EXHIBIT 3.1
INTERNATIONAL SHIPHOLDING CORPORATION
CERTIFICATE OF DESIGNATIONS OF THE
6.0% CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
($1.00 PAR VALUE PER SHARE)
(LIQUIDATION PREFERENCE $50 PER SHARE)
PURSUANT TO SECTION 151(g) OF THE GENERAL CORPORATION LAW OF THE STATE OF
DELAWARE
THE UNDERSIGNED, being the Chairman of the Board and Chief Executive
Officer of International Shipholding Corporation, a Delaware corporation (the
"COMPANY"), does hereby certify that, pursuant to the provisions of Section
151(g) of the General Corporation Law of the State of Delaware, the following
resolutions were duly adopted by the Board of Directors of the Company and the
Pricing Committee thereof, and pursuant to authority conferred upon the Board of
Directors by the provisions of the Restated Certificate of Incorporation of the
Company and, in the case of the Pricing Committee, by express resolution of the
Board of Directors, the Board of Directors of the Company and the Pricing
Committee adopted resolutions fixing the designations and the relative powers,
preferences, rights, qualifications, limitations and restrictions of the 6.0%
Convertible Exchangeable Preferred Stock of the Company. These composite
resolutions are as follows:
RESOLVED, 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 the Restated Certificate of Incorporation of the Company (the
"CERTIFICATE OF INCORPORATION"), the issuance of a series of preferred stock,
par value $1.00 per share, which shall consist of 880,000 of the 1,000,000
shares of preferred stock which the Company now has authority to issue, be, and
the same hereby is, authorized, and the Board of Directors hereby fixes the
powers, designations, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations and restrictions
thereof (in addition to the powers, designations, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, set forth in the Certificate of
Incorporation which may be applicable to the preferred stock of this series) as
follows:
1. NUMBER OF SHARES AND DESIGNATION. 880,000 shares of the preferred
stock, par value $1.00 per share, of the Company are hereby constituted as a
series of the preferred stock designated as 6.0% Convertible Exchangeable
Preferred Stock (the "PREFERRED STOCK").
2. DEFINITIONS. For purposes of the Preferred Stock, in addition to
those terms otherwise defined herein, the following terms shall have the
meanings indicated:
"accrued" has the meaning specified in Section 3(a).
"Affiliate" of any specified person shall mean any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such
specified person. For the purposes of this definition, "control," when used with
respect to any specified person means the power to direct or cause the direction
of the management and policies of such person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Amended Rights Plan" has the meaning specified in Section
7(d)(iv).
"Beneficial Owner" means the person in whose name a share of
Preferred Stock is recorded as beneficial owner of such share by the Depositary,
or by any participant or indirect participant in the Depositary, as the case may
be.
"Board of Directors" shall mean the Board of Directors of the
Company or a committee of the Board of Directors duly authorized to act for it
hereunder.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Transfer Agent.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which the banking institutions in the City of
New York, New York are authorized or obligated by law or executive order to
close or be closed.
"Certificate of Designations" means this Certificate of
Designations of the Preferred Stock.
"Certificate of Incorporation" means the Restated Certificate
of Incorporation of the Company, dated April 17, 1996, as such may be amended,
modified or restated from time to time.
"Change in Control" shall be deemed to have occurred at the
time, after the Issue Date, (i) that any person or group of persons (within the
meaning of Sections 13(d) or 14(a) of the Exchange Act) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Commission under the Exchange Act) of 50% or more of the voting capital stock of
the Company; or (ii) within a period of twelve (12) consecutive calendar months,
individuals who were directors of the Company on the first day of such period
(together with any new directors whose election to the Board of Directors, or
whose nomination for election, was approved by a vote of a majority 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) shall cease to constitute a majority of the Board of Directors.
"Change in Control Purchase Date" has the meaning specified in
Section 6(a).
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"Change in Control Purchase Notice" has the meaning specified
in Section 6(c).
"Closing Price" has the meaning specified in Section 7(i)(i).
"Commission" shall mean the Securities and Exchange
Commission.
"Common Stock" shall mean the class of capital stock of the
Company designated as Common Stock, par value $1.00 per share, at the date
hereof. Subject to the provisions of Section 7(e), shares issuable on conversion
of the Preferred Stock shall include only shares of such class or shares of any
class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which are not subject to redemption by the
Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable on conversion of
the Preferred Stock shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from all such
reclassifications.
"Company" shall mean International Shipholding Corporation, a
Delaware corporation, and shall include its successors and assigns.
"Conversion Price" shall have the meaning specified in Section
7(a).
"Current Market Price" has the meaning specified in Section
7(i)(ii).
"Depositary" means, with respect to the Preferred Stock
issuable or issued in the form of a Global Certificate, the person specified in
Section 14(c) as the Depositary with respect to the Preferred Stock, until a
successor shall have been appointed and become such pursuant to the applicable
provisions of this Certificate of Designations, and thereafter, "Depositary"
shall mean or include such successor. The foregoing sentence shall likewise
apply to any subsequent successor or successors.
"Dividend Payment Date" shall have the meaning specified in
Section 3(a).
"Dividend Payment Record Date" shall have the meaning
specified in Section 3(a).
"Dividend Period" or "Dividend Periods" shall mean the
quarterly dividend period or periods, commencing on, and including, a Dividend
Payment Date and ending on, but excluding, the immediately succeeding Dividend
Payment Date (other than the initial Dividend Period which shall commence on the
Issue Date and end on, but exclude, the initial Dividend Payment Date).
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Date" shall have the meaning specified in Section
10(b).
"'ex' date" has the meaning specified in Section 7(i)(ii).
"Expiration Time" shall have the meaning specified in Section
7(d)(vi).
"fair market value" has the meaning specified in Section
7(i)(iii).
"Global Certificate" shall have the meaning specified in
Section 14(a).
"holder," "holder of shares of Preferred Stock," or "holder of
the Preferred Stock," as applied to any share of Preferred Stock, or other
similar terms (but excluding the term "beneficial holder"), shall mean any
person in whose name at the time a particular share of Preferred Stock is
registered on the Company's stock records, which shall include the books of the
Transfer Agent in respect of the Company and any stock transfer books of the
Company.
"Indenture" shall mean the Indenture governing the Notes, to
be dated on or about January 6, 2005, between the Company and The Bank of New
York, as trustee.
"Issue Date" shall mean the first date on which shares of the
Preferred Stock are issued.
"Junior Stock" means the Common Stock and each other class of
capital stock or series of preferred stock of the Company established by the
Board of Directors after the Issue Date, the terms of which do not expressly
provide that such class or series ranks senior to or on parity with the
Preferred Stock as to dividend rights or rights upon the liquidation, winding-up
or dissolution of the Company. "Junior Stock" shall include warrants, rights,
calls, options and other securities exercisable or exchangeable for, or
convertible into, such capital stock or preferred stock of the Company.
"Liquidation" has the meaning specified in Section 4(a).
"Liquidation Preference" shall have the meaning specified in
Section 4(a).
"New Rights Plan" has the meaning specified in Section
7(d)(iv).
"Non-Electing Share" has the meaning specified in Section
7(e).
"Notes" shall mean the Company's 6.0% Convertible Subordinated
Notes due 2014, issuable under the Indenture upon the Company's exchange of the
Preferred Stock pursuant to Section 10.
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"Officers' Certificate," when used with respect to the
Company, shall mean a certificate signed by (a) one of the President, the Chief
Executive Officer, Executive or Senior Vice President, any Vice President
(whether or not designated by a number or numbers or word or words added before
or after the title "Vice President") or the Chief Financial Officer, and (b) one
of the Treasurer or any Assistant Treasurer, Secretary or any Assistant
Secretary, or the Controller of the Company, which is delivered to the Transfer
Agent.
"Parity Stock" means any class of capital stock or series of
preferred stock of the Company established by the Board of Directors after the
Issue Date, the terms of which expressly provide that such class or series will
rank on parity with the Preferred Stock as to dividend rights or rights upon the
liquidation, winding-up or dissolution of the Company. "Parity Stock" shall
include warrants, rights, calls, options and other securities exercisable or
exchangeable for, or convertible into, such capital stock or preferred stock of
the Company.
"person" shall mean a corporation, an association, a
partnership, an individual, a joint venture, a joint stock company, a trust, a
limited liability company, an unincorporated organization or any other entity or
organization, including a government or an agency, instrumentality or political
subdivision thereof.
"Preferred Stock" has the meaning specified in Section 1.
"Purchased Shares" has the meaning specified in Section
7(d)(vi).
"Record Date" has the meaning specified in Section 7(i)(iv).
"Reference Period" has the meaning specified in Section
7(d)(iv).
"Rights Plan" has the meaning specified in Section 7(d)(iv).
"Securities" has the meaning specified in Section 7(d)(iv).
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Senior Stock" means each class of capital stock or series of
preferred stock of the Company established by the Board of Directors after the
Issue Date, the terms of which expressly provide that such class or series will
rank senior to the Preferred Stock as to dividend rights or rights upon the
liquidation, winding-up or dissolution of the Company. "Senior Stock" shall
include warrants, rights, calls, options and other securities exercisable or
exchangeable for, or convertible into, such capital stock or preferred stock of
the Company.
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of
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directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.
"Tender Expiration Time" has the meaning specified in Section
7(d)(vii).
"Tender Purchased Shares" has the meaning specified in Section
7(d)(vii).
"Trading Day" has the meaning specified in Section 7(i)(v).
"Transfer Agent" means American Stock Transfer & Trust Company
or such other agent or agents of the Company as may be designated by the Board
of Directors as the transfer agent for the Preferred Stock.
"Trigger Event" has the meaning specified in Section 7(d)(iv).
"Trustee" shall mean The Bank of New York and its successors
and any corporation resulting from or surviving any consolidation or merger to
which it or its successors may be a party and any successor trustee at the time
serving as successor trustee under the Indenture.
3. DIVIDENDS.
(a) Holders of the Preferred Stock are entitled to receive,
when, as and if declared by the Board of Directors, out of the funds of the
Company legally available therefor, cash dividends, in such coin or currency of
the United States of America as at the time of payment shall be legal tender for
the payment of public and private debts, at the annual rate of 6.0% of the
Liquidation Preference, payable in equal quarterly installments on March 31,
June 30, September 30, and December 31 of each year (each a "DIVIDEND PAYMENT
DATE"), commencing March 31, 2005 (and, in the case of any accrued but unpaid
dividends, at such additional times and for such interim periods, if any, as
determined by the Board of Directors). If any Dividend Payment Date shall be on
a day other than a Business Day, then the Dividend Payment Date shall be on the
next succeeding Business Day. Dividends on the Preferred Stock will be
cumulative from the Issue Date, whether or not in any Dividend Period or
Dividend Periods there shall be funds of the Company legally available for the
payment of such dividends and whether or not such dividends are declared, and
will be payable to holders of record as they appear on the stock books of the
Company at the close of business on March 11, June 10, September 10 and December
11 of each year or on a record date that may be fixed by the Board of Directors
and that will not be more than 60 days nor less than 10 days preceding the
Dividend Payment Date (each such date, a "DIVIDEND PAYMENT RECORD DATE").
Dividends on the Preferred Stock shall accrue (whether or not declared) on a
daily basis from the Issue Date, and accrued dividends for each Dividend Period
shall accumulate to the extent not paid on the Dividend Payment Date first
following the Dividend Period for which they accrue. As used herein, the term
"accrued" with respect to dividends includes both accrued and accumulated
dividends.
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(b) The amount of dividends payable per share for each full
Dividend Period for the Preferred Stock shall be computed by dividing the annual
dividend rate by four (rounded down to the nearest one one-hundredth (1/100) of
one cent). The amount of dividends payable for the initial Dividend Period on
the Preferred Stock, or any other period shorter or longer than a full Dividend
Period on the Preferred Stock, shall be computed on the basis of a 360-day year
consisting of twelve 30-day months. Holders of shares of Preferred Stock shall
not be entitled to any dividends, whether payable in cash, property or stock, in
excess of cumulative dividends, as herein provided. No interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on the Preferred Stock which may be in arrears.
(c) So long as any shares of Preferred Stock are outstanding,
no dividends, except as described in the next succeeding sentence, shall be
declared or paid or set apart for payment on any Parity Stock for any period
unless full cumulative dividends have been or contemporaneously are declared and
paid, or declared and a sum sufficient for the payment thereof set apart for
such payment, on the Preferred Stock through the then-most recent Dividend
Payment Date. When dividends are not paid in full or a sum sufficient for such
payment is not set apart, as aforesaid, upon the shares of Preferred Stock and
any Parity Stock, all dividends declared upon shares of Preferred Stock and all
dividends declared upon such Parity Stock shall be declared pro rata so that the
ratio of the amount of dividends declared per share on the Preferred Stock to
the amount of dividends declared per share on such Parity Stock shall in all
cases equal the ratio of the amount of accrued and unpaid dividends per share on
the shares of Preferred Stock to the amount of accrued and unpaid dividends per
share on the shares of such Parity Stock.
