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EXHIBIT 3.3
CERTIFICATE OF DESIGNATIONS OF 10%
CUMULATIVE REDEEMABLE CONVERTIBLE PREFERRED STOCK, SERIES A
(PAR VALUE $0.01 PER SHARE)
OF
AMERICAN PLUMBING & MECHANICAL, INC.
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PURSUANT TO SECTION 151(g) OF THE
GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
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The undersigned does hereby certify that the following
resolutions were duly adopted by the Board of Directors of American Plumbing &
Mechanical, Inc., a Delaware corporation (the "Corporation"), in accordance
with the provisions of Section 151 of the Delaware General Corporation Law, at
a meeting duly convened and held on March , 1999, at which a quorum was present
and acting throughout:
WHEREAS, the Amended and Restated Certificate of
Incorporation of the Corporation (the "Charter"), authorizes a total
of 115,000,000 shares of capital stock, consisting of (i) 100,000,000
shares of common stock, par value $0.01 per share (the "Common
Stock"), issuable from time to time; (ii) 5,000,000 shares of
restricted common stock, par value $0.01 per share, issuable from time
to time and (iii) 10,000,000 shares of preferred stock, par value
$0.01 per share (the "Preferred Stock"), issuable from time to time in
one or more series; and
WHEREAS, the Corporation has entered into acquisition
agreements (the "Acquisition Agreements"), dated February 11, 1999,
with each of the following entities: Christianson Enterprises, Inc.,
GGR Leasing Corporation and Christianson Services, Inc., R.C.R.
Plumbing, Inc., Teepe's River City Mechanical, Inc., Keith Riggs
Plumbing, Inc., J.A. Croson Company and Franklin Fire Sprinkler
Company, J. A. Croson Company of Florida, Power Plumbing Inc., Nelson
Mechanical Contractors, Inc., Sherwood Mechanical, Inc. and Miller
Mechanical Contractors, Inc., and the shareholders of each of those
entities;
RESOLVED, that pursuant to the authority conferred on the
Board of Directors by the Charter, the Series A Preferred, be, and it
hereby is, established, created and approved, and that the designation
and number of shares thereof and the voting and other powers,
preferences and relative, participating, optional and other rights of
the shares of such series,
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and the qualifications, limitations and restrictions thereof, be, and
they hereby are, as set forth on Exhibit A attached hereto and
incorporated herein by reference for all purposes; and
FURTHER RESOLVED, that the proper officers be, and each
hereby is, authorized, empowered and directed, by and on behalf of the
Corporation and in its name, to prepare, execute and deliver, and file
with the Secretary of State of the State of Delaware, a certificate of
designations of the terms, limitations, rights and preferences of the
Series A Preferred Stock (the "Certificate of Designations"), with the
designations, voting and other powers, preferences, relative,
participating, optional and other rights, and the qualifications,
limitations and restrictions, set forth on Exhibit A.
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IN WITNESS WHEREOF, the Corporation has caused this
certificate to be signed this 31 day of March, 1999.
American Plumbing & Mechanical, Inc.
By: /s/ C. BYRON SNYDER
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C. Byron Snyder
Director and Secretary
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EXHIBIT A
Section 1. Number of Shares and Designation. This series of preferred
stock shall be designated as "10% Cumulative Redeemable Convertible Preferred
Stock, Series A" and the number of shares which shall constitute such series
shall not be more than 1,048,820 shares, par value $.01 per share. For the
purpose of this Certificate of Designations, the 10% Cumulative Redeemable
Convertible Preferred Stock, Series A, shall be referred to as the "Series A
Preferred."
Section 2. Dividends.
(a) General Obligation. When, as and if declared by the Board of
Directors and to the extent permitted under the Delaware law, the Corporation
shall pay preferential dividends in cash to the holders of the Series A
Preferred as provided in this Section 2. Dividends on each share of the Series A
Preferred shall accrue on a daily basis at the rate of 10% per annum of the sum
of the Liquidation Value (as defined in Section 3(f) hereof) thereof plus all
accumulated and unpaid dividends thereon from and including the date of issuance
of such share to and including the first to occur of (i) the date on which the
Liquidation Value of such share (plus all accrued and unpaid dividends thereon)
is due and payable to the holder thereof in connection with the liquidation of
the Corporation or the redemption of such share by the Corporation, (ii) the
date on which such share is converted into shares of Common Stock as provided
hereunder or (iii) the fortieth (40th) day immediately following the IPO
Prospectus Delivery Termination Date (as defined in Section 6(a) hereof.)
