STATEMENT OF STOCK DESIGNATION
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Setting forth a copy of a resolution creating and
authorizing the issuance of a series of preferred
stock designated as "Series B Convertible Redeemable
Accreting Preferred Stock" adopted by the board of
directors of General Communication, Inc.
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Pursuant to AS 10.06.315 and 10.06.320 of the Alaska Statutes
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We, the undersigned officers of General Communication, Inc., an Alaska
corporation ("Company"), hereby state and otherwise certify that, on April 21,
1999, the board of directors of the Company, pursuant to authority vested in it
by Article IV of the Company's Restated Articles of Incorporation and in
accordance with AS 10.06.315 and 10.06.318 of the Alaska Statutes, duly adopted
the following resolution creating a series of preferred stock designated as
"Series B Convertible Redeemable Accreting Preferred Stock":
RESOLUTION
"WHEREAS, General Communication, Inc. is authorized through its
Restated Articles of Incorporation to issue up to 100 million shares of Class A
Common Stock and up to 1 million shares of Preferred Stock, issuable from time
to time in one or more series;
WHEREAS, the Board of Directors of the Company is authorized, within
the limitations and restrictions contained in the Restated Articles of
Incorporation, to fix or alter the dividend rate, conversion rate, voting
rights, redemption prices, and liquidation preferences of any wholly unissued
series of Preferred Stock, the number of shares constituting any such series,
the designation of such series, and other terms and conditions of the issuance
of such stock;
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WHEREAS, the Company, through its Board of Directors, approved a
statement of stock designation pursuant to Article IV of the Restated Articles
of Incorporation and that statement was filed of record with the Alaska
Department of Commerce and Economic Development on or about January 17, 1991
pursuant to authority set forth in AS 10.06.315, 10.06.318, and 10.06.320 of the
Alaska Statutes, and the board subsequently authorized the issuance of Series A
Preferred Stock under that designation which was subsequently issued and later
retired, and the Company does not presently have outstanding any shares of its
Preferred Stock and is not otherwise obligated to issue such shares in the
future, and the Board of Directors desires to cancel and otherwise delete that
1991 statement of stock designation at this time and to fix the terms of a
second series of that Preferred Stock and the number of shares constituting that
series;
RESOLVED, that, pursuant to authority granted to and vested in the
Board of Directors by Article IV of the Restated Articles of Incorporation of
the Company, and in accordance with AS 10.06.315, 10.06.318, and 10.06.320 of
the Alaska Statutes, the board hereby cancels and otherwise deletes the 1991
statement of stock designation for the Series A preferred stock and hereby
declares that such statement is no longer a part of those articles;
RESOLVED, that, pursuant to authority granted to and vested in the
Board of Directors by Article IV of the Restated Articles of Incorporation of
the Company and in accordance with AS 10.06.315 and 10.06.318 of the Alaska
Statutes, the board hereby approves and otherwise directs the issuance, from 1
million shares of Preferred Stock authorized under those articles, a series of
Preferred Stock of the Company to consist of 35,000 shares designated as Series
B Convertible Redeemable Accreting Preferred Stock ("Series B Preferred Stock")
and hereby fixes the designation, rights, preferences, privileges, and
restrictions of the shares of that series, in addition to the designation,
rights, preferences, privileges and restrictions set forth in those articles
which are directly applicable to the Preferred Stock as follows:
Preface. Series B Convertible Redeemable Accreting Preferred
Stock. Of the 1,000,000 shares of Preferred Stock, authorized pursuant to
Article IV of the Restated Articles of Incorporation of the Company, 35,000
shall be designated Series B Convertible Redeemable Accreting Preferred Stock,
with the rights, preferences, privileges and restrictions set forth in this
paragraph.
Section 1. Definitions. For purposes of the following
Sections, the following definitions shall apply:
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"Additional Shares of Class A Common Stock" shall
have the meaning ascribed to such term in Section 8(i)(d) hereof.
"Annualized Operating Cash Flow" shall mean, as of
any date of determination, the product of two times Operating Cash Flow for the
two most recently ended fiscal quarters.
"Bankruptcy Event" shall mean the occurrence of any
of the following: (i) a court or governmental agency having appropriate
jurisdiction shall enter a decree or order for relief in respect of the Company
in an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the Company
or for any substantial part of its property or ordering the winding up or
liquidation of its affairs; (ii) there shall be commenced against the Company an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or any case, proceeding or other action for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Company or for any substantial part of
its property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60) consecutive
days; (iii) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Company or for any substantial part of its property or make any general
assignment for the benefit of creditors; or (iv) the Company shall be unable to,
or shall admit in writing to its inability to, pay its debts generally as they
become due.
"Board" shall mean the Board of Directors of the
Company.
"Business Day" shall mean a day on which banks and
foreign exchange markets are open for the transaction of business in New York,
New York as relevant to the determination to be made or action to be taken.
"Capitalized Leases" shall mean capital leases and
subleases, as defined in accordance with GAAP.
"Change of Control" shall mean the occurrence of one
or more of the following events: (a) any change in the ownership of the Company
resulting in MCI WorldCom, Inc. and any of its wholly owned Subsidiaries, owning
Voting Stock with less than eighteen percent (18%) of the total combined voting
power of the Company, (b) MCI WorldCom, Inc. shall at any time have less than
two (2) representatives sitting on the Board for more than a sixty-day period,
(c) Ronald A. Duncan resigns or is removed from his position as Chief Executive
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Officer of the Company, other than as a result of death or disability, and is
not replaced within sixty (60) days of such resignation or removal with a person
acceptable to the holders of a majority of the outstanding Series B Preferred
Stock or (d) Ronald A. Duncan or his heirs transfers, sells or in any way
disposes of a material amount of the capital stock of the Company owned by him
as of the date hereof. A Change of Control shall be deemed to occur as of the
effective date of the first event, action or transaction leading to one of the
results described above.
"Class A Common Stock" shall mean the Class A Common
Stock of the Company.
"Class B Common Stock" shall mean the Class B Common
Stock of the Company.
"Closing Date" shall mean April 30, 1999.
