CERTIFICATE OF DESIGNATION
OF 15% SERIES C-2 PREFERRED STOCK
OF
AMERICAN SKIING COMPANY
Pursuant to Section 151 of the General Corporation
Law of the State of Delaware
AMERICAN SKIING COMPANY, a corporation organized under the laws
of the State of Delaware (the "Corporation"), certifies that, pursuant to the
authority contained in its Certificate of Incorporation, and in accordance with
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, its Board of Directors has adopted the following resolution creating a
series of Serial Preferred Stock, $.01 par value per share, designated 15%
Series C-2 Preferred Stock:
RESOLVED, that the series of authorized Preferred Stock, par
value $.01 per share, designated 15% Series C-2 Preferred Stock of the
Corporation be hereby created, and that the designations and amounts thereof and
the powers, preferences and relative, optional and other special rights of the
shares of such series, and the qualifications, limitations and restrictions
thereof, are as follows:
A. The Corporation shall have authority to issue 150,000 shares of
15% of Series C-2 Preferred Stock, $.01 par value per share (the "Series C-2
Preferred Stock"); and
B. The powers, preferences and relative, optional and other special
rights of the shares of the Series C-2 Preferred Stock, and the qualifications,
limitations and restrictions thereof are as follows:
Section 1. Definitions.
As used herein, the following terms have the following meanings
(with terms defined in the singular having comparable meanings when used in the
plural and vice versa), unless the context otherwise requires:
"Accretion Amounts" shall mean the sum of all amounts added to
the Liquidation Price pursuant to Section 3.
"Affiliate" has the meaning set forth in Rule 12b-2, as in effect
on the date hereof, under the Exchange Act.
"Associate" has the meaning set forth in Rule 12b-2, as in effect
on the date hereof, under the Exchange Act.
"Board of Directors" shall mean the board of directors of the
Corporation.
"Business Day" shall mean any day that is not a Saturday, Sunday
or a Legal Holiday.
"Change of Control" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition (other than by
way of merger or consolidation), in one or a series of related transactions, of
all or substantially all of the assets of the Corporation and its Subsidiaries,
taken as a whole, to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than the Permitted Holders, or (ii) the consummation of
any transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as such term is used in Section 13(d)(3)
of the Exchange Act), other than the Permitted Holders, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act), directly or indirectly, of more than 50% of the voting power of the
Corporation's capital stock, unless, in the case of this clause (ii), the
Permitted Holders retain the right or ability, by voting power, contract or
otherwise, to elect or designate a majority of the Board of Directors of the
Corporation; provided that, for so long as any Senior Subordinated Notes are
outstanding, a Change of Control shall not be deemed to occur for purposes of
this Certificate of Designation unless the same event or transaction shall also
have caused a "Change of Control" to have occurred for purposes of the Senior
Subordinated Note Indenture, and the Corporation shall be required to make a
"Change of Control Offer" as provided therein.
"Change of Control Notice" shall have the meaning set forth in
Section 5(c).
"Change of Control Price" shall have the meaning set forth in
Section 5(c).
"Class A Common Stock" shall mean the Class A common stock, par
value $.01 per share, of the Corporation.
"Common Stock" shall mean the Company Common Stock and the Class
A Common Stock as the same exist as of the date hereof or as such stock may be
constituted from time to time.
"Company Common Stock" shall mean the common stock, par value
$.01 per share, of the Corporation.
"Definitive Agreements" shall mean the Purchase Agreement, the
Registration Rights Agreement, the Junior Subordinated Note Indenture and the
Junior Subordinated Notes.
"Dividend Rate" shall have the meaning specified in Section 3.
"Equity Equivalents" shall mean Common Stock or rights, warrants,
options or other convertible securities (including the Repriced Preferred Stock
and any other convertible debt or equity) representing the right to acquire
Common Stock, or any securities that have similar common equity features, but
excluding the exercise of options which were granted prior to the initial public
offering of the Corporation or options that were or are set at the market price
at the time such options were or are granted by the Corporation or as determined
by the Board of Directors or a duly authorized committee thereof.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Group" shall have the meaning set forth in Rule 13d-5, as in
effect on the date hereof, under the Exchange Act.
"Holders" shall mean the holders of the Series C-2 Preferred
Stock.
