Exhibit 3.1
EXECUTION VERSION
ARTICLES OF AMENDMENT
OF
THE RESTATED ARTICLES OF INCORPORATION
OF
PENN VIRGINIA CORPORATION
The undersigned, on behalf of Penn Virginia Corporation, a Virginia corporation (the “corporation”), pursuant to Title 13.1, Chapter 9, Article 11 of the Code of Virginia, states as follows:
1. The name of the corporation is Penn Virginia Corporation.
2. The amendments to the corporation’s Restated Articles of Incorporation (the “Articles of Incorporation”), adopted consist of (a) the addition of the letter “A” after the word “Series” in the heading of Paragraph (e) of Article Six and (b) the addition of a new Paragraph (f) in Article 6 with the text set forth below (collectively, the “Amendments”):
(f) Establishment of Series B. There is hereby established a series of the corporation’s authorized Preferred Stock, par value $100.00 per share, to be designated as “6.00% Convertible Perpetual Preferred Stock, Series B” (the “Series B Convertible Preferred Stock”). The designation and number, and relative rights, preferences and limitations of the Series B Convertible Preferred Stock, insofar as not already fixed by any other provisions of these Articles of Incorporation, shall be as follows:
1. NUMBER OF SHARES. The maximum number of shares of Series B Convertible Preferred Stock shall be Thirty Two Thousand Five Hundred (32,500).
2. DEFINITIONS. As used in this resolution, the following words and phrases shall have the respective meanings set forth in this Section 2:
“Additional Shares” shall have the meaning set forth in Section 9(a).
“Amendment Effective Date” means the date (if any) on which the Revolving Credit Facility has been amended to (x) permit the corporation, so long as no “Borrowing Base Deficiency” exists and no “Event of Default” or “Default” (each as defined in the Revolving Credit Facility) has occurred and is continuing or would result therefrom, to pay cash dividends or distributions to the corporation’s shareholders from funds legally available for such purpose during any fiscal year in an amount at least sufficient to pay dividends in cash on all outstanding shares of Series B Convertible Preferred Stock and all outstanding shares of the corporation’s 6.00% Convertible Perpetual Preferred Stock, Series A or (y) eliminate all prohibitions on the corporation’s ability to pay dividends in cash on the Series B Convertible Preferred Stock.
“Board of Directors” means the corporation’s board of directors or a duly authorized committee thereof.
“Business Day” means each day other than a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York.
“Clause A Distribution” shall have the meaning set forth in Section 7(e)(iii).
“Clause B Distribution” shall have the meaning set forth in Section 7(e)(iii).
“Clause C Distribution” shall have the meaning set forth in Section 7(e)(iii).
“close of business” means 5:00 p.m. (New York City time).
“Closing Sale Price” of the corporation’s Common Stock on any date means the closing sale price per share (or if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported on the NYSE or, if the corporation’s Common Stock is not listed on the NYSE, the principal U.S. national or regional securities exchange on which the corporation’s Common Stock is listed or, if the corporation’s Common Stock is not listed on a U.S. national or regional securities exchange, on the principal other market on which the corporation’s Common Stock is then traded. If the corporation’s Common Stock is not so listed, the Closing Sale Price will be an amount determined in good faith by the Board of Directors to be the fair value of the corporation’s Common Stock.
“Conversion Date” means, with respect to any shares of Series B Convertible Preferred Stock, the date on which the holder of such shares complies with the relevant procedures for conversion of such shares as set forth in Section 7(c).
“Conversion Price” shall mean, at any time, the amount determined by dividing the Liquidation Preference by the Conversion Rate at such time.
“Conversion Rate” means 545.17 shares of the corporation’s Common Stock per share of Series B Convertible Preferred Stock, subject to adjustment as set forth in Section 7(e).
“Daily VWAP” means, with respect to the corporations’ Common Stock on any Trading Day, the per share volume-weighted average price of the corporation’s Common Stock as displayed under the heading “Bloomberg VWAP” on Bloomberg page PVA <EQUITY> VAP (or its equivalent successor if such page is not available) in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time, on such Trading Day (or if such volume-weighted average price is unavailable on any such day, the Closing Sale Price shall be used for such day). Daily VWAP shall be determined without regard to after-hours trading or any other trading outside of the regular trading session.
“Deposit Agreement” means the Deposit Agreement, dated as of June 16, 2014, among the corporation, American Stock Transfer & Trust Company, LLC, as Depositary, and the holders from time to time of the depositary receipts described therein.
“Depositary Shares” means the depositary shares, each representing a 1/100th interest in a share of the Series B Convertible Preferred Stock, issued pursuant to the Deposit Agreement.
“Distributed Property” shall have the meaning set forth in Section 7(e)(iii).
“Dividend Agent” shall have the meaning set forth in Section 5(c).
“Dividend Payment Date” means January 15, April 15, July 15 and October 15 of each year, commencing October 15, 2014.
“Dividend Period” means the period commencing on, and including, a Dividend Payment Date and ending on, and including, the day immediately preceding the next succeeding Dividend Payment Date, with the exception that the first Dividend Period shall commence on, and include, the Issue Date and end on and include October 14, 2014.
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“Dividend Rate” means the rate per annum of 6.00% per share of Series B Convertible Preferred Stock on the Liquidation Preference thereof.
“Dividend Record Date” means, with respect to the dividends payable on January 15, April 15, July 15 and October 15 of each year, the immediately preceding January 1, April 1, July 1 and October 1, respectively.
“Effective Date” means, with respect to any share split or share combination, the first date on which the shares of the corporation’s Common Stock trade on the applicable exchange or in the applicable market, regular way, reflecting such share split or share combination, as applicable.
“Ex-Dividend Date” means, with respect to any issuance, dividend or distribution, the first date on which the shares of the corporation’s Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such issuance, dividend or distribution from the corporation or, if applicable, from the seller of the corporation’s Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Expiration Date” shall have the meaning set forth in Section 8(a).
“Fundamental Change” means the occurrence of any of the following:
(i) the corporation consolidates with, or amalgamates or merges with or into, another Person, or any Person consolidates with, or amalgamates or merges with or into, the corporation, other than any merger solely for the purpose of changing the corporation’s jurisdiction of incorporation and resulting in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into Publicly Traded Common Stock of the surviving entity and such Publicly Traded Common Stock becomes the Reference Property for the Series B Convertible Preferred Stock;
(ii) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the corporation’s assets (determined on a consolidated basis) to any “person” or “group” (as such terms are used in Section 13(d)(3) of the Exchange Act);
(iii) the adoption of a plan the consummation of which would result in the liquidation or dissolution of the corporation;
(iv) the acquisition, directly or indirectly, by any “person” or “group” (as such terms are used in Section 13(d)(3) of the Exchange Act), of beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of more than 50% of the aggregate voting power of the corporation’s voting shares;
(v) during any period of two consecutive years, individuals who at the beginning of such period comprised the Board of Directors (together with any new directors whose appointment by such Board of Directors or whose nomination for election by the corporation’s shareholders was approved by a vote of 66 2/3% of the corporation’s directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors then in office; or
(vi) the corporation’s Common Stock ceases to be Publicly Traded Common Stock;
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provided, however, that a Fundamental Change shall not be deemed to have occurred in the case of a merger or consolidation if at least 90% of the consideration (excluding cash payments for fractional shares and cash payments pursuant to dissenters’ appraisal rights) in the merger or consolidation consists of common stock of a company incorporated or organized under the laws of the U.S. or any political subdivision thereof that is Publicly Traded Common Stock (or which will be when issued or exchanged in connection with such transaction) and such Publicly Traded Common Stock becomes the Reference Property for the Series B Convertible Preferred Stock. Solely for purposes of clause (v) above, the phrase “or any duly authorized committee thereof” in the definition of “Board of Directors” shall be disregarded. For the avoidance of doubt, in connection with any merger or consolidation described in the proviso in the second immediately preceding sentence in which (x) the corporation is not the surviving entity and (y) the Board of Directors of the corporation approves such merger or consolidation, for purposes of clause (v) above, the Board of Directors immediately prior to the consummation of such merger or consolidation shall be deemed to have approved by a vote of 66 2/3% the directors of such surviving entity.
“Fundamental Change Conversion Period” shall have the meaning set forth in Section 8(a).
“Fundamental Change Effective Date” means, with respect to the occurrence of any Fundamental Change, the effective date of such Fundamental Change.
“Fundamental Change Notice” shall have the meaning set forth in Section 8(c).
“Fundamental Change Stock Price” means, with respect to a Fundamental Change, (i) if holders of the corporation’s Common Stock receive only cash in the Fundamental Change transaction, the cash amount paid per share of the corporation’s Common Stock or (ii) if not, the average of the Closing Sale Prices of the corporation’s Common Stock on each of the 10 consecutive Trading Days prior to, but not including, the Fundamental Change Effective Date.
“Issue Date” means June 16, 2014.
“Junior Stock” means all classes of the corporation’s Common Stock and any other class of capital stock or series of preferred stock of the corporation established after the Issue Date, the terms of which do not expressly provide that such class or series ranks senior to or on a parity with the Series B Convertible Preferred Stock as to dividend rights or rights upon the corporation’s liquidation, winding-up or dissolution.
“Last Reported Sale Price” means, with respect to the corporation’s Common Stock or any other security on any date, the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on such date as reported in composite transactions for the NYSE, or if the corporation’s Common Stock or such other security is not then listed on the NYSE, the principal other U.S. national or regional securities exchange on which the corporation’s Common Stock or such other security is then listed. If the corporation’s Common Stock or such other security is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the “Last Reported Sale Price” will be the average of the last quoted bid and ask prices for the corporation’s Common Stock or such other security in the
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over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization. If the corporation’s Common Stock or such other security is not so quoted, the “Last Reported Sale Price” will be the average of the mid-point of the last bid and ask prices for the corporation’s Common Stock or such other security on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the corporation for this purpose.
