Answering my own question. From the 10Q ......bold print at issue here apparently ... italicized print the recalled passage that led to my confusion...
<<Note 7 -- Preferred Stock
As of December 31, 1997, the Company became required to redeem the 69,970
outstanding shares of its 8% Noncumulative Preferred Stock with an aggregate
liquidation value of $70.0 million (the "Old Preferred Stock"), to the extent of
funds legally available therefor (generally, the excess of the value of assets
over liabilities) at the redemption price of $1,000 per share. Effective in the
second quarter of 1998, the Company completed the redemption of the Old
Preferred Stock in exchange for the following securities (a) 3,000,000 shares of
its Class A Common Stock, par value $0.01 per share (the "Class A Stock"); (b)
10,000 shares of a new series of 8% Noncumulative Convertible Preferred Stock,
par value $1.00, with an aggregate liquidation value of $20.0 million (the
"Convertible Preferred Stock"); and (c) 21,859 shares of a new series of 8%
Noncumulative Redeemable Preferred Stock, par value $1.00 per share, with an
aggregate liquidation value of $43.7 million (the "Redeemable Preferred Stock").
Each share of Convertible Preferred Stock and Redeemable Preferred Stock
(together, the "New Preferred Stock") will entitle the holder thereof to receive
noncumulative dividends at the rate of 8% per annum, if declared by the
Company's Board of Directors. Each share of Convertible Preferred Stock may be
converted, at the option of the holder thereof, into 500 shares of Class A
Stock, at a conversion price of $4.00 per share, subject to adjustment under
certain circumstances. Beginning in June 2001, the Company will become obligated
to redeem the Convertible Preferred Stock in quarterly installments through
March 2008. Beginning in June 1999, the Company will become obligated to redeem
the Redeemable Preferred Stock in quarterly installments through December 2008.
The Company will have the option to redeem the Redeemable Preferred Stock at any
time and the Convertible Preferred Stock beginning in June 2001, and may at its
election make optional or mandatory redemption payments either in cash or in
shares of Common Stock. In the event that the Company does not have sufficient
funds legally available to make any mandatory redemption payment in cash, the
Company will be required to make such redemption payment by issuing shares of
Common Stock. Shares of Common Stock issued to make any optional or mandatory
redemption payments will be valued at the higher of $2.50 or fair market value
per share of Common Stock. The issuance of Common Stock upon conversion or
redemption of the New Preferred Stock could have a significant dilutive effect
on the equity interests of the Common Stockholders in future periods. See Note
3. >>
A bit confusing. Glad Ed's expertise is in this arena. |
