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EXHIBIT 3.1.6
CERTIFICATE OF DESIGNATION OF THE POWERS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF
SERIES C CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK
AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF
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Pursuant to Section 151 of the Delaware General Corporation Law
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NM Acquisition Corp., the successor by merger to NEXTLINK
Communications, Inc. and to be known as NEXTLINK Communications, Inc.
immediately after the filing of this Certificate of Designation (the
"Corporation"), a corporation organized and existing under the General
Corporation Law, does hereby certify that, pursuant to authority conferred upon
the board of directors of the Corporation (the "Board of Directors") by the
Section 3 of the Corporation's Amended and Restated Certificate of
Incorporation, as amended from time to time (the "Certificate of
Incorporation"), and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware (the "DGCL"), said Board of Directors
is authorized to issue Preferred Stock of the Corporation in one or more series
and the Board of Directors has duly approved and adopted the following
resolution on June 13, 2000 (the "Resolution"):
RESOLVED that, pursuant to the authority vested in the Board of
Directors by Section 3 of the Corporation's Certificate of Incorporation, and
Section 151 of the DGCL, the Board of Directors, hereby creates, authorizes and
provides for the issuance of a series of the preferred stock of the Corporation,
par value $.01 per share (such preferred stock designated as the "Series C
Cumulative Convertible Participating Preferred Stock"), consisting of 584,375
shares and having the powers, designation, preferences, relative, participating,
optional and other special rights and the qualifications, limitations and
restrictions thereof that are set forth in the Certificate of Incorporation and
in this Resolution as follows:
1. Number and Designation. 584,375 shares of the Preferred
Stock of the Corporation shall constitute a series designated as "Series C
Cumulative Convertible Participating Preferred Stock" (the "Series C Preferred
Stock").
2. Definitions. Unless the context otherwise requires, when
used herein the following terms shall have the meaning indicated.
"Board of Directors" means the Board of Directors of the
Corporation.
"Business Day" means any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in New
York City, New York generally are authorized or required by law or other
governmental actions to close.
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"Capital Stock" means, with respect to any person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting and/or non-voting) of such person's capital stock,
whether outstanding on the Issue Date or issued after the Issue Date, and any
and all rights (other than any evidence of indebtedness), warrants or options
exchangeable for or convertible into such capital stock.
"Change of Control" will be deemed to have occurred at such time
as any of the following occur: (i) any person or any persons acting together
that would constitute a "group" for purposes of Section 13(d) of the Exchange
Act, or any successor provision thereto (other than Eagle River, Craig O. McCaw,
Wendy P. McCaw and their respective affiliates or an underwriter engaged in a
firm commitment underwriting on behalf of the Corporation), shall beneficially
own (within the meaning of Rule 13d-3 under the Exchange Act, or any successor
provision thereto) more than 50% of the aggregate voting power of all classes of
Voting Stock of the Corporation, (ii) neither Mr. Craig O. McCaw nor any person
designated by him to the Corporation as acting on his behalf shall be a director
of the Corporation, or (iii) from and after the date on which the Corporation
has redeemed indefeasibly or defeased in full its obligations in respect of its
12-1/2% Senior Notes due April 15, 2006 or defeased the covenants applicable
thereto in accordance with their terms, during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors (together with any new directors whose election by the Board of
Directors or whose nomination for election by the shareholders of the
Corporation was proposed by a vote of a majority of the directors of the
Corporation then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office.
"Class A Common Stock" means any shares of the Corporation's Class
A Common Stock, par value $.02 per share, now or hereafter authorized to be
issued, and any and all securities of any kind whatsoever of the Corporation
which may be exchanged for or converted into Class A Common Stock, any and all
securities of any kind whatsoever of the Corporation which may be issued on or
after the date hereof in respect of, in exchange for, or upon conversion of
shares of Class A Common Stock pursuant to a merger, consolidation, stock split,
stock dividend, recapitalization of the Corporation or otherwise.
"Common Stock" means the Corporation's Class A Common Stock, the
Corporation's Class B Common Stock, par value $.02 per share, and any other
common stock of the Corporation.
"Current Market Price" means the average of the daily Market
Prices of the Common Stock for ten consecutive trading days immediately
preceding the date for which such value is to be computed.
"Eagle River" means Eagle River Investments, L.L.C., a limited
liability company formed under the laws of the State of Washington.
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute, and the rules and regulations promulgated
thereunder.
"Issue Date" means the original date of issuance of shares of
Series C Preferred Stock by NEXTLINK.
"Liquidation Preference" with respect to a share of Series C
Preferred Stock means, as at any date, the sum of (i) $1,000.00 plus (ii) any
Special Amount with respect to such share plus (iii) an amount equal to any
accrued and unpaid Preferred Dividends (as defined in paragraph 4(a) below) with
respect to such share from the last Dividend Payment Date through such date.
"Market Price" means, with respect to the Common Stock, on any
given day, (i) the price of the last trade, as reported on the Nasdaq National
Market, not identified as having been reported late to such system, or (ii) if
the Common Stock is so traded, but not so quoted, the average of the last bid
and ask prices, as those prices are reported on the Nasdaq National Market, or
(iii) if the Common Stock is not listed or authorized for trading on the Nasdaq
National Market or any comparable system, the average of the closing bid and
asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Corporation for that
purpose. If the Common Stock is not listed and traded in a manner that the
quotations referred to above are available for the period required hereunder,
the Market Price per share of Common Stock shall be deemed to be the fair value
per share of such security as determined in good faith by the Board of Directors
of the Corporation.
"Net Realizable FMV" means, with respect to a share of Common
Stock, if calculable, the amount of gross proceeds net of underwriters'
discounts, commissions or other selling expenses received by or to be received
by the holder in connection with the sale of such share of Common Stock on a
when issued basis or immediately after the conversion or, in all other cases, an
amount equal to 97% of the Current Market Price of the Common Stock.
"NEXTLINK" means NEXTLINK Communications, Inc., a Delaware
corporation and a predecessor to the Corporation.
"Preference Amount" with respect to a share of Series C Preferred
Stock means, as at any date, the sum of (i) $727.273 plus (ii) any Special
Amount, whether or not declared, with respect to such share plus (iii) an amount
equal to any accrued and unpaid Preferred Dividends with respect to such share
from the last Dividend Payment Date through such date.
"Series D Designation" means the Certificate of Designation for
the Series D Preferred Stock.
"Series D Preferred Stock" means the Series D Convertible
Participating Preferred Stock, par value $.01 per share, of the Corporation.
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"Special Amount" with respect to a share of Series C Preferred
Stock shall mean all dividends and other amounts which have become payable in
respect of such share under paragraph 4(a) but which have not been paid. The
Special Amount with respect to any such share shall be reduced by the amount of
any such dividends and other amounts actually paid in respect of such share
under paragraph 4(c).