“Liquidation Preference” means, with respect to each share of Series B Convertible Preferred Stock, $10,000.00 per share.
“Make-Whole Premium” shall have the meaning set forth in Section 9(a).
“Mandatory Conversion” shall have the meaning set forth in Section 10(a).
“Mandatory Conversion Date” shall have the meaning set forth in Section 10(b).
“Market Disruption Event” means (i) a failure by the NYSE or, if the corporation’s Common Stock is not listed on the NYSE, the principal U.S. national or regional securities exchange on which the corporation’s Common Stock is listed, to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m. on any Trading Day for the corporation’s Common Stock of an aggregate one half hour period of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in the corporation’s Common Stock or in any options contracts or future contracts relating to the corporation’s Common Stock.
“NYSE” means the New York Stock Exchange.
“open of business” means 9:00 a.m. (New York City time).
“Parity Stock” means the corporation’s 6.00% Convertible Perpetual Preferred Stock, Series A and any class of capital stock or series of preferred stock of the corporation established after the Issue Date, the terms of which expressly provide that such class or series shall rank on a parity with the Series B Convertible Preferred Stock as to dividend rights or rights upon the corporation’s liquidation, winding-up or dissolution.
“Person” means an individual, a corporation, a limited liability company, an association, a partnership, a joint venture, a joint stock company, a trust, an unincorporated organization or a government or an agency or a political subdivision thereof.
“Publicly Traded Common Stock” means shares of common stock that are listed on the NYSE or Nasdaq Global Market.
“Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of the corporation’s Common Stock (or other applicable security) have the right to receive any cash, securities or other property or in which the corporation’s Common Stock (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the corporation’s Common Stock (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors, statute, contract or otherwise).
“Reference Property” shall have the meaning set forth in Section 7(k).
“Reorganization Event” shall have the meaning set forth in Section 7(k).
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“Resale Restriction Termination Date” shall have the meaning set forth in Section 15(a).
“Revolving Credit Facility” means the Credit Agreement, dated September 28, 2012, among Penn Virginia Holding Corp., as Borrower, the corporation, the lenders party thereto, Wells Fargo Bank, National Association, as Administrative Agent and Issuing Bank, Royal Bank of Canada, as Syndication Agent, Bank of Nova Scotia and Bank of America, N.A., as Co-Documentation Agents and Wells Fargo Securities, LLC and RBC Capital Markets, as Joint Bookrunners and Joint Lead Arrangers, as amended from time to time.
“Rule 144” means Rule 144 under the Securities Act.
“Scheduled Free Trade Date” shall have the meaning set forth in Section 4(b).
“Scheduled Trading Day” means any day that is scheduled to be a Trading Day. If the corporation’s Common Stock is not listed for trading or quotation on or by any exchange or quotation system, “Scheduled Trading Day” shall mean a Business Day.
“Securities Act” means the Securities Act of 1933, as amended.
“Senior Stock” means any class of capital stock or series of preferred stock of the corporation established after the Issue Date, the terms of which expressly provide that such class or series shall rank senior to the Series B Convertible Preferred Stock as to dividend rights or rights upon the corporation’s liquidation, winding-up or dissolution.
“Shareholder Approval Date” means the date (if any) on which the corporation’s shareholders grant approval in accordance with NYSE listing rules for the payment of dividends on the Series B Convertible Preferred Stock in shares of the corporation’s Common Stock.
“Spin-Off” shall have the meaning set forth in Section 7(e)(iii).
“Tender Expiration Date” shall have the meaning set forth in Section 7(e)(v).
“Trading Day” means a day during which (i) trading in securities generally occurs on the NYSE or, if the corporation’s Common Stock is not listed on the NYSE, the principal U.S. national or regional securities exchange on which the corporation’s Common Stock is then listed or, if the corporation’s Common Stock is not so listed, admitted for trading or quoted, any Business Day and (ii) there is no Market Disruption Event; provided, however, that a “Trading Day” only includes those days that have a scheduled closing time of 4:00 p.m. (New York City time) or the then standard closing time for regular trading on the relevant exchange or trading system.
“Transfer Agent” means the American Stock Transfer & Trust Company, LLC, until a successor replaces it and, thereafter, means the successor.
“Trigger Event” shall have the meaning set forth in Section 7(e)(iii).
“U.S.” means United States of America.
“Valuation Period” shall have the meaning set forth in Section 7(e)(iii).
“Voting Group” shall have the meaning set forth in Section 13(b).
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3. RANK. The Series B Convertible Preferred Stock shall, with respect to dividend rights or rights upon the corporation’s liquidation, winding-up or dissolution, rank: (i) senior to any Junior Stock; (ii) on a parity, in all respects, with any Parity Stock; and (iii) junior to any Senior Stock.
4. DIVIDENDS.
(a) Holders of shares of Series B Convertible Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds of the corporation legally available for payment, cumulative dividends at the Dividend Rate, payable in cash, by delivery of shares of the corporation’s Common Stock or through any combination of cash and shares of the corporation’s Common Stock, as provided pursuant to Section 5. Dividends on the Series B Convertible Preferred Stock shall be payable quarterly on each Dividend Payment Date at the Dividend Rate, and shall accumulate from the most recent date as to which dividends shall have been paid or, if no dividends have been paid, from the Issue Date, whether or not in any Dividend Period(s) there have been funds legally available for the payment of such dividends. Dividends shall be payable to holders of record as they appear on the corporation’s stock register on the immediately preceding Dividend Record Date (if such dividend has been declared). Accumulations of dividends on shares of Series B Convertible Preferred Stock do not bear interest. Dividends payable on the Series B Convertible Preferred Stock for any period other than a full Dividend Period shall be computed on the basis of a 360-day year consisting of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.
(b) If, at any time during the six-month period beginning on, and including, the date that is six months after the last date of original issuance of the Series B Convertible Preferred Stock, the corporation fails to timely file any document or report that the corporation is required to file with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (other than current reports on Form 8-K), or shares of the Series B Convertible Preferred Stock or Depositary Shares are not otherwise freely tradable by holders thereof other than the corporation’s affiliates (as a result of restrictions pursuant to U.S. securities laws or the terms of the Series B Convertible Preferred Stock, these Articles of Amendment or the Deposit Agreement), the Dividend Rate on the Series B Convertible Preferred Stock shall increase by 0.50% per annum from, and including, the later of (i) the date six months after the last date of original issuance of the Series B Convertible Preferred Stock and (ii) the first date on which such failure to file exists or shares of the Series B Convertible Preferred Stock or Depositary Shares are not otherwise freely tradable, as the case may be, until the earlier of (x) the one-year anniversary of the last date of original issuance of the Series B Convertible Preferred Stock (the “Scheduled Free Trade Date”) and (y) the date on which such failure to file has been cured (if applicable) and the Series B Convertible Preferred Stock and the Depositary Shares are freely tradable as described above.
(c) Further, if, and for so long as:
(i) the restrictive legend on the Series B Convertible Preferred Stock described in Section 15(a) or the restrictive legend on the depositary receipts evidencing the Depositary Shares described in the Deposit Agreement has not been removed,
(ii) the Series B Convertible Preferred Stock or Depositary Shares are assigned a restricted CUSIP number, or
(iii) the Series B Convertible Preferred Stock or Depositary Shares are not otherwise freely tradable by holders thereof other than the corporation’s affiliates (as a result of restrictions pursuant to U.S. securities laws or the terms of the Series B Convertible Preferred Stock, these Articles of Amendment or the Deposit Agreement),
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in each case, on or after the first day following the Scheduled Free Trade Date, the Dividend Rate on the Series B Convertible Preferred Stock shall be increased by 0.50% per annum until such restrictive legends are removed, the Series B Convertible Preferred Stock and the Depositary Shares are assigned unrestricted CUSIP numbers and the Series B Convertible Preferred Stock and the Depositary Shares are freely tradable as described above.
(d) Any additional dividends paid pursuant to Section 4(b) or Section 4(c) shall be payable at the times and in the manner provided for the payment of regular dividends in Section 4(a).
(e) No dividend shall be declared or paid upon, or any sum set apart for the payment of dividends upon, any outstanding share of Series B Convertible Preferred Stock with respect to any Dividend Period unless all dividends for all preceding Dividend Periods have been declared and paid or declared and a sufficient sum or number of shares of the corporation’s Common Stock have been set apart for the payment of such dividend, upon all outstanding shares of Series B Convertible Preferred Stock.
(f) Unless all accrued, accumulated and unpaid dividends on the Series B Convertible Preferred Stock for all past Dividend Periods shall have been paid in full, the corporation shall not:
(i) declare or pay any dividend or make any distribution of assets on any Junior Stock, other than dividends or distributions in the form of Junior Stock and cash solely in lieu of fractional shares in connection with any such dividend or distribution;
(ii) redeem, purchase or otherwise acquire any shares of Junior Stock or pay or make any monies available for a sinking fund for such shares of Junior Stock, other than (i) upon conversion or exchange for other Junior Stock or (ii) the purchase of fractional interests in shares of any Junior Stock pursuant to the conversion or exchange provisions of such shares of Junior Stock;
(iii) declare or pay any dividend or make any distribution of assets on any shares of Parity Stock, other than dividends or distributions in the form of Parity Stock or Junior Stock and cash solely in lieu of fractional shares in connection with any such dividend or distribution; or
(iv) redeem, purchase or otherwise acquire any shares of Parity Stock, except upon conversion into or exchange for other Parity Stock or Junior Stock and cash solely in lieu of fractional shares in connection with any such conversion or exchange.