Dividends shall accrue whether or not they have been declared and whether or not
there are profits, surplus or other funds of the Corporation legally available
for the payment of dividends.
(b) Dividend Payment Dates. All dividends which have accrued on the
Series A Preferred shall be payable on June 30 and December 31 of each year,
beginning June 30,1999 (the "Dividend Payment Dates"). All dividends which have
accrued on each share of Series A Preferred outstanding during the six-month
period (or other period in the case of an initial Dividend Payment Date) ending
upon such Dividend Payment Date shall be accumulated and shall remain
accumulated dividends with respect to such shares until paid to the holder
thereof. If a Dividend Payment Date falls on any date other than a business day,
the dividend payment due on such Dividend Payment Date shall be paid on the
business day immediately following such Dividend Payment Date, with the same
effect as if paid on the Dividend Payment Date without any additional accrual of
dividends payable in respect of such delay. Dividends payable on each Dividend
Payment Date shall be paid to record holders of the shares of Series A Preferred
as they appear on the books of the Corporation at the close of business on a
date (the "Dividend Record Date") fixed by the Board of Directors not more than
60 nor less than 30 days immediately preceding the applicable Dividend Payment
Date.
(c) Distribution of Partial Dividend Payments. Except as otherwise
provided herein, if at any time the Corporation pays less than the total amount
of dividends then accrued with respect to the Series A Preferred, such payment
shall be distributed pro rata among the holders thereof based upon the aggregate
accrued but unpaid dividends on the shares of Series A Preferred held by each
such holder.
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(d) Participation in Dividends with Common Stock. The Series A Preferred
shall be entitled to receive dividends, in addition to the dividends otherwise
payable pursuant to paragraph (a) above, on the same basis and in the same
amount as any dividend declared and paid on the Common Stock, on a per share
basis, (i) when, as and if declared by the Board of Directors, (ii) to the
extent permitted by Delaware law and (iii) if, after taking into account all
dividends declared and paid on the Common Stock from and after the first date of
issuance of the Series A Preferred, the Corporation has paid to the holders of
Common Stock cumulative dividends equal to the amount determined by applying,
for each share of Common Stock outstanding at the time such determination is
made, the rate of 10% per annum of the Common Stock Base Amount (as defined
below) for the period commencing from (x) with respect to each share of Common
Stock outstanding on the date of the first issuance of shares of Series A
Preferred, the date of the first issuance of shares of Series A Preferred and
(y) with respect to each share of Common Stock issued thereafter, the date of
such issuance. The "Common Stock Base Amount", as of any particular date, shall
be equal to $13.00 per share (as adjusted proportionately for any stock
dividends, combinations, splits or other similar events with respect to such
shares).
(e) The holders of shares of Series A Preferred shall not be entitled to
receive any dividends or other distributions except as provided herein.
Section 3. Liquidation.
(a) Upon any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary (a "Liquidation"), each holder of Series A
Preferred shall be entitled to receive, out of the assets of the Corporation
available for distribution to stockholders, after any distribution of payment is
made upon any securities of the Corporation senior in ranking to the Series A
Preferred (the "Senior Securities"), and before any distribution or payment is
made upon any securities of the Corporation junior in ranking to the Series A
Preferred (the "Junior Securities"), an amount in cash equal to the aggregate
Liquidation Value of all shares of Series A Preferred held by such holder (plus
all accrued and unpaid dividends thereon through the effective date of the
Liquidation). If, upon any Liquidation and after payment or distribution is made
upon any Senior Securities, the Corporation's assets to be distributed among the
holders of the Series A Preferred are insufficient to permit payment to such
holders of the Series A Preferred of the aggregate amount which they are
entitled to be paid under this Section 3(a), then the entire assets available to
be distributed to the holders of the Series A Preferred shall be distributed pro
rata among such holders based upon the aggregate Liquidation Value (plus all
accrued and unpaid dividends thereon through the effective date of the
Liquidation) of the Series A Preferred held by each such holder.
