1
EXHIBIT 3.1
AMENDED AND RESTATED CHARTER OF
CORRECTIONS CORPORATION OF AMERICA
ARTICLE I
NAME
The name of this corporation shall be Corrections Corporation of America
(the "Corporation").
ARTICLE II
PURPOSE
The purpose for which this Corporation is formed is to engage in any
lawful act or activity for which corporations may be organized under the
Maryland General Corporation Law as now or hereinafter in force. The Corporation
also shall have all the general powers granted by law to Maryland corporations
and all other powers not inconsistent with law that are appropriate to promote
and attain its purpose.
ARTICLE III
PRINCIPAL OFFICE AND RESIDENT AGENT
The address of the principal office of the Corporation is c/o The
Corporation Trust Incorporated, 300 East Lombard Street, Baltimore, Maryland
21202. The name of the resident agent of the Corporation in the State of
Maryland is The Corporation Trust Incorporated, and the address of the resident
agent is 300 East Lombard Street, Baltimore, Maryland 21202.
ARTICLE IV
DIRECTORS
A. General Powers. The business and affairs of the Corporation shall be
managed by its Board of Directors and, except as otherwise expressly provided by
law, the Bylaws of the Corporation or this Charter, all of the powers of the
Corporation shall be vested in the Board of Directors. This Charter shall be
construed with the presumption in favor of the grant of power and authority to
the directors.
B. Number of Directors. The Board of Directors shall consist of such
number of directors as shall be determined from time to time by resolution of
the Board of Directors in accordance with the Bylaws of the Corporation, except
as otherwise required by the Charter; provided that the number of directors
shall never be less than the minimum number required by the Maryland General
Corporation Law. The Board of Directors shall initially consist of eight (8)
directors, at least two (2) of which must be Independent Directors. An
Independent Director is defined to be an individual who qualifies as a director
under the Bylaws of the Corporation but who: (i) is not an officer or employee
of the Corporation; (ii) is not the beneficial owner of five percent (5%) or
more of any class of equity securities of the Corporation, or any officer,
employee or "affiliate" (as defined in Rule 12b-2 promulgated under the
Securities Exchange Act of 1934, as
2
amended (the "Exchange Act")) of any such stockholder of the Corporation; and
(iii) does not have any economic relationship requiring disclosure under the
Exchange Act with the Corporation. The names of the directors of the Corporation
are William F. Andrews, Thomas W. Beasley, C. Ray Bell, Jean-Pierre Cuny, Ted
Feldman, John D. Ferguson, Joseph V. Russell and Charles W. Thomas, PhD. A
director need not be a stockholder of the Corporation.
C. Effect of Increase or Decrease in Directors. In the event of any
increase or decrease in the number of directors pursuant to the first sentence
of Paragraph B above, each director then serving shall nevertheless continue as
a director until the expiration of his term and until his successor is duly
elected and qualified or his prior death, retirement, resignation or removal.
D. Service of Directors. Notwithstanding the provisions of this Article
IV, each director shall serve until his successor is elected and qualified or
until his death, retirement, resignation or removal.
E. Removal of Directors. Subject to the rights, if any, of any class or
series of stock to elect directors and to remove any director whom the holders
of any such stock have the right to elect, any director (including persons
elected by directors to fill vacancies in the Board of Directors) may be removed
from office, with or without cause, only by the affirmative vote of the holders
of at least a majority of the votes represented by the shares then entitled to
vote in the election of such director. At least thirty (30) days prior to any
meeting of stockholders at which it is proposed that any director be removed
from office, written notice of such proposed removal shall be sent to the
director whose removal will be considered at the meeting.
F. Directors Elected by Holders of Preferred Stock. During any period
when the holders of any series of Preferred Stock (as defined in Article V
hereof) have the right to elect additional directors, as provided for or fixed
pursuant to the provisions of Article V hereof, then upon commencement and for
the duration of the period during which such right continues (i) the then
otherwise total and authorized number of directors of the Corporation shall
automatically be increased by the number of such additional directors, and such
holders of Preferred Stock shall be entitled to elect the additional directors
so provided for or fixed pursuant to said provisions, and (ii) each such
additional director shall serve until such director's successor shall have been
duly elected and qualified, or until such director's right to hold such office
terminates pursuant to said provisions, whichever occurs earlier, subject to his
earlier death, disqualification, resignation or removal.
ARTICLE V
CAPITAL STOCK
The total number of shares of stock which the Corporation shall have
authority to issue is four hundred fifty million (450,000,000), of which four
hundred million (400,000,000) shares are of a class denominated common stock,
$0.01 par value per share (the "Common Stock") and fifty million (50,000,000)
shares are of a class denominated preferred stock, $0.01 par value per share
(the "Preferred Stock"). The aggregate par value of all shares of all classes is
$4,500,000. Four million
2
3
three hundred thousand (4,300,000) shares of the Preferred Stock shall be
designated as "8.0% Series A Cumulative Preferred Stock" (the "Series A
Preferred Stock"). Twelve Million (12,000,000) shares of Preferred Stock shall
be designated as "Series B Cumulative Convertible Preferred Stock" (the "Series
B Preferred Stock").
The Board of Directors may authorize the issuance by the Corporation
from time to time of shares of any class of stock of the Corporation or
securities convertible or exercisable into shares of stock of any class or
classes for such consideration as the Board of Directors determines, or, if
issued as a result of a stock dividend or stock split, without any
consideration, and all stock so issued will be fully paid and non-assessable by
the Corporation. The Board of Directors may create and issue rights entitling
the holders thereof to purchase from the Corporation shares of stock or other
securities or property. The Board of Directors may classify or reclassify any
unissued stock from time to time by setting or changing the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications, or terms or conditions of redemption of such stock.
The Corporation reserves the right to make any amendment to the charter
of the Corporation, now or hereafter authorized by law, including any amendment
which alters the contract rights, as expressly set forth in the charter of the
Corporation, of any outstanding shares of stock.
Notwithstanding any provision of law permitting or requiring any action
to be taken or approved by the affirmative vote of the holders of shares
entitled to cast a greater number of votes, any such action shall be effective
and valid if taken or approved by the affirmative vote of holders of shares
entitled to cast a majority of all the votes entitled to be cast on the matter.
The following is a description of each of the classes of stock of the
Corporation and a statement of the powers, preferences and rights of such stock,
and the qualifications, limitations and restrictions thereof:
A. Common Stock.
1. Voting Rights. Each holder of Common Stock shall be entitled to
one vote per share of Common Stock on all matters to be voted on by the
stockholders of the Corporation. Notwithstanding the foregoing, (i)
holders of Common Stock shall not be entitled to vote on any proposal to
amend provisions of the Charter of the Corporation setting forth the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualification, or terms or conditions of
redemption of a class or series of Preferred Stock if the proposed
amendment would not alter the contract rights of the Common Stock, and
(ii) holders of Common Stock shall not be entitled to notice of any
meeting of stockholders at which the only matters to be considered are
those as to which such holders have no vote by virtue of this Article V,
Paragraph A.1.
