EXHIBIT 4.4
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
New Preferred
Designation of Series J Special Preferred Stock
1. Designation; Rank. The series of Preferred Stock designated
and known as "Series J Special Preferred Stock" shall consist of 200,000 shares,
par value $.01 per share, and shall herein be referred to as the "Special
Preferred Stock". Shares of the Special Preferred Stock shall, with respect to
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 Special Preferred Stock as
to rights on liquidation, winding up and dissolution ("Junior Stock"), on a
parity with the Series D Preferred Stock, Cumulative Convertible 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 Special
Preferred Stock as to 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 Special Preferred Stock in accordance with
Section 4 and which expressly provides that it ranks senior to the Special
Preferred Stock as to rights on liquidation, winding up and dissolution ("Senior
Stock").
2. Dividends.
(a) Prior to March 31, 2007, the holders of the Special
Preferred Stock shall not be entitled to receive any dividends. On and after
March 31, 2007, the holders of the Special Preferred Stock shall be entitled to
receive, out of any funds legally available therefor, dividends in cash at the
annual rate of 12 1/4% 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 June 30, 2007, 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.
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(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 April 1, 2007). 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 1/4% thereof from such Dividend Payment Date until the date
fully paid in cash.
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 Special
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 "Original Liquidation Preference")
plus with respect to any date after December 31, 1996, an amount (which amount,
collectively with the Original Liquidation Preference, is hereinafter referred
to as the "Liquidation Preference") equal to 5% per annum of the Original
Liquidation Preference thereof calculated on a daily basis from January 1, 1996
to such date; provided that the maximum Liquidation Preference shall not exceed
$30,000,000. If upon any such liquidation, dissolution or winding up of the
Corporation the remaining assets of the Corporation available for distribution
to its stockholders shall be insufficient to pay the holders of shares of
Special Preferred Stock the full amount to which they shall be entitled, the
holders of Special 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 Special 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
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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 Special
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
Special Preferred Stock or by law, the Special 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 Special Preferred Stock so as
to affect adversely the Special Preferred Stock, without the written consent or
affirmative vote of the holders of at least two-thirds of the then outstanding
shares of Special 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
Special Preferred Stock as to the right to receive amounts distribut-able upon
liquidation, dissolution or winding up of the Corporation shall be deemed to
affect adversely the Special Preferred Stock, and the authorization or issuance
of any series of Preferred Stock on a parity with the
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Special Preferred Stock as to the right to receive amounts distributable upon
liquidation, dissolution or winding up of the Corporation shall be deemed not to
affect adversely the Special Preferred Stock.
5. Redemption.
(a) At any time and from time to time the Corporation may, at
the option of its Board of Directors, redeem the Special Preferred Stock in the
manner provided below, in whole or in part, at a redemption price equal to 100%
of the Liquidation Preference thereof on the Redemption Date (as defined below).
(b) The Corporation shall redeem all outstanding shares of
Special Preferred Stock on (x) the date which is 35 days after the occurrence of
a Change of Control (as defined below) and, in any event, on (z) March 31, 2008
in each such case in the manner provided below at a redemption price equal to
100% of the Liquidation Preference thereof on the Redemption Date.
(c) On March 31 of each year, commencing with March 31, 1997,
the Corporation shall redeem at a redemption price equal to 100% of the
Liquidation Preference thereof on such Redemption Date an amount (the "Required
Redemption Amount") of Special Preferred Stock equal to 50% of the amount, if
any, by which the consolidated EBITDA (as defined below) of the Corporation and
its subsidiaries exceeds the Threshold Amount set forth below for the
immediately preceding year ended on December 31. To the extent the Required
Redemption Amount exceeds 50% of the sum (the "Income Limitation") of (i) the
consolidated net income of the Corporation and its subsidiaries for the
immediately preceding year ended on December 31 (without deducting therefrom any
amounts on account of dividends paid or payable on any preferred stock or
redemptions of any preferred stock of the Corporation, including, without
limitation, the Convertible Preferred Stock, Special Preferred Stock and Series
C and D classes of Preferred Stock of the Corporation) plus (ii) amounts
attributable to the amortization of goodwill of the Corporation and its
subsidiaries for such immediately preceding year, such excess amount shall be
carried forward and be considered a Required Redemption Amount for the next
succeeding year and for each year thereafter until paid.
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The Threshold Amount for each year shall be as follows:
Year Ended Threshold
December 31, Amount
1996........................................... $47.0 million
1997........................................... 53.0 million
1998........................................... 57.5 million
1999........................................... 60.5 million
2000........................................... 63.5 million
2001........................................... 66.5 million
2002........................................... 69.5 million
2003........................................... 72.5 million
2004........................................... 75.5 million
2005........................................... 78.5 million
2006 and thereafter............................ 81.5 million
"EBITDA" means net income plus income taxes, interest expense, depreciation and
amoritization. In the event that the Corporation or any subsidiary sells or
disposes of any material asset or business ("material" meaning having a value of
$250,000 or more), the Threshold Amount for each year thereafter as set forth
above shall be reduced by the amount of EBITDA attributable to such asset or
business for the four fiscal quarters immediately preceding such sale or
disposition. All accounting terms used in this paragraph (c) shall be determined
in accordance with generally accepted accounting principles consistently applied
as in effect in the United States from time to time.
