the last reported sale price of
Common Stock on the National Market System of the National Association of
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Securities Dealers, Inc. Automated Quotation System, or any similar system of
automated dissemination of quotations of securities prices then in common use,
if so quoted, or (ii) if not quoted as described in clause (i), the mean between
the high bid and low asked quotations for Common Stock as reported by the
National Quotation Bureau Incorporated if at least two securities dealers have
inserted both bid and asked quotations for such class of stock on at least five
of the ten preceding days, or (iii) if the Common Stock is listed or admitted
for trading on any national securities exchange, the last sale price, or the
closing bid price if no sale occurred, of such class of stock on the principal
securities exchange on which such class of stock is listed. If the Common Stock
is quoted on a national securities or central market system, in lieu of a market
or quotation system described above, the last reported sale price shall be
determined in the manner set forth in clause (ii) of the preceding sentence if
bid and asked quotations are reported but actual transactions are not, and in
the manner set forth in clause (iii) of the preceding sentence if actual
transactions are reported. If none of the conditions set forth above is met, the
last reported sale price of Common Stock on any day or the average of such last
reported sale prices for any period shall be the fair market value of such class
of stock as determined by a member firm of the New York Stock Exchange, Inc.
selected by the Company. As used herein the term "Trading Days" with respect to
Common Stock means (i) if the Common Stock is quoted on the National Market
System of the National Association of securities Dealers, Inc. Automated
Quotation system or any similar system of automated dissemination of quotations
of securities prices, days on which trades may be made on such system, or (ii)
if not quoted as described in clause (i), days on which quotations are reported
by the National Quotation Bureau Incorporated, or (iii) if the Common Stock is
listed or admitted for trading on any national securities exchange, days on
which such national securities exchange is open for business.
(e) No adjustment in the Conversion Price shall
be required unless such adjustment would require a change of at least 1% in such
price; PROVIDED, HOWEVER, that any adjustments which by reason of this
subparagraph (IV)(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment; [and provided, further, that
adjustment shall be required and made in accordance with the provisions of this
paragraph (iv). All calculations under this paragraph (iv) shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may be.
Anything in this subparagraph (IV) to the contrary notwithstanding, the
Corporation shall be entitled to make such reductions in the Conversion Price,
in addition to those required by this subparagraph (IV), as it in its discretion
shall determine to be advisable in order that any stock dividends, subdivision
or combination of shares, distribution of capital stock or rights or warrants to
purchase stock or securities, or distribution of evidences of indebtedness or
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assets (other than cash dividends or distributions paid from retained earnings)
hereafter made by the Corporation to its stockholders shall not be taxable.
(f) NOTICE OF ADJUSTMENT. Whenever the Conversion
Price is adjusted, as herein provided, the Corporation shall promptly file with
the conversion agent an officers' certificate setting forth the Conversion Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment, which certificate shall be conclusive evidence of the
correctness of such adjustment. Promptly after delivery of such certificate, the
Corporation shall prepare a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the date on which such
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Price to the holder of each share of Exchangeable Preferred Stock
at his last address as shown on the stock books of the Corporation.
(g) In any case in which this subparagraph (IV)
provides that an adjustment shall become effective immediately after 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 Exchangeable Preferred Stock converted
after such record date and before the occurrence of such event the additional
shares of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (ii) paying to such
holder any amount in cash in lieu of any fraction pursuant to subparagraph (III)
of this paragraph (iv).
(V) If:
(a) the Corporation shall declare a dividend (or
any other distribution) on the Common Stock (other than in cash out of retained
earnings); or
(b) the Corporation shall authorize the granting
to the holders of the Common Stock of rights or warrants to subscribe for or
purchase any shares of any class or any other rights or warrants; or
(c) there shall be any reclassification of the
Common Stock (other than a subdivision or combination of the outstanding Common
Stock and other than a change in the par value, or from par value to no par
value, or from no par value to par value), or any consolidation, merger, or
statutory share exchange to which the Corporation is a party and for which
approval of any stockholders of the Corporation is required, or any sale or
transfer of all or substantially all the assets of the Corporation or any Change
in Control (as defined in paragraph (ix) below); or
14
(d) there shall be a voluntary or an involuntary
dissolution, liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed with the conversion agent, and
shall cause to be mailed to the holders of shares of the Exchangeable Preferred
Stock at their addresses as shown on the stock books of the Corporation, at
least 15 days prior to the applicable date hereinafter specified, a notice
stating (i) the date on which a record is to be taken for the purpose of such
dividend, distribution or 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 or rights or warrants are to be determined or
(ii) the date on which such reclassification, consolidation, merger, statutory
share exchange, sale, transfer, Change in Control, dissolution, liquidation or
winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, statutory share exchange, sale,
transfer, Change in Control, dissolution, liquidation or winding up. Failure to
give such notice or any defect therein shall not affect the legality or validity
of the proceedings described in subparagraph (VIII) of this paragraph (iv) or in
subparagraph (V)(a), (V)(b), (V)(c) or (V)(d) of this paragraph (iv).
(VI) RESERVATION OF COMMON STOCK. The Corporation covenants
that it will at all times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued shares of Common
Stock or its issued shares of Common Stock held in its treasury, or both, for
the purpose of effecting conversions of the Exchangeable Preferred Stock, the
full number of shares of Common Stock deliverable upon the conversion of all
outstanding shares of Exchangeable Preferred Stock not theretofore converted.
For purposes of this subparagraph (VI), the number of shares of Common Stock
which shall be deliverable upon the conversion of all outstanding shares of
Exchangeable Preferred Stock shall be computed as if at the time of computation
all such outstanding shares were held by a single holder.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of Common Stock
deliverable upon conversion of the Exchangeable Preferred Stock, the Corporation
will take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Corporation may validly and legally issue fully paid
and non-assessable shares of Common Stock at such adjusted Conversion Price.
The Corporation will endeavor to list the shares of Common Stock
required to be delivered upon conversion of the Exchangeable Preferred Stock
15
prior to such delivery upon each national securities exchange, if any, upon
which the outstanding Common Stock is listed at the time of such delivery.
Prior to the delivery of any securities which the Corporation shall be
obligated to deliver upon conversion of the Exchangeable Preferred Stock, the
Corporation will endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof by, any governmental
authority.
(VII) TAXES. The Corporation will pay any and all documentary
stamp or similar issue or transfer taxes payable in respect of the issue or
delivery of shares of Common Stock on conversion of the Exchangeable Preferred
Stock pursuant hereto; PROVIDED, HOWEVER, that the Corporation shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issue or delivery of shares of Common Stock in a name other than that of
the holder of the Exchangeable Preferred Stock to be converted and no such issue
or delivery shall be made unless and until the person requesting such issue or
delivery 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.
