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EXHIBIT 4.9
ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
UNITED COMPANIES FINANCIAL CORPORATION
On June 12, 1995, pursuant to the authority granted to and vested in
the Board of Directors (hereinafter called the "Board of Directors" or the
"Board") of United Companies Financial Corporation, a corporation organized and
existing under the Louisiana Business Corporation Law (hereinafter called the
"Corporation"), and in accordance with the provisions of Section 33 of the
Louisiana Business Corporation Law and Article III of the Corporation's
Articles of Incorporation (the "Articles of Incorporation") and in view of the
fact that no shares of the Corporation's 6.5% Cumulative Convertible Preferred
Stock, Series A, Issue Price $25.00 per share authorized under present Section
6 of Article III remain outstanding, the Executive Committee of the Board of
Directors, duly authorized by the Board of Directors, voted in favor of
amending Article III of the Articles of Incorporation to (i) eliminate present
Section 6 thereof in its entirety and (ii) to add a new Section 6 thereto in
order to create a new series of preferred stock, par value $2.00, of the
Corporation and to state the designation and number of shares, and to fix the
preferences, limitations and relative rights thereof, all as set forth
hereinafter.
"SECTION 6 -- 6 3/4% PRIDES, CONVERTIBLE PREFERRED STOCK, PAR VALUE
$2.00 PER SHARE.
PARAGRAPH 1. DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "6 3/4% PRIDES(SM), Convertible Preferred Stock, par value
$2.00 per share" (the "PRIDES"). The PRIDES are Preferred Redeemable Increased
Dividend Equity Securities(SM). The authorized number of shares constituting
the PRIDES shall be 1,955,000.
(SM)Service mark of Merrill Lynch & Co., Inc.
PARAGRAPH 2. DIVIDENDS.
(a) The holders of outstanding shares of PRIDES shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds
legally available therefor, cumulative preferential dividends from June 16,
1995, at the rate per share of $2.97 per annum, and no more, payable quarterly
for each share of PRIDES, payable in arrears on the 1st day of each January,
April, July and October, respectively (each such date being hereinafter
referred to as a "Dividend Payment Date"), or, if any Dividend Payment Date is
not a business day, then the Dividend Payment Date shall be the next succeeding
business day; provided, however, that, with respect to any dividend period
during which a redemption occurs, the Corporation may, at its option, declare
accrued dividends to, and pay such dividends on, the redemption date, in which
case such dividends would be payable on the redemption date in cash to the
holders of the shares of PRIDES as of the record date for such dividend payment
and such accrued dividends would not be included in the calculation of the
related Call Price (as hereinafter defined). Each dividend on the shares of
PRIDES shall be payable to holders of record as they appear on the stock
register of the Corporation on such record date, not less than 10 nor more than
60 days preceding the payment dates thereof, as shall be fixed by the Board of
Directors. The first dividend payment shall be for the period from June 16,
1995 to but excluding July 1, 1995 and
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the first dividend will be payable on July 1, 1995. Dividends (or amounts
equal to accrued and unpaid dividends) payable on shares of PRIDES for any
period less than a full quarterly dividend period will be computed on the basis
of a 360-day year of twelve 30-day months and the actual number of days elapsed
in any period less than one month.
Dividends on the shares of PRIDES will accrue whether or not there are
funds legally available for the payment of such dividends and whether or not
such dividends are declared on a daily basis from the previous Dividend Payment
Date. Accumulated unpaid dividends shall not bear interest. Dividends will
cease to accrue in respect of shares of PRIDES on the Mandatory Conversion Date
(as hereinafter defined) or on the date of their earlier conversion or
redemption.
The shares of PRIDES will rank on a parity, both as to payment of
dividends and distribution of assets upon liquidation, with any future
preferred stock issued by the Corporation (the "Preferred Stock") that by its
terms ranks pari passu with the shares of PRIDES.
(b) As long as any shares of PRIDES are outstanding, no dividends
for any dividend period (other than dividends payable in shares of, or
warrants, rights or options exercisable for or convertible into shares of,
Common Stock (as defined below) or any other capital stock of the Corporation
ranking junior to the shares of PRIDES as to the payment of dividends and the
distribution of assets upon liquidation ("Junior Stock") and cash in lieu of
fractional shares of such Junior Stock in connection with any such dividend)
will be paid in cash or otherwise, nor will any other distribution be made
(other than a distribution payable in Junior Stock and cash in lieu of
fractional shares of such Junior Stock in connection with any such
distribution), on any Junior Stock unless: (i) full dividends on all
outstanding shares of Preferred Stock (including the shares of PRIDES), that
does not constitute Junior Stock ("Parity Preferred Stock") have been paid, or
declared and set aside for payment, for all dividend periods terminating on or
prior to the date of such Junior Stock dividend or distribution payment to the
extent such dividends are cumulative; (ii) dividends in full, in the case of a
dividend payment with respect to Junior Stock, for any Parity Preferred Stock
dividend period commencing on or prior to the date of such Junior Stock
dividend payment or, in the case of any other distribution with respect to
Junior Stock, for the current quarterly dividend period, have been paid, or
declared and set aside for payment, on all outstanding shares of Parity
Preferred Stock to the extent such dividends are cumulative; (iii) the
Corporation has paid or set aside all amounts, if any, then or theretofore
required to be paid or set aside for all purchase, retirement, and sinking
funds, if any, for any outstanding shares of Parity Preferred Stock; and (iv)
the Corporation is not in default on any of its obligations to redeem any
outstanding shares of Parity Preferred Stock.
In addition, as long as any shares of PRIDES are outstanding, no
shares of any Junior Stock may be purchased, redeemed, or otherwise acquired by
the Corporation or any of its subsidiaries (except in connection with a
reclassification or exchange of any Junior Stock through the issuance of other
Junior Stock (and cash in lieu of fractional shares of such Junior Stock in
connection therewith) or the purchase, redemption, or other acquisition of any
Junior Stock with any Junior Stock (and cash in lieu of fractional shares of
such Junior Stock in connection therewith)) nor may any funds be set aside or
made available for any sinking fund for the
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purchase or redemption of any Junior Stock unless: (i) full dividends on all
outstanding shares of Parity Preferred Stock have been paid, or declared and
set aside for payment, for all dividend periods terminating on or prior to the
date of such purchase, redemption or acquisition to the extent such dividends
are cumulative; (ii) the Corporation has paid or set aside all amounts, if any,
then or theretofore required to be paid or set aside for all purchase,
retirement, and sinking funds, if any, for any outstanding shares of Parity
Preferred Stock; and (iii) the Corporation is not in default on any of its
obligations to redeem any outstanding shares of Parity Preferred Stock.
Subject to the provisions described above, such dividends or other
distributions (payable in cash, property, or Junior Stock) as may be determined
by the Board of Directors may be declared and paid on the shares of any Junior
Stock from time to time and Junior Stock may be purchased, redeemed or
otherwise acquired by the Corporation or any of its subsidiaries from time to
time. In the event of the declaration and payment of any such dividends or
other distributions, the holders of such Junior Stock will be entitled, to the
exclusion of holders of any outstanding Parity Preferred Stock, to share
therein according to their respective interests.
As long as any shares of PRIDES are outstanding, dividends for any
dividend period or other distributions may not be paid on any outstanding
shares of Parity Preferred Stock (other than dividends or other distributions
payable in Junior Stock and cash in lieu of fractional shares of such Junior
Stock in connection therewith), unless either: (a) (i) full dividends on all
outstanding shares of Parity Preferred Stock have been paid, or declared and
set aside for payment, for all dividend periods terminating on or prior to the
date of such Parity Preferred Stock dividend or distribution payment to the
extent such dividends are cumulative; (ii) dividends in full, in the case of a
dividend payment, for any Parity Preferred Stock dividend period commencing on
or prior to the date of such dividend payment or, in the case of any other
distribution, for the current quarterly dividend period, have been paid, or
declared and set aside for payment, on all outstanding shares of Parity
Preferred Stock to the extent such dividends are cumulative: (iii) the
Corporation has paid or set aside all amounts, if any, then or theretofore
required to be paid or set aside for all purchase, retirement, and sinking
funds, if any, for any outstanding shares of Parity Preferred Stock; and (iv)
the Corporation is not in default on any of its obligations to redeem any
outstanding shares of Parity Preferred Stock; or (b) any such dividends are
declared and paid pro rata so that the amounts of any dividends declared and
paid per share on outstanding shares of PRIDES and each other share of such
Parity Preferred Stock will in all cases bear to each other the same ratio that
accrued and unpaid dividends (including any accumulation with respect to unpaid
dividends for prior dividend periods, if such dividends are cumulative) per
share of outstanding shares of PRIDES and such other outstanding shares of
Parity Preferred Stock bear to each other.
In addition, as long as any shares of PRIDES are outstanding, the
Corporation may not purchase, redeem or otherwise acquire any Parity Preferred
Stock (except with any Junior Stock and cash in lieu of fractional shares of
such Junior Stock in connection therewith) unless: (i) full dividends on Parity
Preferred Stock have been paid, or declared and set aside for payment, for all
dividend periods terminating on or prior to the date of such Parity Preferred
Stock purchase, redemption or other acquisition payment to the extent such
dividends are cumulative; (ii) the
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Corporation has paid or set aside all amounts, if any, then or theretofore
required to be paid or set aside for all purchase, retirement, and sinking
funds, if any, for any Parity Preferred Stock; and (iii) the Corporation is not
in default on any of its obligations to redeem any Parity Preferred Stock.
(c) Any dividend payment made on the shares of PRIDES shall first be
credited against the earliest accrued but unpaid dividend due with respect to
the shares of PRIDES.
(d) All dividends paid with respect to the shares of PRIDES shall be
paid pro rata to the holders entitled thereto.
(e) Holders of the shares of PRIDES shall be entitled to receive
dividends in preference to and in priority over any dividends upon any shares
of the Corporation ranking junior to the shares of PRIDES as to dividends, but
subject to the rights of holders of shares of the Corporation having a
preference and a priority over the payment of dividends on the shares of
PRIDES.
PARAGRAPH 3. REDEMPTIONS AND CONVERSIONS.
(a) Mandatory Conversion. On July 1, 2000 (the "Mandatory
Conversion Date"), each outstanding share of PRIDES shall convert automatically
(the "Mandatory Conversion") into shares of Common Stock at the Common
Equivalent Rate (as hereinafter defined) in effect on the Mandatory Conversion
Date and the right to receive an amount in cash equal to all accrued and unpaid
dividends on such share of PRIDES (other than previously declared dividends
payable to a holder of record on a prior date) to the Mandatory Conversion
Date, whether or not declared, out of funds legally available for the payment
of dividends, subject to the right of the Corporation to redeem the shares of
PRIDES on or after July 1, 1998 (the "Initial Redemption Date") and prior to
the Mandatory Conversion Date, as described below, and subject to the
conversion of the shares of PRIDES at the option of the holder at any time
prior to the Mandatory Conversion Date. The Common Equivalent Rate is
initially one share of Common Stock for each share of PRIDES and is subject to
adjustment as set forth below. Dividends on the shares of PRIDES shall cease
to accrue and such shares shall cease to be outstanding on the Mandatory
Conversion Date. The Corporation shall make such arrangements as it deems
appropriate for the issuance of certificates representing shares of Common
Stock and for the payment of cash in respect of such accrued and unpaid
dividends, if any, or cash in lieu of fractional shares, if any, in exchange
for and contingent upon surrender of certificates representing the shares of
PRIDES, and the Corporation may defer the payment of dividends on such shares
of Common Stock and the voting thereof until, and make such payment and voting
contingent upon, the surrender of such certificates representing the shares of
PRIDES, provided that the Corporation shall give the holders of the shares of
PRIDES such notice of any such actions as the Corporation deems appropriate and
upon such surrender such holders shall be entitled to receive such dividends
declared and paid on such shares of Common Stock subsequent to the Mandatory
Conversion Date. Amounts payable in cash in respect of the shares of PRIDES or
in respect of such shares of Common Stock shall not bear interest.
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(b) Redemption by the Corporation.