"Closing Price" if the Class A Common Stock is traded
on a nationally recognized exchange or the National Market System of the
National Association of Security Dealers, Inc. Automated Quotation System, shall
mean the closing price as reported for composite transactions on the applicable
date, or, if no sales occurred on an applicable date, then the average of the
highest bid and lowest asked prices on such exchange or the National Market
System at the end of the day on such date. If the Class A Common Stock is not
traded on an exchange or the National Market System but is otherwise traded
over-the- counter, Closing Price shall mean the average of the highest bid and
lowest asked prices quoted in the National Association of Security Dealers, Inc.
Automated Quotation System as of the close of business on the applicable date,
or if not so quoted on such date, the average of the representative bid and
asked prices on such date in the domestic over-the-counter market as reported by
the National Quotation Bureau, Inc., or any similar successor organization.
"Common Stock" shall mean, collectively, the Class A
Common Stock and Class B Common Stock of the Company.
"Company" shall mean this corporation.
"Contingent Liability" shall mean, as to any person,
any obligation contingent or otherwise, of such person guaranteeing or having
the economic effect of guaranteeing any Debt or obligation of any other person
in any manner, whether directly or indirectly, including without limitation any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt, (b) to
purchase property or services for the purpose of assuring the owner of such Debt
of its payment, or (c) to maintain the solvency, working capital, equity, cash
flow, fixed charge or other coverage ratio, or any other financial condition of
the primary obligor so as to enable the primary obligor
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to pay any Debt or to comply with any agreement relating to any Debt or
obligation, and shall, in any event, include any contingent obligation under any
letter of credit, application for any letter of credit or other related
documentation.
"Conversion Price" shall have the meaning ascribed to
such term in Section 8(b) hereof.
"Convertible Securities" shall have the meaning
ascribed to such term in Section 8(i)(c) hereof.
"Credit Agreement" shall mean that certain
$200,000,000 Amended and Restated Credit Agreement dated November 14, 1997
between GCI Holdings, Inc. as borrower and NationsBank of Texas, N.A., Credit
Lyonnais New York Branch and TD Securities (USA), Inc., as it may be amended or
supplemented from time to time.
"Debt" shall mean, all obligations, contingent or
otherwise, which in accordance with GAAP are required to be classified on the
balance sheet as liabilities, and in any event including Capitalized Leases,
Contingent Liabilities that are required to be disclosed and quantified in notes
to consolidated financial statements in accordance with GAAP, and liabilities
secured by any Lien on any property, regardless of whether such secured
liability is with or without recourse.
"Debt for Borrowed Money" shall mean, without
duplication, (a) all obligations of a person for borrowed money, (b) all
obligations of a person evidenced by bonds, debentures, notes, letters of credit
(or applications for letters of credit) or other similar instruments, (c) all
obligations of a person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, and (d) all obligations of a person secured by a Lien on any assets or
property of any person.
"Distribution" shall mean the declaration or payment
of any dividend (whether in cash or otherwise) on or in respect of any shares of
any class of capital stock of any person, other than dividends payable solely in
shares of common stock of such person; the purchase, redemption, or other
retirement of any shares of any class of capital stock of any person, directly
or indirectly through a subsidiary or otherwise; the return of capital by any
person to its shareholders as such; or any other distribution on or in respect
of any shares of any class of capital stock of any person.
"Effective Price" shall have the meaning ascribed in
Section 8(i)(d) hereof.
"Equity Security" shall mean any capital stock of the
Company or any security (whether stock or Debt for Borrowed Money) convertible
or exchangeable, with or without consideration, into or for any capital stock,
or any security (whether capital stock or Debt
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for Borrowed Money) carrying any warrant or right to subscribe to or purchase
any stock or similar security, or any such warrant or right.
"Exempt Issuances" shall have the meaning ascribed to
such term in Section 8(i)(a) hereof.
"Funded Debt" shall mean, without duplication, with
respect to any person, all Debt of such person, determined on a consolidated
basis and measured in accordance with GAAP that is either: (a) Debt for Borrowed
Money, (b) Debt having a final maturity (or extendable at the option of the
obligor for a period ending) more than one (1) year after the date of creation
thereof, notwithstanding the fact that the payments are required to be made less
than one (1) year after such date, (c) Capitalized Lease obligations (without
duplication), (d) reimbursement obligations relating to letters of credit
(without duplication), (e) Contingent Liabilities relating to any of the
foregoing (without duplication), (f) Withdrawal Liability, (g) Debt, if any,
associated with interest hedge agreements, (h) payments due under any
non-compete agreements, plus (i) payments due for the deferred purchase price of
property and services (but excluding trade payables that are less than ninety
(90) days old and any thereof that are being contested in good faith).
"GAAP" shall mean, as in effect from time to time,
generally accepted accounting principles used in the United States, consistently
applied.
"Initial Issue Date" shall mean the first date upon
which shares of Series B Preferred Stock are issued.
"Issue Date" shall mean the date of the original
issuance of a share of the Series B Preferred Stock.
"Junior Stock" shall mean the Common Stock and all
other shares of capital stock of the Company, whether presently outstanding or
hereafter issued, other than Series B Preferred Stock.
"Lien" shall mean any mortgage, lien, pledge, charge,
security interest, or other encumbrance of any kind, whether or not filed,
recorded or otherwise perfected under applicable law (including, any conditional
sale or other title retention agreement and any lease deemed to constitute a
security interest and any option or other agreement to give any security
interest).
"Liquidation Preference" shall have the meaning set
forth in Section 3(a) hereof.
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"Mandatory Redemption Date" shall have the meaning
ascribed thereto in Section 4(c) hereof.
"Net Total Interest Expense" shall have the
definition ascribed thereto in the Credit Agreement.
