Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Board of Directors
On the Effective Date,
•Edward F. Crawford, Petra Danielsohn-Weil, Marc M. Gibeley, Michael J. Merriman Jr., Clifford D. Nastas and Aron I. Schwartz ceased to be members of Old Invacare’s board of directors, and
•Geoffrey P. Purtill and Steven H. Rosen, current members of Old Invacare’s board of directors, continued serving as members of the board of directors of the Company (the “Board”), together with the newly-appointed members, Marec. E. Edgar, Abraham T. Han, Peter J. Kuipers, Kimberly S. Lody, and Randel G. Owen.
Mr. Edgar has served since 2020 as the President & Chief Executive Officer of A.M. Castle & Co., a global metals distributor and value-added processing and supply chain solutions provider, headquartered in suburban Chicago, Illinois, with more than twenty branches around the world (“Castle”). Prior to 2020, Mr. Edgar held positions of increasing responsibility at Castle covering all aspects of its business, including Vice-President, General Counsel & Secretary (2014-2015), Executive Vice-President, General Counsel, Secretary, & Chief Administrative Officer (2015-2018), and President (2018-2020). Before it went private in 2020, Castle was traded on the New York Stock Exchange. Between 2004 and 2014, Mr. Edgar held positions of increasing responsibility in the legal department of Gardner Denver, Inc. (n/k/a Ingersoll Rand)(“Gardner Denver”), a global manufacturer of industrial pumps, compressors and blowers, culminating as the Assistant General Counsel & Chief Compliance Officer. During his tenure at Gardner Denver, the company was publicly traded on the NYSE and privately owned by private equity giant Kohlberg Kravis Roberts (“KKR”).
Mr. Han is Managing Director of GLC Advisors & Co., LLC, an independent financial advisory firm which he co-founded in 2009 (“GLC”). Mr. Han has served on Star Tribune’s official unsecured creditors committee in bankruptcy, PRC and Urigen’s Board of Directors, and as board observer of ADS Logistics and River’s Casino (Pittsburgh) and Fallbrook Technologies. Mr. Han currently serves on the Board of Trustees of Saddle River Day School. Prior to co-founding GLC, Mr. Han was a Principal at GLC Investment Advisors where he primarily focused on distressed investing. Mr. Han was also an Executive Director in UBS’ Restructuring and Leveraged Finance Groups. Prior to joining UBS, Mr. Han was the Steel Division Manager for Hyundai Corp. (USA). Mr. Han holds an MBA from Northwestern University and a BA degree from Rutgers University. He successfully completed the following FINRA Administered Qualification Examination: Series 7, 24, 63. Mr. Han held a gaming license with the State of Pennsylvania. In connection with the Chapter 11 Cases, GLC was retained to provide advisory services to the ad hoc committee of the Unsecured Noteholders. As remuneration for such services, Invacare paid to GLC monthly fees from December 2022 through April 2023, in the amount of $150,000 per month, and on the Effective Date, the Company paid to GLC approximately $2.2 million in Restructuring Expenses (as defined in the Plan).
Mr. Kuipers has served as Executive Vice President and Chief Financial Officer of Omnicell Inc., a global healthcare technology leader in medication management automation solutions and advanced services since August 2015. Mr. Kuipers also leads the global supply chain, information technology, international commercial, corporate development, and M&A teams of Omnicell. Prior to Omnicell, Mr. Kuipers served as Senior Vice President and Chief Financial Officer of Quantcast Corp., a global technology company that specializes in digital audience measurement and real-time advertising. From May 2013 to December 2014, Mr. Kuipers served as Executive Vice President and Chief Financial Officer of The Weather Company, a media and global technology leader operating The Weather Channel, weather.com, wunderground.com and its professional services division WSI. From September 2009 to April 2013, Mr. Kuipers served in various financial management positions, including Vice President, Finance for the Americas region, at Yahoo! Inc., a global internet technology company. Mr. Kuipers held financial leadership roles at Altera Corporation, General Electric Company, and Akzo Nobel N.V. He started his career with Ernst & Young and worked in both the Netherlands and Seattle, Washington. Mr. Kuipers received a master’s degree in Economics and Business Administration from Maastricht University and is a Chartered Accountant in the Netherlands. He has more than 25 years of financial leadership experience.