(g) When dividends are not paid in full upon the shares of Series B Convertible Preferred Stock, as described above, all dividends declared on the Series B Convertible Preferred Stock and any other Parity Stock shall be paid either (i) pro rata so that the amount of dividends so declared on the shares of Series B Convertible Preferred Stock and each such other class or series of Parity Stock shall in all cases bear to each other the same ratio as accumulated dividends on the shares of Series B Convertible Preferred Stock and such class or series of Parity Stock bear to each other or (ii) on another basis that is at least as favorable to the holders of the Series B Convertible Preferred Stock entitled to receive such dividends.
(h) Holders of shares of Series B Convertible Preferred Stock at the close of business on a Dividend Record Date will be entitled to receive the dividend payment on such shares on the corresponding Dividend Payment Date (if such dividend has been declared) notwithstanding the conversion of such shares following such Dividend Record Date or the corporation’s default in payment of the dividend due on such Dividend Payment Date. However, notwithstanding the foregoing, shares of Series B Convertible Preferred Stock surrendered for conversion during the period between the close of business on any Dividend
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Record Date and the open of business on the corresponding Dividend Payment Date must be accompanied by payment of an amount equal to the dividend payable on such shares on such Dividend Payment Date (if such dividend has been declared); provided that no such payment is required in respect of a Mandatory Conversion during such period or if the last Business Day of the Fundamental Change Conversion Period occurs during such period.
5. METHOD OF PAYMENT OF DIVIDENDS.
(a) The corporation shall pay any dividend on the Series B Convertible Preferred Stock (whether or not for a current Dividend Period or any prior Dividend Period, and including in connection with the payment of accrued, accumulated and unpaid dividends upon conversion of the Series B Convertible Preferred Stock pursuant to, and subject to the conditions set forth in, Section 7, Section 8 or Section 10 of these Articles of Amendment), either: (i) in cash; (ii) by delivery of shares of the corporation’s Common Stock; or (iii) through any combination of cash and shares of the corporation’s Common Stock.
(b) If the corporation makes any payment of dividends on the Series B Convertible Preferred Stock in shares of the corporation’s Common Stock, such shares of the corporation’s Common Stock shall be valued for such purpose, in the case of any dividend payment, at 95% of the average of the Daily VWAP of the corporation’s Common Stock on each of the 10 consecutive Trading Days ending on the second Trading Day immediately preceding:
(i) in the case of a Dividend Payment Date (other than as described below), such Dividend Payment Date;
(ii) in the case of a conversion during a Fundamental Change Conversion Period, the effective date of the relevant Fundamental Change;
(iii) in the case of a conversion at the option of the holder (other than during a Fundamental Change Conversion Period), the Conversion Date; or
(iv) in the case of a Mandatory Conversion, the Mandatory Conversion Date.
The corporation shall give the holders of the Series B Convertible Preferred Stock notice of the payment method in respect of any dividend at least five days prior to the first Scheduled Trading Day of such 10 Trading Day period or, in the case of a conversion at the option of the holder (other than during a Fundamental Change Conversion Period), on the first Business Day immediately following the Conversion Date.
(c) If the corporation elects to pay all or a portion of a dividend on the Series B Convertible Preferred Stock in the form of shares of the corporation’s Common Stock, the corporation shall deliver such shares of Common Stock to the Transfer Agent or another agent (in such capacity, the “Dividend Agent”) on behalf of the holders of the Series B Convertible Preferred Stock and shall instruct the Dividend Agent to deliver such shares to or for the account of the holders less any shares required to be withheld on account of taxes or other governmental charges.
(d) Notwithstanding anything to the contrary in this Section 5, the corporation may not pay any portion of a dividend on the Series B Convertible Preferred Stock by delivery of shares of the corporation’s Common Stock unless (i) the Common Stock to be delivered as payment therefor is freely transferable by the recipient without further action on its behalf, other than by reason of the fact that such recipient is an affiliate of the corporation, or (ii) a shelf registration statement and prospectus thereunder relating to such Common Stock has been filed with the Securities and Exchange Commission and is effective and available for use to permit the resale of such Common Stock by the holders thereof.
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(e) In lieu of issuing fractional shares of the corporation’s Common Stock, the corporation will pay a cash adjustment to each holder of Series B Convertible Preferred Stock entitled to a fraction of a share of the corporation’s Common Stock in an amount (x) except in respect of dividends payable upon conversion, equal to the same fraction of the fair value per share of the corporation’s Common Stock (as determined in good faith by the Board of Directors or in any manner prescribed by the Board of Directors, with notice of any such determination delivered promptly to holders) or (y) in respect of dividends payable upon conversion, determined in the manner set forth in Section 12; provided, however, that the corporation may round such fractional share up to the next highest whole number of shares in lieu of making such cash adjustment.
6. LIQUIDATION PREFERENCE. In the event of any voluntary or involuntary liquidation, winding-up or dissolution of the corporation, each holder of Series B Convertible Preferred Stock shall be entitled to receive and to be paid out of the corporation’s assets available for distribution to the corporation’s shareholders, before any payment or distribution is made to holders of Junior Stock, the Liquidation Preference per share of the Series B Convertible Preferred Stock held by such holder, plus accumulated and unpaid dividends on the shares to the date fixed for liquidation, winding-up or dissolution. If, upon the corporation’s voluntary or involuntary liquidation, winding-up or dissolution, the amounts payable with respect to the Liquidation Preference of the Series B Convertible Preferred Stock and all Parity Stock are not paid in full, the holders of the Series B Convertible Preferred Stock and the Parity Stock shall share equally and ratably in any distribution of the corporation’s assets available for distribution to the corporation’s shareholders in proportion to the full liquidation preference and accumulated and unpaid dividends to which they are entitled. After payment of the full amount of the Liquidation Preference and accumulated and unpaid dividends to which they are entitled, the holders of the Series B Convertible Preferred Stock shall have no right or claim to any of the corporation’s remaining assets. For purposes of this Section 6, neither the sale of all or substantially all of the corporation’s assets or business (other than in connection with the liquidation, winding-up or dissolution of the corporation), nor the merger or consolidation of the corporation into or with any other Person, shall be deemed to be a voluntary or involuntary liquidation, winding-up or dissolution of the corporation.
7. CONVERSION AT THE OPTION OF THE HOLDER; ANTI-DILUTION ADJUSTMENTS.
(a) Other than during a Fundamental Change Conversion Period, each holder of the Series B Convertible Preferred Stock shall have the right, at any time, at such holder’s option, to convert, subject to the terms and provisions of this Section 7, any or all of such holder’s shares of Series B Convertible Preferred Stock into fully paid and nonassessable shares of the corporation’s Common Stock at the then applicable Conversion Rate.
(b) If the Amendment Effective Date or the Shareholder Approval Date has occurred prior to the relevant Conversion Date, in addition to the number of shares of the corporation’s Common Stock issuable upon conversion of each share of Series B Convertible Preferred Stock at the option of the holder on the relevant Conversion Date, each converting holder shall have the right to receive, in accordance with the provisions of Sections 4 and 5, an amount equal to all accrued, accumulated and unpaid dividends on such converted shares of Series B Convertible Preferred Stock, whether or not declared prior to the Conversion Date, for all prior Dividend Periods ending on or prior to the Dividend Payment Date immediately preceding the Conversion Date (other than previously declared dividends on the Series B Convertible Preferred Stock payable to holders of record as of a prior date), provided that the corporation is then legally permitted to pay such dividends. The amount payable in respect of such dividends will be
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paid in cash, shares of the corporation’s Common Stock or a combination thereof, in accordance with the provisions, including the provisions setting forth the method for valuing such Common Stock, set forth in Section 5 hereof. Except as described above and in Section 8, upon any optional conversion of the Series B Convertible Preferred Stock, the corporation shall make no payment or allowance for unpaid dividends on the Series B Convertible Preferred Stock.
(c) To convert its shares of Series B Convertible Preferred Stock, a holder must:
(i) deliver the certificates (if any) representing the shares of Series B Convertible Preferred Stock to be converted, duly endorsed for transfer with appropriate signature guarantees, to the Transfer Agent;
(ii) deliver a written, irrevocable conversion notice to the Transfer Agent (in the form on the reverse of the certificate representing the shares or in the form obtained from the corporation or the Transfer Agent) that specifies:
(A) that such holder elects to convert shares of Series B Convertible Preferred Stock;
(B) the number of shares of Series B Convertible Preferred Stock to be converted;
(C) that the Series B Convertible Preferred Stock is to be converted pursuant to the applicable provisions of the Series B Convertible Preferred Stock and these Articles of Amendment; and
(D) the name or names (with address or addresses) and amounts, if other than all, in which shares of the corporation’s Common Stock are to be issued;
(iii) if such Common Stock is to be issued in the name of someone other than such holder, furnish appropriate endorsements and transfer documents; and
(iv) if required, pay funds equal to any dividend payable on the next Dividend Payment Date to which such holder is not entitled.
