RESTATED ARTICLES OF INCORPORATION
OF
THE ST. PAUL COMPANIES, INC.
ARTICLE I
The name of the corporation is THE ST. PAUL COMPANIES, INC.
ARTICLE II
The address of the registered office of the
corporation is 385 Washington Street, St. Paul, Minnesota 55102.
ARTICLE III
The aggregate number of shares that the corporation
has authority to issue is two hundred forty-five million
shares which shall consist of five million undesignated
shares and two hundred forty million shares of voting common
stock. All shares of voting common stock shall have equal
rights and preferences. The board of directors of the
corporation is authorized to establish, from the
undesignated shares, one or more classes and series of
shares, to designate each such class and series and to fix
the relative rights and preferences of each such class and
series, provided that in no event shall the board of
directors fix a preference with respect to a distribution in
liquidation in excess of $100 per share plus accrued and
unpaid dividends, if any. No shares shall confer on the
holder any right to cumulate votes in the election of
directors. All shareholders are denied preemptive rights,
unless, with respect to some or all of the undesignated
shares, the board of directors shall grant preemptive
rights. The corporation may, without any new or additional
consideration, issue shares of voting common stock or any
other class or series pro rata to the holders of the same or
one or more other classes or series of shares.
Each share of common stock with a par value of One
Dollar Fifty Cents which is issued and outstanding (and has
not been reacquired by the corporation) as of the effective
date of these Restated Articles of Incorporation is hereby
reclassified into one share of voting common stock and each
certificate representing a share or shares of common stock
with a par value of One Dollar Fifty Cents shall represent
the same number of shares of voting common stock.
ARTICLE IV
An action required or permitted to be taken at a board
meeting may be taken by written action signed by the number
of directors that would be required to act in taking the
same action at a meeting of the board at which all directors
were present.
ARTICLE V
Where shareholder approval, authorization or adoption
is required by Chapter 302A, Minnesota Statutes, for any of
the following transactions, the vote required for such
approval, authorization or adoption shall be the affirmative
vote of the holders of at least two-thirds of the voting
power of all voting shares:
(a) Any plan of merger;
(b) Any plan of exchange;
(c) Any sale, lease, transfer or other disposition of all or
substantially all of the corporation's property and
assets, including its good will, not in the usual and
regular course of its business; or
(d) Any dissolution of the corporation.
The shareholder vote required for approval,
authorization or adoption of an amendment to these Restated
Articles of Incorporation (other than an amendment to this
article) shall be the affirmative vote of the holders of at
least one-half of the voting power of all voting shares. The
shareholder vote required for approval, authorization or
adoption of an amendment to this article shall be the
affirmative vote of the holders of at least two-thirds of
the voting power of all voting shares. The provisions of
this article are not intended either to require that the
holders of the shares of any class or series of shares vote
separately as a class or series or to affect or increase any
class or series vote requirement of Chapter 302A, Minnesota
Statutes.
ARTICLE VI
A director of this Corporation shall have no personal
liability to the Corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director,
to the full extent such immunity is permitted from time to
time under the Minnesota Business Corporation Act.
Any repeal or modification of the foregoing paragraph by the
shareholders of the Corporation shall not adversely affect
any right or protection of a Director of the Corporation
existing at the time of such repeal or modification.
STATEMENT OF THE ST. PAUL COMPANIES, INC.
WITH RESPECT TO
SERIES B CONVERTIBLE PREFERRED STOCK
Pursuant to Section 302A.401, Subd. 3(b)
of Minnesota Statutes
The undersigned officers of The St. Paul Companies,
Inc. (the "Corporation"), being duly authorized by the Board
of Directors of the Corporation, do hereby certify that the
following resolution was duly adopted by the Board of
Directors of the Corporation on January 24, 1990 pursuant to
Minnesota Statutes, Section 302A.401, Subd. 3(a):
RESOLVED, That there is hereby established, out of the
presently available undesignated shares of the Corporation,
a series of Preferred Stock of the Corporation designated as
stated below and having the relative rights and preferences
that are set forth below (the "Series"):
1. Designation and Amount. The Series shall be
designated as "Series B Convertible Preferred Stock" (the
"Series B Preferred"). The number of shares constituting the
Series shall be one million four hundred fifty thousand
(1,450,000), which number may from time to time be decreased
(but not below the number of shares then outstanding) by
action of the Board of Directors of the Corporation (the
"Board of Directors"). Shares of Series B Preferred shall
have a preference upon liquidation, dissolution or winding
up of the Corporation of One Hundred Dollars ($100.00) per
share, which preference amount does not represent a
determination by the Board of Directors for the purpose of
the Corporation's capital accounts.
2. Rank. The Series B Preferred shall, with respect to
dividend rights and rights on liquidation, winding up or
dissolution of the Corporation, rank prior to the
Corporation's Series A Junior Participating Preferred Stock
and to the Corporation's voting common stock (the "Common
Stock") (together, the "Junior Stock") and shall, with
respect to dividend rights and rights on liquidation,
winding up or dissolution of the Corporation, rank junior to
all other classes and series of equity securities of the
Corporation, now or hereafter authorized, issued or
outstanding, other than any classes or series of equity
securities of the Corporation ranking on a parity with the
Series B Preferred as to dividend rights and rights upon
liquidation, winding up or dissolution of the Corporation
(the "Parity Stock").
3. Dividends. (a) Holders of outstanding shares of
Series B Preferred shall be entitled to receive, when, as
and if declared by the Board of Directors, to the extent
permitted by applicable law,
cumulative quarterly cash dividends at the annual rate of
Eleven and 724/1000 Dollars ($11.724) per share, in
preference to and in priority over any dividends with
respect to Junior Stock.
(b) Dividends on the outstanding shares of Series B
Preferred shall begin to accrue and be cumulative
(regardless of whether such dividends shall have been
declared by the Board of Directors) from and including the
date of original issuance of each share of the Series B
Preferred, and shall be payable in arrears on January 17,
April 17, July 17 and October 17 of each year (each of such
dates a "Dividend Payment Date"), commencing April 17, 1990.
