OKLAHOMA CITY, Sept. 29, 2004 (PRIMEZONE) -- Dobson Communications Corporation (NASDAQ:DCEL) today announced that it will not declare or pay the cash dividend due on October 15, 2004 on its outstanding 12 1/4% Senior Exchangeable Preferred Stock or the November 1, 2004 cash dividend on its outstanding 13% Senior Exchangeable Preferred Stock. Unpaid dividends will accrue interest at the stated dividend rates, compounded quarterly.
According to their Certificates of Designation, so long as the Company defers dividends on the 12 1/4% and 13% Preferred Stocks, Dobson may not pay dividends on its Series F Convertible Preferred Stock. Therefore, the Series F dividend due on October 15, 2004 will not be declared and paid, and will accrue interest at 7%, compounded semi-annually.
Dobson's board of directors has determined that it is in the best interests of the Company to defer payment of preferred stock dividends, and instead to use its cash to reduce outstanding indebtedness, to increase liquidity and for general corporate purposes.
In the event that Dobson fails to pay two semi-annual dividends (whether consecutive or not) on its Series F Preferred Stock, a majority of the holders of the Series F Preferred stock would have the right to elect two new directors to Dobson's board of directors.
Upon Dobson's failure to pay four quarterly dividends (whether consecutive or not) on either its 12 1/4% Preferred Stock or its 13% Preferred Stock, a majority of the holders of the respective series of preferred stock would each have the right to elect two new directors each to Dobson's board.
Under these circumstances, the expansion of Dobson's board of directors by six new members would not constitute a change of control under the Company's outstanding indentures or its subsidiary's credit facility, unless a majority of Dobson's existing board members fail to approve at least one of the new directors.
Dobson Communications is a leading provider of wireless phone services to rural markets in the United States. Headquartered in Oklahoma City, the Company owns wireless operations in 16 states. For additional information on the Company and its operations, please visit its Web site at www.dobson.net.