EXHIBIT 4.4
ARTICLES OF AMENDMENT TO THE SECOND AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF MCI WORLDCOM, INC.
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1.
The name of the corporation is MCI WORLDCOM, Inc. (the
"Corporation").
2.
Effective the date hereof, Article One of the Corporation's Second
Amended and Restated Articles of Incorporation, as amended, is amended, in its
entirety, to read as follows:
ONE
The name of this corporation is WorldCom, Inc. This
corporation is referred to hereinafter as the "Corporation."
3.
All other provisions of the Second Amended and Restated Articles of
Incorporation, as previously amended, shall remain in full force and effect.
4.
The foregoing amendment was approved and adopted on April 28, 2000
by the Board of Directors of the Corporation in accordance with the provisions
of Section 14-2-1002 of the Georgia Business Corporation Code. Shareholder
action was not required.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be executed by its duly authorized officer as of May 1, 2000.
MCI WORLDCOM, INC.
By: /s/ Bernard J. Ebbers
-------------------------------------
Bernard J. Ebbers, President
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ARTICLES OF AMENDMENT TO THE SECOND AMENDED AND
RESTATED ARTICLES OF INCORPORATION OF MCI WORLDCOM, INC.
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1.
The name of the corporation is MCI WORLDCOM, Inc. (the
"Corporation").
2.
Effective the date hereof, the Corporation's Second Amended and
Restated Articles of Incorporation, as amended, is further amended to add a new
Article Seven A to read in its entirety as follows:
SEVEN A
A series of the class of authorized preferred stock, par value $.01
per share, of the Corporation is hereby created having the designation and
number of shares thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations and restrictions thereof, as are set forth
on Exhibit D.
3.
All other provisions of the Second Amended and Restated Articles of
Incorporation, as previously amended, shall remain in full force and effect.
4.
The foregoing amendment was approved and duly adopted by the Board
of Directors of the Corporation on September 9, 1999, in accordance with the
provisions of Sections 14-2-602 and 14-2-1002 of the Georgia Business
Corporation Code. Shareholder action was not required.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be executed by its duly authorized officer this 1st day of October,
1999.
MCI WORLDCOM, INC.
By: /s/ Bernard J. Ebbers
---------------------------------
Bernard J. Ebbers, President
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ARTICLES OF AMENDMENT TO THE SECOND AMENDED AND
RESTATED ARTICLES OF INCORPORATION OF MCI WORLDCOM, INC.
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1.
The name of the corporation is MCI WORLDCOM, Inc. (the
"Corporation").
2.
Effective the date hereof, Section A of Article Four of the
Corporation's Second Amended and Restated Articles of Incorporation is amended,
in its entirety, to read as follows:
A. Common Stock. The authorized voting common stock of the
Corporation is five billion (5,000,000,000) shares, par value $.01
per share.
3.
Effective the date hereof, Section 1 of Exhibit C of the Second
Amended and Restated Articles of Incorporation is amended, in its entirety, to
read as follows:
Section 1. Designation and Amount.
There shall be a series of the Preferred Stock which shall be
designated as the "Series 3 Junior Participating Preferred Stock," par value
$.01 per share, and the number of shares constituting such series shall be
5,000,000. Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce the number of
shares of Series 3 Junior Participating Preferred Stock to a number less than
that of the shares then outstanding plus the number of shares issuable upon
exercise of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Company.
4.
All other provisions of the Second Amended and Restated Articles of
Incorporation, as previously amended, shall remain in full force and effect.
5.
The amendment in Article 2, above, was duly approved by the
shareholders of the Corporation in accordance with the provisions of Section
14-2-1003 of the Georgia Business Corporation Code and adopted on May 20, 1999.
6.
The amendment in Article 3, above, was approved and adopted by the
Board of Directors of the Corporation in accordance with the provisions of
Section 14-2-1002 of the Georgia Business Corporation Code. Shareholder action
was not required.
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IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be executed by its duly authorized officer this 20th day of May,
1999.
MCI WORLDCOM, INC.
By: /s/ Bernard J. Ebbers
--------------------------------
Bernard J. Ebbers, President
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ARTICLES OF AMENDMENT
TO THE
SECOND AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF WORLDCOM, INC.
1.
The name of the corporation is WorldCom, Inc. (the "Corporation").
2.
Effective the date hereof, Article One of the Corporation's Second
Amended and Restated Articles of Incorporation is amended, in its entirety, to
read as follows:
ONE
The name of this corporation is MCI WORLDCOM, Inc. This corporation
is referred to hereinafter as the "Corporation."
3.
All other provisions of the Second Amended and Restated Articles of
Incorporation shall remain in full force and effect.
4.
The foregoing amendment was approved and adopted by the Board of
Directors of the Corporation in accordance with the provisions of Section
14-2-1002 of the Georgia Business Corporation Code. Shareholder action was not
required.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be executed by its duly authorized officer this 14th day of
September, 1998.
WORLDCOM, INC.
/s/ Bernard J. Ebbers
-----------------------------------
Bernard J. Ebbers, President
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SECOND AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
WORLDCOM, INC.
ONE
The name of this corporation is WORLDCOM, INC. This corporation is
referred to hereinafter as the "Corporation."
TWO
The Corporation shall have perpetual duration.
THREE
The Corporation has been organized as a corporation for profit
pursuant to the Georgia Business Corporation Code, for the purpose of engaging
in any lawful activities whatsoever.
FOUR
A. Common Stock. The authorized voting common stock of the Corporation is
two billion five hundred million (2,500,000,000) shares, par value $.01 per
share.
B. Preferred Stock. The authorized preferred stock of the Corporation is
fifty million (50,000,000) shares, par value $.01 per share. The Corporation,
acting by its board of directors, without action by the shareholders, may, from
time to time by resolution and upon the filing of such certificate or articles
of amendment as may be required by the Georgia Business Corporation Code as then
in effect, authorize the issuance of shares of preferred stock in one or more
series, determine the preferences, limitations and relative rights of the class
or of any series within the class, and designate the number of shares within
that series.
FIVE
A series of the class of authorized preferred stock, par value $.01
per share, of the Corporation is hereby created having the designation and
number of shares thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations and restrictions thereof, as are set forth
on Exhibit A.
SIX
A series of the class of authorized preferred stock, par value $.01
per share, of the Corporation is hereby created having the designation and
number of shares thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations and restrictions thereof, as are set forth
on Exhibit B.
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SEVEN
A series of the class of authorized preferred stock, par value $.01
per share, of the Corporation is hereby created having the designation and
number of shares thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations and restrictions thereof, as are set forth
on Exhibit C.
EIGHT
Subject to the provisions of Article THIRTEEN, each share of common
stock of the Corporation shall have unlimited voting rights and shall be
entitled to receive the net assets of the Corporation upon dissolution, except
as express1y provided herein. The preferred stock of the Corporation shall have
such voting rights as are set forth in Exhibits A, B or C hereto or in the
certificate or articles of amendment filed to authorize the issuance of shares
of preferred stock in one of more series and as are provided by law.
NINE
Shareholders shall not have the preemptive right to acquire unissued
shares of the Corporation.
TEN
No director of the Corporation shall be liable to the Corporation or
to its shareholders for monetary damages for breach of duty of care or other
duty as a director, except for liability (i) for any appropriation, in violation
of his duties, of any business opportunity of the Corporation; (ii) for acts or
omissions which involve intentional misconduct or a knowing violation of the
law; (iii) for the types of liability set forth in section 14-2-832 of the
Revised Georgia Business Corporation Code; or (iv) for any transaction from
which the director received an improper personal benefit. If the Georgia
Business Corporation Code is amended to authorize corporate action further
limiting the personal liability of directors, then the liability of a director
of the Corporation shall be limited to the fullest extent permitted by the
Georgia Business Corporation Code, as so amended. Any repeal or modification of
the foregoing paragraph by the shareholders of the Corporation shall not
adversely affect any right or protection of a director of the Corporation
existing immediately prior to the time of such repeal or modification.
ELEVEN
(a) In addition to the requirements of the provisions of any series
of preferred stock which may be outstanding, and whether or not a vote of the
shareholders is otherwise required, the affirmative vote of the holders of not
less than seventy percent (70%) of the Voting Stock shall be required for the
approval or authorization of any Business Transaction with a Related Person, or
any Business Transaction in which a Related Person has an interest (other than
only a proportionate interest as a shareholder of the corporation); provided,
however, that the seventy percent (70%) voting requirement shall not be
applicable if (i) the Business Transaction is Duly Approved by the Continuing
Directors, or (ii) all of the following conditions are satisfied:
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(i) the aggregate amount of cash and the fair market value of the
property, securities or other consideration to be received per share (on
the date of effectiveness of such Business Transaction) by holders of
capital stock of the corporation (other than such Related Person) in
connection with such Business Transaction is at least equal in value to
such Related Person's Highest Stock Price;
(ii) the consideration to be received by holders of capital stock of
the Corporation in connection with such Business Transaction is in (a)
cash, or (b) if the majority of the shares of any particular class or
series of stock of the Corporation as to which the Related Person is the
Beneficial Owner shall have been acquired for a consideration in a form
other than cash, in the same form of Consideration used by the Related
Person to acquire the largest number of shares of such class or series of
stock;
(iii) after such Related Person has become a Related Person and
prior to the consummation of such Business Transaction, such Related
Person shall not have become the Beneficial Owner of any additional shares
of capital stock of the Corporation or securities convertible into capital
stock of the Corporation, except (i) as a part of the transaction which
resulted in such Related Person becoming a Related Person or (ii) as a
result of a pro rata stock dividend or stock split;
(iv) prior to the consummation of such Business Transaction, such
Related Person shall not have, directly or indirectly, except as Duly
Approved by the Continuing Directors (i) received the benefit (other than
only a proportionate benefit as a shareholder of the corporation) of any
loans, advances, guarantees, pledges or other financial assistance or tax
credits or tax advantages provided by the Corporation or any of its
subsidiaries, (ii) caused any material change in the Corporation's
business or equity capital structure, including, without limitation, the
issuance of shares of capital stock of the Corporation, or other
securities convertible into or exercisable for such shares, or (iii)
caused the Corporation to fail to declare and pay at the regular date
therefor quarterly cash dividends on the outstanding capital stock of the
Corporation entitled to receive dividends, on a per share basis at least
equal to the cash dividends being paid thereon by the Corporation
immediately prior to the date on which the Related Person became a Related
Person; and
(v) a proxy or information statement describing the proposed
Business Transaction and complying with the requirements of the Securities
Exchange Act of 1934, as amended (the "Act"), and the rules and
regulations thereunder (or any subsequent provisions replacing the Act or
such rules or regulations) shall be mailed to shareholders of the
Corporation at least thirty (30) days prior to the consummation of such
Business Transaction (whether or not such proxy or information statement
is required to be mailed pursuant to the Act and such rules and
regulations or subsequent provisions).
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(b) For the purpose of this Article ELEVEN:
(i) The term "Affiliate", used to indicate a relationship to a
specified person, shall mean a person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with, such specified person.
(ii) The term "Associate", used to indicate a relationship with a
specified person, shall mean (A) any corporation, partnership or other
organization of which such specified person is an officer or partner, (B)
any trust or other estate in which such specified person has a substantial
beneficial interest or as to which such specified person serves as trustee
or in a similar fiduciary capacity, (C) any relative or spouse of such
specified person who has the same home as such specified person or who is
a director or officer of the corporation or any of its subsidiaries, and
(D) any person who is a director, officer or partner of such specified
person or of any corporation (other than the corporation or any
wholly-owned subsidiary of the corporation), partnership or other entity
which is an Affiliate of such specified person.
(iii) The term "Beneficial Owner" shall be defined by reference to
Rule 13d-3 under the Act as in effect on September 15, 1993; provided,
however, that any individual, corporation, partnership, group, association
or other person or entity which has the right to acquire any capital stock
of the corporation having voting power at any time in the future, whether
such right is contingent or absolute, pursuant to any agreement,
arrangement or understanding or upon exercise of conversion rights,
warrants or options, or otherwise, shall be deemed the Beneficial Owner of
such capital stock.
(iv) The term "Business Transaction" shall mean: (A) any merger,
share exchange or consolidation involving the Corporation or a subsidiary
of the Corporation; (B) any sale, lease, exchange, transfer or other
disposition (in one transaction or a series of related transactions),
including, without limitation, a mortgage, pledge or any other security
device of all or any Substantial Part of the assets either of the
Corporation or of a subsidiary of the Corporation; (C) any sale, lease,
exchange, transfer or other disposition (in one transaction or a series of
related transactions) of all or any Substantial Part of the assets of any
entity to the Corporation or a subsidiary of the Corporation; (D) the
issuance, sale, exchange, transfer or other disposition (in one
transaction or a series of related transactions) by the Corporation or a
subsidiary of the Corporation of any securities of the Corporation or any
subsidiary of the Corporation in exchange for cash, securities or other
property, or a combination thereof, having an aggregate fair market value
of $15 million or more; (E) any merger, share exchange or consolidation of
the Corporation with any of its subsidiaries or any similar transaction in
which the Corporation is not the survivor and the charter or certificate
or articles of incorporation of the consolidated or surviving Corporation
do not contain provisions substantially similar to those in this Article
ELEVEN; (F) any recapitalization or reorganization of the Corporation or
any reclassification of the securities of the Corporation (including,
without limitation, any reverse stock split) or other transaction that
would have the effect of increasing the voting power of a Related Person
or reducing the number of shares of each class of voting securities
outstanding; (G) any liquidation, spin-off, split-off, split-up or
dissolution of the Corporation; and (H) any agreement, contract or other
arrangement
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providing for any of the transactions described in this definition of
Business Transaction or having a similar purpose or effect.
(v) The term "Continuing Director" shall mean a director who either
was a member of the Board of Directors of the Corporation on September 15,
1993, or who became a director of the Corporation subsequent to such date
and whose election or nomination for election by the Corporation's
shareholders was Duly Approved by the Continuing Directors then on the
Board, either by a specific vote or by approval of the proxy statement
issued by the Corporation on behalf of the Board of Directors in which
such person is named as nominee for director; provided, however, that in
no event shall a director be considered a "Continuing Director" if such
director is a Related Person and the Business Transaction to be voted upon
is with such Related Person or is one in which such Related Person has an
interest (other than only a proportionate interest as a shareholder of the
Corporation).
(vi) The term "Duly Approved by the Continuing Directors" shall mean
an action approved by the vote of at least a majority of the Continuing
Directors then on the Board; provided, however, that if the votes of such
Continuing Directors in favor of such action would be insufficient to
constitute an act of the Board of Directors (if a vote by the entire Board
of Directors were to have been taken), then such term shall mean an action
approved by the unanimous vote of the Continuing Directors so long as
there are at least three (3) Continuing Directors on the Board of
Directors at the time of such unanimous vote.
(vii) The term "Fair Market Value", in the case of stock, means the
highest closing sale price during the 30-day period immediately preceding
the date in question of a share of such stock on the Composite Tape for
New York Stock Exchange-Listed Stocks, or, if such stock is not on such
Exchange, on the principal United States securities exchange registered
under the Act on which such stock is listed, or, if such stock is not
listed on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period preceding the
date in question on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use, or if no such
quotations are available, the fair market value on the date in question of
a share of such stock as determined by a majority of the Continuing
Directors in good faith.
(viii) The term "Highest Stock Purchase Price" shall mean the
greatest of the following:
(A) the highest amount of consideration paid by a Related Person for
a share of capital stock of the Corporation (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) in the transaction
which resulted in such Related Person becoming a Related Person or within two
years prior to the first public announcement of the Business Transaction (the
"Announcement Date"), whichever is higher; provided, however, that the Highest
Stock Purchase Price calculated under this subsection (A) shall be appropriately
adjusted to reflect the occurrence of any reclassification, recapitalization,
stock-split, reverse stock-split or other similar corporate readjustment in the
number of outstanding shares of capital stock of the
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Corporation between the last date upon which such Related Person paid the
Highest Stock Purchase Price up to the effective date of the merger, share
exchange or consolidation or the date of distribution to shareholders of the
Corporation of the proceeds from the sale of substantially all of the assets of
the Corporation referred to in subparagraph (i) of Section (a)(ii) of this
Article ELEVEN;
(B) the Fair Market Value per share of the respective classes and
series of stock of the Corporation on the Announcement Date;
(C) the Fair Market Value per share of the respective classes and
series of stock of the Corporation on the date that the Related Person becomes a
Related Person;
(D) if applicable, the Fair Market Value per share determined
pursuant to subsection (b)(viii)(B) or (C) of this Article ELEVEN, whichever is
higher, multiplied by the ratio of (i) the highest price per share (including
any brokerage commissions, transfer taxes or soliciting dealers' fees and
adjusted for any subsequent stock dividends, splits, combinations,
recapitalizations, reclassifications or other such reorganizations) paid to
acquire any shares of such respective classes and series Beneficially owned by
the Related Person within the two years prior to the Announcement Date, to (ii)
the Fair market value per share (adjusted for any subsequent stock dividends,
splits, combinations, recapitalizations, reclassifications or other such
reorganizations) of shares of such respective classes and series on the first
day in the two-year period ending on the Announcement Date on which such shares
Beneficially owned by the Related Person were acquired; or
(E) the amount per share of any preferential payment to which
holders of shares of such respective classes and series are entitled in the
event of a liquidation, dissolution or winding up of the Corporation.
(ix) The term "Preferred Stock" shall mean each class or series of
capital stock which may from time to time be authorized in or by these
Second Amended and Restated Articles of Incorporation (as amended from
time to time) which is not designated as "Common Stock."
(x) The phrase "property, securities or other consideration to be
received", for the purpose of subparagraph (i) of Section (a)(ii) of this
Article ELEVEN and in the event of a merger in which the corporation is
the surviving corporation, shall include, without limitation, common stock
of the Corporation retained by its shareholders (other than such Related
Person).
