EXHIBIT 3.1
ARTICLES OF CORRECTION OF
ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION OF
PRG-SCHULTZ INTERNATIONAL, INC.
A CORPORATION ORGANIZED UNDER THE LAWS OF THE STATE OF GEORGIA
Pursuant to the provisions of Section 14-2-124, Official Code of Georgia
Annotated, the undersigned corporation executes the following Articles of
Correction:
1. The name of the corporation is PRG-SCHULTZ INTERNATIONAL, INC.
2. The Articles of Amendment to the Articles of Incorporation of
PRG-SCHULTZ INTERNATIONAL, INC., attached hereto as Exhibit A, were
filed by the Secretary of State of the State of Georgia on the 15th
day of March, 2006, and such document requires correction.
3. The incorrect statements in said document and the reasons they are
incorrect are as follows:
a. the clause "provided, that the aggregate number of votes shall
be rounded down to the number of the nearest whole share of common
stock after taking into account all shares of Series A Preferred Stock
held by any holder casting such votes" contained in Section 4.5 of
said Articles of Amendment was inserted through scrivener error; and
b. the clause "provided, that the aggregate number of votes shall
be rounded down to the number of the nearest whole share of common
stock after taking into account all shares of Series B Preferred Stock
held by any holder casting such votes" contained in Section 5.5 of
said Articles of Amendment was inserted through scrivener error.
4. Sections 4.5 and 5.5 are corrected by striking such clauses, after
which they read in their entirety as follows:
"Section 4.5. Voting Rights. Each share of Series A Preferred
Stock will have the number of votes that the shares of common stock
issuable upon conversion of a share of Series A Preferred Stock would
have (referred to herein as voting on an "as converted" basis). Each
share of Series A Preferred Stock will initially have 422.5 votes. The
common stock, Series A Preferred Stock and Series B Preferred Stock,
if any, will vote together as a single class, except in the limited
circumstances provided in Section 4.6 below or as required under
applicable law."
"Section 5.5. Voting Rights. Each share of Series B Preferred
Stock will have the number of votes that the shares of common stock
issuable upon conversion of a share of Series B Preferred Stock would
have (referred to herein as voting on an "as converted" basis). Each
share of Series B Preferred Stock will initially have 738.5 votes. The
common stock, Series A Preferred Stock and Series B Preferred Stock
will vote together as a single class, except in the limited
circumstances provided in Section 5.6 below or as required under
applicable law."
IN WITNESS WHEREOF, the undersigned corporation has caused these Articles
of Correction to be signed in its corporate name and on its behalf by its Senior
Vice President, General Counsel, and Secretary on March 16, 2006.
PRG-SCHULTZ INTERNATIONAL, INC.
By: /s/ C. McKellar, Jr.
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Clint McKellar, Jr., Senior Vice President,
General Counsel, and Secretary
EXHIBIT A
PRG-SCHULTZ INTERNATIONAL, INC.
ARTICLES OF AMENDMENT
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To the Secretary of State
State of Georgia
PRG-SCHULTZ INTERNATIONAL, INC., a corporation organized and existing
under and by virtue of the provisions of the Georgia Business Corporation Code
(the "Corporation"), does hereby adopt, pursuant to authority vested in the
Board of Directors of the Corporation (the "Board") by its Restated Articles of
Incorporation (the "Articles of Incorporation"), and pursuant to the provisions
of Section 14-2-601 of the Georgia Business Corporation Code, the Board, at a
meeting held on March 9, 2006, duly approved the following Articles of Amendment
authorizing the creation and issuance of a series of 125,000 shares of 9.0%
Senior Series A Convertible Participating Preferred Stock (the "Series A
Preferred Stock"):
1. The name of the Corporation is PRG-Schultz International, Inc.
2. Article 2, Section A of the Articles of Incorporation of the Corporation is
hereby amended to append thereto a new subsection 4 and subsection 5 to read as
follows:
4. Series A Preferred Stock. There shall be a series of Preferred Stock, no
par value, of the Corporation with the following designated number of shares,
relative rights, preferences, and limitations thereof:
Section 4.1. Designation, Rank and Number.
(a) The shares of the series shall be designated as 9.0% Senior Series A
Convertible Participating Preferred Stock (the "Series A Preferred Stock"), no
par value, with a liquidation preference of $120.00 per share as of the date of
issue. The authorized number of shares constituting such series shall be
125,000.
(b) The Series A Preferred Stock, with respect to dividend rights and the
distribution of assets upon the Corporation's liquidation, dissolution or
winding up, will rank (i) junior to all indebtedness of the Corporation; (ii)
senior to all classes or series of the Corporation's common stock and to all
other equity securities the terms of which specifically provide that such equity
securities rank junior to the Series A Preferred Stock ("Junior Stock"); (iii)
pari passu with the 10.0% Series B Convertible Participating Preferred Stock
(the "Series B Preferred Stock") and all other preferred equity securities
issued by the Corporation, other than those securities described in clauses (ii)
and (iv) of this Section 4.1(b), the issuance of which shall be subject to the
consent of the required holders of the Series A Preferred Stock; and (iv) junior
to all equity securities issued by the Corporation, the terms of which
specifically provide that such equity securities rank senior to the Series A
Preferred Stock, subject to the consent of the required holders of the Series A
Preferred Stock.
Section 4.2. Dividends.
(a) General. The holders of shares of Series A Preferred Stock, in
preference to the holders of shares of any Junior Stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available therefor, cumulative dividends, at a rate of 9.0% per annum of the
then-effective liquidation preference payable in cash semi-annually on March 15
and September 15 of each year, commencing September 15, 2006, to holders of
record at the close of business on the preceding March 1 and September 1,
respectively. Declared dividends will be payable in cash. Any undeclared
dividends will increase the liquidation preference as of the applicable dividend
payment date.
(b) Dividend Participation. If any dividends or distributions are paid on
the Corporation's common stock (other than a dividend or distribution paid
solely in additional shares of the Corporation's common stock), the holders of
Series A Preferred Stock will be paid dividends or distributions per share of
Series A Preferred Stock in an amount equal to what such holder would have
received had it converted its shares of Series A Preferred Stock into shares of
common stock of the Corporation immediately prior to the record date for the
payment of such dividend or distribution.
