ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
AMTRAN, INC.
Date of Incorporation: October 23, 1984
AMTRAN, INC. (hereinafter referred to as the "CORPORATION"),
an Indiana corporation existing pursuant to the provisions of the Indiana
Business Corporation Law, as amended (hereinafter referred to as the "ACT"),
desiring to give notice of corporate action effectuating amendment of its
Articles of Incorporation, as previously restated (the "ARTICLES OF
INCORPORATION"), certifies the following facts:
ARTICLE I
THE AMENDMENT
1. NAME. The name of the Corporation following this amendment continues to
be Amtran, Inc.
2. CREATION OF NEW ARTICLE XII. Upon effectiveness of these Articles of
Amendment, the Corporation's Articles of Incorporation shall be amended by
adding a new Article XII, the exact text of which is as follows:
ARTICLE XII
DESIGNATIONS, RIGHTS AND PREFERENCES OF
SERIES B PREFERRED STOCK
The designations, rights, preferences, limitations and restrictions of the
shares of Preferred Stock, without par value, to be designated as "Series B
Preferred Stock" (in addition to those set forth elsewhere in the Corporation's
Articles of Incorporation) are hereby fixed as follows:
1. NUMBER OF SHARES. The number of shares of Series B Preferred Stock shall
initially be 300 shares, which number from time to time may be increased or
decreased (but not decreased below the number of shares of the series then
outstanding) in accordance with the provisions of the Act, subject to the rights
of holders of the Series B Preferred Stock under Section 8 hereof. Shares of
Series B Preferred Stock redeemed or purchased by the Corporation, or converted
into Common Stock of the Corporation in accordance with the provisions hereof,
shall be canceled and shall revert to authorized but unissued shares of
Preferred Stock undesignated as to series.
2. DEFINITIONS AND CONSTRUCTION. As used in this Article XII,
(a) "business day" means each day that is not a Saturday, Sunday or other
day on which banking institutions in the City of New York are authorized or
required by law or executive order to be closed;
(b) "Common Stock" means the common stock of the Corporation, without par
value;
(c) "herein", "hereof", "hereunder" and other like words mean or refer to
this Article XII;
(d) "Junior Stock" means the Common Stock and any other class or series of
stock of the Corporation hereafter authorized, the terms of which do not
expressly provide that such class or series ranks senior to or on a parity with
the Series B Preferred Stock as to dividend distributions and distributions upon
the liquidation, winding up or dissolution of the Corporation;
(e) "outstanding", when used with reference to shares of stock, means
issued shares, excluding shares held by the Corporation or a subsidiary;
(f) "Parity Stock" means any class or series of stock of the Corporation
authorized, the terms of which expressly provide that such class or series will
rank on a parity with the Series B Preferred Stock as to dividend distributions
and distributions upon the liquidation, winding up or dissolution of the
Corporation;
(g) "person" means any corporation, partnership, trust, organization,
association or other entity or individual;
(h) "Series A Preferred Stock means, collectively, all series of preferred
stock designated as Series A1, Series A2, Series A3 or any other series
designated by the words "Series A" in which the A is immediately followed by any
number;
(i) headings are for convenience of reference only and shall not define,
limit or affect any of the provisions hereof; and (j) references to Sections are
to Sections of this Article XII.
3. DIVIDENDS. The holders of Series B Preferred Stock shall be entitled to
receive, when and if declared by the Board of Directors, but only out of funds
legally available therefor, cumulative cash dividends at the annual rate of 5.0%
of the Liquidation Amount (as defined below) (the "DIVIDEND RATE") per share,
and no more, payable quarterly in equal amounts of 1.25% of the Liquidation
Amount on the 15th day of December, March, June and September, respectively, in
each year (or if any such date is not a business day, on the next succeeding
business day) commencing on December 15, 2000, with respect to the quarterly
dividend period (or portion thereof) ending on the day preceding such respective
dividend payment date, to holders of record on the respective date, not more
than 60 nor less than ten days preceding such dividend payment date, fixed for
such purpose by the Board of Directors in advance of payment of each particular
dividend. If the Corporation fails to pay any quarterly dividend and such
failure is not cured within ten days of the date on which the dividend was
payable, whether or not the funds are legally available therefor, the Dividend
Rate shall increase as follows: (i) if the Corporation has issued on or prior to
December 31, 2000, any series of Series A Preferred Stock, the Dividend Rate
shall increase to the highest rate of interest per annum payable on any such
series of Series A Preferred Stock issued and outstanding on such date, and (ii)
if the Corporation has not issued on or before December 31, 2000, any series of
Series A Preferred Stock, the Dividend Rate shall increase to 9.8% per annum.
Following the payment of all accrued and unpaid dividends that have become due
and payable, the Dividend Rate will revert to the original Dividend Rate.
Dividends payable on the Series B Preferred Stock for any period shorter than a
full quarterly period shall be computed on the basis of a 360-day year
consisting of twelve 30-day months. Dividends on shares of Series B Preferred
Stock shall be cumulative from the last dividend payment date, or if no
dividends have been paid on the outstanding shares of Series B Preferred Stock,
from the date of issuance, whether or not the Corporation has the funds legally
available therefor. Accumulations of dividends on outstanding shares of Series B
Preferred Stock shall bear interest at the rate of 9.5% per annum.
So long as any shares of Series B Preferred Stock remain outstanding, the
Corporation may not pay or declare any dividend, nor make any distribution on
any Junior Stock, other than a dividend payable solely in Junior Stock, and
shall not purchase, redeem or otherwise acquire for consideration, directly or
indirectly (other than as a result of a reclassification of Junior Stock into
Junior Stock, or the exchange or conversion of one share of Junior Stock for or
into another share of Junior Stock, and other than through the use of the
proceeds of a substantially contemporaneous sale of other shares of Junior
Stock), unless (i) all accrued and unpaid dividends (including any interest
thereon) on all outstanding shares of Series B Preferred Stock have been paid in
full and the full dividend thereon for the then current quarterly dividend
period shall have been paid or declared and set apart for payment and (ii) all
prior redemption requirements with respect to Series B Preferred Stock shall
have been complied with. When dividends are not paid in full upon the Series B
Preferred Stock and any Parity Stock, all dividends declared upon shares of
Series B Preferred Stock and all Parity Stock shall be declared PRO RATA so that
the amount of dividends declared per share on the Series B Preferred Stock and
all such Parity Stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the shares of Series B Preferred Stock and all
such Parity Stock bear to each other. Subject to the foregoing, and not
otherwise, such dividends (payable in cash, stock or otherwise) as may be
determined by the Board of Directors may be declared and paid on any Junior
Stock from time to time out of any funds legally available therefor, and the
Series B Preferred Stock shall not be entitled to participate therein.