"Operating Cash Flow" shall mean, for any period,
determined in accordance with GAAP, the consolidated net income (loss) for such
period taken as a single accounting period, excluding extraordinary gains and
losses, plus the sum of the following amounts for such period to the extent
included in the determination of such consolidated net income: (a) depreciation
expense, (b) amortization expense and other non-cash charges reducing income,
(c) Net Total Interest Expense, (d) cash income tax expense, (e) deferred income
taxes, plus (f) for the fiscal quarter in which the Company or any of its
Subsidiaries purchases the transponders pursuant to that certain Transponder
Purchase Agreement for Galaxy X, dated August 24, 1995, among GCI Communication
Corp., an indirect wholly owned subsidiary of the Company, and Hughes
Communications Galaxy, Inc., now held by PanAmSat Corp., as assignee, and that
certain Transponder Service Agreement, dated August 24, 1995, among General
Communication Corp., an indirect wholly owned subsidiary of the Company, and
Hughes Communications Satellite Services, Inc. (the "Galaxy X Transponders"),
now held by PanAmSat Corp, as assignee, the annualized amount of economic
savings of the Company or any of its Subsidiaries resulting from the direct
purchase by the Company or any of its Subsidiaries of such Galaxy X Transponders
instead of leasing such Galaxy X Transponders from GCI Satellite Co., Inc., an
indirect wholly owned subsidiary of the Company, and leasing transponders from
other providers; provided, the calculation is made after giving effect to
acquisitions and dispositions of assets during such period as if such
transactions had occurred on the first day of such period. In calculating
"Operating Cash Flow," losses from local telephone businesses shall be offset by
amounts not exceeding $20,000,000 contributed to the Company or any of its
Subsidiaries from the net proceeds of any offering of the Series B Preferred
Stock issued by the Company. The amount attributable to such net proceeds which
is available for such offset shall be reduced by the amount of net proceeds
actually used for such offset as of any point in time.
"Payment Date" shall have the meaning ascribed
thereto in Section 4(d) and Section 4(e) hereof.
"Proposed Amendments" shall mean the proposed
amendments to Restated Articles of Incorporation of the Company which shall be
submitted by the Board to the shareholders of the Company and voted upon by the
shareholders at their next annual meeting of shareholders as required by the
Purchase Agreement. The Proposed Amendments provide that so long as any shares
of Series B Preferred Stock remain outstanding, the Company shall not, directly
or indirectly, without the written consent of the holders of a majority of the
then-outstanding shares of Series B Preferred Stock (i) liquidate or dissolve
the Company or (ii) permit the Company to be merged with or into, or
consolidated with, any other entity or sell all or
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substantially all of the assets of the Company in any case where the terms of
such merger, consolidation or sale would significantly and adversely affect the
rights and preferences of the Series B Preferred Stock.
"Purchase Agreement" shall mean the Series B
Preferred Stock Purchase Agreement by and between the Company, Toronto Dominion
Investments, Inc. and the other purchasers listed therein, dated as of April 30,
1999.
"Redemption Price" shall have the meaning ascribed
thereto in Section 4(f) hereof.
"Series B Preferred Stock" shall mean the Series B
Convertible Redeemable Accreting Preferred Stock of the Company.
"Subsidiary" of a person shall mean (i) any
corporation of which fifty one (51%) percent or more of the Voting Stock, or any
partnership of which 51% or more of outstanding partnership interests, is at any
time owned by the person, or by one or more Subsidiaries of such person, or by
such person and one or more Subsidiaries of such person, and (ii) any other
entity which is controlled or capable of being controlled by such person or by
one or more Subsidiaries of such person or by such person and one or more
Subsidiaries of such person.
"Total Debt" shall mean the outstanding principal
amount of all Funded Debt.
"Total Leverage Ratio" shall mean, without
duplication, as of any date of determination, the ratio of (i) Total Debt of the
Company (on an unconsolidated basis), its subsidiary, GCI, Inc., its subsidiary
GCI Holdings, Inc. and the Restricted Subsidiaries of GCI Holdings, Inc. (as
defined in the Credit Agreement) on such date of determination, to (ii)
Annualized Operating Cash Flow of such entities, all calculated on a
consolidated basis (except as noted above) in accordance with GAAP consistently
applied.
"Trading Day" shall mean, any date that a nationally
recognized exchange or the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation System is open and accepting bids
for the sale of securities listed thereon.
"Triggering Event" shall mean (i) the acceleration of
any obligation outstanding under Funded Debt of the Company or any of its
Subsidiaries having an outstanding balance in excess of $5,000,000, (ii) a
Change of Control, (iii) a Bankruptcy Event, (iv) the breach of Section 7
hereof, (v) the liquidation or dissolution of the Company, or (vi) the merger of
the Company with or into, or the consolidation of the Company with any other
entity or the sale by the Company of all or substantially all of the assets of
the Company, where the terms of
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such merger, consolidation or sale would significantly and adversely affect the
rights and preferences of the Series B Preferred Stock; provided however, that
clauses (v) and (vi) above shall cease to be Triggering Events upon the approval
by the shareholders of the Company of the Proposed Amendments to the Restated
Articles of Incorporation and the effective filing of the Proposed Amendments
with the Alaska Department of Commerce and Economic Development. If the
shareholders of the Company fail to approve the Proposed Amendments or if such
amendments are not filed with the Alaska Department of Commerce and Economic
Development by August 31, 1999, then clauses (v) and (vi) shall remain
Triggering Events for so long as any shares of Series B Preferred Stock remain
outstanding.
"Voting Stock" shall mean any shares having general
voting power in electing the board of directors of any person (irrespective of
whether or not at the time stock of any other class or classes has or might have
voting power by reason or the happening of any contingency).
"Withdrawal Liability" shall have the meaning given
such term under Part I of Subtitle E of Title IV of the Employee Retirement
Income Security Act of 1974, as amended.
Section 2. Dividends.
(a) Right to Dividends. Dividends on each share of
Series B Preferred Stock shall accumulate and accrue from the Issue Date and
shall accrue from day to day thereafter, compounding semi-annually (to the
extent unpaid), whether or not earned or declared at a rate, through the fourth
anniversary of the Initial Issue Date, of 8.5% per annum and, after the fourth
anniversary of the Initial Issue Date, of 17% per annum on the stated amount of
$1,000 per share until paid, subject to Section 4(j) hereof. Dividends accruing
pursuant to this Section 2(a) shall be payable semi-annually in arrears upon
declaration by the Board and (i) during the first four years following the
Initial Issue Date shall be payable, at the option of the Company, either by the
delivery of additional shares of Series B Preferred Stock with a liquidation
value equal to the amount of the dividend or by the delivery of cash and (ii)
after the fourth anniversary of the Initial Issue Date shall be paid only in
cash. If, during the first four years following the Initial Issue Date, the
Company does not make any dividend payment in full in cash to the holders of the
then-outstanding shares of Series B Preferred Stock upon a semi-annual dividend
payment date, the Company shall be deemed to have declared and delivered such
dividend in additional shares of Series B Preferred Stock, as set forth above.
