Preferred Stock Modifications to be voted on at the Feb Shareholder Meeting
Class A Preferred Stock set forth in the Company's Certificate of Incorporation currently provides that holders of the outstanding shares of Class A Preferred Stock will be entitled to convert their shares of Class A Preferred Stock into shares of Common Stock when the first of the following events occur:
Current Status:
(i)The Earnings Test: The Company's pre-tax net operating income (before interest expense) exceeds $20,000,000 for 2 consecutive years.
The $20,000,000 figure does not include any "Extraordinary Revenues or Earnings" generated by:
-businesses acquired by the Company
-by merger,
-consolidation,
-asset or stock acquisition
-or similar transaction
-OR-
(ii) Trigger Price: The closing bid quotation of the Common Stock on the NASDAQ, or any other national exchange, being at least $46.67 on 30 consecutive trading days at any time prior to December 31, 1998 (the "Stock Test").
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Changes To Be Voted On At The Feb. Shareholder Meeting:
Earnings Test: In December 1997,........ recognizing the potential benefits to the Company......and in order to properly incentivize Mrs. Macfarlane, the holder of the Class A Preferred Stock...... the Earnings Test should be modified......to delete from the Earnings Test the exclusion of Extraordinary Revenues and Earnings for purposes of calculating the Company's pre-tax net operating income.
Trigger Price: Trigger Price should be adjusted so that it shall equal the price determined (by multiplying the Trigger Price by a fraction) if any of the following occur:
(A) declare a dividend or make a distribution on the outstanding shares of Common Stock in shares of Common Stock,
(B) subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares, by stock split or otherwise, or
(C) combine or reclassify the outstanding shares of Common Stock into a smaller number of shares, by reverse stock split or otherwise
Jane |