(c) Partial Dividend Periods. The Corporation will prorate and compute any
dividend payable for a partial dividend period on the basis of a 360-day year
consisting of twelve 30-day months. The Corporation will pay dividends to
holders of record as they appear in its share records at the close of business
on the applicable dividend record date.
(d) Unpayable Dividends. No dividend on the Series A Preferred Stock will
be authorized or declared or paid or set apart for payment by the Corporation if
such authorization, declaration, payment or setting apart for payment would
violate any of its agreements or is restricted or prohibited by law.
Notwithstanding the foregoing, dividends on the Series A Preferred Stock will
accrue whether or not the Corporation has earnings, whether or not there are
funds legally available for the payment of dividends and whether or not such
dividends are authorized or declared by the Board of Directors.
(e) Dividends not Declared and Paid in Full. When dividends are not
declared and paid in full (or a sum sufficient for such full payment is not so
set apart) on the Series A Preferred Stock and all other equity securities
ranking pari passu as to dividends with the Series A Preferred Stock (including
the Series B Preferred Stock, if any), all dividends declared upon the Series A
Preferred Stock and any other equity securities ranking pari passu as to
dividends with the Series A Preferred Stock shall be declared pro rata so that
the amount of dividends declared per share of Series A Preferred Stock and such
other equity security shall in all cases bear to each other the same ratio that
accumulated dividends per share on the Series A Preferred Stock and such other
equity security bear to each other.
(f) Restrictions on Other Payments. Except as provided in Section 4.2(e),
unless full cumulative dividends on the Series A Preferred Stock have been or
contemporaneously are authorized and paid or authorized and a sum sufficient set
apart for payment for all past distribution periods and the then current
dividend period:
(i) no dividends, other than distributions in kind of common stock of
the Corporation or other shares of Junior Stock, may be authorized or paid
or set aside for payment, and no other dividend may be authorized or made
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upon, shares of common stock of the Corporation or any other shares of
Junior Stock; and
(ii) no shares of common stock of the Corporation or any other shares
of Junior Stock may be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any such shares) by the Corporation or any
subsidiary of the Corporation, except by conversion into or exchange for
other Junior Stock.
Section 4.3. Liquidation Preference.
(a) Initial Preference. The Series A Preferred Stock will have an initial
liquidation preference of $120.00 per share, subject to accretion.
(b) Distribution upon Liquidation. Upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, holders of Series A
Preferred Stock will be entitled to receive out of the assets of the Corporation
available for distribution to stockholders (after payment or provision for all
of the Corporation's debts and other liabilities and preference payments to
holders of equity securities ranking senior to the Series A Preferred Stock but
before any payment or provision for any Junior Stock) an amount equal to the
greater of:
(i) the amount per share of Series A Preferred Stock equal to the
then-effective liquidation preference, plus any accrued and undeclared
dividends to the date of payment; and
(ii) the amount per share the holder would have received in connection
with such voluntary or involuntary liquidation, dissolution or winding up
of the Corporation had such holder converted such share of Series A
Preferred Stock into shares of common stock immediately prior to such
event.
(b) Distribution with Insufficient Assets. If, upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, its
assets are insufficient to make full payment of the liquidating distributions to
holders of the Series A Preferred Stock and any other shares the Corporation's
equity securities ranking pari passu with the Series A Preferred Stock as to
liquidation rights (including the Series B Preferred Stock, if any), then the
holders of the Series A Preferred Stock and pari passu shares will share ratably
in any distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.
Section 4.4. Conversion. The holders of the Series A Preferred Stock shall
have conversion rights as follows:
(a) Right to Convert. The Series A Preferred Stock will be convertible at
the holder's option at any time. Each share of Series A Preferred Stock will be
initially convertible into 422.5 shares of common stock of the Corporation,
calculated by dividing the then-effective liquidation preference of each share
of Series A Preferred Stock by the conversion price. The initial conversion
price is $0.28405, subject to anti-dilution adjustments described in this
Section 4.4.
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(b) Notice of Conversion. In order to effect a conversion of Series A
Preferred Stock, a holder must deliver a notice of conversion to the
Corporation. Upon receipt by the Corporation of the notice of conversion, the
holder's shares of Series A Preferred Stock will immediately cease to have the
rights and restrictions of preferred stock, and the holder will immediately be
deemed to have all the rights of a holder of shares of common stock. The
Corporation will deliver a copy of the form of notice of conversion to each
holder of Series A Preferred Stock prior to the convening of a stockholders
meeting to increase the Corporation's authorized capital or at any time at the
request of a holder of Series A Preferred Stock.
(c) Adjustments to Conversion Price. The conversion price will be subject
to adjustment in the event the Corporation (i) pays a dividend or distribution
solely in shares of common stock; (ii) subdivides its outstanding shares of
common stock into a greater number of shares of common stock, or (iii) combines
its outstanding shares of common stock into a smaller number of shares of common
stock. Concurrently with the effectiveness of any of the events described in
clauses (i) through (iii), the conversion price in effect immediately prior
thereto shall be adjusted by multiplying the conversion price in effect
immediately prior to such adjustment by a fraction of which the numerator shall
be the number of shares of common stock outstanding immediately prior to such
adjustment and the denominator shall be the number of shares of common stock
outstanding immediately following such adjustment.
(d) Adjustments for Reclassification, Consolidation and Reorganization. In
case of any reclassification of the common stock, any consolidation of the
Corporation with, or merger of the Corporation into, any other entity, any
merger of any entity into the Corporation (other than a merger that does not
result in reclassification, conversion, exchange or cancellation of the
outstanding shares of common stock), any sale or transfer of all or
substantially all of the assets of the Corporation or any compulsory share
exchange whereby the common stock is converted into other certain securities,
cash or other property, then the holder of each share of Series A Preferred
Stock then outstanding shall have the right thereafter, during the period that
the Series A Preferred Stock shall be convertible, to convert that share only
into the kind and amount of securities, cash and other property receivable upon
the reclassification, consolidation, merger, sale, transfer or share exchange by
a holder of the number of shares of common stock into which one share of Series
A Preferred Stock would have been convertible immediately prior to the
reclassification, consolidation, merger, sale, transfer or share exchange.
