EXHIBIT 4.1
GENESIS HEALTH VENTURES, INC.
CERTIFICATE OF DESIGNATION OF SERIES H SENIOR
CONVERTIBLE PARTICIPATING CUMULATIVE PREFERRED STOCK
Genesis Health Ventures, Inc. (hereinafter referred to as the
"Company"), a corporation organized and existing under the Pennsylvania Business
Corporation Law of 1988, as amended (the "Pennsylvania Law"), in accordance with
the provisions thereof, does HEREBY CERTIFY:
That, pursuant to authority expressly granted to and vested in the
Board of Directors of the Company (the "Board of Directors") by the provisions
of Article 6 of the Amended and Restated Articles of Incorporation of the
Company (the "Articles") and the provisions of Sections 1521 and 1522 of the
Pennsylvania Law, the Board of Directors hereby creates a series of the
Company's previously authorized preferred stock, par value $.01 per share (the
"Preferred Stock"), and determines the designation and number of shares which
constitute such series and the relative rights, preferences and limitations of
such series as follows:
SERIES H SENIOR CONVERTIBLE
PARTICIPATING CUMULATIVE PREFERRED STOCK
Section 1. Designation and Amount.
The shares of such series shall be designated as "Series H Senior
Convertible Participating Cumulative Preferred Stock" (the "Series H Preferred
Stock"), and the number of shares constituting the Series H Preferred Stock
shall be 24,369; provided, that the number of shares constituting the Series H
Preferred Stock shall be increased from time to time as necessary for the
issuance of additional shares of Series H Preferred Stock upon exchange of the
Company's Series I Senior Convertible Exchangeable Participating Cumulative
Preferred Stock (the "Series I Preferred Stock") in accordance with the terms
thereof. Capitalized terms used without previous definition herein are defined
in Section 10 hereof.
Section 2. Rank.
The Series H 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 Company, each series of preferred stock of the Company
outstanding on the Issue Date and each other class of Capital Stock and series
of preferred stock of the Company hereafter created which does not expressly
provide that it ranks senior to or on a parity with the Series H Preferred Stock
as to dividend rights and rights on liquidation, winding-up and dissolution
(collectively, the "Junior Securities"). The Series H Preferred Stock shall,
with respect to dividend rights and rights on liquidation, winding-up and
dissolution, rank on a parity with the Series I Preferred Stock and each other
series of preferred stock of the Company hereafter created which expressly
provides that it ranks on a parity with the Series H Preferred Stock as to
dividend rights and rights on liquidation, winding-up and dissolution
(collectively, the "Parity Securities"); provided, that any such securities not
issued in accordance with Section 4(c) hereof shall be deemed to be
Series H Preferred Stock
Junior Securities. The Series H Preferred Stock shall, with respect to dividend
rights and rights on liquidation, winding-up and dissolution, rank junior to
each series of preferred stock of the Company hereafter created which expressly
provides that it ranks senior to the Series H Preferred Stock as to dividend
rights and rights on liquidation, winding-up and dissolution (collectively, the
"Senior Securities"); provided, that any such securities not issued in
accordance with Section 4(c) hereof shall be deemed to be Junior Securities.
Section 3. Dividends.
(a) The holders of shares of Series H Preferred Stock shall be entitled
to receive with respect to each share of Series H Preferred Stock, when, as and
if declared by the Board of Directors, out of the assets of the Company legally
available therefor, cumulative preferential dividends for each Dividend Period
calculated based on the then effective Liquidation Preference per share at the
rate per annum equal to the greater of (i) the Common Equivalent Rate with
respect to such Dividend Period and (ii) the Accumulation Rate.
(b) Prior to the fifth anniversary of the Issue Date (as defined
below), dividends (including accumulated and unpaid dividends) shall be payable
in shares of Series I Preferred Stock. On and after the fifth anniversary of the
Issue Date, dividends (including accumulated and unpaid dividends) shall be
payable in cash; provided, that such dividends shall be payable in shares of
Series I Preferred Stock to the extent that the terms of the Company's then
existing indebtedness under bank credit facilities or Public Debt prohibits the
payments of such dividends in cash. The number of shares of Series I Preferred
Stock to be issued in circumstances when dividends are paid with shares of
Series I Preferred Stock shall equal the amount of the dividend to be paid in
shares of Series I Preferred Stock divided by the then effective Liquidation
Preference per share of the Series I Preferred Stock, rounded down to the
nearest full share after taking into account all shares of Series H Preferred
Stock owned by the holder thereof. All shares of Series I Preferred Stock issued
as a dividend on the Series H Preferred Stock will thereupon be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issuance thereof.
(c) Dividends shall be payable in arrears on each March 31, June 30,
September 30 and December 31, unless such day is not a Business Day, in which
event such dividends shall be payable on the next succeeding Business Day (each
such date being hereinafter referred to as a "Dividend Payment Date"),
commencing on the first Dividend Payment Date in respect of a share of Series H
Preferred Stock which is at least seven days after the issuance thereof. For
shares of Series H Preferred Stock issued on November 15, 1999 (the "Issue
Date"), the first dividend payment shall be for the period from and including
the Issue Date to but excluding the date of the first Dividend Payment Date, and
each dividend payment thereafter shall be for the period from and including the
most recent Dividend Payment Date to but excluding the first Dividend Payment
Date thereafter. For shares of Series H Preferred Stock issued subsequent to the
Issue Date, the first dividend payment shall be for the period from and
including the date of issuance thereof to but excluding the date of the first
Dividend Payment Date thereafter, and each dividend payment thereafter shall be
for the period from and including the most recent Dividend Payment Date to but
excluding the first Dividend Payment Date thereafter. Each quarterly period
beginning on January 1, April 1, July 1 and October 1 in each year and ending on
and
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Series H Preferred Stock
including the day next preceding the first day of the next such quarterly period
shall be a "Dividend Period". The amount of dividends payable for each full
Dividend Period shall be computed by dividing the annual dividend rate by four.
Dividends (or amounts equal to accumulated and unpaid dividends) payable on
Series H Preferred Stock for any period less than a full quarterly Dividend
Period will be computed on the basis of a 360-day year of twelve 30-day months
and the actual number of days elapsed in any period less than one month. The
record date for determination of holders of Series H Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon shall be, with
respect to the dividend payable on March 31, June 30, September 30 and December
31 of each year, the preceding March 1, June 1, September 1 and December 1,
respectively, or such other record date as shall be fixed by the Board of
Directors which record date shall be no less than 30 and no more than 60
calendar days prior to the date fixed for the payment thereof. Dividends and
distributions shall be payable to holders of record as they shall appear on the
records of the Company on the applicable record date. Dividends on account of
arrears for any particular Dividend Period in which dividends were not paid on
the applicable Dividend Payment Date (including as a result of the rounding down
of the number of shares of Series I Preferred Stock issuable in the payment of
dividends as provided above in Section 3(b)) shall be added to the then
effective Liquidation Preference on the relevant Dividend Payment Date. Any
amounts so added to the then effective Liquidation Preference shall be subject
to reduction as provided below in Section 3(d).
