That is certainly possible, but the preferreds are senior to the shares, so share equity would need to be wiped out before the preferreds were hurt. In that case, the bonds would have priority, but that would be a pretty ugly scenario.
If they cancel the common distribution, there are no arrears. If they cancel the preferred, they will need to make up the distributions before they start up the common again, or when they sell the company.
There is nothing that the company has done that justifies another three million shares, or $78 million dollars, in incentives. The fact that this was not even mentioned in the conference call tells you they are trying to float this under the radar. Your shares are diluted by 4% if you allow this to happen.