(d) As of the close of business on the Conversion Date with respect to a conversion, a converting holder of Series B Convertible Preferred Stock shall be deemed to be the holder of record of the shares of the corporation’s Common Stock issuable upon conversion of such holder’s Series B Convertible Preferred Stock notwithstanding that the share register of the corporation shall then be closed or that certificates representing such shares of the corporation’s Common Stock shall not then be actually delivered to such holder; provided, however, that prior to the close of business on the applicable Conversion Date, the shares of the corporation’s Common Stock issuable upon conversion of the Series B Convertible Preferred Stock shall not be deemed to be outstanding for any purpose and such holder shall have no rights with respect to such shares of the corporation’s Common Stock, including voting rights, rights to respond to tender offers and rights to receive any dividends or other distributions on such Common Stock, by virtue of holding the Series B Convertible Preferred Stock. The corporation will pay any documentary, stamp or similar issue or transfer tax on the issuance of the shares of the corporation’s Common Stock upon conversion of the Series B Convertible Preferred Stock, unless the tax is due because the holder requests such shares of Common Stock to be issued in a name other than the holder’s name, in which case the holder will pay the tax.
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(e) The Conversion Rate shall be adjusted, without duplication, from time to time by the corporation, upon the occurrence of any of the following events, except that the corporation shall not make any adjustments to the Conversion Rate if holders of the Series B Convertible Preferred Stock participate (other than in the case of a share split or share combination or a tender offer or exchange offer), at the same time and upon the same terms as holders of the corporation’s Common Stock and solely as a result of holding the Series B Convertible Preferred Stock, in any of the events described in this Section 7(e), without having to convert their shares of Series B Convertible Preferred Stock as if they held, for each share of Series B Convertible Preferred Stock, a number of shares of the corporation’s Common Stock equal to the Conversion Rate.
(i) If the corporation exclusively issues shares of its Common Stock as a dividend or distribution on shares of its Common Stock, or if the corporation effects a share split or share combination, the Conversion Rate shall be adjusted based on the following formula:
where,
| CR0 | = | the Conversion Rate in effect immediately prior to the close of business on the Record Date of such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as applicable; | ||
| CR' | = | the Conversion Rate in effect immediately after the close of business on such Record Date or immediately after the open of business on such Effective Date; | ||
| OS0 | = | the number of shares of the corporation’s Common Stock outstanding immediately prior to the close of business on such Record Date or immediately prior to the open of business on such Effective Date; and | ||
| OS' | = | the number of shares of the corporation’s Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination. | ||
Any adjustment made under this Section 7(e)(i) shall become effective immediately after the close of business on the Record Date for such dividend or distribution, or immediately after the open of business on the Effective Date for such share split or share combination, as applicable. If any dividend or distribution of the type described in this Section 7(e)(i) is declared but not so paid or made, the Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.
(ii) If the corporation issues to all or substantially all holders of its Common Stock any rights, options or warrants entitling them, for a period of not more than 45 calendar days after the announcement date of such issuance, to subscribe for or purchase shares of the corporation’s Common Stock at a price per share that is less than the average of the Last Reported Sale Prices of the corporation’s Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, the Conversion Rate shall be increased based on the following formula:
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where,
| CR0 | = | the Conversion Rate in effect immediately prior to the close of business on the Record Date for such issuance; | ||
| CR' | = | the Conversion Rate in effect immediately after the close of business on such Record Date; | ||
| OS0 | = | the number of shares of the corporation’s Common Stock outstanding immediately prior to the close of business on such Record Date; | ||
| X | = | the total number of shares of the corporation’s Common Stock issuable pursuant to such rights, options or warrants; and | ||
| Y | = | the number of shares of the corporation’s Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the Last Reported Sale Prices of the corporation’s Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants. | ||
Any increase made under this Section 7(e)(ii) shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the close of business on the Record Date for such issuance. To the extent that shares of the corporation’s Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of the corporation’s Common Stock actually delivered. If such rights, options or warrants are not so issued, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such Record Date for such issuance had not occurred.
For purposes of this Section 7(e)(ii), in determining whether any rights, options or warrants entitle the holders to subscribe for or purchase shares of the corporation’s Common Stock at less than such average of the Last Reported Sale Prices of the corporation’s Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement for such issuance, and in determining the aggregate offering price of such shares of the corporation’s Common Stock, there shall be taken into account any consideration received by the corporation for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.
(iii) If the corporation distributes shares of its capital stock, evidences of its indebtedness, other assets or property or rights, options or warrants to acquire shares of its capital stock or other securities, to all or substantially all holders of the corporation’s Common Stock, excluding (A) dividends, distributions or issuances as to which an adjustment was effected pursuant to Section 7(e)(i) or Section 7(e)(ii), (B) dividends or distributions paid exclusively in cash as to which an adjustment was effected pursuant to Section 7(e)(iv) and (C) Spin-Offs as to which the provisions
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set forth below in this Section 7(e)(iii) shall apply (any of such shares of capital stock, evidences of indebtedness, other assets or property or rights, options or warrants to acquire capital stock or other securities of the corporation, the “Distributed Property”), then the Conversion Rate shall be increased based on the following formula:
where,
| CR0 | = | the Conversion Rate in effect immediately prior to the close of business on the Record Date for such distribution; | ||
| CR' | = | the Conversion Rate in effect immediately after the close of business on such Record Date; | ||
| SP0 | = | the average of the Last Reported Sale Prices of the corporation’s Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and | ||
| FMV | = | the fair market value (as determined by the Board of Directors) of the Distributed Property with respect to each outstanding share of the corporation’s Common Stock on the Ex-Dividend Date for such distribution. | ||
Any increase made under the portion of this Section 7(e)(iii) above shall become effective immediately after the close of business on the Record Date for such distribution. If such distribution is not so paid or made, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such distribution had not been declared. Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each holder of the Series B Convertible Preferred Stock shall receive per share of Series B Convertible Preferred Stock, at the same time and upon the same terms as holders of the corporation’s Common Stock receive the Distributed Property, the amount of Distributed Property such holder would have received if such holder owned a number of shares of the corporation’s Common Stock equal to the Conversion Rate in effect on the Record Date for the distribution. If the Board of Directors determines the “FMV” (as defined above) of any distribution for purposes of this Section 7(e)(iii) by reference to the actual or when-issued trading market for any securities, it shall in doing so consider the prices in such market over the same period used in computing the Last Reported Sale Prices of the corporation’s Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution.
With respect to an adjustment pursuant to this Section 7(e)(iii) where there has been a payment of a dividend or other distribution on the corporation’s Common Stock of shares of capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit of the corporation, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Conversion Rate shall be increased based on the following formula:
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where,
| CR0 | = | the Conversion Rate in effect immediately prior to the close of business on the Record Date for such Spin-Off; | ||
| CR' | = | the Conversion Rate in effect immediately after the close of business on such Record Date; | ||
| FMV0 | = | the average of the Last Reported Sale Prices of the capital stock or similar equity interest distributed to holders of the corporation’s Common Stock applicable to one share of the corporation’s Common Stock over the 10 consecutive Trading Day period beginning on, and including, the Ex-Dividend Date of such Spin-Off (the “Valuation Period”); and | ||
| MP0 | = | the average of the Last Reported Sale Prices of the corporation’s Common Stock over the Valuation Period. | ||
The adjustment to the Conversion Rate under the preceding paragraph shall be determined on the last Trading Day of the Valuation Period but shall be given effect at the open of business on the Ex-Dividend Date for such Spin-Off; provided that in respect of any conversion of Series B Convertible Preferred Stock during the Valuation Period, references in the portion of this Section 7(e)(iii) related to Spin-Offs to 10 consecutive Trading Days shall be deemed to be replaced with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date of such Spin-Off to, but excluding, the Conversion Date in determining the Conversion Rate. If such Spin-Off does not occur, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such distribution had not been declared, effective as of the date on which the Board of Directors determines not to consummate such Spin-Off.
For purposes of this Section 7(e)(iii) (and subject in all respects to Section 7(e)(viii)), rights, options or warrants distributed by the corporation, pursuant to a shareholder rights plan, to all or substantially all holders of shares of its Common Stock entitling them to subscribe for or purchase shares of the corporation’s capital stock, including its Common Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of the corporation’s Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of the corporation’s Common Stock, shall be deemed not to have been distributed for purposes of this Section 7(e)(iii) (and no adjustment to the Conversion Rate under this Section 7(e)(iii) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 7(e)(iii). If any such rights, options or warrants, including any such existing rights, options or warrants distributed prior to the date of these Articles of Amendment, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Ex-Dividend Date with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other event (of the type described in the immediately preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 7(e)(iii) was made, (1) in the case of any
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such rights, options or warrants that shall all have been redeemed or purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution, Trigger Event or other event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by a holder or holders of the corporation’s Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of the corporation’s Common Stock as of the date of such redemption or purchase, and (2) in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued.
For purposes of Section 7(e)(i), Section 7(e)(ii) and this Section 7(e)(iii), any dividend or distribution to which this Section 7(e)(iii) is applicable that also includes one or both of:
| (A) | a dividend or distribution of shares of the corporation’s Common Stock to which Section 7(e)(i) is applicable (the “Clause A Distribution”); or |
| (B) | a dividend or distribution of rights, options or warrants to which Section 7(e)(ii) is applicable (the “Clause B Distribution”), |
then (1) such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a dividend or distribution to which this Section 7(e)(iii) is applicable (the “Clause C Distribution”) and any Conversion Rate adjustment required by this Section 7(e)(iii) with respect to such Clause C Distribution shall then be made, and (2) the Clause A Distribution and Clause B Distribution shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 7(e)(i) and Section 7(e)(ii) with respect thereto shall then be made, except that, if determined by the corporation (I) the “Record Date” of the Clause A Distribution and the Clause B Distribution shall be deemed to be the Record Date of the Clause C Distribution and (II) any shares of the corporation’s Common Stock included in the Clause A Distribution or Clause B Distribution shall be deemed not to be “outstanding immediately prior to the close of business on such Record Date or the open of business on such Effective Date” within the meaning of Section 7(e)(i) or “outstanding immediately prior to the close of business on such Record Date” within the meaning of Section 7(e)(ii).
