Exhibit 4.1
State of Delaware PAGE 1
Office of the Secretary of State
_______________________________
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "SONIC AUTOMOTIVE, INC.", FILED IN THIS OFFICE ON THE
TWENTY-THIRD DAY OF MARCH, A.D. 1998, AT 10 O'CLOCK A.M.
(SEAL APPEARS HERE WITH THE FOLLOWING INFORMATION:)
GREAT SEAL OF THE STATE OF DELAWARE
1793 1847 1907
(Shield appears here) /s/ Edward J. Freel
Edward J. Freel, Secretary of State
2714319 8100 AUTHENTICATION:
DATE: 8986068
981109787 03-23-98
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS
OF CLASS A CONVERTIBLE PREFERRED STOCK
We, Bryan Scott Smith and Theodore M. Wright, being the President and
the Secretary, respectively, of Sonic Automotive, Inc., a Delaware corporation
(the "Corporation"), do hereby certify that, pursuant to authority conferred
upon the Board of Directors by the Amended and Restated Certificate of
Incorporation of the Corporation and the General Corporation Law of the State of
Delaware, the Board of Directors, by unanimous written consent effective as of
March 20, 1998, adopted the Resolutions Creating Class A Convertible Preferred
Stock attached hereto as EXHIBIT A.
IN WITNESS WHEREOF, we have hereunto set our hands and seals as
President and Secretary, respectively, of the Corporation this 20th day of
March, 1998, and we hereby affirm that the foregoing Certificate is our act and
deed and the act and deed of the Corporation and that the facts stated therein
are true.
SONIC AUTOMOTIVE, INC.
By: BRYAN SCOTT SMITH
---------------------------------
Name: Bryan Scott Smith
Title: President
By: THEODORE M. WRIGHT
---------------------------------
Name: Theodore M. Wright
Title: Secretary
EXHIBIT A
RESOLUTIONS CREATING CLASS A CONVERTIBLE PREFERRED STOCK
RESOLVED, that, pursuant to the authority expressly granted to and vested
in the Board of Directors of the Corporation by Section 4.06 of the Amended and
Restated Certificate of Incorporation of the Corporation, there is hereby
created a class of 300,000 shares of preferred stock, designated as Class A
Convertible Preferred Stock, par value $0.10 per share, which shall be divided
into 100,000 shares of Series I Convertible Preferred Stock, par value $0.10
per share (the "Series I Preferred Stock"), 100,000 shares of Series II
Convertible Preferred Stock, par value $0.10 per share (the "Series II
Preferred Stock"), and 100,000 shares of Series III Convertible Preferred
Stock, par value $0.10 per share (the "Series III Preferred Stock" and,
together with the Series I Preferred Stock and the Series II Preferred Stock,
collectively, the "Class A Preferred Stock"). The Board of Directors reserves
the right, at any time and from time to time, subject to the filing of a
further Certificate or Certificates of Designation with respect thereto and to
compliance with any other applicable legal requirements, to redivide or
reclassify the Class A Preferred Stock into different numbers of shares of
Series I Preferred Stock, Series II Preferred Stock and/or Series III Preferred
Stock, or into other classes of preferred stock; provided, however, that no
such redivision or reclassification shall affect any shares of Series I
Preferred Stock, Series II Preferred Stock or Series III Preferred Stock, as
the case may be, then issued and outstanding. All capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Amended and Restated Certificate of Incorporation of the Corporation as in
effect on the date hereof.
The powers, preferences and rights, and the qualifications, limitations or
restrictions, of each such Series of Class A Preferred Stock, in relation to
the other such Series of Class A Preferred Stock and in relation to the Common
Stock, shall be as follows:
Section 1. Liquidation Rights.
