EXHIBIT 4.1
CERTIFICATE OF DESIGNATIONS
SERIES G 6% CUMULATIVE CONVERTIBLE PREFERRED STOCK
SERIES H SPECIAL PREFERRED STOCK
SERIES I 6% CUMULATIVE CONVERTIBLE PREFERRED STOCK
SERIES J SPECIAL PREFERRED STOCK
OF
SHARED TECHNOLOGIES INC.
SHARED TECHNOLOGIES INC., a Delaware corporation, certifies that
pursuant to the authority expressly granted to the Board of Directors in Article
FOURTH of the Corporation's Restated Certificate of Incorporation, the Board of
Directors of the Corporation duly adopted the following resolution creating four
series of Preferred Stock designated as Series G 6% Cumulative Convertible
Preferred Stock, Series H Special Preferred Stock, Series I 6% Cumulative
Convertible Preferred Stock and Series J Special Preferred Stock:
RESOLVED: That this Corporation create and authorize 250,000
shares of Series G 6% Cumulative Convertible
Preferred Stock and 200,000 shares of Series H
Special Preferred Stock, each with the terms, rights
and preferences as set forth in the Designation of
Rights and Preferences, attached hereto as Exhibit A
and Exhibit B, respectively, and made a part of these
resolutions, and to be issued in accordance with the
provisions of the Merger Agreement;
RESOLVED: That this Corporation create and authorize up to
250,000 shares of Series I 6% Cumulative Convertible
Preferred Stock and 200,000 shares of Series J
Special Preferred Stock, each with the terms, rights
and preferences as set forth in the Designation of
Rights and Preferences, attached hereto as Exhibit C
and Exhibit D, respectively, and made a part of these
resolutions, and to be issued in accordance with the
provisions of the Exchange Agreement;
RESOLVED: That in connection with the foregoing resolutions,
each of the Chief Executive Officer and President,
the Chief Financial Officer, Treasurer, any Vice
President and Secretary of this Corporation be, and
each hereby is, authorized and directed, for and on
behalf of this Corporation, to file such documents,
including, but not limited to, the Designation of
Rights and Preferences annexed hereto as
Exhibits A, B, C and D as are necessary with the
Secretary of State of Delaware.
IN WITNESS WHEREOF, said SHARED TECHNOLOGIES INC. has caused this
Certificate of Designations of its Series G 6% Cumulative Convertible Preferred
Stock, Series H Special Preferred Stock, Series I 6% Cumulative Convertible
Preferred Stock and Series J Special Preferred Stock to be duly executed by its
Senior Vice President and attested to by its Secretary and has caused its
corporation seal to be affixed hereto as of the 8th day of March, 1996.
SHARED TECHNOLOGIES INC.
By:/s/ Vincent DiVincenzo
Vincent DiVincenzo,
Senior Vice President
(Corporation Seal)
ATTEST:
/s/ Kenneth M. Dorros
Kenneth M. Dorros, Secretary
2
Designation of Series G 6% Cumulative Convertible
Preferred Stock
- -------------------------------------------------
1. Designation; Rank. The series of Preferred Stock designated
and known as "Series G 6% Cumulative Convertible Preferred Stock" shall consist
of 250,000 shares, par value $.01 per share. Shares of the Cumulative
Convertible Preferred Stock shall, with respect to dividend rights and rights on
liquidation, winding up and dissolution, rank senior to all classes of common
stock of the Corporation (including, without limitation, the Common Stock, par
value $.004 per share (the "Common Stock")), and each other class of capital
stock or series of preferred stock hereafter created which does not expressly
provide that it ranks on a parity with the Cumulative Convertible Preferred
Stock as to dividend rights and rights on liquidation, winding up and
dissolution ("Junior Stock"), on a parity with the Series D Preferred Stock,
Special Preferred Stock and each other class of capital stock or series of
preferred stock hereafter created which expressly provides that it ranks on a
parity with the Cumulative Convertible Preferred Stock as to dividend rights and
rights on liquidation, winding up and dissolution ("Parity Stock"), and, junior
to the Series C Preferred Stock and each other class of capital stock or series
of preferred stock hereafter created which has been approved by the holders of
the Cumulative Convertible Preferred Stock in accordance with Section 4 and
which expressly provides that it ranks senior to the Cumulative Convertible
Preferred Stock as to dividend rights and rights on liquidation, winding up and
dissolution ("Senior Stock").