4. LIQUIDATION RIGHTS.
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary (any such event being a
"LIQUIDATION TRANSACTION") the Series B Preferred Stock shall rank prior to any
shares of Junior Stock, so that in the event of any Liquidation Transaction,
whether voluntary or involuntary, the holders of Series B Preferred Stock shall
be entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of Junior Stock, an amount per share
equal to $100,000 per share (the "LIQUIDATION AMOUNT") for each outstanding
share of Series B Preferred Stock, plus an amount equal to all accrued and
unpaid dividends (including any interest thereon) (such sum being referred to as
the "LIQUIDATION PREFERENCE" for the Series B Preferred Stock).
(b) If, upon any Liquidation Transaction, the assets of the Corporation, or
proceeds thereof, shall be insufficient to pay the full Liquidation Preference
to all holders of the Series B Preferred Stock, then such assets, or the
proceeds thereof, shall be divided and distributed PRO RATA among the holders of
the Series B Preferred Stock and the holders of any Parity Stock in accordance
with the aggregate respective liquidation preferences of the Series B Preferred
Stock and all such Parity Stock.
(c) After payment shall have been made in full to all holders
of Series B Preferred Stock, as provided in this Section 4, the holders of the
Junior Stock shall, subject to the respective terms and provisions applying
thereto, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the shares of Series B Preferred Stock shall not
be entitled to share therein.
5. REDEMPTION AND REPURCHASE.
(a) CHANGE OF CONTROL.
(i) OPTIONAL REDEMPTION BY THE CORPORATION. If, on or before the third
anniversary of the initial issuance of the Series B Preferred Stock, any person
(other than J. George Mikelsons or any person or entity controlled by him)
acquires or enters into an agreement with the Corporation to acquire capital
stock of the Corporation representing a majority of the voting power represented
by all outstanding capital stock of the Corporation (such event being referred
to as a "Change of Control"), the Corporation may redeem for cash, in whole at
any time, all shares of Series B Preferred Stock at the time outstanding, upon
notice given as hereinafter specified within 30 days following a Change of
Control, at a redemption price per share equal to the sum of (i) the Liquidation
Amount, (ii) all accrued and unpaid dividends (including any interest thereon)
to the date of redemption, and (iii) a premium equal to 9.5% per annum of the
Liquidation Amount calculated from the date of issuance of the shares of Series
B Preferred Stock to the date of redemption.
(ii) MANDATORY REPURCHASE AT THE OPTION OF THE HOLDER. If a Change of
Control occurs on or before the third anniversary of the initial issuance of the
Series B Preferred Stock, all but not less than all of the holders of Series B
Preferred Stock may require the Corporation to repurchase for cash, in whole at
any time, all shares of Series B Preferred Stock at the time outstanding, upon
notice given as hereinafter specified within 45 days following a Change of
Control, at a purchase price ("Repurchase Price") per share equal to the sum of
(i) the Liquidation Amount, (ii) all accrued and unpaid dividends (including any
interest thereon) to the date of repurchase, and (iii) a premium equal to the
difference between (x) the amount obtained when the highest rate of interest per
annum payable on any series of Series A Preferred Stock issued and outstanding
on the date of repurchase is multiplied by the Liquidation Amount calculated
from the date of issuance of the shares of Series B Preferred Stock to the date
of repurchase and (y) 5% per annum of the Liquidation Amount calculated from the
date of issuance of the shares of Series B Preferred Stock to the date of
repurchase. A notice of mandatory repurchase under this section 5(a)(ii) (a
"Repurchase Notice") may be given to the Corporation at any time within the 45
days following a Change of Control, by all but not less than all of the holders
of Series B Preferred Stock. To be valid, a Repurchase Notice must (i) specify a
date of repurchase (the "Repurchase Date") that is a business day not earlier
than 45 days following the date of receipt by the Corporation of the Repurchase
Notice, (ii) be signed by all registered holders of Series B Preferred Stock and
(iii) be delivered to the Corporation at its corporate headquarters to the
attention of its Corporate Secretary by first class mail, overnight courier or
by hand. Once given, a Repurchase Notice will be irrevocable. On and after the
Repurchase Date, the sole right of the holders of Series B Preferred Stock shall
be to receive the Repurchase Price without interest against delivery of
certificates representing Series B Preferred Stock.
(b) OPTIONAL REDEMPTION. On or after the third anniversary of the initial
issuance of the Series B Preferred Stock, the Corporation may redeem for cash,
in whole at any time, or in part from time to time, the shares of Series B
Preferred Stock at the time outstanding, upon notice given as hereinafter
specified, at the redemption price in effect at the redemption date as provided
in this Section 5. If redeemed during the 12-month period commencing on the
anniversary date of the initial issuance of Series B Preferred Stock in the
years set forth below the redemption price shall be the Liquidation Amount plus
all accrued and unpaid dividends (including any interest thereon) to the date of
redemption plus a premium (expressed as a percentage of the Liquidation Amount)
as follows:
2003 3.60%
2004 3.30%
2005 3.00%
2006 2.70%
2007 2.40%
2008 2.10%
2009 1.80%
2010 1.50%
2011 1.20%
2012 .90%
2013 .60%
2014 .30%
2015 and thereafter no redemption premium.