(e) Further Adjustments. In the event that the Corporation's 2006
Management Incentive Plan, as may be amended from time to time ("MIP"), provides
for adjustments to the conversion or strike prices of the equity securities
granted thereunder or the number of shares issuable upon any such conversion
that would be in addition to or more favorable than the adjustments contained in
clauses (c) and (d) of this Section 4.4, then the conversion price of the Series
A Preferred Stock or the number of shares issuable upon such conversion shall
also be adjusted to the same extent as the conversion or strike prices of the
equity securities granted under the MIP or the number of shares issuable upon
any such conversion.
(f) Notices of Record Date. In the event that the Corporation shall propose
at any time: (i) to declare any dividend or distribution upon its common stock,
whether in cash, property, stock or other securities, whether or not a regular
cash dividend and whether or not out of earnings or earned surplus; (ii) to
offer for subscription pro rata to the holders of its common stock any
additional shares of stock of any class or series or other rights; (iii) to
effect any reclassification or recapitalization of its common stock outstanding
involving a change in the common stock; or (iv) to merge or consolidate with or
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into any other corporation, or sell, lease or convey all or substantially all of
its assets, or to liquidate, dissolve or wind up; then, in connection with each
such event, the Corporation shall send to the holders of Series A Preferred
Stock:
(1) at least twenty (20) days' prior written notice of the date on
which a record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders of common
stock shall be entitled thereto) or for determining rights to vote, if any,
in respect of the matters referred to in (i) and (ii) above; and
(2) in the case of the matters referred to in (iii) and (iv) above, at
least twenty (20) days' prior written notice of the date when the same
shall take place (and specifying the date on which the holders of common
stock shall be entitled to exchange their common stock for securities or
other consideration properly deliverable upon the occurrence of such
event).
(g) Issue Taxes. The Corporation shall pay any and all issue and other
taxes that may be payable in respect of any issue or delivery of shares of
common stock on conversion of Series A Preferred Stock pursuant hereto;
provided, however, that the Corporation shall not be obligated to pay any
transfer taxes resulting from any transfer requested by any holder in connection
with any such conversion.
(h) Reservation of Stock Issuable Upon Conversion. The Corporation shall at
all times reserve and keep available out of its authorized but unissued shares
of common stock, solely for the purpose of effecting the conversion of the
shares of the Series A Preferred Stock, such number of its shares of common
stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series A Preferred Stock; and if at any time the
number of authorized but unissued shares of common stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Series A
Preferred Stock, the Corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of common stock to such number of shares as shall be sufficient for such
purpose, including, without limitation, engaging in best efforts to obtain the
requisite shareholder approval of any necessary amendment to the Articles of
Incorporation.
(i) Fractional Shares. No fractional share shall be required to be issued
by the Corporation upon the conversion of any share or shares of Series A
Preferred Stock. All shares of common stock (including fractions thereof)
issuable upon conversion of more than one share of Series A Preferred Stock by a
holder thereof shall be aggregated for purposes of determining whether the
conversion would result in the issuance of any fractional share. If, after the
aforementioned aggregation, the conversion would result in the issuance of a
fraction of a share of common stock, the Corporation shall have the option, in
lieu of issuing any fractional share, to pay the holder otherwise entitled to
such fraction a sum in cash equal to the fair market value of such fraction on
the date of conversion (as determined in good faith by the Board of Directors).
(j) Notices. Any notice required by the provisions of this Section 4.4 to
be given to the holders of shares of Series A Preferred Stock shall be deemed
given if deposited in the United States mail, postage prepaid, or if sent by
facsimile or delivered personally by hand or nationally recognized courier and
addressed to each holder of record at such holder's address or facsimile number
appearing in the records of the Corporation.
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Section 4.5. Voting Rights. Each share of Series A Preferred Stock will
have the number of votes that the shares of common stock issuable upon
conversion of a share of Series A Preferred Stock would have (referred to herein
as voting on an "as converted" basis); provided, that the aggregate number of
votes shall be rounded down to the number of the nearest whole share of common
stock after taking into account all shares of Series A Preferred Stock held by
any holder casting such votes. Each share of Series A Preferred Stock will
initially have 422.5 votes. The common stock, Series A Preferred Stock and
Series B Preferred Stock, if any, will vote together as a single class, except
in the limited circumstances provided in Section 4.6 below or as required under
applicable law.
Section 4.6. Voting as Separate Class. Any amendment, modification or
repeal of the terms of the Corporation's Articles of Incorporation relating to
the Series A Preferred Stock that would materially adversely affect the powers,
preferences, or rights of the Series A Preferred Stock or the bylaws including
but not limited to modifications resulting from or in connection with any
merger, consolidation or sale of all or substantially all of the assets of the
Corporation, will require the approval of holders of at least a majority of the
issued and outstanding shares of Series A Preferred Stock and Series B Preferred
Stock, if any, voting together as a separate class. In addition, without the
affirmative vote or consent of holders of at least a majority of the outstanding
shares of Series A Preferred Stock and Series B Preferred Stock, if any, voting
together as a separate class, the Corporation shall not authorize, create, or
increase the authorized or issued amount of any class or series of equity
securities ranking senior or pari passu with the Series A Preferred Stock with
respect to the payment of dividends or the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation.
Section 4.7. Optional Redemption.