(d) An amount equal to accumulated and unpaid dividends for any past
Dividend Period may be declared and paid as a dividend (in shares of Series I
Preferred Stock or in cash as provided above in Section 3(b)) on any subsequent
Dividend Payment Date to all holders of record on the record date relating to
such subsequent Dividend Payment Date. Each such payment shall automatically
reduce the then effective Liquidation Preference per share by an amount equal to
the aggregate amount of such payment divided by the number of shares of Series H
Preferred Stock outstanding on the record date relating to such subsequent
Dividend Payment Date; provided, however, that the Liquidation Preference shall
not be reduced below $10,000 per share.
(e) Dividends on the Series H Preferred Stock will accumulate, whether
or not there are funds legally available for the payment of such dividends and
whether or not such dividends are declared, on a daily basis. Dividends will
cease to accumulate in respect of Series H Preferred Stock on the date of the
conversion or redemption thereof.
(f) Dividends paid on the shares of Series H Preferred Stock in an
amount less than the total amount of such dividends at the time accumulated and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding, and any remainder not paid as
provided above shall be added to the Liquidation Preference as provided above in
Section 3(c).
(g) As long as any Series H Preferred Stock is outstanding, no
dividends or other distributions (other than dividends or other distributions
payable in shares of, or warrants, rights or options exerciseable for or
convertible into shares of, Junior Securities and cash in lieu of fractional
shares of such Junior Securities in connection with any such dividends) will be
paid on any Junior Securities unless: (i) full cumulative dividends on all
outstanding shares of Parity
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Series H Preferred Stock
Securities and Series H Preferred Stock have been paid, or declared and set
aside for payment, for all Dividend Periods terminating on or prior to the
payment date of such dividend or distribution and for the current Dividend
Period; (ii) the Company has paid or set aside all amounts, if any, then or
theretofore required to be paid or set aside for all purchase, retirement and
sinking funds, if any, for any outstanding shares of Parity Securities; and
(iii) the Company is not in default of any of its obligations to redeem any
outstanding shares of Parity Securities or Series H Preferred Stock.
(h) As long as any Series H Preferred Stock is outstanding, no shares
of any Junior Securities may be purchased, redeemed or otherwise acquired by the
Company or any of its subsidiaries (except in connection with a reclassification
or exchange of any Junior Securities through the issuance of shares of, or
warrants, rights or options exerciseable for or convertible into shares of,
other Junior Securities (and cash in lieu of fractional shares of such Junior
Securities in connection therewith) or the purchase, redemption or other
acquisition of any Junior Securities with any shares of, or warrants, rights or
options exerciseable for or convertible into shares of, other Junior Securities
(and cash in lieu of fractional shares of such Junior Securities in connection
therewith)), nor may any funds be set aside or made available for any sinking
fund for the purchase or redemption of any Junior Securities.
(i) As long as any Series H Preferred Stock is outstanding, no
dividends or other distributions (other than dividends or other distributions
payable in shares of, or warrants, rights or options exercisable for or
convertible into shares of, Junior Securities and cash in lieu of fractional
shares of such Junior Securities in connection with any such dividends) will be
paid on any Parity Securities unless such dividends or other distributions are
declared and paid pro rata so that the amounts of any such dividends or other
distributions declared and paid per share on outstanding Series H Preferred
Stock and each other share of such Parity Securities will in all cases bear to
each other the same ratio that the then effective Liquidation Preference per
share of outstanding Series H Preferred Stock and the liquidation preference per
share of such other outstanding shares of Parity Securities bear to each other.
(j) As long as any Series H Preferred Stock is outstanding, no shares
of any Parity Securities may be purchased, redeemed or otherwise acquired by the
Company or any of its subsidiaries (except with shares of, or warrants, rights
or options exercisable for or convertible into shares of, Junior Securities and
cash in lieu of fractional shares of such Junior Securities in connection
therewith) unless the Series H Preferred Stock and such Parity Securities are
purchased, redeemed or otherwise acquired pro rata so that the Fair Market Value
of the consideration applied to the purchase, redemption or other acquisition of
each share of Series H Preferred Stock and each other share of such Parity
Securities will in all cases bear to each other the same ratio that the then
effective Liquidation Preference per share of outstanding Series H Preferred
Stock and the liquidation preference per share of such other outstanding shares
of Parity Securities bear to each other.
(k) Subject to the provisions described above, such dividends or other
distributions (payable in cash, property or Junior Securities) as may be
determined from time to time by the Board of Directors may be declared and paid
on the shares of any Junior Securities and/or Parity Securities and from time to
time Junior Securities and/or Parity Securities may be purchased,
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Series H Preferred Stock
redeemed or otherwise acquired by the Company or any of its subsidiaries. In the
event of the declaration and payment of any such dividends or other
distributions, the holders of such Junior Securities and/or Parity Securities,
as the case may be, will be entitled, to the exclusion of holders of any
outstanding Series H Preferred Stock, to share therein according to their
respective interests.
Section 4. Voting Rights.
(a) The holders of the Series H Preferred Stock (in addition to their
rights set forth in this Section 4 and otherwise provided by law) shall be
entitled to such number of votes for each share held as equals the number of
shares of Voting Common Stock into which such shares are convertible on the
record date set for determining who is entitled to vote a particular matter and
shall vote together with the holders of the Company's Voting Common Stock (and
any other class or series of Capital Stock, if any, similarly entitled to vote),
as a single class, on all matters to be voted on by holders of the Company's
Voting Common Stock. In addition to such voting rights, holders of the Series H
Preferred Stock shall be entitled to vote as a separate class on matters as to
which the Pennsylvania Law requires a separate class vote of the Series H
Preferred Stock and shall have such other voting rights as are set forth in this
Section 4.