(b) After the payment or distribution to the holders of Series A
Preferred in full of the preferential amount provided in Section 3(a), the
holders of Common Stock shall be entitled to receive ratably an amount per share
equal to the Common Stock Base Amount plus an amount equal to the cumulative
dividend amount with respect to such share computed in accordance with clause
(iii) of Section 2(d) hereof. If, upon any Liquidation and after payment or
distribution in full of the preferential amount specified in Section 3(a), the
Corporation's assets to be distributed among the holders of the Common Stock are
insufficient to permit payment to such holders of the Common
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Stock of the aggregate amount to which they are entitled to be paid under this
Section 3(b), then the entire remaining assets available to be distributed
shall be distributed pro rata among the holders of Common Stock.
(c) After the payment or distribution to the holders of the Series A
Preferred and the holders of the Common Stock as provided in Section 3(a) and
Section 3(b), the holders of Series A Preferred and the holders of the Common
Stock shall be entitled to receive ratably, on a per share basis, all remaining
assets of the Corporation to be paid or distributed.
(d) Prior to a Liquidation, the Series A Preferred shall be convertible
into Common Stock only in accordance with the provisions of Section 6 below.
(e) Neither the consolidation or merger of the Corporation into or with
any other entity or entities (whether or not the Corporation is the surviving
entity), or the sale, conveyance, exchange or transfer (for cash, securities or
other consideration) by the Corporation of all or any part of its assets, or the
reduction of the capital stock of the Corporation nor any other form of
recapitalization or reorganization affecting the Corporation shall be deemed to
be a Liquidation within the meaning of this Section 3.
(f) The "Liquidation Value" of any share of Series A Preferred, as of any
particular date, shall be equal to $13.00 (as adjusted proportionately for any
stock dividends, combinations, splits or other similar events with respect to
such shares).
Section 4. Redemptions.
(a) Redemption at the Option of the Holders.
(i) Effective upon the occurrence of the third anniversary of the
issuance of the shares of Series A Preferred, each holder of such shares shall
have the right (a "Put Right"), but not the obligation, to require the
Corporation to purchase the shares of Series A Preferred then owned by such
holder. The purchase price for such redemption, which shall be paid out of funds
legally available therefor, shall be the Liquidation Value of such shares plus
all accrued and unpaid dividends thereon to the date of redemption (the
"Redemption Date").
(ii) The holders may exercise their Put Right by giving written
notice (a "Put Notice") to the Corporation. Upon receipt of a Put Notice, the
Corporation shall promptly mail a Redemption Notice (as defined below) to the
holders exercising their Put Right which includes the information set forth in
Section 4(c) hereof. The Redemption Date with respect to the shares of Series A
Preferred to be redeemed upon exercise of a Put Right shall in no event be later
than 90 days after the date the Corporation first receives the Put Notice.
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(b) Redemption at the Option of the Corporation.
(i) The Corporation may, in its sole discretion, at any time and
from time to time upon prior written notice redeem all or any portion of shares
of Series A Preferred then outstanding. The purchase price for each share of
Series A Preferred to be redeemed pursuant to this Section 4(b), which shall be
paid out of funds legally available therefor, shall be the greater of (i) the
Liquidation Value of a share of Series A Preferred and (ii) the Fair Market
Value (as defined below) of a share of Series A Preferred as of the Redemption
Record Date (as defined below) plus, in the case of each of clauses (i) and
(ii), all accrued and unpaid dividends thereon to the Redemption Date. The
Corporation shall mail a Redemption Notice which includes the information set
forth in Section 4(c) hereof for each redemption to each holder of record
thereof as of a date (the "Redemption Record Date") not more than 90 days nor
less than 30 days prior to the Redemption Date.
(ii) For the purpose of any computation under clause (i) above,
the "Fair Market Value" of a share of Series A Preferred on any date shall be
deemed to be, if the Common Stock is then listed or admitted for trading on the
New York Stock Exchange ("NYSE"), the National Association of Securities Dealers
Automated Quotation National Market ("NASDAQ"), or any over-the -counter market,
the average of the daily Closing Prices for the Common Stock for the thirty (30)
consecutive business days commencing forty-five (45) business days before such
date or, if the Common Stock is not then listed or admitted for trading on the
NYSE, NASDAQ or any over-the-counter market, the fair market value thereof as
determined in good faith by the Corporation's Board of Directors. Where used
herein, the "Closing Price" for each day shall be the reported last sale price
regular way or in the case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either case
as reported on the New York Stock Exchange Composite Transactions reporting
system or, if not so quoted, on the NYSE or, if at any time the Common Stock is
not listed or admitted to trading on the NYSE, on the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
or if the Common Stock is not listed or admitted to trading on any national
securities exchange, on the NASDAQ, or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on NASDAQ, the
average of the closing bid and asked prices in the over-the-counter market as
furnished by any NYSE member firm selected from time to time by the Board of
Directors for such purposes.