(VIII) MERGERS OR OTHER COMBINATIONS. In case of any
reclassification or change of outstanding shares of Common Stock (other than a
change in par value, or as a result of a subdivision or combination), or in case
of any consolidation of the Corporation with, or merger of the Corporation with
or into, any other Person, any merger of another Person into the Corporation
(other than a merger which does not result in a reclassification, change,
conversion, exchange or cancellation of outstanding shares of Common Stock) or
any sale or transfer of all or substantially all of the assets of the
Corporation, the holder of each share of Exchangeable Preferred Stock then
outstanding shall have the right thereafter to convert such share of
Exchangeable Preferred Stock into the kind and amount of securities, cash and
other property which the holder would have been entitled to receive upon such
reclassification, change, consolidation, merger, sale or transfer if the holder
had held the Common Stock issuable upon the conversion of such share of
Exchangeable Preferred Stock immediately prior to such reclassification, change,
consolidation, merger, sale or transfer, assuming such holder of Common Stock of
the Corporation (i) is not a Person with which the Corporation consolidated or
into which the Corporation merged or which merged into the Corporation or to
which such sale or transfer was made, as the case may be ("constituent Person"),
or an Affiliate of a constituent Person and (ii) failed to exercise any rights
of election as to the kind or amount of securities, cash and other property
receivable upon such reclassification, change, consolidation, merger, sale or
transfer (provided, that if the kind or amount of securities, cash and other
16
property receivable upon such reclassification, change, consolidation, merger,
sale or transfer is not the same for each share of Common Stock of the
Corporation held immediately prior to such reclassification, change,
consolidation, merger, sale or transfer by other than a constituent Person or an
Affiliate thereof and in respect of which such rights of election shall not have
been exercised ("non-electing share"), then for the purpose of this subparagraph
VIII the kind and amount of securities, cash and other property receivable upon
such reclassification, change, consolidation, merger, sale or transfer by each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). The above provisions of this
subparagraph VIII shall similarly apply to successive reclassifications,
changes, consolidations, mergers, sales or transfers.
(v) STATUS. Upon any conversion, exchange or redemption of shares of
Exchangeable Preferred Stock, the shares of Exchangeable Preferred Stock so
converted, exchanged or redeemed shall have the status of authorized and
unissued shares of preferred stock, and the number of shares of preferred stock
which the Corporation shall have authority to issue shall not be decreased by
the conversion, exchange or redemption of shares of Exchangeable Preferred
Stock.
(vi) VOTING RIGHTS. The holders of shares of Exchangeable Preferred
Stock shall have no voting rights whatsoever, except for any voting rights to
which they may be entitled under the laws of the State of Washington, and except
as follows:
(I) If and whenever at any time or times dividends payable on
the Exchangeable Preferred Stock or Parity Preferred Stock shall have been in
arrears and unpaid in an aggregate amount equal to or exceeding the amount of
dividends payable thereon for three semi-annual periods, then the holders of
such Exchangeable Preferred Stock and Parity Preferred Stock having similar
voting rights then exercisable shall have the exclusive right, voting as a
single class without regard to series, to elect two directors of the
Corporation, such directors to be in addition to the number of directors
constituting the Board of Directors immediately prior to the accrual of such
right. The remaining directors shall be elected in accordance with the
provisions of the Corporation's Restated Articles of Incorporation and Bylaws by
the other class or classes of stock entitled to vote therefor at each meeting of
stockholders held for the purpose of electing directors. Such voting right of
the Exchangeable Preferred Stock shall continue until such time as all
cumulative dividends accumulated on the Exchangeable Preferred Stock and Parity
Preferred Stock having cumulative dividends shall have been paid in full at
which time such voting right of the holders of the Exchangeable Preferred Stock
shall terminate, subject to revesting in the event of each and every subsequent
event of default of the character indicated above.
17
Whenever such voting right shall have vested, such right may be
exercised initially either at a special meeting of the holders of the
Exchangeable Preferred Stock and Parity Preferred Stock having similar voting
rights then exercisable, called as hereinafter provided, or at any annual
meeting of stockholders held for the purpose of electing directors, and
thereafter at each successive annual meeting.
At any time when such voting right shall have vested in the holders of
the Exchangeable Preferred Stock, and if such right shall not already have been
initially exercised, a proper officer of the Corporation shall, upon the written
request of the holders of record of 10% in number of shares of the Exchangeable
Preferred Stock then outstanding, addressed to the Secretary of the Corporation,
call a special meeting of the holders of the Exchangeable Preferred Stock and
Parity Preferred Stock having similar voting rights then exercisable for the
purpose of electing directors. Such meeting shall be held at the earliest
practicable date upon the notice required for annual meetings of stockholders at
the place for holding of annual meetings of stockholders of the Corporation, or,
if none, at a place designated by the Secretary of the Corporation. If such
meeting shall not be called by the proper officers of the Corporation within 30
days after the personal service of such written request upon the Secretary of
the Corporation, or within 30 days after mailing the same within the United
States of America, by registered mail, addressed to the Secretary of the
Corporation at its principal office (such mailing to be evidenced by the
registry receipt issued by the postal authorities), then the holders of record
of 10% in number of shares of the Exchangeable Preferred Stock then outstanding
may designate in writing one of their number to call such meeting at the expense
of the Corporation, and such meeting may be called by such person so designated
upon the notice required for annual meetings of stockholders and shall be held
at the same place as is elsewhere provided for in this subparagraph (I). Any
holder of the Exchangeable Preferred Stock shall have access to the stock books
of the Corporation for the purpose of causing a meeting of stockholders to be
called pursuant to the provisions of this paragraph. Notwithstanding the
provisions of this paragraph, however, no such special meeting shall be called
during a period within 90 days immediately preceding the date fixed for the next
annual meeting of stockholders.
At any meeting held for the purpose of electing directors at which the
holders of the Exchangeable Preferred Stock shall have the right to elect
directors as provided herein, the presence in person or by proxy of the holders
of 33-1/3% of the then outstanding shares of the Exchangeable Preferred Stock
and Parity Preferred Stock having similar voting rights then exercisable shall
be required and be sufficient to constitute a quorum of such preferred stock for
the election of directors by such preferred stock. At any such meeting or
adjournment thereof (A) the absence of a quorum of the holders of the
Exchangeable Preferred Stock and Parity Preferred Stock having similar voting
18
rights then exercisable shall not prevent the election of directors other than
those to be elected by the holders of such preferred stock, and the absence of a
quorum or quorums of the holders of other classes or series of capital stock
entitled to elect such other directors shall not prevent the election of
directors to be elected by the holders of the Exchangeable Preferred Stock and
Parity Preferred Stock having similar voting rights then exercisable, and (B) in
the absence of a quorum of the holders of Exchangeable Preferred Stock and
Parity Preferred Stock having similar voting rights then exercisable, a majority
of the holders present in person or by proxy of such preferred stock shall have
the power to adjourn the meeting, or appropriate portion thereof, for the
election of directors which the holders of such preferred stock are entitled to
elect, from time to time, without notice other than announcement at the meeting,
until a quorum shall be present.