(iv) If the corporation makes any cash dividend or distribution to all or substantially all holders of the corporation’s Common Stock, the Conversion Rate shall be adjusted based on the following formula:
where,
| CR0 | = | the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend or distribution; | ||
| CR' | = | the Conversion Rate in effect immediately after the close of business on such Record Date; | ||
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| SP0 | = | the Last Reported Sale Price of the corporation’s Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and | ||
| C | = | the amount in cash per share the corporation distributes to all or substantially all holders of its Common Stock. | ||
Any increase pursuant to this Section 7(e)(iv) shall become effective immediately after the close of business on the Record Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Rate shall be decreased, effective as of the date the Board of Directors determines not to make or pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each holder of the Series B Convertible Preferred Stock shall receive per share of Series B Convertible Preferred Stock, at the same time and upon the same terms as holders of shares of the corporation’s Common Stock, the amount of cash that such holder would have received if such holder owned a number of shares of the corporation’s Common Stock equal to the Conversion Rate on the Record Date for such cash dividend or distribution.
(v) If the corporation or any of its subsidiaries makes a payment in respect of a tender or exchange offer for the corporation’s Common Stock, and the cash and value of any other consideration included in the payment per share of the corporation’s Common Stock exceeds the average of the Last Reported Sale Prices of the corporation’s Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date (the “Tender Expiration Date”) on which tenders or exchanges may be made pursuant to such tender offer or exchange offer, as the case may be, the Conversion Rate shall be increased based on the following formula:
where,
| CR0 | = | the Conversion Rate in effect immediately prior to the open of business on the Trading Day next succeeding the Tender Expiration Date; | ||
| CR' | = | the Conversion Rate in effect immediately after the open of business on the Trading Day next succeeding the Tender Expiration Date; | ||
| AC | = | the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares of the corporation’s Common Stock purchased in such tender or exchange offer; | ||
| OS0 | = | the number of shares of the corporation’s Common Stock outstanding immediately prior to the open of business on the date such tender or exchange offer is consummated (prior to giving effect to the purchase of all shares of the corporation’s Common Stock accepted for purchase or exchange in such tender or exchange offer); | ||
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| OS' | = | the number of shares of the corporation’s Common Stock outstanding immediately after the open of business on the date such tender or exchange offer is consummated (after giving effect to the purchase of all shares of the corporation’s Common Stock accepted for purchase or exchange in such tender or exchange offer); and | ||
| SP' | = | the average of the Last Reported Sale Prices of the corporation’s Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the Tender Expiration Date. | ||
The adjustment to the Conversion Rate under this Section 7(e)(v) shall be determined at the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the Tender Expiration Date but will be given effect at the open of business on the Trading Day next succeeding the Tender Expiration Date; provided that, in respect of any conversion of Series B Convertible Preferred Stock within the 10 Trading Days immediately following, and including, the Trading Day next succeeding the Tender Expiration Date of any tender or exchange offer, references with respect to 10 consecutive Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the Tender Expiration Date of such tender or exchange offer and the Conversion Date in determining the Conversion Rate. For the avoidance of doubt, no adjustment under this Section 7(e)(v) shall be made if such adjustment would result in a decrease in the Conversion Rate.
(vi) Except as stated herein, the corporation shall not adjust the Conversion Rate for the issuance of shares of its Common Stock or any securities convertible into or exchangeable for shares of its Common Stock or the right to purchase shares of its Common Stock or such convertible or exchangeable securities.
(vii) In addition to those adjustments required by subsections (i), (ii), (iii), (iv) and (v) of this Section 7(e), and to the extent permitted by applicable law and subject to the applicable rules of the NYSE, the corporation from time to time may increase the Conversion Rate by any amount for any period of at least 20 Business Days if the Board of Directors has determined that such increase would be in the corporation’s best interest. In addition, the corporation may (but is not required to) increase the Conversion Rate, as the Board of Directors considers advisable, to avoid or diminish any income tax to holders of the corporation’s Common Stock or rights to purchase the corporation’s Common Stock in connection with any dividend or distribution of stock (or rights to acquire stock) or any event treated as such for tax purposes. Whenever the Conversion Rate is increased pursuant to either of the preceding two sentences, the corporation shall deliver, or cause to be delivered, to each holder of Series B Convertible Preferred Stock notice of the increase at least 15 days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.
(viii) If the corporation has a shareholder rights plan in effect upon conversion of the Series B Convertible Preferred Stock, each share of the corporation’s Common Stock issued upon such conversion shall be entitled to receive the appropriate number of rights, if any, and the certificates representing the Common Stock of the corporation issued upon such conversion shall bear such legends, if any, in each case as may be provided by the terms of any such shareholder rights plan, as the same may be amended from time to time. However, if prior to any conversion the rights have separated from the shares of the corporation’s Common Stock in accordance with the provisions of the applicable shareholder rights plan, the Conversion Rate shall be adjusted at the time of separation as if the corporation distributed to all or substantially all holders of its Common Stock Distributed Property as described in Section 7(e)(iii), subject to readjustment in the event of the expiration, termination or redemption of such rights.
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(ix) Except as stated herein, the Conversion Rate shall not be adjusted:
(A) upon the issuance of any shares of the corporation’s Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the corporation’s securities and the investment of additional optional amounts in shares of the corporation’s Common Stock under any plan;
(B) upon the issuance of any shares of the corporation’s Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the corporation or any of its subsidiaries;
(C) upon the issuance of any shares of the corporation’s Common Stock pursuant to any option, warrant, right (other than rights under a shareholder rights plan as described in Section 7(e)(viii)) or exercisable, exchangeable or convertible security, in each case, not described in clause (B) of this subsection (ix);
(D) solely for a change in the par value (or lack of par value) of the corporation’s Common Stock; or
(E) for accrued, accumulated and unpaid dividends, if any.
(f) All calculations and other determinations in respect of the Conversion Rate shall be made by the corporation to the nearest 1/10,000th of a share. Notwithstanding this Section 7 or any other provision of these Articles of Amendment, no adjustment to the Conversion Rate shall be made unless such adjustment would require an increase or decrease of at least 1.0% of the Conversion Rate. If any adjustment is not made because it would have required an increase or decrease of less than 1.0% of the Conversion Rate, such adjustment will be carried forward and made upon the first to occur of (i) any subsequent adjustment when the cumulative net effect of all adjustments not yet made will result in a change of at least 1.0% of the Conversion Rate, (ii) July 15 of each year, and (iii) any conversion of the Series B Convertible Preferred Stock.
(g) Upon any increase or decrease in the Conversion Rate, then, and in each such case, the corporation promptly shall deliver, or cause to be delivered, to each holder of Series B Convertible Preferred Stock notice of the increase or decrease and setting forth in reasonable detail the method by which such adjustment was determined and specifying the increased or decreased Conversion Rate then in effect following such adjustment.
(h) [Reserved.]
(i) The corporation shall not take any voluntary action that would result in an adjustment pursuant to any of the provisions described in clauses (i) through (v) of Section 7(e) or in Section 9 without complying, if applicable, with the stockholder approval rules of the NYSE (including, without limitation, NYSE Listed Company Manual Rule 312.03, which requires stockholder approval of certain issuances of the corporation’s Common Stock) or any similar rule of any other stock exchange on which the corporation’s Common Stock is listed at the relevant time.
(j) Whenever any provision of these Articles of Amendment requires the corporation to calculate the Last Reported Sale Prices, the Closing Sale Prices or the Daily VWAPs over a span of multiple days (including the period for determining the Fundamental Change Stock Price), the Board of Directors shall make appropriate adjustments to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Record Date, Effective Date or Tender Expiration Date of the event occurs, at any time during the relevant period.
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(k) In the event of (i) any consolidation or merger of the corporation with or into another Person (other than a merger or consolidation in which the corporation is the continuing corporation and in which the shares of the corporation’s Common Stock outstanding immediately prior to the merger or consolidation are not exchanged for cash, securities or other property of the corporation or another Person), (ii) any sale, transfer, lease or conveyance to another Person of all or substantially all of the corporation’s property and assets, (iii) any reclassification of the corporation’s Common Stock into securities including securities other than the corporation’s Common Stock, or (iv) any statutory exchange of the corporation’s securities with another Person (other than in connection with a merger or acquisition) (each of clauses (i) through (iv) herein referred to as a “Reorganization Event”), then, immediately prior to such Reorganization Event, the right to convert each share of Series B Convertible Preferred Stock shall, without the consent of the holders of the Series B Convertible Preferred Stock, be changed into a right to convert it into the kind of securities, cash and other property (the “Reference Property”) that such holder would have been entitled to receive if such holder held a number of shares of the corporation’s Common Stock equal to the Conversion Rate immediately prior to such Reorganization Event. For purposes of the foregoing, the type and amount of Reference Property in the case of any Reorganization Event or other transaction that causes the corporation’s Common Stock to be converted into the right to receive more than a single type of consideration that is determined based in part upon any form of shareholder election shall be deemed to be the amount and type of consideration received by the holders of the corporation’s Common Stock who affirmatively make such an election.
(l) The corporation shall at all times reserve and keep available for issuance upon the conversion of the Series B Convertible Preferred Stock such number of authorized but unissued shares of the corporation’s Common Stock as shall from time to time be sufficient to permit the conversion of all outstanding shares of Series B Convertible Preferred Stock and shall take all action required to increase the authorized number of shares of the corporation’s Common Stock if at any time there shall be insufficient unissued shares of the corporation’s Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Series B Convertible Preferred Stock or the payment or partial payment of dividends declared on Series B Convertible Preferred Stock that are payable in shares of the corporation’s Common Stock.