Ms. Lody has served since February 2022 as non-executive Director of Convatec Group, a $2 billion medical products and technologies company listed on the London Stock Exchange and based in Reading, Berkshire, England. Since February 2023, Ms. Lody has also served as non-executive Director of Ball Ventures, a privately held diversified investment and operating company based in Idaho Falls, Idaho. In addition, effective May 1, 2023, Ms. Lody serves as non-executive Director of Mozarc Medical, a newly formed company privately held by Medtronic (NYSE: MDT) and DaVita (NYSE: DVA). From May 2014 to January 2019, Ms. Lody served as a non-executive Director of Sonida Senior Living (“Sonida”), where she was the Chair of the Compensation Committee and served on the Nominating and Governance Committee. From January 2019 until her retirement in September 2022, Ms. Lody served as President and Chief Executive Officer of Sonida while continuing to serve as a director on the Audit, Nominating & Governance, and Compensation Committees of Sonida's board. Prior to joining Sonida, Ms. Lody was employed as President of GN Hearing North America, a subsidiary of GN Store Nord, a publicly held company listed on the Copenhagen Stock Exchange. Prior to GN Hearing, Ms. Lody served as VP Marketing and then President, US Chronic Care at Coloplast; as Chief Operating Officer of Senior Home Care, as Chief Marketing Officer of Gentiva Health Services, and as VP Managed Care Programs for Apria Healthcare. Ms. Lody received a Bachelor of Arts degree in Business with a minor in Political Science from Hiram College and a Master of Business Administration with concentration in finance from Wake Forest University.
Mr. Owen served from March 2018 to November 2022 as president and chief executive officer of Global Medical Response, an industry-leading air, ground, specialty and residential fire services and managed medical transportation organization. From July 1999 to March 2018, he served as president of ambulatory services, chief financial officer and executive vice president of Envision Healthcare Corporation, a publicly held healthcare company and national emergency services provider, and its predecessor companies including AMR and EmCare. He was appointed executive vice president and chief financial officer of AMR in March 2003. He joined EmCare in July 1999 and served as executive vice president and chief financial officer from June 2001 to March 2003. Before joining EmCare, Mr. Owen was vice president of Group Financial Operations for PhyCor, Inc. from 1995 to 1999. Since 2009, Mr. Owen has served on the board of directors FirstCash Holdings, Inc. (Nasdaq: FCFS), a leading international operator of pawn stores and provider of technology-driven point-of-sale payment solutions, serving cash and credit-constrained consumers, and serves as chair of its nominating and corporate governance committee and as a member of its audit committee. Mr. Owen has more than 35 years of experience in the healthcare industry.
The Board of Directors of the Company will have (i) an Audit Committee, comprised of Mr. Kuipers, as Chair, and Messrs. Owen and Rosen as committee members and (ii) a Compensation, Nominating and Governance Committee, comprised of Ms. Lody, as Chair, and Messrs. Edgar and Han, as committee members. Mr. Rosen will serve as non-executive Chairman of the Board.
Board members will serve until the 2024 annual meeting of stockholders of the Company and until their successors have been duly elected and qualified (subject to earlier death, resignation, retirement, disqualification or removal).
Each non-executive Director, other than Mr. Rosen, will receive: (i) an annual retainer of $65,000, payable in cash on a quarterly basis, and (ii) an annual equity grant of restricted stock units in an amount of $115,000, the initial grant of which will be based on an emergence date enterprise value of $1.72 per share. Mr. Rosen, as non-executive Chair, will receive: (i) an annual retainer of $85,000, payable in cash on a quarterly basis, and (ii) an annual equity grant of restricted stock units in an amount of $150,000, the initial grant of which will be based on an emergence date enterprise value of $1.72 per share.