The directors elected pursuant to this subparagraph (I) shall serve
until the next annual meeting or until their respective successors shall be
elected and shall qualify; PROVIDED, HOWEVER, that when the right of the holders
of the Exchangeable Preferred Stock to elect directors as herein provided shall
terminate, the terms of office of all persons so elected by the holders of the
Exchangeable Preferred Stock shall terminate, and the number of directors of the
Corporation shall thereupon be such number as may be provided in accordance with
the Restated Articles of Incorporation and Bylaws of the Corporations
irrespective of any increase made pursuant to this subparagraph (I).
So long as any shares of Exchangeable Preferred Stock are outstanding,
the Restated Articles of Incorporation and Bylaws of the Corporation shall
contain provisions ensuring that the number of Directors of the Corporation
shall at all times be such that the exercise by the holders of shares of
Exchangeable Preferred Stock of the right to elect Directors under the
circumstances provided in this subparagraph (I) will not contravene any
provisions of the Corporation's Restated Articles of Incorporation or Bylaws.
(II) So long as any shares of the Exchangeable Preferred Stock
remain outstanding, the Corporation will not, either directly or indirectly or
through merger or consolidation with any other corporation, without the
affirmative vote at a meeting or the written consent with or without a meeting
of the holders of at least 66-2/3% in number of shares of the Exchangeable
Preferred Stock then outstanding, (A) create any class or classes or series of
stock ranking prior to, or on a parity with, the Exchangeable Preferred Stock
either as to dividends or upon liquidation or increase the authorized number of
shares of any class or classes or series of stock ranking prior to, or on a
parity with, the Exchangeable Preferred Stock either as to dividends or upon
liquidation, (B) amend, alter or repeal any of the provisions of the Restated
19
Articles of Incorporation (including this Statement of Rights and Preferences)
so as to affect adversely the preferences, special rights or powers of the
Exchangeable Preferred Stock, (C) authorize any reclassification of the
Exchangeable Preferred Stock or (D) incur or suffer to exist any Debt that, by
its terms or the terms of the instrument creating or evidencing it, is pari
passu with or subordinate in right of payment to the 9-3/4% Convertible
Subordinated Debentures due 2014 issued by the Company in May 1989 or the
Debentures described in paragraph (vii) herein. "Debt" shall mean (i) all
indebtedness and other obligations for the payment of money of the Corporation,
whenever created, incurred, or assumed, which is (a) for borrowed money,
evidenced by a note or similar instrument, or (b) for the payment of money
relating to (x) any obligations of the Corporation as lessee under leases of any
type of property required to be capitalized on the balance sheet of the lessee
under generally accepted accounting principles and leases of property or assets
made as part of any sale and lease-back transaction to which the Corporation is
a party or (y) any other agreement to lease, or lease of, any real or personal
property or mixture thereof, or (c) evidenced by a note or similar instrument
given by the Corporation in connection with the acquisition by the Corporation
or any subsidiary of any businesses, properties or assets of any kind other than
trade accounts payable or accrued liabilities arising in the ordinary course of
business, or (d) arising from letters of credit, bankers' acceptances, currency
agreements or interest rate swaps, or (e) relating to performance, completion or
similar bonds of the Corporation; (ii) any liability of others described in the
preceding clause which the Corporation has guaranteed or which is otherwise its
legal liability; and (iii) any modification, amendment, renewal, extension or
refunding of any such indebtedness or obligation.
(vii) EXCHANGE. The Exchangeable Preferred Stock is exchangeable in
whole at the option of the Corporation on any dividend payment date beginning
June 1, 1992, for the Corporation's 9-3/4% Convertible Subordinated Debentures
due 2014 (the "Debentures") as described in the Corporation's Registration
Statement on Form S-4, as amended (Registration No. 33-33152), as filed with the
Securities and Exchange Commission. Holders of outstanding shares of
Exchangeable Preferred Stock will be entitled to receive $25.00 principal amount
of Debentures in exchange for each share of Exchangeable Preferred Stock held by
them at the time of exchange; PROVIDED that the Debentures will be issuable in
denominations of $25.00 and integral multiples thereof. The Corporation will
mail to each record holder of the Exchangeable Preferred Stock written notice of
its intention to exchange not less than 30 nor more than 60 days prior to the
date of exchange (the "Exchange Date"). The notice shall specify the effective
date of the exchange and the place where certificates for shares of Exchangeable
Preferred Stock are to be surrendered for Debentures and shall state that
dividends on Exchangeable Preferred Stock will cease to accrue on such date of
exchange. Prior to giving notice of intention to exchange, the Corporation shall
20
execute and deliver with a bank or trust company selected by the Corporation an
Indenture substantially in the form filed as an Exhibit to such Registration
Statement with such changes as may be required by law, stock exchange rule or
usage. The Corporation will cause the Debentures to be authenticated on the
Exchange Date; at such time the rights of the holders of Exchangeable Preferred
Stock as stockholders of the Corporation shall cease (except the right to
receive accumulated and unpaid dividends to the Exchange Date) and such shares
of Exchangeable Preferred Stock shall no longer be deemed outstanding and shall
represent only the right to receive the Debentures and such accumulated and
unpaid dividends. Notwithstanding the foregoing, if notice of exchange has been
given pursuant to this paragraph (vii) and any holder of shares of Exchangeable
Preferred Stock shall, prior to the close of business on the Exchange Date, give
written notice to the Corporation pursuant to paragraph (iv) of the conversion
of any or all of the shares held by such holder (accompanied by a certificate or
certificates for such shares, duly endorsed or assigned to the Corporation),
then such exchange shall not become effective as to such shares to be converted
and such conversion shall become effective as provided in paragraph (iv). The
Debentures will be delivered to the persons entitled thereto upon surrender to
the Corporation or its agent appointed for that purpose of the certificates for
the shares of Exchangeable Preferred Stock being exchanged therefor. If the
Corporation has not paid full cumulative dividends on the Exchangeable Preferred
Stock to the Exchange Date (or set aside a sum therefor) the Corporation may not
exercise its option to exchange the Debentures for the Exchangeable Preferred
Stock.
(viii) REDEMPTION BY THE CORPORATION. The shares of the Exchangeable
Preferred Stock may be redeemed at the option of the Corporation, as a whole, or
from time to time, in part, upon not less than 30 nor more than 60 days' prior
notice mailed to the holders of the shares to be redeemed at their addresses as
shown on the stock books of the Corporation, at the following redemption prices
per share during the 12-month period beginning June 1:
YEAR REDEMPTION PRICE YEAR REDEMPTION PRICE
- ---- ---------------- ---- ----------------
1989 27.43750 1995 25.97500
1990 27.19375 1996 25.73125
1991 26.95000 1997 25.48750
1992 26.70625 1998 25.24375
1993 26.46250 1999 and thereafter 25.00000
1994 26.21875
together in each case with an amount equal to all dividends accumulated and
unpaid to the date fixed for redemption; PROVIDED that no such redemption shall
be effected on or before June 1, 1992 unless (i) the last reported sale price of
21
the Common Stock, as determined in subparagraph (iv)(IV)(d) herein, equals or
exceeds 150% of the conversion price for at least 20 Trading Days within a
period of 30 consecutive Trading Days ending within five Trading Days prior to
the date on which the notice of redemption is first mailed or (ii) the
redemption is effected in connection with certain circumstances involving a
Change in Control (as defined below). If the Exchangeable Preferred Stock is
redeemed in connection with certain circumstances involving a Change in Control
prior to June 1, 1992 then, in addition to the amounts payable as set forth
above, the holders of redeemed shares of Exchangeable Preferred Stock shall also
receive as an additional premium an amount equal to the dividends they would
have received on the shares of Exchangeable Preferred Stock redeemed from, and
including, the date of redemption to June 1, 1992. For the purposes of this
paragraph (viii), a "Change in Control" of the Corporation shall have the same
meaning as applicable to the holder's optional repurchase right set forth in
paragraph (ix)(ii)(f) hereof, except that the proviso shall not apply.