(iii) In the event the Corporation elects to redeem less than the
total number of shares of Series A Preferred outstanding as of the Redemption
Record Date, the number of shares of Series A Preferred to be redeemed from each
holder thereof in redemptions pursuant to this Section 4(b) shall be the number
of shares determined by multiplying (A) the total number of shares to be
redeemed by the Corporation times (B) a fraction, the numerator of which shall
be the total amount of Liquidation Value (plus aggregate accrued and unpaid
dividends) represented by the shares held by such holder as of the Redemption
Record Date, and the denominator of which shall be the total amount of
Liquidation Value (plus aggregate accrued and unpaid dividends) represented by
the all of the shares outstanding as of the Redemption Record Date.
(c) Redemption Notice. The "Redemption Notice" sent to holders of shares
of Series A Preferred pursuant to Section 4(a)(ii) or Section 4(b)(i) hereof
shall set forth (A) the Redemption
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Date for such redemption, (B) the total number of shares of Series A Preferred
to be redeemed and (C) if fewer than all of the shares held by such holder are
to be redeemed, the number of shares to be redeemed from such holder, (D) the
purchase price for shares to be redeemed and (E) the place and time of day
where share certificates are to be surrendered for payment of the redemption
price. Upon mailing any Redemption Notice which relates to redemption at the
option of the Corporation pursuant to Section 4(b) hereof, the Corporation
shall become obligated to redeem the total number of shares specified in such
notice on the Redemption Date specified therein.
(d) Closing on the Redemption Date. Any closing of the sale of shares of
Series A Preferred redeemed pursuant this Section 4 shall take place on the
Redemption Date specified in the Redemption Notice at the time and place
specified therein, unless mutually agreed to in writing by the Corporation and
the redeeming holder. At such closing the Corporation shall make payment for the
shares of Series A Preferred to be repurchased by wire transfer of immediately
available funds to a bank account designated by such holder for such purpose and
such holder shall deliver to the Corporation certificates, duly endorsed for
transfer, representing the shares of Series A Preferred to be redeemed. In the
case where fewer than the total number of shares represented by any certificate
are redeemed, upon surrender at the closing of the certificate representing the
redeemed shares, a new certificate representing the number of unredeemed shares
of Series A Preferred shall be issued to the holder thereof without cost to the
holder on the Redemption Date.
(e) No Dividends after Redemption Date. No shares of Series A Preferred
to be redeemed shall be entitled to any dividends accruing after the Redemption
Date with respect to such shares. On such date, all rights attributable to such
shares shall cease and such shares shall no longer be deemed to be issued and
outstanding.
Section 5. Voting Rights. (a) Except as set forth below or as otherwise
provided by Delaware law, holders of shares of Series A Preferred shall not be
entitled to vote as a separate class, but shall vote together with the holders
of shares of all other classes of capital stock of the Corporation having
general voting powers as one class, on all matters submitted to a vote of the
Corporation's stockholders. Each holder of shares of Series A Preferred shall
be entitled to the number of votes equal to the number of full shares of Common
Stock into which all shares of Series A Preferred Stock held by such holder
would be converted pursuant to the provisions of Section 6(a)(i) hereof (as
adjusted proportionately for any stock dividends, combinations, splits or other
similar events with respect to such shares), at the record date for the
determination of the stockholders entitled to vote on such matters or, if no
such record date is established, at the date such vote is taken or any written
consent of stockholders is first executed (assuming, for purposes of
determining the number of votes if such shares of Series A Preferred were
converted pursuant to Section 6, a price to the public of a share of Common
Stock in an IPO (as defined in Section 6(a) hereof) of $13.00 per share). In
all cases where the holders of shares of Series A Preferred have the right to
vote separately as a class as provided elsewhere herein or otherwise by
Delaware law, such holders shall be entitled to one vote for each such share
held by them respectively.
