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EXHIBIT 3.1
VERIO INC.
CERTIFICATE OF DESIGNATIONS OF THE POWERS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS
OF SERIES A 6.75% CONVERTIBLE PREFERRED STOCK AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF
PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
Verio Inc. (the "Company"), a corporation organized and existing under
the General Corporation Law of the State of Delaware, does hereby certify that,
the board of directors of the Company (the "Board of Directors") and pursuant to
authority conferred upon the Finance Committee (the "Finance Committee") of the
Board of Directors by the Company's Restated Certificate of Incorporation, as
amended (hereinafter referred to as the "Restated Certificate of
Incorporation"), and pursuant to the provisions of Sections 141(c)(1) and 151 of
the General Corporation Law of the State of Delaware, the Finance Committee duly
approved and adopted the following resolution which resolution remains in full
force and effect on the date hereof:
RESOLVED that, the Board of Directors and pursuant to the authority
vested in the Finance Committee by the Board of Directors and by the Restated
Certificate of Incorporation, the Finance Committee, hereby designate, create,
authorize and provide for the issuance of shares of Series A 6.75% Convertible
Preferred Stock, par value $0.001 per share, with a liquidation preference of
$50.00 per share, having the designations, powers, preferences, relative,
participating, optional and other special rights and the qualifications,
limitations and restrictions thereof as follows:
1. DESIGNATION
There is hereby created out of the authorized and unissued shares of
Preferred Stock of the Company a series of Preferred Stock designated as the
"Series A 6.75% Convertible Preferred Stock" (the "Convertible Preferred
Stock"). The number of shares constituting the Convertible Preferred Stock shall
be 7,200,000. The liquidation preference of the Convertible Preferred Stock
shall be $50.00 per share (the "Liquidation Preference").
Capitalized terms used herein but not defined shall have the meanings
assigned to them in Section 13.
2. RANKING
The Convertible Preferred Stock will, with respect to dividend
distributions and distributions on liquidation, winding up and dissolution,
rank: (i) senior to all classes of Common Stock, and to each other class of
Capital Stock of the Company or series of Preferred Stock of the Company
established hereafter by the Board of Directors of the Company, the terms of
which do not expressly provide that it ranks senior to, or on a parity with, the
Convertible Preferred Stock as to dividend distributions and distributions upon
liquidation, winding up and dissolution of the Company (collectively referred
to,
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together with all classes of Common Stock of the Company, as "Junior Stock");
(ii) on a parity with any additional Preferred Stock issued by the Company in
the future and any other class of Capital Stock of the Company or series of
Preferred Stock of the Company established hereafter by the Board of Directors
of the Company, the terms of which expressly provide that such class or series
will rank on a parity with the Convertible Preferred Stock as to dividend
distributions and distributions on liquidation, winding up and dissolution
(collectively referred to as "Parity Stock"); and (iii) junior to each class of
Capital Stock of the Company or series of Preferred Stock of the Company
established hereafter by the Board of Directors of the Company, the terms of
which expressly provide that such class or series will rank senior to the
Convertible Preferred Stock as to dividend distributions and distributions on
liquidation, winding up and dissolution of the Company (collectively referred to
as "Senior Stock").
3. DIVIDENDS; ADDITIONAL DIVIDENDS
(i) General. Subject to the rights of holders of Senior Stock and
Parity Stock, the Holders of the outstanding shares of Convertible Preferred
Stock will be entitled to receive on or after the Deposit Expiration Date, or
earlier if the Deposit Account is terminated (whichever is applicable, the
"Regular Dividend Commencement Date"), when, as and if declared by the Board of
Directors of the Company, out of funds legally available therefor, cumulative
dividends on each share of the Convertible Preferred Stock at a rate per annum
equal to 6.75% of the Liquidation Preference per share, accumulating from the
Regular Dividend Commencement Date, payable quarterly in arrears, on each
November 1, February 1, May 1 and August 1 (each, a "Dividend Payment Date").
The Company will not make any dividend payments on the Convertible Preferred
Stock until the first Dividend Payment Date that occurs more than 10 days after
the Regular Dividend Commencement Date. Dividends shall be paid to the Holders
of record as they appear on the stock register of the Company on each record
date established by the Board of Directors of the Company (the "Dividend Payment
Record Date") not more than 60 days nor less than 10 days preceding a Dividend
Payment Date. Notwithstanding anything to the contrary herein contained, the
Company shall not be required to declare or pay a dividend if another person
(including, without limitation, any of its subsidiaries) pays an amount to the
Holders equal to the amount of such dividend on behalf of the Company and, in
such event, the dividend will be deemed paid for all purposes.
(ii) Additional Dividends. (a) In addition to the dividends
described in the preceding sentence, Holders of outstanding shares of
Convertible Preferred Stock will be entitled to Additional Dividends, when, as
and if declared by the Board of Directors of the Company, out of funds legally
available therefor, with respect to the shares of Convertible Preferred Stock
constituting Transfer Restricted Securities, which Additional Dividends shall
accrue if any of the following events occur (each such event in clauses (1) and
(2) below being herein called a "Registration Default"):
(1) if by November 17, 1999, the Shelf Registration
Statement has not been filed with the Commission, or has not been declared
effective by the Commission by February 15, 2000; or
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(2) if after the Shelf Registration Statement is
filed and declared effective (A) the Shelf Registration Statement thereafter
ceases to be effective, without being succeeded immediately by a replacement
shelf registration statement filed and declared effective; or (B) the Shelf
Registration Statement or the related prospectus ceases to be usable for a
period of time exceeding any Suspension Period applicable to Transfer Restricted
Securities in connection with resales of Transfer Restricted Securities in
accordance with and during the periods specified herein either (x) any event
occurs as a result of which the related prospectus forming part of such Shelf
Registration Statement would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein in the
light of the circumstances under which they were made not misleading, or (y) it
shall be necessary to amend such Shelf Registration Statement or supplement the
related prospectus, to comply with the Securities Act or the Exchange Act or the
respective rules thereunder.
(b) Additional Dividends shall accrue on the shares of
Convertible Preferred Stock with respect to the first quarterly period
immediately following the occurrence and continuation of a Registration Default
at a rate of 0.25% per quarterly period. The rate of the Additional Dividends
will increase by an additional 0.25% per quarterly period with respect to each
subsequent quarterly period until all Registration Defaults have been cured.
After all Registration Defaults have been cured, the rate at which dividends
will accrue on the Convertible Preferred Stock will return to the regular
dividend rate of 6.75% per annum.
(c) The Company shall be permitted to suspend the use of the
prospectus which is a part of the Shelf Registration Statement for a period (a
"Suspension Period") not to exceed 60 days in any 90-day period, or to the
extent of multiple Suspension Periods not to exceed 90 days in any 12-month
period, if the Board of Directors determines, in its good faith judgment that
the disclosure of an event or development, or the filing of a required filing
with the Commission would have a material adverse impact on the Company, or if
the disclosure of an event or development or the filing of a required filing
with the Commission otherwise related to a material business transaction that
has not yet been publicly disclosed.
(d) Any amounts of Additional Dividends due pursuant to
clauses (1) or (2) of paragraph (a) above will be payable on the regular
Dividend Payment Dates with respect to the Convertible Preferred Stock. The
amount of Additional Dividends will be determined by multiplying the Additional
Dividends rate by the aggregate liquidation preference of the outstanding shares
of Convertible Preferred Stock, multiplied by a fraction, the numerator of which
is the number of days such Additional Dividend rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360.
(iii) Form of Payment. Any dividend or Additional Dividend on the
Convertible Preferred Stock shall be, at the option of the Company, payable (a)
in cash, (b) through the issuance of a number of shares of Common Stock
(hereinafter referred to as "Dividend Common Stock") equal to the total dividend
or Additional Dividend amount divided by the applicable Market Value Amount as
of the applicable Dividend
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Payment Record Date, or (c) any combination of (a) and (b). The Transfer Agent
shall have the authority to aggregate any fractional shares of Common Stock that
are issued as dividends or Additional Dividends, and to sell them at the best
available price and distribute the proceeds to the Holders thereof in proportion
to their respective interests. The Company shall reimburse the Transfer Agent
for any expenses incurred with respect to such sale, including brokerage
commissions. If the Company is not entitled to pay cash for fractional shares,
it shall pay cash to the Holder for the fractional shares when it becomes
legally and contractually able to pay such cash.
(iv) Accrual of Dividends. Dividends and Additional Dividends
shall accrue whether or not the Company has earnings or profits, whether or not
there are funds legally available for the payment of such dividends or
Additional Dividends and whether or not dividends or Additional Dividends, as
the case may be, are declared. The Company shall not declare, pay or set apart
for payment any dividends upon an outstanding share of Convertible Preferred
Stock with respect to any dividend period unless all dividends for all preceding
dividend periods have been declared and paid upon all outstanding shares of
Convertible Preferred Stock, or declared and a sufficient sum set apart for the
payment of such dividend.
(v) Accumulation. Dividends and Additional Dividends, if any,
shall accumulate to the extent such dividends or Additional Dividends are not
paid on the Dividend Payment Date for the period to which they relate. No
interest or sum of money in lieu of interest will be payable in respect of any
accumulated and unpaid dividends or Additional Dividends.
(vi) Pro Rata Payment. All dividends and Additional Dividends paid
with respect to shares of the Convertible Preferred Stock pursuant to Sections
3(i) and (ii) above shall be paid pro rata to the Holders entitled thereto so
that the amount of dividends paid per share on the Convertible Preferred Stock
is the same.
(vii) No Payment of Dividends. No dividends or distributions shall
be declared, made or paid upon, or any sum set apart for the payment of
dividends upon, any outstanding share of Junior Stock or Parity Stock, nor shall
any shares of Junior Stock or Parity Stock be redeemed, purchased or otherwise
acquired or retired for any consideration (or any monies paid to or made
available for a sinking fund for the redemption of any such securities) by the
Company or its subsidiaries unless full cumulative dividends on all the
outstanding shares of Convertible Preferred Stock have been paid or declared, or
declared and a sum sufficient for the payment thereof set apart for such payment
for all dividend periods terminating on or prior to the date of such
declaration, payment, redemption, purchase or acquisition. Notwithstanding the
foregoing, the following shall be permitted: (a) in the case of Junior Stock, a
dividend payable solely in shares of Junior Stock or options, warrants or rights
to purchase Junior Stock, or in the case of Parity Stock, a dividend payable
solely in shares of Junior Stock or Parity Stock or options, warrants or rights
to purchase Junior Stock or Parity Stock; (b) in the case that monies for such
dividends, distributions, redemptions, purchases, or other acquisitions are
derived from the proceeds of the offering of such securities or a substantially
concurrent offering of related securities; and (c) in the case that cash
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payments in lieu of fractional shares are made by the Company pursuant to any
stock split, warrant, option or other similar agreement.
(viii) Parity Stock. Notwithstanding anything in this Certificate
of Designation to the contrary, if full dividends have not been declared and
paid or set apart on the Convertible Preferred Stock and any Parity Stock,
dividends may be declared and paid on the Convertible Preferred Stock and Parity
Stock so long as the dividends are declared and paid pro rata so that the
amounts of dividends declared per share on the Convertible Preferred Stock and
Parity Stock shall in all cases bear to each other the same ratio that accrued
and unpaid dividends per share on the shares of Convertible Preferred Stock and
such Parity Stock bear to each other, provided, that if such dividends are paid
in cash on such Parity Stock, dividends will also be paid in cash on the
Convertible Preferred Stock.