(a) Optional Redemption. The Corporation shall have the right to redeem the
Series A Preferred Stock at any time, after the New Conversion Rights Date, in
whole or in part at any time concurrently with or after all of the Corporation's
outstanding 11.0% Senior Notes due 2011 (the "Senior Notes") and 10.0% Senior
Convertible Notes due 2011 (the "Senior Convertible Notes" and, together with
the Senior Notes, the "Notes") have been repurchased, redeemed or otherwise
repaid in full. Any such redemption shall be for a cash amount per share equal
to the then-effective liquidation preference, together with any accrued and
undeclared dividends to the date of redemption. The Corporation will provide
notice of the optional redemption date at least 30 days in advance of such date
to all holders of Series A Preferred Stock showing on the registry books of the
Corporation or the Transfer Agent as of such date and make such other public
announcement as it deems reasonable. For purposes hereof, "New Conversion Rights
Date" means the first date on which each of the following has occurred: (1) a
registration statement registering the resale of the Notes, Series A Preferred
Stock, Series B Preferred Stock, and shares of common stock issued upon the
conversion of the Series A Preferred Stock and Series B Preferred Stock and
certain other securities of the Corporation by certain affiliates of the
Corporation becomes effective; and (2) a majority of the shareholders of the
Corporation holding common stock have approved an increase in the amount of
authorized shares of the common stock sufficient to implement fully the common
stock conversion rights of the Senior Convertible Notes, the Series A Preferred
Stock, the Series B Preferred Stock and the distribution of common stock under
the MIP.
(b) Conversion in Lieu of Redemption. The holders' option to convert shares
of Series A Preferred Stock into shares of common stock of the Corporation will
terminate at the close of business on the business day preceding the optional
redemption date, unless the Corporation defaults in making any redemption
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payment upon such optional redemption date. Holders of the Series A Preferred
Stock shall have the right to exercise conversion rights in lieu of the receipt
of the redemption payment up to and including the business day preceding the
optional redemption date.
Section 4.8. Mandatory Redemption.
(a) Mandatory Redemption Date. On March 15, 2011 (the "Series A Mandatory
Redemption Date"), the Corporation must redeem all outstanding shares of Series
A Preferred Stock for a cash redemption price per share equal to the
then-effective liquidation preference, together with any accrued and undeclared
dividends to the date of redemption.
(b) Insufficient or Unavailable Capital at the Mandatory Redemption Date.
If at the Series A Mandatory Redemption Date, the Corporation does not have
sufficient capital and surplus legally available to redeem all the outstanding
shares of Series A Preferred Stock, the Corporation will take all reasonable
measures permitted under the Georgia Business Corporation Code to increase the
amount of its capital and surplus legally available, and the Corporation will
redeem as many shares of Series A Preferred Stock as it may legally redeem,
ratably (as nearly as may be practicable without creating fractional shares)
from the holders thereof in proportion to the number of shares held by them, and
shall thereafter from time to time, as soon as it shall have funds available
therefor, redeem as many shares of Series A Preferred Stock as it legally may
until it has redeemed all of the outstanding shares of Series A Preferred Stock.
(c) Conversion in Lieu of Redemption. The holders' option to convert shares
of Series A Preferred Stock into shares of common stock of the Corporation will
terminate at the close of business on the business day preceding the Series A
Mandatory Redemption Date (subject to any extension necessary to permit the
expiration of any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), if applicable),
unless the Corporation defaults in making any redemption payment upon such
Series A Mandatory Redemption Date. Holders of the Series A Preferred Stock
shall have the right to exercise conversion rights in lieu of the receipt of the
redemption payment up to and including the business day preceding the Series A
Mandatory Redemption Date.
(d) Notice. The Corporation will provide notice of the Series A Mandatory
Redemption Date at least 30 days in advance of such date to all holders of
Series A Preferred Stock showing on the registry books of the Corporation or the
Transfer Agent as of such date and make such other public announcement as it
deems reasonable.
Section 4.9. Loss, Theft, Destruction of Preferred Stock. Upon receipt of
evidence satisfactory to the Corporation of the loss, theft, destruction or
mutilation of shares of Series A Preferred Stock and, in the case of any such
loss, theft or destruction, upon receipt of indemnity or security reasonably
satisfactory to the Corporation, or, in the case of any such mutilation, upon
surrender and cancellation of the Series A Preferred Stock, the Corporation
shall make, issue and deliver, in lieu of such lost, stolen, destroyed or
mutilated shares of Series A Preferred Stock, new shares of Series A Preferred
Stock of like tenor. The Series A Preferred Stock shall be held and owned upon
the express condition that the provisions of this Section 4.9 are exclusive with
respect to the replacement of mutilated, destroyed, lost or stolen shares of
Series A Preferred Stock and shall preclude any and all other rights and
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement of negotiable instruments or other
securities without the surrender thereof.
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Section 4.10. Register. The Corporation shall appoint a transfer agent
("Transfer Agent") registered under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") to keep at its principal office a register in which
the Transfer Agent shall provide for the registration of the Series A Preferred
Stock. The initial Transfer Agent shall be American Stock Transfer and Trust
Company. Upon any transfer of the Series A Preferred Stock in accordance with
the provisions hereof, the Transfer Agent shall register such transfer on the
Series A Preferred Stock register. The Corporation or the Transfer Agent may
deem the person in whose name the Series A Preferred Stock shall be registered
upon the registry books of the Corporation or the Transfer Agent to be, and may
treat it as, the absolute owner of the Series A Preferred Stock for the purpose
of receiving payment of dividends on the Series A Preferred Stock, for the
conversion of the Series A Preferred Stock and for all other purposes, and the
Corporation or the Transfer Agent shall not be affected by any notice to the
contrary. All such payments and such conversions shall be valid and effective to
satisfy and discharge the liability upon the Series A Preferred Stock to the
extent of the sum or sums so paid or the conversion or conversions so made.