"Voting Stock" means, with respect to any person, the Capital
Stock of any class or kind ordinarily having the power to vote for the election
of directors or other members of the governing body of such person.
3. Rank. (a) The Series C Preferred Stock and Series D
Preferred Stock each will, with respect to dividend rights and rights on
liquidation, winding-up and dissolution, rank (i) senior to the Corporation's 6
1/2% Series B Cumulative Convertible Preferred Stock, par value $.01 per share,
the Corporation's 7% Series F Convertible Redeemable Preferred Stock due 2010
and all classes of Common Stock and to each other class of Capital Stock of the
Corporation or series of Preferred Stock of the Corporation established
hereafter by the Board of Directors of the Corporation the terms of which do not
expressly provide that such class or series ranks senior to, or on a parity
with, the Series C Preferred Stock and Series D Preferred Stock as to dividend
rights and rights on liquidation, winding-up and dissolution of the Corporation
(collectively referred to, together with all classes of Common Stock of the
Corporation, as "Junior Securities"); (ii) on a parity with each class of
Capital Stock of the Corporation or series of Preferred Stock of the Corporation
established hereafter by the Board of Directors of the Corporation, the terms of
which expressly provide that such class or series will rank on a parity with the
Series C Preferred Stock and Series D Preferred Stock as to dividend rights and
rights on liquidation, winding-up and dissolution (collectively referred to as
"Parity Securities"); and (iii) junior to the Corporation's 14% Series A Senior
Exchangeable Redeemable Preferred Shares, par value $.01 per share (the "Senior
Exchangeable Redeemable Preferred Shares"), the Corporation's 13 1/2% Series E
Senior Redeemable Exchangeable Preferred Stock due 2010 and to each class of
Capital Stock of the Corporation or series of Preferred Stock of the Corporation
established hereafter by the Board of Directors of the Corporation in accordance
with Section 9(d) hereof, the terms of which expressly provide that such class
or series will rank senior to the Series C Preferred Stock and Series D
Preferred Stock as to dividend rights and rights on liquidation, winding-up and
dissolution of the Corporation (collectively referred to as "Senior
Securities"); provided that the relative powers, rights and preferences of the
Series C Preferred Stock and Series D Preferred Stock vis-a-vis the other shall
be as set forth herein and in the Series D Designation.
(b) The respective definitions of Junior Securities, Parity
Securities and Senior Securities shall also include any warrants, rights or
options or other securities exercisable or exchangeable for or convertible into
any of the Junior Securities, Parity Securities and Senior Securities, as the
case may be.
(c) The Series C Preferred Stock shall be subject to the
creation of Junior Securities and Parity Securities and, to the extent permitted
by Section 9(d), Senior Securities.
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4. Dividends. (a) The holders of shares of Series C Preferred
Stock shall be entitled to receive with respect to each share of Series C
Preferred Stock, when, as and if declared by the Board of Directors, out of
funds legally available for the payment of dividends, dividends per annum equal
to $54.5455 per share in cash (the "Preferred Dividend"). Preferred Dividends
shall accrue and shall be cumulative whether or not declared from the Issue Date
and shall be payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year (unless such day is not a Business Day, in which event
such dividends shall be payable on the next succeeding Business Day) (each such
date being a "Dividend Payment Date" and each such quarterly period being a
"Dividend Period"), commencing on March 31, 2000. Each such dividend shall be
payable to the holders of record of shares of the Series C Preferred Stock as
they appear on the stock register of the Corporation at the close of business on
the corresponding Record Date. As used herein, the term "Record Date" means,
with respect to the dividend payable on March 31, June 30, September 30 and
December 31, respectively, of each year, the preceding March 15, June 15,
September 15 and December 15, or such other date, not more than 60 days or less
than 10 days preceding the payment dates thereof, as shall be fixed as the
record date by the Board of Directors.
(b) The amount of Preferred Dividends payable for each full
Dividend Period for each outstanding share of Series C Preferred Stock shall be
computed by dividing $54.5455 by four. The amount of Preferred Dividends payable
on the initial Dividend Payment Date, or in respect of any period shorter or
longer than a full Dividend Period, on the Series C Preferred Stock shall be
computed on the basis of twelve 30-day months and a 360-day year. No interest,
or sum or money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Series C Preferred Stock that may be in arrears.
(c) Accrued and unpaid Special Amounts for any past Dividend
Periods may be declared and paid on any subsequent Dividend Payment Date, to
holders of record on the corresponding Record Date.
(d) So long as any shares of the Series C Preferred Stock are
outstanding, no dividend, except as described in the last sentence of Section
4(e) below and except as described in the next succeeding sentence, shall be
declared or paid or set apart for payment on any Parity Securities, nor shall
any Parity Securities be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation, directly or
indirectly (except by conversion into or exchange for Parity Securities or
Junior Securities), unless in each case all Special Amounts have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for such payment on the Series C Preferred Stock
for all Dividend Periods terminating on or prior to the date of payment of the
dividend on, or the date of redemption, purchase, or acquisition for
consideration of, such Parity Securities. When Special Amounts are not paid in
full or a sum sufficient for such payment is not set apart, as aforesaid, all
Special Amounts and additional amounts declared upon shares of the Series C
Preferred Stock and all dividends and additional amounts declared upon any other
Parity Securities shall be declared ratably in proportion to the respective
amounts of
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Special Amounts and additional amounts accumulated and unpaid on the Series C
Preferred Stock and dividends and additional amounts accumulated and unpaid on
such Parity Securities.
(e) So long as any shares of the Series C Preferred Stock are
outstanding, no dividends shall be declared or paid or set apart for payment and
no other distribution shall be declared or made upon Junior Securities, nor
shall any Junior Securities be redeemed, purchased or otherwise acquired (any
such dividend, distribution, redemption, purchase or acquisition being
hereinafter referred to as a "Junior Securities Distribution") for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation, directly or
indirectly (except by conversion into or exchange for Junior Securities), unless
in each case (i) all Special Amounts and additional amounts on all outstanding
shares of the Series C Preferred Stock and accrued and unpaid dividends and
additional amounts on any other Parity Securities shall have been paid or set
apart for payment for all past Dividend Periods with respect to the Series C
Preferred Stock and all past dividend periods with respect to such Parity
Securities and (ii) sufficient funds shall have been paid or set apart for the
payment of the dividend for the current Dividend Period with respect to the
Series C Preferred Stock and the current dividend period with respect to such
Parity Securities. Notwithstanding anything in this Certificate of Designation
to the contrary, the Corporation may declare and pay dividends on Parity Stock
which are payable solely in additional shares of, or by the increase in the
liquidation value of, Parity Stock or on Junior Stock which are payable in
additional shares of, or by the increase in the liquidation value of, Junior
Stock, as applicable, or repurchase, redeem or otherwise acquire Junior Stock in
exchange for Junior Stock, and Parity Stock in exchange for Parity Stock or
Junior Stock.