(ix) Computation of Dividend Payment. Dividends and Additional
Dividends payable on the Convertible Preferred Stock for any period greater or
less than a full quarterly dividend period shall be computed on the basis of a
360-day year consisting of twelve 30-day months. If a Dividend Payment Date is
not a Business Day, payment of dividends and Additional Dividends shall be made
on the next succeeding Business Day, and dividends and Additional Dividends
accruing for the intervening period shall be paid on the next succeeding
Dividend Payment Date.
4. CONVERSION
(i) General. Subject to and upon compliance with this Section 4
and Section 5, each share of Convertible Preferred Stock will be convertible at
the option of the Holder thereof into such number of fully paid and
non-assessable shares of Common Stock as equals the Liquidation Preference
divided by the Conversion Price of $96.5625, adjusted as described in this
Section 4 and Section 5. All accumulated and unpaid dividends (if declared) on
the Convertible Preferred Stock, which have accumulated since the Regular
Dividend Commencement Date and for which the applicable Dividend Payment Date is
prior to the date of conversion, may at the Company's election, be paid in cash
or by issuing that whole number of fully paid and non-assessable shares of
Common Stock equal to the amount of accumulated and unpaid dividends divided by
the Market Value Amount as of the conversion date, or any combination of the
two. In case a share of Convertible Preferred Stock is earlier called for
redemption, such conversion right in respect of the share of Convertible
Preferred Stock so called shall terminate at the close of business on the date
immediately prior to the applicable Redemption Date and will be lost if not
exercised prior to that time, unless the Company defaults in making the payment
due upon redemption.
(ii) Procedures for Conversion. (a) To convert the Convertible
Preferred Stock, the Holder of one or more shares of Convertible Preferred Stock
to be converted shall surrender the certificate or certificates representing
such shares at the offices of the Transfer Agent or at any of the offices or
agencies to be maintained for such purpose by the Company accompanied by the
funds, if any, required by paragraph (ii)(c) below and accompanied by written
notice of conversion in the form of
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Exhibit B. Such notice shall also state the name or names, together with the
address or addresses, in which the certificate or certificates for shares of
Common Stock which shall be issuable in such conversion shall be issued. Each
certificate representing one or more shares of Convertible Preferred Stock
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the name in which such shares are registered,
be accompanied by instruments of transfer, in form satisfactory to the Company,
duly executed by the Holder or his duly authorized attorney and an amount
sufficient to pay any transfer or similar tax. As promptly as practicable after
the surrender of certificates representing such shares of Convertible Preferred
Stock and the receipt of such notice, instruments of transfer and funds, if any,
as aforesaid, the Company shall issue and shall deliver at such office or agency
to such Holder, or as designated in such Holder's written instructions, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such shares of Convertible Preferred Stock in
accordance with the provisions of this Section 4 and a check or cash in respect
of any fractional interest in a share of Common Stock arising upon such
conversion, as provided in paragraph (iii) below.
(b) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which certificates
representing such shares of Convertible Preferred Stock shall have been
surrendered and such notice (and any applicable instruments of transfer and any
required taxes) received by the Company as aforesaid, and the person or persons
in whose name or names any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become the
holder or holders of record of the shares represented thereby at such time on
such date. Such conversion shall be at the Conversion Price in effect at such
time on such date, unless the stock transfer books of the Company shall be
closed on that date, in which event such person or persons shall be deemed to
have become such holder or holders of records at the close of business on the
next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
certificates representing such shares of Convertible Preferred Stock shall have
been surrendered and such notice received by the Company.
(c) Holders of Convertible Preferred Stock at the close of
business on a Dividend Payment Record Date will be entitled to receive an amount
equal to the dividend and Additional Dividend, if any, payable on such shares on
the corresponding Dividend Payment Date notwithstanding the conversion of such
shares following such Dividend Payment Record Date and prior to such Dividend
Payment Date; provided, however, that the Convertible Preferred Stock
surrendered for conversion during the period between the close of business on
any Dividend Payment Record Date and the opening of business on the
corresponding Dividend Payment Date (except shares converted after the issuance
of a Redemption Notice with respect to a Redemption Date during such period or
coinciding with such Dividend Payment Date, which will be entitled to such
dividend and Additional Dividend, if any) must be accompanied by payment of an
amount equal to the dividend and Additional Dividend, if any, payable on such
shares on such Dividend Payment Date. A Holder of Convertible Preferred Stock on
a Dividend Payment Record Date who (or whose transferee) tenders any such shares
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for conversion into shares of Common Stock on the corresponding Dividend Payment
Date will receive the dividend payable by the Company on such shares of
Convertible Preferred Stock on such date, and the converting Holder need not
include payment of the amount of such dividend upon surrender of Convertible
Preferred Stock for conversion. Except as provided herein, the Company will make
no payment or allowance for unpaid dividends, whether or not in arrears, on
converted shares or for dividends on the Common Stock issued upon such
conversion.
(iii) Fractional Shares. No fractional shares of Common Stock
shall be issued upon the conversion of a share of Convertible Preferred Stock.
If more than one share of Convertible Preferred Stock shall be surrendered for
conversion at one time by the same Holder, the number of full shares of Common
Stock which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate shares of Convertible Preferred Stock so surrendered.
Instead of any fractional share of Common Stock which would otherwise be
issuable upon conversion of any shares of Convertible Preferred Stock, the
Company shall pay a cash adjustment in respect of such fraction based on the
Trading Price on the Trading Day immediately prior to the date of conversion. If
the Company is not entitled to pay cash for fractional shares, it shall pay cash
to the Holder for the fractional shares when it becomes legally and
contractually able to pay such cash.
(iv) Adjustment of Conversion Price. The Conversion Price shall be
adjusted from time to time by the Company as follows, each a "Conversion Price
Triggering Event" (the variables have the definitions set forth in paragraph (v)
below) :
(a) If the Company shall make any redemption payment or
payment of a dividend or other distribution payable in shares of Common Stock to
all holders of any class of Capital Stock of the Company, other than the
issuance of shares of Common Stock in connection with the payment (1) in
redemption for, of dividends on, or the conversion of, the Convertible Preferred
Stock or (2) to all Holders of the Convertible Preferred Stock based upon the
number of shares of Common Stock into which the Convertible Preferred Stock is
then convertible. The Conversion Price in effect immediately prior to such event
shall be adjusted pursuant to the formula: X/Y multiplied by CP=ACP.
(b) If the Company shall make any issuance to all holders of
shares of Common Stock of rights, options or warrants entitling them to
subscribe for or purchase shares of Common Stock or securities convertible into
or exchangeable for shares of Common Stock at less than Market Value as of the
date of issuance; provided, however, that no adjustment will be made with
respect to such a distribution if the Holder of shares of the Convertible
Preferred Stock would be entitled to receive such rights, options or warrants
upon conversion at any time of shares of the Convertible Preferred Stock into
Common Stock and provided, further, that if such rights, options or warrants are
only exercisable upon the occurrence of certain triggering events, then the
Conversion Price will not be adjusted until such triggering events occur. The
Conversion Price in effect immediately prior to such event shall be adjusted
pursuant to the formula: X/(X+U((MV-EP)/MV)) multiplied by CP=ACP. If any
options, warrants or other rights
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of the nature described in this paragraph (iv)(b) ("Rights") expire without
exercise or conversion, the Conversion Price will be readjusted to the
Conversion Price which would otherwise be in effect had the adjustment made upon
the issuance of such Rights been made on the basis of delivery of only the
number of shares of Common Stock actually delivered upon the exercise or
conversion of such Rights.
(c) In the case of any subdivision, combination or
reclassification of the Common Stock. The Conversion Price in effect immediately
prior to such event shall be adjusted pursuant to the formula: X/Y multiplied by
CP=ACP.
(d) If the Company shall make any distribution consisting
exclusively of cash excluding any cash distributed in a transaction for which
Section 4(x) below is applicable (which specifies that no anti-dilution
adjustment shall be made) to all holders of shares of Common Stock (which
distribution is not also being made to the Holders of Convertible Preferred
Stock based on the number of shares of Common Stock into which the Convertible
Preferred Stock is then convertible) in an aggregate amount that, combined
together with (1) all other such cash distributions made within the
then-preceding 12 months in respect of which no adjustment has been made and (2)
any cash and the fair market value of other consideration paid or payable in
respect of any tender offer by the Company or any of its subsidiaries for shares
of Common Stock concluded within the then-preceding 12 months in respect of
which no adjustment has been made, exceeds 15% of the Company's market
capitalization (as defined in paragraph (v) below) immediately prior to such
distribution. The Conversion Price in effect immediately prior to such event
shall be adjusted pursuant to the formula: CP-((Cash-15% MC)/C)=ACP. There will
be no adjustment to the Conversion Price if (Cash-15% MC) is less than or equal
to zero.
(e) In the case of the completion of a tender or exchange
offer made by the Company or any of its subsidiaries for shares of Common Stock
that involves an aggregate consideration that, together with (1) any cash and
other consideration payable in a tender or exchange offer by the Company or any
of its subsidiaries for shares of Common Stock expiring within the
then-preceding 12 months in respect of which no adjustment has been made and (2)
the aggregate amount of any such cash distributions referred to in sub-paragraph
(d) above to all holders of shares of Common Stock within the then-preceding 12
months in respect of which no adjustments have been made, exceeds 15% of the
Company's market capitalization (as defined in paragraph (v) below) immediately
prior to the expiration of such tender or exchange offer. If the foregoing event
occurs and if the tender offer price or exchange offer price per share is
greater than the Market Value, the Conversion Price in effect immediately prior
to such event shall be adjusted pursuant to the formula: CP-((TPur multiplied by
(TOff/S-MV))/(#Sh-TPur))=ACP. There will be no adjustment to the Conversion
Price if TOff/S is less than or equal to the Market Value or if TPur multiplied
by TOff/S is less than 15% MC.
(f) If the Company shall make a distribution to all holders of
Common Stock (which distribution is not also being made to the Holders of the
Convertible Preferred Stock based on the number of shares of Common Stock into
which
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the Convertible Preferred Stock is then convertible) consisting of evidences of
indebtedness, shares of Capital Stock of the Company other than Common Stock or
assets, including securities, but excluding those dividends and those issuances
of rights, options, warrants and other distributions for which an adjustment to
the Conversion Price as referred to above is applicable (other than in
connection with a merger effected solely to reflect a change in the jurisdiction
of incorporation of the Company). The Conversion Price in effect immediately
prior to such event shall be adjusted pursuant to the formula:
CP-(Value/#Sh)=ACP.