Each such dividend shall be payable to the holder or holders
of record as they appear on the stock books of the
Corporation at the close of business on such record dates,
not more than thirty (30) calendar days and not less than
ten (10) calendar days preceding the Dividend Payment Dates
therefor, as are determined by the Board of Directors (each
of such dates a "Record Date"). In any case where the date
fixed for any dividend payment with respect to the Series B
Preferred shall not be a Business Day, then such payment
need not be made on such date but may be made on the next
preceding Business Day with the same force and effect as if
made on the date fixed therefor, without interest.
(c) The amount of any dividends "accumulated" on any
share of Series B Preferred at any Dividend Payment Date
shall be deemed to be the amount of any unpaid dividends
accrued thereon to and excluding such Dividend Payment Date
regardless of whether declared, and the amount of dividends
"accumulated" on any share of Series B Preferred at any date
other than a Dividend Payment Date shall be calculated as
the amount of any unpaid dividends accrued thereon to and
excluding the last preceding Dividend Payment Date
regardless of whether declared, plus an amount calculated on
the basis of the annual dividend rate for the period from
and including such last preceding Dividend Payment Date to
and excluding the date as of which the calculation is made
(regardless of whether declared). The amount of dividends
payable with respect to a full dividend period on
outstanding shares of Series B Preferred shall be computed
by dividing the annual dividend rate by four and the amount
of dividends payable for any period shorter than a full
quarterly dividend period (including the initial dividend
period) shall be computed on the basis of thirty (3O)-day
months, a three hundred sixty (360)-day year and the actual
number of days elapsed in the period.
(d) So long as the shares of Series B Preferred shall
be outstanding, if (i) the Corporation shall be in default
or in arrears with respect to the payment of dividends
(regardless of whether declared) on any outstanding shares
of Series B Preferred or any other classes or series of
equity securities of the Corporation other than Junior Stock
or (ii) the Corporation shall be in default or in arrears
with respect to the mandatory or optional redemption,
purchase or other acquisition, retirement or other
requirement of, or with respect to, any sinking or other
similar fund or agreement for the redemption, purchase
or other acquisition, retirement or other requirement of, or
with respect to, any shares of the Series B Preferred or any
other classes or series of equity securities of the
Corporation other than Junior Stock, then the Corporation
may not (A) declare, pay or set apart for payment any
dividends on any shares of Junior Stock, or (B) make any
payment on account of, or set apart payment for, the
purchase or other acquisition, redemption, retirement or
other requirement of, or with respect to, any sinking or
other similar fund or agreement for the purchase or other
acquisition, redemption, retirement or other requirement of,
or with respect to, any shares of Junior Stock or any
warrants, rights, calls or options exercisable or
exchangeable for or convertible into Junior Stock, other
than with respect to any rights that are now or in the
future may be issued and outstanding under or pursuant to
the Shareholder Protection Rights Agreement dated as of
December 4, 1989 between the Corporation and First Chicago
Trust Company of New York as Rights Agent, as it may be
amended in any respect or extended from time to time or
replaced by a new shareholders' rights plan of any scope or
nature (provided that in any amended or extended plan or in
any replacement plan any redemption of rights feature
permits only nominal redemption payments) (the "Rights
Agreement"), or (C) make any distribution in respect of any
shares of Junior Stock or any warrants, rights, calls or
options exercisable or exchangeable for or convertible into
Junior Stock, whether directly or indirectly, and whether in
cash, obligations, or securities of the Corporation or other
property, other than dividends or distributions of Junior
Stock which is neither convertible into nor exchangeable or
exercisable for any securities of the Corporation other than
Junior Stock or rights, warrants, options or calls
exercisable or exchangeable for or convertible into Junior
Stock or (D) permit any corporation or other entity
controlled directly or indirectly by the Corporation to
purchase or otherwise acquire or redeem any shares of Junior
Stock or any warrants, rights, calls or options exercisable
or exchangeable for or convertible into shares of Junior
Stock.
(e) Dividends in arrears with respect to the
outstanding shares of Series B Preferred may be declared and
paid or set apart for payment at any time and from time to
time, without reference to any regular Dividend Payment
Date, to the holder or holders of record as they appear on
the stock books of the Corporation at the close of business
on the Record Date established with respect to such payment
in arrears. If there shall be outstanding shares of Parity
Stock, and if the payment of dividends on any shares of the
Series B Preferred or the Parity Stock is in arrears, the
Corporation, in making any dividend payment on account of
any shares of the Series B Preferred or Parity Stock, shall
make such payment ratably upon all outstanding shares of the
Series B Preferred and Parity Stock in proportion to the
respective amounts of accumulated dividends in arrears upon
such shares of the Series B Preferred and Parity Stock to
the date of such dividend payment. The Holder or holders of
Series B Preferred shall not be entitled to any dividends,
whether payable in cash, obligations or securities of the
Corporation or other property, in excess of the accumulated
dividends
on shares of Series B Preferred. No interest, or sum of
money in lieu of interest, shall be payable in respect of
any dividend or other payment or payments which may be in
arrears with respect to the Series B Preferred. All
dividends paid with respect to the Series B Preferred shall
be paid pro rata to the holders entitled thereto.
(f) Subject to the foregoing provisions hereof and
applicable law, the Board of Directors (i) may declare and
the Corporation may pay or set apart for payment dividends
on any Junior Stock or Parity Stock, (ii) may make any
payment on account of or set apart payment for a sinking
fund or other similar fund or agreement for the purchase or
other acquisition, redemption, retirement or other
requirement of, or with respect to, any Junior Stock or
Parity Stock or any warrants, rights, calls or options
exercisable or exchangeable for or convertible into any
Junior Stock or Parity Stock, (iii) may make any
distribution in respect to any Junior Stock or Parity Stock
or any warrants, rights, calls or options exercisable or
exchangeable for or convertible into any Junior Stock or
Parity Stock, whether directly or indirectly, and whether in
cash, obligations or securities of the Corporation or other
property and (iv) may purchase or otherwise acquire, redeem
or retire any Junior Stock or Parity Stock or any warrants,
rights, calls or options exercisable or exchangeable for or
convertible into any Junior Stock or Parity Stock, and the
holder or holders of the Series B Preferred shall not be
entitled to share therein.
4. Voting Rights. The holder or holders of Series B
Preferred shall have no right to vote for any purpose,
except as required by applicable law and except as provided
in this Section 4.