(f) So long as any shares of Series C Preferred Stock are
outstanding, if the Corporation pays a dividend in cash, securities or other
property on the Common Stock then at the same time the Corporation shall declare
and pay a dividend on each share of Series C Preferred Stock in an amount equal
to the Series C Per Share Participation Amount. The "Series C Per Share
Participation Amount" means, as at any date, 37.5% of the amount of dividends
that would be paid with respect to the Series C Preferred Stock and Series D
Preferred Stock taken together if converted into Common Stock on the date
established as the record date with respect to such dividend on the Common Stock
divided by the number of shares of Series C Preferred Stock then outstanding.
5. Liquidation Preference. (a) In the event of any
liquidation, dissolution or winding-up of the Corporation, whether voluntary or
involuntary, after payment or distribution of the assets of the Corporation
(whether capital or surplus) shall be made to or set apart for the holders of
Senior Securities, and before any payment or distribution of the assets of the
Corporation (whether capital or surplus) shall be made to or set apart for the
holders of Junior Securities, the holders of the shares of Series C Preferred
Stock and Series D Preferred Stock taken together shall be entitled to receive
an amount in cash equal to the greater of (x) the aggregate Liquidation
Preferences (as set forth herein and in the Series D Designation) of the shares
of Series C Preferred Stock
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and Series D Preferred Stock as of the date of liquidation, or (y) the aggregate
amount that would have been received with respect to the shares of Series C
Preferred Stock and Series D Preferred Stock if such stock had been converted to
Common Stock immediately prior to such liquidation, dissolution or winding-up.
If, upon any liquidation, dissolution or winding-up of the Corporation, the
assets of the Corporation, or proceeds thereof, shall be insufficient to pay in
full the aforesaid amounts under clause (x) of the preceding sentence and
liquidating payments on all Parity Securities, then such assets, or proceeds
thereof, shall (i) be distributed among the shares of Series C Preferred Stock
and the Series D Preferred Stock taken together and all such other Parity
Securities ratably in accordance with the respective amounts that would be
payable on such shares of Preferred Stock and any such other Parity Securities
if all amounts payable thereon were paid in full and (ii) the amount
distributable under clause (i) to the Series C Preferred Stock and Series D
Preferred Stock taken together, shall first be distributed to the Series C
Preferred Stock until it has received an amount equal to the aggregate
Preference Amounts of all Series C Preferred Stock outstanding as of the date of
liquidation and thereafter 37.5% to the Series C Preferred Stock and 62.5% to
the Series D Preferred Stock. If, upon any liquidation, dissolution or
winding-up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable to the Series C Preferred Stock and Series D Preferred
Stock taken together shall be sufficient to pay in full the aforesaid amounts
under clause (x) of the first sentence of this subsection 5(a) then such amount
shall first be distributed to the Series C Preferred Stock until it has received
an amount equal to the aggregate Preference Amounts of all Series C Preferred
Stock outstanding as of the date of liquidation and thereafter 37.5% to the
Series C Preferred Stock and 62.5% to the Series D Preferred Stock. Any amounts
distributed with respect to the Series C Preferred Stock pursuant to this
paragraph 5(a) shall be allocated pro rata among the shares of Series C
Preferred Stock. For the purposes of this paragraph 5, neither the sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Corporation nor the consolidation or merger of the Corporation with or into one
or more other entities shall be deemed to be a liquidation, dissolution or
winding-up of the Corporation.
(b) Subject to the rights of the holders of any Parity
Securities, after payment shall have been made in full to the holders of the
Series C Preferred Stock and the Series D Preferred Stock taken together, as
provided in this paragraph 5, any other series or class or classes of Junior
Securities shall, subject to the respective terms and provisions (if any)
applying thereto, be entitled to receive any and all assets remaining to be paid
or distributed, and the holders of the Series C Preferred Stock, Series D
Preferred Stock and any Parity Securities shall not be entitled to share
therein.
6. Redemption. (a) The Series C Preferred Stock shall not be
redeemable by the Corporation prior to the later of (i) the fifth anniversary of
the Issue Date and (ii) the date on which the Corporation has redeemed
indefeasibly or defeased in full its obligations in respect of its 12 1/2%
Senior Notes due April 15, 2006 or defeased the covenants applicable thereto in
accordance with their terms (the "Redemption Trigger Date"). On and after the
Redemption Trigger Date, to the extent the Corporation shall have funds legally
available for such payment, and subject to the rights of the holders pursuant to
Section 8 hereof, the Corporation may redeem at its option shares of Series C
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Preferred Stock, at any time in whole or from time to time in part, at a
redemption price per share equal to the Liquidation Preference as of the date
fixed for redemption, without interest; provided that the Corporation shall only
be entitled to redeem shares of the Series C Preferred Stock if shares of the
Series D Preferred Stock are also redeemed on a proportional basis based on the
percentage of each series of shares outstanding at such time.
(b) To the extent the Corporation shall have funds legally
available therefor, during the 180-day period commencing on the tenth
anniversary of the Issue Date, the holders of the Series C Preferred Stock shall
have the right to cause the Corporation to redeem at any time in whole or from
time to time in part outstanding shares of Series C Preferred Stock, if any, at
a redemption price per share in cash equal to the Liquidation Preference,
without interest; provided that upon any such election the Corporation shall be
required to redeem a proportional amount of the Series D Preferred Stock.
(c) Shares of Series C Preferred Stock which have been issued
and reacquired by the Corporation in any manner, including shares purchased or
redeemed, shall (upon compliance with any applicable provisions of the laws of
the State of Delaware) be retired and have the status of authorized and unissued
shares of the class of Preferred Stock undesignated as to series and may be
redesignated and reissued as part of any series of the Preferred Stock; provided
that no such issued and reacquired shares of Series C Preferred Stock shall be
reissued or sold as Series C Preferred Stock.
(d) If the Corporation is unable or shall fail to discharge its
obligation to redeem outstanding shares of Series C Preferred Stock pursuant to
paragraph 6(b) (the "Mandatory Redemption Obligation"), the Mandatory Redemption
Obligation shall be discharged as soon as the Corporation is able to discharge
such Mandatory Redemption Obligation. If and so long as any Mandatory Redemption
Obligation with respect to the Series C Preferred Stock shall not be fully
discharged, the Corporation shall not (i) directly or indirectly, redeem,
purchase, or otherwise acquire any Parity Security or discharge any mandatory or
optional redemption, sinking fund or other similar obligation in respect of any
Parity Securities or (ii) declare or make any Junior Securities Distribution,
or, directly or indirectly, discharge any mandatory or optional redemption,
sinking fund or other similar obligation in respect of any Junior Securities.
7. Procedure for Redemption. (a) In the event that fewer than
all the outstanding shares of Series C Preferred Stock are to be redeemed, in
the case of Section 6(a), the number of shares to be redeemed shall be
determined by the Board of Directors and the shares to be redeemed shall be
selected pro rata (with any fractional shares being rounded to the nearest whole
shares). Notwithstanding anything in Section 6 to the contrary, the Corporation
shall only redeem shares of Series C Preferred Stock pursuant to Section 6(a) or
6(b) on a proportional basis based on the percentage of each series of shares
outstanding at such time.