(v) Variables. In the preceding descriptions, the variables
have the following definitions:
"C" equals the total number of shares of Convertible Preferred Stock
outstanding at the time of the Conversion Price Triggering Event;
"U" equals the number of shares of Common Stock underlying all rights,
options or warrants issued to holders of Common Stock pursuant to paragraph
(iv)(b) above entitling such holders to subscribe for or purchase shares of
Common Stock or securities convertible into or exchangeable for shares of Common
Stock issued in the Conversion Price Triggering Event;
"X" equals the total number of shares of Common Stock outstanding
immediately prior to the Conversion Price Triggering Event (excluding
unexercised options, warrants or rights);
"Y" equals the total number of shares of Common Stock outstanding
immediately after the Conversion Price Triggering Event (excluding unexercised
options, warrants or rights);
"Cash" equals any distribution consisting exclusively of cash
(excluding any cash distributed upon a merger or consolidation to which
paragraph (x) below applies) to all holders of shares of Common Stock in an
aggregate amount that, combined together with (1) all other such all-cash
distributions made within the then-preceding 12 months in respect of which no
adjustment has been made and (2) any cash and the fair market value of other
consideration paid or payable in respect of any tender offer by the Company or
any of its subsidiaries for shares of any class of Common Stock concluded within
the then-preceding 12 months in respect of which no adjustment has been made
pursuant to paragraph (iv)(d);
"EP" equals the exercise price or other consideration to be paid by the
holder upon the conversion or exchange of "U";
"MC" or "market capitalization" equals the product of the then current
Trading Price of the Common Stock times the number of shares of the Common Stock
then outstanding on the record date of such distribution;
"MV" equals the Market Value per share of the Common Stock as of the
date of conversion or exchange of "U";
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"#Sh" equals the number of shares of Common Stock receiving the
distribution contemplated in paragraph (iv)(f) or subject to the tender offer
contemplated in paragraph (iv)(e);
"TOff" equals the aggregate consideration that, together with (1) any
cash or other consideration payable in a tender or exchange offer by the Company
or any of its subsidiaries for shares of Common Stock expiring within the
then-preceding 12 months in respect of which no adjustment has been made and (2)
the aggregate amount of any such all-cash distributions referred to in paragraph
(iv)(d) to all holders of shares of Common Stock within the then-preceding 12
months in respect of which no adjustments have been made;
"TOff/S" equals the TOff per share;
"TPur" equals the number of shares purchased in the tender offer;
"Value" equals the aggregate fair market value of the distribution
described in paragraph (iv)(f), as determined in good faith by the Board of
Directors of the Company;
"CP" equals the Conversion Price immediately prior to the Conversion
Price Adjustment Event;
"ACP" equals the Conversion Price immediately after the Conversion
Price Adjustment Event.
An adjustment made pursuant to paragraph (iv) shall become effective:
(A) in the case of a Conversion Price Adjustment Event described in paragraph
(iv)(a), (b), (d) or (f), immediately following the close of business on the
record date for the determination of holders of Common Stock entitled to
participate in such event; or (B) in the case of a Conversion Price Adjustment
Event described in paragraph (iv)(c), the close of business on the day upon
which such corporate action becomes effective; or (C) in the case of a
Conversion Price Adjustment Event described in paragraph (iv)(e), the close of
business on the day of the completion of such tender offer or exchange offer.
(vi) De Minimis Adjustments. No adjustment in the Conversion Price
shall be required (a) unless such adjustment would require an increase or
decrease of at least 1% in such price and (b) with respect to rights or warrants
issued pursuant to certain of the Company's employee benefit plans; provided,
however, that any adjustments which by reason of this paragraph (vi) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this paragraph (vi) shall be made
by the Company and shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be. No adjustment need be made for a
change in the par value or no par value of the Common Stock.
(vii) Reductions in Conversion Price. The Company shall be
entitled to make such reductions in the Conversion Price, in addition to those
required by this Section 4, as the Company in its discretion shall determine to
be advisable in order that any stock dividends, subdivision of shares,
distribution of rights to purchase stock or
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securities or distribution of securities convertible into or exchangeable for
stock hereafter made by the Company to its stockholders shall not be taxable to
the recipients. In the event the Company elects to make such a reduction in the
Conversion Price, the Company will comply with the requirements of Rule 14e-1
under the Exchange Act, and any other securities laws and regulations thereunder
if and to the extent that such laws and regulations are applicable in connection
with the reduction of the Conversion Price. Whenever the Conversion Price is so
decreased, the Company shall mail to Holders of record of shares of Convertible
Preferred Stock a notice of the decrease at least 15 days before the date the
decreased Conversion Price takes effect, and such notice shall state the
decreased Conversion Price.
(viii) Decreases in Conversion Price. The Company from time to
time may decrease the Conversion Price by an amount determined by the Board of
Directors or the Finance Committee and described in a notice as hereinafter
provided for any period of time if the period is at least 20 days and if the
decrease is irrevocable during such period. Whenever the Conversion Price is so
decreased, the Company shall mail to Holders of record of shares of Convertible
Preferred Stock a notice of the decrease at least 15 days before the date the
decreased Conversion Price takes effect, and such notice shall state the
decreased Conversion Price and the period it will be in effect.
(ix) Distribution of Rights or Warrants. In the event that, after
the issuance of the Convertible Preferred Stock, the Company distributes rights
or warrants (other than those referred to in paragraph (iv)(b) above) pro rata
to all holders of shares of Common Stock, so long as any such rights or warrants
have not expired or been redeemed by the Company, the Holder of any shares of
Convertible Preferred Stock surrendered for conversion will be entitled to
receive upon such conversion, in addition to the shares of Common Stock then
issuable upon such conversion (the "Conversion Shares"), a number of rights or
warrants to be determined as follows:
(a) if such conversion occurs on or prior to the date (a
"Distribution Date") for the distribution to the holders of rights or warrants
of separate certificates evidencing such rights or warrants, the same number of
rights or warrants to which a holder of a number of shares of Common Stock equal
to the number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions applicable to the rights or warrants;
and
(b) if such conversion occurs after such Distribution Date,
the same number of rights or warrants to which a holder of the number of shares
of Common Stock into which such Convertible Preferred Stock was convertible
immediately prior to such Distribution Date would have been entitled on such
Distribution Date in accordance with the terms and provisions of and applicable
to the rights or warrants.
(x) Merger or Consolidation. (a) In case of:
(1) any merger or consolidation of the Company with
or into another Person (other than a consolidation or merger in which the
Company is the resulting or continuing Person and which does not result in any
reclassification or
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exchange of Common Stock outstanding immediately prior to the merger or
consolidation for cash, securities or other property of another Person); or
(2) any sale, transfer or other disposition to
another Person of all or substantially all of the assets of the Company (other
than the sale, transfer, assignment or distribution of shares of Capital Stock
or assets to a subsidiary of the Company) computed on a consolidated basis; or
(3) any statutory exchange of securities with another
Person, other than in connection with a merger or acquisition,
(any of the events described in this paragraph (x)(a) being referred to as a
"Transaction"), there will be no adjustment to the Conversion Price and each
share of Convertible Preferred Stock then outstanding shall, without the consent
of any Holder of Convertible Preferred Stock (except as expressly required by
applicable law), become convertible only into the kind and amount of shares of
stock or other securities (of the Company or another issuer), cash or other
property receivable upon such Transaction by a holder of the number of shares of
Common Stock into which such share of Convertible Preferred Stock could have
been converted immediately prior to the effective date of such Transaction,
assuming such holder of Common Stock failed to exercise his rights of election,
if any, as to the kind or amount of securities, cash or other property
receivable upon such Transaction. Depending upon the terms of such cash
Transaction, the aggregate amount of cash into which such shares of Convertible
Preferred Stock would be converted may be more or less than the Liquidation
Preference with respect to such Convertible Preferred Stock.
(b) The provisions of this paragraph (x) similarly shall apply
to successive Transactions. The provisions of this paragraph (x) shall be the
sole right of Holders of Convertible Preferred Stock in connection with any
Transaction (and the provisions of Section 5 to the extent applicable) and,
except as expressly provided by applicable law and Section 8, such Holders shall
have no separate vote thereon.
(xi) Notice of Adjustment. Whenever the Conversion Price is
adjusted as provided in this Section 4 or Section 5, the Company shall promptly
file with the Transfer Agent an Officers' Certificate setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date on
which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to each Holder of Convertible Preferred Stock
at such Holder's last address appearing on the register of holders maintained
for that purpose within 20 days of the effective date of such adjustment.
Failure to deliver such notice shall not affect the legality or validity of any
such adjustment.
(xii) Deferred Issuance. In any case in which this Section 4
provides that an adjustment shall become effective immediately after a record
date for an event, the Company may defer until the occurrence of such event
issuing to the Holder of any
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share of Convertible Preferred Stock converted after such record date and before
the occurrence of such event the additional Common Stock issuable upon such
conversion by reason of the adjustment required by such event over and above the
Common Stock issuable upon such conversion before giving effect to such
adjustment.
(xiii) Treasury Stock. For purposes of this Section 4, the number
of shares of Common Stock at any time outstanding shall not include shares held
in the treasury of the Company but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of Common Stock. The Company
shall not pay any dividend or make any distribution on Common Stock held in the
treasury of the Company.
(xiv) Shares in Reserve. The Company shall at all times reserve
and keep available, free from preemptive rights, out of its authorized but
unissued shares of Common Stock (or out of its authorized shares of Common Stock
held in the treasury of the Company), for the purpose of effecting the
conversion of the Convertible Preferred Stock, the full number of shares of
Common Stock then issuable upon the conversion of all outstanding shares of
Convertible Preferred Stock.
(xv) Payment of Taxes. The Company will pay any and all document,
stamp or similar issue or transfer taxes that may be payable in respect of the
issue or delivery of Common Stock on conversion of the Convertible Preferred
Stock pursuant hereto. The Company shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the holder of
the share of Convertible Preferred Stock or the shares of Convertible Preferred
Stock to be converted, and no such issue or delivery shall be made unless and
until the Person requesting such issue has paid to the Company the amount of any
such tax, or has established to the satisfaction of the Company that such tax
has been paid.
5. CHANGE OF CONTROL
Notwithstanding any other provision in the preceding paragraphs to the
contrary, if any Cash Change of Control occurs, then the Holders shall, if the
Market Value of the Common Stock at such time is less than the Conversion Price,
have an option (to be exercised no more than once), upon not less than 30 days
nor more than 60 days notice, to convert their outstanding shares of Convertible
Preferred Stock into Common Stock at an adjusted Conversion Price equal to the
greater of (i) the Market Value of the Common Stock as of the date of the
effectiveness of the Cash Change of Control and (2) $49.0208. In lieu of issuing
shares of Common Stock issuable upon conversion in the event of a Cash Change of
Control, the Company will have the option to make a cash payment equal to the
Market Value of any Common Stock otherwise issuable.
6. LIQUIDATION RIGHTS
(i) Rights. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, subject to the rights of the Company's
creditors and holders of Senior Stock and Parity Stock, each Holder of
Convertible Preferred Stock
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shall be entitled to payment, out of the assets of the Company available for
distribution to its stockholders, of an amount equal to the Liquidation
Preference per share of Convertible Preferred Stock held by such Holder, plus an
amount equal to all accrued and unpaid dividends and Additional Dividends (if
any) thereon to the date fixed for liquidation, dissolution or winding up,
before any distribution is made on any Junior Stock, including, without
limitation, the Common Stock. If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the amounts payable with respect to
the Convertible Preferred Stock and all Parity Stock are not paid in full, the
Convertible Preferred Stock and the Parity Stock will share equally and ratably
(in proportion to the respective Liquidation Preference amounts that would be
payable on such shares of Convertible Preferred Stock and the Parity Stock,
respectively, if all amounts payable thereon had been paid in full) in any
distribution of assets of the Company to which each is entitled. After payment
of the full amount of the Liquidation Preference and an amount equal to all
accrued and unpaid dividends and Additional Dividends, if any, with respect to
the outstanding shares of Convertible Preferred Stock, the Holders of shares of
Convertible Preferred Stock will not be entitled to any further participation in
any distribution of assets of the Company.