(b) If and whenever at any time (i) the Company shall be in default of
any of its obligations to redeem any outstanding shares of Series H Preferred
Stock or (ii) dividends payable in cash on shares of Series H Preferred Stock as
provided in Section 3(b) (i.e., dividends payable on and after the fifth
anniversary of the Issue Date to the extent that the terms of the Company's then
existing indebtedness under bank credit facilities or Public Debt do not
prohibit the payment of such dividends in cash) have not been paid in full in
cash for four consecutive fiscal quarters, thereafter and until, in the case of
clause (i), the Company shall have fulfilled its redemption obligations and, in
the case of clause (ii), until all accumulated and unpaid dividends payable in
cash as provided in Section 3(b) (i.e., dividends payable on and after the fifth
anniversary of the Issue Date to the extent that the terms of the Company's then
existing indebtedness under bank credit facilities or Public Debt do not
prohibit the payment of such dividends in cash), whether or not declared, on the
outstanding shares of Series H Preferred Stock shall have been paid in full in
cash or declared and cash set apart for the payment thereof, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of Series H Preferred Stock and, to the extent that the
Series I Preferred Stock is entitled to participate in the election of
additional directors pursuant to Section 4(b) of the Certificate of Designations
relating to the Series I Preferred Stock, Series I Preferred Stock, voting as a
single class, shall be entitled to elect the two additional directors to serve
on the Board of Directors by majority vote at any annual meeting of stockholders
or special meeting held in place thereof, or at a special meeting of the holders
of the Series H Preferred Stock and Series I Preferred Stock called as
hereinafter provided. The remaining directors of the Company shall be elected by
the classes of stock entitled to vote therefor, voting together, including the
Series H Preferred Stock, at each meeting of shareholders held for the purpose
of electing directors, all in accordance with the terms and procedures set forth
in the Company's Articles and By-Laws. At no time shall the holders of the
Series H Preferred Stock and Series I Preferred Stock be entitled to elect more
than two additional directors pursuant to this Section 4(b) and Section 4(b) of
the Certificate of Designations relating to the Series I Preferred Stock.
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Series H Preferred Stock
Whenever, in the case of clause (i), the Company shall have fulfilled its
redemption obligation and, in the case of clause (ii), all accumulated and
unpaid dividends payable in cash as provided in Section 3(b) (i.e., dividends
payable on and after the fifth anniversary of the Issue Date to the extent that
the terms of the Company's then existing indebtedness under bank credit
facilities or Public Debt do not prohibit the payment of such dividends in
cash), whether or not declared, on the outstanding shares of Series H Preferred
Stock shall have been paid in full in cash or declared and cash set apart for
the payment thereof, then subject to any right to elect additional directors
pursuant to Section 4(b) of the Certificate of Designations relating to Series I
Preferred Stock the right of the holders of the Series H Preferred Stock and
Series I Preferred Stock to elect such additional directors pursuant to this
Section 4(b) shall cease and the term of office of any person elected as
director by the holders of the Series H Preferred Stock and Series I Preferred
Stock shall forthwith terminate and the number of directors comprising the Board
of Directors shall be reduced accordingly. At any time after voting power to
elect a director shall have become vested and be continuing in the holders of
Series H Preferred Stock and Series I Preferred Stock pursuant to this Section
4(b) or if a vacancy shall exist in the office of a director elected by the
holders of Series H Preferred Stock and Series I Preferred Stock, a proper
officer of the Company may, and upon the written request of the holders of
record of at least twenty-five percent (25%) of the shares of Series H Preferred
Stock and Series I Preferred Stock then outstanding addressed to the Secretary
of the Company shall, call a special meeting of the holders of Series H
Preferred Stock and Series I Preferred Stock, for the purpose of electing the
directors which such holders are entitled to elect. If such meeting shall not be
called by a proper officer of the Company within twenty (20) days after personal
service of written request upon the Secretary of the Company, or within twenty
(20) days after mailing the same within the United States by certified mail,
addressed to the Secretary of the Company at its principal executive offices,
then the holders of at least twenty-five percent (25%) of the outstanding shares
of Series H Preferred Stock and Series I Preferred Stock may designate in
writing one of their number to call such meeting at the expense of the Company,
and such meeting may be called by the person so designated upon the notice
required for the annual meeting of stockholders of the Company and shall be held
at the place for holding the annual meetings of stockholders. Any holder of
Series H Preferred Stock or Series I Preferred Stock so designated shall have,
and the Company shall provide, access to the lists of stockholders to be called
pursuant to the provisions hereof.
(c) So long as any shares of Series H Preferred Stock are outstanding,
subject to the applicable provisions of the Pennsylvania Law, the Company shall
not, without consent of the holders of at least a majority of the number of
shares of Series H Preferred Stock and Series I Preferred Stock at the time
outstanding, voting as a class given in person or by proxy, either in writing or
by vote at a special meeting called for the purpose:
(i) increase the number of shares of authorized Series H
Preferred Stock or Series I Preferred Stock or issue any additional
shares of Series H Preferred Stock or Series I Preferred Stock, other
than as contemplated by the terms of the Series H Preferred Stock or
the Series I Preferred Stock;
(ii) amend or modify the relative rights, preferences and
limitations of the Series H Preferred Stock or Series I Preferred Stock
or amend, alter or repeal any of the provisions of the Company's
Articles or By-Laws (including by merger or similar
6
Series H Preferred Stock
transaction or otherwise) so as to eliminate the Series H Preferred
Stock or Series I Preferred Stock or otherwise affect adversely the
relative rights, preferences and limitations of the Series H Preferred
Stock or Series I Preferred Stock;
(iii) other than the Series I Preferred Stock and the Series H
Preferred Stock, create, authorize, issue or permit to exist any class
of Capital Stock or series of preferred stock that ranks senior to or
on a parity with the Series H Preferred Stock (other than preferred
stock with an aggregate liquidation preference and accumulated and
unpaid dividends not exceeding $75 million at any time outstanding
ranking on a parity with the Series H Preferred Stock with respect to
dividend rights and rights on liquidation, winding-up and dissolution)
with respect to dividend rights and/or rights on liquidation,
winding-up or dissolution, or reclassify any class or series of any
Junior Securities into, or authorize any securities exchangeable for,
convertible into or evidencing the right to purchase any such class or
series; or
(iv) enter into any transaction or series of transactions
which would constitute a Change of Control (as defined below) or engage
in any transaction pursuant to Rule 13e-3 under the Securities Exchange
Act of 1934, as amended, except in a transaction in which each share of
Series H Preferred Stock is converted into or exchanged for the right
to receive cash consideration in an amount that is at least equal to
the greater of (x) 101% of the then effective Liquidation Preference
plus accumulated and unpaid dividends from and including the most
recent Dividend Payment Date and (y) the Fair Market Value of the
consideration the holder of such share of Series H Preferred Stock
would be entitled to receive in respect of such share if such holder
were to convert such share into the Company's Voting Common Stock as
provided in Section 6 immediately prior to the effective time of the
transaction. For purposes of this clause (iv), a "Change of Control"
shall occur at any time that (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) (but
not including, for purposes of this clause (i), TPG, Cypress and any
investment funds under common control with TPG or Cypress, individually
and in the aggregate), in a single transaction or through a series of
related transactions, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of more than 50% of the total Voting Stock of the Company;
(ii) the Company consolidates or merges with or into another
corporation or conveys, transfers or leases all or substantially all of
its assets to any Person, or any corporation consolidates or mergers
with or into the Company, in any such event pursuant to a transaction
in which the outstanding Voting Stock of the Company is changed into or
exchanged for cash, securities not issued in violation of Section 4(c)
or other property, other than any such transaction where (A) the
outstanding Voting Stock of the Company is changed into or exchanged
for (x) Voting Stock of the surviving corporation which is not
Redeemable Capital Stock or (y) cash, securities or other property in
an amount which, if there is Public Debt outstanding at the time of
such transaction, could be paid under the terms of such Public Debt and
(B) the holders of the Voting Stock of the Company immediately prior to
such transaction own, directly or indirectly, not less than 50% of the
Voting Stock of the surviving corporation immediately after such
transaction; (iii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board
of Directors of the
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Series H Preferred Stock
Company (together with any new directors whose election by such Board
of Directors or whose nomination for election by the stockholders of
the Company was approved by a vote of at least 662/3% of the directors
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 Company then in office; or (iv) the Company is
liquidated or dissolved or adopts a plan of liquidation.