(d) So long as any shares of the Preferred Stock are
outstanding, no Parity Stock shall be redeemed, purchased or otherwise acquired
for any consideration (or any monies be paid to or made available for a sinking
fund or otherwise for the purchase or redemption of any shares of any such
Parity Stock) by the Company or any Subsidiary unless (i) the full cumulative
dividends accrued on all outstanding shares of Preferred Stock shall have been
paid or set apart for payment for all past Dividend Periods and (ii) sufficient
funds shall have been set apart for the payment of the dividend for the current
Dividend Period with respect to the Preferred Stock.
(e) So long as any shares of the Preferred Stock are
outstanding, no dividend (other than dividends or distributions paid in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
Common Stock or other Junior Stock) shall be declared or paid or set apart for
payment, and no other distribution shall be declared or made or set apart for
payment, in each case upon the Common Stock or any other Junior Stock, nor shall
any Common Stock nor any other Junior Stock be redeemed, purchased or otherwise
acquired for any consideration (or any monies be paid to or made available for a
sinking fund or otherwise for the purchase or redemption of any shares of Common
Stock or any other such Junior Stock) by the Company or any Subsidiary (except
(A) by conversion into or exchange for Common Stock or any other such Junior
Stock; or (B) repurchases of unvested shares of Common Stock or any other such
Junior Stock at cost upon termination of the employment or consultancy of the
holder thereof, provided such repurchases are approved by the Board of Directors
in good faith) unless, in each case (i) the full cumulative dividends accrued on
all outstanding shares of Preferred
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Stock and any Parity Stock shall have been paid or set apart for payment for all
past Dividend Periods and all past dividend periods with respect to such other
Parity Stock, (ii) sufficient funds shall have been set apart for the payment of
the dividend for the current Dividend Period with respect to the Preferred Stock
and for the current dividend period with respect to such other Parity Stock, and
(iii) such dividend, distribution, redemption, purchase or acquisition is not
declared, paid or made, or funds or other assets therefor set aside or made
available for payment or distribution (whether by way of a sinking fund or
otherwise), until December 31, 2007.
4. LIQUIDATION PREFERENCE.
(a) In the event of any voluntary or involuntary dissolution,
liquidation or winding up of the Company (for the purposes of this Section 4, a
"LIQUIDATION"), before any distribution of assets shall be made to the holders
of Common Stock or any other Junior Stock, the holder of each share of Preferred
Stock then outstanding shall be entitled to be paid, out of the assets of the
Company available for distribution to its stockholders, a liquidation preference
in an amount equal to $50 per share (the "LIQUIDATION PREFERENCE") plus all
dividends accrued and unpaid on such share through and including the date of
distribution of the assets of the Company to the holders of Preferred Stock, and
the holders of any Parity Stock shall be entitled to receive the full respective
liquidation preferences (including any premium) to which they are entitled and
shall receive all accrued and unpaid dividends with respect to their respective
shares through and including the date of distribution.
(b) If upon any Liquidation of the Company, the assets
available for distribution to the holders of Preferred Stock and any Parity
Stock which shall then be outstanding shall be insufficient to pay the holders
of all outstanding shares of Preferred Stock and such Parity Stock the full
amounts (including all dividends accrued and unpaid) of the liquidation
preferences to which they shall be entitled, then the holders of each series of
such stock will share ratably in any such distribution of assets, first in
proportion to their respective liquidation preferences until such preferences
are paid in full, and then in proportion to their respective amounts of accrued
and unpaid dividends. After payment of the liquidation preference and any
accrued and unpaid dividends, the holders of shares of the Preferred Stock will
not be entitled to any further participation in any distribution of assets by
the Company.
(c) For purposes of this Section 4, a Liquidation shall not
include (i) any consolidation or merger of the Company with or into any other
corporation, (ii) any liquidation, dissolution, winding up or reorganization of
the Company immediately followed by reincorporation or reorganization as another
corporation or other entity or (iii) a sale or other disposition of all or
substantially all of the Company's assets to another corporation unless in
connection therewith the Liquidation of the Company is specifically approved by
all requisite corporate action.
(d) The holder of any shares of Preferred Stock shall not be
entitled to receive any payment owed for such shares under this Section 4 until
such holder shall have effected book-entry transfer or physical delivery of
certificates representing its shares of Preferred Stock, together with any
necessary endorsements, to the Company or the Transfer
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Agent (as appropriate) free of any liens, security interests or other claims. No
interest shall accrue on any payment due upon Liquidation.
5. REDEMPTION AT THE OPTION OF THE COMPANY.
(a) Prior to December 31, 2006, Preferred Stock may not be
redeemed by the Company except pursuant to Section 5(b). On or after December
31, 2006, the Company, at its option, may redeem the shares of Preferred Stock,
in whole or in part, out of funds legally available therefor, at any time or
from time to time, subject to the notice provisions and provisions for partial
redemption described below, during the periods shown below, for cash at the
following redemption prices per share plus an amount equal to accrued and unpaid
dividends, if any, to (but excluding) the date fixed for redemption, whether or
not declared; provided that prior to December 31, 2007, Preferred Stock may not
be redeemed by the Company except pursuant to Section 5(b) unless the Closing
Price of Common Stock (or, if more than one class of Common Stock is then issued
and outstanding, all classes of Common Stock) has exceeded 150% of the
Conversion Price for at least 20 Trading Days during any period of 30
consecutive Trading Days ending within five Trading Days prior to the notice of
redemption.
REDEMPTION DATE REDEMPTION PRICE
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On or after December 31, 2006 and prior to
December 31, 2007 $52.50
On or after December 31, 2007 and prior to
December 31, 2008 $51.00
On or after December 31, 2008 $50.00
If the date fixed for redemption falls after a
Dividend Payment Record Date and on or before the corresponding Dividend Payment
Date, the payment of dividends becoming due on such Dividend Payment Date shall
be payable to the holders of shares of Preferred Stock to be redeemed who are
registered as such on the relevant Dividend Payment Record Date, subject to the
terms and provisions of Section 3, and the amount payable to holders of such
shares of Preferred Stock on the date fixed for redemption will not include any
amount in respect of dividends declared and payable on such Dividend Payment
Date.
No sinking fund, mandatory redemption, mandatory
retirement or other similar provision shall apply to the Preferred Stock.
(b) In the event of a Change in Control, the Company, at its
option, may redeem the shares of Preferred Stock, in whole but not in part, out
of funds legally available therefor, on a date which is not later than sixty
(60) days following the effective date of the event or circumstance resulting in
the Change in Control, subject to the notice provisions described below, for
cash at the following redemption prices per share plus an amount equal to
accrued and unpaid dividends, if any, to (but excluding) the date fixed for
redemption, whether or not declared:
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DATE OF CHANGE IN CONTROL REDEMPTION PRICE
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Prior to December 31, 2007 $52.50
On or after December 31, 2007 and prior to December 31,
2008 51.25
On or after December 31, 2008 50.00
If the date fixed for redemption falls after a
Dividend Payment Record Date and on or before the corresponding Dividend Payment
Date, the payment of dividends becoming due on such Dividend Payment Date shall
be payable to the holders of shares of Preferred Stock registered as such on the
relevant Dividend Payment Record Date, subject to the terms and provisions of
Section 3, and the amount payable to holders of such shares of Preferred Stock
on the date fixed for redemption will not include any amount in respect of
dividends declared and payable on such Dividend Payment Date.
(c) If the Company elects to exercise the right to redeem the
shares of Preferred Stock in whole or in part pursuant to Section 5(a), it shall
fix a date for redemption, and it, or at its request, the Transfer Agent, in the
name of and at the expense of the Company, shall mail or cause to be mailed a
notice of such redemption at least thirty (30) and not more than sixty (60) days
prior to the date fixed for redemption to the holders of shares of the Preferred
Stock to be redeemed at their last addresses as the same appear on the Company's
stock records and to the Beneficial Owners in accordance with the procedures
established by the Depositary and the Transfer Agent; provided that if the
Company shall give such notice, it shall also give such notice, and notice of
the shares of Preferred Stock to be redeemed, to the Transfer Agent. Such
mailing shall be by first class mail. The notice, if mailed in the manner herein
provided, shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. In any case, failure to give such notice by
mail or any defect in the notice to the holder of any share of Preferred Stock
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other share of Preferred Stock. Concurrently with the
mailing of any such notice of redemption, the Company shall (i) issue a press
release announcing such redemption, (ii) publish such information once in a
daily newspaper printed in the English language and of general circulation in
the Borough of Manhattan, City of New York, New York, and (iii) publish such
information on the Company's website; it being understood that the form and
content of such press release and such publications shall be determined by the
Company in its sole discretion. None of the failure to issue any such press
release nor make such publications nor any defect therein shall affect the
validity of the redemption notice or any of the proceedings for the redemption
of any share of Preferred Stock called for redemption.
(d) If the Company elects to exercise the right to redeem the
shares of Preferred Stock in whole pursuant to Section 5(b), it shall fix a date
for redemption, and it, or at its request, the Transfer Agent, in the name of
and at the expense of the Company, shall mail or cause to be mailed a notice of
such redemption on a date that shall be at least thirty (30) and not more than
sixty (60) days prior to the date fixed for redemption, which shall not be later
than sixty (60) days following the effective date of the event or circumstance
resulting in the Change in Control, to the holders of shares of the Preferred
Stock at their last addresses as the same
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appear on the Company's stock records and to the Beneficial Owners in accordance
with the procedures established by the Depositary and the Transfer Agent;
provided that if the Company shall give such notice, it shall also give such
notice to the Transfer Agent. Such mailing shall be by first class mail. The
notice, if mailed in the manner herein provided, shall be conclusively presumed
to have been duly given, whether or not the holder receives such notice. In any
case, failure to give such notice by mail or any defect in the notice to the
holder of any share of Preferred Stock shall not affect the validity of the
proceedings for the redemption of any other share of Preferred Stock. The notice
shall state that a Change in Control has occurred or may occur and shall
describe the event or circumstance which has resulted or may result in a Change
in Control, shall be accompanied by a copy of any press release or other public
announcement of the Change in Control event, and may state that the Company's
obligation to redeem the shares of Preferred Stock is subject to consummation of
the Change in Control event. Concurrently with the mailing of any such notice of
redemption, the Company shall (i) issue a press release announcing such
redemption, (ii) publish such information once in a daily newspaper printed in
the English language and of general circulation in the Borough of Manhattan,
City of New York, New York, and (iii) publish such information on the Company's
website; it being understood that the form and content of such press release and
such publications shall be determined by the Company in its sole discretion.
None of the failure to issue any such press release nor make such publications
nor any defect therein shall affect the validity of the redemption notice or any
of the proceedings for the redemption of any share of Preferred Stock called for
redemption.
(e) In addition to the information specified in Sections 5(c)
and 5(d), if applicable, each notice of redemption shall indicate that the
Company has exercised its right to redeem the outstanding shares of preferred
stock in respect of which notice is given and shall specify the number of shares
of Preferred Stock to be redeemed, the date fixed for redemption (which shall be
a Business Day), the redemption price at which such shares of Preferred Stock
are to be redeemed, the place or places of payment and that payment will be made
upon presentation and surrender of the certificate or certificates representing
such shares of Preferred Stock, including any procedures applicable to a
redemption to be accomplished through book-entry transfer and shall state that
accrued and unpaid dividends to (but excluding) the date fixed for redemption
will be paid as specified in said notice and that on and after said date
dividends thereon will cease to accrue. Such notice shall also state the current
Conversion Price and the date on which the right to convert such shares of
Preferred Stock into Common Stock will expire.
(f) If the Company gives notice of redemption as provided in
this Section 5, then the Company shall, on the date fixed for redemption, before
12:00 p.m., New York City time, to the extent funds are legally available, with
respect to: (i) shares of Preferred Stock held by the Depositary or its
nominees, deposit or cause to be deposited, irrevocably with the Transfer Agent
or the Depositary an amount of money sufficient to redeem on the date fixed for
redemption all the shares of Preferred Stock so called for redemption (other
than those theretofore surrendered for conversion into Common Stock) at the
applicable redemption price, together with accrued and unpaid dividends to (but
excluding) the date fixed for redemption and shall give the Transfer Agent or
the Depositary, as the case may be, irrevocable instructions and authority to
pay such amount to holders of such shares of Preferred Stock upon book-entry
transfer of such shares of Preferred Stock to the Transfer Agent's account at
the Depositary; and (ii) shares of Preferred Stock held in certificated form,
deposit or cause to be deposited,
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irrevocably with the Transfer Agent an amount of money sufficient to redeem on
the date fixed for redemption all the shares of Preferred Stock so called for
redemption (other than those theretofore surrendered for conversion into Common
Stock) at the applicable redemption price, together with accrued and unpaid
dividends to (but excluding) the date fixed for redemption and shall give the
Transfer Agent irrevocable instructions and authority to pay such amount to
holders of such shares of Preferred Stock upon surrender of the certificates
evidencing such shares of Preferred Stock.