Dividends shall be cumulative so that, if all accrued dividends shall not have
been paid, such accrued and unpaid dividends shall first be fully paid before
any dividend or other distribution shall be paid or declared and set apart for
any Junior Stock.
(b) Priority. Until such time as all current and
accrued dividends on the Series B Preferred Stock for all periods from and after
the Initial Issue Date shall have been
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paid (i) no dividend whatsoever (other than a dividend payable solely in Common
Stock) shall be paid or declared, and no Distribution shall be made, on any
Junior Stock, and (ii) no shares of Junior Stock shall be purchased, redeemed or
acquired by the Company, and no monies shall be paid into or set aside or made
available for a sinking fund for the purchase, redemption or acquisition thereof
other than shares of Junior Stock purchased, redeemed or acquired by the Company
to fund the Company's deferred compensation arrangements. So long as any shares
of Series B Preferred Stock are outstanding, the Company shall not issue, or
obligate itself to issue, any other Equity Security senior to the Series B
Preferred Stock as to dividend or redemption rights or liquidation preferences
or, unless the consent of the holders of 80% of the outstanding shares of Series
B Preferred Stock is obtained, any other Equity Security on a parity with Series
B Preferred Stock as to dividend or redemption rights or liquidation
preferences.
Section 3. Liquidation Rights of Series B Preferred Stock.
(a) Preference. In the event of any liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary, the
holders of the then-outstanding shares of Series B Preferred Stock shall be
entitled to be paid out of the assets of the Company available for distribution
to its shareholders, whether such assets are capital, surplus or earnings,
before any payment or declaration and setting apart for payment of any amount
shall be made in respect of the Junior Stock, an amount (the "Liquidation
Preference") equal to $1,000 per share plus an amount equal to all accrued and
unpaid dividends thereon, whether or not earned or declared, to and including
the date full payment shall be tendered to the holders of the then-outstanding
shares of Series B Preferred Stock with respect to such liquidation, dissolution
or winding up, and no more. If upon any liquidation, dissolution, or winding up
of the Company, whether voluntary or involuntary, the assets to be distributed
to the holders of the then-outstanding shares of Series B Preferred Stock shall
be insufficient to permit the payment to such shareholders of the full
preferential amounts to which they are entitled, then all of the assets of the
Company shall be distributed ratably to the holders of the then-outstanding
shares of Series B Preferred Stock on the basis of the number of shares of
Series B Preferred Stock held by each such shareholder as compared to the
aggregate number of then-outstanding shares of Series B Preferred Stock. The (i)
merger or consolidation of the Company with or into any other entity or entities
where the Company is not the surviving entity (other than a merger solely for
the purpose of changing the Company's state of incorporation) or in which in
excess of 50% of the Company's voting power is transferred, or (ii) the sale or
transfer by the Company of all or substantially all of its assets, shall be
deemed to be a liquidation, dissolution and winding up of the Company within the
meaning of this Section 3.
(b) Remaining Assets. After the payment or
distribution to the holders of the then-outstanding shares of Series B Preferred
Stock of the full preferential amounts to which they are entitled, the holders
of the then-outstanding shares of Junior Stock shall be entitled to receive
ratably all remaining assets of the Company.
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Section 4. Redemption.
(a) Restriction on Redemption and Purchase. Except as
expressly provided in this Section 4, the Company shall not have the right to
purchase, call, redeem or otherwise acquire for value any or all of the Series B
Preferred Stock.
(b) Optional Redemption. At any time after the fourth
anniversary of the Initial Issue Date, the Company may, at its option, upon
provision of written notice at least sixty (60) days prior to the date set for
redemption, redeem the Series B Preferred Stock, in whole or in part, at the
Redemption Price hereinafter specified; provided, that the Company shall redeem
shares of Series B Preferred Stock having an aggregate Liquidation Preference of
at least Two Million Five Hundred Thousand Dollars ($2,500,000) upon each
Payment Date; and provided further, any partial redemption shall be effected
ratably among the holders of Series B Preferred Stock on the basis of the number
of shares of Series B Preferred Stock then held by each holder.
(c) Mandatory Redemption. The Company shall redeem
all outstanding shares of Series B Preferred Stock at the Redemption Price
hereinafter specified upon (i) the twelfth anniversary of the Initial Issue Date
or (ii) the occurrence of a Triggering Event (in either case, "Mandatory
Redemption Date").
(d) Optional Redemption Notice. The Company shall,
not less than sixty (60) days prior to the Payment Date for an optional
redemption pursuant to Section 4(b), give written notice to each holder of
record of shares of Series B Preferred Stock that the Company has determined to
exercise its optional redemption rights hereunder. This notice shall state the
number of then-outstanding shares of Series B Preferred Stock to be redeemed,
the Redemption Price, including the amount of dividends included in such price
and the calculation thereof, the Payment Date and the time, place and manner in
which the holder is to surrender to the Company the certificate or certificates
representing the shares of Series B Preferred Stock to be redeemed. "Payment
Date," for purposes of this Section 4(d), shall mean the date set by the Company
with respect to an optional redemption designated by the Company for payment of
the Redemption Price.
(e) Mandatory Redemption Notice. The Company shall
provide prompt, but in no event later than two (2) Business Days after the
Mandatory Redemption Date, notice to the holders of the Series B Preferred Stock
of the Mandatory Redemption Date. Such notice shall state the Redemption Price,
including the amount of dividends included in such price and the calculation
thereof, and the Payment Date, place and manner in which the holders are to
surrender to the Company the certificates representing shares of Series B
Preferred Stock to be redeemed. "Payment Date," for purposes of this Section
4(e), shall mean the date on or prior to the fifth Business Day after the
Mandatory Redemption Date designated by the Company for payment of the
Redemption Price.
