ALCATEL DEATH SPIRAL PREFERRED
the shares are convertible at last 20 day average price by third anniversary
the lower the stock goes the more shares they get.
The 200 million loss is how much they estimate they will lose from the 20 day average price and the price they will receive.
By way of example with 20 day average of $1.00 they would get 700 million shares.
tenkwizard.com
SERIES 1 CONVERTIBLE PREFERRED SHARES
360networks' board of directors authorized the issue of 700,000 preferred
shares designated as Series 1 Convertible Preferred Shares ("Series 1 Preferred
Shares") and issued the Series 1 Preferred Shares in November 2000. At any
meeting of 360networks' shareholders, except meetings at which only shareholders
of a specified class of shares (other than the Series 1 Preferred Shares) are
entitled to vote, holders of Series 1 Preferred Shares will be entitled to that
number of votes per share holders of Series 1 Preferred Shares would be entitled
if they had converted their shares into Subordinate Voting Shares. Subject to
the preference of any other class of outstanding Preferred Shares, the holders
of Series 1 Preferred Shares will be entitled to participate equally with
holders of Subordinate Voting Shares on any dividends our board of directors
declares out of funds legally available for the payment of dividends as if the
holders of Series 1 Preferred Shares had converted their shares into Subordinate
Voting Shares. If 360networks is liquidated, dissolved or wound up, the holders
of Series 1 Preferred Shares are entitled to receive, on a priority basis, an
amount equal to their issue price and any accretion to the date of liquidation.
Series 1 Preferred Shares are convertible at the option of the holder into
Subordinate Voting Shares at a conversion price of $21.7193. From the first
anniversary to the third anniversary of the date of issue, provided the closing
price of 360networks' Subordinate Voting Shares is equal to or greater than
$32.57, the Series 1 Preferred Shares are convertible at 360networks' option at
the 20 day weighted average price preceding the date 360networks gives notice of
conversion. In addition, following the third anniversary of the date of issue,
360networks may convert Series 1 Preferred Shares into Subordinate Voting Shares
at the 20 day weighted average price preceding the date 360networks gives notice
of conversion regardless of the closing price of 360networks' Subordinate Voting
Shares. On the twelfth anniversary of the date of issue, the Series 1 Preferred
Shares will be automatically converted into Subordinate Voting Shares at the
20 day weighted average price preceding the date 360networks gives notice of
conversion. In addition, if a competitor of Alcatel acquires more than 30% of
360networks' equity or voting power attached to our shares prior to the earlier
of the third anniversary of the issue date and termination of the technology
cooperation agreement 360networks entered into with Alcatel at the time of the
sale of the Series 1 Preferred Shares, the holder also enjoys certain conversion
rights at a premium amount ranging from 101% to 103% depending upon the date of
conversion. In all circumstances, the amount to be converted is the issue price
for the Series 1 |
