EXHIBIT 4.12
CERTIFICATE OF DESIGNATIONS
OF
SERIES B REDEEMABLE CONVERTIBLE PREFERRED STOCK
OF
TRINITY INDUSTRIES, INC.
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Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
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The undersigned authorized officer of Trinity Industries, Inc., a
Delaware corporation (the "Corporation"), on behalf of the Corporation, does
hereby certify that the Board of Directors of the Corporation (the "Board of
Directors"), at a duly called meeting, granted and conferred to a special
committee of the Board of Directors (the "Pricing Committee") all requisite
authority to create a series of preferred stock of the Corporation and designate
the number of shares and voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations and restrictions thereof. The Pricing Committee,
pursuant to a duly executed written consent, duly adopted the following
resolution and such resolution has not been modified and is in full force and
effect:
RESOLVED that, pursuant to the authority vested in the Pricing
Committee by the Board of Directors in accordance with the provisions of the
Certificate of Incorporation of the Corporation, as amended (the "Certificate of
Incorporation"), a series of preferred stock of the Corporation is hereby
created and the designation and number of shares thereof and the voting powers,
preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations and restrictions
thereof, are as set forth below in this Certificate of Designations:
1. Certain Definitions.
Unless the context otherwise requires, the terms defined in
this Section 1 shall have, for all purposes of this resolution, the meanings
herein specified (with terms defined in the singular having comparable meanings
when used in the plural).
"Additional Shares of Common Stock" has the meaning set forth
in Section 5(g) below.
"Aggregate Consideration Received" has the meaning set forth
in Section 5(g) below.
"Beneficial Owner" has the meaning assigned to such term in
Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether or not such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a
corresponding meaning.
"Board of Directors" has the meaning set forth in the preamble
above.
"Business Day" means a day other than a Saturday or Sunday or
a day on which commercial banks in the City of New York are authorized or
obligated by law or executive order to close.
"Cash Dividends" has the meaning set forth in Section 3(b)
below.
"Certificate of Incorporation" has the meaning set forth in
the preamble above.
"Change of Control" means the occurrence of any of the
following:
(1) the direct or indirect sale, transfer, conveyance
or other disposition (other than by way of merger,
consolidation or transfer of the Corporation's Voting Stock),
in one or a series of related transactions, of all or
substantially all of the properties or assets of the
Corporation and its Subsidiaries, taken as a whole, to any
Person other than the Corporation or a wholly-owned Subsidiary
of the Corporation; or
(2) the consummation of an acquisition of the
Corporation by another Person by means of any transaction or
series of related transactions (including, without limitation,
any reorganization, merger or consolidation other than one
effected for the purpose of reincorporating the Corporation)
that results in such Person becoming the Beneficial Owner,
directly or indirectly, of 50% or more of the Voting Stock of
the Corporation, measured by voting power rather than number
of shares.
"Common Equity" means all shares now or hereafter authorized
of any class of common stock of the Corporation, including the Common Stock, and
any other stock of the Corporation, howsoever designated, authorized after the
Initial Issue Date, which has the right (subject always to prior rights of any
class or series of preferred stock) to participate in the distribution of the
assets and earnings of the Corporation without limit as to per share amount.
"Common Stock" means the common stock, $1.00 par value per
share, of the Corporation.
"Conversion Date" has meaning set forth in Section 5(b) below.
"Conversion Price" shall initially mean $22.46 and thereafter
shall be subject to adjustment from time to time pursuant to the terms of
Section 5 below.
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"Convertible Preferred Stock" has the meaning set forth in
Section 2 below.
"Convertible Securities" has the meaning set forth in Section
5(g) below.
"Corporation" has the meaning set forth in the preamble above.
"Current Market Price" means, for a share of Common Stock on
any date, the average of Quoted Prices for the ten (10) consecutive Trading Days
ending on the first Business Day prior to such date (if the first Business Day
prior to such date is a Trading Day, or if not, then on the last Trading Day
prior to the first Business Day), appropriately adjusted to take into account
the occurrence, during the period commencing on the first of the Trading Days
during the ten (10) Trading Day period and ending on such date, of any event
that would result in an adjustment to the Conversion Price of the Convertible
Preferred Stock.
"Dividend Payment Date" has the meaning set forth in Section
3(c) below.
"Dividend Period" means the period from, and including, the
Initial Issue Date to, but not including, the first Dividend Payment Date and
thereafter, each semi-annual period from, and including, each Dividend Payment
Date to, but not including, the next Dividend Payment Date.
"Dividend Rate" means four and one half percent (4.5%) per
annum of Liquidation Preference.
"Effective Price" has the meaning set forth in Section 5(g)
below.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Extraordinary Distribution" shall mean any dividend or other
distribution (effected while any of the shares of Convertible Preferred Stock
are outstanding) to the holders of Common Stock of (i) cash, other than where
such cash dividend or distribution is an ordinary or regular quarterly cash
dividend and/or (ii) any shares of capital stock of the Corporation (other than
shares of Common Stock), other securities of the Corporation, evidences of
indebtedness of the Corporation or any other person, or any other property
(including shares of any Subsidiary of the Corporation) or any combination
thereof.
"Fair Value" means the fair value determined in good faith by
the Board of Directors and reflected in a formal resolution thereof.
"Initial Issue Date" means the date that shares of Convertible
Preferred Stock are first issued by the Corporation.
"Junior Stock" means, for the purposes of Section 3 below,
Common Equity, the Series A Junior Preferred Stock and any class or series of
stock of the Corporation which is not entitled to receive any dividends in any
Dividend Period unless all dividends required to have been paid or declared and
set apart for payment on the Convertible Preferred Stock and any other Parity
Stock shall have been so paid or declared and set apart for payment, and for
purposes of Section 4 below, shall mean Common Equity, the Series A Junior
Preferred Stock and any class
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or series of stock of the Corporation which is not entitled to receive any
assets upon liquidation, dissolution or winding up of the affairs of the
Corporation until the Convertible Preferred Stock and any other Parity Stock
shall have received the entire amount to which such stock is entitled upon such
liquidation, dissolution or winding up.