(g) Payment of the redemption price for shares of the
Preferred Stock, together with accrued and unpaid dividends to (but excluding)
the date fixed for redemption, is conditioned upon book-entry transfer or
physical delivery of certificates representing shares of the Preferred Stock,
together with any necessary endorsements, to the Transfer Agent, or to the
Transfer Agent's account at the Depositary, at any time after delivery of the
notice of redemption. The Company shall be entitled to retain any interest,
yield or gain on funds deposited with the Transfer Agent and/or the Depositary
pursuant to this Section 5 in excess of the amounts required to pay the
redemption price, together with accrued and unpaid dividends to (but excluding)
the date fixed for redemption. Payment of the redemption price for the Preferred
Stock, together with accrued and unpaid dividends to (but excluding) the date
fixed for redemption will be made: (i) if book-entry transfer of or physical
delivery of the Preferred Stock has been made by or on the date fixed for
redemption, on the date fixed for redemption, or (ii) if book-entry transfer of
or physical delivery of the Preferred Stock has not been made by or on such
date, at the time of book-entry transfer of or physical delivery of the
Preferred Stock. If any shares of Preferred Stock called for redemption are
converted prior to the date fixed for redemption, any money deposited with the
Transfer Agent and/or the Depositary or segregated and held in trust for the
redemption of such shares of Preferred Stock shall be paid or delivered to the
Company upon its written request, or, if then held by the Company, shall be
discharged from such trust. If the conditions precedent to the disbursement of
any funds deposited by the Company pursuant to this Section 5 shall not have
been satisfied within two years after the establishment of such funds, then (i)
such funds shall be returned to the Company upon its request; (ii) the person
entitled to the payment for which such funds shall have been originally intended
shall have the right to look only to the Company for such payment, subject to
applicable abandoned property laws; and (iii) the Transfer Agent and/or the
Depositary which shall have held such funds shall be relieved of any
responsibility for such funds upon the return of such funds to the Company.
(h) If fewer than all the outstanding shares of Preferred
Stock are to be redeemed, shares to be redeemed shall be selected by the Company
from outstanding shares of Preferred Stock not previously called for redemption
by lot or pro rata (as near as may be) or by any other equitable method
determined by the Company in its sole discretion. If a portion of a holder's
shares of Preferred Stock are selected for redemption pursuant to subsection (a)
of this Section 5 and such holder elects to convert a portion of its shares of
Preferred Stock into Common Stock pursuant to Section 7 prior to the date fixed
for redemption, then such converted portion shall be deemed to be taken from the
portion selected for redemption.
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If fewer than all the shares of Preferred Stock
represented by a certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the holder thereof.
(i) If notice of redemption has been given as above provided,
and the Transfer Agent and the Depositary hold, in accordance with this Section
5, money sufficient to pay the redemption price of the shares of Preferred Stock
called for redemption together with accrued and unpaid dividends to (but
excluding) the date fixed for redemption, on and after the date fixed for
redemption (unless the Company shall default in the payment of the redemption
price, together with accrued and unpaid dividends to (but excluding) said date),
dividends on such shares of Preferred Stock called for redemption shall cease to
accrue and such shares of Preferred Stock shall be deemed no longer outstanding
and the holders thereof shall have no right in respect of such shares of
Preferred Stock except the right to receive the redemption price thereof and
accrued and unpaid dividends to (but excluding) the date fixed for redemption,
without interest thereon. On presentation and surrender of such shares of
Preferred Stock via book entry transfer or physical delivery, such shares of
Preferred Stock to be redeemed shall be redeemed by the Company at the
applicable redemption price, together with payment of accrued and unpaid
dividends to (but excluding) the date fixed for redemption.
(j) If the Company shall default in the payment of the
redemption price, together with accrued and unpaid dividends to (but excluding)
the date fixed for redemption, of any shares of Preferred Stock called for
redemption, upon surrender thereof for redemption, dividends shall continue to
accrue from the date fixed for redemption and such shares of Preferred Stock
shall remain outstanding and remain convertible into Common Stock until the
Company pays the redemption price, together with accrued and unpaid dividends to
(but excluding) the date of such payment.
6. REQUIRED PURCHASE AT OPTION OF HOLDER ON CHANGE IN CONTROL.
(a) If there shall occur a Change in Control and the Company
does not elect to exercise the right to redeem shares of Preferred Stock in
whole pursuant to Section 5(b), shares of Preferred Stock shall be purchased by
the Company, out of funds legally available therefor, at the option of the
holders thereof as of the date (the "CHANGE IN CONTROL PURCHASE DATE") specified
by the Company that is 45 calendar days (or if such day is not a Business Day,
then the next succeeding Business Day) after the Company, or at its request, the
Transfer Agent, has mailed written notice of such Change in Control to holders
of the Preferred Stock as set forth below, subject to satisfaction by or on
behalf of any holder of the requirements set forth below, for cash at a purchase
price per share equal to 100% of the Liquidation Preference per share plus an
amount equal to accrued and unpaid dividends, if any, to (but excluding) the
Change in Control Purchase Date, whether or not declared.
(b) Within 30 days after the effective date of the event or
circumstance resulting in a Change in Control, the Company, or at its request
the Transfer Agent, in the name of and at the expense of the Company, shall mail
a written notice of the Change in Control to the holders of shares of Preferred
Stock at their last addresses as the same appear on the Company's stock records
and to the Beneficial Owners in accordance with the procedures established by
the
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Depositary and the Transfer Agent, as of the date of the Change in Control;
provided that if the Company shall give such notice, it shall also give such
notice to the Transfer Agent. Such mailing shall be by first class mail. The
notice, if mailed in the manner herein provided, shall be conclusively presumed
to have been duly given, whether or not the holder receives such notice. In any
case, failure to give such notice by mail or any defect in the notice to the
holder of any share of Preferred Stock shall not affect the validity of the
proceedings for the purchase of any other share of Preferred Stock. Concurrently
with the mailing of any such notice of Change in Control, the Company shall (i)
issue a press release announcing the Change in Control, (ii) publish such
information once in a daily newspaper printed in the English language and of
general circulation in the Borough of Manhattan, City of New York, New York, and
(iii) publish such information on the Company's website; it being understood
that the form and content of such press release and such publications shall be
determined by the Company in its sole discretion. None of the failure to issue
any such press release nor make such publications nor any defect therein shall
affect the validity of the Change in Control notice or any of the proceedings
for the purchase of any share of Preferred Stock. The notice shall include the
form of a Change in Control Purchase Notice to be completed by the holder and a
copy of any press release or other public announcement of the Change in Control
event, and shall state:
(i) that a Change in Control has occurred or may occur
(including a description of the event or circumstance which has or may result in
a Change in Control), and that, as a result, the holders of shares of Preferred
Stock have certain purchase rights;
(ii) the Change in Control Purchase Date;
(iii) the date by which the Change in Control Purchase
Notice pursuant to this Section 6 must be given;
(iv) the purchase price that will be payable with
respect to the shares of Preferred Stock as of the Change in Control Purchase
Date,
(v) that, on the Change in Control Purchase Date, if the
Change in Control Purchase Notice is timely given, the purchase price of the
Preferred Stock subject to such Change in Control Purchase Notice, together with
accrued and unpaid dividends, if any, to (but excluding) the Change in Control
Purchase Date, will become due and payable and dividends on such shares of
Preferred Stock shall cease to accrue;
(vi) the name and address of the Transfer Agent;
(vii) the Conversion Price then in effect;
(viii) that shares of Preferred Stock as to which a
Change in Control Purchase Notice has been given may be converted into Common
Stock only to the extent that the Change in Control Purchase Notice has been
withdrawn in accordance with the terms of this Section 6;
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(ix) the procedures that the holder of Preferred Stock
must follow to exercise its rights under this Section 6;
(x) the procedures for withdrawing a Change in Control
Purchase Notice, including a form of notice of withdrawal; and
(xi) that the Company's obligation to purchase the
shares of the Preferred Stock may be subject to the consummation of the Change
in Control event.
If any of the Preferred Stock is in the form of a
Global Certificate, then the Company shall modify such notice to the extent
necessary to accord with the procedures of the Depositary and the Transfer Agent
applicable to the purchase of shares represented by the Global Certificate.
(c) A holder of shares of Preferred Stock may exercise its
rights pursuant to this Section 6 upon delivery of a written notice (which shall
be in substantially the form set forth in Section 15(c) which may be delivered
by letter, overnight courier, hand delivery, facsimile transmission or in any
other written form and, in the case of shares represented by a Global
Certificate, may be delivered electronically or by other means in accordance
with the Depositary's applicable procedures) of the exercise of such rights (a
"CHANGE IN CONTROL PURCHASE NOTICE") to the Transfer Agent at any time prior to
the close of business on the Business Day immediately before the Change in
Control Purchase Date. Payment of the purchase price for shares of the Preferred
Stock, together with accrued and unpaid dividends to (but excluding) the Change
in Control Purchase Date, is conditioned upon (i) timely delivery of a completed
Change in Control Purchase Notice and (ii) book-entry transfer or physical
delivery of certificates representing the shares of Preferred Stock, together
with any necessary endorsements, to the Transfer Agent, or to the Transfer
Agent's account at the Depositary, at any time after timely delivery of the
Change in Control Purchase Notice. If a holder timely delivers its Change in
Control Purchase Notice, payment of the purchase price for the Preferred Stock,
together with accrued and unpaid dividends to (but excluding) the Change in
Control Purchase Date, will be made: (i) if book-entry transfer of or physical
delivery of the Preferred Stock has been made by or on the Change in Control
Purchase Date, on the Change in Control Purchase Date, or (ii) if book-entry
transfer of or physical delivery of the Preferred Stock has not been made by or
on such date, at the time of book-entry transfer of or physical delivery of the
Preferred Stock.
(d) Notwithstanding anything herein to the contrary, any
holder of Preferred Stock delivering to the Transfer Agent the Change in Control
Purchase Notice shall have the right to withdraw such Change in Control Purchase
Notice in whole or in part (provided such part is a share of Preferred Stock or
an integral multiple thereof) at any time prior to the close of business on the
Business Day immediately before the Change in Control Purchase Date (unless the
Company shall default in the payment of the purchase price, together with
accrued and unpaid dividends to (but excluding) the Change in Control Purchase
Date, in which case, such withdrawal shall be permitted until the Company pays
the purchase price, together with accrued and unpaid dividends to (but
excluding) the date of such payment) by delivery of a
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written notice of withdrawal to the Transfer Agent in accordance with the
provisions of this Section 6 specifying:
(i) the number of shares of Preferred Stock, in whole
shares, with respect to which such notice of withdrawal is being submitted;
(ii) if certificated shares of Preferred Stock have been
issued, the certificate numbers for such shares in respect of which such notice
of withdrawal is being submitted, or if such shares are in the form of a Global
Certificate, such information as is required by the Depositary; and
(iii) the number of shares of Preferred Stock, if any,
that remain subject to the original Change in Control Purchase Notice and have
been or will be delivered for purchase by the Company.
The Transfer Agent shall promptly notify the
Company of the receipt by it of any Change in Control Purchase Notice or written
withdrawal thereof. The Transfer Agent will promptly return to the respective
holders thereof any shares of Preferred Stock with respect to which a Change in
Control Purchase Notice has been withdrawn in compliance with this Section 6, in
which case, upon such return, the Change in Control Purchase Notice with respect
thereto shall be deemed to have been withdrawn. Any money deposited with the
Transfer Agent or the Depositary or segregated and held in trust for the
purchase of shares of Preferred Stock as to which a Change in Control Purchase
Notice has been withdrawn in compliance with this Section 6 shall be paid or
delivered to the Company upon its written request.
(e) Anything herein to the contrary notwithstanding, in the
case of shares of Preferred Stock held pursuant to a Global Certificate, any
Change in Control Purchase Notice may be delivered or withdrawn and the shares
of Preferred Stock in respect of such Global Certificate may be delivered for
purchase or withdrawn in accordance with the applicable procedures of the
Depositary as in effect from time to time.