"Issue Date" shall mean the original date of issuance of the
Series C-2 Preferred Stock.
"Junior Preferred" shall have the meaning specified in Section 2.
"Junior Stock" shall have the meaning specified in Section 2.
"Junior Subordinated Note Indenture" means the Indenture dated as
of the Closing Date (as defined in the Purchase Agreement) relating to the
Junior Subordinated Notes, between the Corporation as issuer and Oak Hill
Capital Partners, L.P. as initial trustee.
"Junior Subordinated Notes" means the 11.3025% Junior
Subordinated Convertible Notes due 2007 issued pursuant to the Junior
Subordinated Note Indenture.
"Legal Holiday" shall mean any day on which banking institutions
are obligated or authorized to close in The City of New York.
"Liquidation Price" shall mean for each share of Series C-2
Preferred Stock, as of any date, an amount equal to $1,000 per share, plus (x)
the aggregate Accretion Amounts through such date and (y) all accrued and unpaid
dividends to such date, whether or not declared, to the extent such accrued and
unpaid dividends are not taken into account in determining the Accretion Amounts
under clause (x).
"Majority Holders" shall mean the Holders of a majority of the
then outstanding shares of Series C-2 Preferred Stock.
"Mandatory Redemption" shall have the meaning specified in
Section 5(a).
"Notice" shall have the meaning specified in Section 5(b).
"Parity Securities" shall have the meaning specified in Section
4.
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"Permitted Holders" means (a) Leslie B. Otten (or, in the event
of his incompetence or death, his estate and his estate's heirs, executor,
administrator, committee or other representative (collectively, "Heirs")), (b)
any Person in which Leslie B. Otten and his Heirs, directly or indirectly, have
an 80% controlling interest, and/or (c) Oak Hill Capital Partners, L.P. and Oak
Hill Securities Fund, L.P. and their respective Affiliates and Associates.
"Person" means any individual, firm, corporation, partnership,
limited partnership, limited liability company, association, trust,
unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3), as in effect on the
date hereof, of the Exchange Act.
"Preferred Stock" shall mean the Serial Preferred Stock, par
value $.01 per share, of the Corporation.
"Purchase Agreement" shall mean the Securities Purchase
Agreement, dated as of July 15, 2001, between the Corporation, Oak Hill Capital
Partners, L.P. and the other parties identified therein.
"Redemption Price" shall have the meaning specified in Section
5(b).
"Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated as of the Closing Date (as defined in the Purchase
Agreement), between the Corporation, Oak Hill Capital Partners, L.P. and the
other parties identified therein.
"Repriced Preferred Stock" shall mean the 10.5% Repriced
Convertible Exchangeable Preferred Stock, $.01 par value per share, of the
Corporation.
"Senior Liquidation Stock" shall have the meaning specified in
Section 4.
"Senior Subordinated Note Indenture" means the Indenture dated as
of June 28, 1996, as amended and supplemented by the Supplemental Indenture
dated as of September 4, 1998, the Second Supplemental Indenture dated as of
September 4, 1998, the Third Supplemental Indenture dated as of August 6, 1999,
and the Fourth Supplemental Indenture dated as of October 6, 1999, and as it may
be further amended from time to time, relating to the Senior Subordinated Notes,
among the Corporation, as issuers, several of the Corporation's subsidiaries, as
guarantors, and The United States Trust Company of New York, as trustee.
"Senior Subordinated Notes" means the Corporation's Series A and
Series B Senior Subordinated Notes due 2006 issued pursuant to the Senior
Subordinated Note Indenture.
"Series B Preferred Stock" shall mean the 8.5% Series B
Convertible Participating Preferred Stock, par value $.01 per share, of the
Corporation.
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"Series C-1 Preferred Stock" shall mean the 12% Series C-1
Convertible Participating Preferred Stock, par value $.01 per share, of the
Corporation.
"Series D Preferred Stock" shall mean the Series D Participating
Preferred Stock, par value $.01 per share, of the Corporation.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of such Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner of
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such person or of one or
more Subsidiaries of such Person (or any combination thereof).
Section 2. Rank.