"Liquidation Event" shall mean a voluntary or involuntary
liquidation, dissolution or other winding up of the affairs of the Corporation
(in connection with the bankruptcy or insolvency of the Corporation or
otherwise). A Liquidation Event shall also include a Change of Control if the
holders of a majority of the then outstanding Convertible Preferred Stock
designate such Change of Control as a Liquidation Event in a written notice
delivered to the Corporation prior to or immediately after such Change of
Control.
"Liquidation Preference" shall mean $100,000 per share of
Convertible Preferred Stock.
"Mandatory Conversion Date" has the meaning set forth in
Section 6(b) below.
"Mandatory Conversion Notice" has the meaning set forth in
Section 6(b) below.
"Mandatory Conversion Target Price" has the meaning set forth
in section 6(a) below.
"New Shares" has the meaning set forth in Section 13(a) below.
"Parity Stock" shall mean, for purposes of Section 4 below,
any class or series of stock of the Corporation authorized after the Initial
Issue Date which is entitled to receive assets upon liquidation, dissolution or
winding up of the affairs of the Corporation on a parity with the Convertible
Preferred Stock without preference or priority of one over the other.
"Person" means any individual, corporation, association,
partnership, joint venture, limited liability company, trust, estate or other
entity.
"PIK Dividends" has the meaning set forth in Section 3(b)
below.
"Pricing Change" has the meaning set forth in Section 5(g)
below.
"Pricing Committee" has the meaning set forth in the preamble.
"Quoted Price" means, for any Trading Day, the price
determined as follows: (i) if the Common Stock is listed on the New York Stock
Exchange, the daily volume weighted average price of the Common Stock on the New
York Stock Exchange as reported by Bloomberg Financial L.P. (based on a Trading
Day from 9:30 a.m. Eastern Time to 4:00 p.m. Eastern Time); (ii) if the
foregoing does not apply, the daily volume weighted average price of the Common
Stock on any trading market where the Common Stock is listed or traded as
reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m.
Eastern Time to 4:00 p.m. Eastern Time); (iii) if the foregoing does not apply,
the daily volume weighted average price of the Common Stock on a national
exchange or in the over-the-counter market on the electronic bulletin board for
the Common Stock; or (iv) if the foregoing does not apply, the most recent bid
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price per share of Common Stock as reported in the "pink sheets" by the National
Quotation Bureau, Inc., in each case, for such Trading Day. If the Quoted Price
cannot be calculated for the Common Stock on any of the foregoing bases, the
Quoted Price of the Common Stock shall be the fair market value as determined by
the Board of Directors in good faith and reflected in a formal resolution.
"Redemption Date" means the fifth anniversary of the Initial
Issue Date.
"Redemption Price" means a price per share equal to the
Liquidation Preference per share, plus an amount equal to all cumulative
dividends accrued and unpaid on such share to the Redemption Date.
"Redemption Market Price" means the product of (i) 0.9,
multiplied by (ii) the average of the Quoted Prices of the Common Stock for the
thirty (30) consecutive Trading Days ending on the first Business Day prior to
the Redemption Date (if the first Business Day prior to the Redemption Date is a
Trading Day, or if not, then on the last Trading Day prior to the first Business
Day), appropriately adjusted to take into account the occurrence, during the
period commencing on the first of the Trading Days during the thirty (30)
Trading Day period and ending on the Redemption Date, of any event that would
result in an adjustment to the Conversion Price of the Convertible Preferred
Stock.
"Rights or Options" has the meaning set forth in Section 5(g)
below.
"Series A Junior Preferred Stock" means the Series A Junior
Participating Preferred Stock, no par value, of the Corporation.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business
entity of which more than 50% of the total voting power of
shares of Voting Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned
or controlled, directly or indirectly, by such Person or one
or more of the other Subsidiaries of that Person (or a
combination thereof); and
(2) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general partners of
which are such Person or one or more Subsidiaries of such
Person (or any combination thereof).
"Target Price" means, as of any date, the lesser of (i) the
product of (A) 0.88 multiplied by (B) the Current Market Price for such date and
(ii) the product of (A) 0.88 multiplied by (B) the Quoted Price for the first
Business Day prior to such date (if the first Business Day is a Trading Day, or
if not, then on the last Trading Day prior to the first Business Day).
"Trading Day" means, with respect to any security, (i) if the
applicable security is traded on the New York Stock Exchange, any day on which
the New York Stock Exchange is
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open for business and a Quoted Price may be ascertained or (ii) if the
applicable security is not traded on the New York Stock Exchange, any day on
which any market in which the applicable security is primarily then traded and
in which a Quoted Price may be ascertained is open for business.
"Voting Stock" means, as of any date, the capital stock of the
Corporation that is at the time entitled to vote in the election of the Board of
Directors.
2. Number of Shares and Designations. Six Hundred (600) shares of the preferred
stock, no par value, of the Corporation are hereby constituted as a series of
the preferred stock designated as Series B Redeemable Convertible Preferred
Stock (the "Convertible Preferred Stock").
3. Dividends.
(a) The record holders of Convertible Preferred Stock shall be
entitled to receive dividends payable by the Corporation at the Dividend Rate.
Such dividends shall be cumulative from the Initial Issue Date and shall be
payable cumulatively in arrears, as to each share of Convertible Preferred
Stock, when, as and if declared by the Board of Directors out of funds legally
available therefor, on every successive Dividend Payment Date (defined below)
and upon conversion or redemption of such share.