(f) The Company shall, on the Change in Control Purchase Date,
before 12:00 p.m., New York City time, to the extent funds are legally
available, with respect to: (i) all shares of Preferred Stock which are to be
purchased pursuant to this Section 6 and are held by the Depositary or its
nominees, deposit or cause to be deposited, irrevocably with the Transfer Agent
or the Depositary an amount of money sufficient to pay the aggregate purchase
price of all shares of Preferred Stock which are to be purchased pursuant to
this Section 6 plus an amount equal to the accrued and unpaid dividends, if any,
to (but excluding) the Change in Control Purchase Date, and shall give the
Transfer Agent or the Depositary, as the case may be, irrevocable instructions
and authority to pay such amount to holders of such shares of Preferred Stock
upon book-entry transfer of such shares of Preferred Stock to the Transfer
Agent's account at the Depositary; and (ii) all shares of Preferred Stock which
are to be purchased pursuant to this Section 6 and are held in certificated
form, deposit or cause to be deposited, irrevocably with the Transfer Agent an
amount of money sufficient to pay the aggregate purchase price of all shares of
Preferred Stock which are to be purchased pursuant to this Section 6 plus an
amount equal to
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the accrued and unpaid dividends, if any, to (but excluding) the Change in
Control Purchase Date, and shall give the Transfer Agent irrevocable
instructions and authority to pay such amount to holders of such shares of
Preferred Stock upon surrender of the certificates evidencing such shares of
Preferred Stock. The Company shall be entitled to retain any interest, yield or
gain on funds deposited with the Transfer Agent and/or the Depositary pursuant
to this Section 6 in excess of the amounts required to pay the purchase price,
together with accrued and unpaid dividends to (but excluding) the Change in
Control Purchase Date. If the conditions precedent to the disbursement of any
funds deposited by the Company pursuant to this Section 6 shall not have been
satisfied within two years after the establishment of such funds, then (i) such
funds shall be returned to the Company upon its request; (ii) the person
entitled to the payment for which such funds shall have been originally intended
shall have the right to look only to the Company for such payment, subject to
applicable abandoned property laws; and (iii) the Transfer Agent and/or the
Depositary which shall have held such funds shall be relieved of any
responsibility for such funds upon the return of such funds to the Company.
(g) If a Change in Control Purchase Notice has been given as
provided above and has not been withdrawn pursuant to Section 6(d), and the
Transfer Agent and the Depositary hold, in accordance with this Section 6, money
sufficient to pay the purchase price of the shares of Preferred Stock to be
purchased together with accrued and unpaid dividends to (but excluding) the
Change in Control Purchase Date, on and after the Change in Control Purchase
Date (unless the Company shall default in the payment of the purchase price,
together with accrued and unpaid dividends to (but excluding) the Change in
Control Purchase Date), dividends on such shares of Preferred Stock shall cease
to accrue and such shares of Preferred Stock shall be deemed no longer
outstanding and the holders thereof shall have no right in respect of such
shares of Preferred Stock except the right to receive the purchase price thereof
and accrued and unpaid dividends to (but excluding) the Change in Control
Purchase Date, without interest thereon. Shares of Preferred Stock in respect of
which a Change in Control Purchase Notice has been given by the holder thereof
may not be converted into shares of Common Stock on or after the date of the
delivery of such Change in Control Purchase Notice unless such Change in Control
Purchase Notice has first been validly withdrawn as specified in this Section 6.
If the Change in Control Purchase Date falls after a Dividend Payment Record
Date and before the corresponding Dividend Payment Date, holders of the shares
of Preferred Stock at the close of business on that Dividend Payment Record Date
shall be entitled to receive the full dividend payable on those shares on the
corresponding Dividend Payment Date, and the amount payable to holders of such
shares of Preferred Stock on the Change in Control Purchase Date will not
include any amount in respect of dividends declared and payable on such
corresponding Dividend Payment Date.
(h) If fewer than all the shares of Preferred Stock
represented by any certificate are purchased, a new certificate shall be issued
representing the unpurchased shares without cost to the holder thereof.
(i) The Company shall comply with any applicable provisions of
Rule 13e-4 and any other tender offer rules under the Exchange Act (including,
without limitation, a filing on Schedule TO or other schedule) to the extent
then applicable in connection with the purchase rights of the holders of the
Preferred Stock pursuant to this Section 6.
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(j) To the extent the Company has insufficient funds to
purchase all shares of Preferred Stock for which the Transfer Agent has received
a Change in Control Purchase Notice that has not subsequently been withdrawn,
the shares to be purchased shall be selected by the Company from the shares of
Preferred Stock for which the Transfer Agent has received a Change in Control
Purchase Notice that has not subsequently been withdrawn by lot or pro rata (as
near as may be) or by any other equitable method determined by the Company in
its sole discretion.
(k) The Company shall not be required to purchase any shares
of Preferred Stock upon the occurrence of a Change in Control if a third party
makes an offer to purchase the Preferred Stock in the manner, for the amount, at
the times and otherwise in compliance with the requirements described in this
Section 6 and purchases all shares of Preferred Stock for which the Transfer
Agent has received a Change in Control Purchase Notice that has not subsequently
been withdrawn.
(l) If the Company shall default in the payment of the
purchase price, together with accrued and unpaid dividends to (but excluding)
the Change in Control Purchase Date, of any shares of Preferred Stock tendered
for purchase, upon surrender thereof for purchase, dividends shall continue to
accrue from the Change in Control Purchase Date, such shares of Preferred Stock
shall remain outstanding and the Change in Control Purchase Notice in respect of
such shares shall remain subject to withdrawal until the Company pays the
purchase price, together with accrued and unpaid dividends to (but excluding)
the date of such payment.
7. CONVERSION. Holders of shares of Preferred Stock shall have the
right to convert all or a portion of such shares into shares of Common Stock, as
follows:
(a) Subject to and upon compliance with the provisions of this
Section 7, a holder of shares of Preferred Stock shall have the right, at the
holder's option, at any time after the Issue Date (except that, with respect to
shares of Preferred Stock which shall be called for redemption pursuant to
Section 5, such right shall terminate at the close of business on the Business
Day immediately preceding the date fixed for redemption of such shares of
Preferred Stock unless the Company shall default in payment of the amount due
upon redemption thereof, in which case such right shall terminate upon payment
of the amount due upon such redemption) to convert any of such shares into that
number of fully paid and non-assessable shares of Common Stock (as such shares
shall then be constituted) obtained by dividing $50 by the Conversion Price, as
adjusted in accordance with this Section 7, by surrender of the shares of
Preferred Stock so to be converted in the manner provided in Section 7(b). As
used herein, the initial "CONVERSION PRICE" shall mean $20 per share. A holder
of the Preferred Stock is not entitled to any rights of a holder of Common Stock
until such holder has converted his, her or its Preferred Stock to Common Stock,
and only to the extent such Preferred Stock is deemed to have been converted to
Common Stock under this Section 7.
(b) In order to exercise the conversion right, if the shares
of Preferred Stock are held in certificated form, the holder of the Preferred
Stock to be converted shall surrender the certificate or certificates (with a
Conversion Notice, a form of which is set forth in
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Section 15(a), duly completed) representing the number of shares to be so
converted, duly endorsed, at the office or an agency of the Transfer Agent, and
shall give written notice of conversion to the office or agency of the Transfer
Agent that the holder elects to convert such number of shares of Preferred Stock
specified in said notice. Such notice shall also state the name or names (with
addresses) in which the certificate or certificates for shares of Common Stock
which shall be issuable on such conversion shall be issued, and shall be
accompanied by payment of any transfer taxes required pursuant to Section 7(f).
Each such share of Preferred Stock surrendered for conversion shall, unless the
shares of Common Stock issuable on conversion are to be issued in the same name
in which such share of Preferred Stock is registered, be duly endorsed by, or be
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder or his, her or its duly authorized attorney. In order to
exercise the conversion right, if the shares of Preferred Stock are represented
by a Global Certificate, the holder of the Preferred Stock to be converted shall
comply with the procedures established by the Depositary for conversion.
As promptly as practicable after satisfaction of the
requirements for conversion set forth above, the Company shall issue and shall
deliver to such holder or, if shares of Common Stock issuable on conversion are
to be issued in a name other than that in which such shares of Preferred Stock
to be converted are registered (as if such transfer were a transfer of the share
of Preferred Stock so converted), to such other person, at the office or an
agency of the Transfer Agent, the certificate or certificates representing the
number of shares of Common Stock issuable upon the conversion of such shares of
Preferred Stock in accordance with the provisions of this Section 7, and a check
or cash in respect of any fractional share of Common Stock arising upon such
conversion, as provided in Section 7(c) (which payment, if any, shall be paid no
later than five Business Days after satisfaction of the requirements for
conversion set forth above).
Each conversion pursuant to Section 7(a) shall be deemed
to have been effected on the date on which the requirements set forth above in
this Section 7(b) or the requirements of the Depositary, as the case may be,
have been satisfied as to such shares of Preferred Stock so converted, and the
person in whose name any certificate or certificates for the shares of Common
Stock is issuable upon such conversion shall be deemed to have become on said
date the holder of record of the shares represented thereby; provided, however,
that if any such surrender occurs on any date when the stock transfer books of
the Company are closed, the conversion shall be effected on the next succeeding
day on which such stock transfer books are open, and the person in whose name
the certificates are to be issued shall be the record holder thereof on such
date for all purposes, but such conversion shall be at the Conversion Price in
effect on the date upon which certificate or certificates representing such
shares of Preferred Stock shall be surrendered.
In the case of any share of Preferred Stock which is
converted after any Dividend Payment Record Date and prior to the close of
business on the Business Day immediately preceding the corresponding Dividend
Payment Date, the dividend due on such Dividend Payment Date shall be payable on
such Dividend Payment Date to the holder of record of such share as of such
Dividend Payment Record Date notwithstanding such conversion; provided that
shares of Preferred Stock surrendered for conversion during the period between
the
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close of business on any Dividend Payment Record Date and prior to the close of
business on the Business Day immediately preceding the corresponding Dividend
Payment Date must (except in the case of shares of Preferred Stock which have
been called for redemption and a notice of redemption has been sent to the
holders of Preferred Stock pursuant to Section 5) be accompanied by payment of
an amount equal to the dividend payable on such Dividend Payment Date on the
shares of Preferred Stock being surrendered for conversion. The Transfer Agent
shall not be required to accept for conversion any shares of Preferred Stock not
accompanied by any payment required by the preceding sentence. Except as
provided in this paragraph, no payment or adjustment shall be made upon any
conversion on account of any dividends accrued on shares of Preferred Stock
surrendered for conversion or on account of any dividends on the Common Stock
issued upon conversion.
(c) In connection with the conversion of any shares of
Preferred Stock pursuant to Section 7(a), all or a portion of such holder's
shares, in whole shares, may be converted; however, no fractional shares of
Common Stock or scrip representing fractional shares shall be issued upon
conversion of the Preferred Stock. If any fractional share of Common Stock
otherwise would be issuable upon the conversion of the Preferred Stock, the
Company shall make a payment therefor in cash to the holder of the Preferred
Stock based on the then-current market value of a whole share of Common Stock.
For purposes of this Section 7(c), the then-current market value of a whole
share of Common Stock shall be the Closing Price of the Common Stock on the
first Trading Day immediately preceding the day on which the Preferred Stock is
deemed to have been converted and such Closing Price of the Common Stock shall
be determined as provided in Section 7(i)(i). If more than one share shall be
surrendered for conversion at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on the
basis of the aggregate number of shares of Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to time
by the Company as follows:
(i) In the event the Company shall hereafter pay a
dividend in shares of Common Stock or make a distribution in shares of Common
Stock to all holders of Common Stock, the Conversion Price in effect at the
opening of business on the Business Day immediately following the Record Date
fixed for the determination of stockholders entitled to receive such dividend or
other distribution shall be reduced by multiplying such Conversion Price by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such Record Date and the denominator
shall be the sum of such number of shares of Common Stock and the total number
of shares of Common Stock constituting such dividend or other distribution. If
any dividend or distribution of the type described in this Section 7(d)(i) is
declared but not so paid or made, the Conversion Price shall again be adjusted
to the Conversion Price which would have been in effect if such dividend or
distribution had not been declared.
(ii) In the event the Company shall issue rights or
warrants to all holders of its outstanding shares of Common Stock entitling them
(for a period expiring within forty-five (45) days after the Record Date fixed
for the determination of stockholders
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entitled to receive such rights or warrants) to subscribe for or purchase shares
of Common Stock at a price per share less than the Current Market Price of the
Common Stock on the Record Date fixed for the determination of stockholders
entitled to receive such rights or warrants, the Conversion Price shall be
reduced so that the Conversion Price shall equal the price determined by
multiplying the Conversion Price in effect at the opening of business on the
Business Day immediately following such Record Date by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the close
of business on such Record Date plus the number of shares of Common Stock which
the aggregate subscription, purchase or exercise price of the shares of Common
Stock called for by all such issued rights or warrants would purchase at such
Current Market Price, and of which the denominator shall be the number of shares
of Common Stock outstanding at the close of business on such Record Date plus
the total number of additional shares of Common Stock so offered for
subscription or purchase. Such adjustment shall become effective at the opening
of business on the Business Day immediately following the Record Date fixed for
determination of stockholders entitled to receive such rights or warrants. To
the extent that shares of Common Stock are not delivered pursuant to such rights
or warrants, upon the expiration or termination of such rights or warrants, the
Conversion Price shall be readjusted to the Conversion Price which would have
been in effect had the adjustments made upon the issuance of such rights or
warrants been made on the basis of only the number of shares of Common Stock
actually delivered upon the issuance of such rights or warrants. In the event
that such rights or warrants are not so issued, the Conversion Price shall again
be adjusted to be the Conversion Price which would have been in effect if the
Record Date fixed for the determination of stockholders entitled to receive such
rights or warrants had not been fixed. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase shares of Common Stock
at less than the Current Market Price, and in determining the aggregate
subscription, purchase or exercise price of such shares of Common Stock, there
shall be taken into account any consideration received for such rights or
warrants, the value of such consideration, if other than cash, to be determined
by the Board of Directors in its sole discretion.
(iii) In the event the outstanding shares of Common
Stock shall be subdivided into a greater number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the Business Day
immediately following the day upon which such subdivision becomes effective
shall be proportionately reduced, and conversely, in the event the outstanding
shares of Common Stock shall be combined into a smaller number of shares of
Common Stock, the Conversion Price in effect at the opening of business on the
Business Day immediately following the day upon which such combination becomes
effective shall be proportionately increased.
(iv) In the event the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock shares of any class of
capital stock of the Company (other than any dividends or distributions to which
Section 7(d)(i) applies) or evidences of its indebtedness, cash or other assets
(including securities, but excluding (1) any rights or warrants referred to in
Section 7(d)(ii) or (2) dividends and distributions paid exclusively in cash
(such shares of capital stock, evidences of indebtedness, cash or other assets
hereinafter in this Section 7(d)(iv) referred to as the "SECURITIES")), then, in
each such case, the Conversion Price shall be reduced so that the Conversion
Price shall be equal to the price determined by multiplying the
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Conversion Price in effect immediately prior to the close of business on the
Record Date with respect to such distribution by a fraction of which the
numerator shall be the Current Market Price on such Record Date less the fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution) on such Record Date of the
portion of the Securities so distributed applicable to one share of Common Stock
and the denominator shall be such Current Market Price, such reduction to become
effective at the opening of business on the Business Day immediately following
such Record Date; provided, however, that in the event the then fair market
value (as so determined by the Board of Directors) of the portion of the
Securities so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each holder of
the Preferred Stock shall have the right to receive upon conversion of a share
of the Preferred Stock the amount of Securities such holder would have received
had such holder converted such share of Preferred Stock immediately prior to
such Record Date. In the event that such distribution is not so paid or made,
the Conversion Price shall again be adjusted to be the Conversion Price which
would have been in effect if such distribution had not been declared. If the
Board of Directors determines the fair market value of any distribution for
purposes of this Section 7(d)(iv) by reference to the trading market for any
securities comprising all or part of such distribution, it must in doing so
consider the prices in such market over the same period (the "REFERENCE PERIOD")
used in computing the Current Market Price pursuant to Section 7(i)(ii) to the
extent possible, unless the Board of Directors in a Board Resolution determines
in good faith that determining the fair market value during the Reference Period
would not be in the best interest of the holders of the Preferred Stock.
For purposes of this Section 7(d)(iv) and Sections
7(d)(i) and (ii), any dividend or distribution to which this Section 7(d)(iv) is
applicable that also includes shares of Common Stock to which Section 7(d)(i)
applies, or rights or warrants to subscribe for or purchase shares of Common
Stock to which Section 7(d)(ii) applies (or both), shall be deemed instead to be
(1) a dividend or distribution of the evidences of indebtedness, assets, shares
of capital stock, rights or warrants other than such shares of Common Stock to
which Section 7(d)(i) applies or rights or warrants to which Section 7(d)(ii)
applies (and any Conversion Price reduction required by this Section 7(d)(iv)
with respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (and any further Conversion Price reduction required by
Sections 7(d)(i) and (ii) with respect to such dividend or distribution shall
then be made) except (A) the Record Date of such dividend or distribution shall
be substituted as "the Record Date fixed for the determination of stockholders
entitled to receive such dividend or other distribution" and "Record Date"
within the meaning of Section 7(d)(i) and as "the Record Date fixed for the
determination of the stockholders entitled to receive such rights or warrants"
and "Record Date" within the meaning of Section 7(d)(ii), and (B) any shares of
Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on such Record Date" within the meaning of
Section 7(d)(i).
In the event that the Company implements a
stockholders' rights plan (a "NEW RIGHTS PLAN") or amends any then-existing
stockholders' rights plan (as amended, an "AMENDED RIGHTS PLAN" and together
with any New Rights Plan, a "RIGHTS
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PLAN"), such Rights Plan shall provide that upon conversion of the Preferred
Stock the holders will receive, in addition to the Common Stock issuable upon
such conversion, the rights under such Rights Plan (notwithstanding the
occurrence of an event causing such rights to separate from the Common Stock at
or prior to the time of conversion), unless prior to conversion of the Preferred
Stock the rights have expired, terminated or been redeemed. Any distribution of
rights or warrants pursuant to the Rights Plan complying with the requirements
set forth in the immediately preceding sentence of this paragraph shall not
constitute a distribution of rights or warrants for purposes of this Section
7(d). Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("TRIGGER EVENT") (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 7(d)(iv) (and no adjustment to the Conversion Price
under this Section 7(d)(iv) will be required) until the occurrence of the
earliest Trigger Event. If such right or warrant is subject to subsequent
events, upon the occurrence of which such right or warrant shall become
exercisable to purchase different securities, evidences of indebtedness or other
assets or entitle the holder to purchase a different number or amount of the
foregoing or to purchase any of the foregoing at a different purchase price,
then the occurrence of each such event shall be deemed, for purposes of this
Section 7(d)(iv), to be the date of issuance and record date with respect to a
new right or warrant (and a termination or expiration of the existing right or
warrant without exercise by the holder thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or the
occurrence of any Trigger Event or other event (of the type described in the
preceding sentence) with respect thereto, that resulted in an adjustment to the
Conversion Price under this Section 7(d)(iv), (1) in the case of any such rights
or warrants which shall all have been redeemed or repurchased without exercise
by any holders thereof, the Conversion Price shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger Event,
as the case may be, as though it were a cash distribution equal to the per share
redemption or repurchase price received by a holder of Common Stock with respect
to such rights or warrants (assuming such holder had retained such rights or
warrants) made to all holders of Common Stock as of the date of such redemption
or repurchase, and (2) in the case of such rights or warrants all of which shall
have expired or been terminated without exercise, the Conversion Price shall be
readjusted as if such rights and warrants had never been issued.
(v) In the event the Company shall, by dividend or
otherwise, make a distribution to all holders of its Common Stock consisting
exclusively of cash (excluding any dividend or distribution made in connection
with the liquidation, dissolution or winding up of the Company and excluding any
cash that is distributed upon a merger or consolidation to which Section 7(e)
applies or as part of a distribution referred to in Section 7(d)(iv)) in an
amount that when combined with all other distributions of cash to holders of its
Common Stock (excluding any dividend or distribution made in connection with the
liquidation, dissolution or winding up of the Company and excluding any cash
that is distributed upon a merger or consolidation to which Section 7(e) applies
or as part of a distribution referred to in Section 7(d)(iv)) in such calendar
year exceeds on a per-share basis the greater of $0.50 per share or three
percent (3%) of the Current Market Price on the date prior to the date of the
declaration of
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such distribution, then, immediately after the close of business on the Record
Date with respect to such distribution, the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the close of business on such Record Date
by a fraction (i) the numerator of which shall be equal to the Current Market
Price on the Record Date less an amount equal to the quotient of (x) the
aggregate amount of such distribution and (y) the number of shares of Common
Stock outstanding on the Record Date and (ii) the denominator of which shall be
equal to the Current Market Price on such Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would have been in effect if
such dividend or distribution had not been declared.
(vi) In the event a tender offer made by the Company or
any Subsidiary for all or any portion of the Common Stock shall expire and such
tender offer (as amended upon the expiration thereof) shall require the payment
to stockholders of consideration (based on the acceptance (up to any maximum
specified in the terms of the tender offer) of Purchased Shares (as defined
below)) per share of Common Stock having a fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and described in
a Board Resolution) that, as of the date upon which occurred the last time
tenders could have been made pursuant to such tender offer (the "EXPIRATION
TIME"), exceeds the Closing Price of a share of Common Stock on the Trading Day
next succeeding the Expiration Time then, immediately prior to the opening of
business on the Business Day immediately following the Expiration Time, the
Conversion Price shall be reduced so that the Conversion Price shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the close of business on the date of the Expiration Time by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time multiplied by the
Current Market Price on the Trading Day next succeeding the Expiration Time and
the denominator shall be the sum of (x) the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and described in
a Board Resolution) of the aggregate consideration payable to stockholders based
on the acceptance (up to any maximum specified in the terms of the tender offer)
of all shares validly tendered and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
"PURCHASED SHARES") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) at the Expiration Time and the Current
Market Price on the Trading Day next succeeding the Expiration Time, such
reduction (if any) to become effective at the opening of business on the
Business Day immediately following the Expiration Time. In the event that the
Company is obligated to purchase shares pursuant to any such tender offer, but
the Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would have been in effect if such
tender offer had not been made. If the application of this Section 7(d)(vi) to
any tender offer would result in an increase in the Conversion Price, no
adjustment shall be made for such tender offer under this Section 7(d)(vi).
(vii) In the event of a tender or exchange offer made by
a person other than the Company or any Subsidiary for an amount of Common Stock
which increases the offeror's ownership of Common Stock to more than 25% of the
Common Stock outstanding and
-24-
shall involve the payment by such person of consideration per share of Common
Stock having a fair market value (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a Board Resolution) at the
last time (the "TENDER EXPIRATION TIME") tenders or exchanges may be made
pursuant to such tender or exchange offer (as amended) that exceeds the Current
Market Price on the Trading Day next succeeding the Tender Expiration Time, and
with respect to which, as of the Tender Expiration Time, the Board of Directors
is not recommending rejection of the offer, the Conversion Price shall be
reduced so that the Conversion Price shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the Tender
Expiration Time by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged shares)
as of the Tender Expiration Time multiplied by the Current Market Price on the
Trading Day next succeeding the Tender Expiration Time and the denominator shall
be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Tender
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "TENDER PURCHASED SHARES") and (y) the product of the number
of shares of Common Stock outstanding (less any Tender Purchased Shares) on the
Tender Expiration Time and the Current Market Price on the Trading Day next
succeeding the Tender Expiration Time, such reduction to become effective at the
opening of business on the Business Day immediately following the Tender
Expiration Time. In the event that such person is obligated to purchase shares
pursuant to any such tender or exchange offer, but such person is permanently
prevented by applicable law from effecting any such purchases or all such
purchases are rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would have been in effect if such tender or exchange
offer had not been made. Notwithstanding the foregoing, the adjustment described
in this Section 7(d)(vii) shall not be made if, as of the Tender Expiration
Time, the offering documents with respect to such tender offer or exchange offer
disclose a plan or intention to cause the Company to consolidate with or merge
with or into another person (whether or not affiliated with the Company) or
permit any other person (whether or not affiliated with the Company) to
consolidate with or merge with or into the Company (or enter into or permit
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties), or enter into any sale, lease,
conveyance or transfer of all or substantially all of the assets of the Company
(computed on a consolidated basis), whether in a single transaction or a series
of related transactions, to another person or group of affiliated persons
(whether or not affiliated with the Company) and either: (i) in the case of a
consolidation or merger, the Company is the resulting or surviving entity and
each share of Preferred Stock shall remain outstanding and unaffected; or (ii)
the resulting, surviving or transferee entity is a corporation organized under
the laws of the United States, any state thereof or the District of Columbia and
the Preferred Stock shall be converted into or exchanged for convertible
exchangeable preferred stock of the corporation formed by such consolidation, or
into which the Company shall have been merged, or of the corporation which shall
have acquired or leased all or substantially all of the assets of the Company
having powers, preferences and relative, participating, optional and other
rights and qualifications, limitations and restrictions substantially similar to
(but no less favorable than) the powers, preferences and relative,
participating, optional and other rights and qualifications, limitations and
restrictions of a share of the Preferred Stock as set forth in this Certificate
of Designations.
-25-
(viii) The Company may make such reductions in the
Conversion Price, in addition to those required by Sections 7(d)(i), (ii),
(iii), (iv), (v), (vi), and (vii), as the Board of Directors considers to be
advisable to avoid or diminish any income tax to holders of Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
(ix) To the extent permitted by applicable law, the
Company from time to time may reduce the Conversion Price by any amount for any
period of time if the period is at least twenty (20) Business Days, the
reduction is irrevocable during the period and the Board of Directors shall have
made a determination that such reduction is in the best interests of the
Company, which determination shall be conclusive and described in a Board
Resolution. Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to each holder of the Preferred Stock at his,
her or its last address appearing on the Company's stock records a notice of the
reduction at least fifteen (15) days prior to the date the reduced Conversion
Price takes effect, and such notice shall state the reduced Conversion Price and
the period during which it will be in effect.