(c) MANDATORY REDEMPTION. The Corporation shall redeem any outstanding
shares of Series B Preferred Stock on the anniversary of the initial issuance of
the Series B Preferred Stock in 2015 for an amount in cash equal to the
Liquidation Amount plus all accrued and unpaid dividends (including any interest
thereon).
(d) NOTICE OF REDEMPTION. So long as the Series B Preferred Stock is not
registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
notice of every redemption of Series B Preferred Stock shall be mailed by first
class mail, postage prepaid, addressed to the holders of record of the shares to
be redeemed at their respective last addresses as they appear on the books of
the Corporation. If the Corporation registers the outstanding shares of Series B
Preferred Stock under the Securities Act, then such notice shall be made by mail
as described in the preceding sentence and, the Corporation shall also publish
any notice of redemption by means of the Dow Jones News Service or such other
similar news wire service or newspaper. Such mailing and any such publication
shall be at least ten days and not more than 45 days prior to the date fixed for
redemption. Any notice that is mailed or published, as the case may be, in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the shareholder receives such notice. Furthermore, the validity
of the proceedings for the redemption of any shares of Series B Preferred Stock
of any shareholder shall not be affected by any defect in any notice given to
any other shareholder. Such notice shall set forth
(A) the time and date for the redemption;
(B) the number of shares to be redeemed and if less than all shares of
Series B Preferred Stock held by a holder are to be redeemed, the number of such
holder's shares to be redeemed;
(C) the redemption price;
(D) the place or places where certificates for
the shares are to be surrendered for redemption;
(E) that dividends on the shares to be redeemed will cease to accrue on the
redemption date (unless the Corporation shall default in redeeming the shares on
the redemption date); and
(F) that the right to convert such shares shall terminate at the close of
business on the redemption date.
(e) REDEMPTIONS IN PART. In case of any redemption of only a part of the
shares of Series B Preferred Stock at the time outstanding, the redemption may
be PRO RATA, by lot or by any other method as may be determined by the Board of
Directors in its sole discretion to be equitable as set forth in a certificate
of the Secretary or Assistant Secretary of the Corporation filed with the
transfer agent or agents for the Series B Preferred Stock. The Board of
Directors shall have full power and authority, subject to the provisions herein
contained, to prescribe the terms and conditions upon which Series B Preferred
Stock shall be redeemed from time to time.
(f) EFFECT OF REDEMPTION. If notice of redemption shall have been duly
given, and if on or before the redemption date specified therein all funds
necessary for such redemptions shall have been set aside by the Corporation,
separate and apart from its other funds, in trust for the PRO RATA benefit of
the holders of the shares called for redemption, so as to be and continue to be
available therefor, then, notwithstanding that any certificate for shares so
called for redemption shall not have been surrendered for cancellation, on and
after such redemption date, all shares so called for redemption shall no longer
be deemed outstanding and all rights with respect to such shares shall forthwith
on such redemption date cease and terminate, except only the right of the
holders thereof to receive the amount payable on redemption thereof, without
interest. Any funds so deposited and unclaimed at the end of two years from such
redemption date shall, to the extent permitted by law, be released or repaid to
the Corporation, after which time the holders of the shares so called for
redemption shall look only to the Corporation for payment thereof. A holder of
shares of Series B Preferred Stock called for redemption shall be entitled to
convert such shares in accordance with the provisions of Section 6 up until the
close of business on the redemption date.
Any funds so deposited or set aside by the Corporation which shall not be
required for such redemption because of the exercise of any right of conversion
set forth in Section 6 below subsequent to the date of such deposit shall be
released or repaid to the Corporation forthwith.
6. CONVERSION. The holders of the Series B Preferred Stock shall have
conversion rights as follows:
(a) RIGHT TO CONVERT. On the terms and subject to the conditions of this
Section 6, the holder of a share of Series B Preferred Stock shall have the
right, at its option, at any time to convert such share into that number of
shares of fully paid and non-assessable Common Stock (calculated as to each
conversion to the nearest 1/100th of a share) obtained by dividing the
Liquidation Amount, by the Conversion Price (as defined in Section 6(d)) and by
surrender of such share pursuant to Section 6(b). The shares of Common Stock
issuable upon such conversion are hereinafter referred to as the "CONVERSION
SHARES". No payment or adjustment shall be made upon any conversion on account
of any dividends accrued on the shares of Series B Preferred Stock surrendered
for conversion or on account of any dividends on the Common Stock issued upon
conversion for which the record date is on or prior to the conversion date.
Holders of shares of Series B Preferred Stock at the close of business on a
record date for any payment of declared dividends shall be entitled to receive
the dividend payable on such shares on the corresponding dividend payment date
notwithstanding the optional conversion of such shares following such record
date and prior to the corresponding dividend payment date. However, shares of
Series B Preferred Stock surrendered for conversion after the close of business
on a record date for any payment of dividends and before the opening of business
on the next succeeding dividend payment date must be accompanied by payment in
cash of an amount equal to the dividend thereon which is to be paid on such
dividend payment date (unless such shares have been called for redemption on a
redemption date between such record date and such dividend payment date).
(b) CONVERSION PROCEDURES. In order to exercise the conversion privilege,
the holder of any shares of the Series B Preferred Stock shall surrender the
certificate representing such shares at the principal office of the Corporation,
with a written notice stating that such holder elects to convert all or a
specified whole number of such shares pursuant to this Section 6 and specifying
the name or names in which such holder wishes the certificate or certificates
for Conversion Shares to be issued. Unless the Conversion Shares are to be
issued in the same name as the name in which such shares of Series B Preferred
Stock are registered, the certificate representing the shares surrendered for
conversion shall be accompanied by instruments of transfer, in form satisfactory
to the Corporation, duly executed by the holder or its duly authorized attorney.
As promptly as practicable after such surrender of a certificate for shares of
the Series B Preferred Stock to be converted, and in any event within five
business days thereafter, the Corporation shall issue and deliver at such office
to such holder, or on such holder's written order, (i) a certificate or
certificates for the applicable number of full Conversion Shares, (ii) if less
than the full number of shares of Series B Preferred Stock evidenced by the
surrendered certificate is being converted, a new certificate, of like tenor,
for the number of shares of Series B Preferred Stock evidenced by such
surrendered certificate less the number of shares being converted and (iii) the
cash payment in settlement of any fractional Conversion Share as provided in
Section 6(c). Upon conversion of any shares of Series B Preferred Stock, the
holder thereof shall be entitled to receive an amount equal to all declared and
unpaid dividends on such shares.
In the case of the exercise of the conversion privilege under Section 6(a),
each conversion shall be deemed to have been effected immediately after the
close of business on the date on which the certificate for shares of Series B
Preferred Stock to be converted is surrendered and such notice is received by
the Corporation as aforesaid, and the person or persons in whose name or names
any certificate or certificates for Conversion Shares are issuable shall be
deemed to have become the holder or holders of record of such Conversion Shares
at such time on such date and such conversion shall be at the applicable
Conversion Price in effect at such time on such date, unless the stock transfer
books of the Corporation are closed on that date, in which event such person or
persons shall be deemed to have become such holder or holders of record at the
close of business on the next day on which such stock transfer books are open
(provided that if such books shall remain closed for five days, such fifth day
shall be the date any such person shall become such a holder), but such
conversion shall be at the Conversion Price in effect on the date on which such
certificate was surrendered and such notice was received. Upon delivery, all
Conversion Shares shall be duly authorized, validly issued, fully paid,
non-assessable, free of all liens and charges and not subject to any preemptive
or subscription rights. (c) SETTLEMENT OF FRACTIONAL CONVERSION SHARES. No
fractional Conversion Shares or scrip representing fractions of Conversion
Shares shall be issued upon conversion of shares of the Series B Preferred
Stock. Instead of any fractional Conversion Share otherwise deliverable, the
Corporation shall pay to the holder of the converted shares an amount in cash
equal to the Current Market Price (as defined below) of such fractional
Conversion Share on the date of conversion. If more than one share is
surrendered for conversion at one time by the same holder, the number of full
Conversion Shares shall be computed on the basis of the aggregate number of
shares so surrendered. The "CURRENT MARKET PRICE" per share of Common Stock on
any day is the average of the high and low sales prices of the Corporation's
Common Stock on the NASDAQ National Market System ("NASDAQ") for the 10
consecutive trading days preceding such day rounded up to the nearest whole
cent. A "TRADING DAY" is a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not then listed or
admitted to trading on any national securities exchange, any day other than
Saturday, Sunday or a federal holiday.
(d) The "CONVERSION PRICE" shall be $15.67 and may be adjusted from time to
time pursuant to this Section 6(d). The Conversion Price shall be adjusted from
time to time as follows:
(i) If, after the date of initial issuance of the Series B Preferred Stock,
the Corporation (A) pays a dividend or makes a distribution on the Common Stock
in shares of Common Stock,(B) subdivides or combines its outstanding shares of
Common Stock into a greater or smaller number of shares or (C) issues by
reclassification of the Common Stock any shares of capital stock of the
Corporation, each Conversion Price in effect immediately prior to such action
shall be adjusted so that the holder of any share of Series B Preferred Stock
thereafter surrendered for conversion shall be entitled to receive, at the time
of such conversion, the number of shares of Common Stock or other capital stock
of the Corporation that it would have owned or been entitled to receive
immediately following such action had such share been converted immediately
prior to such action or the record date therefor, whichever is earlier. Such
adjustment shall become effective immediately after the record date, in the case
of a dividend or distribution, or immediately after the effective date, in the
case of a subdivision, combination or reclassification.
(ii) If, after the date of initial issuance of the Series B Preferred
Stock, the Corporation issues any Additional Shares (as defined below) for a
consideration per share below the closing price as of 4:30 pm on the principal
market on which the Common Stock is traded (the "CLOSING PRICE") on the trading
day immediately prior to the date on which the Corporation shall have agreed to
such issuance, then in each case the Conversion Price shall be adjusted by
multiplying the Conversion Price in effect immediately prior to such issuance by
a fraction,
(A) the numerator of which shall be the number of shares of Common Stock
and Share Equivalents (as defined below) outstanding immediately prior to the
issuance of such Additional Shares plus the number of shares of Common Stock
that the aggregate consideration for such Additional Shares would purchase at a
consideration per share equal to such Closing Price, and
(B) the denominator of which shall be the number of shares of Common Stock
and Share Equivalents outstanding immediately prior to the issuance of such
Additional Shares plus the number of Additional Shares so issued.
Such adjustment for the Series B Preferred Stock shall become effective
immediately after the issuance of such Additional Shares.
"ADDITIONAL SHARES" shall mean any shares of Common Stock of the
Corporation issued by the Corporation after the date of issuance of the Series B
Preferred Stock excluding Permitted Issuances. "SHARE EQUIVALENTS" shall mean
the Common Stock deliverable upon conversion or exercise of all outstanding
Series B Preferred Stock, convertible securities, options, warrants and rights
of the Corporation as of the date such computation is made and as of the time
such computation is effective as specified herein.
"PERMITTED ISSUANCES" shall mean:
(A) any stock options which have been granted and remain unexercised as of
the date of issuance of the Series B Preferred Stock;
(B) stock options granted and shares issued to employees, directors and
consultants after the issuance of the Series B Preferred Stock in the aggregate
amount of 500,000 shares of Common Stock per annum (commencing with the year
2000) pursuant to the Corporation's stock plans, PROVIDED that if the aggregate
number of stock options granted per annum pursuant to the Corporation's stock
plans is less than 500,000, "Permitted Issuances" shall include that number of
stock options equal to the difference between 500,000 and the actual number of
stock options granted per annum pursuant to the Corporation's stock plans, which
stock options of Common Stock may be granted in subsequent years;
(C) additional options granted and shares issued in an amount equal to
options granted and shares issued pursuant to the foregoing clauses (A) and (B)
to the extent such shares are returned to the Corporation's stock plans upon the
lapse of unexercised stock options or the repurchase (at original purchase
price) of unvested shares;
(D) any shares issued upon exercise of options granted pursuant to the
foregoing clauses (A)-(C) including as a result of the operation of anti
dilution adjustments provided for therein;
(E) any shares issued pursuant to employee stock purchase, savings or
ownership plans, including all shares issued to a trust formed in respect
thereof;
(F) any shares issued upon conversion of the Series B Preferred Stock
(including adjustments to the conversion ratio), any stock options granted and
shares issued upon the exercise thereof approved by the holders of a majority of
the Series B Preferred Stock, and any shares issued to the holders of the Series
B Preferred Stock in connection with any contractual rights related to such
approved shares or options; and
(G) any shares issued pursuant to the exercise, conversion or exchange of
other securities.