Section 5. Redemption.
(a) The Company shall not have the right to redeem the Series H
Preferred Stock prior to the third anniversary of the Issue Date. Thereafter and
prior to the fifth anniversary of the Issue Date, the Company shall have the
right to redeem the Series H Preferred Stock, in whole but not in part, at a
redemption price per share in cash equal to the then effective Liquidation
Preference plus accumulated and unpaid dividends for the period from and
including the most recent Dividend Payment Date through and including the date
of redemption if the Market Value of the Company's Voting Common Stock ending on
the date of the Redemption Notice exceeds 135% of the Conversion Price then in
effect. On and after the fifth anniversary of the Issue Date and prior to the
twelfth anniversary of the Issue Date, the Company shall have the right to
redeem the Series H Preferred Stock, in whole but not in part, at the redemption
price per share in cash set forth below (expressed as a percentage of the sum of
the then effective Liquidation Preference plus accumulated and unpaid dividends
for the period from and including the most recent Dividend Payment Date through
and including the date of redemption), if redeemed during the twelve-month
period beginning on the anniversary of the Issue Date in the years indicated
below:
Year Percentage
2004...................... 103.500%
2005...................... 102.333
2006...................... 101.167
2007 and thereafter....... 100.000
(b) To the extent that the Company shall have funds legally available
for such payment, on the twelfth anniversary of the Issue Date (and to the
extent that the Company does not then have funds legally available, as soon
thereafter as the Company shall have funds legally available), the Company shall
redeem all outstanding shares of the Series H Preferred Stock, if any, at a
redemption price per share in cash equal to the then effective Liquidation
Preference plus accumulated and unpaid dividends for the period from and
including the most recent Dividend Payment Date through and including the date
of redemption.
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Series H Preferred Stock
(c) A notice of the Company's intent to redeem the Series H Preferred
Stock (the "Redemption Notice") shall be sent by or on behalf of the Company, by
first class mail, postage prepaid, to holders of record at their respective
addresses as they shall appear on the records of the Company, not less than 30
days nor more than 120 days prior to the date fixed for redemption,
(i) notifying such holders of the election of the Company to
redeem such shares and of the date fixed for redemption;
(ii) stating that the Series H Preferred Stock may be
converted until the close of business on the Business Day prior to the
date of redemption by surrendering to the Company or its transfer agent
for the Series H Preferred Stock the certificate or certificates for
the shares to be converted, accompanied by written notice specifying
the number of shares to be converted, and stating the name and address
of the transfer agent for the Series H Preferred Stock, if any;
(iii) stating the place or places at which the shares called
for redemption shall, upon presentation and surrender of the
certificates evidencing such shares, be redeemed, and the redemption
price to be paid therefor;
(iv) stating that dividends shall cease to accumulate on the
date of redemption unless the Company defaults in the payment of the
redemption price; and
(v) stating the name and address of the Redemption Agent.
(d) The Company shall appoint one or more Redemption Agents. Following
such appointment and prior to any redemption, the Company shall deliver to the
Redemption Agent irrevocable written instructions authorizing the Redemption
Agent, on behalf and at the expense of the Company, to cause the Redemption
Notice to be duly mailed as soon as practicable after receipt of such
irrevocable instructions and in accordance with the above provisions. All funds
necessary for the redemption shall be deposited with the Redemption Agent in
trust at least one Business Days prior to the date fixed for redemption, for the
pro rata benefit of the holders of the Series H Preferred Stock, so as to be and
continue to be available therefor. Neither failure to mail any such Redemption
Notice, nor any defect in any Redemption Notice to one or more such holders
shall affect the sufficiency of the proceedings for redemption as to other
holders.
(e) If a Redemption Notice shall have been given as hereinbefore
provided, then each holder of Series H Preferred Stock shall be entitled to all
relative rights, preferences and limitations accorded to holders of the Series H
Preferred Stock until and including the date of redemption. Provided that the
Company shall have complied with its obligations pursuant to Sections 5(c) and
5(d), from and after the date of redemption, Series H Preferred Stock shall no
longer be deemed to be outstanding, and all rights of the holders of such shares
shall cease and terminate, except the right of the holders of such shares, upon
surrender of certificates therefor, to receive amounts to be paid hereunder.
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Series H Preferred Stock
(f) The deposit of monies in trust with the Redemption Agent shall be
irrevocable except that the Company shall be entitled to receive from the
Redemption Agent the interest or other earnings, if any, earned on any monies so
deposited in trust, and the holders of the shares redeemed shall have no claim
to such interest or other earnings, and any balance of monies so deposited by
the Company and unclaimed by the holders of the Series H Preferred Stock
entitled thereto at the expiration of two years from the date of redemption
shall be repaid, together with any interest or other earnings thereon, to the
Company, and after any such repayment, the holders of the shares entitled to the
funds so repaid to the Company shall look only to the Company for such payment,
without interest.
Section 6. Conversion Rights.
(a) Subject to and upon compliance with the provisions of this Section
6, the holder of any share of Series H Preferred Stock shall have the right at
such holder's option to convert such share of Series H Preferred Stock into
fully paid and nonassessable shares of Voting Common Stock, in each case, at the
Conversion Price in effect on the date of conversion. If the Series H Preferred
Stock has been called for redemption, such right of conversion shall terminate
at the close of business on the second Business Day prior to the date fixed for
redemption; provided, that such right of conversion shall be reinstated if and
for so long as the Company shall be in default of its obligations under Section
5(d).
(b) Each share of Series H Preferred Stock shall be converted into a
number of shares of Voting Common Stock determined by dividing (i) the sum of
the Liquidation Preference on the date of conversion plus accumulated and unpaid
dividends for the period from and including the most recent Dividend Payment
Date through and including the date of conversion by (ii) the Conversion Price
in effect on the date of conversion.
(c) The holder of any shares of Series H Preferred Stock may exercise
the conversion right specified in Section 6(a) by surrendering to the Company or
its transfer agent for the Series H Preferred Stock the certificate or
certificates for the shares to be converted, accompanied by written notice
specifying the number of shares to be converted. Conversion shall be deemed to
have been effected on the date when delivery of notice of an election to convert
and certificates for shares are received by the Company. Subject to the
provisions of Section 6(f)(vii), as promptly as practicable thereafter, the
Company shall issue and deliver to or upon the written order of such holder a
certificate or certificates for the number of full shares of Voting Common Stock
to which such holder is entitled and a check or cash with respect to any
fractional interest in a share of Voting Common Stock, as provided in Section
6(e).
(d) Subject to the provisions of Section 6(f)(vii), the person in whose
name the certificate or certificates for Voting Common Stock are to be issued
shall be deemed to have become a holder of record of such Voting Common Stock
immediately prior to the close of business on the date of conversion. Upon
conversion of only a portion of the number of shares covered by a certificate
representing shares of Series H Preferred Stock surrendered for conversion, the
Company shall issue and deliver to or upon the written order of the holder of
the certificate so surrendered for conversion, at the expense of the Company, a
new certificate covering the
10
Series H Preferred Stock
number of shares of Series H Preferred Stock representing the unconverted
portion of the certificate so surrendered.
(e) No fractional shares of Voting Common Stock shall be issued upon
conversion of shares of Series H Preferred Stock. If more than one share of
Series H Preferred Stock shall be surrendered for conversion at any one time by
the same holder, the number of full shares of Voting Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of Series H Preferred Stock so surrendered. Instead of any fractional
shares of Voting Common Stock that would otherwise be issuable upon conversion
of any shares of Series H Preferred Stock, the Company shall pay a cash
adjustment in respect of such fractional interest in an amount equal to that
fractional interest of a share multiplied by the Market Value of the Voting
Common Stock.
(f) The Conversion Price shall be subject to adjustment from time to
time as follows.
(i) Common Stock Issued at Less Than the Market Value. If the
Company shall issue any Common Stock, other than Excluded Stock or Common Stock
issued in an Excluded Transaction, without consideration or for a consideration
per share less than the Market Value immediately prior to such issuance, the
Conversion Price in effect immediately prior to each such issuance shall
immediately (except as provided below) be reduced to the price determined by
multiplying the Conversion Price in effect immediately prior to such issuance by
a fraction (A) the numerator of which is the sum of (1) the number of shares of
Voting Common Stock and Non-Voting Common Stock outstanding immediately prior to
such issuance and (2) the number of shares of Voting Common Stock and Non-Voting
Common Stock that the aggregate consideration, if any, received by the Company
upon such issuance, would purchase at such Market Value and (B) the denominator
of which is the total number of shares of Voting Common Stock and Non-Voting
Common Stock outstanding immediately after such issuance.
For the purposes of any adjustment of the Conversion
Price pursuant to clause (i), the following provisions shall
be applicable.
(A) Cash. In the case of the issuance of
Common Stock for cash, the amount of the consideration
received by the Company shall be deemed to be the amount of
the cash proceeds received by the Company for such Common
Stock before deducting therefrom any discounts, commissions,
taxes or other expenses allowed, paid or incurred by the
Company for any underwriting or otherwise in connection with
the issuance and sale thereof.
(B) Consideration Other Than Cash. In the
case of the issuance of Common Stock (otherwise than upon the
conversion of shares of Capital Stock or other securities of
the Company) for a consideration in whole or in part other
than cash, including securities acquired in exchange therefor
(other than securities by their terms so exchangeable), the
consideration other than cash shall be deemed to be the Fair
Market Value thereof, irrespective of any accounting
treatment.
11
Series H Preferred Stock
(C) Options and Convertible Securities. In
the case of the issuance of (x) options, warrants or other
rights to purchase or acquire Common Stock (whether or not at
the time exercisable) (but any adjustment pursuant to this
provision shall be made only to the extent any adjustment
shall have not been made pursuant to Section 6(f)(iv)(D)), (y)
securities by their terms convertible into or exchangeable for
Common Stock (whether or not at the time so convertible or
exchangeable) or (z) options, warrants or rights to purchase
such convertible or exchangeable securities (whether or not at
the time exercisable),
(1) the aggregate maximum number of
shares of Common Stock deliverable upon exercise of such
options, warrants or other rights to purchase or acquire
Common Stock shall be deemed to have been issued at the time
such options, warrants or rights were issued and for a
consideration equal to the consideration (determined in the
manner provided in subclauses (A) and (B) above), if any,
received by the Company upon the issuance of such options,
warrants or rights plus the minimum purchase price provided in
such options, warrants or rights for the shares of Common
Stock covered thereby,
(2) the aggregate maximum number of
shares of Common Stock deliverable upon conversion of or in
exchange for any such convertible or exchangeable securities,
or upon the exercise of options, warrants or other rights to
purchase or acquire such convertible or exchangeable
securities and the subsequent conversion or exchange thereof,
shall be deemed to have been issued at the time such
convertible or exchangeable securities were issued or such
options, warrants or rights were issued and for a
consideration equal to the consideration, if any, received by
the Company for any such convertible or exchangeable
securities or options, warrants or rights (excluding any cash
received on account of accumulated interest or accumulated
dividends), plus the additional consideration (determined in
the manner provided in subclauses (A) and (B) above), if any,
to be received by the Company upon the conversion or exchange
of such securities, or upon the exercise of any related
options, warrants or rights to purchase or acquire such
convertible or exchangeable securities and the subsequent
conversion or exchange thereof,
(3) on any change in the number of
shares of Common Stock deliverable upon exercise of any such
options, warrants or rights or conversion or exchange of such
convertible or exchangeable securities or any change in the
consideration to be received by the Company upon such
exercise, conversion or exchange (but excluding any change
resulting solely from the operation of the anti-dilution
provisions thereof if, and only if, such anti-dilution
provisions would not require an adjustment to the exercise
price or conversion price thereof in the event of any change
to the Conversion Price pursuant to the provisions of this
Section 6), the Conversion Price as then in effect shall
forthwith be readjusted to such Conversion Price as would have
been obtained had an adjustment been made upon the issuance of
such options, warrants or rights not
12
Series H Preferred Stock
exercised prior to such change, or of such convertible or
exchangeable securities not converted or exchanged prior to
such change, upon the basis of such change,
(4) on the expiration or
cancellation of any such options, warrants or rights that are
unexercised, or the termination of the right to convert or
exchange such convertible or exchangeable securities, if the
Conversion Price shall have been adjusted upon the issuance
thereof, the Conversion Price shall forthwith be readjusted to
such Conversion Price as would have been obtained had an
adjustment been made upon the issuance of such options,
warrants, rights or such convertible or exchangeable
securities on the basis of the issuance of only the number of
shares of Common Stock actually issued upon the exercise of
such options, warrants or rights, or upon the conversion or
exchange of such convertible or exchangeable securities and
(5) if the Conversion Price shall
have been adjusted upon the issuance of any such options,
warrants, rights or convertible or exchangeable securities no
further adjustment of the Conversion Price shall be made for
the actual issuance of Common Stock upon the exercise,
conversion or exchange thereof.