No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% in such price; provided, however, that any adjustments which by reason
of this Section 7(d)(ix) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under
Section 7 shall be made by the Company and shall be rounded to the nearest cent.
No adjustment need be made for a change in the par value of the Common Stock or
a change from par value to no par value or from no par value to par value.
(x) Whenever the Conversion Price is adjusted as herein
provided, the Company shall promptly file with the Transfer Agent an Officers'
Certificate setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment. Promptly after
delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Price setting forth the adjusted Conversion Price
and the date on which such adjustment becomes or became effective and shall mail
such notice of such adjustment of the Conversion Price to each holder of the
Preferred Stock at his, her or its last address appearing on the Company's stock
records, within twenty (20) days of the effective date of such adjustment.
Failure to deliver such notice shall not affect the legality or validity of any
such adjustment.
(xi) In any case in which this Section 7(d) provides
that an adjustment shall become effective immediately after a Record Date for an
event, the Company may defer until the occurrence of such event (i) issuing to
the holder of any share of Preferred Stock converted after such Record Date and
before the occurrence of such event the additional shares of Common Stock
issuable upon such conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon conversion before giving effect to
such adjustment and (ii) paying to such holder of Preferred Stock any amount in
cash in lieu of any fractional shares of Common Stock pursuant to Section 7(c).
-26-
(xii) For purposes of this Section 7(d), the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company, unless a dividend or distribution that requires an
adjustment to the Conversion Price pursuant to this Section 7 is paid or made
with respect to such treasury shares, but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock.
(e) If any of the following events occur, namely (i) any
reclassification or change of the outstanding shares of Common Stock (other than
a subdivision or combination to which Section 7(d)(iii) applies or a change in
par value), (ii) any consolidation, merger or combination of the Company with
another person as a result of which holders of Common Stock shall be entitled to
receive stock, other securities or other property or assets (including cash)
with respect to or in exchange for such Common Stock, or (iii) any sale or
conveyance of all or substantially all of the assets of the Company to any other
person as a result of which holders of Common Stock shall be entitled to receive
stock, other securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock, then each share of Preferred
Stock shall be convertible into the kind and amount of shares of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
by a holder of the number of shares of Common Stock issuable upon conversion of
such Preferred Stock (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock are available to convert all such Preferred
Stock) immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance assuming such holder of Common Stock did
not exercise his rights of election, if any, as to the kind or amount of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance (provided that, if the kind or amount of stock, other securities or
other property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance is not the same
for each share of Common Stock in respect of which such rights of election shall
not have been exercised ("NON-ELECTING SHARE"), then for the purposes of this
Section 7(e) the kind and amount of stock, other securities or other property or
assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance for each Non-Electing
Share shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-Electing Shares). If this Section 7(e) applies to any event
or occurrence, Section 7(d) shall not apply. The Company shall not be a party to
any event or occurrence to which this Section 7(e) applies unless the terms of
such event or occurrence are consistent with this Section 7(e). The above
provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
(f) The issuance of stock certificates representing the shares
of Common Stock issuable upon conversion of the Preferred Stock shall be made
without charge to the holders of such shares for any issuance tax in respect
thereof imposed by the government of the United States or any political
subdivision thereof or other cost incurred by the Company in connection with
such conversion and/or the issuance of such shares. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of Common Stock in any name other
than the name in which the shares of
-27-
Preferred Stock with respect to which such shares of Common Stock are issued are
registered, and the Company shall not be required to issue or deliver any such
stock certificate unless and until the person or persons requesting the issue
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
(g) All shares of Common Stock which may be delivered upon
conversion of shares of Preferred Stock will upon delivery be duly and validly
issued and fully paid and non-assessable, free of all liens and charges and not
subject to any preemptive rights.
The Company will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Common Stock or its issued shares of Common Stock held in
its treasury, or both, a sufficient number of shares of Common Stock for the
purpose of effecting conversions of shares of Preferred Stock not theretofore
converted into Common Stock. For purposes of this reservation of Common Stock,
the number of shares of Common Stock which shall be deliverable upon the
conversion of all outstanding shares of Preferred Stock shall be computed as if
at the time of computation all outstanding shares of Preferred Stock were held
by a single holder. The issuance of shares of Common Stock upon conversion of
shares of Preferred Stock is authorized in all respects.
The Company shall from time to time, in accordance with
the laws of the State of Delaware, use its best efforts to increase the
authorized number of shares of Common Stock if at any time the number of shares
of authorized and unissued Common Stock shall not be sufficient to permit the
conversion of all of the then outstanding shares of Preferred Stock.
Before taking any action which would cause an adjustment
reducing the Conversion Price below the then par value, if any, of the shares of
Common Stock issuable upon conversion of the Preferred Stock, the Company will
take all corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue shares of such Common
Stock at such adjusted Conversion Price.
If any shares of Common Stock to be provided for the
purpose of conversion of the Preferred Stock hereunder require registration with
or approval of any governmental authority under any Federal or state law before
such shares may be validly issued upon conversion, the Company will, in good
faith and as expeditiously as possible, endeavor to secure such registration or
approval, as the case may be.
If at any time the Common Stock shall be listed on the
Nasdaq National Market or any national securities exchange or automated
quotation system, the Company will, if permitted by the rules of such exchange
or automated quotation system, list and keep listed, so long as the Common Stock
shall be so listed on such exchange or automated quotation system, all Common
Stock issuable upon conversion of the Preferred Stock.
-28-
(h) In the event:
(i) the Company shall declare a dividend (or any other
distribution) on its Common Stock; or
(ii) the Company shall authorize the granting to the
holders of its Common Stock of rights or warrants to subscribe for or purchase
any share of any class of the Company's capital stock or any other rights or
warrants; or
(iii) of any reclassification of the Common Stock (other
than a subdivision or combination of its outstanding Common Stock, or a change
in par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company; or
(iv) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
the Company shall cause to be filed with the Transfer Agent and to be
mailed to each holder of the Preferred Stock at his, her or its address
appearing on the Company's stock records, as promptly as possible but in any
event at least fifteen (15) days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or grant of rights or warrants, or,
if a record is not to be taken, the date as of which the holders of Common Stock
of record to be entitled to such dividend, distribution or grant is to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective or occur, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
(i) The following definitions shall apply to terms used in
this Section 7 and elsewhere in this Certificate of Designations:
(i) "CLOSING PRICE" with respect to any securities on
any day shall mean the closing sale price regular way on such day or, in case no
sale of such securities takes place on such day, the average of the reported
closing bid and asked prices, regular way, in each case on the Nasdaq National
Market or New York Stock Exchange, as applicable, or, if such security is not
listed or admitted to trading on such Nasdaq National Market or New York Stock
Exchange, on the principal national security exchange, trading market or
quotation system on which such security is quoted or listed or admitted to
trading, or, if not quoted or listed or admitted to trading on any national
securities exchange, trading market or quotation system, the average of the
closing bid and asked prices of such security on the over-the-counter market on
such day as reported by the National Quotation Bureau Incorporated, or a similar
generally
-29-
accepted reporting service, or if not so available, in such manner as furnished
by any New York Stock Exchange member firm selected from time to time by the
Board of Directors for that purpose, or a price determined in good faith by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution.
(ii) "CURRENT MARKET PRICE" shall mean, subject to the
second paragraph hereof, the lesser of (a) the Closing Price per share of Common
Stock on the date in question and (b) the average of the daily Closing Prices
per share of Common Stock for the ten (10) consecutive Trading Days immediately
prior to the date in question; provided, however, that (1) if the "ex" date (as
hereinafter defined) for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the Conversion Price
pursuant to Section 7(d)(i), (ii), (iii), (iv), (v), (vi), or (vii) occurs
during such ten (10) consecutive Trading Days, the Closing Price per share of
Common Stock for each Trading Day prior to the "ex" date for such other event
shall be adjusted by multiplying such Closing Price per share of Common Stock by
the same fraction by which the Conversion Price is so required to be adjusted as
a result of such other event, (2) if the "ex" date for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the Conversion Price pursuant to Section 7(d)(i), (ii), (iii), (iv), (v),
(vi), or (vii) occurs on or after the "ex" date for the issuance or distribution
requiring such computation and prior to the day in question, the Closing Price
per share of Common Stock for each Trading Day on and after the "ex" date for
such other event shall be adjusted by multiplying such Closing Price per share
of Common Stock by the reciprocal of the fraction by which the Conversion Price
is so required to be adjusted as a result of such other event, and (3) if the
"ex" date for the issuance or distribution requiring such computation is prior
to the day in question, after taking into account any adjustment required
pursuant to clause (1) or (2) of this proviso, the Closing Price per share of
Common Stock for each Trading Day on or after such "ex" date shall be adjusted
by adding thereto the amount of any cash and the fair market value (as
determined by the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 7(d)(iv), (vi) or (vii)
whose determination shall be conclusive and described in a Board Resolution) of
the evidences of indebtedness, shares of capital stock or assets being
distributed applicable to one share of Common Stock as of the close of business
on the day before such "ex" date.
For purposes of any computation under
Sections 7(d)(vi) or (vii), the Current Market Price on any date shall be deemed
to be the average of the daily Closing Prices per share of Common Stock for such
day and the next two succeeding Trading Days; provided, however, that if the
"ex" date for any event (other than the tender offer requiring such computation)
that requires an adjustment to the Conversion Price pursuant to Section 7(d)(i),
(ii), (iii), (iv), (v), (vi), or (vii) occurs on or after the Expiration Time or
the Tender Expiration Time, as the case may be, for the tender or exchange offer
requiring such computation and prior to the day in question, the Closing Price
per share of Common Stock for each Trading Day on and after the "ex" date for
such other event shall be adjusted by multiplying such Closing Price per share
of Common Stock by the reciprocal of the fraction by which the Conversion Price
is so required to be adjusted as a result of such other event. For purposes of
this paragraph, the term "ex" date, (1) when used with respect to any issuance
or distribution, means the first date on which the Common Stock trades regular
way on the relevant exchange or in the relevant market from which the Closing
Price per share of Common Stock was obtained
-30-
without the right to receive such issuance or distribution, (2) when used with
respect to any subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades regular way on such exchange or in
such market after the time at which such subdivision or combination becomes
effective, and (3) when used with respect to any tender or exchange offer means
the first date on which the Common Stock trades regular way on such exchange or
in such market after the Expiration Time or Tender Expiration Time, as the case
may be, of such offer. Notwithstanding the foregoing, whenever successive
adjustments to the Conversion Price are called for pursuant to Section 7(d),
such adjustments shall be made to the Current Market Price as may be necessary
or appropriate to effectuate the intent of Section 7(d) and to avoid unjust or
inequitable results as determined in good faith by the Board of Directors.
(iii) "FAIR MARKET VALUE" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length transaction.
(iv) "RECORD DATE" shall mean, with respect to any
dividend, distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other property, the date
fixed for determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).
(v) "TRADING DAY" shall mean (x) if the applicable
security is quoted on the Nasdaq National Market, a day on which trades may be
made thereon or (y) if the applicable security is listed or admitted for trading
on the New York Stock Exchange or another national securities exchange or
securities trading market, a day on which the New York Stock Exchange or such
other national securities exchange or securities trading market is open for
business or (z) if the applicable security is not so listed, admitted for
trading or quoted, any Business Day.
8. RANKING. The Preferred Stock shall, with respect to dividend
rights and rights upon the liquidation, winding-up or dissolution of the
Company, rank (a) senior to all Junior Stock, (b) on parity with all Parity
Stock and (c) junior to all Senior Stock.
9. VOTING RIGHTS.
(a) The holders of the Preferred Stock will not have any
voting rights except as set forth below or as otherwise from time to time
required by law. In connection with any right to vote, each holder of the
Preferred Stock will have one vote for each share of Preferred Stock held. Any
shares of Preferred Stock held by the Company or any entity controlled by the
Company shall not have voting rights hereunder and shall not be counted in
determining the presence of a quorum.