(iii) If after the date of initial issuance of the Series B Preferred Stock
the Corporation issues any warrants, options or other rights entitling the
holders thereof to subscribe for or purchase either any Additional Shares or
evidences of debt, shares of capital stock or other securities that are
convertible into or exchangeable for, with or without payment of additional
consideration, Additional Shares (such warrants, options or other rights being
called "RIGHTS" and such convertible or exchangeable evidences of debt, shares
of capital stock or other securities being called "CONVERTIBLE SECURITIES"), and
the consideration per share for which Additional Shares may at any time
thereafter be issuable pursuant to such Rights or Convertible Securities (when
added to the consideration per share of Common Stock, if any, received for such
Rights or Convertible Securities) is less than the Conversion Price then in
effect, the Conversion Price shall be adjusted as provided in Section 6(d)(ii)
on the basis that,
(A) the maximum number of Additional Shares issuable pursuant to all such
Rights or necessary to effect the conversion or exchange of all such Convertible
Securities shall be deemed to have been issued, and
(B) the aggregate consideration (plus the consideration, if any, received
for such Rights and Convertible Securities) for such maximum number of
Additional Shares shall be deemed to be the consideration received and
receivable by the Corporation for the issuance of such Additional Shares
pursuant to such Rights or Convertible Securities.
No adjustment of the Conversion Price shall be made under this Section
6(d)(iii) upon (x) the issuance of any Convertible Securities issued pursuant to
the exercise of any Rights, to the extent that such adjustment was previously
made upon the issuance of such Rights pursuant to Section 6(d)(iii) or (y) the
granting of any stock options that qualify as Permitted Issuances under clause
(B) or (C) of the definition thereof.
(iv) For purposes of Section 6(d)(iii), the relevant Conversion Price shall
be the Conversion Price in effect immediately prior to the earlier of (A) the
record date for the holders of Common Stock entitled to receive the Rights or
Convertible Securities and (B) the initial issuance of the Rights or Convertible
Securities, and the adjustment provided for in either such Section shall become
effective immediately after the earlier of the times specified in clauses (A)
and (B).
(v) No adjustment of the Conversion Price shall be made under Section
6(d)(ii) upon the issuance of any Additional Shares pursuant to the exercise of
any Rights or any conversion or exchange rights pursuant to any Convertible
Securities, if such adjustment was previously made in connection with the
issuance of such Rights or Convertible Securities (or in connection with the
issuance of any Rights therefor) pursuant to Section 6(d)(iii).
(vi) If any Rights or Convertible Securities (or any portions thereof) that
gave rise to an adjustment pursuant to Section 6(d)(iii) expire or terminate
without the exercise thereof and/or if by reason of the provisions of such
Rights or Convertible Securities there has been any increase, with the passage
of time or otherwise, in the consideration payable upon the exercise thereof,
the Conversion Price shall be readjusted (but to no greater extent than
originally adjusted) on the basis of,
(A) eliminating from the computation Additional Shares corresponding to
such expired or terminated Rights or conversion or exchange rights,
(B) treating the Additional Shares, if any, actually issued or issuable
pursuant to the previous exercise of such Rights or conversion or exchange
rights as having been issued for the consideration actually received and
receivable therefor, and
(C) treating any such Rights or conversion or exchange rights that remain
outstanding as being subject to exercise on the basis of the consideration
payable upon the exercise or conversion thereof as is in effect at such time,
PROVIDED, HOWEVER, that any consideration actually received by the
Corporation in connection with the issuance of such Rights shall form part of
the readjustment computation even though such Rights expired without being
exercised. The Conversion Price shall be adjusted as provided in Section
6(d)(ii) and any applicable provisions of Section 6(d)(iii) as a result of any
increase in the number of Additional Shares issuable, or any decrease in the
consideration payable upon any issuance of Additional Shares, pursuant to any
anti dilution provisions of any Rights or Convertible Securities.
(vii) (A) If any Additional Shares, Convertible Securities or Rights are
issued for cash, the consideration received therefor shall be deemed to be the
amount of cash received.
(B) If any Additional Shares, Convertible Securities or Rights are offered
by the Corporation for subscription, the consideration received therefor shall
be deemed to be the subscription price.
(C) If any Additional Shares, Convertible Securities or Rights are sold to
underwriters or dealers for public offering without a subscription offering, the
consideration received therefor shall be deemed to be the public offering price.
(D) In any case covered by Section 6(d)(vii) (A), (B) or (C), in
determining the amount of any consideration received by the Corporation in whole
or in part other than in cash, the amount of such consideration shall be deemed
to be the fair market value of such consideration as determined in good faith by
the Board of Directors, and evidence of such determination shall be filed with
the minutes of the Corporation. If Additional Shares are issued as part of a
unit with Rights, the consideration received for the Rights shall be deemed to
be the portion of the consideration received for such unit determined in good
faith at the time of issuance by the Board of Directors, and evidence of such
determination shall be filed with the minutes of the Corporation. If the Board
of Directors does not make any such determination, the consideration received
for the Rights shall be deemed to be zero. In either event, the consideration
received for the Additional Shares shall be deemed to be the consideration
received for such unit less the consideration deemed to have been received for
the Rights.
(E) In any case covered by Section 6(d)(vii) (A), (B), (C) or (D), in
determining the amount of consideration received by the Corporation, (I) any
amounts received or receivable for accrued interest or accrued dividends shall
be excluded and (II) any compensation, underwriting commissions or concessions
or expenses paid or incurred in connection therewith shall not be deducted.