Section 4.11. Form of Certificates; Transfer. (a) Series A Preferred Stock
shall be issued in the form of one or more permanent global shares of Series A
Preferred Stock (the "Global Preferred Shares") in definitive, fully registered
form with the global legend as set forth in clause (d) of this Section 4.11
below. The Global Preferred Share may have notations, legends or endorsements
required by law, stock exchange rules, agreements to which the Corporation is
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Corporation). The Global Preferred
Share shall be deposited on behalf of the holders of the Series A Preferred
Stock represented thereby with Wachovia Bank, N.A. or any successor thereto, as
may be designated by the Board of Directors (the "Registrar"), at its New York
office, as custodian for The Depository Trust Company ("DTC") or its successor
depositary (collectively, the "Depositary"), and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Corporation and
countersigned and registered by the Registrar as hereinafter provided. The
aggregate number of shares represented by each Global Preferred Share may from
time to time be increased or decreased by adjustments made on the records of the
Registrar and the Depositary or its nominee as hereinafter provided. This
Section 4.11 (a) shall apply only to a Global Preferred Share deposited with or
on behalf of the Depositary. The Corporation shall execute and the Registrar
shall, in accordance with this Section, countersign and deliver initially one or
more Global Preferred Shares that (i) shall be registered in the name of Cede &
Co. or other nominee of the Depositary and (ii) shall be delivered by the
Registrar to Cede & Co. or pursuant to instructions received from Cede & Co. or
held by the Registrar as custodian for the Depositary pursuant to an agreement
between the Depositary and the Registrar. Members of, or participants in, the
Depositary ("Agent Members") shall have no rights under this subdivision with
respect to any Global Preferred Share held on their behalf by the Depositary or
by the Registrar as the custodian of the Depositary or under such Global
Preferred Share, and the Depositary may be treated by the Corporation, the
Registrar and any agent of the Corporation or the Registrar as the absolute
owner of such Global Preferred Share for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Corporation, the
Registrar or any agent of the Corporation or the Registrar from giving effect to
any written certification, proxy or other authorization furnished by the
Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of the Depositary governing the exercise of the
rights of a holder of a beneficial interest in any Global Preferred Share.
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(b) Owners of beneficial interests in Global Preferred Shares shall not be
entitled to receive physical delivery of certificated shares of Series A
Preferred Stock, unless:
(i) DTC is unwilling or unable to continue as Depositary for the
Global Preferred Share and the Corporation does not appoint a qualified
replacement for DTC within 90 days,
(ii) DTC ceases to be a "clearing agency" registered under the
Exchange Act, and the Corporation does not appoint a qualified replacement
for DTC within 90 days or
(iii) the Corporation decides to discontinue the use of book-entry
transfer through DTC (or any successor Depositary). In any such case, the
Global Preferred Share shall be exchanged in whole for definitive shares of
Series A Preferred Stock in registered form, with the same terms and of an
equal aggregate liquidation preference.
Definitive shares of Series A Preferred Stock shall be registered in the name or
names of the person or persons specified by DTC in a written instrument to the
Registrar.
(c) A Global Preferred Share shall not be valid until it is signed by an
authorized officer of the Corporation in accordance with its bylaws, by manual
or facsimile signature, and an authorized signatory of the Transfer Agent or its
successor manually countersigns the Global Preferred Share. The signature shall
be conclusive evidence that the Global Preferred Share has been authenticated
under this Article 2. Each Global Preferred Share shall be dated the date of its
authentication.
(d) Each Global Preferred Share shall bear a legend in substantially the
form as follows:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
THE CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE ARTICLES OF AMENDMENT (AS DEFINED
BELOW). TRANSFERS TO AND FROM THIS GLOBAL SECURITY SHALL BE NOTED BY
THE TRANSFER AGENT ON THE SCHEDULE OF EXCHANGES BELOW.
9
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION
AS SUCH REGISTRAR AND TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM
THAT TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
Section 4.12. Withholding. To the extent required by applicable law, the
Corporation may withhold amounts for or on account of any taxes imposed or
levied by or on behalf of any taxing authority in the United States having
jurisdiction over the Corporation from any payments made pursuant to the Series
A Preferred Stock.
Section 4.13. Headings. The headings of the sections of this subsection 4
are inserted for convenience only and do not constitute a part of these Articles
of Incorporation.
5. Series B Preferred Stock. There shall be a series of Preferred Stock, no
par value, of the Corporation with the following designated number of shares,
relative rights, preferences and limitations thereof:
Section 5.1 Designation, Rank and Number.
(a) The shares of the series shall be designated as 10.0% Senior Series B
Convertible Participating Preferred Stock (the "Series B Preferred Stock"), no
par value, with a liquidation preference of $120.00 per share as of the date of
issue. The authorized number of shares constituting such series shall be
125,000.
(b) The Series B Preferred Stock, with respect to dividend rights and the
distribution of assets upon the Corporation's liquidation, dissolution or
winding up, will rank (i) junior to all indebtedness of the Corporation; (ii)
senior to all classes or series of the Corporation's common stock and to all
other Junior Stock; (iii) pari passu with the Series A Preferred Stock described
in Section 4 above and all other preferred equity securities issued by the
Corporation, other than those securities described in clauses (ii) and (iv) of
this Section 5.1(b), the issuance of which shall be subject to the consent of
the required holders of the Series B Preferred Stock,; and (iv) junior to all
equity securities issued by the Corporation, the terms of which specifically
provide that such equity securities rank senior to the Series B Preferred Stock,
subject to the consent of the required holders of the Series B Preferred Stock.
Section 5.2. Dividends.
(a) General. The holders of shares of Series B Preferred Stock, in
preference to the holders of shares of any Junior Stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available therefor, cumulative dividends, at a rate of 10.0% per annum of the
then-effective liquidation preference payable in cash semi-annually on March 15
and September 15 of each year, commencing September 15, 2006, to holders of
record at the close of business on the preceding March 1 and September 1,
respectively. Declared dividends will be payable in cash. Any undeclared
dividends will increase the liquidation preference as of the applicable dividend
payment date.
(b) Dividend Participation. If any dividends or distributions are paid on
the Corporation's common stock (other than a dividend or distribution paid
solely in additional shares of the Corporation's common stock), the holders of
Series B Preferred Stock will be paid dividends or distributions per share of
10
Series B Preferred Stock in an amount equal to what such holder would have
received had it converted its shares of Series B Convertible Preferred Stock
into shares of common stock of the Corporation immediately prior to the record
date for the payment of such dividend or distribution.