(b) Whenever dividends on the Preferred Stock or on any Parity
Stock shall be in arrears in an aggregate amount equal to at least six quarterly
dividends (whether or not consecutive), (i) the number of members of the Board
of Directors shall be increased by two,
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effective as of the time of election of such directors as hereinafter provided
and (ii) the holders of the Preferred Stock (voting separately as a class with
the holders of any Parity Stock on which like voting rights have been conferred
and are exercisable) will have the exclusive right to vote for and elect such
two additional directors of the Company at any meeting of stockholders of the
Company at which directors are to be elected held during the period such
dividends remain in arrears. The right of the holders of the Preferred Stock to
vote for such two additional directors shall terminate when all accrued and
unpaid dividends on the Preferred Stock and all other affected classes or series
of Parity Stock have been declared and paid or set apart for payment. The
holders of the Preferred Stock and the holders of any Parity Stock on which like
voting rights have been conferred and are exercisable, voting separately as a
class, shall have the right to remove without cause at any time and replace any
directors which such holders shall have elected pursuant to this Section 9. If
the office of any director elected by the holders of Preferred Stock and the
holders of any Parity Stock on which like voting rights have been conferred and
are exercisable, voting separately as a class, becomes vacant by reason of
death, resignation, retirement, disqualification, removal from office or
otherwise, the remaining director elected by the holders of Preferred Stock and
the holders of any Parity Stock on which like voting rights have been conferred
and are exercisable, voting separately as a class, may choose a successor who
shall hold office for the unexpired term in respect of which such vacancy
occurred. The term of office of all directors so elected shall terminate
immediately upon the termination of the right of the holders of the Preferred
Stock and the holders of any Parity Stock on which like voting rights have been
conferred and are exercisable to vote for such directors, and the number of
directors of the Board of Directors shall immediately thereafter be reduced by
two. The Board of Directors shall determine, when and if required, to which
class of directors such directors appointed by the holders of the Preferred
Stock and the holders of any Parity Stock having like voting rights shall be
appointed under the Certificate of Incorporation; provided, however, that if
applicable, the term of such directors shall terminate earlier than the
expiration of the terms provided for the applicable class or classes of
directors if the right of the holders of Preferred Stock and the holders of any
Parity Stock having like voting rights to appoint directors under this Section 9
terminates as provided herein.
The foregoing right of the holders of the Preferred
Stock with respect to the election of two directors may be exercised at any
annual meeting of stockholders or at any special meeting of stockholders held
for such purpose. If the right to elect directors shall have accrued to the
holders of the Preferred Stock more than ninety (90) days preceding the date
established for the next annual meeting of stockholders, the President of the
Company shall, within twenty (20) days after the delivery to the Company at its
principal office of a written request for a special meeting signed by the
holders of at least 10% of all outstanding shares of Preferred Stock, call a
special meeting of the holders of the Preferred Stock to be held within sixty
(60) days after the delivery of such request for the purpose of electing such
additional directors.
(c) So long as the Preferred Stock is outstanding, the Company
shall not, without the affirmative vote or consent of the holders of at least 66
2/3 percent (unless a higher percentage shall then be required by applicable
law) of all outstanding shares of Preferred Stock and any Parity Stock on which
like voting rights have been conferred and are exercisable, voting together as a
separate class, (i) amend, alter or repeal any provision of the Certificate of
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Incorporation (including, without limitation, this Certificate of Designations)
or the By-laws of the Company so as to affect adversely the relative rights,
preferences, qualifications, limitations or restrictions of the Preferred Stock,
or (ii) create, authorize or issue, or reclassify any authorized capital stock
of the Company into, or increase the authorized amount of, any Senior Stock. In
addition, so long as the Preferred Stock is outstanding, the Company shall not,
without the affirmative vote or consent of the holders of at least 66 2/3
percent (unless a higher percentage shall then be required by applicable law) of
all outstanding shares of Preferred Stock and any Parity Stock on which like
voting rights have been conferred and are exercisable, voting together as a
separate class, enter into a share exchange pursuant to which the Preferred
Stock would be exchanged for any other securities (except an exchange pursuant
to Section 10) or consolidate with or merge with or into another person (whether
or not affiliated with the Company) or permit any other person (whether or not
affiliated with the Company) to consolidate with or merge with or into the
Company, or enter into any sale, lease, conveyance or transfer of all or
substantially all of the assets of the Company (computed on a consolidated
basis), whether in a single transaction or a series of related transactions, to
another person or group of affiliated persons (whether or not affiliated with
the Company) unless either: (A) in the case of a consolidation or merger, the
Company is the resulting or surviving entity and each share of Preferred Stock
shall remain outstanding and unaffected; or (B) the resulting, surviving or
transferee entity is a corporation organized under the laws of the United
States, any state thereof or the District of Columbia and the Preferred Stock
shall be converted into or exchanged for convertible exchangeable preferred
stock of the corporation formed by such consolidation, or into which the Company
shall have been merged, or of the corporation which shall have acquired or
leased all or substantially all of the assets of the Company having powers,
preferences and relative, participating, optional and other rights and
qualifications, limitations and restrictions substantially similar to (but no
less favorable than) the powers, preferences and relative, participating,
optional and other rights and qualifications, limitations and restrictions of a
share of the Preferred Stock as set forth in this Certificate of Designations. A
class vote of the holders of the Preferred Stock shall not be required (except
as otherwise required by law or Board Resolution) in connection with (1) the
authorization, issuance or increase in the authorized amount of any shares of
Junior Stock or Parity Stock, when and if issued, including Common Stock; or (2)
the authorization, issuance or increase in the amount of any bonds, mortgages,
notes, debentures or other obligations of the Company (other than those that may
be covered by clause (ii) of the first sentence of this paragraph).
The holders of Preferred Stock shall also be entitled to
vote on certain amendments or supplements to the Indenture establishing the
Notes, for which the Preferred Stock may be exchanged, as described in Section
10 hereof, and provided in Section 11.2 of the Indenture.
10. EXCHANGE.
(a) The Preferred Stock shall be exchangeable, in whole but
not in part, at the option of the Company on any Dividend Payment Date beginning
March 31, 2006 but prior to December 31, 2014, for the Notes at the rate of $50
principal amount of Notes for each share of Preferred Stock outstanding at the
time of exchange. On the Exchange Date (as defined below), (i) the rights of
holders of the Preferred Stock, as such, will terminate, and (ii) shares of
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the Preferred Stock will be deemed to be no longer outstanding and will only
represent the right to receive the Notes and payment of accrued and unpaid
dividends, if any, to (but excluding) the Exchange Date (except in the event of
a default by the Company or the Trustee in the delivery of the Notes or the
failure to satisfy the conditions for exchange set forth in this Section 10),
whether or not declared. The Notes will be issuable in denominations of $50 and
integral multiples thereof. If the exchange results in an amount of Notes that
is not an integral multiple of $50, the amount in excess of the closest integral
multiple of $50 will be paid in cash by the Company.
(b) In the event the Company shall elect to exercise the right
to exchange the shares of Preferred Stock for the Notes pursuant to this Section
10, it shall fix a date for exchange which shall be a Dividend Payment Date (the
"EXCHANGE DATE"), and it, or at its request, the Transfer Agent, in the name of
and at the expense of the Company, shall mail or cause to be mailed a notice of
such exchange at least thirty (30) and not more than sixty (60) days prior to
the Exchange Date to the Trustee and the holders of the shares of Preferred
Stock so to be exchanged at their last addresses as the same appear on the
Company's stock records and to the Beneficial Owners in accordance with the
procedures established by the Depositary and the Transfer Agent; provided that
if the Company shall give such notice, it shall also give such notice to the
Transfer Agent. Such mailing shall be by first class mail. If mailed in the
manner herein provided, the exchange notice shall be conclusively presumed to
have been duly given, whether or not the Trustee or the holders receive such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the holder of any share of Preferred Stock shall not affect the
validity of the proceedings for the exchange of any other share of Preferred
Stock. The Company will cause the Notes to be delivered to the Trustee in
preparation for the exchange no later than five Business Days prior to the
Exchange Date. Concurrently with the mailing of any such notice of exchange, the
Company shall: (i) issue a press release announcing such exchange; (ii) publish
such information once in a daily newspaper printed in the English language and
of general circulation in the Borough of Manhattan, City of New York, New York;
and (iii) publish such information on the Company's website; it being understood
that the form and content of such press release and such publications shall be
determined by the Company in its sole discretion. None of the failure to issue
any such press release nor make such publications nor any defect therein shall
affect the validity of the exchange notice or any of the proceedings for the
exchange of any share of Preferred Stock.
(c) Each such notice of exchange shall state: (i) the
Company's election to exercise the right to exchange the shares of Preferred
Stock for the Notes; (ii) a description of the Notes and the amount of Notes to
be delivered in respect of the Preferred Stock, the place or places where
certificates for shares of Preferred Stock are to be surrendered for exchange,
including any procedures applicable to an exchange to be accomplished through
book-entry transfers; (iii) the Exchange Date; and (iv) that dividends on the
shares of Preferred Stock to be exchanged shall cease to accrue on the Exchange
Date whether or not shares of Preferred Stock are surrendered for exchange on
such Exchange Date via physical delivery or book-entry transfer, unless the
Company or the Trustee shall default in the delivery of the Notes or the
conditions for exchange set forth in this Section 10 have not been satisfied as
of the Exchange Date, in which case dividends shall continue to accrue until the
Company or the Trustee delivers the Notes or satisfies such conditions for
exchange, as the case may be, in either
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case accompanied by delivery of accrued and unpaid dividends to (but excluding)
the date of delivery of the Notes or the satisfaction of such conditions for
exchange, as the case may be.
(d) If the Company exercises the right to exchange the shares
of Preferred Stock for the Notes pursuant to this Section 10, delivery of the
Notes together with accrued and unpaid dividends to (but excluding) the Exchange
Date to the holders of the Preferred Stock to be exchanged is conditioned upon
book-entry transfer or physical delivery of certificates representing the
Preferred Stock, together with any necessary endorsements, to the Trustee at any
time after delivery of the notice of the exchange. Delivery of the Notes will be
made: (i) if book-entry transfer of or physical delivery of the Preferred Stock
has been made by or on the Exchange Date, on the Exchange Date, or (ii) if
book-entry transfer of or physical delivery of the Preferred Stock has not been
made by or on such date, at the time of book-entry transfer of or physical
delivery of the Preferred Stock, in either case, via book-entry transfer or
physical delivery, as the case may be.
(e) If notice of exchange has been given as above provided,
and the Trustee holds, in accordance with this Section 10, authenticated Notes
in respect of the Preferred Stock to be exchanged together with money sufficient
to pay accrued and unpaid dividends to (but excluding) the Exchange Date, and
the Company has complied with the other provisions of this Section 10, on and
after the Exchange Date: (i) the Company shall be the owner and record holder of
such Preferred Stock; (ii) the holders of such Preferred Stock shall have no
further rights with respect to the Preferred Stock other than the right to
receive the Notes together with accrued and unpaid dividends to (but excluding)
the Exchange Date without interest thereon, upon book-entry transfer or physical
delivery of the Preferred Stock; (iii) dividends on the Preferred Stock to be
exchanged will cease to accrue on the Exchange Date whether or not certificates
for shares of Preferred Stock are surrendered for exchange on the Exchange Date;
and (iv) the Depositary or its nominee, as the record holder of any Preferred
Stock represented by one or more Global Certificates, will exchange the Global
Certificate or Global Certificates representing the Preferred Stock for a global
certificate or certificates representing the Notes to be delivered upon such
exchange. In the event that the Company or the Trustee shall default in the
delivery of the Notes together with accrued and unpaid dividends to (but
excluding) the Exchange Date, or the conditions for exchange set forth in this
Section 10 have not been satisfied as of the Exchange Date, dividends on the
Preferred Stock will continue to accrue from the Exchange Date, the Preferred
Stock shall remain outstanding and remain convertible into Common Stock until
the Company delivers the Notes together with accrued and unpaid dividends to
(but excluding) the date of such payment and, if applicable, the satisfaction of
such conditions.
(f) Notwithstanding the foregoing, if notice of exchange has
been given pursuant to this Section 10 and any holder of shares of Preferred
Stock shall, prior to the close of business on the Exchange Date, give written
notice to the Company pursuant to Section 7 of the conversion of any or all of
the shares held by the holder (with book-entry transfer of or physical delivery
of the Preferred Stock duly endorsed or assigned to the Company), then the
exchange shall not become effective as to the shares to be converted and the
conversion shall become effective as provided in Section 7.
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(g) Notwithstanding the other provisions of this Section 10,
if on the Exchange Date (i) the Company has not paid all accrued dividends on
the Preferred Stock (or set aside a sum therefor); (ii) the Notes shall not be
listed or approved for listing upon issuance on the Nasdaq National Market, the
Nasdaq SmallCap Market, the New York Stock Exchange, the American Stock Exchange
or another similar national securities exchange or securities trading market; or
(iii) the exchange shall result in an Event of Default (as defined in the
Indenture) under the Indenture or an Event of Default under the Indenture shall
have occurred and be continuing, the Company may not exchange the Preferred
Stock for the Notes and any notice previously given pursuant to this Section 10
shall be of no effect. If the conditions to exercising the right to exchange the
shares of Preferred Stock for the Notes pursuant to this Section 10 have not
been satisfied as of the Exchange Date, the Company will be prohibited from
making the exchange and the exchange will not be consummated. In such case, the
Company will (i) issue a press release indicating that such conditions have not
been satisfied and that the exchange will not be consummated, and (ii) publish
such information on the Company's website on the World Wide Web. Thereafter, the
Company again will have the right to exercise the exchange right in accordance
with the provisions of this Section 10.