(b) In the event the Corporation shall redeem shares of Series
C Preferred Stock pursuant to Section 6(a), notice of such redemption shall be
given by first
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class mail, postage prepaid, mailed not less than 30 days nor more than 60 days
prior to the redemption date, to each holder of record of the shares to be
redeemed at such holder's address as the same appears on the stock register of
the Corporation; provided that neither the failure to give such notice nor any
defect therein shall affect the validity of the giving of notice for the
redemption of any share of Series C Preferred Stock to be redeemed except as to
the holder to whom the Corporation has failed to give said notice or except as
to the holder whose notice was defective. Each such notice shall state: (i) the
redemption date; (ii) the number of shares of Series C Preferred Stock to be
redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date.
(c) Notice having been mailed as aforesaid, if applicable, from
and after the redemption date, dividends on the shares of Series C Preferred
Stock so called for redemption shall cease to accrue, and all rights of the
holders thereof as stockholders of the Corporation (except the right to receive
from the Corporation the redemption price and except the right to convert shares
so called for redemption prior to the close of business on the date immediately
preceding the date fixed for such redemption) shall cease. Upon surrender in
accordance with said notice, if applicable, of the certificates for any shares
so redeemed (properly endorsed or assigned for transfer, if the Board of
Directors shall so require and the notice shall so state), such shares shall be
redeemed by the Corporation at the redemption price aforesaid. In case fewer
than all the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof.
8. Conversion. (a) (i) Subject to the provisions of this
Section 8, the holders of shares of Series C Preferred Stock shall have the
right, at any time in whole and from time to time in part, at such holders'
option, to convert any or all outstanding shares (and fractional shares) of
Series C Preferred Stock held by such holders into fully paid and non-assessable
shares of Class A Common Stock; provided that upon the exercise by any holder of
Series C Preferred Stock of this conversion option, a proportional amount, based
on the percentage of each series of shares outstanding, of the Series D
Preferred Stock shall automatically convert in accordance with the terms of the
Series D Designation. At any time and from time to time the outstanding shares
of Series C Preferred Stock and Series D Preferred Stock taken together shall be
convertible into a number of shares of Class A Common Stock (the "Aggregate
Conversion Shares") equal to the aggregate Liquidation Preferences of the shares
of the Series C Preferred Stock and the Series D Preferred Stock as set forth
herein and in the Series D Designation as of the date of conversion divided by
$63.25, subject to adjustment from time to time pursuant to paragraph 8(g)
hereof (the "Conversion Price"). The Series C Preferred Stock outstanding as at
any date shall be convertible into a number of shares of Class A Common Stock
(the "Aggregate Series C Conversion Shares") equal to the sum of (A) the
aggregate Preference Amounts with respect to all outstanding shares of Series C
Preferred Stock divided by the Net Realizable FMV of a share of Class A Common
Stock at the time of conversion plus (B) .375 times the excess, if any, of the
Aggregate Conversion Shares
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over the number determined pursuant to clause (A). Each share of Series C
Preferred Stock being converted shall convert into a number of shares of Class A
Common Stock equal to the Aggregate Series C Conversion Shares divided by the
number of shares of Series C Preferred Stock then outstanding. Notwithstanding
any call for redemption pursuant to Section 6(a), the right to convert shares so
called for redemption shall terminate at the close of business on the date
immediately preceding the date fixed for such redemption unless the Corporation
shall default in making payment of the amount payable upon such redemption.
(ii) In the case of any partial conversion of Series C Preferred
Stock by the holders thereof, selection of the Series D Preferred Stock
for automatic conversion will be made by the Corporation in compliance
with the requirements of the principal national securities exchange, if
any, on which the Series D Preferred Stock is listed, or if the Series D
Preferred Stock is not listed on a national securities exchange, on a pro
rata basis, by lot or such other method as the Corporation, in its sole
discretion, shall deem fair and appropriate; provided, however, that the
Corporation may redeem all the shares held by holders of fewer than 5
shares of Series D Preferred Stock (or all of the shares held by the
holders who would hold less than 5 shares of Series D Preferred Stock as
a result of such redemption) as may be determined by the Corporation.
(b) (i) In order to exercise the conversion privilege, the
holder of the shares of Series C Preferred Stock to be converted shall surrender
the certificate representing such shares at the principal executive offices of
the Corporation, with a written notice of election to convert completed and
signed, specifying the number of shares to be converted. Unless the shares
issuable on conversion are to be issued in the same name as the name in which
such shares of Series C Preferred Stock are registered, each share surrendered
for conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder or the holder's
duly authorized attorney, and an amount sufficient to pay any transfer or
similar tax.
(ii) As promptly as practicable after the surrender by the
holder of the certificates for shares of Series C Preferred Stock as
aforesaid, the Corporation shall issue and shall deliver to such holder,
or on the holder's written order to the holder's transferee, (x) a
certificate or certificates for the whole number of shares of Class A
Common Stock issuable upon the conversion of such shares in accordance
with the provisions of this paragraph 8, (y) any cash adjustment required
pursuant to Section 8(f), and (z) in the event of a conversion in part, a
certificate or certificates for the whole number of shares of Series C
Preferred Stock not being so converted.
(iii) Each conversion of shares of Series C Preferred Stock
pursuant to paragraph 8(a) shall be deemed to have been effected
immediately prior to the close of business on the date on which the
certificates for shares of Series C Preferred Stock shall have been
surrendered and such notice received by the Corporation as aforesaid, and
the person in whose name or names any certificate or certificates for
shares of Class A Common Stock shall be issuable upon such
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conversion shall be deemed to have become the holder of record of the
shares of Class A Common Stock represented thereby at such time on such
date and such conversion shall be into a number of whole shares of Class
A Common Stock in respect of the shares of Series C Preferred Stock being
converted as determined in accordance with this Section 8 at such time on
such date. All shares of Class A Common Stock delivered upon conversion
of the Series C 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. Upon the surrender of
certificates representing the shares of Series C Preferred Stock to be
converted, the shares to be so converted shall no longer be deemed to be
outstanding and all rights of a holder with respect to such shares
surrendered for conversion shall immediately terminate except the right
to receive the Class A Common Stock and other amounts payable pursuant to
this paragraph 8 and a certificate or certificates representing the
shares of Series C Preferred Stock not converted.
(c) (i) Upon delivery to the Corporation by a holder of shares of
Series C Preferred Stock of a notice of election to convert, the right of the
Corporation to redeem such shares of Series C Preferred Stock shall terminate,
regardless of whether a notice of redemption has been mailed as aforesaid.