(c) Partial Dividend Periods. The Corporation will prorate and compute any
dividend payable for a partial dividend period on the basis of a 360-day year
consisting of twelve 30-day months. The Corporation will pay dividends to
holders of record as they appear in its share records at the close of business
on the applicable dividend record date.
(d) Unpayable Dividends. No dividend on the Series B Preferred Stock will
be authorized or declared or paid or set apart for payment by the Corporation if
such authorization, declaration, payment or setting apart for payment would
violate any of its agreements or is restricted or prohibited by law.
Notwithstanding the foregoing, dividends on the Series B Preferred Stock will
accrue whether or not the Corporation has earnings, whether or not there are
funds legally available for the payment of dividends and whether or not such
dividends are authorized or declared by the Board of Directors.
(e) Dividends not Declared and Paid in Full. When dividends are not
declared and paid in full (or a sum sufficient for such full payment is not so
set apart) on the Series B Preferred Stock and all other equity securities
ranking pari passu as to dividends with the Series B Preferred Stock (including
the Series A Preferred Stock), all dividends declared upon the Series B
Preferred Stock and any other equity securities ranking pari passu as to
dividends with the Series B Preferred Stock shall be declared pro rata so that
the amount of dividends declared per share of Series B Preferred Stock and such
other equity security shall in all cases bear to each other the same ratio that
accumulated dividends per share on the Series B Preferred Stock and such other
equity security bear to each other.
(f) Restrictions on Other Payments. Except as provided in Section 5.1(e),
unless full cumulative dividends on the Series B Preferred Stock have been or
contemporaneously are authorized and paid or authorized and a sum sufficient set
apart for payment for all past distribution periods and the then current
dividend period:
(i) no dividends, other than distributions in kind of common stock of
the Corporation or other shares of Junior Stock, may be authorized or paid
or set aside for payment, and no other dividend may be authorized or made
upon, shares of common stock of the Corporation or any other shares of
Junior Stock; and
(ii) no shares of common stock of the Corporation or any other shares
of Junior Stock may be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any such shares) by the Corporation or any
subsidiary of the Corporation, except by conversion into or exchange for
other Junior Stock.
Section 5.3. Liquidation Preference.
(a) Initial Preference. The Series B Preferred Stock will have an initial
liquidation preference of $480.00 per share, subject to accretion.
11
(b) Distribution upon Liquidation. Upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, holders of Series B
Preferred Stock will be entitled to receive out of the assets of the Corporation
available for distribution to stockholders (after payment or provision for all
of the Corporation's debts and other liabilities and preference payments to
holders of equity securities ranking senior to the Series B Preferred Stock but
before any payment or provision for any Junior Stock) an amount equal to the
greater of:
(i) the amount per share of Series B Preferred Stock equal to the
then-effective liquidation preference, plus any accrued and undeclared
dividends to the date of payment; and
(ii) the amount per share the holder would have received in connection
with such voluntary or involuntary liquidation, dissolution or winding up
of the Corporation had such holder converted such share of Series B
Preferred Stock into shares of common stock immediately prior to such
event.
(c) Distribution with Insufficient Assets. If, upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, its
assets are insufficient to make full payment of the liquidating distributions to
holders of the Series B Preferred Stock and any other shares the Corporation's
equity securities ranking pari passu with the Series B Preferred Stock as to
liquidation rights (including the Series A Preferred Stock), then the holders of
the Series B Preferred Stock and pari passu shares will share ratably in any
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
Section 5.4. Conversion. The holders of the Series B Preferred Stock shall
have conversion rights as follows:
(a) Right to Convert. The Series B Preferred Stock will be convertible at
the holder's option at any time after the New Conversion Rights Date. Each share
of Series B Preferred Stock will be initially convertible into 738.5 shares of
common stock of the Corporation, which is calculated by dividing the
then-effective liquidation preference of each share of Series B Preferred Stock
by the conversion price. The initial conversion price is $0.65, subject to
anti-dilution adjustments described in this Section 5.4.
(b) Notice of Conversion. In order to effect a conversion of Series B
Preferred Stock, a holder must deliver a notice of conversion to the
Corporation. Upon receipt by the Corporation of the notice of conversion, the
holder's shares of Series B Preferred Stock will immediately cease to have the
rights and restrictions of preferred stock, and the holder will simultaneously
receive shares of common stock in accordance with the terms outlined above. The
Corporation will deliver a copy of the form of notice of conversion to each
holder of Series B Preferred Stock at any time at the request of a holder of
Series B Preferred Stock.
(c) Adjustments to Conversion Price. The conversion price will be subject
to adjustment in the event the Corporation (i) pays a dividend or distribution
solely in shares of common stock; (ii) subdivides its outstanding shares of
common stock into a greater number of shares of common stock, or (iii) combines
its outstanding shares of common stock into a smaller number of shares of common
stock. Concurrently with the effectiveness of any of the events described in
clauses (i) through (iii), the conversion price in effect immediately prior
thereto shall be adjusted by multiplying the conversion price in effect
immediately prior to such adjustment by a fraction of which the numerator shall
be the number of shares of common stock outstanding immediately prior to such
12
adjustment and the denominator shall be the number of shares of common stock
outstanding immediately following such adjustment.
(d) Adjustments for Reclassification, Consolidation and Reorganization. In
case of any reclassification of the common stock, any consolidation of the
Corporation with, or merger of the Corporation into, any other entity, any
merger of any entity into the Corporation (other than a merger that does not
result in reclassification, conversion, exchange or cancellation of the
outstanding shares of common stock), any sale or transfer of all or
substantially all of the assets of the Corporation or any compulsory share
exchange whereby the common stock is converted into other certain securities,
cash or other property, then the holder of each share of Series B Preferred
Stock then outstanding shall have the right thereafter, during the period that
the Series B Preferred Stock shall be convertible, to convert that share only
into the kind and amount of securities, cash and other property receivable upon
the reclassification, consolidation, merger, sale, transfer or share exchange by
a holder of the number of shares of common stock into which one share of Series
B Preferred Stock would have been convertible immediately prior to the
reclassification, consolidation, merger, sale, transfer or share exchange.
(e) Further Adjustments. In the event that the MIP provides for adjustments
to the conversion or strike prices of the equity securities granted thereunder
or the number of shares issuable upon any such conversion that would be in
addition to or more favorable than the adjustments contained in clauses (c) and
(d) of this Section 5.4, then the conversion price of the Series B Preferred
Stock or the number of shares issuable upon such conversion shall also be
adjusted to the same extent as the conversion or strike prices of the equity
securities granted under the MIP or the number of shares issuable upon any such
conversion.
(f) Notices of Record Date. In the event that the Corporation shall propose
at any time: (i) to declare any dividend or distribution upon its common stock,
whether in cash, property, stock or other securities, whether or not a regular
cash dividend and whether or not out of earnings or earned surplus; (ii) to
offer for subscription pro rata to the holders of its common stock any
additional shares of stock of any class or series or other rights; (iii) to
effect any reclassification or recapitalization of its common stock outstanding
involving a change in the common stock; or (iv) to merge or consolidate with or
into any other corporation, or sell, lease or convey all or substantially all of
its assets, or to liquidate, dissolve or wind up; then, in connection with each
such event, the Corporation shall send to the holders of Series B Preferred
Stock:
(i) at least twenty (20) days' prior written notice of the date on
which a record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders of common
stock shall be entitled thereto) or for determining rights to vote, if any,
in respect of the matters referred to in (i) and (ii) above; and
(ii) in the case of the matters referred to in (iii) and (iv) above,
at least twenty (20) days' prior written notice of the date when the same
shall take place (and specifying the date on which the holders of common
stock shall be entitled to exchange their common stock for securities or
other consideration properly deliverable upon the occurrence of such
event).
(g) Issue Taxes. The Corporation shall pay any and all issue and other
taxes that may be payable in respect of any issue or delivery of shares of
common stock on conversion of Series B Preferred Stock pursuant hereto;
provided, however, that the Corporation shall not be obligated to pay any
13
transfer taxes resulting from any transfer requested by any holder in connection
with any such conversion.
(h) Reservation of Stock Issuable Upon Conversion. The Corporation shall at
all times reserve and keep available out of its authorized but unissued shares
of common stock, solely for the purpose of effecting the conversion of the
shares of the Series B Preferred Stock, such number of its shares of common
stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series B Preferred Stock; and if at any time the
number of authorized but unissued shares of common stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Series B
Preferred Stock, the Corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of common stock to such number of shares as shall be sufficient for such
purpose, including, without limitation, engaging in best efforts to obtain the
requisite shareholder approval of any necessary amendment to the Articles of
Incorporation.
(i) Fractional Shares. No fractional share shall be required to be issued
by the Corporation upon the conversion of any share or shares of Series B
Preferred Stock. All shares of common stock (including fractions thereof)
issuable upon conversion of more than one share of Series B Preferred Stock by a
holder thereof shall be aggregated for purposes of determining whether the
conversion would result in the issuance of any fractional share. If, after the
aforementioned aggregation, the conversion would result in the issuance of a
fraction of a share of common stock, the Corporation shall have the option, in
lieu of issuing any fractional share, to pay the holder otherwise entitled to
such fraction a sum in cash equal to the fair market value of such fraction on
the date of conversion (as determined in good faith by the Board).
(j) Notices. Any notice required by the provisions of this Section 5.4 to
be given to the holders of shares of Series B Preferred Stock shall be deemed
given if deposited in the United States mail, postage prepaid, or if sent by
facsimile or delivered personally by hand or nationally recognized courier and
addressed to each holder of record at such holder's address or facsimile number
appearing in the records of the Corporation.
Section 5.5. Voting Rights. Each share of Series B Preferred Stock will
have the number of votes that the shares of common stock issuable upon
conversion of a share of Series B Preferred Stock would have (referred to herein
as voting on an "as converted" basis); provided, that the aggregate number of
votes shall be rounded down to the number of nearest whole share of common stock
after taking into account all shares of Series B Preferred Stock held by any
holder casting such votes. Each share of Series B Preferred Stock will initially
have 738.5 votes. The common stock, Series A Preferred Stock and Series B
Preferred Stock will vote together as a single class, except in the limited
circumstances provided in Section 5.6 below or as required under applicable law.
Section 5.6. Voting as Separate Class. Any amendment, modification or
repeal of the terms of the Corporation's Articles of Incorporation relating to
the Series B Preferred Stock that would materially adversely affect the powers,
preferences, or rights of the Series B Preferred Stock or the bylaws including
but not limited to modifications resulting from or in connection with any
merger, consolidation or sale of all or substantially all of the assets of the
Corporation, will require the approval of holders of at least a majority of the
issued and outstanding shares of Series A Preferred Stock and Series B Preferred
Stock, if any, voting together as a separate class. In addition, without the
affirmative vote or consent of holders of at least a majority of the outstanding
shares of Series A Preferred Stock and Series B Preferred Stock, voting together
as a separate class, the Corporation shall not authorize, create, or increase
14
the authorized or issued amount of, any class or series of equity securities
ranking senior to or pari passu with the Series B Preferred Stock with respect
to the payment of dividends or the distribution of assets upon the voluntary or
involuntary liquidation, dissolution or winding up of the Corporation.
Section 5.7. Optional Redemption.
(a) Optional Redemption. The Corporation shall have the right to redeem the
Series B Preferred Stock at any time after the New Conversion Rights Date, in
whole or in part at any time concurrently with or after all of the Corporation's
outstanding Senior Notes and Senior Convertible Notes (to the extent any such
notes remain outstanding and have not been converted into Series B Preferred
Stock) have been repurchased, redeemed or otherwise repaid in full. Any such
redemption shall be for a cash amount per share equal to the then-effective
liquidation preference, together with any accrued and undeclared dividends to
the date of redemption. The Corporation will provide notice of the optional
redemption date at least 30 days in advance of such date to all holders of
Series B Preferred Stock showing on the registry books of the Corporation or the
Transfer Agent as of such date and make such other public announcement as it
deems reasonable.
