AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CARRIAGE SERVICES, INC.
(Pursuant to Sections 242 and 245 of the General Corporation
Law of the State of Delaware)
Carriage Services, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify as follows:
1. The name of the Corporation is Carriage Services, Inc. and the name
under which the Corporation was originally incorporated was Carriage Funeral
Services, Inc. The date of filing of the Corporation's original Certificate of
Incorporation was December 29, 1993.
2. This Amended and Restated Certificate of Incorporation (the "Restated
Certificate of Incorporation") restates and integrates and further amends the
Certificate of Incorporation of the Corporation.
3. The text of the Certificate of Incorporation as amended or supplemented
heretofore is further amended hereby to read in full as set forth herein and in
Exhibits A, B, C and D hereto containing the Amended and Restated Certificates
of Designation, Preferences, Rights and Limitations of the Corporation's Series
A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series
D Preferred Stock, respectively:
ARTICLE I.
The name of the Corporation is Carriage Services, Inc.
ARTICLE II
The registered office of the Corporation in the State of Delaware is
located at Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of the registered agent of the
Corporation at such address is The Corporation Trust Company.
ARTICLE III
The purpose for which the Corporation is organized is to engage in any and
all lawful acts and activity for which corporations may be organized under the
General Corporation Law of Delaware. The Corporation will have perpetual
existence.
ARTICLE IV.
The total number of shares of stock that the Corporation shall have
authority to issue is, 80,000,000 shares of capital stock, consisting of (i)
50,000,000 shares of preferred stock, par value $.01 per share ("Preferred
Stock"); (ii)15,000,000 shares of Class A Common Stock, par value $.01 per share
("Class A Common Stock"); and (iii) 15,000,000 shares of Class B Common Stock,
par value $.01 per share ("Class B Common Stock"; the Class A Common Stock and
the Class B Common Stock are collectively referred to as "Common Stock").
Effective upon filing of this Amended and Restated Certificate of
Incorporation with the Secretary of State of the State of Delaware, 1996, each
issued and outstanding share of previously authorized common stock of the
Corporation ("Old Common Stock") shall represent one validly issued, fully paid
and non-assessable share of Class B Common Stock. Each certificate which
theretofore represented shares of Old Common Stock shall thereafter represent
that number of shares of Class B Common Stock; PROVIDED, HOWEVER, that each
person holding of record a stock certificate or certificates which represented
shares of Old Common Stock shall receive, upon surrender of such certificate or
certificates, a new certificate or certificates evidencing and representing the
number of shares of Class B Common Stock to which such person is entitled.
The designations and the powers, preferences, rights, qualifications,
limitations, and restrictions of the Common Stock and the Preferred Stock are as
follows:
1. Provisions Relating to the Common Stock.
(a) DIVIDENDS. Subject to the prior rights and preferences, if any,
applicable to shares of the Preferred Stock or any class or series thereof, each
share of Common Stock shall entitle the holder of record thereof to receive
dividends out of funds legally available therefor, when, as and if declared by
the board of directors of the Corporation with respect to any of such class of
stock. No dividend shall be declared or paid in respect of any Common Stock
unless the holders of both the Class A Common Stock and the Class B Common Stock
receive the same per share dividend, payable in the same amount and type of
consideration, as if such classes constituted a single class, except that if any
dividend is declared that is payable in shares of Class A Common Stock or Class
B Common Stock, such dividend shall be declared and paid at the same rate per
share with respect to the Class A Common Stock and the Class B Common Stock, and
the dividend payable on shares of Class A Common Stock shall be payable only in
shares of Class A Common Stock and the dividend payable on shares of Class B
Common Stock shall be payable only in shares of Class B Common Stock.
(b) LIQUIDATION RIGHTS. The holders of Common Stock shall be entitled to
participate in the net assets of the Corporation remaining after any
dissolution, liquidation or winding up of the affairs of the Corporation,
whether voluntary or involuntary, and after payment or provision for the payment
of the debts and liabilities of the Corporation and payment of the liquidation
preference of any shares of capital stock of the Corporation having such a
preference, distributing such proceeds pro-rata among the holders of Common
Stock. The holders of the Class A Common Stock and the Class B Common Stock
shall participate in such assets as if such classes constituted a single class
of stock. A dissolution, liquidation or winding-up of the Corporation, as such
terms are used in this paragraph (b), shall not be deemed to be occasioned by or
to include any consolidation or merger of the Corporation with or into any other
corporation or
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corporations or other entity or a sale, lease, exchange, or conveyance of all or
a part of the assets of the Corporation.
(c) VOTING RIGHTS.
(i) Except as may otherwise be expressly required by the General
Corporation Law of Delaware, the holders of shares of Class A Common Stock and
the holders of shares of Class B Common Stock shall vote together as a single
class, provided, however, that with respect to each matter properly brought
before the shareholders for their consideration and vote, each share of Class A
Common Stock shall entitle the registered holder thereof to one vote on all
matters brought before the common stockholders of the Corporation for a vote and
each share of Class B Common Stock shall entitle the registered holder thereof
to ten votes on all matters brought before the common stockholders of the
Corporation for a vote.
(ii) In the case of each share of Class B Common Stock held of
record by a bank, voting trustee, broker, dealer, clearing agency, or any
nominee thereof, or by any other nominee of the beneficial owner of such share,
the registered holder of such share will be entitled, notwithstanding the
foregoing limitation, to cast ten votes with respect to such share if such
holder shall establish to the satisfaction of the Corporation that such share
has been beneficially owned continuously from the date of issuance by the
original beneficial owner (whose name and address must be specified to the
Corporation), or by a Permitted Transferee (as defined in paragraph 1(e) of
Article IV hereof) of such original beneficial owner. Any such registered holder
who wishes to cast ten votes per share shall file with the transfer agent for
the Class B Common Stock a certificate, on a form that will be mailed to such
holder by such transfer agent on request, certifying as to the information
specified in the preceding sentence and specifying the date on which such holder
desires to exercise voting rights (the "Voting Date"). Any such certificate
shall be deemed filed only if received by the transfer agent not less than ten
nor more than 30 days prior the Voting Date. If such certificate shall not
establish to the satisfaction of the Corporation that the registered holder is
entitled to cast ten votes per share, then, within five business days after the
receipt thereof by the transfer agent, the Corporation shall mail to the person
filing such certificate a notice that describes the deficiency and, unless the
Corporation determines that such person shall have a reasonable opportunity to
cure such deficiency prior to the Voting Date, notifies such person that such
person shall be entitled to only one vote per share on the Voting Date.
(d) CONVERSION BY REGISTERED HOLDER.
(i) Each share of Class B Common Stock shall be convertible at any
time, at the option of the registered holder thereof, into one fully paid and
nonassessable share of Class A Common Stock of the Corporation.
(ii) No fractional shares of Class A Common Stock shall be issued
upon such conversion, but in lieu thereof the Corporation shall pay to the
holder an amount in cash equal to the fair market value of such fractional
share.
(iii) To convert shares of Class B Common Stock under this paragraph
1(d), the registered holder thereof shall surrender the certificate or
certificates representing such shares,
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duly endorsed to the Corporation or in blank (which endorsement shall correspond
exactly with the name or names of the registered holder or holders set forth on
the face of the certificates and on the stock transfer records of the
Corporation), at the office of the transfer agent for the shares of Class B
Common Stock (which may be either the Corporation or any third party retained by
it for such purpose), and shall give written notice to the transfer agent and
the Corporation that such holder elects to convert all or part of the shares
represented thereby, stating therein the names or names (with the address or
addresses) in which the certificate or certificates for shares of Class A Common
Stock are to be issued.
(iv) If the registered holder fully complies with paragraph (iii),
the Corporation shall, as soon as practicable thereafter, instruct the transfer
agent to deliver to such holder, or to such holder's nominee or nominees, a
certificate or certificates for the number of shares of Class A Common Stock to
which such holder shall be entitled, rounded to the nearest whole number of
shares, and a check for any amount payable hereunder in lieu of a fractional
share, along with a certificate representing any shares of Class B Common Stock
that the holder has not elected to convert hereunder but which constituted part
of the shares of Class B Common Stock represented by the certificate or
certificates surrendered.
(v) Shares of Class B Common Stock shall be deemed to have been
converted as of the close of business on the date of the due surrender of the
certificates representing the shares to be converted as provided above, and the
person or persons entitled to receive the shares of Class A Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such shares of Class A Common Stock at such time.
(vi) If the Corporation shall in any manner split or subdivide the
outstanding shares of Class A Common Stock or Class B Common Stock, the
outstanding shares of the other such class of Common Stock shall be split or
subdivided in the same manner, proportionately and on the same basis per share.
(vii) When shares of Class B Common Stock have been converted
pursuant to this paragraph (d), they shall be irrevocably canceled and not
reissued.
(e) AUTOMATIC CONVERSION. Any shares of Class B Common Stock outstanding
on December 31, 2001, without further action of the holder thereof, shall be
automatically converted into shares of Class A Common Stock and certificates
formerly representing outstanding shares of Class B Common Stock shall thereupon
and thereafter represent the like number of shares of Class A Common Stock.
(f) TRANSFERS OF CLASS B COMMON STOCK. No person holding any share of
Class B Common Stock shall transfer, and the Corporation shall not register (nor
permit the transfer agent for the Class B Common Stock to register) the transfer
of, any shares of Class B Common Stock or any interest therein, whether by sale,
assignment, gift, bequest, pledge, hypothecation, encumbrance, or any other
disposition, except to a "Permitted Transferee" of such person (as defined below
in this paragraph). If a holder of shares of Class B Common Stock transfers any
such shares to any person or entity other than a "Permitted Transferee," such
transfer, without any further action of the parties or the Corporation, shall
automatically and irrevocably convert
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such shares into an equal number of shares of Class A Common Stock from the date
of such transfer. The term "Permitted Transferee" shall mean only:
(i) the spouse and any lineal descendant (including adopted
children) of any person duly holding shares of Class A Common Stock (a
"Qualified Holder"), and any spouse of any such lineal descendant (all
such spouses and lineal descendants being hereinafter referred to as
"Family Members");
(ii) the trustee of a trust for the sole benefit of a Qualified
Holder or Family Members;
(iii) a partnership made up exclusively of Qualified Holders or
Family Members or a corporation or limited liability company wholly owned
by Qualified Holders or Family Members, provided, however, that as of the
date that such partnership, corporation or company no longer comprised of
or owned exclusively by Qualified Holders or Family Members, such
partnership, corporation or company will no longer be a Permitted
Transferee and any Class B Common Stock held by it shall automatically and
irrevocably be converted into Class A Common Stock without any further
action of the parties or the Corporation; or
(iv) the executor, administrator or personal representative of the
estate of a qualified holder or of any Family Member, or the guardian or
conservator of a Qualified Holder or any Family Member who has been
adjudged disabled by a court of competent jurisdiction.
2. Provisions Relating to the Preferred Stock.
(a) The Preferred Stock may be issued from time to time in one or more
classes or series, the shares of each class or series to have any designations
and powers, preferences, and rights, and qualifications, limitations, and
restrictions thereof as are stated and expressed in this Article IV and in the
resolution or resolutions providing for the issue of such class or series
adopted by the board of directors of the Corporation as hereafter prescribed.
(b) Authority is hereby expressly granted to and vested in the board of
directors of the Corporation to authorize the issuance of the Preferred Stock
from time to time in one or more classes or series, and with respect to each
class or series of the Preferred Stock, to state by the resolution or
resolutions from time to time adopted providing for the issuance thereof the
following:
(i) whether or not the class or series is to have voting rights,
special, or limited, or is to be without voting rights, and whether or not such
class or series is to be entitled to vote as a separate class either alone or
together with the holders of one or more other classes or series of stock;
(ii) the number of shares to constitute the class or series and the
designations thereof;
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(iii) the preferences and relative, participating, optional, or
other special rights, if any, and the qualifications, limitations, or
restrictions thereof, if any, with respect to any class or series;
(iv) whether or not the shares of any class or series shall be
redeemable at the option of the Corporation or the holders thereof or upon the
happening of any specified event, and, if redeemable, the redemption price or
prices (which may be payable in the form of cash, notes, securities, or other
property), and the time or times at which, and the terms and conditions upon
which, such shares shall be redeemable and the manner of redemption;
(v) whether or not the shares of a class or series shall be subject
to the operation of retirement or sinking funds to be applied to the purchase or
redemption of such shares for retirement, and, if such retirement or sinking
fund or funds are to be established, the periodic amount thereof, and the terms
and provisions relative to the operation thereof;
(vi) the dividend rate, whether dividends are payable in cash, stock
of the Corporation, or other property, the conditions upon which and the times
when such dividends are payable, the preference to or the relation to the
payment of dividends payable on any other class or classes or series of stock,
whether or not such dividends shall be cumulative or noncumulative, and if
cumulative, the date or dates from which such dividends shall accumulate;
(vii) the preferences, if any, and the amounts thereof which the
holders of any class or series thereof shall be entitled to receive upon the
voluntary or involuntary dissolution of, or upon any distribution of the assets
of, the Corporation;
(viii) whether or not the shares of any class or series, at the
option of the Corporation or the holder thereof or upon the happening of any
specified event, shall be convertible into or exchangeable for the shares of any
other class or classes or of any other series of the same or any other class or
classes of stock, securities, or other property of the Corporation and the
conversion price or prices or ratio or ratios or the rate or rates at which such
conversion or exchange may be made, with such adjustments, if any, as shall be
stated and expressed or provided for in such resolution or resolutions; and
(ix) any other special rights and protective provisions with respect
to any class or series as may to the board of directors of the Corporation seem
advisable.
(c) The shares of each class or series of the Preferred Stock may vary
from the shares of any other class or series thereof in any or all of the
foregoing respects and in any other manner. The board of directors of the
Corporation may increase the number of shares of the Preferred Stock designated
for any existing class or series by a resolution adding to such class or series
authorized and unissued shares of the Preferred Stock not designated for any
other class or series. The board of directors of the Corporation may decrease
the number of shares of the Preferred Stock designated for any existing class or
series by a resolution subtracting from such class or series authorized and
unissued shares of the Preferred Stock designated for such existing class or
series, and the shares so subtracted shall become authorized, unissued, and
undesignated shares of the Preferred Stock.
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3. General.
(a) Subject to the foregoing provisions of this Restated Certificate of
Incorporation, the Corporation may issue shares of its Preferred Stock and
Common Stock from time to time for such consideration (not less than the par
value thereof) as may be fixed by the board of directors of the Corporation,
which is expressly authorized to fix the same in its absolute discretion subject
to the foregoing conditions. Shares so issued for which the consideration shall
have been paid or delivered to the Corporation shall be deemed fully paid stock
and shall not be liable to any further call or assessment thereon, and the
holders of such shares shall not be liable for any further payments in respect
of such shares.
(b) The Corporation shall have authority to create and issue rights and
options entitling their holders to purchase shares of the Corporation's capital
stock of any class or series or other securities of the Corporation, and such
rights and options shall be evidenced by instrument(s) approved by the board of
directors of the Corporation. The board of directors of the Corporation shall be
empowered to set the exercise price, duration, times for exercise, and other
terms of such rights or options; PROVIDED, HOWEVER, that the consideration to be
received for any shares of capital stock subject thereto shall not be less than
the par value thereof.
ARTICLE V.
The number, classification, and terms of the board of directors of the
Corporation and the procedures to elect directors, to remove directors, and to
fill vacancies in the board of directors shall be as follows:
(a) The number of directors that shall constitute the whole board of
directors shall from time to time be fixed exclusively by the board of directors
by a resolution adopted by a majority of the whole board of directors serving at
the time of that vote. In no event shall the number of directors that constitute
the whole board of directors be fewer than three. No decrease in the number of
directors shall have the effect of shortening the term of any incumbent
director. Directors of the Corporation need not be elected by written ballot
unless the by-laws of the Corporation otherwise provide.
(b) The board of directors of the Corporation shall be divided into three
classes designated Class I, Class II, and Class III, respectively, all as nearly
equal in number as possible, with each director then in office receiving the
classification that at least a majority of the board of directors designates.
The initial term of office of directors of Class I shall expire at the annual
meeting of stockholders of the Corporation in 1997, of Class II shall expire at
the annual meeting of stockholders of the Corporation in 1998, and of Class III
shall expire at the annual meeting of stockholders of the Corporation in 1999,
and in all cases as to each director until his successor is elected and
qualified or until his earlier death, resignation or removal. At each annual
meeting of stockholders beginning with the annual meeting of stockholders in
1997, each director elected to succeed a director whose term is then expiring
shall hold his office until the third annual meeting of stockholders after his
election and until his successor is elected and qualified or until his earlier
death, resignation or removal. If the number of directors that constitutes the
whole board of directors is changed as permitted by this Article V, the majority
of the whole board of directors that adopts the change shall also fix and
determine the number of directors comprising
7
each class; provided, however, that any increase or decrease in the number of
directors shall be apportioned among the classes as equally as possible.
(c) Vacancies in the board of directors resulting from death, resignation,
retirement, disqualification, removal from office, or other cause and
newly-created directorships resulting from any increase in the authorized number
of directors may be filled by no less than a majority vote of the remaining
directors then in office, though less than a quorum, who are designated to
represent the same class or classes of stockholders that the vacant position,
when filled, is to represent or by the sole remaining director (but not by the
stockholders except as required by law), and each director so chosen shall
receive the classification of the vacant directorship to which he has been
appointed or, if it is a newly-created directorship, shall receive the
classification that at least a majority of the board of directors designates and
shall hold office until the first meeting of stockholders held after his
election for the purpose of electing directors of that classification and until
his successor is elected and qualified or until his earlier death, resignation,
or removal from office.
(d) A director of any class of directors of the Corporation may be removed
before the expiration date of that director's term of office, only for cause, by
an affirmative vote of the holders of not less than eighty percent (80%) of the
votes of the outstanding shares of the class or classes or series of stock then
entitled to be voted at an election of directors of that class or series, voting
together as a single class, cast at the annual meeting of stockholders or at any
special meeting of stockholders called by a majority of the whole board of
directors for this purpose.
(e) Notwithstanding any other provisions of this Restated Certificate of
Incorporation or any provision of law that might otherwise permit a lesser or no
vote, but in addition to any affirmative vote of the holders of any particular
class or series of the capital stock of the Corporation required by law or by
this Restated Certificate of Incorporation, the affirmative vote of the holders
of not less than eighty percent (80%) of the votes of the outstanding shares of
the Corporation then entitled to be voted in an election of directors, voting
together as a single class, shall be required to amend or repeal, or to adopt
any provision inconsistent with, this Article V.
ARTICLE VI.
All of the power of the Corporation, insofar as it may be lawfully vested
by this Restated Certificate of Incorporation in the board of directors, is
hereby conferred upon the board of directors of the Corporation. In furtherance
of and not in limitation of that power or the powers conferred by law, (1) a
majority of directors then in office (or such higher percentage as may be
specified in the by-laws with respect to any provision thereof) shall have the
power to adopt, amend, and repeal the by-laws of the Corporation; (2) the
stockholders of the Corporation shall have no power to appoint or remove
directors as members of committees of the board of directors, nor to abrogate
the power of the board of directors to establish any such committees or the
power of any such committee to exercise the powers and authority of the board of
directors; (3) the stockholders of the Corporation shall have no power to elect
or remove officers of the Corporation nor to abrogate the power of the board of
directors to elect and remove officers of the Corporation; and (4)
notwithstanding any other provision of this Restated Certificate of
Incorporation or any provision of law that might otherwise permit a lesser or no
8
vote, but in addition to any affirmative vote of the holders of any particular
class or series of the capital stock of the Corporation required by law or by
this Restated Certificate of Incorporation, the by-laws of the Corporation shall
not be adopted, altered, amended or repealed by the stockholders of the
Corporation except in accordance with the provisions of the by-laws and by the
vote of the holders of not less than a majority of the outstanding shares of
stock then entitled to vote upon the election of directors, voting together as a
single class, or such higher vote as is set forth in the by-laws. In the event
of a direct conflict between the by-laws of the Corporation and this Restated
Certificate of Incorporation, the provisions of this Restated Certificate of
Incorporation shall be controlling. Notwithstanding any other provisions of this
Restated Certificate of Incorporation or any provision of law that might
otherwise permit a lesser or no vote, but in addition to any affirmative vote of
the holders of any particular class or series of the capital stock of the
Corporation required by law or by this Restated Certificate of Incorporation,
the affirmative vote of the holders of not less than eighty percent (80%) of the
votes of the shares of the Corporation then entitled to be voted in an election
of directors, voting together as a single class, shall be required to amend or
repeal, or to adopt any provision inconsistent with, this Article VI.
ARTICLE VII.
Any action required or permitted to be taken by the stockholders of the
Corporation may be taken without a meeting if a consent in writing, setting
forth the action so taken, is signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted.
ARTICLE VIII.
Special meetings of the stockholders of the Corporation, and any proposals
to be considered at such meetings, may be called and proposed exclusively by the
board of directors, pursuant to a resolution approved by a majority of the
members of the board of directors at the time in office, and no stockholder of
the Corporation shall require the board of directors to call a special meeting
of common stockholders or to propose business at a special meeting of
stockholders. Except as otherwise required by law or regulation, no business
proposed by a stockholder to be considered at an annual meeting of the
stockholders (including the nomination of any person to be elected as a director
of the Corporation) shall be considered by the stockholders at that meeting
unless, no later than sixty (60) days before the annual meeting of stockholders
or (if later) ten days after the first public notice of that meeting is sent to
stockholders, the Corporation receives from the stockholder proposing that
business a written notice that sets forth (1) the nature of the proposed
business with reasonable particularity, including the exact text of any proposal
to be presented for adoption, and the reasons for conducting that business at
the annual meeting; (2) with respect to each such stockholder, that
stockholder's name and address (as they appear on the records of the
Corporation), business address and telephone number, residence address and
telephone number, and the number of shares of each class of stock of the
Corporation beneficially owned by that stockholder; (3) any interest of the
stockholder in the proposed business; (4) the name or names of each person
nominated by the stockholder to be elected or re-elected as a director, if any;
and (5) with respect to each nominee, that nominee's name, business address and
telephone number, and residence address and
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telephone number, the number of shares, if any, of each class of stock of the
Corporation owned directly and beneficially by that nominee, and all information
relating to that nominee that is required to be disclosed in solicitations of
proxies for elections of directors, or is otherwise required, pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (or any provision of law subsequently replacing Regulation 14A),
together with a duly acknowledged letter signed by the nominee stating his or
her acceptance of the nomination by that stockholder, stating his or her
intention to serve as director if elected, and consenting to being named as a
nominee for director in any proxy statement relating to such election. The
person presiding at the annual meeting shall determine whether business
(including the nomination of any person as a director) has been properly brought
before the meeting and, if the facts so warrant, shall not permit any business
(or voting with respect to any particular nominee) to be transacted that has not
been properly brought before the meeting. Notwithstanding any other provisions
of this Restated Certificate of Incorporation or any provision of law that might
otherwise permit a lesser or no vote, but in addition to any affirmative vote of
the holders of any particular class or series of the capital stock of the
Corporation required by law or by this Restated Certificate of Incorporation,
the affirmative vote of the holders of not less than eighty percent (80%) of the
shares of the Corporation then entitled to be voted in an election of directors,
voting together as a single class, shall be required to amend or repeal, or to
adopt any provision inconsistent with, this Article VIII.
ARTICLE IX.
No contract or transaction between the Corporation and one or more of its
directors, officers, or stockholders or between the Corporation and any person
(as used herein "person" means any corporation, partnership, association, firm,
trust, joint venture, political subdivision, or instrumentality) or other
organization in which one or more of its directors, officers, or stockholders
are directors, officers, or stockholders, or have a financial interest, shall be
void or voidable solely for this reason, or solely because the director or
officer is present at or participates in the meeting of the board or any
committee thereof which authorizes the contract or transaction, or solely
because his, her, or their votes are counted for such purpose, if: (i) the
material facts as to his or her relationship or interest and as to the contract
or transaction are disclosed or are known to the board of directors or the
committee, and the board of directors or the committee in good faith authorizes
the contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or (ii) the material facts as to his or her relationship or interest and
as to the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by majority vote of the stockholders; or (iii) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved, or ratified by the board of directors, a committee
thereof, or the stockholders. Interested directors may be counted in determining
the presence of a quorum at a meeting of the board of directors or of a
committee which authorizes the contract or transaction.
ARTICLE X
The Corporation shall indemnify and hold harmless any person who was, is,
or is threatened to be made a party to a proceeding (as hereinafter defined) by
reason of the fact that he or she (i) is or was a director or officer of the
Corporation or (ii) while a director or officer
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of the Corporation, is or was serving at the request of the Corporation as a
director, officer, partner, venturer, proprietor, trustee, employee, agent, or
similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan, or other
enterprise, to the fullest extent permitted under the Delaware General
Corporation Law, as the same exists or may hereafter be amended. Such right
shall be a contract right and as such shall run to the benefit of any director
or officer who is elected and accepts the position of director or officer of the
Corporation or elects to continue to serve as a director or officer of the
Corporation while this Article X is in effect. Any repeal or amendment of this
Article X shall be prospective only and shall not limit the rights of any such
director or officer or the obligations of the Corporation with respect to any
claim arising from or related to the services of such director or officer in any
of the foregoing capacities prior to any such repeal or amendment to this
Article X. Such right shall include the right to be paid by the Corporation
expenses incurred in defending any such proceeding in advance of its final
disposition to the maximum extent permitted under the Delaware General
Corporation Law, as the same exists or may hereafter be amended. If a claim for
indemnification or advancement of expenses hereunder is not paid in full by the
Corporation within sixty (60) days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim, and if successful in
whole or in part, the claimant shall also be entitled to be paid the expenses of
prosecuting such claim. It shall be a defense to any such action that such
indemnification or advancement of costs of defense are not permitted under the
Delaware General Corporation Law, but the burden of proving such defense shall
be on the Corporation. Neither the failure of the Corporation (including its
board of directors, independent legal counsel, or stockholders) to have made its
determination prior to the commencement of such action that indemnification of,
or advancement of costs of defense to, the claimant is permissible in the
circumstances nor an actual determination by the Corporation (including its
board of directors, independent legal counsel, or stockholders) that such
indemnification or advancement is not permissible shall be a defense to the
action or create a presumption that such indemnification or advancement is not
permissible. In the event of the death of any person having a right of
indemnification under the foregoing provisions, such right shall inure to the
benefit of his or her heirs, executors, administrators, and personal
representatives. The rights conferred above shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute, bylaw,
resolution of stockholders or directors, agreement, or otherwise.
The Corporation may additionally indemnify any employee or agent of the
Corporation to the fullest extent permitted by law.
As used herein, the term "proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action, suit, or
proceeding, and any inquiry or investigation that could lead to such an action,
suit, or proceeding.
ARTICLE XI
Elections of directors need not be by written ballot unless the by-laws of
the Corporation shall so provide.
11
ARTICLE XII
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit. Any repeal or amendment of this Article XI by the stockholders
of the Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Corporation arising
from an act or omission occurring prior to the time of such repeal or amendment.
In addition to the circumstances in which a director of the Corporation is not
personally liable as set forth in the foregoing provisions of this Article XI, a
director shall not be liable to the Corporation or its stockholders to such
further extent as permitted by any law hereafter enacted, including, without
limitation, any subsequent amendment to the Delaware General Corporation Law.
4. This Amended and Restated Certificate of Incorporation was duly adopted
by vote of the stockholders in accordance with Sections 228, 242 and 245 of the
General Corporation Law of the state of Delaware.
IN WITNESS WHEREOF, said Carriage Services, Inc. has caused this Amended
and Restated Certificate of Incorporation to be signed by Melvin C. Payne, its
President, this day of July, 1996.
Carriage Services, Inc.
By: ___________________________________
Melvin C. Payne, President
12
CERTIFICATE OF CORRECTION
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CARRIAGE SERVICES, INC.
Carriage Services, Inc., a Delaware corporation organized and
existing under and by virtue of The General Corporation Law of the State of
Delaware, and originally incorporated under the name of Carriage Funeral
Services, Inc., DOES HEREBY CERTIFY:
1. The name of the corporation is Carriage Services, Inc.
2. An Amended and Restated Certificate of Incorporation was filed with
the Secretary of State of Delaware on July 3, 1996, and said Amended
and Restated Certificate of Incorporation requires correction as
permitted by subsection (f) of Section 103 of The General
Corporation Law of the State of Delaware.
3. The inaccuracy or defect of the Amended and Restated Certificate of
Incorporation to be corrected is as follows: (i) the letter "A"
following the word Class contained in the second line of Section
1(f)(i) of Article IV should be deleted and the letter "B" inserted
in lieu thereof.
4. Section 1(f)(i) of Article IV of the Amended and Restated
Certificate of Incorporation is corrected to read as follows:
"(i) the spouse and any lineal descendant (including adopted
children) of any person duly holding shares of Class B Common
Stock (a "Qualified Holder"), and any spouse of any such
lineal descendant (all such spouses and lineal descendants
being hereinafter referred to as "Family Members");"
IN WITNESS WHEREOF, the undersigned authorized officer has executed this
Certificate of Correction the ________ day of September, 1996.
CARRIAGE SERVICES, INC.
By:_________________________________________
Melvin C. Payne, President
13
Exhibit A
AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION, PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES A PREFERRED STOCK
OF
CARRIAGE SERVICES, INC.
Pursuant to authority conferred upon the Board of Directors of the
Corporation by its Certificate of Incorporation, and pursuant to the provisions
of Section 151(g) of the General Corporation Law of Delaware, such Board of
Directors by written unanimous consent dated January 14, 1994, duly adopted a
resolution providing for the issuance of a series of Seven Million (7,000,000)
shares of the Corporation's Preferred Stock, $.01 par value per share, to be
designated "Series A Preferred Stock", and fixing the voting powers, preferences
and relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof. The following is a restatement of the
original Certificate of Designation, Preferences, Rights and Limitations to
reflect amendments to the original resolution that were adopted by the
stockholders of the Corporation, including the holders of the Series A Preferred
Stock, by written consent pursuant to Section 228 of the General Corporation Law
of Delaware:
There shall be established and authorized for issuance a series of
the Corporation's Preferred Stock, $.01 par value per share, designated
"Series A Preferred Stock" (herein referred to as "Series A Preferred
Stock"), consisting of Seven Million (7,000,000) shares, each of the par
value of $.01 per share, and having the voting powers, preferences and
relative, participating, optional and other rights, and the
qualifications, limitations or restrictions set forth below:
1. DEFINITIONS. For purposes hereof, the following terms shall have the
following definitions or shall be subject to the following rules of
construction:
(a) "Act" means the General Corporation Law of Delaware, as
amended, or any successor state statute.
(b) "Board of Directors" means the Board of Directors of the
Corporation.
(c) "Common Stock" means (i) shares of Class A Common Stock,
or (ii) shares of Class B Common Stock, as applicable. "Class A
Common Stock" means the Corporation's Class A Common Stock, par
value $.01 per share. "Class B Common Stock" means the Corporation's
Class B Common Stock, par value $.01 per share.
(d) "Fiscal Year" means the fiscal year of the Corporation
determined from time to time by the Board of Directors for financial
reporting purposes.