(m) The issuance or delivery of certificates for shares of the corporation’s Common Stock upon the conversion of shares of Series B Convertible Preferred Stock or the payment or partial payment of a dividend on Series B Convertible Preferred Stock in shares of the corporation’s Common Stock shall be made without charge to the converting holder or recipient of shares of Series B Convertible Preferred Stock for such certificates or for any tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered in the respective names of, or in such names as may be directed by, the holders of the shares of Series B Convertible Preferred Stock converted; provided, however, that the corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the holder of the shares of the relevant Series B Convertible Preferred Stock and the corporation shall not be required to issue or deliver such certificate unless or until the Person(s) requesting the issuance or delivery thereof shall have paid to the corporation the amount of such tax or shall have established to the reasonable satisfaction of the corporation that such tax has been paid.
8. CONVERSION UPON A FUNDAMENTAL CHANGE.
(a) If a Fundamental Change occurs, each holder of Series B Convertible Preferred Stock that converts its shares of Series B Convertible Preferred Stock at any time during the period (the “Fundamental
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Change Conversion Period”) beginning on the Fundamental Change Effective Date and ending on the date that is 15 days after the Fundamental Change Effective Date (the “Expiration Date”) shall receive, for each share of Series B Convertible Preferred Stock converted, (A) a number of shares of the corporation’s Common Stock equal to the then-applicable Conversion Rate, plus (B) the Make-Whole Premium, if any, described in Section 9.
(b) If the Amendment Effective Date or the Shareholder Approval Date has occurred prior to the commencement of the Fundamental Change Conversion Period, in addition to the number of shares of the corporation’s Common Stock issuable upon conversion of each share of Series B Convertible Preferred Stock at the option of the holder on any Conversion Date during the Fundamental Change Conversion Period, each converting holder shall have the right to receive an amount equal to all accrued, accumulated and unpaid dividends on such converted shares of Series B Convertible Preferred Stock, whether or not declared prior to that date, for all prior Dividend Periods ending on or prior to the Dividend Payment Date immediately preceding the Conversion Date (other than previously declared dividends on the Series B Convertible Preferred Stock payable to holders of record as of a prior date), provided that the corporation is then legally permitted to pay such dividends. The amount payable in respect of such dividends shall be paid in cash, shares of the corporation’s Common Stock (or Publicly Traded Common Stock of the acquiror, if applicable) or a combination thereof in accordance with the provisions set forth in Section 4, including the provisions setting forth the method for valuing the corporation’s Common Stock (which shall also apply to any Publicly Traded Common Stock of the acquiror), set forth in Section 5(b).
(c) The corporation must give notice (a “Fundamental Change Notice”) of each Fundamental Change to all record holders of the Series B Convertible Preferred Stock by the later of 20 days prior to the anticipated Fundamental Change Effective Date (determined in good faith by the Board of Directors) and the first public disclosure by the corporation of the anticipated Fundamental Change, if practicable, and otherwise by the earliest practicable date, of the anticipated Fundamental Change Effective Date. The Fundamental Change Notice shall be given by first-class mail to each record holder of shares of Series B Convertible Preferred Stock, at such holder’s address as the same appears on the books of the corporation. Each such Fundamental Change Notice shall state (i) the anticipated Fundamental Change Effective Date; (ii) the Expiration Date based on the anticipated Fundamental Change Effective Date; (iii) the name and address of the Transfer Agent; (iv) whether accumulated and unpaid dividends will be paid in cash, shares of the corporation’s Common Stock (or Publicly Traded Common Stock of the acquiror, if applicable) or a combination thereof; and (v) the procedures that holders must follow to convert their shares of Series B Convertible Preferred Stock pursuant to this Section 8.
(d) On or before the Expiration Date, each holder of shares of Series B Convertible Preferred Stock wishing to exercise its conversion right pursuant to this Section 8 shall comply with the procedures set forth in Section 7(c), and on such date the shares of the corporation’s Common Stock (or Publicly Traded Common Stock of the acquiror, if applicable) and the payment for unpaid dividends due to such holder (if applicable) shall be delivered to the Person whose name appears on the surrendered certificate or certificates as the owner thereof and the shares of Series B Convertible Preferred Stock represented by each surrendered certificate shall be returned to authorized but unissued shares of Series B Convertible Preferred Stock.
9. MAKE-WHOLE PREMIUM FOR CONVERSION UPON A FUNDAMENTAL CHANGE.
(a) For holders who elect to convert shares of Series B Convertible Preferred Stock during the Fundamental Change Conversion Period, the corporation will increase the Conversion Rate by an additional number of shares of the corporation’s Common Stock for each share of Series B Convertible Preferred Stock so converted (the “Additional Shares” or the “Make-Whole Premium”), if any, as set forth below in this Section 9.
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(b) The number of Additional Shares shall be determined by reference to the table below, based on the Fundamental Change Effective Date and the Fundamental Change Stock Price.
Fundamental Change Stock Price
| Fundamental Change Effective Date |
$14.11 | $15.00 | $17.50 | $18.34 | $20.00 | $23.85 | $25.00 | $30.00 | $40.00 | $50.00 | $75.00 | $100.00 | ||||||||||||||||||||||||||||||||||||
| June 11, 2014 |
163.54 | 163.54 | 142.19 | 133.25 | 118.18 | 92.65 | 86.83 | 67.57 | 45.41 | 33.04 | 17.36 | 9.73 | ||||||||||||||||||||||||||||||||||||
| July 15, 2015 |
163.54 | 159.49 | 126.93 | 118.39 | 104.10 | 80.31 | 74.97 | 57.63 | 38.36 | 27.90 | 14.83 | 8.48 | ||||||||||||||||||||||||||||||||||||
| July 15, 2016 |
163.54 | 143.23 | 111.28 | 102.99 | 89.25 | 66.91 | 62.03 | 46.65 | 30.52 | 22.18 | 11.94 | 6.98 | ||||||||||||||||||||||||||||||||||||
| July 15, 2017 |
163.54 | 129.06 | 96.45 | 88.05 | 74.25 | 52.53 | 47.98 | 34.40 | 21.76 | 15.80 | 8.64 | 5.17 | ||||||||||||||||||||||||||||||||||||
| July 15, 2018 |
163.54 | 125.28 | 83.74 | 74.58 | 59.50 | 36.30 | 31.76 | 19.76 | 11.62 | 8.48 | 4.74 | 2.90 | ||||||||||||||||||||||||||||||||||||
| July 15, 2019 and thereafter |
163.54 | 121.50 | 77.56 | 67.50 | 50.10 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||||||||||||
(c) The Fundamental Change Stock Prices set forth in the first row of the foregoing table shall be adjusted as of any date on which the Conversion Rate is adjusted. The adjusted Fundamental Change Stock Prices shall equal the Fundamental Change Stock Prices applicable immediately prior to such adjustment multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment giving rise to the Fundamental Change Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted. Each of the Conversion Rates in the table shall be subject to adjustment in the same manner as the Conversion Rate as set forth in Section 7(e).
(d) The exact Fundamental Change Stock Price and Fundamental Change Effective Dates may not be set forth on the table, in which case:
(i) if the Fundamental Change Stock Price is between two Fundamental Change Stock Price amounts on the table or the Fundamental Change Effective Date is between two Fundamental Change Effective Dates on the table, the Make-Whole Premium shall be determined by straight-line interpolation between the Make-Whole Premium amounts set forth for the higher and lower Fundamental Change Stock Price amounts and the two dates, as applicable, based on a 365-day year;
(ii) if the Fundamental Change Stock Price is in excess of $100.00 per share (subject to adjustment as described above), then no Additional Shares shall be added to the Conversion Rate; and
(iii) if the Fundamental Change Stock Price is less than $14.11 per share (subject to adjustment as described above), then no Additional Shares shall be added to the Conversion Rate.
(e) The corporation shall only be required to deliver the Make-Whole Premium with respect to shares of Series B Convertible Preferred Stock surrendered for conversion during any Fundamental Change Conversion Period.
10. MANDATORY CONVERSION.
(a) At any time on or after July 15, 2019, if (x) the Amendment Effective Date or the Shareholder Approval Date has occurred prior to the corporation’s issuance of a press release announcing the
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Mandatory Conversion as described below and (y) the Daily VWAP of the corporation’s Common Stock equals or exceeds 130% of the then-prevailing Conversion Price for at least 20 Trading Days in a period of 30 consecutive Trading Days, including the last Trading Day of such 30-Trading Day period, ending on the Trading Day prior to the corporation’s issuance of a press release (as provided in Section 10(b)) announcing the Mandatory Conversion (as defined below), the corporation may at its option, cause all or a portion of the Series B Convertible Preferred Stock to be automatically converted (a “Mandatory Conversion”) into a number of shares of the corporation’s Common Stock for each share of the Series B Convertible Preferred Stock equal to the then-applicable Conversion Rate. In connection with any such Mandatory Conversion, the corporation shall also pay converting holders any accumulated and unpaid dividends on their shares of the Series B Convertible Preferred Stock (whether or not declared) for all Dividend Periods prior to the Mandatory Conversion Date and for the then-current Dividend Period during which the Mandatory Conversion Date occurs (other than previously declared dividends on the Series B Convertible Preferred Stock payable to holders of record as of a prior date). The amount payable in respect of such accumulated and unpaid dividends shall be paid in cash, shares of Common Stock or a combination thereof in accordance with the provisions set forth in Sections 4 and 5, including the provisions setting forth the method for valuing the corporation’s Common Stock set forth in Section 5(b).