(ii) If a holder of Series C Preferred Stock delivers to the
Corporation a certificate therefor and a notice of election to convert,
the Series C Preferred Stock to be converted shall cease to accrue
dividends pursuant to paragraph 4 but shall continue to be entitled to
receive pro rata dividends for the period from the last Dividend Payment
Date to the date of delivery of the notice of election to convert in
preference to and in priority over any dividends on any Junior
Securities.
(iii) Except as provided above and in paragraph 8(g), the
Corporation shall make no payment or adjustment for accrued and unpaid
dividends on shares of Series C Preferred Stock, whether or not in
arrears, on conversion of such shares or for dividends theretofore paid
on the shares of Class A Common Stock.
(d) (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, such number of its
authorized but unissued shares of Class A Common Stock as shall be required for
the purpose of effecting conversions of the Series C Preferred Stock.
(ii) Prior to the delivery of any securities which the
Corporation shall be obligated to deliver upon conversion of the Series C
Preferred Stock, the Corporation shall comply with all applicable federal
and state laws and regulations which require action to be taken by the
Corporation.
(e) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Class A Common Stock on conversion of the Series C Preferred Stock
pursuant hereto; provided
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that the Corporation shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issue or delivery of shares of Class
A Common Stock in a name other than that of the holder of the Series C Preferred
Stock to be converted and no such issue or delivery shall be made unless and
until the person requesting such issue or delivery has paid to the Corporation
the amount of any such tax or has established, to the satisfaction of the
Corporation, that such tax has been paid.
(f) In connection with the conversion of any shares of Series C
Preferred Stock, no fractions of shares of Class A Common Stock shall be
required to be issued to the holder of such shares of Series C Preferred Stock,
but in lieu thereof the Corporation shall pay a cash adjustment in respect of
such fractional interest in an amount equal to such fractional interest
multiplied by the Market Price per share of Class A Common Stock on the business
day next preceding the business day on which such shares of Series C Preferred
Stock are deemed to have been converted.
(g)(i) In case the Corporation shall at any time after the Issue
Date (A) declare a dividend or make a distribution on Common Stock payable in
Common Stock (other than dividends or distributions payable to holders of the
Series C Preferred Stock including dividends paid as contemplated by Section
4(f)), (B) subdivide or split the outstanding Common Stock, (C) combine or
reclassify the outstanding Common Stock into a smaller number of shares, (D)
issue any shares of its Capital Stock in a reclassification of Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Corporation is the continuing corporation), or (E)
consolidate with, or merge with or into, any other person, the Conversion Price
in effect at the time of the record date for such dividend or distribution or on
the effective date of such subdivision, split, combination, consolidation,
merger or reclassification shall be adjusted so that the conversion of the
Series C Preferred Stock after such time shall entitle the holder to receive the
aggregate number of shares of Common Stock or other securities of the
Corporation (or other securities into which such shares of Common Stock have
been converted, exchanged, combined, consolidated, merged or reclassified
pursuant to clause 8(g)(i)(C), 8(g)(i)(D) or 8(g)(i)(E) above) which, if the
Series C Preferred Stock had been converted immediately prior to such time, such
holder would have owned upon such conversion and been entitled to receive by
virtue of such dividend, distribution, subdivision, split, combination,
consolidation, merger or reclassification. Such adjustment shall be made
successively whenever an event listed above shall occur.
(ii) In case the Corporation shall issue or sell any Common
Stock (or rights, options, warrants or other securities convertible into
or exercisable or exchangeable for shares of Common Stock) without
consideration or for a consideration per share (or having a conversion,
exchange or exercise price per share) less than the Current Market Price
on the date of such issuance (or, in the case of convertible or
exchangeable or exercisable securities, less than the Current Market
Price as of the date of issuance of the rights, options, warrants or
other securities in respect of which shares of Common Stock were issued)
then, and in each such case, the Conversion Price shall be reduced to an
amount determined by multiplying (A) the Conversion Price in effect on
the day immediately prior to such date by (B) a fraction, the numerator
of which shall be the sum of (1) the number of shares of Common Stock
outstanding immediately prior to
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such sale or issuance multiplied by the then applicable Current Market
Price (such Current Market Price, the "Adjustment Price") and (2) the
aggregate consideration receivable by the Corporation for the total
number of shares of Common Stock so issued (or into or for which the
rights, options, warrants or other securities are convertible,
exercisable or exchangeable), and the denominator of which shall be the
sum of (x) the total number of shares of Common Stock outstanding
immediately prior to such sale or issue and (y) the number of additional
shares of Common Stock issued (or into or for which the rights, options,
warrants or other securities may be converted, exercised or exchanged),
multiplied by the Adjustment Price. In case any portion of the
consideration to be received by the Corporation shall be in a form other
than cash, the fair market value of such noncash consideration shall be
utilized in the foregoing computation. Such fair market value shall be
determined in good faith by the Board of Directors.
(iii) In case the Corporation shall fix a record date for the
issuance on a pro rata basis of rights, options or warrants to the
holders of its Common Stock or other securities entitling such holders to
subscribe for or purchase shares of Common Stock (or securities
convertible into or exercisable or exchangeable for shares of Common
Stock) at a price per share of Common Stock (or having a conversion,
exercise or exchange price per share of Common Stock, in the case of a
security convertible into, or exerciseable or exchangeable for, shares of
Common Stock) less than the Current Market Price on such record date, the
maximum number of shares of Common Stock issuable upon exercise of such
rights, options or warrants (or conversion of such convertible
securities) shall be deemed to have been issued and outstanding as of
such record date and the Conversion Price shall be adjusted pursuant to
paragraph 8(g)(ii) hereof, as though such maximum number of shares of
Common Stock had been so issued for an aggregate consideration payable by
the holders of such rights, options, warrants or other securities prior
to their receipt of such shares of Common Stock. In case any portion of
such consideration shall be in a form other than cash, the fair market
value of such noncash consideration shall be determined as set forth in
paragraph 8(g)(ii) hereof. Such adjustment shall be made successively
whenever such record date is fixed; and in the event that such rights,
options or warrants are not so issued or expire in whole or in part
unexercised, or in the event of a change in the number of shares of
Common Stock to which the holders of such rights, options or warrants are
entitled (other than pursuant to adjustment provisions therein comparable
to those contained in this paragraph 8(g)), the Conversion Price shall
again be adjusted as follows: (A) in the event that all of such rights,
options or warrants expire unexercised, the Conversion Price shall be the
Conversion Price that would then be in effect if such record date had not
been fixed; (B) in the event that less than all of such rights, options
or warrants expire unexercised, the Conversion Price shall be adjusted
pursuant to paragraph 8(g)(ii) to reflect the maximum number of shares of
Common Stock issuable upon exercise of such rights, options or warrants
that remain outstanding (without taking into effect shares of Common
Stock issuable upon exercise of rights,
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options or warrants that have lapsed or expired); and (C) in the event of
a change in the number of shares of Common Stock to which the holders of
such rights, options or warrants are entitled, the Conversion Price shall
be adjusted to reflect the Conversion Price which would then be in effect
if such holder had initially been entitled to such changed number of
shares of Common Stock. Notwithstanding anything herein to the contrary,
no further adjustment to the Conversion Price shall be made upon the
issuance or sale of Common Stock upon the exercise of any rights, options
or warrants to subscribe for or purchase Common Stock, if any adjustment
in the Conversion Price was made or required to be made upon the record
date for the issuance or sale of such rights, options or warrants under
this clause 8(g)(iii). Notwithstanding anything herein to the contrary,
no adjustment in the Conversion Price shall be made under this clause
8(g)(iii) to the extent the holders of Series C Preferred Stock
participate in any such distribution in accordance with Section 4(f)
hereof.