(e) "Initial Public Offering" means an underwritten public
offering of either Class A Common Stock or Class B Common Stock
pursuant to a registration statement filed under the Securities Act
(other than any registration statement relating to warrants, options
or shares of capital stock of the Corporation granted or to be
granted or sold primarily to employees, directors, or officers of
the Corporation, a registration statement filed pursuant to Rule 145
under the Securities Act or any successor rule, a registration
statement relating to employee benefit plans or interests therein or
any registration statement covering securities issued in connection
with any debt financing of the Corporation).
(f) "Major Transaction" means a single transaction involving,
or a series of transactions having the cumulative effect of, the
sale of all or substantially all of the assets or the outstanding
capital stock of the Corporation, or a merger or consolidation of
the Corporation with or into another corporation or other entity in
which the Corporation is not the survivor, or any combination of the
foregoing involving the Corporation or one or more of its
subsidiaries.
(g) The term "outstanding", when used with reference to shares
of capital stock, shall mean issued shares, excluding shares held by
the Corporation or a subsidiary of the Corporation.
(h) "Preferred Stock" means shares of any series of the Corpo-
ration's Preferred Stock, $.01 par value per share.
(i) "Return Amount" means an amount expressed in dollars
computed by multiplying the Return Percentage times $1.00 (in the
case of Series A Preferred Stock) or the initial Conversion Price
under Section 5(c) below (in the case of Class B Common Stock), as
the case may be.
(j) "Return Percentage" means, for any given period of time,
the aggregate percentage computed at the rate of five percent (5%)
per annum from the date of issuance of the Series A Preferred Stock
through the date in question.
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(k) "Securities Act" means the Securities Act of 1933, as
amended.
(l) "Series A Preferred Stock" means the series of Preferred
Stock designated by the Corporation as its Series A Preferred Stock,
$.01 par value per share.
(m) All accounting terms used herein and not expressly defined
herein shall have the meanings given to them in accordance with
generally accepted accounting principles consistently applied and in
effect as of the date of the relevant calculation.
(n) Whenever any reference is made herein to the outstanding
shares of Common Stock determined "on a fully diluted basis," such
reference shall mean the total number of shares of Common Stock
which would be outstanding after giving effect to the full
conversion, exercise or exchange of all capital stock, convertible
notes, warrants, options and other securities convertible or
exercisable into or exchangeable with the Common Stock, including
(without limitation) the Series A Preferred Stock, without regard to
vesting rights and other similar contingencies.
2. DIVIDENDS. The holders of shares of Series A Preferred Stock shall
be entitled to receive dividends on account of such shares only when
and as declared by the Board of Directors.
3. REDEMPTION.
(a) MANDATORY REDEMPTION. On December 31, 2003, the
Corporation shall redeem all of the shares of Series A Preferred
Stock then outstanding (subject, however, to the right of the
holders of the Series A Preferred Stock to convert their shares
pursuant to Section 5), at a redemption price of $1.50 per share.
(b) GENERAL. From and after the setting aside of the funds
necessary for redemption, notwithstanding that any certificate for
shares of Series A Preferred Stock so called for redemption shall
not have been surrendered for cancellation, the shares to be
redeemed shall no longer be deemed outstanding, and the holders of
certificates representing such shares shall have with respect to
such shares no rights in or with respect to the Corporation except
the right to receive, upon the surrender of such certificates, the
redemption price therefor. Shares of Series A Preferred Stock
redeemed by the Corporation pursuant to this Section 3, or shares of
Series A Preferred Stock otherwise purchased by the Corporation,
shall not be reissued and shall be cancelled and retired in the
manner provided by the laws of the State of Delaware, and no shares
of Series A Preferred Stock shall be issued in lieu thereof.
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4. PREFERENCE ON LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) DEFINITION. A consolidation or merger of the Corporation,
a sale or transfer of substantially all of its assets as an
entirety, or any purchase or redemption of capital stock of the
Corporation of any class, shall not be regarded as "liquidation,
dissolution or winding up of the affairs of the Corporation" within
the meaning of this Section 4, unless pursuant to such event or
transaction the Corporation is permanently or indefinitely ceasing
its business activities in the funeral service industry.
(b) SERIES A PREFERRED STOCK. During any proceedings for the
voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, the holders of the Series A
Preferred Stock shall be entitled to receive, before any
distribution of the assets of the Corporation shall be made in
respect of the outstanding Common Stock, an amount in cash for each
share of Series A Preferred Stock equal to (i) $1.25, if such
proceedings occur on or before December 31, 1998, or (ii) $1.00 plus
the Return Amount, if such proceedings occur after December 31, 1998
(in either event the "Liquidation Preference"), or funds necessary
for such payment shall have been set aside in trust for the account
of the holders of the outstanding Series A Preferred Stock so as to
be and continue available therefor. If upon such liquidation,
dissolution or winding up, the assets distributable to the holders
of the Series A Preferred Stock shall be insufficient to permit the
payment to them of such Liquidation Preference per share, the assets
of the Corporation shall be distributed to the holders of the Series
A Preferred Stock ratably until they shall have received the full
amount to which they would otherwise be entitled. If the assets of
the Corporation are sufficient to permit the payment of such amounts
to the holders of the Series A Preferred Stock, the remainder of the
assets of the Corporation, if any, after the distributions as
aforesaid shall be distributed and divided ratably among the holders
of the Common Stock then outstanding according to their respective
shares.
5. CONVERSION. The Series A Preferred Stock shall be convertible into
Class B Common Stock in accordance with the following provisions of
this Section 5.
(a) OPTIONAL CONVERSION. Subject to and upon compliance with
the provisions of this Section 5, each holder of shares of Series A
Preferred Stock shall have the right at such holder's option, at any
time prior to December 31, 2003, to convert all or any portion of
such holder's shares of Series A Preferred Stock into fully paid and
nonassessable shares of Class B Common Stock, at the Conversion
Price (hereafter defined) in effect on the Conversion Date
(hereafter defined), upon the terms hereinafter set forth. In the
event of any mandatory redemption of Series A Preferred Stock under
Section 3, each holder of Series A Preferred Stock may elect to
convert all or any portion of such holder's shares into Class B
Common Stock pursuant to this Section 5, in which case the
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provisions of this Section 5 shall govern and control as to the
shares so converted.
(b) AUTOMATIC CONVERSION. On the date that either (i) a
registration statement that has been filed with the Securities and
Exchange Commission with respect to an Initial Public Offering shall
become effective under the Securities Act, in which the public
offering price per share is at least equal to one hundred
twenty-five percent (125%) of the Conversion Price then in effect,
or (ii) a Major Transaction has occurred, in which the net proceeds
that the Board of Directors in good faith determines will be paid to
a holder of Common Stock therefrom is anticipated to be at least
equal to one hundred twenty-five percent (125%) of the Conversion
Price then in effect, then in either such event each share of Series
A Preferred Stock then outstanding shall be automatically converted
into shares of Class B Common Stock in accordance with the following
provisions of this Section 5. In the case of net proceeds from a
Major Transaction other than in cash, the value of such proceeds
shall be determined by the Board of Directors, and for purposes of
this paragraph (b) and paragraph (f)(vii) below, the good faith
determination of the Board of Directors shall be conclusive.
Notwithstanding that any certificates for shares of Series A
Preferred Stock shall not have been surrendered for cancellation,
the shares of Series A Preferred Stock so converted shall no longer
be deemed outstanding, and the holders of certificates representing
such shares of Series A Preferred Stock shall have, from and after
the date referred to above, the same rights in or with respect to
the Corporation has holders of shares of the number of shares of
Class B Common Stock into which such shares of Series A Preferred
Stock have been so converted. Each such holder shall have the right,
upon surrender of such certificates, to receive from the Corporation
a certificate or certificates representing the number of shares of
Class B Common Stock calculated in accordance with the following
provisions of this Section 5 registered in the name of such holder.
Within 30 days following the effective date of such registration
statement or the consummation of such Major Transaction, the
Corporation shall deliver to each holder whose shares of Series A
Preferred Stock have been converted into Class B Common Stock as
provided hereunder a written notice setting forth the fact and
effective date of such conversion, the number of shares of Class B
Common Stock into which such holder's shares of Series A Preferred
Stock were converted, and a statement that such holder is entitled
to receive a new certificate representing such number of shares of
Class B Common Stock in exchange for the certificates representing
such holder's shares of Series A Preferred Stock; provided, however,
that the failure of the Corporation to provide such notice to any
holder or any deficiency in any such notice shall not impair or
affect the automatic conversion of such holder's Series A Preferred
Stock into Class B Common Stock as provided herein.
(c) CONVERSION PRICE. The shares of Series A Preferred Stock
to be converted shall be convertible into the number of shares of
Class B
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Common Stock as is determined by multiplying the number of shares of
Series A Preferred Stock to be converted by a fraction, the
numerator of which is $1.00 and the denominator of which is the
Conversion Price in effect on the Conversion Date. The Conversion
Price at which shares of Class B Common Stock shall initially be
issuable upon conversion of shares of Series A Preferred Stock shall
be $3.57-1/7 per share (subject to adjustment for certain events
including subdivisions and combinations of the Common Stock and as
provided below, hereafter the "Conversion Price").
(d) MECHANICS OF CONVERSION. The holder of any shares of
Series A Preferred Stock may exercise the conversion right specified
in paragraph (a) above by surrendering to the Corporation or any
transfer agent of the Corporation the certificate or certificates
for the shares to be converted, accompanied by written notice
stating that the holder elects to convert all or a specified portion
of the shares represented thereby. Optional conversion under
paragraph (a) shall be deemed to have been effected on the date when
notice of an election to convert and certificates for the shares to
be converted has been delivered, and automatic conversion under
paragraph (b) shall be deemed to have been effected as therein
provided; any such date is referred to herein as the "Conversion
Date". As promptly as practicable thereafter the Corporation shall
issue and deliver to or upon the written order of such holders a
certificate or certificates for the number of full shares of Class B
Common Stock to which such holders are entitled rounded down to the
next whole share as provided in paragraph (e) below. The person in
whose name the certificate or certificates of Class B Common Stock
are to be issued shall be deemed to have become a holder of record
of such Class B Common Stock on the Conversion Date.
(e) FRACTIONAL SHARES. No fractional shares of Class B Common
Stock or scrip shall be issued upon conversion of shares of Series A
Preferred Stock. Instead of any fractional shares of Class B Common
Stock which would otherwise be issuable upon conversion of any
shares of Series A Preferred Stock, the number of full shares of
Class B Common Stock issuable upon conversion thereof shall be
reduced to the next lowest number of whole shares, and the
Corporation will pay a cash adjustment in respect of any surrendered
shares of Series A Preferred Stock not converted into Class B Common
Stock in an amount equal to $1.00 per share of Series A Preferred
Stock.
(f) CONVERSION PRICE ADJUSTMENTS. The Conversion Price and the
number of shares of Class B Common Stock issuable upon conversion
("Conversion Shares") shall be subject to adjustment from time to
time as follows:
(i) CERTAIN ISSUANCES OF EQUITY STOCK. If, at any time
following issuance of any Series A Preferred Stock, the
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Corporation issues any Common Stock, or any security or
evidence of indebtedness which is convertible into or
exchangeable for Common Stock, or any warrant, option or other
right to subscribe for or purchase Common Stock or any
security or evidence of indebtedness which is convertible or
exchangeable for Common Stock (hereinafter, "Equity Stock"),
other than Excluded Stock (as defined in clause (D) below),
for a consideration per share less than the Conversion Price
in effect immediately prior to such issuance, then the
Conversion Price shall immediately be reduced to a price per
share determined by dividing (x) an amount equal to the sum of
(i) the number of shares of Equity Stock of the Corporation
outstanding immediately prior to such issue or sale multiplied
by the then existing Conversion Price and (ii) the
consideration, if any, received by the Corporation upon such
issue or sale, by (y) the total number of shares of Equity
Stock of the Corporation outstanding immediately after such
issue or sale. The number of shares of Equity Stock
outstanding at any given time for the purposes of the
foregoing computation means the shares of Common Stock
outstanding together with all shares of Common Stock issuable
upon conversion or exercise of any such Equity Stock,
excluding any shares of Common Stock previously outstanding
that have been reacquired by the Corporation and constitute
treasury shares.
For purposes of any adjustment of the Conversion Price
pursuant to this subparagraph (i) of this Section 5(f), the
following provisions shall be applicable:
(A) CASH. In the case of the issuance of Equity
Stock for cash, the amount of the consideration received
by the Corporation shall be deemed to be the amount of
the cash proceeds received by the Corporation for such
Equity Stock before deducting therefrom any discounts,
commissions, taxes, legal and accounting fees or other
expenses allowed, paid or incurred by the Corporation in
connection with the issuance and sale thereof.
(B) CONSIDERATION OTHER THAN CASH. In the case of
the issuance of Equity Stock (other than as described in
clause (C) below) for a consideration in whole or in
part other than cash, including securities acquired in
exchange therefor (other than securities by their terms
so exchangeable), the consideration other than cash
shall be deemed to be the fair market value thereof as
reasonably determined by the Board of Directors in good
faith.
-20-
(C) OPTIONS AND CONVERTIBLE SECURITIES, ETC. In
the case of the issuance of (i) options, warrants or
other rights to purchase or acquire Common Stock or
other Equity Stock (whether or not at the time
exercisable), (ii) securities by their terms convertible
into or exchangeable for Common Stock or other Equity
Stock (whether or not at the time so convertible or
exercisable) or (iii) options, warrants or rights to
purchase such convertible or exchangeable securities
(whether or not at the time exer- cisable):
(1) the aggregate maximum number of shares
of Common Stock deliverable upon exercise of such
options, warrants or other rights to purchase or
acquire Common Stock shall be deemed to have been
issued at the time such options, warrants or
rights were issued and for a consideration equal
to the aggregate consideration (determined in the
manner provided in clauses (A) and (B) above), if
any, received by the Corporation upon the issuance
of such options, warrants or rights plus the
aggregate minimum purchase price provided in such
options, warrants or rights for the Common Stock
covered thereby;
(2) the aggregate maximum number of shares
of Common Stock deliverable upon conversion of or
in exchange for any such convertible or
exchangeable securities, or upon the exercise of
options, warrants or other rights to purchase or
acquire such convertible or exchangeable
securities and the subsequent conversion or
exchange thereof, shall be deemed to have been
issued at the time such securities were issued or
such options, warrants or rights were issued and
for a consideration equal to the consideration, if
any, received by the Corporation for any such
securities and related options, warrants or rights
(excluding any cash received on account of accrued
interest or accrued dividends), plus the
additional consideration, if any, to be received
by the Corporation upon the conversion or exchange
of such securities and the exercise of any related
options, warrants or rights (the consideration in
each case to be determined in the manner provided
in clauses (A) and (B) above);
(3) on any change in the number of
shares of Common Stock deliverable upon exercise
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of any such options, warrants or rights or
conversion of or exchange for such convertible or
exchangeable securities or any change in the
consideration to be received by the Corporation
upon such exercise, conversion or exchange,
including, but not limited to, a change resulting
from the anti-dilution provisions thereof, the
Conversion Price as then in effect shall forthwith
be readjusted to such Conversion Price as would
have been obtained had an adjustment been made
upon the issuance of such options, warrants or
rights not exercised prior to such change, or
securities not converted or exchanged prior to
such change, on the basis of the terms of such
options, warrants, rights or convertible or
exchangeable securities as so changed;
(4) on the expiration or cancellation of any
such options, warrants or rights, or the
termination of the right to convert or exchange
such convertible or exchangeable securities, if
the Conversion Price shall have been adjusted upon
the issuance thereof, the Conversion Price shall
forthwith be readjusted to such Conversion Price
as would have been obtained had an adjustment been
made upon the issuance of such options, warrants,
rights or securities on the basis of the issuance
of only the number of shares of Common Stock
actually issued upon the exercise of such options,
warrants or rights, or upon the conversion or
exchange of such securities; and
(5) regardless of whether the Conversion
Price shall have been adjusted upon the issuance
of any such options, warrants, rights or
convertible or exchangeable securities, no further
adjustment of the Conversion Price shall be made
for the actual issuance of Common Stock upon the
exercise, conversion or exchange thereof;
PROVIDED, HOWEVER, that no adjustment pursuant to
this clause (C) shall have the effect of increasing the
Conversion Price above the initial Conversion Price.
(D) EXCLUDED STOCK. For purposes hereof, "Excluded
Stock" means shares of Common Stock issued or reserved
for issuance by the Corporation (i) upon conversion of
the Series A Preferred Stock, (ii) pursuant to a stock
dividend, subdivision or split-up covered by paragraph
(ii)
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of this Section 5(f), (iii) to any one or more
unaffiliated persons with whom the Corporation or one or
more of its subsidiaries effect a business combination
(however structured), whether issued in shares of Common
Stock or other securities convertible into or
exchangeable with the Common Stock, and (iv) upon
exercise of options issued to employees of the
Corporation or its subsidiaries (other than employees
who were the record holders of any Common Stock on
December 31, 1993) entitling them to acquire Common
Stock at a price per share less than the Conversion
Price, provided that such exercise price per share is
not less than the fair market value per share of Common
Stock determined in good faith by the Board of Directors
at the time such options are granted.
(ii) STOCK DIVIDENDS. If the number of shares of Class B
Common Stock outstanding at any time after the issuance of any
Series A Preferred Stock is increased by a stock dividend
payable in shares of Class B Common Stock or by a subdivision
or split-up of shares of Class B Common Stock, then
immediately after the record date fixed for the determination
of holders of Class B Common Stock entitled to receive such
stock dividend or the effective date of such subdivision or
split-up, as the case may be, the Conversion Price shall be
appropriately decreased and the number of Conversion Shares
proportionately increased so that the holders of any shares of
Series A Preferred Stock shall be entitled to receive the
number of shares of Class B Common Stock of the Corporation
which they would have owned immediately following such action
had such shares of Series A Preferred Stock been converted
immediately prior thereto.
(iii) COMBINATION OF STOCK. If the number of shares of
Class B Common Stock outstanding at any time after issuance of
any class of Series A Preferred Stock is decreased by a
combination of the outstanding shares of Class B Common Stock,
then, immediately after the effective date of such
combination, the Conversion Price shall be appropriately
increased and the number of Conversion Shares proportionately
decreased so that the holders of any shares of Series A
Preferred Stock shall be entitled to receive the number of
shares of Class B Common Stock of the Corporation which they
would have owned immediately following such action had such
shares of Series A Preferred Stock been converted immediately
prior thereto.
(iv) REORGANIZATIONS. In case of any capital
reorganization of the Corporation, or of any reclassification
of the Common Stock, or in case of the consolidation of the
Corporation with or the merger of the Corporation with or into
any other
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corporation, partnership or other business entity in which the
Corporation is not the survivor, or of the sale, lease or
other transfer of all or substantially all of the assets of
the Corporation to any other corporation, partnership or other
business entity, or in the case of any distribution of cash
(other than dividends not exceeding net income earned in the
current fiscal year to the date on which such dividend is
declared) or other assets or of notes or other indebtedness of
the Corporation or any other securities of the Corporation
(except Common Stock) to the holders of its Common Stock, each
share of Series A Preferred Stock shall, after such capital
reorganization, reclassification, consolidation, merger, sale,
lease or other transfer or such distribution, be convertible
into the number of shares of stock or other securities or
property to which the Class B Common Stock issuable (at the
time of such capital reorganization, reclassification,
consolidation, merger, sale, lease or other transfer or such
distribution) upon conversion of such share of Series A
Preferred Stock would have been entitled upon such capital
reorganization, reclassification, consolidation, merger, sale,
lease or other transfer or such distribution in place of (or
in addition to, in the case of any such event after which
Class B Common Stock remains outstanding) the shares of Class
B Common Stock into which such share of Series A Preferred
Stock would otherwise have been convertible; and in any such
case, if necessary, the provisions set forth herein with
respect to the rights and interests thereafter of the holders
of the shares of Series A Preferred Stock shall be
appropriately adjusted so as to be applicable, as nearly as
may reasonably be, to any share of stock or other securities
or property thereafter deliverable on the conversion of the
shares of Series A Preferred Stock. The subdivision or
combination of shares of Class B Common Stock issuable upon
conversion of shares of Series A Preferred Stock at any time
outstanding into a greater or lesser number of shares of Class
B Common Stock (whether with or without par value) shall not
be deemed to be a reclassification of the Class B Common Stock
of the Corporation for the purposes of this subparagraph
(iii).
(v) ROUNDING OF CALCULATIONS; MINIMUM ADJUSTMENT. All
calculations under this paragraph (f) shall be made to the
nearest cent or to the nearest one hundredth (1/100th) of a
share, as the case may be. Any provision of this paragraph (f)
to the contrary notwithstanding, no adjustment in the
Conversion Price shall be made if the amount of such
adjustment would be less than $0.10, but any such amount shall
be carried forward and an adjustment with respect thereto
shall be made at the time of and together with any subsequent
adjustment which, together with such amount and
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any other amount or amounts so carried forward, shall
aggregate $0.10 or more.
(vi) TIMING OF ISSUANCE OF ADDITIONAL CLASS B COMMON
STOCK UPON CERTAIN ADJUSTMENTS. In any case in which the
provisions of this paragraph (f) requires that an adjustment
shall become effective immediately after a record date for an
event, the Corporation may defer until the occurrence of such
event issuing to the holder of any shares of Series A
Preferred Stock converted after such record date and before
the occurrence of such event the additional shares of Class B
Common Stock or other property issuable or deliverable upon
exercise by reason of the adjustment required by such event
over and above the shares of Class B Common Stock or other
property issuable or deliverable upon such conversion before
giving effect to such adjustment; PROVIDED, HOWEVER that the
Corporation upon request shall deliver to such holder a due
bill or other appropriate instrument evidencing such holder's
right to receive such additional shares or other property, and
such cash, upon the occurrence of the event requiring such
adjustment.
(vii) ADJUSTMENT IF NO INITIAL PUBLIC OFFERING OR MAJOR
TRANSACTION. If on or before December 31, 2000 there has not
occurred an Initial Public Offering or a Major Transaction in
which the public offering price per share in the Initial
Public Offering, or the net proceeds that the Board of
Directors in good faith determines will be paid to a holder of
Common Stock from the Major Transaction, as the case may be,
is at least equal to the Conversion Price then in effect plus
the Return Amount, then the Conversion Price then in effect
for the Series A Preferred Stock shall be automatically
reduced effective as of such date to a price per share
determined by reducing the initial Conversion Price under
paragraph (c) above to $2.65 per share, and then adjusting the
initial Conversion Price (as so reduced) to give effect to any
other adjustments to the Conversion Price under this paragraph
(f) which have occurred after the date of issuance of the
Series A Preferred Stock and prior to the date of adjustment
under this subparagraph (vii).
(g) STATEMENT REGARDING ADJUSTMENTS. Whenever the Conversion
Price shall be adjusted as provided in paragraph (f), the
Corporation shall forthwith file, at the office of any transfer
agent for the Series A Preferred Stock and at the principal office
of the Corporation, a statement showing in detail the facts
requiring such adjustment and the Conversion Price that shall be in
effect after such adjustment, and the Corporation shall also cause a
copy of such statement to be sent by mail, first class postage
prepaid, to each holder of the Series A Preferred Stock at his or
its address appearing on the Corporation's records. Each such
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statement shall be signed by the Corporation's chief financial
officer. Where appropriate, such copy may be given in advance and
may be included as part of a notice required to be mailed under the
provisions of subparagraph (g) below.
(h) NOTICE TO HOLDERS. In the event the Corporation proposes
to take any action of the type described in subparagraph (i), (ii)
or (iii) of paragraph (f) above, the Corporation shall give notice
to each holder of the Series A Preferred Stock in the manner set
forth in subparagraph (f) above, which notice shall specify the
record date, if any, with respect to any such action and the
approximate date on which such action is to take place. Such notice
shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the
Conversion Price and the number, kind or class of shares or other
securities or property which shall be deliverable or purchasable
upon the occurrence of such action or deliverable upon conversion of
the Series A Preferred Stock. In the case of any action which would
require the fixing of a record date, such notice shall be given at
least 10 days prior to the date so fixed, and in case of all other
action, such notice shall be given at least 15 days prior to the
taking of such proposed action.
(i) COSTS. The Corporation shall pay all documentary, stamp,
transfer or other transactional taxes attributable to the issuance
or delivery of shares of Class B Common Stock of the Corporation or
other securities or property upon conversion of the shares of Series
A Preferred Stock; PROVIDED, HOWEVER, that the Corporation shall not
be required to pay any taxes which may be payable in respect of any
transfer involved in the issuance or delivery of any certificate for
such shares or securities in the name other than that of the holder
of the shares of Series A Preferred Stock in respect of which such
shares are being issued.
(j) RESERVATION OF SHARES. The Corporation shall reserve at
all times so long as any shares of Series A Preferred Stock remain
outstanding, free from preemptive rights, out of its treasury stock
or its authorized but unissued shares of Class B Common Stock, or
both, solely for the purpose of effecting the conversion of shares
of Series A Preferred Stock, sufficient shares of Class B Common
Stock to provide for the conversion of all outstanding shares of
Series A Preferred Stock and set aside and keep available any other
property deliverable upon conversion of all outstanding shares of
Series A Preferred Stock.
(k) APPROVALS. If any shares of Class B Common Stock or other
securities to be reserved for the purpose of conversion of shares of
Series A Preferred Stock require registration with or approval of
any governmental authority under any Federal or state law before
such shares or other securities may be validly issued or delivered
upon conversion,
-26-
then the Corporation will in good faith and as expeditiously as
possible endeavor to secure such registration or approval, as the
case may be.
(l) VALID ISSUANCE. All shares of Class B Common Stock or
other securities which may be issued upon conversion of the shares
of Series A Preferred Stock will upon issuance by the Corporation be
duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issuance thereof
and the Corporation shall take no action which will cause a contrary
result.
6. VOTING RIGHTS.
(a) GENERAL. Except as otherwise provided by law and as
provided in paragraph (b) below, the holders of Series A Preferred
Stock shall have no right or power to vote on the election of
directors or on any other question or in any proceedings involving
the Corporation.
(b) SPECIAL VOTING REQUIREMENTS. Without the consent of the
holders of at least a majority of the outstanding shares of Series A
Preferred Stock, voting together as a single class, the Corporation
shall not (i) amend, alter or repeal any provision of this
Certificate of Designation so as to adversely affect the rights or
powers of any of the Series A Preferred Stock, or (ii) issue any
additional shares of another class or series of Preferred Stock that
has a liquidation preference which is superior to the preference
given to Series A Preferred Stock under Section 4 herein.
(c) NOTICE OF CERTAIN STOCKHOLDER ACTIONS. If any action is
taken by the written consent of less than all of the stockholders of
the Corporation based upon any proposal submitted for consideration
by the Board of Directors, then the Corporation shall, prior to the
time such action by written consent is to become effective, send a
written notice, by mail, first class postage prepaid, to each holder
of the Series A Preferred Stock, at his or its address appearing on
the Corporation's records, setting forth a description of the action
to be so taken. The failure of the Corporation to give the foregoing
notice shall not affect or impair the validity of the action so
taken. The foregoing notice requirement shall not confer upon any
holder of the Series A Preferred Stock any voting rights that are
not otherwise expressly granted herein.
7. EXCLUSION OF OTHER RIGHTS. Unless otherwise required by law, neither
the shares of Series A Preferred Stock nor the shares of Common
Stock shall have any voting powers, preferences or relative,
participating, optional or other special rights other than those
specifically set forth herein.
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Exhibit B
AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION, PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES B PREFERRED STOCK
OF
CARRIAGE SERVICES, INC.
Pursuant to authority conferred upon the Board of Directors of the
Corporation by its Certificate of Incorporation, and pursuant to the provisions
of Section 151(g) of the General Corporation Law of Delaware, such Board of
Directors by written unanimous consent dated October 26, 1994, duly adopted a
resolution providing for the issuance of a series of One Million (1,000,000)
shares of the Corporation's Preferred Stock, $.01 par value per share, to be
designated "Series B Preferred Stock", and fixing the voting powers, preferences
and relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof. The following is a restatement of the
original Certificate of Designation, Preferences, Rights and Limitations to
reflect amendments to the original resolution that were adopted by the
stockholders of the Corporation, including the holders of the Series B Preferred
Stock, by written consent pursuant to Section 228 of the General Corporation Law
of Delaware:
There shall be established and authorized for issuance a series of
the Corporation's Preferred Stock, $.01 par value per share, designated
"Series B Preferred Stock" (herein referred to as "Series B Preferred
Stock"), consisting of One Million (1,000,000) shares, each of the par
value of $.01 per share, and having the voting powers, preferences and
relative, participating, optional and other rights, and the
qualifications, limitations or restrictions set forth below:
8. DEFINITIONS. For purposes hereof, the following terms shall have the
following definitions or shall be subject to the following rules of
construction:
(a) "Act" means the General Corporation Law of Delaware, as
amended, or any successor state statute.
(b) "Board of Directors" means the Board of Directors of the
Corporation.
(c) "Common Stock" means (i) shares of Class A Common Stock,
or (ii) shares of Class B Common Stock, as applicable. "Class A
Common Stock" means the Corporation's Class A Common Stock, par
value $.01 per share. "Class B Common Stock" means the Corporation's
Class B Common Stock, par value $.01 per share.
(d) "Fiscal Year" means the fiscal year of the Corporation
determined from time to time by the Board of Directors for financial
reporting purposes.
(e) "Initial Public Offering" means an underwritten public
offering of either Class A Common Stock or Class B Common Stock
pursuant to a registration statement filed under the Securities Act
(other than any registration statement relating to warrants, options
or shares of capital stock of the Corporation granted or to be
granted or sold primarily to employees, directors, or officers of
the Corporation, a registration statement filed pursuant to Rule 145
under the Securities Act or any successor rule, a registration
statement relating to employee benefit plans or interests therein or
any registration statement covering securities issued in connection
with any debt financing of the Corporation).
(f) "Major Transaction" means a single transaction involving,
or a series of transactions having the cumulative effect of, the
sale of all or substantially all of the assets or the outstanding
capital stock of the Corporation, or a merger or consolidation of
the Corporation with or into another corporation or other entity in
which the Corporation is not the survivor, or any combination of the
foregoing involving the Corporation.
(g) The term "outstanding", when used with reference to shares
of capital stock, shall mean issued shares, excluding shares held by
the Corporation or a subsidiary of the Corporation.
(h) "Preferred Stock" means shares of any series of the Corpo-
ration's Preferred Stock, $.01 par value per share.
(i) "Securities Act" means the Securities Act of 1933, as
amended.
(j) "Senior Stock" means the series of Preferred Stock
designated by the Corporation as its Series A Preferred Stock, $.01
par value per share, and the series of Preferred Stock designated by
the Corporation as its Series C Preferred Stock, $.01 par value per
share.
-29-
(k) "Series B Preferred Stock" means the series of Preferred
Stock designated by the Corporation as its Series B Preferred Stock,
$.01 par value per share.
(l) All accounting terms used herein and not expressly defined
herein shall have the meanings given to them in accordance with
generally accepted accounting principles consistently applied and in
effect as of the date of the relevant calculation.
9. DIVIDENDS. The holders of shares of Series B Preferred Stock shall
be entitled to receive dividends on account of such shares only when
and as declared by the Board of Directors out of funds legally
available therefor. The declaration or payment of dividends in
respect of any other class or series of the Corporation's stock by
authority of the Board of Directors shall not confer upon the
holders of the Series B Preferred Stock any right or preference to
receive any dividend in respect of such shares.