(i) Right to Redeem. Shares of PRIDES are not redeemable by
the Corporation prior to the Initial Redemption Date. At any time and from
time to time on or after the Initial Redemption Date and prior to the Mandatory
Conversion Date, the Corporation shall have the right to redeem, in whole or in
part, the outstanding shares of PRIDES. Upon any such redemption, the
Corporation shall deliver to the holders of shares of PRIDES, in accordance
with the provisions of this Section 6, in exchange for each share so redeemed,
the greater of (A) a number of shares of Common Stock equal to the Call Price
in effect on the redemption date, divided by the Current Market Price (as
hereinafter defined) of the Common Stock determined as of the second trading
day immediately preceding the Notice Date (as hereinafter defined) or (B) .826
of a share of Common Stock (subject to adjustment in the same manner as the
Optional Conversion Rate (as hereinafter defined) is adjusted). The public
announcement of any call for redemption shall be made prior to, or at the time
of, the mailing of the notice of such call to holders of shares of PRIDES as
described below. If fewer than all the outstanding shares of PRIDES are to be
redeemed, shares of PRIDES to be redeemed shall be selected by the Corporation
from outstanding shares of PRIDES not previously redeemed by lot or pro rata
(as nearly as may be practicable) or by any other method determined by the
Board of Directors in its sole discretion to be equitable. As used in this
subparagraph (b), the term "Notice Date" with respect to any notice given by
the Corporation in connection with a redemption of shares of PRIDES means the
date on which first occurs either the public announcement of such redemption or
the commencement of mailing of such notice to the holders of shares of PRIDES.
(ii) Notice of Redemption. The Corporation shall provide notice of
any redemption of the shares of PRIDES to holders of record of PRIDES to be
called for redemption not less than 15 nor more than 60 days prior to the date
fixed for such redemption. Such notice shall be provided by mailing notice of
such redemption first class postage prepaid, to each holder of record of shares
of PRIDES to be redeemed, at such holder's address as it appears on the stock
register of the Corporation; provided, however, that neither failure to give
such notice nor any defect therein shall affect the validity of the proceeding
for the redemption of any shares of PRIDES to be redeemed except as to the
holders to whom the Corporation has failed to give said notice or whose notice
was defective.
Each such notice shall state, as appropriate, the following and may
contain such other information as the Corporation deems advisable:
(A) the redemption date;
(B) that all outstanding shares of PRIDES are to be
redeemed or, in the case of a call for redemption of
fewer than all outstanding shares of PRIDES, the
number of such shares held by such holder to be
redeemed;
(C) the number of shares of Common Stock deliverable upon
redemption of each share of PRIDES to be redeemed
and, if applicable, the Call Price
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and the Current Market Price used to calculate such
number of shares of Common Stock;
(D) the place or places where certificates for such
shares are to be surrendered for redemption; and
(E) that dividends on the shares of PRIDES to be redeemed
shall cease to accrue on such redemption date (except
as otherwise provided herein).
(iii) Deposit of Shares and Funds. The Corporation's obligation to
deliver shares of Common Stock and provide funds upon redemption in accordance
with this Paragraph 3 shall be deemed fulfilled if, on or before a redemption
date, the Corporation shall irrevocably deposit, with a bank or trust company,
or an affiliate of a bank or trust company, having an office or agency in New
York City and having a capital and surplus of at least $50,000,000, or shall
set aside or make other reasonable provision for the issuance of such number of
shares of Common Stock as are required to be delivered by the Corporation
pursuant to this Paragraph 3 upon the occurrence of the related redemption (and
for the payment of cash in lieu of the issuance of fractional share amounts and
accrued and unpaid dividends payable in cash on the shares to be redeemed as
and to the extent provided by this Paragraph 3). Any interest accrued on such
funds shall be paid to the Corporation from time to time. Any shares of Common
Stock or funds so deposited and unclaimed at the end of two years from such
redemption date shall be repaid and released to the Corporation, after which
the holder or holders of such shares of PRIDES so called for redemption shall
look only to the Corporation for delivery of such shares of Common Stock or
funds.
(iv) Surrender of Certificates; Status. Each holder of shares of
PRIDES to be redeemed shall surrender the certificates evidencing such shares
(properly endorsed or assigned for transfer, if the Board of Directors shall so
require and the notice shall so state) to the Corporation at the place
designated in the notice of such redemption and shall thereupon be entitled to
receive certifIcates evidencing shares of Common Stock and to receive any funds
payable pursuant to this Paragraph 3 following such surrender and following the
date of such redemption. In case fewer than all the shares represented by any
such surrendered certificate are called for redemption, a new certificate shall
be issued at the expense of the Corporation representing the unredeemed shares.
If such notice of redemption shall have been given, and if on the date fixed
for redemption, shares of Common Stock and funds necessary for the redemption
shall have been irrevocably either set aside by the Corporation separate and
apart from its other funds or assets in trust for the account of the holders of
the shares to be redeemed or converted (and so as to be and continue to be
available therefor) or deposited with a bank or a trust company or an affiliate
thereof as provided herein or the Corporation shall have made other reasonable
provision therefor, then, notwithstanding that the certificates evidencing any
shares of PRIDES so called for redemption or subject to conversion shall not
have been surrendered, the shares represented thereby so called for redemption
shall be deemed no longer outstanding, dividends with respect to the shares so
called for redemption shall cease to accrue on the date fixed for redemption
(except that holders of shares of PRIDES at the close of business on a record
date for any payment of dividends shall be entitled to receive the dividend
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payable on such shares on the corresponding Dividend Payment Date
notwithstanding the redemption of such shares following such record date and
prior to such Dividend Payment Date) and all rights with respect to the shares
so called for redemption shall forthwith after such date cease and terminate,
except for the rights of the holders to receive the shares of Common Stock and
funds, if any, payable pursuant to this Paragraph 3 without interest upon
surrender of their certificates therefor (unless the Corporation defaults on
the delivery of such shares or the payment of such funds). Holders of shares
of PRIDES that are redeemed shall not be entitled to receive dividends declared
and paid on such shares of Common Stock, and such shares of Common Stock shall
not be entitled to vote, until such shares of Common Stock are issued upon the
surrender of the certificates representing such shares of PRIDES and upon such
surrender such holders shall be entitled to receive such dividends declared and
paid on such shares of Common Stock subsequent to such redemption date without
interest thereon.