(b) Dividends on the Convertible Preferred Stock shall be
paid, at the Corporation's option and in its sole discretion, (i) in fully paid
and nonassessable shares of Common Stock (such dividends paid in kind being
herein called "PIK Dividends") or (ii) in cash (such dividends being referred to
as the "Cash Dividends"). PIK Dividends shall be paid by delivering to each
record holder of Convertible Preferred Stock a number of shares of Common Stock
determined by dividing (x) the total aggregate dollar amount of dividends
accrued and unpaid with respect to shares of Convertible Preferred Stock owned
by such record holder on the record date for the applicable Dividend Payment
Period (rounded to the nearest whole cent) by (y) the Current Market Price on
the applicable Dividend Payment Date. The Corporation shall not issue fractional
shares of Common Stock to which holders may become entitled pursuant to this
subparagraph, but in lieu thereof, the Corporation shall deliver its check in an
amount equal to the applicable fractional amount as computed in accordance with
Section 5(c). The Cash Dividends shall be payable when, as and if declared by
the Board of Directors, out of funds legally available for the payment of
dividends.
(c) Dividends on shares of Convertible Preferred Stock shall
accrue and be cumulative from and including the Initial Issue Date to and
including the date on which such shares shall have been converted into Common
Stock or redeemed. Such dividends shall accrue whether or not there shall be (at
the time such dividend becomes payable or at any other time) profits, surplus or
other funds of the Corporation legally available for the payment of dividends,
and whether or not the Board of Directors declares them. Dividends shall be
payable semi-annually in arrears on July 1 and January 1 of each year (each, a
"Dividend Payment Date"), commencing on January 1, 2004. If any Dividend Payment
Date occurs on a day that is not a Business Day, any accrued dividends otherwise
payable on such Dividend Payment Date shall be paid on the next succeeding
Business Day. The amount of dividends payable on Convertible Preferred Stock for
each full Dividend Period shall be computed by dividing by two (2), the annual
dividend at the
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Dividend Rate. Dividends shall be paid to the holders of record of the
Convertible Preferred Stock as their names shall appear on the share register of
the Corporation on the record date for such dividend. The term "record date" as
used herein with respect to the payment of dividends means, with respect to the
dividends payable on January 1 and July 1 of each year, December 16 and June 16
of each year, respectively, or such other record date, not more than sixty (60)
and not less than ten (10) days preceding the applicable Dividend Payment Date,
as shall be fixed by the Board of Directors. Dividends payable in any Dividend
Period which is less than a full Dividend Period in length will be computed on
the basis of a three hundred sixty (360) day year consisting of twelve (12)
thirty-day months. For any Dividend Period in which accrued dividends are not
paid in full on the Dividend Payment Date first succeeding the end of such
Dividend Period, then on such Dividend Payment Date such accrued and unpaid
dividends shall be added to the Liquidation Preference of the Convertible
Preferred Stock (only for the purposes of calculating future dividend payments
and not for the purposes of any other term or provision of this Certificate of
Designations), effective at the beginning of the Dividend Period succeeding the
Dividend Period as to which such dividends were not paid, until such accrued and
unpaid dividends have been paid in full. Dividends on account of arrears for any
past Dividend Periods may be declared and paid at any time to holders of record
on the record date therefor.
(d) Unless all dividends to which the holders of Convertible
Preferred Stock shall have been entitled for all previous Dividend Periods shall
have been paid or declared and a sum of money or PIK Dividends, as applicable
(as provided in Section 3(b)), sufficient for the payment thereof has been set
apart, the Corporation shall not declare, pay or set apart for payment on any
Junior Stock any dividends whatsoever, whether in cash, stock, property or
otherwise (other than dividends payable in shares of the class or series upon
which such dividends are declared or paid, or payable in shares of Common Stock
with respect to Junior Stock other than Common Stock, together with cash in lieu
of fractional shares), nor shall the Corporation make any distribution on any
Junior Stock, nor shall any Junior Stock be purchased, redeemed, retired or
otherwise acquired by the Corporation or any of its Subsidiaries nor shall any
monies be paid or made available for a sinking fund for the purchase or
redemption of any Junior Stock.
4. Distributions Upon Liquidation, Dissolution or Winding Up.
(a) In the event of any Liquidation Event, 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 Stock, the holders of
Convertible Preferred Stock shall be entitled to be paid out of the assets of
the Corporation in cash or property at its fair market value, as determined by
the Board of Directors in good faith and reflected in a formal resolution, an
amount per share equal to the Liquidation Preference plus an amount equal to all
dividends accrued and unpaid thereon to the date of such Liquidation Event. Upon
payment in full of the Liquidation Preference and all accrued and unpaid
dividends to which each holder of shares of Convertible Preferred Stock is
entitled, each holder of shares of Convertible Preferred Stock shall not be
entitled to any further participation in any distribution of assets by the
Corporation.
(b) If, upon any such Liquidation Event, the assets of the
Corporation legally available for distribution to the holders of Convertible
Preferred Stock and holders of any Parity Stock shall be insufficient to permit
the payment in full of the Liquidation Preference per share plus an amount equal
to all dividends accrued and unpaid on the Convertible Preferred Stock and the
full
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liquidating payments on all Parity Stock, then such assets of the Corporation
shall be ratably distributed among the holders of Convertible Preferred Stock
and of any Parity Stock in proportion to the full amounts to which they would
otherwise be entitled if all amounts payable thereon were paid in full.
(c) Written notice of any Liquidation Event, stating the
payment date or dates when and the place where the amounts distributable in such
circumstances shall be payable, shall be given by first class mail, postage
prepaid, not less than 30 days prior to any payment date stated therein, to the
holders of record of the shares of Convertible Preferred Stock at their address
as the same shall appear in the records of the Corporation.
