- 6 - value of that share and would remain a part thereof until the dividends were paid. The decedent and Ms. Trompeter were entitled, subject to minimal restrictions, to exchange their Sterling preferred stock for Sterling's 8-1/2 percent/12-1/2 percent subordinated debentures due December 31, 1995. At designated intervals, Sterling was required by the purchase agreement (the purchase agreement) underlying the Sterling preferred stock to redeem shares of the stock at $1,000 per share plus accrued dividends.2 Sterling had to use its "best efforts" to redeem 1,000 shares of the Sterling preferred stock on December 31, 1991, and another 1,000 shares on December 31, 1992. Sterling had a mandatory obligation to redeem 1,000 shares of the Sterling preferred stock on each December 31, 1993 through 1995. Redemptions and payments of dividends were prohibited during any period of default on Sterling's senior debt. Redemptions and payments of dividends were also prohibited by provisions set forth in Sterling's senior debt and senior subsidiary debt agreements. These provisions generally tied a redemption to Sterling's profitability as shown in its consolidated income statement. Sterling's 1990 through 1992 2 The number of shares to be redeemed from each holder of Sterling preferred stock would equal the product of the total number of shares of Sterling preferred stock redeemed on that date multiplied by a fraction. The fraction's numerator equaled the total number of shares of Sterling preferred stock then held by that holder. The fraction's denominator equaled the total number of shares of Sterling preferred stock then outstanding.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011