If full cumulative dividends on the Exchangeable Preferred Stock have
not been paid, the Exchangeable Preferred Stock may not be redeemed in part and
the Corporation may not purchase or acquire any shares of the Exchangeable
Preferred Stock otherwise than pursuant to a purchase or exchange offer made on
the same terms to all holders of the Exchangeable Preferred Stock. If less than
all the outstanding shares of Exchangeable Preferred Stock are to be redeemed,
the Corporation will select those to be redeemed by lot or a substantially
equivalent method.
If a notice of redemption has been given pursuant to this paragraph
(viii) and if, on or before the date fixed for redemption, the funds necessary
for such redemption shall have been set aside by the Corporation, separate and
apart from its other funds, in trust for the pro rata benefit of the holders of
the shares so called for redemption, then, notwithstanding that any certificates
for such shares have not been surrendered for cancellation, on the redemption
date dividends shall cease to accrue on the shares of Exchangeable Preferred
Stock to be redeemed, and at the close of business on the redemption date the
holders of such shares shall cease to be stockholders with respect to such
shares and shall have no interest in or claims against the Corporation by virtue
thereof and shall have no voting or other rights with respect to such shares,
except the right to receive the moneys payable upon such redemption and the
right to accumulated and unpaid dividends, without interest thereon, upon
surrender (and endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no longer be deemed
outstanding. Notwithstanding the foregoing, if notice of redemption has been
given pursuant to this paragraph (viii) and any holder of shares of Exchangeable
Preferred Stock shall, prior to the close of business on the date fixed for
22
redemption, give written notice to the Corporation pursuant to paragraph (iv) of
the conversion of any or all of the shares held by such holder (accompanied by a
certificate or certificates for such shares, duly endorsed or assigned to the
Corporation), then such redemption shall not become effective as to such shares
to be converted and such conversion shall become effective as provided in
paragraph (iv). Subject to applicable escheat laws, any moneys necessary for
redemption set aside by the Corporation and unclaimed at the end of two years
from the redemption date shall revert to the general funds of the Corporation,
after which reversion the holders of such shares so called for redemption but
not surrendered shall look only to the general funds of the Corporation for the
payment of the amounts payable upon such redemption. Any interest accrued on
funds so deposited shall be paid to the Corporation from time to time. Any funds
which have been deposited by the Corporation, or on its behalf, with a paying
agent or segregated and held in trust by the Corporation for the redemption of
shares converted into Common Stock on or prior to the date fixed for such
redemption shall (subject to any right of the holder of such shares to receive
the dividend payable thereon as provided in paragraph (iv)) immediately upon
such conversion be returned to the Corporation or, if then held in trust by the
Corporation, shall be discharged from such trust.
(ix) REPURCHASE BY THE HOLDER. In the event that, prior to June 1,
1994, there shall occur a Change in Control (as hereinafter defined) of the
Corporation, then each holder of a share of Exchangeable Preferred Stock
("Holder") shall have the right, at such Holder's option, to require the
Corporation to repurchase, and upon the exercise of such right the Corporation
shall repurchase, all or any part of such Holder's shares of Exchangeable
Preferred Stock that is an integral multiple of $25.00, on a date that is
forty-five days after the date of the notice of the Corporation provided
pursuant to subparagraph (I) hereof at a repurchase price equal to the aggregate
Liquidation Preference of the shares to be repurchased, plus dividends
accumulated and unpaid to the repurchase date. At the option of the Corporation,
the repurchase price may be paid in cash or by delivery of shares of Common
Stock having a fair market value equal to the repurchase price, PROVIDED that
payment may not be made in Common Stock unless at the time of payment such stock
is listed on a national securities exchange or quoted on the automated quotation
system of the National Association of Securities Dealers, Inc. ("NASDAQ") or
another comparable quotation system. For purposes of this paragraph (ix), the
fair market value of shares of Common Stock shall be equal to 95% of the average
of the last sale prices, as computed under paragraph (iv) (IV) (d), of such
Common Stock for each of the five consecutive Trading Days ending on and
including the third Trading Day immediately preceding the repurchase date.
(I) (a) Unless the Corporation shall have theretofore called
for redemption all the outstanding shares of Exchangeable Preferred Stock
23
pursuant to paragraph (viii) on or before the thirtieth day after the occurrence
of a Change in Control, the Corporation or, at the request of the Corporation,
the paying, or transfer agent, if any, shall mail a notice of the occurrence of
the Change in Control and of the repurchase right set forth herein arising as a
result thereof at least thirty and not more than sixty days prior to the date
fixed for repurchase to the Holders of shares of Exchangeable Preferred Stock so
to be repurchased at their last addresses as the same appear on the registry
books of the Company. Such mailing shall be by first class mail. The notice if
mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the Holder receives such notice. The Corporation
shall also deliver a copy of such notice of a repurchase right to the paying, or
transfer agent, if any, and cause a copy of such notice to be published in a
newspaper of general circulation in the Borough of Manhattan, The City of New
York.
Each notice of a repurchase right shall state:
(l) the repurchase date,
(2) the date by which the repurchase right must be exercised,
(3) the repurchase price,
(4) a description of the procedure which a Holder of Exchangeable
Preferred Stock must follow to exercise a repurchase right, and
(5) the Conversion Price then in effect, the date on which the right to
convert the shares of Exchangeable Preferred Stock to be repurchased will
terminate and the place or places where such shares of Exchangeable Preferred
Stock may be surrendered for conversion.
In addition, at least two Trading Days preceding the repurchase date,
the Corporation shall cause to be published, in a newspaper of general
circulation in the Borough of Manhattan, The City of New York, a notice
specifying whether the repurchase price will be payable in cash or in shares of
Common Stock.
No failure of the Corporation to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of the shares of Exchangeable
Preferred Stock.
(b) To exercise a repurchase right, a Holder
shall deliver to the Corporation or the paying or transfer agent, if any, as the
case may be, on or before the thirtieth day after the date of the notice by the
Corporation of a repurchase right (i) written notice of such Holder's exercise
24
of such right, which notice shall set forth the name of the Holder, the
aggregate Liquidation Preference of the shares to be repurchased, a statement
that an election to exercise the repurchase right is being made thereby, and, in
the event that the repurchase price shall be paid in shares of Common Stock, the
name or names (with addresses) in which the certificate or certificates for
shares of Common Stock shall be issued, and (ii) the shares of Exchangeable
Preferred Stock with respect to which the repurchase right is being exercised,
duly endorsed for transfer to the Corporation. Such written notice shall be
irrevocable, except that the right of the Holder to convert the shares of
Exchangeable Preferred Stock with respect to which the repurchase right is being
exercised shall continue until the close of business on the repurchase date. If
the repurchase date falls during the period from the close of business on any
dividend payment record date preceding any dividend payment date to the opening
of business on such dividend payment date, the shares of Exchangeable Preferred
Stock to be repurchased must be accompanied by payment in New York Clearing
House or other funds acceptable to the Company of an amount equal to the
dividend payable on such dividend payment date on the number of shares being
repurchased and, notwithstanding such repurchase, such dividend payment will be
made by the Company to the holder of such share on such dividend payment record
date. Promptly thereafter, the paying, or transfer agent, if any, shall deliver
to the Corporation written notice of the aggregate Liquidation Preference of the
shares to be repurchased, the name of each Holder who exercised the repurchase
right and the aggregate Liquidation Preference to be repurchased with respect to
each such Holder.
(c) Upon receipt of the notice from the paying or
transfer agent, if any, or upon notice from each Holder, as the case may be, and
as described in subparagraph (I), the Corporation shall pay or cause to be paid
the repurchase price in cash or shares of Common Stock, as provided above, to
the Holders on the repurchase date, together with accumulated and unpaid
dividends to the repurchase date payable with respect to the shares of
Exchangeable Preferred Stock as to which the repurchase right has been
exercised.
(d) Any issuance of shares of Common Stock in
respect of the repurchase price shall be deemed to have been effected
immediately prior to the close of business on the repurchase date and the Person
or Persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such repurchase shall be deemed to have
become on the repurchase date the holder or holders of record of the shares
represented thereby, PROVIDED that any surrender for repurchase on a date when
the stock transfer books of the Corporation shall be closed shall constitute the
Person or Persons in whose name or names the certificate or certificates for
such shares are to be issued as the recordholder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
25
stock transfer books are open. No payment or adjustment shall be made for
dividends or distributions on any Common Stock issued upon conversion of any
share of Exchangeable Preferred Stock.
(e) No fractions of shares or script representing
fractions of shares shall be issued upon repurchase of shares of Exchangeable
Preferred Stock. If more than one share shall be repurchased from the same
Holder and the repurchase price shall be payable in shares of Common Stock, the
number of full shares which shall be issuable upon such repurchase shall be
computed on the basis of the aggregate Liquidation Preference of the shares so
repurchased. Instead of any fractional share of Common Stock which would
otherwise be issuable on the repurchase of any share or shares, the Corporation
shall make payment in lieu thereof in an amount of United States dollars equal
to the value of such fraction computed on the basis of the last sale price of
the Common Stock on the last Trading Day prior to the repurchase date.
(f Any issuance and delivery of certificates for
shares of Common Stock on repurchase of shares of Exchangeable Preferred Stock
shall be made without charge to the holder of shares being repurchased for such
certificates or for any tax or duty in respect of the issuance or delivery of
such certificates or the securities represented thereby, PROVIDED that the
Corporation shall not be required to pay any tax or duty which may be payable in
respect of any transfer involved in the issue or delivery of certificates for
shares of Common Stock in a name other than that of the holder of the shares of
Exchangeable Preferred Stock being repurchased, and no such issue or delivery
shall be made unless and until the Person requesting such issue or delivery has
paid to the Corporation the amount of any such tax or duty or has established,
to the satisfaction of the Corporation, that such tax or duty has been paid.
(g) If any shares of Common Stock to be issued upon
repurchase of shares of Exchangeable Preferred Stock hereunder require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued or delivered upon repurchase,
the Corporation covenants that it will in good faith and as expeditiously as
possible endeavor to secure such registration or approval, as the case may be,
PROVIDED that nothing in this subpart shall be deemed to affect in any way the
obligations of the Corporation to repurchase Exchangeable Preferred Stock as
provided in this paragraph (ix).
(h) The Corporation covenants that any shares of
Common Stock which may be issued upon repurchase of Exchangeable Preferred Stock
will be issued from its authorized but unissued shares and upon issue will be
duly and validly issued and fully paid and non-assessable by the Corporation and
free of preemptive rights and that the shares of Common Stock which may be
issued upon repurchase of shares of Exchangeable Preferred Stock will be listed
26
on any national securities exchange on which the outstanding Common Stock is
listed at the time of such issuance.
(i) If any share of Exchangeable Preferred Stock
surrendered for repurchase shall not be so paid on the repurchase date, the
Liquidation Preference of such share shall, until paid, bear interest to the
extent permitted by applicable law from the repurchase date at 9-3/4% per annum
and such share of Exchangeable Preferred Stock shall remain convertible into
Common Stock until the principal of such share of Exchangeable Preferred Stock
shall have been paid or duly provided for.
(II) For purposes of paragraph (ix):
(a) The term "Person" shall mean a corporation, an
association, a partnership, an organization, an individual, a government or a
political subdivision thereof or a governmental agency.
(b) The term "Subsidiary" shall mean a corpora-
tion more than 50% of the outstanding voting stock of which is owned, directly
or indirectly, by the Corporation or by one or more other Subsidiaries, or by
the Corporation and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency.
(c) The term "Affiliate" of any specified Person
shall mean any other Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means power to direct the management and policies of such Person,
directly or indirectly, whether through ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
(d) the term "Associate" of any Person, means (1)
any corporation or organization (other than the Corporation or a Subsidiary of
the Corporation or any Person controlled directly or indirectly (as defined in
the definition of Affiliate above) by the Corporation or a Subsidiary of the
Corporation) of which such Person is an officer or general partner or is,
directly or indirectly, the beneficial owner of ten percent or more of any class
of equity securities, (2) any trust or other estate in which such Person serves
as trustee or in a similar fiduciary capacity, and (3) any relative or spouse of
such Person, or any relative of such spouse, who has the same home as such
Person or who is a director or officer of the Corporation or any of its parents
or Subsidiaries;
27
(e) the term "beneficial owner" shall be deter-
mined in accordance with Rule 13d-3 promulgated under the Securities Exchange
Act of 1934, as amended, as in effect on the date of effectiveness of this
Statement of Rights and Preferences; and
(f) a "Change in Control" of the Corporation
shall be deemed to have occurred at such time as any Person is or becomes the
beneficial owner, directly or indirectly, through a purchase, merger or other
acquisition transaction or series of transactions, of shares of capital stock of
the Corporation entitling such Person to exercise seventy-five percent or more
of the total voting power of all shares of capital stock of the Corporation
entitled to vote in elections of directors; PROVIDED that a Change in Control
shall not be deemed to have occurred if either (i) the last sale price of the
Common Stock on any five Trading Days during the 10 Trading Day period
immediately preceding the date of the Change in Control shall equal or exceed
105% of the conversion price in effect on such Trading Day or (ii) all of the
consideration (excluding cash payments for fractional shares) to be paid for the
Common Stock in the transaction or transactions constituting the Change in
Control consists of shares of common stock traded on a national securities
exchange or through NASDAQ or another comparable quotation system.