5. Conversion Rights of Holders.
(a) A holder of shares of Convertible Preferred Stock shall
have the right, at such holder's option, to convert all or any portion of its
shares of Convertible Preferred Stock into Common Stock at any time before the
close of business on the Business Day preceding the Redemption Date. For the
purposes of conversion, each share of Convertible Preferred Stock shall be
valued at the Liquidation Preference plus all accrued and unpaid dividends on
such share through the Conversion Date, which shall be divided by the Conversion
Price in effect on the Conversion Date to determine the number of shares
issuable upon conversion. No other payment or adjustment for dividends shall be
made upon such conversion, and upon such conversion all unpaid dividends with
respect to such converted stock shall be deemed paid in full without regard to
any record holder at any record date for such unpaid dividends. Immediately
following such conversion, the rights of the holders of converted Convertible
Preferred Stock shall cease and the persons entitled to receive the Common Stock
upon the conversion of Convertible Preferred Stock shall be treated for all
purposes as having become the owners of such Common Stock.
(b) To convert Convertible Preferred Stock, a holder must (i)
surrender the certificate or certificates evidencing the shares of Convertible
Preferred Stock to be converted, duly endorsed at the principal office of the
Corporation or transfer agent for the Convertible Preferred Stock, if any, (ii)
notify the Corporation at such office that such holder elects to convert
Convertible Preferred Stock, and the number of shares such holder wishes to
convert, (iii) state in writing the name or names in which such holder wishes
the certificate or certificates for shares of Common Stock to be issued, and
(iv) pay any transfer or similar tax if required (provided, however, that no
such payment shall be required if the Common Stock issuable upon conversion is
to be issued in the name of the converting holder of Convertible Preferred
Stock). In the case of lost or destroyed certificates evidencing ownership of
shares of Convertible Preferred Stock to be surrendered for conversion, the
holder shall submit such proof of loss or destruction and, if requested by the
Corporation, an appropriate indemnity, reasonably required by the Corporation.
In the event that a holder fails to notify the Corporation of the number of
shares of Convertible Preferred Stock which such holder wishes to convert, such
holder shall be deemed to have elected to convert all shares represented by the
certificate or certificates surrendered for conversion. The date on which the
holder satisfies all those requirements is the "Conversion Date." As soon as
practicable after the Conversion Date, the Corporation shall deliver or shall
deliver through its transfer agent a certificate for the number of full shares
of Common Stock issuable upon the conversion, a check for any fractional share
and a new certificate representing the unconverted portion, if any, of the
shares of Convertible Preferred Stock represented by the certificate or
certificates surrendered for conversion.
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The person in whose name the Common Stock certificate is registered shall be
treated as the stockholder of record on and after the Conversion Date until such
time as record ownership is transferred. All shares of Common Stock issuable
upon conversion of the Convertible Preferred Stock shall be fully paid and
nonassessable.
(c) If a holder of Convertible Preferred Stock converts more
than one share at a time the number of full shares of Common Stock issuable upon
conversion shall be based on the total number of all shares of Convertible
Preferred Stock converted. The Corporation shall not issue a fractional share of
Common Stock upon conversion of Convertible Preferred Stock. Instead, the
Corporation shall deliver a check for an amount equal to the value of the
fractional share. The value of a fraction of a share is determined by
multiplying the Current Market Price of the Common Stock as of the Conversion
Date by the fraction, rounded to the nearest cent.
(d) A holder delivering Convertible Preferred Stock for
conversion will not be required to pay any taxes or duties in respect of the
issue or delivery of Common Stock on conversion but will be required to pay any
tax or duty that may be payable in respect of any transfer involved in the issue
or delivery of the shares of Common Stock. Certificates representing shares of
Common Stock will not be issued or delivered unless all taxes and duties, if
any, payable by the holder have been paid.
(e) The Corporation has reserved and shall continue to reserve
out of its authorized but unissued Common Stock and/or its Common Stock held in
treasury enough shares of Common Stock to permit the conversion of the
Convertible Preferred Stock in full. All shares of Common Stock which may be
issued upon conversion of Convertible Preferred Stock shall be fully paid and
nonassessable. The Corporation will comply with all securities laws regulating
the offer and delivery of shares of Common Stock upon conversion of Convertible
Preferred Stock and will list such shares on the principal United States
securities exchange on which the Common Stock is then listed.
(f) If the Corporation, after the Initial Issue Date:
(i) pays a dividend or makes a distribution on its
Common Stock in shares of its Common Stock;
(ii) subdivides its outstanding shares of Common
Stock into a greater number of shares;
(iii) combines its outstanding shares of Common Stock
into a smaller number of shares; or
(iv) issues by reclassification of its Common Stock
any shares of its capital stock;
then the Conversion Price (as in effect immediately prior to such action) shall
be proportionately adjusted so that the holder of Convertible Preferred Stock
thereafter converted may receive for the same aggregate Conversion Price the
aggregate number and kind of shares of capital stock of the Corporation that
such holder would have owned immediately following such action if such holder
had converted Convertible Preferred Stock immediately prior to such action. The
adjustment shall
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become effective immediately after the record date in the case of dividend or
distribution and immediately after the effective date of a subdivision,
combination or reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur. If, after an adjustment referred to
in clauses (i) through (iv) above, a holder of Convertible Preferred Stock upon
conversion of it may receive shares of two or more classes of capital stock of
the Corporation, the Corporation shall determine the allocation of the
Conversion Price between the classes of capital stock. After such allocation,
the conversion rights and the Conversion Price with respect to each class of
capital stock shall thereafter be subject to adjustment on terms comparable to
those applicable to Common Stock in this Section 5(f).