10. PREFERENCE ON LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) DEFINITION. A consolidation or merger of the Corporation,
a sale or transfer of substantially all of its assets as an
entirety, or any purchase or redemption of capital stock of the
Corporation of any class, shall not be regarded as "liquidation,
dissolution or winding up of the affairs of the Corporation" within
the meaning of this Section 3.
(b) SERIES B PREFERRED STOCK. During any proceedings for the
voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, the holders of the Series B
Preferred Stock shall be entitled to receive, before any
distribution of the assets of the Corporation shall be made in
respect of the outstanding Common Stock, but subject to any
distribution to the holders of the Senior Stock in respect of such
shares and any other preferential class or series of capital stock
of the Corporation, an amount in cash for each share of Series B
Preferred Stock equal to $1.00, or funds necessary for such payment
shall have been set aside in trust for the account of the holders of
the outstanding Series B Preferred Stock so as to be and continue
available therefor. If upon such liquidation, dissolution or winding
up, the assets distributable to the holders of the Series B
Preferred Stock as aforesaid shall be insufficient to permit the
payment to them (together with any distributions to the holders of
any other class or series of the Corporation's stock which ranks
pari passe with the Series B Preferred Stock) of $1.00 per share,
the assets of the Corporation shall be distributed to the holders of
the Series B Preferred Stock ratably until they shall have received
the full amount to which they would otherwise be entitled but
subject to any distribution of the assets of the Corporation in
respect of the Senior Stock and any other preferential class or
series of capital stock of the Corporation. If the assets of the
Corporation are sufficient to permit the payment of such amounts to
the holders of the Series B Preferred Stock, the remainder of the
assets of the
-30-
Corporation, if any, after the distributions as aforesaid shall be
distributed and divided ratably among the holders of the Common
Stock (and any other shares of the Corporation's stock which rank
inferior to the Series B Preferred Stock) then outstanding according
to their respective shares.
11. CONVERSION. The Series B Preferred Stock shall be convertible into
Class B Common Stock in accordance with the following provisions of
this Section 4.
(a) OPTIONAL CONVERSION. Subject to and upon compliance with
the provisions of this Section 4, each holder of shares of Series B
Preferred Stock shall have the right at such holder's option, at any
time or from time to time, from and after the date of original
issuance to convert all or any part of his shares of Series B
Preferred Stock into fully paid and nonassessable shares of Class B
Common Stock, at the Conversion Price (hereafter defined) in effect
on the Conversion Date (hereafter defined), upon the terms
hereinafter set forth.
(b) AUTOMATIC CONVERSION. On the date that either (i) a
registration statement that has been filed with the Securities and
Exchange Commission with respect to an Initial Public Offering shall
become effective under the Securities Act, or (ii) a Major
Transaction has occurred, then in either such event each share of
Series B Preferred Stock then outstanding shall be automatically
converted into shares of Class B Common Stock in accordance with the
following provisions of this Section 4. Notwithstanding that any
certificates for shares of Series B Preferred Stock shall not have
been surrendered for cancellation, the shares of Series B Preferred
Stock so converted shall no longer be deemed outstanding, and the
holders of certificates representing such shares of Series B
Preferred Stock shall have, from and after the date referred to
above, the same rights in or with respect to the Corporation as
holders of shares of the number of shares of Class B Common Stock
into which such shares of Series B Preferred Stock have been so
converted. Each such holder shall have the right, upon surrender of
such certificates, to receive from the Corporation a certificate or
certificates representing the number of shares of Class B Common
Stock calculated in accordance with the following provisions of this
Section 4 registered in the name of such holder. Within 30 days
following the effective date of such registration statement or the
consummation of such Major Transaction, the Corporation shall
deliver to each holder whose shares of Series B Preferred Stock have
been converted into Class B Common Stock as provided hereunder a
written notice setting forth the fact and effective date of such
conversion, the number of shares of Class B Common Stock into which
such holder's shares of Series B Preferred Stock were converted, and
a statement that such holder is entitled to receive a new
certificate representing such number of shares of Class B Common
Stock in exchange for the certificates representing such holder's
shares of Series B Preferred Stock; provided, however, that the
failure of the Corporation to provide such notice to any holder or
any deficiency in any such notice shall not impair or affect the
automatic conversion of such
-31-
holder's Series B Preferred Stock into Class B Common Stock as
provided herein.
(c) CONVERSION PRICE. The shares of Series B Preferred Stock
to be converted shall be convertible into the number of shares of
Class B Common Stock as is determined by multiplying the number of
shares of Series B Preferred Stock to be converted by a fraction,
the numerator of which is $1.00 and the denominator of which is the
Conversion Price in effect on the Conversion Date. The Conversion
Price at which shares of Class B Common Stock shall initially be
issuable upon conversion of shares of Series B Preferred Stock shall
be an amount per share determined from time to time by the Board of
Directors at the time of issuance of any shares of Series B
Preferred Stock (subject to adjustment as provided below, hereafter
the "Conversion Price"). The initial Conversion Price upon issuance
of any given shares of Series B Preferred Stock shall be recorded in
the minutes of the Board of Directors at which such shares were
authorized to be issued, and the Conversion Price for such shares
shall be conclusively evidenced (absent manifest error) by a
notation to such effect on the face of each certificate representing
such shares.
(d) MECHANICS OF CONVERSION. The holder of any shares of
Series B Preferred Stock may exercise the conversion right specified
in paragraph (a) above by surrendering to the Corporation or any
transfer agent of the Corporation the certificate or certificates
for the shares to be converted, accompanied by written notice
stating that the holder elects to convert all or a specified portion
of the shares represented thereby. Optional conversion under
paragraph (a) shall be deemed to have been effected on the date when
notice of an election to convert and certificates for the shares to
be converted has been delivered, and automatic conversion under
paragraph (b) shall be deemed to have been effected as therein
provided; any such date is referred to herein as the "Conversion
Date". As promptly as practicable thereafter the Corporation shall
issue and deliver to or upon the written order of such holders a
certificate or certificates for the number of full shares of Class B
Common Stock to which such holders are entitled rounded down to the
next whole share as provided in paragraph (e) below. The person in
whose name the certificate or certificates of Class B Common Stock
are to be issued shall be deemed to have become a holder of record
of such Class B Common Stock on the Conversion Date.
(e) FRACTIONAL SHARES. No fractional shares of Class B Common
Stock or scrip shall be issued upon conversion of shares of Series B
Preferred Stock. Instead of any fractional shares of Class B Common
Stock which would otherwise be issuable upon conversion of any
shares of Series B Preferred Stock, the number of full shares of
Class B Common Stock issuable upon conversion thereof shall be
reduced to the next lowest number of whole shares, and the
Corporation will pay a cash adjustment in respect of any surrendered
shares of Series B Preferred Stock not con-
-32-
verted into Class B Common Stock in an amount equal to $1.00 per
share of Series B Preferred Stock.
(f) CONVERSION PRICE ADJUSTMENTS. The Conversion Price and the
number of shares of Class B Common Stock issuable upon conversion of
the Series B Preferred Stock shall be subject to adjustment from
time to time as follows:
(i) STOCK DIVIDENDS. If the number of shares of Class
B Common Stock outstanding at any time after the issuance of
any Series B Preferred Stock is increased by a stock dividend
payable in shares of Class B Common Stock or by a subdivision
or split-up of shares of Class B Common Stock, then
immediately after the record date fixed for the determination
of holders of Class B Common Stock entitled to receive such
stock dividend or the effective date of such subdivision or
split-up, as the case may be, the Conversion Price shall be
appropriately decreased and the number of shares of Class B
Common Stock issuable upon conversion of the Series B
Preferred Stock shall be proportionately increased so that the
holders of any shares of Series B Preferred Stock shall be
entitled to receive the number of shares of Class B Common
Stock of the Corporation which they would have owned
immediately following such action had such shares of Series B
Preferred Stock been converted immediately prior thereto.
(ii) COMBINATION OF STOCK. If the number of shares of
Common Stock outstanding at any time after issuance of any
class of Series B Preferred Stock is decreased by a
combination of the outstanding shares of Class B Common Stock,
then, immediately after the effective date of such
combination, the Conversion Price shall be appropriately
increased and the number of shares of Common Stock issuable
upon conversion of the Series B Preferred Stock shall be
proportionately decreased so that the holders of any shares of
Series B Preferred Stock shall be entitled to receive the
number of shares of Class B Common Stock of the Corporation
which they would have owned immediately following such action
had such shares of Series B Preferred Stock been converted
immediately prior thereto.
(iii) REORGANIZATIONS. In case of any capital
reorganization of the Corporation, or of any reclassification
of the Class B Common Stock, or in case of the consolidation
of the Corporation with or the merger of the Corporation with
or into any other corporation, partnership or other business
entity in which the Corporation is not the survivor, or of the
sale, lease or other transfer of all or substantially all of
the assets of the Corporation to any other corporation,
partnership or other business entity, each share of Series B
Preferred Stock shall, after such capital reorganization,
-33-
reclassification, consolidation, merger, sale or lease, be
convertible into the number of shares of stock or other
securities or property to which the Class B Common Stock
issuable (at the time of such capital reorganization,
reclassification, consolidation, merger, sale or lease) upon
conversion of such share of Series B Preferred Stock would
have been entitled upon such capital reorganization,
reclassification, consolidation, merger, sale or lease in
place of (or in addition to, in the case of any such event
after which Class B Common Stock remains outstanding) the
shares of Class B Common Stock into which such share of Series
B Preferred Stock would otherwise have been convertible; and
in any such case, if necessary, the provisions set forth
herein with respect to the rights and interests thereafter of
the holders of the shares of Series B Preferred Stock shall be
appropriately adjusted so as to be applicable, as nearly as
may reasonably be, to any share of stock or other securities
or property thereafter deliverable on the conversion of the
shares of Series B Preferred Stock. The subdivision or
combination of shares of Class B Common Stock issuable upon
conversion of shares of Series B Preferred Stock at any time
outstanding into a greater or lesser number of shares of Class
B Common Stock (whether with or without par value) shall not
be deemed to be a reclassification of the Class B Common Stock
of the Corporation for the purposes of this subparagraph
(iii).
(iv) ROUNDING OF CALCULATIONS; MINIMUM ADJUSTMENT. All
calculations under this paragraph (f) shall be made to the
nearest cent or to the nearest one hundredth (1/100th) of a
share, as the case may be. Any provision of this paragraph (f)
to the contrary notwithstanding, no adjustment in the
Conversion Price shall be made if the amount of such
adjustment would be less than $0.01, but any such amount shall
be carried forward and an adjustment with respect thereto
shall be made at the time of and together with any subsequent
adjustment which, together with such amount and any other
amount or amounts so carried forward, shall aggregate $0.01 or
more.
(v) TIMING OF ISSUANCE OF ADDITIONAL CLASS B COMMON
STOCK UPON CERTAIN ADJUSTMENTS. In any case in which the
provisions of this paragraph (f) requires that an adjustment
shall become effective immediately after a record date for an
event, the Corporation may defer until the occurrence of such
event issuing to the holder of any shares of Series B
Preferred Stock converted after such record date and before
the occurrence of such event the additional shares of Class B
Common Stock or other property issuable or deliverable upon
exercise by reason of the adjustment required by such event
over and above the shares of Class B Common Stock or other
property issuable or deliverable upon such conversion before
giving effect to such adjustment; PROVIDED,
-34-
HOWEVER that the Corporation upon request shall deliver to
such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional
shares or other property, and such cash, upon the occurrence
of the event requiring such adjustment.
(g) STATEMENT REGARDING ADJUSTMENTS. Whenever the Conversion
Price shall be adjusted as provided in paragraph (f), the
Corporation shall forthwith file, at the office of any transfer
agent for the Series B Preferred Stock and at the principal office
of the Corporation, a statement showing in detail the facts
requiring such adjustment and the Conversion Price that shall be in
effect after such adjustment, and the Corporation shall also cause a
copy of such statement to be sent by mail, first class postage
prepaid, to each holder of the Series B Preferred Stock at his or
its address appearing on the Corporation's records. Each such
statement shall be signed by the Corporation's chief financial
officer. Where appropriate, such copy may be given in advance and
may be included as part of a notice required to be mailed under the
provisions of subparagraph (h) below.
(h) NOTICE TO HOLDERS. In the event the Corporation proposes
to take any action of the type described in subparagraph (i), (ii)
or (iii) of paragraph (f) above, the Corporation shall give notice
to each holder of the Series B Preferred Stock in the manner set
forth in subparagraph (f) above, which notice shall specify the
record date, if any, with respect to any such action and the
approximate date on which such action is to take place. Such notice
shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the
Conversion Price and the number, kind or class of shares or other
securities or property which shall be deliverable or purchasable
upon the occurrence of such action or deliverable upon conversion of
the Series B Preferred Stock. In the case of any action which would
require the fixing of a record date, such notice shall be given at
least 10 days prior to the date so fixed, and in case of all other
action, such notice shall be given at least 15 days prior to the
taking of such proposed action.
(i) COSTS. The Corporation shall pay all documentary, stamp,
transfer or other transactional taxes attributable to the issuance
or delivery of shares of Class B Common Stock of the Corporation or
other securities or property upon conversion of the shares of Series
B Preferred Stock; PROVIDED, HOWEVER, that the Corporation shall not
be required to pay any taxes which may be payable in respect of any
transfer involved in the issuance or delivery of any certificate for
such shares or securities in the name other than that of the holder
of the shares of Series B Preferred Stock in respect of which such
shares are being issued.
-35-
(j) RESERVATION OF SHARES. The Corporation shall reserve at
all times so long as any shares of Series B Preferred Stock remain
outstanding, free from preemptive rights, out of its treasury stock
or its authorized but unissued shares of Class B Common Stock, or
both, solely for the purpose of effecting the conversion of shares
of Series B Preferred Stock, sufficient shares of Class B Common
Stock to provide for the conversion of all outstanding shares of
Series B Preferred Stock and set aside and keep available any other
property deliverable upon conversion of all outstanding shares of
Series B Preferred Stock.
(k) APPROVALS. If any shares of Class B Common Stock or other
securities to be reserved for the purpose of conversion of shares of
Series B Preferred Stock require registration with or approval of
any governmental authority under any Federal or state law before
such shares or other securities may be validly issued or delivered
upon conversion, then the Corporation will in good faith and as
expeditiously as possible endeavor to secure such registration or
approval, as the case may be.
(l) VALID ISSUANCE. All shares of Class B Common Stock or
other securities which may be issued upon conversion of the shares
of Series B Preferred Stock will upon issuance by the Corporation be
duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issuance thereof
and the Corporation shall take no action which will cause a contrary
result.
12. VOTING RIGHTS. Except as provided by law, the holders of Series B
Preferred Stock shall have no right or power to vote on the election
of directors or on any other question or in any proceedings
involving the Corporation.
13. EXCLUSION OF OTHER RIGHTS. Unless otherwise required by law, neither
the shares of Series B Preferred Stock nor the shares of Common
Stock shall have any voting powers, preferences or relative,
participating, optional or other special rights other than those
specifically set forth herein.
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Exhibit C
AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION, PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES B PREFERRED STOCK
OF
CARRIAGE SERVICES, INC.
Pursuant to authority conferred upon the Board of Directors of the
Corporation by its Certificate of Incorporation, and pursuant to the provisions
of Section 151(g) of the General Corporation Law of Delaware, such Board of
Directors by written unanimous consent dated October 26, 1994, duly adopted a
resolution providing for the issuance of a series of One Million (1,000,000)
shares of the Corporation's Preferred Stock, $.01 par value per share, to be
designated "Series B Preferred Stock", and fixing the voting powers, preferences
and relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof. The following is a restatement of the
original Certificate of Designation, Preferences, Rights and Limitations to
reflect amendments to the original resolution that were adopted by the
stockholders of the Corporation, including the holders of the Series B Preferred
Stock, by written consent pursuant to Section 228 of the General Corporation Law
of Delaware:
There shall be established and authorized for issuance a series of
the Corporation's Preferred Stock, $.01 par value per share, designated
"Series B Preferred Stock" (herein referred to as "Series B Preferred
Stock"), consisting of One Million (1,000,000) shares, each of the par
value of $.01 per share, and having the voting powers, preferences and
relative, participating, optional and other rights, and the
qualifications, limitations or restrictions set forth below:
14. DEFINITIONS. For purposes hereof, the following terms shall have the
following definitions or shall be subject to the following rules of
construction:
(a) "Act" means the General Corporation Law of Delaware, as
amended, or any successor state statute.
(b) "Board of Directors" means the Board of Directors of the
Corporation.
(c) "Common Stock" means (i) shares of Class A Common Stock,
or (ii) shares of Class B Common Stock, as applicable. "Class A
Common Stock" means the Corporation's Class A Common Stock, par
value $.01 per share. "Class B Common Stock" means the Corporation's
Class B Common Stock, par value $.01 per share.
(d) "Fiscal Year" means the fiscal year of the Corporation
determined from time to time by the Board of Directors for financial
reporting purposes.
(e) "Initial Public Offering" means an underwritten public
offering of either Class A Common Stock or Class B Common Stock
pursuant to a registration statement filed under the Securities Act
(other than any registration statement relating to warrants, options
or shares of capital stock of the Corporation granted or to be
granted or sold primarily to employees, directors, or officers of
the Corporation, a registration statement filed pursuant to Rule 145
under the Securities Act or any successor rule, a registration
statement relating to employee benefit plans or interests therein or
any registration statement covering securities issued in connection
with any debt financing of the Corporation).
(f) "Major Transaction" means a single transaction involving,
or a series of transactions having the cumulative effect of, the
sale of all or substantially all of the assets or the outstanding
capital stock of the Corporation, or a merger or consolidation of
the Corporation with or into another corporation or other entity in
which the Corporation is not the survivor, or any combination of the
foregoing involving the Corporation.
(g) The term "outstanding", when used with reference to shares
of capital stock, shall mean issued shares, excluding shares held by
the Corporation or a subsidiary of the Corporation.
(h) "Preferred Stock" means shares of any series of the Corpo-
ration's Preferred Stock, $.01 par value per share.
(i) "Securities Act" means the Securities Act of 1933, as
amended.
(j) "Senior Stock" means the series of Preferred Stock
designated by the Corporation as its Series A Preferred Stock, $.01
par value per share, and the series of Preferred Stock designated by
the Corporation as its Series C Preferred Stock, $.01 par value per
share.
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(k) "Series B Preferred Stock" means the series of Preferred
Stock designated by the Corporation as its Series B Preferred Stock,
$.01 par value per share.
(l) All accounting terms used herein and not expressly defined
herein shall have the meanings given to them in accordance with
generally accepted accounting principles consistently applied and in
effect as of the date of the relevant calculation.
15. DIVIDENDS. The holders of shares of Series B Preferred Stock shall
be entitled to receive dividends on account of such shares only when
and as declared by the Board of Directors out of funds legally
available therefor. The declaration or payment of dividends in
respect of any other class or series of the Corporation's stock by
authority of the Board of Directors shall not confer upon the
holders of the Series B Preferred Stock any right or preference to
receive any dividend in respect of such shares.
16. PREFERENCE ON LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) DEFINITION. A consolidation or merger of the Corporation,
a sale or transfer of substantially all of its assets as an
entirety, or any purchase or redemption of capital stock of the
Corporation of any class, shall not be regarded as "liquidation,
dissolution or winding up of the affairs of the Corporation" within
the meaning of this Section 3.
(b) SERIES B PREFERRED STOCK. During any proceedings for the
voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, the holders of the Series B
Preferred Stock shall be entitled to receive, before any
distribution of the assets of the Corporation shall be made in
respect of the outstanding Common Stock, but subject to any
distribution to the holders of the Senior Stock in respect of such
shares and any other preferential class or series of capital stock
of the Corporation, an amount in cash for each share of Series B
Preferred Stock equal to $1.00, or funds necessary for such payment
shall have been set aside in trust for the account of the holders of
the outstanding Series B Preferred Stock so as to be and continue
available therefor. If upon such liquidation, dissolution or winding
up, the assets distributable to the holders of the Series B
Preferred Stock as aforesaid shall be insufficient to permit the
payment to them (together with any distributions to the holders of
any other class or series of the Corporation's stock which ranks
pari passe with the Series B Preferred Stock) of $1.00 per share,
the assets of the Corporation shall be distributed to the holders of
the Series B Preferred Stock ratably until they shall have received
the full amount to which they would otherwise be entitled but
subject to any distribution of the assets of the Corporation in
respect of the Senior Stock and any other preferential class or
series of capital stock of the Corporation. If the assets of the
Corporation are sufficient to permit the payment of such amounts to
the holders of the Series B Preferred Stock, the remainder of the
assets of the
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Corporation, if any, after the distributions as aforesaid shall be
distributed and divided ratably among the holders of the Common
Stock (and any other shares of the Corporation's stock which rank
inferior to the Series B Preferred Stock) then outstanding according
to their respective shares.
17. CONVERSION. The Series B Preferred Stock shall be convertible into
Class B Common Stock in accordance with the following provisions of
this Section 4.
(a) OPTIONAL CONVERSION. Subject to and upon compliance with
the provisions of this Section 4, each holder of shares of Series B
Preferred Stock shall have the right at such holder's option, at any
time or from time to time, from and after the date of original
issuance to convert all or any part of his shares of Series B
Preferred Stock into fully paid and nonassessable shares of Class B
Common Stock, at the Conversion Price (hereafter defined) in effect
on the Conversion Date (hereafter defined), upon the terms
hereinafter set forth.
(b) AUTOMATIC CONVERSION. On the date that either (i) a
registration statement that has been filed with the Securities and
Exchange Commission with respect to an Initial Public Offering shall
become effective under the Securities Act, or (ii) a Major
Transaction has occurred, then in either such event each share of
Series B Preferred Stock then outstanding shall be automatically
converted into shares of Class B Common Stock in accordance with the
following provisions of this Section 4. Notwithstanding that any
certificates for shares of Series B Preferred Stock shall not have
been surrendered for cancellation, the shares of Series B Preferred
Stock so converted shall no longer be deemed outstanding, and the
holders of certificates representing such shares of Series B
Preferred Stock shall have, from and after the date referred to
above, the same rights in or with respect to the Corporation as
holders of shares of the number of shares of Class B Common Stock
into which such shares of Series B Preferred Stock have been so
converted. Each such holder shall have the right, upon surrender of
such certificates, to receive from the Corporation a certificate or
certificates representing the number of shares of Class B Common
Stock calculated in accordance with the following provisions of this
Section 4 registered in the name of such holder. Within 30 days
following the effective date of such registration statement or the
consummation of such Major Transaction, the Corporation shall
deliver to each holder whose shares of Series B Preferred Stock have
been converted into Class B Common Stock as provided hereunder a
written notice setting forth the fact and effective date of such
conversion, the number of shares of Class B Common Stock into which
such holder's shares of Series B Preferred Stock were converted, and
a statement that such holder is entitled to receive a new
certificate representing such number of shares of Class B Common
Stock in exchange for the certificates representing such holder's
shares of Series B Preferred Stock; provided, however, that the
failure of the Corporation to provide such notice to any holder or
any deficiency in any such notice shall not impair or affect the
automatic conversion of such
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holder's Series B Preferred Stock into Class B Common Stock as
provided herein.
(c) CONVERSION PRICE. The shares of Series B Preferred Stock
to be converted shall be convertible into the number of shares of
Class B Common Stock as is determined by multiplying the number of
shares of Series B Preferred Stock to be converted by a fraction,
the numerator of which is $1.00 and the denominator of which is the
Conversion Price in effect on the Conversion Date. The Conversion
Price at which shares of Class B Common Stock shall initially be
issuable upon conversion of shares of Series B Preferred Stock shall
be an amount per share determined from time to time by the Board of
Directors at the time of issuance of any shares of Series B
Preferred Stock (subject to adjustment as provided below, hereafter
the "Conversion Price"). The initial Conversion Price upon issuance
of any given shares of Series B Preferred Stock shall be recorded in
the minutes of the Board of Directors at which such shares were
authorized to be issued, and the Conversion Price for such shares
shall be conclusively evidenced (absent manifest error) by a
notation to such effect on the face of each certificate representing
such shares.
(d) MECHANICS OF CONVERSION. The holder of any shares of
Series B Preferred Stock may exercise the conversion right specified
in paragraph (a) above by surrendering to the Corporation or any
transfer agent of the Corporation the certificate or certificates
for the shares to be converted, accompanied by written notice
stating that the holder elects to convert all or a specified portion
of the shares represented thereby. Optional conversion under
paragraph (a) shall be deemed to have been effected on the date when
notice of an election to convert and certificates for the shares to
be converted has been delivered, and automatic conversion under
paragraph (b) shall be deemed to have been effected as therein
provided; any such date is referred to herein as the "Conversion
Date". As promptly as practicable thereafter the Corporation shall
issue and deliver to or upon the written order of such holders a
certificate or certificates for the number of full shares of Class B
Common Stock to which such holders are entitled rounded down to the
next whole share as provided in paragraph (e) below. The person in
whose name the certificate or certificates of Class B Common Stock
are to be issued shall be deemed to have become a holder of record
of such Class B Common Stock on the Conversion Date.
(e) FRACTIONAL SHARES. No fractional shares of Class B Common
Stock or scrip shall be issued upon conversion of shares of Series B
Preferred Stock. Instead of any fractional shares of Class B Common
Stock which would otherwise be issuable upon conversion of any
shares of Series B Preferred Stock, the number of full shares of
Class B Common Stock issuable upon conversion thereof shall be
reduced to the next lowest number of whole shares, and the
Corporation will pay a cash adjustment in respect of any surrendered
shares of Series B Preferred Stock not con-
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verted into Class B Common Stock in an amount equal to $1.00 per
share of Series B Preferred Stock.
(f) CONVERSION PRICE ADJUSTMENTS. The Conversion Price and the
number of shares of Class B Common Stock issuable upon conversion of
the Series B Preferred Stock shall be subject to adjustment from
time to time as follows:
(i) STOCK DIVIDENDS. If the number of shares of Class
B Common Stock outstanding at any time after the issuance of
any Series B Preferred Stock is increased by a stock dividend
payable in shares of Class B Common Stock or by a subdivision
or split-up of shares of Class B Common Stock, then
immediately after the record date fixed for the determination
of holders of Class B Common Stock entitled to receive such
stock dividend or the effective date of such subdivision or
split-up, as the case may be, the Conversion Price shall be
appropriately decreased and the number of shares of Class B
Common Stock issuable upon conversion of the Series B
Preferred Stock shall be proportionately increased so that the
holders of any shares of Series B Preferred Stock shall be
entitled to receive the number of shares of Class B Common
Stock of the Corporation which they would have owned
immediately following such action had such shares of Series B
Preferred Stock been converted immediately prior thereto.
(ii) COMBINATION OF STOCK. If the number of shares of
Common Stock outstanding at any time after issuance of any
class of Series B Preferred Stock is decreased by a
combination of the outstanding shares of Class B Common Stock,
then, immediately after the effective date of such
combination, the Conversion Price shall be appropriately
increased and the number of shares of Common Stock issuable
upon conversion of the Series B Preferred Stock shall be
proportionately decreased so that the holders of any shares of
Series B Preferred Stock shall be entitled to receive the
number of shares of Class B Common Stock of the Corporation
which they would have owned immediately following such action
had such shares of Series B Preferred Stock been converted
immediately prior thereto.
(iii) REORGANIZATIONS. In case of any capital
reorganization of the Corporation, or of any reclassification
of the Class B Common Stock, or in case of the consolidation
of the Corporation with or the merger of the Corporation with
or into any other corporation, partnership or other business
entity in which the Corporation is not the survivor, or of the
sale, lease or other transfer of all or substantially all of
the assets of the Corporation to any other corporation,
partnership or other business entity, each share of Series B
Preferred Stock shall, after such capital reorganization,
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reclassification, consolidation, merger, sale or lease, be
convertible into the number of shares of stock or other
securities or property to which the Class B Common Stock
issuable (at the time of such capital reorganization,
reclassification, consolidation, merger, sale or lease) upon
conversion of such share of Series B Preferred Stock would
have been entitled upon such capital reorganization,
reclassification, consolidation, merger, sale or lease in
place of (or in addition to, in the case of any such event
after which Class B Common Stock remains outstanding) the
shares of Class B Common Stock into which such share of Series
B Preferred Stock would otherwise have been convertible; and
in any such case, if necessary, the provisions set forth
herein with respect to the rights and interests thereafter of
the holders of the shares of Series B Preferred Stock shall be
appropriately adjusted so as to be applicable, as nearly as
may reasonably be, to any share of stock or other securities
or property thereafter deliverable on the conversion of the
shares of Series B Preferred Stock. The subdivision or
combination of shares of Class B Common Stock issuable upon
conversion of shares of Series B Preferred Stock at any time
outstanding into a greater or lesser number of shares of Class
B Common Stock (whether with or without par value) shall not
be deemed to be a reclassification of the Class B Common Stock
of the Corporation for the purposes of this subparagraph
(iii).
(iv) ROUNDING OF CALCULATIONS; MINIMUM ADJUSTMENT. All
calculations under this paragraph (f) shall be made to the
nearest cent or to the nearest one hundredth (1/100th) of a
share, as the case may be. Any provision of this paragraph (f)
to the contrary notwithstanding, no adjustment in the
Conversion Price shall be made if the amount of such
adjustment would be less than $0.01, but any such amount shall
be carried forward and an adjustment with respect thereto
shall be made at the time of and together with any subsequent
adjustment which, together with such amount and any other
amount or amounts so carried forward, shall aggregate $0.01 or
more.
(v) TIMING OF ISSUANCE OF ADDITIONAL CLASS B COMMON
STOCK UPON CERTAIN ADJUSTMENTS. In any case in which the
provisions of this paragraph (f) requires that an adjustment
shall become effective immediately after a record date for an
event, the Corporation may defer until the occurrence of such
event issuing to the holder of any shares of Series B
Preferred Stock converted after such record date and before
the occurrence of such event the additional shares of Class B
Common Stock or other property issuable or deliverable upon
exercise by reason of the adjustment required by such event
over and above the shares of Class B Common Stock or other
property issuable or deliverable upon such conversion before
giving effect to such adjustment; PROVIDED,
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HOWEVER that the Corporation upon request shall deliver to
such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional
shares or other property, and such cash, upon the occurrence
of the event requiring such adjustment.
(g) STATEMENT REGARDING ADJUSTMENTS. Whenever the Conversion
Price shall be adjusted as provided in paragraph (f), the
Corporation shall forthwith file, at the office of any transfer
agent for the Series B Preferred Stock and at the principal office
of the Corporation, a statement showing in detail the facts
requiring such adjustment and the Conversion Price that shall be in
effect after such adjustment, and the Corporation shall also cause a
copy of such statement to be sent by mail, first class postage
prepaid, to each holder of the Series B Preferred Stock at his or
its address appearing on the Corporation's records. Each such
statement shall be signed by the Corporation's chief financial
officer. Where appropriate, such copy may be given in advance and
may be included as part of a notice required to be mailed under the
provisions of subparagraph (h) below.