(x) CONSENT. Subject to the provisions set forth in paragraph (vi), no
consent of the holders of the Exchangeable Preferred Stock shall be required for
(a) the creation of any indebtedness of any kind of the Corporation, (b) the
creation, or increase or decrease in the amount, of any class or series of stock
of the Corporation not ranking prior to, or on a parity with, the Exchangeable
Preferred Stock either as to dividends or upon liquidation, (c) any increase or
decrease in the amount of authorized Common Stock or any increase, decrease or
change in the par value thereof or in any other terms thereof or (d) the
creation, or any increase or decrease in the amount, of authorized preferred
stock issuable by the Board of Directors in series.
(xi) NUMBER OF SHARES OF EXCHANGEABLE PREFERRED STOCK. Subject to the
provisions of paragraph (vi) hereof, the Board reserves the right by subsequent
amendment of this resolution from time to time to increase or decrease the
number of shares which constitute the Exchangeable Preferred Stock (but not
below the number of shares thereof then outstanding) and in other respects to
amend this resolution within the limitations provided by law, this resolution
and the Restated Articles of Incorporation.
28
------------------------------
DESIGNATION OF RIGHTS AND PREFERENCES OF
SERIES 2 CONVERTIBLE PREFERRED STOCK
------------------------------
A series of Preferred Stock is hereby designated as Series 2
Convertible Preferred Stock which series shall consist of 50,000 shares, par
value $.02 per share (the "Series 2 Shares"), and which shall have the rights,
preferences, privileges and limitations as set forth below:
(1) DIVIDENDS. The holders of the Series 2 Shares shall be entitled to
a dividend of eight percent (8%) per annum of the Stated Value (as defined
below), on a cumulative basis with quarterly compounding (prorated for any
portion of the applicable period during which the Series 2 Shares are
outstanding). Dividends shall accrue from the date of issuance of the Series 2
Shares and shall be paid on each Series 2 Share at the time that such Series 2
Share is converted or redeemed. Dividends (including dividends payable to
holders of Series 2 Shares as of the date such holder elects to convert the
Series 2 Shares into Common Stock as provided in Section 2 below) may be paid at
the Company's option in cash or Common Stock valued based on the Average Market
Price (as defined below) of the Common Stock for the period of five (5)
consecutive trading days ending on the trading day before the dividend payment
dates or the date of conversion or redemption, as the case may be; PROVIDED,
HOWEVER, that in no event shall accrued dividends be paid in shares of Common
Stock if, after giving effect to such distribution, the number of shares of
Common Stock beneficially owned by such holder and all other holders whose
holdings would be aggregated with such holder for purposes of calculating
beneficial ownership in accordance with Sections 13(d) and 16 of the Securities
Exchange Act of 1934, as amended, and the regulations thereunder ("Sections
13(d) and 16"), including, without limitation, any person serving as an adviser
to any holder (collectively, the "Related Persons"), would exceed four and
nine-tenths percent (4.9%) of the outstanding shares of Common Stock (calculated
in accordance with Sections 13(d) and 16); cash shall be paid in lieu of any
shares which cannot be issued pursuant to this proviso. The Company shall not
issue any fraction of a share of Common Stock in payment of a dividend, but
shall pay cash therefor. The Company shall, so long as any of the Series 2
Shares are outstanding, reserve and keep available out of its authorized and
unissued Common Stock, such number of shares of Common Stock as shall from time
to time be sufficient to pay dividends hereunder. Every reference herein to the
Common Stock of the Company (unless a different intention is expressed) shall be
to the shares of the Common Stock of the Company, $.02 par value, as such stock
29
exists immediately after the issuance of the Series 2 Shares provided for
hereunder, or to stock into which such Common Stock may be changed from time to
time thereafter.
"Average Market Price" of any security for any period shall be computed
as the arithmetic average of the closing bid prices for such security for each
trading day in such period on the National Association of Securities Dealers
Automated Quotation National Market System (the "Nasdaq-NMS"), or, if the
Nasdaq-NMS is not the principal trading market for such security, on the
principal trading market for such security, or, if market value cannot be
calculated for such period on any of the foregoing bases, the Average Market
Price shall be the average fair market value during such period as reasonably
determined in good faith by the Board of Directors of the Company (all as
appropriately adjusted for any stock dividend, stock split or other similar
transaction during such period or between the end of such period and the date of
conversion or dividend payment, as applicable).
(2) CONVERSION OF SERIES 2 SHARES. The holders of the Series 2 Shares
shall have the right, at their option, to convert the Series 2 Shares into
shares of Common Stock on the following terms and conditions:
(a)(i) Each Series 2 share shall be convertible at any time
after the date of issuance (or, if such Series 2 Share is called for redemption,
at any time up to and including, but not after, the close of business on the
fifth full business day prior to the date filed for such redemption, unless
default shall be made by the Company in providing the funds for the payment of
the redemption price), into fully paid and nonassessable shares (calculated to
the nearest whole share) of Common Stock at the conversion price (the
"Conversion Price") in effect at the time of conversion determined as
hereinafter provided; PROVIDED, HOWEVER, that in no event shall any holder be
entitled to convert Series 2 Shares if, after giving effect to such conversion,
the number of shares of Common Stock beneficially owned by such holder and all
Related Persons would exceed four and nine-tenths percent (4.9%) of the
outstanding shares of Common Stock (calculated in accordance with Sections 13(d)
and 16). Each Series 2 Share shall have a value of One Hundred Dollars ($100)
(the "Stated Value") for the purpose of such conversion.
(ii) Commencing on the later of (A) 180 days after the date of
original issue of Series 2 Shares or (B) 90 days after the effective date of the
Registration Statement (the "Registration Statement") filed by the Company
pursuant to the Registration Rights Agreement between the Company and the
original purchasers of the Series 2 Shares, the Company may at any time cause
the automatic conversion of all outstanding Series 2 Shares pursuant to written
notice to the holders given not less than 30 days and not more than 60 days
prior to the date fixed in the notice. Any and all Series 2 Shares which have
30
not been previously converted by the holders shall be automatically converted
into shares of Common Stock as provided in Section (2)(a)(i) at the close of
business on the date fixed in such notice, at the Conversion Price which is
eighty-three percent (83%) (the "Conversion Percentage") of the Average Market
Price for the Common Stock for the five (5) consecutive trading days ending one
trading day prior to the date of automatic conversion; provided, however, that
in no event shall the Conversion Price be an amount more than one hundred ten
percent (110%) of the Average Market Price for the Common Stock for the five (5)
consecutive trading days ending one trading day prior to the date of original
issue of Series 2 Shares. The Conversion Price Floor described in Section (2)(b)
shall not be applicable to an automatic conversion pursuant to this
Section(2)(a)(ii).