(g) If, at any time or from time to time after the Initial
Issue Date, the Corporation issues or sells, or is deemed by the provisions of
this Section 5(g) to have issued or sold, Additional Shares of Common Stock,
otherwise than in connection with a transaction described in Section 5(f), for
an Effective Price that is less than the Target Price (without regard to any
adjustments to the Conversion Price as a result of such issue or sale) for the
date of such issue or sale, then, and in each such case, the Conversion Price
shall be reduced, as of the close of business on the date of such issue or sale,
to the price obtained by multiplying such Conversion Price by a fraction:
(i) The numerator of which shall be the sum of (A)
the number of shares of Common Stock outstanding immediately prior to such issue
or sale of Additional Shares of Common Stock plus (B) the quotient of (x) the
Aggregate Consideration Received (as hereinafter defined) by the Corporation for
the total number of Additional Shares of Common Stock so issued or sold (or
deemed so issued or sold), divided by (y) by the Target Price (without regard to
any adjustments to the Conversion Price as a result of such issue or sale) for
the date of such issue or sale; and
(ii) The denominator of which shall be the sum of (A)
the number of shares of Common Stock outstanding immediately prior to such issue
or sale plus (B) the number of Additional Shares of Common Stock so issued or
sold (or deemed so issued or sold).
For the purpose of making any adjustment required under this
Section 5(g):
"Additional Shares of Common Stock" shall mean all shares of
Common Stock issued by the Corporation, whether or not subsequently reacquired
or retired by the Corporation, other than (i) shares of Common Stock issued or
issuable upon conversion of Convertible Preferred Stock, and (ii) shares of
Common Stock issuable upon conversion of Convertible Securities outstanding as
of the Initial Issue Date, upon exercise of Rights or Options outstanding on the
Initial Issue Date or upon exercise of Rights or Options described in the
proviso to the definition of Rights or Options.
The "Aggregate Consideration Received" by the Corporation for
any issue or sale (or deemed issue or sale) of securities shall (A) to the
extent it consists of cash, be computed at the amount of cash received by the
Corporation in connection with such issuance or sale; (B) to the extent it
consists of property other than cash, be the Fair Value of that property; (C) if
Additional Shares of Common Stock, Convertible Securities or Rights or Options
to purchase either Additional Shares of Common Stock or Convertible Securities
are issued or sold together
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with other stock or securities or other assets of the Corporation for a
consideration which covers both, be the Fair Value of the portion of the
consideration so received that may be reasonably determined in good faith by the
Board of Directors to be allocable to such Additional Shares of Common Stock,
Convertible Securities or Rights or Options; and (D) if Additional Shares of
Common Stock are issued or sold in a public offering or private placement, the
consideration shall be deemed to be the amount of cash paid therefor before
deducting therefrom any discounts, commissions or placement fees payable by the
Corporation to any underwriter or placement agent in connection with the
issuance and sale thereof.
"Convertible Securities" shall mean stock or other securities
convertible into or exchangeable for shares of Common Stock.
The "Effective Price" of Additional Shares of Common Stock
shall mean the quotient determined by dividing the Aggregate Consideration
Received, or deemed to have been received, by the Corporation under this Section
5(g), for the issue of such Additional Shares of Common Stock by the total
number of Additional Shares of Common Stock issued or sold, or deemed to have
been issued or sold, by the Corporation under this Section 5(g).
"Rights or Options" shall mean warrants, options or other
rights to purchase or acquire shares of Common Stock or Convertible Securities,
provided that the definition of "Rights or Options" shall not include such
warrants, options or other rights issued or granted to officers, directors,
consultants or employees of the Corporation pursuant any equity incentive plan
or agreement approved by the Board of Directors, including, but not limited to,
(i) Trinity Industries, Inc., Stock Option Plan with Stock Appreciation Rights;
(ii) Trinity Industries, Inc. 1998 Stock Option and Incentive Plan; (iii)
Trinity Industries, Inc. 1998 Stock Option and Incentive Plan, as amended; (iv)
1989 Stock Option Plan with Stock Appreciation Rights; (v) Profit Sharing Plan
for Employees of Trinity Industries, Inc. and Certain Affiliates as Restated
Effective April 1, 1999; (vi) Supplemental Profit Sharing Plan for Employees of
Trinity Industries, Inc. and Certain Affiliates; (vii) Transcisco Industries,
Inc. Amended and Restated (1994) Stock Option Plan; (viii) Transcisco
Industries, Inc. Directors' Stock Option Plan; (ix) Transcisco Industries, Inc.
Stock Purchase Plan; and (x) Rights Agreement dated March 11, 1999, as amended
by Amendment No. 1 dated August 12, 2001 and Amendment No. 2 dated October 26,
2001.
For the purpose of making any adjustment to the Conversion
Price required under this Section 5(g), if after the Initial Issue Date, the
Corporation issues or sells any Rights or Options or Convertible Securities and
if the Effective Price of the shares of Common Stock issuable upon exercise of
such Rights or Options and/or the conversion or exchange of Convertible
Securities (computed without reference to any additional or similar protective
or antidilution clauses) is less than the Target Price, then the Corporation
shall be deemed to have issued, at the time of the issuance of such Rights or
Options or Convertible Securities, that number of Additional Shares of Common
Stock that is equal to the maximum number of shares of Common Stock issuable
upon exercise or conversion of such Rights or Options or Convertible Securities
upon their issuance and to have received, as the Aggregate Consideration
Received for the issuance of such securities, an amount equal to the total
amount of the consideration, if any, received by the Corporation for the
issuance of such Rights or Options or Convertible Securities, plus, in the case
of such Rights or Options, the minimum amounts of consideration, if any,
11
payable to the Corporation upon the exercise in full of such Rights or Options,
plus, in the case of Convertible Securities, the minimum amounts of
consideration, if any, payable to the Corporation (other than by cancellation of
liabilities or obligations evidenced by such Convertible Securities) upon the
conversion or exchange thereof; provided that (i) if the minimum amounts of such
consideration cannot be ascertained, but are a function of antidilution or
similar protective clauses, then the Corporation shall be deemed to have
received the minimum amounts of consideration without reference to such clauses,
and (ii) if the minimum amount of consideration payable to the Corporation upon
the exercise of Rights or Options or the conversion or exchange of Convertible
Securities is reduced over time or upon the occurrence or non-occurrence of
specified events other than by reason of antidilution or similar protective
adjustments, then the Effective Price shall be recalculated using the figure to
which such minimum amount of consideration is reduced. On any change (a "Pricing
Change") in the number of shares of Common Stock deliverable upon exercise of
any Rights or Options or the conversion or exchange of any Convertible
Securities or any change in the consideration to be received by the Corporation
upon such exercise, conversion or exchange, including, but not limited to, a
change resulting from the antidilution provisions thereof, the Conversion Price
as then in effect shall forthwith be readjusted to such Conversion Price as
would have been obtained had the unexercised portion of such Rights or Options
or Convertible Securities been originally issued with the exercise or conversion
price in effect following such Pricing Change. On the expiration or cancellation
of any Rights or Options that are unexercised, or the termination of the right
to convert or exchange any such Convertible Securities, if the Conversion Price
shall have been adjusted upon the issuance thereof, the Conversion Price shall
forthwith be readjusted to such Conversion Price as would have been obtained had
an adjustment been made upon the issuance of such Rights or Options or such
Convertible Securities on the basis of the issuance of only the number of shares
of Common Stock actually issued upon the exercise of such Rights or Options or
upon the conversion or exchange of such Convertible Securities. No adjustment of
the Conversion Price shall be made as a result of the actual issuance of shares
of Common Stock on the exercise of any such Rights or Options or the conversion
or exchange of any such Convertible Securities.