(ii) Construction. For the purposes of this Section 6, a merger,
consolidation or other business combination of the Company with or into another
company or other entity, a statutory exchange of securities with another company
and a sale or transfer of all or part of the Company's assets for cash,
securities or other property shall not be deemed a liquidation, dissolution or
winding up of the Company unless such merger, consolidation, combination,
exchange, sale or transfer shall be in connection with a liquidation,
dissolution or winding up of the Company.
7. REDEMPTION
(i) Provisional Redemption. The Convertible Preferred Stock may
not be redeemed under any circumstances prior to August 1, 2001. The Company
may, at its option and to the extent permitted by applicable law, redeem the
Convertible Preferred Stock, in whole or in part, at a Redemption Price of
102.0000% of the Liquidation Preference (plus an amount equal to any accumulated
and unpaid dividends and Additional Dividends, if any, whether or not declared,
to the date fixed for such redemption (the "Provisional Redemption Date")) on or
after August 1, 2001 but prior to August 1, 2002 (the "Provisional Redemption"),
if the Trading Price of the Common Stock equals or exceeds $144.8438 per share
for 20 Trading Days within any 30 Trading Day period. If the Company undertakes
a Provisional Redemption, Holders of Convertible Preferred Stock that the
Company calls for redemption will also receive a payment (the "Additional
Payment") in an amount equal to the present value of the aggregate value of the
dividends that would thereafter have been payable on the Convertible Preferred
Stock (whether or not declared) from the Provisional Redemption Date to August
1, 2002 (the "Additional Period"). The present value will be calculated using
the bond equivalent yield on U.S. Treasury notes or bills having a term nearest
in length to that of the Additional Period as of the day immediately preceding
the date on which a notice of Provisional Redemption is mailed.
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(ii) Optional Redemption. Except as set forth in paragraph (i)
above, the Convertible Preferred Stock may not be redeemed at the option of the
Company prior to August 1, 2002. Beginning on August 1, 2002, the Convertible
Preferred Stock may be redeemed at the option of the Company, in whole or in
part, during the twelve-month periods commencing on August 1 of the years
indicated below (the "Optional Redemption"), at the following Redemption Prices,
expressed as a percentage of the Liquidation Preference per share, plus in each
case, an amount equal to all accumulated and unpaid dividends and Additional
Dividends, if any, whether or not declared, to the Redemption Date.
Year Redemption Price
Per Share
2002............................... 103.8571%
2003............................... 102.8929%
2004............................... 101.9286%
2005............................... 100.9643%
2006 and thereafter................ 100.0000%
(iii) Redemption Procedures.
(a) The Company may effect any Provisional Redemption or
Optional Redemption, by delivery of a Redemption Notice to Holders not less than
20 days nor more than 60 days prior to the date set for such Provisional
Redemption or Optional Redemption.
(b) In the event that fewer than all the outstanding shares of
the Convertible Preferred Stock are to be redeemed, the shares to be redeemed
will be determined pro rata or by lot, except that the Company may redeem such
shares held by any Holder of fewer than 100 shares (or shares held by Holders
who would hold fewer than 100 shares as a result of such redemption), as may be
determined by the Company.
(c) The Redemption Price due to any Holder of shares of
Convertible Preferred Stock (including an amount equal to any accumulated and
unpaid dividends and Additional Dividends, if any, and including any Additional
Payment) shall be, at the option of the Company, payable (a) in cash, (b)
through the issuance of a number of shares of Common Stock equal to the total
amount due on such shares divided by the applicable Market Value Amount as of
the date of the Redemption Notice, or (c) any combination of (a) and (b).
(d) From and after the applicable Redemption Date (unless the
Company shall be in default of payment of the Redemption Price (including an
amount equal to any accumulated and unpaid dividends and Additional Dividends,
if any, and including any Additional Payment), dividends on the shares of the
Convertible Preferred Stock to be redeemed on such Redemption Date shall cease
to accumulate, such shares shall no longer be deemed to be outstanding, and all
rights of the Holders thereof as stockholders of the Company (except the right
to receive the Redemption Price (including
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an amount equal to any accumulated and unpaid dividends and Additional
Dividends, if any, and including any Additional Payment) will cease.
(e) If any dividends or Additional Dividends, if any, on the
Convertible Preferred Stock are in arrears, no shares of the Convertible
Preferred Stock will be redeemed unless all outstanding shares of the
Convertible Preferred Stock are simultaneously redeemed.
(f) In the event the Company shall elect to redeem shares of
the Convertible Preferred Stock pursuant to paragraph (i) or (ii) above, as
applicable, the Company must provide the Holders with the Redemption Notice as
described in sub-paragraph (a) above and:
(1) (A) On or before any Redemption Date, each Holder
of shares of Convertible Preferred Stock to be redeemed shall surrender the
certificate or certificates representing such shares of Convertible Preferred
Stock (properly endorsed or assigned for transfer, if the Company shall so
require and the Redemption Notice shall so state), to the Company or the
Redemption Agent (if appointed) in the manner and at the place designated in the
Redemption Notice or arrange for the appropriate book-entry transfer if a global
certificate has been issued.
(B) On the Redemption Date, the Company or the
Redemption Agent, as applicable, shall pay or deliver to the Holder whose name
appears on such certificate or certificates as the registered owner thereof, the
full Redemption Price (including an amount equal to any accumulated and unpaid
dividends and Additional Dividends, if any, and including any Additional
Payment) due such Holder in cash, in fully paid and nonassessable shares of
Common Stock or in a combination thereof (subject, in each case, to applicable
law).
(C) The shares represented by each certificate to
be surrendered shall be automatically (and without any further action of the
Company or the Holder) canceled as of the Redemption Date (whether or not
certificates for such shares are returned to the Company) and returned to the
status of authorized but unissued shares of Preferred Stock of no series.
(D) If fewer than all the shares represented by
any such certificate are to be redeemed, a new certificate shall be issued
representing the unredeemed shares, without cost to the Holder, together with
the amount of cash, if any, in lieu of fractional shares to the extent the
Company is legally and contractually entitled to pay cash for said fractional
shares. If the Company is not entitled to pay cash for fractional shares, it
shall pay cash to the Holder for the fractional shares when it becomes legally
and contractually able to pay such cash.
(2) If a Redemption Notice shall have been given as
provided in this Section 7, dividends on the shares of Convertible Preferred
Stock so called for redemption shall cease to accrue, such shares shall no
longer be deemed to be outstanding, and all rights of the Holders thereof as
stockholders of the Company with
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respect to shares so called for redemption (except for the right to receive from
the Company the Redemption Price (including an amount equal to any accumulated
and unpaid dividends and Additional Dividends, if any, and including any
Additional Payment to the Redemption Date) shall cease (excluding any right to
receive the dividend payment on shares called for redemption where the
Redemption Date falls between the Dividend Payment Record Date and the Dividend
Payment Date) either (A) from and after the Redemption Date (unless the Company
shall default in the payment of the Redemption Price, in which case such rights
shall not terminate at such time and date) or (B) if the Company shall so elect
and state in the Redemption Notice, from and after the time and date (which date
shall be the Redemption Date or an earlier date not less than 20 days after the
date of mailing of the Redemption Notice) on which the Company shall irrevocably
deposit in trust for the Holders of the shares to be redeemed with a designated
Redemption Agent as paying agent sufficient to pay at the office of such paying
agent, on the Redemption Date, the Redemption Price (including an amount equal
to any accumulated and unpaid dividends and Additional Dividends, if any, and
including any Additional Payment to the Redemption Date). Any money or shares of
Common Stock so deposited with such Redemption Agent which shall not be required
for such redemption shall be returned to the Company forthwith. Subject to
applicable escheat laws, any moneys or shares of Common Stock so set aside by
the Company and unclaimed at the end of one year from the Redemption Date shall
revert to the general funds of the Company, after which reversion the Holders of
such shares so called for redemption shall look only to the general funds of the
Company for the payment of the Redemption Price (including an amount equal to
any accumulated and unpaid dividends and Additional Dividends, if any, and
including any Additional Payment to the Redemption Date) without interest. Any
interest accrued on funds held by the Redemption Agent shall be paid to the
Company from time to time.
(3) If any Holder whose shares of Convertible
Preferred Stock are called for redemption pursuant to this Section 7 fails to
surrender the certificate representing such shares (or fails to arrange for the
appropriate book-entry transfer if a global certificate has been issued), such
Holder shall not be entitled to receive payment of the applicable Redemption
Price (including an amount equal to any accumulated and unpaid dividends and
Additional Dividends, if any, and including any Additional Payment) until the
certificate has been surrendered for cancellation or the appropriate book-entry
transfer has been made. Such Holder will not be entitled to receive any interest
on the Redemption Price.
8. VOTING RIGHTS
(i) General. The Holders of Convertible Preferred Stock shall have
no voting rights, except as required by applicable law or as hereinafter
provided in this Section 8. In exercising any such voting rights, each
outstanding share of Convertible Preferred Stock shall be entitled to one vote,
excluding shares held by the Company or any affiliate of the Company (as defined
in the Securities Act), which shares will have no voting rights.
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(ii) Additional Directors. (a) Upon the accumulation of accrued
and unpaid dividends on the Convertible Preferred Stock in an amount equal to
six or more quarterly payments, whether or not consecutive (together with any
event with a similar effect pursuant to the terms of any other series of
Preferred Stock of the Company upon which like rights have been conferred, a
"Voting Rights Triggering Event"), then the number of directors constituting the
Board of Directors will be immediately and automatically increased by two
directors and the Holders of majority of the then outstanding shares of
Convertible Preferred Stock (together with the holders of Parity Stock upon
which like rights have been conferred and are exercisable), voting separately
and as a class (pro rata based on liquidation preference), shall have the right
and power to elect to serve on the Board of Directors the two additional
directors of the Company at any meeting of the stockholders of the Company at
which directors are to be elected. The rights of the Holders arising as a result
of a Voting Rights Triggering Event will continue until such time as all
dividends in arrears on the Convertible Preferred Stock are paid in full or sums
set aside for payment thereof. At such time the term of any directors elected
pursuant to the provisions of this paragraph (ii)(a) shall terminate immediately
and automatically, and the number of directors constituting the Board of
Directors shall be immediately and automatically decreased by such number (until
the occurrence of any subsequent Voting Rights Triggering Event).
(b) The foregoing right of the Holders of the Convertible
Preferred Stock with respect to the election of two directors may be exercised
at any meeting of stockholders at which directors are to be elected. The Board
of Directors shall, within 20 days after the delivery to the Company at its
principal office of a written request for a special meeting signed by the
Holders of at least 25% of the Convertible Preferred Stock then outstanding,
call a special meeting of the Holders of the Convertible Preferred Stock to be
held within 60 days after the delivery of such request for the purpose of
electing such additional directors.