(b) Without the affirmative vote of the holders of not less than a
majority of the shares of Series A Preferred, voting together as a single
class, the Corporation shall not:
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(i) authorize the issuance of any new class or series of stock or
reclassify any existing stock into stock having rights and preferences on parity
with or prior and superior to the Series A Preferred as to dividends or amounts
payable upon liquidation or dissolution;
(ii) increase or decrease the total number of authorized shares of
Series A Preferred;
(iii) purchase, redeem or otherwise acquire for value (or pay into
or set aside as a sinking fund for such purpose) any of the Common Stock;
provided, that this provision shall not apply to the repurchase of shares of
Common Stock under the terms of the Acquisition Agreements; or
(iv) make any amendment to the Certificate of Incorporation of the
Corporation that would adversely change the rights, preferences, privileges or
restrictions of or on the holders of the Series A Preferred set forth in this
Certificate of Designations.
(c) At any time and for so long as either (i) the Corporation has failed
to punctually pay when due any redemption payment pursuant to Section 4 hereof
or (ii) dividends payable on the Series A Preferred pursuant to Section 2 hereof
have been in arrears and unpaid for a period of forty days following the
applicable Dividend Payment Date, the Corporation shall not, without the
affirmative vote of the holders of not less than a majority of the shares of
Series A Preferred, voting together as a single class:
(i) incur any additional indebtedness for borrowed money other
than borrowings under any credit facility to which the Corporation is a party at
such time and as in effect when any redemption payment becomes due and is unpaid
or at the time any Dividend Payment becomes due and is unpaid;
(ii) effect (or make any agreement or become obligated to effect)
any (a) sale, lease, assignment, transfer or other conveyance of the assets of
the Corporation or its Subsidiaries which individually or in the aggregate would
constitute a Significant Subsidiary, (b) consolidation or merger involving the
Corporation or any of its Subsidiaries, or (c) dissolution, liquidation or
winding-up of the Corporation or any of its Subsidiaries; provided however that
in no event shall the Corporation effect any sale, lease, assignment, transfer
or other conveyance of the assets of the Corporation or its Subsidiaries to
Affiliates of the Corporation;
(iii) make (or permit any Subsidiary to make) any loan or advance
to, or own any stock or other securities of, any Subsidiary or other
corporation, partnership, or other entity unless it is wholly owned by the
Corporation and except for any such loans and advances which do not in the
aggregate exceed $250,000;
(iv) make any loan or advance to any person, including, without
limitation, any employee or director of the Corporation or any Subsidiary,
except advances and similar expenditures in the ordinary course of business; or
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(v) acquire, by purchase, exchange, merger or otherwise, all of
substantially all of the properties or assets of any other corporation or
entity.
(d) Definitions. For purposes of this Section 5, the following terms
shall have the means ascribed to them herein:
"Affiliates" means with respect to any person or entity, any other
person or entity that directly or indirectly, controls, is controlled by, or is
under common control with such person or entity.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint-stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof or other entity of any kind.
"Significant Subsidiary" means any Subsidiary of the Corporation that
would be a "Significant Subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the date hereof.
"Subsidiary" of any Person means (i) any corporation of which at least a
majority of the aggregate voting power of all classes of the Voting Stock is
owned by such Person directly or through one or more other Subsidiaries of such
Person and (ii) any entity other than a corporation in which such Person,
directly or indirectly, owns at least a majority of the Voting Stock of such
entity entitling the holder thereof to vote or otherwise participate in the
selection of the governing body, partners, managers or others that control the
management and policies of such entity. Unless otherwise specified, "Subsidiary"
means a Subsidiary of the Corporation.
"Voting Stock" with respect to any Person, means securities of any class
of capital stock of such Person entitling the holders thereof (whether at all
times or only so long as no senior class of stock or other relevant equity
interest has voting power by reason of any contingency) to vote in the election
of members of the board of directors or other governing body, partners, managers
or others that control the management and policies of such Person.
Section 6. Conversion.
(a) Conversion at Election of Corporation
(i) Upon and at any time and from time to time after the
consummation of a firm commitment underwritten initial public offering of the
Common Stock managed by one or more nationally recognized national investment
banking firms which is registered under the Securities Act of 1933 (an "IPO"),
the Corporation may convert all or any portion of the issued and outstanding
shares of Series A Preferred at a conversion ratio of one share of Common Stock
for each share of Series A Preferred to be converted (the "Equivalent Basis
Conversion Ratio"), provided, however, that if the Equivalent Basis Conversion
Ratio results in a lesser number of shares of Common Stock upon conversion of a
share of Series A Preferred than the Floating Conversion Ratio (as defined in
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Section 6(c) hereof), then the conversion of the Series A Preferred pursuant to
this Section 6(a) shall be made utilizing the Floating Conversion Ratio.