(b) The Conversion Price shall be eighty-three percent (83%)
of the Average Market Price for the Common Stock for the five (5) consecutive
trading days ending one trading day prior to the date the Conversion Notice (as
defined below) is received by the Company, subject to adjustment as provided
herein; PROVIDED, HOWEVER, in no event shall the Conversion Price be an amount
less than $4.41 per share of Common Stock (the "Conversion Price Floor") or more
than one hundred ten percent (110%) of the Average Market Price for the Common
Stock for the five (5) consecutive trading days ending one trading day prior to
the issuance of the Series 2 Shares.
(c) If the Company shall consolidate with or merge into any
corporation or reclassify its outstanding shares of Common Stock (other than by
way of subdivision or reduction of such shares) (each a "Major Transaction"),
then each Series 2 Share shall thereafter be convertible into the number of
shares of stock or securities (the "Resulting Securities") or property of the
Company, or of the entity resulting from such consolidation or merger, to which
a holder of the number of shares of Common Stock delivered upon conversion of
such Series 2 Share would have been entitled upon such Major Transaction, had
the holder of such Series 2 Share exercised its right of conversion and had such
Common Stock been issued and outstanding and had such holder been the holder of
record of such Common Stock at the time of such Major Transaction, and the
Company shall make lawful provision therefor as a part of such consolidation,
merger or reclassification; PROVIDED, HOWEVER, that during the period commencing
on the date of original issue of Series 2 Shares and ending on the later of (A)
180 days after the date of original issue of Series 2 Shares or (B) 90 days
after the effective date of the Registration Statement, the Company shall not
consummate a Major Transaction without the approval of the holders of a majority
of the outstanding Series 2 Shares, unless (A) the Resulting Securities (or the
securities into which the Resulting Securities are immediately convertible
without the payment of additional consideration) are, at the date of the giving
31
of the notice referred to in clause (B) below, listed or included for quotation
on NASDAQ-NMS, the New York Stock Exchange or the American Stock Exchange (and
are, at the date of the giving of such notice, reasonably expected to continue
to be so listed or included for quotation for at least the six (6) month period
subsequent to the closing of the Major Transaction); and (B) the Company gives
such holder notice of such Major Transaction at least thirty (30) trading days
prior to the closing thereof (excluding any trading days that sales cannot be
made pursuant to the Registration Statement for any reason); PROVIDED, FURTHER,
that in any event the Company shall give the holders of the Series 2 Shares
written notice of any Major Transaction not less than 30 days prior to its
consummation.
(d) The Company shall not issue any fraction of a share of
Common Stock upon any conversion, but shall pay cash therefor at the Conversion
Price then in effect multiplied by such fraction.
(e) On presentation and surrender to the Company (or at any
office or agency maintained for the transfer of the Series 2 Shares) of the
certificates of Series 2 Shares so to be converted, duly endorsed in blank for
transfer or accompanied by proper instruments of assignment or transfer in blank
(a "Conversion Notice"), with signatures guaranteed, the holder of such Series 2
Shares shall be entitled, subject to the limitations herein contained, to
receive in exchange therefor a certificate or certificates for fully paid and
nonassessable shares, which certificates shall be delivered by the second
trading day after the date of delivery of the Conversion Notice, and cash for
fractional shares, of Common Stock on the foregoing basis. The Series 2 Shares
shall be deemed to have been converted, and the person converting the same to
have become the holder of record of Common Stock, for all purposes as of the
date of delivery of the Conversion Notice.
(f) The Company shall, so long as any of the Series 2 Shares
are outstanding, reserve and keep available out of its authorized and unissued
Common Stock, solely for the purpose of effecting the conversion of the Series 2
Shares, such number of shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all of the Series 2 Shares then
outstanding.
(g) The Company shall pay any and all taxes which may be
imposed upon it with respect to the issuance and delivery of Common Stock upon
the conversion of the Series 2 Shares as herein provided. The Company shall not
be required in any event to pay any transfer or other taxes by reason of the
issuance of such Common Stock in names other than those in which the Series 2
Shares surrendered for conversion are registered on the Company's records, and
no such conversion or issuance of Common Stock shall be made unless and until
the person requesting such issuance has paid to the Company the amount of any
32
such tax, or has established to the satisfaction of the Company and its transfer
agent, if any, that such tax has been paid.
(3) VOTING RIGHTS. Holders of Series 2 Shares shall have no voting
rights, except as required by law.
(4) REDEMPTION. The Company may, at any time subsequent to ninety (90)
days after the issuance of the Series 2 Shares, redeem the whole or any part of
the Series 2 Shares then outstanding at a redemption price of One Hundred Twenty
Dollars and Fifty Cents ($120.50) per Series 2 Share, plus in each case a sum
equal to all accrued and unpaid dividends thereon through the date fixed for
redemption, in accordance with the following redemption procedures:
(a) In case of redemption of only part of the Series 2 Shares
at any time outstanding, the Company shall designate the amount of Series 2
Shares so to be redeemed and shall redeem such Series 2 Shares on a PRO RATA
basis. Subject to the limitations and provisions herein contained, the Board of
Directors shall have the power and authority to prescribe the terms and
conditions upon which the Series 2 Shares shall be redeemed from time to time.
(b) Notice of every redemption shall be given by mail to every
holder of record of any Series 2 Shares then to be redeemed, at least thirty
(30), but no more than ninety (90), days prior to the date fixed as the date for
the redemption thereof, at the respective addresses of such holders as the same
shall appear on the stock transfer books of the Company. The notice shall state
that the Series 2 Shares shall be redeemed by the Company at the redemption
price specified above, upon the surrender for cancellation, at the time and
place designated in such notice, of the certificates representing the Series 2
Shares to be redeemed, properly endorsed in blank for transfer, or accompanied
by proper instruments of assignment and transfer in blank, with signatures
guaranteed, and bearing all necessary transfer tax stamps thereto affixed and
cancelled. On and after the date specified in the notice described above, each
holder of Series 2 Shares called for redemption shall be entitled to receive
therefor the specified redemption price upon presentation and surrender at the
place designated in such notice of the certificates for Series 2 Shares called
for redemption, properly endorsed in blank for transfer or accompanied by proper
instruments of assignment or transfer in blank, with signatures guaranteed, and
bearing all necessary transfer tax stamps thereto affixed and cancelled.
(c) If the Company shall give notice of redemption as
aforesaid (and unless the Company shall fail to pay the redemption price of the
Series 2 Shares presented for redemption in accordance with such notice), all
Series 2 Shares called for redemption shall be deemed to have been redeemed on
33
the date specified in such notice, whether or not the certificates for such
Series 2 Shares shall be surrendered for redemption, and such Series 2 Shares so
called for redemption shall from and after such date cease to represent any
interest whatsoever in the Company or its property, and the holders thereof
shall have no rights other than the right to receive such redemption price
without any interest thereof from and after such date.