In connection with the transactions entered into on the Effective Date, Mr. Rosen will receive a warrant to acquire 2% of the Common Stock of the Company exercisable at an enterprise value of $285 million, vesting ratably over a 3-year period, or if sooner, upon the Company's attainment of an enterprise value of $400 million.
Pursuant to agreements entered into as of the Effective Date, Highbridge and five holders of Convertible Preferred Stock each are entitled to designate, from time to time, one observer to the Board. Such board observer rights, which are subject to the rights and restrictions in Section 3.18 of the Company's Bylaws and the applicable observer agreement, permit the observers' attendance at Board meetings and participation in discussions at such meetings, and provide for reimbursement for reasonable documented out-of-pocket expenses incurred by the observer in connection with attending meetings; provided, that, any individual's service as an observer is conditioned on such individual's execution of an agreement with the Company that preserves the confidentiality of Company information and Board discussions.
Indemnification Agreements
In accordance with the Plan, the Board approved a form of indemnification agreement (the “Indemnification Agreement”) to be entered into by members of the Board and certain of the Company’s executive officers. The Indemnification Agreement provides for, among other things, the mandatory advancement and reimbursement of reasonable expenses (subject to limited exceptions) incurred by indemnitees in various legal proceedings in which they may be involved by reason of their service as directors or officers, as applicable, as permitted by Delaware law, the Charter and the Bylaws (each as defined below). Each of the Company’s executive officers and directors has entered or will enter into an Indemnification Agreement.
The foregoing description of the Indemnification Agreement is qualified in its entirety by reference to the Indemnification Agreement, which is filed as Exhibits 10.3 to this Current Report on Form 8-K and incorporated herein by reference.
Employment Agreements
On the Effective Date, the Company entered into employment agreements with each of Geoffrey P. Purtill, the Company’s President and Chief Executive Officer, Kathleen P. Leneghan, the Company’s Senior Vice President and Chief Financial Officer, Anthony C. LaPlaca, the Company’s Senior Vice President, General Counsel and Chief Administrative Officer (each, an “Employment Agreement”), to supersede each of Messrs. Purtill’s and LaPlaca’s and Ms. Leneghan’s existing employment agreements entered into with Old Invacare.
Pursuant to their respective Employment Agreement, each executive is entitled to the following base salaries: Mr. Purtill, $750,000, Ms. Leneghan, $484,100, and Mr. LaPlaca, $475,417. The Employment Agreements also provide that each executive is eligible to earn an annual bonus, with a target bonus opportunity of 100% of Mr. Purtill’s base salary and 75% of Mr. LaPlaca’s and Ms. Leneghan’s base salaries, respectively.