(ii) In the event that the Corporation elects to convert shares of
Series A Preferred, the Corporation shall mail a Conversion Notice (as defined
below) which includes the information set forth in paragraph 6(b) hereof for
each conversion to each holder of record thereof as of a date (the "Conversion
Record Date") not more than 90 days nor less than 30 days prior to the date of
conversion specified in the Conversion Notice (the "Corporation-Elected
Conversion Date"). In the event the Corporation elects to convert less than the
total number of shares of Series A Preferred outstanding as of the Conversion
Record Date, the number of shares of Series A Preferred of each holder to be
converted pursuant to this Section 6(a) shall be the number of shares of Series
A Preferred determined by multiplying the total number of shares of Series A
Preferred to be converted by the Corporation times a fraction, the numerator of
which shall be the total amount of Liquidation Value (plus aggregate accrued and
unpaid dividends) represented by the shares held by such holder as of the
Conversion Record Date, and the denominator of which shall be the total amount
of Liquidation Value (plus aggregate accrued and unpaid dividends), determined
as of the applicable Conversion Date, represented by all of the shares
outstanding as of the Conversion Record Date.
(iii) The "Conversion Notice" sent to holders of shares of Series
A Preferred pursuant to Section 6(a)(ii) hereof shall set forth (A) the
Corporation-Elected Conversion Date for such conversion, (B) the total number of
shares of Series A Preferred to be converted, (C) the number of shares of Series
A Preferred held by such holder, (D) the conversion ratio applicable to such
conversion and (E) the time of day and place where Series A Preferred share
certificates are to be surrendered on the Corporation-Elected Conversion Date in
exchange for certificates representing shares of Common Stock. Upon mailing any
Conversion Notice which relates to conversion at the option of the Corporation,
the Corporation shall become obligated to convert the total number of shares of
Series A Preferred specified in such notice into shares of Common Stock on the
Corporation-Elected Conversion Date specified therein.
(iv) The holders of Series A Preferred shall surrender
certificates representing the number of shares of Series A Preferred specified
in the Conversion Notice at the time and place specified therein on the
Corporation-Elected Conversion Date, duly endorsed for transfer.
(b) Conversion at Election of Holder.
(i) At any time and from time to time prior to the filing by the
Corporation of a registration statement with the Securities and Exchange
Commission (the "SEC") relating to a proposed IPO (the "IPO Registration
Statement"), a holder of Series A Preferred may convert all or any portion of
the issued and outstanding shares of Series A Preferred owned by such holder at
the Equivalent Basis Conversion Ratio. In the event that the Corporation
determines to file an IPO Registration Statement, the Corporation shall give
written notice to each holder of Series A Preferred not less than 30 days prior
to filing the IPO Registration Statement with the SEC.
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(ii) Each conversion of shares of Series A Preferred pursuant to
Section 6(b) shall be deemed to have been effected as of the close of business
on the date on which the certificate or certificates representing the shares of
such Series A Preferred to be converted, together with properly executed
conversion instructions or powers, have been surrendered for conversion at the
principal office of the Corporation (the "Holder-Elected Conversion Date").
(iii) Notwithstanding anything to the contrary in this Section
6(b), from and after the receipt by a holder of Series A Preferred of a
Redemption Notice from the Corporation pursuant to Section 4(b) through 5:00
p.m. New York time on the business day immediately preceding the Redemption Date
related thereto, a holder of Series A Preferred may convert all or a portion of
the issued and outstanding shares of Series A Preferred owned by such holder at
the Equivalent Basis Conversion Ratio.
(c) Conversion Following IPO.
(i) Not later than the 25th day following the date of the final
prospectus filed with the SEC in connection with the IPO (the "IPO Prospectus
Delivery Termination Date"), the Corporation shall give written notice to each
holder of Series A Preferred stating that (i) the IPO has been completed and
(ii) the Series A Preferred then outstanding will convert, without any further
action on the part of the Corporation or the holder of Series A Preferred, into
shares of Common Stock at the Floating Conversion Ratio (as defined below)
unless, on the fortieth (40th) day immediately following the IPO Prospectus
Delivery Termination Date, unless on or prior to such fortieth (40th) day such
holder gives written notice (a "Non-Conversion Notice") to the Corporation that
such holder desires that such holder's shares of Series A Preferred not be
converted into shares of Common Stock pursuant to Section 6(c)(ii).