(5) LIQUIDATION, DISSOLUTION, WINDING UP. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of the Company, the
holders of the Series 2 Shares shall be entitled to receive in cash out of the
assets of the Company, whether from capital or from earnings, available for
distribution to its stockholders (the "Series 2 Funds"), before any amount shall
be paid to the holders of the Common Stock, an amount equal to the Stated Value
per Series 2 Share plus any accrued and unpaid dividends, provided that, if the
Series 2 Funds are insufficient to pay the full amount due to the holders of
Series 2 Shares and holders of shares of other classes or series of preferred
stock of the Company that are of equal rank with the Series 2 Shares as to
payments of Series 2 Funds (the "Pari Passu Shares"), then each holder of Series
2 Shares and Pari Passu Shares shall receive a percentage of the Series 2 Funds
equal to the full amount of Series 2 Funds payable to such holder as a
percentage of the full amount of Series 2 Funds payable to all holders of Series
2 Shares and Pari Passu Shares. The purchase or redemption by the Company of
stock of any class, in any manner permitted by law, shall not, for the purposes
hereof, be regarded as a liquidation, dissolution or winding up of the Company.
Neither the consolidation nor merger of the Company with or into any other
corporation or corporations, nor the sale or transfer by the Company of less
than substantially all of its assets, shall, for the purposes hereof, be deemed
to be a liquidation, dissolution or winding up of the Company. No holder of
Series 2 Shares shall be entitled to receive any amounts with respect thereto
upon any liquidation, dissolution or winding up of the Company other than the
amounts provided for herein.
(6) SERIES 2 RANK. All shares of Common Stock shall be of junior rank
to all Series 2 Shares in respect to the preferences as to dividends,
distributions and payments upon the liquidation, dissolution or winding up of
the Company. The rights of the shares of Common Stock shall be subject to the
preferences and relative rights of the Series 2 Shares. The Series 2 Shares
shall rank junior to the Company's Convertible Exchangeable Preferred Stock,
Series 1 in respect of dividends and distributions and payments upon the
liquidation, dissolution or winding up of the Company. The Company may authorize
and issue additional or other preferred stock which is of equal rank with the
Series 2 Shares in respect of the preferences as to dividends and distributions
and payments upon the liquidation, dissolution or winding up of the Company. In
the event of the merger or consolidation of the Company with or into another
34
corporation, the Series 2 Shares shall maintain their relative powers,
designations and preferences provided for herein.
(7) VOTE TO CHANGE THE TERMS OF SERIES 2 SHARES. The affirmative vote
at a meeting duly called for such purpose of the written consent without a
meeting of the holders of the not less than two-thirds (2/3) of the then
outstanding Series 2 Shares shall be required to amend, alter, change or repeal
any of the powers, designations, preferences and rights of the Series 2 Shares.
(8) AMENDMENTS UPON CONVERSION OR REDEMPTION OF OUTSTANDING SERIES 2
SHARES. When, as a result of the conversion or redemption of the Series 2
Shares, no Series 2 Shares remain outstanding, the Board of Directors may, at
its discretion and without a vote of the shareholders of the Company, withdraw
this Designation in its entirety by providing for the filing of the applicable
amendment or restatement of the Company's Restated Articles of Incorporation,
and the Series 2 Shares designated hereby shall thereby return to the status of
authorized but unissued and undesignated shares of Preferred Stock of the
Company.
35
------------------------------
DESIGNATION OF RIGHTS AND PREFERENCES
OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
------------------------------
SECTION 1. DESIGNATION OF SERIES A JUNIOR PARTICIPATING PREFERRED
STOCK AND AMOUNT.
The shares of such series shall be designated as "Series A Junior
Participating Preferred Stock" (the "Series A Preferred Stock") and the number
of shares constituting the Series A Preferred Stock shall be 600,000, par value
$.02 per share. Such number of shares may be increased or decreased by
resolution of the Board of Directors; PROVIDED, HOWEVER, that no decrease shall
reduce the number of shares of Series A Preferred Stock to a number less than
the number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of Rights (the "Rights") issued pursuant to the
Rights Agreement dated as of April 10, 1996 between the Corporation and First
Interstate Bank of Washington, N.A., as Rights Agent (the "Rights Agreement"),
and provided, further, that if more than a total of 600,000 shares of Series A
Preferred Stock shall be issuable upon the exercise of the Rights, the Board of
Directors, pursuant to Section 23B.06.020 of the Washington Business Corporation
Act, shall direct by resolution that Articles of Amendment be properly executed
and filed, in accordance with the provisions thereof, providing for an increase
in the authorized shares of Series A Preferred Stock to the largest number of
whole shares issuable upon exercise of the Rights.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of Common Stock, par
value $.02 per share (the "Common Stock"), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (i) $1 and (ii) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
36
times the aggregate per share amount (payable in kind) of all noncash dividends
or other distributions, other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause (ii)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of this Section 2
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); PROVIDED, however,
that, in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $1 per share
on the Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
37
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
SECTION 3. VOTING RIGHTS.
The holders of shares of Series A Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all matters
submitted to a vote of shareholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
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distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i)declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred
Stock;
(ii)declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the
Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in
proportion to the total amounts to which the holders
of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding
up) to the Series A Preferred Stock; or
(iv)redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock,
or any shares of stock ranking on a parity with the
Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders
of such shares upon such terms as the Board of
Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes,
shall determine in good faith will result in fair and
equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
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SECTION 5. REACQUIRED SHARES.
Any shares of Series A Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock subject to the conditions
and restrictions on issuance set forth herein, in the Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation"), or in any
other Certificate of Designations creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (a) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (b) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (a) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
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SECTION 7. CONSOLIDATION, MERGER, ETC.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series A Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
SECTION 8. NO REDEMPTION.
The shares of Series A Preferred Stock shall not be redeemable.
SECTION 9. RANK.
The Series A Preferred Stock shall rank, with respect to the payment of
dividends and the distribution of assets, junior to all series of any other
class of the Preferred Stock.
SECTION 10. AMENDMENT.
The Certificate of Incorporation shall not be amended in any manner
that would materially alter or change the powers, preferences or special rights
of the Series A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least two-thirds of the outstanding shares
of Series A Preferred Stock, voting together as a single class.
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These Restated Articles of Incorporation are executed by NeoRx
Corporation by its duly authorized officer.
Dated: April ____, 1996
NEORX CORPORATION
By_________________________
Jeffrey J. Miller
Senior Vice President
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CERTIFICATE REGARDING
RESTATED ARTICLES OF INCORPORATION
NEORX CORPORATION
Pursuant to RCW 23B.10.070, the undersigned hereby certifies that the
foregoing Restated Articles of Incorporation of NeoRx Corporation do not include
an amendment to the Articles of Incorporation as heretofore amended.
Dated: April ____, 1996
NEORX CORPORATION
By_________________________
Jeffrey J. Miller
Senior Vice President
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