(c) The Holders of a majority of the then outstanding shares
of Convertible Preferred Stock together with the holders of Parity Stock upon
which like rights have been conferred shall have the right to remove without
cause at any time and replace any directors such holders have elected pursuant
to paragraph (ii)(a), and such directors shall not be removed without cause
except by such Holders.
(iii) Certain Amendments. So long as the Convertible Preferred
Stock is outstanding, the Company shall not, without the affirmative vote of the
Holders of at least a majority of the shares of Convertible Preferred Stock then
outstanding (unless the vote of a greater percentage is required by applicable
law), voting separately as a class, amend, alter or repeal any provision of the
Restated Certificate of Incorporation or the Bylaws of the Company, as amended,
so as to affect materially and adversely the relative rights, preferences,
qualifications, limitations or restrictions of the Convertible Preferred Stock.
Except as otherwise set forth herein or in the Restated Certificate of
Incorporation or as otherwise required by law, (a) the creation, authorization
or issuance of any shares or series of Preferred Stock or (b) the increase or
decrease in the amount of authorized Capital Stock of any class or series,
including any Preferred Stock, shall not require the consent of the Holders of
Convertible Preferred Stock and shall not be deemed to affect
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adversely the rights, preferences, privileges or voting rights of the
Convertible Preferred Stock.
The voting provisions of this Section 8(iii) will not apply if, at or
prior to the time when the act with respect to which such vote would otherwise
be required shall be effected, all outstanding shares of Convertible Preferred
Stock shall have been redeemed or called for redemption upon proper notice, and
sufficient shares of Common Stock, if needed, shall have been reserved, or cash
set aside for payment, by the Company to effect such redemption.
(iv) Amendment of Certificate of Designation. The Company may not
amend this Certificate of Designation without the affirmative vote or consent of
the Holders of a majority of the shares of Convertible Preferred Stock then
outstanding, (including votes or consents obtained in connection with a tender
offer or exchange offer for the Convertible Preferred Stock) and, except as
otherwise provided by applicable law, any past default or failure to comply with
any provision of this Certificate of Designation may not be waived without the
consent of such Holders. Notwithstanding the foregoing, however, without the
consent of each Holder affected, an amendment or waiver may not (with respect to
any shares of the Convertible Preferred Stock held by a non-consenting Holder):
(a) alter the voting rights with respect to the Convertible Preferred Stock or
reduce the number of shares of the Convertible Preferred Stock whose Holders
must consent to an amendment, supplement or waiver, (b) reduce the Liquidation
Preference of any share of the Convertible Preferred Stock or adversely alter
the provisions with respect to the redemption of the Convertible Preferred
Stock, (c) reduce the rate of or change the time for payment of dividends on any
share of the Convertible Preferred Stock, (d) waive a default in the payment of
dividends or Additional Dividends (if any) on the Convertible Preferred Stock,
(e) make any share of the Convertible Preferred Stock payable in money other
than United States dollars, (f) make any change in the provisions of this
Certificate of Designation relating to waivers of the rights of Holders to
receive the Liquidation Preference, dividends or Additional Dividends (if any)
on the Convertible Preferred Stock, or (g) make any change in the foregoing
amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any Holder, the
Company may (to the extent permitted by, and subject to the requirements of,
Delaware law) amend or supplement this Certificate of Designation to cure any
ambiguity, defect or inconsistency, to provide for uncertificated shares of the
Convertible Preferred Stock in addition to or in place of certificated shares of
the Convertible Preferred Stock, to make any change that would provide any
additional rights or benefits to the Holders or to make any change that the
Board of Directors determines, in good faith, is not materially adverse to
Holders of the Convertible Preferred Stock.
9. REISSUANCE OF CONVERTIBLE PREFERRED STOCK
Shares of Convertible Preferred Stock that have been issued and
reacquired in any manner, including shares purchased, redeemed, converted or
exchanged, shall not be reissued as shares of Convertible Preferred Stock and
shall (upon compliance with any
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applicable provisions of the laws of Delaware) have the status of authorized and
unissued shares of Preferred Stock undesignated as to series and may be
redesignated and reissued as part of any series of Preferred Stock; provided,
however, that so long as any shares of Convertible Preferred Stock are
outstanding, any issuance of such shares must be in compliance with the terms
hereof. Upon any such reacquisitions, the number of shares of Convertible
Preferred Stock authorized pursuant to this Certificate of Designation shall be
reduced by the number of shares so reacquired.
10. BUSINESS DAY
If any payment, redemption or exchange shall be required by the terms
hereof to be made on a day that is not a Business Day, such payment, redemption
or exchange shall be made on the immediately succeeding Business Day.
11. CERTIFICATES
(i) Form and Dating.
(a) Form. The Convertible Preferred Stock and the Transfer
Agent's certificate of authentication shall be substantially in the form of
Exhibit A, which is hereby incorporated in and expressly made a part of this
Certificate of Designation. The Convertible Preferred Stock certificate may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Convertible Preferred Stock certificate shall be dated the date of its
authentication. The terms of the Convertible Preferred Stock certificate set
forth in Exhibit A are part of the terms of this Certificate of Designation.
(b) Global Convertible Preferred Stock. The Convertible
Preferred Stock shall be issued initially in the form of one or more fully
registered global certificates with the global securities legend and restricted
securities legend set forth in Exhibit A hereto (the "Global Convertible
Preferred Stock"), which shall be deposited on behalf of the purchasers
represented thereby with the Transfer Agent, at its New York office, as
custodian for the Depositary (or with such other custodian as the Depositary may
direct), and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Company and authenticated by the Transfer Agent
as hereinafter provided. The number of shares of Convertible Preferred Stock
represented by Global Convertible Preferred Stock may from time to time be
increased or decreased by adjustments made on the records of the Transfer Agent
and the Depositary or its nominee as hereinafter provided. With respect to
shares of Convertible Preferred Stock that are not "restricted securities" as
defined in Rule 144 under the Securities Act ("Rule 144") on a Dividend Payment
Record Date or on a conversion date, all shares of Dividend Common Stock
distributed on the related Dividend Payment Date in payment of dividends or on
such conversion date will be freely transferable without restriction under the
Securities Act (other than by affiliates), and such shares will be eligible for
receipt in global form through the facilities of the Depositary.
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(c) Book-Entry Provisions. In the event Global Convertible
Preferred Stock is deposited with or on behalf of the Depositary, the Company
shall execute and the Transfer Agent shall authenticate and deliver initially
one or more Global Convertible Preferred Stock certificates that (1) shall be
registered in the name of the Depositary for such Global Convertible Preferred
Stock or the nominee of the Depositary and (2) shall be delivered by the
Transfer Agent to the Depositary or pursuant to the Depositary's instructions or
held by the Transfer Agent as custodian for the Depositary. Members of, or
participants in, the Depositary ("Agent Members") shall have no rights under
this Certificate of Designation with respect to any Global Convertible Preferred
Stock held on their behalf by the Depositary or by the Transfer Agent as the
custodian of the Depositary or under such Global Convertible Preferred Stock,
and the Depositary may be treated by the Company, the Transfer Agent and any
agent of the Company or the Transfer Agent as the absolute owner of such Global
Convertible Preferred Stock for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Transfer Agent or any
agent of the Company or the Transfer Agent from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Agent Members, the operation of
customary practices of the Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Global Convertible Preferred Stock.
(d) Certificated Convertible Preferred Stock; Certificated
Dividend Common Stock; Certificated Conversion Common Stock. Except as provided
in this paragraph (i) or paragraph (iii) below, owners of beneficial interests
in Global Convertible Preferred Stock will not be entitled to receive physical
delivery of Convertible Preferred Stock in fully registered certificated form
("Certificated Convertible Preferred Stock"). With respect to shares of
Convertible Preferred Stock that are "restricted securities" as defined in Rule
144 on a Dividend Payment Record Date or on a conversion date, all such shares
of Dividend Common Stock distributed on the related Dividend Payment Date in
payment of dividends on the Convertible Preferred Stock or all such shares of
Conversion Common Stock issuable on such conversion date will be issued in fully
registered certificated form ("Certificated Dividend Common Stock" or
"Certificated Conversion Common Stock," and collectively, "Certificated Common
Stock"). Certificates of Certificated Common Stock will be mailed or made
available at the office of the Transfer Agent for the Convertible Preferred
Stock on or as soon as reasonably practicable after the relevant Dividend
Payment Date or the conversion date, as the case may be, to those Persons who
are Holders of Convertible Preferred Stock shown on the records of the
Depositary at the close of business on the relevant record date (in the case of
Certificated Dividend Common Stock) or to the converting holder (in the case of
Certificated Conversion Common Stock).
After a transfer of any Convertible Preferred Stock or Certificated
Common Stock during the period of the effectiveness of a Shelf Registration
Statement with respect to such Convertible Preferred Stock or such Certificated
Common Stock, all requirements pertaining to legends on such Convertible
Preferred Stock (including Global Convertible Preferred Stock) or Certificated
Common Stock will cease to apply, the requirement that any such Convertible
Preferred Stock or Certificated Common Stock issued to Holders be
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issued in global form or that any such Certificated Common Stock issued to
Holders be issued in certificated form, as the case may, will cease to apply,
and Convertible Preferred Stock or Common Stock, as the case may be, in global
or fully registered certificated form, in either case without legends, will be
available to the transferee of the Holder of such Convertible Preferred Stock or
Certificated Common Stock upon exchange of such transferring Holder's
Convertible Preferred Stock or Common Stock or directions to transfer such
Holder's interest in the Global Convertible Preferred Stock, as applicable.
(ii) Execution and Authentication.
(a) Two Officers shall sign the Convertible Preferred Stock
certificate for the Company by manual or facsimile signature. The Company's seal
shall be impressed, affixed, imprinted or reproduced on the Convertible
Preferred Stock certificate and may be in facsimile form.
(b) If an Officer whose signature is on Convertible Preferred
Stock certificate no longer holds that office at the time the Transfer Agent
authenticates the Convertible Preferred Stock certificate, the Convertible
Preferred Stock certificate shall be valid nevertheless.
(c) A Convertible Preferred Stock certificate shall not be
valid until an authorized signatory of the Transfer Agent manually signs the
certificate of authentication on the Convertible Preferred Stock certificate.
The signature shall be conclusive evidence that the Convertible Preferred Stock
certificate has been authenticated under this Certificate of Designation.
(d) The Transfer Agent shall authenticate and deliver
certificates for 7,200,000 shares of Convertible Preferred Stock for original
issue upon a written order of the Company signed by two Officers or by an
Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company. Such order shall specify the number of shares of Convertible Preferred
Stock to be authenticated and the date on which the original issue of
Convertible Preferred Stock is to be authenticated.
(e) The Transfer Agent may appoint an authenticating agent
reasonably acceptable to the Company to authenticate the certificates for
Convertible Preferred Stock. Unless limited by the terms of such appointment, an
authenticating agent may authenticate certificates for Convertible Preferred
Stock whenever the Transfer Agent may do so. Each reference in this Certificate
of Designation to authentication by the Transfer Agent includes authentication
by such agent. An authenticating agent has the same rights as the Transfer Agent
or agent for service of notices and demands.