(d) At least 30 days prior to the date fixed for any
redemption of Special 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
Special Preferred Stock to be redeemed, at its address last shown on the records
of the transfer agent of the Special 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 (5)(a),
(5)(b)(x), (5)(b)(z) or 5(c) hereof;
(2) the redemption price thereof;
(3) whether all or less than all the outstanding shares of the
Special Preferred Stock redeemable thereunder are to be redeemed and
the total number of shares of such Special Preferred Stock being
redeemed;
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(4) the number of shares of Special 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"); and
(6) that the holder is to surrender to the Corporation, at the
place or places where certificates for shares of Special Preferred
Stock are to be surrendered for redemption, in the manner and at the
price designated, his certificate or certificates representing the
shares of Special Preferred Stock to be redeemed.
(e) Each Holder of Special Preferred Stock shall surrender the
certificate or certificates representing such shares of Special 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 redemption price 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.
(f) Unless the Corporation defaults in the payment in full of
the redemption price 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 redemption price with respect thereto, without interest.
(g) In the event of any redemption of only a part of the then
outstanding Special Preferred Stock, the Corporation shall effect such
redemption pro rata among the holders thereof based on the number of shares of
Special Preferred Stock held by such holders on the date of the Redemption
Notice.
(h) The occurrence of any of the following events will
constitute a "Change of Control" for purposes of this Section 5:
(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than one or more Permitted Holders (as defined below), is
or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act except that for purposes of this clause (i) such
person shall be
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deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly,
of more than 30% of the total voting power of the Voting Stock (as
defined below) of the Corporation; provided, however, that the
Permitted Holders beneficially own (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, in the aggregate a
lesser percentage of the total voting power of the Voting Stock of the
Corporation than such other person and do not have the right or ability
by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors of the Corporation (for
the purposes of this clause (i), a person shall be deemed to
beneficially own any Voting Stock of a specified corporation held by
another corporation (the "parent corporation"), if such other person is
the beneficial owner (as defined in this clause (i) above), directly or
indirectly, of more than 30% of the voting power of the Voting Stock of
such parent corporation and the Permitted Holders beneficially own (as
defined in this clause (i) above), directly or indirectly, in the
aggregate a lesser percentage of the voting power of the Voting Stock
of such parent corporation and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election
a majority of the board of directors of such parent corporation);
(ii) during any two consecutive 365-day periods, individuals
who at the beginning of such period constituted the Board of Directors
of the Corporation (together with any new directors whose election by
the Board of Directors of the Corporation or whose nomination for
election by the shareholders of the Corporation was approved by a vote
of 66- 2/3% of the directors of the Corporation then still in office
who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of
the Corporation then in office; or
(iii) the merger or consolidation of the Corporation with or
into another Person or the merger of another Person with or into the
Corporation, or the sale of all or substantially all the assets of the
Corporation to another Person (other than a Person that is controlled
by the Permitted Holders), and, in the case of any such merger or
consolidation, the securities of the Corporation that are outstanding
immediately prior to such transaction and which represent 100% of the
aggregate voting power of the Voting Stock of the Corporation are
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changed into or exchanged for cash, securities or property, unless
pursuant to such transaction such securities are changed into or
exchanged for, in addition to any other consideration, securities of
the surviving corporation that represent immediately after such
transaction, at least a majority of the aggregate voting power of the
Voting Stock of the surviving corporation and have the immediate right
to appoint a majority of the Board of Directors of the surviving
corporation.
"Permitted Holders" means Jeffrey J. Steiner and his
respective "associates" (as defined in Rule 12b-2 under the Exchange Act as in
effect on March 13, 1996, except that a person shall not be an "associate" for
purposes of this definition solely because such person comes within the
definition of such term in clause (a) of such Rule) or their respective
Affiliates.
"Affiliate" of any specified person or entity means any other
person or entity, directly or indirectly, controlling or controlled by or under
direct or indirect common control with such specified person or entity. For the
purposes of this definition, "control" when used with respect to any person or
entity means the power to direct the management and policies of such person or
entity, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Voting Stock" means, with respect to any person, securities
of any class or classes of capital stock in such person entitling the holders
thereof (whether at all times or only so long as no senior class of stock has
voting power by reason of any contingency) to vote in the election of members of
the Board of Directors or other governing body of such person.
6. 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 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 5 and otherwise be in
compliance with all of its obligations hereunder.
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(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 Special Preferred Stock or the Series C
Preferred Stock, except: (1) for such contractual restrictions consented to in
writing by a majority of the holders of the Special Preferred Stock before or
after the Corporation enters into such contractual restrictions (the "Approved
Contracts"), and (2) any subsequent amendments, modifications, supplements, or
restatements of the Approved Contracts (including such contractual restrictions
entered into in connection with any refinancings of any debt instruments issued
by or borrowings of the Corporation) (the "Subsequent Contracts"); provided
that, any such Subsequent Contracts will not be permitted to contain
restrictions on the Corporation's payment obligations with respect to the
Special Preferred Stock or Series C Preferred Stock of the Corporation which are
more restrictive than, or more adverse to the holders of the Special Preferred
Stock or Series C Preferred Stock of the Corporation, in each such case, in any
material respect as set forth in any such Approved Contracts.