3
4
2. Dividends and Rights Upon Liquidation. After the provisions with
respect to preferential dividends of any series of Preferred Stock, if
any, shall have been satisfied, and subject to any other conditions that
may be fixed in accordance with the provisions of this Article V, then,
and not otherwise, all Common Stock will participate equally in
dividends payable to holders of shares of Common Stock when and as
declared by the Board of Directors at their discretion out of funds
legally available therefor. In the event of voluntary or involuntary
dissolution or liquidation of the Corporation, after distribution in
full of the preferential amounts, if any, to be distributed to the
holders of Preferred Stock, the holders of Common Stock shall, subject
to the additional rights, if any, of the holders of Preferred Stock
fixed in accordance with the provisions of this Article V, be entitled
to receive all of the remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to stockholders
ratably in proportion to the number of shares of Common Stock held by
them respectively.
B. Preferred Stock.
1. Authorization and Issuance. The Preferred Stock may be issued from
time to time upon authorization by the Board of Directors of the
Corporation, in such series and with such preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications or other provisions as may be fixed by the Board of
Directors, except as otherwise set forth in the charter.
2. Voting Rights. The holders of Preferred Stock shall have no voting
rights and shall have no rights to receive notice of any meetings,
except as required by law, as expressly provided for in the charter, or
as expressly provided in the resolution establishing any series thereof.
C. Series A Preferred Stock.
1. Designation and Amount; Fractional Stock; Par Value. There shall
be a class of Preferred Stock of the Corporation designated as "8.0%
Series A Cumulative Preferred Stock," and the number of shares of stock
constituting such series shall be 4,300,000. The Series A Preferred
Stock is issuable solely in shares of whole stock and shall entitle the
holder thereof to exercise the voting rights, to participate in the
distributions and dividends and to have the same benefits as all other
holders of Series A Preferred Stock as set forth in this charter. The
par value of each share of Series A Preferred Stock shall be $0.01.
2. Maturity. The Series A Preferred Stock has no stated maturity and
will not be subject to any sinking fund or mandatory redemption.
3. Rank. The Series A Preferred Stock will, with respect to dividend
rights and rights upon liquidation, dissolution or winding-up of the
Corporation, rank: (i) senior to all classes or series of Common Stock
of the Corporation and to all equity securities ranking
4
5
junior to the Series A Preferred Stock; (ii) on a parity with all equity
securities issued by the Corporation, the terms of which specifically
provide that such equity securities rank on a parity with the Series A
Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding-up of the Corporation; and (iii)
junior to all existing and future indebtedness of the Corporation. The
term "equity securities" does not include convertible debt and
securities which rank senior to the Series A Preferred Stock prior to
conversion.
4. Dividends. Holders of the Series A Preferred Stock shall be
entitled to receive, when and as authorized and declared by the Board of
Directors, out of funds legally available for the payment of dividends,
cumulative preferential cash dividends at the rate of eight percent
(8.0%) per annum of the Liquidation Preference, as hereinafter defined.
Such dividends shall be cumulative from the date of original issuance
and shall be payable quarterly in arrears on the fifteenth day of
January, April, July and October of each year (each, a "Dividend Payment
Date"), or, if not a business day, the next succeeding business day.
Dividends will accrue from the date of original issuance to the first
Dividend Payment Date and thereafter from each Dividend Payment Date to
the subsequent Dividend Payment Date. A dividend payable on the Series A
Preferred Stock for any partial dividend period will be computed on the
basis of a 360-day year consisting of twelve 30-day months. Dividends
will be payable to holders of record as they appear in the stock records
of the Corporation at the close of business on the applicable record
date, which shall be the last business day of March, June, September and
December, respectively, or on such other date designated by the Board of
Directors of the Corporation for the payment of dividends that is not
more than 30 nor less than 10 days prior to the applicable Dividend
Payment Date (each, a "Dividend Record Date"). The Series A Preferred
Stock will rank senior to the Corporation's Common Stock with respect to
the payment of dividends.
No dividends on Series A Preferred Stock shall be declared by the
Board of Directors of the Corporation or paid or set apart for payment
by the Corporation at such time as the terms and provisions of any
agreement to which the Corporation is a party, including any agreement
relating to its indebtedness, prohibits such declaration, payment or
setting apart for payment or provides that such declaration, payment or
setting apart for payment would constitute a breach thereof or a default
thereunder, or if such declaration or payment shall be restricted or
prohibited by law.
Notwithstanding the foregoing, dividends on the Series A Preferred
Stock will accrue whether or not the Corporation has earnings, whether
or not there are funds legally available for payment of such dividends
and whether or not such dividends are declared. The accrued but unpaid
dividends on the Series A Preferred Stock will not bear interest, and
holders of shares of Series A Preferred Stock will not be entitled to
any distributions in excess of full cumulative distributions described
above.
5
6
Except as set forth in the next sentence, no dividends will be
declared or paid or set apart for payment on any capital stock of the
Corporation or any other series of Preferred Stock ranking, as to
dividends, on a parity with or junior to the Series A Preferred Stock
(other than a distribution in stock of the Corporation's Common Stock or
in stock of any other class of stock ranking junior to the Series A
Preferred Stock as to dividends and upon liquidation) for any period
unless full cumulative dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment
thereof is set apart for such payment on the Series A Preferred Stock
for all past dividend periods and the then current dividend period. When
dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon the Series A Preferred Stock and the
shares of any other series of Preferred Stock ranking on a parity as to
dividends with the Series A Preferred Stock, all dividends declared upon
the Series A Preferred Stock and any other series of Preferred Stock
ranking on a parity as to dividends with the Series A Preferred Stock
shall be declared pro rata so that the amount of dividends authorized
per share of Series A Preferred Stock and such other series of Preferred
Stock shall in all cases bear to each other the same ratio that accrued
dividends per share on the Series A Preferred Stock and such other
series of Preferred Stock (which shall not include any accrual in
respect of unpaid dividends for prior dividend periods if such series of
Preferred Stock does not have a cumulative dividend) bear to each other.
No interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payment or payments on the Series A Preferred
Stock which may be in arrears.
Except as provided in the immediately preceding paragraph, unless
full cumulative dividends on the Series A Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for payment for all past dividend
periods and the then current dividend period, no dividends (other than
in Common Stock or other stock of the Corporation ranking junior to the
Series A Preferred Stock as to dividends and upon liquidation) shall be
declared or paid or set aside for payment nor shall any other
distribution be declared or made upon the Common Stock, or stock of the
Corporation ranking junior to or on a parity with the Series A Preferred
Stock as to dividends or upon liquidation, nor shall any Common Stock,
or any other stock of the Corporation ranking junior to or on a parity
with the Series A Preferred Stock as to dividends or upon liquidation,
be redeemed, purchased or otherwise acquired for any consideration (or
any monies be paid to or made available for a sinking fund for the
redemption of any such stock) by the Corporation (except by conversion
into or exchange for other stock of the Corporation ranking junior to
the Series A Preferred Stock as to dividends and upon liquidation).
Holders of shares of Series A Preferred Stock shall not be entitled to
any dividend, whether payable in cash, property or stock, in excess of
full cumulative dividends on the Series A Preferred Stock as provided
above. Any dividend payment made on shares of the Series A Preferred
Stock shall first be credited against the earliest accrued but unpaid
dividend due with respect to such stock which remains payable.
6
7
5. Liquidation Preference. Upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Series A Preferred Stock are entitled to be
paid out of the assets of the Corporation legally available for
distribution to its stockholders, a liquidation preference of $25 per
share (the "Liquidation Preference"), plus an amount equal to any
accrued and unpaid dividends to the date of payment but without
interest, before any distribution of assets is made to holders of Common
Stock or any other class or series of stock of the Corporation that
ranks junior to the Series A Preferred Stock as to liquidation rights.
In the event that, upon any such voluntary or involuntary liquidation,
dissolution or winding up, the available assets of the Corporation are
insufficient to pay the amount of the liquidating distributions on all
outstanding shares of Series A Preferred Stock and the corresponding
amounts payable on all stock of other classes or series of Preferred
Stock of the Corporation ranking on a parity with the Series A Preferred
Stock in the distribution of assets, then the holders of shares of the
Series A Preferred Stock and all other such classes or series of
Preferred Stock shall share ratably in any such distribution of assets
in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
Holders of shares of Series A Preferred Stock will be entitled to
written notice of any such liquidation. After payment of the full amount
of the liquidating distributions to which they are entitled, the holders
of shares of Series A Preferred Stock will have no right or claim to any
of the remaining assets of the Corporation. The consolidation or merger
of the Corporation with or into any other trust, corporation or entity
or of any other corporation with or into the Corporation, or the sale,
lease or conveyance of all or substantially all of the property or
business of the Corporation, shall not be deemed to constitute a
liquidation, dissolution or winding up of the Corporation.
6. Redemption. Shares of the Series A Preferred Stock are not
redeemable prior to January 30, 2003. On and after January 30, 2003, the
Corporation, at its option upon not less than thirty (30) nor more than
sixty (60) days' written notice, may redeem the Series A Preferred
Stock, in whole or in part, at any time or from time to time, for cash
at a redemption price of $25 per share, plus all accrued and unpaid
dividends thereon to the date fixed for redemption (except as provided
below), without interest. Holders of shares of Series A Preferred Stock
to be redeemed shall surrender any certificates representing such shares
of Series A Preferred Stock at the place designated in such notice and
shall be entitled to the redemption price and any accrued and unpaid
dividends payable upon such redemption following such surrender. If
notice of redemption of any shares of Series A Preferred Stock has been
given and if the funds necessary for such redemption have been set aside
by the Corporation in trust for the benefit of the holders of any shares
of Series A Preferred Stock so called for redemption, then from and
after the redemption date dividends will cease to accrue on such shares
of Series A Preferred Stock, such shares of Series A Preferred Stock
shall no longer be deemed outstanding and all rights of the holders of
such stock will terminate, except the right to receive the redemption
price. If less than all of the outstanding shares of Series A Preferred
Stock are to be redeemed, the shares of Series A Preferred Stock
7
8
to be redeemed shall be selected pro rata (as nearly as may be
practicable without creating fractional stock) or by any other equitable
method determined by the Corporation.
Unless full cumulative dividends on all shares of Series A Preferred
Stock shall have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current dividend
period, no shares of Series A Preferred Stock shall be redeemed unless
all outstanding shares of Series A Preferred Stock are simultaneously
redeemed and the Corporation shall not purchase or otherwise acquire
directly or indirectly any shares of Series A Preferred Stock (except by
exchange for capital stock of the Corporation ranking junior to the
Series A Preferred Stock as to dividends and upon liquidation);
provided, however, that the foregoing shall not prevent the purchase or
acquisition of shares of Series A Preferred Stock pursuant to a purchase
or exchange offer made on the same terms to holders of all outstanding
shares of Series A Preferred Stock. So long as no dividends are in
arrears, the Corporation shall be entitled at any time and from time to
time to repurchase shares of Series A Preferred Stock in open-market
transactions duly authorized by the Board of Directors and effected in
compliance with applicable laws.
Notice of redemption will be given by publication in a newspaper of
general circulation in the City of New York, such publication to be made
once a week for two (2) successive weeks commencing not less than thirty
(30) nor more than sixty (60) days prior to the redemption date. A
similar notice will be mailed by the Corporation, postage prepaid, not
less than thirty (30) nor more than sixty (60) days prior to the
redemption date, addressed to the respective holders of record of the
Series A Preferred Stock to be redeemed at their respective addresses as
they appear on the stock transfer records of the Corporation. No failure
to give such notice or any defect thereto or in the mailing thereof
shall affect the validity of the proceedings for the redemption of any
shares of Series A Preferred Stock except as to the holder to whom
notice was defective or not given. Each notice shall state: (i) the
redemption date; (ii) the redemption price; (iii) the number of shares
of Series A Preferred Stock to be redeemed; (iv) the place or places
where the certificates representing the shares of Series A Preferred
Stock are to be surrendered for payment of the redemption price; and (v)
that dividends on the stock to be redeemed will cease to accrue on such
redemption date. If less than all of the shares of Series A Preferred
Stock held by any holder are to be redeemed, the notice mailed to such
holder shall also specify the number of shares of Series A Preferred
Stock held by such holder to be redeemed.
Immediately prior to any redemption of shares of Series A Preferred
Stock, the Corporation shall pay, in cash, any accumulated and unpaid
dividends through the redemption date. Except as provided above, the
Corporation will make no payment or allowance for unpaid dividends,
whether or not in arrears, on shares of Series A Preferred Stock which
are redeemed.
8
9
7. Voting Rights. Holders of the shares of Series A Preferred Stock
will not have any voting rights, except as set forth below.