(a) So long as any shares of Series B Preferred remain
outstanding, the affirmative vote of the holder or holders
of at least a majority (or such greater number as required
by applicable law) of the votes entitled to be cast with
respect to the then outstanding Series B Preferred, voting
separately as one class, at a meeting duly held for that
purpose, shall be necessary to repeal, amend or otherwise
change any of the provisions of the articles of
incorporation of the Corporation in any manner which
materially and adversely affects the rights or preferences
of the Series B Preferred. For purposes of the preceding
sentence, the increase (including the creation or
authorization) or decrease in the amount of authorized
capital stock of any class or series (excluding the Series B
Preferred) shall not be deemed to be an amendment which
materially and adversely affects the rights or preferences
of the Series B Preferred.
(b) The holder or holders of Series B Preferred shall
be entitled to vote on all matters submitted to a vote of
the holders of Common Stock, voting together with the
holders of Common Stock as if one class. Each share of
Series B Preferred in such case shall be entitled to a
number of votes equal to the number of shares of Common
Stock into which such share of Series B Preferred could have
been converted on the
record date for determining the holders of Common Stock
entitled to vote on a particular matter.
5. Optional Redemption. (a) The Series B Preferred
shall be redeemable, in whole or in part at any time and
from time to time, to the extent permitted by applicable
law, at the option of the Corporation, (i) on or before
December 31, 1994, if (A) there is a change in any statute,
rule or regulation of the United States of America which has
the effect of limiting or making unavailable to the
Corporation all or any of the tax deductions for amounts
paid (including dividends) on the Series B Preferred when
such amounts are used as provided under Section 404(k)(2) of
the Internal Revenue Code of 1986, as amended and in effect
on the date shares of Series B Preferred are initially
issued, or (B) the Plan is not initially determined by the
Internal Revenue Service to be qualified within the meaning
of 401(a) and 4975(e)(7) of the Internal Revenue Code of
1986, as amended, or (C) the Plan is terminated by the Board
of Directors or otherwise, at the greater of (l) $144.30 per
share plus accumulated and unpaid dividends, without
interest, to and excluding the date fixed for redemption, or
(2) the Fair Market Value of the Series B Preferred
redeemed, or (ii) after December 31, 1994, at the following
redemption prices per share if redeemed during the twelve
(12)-month period ending on and including December 31 in
each of the following years:
Redemption Price
Year per Share
---- ----------------
1995 $149.52
1996 148.22
1997 146.92
1998 145.62
1999 and thereafter 144.30
plus accumulated and unpaid dividends, without interest, to
and excluding the date fixed for redemption.
(b) Payment of the redemption price shall be made by
the Corporation in cash or shares of Common Stock, or a
combination thereof, as permitted by paragraph (d) of this
Section 5. On and after the date fixed for redemption,
dividends on shares of Series B Preferred called for
redemption shall cease to accrue, such shares shall no
longer be deemed to be outstanding and all rights in respect
of such shares shall cease, except the right to receive the
redemption price.
(c) Unless otherwise required by law, notice of
redemption shall be sent to the holder or holders of Series
B Preferred at the address shown on the books of the
Corporation by first class mail, postage prepaid, mailed not
less than twenty (20) days nor more than sixty (60) days
prior to the redemption date. Each such notice shall state:
(i) the redemption date; (ii) the total number of shares of
the Series B Preferred to be redeemed and, if fewer than all
the shares are to be redeemed, the number of such shares to
be redeemed;
(iii) the redemption price; (iv) the place or places where
certificates for such shares are to be surrendered for
payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue from and after
such redemption date; and (vi) the conversion rights of the
shares to be redeemed, the period within which conversion
rights may be exercised, and the then current Conversion
Price and number of shares of Common Stock issuable upon
conversion of a share of Series B Preferred at the time.
Upon surrender of the certificates for any shares so called
for redemption and not previously converted (properly
endorsed or assigned for transfer, if the Board of Directors
shall so require and the notice shall so state), such shares
shall be redeemed by the Corporation at the date fixed for
redemption and at the redemption price.
(d) The Corporation, at its option, may make payment of
the redemption price required upon redemption of shares of
Series B Preferred in cash or in shares of Common Stock, or
in a combination of such shares and cash, any such shares to
be valued for such purpose at the average Current Market
Price for the five (5) consecutive trading days ending on
the trading day next preceding the date of redemption.
6. Other Redemption Rights. Shares of Series B
Preferred shall be redeemed by the Corporation at the option
of the holder at any time and from time to time, to the
extent permitted by applicable law, upon notice to the
Corporation accompanied by the properly endorsed certificate
or certificates given not less than five (5) Business Days
prior to the date fixed by the holder in such notice for
such redemption, when and to the extent necessary (a) for
such holder to provide for distributions required to be made
under The St. Paul Companies, Inc. Savings Plus Preferred
Stock Ownership Plan and Trust, an employee stock ownership
plan and trust within the meaning of 4975(e)(7) of the
Internal Revenue Code of 1986, as amended (the "Plan and
Trust"), as the same may be amended, or any successor plans,
or (b) for such holder to make payment of principal or
interest due and payable (whether as scheduled or upon
acceleration) on the 9.40% Note dated January 24, 1990, due
January 31, 2005 made by Norwest Bank Minnesota, National
Association, not individually but solely as Trustee for the
Plan and Trust, payable to the order of St. Paul Fire and
Marine Insurance Company or registered assigns, in the
principal amount of One Hundred Fifty Million Dollars
($150,000,000) or other indebtedness of the Plan and Trust
or if funds otherwise available are not adequate to make a
required payment pursuant to such Note or other
indebtedness, in each case at a redemption price of the
greater of (l) $144.30 per share plus accumulated and unpaid
dividends, without interest, to and excluding the date fixed
for redemption, or (2) the Fair Market Value of the Series B
Preferred redeemed. Upon surrender of the shares to be
redeemed, such shares shall be redeemed by the Corporation
on the date fixed for redemption and at the applicable
redemption price and such price shall be paid within five
(5) Business Days after such date of redemption, without
interest. The terms and provisions of Sections
5(b) and 5(d) are applicable to any redemption under this
Section 6.