(c) Conversion at Option of Holder. Shares of PRIDES are
convertible, in whole or in part, at the option of the holders thereof, at any
time prior to the Mandatory Conversion Date, unless previously redeemed, into
shares of Common Stock at a rate of .826 of a share of Common Stock for each
share of PRIDES (the "Optional Conversion Rate") (equivalent to a conversion
price of $53.24 per share of Common Stock), subject to adjustment as set forth
below. The right to convert shares of PRIDES called for redemption shall
terminate immediately prior to the close of business on the redemption date.
Conversion of shares of PRIDES at the option of the holder may be
effected by delivering certificates evidencing such shares, together with
written notice of conversion and a proper assignment of such certificates to
the Corporation or in blank, to the office or agency to be maintained by the
Corporation for that purpose (and, if applicable, cash payment of an amount
equal to the dividend payable on such shares), and otherwise in accordance with
conversion procedures established by the Corporation. Each optional conversion
shall be deemed to have been effected immediately prior to the close of
business on the date on which the foregoing requirements shall have been
satisfied. The conversion shall be at the Optional Conversion Rate in effect
at such time and on such date.
Holders of shares of PRIDES at the close of business on a record date
for any payment of declared dividends shall be entitled to receive the dividend
payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion of such shares following such record date and
prior to the corresponding Dividend Payment Date. However, shares of PRIDES
surrendered for conversion after the close of business on a record date for any
payment of dividends and before the opening of business on the next succeeding
Dividend Payment Date must be accompanied by payment in cash of an amount equal
to the dividend thereon which is to be paid on such Dividend Payment Date
(unless such shares have been called for redemption on a redemption date
between such record date and such Dividend Payment Date). A holder of shares
of PRIDES called for redemption on July 1, 1998 or any other Dividend Payment
Date thereafter will receive the dividend on such shares payable on that date
and will be able to convert such shares after the record date for such dividend
without paying an amount equal to such dividend to the Corporation upon
conversion. Except as provided above, upon any optional conversion of shares
of PRIDES, the Corporation shall make no payment or allowance for
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unpaid dividends, whether or not in arrears, on converted shares of PRIDES or
for previously declared dividends or distributions on the shares of Common
Stock issued upon such conversion.
(d) Common Equivalent Rate and Optional Conversion Rate Adjustments.
The Common Equivalent Rate and the Optional Conversion Rate shall be each
subject to adjustment from time to time as provided below in this subparagraph
(d).
(i) If the Corporation shall, after June 16, 1995:
(A) pay a stock dividend or make a
distribution with respect to its
Common Stock in shares of such
Common Stock,
(B) subdivide or split its outstanding
Common Stock into a greater number
of shares,
(C) combine its outstanding shares of
Common Stock into a smaller number
of shares, or
(D) issue by reclassification of its
shares of Common Stock any shares of
common stock of the Corporation,
then, in any such event, the Common
Equivalent Rate and the Optional Conversion
Rate in effect immediately prior to such
event shall each be adjusted so that the
holder of any shares of PRIDES shall
thereafter be entitled to receive, upon
Mandatory Conversion or upon conversion at
the option of the holder, the number of
shares of Common Stock of the Corporation
which such holder would have owned or been
entitled to receive immediately following any
event described above had such shares of
PRIDES been converted immediately prior to
such event or any record date with respect
thereto. Such adjustment shall become
effective at the opening of business on the
business day next following the record date
for determination of stockholders entitled to
receive such dividend or distribution, in the
case of a dividend or distribution, and shall
become effective immediately after the
effective date, in the case of a subdivision
split, combination or reclassification. Such
adjustment shall be made successively.
(ii) If the Corporation shall, after June 16,
1995, issue rights (other than Rights issued
pursuant to the Rights Plan (as defined
below)) or warrants to all holders of its
Common Stock entitling them (for a period not
exceeding 45 days from the date of such
issuance) to subscribe for or purchase shares
of Common Stock at a price per share less
than the Current Market Price of the Common
Stock,
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then, in any such event unless such rights or
warrants are issued to holder of shares of
PRIDES on a pro rata basis with the shares of
Common Stock based on the Common Equivalent
Rate on the date immediately preceding such
issuance, the Common Equivalent Rate and
Optional Conversion Rate shall each be
adjusted by multiplying the Common Equivalent
Rate and the Optional Conversion Rate, in
effect immediately prior to the date of
issuance of such rights or warrants, by a
fraction, of which the numerator shall be the
number of shares of Common Stock outstanding
on the date of issuance of such rights or
warrants, immediately prior to such issuance,
plus the number of additional shares of
Common Stock offered for subscription or
purchase pursuant to such rights or warrants,
and of which the denominator shall be the
number of shares of Common Stock outstanding
on the date of issuance of such rights or
warrants, immediately prior to such issuance,
plus the number of additional shares of
Common Stock which the aggregate offering
price of the total number of shares of Common
Stock so offered for subscription or purchase
pursuant to such rights or warrants would
purchase at such Current Market Price
(determined by multiplying such total number
of shares by the exercise price of such
rights or warrants and dividing the product
so obtained by such Current Market Price).
Such adjustment shall become effective at the
opening of business on the business day next
following the record date for the
determination of stockholders entitled to
receive such rights or warrants. To the
extent that shares of Common Stock are not
delivered after the expiration of such rights
or warrants, the Common Equivalent Rate and
the Optional Conversion Rate shall each be
readjusted to the Common Equivalent Rate and
the Optional Conversion Rate which would then
be in effect had the adjustments been made
upon the issuance of such rights or warrants
upon the basis of delivery of only the number
of shares of Common Stock actually delivered.
Such adjustment shall be made successively.