(h) NOTICE TO HOLDERS. In the event the Corporation proposes
to take any action of the type described in subparagraph (i), (ii)
or (iii) of paragraph (f) above, the Corporation shall give notice
to each holder of the Series B Preferred Stock in the manner set
forth in subparagraph (f) above, which notice shall specify the
record date, if any, with respect to any such action and the
approximate date on which such action is to take place. Such notice
shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the
Conversion Price and the number, kind or class of shares or other
securities or property which shall be deliverable or purchasable
upon the occurrence of such action or deliverable upon conversion of
the Series B Preferred Stock. In the case of any action which would
require the fixing of a record date, such notice shall be given at
least 10 days prior to the date so fixed, and in case of all other
action, such notice shall be given at least 15 days prior to the
taking of such proposed action.
(i) COSTS. The Corporation shall pay all documentary, stamp,
transfer or other transactional taxes attributable to the issuance
or delivery of shares of Class B Common Stock of the Corporation or
other securities or property upon conversion of the shares of Series
B Preferred Stock; PROVIDED, HOWEVER, that the Corporation shall not
be required to pay any taxes which may be payable in respect of any
transfer involved in the issuance or delivery of any certificate for
such shares or securities in the name other than that of the holder
of the shares of Series B Preferred Stock in respect of which such
shares are being issued.
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(j) RESERVATION OF SHARES. The Corporation shall reserve at
all times so long as any shares of Series B Preferred Stock remain
outstanding, free from preemptive rights, out of its treasury stock
or its authorized but unissued shares of Class B Common Stock, or
both, solely for the purpose of effecting the conversion of shares
of Series B Preferred Stock, sufficient shares of Class B Common
Stock to provide for the conversion of all outstanding shares of
Series B Preferred Stock and set aside and keep available any other
property deliverable upon conversion of all outstanding shares of
Series B Preferred Stock.
(k) APPROVALS. If any shares of Class B Common Stock or other
securities to be reserved for the purpose of conversion of shares of
Series B Preferred Stock require registration with or approval of
any governmental authority under any Federal or state law before
such shares or other securities may be validly issued or delivered
upon conversion, then the Corporation will in good faith and as
expeditiously as possible endeavor to secure such registration or
approval, as the case may be.
(l) VALID ISSUANCE. All shares of Class B Common Stock or
other securities which may be issued upon conversion of the shares
of Series B Preferred Stock will upon issuance by the Corporation be
duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issuance thereof
and the Corporation shall take no action which will cause a contrary
result.
18. VOTING RIGHTS. Except as provided by law, the holders of Series B
Preferred Stock shall have no right or power to vote on the election
of directors or on any other question or in any proceedings
involving the Corporation.
19. EXCLUSION OF OTHER RIGHTS. Unless otherwise required by law, neither
the shares of Series B Preferred Stock nor the shares of Common
Stock shall have any voting powers, preferences or relative,
participating, optional or other special rights other than those
specifically set forth herein.
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Exhibit D
AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION, PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES D PREFERRED STOCK
OF
CARRIAGE SERVICES, INC.
Pursuant to authority conferred upon the Board of Directors of the
Corporation by its Certificate of Incorporation, and pursuant to the provisions
of Section 151(g) of the General Corporation Law of Delaware, such Board of
Directors by written unanimous consent dated March 4, 1996, duly adopted a
resolution providing for the issuance of a series of Twenty Million (20,000,000)
shares of the Corporation's Preferred Stock, $.01 par value per share, to be
designated "Series D Preferred Stock", and fixing the voting powers, preferences
and relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof. The following is a restatement of the
original Certificate of Designation, Preferences, Rights and Limitations to
reflect amendments to the original resolution that were adopted by the
stockholders of the Corporation, including the holders of the Series D Preferred
Stock, by written consent pursuant to Section 228 of the General Corporation Law
of Delaware:
There shall be established and authorized for issuance a series of
the Corporation's Preferred Stock, $.01 par value per share, designated
"Series D Preferred Stock" (herein referred to as "Series D Preferred
Stock"), consisting of Twenty Million (20,000,000) shares, each of the par
value of $.01 per share, and having the voting powers, preferences and
relative, participating, optional and other rights, and the
qualifications, limitations or restrictions set forth below:
20. DEFINITIONS. For purposes hereof, the following terms shall have the
following definitions or shall be subject to the following rules of
construction:
(a) "Affiliate" of any person shall mean (a) any member of the
immediate family of such person, including parents, siblings, spouse
and lineal
descendants (including those by adoption); the parents, siblings,
spouse, or lineal descendants (including those by adoption) of such
immediate family member; and in any such case any trust whose
primary beneficiary is such person or one or more members of such
immediate family and/or such person's lineal descendants; (b) the
legal representative or guardian of such person or of any such
immediate family members in the event such person or any such
immediate family members becomes mentally incompetent; and (c) any
person, corporation or other entity controlling, controlled by or
under common control with such person. As used in this definition,
the term "control", including the correlative terms "controlling",
"controlled by" and "under common control with" shall mean
possession, directly or indirectly, of the power to direct or cause
the direction of management or policies (whether through ownership
of securities or any partnership or other ownership interest, by
contract or otherwise) of a person, corporation or other entity.
(b) "Board of Directors" means the Board of Directors of the
Corporation.
(c) "Common Stock" means (i) shares of Class A Common Stock,
or (ii) shares of Class B Common Stock. "Class A Common Stock" means
the Corporation's Class A Common Stock, par value $.01 per share.
"Class B Common Stock" means the Corporation's Class B Common Stock,
par value $.01 per share.
(d) "Conversion Base Price" means:
(i) Until consummation of an Initial Public Offering,
the Initial Conversion Base Price;
(ii) From the date of consummation of an Initial Public
Offering until the date which is the last day of the sixth
full calendar month thereafter, the LESSER of (x) Initial
Conversion Base Price per share of Common Stock, or (y) the
Initial Public Offering Price.
(iii) From the first day of the seventh full calendar
month following consummation of an Initial Public Offering
until the last day of the twelfth full calendar month after
such consummation, the price calculated under subparagraph
(ii) above PLUS $.50.
(iv) From the first day of the thirteenth full calendar
month following consummation of an Initial Public Offering
until the last day of the eighteenth full calendar month after
such consummation, the price calculated under subparagraph
(ii) above PLUS $1.00.
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(e) "Conversion Price" means:
(i) From the date of original issuance of the Series D
Preferred Stock until the last day of the eighteenth full
calendar month following consummation of an Initial Public
Offering, the Conversion Base Price.
(ii) From and after the first day of the nineteenth
full calendar month following consummation of an Initial
Public Offering, the Market Price.
(f) "Dividend Rate" shall mean an annual rate (expressed in
dollars or portions thereof) as shall be determined from time to
time by the Board of Directors at the time of issuance of any shares
of Series D Preferred Stock. The Dividend Rate applicable to any
shares of Series D Preferred Stock shall be recorded in the minutes
of the Board of Directors at which such shares are authorized to be
issued, and shall be conclusively evidenced (absent manifest error)
by a notation to such effect on the face of each certificate
representing such shares.
(g) "Initial Conversion Base Price" means an amount (expressed
in dollars or portions thereof) as shall be determined from time to
time by the Board of Directors at the time of issuance of any shares
of Series D Preferred Stock. The Initial Conversion Base Price
applicable to any shares of Series D Preferred Stock shall be
recorded in the minutes of the Board of Directors at which such
shares are authorized to be issued, and shall be conclusively
evidenced (absent manifest error) by a notation to such effect on
the face of each certificate representing such shares.
(h) "Initial Public Offering" means (i) an underwritten public
offering of either Class A Common Stock or Class B Common Stock by
the Corporation for cash pursuant to a registration statement filed
under the Securities Act (other than any registration statement
relating solely to warrants, options or shares of capital stock of
the Corporation granted or to be granted or sold primarily to
employees, directors, or officers of the Corporation, a registration
statement filed pursuant to Rule 145 under the Securities Act or any
successor rule, a registration statement relating solely to employee
benefit plans or interests therein or any registration statement
covering only securities issued in connection with any debt
financing of the Corporation, or any combination of the foregoing),
or (ii) the consummation of a consolidation of the Corporation with
or the merger of the Corporation with or into any other corporation
or other business entity, as a consequence of which the holders of
the Common Stock immediately prior thereto receive shares of common
stock of the survivor that are covered by a registration statement
filed under the Securities Act.
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(i) "Initial Public Offering Price" means the gross price per
share of Common Stock offered by the Corporation to the public in an
Initial Public Offering, or in the case of a merger or consolidation
the price per share at which the Corporation's Common Stock is
valued in accordance with the applicable plan or agreement of merger
or consolidation, in either event without regard to underwriters
discounts or commissions, or other expenses of the Initial Public
Offering.
(j) "Market Price" means the average Trading Price of a share
of Common Stock for the ten trading days of the Common Stock
preceding the date of delivery of a written conversion notice under
Section 5(c).
(k) The term "outstanding", when used with reference to shares
of capital stock, shall mean issued shares, excluding shares held by
the Corporation or a subsidiary of the Corporation.
(l) "Parity Stock" means the Corporation's Series B Preferred
Stock, $.01 par value, the Corporation's Series E Preferred Stock,
$.01 par value, and any other class or series of the Corporation's
stock (other than Common Stock) which by its terms is neither
subordinate nor superior to or in preference of the Series D
Preferred Stock in any distribution of the Corporation's assets in
connection with the liquidation, dissolution or winding up of the
affairs of the Corporation.
(m) "Preferred Stock" means shares of any series of the
Corporation's Preferred Stock, $.01 par value per share.
(n) "Securities Act" means the Securities Act of 1933, as
amended.
(o) "Senior Stock" means the Corporation's Series A Preferred
Stock, $.01 par value, Series C Preferred Stock, $.01 par value, or
any other class or series of the Corporation's capital stock which
by its terms is in preference to the Series D Preferred Stock in any
distribution of the Corporation's assets in connection with the
liquidation, dissolution or winding up of the affairs of the
Corporation.
(p) "Series D Preferred Stock" means the series of Preferred
Stock designated by the Corporation as its Series D Preferred Stock,
$.01 par value per share.
(q) "Trading Price" means, on any trading day for the Common
Stock, (i) if the Common Stock is traded on a national securities
exchange on such trading day, then the closing price on such trading
day as reflected in the consolidated trading tables of the WALL
STREET JOURNAL or any other appropriate publication, (ii) if the
Common Stock is traded over-the-counter and reported on
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the NASDAQ National Market System, then the average of the high and
low sales prices on such trading day as reported in such publication
or, if not so published, then as reported by the NASDAQ National
Market System, or (iii) if the Common Stock is not traded on a
national securities exchange or in the NASDAQ National Market System
on such trading day, then the representative bid and asked prices at
the end of such trading day in such market as reported by NASDAQ.
(r) All accounting terms used herein and not expressly defined
herein shall have the meanings given to them in accordance with
generally accepted accounting principles consistently applied and in
effect as of the date of the relevant calculation.
21. DIVIDENDS.
(a) SERIES D PREFERRED STOCK. The holders of Series D
Preferred Stock, in preference to the holders of Common Stock, shall
be entitled to receive, but only out of any funds legally available
for the declaration of dividends, cumulative, preferential dividends
in cash at an annual rate equal to the Dividend Rate, payable
quarter-annually on or before the last calendar day of each March,
June, September and December in each year in which the Series D
Preferred Stock is outstanding. Such dividends shall commence to
accrue on the shares of Series D Preferred Stock and be cumulative
from and after the date of issuance of such shares of Series D
Preferred Stock and shall be deemed to accumulate and accrue from
day to day thereafter. So long as any shares of Series D Preferred
Stock remain outstanding, no dividends or distributions (other than
dividends or distributions on Common Stock payable in Common Stock)
shall be paid upon, or declared or set apart for, the Common Stock,
nor shall any Common Stock (other than Common Stock acquired in
exchange for, or out of cash proceeds of, the issue of other Common
Stock or out of cash contributions to the capital of the
Corporation) be purchased, redeemed, retired or otherwise acquired
by the Corporation, unless and until in either case all past due,
cumulative dividends on the then outstanding shares of Series D
Preferred Stock for all past dividend periods shall have been or
concurrently shall be paid.
(b) OTHER STOCK. Subject to paragraph (a) above, (i) dividends
may be declared and paid on the Common Stock and any other class or
series of the Corporation's capital stock, and (ii) Common Stock or
such other capital stock may be purchased, retired or otherwise
acquired, when and as determined by the Board of Directors, out of
any funds legally available for such purposes.
22. REDEMPTION.
(a) MANDATORY REDEMPTION. On December 31, 2001, the
Corporation shall redeem all of the shares of Series D Preferred
Stock then outstanding (subject, however, to the right of the
holders of the Series D Preferred Stock to
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convert their shares pursuant to Section 5 by providing the written
conversion notice referred to in Section 5(c) below on or before
November 30, 2001), at a redemption price of $1.00 per share,
together with all accrued and unpaid dividends through the effective
date of redemption.
(b) OPTIONAL REDEMPTION. At any time during the period
commencing on the second anniversary of the date of consummation of
an Initial Public Offering and ending on December 31, 2001 (the
"Optional Redemption Period"), the Corporation, at the option of the
Board of Directors, may redeem from the holders of Series D
Preferred Stock, at a redemption price of $1.00 per share, together
with accrued and unpaid dividends thereon to the date fixed for
redemption, all or any portion of the shares of Series D Preferred
Stock outstanding on such date. Written notice of such redemption of
the shares of Series D Preferred Stock to be so redeemed, which
shall include a certification of an executive officer of the
Corporation that the Corporation is ready, willing and able
(financially and otherwise) to effect such redemption, shall be
mailed, postage prepaid, to the holders of record of the shares to
be so redeemed at their respective addresses then appearing on the
books of the Corporation, not less than 45 nor more than 75 days
prior to the date designated for such redemption, which shall occur
during the Optional Redemption Period. In case less than all of the
outstanding shares of Series D Preferred Stock are to be redeemed,
the Corporation's notice shall so state and such redemption shall be
made on or pro rata basis in accordance with each holder's
respective holdings of Series D Preferred Stock. Such redemption by
the Corporation shall be subject, however, to the right of each such
holder to convert such holder's shares of Series D Preferred Stock
into Class B Common Stock or Class A Common Stock (as the case may
be) pursuant to Section 5 by delivering the written conversion
notice referred to in Section 5(c) at least 15 days prior to the
date fixed for redemption.
(c) GENERAL. From and after the effective date of redemption
and the setting aside of the funds necessary for redemption,
notwithstanding that any certificate for shares of Series D
Preferred Stock so called for redemption shall not have been
surrendered for cancellation, the shares to be redeemed shall no
longer be deemed outstanding, and the holders of certificates
representing such shares shall have with respect to such shares no
rights in or with respect to the Corporation except the right to
receive, upon the surrender of such certificates, the redemption
price therefor. Shares of Series D Preferred Stock redeemed by the
Corporation pursuant to this Section 3, or shares of Series D
Preferred Stock otherwise purchased by the Corporation, shall not be
reissued and shall be cancelled and retired in the manner provided
by the laws of the State of Delaware, and no other shares of Series
D Preferred Stock shall be issued in lieu thereof.
23. PREFERENCE ON LIQUIDATION, DISSOLUTION OR WINDING UP.
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(a) DEFINITION. A consolidation or merger of the Corporation,
a sale or transfer of substantially all of its assets as an
entirety, or any purchase or redemption of capital stock of the
Corporation of any class, shall not be regarded as "liquidation,
dissolution or winding up of the affairs of the Corporation" within
the meaning of this Section 4.
(b) SERIES D PREFERRED STOCK. During any proceedings for the
voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, the holders of the Series D
Preferred Stock shall be entitled to receive, before any
distribution of the assets of the Corporation shall be made in
respect of the outstanding Common Stock, PARI PASSU with any
distribution of assets to the holders of outstanding Parity Stock
but subject to any distribution to the holders of the Senior Stock,
an amount in cash for each share of Series D Preferred Stock equal
to $1.00 together with all accrued and unpaid dividend through the
effective date of such liquidation, dissolution or winding up, or
funds necessary for such payment shall have been set aside in trust
for the account of the holders of the outstanding Series D Preferred
Stock so as to be and continue available therefor. If upon such
liquidation, dissolution or winding up, the assets distributable to
the holders of the Series D Preferred Stock as aforesaid shall be
insufficient to permit the payment to them (together with any
distributions to the holders of Parity Stock) of $1.00 per share
(plus such accrued and unpaid dividends), the assets of the
Corporation shall be distributed to the holders of the Series D
Preferred Stock and the Parity Stock ratably until they shall have
received the full amount to which they would otherwise be entitled
but subject to any distribution of the assets of the Corporation in
respect of the Senior Stock. If the assets of the Corporation are
sufficient to permit the payment of such amounts to the holders of
the Series D Preferred Stock and the Parity Stock, the remainder of
the assets of the Corporation, if any, after the distributions as
aforesaid shall be distributed and divided ratably among the holders
of the Common Stock then outstanding according to their respective
shares. In calculating any amount distributable to the holders of
the Series D Preferred Stock as aforesaid, there shall be credited
against such amount any sums distributed or payable to such holders
other than pursuant to the terms hereof, whether under any letter of
credit, security or other similar right or interest.
24. CONVERSION. The Series D Preferred Stock shall be convertible into
Common Stock in accordance with the following provisions of this
Section 5.
(a) OPTIONAL CONVERSION. Subject to and upon compliance with
the provisions of this Section 5, each holder of shares of Series D
Preferred Stock shall have the right at such holder's option, at any
time or from time to time, from and after the date of original
issuance to convert all or any part of his shares of Series D
Preferred Stock into fully paid and nonassessable shares of Class B
Common Stock, provided however, that shares of Series D Preferred
Stock issued
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after the effective date of the Registration Statement filed in
connection with an Initial Public Offering shall be convertible only
into shares of Class A Common Stock, at the Conversion Price in
effect on the Conversion Date, upon the terms hereinafter set forth.
In any event, after December 31, 2001, shares of Series D Preferred
Stock will be convertible only into shares of Class A Common Stock.
(b) CONVERSION PRICE. The shares of Series D Preferred Stock
to be converted shall be convertible into the number of shares of
Common Stock as is determined by multiplying the number of shares of
Series D Preferred Stock to be converted by a fraction, the
numerator of which is $1.00 and the denominator of which is the
Conversion Price in effect on the Conversion Date.
(c) MECHANICS OF CONVERSION. The holder of any shares of
Series D Preferred Stock may exercise the optional conversion right
specified in paragraph (a) above by surrendering to the Corporation
or any transfer agent of the Corporation the certificate or
certificates for the shares to be converted, accompanied by written
notice stating that the holder elects to convert all or a specified
portion of the shares represented thereby. Optional conversion under
paragraph (a) shall be deemed to have been effected on the date when
notice of an election to convert and certificates for the shares to
be converted has been delivered; any such date is referred to herein
as the "Conversion Date". As promptly as practicable thereafter the
Corporation shall issue and deliver to or upon the written order of
such holders a certificate or certificates for the number of full
shares of Common Stock to which such holders are entitled rounded
down to the next whole share as provided in paragraph (d) below. The
person in whose name the certificate or certificates of Common Stock
are to be issued shall be deemed to have become a holder of record
of such Common Stock on the Conversion Date.
(d) FRACTIONAL SHARES. No fractional shares of Common Stock or
scrip shall be issued upon conversion of shares of Series D
Preferred Stock. Instead of any fractional shares of Common Stock
which would otherwise be issuable upon conversion of any shares of
Series D Preferred Stock, the number of full shares of Common Stock
issuable upon conversion thereof shall be reduced to the next lowest
number of whole shares, and the Corporation will pay a cash
adjustment in respect of any surrendered shares of Series D
Preferred Stock not converted into Common Stock in an amount equal
to $1.00 per share of Series D Preferred Stock.
(e) CONVERSION BASE PRICE ADJUSTMENTS. The Conversion Base
Price shall be subject to adjustment from time to time as follows:
(i) CERTAIN ISSUANCES OF EQUITY STOCK. If, at any time
following issuance of any Series D Preferred Stock, the
Corporation issues any Common Stock, or any security or
evidence of indebtedness which is convertible or exercisable
into or exchangeable for Common Stock, or any
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warrant, option or other right to subscribe for or purchase
Common Stock or any security or evidence of indebtedness which
is convertible or exchangeable for Common Stock (hereinafter,
"Equity Stock"), other than Excluded Stock (as defined in
clause (D) below), for a consideration per share less than
$4.50 per share, subject to adjustment for certain events
including subdivisions and combinations of the Common Stock, (
the "Base Price"), and if the Conversion Price is then based
upon the Conversion Base Price, then the Conversion Base Price
shall immediately be reduced to a price per share determined
by multiplying the Conversion Base Price then in effect by a
fraction, the numerator of which is an amount equal to the sum
of (x) the number of shares of Equity Stock of the Corporation
outstanding immediately prior to such issue or sale multiplied
by the Base Price plus (y) the consideration, if any, received
by the Corporation upon such issue or sale, and the
denominator of which is the total number of shares of Equity
Stock of the Corporation outstanding immediately after such
issue or sale multiplied by the Base Price. The number of
shares of Equity Stock outstanding at any given time for the
purposes of the foregoing computation means the shares of
Common Stock outstanding together with all shares of Common
Stock issuable upon conversion or exercise of any such Equity
Stock, excluding any shares of Common Stock previously
outstanding that have been reacquired by the Corporation and
constitute treasury shares.
For purposes of any adjustment of the Conversion Base
Price pursuant to this subparagraph (i) of this Section 5(e),
the following provisions shall be applicable:
(A) CASH. In the case of the issuance of Equity
Stock for cash, the amount of the consideration received
by the Corporation shall be deemed to be the amount of
the cash proceeds received by the Corporation for such
Equity Stock before deducting therefrom any discounts,
commissions, taxes, legal and accounting fees or other
expenses allowed, paid or incurred by the Corporation in
connection with the issuance and sale thereof.
(B) CONSIDERATION OTHER THAN CASH. In the case of
the issuance of Equity Stock (other than as described in
clause (C) below) for a consideration in whole or in
part other than cash, including securities acquired in
exchange therefor (other than securities by their terms
so exchangeable), the consideration other than cash
shall be deemed to be the fair market value thereof as
reasonably determined by the Board of Directors in good
faith.
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(C) OPTIONS AND CONVERTIBLE SECURITIES, ETC. In
the case of the issuance of (i) options, warrants or
other rights to purchase or acquire Common Stock or
other Equity Stock (whether or not at the time
exercisable), (ii) securities which by their terms are
convertible or exercisable into or exchangeable for
Common Stock or other Equity Stock (whether or not at
the time so convertible, exercisable or exchangeable) or
(iii) options, warrants or rights to purchase such
convertible or exchangeable securities (whether or not
at the time exercisable):
(1) the aggregate maximum number of shares
of Common Stock deliverable upon exercise of such
options, warrants or other rights to purchase or
acquire Common Stock shall be deemed to have been
issued at the time such options, warrants or
rights were issued and for a consideration equal
to the aggregate consideration (determined in the
manner provided in clauses (A) and (B) above), if
any, received by the Corporation upon the issuance
of such options, warrants or rights plus the
aggregate minimum purchase price provided in such
options, warrants or rights for the Common Stock
covered thereby;
(2) the aggregate maximum number of shares
of Common Stock deliverable upon conversion of or
in exchange for any such convertible or
exchangeable securities, or upon the exercise of
options, warrants or other rights to purchase or
acquire such convertible or exchangeable
securities and the subsequent conversion or
exchange thereof, shall be deemed to have been
issued at the time such securities were issued or
such options, warrants or rights were issued and
for a consideration equal to the consideration, if
any, received by the Corporation for any such
securities and related options, warrants or rights
(excluding any cash received on account of accrued
interest or accrued dividends), plus the
additional consideration, if any, to be received
by the Corporation upon the conversion or exchange
of such securities and the exercise of any related
options, warrants or rights (the consideration in
each case to be determined in the manner provided
in clauses (A) and (B) above);
(3) on any change in the number of shares of
Common Stock deliverable upon exercise of any such
options, warrants or rights or conversion of or
exchange for
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such convertible or exchangeable securities or any
change in the consideration to be received by the
Corporation upon such exercise, conversion or
exchange, including, but not limited to, a change
resulting from the anti-dilution provisions
thereof, the Conversion Base Price as then in
effect shall forthwith be readjusted to such
Conversion Base Price as would have been obtained
had an adjustment been made upon the issuance of
such options, warrants or rights not exercised
prior to such change, or securities not converted
or exchanged prior to such change, on the basis of
the terms of such options, warrants, rights or
convertible or exchangeable securities as so
changed;
(4) on the expiration or cancellation of any
such options, warrants or rights, or the
termination of the right to convert or exchange
such convertible or exchangeable securities, if
the Conversion Base Price shall have been adjusted
upon the issuance thereof, the Conversion Base
Price shall forthwith be readjusted to such
Conversion Base Price as would have been obtained
had an adjustment been made upon the issuance of
such options, warrants, rights or securities on
the basis of the issuance of only the number of
shares of Common Stock actually issued upon the
exercise of such options, warrants or rights, or
upon the conversion or exchange of such
securities; and
(5) regardless of whether the Conversion
Base Price shall have been adjusted upon the
issuance of any such options, warrants, rights or
convertible or exchangeable securities, no further
adjustment of the Conversion Base Price shall be
made for the actual issuance of Common Stock upon
the exercise, conversion or exchange thereof;
PROVIDED, HOWEVER, that no adjustment pursuant to
this clause (C) shall have the effect of increasing the
Conversion Base Price above the Initial Conversion Base
Price.
(D) EXCLUDED STOCK. For purposes hereof, "Excluded
Stock" means shares of Common Stock issued or reserved
for issuance by the Corporation (i) upon conversion of
any Series A Preferred Stock or Series C Preferred
Stock; (ii) pursuant to a stock dividend, subdivision or
split-up covered by paragraph (ii) of this Section 5(e);
(iii) to any one or more unaffiliated persons with
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whom the Corporation or one or more of its subsidiaries
effect a business combination (however structured),
whether issued in shares of Common Stock or other
securities convertible or exercisable into or
exchangeable with the Common Stock and (iv) upon
exercise of options issued to employees of the
Corporation or its subsidiaries (other than employees
who were the record holders of any Common Stock on
December 31, 1993), provided that the exercise price
thereof is not less than the fair market value per share
of Common Stock determined in good faith by the Board of
Directors at the time such options are granted.
(ii) STOCK DIVIDENDS. If the number of shares of
Common Stock outstanding at any time after the issuance of any
Series D Preferred Stock is increased by a stock dividend
payable in shares of Common Stock or by a subdivision or
split-up of shares of Common Stock, and if the Conversion
Price then in effect is based upon the Conversion Base Price,
then immediately after the record date fixed for the
determination of holders of Common Stock entitled to receive
such stock dividend or the effective date of such subdivision
or split-up, as the case may be, the Conversion Base Price
shall be appropriately decreased so that the holders of any
shares of Series D Preferred Stock shall be entitled to
receive the number of shares of Common Stock of the
Corporation which they would have owned immediately following
such action had such shares of Series D Preferred Stock been
converted immediately prior thereto.
(iii) COMBINATION OF STOCK. If the number of shares of
Common Stock outstanding at any time after issuance of any
class of Series D Preferred Stock is decreased by a
combination of the outstanding shares of Common Stock, and if
the Conversion Price then in effect is based upon the
Conversion Base Price then, immediately after the effective
date of such combination, the Conversion Base Price shall be
appropriately increased so that the holders of any shares of
Series D Preferred Stock shall be entitled to receive the
number of shares of Common Stock of the Corporation which they
would have owned immediately following such action had such
shares of Series D Preferred Stock been converted immediately
prior thereto.
(iv) REORGANIZATIONS. In case of any capital
reorganization of the Corporation, or of any reclassification
of the Common Stock, or in case of the consolidation of the
Corporation with or the merger of the Corporation with or into
any other corporation, partnership or other business entity in
which the Corporation is not the survivor, or of the sale,
lease or other transfer of all or substantially all of the
assets of the Corporation to any other corporation,
partnership or other business entity, each share of Series
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D Preferred Stock shall, after such capital reorganization,
reclassification, consolidation, merger, sale or lease, be
convertible into the number of shares of stock or other
securities or property to which the Common Stock issuable (at
the time of such capital reorganization, reclassification,
consolidation, merger, sale or lease) upon conversion of such
share of Series D Preferred Stock would have been entitled
upon such capital reorganization, reclassification,
consolidation, merger, sale or lease in place of (or in
addition to, in the case of any such event after which Common
Stock remains outstanding) the shares of Common Stock into
which such share of Series D Preferred Stock would otherwise
have been convertible; and in any such case, if necessary, the
provisions set forth herein with respect to the rights and
interests thereafter of the holders of the shares of Series D
Preferred Stock shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any share of
stock or other securities or property thereafter deliverable
on the conversion of the shares of Series D Preferred Stock.
The subdivision or combination of shares of Common Stock
issuable upon conversion of shares of Series D Preferred Stock
at any time outstanding into a greater or lesser number of
shares of Common Stock (whether with or without par value)
shall not be deemed to be a reclassification of the Common
Stock of the Corporation for the purposes of this subparagraph
(iv).
(v) ROUNDING OF CALCULATIONS; MINIMUM ADJUSTMENT. All
calculations under this paragraph (e) shall be made to the
nearest cent or to the nearest one hundredth (1/100th) of a
share, as the case may be. Any provision of this paragraph (e)
to the contrary notwithstanding, no adjustment in the
Conversion Base Price shall be made if the amount of such
adjustment would be less than $0.01, but any such amount shall
be carried forward and an adjustment with respect thereto
shall be made at the time of and together with any subsequent
adjustment which, together with such amount and any other
amount or amounts so carried forward, shall aggregate $0.01 or
more.
(vi) TIMING OF ISSUANCE OF ADDITIONAL COMMON STOCK
UPON CERTAIN ADJUSTMENTS. In any case in which the provisions
of this paragraph (e) requires that an adjustment shall become
effective immediately after a record date for an event, the
Corporation may defer until the occurrence of such event
issuing to the holder of any shares of Series D Preferred
Stock converted after such record date and before the
occurrence of such event the additional shares of Common Stock
or other property issuable or deliverable upon exercise by
reason of the adjustment required by such event over and above
the shares of Common Stock or other property issuable or
deliverable upon such conversion before giving effect to such
adjustment; PROVIDED, HOWEVER that the Corporation upon
request shall
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deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such
additional shares or other property, and such cash, upon the
occurrence of the event requiring such adjustment.
(f) STATEMENT REGARDING ADJUSTMENTS. Whenever the Conversion
Base Price shall be adjusted as provided in paragraph (e), the
Corporation shall forthwith file, at the office of any transfer
agent for the Series D Preferred Stock and at the principal office
of the Corporation, a statement showing in detail the facts
requiring such adjustment and the Conversion Base Price that shall
be in effect after such adjustment, and the Corporation shall also
cause a copy of such statement to be sent by mail, first class
postage prepaid, to each holder of the Series D Preferred Stock at
his or its address appearing on the Corporation's records. Each such
statement shall be signed by the Corporation's chief financial
officer. Where appropriate, such copy may be given in advance and
may be included as part of a notice required to be mailed under the
provisions of subparagraph (g) below.
(g) NOTICE TO HOLDERS. In the event the Corporation proposes
to take any action of the type described in subparagraph (i), (ii),
(iii) or (iv) of paragraph (e) above, the Corporation shall give
notice to each holder of the Series D Preferred Stock in the manner
set forth in subparagraph (f) above, which notice shall specify the
record date, if any, with respect to any such action and the
approximate date on which such action is to take place. Such notice
shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the
Conversion Base Price and the number, kind or class of shares or
other securities or property which shall be deliverable or
purchasable upon the occurrence of such action or deliverable upon
conversion of the Series D Preferred Stock. In the case of any
action which would require the fixing of a record date, such notice
shall be given at least 10 days prior to the date so fixed, and in
case of all other action, such notice shall be given at least 15
days prior to the taking of such proposed action.
(h) COSTS. The Corporation shall pay all documentary, stamp,
transfer or other transactional taxes attributable to the issuance
or delivery of shares of Common Stock of the Corporation or other
securities or property upon conversion of the shares of Series D
Preferred Stock; PROVIDED, HOWEVER, that the Corporation shall not
be required to pay any taxes which may be payable in respect of any
transfer involved in the issuance or delivery of any certificate for
such shares or securities in the name other than that of the holder
of the shares of Series D Preferred Stock in respect of which such
shares are being issued.
(i) RESERVATION OF SHARES. The Corporation shall reserve at
all times so long as any shares of Series D Preferred Stock remain
outstanding, free from
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preemptive rights, out of its treasury stock or its authorized but
unissued shares of Common Stock, or both, solely for the purpose of
effecting the conversion of shares of Series D Preferred Stock,
sufficient shares of Common Stock to provide for the conversion of
all outstanding shares of Series D Preferred Stock and set aside and
keep available any other property deliverable upon conversion of all
outstanding shares of Series D Preferred Stock.
(j) APPROVALS. If any shares of Common Stock or other
securities to be reserved for the purpose of conversion of shares of
Series D Preferred Stock require registration with or approval of
any governmental authority under any Federal or state law before
such shares or other securities may be validly issued or delivered
upon conversion, then the Corporation will in good faith and as
expeditiously as possible use its commercially reasonable efforts to
secure such registration or approval, as the case may be. The
foregoing does not include registration of such shares under the
Securities Act or state securities laws, except to the extent and in
the manner described in Section 8.
(k) VALID ISSUANCE. All shares of Common Stock or other
securities which may be issued upon conversion of the shares of
Series D Preferred Stock will upon issuance by the Corporation be
duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issuance thereof
and the Corporation shall take no action which will cause a contrary
result.
25. VOTING RIGHTS.
(a) GENERAL. At any annual or special meeting of shareholders
or otherwise in respect of any matter submitted for the vote of
shareholders generally, the holders of the Series D Preferred Stock
shall be entitled to such number of votes (or fractions thereof) as
shall be determined by (i) multiplying (1) vote for each share of
Series D Preferred Stock held by a fraction, the numerator of which
is $1.00 and the denominator of which is the Conversion Price in
effect on the record date for determining shareholders entitled to
vote on such matter; and (ii) dividing the resulting product by
twenty (20).
(b) SPECIAL VOTING REQUIREMENTS. Without limiting the
generality of paragraph (a) above, the Corporation shall not,
without the consent of the holders of at least a majority of the
outstanding shares of Series D Preferred Stock, voting together as a
single class, amend, alter or repeal any provision of the
Corporation's Certificate of Incorporation or Bylaws or this
Certificate of Designation, in any event so as to adversely affect
the rights or powers of any of the Series D Preferred Stock as
provided herein. As to any record holder of Series D Preferred
Stock, the Corporation will not, without the consent of such holder,
alter or amend the Initial Conversion Base Price applicable to the
Series D Preferred Stock held
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by such holder, the Dividend Rate applicable to the Series D
Preferred Stock held by such holder, or the date on which such
holder's Series D Preferred Stock is required to be redeemed under
Section 3(a).
26. REGISTRATION RIGHTS. Subject to paragraph (h) below and the other
provisions of this Section 8, the holders of the Series D Preferred
Stock shall be entitled to have their respective shares of Class A
Common Stock, issuable upon conversion of their Series D Preferred
Stock into Class B Common Stock and subsequently converted into
shares of Class A Common Stock, included in any registration of
Class A Common Stock under the Securities Act proposed by the
Corporation.
(a) INCIDENTAL RIGHTS. If at any time or from time to time the
Corporation proposes to file with the Securities and Exchange
Commission (the "Commission") a registration statement (whether on
Form S-1, S-2 or S-3 or any equivalent form then in effect) for the
registration under the Securities Act of any shares of Class A
Common Stock for sale to the public by the Corporation or on behalf
of a shareholder of the Corporation for cash (excluding any shares
of Class A Common Stock issuable by the Corporation upon the
exercise of employee or director stock options or in connection with
the merger or consolidation of the Corporation or one of its
subsidiaries with one or more other corporations if the Corporation
is the surviving corporation), the Corporation shall give each
holder of the Series D Preferred Stock at least 30 days' prior
written notice of the filing of the proposed registration statement.
The notice shall include a list of the states and foreign
jurisdictions, if any, in which the Corporation intends to qualify
such shares, and shall also include the Corporation's estimate of
the range of the offering price per share of Class A Common Stock.
On the written request of any holder of the Series D Preferred Stock
received by the Corporation within 15 days after the date of the
Corporation's notice, the Corporation shall, subject to the
conditions and in accordance with the procedures set forth in
paragraphs (b) and (c) below, and at its own expense as provided in
paragraph (e) below, include in the coverage of such registration
statement and qualify for sale under the blue sky or securities laws
of the various states, the number of shares (but not less than 5,000
shares, subject to adjustment to give effect to any stock dividends,
splits or combinations, recapitalizations or other similar corporate
events) of Class A Common Stock (herein called the "Specified
Shares") held and so requested to be registered by each such holder;
provided that if the managing underwriter for the Corporation
indicates its belief in writing that the effect of including in the
coverage of such registration statement all or part of the Specified
Shares and the shares of Class A Common Stock requested to be so
included by other stockholders having contractual registration
rights ("Other Requesting Stockholders") will materially and
adversely affect the sale of the shares of Class A Common Stock
proposed to be sold by the Corporation (which statement of the
managing underwriter shall also state the maximum number of shares
(herein called the "Maximum Shares"), if any, which can be sold by
such all such holders
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without materially and adversely affecting the sale of the shares
proposed to be sold by the Corporation), then the number of
Specified Shares which the holders of the Series D Preferred Stock
and the Other Requesting Stockholders shall collectively have the
right to include in such registration statement shall be reduced to
the number of Maximum Shares set forth in such statement of the
managing underwriter, such reduction to be effected on a pro rata
basis in accordance with the number of all such shares requested to
be so registered by the holders of the Series D Preferred Stock and
the Other Requesting Stockholders.
Except as provided in paragraph (c) below, in no event shall
the Corporation be required to amend any registration statement
filed pursuant to this Section 8 after it has become effective or to
amend or supplement any prospectus to permit the continued
disposition of shares of Class A Common Stock registered under any
registration statement.
The Corporation shall have the right to select any
underwriters, including the managing underwriter, of any public
offering of shares of Class A Common Stock subject to the provisions
of this paragraph (a). Nothing in this paragraph (a) shall create
any liability on the part of the Corporation to the holders of the
Series D Preferred Stock if the Corporation for any reason should
decide not to file such a registration statement.
The Corporation may withdraw any registration statement and
abandon any proposed offering initiated by the Corporation without
the consent of any holder of the Series D Preferred Stock,
notwithstanding the request of any such holder to participate
therein in accordance with this paragraph (a), if the Corporation
determines that such action is in the best interests of the
Corporation.
(b) CERTAIN REGISTRATION CONDITIONS. Any holder of Series D
Preferred Stock requesting registration of Class A Common Stock into
which such holder's Series D Preferred Stock is convertible,
following conversion into Class B Common Stock, pursuant to
paragraph (a) of this Section 8 is hereafter referred to as a
"Selling Stockholder." Anything in this Agreement to the contrary
notwithstanding, the Corporation shall not be required to effect a
registration of any Class A Common Stock of any Selling Stockholder
pursuant to paragraph (a) of this Section 8, or file any
post-effective amendment thereto:
(i) unless such Selling Stockholder agrees (x) to sell
and distribute a portion or all of his Class A Common Stock in
accordance with the customary plan or plans of distribution
adopted by and through underwriters, if any, acting for the
Corporation, and (y) to bear a pro rata share of underwriter's
discounts and commissions;
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(ii) unless the Corporation and the underwriters for the
Corporation shall have received from such Selling Stockholder
all such information as the Corporation and such underwriters
may reasonably request from him concerning such Selling
Stockholder to enable the Corporation to include in the
registration statement all material facts required to be
disclosed therein. Notwithstanding the foregoing, a Selling
Stockholder shall not be required to furnish to the
Corporation any personal financial information of such Selling
Stockholder unrelated to his holdings of Class A Common Stock,
Series D Preferred Stock or other securities of the
Corporation held by him, provided that each Selling
Stockholder shall nonetheless be required to furnish all
information reasonably requested by any such underwriter;
(iii) unless such Selling Stockholder is then entitled
to convert his shares of Series D Preferred Stock into Class B
Common Stock and subsequently convert into Class A Common
Stock and such Selling Stockholder in fact delivers the notice
to elect to convert the Series D Preferred Stock into Class B
Common Stock with a subsequent conversion into Class A Common
Stock prior to or contemporaneously with the notice of such
Selling Stockholder under paragraph (a) hereof; and
(iv) unless such Selling Stockholder, at the request of
the Corporation or its managing underwriter, agrees or
acknowledges that such Selling Stockholder (x) has a present
intention to sell such shares; (y) agrees to execute all
consents, powers of attorney, registration statements and
other documents required in order to cause such registration
statement to become effective; and (z) agrees, if the offering
is at the market, to give the Corporation written notice of
the first bona fide offering of such shares and to use the
prospectus forming a part of such registration statement for
only a period of 90 days (or such longer period provided for
in paragraph (c) below) unless such registration statement is
on a form that complies with Rule 415.
(c) COVENANTS AND PROCEDURES. If the Corporation becomes
obligated under the provisions of paragraph (a) of this Section 8 to
effect registration of shares of Class A Common Stock on behalf of
any Selling Stockholder, the following shall apply:
(i) The Corporation, at its own expense as provided
in paragraph (e), shall prepare and file with the Commission a
registration statement covering such shares of Class A Common
Stock and use its best efforts to cause such registration
statement to become effective; and the Corporation will file
such post-effective amendments to such registration statement
(and use its best efforts to cause them to become effective)
and
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such supplements as are necessary so that current prospectuses
are at all times available for a period of at least 90 days
after the effective date of such registration statement or for
such longer period, not to exceed 180 days, as may be required
by the Corporation or the managing underwriter under the plan
or plans of distribution set forth in such registration
statement. Each Selling Stockholder shall promptly provide the
Corporation with such information with respect to such Selling
Stockholder's shares of Class A Common Stock to be so
registered and, if applicable, the proposed terms of the
offering thereof as is required for such registration.
Further, if the shares of Class A Common Stock to be covered
by the registration statement are not to be sold to or through
underwriters acting for the Corporation, the Corporation shall
(x) deliver to each Selling Stockholder as promptly as
practicable as many copies of preliminary prospectuses as such
Selling Stockholder may reasonably request, and such Selling
Stockholder shall keep a written record of the distribution of
such preliminary prospectuses and shall refrain from delivery
of such preliminary prospectuses in any manner or under any
circumstances which would violate the Securities Act or the
securities laws of any other jurisdiction, including the
various states of the United States, (y) deliver to each
Selling Stockholder, as soon as practicable after the
effective date of the registration statement, and from time to
time thereafter during such 90-day period, or such longer
period as is herein provided, as many copies of the
prospectuses required to be delivered in connection with the
sale of shares of Class A Common Stock registered under the
registration statement as such Selling Stockholder may
reasonably request, and (z) in case of the happening, after
the effective date of such registration statement and during
such 90-day period (or such longer period specified above), of
any event or occurrence which would be set forth in an
amendment of or supplement to such prospectus to make any
statements therein not misleading or to correct any misleading
omissions, give each Selling Stockholder written notice
thereof and prepare and furnish to such Selling Stockholder,
in such quantities as he may reasonably request, copies of
such amended prospectus or of such supplement to be attached
to the prospectus in order that the prospectus, as so amended
or supplemented, will not contain any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made,
not misleading.
(ii) On or prior to the date on which the registration
statement is declared effective, the Corporation shall use its
best efforts to register or qualify, and cooperate with each
Selling Stockholder, the underwriter or underwriters, if any,
and their counsel, in connection with the registration or
qualification of the Class A Common Stock covered by the
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registration statement for offer and sale under the securities
or blue sky laws of each state and other jurisdiction of the
United States as such Selling Stockholder or underwriter
reasonably requests, to use its best efforts to keep each such
registration or qualification effective, including through new
filings, or amendments or renewals, during the period such
registration statement is required to be kept effective and to
do any and all other acts or things necessary or advisable to
enable the disposition in all such jurisdictions of the Class
A Common Stock covered by the applicable registration
statement; provided that the Corporation will not be required
to qualify generally to do business in any jurisdiction where
it is not then so qualified.
(iii) The Corporation shall use its best efforts to
cause all of each Selling Stockholder's Class A Common Stock
included in such registration statement to be listed, by the
date of the first sale of such Class A Common Stock pursuant
to such registration statement, on each securities exchange on
which the Class A Common Stock of the Corporation is then
listed or proposed to be listed, if any.
(iv) The Corporation shall make generally available to
each Selling Stockholder and any underwriter participating in
the offering conducted pursuant to the registration statement
an earnings statement satisfying the provisions of Section
11(a) of the Securities Act no later than 45 days after the
end of the 12-month period beginning with the first day of the
Corporation's first fiscal quarter commencing after the
effective date of the registration statement, which earnings
statement shall cover said 12-month period, which requirement
will be deemed to be satisfied if the Corporation timely files
complete and accurate information on Forms 10- Q, 10-K, and
8-K under the Securities Exchange Act of 1934, as amended, and
otherwise complies with Rule 158 under the Securities Act as
soon as feasible.
(v) The Corporation shall cooperate with each Selling
Stockholder and the managing underwriter or underwriters, if
any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends)
representing Class A Common Stock to be sold under the
registration statement, and enable such securities to be in
such denominations and registered in such names as the
managing underwriter or underwriters, if any, or such Selling
Stockholder may request, subject to the underwriters'
obligation to return any certificates representing securities
not sold.
(vi) The Corporation shall use its best efforts to
cause each Selling Stockholder's Class A Common Stock covered
by the registration
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statement to be registered with or approved by such other
governmental agencies or authorities within the United States
as may be necessary to enable such Selling Stockholder or the
underwriter or underwriters, if any, to consummate the
disposition of such Class A Common Stock.
(vii) The Corporation shall make available for
inspection by each Selling Stockholder, any underwriter
participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent
retained by such Selling Stockholder or any such underwriter
(collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the
Corporation, as shall be reasonably necessary to enable them
to exercise their due diligence, responsibility, and cause the
Corporation's officers, directors and employees to supply all
nonconfidential information reasonably requested by any such
Inspector in connection with such registration statement. As a
condition to providing such access, the Corporation may
require that any and all Inspectors execute and deliver
confidentiality agreements, in form and substance acceptable
to the Corporation, and that confidentiality procedures be
observed, all with respect to such information.
(viii) The Corporation shall use its best efforts to
obtain a "cold comfort" letter from the Corporation's
independent public accountants, and an opinion of counsel for
the Corporation, each in customary form and covering such
matters of the type customarily covered by cold comfort
letters and opinions of counsel in connection with public
offerings of securities, as each Selling Stockholder
reasonably requests.
(d) INDEMNIFICATION.
(i) INDEMNIFICATION BY THE CORPORATION. In the event
of any registration under the Securities Act pursuant to this
Section 8 of shares of Class A Common Stock held by any
Selling Stockholder, the Corporation will hold harmless each
Selling Stockholder and each underwriter of such securities
and each other person, if any, who controls each Selling
Stockholder or such underwriter within the meaning of the
Securities Act, against any losses, claims, damages or
liabilities (including legal fees and costs of court), joint
or several, to which such Selling Stockholder or such
underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained, on the
effective date thereof, in any registration statement under
which such securities were registered under the Securities
Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or
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supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse each
Selling Stockholder and each such underwriter and each such
controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage or liability;
provided, however, that the Corporation shall not be liable to
any Selling Stockholder or his underwriters or controlling
persons in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement,
preliminary prospectus or final prospectus or such amendment
or supplement in reliance upon and in conformity with
information furnished to the Corporation through a written
instrument duly executed by such Selling Stockholder or such
underwriter specifically for use in the preparation thereof.
(ii) INDEMNIFICATION BY SELLING STOCK-HOLDERS. It shall
be a condition precedent to the obligation of the Corporation
to include in any registration statement any shares of Class A
Common Stock then held by a Selling Stockholder that the
Corporation shall have received an undertaking reasonably
satisfactory to it and its counsel from such Selling
Stockholder to severally indemnify and hold harmless (in the
same manner and to the same extent as set forth in
subparagraph (i) above) the Corporation, each director of the
Corporation, each officer of the Corporation who shall sign
such registration statement, each underwriter of such
securities and any person who controls the Corporation or such
underwriter within the meaning of the Securities Act, with
respect to any statement or omission from such registration
statement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, if
such statement or omission was made in reliance upon and in
conformity with information furnished to the Corporation
through a written instrument duly executed by such Selling
Stockholder specifically for use in the preparation of such
registration statement, preliminary prospectus or final
prospectus or such amendment or supplement thereto.
(iii) INDEMNIFICATION PROCEDURES. Promptly after receipt
by an indemnified party of notice of the commencement of any
action involving a claim referred to in the preceding
subparagraphs (i) and (ii), such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying
party, give written notice to the indemnifying party of the
commencement of such action. In case any such action is
brought against an indemnified party, the indemnifying party
will be entitled to participate in and to assume the defense
thereof, with counsel reasonably satisfactory
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to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election
so to assume the defense thereof, and provided that the
indemnifying party in fact assumes such defense, the
indemnifying party will not be liable to such indemnified
party for any legal or other expenses incurred after the date
of such notice by the latter in connection with the defense
thereof. Whether or not such defense is assumed by the
indemnifying party, the indemnifying party will not be subject
to any liability for any settlement made without its consent.
No indemnifying party will consent to entry of any judgment or
enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation.
(iv) CONTRIBUTION. If the indemnification provided for
in this paragraph (d) from the indemnifying party is
unavailable to an indemnified party hereunder in respect of
any losses, claims, damages, liabilities or expenses referred
to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative
fault of the indemnifying party and indemnified parties in
connection with the actions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined
by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of
a material fact or a material omission, has been made by, or
relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as
a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding. For
purposes of the foregoing, it would not be just and equitable
if contribution pursuant to this paragraph (d) were determined
by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations
referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this subparagraph (iv), no
Selling Stockholder shall be required to contribute any amount
in excess of the amount by which the total price at which the
Class A Common Stock of such Selling Stockholder was offered
to the public exceeds the amount of any damages which such
Selling Stockholder has otherwise been required to pay by
reason of such untrue statement or omission. No person guilty
of fraudulent misrepresentation
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(within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) EXPENSES. All expenses incurred by the Corporation in
connection with any registration statement covering shares of Class
A Common Stock offered by the Selling Stockholders, including,
without limitation, all registration and filing fees (including all
expenses incident to filing with the National Association of
Securities Dealers, Inc.), printing expenses, fees and disbursements
of counsel for the Corporation and of its independent certified
public accountants, the reasonable fees and disbursements of one
counsel for collectively all Selling Stockholders and Other
Requesting Stockholders whose stock is included in such
registration, and the expense of qualifying such shares under state
blue sky laws, shall be borne by the Corporation; provided, however,
that all underwriter's discounts and commissions relating to the
shares of Class A Common Stock to be sold by the Selling
Stockholders shall be borne by the Selling Stockholders.
(f) DISPOSITIONS DURING REGISTRATION. Upon written request by
the Corporation, the Selling Stockholders will agree, upon the
registration of any of each such Selling Stockholder's shares of
Class A Common Stock or the Class A Common Stock issued by the
Corporation, not to sell or otherwise dispose of any shares of Stock
(other than Class A Common Stock covered by such registration, which
may be sold in accordance with the plan or plans of distribution
described in the registration statement) owned by each such Selling
Stockholder for a period of 90 days following the effective date of
such registration statement, or for such longer period (not to
exceed 180 days) as may be required under the plan or plans of
distribution set forth in such registration statement. Each holder
of the Series D Preferred Stock shall comply with the foregoing
requirements even if his Class A Common Stock issuable upon the
conversion thereof is not being included in such registration, if
(i) at such time such holder (together with his Affiliates) owns
five percent (5%) or more of the fully diluted Class A Common Stock
and (ii) other holders of five percent or more of the fully diluted
Class A Common Stock are similarly bound.
(g) RIGHTS TRANSFERABLE. The foregoing registration rights and
benefits set forth in this Section 8, including indemnification by
the Corporation, shall be transferable by each holder of the Series
D Preferred Stock in connection with the transfer by any such holder
of Series D Preferred Stock convertible into not less than 10,000
shares (subject to adjustment to give effect to any stock dividends,
splits or combinations, recapitalization or other similar corporate
events) of Class A Common Stock, otherwise than pursuant to a
registration statement of the Corporation in connection with a
public offering of Class A Common Stock.
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(h) TERM OF REGISTRATION RIGHTS. The registration rights
granted pursuant to this Section 8 shall be effective for a period
commencing upon the date of original issuance thereof and ending on
(i) as to any holder of Series D Preferred Stock, upon either (A)
such holder's written consent, (B) the date such holder holds,
together with such holder's Affiliates, less than 10,000 shares
(subject to adjustment as described in paragraph (g) above) of Class
A Common Stock determined on a fully diluted basis, or (c) the date
such holder is able to dispose of all shares of Class A Common Stock
that such holder may acquire upon conversion of the Series D
Preferred Stock within a single three-month period under Rule 144
promulgated under the Securities Act; and (ii) as to all holders of
the Series D Preferred Stock, on December 31, 2005.
27. PERIODIC REPORTING. If the Corporation becomes subject to the
periodic reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, while any shares of
Series D Preferred Stock are outstanding, the Corporation shall
provide to each record holder of the Series D Preferred Stock a copy
of each report filed or delivered pursuant to said Section 13 or
15(d), to substantially the same extent, in substantially the same
manner and at substantially the same times as such reports are
delivered to the holders of the Corporation's Class A Common Stock.
28. EXCLUSION OF OTHER RIGHTS. Unless otherwise required by law, the
shares of Series D Preferred Stock shall not have any voting powers,
preferences or relative, participating, optional or other special
rights other than those specifically set forth herein.
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CERTIFICATE OF ELIMINATION
OF
SERIES A PREFERRED STOCK
OF
CARRIAGE SERVICES, INC.
Pursuant to Section 151 of the General Corporation Law of the State
of Delaware, CARRIAGE SERVICES, INC., a corporation organized and existing under
the General Corporation Law of the State of Delaware (herein referred to as the
"Corporation"), DOES HEREBY CERTIFY:
That pursuant to authority granted to the Board of Directors of the
Corporation by the Amended and Restated Certificate of Incorporation of the
Corporation, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, such Board of Directors by unanimous
written consent dated October __, 1996, duly adopted a resolution providing for
the elimination of a designation of a series of preferred stock of the
Corporation, which resolution is as follows:
WHEREAS, the Corporation has previously established and designated a
series of Preferred Stock, $.01 par value, designated as its Series A
Preferred Stock ("Series A Preferred Stock"), consisting of up to
7,000,000 shares, pursuant to the Certificate of Designation, Preferences,
Rights and Limitations filed with the Secretary of State of Delaware on
January 14, 1994, as amended and restated in the form attached as Exhibit
A to the Corporation's Amended and Restated Certificate of Incorporation
filed with the Secretary of State of Delaware on July 3, 1996 (as so
amended and restated, the "Series A Certificate of Designation"); and
WHEREAS, no such shares of Series A Preferred Stock are currently
issued or outstanding, and none will be issued;
NOW, THEREFORE, BE IT RESOLVED, that no shares of Series A
Preferred Stock are issued or outstanding, and none will be issued,
and therefore pursuant to the authority expressly granted and vested
in the Board of Directors of the Corporation in accordance with the
provisions of the Amended and Restated Certificate of Incorporation
of the Corporation and Section 151(g) of the General Corporation Law
of the State of Delaware, the Series A Certificate of Designation is
hereby withdrawn and eliminated.
IN WITNESS WHEREOF, CARRIAGE SERVICES, INC. has caused this
Certificate of Elimination to be signed by Melvin C. Payne, its President, as of
the _____ day of October, 1996.
CARRIAGE SERVICES, INC.
By: ___________________________
MELVIN C. PAYNE, President
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CERTIFICATE OF ELIMINATION
OF
SERIES B PREFERRED STOCK
OF
CARRIAGE SERVICES, INC.
Pursuant to Section 151 of the General Corporation Law of the State
of Delaware, CARRIAGE SERVICES, INC., a corporation organized and existing under
the General Corporation Law of the State of Delaware (herein referred to as the
"Corporation"), DOES HEREBY CERTIFY:
That pursuant to authority granted to the Board of Directors of the
Corporation by the Amended and Restated Certificate of Incorporation of the
Corporation, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, such Board of Directors by unanimous
written consent dated October __, 1996, duly adopted a resolution providing for
the elimination of a designation of a series of preferred stock of the
Corporation, which resolution is as follows:
WHEREAS, the Corporation has previously established and designated a
series of Preferred Stock, $.01 par value, designated as its Series B
Preferred Stock ("Series B Preferred Stock"), consisting of up to
2,500,000 shares, pursuant to the Certificate of Designation, Preferences,
Rights and Limitations filed with the Secretary of State of Delaware on
October 26, 1994, as amended and restated (and in connection with which
the number of shares authorized thereunder was decreased to 1,000,000
shares of Series B Preferred Stock) in the form attached as Exhibit B to
the Corporation's Amended and Restated Certificate of Incorporation filed
with the Secretary of State of Delaware on July 3, 1996 (as so amended and
restated, the "Series B Certificate of Designation"); and
WHEREAS, no such shares of Series B Preferred Stock are currently
issued or outstanding, and none will be issued;
NOW, THEREFORE, BE IT RESOLVED, that no shares of Series B
Preferred Stock are issued or outstanding, and none will be issued,
and therefore pursuant to the authority expressly granted and vested
in the Board of Directors of the Corporation in accordance with the
provisions of the Amended and Restated Certificate of Incorporation
of the Corporation and Section 151(g) of the General Corporation Law
of the State of Delaware, the Series B Certificate of Designation is
hereby withdrawn and eliminated.
IN WITNESS WHEREOF, CARRIAGE SERVICES, INC. has caused this
Certificate of Elimination to be signed by Melvin C. Payne, its President, as of
the _____ day of October, 1996.
CARRIAGE SERVICES, INC.
By: __________________________
MELVIN C. PAYNE, President
-74-
CERTIFICATE OF ELIMINATION
OF
SERIES C PREFERRED STOCK
OF
CARRIAGE SERVICES, INC.
Pursuant to Section 151 of the General Corporation Law of the State
of Delaware, CARRIAGE SERVICES, INC., a corporation organized and existing under
the General Corporation Law of the State of Delaware (herein referred to as the
"Corporation"), DOES HEREBY CERTIFY:
That pursuant to authority granted to the Board of Directors of the
Corporation by the Amended and Restated Certificate of Incorporation of the
Corporation, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, such Board of Directors by unanimous
written consent dated October __, 1996, duly adopted a resolution providing for
the elimination of a designation of a series of preferred stock of the
Corporation, which resolution is as follows:
WHEREAS, the Corporation has previously established and designated a
series of Preferred Stock, $.01 par value, designated as its Series C
Preferred Stock ("Series C Preferred Stock"), consisting of up to
8,500,000 shares, pursuant to the Certificate of Designation, Preferences,
Rights and Limitations filed with the Secretary of State of Delaware on
September 7, 1995, as amended and restated in the form attached as Exhibit
C to the Corporation's Amended and Restated Certificate of Incorporation
filed with the Secretary of State of Delaware on July 3, 1996 (as so
amended and restated, the "Series C Certificate of Designation"); and
WHEREAS, no such shares of Series C Preferred Stock are currently
issued or outstanding, and none will be issued;
NOW, THEREFORE, BE IT RESOLVED, that no shares of Series C
Preferred Stock are issued or outstanding, and none will be issued,
and therefore pursuant to the authority expressly granted and vested
in the Board of Directors of the Corporation in accordance with the
provisions of the Amended and Restated Certificate of Incorporation
of the Corporation and Section 151(g) of the General Corporation Law
of the State of Delaware, the Series C Certificate of Designation is
hereby withdrawn and eliminated.
IN WITNESS WHEREOF, CARRIAGE SERVICES, INC. has caused this
Certificate of Elimination to be signed by Melvin C. Payne, its President, as of
the _____ day of October, 1996.
CARRIAGE SERVICES, INC.
By: _________________________
MELVIN C. PAYNE, President
-76-
CERTIFICATE OF DECREASE
OF
SERIES D PREFERRED STOCK
OF
CARRIAGE SERVICES, INC.
Pursuant to Section 151 of the General Corporation Law of the State
of Delaware, CARRIAGE SERVICES, INC., a corporation organized and existing under
the General Corporation Law of the State of Delaware (herein referred to as the
"Corporation"), DOES HEREBY CERTIFY:
That pursuant to authority granted to the Board of Directors of the
Corporation by the Amended and Restated Certificate of Incorporation of the
Corporation, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, such Board of Directors by unanimous
written consent dated October __, 1996, duly adopted a resolution providing for
the reduction in the number of shares designated in a series of preferred stock
of the Corporation, which resolution is as follows:
WHEREAS, the Corporation has previously established and designated a
series of Preferred Stock, $.01 par value, designated as its Series D
Preferred Stock ("Series D Preferred Stock"), consisting of up to
10,000,000 shares, pursuant to the Certificate of Designation,
Preferences, Rights and Limitations filed with the Secretary of State of
Delaware on March 6, 1996, as amended and restated (and in connection with
which the number of shares authorized thereunder was increased to
20,000,000 shares of Series D Preferred Stock) in the form attached as
Exhibit D to the Corporation's Amended and Restated Certificate of
Incorporation filed with the Secretary of State of Delaware on July 3,
1996 (as so amended and restated, the "Series D Certificate of
Designation"); and
WHEREAS, there are currently 17,775,616 shares of Series D Preferred
Stock which are currently issued and outstanding;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority
expressly granted and vested in the Board of Directors of the
Corporation in accordance with the provisions of the Amended and
Restated Certificate of Incorporation of the Corporation and Section
151(g) of the General Corporation Law of the State of Delaware, the
number of shares designated as Series D Preferred Stock pursuant to
the Series D Certificate of Designation is hereby decreased to
NINETEEN MILLION (19,000,000).
IN WITNESS WHEREOF, CARRIAGE SERVICES, INC. has caused this
Certificate of Elimination to be signed by Melvin C. Payne, its President, as of
the _____ day of October, 1996.