(b) To exercise the Mandatory Conversion right described in Section 10(a), the corporation shall issue a press release for publication on the Dow Jones News Service or Bloomberg Business News (or if either such service is not available, another broadly disseminated news or press release service selected by the corporation) prior to the opening of business on the first Trading Day following any date on which the conditions described in Section 10(a) are met, announcing such a Mandatory Conversion. The corporation shall also give notice by mail or by publication (with subsequent prompt notice by mail) to the registered holders of the Series B Convertible Preferred Stock (not more than four Business Days after the date of the press release) of the Mandatory Conversion announcing the corporation’s intention to convert the Series B Convertible Preferred Stock. The Conversion Date shall be a date selected by the corporation (the date so selected, the “Mandatory Conversion Date”) and shall be no more than 20 Trading Days after the date on which the corporation issues such press release.
(c) In addition to any information required by applicable law or regulation, the press release and notice of a Mandatory Conversion described in Section 10(b) shall state, as appropriate: (i) the Mandatory Conversion Date; (ii) the number of shares of the corporation’s Common Stock to be issued upon conversion of each share of Series B Convertible Preferred Stock; (iii) the number of shares of Series B Convertible Preferred Stock to be converted; (iv) whether the corporation shall pay accumulated dividends in cash, shares of the corporation’s Common Stock or a combination thereof; and (v) that dividends on the shares of Series B Convertible Preferred Stock to be converted shall cease to accrue on the Mandatory Conversion Date.
(d) On and after the Mandatory Conversion Date, dividends shall cease to accrue on the Series B Convertible Preferred Stock called for a Mandatory Conversion and all rights of holders of such Series B Convertible Preferred Stock shall terminate, except for the right to receive shares of the corporation’s Common Stock issuable upon conversion thereof, any accumulated and unpaid dividends (other than previously declared dividends on the Series B Convertible Preferred Stock payable to holders of record as of a prior date) and cash in lieu of fractional shares. The dividend payment with respect to Series B Convertible Preferred Stock called for a Mandatory Conversion on a date during the period between the close of business on any Dividend Record Date to the close of business on the corresponding Dividend Payment Date (if declared) shall be payable on such Dividend Payment Date to the record holder of such share on such Dividend Record Date if such Series B Convertible Preferred Stock has been converted after such Dividend Record Date and prior to such Dividend Payment Date.
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(e) In addition to the Mandatory Conversion provision described in this Section 10, if there are fewer than 1,000 shares of Series B Convertible Preferred Stock outstanding, the corporation may, at any time on or after July 15, 2016, at the corporation’s option, cause all such outstanding shares of Series B Convertible Preferred Stock to be automatically converted into a number of shares of the corporation’s Common Stock for each share of Series B Convertible Preferred Stock equal to the greater of (i) the then applicable Conversion Rate and (ii) the Liquidation Preference divided by the Closing Sale Price of the corporation’s Common Stock as determined on the second Trading Day immediately prior to the Mandatory Conversion Date. The provisions of Section 10 shall apply to any such Mandatory Conversion; provided, however, that (1) the Mandatory Conversion Date shall not be less than 15 days nor more than 30 days after the date on which the corporation issues a press release announcing such Mandatory Conversion and (2) the press release and notice of Mandatory Conversion will state the number of the corporation’s shares of Common Stock to be issued upon conversion of each share of Series B Convertible Preferred Stock.
11. REDEMPTION.
(a) The Series B Convertible Preferred Stock shall not be redeemable at the corporation’s option.
(b) The Series B Convertible Preferred Stock shall not be redeemable at the option of any holder of Series B Convertible Preferred Stock.
12. FRACTIONAL SHARES. No fractional shares of the corporation’s Common Stock shall be issued to holders of the Series B Convertible Preferred Stock upon conversion. In lieu of any fractional shares of the corporation’s Common Stock otherwise issuable in respect of the aggregate number of shares of the Series B Convertible Preferred Stock of any holder that are converted, that holder shall be entitled to receive an amount in cash (computed to the nearest cent) equal to the same fraction of:
(a) in the case of a conversion of Series B Convertible Preferred Stock as a result of a Fundamental Change or a Mandatory Conversion, the average of the Closing Sale Price per share of Common Stock on each of the 10 consecutive Trading Days preceding the Trading Day immediately preceding the Conversion Date; or
(b) in the case of each conversion at the option of a holder, the Closing Sale Price per common share determined as of the second Trading Day immediately preceding the Conversion Date.
Notwithstanding the foregoing, the corporation may elect to round up the number of shares of the corporation’s Common Stock to be delivered upon conversion to the next highest whole number of shares in lieu of making such cash payment. If more than one share of Series B Convertible Preferred Stock is surrendered for conversion at one time by or for the same holder, the number of full shares of the corporation’s Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Series B Convertible Preferred Stock so surrendered.
13. VOTING RIGHTS.
(a) The holders of the Series B Convertible Preferred Stock, except as otherwise required under Virginia law or as set forth in Section 13(b) of these Articles of Amendment or the amended and restated bylaws, as amended, of the corporation, shall not be entitled to vote on any matter required or permitted to be voted upon by the shareholders of the corporation.
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(b) If and whenever at any time dividends on the Series B Convertible Preferred Stock are in arrears and unpaid for six or more Dividend Periods (whether or not consecutive), then the holders of shares of Series B Convertible Preferred Stock, voting as a single class with any series of Parity Stock having similar voting rights that are then exercisable, shall be entitled at the corporation’s next regular or special meeting of shareholders to elect two additional directors to the Board of Directors (as such term is defined in Section 2 hereof, but without regard to the words “or a duly authorized committee thereof” in such definition). Immediately upon the occurrence of such dividend arrearage, the number of directors that comprise the Board of Directors (as such term is defined in Section 2 hereof, but without regard to the words “or a duly authorized committee thereof” in such definition) shall be increased automatically by two additional directors. Such voting rights and the terms of the directors so elected shall continue until such time as the dividend arrearage on the Series B Convertible Preferred Stock has been paid in full. At any time after voting power to elect directors shall have become vested and be continuing in the holders of the Series B Convertible Preferred Stock, or if a vacancy shall exist in the office of any such additional director, the Board of Directors may, and upon written request of the holders of record of at least 25% of the outstanding Series B Convertible Preferred Stock addressed to the chairman of the Board of Directors shall, call a special meeting of the holders of the Series B Convertible Preferred Stock (voting separately as a class with all other series of Parity Stock upon which like voting rights have been conferred and are then exercisable, collectively, the “Voting Group”) for the purpose of electing the directors that such holders are entitled to elect. At any meeting held for the purpose of electing such directors, the presence in person or by proxy of the holders of at least a majority of the Series B Convertible Preferred Stock shall be required to constitute a quorum of such Series B Convertible Preferred Stock (provided that, if there is one or more series of Parity Stock upon which like voting rights have been conferred and are then exercisable, the presence in person or by proxy of the holders of at least a majority of the Voting Group shall be required to constitute a quorum of the Voting Group).
(c) In addition, for so long any shares of Series B Convertible Preferred Stock remain outstanding, unless a greater percentage shall be required by law, the affirmative vote or consent of the holders of more than 66 2/3% of the outstanding shares of Series B Convertible Preferred Stock and all other Parity Stock having similar voting rights that are then exercisable, voting as a single class, in person or by proxy, at an annual meeting of the corporation’s shareholders or at a special meeting called for such purpose, or by written consent in lieu of such meeting, shall be required to alter, repeal or amend, whether by merger, consolidation, combination, reclassification or otherwise, any provisions of the Articles of Incorporation, including the provisions thereof establishing the Series B Convertible Preferred Stock, or the amended and restated bylaws of the corporation, as amended, if the amendment would amend, alter or affect the powers, preferences or rights of the Series B Convertible Preferred Stock so as to adversely affect the holders thereof, including, without limitation, the creation of, increase in the authorized number of, or issuance of, shares of any class or series of Senior Stock, or security convertible into Senior Stock. Notwithstanding the foregoing, the authorization of, the increase in the authorized amount of, or the issuance of any shares of any class or series of Parity Stock or Junior Stock shall not require the consent of the holders of the Series B Convertible Preferred Stock, and shall not be deemed to adversely affect the powers, preferences or rights of the holders of the Series B Convertible Preferred Stock. For the avoidance of doubt, the consummation of a Reorganization Event (as defined in Section 7(i)) in accordance with these Articles of Amendment will not in and of itself give rise to a voting right of the holders of Series B Convertible Preferred Stock.
(d) Prior to the close of business on the applicable Conversion Date, the shares of the corporation’s Common Stock issuable upon conversion of the Series B Convertible Preferred Stock shall not be deemed to be outstanding and holders of Series B Convertible Preferred Stock shall have no voting rights with respect to such shares of Common Stock by virtue of holding the Series B Convertible Preferred Stock, including the right to vote on any amendment to the Articles of Incorporation or these Articles of Amendment that would adversely affect the rights of holders of the corporation’s Common Stock.
(e) The number of votes that each share of Series B Convertible Preferred Stock and any Parity Stock participating in the votes described above shall have shall be in proportion to the Liquidation Preference of such share.
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14. RULE 144A INFORMATION. At any time the corporation is not subject to Section 13 or 15(d) of the Exchange Act, the corporation will, so long as any shares of the Series B Convertible Preferred Stock, any shares of Common Stock issuable upon conversion of the Series B Convertible Preferred Stock or any shares of Common Stock issuable as a dividend on the Series B Convertible Preferred Stock will, at such time, constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to American Stock Transfer & Trust Company, LLC, as Depositary under the Deposit Agreement and, upon written request, provide to any holder, beneficial owner or prospective purchaser of such shares of Series B Convertible Preferred Stock or shares of the corporation’s Common Stock the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such shares of Series B Convertible Preferred Stock or the corporation’s shares of Common Stock pursuant to Rule 144A under the Securities Act. The corporation will take such further action as any holder or beneficial owner of such shares of Series B Convertible Preferred Stock may reasonably request to the extent from time to time required to enable such holder or beneficial owner to sell such shares of Series B Convertible Preferred Stock or shares of the corporation’s Common Stock in accordance with Rule 144A under the Securities Act, as such rule may be amended from time to time.
15. TRANSFER RESTRICTIONS.
(a) Until the date (the “Resale Restriction Termination Date”) that is the later of (1) the date that is one year after the last date of original issuance of the Series B Convertible Preferred Stock or such other period of time as permitted by Rule 144 or any successor provision thereto and (2) such later date, if any, as may be required by applicable law, any certificate evidencing the Series B Convertible Preferred Stock (and all securities issued in exchange therefor or substitution thereof, other than Common Stock of the corporation, if any, issued upon conversion thereof or as a dividend thereon, which shall bear the legend set forth in Section 15(d), if applicable) shall bear a legend in substantially the following form (unless such shares of Series B Convertible Preferred Stock have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the corporation in writing with written notice thereof to the Transfer Agent):
THIS SERIES B CONVERTIBLE PREFERRED STOCK, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SERIES B CONVERTIBLE PREFERRED STOCK AND THE SHARES OF COMMON STOCK ISSUABLE AS A DIVIDEND ON THIS SERIES B CONVERTIBLE PREFERRED STOCK, IF ANY, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NONE OF THIS SERIES B CONVERTIBLE PREFERRED STOCK, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SERIES B CONVERTIBLE PREFERRED STOCK, THE SHARES OF COMMON STOCK ISSUABLE AS A DIVIDEND ON THIS SERIES B CONVERTIBLE PREFERRED STOCK, IF ANY, AND ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE.
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BY ITS ACQUISITION OF THIS SERIES B CONVERTIBLE PREFERRED STOCK OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
1. REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
2. AGREES FOR THE BENEFIT OF PENN VIRGINIA CORPORATION (THE “CORPORATION”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SHARE OF SERIES B CONVERTIBLE PREFERRED STOCK OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE HEREOF OR SUCH OTHER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO, AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:
(A) TO THE CORPORATION OR ANY OF ITS SUBSIDIARIES, OR
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR
(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE CORPORATION AND THE TRANSFER AGENT RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
NO AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE CORPORATION OR PERSON THAT HAS BEEN AN AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE CORPORATION DURING THE THREE IMMEDIATELY PRECEDING MONTHS MAY PURCHASE OR OTHERWISE ACQUIRE THIS SERIES B CONVERTIBLE PREFERRED STOCK OR A BENEFICIAL INTEREST HEREIN.
(b) [Reserved.]
(c) Any share of Series B Convertible Preferred Stock (or security issued in exchange or substitution therefor) as to which such restrictions on transfer shall have expired in accordance with their terms may, upon surrender of such share of Series B Convertible Preferred Stock for exchange to the Transfer Agent, be exchanged for a new share or shares of Series B Convertible Preferred Stock, of like aggregate number of shares of Series B Convertible Preferred Stock, which shall not bear the restrictive
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legend required by Section 15(a) and shall not be assigned a restricted CUSIP number. The corporation shall promptly notify the Transfer Agent upon the occurrence of the Resale Restriction Termination Date and promptly after a registration statement, if any, with respect to the Series B Convertible Preferred Stock or Common Stock issuable upon conversion of the Series B Convertible Preferred Stock has been declared effective under the Securities Act.
(d) Until the Resale Restriction Termination Date, any stock certificate representing Common Stock of the corporation issued upon conversion of the Series B Convertible Preferred Stock shall bear a legend in substantially the following form (unless such Common Stock has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or such Common Stock has been issued upon conversion of shares of the Series B Convertible Preferred Stock that have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the corporation with written notice thereof to the Transfer Agent):
THIS COMMON STOCK HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS COMMON STOCK NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE.
BY ITS ACQUISITION OF THIS COMMON STOCK OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
1. REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
2. AGREES FOR THE BENEFIT OF PENN VIRGINIA CORPORATION (THE “CORPORATION”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SHARE OF COMMON STOCK OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE HEREOF OR SUCH OTHER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO, AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:
(A) TO THE CORPORATION OR ANY OF ITS SUBSIDIARIES, OR
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR
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(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE CORPORATION AND THE TRANSFER AGENT RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
(e) Any shares of the corporation’s Common Stock as to which such restrictions on transfer shall have expired in accordance with their terms may, upon surrender of the certificates representing such shares of Common Stock for exchange in accordance with the procedures of the Transfer Agent, be exchanged for a new certificate or certificates for a like aggregate number of shares of the corporation’s Common Stock, which shall not bear the restrictive legend required by Section 15(d).
(f) The corporation shall not, the corporation shall cause its subsidiaries not to, and the corporation shall use its best efforts to cause any of its affiliates that are not its subsidiaries not to, resell any shares of the Series B Convertible Preferred Stock that would, following such resale, constitute “restricted securities” under Rule 144 that have been reacquired by any of them.
(g) The Series B Convertible Preferred Stock shall initially be issued with a restricted CUSIP number.
16. FORM. All shares of the Series B Convertible Preferred Stock shall be initially issued and represented by book-entry at the Depositary without certificates therefor. Upon a request of a holder of Depositary Shares in accordance with the Deposit Agreement to withdraw shares of Series B Convertible Preferred Stock in exchange for Depositary Shares, such shares of Series B Convertible Preferred Stock shall be issued in global certificated form in accordance with the Deposit Agreement and the Depositary shall make an appropriate book-entry notation in respect of such withdrawn shares. Such global certificate shall have notations, legends or endorsements required by applicable law, applicable NYSE or other securities exchange or Depository Trust Company rules and arrangements and agreements to which the corporation is subject, if any (provided that any such notation, legend or endorsement is in a form acceptable to the corporation).
17. OTHER PROVISIONS.
(a) With respect to any notice to a holder of shares of Series B Convertible Preferred Stock required to be provided hereunder, neither failure to mail such notice, nor any defect therein or in the mailing thereof, to any particular holder shall affect the sufficiency of the notice or the validity of the proceedings referred to in such notice with respect to the other holders or affect the legality or validity of any distribution, rights, warrant, reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding-up, or the vote upon any such action. Any notice which was mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the holder receives the notice.
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(b) Shares of Series B Convertible Preferred Stock that have been issued and reacquired in any manner, including shares of Series B Convertible Preferred Stock purchased or redeemed or exchanged or converted, shall (upon compliance with any applicable provisions of the laws of the Commonwealth of Virginia) have the status of authorized but unissued shares of Preferred Stock of the corporation undesignated as to series and may be designated or redesignated and issued or reissued, as the case may be, as part of any series of Preferred Stock of the corporation; provided that any issuance of such shares as Series B Convertible Preferred Stock must be in compliance with the terms hereof.
(c) The shares of Series B Convertible Preferred Stock shall be issuable only in whole shares.
(d) All notice periods referred to herein shall commence on the date of the mailing of the applicable notice. Notice to any holder of the Series B Convertible Preferred Stock shall be given to the registered address set forth in the corporation’s records for such holder.
(e) Any payments required to be made hereunder on any day that is not a Business Day shall be made on the next succeeding Business Day without interest or additional payment for such delay. Any actions required to be made hereunder on any day that is not a Business Day shall be taken on the next succeeding Business Day.
(f) Holders of Series B Convertible Preferred Stock shall not be entitled to any preemptive rights to acquire additional capital stock of the corporation.
(g) The corporation agrees that it will not take any action in connection with any conversion of the Series B Convertible Preferred Stock (whether upon conversion at the option of holders, conversion upon Fundamental Change, Mandatory Conversion, increase in the Conversion Rate or otherwise) without complying, if applicable, with the shareholder approval rules of the NYSE or the shareholder approval rules on the national securities exchange on which the corporation’s Common Stock is then listed.
(h) The corporation shall use its commercially reasonable efforts to cause the Amendment Effective Date to occur prior to the first Dividend Payment Date. Unless and until the Amendment Effective Date or the Shareholder Approval Date has occurred, the corporation shall seek the approval of its shareholders in accordance with NYSE listing rules to pay dividends on the Series B Convertible Preferred Stock in shares of its Common Stock at each of its annual shareholders’ meetings. The corporation shall notify holders of the Series B Convertible Preferred Stock within one Business Day of the occurrence of the Amendment Effective Date or the Shareholder Approval Date.
3. The Amendments were duly adopted by the corporation’s Board of Directors on May 23, 2014 and June 11, 2014. Pursuant to Section 13.1-639 of the Virginia Stock Corporation Act (the “VSCA”) and the authority conferred upon the Board of Directors by the Articles of Incorporation, no shareholder action was required.
4. Pursuant to Section 13.1-606 of the VSCA, these Articles of Amendment shall be effective at 9:00 a.m. on June 16, 2014.
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IN WITNESS WHEREOF, the corporation has caused these Articles of Amendment to be signed by its authorized officer this June 13, 2014.
| PENN VIRGINIA CORPORATION | ||||
| By: | /s/ Nancy M. Snyder | |||
| Name: | Nancy M. Snyder | |||
| Title: | Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary | |||
[ Signature Page to Articles of Amendment ]