(a) Treatment at Liquidation, Dissolution or Winding Up. In the event of
any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, the holders of each share of the Class A
Preferred Stock shall, subject to the preferential rights, if any, of the
holders of preferred stock other than the Class A Preferred Stock, be entitled
to be paid first out of the assets of the Corporation available for
distribution to holders of the Corporation's capital stock of all classes an
amount, and no other amount, equal to $1,000 per share of Class A Preferred
Stock. If the assets of the Corporation shall be insufficient to permit the
payment in full to the holders of the Class A Preferred Stock of all amounts
distributable to them under this Subsection 1(a) and to all other holders of
preferred stock, if any, entitled to share in such assets with the holders of
the Class A Preferred Stock, then the entire assets of the Corporation
available for such distribution shall be distributed ratably among the holders
of the Class A Preferred Stock and such other holders of preferred stock in
proportion to the full preferential amount each such holder is otherwise
entitled to receive. After such payments shall have been made in full to the
holders of the Class A Preferred Stock and such other holders of preferred
stock or funds necessary for such payments shall have been set aside by the
Corporation in trust for the account of holders of Class A Preferred Stock and
such other holders of preferred stock so as to be available for such payments,
the remaining assets available for distribution shall be distributed among the
holders of the Common Stock ratably in proportion to the number of shares of
Common Stock held by them. Upon conversion of shares of Class A Preferred Stock
into shares of Class A Common Stock pursuant to Section 2 below, the holder of
such Class A Common Stock shall not be entitled to any preferential payment or
distribution in case of any liquidation, dissolution or winding up, but shall
share ratably as a holder of Class A Common Stock in any distribution of the
assets of the Corporation to all the holders of Common Stock.
(b) Distributions other than Cash. Whenever the distribution provided for
in this Section 1 shall be payable in property other than cash, the value of
such distribution shall be the fair market value of such property, as
determined in good faith by the Board of Directors of the Corporation, which
determination shall be final.
Section 2. Conversion. The Class A Preferred Stock shall be convertible as
follows:
(a) Right of Holder to Convert; Conversion Amount.
(i) Definitions. As used herein, the term "Market Price" shall mean the
average of the daily closing prices for one share of Class A Common Stock for
the twenty (20) consecutive trading days ending one (1) trading day immediately
prior to the date of determination. The closing price for each day shall be the
last regularly reported sales price, or in case no such reported sales took
place on such day, the average of the last regularly reported bid and asked
prices, in either case on the New York Stock Exchange or, if the shares of the
Class A Common Stock are not listed or admitted to trading on the New York
Stock Exchange, on the principal national securities exchange on which such
shares are listed or admitted to trading,
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or, if such shares are not so listed or admitted to trading, the average of the
highest reported bid and lowest reported asked prices as furnished by the
National Association of Securities Dealers, Inc. through NASDAQ or through a
similar organization if NASDAQ is no longer reporting such information. If
shares of the Class A Common Stock are not listed or admitted to trading on any
exchange or quoted through NASDAQ or any similar organization, the Market Price
shall be deemed to be the fair value thereof determined in good faith by the
Corporation's board of directors as expressed by a resolution of such board as
of a date which is within fifteen days of the date as of which the
determination is to be made, which determination shall be final. As used
herein, the term "Applicable Conversion Amount" shall mean the Series I
Conversion Amount, the Series II Conversion Amount or the Series III Conversion
Amount (each as hereafter defined), as the case may be. As used herein, the
term "business day" shall mean a day other than a Saturday, a Sunday or a day
in which banks are required to be closed in the State of North Carolina.
(ii) Series I Preferred Stock. Subject to the other provisions of this
Section 2, each share of Series I Preferred Stock shall be convertible, without
the payment of any additional consideration by the holder thereof and at the
option of the holder thereof, on any business day after the date of issuance of
such share, at the principal executive office of the Corporation or the
designated office of any transfer agent for the Class A Preferred Stock, into
such number (rounded to four decimal places) of fully paid and nonassessable
shares of Class A Common Stock as is determined by dividing $1,000 by the
Market Price as of the date of conversion provided in the last sentence of
Section 2(b) below (such number of shares being the "Series I Conversion
Amount"). The right of conversion with respect to any shares of Series I
Preferred Stock which shall have been called for redemption under Section 5
shall terminate at the close of business on the date of the mailing of the
notice of redemption with respect thereto; provided, however, if the
Corporation shall default in the payment of the redemption price on the
redemption date fixed in such notice of redemption, such right of conversion
shall continue.