(iv) In case the Corporation shall fix a record date for the
making of a distribution to all holders of any class of Common Stock
(including any such distribution made in connection with a consolidation
or merger in which the Corporation is the continuing corporation) of
evidences of indebtedness, assets or other property, the Conversion Price
to be in effect after such record date shall be determined by multiplying
the Conversion Price in effect immediately prior to such record date by a
fraction, (A) the numerator of which shall be the Conversion Price
immediately prior to such distributions less the fair market value
(determined as set forth in paragraph 8(g)(ii) hereof) of the portion of
the assets, other property or evidence of indebtedness so to be
distributed which is applicable to one share of Common Stock and (B) the
denominator of which shall be the Conversion Price immediately prior to
such distributions. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is
not so made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such record date had
not been fixed. An adjustment to the Conversion Price also shall be made
in respect of dividends and distributions paid exclusively in cash to all
holders of any class of Common Stock (excluding any dividend or
distribution in connection with the liquidation, dissolution or
winding-up of the Corporation, whether voluntary or involuntary, and any
cash that is distributed upon a merger, consolidation or other
transaction for which an adjustment pursuant to paragraph 8(g)(i) is
made) where the sum of (1) all such cash dividends and distributions made
within the preceding 12 months in respect of which no adjustment has been
made and (2) any cash and the fair market value (determined as set forth
in paragraph 8(g)(ii) hereof) of other consideration paid in respect of
any repurchases of Common Stock by the Corporation or any of its
subsidiaries within the preceding 12 months in respect of which no
adjustment has been made, exceeds 2% of the Corporation's market
capitalization (being the product of the then Current Market Price of the
Common Stock times the aggregate number of shares of Common Stock then
outstanding on the record date for such distribution). The Conversion
Price to be in effect after such adjustment shall be determined by
subtracting from the Conversion Price in effect prior to such
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adjustment an amount equal to the quotient of (A) the sum of clause (1)
and clause (2) above and (B) the number of shares of Common Stock
outstanding on the date such adjustment is to be determined.
Notwithstanding anything herein to the contrary, no adjustment in the
Conversion Price shall be made under this clause 8(g)(iv) to the extent
the holders of Series C Preferred Stock participate in any such
distribution in accordance with Section 4(f) hereof.
(v) No adjustment to the Conversion Price pursuant to (a)
paragraphs 8(g)(ii), 8(g)(iii) or 8(g)(iv) above shall be required unless
such adjustment would require an increase or decrease of at least $.50 in
the Conversion Price or (b) paragraph 8(g)(ii) above shall be required
with respect to rights, options, warrants or other securities outstanding
on the Issue Date or issued pursuant to the Company's employee benefit
plans in effect on the Issue Date or reserved for issuance thereunder as
of the Issue Date or stock options granted after the Issue Date pursuant
to any stock option plans adopted by the Board of Directors so long as
such options have an exercise price not less than the Market Price on the
day preceding such grant; provided, however, that any adjustments which
by reason of paragraph 8(g)(v)(a) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this paragraph 8(g) shall be made to the nearest four
decimal points.
(vi) In the event that, at any time as a result of the
provisions of this paragraph 8(g), a holder of Series C Preferred Stock
upon subsequent conversion shall become entitled to receive any shares of
Capital Stock of the Corporation other than Common Stock, the number of
such other shares so receivable upon conversion of Series C Preferred
Stock shall thereafter be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
contained herein.
(vii) If, as a result of the operation of paragraphs 8(g)(ii),
8(g)(iii) or 8(g)(iv) above and corresponding provisions in the Series D
Designation, the cumulative number of shares of Class A Common Stock
issued or issuable upon conversion of the Series C Preferred Stock and
Series D Preferred Stock, after giving effect to (x) the adjustments
described in such paragraphs and corresponding provisions in the Series D
Designation and (y) all prior conversions of the Series C Preferred Stock
and Series D Preferred Stock, would equal or exceed a number (the
"Threshold Number") equal to 20% of the outstanding shares of Class A
Common Stock as of the Issue Date and if the Company receives a written
opinion of its outside counsel that the issuance of such shares in excess
of the Threshold Number would violate the rules of the Nasdaq National
Market or any other exchange on which the Class A Common Stock is then
quoted or traded, then until and unless the Corporation obtains the
approval of its common stockholders for the issuance of any such shares
of Class A Common Stock in excess of the Threshold Number, the holders
shall only be entitled to exercise their conversion rights with respect
to a maximum number of Series C and Series D Preferred Stock that would
not result in an amount of shares of Class A Common Stock being issued in
excess of the Threshold Number, but in any
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case, the Conversion Price shall be adjusted as provided in such
paragraphs. If, as a result of the operation of the preceding sentence,
the conversion rights of the holders of Series C Preferred Stock are
limited by operation thereof because appropriate stockholder approval has
not been obtained, the Corporation agrees for the benefit of the holders
of Series C Preferred Stock and Series D Preferred Stock to use its
reasonable best efforts to seek, as promptly as reasonably practicable,
the requisite approval of its common stockholders (and shall seek such
approval as often as necessary to obtain such approval), and will
recommend to its stockholders that they vote in favor of a resolution
providing for such approval, for the amount of shares of Class A Common
Stock that would be issued or issuable upon conversion in full of all
outstanding Series C and Series D Preferred Stock. Notwithstanding
anything to the contrary set forth above, the holders of Series C
Preferred Stock and Series D Preferred Stock shall be entitled to
exercise such holders' conversion rights in full (after giving effect to
any and all anti-dilution adjustments resulting from operation of
paragraphs 8(g)(ii), 8(g)(iii) or 8(g)(iv)) in connection with any
merger, consolidation or other transaction in which such Series C
Preferred Stock, Series D Preferred Stock or Class A Common Stock is
being converted into or exchanged for cash, securities or other property
in connection with such merger, consolidation or other transaction. In
the event that the Corporation elects to redeem the shares of Series C
Preferred Stock and Series D Preferred Stock at a time when the holders'
right to convert such shares into Class A Common Stock is limited as
provided in this paragraph (g), and such holders seek to exercise such
conversion rights prior to the date fixed for redemption in accordance
with this Section 8 (the "Redemption Date"), then if the total number of
shares of Class A Common Stock issued or issuable upon conversion of such
shares, after giving effect to any adjustments provided under the first
sentence of this section (the "Cumulative Number"), would exceed the
Threshold Number, the holders shall be entitled to convert such number of
shares of Series C Preferred Stock and Series D Preferred Stock into a
number of shares of Class A Common Stock up to the Threshold Number, and
with respect to the balance of such shares, the Corporation shall cancel
such shares and shall pay the holders in lieu thereof an amount in cash
equal to (a)(i) the Cumulative Number minus (ii) the Threshold Number
multiplied by (b) the Market Price per share of Class A Common Stock on
the business day next preceding the business day which is deemed the
Redemption Date.