(ii) Excluded Stock. All shares of Excluded Stock which the
Company has reserved for issuance shall be deemed to be outstanding for all
purposes of computations under Section 6(f)(i).
(iii) Stock Dividends, Subdivisions, Reclassifications or
Combinations. If the Company shall (A) declare a dividend or make a distribution
on its Common Stock in shares of its Common Stock, (B) subdivide, split or
reclassify (by merger, consolidation or otherwise) the outstanding shares of
Common Stock into a greater number of shares, (C) combine or reclassify (by
merger, consolidation or otherwise) the outstanding Common Stock into a smaller
number of shares or (D) issue any shares of its Common Stock in a
reclassification (by merger, consolidation or otherwise), the Conversion Price
in effect at the time of the record date for such dividend or distribution or
the effective date of such subdivision, combination or reclassification shall be
proportionately adjusted so that the holder of any shares of Series H Preferred
Stock surrendered for conversion after such date shall be entitled to receive
the number of shares of Voting Common Stock which such holder would have owned
or been entitled to receive had such Series H Preferred Stock been converted
immediately prior to such date. Successive adjustments in the Conversion Price
shall be made whenever any event specified above shall occur.
(iv) Other Distributions. In case the Company shall fix a
record date for the making of a distribution to all holders of shares of its
Common Stock (A) of shares of any class other than its Common Stock or (B) of
evidence of indebtedness of the Company or any subsidiary or (C) of assets or
other property, including but not limited to, securities issued by subsidiaries
or others (excluding regular cash dividends, and dividends or distributions
referred to in Section 6(f)(iii) above), or (D) of options, warrants or other
rights, in each such case the Conversion Price in effect immediately prior
thereto shall be reduced immediately thereafter to
13
Series H Preferred Stock
the price determined by dividing (1) an amount equal to the difference resulting
from (A) the sum of (i) the number of shares of Voting Common Stock outstanding
on such record date multiplied by the Conversion Price per share on such record
date and (ii) the number of shares of Non-Voting Common Stock outstanding on
such record date multiplied by the Conversion Price (determined in accordance
with and pursuant to the Certificate of Designations of Series I Preferred
Stock) per share on such record date, less (B) the Fair Market Value of such
shares or evidences of indebtedness or assets or rights or warrants to be so
distributed, by (2) the number of shares of Voting Common Stock and Non-Voting
Common Stock outstanding on such record date. Such adjustment shall be made
successively whenever such a record date is fixed. In the event that such
distribution is not so made, the Conversion Price then in effect shall be
readjusted, effective as of the date when the Board of Directors determines not
to distribute such shares, evidences of indebtedness, assets, property, options,
rights or warrants, as the case may be, to the Conversion Price which would then
be in effect if such record date had not been fixed. Rights (including, without
limitation, those to be issued pursuant to, and in accordance with, the Rights
Agreement, dated as of April 20, 1995, between the Company and Mellon Securities
Trust Company, as Rights Agent) issued by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase Equity
Securities, which rights (x) are deemed to be transferred with such shares of
Common Stock, (y) are not exercisable and (z) are also issued in respect of
future issuances of Common Stock, including shares of Common Stock issued upon
conversion of the Series H Preferred Stock, in each case in clauses (x) through
(z) until the occurrence of a specified event or events (a "Trigger Event"),
shall for purposes of this paragraph not be deemed issued until the occurrence
of the earliest Trigger Event.
(v) Consolidation, Merger, Sale, Lease or Conveyance. In case
of any consolidation or merger of the Company with or into another corporation
or entity, or in case of any sale, lease or conveyance to another corporation or
entity of the assets of the Company as an entirety or substantially as an
entirety, each share of Series H Preferred Stock shall after the date of such
consolidation, merger, sale, lease or conveyance be convertible into the number
of shares of stock or other securities or property (including cash) to which the
Voting Common Stock issuable (immediately prior to the time of such
consolidation, merger, sale, lease or conveyance) upon conversion of such share
of Series H Preferred Stock would have been entitled upon such consolidation,
merger, sale, lease or conveyance, and in any such case, if necessary, the
provisions set forth herein with respect to the rights and interests thereafter
of the holders of the shares of Series H Preferred Stock shall be appropriately
adjusted so as to be applicable, as nearly as may reasonably be possible, to any
shares of stock or other securities or property thereafter deliverable on the
conversion of the shares of Series H Preferred Stock.
(vi) Rounding of Calculations. All calculations under this
subparagraph (f) shall be made to the nearest cent or to the nearest one ten
thousandth of a share, as the case may be.
(vii) Timing of Issuance of Additional Common Stock Upon
Certain Adjustments. In any case in which the provisions of this subparagraph
(f) shall require that an adjustment shall become effective immediately after a
record date for an event, the Company may defer until the occurrence of such
event (A) issuing to the holder of any share of Series H Preferred Stock
converted after such record date and before the occurrence of such event the
14
Series H Preferred Stock
additional shares of Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the shares of Common Stock
issuable upon such conversion before giving effect to such adjustment and (B)
paying to such holder any amount of cash in lieu of a fractional share of Common
Stock, provided, that the Company, upon request, shall deliver to such holder a
due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares, and such cash, upon the occurrence of the event
requiring such adjustment.
(g) Statement Regarding Adjustments. Whenever the Conversion Price
shall be adjusted, the Company shall forthwith file, at the office of the
transfer agent for the Series H Preferred Stock, if any, and at the principal
office of the Company, a statement showing in detail the facts requiring such
adjustment and the Conversion Price that shall be in effect after such
adjustment, and the Company shall also cause a copy of such statement to be sent
by mail, first class postage prepaid, to each holder of shares of Series H
Preferred Stock at its address appearing on the Company's records.
(h) Notice to Holders. In the event the Company shall propose to take
any action of the type described in clause (i) (but only if the action of the
type described in clause (i) would result in an adjustment in the Conversion
Price), (iii), (iv) or (v) of Section 6(f), the Company shall give notice to
each holder of shares of Series H Preferred Stock, in the manner set forth in
subparagraph 6(g), which notice shall specify the record date, if any, with
respect to any such action and the approximate date on which such action is to
take place. Such notice shall also set forth such facts with respect thereto as
shall be reasonably necessary to indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the Conversion
Price and the number, kind or class of shares or other securities or property
which shall be deliverable upon conversion of shares of Series H Preferred
Stock. In the case of any action which would require the fixing of a record
date, such notice shall be given at least ten days prior to the date so fixed,
and in case of all other action, such notice shall be given at least fifteen
days prior to the taking of such proposed action. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of any such
action.
(i) Treasury Stock. For the purposes of this paragraph 6, the sale or
other disposition of any Common Stock theretofore held in the Company's treasury
shall be deemed to be an issuance thereof.