(b) Conversion in Lieu of Redemption. The holders' option to convert shares
of Series B Preferred Stock into shares of common stock of the Corporation will
terminate at the close of business on the business day preceding the optional
redemption date, unless the Corporation defaults in making any redemption
payment upon such optional redemption date. Holders of the Series B Preferred
Stock shall have the right to exercise conversion rights in lieu of the receipt
of the redemption payment up to and including the business day preceding the
optional redemption date.
Section 5.8. Mandatory Redemption.
(a) Mandatory Redemption Date. On the later of (i) March 15, 2011 and (ii)
120 days following the New Conversion Rights Date (the "Series B Mandatory
Redemption Date"), the Corporation must redeem all outstanding shares of Series
B Preferred Stock for a cash redemption price per share equal to the
then-effective liquidation preference, together with any accrued and undeclared
dividends to the date of redemption. In the event that the New Conversion Rights
Date has not occurred on or before March 15, 2011, then on each semi-annual
dividend payment date on or after March 15, 2011, in the event that any holder
has given the Corporation at least 60 days notice prior to such dividend payment
date, the Corporation will redeem such holders' Series B Preferred Stock at a
price per share equal to the then-effective liquidation preference, together
with any accrued and undeclared dividends to the date of redemption.
(b) Insufficient or Unavailable Capital at the Mandatory Redemption Date.
If at the Series B Mandatory Redemption Date, the Corporation does not have
sufficient capital and surplus legally available to redeem all the outstanding
shares of Series B Preferred Stock, the Corporation will take all reasonable
measures permitted under the Georgia Business Corporation Code to increase the
amount of its capital and surplus legally available, and the Corporation will
redeem as many shares of Series B Preferred Stock as it may legally redeem,
ratably (as nearly as may be practicable without creating fractional shares)
from the holders thereof in proportion to the number of shares held by them, and
shall thereafter from time to time, as soon as it shall have funds available
15
therefor, redeem as many shares of Series B Preferred Stock as it legally may
until it has redeemed all of the outstanding shares of Series B Preferred Stock.
(c) Conversion in Lieu of Redemption. The holders' option to convert shares
of Series B Preferred Stock into shares of common stock of the Corporation will
terminate at the close of business on the business day preceding the Series B
Mandatory Redemption Date (subject to any extension necessary to permit the
expiration of any applicable waiting period under the HSR Act, if applicable),
unless the Corporation defaults in making any redemption payment upon the Series
B Mandatory Redemption Date. Holders of the Series B Preferred Stock shall have
the right to exercise conversion rights in lieu of the receipt of the redemption
payment up to and including the business day preceding the Series B Mandatory
Redemption Date.
(d) Notice. The Corporation will provide notice of the Mandatory Redemption
Date at least 30 days in advance of such date to all holders of Series B
Preferred Stock showing on the registry books of the Corporation or the Transfer
Agent as of such date make such other public announcement as it deems
reasonable.
Section 5.9. Loss, Theft, Destruction of Preferred Stock. Upon receipt of
evidence satisfactory to the Corporation of the loss, theft, destruction or
mutilation of shares of Series B Preferred Stock and, in the case of any such
loss, theft or destruction, upon receipt of indemnity or security reasonably
satisfactory to the Corporation, or, in the case of any such mutilation, upon
surrender and cancellation of the Series B Preferred Stock, the Corporation
shall make, issue and deliver, in lieu of such lost, stolen, destroyed or
mutilated shares of Series B Preferred Stock, new shares of Series B Preferred
Stock of like tenor. The Series B Preferred Stock shall be held and owned upon
the express condition that the provisions of this Section 5.9 are exclusive with
respect to the replacement of mutilated, destroyed, lost or stolen shares of
Series B Preferred Stock and shall preclude any and all other rights and
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement of negotiable instruments or other
securities without the surrender thereof.
Section 5.10. Register. The Corporation shall appoint a transfer agent
registered under the Exchange Act to keep at its principal office a register in
which the Transfer Agent shall provide for the registration of the Series B
Preferred Stock. The initial Transfer Agent shall be American Stock Transfer and
Trust Company. Upon any transfer of the Series B Preferred Stock in accordance
with the provisions hereof, the Transfer Agent shall register such transfer on
the Series B Preferred Stock register. The Corporation or the Transfer Agent may
deem the person in whose name the Series B Preferred Stock shall be registered
upon the registry books of the Corporation or the Transfer Agent to be, and may
treat it as, the absolute owner of the Series B Preferred Stock for the purpose
of receiving payment of dividends on the Series B Preferred Stock, for the
conversion of the Series B Preferred Stock and for all other purposes, and the
Corporation or the Transfer Agent shall not be affected by any notice to the
contrary. All such payments and such conversions shall be valid and effective to
satisfy and discharge the liability upon the Series B Preferred Stock to the
extent of the sum or sums so paid or the conversion or conversions so made.
Section 5.11. Form of Certificates. The shares of Series B Preferred Stock
shall be certificated.
Section 5.12. Withholding. To the extent required by applicable law, the
Corporation may withhold amounts for or on account of any taxes imposed or
levied by or on behalf of any taxing authority in the United States having
16
jurisdiction over the Corporation from any payments made pursuant to the Series
B Preferred Stock.
Section 5.13. Headings. The headings of the sections of this subsection 5
are inserted for convenience only and do not constitute a part of these Articles
of Incorporation.
17
4. These Articles of Amendment were duly adopted by the Board of Directors.
Pursuant to Section 14-2-602 of the Georgia Business Corporation Code,
shareholder approval is not required.
5. The effective time and date of these Articles of Amendment shall be at 9 am
on March 16, 2006.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be signed in its name and on its behalf by its President and Chief
Executive Officer and attested to this 15th day of March, 2006.
PRG-SCHULTZ INTERNATIONAL, INC.
By: /s/ James McCurry
--------------------------------------
Name: James McCurry
Title: President and Chief Executive Officer
Attested: By: /s/ C. McKellar, Jr.
---------------------------------------
Name: Clinton McKellar, Jr.
Title: Senior Vice President, General Counsel
and Secretary