(h) All adjustments pursuant to this paragraph 8 shall be
notified to the holders of the Series C Preferred Stock and such notice shall be
accompanied by a schedule of computations of the adjustments.
9. Voting Rights. (a) The holders of record of shares of
Series C Preferred Stock shall be entitled to vote on an as-converted basis
(calculated in accordance with Section 8(a) as of the close of trading on the
last trading day of the most recently ended fiscal quarter of the Corporation)
with the Common Stock as a single class on all matters presented to the holders
of the Common Stock for vote, except as hereinafter provided in this Section 9
or as otherwise provided by law. So long as the provisions of Section 9(b)(i)
entitle the holders of Series C Preferred Stock to designate
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the Series C Designee (as defined below), the holders of Series C Preferred
Stock shall not be entitled to vote as to the election of other directors of the
Corporation.
(b) (i) On the Issue Date, the Board of Directors shall cause
the total number of directors then constituting the whole Board of Directors to
be increased by two and the holders of the outstanding shares of Series C
Preferred Stock shall be entitled to designate one director (the "Series C
Designee") for election to the Board of Directors of the Corporation and, voting
separately as a series, shall have the exclusive right to vote for the election
of such designee to the Board of Directors; and the holders of the outstanding
shares of Series D Preferred Stock shall be entitled to designate one director
(the "Series D Designee") for election to the Board of Directors of the
Corporation and, voting separately as a series, shall have the exclusive right
to vote for the election of such designee to the Board of Directors; provided
that, notwithstanding the foregoing, after the Issue Date, (i) the holders of
the outstanding shares of the Series C Preferred Stock shall continue to be
entitled to designate the Series C Designee for election to the Board of
Directors and, voting separately as a series, shall continue to have the
exclusive right to vote for the election of the Series C Designee to the Board
of Directors, and the holders of the outstanding shares of the Series D
Preferred Stock shall continue to be entitled to designate the Series D Designee
for election to the Board of Directors and, voting separately as a series, shall
continue to have the exclusive right to vote for the election of the Series D
Designee to the Board of Directors, in each case, for as long as, and only for
as long as, at least 40% of the aggregate number of shares of Series C Preferred
Stock issued on the Issue Date and of shares of Series D Preferred Stock issued
on the original date of issuance of the Series D Preferred Stock (such aggregate
number of shares of Series C Preferred Stock and Series D Preferred Stock being
referred to herein as the "Total C and D Shares") remains outstanding; (ii) the
entitlement of the holders of outstanding shares of Series C Preferred Stock to
designate one director for election to the Board of Directors, and the exclusive
right of the holders of outstanding shares of Series C Preferred Stock to vote,
separately as a series, for the election of the Series C Designee to the Board
of Directors, shall cease immediately upon less than 40% of the Total C and D
Shares being outstanding, and the holders of the outstanding shares of the
Series C Preferred Stock shall be entitled to designate one board observer (the
"Series C Board Observer"), for as long as, and only for as long as any shares
of Series C Preferred Stock issued on the Issue Date are outstanding; (iii)
immediately upon no shares of Series C Preferred Stock issued on the Issue Date
being outstanding, the entitlement of the holders of outstanding shares of
Series C Preferred Stock to designate the Series C Board Observer, and the
rights of the Series C Observer, shall cease; and (iv) immediately upon less
than 40% but more than 20% of the Total C and D Shares being outstanding, the
Board of Directors shall cause the total number of directors then constituting
the whole Board of Directors to be decreased by one, and the term of office of
the Series C Designee shall terminate. The Series C Designee may be removed with
or without cause by the holders of the shares of Series C Preferred Stock. The
"Series C Board Observer" means a person who shall not be a member of the Board
of Directors and who shall have the rights as agreed to with the Corporation,
provided that such rights shall satisfy the requirement of contractual
management rights for purposes of the Department of Labor's "plan assets"
regulation.
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(ii) If and whenever six quarterly dividends payable on the
Series C Preferred Stock have not been paid in full or if the Corporation
shall have failed to discharge its Mandatory Redemption Obligation or the
Corporation shall have failed to comply with Section 9(d) hereof, the
total number of directors then constituting the whole Board of Directors
automatically shall be increased by one and the holders of outstanding
shares of Series C Preferred Stock, voting separately as a single series,
shall be entitled to elect one additional director to serve on the Board
of Directors at any annual meeting of stockholders or special meeting
held in place thereof, or at a special meeting of the holders of the
Series C Preferred Stock called as hereinafter provided. Whenever all
arrears in dividends and Special Amounts on the Series C Preferred Stock
then outstanding shall have been paid and dividends thereon for the
current quarterly dividend period shall have been paid or declared and
set apart for payment, or the Company shall have fulfilled its Mandatory
Redemption Obligation, as the case may be, then the right of the holders
of outstanding shares of Series C Preferred Stock to elect such
additional director shall cease (but subject always to the same
provisions for the vesting of such voting rights in the case of any
similar future arrearage in six quarterly dividends or failure to fulfill
any Mandatory Redemption Obligation), and the term of office of any
person elected as director by the holders of outstanding shares of Series
C Preferred Stock pursuant to this subparagraph (b)(ii) shall forthwith
terminate and the total number of directors then constituting the whole
Board of Directors automatically shall be reduced by one. At any time
after voting power to elect one additional director shall have become
vested and be continuing in the holders of outstanding shares of Series C
Preferred Stock pursuant to this subparagraph (b)(ii), or if a vacancy
shall exist in the office of a director elected by the holders of
outstanding shares of Series C Preferred Stock pursuant to this
subparagraph (b)(ii), a proper officer of the Corporation may, and upon
the written request of the holders of record of at least twenty-five
percent (25%) of the shares of Series C Preferred Stock then outstanding
addressed to the Secretary of the Corporation shall, call a special
meeting of the holders of Series C Preferred Stock, for the purpose of
electing the one additional director which such holders are entitled to
elect pursuant to this subparagraph (b)(ii). If such meeting shall not be
called by a proper officer of the Corporation within twenty (20) days
after personal service of said written request upon the Secretary of the
Corporation, or within twenty (20) days after mailing the same within the
United States by certified mail, addressed to the Secretary of the
Corporation at its principal executive offices, then the holders of
record of at least twenty-five percent (25%) of the outstanding shares of
Series C Preferred Stock may designate in writing one of their number to
call such meeting at the expense of the Corporation, and such meeting may
be called by the person so designated upon the notice required for the
annual meeting of stockholders of the Corporation and shall be held at
the place for holding the annual meetings of stockholders. Any holder of
Series C Preferred Stock so designated shall have, and the Corporation
shall provide, access to the lists of stockholders to be called pursuant
to the provisions hereof.