(j) Costs. The Company shall pay all documentary, stamp, transfer or
other transactional taxes attributable to the issuance or delivery of shares of
Voting Common Stock upon conversion of any shares of Series H Preferred Stock,
provided that the Company shall not be required to pay any taxes which may be
payable in respect of any transfer involved in the issuance or delivery of any
certificate for such shares in a name other than that of the holder of the
shares of Series H Preferred Stock in respect of which such shares are being
issued.
(k) Reservation of Shares. The Company shall reserve at all times so
long as any shares of Series H Preferred Stock remain outstanding, free from
preemptive rights, out of its treasury stock (if applicable) or its authorized
but unissued shares, or both, solely for the purpose of effecting the conversion
of the shares of Series H Preferred Stock, sufficient shares of Voting
15
Series H Preferred Stock
Common Stock to provide for the conversion of all outstanding shares of Series H
Preferred Stock.
(l) Approvals. If any shares of Voting Common Stock to be reserved for
the purpose of conversion of shares of Series H Preferred Stock require
registration with or approval of any governmental authority under any Federal or
state law before such shares may be validly issued or delivered upon conversion,
then the Company will in good faith and as expeditiously as possible endeavor to
secure such registration or approval, as the case may be. If, and so long as,
any Voting Common Stock into which the shares of Series H Preferred Stock are
then convertible is listed on any national securities exchange, the Company
will, if permitted by the rules of such exchange, list and keep listed on such
exchange, upon official notice of issuance, all shares of such Voting Common
Stock issuable upon conversion.
(m) Valid Issuance. All shares of Voting Common Stock which may be
issued upon conversion of the shares of Series H Preferred Stock will upon
issuance by the Company be duly and validly issued, fully paid and
nonassessable, not issued in violation of any preemptive rights arising under
law or contract and free from all taxes, liens and charges with respect to the
issuance thereof, and the Company shall take no action which will cause a
contrary result (including without limitation, any action which would cause the
Conversion Price to be less than the par value, if any, of the Voting Common
Stock).
Section 7. Liquidation Preference.
(a) In the event of the liquidation, winding-up or dissolution of the
business of the Company, whether voluntary or involuntary, the holders of Series
H Preferred Stock then outstanding, after payment or provision for payment of
the debts and other liabilities of the Company and the payment or provision for
payment of any distribution on any shares of the Company having a preference and
a priority over the Series H Preferred Stock on liquidation, and before any
distribution to holders of any shares of the Company that are junior and
subordinate to the Series H Preferred Stock on liquidation, shall be entitled to
be paid out of the assets of the Company available for distribution to its
stockholders in respect of each share of Series H Preferred Stock, the greater
of (i) the then effective Liquidation Preference per share of Series H Preferred
Stock plus accumulated and unpaid dividends from and including the most recent
Dividend Payment Date through and including the date of liquidation, winding-up
or dissolution and (ii) the amount that would be payable to the holders of the
Series H Preferred Stock if the shares of Series H Preferred Stock had been
converted into shares of Voting Common Stock immediately prior to such
liquidation, winding-up or dissolution. In the event the assets of the Company
available for distribution to the holders of the Series H Preferred Stock upon
any dissolution, winding-up or liquidation of the Company shall be insufficient
to pay in full the liquidation payments payable to the holders of outstanding
Series H Preferred Stock and of all other Parity Securities, the holders of
Series H Preferred Stock and all other Parity Securities shall share ratably in
such distribution of assets in proportion to the amount which would be payable
on such distribution if the amounts to which the holders of outstanding Series H
Preferred Stock and the holders of outstanding shares of such Parity Securities
were paid in full. Except as provided in this Section 7, holders of Series H
Preferred Stock shall not be
16
Series H Preferred Stock
entitled to any distribution in the event of the liquidation, winding-up or
dissolution of the Company.
(b) For the purposes of this Section 7, none of the following shall be
deemed to be a voluntary or involuntary liquidation, dissolution or winding-up
of the Company:
(i) the sale, lease, transfer or exchange of all or
substantially all of the assets of the Company; or
(ii) the consolidation or merger of the Company with or into
one or more other corporations or entities (whether or not the Company
is the corporation surviving such consolidation or merger).
Section 8. Special Right to Appoint Directors. Beginning on the Issue
Date and continuing for so long as Cypress Merchant Banking Partners L.P.
("Cypress") and TPG Partners II, L.P. ("TPG") and investment funds under common
control with Cypress or TPG own any combination of voting securities of the
Company and securities convertible into or exercisable for voting securities of
the Company where all such voting securities represent more than 10% of the
Company's total voting power, Cypress and TPG, acting jointly (or in the event
that only one of Cypress and investment funds under common control with Cypress,
on the one hand, and TPG and investment funds under common control with TPG, or
the other hand, shall then own or have the right to acquire voting securities of
the Company, then such Person), shall be entitled pursuant to this Section 8 to
designate a number of directors representing at least 23% of the total number of
directors constituting the full board of directors of the Company; provided,
that for so long as the total number of directors constituting the full board of
directors of the Company is 9 or fewer, Cypress and/or TPG, as the case may be,
shall only be entitled pursuant to this Section 8 to designate two directors on
the board of directors of the Company. For purposes of the calculation in this
Section 8, the Series I Preferred Stock and the securities issuable upon
conversion of the Series I Preferred Stock shall be counted as if they were
voting securities. Each of Cypress and TPG shall have the right to assign its
rights under this Section 8 to investment funds under common control with it.
Each committee of the board of directors of the Company shall include
at least one director designated by Cypress and/or TPG as provided above;
provided, that this requirement shall not apply with respect to the appointment
of any particular designee to a committee in the event that the rules or
regulations of the primary securities exchange or quotation system on which the
Company's Voting Common Stock is then listed or quoted or applicable law
prohibits the appointment of such director to such committee.
The Company and the Board of Directors shall take all actions necessary
to effect such designation to the Board of Directors (including, without
limitation, increasing the size of the Board of Directors and/or removing
directors) and to each committee thereof.
Section 9. Re-issuance. Series H Preferred Stock that has been issued
and reacquired in any manner, including shares purchased, exchanged or
converted, shall not be reissued as shares of Series H Preferred Stock and shall
(upon compliance with any applicable provisions of the
17
Series H Preferred Stock
laws of the Commonwealth of Pennsylvania) have the status of authorized and
unissued shares of the Preferred Stock undesignated as to series and may be
redesignated and reissued as part of any series of Preferred Stock (including
Series H Preferred Stock issued in accordance with Section 1).
Section 10. Definitions.
For the purposes hereof, the following definitions shall apply:
"Accumulation Rate" means 5.00%; provided, that the then effective
Accumulation Rate shall increase by 0.50% on November 15th of each year
beginning on November 15, 2004 up to a maximum of 8.50%; provided, further, that
if at any time the Company shall be in default of its obligation to redeem any
shares of the Series H Preferred Stock, the then effective Accumulation Rate
shall increase by 2.00%.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in the City of New York are authorized or required by
law to close.