(iii) Transfer and Exchange.
(a) Transfer and Exchange of Certificated Convertible
Preferred Stock. When Certificated Convertible Preferred Stock is presented to
the Transfer Agent with a request to register the transfer of such Certificated
Convertible Preferred Stock or to exchange such Certificated Convertible
Preferred Stock for an equal number of shares of Certificated Convertible
Preferred Stock of other authorized
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denominations, the Transfer Agent shall register the transfer or make the
exchange as requested if its reasonable requirements for such transaction are
met; provided, however, that the Certificated Convertible Preferred Stock
surrendered for transfer or exchange:
(1) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the Company
and the Transfer Agent, duly executed by the Holder thereof or its attorney duly
authorized in writing; and
(2) is being transferred or exchanged pursuant to an
effective registration statement under the Securities Act or pursuant to
sub-clause (A) or (B) below, and is accompanied by the following additional
information and documents, as applicable:
(A) if such Certificated Convertible Preferred
Stock is being delivered to the Transfer Agent by a Holder for registration in
the name of such Holder, without transfer, a certification from such Holder to
that effect in substantially the form of Exhibit C hereto; or
(B) if such Certificated Convertible Preferred
Stock is being transferred to the Company or to a "qualified institutional
buyer" ("QIB") in accordance with Rule 144A under the Securities Act or pursuant
to an exemption from registration in accordance with Rule 144, (I) a
certification to that effect (in substantially the form of Exhibit C hereto) and
(II) if the Company so requests, an Opinion of Counsel or other evidence
reasonably satisfactory to it as to the compliance with the restrictions set
forth in the legend set forth in sub-paragraph (g) below.
(b) Restrictions on Transfer of Certificated Convertible
Preferred Stock for a Beneficial Interest in Global Convertible Preferred Stock.
Certificated Convertible Preferred Stock may not be exchanged for a beneficial
interest in Global Convertible Preferred Stock except upon satisfaction of the
requirements set forth below. Upon receipt by the Transfer Agent of Certificated
Convertible Preferred Stock, duly endorsed or accompanied by appropriate
instruments of transfer, in form reasonably satisfactory to the Company and the
Transfer Agent, together with written instructions directing the Transfer Agent
to make, or to direct the Depositary to make, an adjustment on its books and
records with respect to such Global Convertible Preferred Stock to reflect an
increase in the number of shares of Convertible Preferred Stock represented by
the Global Convertible Preferred Stock, then the Transfer Agent shall cancel
such Certificated Convertible Preferred Stock and cause, or direct the
Depositary to cause, in accordance with the standing instructions and procedures
existing between the Depositary and the Transfer Agent, the number of shares of
Convertible Preferred Stock represented by the Global Convertible Preferred
Stock to be increased accordingly. If no Global Convertible Preferred Stock is
then outstanding, the Company shall issue and the Transfer Agent shall
authenticate, upon written order of the Company in the form of an Officers'
Certificate, a new Global Convertible Preferred Stock representing the
appropriate number of shares.
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(c) Transfer and Exchange of Global Convertible Preferred
Stock. The transfer and exchange of Global Convertible Preferred Stock or
beneficial interests therein shall be effected through the Depositary, in
accordance with this Certificate of Designation (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depositary therefor.
(d) Transfer of a Beneficial Interest in Global Convertible
Preferred Stock for a Certificated Convertible Preferred Stock.
(1) Any person having a beneficial interest in
Convertible Preferred Stock that is being transferred or exchanged pursuant to
an effective registration statement under the Securities Act or pursuant to an
exemption from registration in accordance with Rule 144 may upon request, and if
accompanied by a certification from such person to that effect (in substantially
the form of Exhibit C hereto), exchange such beneficial interest for
Certificated Convertible Preferred Stock representing the same number of shares
of Convertible Preferred Stock. Upon receipt by the Transfer Agent of written
instructions or such other form of instructions as is customary for the
Depositary from the Depositary or its nominee on behalf of any person having a
beneficial interest in Global Convertible Preferred Stock and upon receipt by
the Transfer Agent of a written order or such other form of instructions as is
customary for the Depositary or the person designated by the Depositary as
having such a beneficial interest in a Transfer Restricted Security only, then,
the Transfer Agent or the Depositary, at the direction of the Transfer Agent,
will cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Transfer Agent, the number of shares of
Convertible Preferred Stock represented by Global Convertible Preferred Stock to
be reduced on its books and records and, following such reduction, the Company
will execute and the Transfer Agent will authenticate and deliver to the
transferee Certificated Convertible Preferred Stock.
(2) Certificated Convertible Preferred Stock issued
in exchange for a beneficial interest in a Global Convertible Preferred Stock
pursuant to this sub-paragraph (d) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Transfer Agent.
The Transfer Agent shall deliver such Certificated Convertible Preferred Stock
to the persons in whose names such Convertible Preferred Stock are so registered
in accordance with the instructions of the Depositary.
(e) Restrictions on Transfer and Exchange of Global
Convertible Preferred Stock.
(1) Notwithstanding any other provisions of this
Certificate of Designation (other than the provisions set forth in sub-paragraph
(f) below), Global Convertible Preferred Stock may not be transferred as a whole
except by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor depositary or a nominee of such
successor depositary.
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(2) In the event that the Global Convertible
Preferred Stock is exchanged for Convertible Preferred Stock in definitive
registered form pursuant to sub-paragraph (f) below prior to the effectiveness
of a Shelf Registration Statement with respect to such securities, such
Convertible Preferred Stock may be exchanged only in accordance with such
procedures as are substantially consistent with the provisions of this Section
11(iii) (including the certification requirements set forth in the Exhibits to
this Certificate of Designation intended to ensure that such transfers comply
with Rule 144A or such other applicable exemption from registration under the
Securities Act, as the case may be) and such other procedures as may from time
to time be adopted by the Company.
(f) Authentication of Certificated Convertible Preferred
Stock. If at any time:
(1) the Depositary notifies the Company that the
Depositary is unwilling or unable to continue as depository for the Global
Convertible Preferred Stock and a successor depository for the Global
Convertible Preferred Stock is not appointed by the Company within 90 days after
delivery of such notice;
(2) the Depositary ceases to be a clearing agency
registered under the Exchange Act; or
(3) the Company, in its sole discretion, notifies the
Transfer Agent in writing that it elects to cause the issuance of Certificated
Convertible Preferred Stock under this Certificate of Designation,
then the Company will execute, and the Transfer Agent, upon receipt of a written
order of the Company signed by two Officers or by an Officer and an Assistant
Treasurer or Assistant Secretary of the Company requesting the authentication
and delivery of Certificated Convertible Preferred Stock to the persons
designated by the Company, will authenticate and deliver Certificated
Convertible Preferred Stock equal to the number of shares of Convertible
Preferred Stock represented by Global Convertible Preferred Stock, in exchange
for Global Convertible Preferred Stock.
(g) Legends.
(1) Except as permitted by the following clause (2)
and in sub-paragraph (d) above, each certificate evidencing the Global
Convertible Preferred Stock, Certificated Convertible Preferred Stock and
Certificated Common Stock shall bear a legend in substantially the following
form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF VERIO INC. ("VERIO") THAT THIS SECURITY MAY
NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND
ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY
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PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF VERIO
AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN
EITHER CASE, OTHER THAN (1) TO VERIO, (2) IF AND TO THE EXTENT THAT THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (4)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND
AGREES FOR THE BENEFIT OF VERIO THAT IT IS A QUALIFIED INSTITUTIONAL BUYER. IN
ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY
HEDGING TRANSACTION WITH REGARD TO THIS SECURITY OR ANY COMMON STOCK ISSUABLE
UPON CONVERSION OR REDEMPTION OF THIS SECURITY EXCEPT AS PERMITTED BY THE
SECURITIES ACT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), NEW
YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OF PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY) ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST
HEREIN."
(2) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer Restricted Security represented by a
Global Convertible Preferred Stock) pursuant to Rule 144 under the Securities
Act or an effective registration statement under the Securities Act:
(A) in the case of any Transfer Restricted
Security that is a Certificated Convertible Preferred Stock, the Transfer Agent
shall permit the Holder thereof to exchange such Transfer Restricted Security
for Certificated Convertible Preferred Stock that does not bear the legend set
forth above and rescind any restriction on the transfer of such Transfer
Restricted Security; and
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(B) in the case of any Transfer Restricted
Security that is represented by a Global Convertible Preferred Stock, the
Transfer Agent shall permit the Holder thereof to exchange such Transfer
Restricted Security for Certificated Convertible Preferred Stock that does not
bear the second legend set forth above and rescind any restriction on the
transfer of such Transfer Restricted Security, if the Holder's request for such
exchange was made in reliance on Rule 144 and the Holder certifies to that
effect in writing to the Transfer Agent (such certification to be in
substantially the form set forth in Exhibit C hereto).
(h) Cancellation or Adjustment of Global Convertible Preferred
Stock. At such time as all beneficial interests in Global Convertible Preferred
Stock have either been exchanged for Certificated Convertible Preferred Stock,
redeemed, repurchased or canceled, such Global Convertible Preferred Stock shall
be returned to the Depositary for cancellation or retained and canceled by the
Transfer Agent. At any time prior to such cancellation, if any beneficial
interest in Global Convertible Preferred Stock is exchanged for Certificated
Convertible Preferred Stock, redeemed, repurchased or canceled, the number of
shares of Convertible Preferred Stock represented by such Global Convertible
Preferred Stock shall be reduced and an adjustment shall be made on the books
and records of the Transfer Agent with respect to such Global Convertible
Preferred Stock, by the Transfer Agent or the Depositary, to reflect such
reduction.
(i) Obligations with Respect to Transfers and Exchanges of
Convertible Preferred Stock.
(1) To permit registrations of transfers and
exchanges, the Company shall execute and the Transfer Agent shall authenticate
Certificated Convertible Preferred Stock and Global Convertible Preferred Stock
as required pursuant to the provisions of this paragraph (iii).
(2) All Certificated Convertible Preferred Stock and
Global Convertible Preferred Stock issued upon any registration of transfer or
exchange of Certificated Convertible Preferred Stock or Global Convertible
Preferred Stock shall be the valid obligations of the Company, entitled to the
same benefits under this Certificate of Designation as the Certificated
Convertible Preferred Stock or Global Convertible Preferred Stock surrendered
upon such registration of transfer or exchange.
(3) Prior to due presentment for registration of
transfer of any shares of Convertible Preferred Stock, the Transfer Agent and
the Company may deem and treat the person in whose name such shares of
Convertible Preferred Stock are registered as the absolute owner of such
Convertible Preferred Stock and neither the Transfer Agent nor the Company shall
be affected by notice to the contrary.
(4) No service charge shall be made to a Holder for
any registration of transfer or exchange upon surrender of any Convertible
Preferred Stock Certificate or Common Stock Certificate at the office of the
Transfer Agent maintained for that purpose. However, the Company may require
payment of a sum sufficient to
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cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Convertible Preferred Stock
certificates or Common Stock certificate.