7. Liquidation Preference. In the event of any
voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, the holder or holders of outstanding
shares of Series B Preferred shall be entitled to receive
out of the assets of the Corporation available for
distribution to shareholders, before any distribution of
assets shall be made to the holders of shares of Junior
Stock, an amount equal to One Hundred Dollars ($100.00) per
share. If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the amounts
payable with respect to the Series B Preferred and any
Parity Stock are not paid in full, the holder or holders of
the Series B Preferred and of such Parity Stock shall share
ratably in any such distribution of assets of the
Corporation in proportion to the full respective
preferential amounts to which they are entitled. After
payment to the holder or holders of the Series B Preferred
of the full preferential amount provided for in this Section
7 and after the payment of any other preferential amounts to
the holder or holders of other equity securities of the
Corporation, the holder or holders of the Series B Preferred
shall be entitled to share in distributions of any remaining
assets with the holders of Common Stock, pro-rata on an as-
if-converted basis, to the extent of $44.30 per share plus
accumulated and unpaid dividends, without interest, to and
excluding the date fixed for such distribution of assets.
Written notice of any liquidation, dissolution or winding up
of the Corporation shall be given to the holder or holders
of Series B Preferred not less than twenty (20) days prior
to the payment date. Neither the voluntary sale, conveyance,
exchange or transfer (for cash, securities or other
consideration) of all or any part of the property or assets
of the Corporation, nor the consolidation or merger or other
business combination of the Corporation with or into any
other corporation or corporations, shall be deemed to be a
voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, unless such voluntary sale,
conveyance, exchange or transfer shall be in connection with
a plan of liquidation, dissolution or winding up of the
Corporation.
8. Conversion Rights. (a) The holder of any Series B
Preferred shall have the right, at the holder's option, at
any time and from time to time, to convert any or all of
such shares into the number of shares of Common Stock of the
Corporation determined by dividing One Hundred Forty-four
and 30/100 Dollars ($144.30) for each share of Series B
Preferred to be converted by the then effective Conversion
Price per share of Common Stock, except that if any shares
of Series B Preferred are called for redemption by the
Corporation or submitted for redemption by the holder
thereof, according to the terms and provisions of this
Resolution, the conversion rights pertaining to such shares
shall terminate at the close of business on the date fixed
for redemption (unless the Corporation defaults in the
payment of the applicable redemption price). No fractional
shares of Common Stock shall be issued
upon conversion of Series B Preferred, but if such
conversion results in a fraction, an amount shall be paid in
cash by the Corporation to the converting holder equal to
same fraction of the Current Market Price of the Common
Stock on the effective date of the conversion.
(b) The initial conversion price, which is Seventy-two
and 15/100 Dollars ($72.15) per share of Common Stock, shall
be subject to appropriate adjustment from time to time as
follows and such initial conversion price or the latest
adjusted conversion price is referred to in this Resolution
as the "Conversion Price":
(i) In case the Corporation shall, at any time or from
time to time while any of the shares of the Series B
Preferred is outstanding (A) pay a dividend in shares of
Common Stock, (B) subdivide outstanding shares of Common
Stock into a larger number of shares or (C) combine
outstanding shares of Common Stock into a smaller number of
shares, the Conversion Price in effect immediately prior to
such action shall be adjusted so that the holder of any
shares of the Series B Preferred thereafter surrendered for
conversion shall be entitled to receive the number of shares
of Common Stock of the Corporation which such holder would
have owned or have been entitled to receive immediately
following such action had such shares of the Series B
Preferred been converted immediately prior thereto. An
adjustment made pursuant to this Section 8(b)(i) shall
become effective retroactively to immediately after the
record date for determination of the shareholders entitled
to receive the dividend in the case of a dividend and shall
become effective immediately after the effective date in the
case of a subdivision or combination.
(ii) In case the Corporation shall, at any time or from
time to time while any of the shares of the Series B
Preferred is outstanding, distribute or issue rights,
warrants, options or calls to all holders of shares of
Common Stock entitling them to subscribe for or purchase
shares of Common Stock (or securities convertible into or
exercisable or exchangeable for Common Stock), at a per
share price less than the Current Market Price on the record
date referred to below, the Conversion Price shall be
adjusted so that it shall equal the Conversion Price
determined by multiplying the Conversion Price in effect
immediately prior to the record date of the distribution or
issuance of such rights, warrants, options or calls by a
fraction, the numerator of which shall be the number of
shares of Common Stock outstanding on such record date plus
the number of shares which the aggregate offering price of
the total number of shares of Common Stock so offered would
purchase at such Current Market Price, and the denominator
of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of
additional shares of Common Stock offered for subscription
or purchase. For the purpose of this Section 8(b)(ii), the
distribution or issuance of rights, warrants, options or
calls to subscribe for or purchase securities convertible
into Common Stock shall be deemed to be
the issuance of rights, warrants, options or calls to
purchase the shares of Common Stock into which such
securities are convertible at an aggregate offering price
equal to the aggregate offering price of such securities
plus the minimum aggregate amount (if any) payable upon
conversion of such securities into shares of Common Stock;
provided, however, that if all of the shares of Common Stock
subject to such rights, warrants, options or calls have not
been issued when such rights, warrants, options or calls
expire, then the Conversion Price shall promptly be
readjusted to the Conversion Price which would then be in
effect had the adjustment upon the distribution or issuance
of such rights, warrants, options or calls been made on the
basis of the actual number of shares of Common Stock issued
upon the exercise of such rights, warrants, options or
calls. An adjustment made pursuant to this Section 8(b)(ii)
shall become effective retroactively immediately after the
record date for the determination of shareholders entitled
to receive such rights, warrants, options or calls. This
Section 8(b)(ii) shall be inapplicable with respect to any
rights issued or to be issued pursuant to or governed by the
Rights Agreement.
