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EXHIBIT 4.2
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF THE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
CYTRX CORPORATION
Pursuant to Section 151 of the
Delaware General Corporation Law
CytRx Corporation, a corporation organized under the laws of the State of
Delaware (the "Corporation"), hereby certifies that, pursuant to the authority
conferred upon the Board of Directors by the Certificate of Incorporation, as
amended, of the Corporation, the Board of Directors on April 16, 1997, adopted
the following resolution creating a series of 1,000 shares of Preferred Stock
designated as Series A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (the "Board") in accordance with the
provisions of its Certificate of Incorporation, as amended, a series of
Preferred Stock of the Corporation be and it hereby is created, and that the
designation and amount thereof and the voting rights or powers, preferences and
relative, participating, optional and other special rights of the shares of
such series, and the qualifications, limitations or restrictions thereof are as
follows:
1. Series A Participating Preferred Stock. There is hereby established a
series of Preferred Stock, par value $0.01 per share, of the Corporation, and
the designation and certain terms, powers, preferences and other rights of the
shares of such series, and certain qualifications, limitations and restrictions
thereon, are hereby fixed as follows:
(i) The distinctive serial designation of this series shall be "Series A
Junior Participating Preferred Stock" (hereinafter called "this Series"). Each
share of this Series shall be identical in all with the other shares of this
Series except as to the dates from and after which dividends thereon shall be
cumulative.
(ii) The number of shares in this Series shall initially be 1,000, which
number may from time to time be increased or decreased (but not below the
number then outstanding) by the Board of Directors. Shares of this Series
purchased by the Corporation shall be canceled and shall revert to authorized
but unissued shares of Preferred Stock undesignated as to series. Shares of
this Series may be issued in fractional shares, which fractional shares shall
entitle the holder, in
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proportion to such holder's fractional share, to all rights of a holder of a
whole share of this Series.
(iii) The holders of full or fractional shares of this Series shall be
entitled to receive, when and as declared by the Board of Directors, but only
out of funds legally available therefor, dividends, (A) on each date that
dividends or other distributions payable in Common Stock of the Corporation are
payable on or in respect of Common Stock comprising part of the Reference
Package (as defined below), in an amount per whole share of this Series equal
to the aggregate amount of dividends or other distributions (other than
dividends or distributions payable in Common Stock of the Corporation) that
would be payable on such date to a holder of the Reference Package and (B) on
the last day of March, June, September and December in each year, in an amount
per whole share of this Series equal to the excess (if any) of $1.00 over the
aggregate dividends paid per whole share of this Series during the three-month
period ending on such last day. Each such dividend shall be paid to the
holders of record of shares of this Series on the date, not exceeding sixty
days preceding such dividend or distribution payment date, fixed for that
purpose by the Board of Directors in advance of payment of each particular
dividend or distribution. Dividends on each full and each fractional share of
this Series shall be cumulative from the date such full or fractional share is
originally issued; provided that any such full or fractional share originally
issued after a dividend record date and on or prior to the dividend payment
date to which such record date relates shall not be entitled to receive the
dividend payable on such dividend payment date or any amount in respect of the
period from such original issuance to such dividend payment date.
The term "Reference Package" shall initially mean 10,000 shares of Common
Stock, par value $.001 per share ("Common Stock"), of the Corporation. In the
event the Corporation shall at any time (A) declare or pay a dividend on any
Common Stock payable in Common Stock, (B) subdivide any Common Stock or (C)
combine any Common Stock into a smaller number of shares, then and in each such
case the Reference Package after such event shall be the Common Stock that a
holder of the Reference Package immediately prior to such event would hold
thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any dividends,
whether payable in cash, property or stock, in excess of full cumulative
dividends, as herein provided on this Series.
So long as any shares of this Series are outstanding, no dividend (other
than a dividend in Common Stock or in any other stock ranking junior to this
Series as to dividends and upon liquidation) shall be declared or paid or set
aside for payment or other distribution declared or made upon the Common Stock
or upon any other stock ranking junior to this Series as to dividends or upon
liquidation, nor shall any Common Stock nor any other stock of the Corporation
ranking junior to or on a parity with this Series as to dividends or upon
liquidation be redeemed, purchased or otherwise
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acquired for any consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any shares of any such stock) by the
Corporation (except by conversion into or exchange for stock of the Corporation
ranking junior to this series as to dividends and upon liquidation), unless, in
each case, the full cumulative dividends (including the dividend to be due upon
payment of such dividend, distribution, redemption, purchase or other
acquisition) on all outstanding shares of this Series shall have been, or shall
contemporaneously be, paid.
(iv) In the event of any merger, consolidation, reclassification or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case the shares of this Series shall at the same time be similarly
exchanged or changed in an amount per whole share equal to the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, that a holder of the Reference Package would be entitled to
receive as a result of such transaction.
(v) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the holders of
full and fractional shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of the Common Stock
or any other stock of the Corporation ranking junior to this Series upon
liquidation, to be paid in full an amount per whole share of this Series equal
to-the greater of (A) $1.00 or (B) the aggregate amount distributed or to be
distributed prior to such date in connection with such liquidation, dissolution
or winding up to a holder of the Reference Package (such greater amount being
hereinafter referred to as the "Liquidation Preference"), together with accrued
dividends to such distribution or payment date, whether or not earned or
declared. If such payment shall have been made in full to all holders of
shares of this Series, the holders of shares of this Series as such shall have
no right or claim to any of the remaining assets of the Corporation.
In the event the assets of the Corporation available for distribution to
the holders of shares of this Series upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders are entitled
pursuant to the first paragraph of this Section (v), no such distribution shall
be made on account of any shares of any other class or series of Preferred
Stock ranking on a parity with the shares of this Series upon such liquidation,
dissolution or winding up unless proportionate distributive amounts shall be
paid on account of the shares of this Series, ratably in proportion to the full
distributable, amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the Corporation, the
holders of shares of this Series then outstanding shall be entitled to be paid
out of assets of the Corporation available for distribution to its stockholders
all amounts to which such holders are entitled pursuant to the first paragraph
of this Section (v) before any
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payment shall be made to the holders of Common Stock or any other stock of the
Corporation ranking junior upon liquidation to this Series.
For the purposes of this Section (v), the consolidation or merger of, or
binding share exchange by, the Corporation with any other corporation shall not
be deemed to constitute a liquidation, dissolution or winding up of the
corporation.
(vi) The shares of this series shall not be redeemable.
(vii) In addition to any other vote or consent of stockholders required by
law or by the Certificate of Incorporation, as amended, of the Corporation,
each whole share of this Series shall, on any matter, vote as a class with any
other capital stock comprising part of the Reference Package and voting on such
matter and shall have the number of votes thereon that a holder of the
Reference Package would have.
IN WITNESS WHEREOF, CytRx Corporation has caused this Certificate of
Designation to be executed as of May ____, 1997.
CYTRX CORPORATION
By: /s/ Jack J. Luchese
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Jack J. Luchese
President and Chief Executive Officer
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