(xi) The term "Related Person" shall mean and include (A) any
individual, corporation, partnership, group, association or other person
or entity which, together with its Affiliates and Associates, is the
Beneficial Owner of not less than ten percent (10%) of the voting power of
the issued and outstanding capital stock of the Corporation entitled to
vote or was the Beneficial Owner of not less than ten percent (10%) of the
voting power of the issued and outstanding capital stock of the
Corporation entitled to vote (x) at the time the definitive agreement
providing for the Business Transaction (including any amendment thereof)
was entered into, (Y) at the time a resolution approving the Business
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Transaction was adopted by the Board of Directors of the Corporation, or
(z) as of the record date for the determination of shareholders entitled
to notice of and to vote on or consent to the Business Transaction, and
(B) any Affiliate or Associate of any such individual, Corporation,
partnership, group, association or other person or entity; provided,
however, and notwithstanding anything in the foregoing to the contrary,
that the term "Related Person" shall not include the Corporation, a more
than 90% owned subsidiary of the Corporation, any employee stock ownership
or other employee benefit plan of either the Corporation or any more than
90% owned subsidiary of the Corporation, or any trustee of or fiduciary
with respect to any such plan when acting in such capacity.
(xii) The term "Substantial Part" shall mean more than twenty
percent (20%) of the total assets of the entity in question, as reflected
on the most recent consolidated balance sheet of such entity existing at
the time the shareholders of the Corporation would be required to approve
or authorize the Business Transaction involving the assets constituting
any such Substantial Part.
(xiii) The term "Voting Stock" shall mean all outstanding shares of
capital stock of the Corporation whose holders are present at a meeting of
shareholders, in person or by proxy, and which entitle their holders to
vote generally in the election of directors, and considered for the
purpose of this Article ELEVEN as one class.
(c) For the purpose of this Article ELEVEN, so long as Continuing
Directors constitute at least two-thirds (2/3) of the entire Board of Directors
of the Corporation, the Board of Directors shall have the power to make a good
faith determination, on the basis of information known to them, of (i) the
number of shares of Voting Stock of which any person is the Beneficial Owner,
(ii) whether a person is a Related Person or is an Affiliate or Associate of
another, (iii) whether a person has an agreement, arrangement or understanding
with another as to the matters referred to in the definition of Beneficial Owner
herein, (iv) whether the assets subject to any Business Transaction constitute a
Substantial Part, (v) whether any Business Transaction is with a Related Person
or is one in which a Related Person has an interest (other than only a
proportionate interest as a shareholder of the Corporation), (vi) whether a
Related Person has, directly or indirectly, received the benefits or caused any
of the changes referred to in subparagraph (iv) of clause (ii) of Section (a) of
this Article ELEVEN, (vii) the fair market value of any consideration to be
received in a Business Transaction and (viii) such other matters with respect to
which a determination is required under this Article ELEVEN; and such
determination by the Board of Directors shall be conclusive and binding for all
purposes of this Article ELEVEN.
(d) Nothing contained in this Article ELEVEN shall be construed to
relieve any Related Person of any fiduciary obligation imposed by law.
(e) The fact that any Business Transaction complies with the
provisions of Section (a) of this Article ELEVEN shall not be construed to
impose any fiduciary duty, obligation or responsibility on the Board of
Directors, or any member thereof, to approve such Business Transaction or
recommend its adoption or approval to the shareholders of the corporation.
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(f) Notwithstanding any other provisions of these Second Amended and
Restated Articles of Incorporation or the Bylaws of the corporation (and
notwithstanding that a lesser percentage may be permitted by law), the
provisions of this Article ELEVEN may not be repealed or amended, directly or
indirectly in any respect, unless such action is approved by the affirmative
vote of the holders of not less than seventy percent (70%) of the Voting Stock.
TWELVE
The Corporation shall indemnify a director against reasonable
expenses and liability incurred by him, and shall advance expenses upon receipt
from the director of the written affirmation and repayment authorization
required by section 14-2-853 of the Georgia Business Corporation code, provided,
however, that the Corporation shall not indemnify a director for any liability
incurred by a director if he failed to act in a manner he believed in good faith
to be in or not opposed to the best interests of the Corporation, or to have
improperly received a personal benefit or, in the case of any criminal
proceeding, if he had reasonable cause to believe his conduct was unlawful, or
in the case of a proceeding by or in the right of the Corporation, in which he
was adjudged liable to the Corporation, unless a court shall determine that the
director is fairly and reasonably entitled to indemnification in view of all the
circumstances, in which case the director shall be indemnified for reasonable
expenses incurred.
THIRTEEN
(a) For purposes of this Article THIRTEEN, the following terms shall
have the respective meanings specified below:
(i) "Act" shall have the meaning set forth in paragraph (a)(ii)(v)
of Article ELEVEN of these Second Amended and Restated Articles of
Incorporation.
(ii) "Beneficial owner" shall have the meaning set forth in
paragraph (b)(iii) of Article ELEVEN of these Second Amended and. Restated
Articles of Incorporation.
(iii) "Closing Price" of a share of stock on any day means the
highest closing sales price or bid quotation on the National Association
of Securities Dealers, Inc. Automated Quotation System (including the
National Market System) or any comparable system then in use, or if the
class or series in question is quoted on a United States securities
exchange registered under the Act, the reported closing sales price or, in
case no such sale takes place, the average of the reported closing bid and
asked price on such exchange, or, if no such prices or quotations are
available, the fair market value on the day in question as determined by
the Board of Directors in good faith.
(iv) "Communications Act" shall mean the Communications Act of 1934,
47 U.S.C. 151 et seq., as amended.
(v) "Communications Laws" shall mean the Communications Act and the
regulations promulgated by the Federal Communications Commission pursuant
thereto, including any amendments thereof or successor or replacement
provisions thereto.
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(vi) "Fair Market Value" of a share of stock shall mean the average
Closing Price for such share for each of the forty-five (45) most recent
days during which shares of stock of such class or series shall have been
traded preceding the day on which notice of redemption shall have been
given pursuant to paragraph (iv) of Section (e) of this Article THIRTEEN;
provided, however, that if shares of stock of such class or series are not
traded on any securities exchange or in the over-the-counter market, "Fair
Market Value" shall be determined by the Board of Directors in good faith;
and provided, further, however, that "Fair Market Value" as to any
stockholder who purchases any stock subject to redemption within one
hundred twenty (120) days prior to a Redemption Date shall not (unless
otherwise determined by the Board of Directors) exceed the purchase price
paid for such shares.
(vii) "Foreign Citizen" shall mean any of the following:
(A) any alien;
(B) any foreign government;
(C) any representative of an alien or a foreign government; or
(D) any corporation organized under the laws of any country other
than the United States; and
(E) any other Person falling within a class of Persons identified
from time to time in the Communications Laws, including without limitation
Section 310 of the Communications Act, as being within a class of Persons whose
ownership of stock of a corporation holding station licenses referenced in Title
III of the Communications Act is limited to a maximum percentage.
(viii) "Permitted Percentage" shall mean twenty percent (20%), or
such other percentage as may from time to time be specified by the
Communications Laws as the maximum percentage of capital stock of a
corporation holding licenses referenced in Section 310 of the
Communications Act that may be owned by Foreign Citizens.
(ix) "Person" shall mean an individual, partnership, corporation,
trust or other entity.
(x) "Redemption Date" shall mean the date fixed by the Board of
Directors for the redemption of any shares of stock of the Corporation
pursuant to Section (e) of this Article THIRTEEN.
(xi) "Redemption Securities" shall mean any debt or equity
securities of the Corporation, any Subsidiary or any other corporation, or
any combination thereof, having such terms and conditions as shall be
approved by the Board of Directors and which, together with any cash to be
paid as part of the redemption price, in the opinion of any nationally
recognized investment banking firm selected by the Board of Directors
(which may be a firm which provides other investment banking, brokerage or
other services to the Corporation), has a value, at the time notice of
redemption is given pursuant to paragraph (d) of Section 5 of this Article
THIRTEEN, at least equal to the Fair Market
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Value of the shares to be redeemed pursuant to this Article THIRTEEN
(assuming, in the case of Redemption Securities to be publicly traded,
such Redemption Securities were fully distributed and subject only to
normal trading activity).
(b) It is the policy of the Corporation that Foreign Citizens should
own of record or Beneficially Own, directly or indirectly, individually or in
the aggregate, no more than the Permitted Percentage of its from time to time
outstanding shares of capital stock. If at any time Foreign Citizens, directly
or indirectly, individually or in the aggregate, become the record owners or the
Beneficial owners of more than the Permitted Percentage of the capital stock of
the Corporation, then the Corporation shall have the power to take the actions
prescribed in this Section (b) through Section (f) of this Article THIRTEEN. The
provisions of this Article THIRTEEN are intended to assure that the Corporation
remains in continuous compliance with the citizenship requirements of the
Communications Laws. Any amendments to the Communications Laws relating to the
citizenship of station license holders or their shareholders are deemed to be
incorporated herein by reference. To the extent necessary to enable the
Corporation to submit any proof of direct or indirect citizenship required by
law or by contract with the United States government (or any agency thereof),
the corporation may require the record holders and the Beneficial owners of
capital stock to confirm their direct or indirect citizenship status from time
to time, and dividends payable with respect to stock held by such record holder
or owner by such Beneficial owner may, in the discretion of the Board of
Directors, be withheld until confirmation of such citizenship status is
received. The Board of Directors is authorized to take such actions or make such
interpretations as it may deem necessary or advisable in order to implement the
policy set forth in this Section (b) including, without limitation, causing any
transfer, or attempted transfer, of any shares of stock of the Corporation, the
effect of which would be to cause one or more Foreign Citizens to own of record
or Beneficially Own more than the Permitted Percentage of the Corporation's
capital stock, to be ineffective as against the Corporation, and not registering
(or permitting its transfer agent to register) such transfer or purported
transfer on the stock transfer records of the Corporation. In addition, neither
the Corporation (even if the transfer agent shall have recognized such transfer)
nor its transfer agent shall be required to recognize the transferee or
purported transferee thereof as a shareholder of the Corporation for any purpose
whatsoever except to the extent necessary to effect any remedy available to the
Corporation under this Article THIRTEEN. A citizenship certificate may be
required from all transferees (and from any recipient upon original issuance) of
capital stock of the Corporation and, if such transferee (or recipient) is
acting as a fiduciary or nominee for a record owner or a Beneficial Owner, such
Beneficial Owner or record owner, and registration of transfer (or original
issuance) may be denied upon refusal to furnish such certificate.
(a) If on any date (including any record date) the number of shares
of capital stock that is owned of record or Beneficially Owned, directly or
indirectly, by Foreign Citizens is in excess of the Permitted Percentage of all
outstanding capital stock of the Corporation (such number of shares herein
referred to as the "Excess Shares"), the Corporation shall identify a number of
shares owned of record or Beneficially Owned, directly or indirectly, by Foreign
Citizens equal to the number of Excess Shares. The determination of the
Corporation as to those shares that constitute the Excess Shares shall be
conclusive. Shares deemed to constitute such Excess Shares (so long as such
excess exists) shall not be accorded any voting rights and shall not be deemed
to be outstanding for purposes of determining the vote required on any matter
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properly brought before the shareholders of the Corporation for a vote
thereon. The Corporation shall (so long as such excess exists) withhold
the payment of dividends and the sharing in any other distribution (upon
liquidation or otherwise) in respect of the Excess Shares. At such time as
the Permitted Percentage is no longer exceeded, full voting rights shall
be restored to any shares previously deemed to be Excess Shares and any
dividends or distribution with respect thereto that have been withheld,
without interest thereon, shall be due and paid solely to the record
holders of such shares at the time the Permitted Percentage is no longer
exceeded.
(b) Subject to the provisions of any resolution of the Board of
Directors creating any series of preferred stock or any other class of stock
which has a preference over common stock with regard to dividends or upon
liquidation, and subject to the procedures in the series of preferred stock of
the Corporation referenced in Articles FIVE, SIX and SEVEN hereof, the Excess
Shares shall be subject to redemption at any time by the Corporation by action
of the Board of Directors. The terms and conditions of such redemption shall be
as follows:
(i) the redemption price of the shares to be redeemed pursuant to
this Article THIRTEEN shall be equal to the Fair Market Value of such
shares or such other redemption price as required by pertinent state or
federal law pursuant to which the redemption is required;
(ii) the redemption price of such shares may be paid in cash,
Redemption Securities or any combination thereof;
(iii) if less than all the Excess Shares are to be redeemed, the
shares to be redeemed shall be selected in such manner as set forth in
Section (c) of this Article THIRTEEN or as otherwise determined by the
Board of Directors;
(iv) at least thirty (30) days' written notice of the Redemption
Date shall be given to the record holders of the Excess Shares selected to
be redeemed (unless waived in writing by any such holder) provided that
the Redemption Date may be the date on which written notice shall be given
to record holders if the cash or Redemption Securities necessary to effect
the redemption shall have been deposited in trust for the benefit of such
record holders and subject to immediate withdrawal by them upon surrender
of the stock certificates for Excess Shares to be redeemed;
(v) from and after the Redemption Date or such earlier date as
mandated by pertinent state or federal law, any and all rights of whatever
nature, which may be held by the record holder of Excess Shares selected
for redemption (including without limitation any rights to vote or
participate in dividends declared on stock of the same class or series as
such shares), shall cease and terminate and they shall thenceforth be
entitled only to receive the cash or Redemption Securities payable upon
redemption; and
(vi) such redemption shall be upon such other terms and conditions
as the Board of Directors shall determine.
(c) In determining the direct or indirect citizenship of owners of
record or Beneficial Owners or their transferees of its capital stock, the
Corporation may rely on the stock transfer records of the Corporation and
the citizenship certificates given by Beneficial Owners or
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owners of record or their transferees or any recipients (in the case of original
issuance) (in each case whether such certificates have been given on their own
behalf or on behalf of others) to prove the citizenship of such owners of
record, Beneficial Owners, transferees or recipients of such capital stock. The
determination of the direct or indirect citizenship of owners of record,
Beneficial owners and their transferees of such capital stock may also be
subject to proof in such other way or ways as the Corporation may deem
reasonable. The Corporation may at any time require proof of citizenship, in
addition to the citizenship certificates, of the record owner or Beneficial
Owner or proposed transferees of shares of the Corporation's capital stock, and
the payment of dividends may be withheld, and any application for transfer of
ownership on the stock transfer records of the Corporation may be refused, until
such additional proof is submitted.
(d) Each provision of this Article THIRTEEN is intended to be
severable from every other provision. If any provision contained in this Article
THIRTEEN is held to be invalid, illegal or unenforceable, the validity, legality
or enforceability of any other provision of this Article THIRTEEN shall not be
affected, and this Article THIRTEEN shall be construed as if the provision held
to be invalid, illegal or unenforceable had never been contained therein.
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The provisions of Article FOUR, Section A of these Second Amended
and Restated Articles of Incorporation were duly approved by the shareholders of
the Corporation in accordance with the provisions of Sections 14-2-1007 and
14-2-1003 of the Georgia Business Corporation Code on the 20th day of December,
1996.
These Second Amended and Restated Articles of Incorporation were
duly adopted and authorized by the Board of Directors of the Company on November
20, 1996.
IN WITNESS WHEREOF, WORLDCOM, INC. has caused its duly authorized
officer to execute these Second Amended and Restated Articles of Incorporation
as of this 30th day of December, 1996.
WORLDCOM, INC.
By: /s/ Bernard J. Ebbers
-------------------------------------
Name: Bernard J. Ebbers
Title: President and Chief Executive
Officer
ATTEST:
/s/ Scott D. Sullivan
- -------------------------
Name: Scott D. Sullivan
Title: Secretary
STATE OF MISSISSIPPI )
) SS.
CITY OF JACKSON )
I, Deborah A. Blackwell, a notary public, do hereby certify that on
this 30th day of December, 1996, personally appeared before me Bernard J. Ebbers
who, being by me first duly sworn, declared that he is the President of
WorldCom, Inc., that he signed the foregoing document as President of the
corporation, and that the statements therein contained are true.
[SEAL] /s/ Deborah A. Blackwell
-----------------------------
Notary Public
My Commission Expires:
10-4-97
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Series A 8% Cumulative Convertible Preferred Stock
1. Designation. The designation of this Series shall be Series A 8%
Cumulative Convertible Preferred Stock. The number of shares of this Series
shall be 94,992. The liquidation value of shares of this Series shall be
$3,350.00 per share.
2. Dividends
(a) The holders of shares of this Series shall be entitled to
receive, when, as and if declared by the Board of Directors of WorldCom, Inc.
(the "Company") out of funds legally available therefor, cumulative preferential
dividends from the issue date of such shares, at the rate per share of $268.00
per annum or $67.00 per quarter, and no more, payable quarterly for each share
of this Series, payable in arrears on each February 28, May 31, August 31 and
November 30, respectively (each such date being hereinafter referred to as a
"Dividend Payment Date") or, if any Dividend Payment Date is not a business day,
then the Dividend Payment Date shall be the next succeeding business day;
provided, however, that with respect to any dividend period during which a
redemption occurs, the Company may, at its option, declare accrued dividends to,
and pay such dividends on, the redemption date, in which case such dividends
would be payable on the redemption date in shares of the Common Stock of the
Company, par value $.0l per share (the "Common Stock"), to the holders of the
shares of this Series as of the record date for such dividend payment and such
accrued dividends would not be included in the calculation of the related Call
Price (as hereinafter defined). Each dividend on the shares of this Series shall
be payable to holders of record as they appear on the stock books of the Company
on such record dates as shall be fixed by the Board of Directors. The first
dividend payment of $67.00 shall be for the period from the date of issuance of
shares of this Series to and including February 27, 1997 and shall be payable on
February 28, 1997. Dividends (or amounts equal to accrued and unpaid dividends)
payable on the shares of this Series for any period other than a quarterly
dividend period shall be computed on the basis of a 360-day year of twelve 30day
months. At the election of the Board of Directors of the Company, dividends may
be paid in cash or in shares of Common Stock. In the event the Board of
Directors of the Company elects to pay a dividend in shares of Common Stock, the
number of shares of Common Stock to be issued on the Dividend Payment Date will
be determined by dividing the total dividend to be paid on each share of this
Series by 90% of the average of the average of the high and low sales prices of
the Common Stock as reported on the Nasdaq National Market for each of the ten
consecutive Trading Days (as hereinafter defined) immediately preceding the
fifth business day preceding the record date for such dividend.
Dividends on the shares of this Series shall accrue (whether or not
the Company has earnings, whether or not there are funds legally available for
the payment of such dividends and whether or not such dividends are declared) on
a daily basis from the previous Dividend Payment Date, except that the first
dividend shall accrue from the date of issuance of the shares of this Series.
Dividends accumulate to the extent they are not paid on the Dividend Payment
Date for the quarter for which they accrue ("Accumulated Unpaid Dividends").
Accumulated Unpaid Dividends shall not bear interest.
<Page>
(b) No dividend whatsoever shall be declared or paid upon, or any
sum set apart for the payment of dividends upon, any shares of this Series or
Parity Stock (as hereinafter defined) for any dividend period unless all
dividends for all past dividend periods have been declared and paid upon, or
declared and a sufficient sum set apart for the payment of such dividends upon,
all shares of this Series and Parity Stock outstanding other than the Exchange
Preferred (as hereinafter defined).
(c) Unless full cumulative dividends on all outstanding shares of
this Series and (to the extent that the amount thereof shall have become
determinable) any outstanding shares of Parity Stock due for all past dividend
periods shall have been declared and paid, or declared and a sufficient sum for
the payment thereof set apart, then, subject to the rights of holders of shares
of previously issued series of Preferred Stock: (i) no dividend (other than a
dividend payable solely in Junior Stock (as hereinafter defined)) shall be
declared or paid upon, or any sum set apart for the payment of dividends upon,
any shares of Junior Stock; (ii) no other distribution shall be made upon any
shares of Junior Stock; (iii) no shares of Junior Stock or any other series of
Preferred Stock shall be purchased, redeemed or otherwise acquired for cash or
other property of the Company (excluding shares of Junior Stock or Exchange
Preferred) by the Company or by any Subsidiary; and (iv) no monies shall be paid
into or set apart or made available for a sinking or other like fund for the
purchase, redemption or other acquisition for value of any shares of Junior
Stock by the Company or any Subsidiary.
(d) Any dividend payment made on shares of this Series shall be
distributed pro rata to the holders entitled thereto and be credited first
against the earliest accrued but unpaid dividend due with respect to shares of
this Series.
3. Voting Rights.
(a) The holders of shares of this Series shall have the right
with the holders of Common Stock to vote in the election of directors of the
Company and upon each other matter coming before any meeting of the shareholders
of the Company on the basis of ten votes for each such share held. The holders
of shares of this Series and the holders of Common Stock shall vote together as
a single class except as otherwise set forth herein or as otherwise provided by
law or by the Second Amended and Restated Articles of Incorporation of the
Company.
(b) The approval of more than two-thirds of the votes entitled
to be cast by the holders of the outstanding shares of this Series (voting
separately as a class), shall be required for the adoption of any amendment to
the Second Amended and Restated Articles of Incorporation that materially
adversely changes the rights, preferences or privileges of the shares of this
Series.
(c) The holders of the outstanding shares of this Series shall
also have the right, voting together with the holders of any other outstanding
shares of Voting Preferred Stock (as hereinafter defined) as a separate voting
group, to elect two members of the Board of Directors of the Company at any time
six or more quarterly dividends on any shares of Voting Preferred Stock shall be
in arrears and unpaid, in whole or in part, whether or not declared and whether
or not any funds shall be or have been legally available for payment
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thereof. For this purpose, "Voting Preferred Stock" shall mean the shares of
this Series and each other series of Preferred Stock which shall have
substantially similar voting rights (including voting as one voting group with
other shares of Voting Preferred Stock) with respect to the election of
directors upon substantially similar arrearages of dividends. In such event, the
number of Directors of the Company shall be increased by two, and, unless a
regular meeting of the shareholders of the Company is to be held within 60 days
thereof for the purpose of electing Directors, within 30 days thereafter, the
Company shall call a special meeting of the holders of the outstanding shares of
Voting Preferred Stock for the purpose of electing such Directors to take place
at the time specified in the notice of the meeting, to be not more than 60 days
after such holders become so entitled to elect two Directors and not less than
10 days nor more than 50 days after the date on which such notice is mailed. If
such special meeting shall not have been so called by the Company, or such
regular meeting shall not be so held, a special meeting may be called for such
purpose at the expense of the Company by the holders of not less than 10% of the
outstanding shares of any series of Voting Preferred Stock; and notice of any
such special meeting shall be given by the person or persons calling the same to
the holders of the outstanding shares of the Voting Preferred Stock by
first-class mail, postage prepaid, at their last address as shall appear on the
stock transfer records of the Company. At any such special meeting the holders
of the outstanding shares of Voting Preferred Stock (voting separately as a
class with each share having one vote) shall elect two members of the Board of
Directors of the Company. If a regular meeting of the shareholders of the
Company for the purpose of electing Directors is to be held within 60 days after
the time the holders of the outstanding shares of Voting Preferred Stock become
so entitled to elect two Directors, then the holders of the outstanding shares
of Voting Preferred Stock shall be given notice thereof in the same manner as
other shareholders of the Company entitled to vote thereat; and at such regular
meeting, the holders of the outstanding shares of Voting Preferred Stock (voting
separately as a class with each share having one vote) shall elect two members
of the Board of Directors. The right of the holders of the Voting Preferred
Stock (voting separately as a class) to elect two members of the Board of
Directors of the Company shall continue until such time as no dividends on any
outstanding shares of Voting Preferred Stock are in arrears and unpaid, in whole
or in part, at which time (i) the voting power of the holders of the outstanding
shares of Voting Preferred Stock so to elect two Directors shall cease, but
always subject to the same provisions of this subparagraph (c) for the vesting
of such voting power upon the occurrence of each and every like arrearage of
dividends, and (ii) the term of office of each member of the Board of Directors
who was elected pursuant to this subparagraph (c) shall automatically expire.
4. Redemptions and Conversions.
(a) Mandatory Conversion. On May 31, 1999 (the "Mandatory
Conversion Date"), each outstanding share of this Series shall convert
automatically (the "Mandatory Conversion") into shares of Common Stock at the
Common Equivalent Rate (as hereinafter defined) in effect on the Mandatory
Conversion Date and the right to receive, out of funds legally available
therefor, an amount equal to all accrued and unpaid dividends on such share of
this Series to the Mandatory Conversion Date, whether or not declared (payable
in cash or in shares of Common Stock on the same basis as that used to determine
dividends), subject to the right of the Company to redeem the shares of this
Series on or after the Initial Redemption Date (as hereinafter defined) and
prior to the Mandatory Conversion Date, as described below, and subject to the
conversion of the shares of this Series at the option of the holder at any time
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prior to the Mandatory Conversion Date. Notwithstanding the foregoing, if the
Mandatory Conversion Date occurs after a record date for a quarterly dividend
and before the corresponding Dividend Payment Date, such dividend shall be paid,
out of funds legally available therefor, on the Dividend Payment Date rather
than on the Mandatory Conversion Date. The Common Equivalent Rate is initially
four-hundred and twenty shares of Common Stock for each share of this Series.
Dividends on the shares of this Series shall cease to accrue and such shares
shall cease to be outstanding on the Mandatory Conversion Date. The Company
shall make such arrangements as it deems appropriate for the issuance of
certificates representing shares of Common Stock and for the payment (in cash or
in shares of Common Stock, at the election of the Board of Directors of the
Company) in respect of such accrued and unpaid dividends, if any, or cash in
lieu of fractional shares, if any, in exchange for and contingent upon surrender
of certificates representing the shares of this Series, provided that the
Company shall give the holders of the shares of this Series such notice of any
such actions as the Company deems appropriate and upon such surrender such
holder, shall be entitled to receive such dividends declared and paid on such
shares of Common Stock subsequent to the Mandatory Conversion Date. Amounts
payable in cash in respect of the shares of this series or in respect of such
shares of Common Stock shall not bear interest.
(b) Redemption by the Company.
(i) Right to Redeem. Shares of this Series are not redeemable
by the Company prior to May 31, 1998 (the "Initial Redemption Date"). At any
time and from time to time on or after the Initial Redemption Date and prior to
the Mandatory Conversion Date, the Company shall have the right to redeem, in
whole or in part, the outstanding shares of this Series. Upon any such
redemption, the Company shall deliver to the holders of shares of this Series,
in accordance with the provisions of these Articles of Amendment in exchange for
each share so redeemed, a number of shares of Common Stock equal to (A) the Call
Price (as hereinafter defined) in effect on the date of redemption, divided by
(B) the Current Market Price (as hereinafter defined) of the Common Stock
determined as of the date which is one trading day prior to the public
announcement of the redemption. The Call Price of each share of this Series is
an amount equal to the sum of (X) $3,417.00 on and after the Initial Redemption
Date through August 30, 1998, $3,400.25 on and after August 31, 1998 through
November 29, 1998, $3,383.50 on and after November 30, 1998 through February 27,
1999, $3,366.75 on and after February 28, 1999 through April 29, 1999 and
$3,350.00 on and after April 30, 1999 until the Mandatory Conversion Date plus
(Y) all accrued and unpaid dividends thereon to the date fixed for redemption.
Notwithstanding the foregoing, if the date fixed for redemption occurs after a
record date for a quarterly dividend and prior to the corresponding Dividend
Payment Date, such dividend shall be paid, out of funds legally available
therefor, on the Dividend Payment Date and the Call Price shall not include the
amount of the dividend to be so paid. Dividends on the shares of this Series
shall cease to accrue and such shares shall cease to be outstanding on the date
fixed for redemption. A public announcement of any call for redemption shall be
made prior to the mailing of the notice of such call to holders of shares of
this Series as described below. If fewer than all the outstanding shares of this
Series are to be redeemed, shares to be redeemed shall be selected by the
Company from outstanding shares of this Series not previously redeemed by lot or
pro rata (as nearly as may be practicable) or by any other method determined by
the Board of Directors of the Company in its sole discretion to be fair and
proper.
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(ii) Current Market Price. As used in this subparagraph (b),
the term "Current Market Price" per share of the Common Stock on any date of
determination means the lesser of (X) the average of the average of the high and
low sales prices of the Common Stock as reported on the Nasdaq National Market
or any national securities exchange upon which the Common Stock is then listed,
for each of the ten consecutive Trading Dates ending on and including such date
of determination and (Y) the Closing Price (as hereinafter defined) of the
Common Stock for such date of determination; provided, however, that, with
respect to any redemption of shares of this Series if any event that results in
an adjustment of the Common Equivalent Rate occurs during the period beginning
on the first day of such ten-day period and ending on the applicable redemption
date, the Current Market Price as determined pursuant to the foregoing shall be
appropriately adjusted to reflect the occurrence of such event.
(iii) Notice of Redemption. The Company shall provide notice
of any redemption of the shares of this Series to holders of record of the
shares of this Series to be called for redemption not less than 15 nor more than
60 days prior to the date fixed for such redemption. Such notice shall be
provided by mailing notice of such redemption first class postage prepaid, to
each holder of record of shares of this Series to be redeemed, at such holder's
address as it appears on the stock register of the Company; provided, however,
that neither failure to give such notice nor any defect therein shall affect the
validity of the proceeding for the redemption of any shares of this Series to be
redeemed.
Each such notice shall state, as appropriate, the following and may
contain such other information as the Company deems advisable:
(A) the redemption date;
(B) that all outstanding shares of this Series are to be
redeemed or, in the case of a call for redemption of
fewer than all outstanding shares of this Series, the
number of such shares held by such holder to be
redeemed;
(C) the Call Price, the number of shares of Common Stock
deliverable upon redemption of each share of this Series
to be redeemed and the Current Market Price used to
calculate such number of shares of Common Stock;
(D) the place or places where certificates for such shares
are to be surrendered for redemption; and
(E) that dividends on the shares of this Series to be
redeemed shall cease to accrue on such redemption date
(except as otherwise provided herein).
(iv) Deposit of Shares and Funds. The Company's obligation to
deliver shares of Common Stock and provide funds upon redemption in accordance
with this paragraph 4 shall be deemed fulfilled if, on or before a redemption
date, the Company shall irrevocably deposit, with a bank or trust company, or an
affiliate of a bank or trust company, having an office or agency in New York
City and having a capital and surplus of at least
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$50,000,000, or shall set aside or make other reasonable provision for the
issuance of, such number of shares of Common Stock as are required to be
delivered by the Company pursuant to this paragraph 4 upon the occurrence of the
related redemption (and for the payment of cash in lieu of the issuance of
fractional share amounts and accrued and unpaid dividends payable in cash, if
any, on the shares to be redeemed as and to the extent provided by this
paragraph 4). Any interest accrued on such funds shall be paid to the Company
from time to time. Any shares of Common Stock or funds so deposited and
unclaimed at the end of two years from such redemption date shall be repaid and
released to the Company, after which the holder or holders of such shares of
this Series so called for redemption shall look only to the Company for delivery
of such shares of Common Stock or funds.
(v) Surrender of Certificates; Status. Each holder of shares
of this Series to be redeemed shall surrender the certificates evidencing such
shares (properly endorsed or assigned for transfer, if the Board of Directors of
the Company shall so require and the notice shall so state) to the Company at
the place designated in the notice of such redemption and shall thereupon be
entitled to receive certificates evidencing shares of Common Stock and to
receive any funds or shares of Common Stock payable pursuant to this paragraph
(4) following such surrender and following the date of such redemption. In case
fewer than all the shares represented by any such surrendered certificate are
called for redemption, a new certificate shall be issued at the expense of the
Company representing the unredeemed shares. If such notice of redemption shall
have been given, and if on the date fixed for redemption shares of Common Stock
and funds necessary for the redemption shall have been irrevocably either set
aside by the Company separate and apart from its other funds or assets in trust
for the account of the holders of the shares to be redeemed or converted (and so
as to be and continue to be available therefor) or deposited with a bank or a
trust company or an affiliate thereof as provided herein or the Company shall
have made other reasonable provision therefor, then, notwithstanding that the
certificates evidencing any shares of this Series so called for redemption or
subject to conversion shall not have been surrendered, the shares represented
thereby so called for redemption shall be deemed no longer outstanding,
dividends with respect to the shares so called for redemption shall cease to
accrue on the date fixed for redemption (except that holders of shares of this
series at the close of business on a record date for any payment of dividends
shall be entitled to receive the dividend payable on such shares on the
corresponding Dividend Payment Date notwithstanding the redemption of such
shares following such record date and prior to such Dividend Payment Date) and
all rights with respect to the shares so called for redemption shall forthwith
after such date cease and terminate, except for the rights of the holders to
receive the shares of Common Stock and funds, if any, payable pursuant to this
paragraph (4) without interest upon surrender of their certificates therefor.
Holders of shares of this Series that are redeemed shall not be entitled to
receive dividends declared and paid on such shares of Common Stock, and such
shares of Common Stock shall not be entitled to vote, until such shares of
Common Stock are issued upon the surrender of the certificates representing such
shares of this Series and upon such surrender such holders shall be entitled to
receive such dividends declared and paid on such shares of Common Stock
subsequent to such redemption date.
(c) Conversion at Option of Holder. Shares of this series are
convertible, in whole or in part, at the option of the holder thereof, at any
time prior to the Mandatory Conversion Date, unless previously redeemed, into
shares of Common Stock at a rate of 344.274 shares of Common Stock for each
share of this Series (the "Optional Conversion Rate")
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(equivalent to a conversion price of $9.73 per share of Common Stock). The right
to convert shares of this series called for redemption shall terminate at the
close of business on the redemption date.
Conversion of shares of this Series may be effected by delivering
certificates evidencing such shares, together with written notice of conversion
and a proper assignment of such certificates to the Company or in blank, to the
office or agency to be maintained by the Company for that purpose (and, if
applicable, payment by the Company of an amount, out of funds legally available
therefor (in cash or in shares of Common Stock, at the election of the Company),
equal to the dividend payable on such shares), and otherwise in accordance with
conversion procedures established by the Company. Each conversion shall be
deemed to have been effected immediately prior to the close of business on the
date on which the foregoing requirements shall have been satisfied. The
conversion shall be at the Optional Conversion Rate in effect at such time and
on such date.
Holders of shares of this Series at the close of business on a
record date for any payment of dividends shall be entitled to receive the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion of such shares following such record date and
prior to such Dividend Payment Date. The Company shall make no other payment or
allowance for unpaid dividends, whether or not in arrears, on converted shares
of this Series or for dividends or distributions on the shares of Common Stock
issued upon such conversion.
(d) Common Equivalent Rate and Optional Conversion Rate Adjustments.
The Common Equivalent Rate and the optional conversion Rate also shall be
subject to adjustment from time to time as provided below in this paragraph.
(i) If the Company shall:
(A) pay a dividend or make a distribution with respect to
its Common Stock in shares of such stock,
(B) subdivide or split its outstanding shares of Common
Stock into a greater number of shares,
(C) combine its outstanding shares of Common Stock into a
smaller number of shares, or
(D) issue by reclassification of its shares of Common Stock
any shares of Common Stock of the Company,
then, in any such event, the Common Equivalent Rate and the Optional Conversion
Rate in effect immediately prior to such event shall each be adjusted so that
the holder of any shares of this Series shall thereafter be entitled to receive,
upon Mandatory Conversion or upon conversion at the option of the holder, the
number of shares of Common Stock of the Company which such holder would have
owned or been entitled to receive immediately following any event described
above had such shares of this Series been converted immediately prior to such
event or any record date with respect thereto. Such adjustment shall become
effective at the opening of
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business on the business day next following the record date for determination of
shareholders entitled to receive such dividend or distribution in the case of a
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, split, combination or
reclassification. Such adjustment shall be made successively.
(ii) If the Company shall, after the date hereof, issue
rights or warrants to all holders of its Common Stock
entitling them (for a period not exceeding forty-five
days from the date of such issuance) to subscribe for or
purchase shares of Common Stock at a price per share
less than the current market price of the Common Stock,
then in each case the Common Equivalent Rate and
Optional Conversion Rate shall each be adjusted by
multiplying the Common Equivalent Rate and the Optional
Conversion Rate, in effect immediately prior to the date
of issuance of such rights or warrants, by a fraction,
of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance of such
rights or warrants, immediately prior to such issuance,
plus the number of additional shares of Common Stock
offered for subscription or purchase pursuant to such
rights or warrants, and of which the denominator shall
be the number of shares of Common Stock outstanding on
the date of issuance of such rights or warrants,
immediately prior to such issuance, plus the number of
additional shares of Common Stock which the aggregate
offering price of the total number of shares of Common
Stock so offered for subscription or purchase pursuant
to such rights or warrants would purchase at such
current market price (determined by multiplying such
total number of shares by the exercise price of such
rights or warrants and dividing the product so obtained
by such current market price). Such adjustment shall
become effective at the opening of business on the
business day next following the record date for the
determination of shareholders entitled to receive such
rights or warrants. To the extent that shares of Common
Stock are not delivered after the expiration of such
rights or warrants, the Common Equivalent Rate shall be
readjusted to the Common Equivalent Rate which would
then be in effect had the adjustments been made upon the
issuance of such rights or warrants been made upon the
basis of delivery of only the number of shares of Common
Stock actually delivered. Such adjustment shall be made
successively.
(iii) If the Company shall pay a dividend or make a
distribution to all holders of its Common Stock of
evidences of its indebtedness, securities of a
Subsidiary or other assets
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(excluding any dividends or distributions referred to in
clause (i) above or any cash dividends other than
Extraordinary Cash Distributions (as hereinafter
defined)) or shall issue to all holders of its Common
Stock rights or warrants to subscribe for or purchase
any of its securities (other than those referred to in
clause (ii) above), then in each such case, the Common
Equivalent Rate and the Optional Conversion Rate shall
each be adjusted by multiplying the Common Equivalent
Rate and the Optional Conversion Rate in effect on the
record date mentioned below, by a fraction of which the
numerator shall be the current market price per share of
the Common Stock on the record date for the
determination of shareholders entitled to receive such
dividend or distribution, and of which the denominator
shall be such current market price per share of Common
Stock less the fair market value (as determined by the
Board of Directors of the Company, whose good faith
determination shall be conclusive, and described in a
resolution adopted with respect thereto) as of such
record date of the portion of the assets or evidences of
indebtedness so distributed or of such subscription
rights or warrants applicable to one share of Common
Stock. Such adjustment shall become effective on the
opening of business on the business day next following
the record date for the determination of shareholders
entitled to receive such dividend or distribution. Such
adjustment shall be made successively.
(iv) Any shares of Common Stock issuable in payment of a
dividend shall be deemed to have been issued immediately
prior to the close of business on the record date for
such dividend for purposes of calculating the number of
outstanding shares of Common Stock under clause (ii)
above. For purposes of any computation under clause (ii)
and (iii) above, the current market price per share of
Common Stock at any date shall be deemed to be the
average of the daily Closing Prices for the thirty
consecutive Trading Dates preceding the date in
question; provided, however, if any event that results
in an adjustment of the Common Equivalent Rate occurs
during such thirty-day period, the current market price
as determined pursuant to the foregoing shall be
appropriately adjusted to reflect the occurrence of such
event.
(v) The Company shall also be entitled to make upward
adjustments in the Common Equivalent Rate, the Optional
Conversion Rate and the Call Price, as the Board of
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Directors in its good faith discretion shall determine
to be advisable, in order that any stock dividends,
subdivisions of shares, distribution of rights to
purchase stock or securities, or distribution of
securities convertible into or exchangeable for stock
(or any transaction which could be treated as any of the
foregoing transactions pursuant to Section 305 of the
Internal Revenue Code of 1986, as amended) hereafter
made by the Company to its shareholders shall not be
taxable.
(vi) In any case in which clause (iii) above shall require
that an adjustment as a result of any event become
effective at the opening of business on the business day
next following a record date and the date fixed for
conversion pursuant to subparagraph (4)(c) or redemption
pursuant to subparagraph w(b) occurs after such record
date, but before the occurrence of such event, the
Company may in its sole discretion, elect to defer,
until after the occurrence of such event, issuing to the
holder of any converted or redeemed shares of this
series the additional shares of Common Stock issuable
upon such conversion or redemption over the shares of
Common Stock issuable before giving effect to such
adjustment.
(vii) All adjustments to the Common Equivalent Rate and the
Optional Conversion Rate shall be calculated to the
nearest 1/1000th of a share of Common Stock (or if there
is not a nearest 1/1000th of a share to the next lower
1/1000th of a share). No adjustment in the Common
Equivalent Rate and the Optional Conversion Rate shall
be required unless such adjustment would require an
increase or decrease of at least one percent therein;
provided, however, that any adjustments which by reason
of this subparagraph are not required to be made shall
be carried forward and taken into account in any
subsequent adjustments.
(e) Adjustment for Consolidation or Merger. In case of any
consolidation or merger to which the Company is a party (other than a merger or
consolidation in which the Company is the continuing corporation and in which
the Common Stock outstanding immediately prior to the merger or consolidation
remains unchanged), or in case of any sale or transfer to another corporation of
the property of the Company as an entirety or substantially as an entirety, or
in case of any statutory exchange of securities with another corporation (other
than in connection with a merger or acquisition), proper provision shall be made
so that each share of this Series shall, after consummation of such transaction,
be subject to (i) conversion at the option of the holder into the kind and
amount of securities, cash or other property receivable upon consummation of
such transaction by a holder of the number of shares of Common Stock into which
such share of this Series might have been converted immediately prior to
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consummation of such transaction, (ii) conversion on the Mandatory Conversion
Date into the kind and amount of securities, cash or other property receivable
upon consummation of such transaction by a holder of the number of shares of
Common Stock into which such share of this Series would have been converted if
the conversion on the Mandatory Conversion Date had occurred immediately prior
to the date of consummation of such transaction, and (iii) redemption on any
redemption date in exchange for the kind and amount of securities, cash or other
property receivable upon consummation of such transaction by a holder of the
number of shares of Common Stock that would have been issuable at the Call Price
in effect on such redemption date upon a redemption of such shares immediately
prior to the consummation of such transaction, assuming that the public
announcement of such redemption had been made on the last possible date
permitted by the terms of this Series and applicable law; assuming in each case
that such holder of shares of this Series failed to exercise rights of election,
if any, as to the kind or amount of securities, cash or other property
receivable upon consummation of such transaction (provided that if the kind or
amount of securities, cash or other property receivable upon consummation of
such transaction is not the same for each non-electing share, then the kind and
amount of securities, cash or other property receivable upon consummation of
such transaction for each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares). The
kind and amount of securities into which the shares of this Series shall be
convertible after the consummation of such transaction shall be subject to
adjustment as described in the immediately preceding subparagraph 4(d) following
the date of consummation of such transaction. The Company shall not, without the
affirmative vote of more than the holders of two-thirds of all the outstanding
shares of this Series, become a party to any such transaction unless the terms
thereof are consistent with the foregoing.
(f) Notice of Adjustments. Whenever the Common Equivalent Rate and
optional Conversion Rate are adjusted as herein provided, the Company shall:
(i) forthwith compute the adjusted Common Equivalent Rate and Optional
Conversion Rate in accordance herewith and prepare a certificate
signed by an officer of the Company setting forth the adjusted
Common Equivalent Rate and the Optional Conversion Rate, the method
of calculation thereof in reasonable detail and the facts requiring
such adjustment and upon which such adjustment is based, which
certificate shall be conclusive, final and binding evidence of the
correctness of the adjustment, and file such certificate forthwith
with the transfer agent for the shares of this Series and the Common
Stock; and
(ii) mail a notice to the holders of the outstanding shares of this
Series stating that the Common Equivalent Rate and the Optional
Conversion Rate have been adjusted, the facts requiring such
adjustment and upon which such adjustment is based and setting forth
the adjusted Common Equivalent Rate and Optional Conversion Rate,
such notice to be mailed at or prior to the time the Company mails
an interim statement to its shareholders covering the fiscal quarter
during which the facts requiring such adjustment occurred, but in
any event within 45 days of the end of such fiscal quarter.
(g) Notices. In case, at any time while any of the shares of this
series are outstanding:
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(i) the Company shall declare a dividend (or any other distribution) on
its Common Stock, excluding any cash dividends; or
(ii) the Company shall authorize the issuance to all holders of its
Common Stock of rights or warrants to subscribe for or purchase
shares of its Common Stock or of any other subscription rights or
warrants; or
(iii) the Company shall authorize any reclassification of the Common Stock
of the Company (other than a subdivision or combination thereof) or
of any consolidation or merger to which the Company is a party and
for which approval of any shareholders of the Company is required
(except for a merger of the Company into a Subsidiary solely for the
purpose of changing the corporate domicile of the Company to another
state of the United States and in connection with which there is no
substantive change in the rights or privileges of any securities of
the Company other than changes resulting from differences in the
corporate statutes of the then existing and the new state of
domicile), or of the sale or transfer of all or substantially all of
the assets of the Company; or
(iv) there shall be commenced the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of the shares of this Series, and shall cause to be
mailed to the holders of shares of this Series at their last addresses as they
shall appear on the stock register, at least 10 days before the date hereinafter
specified (or the earlier of the dates hereinafter specified, in the event that
more than one date is specified), a notice stating (A) the date on which a
record is to be taken for the purpose of such dividend, distribution, rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution, rights
or warrants are to be determined, or (B) the date on which any such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall be entitled to
exchange their Common Stock for securities or other property (including cash),
if any, deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. The failure to give or receive
the notice required by this subparagraph (g) or any defect therein shall not
affect the legality or validity of any such dividend, distribution, right or
warrant or other action.
(h) Effective Date of Conversions and Redemptions. The person or
persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon any conversion or redemption shall be deemed
to have become on the date of any such conversion or redemption the holder or
holders of record of the shares represented thereby; provided, however, that any
such surrender on any date when the stock transfer books of the Company shall be
closed shall constitute the person or persons in whose name or names the
certificate or certificates for such shares are to be issued as the record
holder or holders thereof for all purposes at the opening of business on the
next succeeding business day on which such stock transfer books are open.
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(i) No Fractional Shares. No fractional shares or scrip representing
fractional shares of Common Stock shall be issued upon the redemption or
conversion of any shares of this Series or in respect of any dividend paid in
shares of Common Stock. In lieu of any fractional share otherwise issuable in
respect of all the shares of this Series of any holder which are redeemed or
converted on any redemption date or upon Mandatory conversion or any optional
Conversion or in respect of any dividend paid in shares of Common Stock, the
Company shall, at the election of the Company, either (i) sell such fractional
share, as agent for the person entitled thereto, and distribute the proceeds of
such sale, net of any discounts, commissions, fees or expenses associated with
such sale, to such person, all in accordance with applicable rules under the
Securities Act of 1933, as amended, or (ii) pay to the person entitled thereto
an amount in cash equal to the current value of such fraction, calculated to the
nearest one-hundredth (1/100) of a share, to be computed (x) if the shares of
this Series are listed on any national securities exchange or the Nasdaq
National Market, on the basis of the last sales price (or the quoted closing bid
price if there shall have been no sales) of the shares of this Series on such
exchange or the Nasdaq National Market (as the case may be) on the date of any
such conversion or redemption or the date of payment of any such dividend, or
(y) if the shares of this Series are not so listed, on the basis of the mean
between the closing bid and asked prices for the shares of this Series on the
date of any such conversion or redemption or the date of payment of any such
dividend, as reported by Nasdaq, or its successor, or (z) if the shares of this
Series are not so listed and if there are no such closing bid and asked prices,
on the basis of the fair market value per share as determined in good faith by
the Board of Directors.
(j) Reissuance. Shares of this Series that have been issued and
reacquired in any manner, including shares purchased, exchanged, redeemed or
converted, shall not be reissued as part of this Series and shall (upon
compliance with any applicable provisions of the laws of the State of Georgia)
have the status of authorized and unissued shares of the Preferred Stock
undesignated as to series and may be redesignated and reissued as part of any
series of Preferred Stock.
(k) Definitions. As used herein:
(i) the term "business day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close
or are closed because of a banking moratorium or otherwise;
(ii) the term "Capital Stock" means any capital stock of any class or
series (however designated) of the Company;
(iii) the term "Closing Price" on any day shall mean the closing sale
price regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked
prices regular way, in each case on the Nasdaq National Market or,
if the Common Stock is not listed or admitted to trading on the
Nasdaq National Market then on the principal national securities
exchange on which the Common Stock is listed or admitted to trading
(which shall be the national securities exchange on which the
greatest number of shares of Common Stock has been traded during the
five consecutive Trading Dates ending on and
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including the date of determination), or, if not quoted or listed or
admitted to trading on any national securities exchange or quotation
system, the average of the closing bid and asked prices of the
Common Stock on the over-the-counter market on the day in question
as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or if not so available
as determined in good faith by the Board of Directors, on the basis
of such relevant factors as it in good faith considers appropriate;
(iv) the term "Exchange Preferred" means the Series B Convertible
Preferred Stock of the Company.
(v) the term "Extraordinary Cash Distributions" means, with respect to
any cash dividend or distribution paid on any date, the amount, if
any, by which all cash dividends and cash distributions on the
Common Stock paid during the consecutive 12-month period ending on
and including such date (other than cash dividends and cash
distributions for which an adjustment to the Common Equivalent Rate
and the Optional Conversion Rate was previously made) exceeds, on a
per share of Common Stock basis, 10% of the average daily Closing
Price of the Common Stock over such 12-month period;
(vi) the term "Junior Stock" means any Capital Stock ranking as to
dividends or as to rights in liquidation, dissolution or winding up
of the affairs of the Company junior to the shares of this Series;
(vii) the term "Parity Stock" means any Capital Stock ranking as to
dividends or as to rights in liquidation, dissolution or winding up
the affairs of the Company equally with the shares of this Series;
(viii) the term "Subsidiary" means any corporation a majority of the
outstanding Voting Stock of which is owned, directly or indirectly,
by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries. For this purpose, the term "Voting Stock"
means stock of any class or classes (however designated) having
ordinary voting power for the election of a majority of the members
of the board of directors (or other governing body) of such
corporation, other than stock having such powers only by reason of
the happening of a contingency;
(ix) the term "Trading Date" shall mean a date on which the Nasdaq
National Market (or any successor thereto) is open for the
transaction of business.
(l) Payment of Taxes. The Company shall pay any and all documentary,
stamp or similar issue or transfer taxes payable in respect of the issue or
delivery of shares of Common Stock on the redemption or conversion of shares of
this Series pursuant to this paragraph 4; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
registration of transfer involved in the issue or delivery of shares of Common
Stock in a name other than that of the registered holder of shares of this
Series redeemed or converted or to be redeemed or converted, and no such issue
or delivery shall be made unless and
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until the person requesting such issue has paid to the Company the amount of any
such tax or has established, to the satisfaction of the Company, that such tax
has been paid.
(m) Reservation of Common Stock. The Company shall at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued Common Stock and/or its issued Common Stock held in
its treasury, for the purpose of effecting any Mandatory Conversion of the
shares of this Series or any conversion of the shares of this Series at the
option of the holder, the full number of shares of Common Stock then deliverable
upon any such conversion of all outstanding shares of this Series.
5. Liquidation Rights.
(a) In the event of the liquidation, dissolution, or winding up of
the Company, whether voluntary or involuntary, the holders of shares of this
Series then outstanding, after payment or provision for payment of the debts and
other liabilities of the Company and the payment or provision for payment of any
distribution on any shares of the Company having a preference and a priority
over the shares of this Series on liquidation, and before any distribution to
the holders of the Common Stock, or any other stock ranking junior to the shares
of this Series with respect to distributions upon liquidation, dissolution or
winding up, shall be entitled to be paid out of the assets of the Company
available for distribution to its shareholders, an amount per share of this
Series equal to the greater of (i) the sum of (a) the liquidation value set
forth in paragraph (1) above and (b) all accrued and unpaid dividends thereon to
the date of liquidation, dissolution or winding up and (ii) the value of the
shares of Common Stock into which such shares of this Series are convertible on
the date of such liquidation, dissolution or winding up, before any payment
shall be made or any assets distributed to the holders of any shares of the
Company ranking junior to the shares of this Series upon liquidation. In the
event the assets of the Company available for distribution to the holders of the
shares of this Series upon any dissolution, liquidation or winding up of the
Company shall be insufficient to pay in full the liquidation payments payable to
the holders of outstanding shares of this Series and any shares of Parity Stock,
then the holders of all such shares of this Series shall share ratably in such
distribution of assets in accordance with the amount which would be payable on
such distribution if the amounts to which the holders of outstanding shares of
this Series and the holders of outstanding shares of such shares of Parity Stock
are entitled were paid in full. Except as provided in this paragraph 5, holders
of this Series shall not be entitled to any distribution in the event of
liquidation, dissolution or winding up of the affairs of the Company.
(b) For the purposes of this paragraph 5, none of the following
shall be deemed to be a voluntary or involuntary liquidation, dissolution or
winding up of the Company:
(i) the voluntary sale, conveyance, lease, exchange or transfer (for
cash, shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Company;
(ii) the consolidation or merger of the Company with or into one or more
other corporations, or other associations;
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(iii) the consolidation or merger of one or more corporations or other
associations with or into the Company; or
(iv) the participation by the Company in a share exchange.
6. Definition. As used herein, the term "Common Stock" shall mean
any stock of any class of the Company which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which is not subject
to redemption by the Company. However, shares of Common Stock issuable upon
conversion of shares of this Series shall include only shares of the class
designated as Common Stock as of the original date of issuance of shares of this
Series, or shares of the Company of any class or classes resulting from any
reclassification or reclassification thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which are
not subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from such reclassification bears to the total
number of shares of all classes resulting from all such reclassification.
7. No Preemptive Rights. The holders of shares of this Series shall
have no preemptive rights, including preemptive rights with respect to any
shares of Capital Stock or other securities of the Company convertible into or
carrying rights or options to purchase any such shares.
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EXHIBIT B
Series B Convertible Preferred Stock
1. Designation and Amount. The shares of such series shall be
designated "Series B Convertible Preferred Stock" (the "Series B Preferred
Stock"), and the number of shares constituting such series shall be 15,000,000.
2. Dividends.
(a) The holders of Series B Preferred Stock shall be entitled to
receive, when and as declared, out of the funds legally available for that
purpose, dividends per share of Series B Preferred Stock at the rate of 7.75
cents per annum, payable when and as the Board of Directors (the "Board of
Directors") of WorldCom, Inc. (the "Company") may determine, in cash, before any
dividends shall be set apart for or paid upon the common stock of the Company,
par value $.01 per share (the "Common Stock"), or any stock ranking as to
dividends junior to the Series B Preferred Stock (such stock being referred to
hereinafter collectively as "Junior Stock") in any year. All dividends declared
upon Series B Preferred Stock shall be declared pro rata per share and shall be
payable to holders of record as they appear on the stock books of the Company on
such record dates as shall be fixed by the Board of Directors. Notwithstanding
the foregoing, the Company may declare, set apart and pay dividends on shares of
the Company's Series A 8% Cumulative Convertible Preferred Stock (the "Series A
Preferred Stock") whether or not dividends have been declared, set apart or paid
on the shares of Series B Preferred Stock. The Board of Directors shall not be
required to declare any dividends on the Series B Preferred Stock and the
failure to declare any such dividends shall not constitute a default or
otherwise vest the holders of Series B Preferred Stock with any right, other
than the right to receive amounts in respect of accrued but unpaid dividends
pursuant to Sections 3, 5 and 7 hereof.
(b) Dividends on the Series B Preferred Stock shall be cumulative
and shall accrue on a daily basis, whether or not in any fiscal year there shall
be net profits or surplus available for the payment of dividends in such fiscal
year, so that if in any fiscal year or years, dividends in whole or in part are
not paid upon the Series B Preferred Stock, unpaid dividends shall accumulate as
against the holders of the Junior Stock. Accrued but unpaid dividends shall not
bear interest.
(c) Dividends (or amounts equal to accrued and unpaid dividends)
payable on the shares of Series B Preferred Stock shall be computed on the basis
of a 360-day year of twelve 30-day months.
(d) The Company shall not set apart for or pay upon the Common Stock
any Extraordinary Cash Dividend unless, at the same time, the Company shall have
set apart for or paid upon all shares of Series B Preferred Stock an amount of
cash per share of Series B Preferred Stock equal to the Extraordinary Cash
Dividend that would have been paid in respect of such share if the holder of
such share had converted such share into shares of Common Stock pursuant to
Section 5 immediately prior to the record date for such Extraordinary Cash
Dividend. For purposes of this paragraph 2(d), "Extraordinary Cash Dividend"
shall mean, with respect to any cash dividend or distribution paid on any date,
the amount, if any, by which all cash
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dividends and cash distributions on the Common Stock paid during the consecutive
12-month period ending on and including such date exceeds, on a per share of
Common Stock basis, 10% of the average daily closing price of the Common Stock
over such 12-month period.
3. Liquidation, Dissolution or Winding Up.
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company, no distribution shall be made (i) to the holders of
Junior Stock unless, prior thereto, the holders of the Series B Preferred Stock
shall have received $1.00 per share, plus an amount equal to unpaid dividends
thereon, including accrued dividends, whether or not declared, to the date of
such payment and subject to the payment in full of all amounts required to be
distributed to the holders of any other Preferred Stock of the Company ranking
on liquidation prior and in preference to the Series B Preferred Stock (such
Preferred Stock being referred to hereinafter as "Senior Preferred Stock") or
(ii) to the holders of stock ranking on a parity, either as to dividends or upon
liquidation with the Series B Preferred Stock, except distributions made ratably
on the Series B Preferred Stock and all other such parity stock in proportion to
the total amounts to which the holders of all such shares are entitled upon such
liquidation. In the event the assets of the Company available for distribution
to the holders of the shares of the Series B Preferred Stock upon any
dissolution, liquidation or winding up of the Company shall be insufficient to
pay in full the liquidation payments payable to the holders of outstanding
shares of the Series B Preferred Stock and the holders of any shares of stock
ranking on a parity with the Series B Preferred Stock, then the holders of all
such shares of the Series B Preferred Stock shall share ratably in such
distribution of assets in accordance with the amount which would be payable on
such distribution if the amounts to which the holders of outstanding shares of
the Series B Preferred Stock and the holders of outstanding shares of such
shares of parity stock are entitled were paid in full. The Series A Preferred
Stock shall rank on a parity with the Series B Preferred Stock for purposes of
this paragraph 3(a).
(b) The merger or consolidation of the Company into or with another
company, the merger or consolidation of any other company into or with the
Company, or the sale, conveyance, mortgage, pledge or lease of all or
substantially all the assets of the Company shall not be deemed to be a
liquidation, dissolution or winding up of the Company for purposes of this
Section 3.
4. Voting.
(a) Each issued and outstanding share of Series B Preferred Stock
shall be entitled to one vote per share with respect to any and all matters
presented to the shareholders of the Company for their action or consideration.
Except as provided by law and by the provisions of paragraph 4(b) below, holders
of Series B Preferred Stock shall vote together with the holders of Common Stock
as a single class.
(b) The Company shall not amend, alter or repeal the preferences,
special rights or other powers or terms of the Series B Preferred Stock so as to
affect adversely the Series B Preferred Stock, without the written consent or
affirmative vote of the holders of at least a majority of the then outstanding
aggregate number of shares of Series B Preferred Stock, given in writing or by
vote at a meeting, consenting or voting (as the case may be) separately as a
class.
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For this purpose, the authorization or issuance of any series of preferred stock
with preference or priority over, or being on a parity with the Series B
Preferred Stock as to the right to receive either dividends or amounts
distributable upon liquidation, dissolution or winding up of the Company shall
not be deemed to affect adversely the Series B Preferred Stock.
5. Optional Conversion.
(a) Each share of Series B Preferred Stock may be converted at any
time, unless previously redeemed, at the option of the holder thereof, in the
manner hereinafter provided, into fully paid and nonassessable shares of Common
Stock at the rate of 0.0973912 shares (or an effective initial conversion price
of $10.268 per share of Common Stock) of Common Stock for each one share of
Series B Preferred Stock surrendered for conversion, or at such other rate as
may then be effective following adjustment pursuant to Section 6 hereof (the
"Conversion Rate").
(b) The Company shall not issue fractions of shares of Common Stock
upon conversion of Series B Preferred Stock or scrip in lieu thereof. If any
fraction of a share of Common Stock would, except for the provisions of this
paragraph 5(b), be issuable upon conversion of any Series B Preferred Stock, the
Company shall in lieu thereof at the election of the Company, either (i) sell
such fractional share, as agent for the person entitled thereto, and distribute
the proceeds of such sale, net of any discounts, commissions, fees or expenses
associated with such sale, to such person, all in accordance with all applicable
rules under the Securities Act of 1933, as amended, or (ii) pay to the person
entitled thereto an amount in cash equal to the current value of such fraction,
calculated to the nearest one-hundredth (1/100) of a share, to be computed (x)
if the Common Stock is listed on any national securities exchange or the Nasdaq
National Market, on the basis of the last sales price (or the quoted closing bid
price if there shall have been no sales) of the Common Stock on such exchange or
the Nasdaq National market (as the case may be) on the date of conversion, or
(y) if the Common Stock is not so listed, on the basis of the mean between the
closing bid and asked prices for the Common Stock on the date of conversion as
reported by Nasdaq, or its successor, or (z) if the Common Stock is not so
listed and if there are no such closing bid and asked prices, on the basis of
the fair market value per share as determined by the Board of Directors.
(c) In order to exercise the conversion privilege, the holder of any
Series B Preferred Stock to be converted shall surrender his, her or its
certificate or certificates therefor to the principal office of the transfer
agent for the Series B Preferred Stock (or if no transfer agent be at the time
appointed, then the Company at its principal office), and shall give written
notice to the Company at such office that the holder elects to convert the
Series B Preferred Stock represented by such certificates, or any number
thereof. Such notice shall also state the name or names (with address) in which
the certificate or certificates for shares of Common Stock that shall be
issuable on such conversion shall be issued. If so required by the Company,
certificates surrendered for conversion shall be endorsed or accompanied by
written instrument or instruments of transfer, in form satisfactory to the
Company. The date of receipt by the transfer agent (or by the Company if the
Company serves as its own transfer agent) of the certificates and notice shall
be the conversion date (the "Conversion Date"). As soon as practicable after
receipt of such notice and the surrender of the certificate or certificates for
Series B Preferred Stock as aforesaid, the Company shall cause to be issued and
delivered at such office to such holder, or on
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such holder's written order, a certificate or certificates for the number of
full shares of Common Stock issuable on such conversion in accordance with the
provisions hereof and cash as provided in paragraph 5(b) in respect of any
fraction of a share of Common Stock otherwise issuable upon such conversion.
(d) The Company shall at all times when the Series B Preferred Stock
shall be outstanding reserve and keep available out of its authorized but
unissued stock, for the purposes of effecting the conversion of the Series B
Preferred Stock, such number of its duly authorized shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding Series B Preferred Stock.
(e) Shares of Series B Preferred Stock may not be converted after
the close of business on the business day preceding the date fixed for
redemption of such shares pursuant to Section 7.
(f) Upon any such conversion, the Company shall pay, out of funds
legally available therefor, to the person entitled thereto an amount equal to
all accrued but unpaid dividends to, but not including, the Conversion Date in
respect of the shares of Series B Preferred Stock surrendered for conversion,
which amount shall be payable, at the election of the Company, in cash or shares
of Common Stock. In the event the Company elects to pay such amount in shares of
Common Stock, the number of shares of Common Stock to be issued in respect of
unpaid dividends on each share of Series B Preferred Stock surrendered for
conversion shall, subject to paragraph 5(b), be determined by dividing (x) the
total amount of accrued but unpaid dividends to be paid on each such share of
Series B Preferred Stock by (y) the Fair Market Value of a share of Common
Stock. For purposes hereof, the term "Fair Market Value" shall mean (i) if the
Common Stock is listed on any national securities exchange or the Nasdaq
National Market, the average of the last sales price (or the quoted closing bid
price if there shall have been no sales) of the Common Stock on such exchange or
the Nasdaq National Market (as the case may be) for a period of 30 trading days
prior to the Conversion Date, or (ii) if the Common Stock is not so listed, on
the basis of the average of the mean between the closing bid and asked prices
for the Common Stock for each day in the 30 trading day period prior to the
Conversion Date, as reported by Nasdaq, or its successor, or (iii) if the Common
Stock is not so listed and if there are no such closing bid and asked prices, on
the basis of the fair market value per share as determined by the Board of
Directors.
(g) All shares of Series B Preferred Stock which shall have been
surrendered for conversion as herein provided shall no longer be deemed to be
outstanding and all rights with respect to such shares, including the rights, if
any, to receive notices and to vote, shall forthwith cease and terminate except
only the right of the holder thereof to receive shares of Common Stock in
exchange therefor and payment of any accrued and unpaid dividends thereon. Any
shares of Series B Preferred Stock so converted shall be retired and canceled
and shall not be reissued, and the Company may from time to time take such
appropriate action as may be necessary to reduce the authorized Series B
Preferred Stock accordingly.
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6. Adjustment Provisions.
(a) In case the Company shall at any time (x) subdivide (whether by
stock dividend, stock split or otherwise) its outstanding shares of Common Stock
into a greater number of shares or (y) combine its outstanding shares of Common
Stock into a smaller number of shares, the Conversion Rate in effect immediately
prior thereto shall be proportionately adjusted so that the holder of any shares
of Series B Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of capital stock of the Company which
the holder would have owned or have been entitled to receive after the happening
of any of the events described above, had such shares of Series B Preferred
Stock been converted immediately prior to the happening of such event. In case
the Company shall at any time prior to March 23, 1999 subdivide (whether by
stock dividend, stock split or otherwise) its outstanding shares of Common Stock
into a greater number of shares (each a "Subdivision"), the voting rights of
each share of Series B Preferred Stock shall be adjusted to provide that the
percentage of the aggregate voting power of the Common Stock represented by the
Series B Preferred Stock, shall be the same as such percentage immediately prior
to such Subdivision, with the holder of each share of Series B Preferred Stock
being entitled to the number of votes proportionate to such adjustment. The
adjustment made pursuant to this paragraph 6(a) shall become effective
immediately after the effective date of the event requiring such adjustment and
shall be made by the Board of Directors of the Company, whose judgment shall be
final, binding and conclusive absent manifest error. Such adjustment made
pursuant to this paragraph 6(a) shall become effective immediately after the
effective date of the event requiring such adjustment.
(b) If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with another
company, or the sale of all or substantially all of its assets to another
company shall be effected in such a way that holders of Common Stock shall be
entitled to receive stock, securities, cash or other property with respect to or
in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the holders of the Series B Preferred Stock shall have the
right to acquire and receive upon conversion of the Series B Preferred Stock,
which right shall be prior to the rights of the holders of Junior Stock (but
after and subject to the rights of holders of Senior Preferred Stock, if any,
and on parity with the rights of holders of Series A Preferred Stock), such
shares of stock, securities, cash or other property issuable or payable (as part
of the reorganization, reclassification, consolidation, merger or sale) with
respect to or in exchange for such number of outstanding shares of the Company's
Common Stock as would have been received upon conversion of the Series B
Preferred Stock at the Conversion Rate then in effect. The Company will not
effect any such consolidation, merger or sale, unless prior to the consummation
thereof the successor company (if other than the Company) resulting from such
consolidation or merger or the Company purchasing such assets shall assume by
written instrument mailed or delivered to the holders of the Series B Preferred
Stock at the last address of each such holder appearing on the books of the
Company, the obligation to deliver to each such holder such shares of stock,
securities, cash or other property as, in accordance with the foregoing
provisions, such holder may be entitled to purchase.
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(c) In the event that:
(1) the Company shall declare any dividend upon its common
stock payable in stock or make any special dividend or other
distribution to the holders of its Common Stock; or
(2) there shall be any capital reorganization or
reclassification of the capital stock of the Company, including any
subdivision or combination of its outstanding shares of Common
Stock, or consolidation or merger of the Company with, or sale of
all or substantially all of its assets to, another company, or
(3) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in accordance with such event, the Company shall give to the holders of
the Series B Preferred Stock:
(i) at least twenty (20) days prior written notice of the
date on which the books of the Company shall close or a
record shall be taken for such dividend or distribution
or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding up; and
(ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, at least twenty
(20) days prior written notice of the date when the same
shall take place.
A notice in accordance with the foregoing clause (i) shall also specify, in the
case of any such dividend or distribution, the date on which the holders of
Common Stock shall be entitled thereto, and a notice in accordance with the
foregoing clause (ii) shall also specify the date on which the holders of Common
Stock shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up, as the case may be. Each
such written notice shall be sent by mail, first class, postage prepaid,
addressed to the holders of the Series B Preferred Stock at the address of each
such holder as shown on the books of the Company.
(d) If any event occurs as to which, in the opinion of the Board of
Directors of the Company, the provisions of this Section 6 are not strictly
applicable or if strictly applicable would not fairly protect the rights of the
holders of the Series B Preferred stock in accordance with the essential intent
and principles of such provisions, then the Board of Directors shall make an
adjustment in the application of such provisions, in accordance with such
essential intent and principles, so as to protect such rights as aforesaid, but
in no event shall any adjustment have the effect of decreasing the Conversion
Rate as otherwise determined pursuant to any of the provisions of this Section 6
except in the case of a combination of shares of a type contemplated in
paragraph 6(a) and then in no event to a rate less than the Conversion Rate as
adjusted pursuant to paragraph 6(a).
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(e) Whenever the Conversion Rate shall be adjusted pursuant to this
Section 6, the Company shall forthwith file at each office designated for the
conversion of Series B Preferred Stock, a statement, signed by the Chairman of
the Board, the President, any Vice President or Treasurer of the Company,
showing in reasonable detail the facts requiring such adjustment and the
Conversion Rate that will be effective after such adjustment. The Company shall
also cause a notice setting forth any such adjustments to be sent by mail, first
class, postage prepaid, to each record holder of Series B Preferred Stock at his
or its address appearing on the stock register. If such notice relates to an
adjustment resulting from an event referred to in paragraph 6(c), such notice
shall be included as part of the notice required to be mailed and published
under the provisions of paragraph 6(c) hereof.
7. Redemption.
The Company shall have the right to redeem shares of Series B
Preferred Stock pursuant to the following provisions:
(a) The Company shall not have any right to redeem shares of the
Series B Preferred stock prior to September 30, 2001. Thereafter, the Company
shall have the right, at its sole option and election, out of funds legally
available therefor, to redeem the shares of Series B Preferred Stock, in whole
or in part, at any time and from time to time at a redemption price of $1.00 per
share plus an amount equal to all accrued and unpaid dividends thereon (the
"Redemotion Price"), whether or not declared, to the redemption date; provided,
that any amount due in respect of all or any portion of the Redemption Price,
including accrued dividends, may be paid in cash or shares of Common Stock as
determined by the Board of Directors. In the event the Board of Directors elects
to pay any portion of the Redemption Price in shares of Common Stock, the number
of shares of Common Stock to be issued shall be determined in accordance with
the provisions of paragraph 5(f).
(b) If less than all of the Series B Preferred Stock at the time
outstanding is to be redeemed, the shares so to be redeemed shall be selected by
lot, pro-rata or in such other manner as the Board of Directors may determine to
be fair and proper.
(c) Notice of any redemption of the Series B Preferred Stock
(including notice of whether such redemption shall be paid in cash or shares of
Common Stock) shall be mailed at least 30 days, but not more than 60 days prior
to the date fixed for redemption to each holder of Series B Preferred Stock to
be redeemed, at such holder's address as it appears on the books of the Company.
In order to facilitate the redemption of the Series B Preferred Stock, the Board
of Directors may fix a record date for the determination of holders of Series B
Preferred Stock to be redeemed, or may cause the transfer books of the Company
to be closed for the transfer of the Series B Preferred Stock, not more than 60
days prior to the date fixed for such redemption.
(d) On the redemption date specified in the notice given pursuant to
paragraph 7(c), the Company shall, and at any time after such notice shall have
been mailed and before such redemption date the Company may, deposit for the
pro-rata benefit of the holders of the shares of the Series B Preferred Stock so
called for redemption, funds in an amount equal to the portion of the Redemption
Price, if any, to be paid in cash with a bank or trust company in the Borough of
Manhattan, The City of New York, having a capital and surplus of at least
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$50,000,000. Any monies so deposited by the Company and unclaimed at the end of
one (1) year from the date designated for such redemption shall revert to the
general funds of the Company. After such reversion, any such bank or trust
company shall, upon demand, pay over to the Company such unclaimed amounts and
thereupon such bank or trust company shall be relieved of all responsibility in
respect thereof to such holder and such holder shall look only to the Company
for the payment of the redemption price. Any interest accrued on funds so
deposited pursuant to this paragraph 7(d) shall be paid from time to time to the
company for its own account.
(e) Upon the deposit of funds pursuant to paragraph 7(d) in respect
of shares of the Series B Preferred Stock called for redemption, or, in the
event that the Board of Directors elects to pay all or part of the Redemption
Price in shares of Common Stock, on the date fixed for redemption,
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, the shares represented thereby shall no longer be
deemed outstanding, the rights to receive dividends thereon shall cease to
accrue from and after the date of redemption designated in the notice of
redemption and all rights of the holders of the shares of the Series B Preferred
Stock called for redemption shall cease and terminate, excepting only the right
to receive the Redemption Price therefor and the right to convert such shares
into shares of Common Stock until the close of business on the business day
preceding the redemption date, as provided in Section 5.
8. Reissuance. Shares of this Series that have been issued and
reacquired in any manner including shares purchased, exchanged, redeemed or
converted shall not be reissued as part of this Series and shall upon compliance
with any applicable provisions of the laws of the State of Georgia have the
status of authorized and unissued shares of the Preferred Stock undesignated as
to series and may be redesignated and reissued as part of any series of
Preferred Stock.
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EXHIBIT C
Series 3 Junior Participating Preferred Stock
Section 1. Designation and Amount.
There shall be a series of the Preferred Stock which shall be
designated as the "Series 3 Junior Participating Preferred Stock," par value
$.01 per share, and the number of shares constituting such series shall be
2,500,000. Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce the number of
shares of Series 3 Junior Participating Preferred Stock to a number less than
that of the shares then outstanding plus the number of shares issuable upon
exercise of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Company.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series
of preferred stock of the Company ranking prior and superior to the Series 3
Junior Participating Preferred Stock with respect to dividends, the holders of
shares of Series 3 Junior Participating Preferred Stock, in preference to the
holders of shares of Common Stock, par value $.01 per share of the Company (the
"Common Stock"), and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on any regular
quarterly dividend payment date as shall be established by the Board of
Directors (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series 3 Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $10.00 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share amount of
all cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series 3 Junior Participating Preferred Stock.
In the event the Company shall at any time after August 25, 1996 (the "Rights
Declaration Date") declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to which
holders of shares of Series 3 Junior Participating Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
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(B) The Company shall declare a dividend or distribution on the
Series 3 Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per share on
the Series 3 Junior Participating Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series 3 Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series 3 Junior Participating
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series 3 Junior Participating Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may, in accordance with
applicable law, fix a record date for the determination of holders of shares of
Series 3 Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be not more
than such number of days prior to the date fixed for the payment thereof as may
be allowed by applicable law.
Section 3. Voting Rights.
The holders of shares of Series 3 Junior Participating Preferred
Stock shall have the following voting rights:
(A) Each share of Series 3 Junior Participating Preferred Stock
shall entitle the holder thereof to 1,000 votes on all matters submitted to a
vote of the stockholders of the Company. In the event the Company shall at any
time after the Rights Declaration Date declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
number of votes to which holders of shares of Series 3 Junior Participating
Preferred Stock were entitled immediately prior to such event under the
preceding sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Company's Second
Amended and Restated Articles of Incorporation, as amended, or by law, the
holders of shares of series 3 Junior
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Participating Preferred Stock, the holders of shares of common stock, and the
holders of shares of any other capital stock of the Company having general
voting rights, shall vote together as one class on all matters submitted to a
vote of stockholders of the Company.
(C) Except as otherwise set forth herein or in the company's Second
Amended and Restated Articles of Incorporation, as amended, and except as
otherwise provided by law, holders of Series 3 Junior Participating Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever dividends or distributions payable on the Series 3
Junior Participating Preferred stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series 3 Junior Participating Preferred Stock
outstanding shall have been paid in full, the Company shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series 3 Junior
Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series 3 Junior Participating Preferred Stock, except dividends
paid ratably on the Series 3 Junior Participating Preferred Stock
and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) except as permitted in Section 4(A)(iv) below, redeem or
purchase or otherwise acquire for consideration shares of any stock
ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series 3 Junior Participating
Preferred Stock, provided that the Company may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Company ranking junior
(either as to dividends or upon dissolution, liquidation or winding
up) to the Series 3 Junior Participating Preferred Stock; and
(iv) purchase or otherwise acquire for consideration any
shares of Series 3 Junior Participating Preferred Stock, or any
shares of stock ranking on a parity with the Series 3 Junior
Participating Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series
or classes.
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(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares.
Any shares of Series 3 Junior Participating Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. The Company shall
cause all such shares upon their cancellation to be authorized but unissued
shares of Preferred Stock which may be reissued as part of a new series of
Preferred Stock, subject to the conditions and restrictions on issuance set
forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock of the Company ranking prior and superior to the Series 3
Junior Participating Preferred Stock with respect to liquidation, upon any
liquidation (voluntary or otherwise), dissolution or winding up of the Company,
no distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series 3 Junior Participating Preferred Stock unless, prior thereto, the holders
of shares of Series 3 Junior Participating Preferred Stock shall have received
$1,000.00 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment (the
"Series 3 Liquidation Preference"). Following the payment of the full amount of
the Series 3 Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series 3 Junior Participating Preferred Stock,
unless, prior thereto, the holders of shares of Common Stock shall have received
an amount per share (the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series 3 Liquidation Preference by (ii) 1,000 (as appropriately
adjusted as set forth in subparagraph C below to reflect such events as stock
dividends, and subdivisions, combinations and consolidations with respect to the
Common Stock) (such number in clause (ii) being referred to as the "Adjustment
Number"). Following the payment of the full amount of the Series 3 Liquidation
Preference and the Common Adjustment in respect of all outstanding shares of
Series 3 Junior Participating Preferred Stock and Common Stock, respectively,
holders of Series 3 Junior Participating Preferred Stock and holders of shares
of Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to 1
with respect to such Series 3 Junior Participating Preferred Stock and Common
Stock, on a per share basis, respectively.
(B) in the event there are not sufficient assets available to permit
payment in full of the Series 3 Liquidation Preference and the liquidation
preferences of all other series of preferred stock, if any, which rank on a
parity with the Series 3 Junior Participating Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event
there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.
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(C) In the event the Company shall at any time after the Rights
Declaration Date declare or pay any dividend on Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the Adjustment Number in
effect immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, merger, etc.
In case the Company shall enter into any consolidation, merger,
combination 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 Series 3 Junior Participating
Preferred Stock shall at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 1,000 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Company
shall at any time after the Rights Declaration Date declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series 3 Junior Participating Preferred Stock
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
are outstanding immediately prior to such event.
Section 8. Redemption.
The shares of Series 3 Junior Participating Preferred Stock shall
not be redeemable.
Section 9. Ranking.
The Series 3 Junior Participating Preferred Stock shall rank junior
to all other series of the Company's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 10. Fractional Shares.
Series 3 Junior Participating Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series 3 Junior Participating Preferred Stock.
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EXHIBIT D
SERIES C $2.25 CUMULATIVE CONVERTIBLE
EXCHANGEABLE PREFERRED STOCK
SECTION 1. Designation. There is hereby created a series of
preferred stock, $.01 par value per share, of MCI WORLDCOM, Inc. (the
"Corporation") to be known as "Series C $2.25 Cumulative Convertible
Exchangeable Preferred Stock" (the "Series C Preferred Stock").
SECTION 2. Number of Shares. The number of shares of Series C
Preferred Stock authorized for issuance is 3,750,000.
SECTION 3. Stated Capital. The amount to be represented in stated
capital at all times for each share of Series C Preferred Stock shall be $.01.
SECTION 4. Dividends. (a) (i) The holders of shares of Series C
Preferred Stock shall be entitled to receive dividends at the rate of $2.25 per
annum per share of Series C Preferred Stock, which shall be fully cumulative and
shall accrue without interest. Dividends shall be payable in cash quarterly on
January 15, April 15, July 15, and October 15 of each year (commencing on
January 15, 2000) (and, in the case of any accrued but unpaid dividends, at such
additional times and for such interim periods, if any, as determined by the
Board of Directors), except that if any such date is a Saturday, Sunday or legal
holiday then such dividend shall be payable on the next day that is not a
Saturday, Sunday or legal holiday on which banks in the State of New York are
permitted to be closed (a "Business Day"), to holders of record as they appear
on the stock books of the transfer agent for the Corporation (the "Transfer
Agent") on the applicable record date, which shall be not more than 60 nor less
than 10 days preceding the payment date for such dividends, as are fixed by the
Board of Directors, but only when, as and if declared by the Board of Directors
out of funds at the time legally available for the payment of dividends. The
amount of dividends payable per share of Series C Preferred Stock for each
quarterly dividend period shall be computed by dividing the annual dividend
amount per share by four. The amount of dividends payable for any period that is
shorter or longer than a full quarterly dividend period shall be computed on the
basis of a 360-day year of twelve 30-day months. Holders of shares of Series C
Preferred Stock shall not be entitled to receive any dividends, whether payable
in cash, property or stock, which are in excess of the cumulative dividends
provided for herein.
(ii) Notwithstanding Section 4(a)(i) above, (A) if the quarterly
dividend payable on October 15, 1999 to the holders of $2.25 Cumulative
Convertible Exchangeable Preferred Stock, par value $.01 per share ("SkyTel
Preferred Stock"), of SkyTel Communications, Inc., a Delaware corporation
("SkyTel"), shall have been declared, then the first quarterly dividend of the
Series C Preferred Stock payable on January 15, 2000 shall be equal to $0.5625
per share of Series C Preferred Stock, and (B) if the quarterly dividend payable
to the holders of SkyTel Preferred Stock on October 15, 1999 shall not have been
declared, then the first quarterly dividend of the Series C Preferred Stock
payable on January 15, 2000 shall be equal to $1.125
<Page>
per share of Series C Preferred Stock. Thereafter, dividends shall accrue as set
forth in Section 4(a)(i).
(b) No dividends or other distributions, other than dividends
payable solely in shares of the Corporation's Common Stock, par value $.01 per
share (the "Common Stock") or other capital stock of the Corporation ranking
junior to the Series C Preferred Stock as to dividends (collectively, "Junior
Dividend Stock") and rights to acquire the foregoing, shall be paid or declared
and set apart for payment on any shares of Junior Dividend Stock, and no
purchase, redemption or other acquisition shall be made by the Corporation of
any shares of Junior Dividend Stock, unless and until all accrued and unpaid
dividends on the Series C Preferred Stock shall have been paid or declared and
set apart for payment.
(c) No dividends, other than dividends payable solely in shares of
Junior Dividend Stock and rights to acquire the foregoing, shall be paid or
declared and set apart for payment on any class or series of the Corporation's
capital stock ranking, as to dividends on a parity with the Series C Preferred
Stock (collectively, "Parity Dividend Stock") for any period and no purchase,
redemption or other acquisition shall be made by the Corporation of any shares
of Parity Dividend Stock unless and until full cumulative dividends have been,
or contemporaneously are, paid or declared and set apart for such payment on the
Series C Preferred Stock for all dividend payment periods terminating on or
prior to the date of payment of such dividends on the Parity Dividend Stock.
When dividends are not paid in full upon the Series C Preferred Stock and the
Parity Dividend Stock (other than the Corporation's Series B Convertible
Preferred Stock, par value $.01 per share (the "Series B Preferred Stock")), all
dividends paid or declared and set aside for payment upon shares of Series C
Preferred Stock and such other Parity Dividend Stock shall be paid or declared
and set aside for payment pro rata so that the amount of dividends paid or
declared and set aside for payment per share on the Series C Preferred Stock and
such other Parity Dividend Stock shall in all cases bear to each other the same
ratio that accrued and unpaid dividends per share on the shares of Series C
Preferred Stock and such other Parity Dividend Stock bear to each other. Except
as limited by the previous sentence, the Series B Preferred Stock shall be
Parity Dividend Stock for all purposes herein.
(d) The restrictions contained in this Section 4 shall not be deemed
to restrict repurchases of capital stock of the Corporation from employees or
consultants pursuant to employee stock option plans and the conversion of
capital stock of the Corporation into, or the exchange of capital stock of the
Corporation for, Junior Dividend Stock.
(e) Holders of shares of Series C Preferred Stock called for
redemption on a redemption date falling between a dividend payment record date
and the associated dividend payment date shall, in lieu of receiving such
dividend on the dividend payment date fixed therefor, receive such dividend
payment together with all other accrued and unpaid dividends on the date fixed
for redemption (unless such holders convert such shares to Common Stock pursuant
to Section 9 hereof).
(f) Any reference to "distribution" contained in this Section 4
shall not be deemed to include any stock dividend or distributions made in
connection with any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary.
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SECTION 5. Liquidation Preference. (a) In the event of a
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, the holders of shares of Series C Preferred Stock shall be entitled
to receive out of the assets of the Corporation, whether such assets are stated
capital or surplus of any nature, an amount equal to the dividends accrued and
unpaid thereon to the date of final distribution to such holders, whether or not
declared, without interest, and a sum equal to $50.00 per share, and no more,
before any payment shall be made or any assets distributed to the holders of
Common Stock or any other class or series of capital stock ranking junior to the
Series C Preferred Stock as to a liquidation, dissolution or winding up of the
Corporation ("Junior Liquidation Stock"). No full preferential payment on
account of any liquidation, dissolution or winding up of the Corporation shall
be made to the holders of any class or series of capital stock ranking on parity
with the Series C Preferred Stock in the event of a liquidation, dissolution or
winding up of the Corporation ("Parity Liquidation Stock") unless there shall
likewise be paid at the same time to the holders of the Series C Preferred Stock
the full amounts to which the holders of all outstanding shares of Series C
Preferred Stock are entitled with respect to such distribution. If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of the shares
of Series C Preferred Stock and any shares of Parity Liquidation Stock shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments, then such assets, or the proceeds thereof, shall be distributed among
the holders of shares of Series C Preferred Stock and of any shares of Parity
Liquidation Stock ratably in accordance with the full respective preferential
amounts that would be payable on such shares of Series C Preferred Stock and
such shares of Parity Liquidation Stock if all amounts payable thereon were paid
in full. Neither a consolidation or merger of the Corporation with another
entity nor a sale or transfer of all or part of the Corporation's assets for
cash, securities or other property will be considered a liquidation, dissolution
or winding up of the Corporation. The Series B Preferred Stock shall be Parity
Liquidation Stock for purposes of this Section 5(a).
(b) Written notice of any liquidation, dissolution or winding up of
the Corporation, stating the payment date or dates when the place or places
where the amounts distributable in such circumstances shall be payable, shall be
given by first class mail, postage prepaid, not less than 30 days prior to any
payment date stated therein, to the holders of record of the Series C Preferred
Stock at their respective addresses as the same shall appear on the stock books
of the Transfer Agent.
SECTION 6. Voting Rights. (a) Except as herein provided or as
otherwise required by law, holders of Series C Preferred Stock shall have no
voting rights. Whenever, at any time or times, dividends payable on the shares
of Series C Preferred Stock at the time outstanding shall be cumulatively in
arrears for such number of dividend periods that shall in the aggregate contain
not less than 540 days, the holders of all outstanding shares of Series C
Preferred Stock and any shares of Parity Dividend Stock upon which like voting
rights have been conferred and are exercisable (the Series C Preferred Stock and
any such Parity Dividend Stock, collectively for purposes of this Section 6, the
"Defaulted Preferred Stock"), shall be entitled to elect two directors of the
Corporation at the Corporation's next annual meeting of shareholders and at each
subsequent annual meeting of shareholders; provided, however, the shares of
Defaulted Preferred Stock shall be entitled to exercise their voting rights at a
special meeting of the holders of shares of Defaulted Preferred Stock as set
forth in paragraphs (b) and (c) of this Section 6. At elections for such
directors, each holder of Series C Preferred Stock shall be
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entitled to one vote for each share held (the holders of shares of any other
series of Defaulted Preferred Stock ranking on such a parity being entitled to
such number of votes, if any, for each share of stock held as may be granted to
them). Upon the vesting of such right of the holders of Defaulted Preferred
Stock, the maximum authorized number of members of the Board of Directors shall
automatically be increased by two and the two vacancies so created shall be
filled by vote of the holders of outstanding Defaulted Preferred Stock as
hereinafter set forth. The right of holders of Defaulted Preferred Stock, voting
separately as a class without regard to series, to elect members of the Board of
Directors as aforesaid shall continue until such time as all dividends
accumulated and unpaid on Defaulted Preferred Stock shall have been paid or
declared and funds set aside for payment in full, at which time such right shall
terminate, except as herein or by law expressly provided, subject to revesting
in the event of each and every subsequent default of the character above
mentioned.
(b) Whenever such voting right shall have vested, such right may be
exercised initially either at a special meeting of the holders of shares of
Defaulted Preferred Stock called as hereinafter provided, or at any annual
meeting of shareholders held for the purpose of electing directors, and
thereafter at such meeting or by the written consent of such holders pursuant to
Section 14-2-704 of the Georgia Business Corporation Code.
(c) At any time when such voting right shall have vested in the
holders of shares of Defaulted Preferred Stock entitled to vote thereon, and if
such right shall not already have been initially exercised, an officer of the
Corporation shall, upon the written request of 10% of the holders of record of
shares of such Defaulted Preferred Stock then outstanding, addressed to the
Secretary of the Corporation, call a special meeting of holders of shares of
such Defaulted Preferred Stock. Such meeting shall be held at the earliest
practicable date upon the notice required for special meetings of shareholders
at the place for holding annual meetings of shareholders of the Corporation or,
if none, at a place designated by the Secretary of the Corporation. If such
meeting shall not be called by the proper officers of the Corporation within 30
days after the personal service of such written request upon the Secretary of
the Corporation, or within 30 days after mailing the same within the United
States, by registered mail, addressed to the Secretary of the Corporation at its
principal office (such mailing to be evidenced by the registry receipt issued by
the postal authorities), then the holders of record of 10% of the shares of
Defaulted Preferred Stock then outstanding may designate in writing any person
to call such meeting at the expense of the Corporation, and such meeting may be
called by such person so designated upon the notice required for special
meetings of shareholders and shall be held at the same place as is elsewhere
provided in this paragraph. Any holder of shares of Defaulted Preferred Stock
then outstanding that would be entitled to vote at such meeting shall have
access to the stock books of the Transfer Agent for the purpose of causing a
meeting of shareholders to be called pursuant to the provisions of this
paragraph. Notwithstanding the provisions of this paragraph, however, no such
special meeting shall be called or held during a period within 45 days
immediately preceding the date fixed for the next annual meeting of
shareholders.
(d) Subject to the provisions hereof, the directors elected pursuant
to this Section shall serve until the next annual meeting or until their
respective successors shall be elected and qualified. Any director elected by
the holders of Defaulted Preferred Stock may be removed by, and shall not be
removed otherwise than by, the vote of the holders of a majority of the
outstanding shares of the Defaulted Preferred Stock who were entitled to
participate in such
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election of directors, voting as a separate class without regard to series, at a
meeting called for such purpose or by written consent as permitted by law and
the Articles of Incorporation and Bylaws of the Corporation. If the office of
any director elected by the holders of Defaulted Preferred Stock, voting as a
class, without regard to series, becomes vacant by reason of death, resignation,
retirement, disqualification or removal from office or otherwise, the remaining
director elected by the holders of Defaulted Preferred Stock, voting as a class,
without regard to series, may choose a successor who shall hold office for the
unexpired term in respect of which such vacancy occurred upon any termination of
the right of the holders of Defaulted Preferred Stock to vote for directors as
herein provided, the term of office of all directors then in office elected by
the holders of Defaulted Preferred Stock, voting as a class, without regard to
series, shall terminate immediately. Whenever the terms of office of the
directors elected by the holders of Defaulted Preferred Stock, voting as a
class, without regard to series, shall so terminate and the special voting
powers vested in the holders of Defaulted Preferred Stock shall have expired,
the number of directors shall be such number as may be provided for in the
Bylaws irrespective of any increase made pursuant to the provisions of this
Section 6.
(e) So long as any shares of the Series C Preferred Stock remain
outstanding and in addition to any other vote required by law, the vote or
consent of the holders of at least a majority of the shares of Series C
Preferred Stock then outstanding given in person or by proxy either in writing
(as permitted by law and the Articles of Incorporation and Bylaws of the
Corporation) or at any special or annual meeting, shall be necessary to permit,
effect or validate any one or more of the following:
(i) the creation or issuance, or any increase in the
authorized number of shares of any class or series of stock ranking prior
to the Series C Preferred Stock either as to dividends ("Senior Dividend
Stock") or upon liquidation, dissolution or winding up of the Corporation
("Senior Liquidation Stock"), or any security convertible into or
exercisable or exchangeable for Senior Dividend Stock or Senior
Liquidation Stock; or
(ii) the amendment, alteration or repeal of any of the
provisions of the Articles of Incorporation of the Corporation (including
this Exhibit D) that would adversely affect any right, preference,
privilege or voting power of the Series C Preferred Stock; provided,
however, that any increase in the amount of authorized preferred stock or
the creation and issuance of other series of Parity Dividend Stock, Parity
Liquidation Stock, Junior Dividend Stock or Junior Liquidation Stock shall
not be deemed to affect adversely such rights, preferences or voting
powers.
SECTION 7. Optional Redemption. (a) The Corporation at its option
may redeem shares of Series C Preferred Stock out of funds legally available for
the purpose, in whole or in part, at any time, at the redemption prices per
share referred to below in effect on the date fixed for redemption (the
"Redemption Date") during the period beginning on October 15 of the years shown
below, plus an amount equal to the dividends accrued and unpaid on the shares of
Series C Preferred Stock to be redeemed, whether or not declared, to the
Redemption Date:
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<Table>
<Caption>
If Redeemed During The 12-Month
Period Beginning October 15, Redemption Price Per Share
------------------------------- --------------------------
1998.................................... $51.00
1999.................................... $50.75
2000.................................... $50.50
2001.................................... $50.25
2002 and thereafter..................... $50.00
</Table>
(b) In the event the Corporation shall redeem shares of Series C
Preferred Stock, a notice of such redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each holder of record of the shares to be redeemed, at such
holder's address as the same appears on the stock books of the Transfer Agent.
Each such notice shall state: (i) the Redemption Date; (ii) the number of shares
of Series C Preferred Stock to be redeemed and, if less than all the shares held
by such holder are to be redeemed, the number of such shares to be redeemed from
such holder; (iii) the redemption price; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the redemption
price; (v) that payment will be made upon presentation and surrender of
certificates evidencing such Series C Preferred Stock; (vi) the then current
conversion price and the date on which the right to convert such shares of
Series C Preferred Stock will expire; (vii) that dividends on the shares to be
redeemed shall cease to accrue following such Redemption Date; (viii) that such
redemption is at the option of the Corporation; and (ix) that dividends accrued
to and including the Redemption Date will be paid as specified in said notice.
Notice having been mailed as aforesaid, on and after the Redemption Date, unless
the Corporation shall be in default in providing money for the payment of the
redemption price (including an amount equal to any accrued and unpaid dividends
to and including the Redemption Date), (x) dividends on the shares of the Series
C Preferred Stock so called for redemption shall cease to accrue, (y) said
shares shall be deemed no longer outstanding, and (z) all rights of the holders
thereof as shareholders of the Corporation (except the right to receive from the
Corporation the monies payable upon redemption, without interest thereon, upon
surrender of the certificates evidencing such shares) shall cease. The
Corporation's obligation to provide monies in accordance with the preceding
sentence shall be deemed fulfilled if, on or before the Redemption Date, the
Corporation shall deposit with a bank or trust company having an office or
agency in the Borough of Manhattan, City of New York, and having a capital and
surplus of at least $50,000,000, the principal amount of funds necessary for
such redemption, in trust for the account of the holders of the shares to be
redeemed (and so as to be and continue to be available therefor), with
irrevocable instructions and authority to such bank or trust company that such
funds be applied to the redemption of the shares of Series C Preferred Stock so
called for redemption. Any interest accrued on such funds shall be paid to the
Corporation from time to time. Any funds so deposited and unclaimed at the end
of three years from such Redemption Date shall be released or repaid to the
Corporation, after which, subject to any applicable laws relating to escheat or
unclaimed property, the holder or holders of such shares of Series C Preferred
Stock so called for redemption shall look only to the Corporation for payment of
the redemption price.
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Upon surrender in accordance with said notice of the certificates
for any such shares so redeemed (properly endorsed or assigned for transfer, if
the Board of Directors shall so require and the notice shall so state), such
shares shall be redeemed by the Corporation at the applicable redemption price
aforesaid. If fewer than all the outstanding shares of Series C Preferred Stock
are to be redeemed, shares to be redeemed shall be selected by the Corporation
from outstanding shares of Series C Preferred Stock not previously called for
redemption by lot or pro rata or by any other equitable method determined by the
Board of Directors in its sole discretion. If fewer than all the shares
represented by any certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the holder thereof.
Notwithstanding the foregoing, if the Corporation's notice of
redemption has been given pursuant to this Section 7 and any holder of shares of
Series C Preferred Stock shall, prior to the close of business on the third
Business Day preceding the Redemption Date, give written notice to the
Corporation pursuant to this Section 7(b) hereof of the conversion of any or all
of the shares to be redeemed held by such holder (accompanied by a certificate
or certificates for such shares, duly endorsed or assigned to the Corporation),
then the conversion of such shares to be redeemed shall become effective as
provided in Section 9.
(c) The election by the Corporation to redeem shares of Series C
Preferred Stock pursuant to Section 7(b) hereof shall become irrevocable only on
the relevant Redemption Date.
SECTION 8. Exchange. (a) In addition to the optional redemption
rights of the Corporation as set forth in Section 7 above, the Corporation shall
have the right to exchange the Series C Preferred Stock in whole, but not in
part, on any dividend payment date for the Corporation's 4.5% Convertible
Subordinated Debentures due 2003 (the "Debentures") to be issued substantially
in the form set forth in the indenture (the "Debenture Indenture") filed as an
exhibit to the Corporation's Registration Statement on Form S-4, Registration
No. 333-85919, filed with the Securities and Exchange Commission on August 26,
1999.
(b) No such exchange shall be made unless all dividends accrued and
payable on the Series C Preferred Stock have been paid or declared and such
amount set aside for their payment prior to the date fixed for such exchange
(the "Exchange Date"). Holders of outstanding shares of Series C Preferred Stock
will be entitled to receive $50.00 principal amount of Debentures in exchange
for each share of series C Preferred Stock held by them at the time of exchange;
provided that the Debentures will be issuable in denominations of $1,000.00 and
integral multiples thereof. If the exchange results in an amount of Debentures
that is not an integral multiple of $1,000.00, the amount exceeding the closest
integral multiple of $1,000.00 will be paid in cash by the Corporation.
(c) Notice of such exchange of shares of Series C Preferred Stock
shall be mailed at least 30 days but not more than 60 days prior to the Exchange
Date to each holder of Series C Preferred Stock, at such holder's address as it
appears on the books of the Corporation. The notice shall specify the Exchange
Date and the place where certificates for shares of Series C Preferred Stock are
to be surrendered for Debentures and shall state that dividends on Series C
Preferred Stock will cease to accrue on the Exchange Date.
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(d) Prior to giving notice of intention to exchange pursuant to
subsection 8(c) above, the Corporation and a bank or trust company selected by
the Corporation shall execute and deliver an indenture substantially in the form
of the Debenture Indenture with such changes as may be required by law, stock
exchange rule, or usage that do not materially and adversely affect the rights
of the holders of the Debentures (the "Indenture"). Prior to any exchange of
shares of Series C Preferred Stock pursuant to subsection 8(a) above, any
amendments or supplements to the Indenture which materially and adversely affect
the rights of the holders of the Debentures shall be consented to by the holders
of more than 50 percent of the then outstanding shares of Series C Preferred
Stock. A copy of the Indenture may be inspected by the holders of any shares of
Series C Preferred Stock at the offices of the Corporation during normal
business hours. The Corporation will not give notice of its intention to
exchange pursuant to subsection 8(c) above unless it shall file at the office or
agency of the Corporation maintained for the exchange of shares of Series C
Preferred Stock an opinion of counsel that the Indenture has been duly
authorized, executed and delivered by the Corporation, has been duly qualified
under the Trust Indenture Act of 1939 (or that such qualification is not
necessary) and constitutes a valid and binding instrument enforceable against
the Corporation in accordance with its terms (subject to bankruptcy, insolvency,
reorganization or other laws of general applicability relating to or affecting
creditors, rights and to the general principles of equity; and subject to such
other qualifications as are then customarily contained in opinions of counsel
experienced in such matters); and to the effect that the Debentures have been
duly authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered in exchange for the shares of Series C
Preferred Stock, will constitute valid and binding obligations of the
Corporation entitled to the benefits of the Indenture (subject as aforesaid);
and that under the laws of the State of Georgia, the Debentures will be treated
as on a parity with the indebtedness of the Corporation to its general unsecured
creditors, except to the extent subordinated in the Indenture; and that the
exchange of Debentures for the Series C Preferred Stock will not violate the
laws of the State of Georgia; and that neither the execution and delivery of the
Indenture or the Debentures nor compliance with the terms, conditions or
provisions of such instruments will result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument, known to such counsel,
to which the Corporation or any of its subsidiaries is a party or by which it or
any of them is bound, or any decree, judgment, order, rule or regulations known
to counsel, of any court or governmental agency or body having jurisdiction over
the Corporation and such subsidiaries or any of their property; and that
issuance of the Debentures in exchange for the shares of Series C Preferred
Stock is exempt from registration under the Securities Act of 1933, as amended
(the "Securities Act").
(e) If on the Exchange Date the Corporation has taken all action
required to authorize the issuance of the Debentures in exchange for the Series
C Preferred Stock, then, notwithstanding that the certificates for such shares
have not been surrendered for cancellation, from and after the Exchange Date,
all of the shares of Series C Preferred Stock shall no longer be deemed
outstanding and all rights relating to such shares shall terminate, except only
the right to receive dividends accrued and unpaid to the Exchange Date and, upon
surrender of certificates therefor, the right to receive the Debentures, and the
person or persons entitled to receive the Debentures issuable upon the exchange
shall be treated for all purposes as the registered holder or holders of such
Debentures. Upon due surrender of a certificate representing shares of Series
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C Preferred Stock, the holder thereof shall receive the principal amount of
Debentures to which such holder is thereby entitled plus any amounts of cash
which may be due hereunder.
(f) The election of the Corporation to exchange the Series C
Preferred Stock for the Debentures shall become irrevocable only on the Exchange
Date.
SECTION 9. Conversion at Option of Holder. (a) Each share of Series
C Preferred Stock may be converted, at any time and at the option of the holder,
into fully paid, non-assessable shares of Common Stock of the Corporation on and
subject to the terms and conditions of this Section 9.
(b) The number of shares of Common Stock issuable upon conversion of
each share of the Series C Preferred Stock shall be equal to the quotient
obtained by dividing (i) $50.00 by (ii) the Conversion Price (as hereinafter
defined) in effect on the date of conversion (calculated as to each conversion
to the nearest 1/100th of a share). The Conversion Price shall initially equal
(i) $45.00 divided by (ii) the exchange ratio applicable to the common stock,
par value $.01 per share, of SkyTel, in the merger of SkyTel with and into
Empire Merger Inc., a wholly owned subsidiary of the Corporation; provided,
however, that such Conversion Price shall be adjusted and readjusted from time
to time as provided in this Section 9 and, as so adjusted and readjusted, shall
remain in effect until a further adjustment or readjustment thereof is required
by this Section 9.
(c) Except as may be provided by the Board of Directors, upon
conversion of the Series C Preferred Stock, the Corporation is not obligated to
make any payment or adjustment with respect to dividends accrued on the Series C
Preferred Stock through the date of conversion unless the holder of the shares
of Series C Preferred Stock being converted was the record holder of such shares
on the record date for the payment of such dividends.
(d) Upon surrender to the Corporation at the office of the Transfer
Agent or such other place or places, if any, as the Board of Directors may
determine, of certificates duly endorsed to the Corporation or in blank for
shares of Series C Preferred Stock to be converted together with appropriate
evidence of the payment of any transfer or similar tax, if required, and written
instructions to the Corporation requesting conversion of such shares and
specifying the name and address of the person, corporation, firm or other entity
to whom such shares of Common Stock are to be issued, the Corporation shall
issue (i) the number of full shares of Common Stock issuable upon conversion
thereof as of the time of such surrender and as promptly as practicable
thereafter will deliver certificates for such shares of Common Stock, and (ii)
cash for any remaining fraction of a share of Common Stock in an amount equaling
the Current Market Price (as hereinafter defined) on the date such shares are
tendered for conversion.
Upon surrender of a certificate representing shares of Series C Preferred Stock
to be converted in part, in addition to the foregoing, the Corporation shall
also issue to such holder a new certificate representing any unconverted shares
of Series C Preferred Stock represented by the certificate surrendered for
conversion.