(h) If the Corporation at any time after the Initial Issue
Date fixes a record date for an Extraordinary Distribution to the holders of its
outstanding Common Stock, whether by way of dividend, spin-off or otherwise,
then, at the option of the Corporation in its sole discretion, either:
(i) the Corporation will make adequate provision so
that each share of Convertible Preferred Stock outstanding on the first day that
the Common Stock trades ex-distribution shall have the right to receive, only
upon conversion of such share of Convertible Preferred Stock and in addition to
any shares of Common Stock issuable upon conversion thereof, the Extraordinary
Distribution to which such share of Convertible Preferred Stock would have been
entitled as if such share of Convertible Preferred Stock was converted into
Common Stock immediately prior to the record date for the Extraordinary
Distribution; or
(ii) the Conversion Price in effect immediately
before the close of business on the day that the Common Stock trades
ex-distribution will be adjusted by multiplying (A) the Conversion Price by (B)
a fraction, the numerator of which will be the Quoted Price on the Trading Day
immediately before the day that the Common Stock trades ex-distribution and the
denominator of which will be the sum of (x) the Quoted Price on the Trading
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Day immediately before the day that the Common Stock trades ex-distribution,
plus (y) the Fair Value of the Extraordinary Distribution distributed to each
share of Common Stock.
(i) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Conversion Price. Any adjustments which by reason of this Section 5(i) are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 5 shall be made to
the nearest cent or to the nearest 1/100th of a share, as the case may be.
(j) The Corporation shall take no action that would cause any
adjustment under this Section 5 that would reduce the Conversion Price below the
par value of the Common Stock.
(k) Whenever the Conversion Price is adjusted, the Corporation
shall promptly mail to holders of Convertible Preferred Stock, first class,
postage prepaid, a notice of the adjustment and a certificate from the
Corporation's independent public accountants briefly stating the facts requiring
the adjustment and the manner of computing it.
(l) The Corporation from time to time may, by a vote of
two-thirds of the Board of Directors, reduce the Conversion Price then in effect
by any amount for any period of time if the period is at least twenty (20)
Business Days and if the reduction is irrevocable during the period, but in no
event may the Conversion Price be less than the par value of a share of Common
Stock. Whenever the Conversion Price is so reduced, the Corporation shall mail
to holders of Convertible Preferred Stock a notice of the reduction. The
Corporation shall mail the notice first class, postage prepaid, at least 20 days
before the date the reduction in the Conversion Price is to take effect. The
notice shall state the reduced Conversion Price and the period it will be in
effect. A Conversion Price reduced pursuant to this Section 5(l) is subject to
any further changes or adjustments required by Section 5(f), Section 5(g) and
Section 5(h) above.
(m) All shares of Convertible Preferred Stock converted
pursuant to this Section 5 shall be retired and shall be restored to the status
of authorized and unissued shares of preferred stock, without designation as to
series and may thereafter be reissued as shares of any series of preferred stock
other than Convertible Preferred Stock.
(n) Notwithstanding anything contained in this Certificate of
Designations to the contrary, there shall be no adjustment of the Conversion
Price in the case of the issuance of any securities of the Corporation in a
reorganization, acquisition or other similar transaction except as specifically
set forth in this Section 5 or Section 13. If any action or transaction would
require adjustment of the Conversion Price pursuant to one or more sections of
this Certificate of Designations, only one adjustment shall be made and such
adjustment shall be the amount of adjustment that has the highest absolute
value.
6. Mandatory Conversion.
(a) The Corporation shall have the right, at its option and in
its sole discretion, to cause all, but not less than all, of the then
outstanding shares of the Convertible Preferred Stock to be automatically
converted into shares of Common Stock, with any resulting fractional shares of
Common Stock to be settled in accordance with Section 5(c). For the purposes of
conversion, each share of Convertible Preferred Stock shall be valued at the
Liquidation Preference plus all accrued
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and unpaid dividends on such share through the Mandatory Conversion Date, which
shall be divided by the Conversion Price in effect on the Mandatory Conversion
Date to determine the number of shares issuable upon conversion. No other
payment or adjustment for dividends shall be made upon such conversion, and upon
such conversion all unpaid dividends with respect to such converted stock shall
be deemed paid in full without regard to any record holder at any record date
for such unpaid dividends. The Corporation may exercise its right to cause a
mandatory conversion pursuant to this Section 6 only if the Quoted Price of a
share of the Common Stock equals or exceeds the applicable Mandatory Conversion
Target Price for each of the ten (10) consecutive Trading Days ending on the
last Trading Day prior to the date of the Mandatory Conversion Notice.
"Mandatory Conversion Target Price" means, for each of the Trading Days in such
ten (10) consecutive Trading Day period, the product of (x) the Conversion Price
in effect for such Trading Day, multiplied by (y) two (2).
(b) To exercise the mandatory conversion right described in
Section 6(a), the Corporation shall furnish notice of the Corporation's
intention to mandatorily convert the outstanding shares of the Convertible
Preferred Stock (the "Mandatory Conversion Notice") by first class mail to each
holder thereof, not later than the tenth (10th) day prior to the date on which
the mandatory conversion would occur (the "Mandatory Conversion Date"). The
Mandatory Conversion Date will be a date selected by the Corporation and will be
at least ten (10) days but no more than twenty-five (25) days after mailing of
the notice described in this Section 6(b) to the holders.
(c) In addition to any information required by applicable law
or regulation, the notice of a mandatory conversion described in Section 6(b)
shall state, as appropriate: (i) the Mandatory Conversion Date; (ii) the number
of shares of Common Stock to be issued upon conversion of each share of the
Convertible Preferred Stock; (iii) the number of shares of the Convertible
Preferred Stock to be converted; and (iv) that dividends on the shares of the
Convertible Preferred Stock to be converted will cease to be payable on the
Mandatory Conversion Date.
(d) On the Mandatory Conversion Date, dividends will cease to
be payable on the Convertible Preferred Stock, and all rights of any holder with
respect to the shares of the Convertible Preferred Stock, including the rights,
if any, to receive distributions of the Corporation's assets (including, but not
limited to, the Liquidation Preference) or notices from the Corporation, will
terminate, except only for the rights of any such holder to (i) receive physical
certificates (if applicable) for the number of whole shares of Common Stock into
which such holder's shares of the Convertible Preferred Stock have been
converted and cash in lieu of any fractional share, and (ii) exercise the rights
to which it is entitled as a holder of Common Stock into which such holder's
shares of the Convertible Preferred Stock have been mandatorily converted.
7. Mandatory Redemption by the Corporation.
(a) On the Redemption Date, the Corporation will be obligated,
subject to having legally available funds, to redeem all outstanding shares of
Convertible Preferred Stock at the Redemption Price. No other payment or
adjustment for dividends shall be made upon such redemption, and upon such
redemption all unpaid dividends with respect to such redeemed stock shall be
deemed paid in full without regard to any record holder at any record date for
such unpaid dividends.
14
(b) The Corporation may, at its option and in its sole
discretion, elect to pay the Redemption Price in cash or in shares of Common
Stock with each such share valued at the Redemption Market Price, or in any
combination of cash or shares of Common Stock.
The Corporation's right to redeem Convertible Preferred Stock, in whole
or in part, with shares of Common Stock is subject to the following conditions
(which conditions are for the sole benefit of the holders of Convertible
Preferred Stock and may be waived by the holders of a majority of the then
outstanding shares of Convertible Preferred Stock in their sole discretion):
(i) such shares shall be duly authorized, validly
issued, fully paid and nonassessable; and
(ii) the Corporation shall have listed such shares of
Common Stock on the principal United States securities exchange on which the
Common Stock is then listed.
If such conditions (which conditions the Corporation shall use its
reasonable best efforts to satisfy) are not so satisfied with respect to a
holder prior to the close of business on the Redemption Date, the Corporation
will pay the Redemption Price of such holder's shares of Convertible Preferred
Stock entirely in cash unless the Corporation does not have funds legally
available or the Corporation's credit facilities or other contractual
obligations prohibit it from paying the Redemption Price in cash. The
Corporation may not change the form or components or percentages of components
of consideration to be paid for the shares of Convertible Preferred Stock once
the Corporation has given any notice that it is required to give to holders of
the Convertible Preferred Stock, except as described in the first sentence of
this Section.
The Corporation shall provide notice to the holders of the Convertible
Preferred Stock reasonably promptly upon the determination of the actual number
of shares of Common Stock deliverable upon any redemption of the Convertible
Preferred Stock.
(c) Payment of the Redemption Price for Convertible Preferred
Stock is conditioned upon book-entry transfer of or physical delivery of the
certificates representing the Convertible Preferred Stock, together with
necessary endorsements, to the Corporation's transfer agent at any time after
delivery of the notice of redemption. Payment of the Redemption Price for the
Convertible Preferred Stock will be made promptly following the later of five
(5) Business Days following the Redemption Date and the time of book-entry
transfer of or physical delivery of certificates representing the Convertible
Preferred Stock.
(d) If the transfer agent holds money or securities sufficient
to pay the Redemption Price of Convertible Preferred Stock on the Business Day
following the Redemption Date in accordance with the terms of this Certificate
of Designations, then, immediately after the Redemption Date, the Convertible
Preferred Stock will cease to be outstanding, whether or not book-entry transfer
is made or certificates representing the Convertible Preferred Stock are
delivered to the transfer agent. At such time, all rights of a holder as a
holder of Convertible Preferred Stock shall terminate, other than the right to
receive the Redemption Price upon delivery of the certificates representing the
Convertible Preferred Stock.
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8. Voting Rights.
In addition to any voting rights provided by law, the holders
of shares of Convertible Preferred Stock shall have the following voting rights:
(a) So long as any shares of the Convertible Preferred Stock
remain outstanding, each share of Convertible Preferred Stock shall entitle the
holder thereof to vote on all matters voted on by holders of Common Stock,
voting together with the Common Stock as a single class (together with all other
classes and series of stock of the Corporation that are entitled to vote as a
single class with the Common Stock) at all meetings of the stockholders of the
Corporation, or by written consent of the minimum number of shares required to
take such action pursuant to Section 228 of the Delaware General Corporation
Law. In any vote with respect to which the Convertible Preferred Stock shall
vote with the holders of Common Stock as a single class together with all other
classes and series of stock of the Corporation that are entitled to vote as a
single class with the Common Stock, each share of Convertible Preferred Stock
shall entitle the holder thereof to cast the number of votes equal to the number
of votes which could be cast in such vote by a holder of the number of shares of
Common Stock into which such share of Convertible Preferred Stock is convertible
on the record date of such vote. Such voting right of the holders of the
Convertible Preferred Stock may be exercised at any annual meeting of
stockholders, any special meeting of stockholders, or by written consent of the
minimum number of shares required to take such action pursuant to Section 228 of
the Delaware General Corporation Law.
(b) On any matter on which the holders of Convertible
Preferred Stock are entitled by law or under the Certificate of Incorporation to
vote separately as a class, each such holder shall be entitled to one vote for
each share held, and such matter shall be determined by a majority of the votes
cast unless the General Corporation Law of the State of Delaware or this
Certificate of Designations requires approval by a higher percentage.
(c) The Corporation will not, without the affirmative vote or
consent of the holders of at least two-thirds (2/3) of the issued and
outstanding shares of Convertible Preferred Stock voting together as a separate
class:
(i) amend, modify, alter, repeal or waive the
application of (including by way of merger, consolidation,
combination or otherwise) any provision of this Certificate of
Designations, the Certificate of Incorporation or by-laws of
the Corporation or any of its Subsidiaries in any manner that
adversely affects the powers, rights, preferences or
privileges of the holders of the Convertible Preferred Stock
or enter into any agreement or take any other corporate action
(or permit any of its Subsidiaries to enter into any agreement
or take any corporate action) which would in any way amend,
modify, alter, repeal or waive the powers, rights, preferences
or privileges of the Convertible Preferred Stock; or
(ii) increase or decrease the authorized shares of
Convertible Preferred Stock.
16
9. Headings of Subdivisions. The headings of the various subdivisions hereof are
for convenience of reference only and shall not affect the interpretation of any
of the provisions hereof.
10. Severability of Provisions. If any voting powers, preferences and relative,
participating, optional and other special rights of the Convertible Preferred
Stock and qualifications, limitations and restrictions thereof set forth in this
resolution (as such resolution may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other voting powers, preferences and relative, participating,
optional and other special rights of the Convertible Preferred Stock and any
qualifications, limitations and restrictions thereof set forth in this
resolution (as so amended) which can be given effect without the invalid,
unlawful or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of the Convertible Preferred
Stock or qualifications, limitations and restrictions thereof shall,
nevertheless, remain in full force and effect, and no voting powers, preferences
and relative, participating, optional or other special rights of the Convertible
Preferred Stock or qualifications, limitations and restrictions thereof herein
set forth shall be deemed dependent upon any other such voting powers,
preferences and relative, participating, optional or other special rights of
Convertible Preferred Stock or qualifications, limitations and restrictions
thereof unless so expressed herein.
11. Record Holders. The Corporation and the transfer agent for the Convertible
Preferred Stock may deem and treat the record holder of any shares of
Convertible Preferred Stock as the true and lawful owner thereof for all
purposes, and neither the Corporation nor the transfer agent shall be affected
by any notice to the contrary.
12. Notice. Except as may otherwise be provided for herein, all notices referred
to herein shall be in writing, and all notices hereunder shall be deemed to have
been given upon receipt, in the case of a notice of conversion given to the
Corporation as contemplated in Section 5(b) hereof, or, in all other cases, upon
the earlier of receipt of such notice or three Business Days after the mailing
of such notice if sent by registered mail (unless first-class mail shall be
specifically permitted for such notice under the terms of this Certificate of
Designations) with postage prepaid, addressed: if to the Corporation, to its
offices at 2525 Stemmons Freeway, Dallas, Texas 75207, Attention: Secretary or
to an agent of the Corporation designated as permitted by this Certificate, or,
if to any holder of the Convertible Preferred Stock, to such holder at the
address of such holder of the Convertible Preferred Stock as listed in the stock
record books of the Corporation (which may include the records of any transfer
agent for the Convertible Preferred Stock); or to such other address as the
Corporation or holder, as the case may be, shall have designated by notice
similarly given.
13. Merger or Consolidation.
(a) In connection with a merger or consolidation in which the
Corporation is not the surviving corporation (other than any Liquidation Event),
(i) the shares of Convertible Preferred Stock shall become shares of the
surviving corporation or other entity resulting from such merger or
consolidation (the "New Shares") with powers, preferences and relative
participating, optional or other special rights and qualifications, limitations
and restrictions similar to those of the Convertible Preferred Stock immediately
prior to such merger or consolidation, with such modifications as may be deemed
appropriate by the Board of Directors or the board of directors of the surviving
entity, so long as, the economic value of the New Shares is substantially
equivalent to or higher than, in the good faith opinion of the Board of
Directors or the board of directors of the surviving entity, the
17
value of the shares of Convertible Preferred Stock immediately prior to such
merger or consolidation and (ii) the New Shares shall be convertible into, in
lieu of the shares of Common Stock otherwise issuable upon conversion of
Convertible Preferred Stock, such shares of stock, securities and/or other
property as would have been issued or payable in such merger or consolidation in
exchange for the number of shares of Common Stock that would have been issuable
immediately prior to such merger or consolidation upon conversion of the
Convertible Preferred Stock replaced by such New Shares.
(b) The provisions of Section 13(a) shall be inapplicable in
the event that the Convertible Preferred Stock (i) is converted under Section 5
prior to or simultaneously with the closing of the merger or consolidation
referred to in paragraph (a) above, (ii) is subject to mandatory conversion
under Section 6 or (iii) is subject to redemption under Section 7.
* * * * *
18
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations to be duly executed by its duly authorized officer this 24th day of
June, 2003.
TRINITY INDUSTRIES, INC.
By: /s/ TIMOTHY R. WALLACE
-------------------------------------
Timothy R. Wallace
Chairman, President and Chief
Executive Officer