(5) Upon any sale or transfer of shares of
Convertible Preferred Stock (including any Convertible Preferred Stock
represented by a Global Convertible Preferred Stock Certificate) or of
Certificated Common Stock pursuant to an effective registration statement under
the Securities Act, pursuant to Rule 144 under the Securities Act or pursuant to
an opinion of counsel reasonably satisfactory to the Company that no legend is
required:
(A) in the case of any Certificated Convertible
Preferred Stock or Certificated Common Stock, the Company and the Transfer Agent
shall permit the holder thereof to exchange such Convertible Preferred Stock or
Certificated Common Stock for Certificated Convertible Preferred Stock or
Certificated Common Stock, as the case may be, that does not bear the legend set
forth in sub-paragraph (g) (1) above and rescind any restriction on the transfer
of such Convertible Preferred Stock or Dividend Common Stock or Conversion
Common Stock issuable in respect thereof; and
(B) in the case of any Global Convertible
Preferred Stock, such Convertible Preferred Stock shall not be required to bear
the legend set forth in sub-paragraph (g) (1) above but shall continue to be
subject to the provisions of sub-paragraph (d) hereof; provided, however, that
with respect to any request for an exchange of Convertible Preferred Stock that
is represented by Global Convertible Preferred Stock for Certificated
Convertible Preferred Stock that does not bear the legend set forth in
sub-paragraph (g) (1) above in connection with a sale or transfer thereof
pursuant to Rule 144 (and based upon an opinion of counsel if the Company so
requests), the Holder thereof shall certify in writing to the Transfer Agent
that such request is being made pursuant to Rule 144 (such certification to be
substantially in the form of Exhibit C hereto).
(j) No Obligation of the Transfer Agent.
(1) The Transfer Agent shall have no responsibility
or obligation to any beneficial owner of Global Convertible Preferred Stock, a
member of, or a participant in the Depositary or any other Person with respect
to the accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Convertible Preferred Stock or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depositary) of any
notice (including any notice of redemption or repurchase) or the payment of any
amount, under or with respect to such Global Convertible Preferred Stock. All
notices and communications to be given to the Holders and all payments to be
made to Holders under the Convertible Preferred Stock shall be given or made
only to the registered Holders (which shall be the Depositary or its nominee in
the case of the Global Convertible Preferred Stock). The rights of beneficial
owners in any Global Convertible Preferred Stock shall be exercised only through
the Depositary subject to the applicable rules and procedures of the Depositary.
The Transfer Agent may rely and shall be fully
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protected in relying upon information furnished by the Depositary with respect
to its members, participants and any beneficial owners.
(2) The Transfer Agent shall have no obligation or
duty to monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Certificate of Designation or under applicable law
with respect to any transfer of any interest in any Convertible Preferred Stock
(including any transfers between or among the Depositary participants, members
or beneficial owners in any Global Convertible Preferred Stock) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Certificate of Designation, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
(iv) Replacement Certificates. If a mutilated Convertible
Preferred Stock certificate is surrendered to the Transfer Agent or if the
Holder of a Convertible Preferred Stock certificate claims that the Convertible
Preferred Stock certificate has been lost, destroyed or wrongfully taken, the
Company shall issue and the Transfer Agent shall countersign a replacement
Convertible Preferred Stock certificate if the reasonable requirements of the
Transfer Agent and of Section 8-405 of the Uniform Commercial Code as in effect
in the State of New York are met. If required by the Transfer Agent or the
Company, such Holder shall furnish an indemnity bond sufficient in the judgment
of the Company and the Transfer Agent to protect the Company and the Transfer
Agent from any loss which either of them may suffer if a Convertible Preferred
Stock certificate is replaced. The Company and the Transfer Agent may charge the
Holder for their expenses in replacing a Convertible Preferred Stock
certificate.
(v) Temporary Certificates. Until definitive Convertible Preferred
Stock certificates are ready for delivery, the Company may prepare and the
Transfer Agent shall countersign temporary Convertible Preferred Stock
certificates. Temporary Convertible Preferred Stock certificates shall be
substantially in the form of definitive Convertible Preferred Stock certificates
but may have variations that the Company considers appropriate for temporary
Convertible Preferred Stock certificates. Without unreasonable delay, the
Company shall prepare and the Transfer Agent shall countersign definitive
Convertible Preferred Stock certificates and deliver them in exchange for
temporary Convertible Preferred Stock certificates.
(vi) Cancellation.
(a) In the event the Company shall purchase or otherwise
acquire Certificated Convertible Preferred Stock, the same shall thereupon be
delivered to the Transfer Agent for cancellation.
(b) At such time as all beneficial interests in Global
Convertible Preferred Stock have either been exchanged for Certificated
Convertible Preferred Stock, redeemed, repurchased or canceled, such Global
Convertible Preferred Stock shall thereupon be delivered to the Transfer Agent
for cancellation.
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(c) The Transfer Agent and no one else shall cancel and
destroy all Convertible Preferred Stock certificates surrendered for transfer,
exchange, replacement or cancellation and deliver a certificate of such
destruction to the Company unless the Company directs the Transfer Agent to
deliver canceled Convertible Preferred Stock certificates to the Company. The
Company may not issue new Convertible Preferred Stock certificates to replace
Convertible Preferred Stock certificates to the extent they evidence Convertible
Preferred Stock which the Company has purchased or otherwise acquired.
12. ADDITIONAL RIGHTS OF HOLDERS
In addition to the rights provided to Holders under this Certificate of
Designation, Holders shall have the rights set forth in the Registration Rights
Agreement and the Deposit Agreement.
13. CERTAIN DEFINITIONS
As used in this Certificate of Designation, the following terms shall
have the following meanings (and (i) terms defined in the singular have
comparable meanings when used in the plural and vice versa, (ii) "including"
means including without limitation, (iii) "or" is not exclusive and (iv) an
accounting term not otherwise defined has the meaning assigned to it in
accordance with United States generally accepted accounting principles as in
effect on the date of issuance of the Convertible Preferred Stock and all
accounting calculations will be determined in accordance with such principles),
unless the context otherwise requires:
"Additional Dividends" means with respect to any share of Convertible
Preferred Stock constituting a Transfer Restricted Security, the additional
amounts payable pursuant to Section 3(ii) above.
"Additional Payment" is as defined in Section 7(i) above.
"Additional Period" is as defined in Section 7(i) above.
"Agent Members" is as defined in Section 11(i)(c) above.
"Business Day" means each day which is not a Legal Holiday.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated, whether voting or non-voting) in equity
of the Company, including all Common Stock and Preferred Stock.
"Cash Change of Control" means any of the following events: (i) the
Company consolidates with or merges with or into any Person or conveys,
transfers or leases all or substantially all, computed on a consolidated basis,
of its assets to any Person, or any corporation consolidates with or merges into
or with the Company in any such event pursuant to a transaction in which the
Company's outstanding voting stock is changed into or exchanged for
consideration in which 50% or less of the value received by holders
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of such outstanding voting stock consists of common stock that has been admitted
for listing on a national securities exchange or quoted on the NNM; or (ii) the
Company is liquidated or dissolved or adopts a plan of liquidation or
dissolution.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's common stock, par value $0.001 per
share.
"Company" means Verio Inc., a Delaware corporation, and any successor
thereof.
"Conversion Price" means $96.5625.
"Conversion Price Triggering Event" is as defined in Section 4(iv)
above.
"Conversion Shares" is as defined in Section 4(ix) above.
"Deposit Account" means that certain deposit account established
pursuant to the Deposit Agreement.
"Deposit Agreement" means the Deposit Agreement, with respect to the
Convertible Preferred Stock, dated July 20, 1999, between the Company and
Norwest Bank Minnesota, N.A., as deposit agent.
"Deposit Expiration Date" means August 1, 2000.
"Depositary" means The Depository Trust Company.
"Distribution Date" is as defined in Section 4(ix)(a) above.
"Dividend Common Stock" is as defined in Section 3(iii) above.
"Dividend Payment Date" is as defined in Section 3(i) above.
"Dividend Payment Record Date" is as defined in Section 3(i) above.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Global Convertible Preferred Stock" is as defined in Section 11(i)(b)
above.
"Holders" means the registered holders from time to time of the
Convertible Preferred Stock.
"Junior Stock" is as defined in Section 2 above.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York.
"Liquidation Preference" is as defined in Section 1 above.
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"Market Value" means, as of any date, the average of the daily closing
price for the five consecutive Trading Days ending on the last Trading Day
immediately prior to such date. The closing price for each day shall be the last
sales price or, in case no such reported sales take place on such day, the
average of the last reported bid and asked price, in either case, on the
principal national securities exchange on which the shares of Common Stock are
admitted to trading or listed, or if not listed or admitted to trading on such
exchange, the representative closing bid price as reported by the NNM, or other
similar organization if the NNM is no longer reporting such information, or if
not so available, the fair market price as determined in good faith by the Board
of Directors of the Company.
"Market Value Amount" means, (i) if (a) the applicable shares of Common
Stock are issued pursuant to a registration statement, (b) a Shelf Registration
Statement registering the resale of such shares is effective or (c) such shares
are eligible for immediate resale pursuant to Rule 144(k) under the Securities
Act, 97% of the Market Value of the Common Stock, or (ii) in all other cases,
93% of the Market Value of the Common Stock.
"NNM" means the Nasdaq National Market.
"Officer" means the Chairman of the Board of Directors, the Chief
Executive Officer, the President, the Chief Financial Officer, the Chief
Technical Officer, the Secretary or any Vice President of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Transfer Agent. The counsel may be an employee of or counsel
to the Company or the Transfer Agent.
"Optional Redemption" is as defined in Section 7(ii) above.
"Parity Stock" is as defined in Section 2 above.
"person" or "Person" means any individual, corporation, partnership,
joint venture, limited liability company, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock," as applied to the Capital Stock of the Company,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation, winding up or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Provisional Redemption" is as defined in Section 7(i) above.
"Provisional Redemption Date" is as defined in Section 7(i) above.
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"Redemption Agent" means that Person, if any, appointed by the Company
to hold funds deposited by the Company in trust to pay to the Holders of shares
of Convertible Preferred Stock to be redeemed.
"Redemption Date" means that certain date set forth in the Redemption
Notice on which date the redemption of the Convertible Preferred Stock is
completed.
"Redemption Notice" means that notice to be given by the Company to the
Holders notifying the Holders as to the redemption, in whole or in part, of the
Convertible Preferred Stock pursuant to Section 7 hereof. The Redemption Notice
shall include the following information: (i) the Redemption Date; (ii) the total
number of shares of Convertible Preferred Stock to be redeemed and, if fewer
than all the shares held by such Holders are to be redeemed, the number of such
shares to be redeemed from such Holders; (iii) the Redemption Price, and any
dividends, Additional Dividends (if any) and Additional Payments (whether to be
paid in cash or shares of Common Stock); (iv) the place or place where
certificates for such shares are to be surrendered for payment of the Redemption
Price and where delivery of certificates representing shares of Common Stock (if
the Company so chooses) payable upon redemption shall be made; (v) that
dividends on the shares to be redeemed will cease to accrue on such Redemption
Date unless the Company defaults in the payment of the Redemption Price; and
(vi) the name of any bank or trust corporation, if any, performing the duties of
Redemption Agent.