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(f) Redemption Price. In all events, the Redemption
Price of the Series B Preferred Stock (the "Redemption Price") shall be an
amount per share equal to $1,000 plus the amount of all accrued and unpaid
dividends thereon, whether or not earned or declared, to and including the
Payment Date.
(g) Payment of Redemption Price and Surrender of
Stock. On the Payment Date, the Redemption Price of the Series B Preferred Stock
shall be paid to the holders of the Series B Preferred Stock. On or before the
Payment Date, each holder of shares of Series B Preferred Stock to be redeemed
shall surrender the certificate or certificates representing such shares to the
Company, duly endorsed, together with such other instruments as the Company may
reasonably require to insure that such shares of Series B Preferred Stock are
duly and validly transferred to the Company, free of all Liens, and on the
Payment Date the Redemption Price for such shares shall be payable to the order
of the person whose name appears on such certificate or certificates as the
owner thereof, and each surrendered certificate shall be canceled and retired.
Upon an optional redemption of less than all of the then-outstanding shares of
Series B Preferred Stock, upon the surrender to the Company of a certificate or
certificates representing shares of Series B Preferred Stock to be redeemed and
payment by the Company of the Redemption Price, the Company shall issue to the
holder thereof a certificate representing any shares of Series B Preferred Stock
not redeemed but represented by the certificate or certificates surrendered.
(h) Insufficient Funds. If the funds of the Company
legally available for redemption of Series B Preferred Stock on the Payment Date
with respect to a Mandatory Redemption Date are insufficient to redeem all of
the Series B Preferred Stock that are subject to redemption pursuant to Section
4(c) on such date, those funds that are so available will be used to redeem the
maximum possible number of such shares of the Series B Preferred Stock ratably
among the holders thereof on the basis of the number of shares of Series B
Preferred Stock held by each such shareholder. At the earliest time thereafter
as additional funds of the Company are legally available for redemption of
Series B Preferred Stock in the manner provided above, such funds will be
immediately used to redeem the balance of such Series B Preferred Stock subject
to redemption.
(i) Deposit of Funds. At least three (3) Business
Days prior to a Payment Date, the Company shall deposit with any bank or trust
company in the United States, having a capital and surplus of at least $1
billion as a trust fund, a sum equal to the aggregate Redemption Price, with
irrevocable instructions and authority to the bank or trust company to pay, on
or after the Payment Date, the Redemption Price to the respective holders of
then-outstanding shares of Series B Preferred Stock upon the surrender of their
share certificates. The deposit shall constitute full payment of the shares to
their holders; provided, that, until all shares of Series B Preferred Stock are
redeemed and full payment made therefor, the holders thereof shall continue to
be considered shareholders with respect to such shares and shall have all rights
with respect thereto, including the right to receive from the bank or trust
company payment of the Redemption Price of the shares, without interest, upon
surrender of their certificates therefor.
Statement of Stock Designation
Page 12
Any monies so deposited and unclaimed at the end of one year from the Payment
Date shall be released or repaid to the Company, after which the holders of
shares of Series B Preferred Stock called for redemption shall be entitled to
receive payment of the Redemption Price only from the Company.
(j) Accrual of Dividends. Unless the Company defaults
in making the payment of the Redemption Price in accordance with Section 4(i)
hereof, dividends on Series B Preferred Stock subject to redemption will cease
to accrue on and after the Payment Date.
(k) Waiver. At any time after receiving notice of
Mandatory Redemption and prior to two Business Days before the Payment Date, the
holders of Series B Preferred Stock may, by written consent of holders of at
least 80% of the then outstanding Series B Preferred Stock, waive the redemption
of the Series B Preferred Stock as to such mandatory redemption event in which
case the Company shall not be obligated to redeem the shares of Series B
Preferred Stock as to such redemption event. Upon receipt of any such waiver,
the Company shall promptly provide written notice to all holders of Series B
Preferred Stock.
Section 5. Voting Rights.
(a) Series B Preferred Stock. Each holder of shares
of Series B Preferred Stock shall be entitled to vote on all matters submitted
to a vote of the holders of Class A Common Stock and, except as otherwise
expressly provided herein, shall be entitled to the number of votes equal to the
largest number of full shares of Class A Common Stock into which such shares of
Series B Preferred Stock could be converted, pursuant to the provisions of
Section 8(b) hereof, at the record date for the determination of the
shareholders entitled to vote on such matters or, if no such record date is
established, at the date such vote is taken.
(b) Common Stock. Each holder of shares of Class A
Common Stock shall be entitled to one vote for each share thereof held, and each
holder of shares of Class B Common Stock shall be entitled to ten votes for each
share thereof held, as provided in Article IV, Section (b) of the Restated
Articles of Incorporation. Except as otherwise expressly provided herein or as
required by law, the holders of Series B Preferred Stock and the holders of
Common Stock shall vote together and not as separate classes.
Section 6. Restrictions and Limitations. So long as any shares
of Series B Preferred Stock remain outstanding, the Company shall not, directly
or indirectly, without the written consent of the holders of 80% with respect to
items (c), (e) or (g), or a majority with respect to items (a), (b), (d) or (f),
of the then-outstanding shares of Series B Preferred Stock:
(a) Purchase, redeem or otherwise acquire for value
(or pay into or set aside as a sinking fund for such purpose) any Junior Stock
or any warrant, option or right to
Statement of Stock Designation
Page 13
purchase any Junior Stock, other than purchases of shares of Junior Stock for
the purpose of funding deferred compensation arrangements;
(b) Declare or pay any dividends on or declare or
make any other Distribution, direct or indirect (other than a dividend payable
solely in shares of Class A Common Stock), on account of Junior Stock or set
apart any sum for any such purpose;
(c) Amend its Articles of Incorporation in any manner
that would significantly and adversely affect the rights or preferences of the
Series B Preferred Stock;
(d) Take any action which would result in taxation of
the holders of the Series B Preferred Stock under Section 305 of the Internal
Revenue Code of 1986, as amended (the "Code") (or any comparable provision of
the Code as hereafter from time to time amended);
(e) Issue any additional shares of Series B Preferred
Stock after the Initial Issue Date, except pursuant to Section 2 hereof;
(f) Following the effective date of the Proposed
Amendments, liquidate or dissolve the Company; or
(g) Following the effective date of the Proposed
Amendments, permit the Company to be merged with or into, or consolidated with
any other entity or sell all or substantially all of the assets of the Company
in any case where the terms of such merger, consolidation or sale would
significantly and adversely affect the rights and preferences of the Series B
Preferred Stock.
Section 7. Debt Incurrence Covenant. At all times that any
shares of Series B Preferred Stock are outstanding, the Company shall not incur
any Funded Debt if, as a result of such additional Funded Debt, the Company's
Total Leverage Ratio would exceed 7.0:1.
Section 8. Conversion. The holders of Series B Preferred Stock
shall have the following conversion rights:
(a) Right to Convert. Each share of Series B
Preferred Stock shall be convertible, at any time at the option of the holder
thereof, into fully paid and nonassessable shares of Class A Common Stock. Such
conversion right shall continue to apply to any share of Series B Preferred
Stock called for redemption pursuant to Section 4 hereof until the close of
business on the Business Day immediately preceding the applicable Payment Date.
(b) Conversion Price. Each share of Series B
Preferred Stock shall initially be convertible into that number of shares of
Class A Common Stock determined by dividing the then Liquidation Preference of
such share of Series B Preferred Stock by the then
Statement of Stock Designation
Page 14
conversion price, as adjusted pursuant to this Section 8, which conversion price
shall initially be equal to $5.55 per share (the "Conversion Price").
(c) Mechanics of Conversion. Each holder of Series B
Preferred Stock who desires to convert the same into shares of Class A Common
Stock shall surrender the certificate or certificates therefor, duly endorsed,
at the office of the Company or of any transfer agent for the Series B Preferred
Stock or Class A Common Stock, and shall give written notice to the Company at
such office that such holder elects to convert the same and shall state therein
the number of shares of Series B Preferred Stock being converted. Thereupon the
Company shall promptly issue and deliver to such holder a certificate or
certificates for the number of shares of Class A Common Stock to which such
holder is entitled. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
certificate representing the shares of Series B Preferred Stock to be converted,
and the person entitled to receive the shares of Class A Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder of
such shares of Class A Common Stock on such date.
(d) Adjustment for Stock Splits and Combinations. If
the Company at any time or from time to time after the Initial Issue Date
effects a subdivision of the outstanding Class A Common Stock, the Conversion
Price then in effect immediately before that subdivision shall be
proportionately decreased, and, conversely, if the Company at any time or from
time to time after the Initial Issue Date combines the outstanding shares of
Class A Common Stock into a smaller number of shares, the Conversion Price then
in effect immediately before that combination shall be proportionately
increased. Any adjustment under this subsection (d) shall become effective at
the open of business on the date the subdivision or combination becomes
effective.
(e) Adjustment for Certain Dividends and
Distributions. If the Company at any time or from time to time after the Initial
Issue Date makes, or fixes a record date for the determination of holders of
Class A Common Stock entitled to receive, a dividend or other Distribution
payable in additional shares of Class A Common Stock, then and in each such
event the Conversion Price then in effect shall be reset as of the time of such
issuance or, in the event such record date is fixed, as of the open of business
on such record date, by multiplying the Conversion Price then in effect by a
fraction (1) the numerator of which is the total number of shares of Class A
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and (2) the denominator
of which shall be the total number of shares of Class A Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date plus the number of shares of Class A Common Stock
issuable in payment of such dividend or Distribution; provided, however, that if
such record date is fixed and such dividend is not fully paid or if such
Distribution is not fully made on the date fixed therefor, the Conversion Price
shall be recomputed accordingly as of the close of business on such record date
and thereafter
Statement of Stock Designation
Page 15
the Conversion Price shall be adjusted pursuant to this subsection (e) as of the
time of actual payment of such dividends or Distributions.
(f) Adjustments for Other Dividends and
Distributions. In the event the Company at any time or from time to time after
the Initial Issue Date makes, or fixes, a record date for the determination of
holders of Class A Common Stock entitled to receive, a dividend or other
Distribution payable in securities of the Company other than shares of Common
Stock, then and in each such event provision shall be made so that the holders
of Series B Preferred Stock shall receive upon conversion thereof, in addition
to the number of shares of Common Stock receivable thereupon, the amount of
securities of the Company which they would have received had their Series B
Preferred Stock been converted into Class A Common Stock on the date of such
event and had they thereafter, during the period from the date of such event to
and including the conversion date, retained such securities receivable by them
as aforesaid during such period, subject to all other adjustments called for
during such period under this Section 8 with respect to the rights of the
holders of the Series B Preferred Stock.
(g) Adjustment for Reclassification, Exchange and
Substitution. In the event that at any time or from time to time after the
Initial Issue Date, the Class A Common Stock issuable upon the conversion of the
Series B Preferred Stock is changed into the same or a different number of
shares of any class or classes of stock, whether by recapitalization,
reclassification or otherwise (other than a subdivision or combination of shares
or stock dividend or a reorganization, merger, consolidation or sale of assets,
provided for elsewhere in this Section 8), then and in any such event each
holder of Series B Preferred Stock shall have the right thereafter to convert
such stock into the kind and amount of stock and other securities and property
receivable upon such recapitalization, reclassification or other change, by
holders of the maximum number of shares of Class A Common Stock into which such
shares of Series B Preferred Stock could have been converted immediately prior
to such recapitalization, reclassification or change, all subject to further
adjustment as provided herein.
(h) Reorganizations, Mergers, Consolidations or Sales
of Assets. If at any time or from time to time after the Initial Issue Date
there is a capital reorganization of the Class A Common Stock (other than a
recapitalization, subdivision, combination, reclassification or exchange of
shares provided for elsewhere in this Section 8) or a merger or consolidation of
the Company with or into another corporation, or the sale of all or
substantially all of the Company's properties and assets to any other person,
then, as a part of such reorganization, merger, consolidation or sale, provision
shall be made so that the holders of the Series B Preferred Stock shall
thereafter be entitled to receive upon conversion of the Series B Preferred
Stock the number of shares of stock or other securities or property to which a
holder of the number of shares of Class A Common Stock deliverable upon
conversion would have been entitled on such capital reorganization, merger,
consolidation, or sale. In any such case, appropriate adjustment shall be made
in the application of the provisions of this Section 8 with respect to the
rights of the holders of the Series B Preferred Stock after the reorganization,
Statement of Stock Designation
Page 16
merger, consolidation or sale to the end that the provisions of this Section 8
(including adjustment of the Conversion Price then in effect and the number of
shares purchasable upon conversion of the Series B Preferred Stock) shall be
applicable after that event and be as nearly equivalent as may be practicable.