(iii) If the Corporation shall, after June 16,
1995, pay a dividend or make a distribution
to all holders of its Common Stock of
evidences of its indebtedness, cash or other
assets (including capital stock of the
Corporation but excluding any cash dividends
or distributions, other than Extraordinary
Cash Distributions (as hereinafter defined),
and dividends referred to in subparagraph (i)
above) or shall issue to all holders of its
Common Stock rights or warrants to subscribe
for or purchase any of its securities (other
than Rights issued pursuant to the Rights
Plan and those referred to in subparagraph
(ii) above), then unless such dividend is
paid
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or distribution is made to each holder of
shares of PRIDES on a pro rata basis with the
shares of Common Stock based on the Common
Equivalent Rate on the date immediately
preceding such payment or distribution, in
any such event, the Common Equivalent Rate
and the Optional Conversion Rate shall each
be adjusted by multiplying the Common
Equivalent Rate and the Optional Conversion
Rate in effect on the record date mentioned
below, by a fraction of which the numerator
shall be the Current Market Price per share
of the Common Stock on the record date for
the determination of stockholders entitled to
receive such dividend or distribution, and of
which the denominator shall be such Current
Market Price per share of Common Stock less
the fair market value (as determined by the
Board of Directors, whose determination shall
be conclusive, and described in a resolution
adopted with respect thereto) as of such
record date of the portion of the assets or
evidences of indebtedness so distributed or
of such subscription rights or warrants
applicable to one share of Common Stock.
Such adjustment shall become effective on the
opening of business on the business day next
following the record date for the
determination of stockholders entitled to
receive such dividend or distribution. Such
adjustment shall be made successively. As
used in this subparagraph (d), the term
"Extraordinary Cash Distributions" means,
with respect to any cash dividend or
distribution paid on any date, the amount, if
any, by which all cash dividends and cash
distributions on the Common Stock paid during
the consecutive 12-month period ending on and
including such date (other than cash
dividends and cash distributions for which an
adjustment to the Common Equivalent Rate and
the Optional Conversion Rate was previously
made) exceeds, on a per share of Common Stock
basis, 10% of the average of the daily
Closing Prices of the Common Stock over such
consecutive 12-month period.
(iv) Any shares of Common Stock issuable in
payment of a dividend shall be deemed to have
been issued immediately prior to the close of
business on the record date for such dividend
for purposes of calculating the number of
outstanding shares of Common Stock under
subparagraph (ii) above.
(v) The Corporation shall also be entitled to
make upward adjustments in the Common
Equivalent Rate, the Optional Conversion Rate
and the Call Price, as it in its sole
discretion shall determine to be advisable,
in order that any stock dividends,
subdivisions of shares, distribution of
rights to purchase stock or securities, or
distribution of securities convertible into
or exchangeable for stock
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(or any transaction which could be treated as
any of the foregoing transactions pursuant to
Section 305 of the Internal Revenue Code of
1986, as amended) made by the Corporation to
its stockholders after June 16, 1995 shall
not be taxable.
(vi) In any case in which subparagraph 3(d) shall
require that an adjustment as a result of any
event become effective at the opening of
business on the business day next following a
record date and the date fixed for conversion
pursuant to subparagraph 3(a) or redemption
pursuant to subparagraph 3(b) occurs after
such record date, but before the occurrence
of such event, the Corporation may, in its
sole discretion, elect to defer the following
until after the occurrence of such event: (A)
issuing to the holder of any converted or
redeemed shares of PRIDES the additional
shares of Common Stock issuable upon such
conversion or redemption over the shares of
Common Stock issuable before giving effect to
such adjustments and (B) paying to such
holder any amount in cash in lieu of a
fractional share of Common Stock pursuant to
subparagraph 3(g).
(vii) All adjustments to the Common Equivalent Rate
and the Optional Conversion Rate shall be
calculated to the nearest 1/100th of a share
of Common Stock. No adjustment in the Common
Equivalent Rate or the Optional Conversion
Rate shall be required unless such adjustment
would require an increase or decrease of at
least one percent therein; provided, however,
that any adjustment which by reason of this
subparagraph (vii) is not required to be made
shall be carried forward and taken into
account in any subsequent adjustment.
(e) Adjustment for Consolidation or Merger. In case of any
consolidation or merger to which the Corporation is a party (other than a
merger or consolidation in which the Corporation is the surviving or continuing
corporation and in which the Common Stock outstanding immediately prior to the
merger or consolidation remains unchanged), or in case of any sale or transfer
to another corporation of the property of the Corporation as an entirety or
substantially as an entirety, or in case of any statutory exchange of
securities with another corporation (other than in connection with a merger or
acquisition), proper provision shall be made so that each share of PRIDES
shall, after consummation of such transaction, be subject to (i) conversion at
the option of the holder into the kind and amount of securities, cash or other
property receivable upon consummation of such transaction by a holder of the
number of shares of Common Stock into which such share of PRIDES might have
been converted immediately prior to consummation of such transaction, (ii)
conversion on the Mandatory Conversion Date into the kind and amount of
securities, cash or other property receivable upon consummation of such
transaction by a holder of the number of shares of Common Stock into which such
share of PRIDES would have converted if the conversion on the Mandatory
Conversion Date had occurred immediately prior
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12
to the date of consummation of such transaction, plus the right to receive cash
in an amount equal to all accrued and unpaid dividends on such shares of PRIDES
(other than previously declared dividends payable to a holder of record as of a
prior date), (iii) redemption on any redemption date in exchange for the kind
and amount of securities, cash or other property receivable upon consummation
of such transaction by a holder of the number of shares of Common Stock that
would have been issuable at the Call Price in effect on such redemption date
upon a redemption of such share immediately prior to consummation of such
transaction, assuming that, if the Notice Date for such redemption is not prior
to such transaction, the Notice Date had been the date of such transaction and
assuming in each case that such holder of Common Stock failed to exercise
rights of election, if any, as to the kind or amount of securities, cash or
other property receivable upon consummation of such transaction (provided that
if the kind or amount of securities, cash or other property receivable upon
consummation of such transaction is not the same for each non-electing share,
then the kind and amount of securities, cash or other property receivable upon
consummation of such transaction for each non-electing share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
non-electing shares). The kind and amount of securities into or for which the
shares of PRIDES shall be convertible or redeemable after consummation of such
transaction shall be subject to adjustment as described in the immediately
preceding paragraph following the date of consummation of such transaction.
The Corporation may not become a party to any such transaction unless the terms
thereof are consistent with the foregoing or consistent with clause (iii) of
Paragraph 7(c).