Each executive is entitled to receive severance payments and benefits upon a qualifying termination of his or her employment by the Company without Cause or by such executive for Good Reason (each, as defined in each executive’s Employment Agreement) consisting of the following: (i) payment of base salary in effect as of the termination date for a period of 12 months (the “Severance Period”), payable in accordance with the established payroll practices of the Company (the “Severance Amount”), (ii) any annual bonus earned but unpaid with respect to the Company’s fiscal year ending on or preceding the date of termination, (iii) a prorated annual bonus for the fiscal year in which the termination occurs, calculated based on target annual bonus and paid in lump sum on the first regularly scheduled payroll date following the 60th day after the date of termination, (iv) outplacement assistance services that are customarily provided by the Company to terminated senior management employees during the Severance Period, and (v) continuation of any health care plan coverage provided to such executive and his or her dependents and payment of premiums, at the Company’s expense, at the same level and cost to each executive as if the executive were an employee of the Company during the Severance Period (provided that such continued coverage will terminate in the event such executive obtains other employment that offers substantially comparable group health benefits) (the “COBRA Benefits”). In addition, Ms. Leneghan’s Employment Agreement provides that her employment with the Company will
automatically terminate on the three-month anniversary of the date on which a new Chief Financial Officer commences employment with the Company, and, upon such termination of employment, Ms. Leneghan is entitled to receive the Severance Amount, the COBRA Benefits, the average of the annual bonuses earned by Ms. Leneghan’s with respect to the three fiscal years immediately preceding the fiscal year of the Effective Date (the “Prior Bonus Amount”), an amount equal to the product of Ms. Leneghan’s base salary and the higher of her target annual bonus percentage in effect during the fiscal year immediately preceding the fiscal year of the Effective Date or the target annual bonus percentage in effect during the fiscal year in which such termination occurs, prorated based on the number of days Ms. Leneghan is employed by the Company during the fiscal year in which such termination occurs (the “Prorated Bonus Amount”), and Ms. Leneghan’s employment is treated as a qualifying termination for purposes of the retention bonus agreement that she entered into with Old Invacare on January 26, 2023. Any severance benefits or payments payable to an executive under his or her respective Employment Agreement, other than the accrued but unpaid annual bonus, are subject to his or her execution and non-revocation of a release of claims in favor of the Company.
Mr. Purtill’s employment agreement provides that Mr. Purtill will relocate to Elyria, Ohio as soon as reasonably practicable following the Effective Date, and, in connection with such relocation, Mr. Purtill will be entitled to relocation payments and benefits (including a tax gross-up for any reimbursement amount that is taxable to him). In addition, to the extent Mr. Purtill is required to pay income taxes in any jurisdiction other than the United States, Mr. Purtill is entitled to receive an amount equal to the excess that he is required to pay under the applicable non-U.S. tax laws, over what he would have paid on such amounts if they were treated solely as U.S. income (including a tax gross-up for any payment amount that is taxable to him).
The foregoing descriptions of the material terms of the Employment Agreements are not complete and are qualified in their entirety by reference to the full text of the Employment Agreements attached hereto as Exhibits 10.6 through 10.8.
Severance Agreements
On the Effective Date, the Company entered into an amended and restated change of control severance agreement with each of Messrs. Purtill and LaPlaca (each, a “Severance Agreement”), to supersede each of their existing severance agreements entered into with Old Invacare.
Pursuant to their respective Severance Agreement, each executive is entitled to receive severance benefits upon a qualifying termination of employment by the Company without Cause or by such executive for Good Reason (each, as defined in each executive’s Severance Agreement) that occurs within two years following the occurrence of a Change of Control (as defined in each executive’s Severance Agreement) or the Effective Date, or, if such qualifying termination of employment is effected within six months before a Change of Control and primarily in contemplation of a Change of Control (each, a “qualifying termination”). Upon such termination of employment, Mr. Purtill is entitled to receive (i) a lump sum amount equal to two times his base salary and the Prior Bonus Amount, (ii) a lump sum amount equal to his Prorated Bonus Amount, (iii) a lump sum amount equal to 24 times the monthly COBRA premium rate, (iv) accelerated vesting of any rights under the Company’s deferred compensation plus plan (or related successor plan or plans), and (v) accelerated vesting of outstanding equity awards, and Mr. LaPlaca is entitled to receive (i) a lump sum amount equal to the sum of his base salary and an amount equal to his base salary multiplied by the higher of the target bonus percentage in effect during the fiscal year immediately preceding the Effective Date or the fiscal year in which the Change of Control occurs, or the target bonus percentage in effect during the fiscal year in which the Effective Date or the Change of Control occurs (the “Target Bonus”), (ii) a lump sum equal to two times the highest amount of total contributions made by the Company or its affiliates to the Company’s retirement savings plan (or related successor plan or plans), (iii) a lump sum amount equal to two times the higher amount of the employer contributions credited to the Company’s deferred compensation plus plan (or related successor plan or plans), (iv) a lump sum amount equal to the sum of the contributions and credited interest that were scheduled to be added to Mr. LaPlaca’s account under the Company’s cash balance supplemental
executive retirement plan (or related successor plan or plans), during the two year period immediately following the termination date if Mr. LaPlaca had continued in the employ with the Company through the second anniversary of the termination date, (v) continued coverage under the Company’s health, life, and disability insurance programs through the second anniversary of the termination date, and (vi) accelerated vesting of outstanding equity awards. In addition, if Mr. LaPlaca continues to be employed by the Company on the second anniversary of the Effective Date or Mr. LaPlaca incurs a qualifying termination, within two years after the Effective Date, then in addition to the benefits described above, Mr. LaPlaca is entitled to the sum of his base salary plus the Target Bonus.
