Note
12
CAPITAL
STRUCTURE
In connection with the 1998 Offerings discussed in
Note 4, the Company effected a Recapitalization of its capital
stock. Pursuant to the Recapitalization, which has been given
retroactive effect in the accompanying consolidated financial
statements, the following occurred:
(i) to facilitate the Stock Split described below and
future issuances of capital stock, the total number of authorized
shares of capital stock of the Company was increased to one
billion, consisting of 475,000,000 shares of Class A Common
Stock, 475,000,000 shares of Class B Common Stock and 50,000,000
shares of Preferred Stock, issuable in series;
(ii) each of the existing shares of Common Stock was
converted into one share of Class B Common Stock, and the
Class B Common Stock resulting from that conversion was split
on a 700-for-1 basis (the “Stock Split”), effected as a stock
dividend of 699 additional shares of Class B Common Stock
for each outstanding share; and
(iii) immediately following the Stock Split, each of
the existing shares of Class A Preferred Stock and Class B
Preferred Stock (collectively, the “Existing Preferred Stock”)
was converted into that number of shares of Class B Common
Stock determined by dividing their redemption values ($103
and $2,000, respectively) by the initial public offering price
of $28 per share of Class A Common Stock.
Terms of Class A Common Stock and Class B Common
Stock
Each share of Class A Common Stock sold in the Offerings
resulted from the conversion of one share of Class B Common
Stock concurrently with the consummation of such sale. The
holders of Common Stock are generally entitled to vote as
a single class on all matters upon which shareholders have
a right to vote, subject to the requirements of the applicable
laws and the rights of any series of Preferred Stock to a
separate class vote. Each share of Class A Common Stock entitles
its holder to one vote, and each share of Class B Common Stock
entitles its holder to 10 votes. The Class B Common Stock
is convertible into Class A Common Stock on a share-for-share
basis (i) at the option of the holder thereof at any time,
(ii) upon transfer to a person or entity which is not a Permitted
Transferee (as defined in the Second Restated Articles of
Incorporation), (iii) with respect to shares of Class B Common
Stock acquired after the Recapitalization, at such time as
a corporation, partnership, limited liability company, trust
or charitable organization ceases to be 100% controlled by
Permitted Transferees and (iv) on the date on which the number
of shares of Class B Common Stock outstanding is less than
15% of the then outstanding shares of Common Stock (without
regard to voting rights).
Except for the voting and conversion features, the
terms of Class A Common Stock and Class B Common Stock are
generally similar. That is, the holders are entitled to equal
dividends when declared by the Board and generally will receive
the same per share consideration in the event of a merger,
and be treated on an equal per share basis in the event of
a liquidation or winding up of the Company. In addition, the
Company is not entitled to issue additional shares of Class
B Common Stock, or issue options, rights or warrants to subscribe
for additional shares of Class B Common Stock, except that
the Company may make a pro rata offer to all holders of Common
Stock of rights to purchase additional shares of the class
of Common Stock held by them.
Preferred Stock
The Second Restated Articles of Incorporation authorize
the Board, without any vote or action by the shareholders,
to create one or more series of Preferred Stock up to the
limit of the Company’s authorized but unissued shares of Preferred
Stock and to fix the designations, preferences, rights, qualifications,
limitations and restrictions thereof, including the voting
rights, dividend rights, dividend rate, conversion rights,
terms of redemption (including sinking fund provisions), redemption
price or prices, liquidation preferences and the number of
shares constituting any series.
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