For purposes of the immediately preceding paragraph and subparagraph
3(g)(iii), any sale or transfer to another corporation of property of the
Corporation which did not account for at least 50% of the consolidated net
income of the Corporation for its most recent fiscal year ending prior to the
consummation of such transaction shall not in any event be deemed to be a sale
or transfer of the property of the Corporation as an entirety or substantially
as an entirety.
(f) Notice of Adjustments. Whenever the Common Equivalent Rate and
Optional Conversion Rate are adjusted as herein provided, the Corporation
shall:
(i) forthwith compute the adjusted Common
Equivalent Rate and Optional Conversion Rate
in accordance herewith and prepare a
certificate signed by an officer of the
Corporation setting forth the adjusted Common
Equivalent Rate and the Optional Conversion
Rate, the method of calculation thereof in
reasonable detail and the facts requiring
such adjustment and upon which such
adjustment is based, which certificate shall
be conclusive, final and binding evidence of
the correctness of the adjustment, and file
such certificate forthwith with the transfer
agent for the shares of PRIDES and the Common
Stock; and
(ii) make a prompt public announcement and mail a
notice to the holders of the outstanding
shares of PRIDES stating that the Common
Equivalent Rate and the Optional Conversion
Rate have
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13
been adjusted, the facts requiring such
adjustment and upon which such adjustment is
based and setting forth the adjusted Common
Equivalent Rate and Optional Conversion Rate,
such notice to be mailed at or prior to the
time the Corporation mails an interim
statement to its stockholders covering the
fiscal quarter during which the facts
requiring such adjustment occurred, but in
any event within 45 days of the end of such
fiscal quarter.
(g) Notices. In case, at any time while any of the shares of PRIDES
are outstanding,
(i) the Corporation shall declare a dividend (or
any other distribution) on its Common Stock,
excluding any cash dividends; or
(ii) the Corporation shall authorize the issuance
to all holders of its Common Stock of rights
or warrants to subscribe for or purchase
shares of its Common Stock or of any other
subscription rights or warrants; or
(iii) the Corporation shall authorize any
reclassification of its Common Stock (other
than a subdivision or combination thereof)
or of any consolidation or merger to which
the Corporation is a party and for which
approval of any stockholders of the
Corporation is required (except for a merger
of the Corporation into one of its
subsidiaries solely for the purpose of
changing the corporate domicile of the
Corporation to another state of the United
States and in connection with which there is
no substantive change in the rights or
privileges of any securities of the
Corporation other than changes resulting from
differences in the corporate statutes of the
then existing and the new state of domicile),
or of the sale or transfer to another
corporation of the property of the
Corporation as an entirety or substantially
as an entirety; or
(iv) the Corporation shall authorize the voluntary
or involuntary dissolution, liquidation or
winding up of the Corporation;
then the Corporation shall cause to be filed at each office or agency
maintained for the purpose of conversion of the shares of PRIDES, and shall
cause to be mailed to the holders of shares of PRIDES at their last addresses
as they shall appear on the stock register, at least 10 days before the date
hereinafter specified (or the earlier of the dates hereinafter specified, in
the event that more than one date is specified), a notice stating (A) the date
on which a record is to be taken for the purpose of such dividend,
distribution, rights or warrants, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution, rights or warrants are to be determined, or (B) the
date on which any such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common
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14
Stock of record shall be entitled to exchange their Common Stock for
securities or other property (including cash), if any, deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. The failure to give or receive the notice required
by this subparagraph (g) or any defect therein shall not affect the legality or
validity of any such dividend, distribution, right or warrant or other action.
(h) Effect of Conversions and Redemptions. The person or persons in
whose name or names any certificate or certificates for shares of Common Stock
shall be issuable upon any conversion or redemption shall be deemed to have
become on the date of any such conversion or redemption the holder or holders
of record of the shares represented thereby; provided, however, that any such
surrender on any date when the stock transfer books of the Corporation shall be
closed shall constitute the person or persons in whose name or names the
certificate or certificates for such shares are to be issued as the record
holder or holders thereof for all purposes at the opening of business on the
next succeeding day on which such stock transfer books are open.
(i) No Fractional Shares. No fractional shares or script
representing fractional shares of Common Stock shall be issued upon the
redemption or conversion of any shares of PRIDES. In lieu of any fractional
share otherwise issuable in respect of the aggregate number of shares of PRIDES
of any holder which are redeemed or converted on any redemption date or upon
Mandatory Conversion or any optional conversion, such holder shall be entitled
to receive an amount in cash (computed to the nearest cent) equal to the same
fraction of the (i) Current Market Price as of the second trading day
immediately preceding the Notice Date, in the case of redemption, or (ii)
Closing Price of the Common Stock determined (A) as of the fifth Trading Date
immediately preceding the Mandatory Conversion Date, in the case of Mandatory
Conversion, or (B) as of the second Trading Date immediately preceding the
effective date of conversion, in the case of an optional conversion by a
holder. If more than one share shall be surrendered for conversion or
redemption at one time by or for the same holder, the number of full shares of
Common Stock issuable upon conversion thereof shall be computed on the basis of
the aggregate number of shares of PRIDES so surrendered or redeemed.
(j) Reissuance. Shares of PRIDES that have been issued and
reacquired in any manner, including shares purchased, exchanged, redeemed or
converted, shall not be reissued as part of PRIDES and shall (upon compliance
with any applicable provisions of the laws of the State of Louisiana) have the
status of authorized and unissued shares of the Preferred Stock undesignated as
to series and may be redesignated and reissued as part of any series of
Preferred Stock.
(k) Definitions. As used in this Section 6:
(i) the term "business day" shall mean any day
other than a Saturday, Sunday, or a day on
which banking institutions in the State of
Louisiana are authorized or obligated by law
or executive order to close or are closed
because of a banking moratorium or otherwise;
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15
(ii) the term "Call Price" of each share of PRIDES
shall be the sum of (x) $45.188 on and after
July 1, 1998, to and including September 30,
1998, $45.040 on and after October 1, 1998,
to and including December 31, 1998, $44.891
on and after January 1, 1999, to and
including March 31, 1999, $44.743 on and
after April 1, 1999, to and including June
30, 1999, $ 44.594 on and after July 1, 1999,
to and including September 30, 1999, $44.446
on and after October 1, 1999, to and
including December 31, 1999, $44.297 on and
after January 1, 2000, to and including March
31, 2000, $44.149 on and after April 1, 2000,
to and including May 31, 2000, and $44.00 on
and after June 1, 2000, through July 1, 2000
and (y) all accrued and unpaid dividends
thereon to but not including the redemption
date (other than previously declared
dividends payable to a holder of record as of
a prior date);
(iii) the term "Closing Price" on any day shall
mean the last reported sales price on such
day or, in case no such sale takes place on
such day, the average of the reported closing
high and low quotations, in each case on the
Nasdaq National Market, or, if the Common
Stock is not listed on the Nasdaq National
Market, on the principal national securities
exchange on which the Common Stock is listed
or admitted to trading, or, if not listed or
admitted to trading on any national
securities exchange, the average of the high
bid and low-asked quotations of the Common
Stock in the over-the-counter market on the
day in question as reported by the National
Quotation Bureau Incorporated, or a similarly
generally accepted reporting service, or, if
no such quotations are available, the fair
market value of the Common Stock as
determined by any New York Stock Exchange
member firm selected from time to time by the
Board of Directors for such purpose;
(iv) the term "Current Market Price" price per
share of Common Stock at any date shall be
deemed to be the lesser of (x) the average of
the daily Closing Prices for the fifteen
consecutive Trading Dates ending on and
including the date in question or (y) the
Closing Price of the Common Stock for such
date of determination; provided, however, if
any event that results in an adjustment of
the Common Equivalent Rate occurs during such
fifteen-day period, the Current Market Price
as determined pursuant to the foregoing shall
be appropriately adjusted to reflect the
occurrence of such event; and
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16
(v) the term "Trading Date" shall mean a date on
which the Nasdaq National Market (or any
successor thereto) is open for the
transaction of business.
(l) Payment of Taxes. The Corporation shall pay any and all
documentary, stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of shares of Common Stock on the redemption or conversion of
shares of PRIDES pursuant to this Paragraph 3; provided, however, that the
Corporation shall not be required to pay any tax which may be payable in
respect of any registration of transfer involved in the issue or delivery of
shares of Common Stock in a name other than that of the registered holder of
shares of PRIDES redeemed or converted or to be redeemed or converted, and no
such issue or delivery shall be made unless and until the person requesting
such issue 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.
(m) Reservation of Common Stock. The Corporation shall at all times
reserve and keep available, free from preemptive rights, out of the aggregate
of its authorized but unissued Common Stock and/or its issued Common Stock held
in its treasury, for the purpose of effecting any Mandatory Conversion of the
shares of PRIDES or any conversion of the shares of PRIDES at the option of the
holder, the full number of shares of Common Stock then deliverable upon any
such conversion of all outstanding shares of PRIDES.
(n) Rights. Holders of the PRIDES whose shares of PRIDES are
converted into shares of Common Stock may be entitled to receive Rights (as
defined in that certain Rights Agreement dated as of July 27, 1994 between the
Corporation and Chemical Bank, as Rights Agent, a copy of which along with the
statement of the Corporation pursuant to Section 51C of the Louisiana Business
Corporation Law, was filed in the offices of the Secretary of State of the
State of Louisiana on August 1, 1994 (the "Rights Plan")) in accordance with
the terms and conditions of the Rights Plan. Holders of PRIDES who do not
convert their shares of PRIDES into Common Stock prior to a Distribution Date
(as defined in the Rights Plan) will not receive any Rights and therefore will
not be entitled to participate in the Rights Plan.
PARAGRAPH 4. LIQUIDATION RIGHTS.
(a) In the event of the liquidation, dissolution, or winding up of
the business of the Corporation, whether voluntary or involuntary, the holders
of shares of PRIDES then outstanding, after payment or provision for payment of
the debts and other liabilities of the Corporation and the payment or provision
for payment of any distribution on any shares of the Corporation having a
preference and a priority over the shares of PRIDES on liquidation, and before
any distribution to the holders of Junior Stock, shall be entitled to be paid
out of the assets of the Corporation available for distribution to its
stockholders an amount per share of PRIDES in cash equal to the sum of (i)
$44.00 plus (ii) all accrued and unpaid dividends thereon. In the event the
assets of the Corporation available for distribution to the holders of the
shares of PRIDES upon any dissolution, liquidation or winding up of the
Corporation shall be insufficient to pay in full the liquidation payments
payable to the holders of outstanding shares of PRIDES and of all other series
of Parity Preferred Stock, the holders of shares of PRIDES and of all
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17
other series of Parity Preferred Stock shall share ratably in such distribution
of assets in proportion to the amount which would be payable on such
distribution if the amounts to which the holders of outstanding shares of
PRIDES and the holders of outstanding shares of such Parity Preferred Stock
were paid in full. Except as provided in this Paragraph 4, holders of PRIDES
shall not be entitled to any distribution in the event of liquidation,
dissolution or winding up of the affairs of the Corporation.
(b) For the purposes of this Paragraph 4, none of the following shall
be deemed to be a voluntary or involuntary liquidation, dissolution or winding
up of the Corporation:
(i) the sale, lease, transfer or exchange of all
or substantially all of the assets of the
Corporation; or
(ii) the consolidation or merger of the
Corporation with one or more other
corporations (whether or not the Corporation
is the corporation surviving such
consolidation or merger).
PARAGRAPH 5. DEFINITION. As used in this Section 6, the term "Common
Stock" shall mean any stock of any class of the Corporation which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation and which is not subject to redemption by the Corporation.
However, shares of Common Stock issuable upon conversion of shares of PRIDES
shall include only shares of the class designated as Common Stock as of June
16, 1995, or shares of the Corporation of any class or classes resulting from
any reclassification or reclassification thereof and which have no preference
in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation and which
are not subject to redemption by the Corporation; provided, however, that, if
at any time there shall be more than one such resulting class, the shares of
each such class then so issuable shall be substantially in the proportion which
the total number of shares of such class resulting from such reclassification
bears to the total number of shares of all classes resulting from all such
reclassification.
PARAGRAPH 6. NO PREEMPTIVE RIGHTS. The holders of shares of PRIDES
shall have no preemptive rights, including preemptive rights with respect to
any shares of capital stock or other securities of the Corporation convertible
into or carrying rights or options to purchase any such shares.
PARAGRAPH 7. VOTING RIGHTS.
(a) The holders of shares of PRIDES shall have the right with the
holders of Common Stock to vote in the election of directors and upon each
other matter coming before any meeting of the stockholders on the basis of 4/5
of a vote for each share held. The holders of shares of PRIDES and the holders
of Common Stock shall vote together as one class except as otherwise set forth
herein or as otherwise provided by law or by the Articles of Incorporation of
the Corporation.
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(b) If at any time dividends payable on the shares of PRIDES or any
other series of Preferred Stock are in arrears and unpaid in an aggregate
amount equal to or exceeding the aggregate amount of dividends payable thereon
for six quarterly dividend periods, or if any other series of Preferred Stock
shall be entitled for any other reason to exercise voting rights, separate from
the Common Stock, to elect any Directors of the Corporation ("Preferred Stock
Directors"), the holders of the shares of PRIDES, voting separately as a class
with the holders of all other series of Preferred Stock upon which like voting
rights have been conferred and are exercisable, with each share of PRIDES
entitled to vote on this and other matters upon which Preferred Stock votes us
a group, shall have the right to vote for the election of two Preferred Stock
Directors of the Corporation, such Directors to be in addition to the number of
Directors constituting the Board of Directors immediately prior to the accrual
of such right. Such right of the holders of shares of PRIDES to elect two
Preferred Stock Directors shall, when vested, continue until all dividends in
arrears on the shares of PRIDES and such other series of Preferred Stock shall
have been paid in full and the right of any other series of Preferred Stock to
exercise voting rights, separate from the Common Stock, to elect Preferred
Stock Directors shall terminate or have terminated and, when so paid, and any
such termination occurs or has occurred, such right of the holders of shares of
PRIDES to elect two Preferred Stock Directors separately as a class shall
cease, subject always to the same provisions for the vesting of such right of
the holders of the shares of PRIDES to elect two Preferred Stock Directors in
the case of future dividend defaults.
The term of office of each Director elected pursuant to the preceding
paragraph shall terminate on the earlier of (i) the next annual meeting of
stockholders at which a successor shall have been elected and qualified or (ii)
the termination of the right of the holders of shares of PRIDES and such other
series of Preferred Stock to vote for Directors pursuant to the preceding
paragraph. Vacancies on the Board of Directors resulting from the death,
resignation or other cause of any such Director shall be filled exclusively by
no less than two-thirds of the remaining Directors and the Director so elected
shall hold office until a successor is elected and qualified.
(c) For as long as any shares of PRIDES remain outstanding, the
affirmative consent of the holders of at least two-thirds thereof actually
voting (voting separately as a class) given in person or by proxy, at any
annual meeting or special meeting of the shareholders called for such purpose,
shall be necessary to (i) amend, alter or repeal any of the provisions of the
Articles of Incorporation of the Corporation which would adversely affect the
powers, preferences or rights of the holders of the shares of PRIDES then
outstanding or reduce the minimum time required for any notice to which holders
of shares of PRIDES then outstanding may be entitled; provided, however, that
any such amendment, alteration or repeal that would authorize, create or
increase the authorized amount of any additional shares of Junior Stock or any
other shares of stock (whether or not already authorized) ranking on a parity
with the shares of PRIDES shall be deemed not to adversely affect such powers,
preferences or rights and shall not be subject to approval by the holders of
shares of PRIDES; and provided further that clause (i) shall not be applicable
to the amendment, alteration or repeal of any provisions of the Articles of
Incorporation of the Corporation approved at a meeting of the shareholders the
record date of which is prior to the issuance of any shares of PRIDES; (ii)
authorize or create, or increase the authorized amount of, any capital stock,
or any security convertible into capital stock, of any
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19
class ranking senior to PRIDES as to payment of dividends or the distribution
of assets upon liquidation, dissolution or winding up of the Corporation; or
(iii) merge or consolidate with or into any other corporation, unless each
holder of the shares of PRIDES immediately preceding such merger or
consolidation shall have the right either to (A) receive or continue to hold in
the resulting corporation the same number of shares, with substantially the
same rights and preferences, as correspond to the shares of PRIDES so held or
(B) convert into shares of Common Stock at the Common Equivalent Rate in effect
on the date immediately preceding the announcement of any such merger or
consolidation.
There is no limitation on the issuance by the Corporation of Parity
Preferred Stock or of any class ranking junior to the shares of PRIDES.
Notwithstanding the provisions summarized in the preceding two
paragraphs, however, no such approval described therein of the holders of the
shares of PRIDES shall be required to authorize an increase in the number of
authorized shares of Preferred Stock or if, at or prior to the time when such
amendment, alteration, or repeal is to take effect or when the authorization,
creation or increase of any such senior stock or security is to be made, or
when such consolidation or merger, liquidation, dissolution or winding up is to
take effect, as the case may be, provision is made for the redemption of all
shares of PRIDES at the time outstanding."
Executed this 13th day of June, 1995, by the undersigned officers
of the Corporation in the presence of the undersigned competent witnesses.
WITNESSES: UNITED COMPANIES
FINANCIAL CORPORATION
______________________________ By: /s/ J. TERRELL BROWN
_____________________________________
J. Terrell Brown
Chief Executive Officer and President
______________________________
By: /s/ SHERRY E. ANDERSON
__________________________________
Sherry E. Anderson, Secretary
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STATE OF LOUISIANA
PARISH OF EAST BATON ROUGE
I, Lee C. Kantrow, a Notary Public duly qualified and commissioned
in and for the Parish and State aforesaid, do hereby certify that on
this 13th day of June, 1995, personally appeared before me J. Terrell Brown
and Sherry E. Anderson, who, being by me first duly sworn, declared and
acknowledged that they are the Chief Executive Officer and President and
Secretary, respectively, of United Companies Financial Corporation, that they
signed the foregoing document as Chief Executive Officer and President and
Secretary, respectively, of that Corporation and the statements contained
therein are true.
/s/ Lee C. Kantrow
-----------------------------
Notary Public
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