Any severance benefits or payments payable to Messrs. Purtill or LaPlaca under their respective Severance Agreement are subject to each executive's execution and non-revocation of a release of claims in favor of the Company.
The foregoing descriptions of the material terms of the Severance Agreements are not complete and are qualified in their entirety by reference to the full text of the Employment Agreements attached hereto as Exhibits 10.9 and 10.10.
Incentive Plan
In accordance with the Plan, the Management Incentive Plan (the “Incentive Plan”) was approved and adopted by the Board and became effective as of the Effective Date. The Incentive Plan is intended to, among other things, attract and retain key employees of the Company and its affiliates and to advance the interests of the Company and its stockholders. The Incentive Plan permits awards to be made to employees of the Company or its affiliates, or any individual to whom the Company or its affiliate has extended a formal offer of employment (as long as the grant does not become effective until such individual commences employment) (the “Eligible Employees”).
Unless the Board otherwise appoints a committee of Board members to administer the terms of the Incentive Plan, the Board will administer the Incentive Plan, and, in coordination with any recommendations of Eligible Employees to be selected for participation in the Plan as may be provided by the Company's chief executive officer, may select any Eligible Employees as participants in the Plan (“Participants”). The Incentive Plan generally provides for the following types of awards: Stock Options (“Options”) and Restricted Stock Units (“RSUs”).
The aggregate number of shares of Common Stock reserved for issuance pursuant to the Incentive Plan is 16,180,905 (the “Total Pool”), representing 10.7% of the outstanding Common Stock of the Company as of the Effective Date, on a fully diluted basis, plus shares that may again become available for delivery with respect to awards under the Incentive Plan pursuant to share recycling in the event any award is forfeited. Of the Total Pool, 65% will be subject to issuance as Options, and 35% will be subject to issuance as RSUs. All Options may be issued as either incentive stock options or nonqualified stock options.
Awards can be made under the Incentive Plan for a period of ten years beginning on the Effective Date, subject to the Board’s ability to amend, alter, suspend, discontinue, or terminate the Incentive Plan or any portion thereof at any time. All awards will be subject to the terms of a corresponding Award Agreement outlining the specific terms and conditions applicable to each Participant's award.
The foregoing description of the Incentive Plan is qualified in its entirety by reference to the Incentive Plan, which is filed as Exhibits 10.4 to this Current Report on Form 8-K and incorporated herein by reference.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
Pursuant to the Plan, the Company amended and restated its certificate of incorporation (the “Charter”) and bylaws (the “Bylaws”), each of which became effective on the Effective Date.
Description of Capital Stock
Authorized Capital
The Charter authorizes the Company to issue up to 500 million shares of Common Stock and up to 20 million shares of preferred stock, par value $0.001 per share (“Preferred Stock”).
Common Stock
Voting Rights
Subject to any voting rights granted to Preferred Stock that may be outstanding from time to time, each share of the Common Stock is entitled to one vote per share on each matter submitted to a vote of the Company’s stockholders. The holders of a majority of the shares of Common Stock issued and outstanding and entitled to vote, and present in person or represented by proxy, will constitute a quorum for the transaction of business at all meetings of the stockholders. The holders of a plurality of the shares of Common Stock entitled to vote and present in person or represented by proxy at any meeting at which a quorum is present called for the purpose of electing directors will be entitled to elect the directors of the Company. The Charter and Bylaws do not provide for cumulative voting.