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(c) Without the written consent of holders of a majority of the
outstanding shares of Series C Preferred Stock or the affirmative vote of
holders of a majority of the outstanding shares of Series C Preferred Stock at a
meeting of the holders of Series C Preferred Stock called for such purpose, the
Corporation will not amend, alter or repeal any provision of the Restated
Certificate of Incorporation or this Certificate of Designation so as to
adversely affect the preferences, rights or powers of the Series C Preferred
Stock or to authorize the issuance of, or to issue any, additional shares of
Series C Preferred Stock; provided that any such amendment that changes any
dividend or other amount payable on or the liquidation preference of the Series
C Preferred Stock shall require the written consent of holders of two-thirds of
the outstanding shares of Series C Preferred Stock or the affirmative vote of
holders of two-thirds of the outstanding shares of Series C Preferred Stock at a
meeting of the holders of Series C Preferred Stock called for such purpose.
(d) Without the written consent of holders of a majority of the
outstanding shares of Series C Preferred Stock or the affirmative vote of
holders of a majority of the outstanding shares of Series C Preferred Stock at a
meeting of such holders called for such purpose, the Corporation will not
create, authorize or issue any (i) Parity Securities or (ii) Senior Securities
except Senior Securities issued in accordance with paragraph (f)(ii) of the
Certificate of Designation for the Senior Exchangeable Redeemable Preferred
Shares as in effect on December 3, 1999.
(e) Subject to the provisions of Sections 8 and 10 hereof, the
Corporation may, without the consent of any holder of Series C Preferred Stock,
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets as an entirety to, any Person, provided that: (1)
the successor, transferee or lessee (if not the Corporation) is organized and
existing under the laws of the United States of America or any State thereof or
the District of Columbia and the Series C Preferred Stock shall be converted
into or exchanged for and shall become shares of, or interests in, such
successor, transferee or lessee, having in respect of such successor,
transferee, or lessee substantially the same powers, preferences and relative,
participating, optional or other special rights and the qualifications,
limitations or restrictions thereof, that the Series C Preferred Stock has
immediately prior to such transaction; and (2) the Corporation delivers to the
transfer agent an officers' certificate and an opinion of counsel stating that
such consolidation, merger, conveyance, transfer or lease complies with this
Certificate of Designation. In the event of any consolidation or merger or
conveyance, transfer or lease of all or substantially all of the assets of the
Corporation that is permitted pursuant to this paragraph (e), the successor
resulting from such consolidation or into which the Corporation is merged or the
transferee or lessee to which such conveyance, transfer or lease is made, will
succeed to, and be substituted for, and may exercise every right and power of,
the Corporation with respect to the Series C Preferred Stock (or the shares or
interests into, or for which, the Series C Preferred Stock is converted or
exchanged), and thereafter, except in the case of a lease, the predecessor (if
still in existence) shall be released from its obligations and covenants with
respect to the Series C Preferred Stock.
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(f) In exercising the voting rights set forth in this paragraph
9, each share of Series C Preferred Stock shall have one vote per share. Except
as otherwise required by applicable law or as set forth herein, the shares of
Series C Preferred Stock shall not have any relative, participating, optional or
other special voting rights and powers and the consent of the holders thereof
shall not be required for the taking of any corporate action.
10. Change of Control. (a) Within thirty days of a Change of
Control (the date of such occurrence being the "Change of Control Date"), the
Corporation shall notify the holders of the Series C Preferred Stock of such
occurrence and shall be required to make an offer (the "Offer to Purchase") to
each holder of shares of Series C Preferred Stock (subject to the rights of the
holders pursuant to Section 8 hereof) to repurchase such holder's shares of
Series C Preferred Stock, or such portion thereof as may be determined by such
holder, at a price per share in cash equal to 101% of the Liquidation Preference
plus, without duplication, an amount in cash equal to all accumulated and unpaid
dividends per share (including an amount in cash equal to a prorated dividend
for the period from the last Dividend Payment Date through such date); provided
that if any holders of Series C Preferred Stock tender their shares pursuant to
the Offer to Purchase, the Corporation shall be required to purchase a
proportional amount of the Series D Preferred Stock.
(b) The Offer to Purchase must take place on a Business Day
(the "Change of Control Payment Date") not later than 30 days following the
Change of Control Date. On the Change of Control Payment Date, the Corporation
shall (A) accept for payment the Series C Preferred Stock validly tendered
pursuant to the Offer to Purchase, (B) pay to the holders of shares so accepted
the purchase price therefor in cash and (C) cancel and retire each surrendered
certificate. Unless the Corporation defaults in the payment for the Series C
Preferred Stock tendered pursuant to the Offer to Purchase, dividends will cease
to accrue with respect to the Series C Preferred Stock tendered and all rights
of holders of such tendered shares will terminate, except for the right to
receive payment therefor.
(c) The Corporation will comply with any securities laws and
regulations, to the extent such laws and regulations are applicable to the
repurchase of the Series C Preferred Stock in connection with an Offer to
Purchase.
(d) Notwithstanding anything to the contrary contained in this
Section 10, the Company will not repurchase or redeem any such stock pursuant to
this Section 10 until it has repurchased or repaid all outstanding debt
obligations pursuant to rights triggered pursuant to the terms thereof resulting
from the Change of Control in question.
11. Reports. So long as any of the Series C Preferred Stock is
outstanding, in the event the Corporation is not required to file quarterly and
annual financial reports with the Securities and Exchange Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act, the Corporation will furnish
the holders of the Series C Preferred Stock with reports containing the same
information as would be required in such reports.
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12. General Provisions. (a) The term "person" as used herein
means any corporation, limited liability company, partnership, trust,
organization, association, other entity or individual. The term "outstanding",
when used with reference to shares of stock, shall mean issued shares, excluding
shares held by the Corporation or a subsidiary of the Corporation.
(b) The headings of the sections, paragraphs, subparagraphs,
clauses and subclauses of this Certificate of Designation are for convenience of
reference only and shall not define, limit or affect any of the provisions
hereof.
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IN WITNESS WHEREOF, said NM Acquisition Corp. has caused this
Certificate of Designation to be signed by Gary D. Begeman, its Vice President,
this 16th day of June, 2000.
NM ACQUISITION CORP.
By: /s/ Gary D. Begeman
-------------------------------
Name: Gary D. Begeman
Title: Vice President
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