2. Dividends.
(a) The holders of the Cumulative Convertible Preferred Stock
shall be entitled to receive, out of any funds legally available therefor,
dividends in cash at the annual rate of 6% of the Liquidation Preference (as
hereinafter defined) thereof, in equal quarterly payments in arrears on March
31, June 30, September 30 and December 31 in each year (each such date is
referred to as a "Dividend Payment Date") commencing on March 31, 1996, payable
in preference and priority to any payment of any cash dividend on any Junior
Stock, junior in preference and priority to any payment of any cash dividend on
any Senior Stock and on a parity with any payment of any cash dividend on any
Parity Stock. Such dividends shall be paid to the holders of record at the close
of business on the date specified by the Board of Directors of the Corporation
at the time such dividend is declared. If the Dividend Payment Date is not a
business day, the Dividend Payment Date shall be the next succeeding business
day.
-2-
(b) Each of such quarterly dividends shall be fully
cumulative, whether or not earned or declared, and shall accrue without
interest, from the first day of the quarter in which such dividend may be
payable as herein provided until the applicable Dividend Payment Date with
respect thereto (except that with respect to the first quarterly dividend, such
dividend shall accrue from March 13, 1996). In addition, if not fully paid in
cash on such Dividend Payment Date, each such dividend shall accrue interest at
an annual rate of 12% thereof from such Dividend Payment Date until the date
fully paid in cash.
(c) In the event that the Corporation shall have cumulative,
accrued and unpaid dividends outstanding (including any interest accruing
thereon as herein provided) immediately prior to and in the event of a
conversion of any shares of Cumulative Convertible Preferred Stock as provided
in Section 5 hereof, the Corporation shall, at the option of the holder of such
shares, pay in cash to such holder the full amount of any such dividends
(including any interest accruing thereon as herein provided) or allow such
dividends (including any interest accruing thereon as herein provided) to be
converted into Common Stock in accordance with, and pursuant to the terms
specified in, Section 5 hereof.
3. Liquidation, Dissolution or Winding Up.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of
Cumulative Convertible Preferred Stock then outstanding shall be entitled to be
paid out of the assets of the Corporation available for distribution to its
stockholders, after and subject to the payment in full of all amounts required
to be distributed to the holders of any Senior Stock but before any payment
shall be made to the holders of any Junior Stock, and on a parity with any
payment to the holders of Parity Stock, an amount equal to $100 per share
(subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization affecting such shares) (the
"Liquidation Preference") plus with respect to any date, an additional amount
(the "Additional Amount") equal to the total amount of dividends a holder of
such share of Cumulative Convertible Preferred Stock would have received from
the original issue date of such share of Cumulative Convertible Preferred Stock
until such date, if dividends were paid quarterly in cash as herein provided at
the rate of 10% per annum minus the total amount of cash dividends actually paid
on such share of Cumulative Convertible Preferred Stock without giving effect to
any accrued and paid interest on such dividends as herein provided. If upon any
such liquidation, dissolution or winding up of the Corporation the remaining
assets
-3-
of the Corporation available for distribution to its stockholders shall be
insufficient to pay the holders of shares of Cumulative Convertible Preferred
Stock the full amount to which they shall be entitled, the holders of Cumulative
Convertible Preferred Stock shall share ratably in any distribution of the
remaining assets and funds of the Corporation in proportion to the respective
amounts which would otherwise be payable in respect of the shares held by them
upon such distribution if all amounts payable on or with respect to such shares
were paid in full.
(b) After the payment of all preferential amounts required to
be paid to the holders of Senior Stock, Parity Stock and Cumulative Convertible
Preferred Stock upon the dissolution, liquidation or winding up of the
Corporation, the holders of shares of Junior Stock then outstanding shall be
entitled to receive the remaining assets and funds of the Corporation available
for distribution to its stockholders.
(c) Written notice of such liquidation, dissolution or winding
up, stating a payment date and the place where said payment shall be made, shall
be given by mail, postage prepaid, or by telecopier, not less than 20 days prior
to the payment date stated therein, to the holders of record of the Cumulative
Convertible Preferred Stock, such notice to be addressed to each such holder at
its address as shown by the records of the Corporation.
(d) Whenever the distribution provided for in this Section 3
shall be payable in property other than cash, the value of such distribution
shall be the fair market value of such property as determined in good faith by
the Board of Directors of the Corporation.
(e) For the purposes of this Section 3, neither the voluntary
sale, conveyance, exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all of the property or assets of
the Corporation nor the consolidation or merger of the Corporation with one or
more other corporations shall be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, unless such voluntary sale, conveyance,
exchange or transfer shall be in connection with a plan of liquidation,
dissolution or winding up of the business of the Corporation.
4. Voting.
(a) Except as may be otherwise provided in these terms
of the Cumulative Convertible Preferred Stock or by law, the
-4-
Cumulative Convertible Preferred Stock shall not be entitled to vote.
(b) The Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Cumulative Convertible
Preferred Stock so as to affect adversely the Cumulative Convertible Preferred
Stock, without the written consent or affirmative vote of the holders of at
least two-thirds of the then outstanding shares of Cumulative Convertible
Preferred Stock, given in writing or by vote at a meeting, consenting or voting
(as the case may be) separately as a class. For this purpose, without limiting
the generality of the foregoing, the authorization or issuance of any series of
Preferred Stock with preference or priority over the Cumulative Convertible
Preferred Stock as to the right to receive either dividends or amounts
distributable upon liquidation, dissolution or winding up of the Corporation
shall be deemed to affect adversely the Cumulative Convertible Preferred Stock,
and the authorization or issuance of any series of Preferred Stock on a parity
with the Cumulative Convertible Preferred Stock as to the right to receive
either dividends or amounts distributable upon liquidation, dissolution or
winding up of the Corporation shall be deemed not to affect adversely the
Cumulative Convertible Preferred Stock.
(c) In the event that the Corporation shall fail to declare
and pay in full dividends on the Cumulative Convertible Preferred Stock as set
forth in Section 2(a) hereof on four consecutive Dividend Payment Dates then the
number of directors constituting the Board of Directors shall be increased by
one director and the holders of shares of the Cumulative Convertible Preferred
Stock, in addition to any other rights that they may otherwise have, shall have
the exclusive right, voting separately as a class, to elect such one director of
the Corporation.
(d) In addition to the rights specified in the foregoing
Section 4(c), in the event that the Corporation shall fail to declare and pay in
full dividends on the Cumulative Convertible Preferred Stock as set forth in
Section 2(a) hereof on eight consecutive Dividend Payment Dates, then the number
of directors constituting the Board of Directors shall be increased by an
additional one director and the holders of shares of the Cumulative Convertible
Preferred Stock, in addition to any other rights that they may otherwise have,
shall have the exclusive right, voting separately as a class, to elect such
additional one director of the Corporation (in addition to the additional
director elected pursuant to Section 4(c)).
-5-
(e) Any voting right pursuant to Section 4(c) or (d) may be
exercised initially either by written consent or at a special meeting of the
holders of the Cumulative Convertible Preferred Stock, called as hereinafter
provided, or at any annual meeting of stockholders held for the purpose of
electing directors, and thereafter at each such annual meeting until such time
as all dividends accumulated on the shares of the Cumulative Convertible
Preferred Stock shall have been paid in full, at which time such voting right
and the term of any director elected pursuant to this Section 4 shall terminate
and the number of directors constituting the full Board of Directors shall be
reduced accordingly.
(f) At any time when the voting right specified in either
Section 4(c) or (d) shall have vested in holders of shares of the Cumulative
Convertible Preferred Stock as described in such Section 4(c) or (d), as the
case may be, and if such right shall not already have been exercised by written
consent, a proper officer of the Corporation may call, and, upon the written
request, addressed to the Secretary of the Corporation, of the record holders of
shares representing twenty-five percent (25%) or more of the then outstanding
shares of Cumulative Convertible Preferred Stock, shall call, a special meeting
of the holders of the Cumulative Convertible Preferred Stock. Such meeting shall
be held at the earliest practicable date upon the notice required for annual
meetings of stockholders at the place for holding annual meetings of
stockholders of the Corporation, or, if none, at a place in New York City
designated by the Board of Directors.
