Exhibit 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
CFW COMMUNICATIONS COMPANY
ARTICLE I
The name of the Corporation is NTELOS Inc.
ARTICLE II
The Corporation shall have authority to issue 75,000,000 shares of
Common Stock, without par value, and 1,000,000 shares of Preferred Stock,
without par value. No holder of shares of any class of the Corporation shall
have any preemptive or preferential right to purchase or subscribe to (i) any
shares of any class of the Corporation, whether now or hereafter authorized;
(ii) any warrants, rights or options to purchase any such shares; or (iii) any
securities or obligations convertible into any such shares or into warrants,
rights or options to purchase any such shares.
Preferred Stock. The Board of Directors may determine the preferences,
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limitations and relative rights, to the extent permitted to the Virginia Stock
Corporation Act, of any class of shares of Preferred Stock before the issuance
of any shares of such class, or of one or more series within a class of
Preferred Stock before the issuance of any shares of such series. Each such
class or series shall be appropriately designated by a distinguishing
designation prior to the issuance of any shares thereof. The Preferred Stock of
all series shall have preferences, limitations and relative rights identical
with those of other shares of the same series and, except to the extent
otherwise provided in the description of the series, with those of share of
other series of the same class.
Prior to the issuance of any shares of a class or series of Preferred
Stock (1) the Board of Directors shall establish such class or series by
adopting a resolution and by filing with the State Corporation Commission of
Virginia articles of amendment setting forth the designation and number of
shares of the class or series and the relative rights and preferences thereof,
and (2) the State Corporation Commission of Virginia shall have issued a
certificate of amendment.
The Board of Directors has established (i) Junior Participating
Cumulative Preferred Stock, Series A, (ii) Senior Cumulative Convertible
Preferred Stock, Series B and (iii) Senior Cumulative Convertible Preferred
Stock, Series C, the preferences, limitations and relative rights of which are
set forth in Appendix I, Appendix II and Appendix III, respectively.
Common Stock. The holders of Common Stock shall, to the exclusion of
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the holders of any other class of stock of the Corporation, have the sole and
full power to vote for the election of directors and for all other purposes
without limitation except only (i) as otherwise provided in the articles of
amendment for a particular class or series of Preferred Stock, and (ii) as
otherwise expressly provided by the then existing statutes of the Commonwealth
of Virginia.
The holders of Common Stock shall have one vote for each share of Common Stock
held by them.
Subject to the provisions of any articles of amendment for a class or
series of Preferred Stock, the holders of Common Stock shall be entitled to
receive dividends if, when and as declared by the Board of Directors out of
funds legally available therefor and to the net assets remaining after payment
of all liabilities upon voluntary or involuntary liquidation of the Corporation.
ARTICLE III
(1) Number, Election and Term of Directors. The number of Directors
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constituting the Board of Directors shall be fixed by the by-laws, or in the
absence of a by-law fixing the number, the number shall be eleven; provided that
the number of directors of the Corporation set forth in the by-laws cannot be
increased by more than two during any twelve-month period except by the
affirmative vote of the holders of more than 66 2/3% of the outstanding Voting
Shares. Commencing with the 1988 annual meeting of shareholders, the Board of
Directors shall be divided into three classes, Class I, Class II and Class III,
which shall be an nearly equal in number as possible. The Directors of the first
class (Class I) shall hold office for a term expiring at the 1989 Annual Meeting
of Shareholders; the Directors of the second class (Class II) shall hold office
for a term expiring at the 1990 Annual Meeting of Shareholders; and the
Directors of the third class (Class III) shall hold office for a term expiring
at the 1991 Annual Meeting of Shareholders. At each annual meeting of
shareholders thereafter the successors to the class of Directors whose term
shall then expire shall be identified as being of the same class as the
Directors they succeed and elected to hold office for a term expiring at the
third succeeding annual meeting of shareholders. Whenever the number of
Directors is changed, any newly-created directorship or any decrease in
directorships shall be so apportioned among the classes by the Board of
Directors so as to make all classes as nearly equal in number as possible.
(2) Newly-Created Directorships and Vacancies. Subject to the rights of
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the holders of any Preferred Stock then outstanding, any vacancy occurring in
the Board of Directors, including a vacancy resulting from an increase by not
more than two in the number of directors, may be filled by the affirmative vote
of a majority of the remaining Directors though less than a quorum of the Board
of Directors, and the Directors so chosen shall hold office for a term expiring
at the annual meeting of shareholders at which the term of the class to which
they have been elected expires. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.
(3) Removal of Directors. In addition to any other vote that may be
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required by statute, these Articles of Incorporation or any amendment thereto,
or the By-laws of the Corporation, any Director may be removed only by the
affirmative vote of more than 66 2/3% of the outstanding Voting Shares.
(4) Amendment or Repeal. In addition to any other vote that may be
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required by statute, these Articles of Incorporation or any amendment thereto,
or the By-laws of the Corporation, the provisions of this Article shall not be
amended or repealed, nor shall any provision of these Articles of Incorporation
be adopted that is inconsistent with this Articles, unless such action shall
have been approved by the affirmative vote of either:
(a) the holders of more than 66 2/3 of the outstanding Voting Shares
(notwithstanding anything to the contrary in Article IV); or
(b) a majority of those Directors who are Continuing Directors and
the holders of the requisite number of shares specified by the Board of
Directors pursuant to Article IV for the amendment of these Articles of
Incorporation.
(5) Certain Definitions. For purposes of this Article.
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(a) "Continuing Director" means any member of the Board of Director
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who:
(i) was elected to the Board of Directors of the Corporation at
the Corporation's organizational meeting on January 25, 1988; or
(ii) was recommended for election by, or as elected to fill a
vacancy and received the affirmative vote of, a majority of the
Continuing Directors then on the Board.
(b) "Voting Shares" shall mean the outstanding shares of all classes
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or series of the Corporation's stock entitled to vote generally in the
election of Directors.
ARTICLE IV
Unless the Board of Directors conditions its submission of a proposed
extraordinary corporate event (as defined below) on a receipt of a greater vote,
any extraordinary corporate event that requires shareholder approval under the
Code of Virginia, 1950, as amended (the "Virginia Code"), shall be approved by
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not less than a majority of the votes cast on the proposed event by each class
or series of stock entitled to vote on such event at a meeting at which a quorum
of each such class or series exists. For purpose of this Article IV,
"extraordinary corporate event" means any amendment to the Articles of
Incorporation pursuant to Virginia Code (S) 13.1-707, any merger pursuant to
Virginia Code (S) 13.1-717, any sale of all or substantially all of the assets
of the Corporation pursuant to Virginia Code (S) 13.1-724 or any dissolution of
the Corporation pursuant to Virginia Code (S) 13.1-742. The provisions of this
Article IV shall not be deemed to affect any shareholder vote required by
Article 14 of the Virginia Stock Corporation Act.
ARTICLE V
1) In this Article:
"applicant" means the person seeking indemnification pursuant to this
Article.
"expenses" includes counsel fees.
"liability" means the obligation to pay a judgment, settlement,
penalty, fine, including any excise tax assessed with respect to an
employee benefit plan, or reasonable expenses incurred with respect to a
proceeding.
"party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
"proceeding" means any threatened, pending, or completed action, suit,
or proceeding, whether civil, criminal, administrative or investigative and
whether formal or informal.
(2) In any proceeding brought by or in the right of the Corporation or
brought by or on behalf of shareholders of the Corporation, no Director or
officer of the Corporation shall be liable to the Corporation or its
shareholders for monetary damages in excess of $0.00 with respect to any
transaction, occurrence, or course of conduct, whether prior or subsequent to
the effective date of these Articles, except for liability resulting from such
person's having engaged in willful misconduct or a knowing violation of the
criminal law or any federal or state securities law.
(3) The Corporation shall indemnify (a) any person who was or is a party
to any proceeding, including a proceeding brought by a shareholder in the right
of the Corporation or brought by or on behalf of shareholders of the
Corporation, by reason of the fact that he is or was a Director or officer of
the Corporation, or (b) any Director or officer who is or was serving at the
request of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against any liability incurred by him in
connection with such proceeding unless he engaged in willful misconduct or a
knowing violation of the criminal law. A person is considered to be serving an
employee benefit plan at the Corporation's request if his duties to the
Corporation also impose duties on, or otherwise involve services by, him to the
plan or to participants in or beneficiaries of the plan. The Board of Directors
is hereby empowered, by a majority vote of a quorum of disinterested Directors,
to enter into a contract to indemnify any Director or officer in respect of any
proceedings arising from any act or omission, whether occurring before or after
the execution of such contract.
(4) The provisions of this Article shall be applicable to all proceedings
commenced after the effectiveness of these Articles, arising from any act or
omission, whether occurring before or after such effectiveness. No amendment or
repeal of this Article shall have any effect on the rights provided under this
Article with respect to any act or omission occurring prior to such amendment or
repeal. The Corporation shall promptly take all such actions, and make all such
determinations, as shall be necessary or appropriate to comply with its
obligation to make any indemnity under this Article and shall promptly pay or
reimburse all reasonable expenses, including attorneys' fees, incurred by any
such Director or officer in connection with such actions and determinations or
proceedings of any kind arising therefrom.
(5) The termination of any proceeding by judgment, order, settlement,
conviction, or upon a pleas of nolo contendere or its equivalent, shall not of
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itself create a presumption that the applicant did not meet the standard of
conduct described in Sections (2) or (3) of this Article.
(6) Any indemnification under Section (3) of this Article (unless ordered
by a court) shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of the applicant is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Section (3).
The determination shall be made:
(a) By the Board of Directors by a majority vote of a quorum
consisting of Directors not at the time parties to the proceeding;
(b) If a quorum cannot be obtained under subsection (a) of this
Section, by majority vote of a committee duly designated by the Board of
Directors (in which designation Directors who are parties may participate),
consisting solely of two or more Directors not at the time parties to the
proceeding;
(c) By special legal counsel;
(i) Selected by the Board of Directors or its committee in the
manner prescribed in subsection (a) or (b) of this Section; or
(ii) If a quorum of the Board of Directors cannot be obtained
under subsection (a) of this Section and a committee cannot be
designated under subsection (b) of this Section, selected by majority
vote of the full Board of Directors, in which selected Directors who
are parties may participate; or
(d) By the shareholders, but shares owned by or voted under the
control of Directors who are at the time parties to the proceeding may not
be voted on the determination.
Any evaluation as to reasonableness of expenses shall be made in the
same manner as the determination that indemnification is appropriate, except
that if the determination is made by special legal counsel, such evaluation as
to reasonableness of expenses shall be made by those entitled under subsection
(c) of this Section (6) to select counsel.
Notwithstanding the foregoing, in the event there has been a change in
the composition of a majority of the Board of Directors after the date of the
alleged act or omission with respect to which indemnification is claimed, any
determination as to indemnification and advancement of expenses with respect to
any claim for indemnification made pursuant to this Article shall be made by
special legal counsel agreed upon by the Board of Directors and the applicant.
If the Board of Directors and the applicant are unable to agree upon such
special legal counsel the Board of Directors and the applicant each shall select
a nominee, and the nominees shall select such special legal counsel.
(7) (a) The Corporation shall pay for or reimburse the reasonable
expenses incurred by any applicant who is a party to a proceeding in advance of
final disposition of the proceeding or the making of any determination under
Section (3) if the applicant furnishes the Corporation:
(i) a written statement of his good faith belief that he has met
the standard of conduct described in Section (3); and
(ii) a written undertaking, executed personally or on his behalf,
to repay the advance if it is ultimately determined that he did not
meet such standard of conduct.
(b) The undertaking required by paragraph (ii) of subsection (a) of
this Section shall be an unlimited general obligation of the applicant but
need not be secured and may be accepted without reference to financial
ability to make repayment.
(c) Authorizations of payments under this Section shall be made by
the persons specified in Section (6).
(8) The Board of Directors is hereby empowered, by majority vote of a
quorum consisting of disinterested Directors, to cause the Corporation to
indemnify or contract to indemnify any person not specified in Sections (2) or
(3) of this Article who was, is or may become a party to any proceeding, by
reason of the fact that he is or was an employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, to the same extent as if such person
were specified as one to whom indemnification is granted in Section (3). The
provisions of Sections (4) through (7) of this Article shall be applicable to
any indemnification provided hereafter pursuant to this Section (8).
(9) The Corporation may purchase and maintain insurance to indemnify it
against the whole or any portion of the liability assumed by it in accordance
with this Article and may also procure insurance, in such amounts as the Board
of Directors may determine, on behalf of any person who is or was a Director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a Director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against any liability asserted against or incurred by him in any
such capacity or arising from his status as such, whether or not the Corporation
would have power to indemnify him against such liability under the provisions of
this Article.
(10) Every reference herein to directors, officers, employees or agents
shall include former directors, officers, employees and agents and their
respective heirs, executors and administrators. The indemnification hereby
provided and provided hereafter pursuant to the power hereby conferred by this
Article on the Board of Directors shall not be exclusive of any other rights to
which any person may be entitled, including any right under policies of
insurance that may be purchased and maintained by the Corporation or others,
with respect to claims, issues or matters in relation to which the Corporation
would not have the power to indemnify such person under the provisions of this
Article. Such rights shall not prevent or restrict the power of the Corporation
to make or provide for any further indemnity, or provisions for determining
entitlement to indemnity, pursuant to one or more indemnification agreements,
by-laws, or other arrangements (including, without limitation, creation of trust
funds or security interests funded by letters of credit or other means) approved
by the Board of Directors (whether or not any of the Directors of the
Corporation shall be a party to or beneficiary of any of such agreements, by-
laws or arrangements); provided, however, that any provision of such agreements,
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by-laws or other arrangements shall not be effective if and to the extent that
it is determined to be contrary to this Article or applicable laws of the
Commonwealth of Virginia.
(11) Each provision of this Article shall be severable, and an adverse
determination as to any such provision shall in no way affect the validity of
any other provision.
Appendix I
Junior Participating Cumulative Preferred Stock, Series A. The
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Corporation has designated 100,000 shares of the authorized but unissued shares
of the Corporation's Preferred Stock, without par value, as Junior Participating
Cumulative Preferred, Series A (hereinafter referred to as "Series A Preferred
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Stock"). The terms of the Series A Preferred Stock, in the respect in which the
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shares of such series may vary from shares of any and all other series of
Preferred Stock, are as follows:
(a) Dividends and Distributions.