(F) In any case covered by Section 6(d)(vii) (A), (B), (C) or (D), there
shall be added to the consideration received by the Corporation at the time of
issuance or sale (I) the minimum aggregate amount of additional consideration
payable to the Corporation upon the exercise of Rights that relate to
Convertible Securities and (II) the minimum aggregate amount of consideration
payable upon the conversion or exchange thereof.
(G) If any Additional Shares, Convertible Securities or Rights are issued
in connection with any merger, consolidation or other reorganization in which
the Corporation is the surviving corporation, the amount of consideration
received therefor shall be deemed to be the fair market value, as determined in
good faith by the Board, of such portion of the assets and business of the
non-surviving person or persons as the Board of Directors determines in good
faith to be attributable to such Additional Shares, Convertible securities or
Rights, and evidence of such determination shall be filed with the minutes of
the Corporation.
(viii) If the Corporation effects any merger, consolidation or other
reorganization to which the Corporation is a party (other than a merger or
consolidation in which the Company is the surviving or continuing corporation
and in which each share of Common Stock outstanding immediately prior to the
merger or consolidation remains unchanged in all material respects), any sale or
conveyance to another person of all or substantially all the assets of the
Corporation or any statutory exchange of securities with another person
(including any exchange effected in connection with a merger of a third person
into the Corporation), then effective provision shall be made in such
transaction so that the holder of each share of Series B Preferred Stock then
outstanding shall have the right thereafter to convert such share into the kind
and amount of consideration receivable pursuant to such transaction by a holder
of the number of shares of Common Stock into which such share of Series B
Preferred Stock might have been converted immediately prior to such transaction,
assuming such holder of Common Stock failed to exercise its rights of election,
if any, as to the kind or amount of consideration receivable upon such
transaction (provided that if the kind or amount of consideration receivable
pursuant to such transaction is not the same for each share of Common Stock in
respect of which such rights of election shall not have been exercised
("NON-ELECTING SHARE"), then, for purposes of this Section 6(d)(viii), the kind
and amount of consideration receivable pursuant to such transaction for each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). Thereafter, the holders of
shares of Series B Preferred Stock shall be entitled to appropriate adjustments
with respect to their conversion rights to the end that the provisions set forth
in this Section 6 shall correspondingly be made applicable, as nearly as may
reasonably be, to any consideration thereafter deliverable on conversion of
shares of the Series B Preferred Stock. Notwithstanding the foregoing, this
Section 6(d)(viii) shall not apply with regard to the Series B Preferred Stock
to an event which is treated as a liquidation, dissolution or winding-up of the
Corporation with respect to such series pursuant to Section 4.
(ix) If the Corporation distributes generally to holders of its outstanding
shares of Common Stock, evidences of its debt, securities or other assets
(excluding any cash dividends if the annualized per share amount thereof does
not exceed 9.0% of the Current Market Price of the Common Stock as of the
trading day immediately preceding the date of declaration of such dividend and
excluding any dividends or distributions payable in Rights or Convertible
Securities for which adjustment is otherwise made pursuant to this Section
6(d)), the Conversion Price shall be adjusted by multiplying such Conversion
Price in effect immediately prior to the record date for the dividend or
distribution by a fraction of which (x) the numerator shall be the Current
Market Price per share of the Common Stock on such record date less the then
fair market value, as determined in good faith by the Board, of the portion of
the evidences of debt, securities or other assets so distributed or applicable
to the holder of one share of Common Stock and (y) the denominator shall be the
Current Market Price per share of the Common Stock on such record date. Such
adjustment shall become effective immediately after the record date for such
dividend or distribution.
(x) No adjustment in the Conversion Price shall be required to be made
unless it would require an increase or decrease of at least one cent, but any
adjustments not made because of this Section 6(d)(x) shall be carried forward
and taken into account in any subsequent adjustment otherwise required. All
calculations under this Section 6(d) shall be made to the nearest cent or to the
nearest 1/100th of a share, as the case may be. All adjustments with respect to
a transaction or event shall apply to subsequent such transactions and events.
Anything in this Section 6(d) to the contrary notwithstanding, the Board of
Directors shall be entitled (but shall not be obligated) to make such
irrevocable reduction in the Conversion Price, in addition to the adjustments
required by this Section 6(d), as in its discretion it shall determine to be
advisable in order to avoid or diminish any income deemed to be received for
United States Federal income tax purposes by any holder of shares of Common
Stock or Series B Preferred Stock resulting from any event or occurrence giving
rise to an adjustment pursuant to this Section 6(d) or from any similar event or
occurrence, and evidence of the Board of Director's determination of such
adjustment shall be filed with the minutes of the Corporation.
(xi) Whenever the Conversion Price is adjusted pursuant to this Section
6(d),
(A) the Corporation shall promptly file with the minutes of the Corporation
a certificate of the Corporation's chief accounting officer setting forth such
Conversion Price (and any change in the kind or amount of consideration to be
received by the holders of shares of the Series B Preferred Stock upon
conversion) after such adjustment and setting forth a brief statement of the
facts requiring such adjustment and the manner of computing the same, and
(B) a notice stating that such Conversion Price has been adjusted, stating
the effective date of such adjustment and enclosing such certificate shall
forthwith be mailed by the Corporation to the holders of shares of the Series B
Preferred Stock at their addresses as shown on the stock books of the
corporation.
(xii) If as a result of any adjustment pursuant to this Section 6(d), the
holder of any share of Series B Preferred Stock surrendered for conversion
becomes entitled to receive any consideration other than Common Stock,
(A) the Conversion Price with respect to such other consideration shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common Stock
contained in this Section 6(d), and
(B) in the case such consideration shall consist of shares of Common Stock
and some other kind of consideration or of two or more kinds of consideration,
the Board shall determine in good faith the fair allocation of the adjusted
Conversion Price between or among such types of consideration, and evidence of
such determination shall be filed with the minutes of the corporation.