(ii) In the event that the Corporation does not receive a
Non-Conversion Notice from a holder of Series A Preferred on or prior to the
fortieth (40th) day immediately following the IPO Prospectus Delivery
Termination Date, then the shares of Series A Preferred owned by such holder
will convert, without any further action on the part of the Corporation or such
holder, into shares of Common Stock at the Floating Conversion Ratio.
(iii) The Floating Conversion Ratio shall mean, with respect to
each share of Series A Preferred, a number of shares of Common Stock determined
by multiplying one by a fraction, the numerator of which is the Liquidation
Value (without the inclusion of any accrued but unpaid dividends), determined as
of the applicable Conversion Date (as defined below), and the denominator of
which is the price to the public of a share of the Common Stock in the IPO.
(iv) Nothing in this Section 6(c) shall prevent a holder of Series
A Preferred from giving a Put Notice pursuant to Section 4(a) hereof prior to
the effectiveness of the conversion of Series A Preferred into Common Stock
pursuant to Section 6(c)(ii), and, in the event that a holder of Series A
Preferred gives a Put Notice prior to the effectiveness of such conversion, the
Corporation will be obligated to redeem the Series A Preferred subject to such
Put Notice in accordance with the provisions of Section 4(a).
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(d) Closing on the Conversion Date.
(i) As promptly as possible after a Corporation-Elected Conversion
Date or a Holder-Elected Conversion Date or the date of a conversion effected in
accordance with Section 6(c) hereof (each, a "Conversion Date"), but in any
event within five business days thereafter, the Corporation shall deliver or
cause to be delivered to or for the account of the holders of the converted
shares of Series A Preferred: (A) payment in cash, out of funds legally
available therefor, in an amount equal to all accrued dividends (whether or not
declared or currently payable) with respect to each share converted which have
not been paid prior to the applicable Conversion Date; (B) in lieu of any
fractional shares to which the holder would otherwise be entitled, payment in
cash, out of funds legally available therefor, in an amount equal to such
fraction of a share multiplied by the price to the public of a share of the
Common Stock in the IPO; (C) a certificate or certificates representing the
number of shares of Common Stock issuable by reason of such conversion in such
name or names and such denomination or denominations as the converting holder
has specified; and (D) a certificate representing any shares of Series A
Preferred which were represented by the certificate or certificates delivered to
the Corporation in connection with such conversion but which were not converted.
(ii) If the Corporation is not permitted under applicable law to
make the cash payment under subparagraph (ii) above, the Corporation shall make
such payments to the converting holder as soon thereafter as funds of the
Corporation are legally available for such payment. At the request of any such
converting holder in such case, the Corporation shall provide such holder with
written evidence of its obligation to such holder.
(iii) The issuance or delivery of certificates for shares of
Common Stock upon conversion of Series A Preferred shall be made without charge
to the holders of such Series A Preferred for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
conversion and the related issuance of shares of Common Stock; provided,
however, that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
such certificate in a name other than that of the holder of shares of Series A
Preferred converted.
(e) No Dividends After Conversion Date. No shares of Series A Preferred
to be converted shall be entitled to any dividends accruing after the applicable
Conversion Date with respect to such shares. On such date, all rights
attributable to such shares shall cease, such shares shall no longer be deemed
to be issued and outstanding and the persons or persons in whose name or names
any certificate or certificates for shares of Common Stock are to be issued upon
such conversion will be deemed to have become the holder or holders of record of
the shares of Common Stock represented thereby. In the event certificates
representing the shares of Series A Preferred to be converted are not delivered
on the applicable Conversion Date, such certificates will thereafter represent
only the right to receive shares of Common Stock upon their surrender.
(f) Subdivision or Combination of Common Stock. If the Corporation at any
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Equivalent Basis Conversion Ratio and the Floating
Conversion Ratio (each, a "Conversion Ratio") in effect
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immediately prior to such subdivision shall be proportionately increased, and if
the Corporation at any time combines (by reverse stock split or otherwise) one
or more classes of its outstanding shares of Common Stock into a smaller number
of shares, each Conversion Ratio in effect immediately prior to such combination
shall be proportionately decreased; provided, however, the issuance by the
Corporation of additional shares of Common Stock in an IPO or otherwise
(including without limitation (i) upon the exercise of any options to purchase
Common Stock which may have been granted from time to time by the Corporation or
(ii) as dividends on any series of Preferred Stock) for cash, property or
services shall not result in any adjustment of either Conversion Ratio. Promptly
following any such adjustment of either Conversion Ratio, the Corporation shall
give written notice thereof to all holders of Series A Preferred, setting forth
in reasonable detail and certifying the calculation and the effective date of
such adjustment.