(iii) Series II Preferred Stock. Subject to the other provisions of this
Section 2, each share of Series II Preferred Stock shall be convertible,
without the payment of any additional consideration by the holder thereof and
at the option of the holder thereof, on any business day after the date of
issuance of such share, at the principal executive office of the Corporation or
the designated office of any transfer agent for the Class A Preferred Stock,
into such number (rounded to four decimal places) of fully paid and
nonassessable shares of Class A Common Stock as is determined by dividing
$1,000 by the Market Price as of the date of issuance of such share of Series
II Preferred Stock (such number of shares being the "Series II Conversion
Amount"), subject to adjustment as provided in the following two sentences. If
the Market Price as of the date of conversion (as provided in the last sentence
of Section 2(b) below) of such share of Series II Preferred Stock is less than
ninety percent (90%) of the Market Price as of the date of issuance of such
share of Series II Preferred Stock, the Series II Conversion Amount shall be
multiplied by a fraction, the numerator of which shall be an amount equal to
ninety percent (90%) of such Market Price as of such date of issuance and the
denominator of which shall be such Market Price as of such date of conversion,
and the product obtained thereby shall be the Series II Conversion Amount. If
the Market Price as of the date of conversion (as provided in the last sentence
of Section 2(b) below) of such share of Series II Preferred Stock is more than
one hundred ten percent (110%) of the Market Price as of the date of issuance
of such share of Series II Preferred Stock, the Series II Conversion Amount
shall be multiplied by a fraction, the numerator of which shall be an amount
equal to one hundred ten percent (110%) of such Market Price as of such date of
issuance and the denominator of which shall be such Market Price as of such
date of conversion, and the product obtained thereby shall be the Series II
Conversion Amount. The right of conversion with respect to any shares of Series
II Preferred Stock which shall have been called for redemption under Section 5
shall terminate at the close of business on the date of the mailing of the
notice of redemption with respect thereto; provided, however, if the
Corporation shall default in the payment of the redemption price on the
redemption date fixed in such notice of redemption, such right of conversion
shall continue.
(iv) Series III Preferred Stock. Subject to the other provisions of this
Section 2, each share of Series III Preferred Stock shall be convertible,
without the payment of any additional consideration by the holder thereof and
at the option of the holder thereof, on any business day after the date of
issuance of such share, at the principal executive office of the Corporation or
the designated office of any transfer agent for the Class A Preferred Stock,
into such number (rounded to four decimal places) of fully paid and
nonassessable shares of Class A Common Stock as is determined by dividing
$1,000 by the Market Price as of the date of issuance of such shares of Series
III Preferred Stock (such number of shares being the "Series III Conversion
Amount"), subject to adjustment as provided in the following two sentences. If
the Market Price as of the date of conversion (as provided in the last sentence
of Section 2(b) below) of such share of Series III Preferred Stock is less than
the Market Price as of the date of issuance of such share of Series III
Preferred Stock, the Series III Conversion Amount shall be multiplied by a
fraction, the numerator of which shall be an amount equal to such Market Price
as of such date of issuance and the denominator of which shall be such Market
Price as of such date of conversion, and the product obtained thereby shall be
the Series III Conversion Amount. If the Market Price as of the date of
conversion (as provided in the last sentence of Section 2(b) below) of such
share of Series III Preferred Stock is more than one hundred ten percent (110%)
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of the Market Price as of the date of issuance of such share of Series III
Preferred Stock, the Series III Conversion Amount shall be multiplied by a
fraction, the numerator of which shall be an amount equal to one hundred ten
percent (110%) of such Market Price as of such date of issuance and the
denominator of which shall be such Market Price as of such date of conversion,
and the product obtained thereby shall be the Series III Conversion Amount. The
right of conversion with respect to any shares of Series III Preferred Stock
which shall have been called for redemption under Section 5 shall terminate at
the close of business on the date of the mailing of the notice of redemption
with respect thereto; provided, however, if the Corporation shall default in
the payment of the redemption price on the redemption date fixed in such notice
of redemption, such right of conversion shall continue.