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(1) Subject to the prior and superior rights of the holders of
any shares of any series of the Preferred Stock ranking prior and
superior to the shares of Series A Preferred Stock with respect to
dividends, the holders of shares of Series A Preferred Stock in
preference to the holders of Common Stock and of any other junior
stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available therefor, dividends
payable quarterly on March 31, June 30, September 30 and December 31
(each such date being referred to herein as a "Quarterly Dividend
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Payment Date"), commencing on the first Quarterly Dividend Payment
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Date after the first issuance of a share or fraction of a share of a
Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $250 or (b) subject to the
provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of a Common
Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date, or,
with respect the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any time after
February 26, 1990 (the "Rights Declaration Date"), (i) declare any
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dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each
such case the amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(2) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (1) above
immediately after it declares a dividend or distribution on the Common
Stock (other than dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have
been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend at the rate of $250 per shares on
the Series A
Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(3) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares
of Series A Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment
Date, is which case dividends on such shares shall begin to accrue
from the date of the issue of such shares, or unless the date of issue
is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record
date shall be no more than 30 days prior to the date fixed for the
payment thereof.
(b) Voting Rights. The holders of shares of Series A Preferred Stock
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shall have the following voting rights:
(1) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 1,000 votes on all matters submitted to vote of the
shareholders of the Corporation. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares in Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the
number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.
(2) Except as otherwise provided herein, in the Articles of
Incorporation or under applicable law, the holders of shares of Series
A Preferred Stock and the holders of shares of Common Stock shall vote
together as one voting group on all matters submitted to a vote of
stockholders of the Corporation.
(3) i) If at any time dividends on any shares of Series A
Preferred Stock shall be in arrears in an amount equal to six
quarterly dividends thereon, the occurrence of such contingency shall
mark the beginning of a period (a "default
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period") that shall extend until such time and when all accrued and
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unpaid dividend periods for all previously quarterly dividend period
on all shares of Series A Preferred Stock then outstanding shall have
been declared and paid or set apart for payment. During each default
period, all holders of the outstanding shares of Series A Preferred
Stock together with any other series of Preferred Stock then entitled
to such a vote under the terms of the Articles of Incorporation,
voting as a separate voting group, shall be entitled to elect two
members of the Board of Directors of the Corporation.
ii) During any default period, such voting right of the
holders of Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this
Subsection (b)(3) or at any annual meeting of stockholders, and
thereafter at annual meetings of stockholders, provided that
neither such voting right nor the right of the holders of any
other series of Preferred Stock, if any, to increase, in certain
cases, the authorized number of Directors shall be exercised
unless the holders of ten percent (10%) in number of shares of
Preferred Stock outstanding shall be present in person or by
proxy. The absence of a quorum of the holders of Common Stock
shall not affect the exercise by the holders of Preferred Stock
on such voting right. At any meeting at which the holders of
Preferred Stock shall exercise such voting right initially during
an existing default period, they shall have the right, voting as
a separate voting group, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then existing
up to two (2) Directors, or if such right is exercised at an
annual meeting, to elect two (2) Directors. If the number which
may be so elected at any special meeting does not amount to the
required number, the holders of the Preferred Stock shall have
the right to make such increase in the number of Directors as
shall be necessary to permit the election by them of the required
number. After the holders of the Preferred Stock shall have
exercised their right to elect Directors in any default period
and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of
the holders of Preferred Stock as herein provided or pursuant to
the rights of any equity securities ranking senior to or pari
passu with the Series A Preferred Stock.
iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total number of shares of Preferred
Stock outstanding, irrespective of any and all series, may
request, the calling of a special meeting of the holders of
Preferred Stock, which meeting shall thereupon be called by the
Chairman, President, a Vice Chairman, a Vice President or the
Secretary of the Corporation. Notice of such meeting and of any
annual meeting at which holders of Preferred Stock are entitled
to vote pursuant to this paragraph (b)(3)(iii) shall be given to
each holder of record of Preferred
Stock by mailing a copy of such notice to him at his last address
as the same appears on the books of the Corporation. Such meeting
shall be called for a time not earlier than 10 days and not later
than 60 days after such order or request. In the event such
meeting is not called within 60 days after such order or request,
such meeting may be called on similar notice by any stockholder
or stockholders owning in the aggregate not less than ten percent
(10%) of the total number of shares of Preferred Stock
outstanding. Notwithstanding the provisions of this paragraph
(b)(3)(iii), no such special meeting shall be called during the
period with 60 days immediately preceding the date fixed for the
next annual meeting of the stockholders.
iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation, if applicable, shall
continue to be entitled to elect the whole number of Directors
until the holders of Preferred Stock shall have exercised their
right to elect two (2) Directors voting as a separate voting
group, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in
office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in
paragraph (b)(3)(ii)) be filled by vote of a majority of the
remaining Directors theretofore elected by the voting group which
elected the Director whose office shall have become vacant.
References in this paragraph (b)(3)(iv) to Directors elected by a
particular voting group shall include Directors elected by such
Directors to fill vacancies as provided in clause (y) of the
foregoing sentence.
v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock, as a separate
voting group, to elect Directors shall cease, (y) the term of any
Directors elected by the holders of Preferred Stock, as a
separate voting group, shall terminate, and (z) the number of
Directors shall be such number as may be provided for in, or
pursuant to, the Articles of Incorporation or bylaws irrespective
of any increase made pursuant to the provisions of paragraphs
(b)(3)(ii) (such number being subject, however, to change
thereafter in any manner provided by law or in the Articles of
Incorporation or bylaws). Any vacancies in the Board of Directors
affected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining
Directors, even though less than a quorum.
(4) Except as set forth herein or as otherwise provided in the
Articles of Incorporation, holders of Series A Preferred Stock shall
have no special voting rights and their consent shall not be required
(except to the extent that they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
(c) Certain Restrictions.
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(1) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Subsection (a) are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares
of Series A Preferred Stock outstanding shall have been paid in full,
the Corporation shall not;
i) declare or pay or set apart for payment any dividends
(other than dividends payable in shares of any class or classes
of stock of the Corporation ranking junior to the Series A
Preferred Stock) or make any other distributions on, any class of
stock of the Corporation ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock and shall not redeem, purchase or otherwise
acquire, directly or indirectly, whether voluntarily, for a
sinking fund, or otherwise any shares of any class of stock of
the Corporation ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that, notwithstanding the foregoing, the
Corporation may at any time redeem, purchase or otherwise acquire
shares of stock of any such junior class in exchange for, or out
of the net cash proceeds from the concurrent sale of, other
shares of stock of any such junior class;
ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid ratably
on the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred
Stock;
iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series of classes.
(2) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(1) of Subsection (c), purchase or otherwise acquire such shares at such
time and in such manner.
(d) Required Shares. Any shares of Series A Preferred Stock purchased or
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otherwise acquired by the Corporation in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
(e) Liquidation, Dissolution or Winding Up.
--------------------------------------
(1) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock
shall have received $1,000 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment (the "Series A Liquidation Preference"). Following the
-------------------------------
payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to he holders of shares of Series A
Preferred Stock unless, prior thereto, the holders of shares of Common
Stock shall have received an amount per share (the "Common Adjustment")
-----------------
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 1,000 (as appropriately adjusted as set forth in
subparagraph 3 below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock) (such
number in clause (ii) being hereinafter referred to as the "Adjustment
----------
Number"). Following the payment of the full amount of the Series A
------
Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Preferred Stock and Common Stock and holders
of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the
Adjustment Number to 1 with respect to such Series A Preferred Stock and
Common Stock, on a per share basis, respectively.
(2) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of Preferred Stock, if
any, then such remaining assets shall be distributed ratably to the holders
of all such shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common
Stock.
(3) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then
in each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
(f) Consolidation, Merger, Share Exchange, etc. In case the Corporation
------------------------------------------
shall enter into any consolidation, merger, share exchange, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any such
case the shares of Series A Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provisions for
adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(g) Redemption. The outstanding shares of Series A Preferred Stock may be
----------
redeemed at the option of the Board of Directors as a whole, but not in part, at
any time, or from time to time, at a cash price per share equal to (i) 100% of
the product of the Adjustment Number times the Average Market Value (as such
term is hereinafter defined) of the Common Stock, plus (ii) all dividends which
on the redemption date have accrued on the shares to be redeemed and have not
been paid or declared and a sum sufficient for the payment thereof set apart,
without interest. The "Average Market Value" is the average of the closing sale
--------------------
prices of a share of the Common Stock during the 30-day period immediately
preceding the date before the redemption date on the Composite Tape for New York
Stock Exchange Listed Stocks, or, if such stock is not quoted on the Composite
Tape, on the New York Stock Exchange, or, if such stock is not listed on such
exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934, as amended, on which such stock is listed,
or, if such stock is not listed on any such exchange, the average of the closing
bid quotations with respect to a share of Common Stock during such 30-day period
on the National Association of Securities Dealers, Inc. Automated Quotation
System or any system then in use, or if no such quotations are available, the
fair market value of a share of the Common Stock as determined by the Board of
Directors in good faith.
(h) Ranking. The Series A Preferred Stock shall rank junior to all other
-------
series of Preferred Stock as to the payment of dividends and the distribution of
assets, unless the terms of any such series shall provide otherwise.
(i) Amendment. Except as permitted by the Virginia Stock Corporation Act,
---------
the Articles of Incorporation or the Bylaws, the Articles of Incorporation shall
not be further amended in any manner that would adversely affect the
preferences, rights or powers of the Series A Preferred Stock.
(j) Fractional Shares. Series A Preferred Stock may be issued in fractions
-----------------
of one one-thousandth of a share (and integral multiples thereof) which shall
entitle the holder, in proportion to such holders' fractional shares, to
exercise voting rights, receive dividends, participate in distributions and have
the benefit of all other rights of holders of Series A Preferred Stock.
Appendix II
Senior Cumulative Convertible Preferred Stock, Series B
-------------------------------------------------------
(1) Number; Rank. The number of authorized shares of Senior Cumulative
------------
Convertible Preferred Stock, Series B (the "Series B Preferred Stock") shall be
------------------------
112,500. The Series B Preferred Stock shall, with respect to dividend rights
and rights on liquidation, dissolution and winding up rank senior to all classes
of the Corporation's Common Stock, and to each other class of capital stock of
the Corporation now or hereafter established (collectively, the "Junior
------
Securities"). The definition of Junior Securities shall also include any rights
- ----------
or options exercisable for or convertible into any of the Junior Securities.
(2) Dividends.
---------
(a) Each holder of Series B Preferred Stock shall be entitled to
receive, in respect of each Dividend Period, when, as and if declared by
the Board of Directors of the Corporation, out of funds legally available
for the payment of dividends, cumulative dividends in an amount per share
equal to the excess (if any) of (i) the Applicable Percentage of the
Accreted Value as of the immediately preceding Dividend Payment Date (or,
for the initial Dividend Period, as of the date of issuance) over (ii) the
amount of any regular cash dividends per share of Series B Preferred Stock
that have been paid during such Dividend Period pursuant to paragraph 2(d).
Subject to the provisions of paragraph 2(b), dividends paid pursuant to
this paragraph 2(a) shall be payable in cash in arrears semi-annually on
June 30 and December 31 of each year (each of such dates being a "Dividend
--------
Payment Date" and each such semi-annual period being a "Dividend Period").
------------ ---------------
Such dividends shall accrue from the date of issue (except that dividends
on any amounts added to the Accreted Value pursuant to paragraph 2(b) shall
accrue from the date such amounts are added to the Accreted Value), whether
or not in any Dividend Period or Periods there shall be funds of the
Corporation legally available for the payment of such dividends. Each such
dividend shall be payable to the holders of record of shares of the Series
B Preferred Stock on June 1 and December 1, as they appear on the stock
records of the Corporation at the close of business on such record dates.
The date on which the Corporation initially issues any share of Series B
Preferred Stock shall be deemed to be its "date of issue" regardless of the
number of times transfer of such share is made on the stock records
maintained by or for the Corporation and regardless of the number of
certificates which may be issued to evidence such share.
(b) If dividends are not paid in cash on any Dividend Payment Date
for the immediately preceding Dividend Period (or portion thereof if less
than a full Dividend Period), the unpaid amount shall be added to the
Accreted Value for purposes of calculating succeeding periods' dividends.
Notwithstanding the addition to Accreted Value, the Corporation may pay,
when, as and if declared by the Board of Directors of the Corporation, the
amount of dividends previously added to the Accreted Value pursuant to the
preceding sentence, and, if and when so paid, the Accreted Value shall be
reduced by the amount of such payments; provided that if on the date on
--------
which any such dividend is declared the Daily Price of a share of Common
Stock is equal to or exceeds the then applicable Conversion Price, then the
Corporation shall declare and pay such dividend in
the number of shares of Common Stock determined by dividing the cash amount of
such dividend that the Corporation otherwise would pay by the then applicable
Conversion Price, and the Accreted Value shall be reduced by the amount of cash
the Corporation otherwise would have paid.
(c) The Applicable Percentage for each full Dividend Period for the Series
B Preferred Stock shall be 4.25%. The Applicable Percentage for the initial
Dividend Period, or any other period shorter or longer than a full Dividend
Period, on the Series B Preferred Stock shall be computed on the basis of a per
annum rate of 8.50% and the actual number of days elapsed over twelve 30-day
months and a 360-day year. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the Series B
Preferred Stock that may be in arrears.
(d) In case the Corporation shall fix a record date for the making of any
dividend or distribution to holders of Common Stock, whether payable in cash,
securities or other property (other than dividends or distributions payable
solely in Common Stock), the holder of each share of Series B Preferred Stock on
such record date shall be entitled to receive an equivalent dividend or
distribution based on the number of shares of Common Stock into which such share
of Series B Preferred Stock is convertible on such record date.