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(e) The Corporation shall pay all documentary, stamp, or similar issue or
transfer tax due on the issue of shares of Common Stock issuable upon conversion
of the Series C Preferred Stock; provided, however, that the holder of shares of
Series C Preferred Stock so converted shall pay any such tax which is due
because such shares are to be issued in the name other than that of such holder.
(f) The Conversion Price in effect at any time shall be adjusted as
follows:
(i) If the Corporation shall, at any time or from time to
time, effect a subdivision of the outstanding Common Stock, the Conversion
Price in effect immediately before such subdivision shall be
proportionately decreased and, conversely, if the Corporation shall, at
any time or from time to time, effect a combination of the outstanding
Common Stock, the Conversion Price in effect immediately before such
combination shall be proportionately increased. Any adjustment under this
subsection shall become effective at the close of business on the record
date fixed for the applicable subdivision or combination.
(ii) In the event the Corporation shall, at any time or from
time to time, make or issue to all holders of shares of Common Stock (or
fix a record date for the determination of holders of Common Stock
entitled to receive) a dividend or other distribution payable in shares of
Common Stock, then the Conversion Price then in effect shall be decreased
as of the time of such issuance (or, in the event such a record date shall
have been fixed, as of the close of business on such record date) in
accordance with the following formula:
O
-----
C* = C x O + N
where:
C* = the adjusted Conversion Price.
C = the current Conversion Price.
O = the number of shares of Common Stock outstanding immediately prior to
the applicable issuance (or the close of business on the record date).
N = The number of additional shares of Common Stock issued in payment
of such dividend of distribution.
(iii) In the event the Corporation shall, at any time or from
time to time, issue or sell (or be deemed pursuant to Section 9(g) hereto
to have issued or sold) to all holders of shares of Common Stock any
shares of Common Stock for a consideration per
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share that is less than the Current Market Price immediately prior to such
issuance or sale (or deemed issuance or sale), then the Conversion Price
then in effect shall be decreased as of the time of such issuance or sale
(or deemed issuance or sale) in accordance with the following formula:
NxP
---
C* = C x O + M
-----
O+N
where:
C* = the adjusted Conversion Price.
C = the current Conversion Price.
O = the number of shares of Common Stock outstanding on the date of the
applicable issuance or sale (or deemed issuance or sale).
N = the number of additional shares of Common Stock issued or sold (or
deemed issued or sold).
P = the aggregate consideration per share received and/or to be
received for each additional share of Common Stock issued or sold (or
deemed issued or sold).
M = the Current Market Price per share of Common Stock.
(g) For purposes of determining the adjusted Conversion Price under
Section 9(f), the following principles shall be applicable:
(i) If the Corporation in any manner grants to all holders of shares
of Common Stock any rights or options (collectively, "Options") to
subscribe for or to purchase Common Stock or other securities convertible
into or exercisable or exchangeable for Common Stock (collectively,
"Convertible Securities") and the aggregate consideration payable with
respect to the issuance of such options and with respect to the later
conversion, exercise or exchange thereof for Common Stock is less than the
Current Market Price in effect immediately prior to the granting of such
options, then the maximum number of shares of Common Stock issuable upon
the exercise of such options (and, if appropriate, upon the subsequent
conversion, exercise or exchange of such Convertible Securities) shall be
deemed to be outstanding and such Options shall be deemed to have been
issued and sold for an aggregate consideration per share determined by
dividing (A) the aggregate amount received or receivable by the
Corporation as consideration for the granting of such options, plus the
minimum aggregate amount of additional consideration payable to the
Corporation upon the exercise of all such options (and, if appropriate,
the minimum aggregate amount of
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additional consideration payable upon the conversion, exercise or exchange
of such Convertible Securities), by (B) the maximum number of shares of
Common Stock issuable upon the exercise of all such Options (and, if
appropriate, upon the conversion, exercise or exchange of such Convertible
Securities). No further adjustment of the Conversion Price shall be made
when Common Stock or Convertible Securities are issued upon the exercise
of such options or when Common Stock is issued upon the conversion,
exercise or exchange of such Convertible Securities.
(ii) If the Corporation in any manner issues to all holders of
shares of Common Stock any rights to subscribe for or to purchase
Convertible Securities and the aggregate consideration for which Common
Stock is issuable upon the conversion, exercise or exchange of such
Convertible Securities is less than the Current Market Price in effect
immediately prior to the issuance of such Convertible Securities, then the
maximum number of shares of Common Stock issuable upon tile conversion,
exercise or exchange of such Convertible Securities shall be deemed to be
outstanding and such Convertible Securities shall be deemed to have been
issued and sold for an aggregate consideration per share determined by
dividing (A) the aggregate amount received or receivable by the
Corporation as consideration for the issuance of such Convertible
Securities, plus the minimum aggregate amount of additional consideration
payable to the Corporation upon the conversion, exercise or exchange of
all such Convertible Securities, by (B) the maximum number of shares of
Common Stock issuable upon the conversion, exercise or exchange of such
Convertible Securities. No further adjustment of the Conversion Price
shall be made when Common Stock is issued upon the conversion, exercise or
exchange of such Convertible Securities.
(iii) If the purchase price provided for in any Options, the
additional consideration, if any, payable upon the conversion or exchange
of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exchangeable for common Stock change at
any time, and such change is not due solely to the operation of
anti-dilution provisions similar in nature to those set forth in this
Section 9, then the Conversion Price in effect at the time of such change
shall be readjusted to the Conversion Price which would have been in
effect at such time had such options or Convertible Securities still
outstanding provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold.
(iv) Upon the expiration of any Option or the termination of any
right to convert, exercise or exchange any Convertible Securities without
the conversion, exercise or exchange of any such Option or right, the
Conversion Price then in effect hereunder will be adjusted to the
Conversion Price which would have been in effect at the time of such
expiration or termination had such option or Convertible Security, to the
extent outstanding immediately prior to such expiration or termination,
never been issued.
(v) If any Common Stock, Options or Convertible Securities are
issued or sold or deemed to have been issued or sold for cash, the
consideration received therefor will be deemed to be the net amount
received by the Corporation therefor. In case any Common Stock, Options or
Convertible Securities are issued or sold for a consideration other than
cash, the amount of such consideration
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other than cash received by the Corporation will be the fair value of such
consideration, as determined in good faith by the Board of Directors.
(vi) If Common Stock, Options or Convertible Securities are issued
or sold or deemed to have been issued or sold together with other stock or
securities or other assets of the Corporation for a consideration that
covers both, the consideration received by the Corporation for any Common
Stock, Options or Convertible Securities shall be computed as the portion
of the consideration so received that may be reasonably determined in good
faith by the Board of Directors to be allocable to such Common Stock,
Options or Convertible Securities, as the case may be.
(vii) Anything herein to the contrary notwithstanding, no adjustment
will be made to the Conversion Price by reason of (A) the issuance of
Common Stock, Options or Convertible Securities to employees or directors
of the Corporation pursuant to employee benefit plans or otherwise, or the
issuance of Common Stock upon the conversion, exercise or exchange
thereof, (B) the issuance of Common Stock upon the conversion, exercise or
exchange of options or Convertible Securities issued and outstanding on
the date these Articles of Amendment are filed with the Secretary of State
of the State of Georgia, (C) the issuance of any securities pursuant to
and in accordance with the Rights Agreement dated August 25, 1996 between
the Corporation and The Bank of New York, as amended (or any successor
agreement), or (D) the issuance of Common Stock upon the conversion of the
Series C Preferred Stock.
(h) For purposes of this Exhibit D, the term "Current Market Price"
per share of Common Stock on any date shall be deemed to be the average daily
Closing Prices of the Common Stock for the 30 consecutive trading days
commencing 45 trading days before such date. The "Closing Price" for each
trading day shall be the last reported sales price regular way or, in case no
sale takes place on such day, the average of the closing hid and asked prices
regular way on such day, in either case as reported on the principal national
securities exchange (which for this purpose shall include The Nasdaq National
Market system ("NASDAQ/NMS")) on which the Common Stock is listed or admitted
for trading, or if not listed or admitted to trading on any national securities
exchange, the average of the high bid and low asked prices on such day as
reported by the National Association of Securities Dealers, Inc. through the
National Association of Securities Dealers Automated Quotation system
("NASDAQ"), or if the National Association of Securities Dealers, Inc. through
NASDAQ shall not have reported any bid and asked prices for the Common Stock on
such day, the average of the hid and asked prices for such day as furnished by
any New York Stock Exchange member firm selected from time to time by the
Corporation for such purpose, or if no such bid and asked prices can be obtained
from any such firm, the fair market value of one share of the Common Stock on
such day as determined in good faith by the Board of Directors.
(i) No adjustment in the Conversion Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Price; provided, however, that any adjustments that are not made
shall he carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 9 shall be made either to the nearest cent
or to the nearest 1/100th of a share.
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(j) No adjustment need be made for a change in the par value of the
Common Stock.
(k) Whenever the Conversion Price is adjusted, the Corporation shall
promptly mail to holders of Series C Preferred Stock a notice of adjustment
briefly stating the facts requiring the adjustment and the manner of computing
it.
(l) In case of any consolidation or merger of the Corporation with
any other entity (other than a wholly-owned subsidiary of the Corporation), or
in the case of any sale or transfer of all or substantially all of the assets of
the Corporation, or in the case of any share exchange pursuant to which all of
the outstanding shares of Common Stock are converted into other securities or
property, the Corporation shall make appropriate provision or cause appropriate
provision to be made so that holders of each share of Series C Preferred Stock
then outstanding shall have the right thereafter to convert such share of Series
C Preferred Stock into the kind and amount of shares of stock and other
securities and property receivable upon such consolidation, merger, sale,
transfer or share exchange by a holder of the number of shares of Common Stock
into which such share of Series C Preferred Stock might have been converted
immediately prior to the effective date of such consolidation, merger, sale,
transfer or share exchange. If in connection with any such consolidation,
merger, sale, transfer or share exchange, each holder of shares of Common Stock
is entitled to elect to receive either securities, cash or other assets upon
completion of such transaction, the Corporation shall provide or cause to be
provided to each holder of Series C Preferred Stock the right to elect to
receive the securities, cash or other assets into which the Series C Preferred
Stock held by such holder shall be convertible after completion of any such
transaction on the same terms and subject to the same conditions applicable to
holders of the Common Stock (including, without limitation, notice of the right
to elect, limitations on the period in which such election shall be made and the
effect of failing to exercise the election). The Corporation shall not effect
any such transaction unless the provisions of this paragraph have been
fulfilled. The above provisions shall similarly apply to successive
consolidations, mergers, sales, transfers or share exchanges.
(m) The Corporation shall reserve and at all times keep available,
free from preemptive rights, out of its authorized but unissued stock, for the
purpose of effecting the conversion of the Series C Preferred Stock, such number
of its shares of duly authorized Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of Series C
Preferred Stock.
SECTION 10. Redemption Upon Fundamental Change. (a) If a Fundamental
Change (as defined in paragraph (c) of this Section 10) occurs, each holder of
Series C Preferred Stock shall have the right, at the holder's option, to
require the Corporation to repurchase all of such holder's Series C Preferred
Stock, or any portion thereof that has an aggregate liquidation value that is a
multiple of $50.00, on the date (the "Repurchase Date") selected by the
Corporation that is not less than ten nor more than 20 days after the Final
Surrender Date (as defined in paragraph (b) of this Section 10), at a price per
share equal to $50.00, plus an amount equal to accrued and unpaid dividends to
the Repurchase Date. The Corporation may, at its option, pay all or any portion
of the repurchase price upon a Fundamental Change in shares of Common Stock of
the Corporation or any successor corporation. For purposes of calculating the
number of shares of common stock issuable upon such redemption, the value of any
such
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common stock shall be equal to the average of the Closing Prices of such common
stock for the five Trading Dates ending on the third Trading Date immediately
preceding the Repurchase Date. Payment may not be made in shares of common stock
unless such shares (i) have been, or will be, registered on or prior to the
Final Surrender Date (as defined in paragraph (b) of this Section 10) under the
Securities Act or are freely tradable pursuant to an exemption thereunder and
(ii) are listed on a United States national securities exchange or quoted
through the NASDAQ/NMS at the time of payment.
(b) Within 30 days after the occurrence of a Fundamental Change, the
Corporation must mail to all holders of record of the Series C Preferred Stock a
notice containing the information set out in paragraph (b) of Section 7, except
that, for purposes of this Section 10 only, instead of stating that such
redemption is at the option of the Corporation, the notice shall describe the
occurrence of such Fundamental Change and of the repurchase right arising as a
result thereof. The Corporation must cause a copy of such notice to be published
in a daily newspaper of national circulation (which shall be The Wall Street
Journal, if then in circulation). At least two Business Days prior to the
Repurchase Date, the Corporation must publish a similar notice stating whether
and to what extent the repurchase price will be paid in cash or shares of common
stock. To exercise the repurchase right, a holder of Series C Preferred Stock
must surrender, on or before the date that is, subject to any contrary
requirements of applicable law, 60 days after the date of mailing of the
applicable notice (the "Final Surrender Date"), the certificates representing
the Series C Preferred Stock with respect to which the right is being exercised,
duly endorsed for transfer to the Corporation, together with a written notice of
election.
(c) The term "Fundamental Change" shall mean either of the
following:
(i) a "Person" or "Group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) becoming, in one transaction or a series of related
transactions, the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of Voting Shares (as defined in this paragraph (c)) of the
Corporation entitled to exercise more than 50% of the total voting power
of all outstanding Voting Shares of the Corporation (including any Voting
Shares that are not then outstanding of which such person or Group is
deemed the beneficial owner); or
(ii) any consolidation of the Corporation with, or merger of
the Corporation into, any other entity, any merger of another entity into
the Corporation, or any sale, lease or transfer of all or substantially
all of the assets of the Corporation to another entity (other than a
merger (a) that results in the holders of Common Stock of the Corporation
immediately prior to giving effect to such transaction owning shares of
capital stock of the surviving corporation in such transaction
representing in excess of 40% of the total voting power of all shares of
capital stock of such surviving corporation entitled to vote generally in
the election of directors and (b) in which the shares of the surviving
corporation held by such holders are, or immediately upon issuance will
be, listed on a national securities exchange or quoted through the
NASDAQ/NMS and are not subject to any right of repurchase by the issuer
thereof or any third party and are not otherwise subject to any
encumbrance as a result of such transaction, provided, that the
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surviving corporation (x) amends its charter or certificate of
incorporation to include the Series C Preferred Stock and its terms as set
forth herein or (y) if the Series C Preferred Stock has been exchanged for
the Debentures, assumes or guarantees the Corporation's obligations under
the Debentures);
provided, however, that a Fundamental Change shall not occur if either (i) for
any five Trading Dates during the ten Trading Days immediately preceding either
the public announcement by the Corporation of such transaction or the
consummation of such transaction, the Closing Price of the Common Stock is at
least equal to 105% of the conversion price in effect on such trading days or
(ii) at least 90% of the consideration (excluding cash payments for fractional
shares) in such transaction or transactions to the holders of Common Stock
consists of shares of common stock that are, or immediately upon issuance will
be, listed on a national securities exchange or quoted through the NASDAQ/NMS,
and as a result of such transaction or transactions, the Series C Preferred
Stock becomes convertible into such common stock.
(d) An election by a holder of Series C Preferred Stock to have the
Corporation redeem shares of Series C Preferred Stock pursuant to subsection
10(a) shall become irrevocable at the close of business on the Repurchase Date.
(e) The Corporation agrees that it will not complete any Fundamental
Change described in subsection 10(c) unless proper provision has been made to
satisfy its obligations under this Section 10.
For purposes of this Section 10, "Voting Shares" is defined to mean all
outstanding shares of any class or classes (however designated) of capital stock
entitled to vote generally in the election of members of the Board of Directors.
SECTION 11. Limitation and Rights Upon Insolvency. Notwithstanding
any other provision of this Exhibit D, the Corporation shall not be required to
pay any dividend on, or to pay any amount in respect of any redemption of, the
Series C Preferred stock at a time when immediately after making such payment
the Corporation is or would be rendered insolvent (as defined by applicable
law), provided that the obligation of the Corporation to make any such payment
shall not be extinguished in the event the foregoing limitation applies.
SECTION 12. Shares to be Retired. Any share of Series C Preferred
Stock converted, redeemed or otherwise acquired by the Corporation shall be
retired and canceled and shall upon cancellation be restored to the status of
authorized but unissued shares of preferred stock, subject to reissuance by the
Board of Directors as Series C Preferred Stock or as shares of preferred stock
of one or more other series.
SECTION 13. Record Holders. The Corporation and the Transfer Agent
may deem and treat the record holder of any shares of Series C Preferred Stock
as the true and lawful owner thereof for all purposes, and neither the
Corporation nor the Transfer Agent shall be affected by any notice to the
contrary.
SECTION 14. Notice. Except as may otherwise be provided for herein,
all notices referred to herein shall be in writing, and all notices hereunder
shall be deemed to have been given upon, the earlier of receipt of such notice
or three Business Days after the mailing of
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such notice if sent by registered mail (unless first-class mail shall be
specifically permitted for such notice under the terms of these Articles of
Incorporation) with postage prepaid, addressed: if to the Corporation, to its
offices at 500 Clinton Center Drive, Clinton, Mississippi 39056, Attention:
Corporate Secretary, or to an agent of the Corporation designated as permitted
by this Articles of Incorporation or, if to any holder of the Series C Preferred
Stock, to such holder at the address of such holder of the Series C Preferred
Stock as listed in the stock record books of the Corporation (which may include
the records of the Transfer Agent); or to such other address as the Corporation
or holder, as the case may be, shall have designated by notice similarly given.
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