"Redemption Notice Date" means the date the Redemption Notice is first
mailed or delivered to any Holder.
"Redemption Price" means that price established for redemption of the
Convertible Preferred Stock established in Section 7 hereof.
"Registration Default" is as defined in Section 3(ii) above.
"Registration Rights Agreement" means the Registration Rights Agreement
dated July 20, 1999 among the Company, Salomon Smith Barney Inc., Donaldson,
Lufkin & Jenrette Securities Corporation, Credit Suisse First Boston
Corporation, Deutsche Bank Securities Inc. and First Union Capital Markets Corp.
with respect to the Convertible Preferred Stock.
"Regular Dividend Commencement Date" is as defined in Section 2 above.
"Rights" is as defined in Section 4(iv)(b) above.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Stock" is as defined in Section 2 above.
"Shelf Registration Statement" means a shelf registration statement
filed with the Commission to cover resales of Transfer Restricted Securities by
holders thereof, as required by the Registration Rights Agreement.
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"Suspension Period" is as defined in Section 3(ii) (c) above.
"Trading Day" means any day on which the NNM or other applicable stock
exchange or market is open for business.
"Trading Price" means, on any specified Trading Day, the last sales
price of the Common Stock or, in case no such reported sales take place on such
day, the average of the last reported bid and asked price, in either case, on
the principal national securities exchange on which the shares of Common Stock
are admitted to trading or listed, or if not listed or admitted to trading on
such exchange, the representative closing bid price as reported by the NNM, or
other similar organization if the NNM is no longer reporting such information,
or if not so available, the fair market price as determined in good faith by the
Board of Directors of the Company.
"Transaction" is as defined in Section 6(x) above.
"Transfer Agent" means the transfer agent for the Convertible Preferred
Stock appointed by the Company, which initially shall be Norwest Bank Minnesota,
N.A. (also known as Norwest Shareowner Services).
"Transfer Restricted Securities" means each share of Convertible
Preferred Stock and any share of Dividend Common Stock until (i) the date on
which such security or its predecessor has been transferred pursuant to the
Shelf Registration Statement or another registration statement covering such
security which has been filed with the Commission pursuant to the Securities
Act, in either case after such registration statement has become effective under
the Securities Act, (ii) has been transferred pursuant to Rule 144 under the
Securities Act, or any similar provision then in force, (iii) may be sold or
transferred pursuant to Rule 144(k) under the Securities Act, or any similar
provision then in force, or (iv) in the Opinion of Counsel may be freely sold
without restriction under the Securities Act by the Holder thereof.
"Voting Rights Triggering Event" is as defined in Section 8(ii) above.
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IN WITNESS WHEREOF, Verio Inc., has caused this Certificate of
Designation to be signed by Carla Hamre Donelson, its Vice President, General
Counsel and Secretary, this 20th day of July, 1999.
By: /s/ Carla Hamre Donelson
-------------------------------------
Name: Carla Hamre Donelson
Title: Vice President, General Counsel
and Secretary
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EXHIBIT A
FORM OF CONVERTIBLE PREFERRED STOCK
FACE OF SECURITY
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF VERIO INC. ("VERIO") THAT THIS SECURITY MAY
NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND
ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y)
BY ANY HOLDER THAT WAS AN AFFILIATE OF VERIO AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO VERIO,
(2) IF AND TO THE EXTENT THAT THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (3) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE)
UNDER THE SECURITIES ACT OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF VERIO THAT IT
IS A QUALIFIED INSTITUTIONAL BUYER. IN ANY CASE, THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS
SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OR REDEMPTION OF THIS
SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT.*
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), NEW
YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OF PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY) ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST
HEREIN.**
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----------------
* Subject to removal upon registration under the Securities Act of 1933 or
otherwise when the security shall no longer be a restricted security.
** Subject to removal if not a global security.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITARY OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE CERTIFICATE OF DESIGNATION REFERRED TO BELOW.**
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
REGISTRAR AND TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
Certificate Number 001
Number of Shares of Convertible
Preferred 7,200,000
CUSIP NO.: 923433 30 4
Series A 6.75% Convertible Preferred Stock (par value $0.001)
(liquidation preference $50.00 per share of Convertible Preferred
Stock) of Verio Inc.
Verio Inc., a Delaware corporation (the "Company"), hereby certifies
that Cede & Co. or registered assigns (the "Holder") is the registered owner of
fully paid and non-assessable preferred securities of the Company designated the
Series A 6.75% Convertible Preferred Stock (par value $0.001) (liquidation
preference $50.00 per share) (the "Convertible Preferred Stock"). The shares of
Convertible Preferred Stock are transferable on the books and records of the
Registrar, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designations,
rights, privileges, restrictions, preferences and other terms and provisions of
the Convertible Preferred Stock represented hereby are issued and shall in all
respects be subject to the provisions of the Certificate of Designations of the
Powers, Preferences and Relative, Participating, Optional and other Special
Rights, and Qualifications, Limitations and Restrictions of the Convertible
Preferred Stock, dated July 19, 1999, as the same may be amended from time to
time (the "Certificate of Designation"). Capitalized terms used herein but not
defined shall have the meaning given them in the Certificate of Designation. The
Company will provide a copy of the
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Certificate of Designation to a Holder without charge upon written request to
the Company at its principal place of business.
Reference is hereby made to select provisions of the Convertible
Preferred Stock set forth on the reverse hereof, and to the Certificate of
Designation, which select provisions and the Certificate of Designation shall
for all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the
Certificate of Designation and is entitled to the benefits thereunder.
Unless the Transfer Agent's Certificate of Authentication hereon has
been properly executed, these shares of Convertible Preferred Stock shall not be
entitled to any benefit under the Certificate of Designation or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, Verio Inc. has executed this certificate this
____ day of July, 1999.
VERIO INC.,
By:
---------------------------
Name:
----------------------
Title:
---------------------
By:
---------------------------
Name:
----------------------
Title:
---------------------
TRANSFER AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the certificates representing shares of Convertible
Preferred Stock referred to in the within mentioned Certificate of Designation.
Dated: , 1999
Norwest Bank Minnesota, N.A.
By:
---------------------------
Authorized Signatory
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REVERSE OF SECURITY
Dividends on each share of Convertible Preferred Stock shall be payable
at a rate per annum set forth in the face hereof or as provided in the
Certificate of Designation (including Additional Dividends). Dividends may be
paid in cash or in shares of Common Stock of the Company, or any combination of
the two, at the option of the Company.
The shares of Convertible Preferred Stock shall be redeemable as
provided in the Certificate of Designation. The shares of Convertible Preferred
Stock shall be convertible into the Company's Common Stock in the manner and
according to the terms set forth in the Certificate of Designation.
As required under Delaware law, the Company shall furnish to any Holder
upon request and without charge, a full summary statement of the designations,
voting rights preferences, limitations and special rights of the shares of each
class or series authorized to be issued by the Company so far as they have been
fixed and determined.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of
Convertible Preferred Stock evidenced hereby to:
--------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints: __________________________________, agent to transfer
the shares of Convertible Preferred Stock evidenced hereby on the books of the
Transfer Agent and Registrar. The agent may substitute another to act for him or
her.
Date:
Signature:
------------------------------
(Sign exactly as your name appears on the
side of this Convertible Preferred
Stock Certificate)
Signature Guarantee:(1)
-------------------------
- ------------------
(1) Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership in the
Securities Transfer Agents Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
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EXHIBIT B
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in
order to Convert the Convertible Preferred Stock)
The undersigned hereby irrevocably elects to convert (the "Conversion")
shares of Series A 6.75% Convertible Preferred Stock (the "Convertible Preferred
Stock"), represented by stock certificate No(s). ____ (the "Convertible
Preferred Stock Certificates") into shares of common stock ("Common Stock") of
Verio Inc. (the "Company") according to the conditions of the Certificate of
Designations of the Powers, Preferences and Relative, Participating, Optional
and other Special Rights, and Qualifications, Limitations and Restrictions of
the Convertible Preferred Stock (the "Certificate of Designation"), as of the
date written below. If shares are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates. No fee will be
charged to the holder for any conversion, except for transfer taxes, if any. A
copy of each Convertible Preferred Stock Certificate is attached hereto (or
evidence of loss, theft or destruction thereof).
The undersigned represents and warrants that all offers and sales by
the undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the Convertible Preferred Stock shall be made pursuant to
registration of the Common Stock under the Securities Act of 1933, as amended
(the "Securities Act"), or pursuant to any exemption from registration under the
Securities Act.
Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Certificate of Designation, agrees to be bound by the
terms of the Registration Rights Agreement and the Deposit Agreement.
The Company is not required to issue shares of Common Stock until the
original Convertible Preferred Stock Certificate(s) (or evidence of loss, theft
or destruction thereof) to be converted are received by the Company or its
Transfer Agent. The Company shall issue and deliver shares of Common Stock to an
overnight courier not later than three business days following receipt of the
original Convertible Preferred Stock Certificate(s) to be converted.
Capitalized terms used but not defined herein shall have the meanings
ascribed thereto in or pursuant to the Certificate of Designation.
Date of Conversion:
------------------------
Applicable Conversion Price:
---------------
Number of shares of Convertible
Preferred Stock to be Converted:
-----------
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Number of shares of Common
Stock to be Issued:
-----------------------
Signature:
--------------------------------
Name:
-------------------------------------
Address:*
---------------------------------
------------------------------------------
Fax No.:
----------------------------------
* Address where shares of Common Stock and any other payments or certificates
shall be sent by the Company.
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EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF CONVERTIBLE PREFERRED STOCK
Re: Series A 6.75% Convertible Preferred Stock (the "Convertible
Preferred Stock") of Verio Inc. (the "Company")
This Certificate relates to _______ shares of Convertible
Preferred Stock held in
_____*/ book-entry or
_____*/ definitive form by __________________ (the "Transferor").
The Transferor*:
[ ] has requested the Transfer Agent by written order to deliver in
exchange for its beneficial interest in the Convertible Preferred Stock held by
the depository shares of Convertible Preferred Stock in definitive, registered
form equal to its beneficial interest in such Convertible Preferred Stock (or
the portion thereof indicated above); or
[ ] has requested the Transfer Agent by written order to exchange or
register the transfer of Convertible Preferred Stock.
In connection with such request and in respect of such
Convertible Preferred Stock, the Transferor does hereby certify that the
Transferor is familiar with the Certificate of Designation relating to the
above-captioned Convertible Preferred Stock and that the transfer of this
Convertible Preferred Stock does not require registration under the Securities
Act of 1933, as amended (the "Securities Act") because:
[ ] Such Convertible Preferred Stock is being acquired for the
Transferor's own account without transfer.
[ ] Such Convertible Preferred Stock is being transferred to the
Company.
[ ] Such Convertible Preferred Stock is being transferred to a
qualified institutional buyer (as defined in Rule 144A under the Securities
Act), in reliance on Rule 144A.
[ ] Such Convertible Preferred Stock is being transferred in reliance
on and in compliance with another exemption from the registration requirements
of the Securities Act (and based on an opinion of counsel if the Company so
requests).
Date:
----------------------
--------------------------
[INSERT NAME OF TRANSFEROR]
By:
------------------------
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