(e) So long as any shares of the Series B Preferred Stock are outstanding,
no Junior Securities shall be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation, directly or
indirectly (except by conversion into or exchange for Junior Securities) or any
cash dividend made on any Junior Security other than the ordinary dividend on
the Corporation's Common Stock as determined and declared by the Board in which
the holders of the Series B Preferred Stock participate in accordance with
subparagraph (d) above, unless in each case (i) the full dividends on all
outstanding shares of the Series B Preferred Stock shall have been paid or set
apart for payment for all past Dividend Periods and (ii) sufficient funds shall
have been paid or set apart for the payment of the dividend for the current
Dividend Period with respect to the Series B Preferred Stock.
(3) Liquidation Preference.
----------------------
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus) shall
be made to or set apart for the holders of Junior Securities, the holder of each
share of Series B Preferred Stock shall be entitled to receive an amount per
share equal to the Liquidation Value of such share on the date of distribution,
and such holders shall not be entitled to any further payment. If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of the shares
of Series B Preferred Stock shall be insufficient to pay in full the
preferential amount aforesaid, then such assets, or the proceeds thereof, shall
be distributed among the holders of shares of Series B Preferred Stock ratably
in accordance with the respective amounts that would
be payable on such shares of Series B Preferred Stock if all amounts payable
thereon were paid in full. Solely for the purposes of this paragraph 3, neither
the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation nor the consolidation or merger of the Corporation
with or into one or more other entities shall be deemed to be a liquidation,
dissolution or winding-up of the Corporation.
(b) After payment shall have been made in full to the holders of the
Series B Preferred Stock, as provided in this paragraph 3, any other series or
class or classes of Junior Securities shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any and all assets
remaining to be paid or distributed to holders of capital stock of the
Corporation, and the holders of the Series B Preferred Stock shall not be
entitled to share therein.
(4) Conversion.
----------
(a) (i) Subject to the provisions of this paragraph 4, each holder of
shares of Series B Preferred Stock shall have the right, at any time and from
time to time, at such holder's option, to convert its outstanding shares of
Series B Preferred Stock, in whole or in part, into fully paid and non-
assessable shares of Common Stock. Subject to subparagraph 4(a)(ii) below, the
number of shares of Common Stock deliverable upon conversion of one share of
Series B Preferred Stock shall be equal to (i) the Accreted Value of such share
on the date of conversion, plus any dividends accrued to such date (whether or
not earned or declared) since the end of the previous Dividend Period, divided
by (ii) the Conversion Price on such date. No notice delivered by the
Corporation pursuant to paragraph 5 will limit in any way any holder's rights to
convert pursuant to this paragraph 4(a). In order to exercise the conversion
privilege set forth in paragraph 4(a), the holder of the shares of Series B
Preferred Stock to be converted shall surrender the certificate representing
such shares at the office of the Corporation, with a written notice of election
to convert completed and signed, specifying the number of shares to be
converted. Each conversion pursuant to paragraph 4(a) shall be deemed to have
been effected immediately prior to the close of business on the date on which
the certificates for shares of Series B Preferred Stock shall have been
surrendered and such notice received by the Corporation as aforesaid, and the
person in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder of record of the shares of Common Stock represented thereby at
such time on such date. Effective upon such conversion, the shares of Series B
Preferred Stock so converted shall no longer be deemed to be outstanding, and
all rights of a holder with respect to such shares surrendered for conversion
shall immediately terminate except the right to receive the Common Stock and
other amounts payable pursuant to this paragraph 4.
(ii) In connection with any conversion of shares of Series B Preferred
Stock into shares of Common Stock occurring within 30 days of the Corporation's
delivery of a Change of Control Notice pursuant to the provisions of paragraph
4(m), the number of shares of Common Stock deliverable upon conversion of one
share of Series B
Preferred Stock shall be equal to (x) the Change of Control Amount, divided by
(y) the Conversion Price on such date.
(b) (i) Unless the shares issuable on conversion pursuant to this
paragraph 4 are to be issued in the same name as the name in which such shares
of Series B Preferred Stock are registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in form reasonably
satisfactory to the Corporation, duly executed by the holder or the holder's
duly authorized attorney and an amount sufficient to pay any transfer or similar
tax.
(ii) As promptly as possible, but in any event within 5 days, after
the surrender by the holder of the certificates for shares of Series B Preferred
Stock as aforesaid, the Corporation shall issue and shall deliver to such
holder, or on the holder's written order to the holder's transferee, a
certificate or certificates for the whole number of shares of Common Stock
issuable upon the conversion of such shares in accordance with the provisions of
this paragraph 4.
(iii) All shares of Common Stock delivered upon conversion of the
Series B Preferred Stock will upon delivery be duly and validly issued and fully
paid and non-assessable, free of all liens and charges and not subject to any
preemptive rights.
(c) (i) Upon delivery to the Corporation by a holder of shares of Series
B Preferred Stock of a notice of election to convert pursuant to paragraph 4(a)
above, the right of the Corporation to purchase such shares of Series B
Preferred Stock shall terminate, regardless of whether a notice has been mailed
pursuant to paragraph 5.
(ii) From the date of delivery by a holder of shares of Series B
Preferred Stock of such notice of election to convert, in lieu of dividends on
such Series B Preferred Stock pursuant to paragraph 2, such Series B Preferred
Stock shall participate equally and ratably with the holders of shares of Common
Stock in all dividends paid on the Common Stock.
(iii) Except as provided herein, the Corporation shall make no payment
or adjustment for accrued dividends on shares of Series B Preferred Stock,
whether or not in arrears, on conversion of such shares or for dividends in cash
on the shares of Common Stock issued upon such conversion.
(d) (i) The Corporation shall at all times reserve and keep available,
free from preemptive rights, such number of its authorized but unissued shares
of Common Stock as shall be required for the purpose of effecting conversion of
the Series B Preferred Stock.
(ii) Prior to the delivery of any securities which the Corporation
shall be obligated to deliver upon conversion of the Series B Preferred Stock,
the Corporation shall comply with all applicable federal and state laws and
regulations which require action to be taken by the Corporation.
(e) The Corporation will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
Common Stock on conversion of the Series B Preferred Stock pursuant hereto;
provided that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock in a name other than that of the holder of the Series B
Preferred Stock to be converted and no such issue or delivery shall be made
unless and until the person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or has established, to the satisfaction
of the Corporation, that such tax has been paid.
(f) In connection with the conversion of any shares of Series B Preferred
Stock, no fractional shares of Common Stock shall be issued, but in lieu thereof
the Corporation shall pay to the holder thereof the value of such share in cash
as determined by reference to the Daily Price as of the date of conversion of
such fractional share.
(g) Conversion Price.
----------------
(i) In order to prevent dilution of the conversion rights granted
under this paragraph 4, the Conversion Price shall be subject to adjustment from
time to time pursuant to this paragraph (g).
(ii) Subject to subparagraph (g) (iv) below, if and whenever on or
after the original date of issuance of the Series B Preferred Stock the
Corporation issues or sells, or in accordance with paragraph (h) is deemed to
have issued or sold, any shares of its Common Stock without consideration or at
a price per share less than the Conversion Price in effect immediately prior to
such issuance or sale (or deemed issuance or sale), then in each such case, the
Conversion Price, upon each such issuance or sale, except as hereinafter
provided, shall be lowered so as to be equal to an amount determined by
multiplying the Conversion Price in effect immediately prior to such issuance or
sale by the following fraction:
P + N
-------
P + F
where
P = the number of shares of Common Stock outstanding immediately
prior to such issuance or sale, assuming the exercise or
conversion of all outstanding securities exercisable for or
convertible into Common Stock at any time on or after the date
of such calculation
N = the number of shares of Common Stock which the net aggregate
consideration, if any, received by the Corporation for the
total number of such additional shares of Common Stock so
issued or sold would purchase at the Conversion Price in effect
immediately prior to such issuance or sale
F = the number of additional shares of Common Stock so issued or
sold
(iii) Notwithstanding the foregoing, there shall be no adjustment in
the Conversion Price as a result of (A) any issue or sale (or deemed issue or
sale) of Options to acquire shares of Common Stock to employees of the
Corporation, or shares of Common Stock issuable pursuant to the exercise of such
Options, pursuant to stock option plans approved by the Corporation's Board of
Directors so long as the exercise price of such Options is not less than the
Current Market Price Per Common Share on the date such Options are issued as
determined by the Corporation's Board of Directors in its good faith judgment,
or any issuance of shares of Common Stock pursuant to the exercise of Options
outstanding as of July 11, 2000; (B) the issuance of up to 3,716,400 shares of
Common Stock to the sellers in connection with the closing of the Corporation's
acquisition of R&B Communications, Inc. and the issuance to employees of R&B
Communications, Inc. of options to acquire shares of Common Stock (not exceeding
65,000 shares in the aggregate) pursuant to the terms set forth in Exhibit G to
the Agreement and Plan of Merger, dated as of June 16, 2000, by and among R&B
Communications, Inc., R&B Combination Company and the Corporation; (C) Common
Stock issued pursuant to and in accordance with the terms of the Corporation's
Dividend Reinvestment Plan (so long as such shares are issued at a price which
is no less than the Daily Price on the date of issuance) or 1997 Employee Stock
Purchase Plan, each as in effect as of July 11, 2000; and (D) the issuance of up
to 600,000 shares of Common Stock in connection with the purchase by the
Corporation of minority interests in the Virginia PCS Alliance, the West
Virginia PCS Alliance and/or the Virginia RSA 6 Cellular Limited Partnership
(assuming that the aggregate purchase price for all such minority interests does
not exceed $21 million).
(h) Effect on Conversion Price of Certain Events. For purposes of
--------------------------------------------
determining the adjusted Conversion Price under paragraph (g), the following
shall be applicable:
(i) Issuance of Rights or Options. Except for Options granted in
-----------------------------
accordance with the provisions of paragraph (g)(iii) above or in accordance with
the Corporation's Rights Agreement dated as of February 26, 2000, if the
Corporation in any manner grants or sells any Options and the price per share
for which Common Stock is issuable upon the exercise of such Options, or upon
conversion or exchange of any Convertible Securities issuable upon exercise of
such Options, is less than the Conversion Price in effect immediately prior to
the time of the granting or sale of such Options, then the total maximum number
of shares of Common Stock issuable upon the exercise of such Options or upon
conversion or exchange of the total maximum amount of such Convertible
Securities issuable upon the exercise of such Options shall be deemed to be
outstanding and to have been issued and sold by the Corporation at the time of
the granting or sale of such Options for such price per share. For purposes of
this paragraph, the "price per share for which Common Stock is issuable" shall
be determined by dividing (A) the total amount, if any, received or receivable
by the Corporation as consideration for the granting or sale of such Options,
plus the minimum aggregate amount of additional consideration payable to the
Corporation upon exercise of all such
Options, plus in the case of such Options which relate to Convertible
Securities, the minimum aggregate amount of additional consideration, if any,
payable to the Corporation upon the issuance or sale of such Convertible
Securities and the conversion or exchange thereof, by (B) the total maximum
number of shares of Common Stock issuable upon the exercise of such Options or
upon the conversion or exchange of all such Convertible Securities issuable upon
the exercise of such Options. No further adjustment of the Conversion Price
shall be made when Convertible Securities are actually issued upon the exercise
of such Options or when Common Stock is actually issued upon the exercise of
such Options or the conversion or exchange of such Convertible Securities.
(ii) Issuance of Convertible Securities. If the Corporation in any
----------------------------------
manner issues or sells any Convertible Securities and the price per share for
which Common Stock is issuable upon conversion or exchange thereof is less than
(a) the Conversion Price in effect immediately prior to the time of such issue
or sale, then the maximum number of shares of Common Stock issuable upon
conversion or exchange of such Convertible Securities shall be deemed to be
outstanding and to have been issued and sold by the Corporation at the time of
the issuance or sale of such Convertible Securities for such price per share.
For the purposes of this paragraph, the "price per share for which Common Stock
is issuable" shall be determined by dividing (A) the total amount received or
receivable by the Corporation as consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the conversion or
exchange thereof, by (B) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment of the Conversion Price shall be made when Common Stock is
actually issued upon the conversion or exchange of such Convertible Securities,
and if any such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustments of the Conversion Price had been
or are to be made pursuant to other provisions of this paragraph (h), no further
adjustment of the Conversion Price shall be made by reason of such issue or
sale.
(iii) Change in Option Price or Conversion Rate. Except for Options
-----------------------------------------
granted in accordance with the provisions of paragraph (g)(iii) above or in
accordance with the Corporation's Rights Agreement dated as of February 26,
2000, if the purchase price provided for in any Options, the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities or the rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock changes at any time, the
Conversion Price in effect at the time of such change shall be immediately
adjusted to the Conversion Price which would have been in effect at such time
had such Options or Convertible Securities still outstanding provided for such
changed purchase price, additional consideration or conversion rate, as the case
may be, at the time initially granted, issued or sold; provided that if such
adjustment would result in an increase of the Conversion Price then in effect,
such adjustment shall not be effective until 30 days after written notice
thereof has been given by the Corporation to all holders of the Series B
Preferred Stock. For purposes of paragraph (h), if the terms of any Option or
Convertible Security which was outstanding as of the date of issuance of the
Series B Preferred Stock are changed in the manner described in the immediately
preceding sentence, then such Option or Convertible Security and the Common
Stock deemed issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such change; provided that no such
change shall at any time cause the Conversion Price hereunder to be increased.
(iv) Treatment of Expired Options and Unexercised Convertible
--------------------------------------------------------
Securities. Upon the expiration of any Option or the termination of any right to
- ----------
convert or exchange any Convertible Security without the exercise of any such
Option or right, the Conversion Price then in effect hereunder shall be adjusted
immediately to the Conversion Price which would have been in effect at the time
of such expiration or termination had such Option or Convertible Security, to
the extent outstanding immediately prior to such expiration or termination,
never been issued; provided that if such expiration or termination would result
in an increase in the Conversion Price then in effect, such increase shall not
be effective until 30 days after written notice thereof has been given to all
holders of the Series B Preferred Stock. For purposes of paragraph (h), the
expiration or termination of any Option or Convertible Security which was
outstanding as of the date of issuance of the Series B Preferred Stock shall not
cause the Conversion Price hereunder to be adjusted unless, and only to the
extent that, a change in the terms of such Option or Convertible Security caused
it to be deemed to have been issued after the date of issuance of the Series B
Preferred Stock.