CARRIAGE SERVICES, INC.
By: _________________________
MELVIN C. PAYNE, President
-78-
CERTIFICATE OF DESIGNATION, PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES E PREFERRED STOCK
OF
CARRIAGE SERVICES, INC.
PURSUANT to Section 151(g) of the General Corporation Law of
Delaware, CARRIAGE SERVICES, INC., a corporation organized and existing under
the General Corporation Law of Delaware (herein referred to as the
"Corporation"), DOES HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of Directors of
the Corporation by its Certificate of Incorporation, and pursuant to the
provisions of Section 151(g) of the General Corporation Law of Delaware, such
Board of Directors by written unanimous consent dated October 30, 1996, duly
adopted a resolution providing for the issuance of a series of Eleven Million
(11,000,000) shares of the Corporation's Preferred Stock, $.01 par value per
share, to be designated "Series E Preferred Stock", and fixing the voting
powers, preferences and relative, participating, optional or other rights, and
the qualifications, limitations or restrictions thereof, which resolution is as
follows:
RESOLVED, that pursuant to the authority expressly granted and
vested in the Board of Directors of the Corporation in accordance with the
provisions of its Certificate of Incorporation, there shall be established
and authorized for issuance a series of the Corporation's Preferred Stock,
$.01 par value per share, designated "Series E Preferred Stock" (herein
referred to as "Series E Preferred Stock"), consisting of Eleven Million
(11,000,000) shares, each of the par value of $.01 per share, and having
the voting powers, preferences and relative, participating, optional and
other rights, and the qualifications, limitations or restrictions set
forth below:
29. DEFINITIONS. For purposes hereof, the following terms shall have the
following definitions or shall be subject to the following rules of
construction:
(a) "Baseline Price" shall mean $13.50 per share of Class A
Common Stock, which number shall be subject to appropriate
adjustment to give effect to any stock splits, stock combinations,
recapitalizations and other corporate transactions in the Class A
Common Stock in the manner described in subparagraphs (ii), (iii)
and (iv) of Section 5(e).
(b) "Board of Directors" means the Board of Directors of the
Corporation.
(c) "Class A Common Stock" means the Corporation's Class A
Common Stock, par value $.01 per share.
(d) "Class B Common Stock" means the Corporation's Class B
Common Stock, par value $.01 per share.
(e) "Common Stock" means, collectively, shares of Class A
Common Stock and Class B Common Stock.
(f) "Conversion Base Price" shall mean:
(i) if, as to any shares of Series E Preferred Stock,
the Conversion Date occurs on or before the day immediately
preceding the first anniversary of the Initial Issuance Date,
the Initial Conversion Base Price;
(ii) if, as to any such shares, the Conversion Date occurs
between the first anniversary of the Initial Issuance Date and
the day immediately preceding the second anniversary of the
Initial Issuance Date, inclusive, the product of (x) the
Initial Conversion Base Price MULTIPLIED BY (y) 106%; and
(iii) if, as to any such shares, the Conversion Date occurs
between the second anniversary of the Initial Issuance Date
and the day immediately preceding the third anniversary of the
Initial Issuance Date, inclusive, the product of (x) the
amount determined under clause (ii) above MULTIPLIED BY (y)
106%.
The foregoing shall be subject to adjustment in the manner
provided in Section 5 hereof.
(g) "Conversion Date" has the meaning specified in Section
5(c).
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(h) "Conversion Price" means:
(i) if, as to any shares of Series E Preferred Stock,
the Conversion Date occurs on or before the third anniversary
of the Initial Issuance Date, the Conversion Base Price; and
(ii) if, as to any such shares, the Conversion Date occurs
on or after the third anniversary of the Initial Issuance
Date, the Market Price.
(i) "Dividend Rate" shall mean an annual rate (expressed in
dollars or portions thereof) as shall be determined from time to
time by the Board of Directors at the time of issuance of any shares
of Series E Preferred Stock. The Dividend Rate applicable to any
shares of Series E Preferred Stock shall be recorded in the minutes
of the Board of Directors at which such shares are authorized to be
issued, and shall be conclusively evidenced (absent manifest error)
by a notation to such effect on the face of each certificate
representing such shares.
(j) "Initial Conversion Base Price" means an amount (expressed
in dollars or portions thereof) as shall be determined from time to
time by the Board of Directors at the time of issuance of any shares
of Series E Preferred Stock. The Initial Conversion Base Price
applicable to any shares of Series E Preferred Stock shall be
recorded in the minutes of the Board of Directors at which such
shares are authorized to be issued, and shall be conclusively
evidenced (absent manifest error) by a notation to such effect on
the face of each certificate representing such shares.
(k) "Initial Issuance Date" shall mean the first date on which
any given shares of Series E Preferred Stock shall be issued by the
Corporation. The Initial Issuance Date applicable to any shares of
Series E Preferred Stock shall be recorded in the minutes of the
Board of Directors at which such shares are authorized to be issued,
and shall be conclusively evidenced (absent manifest error) by a
notation to such effect on the face of each certificate representing
such shares.
(l) "Junior Stock" means shares of Common Stock, shares of the
Corporation's Series D Preferred Stock, $.01 par value, and shares
of any other class or series of the Corporation's capital stock
which by its terms is junior or subordinate to the Series E
Preferred Stock in any distribution of the Corporation's assets in
connection with the liquidation, dissolution or winding up of the
affairs of the Corporation.
(m) "Market Price" means the average Trading Price of a share
of Class A Common Stock for the ten trading days of the Class A
Common Stock
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preceding the Conversion Date. If during such ten-day period the
Class A Common Stock is not traded on a national securities exchange
or over-the-counter and reported on NASDAQ, then Market Value shall
be the fair market value of a share of Class A Common Stock as
reasonably determined in good faith by the Board of Directors.
(n) The term "outstanding", when used with reference to shares
of capital stock, shall mean issued shares, excluding shares held by
the Corporation or a subsidiary of the Corporation.
(o) "Parity Stock" means shares of the Corporation's Series F
preferred Stock, $.01 par value, and shares of any other class or
series of the Corporation's stock (other than Common Stock) which by
its terms is neither subordinate nor superior to or in preference of
the Series E Preferred Stock in any distribution of the
Corporation's assets in connection with the liquidation, dissolution
or winding up of the affairs of the Corporation.
(p) "Preferred Stock" means shares of any series of the
Corporation's Preferred Stock, $.01 par value per share.
(q) "Restricted Payment" means the declaration or making by
the Corporation of any dividends or other distributions (in cash,
property, or otherwise) on, or any payment for the purchase,
redemption or other acquisition of, any shares of Series E Preferred
Stock.
(r) "Securities Act" means the Securities Act of 1933, as
amended, or any successor federal statute.
(s) "Senior Credit Documents" means the Credit Agreement dated
effective August 13, 1996 among the Corporation, NationsBank of
Texas, N.A., as administrative agent, Provident Services, Inc., as
documentation agent, and the "Lenders" named therein, together with
(i) all amendments, restatements, modifications and supplements
thereto, and (ii) all replacements therefor, including (without
limitation) any refinancings of the indebtedness under such Credit
Agreement.
(t) "Series E Preferred Stock" means the series of Preferred
Stock designated by the Corporation as its Series E Preferred Stock,
$.01 par value per share.
(u) "Trading Price" means, on any trading day for the Class A
Common Stock, (i) if the Class A Common Stock is traded on a
national securities exchange on such trading day, then the closing
price on such trading day as reflected in the consolidated trading
tables of the WALL STREET JOURNAL or any other appropriate
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publication, (ii) if the Class A Common Stock is traded
over-the-counter and reported on the NASDAQ National Market System,
then the average of the high and low sales prices on such trading
day as reported in such publication or, if not so published, then as
reported by the NASDAQ National Market System, or (iii) if the Class
A Common Stock is not traded on a national securities exchange or in
the NASDAQ National Market System on such trading day, then the
representative bid and asked prices at the end of such trading day
in such market as reported by NASDAQ.
(v) All accounting terms used herein and not expressly defined
herein shall have the meanings given to them in accordance with
generally accepted accounting principles consistently applied and in
effect as of the date of the relevant calculation.
30. DIVIDENDS.
(a) SERIES E PREFERRED STOCK. The holders of Series E
Preferred Stock, in preference to the holders of Common Stock, shall
be entitled to receive in respect of each such share of Series E
Preferred Stock, but only out of any funds legally available for the
declaration of dividends, cumulative, preferential dividends in cash
at an annual rate equal to the Dividend Rate, payable quarter-
annually on or before the last calendar day of each March, June,
September and December in each year in which the Series E Preferred
Stock is outstanding. Such dividends shall commence to accrue on the
shares of Series E Preferred Stock and be cumulative from and after
the date of issuance of such shares of Series E Preferred Stock and
shall be deemed to accumulate and accrue from day to day thereafter.
So long as any shares of Series E Preferred Stock remain
outstanding, no dividends or distributions (other than dividends or
distributions on Common Stock payable in Common Stock) shall be paid
upon, or declared or set apart for, the Common Stock, nor shall any
Common Stock (other than Common Stock acquired in exchange for, or
out of cash proceeds of, the issue of other Common Stock or out of
cash contributions to the capital of the Corporation) be purchased,
redeemed, retired or otherwise acquired by the Corporation, unless
and until in either case all past due, cumulative dividends on the
then outstanding shares of Series E Preferred Stock for all past
dividend periods shall have been or concurrently shall be paid.
(b) OTHER STOCK. Subject to paragraph (a) above, (i) dividends
may be declared and paid on Common Stock, and (ii) Common Stock may
be purchased, retired or otherwise acquired, when and as determined
by the Board of Directors, out of any funds legally available for
such purposes.
(c) RESTRICTED PAYMENTS. Notwithstanding the foregoing
provisions of this Section 2 and the provisions of Section 3 below,
the Corporation shall not
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declare or pay, and no holder of the Series E Preferred Stock shall
be entitled to receive or retain, any Restricted Payment in respect
of shares of Series E Preferred Stock if, at the time of such
Restricted Payment, such holder has received written notice from any
lender under the Senior Credit Documents, or from the Corporation,
that an event of default (within the meaning of the Senior Credit
Documents) has occurred and is then continuing and that Restricted
Payments should be blocked. Such blockage period shall continue (i)
indefinitely after receipt of any such notice, if the event of
default specified therein results from any default in the payment by
the Corporation of any obligations under any Senior Credit Document,
whether by maturity, acceleration, or otherwise, for so long as such
event of default shall continue, or (ii) in the case of any other
event of default, for a period of 180 days after such holder's
receipt of any such notice. This paragraph does not have the intent
or effect of impairing, as between the Corporation and the holders
of the Series E Preferred Stock, the obligation of the Corporation,
which is unconditional and absolute (subject to the other provisions
hereof), to declare and pay dividends and to redeem shares of Series
E Preferred Stock, at such times and in the manner herein specified.
31. REDEMPTION.
(a) MANDATORY REDEMPTION. As to any shares of Series E
Preferred Stock, on the tenth anniversary of the Initial Issuance
Date for such shares, the Corporation shall redeem all of such
shares of Series E Preferred Stock then outstanding (subject,
however, to the right of the holders of the Series E Preferred Stock
to convert their shares pursuant to Section 5 by providing the
written conversion notice referred to in Section 5(c) below on or
before 30 days prior to the date set for such redemption), at a
redemption price of $1.00 per share, together with all accrued and
unpaid dividends through the effective date of redemption.
(b) OPTIONAL REDEMPTION. As to any shares of Series E
Preferred Stock, at any time during the period commencing on the
fifth anniversary of the Initial Issuance Date for such shares and
ending on the tenth anniversary of such Initial Issuance Date (the
"Optional Redemption Period"), the Corporation, at the option of the
Board of Directors, may redeem from the holders of Series E
Preferred Stock, at a redemption price of $1.00 per share, together
with accrued and unpaid dividends thereon to the date fixed for
redemption, all or any portion of such shares of Series E Preferred
Stock outstanding on such date. Written notice of such redemption of
such shares of Series E Preferred Stock to be so redeemed shall be
mailed, postage prepaid, to the holders of record of the shares to
be so redeemed at their respective addresses then appearing on the
books of the Corporation, not less than 45 nor more than 75 days
prior to the date designated for such redemption, which shall occur
during the Optional Redemption Period. In case the Corporation
intends to redeem less than all of the outstanding shares
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of Series E Preferred Stock which are then eligible for redemption,
the Corporation's notice shall so state and such redemption shall be
made on or pro rata basis in accordance with each holder's
respective holdings of Series E Preferred Stock. Such redemption by
the Corporation shall be subject, however, to the right of each such
holder to convert such holder's shares of Series E Preferred Stock
into shares of Class A Common Stock pursuant to Section 5 by
delivering the written conversion notice referred to in Section 5(c)
at least 15 days prior to the date fixed for redemption.
(c) GENERAL. From and after the effective date of redemption
and the setting aside of the funds necessary for redemption,
notwithstanding that any certificate for shares of Series E
Preferred Stock so called for redemption shall not have been
surrendered for cancellation, the shares to be redeemed shall no
longer be deemed outstanding, and the holders of certificates
representing such shares shall have with respect to such shares no
rights in or with respect to the Corporation except the right to
receive, upon the surrender of such certificates, the redemption
price therefor. Shares of Series E Preferred Stock redeemed by the
Corporation pursuant to this Section 3, or shares of Series E
Preferred Stock otherwise purchased by the Corporation, shall not be
reissued and shall be cancelled and retired in the manner provided
by the laws of the State of Delaware, and no other shares of Series
E Preferred Stock shall be issued in lieu thereof.
32. PREFERENCE ON LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) DEFINITION. A consolidation or merger of the Corporation,
a sale or transfer of substantially all of its assets as an
entirety, or any purchase or redemption of capital stock of the
Corporation of any class, shall not be regarded as "liquidation,
dissolution or winding up of the affairs of the Corporation" within
the meaning of this Section 4.
(b) SERIES E PREFERRED STOCK. During any proceedings for the
voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, the holders of the Series E
Preferred Stock shall be entitled to receive, before any
distribution of the assets of the Corporation shall be made in
respect of any outstanding Junior Stock, and PARI PASSU with any
distribution of assets to the holders of outstanding Parity Stock,
an amount in cash for each share of Series E Preferred Stock equal
to $1.00 together with all accrued and unpaid dividend through the
effective date of such liquidation, dissolution or winding up, or
funds necessary for such payment shall have been set aside in trust
for the account of the holders of the outstanding Series E Preferred
Stock so as to be and continue available therefor. If upon such
liquidation, dissolution or winding up, the assets distributable to
the holders of the Series E Preferred Stock as aforesaid shall be
insufficient to permit the payment to them (together with any
distributions to the holders of Parity Stock) of $1.00 per share
(plus such accrued and unpaid
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dividends), the assets of the Corporation shall be distributed to
the holders of the Series E Preferred Stock and the Parity Stock
ratably until they shall have received the full amount to which they
would otherwise be entitled. If the assets of the Corporation are
sufficient to permit the payment of such amounts to the holders of
the Series E Preferred Stock and the Parity Stock, the remainder of
the assets of the Corporation, if any, after the distributions as
aforesaid shall be distributed and divided ratably among the holders
of the Junior Stock then outstanding according to their respective
shares.
33. CONVERSION. The Series E Preferred Stock shall be convertible into
Class A Common Stock in accordance with the following provisions of
this Section 5.
(a) OPTIONAL CONVERSION. Subject to and upon compliance with
the provisions of this Section 5, each holder of shares of Series E
Preferred Stock shall have the right at such holder's option, at any
time or from time to time from, to convert all or any part of his or
her shares of Series E Preferred Stock into fully paid and
nonassessable shares of Class A Common Stock, at the Conversion
Price in effect on the Conversion Date, upon the terms hereinafter
set forth.
(b) CONVERSION PRICE. The shares of Series E Preferred Stock
shall be convertible into the number of shares of Class A Common
Stock as is determined by multiplying the number of shares of Series
E Preferred Stock to be converted by a fraction, the numerator of
which is $1.00 and the denominator of which is the Conversion Price
in effect on the Conversion Date.
(c) MECHANICS OF CONVERSION. The holder of any shares of
Series E Preferred Stock may exercise the optional conversion right
specified in paragraph (a) above by surrendering to the Corporation
or any transfer agent of the Corporation the certificate or
certificates for the shares to be converted, accompanied by written
notice stating that the holder elects to convert all or a specified
portion of the shares represented thereby. Optional conversion under
paragraph (a) shall be deemed to have been effected on the date when
notice of an election to convert and certificates for the shares to
be converted has been delivered; any such date is referred to herein
as the "Conversion Date". As promptly as practicable thereafter the
Corporation shall issue and deliver to or upon the written order of
such holders a certificate or certificates for the number of full
shares of Class A Common Stock to which such holders are entitled
rounded down to the next whole share as provided in paragraph (d)
below. The person in whose name the certificate or certificates of
Class A Common Stock are to be issued shall be deemed to have become
a holder of record of such Class A Common Stock on the Conversion
Date.
(d) FRACTIONAL SHARES. No fractional shares of Class A Common
Stock or scrip shall be issued upon conversion of shares of Series E
Preferred Stock.
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Instead of any fractional shares of Class A Common Stock which would
otherwise be issuable upon conversion of any shares of Series E
Preferred Stock, the number of full shares of Class A Common Stock
issuable upon conversion thereof shall be reduced to the next lowest
number of whole shares, and the Corporation will pay a cash
adjustment in respect of any surrendered shares of Series E
Preferred Stock not converted into Class A Common Stock in an amount
equal to $1.00 per share of Series E Preferred Stock.
(e) CONVERSION PRICE ADJUSTMENTS. The Conversion Base Price
shall be subject to adjustment from time to time as follows:
(i) CERTAIN ISSUANCES OF EQUITY STOCK. If, as to any
shares of Series E Preferred Stock, at any time following the
Initial Issuance Date for such shares, and while the
Conversion Price is based upon the Conversion Base Price, the
Corporation issues any Class A Common Stock, or any security
or evidence of indebtedness which is convertible or exer-
cisable into or exchangeable for Class A Common Stock
(including, without limitation, any Class B Common Stock or
any Preferred Stock), or any warrant, option or other right to
subscribe for or purchase Class A Common Stock or any security
or evidence of indebtedness which is convertible or
exchangeable for Class A Common Stock (hereinafter, "Equity
Stock"), other than Excluded Stock (as defined in clause (D)
below), for a consideration per share less than the Baseline
Price, then the Conversion Base Price shall immediately be
reduced to a price per share determined by multiplying the
Conversion Base Price then in effect by a fraction, the
numerator of which is an amount equal to the sum of (x) the
number of shares of Equity Stock of the Corporation
outstanding immediately prior to such issue or sale multiplied
by the Baseline Price plus (y) the consideration, if any,
received by the Corporation upon such issue or sale, and the
denominator of which is the total number of shares of Equity
Stock of the Corporation outstanding immediately after such
issue or sale multiplied by the Baseline Price. The number of
shares of Equity Stock outstanding at any given time for the
purposes of the foregoing computation means the shares of
Class A Common Stock outstanding together with all shares of
Class A Common Stock issuable upon conversion or exercise of
any such Equity Stock, excluding any shares of Equity Stock
previously outstanding that have been reacquired by the
Corporation and constitute treasury shares.
For purposes of any adjustment of the Conversion Base
Price pursuant to this subparagraph (i) of this Section 5(e),
the following provisions shall be applicable:
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(A) CASH. In the case of the issuance of Equity
Stock for cash, the amount of the consideration received
by the Corporation shall be deemed to be the amount of
the cash proceeds received by the Corporation for such
Equity Stock before deducting therefrom any discounts,
commissions, taxes, legal and accounting fees or other
expenses allowed, paid or incurred by the Corporation in
connection with the issuance and sale thereof.
(B) CONSIDERATION OTHER THAN CASH. In the case of
the issuance of Equity Stock (other than as described in
clause (C) below) for a consideration in whole or in
part other than cash, including securities acquired in
exchange therefor (other than securities by their terms
so exchangeable), the consideration other than cash
shall be deemed to be the fair market value thereof as
reasonably determined by the Board of Directors in good
faith.
(C) OPTIONS AND CONVERTIBLE SECURITIES, ETC. In
the case of the issuance of (i) options, warrants or
other rights to purchase or acquire Class A Common Stock
or other Equity Stock (whether or not at the time
exercisable), (ii) securities which by their terms are
convertible or exercisable into or exchangeable for
Class A Common Stock or other Equity Stock (whether or
not at the time so convertible, exercisable or
exchangeable) or (iii) options, warrants or rights to
purchase such convertible or exchangeable securities
(whether or not at the time exercisable):
(1) the aggregate maximum number of shares
of Class A Common Stock deliverable upon exercise
of such options, warrants or other rights to
purchase or acquire Class A Common Stock shall be
deemed to have been issued at the time such
options, warrants or rights were issued and for a
consideration equal to the aggregate consideration
(determined in the manner provided in clauses (A)
and (B) above), if any, received by the
Corporation upon the issuance of such options,
warrants or rights plus the aggregate minimum
purchase price provided in such options, warrants
or rights for the Class A Common Stock covered
thereby;
(2) the aggregate maximum number of shares
of Class A Common Stock deliverable upon
conversion of or in exchange for any such
convertible or exchangeable securities, or upon
the exercise of options, warrants or other rights
to purchase or acquire such convertible or
exchangeable securities and the subsequent
conversion or
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exchange thereof, shall be deemed to have been
issued at the time such securities were issued or
such options, warrants or rights were issued and
for a consideration equal to the consideration, if
any, received by the Corporation for any such
securities and related options, warrants or rights
(excluding any cash received on account of accrued
interest or accrued dividends), plus the
additional consideration, if any, to be received
by the Corporation upon the conversion or exchange
of such securities and the exercise of any related
options, warrants or rights (the consideration in
each case to be determined in the manner provided
in clauses (A) and (B) above);
(3) on any change in the number of shares of
Class A Common Stock deliverable upon exercise of
any such options, warrants or rights or conversion
of or exchange for such convertible or
exchangeable securities or any change in the
consideration to be received by the Corporation
upon such exercise, conversion or exchange,
including, but not limited to, a change resulting
from the anti-dilution provisions thereof, the
Conversion Base Price as then in effect shall
forthwith be readjusted to such Conversion Base
Price as would have been obtained had an
adjustment been made upon the issuance of such
options, warrants or rights not exercised prior to
such change, or securities not converted or
exchanged prior to such change, on the basis of
the terms of such options, warrants, rights or
convertible or exchangeable securities as so
changed;
(4) on the expiration or cancellation of any
such options, warrants or rights, or the
termination of the right to convert or exchange
such convertible or exchangeable securities, if
the Conversion Base Price shall have been adjusted
upon the issuance thereof, the Conversion Base
Price shall forthwith be readjusted to such
Conversion Base Price as would have been obtained
had an adjustment been made upon the issuance of
such options, warrants, rights or securities on
the basis of the issuance of only the number of
shares of Class A Common Stock actually issued
upon the exercise of such options, warrants or
rights, or upon the conversion or exchange of such
securities; and
(5) regardless of whether the Conversion
Base Price shall have been adjusted upon the
issuance of any
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such options, warrants, rights or convertible or
exchangeable securities, no further adjustment of
the Conversion Base Price shall be made for the
actual issuance of Class A Common Stock upon the
exercise, conversion or exchange thereof.
(D) EXCLUDED STOCK. For purposes hereof, "Excluded
Stock" means, for purposes of determining whether there
shall be any adjustment in the Conversion Base Price
pursuant to this subparagraph (i) as to any shares of
Series E Preferred Stock, any shares of Common Stock
that are issued or reserved for issuance by the
Corporation (i) upon conversion, exercise or exchange of
any Equity Stock that is outstanding on the Initial
Issuance Date for such Shares; (ii) pursuant to a stock
dividend, subdivision or split-up covered by
subparagraph (ii) or (iii) of this Section 5(e); and
(iii) upon exercise of options issued to employees or
directors of the Corporation or its subsidiaries,
provided that (x) the exercise price thereof is not less
than the fair market value per share of the Class A
Common Stock determined in good faith by the Board of
Directors at the time such options are granted, and (y)
options covering no more than five percent (5%) of the
fully diluted Class A Common Stock (assuming the full
conversion, exercise and exchange of all Equity Stock
then outstanding into shares of Class A Common Stock)
may be issued under this clause (D) without causing an
adjustment in the Conversion Base Price herein
described.
(ii) STOCK DIVIDENDS. If the number of shares of Class
A Common Stock outstanding at any time after the issuance of
any Series E Preferred Stock is increased by a stock dividend
payable in shares of Class A Common Stock or by a subdivision
or split-up of shares of Class A Common Stock, and if the
Conversion Price then in effect is based upon the Conversion
Base Price, then immediately after the record date fixed for
the determination of holders of Class A Common Stock entitled
to receive such stock dividend or the effective date of such
subdivision or split-up, as the case may be, the Conversion
Base Price shall be appropriately decreased so that the
holders of any shares of Series E Preferred Stock shall be
entitled to receive the number of shares of Class A Common
Stock of the Corporation which they would have owned
immediately following such action had such shares of Series E
Preferred Stock been converted immediately prior thereto.
(iii) COMBINATION OF STOCK. If the number of shares of
Class A Common Stock outstanding at any time after issuance of
any class of
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Series E Preferred Stock is decreased by a combination of the
outstanding shares of Class A Common Stock, and if the
Conversion Price then in effect is based upon the Conversion
Base Price then, immediately after the effective date of such
combination, the Conversion Base Price shall be appropriately
increased so that the holders of any shares of Series E
Preferred Stock shall be entitled to receive the number of
shares of Class A Common Stock of the Corporation which they
would have owned immediately following such action had such
shares of Series E Preferred Stock been converted immediately
prior thereto.
(iv) REORGANIZATIONS. In case of any capital
reorganization of the Corporation, or of any reclassification
of the Class A Common Stock, or in case of the consolidation
of the Corporation with or the merger of the Corporation with
or into any other corporation, partnership or other business
entity in which the Corporation is not the survivor, or of the
sale, lease or other transfer of all or substantially all of
the assets of the Corporation to any other corporation,
partnership or other business entity, each share of Series E
Preferred Stock shall, after such capital reorganization,
reclassification, consolidation, merger, sale or lease, be
convertible into the number of shares of stock or other
securities or property to which the Class A Common Stock
issuable (at the time of such capital reorganization,
reclassification, consolidation, merger, sale or lease) upon
conversion of such share of Series E Preferred Stock would
have been entitled upon such capital reorganization,
reclassification, consolidation, merger, sale or lease in
place of (or in addition to, in the case of any such event
after which Class A Common Stock remains outstanding) the
shares of Class A Common Stock into which such share of Series
E Preferred Stock would otherwise have been convertible; and
in any such case, if necessary, the provisions set forth
herein with respect to the rights and interests thereafter of
the holders of the shares of Series E Preferred Stock shall be
appropriately adjusted so as to be applicable, as nearly as
may reasonably be, to any share of stock or other securities
or property thereafter deliverable on the conversion of the
shares of Series E Preferred Stock. The subdivision or
combination of shares of Class A Common Stock issuable upon
conversion of shares of Series E Preferred Stock at any time
outstanding into a greater or lesser number of shares of Class
A Common Stock (whether with or without par value) shall not
be deemed to be a reclassification of the Class A Common Stock
of the Corporation for the purposes of this subparagraph (iv).
(v) ROUNDING OF CALCULATIONS; MINIMUM ADJUSTMENT. All
calculations under this paragraph (e) shall be made to the
nearest cent or to the nearest one hundredth (1/100th) of a
share, as the case may be. Any provision of this paragraph (e)
to the contrary notwithstanding, no
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adjustment in the Conversion Base Price shall be made if the
amount of such adjustment would be less than $0.01, but any
such amount shall be carried forward and an adjustment with
respect thereto shall be made at the time of and together with
any subsequent adjustment which, together with such amount and
any other amount or amounts so carried forward, shall
aggregate $0.01 or more.
(vi) TIMING OF ISSUANCE OF ADDITIONAL CLASS A COMMON
STOCK UPON CERTAIN ADJUSTMENTS. In any case in which the
provisions of this paragraph (e) requires that an adjustment
shall become effective immediately after a record date for an
event, the Corporation may defer until the occurrence of such
event issuing to the holder of any shares of Series E
Preferred Stock converted after such record date and before
the occurrence of such event the additional shares of Class A
Common Stock or other property issuable or deliverable upon
exercise by reason of the adjustment required by such event
over and above the shares of Class A Common Stock or other
property issuable or deliverable upon such conversion before
giving effect to such adjustment; PROVIDED, HOWEVER that the
Corporation upon request shall deliver to such holder a due
bill or other appropriate instrument evidencing such holder's
right to receive such additional shares or other property, and
such cash, upon the occurrence of the event requiring such
adjustment.
(f) CERTAIN ADJUSTMENTS. In case of any adjustment in
the Conversion Base Price pursuant to this Section 5(e) at a
time when the amount of the Conversion Base Price is due to
increase at one or more future dates in accordance with the
schedule contained within the definition of such term, then in
addition to the adjustment of the Conversion Base Price then
in effect, each subsequent increase therein contained within
such definition shall be appropriately adjusted to give effect
to provisions of this Section 5(e). In case, at a time when
the Conversion Price is based upon the Market Price, the
record date for any action of the type described subparagraph
(ii), (iii) or (iv) above occurs prior to a Conversion Date
but after one or more of the trading days for which the
Trading Price therefor is determined, then the Trading Price
for each trading day occurring prior to such record date shall
be appropriately adjusted in order to give effect to such
action, in the manner provided in said subparagraph (ii),
(iii) or (iv), as the case may be.
(g) STATEMENT REGARDING ADJUSTMENTS. Whenever the Conversion
Base Price shall be adjusted as provided in paragraph (e), the
Corporation shall forthwith file, at the office of any transfer
agent for the Series E Preferred Stock and at the principal office
of the Corporation, a statement showing in detail the facts
requiring such adjustment and the Conversion Base Price that shall
be in effect
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after such adjustment, and the Corporation shall also cause a copy
of such statement to be sent by mail, first class postage prepaid,
to each holder of the Series E Preferred Stock at his or her address
appearing on the Corporation's records. Each such statement shall be
signed by the Corporation's chief financial officer. Where
appropriate, such copy may be given in advance and may be included
as part of a notice required to be mailed under the provisions of
subparagraph (h) below.
(h) NOTICE TO HOLDERS. In the event the Corporation proposes
to take any action of the type described in subparagraph (i), (ii),
(iii) or (iv) of paragraph (e) above, the Corporation shall give
notice to each holder of the Series E Preferred Stock in the manner
set forth in subparagraph (f) above, which notice shall specify the
record date, if any, with respect to any such action and the
approximate date on which such action is to take place. Such notice
shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the
Conversion Base Price and the number, kind or class of shares or
other securities or property which shall be deliverable or
purchasable upon the occurrence of such action or deliverable upon
conversion of the Series E Preferred Stock. In the case of any
action which would require the fixing of a record date, such notice
shall be given at least 10 days prior to the date so fixed, and in
case of all other action, such notice shall be given at least 15
days prior to the taking of such proposed action.