(iii) In the event the Corporation shall, at any time
or from time to time while any of the shares of Series B
Preferred are outstanding, issue, sell or exchange shares of
Common Stock (other than pursuant to (a) any right or
warrant now or hereafter outstanding to purchase or acquire
shares of Common Stock (including as such a right or warrant
any security convertible into or exchangeable for shares of
Common Stock), (b) any rights issued or to be issued
pursuant to or governed by the Rights Agreement and (c) any
employee, officer or director incentive or benefit plan or
arrangement (including any employment, severance or
consulting agreement) of the Corporation or any subsidiary
of the Corporation heretofore or hereafter adopted) for a
consideration having a Fair Market Value, on the date of
such issuance, sale or exchange, less than the Fair Market
Value of such shares on the date of issuance, sale or
exchange, then, subject to the provisions of Sections
8(b)(v) and (vii), the Conversion Price shall be adjusted by
multiplying such Conversion Price by the fraction the
numerator of which shall be the sum of (x) the Fair Market
Value of all the shares of Common Stock outstanding on the
day immediately preceding the first public announcement of
such issuance, sale or exchange plus (y) the Fair Market
value of the consideration received by the Corporation in
respect of such issuance, sale or exchange of shares of
Common Stock, and the denominator of which shall be the
product of (a) the Fair Market Value of a share of Common
Stock on the day immediately preceding the first public
announcement of such issuance, sale or exchange multiplied
by (b) the sum of the number of shares of Common Stock
outstanding on such day plus the number of shares of Common
Stock so issued, sold or exchanged by the Corporation. In
the event the Corporation shall, at any time or from time to
time while any shares of Series B Preferred are outstanding,
issue, sell or exchange any right or warrant to purchase or
acquire shares of Common Stock (including as such a right or
warrant any security convertible into or exchangeable for
shares of Common Stock), other than any such issuance (a) to
holders of shares of Common Stock
as a dividend or distribution (including by way of a
reclassification of shares or a recapitalization of the
Corporation), (b) pursuant to any employee, officer or
director incentive or benefit plan or arrangement (including
any employment, severance or consulting agreement) of the
Corporation or any subsidiary of the Corporation heretofore
or hereafter adopted, (c) of rights issued or to be issued
pursuant to or governed by the Rights Agreement and (d)
which is covered by the terms and provisions of Section
8(b)(ii) hereof, for a consideration having a Fair Market
Value, on the date of such issuance, sale or exchange, less
than the Non-Dilutive Amount, then, subject to the
provisions of Sections 8(b)(v) and (vii) hereof, the
Conversion Price shall be adjusted by multiplying such
Conversion Price by a fraction the numerator of which shall
be the sum of (I) the Fair Market Value of all the shares of
Common Stock outstanding on the day immediately preceding
the first public announcement of such issuance, sale or
exchange plus (II) the Fair Market Value of the
consideration received by the Corporation in respect of such
issuance, sale or exchange of such right or warrant plus
(III) the Fair Market Value at the time of such issuance of
the consideration which the Corporation would receive upon
exercise in full of all such rights or warrants, and the
denominator of which shall be the product of (x) the Fair
Market Value of a share of Common Stock on the day
immediately preceding the first public announcement of such
issuance, sale or exchange multiplied by (y) the sum of the
number of shares of Common Stock outstanding on such day
plus the maximum number of shares of Common Stock which
could be acquired pursuant to such right or warrant at the
time of the issuance, sale or exchange of such right or
warrant (assuming shares of Common Stock could be acquired
pursuant to such right or warrant at such time).
(iv) In the event the Corporation shall, at any time or
from time to time while any of the shares of Series B
Preferred are outstanding, make an Extraordinary
Distribution in respect of the Common Stock, whether by
dividend, distribution, reclassification of shares or
recapitalization of the Corporation (including a
recapitalization or reclassification effected by a merger
or consolidation to which Section 8(c) hereof does not
apply) or effect a Pro Rata Repurchase of Common Stock, the
Conversion Price in effect immediately prior to such
Extraordinary Distribution or Pro Rata Repurchase shall,
subject to Sections 8(b)(v) and (vii) hereof, be adjusted by
multiplying such Conversion Price by the fraction the
numerator of which is the difference between (a) the product
of (x) the number of shares of Common Stock outstanding
immediately before such Extraordinary Distribution or Pro
Rata Repurchase multiplied by (y) the Fair Market Value of a
share of Common Stock on the day before the ex-dividend date
with respect to an Extraordinary Distribution which is paid
in cash and on the distribution date with respect to an
Extraordinary Distribution which is paid other than in cash,
or on the applicable expiration date (including all
extensions thereof) of any tender offer which is a Pro Rata
Repurchase, or on the date of purchase with respect to any
Pro Rata Repurchase which is not a tender offer, as the case
may be, and
(b) the Fair Market Value of the Extraordinary Distribution
or the aggregate purchase price of the Pro Rata Repurchase,
as the case may be, and the denominator of which shall be
the product of (x) the number of shares of Common Stock
outstanding immediately before such Extraordinary Dividend
or Pro Rata Repurchase minus, in the case of a Pro Rata
Repurchase, the number of shares of Common Stock repurchased
by the Corporation multiplied by (y) the Fair Market Value
of a share of Common Stock on the day before the ex-dividend
date with respect to an Extraordinary Distribution which is
paid in cash and on the distribution date with respect to an
Extraordinary Distribution which is paid other than in cash,
or on the applicable expiration date (including all
extensions thereof) of any tender offer which is a Pro Rata
Repurchase or on the date of purchase with respect to any
Pro Rata Repurchase which is not a tender offer, as the case
may be. The Corporation shall send each holder of Series B
Preferred (i) notice of its intent to make any dividend or
distribution and (ii) notice of any offer by the Corporation
to make a Pro Rata Repurchase, in each case at the same time
as, or as soon as practicable after, such offer is first
communicated (including by announcement of a record date in
accordance with the rules of any stock exchange on which the
Common Stock is listed or admitted to trading) to holders of
Common Stock. Such notice shall indicate the intended record
date and the amount and nature of such dividend or
distribution, or the number of shares subject to such offer
for a Pro Rata Repurchase and the purchase price payable by
the Corporation pursuant to such offer, as well as the
Conversion Price and the number of shares of Common Stock
into which a share of Series B Preferred may be converted at
such time.
(v) If the Corporation shall make any dividend or
distribution on the Common Stock or issue any Common Stock,
other capital stock or other security of the Corporation or
any rights or warrants to purchase or acquire any such
security, which transaction does not result in an adjustment
to the Conversion Price pursuant to this Section 8, the
Board of Directors shall consider whether such action is of
such a nature that an adjustment to the Conversion Price
should equitably be made in respect of such transaction. If
in such case the Board of Directors determines that an
adjustment to the Conversion Price should be made, an
adjustment shall be made effective as of such date, as
determined by the Board of Directors (which adjustment shall
in no event adversely affect the rights or preferences of
the Series B Preferred as set forth herein). The
determination of the Board of Directors as to whether an
adjustment to the Conversion Price should be made pursuant
to the foregoing provisions of this Section 8(b)(v), and, if
so, as to what adjustment should be made and when, shall be
final and binding on the Corporation and all shareholders of
the Corporation.
(vi) In addition to the foregoing adjustments, the
Corporation may, but shall not be required to, make such
adjustments in the Conversion Price as it considers to be
advisable in order that any event treated for federal income
tax purposes as a dividend of stock or
stock rights shall either not be taxable to the recipients
or shall be taxable to the recipients to the minimum extent
reasonable under the circumstances, as determined by the
Board of Directors in its sole discretion.
(vii) In no event shall an adjustment in the Conversion
Price be required unless such adjustment would result in an
increase or decrease of at least one percent (1%) in the
Conversion Price then in effect; provided, however, that any
such adjustments that are not made shall be carried forward
and taken into account in determining whether any subsequent
adjustment is required. In no event shall the Conversion
Price be adjusted to an amount less than any minimum
required by law. Except as set forth in this Section 8, the
Conversion Price shall not be adjusted for the issuance of
Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or carrying
the right or option to purchase or otherwise acquire the
foregoing, in exchange for cash, other property or services.
(viii) Whenever an adjustment in the Conversion Price
is required, the Corporation shall forthwith place on file
with its transfer agent (or if the Corporation performs the
functions of a transfer agent, with the corporate secretary)
a statement signed by its chief executive officer or a vice
president and by its secretary, assistant secretary or
treasurer, stating the adjusted Conversion Price determined
as provided herein. Such statements shall set forth in
reasonable detail such facts as shall be necessary to show
the reason and the manner of computing such adjustment. As
soon as practicable after the adjustment of the Conversion
Price, the Corporation shall mail a notice thereof to each
holder of shares of the Series B Preferred of such
adjustment.
(ix) In the event that at any time, as a result of an
adjustment made pursuant to this Section 8, the holder of
any shares of Series B Preferred hereafter surrendered for
conversion shall be entitled to receive any securities other
than shares of Common Stock, thereafter the amount of such
other securities so receivable upon conversion of any shares
of Series B Preferred shall be subject to adjustment from
time to time in a manner and on terms as nearly as
equivalent as practicable to the provisions with respect to
the Common Stock contained in this Section 8, and the
provisions of this Section 8 with respect to the Common
Stock shall apply on like terms to any such other
securities.
(c) In case of any consolidation or merger of the
Corporation with or into any other corporation (other than a
merger in which the Corporation is the surviving
corporation), or in case of any sale or transfer of
substantially all -the assets of the Corporation, or in case
of reclassification, capital reorganization or change of
outstanding shares of Common Stock (other than combinations
or subdivisions described in Section 8(b)(i) and other than
Extraordinary Distributions described in Section 8(b)(iv)),
there shall be no adjustment to the Conversion Price then in
effect, but appropriate provisions shall be
made so that any holder of Series B Preferred shall be
entitled, after the occurrence (or, if applicable, the
record date) of any such event ("Transaction"), to receive
on conversion the consideration which the holder would have
received had the holder converted such holder's Series B
Preferred to Common Stock immediately prior to the
occurrence of the Transaction and had such holder, if
applicable, elected to receive the consideration in the form
and manner elected by the plurality of the electing holders
of Common Stock. In any such Transaction, effective
provisions shall be made to ensure that the holder or
holders of the Series B Preferred shall receive the
consideration that they are entitled to receive pursuant to
the provisions hereof, and in particular, as a condition to
any consolidation or merger in which the holders of
securities into which the Series B Preferred is then
convertible are entitled to receive equity securities of
another corporation, such other corporation shall expressly
assume the obligation to deliver, upon conversion of the
Series B Preferred, such equity securities as the holder or
holders of the Series B Preferred shall be entitled to
receive pursuant to the provisions hereof. Notwithstanding
the foregoing provisions of this Section 8(c), in the event
the consideration to be received pursuant to the provisions
hereof is not to be constituted solely of employer
securities within the meaning of 409(1) of the Internal
Revenue Code of 1986, as amended, or any successor
provisions of law, and of a cash payment in lieu of any
fractional securities, then the outstanding shares of Series
B Preferred shall be deemed converted by virtue of the
Transaction immediately prior to the consummation thereof
into the number and kind of securities into which such
shares of Series B Preferred could have been voluntarily
converted at such time and such securities shall be entitled
to participate fully in the Transaction as if such
securities had been outstanding on the appropriate record,
exchange or distribution date. In the event the Corporation
shall enter into any agreement providing for any
Transaction, then the Corporation shall as soon as
practicable thereafter (and in any event at least ten (10)
Business Days before consummation of the Transaction) give
notice of such agreement and the material terms thereof to
each holder of Series B Preferred and each such holder shall
have the right, to the extent permitted by applicable law,
to elect, by written notice to the Corporation, to receive,
upon consummation of the Transaction (if and when the
Transaction is consummated), from the Corporation or the
successor of the Corporation, in redemption of such Series B
Preferred, a cash payment per share equal to the amount
determined according to the following table, with the
redemption date to be deemed to be the same date that the
Transaction giving rise to the redemption election is
consummated:
Transaction
Consummated in Year Redemption Price
Ending December 31 per Share
- --------------------- ----------------
1990 $156.02
1991 154.72
1992 153.42
1993 152.12
1994 150.82
1995 149.52
1996 148.22
1997 146.92
1998 145.62
1999 and thereafter 144.30
plus accumulated and unpaid dividends, without interest, to
and excluding such deemed redemption date. No such notice of
redemption by the holder of Series B Preferred shall be
effective unless given to the Corporation prior to the close
of business at least two (2) Business Days prior to
consummation of the Transaction.
(d) The holder or holders of Series B Preferred as they
appear on the stock books of the Corporation at the close of
business on a dividend payment Record Date shall be entitled
to receive the dividend payable on such shares on the
corresponding Dividend Payment Date notwithstanding the
subsequent conversion thereof or the Corporation's default
on payment of the dividend due on such Dividend Payment
Date; provided, however, that the holder or holders of
Series B Preferred subject to redemption on a redemption
date after such Record Date and before such Dividend Payment
Date shall not be entitled under this provision to receive
such dividend on such Dividend Payment Date. However, shares
of Series B Preferred surrendered for conversion during the
period after any dividend payment Record Date and before the
corresponding Dividend Payment Date (except shares subject
to redemption on a redemption date during such period) must
be accompanied by payment of an amount equal to the dividend
payable on such shares on such Dividend Payment Date. The
holder or holders of Series B Preferred as they appear on
the stock books of the Corporation at the close of business
on a dividend payment Record Date who convert shares of
Series B Preferred on a Dividend Payment Date shall be
entitled to receive the dividend payable on such Series B
Preferred by the Corporation on such Dividend Payment Date,
and the converting holders need not include payment in the
amount of such dividend upon surrender of shares of Series B
Preferred for conversion. Except as provided above, the
Corporation shall make no payment or allowance for unpaid
dividends (whether or not accumulated and in arrears) on
converted shares or for dividends on the shares of Common
Stock issuable upon such conversion.
(e) Each conversion of shares of Series B Preferred
into shares of Common Stock shall be effected by the
surrender of the certificate or certificates representing
the shares to be converted, accompanied
by instruments of transfer satisfactory to the Corporation
and sufficient to transfer such shares to the Corporation
free of any adverse claims (the "Converting Shares"), at the
principal executive office of the Corporation (or such other
office or agency of the Corporation as the Corporation may
designate by written notice to the holder or holders of
Series B Preferred) at any time during its respective usual
business hours, together with written notice by the holder
of such Converting Shares, stating that such holder desires
to convert the Converting Shares, or a stated number of the
shares represented by such certificate or certificates, into
such number of shares of Common Stock into which such shares
may be converted (the "Converted Shares"). Such notice shall
also state the name or names (with addresses and federal
taxpayer identification numbers) and denominations in which
the certificate or certificates for the Converted Shares are
to be issued, shall include instructions for the delivery
thereof and shall include such other information as the
Corporation or its agents may reasonably request. Promptly
after such surrender and the receipt of such written notice
and the receipt of any required transfer documents and
payments representing dividends as described above, the
Corporation shall issue and deliver in accordance with the
surrendering holder's instructions the certificate or
certificates evidencing the Converted Shares issuable upon
such conversion, and the Corporation will deliver to the
converting holder (without cost to the holder) a certificate
(which shall contain such legends as were set forth on the
surrendered certificate or certificates) representing any
shares of Series B Preferred which were represented by the
certificate or certificates that were delivered to the
Corporation in connection with such conversion, but which
were not converted.
(f) Such conversion, to the extent permitted by
applicable law, shall be deemed to have been effected at the
close of business on the date on which such certificate or
certificates shall have been surrendered and such notice and
any required transfer documents and payments representing
dividends shall have been received by the Corporation, and
at such time the rights of the holder of the Converting
Shares as such holder shall cease, and the person or persons
in whose name or names the certificate or certificates for
the Converted Shares are to be issued upon such conversion
shall be deemed to have become the holder or holders of
record of the Converted Shares. Upon issuance of shares in
accordance herewith, such Converted Shares shall be deemed
to be fully paid and nonassessable. From and after the
effectiveness of any such conversion, shares of the Series B
Preferred so converted shall, upon compliance with
applicable law, be restored to the status of authorized but
unissued undesignated shares, until such shares are once
more designated as part of a particular series by the Board
of Directors.
(g) Notwithstanding any provision herein to the
contrary, the Corporation shall not be required to record
the conversion of, and no holder of shares shall be entitled
to convert, shares of Series B Preferred into shares of
Common Stock unless such conversion is
permitted under applicable law; provided, however, that the
Corporation shall be entitled to rely without independent
verification upon the representation of any holder that the
conversion of shares by such holder is permitted under
applicable law, and in no event shall the Corporation be
liable to any such holder or any third party arising from
any such conversion whether or not permitted by applicable
law.
(h) The Corporation will pay any and all stamp,
transfer or other similar taxes that may be payable in
respect of the issuance or delivery of Common Stock received
upon conversion of the shares of Series B Preferred, but
shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issuance
or delivery of Common Stock in a name other than that in
which such shares of Series B Preferred were registered and
no such issuance or delivery shall be made unless and until
the person requesting such conversion shall have paid to the
Corporation the amount of any and all such taxes or shall
have established to the satisfaction of the Corporation that
such taxes have been paid in full.
(i) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its
authorized but unissued stock, for the purpose of effecting
the conversion of the shares of the Series B Preferred, such
number of its duly authorized shares of Common Stock or
other securities as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the
Series B Preferred.
(j) Whenever the Corporation shall issue shares of Common
Stock upon conversion of shares of Series B Preferred as
contemplated by this Section 8, the Corporation shall issue
together with each such share of Common Stock one Right (as
defined in the Rights Agreement) pursuant to the terms and
provisions of the Rights Agreement.
9. Transfer Restriction. Shares of Series B Preferred
shall be issued only to the Plan and Trust and the
certificate or certificates representing such shares so
issued may be registered in the name of the Plan and Trust
or in the name of one or more Trustees acting on behalf of
the Plan and Trust (or the nominee name of any such
trustee). In the event the Plan and Trust, acting through
any such trustee or otherwise, should transfer beneficial or
record ownership of one or more shares of Series B Preferred
to any person or entity, the shares of Series B Preferred
so transferred, upon such transfer and without any further
action by the Corporation or the Plan and Trust or anyone
else, shall be automatically converted, as of the time of
such transfer, into shares of Common Stock on the terms
otherwise provided for the voluntary conversion of shares of
Series B Preferred into shares of Common Stock pursuant to
Section 8 hereof and no transferee of such share or shares
shall thereafter have or receive any of the rights and
preferences of the shares of Series B Preferred so
converted. Certificates representing shares of Series B
Preferred shall be legended to
reflect the aforesaid restriction on transfer. Shares of
Series B Preferred may also be subject to restrictions on
transfer which relate to the securities laws of the United
States of America or any state or other jurisdiction
thereof.
10. No other Rights. The shares of Series B Preferred
shall not have any rights or preferences, except as set
forth herein or as otherwise required by applicable law.
11. Rules and Regulations. The Board of Directors shall
have the right and authority from time to time to prescribe
rules and regulations as it may determine to be necessary or
advisable in its sole discretion for the administration of
the Series B Preferred in accordance with the foregoing
provisions and applicable law.
12 . Definitions . For purposes of this Resolution, the
following definitions shall apply:
"Adjustment Period" shall mean the period of five (5)
consecutive trading days preceding the date as of which the
Fair Market Value of a security is to be determined.
"Business Day" shall mean each day that is not a Saturday,
Sunday or a day on which state or federally chartered
banking institutions in New York, New York are not required
to be open.
"Current Market Price" of publicly traded shares of Common
Stock or any other class of capital stock or other security
of the Corporation or any other issuer for any day shall
mean the last reported sales price, regular way, or, in the
event that no sale takes place on such day, the average of
the reported closing bid and asked prices, regular way, in
either case as reported on the New York Stock Exchange
Composite Tape or, if such security is not listed or
admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which such
security is listed or admitted to trading or, if not listed
or admitted to trading on any national securities exchange,
on the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or, if such security is not quoted on such
National Market System, the average of the closing bid and
asked prices on each such day in the over-the-counter market
as reported by NASDAQ or, if bid and asked prices for such
security on each such day shall not have been reported
through NASDAQ, the average of the bid and asked prices for
such day as furnished by any New York Stock Exchange member
firm regularly making a market in such security selected for
such purpose by the Board of Directors or a committee
thereof.
"Extraordinary Distribution" shall mean any dividend or
other distribution to holders of Common Stock (effected
while any of the shares of Series B Preferred are
outstanding) (i) of cash (other than a regularly scheduled
quarterly dividend not exceeding 135% of the average
quarterly dividend for the four quarters immediately
preceding such dividend), where the aggregate amount of such
cash dividend or
distribution together with the amount of all cash dividends
and distributions made during the preceding period of twelve
(12) months, when combined with the aggregate amount of all
Pro Rata Repurchases (for this purpose, including only that
portion of the aggregate purchase price of such Pro Rata
Repurchase which is in excess of the Fair Market Value of
the Common Stock repurchased as determined on the applicable
expiration date (including all extensions thereof) of any
tender offer or exchange offer which is a Pro Rata
Repurchase, or the date of purchase with respect to any
other Pro Rata Repurchase which is not a tender offer or
exchange offer made during such period), exceeds ten percent
(10%) of the aggregate Fair Market Value of all shares of
Common Stock outstanding on the day before the ex-dividend
date with respect to such Extraordinary Distribution which
is paid in cash and on the distribution date with respect to
an Extraordinary Distribution which is paid other than in
cash, and/or (ii) of any shares of capital stock of the
Corporation (other than shares of Common Stock), other
securities of the Corporation (other than securities of the
type referred to in Section 8(b)(ii) or (iii) hereof),
evidences of indebtedness of the Corporation or any other
person or any other property (including shares of any
subsidiary of the Corporation) or any combination thereof.
The Fair Market Value of an Extraordinary Distribution for
purposes of Section 8(b)(iv) hereof shall be equal to the
sum of the Fair Market Value of such Extraordinary
Distribution plus the amount of any cash dividends (other
than regularly scheduled dividends not exceeding 135% of the
aggregate quarterly dividends for the preceding period of
twelve (12) months) which are not Extraordinary
Distributions made during such 12-month period and not
previously included in the calculation of an adjustment
pursuant to Section 8(b)(iv) hereof.
"Fair Market Value" shall mean, as to shares of Common Stock
or any other class of capital stock or securities of the
Corporation or any other issue which are publicly traded,
the average of the Current Market Prices of such shares or
securities for each day of the Adjustment Period. The "Fair
Market Value" of any security which is not publicly traded
or of any other property shall mean the fair value thereof
as determined by an independent investment banking or
appraisal firm experienced in the valuation of such
securities or property selected in good faith by the Board
of Directors or a committee thereof, or, if no such
investment banking or appraisal firm is in the good faith
judgment of the Board of Directors or such committee
available to make such determination, as determined in good
faith by the Board of Directors or such committee. The Fair
Market Value of the Series B Preferred for purposes of
Section 5(a) hereof and for purposes of Section 6 hereof
shall be as determined by an independent appraiser,
appointed by the Corporation in accordance with the
provisions of the Plan and Trust, as of the most recent
Valuation Date, as defined in the Plan and Trust.
"Non-Dilutive Amount" in respect of an issuance, sale or
exchange by the Corporation of any right or warrant to
purchase or acquire shares of Common Stock (including any
security convertible into or exchangeable for shares of
Common Stock) shall mean the difference between (i) the
product of the Fair Market Value of a share of Common Stock
on the day preceding the first public announcement of such
issuance, sale or exchange multiplied by the maximum number
of shares of Common Stock which could be acquired on such
date upon the exercise in full of such rights and warrants
(including upon the conversion or exchange of all such
convertible or exchangeable securities), whether or not
exercisable (or convertible or exchangeable) at such date,
and (ii) the aggregate amount payable pursuant to such
right or warrant to purchase or acquire such maximum number
of shares of Common Stock; provided, however, that in no
event shall the Non-Dilutive Amount be less than zero. For
purposes of the foregoing sentence, in the case of a
security convertible into or exchangeable for shares of
Common Stock, the amount payable pursuant to a right or
warrant to purchase or acquire shares of Common Stock shall
be the Fair Market Value of such security on the date of
the issuance, sale or exchange of such security by the
Corporation.
"Pro Rata Repurchase" shall mean any purchase of shares of
Common Stock by the Corporation or any subsidiary thereof,
whether for cash, shares of capital stock of the
Corporation, other securities of the Corporation, evidences
of indebtedness of the Corporation or any other person or
any other property (including shares of a subsidiary of the
Corporation), or any combination thereof, effected while
any of the shares of Series B Preferred are outstanding,
pursuant to any tender offer or exchange offer subject to
Section 13(e) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any successor provision of
law, or pursuant to any other offer available to
substantially all holders of Common Stock; provided,
however, that no purchase of shares by the Corporation or
any subsidiary thereof made in open market transactions
shall be deemed a Pro Rata Repurchase. For purposes of this
definition, shares shall be deemed to have been purchased
by the Corporation or any subsidiary thereof "in open
market transactions" if they have been purchased
substantially in accordance with the requirements of Rule
10b-18, as in effect under the Exchange Act, on the date
shares of Series B Preferred are initially issued by the
Corporation or on such other terms and conditions as the
Board of Directors or a committee thereof shall have
determined are reasonably designed to prevent such
purchases from having a material effect on the trading
market for the Common Stock.