(h) Prior to the Exchange Date, the Company will comply with
any applicable securities and blue sky laws with respect to the exchange of the
Preferred Stock for the Notes.
(i) Dividends with respect to the shares of Preferred Stock to
be exchanged which are due on the Dividend Payment Date which is the Exchange
Date shall be payable to the holders of such shares of Preferred Stock
registered as such on the relevant Dividend Payment Record Date subject to the
terms and provisions of Section 3 and the amount payable to holders of such
shares of Preferred Stock on the Exchange Date will not include any amount in
respect of dividends declared and payable on such Dividend Payment Date.
11. RECORD HOLDERS. The Company and the Transfer Agent may deem and
treat the record holder of any shares of Preferred Stock as the true and lawful
owner thereof for all purposes and neither the Company nor the Transfer Agent
shall be affected by any notice to the contrary.
12. SHARES TO BE RETIRED. Any share of Preferred Stock converted,
redeemed, purchased or otherwise acquired by the Company shall be retired and
canceled and shall upon cancellation be restored to the status of authorized but
unissued shares of preferred stock, subject to reissuance by the Board of
Directors as shares of preferred stock of one or more series.
13. NOTICE. Except as may otherwise be provided for herein, all
notices referred to herein shall be in writing, and all notices hereunder shall
be deemed to have been given upon receipt, in the case of a Change in Control
Purchase Notice as contemplated in Section 6(c) or Conversion Notice as
contemplated in Section 7(b) hereof, or, in all other cases, upon the earlier of
receipt of such notice or three Business Days after the mailing of such notice
if sent by registered mail (unless first-class mail shall be specifically
permitted for such notice under the terms of this Certificate of Designations)
with postage prepaid, addressed, if to the
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Company, to its offices at 650 Poydras Street, New Orleans, Louisiana 70130, or
to an agent of the Company designated as permitted by this certificate, or, if
to any holder of the Preferred Stock, to such holder at the address of such
holder of the Preferred Stock as listed in the Company's stock records or to
such other address as the Company or holder, as the case may be, shall have
designated by notice similarly given.
14. FORM OF CERTIFICATES; TRANSFER.
(a) For so long as the shares of Preferred Stock are eligible
for book-entry settlement with the Depositary or as book-entry settlement may be
required by law, all shares of Preferred Stock that are so eligible shall be
represented by one or more Preferred Stock certificates in global form (each, a
"GLOBAL CERTIFICATE" and together, the "GLOBAL CERTIFICATES") registered in the
name of the Depositary or the nominee of the Depositary, except as otherwise
specified below. The transfer, conversion, redemption, purchase and exchange of
beneficial interests in the Global Certificate shall be effected through the
Depositary in accordance with this Certificate of Designations and the
procedures of the Depositary therefor.
Transfers of interests in a Global Certificate will be
made in accordance with the standing instructions and procedures of the
Depositary and its participants. The Transfer Agent shall make appropriate
endorsements to reflect increases or decreases in the Global Certificate as set
forth on the face of the Global Certificate to reflect any such transfers.
Except as provided below, Beneficial Owners of an
interest in a Global Certificate shall not be entitled to have certificates
registered in their names, will not receive or be entitled to receive physical
delivery of certificates in definitive form and will not be considered holders
of such Global Certificates.
No definitive Preferred Stock certificate, or portion
thereof, in respect of which the Company or an Affiliate of the Company holds a
beneficial interest shall be included in a Global Certificate. The Transfer
Agent shall issue Preferred Stock certificates in definitive form upon any
transfer of a beneficial interest in any Global Certificate to the Company or
any Affiliate of the Company.
(b) Any Global Certificate may be endorsed with or have
incorporated in the text thereof such legends or recitals or changes not
inconsistent with the provisions of this Certificate of Designations as may be
required by the Transfer Agent, the Depositary, a nominee of the Depositary, by
the New York Stock Exchange or by the National Association of Securities
Dealers, Inc. in order to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities exchange upon
which the shares of Preferred Stock may be listed or traded or to conform with
any usage with respect thereto, or to indicate any special limitations or
restrictions to which any particular shares of Preferred Stock are subject.
(c) Notwithstanding any other provisions of this Certificate
of Designations (other than the provisions set forth in this Section 14(c)), a
Global Certificate may not be transferred in whole except (i) by the Depositary
to a nominee of the Depositary, (ii) by a nominee of the Depositary to the
Depositary, another nominee of the Depositary or to a
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successor Depositary or (iii) by such a successor Depositary to a nominee of
such successor Depositary.
The Depositary shall be a clearing agency registered
under the Exchange Act. The Company initially appoints The Depository Trust
Company to act as Depositary with respect to the Global Certificates. Initially,
the Global Certificate shall be issued to the Depositary, registered in the name
of Cede & Co., as the nominee of the Depositary, and deposited with a custodian
for Cede & Co.
If at any time (i) the Depositary for a Global
Certificate notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Certificate and a successor Depositary for such
Global Certificate is not appointed by the Company within 90 days after the
Company receives such notice; (ii) the Depositary for a Global Certificate
ceases to be a "clearing agency" registered under the Exchange Act and a
successor Depositary for such Global Certificate is not appointed by the Company
within 90 days; or (iii) the Company decides to discontinue the use of
book-entry transfer through the Depositary or any successor Depositary, the
Company shall execute, and shall cause the Transfer Agent to authenticate and
deliver, Preferred Stock in certificated form, in an aggregate principal amount
equal to the principal amount of the Global Certificate, in exchange for such
Global Certificate.
Preferred Stock in definitive form issued in exchange
for all or a part of a Global Certificate pursuant to this Section 14 shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Transfer Agent. Upon execution and authentication, the
Transfer Agent shall deliver such Preferred Stock in certificated form to the
persons in whose names such Preferred Stock in definitive form are so
registered.
At such time as all interests in a Global Certificate
have been redeemed, converted, exchanged, purchased or canceled for Preferred
Stock in definitive form, or transferred to a transferee who receives Preferred
Stock in definitive form, such Global Certificate shall be, upon receipt
thereof, canceled by the Transfer Agent in accordance with standing procedures
and instructions existing between the Transfer Agent and Depositary. At any time
prior to such cancellation, if any interest in a Global Certificate is exchanged
for Preferred Stock in certificated form, redeemed, converted, exchanged,
repurchased by the Company or canceled, or transferred for part of a Global
Certificate, the principal amount of such Global Certificate shall, in
accordance with the standing procedures and instructions existing between the
Transfer Agent and the Depositary, be reduced or increased, as the case may be,
and an endorsement shall be made on such Global Certificate, by the Transfer
Agent to reflect such reduction or increase.
(d) Any Preferred Stock, or Common Stock issued upon the
conversion of Preferred Stock, that is purchased or owned by the Company or any
Affiliate thereof, may not be resold by the Company or such Affiliate unless
registered under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Preferred Stock or Common Stock, as the case may be, no longer being
"restricted securities" (as defined under Rule 144 under the
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Securities Act). Any such Preferred Stock or Common Stock issued in definitive
form to the Company or any Affiliate thereof shall be endorsed with or have
incorporated in the text thereof such legends or recitals as necessary to set
forth the foregoing restrictions.
15. FORM OF NOTICE OF CONVERSION; FORM OF ASSIGNMENT; FORM OF CHANGE
IN CONTROL PURCHASE NOTICE.
(a) The following is a form of Conversion Notice to be set
forth on the reverse of any Preferred Stock certificate:
FORM OF CONVERSION NOTICE
CONVERSION NOTICE
To: _____________________________
The undersigned registered owner of 6.0% Convertible Exchangeable
Preferred Stock, $1.00 par value per share (the "PREFERRED STOCK"), of
International Shipholding Corporation, a Delaware corporation (the "COMPANY"),
hereby irrevocably exercises the option to convert the Preferred Stock, or the
portion hereof below designated, into shares of Common Stock of the Company in
accordance with the terms of the Certificate of Designations, dated January 5,
2005, governing the Preferred Stock, and directs that the shares issuable and
deliverable upon such conversion and any check in payment for fractional shares
and any Preferred Stock representing any unconverted amount of shares hereof, be
issued and delivered to the registered holder hereof unless a different name has
been indicated below. If shares or any portion of the Preferred Stock not
converted are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Dated: __________________
__________________________________
__________________________________
Signature(s)
Signature(s) must be guaranteed by
an eligible guarantor institution (banks,
stock brokers, savings and loan
associations and credit unions) with
membership in an approved signature
guarantee medallion program pursuant to
Securities and Exchange Commission Rule
17AD-15 if shares of Common Stock are to
be issued or Preferred Stock to be
delivered other than to and in the
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name of the registered holder of the Preferred Stock.
Signature Guarantee
NOTICE: The signature on the conversion notice must correspond with the
name as written upon the face of the Preferred Stock certificate in every
particular without alteration or enlargement or any change whatever.
Fill in for registration of shares
if to be issued, and Preferred
Stock if to be delivered, other
than to and in the name of the
registered holder of the Preferred
Stock:
________________________________
(Name)
________________________________
(Street Address)
________________________________
(City, State and Zip Code)
Please print name and address
Number of shares to be covered (if
less
than all):_____________________
________________________________
Taxpayer
Social Security or Other
Identification
Number:________________________
(b) The following is the form of Assignment to be set forth on
the reverse of the Preferred Stock certificate:
FORM OF ASSIGNMENT
For value received_________hereby sell(s), assign(s) and transfer(s)
unto_________ (Please insert social security or Taxpayer Identification Number
of assignee) __________ shares of the 6.0% Convertible Exchangeable Preferred
Stock, $1.00 par value per share (such shares, the "PREFERRED STOCK"), of
International Shipholding Corporation, a Delaware corporation (the "COMPANY"),
and hereby irrevocably
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constitutes and appoints_________ attorney to transfer the Preferred Stock on
the books of the Company, with full power of substitution in the premises.
Unless the appropriate box below is checked, the undersigned confirms that
the Preferred Stock is not being transferred to the Company or an "affiliate" of
the Company as defined in Rule 144 under the Securities Act of 1933, as amended
(an "AFFILIATE").
[ ] The transferee is an Affiliate of the Company.
[ ] The transferee is the Company
Dated: _________________
___________________________
___________________________
Signature(s)
Signature(s) must be guaranteed by
an eligible guarantor institution
(banks, stock brokers, savings and loan
associations and credit unions) with
membership in an approved signature
guarantee medallion program pursuant to
Securities and Exchange Commission Rule
17AD-15 if shares of Common Stock are to
be issued or Preferred Stock to be
delivered other than to and in the name
of the registered holder.
Signature Guarantee
NOTICE: The signature on the assignment must correspond with the name as
written upon the face of the Preferred Stock certificate in every particular
without alteration or enlargement or any change whatever.
(c) The following is the form of Form of Change in Control
Purchase Notice:
FORM OF CHANGE IN CONTROL PURCHASE NOTICE
To: _____________________________
The undersigned hereby irrevocably acknowledges receipt of a notice
from International Shipholding Corporation, a Delaware corporation (the
"COMPANY"), as to the occurrence of a Change in Control with respect to the
Company and requests and instructs the
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Company to purchase _____ shares of Preferred Stock in accordance with the terms
of the Certificate of Designations of the Company, dated January 5, 2005,
governing the Preferred Stock (the "CERTIFICATE OF DESIGNATIONS"), at a purchase
price per share equal to 100% of the Liquidation Preference per share plus an
amount equal to accrued and unpaid dividends, if any, to (but excluding) the
Change in Control Purchase Date. The certificate number(s) of such share(s)
is/are ____________ (include if the Preferred Stock is certificated).
Capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Certificate of Designations.
Dated: _______________
__________________________
__________________________
Signature(s)
NOTICE: The above signatures of the
holder(s) hereof must correspond with the
name as written upon the face of the
Security in every particular without
alteration or enlargement or any change
whatever.
Aggregate Liquidation Preference to be
purchased (if less than all):
$___________________________________
___________________________________
Social Security or Other Taxpayer
Identification Number
[SIGNATURES NEXT PAGE]
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IN WITNESS WHEREOF, the Company has caused this Certificate to be
signed and attested this 5th day of January, 2005.
INTERNATIONAL SHIPHOLDING CORPORATION
By: /s/ Erik F. Johnsen
-----------------------------------
Name: Erik F. Johnsen
Title: Chairman of the Board and
Chief Executive Officer
Attest:
/s/ H. Hughes Grehan
--------------------------------------
Name: H. Hughes Grehan
Title: Assistant Secretary
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