. . . . .TPEGP. . . . Series "A" Convertible Preferred. . . .PT. III
PREFERRED STOCK
The Company's authorized capital stock includes 10,000,000 shares of
Preferred Stock $.001 par value per share. As of the date of this Prospectus,
the Company has no shares of Preferred Stock outstanding except for 1,000,000
shares of Series A 8 1/2% Convertible Preferred Stock (the "Series A Stock")
described below. The Board of Directors has the authority, without
shareholder approval, to issue the Preferred Stock in one or more series and
to fix the relative rights and preferences thereof. The terms of such
Preferred Stock could include the right to vote, separately or with any other
series of Preferred Stock, on any proposed amendment to the Company's
Certificate of Incorporation or any other proposed corporate action,
including business combinations and other transactions. Such rights could
adversely affect the voting power of the holders of Common Stock. The Board
of Directors does not currently contemplate the issuance of any shares of
Preferred Stock. In addition, the ability of the Company to issue the
authorized but unissued shares of Preferred Stock could be utilized to impede
potential take-overs of the Company.
SERIES A STOCK
As of the date hereof, 1,000,000 shares of Series A Stock are issued and
outstanding. Each share of Series A Stock is convertible at any
time into 1.25 shares of the Company's Common Stock. Holders of the
Series A Stock are entitled to annual dividends of 8 1/2% payable in
cash or Common Stock of the Company, at the Company's option based on the market price of the Common Stock on the date of declaration of the dividend.
See "Dividends" under this caption. The holders of the Series A Stock are entitled to receive $5.00 per
share (plus accrued dividends) upon the liquidation, dissolution or winding
up of the Company, prior to any distributions to the holder of Common Stock.
The Series A Stock is nonvoting.
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DIVIDENDS
The Company has never paid a cash dividend on the Common Stock and
presently intends to retain any future earnings for investment and use in its
business operations. Furthermore, there can be no assurance that the
Company's operations will generate the revenues and cash flow required to
declare a cash dividend or that the Company will have legally available funds
to pay dividends on such Common Stock. Consequently, no cash dividends are
expected to be paid in the foreseeable future except to the extent required
to satisfy the Company's obligations with respect to its outstanding Series A
Stock.
Pursuant to the terms of the Company's outstanding Series A Stock which it
issued in a public offering consummated in December 1994, the Company, at its
option, may pay dividends on such stock in cash or in shares of its Common
Stock. The Company has agreed that it will not pay dividends on the Series A
Stock in shares of its Common Stock without the consent of the Underwriter
during the 18 month period commencing on the effective date of this
Prospectus. See "Risk Factors."
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