Dividend Rights
Subject to the preferences applicable to any Preferred Stock outstanding at any time, if any, the holders of shares of Common Stock shall be entitled to receive such dividends and other distributions in cash, property or shares of stock when, as and if declared thereon by the Board from time to time out of any assets or funds of the Corporation legally available therefor and shall share equally on a per share basis in such dividends and distributions.
Preemptive Rights
No holder of Common Stock has any preemptive right to subscribe for any shares of the Company’s capital stock issuable in the future.
Sinking Fund Provisions
There are no sinking fund provisions applicable to the Common Stock.
Liquidation Rights
Subject to applicable law and the rights, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, after payment or provision for payment of the debts and other liabilities of the Company and subject to the rights, if any, of the holders of Preferred Stock having a preference over or the right to participate with the Common Stock as to distributions upon liquidation, dissolution or winding up, the holders of all outstanding shares of Common Stock shall be entitled to receive the remaining assets of the Company available for distribution ratably in proportion to the number of shares held by each such stockholder.
Preferred Stock
The Charter provides that the Board may, by resolution, establish one or more classes or series of Preferred Stock having the number of shares and voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, of each such series and any qualifications, limitations and restrictions thereof as may be fixed by them without further stockholder approval. The holders of any such Preferred Stock may be entitled to preferences over holders of Common Stock with respect to dividends, or upon a liquidation, dissolution, or the Company’s winding up, in such amounts as are established by the resolutions of the Board approving the issuance of such shares.
Anti-Takeover Provisions
Authorized but Unissued Capital Stock
The Board may increase or decrease the authorized number of shares within each established series of Preferred Stock pursuant to the General Corporation Law of the State of Delaware; provided, however, that the Board may not decrease the number of shares within a series to less than the number of shares
within such series that are then issued, and that the terms of a particular series of Preferred Stock may grant voting rights to the holders thereof regarding these matters.
Stockholder Action
The Charter provides that, except as otherwise required by applicable law, special meetings of the stockholders shall be called by the Secretary of the Company, or such other officer or director of the Company as may be designated by the Board, stating the purpose or purposes therefor, if requested by either (a) a resolution adopted by not less than the majority of the whole Board or (b) the written request of the holder or holders of shares satisfying the ownership requirements as set forth in the Charter. The business conducted at any special meeting shall be confined to the purpose or purposes described in the notice thereof.
The Bylaws also include advance notice procedures for stockholder proposals to be brought before an annual meeting of the stockholders, including the nomination of directors. Stockholders at an annual meeting may only consider the proposals specified in the notice of meeting or brought before the meeting by or at the direction of the Board, or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered a timely written notice. These provisions could have the effect of delaying until the next stockholder meeting any stockholder actions, even if they are favored by the holders of a majority of the outstanding voting securities.
Series A Convertible Preferred Stock
On the Effective Date, the Company issued 6.75 million shares of its 9.00% Series A Convertible Participating Preferred Stock (the “Convertible Preferred Stock”). In connection with the issuance of the Convertible Preferred Stock, the Company filed a Certificate of Designations (the “Certificate of Designations”) with the Secretary of State of the State of Delaware on May 5, 2023 to establish the designations, powers, preferences and rights of the Convertible Preferred Stock and the qualifications, limitations and restrictions thereof, including the dividend rate, the redemption provisions, the amount payable with respect thereto in the event of the Company’s voluntary or involuntary liquidation, winding-up or dissolution, restrictions on the issuance of shares of the same series or of any other class or series, the terms and conditions of conversion of the Convertible Preferred Stock and the voting rights of the Convertible Preferred Stock. The Certificate of Designations became effective upon such filing.
The Certificate of Designations refers to the date when the Company’s obligations under the Loan and Security Agreement and the New Notes described in Item 1.01 above are discharged as the “Exit Indebtedness Termination Date.”
Each share of Convertible Preferred Stock has an initial liquidation preference of $25.00 which is subject to increases and other adjustments as described below and in the Certificate of Designations.
Dividends accrue on each share of Convertible Preferred Stock at an annual rate of 9.00% from the date of issuance. Prior to the Exit Indebtedness Termination Date, (i) no cash dividends may be declared or paid by the Company, and (ii) accrued dividends are added to the liquidation preference on March 15, June 15, September 15, and December 15 of each year (each, a “Dividend Payment Date”).
Following the Exit Indebtedness Termination Date, (i) the Company may, but is not required to, pay dividends in cash, (ii) dividends not paid in cash on a Dividend Payment Date will continue to be added to the liquidation preference as described above, (iii) subject to certain conditions, the Company may call for redemption all or some of the shares of Convertible Preferred Stock at the time outstanding, and (iv) upon the occurrence of certain events, the Company will be required to offer to redeem all of the shares of Convertible Preferred Stock that remain outstanding to the extent the Company has funds legally available for that purpose.
Subject to certain exceptions, so long as any share of Convertible Preferred Stock remains outstanding, no dividend or distributions will be declared or paid on shares of the Company’s Common Stock or any other class or series of stock ranking junior to the Convertible Preferred Stock.
At any time on or after the Free Convertibility Date, holders of shares of Convertible Preferred Stock shall have the option to convert all or a portion of shares of Convertible Preferred Stock into shares of Common Stock at a conversion price of $1.72076211 per share, subject to certain adjustments as described in the Certificate of Designations. The Free Convertible Date means the earlier to occur of November 6, 2023 and the occurrence of certain liquidation, dissolution or mandatory redemption events.
Unless converted or redeemed in accordance with the terms of the Certificate of Designations, each share of the Convertible Preferred Stock will remain outstanding and continue to accrue dividends in perpetuity.
Except as otherwise provided in Delaware law, the Company’s certificate of incorporation or the Certificate of Designations, Holders of shares of Convertible Preferred Stock are entitled to vote, together with the holders of Common Stock, on all matters subject to a vote of the holders of Common Stock, with each share of Convertible Preferred Stock carrying a number of votes equal to the number of shares of Common Stock into which such share could have been converted on the record date or such vote. In addition, holders of Convertible Preferred Stock are entitled to vote as a separate class on certain matters, including the creation or authorization of capital stock in parity with, or senior to, the Convertible Preferred Stock, the dissolution of the Company, and certain corporate dispositions or reorganizations.
Upon the Company’s voluntary or involuntary liquidation, winding-up or dissolution, each holder of the Convertible Preferred Stock will be entitled to receive the liquidation preference per share of Convertible Preferred Stock at the time in effect, plus an amount equal to accumulated and unpaid dividends on such shares, whether or not declared, to, but excluding, the date fixed for liquidation, winding-up or dissolution, to be paid out of the Company’s assets legally available for distribution to its stockholders after satisfaction of debt and other liabilities owed to the Company’s creditors and holders of shares of its stock ranking senior to the Convertible Preferred Stock and before any payment or distribution is made to holders of any stock ranking junior to the Convertible Preferred Stock (including the Common Stock).
The foregoing description of the terms of the Convertible Preferred Stock and the Certificate of Designations is qualified in its entirety by reference to the Certificate of Designations which is included as Exhibit 3.3 to this Current Report on Form 8-K and is hereby incorporated by reference.
The foregoing description of the Charter, Bylaws and Certificate of Designations is qualified in their entirety by reference to the Charter, Bylaws and Certificate of Designations, which are filed as Exhibits 3.1, 3.2 and 3.3, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Transfer Agent and Registrar
The transfer agent for the Common Stock is American Stock Transfer & Trust Company, LLC.