Preferred Stock
National has authorized 10,000,000 shares of preferred stock, par value $1.00 per share. No shares of preferred stock of National are currently
outstanding. However, the Board of Directors of National has the ability to issue one or more series of preferred stock from time to time.
The actual effect of the preferred stock upon the rights of the holders of Nationals common stock will not be known until
Nationals Board of Directors determines the respective rights of the holders of one or more series of preferred stock. Such effects, however, might include: (a) restrictions on dividends on Nationals common stock if dividends on the
preferred stock are in arrears; (b) dilution of the voting power of Nationals common stock; (c) restrictions on the rights of the holders of Nationals common stock to share in Nationals assets upon liquidation due to
satisfaction of any liquidation preference granted to the preferred stock; and (d) dilution of rights of holders of Nationals common stock to share in Nationals assets upon liquidation if the preferred stock is participating with
respect to distributions upon such liquidation. In some cases, the issuance of preferred stock could also delay, defer or prevent a change in control and make it harder to remove present management, without further action by Nationals
stockholders.
Under Nationals Restated Certificate of Incorporation, the Board of Directors of National can issue, without further
stockholder action, up to 10,000,000 shares of preferred stock, in one or more series, and determine the designation, the number, and the special and relative rights, powers, preferences and limitations of the shares of each series so created,
including, subject to the terms of Nationals Restated Certificate of Incorporation:
(a) the maximum number
of shares to constitute each such series of preferred stock, which may subsequently be increased or decreased (but not below the number of shares of such series then outstanding) by resolution of the Board of Directors of National, the distinctive
designation thereof and the stated value thereof if different from the par value thereof;
(b) whether the shares
of each such series shall have voting rights and, if such shares are given voting rights, the terms of such voting rights;
(c) the dividend rate or rates, if any, on the shares of each such series or the manner in which such rate or rates
shall be determined, the conditions and dates upon which such dividends shall be payable, the preference or relation that such dividends shall bear to the dividends payable on any other class or classes or any other series of capital stock
(including whether such dividends shall be participating or non-participating with respect to any other class or classes or any other series of capital stock), whether such dividends shall be cumulative or
noncumulative, and if cumulative, the date or dates from which any such dividends shall be cumulative;
(d) whether
the shares of each such series shall be subject to redemption, and, if made subject to redemption, the time or times, price or prices and other terms, limitations, restrictions or conditions of such redemption, including whether such redemption
shall be made at the election of the corporation or the holders of such shares;
(e) the relative amounts, and the
relative rights or preferences, if any, of payment in respect of shares of each such series which the holders of shares of each such series shall be entitled to receive upon the voluntary or involuntary liquidation, dissolution or winding-up of National, including whether such rights shall be limited or participating with respect to shares of any other class or classes or any other series of capital stock upon the voluntary or involuntary
liquidation, dissolution or winding up of National;
(f) whether or not the shares of each such series shall be
subject to the operation of a retirement or sinking fund and, if so, the terms and provisions relative to the operation of such retirement or sinking fund;
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