(g) At any meeting held for the purpose of electing directors
at which the holders of shares of Cumulative Convertible Preferred Stock shall
have the right to elect a director as provided herein, the presence in person or
by proxy of the holders of shares representing more than fifty percent (50%) of
the then outstanding shares of Cumulative Convertible Preferred Stock shall be
required and shall be sufficient to constitute a quorum of such class for the
election of directors by such class.
(h) Any director elected by holders of Cumulative Convertible
Preferred Stock pursuant to the voting right created under this Section 4 shall
hold office until the next annual meeting of stockholders (unless such term has
previously terminated pursuant to Section 4(e)) and any vacancy in respect of
any such director shall be filled only by vote of the holders of such Cumulative
Convertible Preferred Stock entitled to elect such director by written consent
or at a special meeting called in accordance with the procedures set forth in
Section 4(f), or, if no such special meeting is called or written consent
executed, at the next annual meeting of stockholders. Upon any termination of
such
-6-
voting right, subject to applicable law, the term of office of the director
elected by holders of Cumulative Convertible Preferred Stock voting separately
as a class pursuant to this Section 4 shall terminate.
(i) In exercising the voting rights set forth in this
Section 4, each share of Cumulative Convertible Preferred Stock
shall have one vote.
5. Optional Conversion. The holders of the Cumulative
Convertible Preferred Stock shall have conversion rights as follows
(the "Conversion Rights"):
(a) Right to Convert. Each share of Cumulative Convertible
Preferred Stock shall be convertible, at the option of the holder thereof, at
any time and from time to time, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing (A) the sum of (x) the
Liquidation Preference thereof and (y) the Additional Amount thereof by (B) the
Conversion Price (as defined below) in effect at the time of conversion;
provided, that the Company may, at its option, elect to pay the Additional
Amount in cash in lieu of shares of Common Stock at the time of conversion. The
conversion price at which shares of Common Stock shall be deliverable upon
conversion of Cumulative Convertible Preferred Stock without the payment of
additional consideration by the holder thereof (the "Conversion Price") shall
initially be $6.3750. Such initial Conversion Price, and the rate at which
shares of Cumulative Convertible Preferred Stock may be converted into shares of
Common Stock, shall be subject to adjustment as provided below.
In the event of a notice of redemption of any shares of
Cumulative Convertible Preferred Stock pursuant to Section 6 hereof, the
Conversion Rights of the shares designated for redemption shall terminate at the
close of business on the fifth full day preceding the date fixed for redemption,
unless the redemption price is not paid when due, in which case the Conversion
Rights for such shares shall continue until such price is paid in full. In the
event of a liquidation of the Corporation, the Conversion Rights shall terminate
at the close of business on the first full day preceding the date fixed for the
payment of any amounts distributable on liquidation to the holders of Cumulative
Convertible Preferred Stock.
(b) Fractional Shares. No fractional shares of Common
Stock shall be issued upon conversion of the Cumulative Convertible Preferred
Stock. In lieu of any fractional shares to which the holder would otherwise be
entitled, the Corporation shall pay cash
-7-
equal to such fraction multiplied by the then effective Conversion
Price.
(c) Mechanics of Conversion.
(i) In order for a holder of Cumulative Convertible
Preferred Stock to convert shares of Cumulative Convertible Preferred
Stock into shares of Common Stock, such holder shall surrender the
certificate or certificates for such shares of Cumulative Convertible
Preferred Stock at the office of the transfer agent for the Cumulative
Convertible Preferred Stock (or at the principal office of the
Corporation if the Corporation serves as its own transfer agent),
together with written notice that such holder elects to convert all or
any number of the shares of the Cumulative Convertible Preferred Stock
represented by such certificate or certificates. Such notice shall
state such holder's name or the names of the nominees in which such
holder wishes the certificate or certificates for shares of Common
Stock to be issued. If required by the Corporation, certificates
surrendered for conversion shall be endorsed or accompanied by a
written instrument or instruments of transfer, in a form satisfactory
to the Corporation, duly executed by the registered holder or his or
its attorney duly authorized in writing. The date of receipt of such
certificates and notice by the transfer agent (or by the Corporation if
the Corporation serves as its own transfer agent) shall be the
conversion date ("Conversion Date"). The Corporation shall, as soon as
practicable after the Conversion Date, issue and deliver at such office
to such holder of Cumulative Convertible Preferred Stock, or to his or
its nominees, a certificate or certificates for the number of shares of
Common Stock to which such holder shall be entitled, together with cash
in lieu of any fraction of a share, and in the case of the conversion
of less than all of the shares of the Cumulative Convertible Preferred
Stock represented by a certificate, a new certificate for the number of
shares of Cumulative Convertible Preferred Stock not so converted.