(v) Calculation of Consideration Received. If any Common Stock,
-------------------------------------
Option or Convertible Security is issued or sold or deemed to have been issued
or sold for cash, the consideration received therefor shall be deemed to be the
amount received by the Corporation therefor. If any Common Stock, Option or
Convertible Security is issued or sold for a consideration other than cash, the
amount of the consideration other than cash received by the Corporation shall be
the fair value of such consideration, except where such consideration consists
of securities, in which case the amount of consideration received by the
Corporation shall be the Market Price thereof as of the date of receipt. If any
Common Stock, Option or Convertible Security is issued to the owners of the non-
surviving entity in connection with any merger in which the Corporation is the
surviving Corporation, the amount of consideration therefor shall be deemed to
be the fair value of such portion of the net assets and business of the non-
surviving entity as is attributable to such Common Stock, Option or Convertible
Security, as the case may be. The fair value of any consideration other than
cash and securities shall be determined jointly by the Corporation and the
holders of a majority of the outstanding Series B Preferred Stock. If such
parties are unable to reach agreement within a reasonable period of time, the
fair value of such consideration shall be determined by an independent appraiser
experienced in valuing such type of consideration jointly selected by the
Corporation and the holders of a majority of the outstanding Series B Preferred
Stock. The determination of such appraiser shall be final and binding upon the
parties, and the fees and expenses of such appraiser shall be borne by the
Corporation.
(vi) Integrated Transactions. In case any Option is issued in
-----------------------
connection with the issue or sale of other securities of the Corporation,
together comprising one integrated transaction in which no specific
consideration is allocated to such Option by
the parties thereto, the Option shall be deemed to have been issued for a
consideration of $.01.
(vii) Record Date. If the Corporation takes a record of the
-----------
holders of Common Stock for the purpose of entitling them (a) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (b) to subscribe for or purchase Common Stock,
Options or Convertible Securities, then such record date shall be deemed to
be the date of the issue or sale of the shares of Common Stock deemed to
have been issued or sold upon the declaration of such dividend or upon the
making of such other distribution or the date of the granting of such right
of subscription or purchase, as the case may be.
(i) Subdivision or Combination of Common Stock. If the Corporation at
------------------------------------------
any time subdivides (by any stock split, stock dividend, recapitalization
or otherwise) one or more classes of its outstanding shares of Common Stock
into a greater number of shares, the Conversion Price in effect immediately
prior to such subdivision shall be proportionately reduced, and if the
Corporation at any time combines (by reverse stock split or otherwise) one
or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior to such
combination shall be proportionately increased.
(j) Reorganization, Reclassification, Consolidation, Merger or Sale.
---------------------------------------------------------------
Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Corporation's assets or
other transaction, in each case which is effected in such a manner that the
holders of Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock, is referred to herein as an "Organic Change".
Prior to the consummation of any Organic Change, the Corporation shall make
appropriate provisions (in form and substance reasonably satisfactory to
the holders of a majority of the Series B Preferred Stock then outstanding)
to insure that each of the holders of Series B Preferred Stock shall
thereafter have the right to acquire and receive, in lieu of or in addition
to (as the case may be) the shares of Conversion Stock immediately
theretofore acquirable and receivable upon the conversion of such holder's
Series B Preferred Stock, such shares of stock, securities or assets as
such holder would have received in connection with such Organic Change if
such holder had converted its Series B Preferred Stock immediately prior to
such Organic Change. In each such case, the Corporation shall also make
appropriate provisions (in form and substance reasonably satisfactory to
the holders of a majority of the Series B Preferred Stock then outstanding)
to insure that the provisions of paragraph 4 hereof shall thereafter be
applicable to the Series B Preferred Stock (including, in the case of any
such consolidation, merger or sale in which the successor entity or
purchasing entity is other than the Corporation, an immediate adjustment of
the Conversion Price pursuant to the provisions of this paragraph 4 to give
effect to the value for the Common Stock reflected by the terms of such
consolidation, merger or sale, and a corresponding immediate adjustment in
the number of shares of Conversion Stock acquirable and receivable upon
conversion of Series B Preferred Stock, if the value so reflected is less
than the Conversion Price in effect immediately prior to such
consolidation, merger or sale). The Corporation shall not effect any such
consolidation,
merger or sale, unless prior to the consummation thereof, the successor
entity (if other than the Corporation) resulting from consolidation or
merger or the entity purchasing such assets assumes by written instrument
(in form and substance reasonably satisfactory to the holders of a majority
of the Series B Preferred Stock then outstanding), the obligation to
deliver to each such holder such shares of stock, securities or assets as,
in accordance with the foregoing provisions, such holder may be entitled to
acquire.
(k) Certain Events. If any event occurs of the type contemplated by
--------------
the provisions of paragraph 4 but not expressly provided for by such
provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity
features), then the Corporation's Board of Directors shall make an
appropriate adjustment in the Conversion Price so as to protect the rights
of the holders of Series B Preferred Stock; provided that no such
adjustment shall increase the Conversion Price as otherwise determined
pursuant to paragraph 4 or decrease the number of shares of Conversion
Stock issuable upon conversion of each share of Series B Preferred Stock.
(l) Notices.
-------
(i) Immediately upon any adjustment of the Conversion Price, the
Corporation shall give written notice thereof to all holders of Series B
Preferred Stock, setting forth in reasonable detail and certifying the
calculation of such adjustment.
(ii) The Corporation shall give written notice to all holders of
Series B Preferred Stock at least 20 days prior to the date on which the
Corporation closes its books or takes a record (a) with respect to any
dividend or distribution upon Common Stock (other than the Corporation's
ordinary Common Stock dividend), (b) with respect to any pro rata
subscription offer to holders of Common Stock or (c) for determining rights
to vote with respect to any Organic Change, dissolution or liquidation.
(iii)The Corporation shall also give written notice to the
holders of Series B Preferred Stock at least 20 days prior to the date on
which any Organic Change shall take place.
(m) Change of Control Offer.
-----------------------
(i) Promptly after the occurrence of a Change of Control (the
date of such occurrence being the "Change of Control Date"), the
----------------------
Corporation shall commence (or cause to be commenced) an offer to purchase
all outstanding shares of Series B Preferred Stock pursuant to the terms
described in paragraph (m) (iv) (the "Change of Control Offer") at a
-----------------------
purchase price equal to the Change of Control Amount on the Change of
Control Payment Date, and shall purchase (or cause the purchase of) any
shares of Series B Preferred Stock tendered in the Change of Control Offer
pursuant to the terms hereof.
(ii) At the option of each holder of Series B Preferred Stock,
the Change of Control Amount payable to such holder shall be payable (i) in
cash, (ii) in a number of shares of Common Stock (or the securities of the
entity into which the Common Stock became converted or was exchanged in
connection with the Change of
Control) determined by dividing the portion of the Change of Control Amount
that would otherwise be paid in cash (and which the holder has elected to
receive in shares) by the Conversion Price in effect as of the date on
which the Change of Control occurred (which will determine the number of
shares of the Corporation that the holder would receive, which shall then
be used to determine the number of shares of the successor entity, if
applicable, that the holder is entitled to receive), or (iii) in a
combination of cash and such shares.
(iii) If a holder elects to receive the Change of Control Amount
in cash, prior to the mailing of the notice referred to in paragraph
(m)(iv), but in any event within 20 days following the date on which a
Change of Control has occurred, the Corporation shall (A) promptly
determine if the purchase of the Series B Preferred Stock for cash would
violate or constitute a default under the indebtedness of the Corporation
and (B) either shall repay to the extent necessary all such indebtedness or
preferred stock of the Corporation that would prohibit the repurchase of
the Series B Preferred Stock pursuant to a Change of Control Offer or
obtain any requisite consents or approvals under instruments governing any
indebtedness or preferred stock of the Corporation to permit the repurchase
of the Series B Preferred Stock for cash. The Corporation shall first
comply with this paragraph (m)(iii) before it shall repurchase for cash any
Series B Preferred Stock pursuant to this paragraph (m).
(iv) Within 20 days following the date on which a Change of
Control has occurred, the Corporation shall send, by first-class mail,
postage prepaid, a notice (a "Change of Control Notice") to each holder of
------------------------
Series B Preferred Stock. If applicable, such notice shall contain all
instructions and materials necessary to enable such holders to tender
Series B Preferred Stock pursuant to the Change of Control Offer. Such
notice shall state:
(A) that a Change of Control has occurred, that a Change of
Control Offer is being made pursuant to this paragraph (m) and that
all Series B Preferred Stock validly tendered and not withdrawn will
be accepted for payment;
(B) the purchase price (including the amount of accrued
dividends, if any) and the purchase date (which must be no earlier
than 30 days nor later than 60 days from the date such notice is
mailed, other than as may be required by law) (the "Change of Control
-----------------
Payment Date");
------------
(C) that any shares of Series B Preferred Stock not tendered will
continue to accrue dividends;
(D) that, unless the Corporation defaults in making payment
therefor, any share of Series B Preferred Stock accepted for payment
pursuant to the Change of Control Offer shall cease to accrue
dividends after the Change of Control Payment Date;
(E) that holders electing to have any share of Series B Preferred
Stock purchased pursuant to a Change of Control Offer will be required
to surrender
stock certificates representing such shares of Series B Preferred
Stock, properly endorsed for transfer, together with such other
customary documents as the Corporation and the Transfer Agent may
reasonably request to the Transfer Agent and registrar for the Series
B Preferred Stock at the address specified in the notice prior to the
close of business on the business day prior to the Change of Control
Payment Date;
(F) that holders will be entitled to withdraw their election if
the Corporation receives, not later than five business days prior to
the Change of Control Payment Date, a telegram, facsimile transmission
or letter setting forth the name of the holder, the number of shares
of Series B Preferred Stock the holder delivered for purchase and a
statement that such holder is withdrawing its election to have such
shares of Series B Preferred Stock purchased;
(G) that holders who tender only a portion of the shares of
Series B Preferred Stock represented by a certificate delivered will,
upon purchase of the shares tendered, be issued a new certificate
representing the unpurchased shares of Series B Preferred Stock; and
(H) the circumstances and relevant facts regarding such Change
of Control (including information with respect to pro forma historical
income, cash flow and capitalization after giving effect to such
Change of Control).
(v) The Corporation will comply with any tender offer rules
under the Exchange Act which may then be applicable in connection with any
offer made by the Corporation to repurchase the shares of Series B
Preferred Stock as a result of a Change of Control. To the extent that the
provisions of any securities laws or regulations conflict with provisions
hereof, the Corporation shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligation
hereunder by virtue thereof.
(vi) On the Change of Control Payment Date, the Corporation
shall (A) accept for payment the shares of Series B Preferred Stock validly
tendered pursuant to the Change of Control Offer, (B) pay to the holders of
shares so accepted the purchase price therefor, at the option of each such
holder, in cash or Common Stock (or the securities of the entity into which
the Common Stock became converted in connection with the Change of Control)
as provided in paragraph (ii) above and (C) cancel each surrendered
certificate and retire the shares represented thereby. Unless the
Corporation defaults in the payment for the shares of Series B Preferred
Stock tendered pursuant to the Change of Control Offer, dividends will
cease to accrue with respect to the shares of Series B Preferred Stock
tendered and all rights of holders of such tendered shares will terminate,
except for the right to receive payment therefor on the Change of Control
Payment Date.
(vii) To accept the Change of Control Offer, the holder of a
share of Series B Preferred Stock shall deliver, prior to the close of
business on the business day prior to the Change of Control Payment Date,
written notice to the Corporation (or an
agent designated by the Corporation for such purpose) of such holder's
acceptance, together with certificates evidencing the shares of Series B
Preferred Stock with respect to which the Change of Control Offer is being
accepted, duly endorsed for transfer.
(n) Certain Mergers. In connection with any consolidation with or
---------------
merger with or into, any person in a transaction where the Common Stock is
converted into or exchanged for securities of such person or an affiliate
of such person, the Corporation covenants that as a condition precedent to
the consummation of any such consolidation or merger it shall provide the
holders of the Series B Preferred Stock with a certificate, in form and
substance satisfactory to the holders of a majority of the Series B Senior
Preferred Stock signed by a duly authorized officer of the Corporation
indicating that the person issuing such securities will be organized and
existing under the laws of a jurisdiction which allows for the issuance of
preference stock and that the Series B Preferred Stock shall be converted
into or exchanged for and shall become shares of such person having in
respect of such person substantially the same powers, preference and
relative participating, optional or other special rights and the
qualifications, limitations or restrictions thereon that the Series B
Preferred Stock had immediately prior to such transaction.
(o) Conversion at the Option of the Corporation. If on any date after
-------------------------------------------
the fifth anniversary of the date of issuance of the Series B Preferred
Stock, the Daily Price has been at least $61.50 per share (as adjusted for
any stock splits, stock dividends, reverse stock splits, share
consolidations or other similar transactions) during any 30 trading days
out of any consecutive 45 trading day period, the Corporation may elect, by
written notice delivered to the Transfer Agent (with a copy to each holder
of Series B Preferred Stock), no later than five Market Days after such
date, to cause all outstanding shares of Series B Preferred Stock to be
converted into fully paid and nonassessable shares of Common Stock. Any
such conversion shall be deemed to have been effected, without further
action by any party, immediately prior to the close of business on the date
such notice is received by the Transfer Agent. The number of shares of
Common Stock deliverable upon conversion of one share of Series B Preferred
Stock shall be equal to (i) the Accreted Value of such share on the date of
conversion, plus any dividends accrued to such date (whether or not earned
or declared) since the end of the previous Dividend Period, divided by (ii)
the Conversion Price on such date.
(p) Reacquired Shares. Any shares of Series B Preferred Stock
-----------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of preferred stock and may be reissued as part of a new series of
preferred stock to be created by an amendment or amendments of the
Corporation's articles of incorporation adopted by the Board of Directors,
subject to the conditions and restrictions on issuance set forth herein.
(5) Put/Conversion.
--------------
(a) At any time on or after (i) the date which is three months after
the stated maturity date of the Corporation's senior notes due 2010 or (ii)
January 11, 2011, if the
Corporation has not issued such senior notes, the holders of a majority of
the shares of Series B Preferred Stock may, by written notice (the "Put
---
Notice") to the Corporation, require the Corporation to purchase all of the
------
outstanding shares of Series B Preferred Stock at a price per share equal
to the Accreted Value on the date of purchase, plus all dividends accrued
to such date (whether or not earned or declared) since the most recent
Dividend Payment Date (the "Put Right"). The Put Notice shall state the
---------
date of purchase, which shall be no earlier than 30 days from the date of
the Put Notice. The purchase price will be payable in cash.
(b) Upon receipt of the Put Notice, the Corporation shall notify, by
first class mail, postage prepaid, each holder of record of the shares to
be purchased at such holder's address as the same appears on the stock
register of the Corporation; provided that neither the failure to give such
notice nor any defect therein shall affect the validity of the giving of
notice for the purchase of any share of Series B Preferred Stock to be
purchased except as to the holder to whom the Corporation has failed to
give said notice or except as to the holder whose notice was defective.
Each such notice shall state: (i) the date of purchase; (ii) the purchase
price; (iii) the place or places where certificates for such shares are to
be surrendered for payment of the purchase price; and (iv) that dividends
on the shares to be purchased will cease to accrue on such date of
purchase.
(c) Notice having been mailed as aforesaid, from and after the
purchase date (unless default shall be made by the Corporation in providing
money for the payment of the purchase price), dividends on the shares of
Series B Preferred Stock shall cease to accrue, and all rights of the
holders thereof as stockholders of the Corporation (except the right to
receive from the Corporation the purchase price) shall cease. Upon
surrender in accordance with said notice of the certificates for any shares
so purchased (properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation shall so require and the notice shall so
state), such share shall be purchased by the Corporation at the purchase
price aforesaid.
(d) For the avoidance of doubt, nothing in this paragraph 5 shall
restrict the right of the holders of Series B Preferred Stock to convert
their shares of Series B Preferred Stock into shares of Common Stock prior
to such holders acceptance of the purchase price.
(e) If a Put Notice has not been delivered to the Corporation on or
before the date which is one year from the applicable date set forth in
paragraph 5(a) above, then the Corporation shall have the right to convert
all, but not less than all, of the outstanding shares of Series B Preferred
Stock into fully paid and non-assessable shares of Common Stock pursuant to
the provisions of paragraph 4.
(f) The Corporation shall notify, by first class mail, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
date of conversion, each holder of record of the shares to be converted at
such holder's address as the same appears on the stock register of the
Corporation; provided that neither the failure to give such notice nor any
defect therein shall affect the validity of the giving of notice for the
conversion of any share of Series B Preferred Stock to be converted except
as to the holder to whom the
Corporation has failed to give said notice or except as to the holder whose
notice was defective. Each such notice shall state: (i) the conversion
date; (ii) the number of shares of Common Stock and the cash, if any, into
which each share of Series B Preferred Stock will convert; (iii) the place
or places where certificates for shares of Series B Preferred Stock are to
be surrendered for conversion; and (iv) that dividends on the shares to be
converted will cease to accrue on such conversion date.
(6) Voting Rights.
-------------
(a) Except as required by law, each holder of Series B Preferred Stock
shall be entitled to vote on all matters and shall be entitled to that
number of votes equal to the number of shares of Common Stock into which
such holder's shares of Series B Preferred Stock could be converted,
pursuant to the provisions of paragraph 4 hereof, on the record date for
the determination of shareholders entitled to vote on such matter or, if no
such record date is established, on the date such vote is taken or any
written consent of shareholders is solicited. Except as otherwise
expressly provided herein or as required by law, the holders of shares of
Series B Preferred Stock and Common Stock shall vote together as a single
class on all matters.
(b) For so long as at least 45,000 shares of Series B Preferred Stock
remain outstanding, in the election of directors of the Corporation, the
holders of the Series B Preferred Stock, voting separately as a single
class to the exclusion of all other classes of the Corporation's capital
stock and with each Share of Series B Preferred Stock entitled to one vote,
shall be entitled to elect two (2) directors to serve on the Corporation's
Board of Directors until such directors' successors are duly elected by the
holders of the Series B Preferred Stock or such directors are removed from
office by the holders of the Series B Preferred Stock. If at any time there
are less than 45,000 shares of Series B Preferred Stock outstanding, but
for so long as at least 11,250 shares of Series B Preferred Stock remain
outstanding, in the election of directors of the Corporation, the holders
of the Series B Preferred Stock, voting separately as a single class to the
exclusion of all other classes of the Corporation's capital stock and with
each Share of Series B Preferred Stock entitled to one vote, shall be
entitled to elect one (1) director to serve on the Corporation's Board of
Directors until such director's successor is duly elected by the holders of
the Series B Preferred Stock or such director is removed from office by the
holders of the Series B Preferred Stock. If the holders of the Series B
Preferred Stock for any reason fail to elect anyone to fill any such
directorship, such position shall remain vacant until such time as the
holders of the Series B Preferred Stock elect a director to fill such
position and shall not be filled by resolution or vote of the Corporation's
Board of Directors or the Corporation's other stockholders. For so long as
the holders of Series B Preferred Stock are entitled to elect at least one
director, the Corporation's Board of Directors shall consist of not more
than eleven (11) directors without the prior written approval of the
holders of a majority of the shares of the Series B Preferred Stock. For
so long as the holders of Series B Preferred Stock are entitled to elect at
least one director, at least one director so elected who shall be specified
by the holders of a majority of the shares of Series B Preferred Stock and
who may specify a different director for each such committee shall be
appointed to each committee of the Corporation's Board of Directors.
(c) In addition, so long as any of the Series B Preferred Stock is
outstanding, the affirmative vote of the holders of (x) all of the
outstanding shares of Series B Preferred Stock shall be necessary to alter
or change the preferences, rights or powers of the Series B Preferred Stock
and (y) a majority of the outstanding shares of Series B Preferred Stock,
voting together as a single class, shall be necessary to: (i) increase or
decrease the authorized number of shares of Series B Preferred Stock, (ii)
amend, alter, repeal or waive any provision of the Restated Articles of
Incorporation (including any articles of amendment and whether by
amendment, merger or otherwise) or the By-laws so as to adversely affect
the preferences, rights or powers of the Series B Preferred Stock,
including, without limitation, the voting powers, dividend rights and
liquidation preference of the Series B Preferred Stock, or change the
Series B Preferred Stock into any other securities (other than as required
by paragraph 4(j)), cash or other property, (iii) issue any additional
Series B Preferred Stock or create, authorize or issue any capital stock
that ranks prior (whether with respect to dividends or upon liquidation,
dissolution, winding up or otherwise) to or pari passu with the Series B
Preferred Stock, or (iv) redeem or repurchase for cash any Junior
Securities
(7) Miscellaneous. If any holder of Series B Preferred Stock elects to
-------------
receive the Change of Control Amount in shares of Common Stock in connection
with a Change of Control Offer pursuant to paragraph 4(m), the Corporation shall
comply with all statutes, rules and regulations applicable thereto at that time,
including any and all regulations of the principal trading market on which the
Common Stock is then trading, including, if necessary, any shareholder approval
requirement under NASD Rule 4460(i), as it may be amended from time to time.
(8) Definitions. The following terms, as used in this Appendix II, shall
----------- -----------
have the following meanings:
"Accreted Value" equals, with respect to one share of Series B
--------------
Preferred Stock, $1,000, adjusted for the amount of any dividends added to (or
subtracted from) the Accreted Value in accordance with paragraph 2(b) (which
aggregate amount shall be subject to adjustment whenever there shall occur a
stock split, combination, re-classification or other similar event involving the
Series B Preferred Stock).
"Applicable Percentage" is defined in paragraph 2(c) hereof.
---------------------
"Change of Control" means: (i) the sale, lease, transfer, conveyance
-----------------
or other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all the assets of the
Corporation and its subsidiaries taken as a whole to any "person" (as such term
is used in Section 13(d)(3) of the Exchange Act), (ii) the consummation of any
transaction (including any merger or consolidation) the result of which is that
any "person" (as defined above), becomes the beneficial owner (as determined in
accordance with Rules 13d-3 and 13d-5 under the Exchange Act except that a
person will be deemed to have beneficial ownership of all shares that such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 40% of
the Voting Securities of the Corporation, or (iii) the first day on which a
majority of the members of the board of directors are not Continuing Directors.
"Change of Control Amount" means, with respect to one share of Series
------------------------
B Preferred Stock, 101% of the Accreted Value per share plus any dividends
accrued to such date (whether or not earned or declared) since the end of the
previous Dividend Period; provided, however, that if the Change of Control
-------- -------
occurs prior to the fifth anniversary of the date of issue of any share of
Series B Preferred Stock, the Accreted Value shall be calculated assuming the
Change of Control had occurred on the fifth anniversary of the date of issue of
such share of Series B Preferred Stock (and assuming that no cash dividends had
been paid on such share from the actual date of the Change of Control through
the fifth anniversary of the date of issue).
"Continuing Directors" means individuals who constituted the Board of
--------------------
Directors of the Corporation on July 11, 2000 (the "Incumbent Directors");
-------------------
provided that any individual becoming a director during any year shall be
considered to be an Incumbent Director if such individual's election,
appointment or nomination was recommended or approved by at least two-thirds of
the other Incumbent Directors continuing in office following such election,
appointment or nomination present, in person or by telephone, at any meeting of
the Board of Directors of the Corporation, after the giving of a sufficient
notice to each Incumbent Director so as to provide a reasonable opportunity for
such Incumbent Directors to be present at such meeting.
"Conversion Price" means $41.00, subject to adjustment from time to
----------------
time as provided in paragraph 4.
"Conversion Stock" means shares of the Corporation's Common Stock, no
----------------
par value per share; provided that if there is a change such that the securities
issuable upon conversion of the Series B Preferred Stock are issued by an entity
other than the Corporation or there is a change in the type or class of
securities so issuable, then the term "Conversion Stock" shall mean one share of
the security issuable upon conversion of the Series B Preferred Stock if such
security is issuable in shares, or shall mean the smallest unit in which such
security is issuable if such security is not issuable in shares.
"Convertible Securities" means any stock or securities directly or
----------------------
indirectly convertible into or exchangeable for Common Stock.
"Current Market Price Per Common Share" means, as of any date, the
-------------------------------------
average (weighted by daily trading volume) of the Daily Prices per share of
Common Stock for the 30 consecutive trading days immediately prior to such date.
"Daily Price" means, as of any date, (i) if the shares of such class
-----------
of Common Stock then are listed and traded on the New York Stock Exchange, Inc.
("NYSE"), the closing price on such date as reported on the NYSE Composite
----
Transactions Tape; (ii) if the shares of such class of Common Stock then are not
listed and traded on the NYSE, the closing price on such date as reported by the
principal national securities exchange on which the shares are listed and
traded; (iii) if the shares of such class of Common Stock then are not listed
and traded on any such securities exchange, the last reported sale price on such
date on the National Market of the National Association of Securities Dealers,
Inc. Automated Quotation System ("NASDAQ"); or (iv) if the shares of such class
------
of Common Stock then are not traded on the NASDAQ National Market, the average
of the highest reported bid and lowest reported asked price on such date as
reported by NASDAQ.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Liquidation Value" on any date means, with respect to one share of
-----------------
Series B Preferred Stock, the greater of (i) the Accreted Value on such date,
plus all dividends (whether or not earned or declared) accrued since the end of
the previous Dividend Period and (ii) the amount that would have been payable on
a number of shares of Common Stock equal to the number of shares of Common Stock
into which a share of Series B Preferred Stock was convertible immediately prior
to such date.
"Market Day" means a day on which the principal national securities
----------
market or exchange on which the Common Stock is listed or admitted for trading
is open for the transaction of business.
"Market Price" of any security means the average of the closing prices
------------
of such security's sales on all securities exchanges on which such security may
at the time be listed, or, if there has been no sales on any such exchange on
any day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such security is not so
listed, the average of the representative bid and asked prices quoted in the
NASDAQ System as of 4:00 P.M., New York time, or, if on any day such security is
not quoted in the NASDAQ System, the average of the highest bid and lowest asked
prices on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor organization,
in each such case averaged over a period of 21 days consisting of the day as of
which "Market Price" is being determined and the 20 consecutive business days
prior to such day. If at any time such security is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the
"Market Price" shall be the fair value thereof determined jointly by the
Corporation and the holders of a majority of the Series B Preferred Stock. If
such parties are unable to reach agreement within a reasonable period of time,
such fair value shall be determined by an independent appraiser experienced in
valuing securities jointly selected by the Corporation and the holders of a
majority of the Series B Preferred Stock. The determination of such appraiser
shall be final and binding upon the parties, and the Corporation shall pay the
fees and expenses of such appraiser.
"Options" means any rights, warrants or options to subscribe for or
-------
purchase Common Stock or Convertible Securities.
"Person" as used herein means any corporation, limited liability
------
company, partnership, trust, organization, association, other entity or
individual.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Transfer Agent" means the transfer agent for the Series B Preferred
--------------
Stock appointed by the Corporation.
"Voting Securities" means securities of the Corporation ordinarily
-----------------
having the power to vote for the election of directors of the Corporation;
provided that when the term "Voting Securities" is used with respect to any
other Person it means the capital stock or other equity interests of any class
or kind ordinarily having the power to vote for the election of directors or
other members of the governing body of such Person.
Appendix III
Senior Cumulative Convertible Preferring Stock, Series C
--------------------------------------------------------
1. Number; Rank. The number of authorized shares of Senior Cumulative
------------
Convertible Preferred Stock, Series C (the "Series C Preferred Stock") shall be
------------------------
137,500. The Series C Preferred Stock shall, with respect to dividend rights
and rights on liquidation, dissolution and winding up, rank (i) pari passu with
the Corporation's Senior Cumulative Convertible Preferred Stock, Series B (the
"Series B Preferred Stock") and (ii) senior to all classes of the Corporation's
- -------------------------
Common Stock, and to each other class of capital stock of the Corporation now or
hereafter established (collectively, the "Junior Securities"). The definition
-----------------
of Junior Securities shall also include any rights or options exercisable for or
convertible into any of the Junior Securities.
2. Dividends.
---------
(a) Each holder of Series C Preferred Stock shall be entitled to receive, in
respect of each Dividend Period, when, as and if declared by the Board of
Directors of the Corporation, out of funds legally available for the payment of
dividends, cumulative dividends in an amount per share equal to the excess (if
any) of (i) the Applicable Percentage of the Accreted Value as of the
immediately preceding Dividend Payment Date (or, for the initial Dividend
Period, as of the date of issuance) over (ii) the amount of any regular cash
dividends per share of Series C Preferred Stock that have been paid during such
Dividend Period pursuant to paragraph 2(d). Subject to the provisions of
paragraph 2(b), dividends paid pursuant to this paragraph 2(a) shall be payable
in cash in arrears semi-annually on June 30 and December 31 of each year (each
of such dates being a "Dividend Payment Date" and each such semi-annual period
---------------------
being a "Dividend Period"). Such dividends shall accrue from the date of issue
---------------
(except that dividends on any amounts added to the Accreted Value pursuant to
paragraph 2(b) shall accrue from the date such amounts are added to the Accreted
Value), whether or not in any Dividend Period or Periods there shall be funds of
the Corporation legally available for the payment of such dividends. Each such
dividend shall be payable to the holders of record of shares of the Series C
Preferred Stock on June 1 and December 1, as they appear on the stock records of
the Corporation at the close of business on such record dates. The date on
which the Corporation initially issues any share of Series C Preferred Stock
shall be deemed to be its "date of issue" regardless of the number of times
transfer of such share is made on the stock records maintained by or for the
Corporation and regardless of the number of certificates which may be issued to
evidence such share.
(b) If dividends are not paid in cash on any Dividend Payment Date for the
immediately preceding Dividend Period (or portion thereof if less than a full
Dividend Period), the unpaid amount shall be added to the Accreted Value for
purposes of calculating succeeding periods' dividends. Notwithstanding the
addition to Accreted Value, the Corporation may pay, when, as and if declared by
the Board of Directors of the Corporation, the amount of dividends previously
added to the Accreted Value pursuant to the preceding sentence, and, if and when
so paid, the Accreted Value shall be reduced by the amount of such payments;
provided that if on the date on which any such dividend is declared the Daily
- --------
Price of a share of Common Stock is equal to or exceeds the then applicable
Conversion Price, then the Corporation shall declare and
pay such dividend in the number of shares of Common Stock determined by dividing
the cash amount of such dividend that the Corporation otherwise would pay by the
then applicable Conversion Price, and the Accreted Value shall be reduced by the
amount of cash the Corporation otherwise would have paid.
(c) The Applicable Percentage for each full Dividend Period for the Series C
Preferred Stock shall be 2.75%. The Applicable Percentage for the initial
Dividend Period, or any other period shorter or longer than a full Dividend
Period, on the Series C Preferred Stock shall be computed on the basis of a per
annum rate of 5.50% and the actual number of days elapsed over twelve 30-day
months and a 360-day year. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the Series C
Preferred Stock that may be in arrears.
(d) In case the Corporation shall fix a record date for the making of any
dividend or distribution to holders of Common Stock, whether payable in cash,
securities or other property (other than dividends or distributions payable
solely in Common Stock), the holder of each share of Series C Preferred Stock on
such record date shall be entitled to receive an equivalent dividend or
distribution based on the number of shares of Common Stock into which such share
of Series C Preferred Stock is convertible on such record date.
(e) So long as any shares of the Series C Preferred Stock are outstanding, no
Junior Securities shall be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation, directly or
indirectly (except by conversion into or exchange for Junior Securities) or any
cash dividend made on any Junior Security other than the ordinary dividend on
the Corporation's Common Stock as determined and declared by the Board in which
the holders of the Series C Preferred Stock participate in accordance with
subparagraph (d) above, unless in each case (i) the full dividends on all
outstanding shares of the Series C Preferred Stock shall have been paid or set
apart for payment for all past Dividend Periods and (ii) sufficient funds shall
have been paid or set apart for the payment of the dividend for the current
Dividend Period with respect to the Series C Preferred Stock.
3. Liquidation Preference.
-----------------------
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus) shall
be made to or set apart for the holders of Junior Securities, the holder of each
share of Series C Preferred Stock shall be entitled to receive an amount per
share equal to the Liquidation Value of such share on the date of distribution,
and such holders shall not be entitled to any further payment. If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of the shares
of Series C Preferred Stock and Series B Preferred Stock (collectively, the
"Preferred Stock") shall be insufficient to pay in full the preferential amount
- ----------------
due on such shares, then such assets, or the proceeds thereof, shall be
distributed among the holders of shares of Preferred Stock ratably in accordance
with the respective amounts that would be payable on such shares of Preferred
Stock if all amounts payable thereon were paid in full. Solely for the purposes
of this paragraph 3, neither the sale, conveyance, exchange or transfer (for
cash, shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Corporation nor the
consolidation or merger of the Corporation with or into one or more other
entities shall be deemed to be a liquidation, dissolution or winding-up of the
Corporation.
(b) After payment shall have been made in full to the holders of the
Preferred Stock, as provided in this paragraph 3, any other series or class or
classes of Junior Securities shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any and all assets
remaining to be paid or distributed to holders of capital stock of the
Corporation, and the holders of the Preferred Stock shall not be entitled to
share therein.
4. Conversion.
----------
(a) (i) Subject to the provisions of this paragraph 4, each holder
of shares of Series C Preferred Stock shall have the right, at any time and from
time to time, at such holder's option, to convert its outstanding shares of
Series C Preferred Stock, in whole or in part, into fully paid and non-
assessable shares of Common Stock. Subject to subparagraph 4(a)(ii) below, the
number of shares of Common Stock deliverable upon conversion of one share of
Series C Preferred Stock shall be equal to (i) the Accreted Value of such share
on the date of conversion, plus any dividends accrued to such date (whether or
not earned or declared) since the end of the previous Dividend Period, divided
by (ii) the Conversion Price on such date. No notice delivered by the
Corporation pursuant to paragraph 5 will limit in any way any holder's rights to
convert pursuant to this paragraph 4(a). In order to exercise the conversion
privilege set forth in paragraph 4(a), the holder of the shares of Series C
Preferred Stock to be converted shall surrender the certificate representing
such shares at the office of the Corporation, with a written notice of election
to convert completed and signed, specifying the number of shares to be
converted. Each conversion pursuant to paragraph 4(a) shall be deemed to have
been effected immediately prior to the close of business on the date on which
the certificates for shares of Series C Preferred Stock shall have been
surrendered and such notice received by the Corporation as aforesaid, and the
person in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder of record of the shares of Common Stock represented thereby at
such time on such date. Effective upon such conversion, the shares of Series C
Preferred Stock so converted shall no longer be deemed to be outstanding, and
all rights of a holder with respect to such shares surrendered for conversion
shall immediately terminate except the right to receive the Common Stock and
other amounts payable pursuant to this paragraph 4.
(ii) In connection with any conversion of shares of Series C
Preferred Stock into shares of Common Stock occurring within 30 days of the
Corporation's delivery of a Change of Control Notice pursuant to the provisions
of paragraph 4(m), the number of shares of Common Stock deliverable upon
conversion of one share of Series C Preferred Stock shall be equal to (x) the
Change of Control Amount, divided by (y) the Conversion Price on such date.
(b) (i) Unless the shares issuable on conversion pursuant to this
paragraph 4 are to be issued in the same name as the name in which such shares
of Series C Preferred Stock are registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in form reasonably
satisfactory to the Corporation, duly executed by the holder or the holder's
duly authorized attorney and an amount sufficient to pay any transfer or similar
tax.
(ii) As promptly as possible, but in any event within 5 days,
after the surrender by the holder of the certificates for shares of Series C
Preferred Stock as aforesaid, the Corporation shall issue and shall deliver to
such holder, or on the holder's written order to the holder's transferee, a
certificate or certificates for the whole number of shares of Common Stock
issuable upon the conversion of such shares in accordance with the provisions of
this paragraph 4.
(iii) All shares of Common Stock delivered upon conversion of the
Series C Preferred Stock will upon delivery be duly and validly issued and fully
paid and non-assessable, free of all liens and charges and not subject to any
preemptive rights.
(c) (i) Upon delivery to the Corporation by a holder of shares of
Series C Preferred Stock of a notice of election to convert pursuant to
paragraph 4(a) above, the right of the Corporation to purchase such shares of
Series C Preferred Stock shall terminate, regardless of whether a notice has
been mailed pursuant to paragraph 5.
(ii) From the date of delivery by a holder of shares of Series C
Preferred Stock of such notice of election to convert, in lieu of dividends on
such Series C Preferred Stock pursuant to paragraph 2, such Series C Preferred
Stock shall participate equally and ratably with the holders of shares of Common
Stock in all dividends paid on the Common Stock.
(iii) Except as provided herein, the Corporation shall make no
payment or adjustment for accrued dividends on shares of Series C Preferred
Stock, whether or not in arrears, on conversion of such shares or for dividends
in cash on the shares of Common Stock issued upon such conversion.
(d) (i) The Corporation shall at all times reserve and keep
available, free from preemptive rights, such number of its authorized but
unissued shares of Common Stock as shall be required for the purpose of
effecting conversion of the Series C Preferred Stock.
(ii) Prior to the delivery of any securities which the
Corporation shall be obligated to deliver upon conversion of the Series C
Preferred Stock, the Corporation shall comply with all applicable federal and
state laws and regulations which require action to be taken by the Corporation.
(e) The Corporation will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
Common Stock on conversion of the Series C Preferred Stock pursuant hereto;
provided that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock in a name other than that of the holder of the Series C
Preferred Stock to be converted and no such issue or delivery shall be made
unless and until the person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or has established, to the satisfaction
of the Corporation, that such tax has been paid.
(f) In connection with the conversion of any shares of Series C
Preferred Stock, no fractional shares of Common Stock shall be issued, but in
lieu thereof the Corporation shall pay to the holder thereof the value of such
share in cash as determined by reference to the Daily Price as of the date of
conversion of such fractional share.
(g) Conversion Price.
----------------
(i) In order to prevent dilution of the conversion rights
granted under this paragraph 4, the Conversion Price shall be subject to
adjustment from time to time pursuant to this paragraph (g).
(ii) If and whenever on or after the original date of issuance
of the Series C Preferred Stock the Corporation issues or sells, or in
accordance with paragraph (h) is deemed to have issued or sold, any shares of
its Common Stock without consideration or at a price per share less than the
Conversion Price in effect immediately prior to such issuance or sale (or deemed
issuance or sale), then in each such case, the Conversion Price, upon each such
issuance or sale, except as hereinafter provided, shall be lowered so as to be
equal to an amount determined by multiplying the Conversion Price in effect
immediately prior to such issuance or sale by the following fraction:
P + N
-------
P + F
where
P = the number of shares of Common Stock outstanding immediately
prior to such issuance or sale, assuming the exercise or
conversion of all outstanding securities exercisable for or
convertible into Common Stock at any time on or after the date of
such calculation
N = the number of shares of Common Stock which the net aggregate
consideration, if any, received by the Corporation for the total
number of such additional shares of Common Stock so issued or
sold would purchase at the Conversion Price in effect immediately
prior to such issuance or sale
F = the number of additional shares of Common Stock so issued or sold
(iii) Notwithstanding the foregoing, there shall be no adjustment
in the Conversion Price as a result of (A) any issue or sale (or deemed issue or
sale) of Options to acquire shares of Common Stock to employees of the
Corporation, or shares of Common Stock issuable pursuant to the exercise of such
Options, pursuant to stock option plans approved by the Corporation's Board of
Directors so long as the exercise price of such Options is not less than the
Current Market Price Per Common Share on the date such Options are issued as
determined by the Corporation's Board of Directors in its good faith judgment,
or any issuance of shares of Common Stock pursuant to the exercise of Options
outstanding as of July 11, 2000; (B) the issuance of up to 3,716,400 shares of
Common Stock to the sellers in connection with the closing of the Corporation's
acquisition of R&B Communications, Inc. and the issuance to employees of R&B
Communications, Inc. of options to acquire shares of Common Stock (not exceeding
65,000 shares in the aggregate) pursuant to the terms set forth in Exhibit G to
the Agreement and Plan of Merger, dated as of June 16, 2000, by and among R&B
Communications, Inc., R&B Combination Company and the Corporation; (C) Common
Stock issued pursuant to and in
accordance with the terms of the Corporation's Dividend Reinvestment Plan (so
long as such shares are issued at a price which is no less than the Daily Price
on the date of issuance) or 1997 Employee Stock Purchase Plan, each as in effect
as of July 11, 2000; and (D) the issuance of up to 600,000 shares of Common
Stock in connection with the purchase by the Corporation of minority interests
in the Virginia PCS Alliance, the West Virginia PCS Alliance and/or the Virginia
RSA 6 Cellular Limited Partnership (assuming that the aggregate purchase price
for all such minority interests does not exceed $21 million).
(h) Effect on Conversion Price of Certain Events. For purposes of
--------------------------------------------
determining the adjusted Conversion Price under paragraph (g), the following
shall be applicable:
(i) Issuance of Rights or Options. Except for Options granted in
-----------------------------
accordance with the provisions of paragraph (g)(iii) above or in accordance with
the Corporation's Rights Agreement dated as of February 26, 2000, if the
Corporation in any manner grants or sells any Options and the price per share
for which Common Stock is issuable upon the exercise of such Options, or upon
conversion or exchange of any Convertible Securities issuable upon exercise of
such Options, is less than the Conversion Price in effect immediately prior to
the time of the granting or sale of such Options, then the total maximum number
of shares of Common Stock issuable upon the exercise of such Options or upon
conversion or exchange of the total maximum amount of such Convertible
Securities issuable upon the exercise of such Options shall be deemed to be
outstanding and to have been issued and sold by the Corporation at the time of
the granting or sale of such Options for such price per share. For purposes of
this paragraph, the "price per share for which Common Stock is issuable" shall
be determined by dividing (A) the total amount, if any, received or receivable
by the Corporation as consideration for the granting or sale of such Options,
plus the minimum aggregate amount of additional consideration payable to the
Corporation upon exercise of all such Options, plus in the case of such Options
which relate to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable to the Corporation upon the issuance
or sale of such Convertible Securities and the conversion or exchange thereof,
by (B) the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options. No further
adjustment of the Conversion Price shall be made when Convertible Securities are
actually issued upon the exercise of such Options or when Common Stock is
actually issued upon the exercise of such Options or the conversion or exchange
of such Convertible Securities.
(ii) Issuance of Convertible Securities. If the Corporation in any
----------------------------------
manner issues or sells any Convertible Securities and the price per share for
which Common Stock is issuable upon conversion or exchange thereof is less than
(a) the Conversion Price in effect immediately prior to the time of such issue
or sale, then the maximum number of shares of Common Stock issuable upon
conversion or exchange of such Convertible Securities shall be deemed to be
outstanding and to have been issued and sold by the Corporation at the time of
the issuance or sale of such Convertible Securities for such price per share.
For the purposes of this paragraph, the "price per share for which Common Stock
is issuable" shall be determined by dividing (A) the total amount received or
receivable by the Corporation as consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the conversion or
exchange thereof, by (B)
the total maximum number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities. No further adjustment of the
Conversion Price shall be made when Common Stock is actually issued upon the
conversion or exchange of such Convertible Securities, and if any such issue or
sale of such Convertible Securities is made upon exercise of any Options for
which adjustments of the Conversion Price had been or are to be made pursuant to
other provisions of this paragraph (h), no further adjustment of the Conversion
Price shall be made by reason of such issue or sale.
(iii) Change in Option Price or Conversion Rate. Except for Options
-----------------------------------------
granted in accordance with the provisions of paragraph (g)(iii) above or in
accordance with the Corporation's Rights Agreement dated as of February 26,
2000, if the purchase price provided for in any Options, the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities or the rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock changes at any time, the
Conversion Price in effect at the time of such change shall be immediately
adjusted to the Conversion Price which would have been in effect at such time
had such Options or Convertible Securities still outstanding provided for such
changed purchase price, additional consideration or conversion rate, as the case
may be, at the time initially granted, issued or sold; provided that if such
adjustment would result in an increase of the Conversion Price then in effect,
such adjustment shall not be effective until 30 days after written notice
thereof has been given by the Corporation to all holders of the Series C
Preferred Stock. For purposes of paragraph (h), if the terms of any Option or
Convertible Security which was outstanding as of the date of issuance of the
Series C Preferred Stock are changed in the manner described in the immediately
preceding sentence, then such Option or Convertible Security and the Common
Stock deemed issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such change; provided that no such
change shall at any time cause the Conversion Price hereunder to be increased.
(iv) Treatment of Expired Options and Unexercised Convertible
--------------------------------------------------------
Securities. Upon the expiration of any Option or the termination of any right to
- ----------
convert or exchange any Convertible Security without the exercise of any such
Option or right, the Conversion Price then in effect hereunder shall be adjusted
immediately to the Conversion Price which would have been in effect at the time
of such expiration or termination had such Option or Convertible Security, to
the extent outstanding immediately prior to such expiration or termination,
never been issued; provided that if such expiration or termination would result
in an increase in the Conversion Price then in effect, such increase shall not
be effective until 30 days after written notice thereof has been given to all
holders of the Series C Preferred Stock. For purposes of paragraph (h), the
expiration or termination of any Option or Convertible Security which was
outstanding as of the date of issuance of the Series C Preferred Stock shall not
cause the Conversion Price hereunder to be adjusted unless, and only to the
extent that, a change in the terms of such Option or Convertible Security caused
it to be deemed to have been issued after the date of issuance of the Series C
Preferred Stock.
(v) Calculation of Consideration Received. If any Common Stock,
-------------------------------------
Option or Convertible Security is issued or sold or deemed to have been issued
or sold for cash, the consideration received therefor shall be deemed to be the
amount received by the Corporation therefor. If any Common Stock, Option or
Convertible Security is issued or sold for a consideration other than cash, the
amount of the consideration other than cash received by the Corporation shall be
the fair value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration received by
the Corporation shall be the Market Price thereof as of the date of receipt. If
any Common Stock, Option or Convertible Security is issued to the owners of the
non-surviving entity in connection with any merger in which the Corporation is
the surviving Corporation, the amount of consideration therefor shall be deemed
to be the fair value of such portion of the net assets and business of the non-
surviving entity as is attributable to such Common Stock, Option or Convertible
Security, as the case may be. The fair value of any consideration other than
cash and securities shall be determined jointly by the Corporation and the
holders of a majority of the outstanding Series C Preferred Stock. If such
parties are unable to reach agreement within a reasonable period of time, the
fair value of such consideration shall be determined by an independent appraiser
experienced in valuing such type of consideration jointly selected by the
Corporation and the holders of a majority of the outstanding Series C Preferred
Stock. The determination of such appraiser shall be final and binding upon the
parties, and the fees and expenses of such appraiser shall be borne by the
Corporation.
(vi) Integrated Transactions. In case any Option is issued in
-----------------------
connection with the issue or sale of other securities of the Corporation,
together comprising one integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the Option
shall be deemed to have been issued for a consideration of $.01.
(vii) Record Date. If the Corporation takes a record of the
-----------
holders of Common Stock for the purpose of entitling them (a) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (b) to subscribe for or purchase Common Stock, Options
or Convertible Securities, then such record date shall be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or upon the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
(i) Subdivision or Combination of Common Stock. If the Corporation at
------------------------------------------
any time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Conversion Price in effect immediately prior to
such subdivision shall be proportionately reduced, and if the Corporation at any
time combines (by reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination shall be
proportionately increased.
(j) Reorganization, Reclassification, Consolidation, Merger or Sale.
---------------------------------------------------------------
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Corporation's assets or other
transaction, in each case which is effected in such a manner that the holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock, is referred to herein as an "Organic Change". Prior to the
consummation of any Organic Change, the Corporation shall make appropriate
provisions (in form and substance reasonably satisfactory to the holders of a
majority of the Series C Preferred Stock then outstanding) to insure that each
of the holders of Series C Preferred Stock shall thereafter have the right to
acquire and receive, in lieu of or in addition to (as the case may be) the
shares of Conversion Stock immediately theretofore acquirable and receivable
upon the conversion of such holder's
Series C Preferred Stock, such shares of stock, securities or assets as such
holder would have received in connection with such Organic Change if such holder
had converted its Series C Preferred Stock immediately prior to such Organic
Change. In each such case, the Corporation shall also make appropriate
provisions (in form and substance reasonably satisfactory to the holders of a
majority of the Series C Preferred Stock then outstanding) to insure that the
provisions of paragraph 4 hereof shall thereafter be applicable to the Series C
Preferred Stock (including, in the case of any such consolidation, merger or
sale in which the successor entity or purchasing entity is other than the
Corporation, an immediate adjustment of the Conversion Price pursuant to the
provisions of this paragraph 4 to give effect to the value for the Common Stock
reflected by the terms of such consolidation, merger or sale, and a
corresponding immediate adjustment in the number of shares of Conversion Stock
acquirable and receivable upon conversion of Series C Preferred Stock, if the
value so reflected is less than the Conversion Price in effect immediately prior
to such consolidation, merger or sale). The Corporation shall not effect any
such consolidation, merger or sale, unless prior to the consummation thereof,
the successor entity (if other than the Corporation) resulting from
consolidation or merger or the entity purchasing such assets assumes by written
instrument (in form and substance reasonably satisfactory to the holders of a
majority of the Series C Preferred Stock then outstanding), the obligation to
deliver to each such holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such holder may be entitled to
acquire.
(k) Certain Events. If any event occurs of the type contemplated by
--------------
the provisions of paragraph 4 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the
Corporation's Board of Directors shall make an appropriate adjustment in the
Conversion Price so as to protect the rights of the holders of Series C
Preferred Stock; provided that no such adjustment shall increase the Conversion
Price as otherwise determined pursuant to paragraph 4 or decrease the number of
shares of Conversion Stock issuable upon conversion of each share of Series C
Preferred Stock.
(l) Notices.
-------
(i) Immediately upon any adjustment of the Conversion Price,
the Corporation shall give written notice thereof to all holders of Series C
Preferred Stock, setting forth in reasonable detail and certifying the
calculation of such adjustment.
(ii) The Corporation shall give written notice to all holders
of Series C Preferred Stock at least 20 days prior to the date on which the
Corporation closes its books or takes a record (a) with respect to any dividend
or distribution upon Common Stock (other than the Corporation's ordinary Common
Stock dividend), (b) with respect to any pro rata subscription offer to holders
of Common Stock or (c) for determining rights to vote with respect to any
Organic Change, dissolution or liquidation.
(iii) The Corporation shall also give written notice to the
holders of Series C Preferred Stock at least 20 days prior to the date on which
any Organic Change shall take place.
(m) Change of Control Offer.
-----------------------
(i) Promptly after the occurrence of a Change of Control (the
date of such occurrence being the "Change of Control Date"), the Corporation
----------------------
shall commence (or cause
to be commenced) an offer to purchase all outstanding shares of Series C
Preferred Stock pursuant to the terms described in paragraph (m) (iv) (the
"Change of Control Offer") at a purchase price equal to the Change of Control
-----------------------
Amount on the Change of Control Payment Date, and shall purchase (or cause the
purchase of) any shares of Series C Preferred Stock tendered in the Change of
Control Offer pursuant to the terms hereof.
(ii) At the option of each holder of Series C Preferred Stock,
the Change of Control Amount payable to such holder shall be payable (i) in
cash, (ii) in a number of shares of Common Stock (or the securities of the
entity into which the Common Stock became converted or was exchanged in
connection with the Change of Control) determined by dividing the portion of the
Change of Control Amount that would otherwise be paid in cash (and which the
holder has elected to receive in shares) by the Conversion Price in effect as of
the date on which the Change of Control occurred (which will determine the
number of shares of the Corporation that the holder would receive, which shall
then be used to determine the number of shares of the successor entity, if
applicable, that the holder is entitled to receive), or (iii) in a combination
of cash and such shares.
(iii) If a holder elects to receive the Change of Control Amount
in cash, prior to the mailing of the notice referred to in paragraph (m)(iv),
but in any event within 20 days following the date on which a Change of Control
has occurred, the Corporation shall (A) promptly determine if the purchase of
the Series C Preferred Stock for cash would violate or constitute a default
under the indebtedness of the Corporation and (B) either shall repay to the
extent necessary all such indebtedness or preferred stock of the Corporation
that would prohibit the repurchase of the Series C Preferred Stock pursuant to a
Change of Control Offer or obtain any requisite consents or approvals under
instruments governing any indebtedness or preferred stock of the Corporation to
permit the repurchase of the Series C Preferred Stock for cash. The Corporation
shall first comply with this paragraph (m)(iii) before it shall repurchase for
cash any Series C Preferred Stock pursuant to this paragraph (m).
(iv) Within 20 days following the date on which a Change of
Control has occurred, the Corporation shall send, by first-class mail, postage
prepaid, a notice (a "Change of Control Notice") to each holder of Series C
------------------------
Preferred Stock. If applicable, such notice shall contain all instructions and
materials necessary to enable such holders to tender Series C Preferred Stock
pursuant to the Change of Control Offer. Such notice shall state:
(A) that a Change of Control has occurred, that a Change of
Control Offer is being made pursuant to this paragraph (m) and that
all Series C Preferred Stock validly tendered and not withdrawn will
be accepted for payment;
(B) the purchase price (including the amount of accrued
dividends, if any) and the purchase date (which must be no earlier
than 30 days nor later than 60 days from the date such notice is
mailed, other than as may be required by law) (the "Change of Control
-----------------
Payment Date");
------------
(C) that any shares of Series C Preferred Stock not tendered will
continue to accrue dividends;
(D) that, unless the Corporation defaults in making payment
therefor, any share of Series C Preferred Stock accepted for payment
pursuant to the Change of
Control Offer shall cease to accrue dividends after the Change of
Control Payment Date;
(E) that holders electing to have any share of Series C Preferred
Stock purchased pursuant to a Change of Control Offer will be required
to surrender stock certificates representing such shares of Series C
Preferred Stock, properly endorsed for transfer, together with such
other customary documents as the Corporation and the Transfer Agent
may reasonably request to the Transfer Agent and registrar for the
Series C Preferred Stock at the address specified in the notice prior
to the close of business on the business day prior to the Change of
Control Payment Date;
(F) that holders will be entitled to withdraw their election if
the Corporation receives, not later than five business days prior to
the Change of Control Payment Date, a telegram, facsimile transmission
or letter setting forth the name of the holder, the number of shares
of Series C Preferred Stock the holder delivered for purchase and a
statement that such holder is withdrawing its election to have such
shares of Series C Preferred Stock purchased;
(G) that holders who tender only a portion of the shares of
Series C Preferred Stock represented by a certificate delivered will,
upon purchase of the shares tendered, be issued a new certificate
representing the unpurchased shares of Series C Preferred Stock; and
(H) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical
income, cash flow and capitalization after giving effect to such
Change of Control).
(v) The Corporation will comply with any tender offer rules
under the Exchange Act which may then be applicable in connection with any offer
made by the Corporation to repurchase the shares of Series C Preferred Stock as
a result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with provisions hereof, the Corporation
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligation hereunder by virtue thereof.
(vi) On the Change of Control Payment Date, the Corporation
shall (A) accept for payment the shares of Series C Preferred Stock validly
tendered pursuant to the Change of Control Offer, (B) pay to the holders of
shares so accepted the purchase price therefor, at the option of each such
holder, in cash or Common Stock (or the securities of the entity into which the
Common Stock became converted in connection with the Change of Control) as
provided in paragraph (ii) above and (C) cancel each surrendered certificate and
retire the shares represented thereby. Unless the Corporation defaults in the
payment for the shares of Series C Preferred Stock tendered pursuant to the
Change of Control Offer, dividends will cease to accrue with respect to the
shares of Series C Preferred Stock tendered and all rights of holders of such
tendered shares will terminate, except for the right to receive payment therefor
on the Change of Control Payment Date.
(vii) To accept the Change of Control Offer, the holder of a
share of Series C Preferred Stock shall deliver, prior to the close of business
on the business day prior to the Change of Control Payment Date, written notice
to the Corporation (or an agent designated
by the Corporation for such purpose) of such holder's acceptance, together with
certificates evidencing the shares of Series C Preferred Stock with respect to
which the Change of Control Offer is being accepted, duly endorsed for transfer.
(n) Certain Mergers. In connection with any consolidation with or
---------------
merger with or into, any person in a transaction where the Common Stock is
converted into or exchanged for securities of such person or an affiliate of
such person, the Corporation covenants that as a condition precedent to the
consummation of any such consolidation or merger it shall provide the holders of
the Series C Preferred Stock with a certificate, in form and substance
satisfactory to the holders of a majority of the Series C Senior Preferred Stock
signed by a duly authorized officer of the Corporation indicating that the
person issuing such securities will be organized and existing under the laws of
a jurisdiction which allows for the issuance of preference stock and that the
Series C Preferred Stock shall be converted into or exchanged for and shall
become shares of such person having in respect of such person substantially the
same powers, preference and relative participating, optional or other special
rights and the qualifications, limitations or restrictions thereon that the
Series C Preferred Stock had immediately prior to such transaction.
(o) Conversion at the Option of the Corporation. If on any date after
-------------------------------------------
the fifth anniversary of the date of issuance of the Series C Preferred Stock,
the Daily Price has been at least $64.50 per share (as adjusted for any stock
splits, stock dividends, reverse stock splits, share consolidations or other
similar transactions) during any 30 trading days out of any consecutive 45
trading day period, the Corporation may elect, by written notice delivered to
the Transfer Agent (with a copy to each holder of Series C Preferred Stock), no
later than five Market Days after such date, to cause all outstanding shares of
Series C Preferred Stock to be converted into fully paid and nonassessable
shares of Common Stock. Any such conversion shall be deemed to have been
effected, without further action by any party, immediately prior to the close of
business on the date such notice is received by the Transfer Agent. The number
of shares of Common Stock deliverable upon conversion of one share of Series C
Preferred Stock shall be equal to (i) the Accreted Value of such share on the
date of conversion, plus any dividends accrued to such date (whether or not
earned or declared) since the end of the previous Dividend Period, divided by
(ii) the Conversion Price on such date.
(p) Reacquired Shares. Any shares of Series C Preferred Stock
-----------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock
to be created by an amendment or amendments of the Corporation's articles of
incorporation adopted by the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
5. Put/Conversion.
--------------
(a) At any time on or after October 26, 2010, the holders of a
majority of the shares of Series C Preferred Stock may, by written notice (the
"Put Notice") to the Corporation, require the Corporation to purchase all of the
----------
outstanding shares of Series C Preferred Stock at a price per share equal to the
Accreted Value on the date of purchase, plus all dividends accrued to such date
(whether or not earned or declared) since the most recent Dividend Payment Date
(the
"Put Right"). The Put Notice shall state the date of purchase, which shall be no
---------
earlier than 30 days from the date of the Put Notice. The purchase price will be
payable in cash.
(b) Upon receipt of the Put Notice, the Corporation shall notify, by
first class mail, postage prepaid, each holder of record of the shares to be
purchased at such holder's address as the same appears on the stock register of
the Corporation; provided that neither the failure to give such notice nor any
defect therein shall affect the validity of the giving of notice for the
purchase of any share of Series C Preferred Stock to be purchased except as to
the holder to whom the Corporation has failed to give said notice or except as
to the holder whose notice was defective. Each such notice shall state: (i) the
date of purchase; (ii) the purchase price; (iii) the place or places where
certificates for such shares are to be surrendered for payment of the purchase
price; and (iv) that dividends on the shares to be purchased will cease to
accrue on such date of purchase.
(c) Notice having been mailed as aforesaid, from and after the
purchase date (unless default shall be made by the Corporation in providing
money for the payment of the purchase price), dividends on the shares of Series
C Preferred Stock shall cease to accrue, and all rights of the holders thereof
as stockholders of the Corporation (except the right to receive from the
Corporation the purchase price) shall cease. Upon surrender in accordance with
said notice of the certificates for any shares so purchased (properly endorsed
or assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such share shall be purchased by the
Corporation at the purchase price aforesaid.
(d) For the avoidance of doubt, nothing in this paragraph 5 shall
restrict the right of the holders of Series C Preferred Stock to convert their
shares of Series C Preferred Stock into shares of Common Stock prior to such
holders acceptance of the purchase price.
(e) If a Put Notice has not been delivered to the Corporation on or
before the date which is one year from the applicable date set forth in
paragraph 5(a) above, then the Corporation shall have the right to convert all,
but not less than all, of the outstanding shares of Series C Preferred Stock
into fully paid and non-assessable shares of Common Stock pursuant to the
provisions of paragraph 4.
(f) The Corporation shall notify, by first class mail, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the date of
conversion, each holder of record of the shares to converted at such holder's
address as the same appears on the stock register of the Corporation; provided
that neither the failure to give such notice nor any defect therein shall affect
the validity of the giving of notice for the conversion of any share of Series C
Preferred Stock to be converted except as to the holder to whom the Corporation
has failed to give said notice or except as to the holder whose notice was
defective. Each such notice shall state: (i) the conversion date; (ii) the
number of shares of Common Stock and the cash, if any, into which each share of
Series C Preferred Stock will convert; (iii) the place or places where
certificates for shares of Series C Preferred Stock are to be surrendered for
conversion; and (iv) that dividends on the shares to be converted will cease to
accrue on such conversion date.
6. Voting Rights.
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(a) Except as required by law, each holder of Series C Preferred
Stock shall be entitled to vote on all matters and shall be entitled to that
number of votes equal to the number of shares of Common Stock into which such
holder's shares of Series C Preferred Stock could be
converted, pursuant to the provisions of paragraph 4 hereof, on the record date
for the determination of shareholders entitled to vote on such matter or, if no
such record date is established, on the date such vote is taken or any written
consent of shareholders is solicited. Except as otherwise expressly provided
herein or as required by law, the holders of shares of Series C Preferred Stock
and Common Stock shall vote together as a single class on all matters.
(b) In addition, so long as any of the Series C Preferred Stock is
outstanding, the affirmative vote of the holders of (x) all of the outstanding
shares of Series C Preferred Stock shall be necessary to alter or change the
preferences, rights or powers of the Series C Preferred Stock, and (y) a
majority of the outstanding shares of Series C Preferred Stock, voting together
as a single class, shall be necessary to: (i) increase or decrease the
authorized number of shares of Series C Preferred Stock, (ii) amend, alter,
repeal or waive any provision of the Restated Articles of Incorporation
(including any articles of amendment and whether by amendment, merger or
otherwise) or the By-laws so as to adversely affect the preferences, rights or
powers of the Series C Preferred Stock, including, without limitation, the
voting powers, dividend rights and liquidation preference of the Series C
Preferred Stock, or change the Series C Preferred Stock into any other
securities (other than as required by paragraph 4(j)), cash or other property,
(iii) issue any additional Series C Preferred Stock or create, authorize or
issue any capital stock that ranks prior (whether with respect to dividends or
upon liquidation, dissolution, winding up or otherwise) to or pari passu with
the Series C Preferred Stock, or (iv) redeem or repurchase for cash any Junior
Securities.
7. Miscellaneous. If any holder of Series C Preferred Stock elects to
-------------
receive the Change of Control Amount in shares of Common Stock in connection
with a Change of Control Offer pursuant to paragraph 4(m), the Corporation shall
comply with all statutes, rules and regulations applicable thereto at that time,
including any and all regulations of the principal trading market on which the
Common Stock is then trading, including, if necessary, any shareholder approval
requirement under NASD Rule 4460(i), as it may be amended from time to time.
8. Definitions. The following terms, as used in this Appendix III, shall
----------- ------------
have the following meanings:
"Accreted Value" equals, with respect to one share of Series C
--------------
Preferred Stock, $1,000, adjusted for the amount of any dividends added to
(or subtracted from) the Accreted Value in accordance with paragraph 2(b)
(which aggregate amount shall be subject to adjustment whenever there shall
occur a stock split, combination, re-classification or other similar event
involving the Series C Preferred Stock).
"Applicable Percentage" is defined in paragraph 2(c) hereof.
---------------------
"Change of Control" means: (i) the sale, lease, transfer, conveyance
-----------------
or other disposition (other than by way of merger or consolidation), in one
or a series of related transactions, of all or substantially all the assets
of the Corporation and its subsidiaries taken as a whole to any "person"
(as such term is used in Section 13(d)(3) of the Exchange Act), (ii) the
consummation of any transaction (including any merger or consolidation) the
result of which is that any "person" (as defined above), becomes the
beneficial owner (as determined in accordance with Rules 13d-3 and 13d-5
under the Exchange Act except that a person will be deemed to have
beneficial ownership of all shares that such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 40% of
the Voting Securities of the Corporation, or (iii) the first day on which a
majority of the members of the board of directors are not Continuing
Directors.
"Change of Control Amount" means, with respect to one share of Series
------------------------
C Preferred Stock, 101% of the Accreted Value per share plus any dividends
accrued to such date (whether or not earned or declared) since the end of
the previous Dividend Period; provided, however, that if the Change of
-------- -------
Control occurs prior to the fifth anniversary of the date of issue of any
share of Series C Preferred Stock, the Accreted Value shall be calculated
assuming the Change of Control had occurred on the fifth anniversary of the
date of issue of such share of Series C Preferred Stock (and assuming that
no cash dividends had been paid on such share from the actual date of the
Change of Control through the fifth anniversary of the date of issue).
"Continuing Directors" means individuals who constituted the Board of
--------------------
Directors of the Corporation on July 11, 2000 (the "Incumbent Directors");
-------------------
provided that any individual becoming a director during any year shall be
considered to be an Incumbent Director if such individual's election,
appointment or nomination was recommended or approved by at least two-
thirds of the other Incumbent Directors continuing in office following such
election, appointment or nomination present, in person or by telephone, at
any meeting of the Board of Directors of the Corporation, after the giving
of a sufficient notice to each Incumbent Director so as to provide a
reasonable opportunity for such Incumbent Directors to be present at such
meeting.
"Conversion Price" means $45.00, subject to adjustment from time to
----------------
time as provided in paragraph 4.
"Conversion Stock" means shares of the Corporation's Common Stock, no
----------------
par value per share; provided that if there is a change such that the
securities issuable upon conversion of the Series C Preferred Stock are
issued by an entity other than the Corporation or there is a change in the
type or class of securities so issuable, then the term "Conversion Stock"
shall mean one share of the security issuable upon conversion of the Series
C Preferred Stock if such security is issuable in shares, or shall mean the
smallest unit in which such security is issuable if such security is not
issuable in shares.
"Convertible Securities" means any stock or securities directly or
----------------------
indirectly convertible into or exchangeable for Common Stock.
"Current Market Price Per Common Share" means, as of any date, the
-------------------------------------
average (weighted by daily trading volume) of the Daily Prices per share of
Common Stock for the 30 consecutive trading days immediately prior to such
date.
"Daily Price" means, as of any date, (i) if the shares of such class
-----------
of Common Stock then are listed and traded on the New York Stock Exchange,
Inc. ("NYSE"), the closing price on such date as reported on the NYSE
----
Composite Transactions Tape; (ii) if the shares of such class of Common
Stock then are not listed and traded on the NYSE, the closing price on such
date as reported by the principal national securities exchange on which the
shares are listed and traded; (iii) if the shares of such class of Common
Stock then are not listed and traded on any such securities exchange, the
last reported sale price on such date on the National Market of the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ"); or (iv) if the shares of such class of
------
Common Stock then are not traded on the NASDAQ National Market, the average
of the highest reported bid and lowest reported asked price on such date as
reported by NASDAQ.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Liquidation Value" on any date means, with respect to one share of
-----------------
Series C Preferred Stock, the greater of (i) the Accreted Value on such
date, plus all dividends (whether or not earned or declared) accrued since
the end of the previous Dividend Period and (ii) the amount that would have
been payable on a number of shares of Common Stock equal to the number of
shares of Common Stock into which a share of Series C Preferred Stock was
convertible immediately prior to such date.
"Market Day" means a day on which the principal national securities
----------
market or exchange on which the Common Stock is listed or admitted for
trading is open for the transaction of business.
"Market Price" of any security means the average of the closing prices
------------
of such security's sales on all securities exchanges on which such security
may at the time be listed, or, if there has been no sales on any such
exchange on any day, the average of the highest bid and lowest asked prices
on all such exchanges at the end of such day, or, if on any day such
security is not so listed, the average of the representative bid and asked
prices quoted in the NASDAQ System as of 4:00 P.M., New York time, or, if
on any day such security is not quoted in the NASDAQ System, the average of
the highest bid and lowest asked prices on such day in the domestic over-
the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization, in each such case
averaged over a period of 21 days consisting of the day as of which "Market
Price" is being determined and the 20 consecutive business days prior to
such day. If at any time such security is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the
"Market Price" shall be the fair value thereof determined jointly by the
Corporation and the holders of a majority of the Series C Preferred Stock.
If such parties are unable to reach agreement within a reasonable period of
time, such fair value shall be determined by an independent appraiser
experienced in valuing securities jointly selected by the Corporation and
the holders of a majority of the Series C Preferred Stock. The
determination of such appraiser shall be final and binding upon the
parties, and the Corporation shall pay the fees and expenses of such
appraiser.
"Options" means any rights, warrants or options to subscribe for or
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purchase Common Stock or Convertible Securities.
"Person" as used herein means any corporation, limited liability
------
company, partnership, trust, organization, association, other entity or
individual.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Transfer Agent" means the transfer agent for the Series C Preferred
--------------
Stock appointed by the Corporation.
"Voting Securities" means securities of the Corporation ordinarily
-----------------
having the power to vote for the election of directors of the Corporation;
provided that when the term
"Voting Securities" is used with respect to any other Person it means the
capital stock or other equity interests of any class or kind ordinarily having
the power to vote for the election of directors or other members of the
governing body of such Person.