(i) Sale of Shares Below Conversion Price.
a) If at any time or from time to time after
the Initial Issue Date, the Company issues or sells, or is deemed by the express
provisions of this subsection (i) to have issued or sold, Additional Shares of
Class A Common Stock (as hereinafter defined) (other than (A) as a dividend or
other Distribution on any class of stock as provided in subsection (e) above,
(B) upon a subdivision or combination of shares of Class A Common Stock as
provided in subsection (d) above, or (C) shares to be issued to officers,
directors, employees, agents or consultants of the Company pursuant to stock
options or equity incentive plans approved by the Board of Directors of the
Company and representing not more than 5% of the outstanding Class A Common
Stock as of the Initial Issue Date (the "Exempt Issuances")) for an Effective
Price (as hereinafter defined) less than the then existing Conversion Price,
then and in each such case the then existing Conversion Price shall be reduced,
as of the opening of business on the date of such issue or sale, by multiplying
such Conversion Price in effect immediately prior to such new issuance by a
fraction (i) the numerator of which shall be (A) the number of shares of Class A
Common Stock outstanding at the close of business on the day preceding the date
of such issue or sale (assuming conversion of all outstanding shares of Series B
Preferred Stock at the then Conversion Price) plus (B) the number of Shares of
Class A Common Stock which the aggregate consideration received (or by the
express provisions hereof deemed to have been received by the Company for the
total number of Additional Shares of Class A Common Stock so issued) would
purchase at such Conversion Price, and (ii) the denominator of which shall be
the number of shares of Class A Common Stock outstanding at the close of
business on the date of such issuance or sale after giving effect to such issue
of Additional Shares of Class A Common Stock (assuming conversion of all
outstanding shares of Preferred Stock into shares of Class A Common Stock at the
then Conversion Price).
b) For the purpose of making any adjustment
required under this subsection (i), the consideration received by the Company
for any issue or sale of securities shall (A) to the extent it consists of cash
be computed at the amount of cash received by the Company, (B) to the extent it
consists of property other than cash, be computed at the fair value of that
property as determined in good faith by the Board, (C) if Additional Shares of
Class A Common Stock, Convertible Securities (as hereinafter defined) or rights
or options to purchase either Additional Shares of Class A Common Stock or
Convertible Securities are issued or sold together with other stock or
securities or other assets of the Company for a consideration which covers both,
be computed as the portion of the consideration so received that may be
reasonably determined in good faith by the Board to be allocable to such
Additional Shares of Class A
Statement of Stock Designation
Page 17
Common Stock, Convertible Securities or rights or options, and (D) be computed
after reduction for all expenses payable by the Company in connection with such
issue or sale.
c) For the purpose of the adjustment
required under this subsection (i), if the Company issues or sells any rights or
options for the purchase of, or stock or other securities convertible into or
exchangeable for, Additional Shares of Class A Common Stock (such convertible or
exchangeable stock or securities being hereinafter referred to as "Convertible
Securities") or rights or options for the purchase of Convertible Securities,
and if the Effective Price of such Additional Shares of Class A Common Stock
ultimately issuable pursuant thereto is less than the then Conversion Price,
then in each case the Company shall be deemed to have issued at the time of the
issuance of such rights or options or Convertible Securities the maximum number
of Additional Shares of Class A Common Stock issuable upon exercise, conversion
or exchange thereof and to have received as consideration for the issuance of
such shares an amount equal to the total amount of the consideration, if any,
received by the Company for the issuance of such rights or options or
Convertible Securities, plus, in the case of such rights or options, the minimum
amounts of consideration, if any, payable to the Company upon the exercise of
such rights or options, plus, in the case of Convertible Securities, the minimum
amounts of consideration, if any, payable to the Company (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities) upon the conversion or exchange thereof. No further adjustment of
the Conversion Price, adjusted upon the issuance of such rights, options or
Convertible Securities, shall be made as a result of the actual issuance of
Additional Shares of Class A Common Stock on the exercise of any such rights or
options or the conversion or exchange of any such Convertible Securities. If any
such rights or options or the conversion or exchange privilege represented by
any such Convertible Securities shall expire without having been exercised, the
Conversion Price adjusted upon the issuance of such rights, options or
Convertible Securities shall be readjusted to the Conversion Price which would
have been in effect had an adjustment been made on the basis that the only
Additional Shares of Class A Common Stock so issued were the Additional Shares
of Class A Common Stock, if any, actually issued or sold on the exercise of such
rights or options or rights of conversion or exchange of such Convertible
Securities, and such Additional Shares of Class A Common Stock, if any, were
issued or sold for the consideration actually received by the Company upon such
exercise, plus the consideration, if any, actually received by the Company for
the granting of all such rights or options, whether or not exercised, plus the
consideration received for issuing or selling the Convertible Securities
actually converted or exchanged, plus the consideration, if any, actually
received by the Company (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) on the conversion or
exchange of such Convertible Securities. A similar readjustment will be made if
the amount actually paid to the Company upon exercise of conversion of any
Convertible Securities exceeds the minimum amount assumed pursuant to this
Section 8(i).
d) "Additional Shares of Class A Common
Stock" shall mean all shares of Class A Common Stock issued by the Company after
the Series B Issuance Date,
Statement of Stock Designation
Page 18
whether or not subsequently reacquired or retired by the Company, other than (i)
shares of Class A Common Stock issued upon conversion of the Series B Preferred
Stock and (ii) the shares of Class A Common Stock issued as Exempt Issuances.
The "Effective Price" of Additional Shares of Class A Common Stock shall mean
the quotient determined by dividing the total number of Additional Shares of
Class A Common Stock issued or sold, or deemed to have been issued or sold by
the Company under this subsection (i), into the aggregate consideration
received, or deemed to have been received, by the Company for such issue under
this subsection (i), for such Additional Shares of Class A Common Stock.