(g) Sale of Assets, Merger, Consolidation or Change of Control. In the
event of (i) any sale of all or substantially all of the Corporation's assets in
one transaction or series of transactions, (ii) any merger or consolidation
which involves the Corporation in which the Corporation is not the surviving
entity or (iii) any transaction after which the combined voting power of the
Corporation then held by persons other than the holders of voting stock as of
the date of the closing of Acquisition Agreements constitute 50% or more of the
combined voting power of the Corporation outstanding as of the date of the
consummation of such transaction (a "Reorganization Transaction"), prior to the
consummation of such Reorganization Transaction, the Corporation shall make
appropriate provisions to insure that each of the holders of Series A Preferred
shall thereafter have the right to acquire and receive, such shares of stock,
securities or assets as such holder would have received in connection with such
Reorganization Transaction if such holder had converted its Series A Preferred
immediately prior thereto.
(h) Reservation of Common Stock. So long as any shares of the Series A
Preferred remain outstanding, the Corporation will at all times reserve from its
authorized Common Stock a sufficient number of shares to provide for the
conversion rights herein set forth and will take such corporate action, in the
event of an adjustment in either Conversion Ratio, as may be necessary in order
that it may validly and legally issue fully paid and nonassessable shares of
Common Stock upon conversion of the Series A Preferred.
Section 7. Lost Share Certificates. In the event a holder of shares of
Series A Preferred is unable to deliver physical certificates representing such
shares for redemption or conversion, such holder, in lieu of delivering such
certificates, must notify the Corporation, and any transfer agent that the
Corporation may request, that such certificates have been lost, stolen, or
destroyed and execute an agreement reasonably satisfactory to the Corporation in
its sole discretion to indemnify the Corporation from any loss incurred by it in
connection therewith. In such event, such notice and agreement must be received
by the Corporation not less than ten days in advance of the applicable
Redemption Date or Conversion Date, as the case may be.
Section 8. Registration Books; Record Holders. The Corporation will keep,
or cause to be kept, at its principal office (or at the office of its agent for
such purpose) proper books in which the names and addresses of the holders of
shares of Series A Preferred issued by the Corporation shall
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be registered and in which transfers of such shares may be registered. The
Corporation may treat the registered holder of any shares of Series A Preferred
as the absolute owner thereof for the purpose of receiving all dividends and
redemption payments thereon and for all other purposes, and the Corporation
shall not be affected by any notice or knowledge to the contrary.
Section 9. No Consent for Certain Actions. Except as provided in Section
5 hereof, no consent, approval or vote of the holders of Series A Preferred
shall be required for (i) the creation of any indebtedness of any kind of the
Corporation, (ii) the creation of any class of Junior Securities or Senior
Securities, (iii) the authorization of additional shares of any Junior Security
or Senior Securities, (iv) the issuance of shares of Junior Securities or Senior
Securities or (v) the repurchase or redemption of shares of Common Stock
pursuant to the provisions of the Acquisition Agreements.
Section 10. No Preemptive Rights. The holders of Series A Preferred
shall not have preemptive rights to acquire additional, unissued or treasury
shares of capital stock of the Corporation.
Section 11. Amendment and Waiver. The Corporation may not amend this
Certificate of Designations or waive compliance with any of the provisions
hereof without, in either instance, the affirmative vote (at a meeting) or the
written consent (with or without a meeting) of the holders of a majority of the
shares of Series A Preferred then outstanding.
Section 12. Severability of Provisions. Whenever possible, each provision
hereof shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
Section 13. Notices. Except as otherwise expressly provided hereunder,
all notices referred to herein shall be in writing and shall be delivered by
first class mail or by reputable overnight courier service, charges prepaid, and
shall be deemed to have been given when so mailed or sent (i) to the Corporation
(attention: Secretary) at its principal executive offices and (ii) to any
stockholder, at such holder's address as it appears in the stock records of the
Corporation or to such other address as the Corporation or holder, as the case
may be, shall have designated by notice similarly given.
* * * *
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IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations to be signed and attested this _____ day of March, 1999.
AMERICAN PLUMBING & MECHANICAL, INC.
By:
---------------------------------------
David Baggett
Chief Financial Officer
Attest:
By:
-----------------------------
C. Byron Snyder
Secretary
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