(v) Conversion Cap. Prior to the date on which holders of the Common Stock
approve the issuance of the Class A Preferred Stock, the Corporation may not
issue, upon the conversion of shares of the Class A Preferred Stock, more than
2,249,999 shares of Class A Common Stock in the aggregate (the "Conversion Cap
Amount"). In lieu of any shares of Class A Common Stock to which a holder of
Class A Preferred Stock would otherwise be entitled upon conversion but for the
Conversion Cap Amount (the "Excess Conversion Common Shares"), the Corporation
shall pay cash equal to the number of such Excess Conversion Common Shares
multiplied by the Market Price in effect at the time of conversion.
(vi) Conversion During First Year. The right of any holder to convert any
of such holder's shares of the Class A Preferred Stock during the one (1) year
period commencing with the date of issuance of such Class A Preferred Stock
shall be subject to the Corporation's right of optional redemption under
Section 5 hereof. The holder of such share of Class A Preferred Stock shall not
exercise such holder's right to convert such share of Class A Preferred Stock
during such one (1) year period unless such holder shall have first delivered
to the Corporation, at its address at 5401 E. Independence Boulevard,
Charlotte, North Carolina 28212, Attention: Chief Financial Officer, or at such
other address as the Corporation may notify the holder in writing, written
notice of such holder's intention to convert a specified number of shares of
Class A Preferred Stock. For a period of ten (10) business days after receipt
by the Corporation of such notice, the Corporation shall have the right to
exercise its right of optional redemption under Section 5 hereof with respect
to some or all of the shares of Class A Preferred Stock proposed to be
converted by such holder. In the event that the Corporation shall not have
exercised such right of redemption within such ten (10) business day period,
such holder shall be entitled to convert such shares of Class A Preferred Stock
in accordance with the mechanics set forth in Subsection 2(b) below.
(b) Mechanics of Optional Conversions. In order for any holder of the
Class A Preferred Stock to convert the same into full shares of Class A Common
Stock pursuant to Subsection 2(a), such holder shall surrender the certificate
or certificates therefor, duly endorsed, at the principal executive office of
the Corporation or the designated office of any transfer agent for the Class A
Preferred Stock, together with written notice to the Corporation at such office
that such holder elects to convert the number of shares of Class A Preferred
Stock set forth therein. No fractional shares of Class A Common Stock shall be
issued upon conversion of the Class A Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the Market
Price as of the date of the conversion. The Corporation shall, as soon as
practicable thereafter, issue and deliver at such office to such holder of the
Class A Preferred Stock, and in the name or names shown on such surrendered
certificate or certificates, a certificate or certificates for the number of
shares of Class A Common Stock to which such holder shall be entitled as
aforesaid, together with cash in lieu of any fraction of a share. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares of Class A Preferred Stock
to be converted, and the person or persons entitled to receive the shares of
Class A Common Stock issuable upon conversion shall be treated for all purposes
as the record holder or holders of such shares of Class A Common Stock on such
date.
(c) Mandatory Conversion at the Option of the Corporation. After the
second anniversary of the date of its issuance, any share of the Class A
Preferred Stock which has not been converted into Class A Common Stock shall be
subject, at the option of the Corporation, to mandatory conversion as
hereinafter provided. The Corporation may exercise its option to convert any
such share of Class A Preferred Stock by giving notice in writing of such
conversion to the holder of such share of Class A Preferred Stock (a "Mandatory
Conversion Notice") at such holder's address set forth in the books and records
of the Corporation. Upon the giving of a Mandatory Conversion Notice with
respect thereto, each such share of Class A Preferred Stock referred to in such
Mandatory Conversion Notice shall automatically and without any further action
on the part of the holder of such Class A Preferred Stock be converted into the
number of shares (rounded to four decimal places) of fully paid and
nonassessable Class A Common Stock based upon the Applicable Conversion Amount
as of the date of such Mandatory Conversion Notice. Until surrendered in
accordance with the provisions of Subsection 2(d) below, the certificate or
certificates evidencing the shares of Class A Preferred Stock so converted
shall be deemed to represent the applicable number of shares of Class A Common
Stock into which such shares of Class A Preferred Stock have been so converted.
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(d) Mechanics of Mandatory Conversion. Upon mandatory conversion pursuant
to Subsection 2(c) above, the Corporation shall not be obligated to issue
certificates evidencing the shares of Class A Common Stock issuable upon such
conversion unless the certificate or certificates evidencing such share or
shares of the Class A Preferred Stock being converted are either delivered to
the Corporation or its designated transfer agent for the Class A Preferred
Stock, or the holder notifies the Corporation or such transfer agent that such
certificate or certificates have been lost, stolen, or destroyed and executes
an agreement satisfactory to the Corporation to indemnify the Corporation from
any loss incurred by it in connection therewith and, if the Corporation so
elects, provides an appropriate indemnity bond. Upon the mandatory conversion
of one or more shares of the Class A Preferred Stock, the holder or holders of
such Class A Preferred Stock shall surrender the certificates representing such
shares at the principal executive office of the Corporation or of its
designated transfer agent for the Class A Preferred Stock. Thereupon, there
shall be issued and delivered to such holder or holders, promptly at such
office and in the name or names as shown on such surrendered certificate or
certificates, a certificate or certificates for the number of shares of Class A
Common Stock into which the shares of the Class A Preferred Stock surrendered
were convertible as of the date of the applicable Mandatory Conversion Notice.
No fractional shares of Class A Common Stock shall be issued upon such
mandatory conversion of the Class A Preferred Stock. In lieu of any fractional
share to which the holder would otherwise be entitled, the Corporation shall
pay cash equal to such fraction multiplied by the Market Price as of the date
of conversion. The right of the Corporation to effectuate mandatory conversion
of the Class A Preferred Stock may be exercised by the Corporation, in its
discretion, as to any or all shares of Class A Preferred Stock held by any or
all of the holders of the Class A Preferred Stock; and the exercise (or
non-exercise) of such right by the Corporation with respect to any shares of
Class A Preferred Stock held by one holder shall not in any way imply any
obligation or duty of the Corporation to exercise (or not to exercise) such
right with respect to any shares of Class A Preferred Stock held by any other
holder.
(e) Adjustments for Stock Dividends, Stock Distributions, Subdivisions,
Combinations or Consolidations of Common Stock. In the event that all the
outstanding shares of Class A Common Stock shall be increased by way of stock
dividend, stock distribution or subdivision, the Applicable Conversion Amount
in effect immediately prior to such stock dividend, stock distribution or
subdivision shall, concurrently with the effectiveness of such stock dividend,
stock distribution or subdivision, be proportionately increased. In the event
that all the outstanding shares of Class A Common Stock shall be combined or
consolidated, by reclassification or otherwise, into a lesser number of shares
of Class A Common Stock, the Applicable Conversion Amount in effect immediately
prior to such combination or consolidation shall, concurrently with the
effectiveness of such combination or consolidation, be proportionately
decreased.
(f) Adjustment for Reclassification, Exchange, or Substitution. In the
event that at any time or from time to time after the date of issuance of a
share of Class A Preferred Stock, the Class A Common Stock issuable upon the
conversion of such share of the Class A Preferred Stock shall be changed into
the same or a different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares or stock dividend provided for above, or a
merger, consolidation, or sale of assets provided for below), then and in each
such event the holder of such share of Class A Preferred Stock shall have the
right thereafter to convert such share into the kind and amount of shares of
stock and other securities and property receivable upon such reorganization,
reclassification, or other change, by holders of the number of shares of Class
A Common Stock into which such share of Class A Preferred Stock would have been
converted immediately prior to such reorganization, reclassification, or
change.
(g) Adjustment for Merger, Consolidation or Sale of Assets. In the event
that at any time or from time to time after the date of issuance of a share of
Class A Preferred Stock, the Corporation shall merge or consolidate with or
into another entity or sell all or substantially all of its assets, such share
of Class A Preferred Stock shall thereafter be convertible into the kind and
amount of shares of stock or other securities or property to which a holder of
the number of shares of Class A Common Stock deliverable upon conversion of
such share of Class A Preferred Stock would have been entitled upon such
consolidation, merger or sale; and, in such case, appropriate adjustment (as
determined in good faith by the Board of Directors) shall be made in the
application of the provisions of this Section 2 set forth with respect to the
rights and interest thereafter of the holders of Class A Preferred Stock, to
the end that the provisions set forth in this Section 2 (including provisions
with respect to changes in and other adjustments of the Applicable Conversion
Amount) shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter deliverable upon
the conversion of the Class A Preferred Stock.
(h) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment pursuant to this Section 2, the Corporation at its expense
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and furnish to each affected holder of Class A Preferred Stock a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based.
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(i) Common Stock Reserved. The Corporation shall reserve and keep
available out of its authorized but unissued Class A Common Stock such number
of shares of Class A Common Stock as shall from time to time be sufficient to
effect conversion of the Class A Preferred Stock.
Section 3. Voting Rights.
(a) Notice of Meeting. Except as otherwise required by law or as
hereinafter set forth, the holders of the Class A Preferred Stock shall be
entitled to notice of any meeting of stockholders at which any matter is to be
voted on by the holders of the Class A Common Stock.
(b) Voting. Except as otherwise required by law or as hereinafter set
forth, the holders of the Class A Preferred Stock shall be entitled to vote
with the holders of the Class A Common Stock on any matter which is to be voted
on by the holders of the Class A Common Stock, whether such matter is to be
voted on by the holders of the Class A Common Stock and the holders of the
Class B Common Stock voting together as a single class, or by the holders of
the Class A Common Stock voting separately as a class. Each holder of Class A
Preferred Stock shall have that number of votes equal to the number of shares
of Class A Common Stock into which the shares of Class A Preferred Stock held
by such holder could be converted on the date for determination of stockholders
entitled to vote at a meeting.
With respect to all questions as to which, under law, stockholders are
entitled to vote by classes, the Class A Preferred Stock shall vote together as
a single class separately from the Common Stock.
Section 4. Dividend Rights. The holders of the Class A Preferred Stock shall
have no preferential dividend rights. Subject to the preferential rights, if
any, of the holders of preferred stock other than the Class A Preferred Stock,
each holder of the Class A Preferred Stock shall be entitled to receive all
dividends and other distributions of cash and other property as may be declared
on the Class A Common Stock by the Board of Directors from time to time out of
assets or funds of the Corporation legally available therefor, as if all shares
of the Class A Preferred Stock held by such holder had been converted into the
applicable number of shares of Class A Common Stock on the day any such
dividend was declared.
Section 5. Redemption. The Class A Preferred Stock shall be subject to optional
redemption by the Corporation as follows:
(a) Right of Corporation to Redeem; Redemption Price.
(i) Series I Preferred Stock. Any share of the Series I Preferred Stock
which has not been surrendered for optional conversion by the holder thereof
and as to which the Corporation has not issued a Mandatory Conversion Notice
may be redeemed by the Corporation, at the option of the Corporation, at any
time after the date on which such share of Series I Preferred Stock was first
issued at a redemption price equal to $1,000 per share.
(ii) Series II Preferred Stock. Any share of the Series II Preferred Stock
which has not been surrendered for optional conversion by the holder thereof
and as to which the Corporation has not issued a Mandatory Conversion Notice
may be redeemed by the Corporation, at the option of the Corporation, at any
time after the date on which such share of Series II Preferred Stock was first
issued at a redemption price per share equal to (A) if the date of the mailing
of the notice of redemption is on or before the second anniversary of the date
of issuance of such share of Series II Preferred Stock, the greater of (I)
$1,000 or (II) the Market Price as of the date of the mailing of such notice of
redemption multiplied by the number of shares of Class A Common Stock into
which such share of Series II Preferred Stock could be converted as of the date
of the mailing of such notice of redemption, or (B) if the date of the mailing
of the notice of redemption is after the second anniversary of the date of
issuance of such share of Series II Preferred Stock, the Market Price as of the
date of the mailing of such notice of redemption multiplied by the number of
shares of Class A Common Stock into which such share of Series II Preferred
Stock could be converted as of the date of the mailing of such notice of
redemption.
(iii) Series III Preferred Stock. Any share of the Series III Preferred
Stock which has not been surrendered for optional conversion by the holder
thereof and as to which the Corporation has not issued a Mandatory Conversion
Notice may be redeemed by the Corporation, at the option of the Corporation, at
any time after the date on which such share of Series III Preferred Stock was
first issued at a redemption price per share equal to (A) if the date of the
mailing of the notice of redemption is on or before the second anniversary of
the date of issuance of such share of Series III Preferred Stock, the greater
of (I) $1,000 or (II) the Market Price as of the date of the mailing of such
notice of redemption multiplied by the number of shares of Class A Common Stock
into which such share of Series III Preferred Stock could be converted as of
the date of the mailing of such notice of redemption, or (B) if the date of the
mailing of the notice of redemption is after the second anniversary of the date
of issuance of such share of Series III Preferred Stock, the Market Price as of
the date of the mailing of such notice of redemption multiplied by the number
of shares of Class A Common Stock into which such share of Series III Preferred
Stock could be converted as of the date of the mailing of such notice of
redemption.
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(b) Notice of Redemption. Notice of redemption shall be sent by first
class mail, postage prepaid, to the holder of record of the Class A Preferred
Stock to be redeemed, not less than 30 days nor more than 60 days prior to the
redemption date set forth therein, at its address as it appears on the books of
the Corporation. Such notice shall set forth (i) the date and place of
redemption; and (ii) the number of shares to be redeemed and the redemption
price with respect thereto. In the event that a notice of redemption is given
under this Subsection 5(b), the Corporation shall be obligated to redeem the
Class A Preferred Stock on the date and in the amounts set forth in the notice.
(c) If, on or before a redemption date, the funds necessary for such
redemption shall have been set aside by the Corporation and deposited with a
bank or trust company, in trust for the pro rata benefit of the holders of the
Class A Preferred Stock that has been called for redemption, then,
notwithstanding that any certificates for shares that have been called for
redemption shall not have been surrendered for cancellation, the shares
represented thereby shall no longer be deemed outstanding from and after such
redemption date, and all rights of holders of such shares so called for
redemption shall forthwith, after such redemption date, cease and terminate
with respect to such shares, excepting only the right to receive the redemption
funds therefor to which they are entitled, but without interest. Any interest
accrued on funds so deposited and unclaimed by stockholders entitled thereto
shall be paid to such stockholders at the time their respective shares are
redeemed or to the Corporation at the time unclaimed amounts are paid to it.
(d) The right of the Corporation to redeem the Class A Preferred Stock may
be exercised by the Corporation, in its discretion, as to any or all shares of
Class A Preferred Stock held by any or all of the holders of the Class A
Preferred Stock; and the exercise (or non-exercise) of such right by the
Corporation with respect to any shares of Class A Preferred Stock held by one
holder shall not in any way imply any obligation or duty of the Corporation to
exercise (or not to exercise) such right with respect to any shares of Class A
Preferred Stock held by any other holders.
Section 7. Waiver. Except to the extent prohibited by applicable law, the
Corporation may waive any right it may have hereunder. Any such waiver shall be
in writing; and no waiver of (or failure to waive) any such right by the
Corporation in any one instance shall constitute a waiver (or non-waiver) by
the Corporation of a similar or other right in any other instance.
Section 8. Residual Rights. Subject to the preferential rights, if any, of the
holders of preferred stock other than the Class A Preferred Stock, all rights
accruing to the outstanding shares of the Corporation not expressly provided
for to the contrary herein shall be vested in the Common Stock.
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