(e) ALTERNATE SOURCES FOR COMMON STOCK SHARE PRICES. If for any reason the
Common Stock is no longer reported on NASDAQ or a national securities exchange
then the high and low price of a share of Common Stock on the relevant day for
purposes of calculating the Current Market Price shall be determined on the
basis of the last reported sale price, regular way, of the Common Stock as
reported on the composite tape, or similar reporting system, for issues listed
or admitted to trading on the principal national securities exchange on which
the Common Stock is then listed or admitted to trading or, if there is no such
reported sale on the day in question, on the basis of the average of the high
and low bid and asked quotations as so reported or, if the Common Stock is not
then listed or admitted to trading on any national securities exchange or on
NASDAQ, on the basis of the average of the high bid and low asked quotations on
the day in question in the over-the-counter market as reported by the National
Association of Securities Dealers Automated Quotation System, or, if not so
quoted, as reported by National Quotation Bureau, Incorporated, or a similar
organization. If the Current Market Price is not determinable as aforesaid, they
shall be determined in good faith by the Board of Directors of the Corporation
and evidence of such determination shall be filed with the minutes of the
Corporation.
(f) SPECIFIED EVENTS. For purposes of this Section 6(f), a "SPECIFIED
EVENT" shall occur if (i) the Corporation authorizes the granting to the holders
of the Common Stock of any Rights or of any other rights, (ii) there is any
capital stock reorganization or reclassification of the Common Stock (other than
a subdivision or combination of the outstanding Common Stock and other than a
change in the par value of the Common Stock), or any merger, consolidation or
other reorganization to which the Corporation is a party, or any statutory
exchange of securities with another person and for which approval of any
stockholders of the Corporation is required, or any sale or transfer of all or
substantially all the assets of the Corporation or (iii) there is a voluntary
liquidation, dissolution or winding up of the Corporation. If a Specified Event
occurs, the Corporation shall cause to be filed with the minutes of the
Corporation, and shall cause to be mailed to the holders of shares of the Series
B Preferred Stock at their addresses as shown on the stock books of the
Corporation, at least 10 days prior to the applicable date specified below, a
notice stating,
(A) the date on which a record is to be taken for the purpose of any
distribution or Rights relating to such Specified Event or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such distribution or Rights are to be determined, or
(B) the date on which the reorganization, reclassification, consolidation,
merger, statutory exchange, sale, transfer, dissolution, liquidation or
winding-up relating to such Specified Event is expected to become effective, and
the date as of which it is expected that holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such Specified Event.
(g) RESERVATION OF COMMON STOCK. The Corporation shall at all times reserve
and keep available, free from preemptive and subscription rights, out of its
authorized but unissued shares of Common Stock, for the purpose of effecting
conversions of the Series B Preferred Stock, the full number of shares of Common
Stock deliverable upon the conversion of all outstanding shares of Series B
Preferred Stock not theretofore converted. For this purpose, the number of
shares of Common Stock deliverable upon the conversion of all outstanding shares
of Series B Preferred Stock shall be computed as if at the time of computation
all such outstanding shares were held by a single holder.
(h) LISTING. With respect to any securities required to be delivered upon
conversion of the Series B Preferred Stock, the Corporation shall use all
commercially reasonable efforts to list or have approved for quotation such
securities prior to such delivery upon each securities exchange or automated
quotation system, if any, on which any securities of such class are already
listed or approved for quotation.
(i) TAXES. The Corporation shall pay all documentary stamp or similar issue
or transfer taxes payable in respect of the issue or delivery of securities on
conversion of the Series B Preferred Stock; PROVIDED, HOWEVER, that (i) the
Corporation shall not be required to pay any tax payable in respect of any
transfer involved in the issue or delivery of securities in a name other than
that of the holder of the shares of Series B Preferred Stock, to be converted
and (ii) no such issue or delivery shall be made unless and until such holder
has paid to the Corporation the amount of any such tax or has established, to
the satisfaction of the Corporation, that such tax has been paid or provided
for.
(j) TERMINATION OF CONVERSION RIGHTS. (i) If within any period of 30
consecutive trading days for a period of at least 20 trading days (which 20 days
must include the last day of the 30 consecutive trading day period), the average
of the high and low sales prices of the Corporation's Common Stock on the NASDAQ
for such 20 trading days rounded up to the nearest whole cent (the "Average
Daily Trading Price") exceeds 120% of the Conversion Price then in effect, at
its option and in its sole discretion upon notice given as set forth below, the
Corporation may terminate the conversion rights set forth in this Section 6.
Beginning on the 10th day following receipt from the Corporation of the notice
setting forth its intention to terminate the conversion rights and ending on the
45th day after receipt thereof, the Corporation shall be required to redeem any
shares of Series B Preferred Stock (i) at a redemption price equal to the
Liquidation Amount plus all accrued and unpaid dividends (including any interest
thereon) if redeemed prior to the third anniversary of the issuance of the
Series B Preferred Stock, and (ii) at the redemption prices then in effect as
set forth in Section 5(b) if redeemed on or after the third anniversary of the
issuance of the Series B Preferred Stock, of any holder that so requests, which
request must be received by the Corporation on or prior to the 45th day after
such holder receives the notice of the conversion termination. In order to
exercise this right, such holder must submit its request to the Corporation in
the manner set forth in the notice of conversion termination, the certificates
for the shares to be so redeemed and the number of shares to be redeemed if less
than the number represented by the certificate and the name in which to issue
any such shares not so redeemed, if different from the holder. Following the
45th day after the holders receive the conversion termination notice, the
conversion rights for all outstanding shares of Series B Preferred Stock shall
terminate with no further action by the Corporation. For purposes of this
paragraph, a holder shall be deemed to have received notice, if such notice is
sent by facsimile to a facsimile number provided by such party for such purpose,
on the day it is so sent. If sent by first class mail, postage prepaid,
addressed to such holder at the last address for such holder that appears on the
books of the Corporation, notice shall be deemed to have been received on the
third business day after such notice has been mailed. If notice is also required
to be published as set forth in paragraph (ii) below, notice shall be deemed to
have been received on the day that it is so published.