All shares of Series C-2 Preferred Stock, both as to payment of
dividends and to distribution of assets upon optional or mandatory redemption,
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, shall rank (i) senior to all of the Corporation's now or hereafter
issued preferred stock, including, without limitation, the Series D Preferred
Stock, (the "Junior Preferred") except for (A) the Repriced Preferred Stock, as
to which it shall rank junior, and (B) the Series B Preferred Stock and the
Series C-1 Preferred Stock, as to which it shall rank pari passu, and (ii)
senior to all of the Corporation's now or hereafter issued Common Stock or any
other common stock of any class of the Corporation (collectively with the Junior
Preferred, the "Junior Stock").
Section 3. Dividends and Certain Restrictions.
The Holders shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds of the Corporation legally
available therefor, dividends at a rate per share of 15% per annum (as may be
adjusted from time to time as provided in this Section 3) of the Liquidation
Price (the "Dividend Rate"), which shall be fully cumulative, shall accrue, be
compounded and payable quarterly on October 31, January 31, April 30 and July 31
of each year, commencing on October 31, 2001 (except that if such date is a
Saturday, Sunday or Legal Holiday, then dividends to be paid in cash will be
payable on the next Business Day) to Holders of record as they appear on the
stock transfer books of the Corporation on the record date for the payment of
such dividend, which shall be not more than 60 nor less than 30 days preceding
the payment date for such dividend, as is fixed by the Board of Directors.
Dividends may, at the option of the Corporation, be paid (i) in cash at the
Dividend Rate or (ii) by way of an increase in the Liquidation Price in effect
as of the relevant quarterly dividend payment date in an amount calculated based
on the Dividend Rate. Notwithstanding the foregoing, dividends shall be payable
solely in accordance with clause (ii) if cash dividends have not been paid on
the Repriced Preferred Stock on the immediately preceding dividend payment date
with respect to such Repriced Preferred Stock. The Dividend Rate on the Series
C-2 Preferred Stock shall be increased by 2% per annum upon a declaration of a
Default Voting Event (as defined in the Certificate of Designation authorizing
the Series C-1 Preferred Stock) for so long as such Default Voting Event remains
uncured.
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On any quarterly dividend payment date, if all dividends that
have accrued on the Series C-2 Preferred Stock are not paid, then such accrued
dividends shall accumulate and be added to the Liquidation Price of the Series
C-2 Preferred Stock effective as of such dividend payment date and shall
thereafter accrue additional dividends in respect thereof until such unpaid
dividends have been paid in full. Dividends paid on shares of Series C-2
Preferred Stock in an amount less than the total amount of such dividends at the
time accumulated and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
Any reference to "dividend" or "distribution" contained in this
Section 3 shall not be deemed to include any dividend or distribution made in
connection with any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, that is effected in accordance with the
preferences and priorities set forth in the Corporation's certificate of
incorporation and all certificates of designation setting forth the rights of
the holders of the Corporation's Preferred Stock.
Section 4. Liquidation Right.
In the event of a liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, for each share of Series C-2
Preferred Stock the Holders shall be entitled to receive out of the assets of
the Corporation, whether such assets are stated capital or surplus of any
nature, the Liquidation Price, before any payment shall be made or any assets
distributed to the holders of Common Stock or any other class or series of the
Corporation's capital stock ranking junior as to liquidation rights to the
Series C-2 Preferred Stock; provided, however, that such rights shall accrue to
the Holders only in the event that the Corporation's payments with respect to
the liquidation preferences of the holders of capital stock of the Corporation
ranking senior as to liquidation rights to the Series C-2 Preferred Stock (the
"Senior Liquidation Stock") are fully met. No further distribution of residual
property will be made to the holders of Series C-2 Preferred Stock. If the
assets of the Corporation available for distribution after the payment of the
liquidation preferences of the holders of all Senior Liquidation Stock are not
sufficient to pay an amount equal to the Liquidation Price to the holders of
outstanding shares of Series C-2 Preferred Stock and the liquidation preferences
payable to the holders of shares of capital stock of the Corporation ranking
(based on relative liquidation preference) pari passu with the Series C-2
Preferred Stock, including, without limitation, the Series C-1 Preferred Stock
("Parity Securities"), then the assets of the Corporation shall be distributed
ratably among the Holders and the holders of Parity Securities. Neither a
consolidation, merger or other business combination of the Corporation with or
into another corporation or other entity nor a sale or offer of all or part of
the Corporation's assets for cash, securities or other property shall be
considered a liquidation, dissolution or winding up of the Corporation for
purposes of this Section 4 (unless in connection therewith the liquidation of
the Corporation is specifically approved).
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Section 5. Redemption.
(a) Mandatory Redemption. The Corporation shall mandatorily
redeem all of the outstanding shares of Series C-2 Preferred Stock for cash on
July 31, 2007 (the "Mandatory Redemption"), at a redemption price equal to the
Liquidation Price per share.
No Mandatory Redemption pursuant to this Section 5(a) shall be
made unless and until all outstanding Repriced Preferred Stock has been
converted, repurchased, redeemed or otherwise retired or the holders of the
Repriced Preferred Stock have consented thereto in accordance with the
requirements of the Corporation's certificate of incorporation. If a Mandatory
Redemption cannot occur by reason of this paragraph, the Corporation shall
redeem all of the outstanding shares of Series C-2 Preferred Stock as provided
herein on the first Business Day after all outstanding Repriced Preferred Stock
has been so converted, repurchased, redeemed or otherwise retired or after the
holders of the Repriced Preferred Stock shall have consented to such redemption.
If, upon any Mandatory Redemption, funds are not legally
available to the Corporation for redemption of all the shares of Series C-2
Preferred Stock, the Corporation shall redeem on such date, at the applicable
redemption price, pro rata among the Holders based on the Liquidation Price of
their shares, that number of shares of Series C-2 Preferred Stock which it can
lawfully redeem, and from time to time thereafter, as soon as funds are legally
available, the Corporation shall redeem at the applicable redemption price
shares of Series C-2 Preferred Stock pro rata among the Holders until the
Corporation has redeemed the shares of Series C-2 Preferred Stock in full.
In the event that the Corporation is in arrears in the redemption
of its Series C-2 Preferred Stock pursuant to a Mandatory Redemption (including,
without limitation, by reason of the fact that sufficient funds are not legally
available to pay the redemption price), or a mandatory redemption cannot occur
by reason of the fact that the Repriced Preferred Stock remains outstanding, the
Corporation may not (i) purchase, redeem or pay dividends on any Junior Stock or
(ii) make any mandatory purchase or redemption of any Series C-2 Preferred Stock
or Parity Securities except pro rata according to all such obligations then due
or in arrears.
Any shares of Series C-2 Preferred Stock that are not redeemed on
the scheduled redemption date shall continue to be outstanding and accrue
dividends until redeemed.
(b) Optional Redemption. From and after the Issue Date, the
Corporation shall have the right, at its option, at any time and from time to
time, upon not less than 60 days' prior written notice ("Notice"), to redeem,
out of funds legally available therefor, all or a portion of the shares of
Series C-2 Preferred Stock during the 12-month period beginning on July 31 of
the years indicated below (other than 2001, which shall be the period commencing
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on the Issue Date and ending on July 30, 2002) at the redemption prices in cash
(expressed as a percentage of the Liquidation Price) set forth below set forth
below (the "Redemption Price"):
Year Redemption Price
2001 118.5%
2002 115.5%
2003 112.5%
2004 109.5%
2005 106.5%
2006 and thereafter 100%
Any redemption made pursuant to this Section 5(b) shall be
initiated only upon (i) the approval of a majority of the Board of Directors,
provided that such approval includes the approval of a majority of the directors
of the Corporation who are not designated or appointed by the Purchasers (as
defined in the Purchase Agreement) or their Affiliates (so long as the
Purchasers or their Affiliates are Holders) or by any other Person which is a
Holder and has the ability to designate or appoint a majority of the Board of
Directors or (ii) the approval of a special committee of the Independent
Directors (as such term is defined in the Stockholders' Agreement).
No Notice shall be given, and no redemption shall be made,
pursuant to this Section 5(b) unless the Corporation shall, on the date fixed
for redemption, simultaneously redeem a pro rata portion (based on the aggregate
liquidation preference of Series C-1 Preferred Stock and Series C-2 Preferred
Stock then outstanding) of the Series C-1 Preferred Stock.
In case of the redemption of less than all of the then
outstanding Series C-1 Preferred Stock and Series C-2 Preferred Stock, the
Corporation shall (subject to the preceding paragraph) select the shares of
Series C-2 Preferred Stock to be redeemed in accordance with any method
permitted by the national securities exchange on which the shares to be redeemed
are then listed, or if not so listed, the Corporation shall designate by lot, or
in such other manner as the Board of Directors may determine, the shares to be
redeemed, or shall effect such redemption pro rata among the Holders and the
holders of shares of Series C-1 Preferred Stock.
The Notice shall be given by first class mail, postage prepaid,
to each Holder of record of the Series C-2 Preferred Stock to be redeemed, at
such Holder's address as it shall appear upon the stock transfer books of the
Corporation. Each such notice of redemption shall specify the date fixed for
redemption, the Redemption Price, the place or places of payment and that
payment will be made upon presentation of and surrender of the certificates
evidencing the shares of Series C-2 Preferred Stock to be redeemed.
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Any Notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder of the
Series C-2 Preferred Stock receives such Notice; and failure to give such notice
by mail, or any defect in such Notice, to a Holder of any shares designated for
redemption shall not affect the validity of the proceedings for the redemption
of any shares of Series C-2 Preferred Stock owned by other Holders to whom such
Notice was duly given. On or after the date fixed for redemption as stated in
such Notice, each Holder of the shares called for redemption shall surrender the
certificate evidencing such shares to the Corporation at the place designated in
such Notice and shall thereupon be entitled to receive payment of the Redemption
Price. If less than all the shares represented by any such surrendered
certificate are redeemed, a new certificate shall be issued without cost to the
Holder thereof representing the unredeemed shares. If such Notice shall have
been so mailed and if, on or prior to the redemption date specified in such
Notice, all funds necessary for such redemption shall have been set aside by the
Corporation, separate and apart from its other funds, in trust for the account
of the holders of the shares so to be redeemed (as to be and continue to be
available therefor), then on and after the redemption date, notwithstanding that
any certificate for shares of the Series C-2 Preferred Stock so called for
redemption shall not have been surrendered for cancellation, all shares of the
Series C-2 Preferred Stock with respect to which such Notice shall have been
mailed and such funds shall have been set aside shall be deemed to be no longer
outstanding and all rights with respect to such shares of the Series C-2
Preferred Stock so called for redemption shall forthwith cease and terminate,
except the right of the Holders to receive out of the funds so set aside in
trust the amount payable on the redemption thereof (including an amount equal to
accrued and unpaid dividends to the date of redemption) without interest
thereon.
The Holder of any shares of Series C-2 Preferred Stock redeemed
upon any exercise of the Corporation's redemption right under this Section 5(b)
shall not be entitled to receive payment of the Redemption Price for such shares
until such Holder shall cause to be delivered to the place specified in the
Notice (i) the certificate(s) representing such shares of Series C-2 Preferred
Stock redeemed and (ii) transfer instrument(s) satisfactory to the Corporation
and sufficient to transfer such shares of Series C-2 Preferred Stock to the
Corporation free of any adverse interests; provided that the foregoing is
subject to the other provisions of the Corporation's certificate of
incorporation or the Corporation's bylaws governing lost certificates generally.
(c) Change Of Control. Upon the occurrence of a Change of
Control, each Holder may require the Corporation to purchase such requesting
Holder's Series C-2 Preferred Stock at a purchase price in cash (expressed as a
percentage of the Liquidation Price) set forth below (such prices to be
applicable in respect of a purchase relating to a Change of Control occurring
during the 12-month period beginning on July 31 of the years indicated below,
other than 2001, which shall be the period commencing on the Issue Date and
ending on July 30, 2002) (the "Change of Control Price"):
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Change of
Year Control Price
---- -------------
2001 106.5%
2002 106.5%
2003 106.5%
2004 102.6%
2005 101.3%
2006 and thereafter 100%
Notwithstanding the foregoing, the Change of Control Price shall
not exceed 100% of the Liquidation Price unless (i) a majority of the Board of
Directors, provided that such majority includes a majority of the directors of
the Corporation who are not designated or appointed by the Purchasers (as
defined in the Purchase Agreement) or their Affiliates or by any other Person
which has the ability to designate or appoint a majority of the Board of
Directors or (ii) a majority of a special committee of the Independent Directors
(as such term is defined in the Stockholders' Agreement) shall have approved the
transaction(s) constituting the Change of Control; provided, that if such
approval has been withheld solely or primarily to reduce the Change of Control
Price, the Holders shall be entitled to receive the applicable Change of Control
Price set forth in the table in the preceding paragraph.
Within 45 days following any Change of Control, the Corporation
shall give to each Holder a written notice (a "Change of Control Notice")
stating:
(i) that a Change of Control has occurred and that such
Holder has the right to require the Corporation to purchase such Holder's Series
C-2 Preferred Stock at the Change of Control Price as set forth above;
(ii) the circumstances and relevant facts regarding such
Change of Control;
(iii) the purchase date, which date shall be no earlier
than 45 days nor later than 60 days from the date such notice is mailed; and
(iv) the instructions a Holder must follow in order to
have its Series C-2 Preferred Stock purchased pursuant to this Section 5(c).
Change of Control Notices shall otherwise be governed by the
provisions set forth above in paragraph (b) relating to Notices.
Holders electing to have Series C-2 Preferred Stock purchased
under this Section 5(c) will be required to surrender such Series C-2 Preferred
Stock to the Corporation at the address specified in the Change of Control
Notice at least five Business Days prior to the specified purchase date. Any
Holder will be entitled to withdraw its election if the Corporation receives,
not later than three Business Days prior to the purchase date, a telegram,
telex, facsimile transmission or letter setting forth the name of such Holder,
the amount of the Series C-2 Preferred Stock delivered for purchase by such
Holder as to which its election is to be withdrawn and a statement that such
Holder is withdrawing its election to have such Series C-2 Preferred Stock
purchased.
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On the purchase date specified in the Change of Control Notice,
the Corporation shall purchase all the electing Holders' Series C-2 Preferred
Stock at the Change of Control Price and otherwise on the terms and subject to
the conditions set forth herein.
No Change of Control Notice shall be issued pursuant to this
Section 5(c) unless and until all outstanding Repriced Preferred Stock has been,
or shall have been as part of the Change of Control, converted, repurchased,
redeemed or otherwise retired, or the holders of the Repriced Preferred Stock
have consented thereto in accordance with the requirements of the Corporation's
certificate of incorporation. If a mandatory redemption cannot occur by reason
of this paragraph, the Corporation shall deliver the Change of Control Notice on
the first Business Day after all outstanding Repriced Preferred Stock has been
so converted, repurchased, redeemed or otherwise retired or such consent shall
have been granted.
If any Senior Subordinated Notes are outstanding or were
outstanding within 91 days prior to the schedule date of purchase under this
Section 5(c), (i) notwithstanding any other provision of this Section 5(c), the
purchase date of any Series C-2 Preferred Stock shall not occur prior to the
purchase date for the Senior Subordinated Notes, and (ii) no purchase or
payments shall be made under this Section 5(c) so long as such purchase or
payments are prohibited by the terms of the Senior Subordinated Note Indenture.
Any purchase or payment not made by reason of this paragraph shall be deferred
until the first date on which such purchase or payment shall be permitted to be
made under the terms of the Senior Subordinated Note Indenture. If the
Corporation is only permitted to purchase a portion of the Series C-2 Preferred
Stock or to pay part of the Change of Control Price (including, without
limitation, paying only the Liquidation Price and a portion of the premium), it
shall immediately pay such portion to the Holders pro rata in accordance with
the Liquidation Price of their shares.
If, upon any Change of Control, funds are not legally available
to the Corporation for purchase of the shares of Series C-2 Preferred Stock that
the Holders have requested to be purchased, the Corporation shall purchase on
the scheduled purchase date, at the Change of Control Price, pro rata among the
Holders based on the Liquidation Price of their shares, that number of shares of
Series C-2 Preferred Stock which it can lawfully purchase, and from time to time
thereafter, as soon as funds are legally available, the Corporation shall
purchase at the Change of Control Price shares of Series C-2 Preferred Stock pro
rata among the electing Holders until the Corporation has purchased all the
shares of Series C-2 Preferred Stock that the Holders have requested be
purchased.
If the Corporation defaults or is in arrears in its obligations
under this Section 5(c), (including, without limitation, by reason of the fact
that sufficient funds are not legally available to pay the Change of Control
Price), or if the Corporation does not deliver a Change of Control Notice by
reason of the fact that the Repriced Preferred Stock remains outstanding, or if
the Corporation is not permitted to purchase all of the Series C-2 Preferred
Stock or to pay all or any portion of the Change of Control Price for any
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reason, the Corporation may not (i) purchase, acquire, redeem or pay dividends
on any Junior Stock or (ii) purchase, redeem or otherwise acquire any Series C-2
Preferred Stock Parity Securities except pro rata according to all such
obligations then due or in arrears (including the pro rata purchase of any
Series C-1 Preferred Stock required in connection with a Change of Control.)
Notwithstanding anything in this Section 5(c) to the contrary,
the Corporation will not be required to pay the Change of Control Price upon a
Change of Control if a third party pays the Change of Control Price in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 5(c) applicable to a Change of Control Price paid by the
Corporation.
Any shares of Series C-2 Preferred Stock that are not purchased
on the scheduled purchase date shall continue to be outstanding and shall accrue
dividends at the Dividend Rate, compounding quarterly as provided in Section 3
until purchased. If any shares of Series C-2 Preferred Stock are purchased on
the scheduled purchase date but the Change of Control Price is not paid in full,
then the unpaid portion of the Change of Control Price shall accrue dividends at
the Dividend Rate (calculated as if the affected shares of Series C-2 Preferred
Stock were still outstanding), compounding quarterly as provided in Section 3,
until paid in full.
(d) Conflict. If there is any conflict between the provisions of
this Section 5 and any applicable federal securities laws or regulations, the
provisions of such federal securities laws and regulations shall apply.
Section 6. Voting Rights.
(a) General. The Series C-2 Preferred Stock shall not have the
right to vote except as provided in Section 6(b) below and for voting rights
required under or granted by Delaware law. In connection with any right of the
Holders of the Series C-2 Preferred Stock to vote separately as a class pursuant
to Section 6(b) or under Delaware law, each Holder will have one vote for each
share of Series C-2 Preferred Stock held by it. Any shares of Series C-2
Preferred Stock held by the Corporation or any entity controlled by the
Corporation shall not have voting rights hereunder and shall not be counted in
determining the presence of a quorum.
(b) Class Voting Right
(i) Actions Requiring Affirmative Vote. So long as shares
of Series C-2 Preferred Stock are outstanding, the Corporation shall not,
directly or indirectly, or through merger or consolidation with any other
person, without the affirmative vote or consent of the Majority Holders, with
the Holders voting separately as a class, (a) amend, alter or repeal (by merger,
consolidation or otherwise) any provision of the Corporation's certificate of
incorporation or the Corporation's by-laws, as amended, so as to affect
adversely the relative rights, preferences, powers and privileges of the Series
C-2 Preferred Stock, (b) except for the Series C-1 Preferred Stock, authorize or
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issue any new class of shares or Equity Equivalents having a preference with
respect to dividends, redemption and/or liquidation over, or on parity with, the
Series C-2 Preferred Stock, (c) reclassify any of its capital stock into shares
having a preference with respect to dividends, redemption and/or liquidation
over, or on parity with, the Series C-2 Preferred Stock or (iv) issue any
additional shares of Series C-2 Preferred Stock.
(ii) Special Meeting. Whenever the rights described above
shall vest pursuant to this Section 6(b) or Delaware law, they may be exercised
by the vote of the Majority Holders present and voting, in person or by proxy,
at a special meeting of Holders or at the next annual meeting of stockholders,
or by written consent of the Majority Holders without a meeting. Unless such
action shall have been taken by written consent as aforesaid, a special meeting
of the Holders for the exercise of any such right shall be called by the
Secretary of the Corporation as promptly as possible in compliance with
applicable law and regulations, and in any event within 10 days after receipt of
a written request signed by the Holders of record of at least 25% of the then
outstanding shares of the Series C-2 Preferred Stock, subject to any applicable
notice requirements imposed by law or by any national securities exchange on
which any Series C-2 Preferred Stock is listed. Such meeting shall be held at
the earliest practicable date thereafter.
(c) Stockholders' Right To Call Meeting. If any meeting of the
Holders required by this paragraph (b) to be called shall not have been called
within 10 days after personal service of a written request therefor upon the
Secretary of the Corporation or within 15 days after mailing the same within the
United States of America by registered mail addressed to the Secretary of the
Corporation at its principal office, subject to any applicable notice
requirements imposed by law or any national securities exchange on which any
Series C-2 Preferred Stock is then listed, then the Holders of record of at
least 25% of the then outstanding shares of the Series C-2 Preferred Stock may
designate in writing a Holder of the Series C-2 Preferred Stock to call such
meeting at the reasonable expense of the Corporation, and such meeting may be
called by such Person so designated upon the notice required for annual meetings
of stockholders or such shorter notice (but in no event shorter than permitted
by law or any national securities exchange on which the Series C-2 Preferred
Stock is then listed) as may be acceptable to the Majority Holders. Any Holder
of Series C-2 Preferred Stock so designated shall have reasonable access to the
stock books of the Corporation relating solely to the Series C-2 Preferred Stock
for the purpose of causing such meeting to be called pursuant to these
provisions.
(d) Quorum. At any meeting of the Holders called in accordance
with the provisions of this paragraph (b), the presence in person or by proxy of
the Majority Holders with the Holders of Series C-2 Preferred Stock voting as a
single class shall be required to constitute a quorum; in the absence of a
quorum, a majority of the Holders present in person or by proxy shall have power
to adjourn the meeting from time to time without notice, other than announcement
at the meeting, until a quorum shall be present.
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Section 7. Outstanding Shares.
For purposes of this Certificate of Designation, all shares of
Series C-2 Preferred Stock shall be deemed outstanding except (i) from the date
fixed for redemption pursuant to Section 5(b), all shares of Series C-2
Preferred Stock that have been so called for redemption under Section 5(b) if
funds necessary for payment of the Redemption Price have been irrevocably
deposited in trust, for the account of the Holders of the shares so to be
redeemed (so as to be and continue to be available therefor), with a corporation
organized and doing business under the laws of the United States or any State or
territory thereof or of the District of Columbia (or a corporation or other
person permitted to act as a trustee by the Securities and Exchange Commission),
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $100,000,000 and subject to supervision or
examination by Federal, State or District of Columbia or territorial authority;
and (ii) from the date of registration of transfer, all shares of Series C-2
Preferred Stock held of record by the Corporation or any subsidiary of the
Corporation.
Section 8. Status of Acquired Shares.
The Corporation shall take all such actions as are necessary to
cause any shares of Series C-2 Preferred Stock redeemed by the Corporation or
otherwise acquired by the Corporation, to be restored to the status of
authorized and unissued shares of Preferred Stock, without designation as to
series, and such shares may thereafter be issued, but not as shares of Series
C-2 Preferred Stock unless the other provisions of this Certificate of
Designation have been complied with.
Section 9. Reports.
So long as the Series C-2 Preferred Stock remains outstanding,
the Corporation shall cause its annual reports to stockholders and any quarterly
or other financial reports and information furnished by it to stockholders
pursuant to the requirements of the Exchange Act, to be mailed to the holders of
the Series C-2 Preferred Stock (contemporaneously with the mailing of such
materials to the Corporation's stockholders) at their addresses appearing on the
books of the Corporation. If the Corporation is not required to furnish annual
or quarterly reports to its stockholders pursuant to the Exchange Act, it shall
cause its financial statements, including any notes thereto (and with respect to
annual reports, an auditors' report by a nationally recognized firm of
independent certified public accounts), a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and such other information
which the Corporation would otherwise by required to include in annual and
quarterly reports filed under the Exchange Act, to be mailed to the holders of
the Series C-2 Preferred Stock, within 120 days after the end of each of the
Corporation's fiscal years and within 60 days after the end of each of its first
three fiscal quarters.
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Section 10. Severability of Provisions.
Whenever possible, each provision hereof shall be interpreted in
a manner as to be effective and valid under applicable law, but if any provision
hereof is held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating or otherwise adversely affecting the remaining
provisions hereof. If a court of competent jurisdiction should determine that a
provision hereof would be valid or enforceable if a period of time were extended
or shortened or a particular percentage were increased or decreased, then such
court may make such change as shall be necessary to render the provision in
question effective and valid under applicable law.
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IN WITNESS WHEREOF, American Skiing Company has caused this Certificate
to be signed by William J. Fair, its President and Chief Executive Officer, this
____ day of July, 2001.
AMERICAN SKIING COMPANY
By: ______________________________
Name: William J. Fair
Title: President and Chief
Executive Officer
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