"Capital Stock" means any and all shares, interests, participations,
rights in or other equivalents (however designated and whether voting or
non-voting) or corporate stock, and any and all rights (other than any evidence
of indebtedness), warrants or options exchangeable for or convertible into such
corporate stock.
"Common Equivalent Rate" means, with respect to any Dividend Period,
the quotient of (a) the product of (i) all dividends declared during such
Dividend Period with respect to a share of Common Stock, (ii) four and (iii) the
number of shares of Common Stock issuable upon conversion of a share of Series H
Preferred Stock on the last day of such Dividend Period, divided by (b) the
Liquidation Preference of a share of Series H Preferred Stock on the first day
of such Dividend Period.
"Common Stock" means the Voting Common Stock or the Non-Voting Common
Stock.
"Conversion Price" means the price per share of Voting Common Stock
used to determine the number of shares of Voting Common Stock deliverable upon
conversion of a share of the Series H Preferred Stock, which price shall
initially be $8.75 per share, subject to adjustment in accordance with the
provisions of Section 7.
"Equity Securities" of any Person means any and all common stock,
preferred stock, any other class of capital stock and partnership or limited
liability company interests of such Person or any other similar interests of any
Person that is not a corporation, partnership or limited liability company.
"Excluded Stock" means shares of Voting Common Stock issued or reserved
for issuance by the Company (a) as a stock dividend payable in shares of Voting
Common Stock, (b) upon any subdivision or split-up of the outstanding shares of
Voting Common Stock, (c) upon conversion of shares of Series H Preferred Stock
or (d) pursuant to bona fide employee benefit
18
Series H Preferred Stock
plans, provided, that such shares are issued for consideration equal to or
greater than the fair value thereof on the date of award.
"Excluded Transaction" means (i) an underwritten public offering of
Common Stock and (ii) the issuance of Common Stock solely in exchange for assets
or all of the stock of another Person (whether by merger, exchange or otherwise)
in a transaction in which a nationally recognized investment banking firm has
advised the Company that the transaction is fair and reasonable to the Company
from a financial point of view.
"Fair Market Value" of any securities shall mean the Market Value
thereof and of any consideration other than cash or securities shall mean the
amount which a willing buyer would pay to a willing seller in an arm's length
transaction as determined by an independent investment banking or appraisal firm
experienced in the valuation of such securities or property selected in good
faith by the Board of Directors.
"Liquidation Preference" means, on any date, the sum of $10,000 per
share of Series H Preferred Stock, plus accumulated and unpaid dividends added
to the Liquidation Preference in accordance with Section 3(a).
"Market Value," with respect to any security, means the average of the
daily closing prices of such security for the 30 trading day period ending on
the relevant date of determination. The closing price for each day shall be the
last reported sales price regular way or, in case no such reported sale takes
place on such day, the average of the reported closing bid and asked prices
regular way, in either case on the New York Stock Exchange, or, such security is
not listed or admitted to trading on the New York Stock Exchange, on the
American Stock Exchange, or, if such security is not listed or admitted to
trading on the American Stock Exchange, the average of the closing bid and asked
prices of such security in the over-the-counter market as reported on the NASDAQ
system of the National Association of Securities Dealers, Inc. or if such
security is not so quoted, the average of the closing bid and asked price of
such security in the over-the-counter market as furnished by any nationally
recognized New York Stock Exchange member firm selected by the Company for such
purpose. If such security is not so listed, quoted or traded, the closing price
shall mean the amount which a willing buyer would pay to a willing seller in an
arm's length transaction as determined by an independent investment banking or
appraisal firm experienced in the valuation of such securities or property
selected in good faith by the Board of Directors of the issuer of such security.
"Non-Voting Common Stock" means the Company's non-voting common stock,
par value $.02 per share and shall also include (i) capital stock of the Company
of any other class (regardless of how denominated) issued to the holders of
shares of Non-Voting Common Stock upon any reclassification thereof in which the
shares of Non-Voting Common Stock are converted into a new class of capital
stock and (ii) shares of common stock of any successor or acquiring corporation
received by or distributed to the holders of Non-Voting Common Stock.
"Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.
19
Series H Preferred Stock
"Public Debt" means obligations evidenced by bonds, notes, debentures
or other similar instruments issued in an underwritten public offering
registered under the Securities Act of 1933, in an offering pursuant to Rule
144A under the Securities Act of 1933 or in an exchange offer registered on Form
S-4.
"Redeemable Capital Stock" means, with respect to any Person, any
Capital Stock of such Person that, either by its terms, by the terms of any
security into which it is convertible or exchangeable or otherwise, is, or upon
the happening of an event or passage of time would be, required to be redeemed
prior to the last stated maturity of the principal of any Public Debt of such
Person outstanding at the time of issuance of such Capital Stock or is
redeemable at the option of the holder thereof at any time prior to any such
stated maturity, or is convertible into or exchangeable for debt securities at
any time prior to any such stated maturity at the option of the holder thereof.
"Redemption Agent" means a bank or trust company in good standing,
organized under the laws of the United States of America or any jurisdiction
thereof, having capital, surplus and undivided profits aggregating at least One
Hundred Million Dollars, appointed by the Company to act as agent to redeem the
Series H Preferred Stock.
"Voting Common Stock" means the Company's common stock, par value $.02
per share and shall also include (i) capital stock of the Company of any other
class (regardless of how denominated) issued to the holders of shares of Voting
Common Stock upon any reclassification thereof in which the shares of Voting
Common Stock are converted into a new class of capital stock and (ii) shares of
common stock of any successor or acquiring corporation received by or
distributed to the holders of Voting Common Stock.
"Voting Stock" means stock of the class or classes pursuant to which
the holders thereof have the general voting power under ordinary circumstances
to elect at least a majority of the board of directors, managers or trustees of
a corporation (irrespective of whether or not at the time stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).
and
That the issuance of 24,369 shares of Series H Senior Convertible
Participating Cumulative Preferred Stock has been initially authorized by the
Board of Directors of said Company.
20
Series H Preferred Stock
In Witness Whereof, the Company has caused this Certificate of
Designation to be signed and acknowledged by Michael R. Walker, and its
corporate seal to be hereunto affixed and attested by Ira C. Gubernick, this the
11th day of November, 1999.
Genesis Health Ventures, Inc.
/s/ Michael R. Walker
By:________________________________
Name: Michael R. Walker
Title: Chairman of the Board and
Chief Executive Officer
[CORPORATE SEAL]
Attest:
/s/ Ira C. Gubernick
By:______________________________
Name: Ira C. Gubernick
Title: Vice President - Office of
the Chairman and
Corporate Secretary
21