(i) COSTS. The Corporation shall pay all documentary, stamp,
transfer or other transactional taxes attributable to the issuance
or delivery of shares of Class A Common Stock of the Corporation or
other securities or property upon conversion of the shares of Series
E Preferred Stock; PROVIDED, HOWEVER, that the Corporation shall not
be required to pay any taxes which may be payable in respect of any
transfer involved in the issuance or delivery of any certificate for
such shares or securities in the name other than that of the holder
of the shares of Series E Preferred Stock in respect of which such
shares are being issued.
(j) RESERVATION OF SHARES. The Corporation shall reserve at
all times so long as any shares of Series E Preferred Stock remain
outstanding, free from preemptive rights, out of its treasury stock
or its authorized but unissued shares of Class A Common Stock, or
both, solely for the purpose of effecting the conversion of shares
of Series E Preferred Stock, sufficient shares of Class A Common
Stock to provide for the conversion of all outstanding shares of
Series E Preferred Stock and set aside and keep available any other
property deliverable upon conversion of all outstanding shares of
Series E Preferred Stock.
(k) APPROVALS. If any shares of Class A Common Stock or other
securities to be reserved for the purpose of conversion of shares of
Series E Pre-
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ferred Stock require registration with or approval of any
governmental authority under any Federal or state law before such
shares or other securities may be validly issued or delivered upon
conversion, then the Corporation will in good faith and as
expeditiously as possible use its commercially reasonable efforts to
secure such registration or approval, as the case may be. The
foregoing shall not be interpreted to require to Corporation to
cause the registration of such shares under the Securities Act or
the securities or blue laws of any state.
(l) VALID ISSUANCE. All shares of Class A Common Stock or
other securities which may be issued upon conversion of the shares
of Series E Preferred Stock will upon issuance by the Corporation be
duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issuance thereof
and the Corporation shall take no action which will cause a contrary
result.
34. VOTING RIGHTS.
(a) GENERAL. At any annual or special meeting of stockholders
or otherwise in respect of any matter submitted for the vote of
stockholders generally, the holders of the Series E Preferred Stock
shall be entitled to such number of votes (rounded down to the
nearest whole vote) as shall be determined by multiplying (1) vote
for each share of Series E Preferred Stock so held by a fraction,
the numerator of which is $1.00 and the denominator of which is the
Conversion Price in effect on the record date for determining
stockholders entitled to vote on such matter.
(b) SPECIAL VOTING REQUIREMENTS. Without limiting the
generality of paragraph (a) above, the Corporation shall not,
without the consent of the holders of at least a majority of the
outstanding shares of Series E Preferred Stock, voting together as a
single class, either (i) amend, alter or repeal any provision of the
Corporation's Certificate of Incorporation or Bylaws or this
Certificate of Designation, in any event so as to adversely affect
the rights or powers of any of the Series E Preferred Stock as
provided herein, or (ii) issue any Preferred Stock or other class or
series of the Corporation's capital stock that is senior or
preferential to the Series E Preferred Stock in any distribution of
the Corporation's assets in connection with the liquidation,
dissolution or winding up of the affairs of the Corporation.
35. REGISTRATION RIGHTS. Subject to paragraph (h) below and the other
provisions of this Section 7, the holders of the Series E Preferred
Stock shall be entitled to have their respective shares of Class A
Common Stock issuable upon conversion of their Series E Preferred
Stock included in any registration of Class A Common Stock under the
Securities Act proposed by the Corporation.
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(a) INCIDENTAL RIGHTS. If at any time or from time to time the
Corporation proposes to file with the Securities and Exchange
Commission (the "Commission") a registration statement (whether on
Form S-1, S-2 or S-3 or any equivalent form then in effect) for the
registration under the Securities Act of any shares of Class A
Common Stock for sale to the public by the Corporation or on behalf
of a shareholder of the Corporation for cash (excluding any shares
of Common Stock issuable by the Corporation upon the exercise of
employee or director stock options or in connection with the merger
or consolidation of the Corporation or one of its subsidiaries with
one or more other corporations if the Corporation is the surviving
corporation), the Corporation shall give each holder of the Series E
Preferred Stock at least 30 days' prior written notice of the filing
of the proposed registration statement. The notice shall include a
list of the states and foreign jurisdictions, if any, in which the
Corporation intends to qualify such shares, and shall also include
the Corporation's estimate of the range of the offering price per
share of Class A Common Stock. On the written request of any holder
of the Series E Preferred Stock received by the Corporation within
15 days after the date of the Corporation's notice, the Corporation
shall, subject to the conditions and in accordance with the
procedures set forth in paragraphs (b) and (c) below, and at its own
expense as provided in paragraph (e) below, include in the coverage
of such registration statement and qualify for sale under the blue
sky or securities laws of the various states, the number of shares
(but not less than 5,000 shares, subject to adjustment to give
effect to any stock dividends, splits or combinations,
recapitalizations or other similar corporate events) of Class A
Common Stock (herein called the "Specified Shares") held (or to be
held upon conversion of the Series E Preferred Stock) and so
requested to be registered by each such holder; provided that if the
managing underwriter for the Corporation indicates its belief in
writing that the effect of including in the coverage of such
registration statement all or part of the Specified Shares and the
shares of Class A Common Stock requested to be so included by other
stockholders having contractual registration rights ("Other
Requesting Stockholders") will materially and adversely affect the
sale of the shares of Class A Common Stock proposed to be sold by
the Corporation (which statement of the managing underwriter shall
also state the maximum number of shares (herein called the "Maximum
Shares"), if any, which can be sold by such all such holders without
materially and adversely affecting the sale of the shares proposed
to be sold by the Corporation), then the number of Specified Shares
which the holders of the Series E Preferred Stock and the Other
Requesting Stockholders shall collectively have the right to include
in such registration statement shall be reduced to the number of
Maximum Shares set forth in such statement of the managing
underwriter, such reduction to be effected on a pro rata basis in
accordance with the number of all such shares requested to be so
registered by the holders of the Series E Preferred Stock and the
Other Requesting Stockholders.
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Except as provided in paragraph (c) below, in no event shall
the Corporation be required to amend any registration statement
filed pursuant to this Section 7 after it has become effective or to
amend or supplement any prospectus to permit the continued
disposition of shares of Class A Common Stock registered under any
registration statement.
The Corporation shall have the right to select any
underwriters, including the managing underwriter, of any public
offering of shares of Class A Common Stock subject to the provisions
of this paragraph (a). Nothing in this paragraph (a) shall create
any liability on the part of the Corporation to the holders of the
Series E Preferred Stock if the Corporation for any reason should
decide not to file such a registration statement.
The Corporation may withdraw any registration statement and
abandon any proposed offering initiated by the Corporation without
the consent of any holder of the Series E Preferred Stock,
notwithstanding the request of any such holder to participate
therein in accordance with this paragraph (a), if the Corporation
determines that such action is in the best interests of the
Corporation.
(b) CERTAIN REGISTRATION CONDITIONS. Any holder of Series E
Preferred Stock requesting registration of Class A Common Stock into
which such holder's Series E Preferred Stock is convertible pursuant
to paragraph (a) of this Section 7 is hereafter referred to as a
"Selling Stockholder." Anything in this Agreement to the contrary
notwithstanding, the Corporation shall not be required to effect a
registration of any Class A Common Stock of any Selling Stockholder
pursuant to paragraph (a) of this Section 7, or file any
post-effective amendment thereto:
(i) unless such Selling Stockholder agrees (x) to sell
and distribute a portion or all of his Class A Common Stock in
accordance with the customary plan or plans of distribution
adopted by and through underwriters, if any, acting for the
Corporation, and (y) to bear a pro rata share of underwriter's
discounts and commissions;
(ii) unless the Corporation and the underwriters for
the Corporation shall have received from such Selling
Stockholder all such information as the Corporation and such
underwriters may reasonably request from him concerning such
Selling Stockholder to enable the Corporation to include in
the registration statement all material facts required to be
disclosed therein;
(iii) unless such Selling Stockholder is then entitled
to convert his shares of Series E Preferred Stock into Class A
Common Stock and such Selling Stockholder in fact delivers the
notice to elect to convert the Series E Preferred Stock into
Class A Common Stock prior to or
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contemporaneously with the notice of such Selling Stockholder
under paragraph (a) hereof; and
(iv) unless such Selling Stockholder, at the request of
the Corporation or its managing underwriter, agrees or
acknowledges that such Selling Stockholder (x) has a present
intention to sell such shares; (y) agrees to execute all
consents, powers of attorney, registration statements and
other documents required in order to cause such registration
statement to become effective; and (z) agrees, if the offering
is at the market, to give the Corporation written notice of
the first bona fide offering of such shares and to use the
prospectus forming a part of such registration statement for
only a period of 90 days (or such longer period provided for
in paragraph (c) below) unless such registration statement is
on a form that complies with Rule 415.
(c) COVENANTS AND PROCEDURES. If the Corporation becomes
obligated under the provisions of paragraph (a) of this Section 7 to
effect registration of shares of Class A Common Stock on behalf of
any Selling Stockholder, the following shall apply:
(i) The Corporation, at its own expense as provided
in paragraph (e), shall prepare and file with the Commission a
registration statement covering such shares of Class A Common
Stock and use its best efforts to cause such registration
statement to become effective; and the Corporation will file
such post-effective amendments to such registration statement
(and use its best efforts to cause them to become effective)
and such supplements as are necessary so that current
prospectuses are at all times available for a period of at
least 90 days after the effective date of such registration
statement or for such longer period, not to exceed 180 days,
as may be required by the Corporation or the managing
underwriter under the plan or plans of distribution set forth
in such registration statement. Each Selling Stockholder shall
promptly provide the Corporation with such information with
respect to such Selling Stockholder's shares of Class A Common
Stock to be so registered and, if applicable, the proposed
terms of the offering thereof as is required for such
registration. Further, if the shares of Class A Common Stock
to be covered by the registration statement are not to be sold
to or through underwriters acting for the Corporation, the
Corporation shall (x) deliver to each Selling Stockholder as
promptly as practicable as many copies of preliminary
prospectuses as such Selling Stockholder may reasonably
request, and such Selling Stockholder shall keep a written
record of the distribution of such preliminary prospectuses
and shall refrain from delivery of such preliminary
prospectuses in any manner or under any circumstances which
would violate the Securities Act or the securities laws
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of any other jurisdiction, including the various states of the
United States, (y) deliver to each Selling Stockholder, as
soon as practicable after the effective date of the
registration statement, and from time to time thereafter
during such 90-day period, or such longer period as is herein
provided, as many copies of the prospectuses required to be
delivered in connection with the sale of shares of Class A
Common Stock registered under the registration statement as
such Selling Stockholder may reasonably request, and (z) in
case of the happening, after the effective date of such
registration statement and during such 90-day period (or such
longer period specified above), of any event or occurrence
which would be set forth in an amendment of or supplement to
such prospectus to make any statements therein not misleading
or to correct any misleading omissions, give each Selling
Stockholder written notice thereof and prepare and furnish to
such Selling Stockholder, in such quantities as he may
reasonably request, copies of such amended prospectus or of
such supplement to be attached to the prospectus in order that
the prospectus, as so amended or supplemented, will not
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(ii) On or prior to the date on which the registration
statement is declared effective, the Corporation shall use its
best efforts to register or qualify, and cooperate with each
Selling Stockholder, the underwriter or underwriters, if any,
and their counsel, in connection with the registration or
qualification of the Class A Common Stock covered by the
registration statement for offer and sale under the securities
or blue sky laws of each state and other jurisdiction of the
United States as such Selling Stockholder or underwriter
reasonably requests, to use its best efforts to keep each such
registration or qualification effective, including through new
filings, or amendments or renewals, during the period such
registration statement is required to be kept effective and to
do any and all other acts or things necessary or advisable to
enable the disposition in all such jurisdictions of the Class
A Common Stock covered by the applicable registration
statement; provided that the Corporation will not be required
to qualify generally to do business in any jurisdiction where
it is not then so qualified.
(iii) The Corporation shall use its best efforts to
cause all of each Selling Stockholder's Class A Common Stock
included in such registration statement to be listed, by the
date of the first sale of such Class A Common Stock pursuant
to such registration statement, on each securities exchange on
which the Class A Common Stock of the Corporation is then
listed or proposed to be listed, if any.
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(iv) The Corporation shall make generally available to
each Selling Stockholder and any underwriter participating in
the offering conducted pursuant to the registration statement
an earnings statement satisfying the provisions of Section
11(a) of the Securities Act no later than 45 days after the
end of the 12-month period beginning with the first day of the
Corporation's first fiscal quarter commencing after the
effective date of the registration statement, which earnings
statement shall cover said 12-month period, which requirement
will be deemed to be satisfied if the Corporation timely files
complete and accurate information on Forms 10- Q, 10-K, and
8-K under the Securities Exchange Act of 1934, as amended, and
otherwise complies with Rule 158 under the Securities Act as
soon as feasible.
(v) The Corporation shall cooperate with each Selling
Stockholder and the managing underwriter or underwriters, if
any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends)
representing Class A Common Stock to be sold under the
registration statement, and enable such securities to be in
such denominations and registered in such names as the
managing underwriter or underwriters, if any, or such Selling
Stockholder may request, subject to the underwriters'
obligation to return any certificates representing securities
not sold.
(vi) The Corporation shall use its best efforts to
cause each Selling Stockholder's Class A Common Stock covered
by the registration statement to be registered with or
approved by such other governmental agencies or authorities
within the United States as may be necessary to enable such
Selling Stockholder or the underwriter or underwriters, if
any, to consummate the disposition of such Class A Common
Stock.
(vii) The Corporation shall make available for
inspection by each Selling Stockholder, any underwriter
participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent
retained by such Selling Stockholder or any such underwriter
(collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the
Corporation, as shall be reasonably necessary to enable them
to exercise their due diligence, responsibility, and cause the
Corporation's officers, directors and employees to supply all
nonconfidential information reasonably requested by any such
Inspector in connection with such registration statement. As a
condition to providing such access, the Corporation may
require that any and all Inspectors execute and deliver
confidentiality agreements, in form and substance acceptable
to the Corporation, and that confidentiality procedures be
observed, all with respect to such information.
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(viii) The Corporation shall use its best efforts to
obtain a "cold comfort" letter from the Corporation's
independent public accountants, and an opinion of counsel for
the Corporation, each in customary form and covering such
matters of the type customarily covered by cold comfort
letters and opinions of counsel in connection with public
offerings of securities, as each Selling Stockholder
reasonably requests.
(d) INDEMNIFICATION.
(i) INDEMNIFICATION BY THE CORPORA-TION. In the event
of any registration under the Securities Act pursuant to this
Section 7 of shares of Class A Common Stock held by any
Selling Stockholder, the Corporation will hold harmless each
Selling Stockholder and each underwriter of such securities
and each other person, if any, who controls each Selling
Stockholder or such underwriter within the meaning of the
Securities Act, against any losses, claims, damages or
liabilities (including legal fees and costs of court), joint
or several, to which such Selling Stockholder or such
underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained, on the
effective date thereof, in any registration statement under
which such securities were registered under the Securities
Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
will reimburse each Selling Stockholder and each such
underwriter and each such controlling person for any legal or
any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage
or liability; provided, however, that the Corporation shall
not be liable to any Selling Stockholder or his underwriters
or controlling persons in any such case to the extent that any
such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration
statement, preliminary prospectus or final prospectus or such
amendment or supplement in reliance upon and in conformity
with information furnished to the Corporation through a
written instrument duly executed by such Selling Stockholder
or such underwriter specifically for use in the preparation
thereof.
(ii) INDEMNIFICATION BY SELLING STOCK-HOLDERS. It shall
be a condition precedent to the obligation of the Corporation
to include in any registration statement any shares of Class A
Common Stock then held by
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a Selling Stockholder that the Corporation shall have received
an undertaking reasonably satisfactory to it and its counsel
from such Selling Stockholder to severally indemnify and hold
harmless (in the same manner and to the same extent as set
forth in subparagraph (i) above) the Corporation, each
director of the Corporation, each officer of the Corporation
who shall sign such registration statement, each underwriter
of such securities and any person who controls the Corporation
or such underwriter within the meaning of the Securities Act,
with respect to any statement or omission from such
registration statement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement
thereto, if such statement or omission was made in reliance
upon and in conformity with information furnished to the
Corporation through a written instrument duly executed by such
Selling Stockholder specifically for use in the preparation of
such registration statement, preliminary prospectus or final
prospectus or such amendment or supplement thereto.
(iii) INDEMNIFICATION PROCEDURES. Promptly after receipt
by an indemnified party of notice of the commencement of any
action involving a claim referred to in the preceding
subparagraphs (i) and (ii), such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying
party, give written notice to the indemnifying party of the
commencement of such action. In case any such action is
brought against an indemnified party, the indemnifying party
will be entitled to participate in and to assume the defense
thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume
the defense thereof, and provided that the indemnifying party
in fact assumes such defense, the indemnifying party will not
be liable to such indemnified party for any legal or other
expenses incurred after the date of such notice by the latter
in connection with the defense thereof. Whether or not such
defense is assumed by the indemnifying party, the indemnifying
party will not be subject to any liability for any settlement
made without its consent. No indemnifying party will consent
to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a
release from all liability in respect of such claim or
litigation.
(iv) CONTRIBUTION. If the indemnification provided for
in this paragraph (d) from the indemnifying party is
unavailable to an indemnified party hereunder in respect of
any losses, claims, damages, liabilities or expenses referred
to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to
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reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which
resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to,
among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or a
material omission, has been made by, or relates to information
supplied by, such indemnifying party or indemnified parties,
and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action.
The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with
any investigation or proceeding. For purposes of the
foregoing, it would not be just and equitable if contribution
pursuant to this paragraph (d) were determined by pro rata
allocation or by any other method of allocation which does not
take account of the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding the
provisions of this subparagraph (iv), no Selling Stockholder
shall be required to contribute any amount in excess of the
amount by which the total price at which the Class A Common
Stock of such Selling Stockholder was offered to the public
exceeds the amount of any damages which such Selling
Stockholder has otherwise been required to pay by reason of
such untrue statement or omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
(e) EXPENSES. All expenses incurred by the Corporation in
connection with any registration statement covering shares of Class
A Common Stock offered by the Selling Stockholders, including,
without limitation, all registration and filing fees (including all
expenses incident to filing with the National Association of
Securities Dealers, Inc.), printing expenses, fees and disbursements
of counsel for the Corporation and of its independent certified
public accountants, the reasonable fees and disbursements of one
counsel for collectively all Selling Stockholders and Other
Requesting Stockholders whose stock is included in such
registration, and the expense of qualifying such shares under state
blue sky laws, shall be borne by the Corporation; provided, however,
that all underwriter's discounts and commissions relating to the
shares of Class A Common Stock to be sold by the Selling
Stockholders shall be borne by the Selling Stockholders.
(f) DISPOSITIONS DURING REGISTRATION. Upon written request by
the Corporation, the Selling Stockholders will agree, upon the
registration of any of each such Selling Stockholder's shares of
Class A Common Stock or the Class A
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Common Stock issued by the Corporation, not to sell or otherwise
dispose of any shares of Stock (other than Class A Common Stock
covered by such registration, which may be sold in accordance with
the plan or plans of distribution described in the registration
statement) owned by each such Selling Stockholder for a period of 90
days following the effective date of such registration statement, or
for such longer period (not to exceed 180 days) as may be required
under the plan or plans of distribution set forth in such
registration statement.
(g) RIGHTS TRANSFERABLE. The foregoing registration rights and
benefits set forth in this Section 7, including indemnification by
the Corporation, shall be transferable by each holder of the Series
E Preferred Stock in connection with the transfer by any such holder
of Series E Preferred Stock convertible into not less than 10,000
shares (subject to adjustment to give effect to any stock dividends,
splits or combinations, recapitalization or other similar corporate
events) of Class A Common Stock, otherwise than pursuant to a
registration statement of the Corporation in connection with a
public offering of Class A Common Stock.
(h) TERM OF REGISTRATION RIGHTS. The registration rights
granted pursuant to this Section 7 shall be effective for a period
commencing upon the Initial Issuance Date and ending on (i) as to
any holder of Series E Preferred Stock, upon either (A) such
holder's written consent, (B) the date such holder holds, together
with such holder's Affiliates, less than 10,000 shares (subject to
adjustment as described in paragraph (g) above) of Class A Common
Stock determined on a fully diluted basis, or (c) the date such
holder is able to dispose of all shares of Class A Common Stock that
such holder may acquire upon conversion of the Series E Preferred
Stock within a single three-month period under Rule 144 promulgated
under the Securities Act; and (ii) as to all holders of the Series E
Preferred Stock, on December 31, 2006. For purposes of the
foregoing, an "Affiliate" of a person shall mean (a) any member of
the immediate family of such person, including parents, siblings,
spouse and lineal descendants (including those by adoption); the
parents, siblings, spouse, or lineal descendants (including those by
adoption) of such immediate family member; and in any such case any
trust whose primary beneficiary is such person or one or more
members of such immediate family and/or such person's lineal
descendants; (b) the legal representative or guardian of such person
or of any such immediate family members in the event such person or
any such immediate family members becomes mentally incompetent; and
(c) any person, corporation or other entity controlling, controlled
by or under common control with such person. As used in this
definition, the term "control", including the correlative terms
"controlling", "controlled by" and "under common control with" shall
mean possession, directly or indirectly, of the power to direct or
cause the direction of management or policies (whether through
ownership of securities or any partnership or other ownership
interest, by contract or otherwise) of a person, corporation or
other entity.
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36. EXCLUSION OF OTHER RIGHTS. Unless otherwise required by law, the
shares of Series E Preferred Stock shall not have any voting powers,
preferences or relative, participating, optional or other special
rights other than those specifically set forth herein.
IN WITNESS WHEREOF, CARRIAGE SERVICES, INC. has caused this
Certificate to be signed by Melvin C. Payne, its President, as of the 30th day
of October, 1996.
CARRIAGE SERVICES, INC.
By:__________________________________
MELVIN C. PAYNE, President
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CERTIFICATE OF DESIGNATION, PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES F PREFERRED STOCK
OF
CARRIAGE SERVICES, INC.
PURSUANT to Section 151(g) of the General Corporation Law of
Delaware, CARRIAGE SERVICES, INC., a corporation organized and existing under
the General Corporation Law of Delaware (herein referred to as the
"Corporation"), DOES HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of Directors of
the Corporation by its Certificate of Incorporation, and pursuant to the
provisions of Section 151(g) of the General Corporation Law of Delaware, such
Board of Directors by written unanimous consent dated October 30, 1996, duly
adopted a resolution providing for the issuance of a series of Twenty Million
(20,000,000) shares of the Corporation's Preferred Stock, $.01 par value per
share, to be designated "Series F Preferred Stock", and fixing the voting
powers, preferences and relative, participating, optional or other rights, and
the qualifications, limitations or restrictions thereof, which resolution is as
follows:
RESOLVED, that pursuant to the authority expressly granted and
vested in the Board of Directors of the Corporation in accordance with the
provisions of its Certificate of Incorporation, there shall be established
and authorized for issuance a series of the Corporation's Preferred Stock,
$.01 par value per share, designated "Series F Preferred Stock" (herein
referred to as "Series F Preferred Stock"), consisting of Twenty Million
(20,000,000) shares, each of the par value of $.01 per share, and having
the voting
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powers, preferences and relative, participating, optional and other
rights, and the qualifications, limitations or restrictions set forth
below:
37. DEFINITIONS. For purposes hereof, the following terms shall have the
following definitions or shall be subject to the following rules of
construction:
(a) "Base Conversion Price" shall mean:
(i) in the case of Designated Preferred Stock, the
following:
(A) $15.00, if the Conversion Date occurs on or
before March 31, 1997;
(B) $16.00, if the Conversion Date occurs between
April 1, 1997 and December 31, 1997, inclusive;
(C) $17.00, if the Conversion Date occurs between
January 1, 1998 and December 31, 1998, inclusive;
(D) $18.00, if the Conversion Date occurs between
January 1, 1999 and December 31, 1999, inclusive;
(E) $19.00, if the Conversion Date occurs between
January 1, 2000 and December 31, 2000, inclusive; and
(F) $20.00, if the Conversion Date occurs between
January 1, 2001 and December 31, 2001, inclusive;
(ii) in the case of all Series F Preferred Stock which is
not Designated Preferred Stock, the following:
(A) $16.00, if the Conversion Date occurs between
on or before December 31, 1997;
(B) $17.00, if the Conversion Date occurs between
January 1, 1998 and December 31, 1998, inclusive;
(C) $18.00, if the Conversion Date occurs between
January 1, 1999 and December 31, 1999, inclusive;
(D) $19.00, if the Conversion Date occurs between
January 1, 2000 and December 31, 2000, inclusive; and
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(E) $20.00, if the Conversion Date occurs between
January 1, 2001 and December 31, 2001, inclusive.
The foregoing shall be subject to adjustment in the
manner provided in Section 5 hereof.
(b) "Board of Directors" means the Board of Directors of the
Corporation.
(c) "Class A Common Stock" means the Corporation's Class A
Common Stock, par value $.01 per share.
(d) "Class B Common Stock" means the Corporation's Class B
Common Stock, par value $.01 per share.
(e) "Common Stock" means, collectively, shares of Class A
Common Stock and Class B Common Stock.
(f) "Conversion Date" has the meaning specified in Section
5(c).
(g) "Conversion Price" means:
(i) if the Conversion Date occurs on or before December
31, 2001, the Base Conversion Price; and
(ii) if the Conversion Date occurs on or after January
1, 2002, the Market Price.
(h) "Designated Preferred Stock" means those shares, if any,
of the outstanding Series F Preferred Stock which are specially
designated by the Board of Directors to constitute "Designated
Preferred Stock" for purposes of the determination of the Base
Conversion Price applicable thereto as determined in accordance with
paragraph (a) above. Any shares to be so designated as Designated
Preferred Stock shall be specially designated as such by resolution
of the Board of Directors and set forth in the minutes of the Board
of Directors at which such shares are authorized to be issued, and
shall be conclusively evidenced (absent manifest error) by a
notation to such effect on the face of each certificate representing
such shares. Designated Preferred Stock shall in all respects have
the same voting powers, preferences and relative, participating,
optional or other rights, qualifications, limitations or
restrictions as other Series F Preferred Stock, except as to the
determination of the Base Conversion Price.
(i) "Dividend Rate" shall mean an annual rate determined as
follows:
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(i) $.0400 for all periods while the Series F Preferred
Stock is outstanding on or before December 31, 1997;
(ii) $.0420 for the period between January 1, 1998 and
December 31, 1998, inclusive;
(iii) $.0441 for the period between January 1, 1999 and
December 31, 1999, inclusive;
(iv) $.0463 for the period between January 1, 2000 and
December 31, 2000, inclusive; and
(v) $.0486 for all periods on and after January 1, 2001
for so long as the Series F Preferred Stock is outstanding.
(j) "Junior Stock" means shares of Common Stock, shares of the
Corporation's Series D Preferred Stock, $.01 par value, and shares
of any other class or series of the Corporation's capital stock
which by its terms is junior or subordinate to the Series F
Preferred Stock in any distribution of the Corporation's assets in
connection with the liquidation, dissolution or winding up of the
affairs of the Corporation.
(k) "Market Price" means the average Trading Price of a share
of Class A Common Stock for the ten trading days of the Class A
Common Stock preceding the Conversion Date. If during such ten-day
period the Class A Common Stock is not traded on a national
securities exchange or over-the-counter and reported on NASDAQ, then
Market Value shall be the fair market value of a share of Class A
Common Stock as reasonably determined in good faith by the Board of
Directors.
(l) The term "outstanding", when used with reference to shares
of capital stock, shall mean issued shares, excluding shares held by
the Corporation or a subsidiary of the Corporation.
(m) "Parity Stock" means the Corporation's Series E Preferred
Stock, $.01 par value, and any other class or series of the
Corporation's stock (other than Common Stock) which by its terms is
neither subordinate nor superior to or in preference of the Series F
Preferred Stock in any distribution of the Corporation's assets in
connection with the liquidation, dissolution or winding up of the
affairs of the Corporation.
(n) "Preferred Stock" means shares of any series of the
Corporation's Preferred Stock, $.01 par value per share.
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(o) "Restricted Payment" means the declaration or making by
the Corporation of any dividends or other distributions (in cash,
property, or otherwise) on, or any payment for the purchase,
redemption or other acquisition of, any shares of Series F Preferred
Stock, other than dividends payable in shares of Common Stock.
(p) "Senior Credit Documents" means the Credit Agreement dated
effective August 13, 1996 among the Company, NationsBank of Texas,
N.A., as administrative agent, Provident Services, Inc., as
documentation agent, and the "Lenders" named therein, together with
(i) all amendments, restatements, modifications and supplements
thereto, and (ii) all replacements therefor, including (without
limitation) any refinancings of the indebtedness under such Credit
Agreement.
(q) "Series F Preferred Stock" means the series of Preferred
Stock designated by the Corporation as its Series F Preferred Stock,
$.01 par value per share.
(r) "Trading Price" means, on any trading day for the Class A
Common Stock, (i) if the Class A Common Stock is traded on a
national securities exchange on such trading day, then the closing
price on such trading day as reflected in the consolidated trading
tables of the WALL STREET JOURNAL or any other appropriate
publication, (ii) if the Class A Common Stock is traded
over-the-counter and reported on the NASDAQ National Market System,
then the average of the high and low sales prices on such trading
day as reported in such publication or, if not so published, then as
reported by the NASDAQ National Market System, or (iii) if the Class
A Common Stock is not traded on a national securities exchange or in
the NASDAQ National Market System on such trading day, then the
representative bid and asked prices at the end of such trading day
in such market as reported by NASDAQ.
(s) All accounting terms used herein and not expressly defined
herein shall have the meanings given to them in accordance with
generally accepted accounting principles consistently applied and in
effect as of the date of the relevant calculation.
38. DIVIDENDS.
(a) SERIES F PREFERRED STOCK. The holders of Series F
Preferred Stock, in preference to the holders of Junior Stock, shall
be entitled to receive in respect of each such share of Series F
Preferred Stock, but only out of any funds legally available for the
declaration of dividends, cumulative, preferential dividends in cash
at an annual rate equal to the Dividend Rate, payable
quarter-annually on or before the last calendar day of each March,
June, September and December in
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each year in which the Series F Preferred Stock is outstanding. Such
dividends shall commence to accrue on the shares of Series F
Preferred Stock and be cumulative from and after the date of
issuance of such shares of Series F Preferred Stock and shall be
deemed to accumulate and accrue from day to day thereafter whether
or not declared or if the Corporation has earnings. Notwithstanding
that the Corporation may not have sufficient surplus or income in
order to pay any such dividends on the Series F Preferred Stock,
such dividends shall continue to accrue and to accumulate until paid
in full. So long as any shares of Series F Preferred Stock remain
outstanding, if the Corporation shall not pay any dividends on the
Series F Preferred Stock on the date due, then no dividends or
distributions shall be paid upon, or declared or set apart for, any
Junior Stock or Parity Stock, nor shall any Junior Stock or Parity
Stock be purchased, redeemed, retired or otherwise acquired by the
Corporation or any of its consolidated subsidiaries, unless and
until in either case all past due, cumulative dividends on the then
outstanding shares of Series F Preferred Stock for all past dividend
periods shall have been or concurrently shall be paid; provided,
however, that the foregoing shall not prevent or impair (i) the
payment or declaration of dividends or distributions on Junior Stock
to the extent payable solely in shares of Junior Stock, and the
payment or declaration of dividends or distributions on Parity Stock
to the extent payable solely in shares of Junior Stock; (ii) the
Corporation's purchase, redemption or acquisition of Parity Stock
outstanding on the date of first issuance of the Series F Preferred
Stock, but only to the extent in accordance with regularly scheduled
dates set for any such purchase, redemption or acquisition in
accordance with the terms applicable to such Parity Stock; or (iii)
redemptions of shares of Series D Preferred Stock outstanding on the
date of first issuance of the Series F Preferred Stock, but only to
the extent that (x) the Corporation's obligation to redeem such
shares or pay regularly scheduled dividends thereon is secured by a
standby letter of credit, and (y) such redemption is deemed to occur
in connection with a draw upon such letter of credit by or on behalf
of the holder(s) of such shares.
