Exhibit 4(r)
PREMIER PARKS INC.
CERTIFICATE OF THE POWERS, DESIGNATIONS,
PREFERENCES AND RIGHTS OF THE
___% CONVERTIBLE REDEEMABLE PREFERRED STOCK,
PAR VALUE $1.00 PER SHARE
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The following resolution was duly adopted by the Board of Directors of
Premier Parks Inc., a Delaware corporation (the "Corporation"), pursuant to the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, on ____________, 1998, by the unanimous written consent of the Board
of Directors:
RESOLVED that, pursuant to the authority expressly granted to the
Board of Directors of the Corporation by the Certificate of Incorporation of the
Corporation, and pursuant to Section 151(g) of the General Corporation Law of
the State of Delaware, there be created from the 500,000 shares of Preferred
Stock, par value $1.00 per share (the "Preferred Stock"), of the Corporation
authorized to be issued pursuant to the Certificate of Incorporation, a series
of Preferred Stock consisting of _______ shares of ___% Convertible Redeemable
Preferred Stock (the "Redeemable Preferred Stock"), the voting powers,
designations, preferences and relative, participating, optional or other special
rights of which, and qualifications, limitations or restrictions thereof, shall
be as follows:
1. DEFINITIONS. As used herein, the following terms shall have the
following meanings:
1.1 "Accrued Dividends" shall mean, with respect to any share
of Redeemable Preferred Stock, as of any date, the accrued and unpaid dividends
on such share from and including the most recent Dividend Payment Date (or the
Issue Date, if such date is prior to the first Dividend Payment Date) to but not
including such date.
1.2 "Accumulated Dividends" shall mean, with respect to any
share of Redeemable Preferred Stock, as of any date, the aggregate accumulated
and unpaid dividend on such share from the Issue Date until the most recent
Dividend Payment Date prior to such date. There shall be no Accumulated
Dividends with respect to any share of Redeemable Preferred Stock prior to the
first Dividend Payment Date.
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1.3 "Affiliate" shall mean, with respect to any Person, any
other Person that, directly or indirectly, controls, is controlled by, or is
under common control with, such first Person. For the purpose of this
definition, "control" shall mean, as to any Person, the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
1.4 "Board of Directors" shall mean the Board of Directors of
the Corporation or, with respect to any action to be taken by the Board of
Directors, any committee of the Board of Directors duly authorized to take such
action.
1.5 "Business Day" shall mean any day other than a Saturday,
Sunday or other day on which commercial banks in the City of New York are
authorized or required by law or executive order to close.
1.6 "Certificate of Incorporation" shall mean the Certificate
of Incorporation of the Corporation, as amended from time to time.
1.7 "Closing Price" of the Common Stock, as of any day, shall
mean (a) the last reported sale price of such stock (regular way), or, in case
no such sale takes place on such day, the average of the closing bid and asked
prices, in either case as reported on the principal national securities exchange
on which such stock is listed or admitted to trading or (b) if the Common Stock
is not listed or admitted to trading on any national securities exchange, the
last reported sale price, or in case no such sale takes place on such day, the
average of the highest reported bid and the lowest reported asked quotation for
the Common Stock, in either case reported on NASDAQ, or a similar service if
NASDAQ is no longer reporting such information.
1.8 "Common Stock" shall mean the class of Common Stock, par
value $.05 per share, of the Corporation or any other class of stock resulting
from successive changes or reclassifications of such Common Stock consisting
solely of changes in par value, or from par value to no par value, or as a
result of a subdivision or combination.
1.9 "Common Stock Conversion Rate" shall mean, as of any date,
a rate for each share of Redeemable Preferred Stock equal to (i) the Liquidation
Value thereof plus all Accumulated Dividends and Accrued Dividends thereon to
the date of conversion, divided by (ii) the Conversion Price in effect as of
such date.
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1.10 "Conversion Price" shall equal $___ per share of
Redeemable Preferred Stock.(1)
1.11 "Current Market Price" shall mean, with respect to each
share of Common Stock as of any date, the weighted average of the daily Closing
Prices per share of Common Stock on the principal national securities exchange
on which such stock is then listed or admitted to trading for the 5 consecutive
Trading Days prior to such date; provided that if on any such date the shares of
Common Stock are not listed or admitted for trading on any national securities
exchange or quoted by NASDAQ or a similar service, the Current Market Price for
a share of Common Stock shall be the fair market value of such share as
determined by three Independent Financial Experts, one selected by the
Corporation (which selection shall be communicated in writing to the holders of
the Redeemable Preferred Stock), one selected by the holders of two-thirds of
the shares of Redeemable Preferred Stock (which selection shall be communicated
in writing to the Corporation) and one selected by the two Independent Financial
Experts so chosen. The determination of fair market value by such Independent
Financial Expert shall be final, binding and conclusive on the Corporation and
all holders of the Redeemable Preferred Stock. All costs and fees of any of the
Independent Financial Experts retained in accordance with the foregoing shall be
borne by the Corporation.
1.12 "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
1.13 "Excluded Securities" means shares of Common Stock issued
upon conversion of the shares of Redeemable Preferred Stock [or upon conversion
of the shares of Mandatorily Redeemable Preferred Stock].
1.14 "Independent Financial Expert" means an independent
nationally recognized investment banking firm.
1.15 "Issue Date" shall mean the Closing Date (as defined in
the Merger Agreement).
1.16 "Junior Stock" shall mean the Common Stock and the shares
of any other class or series of stock of the Corporation which, by the terms of
the Certificate of Incorporation or of the instrument by which the Board of
Directors, acting pursuant to authority granted in the Certificate of
Incorporation, shall fix the
- --------------------
(1) This number, pursuant to the Holdco Preferred Stock term sheet, will equal
___ % of the weighted average of the Closing Price of the Common Stock for
the 20 consecutive trading days ending on the third trading day prior to
the Issue Date.
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relative rights, preferences and limitations thereof, shall be junior to the
Redeemable Preferred Stock in respect of the right to receive dividends and to
participate in any distribution of assets other than by way of dividends.
1.17 "Liquidation Value" shall have the meaning assigned to
such term in Section 8.1 hereof.
1.18 "Mandatorily Redeemable Preferred Stock" means the ___%
Mandatorily Redeemable Preferred Stock, par value $1.00 per share, of the
Company issued on the date hereof.
1.19 "Mandatory Redemption Price" of a share of Redeemable
Preferred Stock means the Liquidation Value thereof plus an amount equal to all
Accumulated Dividends and Accrued Dividends thereon to the date of redemption.
1.20 "Merger Agreement" shall mean the Agreement and Plan of
Merger, dated as of February 9, 1998 (as the same may be amended from time to
time, the "Merger Agreement") by and among Premier Parks Inc., Premier Parks
Holdings Corporation, PPStar I, Inc., Holders of the Capital Stock of Six Flags
Entertainment Corporation ("SFEC") and SFEC.
1.21 "NASDAQ" shall mean the National Association of Securities
Dealers, Inc. Automated Quotation System.
1.22 "Optional Redemption Price" of a share of Redeemable
Preferred Stock means, (i) with respect to Section 3.1 hereof, the greater of
(x) the Liquidation Value thereof and (y) the Current Market Price thereof, in
each case plus all Accrued Dividends and Accumulated Dividends thereon to the
date of redemption or (ii) with respect to Section 3.2 hereof, sum of (x) the
Liquidation Value thereof, (y) all Accrued Dividends and Accumulated Dividends
thereon to the date of redemption and (z) an amount equal to the percentage of
the Dividend Rate set forth opposite the 12-month periods commencing on the
anniversary of the Issue Date of the years set forth below in which such
conversion occurs:
Period Percentage of Dividend Rate
------ ---------------------------
2001 70%
2002 62.22%
2003 54.44%
2004 46.66%
2005 38.88%
2006 31.10%
2007 23.32%
2008 15.54%
2009 7.78%
2010 0%
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1.23 "Parity Stock" shall mean the Mandatorily Redeemable
Preferred Stock and shares of any other class or series of stock of the
Corporation which, by the terms of the Certificate of Incorporation or of the
instrument by which the Board of Directors, acting pursuant to authority granted
in the Certificate of Incorporation, shall fix the relative rights, preferences
and limitations thereof, shall, in the event that the stated dividends thereon
are not paid in full, be entitled to share ratably with the Redeemable Preferred
Stock in the payment of dividends, including accumulations, if any, in
accordance with the sums which would be payable on such shares if all dividends
were declared and paid in full, and shall, in the event that the amounts payable
thereon on liquidation are not paid in full, be entitled to share ratably with
the Redeemable Preferred Stock in any distribution of assets other than by way
of dividends in accordance with the sums which would be payable in such
distribution if all sums payable were discharged in full; PROVIDED, HOWEVER,
that the term "Parity Stock" shall be deemed to refer (i) in Section 2.2 hereof,
to any stock which is Parity Stock in respect of the right to receive dividends
and (ii) in Section 8 hereof, to any stock which is Parity Stock in respect of
any distribution of assets other than by way of dividends.
1.24 "Person" shall mean any individual, corporation,
partnership, joint venture, association, joint-stock company, trust, limited
liability company, unincorporated organization, estate, other entity or
government or any agency or political subdivision thereof.
1.25 "Pro Rata Repurchase" shall mean any purchase of shares of
Common Stock by the Corporation or by any of its subsidiaries whether for cash,
shares of capital stock of the Corporation, other securities of the Corporation,
evidences of indebtedness of the Corporation or any other Person or any other
property (including, without limitation, shares of capital stock, other
securities or evidences of indebtedness of a subsidiary of the Corporation), or
any combination thereof, effected while any of the shares of Redeemable
Preferred Stock are outstanding, which purchase is subject to Section 13(e) of
the Exchange Act or is made pursuant to an offer made available to all holders
of Common Stock.
1.26 "Redemption Price" means the Optional Redemption Price if
such price is determined pursuant to Section 3 hereof, or the Mandatory
Redemption Price if such price is determined pursuant to Section 4 hereof.
1.27 "Senior Stock" shall mean the shares of any class or
series of stock of the Corporation which, by the terms of the Certificate of
Incorporation or of the instrument by which the Board of Directors, acting
pursuant to authority granted in the Certificate of Incorporation, shall fix the
relative rights, preferences and limitations thereof, shall be senior to the
Redeemable Preferred Stock in respect of the right to receive dividends or to
participate in any distribution of assets other than by way of dividends;
PROVIDED, HOWEVER, that after the date hereof,
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the Corporation may not issue any Senior Stock while any shares of the
Redeemable Preferred Stock are outstanding.
1.28 "Trading Day" shall mean, so long as the Common Stock is
listed or admitted to trading on a national securities exchange, a day on which
the principal national securities exchange on which the Common Stock is listed
is open for the transaction of business, or, if the Common Stock is not so
listed or admitted for trading on any national securities exchange, a day on
which NASDAQ is open for the transaction of business.
2. DIVIDENDS.
2.1 The holders of shares of the outstanding shares of
Redeemable Preferred Stock shall be entitled, when, as and if declared by the
Board of Directors out of funds legally available therefor, to receive dividends
on each outstanding share of Preferred Stock, payable quarterly, in arrears, at
an annual rate of ___% (the "DIVIDEND RATE"). Dividends payable for each full
dividend period will be computed by dividing (x) the product of the Liquidation
Value times the Dividend Rate by (y) four and shall be payable on the last
Business Day of March, June, September and December in each year (the "Dividend
Payment Date"), commencing on June 30, 1998, to the holders of record of
Redeemable Preferred Stock at the close of business on the preceding Business
Day, or such other dates as are fixed by the Board of Directors within ten (10)
days prior to the Dividend Payment Date (each a "Record Date"). Such dividends
shall be cumulative from the Issue Date and shall accrue on a day-to-day basis,
whether or not earned or declared, from and after the Issue Date and shall be
payable in cash. Dividends on Redeemable Preferred Stock which are not declared
and paid when due will compound quarterly on each Dividend Payment Date at the
Dividend Rate. Dividends payable for any partial dividend period shall be
computed on the basis of actual days elapsed over a 360-day year consisting of
twelve 30-day months.
2.2 Except as hereinafter provided in this Section 2.2, unless
all dividends on the outstanding shares of Redeemable Preferred Stock and any
Parity Stock that shall have accrued and become payable as of any date shall
have been paid, or declared and funds shall have been set apart for payment
thereof, no dividend or other distribution (payable other than in shares of
Junior Stock) shall be paid to the holders of Junior Stock or Parity Stock, and
no shares of Redeemable Preferred Stock, Parity Stock or Junior Stock shall be
purchased or redeemed by the Corporation or any of its subsidiaries (except by
conversion into or exchange for, or out of the net cash proceeds from the
concurrent sale of, Junior Stock), nor shall any monies be paid or made
available for a sinking fund for the purchase or redemption of any Redeemable
Preferred Stock, Junior Stock or Parity Stock; PROVIDED, HOWEVER, that nothing
herein shall prevent the Corporation from completing the purchase of Redeemable
Preferred Stock, Parity Stock or Junior Stock for which a purchase contract was
entered into, or the notice of redemption of which was originally
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published, prior to the date on which any such dividends were first required to
be paid. When dividends are not paid in full upon the shares of Redeemable
Preferred Stock and any Parity Stock, all dividends declared upon shares of
Redeemable Preferred Stock and all Parity Stock shall be declared pro rata so
that the amount of dividends declared per share on Redeemable Preferred Stock
and all such Parity Stock shall in all cases bear to each other the same ratio
that accrued dividends per share on the shares of Redeemable Preferred Stock and
all such Parity Stock bear to each other. Holders of shares of Redeemable
Preferred Stock shall not be entitled to any dividends, whether payable in cash,
property or stock, in excess of full cumulative dividends, as herein provided,
on Redeemable Preferred Stock. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on
Redeemable Preferred Stock which may be in arrears.
2.3 The holders of shares of Redeemable Preferred Stock at the
close of business on a Record Date will be entitled to receive the dividend
payment on those shares (except that holders of shares called for redemption on
a redemption date between such Record Date and the Dividend Payment Date will be
entitled to receive such dividend on such redemption date as indicated in
Section 2.1 hereof) on the corresponding Dividend Payment Date notwithstanding
the subsequent conversion thereof or the Company's default in payment of the
dividend due on that Dividend Payment Date. However, shares of Redeemable
Preferred Stock surrendered for conversion during the period between the close
of business on any Record Date and the close of business on the day immediately
preceding the applicable Dividend Payment Date (except for shares called for
redemption on a redemption date during that period) must be accompanied by
payment of an amount equal to the dividend payable on the shares on that
Dividend Payment Date. A holder of shares of Redeemable Preferred Stock on a
Record Date who (or whose transferee) tenders any shares for conversion on a
Dividend Payment Date will receive the dividend payable by the Company on the
Redeemable Preferred Stock on that date, and the converting holder need not
include payment in the amount of such dividend upon surrender of shares of
Redeemable Preferred Stock for conversion. Except as provided above, the
Company shall make no payment or allowance for unpaid dividends, whether or not
in arrears, on converted shares or for dividends on the shares of Common Stock
issued upon conversion.
3. OPTIONAL REDEMPTION.
3.1 The Corporation may, at its sole option, subject to the
provisions of Section 2.2, redeem at any time during the 90-day period following
the Issue Date, out of funds legally available therefor, all of the outstanding
shares of Redeemable Preferred Stock at a redemption price for each share of
Redeemable Preferred Stock called for redemption pursuant to this Section 3.1
equal to the Optional Redemption Price. With respect to each share of
Redeemable Preferred Stock properly tendered for redemption pursuant to this
Section 3.1, if the
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Corporation fails to pay the Optional Redemption Price on the date fixed for
redemption, the Corporation shall also pay an amount equal to interest on the
amount determined in the above sentence at 12% per annum, compounded on a
quarterly basis, from the date fixed for redemption to the date the Redemption
Price is actually paid (such interest shall be in addition to, and not in lieu
of, any other remedies available to the holders of shares of Redeemable
Preferred for failure by the Corporation to pay the Optional Redemption Price as
provided herein).
3.2 The Corporation may, at its sole option, subject to the
provisions of Section 2.2, redeem at any time following the third anniversary of
the Issue Date, out of funds legally available therefor, all or less than all of
the outstanding shares of Redeemable Preferred Stock at a redemption price for
each share of Redeemable Preferred Stock called for redemption pursuant to this
Section 3.2 equal to the Optional Redemption Price. With respect to each share
of Redeemable Preferred Stock properly tendered for redemption pursuant to this
Section 3.2, if the Corporation fails to pay the Optional Redemption Price on
the date fixed for redemption, the Corporation shall also pay an amount equal to
interest on the amount determined in the above sentence at 12% per annum,
compounded on a quarterly basis, from the date fixed for redemption to the date
the Optional Redemption Price is actually paid (such interest shall be in
addition to, and not in lieu of, any other remedies available to the holders of
shares of Redeemable Preferred for failure by the Corporation to pay the
Optional Redemption Price as provided herein). In the event that fewer than all
the outstanding shares of Redeemable Preferred Stock are to be redeemed pursuant
to this Section 3.2, the number of shares to be redeemed shall be redeemed on a
pro rata basis based on the number of shares held by each holder thereof.
4. MANDATORY REDEMPTION. On the twelfth anniversary of the Issue
Date (or, if such date is not a Business Day, on the first Business Day after
such date), the Corporation shall, subject to the provisions of Section 2.2,
redeem out of funds legally available therefor, all of the outstanding shares of
Redeemable Preferred Stock at a redemption price for each share equal to the
Mandatory Redemption Price. With respect to each share of Redeemable Preferred
Stock properly tendered for redemption pursuant to this Section 4, if the
Corporation fails to pay the Mandatory Redemption Price on the date fixed for
redemption, the Corporation shall also pay an amount equal to interest on the
amount determined in the above sentence at 12% per annum, compounded on a
quarterly basis, from the date fixed for redemption to the date the Mandatory
Redemption Price is actually paid (such interest shall be in addition to, and
not in lieu of, any other remedies available to the holders of shares of
Redeemable Preferred for failure by the Corporation to pay the Mandatory
Redemption Price as provided herein).
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5. PROCEDURES FOR REDEMPTION
5.1 In the event the Corporation shall elect to redeem shares
of Redeemable Preferred Stock pursuant to Section 3, or is obligated to redeem
shares of Redeemable Preferred Stock pursuant to Section 4, it shall provide
notice of such redemption by first class mail, postage prepaid, mailed not less
than thirty (30) nor more than sixty (60) days prior to the redemption date, to
each record holder of the shares to be redeemed, at such holder's address as the
same appears on the books of the Corporation. Each such notice shall state:
(i) the time and date as of which the redemption shall occur; (ii) the total
number of shares of Redeemable Preferred Stock to be redeemed and, if fewer 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) that shares of
Redeemable Preferred Stock called for redemption may be converted at any time
prior to the time and date fixed for redemption (unless (x) the Corporation
shall default in the payment of the Redemption Price, in which case such right
shall not terminate at such time and date or (y) the holders of such shares do
not yet have the right to convert such shares under Section 6 below); (v) the
Common Stock Conversion Rate; (vi) the place or places where certificates for
such shares are to be surrendered for payment of the Redemption Price; and
(vii) that dividends on the shares to be redeemed will cease to accrue on such
redemption date.
5.2 If notice of redemption shall have been given by the
Corporation as provided in Section 5.1, dividends on the shares of Redeemable
Preferred Stock so called for redemption shall cease to accrue, such shares
shall no longer be deemed to be outstanding, and all rights of the holders
thereof as stockholders of the Corporation with respect to shares so called for
redemption (except the right to receive from the Corporation the Redemption
Price without interest and except the right to convert such shares in accordance
with Section 6) shall cease (including any right to receive dividends otherwise
payable on any Dividend Payment Date that would have occurred after the time and
date of redemption) from and after the time and date fixed in the notice of
redemption as the time and date of redemption (unless the Corporation shall
default in the payment of the Redemption Price, in which case such rights shall
not terminate at such time and date). Upon surrender (in accordance with the
notice of redemption) of the certificate or certificates for any shares to be so
redeemed (properly endorsed or assigned for transfer, if the Corporation shall
so require and the notice of redemption shall so state), such shares shall be
redeemed by the Corporation at the Redemption Price. In case fewer than all the
shares represented by any such certificate are to be redeemed, a new certificate
shall be issued representing the unredeemed shares, without cost to the holder
thereof, together with the amount of cash, if any, in lieu of fractional shares.
Subject to applicable escheat laws, any moneys so set aside by the Corporation
and unclaimed at the end of one year from the redemption date shall revert to
the general funds of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general funds of the
Corporation for the
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payment of the redemption price without interest. Any interest accrued on funds
so deposited shall be paid to the Corporation from time to time.
6. CONVERSION RIGHTS.
6.1 Each holder of a share of Redeemable Preferred Stock shall
have the right, at any time after the 90th day following the Issue Date, or, as
to any share of Redeemable Preferred Stock called for redemption with a date
fixed for redemption which is after the 90th day following the Issue Date, at
any time prior to the time and date fixed for such redemption (unless the
Corporation defaults in the payment of the Redemption Price, in which case such
right shall not terminate at such time and date), to convert such share into
fully paid and nonassessable shares of Common Stock equal to the Common Stock
Conversion Rate as of the date of conversion.
6.2 No fractional shares or scrip representing fractions of
shares of Common Stock shall be issued upon conversion of Redeemable Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of Redeemable Preferred
Stock, the Corporation shall, subject to Section 6.5(e), make a cash payment
(calculated to the nearest $.01) equal to such fraction multiplied by the
Closing Price of the Common Stock on the last Trading Day prior to the date of
conversion; provided, that, if on any such date the shares of Common Stock are
not listed or admitted for trading on any national securities exchange or quoted
by NASDAQ or a similar service, the Closing Price for a share of Common Stock
shall be the fair market value as determined by three Independent Financial
Experts, one selected by the Corporation (which selection shall be communicated
in writing to the holder of the Redeemable Preferred Stock exercising its
conversion right hereunder), one selected by the holders of the shares of
Redeemable Preferred Stock exercising its conversion right hereunder (which
selection shall be communicated in writing to the Corporation) and one selected
by the two Independent Financial Experts so chosen. The determination of fair
market value by such Financial Expert shall be final, binding and conclusive on
the Corporation and the holder of Redeemable Preferred Stock exercising its
conversion right hereunder. All costs and fees of any of the Independent
Financial Experts retained in accordance with the foregoing shall be borne by
the Corporation.
6.3 Any holder of shares of Redeemable Preferred Stock
electing to convert such shares into Common Stock shall surrender the
certificate or certificates for such shares at the offices of the Corporation
(or at such other place as the Corporation may designate by notice to the
holders of shares of Redeemable Preferred Stock) during regular business hours,
duly endorsed to the Corporation or in blank, or accompanied by instruments of
transfer to the Corporation or in blank, in form reasonably satisfactory to the
Corporation, and shall give written notice to the Corporation at such offices
that such holder elects to convert such shares of
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Redeemable Preferred Stock. As soon as practicable (but in no event later than
three (3) Business Days) after any holder deposits certificates for shares of
Redeemable Preferred Stock, accompanied by the written notice above prescribed,
the Corporation shall issue and deliver at such office to the holder for whose
account such shares were surrendered, or to his nominee, certificates
representing the number of shares of Common Stock and the cash in lieu of
fractional shares, if any, to which such holder is entitled upon such
conversion.
6.4 Conversion shall be deemed to have been made as of the
date that certificates for the shares of Redeemable Preferred Stock to be
converted and the written notice, are received by the Corporation; and the
Person entitled to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder of such Common Stock on such
date. The Corporation shall not be required to deliver certificates for shares
of Common Stock while the stock transfer books for such stock or for Redeemable
Preferred Stock are duly closed for any purpose, but certificates for shares of
Common Stock shall be issued and delivered as soon as practicable after the
opening of such books.
6.5 The Common Stock Conversion Rate shall be adjusted from
time to time as follows:
(a) If the Corporation shall, at any time or from time
to time while any shares of the Redeemable Preferred Stock are outstanding,
(i) pay a dividend on its Common Stock in shares of its capital stock,
(ii) combine its outstanding shares of Common Stock into a smaller number of
shares, (iii) subdivide its outstanding shares of Common Stock or (iv) issue by
reclassification of its shares of Common Stock any shares of capital stock of
the Corporation, then the Common Stock Conversion Rate in effect immediately
before such action shall be adjusted so that the holders of the Redeemable
Preferred Stock, upon conversion of shares thereof immediately following such
action, shall be entitled to receive the kind and amount of shares of capital
stock of the Corporation which they would have owned or been entitled to receive
upon or by reason of such event if such shares of Redeemable Preferred Stock had
been converted immediately before the record date or effective date for such
action. An adjustment made pursuant to this Section 6.5(a) shall become
effective retroactively immediately after the record date in the case of a
dividend or distribution and shall become effective retroactively immediately
after the effective date in the case of a subdivision, combination or
reclassification. For the purposes of this Section 6.5(a) if the kind or amount
of securities receivable upon the payment of any dividend, subdivision,
combination or reclassification is subject to an election to be made by the
holders of Common Stock, then each holder of Redeemable Preferred Stock shall be
deemed to have failed to exercise any such right to make such election (provided
that if the kind or amount of securities receivable upon such dividend,
subdivision, combination or reclassification is not the same for each
nonelecting share, then the kind and amount of securities receivable upon such
dividend, subdivision, combination or reclassification for each nonelecting
share shall
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be deemed to be the kind and amount so receivable per share by a plurality of
the nonelecting shares).
(b) If the Corporation shall, at any time or from time
to time while any of the Redeemable Preferred Stock is outstanding, issue rights
or warrants to all or substantially all holders of shares of its Common Stock
entitling them (for a period expiring within 45 days after the record date for
such issuance) to subscribe for or purchase shares of Common Stock (or
securities exercisable, convertible or exchangeable for or into shares of Common
Stock) at a price per share less than the Current Market Price of the Common
Stock at such record date (treating the price per share of the securities
exercisable, convertible or exchangeable for or into Common Stock as equal to
(x) the sum of (i) the price for a unit of the security exercisable, convertible
or exchangeable for or into Common Stock plus (ii) any additional consideration
initially payable upon the exercise, conversion or exchange of such security for
or into Common Stock divided by (y) the number of shares of Common Stock
initially underlying such exercisable, convertible or exchangeable security),
the Common Stock Conversion Rate shall be adjusted so that it shall equal the
rate determined by multiplying the Common Stock Conversion Rate in effect
immediately prior to the date of issuance of such rights or warrants by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase (or
into or for which the exercisable, convertible or exchangeable securities so
offered are initially exercisable, convertible or exchangeable), and the
denominator of which shall be the number of shares of Common Stock outstanding
on the date of issuance of such rights or warrants plus the number of shares
which the aggregate offering price of the total number of shares so offered for
subscription or purchase (or the aggregate purchase price of the exercisable,
convertible or exchangeable securities so offered plus the aggregate amount of
any additional consideration initially payable upon exercise, conversion or
exchange for or into Common Stock) would purchase at such Current Market Price
of the Common Stock. Such adjustment shall become effective retroactively
immediately after the record date for the determination of stockholders entitled
to receive such rights or warrants.
(c) If the Corporation shall, at any time or from time
to time while any of the Redeemable Preferred Stock is outstanding, distribute
to all or substantially all holders of shares of its Common Stock (including any
such distribution made in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation and the Common Stock is
not changed or exchanged) cash, evidences of indebtedness, securities or other
assets (excluding dividends payable in shares of Common Stock for which
adjustment is made under Section 6.5(a)) or rights, options or warrants to
subscribe for or purchase securities of the Corporation (excluding those for
which adjustment is made under Section 6.5(b)), then in each such case the
Common Stock Conversion Rate shall be adjusted so that it shall equal the rate
determined by multiplying the Common Stock
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Conversion Rate in effect immediately prior to the date of such distribution by
a fraction, the numerator of which shall be the Current Market Price of the
Common Stock on the record date referred to below, and the denominator of which
shall be such Current Market Price of the Common Stock less the then fair market
value (as determined by the Board of Directors in good faith or, if requested by
the holders of two-thirds of the Redeemable Preferred Stock, by an Independent
Financial Expert selected in the manner described in the definition of the term
"Current Market Price") of the portion of the cash, evidences of indebtedness,
securities or other assets so distributed or of such rights, options or warrants
applicable to one share of Common Stock (provided that such denominator shall
never be less than $.01).
(d) If the Corporation or any subsidiary thereof
shall, at any time or from time to time while any of the Redeemable Preferred
Stock is outstanding, make a Pro Rata Repurchase, the Common Stock Conversion
Rate shall be adjusted by multiplying the Common Stock Conversion Rate in effect
immediately prior to such action by a fraction (which in no event shall be less
than one (1)), the numerator of which shall be the product of (i) the number of
shares of Common Stock outstanding immediately before such Pro Rata Repurchase
minus the number of shares of Common Stock repurchased in such Pro Rata
Repurchase and (ii) the Current Market Price of the Common Stock as of the day
immediately preceding the first public announcement by the Corporation of the
intent to effect such Pro Rata Repurchase, and the denominator of which shall be
(i) the product of (x) the number of shares of Common Stock outstanding
immediately before such Pro Rata Repurchase and (y) the Current Market Price of
the Common Stock as of the day immediately preceding the first public
announcement by the Corporation of the intent to effect such Pro Rata Repurchase
minus (ii) the aggregate purchase price of the Pro Rata Repurchase (provided
that such denominator shall never be less than $.01).
(e) All calculations under this Section 6.5 shall be
made to the nearest $.01 (with $.005 being rounded upward), one-hundredth of a
share (with .005 being rounded upward) or, in the case of a conversion rate, one
ten-thousandth (with .00005 being rounded upward). Notwithstanding any other
provision of this Section 6.5, the Corporation shall not be required to make any
adjustment of the Common Stock Conversion Rate unless such adjustment would
require an increase or decrease of at least 0.01% of such rate. Any lesser
adjustment shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together with any adjustment
or adjustments so carried forward, shall amount to an increase or decrease of at
least 0.01% in such rate. Any adjustments under this Section 6.5 shall be made
successively whenever an event requiring such an adjustment occurs.
(f) Whenever an adjustment in the Common Stock
Conversion Rate is required, the Corporation shall promptly cause to be mailed
(but in any event not later than five (5) days after the date of the event
giving rise to such adjustment) first-class postage prepaid, to the holders of
record of the outstanding
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shares of Redeemable Preferred Stock, notice of such adjustment and a
certificate of a firm of independent public accountants of recognized national
standing selected by the Board of Directors (who shall be appointed at the
Corporation's expense and who may be the independent public accountants
regularly employed by the Corporation) setting forth the adjusted Common Stock
Conversion Rate in effect as of such date determined as provided herein. Such
notice and certificate shall set forth in reasonable detail such facts as shall
be necessary to show the reason for and the manner of computing such adjustment.
(g) In the event that at any time as a result of an
adjustment made pursuant to this Section 6.5, the holder of any share of
Redeemable Preferred Stock thereafter surrendered for conversion shall become
entitled to receive any shares of stock of the Corporation other than shares of
Common Stock, the conversion rate of such other shares so receivable upon
conversion of any such share of Redeemable Preferred Stock shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained in
subparagraphs (a) through (f) and (h) of this Section 6.5, and the provisions of
this Section 6 with respect to the Common Stock shall apply on like or similar
terms to any such other shares.
(h) No adjustment shall be made pursuant to this
Section if the effect thereof would be to reduce the Conversion Price below the
par value of the Common Stock and the Corporation shall not take any action if
the effect thereof would be to reduce the Conversion Price below the par value
of the Common Stock.
6.6 In case of either (a) any consolidation or merger to which
the Corporation is a party, other than a merger or consolidation in which the
Corporation is the surviving or continuing corporation and which does not result
in any reclassification of, or change (other than a change in par value or from
par value to no par value or from no par value to par value, or as a result of a
subdivision or combination) in, outstanding shares of Common Stock or (b) any
sale or conveyance of all or substantially all of the property and assets of the
Corporation, then each share of Redeemable Preferred Stock then outstanding
shall be converted in such merger or consolidation or shall be convertible from
and after such sale or conveyance of property and assets into the kind and
amount of shares of stock or other securities and property receivable upon such
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock into which such shares of Redeemable Preferred Stock could have
been converted immediately prior to such consolidation, merger, sale or
conveyance, subject to adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 6 (and assuming that
if the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, sale or conveyance is subject to an election to be made
by the holders of Common Stock, each holder of Common Stock shall be deemed to
have failed to exercise any such right to make such election
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(provided that if the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, sale or conveyance is not the same
for each non-electing share, then the kind and amount of securities, cash or
other property receivable upon such consolidation, merger, sale or conveyance
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the nonelecting shares)). The
Corporation shall not enter into any of the transactions referred to in
clause (a) or (b) of the preceding sentence unless effective provision shall be
made so as to give effect to the provisions set forth in this Section 6.6 and
the surviving or continuing corporation shall agree to be bound by the
provisions of this Section 6.6 for the benefit of the holders of Redeemable
Preferred Stock. The provisions of this Section 6.6 shall apply similarly to
successive consolidations, mergers, sales or conveyances.
6.7 The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
stock, for the purpose of effecting the conversion of the shares of Redeemable
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 shares of Redeemable Preferred Stock into such Common Stock at any
time (assuming that, at the time of the computation of such number of shares,
all such Common Stock would be held by a single holder). The Corporation shall
from time to time, in accordance with the laws of the State of Delaware, use its
best efforts to cause the authorized amount of Common Stock to be increased if
the aggregate of the authorized amount of the Common Stock remaining unissued
and the issued shares of such Common Stock in its treasury (other than any
shares of such Common Stock reserved for issuance in any other connection) shall
not be sufficient to permit the conversion of the shares of Redeemable Preferred
Stock into the Common Stock. The Corporation covenants that any shares of
Common Stock issued upon conversions of the Redeemable Preferred Stock shall be
validly issued, fully paid and nonassessable.
6.8 If any shares of Common Stock which would be issuable upon
conversion of shares of Redeemable Preferred Stock hereunder require
registration with or approval of any governmental authority before such shares
may be issued upon conversion, the Corporation will in good faith and as
expeditiously as possible cause such shares to be duly registered or approved,
as the case may be.
6.9 The Corporation shall pay any and all issue or other taxes
that may be payable in respect of any issue or delivery of shares of Common
Stock on conversion of shares of Redeemable Preferred Stock pursuant hereto.
The Corporation shall not, however, be required to pay any tax which is payable
in respect of any transfer involved in the issue or delivery of Common Stock in
a name other than that in which the shares of Redeemable Preferred Stock so
converted were registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the Corporation the
amount of such tax, or has established, to the satisfaction of the Corporation,
that such tax has been paid.
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6.10 For purposes of this Section 6, the number of shares of
Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation or any
subsidiary. The Corporation shall not pay a dividend or make any distribution
on shares of Common Stock held in the treasury of the Corporation.
6.11 If any action or transaction would require adjustment of
the Common Stock Conversion Rate pursuant to more than one paragraph of this
Section 6, only one adjustment shall be made and each such adjustment shall be
the amount of adjustment that has the highest absolute value.
6.12 In case:
(a) of a consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of the
Corporation is required; or
(b) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation; or
(c) of any Pro Rata Repurchase or other action
triggering an adjustment to the Common Stock Conversion Rate pursuant to
this Section 6;
then, in each case, the Corporation shall cause to be mailed, first-class
postage prepaid, to the holders of record of the outstanding shares of
Redeemable Preferred Stock, at least twenty (20) days prior to the applicable
record date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of any distribution or grant of rights or
warrants triggering an adjustment to the Common Stock Conversion Rate pursuant
to this Section 6, or, if a record is not to be taken, the date as of which the
holders of record of Common Stock entitled to such distribution, rights or
warrants are to be determined, or (y) the date on which any reclassification,
consolidation, merger, sale, conveyance, dissolution, liquidation, winding up or
Pro Rata Repurchase 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 deliverable upon such
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation, winding up or Pro Rata Repurchase. Failure to give the notice
specified hereunder shall have no effect on the status or effectiveness of the
action to which the required notice relates.
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7. VOTING.
7.1 The shares of Redeemable Preferred Stock shall have no
voting rights except as required by law or as set forth below:
(a) If the Corporation fails to pay dividends for an
aggregate of six quarters (whether consecutive or nonconsecutive), then on the
day following the sixth such Dividend Payment Date on which the quarterly
dividend payment was not made by the Corporation pursuant to Section 4(a)
hereof, the number of directors constituting the Board of Directors shall be
increased by two (2) (in addition to any such increase in directorships required
by any similar provision of the Certificate of Incorporation or the certificate
of designation in respect of any other class or series of preferred stock of the
Corporation) and the holders of shares of Redeemable Preferred Stock (in
addition to all other rights) shall have the exclusive right, voting separately
as a class, to elect two (2) directors of the Corporation. Such voting rights
shall continue in effect until the Corporation pays quarterly dividends pursuant
to Section 4(a) hereof on four (4) consecutive Dividend Payment Dates.
(b) Such voting rights may be exercised initially either
by written consent or at a special meeting of the holders of the shares of
Redeemable Preferred Stock having such voting rights, called as hereinafter
provided, or at any annual meeting of stockholders held for the purpose of
electing directors, and thereafter at each such annual meeting until such time
as shares of Redeemable Preferred Stock are no longer outstanding, at which time
or times such voting rights and the term of the directors elected pursuant to
Section 7.1(a) shall terminate.
(c) At any time when such voting rights shall have
vested in holders of shares of Redeemable Preferred Stock described in
Section 7.1(a), and if such rights shall not already have been exercised by
written consent, a proper officer of the Corporation may call, and, upon the
written request, addressed to the Secretary of the Corporation, of the record
holders of shares representing twenty-five percent (25%) of the voting power of
the shares then outstanding of Redeemable Preferred Stock, shall call, a special
meeting of the holders of shares of Redeemable Preferred Stock. Such meeting
shall be held at the earliest practicable date upon the notice required for
annual meetings of stockholders at the place for holding annual meetings of
stockholders of the Corporation, or, if none, at a place designated by the Board
of Directors. Notwithstanding the provisions of this Section 7.1(c), no such
special meeting shall be called during a period within 60 days immediately
preceding the date fixed for the next annual meeting of stockholders.
(d) At any meeting held for the purpose of electing
directors at which the holders of shares of Redeemable Preferred Stock shall
have the right to elect directors as provided herein, the presence in person or
by proxy of the holders of shares representing more than sixty-six and
two-thirds percent (66 2/3%) in
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voting power of the then outstanding shares of Redeemable Preferred Stock having
such right shall be required and shall be sufficient to constitute a quorum of
such class for the election of directors by such class.
(e) Any director elected by holders of shares of
Redeemable Preferred Stock pursuant to the voting right created under this
Section 7.1 shall hold office until the next annual meeting of stockholders
(unless such term has previously terminated pursuant to Section 7.1(b)) and any
vacancy in respect of any such director shall be filled only by vote of the
remaining director so elected, or if there be no such remaining director, by the
holders of shares of Redeemable Preferred Stock by written consent or at a
special meeting called in accordance with the procedures set forth in
Section 7.1(c), or, if no such special meeting is called or written consent
executed, at the next annual meeting of stockholders. Upon any termination of
such voting right, subject to applicable law, the term of office of all
directors elected by holders of shares of Redeemable Preferred Stock voting
separately as a class pursuant to this Section 7.1 shall terminate.
(f) So long as any shares of Redeemable Preferred
Stock remain outstanding, unless a greater percentage shall then be required by
law, the Corporation shall not, without the affirmative vote at a meeting or the
written consent with or without a meeting of the holders of shares of Redeemable
Preferred Stock representing at least sixty-six and two-thirds percent (662/3%)
of the aggregate voting power of shares of Redeemable Preferred Stock, voting as
a separate class, (i) after the Issue Date, authorize or issue any Senior Stock
or Parity Stock or reclassify any Junior Stock as Parity Stock or Senior Stock
or reclassify any Parity Stock as Senior Stock, (ii) amend, alter or repeal any
of the provisions of the Certificate of Incorporation, so as in any such case to
materially and adversely affect the preferences, special rights, powers or
privileges of the shares of Redeemable Preferred Stock, or (iii) consolidate or
merge with or into, or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its assets to, any person or entity
unless (A) the entity formed by such consolidation or merger (if other than the
Corporation) or to which such sale, assignment, transfer, lease or conveyance or
other disposition shall have been made shall be a corporation organized or
existing under the laws of the United State or any State thereof or the District
of Columbia and (B) the Redeemable Preferred Stock shall be converted into or
exchanged for and shall become shares of such successor, transferee or resulting
corporation or a parent corporation of such corporation, having in respect of
such successor, transferee or resulting corporation or a parent corporation the
identical powers, preferences and relative participating, optional or other
special rights, and the qualifications, limitations or restrictions thereon,
that the Redeemable Preferred Stock had immediately prior to such transaction.
(g) In exercising the voting rights set forth in this
Section 7.1, each share of Redeemable Preferred Stock shall have a number of
votes equal to its Liquidation Value.
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7.2 No consent of holders of shares of Redeemable Preferred
Stock shall be required for (i) the creation of any indebtedness of any kind of
the Corporation or (ii) the authorization or issuance of any class of Junior
Stock.
8. LIQUIDATION RIGHTS.
8.1 Upon the dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, the holders of the shares of
Redeemable Preferred Stock shall be entitled to receive out of the assets of the
Corporation available for distribution to stockholders, in preference to the
holders of, and before any payment or distribution shall be made on, Junior
Stock, the amount of $50 per share (the "Liquidation Value"), plus an amount
equal to all Accumulated Dividends and Accrual Dividends thereon to the date of
final distribution (whether or not declared).
8.2 Neither the sale, exchange or other conveyance (for cash,
shares of stock, securities or other consideration) of all or substantially all
the property and assets of the Corporation nor the merger or consolidation of
the Corporation into or with any other corporation, or the merger or
consolidation of any other corporation into or with the Corporation, shall be
deemed to be a dissolution, liquidation or winding up, voluntary or involuntary,
for the purposes of this Section 8.
8.3 After the payment to the holders of the shares of
Redeemable Preferred Stock of full preferential amounts provided for in this
Section 8, the holders of Redeemable Preferred Stock as such shall have no right
or claim to any of the remaining assets of the Corporation.
8.4 In the event the assets of the Corporation available for
distribution to the holders of shares of Redeemable Preferred Stock upon any
dissolution, liquidation or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to Section 8.1, no such distribution shall be made
on account of any shares of any Parity Stock upon such dissolution, liquidation
or winding up unless proportionate distributive amounts shall be paid on account
of the shares of Redeemable Preferred Stock, ratably, in proportion to the full
distributable amounts for which holders of all Parity Stock are entitled upon
such dissolution, liquidation or winding up.
9. OTHER PROVISIONS.
9.1 Shares of Redeemable Preferred Stock issued and reacquired
will, upon compliance with the applicable requirements of Delaware law, have the
status of authorized but unissued shares of Preferred Stock of the Corporation
undesignated as to series and may with any and all other authorized but
20
unissued shares of Preferred Stock of the Corporation be designated or
redesignated and issued or reissued, as the case may be, as part of any series
of Preferred Stock of the Corporation, except that any issuance or reissuance of
shares of Redeemable Preferred Stock must be in compliance with this certificate
of designation.
9.2 The Corporation shall be entitled to recognize the
exclusive right of a Person registered on its records as the holder of shares of
Redeemable Preferred Stock, and such record holder shall be deemed the holder of
such shares for all purposes.
9.3 All notice periods referred to herein shall commence on
the date of the mailing of the applicable notice.
IN WITNESS WHEREOF, Premier Parks Inc. has caused this certificate to
be signed and attested this ___ day of April 1998.
PREMIER PARKS INC.
By:
--------------------------------
Name:
Title: