EXHIBIT 3(a)
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CERTIFICATE OF AMENDMENT TO
THE AMENDED ARTICLES OF INCORPORATION OF
THE KROGER CO.
Joseph A. Pichler, Chairman of the Board and Chief
Executive Officer, and Paul W. Heldman, Secretary, of The
Kroger Co., an Ohio corporation for profit with its principal
office at 1014 Vine Street, Cincinnati, Ohio, do hereby
certify that at a meeting of the Board of Directors held
pursuant to notice on the 20th day of March, 1997, the
following resolutions were adopted pursuant to Section
1701.70(B)(1) of the Ohio Revised Code:
RESOLVED, That the Amended Articles of Incorporation of
the Company are amended to delete therefrom Section C.7. and
Section C.8. of Article Fourth, and the Appendix A referenced
therein, designating the Auction Preferred Shares; and further
RESOLVED, That Article Fourth of the Amended Articles of
Incorporation of The Kroger Co. is amended by adding a new
Section C.7. as follows:
7. There is hereby designated a series of Preferred
Shares, entitled "Series A Preferred Shares", to
consist of 50,000 shares, to have the additional
preferences and privileges, the relative,
participating, optional or other special rights, and
the qualifications, limitations, and restrictions as
are set forth in Appendix A attached hereto.
and further;
RESOLVED, That pursuant to Section 1701.72(B) of the Ohio
Revised Code, the restated Amended Articles of Incorporation
of The Kroger Co., are adopted in the form attached hereto, to
supersede and replace the existing Amended Articles of
Incorporation and all amendments thereto.
IN WITNESS WHEREOF, we, acting for and on behalf of the
Company, have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury
and have affixed the seal of the Company on this 24th day of
March, 1997.
(Joseph A. Pichler)
Joseph A. Pichler
Chairman of the Board and
Chief Executive Officer
(Paul W. Heldman)
Paul W. Heldman
Secretary
FILED WITH SECRETARY OF STATE OF OHIO
ON MARCH 26, 1997
AMENDED ARTICLES OF INCORPORATION
OF
THE KROGER CO.
The Kroger Co., a corporation for profit, heretofore
organized and now existing under the laws of the State of
Ohio, makes and files these Amended Articles of Incorporation
and states:
FIRST. The name of the Corporation is THE KROGER CO.
SECOND. The principal office of the Corporation is
located at Cincinnati, in Hamilton County, Ohio.
THIRD. The purpose of said Corporation is to engage in
any lawful act or activity for which corporations may be
formed under Sections 1701.01 to 1701.98, inclusive, of the
Ohio Revised Code.
FOURTH. SECTION A. The maximum number of shares which
the Corporation is authorized to have outstanding is three
hundred fifty-five million (355,000,000), classified as
follows: five million (5,000,000) Cumulative Preferred Shares
of the par value of $100.00 each; and three hundred fifty
million (350,000,000) Common Shares of the par value of $1.00
each.
The express terms and provisions of the shares of the
foregoing classes of stock of the Corporation shall be as
follows:
SECTION B. The holders of Common Shares shall have no
pre-emptive rights to subscribe for or purchase any shares of
any class.
SECTION C. 1. The authorized shares of Cumulative
Preferred Shares may be issued in series from time to time.
All shares of any one series of Cumulative Preferred Shares
shall be alike in every particular and all shares of
Cumulative Preferred Shares shall rank equally. The express
terms and provisions of shares of different series shall be
identical except that there may be variations in respect of
the dividend rate, dates of payment of dividends and dates
from which they are cumulative, redemption rights and price,
liquidation price, sinking fund requirements, conversion
rights, and restrictions on issuance of shares of the same
series or of any other class or series. The Board of
Directors of the Corporation is authorized to fix, by the
adoption of an amendment to the Articles creating each such
series of the Cumulative Preferred Shares, (a) the designation
and number of shares of such series, (b) the dividend rate of
such series, (c) the dates of payment of dividends on shares
of such series and the dates from which they are cumulative,
(d) the redemption rights of the Corporation with respect to
shares of such series and the price or prices at which shares
of such series may be redeemed, (e) the amount or amounts
payable to holders of shares of such series on any voluntary
or involuntary liquidation, dissolution or winding up of the
Corporation, which may be different for voluntary and
involuntary liquidation, dissolution, or winding up, (f) the
amount of the sinking fund, if any, to be applied to the
purchase or redemption of shares of such series and the manner
of its application, (g) whether or not the shares of such
series shall be made convertible into, or exchangeable for,
shares of any other class or classes or of any other series of
the same class of stock of the Corporation, and if made so
convertible or exchangeable, the conversion price or prices,
or the rates of exchange, and the adjustments, if any, at
which such conversion or exchange may be made, and (h) whether
or not the issue of any additional shares of such series or
any future series in addition to such series or any other
class of stock shall be subject to any restrictions and, if
so, the nature of such restrictions.
2. Dividends on Cumulative Preferred Shares of any
series shall be payable at rates and on dates to be fixed by
the Board of Directors at the time of the creation of such
series. Dividends of the Cumulative Preferred Shares of all
series shall be cumulative, and no dividends shall be declared
or paid upon or set apart for the Common Stock unless and
until full dividends on the outstanding Cumulative Preferred
Shares of all series shall have been paid or declared and set
apart for payment with respect to all past dividend periods
and the current dividend period. In case of any series of
Cumulative Preferred Shares, dividends shall accrue from and
be cumulative from such dates as may be fixed by the Board of
Directors at the time of the creation of such series. In the
event of the issue of additional Cumulative Preferred Shares
of any series after the initial issue of shares of such series
all dividends paid on Cumulative Preferred Shares of such
series prior to the issue of such additional Cumulative
Preferred Shares and all dividends declared and payable to
holders of record of Cumulative Preferred Shares of such
series on a date prior to such additional issue shall be
deemed to have been paid on the additional shares so issued.
3. If upon any liquidation, dissolution or winding up,
the assets distributable among the holders of the Cumulative
Preferred Shares of all series shall be insufficient to permit
the payment of the full preferential amounts to which they
shall be entitled, then the entire assets of the Corporation
shall be distributed among the holders of the Cumulative
Preferred Shares of all series then outstanding, ratably in
proportion to the full preferential amounts to which they are
respectively entitled. Nothing in this paragraph shall be
deemed to prevent the purchase, acquisition or other
retirement by the Corporation of any shares of its outstanding
stock as now or in the future authorized or permitted by the
laws of Ohio. A consolidation or merger of the Corporation
with or into any other corporation or corporations, or a sale
or transfer of all or substantially all of its property, shall
not be deemed to be a liquidation, dissolution or winding up
of the Corporation.
4. Notice of any proposed redemption of Cumulative
Preferred Shares of any series shall be given by the
Corporation by publication at least once in one daily
newspaper printed in the English language and of general
circulation in the Borough of Manhattan, City of New York,
State of New York, and in the City of Cincinnati, State of
Ohio, the first publication to be at least sixty (60) days,
and not more than ninety (90) days, prior to the date fixed
for such redemption. Notice of any proposed redemption of
Cumulative Preferred Shares of any series also shall be given
by the Corporation by mailing a copy of such notice, at least
sixty (60) days, and not more than ninety (90) days, prior to
the date fixed for such redemption, to the holders of record
of the Cumulative Preferred Shares to be redeemed, at their
respective addresses then appearing upon the books of the
Corporation; but no failure to mail such notice, or defect
therein or in the mailing thereof shall affect the validity of
the proceedings for such redemption. In case of the
redemption of a part only of the Cumulative Preferred Shares
of any series at the time outstanding, the shares to be
redeemed shall be selected by lot or pro rata, as the Board of
Directors may determine. The Board of Directors shall have
full power and authority, subject to the limitations and
provisions herein contained, to prescribe the manner in which,
and the terms and conditions upon which, the shares of the
Cumulative Preferred Shares of any series shall be redeemed
from time to time. On or at any time before the redemption
date specified in such notice, the Corporation shall deposit
in trust, for the holders of the shares to be redeemed, funds
necessary for such redemption with a bank or trust company
organized under the laws of the United States of America or
the State of New York and doing business in the Borough of
Manhattan, City of New York, or organized under the laws of
the United States of America or of the State of Ohio and doing
business in the City of Cincinnati, Ohio; and designated in
such notice of redemption. Upon the publication of the notice
of redemption as above provided, or upon the making of such
deposit, whichever is later, all shares with respect to the
redemption of which such notice and deposit shall have been
given and made shall, whether or not the certificates therefor
shall have been surrendered for cancellation, be deemed to be
no longer outstanding for any purpose, and all rights with
respect to such shares shall thereupon cease and terminate,
except only the rights of the holders of the certificates for
such shares to receive, out of the funds so deposited in
trust, from and after the date of such deposit, the amount
payable upon the redemption thereof, without interest;
provided, however, that no right of conversion, if any,
belonging to such shares, if such right of conversion is, by
its terms, to exist for a period beyond the date of the
publication of such notice or the making of such deposit,
shall be impaired by the publication of such notice or the
making of such deposit. At the expiration of six (6) years
after the date of such deposit, such trust shall terminate.
Any such moneys then remaining on deposit with such bank or
trust company shall be paid over to the Corporation, and
thereafter the holders of the certificates for such shares
shall have no claims against such bank or trust company, but
only claims as unsecured creditors against the Corporation for
the amount payable upon the redemption thereof without
interest.
5. At all meetings of the shareholders, every holder of
record of shares of Cumulative Preferred Shares and every
holder of record of Common Stock shall be entitled to vote and
shall have one vote for each share outstanding in his name on
the books of the Corporation on the record date fixed for such
purpose, or if no record date is fixed, on the date next
preceding the day of such meeting, provided that (1) in the
event that the Corporation should have failed to pay dividends
on any series of Cumulative Preferred Shares for six or more
quarterly dividends, the holders of Cumulative Preferred
Shares of all series, voting as a single class, shall be
entitled to elect two directors, each for a one-year term,
whether or not the board is otherwise divided into classes
with each director elected for a term longer than one year, at
the meeting of shareholders for the election of directors next
succeeding the time such failure to pay these six dividends
first occurs, and (2) no amendment to the Articles of
Incorporation or Regulations shall be made which would be
substantially prejudicial to the holders of outstanding
Cumulative Preferred Shares or any series thereof without the
favorable vote of the holders of two-thirds of the Cumulative
Preferred Shares, voting as a single class, then outstanding,
unless such amendment shall not equally affect all series, in
such case the favorable vote of the holders of two-thirds of
the adversely affected series shall also be required. The
right of holders of Cumulative Preferred Shares to elect these
two directors shall terminate when all such unpaid dividends
on Cumulative Preferred Shares have been paid and the
directors then in office and elected by the holders of
Cumulative Preferred Shares shall forthwith cease to hold
office upon such payments.
6. The holders of the Cumulative Preferred Shares shall
have no pre-emptive rights to subscribe for or purchase any
shares of any class.
7. There is hereby designated a series of Preferred
Shares, entitled "Series A Preferred Shares", to consist of
50,000 shares, to have the additional preferences and
privileges, the relative, participating, optional or other
special rights, and the qualifications, limitations, and
restrictions as are set forth in Appendix A attached hereto.
FIFTH. (a) 1. In addition to any affirmative vote
or approval required by law, these Amended Articles of
Incorporation, or the Regulations of the Corporation:
(A) any merger or consolidation of the Corporation
or any Subsidiary (as hereinafter defined) with or into (i)
any Interested Shareholder (as hereinafter defined) or (ii)
any other corporation (whether or not itself an Interested
Shareholder) which, after such merger or consolidation, would
be an Affiliate (as hereinafter defined) of an Interested
Shareholder, or
(B) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series
of related transactions) to or with any Interested Shareholder
or any Affiliate of any Interested Shareholder of any assets
of the Corporation or any Subsidiary having an aggregate fair
market value of $15,000,000 or more, or
(C) the issuance or transfer by the Corporation or
any Subsidiary (in one transaction or a series of related
transactions) of any securities or options, warrants or rights
to acquire securities, of the Corporation or any Subsidiary,
to any Interested Shareholder or any Affiliate of any
Interested Shareholder in exchange for cash, securities or
other property (or a combination thereof) having an aggregate
fair market value of $15,000,000 or more, or
(D) the adoption of any plan or proposal for the
complete or partial liquidation or dissolution of the
Corporation as a result of which an Interested Shareholder
would receive any assets of the Corporation other than cash,
or
(E) any reclassification of securities (including
any reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the Corporation
with any of its Subsidiaries, or any similar transaction
(whether or not with or into or otherwise involving an
Interested Shareholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible
securities of the Corporation or any Subsidiary which is
directly or indirectly beneficially owned by any Interested
Shareholder, or
(F) any agreement, contract or other arrangement
which upon consummation will result in any of the transactions
described in this paragraph
(a) 1. shall require the affirmative vote of the
holders of 75% of the outstanding Voting Shares (as
hereinafter defined).
2. The term "Business Combination", as used in this
Article Fifth, shall mean any transaction which is referred to
in any one or more of clauses (A) through (F) of paragraph
(a)(1).
(b) 1. The provisions of paragraph (a)(1) of this
Article Fifth shall not be applicable if either of the
following conditions shall have been satisfied:
(A) the aggregate amount of the cash and fair
market value (as of the date of the consummation of the
Business Combination) of consideration other than cash to be
received per share of Common or Cumulative Preferred or other
Preferred Stock or Capital Stock in such Business Combination
by holders thereof shall be at least equal to the highest of
the following:
(i) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by such Interested Shareholder for
any shares of such class or series of stock acquired by
it within the three-year period prior to the Business
Combination (such price to be appropriately adjusted for
stock splits, stock dividends, reclassification of
securities and other similar events);
(ii) the per share book value of the shares of such
class or series of stock as reported at the end of the
fiscal quarter immediately preceding the public
announcement of the terms of the Business Combination;
(iii) an amount per share which, at a minimum,
bears the same percentage relationship to the market
price per share of the shares of such class or series of
stock immediately prior to the announcement of the
intention to effect the Business Combination as the
highest per share price determined in (i) above bears to
the market price per share of the shares of such class or
series of stock immediately prior to the acquisition by
the Interested Shareholder of beneficial ownership of
more than 5% of the shares of such class or series of
stock but in no event in excess of two times the highest
per share price determined in (i) above;
provided that (i) no Extraordinary Event (as hereinafter
defined) occurs after the Interested Shareholder has become an
Interested Shareholder and prior to the consummation of the
Business Combination, and (ii) if the highest preferential
amount per share of a series of Cumulative Preferred or other
Preferred Stock to which the holders thereof would be entitled
in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Corporation
(regardless of whether the Business Combination to be
consummated constitutes such an event) is greater than such
aggregate amount, holders of such series of Cumulative
Preferred or other Preferred Stock shall receive an amount for
each such share at least equal to the highest preferential
amount applicable to such series of Cumulative Preferred or
other Preferred Stock; or
(B) Either (i) the Business Combination was
approved by the Board of Directors of the Corporation prior to
the time that the Interested Shareholder acquired beneficial
ownership of in excess of 10% of the outstanding Voting
Shares, (ii) the Interested Shareholder seeking to effect such
Business Combination sought and obtained the prior approval of
the Board of Directors of the Corporation to such Interested
Shareholder's acquisition of beneficial ownership of 10% of
the outstanding Voting Shares or (iii) the Business
Combination was approved by at least two-thirds of the
Continuing Directors of the Corporation.
(c) For the purposes of this Article Fifth:
1. A "Person" shall mean any individual, firm,
corporation, or other entity. When two or more Persons act as
a partnership, syndicate, association or other group for the
purpose of acquiring, voting or disposing of Voting Shares,
such partnership, syndicate, association or other group will
be deemed a "Person" for the purposes of this Article.
2. "Interested Shareholder" shall mean any Person
(other than the Corporation, any Subsidiary or any profit
sharing, employee stock ownership or other employee benefit
plan of the Company or of any Subsidiary or any trustee of or
fiduciary with respect to any such plan acting in such
capacity) who or which, together with its Affiliates and
Associates (as hereinafter defined) and any other Person
acting in concert with such Person is the beneficial owner,
directly or indirectly, of more than 10% of the Voting Shares
as of the record date for the determination of shareholders
entitled to notice of and to vote on any Business Combination.
3. A Person shall be the "beneficial owner" of any
Voting Shares:
(A) which such Person or any of its Affiliates and
Associates would be deemed to beneficially own under Rule 13d-
3 of the Securities Exchange Act as in effect on May 17, 1985,
or
(B) which such Person or any of its Affiliates and
Associates has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned (as defined in (A)
or (B) of this paragraph 3) directly or indirectly, by any
other Person with which such first mentioned Person or any of
its Affiliates and Associates has any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting
or disposing of any Voting Shares.
4. A "Continuing Director" shall mean any member
of the Board of Directors who is not affiliated with an
Interested Shareholder and who was a member of the Board of
Directors immediately prior to the time that the Interested
Shareholder first beneficially owned more than 5% of the
outstanding Voting Shares, and any successor to a Continuing
Director who is not affiliated with an Interested Shareholder
and is recommended to succeed a Continuing Director by two-
thirds of the Continuing Directors.
5. "Affiliate" and "Associate" shall have the
respective meanings given those terms in Rule 12b-2 under the
Securities Exchange Act of 1934, as in effect on May 18, 1984.
6. "Subsidiary" means any corporation, a majority
of the voting shares of which is beneficially owned by the
Corporation.
7. "Voting Shares" shall mean shares of capital
stock of the Corporation entitled to vote generally for the
election of directors (excluding any shares or series of
capital stock entitled to vote only upon the occurrence of
certain contingencies such as the nonpayment of dividends on
Cumulative Preferred Stock or other Preferred Stock),
considered for the purposes of this Article as a single class.
8. The term "Extraordinary Event" shall mean, as
to any Business Combination and Interested Shareholder, any of
the following events that is not approved by two-thirds of the
Continuing Directors:
(A) any failure to declare and pay at the regular
date therefor any full quarterly dividend (whether or not
cumulative) on outstanding Cumulative Preferred Stock or on
any other Preferred Stock then outstanding; or
(B) any reduction in the annual rate of dividends
paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock); or
(C) any failure to increase the annual rate of
dividends paid on the Common Stock as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction
that has the effect of reducing the number of outstanding
shares of the Common Stock; or
(D) the receipt by the Interested Shareholder, after
such Interested Shareholder has become an Interested
Shareholder, of a direct or indirect benefit (except
proportionately as a shareholder) from any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the Corporation or
any Subsidiary of the Corporation, whether in anticipation of
or in connection with the Business Combination or otherwise.
(d) Two-thirds of the Continuing Directors (or, if there
are no Continuing Directors, two-thirds of the Outside
Directors) shall have the power and duty to determine for the
purposes of this Article Fifth on the basis of information
known to them (1) the number of Voting Shares beneficially
owned by any Person, (2) whether a Person is an Affiliate or
Associate of another, (3) whether the assets subject to any
business combination or the consideration received for the
issuance or transfer of securities by the Corporation or any
Subsidiary has an aggregate fair market value of $15,000,000
or more, (4) whether the proposed transaction is subject to
this Article Fifth, and (5) such other matters with respect to
which a determination is required under this Article Fifth.
Any such determination shall be conclusive and binding for all
purposes of this Article. For purposes of this paragraph (d),
an Outside Director shall mean a Director of this Corporation
who is not (i) an employee or officer of this Corporation or
of any Interested Shareholder (or any Affiliate of such
Interested Shareholder) seeking to propose or effect a
Business Combination, or (ii) a Director, Associate or
Affiliate of an Interested Shareholder or of any Affiliate of
such Shareholder (other than by reason of being a Director of
the Corporation) or (iii) any relative by blood, marriage or
adoption (excluding relationships more remote than first
cousin) of any of the foregoing.
(e) Nothing contained in this Article Fifth shall be
construed to relieve any Interested Shareholder from any
fiduciary obligation imposed by law.
(f) Notwithstanding any other provisions of these
Amended Articles of Incorporation or of the Regulations of the
Corporation (and notwithstanding the fact that some lesser
percentage may be specified by law, these Amended Articles of
Incorporation or the Regulations of the Corporation), the
affirmative vote of the holders of at least 75% of the Voting
Shares shall be required to amend, repeal, or adopt any
provisions inconsistent with, this Article Fifth.
SIXTH. The following provisions are hereby agreed to for
the purpose of defining, limiting and regulating the exercise
of the authority of the Corporation or of its shareholders, or
of any class of its shareholders, or of its directors, or for
the purpose of creating and defining rights and privileges of
the shareholders among themselves.
(a) This Corporation reserves the right to amend, alter,
change or repeal any provision contained in these Amended
Articles of Incorporation in the manner now or hereafter
prescribed by law, and all rights conferred on officers,
directors, and shareholders herein, including but not limited
to the rights of dissenting shareholders conferred by Ohio
law, are granted subject to this reservation.
(b) Action on any matter at any shareholders' meeting,
or without such meeting, regarding which the statutes of Ohio
provide that unless otherwise provided in the articles of
incorporation or regulations of a corporation, there shall be
the affirmative vote or consent of a larger portion than the
holders of a majority of the shares entitled to vote thereon
or consent thereto, may be taken by the affirmative vote or
consent of the holders of a majority of shares entitled to
vote thereon or consent thereto, but in the event that the
vote or consent is required to be by classes, then, except as
otherwise provided herein, action may be taken on such matter
by the affirmative vote or consent of the holders of a
majority of each class of shares entitled to vote by classes
on such matter.
(c) The Corporation may, when authorized by the Board of
Directors and without any action by the shareholders,
purchase, hold, sell and reissue any of its shares in such
manner and under such terms and conditions as may be
prescribed by the directors.
(d) The Board of Directors shall have the power and
authority to determine the fair value of any property other
than money to be received by the Corporation in payment of its
shares.
(e) The foregoing clauses shall be construed both as
objects and powers, and it is hereby expressly provided that
the foregoing enumeration of specific powers shall not be held
to limit or restrict in any manner the powers of this
Corporation, and are in furtherance of and in addition to, and
not in limitation of, the general powers conferred by the laws
of the State of Ohio.
SEVENTH. These Amended Articles of Incorporation
supersede and take the place of the existing Amended Articles
of Incorporation.
Appendix A
Of the 5,000,000 preferred shares of the Company, 50,000
shall constitute a series of Voting Preferred Stock and shall
have, subject and in addition to the other provisions of this
Article Fourth, the following relative rights, preferences an
limitations.
Section 1. Designation and Amount. The shares of
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such series shall be designated as "Series A Preferred
Shares", $100 par value (the "Series A Preferred Stock"). The
number of shares of Series A Preferred Stock may be increased
or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares
of Series A Preferred Stock to a number less than that of the
shares then outstanding plus the number of shares issuable
upon exercise of outstanding rights, options or warrants or
upon conversion of outstanding securities issued by the
Company.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking
prior and superior to the shares of Series A Preferred Stock
with respect to dividends, the holders of shares of Series A
Preferred Stock in preference to the holders of shares of
Common Stock, $1.00 par value (the "Common Stock"), of the
Company and any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of January, April,
July, and October in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A
Preferred Stock in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $100.00, or (b) subject to
the provision for adjustment hereinafter set forth, 10,000
times the aggregate per share amount of all cash dividends,
and 10,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock,
since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a
share of Series A Preferred Stock. In the event the Company
shall at any time after April 4, 1997 (the "Rights Amendment
Date") (i) declare a dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to
which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (b) of
the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event.
(B) The Company shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A)
above immediately after it declares a dividend or distribution
on the Common Stock (other than a dividend payable in shares
of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a
dividend of $100.00 per share on the Series A Preferred Stock
shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Preferred Stock unless the
date of issue of such shares is prior to the record date for
the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid
on the shares of Series A Preferred Stock in an amount less
than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no
more than 30 days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. The holders of shares of
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Series A Preferred Stock shall have the following voting
rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall
entitle the holder thereof to 1 vote on all matters submitted
to a vote of the shareholders of the Company.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of shareholders of the
Company.
Section 4. Certain Restrictions.
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(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding
shall have been paid in full, the Company shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock except dividends
paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock provided that
the Company may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares
of any stock of the Company ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to
the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock or any shares of stock
ranking on a parity with the Series A Preferred Stock except
in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preference of the
respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the
respective series or classes.
(B) The Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any
shares of stock of the Company unless the Company could, under
paragraph (A) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
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Preferred Stock purchased or otherwise acquired by the Company
in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof. All such shares shall
upon their cancellation become authorized but unissued shares
of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions
of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
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(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Company, no distribution shall be made to
the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock unless, prior thereto, the holder
of shares of Series A Preferred Stock shall have received per
share, $25,000, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount of the
Series A Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series A Preferred
Stock unless, prior thereto, the holders of shares of Common
Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i)
the Series A Liquidation Preference by (ii) 10,000 (as
appropriately adjusted as set forth in subparagraph C below to
reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such
number in clause (ii), the "Adjustment Number"). Following
the payment of the full amount of the Series A Liquidation
Preference and the Common Adjustment in respect of all
outstanding shares of Series A Preferred Stock and Common
Stock, respectively, holders of Series A Preferred Stock and
holders of shares of Common Stock shall receive their ratable
and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to 1 with
respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
(B) In the event there are not sufficient assets
available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of all
other series of Preferred Stock, if any, which rank on a
parity with the Series A Preferred Stock then such remaining
assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation
preferences. In the event there are not sufficient assets
available to permit payment in full of the Common Adjustment,
then such remaining assets shall be distributed ratably to the
holders of Common Stock.
(C) In the event the Company shall at any time after the
Rights Amendment Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each
such case the Adjustment Number in effect immediately prior to
such event shall be adjusted by multiplying such Adjustment
Number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the
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Company shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such
case the shares of Series A Preferred Stock shall at the same
time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set
forth) equal to 10,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the
Company shall at any time after the Rights Amendment Date (i)
declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount set forth
in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted
by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that are outstanding
immediately prior to such event.
Section 8. Redemption. The shares of Series A
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Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Preferred Stock
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shall rank junior to all other series of the Company's
Preferred Stock as to the payment of dividends and the
distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 10. Fractional Shares. Series A Preferred
-----------------
Stock may be issued in fractions of a share which shall
entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all
other rights of holders of Series A Preferred Stock.