(j) Accountants' Certificate of Adjustment. In each
case of an adjustment or readjustment of the Conversion Price, the Company, at
its expense, shall cause independent public accountants of recognized standing
selected by the Company (who may be the independent public accountants then
auditing the books of the Company) to compute such adjustment or readjustment in
accordance with the provisions hereof and prepare a certificate showing such
adjustment or readjustment, and shall mail such certificate, by first class
mail, postage prepaid, to each registered holder of the Series B Preferred Stock
at the holder's address as shown in the Company's books. The certificate shall
set forth such adjustment or readjustment, showing in detail the facts upon
which such adjustment or readjustment is based, including a statement of (1) the
consideration received or deemed to be received by the Company for any
Additional Shares of Class A Common Stock issued or sold or deemed to have been
issued or sold, (2) the Conversion Price at the time in effect, (3) the number
of Additional Shares of Class A Common Stock and (4) the type and amount, if
any, of other property which at the time would be received upon conversion of
the Series B Preferred Stock.
(k) Notices of Record Date. In the event of (i) any
taking by the Company of a record of the holders of any class of securities for
the purpose of determining the holders thereof who are entitled to receive any
dividend or other Distribution, or (ii) any capital reorganization of the
Company, any reclassification or recapitalization of the capital stock of the
Company, any merger or consolidation of the Company with or into any other
corporation, or any transfer of all or substantially all of the assets of the
Company to any other person or any voluntary or involuntary dissolution,
liquidation or winding up of the Company, the Company shall mail to each holder
of Series B Preferred Stock at least ten (10) days prior to the record date
specified therein, a notice specifying (1) the date on which any such record is
to be taken for the purpose of such dividend or Distribution and a description
of such dividend or Distribution, (2) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective, and (3) the date, if any, that is to
be fixed, as to when the holders of record of Class A Common Stock (or other
securities) shall be entitled to exchange their shares of Class A Common Stock
(or other securities) for securities or other property deliverable upon such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up.
Statement of Stock Designation
Page 19
(l) Mandatory Conversion. At any time following the
third anniversary of the Initial Issue Date, the Company may require the
immediate conversion of all outstanding shares of Series B Preferred Stock into
shares of Class A Common Stock pursuant to the procedures set forth in this
Section 8 by written notice to all holders of Series B Preferred Stock at the
then effective Conversion Price; provided however, the Company may require
conversion pursuant to this Section 8(l) only if the shares of Class A Common
Stock are traded on a nationally recognized exchange or the National Market
System of the National Association of Security Dealers, Inc. Automated Quotation
System and such shares then have a Closing Price equal to or greater than two
times the then effective Conversion Price and have had such a Closing Price for
a period of thirty consecutive Trading Days.
(m) Conversion Following Default in Payment of
Redemption Price. Notwithstanding anything herein to the contrary, in the event
that the Company fails to make full payment of the Redemption Price on any
Payment Date pursuant to Section 4 hereof, for any reason, including the
prohibition of such payment pursuant to the Credit Agreement, the holders of
shares of Series B Preferred Stock remaining outstanding shall have the right to
convert such shares of Series B Preferred Stock, in whole or in part, pursuant
to the procedures set forth in this Section 8, into shares of Class A Common
Stock at a Conversion Price equal to ninety-five percent (95%) of the average
Closing Price of the Company's Class A Common Stock for the ten (10) Trading
Days immediately prior to the date of conversion. Any shares of Series B
Preferred Stock not so converted shall remain outstanding and shall continue to
represent an obligation of the Company to pay the Redemption Price with respect
thereto. Notwithstanding anything herein to the contrary, the aggregate number
of shares of Class A Common Stock issued upon conversion of shares of Series B
Preferred Stock pursuant to this Section 8(m) shall, in any event, not exceed
19.9% of the total number of issued and outstanding shares of capital stock of
the Company as of the Initial Issue Date.
Section 10. Exclusive Remedy. So long as any obligation is
outstanding under the Credit Agreement, the sole remedy available to holders of
Series B Preferred Stock for the Company's failure to make full payment in cash
of the Redemption Price when required pursuant to Section 4 hereof, shall be the
conversion of the Series B Preferred Stock into shares of Class A Common Stock
pursuant to Section 8(m) hereof unless the lenders under the Credit Agreement
consent to payment in cash.
Section 11. No Reissuance of Series B Preferred Stock. No
share of Series B Preferred Stock acquired by the Company upon conversion, by
reason of redemption, purchase, or otherwise shall be reissued, and all such
shares shall be canceled, retired and eliminated from the shares which the
Company shall be authorized to issue.
RESOLVED FURTHER, that, because certain of the terms and conditions of
the issuance of the Series B Preferred Stock relating to rights of holders of
that stock to vote
Statement of Stock Designation
Page 20
as a class on certain specific activities of the Company, as further described
in Sections 1-11 above, will not become effective until certain amendments to
the Company's Restated Articles of Incorporation become effective, the Board of
Directors shall seek approval of amendments to those articles from the
shareholders of the Company at the annual shareholder meeting to be held on or
about June 10, 1999 or such other date on which it is held, and such terms
relating to those class votes will not become effective until that portion of
those amendments are approved by those shareholders and the amendments are filed
with the Alaska Department of Commerce and Economic Development;
RESOLVED FURTHER, that the president of the Company or any vice
president designated by him and the secretary of the Company or any assistant
secretary of the Company are hereby authorized and directed to take those steps
necessary to cause the issuance and sale of the Series B Preferred Stock
including to execute a statement to be filed in accordance with the requirements
of AS 10.06.320 of the Alaska Statutes and to seek shareholder approval of those
amendments to the Company's Restated Articles of Incorporation to allow all of
the terms of ownership of the Series B Preferred Stock to become effective."
IN WITNESS WHEREOF, the Company has caused this Statement of Stock
Designation to be duly executed on its behalf at Anchorage, Alaska as of this
21st day of April, 1999.
GENERAL COMMUNICATION, INC.
By: /s/
G. Wilson Hughes
Its: Executive Vice President
By: /s/
John M. Lowber
Its: Secretary
Statement of Stock Designation
Page 21