(b) OTHER STOCK. Subject to paragraph (a) above, (i) dividends
may be declared and paid on Junior Stock and Parity Stock, and (ii)
Junior Stock and Parity Stock may be purchased, retired or otherwise
acquired, when and as determined by the Board of Directors, out of
any funds legally available for such purposes.
(c) RESTRICTED PAYMENTS. Notwithstanding the foregoing
provisions of this Section 2 and the provisions of Section 3 below,
the Corporation shall not declare or pay, and no holder of the
Series F Preferred Stock shall be entitled to receive or retain, any
Restricted Payment in respect of shares of Series F Preferred Stock
if, at the time of such Restricted Payment, such holder has received
written notice from any lender under the Senior Credit Documents, or
from the Corporation, that an event of default (within the meaning
of the Senior Credit
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Documents) has occurred and is then continuing and that Restricted
Payments should be blocked. Such blockage period shall continue (i)
indefinitely after receipt of any such notice, if the event of
default specified therein results from any default in the payment by
the Corporation of any obligations under any Senior Credit Document,
whether by maturity, acceleration, or otherwise, for so long as such
event of default shall continue, or (ii) in the case of any other
event of default, for a period of 180 days after such holder's
receipt of any such notice. This paragraph does not have the intent
or effect of impairing, as between the Corporation and the holders
of the Series F Preferred Stock, the obligation of the Corporation,
which is unconditional and absolute (subject to the other provisions
hereof), to declare and pay dividends and to redeem shares of Series
F Preferred Stock, at such times and in the manner herein specified.
The Corporation agrees that other Parity Stock issued by it shall,
so long as the foregoing provisions of this paragraph (c) apply to
the Series F Preferred Stock, contain restrictions on such Parity
Stock equivalent to the foregoing provisions of this paragraph (c).
39. REDEMPTION.
(a) MANDATORY REDEMPTION. On December 31, 2007, the
Corporation shall redeem all of the shares of Series F Preferred
Stock then outstanding (subject, however, to the right of the
holders of the Series F Preferred Stock to convert their shares
pursuant to Section 5 by providing the written conversion notice
referred to in Section 5(c) below on or before November 30, 2007),
at a redemption price of $1.00 per share, together with all accrued
and unpaid dividends through the effective date of redemption.
(b) NO OPTIONAL REDEMPTION. The Corporation shall not have the
right to redeem the Series F Preferred Stock except in accordance
with paragraph (a) above.
(c) GENERAL. From and after the effective date of redemption
and the setting aside of the funds necessary for redemption,
notwithstanding that any certificate for shares of Series F
Preferred Stock so called for redemption shall not have been
surrendered for cancellation, the shares to be redeemed shall no
longer be deemed outstanding, and the holders of certificates
representing such shares shall have with respect to such shares no
rights in or with respect to the Corporation except the right to
receive, upon the surrender of such certificates, the redemption
price therefor. Shares of Series F Preferred Stock redeemed by the
Corporation pursuant to this Section 3, or shares of Series F
Preferred Stock otherwise purchased by the Corporation, shall not be
reissued and shall be cancelled and retired in the manner provided
by the laws of the State of Delaware, and no other shares of Series
F Preferred Stock shall be issued in lieu thereof.
40. PREFERENCE ON LIQUIDATION, DISSOLUTION OR WINDING UP.
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(a) DEFINITION. A consolidation or merger of the Corporation,
a sale or transfer of substantially all of its assets as an
entirety, or any purchase or redemption of capital stock of the
Corporation of any class, shall not be regarded as "liquidation,
dissolution or winding up of the affairs of the Corporation" within
the meaning of this Section 4.
(b) SERIES F PREFERRED STOCK. During any proceedings for the
voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, the holders of the Series F
Preferred Stock shall be entitled to receive, before any
distribution of the assets of the Corporation shall be made in
respect of any outstanding Junior Stock, and PARI PASSU with any
distribution of assets to the holders of outstanding Parity Stock,
an amount in cash for each share of Series F Preferred Stock equal
to $1.00 together with all accrued and unpaid dividends through the
effective date of such liquidation, dissolution or winding up, or
funds necessary for such payment shall have been set aside in trust
for the account of the holders of the outstanding Series F Preferred
Stock so as to be and continue available therefor. If upon such
liquidation, dissolution or winding up, the assets distributable to
the holders of the Series F Preferred Stock as aforesaid shall be
insufficient to permit the payment to them (together with any
distributions to the holders of Parity Stock) of $1.00 per share
(plus such accrued and unpaid dividends), the assets of the
Corporation shall be distributed to the holders of the Series F
Preferred Stock and the Parity Stock ratably until they shall have
received the full amount to which they would otherwise be entitled.
If the assets of the Corporation are sufficient to permit the
payment of such amounts to the holders of the Series F Preferred
Stock and the Parity Stock, the remainder of the assets of the
Corporation, if any, after the distributions as aforesaid shall be
distributed and divided ratably among the holders of the Junior
Stock then outstanding according to their respective shares.
41. CONVERSION. The Series F Preferred Stock shall be convertible into
Class A Common Stock in accordance with the following provisions of
this Section 5.
(a) OPTIONAL CONVERSION. Subject to and upon compliance with
the provisions of this Section 5, each holder of shares of Series F
Preferred Stock shall have the right at such holder's option, at any
time or from time to time from, to convert all or any part of his or
her shares of Series F Preferred Stock into fully paid and
nonassessable shares of Class A Common Stock, at the Conversion
Price in effect on the Conversion Date, upon the terms hereinafter
set forth.
(b) CONVERSION PRICE. The shares of Series F Preferred Stock
shall be convertible into the number of shares of Class A Common
Stock as is determined by multiplying the number of shares of Series
F Preferred Stock to be converted by a fraction, the numerator of
which is $1.00 and the denominator of which is the Conversion Price
in effect on the Conversion Date.
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(c) MECHANICS OF CONVERSION. The holder of any shares of
Series F Preferred Stock may exercise the optional conversion right
specified in paragraph (a) above by surrendering to the Corporation
or any transfer agent of the Corporation the certificate or
certificates for the shares to be converted, accompanied by written
notice stating that the holder elects to convert all or a specified
portion of the shares represented thereby. Optional conversion under
paragraph (a) shall be deemed to have been effected on the date when
notice of an election to convert and certificates for the shares to
be converted has been delivered; any such date is referred to herein
as the "Conversion Date". As promptly as practicable thereafter the
Corporation shall issue and deliver to or upon the written order of
such holders a certificate or certificates for the number of full
shares of Class A Common Stock to which such holders are entitled
rounded down to the next whole share as provided in paragraph (d)
below. The person in whose name the certificate or certificates of
Class A Common Stock are to be issued shall be deemed to have become
a holder of record of such Class A Common Stock on the Conversion
Date.
(d) FRACTIONAL SHARES. No fractional shares of Class A Common
Stock or scrip shall be issued upon conversion of shares of Series F
Preferred Stock. Instead of any fractional shares of Class A Common
Stock which would otherwise be issuable upon conversion of any
shares of Series F Preferred Stock, the number of full shares of
Class A Common Stock issuable upon conversion thereof shall be
reduced to the next lowest number of whole shares, and the
Corporation will pay a cash adjustment in respect of any surrendered
shares of Series F Preferred Stock not converted into Class A Common
Stock in an amount equal to the number of shares of Series F
Preferred Stock not so converted multiplied by a fraction, the
numerator of which is the Market Price on the Conversion Date and
the denominator of which is the Conversion Price on the Conversion
Date.
(e) CONVERSION PRICE ADJUSTMENTS. The Base Conversion Price
shall be subject to adjustment from time to time as follows:
(i) CERTAIN ISSUANCES OF EQUITY STOCK. If, at any time
following issuance of any Series F Preferred Stock while the
Conversion Price is based upon the Base Conversion Price, the
Corporation issues any Class A Common Stock, or any security
or evidence of indebtedness which is convertible or
exercisable into or exchangeable for Class A Common Stock
(including, without limitation, any Class B Common Stock or
any Preferred Stock), or any warrant, option or other right to
subscribe for or purchase Class A Common Stock or any security
or evidence of indebtedness which is convertible or
exchangeable for Class A Common Stock (hereinafter, "Equity
Stock"), other than Excluded Stock (as defined in clause (D)
below), for a consideration per share less than the Base
Conversion Price then in effect (as adjusted as provided in
this Section 5),
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then the Base Conversion Price shall immediately be reduced to
a price per share determined by multiplying the Base
Conversion Price then in effect by a fraction, the numerator
of which is an amount equal to the sum of (x) the number of
shares of Equity Stock of the Corporation outstanding
immediately prior to such issue or sale multiplied by the Base
Conversion Price in effect immediately prior to such issuance
or sale plus (y) the consideration, if any, received by the
Corporation upon such issue or sale, and the denominator of
which is the total number of shares of Equity Stock of the
Corporation outstanding immediately after such issue or sale
multiplied by the Base Conversion Price. The number of shares
of Equity Stock outstanding at any given time for the purposes
of the foregoing computation means the shares of Class A
Common Stock outstanding together with all shares of Class A
Common Stock issuable upon conversion or exercise of any such
Equity Stock, excluding any shares of Equity Stock previously
outstanding that have been reacquired by the Corporation and
constitute treasury shares.
For purposes of any adjustment of the Base Conversion
Price pursuant to this subparagraph (i) of this Section 5(e),
the following provisions shall be applicable:
(A) CASH. In the case of the issuance of Equity
Stock for cash, the amount of the consideration received
by the Corporation shall be deemed to be the amount of
the cash proceeds received by the Corporation for such
Equity Stock before deducting therefrom any discounts,
commissions, taxes, legal and accounting fees or other
expenses allowed, paid or incurred by the Corporation in
connection with the issuance and sale thereof.
(B) CONSIDERATION OTHER THAN CASH. In the case of
the issuance of Equity Stock (other than as described in
clause (C) below) for a consideration in whole or in
part other than cash, including securities acquired in
exchange therefor (other than securities by their terms
so exchangeable), the consideration other than cash
shall be deemed to be the fair market value thereof as
reasonably determined by the Board of Directors in good
faith.
(C) OPTIONS AND CONVERTIBLE SECURITIES, ETC. In
the case of the issuance of (i) options, warrants or
other rights to purchase or acquire Class A Common Stock
or other Equity Stock (whether or not at the time
exercisable), (ii) securities which by their terms are
convertible or exercisable into or exchangeable for
Class A Common Stock or other Equity Stock (whether or
not at the time so convertible, exercisable or
exchangeable) or (iii) options,
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warrants or rights to purchase such convertible or
exchangeable securities (whether or not at the time
exercisable):
(1) the aggregate maximum number of shares
of Class A Common Stock deliverable upon exercise
of such options, warrants or other rights to
purchase or acquire Class A Common Stock shall be
deemed to have been issued at the time such
options, warrants or rights were issued and for a
consideration equal to the aggregate consideration
(determined in the manner provided in clauses (A)
and (B) above), if any, received by the
Corporation upon the issuance of such options,
warrants or rights plus the aggregate minimum
purchase price provided in such options, warrants
or rights for the Class A Common Stock covered
thereby;
(2) the aggregate maximum number of shares
of Class A Common Stock deliverable upon
conversion of or in exchange for any such
convertible or exchangeable securities, or upon
the exercise of options, warrants or other rights
to purchase or acquire such convertible or
exchangeable securities and the subsequent
conversion or exchange thereof, shall be deemed to
have been issued at the time such securities were
issued or such options, warrants or rights were
issued and for a consideration equal to the
consideration, if any, received by the Corporation
for any such securities and related options,
warrants or rights (excluding any cash received on
account of accrued interest or accrued dividends),
plus the additional consideration, if any, to be
received by the Corporation upon the conversion or
exchange of such securities and the exercise of
any related options, warrants or rights (the
consideration in each case to be determined in the
manner provided in clauses (A) and (B) above);
(3) on any change in the number of shares of
Class A Common Stock deliverable upon exercise of
any such options, warrants or rights or conversion
of or exchange for such convertible or
exchangeable securities or any change in the
consideration to be received by the Corporation
upon such exercise, conversion or exchange,
including, but not limited to, a change resulting
from the anti-dilution provisions thereof, the
Base Conversion Price as then in effect shall
forthwith be readjusted to such Base Conversion
Price as would have been obtained had an
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adjustment been made upon the issuance of such
options, warrants or rights not exercised prior to
such change, or securities not converted or
exchanged prior to such change, on the basis of
the terms of such options, warrants, rights or
convertible or exchangeable securities as so
changed;
(4) on the expiration or cancellation of any
such options, warrants or rights, or the
termination of the right to convert or exchange
such convertible or exchangeable securities, if
the Base Conversion Price shall have been adjusted
upon the issuance thereof, the Base Conversion
Price shall forthwith be readjusted to such Base
Conversion Price as would have been obtained had
an adjustment been made upon the issuance of such
options, warrants, rights or securities on the
basis of the issuance of only the number of shares
of Class A Common Stock actually issued upon the
exercise of such options, warrants or rights, or
upon the conversion or exchange of such
securities; and
(5) regardless of whether the Base
Conversion Price shall have been adjusted upon the
issuance of any such options, warrants, rights or
convertible or exchangeable securities, no further
adjustment of the Base Conversion Price shall be
made for the actual issuance of Class A Common
Stock upon the exercise, conversion or exchange
thereof;
provided, however, that no adjustment pursuant to
clause (C) shall have the effect of increasing the
Base Conversion Price above the initial Base
Conversion Price.
(D) EXCLUDED STOCK. For purposes hereof, "Excluded
Stock" means shares of Common Stock issued or reserved
for issuance by the Corporation (i) upon conversion,
exercise or exchange of any Equity Stock that is
outstanding as of September 30, 1996; (ii) pursuant to a
stock dividend, subdivision or split-up covered by
subparagraph (ii) or (iii) of this Section 5(e); and
(iii) upon exercise of options issued to employees or
directors of the Corporation or its subsidiaries,
provided that (x) the exercise price thereof is not less
than the fair market value per share of the Class A
Common Stock determined in good faith by the Board of
Directors at the time such options are granted, and (y)
options covering no more than five percent (5%) of the
fully diluted Class A Common Stock
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may be issued under this clause (iii) without causing an
adjustment in the Base Conversion Price herein
described.
(ii) STOCK DIVIDENDS. If the number of shares of Class
A Common Stock outstanding at any time after the issuance of
any Series F Preferred Stock is increased by a stock dividend
payable in shares of Class A Common Stock or by a subdivision
or split-up of shares of Class A Common Stock, and if the
Conversion Price then in effect is based upon the Base
Conversion Price, then immediately after the record date fixed
for the determination of holders of Class A Common Stock
entitled to receive such stock dividend or the effective date
of such subdivision or split-up, as the case may be, the Base
Conversion Price shall be appropriately decreased so that the
holders of any shares of Series F Preferred Stock shall be
entitled to receive the number of shares of Class A Common
Stock of the Corporation which they would have owned
immediately following such action had such shares of Series F
Preferred Stock been converted immediately prior thereto.
(iii) COMBINATION OF STOCK. If the number of shares of
Class A Common Stock outstanding at any time after issuance of
any class of Series F Preferred Stock is decreased by a
combination of the outstanding shares of Class A Common Stock,
and if the Conversion Price then in effect is based upon the
Base Conversion Price then, immediately after the effective
date of such combination, the Base Conversion Price shall be
appropriately increased so that the holders of any shares of
Series F Preferred Stock shall be entitled to receive the
number of shares of Class A Common Stock of the Corporation
which they would have owned immediately following such action
had such shares of Series F Preferred Stock been converted
immediately prior thereto.
(iv) REORGANIZATIONS. In case of any capital
reorganization of the Corporation, or of any reclassification
of the Class A Common Stock, or in case of the consolidation
of the Corporation with or the merger of the Corporation with
or into any other corporation, partnership or other business
entity in which the Corporation is not the survivor, or of the
sale, lease or other transfer of all or substantially all of
the assets of the Corporation to any other corporation,
partnership or other business entity, each share of Series F
Preferred Stock shall, after such capital reorganization,
reclassification, consolidation, merger, sale or lease, be
convertible into the number of shares of stock or other
securities or property to which the Class A Common Stock
issuable (at the time of such capital reorganization,
reclassification, consolidation, merger, sale or lease) upon
conversion of such share of Series F Preferred Stock would
have been entitled upon such capital reorganization,
reclassification, consolidation,
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merger, sale or lease in place of (or in addition to, in the
case of any such event after which Class A Common Stock
remains outstanding) the shares of Class A Common Stock into
which such share of Series F Preferred Stock would otherwise
have been convertible; and in any such case, if necessary, the
provisions set forth herein with respect to the rights and
interests thereafter of the holders of the shares of Series F
Preferred Stock shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any share of
stock or other securities or property thereafter deliverable
on the conversion of the shares of Series F Preferred Stock,
and such shares so deliverable shall be entitled, as nearly as
practicable, to the same rights, preferences and privileges
and the benefits of the same restrictions as those which the
shares of Series F Preferred Stock were so entitled
immediately prior thereto. The subdivision or combination of
shares of Class A Common Stock issuable upon conversion of
shares of Series F Preferred Stock at any time outstanding
into a greater or lesser number of shares of Class A Common
Stock (whether with or without par value) shall not be deemed
to be a reclassification of the Class A Common Stock of the
Corporation for the purposes of this subparagraph (iv).
(v) ROUNDING OF CALCULATIONS; MINIMUM ADJUSTMENT. All
calculations under this paragraph (e) shall be made to the
nearest cent or to the nearest one hundredth (1/100th) of a
share, as the case may be. Any provision of this paragraph (e)
to the contrary notwithstanding, no adjustment in the Base
Conversion Price shall be made if the amount of such
adjustment would be less than $0.01, but any such amount shall
be carried forward and an adjustment with respect thereto
shall be made at the time of and together with any subsequent
adjustment which, together with such amount and any other
amount or amounts so carried forward, shall aggregate $0.01 or
more.
(vi) TIMING OF ISSUANCE OF ADDITIONAL CLASS A COMMON
STOCK UPON CERTAIN ADJUSTMENTS. In any case in which the
provisions of this paragraph (e) requires that an adjustment
shall become effective immediately after a record date for an
event, the Corporation may defer until the occurrence of such
event issuing to the holder of any shares of Series F
Preferred Stock converted after such record date and before
the occurrence of such event the additional shares of Class A
Common Stock or other property issuable or deliverable upon
exercise by reason of the adjustment required by such event
over and above the shares of Class A Common Stock or other
property issuable or deliverable upon such conversion before
giving effect to such adjustment; PROVIDED, HOWEVER that the
Corporation upon request shall deliver to such holder a due
bill or other appropriate instrument evidencing such holder's
right to receive such additional shares
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or other property, and such cash, upon the occurrence of the
event requiring such adjustment.
(f) CERTAIN ADJUSTMENTS. In case of any adjustment in
the Conversion Base Price pursuant to this Section 5(e) at a
time when the amount of the Conversion Base Price is due to
increase at one or more future dates in accordance with the
schedule contained within the definition of such term, then in
addition to the adjustment of the Base Conversion Price then
in effect, each subsequent increase therein contained within
such definition shall be appropriately adjusted to give effect
to provisions of this Section 5(e). In case, at a time when
the Conversion Price is based upon the Market Price, the
record date for any action of the type described subparagraph
(ii), (iii) or (iv) above occurs prior to a Conversion Date
but after one or more of the trading days for which the
Trading Price therefor is determined, then the Trading Price
for each trading day occurring prior to such record date shall
be appropriately adjusted in order to give effect to such
action, in the manner provided in said subparagraph (ii),
(iii) or (iv), as the case may be.
(g) STATEMENT REGARDING ADJUSTMENTS. Whenever the Base
Conversion Price shall be adjusted as provided in paragraph (e), the
Corporation shall forthwith file, at the office of any transfer
agent for the Series F Preferred Stock and at the principal office
of the Corporation, a statement showing in detail the facts
requiring such adjustment and the Base Conversion Price that shall
be in effect after such adjustment, and the Corporation shall also
cause a copy of such statement to be sent by mail, first class
postage prepaid, to each holder of the Series F Preferred Stock at
his or her address appearing on the Corporation's records. Each such
statement shall be signed by the Corporation's chief financial
officer. Where appropriate, such copy may be given in advance and
may be included as part of a notice required to be mailed under the
provisions of subparagraph (h) below.
(h) NOTICE TO HOLDERS. In the event the Corporation proposes
to take any action of the type described in subparagraph (i), (ii),
(iii) or (iv) of paragraph (e) above, the Corporation shall give
notice to each holder of the Series F Preferred Stock in the manner
set forth in subparagraph (f) above, which notice shall specify the
record date, if any, with respect to any such action and the
approximate date on which such action is to take place. Such notice
shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the
Base Conversion Price and the number, kind or class of shares or
other securities or property which shall be deliverable or
purchasable upon the occurrence of such action or deliverable upon
conversion of the Series F Preferred
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Stock. In the case of any action which would require the fixing of a
record date, such notice shall be given at least 10 days prior to
the date so fixed, and in case of all other action, such notice
shall be given at least 15 days prior to the taking of such proposed
action.
(i) COSTS. The Corporation shall pay all documentary, stamp,
transfer or other transactional taxes attributable to the issuance
or delivery of shares of Class A Common Stock of the Corporation or
other securities or property upon conversion of the shares of Series
F Preferred Stock; PROVIDED, HOWEVER, that the Corporation shall not
be required to pay any taxes which may be payable in respect of any
transfer involved in the issuance or delivery of any certificate for
such shares or securities in the name other than that of the holder
of the shares of Series F Preferred Stock in respect of which such
shares are being issued.
(j) RESERVATION OF SHARES. The Corporation shall reserve at
all times so long as any shares of Series F Preferred Stock remain
outstanding, free from preemptive rights, out of its treasury stock
or its authorized but unissued shares of Class A Common Stock, or
both, solely for the purpose of effecting the conversion of shares
of Series F Preferred Stock, sufficient shares of Class A Common
Stock to provide for the conversion of all outstanding shares of
Series F Preferred Stock and set aside and keep available any other
property deliverable upon conversion of all outstanding shares of
Series F Preferred Stock.
(k) APPROVALS. If any shares of Class A Common Stock or other
securities to be reserved for the purpose of conversion of shares of
Series F Preferred Stock require registration with or approval of
any governmental authority under any Federal or state law before
such shares or other securities may be validly issued or delivered
upon conversion, then the Corporation will in good faith and as
expeditiously as possible use its commercially reasonable efforts to
secure such registration or approval, as the case may be. The
foregoing shall not be interpreted to require the Corporation to
cause the registration of such shares under the Securities Act of
1933, as amended, or the securities or blue laws of any state.
(l) VALID ISSUANCE. All shares of Class A Common Stock or
other securities which may be issued upon conversion of the shares
of Series F Preferred Stock will upon issuance by the Corporation be
duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issuance thereof
and the Corporation shall take no action which will cause a contrary
result.
42. VOTING RIGHTS.
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(a) GENERAL. At any annual or special meeting of stockholders
or otherwise in respect of any matter submitted for the vote of
stockholders generally, the holders of the Series F Preferred Stock
shall be entitled to such number of votes (or fractions thereof) as
shall be determined by multiplying (1) vote for each share of Series
F Preferred Stock so held by a fraction, the numerator of which is
$1.00 and the denominator of which is the Conversion Price in effect
on the record date for determining stockholders entitled to vote on
such matter.
(b) BOARD REPRESENTATION. For so long as the Minimum
Investment (as hereafter delivered) shall be maintained, the holders
of the Series F Preferred Stock, in addition to any other voting
rights herein specified, shall be entitled to vote (voting together
as if a class, by a majority of the outstanding shares thereof) for
the election to the Board of Directors of one (1) member thereof.
Provided, however, that the person so elected by the holders of the
Series F Preferred Stock may be only Mark Wilson (and no other
person) for so long as Mark Wilson is alive or is not prevented for
an indefinite period of time by a physical or mental impairment from
performing the essential functions attendant to a position on the
Board of Directors, and in case of the death or such a disability of
Mark Wilson, then the holders of the Series F Preferred Stock shall
be entitled, for so long as the Minimum Investment is maintained and
subject to the provisions hereof, to elect such other person, who
shall have more than a nominal amount of experience and knowledge
concerning the conduct of publicly held corporations, to such
position on the Board of Directors. The director so elected by the
holders of Series F Preferred Stock shall be a Class III Director,
within the meaning of the Corporation's Certificate of
Incorporation, so long as such classification is used and applicable
to the Board of Directors. For so long as the Minimum Investment is
maintained, the director elected by the holders of the Series F
Preferred Stock may be removed only (i) for cause by the affirmative
vote of the holders of not less than 80% of the votes of the
outstanding shares of the class or classes of stock then entitled to
be voted for the election of directors, in accordance with the terms
and procedures provided in the Corporation's Certificate of
Incorporation, provided that the holders of a majority of the
outstanding Series F Preferred Stock shall be entitled to vote for a
replacement director (who shall have the minimum experience and
knowledge referred to above) to fill the vacancy created by such
removal, or (ii) by the affirmative vote of the holders of a
majority of the outstanding Series F Preferred Stock (subject to the
above provisions regarding Mark Wilson). At such time as the Minimum
Investment has no longer been maintained, the special voting rights
under this paragraph (b) shall terminate, but the person elected to
the Board of Directors by the holders of the Series F Preferred
Stock shall not thereby automatically be removed from office, but
rather shall continue to hold office in accordance with the
Corporation's Certificate of Incorporation and Bylaws. For purposes
hereof, the term "Minimum Investment" means the holding by those
persons who have acquired Series F Preferred Stock upon the original
issuance thereof, together with their affiliates, of at least
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$7,000,000 in shares of Series F Preferred Stock, shares of Class A
Common Stock, or any combination thereof, each share of Series F
Preferred Stock being deemed to have a value of $1.00 per share and
each share of Class A Common Stock being deemed to have a value of
$15.00 per share, for such purposes. An "affiliate" of a person
means one who controls, is controlled by or is under common control
with that person.
(c) SPECIAL VOTING REQUIREMENTS. Without limiting the
generality of paragraph (a) above, the Corporation shall not,
without the consent of the holders of at least a majority of the
outstanding shares of Series F Preferred Stock, voting together as a
single class, either (i) amend, alter or repeal any provision of the
Corporation's Certificate of Incorporation or Bylaws or this
Certificate of Designation, in any event so as to adversely affect
the rights, powers, preferences or privileges or restrictions
provided for the benefit of any of the Series F Preferred Stock as
provided herein, or (ii) issue any Preferred Stock or other class or
series of the Corporation's capital stock that is senior or
preferential to the Series F Preferred Stock in any distribution of
the Corporation's assets in connection with the liquidation,
dissolution or winding up of the affairs of the Corporation, or
issue any bonds, debentures or other obligations convertible or
exchangeable for, or having the right to purchase, such senior or
preferential stock, or reclassify any Junior Stock into stock having
such senior or preferential rights.
43. EXCLUSION OF OTHER RIGHTS. Unless otherwise required by law, the
shares of Series F Preferred Stock shall not have any voting powers,
preferences or relative, participating, optional or other special
rights other than those specifically set forth herein.
IN WITNESS WHEREOF, CARRIAGE SERVICES, INC. has caused this
Certificate to be signed by Melvin C. Payne, its President, as of the 30th day
of October, 1996.
CARRIAGE SERVICES, INC.
By:__________________________________
MELVIN C. PAYNE, President
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AMENDED
CERTIFICATE OF DESIGNATION, PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES F PREFERRED STOCK
OF
CARRIAGE SERVICES, INC.
Pursuant to Section 151 of the General Corporation Law of the State
of Delaware, CARRIAGE SERVICES, INC., a corporation organized and existing under
the General Corporation Law of the State of Delaware (herein referred to as the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That the Corporation has previously established and
designated a series of Preferred Stock, $.01 par value, designated as its Series
F Preferred Stock ("Series F Preferred Stock"), consisting of up to 20,000,000
shares, pursuant to the Certificate of Designation, Preferences, Rights and
Limitations filed with the Secretary of State of Delaware on November 6, 1996
(the "Series F Designation"), and no shares of Series F Preferred Stock have
been issued;
SECOND: That pursuant to authority granted to the Board of Directors
of the Corporation by the Amended and Restated Certificate of Incorporation of
the Corporation, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, such Board of Directors by unanimous
consent dated December 10, 1996 duly adopted a resolution providing for an
amendment to the Certificate of Designation, Preferences, Rights and Limitations
of the Corporation's Series F Preferred Stock, which resolution is as follows:
WHEREAS, the Corporation has previously established and designated a
series of Preferred Stock, $.01 par value, designated as its Series F
Preferred Stock ("Series F Preferred Stock"), consisting of up to
20,000,000 shares, pursuant to the
Certificate of Designation, Preferences, Rights and Limitations filed with
the Secretary of State of Delaware on November 6, 1996 (the "Series F
Designation"); and
WHEREAS, no shares of Series F Preferred Stock have been issued, and
the Board of Directors deems it in the Corporation's best interests that
the Series F Designation be amended in certain respects;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority
expressly granted and vested in the Board of Directors of the
Corporation in accordance with the provisions of the Amended and
Restated Certificate of Incorporation of the Corporation and Section
151(g) of the General Corporation Law of the State of Delaware,
there is hereby added to Section 2 of the Series F Designation a new
paragraph (d), which paragraph (d) of said Section 2 shall read as
follows:
"(d) DIVIDENDS UPON CONVERSION. In no event shall any
conversion of shares of Series F Preferred Stock have the effect of
extinguishing any accrued and unpaid dividends on such shares
through the Conversion Date referred to in Section 5(c). In case of
any such conversion, accrued and unpaid dividends on the outstanding
Series F Preferred Stock through the Conversion Date shall remain
due and owing, provided that such dividends for the prorated period
in the applicable quarter-annual period shall nonetheless remain
payable on or before the regular date called for the payment of
dividends as specified in paragraph (a) above. No dividends shall
accrue or be payable in respect of any Series F Preferred Stock from
and after the Conversion Date."
THIRD: The designation of the Series F Preferred Stock as such will
not change as a result of the foregoing amendment.
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IN WITNESS WHEREOF, CARRIAGE SERVICES, INC. has caused this
Certificate to be signed by Melvin C. Payne, its President, as of the ____ day
of December, 1996.
CARRIAGE SERVICES, INC.
By:__________________________________
MELVIN C. PAYNE,
Chief Executive Officer
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