(ii) So long as the Series B Preferred Stock is not registered under the
Securities Act, notice of the termination of conversion rights shall be mailed
by first class mail, postage prepaid, addressed to the holders of record of the
Series B Preferred Stock at their respective last addresses as they appear of
the books of the Corporation and may be provided by facsimile to any number
provided by the holder for that purpose. If the Corporation registers the
outstanding shares of Series B Preferred Stock under the Securities Act, then
such notice shall be given by mail as described in the preceding sentence and
the Corporation shall also publish any such notice as set forth in Section 5(c)
hereof. The notice shall set forth:
(A) the Average Daily Trading Price for the 20 trading days in question,
the dates for which such amounts are presented, the Conversion Price then in
effect for each such day and the percentage by which the Current Market Price
exceeds such Conversion Price;
(B) the redemption price then in effect;
(C) the place or places where certificates for the shares are to be
surrendered for redemption; and
(D) that dividends on the shares to be redeemed will cease to accrue on the
date the holder delivers any shares to the Corporation for redemption (unless
the Corporation shall default in redeeming the shares on the redemption date).
7. STATUS OF SHARES. Upon any redemption, repurchase, conversion, exchange
or other acquisition by the Corporation of shares of Series B Preferred Stock,
the shares of Series B Preferred Stock, so redeemed, repurchased, converted,
exchanged or acquired shall be retired and canceled and shall not be available
for reissuance.
8. VOTING RIGHTS. (a) The holders of shares of the Series B Preferred Stock
shall not have the right to vote on or consent to any matter as shareholders of
the Corporation, except as required by applicable law or as otherwise provided
below. All matters on which the holders of the Series B Preferred Stock have the
right to vote may be approved at an annual or special meeting by holders of the
minimum number of shares of Series B Preferred Stock that would be required to
approve a matter if all shares were present and voting at a meeting called to
consider such matter or may be approved by one or more written consents signed
by all of the holders of shares of Series B Preferred Stock.
(b) The consent of holders of at least a majority of the outstanding shares
of Series B Preferred Stock (voting separately as a class but excluding from any
calculation any shares of Series B Preferred Stock held by the Corporation or
any subsidiary thereof) shall be necessary to amend, alter or repeal any of the
provisions of this Article XII of the Articles of Incorporation of the
Corporation which would adversely affect the powers, preferences or rights of
the holders of shares of Series B Preferred Stock then outstanding.
(c) If at any time the equivalent of six quarterly dividends payable on the
outstanding shares of Series B Preferred Stock are accrued and unpaid, whether
or not consecutive and whether or not declared, the holders of all outstanding
shares of Series B Preferred Stock, voting as a single class, together with the
holders entitled to vote of each series of Series A Preferred Stock and the
holders entitled to vote of all other series of Preferred Stock of the
Corporation that rank PARI PASSU with or senior to the Series B Preferred Stock
and have similar voting rights, shall be entitled to elect at the next annual
meeting of shareholders of the Corporation 25% of the directors to the
Corporation's Board of Directors, but no less than two directors (or such
greater number as shall be provided in any other series of Preferred Stock that
shall at the time be entitled to vote with the Series B Preferred Stock to elect
directors). The proportion of the total vote of all holders of Preferred Stock
entitled to vote for such directors attributable to the holders of the Series B
Preferred Stock shall be based on the percentage the aggregate Liquidation
Amount for all outstanding shares of Series B Preferred Stock bears to the
aggregate liquidation amounts of all other shares of Preferred Stock entitled to
vote. Such directors shall serve until all accumulated and unpaid dividends have
been paid or declared and funds sufficient for their payment have been set aside
therefor.
(d) For the avoidance of doubt, except as otherwise set forth in this
Section 8 or as required by law, the holders of the Series B Preferred Stock
shall not have the right to vote or consent with respect to (i) the increase or
decrease in the amount of authorized capital stock of any class or series, other
than increases or decreases in Series B Preferred Stock (to the extent specified
elsewhere herein), (ii) the authorization, creation (by way of reclassification
or otherwise) or issuance by the Board of Directors of any series of Preferred
Stock, other than any series that will rank senior to the Series B Preferred
Stock as to dividend distributions and distributions upon the liquidation,
winding up or dissolution of the Corporation or any obligation or security
convertible into or exercisable for or exchangeable into or evidencing a right
to purchase, shares of any series of Preferred Stock or the issuance by the
Board of Directors of any previously authorized class of capital stock of the
Corporation, or (iii) any merger, acquisition, disposition or share exchange
involving the Corporation where no shareholder vote is otherwise required or
pursuant to which the holders of the Series B Preferred Stock receive cash at
least equal to the Liquidation Amount.
(e) The consent of the holders of at least a majority of the outstanding
shares of Series B Preferred Stock (voting separately as a class, but excluding
from any calculation any shares of Series B Preferred Stock held by the
Corporation or any subsidiary thereof) shall be necessary to increase the
authorized number of shares of Series B Preferred Stock and to authorize, create
or issue any series of Preferred Stock that will rank senior to the Series B
Preferred Stock as to dividend distributions, and distributions upon the
liquidation, winding up or dissolution of the Corporation.
ARTICLE II
The foregoing amendment was adopted on September 19, 2000.
ARTICLE III
MANNER OF ADOPTION AND VOTE
Section 1. ACTION BY DIRECTORS. The amendment set forth above was adopted
by the Board of Directors of the Corporation and shareholder action was not
required.
ARTICLE IV
COMPLIANCE WITH LEGAL REQUIREMENTS
The manner of the adoption of the Articles of Amendment and the vote by
which they were adopted constitute full legal compliance with the provisions of
the Act, the Articles of Incorporation, and the Bylaws of the Corporation.
IN WITNESS WHEREOF, the undersigned Corporation has caused these Articles
of Amendment to be signed and verified by a duly authorized officer, acting for
and on behalf of such Corporation; and the undersigned verifies subject to the
penalties of perjury that the facts contained herein are true this 19th day of
September, 2000.
AMTRAN, INC.
by
Name:
-----------------------------
Title: