CERTIFICATE OF DESIGNATION
OF
SERIES C PREFERRED STOCK
OF
INPUT/OUTPUT, INC.
Pursuant to Section 151(g) of the Delaware General Corporation Law,
Input/Output, Inc., a corporation organized and existing under the laws of the
State of Delaware (the "COMPANY"), hereby certifies that the following
resolution was duly adopted by the Board of Directors of the Company on April
21, 1999, pursuant to authority conferred upon the Board of Directors by the
Certificate of Incorporation of the Company (the "CERTIFICATE OF
INCORPORATION"), which authorizes the issuance of up to 5,000,000 shares of
preferred stock, $0.01 par value.
RESOLVED, that pursuant to authority expressly granted to and vested in
the Board of Directors of the Company and pursuant to the provisions of the
Certificate of Incorporation, the Board of Directors hereby creates a series of
preferred stock, herein designated and authorized as the Series C Preferred
Stock, $0.01 par value per share, which shall consist of 15,000 of the 5,000,000
shares of preferred stock which the Company now has authority to issue, and the
Board of Directors hereby fixes the powers, designations, preferences and
relative, participating, optional and other special rights of the shares of such
series, and the qualifications, limitations and restrictions thereof as follows:
1. NUMBER AND RANK. The number of shares constituting the Series
C Preferred Stock shall be 15,000. The Series C Preferred Stock shall rank
senior to the Company's Series A Preferred Stock with respect to the payment of
dividends and distributions on Liquidation and on parity with the Series B
Preferred Stock with respect to the payment of dividends and distributions on
Liquidation.
2. DEFINITIONS. Unless the context otherwise requires, when used
herein the following terms shall have the meaning indicated.
"ADJUSTED STATED VALUE" with respect to each share of Series C
Preferred Stock means the Stated Value (a) increased at an annual rate of 8%
thereof, compounded quarterly, less (b) the amount of cash dividends actually
paid with respect to such share, in each case commencing on the Issue Date and
accruing through the applicable Conversion Date, or, in the case of a redemption
being effected pursuant to SECTIONS 6(H) OR 6(I), through the date of payment of
the redemption price.
"AFFILIATE" means with respect to any Person, any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person. For purposes of this
definition, the term "control" (and correlative terms "controlling," "controlled
by" and "under common control with") means possession of the power, whether by
contract, equity ownership or otherwise, to direct the policies or management of
a Person.
"AVERAGE MARKET PRICE" means, for a given security, the average Market
Price for such security for the ten Trading Day period ending on and including
the Trading Day prior to the date of determination; PROVIDED, HOWEVER, that if
during such period the Company takes any action or an action becomes effective
that would require an adjustment to the Conversion Price pursuant to SECTION 7
hereof, then such Average Market Price shall be appropriately adjusted to
reflect such action in a manner consistent with the adjustments set forth in
SECTION 7.
"BENEFICIALLY OWN" or "BENEFICIAL OWNERSHIP" has the meaning set forth
in Rules 13d-3 and 13d-5 of the Exchange Act.
"BOARD" means the Board of Directors of the Company.
"BUSINESS COMBINATION" means (i) any consolidation or merger of the
Company with or into any Person or (ii) any Change of Control Stock Issuance, or
(iii) the sale, assignment conveyance, transfer, lease or other disposition by
the Company of all or substantially all of its assets followed by a liquidation
of the Company.
"BUSINESS DAY" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in Houston,
Texas generally are authorized or required by law or other governmental actions
to close.
"CAPITAL STOCK" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of capital or capital stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.
"CERTIFICATE" means the Certificate of Incorporation of the Company, as
amended (including any certificate of designation establishing a series of
preferred stock).
"CERTIFICATE OF DESIGNATION" means this Certificate of Designation of
the Series C Preferred Stock.
"CHANGE OF CONTROL STOCK ISSUANCE" shall mean any issuance, in a single
transaction or series of related transactions, by the Company of shares of
Common Stock or Common Stock Equivalents in connection with the acquisition of
assets (including cash) or securities by the Company or a Subsidiary of the
Company (including by way of a merger of a Subsidiary of the Company with or
into a Person), except where (i) the shareholders of the Company immediately
prior to such issuance own (in substantially the same proportion relative to
each other as such shareholders owned the Common Stock or Voting Stock of the
Company, as the case may be, immediately prior to such consummation) (x) more
than 50% of the Voting Stock of the Company immediately after such issuance, and
(y) more than 50% of the outstanding Common Stock immediately after such
issuance, (ii) the members of the Board immediately prior to entering into the
agreement relating to such issuance (or if no such agreement is entered into,
then immediately prior to the consummation of such issuance) constitute at least
a majority of the Board immediately after such issuance, with no agreements or
arrangements in place immediately after such consummation that would result in
the
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members of the Board immediately prior to the entering into the agreement
relating to such issuance ceasing to constitute at least a majority of the Board
and (iii) no Person or Group of Persons immediately after such issuance is the
Beneficial Owner of 40% or more of the total outstanding Voting Stock of the
Company or Common Stock. In calculating the percentage of the Voting Stock of
the Company owned by the shareholders of the Company immediately prior to an
issuance of Common Stock or Common Stock Equivalents in which there is more than
one class or series of Voting Stock, the percentage of the Voting Stock shall be
calculated based on the number of votes eligible to be cast in the election of
the directors of the Company generally. In calculating the percentages of Voting
Stock and Common Stock owned for purposes of this definition, such calculation
shall be calculated on a basis assuming the exercise or conversion in full of
all Common Stock Equivalents and on a basis disregarding all Common Stock
Equivalents, and the percentage which results in the lower percentage owned by
the shareholders of the Company shall apply in the application of clause (i)
above.
"COMMON STOCK" means the Company's common stock, par value $.01 per
share, and any Capital Stock for or into which such Common Stock hereafter is
exchanged, converted, reclassified or recapitalized by the Company or pursuant
to a Business Combination to which the Company is a party.
"COMMON STOCK EQUIVALENTS" means (without duplication with any other
Common Stock or Common Stock Equivalents) rights, warrants, options, convertible
securities or exchangeable securities, exercisable for or convertible or
exchangeable into, directly or indirectly, Common Stock, whether at the time of
issuance or upon the passage of time or the occurrence of some future event.
"COMPANY" means Input/Output, Inc. a Delaware corporation.