(ii) The Corporation shall at all times when the Cumulative
Convertible Preferred Stock shall be outstanding, reserve and keep
available out of its authorized but unissued stock, for the purpose of
effecting the conversion of the Cumulative Convertible Preferred Stock,
such number of its duly authorized shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all outstanding
Cumulative Convertible Preferred Stock. Before taking any action which
would cause an adjustment reducing the Conversion Price below the then
par value of the shares of Common Stock
-8-
issuable upon conversion of the Cumulative Convertible Preferred Stock,
the Corporation will take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and nonassessable shares of Common
Stock at such adjusted Conversion Price.
(iii) All shares of Cumulative Convertible Preferred Stock
which shall have been surrendered for conversion as herein provided
shall no longer be deemed to be outstanding and all rights with respect
to such shares, including the rights, if any, to receive notices and to
vote, shall immediately cease and terminate on the Conversion Date,
except only the right of the holders thereof to receive shares of
Common Stock in exchange therefor and payment of any accrued and unpaid
dividends thereon. Any shares of Cumulative Convertible Preferred Stock
so converted shall be retired and cancelled and shall not be reissued,
and the Corporation may from time to time take such appropriate action
as may be necessary to reduce the authorized Cumulative Convertible
Preferred Stock accordingly.
(d) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the Original Issue Date
effect a subdivision of the outstanding Common Stock, the Conversion Price then
in effect immediately before that subdivision shall be proportionately
decreased. If the Corporation shall at any time or from time to time after the
Original Issue Date combine the outstanding shares of Common Stock, the
Conversion Price then in effect immediately before the combination shall be
proportionately increased. Any adjustment under this paragraph shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
(e) Adjustment for Certain Dividends and Distributions. In the
event the Corporation at any time, or from time to time, after the Original
Issue Date shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of Common Stock, then and in each such event the
Conversion Price for the Cumulative Convertible Preferred Stock then in effect
shall be decreased as of the time of such issuance or, in the event such a
record date shall have been fixed, as of the close of business on such record
date, by multiplying the Conversion Price then in effect by a fraction:
(i) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately
-9-
prior to the time of such issuance or the close of business on
such record date; and
(ii) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date plus
the number of shares of Common Stock issuable in payment of such
dividend or distribution; provided, however, if such record date shall
have been fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the
Conversion Price shall be recomputed accordingly as of the close of
business on such record date and thereafter the Conversion Price shall
be adjusted pursuant to this paragraph as of the time of actual payment
of such dividends or distributions.
(f) Adjustments for Other Dividends and Distributions. In the
event the Corporation at any time or from time to time after the Original Issue
Date shall make or issue, or fix a record date for the determination of holders
of Common Stock entitled to receive, a dividend or other distribution payable in
property of the Corporation or securities of the Corporation other than shares
of Common Stock, then and in each such event provision shall be made so that the
holders of the Cumulative Convertible Preferred Stock shall receive upon
conversion thereof in addition to the number of shares of Common Stock
receivable thereupon, the amount and type of such property and securities of the
Corporation that they would have received had their Cumulative Convertible
Preferred Stock been converted into Common Stock on the date of such event and,
with respect to any such securities receivable by them as aforesaid, had
thereafter, during the period from the date of such event to and including the
conversion date, retained such securities during such period giving application
to all adjustments called for during such period under this paragraph with
respect to the rights of the holders of the Cumulative Convertible Preferred
Stock.
(g) Adjustment for Reclassification, Exchange or Substitution.
If the Common Stock issuable upon the conversion of the Cumulative Convertible
Preferred Stock shall be changed into the same or a different number of shares
of any class or classes of stock, whether by capital reorganization,
reclassification, or otherwise (other than a subdivision or combination of
shares or stock dividend provided for above, or a reorganization, merger,
consolidation, or sale of assets provided for below), then and in each such
event the holder of each such share of Cumulative Convertible Preferred Stock
shall have the right thereafter to convert such share into the kind and amount
of shares of stock and
-10-
other securities and property receivable upon such reorganization,
reclassification, or other change, by holders of the number of shares of Common
Stock into which such shares of Cumulative Convertible Preferred Stock might
have been converted immediately prior to such reorganization, reclassification,
or change, all subject to further adjustment as provided herein.
(h) Adjustment for Merger or Reorganization, etc. In case of
any consolidation or merger of the Corporation with or into another corporation
or the sale of all or substantially all of the assets of the Corporation to
another corporation (other than a consolidation, merger or sale which is treated
as as a liquidation pursuant to Section 3(a)), each share of Cumulative
Convertible Preferred Stock shall thereafter be convertible into the kind and
amount of shares of stock or other securities or property to which a holder of
the number of shares of Common Stock of the Corporation deliverable upon
conversion of such Cumulative Convertible Preferred Stock would have been
entitled upon such consolidation, merger or sale; and, in such case, appropriate
adjustment (as determined in good faith by the Board of Directors) shall be made
in the application of the provisions in this Section 5 set forth with respect to
the rights and interests thereafter of the holders of the Cumulative Convertible
Preferred Stock, to the end that the provisions set forth in this Section 5
(including provisions with respect to changes in and other adjustments of the
Conversion Price) shall thereafter be applicable, as nearly as reasonably may
be, in relation to any shares of stock or other property thereafter deliverable
upon the conversion of the Cumulative Convertible Preferred Stock.
(i) No Impairment. The Corporation will not, by amendment of
its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Corporation, but
will at all times in good faith assist in the carrying out of all the provisions
of this Section 5 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Cumulative Convertible Preferred Stock against impairment.
(j) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 5,
the Corporation, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Cumulative Convertible Preferred Stock a certificate setting forth such
adjustment or
-11-
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any holder of Cumulative Convertible Preferred Stock, furnish or cause
to be furnished to such holder a similar certificate setting forth (i) such
adjustments and readjustments, (ii) the Conversion Price then in effect, and
(iii) the number of shares of Common Stock and the amount, if any, of other
property which then would be received upon the conversion of Cumulative
Convertible Preferred Stock.
(k) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend (or any other
distribution) on its Common Stock payable in Common Stock or other
securities of the Corporation;
(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination of its outstanding
shares of Common Stock or a stock dividend or stock distribution
thereon), or of any consolidation or merger of the Corporation into or
with another corporation, or of the sale of all or substantially all of
the assets of the Corporation; or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding up of the Corporation,
then the Corporation shall cause to be filed at its principal office or
at the office of the transfer agent of the Cumulative Convertible
Preferred Stock, and shall cause to be mailed to the holders of the
Cumulative Convertible Preferred Stock at their last addresses as shown
on the records of the Corporation or such transfer agent, at least ten
days prior to the record date specified in (A) below or twenty days
before the date specified in (B) below, a notice stating
(A) the record date of such dividend, distribution,
subdivision or combination or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution, subdivision or
combination are to be determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution, liquidation or
winding up is expected to become effective, and the date
-12-
as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution or
winding up.
6. Redemption.
(a) At any time and from time to time after March 31, 1999,
the Corporation may, at the option of its Board of Directors, redeem the
Cumulative Convertible Preferred Stock in the manner provided below, in whole or
in part, at a redemption price (the "Optional Redemption Price") equal to 100%
of the Liquidation Preference thereof plus the Additional Amount on the
Redemption Date (as defined below); provided that the Corporation shall not
redeem any shares of Cumulative Convertible Preferred Stock unless and until all
accrued and unpaid dividends (including any interest accruing thereon as herein
provided) on the Cumulative Convertible Preferred Stock through the Redemption
Date have been paid in full in cash.
(b) The Corporation shall redeem all outstanding shares of
Cumulative Convertible Preferred Stock on March 31, 2008 in the manner provided
below at a redemption price equal to the Liquidation Preference thereof plus the
Additional Amount on the Redemption Date (the "Mandatory Redemption Price").
(c) At least 30 days prior to the date fixed for any
redemption of Cumulative Convertible Preferred Stock (hereinafter referred to as
the "Redemption Date"), written notice (the "Redemption Notice") shall be
mailed, by first class or registered mail, postage prepaid, to each holder of
record of Cumulative Convertible Preferred Stock to be redeemed, at its address
last shown on the records of the transfer agent of the Cumulative Convertible
Preferred Stock (or the records of the Corporation, if it serves as its own
transfer agent). The Redemption Notice shall state:
(1) whether the redemption is pursuant to Section (6)(a) or
(6)(b) hereof;
(2) the Optional Redemption Price or Mandatory Redemption
Price, as the case may be;
(3) whether all or less than all the outstanding shares of the
Cumulative Convertible Preferred Stock redeemable thereunder are to be
redeemed and the total number of shares of such Cumulative Convertible
Preferred Stock being redeemed;
-13-
(4) the number of shares of Cumulative Convertible Preferred
Stock held, as of the appropriate record date, by the holder that the
Corporation intends to redeem;
(5) the date fixed for redemption (the "Redemption Date");
(6) that the holder is to surrender to the Corporation, at the
place or places where certificates for shares of Cumulative Convertible
Preferred Stock are to be surrendered for redemption, in the manner and
at the price designated, his certificate or certificates representing
the shares of Cumulative Convertible Preferred Stock to be redeemed;
and
(7) that dividends on the shares of the Cumulative Convertible
Preferred Stock to be redeemed shall cease to accumulate on such
Redemption Date unless the Corporation defaults in the payment of the
Optional Redemption Price or the Mandatory Redemption Price, as the
case may be.
(d) Each Holder of Cumulative Convertible Preferred Stock
shall surrender the certificate or certificates representing such shares of
Cumulative Convertible Preferred Stock to the Corporation, duly endorsed, in the
manner and at the place designated in the Redemption Notice, and on the
Redemption Date the full Optional Redemption Price or Mandatory Redemption
Price, as the case may be, for such shares shall be payable in cash to the
Person whose name appears on such certificate or certificates as the owner
thereof, and each surrendered certificate shall be canceled and retired and
shall not under any circumstances be reissued. In the event that less than all
of the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.
(e) Unless the Corporation defaults in the payment in full of
the redemption price, dividends on the Cumulative Convertible Preferred Stock
called for redemption shall cease to accumulate on the Redemption Date, and the
holders of such redeemed shares shall cease to have any further rights with
respect thereto on the Redemption Date, other than the right to receive the
Optional Redemption Price or Mandatory Redemption Price, as the case may be,
without interest.
(f) In the event of any redemption of only a part of the then
outstanding Cumulative Convertible Preferred Stock, the Corporation shall effect
such redemption pro rata among the holders thereof based on the number of shares
of Cumulative Convertible
-14-
Preferred Stock held by such holders on the date of the Redemption Notice.
7. Certain Restrictions.
(a) No dividends or other distributions shall be declared or
paid, set apart for payment or otherwise made on any Junior Stock or Parity
Stock for any period and no shares of any Junior Stock or Parity Stock shall be
redeemed or otherwise repurchased unless (i) full cumulative dividends
(including any interest accruing thereon as herein provided) have been or
contemporaneously are declared and paid (or declared and a sum sufficient for
the payment thereof set apart for such payment) on the Cumulative Convertible
Preferred Stock for all dividend payment periods ending on or prior to the date
such dividend or other distribution shall be declared or paid, set apart for
payment or otherwise made or the date of such redemption or repurchase, as the
case may be, (ii) on the date such dividend shall be declared, paid, set apart
for payment or otherwise made or the date of such redemption or repurchase, as
the case may be, the Corporation shall have made all payments required to be
made by it pursuant to Section 6 and otherwise be in compliance with all of its
obligations hereunder.
(b) The Corporation shall not create or permit to exist any
contractual restriction which would restrict in any way the Corporation's
ability to make required payments on the Cumulative Convertible Preferred Stock
or the Series C Preferred Stock.