Note 9. Series D 8% Cumulative, Compounding Exchangeable Preferred Stock

As of September 30, 2012 and December 31, 2011, the Company has authorized 5,000,000 shares of preferred stock, of which 2,200,000 are designated as its $0.01 par value Series D 8% Cumulative, Compounding Exchangeable Preferred Stock (the “Series D Preferred Stock”). As of December 31, 2011, the Company had outstanding 1,331,814 shares of Series D Preferred Stock. There was no Series D Preferred Stock outstanding at September 30, 2012.

Prior to the transactions described in Note 2, the dividends on the Series D Preferred Stock were payable in additional shares of Series D Preferred Stock, rather than cash, in an amount per share equal to 0.08 shares of Series D Preferred Stock per annum compounded annually.

Also prior to the transactions described in Note 2, the holders of the Series D Preferred Stock voted with the holders of the Series C Preferred Stock, as single class, with respect to the appointment of four of the seven directors of the Company until the earliest date on which either (i) less than an aggregate of 500,000 shares of Series C Preferred Stock and Series D Preferred Stock remain outstanding or (ii) the holders of record of a majority of the outstanding shares of Series C Preferred Stock and Series D Preferred Stock, voting as a single class, elect to eliminate their right to appoint such directors.  

The Series D Preferred Stock ranked on parity with the Series C Preferred Stock, and ranked senior to all other series of preferred stock and to the common stock as to the payment of dividends and as to the distribution of assets upon liquidation, dissolution or winding up.

As described in Note 2, all Series D Preferred Stock was converted to common stock as of September 30, 2012.