"CONVERSION DATE" is defined in SECTION 6(D).
"CONVERSION PRICE" means $8.50, as adjusted from time to time in
accordance with SECTION 7.
"CONVERSION RATIO" is defined in SECTION 6(C).
"DGCL" means the General Corporation Law of the State of Delaware, as
amended, or any successor statute or other legislation.
"DIVIDEND PAYMENT DATE" is defined in SECTION 3(A).
"DIVIDEND PERIOD" is defined in SECTION 3(A).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any successor statute, and the rules and regulations promulgated thereunder.
"EXCLUDED STOCK" means (i) shares of Common Stock issued by the Company
as a stock dividend payable in shares of Common Stock, or upon any subdivision
or split-up of the outstanding shares of Capital Stock in each case which is
subject to SECTION 7(B), or upon conversion of shares of Capital Stock (but not
the issuance of such Capital Stock which will be subject to the provisions
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of SECTION 7(A)(iii)), (ii) shares of Common Stock to be issued to employees,
directors, consultants and advisors of the Company pursuant to Stock Plans in
accordance with their respective terms.
"GROUP" means a group as contemplated by Section 13(d)(3) of the
Exchange Act.
"HOLDER" means a holder of record of Series C Preferred Stock.
"INITIAL CONVERSION DATE" means the first to occur of any of the
following: (i) May 7, 2002, (ii) an agreement providing for a Business
Combination is approved by the Board or a Business Combination is consummated,
(iii) a Tender Offer for Common Stock is approved or recommended by the Board or
(iv) there is a redemption, repurchase or reacquisition by the Company of Rights
issued pursuant to the Rights Agreement or any waiver of the application of the
Rights Agreement to any Beneficial Owner other than Purchaser or its Affiliates
except in the case of this clause (iv) as approved by the Purchaser's
representative to the Board.
"ISSUE DATE" means with respect to any shares of Series C Preferred
Stock the original date of issuance of such shares of Series C Preferred Stock.
"JUNIOR SECURITIES" means Capital Stock that, with respect to dividends
and distributions upon Liquidation, ranks junior to the Series C Preferred
Stock.
"LIQUIDATION" means the voluntary or involuntary liquidation,
dissolution or winding up of the Company; PROVIDED, HOWEVER, that a merger or
consolidation shall not be deemed a Liquidation nor shall the sale of assets not
requiring shareholder approval be deemed to be a Liquidation.
"LIQUIDATION PREFERENCE" is defined in SECTION 5.
"MANDATORY CONVERSION DATE" is defined in SECTION 6(B).
"MARKET PRICE" means, with respect to a particular security, on any
given day, the last reported sale price regular way or, in case no such reported
sale takes place on such day, the average of the last closing bid and asked
prices regular way, in either case on the principal national securities exchange
on which the applicable security is listed or admitted to trading, or if not
listed or admitted to trading on any national securities exchange, (i) the
closing sale price for such day reported by the Nasdaq Stock Market if such
security is traded over-the-counter and quoted in the Nasdaq Stock Market, or
(ii) if such security is so traded, but not so quoted, the average of the
closing reported bid and asked prices of such security as reported by the Nasdaq
Stock Market or any comparable system, or (iii) if such security is not listed
on the Nasdaq Stock Market or any comparable system but is actively traded, the
average of the closing bid and asked prices as furnished by two members of the
National Association of Securities Dealers, Inc. selected from time to time by
the Company for that purpose. If such security is not listed and traded in a
manner that the quotations referred to above are available for the period
required hereunder, the Market Price shall be deemed to be the fair value per
share of such security as determined by a nationally recognized investment
banking firm selected by the Board and reasonably acceptable to the Holders of a
majority of the outstanding shares of Series C Preferred Stock.
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"ORDINARY CASH DIVIDENDS" means any cash dividend or distribution
which, when combined on a per share of Common Stock basis with the per share
amounts of all other cash dividends and distributions paid on the Common Stock
during the 365-day period ending on the date of declaration of such dividend or
distribution (as adjusted to appropriately reflect any of the events referred to
in SECTION 7 and excluding cash dividends or distributions that resulted in an
adjustment to the Conversion Price), does not exceed 5% of the Market Price of a
share of Common Stock on the Trading Day immediately preceding the date of
declaration of such dividend or distribution.
"PARITY SECURITIES" means Capital Stock that, with respect to dividends
or distributions upon Liquidation, is PARI PASSU with the Series C Preferred
Stock.
"PERMITTED PARITY SECURITIES" means up to 20,000 shares of Preferred
Stock of the Company constituting no more than one series of Preferred Stock,
each share of which (i) has a liquidation preference of not more than $1,000 per
share exclusive of accrued and unpaid dividends, (ii) has a dividend rate of not
more than one percent per annum, (iii) has no more than one vote per share with
respect to matters on which it votes together with the Series C Preferred Stock
and Series B Preferred Stock and other Permitted Parity Securities as a single
class and (iv) is PARI PASSU with the Series C Preferred Stock and Series B
Preferred Stock with respect to the payment of dividends and distributions upon
Liquidation.
"PERSON" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, limited liability company, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"PRO RATA REPURCHASE" means any purchase of shares of Common Stock by
the Company or any Affiliate thereof pursuant to any tender offer or exchange
offer subject to Section 13(e) of the Exchange Act, or pursuant to any other
offer available to substantially all holders of Common Stock, whether for cash,
shares of capital stock of the Company, other securities of the Company,
evidences of indebtedness of the Company 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 Company), or any
combination thereof; PROVIDED, HOWEVER, that "Pro Rata Repurchase" shall not
include any purchase of shares by the Company or any Affiliate thereof made in
accordance with the requirements of Rule 10b-18 as in effect under the Exchange
Act. The "effective date" of a Pro Rata Repurchase shall mean the date of
acceptance of shares for purchase or exchange under any tender or exchange offer
which is a Pro Rata Repurchase or the date of purchase with respect to any Pro
Rata Repurchase that is not a tender or exchange offer.
"PURCHASE AGREEMENT" means the Purchase Agreement dated as of April 21,
1999 between the Company and the Purchaser providing for the purchase by the
Purchaser of 40,000 shares of Series B Preferred Stock and up to 15,000 shares
of Series C Preferred Stock from the Company, including all schedules and
exhibits thereto.
"PURCHASER" means SCF-IV, L.P., a Delaware limited partnership.
"RECORD DATE" is defined in SECTION 3(A).
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"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of May 7, 1999 between the Company and the Purchaser providing for
certain registration rights under the Securities Act with respect to the Common
Stock into which the Series B Preferred Stock and Series C Preferred Stock may
be converted.
"RIGHTS AGREEMENT" has the meaning set forth in SECTION 6(G).
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.
"SENIOR SECURITIES" means Capital Stock that, with respect to dividends
or distributions upon Liquidation, ranks senior to the Series C Preferred Stock.
"SERIES B PREFERRED STOCK" means the Series B Preferred Stock of the
Company issued to Purchaser pursuant to the Purchase Agreement.
"STATED VALUE" is an amount equal to $1,000.00 per share of Series C
Preferred Stock.
"STOCK PLANS" means the Company's stock option, stock incentive,
restricted stock, employee stock purchase or other similar plans, in each case
that have been approved by the Company's shareholders.
"SUBSIDIARY" of a Person means (i) a corporation, a majority of whose
stock with voting power, under ordinary circumstances, to elect directors is at
the time of determination, directly or indirectly, owned by such Person or by
one or more Subsidiaries of such Person, or (ii) any other entity (other than a
corporation) in which such Person or one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof has a majority
ownership interest or, with respect to a limited partnership, is a general
partner of such limited partnership.
"TENDER OFFER" means any transaction to which Regulation 14D of the
Exchange Act applies.
"TRADING DAY" means a day on which the principal market with respect to
the security in question is regularly scheduled to be open for trading, or if
there is not such principal market, then a day on which the New York Stock
Exchange is regularly scheduled to be open for trading.
"VOTING STOCK" of a Person means Capital Stock of such Person of the
class or classes pursuant to which the holders thereof have the general voting
power under ordinary circumstances to vote in the election of the board of
directors, managers or trustees of such Person.
The foregoing definitions will be equally applicable to both the
singular and plural forms of the defined terms.
3. DIVIDENDS AND DISTRIBUTIONS.
(A) The holders of Series C Preferred Stock shall be
entitled to receive out of the assets of the Company legally available
for that purpose, cumulative preferential cash
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dividends at a rate per annum of one percent (1%) of the Stated Value
(equivalent to $10 per annum or $2.50 per quarter) for each share of
Series C Preferred Stock, and, except as provided in SECTION 3(B), no
more, to be paid in accordance with the terms of this SECTION 3. Such
dividends shall be cumulative from the Issue Date and shall be payable
in arrears, when and as declared by the Board, on March 31, June 30,
September 30 and December 31 of each year (each such date being herein
referred to as a "DIVIDEND PAYMENT DATE"), commencing on the first such
Dividend Payment Date following the Issue Date; PROVIDED that if any
Dividend Payment Date shall not be a Business Day, then the Dividend
Payment Date shall be on the next succeeding day that is a Business
Day. The period from the Issue Date to the next Dividend Payment Date
and each quarterly period between consecutive Dividend Payment Dates
shall hereinafter be referred to as "DIVIDEND PERIODS." Dividends for
the initial Dividend Period shall be pro rated on a daily basis
commencing on and including the Issue Date on the basis of a 360-day
year. Each such dividend shall be paid to the holders of record of the
Series C Preferred Stock as their names appear on the share register of
the Company on the corresponding Record Date. As used above, the term
"RECORD DATE" means, with respect to the dividend payable on March 31,
June 30, September 30 and December 31, respectively, of each year, the
preceding March 15, June 15, September 15 and December 15, or such
other record date designated by the Board with respect to the dividend
payable on such respective Dividend Payment Date not exceeding 30 days
preceding such Dividend Payment Date. Dividends on account of arrears
for any past Dividend Periods may be declared and paid, together with
any accrued but unpaid interest thereon to and including the date of
payment, at any time, without reference to any Dividend Payment Date,
to holders of record on a date designated by the Board, not exceeding
30 days preceding the payment date thereof, as may be fixed by the
Board.
(B) If, on any Dividend Payment Date, the Company fails
to pay dividends, then until the dividends that were scheduled to be
paid on such date are paid, such dividends shall cumulate and shall
accrue additional dividends with respect to such unpaid dividends to
and including the date of payment thereof at the rate of one percent
(1%) per annum, compounded on a quarterly basis. Dividends for any
period less than a full quarterly Dividend Period or for a period
commencing on a Dividend Payment Date and ending on a Conversion Date
shall cumulate on a day-to-day basis and shall be computed on the basis
of a 360-day year.
(C) So long as any shares of the Series C Preferred Stock
shall be outstanding, (i) the Company shall not declare or pay any
dividend whatsoever, whether in cash, property or otherwise, set aside
any cash or property for the payment of dividends, or make any other
distribution on any Junior Securities (except a dividend or
distribution payable solely in shares of Junior Securities), (ii) the
Company shall not declare or pay any dividend whatsoever, whether in
cash, property or otherwise, set aside any cash or property for the
payment of dividends, or make any other distribution on any Parity
Securities ranking on parity with the Series C Preferred Stock with
respect to dividends or distributions (except a dividend or
distribution payable solely in shares of Junior Securities), unless
declared and paid PRO RATA with the Series C Preferred Stock in
proportion to the full amount to which they would otherwise be
respectively entitled, and (iii) the Company shall not and shall cause
its Subsidiaries not to repurchase, redeem or otherwise acquire or set
aside any cash or property
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for the repurchase or redemption of any Junior Securities or Parity
Securities, unless in each such case all dividends to which the holders
of the Series C Preferred Stock shall have been entitled for all
previous Dividend Periods shall have been paid or declared and a sum of
money sufficient for the payment thereof shall have been set aside.
4. VOTING RIGHTS. The Holders shall have the following voting
rights with respect to the Series C Preferred Stock:
(A) Subject to applicable law, the shares of Series C
Preferred Stock shall have no voting rights other than as set forth in
this SECTION 4.
(B) Holders of shares of the Series C Preferred Stock
shall be entitled to vote upon all matters upon which holders of Common
Stock have the right to vote, and Holders shall have that number of
votes on all such matters as is equal to the Conversion Ratio that
would apply if such Holder's shares of Series C Preferred Stock were to
be converted pursuant to SECTION 6(A) (using the calculation of such
Conversion Ratio specified in SECTION 6(C)(i) and not SECTION 6(C)(ii)
for such purpose) as of the record date for the determination of the
shareholders entitled to vote on such matters, or, if no such record
date is established as of the date such vote is taken or any written
consent of shareholders is solicited, such votes to be counted together
with all other shares of capital stock having general voting powers and
not separately as a class. Fractional votes shall not, however, be
permitted and any fractional voting rights resulting from the above
formula (after aggregating all shares into which shares of Series C
Preferred Stock held by each Holder could be converted) shall be
rounded up to the nearest whole number.
(C) The Holders of the Series C Preferred Stock, voting
together with the Series B Preferred Stock and any Permitted Parity
Securities as a separate class with one vote per share of Series C
Preferred Stock, shall be entitled to elect one member of the Board at
each meeting or pursuant to each consent of the Company's shareholders
for the election of directors (unless the term of the director
previously elected by the Holders pursuant to this Section 4(C) would
continue after such election). If the director so elected by the
Holders shall cease to serve as director before his term shall expire,
the Holders may, at a special meeting of such Holders, elect a
successor to hold office for the unexpired term of such director. The
Secretary of the Company may call, and upon written request of the
Holders of ten percent (10%) or more of the outstanding Series C
Preferred Stock addressed to him at the principal office of the Company
shall call, such a special meeting of the Holders for the election of
such director as provided herein. Such meeting shall be held within
fifty (50) days after delivery of such request to such Secretary, at
the place and upon the notice provided by law and in the Bylaws of the
Company for the holding of meetings of its shareholders. Any director
who shall have been elected pursuant to this SECTION 4(C), may be
removed during the aforesaid term of office, with or without cause,
only by the affirmative vote of a majority votes entitled to be cast by
the Holders of Series C Preferred Stock, the Series B Preferred Stock
and the holders of then outstanding Permitted Parity Securities.
(D) (i) The consent of the Holders of at least a
majority of the Series C Preferred Stock, voting together with the
Series B Preferred Stock and the Permitted Parity
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Securities as a single class with one vote per share, in person or by
proxy, either in writing without a meeting or at an annual or a special
meeting of shareholders called for the purpose, shall be necessary to:
(A) amend, alter or repeal, by way of
merger or otherwise, any of the provisions of the
Certificate, so as to authorize, create or issue any
shares of Parity Securities (other than Permitted
Parity Securities) or Senior Securities (or amend the
provisions of any existing class of Capital Stock to
make such class of Capital Stock a class of Parity
Securities or Senior Securities),
(B) issue any Parity Securities (other
than Permitted Parity Securities) or Senior
Securities, or
(C) consummate any Business
Combination.
(ii) The consent of the Holders of at least a
majority of the Series C Preferred Stock, voting separately as
a single class with one vote per share, in person or by proxy,
either in writing without a meeting or at an annual or a
special meeting of shareholders called for the purpose, shall
be necessary to amend, alter or repeal, by way of merger or
otherwise, any of the provisions of (x) the Certificate of
Designation or any certificate of designation of terms of any
Parity Securities, or (y) the Certificate, so as to affect
adversely any of the rights, preferences or privileges of
Holders.
5. LIQUIDATION PREFERENCE. In the event of any Liquidation, after
payment or provision for payment by the Company of the debts and other
liabilities of the Company and the liquidation preference of any Senior
Securities that rank senior to the Series C Preferred Stock with respect to
distributions on Liquidation, each Holder shall be entitled to receive an amount
in cash for each share of the then outstanding Series C Preferred Stock held by
such Holder equal to the Stated Value per share, plus an amount equal to all
accrued but unpaid dividends thereon, whether or not earnings are available in
respect of such dividends or such dividends have been declared, to and including
the date full payment is tendered to the Holders with respect to such
Liquidation, and no more (such amount being referred to herein as the
"LIQUIDATION PREFERENCE"), before any distribution shall be made to the holders
of any Junior Securities upon the Liquidation of the Company. In case the assets
of the Company available for payment to the Holders upon a Liquidation are
insufficient to pay the full Liquidation Preference on all outstanding shares of
the Series C Preferred Stock and all outstanding Senior Securities or Parity
Securities, in each case ranking on parity with the Series C Preferred Stock as
to distributions on Liquidation, in the amounts to which the holders of such
shares are entitled, then the entire assets of the Company available for payment
to the Holders of Series C Preferred Stock and holders of such Senior Securities
or Parity Securities will be distributed ratably among the Holders of the Series
C Preferred Stock and the holders of such Senior Securities or Parity
Securities, based upon the aggregate amount due on such shares upon Liquidation.
Written notice of any Liquidation of the Company, stating a payment date and the
place where the distributable amounts shall be payable, shall be given by mail,
postage prepaid, not less than 30 days prior to the payment
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date stated therein, to the Holders of record of the Series C Preferred Stock at
their respective addresses as the same shall appear on the books of the Company.
6. CONVERSION RIGHTS. The Series C Preferred Stock shall be
convertible as follows:
(A) CONVERSION AT HOLDER'S OPTION. The Holder of any
shares of Series C Preferred Stock shall have the right at such
Holder's option, at any time after the Initial Conversion Date and
prior to the Mandatory Conversion Date and without the payment of any
additional consideration, to convert any or all of such shares of
Series C Preferred Stock into a number of fully paid and nonassessable
shares of Common Stock for each such share of Series C Preferred Stock
equal to the Conversion Ratio, upon the terms hereinafter set forth.
(B) MANDATORY CONVERSION. On May 7, 2004 (the "MANDATORY
CONVERSION DATE"), each outstanding share of Series C Preferred Stock
shall, without any action on the part of the Holder of such share, be
converted automatically into a number of fully paid and nonassessable
shares of Common Stock equal to the Conversion Ratio, upon the terms
hereinafter set forth; PROVIDED, HOWEVER, that if the shares of Common
Stock issuable upon conversion of the Series C Preferred Stock are not
immediately freely transferrable under the Securities Act by the
Holders thereof, the Mandatory Conversion Date shall be delayed until
such time as the resale of the Common Stock issuable upon conversion of
such Series C Preferred Stock has been registered under the Securities
Act in accordance with the terms of the Registration Rights Agreement.
(C) CONVERSION RATIO. In the event of a conversion
pursuant to SECTION 6(A) OR 6(B), the Conversion Ratio shall be a
number of shares of Common Stock calculated using either of the
following methods at the option of the Holder as may be specified by
the Holder at the time of conversion, or, if no such specification is
made, using the method that results in the highest number:
(i) the amount determined by dividing (a) the
Stated Value plus any accrued and unpaid dividends to and
including the applicable Conversion Date by (b) the Conversion
Price in effect on the applicable Conversion Date; or
(ii) the amount determined by dividing (a) the
Adjusted Stated Value as of the applicable Conversion Date by
(b) the Average Market Price determined as of the applicable
Conversion Date (but not less than the lesser of $.01 or the
par value per share of the Common Stock at the time of
conversion).
(D) MECHANICS OF CONVERSION. The Holder of any shares of
Series C Preferred Stock may exercise the conversion right specified in
SECTION 6(A) by surrendering to the Company or any transfer agent of
the Company the certificate or certificates representing the shares of
Series C Preferred Stock to be converted, accompanied by written notice
specifying the number of such shares to be converted. If the
certificates representing shares of Common Stock issuable upon
conversion of shares of Series C Preferred Stock are to be issued in a
name other than the name on the face of the certificates representing
such shares of Series C
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Preferred Stock, such certificates shall be accompanied by such
evidence of the assignment and such evidence of the signatory's
authority with respect thereto as deemed appropriate by the Company or
its transfer agent. Conversion shall be deemed to have been effected
(i) with respect to conversions pursuant to SECTION 6(A), on the date
when the notice of an election to convert pursuant to SECTION 6(A) and
certificates representing the shares being converted are actually
received by the Company or any transfer agent of the Company, or (ii)
with respect to mandatory conversion pursuant to SECTION 6(B), on the
Mandatory Conversion Date. Such dates that the conversion shall be
deemed to be effective shall be referred to herein as the "CONVERSION
DATE." Subject to the provisions of SECTION 7(G), as promptly as
practicable after the Conversion Date, the Company shall issue and
deliver to or upon the written order of such Holder a certificate or
certificates for the number of shares of Common Stock to which such
Holder is entitled upon such conversion and a check or cash with
respect to any fractional interest in a share of Common Stock, as
provided in SECTION 6(E). The person in whose name the certificate or
certificates for shares of Common Stock are to be issued shall be
deemed to have become a holder of record of such shares of Common Stock
on the applicable Conversion Date. Upon conversion of only a portion of
the shares covered by a certificate representing shares of Series C
Preferred Stock surrendered for conversion pursuant to SECTION 6(A),
the Company shall issue and deliver to or upon the written order of the
Holder of the certificate so surrendered for conversion, at the expense
of the Company, a new certificate representing the number of shares of
Series C Preferred Stock representing the unconverted portion of the
certificate so surrendered.
(E) FRACTIONAL SHARES. No fractional shares of Common
Stock or scrip shall be issued upon conversion of shares of Series C
Preferred Stock. If more than one share of Series C Preferred Stock
shall be surrendered for conversion at any one time by the same Holder,
the number of shares of Common Stock issuable upon conversion thereof
shall be computed on the basis of the aggregate number of shares of
Series C Preferred Stock so surrendered. Instead of any fractional
share of Common Stock which would otherwise be issuable upon conversion
of any shares of Series C Preferred Stock, the Company shall pay a cash
adjustment in respect of such fractional interest in an amount equal to
that fractional interest of the Market Price of the Common Stock on the
Conversion Date.
(F) AUTHORIZATION AND ISSUANCE. The Company covenants and
agrees that:
(i) the shares of Common Stock issuable upon any
conversion of any shares of Series C Preferred Stock will be
deemed to have been issued to the Person exercising such
conversion rights set forth herein on the Conversion Date, and
the Person exercising such conversion rights will be deemed
for all purposes to have become the record holder of such
shares of Common Stock on the Conversion Date;
(ii) all shares of Common Stock which may be
issued upon any conversion of any Series C Preferred Stock
will, upon issuance, be fully paid and non-assessable and free
from all taxes, liens and charges with respect to the issue
thereof;
(iii) the Company will take all such action as may
be necessary to assure that all shares of Common Stock
issuable upon conversion of shares of Series C
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Preferred Stock may be issued without violation of any
applicable law or regulation or of any requirements of any
domestic securities exchange upon which securities of the same
class may be listed and shall endeavor to list the shares of
Common Stock required to be delivered upon conversion of the
shares of Series C Preferred Stock, prior to such delivery,
upon each national securities exchange, if any, upon which the
outstanding Common Stock is listed at the time of such
delivery;
(iv) the Company will not take any action which
would result in any adjustment of the Conversion Price if the
total number of shares of Common Stock issuable after such
action upon conversion of all shares of Series C Preferred
Stock, together with all shares of Common Stock then
outstanding and all shares of Common Stock then issuable upon
the exercise of all outstanding Common Stock Equivalents,
would exceed the total number of shares of Common Stock then
authorized by the Certificate of Incorporation;
(v) the Company will at all times reserve and
keep available, out of its authorized but unissued shares of
Common Stock or out of shares of Common Stock held in its
treasury, the full number of shares of Common Stock into which
all shares of the Series C Preferred Stock having conversion
privileges from time to time outstanding are convertible; and
(vi) the Company will at no time close its
transfer books against the transfer of the Series C Preferred
Stock or of any share of Common Stock issued or issuable upon
the conversion of the Series C Preferred Stock in any manner
which interferes with the timely conversion of the Series C
Preferred Stock.
(G) RIGHTS. Whenever the Company issues shares of Common
Stock upon conversion of Series C Preferred Stock, the Company will
issue, together with each such share of Common Stock, one right to
purchase Series A Preferred Stock of the Company (or other securities
in lieu thereof) pursuant to the Rights Agreement dated as of January
17, 1997 by and between the Company and Harris Trust and Savings Bank,
as amended (the "RIGHTS AGREEMENT"), or any similar rights, if any,
issued to holders of Common Stock in addition thereto or in the
replacement therefor (such rights, together with any additional or
replacement rights, being collectively referred to as the "RIGHTS"),
whether or not such rights shall be exercisable at such time, but only
if such Rights are issued and outstanding and held by other holders of
Common Stock (or are evidenced by outstanding share certificates
representing Common Stock) at such time and have not expired or been
redeemed.
(H) CASH REDEMPTION OPTION. Notwithstanding the
provisions of SECTIONS 6(A) OR 6(B), in the event of a conversion of
Series C Preferred Stock pursuant to which the Conversion Ratio is
determined using SECTION 6(C)(ii) (rather than SECTION 6(C)(i)), then,
provided that full cumulative dividends shall have been paid or
declared and set apart for payment upon all outstanding shares of
Series C Preferred Stock for all past dividend periods, the Company may
offer to redeem for cash any or all of such shares of Series C
Preferred Stock at a redemption price per share equal to the Adjusted
Stated Value (a "REDEMPTION OFFER"), in lieu of effecting such
conversion. To effect a Redemption Offer, the Company
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must give notice of such election, specifying the redemption price, (a
"REDEMPTION OFFER NOTICE") to the Holder of such shares of Series C
Preferred Stock (i) with respect to conversions pursuant to SECTION
6(A), within three Business Days after the notice of an election to
convert pursuant to SECTION 6(A) is received by the Company or any
transfer agent of the Company, or (ii) with respect to mandatory
conversion pursuant to SECTION 6(B), on the Mandatory Conversion Date.
If the Company fails to give a Redemption Offer Notice within the
foregoing time periods, it may not make a Redemption Offer. If the
Company has given a Redemption Offer Notice with respect to more than
50% of the shares of Series C Preferred Stock to be converted, then
within three Business Days following receipt of a Redemption Offer
Notice, the Holder may give notice to the Company declining the
Company's offer to redeem up to 50% of the shares of Series C Preferred
Stock to be converted, in which event the Company will not be entitled
to redeem such shares as specified and must convert such shares into
Common Stock in accordance with the terms hereof effective as of the
Conversion Date. The Company shall be entitled to redeem all of the
shares subject to the Redemption Offer Notice at the redemption price
set forth above to the extent the Holder does not properly decline such
redemption in accordance with the prior sentence. The Company shall
make any such redemption payment by wire transfer to an account
specified by the Holder on the first Business Day following the
expiration of the three Business Day period after the Holder's receipt
of the Redemption Offer Notice, failing which payment the Company shall
not be entitled to redeem such shares but shall be obligated to convert
all of such Shares into Common Stock in accordance with the terms
hereof.
(I) LIMITATION ON NUMBER OF CONVERSION SHARES.
Notwithstanding the provisions of SECTIONS 6(A) OR 6(B), if the Company
ever issues Common Stock upon conversion of Series C Preferred Stock
pursuant to which the Conversion Ratio is calculated pursuant to
SECTION 6(C)(ii) rather than SECTION 6(C)(i), the Company shall not be
obligated to issue, in the aggregate, a number of shares of Common
Stock in excess of the NYSE Limitation upon conversion of the Series C
Preferred Stock. The "NYSE Limitation" shall mean the maximum number of
shares of Common Stock that could be issued by the Company pursuant to
the conversion of the Series B Preferred Stock, the Series C Preferred
Stock and any substantially similar series of Permitted Parity
Securities issued to the Holder pursuant to the terms of the Purchase
Agreement without triggering a requirement to obtain the approval of
the Company's shareholders of such issuance pursuant to Section
312.03(c) of the New York Stock Exchange Listed Company Manual as in
effect on the Issue Date. To the extent that any shares of Series C
Preferred Stock are submitted for conversion such that the NYSE
Limitation would be exceeded, such excess shares shall, in lieu of
being converted into Common Stock, be redeemed in exchange for a cash
payment equal to the Adjusted Stated Value per share. The Company shall
make any such redemption payment by wire transfer to an account
specified by the Holder on the second Business Day following the
Conversion Date on which the shares of Series C Preferred Stock would
otherwise be converted into Common Stock.
7. CONVERSION PRICE ADJUSTMENTS. The Conversion Price shall be
subject to adjustment from time to time as follows:
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(A) COMMON STOCK ISSUED AT LESS THAN MARKET PRICE OR
CONVERSION PRICE. If the Company issues or sells any Common Stock other
than Excluded Stock without consideration or for a consideration per
share less than the Market Price per share of Common Stock, on the
Trading Day immediately preceding such issuance or sale or less than
the Conversion Price in effect immediately prior to such issuance or
sale, the Conversion Price in effect immediately prior to each such
issuance or sale will immediately (except as provided below) be reduced
to the price determined by multiplying the Conversion Price in effect
immediately prior to such issuance or sale, by a fraction, (1) the
numerator of which shall be (i) the number of shares of Common Stock
outstanding immediately prior to such issuance or sale plus (ii) the
number of shares of Common Stock which the aggregate consideration
received by the Company for the total number of such additional shares
of Common Stock so issued or sold would purchase at the higher of (x)
the Market Price per share of Common Stock on the Trading Day
immediately preceding such issuance or sale and (y) the Conversion
Price in effect immediately prior to such issuance or sale and (2) the
denominator of which shall be the number of shares of Common Stock
outstanding immediately after such issue or sale. For the purposes of
any adjustment of the Conversion Price pursuant to this SECTION 7(A),
the following provisions shall be applicable:
(i) in the case of the issuance of Common Stock
for cash, the amount of the consideration received by the
Company shall be deemed to be the amount of the cash proceeds
received by the Company for such Common Stock before deducting
therefrom any discounts or commissions allowed, paid or
incurred by the Company for any underwriting or otherwise in
connection with the issuance and sale thereof;
(ii) in the case of the issuance of Common Stock
(otherwise than upon the conversion of shares of Capital Stock
or other securities of the Company) for a consideration in
whole or in part other than cash, including securities
acquired in exchange therefor (other than securities by their
terms so exchangeable), the consideration other than cash
shall be deemed to be the fair value thereof as reasonably
determined by the Board, irrespective of any accounting
treatment; PROVIDED, HOWEVER, that such fair value as
determined by the Board shall not exceed the aggregate Market
Price of the shares of Common Stock being issued as of the
date the Board authorizes the issuance of such shares;
(iii) in the case of the issuance of (a) options,
warrants or other rights to purchase or acquire Common Stock
(whether or not at the time exercisable), (b) securities by
their terms convertible into or exchangeable for Common Stock
(whether or not at the time so convertible or exchangeable) or
options, warrants or rights to purchase such convertible or
exchangeable securities (whether or not at the time
exercisable):
(1) the aggregate maximum number of
shares of Common Stock deliverable
upon exercise of such options,
warrants or other rights to purchase
or acquire Common Stock shall be
deemed to have been issued at the
time such options, warrants or
rights are issued and for a
consideration equal to the
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consideration (determined in the
manner provided in SECTION 7(A)(i)
AND (ii)), if any, received by the
Company upon the issuance of such
options, warrants or rights plus the
minimum purchase price provided in
such options, warrants or rights for
the Common Stock covered thereby;
(2) the aggregate maximum number of
shares of Common Stock deliverable
upon conversion of or in exchange
for any such convertible or
exchangeable securities, or upon the
exercise of options, warrants or
other rights to purchase or acquire
such convertible or exchangeable
securities and the subsequent
conversion or exchange thereof,
shall be deemed to have been issued
at the time such securities were
issued or such options, warrants or
rights were issued and for a
consideration equal to the
consideration, if any, received by
the Company for any such securities
and related options, warrants or
rights (excluding any cash received
on account of accrued interest or
accrued dividends), plus the
additional consideration (determined
in the manner provided in SECTION
7(A)(i) AND (ii)), if any, to be
received by the Company upon the
conversion or exchange of such
securities, or upon the exercise of
any related options, warrants or
rights to purchase or acquire such
convertible or exchangeable
securities and the subsequent
conversion or exchange thereof;
(3) on any change in the number of
shares of Common Stock deliverable
upon exercise of any such options,
warrants or rights or conversion or
exchange of such convertible or
exchangeable securities or any
change in the consideration to be
received by the Company upon such
exercise, conversion or exchange,
but excluding changes resulting from
the anti-dilution provisions thereof
(to the extent comparable to the
anti-dilution provisions contained
herein), the Conversion Price as
then in effect shall forthwith be
readjusted to such Conversion Price
as would have been obtained had an
adjustment been made upon the
issuance of such options, warrants
or rights not exercised prior to
such change, or of such convertible
or exchangeable securities not
converted or exchanged prior to such
change, upon the basis of such
change;
(4) on the expiration or cancellation of
any such options, warrants or rights
(without exercise), or the
termination of the right to convert
or exchange such convertible or
exchangeable securities (without
exercise), if the Conversion Price
shall have been adjusted upon the
issuance thereof, the Conversion
Price
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shall forthwith be readjusted to
such Conversion Price as would have
been obtained had an adjustment been
made upon the issuance of such
options, warrants, rights or such
convertible or exchangeable
securities on the basis of the
issuance of only the number of
shares of Common Stock actually
issued upon the exercise of such
options, warrants or rights, or upon
the conversion or exchange of such
convertible or exchangeable
securities; and
(5) if the Conversion Price shall have
been adjusted upon the issuance of
any such options, warrants, rights
or convertible or exchangeable
securities, no further adjustment of
the Conversion Price shall be made
for the actual issuance of Common
Stock upon the exercise, conversion
or exchange thereof;
PROVIDED, HOWEVER, that no increase in the Conversion Price
shall be made pursuant to subclauses (1) or (2) of this
SECTION 7(A)(iii).
(B) STOCK SPLITS, SUBDIVISIONS, RECLASSIFICATIONS OR
COMBINATIONS. If the Company shall (1) declare a dividend or make a
distribution on its Common Stock in shares of Common Stock, (2)
subdivide or reclassify the outstanding shares of Common Stock into a
greater number of shares, or (3) combine or reclassify the outstanding
Common Stock into a smaller number of shares, the Conversion Price in
effect at the time of the record date for such dividend or distribution
or the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the Holder
of any shares of Series C Preferred Stock surrendered for conversion or
exchange after such date shall be entitled to receive the number of
shares of Common Stock which such holder would have owned or been
entitled to receive after such date had such Series C Preferred Stock
been converted or exchanged immediately prior to such date. Successive
adjustments in the Conversion Price shall be made whenever any event
specified above shall occur.
(C) OTHER DISTRIBUTIONS. In case the Company shall fix a
record date for the making of a distribution to all holders of shares
of its Common Stock (1) of shares of any class other than its Common
Stock or (2) of evidence of indebtedness of the Company or any
Subsidiary or (3) of assets (including cash but excluding Ordinary Cash
Dividends, and dividends or distributions referred to in SECTION 7(B)),
or (4) of rights or warrants, then in each such case the Conversion
Price in effect immediately prior thereto shall be reduced to the price
determined by multiplying the Conversion Price in effect immediately
prior to such record date by a fraction, (i) the numerator of which
shall be an amount equal to the difference resulting from (A) the
number of shares of Common Stock outstanding on such record date
multiplied by the Market Price per share of Common Stock on such record
date, less (B) the fair market value (as reasonably determined by the
Board) of said shares or evidences of indebtedness or assets or rights
or warrants to be so distributed, and (ii) the denominator of which
shall be equal to the number of shares of Common Stock outstanding on
such record date multiplied by the Market Price per share of Common
Stock on such
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record date. Such adjustment shall be made successively whenever such a
record date is fixed. In the event that such distribution is not so
made, the Conversion Price then in effect shall be readjusted,
effective as of the date when the Board determines not to distribute
such shares, evidences of indebtedness, assets, rights or warrants, as
the case may be, to the Conversion Price that would then be in effect
if such record date had not been fixed.
(D) CERTAIN REPURCHASES OF COMMON STOCK. In case the
Company effects a Pro Rata Repurchase of Common Stock, then the
Conversion Price shall be reduced to the price determined by
multiplying the Conversion Price in effect immediately prior to the
effective date of such Pro Rata Repurchase by a fraction of which (1)
the numerator shall be (i) the product of (x) the number of shares of
Common Stock outstanding immediately before such Pro Rata Repurchase
and (y) the Market Price per share of Common Stock on the Trading Day
immediately preceding the first public announcement of the intent to
effect such Pro Rata Repurchase, minus (ii) the aggregate purchase
price of the Pro Rata Repurchase, and of which (2) the denominator
shall be the product of (a) the number of shares of Common Stock
outstanding immediately prior to such Pro Rata Repurchase minus the
number of shares of Common Stock so repurchased and (b) the Market
Price per share of Common Stock on the Trading Day immediately
preceding the first public announcement of such Pro Rata Repurchase.
(E) BUSINESS COMBINATIONS. In case of any Business
Combination in which the holders of shares of Common Stock are entitled
to receive stock, securities or property by virtue of their ownership
of Common Stock or a reclassification of Common Stock (other than a
reclassification of Common Stock referred to in SECTION 7(B)), each
share of Series C Preferred Stock shall after the date of such Business
Combination or reclassification be convertible into the number of
shares of stock or other securities or property (including cash) to
which the Common Stock issuable upon conversion of such share of Series
C Preferred Stock immediately prior to such Business Combination or
reclassification would have been entitled upon such Business
Combination or reclassification; and in any such case, if necessary,
the provisions set forth herein with respect to the rights and
interests thereafter of the Holders of the shares of Series C Preferred
Stock shall be appropriately adjusted so as to be applicable, as nearly
as may reasonably be, to any shares of stock or other securities or
property thereafter deliverable on the conversion of the shares of
Series C Preferred Stock. In determining the kind and amount of stock,
securities or the property receivable upon consummation of such
Business Combination, if the holders of Common Stock have the right to
elect the kind or amount of consideration receivable upon consummation
of such Business Combination, then the Holder of the Series C Preferred
Stock shall have the right to make a similar election as of the
Conversion Date with respect to the number of shares of stock or other
securities or property into which the Series C Preferred Stock shall be
convertible.
(F) ROUNDING OF CALCULATIONS; MINIMUM ADJUSTMENTS. All
calculations under this SECTION 7 shall be made to the nearest one
tenth (1/10th) of a cent or to the nearest one hundredth (1/100th) of a
share, as the case may be. Any provision of this SECTION 7 to the
contrary notwithstanding, no adjustment in the Conversion Price shall
be made if the amount of such adjustment would be less than $0.01, but
any such amount shall be carried forward and an adjustment with respect
thereto shall be made at the time of and together with any
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subsequent adjustment which, together with such amount and any other
amount or amounts so carried forward, shall aggregate $0.01 or more. In
addition, in no event shall be Conversion Price be adjusted to less
than the lesser of $.01 per share or the par value of the Common Stock.
(G) TIMING OF ISSUANCE OF ADDITIONAL COMMON STOCK UPON
CERTAIN ADJUSTMENTS. In any case in which the provisions of this
SECTION 7 shall require that an adjustment shall become effective
immediately after a record date for an event, the Company may defer
until the occurrence of such event (1) issuing to the Holder of any
share of Series C Preferred Stock converted after such record date and
before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the shares of Common Stock
issuable upon such conversion before giving effect to such adjustment
and (B) paying to such Holder any amount of cash in lieu of a
fractional share of such Common Stock; PROVIDED, HOWEVER, that the
Company upon request shall deliver to such Holder a due bill or other
appropriate instrument evidencing such Holder's right to receive such
additional shares, and such cash, upon the occurrence of the event
requiring such adjustment.
(H) STATEMENT REGARDING ADJUSTMENTS. Whenever the
Conversion Price shall be adjusted as provided in SECTION 7 the Company
shall forthwith file, at the office of any transfer agent for the
Series C Preferred Stock and at the principal office of the Company a
statement showing in reasonable detail the facts requiring such
adjustment and the Conversion Price that shall be in effect after such
adjustment and the Company shall also cause a copy of such statement to
be sent by mail, first class postage prepaid, to each Holder at its
address appearing in the Company's records.
(I) NOTICES. In the event that the Company shall propose
to take any action of the type described in SECTION 7 (but only if the
action of the type described in SECTION 7 would result in an adjustment
in the Conversion Price or a change in the type of securities or
property to be delivered upon a conversion or exchange of Series C
Preferred Stock), the Company shall give notice to each Holder, in the
manner set forth in SECTION 7(H), which notice shall specify the record
date, if any, with respect to any such action and the approximate date
on which such action is to take place. Such notice shall also set forth
the facts with respect thereto as shall be reasonably necessary to
indicate the effect on the Conversion Price and the number, kind or
class of shares or other securities or property which shall be
deliverable upon conversion of shares of the Series C Preferred Stock.
In the case of any action which would require the fixing or a record
date, such notice shall be given at least 10 days prior to the date so
fixed, and in case of all other action, such notice shall be given at
least 15 days prior to the taking of such proposed action. Failure to
give such notice, or any defect therein, shall not affect the legality
or validity of any such action.
(J) NO IMPAIRMENT. The Company will not, by amendment of
its Certificate of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or
performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the
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provisions of SECTIONS 6 and 7 and in taking of all such action as may
be necessary or appropriate in order to protect the conversion rights
of the Holders of the Series C Preferred Stock against impairment.
(K) NO DUPLICATION OF ADJUSTMENTS. If any action would
require adjustment of the Conversion Price pursuant to more than one of
the provisions of this SECTION 7, only one adjustment shall be made and
such adjustment shall be the adjustment that results in the lowest
Conversion Price after giving effect to such adjustment.
8. LIMITATIONS ON SERIES C PREFERRED STOCK. No share or shares of
Series C Preferred Stock the Company acquires through redemption, option,
exchange or otherwise will be reissued as Series C Preferred Stock, and all such
shares will be canceled, retired and eliminated from the shares of Series C
Preferred Stock which the Company will be authorized to issue, and will be
restored to the status of authorized but undesignated preferred stock of the
Company eligible for designation and reissuance subject to the terms hereof and
the Certificate. The Company will not issue any further shares of Series C
Preferred Stock.
9. WAIVERS. With the written consent of Holders of a Majority of
the Series C Preferred Stock, the obligations of the Company and the rights of
the Holders under this Certificate of Designation may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely). Upon the effectuation of
each such waiver, the Company will promptly give written notice thereof to the
Holders who have not previously consented thereto in writing.
10. REDEMPTION. Except as expressly set forth herein, the Company
shall have no right or obligation to redeem the Series C Preferred Stock.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
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IN WITNESS WHEREOF, this Certificate has been signed on behalf of the
Company by its President and attested to by its Secretary, all as of the 16th
day of August, 1999.
INPUT/OUTPUT, INC.
By: /s/ Robert P. Brindley
------------------------------------------
Robert P. Brindley
Executive Vice President and Secretary
ATTEST:
By: /s/ Roy Kelm
--------------------------
Name: Roy Kelm
Title: Vice President, Marine Division
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