Whenever dividends on any shares of Series A Preferred Stock shall be
in arrears for six or more quarterly periods (a "Preferred Dividend
Default"), the holders of such Series A Preferred Stock (voting together
as a class with all other series of Preferred Stock ranking on a parity
with the Series A Preferred Stock as to dividends or upon liquidation
("Parity Preferred") upon which like voting rights have been conferred
and are exercisable) will be entitled to vote for the election of a
total of two additional directors of the Corporation (the "Preferred
Stock Directors") at a special meeting called by the holders of record
of at least twenty percent (20%) of the shares of Series A Preferred
Stock and the holders of record of at least twenty percent (20%) of the
shares of any series of Parity Preferred so in arrears (unless such
request is received less than ninety (90) days before the date fixed for
the next annual or special meeting of the stockholders) or at the next
annual meeting of stockholders, and at such subsequent annual meeting
until all dividends accumulated on such shares of Series A Preferred
Stock for the past dividend periods and the dividend for the then
current dividend period shall have been fully paid or declared and a sum
sufficient for the payment thereof set aside for payment. A quorum for
any such meeting shall exist if at least a majority of the outstanding
shares of Series A Preferred Stock and shares of Parity Preferred upon
which like voting rights have been conferred and are exercisable are
represented in person or by proxy at such meeting. Such Preferred Stock
Directors shall be elected upon affirmative vote of a plurality of the
shares of Series A Preferred Stock and such Parity Preferred present and
voting in person or by proxy at a duly called and held meeting at which
a quorum is present. If and when all accumulated dividends and the
dividend for the then current dividend period on the shares of Series A
Preferred Stock shall have been paid in full or set aside for payment in
full, the holders thereof shall be divested of the foregoing voting
rights (subject to revesting in the event of each and every Preferred
Dividend Default) and, if all accumulated dividends and the dividend for
the then current dividend period have been paid in full or set aside for
payment in full on all series of Parity Preferred upon which like voting
rights have been conferred and are exercisable, the term of office of
each Preferred Stock Director so elected shall immediately terminate.
Any Preferred Stock Director may be removed at any time with or without
cause by, and shall not be removed otherwise than by the vote of, the
holders of record of a majority of the outstanding shares of Series A
Preferred Stock and all series of Parity Preferred upon which like
voting rights have been conferred and are exercisable (voting together
as a class). So long as a Preferred Dividend Default shall continue, any
vacancy in the office of a Preferred Stock Director may be filled by
written consent of the Preferred Stock Directors remaining in office, or
if none remains in office, by a vote of the holders of record of a
majority of the outstanding shares of Series A Preferred Stock when they
have the voting rights described above (voting together as a class with
all series of Parity Preferred upon which like voting rights have been
conferred and are exercisable). The Preferred Stock Directors shall each
be entitled to one vote per director on any matter.
9
10
So long as any shares of Series A Preferred Stock remain outstanding,
the Corporation will not, without the affirmative vote or consent of the
holders of at least two-thirds of the shares of Series A Preferred
Stock outstanding at the time, given in person or by proxy, either in
writing or at a meeting (voting separately as a class), (a) authorize or
create, or increase the authorized or issued amount of, any class or
series of shares of stock ranking prior to the Series A Preferred Stock
with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up or reclassify any authorized
shares of stock of the Corporation into such shares, or create,
authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares of stock, or (b) amend,
alter or repeal the provisions of the Charter, whether by merger,
consolidation or otherwise (an "Event"), so as to materially and
adversely affect any right, preference, privilege or voting power of the
shares of Series A Preferred Stock or the holders thereof; provided,
however, with respect to the occurrence of any Event set forth in (b)
above, so long as the shares of Series A Preferred Stock remain
outstanding with the terms thereof materially unchanged, the occurrence
of any such Event shall not be deemed to materially and adversely affect
such rights, preferences, privileges or voting power of holders of the
shares of Series A Preferred Stock and provided further that (i) any
increase in the amount of the authorized Preferred Stock or the creation
or issuance of any other series of Preferred Stock, or (ii) any increase
in the amount of authorized shares of such series, in each case ranking
on a parity with or junior to the Series A Preferred Stock with respect
to payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions 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 Series A Preferred
Stock shall have been redeemed or called for redemption upon proper
notice and sufficient funds shall have been deposited in trust to effect
such redemption.
8. Conversion. Shares of the Series A Preferred Stock are not
convertible into or exchangeable for any other property or securities of
the Corporation.
9. Definitions. Terms defined in this Article V, Paragraph C shall
apply only in respect to the Series A Preferred Stock.
D. Series B Preferred Stock.
1. Designation and Amount; Rank.
(a) There shall be a class of Preferred Stock of the Corporation
designated as "Series B Cumulative Convertible Preferred Stock," and the number
of shares constituting such series shall
10
11
be 12,000,000 shares. The Series B Preferred Stock is issuable solely in shares
of whole stock and shall entitle the holder thereof to exercise the voting
rights and to have the same benefits as the other holders of Series B Preferred
Stock set forth in this Charter. The par value of each share of Series B
Preferred Stock shall be $0.01. Section 10 of this Paragraph D sets forth the
definitions of certain terms used in this Article V, Paragraph D. All
capitalized terms used in this Article V, Paragraph D shall have the meaning set
forth in Section 10 of this Paragraph D and shall apply only in respect to the
Series B Preferred Stock.
(b) The Series B Preferred Stock shall, with respect to dividend
distributions and distributions upon liquidation, winding-up and dissolution of
the Corporation, rank: (i) senior (to the extent set forth herein) to all Junior
Stock; (ii) on a parity with all Parity Stock; and (iii) junior to all Senior
Stock.
2. Dividends and Distributions.
(a) Subject to the preferential rights of all Senior Stock, the holders
of shares of Series B Preferred Stock shall be entitled to receive, when and as
authorized and declared by the Board of Directors, out of funds legally
available for the payment of dividends, (i) commencing on the first Dividend
Payment Date and continuing through September 30, 2003, cumulative preferential
dividends payable in additional shares of Series B Preferred Stock at the rate
of twelve percent (12%) per annum of the Stated Amount of each share of the then
outstanding Series B Preferred Stock, and (ii) commencing with the first
Dividend Period occurring after September 30, 2003, cumulative preferential
dividends will be payable entirely in cash at the rate of twelve percent (12%)
per annum of the Stated Amount of each share of the then outstanding Series B
Preferred Stock. Dividends on each share of Series B Preferred Stock shall
accrue and be cumulative from the Issuance Date with respect to that share.
Dividends shall be payable on December 31, 2000 and quarterly in arrears
thereafter when and as declared by the Board of Directors on each Dividend
Payment Date (or, if such Dividend Payment Date is not a Business Day, the first
(1st) Business Day following the Dividend Payment Date) in respect of the
Dividend Period ending on such Dividend Payment Date (but without including such
Dividend Payment Date) commencing on the first Dividend Payment Date and
continuing for so long as the Series B Preferred Stock is outstanding. Any
reference herein to "cumulative dividends" or "Accrued Dividends" or similar
phrases means that such dividends are fully cumulative and accumulate and accrue
on a daily basis (computed on the basis of a 360-day year of twelve 30-day
months), whether or not they have been declared and whether or not there are
profits, surplus or other funds of the Corporation legally available for the
payment of dividends. The Accrued Dividends will not bear interest, and holders
of shares of the Series B Preferred Stock will not be entitled to any
distributions other than as expressly set forth herein. All dividends payable in
additional shares of Series B Preferred Stock shall be paid through the issuance
of additional shares of Series B Preferred Stock at the Stated Amount.
Notwithstanding anything contained herein to the contrary, no dividends
on shares of Series B Preferred Stock shall be declared by the Board of
Directors or paid or Set Apart for Payment by the Corporation at such time as,
and to the extent that, the terms and provisions of any agreement
11
12
to which the Corporation is a party, including any agreement relating to its
indebtedness or any provisions of the Corporation's Charter relating to any
Senior Stock, prohibit such declaration, payment or setting apart for payment or
provide that such declaration, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such declaration or
payment shall be restricted or prohibited by law.
(b) For so long as any shares of Series B Preferred Stock are
outstanding, no full dividends shall be declared by the Board of Directors or
paid or Set Apart for Payment by the Corporation on any Parity Stock for any
period unless the Accrued Dividends have been or contemporaneously are declared
and paid in full, or declared and, if payable in cash, a sum in cash is Set
Apart for Payment. If the Accrued Dividends and any accrued dividends with
respect to Parity Stock are not so paid (or a sum sufficient for such payment is
not so Set Apart for Payment), all dividends declared and paid upon shares of
the Series B Preferred Stock and any other Parity Stock shall be declared pro
rata so that the amount of dividends declared and paid per share on the Series B
Preferred Stock and such Parity Stock shall in all cases bear to each other the
same ratio that the Accrued Dividends per share on the Series B Preferred Stock
and the accrued dividends per share on such Parity Stock bear to each other.
(c) For so long as any shares of Series B Preferred Stock are
outstanding, the Corporation shall not declare, pay or Set Apart for Payment any
dividend on any of the Junior Stock (other than (i) dividends in Junior Stock to
the holders of Junior Stock or (ii) distributions of rights to purchase shares
of Common Stock or Preferred Stock of the Corporation to the holders of Common
Stock of the Corporation), or make any payment on account of, or Set Apart for
Payment money for a sinking or other similar fund for, the purchase, redemption
or other retirement of, any of the Junior Stock or any warrants, rights, calls
or options exercisable for or convertible into any of the Junior Stock whether
in cash, obligations or shares of the Corporation or other property (other than
in exchange for Junior Stock), and shall not permit any corporation or other
entity directly or indirectly controlled by the Corporation to purchase or
redeem any of the Junior Stock or any such warrants, rights, calls or options
(other than in exchange for Junior Stock) unless the Accrued Dividends on the
Series B Preferred Stock for all Dividend Periods ended on or prior to the date
of such payment in respect of Junior Stock have been or contemporaneously are
paid in full or declared and, if payable in cash, a sum in cash has been Set
Apart for Payment.
(d) For so long as any shares of Series B Preferred Stock are
outstanding, the Corporation shall not (except with respect to dividends as
permitted by Section 2(b)) make any payment on account of, or Set Apart for
Payment money for a sinking or other similar fund for, the purchase, redemption
or other retirement of, any shares of the Parity Stock or any warrants, rights,
calls or options exercisable for or convertible into any shares of the Parity
Stock, and shall not permit any corporation or other entity directly or
indirectly controlled by the Corporation to purchase or redeem any shares of the
Parity Stock or any such warrants, rights, calls or options unless the Accrued
Dividends on the Series B Preferred Stock for all Dividend Periods ended on or
prior to the date of such payment in respect of Parity Stock have been or
contemporaneously are paid in full.
12
13
(e) Notwithstanding anything contained herein to the contrary, dividends
on the Series B Preferred Stock, if not paid on a Series B Dividend Payment
Date, will accrue whether or not dividends are declared for such Series B
Dividend Payment Date, whether or not the Corporation has earnings and whether
or not there are profits, surplus or other funds legally available for the
payment of such dividends. Any dividend payment made on shares of Series B
Preferred Stock shall first be credited against the current dividend and then
against the earliest Accrued Dividend.
3. Voting Rights.
(a) The holders of shares of the Series B Preferred Stock will not have
any voting rights, except as set forth herein or as required by law.
(b) If and as long as (i) dividends on the Series B Preferred Stock
shall be in arrears and unpaid for six (6) Dividend Periods (a "Payment
Default"), the holders of such Series B Preferred Stock (voting together as a
class with all other series of Parity Stock upon which like voting rights have
been conferred and are exercisable) will be entitled to vote for the election of
a total of two (2) additional directors of the Corporation (the "Default
Directors") at a special meeting called at the request of the holders of record
of at least twenty percent (20%) of the shares of Series B Preferred Stock and
the holders of record of at least twenty percent (20%) of the shares of any
series of Parity Stock so in arrears (unless such request is received less than
ninety (90) days before the date fixed for the next annual or special meeting of
the stockholders) or at the next annual meeting of stockholders, and at
subsequent annual meetings until all dividends accumulated on such shares of
Series B Preferred Stock for the past dividend periods and the dividend for the
then current dividend period shall have been fully paid or declared and a sum
sufficient for the payment thereof Set Apart for Payment. A quorum for purposes
of electing Default Directors at any special or annual meeting shall exist if at
least a majority of the outstanding shares of Series B Preferred Stock and
shares of Parity Stock upon which like voting rights have been conferred and are
exercisable are represented in person or by proxy. Such Default Directors shall
be elected upon affirmative vote of a plurality of the shares of Series B
Preferred Stock and such Parity Stock present and voting in person or by proxy
at a duly called and held meeting at which a quorum for the purpose of electing
Default Directors is present. If and when all accumulated dividends and the
dividend for the then current dividend period on the shares of Series B
Preferred Stock shall have been paid in full or Set Apart for Payment in full,
the holders thereof shall be divested of the foregoing voting rights (subject to
revesting in the event of each and every Payment Default) and, if all
accumulated dividends and the dividend for the then current dividend period have
been paid in full or Set Apart for Payment in full on all series of Parity Stock
upon which like voting rights have been conferred and are exercisable, the term
of office of each Default Director so elected shall immediately terminate. Any
Default Director may be removed at any time with or without cause by, and shall
not be removed otherwise than by the vote of, the holders of record of a
majority of the outstanding shares of Series B Preferred Stock and all series of
Parity Stock upon which like voting rights have been conferred and are
exercisable (voting together as a class). So long as a Payment Default shall
continue, any vacancy in the office of a Default Director may be filled by
written consent of the Default Directors remaining in office, or if none remains
in office, by a vote of the holders of record of a majority of
13
14
the outstanding shares of Series B Preferred Stock and Parity Stock upon which
like voting rights have been conferred and are exercisable when they have the
voting rights described above (voting together as a class) or by written consent
of holders of a majority of such shares. The Default Directors shall each be
entitled to one vote per director on any matter.
(c) The foregoing voting provision 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 Series B Preferred Stock shall have
been redeemed or called for redemption upon proper notice and sufficient funds
shall have been irrevocably deposited or Set Apart for Payment.
4. Liquidation, Dissolution or Winding-Up. If the Corporation shall
commence a voluntary case under the Federal bankruptcy laws or any other
applicable Federal or state bankruptcy, insolvency or similar law, or consent to
the entry of any order for relief in an involuntary case under such law or to
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) of the Corporation, or of any
substantial part of its property, or make an assignment for the benefit of its
creditors, or admit in writing its inability to pay its debts generally as they
become due, or if a decree or order for relief in respect of the Corporation
shall be entered by a court having jurisdiction in the premises in an
involuntary case under the Federal bankruptcy laws or any other applicable
Federal or state bankruptcy, insolvency or similar law, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its property,
or ordering the winding-up or liquidation of its affairs, and on account of any
such event the Corporation shall liquidate, dissolve or wind up, or if the
Corporation shall otherwise liquidate, dissolve or wind up, subject to the prior
rights of holders of any Senior Stock, but before any distribution or payment
shall be made to holders of Junior Stock, the holders of shares of Series B
Preferred Stock shall be entitled to receive, on a parity with holders of Parity
Stock, out of the assets of the Corporation legally available for distribution
to stockholders, an amount per share of Series B Preferred Stock equal to the
Stated Amount plus all Accrued Dividends thereon until the date of such
voluntary or involuntary liquidation, dissolution or winding-up of the
Corporation. If upon any liquidation, dissolution or winding-up of the
Corporation, the available assets of the Corporation are insufficient to pay the
amount of the liquidating distributions on all outstanding shares of Series B
Preferred Stock and the corresponding amounts payable on all Parity Stock in the
distribution of assets, then the holders of shares of the Series B Preferred
Stock and the Parity Stock shall share equally and ratably in any distribution
of assets of the Corporation first in proportion to the full liquidating
distributions per share to which they would otherwise be respectively entitled
and then in proportion to their respective amounts of accrued but unpaid
dividends. After payment of the full amount set forth above to which they are
entitled, the holders of shares of Series B Preferred Stock will not be entitled
to any further participation in any distribution of assets of the Corporation
and shall not be entitled to any other distribution. For the purposes of this
Section 4, neither the consolidation, merger or other business combination of
the Corporation with or into any other entity or entities nor the sale of all or
substantially all the assets of the Corporation shall be deemed to be a
liquidation, dissolution or winding-up of the Corporation.
14
15
5. Call Right.
(a) Except as provided in this Section 5, the Corporation shall have no
right to repurchase any shares of Series B Preferred Stock. At any time or from
time to time commencing six (6) months following the date which is the later of
the third anniversary of the Issuance Date or the date which is the 91st day
following the repayment in full of the Corporation's 12% Senior Notes due 2006
(the "Call Trigger Date"), the Corporation shall have the right, at its sole
option and election, to repurchase, out of funds legally available therefor,
all, or part, of the outstanding shares of Series B Preferred Stock by providing
written notice (the "Call Notice") of its intention to repurchase all, or part,
of the outstanding shares of Series B Preferred Stock on the 30th Business Day
following the date of such notice (the "Call Date") at a cash price per share of
Series B Preferred Stock (the "Call Price") equal to the Stated Amount plus all
Accrued Dividends thereon to the date of redemption. If less than all shares of
Series B Preferred Stock outstanding at the time are to be repurchased by the
Corporation pursuant to this Section 5(a), the shares of Series B Preferred
Stock to be repurchased shall be selected pro rata; provided, however, that in
the event that less than ten percent (10%) of the number of shares of Series B
Preferred Stock originally issued are then outstanding, the Corporation shall be
required to repurchase all of such outstanding shares if it elects to repurchase
any shares pursuant to this Section 5(a).
(b) The Call Notice shall state: (i) the Call Date; (ii) the Call Price;
(iii) the number of such holder's outstanding shares of Series B Preferred Stock
to be repurchased by the Corporation; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the Call
Price, including any procedures applicable to redemptions to be accomplished
through book-entry transfers; and (v) that dividends on the shares of Series B
Preferred Stock to be repurchased shall cease to accumulate as of the Call Date,
or, if such shares are not actually repurchased on such date, the date on which
the shares of Series B Preferred Stock are actually repurchased by the
Corporation.
(c) Upon the Call Date (unless the Corporation shall default in making
payment of the appropriate Call Price), whether or not certificates for shares
which are the subject of the Call Notice have been surrendered for cancellation,
the shares of Series B Preferred Stock to be repurchased shall be deemed to be
no longer outstanding, dividends on such shares of Series B Preferred Stock
shall cease to accumulate and the holders thereof shall cease to be stockholders
with respect to such shares and shall have no rights with respect thereto,
except for the rights to receive the Call Price, without interest.
6. Certain Transactions Prohibited. The Corporation shall not during any
Pricing Period or any Conversion Period, declare a dividend or make a
distribution, on the outstanding shares of Common Stock, in either case, in
shares of Common Stock, or effect a subdivision, combination, consolidation or
reclassification of the outstanding shares of Common Stock into a greater or
lesser number of shares of Common Stock.
7. Conversion Into Common Stock.
(a) Each share of Series B Preferred Stock may, at the option of the
holder thereof, be converted into shares of Common Stock at any time during any
Conversion Period, on the terms and
15
16
conditions set forth in this Section 7. Subject to the provisions for adjustment
hereinafter set forth, each share of Series B Preferred Stock shall be
convertible in the manner hereinafter set forth into a number of fully paid and
nonassessable shares of Common Stock equal to the product obtained by
multiplying the Applicable Conversion Rate (as defined below) by the number of
shares of Series B Preferred Stock being converted. The "Applicable Conversion
Rate" means the quotient obtained by dividing the Conversion Value on the date
of conversion by the Conversion Price on the date of conversion. Anything to the
contrary contained in this Charter notwithstanding, in no event shall the
Conversion Price used to compute the number of shares of Common Stock issuable
upon conversion be less than $1.00 per share. In the event that the Conversion
Price is less than $1.00 per share, then the number of shares of Common Stock
issuable upon conversion shall be computed by reference to such floor.
(b) In case of any capital reorganization or reclassification of
outstanding shares of Common Stock (other than a reclassification covered by
Section 6), or in case of any consolidation, share exchange or merger of the
Corporation with or into another Person, or in case of any sale or conveyance to
another Person of the property of the Corporation as an entirety or
substantially as an entirety (each of the foregoing being referred to as a
"Transaction"), each share of Series B Preferred Stock then outstanding shall
thereafter be convertible into, in lieu of the Common Stock issuable upon such
conversion prior to the consummation of such Transaction, the kind and amount of
shares of stock and other securities and property (including cash) receivable
upon the consummation of such Transaction by a holder of that number of shares
of Common Stock into which one share of Series B Preferred Stock was convertible
immediately prior to such Transaction (including, on a pro rata basis, the cash,
securities or property received by holders of Common Stock in any tender or
exchange offer that is a step in such Transaction). In any such case, if
necessary, appropriate adjustment (as determined in good faith by the Board of
Directors) shall be made in the application of the provisions set forth in this
Section 7 with respect to rights and interests thereafter of the holders of
shares of Series B Preferred Stock to the end that the provisions set forth
herein for the protection of the conversion rights of the Series B Preferred
Stock shall thereafter be applicable, as nearly as reasonably may be, to any
such other shares of stock and other securities and property deliverable upon
conversion of the shares of Series B Preferred Stock remaining outstanding (with
such adjustments in the conversion price and number of shares issuable upon
conversion and such other adjustments in the provisions hereof as the Board of
Directors shall determine in good faith to be appropriate). In case securities
or property other than Common Stock shall be issuable or deliverable upon
conversion as aforesaid, then all references in this Section 7 shall be deemed
to apply, so far as appropriate and as nearly as may be, to such other
securities or property.
Notwithstanding anything contained herein to the contrary, the
Corporation will not effect any Transaction unless, prior to the consummation
thereof, (i) the Surviving Person, if other than the Corporation, shall assume,
by written instrument mailed to each record holder of shares of Series B
Preferred Stock, at such holder's address as it appears on the transfer books of
the Corporation, the obligation to deliver to such holder such cash, property
and securities to which, in accordance with the foregoing provisions, such
holder is entitled. Nothing contained in this Section 7(b) shall limit the
rights of holders of the Series B Preferred Stock to convert the Series B
Preferred Stock in connection with the Transaction.
16
17
(c) The holder of any shares of Series B Preferred Stock may exercise
its right to convert such shares into shares of Common Stock by surrendering for
such purpose to the Corporation, at its principal office or at such other office
or agency maintained by the Corporation for that purpose, a certificate or
certificates representing the shares of Series B Preferred Stock to be converted
duly endorsed to the Corporation in blank accompanied by a written notice
stating that such holder elects to convert all or a specified whole number of
such shares in accordance with the provisions of this Section 7. The Corporation
will pay any and all documentary, stamp or similar issue or transfer tax and any
other taxes that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion of Series B Preferred Stock pursuant hereto. As
promptly as practicable after the surrender of such certificate or certificates
and the receipt of such notice relating thereto and, if applicable, payment of
all transfer taxes (or the demonstration to the satisfaction of the Corporation
that such taxes are inapplicable), the Corporation shall deliver or cause to be
delivered (i) certificates registered in the name of such holder representing
the number of validly issued, fully paid and nonassessable full shares of Common
Stock to which the holder of shares of Series B Preferred Stock so converted
shall be entitled and (ii) if less than the full number of shares of Series B
Preferred Stock evidenced by the surrendered certificate or certificates are
being converted, a new certificate or certificates, of like tenor, for the
number of shares evidenced by such surrendered certificate or certificates less
the number of shares converted. Such conversion shall be deemed to have been
made at the close of business on the date of receipt of such notice and of such
surrender of the certificate or certificates representing the shares of Series B
Preferred Stock to be converted so that the rights of the holder thereof as to
the shares being converted shall cease except for the right to receive shares of
Common Stock, and the person entitled to receive the shares of Common Stock
shall be treated for all purposes as having become the record holder of such
shares of Common Stock at such time.
8. Reports as to Adjustments. Whenever the number of shares of Common
Stock into which each share of Series B Preferred Stock is convertible (or the
number of votes to which each share of Series B Preferred Stock is entitled) is
adjusted as provided in Section 7, the Corporation shall promptly issue a press
release stating that the number of shares of Common Stock into which the shares
of Series B Preferred Stock are convertible has been adjusted and setting forth
the new number of shares of Common Stock (or describing the new stock,
securities, cash or other property) into which each share of Series B Preferred
Stock is convertible, as a result of such adjustment, a brief statement of the
facts requiring such adjustment and the computation thereof, and when such
adjustment became effective.
9. Reacquired Shares. Any shares of Series B Preferred Stock redeemed,
repurchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock of the Corporation and may be reissued as part of another series
of Preferred Stock of the Corporation subject to the conditions or restrictions
on authorizing, creating or issuing any class or series, or any shares of any
class or series.
10. Definitions. For the purposes of this Article V, Paragraph D., and
with respect to the Series B Preferred Stock only, the following terms shall
have the meanings indicated below:
"Accrued Dividends" to a particular date (the "Applicable Date") means
all dividends
17
18
accrued but not paid on the Series B Preferred Stock pursuant to Section 2(a),
whether or not earned or declared, accrued to the Applicable Date.
"Affiliate" or "affiliate" shall have the meaning set forth in Rule
12b-2 promulgated by the Securities and Exchange Commission under the Exchange
Act.
"Business Day" means any day other than a Saturday, Sunday, or a day on
which commercial banks in the City of New York are authorized or obligated by
law or executive order to close.
"Bylaws" means the bylaws of the Corporation, as in effect from time to
time, including any and all amendments thereto and restatements thereof.
"Call Date" shall have the meaning set forth in Section 5(a) hereof.
"Call Notice" shall have the meaning set forth in Section 5(a) hereof.
"Call Price" shall have the meaning set forth in Section 5(a) hereof.
"Call Trigger Date" shall have the meaning set forth in Section 5(a)
hereof.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing person.
"Charter" means the charter of the Corporation, as currently in effect
and as the same may be amended from time to time.
"Closing Price" per share of Common Stock (or any other security) on any
date shall be the last sale price, at 4:30 p.m., Eastern Time, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, in either case as reported on the NYSE or in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the Nasdaq National Market or American Stock Exchange, as the case
may be, or, if the Common Stock (or such other security) is not listed or
admitted to trading on any national securities exchange, the last quoted sale
price or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such other
system then in use, or, if on any such date the Common Stock (or such other
security) is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Common Stock (or such other security) selected by the Board of Directors.
"Common Stock" means the common stock, par value $0.01 per share, of the
Corporation.
18
19
"Conversion Period" means: (x) the period beginning on October 2, 2000
and ending on October 13, 2000; and (y) the period beginning on December 7, 2000
and ending on December 20, 2000.
"Conversion Price" shall be the Current Market Price for the Pricing
Period, subject to adjustment as provided in Section 7.
"Conversion Value" per share of Series B Preferred Stock shall be an
amount equal to the Stated Amount plus all Accrued Dividends, if any, thereon to
the date of conversion or redemption, as the case may be.
"Current Market Price" per share of Common Stock (or any other security)
for any Pricing Period shall be the average of the Closing Prices of a share of
Common Stock (or such other security) for the ten consecutive Trading Days
comprising the Pricing Period. If on any such Trading Day the Common Stock (or
such other security) is not quoted by any organization referred to in the
definition of Closing Price, the Current Market Price of the Common Stock (or
such other security) on such day shall be determined by an investment banking
firm of national reputation familiar with the valuation of companies
substantially similar to the Corporation (the "Investment Banking Firm")
appointed by the Board of Directors.
"Dividend Payment Date" means December 31, 2000 (with respect to the
first Dividend Payment Date) and thereafter on March 31, June 30, September 30,
and December 31 of each year, provided that no Dividend Payment Date shall occur
with respect to shares of Series B Preferred Stock which have actually been
redeemed or repurchased by the Corporation.
"Dividend Period" means the period from the Issuance Date to the first
Dividend Payment Date (but without including such Dividend Payment Date) and,
thereafter, each Dividend Payment Date to the following Dividend Payment Date
(but without including such later Dividend Payment Date).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Issuance Date" means, with respect to each share of Series B Preferred
Stock, the original date of issuance of that share.
"Junior Stock" means all classes of Common Stock of the Corporation and
each other class of Capital Stock of the Corporation or series of Preferred
Stock of the Corporation currently existing or hereafter created the terms of
which do not expressly provide that it ranks senior to, or on a parity with, the
Series B Preferred Stock as to dividend distributions and distributions upon
liquidation, winding-up and dissolution of the Corporation.
"NYSE" means the New York Stock Exchange, Inc.
"Parity Stock" means any class of Capital Stock of the Corporation or
series of Preferred Stock of the Corporation, the terms of which expressly
provide that such class or series will rank on
19
20
a parity with the Series B Preferred Stock as to dividend distributions and
distributions upon liquidation, winding-up and dissolution.
"Person" means an individual, partnership, corporation, limited
liability company or partnership, unincorporated organization, trust or joint
venture, or a governmental agency or political subdivision thereof, or other
entity of any kind.
"Preferred Stock" means the preferred stock, $0.01 par value per share,
of the Corporation.
"Pricing Period" means the ten (10) Trading Days ending one day prior to
the first day of the applicable Conversion Period.
"Senior Stock" means each other class of Capital Stock of the
Corporation or series of Preferred Stock of the Corporation, the terms of which
expressly provide that such class or series will rank senior to the Series B
Preferred Stock as to dividend distributions and distributions upon liquidation,
winding-up and dissolution of the Corporation. The existing Series A Preferred
Stock of the Corporation shall constitute Senior Stock of the Corporation
ranking senior to the Series B Preferred Stock as to dividend distributions and
distributions upon liquidation, winding-up and dissolution.
"Series A Preferred Stock" means the 8% Series A Cumulative Preferred
Stock, $0.01 par value per share, of the Corporation, the terms of which are set
forth in the Charter of the Corporation.
"Series B Preferred Stock" means the Series B Cumulative Convertible
Preferred Stock of the Corporation, $0.01 par value per share, the terms of
which are set forth in these Articles Supplementary.
"Set Apart for Payment" means the Corporation shall have irrevocably
deposited with a bank or trust company doing business in the Borough of
Manhattan, the City of New York, and having a capital and surplus of at least
$1,000,000,000, in trust for the exclusive benefit of the holders of shares of
Series B Preferred Stock, funds sufficient to satisfy the Corporation's payment
obligation.
"Stated Amount" means $24.46 per share of Series B Preferred Stock.
"Surviving Person" means the continuing or surviving Person in a merger,
consolidation, other corporate combination or the transfer of all or a
substantial part of the properties and assets of the Corporation, in connection
with which the Series B Preferred Stock or Common Stock of the Corporation is
exchanged, converted or reinstated into the securities of any other Person or
cash or any other property; provided, however, if such Surviving Person is a
direct or indirect Subsidiary of a Person, the parent entity also shall be
deemed to be a Surviving Person.
"Trading Day" means a day on which the principal national securities
exchange on which the Common Stock (or any other security) is quoted, listed or
admitted to trading is open for the transaction of business or, if the Common
Stock (or such other security) is not quoted, listed or admitted to trading on
any national securities exchange (including the NYSE), any day other than
20
21
a Saturday, Sunday, or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
11. REIT Status. Nothing contained in the Charter shall limit the
authority of the Board of Directors to take such other action as it deems
necessary or advisable to protect the Corporation and the interests of the
stockholders by the preservation of the Corporation's qualification as a real
estate investment trust for Federal income tax purposes for the taxable year
ended December 31, 1999, including without limitation the payment of dividends
in the form of Parity Stock or Junior Stock.
12. References. References to numbered sections herein refer to sections
of this Article V, Paragraph D, unless otherwise stated.
ARTICLE VI
LIMITATION ON PERSONAL LIABILITY AND INDEMNIFICATION
OF DIRECTORS AND OFFICERS.
To the maximum extent that Maryland law in effect from time to time
permits limitation of liability of directors or officers of corporations, no
person who at any time was or is a director or officer of the Corporation shall
be personally liable to the Corporation or its stockholders for money damages.
Neither the amendment nor repeal of this provision, nor the adoption or
amendment of any other provision of the charter or the Bylaws of the Corporation
inconsistent with this provision, shall limit or eliminate in any respect the
applicability of the preceding sentence with respect to any act or failure to
act which occurred prior to such amendment, repeal or adoption.
21